Floor Statements

Mr. President, the managers' amendment to the farm bill contains a deal that raises my eyebrows. The proposal creates a half billion dollars in strippable, tradable, ``forestry tax-credit bonds'' that can be issued by a State or tax-exempt entity. Property must be approved by the U.S. Fish and Wildlife Service as subject to a ``native fish habitat conservation plan.'' So far, we can only find one plan that qualifies for this proposal. The proposal also completely unwinds the arbitrage rules that were placed on these tax-credit bonds last year to prevent abuses.

Most Americans do not know what tax-credit bonds are or even that they exist. Essentially, these are bonds in which the federal government pays ``interest'' in the form of credits against Federal income tax liability. Issuers borrow at a zero percent interest rate. The Federal tax subsidy provided to the holder of a tax credit bond is even greater than the benefit derived from tax-exempt municipal bonds. That is because a tax credit can be used to offset, on a dollar-for- dollar basis, a holder's current year tax liability. With tax credit bonds, the Federal Government bears virtually all of the cost of borrowing--in the form of forgone revenue--even if the bonds are issued by a non-Federal entity such as a State or local government. So, in short, this is a rich deal.

When the tax credit bond program was initiated, the arbitrage rules did not apply. However, we became aware of arbitrage abuses in 2006. In response, Congress enacted arbitrage restrictions for these bonds. They are the same restrictions that already apply to tax-exempt municipal bonds. The Tax Reform Act of 1969 enacted the first rules relating to arbitrage. Congress was concerned that permitting interest exemption for arbitrage bonds represented a waste of the Federal subsidy.

One of the concerns Congress addressed was the use of sinking funds to exploit the difference between tax-exempt and taxable rates. The best way to understand these rules is to use an example. Let's assume City X needs to borrow $10,000 to finance a project. City X could issue bonds that pay no principal or interest until year 10 and fund its year 10 liability by depositing amounts into a special fund--a ``sinking fund''--that will build up over time and be used to pay off the interest and principal in the 10th year.

In the absence of arbitrage restrictions, City X can invest amounts in the sinking fund over the term of the bonds at a higher yield than the yield on the bonds--remember that tax-exempt bonds accrue interest at zero percent. This would allow City X to earn more than is needed to pay both the principal and interest on the bonds at maturity. This is a subsidy funded by the

Federal government and paid for by tax increases on Americans.

The tax credit bond program already provides a richer subsidy than the long standing tax exempt bond program. This proposal further enriches this program, at the expense of taxpayers, and opens the door for future abuse. This provision may set a dangerous precedent and unwind all of the good work that was done to ensure that arbitrage abuses of tax credit bonds were curtailed.

Would the Senator from Montana yield me some time, please?

Why don't you say how much I can have.

I would like to have 5 minutes.

Mr. President, what the Senator from Montana is trying to do has to be done if we are going to have justice for the family farmer. We have been involved in suits regarding the packing houses for 20 years. I remember when I first came to Congress, we were trying to overturn the Illinois Brick case because it stood in the way of the family farmer getting justice in business. So you end up fighting the National Manufacturers Association and the U.S. Chamber of Commerce to bring justice to family farmers.

Finally, in a lawsuit down in Alabama, we get a jury who says the family farmer is right, but you get a judge who overrules the jury.

Now, I want to speak about not just this particular case, because Senator Tester is doing that, but I hope everybody in this Senate remembers that on several different occasions, everybody in the food chain beyond the farmer's gate was lining up against the farmer. I will cite just a recent example in regard to food and fuel and the ethanol issue and corn going to $4 and the price of food going up and every farmer getting blamed for it. Every person in the food chain outside of the farmer's gate was involved in that conspiracy that had nothing to do with the price of food rising, but the family farmer got blamed for it when food went to $4--or when corn went to $4. But when the price of corn went down to $2.85, I didn't see the price of food go down. But the conspiracy exists.

This court case and this judge and this ruling on the Packers and Stockyards Act is contributing to that conspiracy. We need to get behind it and get some justice for the family farmer.

Now, if you want to know why there is a justification in doing what we are doing, all you have to do is go to a statement that a CEO of a major corporation made a few years ago--a little bit unrelated to this, but somewhat related to it--which is: Why do slaughterhouses and packing companies own livestock? We own livestock, the answer was, in a very candid way; we own livestock because when prices are high, we kill our own, and when prices are low, we buy from the farmer.

What we need is a marketplace that has a great deal of transparency. We fight, trying to get information on sales from these packing companies under price discovery. We pass legislation to make price discovery real. Then we get regulations from the U.S. Department of Agriculture--we get regulations from the U.S. Department of

Agriculture to the extent that we do not meet the goals of the legislation, and we don't get as much information under the regulations of the Department.

I had a staff person who just wanted to go back to Iowa and work for the Department of Agriculture. He is going to work for the Packers and Stockyards Act. I said to him: You know, you want to go there because you don't want to do anything, because they don't do anything to help the family farmer. I didn't change his mind. He is still there working, and I hope he is doing a good job. He knows how I feel about it. Maybe he will actually get something done.

But we have to get rid of this attitude that you are going to let everybody beyond the farmer's gate gang up on the farmers, particularly when there is a court case where the jury is giving justice to the farmers.

We have to pass this amendment so we get justice for the family farmer.

I yield the floor.

Madam President, I would like to speak for 5 minutes.

Madam President, it would be easy to say I associate myself with the remarks of the Senator from Kansas and let it be that way. But I was around when we set up the Federal crop insurance program. I wish to reflect on the rationale behind it and then, consequently, why I am going to vote against Senator Brown's amendment.

Remember, for decades of a farm program, we may have had some crop insurance through the Government--and for hail through the private sector--that farmers could buy for some protection, but, for the most part, against natural disasters people relied upon the political whims of Congress to vote for or not to vote for disaster aid.

So this crop insurance program was put in place to give farmers the ability to manage their risk, let the individual farmer make some determinations so he can take risks out of farming, out of the natural disasters that are connected with it--even now, you can take some of the price questions out that are involved with it--and manage his own risk as opposed to relying upon the Senators and the Congressmen to vote or not to vote or when to vote for disaster relief.

So we put this in place. In order for it to be successful, you have to have a network to carry it out. This network is a private-sector network. I think it is working very well. I think it is in jeopardy if the Brown amendment is adopted.

So I have some concerns about the amendment. It could have some very detrimental impacts on the crop insurance program that is so valuable to rural America. So I urge my colleagues to oppose this amendment because I do not believe the amendment is reform. It moves us back to a time when there was more of a reliance upon the political whims of Washington to devote disaster relief.

The amendment seeks to further cut support of the Federal crop insurance program by several billion dollars simply to fund other projects. Additional cuts beyond what the Agriculture Committee has already adopted will prevent the program from providing assistance to America's farmers that is so vital to risk management.

Over the years, Congress has insisted on having the Federal crop insurance program reach out to all farmers, especially small, beginning, and limited-recourse farmers. This is to be done in a fair, equitable, and nondiscriminatory manner, serving as an effective risk- management tool that all can use.

According to the Department of Agriculture, the program is succeeding at this objective. Additionally, crop insurance has become essential to many farmers in securing credit from a bank, rental agreements, as well as providing confidence to more effectively market their crops through the futures market where they can capture higher prices.

The farmers in my State and across the country have used this tool over and over. It must be effective or they would not be using it and paying the premiums each year.

The Senate Agriculture Committee reported a farm bill that contained a two-point cut to the administrative and operating reimbursement, a cut that represents nearly $750 million in reduced program cost. Any cuts to the A&O reimbursement rate beyond those two points that were agreed upon by the committee will likely undermine the program by threatening the service America's farmers both need and deserve.

Further cuts could also jeopardize the continued viability of the private delivery system that is vital to the program's success. This could put private-sector employees out of work and result in the hiring of new Federal employees to serve farmers. Private-sector delivery is efficient and results in good services.

Approximately 30,000 jobs are created by this industry. Those would be in jeopardy, and we would not have small farmers and ranchers serviced the way they are now.

Further, the amendment's proposal to increase the quota share could weaken the crop insurance program and may result in private insurers exiting the program.

In fact, increasing the quota share is counter to the Federal policy of the past 25 years, which successfully has shifted more risk to the private sector for two primary reasons. First, private companies do a better job at loss adjustment. Both the Inspector General and the GAO have repeatedly focused on that point. Second, by shifting more risk to the private sector, Federal costs should be lower over time, as companies have more financial responsibility for indemnities.

It has taken more than 25 years, and we do not want to lose that 25 years.

As a matter of transparency, I wish to tell everybody in the Senate that I participate in a crop insurance program. My constituents ought to know it, and my colleagues voting on it ought to know that as well.

Mr. President, I ask for the regular order on amendment No. 3823.

I am asking for the regular order on amendment No. 3823.

I ask for the regular order.

The managers of the amendments are trying to get amendments brought up. I am ready to go, and they asked if I was ready to go.

Mr. President, amendment No. 3823 deals with agricultural competition and increased consolidation in the agricultural industry. The amendment is cosponsored by me, Senator Grassley, and two Democrats--Senator Kohl and Senator Harkin.

I wish to make it very clear--and I will get into some detail--there may be some people who feel the amendment I have put before the Senate is exactly the same as a bill Senator Kohl and I had introduced previously. It is very slimmed down from that bill. So any staff who is watching the debate and getting nervous about an amendment coming up that every big industry in the United States may find fault with, we are talking about a very slimmed-down version of it. I will explain all that shortly.

I have been concerned with competition in the agricultural marketplace and increased competition in the agricultural industry for quite some time now. You have heard me speak about it on the floor. We have had hearings on it. I had hearings in the Senate Finance Committee, as well as hearings I participated in under both Republican and Democratic chairmanships of the Judiciary Committee.

Agriculture, as you know, is a fairly risky business. I know that from personal experience because I have lived and worked on a farm all my life. But for some time, working in agriculture has become even more difficult for the little guy. The trend has been for companies in the agricultural sector to consolidate. I am talking about businesses that serve agriculture with input. I am talking about industry that processes agriculture. So there has been consolidation in that industry. I am not talking about the consolidation of farms. There has been that as well. That has been going on since 1790, when 90 percent of the people in this country were farmers. Today, 2 percent of the people in this country are farmers. I am talking about the impact of agriculture agribusiness consolidation and the impact upon the 2 percent of the people in this country who are farmers.

This consolidation has created new business giants impacting competition in the marketplace for the family farmers, for producers, and for consumers. Family farms and independent producers are feeling the pressure of concentration in agriculture. Small and independent producers are seeing fewer choices--who the farmer can buy from and to whom the farmer can sell.

All this consolidation in industry at both the horizontal and vertical levels leads to the very real possibility of fewer product choices and higher prices for consumers.

I don't believe all mergers are, per se, bad, and I don't believe all are wrong and all lead to unfairness. But I think at the same time we need to make sure--we need to make very sure--open and fair access to the marketplace is preserved for everyone. We need to make sure large businesses are not acting in a predatory or anticompetitive manner. We need to make sure family farmers and independent producers can compete on a level playing field. We need to make sure consumers have as many choices as possible.

So I am not talking just about mergers and lack of competition being harmful just to farmers, I am talking about the impact that might have on consumers paying more. The antitrust laws are all about protecting consumers, not about protecting producers. But in the case of family farmers, they are purchasers of input, and so they are consumers. But they also have to make sure that the marketplace is protected for the ultimate end-consumer, the consumer of our agricultural products.

By looking out for these things, you know what we end up doing, Mr. President? We keep our economy strong because of competition. We keep our agricultural community vibrant. We keep it competitive. And hopefully, in the end, we keep our consumers happy, with quality food at a relatively inexpensive price. American consumers don't know that, but they already have that environment from our farmers. We take too much for granted in America, so I am not so sure consumers know that, and I like to remind them from time to time.

So we have this amendment before us. It is an amendment cosponsored, as I said, by Senator Kohl and Senator Harkin. The language of this amendment draws from a bill that Senator Kohl, Senator Thune, and I introduced earlier this year--S. 1759. It is called the Agriculture Competition Enhancement Act, ACE for short. We call it the ACE Act. However--and this is the point I started out with--I wish to make clear that this amendment which is being offered to the farm bill is quite different from the ACE Act as originally introduced earlier this year. Amendment No. 3823, which I have called up here under regular order, does not include all the provisions of S. 1759 and either eliminates provisions in that bill or incorporates many changes to address concerns raised by members of the agricultural industry, by the administration, as well as Senators on both sides of the aisle.

I also worked with the chairman and ranking member of the Judiciary Committee because this bill, S. 1759, was referred to the Judiciary Committee. Because we are offering it as an amendment to this bill, I also worked with the ranking member of the Agriculture Committee to address issues that were in that original S. 1759, which I was hoping to offer here, to take care of some opposition to this bill coming up and yet still accomplishing quite a bit about the problems I see with lack of competition. So the amendment I have called up under regular order is the product of these discussions we had with business, with agricultural leaders, with the White House--or I should say with the administration generally, not necessarily the White House--and, of course, with the Judiciary Committee members and the ranking member of the Agriculture Committee.

Now, I want to explain what this bill does after having explained to you, as I just did, that it is not what we had introduced as a bill.

First, the amendment would create an Agriculture Competition Task Force to study problems in agricultural competition, establish ways to coordinate Federal and State activities to address competition problems in agriculture, and make recommendations to Congress. In particular, the task force would establish a smaller working group on buyer power to study the effects of concentration, the effects of monopsony, and the effects of oligopsony in agriculture, and make recommendations to the Department of Justice and to the Federal Trade Commission on and for agricultural guidelines. The task force will help give our antitrust regulators real insight and expertise specific to the farm community that I believe is currently lacking when they address competition issues in agriculture.

Second, the amendment would require the Justice Department and the Federal Trade Commission to issue agricultural guidelines, taking into account the special conditions of the agriculture industry, and require the Department of Justice and the Federal Trade Commission to report to Congress on the guidelines.

Both the Senate Judiciary Committee and the Agriculture Committee heard witnesses in several hearings testify that there is a need for agriculture-specific guidelines when the Department of Justice and the Federal Trade Commission look at agriculture mergers.

Currently, the Department of Justice and the Federal Trade Commission have guidelines for specific industries and issues, such as health care and intellectual property, but not for agriculture. So it makes sense-- not just to me but to these many experts in agriculture and antitrust law that we heard in these several hearings before our committees--that our Federal regulators should have agricultural guidelines because of the special circumstances and special characteristics particular to the agriculture industry and particularly because there tends to be, in Washington, DC, outside of the Agriculture Department, little consideration and understanding of the unique industry of agriculture. Some people would say that even within the U.S. Department of Agriculture there is a lack of understanding in Washington, DC, of what the problems of agriculture are all about.

I don't pretend that even with the adoption of this amendment we are necessarily going to bring about the total understanding that there ought to be for the 2 percent of the people in this country who produce food for the other 98 percent, as well as a lot of surplus that is exported beyond. But whatever we can do to help, and particularly when there are policy decisions made dealing with agriculture when it is not fully understood, if we can just get some attention on agriculture in those areas, I think we will be taking a giant step forward.

Those characteristics I am talking about include monopsony, which is a situation where there is a single purchaser of goods, and oligopsony, which is a situation where there are few buyers who, at the same time, have a disproportionate amount of market power.

Third, the amendment would formalize the Department of Agriculture's review of agriculture mergers with the Justice Department and the Federal Trade Commission, requiring the Department of Agriculture to provide comments on larger mergers in the industry--mergers that submitted second requests for information under the Clayton Act. That is already a process that is in law.

Currently, the Justice Department or the Federal Trade Commission informally consults with the Department of Agriculture when they analyze ag mergers. These agencies have what we call a memorandum of understanding to consult with each other. But I believe, following on the advice of experts who have testified on this matter before the Agriculture Committee, that the current process--meaning the current process of the memorandum of understanding--does not sufficiently ensure that farm community concerns are adequately considered.

Far more than the Justice Department and far more than the Federal Trade Commission, the Department of Agriculture has extraordinary knowledge and expertise in agricultural matters. The Department of Agriculture formulates agricultural policy for our great Nation and works closely with the farm community and agricultural industry about various concerns. They have experts and economists who know and work with the data on a daily basis. The Department of Agriculture is the office that can best assess the true impact of ag mergers and other business transactions for farmers, ranchers, and independent producers, as well as the trickle-down effect on the consumer. So that is why it makes sense that the role the Department of Agriculture plays presently in antitrust review of ag mergers be more than just a memorandum of understanding; that, in fact, it be permanent and a formal role, not one that is informal and loosely contained in the memorandums.

Moreover, having such a requirement of formal participation or consultation is not some new novel idea. I wish I could claim a new novel idea. Other agencies, such as the Federal Communication Commission or the Department of Transportation, formally participate in the review of mergers in their industries. They render formal decisions that are then shared with the FTC or the Department of Justice. So along the lines of the precedent set by the FCC and the Department of Transportation, I am asking that we do the same thing with the Department of Agriculture and the FTC and the Department of Justice.

I hope I have described to you what is a very modest approach, much more modest than the ideas Senator Kohl and I had in the bill that I am saying I am offering a stripped-down version of here. I basically put in statute what the Department of Justice and the Federal Trade Commission are allegedly already supposed to be doing with the U.S. Department of Agriculture. The approach we advocate in this amendment will ensure that all of agriculture's concerns and needs are fully discussed when Federal agencies examine proposed ag business mergers. By guaranteeing inclusion and openness, we will go a long way toward alleviating understandable anxiety about an increasingly concentrated industry.

Finally, the amendment would provide for additional resources to the Department of Justice and the U.S. Department of Agriculture's GIPSA division to enhance their ability to look at agricultural transactions and competition issues.

I want my colleagues to know that we worked very closely with several

agricultural and antitrust experts on the language contained in this very amendment, as we did in the original bill. The amendment is supported by a number of farm groups, and I would like to read these to you: the Organization for Competitive Markets, the Campaign for Contract Agriculture Reform, the Center for Rural Affairs, Food and Water Watch, the Institute for Agriculture and Trade Policy, R-CALF USA--and just in case people don't understand that acronym, those are people who are cattle producers but who aren't necessarily affiliated with the National Cattlemen's Association. They could have dual memberships, but they do have some different points of view. Then another organization is the Sustainable Agriculture Coalition, and lastly the Western Organization of Resource Councils.

Mr. President, I ask unanimous consent to have printed in the Record a December 10, 2007, letter in support of this amendment.

So my colleagues are clear, once again to repeat, Senator Kohl and I listened very carefully to the concerns expressed by companies and groups that contacted us about S. 1759, the original Agriculture Competition Enhancement Act--we call that ACE for short-- and in response to those concerns, we made significant changes and elimination to the language which has been incorporated in this amendment. This amendment does not make any substantive changes in antitrust laws. I am going to address that a little more specifically because that is one of the things we have heard against this amendment. Maybe it would be an applicable criticism of the bill but not of this amendment.

Also, there is no mandatory adoption of the task force recommendations on the guidelines to which I have referred. The constitutional issues raised have been taken care of and more contentious provisions have been eliminated. The bottom line is the concerns that were raised by certain companies, as well as the Justice Department and the FTC, about our previous iterations of the ACE bill have been taken care of in the amendment. The bottom line is, this amendment is very much an attempt to address everyone's concerns and to reach a fair compromise because I think we could have gone a lot further and been even a lot more aggressive in dealing with agricultural competition issues. I had a hard time convincing Senator Kohl we ought to make these changes, but he has agreed as well.

There is a real need for this amendment. We need it to beef up our ability to address competition issues in agriculture and to address concerns with consolidation in the industry. My amendment is an itty- bitty step in the right direction; maybe some would say too small of a step but still a good first step at getting something done.

I urge my colleagues to support the Grassley-Kohl-Harkin amendment.

I do have some other things I want to say, but I do not want to take all the time right now. I do want to speak about some of the differences between what was in our bill and what is in our

amendment. I am willing to yield the floor if other people want to speak on the amendment that I have before us.

Mr. President, I listened to the Senator from Kansas. I am a farmer. I am not a lawyer like he is. He is a lawyer and farmer, so he might have some intuition. But I would just like to have him come, and I will deliver it to his desk--he needs to read my amendment. What he has said is an analysis of the bill that Senator Kohl and I introduced, but that is not the amendment. Maybe he missed my opening remarks, but I went to great length in those opening remarks to explain how my amendment differs from the bill. I want to point that out to the Senator from Kansas because I think I have addressed every concern he has presented to the Senate in his very good speech.

I have taken care of his concerns, and I am going to mention those concerns he has brought up, and then I am going to go to some length to tell you how I have taken care of that. But there is no special counsel amendment in this bill, as the Senator from Kansas has said. There are no additional reviews of transactions that have already taken place. That was in the original bill. It is not in this amendment.

He spoke two or three times about changing the burden of proof. That was in the original bill. It is not in this slimmed-down amendment. There is no burden of proof shifting in the amendment.

The task force that we provided for has no review or study provisions in the amendment, as indicated by the Senator from Kansas.

Now I am going to go into some detail, because obviously people are not listening to anything I have said. I want to state in a more elaborate way how this bill differs--this amendment differs from the bill that I said Senator Kohl and I first introduced, and the length we went to take care of concerns that the White House, the administration has raised, concerns that both the ranking member and the chairman of the Judiciary Committee raised, because this bill was referred to Judiciary, and then lastly, working with the ranking member of the Agriculture Committee, to address concerns he had.

There has been a lot of smoke and mirrors--I think you heard some of that--about the provision of the bill, and most of those charges are not factual, as I have indicated.

The fact is, this amendment is very different from the bill Senator Kohl and I introduced earlier this year. This amendment is also different from another amendment I had already filed to this bill. Let me list some of the things

that are not in our amendment that are before us in 3823.

I am hearing that people are concerned about the shifting of the burden of proof in the amendment. The burden-of-proof shifting provision that was in the prior iteration has been eliminated. It is not in this amendment. There are no substantive changes to antitrust laws at all.

I am hearing concerns about reviews that will be done after mergers have been approved. The provisions that allow the task force to do a study of agricultural mergers that were approved within the past 10 years have been eliminated, not in this amendment.

In addition, the provisions requiring the Justice Department and the Federal Trade Commission to review ag mergers 5 years after they have been approved have been eliminated as well.

The provision creating an Assistant Attorney General for Agricultural Antitrust at the Justice Department has been eliminated. In other words, it is not in the amendment pending before the Senate.

The constitutional concerns raised by the administration, not by Senator Brownback, about the agricultural competition task force are gone, the constitutional concerns.

We changed the provisions requiring adoption by the Justice Department of task force working group recommendations on agricultural guidelines. The amendment now has the Justice Department and the Federal Trade Commission consulting with the task force working group on the guidelines.

Any so-called constitutional concerns have been eliminated. We have made other changes to the prior writings of this amendment and/or the bill, all of which were incorporated in amendment 3823. We made these changes to address concerns that we agreed with, and we made changes in order to reach a fair compromise.

The fact is, big business and the agricultural giants do not want anything that might put up any sort of review by people who know something about agriculture, of their expansion and concentration efforts. The fact is, our Federal antitrust regulators refuse to recognize that agriculture is unique and should have industry-specific guidelines to make sure that special circumstances of the agricultural landscape are considered.

This brings about consideration, this does not bring about any change. Any movement to them, no matter how small, to try to address concentration and competition issues in agriculture is going to be decried by the powerful interest groups and their lobbyists. So when something reasonable is suggested, such as the Grassley-Kohl-Harkin amendment No. 3823, we still are going to get the outrageous claims that this is a bad amendment. The reality is the sky is not falling.

I advise my colleagues, particularly the Senator from Kansas, to read the amendment. Forget about the bill he has been referring to. Instead, listen, and stop listening to those sensational cries being made by agribusiness and their allies. We need to pass this amendment.

I yield the floor.

I will probably do that. Let me make an inquiry. Can I do that, Mr. President, without setting aside or yielding my right to continue discussion of this amendment?

I yield.

Amendment No. 3771

I do not have a whole lot more to say about this bill if you want to move on. But I do want to continue to correct a couple of things the Senator from Kansas has spoken about.

First, I was listening as he was quoting from the Department of Justice letter. And he may have a later letter, but those exact words that he was reading from appear in a November 15 letter that Senator Leahy received as chairman of the Judiciary Committee with objections from the Department of Justice.

But those objections are about the bill S. 1759, the bill that I said we have modified considerably as an amendment here, so that it does not do all of the things that have been attributed to it.

OK.

But in the paragraph you were quoting, it says exactly the same thing in the letter I got of November 15 in which they were commenting on 1759, and they surely can't find the same fault with the amendment that they found with the bill because we met with them and made changes according to what they asked us to do.

My staff corrects me that we didn't actually meet with the Department of Justice, but we were well aware of the changes they were demanding, and those changes are taken into consideration in this legislation.

Then we keep hearing from the Senator from Kansas about investigations and reviews. Get that out of your system. I have spoken twice on that issue--no reviews, no investigation.

Then when you hear all of these faults the bill is going to bring about--you are going to increase the cost of food to the consumer or maybe decrease profitability to the farmer--I don't see that anything like that is a result of a task force that is going to help the Justice Department and the FTC in determining whether mergers are anticompetitive. These are guidelines. They are not making decisions. The Department of Justice and the FTC will be making those decisions. But is there anything wrong with having a little bit of input into agricultural issues before those two agencies from experts in this town in the Department of Agriculture who may have some understanding of agriculture? I don't think the sky is going to fall if you have that sort of input.

I hope we can vote on my amendment and move on. I will only speak to the extent I have to to continue to defend misunderstandings of what the amendment does as opposed to what the original bill did.

Before I consent to that, and I probably will, as the manager of the amendment, is there any determination you can give me when we can vote on this or are we going to stack votes and vote all at once?

I will not object.

Mr. President, I ask unanimous consent to speak for 5 minutes.

Mr. President, I wish to speak in support of a provision in the bill that the amendment before us is going to strike, the Farm and Ranch Stress Assistance Network, which is included in the underlying bill of the Agriculture Committee.

This network is a critical service to help American families, particularly rural families. I oppose the amendment offered by the senior Senator from New Hampshire that would strike this measure.

Without a doubt, farmers and ranchers face unique challenges in providing food and fuel for this country. Farming is one of the most stressful and dangerous occupations in the United States. There are environmental, cultural, and economic factors that put farmers and ranchers at a higher risk for mental health problems.

Stress in agriculture contributes to rates of depression and suicide that are double the national average. This is true even in good times for farmers. As a farmer myself, this troubles me.

It also concerns me when rural residents, especially those involved in agriculture, are disproportionately represented among the uninsured of the United States. One-third of the agricultural population lacks health insurance coverage for behavioral health conditions. With the rising cost of health care and many farmers and ranchers in business on their own, the

cost of health care can be too much to handle.

We have a long way to go to make sure there is parity in our health care system. Those suffering from mental health problems do not always enjoy the same benefits of treatment because health coverage discriminates against illness of the mind.

On top of the risk and cost to farmers and ranchers, access to behavioral health care is more limited in rural areas. There are fewer professional providers, and there is a stigma on this type of care, especially among rural Americans. This is why the Farm and Ranch Stress Assistance Network is needed. It is included in the farm bill because we need to provide better mental health care for people in rural areas.

I will be the first to admit that things are looking good for agriculture right now because prices, particularly of grain, are good. We are developing and strengthening our safety net for producers. The renewable energy progress that we have made has helped rural economies. But just because that is a reality today does not mean that it will continue forever.

Our farmers and ranchers will face challenges that are out of their control. They will face instances of terrible weather and disaster. They will see droughts and low prices. Good times do not last forever, and that is when our farmers and ranchers will need the support that this provision of the bill gives.

One of the most challenging factors that we farmers face is not being able to predict outcome. We are forced to take risk. We face severe consequences when we are wrong.

I remember the agriculture depression of the 1980s and what a toll it took on farmers in my State. I wondered if things would be different if the Farm and Ranch Stress Assistance Network had existed prior to the beginning of that depression.

This network may support a crisis telephone hotline that farmers can access. Our rural residents and family farmers should have access to confidential and highly trained professionals during these tough times. The network could provide counseling services while working with extension offices to reach farmers.

Finally, the Senator sponsoring the amendment should be aware that this network is simply authorized in the underlying bill. We are not adding mandatory money for the program. We are simply providing authority to develop this network with dollars that may be appropriated later on.

So this amendment will not save money. Rather, what the amendment will do is do away with much needed support for those who work hard every day to put food on our plates, fiber for our clothing, and fuel for our economy.

So let's not eliminate this essential program without taking into account the bad years that could lie ahead. I strongly urge my colleagues to oppose the amendment.

I yield back the remainder of my time.

I have yielded back the remainder of my time.

Madam President, what time do we have on Dorgan- Grassley?

I yield myself 14 minutes, as Senator Dorgan did.

Madam President, I think everybody in this body would agree we need to provide an adequate safety net for our family farmers, and I think I ought to be totally transparent with the taxpayers who might be listening, as well as my colleagues. I want you to know that I farm in a crop share--in Iowa, we call it a 50-50 arrangement--with my son. If we get farm payments, I get 50 percent of those payments. So I have received farm payments and presently do. That is assuming prices are low enough so you do receive those payments. Right now, they aren't that low.

We are talking about an adequate safety net. In recent years, however, assistance to farmers has come under increased scrutiny by urban communities and the press. The largest corporate farms are getting the majority of the benefits of the farm payment program, with 73 percent of the payments going to 10 percent of the farmers. With a situation such as that, we could lose urban support for the safety net for farmers.

Government payments were originally designed to benefit our small- and medium-sized farmers, but instead, now, as you can see, the vast majority of them are going to the smallest percentage of the farmers-- the biggest farmers. Unlimited farm payments have placed upward pressure on land prices and have contributed to overproduction and lower commodity prices. Increased land prices and cash rents are driving family farmers and young farmers from the business of farming. I have mentioned this before in other debates. Land in Iowa generally, but I will use as an example land near my farm in New Hartford, IA, has skyrocketed and is selling anywhere between $4,000 and $6,000 an acre. In my home county, the value of an acre is up 64 percent since 2000.

Anybody listening might say, well, why is that bad for farming? Well, family farmers don't buy land one day and sell it the next. You buy it for the long haul. Sometimes farms have been in what we call century farms, for well over 100 years. So this doesn't put income in farmers' pockets. It does give them value. And if they were to die, I suppose their heirs would get a lot of money.

Across the State of Iowa, the average land value per acre rose 72 percent in the last 6 years. All these figures I am citing have something to do with the inability of young people to get started farming. When the average age of farmers is 58 in my State, we ought to start thinking about what we can do to make sure that young people, the next generation of farmers, can get started.

My State isn't the only one where this is occurring, an increase in land values. In a report published by two agricultural economists at Kansas State University, land values have increased 64 percent since 2002. This trend is occurring in many other States as well. The average of typical cash rents per acre in Iowa rose 25 percent in the same period of time. Because if you can't buy land, and you want to farm, you rent land. How are family farmers and young farmers going to survive with prices like this? How can they even get started?

This brings to mind a conversation I had within the last week with a young farmer near my home. He knows who gets these big payments in the State of Iowa, and he said, so-and-so--and I am not going to give the names out--just bought 600 acres of land. Why don't you guys do something about subsidizing these big farmers to get bigger? Now, this same young farmer would say to me, any farmer can get bigger all they want to. That is their business. That is entrepreneurship. But should we be subsidizing the biggest farmers to get bigger? He says, if you want to do something to get young people started--this young farmer said to me--put

a cap on what they are getting paid from the Federal Treasury. In other words, 10 percent of the biggest farmers getting 73 percent of the benefits out of the farm program is just plain bad policy.

I have been hearing directly from producers for years what former Secretary Johanns heard in his farm bill forums held across the 50 States. Young farmers can't carry on the tradition of farming because they are financially unable to do so because of high land values and cash rents. If that was the market, okay. But if it is being influenced by subsidies for big farmers to get bigger, they would say it is wrong. They would also say it is wrong when you have 1030 exchanges, when it is cash free, as having something to drive up the value of land as well.

Professor Terry Kastens, of Kansas State University, came out with a report on this subject. The report states that since the 1930s, government farm program payments have bolstered land values above what they otherwise would have been. Dr. Neil Harl, an Iowa State University emeritus professor, worked with Professor Kastens on this subject, and he determined that:

The evidence is convincing that a significant portion of

the subsidies are being bid into cash rents and capitalized

into land values. If investors were to expect less Federal

funding--or none at all--land values would likely decline,

perhaps as much as 25 percent.

That would give young farmers better opportunities to buy or cash rent for less in order to get started farming. And that is necessary, because the average age of farmers in the Midwest is about 58 years.

The law creates a system that is clearly out of balance. If we look at the results posted here, it emphasizes what I have already said: Ten percent of the farmers get 73 percent of the benefits out of the farm program, and the top 1 percent gets 30 percent.

Senator Dorgan and I have offered this payment limits amendment which I believe will help revitalize the farm economy for young people across this country. This amendment will put a hard cap on farm payments at $250,000. For a lot of farmers in my State, they say: Grassley, that is ridiculously high. But we have to look at the whole country, so this is a compromise.

No less important, we tighten up the meaning of the term ``actively engaged,'' a legal term in the farming business. What that means is that people have to be farming, because if we are providing a safety net to someone in farming, I think they should be required to actually be in the business of farming, sharing risks and putting their money into the operation.

I wish to make a very clear distinction here. Some Members of the Senate have advocated that the Dorgan-Grassley amendment is not as tough as what is in the Senate Agriculture Committee bill or some say it might be too tough. I want to say why this is not true, and I have a chart here to bring this to your attention. We have to compare apples to apples. That is what my chart does. Saying that the committee has a hard cap on payment limits of $200,000 is not accurate. They only have a hard cap on direct payments and counter cyclical payments. Let me remind my colleagues, we have direct payments, we have loan deficiency payments, and we have countercyclical payments. Out of those three, the bill before us that we are amending has a hard cap on direct payments and countercyclical payments, not on loan deficiency payments. The Dorgan-Grassley amendment actually caps direct payments and countercyclicals at $100,000.

In addition, the amendment will cap marketing loan gains at $150,000. While the committee--this is the loophole, this is the weakness of the argument that this bill tightens things up--it leaves loan deficiency payments unlimited. This actually weakens current law. So while the committee took some correct steps by closing the loopholes I have advocated against by including the ``three entity rule'' and by including direct attribution, it also takes a step in the wrong direction by making payments virtually unlimited. This whole debate is about good policy. Fixing one problem but leaving other doors open does not do any good.

I also wish to make a clarification for some of my colleagues. I have gotten quite a few questions about how the payment cap will actually work. We set nominal limits at $20,000, $30,000, and $75,000 respectively, then we allow folks to double. So a single farmer who would get $20,000 in direct payments can actually double to $40,000. We set it at $20,000, so if they want to attribute the payments to a husband and wife separately, they can. So a husband can have $20,000 attributed to him and $20,000 to the wife, for a total of $40,000, just like a single farmer. One more clarification: If a farmer is working with his two sons, each would be eligible for the $40,000 individually.

I wish to address some of the falsities my colleagues have raised since the payment limit debate. They have argued that this is not reform because it targets crops but not the Milk Income Loss Contract Program or conservation. To say that we do not have payment limits on these two programs is hogwash. The Milk Income Loss Contract Program has probably the strongest payment limits of any program. What came out of the Agriculture Committee includes caps on programs such as EQIP, the Conservation Reserve Program, and Conservation Security Program. Whether those caps are at appropriate levels is something that can legitimately be debated but should not detract from what we are doing on commodities through Dorgan-Grassley.

Now, our amendment produces some considerable savings. We think there is money needed in some programs that are not adequately funded to help small businesspeople, conservationists, and low-income people through commodity programs. We support beginning farmer and rancher programs and the rural microenterprise program. We also provide funds for organic cost share programs and the Farmers Market Promotion Program.

A large priority of mine has always been seeing justice is done for the Black farmer discrimination case against the U.S. Department of Agriculture. This will double the amount provided by the committee for late filers under the Pigford consent decree who have not gotten a chance to have their claims heard. It is time to make these farmers right who were discriminated against.

We support the Grassland Reserve Program, the Farmland Protection Program, and finally, while the Agriculture Committee makes significant contributions to the nutrition and food assistance programs, they were not able to go far enough in light of the tight budget constraints. So Dorgan-Grassley adds money in those areas.

The 2002 bill has cost less than expected. But this was not because of the payment limit reform in 2002. In actuality, we increased the nominal payment cap, and it continued the generic certificate loophole. Instead, what has happened is that we have had some good years in agriculture and prices have been high. That is why it cost us less to have a safety net over the last 5 or 6 years, not because reforms were put in, in 2002. I worked with Senator Dorgan on a similar measure in 2002, and it passed with bipartisan support, 66 to 31. Unfortunately, it was stripped out in conference. I voted against the farm bill because of that.

Let me remind this body that the Senate Agriculture Committee, out of conference, set up a commission called the Commission on the Application of Payment Limitations for Agriculture. That is this report right here. They did this during conference as a sop to Dorgan and me.

Is my 14 minutes up? I ask for 2 more minutes.

This Commission was set up as a sop to Dorgan and myself. We didn't get what we wanted, and consequently, you know, let's have a commission study it.

The Commission ended up, in this report, recommending the very measures which we have included in this bill. So they want a study? The study says what we said in 2002 that the conferees didn't think we ought to do. And we have had all the eggheads and farmers in this country study the problem we presented in 2002, and they gave us the results we have here.

The report said also that the 2007 farm bill is the time for these reforms. You might remember the last time we had a vote on payment limits was in a budget bill a couple of years ago. Many

of our colleagues said they agreed with what we were trying to do, but they said the budget was not the right time; it needs to be done on the farm bill. To all of our colleagues who said: Wait for the farm bill, we are waiting. You have your opportunity. It is 2007. We have the farm bill here.

By voting in favor of this amendment, we can allow young people to get into farming and lessen the dependence on Federal subsidies. This will help restore public respectability for the Federal farm program and keep urban support for the farm program so we can continue to have a stable supply of food for our consumers.

I call upon my colleagues to support this commonsense amendment, and I reserve the remainder of time for our side.

I yield the floor.

Mr. President, I yield myself a few minutes.

Mr. President, I will do it for the sole purpose of commenting on a couple things the Senator from Arkansas brought up. One was the statement where if our amendment is adopted, Senator Dorgan and I would be working to eliminate farm program payments altogether. I wish to make clear I am a believer in a safety net for farmers. We are going to maintain that safety net. So I hope people will ignore that suggested goal.

I think it is important to understand that farm programs have been around since the 1930s. They have been around

as a safety net because farmers are at the beginning of the food chain or, you might say, at the bottom of the food chain. We have a situation where farmers for input, for producing a crop--producing the food our consumers eat--pay what is charged for those imports. They might bargain a little bit, but they don't have control; they have to buy the imports or they aren't in farming. When they sell their products, they have to sell what the market bears for the day they choose to sell. They might choose a different day to sell, but eventually, whatever they sell for is what the market is there; a farmer is not bargaining for that market. So smaller farmers don't have the ability to withstand things beyond their control, such as a natural disaster or domestic policy such as, let's say, Nixon freezing beef prices, ruining the beef farmers, or stopping the exports of soybeans so that they fall from $13 a bushel to $3 a bushel. Those are things a farmer doesn't have anything to do with. So we have a safety net to help medium- and small- sized farmers get over humps and things they don't control, whereas larger farmers, the farmers whom we are putting a $250,000 cap on--the larger the farmer, the more staying power they have. Now, I admit they are affected by the same policies I have referred to, but they have the ability to withstand that to a greater extent than smaller farmers. Also, as I stated in my opening remarks, when you subsidize big farmers, it helps them to get bigger, and it makes it more difficult for people to stay in farming.

A second thing I wish to give a retort to is the use of quotes from an article that says the largest farms in America produce 78 percent of the commodities, but only get 56 percent of the farm program payments. Well, the safety net wasn't set up to match the food source. It wasn't developed to follow the crowd. It was set up to protect small- and medium-sized farmers from things beyond their control, and to maintain the institution of the family farm because it is the most efficient food-producing unit in the entire world. I would compare it to corporate farms on the one hand; I would compare it to the political State farms of the old Soviet Union as an example. The family farm has a record of being the most productive. That is to the benefit of the farmer and the entire economy. It is to the benefit of the consumer.

I am not advocating that there is anything wrong with large farms or large farms expanding; we just shouldn't subsidize them to do it.

I yield the floor.

Madam President, how much time is left on our side?

I yield myself 5 minutes.

Madam President, one of the things I think we have to remember is there is reform in the bill that the committee has presented to the Senate--reform that probably should have been done a long time ago.

I pointed it out in my opening remarks and in closing I want to kind of emphasize that there are limits put on in the bill that sound very reasonable. But I have to tell you there is one gigantic loophole you have to consider, and out of the three forms of payments--direct payment, loan deficiency payment, and countercyclical payment--the caps that are in the bill, adding up to $200,000, are for countercyclical and direct payments.

So if you don't have a cap on loan deficiency payments, that means the payments farmers can receive are unlimited and, from that standpoint, when loan deficiency payments are considered, there is not a hard cap. Now, the adjective, ``hard,'' is applicable to Dorgan- Grassley, and it is very important because we have had caps on farm programs for, I will bet, three or four decades. They have been ineffective caps because there has been legal subterfuge to get around it.

The underlying bill, as well as our amendment, takes care of some of that legal subterfuge. But we maintain one for loan deficiency payments within this bill. So you, consequently, don't have a hard cap. Some people would say you don't have a cap at all. I will not go that far. But it is one gigantic opportunity for people to get payments that are really not limited. And it is particularly important for big farmers because the loan deficiency payment is paid out so much per bushel for what the market price is under the target price. So the more bushels you produce, the larger the farm, the more deficiency payments you are going to get. Consequently, we are trying to stop subsidizing farmers from getting bigger.

But when the loan deficiency payment is left out, you are going to give these farmers the same opportunity they have under existing law to use a legal subterfuge that basically makes the limits less meaningful. So I hope you will consider whether you think, when we have a cap, it ought to be an effective cap and, in the words of Dorgan-Grassley, a hard cap. It is very important that we do that.

Remember the background for the farm safety net. It is to help medium- and small-sized farmers, to protect them against things beyond their own control. And natural disaster is a natural one to speak about because floods and hail and windstorms and inability because of a wet spring to get the crop in, et cetera, et cetera, are all natural disasters that a farmer cannot do anything about. Only God can do something about natural disasters.

Then there are political decisions. I keep mentioning them because they ruined so many farmers in the 1970s. Nixon put a freeze on beef prices, and the President also put a limit on exports of soybeans so the price would plummet when it was very high in the early 1970s. And there is international politics: the cost of energy, what OPEC does-- all of that is beyond the control of the small- and medium-sized farmers.

But the larger you get, the more staying power you have in it, and we don't need to have a safety net so strong that it subsidizes big farmers to get bigger, and 10 percent of the biggest farmers are getting 73 percent of the benefits out of the farm program.

I yield the floor.

Mr. President, today, I am introducing a Senate resolution to honor the life and work of Congressman Henry John Hyde of Illinois. I authored this resolution because I knew Henry Hyde for over 20 years. In fact, he and I were 2 of 16 Republicans who were first elected to the House of Representatives in 1974.

Congressman Hyde was a true leader in the House of Representatives. He proved his leadership by authoring the ``Hyde Amendment'' to help protect the lives of unborn children. Because of this long-standing policy, innocent lives have been saved and taxpayers have not been forced to fund abortions.

Henry Hyde was intelligent, as was proved during his tenure as chairman of two different committees--the House Committee on the Judiciary and the House Committee on International Relations. In his 32 years in the House of Representatives, he was dedicated to the rule of law as well as the expansion of freedom around the world.

He was a great Representative for the people of his district, and he leaves an important legacy for our Nation. It is with great respect that I introduce this resolution in his honor.

Mr. President, I will yield myself such time as I might consume.

I am obviously very pleased that the Senate has finally come to the point of voting on something in 2007 to take care of the alternative minimum tax problem. I would rather have gone through this process several months ago but better late than never.

Over the course of this year, I have given 12 Senate floor speeches analyzing the alternative minimum tax and describing the problem it poses for middle-class taxpayers, and I have done that in great detail. As I said so many times--before, hoping, and now I am glad to say the Senate Democratic leadership seems to realize--the AMT should not be offset.

I also wish to thank my good friend, Chairman Baucus, for all of his hard work this year and for several years to protect middle-income taxpayers from the AMT. Chairman Baucus did our country a great service by pushing for this compromise that can garner, we hope, the support of Democrats and Republicans. Although we did not mark up in committee, Chairman Baucus rolled up his sleeves and got to work to find a middle ground. That middle ground is before us. He has consistently avoided bitter partisanship and always worked to do the right thing.

Tonight, I ask my friends in the House Democratic leadership, assuming we get the votes to pass this product before us, to follow the example of Chairman Baucus and the Senate Democratic leadership and finish this job to give the assurance that is necessary to these 23 million taxpayers that they are not going to be hit by a tax they were never expected to pay in the first place.

Everyone has thus far made partisan points. That episode must cease. Those obsessed with their tax-increase-biased version of pay-go must turn now to the people's business. Those who want to raise more taxes to pay for a tax that was never meant to raise revenue from the middle class have made their points. The record is clear. My friends in the House Democratic leadership need to cease punishing the 23 million middle-income taxpayers with a pay-go obsession.

I say to my friends in the House Democratic leadership, we can talk until we are blue in the face. The bottom line is we need to change the tax laws with respect to AMT. That law change needs congressional action and Presidential signature. Anything else is just plain talk.

Last night, I suggested a path to get all parties to an agreement on changing the law on the AMT patch. By ``all parties,'' I am referring to House Democrats, House Republicans, Senate Democrats, Senate Republicans, and I have to include the President because without an agreement we will not get a law, and a law has to be signed. Without a law change, 23 million families face an unexpected tax increase that we think will be about $2,000 per family. Without a rapid law change, we make things even worse during filing season. We are going to have a fiasco of another 27 million families and individual taxpayers hurt, waiting for a refund.

I reiterate my suggestion tonight. It is in a letter from Chairman Rangel, Chairman Baucus, Ranking Member McCrery, and myself. That letter, dated October 31 this year, contains the tests that ought to be applied to any proposal in substance or process on the AMT patch legislation. Here is one sentence, ``We''--the four of us:

We plan to do everything possible to enact AMT relief

legislation in a form mutually agreeable to the Congress and

the President before the end of the year.

Chairman Baucus and the Senate Democratic leadership are trying to meet this test with this agreement which is before us now. Now the Democratic leadership in the House needs to follow through. We Senators hopefully will pass this package that is agreeable to the President and the House. What do we all agree on? We agree the patch needs to get done, so that is the base of what will pass the Senate, we hope. If House Democrats continue to insist on offsets for a patch--we hope that doesn't happen.

The President and congressional Republicans disagree with the Democrats on the need for offsets. Offsets for the patch are not mutually agreeable, as the letter we sent implies. They fail the tax writer's test. On extenders, the House wants 1 year, the Senate wants 2 years. President Bush had 1 year in his budget. Maybe 2 years might be mutually agreeable. On this point, offsets are not mutually agreeable. But it looks as if we will defer on next year's extenders.

On this year's AMT patch, we need to make law. To make law, the proposals must be mutually agreeable. The only proposal that is mutually agreeable is an unoffset AMT patch. Let's get to the law change and end the AMT patch dilemma.

I urge the House Democratic leadership to pass the AMT patch bill and send it to the President. It is in a form the President will sign. We must change the law now. We owe it to the 23 million families who could be hit by the AMT. We owe it to the additional 27 million families and individuals who face delayed refunds.

I yield the floor and reserve the remainder of my time.

I ask unanimous consent that the order for the quorum call be rescinded.

I yield 3 minutes to the Senator from New Hampshire.

I yield back our time.

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, are we in morning business?

Mr. President, I ask unanimous consent, if there is discussion of AMT today, that my remarks be placed in the Record at that point.

Mr. President, I am pleased we are finally discussing solutions to the alternative minimum tax problem that is poised to swallow 19 million more filers this year. I would have rather gone through this process several months ago but better late than never.

Over the course of the year, I have given many speeches analyzing the AMT and describing the problem it poses for middle-class taxpayers in great detail. On February 12, I gave a speech on the history of the AMT. On February 13, I highlighted how the AMT affects individual income tax liabilities. On February 15, I discussed ways to reform the AMT and made the case that complete repeal is the best way to deal with the AMT.

Incidentally, I made the case that dealing with the alternative minimum tax 1 year at a time could be problematic, and current events have proven me right.

On March 20, I pointed out the Democrats' budget had no room for AMT relief, not even for 1 year. On March 22, I explained why we need to repeal the AMT. On April 18, I made an appeal for quick action on the AMT to help taxpayers making estimated payments who are already paying the price for the lack of action in Congress. On May 14, I explained why the AMT relief or repeal should not be paid for with a tax increase someplace else on other people. On May 17, I criticized the conference report on the fiscal year 2008 budget resolution for not realistically addressing the alternative minimum tax problem. On that same day, I gave another speech exposing how Democratic offsets to the AMT relief would result in massive tax increases on other people.

On June 13, I discussed the inadequacy of the lead trial balloons House Democrats were floating as possible fixes for the AMT. This was to mark the occasion of the second quarter estimated tax payments coming due because we had taxpayers who file quarterly already being hit by the lack of action on the part of the Congress.

On July 24, I introduced legislation to protect taxpayers who should have been making estimated payments for 2007 but weren't because they did not realize Congress was failing to protect them from the AMT. In other words, if they didn't have to pay the AMT in 2006, why would they think they had to pay the AMT in 2007? By not doing it, they were violating our tax laws, probably innocently.

On September 19, I marked the occasion of the third quarter estimated tax payments coming due by again discussing the AMT problem and how little congressional leadership was doing about it.

I just cited 12 speeches delivered on the Senate floor over the past year. That doesn't even include press conferences, Finance Committee meetings, and other events where I have talked about the need for repeal of the AMT or, in the case of a shorter term fix, just making sure it was fixed for this 1 year and kicking the can down the road. I have been talking about the alternative minimum tax literally all year now. House Democrats finally managed to introduce a bill on October 30, and the majority leader turned to it in the Senate right before the Thanksgiving recess. Democratic leadership cannot blame Republicans for their own failure to act until almost literally the last minute.

As I said, I am glad we are finally discussing solutions, and the Senate leadership seems to realize that the AMT should not be offset. I also want to thank my good friend, Chairman Baucus, for all his hard work this year,

and for several years, to protect middle-income taxpayers from the alternative minimum tax. Chairman Baucus is doing our country a great service now by trying to work out a compromise between those who want to pay for the AMT relief and extenders with a tax increase and those who are opposed to tax increases to offset AMT. He has consistently, meaning chairman Baucus, avoided bitter partisanship and always worked to do the right thing.

Those obsessed with pay-go--and for the public watching, that is pay as you go--those who are obsessed with pay-go, who want to raise more taxes to pay for a tax that was never meant to raise revenue, are punishing the American taxpayers for their obsession. Unfortunately, right now, I cannot support a package with roughly $45 billion of offsets in it for the extenders, even though the AMT relief is not offset.

I am still reviewing some of the revenue raisers, but my issue is not with the raisers themselves. I will only support a raiser if I think it is good policy and will not support a raiser simply for the revenues.

I am concerned then if we send this package to the House, they will try to use the offsets not for what we put them in for, for the extenders, but send it back to us as offsets against the AMT, increasing taxes on others to pay for a tax that was never meant to be collected, and then still not get the extenders passed, as we should be passing them right now.

The House has shown it does not respect the need to get 60 votes in the Senate, and I do not expect that to change right now. If the majority leader is serious about reaching a compromise, and really respects the minority, as he claims, he needs to get his colleagues in the House on board. I have been around long enough not to make it too easy to stab me in the back by having things that even leadership in the House has suggested could happen with this tax ping-pong operation that might go on here.

It is unfortunate congressional leadership took so long to deal with the alternative minimum tax and that some are still putting an obsession with pay-go and narrow partisan interests over the wellbeing of their own constituents. We can talk until we are blue in the face, but the bottom line is we need to change the tax laws with respect to the alternative minimum tax. That law change needs congressional action and a Presidential signature, and anything else is just plain talk.

I would like to end this part of the remarks I am making today with a suggestion. I hope we get all parties to an agreement by changing the law on the AMT patch. By all parties, I am referring to House Democrats, House Republicans, Senate Democrats, Senate Republicans, and, of course, nothing is going to happen if the President can't sign it. Without an agreement, we will not get a law. And without a law change, this is what is going to happen: 23 million families face an unexpected tax increase that is going to average about $2,000 per family. Without a law change, we make worse the filing season fiasco for yet another 27 million families and individual taxpayers. That is on top of the 23 million who, for the first time, are being hit by the alternative minimum tax.

So here is my suggestion. It is simple. It is black and white. It is in a letter from Chairman Rangel and Chairman Baucus and ranking Republicans McCrery in the House and myself for the Republicans in the Senate Finance Committee. We are the senior tax-writing committee members from the Congress. That letter was dated October 31 this year assuring Treasury Secretary Paulson and Acting IRS Commissioner Stiff that we would work to pass an AMT patch bill expeditiously. That letter contains the test that ought to be applied to any proposal in substance and process on an AMT patch.

Let me remind you, this is a bipartisan letter by the most senior tax-writing Members of the Congress. And it starts with ``we,'' meaning Chairman Rangel, Chairman Baucus, and ranking Republican members, McCrery and Grassley. Here is what that sentence says:

We plan to do everything possible to enact AMT relief

legislation in a form mutually agreeable to the Congress and

the President before the end of the year.

That is the end of the quote, but I want to put emphasis within that quote on these words: Passing legislation in a form mutually agreeable to the Congress and to the President before the end of the year, meaning the end of 2007. Chairmen Rangel and Baucus and their ranking members made it clear in this letter.

Mr. President, I ask unanimous consent the letter I have been referring to be printed in the Record.

Now, our leaders in both the House and the Senate need to back up the tax writers. We Senators need to pass a package that is agreeable to the President and to the House. What do we all agree on? We agree the patch needs to get done right now. So that is the base of what should pass the Senate, if we are to get a law enacted. House and Senate Democrats insist on offsets for a patch.

The old joke is that you better make certain the light at the end of the tunnel isn't a train coming toward you. Unfortunately, the joke is on the American people when it comes to the upcoming tax-filing season. Because of the failure of the Congress to act, the taxpayers are going to feel as if they have been hit by a freight train come April 15. The sad part is this was not necessary. Congress could have done the right thing. Congress could have acted. We have never in this century gone this late without passing the AMT patch and having it in place. The IRS and the Treasury have made it clear that the failure to act would cause very real problems in the filing season, in terms of confusion and in terms, especially, of a delay in providing taxpayers their refunds.

I am astonished when I hear that some in the Democratic leadership are telling reporters these claims of a filing fiasco are all somehow a bluff. The Democratic leadership certainly didn't think the problems of the filing season were a bluff when we were delayed in passing an extenders package last year. That is when the Republicans were in control. I strongly advocated then that we needed to pass the extenders package and warned of its negative impact on the filing season, and I was not listened to by my Republican leadership. But Democrats, now in the majority but back then in the minority, joined me in those statements. Now the clamor is much smaller with the alternative minimum tax which will affect 25 million taxpayers and will be, in many ways, significantly more disruptive to the filing season than the extenders delay last year.

As you can see from a chart I have here--I am going to ask my staff to hold that chart up. We all know the story of Chicken Little. But every once in a while, Chicken Little is right. When it comes to the filing season, the sky is falling.

It is important that my colleagues understand that by failing before Thanksgiving, we have already gummed up the works. As my colleagues can see from this next chart, the deadline of October 15 for finalizing forms and instructions has already passed. We have passed the November 7 deadline for printing the tax forms--as you can also see in the chart--and the absolute drop dead date for printing was November 16.

Every week that we don't act, this problem will get worse and worse.

I should make it clear that we are not only hearing from the IRS that the delays have created a filing fiasco; the tax preparer community is making it clear that the problems are real and they are big.

We recently received a letter from the independent IRS Oversight Board that voiced ``grave concerns about the serious risks to the 2008 filing season if legislation to change the AMT is delayed.''

The IRS Oversight Board makes it clear that there is a big, big difference from Congress passing AMT relief this week as opposed to the third week of December. The board specifically says that another 2 or 3 week delay by Congress could mean that another 31 million taxpayers will face a delay in filing returns and that another approximately $70 billion in refunds could be delayed.

These numbers would be on top of the 6.7 million taxpayers who already face a delay in filing returns and the $17 billion in refunds that are going to be delayed because we have not acted to pass the AMT ``patch.''

So if we continue to dilly-dally and delay on AMT relief until Christmas, it will be a total of 37.7 million return filings delayed and $86.9 billion in refunds delayed. These delayed refunds are not just paper; they represent real money that many working families are counting on to help them to pay the bills, make an important purchase or even have an important medical procedure done.

To be blunt, we are already in the soup and it is a question of how bad it is going to get.

I recently joined the ranking member of the Ways and Means Committee in writing to Ms. Stiff, the Acting Commissioner of the Internal Revenue Service, asking that the IRS do the following:

No. 1, take steps to educate taxpayers about the possible changes in the law and tax forms;

No. 2, work closely with the tax preparation community to keep them aware of the IRS to update programming and minimize delays and to encourage the tax preparation community to inform their clients and consumers about likely delays in processing returns and distributing refunds;

No. 3, ensure that all IRS call center employees are fully informed about the status of the tax filing season and can provide accurate and timely information to callers;

No. 4, within available resources, increase staffing of IRS call centers to accommodate the increased call volume that will likely result from taxpayer confusion.

I think these steps will allow us to do the best we can with a very bad hand. But there should be no doubt, the real answer is to pass AMT relief and pass it now.

For many years now, and certainly many times this year, I have tried to shed light on the monstrosity that is the alternative minimum tax and how the failure to index the AMT for inflation threatens middle- class taxpayers. While I have consistently fought for full repeal of the alternative minimum tax, I have had to be content with enacting a series of provisions, since 2001, to increase the exemption amounts pertaining to the AMT to prevent new taxpayers from being caught by it. However, similar action has not yet been taken for tax year 2007. Despite plenty of advanced warning, congressional leadership's failure to act means that time for proactive action has already passed.

The IRS is printing tax forms and making other arrangements to process tax returns submitted for the upcoming filing season. Any legislative fix undertaken now to check the advance of the AMT will not eliminate a problem, but will only manage it. Despite being deeply disappointed that congressional leadership has not seen fit to act faster, I was hopeful that the magnitude of around 19 million additional tax filers paying the AMT for tax year 2007 was finally beginning to hit home. The AMT finally seemed to be getting the attention it deserved, but recent rhetoric has again put me into a negative frame of mind.

Rather than offer new ideas and insights into how to solve the AMT problem, which in the case of many would be to offer any ideas at all, some of my colleagues are merely recycling the same old and tired talking points of years past. More specifically, I'm referring to the accusation, made by left-leaning think tanks and also by the House Committee on Ways and Means majority, that advocates of tax relief in 2001 and 2003 deliberately--I want to emphasize they are accusing use of deliberately using the AMT as a trick to minimize the revenue cost to the Federal treasury as a result of those policies. While it is true that some families benefit less from 2001 and 2003 tax relief than they otherwise would have, to say this is by design, as is indeed done in a Committee on Ways and Means press release issued on November 14, is absolutely ridiculous.

Republicans have consistently fought, even before the 2001 tax relief bill, to curtail and eradicate the alternative minimum tax. In 1999, congressional Republicans passed the Taxpayer Refund and Relief Act of 1999, which completely repealed the AMT, and this bill was vetoed by President Clinton.

Getting back to the Ways and Means press release of November 14, in it I myself am cited as critiquing President Bush for not doing more in his 2001 and 2003 tax packages to counteract AMT effects. I do absolutely want to make clear that despite my belief that the AMT was also a pressing problem at that time, I wholeheartedly supported tax relief in 2001 and 2003 and still think it was absolutely the right thing to do. In fact, I think the provisions in both bills should be made permanent.

In order to counteract the effect of the AMT, Congress passed and President Bush signed into law a series of provisions to increase AMT exemption amounts to keep inflation from pushing new tax filers into the clutches of the AMT. If Ways and Means Democrats were serious in their implied concern for the effectiveness of 2001 and 2003 tax relief, they could do two very simple things: First, House Democrats could make 2001 and 2003 tax relief permanent; second, they could fully repeal the AMT. Of course they have shown no sign of doing either of these two things. In fact, opposition to the 2003 tax relief package was so intense among Democrats that the Vice President was called upon to break a tie during a vote in the Senate.

The provisions of the 2001 and 2003 tax relief bills were not made permanent because doing so might have made it impossible for the bills to overcome Democratic opposition. I believe that including AMT repeal in those bills would have had the same effect.

Aside from being quoted in the November 14 Ways and Means press release, I found it unintentionally humorous in that it reveals that House Democrats are doing exactly what they accuse Republicans of having done since 2001. While they accuse Republicans of using the AMT as a budgeting

gimmick, they are using the AMT as a gimmick to make it appear they are easing the tax burden when they are not.

In the release, Ways and Means Chairman Rangel is quoted saying ``The house passed a bill to prevent the AMT from hitting 23 million families this year without hurting the economy by adding to the national debt.''

What this means is that the House is protecting some people from the AMT by subjecting other filers to additional taxes. This is the same as if your community's animal control officer caught a rabid dog on your street and let it go someplace else across town. Your problem appears to have been immediately solved, but in the longer-term, the fundamental problem still exists. The fundamental problem with the AMT is the massive amount of unintended revenue it is forecast to collect, and the unwillingness of many of my colleagues to forego that revenue.

If Ways and Means Democrats are serious in their appeal to the administration regarding the AMT to ``work with Congress to do the right thing and kill it,'' they will abandon any notion that revenues not collected because of AMT relief or repeal ought to be offset.

Finally, I want to address the baseless claim that the Bush administration's tax priorities were responsible for the AMT problem on a technical level.

This exact point was raised in 2005 by Democratic Ways and Means staffers in a letter to ``Tax Note,'' a prominent publication for tax professionals. At the time I requested that the nonpartisan Joint Committee on Taxation look into this matter. Their analysis showed that, as I have long maintained, the biggest problem with the alternative minimum tax was it was never indexed for inflation.

In response, I received from the Joint Committee on Taxation a letter dated October 3, 2005. I have requested an update of that document and will discuss the updated numbers as soon as they are available. That estimate could be interpreted to indicate that if the Bush tax cuts were repealed, alternative minimum tax revenues could be expected to drop by $302 billion, or 27 percent.

At the time, the Joint Committee on Taxation estimate also found that extending and indexing the hold-harmless provision in effect at the time would reduce alternative minimum tax revenues by around $667 billion, or 59 percent. Of course, the analysis of this question is complicated by the fact that the variables we are examining overlap and interact with each other. But responsible analysis of available information certainly does not support the allegation that the tax relief packages signed by the President in 2001 and 2003 are responsible for the explosion of the alternative minimum tax. If anything, House Democrats and their pet think tanks have illustrated the fallacy of using projected revenue reductions as a proxy for percentage causation.

Madam President, I ask unanimous consent that the October 2005 Joint Committee on Taxation revenue estimate I referred to be printed in the Record.

Madam President, as I said, I will discuss those updated numbers when they are given to me by JCT.

I mentioned earlier that the argument that our recent tax policies are responsible for the wild growth in the alternative minimum tax is an old and a very tired argument, intellectually dishonest. The Ways and Means press release of November 14, 2007 refers to a letter of March 6, 2001, sent by Mr. Rangel to President Bush.

I just talked about a Democratic staffer making the same point in Tax Notes in 2005. I am not bothered by these arguments in and of themselves. They are based upon poor analysis, if that, and it is easy for me to respond to them. What does bother me, however, is that clearly many people are more interested in trying to make cheap political points than actually dealing with the alternative minimum

tax. If House Democrats were concerned about the tax burden, they would repeal the alternative minimum tax without raising taxes on other taxpayers to replace revenue that was never supposed to come into the Federal Treasury, because these 23 million middle-income taxpayers were never supposed to be hit by the alternative minimum tax, because it was only meant to be paid by the superrich.

I have made the point many times, that this alternative minimum tax was never meant as a revenue source, and I do not care if I made it twice in a row, three times in a row, it is a fact of life: These 23 million people were never meant to pay it. The alternative minimum tax is only supposed to hit the superrich--it was an unsuccessful attempt-- when the alternative minimum tax was passed in 1969, to promote tax fairness. This point has not been challenged.

Rather, my friends in the House and elsewhere have distorted that argument into a claim that Republicans intended to use the alternative minimum tax to secretly diminish the impact of the 2001 and 2003 tax relief packages. I have shown how that argument is flawed every time it is dug out of the closet by someone. The alternative minimum tax certainly is not a secret. But it is a mystery how so many people can engage in so much pointless discussion when what we need now right now, actually several months late, is urgent action.

I yield the floor, and I suggest the absence of a quorum.

The PRESIDING OFFICER (Mrs. McCaskill.) The clerk will call the roll.

Mr. President, with today's passage of the United States-

Peru Trade Promotion Agreement Implementation Act, we have taken a long-overdue step to strengthen our relationship with Peru, a close friend and important ally in Latin America. This agreement will result in new economic opportunities for U.S. farmers, manufacturers, and service providers, and I am pleased that the Senate has finally voted in favor of its implementation.

None of this would have been possible without the leadership of two of our United States Trade Representatives, Susan Schwab and her predecessor, Rob Portman. I want to thank Ambassador Portman for his hard work at the negotiating table that resulted in a solid agreement that will level the playing field for U.S. producers and exporters. And, I want to thank Ambassador Schwab for her dedication and perseverance that culminated in the May 10 bipartisan trade compromise, which set the stage for today's successful vote. Also meriting special mention for their tireless efforts are the Assistant United States Trade Representative for the Americas, Everett Eissenstat, and his predecessor, Regina Vargo.

Here in the Senate, I want to begin by thanking the chairman of the Finance Committee, Senator Max Baucus. He is a true leader on trade and on the committee. And he is supported by a strong staff. That starts with the Democratic staff director on the Finance Committee, Russ Sullivan, and the deputy staff director, Bill Dauster, who were critical to the process. I also want to thank his chief international trade counsel, Demetrios Marantis, as well as the other members of the Democratic trade staff, Amber Cottle, Janis Lazda, Chelsea Thomas, Darci Vetter, and Hun Quach, and two individuals serving on detail to Senator Baucus, Russ Ugone and Ayesha Khanna.

Of course, I am grateful for the outstanding effort of my staff as well. First, my chief counsel and staff director, Kolan Davis, merits special mention. His legislative expertise has been instrumental in moving countless bills and this is no exception. I also want to thank my chief international trade counsel, Stephen Schaefer, as well as David Johanson, David Ross, and Claudia Bridgeford Poteet. And, I want to thank John Kalitka, who is on detail to my office from the U.S. Department of Commerce.

Finally, I want to thank Polly Craighill and Margaret Roth-Warren of the Office of the Senate Legislative Counsel for their hard work on this legislation. As always, Polly's patience and expertise have been invaluable in producing a top-notch bill. Margaret is a relatively recent addition to the office and already she is proving herself a very strong asset to our legislative team.

Today's vote is long overdue. The May 10 compromise was expected to pave the way for quick consideration of all four of our pending free trade agreements, as well as the renewal of trade promotion authority. That hasn't happened as quickly as I would have liked. Still, today's vote is a critical first step, and I hope we can use this vote to build momentum toward implementing the next agreement in line, which is our trade agreement with Colombia. We should move the Colombia trade agreement as soon as possible, and I will work hard toward that outcome in the 110th Congress.

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, this day is long overdue. But the fact that this day has arrived for the consideration of the Peru Trade Promotion Agreement Implementation Act is still a good day to have happen, even though it should have happened several months ago. In fact, I would say it should have happened last year.

But the same problems that kept it from coming up this year were in place last year. I strongly support this bill. I urge my colleagues to do the same. Over the past 7 years, Congress has passed implementing bills for trade agreements with 12 countries. Of these 12, 7 are located in Latin America.

The implementation of those agreements demonstrated our commitment to strengthening our relations with our neighbors in Latin America. We now have an opportunity to build on that commitment by implementing our trade agreement with the country of Peru.

At the same time, these agreements serve to advance our national interest. Too often we talk in terms of the economic interests of the United States when it comes to trade. We ought to be looking at things beyond the economics of trade. I say these agreements advance more than our economic interests; they advance a broader national interest because they foster transparency and increased respect for the rule of law in international business transactions.

I think it goes beyond the business transactions, because with every business transaction, there are millions of people involved. And even though we in the political world or our diplomats feel we are more important than anybody else in bringing about peaceful relations, our work is kind of a spit in the ocean compared to what millions of business people every day do for America and for other countries interacting among each other, breaking down barriers that often lead to misunderstandings and an enhanced understanding between people. They have an awful lot to do with the promotion of international peace.

I think it goes even further, and I don't remember who I quote when I say this because I have been quoting it for so many years, but it is something such as: Nations that trade together do not war, or something of that nature.

That is a paraphrasing of that concept. But I believe that. That is why I believe in breaking down trade barriers, as this Peru bill does. It enhances international understanding and peace as well as enhancing our economic interests.

This bill then creates more opportunities for increased economic growth and prosperity in neighboring economies which help to foster political stability which is important within those borders. But political stability within a country's borders also enhances international stability.

That is particularly important in the Western Hemisphere and the South American Continent, as well as the part of the Western Hemisphere we call Central America. Because we need meaningful alternatives to combat the production and trade of elicit narcotics, another factor that maybe applies to these countries more than a lot of countries we trade with.

Perhaps most importantly, these trade agreements level the playing field for U.S. producers and exporters. I had a chance, before speaking, to hear Senator Nelson of Florida speak. To hear this from the Democratic side of the aisle is very important because it is a fact: This bill levels the playing field to give our exporters and producers access to Peru the same way Peru has had access to our markets and our people for decades under trade preference.

During my time in the Senate, I have heard some of my colleagues complain that the global trade situation reflects an uneven playing field. Now, to some extent, I agree. That is why I am a promoter of more free trade agreements. The Doha round of the World Trade Organization negotiations is leveling this playing field.

So right now it is uneven. It is not as level for American exporters as it ought to be. But if you looked at the last 50 years when this process started, soon after World War II, under the General Agreement on Tariffs and Trade, you would find it was much more--or a lot less level than it is right now.

So we have made considerable progress and we need to build on what is a success, very much a success. Because in too many cases, the duties that our trading partners impose on U.S. exports are much higher than the duties we impose on theirs. As I have said, that is certainly the situation with Peru. Right now, some 97 percent of imports from Peru enter the United States duty free.

I do not know whether Senator Nelson used that specific percentage that I gave, but he was speaking of the fact that Peru had preference to coming into the United States. This bill gives our producers and exporters the same preference there. Our exports to Peru face duties that range from 12 to 25 percent. Specific examples: Peru's tariff on U.S. pork exports to that country, and this is a major product of my State of Iowa, is as high as 25 percent, while Peru's exports to the United States are duty free.

Now, that is what I call a one-way street. This unbalanced situation is largely the result of unilateral trade benefits that we extended to Peru under what I called the preference situation. But this is specifically under what we call the Andean Trade Preferences Act.

This trade agreement before the Senate today will restore balance to our trade relationships with Peru. I do not want you to take my word for it. The impartial U.S. International Trade Commission analyzed our trade agreement with Peru. The Agency found, and I quote:

Given the substantially larger tariffs faced by U.S.

exporters to Peru, than Peruvian exporters to the United

States, the trade agreement is likely to result in a much

larger increase in U.S. Exports than U.S. imports.

The International Trade Commission of our U.S. Government goes on to state that:

The agreement will likely increase U.S. exports to Peru by

25 percent, while Peruvian exports to the United States will

grow by 8 percent.

Now, that is a win-win situation for U.S. producers and exporters. And why anybody would vote against an agreement like that I could not understand, and I am not anticipating that people will vote against it, but I do know, in the months of this year that we have discussed trade, I have heard a lot of negative attitude toward trade, how harmful it is to the U.S. economy. But if any Member who has said those things during the course of this year would look at the bill that is before the Senate right now, that is going to increase U.S. exports to Peru by 25 percent while Peruvian exports to the United States will grow by 8 percent, then if they vote against this, they are not addressing the concerns they are giving speeches about all this year. The benefits of this trade agreement are going to spread across all major sectors of the economy. I say that because I quoted agricultural benefits. But besides U.S. agricultural producers, manufacturers and service providers all stand to gain from this agreement. The ITC--the International Trade Commission--predicts the agreement will have a ``substantial, positive'' effect on U.S. exports to Peru of the major U.S. commodities of pork, beef, corn, wheat, and rice. The American Farm Bureau Federation predicts that U.S. farm sales to Peru could increase by more than $700 million with full implementation of the trade agreement. U.S. rice exports to Peru will grow tenfold to fifteenfold as a result of this agreement, while U.S. exports of corn will double.

The National Pork Producers Council says that the Peru trade agreement is a ``state-of-the-art agreement for pork producers to which all future trade agreements will be compared.'' Our manufacturers will enjoy significant benefits as well. For example, Whirlpool Corporation--this is a Michigan corporation which recently bought Maytag in Newton, IA, and closed that plant down, but they still have a massive manufacturing plant in Amana, IA--appeared before the Finance Committee to testify on behalf of this trade agreement. Whirlpool exports refrigerators, ranges, and clothes washers to Peru. It manufactures those products in several States besides Iowa, including Arkansas, Indiana, Ohio, and Tennessee. Whirlpool told the Finance Committee that the Peru agreement will eliminate the 15- to 20-percent tariffs Peru imposes on Whirlpool products. In part because of this agreement, Whirlpool expects its U.S. exports to Peru to increase 400 percent within the next 2 years. In Whirlpool's view, the elimination of Peru's tariffs on its products will allow Whirlpool to maintain jobs in the United States rather than relocating or expanding operations abroad.

Here again, how many times have we heard on this floor the legitimate concern--I am not finding fault--about outsourcing of manufacturing jobs to other countries? You can imagine why that might happen if we have a 10- to 12-percent tariff going into Peru. But people who say those things in this body ought to vote for this bill if it is going to level the playing field for Whirlpool workers so we can maintain those jobs in the States I cited.

U.S. service providers will also gain from this agreement because Peru has agreed to exceed the commitments it made on services, even in the World Trade Organization. So we get something better than we have under WTO rules right now when we have a free-trade agreement with Peru. Peru, thus, has agreed to accord substantial market access across the entire service regime, with very few exceptions, using the so- called negative list approach.

So to those of my colleagues who complain that the current world trade situation is unfair, here is a chance to improve that situation. By implementing this agreement, Congress will level the playing field for U.S. farmers, U.S. manufacturers, and U.S. service providers in this important market. The agreement will boost U.S. exports, creating jobs, keeping existing jobs in the United States. There have been studies, various studies, but the one I always quote says that jobs in the United States--that those products or services that are exported, those jobs are jobs that pay 15 percent above the national average. So they are not only jobs, they are good-paying jobs.

I understand there is a rising sense of protectionism in the Congress. I alluded to that in my remarks today. But I would like to have Members look at the facts. Take, for example, the Central American Free Trade Agreement, otherwise known as CAFTA. CAFTA entered into force for four of our trading partners last year. It is already possible to see the results of bringing their tariffs in line with ours.

Guess what. As you might expect, leveling the playing field has brought positive results.

I wish to use the U.S. Department of Commerce as a source. They say our exports to the four countries increased 18 percent in 2006, while our imports were up 3 percent. I don't know how many Members voted against that last year, but I would imagine it was close to 40, give or take a few. I would like to have those 40 Members who probably voted against this, saying that free-trade agreements are not good, look at the facts. So far, our exports have increased 18 percent, while our imports from those countries of Central America were up 3 percent. Leveling the playing field helps American farmers, manufacturers, and service providers. Then maybe you would think it was wrong to vote against CAFTA last year. As a result of this increase of our exports by 18 percent, our trade balance swung from a $1.2 billion deficit in 2005 to a $1 billion surplus in 2006.

How many times on the Senate floor have we heard one of the examples of something that is bad about free-trade agreements is because of our terrible trade deficit? Our trade deficit is too high. If American consumers would quit spending on imports and if they would save some of their money, we wouldn't have as much of a trade deficit as we have. But the American consumer, including probably this consumer, lives too much for today and forgets about tomorrow. Chuck Grassley may be too materialistic for the good of our trade deficit. If we spend a little less money and save a little bit more, invest in Treasury bonds instead of letting foreign countries buy them up, we would be better off. But for those Senators who have made speeches against how terrible our trade deficit is and then use that as an excuse to vote against CAFTA, don't they feel they were wrong by voting against a bill that finally passed that brought us from a $1.2 billion trade deficit with these countries to a $1 billion surplus in just 1 year? That is what happens when you level the playing field.

We are not the only ones who stand to benefit from our agreement with Peru. Peruvians will benefit significantly as well. They have already benefited from the goodness of the U.S. people by letting them have trade preferences for all these decades. But even beyond what they have already had, a bill that is significantly much more benefit to the United States than it is to Peru, Peru is still going to benefit. The agreement will increase opportunities for continued economic growth in Peru and help Peru further develop and modernize its economy. By entering into the agreement, Peru has demonstrated its intention to strengthen its ties with the United States and lock in economic reform--economic reforms that they are going to benefit from, not us-- and it is going to enhance their transparency and respect for the rule of law.

Agreements such as this are what the rule of law is all about. The rule of law in international trade is just as important as the rule of law for domestic America because within our own rule of law, everything is predictable. It has credibility and predictability. When you put the same regime in international trade, you have predictability and credibility. You enhance opportunities for people to work closer because they know what the other side is going to do, if you have equal respect for the law. All of this will serve to increase investor confidence in Peru and its economy.

These are critically important objectives. We live in a challenging time. There is a growing division in Latin America today. Venezuela's President is using oil wealth to lure allies to his socialist vision. He has announced plans to turn Venezuela into a socialist republic. He has nationalized Venezuela's telecom and electricity companies and wrested the oil industry from private companies. He has demonstrated once again that those who withdraw economic rights often seek to withdraw political rights. Those who centralize economic power tend to also centralize political power. For example, he pulled the broadcasting license of one of Venezuela's oldest television broadcasters, which also happens to be one of his major critics. He assumed new powers that allow him to rule by decree, and he pushed for a new constitution that would abolish Presidential term limits, allowing him to stay in power indefinitely. His former Defense Minister has called the plan ``fraudulent'' and akin to a coup. I don't know whether the final results are in, but he may have lost that referendum yesterday. At lease for my part, I hope that is what the final results show. But he is still going to be the dictator and the authoritarian that he has been for the last 9 years.

Chavez has said that this rejection, if it happens by the voters, is not a defeat, and he plans to proceed on whatever his goals are. His former Defense Minister has cautioned that he may seek to impose these changes through a different route than constitutional reform. So you lose an election, and you find some other way to accomplish the same thing.

I have talked about Venezuela and the environment of the Peru trade agreement because our relationships with Latin America will be enhanced through free-trade agreements. We ought to help countries like Peru that are not going in the direction of Venezuela as much as we should, particularly in light of the fact that two other countries in the region--Bolivia and Ecuador--are also trending in a similar direction.

Bolivia's President Morales nationalized the hydrocarbon sector by executive decree. As a result, investors were forced to sign new contracts that guarantee a greater percentage of revenue for the Government. He also seized a foreign-owned tin smelter without compensation. Instead of a free-trade agreement with the United States, President Morales joined President Chavez's so-called Bolivarian alternative for the Americas. He strengthened ties, at the same time, with Cuba and Iran.

President Correa of Ecuador has also reached out to Iran. He has called the United States ``the most protectionist country in history.'' He also said that free trade is ``dangerous'' for countries like Ecuador.

I hope Correa, the President of Ecuador, will remember these statements he has made about the United States, saying the United States is ``the most protectionist country in history.'' He also said that free trade is ``dangerous'' for countries like his.

I hope he remembers those things when he comes around to the Congress in about 2 or 3 months wanting an extension of the Andean trade pact, where he wants preferences from our taxpayers so he can say these dastardly things about our country, which obviously are not true, but they are good for the propaganda purposes that he makes them, because he said these things even though we give imports from Ecuador duty-free access to our markets under our unilateral preference programs.

Now, the difference between Peru and Ecuador is this: Ecuador and Peru have had the same trade preferences with our country to get their products in here duty free for the last several decades, but Ecuador stops negotiating with the United States on a free-trade agreement and Peru goes ahead and negotiates with us. Yet Ecuador is going to be coming to us in a couple months saying to us we ought to continue the trade preferences with them, when they say these things about us: They feel more comfortable with Chavez and the Cuban and Iranian dictators than they do with us Americans. I have questioned why we should continue providing such duty-free access to our markets, but that is an issue we will deal with in 2 or 3 months.

The point is, there is a growing divide in Latin America. On the other side of the divide you find countries such as Peru and Colombia, allies of the United States whose Governments have gone out on a limb to strengthen bilateral relations with us. It is imperative we respond in kind and not turn our backs on these important allies. I expect we will soon approve our trade agreement with Peru. After that, we should move as quickly as possible to implement our trade agreements with Colombia and Panama, for the same reasons we ought to be approving this Peruvian agreement. That is what I envisioned when the bipartisan compromise on trade was reached May 10. I will return to that point in just a moment.

I am not alone in calling for approval and implementation of the Peruvian agreement. Just last month, the New

York Times called for passage of our trade agreement with Peru. They editorialized that ``it would be a folly for the United States to turn its back on trade.'' The paper also noted that all eight living former Secretaries of State have urged Congress to approve the Peru agreement.

In October, the Agriculture Coalition for Latin American Trade, which is comprised of 50 different agricultural organizations, called for congressional approval of the Peru trade agreement. This agreement is also supported by the National Association of Manufacturers and the Coalition of Service Industries, among other business groups.

In sum, there is widespread recognition of the benefits of this trade agreement for the United States.

Before concluding, I would like to address three other issues that have arisen with respect to free-trade agreements even beyond the Peruvian agreement. The first is the claim by some that these agreements undermine our food safety laws. The second is the charge that we are not enforcing our existing trade agreements. And the third is the May 10 bipartisan compromise on trade between the administration and the new congressional leadership that took over on the Hill in January.

In recent days, some of my Senate colleagues have criticized the passage of the Peru agreement in the House. One Senator went so far as to say the agreement ``will result in more unsafe food in our kitchens and consumer products in our children's bedrooms.'' Now, let's just think about that for a minute. That is quite an accusation. How could Congress possibly support such an agreement? The answer is simple: We are not supporting that position by voting for this agreement because the accusation is false. If you do not believe me, then just look at the text of the agreement. Chapter 6 of the agreement addresses the types of ``sanitary'' laws related to food safety. There is absolutely nothing in the chapter that would lead to a lowering of our food safety standards. In fact, one of the explicit objectives of the chapter is to ``protect human, animal, or plant life or health in the Parties' territories.'' ``[T]he Parties' territories'' means the United States and Peru. In addition, this chapter is not even subject to dispute settlement. So there is no way Peru could use the chapter to challenge our food safety laws, even if the chapter provided a basis to do so; and the agreement does not.

For over 20 years, opponents of our trade agreements have argued they would undermine our food and product safety laws. Yet, in those 20 years, there has not been a single challenge to any one of these laws-- not a single challenge. That is because these complaints have no foundation. If people want to criticize our trade agreements, they are certainly free to do that. That is their right. But they should base their criticisms on facts, not on scare tactics.

I have also heard colleagues say that we should not enter into any trade agreements until the administration does a better job of enforcing existing agreements. In my view, the administration is doing a pretty good job of enforcing our trade agreements. But I suppose that even Chuck Grassley will look at specific problems we have. Maybe we ought to be doing more. But there are some examples that I think you ought to give the administration credit for.

The administration is challenging Europe's subsidies to Airbus, and up until last week it was pursuing at least four different cases against China in the World Trade Organization. So you might say: What has changed? Well, our U.S. Trade Representative, Ambassador Schwab, announced we had concluded an agreement by which China agreed to terminate eight subsidies we were challenging under World Trade Organization rules. This was just last Friday. The termination of those subsidies will bring significant relief to our manufacturers and exporters who have been confronting unfairly subsidized competition from the Chinese. In this case, we achieved our objectives without having to resort to that lengthy WTO process of litigation. That is a complete success story, in my book. As for the other three pending cases, we will continue to pursue our rights in the World Trade Organization.

If you ask me, the problem is not a shortage of enforcement. The bigger problem is that people are complaining about foreign government actions that are not yet subject to agreed-upon rules. In other words, the problem is not the failure to enforce the rules; it is that there are no rules to enforce in certain areas. If you want to solve problems that are not currently subject to rules, we should be negotiating more trade agreements, not fewer. Get the rules in place, and then get those rules violated--if that is what is going to happen, and you hope that does not happen--and then enforce them. But you cannot enforce a rule that is not there. For example, the administration recently announced it is negotiating a new anticounterfeiting trade agreement. That is a step in the right direction. Such an agreement would help get at problems such as the counterfeiting of the Underwriters Laboratories logo. That is an important safety issue.

If we are serious about wanting to get at these types of problems, we should give the President a new grant of trade promotion authority and send our negotiators out to solve those problems. If we turn our back on new agreements, our trading partners will continue negotiating among themselves, leaving us behind. That is what happened the last time Congress denied President Clinton trade promotion authority, I think in 1995. It was not reinstated until 2002. During that period of time, our trading partners concluded over 130 preferential trade agreements. We had only two.

So do you folks in this body who say we should not give the President trade promotion authority want to go back to the regime of other countries doing what they want to do? They will do it anyway, but we do not have an opportunity to keep up if we do not give our President that authority. Do you want to have the United States have an unlevel playing field in the case of the history of those 130 preferential trade agreements that were negotiated while our President did not have authority to do it, while we did, too, or do you think maybe our President ought to be negotiating the same number, to level the same playing field for the workers in America that other governments are giving their workers for an opportunity to have a level playing field? That cannot happen if the President does not have trade promotion authority.

We have only managed to regain some lost ground in the last 5 years. These agreements before the Senate--Peru and the 14 over the last few years--are examples. So the President needs to have trade promotion authority so he can continue to keep negotiating so we can create more jobs in America and export more and have a level playing field where we do not have that level playing field.

Finally, I want to mention the bipartisan May 10 agreement on trade that made it possible for us to move forward with this Peru agreement and, hopefully, makes it possible to move forward in the case of Panama and Colombia.

This year, the Democratic majorities in the House and Senate demanded additional provisions in our trade agreements before they would agree to implement them. That is the result of the last election. When people give their will to a different majority in this Congress, we have to respect that. I think the Democrats were fair and responsible in the agreements that were reached. I am willing to go along with them. Those are not necessarily things I would have agreed to if we had still been in a majority and probably would not have had to negotiate. But the Democrats won the last election.

So after lengthy negotiations, the administration agreed to a compromise that the House Democratic leadership announced with great fanfare on May 10, 2007. The Democratic leadership described the deal as a ``historic breakthrough'' and a ``fundamental shift in U.S. trade policy'' that achieved results they have been seeking for years. As a result of this compromise, the administration negotiated conforming changes in the labor and environment chapters and the provisions on Government procurement, investment, and intellectual property. For example, in the wake of the agreement, disputes arising under the labor and environment chapters are subject to the same

dispute settlement procedures as every other obligation of the agreement. Now, we can debate whether that change was actually a good idea, but it satisfied a longstanding demand of the Democrats who have opposed our trade agreements in the past. The same goes for the other changes encompassed in the May 10 compromise.

The administration followed through by negotiating the necessary changes to incorporate the May 10 compromise into each of our pending trade agreements with Peru, Colombia, Panama, and South Korea. Now we are moving on Peru. But since the administration has carried out its responsibilities under the May 10 compromise with the Democrats and it is good enough to get Peru passed, it ought to be good enough to get Colombia and Panama passed real quickly and South Korea after some kinks are worked out in the South Korean negotiations.

Unfortunately, we have very little to show for those efforts other than Peru right now. It has been almost 7 months. We still have not implemented a single pending trade agreement. We will soon change that with our vote on the Peru trade agreement. But there is no sign of movement on the horizon for the next pending trade agreements, and our druthers there are to go with the agreement with Colombia first. The fact there is not movement in these other areas troubles me greatly.

I hope to see most of my Democratic colleagues join me in voting to implement this trade agreement with Peru. After we have done so, I very much hope they will join me again in supporting implementation of our trade agreement with Colombia as soon as possible in this Congress. Our agriculture producers, manufacturers, and our service providers are counting on us. Our allies are counting on us. It is in our economic interest, and it is in our national interest. It is in the interest of greater opportunities for international peace. We cannot let those opportunities embodied in these trade agreements slip by us.

One final, concluding remark, and it is repeating the same thing several times, and that is that Peru has had opportunities to come and bring their products to the United States without tariffs for decades. We have had to pay duties to get our products into Peru. This gives our manufacturers, our farmers, and our service providers the opportunity to finally get our products into Peru duty free.

I yield the floor.

Madam President, I suggest the absence of a quorum.

Mr. President, I ask unanimous consent that John Kalitka, who is a detailee on my staff from the Department of Commerce, be granted floor privileges for the duration of the Senate's consideration of H.R. 3688.

Mr. President, I rise to follow Senator Baucus on exactly the same subject. I thank him for the period of time now, this year, he has been chairman of the committee, succeeding my chairmanship, because he has been very cooperative in my efforts to finish investigations that carried over with the change of Congress from Republican to Democratic, and also for helping us initiate new, needed investigations.

But I also wish to take some time to comment exactly on what he had made reference to in the very report he has now submitted for the Record. Since he has submitted a copy, I will not ask permission to do that.

It was about 3 years ago--in fact, the exact date was November 18, 2004--I convened a hearing on the worldwide withdrawal of Vioxx, a blockbuster pain medication.

That hearing turned a spotlight on systemic problems at the Food and Drug Administration. We found that the Food and Drug Administration maintained a very cozy relationship with the drug industry and suppressed scientific dissent regarding agency actions on drug safety.

At that Vioxx hearing, we also heard about Merck using its power, its influence, and access to try and discredit an FDA safety expert, Dr. David Graham--a person who is still on the staff at the FDA trying to do the job of being a policeman for safety for the consumers of American pharmaceutical products.

Merck also tried to intimidate a Stanford researcher, Dr. Gurkirpal Singh. The company warned him to stop asking for more safety data on Vioxx, despite the fact he was one of their paid consultants.

What is troubling is that 3 years later, I am here with my colleague, Senator Baucus, to talk about yet another case where pharmaceutical executives use power, use their influence, and use access to intimidate a medical researcher.

In essence, another company wanted to put an end to another scientist who was voicing concerns about the cardiovascular risks associated with a drug.

Now, in this case--similar to Vioxx--we are talking about a diabetes drug, Avandia.

Today, Senator Baucus and I are releasing a staff report showing how executives at GlaxoSmithKline intimidated Dr. John Buse, a medical researcher at the University of North Carolina.

Together, our respective staffs reviewed documents provided by the company and by others, and they found bothersome internal e-mails that reveal how these pharmaceutical executives think. In these e-mails, high-level company officials discussed the possibility of threats--I am talking about threats by pharmaceutical executives--against Dr. Buse of North Carolina University. These threats included the possibility of filing a lawsuit.

Company executives called Dr. Buse an ``Avandia Renegade'' and had him sign a retraction letter they wanted to give to financial analysts. These analysts were evaluating the company's products for investors.

So what we have are three cases--starting with Dr. Graham, then Dr. Singh, and now Dr. Buse--where companies intimidated researchers who dared to express concerns about the safety of what they thought were risky drugs. In the case of both Vioxx and Avandia, the drugs actually turned out to carry some very serious risks.

What I am here to say today is that attacks on medical researchers by the pharmaceutical industry must stop. And it has to stop right this minute.

Until this practice ends, I wish to let America's scientists know I am very interested in their concerns. Scientists should feel free to contact my office if a pharmaceutical company threatens their career or attacks their reputation when they raise the alarm about possible dangerous drugs.

They can also anonymously provide information and documents by mail or by fax to the committee. Here is the fax number: 202-228-2131.

That is the warning that I put out, and the invitation that I put out.

I yield the floor.

Mr. President, it does not look like anybody else wants to speak, so I suggest the absence of a quorum.

Mr. President, I have the responsibility to pay tribute to a soldier from my home State of Iowa who has fallen in the line of duty. SPC Adrian Hike was killed while serving his country in Afghanistan. He was assigned to A Troop, 1st Squadron, 91st Cavalry Regiment, 173rd Airborne Brigade.

My prayers go out to his mother and father in Iowa and all his family and friends. I understand that his loss has come as a shock to those living in and around Sac City where Adrian attended high school. I know that many Iowans will be saddened to learn of his fate.

At the same time, we can be very proud to call him a fellow Iowan. Specialist Hike was wounded in Iraq, receiving the Purple Heart. After several surgeries, he returned to duty and was even talking about reenlisting. This kind of selfless dedication to our Armed Forces and our country is what has kept us free since the founding of our Nation.

Adrian Hike's honorable service and tremendous sacrifice on behalf of the United States of America should never be forgotten. His was a true patriot and deserves to be remembered as such.

Mr. President, this legislation that Senator Baucus and I are introducing changes the current rules governing tax patents. Recently, the U.S. Patent and Trademark Office, PTO, has allowed the patenting of tax strategies. Because of the serious policy concerns about this practice, our legislation would make tax strategies an unpatentable subject matter.

Tax patents are a relatively recent phenomenon. The rise of these patents can be traced back to the 1998 opinion of the Federal Circuit in State Street Bank v. Signature Financial Group that rejected a per se rule that business methods could not be patented.

As of September 2007, the U.S. Patent and Trademark Office had identified 60 issued tax related patents, with another 99 published tax patent applications pending. The recent growth of these patents, coupled with their deleterious effect on the tax system, necessitates legislative action in this area.

Tax patents undermine the integrity and fairness of the Federal tax system. They place taxpayers in the undesirable position of having to choose between paying more than legally required in taxes or paying a royalty to a third party for use of a tax planning invention that reduces those taxes.

A patent holder can preclude others from using their tax strategy. This may result in taxpayers paying more in taxes than is otherwise legally required. An exclusive proprietary right should not be granted for methods of compliance with the tax law, which is obligatory for all.

The patentability of tax strategies also adds another layer of complexity to the tax laws by requiring patent searches and potential exposure to patent infringement suits.

This legislation contains a general prohibition on ``tax planning inventions,'' with an exception for tax preparation software and other tools or systems used solely to prepare tax or information returns.

I hope that we can move this legislation quickly. The House has already included a version of prohibiting tax strategy patents in their comprehensive patent reform bill. The Senate should act as well.

Technical corrections are derived from a deliberative and consultative process among the Congressional and Administration tax staffs. That means the Republican and Democratic staffs of the House Ways and Means and Senate Finance Committees are involved, as is the staff of the Treasury Department. All of this work is performed with the participation and guidance of the nonpartisan staff of the Joint Committee on Taxation. A technical enters the list only if all staffs agree it is appropriate.

Mr. President, this legislation that Senator Baucus and I are introducing changes the current rules governing tax patents. Recently, the U.S. Patent and Trademark Office, PTO, has allowed the patenting of tax strategies. Because of the serious policy concerns about this practice, our legislation would make tax strategies an unpatentable subject matter.

Tax patents are a relatively recent phenomenon. The rise of these patents can be traced back to the 1998 opinion of the Federal Circuit in State Street Bank v. Signature Financial Group that rejected a per se rule that business methods could not be patented.

As of September 2007, the U.S. Patent and Trademark Office had identified 60 issued tax related patents, with another 99 published tax patent applications pending. The recent growth of these patents, coupled with their deleterious effect on the tax system, necessitates legislative action in this area.

Tax patents undermine the integrity and fairness of the Federal tax system. They place taxpayers in the undesirable position of having to choose between paying more than legally required in taxes or paying a royalty to a third party for use of a tax planning invention that reduces those taxes.

A patent holder can preclude others from using their tax strategy. This may result in taxpayers paying more in taxes than is otherwise legally required. An exclusive proprietary right should not be granted for methods of compliance with the tax law, which is obligatory for all.

The patentability of tax strategies also adds another layer of complexity to the tax laws by requiring patent searches and potential exposure to patent infringement suits.

This legislation contains a general prohibition on ``tax planning inventions,'' with an exception for tax preparation software and other tools or systems used solely to prepare tax or information returns.

I hope that we can move this legislation quickly. The House has already included a version of prohibiting tax strategy patents in their comprehensive patent reform bill. The Senate should act as well.