Max Baucus

Mr. BAUCUS

Mr. BAUCUS. I move to lay it on the table. The motion to lay on the table was agreed to. source water protection

Mr. BAUCUS. I concur in the response made by the Senator from Rhode Island. This bill does not discriminate against State or local programs that include enforcement authority, it merely sets up a different framework. Both purely voluntary programs, as well as programs like the Wisconsin Priority Watershed Program, are authorized to use funding from the State's SRF allocation through state administration of a [[Page S 17772]] source water quality protection program.

Mr. BAUCUS. The committee report at page 38 says that the bill does not apply to the stage I rulemaking because that rule has already been proposed in a detailed form. Does the Senator's statement affect that part of the committee report?

Mr. BAUCUS. I agree with Senator Kempthorne's interpretation. In the arid west, where irrigation systems may cover vast distances, it would be unfair and impractical to treat an irrigation system as a public water system just because a number of people withdraw water for drinking water use without the permission or knowledge of the system, and I do not believe that the provision applies to such situations.

Mr. BAUCUS. Madam President, how much time is remaining on each side?

Mr. BAUCUS. Madam President, I will take 4 minutes. All of us greatly admire the Senator from California. I do not know any Senator, frankly, who is a stronger advocate for environmental protection than the Senator from California. She is very persistent and perceptive in her efforts to protect the environment. She has already said--and I think most Senators agree--that the bill before us is a very good safe drinking water bill. It sets very good--more than good, excellent standards--that apply to States around the country as they direct their systems to comply with certain standards and contaminant levels and so forth. The amendment the Senator from California offers, I think, goes too far. Essentially, it says that what California is doing, issuing reports to each consumer with respect to a whole lot of information, now must apply to all States; that is, the Federal Government must adopt the same requirement. It is regulatory overkill. Let me very briefly indicate some of the specifics that this amendment would require systems to provide to consumers. It would require reporting the source--I do not know whether this means groundwater, rivers, or whatever. It requires reporting on content, that could be most anything. The quality of the water requirement is vague. A multiworded explanation of the health implications of contaminants relative to national primary drinking water regulations is required. Even though the State and the system may [[Page S 17770]] be meeting all the standards, still consumers have to be notified as to the health implications of those contaminants--even though regulated. I am just touching the tip of the iceberg listing the requirements that must be given to consumers. The long and short of it is, if California or any State wants to, according to its own law, require a whole host of information about what the water contains, even though the system is meeting all the standards required by law, then let that State make that decision. One reason we are here today writing this bill and making amendments to the Safe Drinking Water Act is because, under the 1986 amendments to the act, we unfortunately required systems, States, and the EPA to do way too much, to dilute its resources pursuing a lot of different efforts, instead of concentrating on the most egregious contaminants and problems and focusing priorities on the problems a system should meet to make sure the water is as pure as can be for the consumers. If systems do what this amendment proposes, it would further dilute and distract resources. Systems would have to spend a lot of time trying to figure out what all this is, even though they are doing what is required of them and meeting the law. I urge Senators to look and see what is in this amendment. I think they will realize that we should not be requiring all States to do something that one State may want to do. If a State chooses to do so, fine. This does not limit States from taking these actions. I do not think we should require all this additional information which, as the Senator from Rhode Island pointed out, is not going to be read. I know the interest groups will do a good job of filing lawsuits and doing whatever they want to do if a State system is not meeting standards. They should. I take my hat off to them. But we should not go overboard with a lot of red tape and bombard people with information they are not even going to read.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I am pleased to take this opportunity to recognize the Yellowstone County DUI task force in my State, Montana. They have been selected by the National Commission Against Drunk Driving to receive their eleventh annual citizen activist award on December 4, 1995. The accomplishments of the Yellowstone County DUI task force are two- fold. Not only did they continue their educational activities, they also worked with State leaders to form a legislative agenda to curb drunk driving. The results of their efforts are apparent. Our State now boasts the most comprehensive DUI legislative package ever passed in a single legislative session. I would also like to recognize three members of the Yellowstone County DUI task force who were instrumental in bringing about their organization's accomplishments: Diane Stanley, Peter Stanley, and Angie Bentz. They, along with many other tireless workers, have earned the recognition of this body. Congratulations and good work.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, in Montana, we call Butte the Can-Do City. And there is nobody who personifies Butte's can-do spirit more than its former chief executive, my friend, Don Peoples. Butte's paper, the Montana Standard, recently ran an article about Don's career in Butte. Don is a modest person; a man of few words. And I suspect he is a little bit uncomfortable with all this attention. But it is attention he richly deserves. Mr. President, I ask unanimous consent that the Montana Standard article be printed in the Record. And I ask my colleagues to take a moment to read about how a remarkable man has made such a difference for his community and home State.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, we all recognize general Norman Schwarzkopf as a great military leader. But what most Americans probably do not know is that he is also deeply devoted to the cause of conserving one of our most precious resources, our wildlife. In cooperation with a number of my constituents in Montana, General Schwarzkopf have been involved in a remarkable effort to increase public understanding and appreciation of the wildlife that help make Montana and America so special. As General Schwarzkopf has said: In traveling and living throughout all parts of our world, I have learned that we possess in this country of ours and in neighboring Canada one of the most marvelous arrays of wildlife and wildlands found anywhere. Yet, as any Montanan can tell you, each year people are killed or injured and wildlife is lost unnecessarily because of conflicts that should have been avoided. So General Schwarzkopf and Chuck Bartlebaugh of Missoula, MT have decided to do something about it. The Center for Wildlife Information has been established in Missoula. By creating a series of public [[Page S 17440]] service announcements, seminars, conferences, and other public education activities, they are working successfully to increase public respect and understanding of our wildlife resources. A project recently announced by the Center is particularly exciting. With the support of Plum Creek Timber Co., the Center for Wildlife Information and Columbia Falls Junior High, located close to the western gateway of Glacier National Park, are working to develop a bear-awareness and wildlife stewardship education program. Under the direction of Columbia Falls Junior High's principal Neal Wedum, students and teachers will write and design educational materials and teaching units on black bear and grizzly bear identification, techniques for safe hiking and camping in bear country, and techniques for viewing and photographing wildlife safely and responsibly. Students will also develop an educational unit about partnerships between corporations, communities, and wildlife management agencies in Montana's Seeley-Swan Grizzly Bear Corridor. In closing, Mr. President, I commend everyone involved in this remarkable effort: Chuck Bartlebaugh, Kris Backes of Plum Creek, and Principal Wedum, to name just a few. Congratulations and good work.

Mr. BAUCUS

Mr. BAUCUS. I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. BAUCUS. Mr. President, I yield 5 minutes of our time to the Senator from Washington.

Mr. BAUCUS. Mr. President, I yield 4 minutes to the Senator from Rhode Island.

Mr. BAUCUS. It is in the order.

Mr. BAUCUS. Mr. President, I thank the Senator from Virginia for those kinds remarks. Mr. President, I am very pleased today that finally the Senate is considering the conference report on the National Highway System Designation Act of 1995. This has been long in coming and, I might say, a bit too long because the deadline for Congress to pass this legislation was October 1, some 6 weeks ago. Since that date over $6.5 billion in Federal highway funds have been withheld, that is, they have been withheld from the States, very simply because of our failure, congressional failure, over the past 6 weeks to get this bill passed. It has been around for a couple years. This has meant delayed contracts. It has meant postponing jobs. Passing this bill today, however, means the States will soon be receiving those funds. That is good news for the States, good news for the thousands of construction workers and others who will benefit from new jobs. The delay has been the result of some major differences between the House- and the Senate-passed bills. It was not easy to reconcile them, but the leadership of the chairman of the Environment and Public Works Committee, Senator Chafee, and the chairman of the conference, Senator Warner, finally bridged the distance and brought the conference report to us here today. The report includes a number of important provisions. I will very briefly touch on some of them. But, first, let me put this bill in context. The National Highway System, or NHS, is a network of over 160,000 miles of the Nation's most critical roads. Although they account for only a small part of the total public road miles, these roads carry the bulk of our commerce. Most importantly, the NHS is really the key to a seamless network that uses all modes of transportation, linking roads to airports, seaports, and rail yards. It will expand economic opportunities in big cities and in small communities. And it will make our businesses more competitive in the global marketplace. The National Highway System is especially vital, I might say, to rural areas, areas where highways are the only method of transportation. Whether it is the transport of goods and services, traveling for family vacation, or business or taking the kids to college, highways play a vital role in our lives and our jobs, most particularly in rural areas. For Western States like Montana, we have few alternatives to roads. We do not have the mass transit and water transport systems that many other States depend on. And we will never have them. We are a large State with no big cities. To make matters worse, we have very limited air service. So designation of the National Highway System is vital. Montana has more miles of roads per capita than any other State, and over 3,800 miles of them are included in the NHS. This is about 800 miles more than proposed by the Bush administration. The additional routes include highway 200 between Great Falls and Missoula and Lewistown going west to Winnett, Jordan, Circle, Sidney, and Fairview; highway 12 from Helena to Garrison Junction; highway 59 from Miles City to Broadus, a very rural part of our State; highway 87 between Billings, Roundup, and Grassrange--you can imagine those are not metropolises--highway 212 from the Crow Agency to Lame Deer and Alzada, even more rural. These NHS roads link Montana farms and ranches to the Great Lakes and to the Pacific Ocean. These roads get our wheat to Russia and our beef to Japan. In short, they are our economic livelihood. What is the practical effect of NHS? Most importantly, by identifying these critical roads, States will be able to target their highway dollars to make sure the roads that get the most use are also the safest and most efficient. So the NHS really does set the stage for our transportation future, both in Montana and in the country. Mr. President, in addition to designating the National Highway System, the conference report also reduces a number of very burdensome regulations and repeals several highway fund sanctions. For example, the conference report repeals the national maximum speed limit. This means that the States can now decide for themselves what the appropriate speed limit should be on their roads without the threat of losing Federal highway funds. I support the repeal of the speed limit. I strongly believe that the State and local officials are just as deeply concerned about the safety of their citizens as those of us here who serve in Washington. State and local officials will take safety into consideration when deciding the appropriate speed limits. This provision simply recognizes reality, Mr. President; namely, that what may be the appropriate limit in Montana will probably not make sense in New York City. Let me also point out that the conference report gives Governors a say as to when the repeal goes into effect. Governors will have 10 days after the enactment of the conference report in which to decide whether they want the proposal to go into effect immediately or to be reviewed by the State legislature. If he or she chooses the latter course, the repeal of the speed limit would not take effect until the legislature takes action, otherwise, the repeal would become effective at the end of 10 days. Another major accomplishment of this bill is the reduction in burdensome paper requirements for the States. For example, States will no longer have to develop six separate management systems or exhaustive planning documents. These management systems have become a worthless paperwork exercise, particularly for rural States. Yet, failure to develop these systems mean a 10-percent sanction of highway funds. This conference report repeals these requirements and will relieve States of this unnecessary burden. Mr. President, it has taken the conference almost 2 months to reach this agreement. As I said earlier, this has left the States without highway trust funds for that amount of time. That has been unfortunate and I think unnecessary. However, the Senate will shortly begin the process to resume the flow of highway dollars to the States, and with quick action by the House and the President, States will soon see not only a restoration of highway funds, but the elimination of unnecessary regulations. So this is a good bill. It is a jobs bill. It is a reform bill. It will be good for Montana and for the country. I urge all my colleagues to support the conference report. Let me close by, again, thanking my good friends, Senator Warner and Senator Chafee, for their leadership. Without their skill and, I might say, determination, we would not be here today. Finally, let me add a few words of thanks to the Montana Department of Transportation and the Montana Highway Commission. The advice of people like highway commissioner Tom Forseth, transportation director Marvin Dye, Sandy Straehl, his assistant, and John DeVierno have all been invaluable, and I thank them very much. Most importantly, Mr. President, I thank the people of Montana for their very good advice and help in crafting this legislation. I also wish to thank the staff for the majority, Jean Lauver and Ann Loomis, for their hard work and dedication on this bill. And, of course, Kathy Ruffalo of my staff who has put in countless hours to bring this bill to where it is.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I was an early supporter of the taxpayer bill of rights which was enacted in 1988. That legislation protected the American taxpayer from overreaching actions by the IRS. This year, the Finance Committee included a number of additional provisions in the tax bill to protect the taxpayer. Unfortunately, the conference report for Treasury and Postal appropriations upon which we will vote today contains language taking us in the opposite direction. The report provides for an appropriation of $13 million to the IRS to ``initiate a program to utilized private counsel law firms and debt collection agencies in the collection activities of the IRS.'' Mr. President, most bill collectors are paid on a contingency basis. We are in danger of creating a system that will encourage bounty hunters to collect taxes from U.S. citizens. Margaret Milner Richardson, the Commissioner of the Internal Revenue Service, in a letter dated August 4, 1995, expressed ``grave reservations'' with respect to privatizing the tax collection services of the IRS. To quote Ms. Richardson: What impact would private debt collection have on the public's perception of the fairness of tax administration and of the security of the financial information provided to the IRS? A recent study conducted by Anderson Consulting revealed that 59 percent of Americans oppose State tax agencies contracting with private companies to administer and collect taxes. Frankly, Mr. President, I believe that the 59 percent number would have increased dramatically had the survey inquired as to whether the IRS should contract with debt collection agencies to collect Federal income taxes. We are told by supporters of the proposal that we should not worry because the debt collectors will be under the direct supervision of IRS employees. I do worry Mr. President, because we have too many instances in which IRS employees themselves have abused their powers. This is why we enacted the 1988 taxpayer bill of rights and why this year's reconciliation bill contains additional taxpayer rights. I am not comfortable that debt collectors working on a contingency basis will respect taxpayer rights--even if they are under the direct supervision of IRS employees. For this reason, Mr. President, I plan to vote against the conference report.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, last weekend, somebody in Great Falls, MT, spray painted satanic icons and racist slogans on the walls of the Mount Olive Christian Fellowship. The congregation of Mount Olive is mostly African-American, and they were the direct target of this perverted mind. But this attack really was on the whole community, and I am very proud to say that the whole community responded. I congratulate and thank all of the 200 citizens of Great Falls, MT, who came to the church on Monday to show their support for the Reverend Phillip Caldwell. Members of the congregation, city manager Lawton, our State Representative Deb Kottel, and many others turned out. I am proud of them, and like the vast majority of Montanans, I am with them in our State's fight against hate groups. On my next visit to Montana, I hope to attend services at Mount Olive. The desecration of Mount Olive is a sickening event and one which shows that as a State and a country, we still have a long way to go in our fight against hate. But its aftermath also shows us something else. Many Americans are concerned, and rightly so, about a decline of civic spirit, a growing indifference to our neighbors, and a general loss of moral values in our country. However, the rally this Monday showed us that our courage, our willingness to meet our responsibilities as citizens, and our basic decency are stronger than the pessimists admit. Thank you, Mr. President. I yield the floor.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise today to honor a man who has made a substantial investment in the future of my State of Montana. Gordon Eldredge is retiring as executive director of the Boys and Girls Club of Billings after 25 years. I believe it is important for people to know about someone like Gordon. Many children already do. They know and trust him as a man who understands them, their families, their problems, their hopes and dreams. He gives them a safe haven and a sense of belonging. We should all take heed of his example. Gordon will give credit for his success to his father, his family, his board and the families he serves before taking any for himself. His background is steeped in the Boys and Girls Club tradition, with his father and two brothers serving as executive directors for clubs and his own career encompassing 37 years. Gordon has established the club's reputation for being one of the best-equipped clubs in the Nation. The club, which has about 1,000 members, has built its soccer program into one of the premier youth sports activities in Billings. The inviting new building serves not only club members, but any child who cares to participate. This is all due to the vision and compassion of one man, the man I am so proud to recognize today. To quote from the play, ``The Fantasticks,'' ``a man who plants a garden is a very happy man.'' Gordon, enjoy your retirement. You have tended your garden well.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise to introduce legislation to give our timber industry emergency relief in the face of a surge of subsidized lumber imports from Canada. I have said before that when it comes to trade Canada does not play for the love of the game. Canada plays rough. Canada plays to win. Canada plays hardball. You see that in fisheries, wheat, beer, intellectual property, and maybe most of all in timber. And if the game is hardball, we have to put on our helmets, pick up our bats and show that we can play too. provisions of legislation That is what my bill will do. It contains three tough but fair measures: First, temporary duty: We impose a temporary 25-percent tariff on Canadian lumber. This figure is based on the best estimates of the value of Canadian subsidies to Canadian timber exporters. Second, countervailing duty investigation: We direct the Department of Commerce to investigate Canadian subsidization. At the end of the investigation, the temporary duty would be lifted. If Commerce finds subsidization and damage to U.S. industry, the International Trade Commission would impose a permanent countervailing duty at a level appropriate to the damage. If the investigation were to find no subsidy, Commerce would refund the money collected under the temporary duty. Likewise, if the damage were under 25 percent, the difference would be refunded to Canada. Third, renegotiate dispute settlement panels: We declare that no American judicial function or authority can be delegated to an international body under any trade agreement and give the President authority to renegotiate the so-called chapter 19 dispute settlement panels of the United States-Canada Free-Trade Agreement and NAFTA. The general effect of this would be to eliminate the jurisdiction of international dispute settlement panels over our countervailing duty decisions. In the specific case of timber, it would repeal the 1992, 1993, and 1994 decisions of the United States-Canada dispute panels which have barred us from using our countervailing laws against subsidized Canadian softwood lumber exports. Now, some will say, ``Max, gee, that is pretty tough.'' I agree. Sometimes tough measures are necessary. That is because today we face a surge of imported timber which has depressed prices, closed mills, and put Americans out of work. The first two sections of this legislation respond to this crisis in a reasonable, fair way. We have the right to emergency relief under our domestic laws, and all our trade agreements so provide. This is a case where we definitely need it. The third section responds to the longer term, but equally grave problem with the decisions dispute panels have made on United States- Canada timber disputes. Again, it does so in a tough but limited way. So, yes, this is tough but it is also fair. Now, let me explain the situation and my proposed response in more detail. We will begin with the facts and figures [[Page S 16664]] on the immediate crisis, the Canadian subsidies and the import surge they have created. Our bill deals with two forms of subsidies. The first is the extremely low stumpage fees the Canadian provinces charge for logging on their public land. Do not forget almost all the land in Canada on which timber is harvested is public land, called Crown land--the land owned by the provinces: very low stumpage; timber sale, very low, low prices. The other subsidy is Canada's ban on all export of raw logs, which lowers the price of logs in Canada's market and gluts Canadian mills. Some have a broader definition of subsidy. The Raincoast Conservation Society, a Canadian environment group based in Victoria, BC, says. * * * low stumpage rates, unsustainable rates of timber cutting, inadequate environmental controls, and the continued destruction of natural habitat constitute a massive network of public subsidies to the British Columbia timber industry. Canada's timber practices have created an environmental disaster. British Columbia, for example, requires neither sustainable forestry; we do. Nor environmental assessments of forest practices; we do. It has minimal riparian protection; we have a lot. Allows clearcuts up to four times what is legal in the United States and requires no protection of endangered species and habitat. Compare that with our Endangered Species Act. It gives the public virtually no role in forest management. Think of all the appeals and all the private rights of action we have in our country. If you take a boat up the coast of Washington State, you can literally see the border because Canadians have cut right down to the shore. Our bill defines subsidies much more narrowly. All by themselves, the artificially low-stumpage rates on the ban on raw log exports have caused a trade disaster as profound as the environmental disaster in British Columbia. Imports of Canadian lumber have risen 121 percent since 1991, from $2.56 billion to $5.65 billion last year. During this period, Canada's share of the American lumber market rose from 27 percent to 36 percent. Mr. President, 36 percent of all the softwood timber consumed in the United States is Canadian. Last year we imported more than 16 billion board feet of timber; 3 billion board miles of softwood timber. That is enough to build a wooden bridge to the Moon 12.5 feet wide. By comparison, we sold Canada about .3 of a billion board feet of lumber. That is a fiftieth of Canada's exports. Canada's subsidies vastly inflate our imports of timber. We estimate that they cost American timber companies about $829 million last year and cost American workers 25,100 jobs. This is an emergency. Every mill worker and mill operator in Montana can tell you the pressure from these subsidies is intolerable and the situation is getting worse all the time. That is the reason for part 1 of the bill, the temporary duty, and also for part 2, under which the Commerce Department will investigate Canadian timber practices and arrive at a long-term countervailing duty. Now, let us turn to part 3. That is renegotiation of the application of the dispute settlement panels established in chapter 19 of the United States-Canada Free-Trade Agreement to our domestic countervailing duty or CVD decisions. To start, we need to review a bit of history. During the drafting of the United States-Canada Free-Trade Agreement in the 1980's, a Canadian negotiator told the American side: You must understand that the Canadian people are committed to helping their industries that cannot compete. Our Constitution requires that funds be transferred to assist companies in noncompetitive locations to compete in international trade. That is to say, in areas where free trade means a competitive United States industry will do well, Canada will subsidize its own industry to do its best to make sure that we cannot do well. This sort of practice is, for obvious reasons, the most controversial issue we considered when the Reagan administration negotiated the United States-Canada Free-Trade Agreement in the 1980's. The Canadians, as was their right, refused to change their subsidy policies, but they also asked us to guarantee that we, Americans, would not use our countervailing duties laws against their subsidies. Obviously, that was unacceptable. A free trade agreement which let Canada subsidize exports, while we gave up our right to combat the subsidies of domestic trade laws, would not be a free trade agreement at all. It would have been an agreement to give Canada a captive market, and we would have opposed it. So we essentially agreed to disagree. Canada did not give up its subsidies and neither did we give up our trade laws. We agreed that the United States would continue to settle subsidy disputes through our domestic CVD laws. That is, dispute settlement panels setting up in the agreement's so-called chapter 19 would be available to Canada in these cases only to make sure that we had properly used our laws. That was the only point of that provision. That was fine in theory. Unfortunately, at least in the timber case, it has not worked very well in practice. The past 10 years of this dispute have gone as follows. On December 30, 1986, Canada and the United States signed, agreed to a joint memorandum of understanding on softwood lumber, under which Canada agreed to charge its timber companies a 15-percent export tax to make up for the value subsidies. Canada agreed. In September 1991, 5 years later, Canada unilaterally abrogated this memorandum of understanding--just walked away from it, threw it in the trash bin. On October 1991, a month later, the Commerce Department opened up, as we obviously should have done, an investigation of the Canadian lumber subsidies. In June 1992, this legislation ended with a finding that the subsidies damage the American industry. The ITC imposed countervailing duties, as is our right and is what we really should have done and did do. Canada then challenged this finding at the dispute panels set up under chapter 19 of the United States-Canada Free-Trade Agreement. Later in 1992, and in appeal decisions in 1993 and 1994, the panels split along national lines and upheld Canada's cases. In each one, Canada had a majority of judges. There were more Canadian judges than American judges. At least two of the judges had serious conflicts of interest and one had even worked for the Canadian timber industry. In each case they all voted as a bloc to deny justice to the U.S. industry. The last of these cases, our appeal to the Extraordinary Challenge Committee, which decided in the spring of 1994. Judge Malcolm Wilkey was the only American panelist and he describes the decision this way: The Panel started, of course, by giving us the litany of the standard of review of administrative agency action as enunciated in United States law, all thoroughly familiar. The Panel then preceded to violate almost every one of those canons of review of agency action * * *. This Binational Panel Majority opinion may violate more principles of appellate review of agency action than any opinion by a reviewing body I have ever read. That is the opinion of the American panelists--the only American panelists; the rest are Canadian. As Wilkey says, ``The panel reached egregiously wrong results.'' Those are his words. It was allowed to review only whether we applied our CVD laws as the United States Code requires. That is what we were supposed to do. Instead, the panel declared our laws should not apply at all. That is what the panel said, totally above and beyond its jurisdiction. The panel had no right to make that decision, but it made it. Under the United States-Canada Free-Trade Agreement, the panel has no right to make such decision, yet the Canadian majority went ahead and did it anyway. Worst of all, have been the concrete real results of these decisions. Since 1993, imports of Canadian timber have skyrocketed. The price of lumber has fallen by more than a third. Mills have closed in Superior, Libby, Bonner, and elsewhere in Montana, putting hundreds of good folks out of work. The same thing has happened all over America. Our timber workers have been cheated, cheated by the dispute panels. There is no other word for it. We need to make sure nobody else suffers the same injustice. [[Page S 16665]] Since Canada refuses to a fair settlement through negotiation, I see no alternative other than to remove the cause of the trouble. Now, these are tough measures, but if your partner is playing hard ball, you need more than a golfing cap and a whiffle bat, you need a hard plastic helmet and Louisville slugger. You need tough measures like the ones my bill will provide. I say let us stand up, restore fairness in the timber market, let us give a hand to some workers who have suffered grave injustice. I ask support for my bill, which I think, once enacted, we can restore the playing field so it is fair and give people in our country the justice they deserve.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise to introduce legislation to give our timber industry emergency relief in the face of a surge of subsidized lumber imports from Canada. I have said before that when it comes to trade Canada does not play for the love of the game. Canada plays rough. Canada plays to win. Canada plays hardball. You see that in fisheries, wheat, beer, intellectual property, and maybe most of all in timber. And if the game is hardball, we have to put on our helmets, pick up our bats and show that we can play too. provisions of legislation That is what my bill will do. It contains three tough but fair measures: First, temporary duty: We impose a temporary 25-percent tariff on Canadian lumber. This figure is based on the best estimates of the value of Canadian subsidies to Canadian timber exporters. Second, countervailing duty investigation: We direct the Department of Commerce to investigate Canadian subsidization. At the end of the investigation, the temporary duty would be lifted. If Commerce finds subsidization and damage to U.S. industry, the International Trade Commission would impose a permanent countervailing duty at a level appropriate to the damage. If the investigation were to find no subsidy, Commerce would refund the money collected under the temporary duty. Likewise, if the damage were under 25 percent, the difference would be refunded to Canada. Third, renegotiate dispute settlement panels: We declare that no American judicial function or authority can be delegated to an international body under any trade agreement and give the President authority to renegotiate the so-called chapter 19 dispute settlement panels of the United States-Canada Free-Trade Agreement and NAFTA. The general effect of this would be to eliminate the jurisdiction of international dispute settlement panels over our countervailing duty decisions. In the specific case of timber, it would repeal the 1992, 1993, and 1994 decisions of the United States-Canada dispute panels which have barred us from using our countervailing laws against subsidized Canadian softwood lumber exports. Now, some will say, ``Max, gee, that is pretty tough.'' I agree. Sometimes tough measures are necessary. That is because today we face a surge of imported timber which has depressed prices, closed mills, and put Americans out of work. The first two sections of this legislation respond to this crisis in a reasonable, fair way. We have the right to emergency relief under our domestic laws, and all our trade agreements so provide. This is a case where we definitely need it. The third section responds to the longer term, but equally grave problem with the decisions dispute panels have made on United States- Canada timber disputes. Again, it does so in a tough but limited way. So, yes, this is tough but it is also fair. Now, let me explain the situation and my proposed response in more detail. We will begin with the facts and figures [[Page S 16664]] on the immediate crisis, the Canadian subsidies and the import surge they have created. Our bill deals with two forms of subsidies. The first is the extremely low stumpage fees the Canadian provinces charge for logging on their public land. Do not forget almost all the land in Canada on which timber is harvested is public land, called Crown land--the land owned by the provinces: very low stumpage; timber sale, very low, low prices. The other subsidy is Canada's ban on all export of raw logs, which lowers the price of logs in Canada's market and gluts Canadian mills. Some have a broader definition of subsidy. The Raincoast Conservation Society, a Canadian environment group based in Victoria, BC, says. * * * low stumpage rates, unsustainable rates of timber cutting, inadequate environmental controls, and the continued destruction of natural habitat constitute a massive network of public subsidies to the British Columbia timber industry. Canada's timber practices have created an environmental disaster. British Columbia, for example, requires neither sustainable forestry; we do. Nor environmental assessments of forest practices; we do. It has minimal riparian protection; we have a lot. Allows clearcuts up to four times what is legal in the United States and requires no protection of endangered species and habitat. Compare that with our Endangered Species Act. It gives the public virtually no role in forest management. Think of all the appeals and all the private rights of action we have in our country. If you take a boat up the coast of Washington State, you can literally see the border because Canadians have cut right down to the shore. Our bill defines subsidies much more narrowly. All by themselves, the artificially low-stumpage rates on the ban on raw log exports have caused a trade disaster as profound as the environmental disaster in British Columbia. Imports of Canadian lumber have risen 121 percent since 1991, from $2.56 billion to $5.65 billion last year. During this period, Canada's share of the American lumber market rose from 27 percent to 36 percent. Mr. President, 36 percent of all the softwood timber consumed in the United States is Canadian. Last year we imported more than 16 billion board feet of timber; 3 billion board miles of softwood timber. That is enough to build a wooden bridge to the Moon 12.5 feet wide. By comparison, we sold Canada about .3 of a billion board feet of lumber. That is a fiftieth of Canada's exports. Canada's subsidies vastly inflate our imports of timber. We estimate that they cost American timber companies about $829 million last year and cost American workers 25,100 jobs. This is an emergency. Every mill worker and mill operator in Montana can tell you the pressure from these subsidies is intolerable and the situation is getting worse all the time. That is the reason for part 1 of the bill, the temporary duty, and also for part 2, under which the Commerce Department will investigate Canadian timber practices and arrive at a long-term countervailing duty. Now, let us turn to part 3. That is renegotiation of the application of the dispute settlement panels established in chapter 19 of the United States-Canada Free-Trade Agreement to our domestic countervailing duty or CVD decisions. To start, we need to review a bit of history. During the drafting of the United States-Canada Free-Trade Agreement in the 1980's, a Canadian negotiator told the American side: You must understand that the Canadian people are committed to helping their industries that cannot compete. Our Constitution requires that funds be transferred to assist companies in noncompetitive locations to compete in international trade. That is to say, in areas where free trade means a competitive United States industry will do well, Canada will subsidize its own industry to do its best to make sure that we cannot do well. This sort of practice is, for obvious reasons, the most controversial issue we considered when the Reagan administration negotiated the United States-Canada Free-Trade Agreement in the 1980's. The Canadians, as was their right, refused to change their subsidy policies, but they also asked us to guarantee that we, Americans, would not use our countervailing duties laws against their subsidies. Obviously, that was unacceptable. A free trade agreement which let Canada subsidize exports, while we gave up our right to combat the subsidies of domestic trade laws, would not be a free trade agreement at all. It would have been an agreement to give Canada a captive market, and we would have opposed it. So we essentially agreed to disagree. Canada did not give up its subsidies and neither did we give up our trade laws. We agreed that the United States would continue to settle subsidy disputes through our domestic CVD laws. That is, dispute settlement panels setting up in the agreement's so-called chapter 19 would be available to Canada in these cases only to make sure that we had properly used our laws. That was the only point of that provision. That was fine in theory. Unfortunately, at least in the timber case, it has not worked very well in practice. The past 10 years of this dispute have gone as follows. On December 30, 1986, Canada and the United States signed, agreed to a joint memorandum of understanding on softwood lumber, under which Canada agreed to charge its timber companies a 15-percent export tax to make up for the value subsidies. Canada agreed. In September 1991, 5 years later, Canada unilaterally abrogated this memorandum of understanding--just walked away from it, threw it in the trash bin. On October 1991, a month later, the Commerce Department opened up, as we obviously should have done, an investigation of the Canadian lumber subsidies. In June 1992, this legislation ended with a finding that the subsidies damage the American industry. The ITC imposed countervailing duties, as is our right and is what we really should have done and did do. Canada then challenged this finding at the dispute panels set up under chapter 19 of the United States-Canada Free-Trade Agreement. Later in 1992, and in appeal decisions in 1993 and 1994, the panels split along national lines and upheld Canada's cases. In each one, Canada had a majority of judges. There were more Canadian judges than American judges. At least two of the judges had serious conflicts of interest and one had even worked for the Canadian timber industry. In each case they all voted as a bloc to deny justice to the U.S. industry. The last of these cases, our appeal to the Extraordinary Challenge Committee, which decided in the spring of 1994. Judge Malcolm Wilkey was the only American panelist and he describes the decision this way: The Panel started, of course, by giving us the litany of the standard of review of administrative agency action as enunciated in United States law, all thoroughly familiar. The Panel then preceded to violate almost every one of those canons of review of agency action * * *. This Binational Panel Majority opinion may violate more principles of appellate review of agency action than any opinion by a reviewing body I have ever read. That is the opinion of the American panelists--the only American panelists; the rest are Canadian. As Wilkey says, ``The panel reached egregiously wrong results.'' Those are his words. It was allowed to review only whether we applied our CVD laws as the United States Code requires. That is what we were supposed to do. Instead, the panel declared our laws should not apply at all. That is what the panel said, totally above and beyond its jurisdiction. The panel had no right to make that decision, but it made it. Under the United States-Canada Free-Trade Agreement, the panel has no right to make such decision, yet the Canadian majority went ahead and did it anyway. Worst of all, have been the concrete real results of these decisions. Since 1993, imports of Canadian timber have skyrocketed. The price of lumber has fallen by more than a third. Mills have closed in Superior, Libby, Bonner, and elsewhere in Montana, putting hundreds of good folks out of work. The same thing has happened all over America. Our timber workers have been cheated, cheated by the dispute panels. There is no other word for it. We need to make sure nobody else suffers the same injustice. [[Page S 16665]] Since Canada refuses to a fair settlement through negotiation, I see no alternative other than to remove the cause of the trouble. Now, these are tough measures, but if your partner is playing hard ball, you need more than a golfing cap and a whiffle bat, you need a hard plastic helmet and Louisville slugger. You need tough measures like the ones my bill will provide. I say let us stand up, restore fairness in the timber market, let us give a hand to some workers who have suffered grave injustice. I ask support for my bill, which I think, once enacted, we can restore the playing field so it is fair and give people in our country the justice they deserve.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I thank my friend. The Senator from Oregon understands the important rule that reliable air service plays in States like Montana and I appreciate his efforts to preserve this program. At a time when life in rural America is becoming increasingly difficult, reliable air service is a vital link in our transportation network. The essential air service program is just that--it is essential and its integrity should be maintained. I thank my friend again.

Mr. BAUCUS. Mr. President, the conference report we are considering today makes dramatic cuts in the essential air service program. In fact, the program will see an almost 30 percent cut in funding this year--from over $30 million last year to $22.6 million this year. The statutory language of the conference report maintains the eligibility of EAS communities nationwide--the same number of communities that are eligible today will remain eligible next year. Therefore, we have a situation where the same number of communities are eligible for EAS funding, yet far fewer dollars are available for the program. Mr. President, while I remain very concerned with the funding reduction for the EAS program, I am more concerned with language included in the statement of manager's report. Language included in the statement of manager's report makes it clear that all communities eligible for EAS funding in fiscal year 1995 remain eligible in fiscal year 1996. However, the language continues on to say that the Department ``may be required to make prorata reductions in the subsidy or daily/weekly service levels'' in order to meet the reduced funding level. In other words, the only discretion the Department has in meeting these funding reductions is an across-the- board reduction in the level of air service of EAS communities. This language ties the hands of the Department of Transportation. The statement of managers language is being interpreted to be the only solution available in meeting the reduction in funding. Mr. President, the purpose of the essential air service program is to provide air service to rural, isolated communities. In my home State of Montana, our seven EAS communities are isolated. They are over 600 miles from a medium or large hub airport. A reduction in air service to these communities would be a real economic blow and would further isolate these folks. I would ask my friend, the chairman of the Appropriations Committee, if the intent of the conferees was to give the Secretary the discretion to determine the type of program that should exist with $22.6 million in funding--and the intent was not to place one option above another? There may be other ways to reach this funding level without an across- the-board reduction in the level of service and the Secretary should have the ability to make decisions that would maintain the integrity of the EAS program in the future.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I voted for the resolution offered by the senior Senator from Pennsylvania which expresses the sense of the Senate that this body should enact a flat tax. Our current Tax Code is complicated and almost incomprehensible to many of our citizens who must comply with its provisions. [[Page S 16056]] It is high time that we simplify the Tax Code. Simplification should and must be on the front burner. We need to consider a flat tax in our search for simplification. But, whatever we do, we must not abandon fundamental fairness and progressivity. A number of questions remain to be answered with respect to the flat tax. What will be the impact of disallowing the mortgage interest deduction or the charitable deduction? If companies can no longer deduct their contributions to employee pension plans or health care plans--will they continue to make those contributions? There are a lot of questions that need to be answered about a flat tax. But it does have one thing going for it. It has to be simpler than our current code. As we develop an alternative to the current tax structure, we want to keep an eye on simplicity and fairness. We need an alternative to our current Tax Code. This sense-of-the- Senate resolution starts us on our way to structuring a simplified tax system. enhanced enterprise zone

Mr. BAUCUS. Mr. President, research and development keeps us competitive with our foreign trading partners. It supports high wage and high skilled jobs in the United States and enables us to compete in developing products that increase our quality of life. We must support our American industry here at home or face losing our edge in research and development to our foreign trading partners. Other countries offer much more generous R&E tax incentives: for example, Canada has a 20- percent credit for all R&E expenditures; Japan and our European competitors all offer significant tax incentives to encourage research and development activity. A strong R&E tax credit not only maintains research and development activity here in the United States but it also contributes to the development of high-skilled jobs. It is my understanding that a substantial portion of the R&E credit is comprised of wages and salaries paid to our research employees. We need to continue this trend. In this age of global markets we need a research and development strategy that is competitive and strong. R&D grows our economy, it raises our living standards and develops a high skilled work force.

Mr. BAUCUS. Mr. President, I voted yes today on the Cohen-Pryor amendment to reinstate Federal nursing home standards. I did so in part because the so-called Finance Committee manager's amendment, which included a provision on nursing home standards, was not completed and available at the time of the vote on Cohen-Pryor. The language in the manager's amendment may be preferable over Cohen-Pryor. But, because the amendment was not available for review, I was not able to compare the language of Cohen-Pryor with the manager's amendment to see which is the better version for seniors and nursing homes in Montana. My vote on Cohen-Pryor in no way means that I favor the Cohen-Pryor amendment over the nursing home provisions in the manager's amendment, which the Senate hopefully will be able to review later today.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, this amendment strikes the provision of the reconciliation bill that would open the Arctic National Wildlife Refuge up for oil drilling. As an offset, it strikes the provision of the bill that authorizes the sale of the Naval Petroleum Reserve. So it preserves the balanced budget in 2002. Let me explain why Members should support the amendment. We've heard a lot of talk, during the budget debate, about the future. About how we should sacrifice today so that our children and grandchildren can benefit tomorrow. That's well and good. But opening the Arctic National Wildlife Refuge to oil drilling goes in exactly the opposite direction. It puts profits ahead of prudence. As a result, it risks causing serious harm to one of our national treasures, squandering the natural resources that we leave to future generations. And there's another thing. Opening the refuge to oil drilling is yet another example of public lands policies that favor special interests over the interests of ordinary American families. It opens the Refuge up to drilling. At whose expense? The people who want to hunt, fish, and otherwise enjoy the natural beauty there. Proponents of oil drilling argue that it will enhance our energy security. They argue that it will reduce the Nation's budget deficit. And they argue that it won't really pose significant risks to the refuge or its wildlife resources. I disagree. Let me take the arguments in turn. First, energy security. According to a 1995 assessment by the U.S. Geological Survey, oil and gas reserves under the refuge may be only about half as large as previously thought. Furthermore, economic analyses show that a lot of the oil won't even be used here in the United States. Instead, if the bills lifting the ban on oil exports passed by the House and Senate are enacted into law, the oil will be shipped overseas. As a result, oil drilling in the Arctic Wildlife Refuge has little, if anything, to do with energy security. Second, the budget deficit. The Office of Management and Budget has concluded that oil and gas development in the refuge would produce significantly less revenue than predicted by CBO. OMB looked at updated estimates of the amount of recoverable oil reserves. It looked at projected oil prices. And OMB concluded that drilling likely would generate only $850 million, 35 percent less revenue than predicted by CBO. And that assumes that taxpayers get the revenue. But if the State of Alaska successfully asserts a claim that it is entitled to 90 percent of all revenues, Federal revenues will decline to about $170 million. Third, the environmental impact. The Arctic National Wildlife Refuge is unique. It's been referred to, for good reason, as ``America's Serengeti.'' More than 150,000 caribou migrate through the refuge, bearing their young on the coastal plain. The caribou are an important source of food for the native people who live near the refuge and depend on the land to sustain their way of life. In addition, the refuge supports a spectacular array of other wildlife, including polar bears, grizzly bears, wolves, and snow geese. OMB has stated that ``exploration and development activities would bring physical disturbances to the area, unacceptable risks of oil spills and pollution, and long-term effects that would harm wildlife for decades.'' Recent opinion polls demonstrate that the American people--by a margin of more than 2 to 1--oppose opening up the refuge to oil and gas development. I urge members to vote for prudence and for open access to public lands. I urge them to vote for this amendment. [[Page S 15993]]