Kent Conrad

Mr. CONRAD

Mr. CONRAD. Mr. President, it is kind of fun to have these debates. I look forward to a chance to once again talk about how the world sugar industry works. The Senator from Arizona indicated that we are having to pay three times the world market price because of the sugar program. It is just not right. That isn't the case. It appears to be the case, but it is wrong. Here is the reason it is wrong. The vast majority of sugar in the world doesn't sell on the world market. The vast majority of sugar in the world sells under contract. Those contract prices are much higher than the so-called world market price. The world market price is a dumping price. It is what happens when producers produce more than they contracted for. They take that excess and they dump it on the market and sell it at fire sale prices. The world market price they talk about is, in fact, not a world market price. It does not represent what sugar sells for. It is totally misleading. As a result, you come to a wrong conclusion. The truth is that the last time we took away the sugar program, what happened to the price of sugar? Did the price of sugar go down? Does anybody remember? The price of sugar shot up. My, what a surprise. This sugar program is supposed to be producing higher prices. Yet when it was removed the last time, sugar prices did not go down; they went up. In fact, they went up dramatically. It is because people do not understand how the sugar market works. This program in effect stabilizes prices. Every country has a sugar program. In fact, every country that is a producer has a program. Our major competitors spend much more on theirs than we do on ours. This program helps stabilize prices for consumers and for producers. When sugar prices fall, do candy prices fall? Let's go back and look. Let's check the record. Interestingly enough, the last time we saw sugar prices fall we also saw candy prices go up. We saw cereal prices go up. The fact is there is almost no relationship between the price of sugar and the finished products that some are talking about. In fact, this program stabilizes prices for consumers and for producers. Finally, on the question of who benefits, those who are producers clearly benefit from stabilization. I believe those who are consumers benefit from stabilization. In my State, we are not talking about a bunch of rich folks; we are talking about family farmers who are in deep trouble right now. If we take away this program, they will be in even deeper trouble.

Mr. CONRAD. Mr. President, this is an attempt to have a pure compromise between the two sides on the question of disaster relief for agriculture. The Democratic plan previously proposed was at $10.8 billion. The Republican plan that we started with was $6.9 billion. This is for $8.8 billion. First, it compromises on the money. Second, on the payment methodology, it adopts what the Republicans have insisted on, the use of enhanced AMTA payments for income support. This is a sincere attempt to compromise on the question of disaster relief. Beyond that, there are significant differences. This is a disaster bill that actually has disaster aid. Our amendment has $500 million set aside for 1999 crop income losses. There is nothing in the underlying amendment. Let me repeat that for people who are listening, and for our colleagues. Our amendment has $500 million for 1999 crop income losses from droughts and floods. The underlying amendment has zero. We are talking about a disaster bill that, on the Republican side, does not have disaster provisions. It has provisions to offset the dramatic loss from the plummeting crop prices, but it does not have provisions to address drought or flooded lands. In addition, the underlying amendment has no money for the unmet 1998 disaster assistance promise that was made. Last year, the government came up short. We gave farmers compensation based on a formula. They got 85 percent of what Congress had promised. My amendment improves on that. It closes the gap between what was promised and what was delivered. The underlying amendment has no money for dairy. Our proposal has $200 million for dairy. The underlying amendment has no money for price reporting. We have a modest amount of money for that. The underlying amendment has no money for agricultural mediation. We have a small amount of money for that. In addition, the underlying amendment has no money for section 32 commodity purchases to address the drought and the livestock price collapse that we have seen for hogs. Our amendment does. The underlying amendment, the Cochran amendment, is at $7.5 billion. Our amendment is at $8.8 billion. It represents a pure compromise on the dollars. It represents an acceptance of the Republican payment mechanism--all AMTA payments. As I have indicated, the other differences are as follows: The underlying amendment has about $200 million for specialty crops; we have $300 million. The underlying amendment has $325 million for livestock assistance and section 32; we have $550 million. The underlying amendment has nothing for 1999 crop income losses; we have $500 million. The underlying amendment has nothing for dairy; we have $200 million. The underlying amendment has nothing for the unmet 1998 disaster promise; we have $162 million. The underlying amendment has money for tobacco farmers; so do we. We also have some miscellaneous provisions and deal with raising payment limits. We have the same approach as in the Republican proposal. This is an attempt to have a straightforward compromise between the two positions. I hope very much our colleagues will accept it. I reserve the remainder of my time.

Mr. CONRAD. Mr. President, I yield 5 minutes to the Senator from Nebraska.

Mr. CONRAD. Mr. President, I ask unanimous consent for an additional 5 minutes so that two other Senators may speak.

Mr. CONRAD

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

Mr. CONRAD

Mr. CONRAD. I am happy to yield. I just reached the conclusion. I am happy to yield with the concluding thought that we do need to respond. We need to respond to this disaster emergency. We also need to respond with a longer-term policy change. I yield the floor.

Mr. CONRAD. Mr. President, I wanted an opportunity to talk about the farm crisis that is now facing our country, and certainly facing my State. I represent North Dakota, which is one of the most agricultural States in the Nation. There is no question that our farmers are facing a crisis of really unprecedented proportion. As I go around my State, every place that I have a farm meeting, farmers have a sense of hopelessness. One of the reasons is that is happening to farm income. I have just come from a hearing where the Secretary of Agriculture is testifying. We were talking there about the pattern of farm income. It is very interesting, if you back out Government payments, which have been increasing now in the last several years in response to this economic calamity--in 1996, farm income absent Government payments was $46 billion. This year farm income, absent Government payments, is estimated to be $27 billion. Farm income from the prices that farmers receive for the commodities they sell is in a virtual free-fall. This chart shows headlines from the newspapers back home talking about what is happening to farm prices. The first one is from the major paper in our State: ``Going down, down, down. USDA sees lower prices for wheat, corn, soybeans, and other major crops.'' Another major story: ``Lower crop prices predicted.'' Again, the story is the same--collapsing farm prices. Farmers have been hurt by more than low prices. They have been hurt by what I call the ``triple whammy'' of bad prices, bad weather, and bad policy. The bad prices are right at the heart of what is causing this farm collapse. This chart shows farm prices of two major commodities, wheat and barley, for a 53-year period. It really tells the story. These are inflation-adjusted prices. So we are comparing apples to apples. These are what farmers have been receiving for these major commodities from 1946 to 1999. You can see that the blue line is wheat. Wheat has gone from almost $18 a bushel back in the 1940s to about $2.50 a bushel today--a long-term price decline without many real interruptions, although we saw a major one back in the 1970s. We all remember that period when farm prices skyrocketed. But absent that, we have really been in a long-term price decline for wheat, barley, and many other commodities as well. I think this chart tells a very important story because it compares the prices farmers receive for what they sell and the prices they pay for what they buy. The green line goes back to 1991 and shows what prices farmers are paying for the inputs that they must buy to produce crops. You can see that the prices farmers pay have been going up very sharply. On the other hand, prices that farmers have been receiving went up to a peak in 1996--interestingly enough, right at the time we passed the last farm bill. In fact, we were told at the time we would see permanently high farm prices. That proved to be absolutely wrong. Those permanently high prices lasted about 90 days. Since then, we have seen a virtual price collapse. Just as I indicated before, prices farmers have been receiving have been dropping dramatically, and the prices for the things they pay have been rising inexorably. That creates this enormous gap between the prices they are paying and the prices they are receiving. That is what has led to that reduction in farm income I talked about in my initial remarks. This is a crisis by any definition. If we look at what is happening to individual commodities in relationship to the prices farmers receive and the actual costs of producing those commodities, we can see it very clearly. This is what has happened with respect to wheat prices. The green line is the cost of production. The red line is the prices farmers are receiving for their product. You can see the prices farmers receive are far below the costs of producing the product. That is what has led to this cash flow crunch. That is why farmers are telling us: If you do not take dramatic action, tens of thousands of us are going to go out of business. In my State, the estimates are that we will lose 20 or 30 percent of our farmers in the next 18 months unless we act. Let me repeat that. In North Dakota, we are being told by the experts at the State university and major farm organizations that unless we act we will lose 20 to 30 percent of the farmers in my State in the next 18 months. That is a crisis. It is not just in wheat. You see the same pattern. This is soybeans. We don't grow many soybeans in North Dakota. Soybeans are grown further south and to the east. But you can see the same kind of pattern. Here is the cost of production. Here is what the farmers are receiving. Since 1997, farmers are well below the cost of production with respect to soybeans. In wheat, the pattern is the same, and in soybeans. But there are other crops as well that are critically important. This shows what has happened in corn. The red line again is the price. The green line is the cost of production. Since 1997, we have been below the cost of production in corn. You can't stay in business very long in that circumstance. You can't stay in business very long when you are getting less in terms of a price for your product than what it costs you to produce that product. You can hang in there a while as you give up equity and as you go backwards on your balance sheet, but at some point the banker comes calling. He says: Mr. farmer, you are out of business. You can't continue to lose equity. The result has been that we have started to lose farm families in my State in a very dramatic way. Back in 1989 we had over 28,000 family farmers in our State. We can see that we held that in 1990, and in 1991 we saw a drop of about a thousand farmers. Then, in 1992, we actually got some recovery. In 1993, we dropped down to about 26,000. Since then, it has been a constant erosion, so that now we are down to about 22,000 family-sized farms in our State. It is really a dramatic decline in the last 20 years--almost a 20-percent drop. Remember what I said. The experts are telling us now that we could see another 20-percent drop in just the next 18 months--perhaps even more than that; perhaps even as much as a 30-percent loss unless we act. What are the reasons for this? Part of the reason is the financial collapse in Asia and the financial collapse in Russia because those were major customers for our farm commodities. But there are other reasons as well. I believe one of the key reasons is the budget decisions that were made at the time of the last farm bill. The last farm bill had some strengths to it, some pluses. The biggest strength, I believe, is the flexibility it provided to farmers to plant for the market rather than a farm program. But we also made some budget decisions at the time that made it very difficult to write any kind of reasonable farm bill. This chart shows what I am talking about. It shows the resources that were provided to agriculture under the previous farm bill. That averaged $10 billion a year. The new farm bill provided $5 billion a year. In other words, the support for agriculture was cut in half at the time of the last farm bill. That has special implications because if we look at what was happening with our major competitors, we see that they were doing something quite differently. While we were dramatically cutting our support for producers, our European competitors--our major competitors--were maintaining very high levels of support. The Europeans were spending, on average, $44 billion a year--on average, $6 billion for us. This is from 1996 to 1999, just those 3 years. You can see that the Europeans really have us whipsawed. They are outspending us seven to one. They are winning their competition the old-fashioned way. They are buying these markets. That is what the Europeans are up to. Unfortunately, we are engaged in unilateral disarmament. We are cutting in the face of massive superiority on the other side. One of the chief trade negotiators for the Europeans told me several years ago: Senator, we believe we are in a trade war in agriculture. We believe at some point there will be a cease-fire. We believe there will be a cease-fire in place, and we want to occupy the high ground. The high ground is market share. That is exactly what they are up to. And how well it is working. They have gone, in 20 years, from being major importers to being major exporters. In fact, they have surpassed the United States in terms of agriculture exports. One of the ways they have done it is to spend enormous sums of money to put themselves in a position of superiority. This chart shows how the European Union is flooding the world with agricultural export subsidies. This is the European share of world agricultural export subsidies, accounting for nearly 84 percent of all world agricultural export subsidies; the United States' share, this little red piece of the pie, is 1.4 percent. They are outgunning the United States 60 to 1. It is no wonder farm income is declining. It is no wonder exports are declining. It is no wonder our farmers are under enormous pressure. They are under enormous pressure because our European friends have a plan and a strategy to dominate world agricultural trade. Again, they are doing it the old-fashioned way: They are buying these markets. They think the United States is asleep. They think we will not fight back. They have told me: Senator, we think you are so prosperous in so many other areas, you will give up on agriculture. So far, we are proving them right. We are engaged in unilateral disarmament in a trade confrontation. We would never do it in a military confrontation. Why are we doing it? Why are we giving up and letting them dominate world agricultural trade? What are the implications this fall when we go to negotiate with them? I can tell you what I believe the implications are. I believe we are headed for a guaranteed loss. I was referring to the trade negotiator for the Europeans saying to me they believe we are in a trade war. They believe at some point there will be a cease-fire. They believe there will be a cease-fire in place, and they want to occupy the high ground. The high ground is market share. He is right. That is the high ground. We are headed into negotiations with them this fall, and we have no leverage. How will we possibly get a good result when they have America outspent 7 to 1 in overall support, 60 to 1 in export subsidies? How are we going to win that negotiation? What is our leverage to change this relationship? There is no leverage. We are going to lose unless we do something. I personally believe we have to rearm in agriculture, to put more resources into the fight, to send the Europeans a clear and unmistakable message that the United States is not going to roll over; we are not going to surrender; we are not going to wave a white flag and turn over world agricultural trade to them; we will insist on a level playing field. In the last trade negotiation, that gap existed as well. The Europeans have a much higher level of support than we have. Did that gap close? Did our level of support go up? Did the European level go down? Did the gap close? No, it did not. Instead, we got equal percentage reductions on both sides from an unequal base, leaving the Europeans in the superior position. If we look back at the last trade negotiation, we got a 36-percent reduction in export trade subsidy and a 24-percent reduction in internal support on both sides. But the Europeans were at a much higher level. When there are equal percentage reductions from unequal bases, the Europeans remain in a superior position. It does not take a whole lot to figure out that if we continue that pattern of equal percentage reductions from an unequal basis, we will continue to leave the Europeans in a superior position; we will continue to leave our farmers at a competitive disadvantage; we will continue to sign the death warrant of tens of thousands of family farmers. That is the hard reality of what we confront. We have before the Senate a disaster response. It is clearly called for. It is clearly necessary to meet this collapse of farm income and to meet these adverse weather conditions. With respect to weather, in my State there are 3 million acres of land not even planted this year. There are millions more planted very late because of overly wet conditions. It may sound strange out here on the east coast. I saw a story in an east coast newspaper that in one location they are out painting the grass green because of the drought. We can't paint a crop; we can't go out and paint wheat and somehow make it healthy. We can't paint corn. It doesn't work. Maybe one can paint a lawn. I have never seen that done. It sounds rather bizarre to me, but that is what they were doing in New Jersey the other day. They were painting the lawn green, trying to respond to this drought. That is an unusual response. But it is not going to work in agriculture. Farmers in West Virginia, in Delaware, and in Maryland cannot go out and paint a crop. That will not do the job. The fact is, they don't have a crop. In my part of the country it is not drought; it is overly wet conditions, 5 and 6 years of incredibly wet conditions. You cannot even get into the fields to plant. There has to be a disaster response. It has to deal with the bad weather. It has to deal with these ruinously low prices. Yes, it has to deal with the bad policy of putting our farmers at a severe disadvantage to their European competitors. We are telling our farmers: Go out there and compete against the French farmer, the German farmer; and while you are at it, take on the French and German Governments as well. That is not a fair fight. We have to help level the playing field. Yes, there has to be a disaster response, absolutely. But there has to be more than that. There has to be a long-term policy response. We have to be able to say to our European competitors that the United States is not going to roll over; we are not going to surrender; we are not going to give up the agricultural markets; we intend to fight. That is why I have introduced legislation we call the Fight bill, Farm Income and Equity Act, to level the playing field. If the Europeans are going to play the game this way, we will play it that way. We will fight back. We will put our farmers in a place that they can compete. That is fair. That puts us in a position to go to the next trade talks and have a chance to come out winners rather than losers.

Mr. CONRAD. I am happy to yield to the Senator.

Mr. CONRAD

Mr. CONRAD. Mr. President, I ask unanimous consent that I may be permitted to continue past the hour of 10:30 in morning business.

Mr. CONRAD

Mr. CONRAD. Mr. President, I rise today to celebrate the Icelandic heritage of our country and of the state of North Dakota. For a century it has been North Dakota's custom to set aside time to honor the contributions of Icelanders to North Dakota. In order to honor the thousands of people of Icelandic descent that reside in my state, the Governor has proclaimed July 30 to August 2 as Icelandic Heritage Days. Icelandic Heritage Days culminates with a celebration of the historical presentation of a new constitution to the Icelandic Parliament. This occurred on August the second, or ``August the Deuce,'' as many Icelanders call it, 1874 by King Kristjan the Ninth. This action formally freed Iceland from hundreds of years of Danish rule. In 1878, people of Icelandic descent first settled in northeastern North Dakota. Since this time, Icelandic-Americans have been instrumental in the development of their communities and my state. One settler, E.H. Bergman, was a member of the Territorial Legislature, which passed legislation enabling the establishment of the states of North and South Dakota. Since Bergman's time, many more people of Icelandic descent have represented their constituencies in the ND Legislature and state government. Mr. President, this year's celebration is especially noteworthy because an honored dignitary, the Honorable Olafur Ragnar Grimsson, the President of Iceland, will be in attendance. This visit will mark the first time that an Icelandic head-of-state has visited North Dakota. It is a pleasure to have President Grimsson visit North Dakota, and a privilege to honor Icelandic-Americans for all they have done for North Dakota and this great country.

Mr. CONRAD

Mr. CONRAD. Mr. President, I move to waive the Congressional Budget Act point of order.

Mr. CONRAD. Mr. President, I call up my amendment No. 1439.

Mr. CONRAD. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with.

Mr. CONRAD. Mr. President, this amendment, I believe, addresses a critical national need. The Commerce Department tells us we have a shortage of information technology workers of 34,000 and that that will grow by 130,000 a year every year for the next 10 years. This amendment seeks to deal with that situation by providing for a tax credit of 20 percent, up to a limit of $6,000 per worker per year. This means that the Federal Government would be in partnership with businesses training high-technology workers. The company would have to put up 80 percent of the cost, the Federal Government, through a tax credit, 20 percent. This is a reasonable response to a critical national need. This amendment is cosponsored by Senator Reid of Nevada, Senator Robb of Virginia, and Senator Abraham of Michigan. It is endorsed by the Information Technology Association of America, the Software Information Industry Association, the American Society for Training and Development, Cisco Systems, EDS, Intel, Microsoft, Texas Instruments, and many others.

Mr. CONRAD

Mr. CONRAD. Mr. President, I rise today to introduce the Community Development Financial Institutions Fund Technical Corrections Act. This legislation will make the CDFI program more responsive to low- population rural areas. It will allow the program to fulfill its mission of building the capacity of financial institutions in parts of the country that have experienced chronic, sustained out-migration in recent years. As many of my colleagues know, the CDFI Fund was established by the Riegle Community Development and Regulatory Improvement Act of 1994. This program is intended to stimulate the creation and expansion of diverse community development financial institutions. The fund invests federal resources in--and builds the capacity of--private, for-profit and nonprofit financial institutions, leveraging private capital and private-sector talent and creativity. The fund invests in CDFI's using flexible tools such as equity investments, loans, grants, and deposits, depending upon market and institutional needs. The Core Component is the CDFI Fund's main program. In order to be certified for funding, an entity must demonstrate that it has a primary mission of promoting community development, principally serves an underserved investment area or targeted population, makes loan or development investments as its predominant business activity, provides development services, maintains accountability to its target market, and is a non-government entity. In order for a geographical area to be eligible for investment, one of a number of objectively-defined economic distress criteria must be met. The problem, Mr. President, is that the objective measures of economic distress as currently defined by the CDFI Fund do not fully reflect economic distress in low-population areas. Allow me to share just a couple examples with my colleagues. First, significant parts of low-population rural states like North Dakota have historically low unemployment rates and therefore cannot qualify on that basis. In many rural areas unemployment remains statistically nearly non-existent despite--and in fact because of--a lack of non-agricultural jobs. In rural North Dakota, the unemployed have little choice but to leave for urban areas. The result is unemployment rates as low as two or three percent in rural parts of my state and the misleading impression of a strong economy. It is also worth noting that such rural areas often suffer from high underemployment, rather than high unemployment. Additionally, the CDFI Fund program considers an area economically distressed if median family income is at or below 80 percent of the national average, or if the percentage of the population living in poverty is at least 20 percent. Here again, Mr. President, these criteria do not accurately capture the level of economic distress in low-population rural areas. Prolonged out-migration in many rural areas due to the loss of family farms and a shortage of non-agricultural jobs keeps median incomes at higher levels. There are other economic distress criteria in the CDFI program, Mr. President, but they all share one thing in common: they all fail to fully register the unique economic distress found in a good part of rural America. This leads me to the most frustrating aspect of the CDFI program for many low-population rural areas. Current CDFI guidelines consider an area economically distressed and suffering from out-migration if county population loss between 1980 and 1990 was at least 10 percent. This effort to utilize out-migration figures as a measure of economic distress is laudable. However, the CDFI program does so in a manner that does nothing for many parts of rural America, including my state. Mr. President, change in the size of a population has two components. One is what demographers term natural population growth. This is computed by subtracting deaths from births. The other variable is migration, which is determined by subtracting departures from arrivals. If you assumed that out-migration-related economic distress was determined under the CDFI program by looking at out-migration numbers, you would be mistaken. In fact, birth and mortality rates are effectively factored into calculations of out-migration. Instead of net migration loss, the determinate criterion under current CDFI guidelines is the change in the overall sum total of the population from 1980 to 1990. Consequently, many counties that have experienced a continual hemorrhage of population to the cities, but also which have robust birth rates and long life expectancies, have not qualified for the CDFI program. Mr. President, this makes no sense. Natality and mortality rates have nothing to do with out-migration. Just a couple of statistics illustrate why this problem needs to be fixed. Nearly every non-metro county in North Dakota experienced a more than 10 percent net migration loss between 1980 and 1990. However, today only slightly more than two thirds of rural North Dakota counties qualify for the CDFI program because the program's guidelines measure overall population change, not net migration loss. Birth rates have been high enough and lifespans long enough to hide the real story of out-migration in a dozen counties in my state. Mr. President, instead of wheat or sunflowers, the top export in many parts of farm country is people. Unless they can find work in the shrinking agriculture industry, increasing numbers of Americans who were born and raised in the rural Upper Great Plains are being forced to the cities to find work. They become statistics in a continuing and under-recognized exodus driven by economic depression, one that is destroying two of our nation's greatest assets: its small towns and family farms. Mr. President, I want to see the CDFI program work for rural America, to help save our rural communities and keep people on the land. Today, I am introducing legislation that will help it do just that. Mr. President, my bill is very simple. It amends the Riegle Community Development and Regulatory Improvement Act of 1994 to allow non-metro counties to qualify for the CDFI program if net migration loss--rather than just overall population loss--was at least 10 percent during the years 1980 to 1990. Let me be clear: my bill does not strike any part of the Riegle Act and does not make major revisions to that landmark legislation. Rather, my bill makes a technical, perfecting correction that will help make the CDFI Fund work as intended for rural America. Consequently, I have entitled this measure the CDFI Technical Corrections Act. Eighteen states and the District of Columbia, had populations of fewer than two million people during the 1990 Census, Mr. President. That is roughly one-third of the states. Yet of all the Core Component loans the CDFI Fund has made over the past three years, only about 12 percent have been to entities in these low-population states. The CDFI economic distress criteria need to be changed to more accurately reflect the level of economic distress in much of rural America. I urge my colleagues to join me in fixing the CDFI economic distress criteria by passing my technical corrections bill.

Mr. CONRAD

Mr. CONRAD. Mr. President, I rise today to introduce the Community Development Financial Institutions Fund Technical Corrections Act. This legislation will make the CDFI program more responsive to low- population rural areas. It will allow the program to fulfill its mission of building the capacity of financial institutions in parts of the country that have experienced chronic, sustained out-migration in recent years. As many of my colleagues know, the CDFI Fund was established by the Riegle Community Development and Regulatory Improvement Act of 1994. This program is intended to stimulate the creation and expansion of diverse community development financial institutions. The fund invests federal resources in--and builds the capacity of--private, for-profit and nonprofit financial institutions, leveraging private capital and private-sector talent and creativity. The fund invests in CDFI's using flexible tools such as equity investments, loans, grants, and deposits, depending upon market and institutional needs. The Core Component is the CDFI Fund's main program. In order to be certified for funding, an entity must demonstrate that it has a primary mission of promoting community development, principally serves an underserved investment area or targeted population, makes loan or development investments as its predominant business activity, provides development services, maintains accountability to its target market, and is a non-government entity. In order for a geographical area to be eligible for investment, one of a number of objectively-defined economic distress criteria must be met. The problem, Mr. President, is that the objective measures of economic distress as currently defined by the CDFI Fund do not fully reflect economic distress in low-population areas. Allow me to share just a couple examples with my colleagues. First, significant parts of low-population rural states like North Dakota have historically low unemployment rates and therefore cannot qualify on that basis. In many rural areas unemployment remains statistically nearly non-existent despite--and in fact because of--a lack of non-agricultural jobs. In rural North Dakota, the unemployed have little choice but to leave for urban areas. The result is unemployment rates as low as two or three percent in rural parts of my state and the misleading impression of a strong economy. It is also worth noting that such rural areas often suffer from high underemployment, rather than high unemployment. Additionally, the CDFI Fund program considers an area economically distressed if median family income is at or below 80 percent of the national average, or if the percentage of the population living in poverty is at least 20 percent. Here again, Mr. President, these criteria do not accurately capture the level of economic distress in low-population rural areas. Prolonged out-migration in many rural areas due to the loss of family farms and a shortage of non-agricultural jobs keeps median incomes at higher levels. There are other economic distress criteria in the CDFI program, Mr. President, but they all share one thing in common: they all fail to fully register the unique economic distress found in a good part of rural America. This leads me to the most frustrating aspect of the CDFI program for many low-population rural areas. Current CDFI guidelines consider an area economically distressed and suffering from out-migration if county population loss between 1980 and 1990 was at least 10 percent. This effort to utilize out-migration figures as a measure of economic distress is laudable. However, the CDFI program does so in a manner that does nothing for many parts of rural America, including my state. Mr. President, change in the size of a population has two components. One is what demographers term natural population growth. This is computed by subtracting deaths from births. The other variable is migration, which is determined by subtracting departures from arrivals. If you assumed that out-migration-related economic distress was determined under the CDFI program by looking at out-migration numbers, you would be mistaken. In fact, birth and mortality rates are effectively factored into calculations of out-migration. Instead of net migration loss, the determinate criterion under current CDFI guidelines is the change in the overall sum total of the population from 1980 to 1990. Consequently, many counties that have experienced a continual hemorrhage of population to the cities, but also which have robust birth rates and long life expectancies, have not qualified for the CDFI program. Mr. President, this makes no sense. Natality and mortality rates have nothing to do with out-migration. Just a couple of statistics illustrate why this problem needs to be fixed. Nearly every non-metro county in North Dakota experienced a more than 10 percent net migration loss between 1980 and 1990. However, today only slightly more than two thirds of rural North Dakota counties qualify for the CDFI program because the program's guidelines measure overall population change, not net migration loss. Birth rates have been high enough and lifespans long enough to hide the real story of out-migration in a dozen counties in my state. Mr. President, instead of wheat or sunflowers, the top export in many parts of farm country is people. Unless they can find work in the shrinking agriculture industry, increasing numbers of Americans who were born and raised in the rural Upper Great Plains are being forced to the cities to find work. They become statistics in a continuing and under-recognized exodus driven by economic depression, one that is destroying two of our nation's greatest assets: its small towns and family farms. Mr. President, I want to see the CDFI program work for rural America, to help save our rural communities and keep people on the land. Today, I am introducing legislation that will help it do just that. Mr. President, my bill is very simple. It amends the Riegle Community Development and Regulatory Improvement Act of 1994 to allow non-metro counties to qualify for the CDFI program if net migration loss--rather than just overall population loss--was at least 10 percent during the years 1980 to 1990. Let me be clear: my bill does not strike any part of the Riegle Act and does not make major revisions to that landmark legislation. Rather, my bill makes a technical, perfecting correction that will help make the CDFI Fund work as intended for rural America. Consequently, I have entitled this measure the CDFI Technical Corrections Act. Eighteen states and the District of Columbia, had populations of fewer than two million people during the 1990 Census, Mr. President. That is roughly one-third of the states. Yet of all the Core Component loans the CDFI Fund has made over the past three years, only about 12 percent have been to entities in these low-population states. The CDFI economic distress criteria need to be changed to more accurately reflect the level of economic distress in much of rural America. I urge my colleagues to join me in fixing the CDFI economic distress criteria by passing my technical corrections bill.

Mr. CONRAD

Mr. CONRAD. I am happy to yield to the Senator.

Mr. CONRAD. May I withhold for the moment?

Mr. CONRAD. I thank the Chair and thank the Senator from New York. I thought it might be helpful to review the record on how we got to where we are today as we put in context the choices that Senators have to make. I think it is helpful to go back to 1981, the Reagan administration, and look at what happened to deficits and debt during that period, and compare it to the Bush administration and the Clinton administration, so that we understand how we got to where we are today and what the implications are for the proposals before us. If we go back to the Reagan administration, I think we all recall the economic history. We had, then, a major tax cut. The results were clear. The deficits exploded. The debt exploded. Then, in the Bush administration, we saw a further explosion of deficits, until in the last year of the Bush administration we reached a budget deficit of $290 billion. The national debt had tripled under the Reagan administration. In 1993, we passed a plan, on the Democratic side, without a single vote from the Republican side, a 5-year plan to reduce the deficits and restore our economic health. That plan worked and worked beautifully. We saw reductions in the deficit in every year of this plan. We saw in the first year the deficit go down to $255 billion, and then we saw declines in the deficit until we reach surplus. That is the record of these three administrations. In 1993, when we passed a 5-year plan that put us on the path to deficit reduction, we had increased taxes on the wealthiest 1 percent of taxpayers on income taxes and cut spending. That is how we achieved balance. If we look at it from another vantage point, debt held by the public, we can see during the 1880s the debt held by the public grew dramatically. It was only after we passed the 1993 5-year plan that debt held by the public started coming down. In fact, here we are today; we have seen significant progress made on debt held by the public being reduced. If we have the wisdom to stay on this course, we will see further declines in the publicly held debt. In fact, we can be on a course to eliminate the publicly held debt in 15 years. What have been the results of this economic policy? The results have been a resurgence in our national economic lives--the lowest inflation rate in 33 years, the lowest unemployment rate in 41 years, and we have seen the best economic performance since the Johnson administration back in the 1960s. We can see the rates of growth of various administrations. In the Clinton administration we see an economic growth rate of nearly 4 percent. We compare that to the Bush administration, 1.3 percent; 3 percent under Reagan; the Carter administration, and so on. So we have seen a period of sustained economic growth--in fact, the longest economic expansion in our history. In addition to the other positive benefits, we have seen a dramatic reduction in the welfare caseload. This is largely a result of the economy. It is also a result of the welfare reform proposal that we passed a number of years ago. The percentage on welfare is the lowest in 29 years. All of this is jeopardized. All of this is jeopardized by the risky, radical, reckless proposal that is before us from our friends on the other side of the aisle. Interestingly enough, the very people who are advocating this proposal said, about the 1993 plan that has formed the basis of the deficit reduction and the economic resurgence of this country, that that plan would not work. The distinguished chairman of the Finance Committee said about the 1993 plan: It will flatten the economy. Senator Gramm of Texas, a member of the Finance Committee, said: We are buying a one-way ticket to recession. The truth: The economy has reached a new milestone--the longest peacetime expansion on record. We had a former President who said: Facts are stubborn things. Indeed, they are. The fact is the 1993 5-year plan, that passed without a single vote on the Republican side, reduced the deficit and formed the basis for an economic resurgence in this country. Our friends on the other side of the aisle, the very ones who are here with a radical, risky plan, were the ones who were wrong about the 1993 plan. In fact, Senator Gramm, who was just speaking, said at the time about the 1993 plan: I want to predict here tonight that if we adopt this bill the American economy is going to get weaker and not stronger, the deficit four years from [now] will be higher than it is today and not lower . . . when all is said and done, people will pay more taxes, the economy will create fewer jobs, Government will spend more money, and the American people will be worse off. Senator Gramm was wrong on virtually every count. The fact is, the 1993 plan reduced the deficit and kicked off this extraordinary economic expansion: the lowest unemployment rate in 41 years, the lowest inflation rate in 33 years. The fact is, the very folks who are now advocating this radical, risky plan were wrong in 1993, and not just a little bit wrong; they were dead wrong. Now, let's check their math. It is fascinating what I have heard on the floor today. Over and over the message is that we have a $3 trillion surplus and we are only using one-quarter of it for tax relief. Let's check that. The truth is, the total surplus that is projected over the next 10 years is $2.9 trillion, according to the Congressional Budget Office. But what they haven't been saying on the floor is that $1.9 trillion of that, nearly two-thirds, is Social Security surplus. So you have to subtract that. That leaves a surplus of $1 trillion. When you take out the additional interest cost that will accrue, if you are going to give a tax cut of $130 billion, you are left with $870 billion that is available of non-Social Security surplus. What do our friends on the other side of the aisle want to do with this $870 billion? They say, let's take $800 billion, or nearly that, and give it in a tax cut, a risky tax cut that has the potential to blow a hole in the fiscal discipline we have established--$800 billion of tax cut out of $870 billion that is available. That is not 25 percent, that is 94 percent, 94 percent of the non-Social Security surplus being used for a tax cut--not 25 percent, 94 percent. It is very interesting, the choices that leaves us with. We have nothing for Medicare under the Republican plan, nothing to strengthen Medicare, nothing for domestic needs over the next 10 years, and they have got unallocated $63 billion. Compare that to the Democratic plan that saves every penny of the Social Security surplus for Social Security and then, in equal thirds, one-third for tax relief, $290 billion--$500 billion less than our friends on the other side--$290 billion to strengthen and protect Medicare, and $290 billion for high-priority domestic needs. I think it is critically important that people understand when we talk about domestic needs, what are we talking about for the next 10 years? This chart shows what happens if we just have constant buying power over the 10 years, which is represented by this blue line. That is constant buying power. Our friends on the other side say the Democrats just want to spend money. Let's look at the Democratic plan. I have just indicated we want $290 billion for domestic needs. That represents this red line. That is a cut in buying power for the Federal Government from what we now have. If you just take last year's spending and add inflation, that is the blue line, constant buying power. The Democrats are proposing cutting the buying power of the Federal Government. They are proposing cutting spending. Here is what our Republican friends are talking about in terms of spending cuts, this green line. This green line means dramatic, radical cuts in education, in defense, in parks, in law enforcement. That is what they are talking about. Does anybody believe this is going to happen? Does anybody believe it? It is not even happening this year. The Wall Street Journal reported yesterday that they are cooking the books on the Republican side because they want to spend more money and want to act as if they are not breaking the caps. At some point we have to face reality and face facts. Facts are stubborn things. This blue line is constant buying power. The Democratic plan proposes cutting Federal spending in real terms. The Republican plan proposes dramatic, draconian cuts, cuts that cannot be sustained, will not be sustained. In fact, they won't support them for defense, and they shouldn't. They are living with a fiction, and it is a fiction that is being revealed every day as the committees of Congress do their work. Not only should we check their math but we should check the whole basis for the projections that are being made to sustain a tax cut. Let's remember, the money is not in the bank. The money is projected to come in. I used to be in charge of projecting the revenue for my State of North Dakota. I can tell my colleagues, there is no 10-year projection that anybody can have great confidence in. Robert Samuelson, in today's Washington Post, said: The wonder is that the Republicans are so wedded to a program that is dubious as to both policy and politics. As Federal Reserve Chairman Alan Greenspan noted the other day, tax cuts might some day be justified, but there is no case for big tax cuts based merely on paper projections of budget surpluses. In fact, he went on to indicate, if there was just a 1-percent change in revenue and expenditure from what is projected, these surpluses would vanish. That is very much in line with what mistakes have been in the past. This tax cut scheme is not conservative; it is radical. It is risky. It is reckless. It poses the threat of undermining all of the work we have done to restore the fiscal integrity of this country that has played such a large role in restoring our fiscal health. This is not conservative. It is radical. It is risky. It is reckless. It ought to be stopped. Now, our friends on the other side of the aisle say tax revenue is the highest it has been in a long time, but they are not telling the whole story. Here is what the revenue and expenditure line of the Federal Government looks like going back to 1980 and carrying through to today. The blue line is the outlays of the Federal Government, the spending. The red line is the revenues. What we can see is, it has been pretty constant over time. The reason we had a deficit was that the spending line was above the revenue line--pretty basic stuff. In 1993, when Democrats, without a single Republican vote, passed a plan to balance the budget, we reduced the spending line and we raised the revenue line. That is how we balanced the budget. We cut spending and, yes, we raised income taxes on the wealthiest 1 percent in this country. That is how we balanced the budget. That is how we got the deficit under control. That is how we got the lowest unemployment in 41 years. That is how we got the lowest inflation in 33 years. That is how we got 18 million jobs created. That is how we restored this country to economic health--by cutting spending and raising the revenue to balance the budget. There is one thing they don't tell us much about because I don't think they want to deal with these facts. They are saying the taxes are the highest they have ever been. The tax revenue is the highest it has been in a considerable period. That is what helped us balance the budget, along with cutting spending. But what they have not talked about is what has happened to individual taxes. Most individual taxes in this country have gone down. It might surprise you to hear that after all the rhetoric on the other side. These are not Kent Conrad's calculations; these are the calculations of the respected accounting firm, Deloitte and Touche. These are the combined tax rates of income tax and Social Security taxes. It is very interesting. This is for a working mother, the tax burden, with a family income of just under $20,000 a year. In 1979, their tax rate----

Mr. CONRAD. I would. I thank the Senator from New York. It is very interesting; if we study what has happened to the individual tax rates and tax burden of people in this country over 20 years, they have gone down. The Republican rhetoric suggests everybody's taxes are at record highs. It is not true. It is not true. This is the accounting firm of Deloitte & Touche. They point out that for a working mother with an income of just under $20,000, in 1979, her combined tax rate was 8.6 percent. That has dropped to 5 percent today. Why? Because when the Democrats passed that budget balancing plan in 1993--it is true we raised taxes on the wealthiest 1 percent, but we cut taxes on the vast majority of Americans by expanding the earned-income tax credit. Look at what happened to a middle-income family earning $35,000 a year. Their taxes have not gone up. They have gone down. Again, this is according to the respected accounting firm of Deloitte & Touche. In 1979, their combined tax rate--income tax and Social Security taxes-- was 11.2 percent. That dropped to 10.5 percent in 1999, again, because when the Democrats passed the plan to balance the budget in 1993, we expanded the earned-income tax credit. Look at a tax burden of a family of four earning $85,000, and look at the last 20 years. Again, their tax burden has been reduced. In 1979, it was 17 percent; it is 16.3 percent today. Don't get me wrong. I am not suggesting that people don't deserve further tax relief. I believe they do. The Democratic proposal provides it. It provides it in a fair and balanced way, in a fiscally responsible way. That is not the case of the risky, radical scheme of our friends on the other side. Their tax break explodes in the second 10-year period. We have just stopped that, at least momentarily. But this program that they have outlined of $800 billion in tax cuts explodes to $2 trillion, with the additional interest costs that would add another trillion to $3 trillion in the second 10-year period. That is risky. At the very time the baby boomers start to retire, they are going to undermine the fiscal stability of the country. Those aren't the only issues that need to be addressed. We have already seen how their tax cut explodes in the outyears, just as the baby boomers retire. But we should also ask ourselves how fair is the tax cut scheme of our friends on the other side. This shows the House bill that has already passed. Their idea of fairness is to give the top 1 percent of the people in this country 32 percent of the benefit. The top 1 percent get 32 percent of the benefits of the tax cut proposal of the Republicans in the House of Representatives, which has already passed. So for people earning under $38,000 a year, they would get, on average, $99. If you are earning over $300,000 a year, you get $20,000. That is not fair. That should not be the policy of the United States--a tax cut plan that is skewed to the richest and wealthiest among us, that gives 32 percent of the benefit to the richest 1 percent. That is not fair. It is not wise. It is radical; it is risky; it is reckless. There is a better way. The Democratic alternative says save Social Security first--every penny of Social Security surplus for Social Security. And then for the non-Social Security surplus, to split it in equal thirds: one-third to protect Medicare, to extend its solvency, and to provide prescription drug coverage; one-third, tax reductions for working families, targeted squarely at the middle-income people in this country, the very ones who need tax relief; and one-third for high-priority domestic needs such as education, agriculture, defense, and law enforcement. Again, that $290 billion doesn't even keep pace with inflation. We are cutting Federal spending, in real terms, in the Democratic proposal. I might add that we have more debt reduction than the Republican plan. Let me make that as a final point. The Democratic plan has over $2 trillion of debt reduction. The Republican plan has just under $2 trillion. I suggest to my colleagues that the Democratic plan is superior in every way--greater debt reduction, preserving the Social Security surplus for Social Security, preserving and protecting Medicare, providing for our high-priority domestic needs, and, yes, tax relief targeted at those who deserve it the most--not the wealthiest among us, but middle- and lower-income people who richly deserve some tax relief. I thank the Chair and yield the floor.

Mr. CONRAD. I thank the Chair and the ranking member, the Senator from New York. The Senator from Missouri misspoke. He said that those of us on this side have not supported saving every penny of the Social Security surplus for Social Security. He is simply wrong. The budget we offered on our side not only saves every penny of the Social Security surplus for Social Security; in addition, we proposed saving an additional $300 billion over the next 10 years to strengthen and preserve Medicare. So not only did we propose saving every penny of the Social Security surplus for Social Security, we also proposed taking another $300 billion and using it to preserve and protect Medicare. The thing that is really jolting about this discussion is what is in this column that I referred to earlier by Robert Samuelson in the Washington Post today. He says: The wonder is that the Republicans are so wedded to a program that is dubious as [to] both policy and politics. As Federal Reserve Chairman Alan Greenspan noted the other day, tax cuts might someday be justified to revive the economy from a recession or to improve the prospects of a sweeping program of tax simplification. But there's no case for big tax cuts based merely on paper projections of budget surpluses. Members of the Senate, that is what is so radical about this proposal--radical, risky, dangerous. This proposal not only has massive tax cuts--94 percent of all the non-Social Security surplus over the next 10 years--but it absolutely explodes in the outyears. A tax cut that is $800 billion in the first 10 years becomes $2 trillion and costs an additional $1 trillion of interest. That is exactly what the Byrd amendment was designed to prevent. The whole reason there are expedited procedures in budget reconciliation is to reduce deficits. Our friends on the other side are trying to use those expedited procedures on a measure that would increase deficits--blow a hole in the budget, potentially a hole of over $3 trillion. That is dangerous. That is not conservative. It is radical. It is risky. It is reckless. When they say they are only using 25 percent of what is available-- nonsense, absolute nonsense. Of the $3 trillion that is projected--and, remember, just as Mr. Samuelson points out--if these projections just change a little bit, as they have over and over and over in our history, these projections of surplus could change to projections of deficit, and we will rue the day when we have undermined the dramatic moves we have made toward fiscal responsibility in getting this country back on track.

Mr. CONRAD. I just remind my colleagues, the Democratic plan has more debt reduction in it than the Republican plan. That is a fact. It is indisputable. I hope my colleagues will resist this move to overcome a budget rule to prevent undermining the fiscal integrity of the United States.

Mr. CONRAD. If we check their math, we find the story is quite a bit different from the way they are telling it. Of the total surplus over the next 10 years, $2.9 trillion, nearly $2 trillion of it is Social Security surplus. Are they talking about spending some of this Social Security surplus? Are they talking about once again raiding the Social Security surplus? If they are not, then this should be taken right out of the calculation. Then we have to take out an additional amount, about $130 billion, because if you provide tax cuts, or you spend the money, interest cost goes up. So now you are down, instead of $3 trillion, to $870 billion. And they are talking about a $800 billion tax cut. They are not using a quarter of the money, unless they intend to use Social Security funds. Fairly described, they are talking about using 94 percent of the non- Social Security surplus for a risky tax cut scheme based entirely on projections, projections that might not come true, and in the second 10 years those tax cuts explode, endangering the fiscal integrity of this Government. My God, after the progress we have made to eliminate the deficit and create surpluses in the last 6 years, to turn our back on that and take the risk of putting this economic expansion in jeopardy? It is wild. It is risky. It should not happen. And the move to waive the budget rules that protect the fiscal integrity of this country ought to be defeated.

Mr. CONRAD

Mr. CONRAD. Mr. President, today I am pleased to join Senator Frist to introduce the Medicare Renal Dialysis Fair Payment Act of 1999. 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 per year. 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, it has come to my attention that reimbursement to dialysis facilities does not reflect the more stringent quality requirements placed upon dialysis providers. Since 1983, reimbursement to dialysis facilities has actually declined. Today, according to the Medicare Payment Advisory Commission (MedPAC), dialysis facilities receive on average $122 per treatment, compared with $138 per treatment that they received in 1983. Adjusting for inflation, this means that dialysis providers are only receiving about $42 per treatment (in 1983 dollars) to provide nursing, social work and dietitian care, as well as the actual dialysis treatment. I am concerned that a continued erosion in Medicare payments to dialysis facilities could jeopardize beneficiaries' access to dialysis services. According to MedPAC, ``without an increase in the payment (i.e. composite rate) the quality of dialysis services may decline. Therefore, an update to the composite rate is recommended.'' Further, MedPAC has concluded that the majority of dialysis facilities now lose money on Medicare reimbursement and the problem is especially acute for small, rural, and non-profit dialysis facilities. In my state, we simply cannot afford to lose rural providers--including providers of dialysis services. This legislation will ensure dialysis facilities have the resources to continue offering critical dialysis services to individuals with kidney failure. I urge my colleagues to support this important legislation.

Mr. CONRAD

Mr. CONRAD. Mr. President, today I am pleased to join Senator Frist to introduce the Medicare Renal Dialysis Fair Payment Act of 1999. 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 per year. 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, it has come to my attention that reimbursement to dialysis facilities does not reflect the more stringent quality requirements placed upon dialysis providers. Since 1983, reimbursement to dialysis facilities has actually declined. Today, according to the Medicare Payment Advisory Commission (MedPAC), dialysis facilities receive on average $122 per treatment, compared with $138 per treatment that they received in 1983. Adjusting for inflation, this means that dialysis providers are only receiving about $42 per treatment (in 1983 dollars) to provide nursing, social work and dietitian care, as well as the actual dialysis treatment. I am concerned that a continued erosion in Medicare payments to dialysis facilities could jeopardize beneficiaries' access to dialysis services. According to MedPAC, ``without an increase in the payment (i.e. composite rate) the quality of dialysis services may decline. Therefore, an update to the composite rate is recommended.'' Further, MedPAC has concluded that the majority of dialysis facilities now lose money on Medicare reimbursement and the problem is especially acute for small, rural, and non-profit dialysis facilities. In my state, we simply cannot afford to lose rural providers--including providers of dialysis services. This legislation will ensure dialysis facilities have the resources to continue offering critical dialysis services to individuals with kidney failure. I urge my colleagues to support this important legislation.