Kent Conrad

Mr. CONRAD

Mr. CONRAD. Mr. President, I wish to join my colleagues in expressing support for passage of Permanent Normal Trade Relations with China. This is the right thing to do for the country, and it is the right thing to do for my state of North Dakota. I think it is important at the outset to make it clear what this vote is about--and what it is not about. This vote is about making sure that U.S. farmers, businesses, and workers receive the benefits of China's accession to the World Trade Organization. The agreement on China's accession is a clear win for the United States. China has made concession after concession, lowering tariffs and removing other barriers to U.S. exports. The U.S. has made no such concessions. But if we fail to pass Permanent Normal Trade Relations, PNTR, we will not be able to take full advantage of these opportunities but will instead cede them to our competitors. There has been a lot of misleading talk and innuendo about what PNTR really means. PNTR is not a special privilege, and it does not signify our approval of China's domestic or foreign policies. In fact, we continue to have many differences with China that we can and should work vigorously to resolve. PNTR would simply grant China the same trading status that the United States has with more than 130 other countries around the world: nothing more, nothing less. And it would grant China the same status going forward that it has had continuously for the last twenty years. The only change is that the Congress no longer would hold an annual vote on China's trade status, a vote that has never denied China Normal Trade Relations but that has set back our efforts to engage China on human rights and other issues. The PNTR debate is primarily about trade, so let me start by talking about the trade benefits for our country. As my colleagues know, this vote is not about whether China should be part of the WTO. There is no question that China will join the WTO. The only question is whether the United States will reap the benefits of the many concessions China has made, or whether our farmers, businesses and workers will be left out. That would be a profound mistake. China has the world's largest population: 1.3 billion potential customers for American products. For years, our market has been open to Chinese imports, but China's market has largely been closed to our products. This agreement will open China's market to our exports. And this is a market that has terrific growth potential. China's economy is the fastest growing in the world, and China's expanding middle class will demand more and more imports of American consumer goods. The agreement reached last November allows us unprecedented access to this huge and growing market. On manufactured goods, tariffs will fall from a current average of nearly 25 percent to less than ten percent. On services, China has agreed to phase out a broad array of laws regulations and policies that have blocked U.S. firms from competing in this growing market. But I am especially pleased at the prospects for increased agricultural exports. Around the world, average tariffs on U.S. agricultural exports are more than 40 percent. China is slashing its tariffs to far below this average: 17.5 percent. And on U.S. priority products--the products that we produce for export--the average Chinese tariff will fall to just 14 percent. For bulk commodities the agreement establishes generous tariff rate quotas. For example, on wheat, a major export product for North Dakota, China will allow imports of 7.3 million metric tons initially (growing to 9.6 million tons by 2004) subject to a tariff of just 1 percent. In addition, China has agreed to changes in its administration of tariff rate quotas that will prevent state trading monopolies from blocking imports if there is private sector demand for wheat. For my State of North Dakota, the agreement provides new export opportunities for wheat, for oilseeds, including canola, and for beef and pork products. The U.S. Department of Agriculture has estimated that this agreement could add $1.6 billion annually to U.S. exports of grains, oilseeds and cotton in just five years. Additional growth opportunities for North Dakota agricultural exports will come as China reduces its tariffs on beef (from 45 percent today to 12 percent by 2004) and pork (from 20 percent to 12 percent). Finally, the China agreement provides additional leverage for U.S. goals in the ongoing WTO negotiations on agriculture. China has agreed to eliminate export subsidies, to cap and reduce domestic subsidies, and to provide the right to import and distribute products without going through state trading enterprises. There can be no question that this agreement will create expanded export opportunities for American workers, farmers and businesses. But the key word here is ``opportunities.'' This agreement creates wonderful opportunities for North Dakota agriculture, but it is not a silver bullet. This agreement will not solve all of our trade problems with China. Nor will the results come overnight. We will need to work aggressively year after year to take advantage of these opportunities and turn them into results. And we will need to closely monitor China's implementation of its commitments. In that vein, I am very pleased that the legislation we are considering includes provisions I strongly supported to ensure that the Federal government monitors and enforces China's WTO accession agreement. And I am hopeful that the WTO's multilateral dispute resolution system will be more successful than our past unilateral efforts to hold China to its commitments. The simple fact is that the current system has not worked well. There has been no neutral arbitrator to resolve disputes. As a result, U.S. firms have been very reluctant for the U.S. to take action against China because of Chinese threats to retaliate against American business. With China in the WTO, we will have the advantage of a neutral dispute resolution system and rules to guard against Chinese retaliation. In my view, the trade benefits alone are enough to conclude that we should support PNTR for China. But this debate is about more than just trade. It is about human rights and national security as well. I believe bringing China into the WTO and passing PNTR is the best way to improve human rights in China. Clearly, our current annual debate over Normal Trade Relations has had little effect on human rights in China. Bringing China into the WTO, though, will increase the openness of Chinese society. It will increase the presence of American and other Western firms in China. It will open China to the InterNet and other advanced telecommunications technologies that, over time, will expose average Chinese to our thoughts, values, and ideals on human rights, workers' rights and democracy. This is not just my view. It is a view shared by numerous prominent Chinese dissidents and religious and democratic leaders. They believe that rejecting PNTR will only strengthen the iron hand of the hard- liners in the Chinese leadership. For example, Bao Tong, a prominent dissident, was quoted in the Washington Post saying that attempts to use trade sanctions on human rights simply do not work: ``I appreciate the efforts of friends and colleagues to help our human rights situation, but it doesn't make sense to use trade as a lever. It just doesn't work,'' Mr. Bao said. Similarly, Dai Qing, a leading Chinese environmentalist, argues that passing PNTR ``would put enormous pressure on both the government and the general public to meet the international standard not only on trade, but on other issues including human rights and environmental protection.'' Finally, the Dalai Lama has said that ``joining the World Trade Organization, I think, is one way to change in the right direction. . . . In the long run, certainly it will be positive for Tibet. Forces of democracy in China get more encouragement through that way.'' Finally, I believe that passing PNTR will promote our national security interests. History teaches us that conflicts among trading partners are less likely than conflicts between countries that do not have strong economic ties. In contrast, rejecting PNTR could send a strong signal to China that the U.S. wants to isolate China. A hostile China is not in our national interest. A China integrated into the international system, obeying international rules and norms, is. In conclusion, Mr. President, the arguments in favor of PNTR for China are very strong. Passing PNTR advances America's interests in Asia and the world. It is good for our national economy, and it is particularly good for my state's agricultural economy. I hope my colleagues will join me in sending a strong bipartisan message of support for China's accession to the WTO.

Mr. CONRAD

Mr. CONRAD. Mr. President, today I am pleased to be joined by Senator Frist and Representatives Camp and Thurman in introducing the Medicare Renal Dialysis Payment Fairness Act of 2000. This legislation takes important steps to help sustain and improve the quality of care for Medicare beneficiaries suffering from kidney failure. Nationwide, more than 280,000 Americans live with end-stage renal disease (ESRD). In my State of North Dakota, the number of patients living with ESRD is relatively small, just over 600. However, for these patients and others across the country, access to dialysis treatments means the difference between life and death. In 1972, the Congress took important steps to ensure that elderly and disabled individuals with kidney failure receive appropriate dialysis care. At that time, Medicare coverage was extended to include dialysis treatments for beneficiaries with ESRD. Over the last three decades, dialysis facilities have provided services to increasing numbers of kidney failure patients under increasingly strict quality standards; however, during this same time frame reimbursement for kidney services has not kept pace with the increasing demands of providing dialysis care. Last year, Senator Frist and I introduced legislation to ensure dialysis facilities could continue providing quality dialysis services to Medicare beneficiaries. I am happy to say that, based on these efforts, dialysis providers received increased Medicare reimbursement in fiscal years 2000 and 2001 as part of the Medicare, Medicaid, and S- CHIP Refinement Act of 1999. While these efforts were a step in the right direction, a recent Medicare Payment Advisory Commission (MedPAC) report suggests that we must take further action to sustain patients' access to dialysis services. In particular, MedPAC recommends a 1.2 percent payment adjustment for Medicare-covered dialysis services in the next fiscal year. In addition, MedPAC recommends that the Health Care Financing Administration provide an annual review of the dialysis payment rate--a review that most other Medicare-covered services receive each year. I believe these recommendations represent critical adjustments that must be addressed this year. For this reason, I have worked with Senator Frist, Representative Camp and Representative Thurman to develop the Medicare Renal Dialysis Payment Fairness Act of 2000. This legislation would provide the payment rate improvements recommended by MedPAC and would establish an annual payment review process for dialysis services. This proposal would help ensure all dialysis providers receive reimbursement that is in line with increasing patient load and quality requirements. This is particularly important for our Nation's smaller, rural dialysis providers that on average receive Medicare payments to do not adequately reflect costs. As the Congress considers further improvements to the Medicare Program, I urge my colleagues to support this important effort to ensure patients with kidney failure continue to have access to quality dialysis services. I thank my colleagues for working together on this bipartisan and bicameral proposal.

Mr. CONRAD

Mr. CONRAD. Mr. President, today I am pleased to be joined by Senator Frist and Representatives Camp and Thurman in introducing the Medicare Renal Dialysis Payment Fairness Act of 2000. This legislation takes important steps to help sustain and improve the quality of care for Medicare beneficiaries suffering from kidney failure. Nationwide, more than 280,000 Americans live with end-stage renal disease (ESRD). In my State of North Dakota, the number of patients living with ESRD is relatively small, just over 600. However, for these patients and others across the country, access to dialysis treatments means the difference between life and death. In 1972, the Congress took important steps to ensure that elderly and disabled individuals with kidney failure receive appropriate dialysis care. At that time, Medicare coverage was extended to include dialysis treatments for beneficiaries with ESRD. Over the last three decades, dialysis facilities have provided services to increasing numbers of kidney failure patients under increasingly strict quality standards; however, during this same time frame reimbursement for kidney services has not kept pace with the increasing demands of providing dialysis care. Last year, Senator Frist and I introduced legislation to ensure dialysis facilities could continue providing quality dialysis services to Medicare beneficiaries. I am happy to say that, based on these efforts, dialysis providers received increased Medicare reimbursement in fiscal years 2000 and 2001 as part of the Medicare, Medicaid, and S- CHIP Refinement Act of 1999. While these efforts were a step in the right direction, a recent Medicare Payment Advisory Commission (MedPAC) report suggests that we must take further action to sustain patients' access to dialysis services. In particular, MedPAC recommends a 1.2 percent payment adjustment for Medicare-covered dialysis services in the next fiscal year. In addition, MedPAC recommends that the Health Care Financing Administration provide an annual review of the dialysis payment rate--a review that most other Medicare-covered services receive each year. I believe these recommendations represent critical adjustments that must be addressed this year. For this reason, I have worked with Senator Frist, Representative Camp and Representative Thurman to develop the Medicare Renal Dialysis Payment Fairness Act of 2000. This legislation would provide the payment rate improvements recommended by MedPAC and would establish an annual payment review process for dialysis services. This proposal would help ensure all dialysis providers receive reimbursement that is in line with increasing patient load and quality requirements. This is particularly important for our Nation's smaller, rural dialysis providers that on average receive Medicare payments to do not adequately reflect costs. As the Congress considers further improvements to the Medicare Program, I urge my colleagues to support this important effort to ensure patients with kidney failure continue to have access to quality dialysis services. I thank my colleagues for working together on this bipartisan and bicameral proposal.

Mr. CONRAD

Mr. CONRAD. Mr. President, today I am introducing the Long-Term Caregivers Assistance Act of 2000, a proposal that would provide much needed assistance to individuals with long-term care needs and their caregivers. Nationwide, more than 8 million individuals require some level of assistance with activities of daily living. Over the next 30 years, this number is expected to increase significantly as our nation experiences an unprecedented growth in its elderly population. We know that for many people leaving their homes to obtain care is not their first choice--the cost of nursing home care can be prohibitive, and such care often takes individuals away from their communities. While federal support for long-term care is primarily spent on nursing home services, many people receive assistance with their long-term care needs in the home from their families, often without the help of public assistance or private insurance. Nationwide, nearly 37 million individuals provide unpaid care to family members of all ages with functional or cognitive impairments. In my state, there are about 61,000 individuals providing informal caregiving services. Unfortunately, the need for long-term care can cause substantial financial burdens on many individuals and their families. According to a recent study, almost two-thirds of those serving as caregivers suffer financial setbacks--setbacks that can total thousands of dollars in lost wages and other benefits over a caregiver's lifetime. This is a burden that caregivers and their families should not have to bear alone. For this reason, I am introducing this proposal to provide a $2,000 tax credit that could be used by individuals with substantial care needs or by their caregivers. Taxpayers who have long-term care needs, or who care for others with such needs, may not have the same ability to pay taxes as other taxpayers--a reasonable and legitimate concern in a tax system based on the principle of ability-to-pay. Providing a tax credit is an equitable and efficient way of helping caregivers and individuals with long-term care needs meet their formal and informal costs. I recognize that this tax credit is only a piece of the long-term care puzzle--but I believe it is an important piece. This credit could be used to help pay for prescription drugs or other out-of-pocket expenses. It could be used to pay for some formal home care services. It could also be used to help family members offset some of the expenses they incur in caregiving. We must act now to address the long-term care needs of our nation. I urge my colleagues to support this important legislation.

Mr. CONRAD

Mr. CONRAD. Mr. President, today I am introducing the Long-Term Caregivers Assistance Act of 2000, a proposal that would provide much needed assistance to individuals with long-term care needs and their caregivers. Nationwide, more than 8 million individuals require some level of assistance with activities of daily living. Over the next 30 years, this number is expected to increase significantly as our nation experiences an unprecedented growth in its elderly population. We know that for many people leaving their homes to obtain care is not their first choice--the cost of nursing home care can be prohibitive, and such care often takes individuals away from their communities. While federal support for long-term care is primarily spent on nursing home services, many people receive assistance with their long-term care needs in the home from their families, often without the help of public assistance or private insurance. Nationwide, nearly 37 million individuals provide unpaid care to family members of all ages with functional or cognitive impairments. In my state, there are about 61,000 individuals providing informal caregiving services. Unfortunately, the need for long-term care can cause substantial financial burdens on many individuals and their families. According to a recent study, almost two-thirds of those serving as caregivers suffer financial setbacks--setbacks that can total thousands of dollars in lost wages and other benefits over a caregiver's lifetime. This is a burden that caregivers and their families should not have to bear alone. For this reason, I am introducing this proposal to provide a $2,000 tax credit that could be used by individuals with substantial care needs or by their caregivers. Taxpayers who have long-term care needs, or who care for others with such needs, may not have the same ability to pay taxes as other taxpayers--a reasonable and legitimate concern in a tax system based on the principle of ability-to-pay. Providing a tax credit is an equitable and efficient way of helping caregivers and individuals with long-term care needs meet their formal and informal costs. I recognize that this tax credit is only a piece of the long-term care puzzle--but I believe it is an important piece. This credit could be used to help pay for prescription drugs or other out-of-pocket expenses. It could be used to pay for some formal home care services. It could also be used to help family members offset some of the expenses they incur in caregiving. We must act now to address the long-term care needs of our nation. I urge my colleagues to support this important legislation.

Mr. CONRAD

Mr. CONRAD. Mr. President, today I am introducing legislation to help our farmers fight back against the unfair trade practices of state trading enterprises. As many of my colleagues know, state trading enterprises are government sanctioned monopolies that control commodity exports. Their unfair practices allow them to undercut prices of U.S. commodities, both in our market and in overseas markets where we compete for exports. My legislation, the Export Enhancement Program Trigger Act of 2000, would direct our government to fight back against these unfair practices. I am introducing this legislation in response to the experience of farmers in North Dakota, who have been forced to compete not just with foreign farmers, but with foreign state trading enterprises. Ever since the U.S.-Canada Free Trade Agreement (CFTA) took effect, North Dakota farmers have been flooded with a rising tide of imports of Canadian grains. These imports are coming into our country not because Canadian farmers are more competitive, but because of flaws in the CFTA and the unfair actions of the Canadian Wheat Board (CWB). As negotiated by then-USTR Clayton Yeutter, the CFTA allows the Canadian Wheat Board to sell into our market at less than the total cost of acquiring and selling its grain. The fact is that the Canadian Wheat Board is a government created and government supported monopoly. Because Canadian farmers are required to sell their grain to the Wheat Board, the Wheat Board gets its wheat at below market prices and can then tell its customers in this country or overseas that it will undercut U.S. prices. These practices amount to de facto subsidies, but because the Wheat Board operates in secret, these unfair practices are not subjected to the normal rules of international trade. This unfair competition caused imports of wheat from Canada to increase steadily until, in 1993-94, they reached a record 2.4 million tons of total wheat and 575,000 tons of durum. These levels of imports caused unacceptable damage to North Dakota farmers, so I convinced the Clinton Administration to impose limits on Canadian imports. Under the Memorandum of Understanding (MOU) negotiated with Canada, durum imports were limited to 300,000 tons and total wheat imports were limited to 1.5 million tons in 1994-95. These limits worked. Imports of Canadian grain fell dramatically for several years. Unfortunately, however, the authority to impose these limits disappeared as a result of the Uruguay Round Agreements. As a result, our friends to the north are once again on the move, attacking our markets, using the monopoly power of the Canadian Wheat Board to undercut prices for our farmers. Last year, imports from Canada again approached their 1993-94 peaks (2.2 million tons of total wheat and 560,000 tons of durum), and this year they are on track to stay far above the MOU level (2 million tons of total wheat and 480,000 tons of durum). This is unacceptable. It is far past time to send a clear and unmistakable message to our friends in Canada that the U.S. will not tolerate these practices any longer-- that we will fight back. The legislation I am introducing today will do exactly that. My legislation would require USDA to use the Export Enhancement Program-- EEP--in either of two circumstances. First, if imports of durum or wheat into the U.S. from Canada exceed the limits set in the MOU--300,000 tons for durum and 1,500,000 tons for total wheat imports--USDA would be required to use EEP to export wheat or durum into markets where we compete with Canada in a quantity equal to at least twice the total amount of Canadian imports into the U.S. for that year. This will clearly tell Canada that it will lose far more in its overseas markets than it gains in our markets if it persists in exporting more than the MOU levels. As a result, I expect that Canada will again voluntarily comply with the MOU limits as it did in 1995-96 and 1996-97. Even if Canada does not comply, though, this legislation will ensure that U.S. farmers do not bear the costs of Canadian imports. By requiring the U.S. to export twice as much wheat as we are importing from Canada, this legislation will ensure that total supply will be reduced and prices will strengthen. Second, if the Secretary of Agriculture determines that a state trading enterprise (STE) like the Canadian Wheat Board is using unfair trade practices to reduce our exports of any agricultural commodity to overseas markets, the Secretary is required to respond by using EEP in an amount sufficient to ensure that prices received by U.S. farmers are not reduced as a result of the STE's actions. Too often, we have heard from our industry and our USDA officials that Canada is arbitrarily undercutting U.S. prices in overseas markets. My proposal would require USDA to respond, to ensure that we do not give up our export markets without a fight. Taken together, these two provisions will support the efforts of our trade negotiators to discipline STES as part of the World Trade Organization (WTO) negotiations on agriculture. Disciplining STEs is a top priority for our negotiators, and this legislation, by defining the marketing practices of STEs as unfair trade practices, will increase our negotiators' leverage to develop meaningful rules on STEs. Moreover, I believe these provisions will support the efforts of North Dakota farmers, acting through the Wheat Commission, in bringing a trade case against Canada. I have always believed that, ultimately, Canadian agricultural trade issues will have to be resolved through negotiation. It is my hope that, in combination, this legislation and the trade case will provide short term relief for our farmers and help build sufficient pressure on Canada to negotiate a permanent resolution of Canadian grain issues. I have no doubt that our friends to the north will not like this legislation. They do not like having a spotlight focused on their system, so they will complain about our use of EEP. I have a simple answer for them: If they do not want us to use EEP against them, they should stop dumping their grain into our market and stop using unfair trade practices in overseas markets. I am pleased that this legislation has the support of every major farm group in North Dakota with an interest in these issues, including North Dakota Farmers Union, North Dakota Farm Bureau, North Dakota Wheat Commission, North Dakota Grain Growers, and the North Dakota Barley Council. I hope that my colleagues will join me in supporting this important legislation.

Mr. CONRAD

Mr. CONRAD. Mr. President, today I am introducing legislation to help our farmers fight back against the unfair trade practices of state trading enterprises. As many of my colleagues know, state trading enterprises are government sanctioned monopolies that control commodity exports. Their unfair practices allow them to undercut prices of U.S. commodities, both in our market and in overseas markets where we compete for exports. My legislation, the Export Enhancement Program Trigger Act of 2000, would direct our government to fight back against these unfair practices. I am introducing this legislation in response to the experience of farmers in North Dakota, who have been forced to compete not just with foreign farmers, but with foreign state trading enterprises. Ever since the U.S.-Canada Free Trade Agreement (CFTA) took effect, North Dakota farmers have been flooded with a rising tide of imports of Canadian grains. These imports are coming into our country not because Canadian farmers are more competitive, but because of flaws in the CFTA and the unfair actions of the Canadian Wheat Board (CWB). As negotiated by then-USTR Clayton Yeutter, the CFTA allows the Canadian Wheat Board to sell into our market at less than the total cost of acquiring and selling its grain. The fact is that the Canadian Wheat Board is a government created and government supported monopoly. Because Canadian farmers are required to sell their grain to the Wheat Board, the Wheat Board gets its wheat at below market prices and can then tell its customers in this country or overseas that it will undercut U.S. prices. These practices amount to de facto subsidies, but because the Wheat Board operates in secret, these unfair practices are not subjected to the normal rules of international trade. This unfair competition caused imports of wheat from Canada to increase steadily until, in 1993-94, they reached a record 2.4 million tons of total wheat and 575,000 tons of durum. These levels of imports caused unacceptable damage to North Dakota farmers, so I convinced the Clinton Administration to impose limits on Canadian imports. Under the Memorandum of Understanding (MOU) negotiated with Canada, durum imports were limited to 300,000 tons and total wheat imports were limited to 1.5 million tons in 1994-95. These limits worked. Imports of Canadian grain fell dramatically for several years. Unfortunately, however, the authority to impose these limits disappeared as a result of the Uruguay Round Agreements. As a result, our friends to the north are once again on the move, attacking our markets, using the monopoly power of the Canadian Wheat Board to undercut prices for our farmers. Last year, imports from Canada again approached their 1993-94 peaks (2.2 million tons of total wheat and 560,000 tons of durum), and this year they are on track to stay far above the MOU level (2 million tons of total wheat and 480,000 tons of durum). This is unacceptable. It is far past time to send a clear and unmistakable message to our friends in Canada that the U.S. will not tolerate these practices any longer-- that we will fight back. The legislation I am introducing today will do exactly that. My legislation would require USDA to use the Export Enhancement Program-- EEP--in either of two circumstances. First, if imports of durum or wheat into the U.S. from Canada exceed the limits set in the MOU--300,000 tons for durum and 1,500,000 tons for total wheat imports--USDA would be required to use EEP to export wheat or durum into markets where we compete with Canada in a quantity equal to at least twice the total amount of Canadian imports into the U.S. for that year. This will clearly tell Canada that it will lose far more in its overseas markets than it gains in our markets if it persists in exporting more than the MOU levels. As a result, I expect that Canada will again voluntarily comply with the MOU limits as it did in 1995-96 and 1996-97. Even if Canada does not comply, though, this legislation will ensure that U.S. farmers do not bear the costs of Canadian imports. By requiring the U.S. to export twice as much wheat as we are importing from Canada, this legislation will ensure that total supply will be reduced and prices will strengthen. Second, if the Secretary of Agriculture determines that a state trading enterprise (STE) like the Canadian Wheat Board is using unfair trade practices to reduce our exports of any agricultural commodity to overseas markets, the Secretary is required to respond by using EEP in an amount sufficient to ensure that prices received by U.S. farmers are not reduced as a result of the STE's actions. Too often, we have heard from our industry and our USDA officials that Canada is arbitrarily undercutting U.S. prices in overseas markets. My proposal would require USDA to respond, to ensure that we do not give up our export markets without a fight. Taken together, these two provisions will support the efforts of our trade negotiators to discipline STES as part of the World Trade Organization (WTO) negotiations on agriculture. Disciplining STEs is a top priority for our negotiators, and this legislation, by defining the marketing practices of STEs as unfair trade practices, will increase our negotiators' leverage to develop meaningful rules on STEs. Moreover, I believe these provisions will support the efforts of North Dakota farmers, acting through the Wheat Commission, in bringing a trade case against Canada. I have always believed that, ultimately, Canadian agricultural trade issues will have to be resolved through negotiation. It is my hope that, in combination, this legislation and the trade case will provide short term relief for our farmers and help build sufficient pressure on Canada to negotiate a permanent resolution of Canadian grain issues. I have no doubt that our friends to the north will not like this legislation. They do not like having a spotlight focused on their system, so they will complain about our use of EEP. I have a simple answer for them: If they do not want us to use EEP against them, they should stop dumping their grain into our market and stop using unfair trade practices in overseas markets. I am pleased that this legislation has the support of every major farm group in North Dakota with an interest in these issues, including North Dakota Farmers Union, North Dakota Farm Bureau, North Dakota Wheat Commission, North Dakota Grain Growers, and the North Dakota Barley Council. I hope that my colleagues will join me in supporting this important legislation.

Mr. CONRAD

Mr. CONRAD. I thank the Chair, and I thank very much my colleague from West Virginia. The reason we have had to have substantial emergency spending is because of the failure of the last farm bill. The last farm bill represents unilateral disarmament. While our major competitors, the Europeans, are spending $50 billion a year to support their producers, we, on average, were spending $10 billion under the previous farm bill. We cut it in half on the notion that the Europeans would follow our good example. What a foolish tactic. We would never do that in a military confrontation, engage in unilateral disarmament. But it is precisely what we did with respect to a trade confrontation. Agriculture has been in deep trouble and we have responded. Congress, the administration, and we thank our colleagues, for that response. But now we have been hit by unprecedented natural disasters.

Mr. CONRAD. Mr. President, I thank Senator Stevens as well. I thank Senator Cochran and others who helped craft this agreement--Senator Kohl. Because the fact is, there are real disasters and real emergencies. In my State where, on June 12, 20 inches of rain fell in 36 hours, 1 week later 8 inches of rain fell in 6 hours. It gave us this headline in the biggest paper in our State: ``Swamped.'' It says it all. A disaster of stunning proportions costing hundreds of millions of dollars in the major city of our State--1.7 million acres of land, of cropland, devastated. This is an emergency. It is a disaster. It must be addressed. Through this amendment we will begin the process of healing. I thank all those who participated in this agreement. I do want to answer the Senator from Texas when he says we have had $14 billion of emergencies in the last 2 years. The underlying reason is a failure----

Mr. CONRAD. Again, I thank the courtesy of the Chair. We have been hit by unprecedented natural disasters. This body has been generous in responding, whether it was in North Dakota or New Mexico. I just hope we do not ever lose that generosity of spirit in this country because none of us can predict who might be hit next. I thank the Chair and yield the floor.

Mr. CONRAD

Mr. CONRAD. Will the Senator withhold? I would like to have another chance to speak.

Mr. CONRAD. Mr. President, I rise, as well, in defense of this program. I rise in defense because I represent a State that is one of the most agricultural States in the Nation. The fact is, this program has helped stabilize an otherwise disastrous situation. This chart shows what has happened to sugar prices since the most recent farm bill. This is what has happened to refined beet sugar prices. On this chart it looks like a cliff because it is. Prices have collapsed. If we did not have something to counter the cycle, we would see mass bankruptcy in rural America. That is a fact. The Senator from Arizona comes out and he reads clippings from various news articles. Unfortunately, those people know virtually nothing about what they are writing about. They say, over and over, that the world price of sugar is 8 cents a pound. Absolute nonsense. The world price of sugar is not 8 cents a pound. The vast majority of sugar in the world moves under long-term contract at much higher prices than the 8 cents a pound. About 18 cents a pound--that is what most sugar in the world sells for. What the Senator from Arizona is talking about is what is reported in the popular press--repeatedly--which is flat wrong. The price they are talking about is not the world price; the price they are talking about is the world dump price for sugar. It is what sugar sells for that is not under contract that is hard to sell. That is a dump price. It is far below the cost of production. It does not represent what sugar sells for in the world. It is an absolute fiction. Every time we have ended the program, what has happened to prices? Let's ask that question. Because the suggestion from the Senator from Arizona is, if you would end this program--you phase it out--prices to consumers would go down. Let's have a reality check. What has happened in the times we have ended the program? Did prices go down or did prices go up? You know what happened? Prices skyrocketed. That is what happened when the program ended. The fact is, this is a program that stabilizes prices. And that is critical to the survival of thousands of family farmers. The Senator from Arizona talks about one large interest as though that represents the totality of producers. Let me say to the Senator from Arizona, and to those who write these articles that attack the program and talk about one small group with large economic resources, what they are not doing is telling the whole story and telling the American people that literally thousands and thousands of family farmers are dependent on the stabilization this program provides. That is a fact. Come to my State. Go farm to farm. Meet these families. They are not wealthy people. They are people trying to make it in an environment in which the prices of the products that they make have plunged. Without this program to stabilize prices, there would be financial ruination all across the heartland of America. Is that what the Senator from Arizona advocates? Is that what he wants to have happen? Because assuredly that would be the case. One of the things that gets missed in this debate is this notion that somehow the United States is an island unto itself and that we do not have to worry about what the rest of the world is doing. If one would pay a little attention to what the rest of the world is doing, what one would find is that the United States is giving support to its producers at a level much lower than our major competitors. This chart shows what our major competitors are doing in terms of support for their producers--$324 an acre. Here is the support we are giving our producers--$34 an acre. By the way, these are not Kent Conrad's numbers. These are numbers from the Organization for Economic Cooperation and Development. Our major competitors are outgunning us 10-1. I would suggest the Senator from Arizona is recommending unilateral disarmament for our agricultural producers in what is, in effect, a trade war. He would never do it in a military confrontation--never. If the other side had 50,000 tanks, and we had 10,000 tanks, would the Senator from Arizona be out here recommending we cut the number of our tanks in half? Would that be the first move? I do not think so.

Mr. CONRAD. After I complete my thought and presentation, I will be happy to.

Mr. CONRAD. No. I will be happy to after I complete my statement, as I allowed the Senator to complete his. I ask for the same courtesy from the Senator from Arizona as I extended to him. We are outgunned 10-1. If our opposition had 50,000 tanks and we had 10,000, would the Senator from Arizona advocate cutting our number of tanks in half? That is exactly what we did in the last farm bill. They were supporting their producers at $50 billion a year. We were providing on average of $10 billion of support. And we cut our support in half. I would be happy to yield to the Senator from Arizona.

Mr. CONRAD. I just say that the Senator from Arizona says he would not do something, but that is precisely what he is doing on the floor of the Senate--precisely what he is doing--engaging in unilateral disarmament on behalf of our producers, when they are already being outspent 10-1 by our major competitors, the Europeans. What the Senator from Arizona says is: Let's just abandon our folks. We are going to play by a different set of rules. We are going to be purists on this side of the Atlantic. On the other side of the Atlantic, they get to take these markets the old-fashioned way. They get to go out and buy them. The result will be exactly what is happening, I say to the Senator from Arizona, whom I respect and admire. I disagree firmly with him on this point. I respect and admire the Senator from Arizona; I make that clear. We have a spirited debate and discussion going here, and that is in the best tradition of the Senate. This has no personal feeling attached to it. I want the Senator from Arizona to know, I think this is precisely wrong. The fundamental reason it is wrong is because this is not the way world agriculture is working. What is happening in world agriculture today is our major competitors are going out and buying these markets. If we don't give some assistance to our producers, what will happen is the other side will take market share, as they are. The USDA now projects that this year for the first year the Europeans are going to surpass us in world market share. Why? Because they are going out in a very concentrated, calculated way and buying market after market from us. If we are going to throw in the sugar market, as we have thrown in the wheat market, as we have thrown in the barley market, pretty soon we will find an America that is second rate with respect to agriculture production. That would be a tragedy. It would be a mistake. The Senator references the GAO report. GAO is not perfect. If we look at this report and study it objectively, USDA put a team together and looked at this report. They concluded the validity of the results are suspect and should not be quoted authoritatively. Here is a sampling of some of the words USDA career analysts used in describing the GAO report: naive, arbitrary, in error, inconsistent, inadequate, a puzzlement, inflammatory and unprofessional, not well documented, incomplete, unrealistic. In a nutshell, the instant experts at GAO compared the U.S. price--the same thing the Senator from Arizona has done, the 8 cents he quotes--to a world dump market price that is a fraction of the cost of producing sugar and assumed that if grocery chains and food manufacturers could have access to that dump market sugar, they would pass 100 percent of their savings along to consumers. I have seen this over and over and over. It is an easy mistake to understand because people are writing about this industry who know nothing about it. They say over and over, the world price of sugar is 8 cents. That is absolute nonsense. It is not true. It is not accurate. That is the dump price for world sugar. It would be the same as talking about the world steel price and failing to look at all of the steel that sells to the automobile industry around the world under contract, instead to look at the dump market where just a fraction of world steel and world sugar sells. It is economic know-nothingism, frankly, to make that reference. It is not reality. We have very difficult issues to deal with in world agriculture. In our country, the No. 1 issue is right here. Are we going to let our producers get swamped by a flood of European money, by tough competitors who have made a determination that what they want to do is dominate world agriculture and they are going to do it the old- fashioned way. They are going to go out and buy these markets from us. That is what they are doing--$324 an acre of support on average versus our $34. If we want to continue to engage in unilateral disarmament and let American agriculture go right down the tubes, this is a good place to start, right here, today.

Mr. CONRAD. Mr. President, I will go back to some of the things that were said here so the Record is crystal clear. When the Senator from Arizona says there are massive subsidies being paid to sugar producers, it is just wrong. That is not the way the sugar program works. There is not one nickel of payment made by the Federal Government to sugar producers--not one, not a penny. It is not a subsidy program here. That is not the way it works. That is part of the problem we have. We have people who do not know the program--really do not know the economics of world agriculture, really know nothing about the sugar industry and the sugar program--out here trying to pass laws that would have draconian, dramatic effects. They really are ill-informed. I don't know a nicer way to say it. When they say the world price of sugar is 8 cents, it is an absurdity. It costs 16 cents to 18 cents to produce sugar. How could the world price of sugar be 8 cents? It is not the world price of sugar, as has been said on the floor. The vast majority of sugar in the world sells under contract and those contract prices are not part of the calculation of what the Senator from Arizona calls the world price of sugar. That is excluded from those calculations. So when they talk about a world price of sugar, that is not the world price; it is a dump price. It is that sugar which is left over which is a small part of the world sugar supply that sells that was not part of a contract. It is not a world price. That is a misnomer. It is factually incorrect. Now let's go to the underlying assumption. The underlying assumption is that somehow the rest of the world is engaged in free market economics with respect to agriculture production. False. That is not even close to being right. Our major competitors, the Europeans, are spending about $50 billion a year to support their producers--$50 billion. Here are the comparisons. This is from the Organization for Economic Cooperation and Development. They are the ones who are in charge of keeping score on the question of who supports their producers at what level. Here is the European Union, our major competitor. They are supporting their producers on average $324 an acre. Here we are: $34 an acre. They are outgunning us 10 to 1. What the Senator from Arizona says to us is we ought to cut this some more. We ought to cut our level of support even further. Let's engage in total unilateral disarmament in this world battle over agriculture markets. What sense does that make? We tried that in the last farm bill. In the last farm bill, we cut our support for producers on average from $10 billion to $5 billion. We cut it in half on the theory that was going to be a good example for the Europeans and they would similarly reduce their support. What happened? They did not cut their support by a nickel. Instead, they stayed steady on course, buying up world market after world market. The USDA tells us they are going to surpass the United States in world market share for the first time in anyone's memory. That is where we are headed. We are headed for a circumstance in which America, which has dominated world agricultural trade, is headed for the No. 2 position. And the Europeans believe, as they have told me, we are so prosperous that we will not fight back and, in fact, we will give up these markets. I say to the Senator from Arizona, he would never engage in unilateral disarmament in a military confrontation. Why is he insisting on it in an agricultural market confrontation? It makes no sense. Here we are, outgunned 10 to 1, and he wants to make it an even greater disparity; to say to our producers: We abandon you. We wave the white flag of surrender; we want the Europeans to take over these world agricultural markets that have long been ours. We have to quit being naive on what is going on in world trade. It is not free market. It is not free trade. It is managed trade; it is managed markets; it is a heavily subsidized battle over world market share. That is what is going on. We can choose to give up and run to the sidelines and give in or we can fight back. I hope the United States decides to fight back. I hope we decide we are not going to abandon our producers and allow our major competitors, the Europeans, to dominate world agricultural trade. In the long term, that would be an economic disaster for this country and certainly for the tens of thousands of farmers all across America who are dependent on the wisdom of this body to recognize what is happening, and to stand by their side and be ready to fight because I can assure you, that is what the Europeans are doing. They are fighting for world market share. As one of the top Europeans described to me: Senator, we believe we are in an agriculture trade war with the United States. We believe that at some point there will be a cease-fire in this trade war, and we believe that whoever occupies the high ground will be the winner. The high ground is world market share. They have told me at some point they think there is going to be a cease-fire, and whoever occupies the high ground will be the winner, and the high ground is world market share. That is what this is all about. The Europeans are aggressively spending to gain world market share to be in a position of world dominance in agriculture, and that strategy and that plan is working. If one looks at the trend lines over the last 20 years, one will find the Europeans have gone from being the major importing region in the world to the major exporting region today. They have done it in 20 years. They have done it by discipline. They have done it by a plan. They have done it by a strategy. They are counting on us not to be paying attention. They are counting on us to give up. They are counting on us to give in. They are counting on us to wave the white flag of surrender. I pray this body does not go any further down this road of unilateral surrender in world agriculture because we have already given up too much. The Europeans support their producers $324 an acre. The United States supports its producers $34 an acre. The Senator from Arizona said: Let's make this disparity even greater. That is a disaster. That is a disaster, and we have the chance to stop it by this vote at 2 o'clock. I hope we take the opportunity. I thank the Chair and yield the floor.

Mr. CONRAD. Mr. President, might I first clarify that the $450 million that the Senator from Mississippi referenced is not for North Dakota. It is a national program to deal with disasters that have occurred in this most recent period of time. Some States have been hit by drought. Some States have been hit by flooding. In reference to the question of the Senator from New Mexico, whether these are emergencies that could not have been dealt with in the normal process of the committee's work, the answer is affirmatively yes, they could not have been dealt with in the normal work of the committee. They could not have been dealt with in the previous supplemental because the disaster had not yet occurred--at least with respect to North Dakota. Senator Dorgan indicated we had the most remarkable weather event since we saw the 500-year flood in 1997. In mid-June, our State got 20 inches of rain in 36 hours. This is the headline from the biggest paper in the State: ``Swamped.'' This was a week after the rain that I just referenced. The rain that I just referenced occurred a week before this one. We have been hit by the most remarkable series of floods since the 1997 flood, which was a 500-year event. On June 12, in North Dakota, we had rains that were up to 20 inches in a wide band in northeastern North Dakota. Seven days later we got hit with this rainstorm--8 inches in 6 hours. The devastation is stunning. On the State university, this is the reference, NDSU, $50 million at the State university. At the dome that is the large center, the activity center for the city: $10 million of damage. In surrounding farm areas as a result of these two floods: 1.7 million acres devastated. The catastrophe in our State cannot be overstated: 1.7 million acres of land devastated, hundreds of millions of dollars of damage in the largest city in our State. This is an emergency by any definition. Unfortunately, it had not occurred when we dealt with the supplementals. It had not occurred when the committee did its work. It is only now that we know the full extent of the damage. That is why we are here asking our colleagues not for a new program but to reinstate the program we had last year to deal with crop loss disasters. Last year, we put in place a program that cost about $2 billion to deal with natural disasters. This year we are asking for $900 million not just for North Dakota but for the other States that have been hit as well. We know the devastation in North Dakota is stunning, but we are not alone. In other areas of the country disasters have ruined crops as well: 216 counties in Georgia, South Carolina, and Florida were declared disaster areas on July 14. I might say to my colleagues, I spoke on this matter last Friday with Senator Coverdell, Senator Coverdell who was tragically lost to us earlier this week. Senator Coverdell had indicated that he would join in an amendment because Georgia has been devastated. South Carolina and Florida were declared agricultural disaster areas as well on that same day, July 14. USDA has also declared agricultural disasters in parts of Alabama, Nebraska, New Mexico, Arizona, Mississippi, New York, Texas, Washington, and perhaps other States. These are the States that I know of that have had disasters declared. The hard reality is these things have happened. The earlier package we dealt with was designed for economic disasters. That has been passed. That has been signed into law. This is to give back the program that was available last year for areas hit by drought or severe flooding. We are asking for $900 million. I can tell you, it is desperately needed, desperately needed. It is without question an emergency. This series of events, at least in our State, had not occurred at the time of the supplemental appropriations bills, nor had it occurred so the full extent of the damage was known for the committee deliberations. That is the reality. This responds also to the needs of producers in the Northeastern United States who have been hit, and the needs of producers hit by disasters in the South. I ask my colleagues to very carefully consider their response to this request. We have always tried to be a United States of America in response to disasters, listening to the needs of every State in every condition. I regret very much that I am here asking again. We have had nine Presidential disaster declarations in the last 8 years in my State. I never remember something like this in my life. There is some extraordinary weather pattern affecting my State. As many of you know, we have a lake that has risen 25 vertical feet in the last 6 years, a lake that is the size of the District of Columbia, a lake that is devouring surrounding communities, roads, farms--that is another disaster. That lake missed having this extraordinary rainfall by 70 miles. If that lake would have been hit by this 20 inches of rain in 2 days, we would have been here dealing with a calamity of stunning proportion. So I say to my colleagues, I know none of us like these surprise requests, but we could not have made the request until the disaster occurred. We could not have quantified the need, unfortunately, until FEMA and USDA had a chance to go in and do a review of the level of disaster. Again, the $450 million requested is not for North Dakota. It is a national response to all the States that have been affected to repeat the program we passed and put in place last year. I hope my colleagues' hearts will not turn cold simply because we have had to face disasters year after year. I can tell you, the people of my State need help. Mr. President, 1.7 million acres devastated, that is one- fifth, 20 percent of the crop base of my State, and the biggest city of my State, as the headline in the biggest newspaper in my State says: ``Swamped.'' This is from the Grand Forks Herald, one of the four largest cities in the State, 80 miles to the north of Fargo: ``Area Flooding Continues.'' Here are additional reports, ``Weather Service Official Says Storm Worst He's Ever Seen.'' It is hard to describe an event of this proportion--20 inches of rain in 36 hours. It is Biblical. I don't know any other way to say it to my colleagues. This is from the Fargo Forum, again the biggest newspaper in our State, with officials there saying: ``It's the worst rain flood we've ever had''--in the history of our State. Finally, this story kind of tells it all, again from the biggest newspaper in our State: ``Floods Finish Off Crops Hurt By Drought.'' I just conclude by saying to my colleagues: It is perverse but it has happened. Hundreds of millions of dollars of damage in my State alone, with other States similarly affected. We ought to put in place the program we had last year to help those who deserve assistance. That is my plea to my colleagues tonight.

Mr. CONRAD

Mr. CONRAD. Mr. President, I rise today to join my colleagues in mourning the sudden and untimely death of our colleague from Georgia, Paul Coverdell. Senator Coverdell had a long and distinguished career of public service, capped by his dedicated service in the United States Senate. Senator Coverdell served his country in the United States Army in Japan, Taiwan and Korea. In 1970, he embarked on a career in politics in his native Georgia, serving as a state Senator and chairman of the state Republican party. In 1989 he was selected by President Bush to lead the Peace Corps. We here in the Senate, though, knew Paul Coverdell as a friend and as a real gentleman. We did not always agree on the issues, but Paul Coverdell never took policy disagreements personally and never let them affect his relationships with other Senators. Senator Coverdell was always very positive, very upbeat. On every issue, even when we disagreed, I found Paul to be fair, decent, and, above all, honest. In this body, some Senators are known as ``work horses.'' Others are known as ``show horses.'' There is no question that Paul Coverdell was a work horse. He was not flashy. He did not seek the media spotlight. Paul Coverdell worked tirelessly with the leadership on his side of the aisle on some of the toughest issues facing the Senate. He was interested in getting results, not credit. His focus, his determination, and his willingness to bring other Senators together to get things done served the Senate well, served Georgia well, and served our country well. His spirit and energy will be sorely missed in this body. Put simply, I liked and respected Paul Coverdell. We will miss him. My thoughts and prayers go out to his wife, Nancy, his family and friends, and his staff.

Mr. CONRAD

Mr. CONRAD. Mr. President, this week the Senate was required to choose between two plans to correct the marriage tax penalty. Unfortunately, both of them were flawed. Make no mistake. The marriage penalty is wrong. The tax code should not penalize people simply because they choose to marry. As our economy continues to thrive, we have the opportunity to address the unfairness in the tax code. But we must do so in a manner that is fiscally responsible. We must provide relief to those unfairly penalized, but avoid an unwarranted windfall to those who already receive favorable treatment. I believe the only way to fully eliminate the marriage penalty is to allow couples to decide whether to file jointly, or as individuals. As we have heard throughout this debate, there are 65 different places in the tax code which can cause married couples to pay more tax than they otherwise would. By allowing couples to choose between filing singly or jointly, we allow each couple to choose the best outcome for their personal situation. That is the approach I favor. And that is why I supported Senator Moynihan's proposal. His plan takes the right approach, and would completely eliminate the marriage penalty for couples making $100,000 or less. However, I believe Senator Moynihan's proposal did not go far enough to completely restore fairness for all couples, no matter what their income. I did not support the plan proposed by Senator Roth. It would deal with only three of the instances in the tax code that can result in a marriage penalty, and would direct even greater benefits to people who already experience a ``marriage bonus'' under current tax law. The Roth proposal carries a tremendous price tag, with costs ballooning out of control as the baby boomers begin to retire--and despite its costs, would provide only modest relief from the marriage penalty for the great majority of couples over the next ten years. We have heard that this legislation faces a veto. We will have the opportunity to return to this issue, and find a better solution, one that is affordable, simple, and effective. The plan I offered in the Finance Committee in April could, I believe, form the basis for a compromise. It provides a simple, elegant, and complete solution to the marriage penalty, based on the concept of optional single filing. Optional single filing could not be simpler--taxpayers decide whether to file as a couple or as two single individuals, whichever method produces the smallest family tax bill. Optional single filing means that couples who actually pay the marriage penalty get the relief from it. Let's review one more time why the marriage tax penalty happens. Under our system, marriage affects tax liabilities because married couples pay income taxes jointly rather than as two individuals. Because tax brackets, deductions, and credits for couples are not always set at exactly twice the levels for individuals, married couples do not always pay the same taxes as they would if the same two people were unmarried. As I said, experts have identified 65 separate provisions in the Internal Revenue Code that can affect taxpayers differently based on marital status. About 42 percent of couples pay more filing jointly than if they were not married and filed as two individuals. This is defined as a marriage tax penalty. About half of all married couples pay less. This is known as a marriage tax bonus. The remainder see no significant difference either way. The Roth proposal dealt conclusively with only one of the provisions that gives rise to a marriage penalty. If the difference in the standard deduction is responsible for your marriage penalty, the Republican plan has all the relief you need. If the widths of the rate brackets causes you to pay more as a married couple than you would if you were two single individuals, the Roth plan will give you some help. Likewise, if your penalty stems from the structure of the earned income tax credit, the Republicans have a little something to offer. But for those two marriage penalty situations--and the 62 other provisions in the Internal Revenue Code that could result in a couple paying a marriage penalty--only optional single filing can provide complete relief. That's why I so strongly support optional single filing. It's the best way of dealing with the marriage penalty--give people the flexibility to decide what's best for them. And, because optional single filing would not give tens of billions of dollars in new tax breaks for wealthy individuals who already get a marriage bonus, it would allow us to pay down the national debt faster. Every time I visit with North Dakotans, they tell me that paying down the national debt should be a top priority. Paying down debt will strengthen our economy and reduce interest costs. And it will ensure that our children and grandchildren are not saddled with future tax increases to pay for the debt we ran up in the past three decades. This plan is simple. It is complete. And it matches our nation's priorities. I hope that as this debate moves forward, we can use the plan as a basis for an effective compromise.

Mr. CONRAD

Mr. CONRAD. Mr. President, I rise today to introduce legislation to authorize the Army Corps of Engineers to construct a new water transmission line from the Missouri River to the city of Williston. This project is very important to the reliability of the water supply for the residents of Williston and is needed to mitigate long-term consequences from construction of the Garrison Dam. The construction of the Garrison Dam and creation of Lake Sakakawea by the Corps forced the city of Williston to relocate its water intake and treatment plant to its present location approximately five miles upstream of the city. As a requirement of the new location, a large- diameter transmission line was constructed to convey the entire city's water supply from the treatment plant to the city. All of the water for the city's residents and businesses must flow through this single transmission line. As a result, the existing transmission line is the only link between the water treatment plant and the city's water distribution system. The existing transmission line has been in service for nearly 40 years with limited maintenance to date in part because the line runs through an area near the river that has become super-saturated due to the rising water table behind the dam. As the transmission line continues to age, it has become susceptible to failures, as demonstrated in April 1998. On April 8, 1998, maintenance crews discovered a major leak in the transmission line near the water treatment plant. City officials immediately alerted residents of the problem and imposed water restrictions to essential water uses only. Through an emergency declaration, the National Guard was enlisted to install an overland pipeline to help provide temporary water for the city. The high water table from Lake Sakakawea made repairs difficult with extensive pumping and dewatering procedures needed to locate and fix the broken pipeline. It took more than two weeks to make the necessary repairs. If the failure had occurred during the winter, repairs and temporary water service would have been almost impossible to provide. This experience supports the need for Williston to have a second transmission line from the water treatment plant to the city's water distribution system. The bill I am introducing today will authorize the Corps to construct a new transmission line. The city has identified a new route for the line that provides improved access, avoids unstable site conditions, provides potential service for future industrial sites, while minimizing the length and cost of the new transmission line. Mr. President, I believe the Federal government has a responsibility to assist communities mitigate the adverse consequences resulting from the construction of the Garrison Dam and creation of Lake Sakakawea. The Corps of Engineers built the Garrison Dam which resulted in the need for this project, and in my view the Corps should be responsible for addressing the unintended consequences of building that dam. This bill will help the Federal government live up to its responsibility and ensure that the residents of Williston have a reliable water supply. I urge my colleagues to review this legislation quickly so we can pass it this year, before there is another disruption to the city's water supply.

Mr. CONRAD

Mr. CONRAD. Mr. President, I rise today to introduce legislation to authorize the Army Corps of Engineers to construct a new water transmission line from the Missouri River to the city of Williston. This project is very important to the reliability of the water supply for the residents of Williston and is needed to mitigate long-term consequences from construction of the Garrison Dam. The construction of the Garrison Dam and creation of Lake Sakakawea by the Corps forced the city of Williston to relocate its water intake and treatment plant to its present location approximately five miles upstream of the city. As a requirement of the new location, a large- diameter transmission line was constructed to convey the entire city's water supply from the treatment plant to the city. All of the water for the city's residents and businesses must flow through this single transmission line. As a result, the existing transmission line is the only link between the water treatment plant and the city's water distribution system. The existing transmission line has been in service for nearly 40 years with limited maintenance to date in part because the line runs through an area near the river that has become super-saturated due to the rising water table behind the dam. As the transmission line continues to age, it has become susceptible to failures, as demonstrated in April 1998. On April 8, 1998, maintenance crews discovered a major leak in the transmission line near the water treatment plant. City officials immediately alerted residents of the problem and imposed water restrictions to essential water uses only. Through an emergency declaration, the National Guard was enlisted to install an overland pipeline to help provide temporary water for the city. The high water table from Lake Sakakawea made repairs difficult with extensive pumping and dewatering procedures needed to locate and fix the broken pipeline. It took more than two weeks to make the necessary repairs. If the failure had occurred during the winter, repairs and temporary water service would have been almost impossible to provide. This experience supports the need for Williston to have a second transmission line from the water treatment plant to the city's water distribution system. The bill I am introducing today will authorize the Corps to construct a new transmission line. The city has identified a new route for the line that provides improved access, avoids unstable site conditions, provides potential service for future industrial sites, while minimizing the length and cost of the new transmission line. Mr. President, I believe the Federal government has a responsibility to assist communities mitigate the adverse consequences resulting from the construction of the Garrison Dam and creation of Lake Sakakawea. The Corps of Engineers built the Garrison Dam which resulted in the need for this project, and in my view the Corps should be responsible for addressing the unintended consequences of building that dam. This bill will help the Federal government live up to its responsibility and ensure that the residents of Williston have a reliable water supply. I urge my colleagues to review this legislation quickly so we can pass it this year, before there is another disruption to the city's water supply.

Mr. CONRAD

Mr. CONRAD. I will be happy to yield for that purpose after I have gone a little further. I then will be happy to engage my colleague. Why do they have an estate tax plan that gives the first relief to the very wealthiest among us? Why not provide the first help to those who really need it: small business owners, the farmers who we think ought to be exempted from the estate tax because the estate tax structure, as it is, is out of date. That is not what the Republican plan does. The blue line on this chart shows current law. The red line shows the GOP estate tax proposal. They reduce the rate starting at the top rate first. They reduce that and then create this incredible cliff effect when it goes into full effect supposedly 10 years from now. Frankly, because of the exploding cost, I doubt their plan would ever go into full effect. We would have the worst of all worlds. We would have the top rates reduced, nobody relieved from estate tax liability for the first 10 years, and then I believe because of the exploding costs, this cliff effect would never occur, and we would have the worst of all worlds. We would have lost the ability to plan, to manage estates; we would have lost the opportunity to take people off the rolls who really ought to be off the rolls, and we would have, as I say, the worst of all worlds. If we look at the underlying facts, 98 percent of estates currently are exempt; 98 percent of estates pay no estate tax because of current law which provides substantial credits to exempt the vast majority of estates. Only 2 percent have some requirement to pay under current law. The Democratic proposal in the first year relieves 42 percent of those 2 percent of any liability. That is the Democratic plan. The Republican plan relieves 0 percent of estates from taxation in the first year. Let's go back and review what I have said. Under current law, 98 percent of estates are exempt. Only 2 percent pay any estate tax. Under the Democratic plan, of those 2 percent who have some estate tax liability, in the first year we take 42 percent of them off the rolls completely, entirely. The Republicans take none of them off the rolls--none. At the end of the 10-year period, the Democratic plan takes 67 percent of those 2 percent of estates that have a liability now off the rolls. We take two-thirds of them off the rolls entirely. The Republicans, by the year 2009, takes none of them off the rolls of liability. There is an enormous difference between these plans, and the Democratic plan is far superior in the next 10 years to the Republican plan--far superior for couples, far superior for small business, far superior for farmers. In this morning's New York Times on the front page of the business section, it says: Two prominent experts on estate taxes said yesterday that the Democrats were offering a much better deal to small- business owners and farmers, because the relief under their bill would be immediate and the estate tax would be eliminated on nearly all of them. ``The fact is that the Democrats are making the better offer--and I'm a Republican saying that,'' said Sanford J. Schlesinger of the law firm of Kaye, Scholer, Fierman, Hays & Handler in New York. With routine estate planning, he said, the $4 million exemption could effectively be raised to as much as $10 million in wealth that could be passed untaxed to heirs. Only 1,221 of the 2.3 million people who died in 1997 left a taxable estate of $10 million or more, I.R.S. data shows. Neil Harl, an Iowa State University economist who is a leading estate tax adviser to Midwest farmers, said that only a handful of working family farms had a net worth of $4 million. Of course, we would permit $8 million by a couple to be passed untaxed to heirs. Above that-- Above the $4 million he is referencing-- with very few exceptions, you are talking about the Ted Turners who own huge ranches and are not working farmers,'' he said. Mr. Harl said he was surprised that farmers were not calling lawmakers to demand that they take the president up on his promise to sign the Democratic bill. The Democratic plan, even according to Republican tax analysts, is far superior to the Republican plan in providing relief to taxpayers. It is also true our proposal costs less--$64 billion over the next 10 years, instead of the $105 billion of the Republican plan. That means we could use that other money for other priorities. We could use it for an additional paydown of the debt. That happens to be my favorite priority. I would like to have an even more rapid paydown of the debt because of the enormous benefits that flow from that policy. But there are other things we could do. We could provide tax incentives for health care with the additional money. We could provide for college tuition deductibility, which would help millions of American families who are sending their kids to college. We could have retirement savings proposals. Those cost in the range of $30 to $40 billion. We could have a long-term care tax credit. That costs $32 billion. As I say, we could have additional debt reduction of $40 billion under the Democratic plan, in addition to dramatic estate tax relief that would immediately remove people from the rolls of having to pay estate tax. We could have a paydown on a prescription drug benefit. This is a question of priorities. Our priority has been to give real relief, immediate relief, to those estates that ought not be taxed, in our judgment, to give real relief to thousands of families who would pay no estate tax under our plan and have that relief immediate, starting this coming year, allowing 40 percent of the small number of estates that are currently taxable --only 2 percent of the estates are currently taxable, and we take 40 percent of them off the first year. They owe nothing. The Republican plan takes none of them off the rolls. It gives their relief at the top end, top down, rather than bottom up. That is the fundamental difference between our plan and their plan. We have, as I say, in the New York Times this morning prominent tax experts saying the Democratic plan is better for small business owners. It is better for farmers. There is really no question about it. In the first 10 years, people are much better off under the plan we have offered. I go back to the point I made earlier. Under the Republican plan, you get to the second 10 years and the cost explodes, right at the time the baby boomers start to retire, and put additional pressure on the budget of the United States. I believe the Republican plan will never go into effect. They will find some other way to circle back and impose a tax on those assets because the cost of their plan explodes in the second 10 years to $750 billion right at the time the baby boomers start to retire. I tell you, this is the time to have estate tax relief that is real, not to wait 10 years but to start now, taking people who should not be there off the rolls, giving relief to small business owners and farmers. That is what the Democratic plan does. Mr. President, I would be happy to yield to the Senator from Arizona who had an answer to a question. I yield on his time.

Mr. CONRAD. If I can continue.

Mr. CONRAD. Mr. President, perhaps it is useful to this debate and discussion to put in perspective what we are talking about in budget terms, and then to go to the specifics of the proposals that are before us. I think it is useful, first, to review where we are in terms of the projected surplus over the next 10 years because those numbers have just changed. We are now told we will have a total surplus, a projection of a surplus, of $4.2 trillion over that 10-year period. I think it is also important to remember that two-thirds of that money is from Social Security and Medicare; $2.3 trillion represents surpluses from Social Security, $400 billion represents surpluses from Medicare. Between those two, over $2.7 trillion of the $4.2 trillion projected surplus is from Social Security and Medicare. That leaves us over the next 10 years $1.470 trillion of non-Social Security, non-Medicare surplus. This is money that I argue is available for tax relief, is available for additional debt paydown, and is available for high priority domestic needs such as education, prescription drug coverage, additional expenditures on defense, and other high priorities that we might have in this country. I also argue that Agriculture ought to be given additional resources to confront the Europeans, our major competitors, who are outspending us dramatically as they attempt to buy markets that were once ours. That is the money we have available over the next 10 years The other day in the Washington Post, Secretary Summers, the Secretary of the Treasury, warned us that the proposal that has come out of the House, which is before us now as the Republican proposal, explodes in cost in the second 10 years. I just reviewed our budget circumstance in the next 10 years according to the latest estimates. In the second 10 years, the Republican tax proposal on estate tax explodes in cost. It goes from $105 billion to $750 billion. Here is the Secretary of the Treasury alerting us that the tax cut will cost too much. He points out that the estate tax repeal measure passed by the House and now before the Senate would cost about $750 billion in the second 10 years, more than 7 times its cost in the first 10 years. He points out: If it were to be enacted, it might be the most backloaded piece of tax legislation ever. That is the Secretary of the Treasury. The respected columnist, David Broder, wrote in the Washington Post the day before the Summers' column, Sunday, July 9, a recommendation to the President that he veto the Republican estate tax proposal. He points out that 98 percent of the inheritors in 1998 paid nothing in estate tax--nothing. The $28 billion in inheritance taxes came from 2 percent of very large estates. He goes on to point out that under a 1997 law, a couple with a farm or business worth up to $2.6 million can give it to their heirs tax free. The Democrats raise that to $4 million for a couple, which means that only 1 of every 100 estates would face any inheritance tax. In fact, our proposal is to raise it to $4 million for a couple, and $8 million for those who own small businesses or farms. We are talking about a fraction of 1 percent that would have any liability under the plan we are offering. These charts tell the story. The Republican plan explodes in cost in the second 10 years. It goes from $105 billion over that period in the first 10 years to $750 billion in the second 10 years. There is also something very interesting about the estate tax proposal of our Republican colleagues. They talk a lot about eliminating estate taxes, but really what they do in the first 10 years is not eliminate the estate tax at all. In the first 10 years, they reduce the rates at the top end so the people they are helping are the people who are the very wealthiest in the country. Those are the people to whom they are providing the first relief. It is, frankly, very odd. I have to ask my Republican colleagues why they would choose to provide estate tax relief in this way. Why don't they begin by helping the small business owners and the farmers and the couples who just qualify for paying estate tax? Why not?

Mr. CONRAD

Mr. CONRAD. Mr. President, I rise to congratulate the City of Fargo, North Dakota, on its recent selection with neighboring Moorhead, Minnesota, as an All-American City by the National Civic League. This is a prestigious but well deserved honor. The Fargo-Moorhead metro area is one of the most vital and fastest growing in the Upper Great Plains. The region is home to three highly respected colleges and universities. It is a major medical and commercial center. And in recent years, the area has seen remarkable growth in high technology. But modern infrastructure and economic vitality are only part of the story of this award. Fargo was recently ranked the best medium-sized city in America in which to raise children. It offers the sort of civil society with safe streets, strong families, and functioning and responsive government that comes to mind when people all over this country think of what it means to live in America's heartland. It was pleasant news but no surprise that Fargo-Moorhead was one of 10 communities that were winners in the national All-America City competition, hosted by the National Civic League. The league could not have chosen better. As I have discussed on the Senate floor, recent storms dumped over seven inches of rain on Fargo in just over seven hours, inundating the city and causing hundreds of millions of dollars of damage. These torrential rains have also meant something else, however--another chance for the area's residents to show their resilience, compassion, and community spirit. Already, Fargo-Moorhead is coming back, stronger than ever. Mr. President, I would like to pay special tribute to the cooperation between Fargo and its sister city to the east, Moorhead. Rather than a basis for rivalry, the proximity and common experience of Fargo and Moorhead have proven compelling rationales for cooperation. The joint award to Fargo and Moorhead of All-America City honors recognizes the daily cooperation and friendship that characterizes relations between these neighboring communities. Numerous volunteers invested thousands of hours of work in preparations for the recent competition, and deserve sincere thanks. Let me make special note of the efforts of Fargo Mayor Bruce Furness and Moorhead Mayor Morris Lanning for their leadership and vision. In helping to make this award a reality, they are allowing the nation to see what we in North Dakota and Minnesota have known for years--that Fargo-Moorhead is shining example of the American dream made reality, a truly All-America City. Again, on behalf of the United States Senate, I offer my most sincere congratulations to Fargo and Moorhead for being recognized as an All- America City.