Max Baucus

Mr. BAUCUS

Mr. BAUCUS. I ask for an additional 2 minutes.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I am pleased to introduce the Community Open Space Bonds Act of 1999 with my colleague, the senior Senator from Utah. This bill is designed to give state and local governments more resources to protect open space, preserve water quality, and redevelop brownfield sites. It provides communities with zero-cost financing options for those activities in an entirely voluntary and locally- driven way. There is no Federal land-use planning involved. The demand for these kinds of community-protection and quality of life activities is plain to see. Open space ballot initiatives in last year's elections were hugely successful. States and local governments set aside nearly $7.5 billion over the next several years to deal with environmental issues raised by growth. Smart growth planning ideas are sweeping the nation. States are steering their investments to preserving open space and encouraging smarter development. These ideas are coming straight from state and local officials and community leaders. People are discussing how they want their communities to look and feel for the first time in decades. Last fall, a state-wide conference in my home state entitled ``Big Sky or Big Sprawl'' brought together Montanans from all over the state to exchange ideas on how to prepare for growth and keep our state ``the last best place.'' This new attention to the impacts of growth is happening for many reasons. Some claim that transportation planning has not kept up with communities' needs for choices and access, causing congestion and lost productivity. Some say that building codes and subdivision regulations have encouraged the development of agricultural and open space areas at the expense of existing suburbs. Some maintain that the tax code drives development in outlying areas while urban and downtown business districts fail. Others suggest that the Federal government's policies on location of post offices and Federal offices has pushed growth out of small and large cities alike. Whatever the cause, growth is exploding across the land. For instance, Los Angeles' land use grew by 300 percent between 1970 and 1990, while population grew by only 45 percent. In the same period, Cleveland actually lost 11 percent of its population, but grew by 33 percent in size. The problem is not growth per se, but the inefficient way that current growth is using today's infrastructure. Some cities like Bozeman, Montana, have had to resort to impact assessment fees in the outlying areas so that the established city's system would not have to subsidize growth away from the already built up areas. The challenge is to encourage growth while maintaining open space and other factors that make our communities desirable places to live and work. Because of our quality of life in the West, people are moving there in droves. We pride ourselves on having lots of space and we want growth. But, growth in environmentally sensitive and water restricted areas poses some unique problems. We have vast amounts of public land that are getting harder and harder to access as growth crowds these areas. That means fewer hunters, fishermen, hikers, and outdoor enthusiasts, can use these lands easily. One result of this growth is that the character of the West is changing rapidly. For instance, Montana grew faster than the rest of the nation in the 1990s. That rate of growth, especially when it is concentrated in a small number of areas, concerns people. They start turning to their state and local government representatives for action to preserve the character of their communities. A recent poll showed that most Americans believe that government at all levels could do a better job of protecting and creating parks and conserving open space. That same poll showed that they are willing to pay for such programs and that they view these programs as a relatively high priority. Leaders at all levels of government should heed these results. Mr. President, the bill we are introducing today is intended to help address this need. We want to give communities the flexible resources they need to creatively manage growth-related problems at the local level. In developing the Community Open Space Bonds Act of 1999, we started with the proposal included in the Administration's FY2000 budget request. We have improved upon it to make it more responsive to local needs and to be equitable in its treatment of small and Western communities. However, the basic idea is still the same. States and local governments, including tribal governments, can compete for the authority to issue bonds on which the Federal government will pay the interest costs. The proceeds from the sale of the bonds can be used to acquire open space, build parks, protect water quality, improve access to public lands and redevelop brownfield areas. Up to $1.9 billion in bonding authority could be issued over each of the next five years. The Federal government would pay the interest costs by giving bondholders a tax credit against their income at the corporate AA credit rate. Rather than having Federal agencies making all the decisions about who gets bonding authority, we are establishing a Community Open Space Bonds Board. This Board will be dominated by non-Federal interest, such as Governors, County Commissioners, Mayors, etc. and will be given specific guidance to use in developing application criteria. This guidance will stress the need for an equitable distribution of bonding authority to all regions of the country and to all sizes of communities and for all the different qualifying purposes. We have also guaranteed that each state or a community in such a state will get at least one allocation of bonding authority per year. We think these modifications improve the original proposal and are worthy of support by our colleagues from both sides of the aisle. We stand ready to work with them to address their concerns and get this bill enacted. Mr. President, local governments across the country are looking for new and low-cost ways to maintain and preserve the quality of life in their area. Community Open Space Bonds are a great opportunity for all our citizens to improve the long term health and economic viability of our communities. I am hopeful we can pursue this opportunity in a bipartisan and constructive way. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise today to support the adoption of the Conference Report to accompany S. 507, The Water Resources Development Act of 1999, WRDA. As we all know, the Water Resources Development Act of 1998 passed this Chamber last year, but was never enacted. This Conference Report builds upon the work done on that legislation and includes some additional projects and programs for the Army Corps of Engineers. With the adoption of this conference report, we wrap up some unfinished business from the 105th Congress and are back on course for development of a Water Resources Development Act for 2000. S. 507 authorizes projects for flood control, navigation, shore protection, environmental restoration, water supply storage and recreation, as well as several studies which will be the basis for future Corps projects. The projects have the support of a local sponsor willing to share the cost of the project with the Federal Government. Many of the projects contained in this bill are necessary to protect the nation's shorelines, along oceans, lakes and rivers. Several of the navigation projects need timely authorization in order to keep our ports competitive in the global marketplace. The projects will be reviewed by the Army Corps of Engineers and must be in the federal interest, technologically feasible, economically justified and environmentally sound in order to go forward. In other words, these are projects worthy of our support. Furthermore, the bill authorizes studies, including a comprehensive, cumulative impact study of the Yellowstone River in my home state of Montana, that need to get underway so that we can make informed decisions about the future use and management of these precious resources. In addition, the conference report contains a new continuing authorities program, known as Challenge 21. This program, proposed by the Administration and supported by the conferees, emphasizes non- structural flood damage reduction measures and riverine and wetland ecosystem measures that conserve, restore and manage the natural functions and values of the floodplain. We hope that this new program will integrate needed flood damage reduction with the ecosystem in a more natural way than traditional brick and mortar. Programs like Challenge 21 will help move the traditional Corps' mission into the next century. I am pleased the conference report has been approved.

Mr. BAUCUS. I look forward to working with the Senator on more improvements for flood protection for Sacramento in subsequent WRDA bills.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I am pleased to introduce the Community Open Space Bonds Act of 1999 with my colleague, the senior Senator from Utah. This bill is designed to give state and local governments more resources to protect open space, preserve water quality, and redevelop brownfield sites. It provides communities with zero-cost financing options for those activities in an entirely voluntary and locally- driven way. There is no Federal land-use planning involved. The demand for these kinds of community-protection and quality of life activities is plain to see. Open space ballot initiatives in last year's elections were hugely successful. States and local governments set aside nearly $7.5 billion over the next several years to deal with environmental issues raised by growth. Smart growth planning ideas are sweeping the nation. States are steering their investments to preserving open space and encouraging smarter development. These ideas are coming straight from state and local officials and community leaders. People are discussing how they want their communities to look and feel for the first time in decades. Last fall, a state-wide conference in my home state entitled ``Big Sky or Big Sprawl'' brought together Montanans from all over the state to exchange ideas on how to prepare for growth and keep our state ``the last best place.'' This new attention to the impacts of growth is happening for many reasons. Some claim that transportation planning has not kept up with communities' needs for choices and access, causing congestion and lost productivity. Some say that building codes and subdivision regulations have encouraged the development of agricultural and open space areas at the expense of existing suburbs. Some maintain that the tax code drives development in outlying areas while urban and downtown business districts fail. Others suggest that the Federal government's policies on location of post offices and Federal offices has pushed growth out of small and large cities alike. Whatever the cause, growth is exploding across the land. For instance, Los Angeles' land use grew by 300 percent between 1970 and 1990, while population grew by only 45 percent. In the same period, Cleveland actually lost 11 percent of its population, but grew by 33 percent in size. The problem is not growth per se, but the inefficient way that current growth is using today's infrastructure. Some cities like Bozeman, Montana, have had to resort to impact assessment fees in the outlying areas so that the established city's system would not have to subsidize growth away from the already built up areas. The challenge is to encourage growth while maintaining open space and other factors that make our communities desirable places to live and work. Because of our quality of life in the West, people are moving there in droves. We pride ourselves on having lots of space and we want growth. But, growth in environmentally sensitive and water restricted areas poses some unique problems. We have vast amounts of public land that are getting harder and harder to access as growth crowds these areas. That means fewer hunters, fishermen, hikers, and outdoor enthusiasts, can use these lands easily. One result of this growth is that the character of the West is changing rapidly. For instance, Montana grew faster than the rest of the nation in the 1990s. That rate of growth, especially when it is concentrated in a small number of areas, concerns people. They start turning to their state and local government representatives for action to preserve the character of their communities. A recent poll showed that most Americans believe that government at all levels could do a better job of protecting and creating parks and conserving open space. That same poll showed that they are willing to pay for such programs and that they view these programs as a relatively high priority. Leaders at all levels of government should heed these results. Mr. President, the bill we are introducing today is intended to help address this need. We want to give communities the flexible resources they need to creatively manage growth-related problems at the local level. In developing the Community Open Space Bonds Act of 1999, we started with the proposal included in the Administration's FY2000 budget request. We have improved upon it to make it more responsive to local needs and to be equitable in its treatment of small and Western communities. However, the basic idea is still the same. States and local governments, including tribal governments, can compete for the authority to issue bonds on which the Federal government will pay the interest costs. The proceeds from the sale of the bonds can be used to acquire open space, build parks, protect water quality, improve access to public lands and redevelop brownfield areas. Up to $1.9 billion in bonding authority could be issued over each of the next five years. The Federal government would pay the interest costs by giving bondholders a tax credit against their income at the corporate AA credit rate. Rather than having Federal agencies making all the decisions about who gets bonding authority, we are establishing a Community Open Space Bonds Board. This Board will be dominated by non-Federal interest, such as Governors, County Commissioners, Mayors, etc. and will be given specific guidance to use in developing application criteria. This guidance will stress the need for an equitable distribution of bonding authority to all regions of the country and to all sizes of communities and for all the different qualifying purposes. We have also guaranteed that each state or a community in such a state will get at least one allocation of bonding authority per year. We think these modifications improve the original proposal and are worthy of support by our colleagues from both sides of the aisle. We stand ready to work with them to address their concerns and get this bill enacted. Mr. President, local governments across the country are looking for new and low-cost ways to maintain and preserve the quality of life in their area. Community Open Space Bonds are a great opportunity for all our citizens to improve the long term health and economic viability of our communities. I am hopeful we can pursue this opportunity in a bipartisan and constructive way. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise today to express my concern that S. 1233, the Agriculture Appropriations bill for FY2000 does not include adequate funding for carbon cycle or carbon sequestration research. The Administration has proposed approximately $22 million for these programs at the Natural Resource Conservation Service (NRCS) and the Agriculture Research Service (ARS). With that money, scientists can develop a better understanding of the potential for agricultural lands to serve as carbon sinks. These programs are priorities in the U.S. Global Change Research Program and the Administration's Climate Change Technology Initiative. Once we more thoroughly understand how our soils capture and store carbon, we can use that knowledge to improve our management practices and yields. We can also cost-effectively use soils to offset carbon emissions that might lead to global warming. Failure to provide these funds is short-sighted and may prevent farmers and ranchers from reaping profits through storing carbon on their land in the near future. Agricultural lands in the U.S. have a huge potential to store carbon that would otherwise be released into the atmosphere. Each year, the U.S. emits about 1.5 billion metric tons of carbon equivalent (MMTC) or gases that contribute to the greenhouse effect. According to USDA experts, properly managed U.S. croplands could be major sinks or reservoirs of carbon. They could sequester, or store, 85-200 MMTC more per year than the agriculture sector does now. If a coordinated program to manage carbon in agricultural soils were implemented worldwide, some experts project that carbon sequestration could increase to the rate of 3000 MMTC per year. This rate is equal to the world's net annual increases in atmospheric carbon dioxide. Mr. President, about 25-30% of our nation's farmers, growers and ranchers are already employing best management practices which will effectively store carbon, so farmers and ranchers would not need to adopt radically new production techniques to store carbon. Most find these practices very cost-effective for their bottom-line because the land rewards them for their attention. There are higher yields with increased carbon storage, less erosion, and improved soil and water quality. As an example, adoption of conservation tillage and residue management practices could lock up about .2 metric tons of carbon per acre every year. Eventually, as actions by some of our major trading partners are now demonstrating, there is likely to be a worldwide market in carbon credit trading, regardless of what happens to the Kyoto Treaty in this country. This is a terrific economic opportunity. As we discuss the sorry state of American agriculture and the family farm in the context of this bill, we should keep in mind that soil carbon storage could become a very lucrative opportunity to maintain income levels. Experts are projecting that carbon credits will sell for somewhere between $10- $50 per ton and maybe higher. So, a farmer using best management practices on his 1000 acres could possibly get payments of $2,000- $10,000 or more per year for storing carbon. Mr. President, the very modest sums that the Administration is seeking for these programs are not to implement Kyoto through some back-door method. There are legitimate scientific questions that need to be answered whether or not one believes Kyoto is necessary. Understanding soil science better will improve crop yields, make range management more efficient, and provide a host of environmental quality benefits. This knowledge will benefit all those who produce food and fiber. I should note for my colleagues that there will be a national conference to explore opportunities for carbon sequestration in Missoula, Montana, from October 26-28. The purpose of this conference is to provide information and education on carbon sequestration activities to mitigate carbon dioxide emissions through market-based conservation. Many of the experts that will speak at this conference are scientists whose work would be furthered if Congress funds the Administration's request. The efforts of the Montana Carbon Offset Coalition to establish a pilot carbon trading program would also be helped along by funding these programs. Mr. President, there are many pressing needs facing Congress and, in particular, the managers of the Agriculture Appropriations bill. I just think that we should make investing in our future a priority. Soils seem to be a great low-cost way for us to reduce the impact our country has on the global climate. Even for those who do not believe climate change is happening due to mankind's emissions, increasing soil carbon content has huge side benefits for the economy and the environment. I hope the managers will find a way to fund these important programs in conference.

Mr. BAUCUS

Mr. BAUCUS. Madam President, a lot of us have listened quite intently, and some of us not very intently, to the debate. Very simply, cutting to the chase, the question before us is whether to adopt an agriculture emergency assistance bill in the amount of roughly $10 billion--$10.6 billion, I think--that is proposed by Members essentially on this side of the aisle, or, in the alternative, a bill that is about half that much. The main difference between the two is not only the amount, but also the failure, in my judgment, of the bill on the other side to provide drought assistance. It is emergency drought assistance. We have all watched on television in the last several days how dry so much of America is and how farmers' crops are not growing and are not going to be harvested. In some parts of the country, it is not only drought; paradoxically, strangely, it is flooding. There is too much moisture in some parts of the country, making it impossible for farmers to grow a productive crop. Compounding that, there is a very low price. According to the wheat producers and barley producers, livestock, hogs--you name it--the prices are just rock bottom, and they have been very low for a long time. So it is a combination of very low prices, historically low prices, for some commodities, and the weather. The outlook is not good. The outlook for increased prices in the basic commodities we are talking about, as well as livestock, is grim. Nobody can project or foresee a solid, sound reason why prices necessarily are going to go up in the next several years. What conditions are going to cause prices to go up? What is going to change or be different? To be truthful, there isn't much we can see that is going to be much different. Producers are going to still produce. Other countries, particularly emerging and developing countries, are going to try to produce more agricultural products than they now are producing. On top of that, there is the phenomenon of a growing concentration of economic power in the beef packing industry, or in the grain trade, where the middlemen, if you will--that is, the traders, the packing plants, and retailers--are making money but the producers are not. That is not going to change in the foreseeable future. At least I don't see anything that will cause that change. So, essentially, we are here today because farmers are getting deeper and deeper and deeper in trouble. Their prices are continually falling. I hope my colleagues took a good look at the chart presented by my good friend, the Senator from North Dakota, Mr. Dorgan--the one that showed in current dollars what the price of wheat was in 1930, 1940, 1950, and 1960. The current price of wheat in today's dollars is roughly $2 a bushel. Back in 1930, in current dollars, adjusted for inflation, it was about $7.50 a bushel. In 1940 and in 1950--I have forgotten the chart, but I think it was as high as maybe $13 or $14 a bushel. You can see how the price generally has declined over the years for farmers, and it has declined greatly. This is not just a minor drop in price. It is a precipitous drop in price. It is steady. It is constant. As I said, I can't see much that is going to cause a significant difference unless we in the Congress and in the country make the changes, which I will get to in a few minutes. On the other hand, the prices that farmers pay for their products over the same period of time have risen dramatically-- whether it is the prices the farmers pay for fertilizer, for gasoline, for tractors or combines, for fencing, or for labor costs. You name it. All of the costs that farmers pay have continually risen to a very steep trend over the past 20 or 30 years since the Depression, and at the same time prices that farmers get for their products generally have fallen, although there was a period several years ago where prices were high--$5, $6, or $7 a bushel. That was about 5, 6, 7, or 8 years ago, as I recall. But generally the trend is down. Why has this happened? It has happened for a couple of reasons: One, many more countries are producing products--wheat, barley, and so on and so forth. Second, as I mentioned, the concentration of economic power in the retail industry, in the wholesale industry, and in the packing industry, but not a concentration of power for the farmers. On top of that, recently there is the Asian downturn where the Asian economies a couple of years ago began to deteriorate. Their purchasing power dropped dramatically. They devalued their currencies in order to try to prop themselves up. As a consequence, American exports to Asia fell dramatically--in combination with the low demand, particularly from Asia, and the higher supply, particularly in countries producing and, on top of that, the drought and too much rain in some parts of the country. So we are here today to try to decide what the size of the emergency assistance should be. I submit that we should not only make the direct payments to farmers but we also should accommodate the drought. We should accommodate the farm disaster that has beset the farmers in addition to the economic disaster. That is just a short-term, immediate solution. We should get on it right away, and we should get it passed this week, lock, stock, and barrel--all of it passed this week to give farmers a little bit of hope. Then, to begin to give farmers a little more hope for the future, we have to pass a modification to the so-called Freedom to Farm bill. We have to pass a new farm bill. I remember when Freedom to Farm was debated. Most farmers I talked to in my home State of Montana were very leery and very nervous about this Freedom to Farm bill. A lot of them--I daresay a majority of them--went along with it because at that time prices were a little higher. As I recall, it was about one-plus a bushel. The so-called AMTA payments were a little higher. There was more money in farmers' pockets. But farmers knew--the ones I talked to, and I talked to a whole bunch of them--that we would get on with it then, but on down the road there was going to be a real problem, and probably times were not going to be nearly as good as they were then. But we kind of swept that problem under the rug and thought we would cross that bridge when we got there. We are there. It has happened. We are in trouble. Farmers know it. So let's just get this thing passed. But we very quickly have to begin to address the peaks and the valleys in the prices that farmers face. I would like to remind folks in the cities that farmers are in a much different situation from most any other business person because farmers cannot control their price. The price is determined by the vagaries of the market, the vagaries of weather, and it is international; it is an international price in most cases. They have virtually no control over their prices. Take any other businessperson. He or she can raise or lower their prices to sell to retailers or to sell to consumers. There are ways to adjust to help maximize their return. Moreover, farmers cannot control their costs. They have to pay what that farm implement dealer charges. They have to pay what that fertilizer costs. They just have to pay that price. They have virtually no control over their costs. Any other businessperson has a lot of control over his or her costs--either by downsizing, laying a few people off here or there, making other adjustments, or cutbacks. Big businesses can certainly make big adjustments to costs, and have, with major downsizing. The farmer can't do that. The farmer has no control over costs and virtually no control over prices. That is why we have to have some kind of legislation that evens out the peaks and valleys and gives farmers a modicum of a safety net. We need that desperately, and, for the sake of farmers, we need to get that passed. One final point: This is a subject for a later day. But we need a level international playing field. We do not have it today. I give a lot of credit to our USTR, to the administration, and to others who have worked to try to make it more level. They have worked harder, if the truth be known, than other administrations have. We are nowhere close to the position where we have to be. I will mention two subjects, and then I will close. One is export subsidies. We need an end to world export subsidies for agriculture. They have to be eliminated. Today the European Union accounts for about 86 percent of all the world's agricultural export subsidies. We Americans account for about 1 to 2 percent. Europeans have 60 times the agricultural export subsidies that we have. That is a very great distortion of the market. Agricultural export subsidies are paid to European farmers if they export. What is the farmer going to do in Europe? He exports. He gets a subsidy for it--and a big, healthy subsidy for it. That is to say nothing about all the internal price supports the Europeans have that are much greater than ours. The ministerial in Seattle begins at the end of this year. As we approach the next WTO, one of our main objectives, one of our main goals should be the total elimination of agricultural export subsidies. That is going to help. That is going to help reduce the worldwide supply just a little bit. And every little bit helps. I have a lot of other ideas about what we can do as well, but that is one that is very critical. Point No. 2: In general, on the WTO, there are a lot of things we have to do to level the playing field so that Americans are no longer suckers and taken for granted to the degree that we have been. But to sum it all up, let's pass this agriculture emergency aid bill immediately. Let's pass the bill that makes sense, the one that helps farmers. And that is the one that not only puts some money back into farmers' pockets for the short term but also addresses the drought, which the other bill does not address. It addresses the disaster caused in some parts of the country by excessive flooding and rain. Really, what is happening is that the farmer is in intensive care. The farmer needs an oxygen mask, and the farmer needs a blood transfusion. That is where we are. We have to give the farmer the oxygen mask. We have to give the farmer the blood transfusion so that the farmer is no longer in intensive care. That oxygen mask and that blood transfusion is this bill. It is the bill that is sponsored by the Democratic leader and the Senator from Iowa. That is the bill that is going to take care to get that patient back out of intensive care. The next step, which we have to take very soon, is to get that patient rehabilitated and get that patient some physical therapy. It will take some other procedures in the hospital so that the farmer can compete in the real world as a real person again. I hope we get to that point very quickly. I yield the floor.

Mr. BAUCUS

Mr. BAUCUS. I thank the Senator.

Mr. BAUCUS. Mr. President, I was on the floor and objected.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I would like to talk today about the relationship between trade and the environment. When I joined the Finance Committee in 1979, debate about the Tokyo Round was just concluding. I don't remember a single mention of water pollution, air pollution, or the protection of sea turtles and other endangered species--important issues, but they were not part of the trade debate. NAFTA changed this. We negotiated the environmental side agreement, and created the North America Commission on Environmental Cooperation. There were flaws and limitations, but it was a turning point. Now, like it or not, environmental issues are an integral part of the trade debate. Environmental group opposition was one of the major reasons for the defeat of Fast Track legislation last year. Ambassador Barshefsky has said that the next round of trade negotiations should expressly address environmental protection. Two months ago, the WTO held a series of high level roundtable discussions on trade and the environment, in part to help define the issues for consideration in Seattle. Why has this happened? It is partly a function of technology. Environmental groups have plugged into the Internet--aggressively. Browse the web sites of almost any environmental group, and you will see what I mean. Any citizen can follow a high-level environmental trade dispute on the Internet. The heretofore insulated, inaccessible, and arcane international trade world meets the chaotic, grassroots, democratic, and Internet-savvy environmental world. Let me tell my friends in the trade world something about my friends in the environmental world. I have worked with them for years. Sometimes on the same side, sometimes in disagreement. They are smart, dedicated, energetic, and aggressive. And they are very good at using the latest communications technology. So, if you are uncomfortable with the new role of the environmental community in the trade debate, my only advice is: Get used to it and figure out how to work together. The same advice goes to my environmental friends: The trade folks are here to stay. Figure out how to work with them. There's a second important reason why environmental protection is now an important part of the trade debate. We are in the midst of an economic boom in the United States and the revolution of globalization. Globalization is bringing every classroom in every small western town, and on every Native American reservation, smack into the middle of the information-based global marketplace. It allows small businesses all over the world to tap into the global marketplace. It's forcing virtually every company to become more competitive. But there's another side to the story. Call it the dark side of globalization. And it has a long history. America's age of industrialization created great wealth and progress. But it left behind a terrible environmental legacy. Rivers so infected with toxic chemicals that they caught fire. Abandoned mine tailings that dot the landscape of the mountainous west. The loss of wetlands and other habitat necessary to sustain the animal and plant species upon which our survival depends. In America, we have turned the tide. Our air and water are cleaner now. But we have seen what unchecked economic development did to us. Extend that kind of growth worldwide. And pick up the pace, to reflect the hyper-speed of global competition. As globalization accelerates, along with the expanded trade that accompanies and fuels it, we are likely to see a rapid increase in environmental problems. Tom Friedman puts it this way, in The Lexus and the Olive Tree: [globalization has] unleashed forest-crushing forces of development . . . which, if left unchecked, [has] the potential to destroy the environment and uproot cultures, at a pace never before seen in human history. Let me give you two examples. For years, Montanan and other U.S. softwood lumber producers have been fighting against subsidized Canadian imports. One continuing issue is Canada's relatively weak environmental standards for timber harvesting. Canada has no law, at the federal or provincial level, like our Endangered Species Act. This gives Canadian producers an economic advantage over U.S. producers. It also can have a serious environmental effect. In Montana, we're struggling to protect the Bull Trout, which is listed as an endangered species. One of the biggest populations resides in Lake Kookanusa, just south of the Canadian border. In the spring, the fish swim up Wigwam Creek, across the border in British Columbia, to spawn. Recently, British Columbia announced a program of aggressive timber harvesting in the Wigwam Basin. Maybe things will work out, and the harvesting will occur in a way that does not threaten the Bull Trout. But, if not, our efforts to protect an endangered species in this country will be undermined because of another developed country's environmental laws that are deliberately weak to support an industry interest. Or consider the objectives of the Endangered Species Act which includes preserving biodiversity, the web of life that sustains us. We're losing species at an alarming speed--perhaps a thousand times the natural rate. No matter how strictly we protect species here in the United States, if the South American rain forest continues to disappear at the current rate, all of our efforts will have been futile. The message is simple. Globalization and expanded trade benefit us. But we must ensure that globalization and expanded trade are conducted in a way that enhances, and does not undermine, environmental protection. One thing that worries my greatly is the polarization that has occurred among participants in the trade and environment debate. The middle ground seems to have fallen into a sink hole. Yet the middle is where we need people to find solutions to these very difficult problems. Let's turn to the next round of multilateral trade negotiations that will be the subject of the WTO Ministerial in Seattle in late November. We must accommodate globalization and expanded trade while, at the same time, preserve and enhance environmental protection. America must lead. We are the world's largest economy. We are the world's largest trader. And we are the world's leader in developing strong environmental laws. As in many different areas, if we don't exert leadership, no one else will. This is not arrogance. This is not unilateralism. This is leadership, and I offer no excuses and no apologies for it. I believe that we must follow three broad precepts in developing the proper linkage between trade and the environment. Call these my ``Three No's''. Trade liberalization must not harm the environment: Trade rules must not be used to stop legitimate and reasonable environmental protection; Environmental regulations must not be used as an instrument for trade protection that closes markets and distorts trade flows. We need to balance trade and environmental goals and prevent trade and environmental abuses. So, let me turn to my agenda for trade and the environment in the next round of trade negotiations. First, the WTO dispute resolution process must be made more open, transparent and publicly accessible. This is important in the context of environmental law and regulation, which relies heavily on citizen suits and the public's right to know. And it is important in the context of the WTO's credibility. Secrecy does not enhance respect and confidence in institutions. The GATT was created in an era when nation-states were the only significant actors on the world scene. The WTO followed the same structure. But it does not reflect today's reality where non- governmental entities have become important international and national players. The rules and procedures must accommodate these new actors. The dispute settlement process takes too much time and must be shortened significantly. Loopholes that allow delay in complying with decisions must be closed. Second, the Administration must conduct an environmental assessment for the trade agreement that will emerge from the new round. I will introduce legislation soon requiring such a review. Third, we should eliminate all tariffs on environmental goods and services. One important way to improve environmental conditions in other countries, especially in developing countries, is to reduce the cost of environmental technology--everything from the elements of a sewage treatment plant to catalytic converters to groundwater bioremediation technology. U.S. companies are leaders in this field, so reduced tariffs will have the added advantage of increasing U.S. exports. My fourth item involves environmentally harmful subsidies. In some cases, like fishing and agriculture, excessive subsidies lead to practices that are both economically and environmentally harmful. By limiting such subsidies, we can achieve a ``win-win,'' that makes good economic and good environmental sense. I would like to see the total elimination of fishing subsidies. Export subsidies for agriculture should be eliminated worldwide. We should also start looking seriously into the reduction of domestic agricultural subsidies throughout the world. The fifth item relates to other subsidies--the so-called ``pollution subsidy'' where intentionally keeping environmental standards weak can be an unfair and unacceptable practice that distorts trade, cuts costs of production for the polluter, and makes taxpayers pay the difference through higher health and environmental cleanup costs. A sub-set of this problem is that of PPMs--production processes and methods. How a product is produced affects the environment. Examples include the way shrimp harvesting affects sea turtles, and the way timber harvesting affects species, water pollution, and the demand for recycled materials. These are complex issues. Some argue that the WTO has already accepted the principle that a production process can determine how a product should be treated. They point out that countries already determine if an imported product was made with improperly obtained intellectual property or with improper government subsidies. If so, those countries can prevent the import of that good because of the process of production. They argue that if this is the rule under the WTO for intellectual property and for subsidies abuses, it should be the rule for environmental processes as well. The WTO needs to take on this set of tough issues that sits clearly at the intersection of trade and the environment. We need serious and responsible discussion now. Sixth, the environmental community believes that we need to find a way to integrate multilateral trade agreements and multilateral environmental agreements, MEAs, and they are right. Actions taken under an MEA should not be subject to a GATT challenge. There are two ways to go about this. One is to ``grandfather'' specific environmental agreements, as we did in NAFTA. We could start out by providing a so- called ``safe haven'' for the Montreal Protocol and CITES, the Convention on International Trade in Endangered Species of Wild Fauna and Flora. The other is to describe the characteristics of an MEA that will automatically be protected. Let me add a few other agenda items that are unrelated to my Seattle list but need to be on our ``to do'' list in the United States. First, we should take a hard look at the NAFTA environmental side agreement, and see how it is working. I will ask the key Congressional Committees, including the Senate Environment and Public Works Committee, to conduct appropriate oversight. Second, we need to improve our domestic trade policy institutions. And that includes enhancing the role of Congress in trade negotiations. Last week, in a speech at the Washington International Trade Association, I proposed the establishment of a Congressional Trade Office. This office would provide the Congress with additional independent, non-partisan, neutral trade expertise. Its functions would include: monitoring compliance with major bilateral, regional, and multilateral trade agreements; analysis of Administration trade policy, trade actions, and proposed trade legislation; participation in dispute settlement deliberations at the WTO and NAFTA, and evaluation of the results of dispute settlement cases involving the United States. The National Wildlife Federation and the Sierra Club have proposed such an office, although the functions in my concept are quite different. I will be offering legislation on this later this year. One of the most difficult issues that has arisen in recent years has been the relationship between trade policy and environmental protection. The lack of consensus on this relationship has been one of the major reasons that we have not been able to proceed with fast track legislation in the Congress. Paralysis helps no one. I hope that the thoughts I have set out today for Seattle and for our own domestic agenda will help to begin a constructive and responsible dialogue between the trade and the environmental communities. We need trade. We need environmental protection. We need a sustainable earth, and that means a clean world and a growing world--more and better jobs everywhere, increased income, cleaner air and water, the protection of our natural heritage for future generations. These goals are only incompatible when people are unwilling to talk about them together. I yield the floor.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I raise a point of order that the pending amendment violates 313(b)(1)(A) of the Congressional Budget Act of 1974.

Mr. BAUCUS. Mr. President, I think that is a good offset. It adds a little more progressivity, frankly, to the bill, than otherwise would be there. I compliment the Senator on her amendment.

Mr. BAUCUS. Mr. President, we have not seen a copy of this amendment, but I assume it is the standard flat tax that has been discussed for years. If that is the case, then the net effect of it will be, for most income earners, most American taxpayers, in effect, a tax increase. The only taxpayers with a tax reduction under the standard flat tax proposal will be those of adjusted gross incomes of over $200,000, and the tax reduction will be 50 percent. Stated differently, this is a tax on workers but it is not a tax on investment income, it is not a tax on other income, which I think is unfair. In any event, the amendment is not germane. I raise a point of order that it violates section 305(b)(2) of the Budget Act.

Mr. BAUCUS. If the Senator will yield just a few minutes?

Mr. BAUCUS. Mr. President, I again compliment my good friend, the Senator from Texas, as well as the chairman of the committee. The Senator from Texas offered this amendment last night, and at that time I explained we thought this was a very good amendment because it moves in the direction of the Democratic substitute, raising the standard deduction, in her case for married couples, to eliminate the marriage tax penalty. We would have gone further, but we compliment the Senator in going in this direction. Last night, too, there was a slight question how this was going to be paid for. We have worked it out overnight. As I understand it--the Senator may correct me if I am wrong--the AMT delayed relief provisions are no longer in place, but rather there will be a delay in the expansion of the 15-percent bracket in order to pay for this.

Mr. BAUCUS. Mr. President, with great respect, I must inform this body that this amendment is pure fiction. It is pure fiction because the House and the Senate this year have been using Congressional Budget Office baseline numbers to predict what the surplus is or is not and what is left for spending. Under that formula, there is virtually no money in this tax bill left for discretionary spending. A few days ago, a new chart suddenly popped up. The new chart comes up with this money. How does it come up with this money? It basically assumes that the Congress, over the next 10 years, is going to not only cut discretionary spending under the caps as planned but then not raise discretionary spending above inflation over the next 8 years. I say that is a fiction--it is just not going to happen, so the money is not there--developed by this recent new chart. If it is an accurate assumption that there is no spending, then it cuts discretionary spending by 50 percent, one or the other. It is a fiction.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, pursuant to section 904 of the Budget Act, I move to waive the applicable sections of that act for the consideration of the pending amendment. Mr. President, I ask for the yeas and nays.

Mr. BAUCUS. Mr. President, this is a very simple matter before the Senate. It is a choice: Do we want to protect Medicare or not. It is that simple. That is the choice that we are presented with today. The amendment I am offering is the House lockbox which passed the House by an overwhelming margin--it only had three or four votes against it--along with the Medicare lockbox. The Medicare lockbox we provide sets aside one-third of the on-budget surplus for Medicare. It can be used in whatever way we want to use it for Medicare, including to provide an affordable prescription drug benefit or for shoring up Medicare solvency. That is the choice before the Senate. Do we preserve Medicare or not. Our choice here today, however, is nothing compared to another choice. That is the choice that about 16 million seniors must make every day: Do I choose to buy my medicine, choose to pay the rent, or choose to buy food? We are saying set aside and preserve for Medicare one-third of the on-budget surplus so that the choices facing seniors are not quite as abhorrent.

Mr. BAUCUS. The Senator from Delaware delegated that to the Senator from Montana.

Mr. BAUCUS. Mr. President, I yield 1 minute to the Senator from California and then 10 minutes to the Senator from Wisconsin, off the bill.

Mr. BAUCUS. What you have done is, you have gone back to CBO and said, OK, let's assume that there is no inflationary increase.

Mr. BAUCUS. Well, you stayed away.

Mr. BAUCUS. I want to hear it.

Mr. BAUCUS. I yield 2 more minutes to the Senator.

Mr. BAUCUS. Mr. President, I suggest the absence of a quorum.