Mike Crapo

Mr. CRAPO

Mr. CRAPO. I thank the chairman. I think it is important to look at this and understand what this debate is about and why we are giving it this time, to focus on the threat to the Constitution that is being posed by the treatment of judicial nominations in this Congress. I thank the Senator.

Mr. CRAPO. Isn't it also true that out of the last 11 Presidents--and I think we used 11 Presidents because it was 1949 when the filibuster became possible--not one of their nominees, until today, until this Congress, not one of the President's nominees has been successfully filibustered in the Senate of the United States because of the understanding of the fact that the Constitution gives the President the right to a vote?

Mr. CRAPO. Would the Senator from Utah tell us how many of the nominees of President Clinton to the bench were filibustered during his Presidency?

Mr. CRAPO. The Senator from Utah spent time responding to questions about the nominees we are going to vote on tomorrow. I note those who oppose this vote often bring up a chart that says 168 to 4, noting they have only filibustered 4 judges in this Congress. I think it is important to point out, though, that number 4 is the first time in the history of this country, in the history of the Senate, a filibuster has been sustained against a judicial nominee of the President of the United States. I think it should be clarified to the American people that the fact we are now seeing a filibuster sustained against nominees of the President turns the Constitution on its head and begins a very dangerous precedent with regard to how the nominees for the judicial branch are treated by this Senate.

Mr. CRAPO. Will the Senator respond to a question?

Mr. CRAPO. It is my understanding that 2,300 nominations have come to the floor since the filibuster was possible.

Mr. CRAPO. Zero were filibustered this year, and this year four have been successfully filibustered, and what is it, five, six, or seven more are scheduled to be filibustered?

Mr. CRAPO

Mr. CRAPO. Mr. President, I appreciate the opportunity our majority leader has given us to debate the issue of judicial nominations and the question of whether it is appropriate under our Constitution to have a filibuster of a judicial nomination by the President. I believe we face a constitutional crisis. There are a lot of numbers that have been bandied back and forth between the various sides in this debate. I am going to try to make a little sense out of those in a few minutes, but I want to start with the Constitution of the United States, which in article II says that the President shall nominate, and by and with the advice of the Senate, shall appoint judges. This Constitution does not provide a supermajority vote for the nomination, for the advice and consent process in the Senate. Our Founding Fathers were very capable and very good at pointing out those circumstances where they believed more than a majority vote was required for this interaction between the Senate and the President established in our Constitution. In a number of different places in the Constitution, whether it is ratification of treaties or impeachment or Presidential veto overrides or the other occasions where our Founding Fathers believed the Constitution required more than a majority vote and instead a supermajority vote, they were very specific about laying that out. With regard to judges, they did not lay out a supermajority requirement. Instead, it was stated--and until this Congress--that our Founding Fathers and the Constitution intended the advise and consent process in the Senate to require a majority vote and not to be ``filibusterable.'' We have seen a lot of debate on a lot of different numbers and I want to try to clarify some of these. One of the very common responses to us is: Well, we have stopped only 4 judges by filibuster this Congress and yet under the last Presidency, under Bill Clinton, over 60--I have heard different numbers, 55, 60, but whatever it is--judges were stopped by the Republicans. It is critical for people to understand that we are talking about two very different things. All judges nominated by any President must go to the Judiciary Committee and must make it through the Judiciary Committee. In that process, under every President, a number of the judges do not make it. In fact, we have a chart that shows under President Bush No. 1, 54 of his nominations did not make it through the committee or were voted down by the Senate. Under President Clinton, our number, as we analyze it, is 41. Now I have heard the number 55 and the number 60, but somewhere between 41 and 60 or some other number in that category did not make it through the committee. Actually, one of these nominees was voted down on the floor. The others did not make it through the committee. They do not make it through the committee often for a number of reasons. The point is that in the committee, there is a majority vote. It is the majority rule, as the Constitution requires, for these judges to make it through the process. Even if the committee does not act on these nominees, if the majority of the Senate wants to bring them forward, there is a discharge petition that can bring them forward. The point is, it is important to understand the distinction between judges who are stopped in the normal course of the majority voting process of the Senate as they work through the committee and then on to the floor, and what we are debating today. Let us go to the next chart. Today we are debating whether we should change what has never been done before. This number is the number of years in which the Senate, Republicans and Democrats, refused to uphold a filibuster against a judge. For the last 214 years, both Republicans and Democrats in the Senate have refused to uphold filibusters against judges. Now, we are going to hear and have heard over the last number of hours a lot of debate about that as well. The Republicans have been accused of filibustering Democrat judges and Democrats have been accused of filibustering Republican judges over the years, and they would have everyone believe it is a common practice for the Senate to accept the filibustering of judges. The reality is that although there have been efforts to try to filibuster judges in the past, until this Congress neither party has tolerated it because both parties recognized the intent of the Constitution that once a President's nomination gets to the floor, the President is entitled to a vote. Whether the Republicans or the Democrats tried to filibuster a judge, both parties in the past have ultimately come together to stop that filibuster from preventing the intent of the Constitution from being accomplished. Let us get a little bit of history on this. The cloture rule in the Senate has been applicable to nominations since 1949. Since that time, cloture has been filed on only 35 nominations, meaning all the rest of the nominations basically made it through, once they got to the floor of the Senate, to a final vote. Of those 35 times that cloture had to be filed, 17 of them were judicial nominations, 18 were other executive nominations. Of those 17 times since 1949, when we have had cloture on judicial nominations, cloture has been defeated on the first try in 11 of the 17 tries. Of all the other cases, cloture was defeated by the second try. Now, people need to understand what cloture is. Every time there is a cloture vote, it does not necessarily mean there is a filibustering. It simply means that at that point, the Senate is not ready to vote. It may mean they want to wait a little longer before a vote is taken. But when we see a cloture tried again and again and the announcement that as many times as it wants to be tried it is going to be stopped, that is a filibuster. We are seeing that now on four judges, with a threat of it on seven more. Let us put up the other two charts. There has been a lot of talk about how the Republicans stopped more of President Clinton's judges than the Democrats did of President Bush's judges. This number is the number of President Clinton's judicial nominations that reached the floor that were voted on and confirmed and the number that were filibustered. None of President Clinton's nominations was filibustered. There were some cloture votes. We can argue among ourselves whether or not that was a filibuster, but the point is that none of the efforts in the Senate against President Clinton was allowed to proceed to stop his judges from getting a vote. They all got a vote. Let us look at the next chart. The next chart is the number of nominations of Presidents in the last 11 Presidencies where, when the candidate got to the floor, they were denied an up-or-down vote. Out of 2,372 nominations that have come to the floor during the last 11 Presidents, zero were filibustered. Zero were stopped from having a vote once they got to the floor of the Senate. In this Congress, we have seen that happen four times, and it is now being threatened on seven more judges. A new trend, a new precedent, in American history is being set in the Senate and the American people need to pay attention to it because regardless of how one passes the numbers back and forth, the fact is that the precedent is now being set to require that not only does a nominee have to make it past the committee but they have to be subjected to the filibuster rule in contravention of the clear intent of the U.S. Constitution. This is all leading up to a battle over a potential Supreme Court nomination. It will be very unfortunate for this country if the Senate, in this Congress, changes the history of our treatment of this critically important provision of our Constitution as we move forward in the analysis and handling of our responsibility on the advice and consent on judicial nominations.

Mr. CRAPO

Mr. CRAPO. Mr. President, I appreciate what my colleagues are trying to do. Clearly there is a problem. When we passed the farm bill, we made an unprecedented investment in conservation. First as chairman of the Agriculture Subcommittee with jurisdiction over conservation, then as the ranking member of the subcommittee, I worked closely with my colleagues on both sides to increase funding for EQIP and WHIP and the Farm and Ranchland Protection Program and to create the Grasslands Reserve Program and increase the acreage for CRP and WRP. Unfortunately, I am unable to support this amendment, because while it attempts to correct an injustice, it does not fix the problem. This amendment, if enacted into law, would stop the CRP program in its tracks. The Conservation Reserve Program is one of the most successful conservation programs in agriculture. It is a win-win for agriculture and the environment. It benefits landowners and wildlife. In fact, it has been proved to be the most effective federal program for production of waterfowl in the United States. In Idaho, we had more than 55,000 acres recently accepted into the program. If this amendment were enacted, those acres could not be enrolled because of lack of technical assistance funding. Likewise, I have been a strong proponent for the Continuous CRP program. This important program provides tremendous benefits for the environment and maintains working lands. I have continually encouraged USDA to enroll more CRP acreage in this important part of the CRP program. However, this program would come to a screeching halt without technical assistance funding. I share my colleagues' concerns and interest in finding a solution, but this is not a full solution. I cannot support an amendment that would have such a disastrous effect on the CRP program. As chairman of the subcommittee, I am committed to working with Agriculture Committee Chairman Cochran and Ranking Member Harkin and other interested members to find a solution. I urge my colleagues to seek a workable solution that protects all of our conservation programs.

Mr. CRAPO

Mr. CRAPO. Madam President, I rise to speak about the Healthy Forests legislation which we recently passed on the Senate floor. Since we passed it--I remind everyone it was a strong bipartisan effort which resulted in 80 votes out of 100 votes in the Senate supporting this effort--we have now run into further procedural snags. As I was sitting here listening to the Senator from Nevada talk about the snag we have run into with regard to trying to get votes on judges, I was reminded of the similarity. It took us a long time to get this bill to the Senate floor, the Healthy Forests legislation. The process we went through was one in which I believe we showed America how we should be working together in a bipartisan fashion to cross party lines, cross regional lines, and build broad support for meaningful legislation to solve a serious problem. We did that. We had a bipartisan coalition that came forward with a strong bill. I will talk a little bit about what the bill would mean to America. We passed it in the Senate with 80 votes. Yet today we are stalled in being able to move forward and appoint conferees to get together with the House and work out the differences between the two bills and come forward with strong legislation. Unfortunately, this procedural maneuver of stopping us from being able to move forward into a conference with the House is simply another mechanism similar to a filibuster. In fact, it might ultimately be backed up by a filibuster to stop us from procedurally being able to move forward on important legislation. In effect, it allows anybody who wants to to vote for the bill, knowing it is going to be stalled and that we will not allow it to then go to conference and keep moving forward. The Healthy Forests legislation is critically needed. I just received the most recent analysis of the statistics. When we debated the bill, we talked a lot about the damage going on in California with the wildfires then burning there. Just to remind everybody about what those fires meant, a study I have in front of me evaluates just 4 of the 13 fires that were burning in California last week as we considered the legislation. The estimated cost to date--which is not finished--of fighting just those 4 fires is $65.8 million. That is 4 of the 13 fires in California. When you look at the rest of the country, as I discussed in the debate last week, we have burned 3.8 million acres in America this year. Last year it was nearly 7 million acres. The year before, it was over 3 million, and the year before that, it was over 7 million acres. The running 9-year average for the number of acres we have burned in our forests is 4.9 million acres per year. The Forest Service estimates over 100 million acres of forest lands are at unnaturally high risk of catastrophic wildfires and large insect-disease outbreaks because of unhealthy forest conditions. Again, just looking at those 4 fires in California, $65.8 million worth of cost to fight them so far, 1,622 structures lost. We all know there were many lives lost in those fires. There were lives lost in Idaho this year fighting fires, my State. I am sure if other Senators from the States in which these fires are burning could be here right now, they would point out the damage in their States, not only from the cost of fighting the fires but in terms of the loss of life and the loss of property. It is important we move ahead with this legislation. I am here to call on my colleagues from the Democratic side of the aisle to work with us again, as we worked in bringing forward the bill, to go into conference and work to achieve the objectives of this legislation. Some have said: Let's just send our bill to the House and tell the House it must accept our bill. It is our bill or no bill. Frankly, our constitutional Framers set up a system of government in which there are two Houses of Congress: the Senate and the House of Representatives. I don't think it is realistic for the Senate to simply say to the House you have to take our bill, and not only do you have to take our bill, but we are not going to conference with you if you won't take our bill as is. I understand the desire by those who negotiated with us to reach the compromise, to build a bipartisan solution, to try to keep the bill we negotiated here intact to the maximum extent possible. In fact, in our negotiations, I committed to them that is what my objective would be if I am able to be on the conference committee. I believe each one of our Senate conferees will fight to the best of their ability to make sure we keep intact the Senate version of this bill. It was a good bill. It had a strong vote. But we must recognize the reality that in order to achieve legislation in this country, both Houses of Congress are entitled to work on the final product. The refusal to go into conference until there is an agreement in advance that the House will take the Senate bill is a position which could be taken on every bill. If you think about it, every piece of legislation that goes through the Senate, one would think the Senators would prefer over the House. People in the Senate could simply take the position we will not go into conference with the House unless they will take our version of the bill. If you think about it a little further, it becomes immediately apparent the House could do the same thing. The House could say to the Senate: We are not going to go into conference with you unless you take our bill. The reality of the way our constitutional system operates is, we have a conference committee between the House and Senate. We work out our differences. We try to come forward with a bill that brings forward the maximum strengths of both systems. Then we come back to both bodies. The Senators in the Senate, the Congressmen in the House, will each then have another chance to register their opinion. If they believe they didn't get a sufficient amount of what they were hoping to see in the legislation, they, again, in the Senate, have the opportunity for a filibuster or to simply vote no on the legislation if they don't want to support it. But to stop us from even being able to take the next procedural step to go to the House and go into conference and try to see what kind of legislation we can come up with to address these critical issues is, in my opinion, inappropriate. Again, I call on all my colleagues to step forward and allow us to move to the next procedural step to go into conference with the House and work on this critical legislation. What does it do? This legislation reflects a comprehensive effort to focus on forest health. As I indicated, we have over 100 million acres in America today that are at an unnaturally high level of risk for fire or insect infestation. The average loss of acres to fires alone is 5.4 million acres per year. In this bill, we put together a comprehensive effort to improve the health of our forests in terms of both the risk of fire and insect infestation. We will lower the number of catastrophic fires. We will establish new conservation programs to improve water quality and regenerate declining forest ecosystems. We will protect the health of the forests by establishing an accelerated plan to promote information on forest-damaging insects and related diseases. Endangered species, community and homes of Americans will be safeguarded through the stewardship of these forest lands. We are going to establish a new predecisional administrative review process and allow for additional analysis under NEPA. We are going to improve the management tools available to our forest managers so they can get scientifically supported management practices implemented on our forest lands. We will direct the Secretary of Agriculture to give priority to communities and watersheds in hazardous fuel reduction projects. We are going to have language in there for the first time ever in this country that specifically protects old-growth forests. We have language to expedite the judicial review process so that we end the litigation paralysis that is probably the most significant thing that is stopping us from effective forest management implementation. Finally, we are going to significantly increase the resources we are putting into healthy forest management. I just told the number of dollars we are spending on fighting fires--on the fires in California. That was approximately $66 million. We are going to put in $760 million annually to help us manage our forests nationwide and preserve these incredible environmental gems for our future while maintaining our ability to have the kind of natural-resource-based economies that grow up around our forests. Madam President, this is a critical issue; it is critical whether one is concerned about environmental aspects, health and safety aspects, loss of life, loss of property, or simply the loss of our incredibly wonderful Federal forests. Again, I call on my colleagues to stop the procedural maneuvers that are prohibiting us from proceeding to a conference with the House. At this point, I will conclude my remarks and yield the remainder of my time to the Senator from Missouri.

Mr. CRAPO

Mr. CRAPO. Mr. President, today I honor Benjamin Richard Williams and Alec David Williams for receiving the Eagle Scout Award. As an Eagle Scout myself, I know first hand the dedication and hard work involved in attaining this prestigious award. These two brothers, from my home State of Idaho, are exceptional individuals who have accomplished much in their young lives. Allow me a moment to tell you about them. In addition to his rank of Eagle Scout, Ben has served diligently in the Boy Scout organization, most recently as Senior Patrol Leader. He has also been heavily involved in extra-curricular activities at Boise High School. Ben is a cross-country runner and is involved in his school's jazz and marching bands. All of this while keeping a very impressive 3.95 GPA. Alec is here with us in the Senate today, serving our country as a congressional page. We appreciate his valuable service in this capacity. Alec has served in several capacities in the Boy Scouts, most recently as the assistant senior patrol leader. Alec is also an exceptional student with a 4.0 GPA. Attaining the rank of Eagle Scout is one more accomplishment to add to his already impressive list. I commend Benjamin and Alec on receiving their Eagle Scout Awards. Through the leadership and service opportunities provided in the Scouting program, Ben and Alec are better prepared to serve their families and America's communities. I wish them continued success in all of their endeavors.

Mr. CRAPO

Mr. CRAPO. With that, I withhold my further remarks. I suspect we may need to get into a little bit of debate on these issues, and that may help us to bring focus on what the differences and concerns we have are. But I withhold further remarks at this time.

Mr. CRAPO. Mr. President, I want to conclude by once again going over the material that has already been put into the record by Senator Cochran from Mississippi. As I indicated, as we have gone through this battle--now the third time--and the debate over whether we should change the manner in which we address derivatives transactions in this country, each time those who are charged with regulating and overseeing these types of concerns have weighed in in opposition to this amendment. I simply want to go through some of the points they have made from the materials. Again, they are already a part of the record. The first time we debated this amendment, back in September, a letter was submitted by Alan Greenspan, Chairman of the Board of Governors of the Federal Reserve System, Paul O'Neill from the Department of Treasury, Mr. Harvey Pitt, Chairman of the U.S. Security and Exchange Commission, and James E. Newsome, Chairman of the CFTC. In their letter at that time, they pointed out that this proposal would subject market participants to disclosure of proprietary trading information and new capital requirements. The capital requirements, I understand, have been dropped in this amendment. But as they go forward, they explain they don't believe a case exists in public policy to justify this increased level of Government intervention. The OTC markets, they state, trade a wide variety of instruments. Many of them are idiosyncratic in nature. They are customized markets and do not generally serve a significant price discovery function for nonparticipants, nor do they permit retail investors to participate. Again, this is not a market in which general investors participate. Highly sophisticated investors engage in these transactions. There has been some debate they have actually created the market through wash transactions and other activity. My point is that type of manipulation, either through manipulating a price or through other activities, such as wash trades, is already regulatable and being addressed by the CFTC. They go on to make the point: The trading of these instruments arbitrages away the inefficiencies that exist in all financial and commodities markets, and that we should not cause increased regulatory burdens on those important functions in our economy. Then again in June, when we addressed this issue last, the same group responded again to the same proposal. They wanted to point out then that with regard to the argument there was all of this bad activity taking place and we needed to pass new laws to stop this bad activity, the same group of regulators--the Treasury, the Federal Reserve System, the Securities and Exchange Commission, and the CFTC--stated they have brought formal actions against Enron, Dynegy, and El Paso for market manipulation, wash or roundtrip trades, false reporting of prices, and operation of illegal markets, and these actions have already resulted in substantial monetary penalties and other sanctions. Again, the point there is, as I made earlier, that we are enforcing the existing regime. Lastly, if there is still concern that we don't have enough protection in the law, our current chairman of the Energy Committee, Senator Pete Domenici, and those who are working with him from the Agriculture Committee, and others are beefing up those protections in the current law. A letter which, again, the Senator from Mississippi has already put in the Record, coming from Senator Cochran, myself, Senator Domenici, and Senator Miller, explains that the Energy Policy Act, which we are now working through in conference, will contain increased protection against fraud and price manipulation which addresses the EnronOnline problems that have been raised by the Senator from California. Even if the current situation in the law was not already satisfactory, we are increasing the antifraud and antimanipulation provisions to make certain that any concerns about this possibility occurring again are addressed as we focus the regulation without trying to do something to our derivatives markets that would cause a reduction in the resiliency of U.S. markets. Mr. President, I reserve the remainder of my time.

Mr. CRAPO. I do. I will need 3 or 4 or 5 minutes.

Mr. CRAPO. Mr. President, I would like to respond to some of the points my colleague from California has made and try to further clarify some of these issues. It appears there may be a difference of understanding between us as to just what the CFTC actually has jurisdictional authority over. My colleague from California has indicated that the antifraud and antimanipulation provisions in the Commodities Futures Modernization Act do not apply to over-the-counter trades. My understanding is very different from that. In fact, it is my understanding that the CFTC has antimanipulation authority that allows the Commission to obtain books and records from any market participant when the CFTC believes the prices are being manipulated. In fact, as I had indicated in my previous comments, enforcement authority with regard to market manipulation and price manipulation is being undertaken with regard to Enron. The question here is whether there is a standardized set of books and records that are required of each participant. In that case, that is correct; the act does not put the full level of regulation onto those in the energy derivatives markets, only on agricultural commodities. So that might be the difference we are talking about. But the fact is, the distinction here is whether there is an exchange type of document disclosure as opposed to simply the type of document disclosure that the CFTC can ask for if it is investigating alleged price manipulation. Second, the Senator from California indicated that she believed the penalties were too soft, and her legislation addressed that issue. I suppose there is not a lot of disagreement. I have not really talked with other Members of the Senate about it. I don't know if there is a lot of disagreement in strengthening the penalties, but that is not really all this amendment does. In fact, it is not really the focus of this amendment. What this amendment does, as I said before, is it increases and creates an entirely new regulatory regime for the management of derivatives transactions in energy. I think this next point is a very critical point that we need to address. The Senator from California said in 1999 the working group said that energy transactions should not be excluded from the act. I am not familiar with the exact quotation or document that is being referred to there. But if the word ``excluded'' is the word the President's working group used, then that makes sense because, as I said earlier in my remarks, the act that we established after the President's working group went through its analysis created three different categories: Those that were included, those that were excluded, and those that were exempted. Why they use the word ``exempted'' as opposed to some other category, I don't know. But there is a real distinction in this law between the word ``excluded,'' which means they are not covered, and the word ``exempted,'' which means they are not required to be registered on an exchange. Those that are in the exempted category are not excluded, which is what the 1999 working group apparently recommended for energy. Energy transactions in derivatives are not excluded, they are exempted, which means they, along with every other commodity transaction except for agricultural and financial transactions, are required to be subject to the reporting and investigatory antifraud and antimanipulation provisions of the act. That is what we are debating here. Finally, the Senator from California mentioned a case where the court did say there was a sufficient lack of clarity in the act that it could not be enforced against knowing and willful conduct. That is correct. That case, to my knowledge, is one of the only, if not the only, case in the country where there has ever been a court ruling that did not give the CFTC the authority it needs to go after this type of conduct. As I indicated in my earlier remarks, the Energy bill, which we are now putting together in the Energy conference, is correcting the problem that came up with that case. I actually have the language in front of me that is being changed in the law to address the concern raised by that case. So because there is a case where the court said the language needs to be tightened up a little bit, that does not mean we then need to create a whole new regulatory regime for the management of derivatives. What it means is we need to correct that problem that the case law pointed out in the statute to be sure that the antifraud and antimanipulation language is able to be enforced as we intended it to be. That is exactly what the chairman of the Energy Committee and the others of us who submitted this letter have stated is being corrected in the Energy bill. Then just one final comment. There was some question as to whether Mr. Greenspan or those of us on this side were making a distinction between financial derivatives or energy derivatives. I can assure those who were involved in the debate on all sides that Chairman Greenspan, as well as the rest of us, understand that we are talking about different types of derivatives when we talk about financial derivatives or energy derivatives or agricultural derivatives or other types of transactions in these commodities. The fact is, whether it is agriculture or energy or financial or other types of commodities, the manner in which we regulate them has incredible impacts on the way in which the markets operate. I will conclude my remarks at this time by asking unanimous consent to have printed in the Record a letter which was delivered to me today, again by Alan Greenspan, responding this third time to the issue, and discussing the reasons our market needs to retain its resilience as we deal with the management of different types of very sophisticated transactions like these derivatives transactions. I ask unanimous consent this letter be printed in the Record.

Mr. CRAPO. Mr. President, I rise to address the Feinstein amendment, as the Senator from Mississippi has indicated, for the third occasion that we have debated this issue in this Congress. It is important to note that each time this amendment has been raised, it has been defeated. Each time the amendment has been raised, it has been opposed by those in the regulatory community--again as has been indicated by the Senator from Mississippi--whether it be the CFTC, the Department of the Treasury, the Board of Governors of the Federal Reserve, or others. The fact is that consistently those who are in charge of regulating, overseeing, and managing our economy and our financial markets have been opposed to this amendment. The question that we must ask ourselves is, Why? To do so it is important to go back over the history of this act. The Commodity Futures Modernization Act that we are debating is one with which we have had a long history of dealing in this Congress. In fact, before 2000, when President Clinton was in office, a President's working group was established which brought together experts from across the industry, not only those who were in the financial industries, but those who were regulating the financial industries, those we have already mentioned. The Secretary of the Treasury, the Commodity Futures Trading Commission, the Board of the Federal Reserve, and others were a part of this Presidential working group. Those who were involved in this Presidential working group looked at all the different commodities that we deal with, the different types of manners in which we deal with these commodities, and came up with an approach to how we should reform and modernize our law to best take advantage of the types of trading contexts or trading ideas that were utilized in the management and trading of commodities. It is a difficult subject to talk about because it is so complicated. The bottom line is that this act was then put forward. It was brought forward on a bipartisan basis in Congress, studied extensively by congressional committees after the Presidential committee brought forward its recommendations. And in the year 2000, reforms of the act were implemented. The amendment seeks to change the structure of regulation that this act established. The first time this challenge to the act was brought forward, we had occasion to have Mr. Greenspan before the Banking Committee. Mr. Greenspan was asked in his testimony what the proposed amendment would mean and what this concept of derivatives, that most people in America don't really get very engaged with, meant to our economy. I was the one who asked the question at that time. Mr. Greenspan's answer is very illuminating. He said, in his opinion, increasing the regulation and changing the scheme for regulating the management and the trading in derivatives from that which had been put together by the President's working group and approved by Congress would actually increase the threat to our economy. In fact, he pointed out that a very simple way to understand derivatives is that they are a tool by which sophisticated participants in the market are able to allocate risk so that those who are better able to bear it can pick it up, and that by being an instrument or a tool through which we allocate risk in our economy, the American economy actually was able to respond more quickly, more resiliently, and more effectively to the threats that have faced it over the last few years. Had we not had the capacity for derivatives transactions between sophisticated buyers, had that been regulated and diminished or pushed offshore because the United States chose to regulate it so aggressively, we would not have had the resilience and the response in our economy that we had. We would have had a deeper trough and a more difficult recovery. Again, this amendment seeks to change that regulatory system Congress and the President and his working group so carefully put together. How did that act work? Well, the act created three different categories of derivatives transactions. The first category that was fully covered and is on an exchange--regulated exchange--where the first category was the category of agricultural transactions. Those transactions are fully regulated and fully covered under the act. The act identified certain types of transactions that should not be covered at all and should have no regulatory impact. Those were called financial derivatives. They include things such as treasury bonds, foreign exchange, or interest rates--those types of transactions that occur in the financial markets, and it was concluded they should not have any regulation. They were simply excluded from the act. A middle category was created for all other kinds of transactions. We have, on the one hand, agricultural transactions, which are fully covered. On the other hand, we have financial transactions, which are fully excluded and, in the middle, all other types of commodities, where the energy transactions fall. It has been argued today that these energy transactions simply are not covered. In fact, the phrase that has been used is one that would imply those engaged in energy derivatives transactions simply don't have any regulatory coverage at all. The phrase ``let anything go'' has been used, or it has been said there is literally no antifraud or antimanipulation provision or protection in the law regarding these types of transactions. That simply is not the case. This middle type of transaction was not put on an exchange because these are not the kinds of transactions that general investors in the market get involved with. These are highly sophisticated transactions, detailed negotiations between very sophisticated buyers and sellers, accomplishing this result which I talked about earlier of trading and exchanging risk. It is done in such a way that it doesn't effectively work on an exchange. That is why in this middle category the exchange was not included, but regulation for price reporting, antiprice manipulation, antimarket manipulation, and antifraud protection was included. So it is simply not correct to say those engaged in energy transactions--derivatives transactions--are not subjected to antifraud, antimanipulation, or price-reporting requirements. They are, which brings to bear the question of why we need to change this system of regulation. Again, on the floor today, as has been the case in the past each time we have debated it, the argument has been made that the Enron transaction or the Enron problem would not have been a problem had we had the aggressive kind of antifraud and antimanipulation this amendment proposes to create. Well, again, when we have had experts before us, and as has been said on the floor already by others, the Agriculture Committee and other committees have studied this very carefully. The experts have said to us there is no indication the lack of regulatory authority, if such exists, was any cause for what happened with Enron, and the lack of having regulated derivatives transactions, in terms of putting them on an exchange, or failure to have further fraud or antiprice manipulation and enforcement authority, was the cause of what happened with regard to the Enron transaction. As a matter of fact, I asked that same question, when this issue first came up, to Alan Greenspan. He, among many others, has indicated there is no evidence the failure to have more rigorous regulatory schemes in place on derivatives transactions would have stopped Enron from doing exactly what it did. Nobody is saying Enron did not violate the market, that Enron did not engage in price manipulation, that Enron did not engage in these wash transactions, that Enron did not engage in fraudulent behavior. The fact is, Enron did engage in these types of activities. The fact is the CFTC is currently investigating and enforcing its antifraud and antimanipulation enforcement authority against Enron and others in the market who might engage in these types of activities. The point is, as we proceed, we must understand whether what happened in terms of the Enron circumstance was as a result of the law not being strong enough or was simply the result of the fact that Enron violated the law. The fact is Enron did violate the law, those violations are being identified, and something over $90 million in fines and penalties against Enron and other market violators have already been enforced. Again, the point is enforcement is occurring. Why should we be concerned about adding a further regulatory scheme on top of that which is already in place? It gets back to the point Alan Greenspan made in that first hearing, where I first asked him about the issue; that is, we have a need in this country for resilience in our marketplace, in terms of allocation of risk. Our management of derivatives is critical in terms of how well we achieve that objective. If we want to increase the regulatory burden and increase the potential of diminishing our ability in the market to have the benefit of these very important types of transactions, then we better have a very good reason for doing so. If we want to have the benefit of a resilient marketplace, where derivatives transactions can occur between sophisticated buyers and sellers, then we want to be very careful about how we regulate it or overregulate it. I agree with anybody who says we want to make sure there should be antiprice manipulation or antifraud provisions in place. We should have those kinds of protections in place. But we should be very careful that, as we implement this type of regulatory scheme, we don't drive offshore derivatives transactions or cause a loss of resilience in our marketplace because we overregulate these important transactions. I note the chairman is looking to perhaps intervene here to conduct other business. I will reserve the remainder of my time. Order of Procedure

Mr. CRAPO. Thank you very much, Madam President. I will try to be brief. I wish to respond to what really has become the one focal point in the discussion we have been having over the last few minutes; that is, whether the Commodity Futures Trading Act applies and provides tools to protect against over-the-counter trades and derivatives. There isn't any difference between us in regard to that. The Senator from California said: Would we want to protect people who would do all of these bad things? She indicated from the letter she read from the attorney general of New York that we were shielding large over-the-counter trades from oversight. I will simply say again that this is not the way the laws have been interpreted by the authorities of the government who administer this act, and it is not the way the law has been interpreted by those who were involved in writing the act. Frankly, with the exception of one case of a word change correction in the energy conference bill to address the issue--with the exception of that one case, to my knowledge, there is no indication that the CFTC does not have authority to regulate these trades. Let me go on. I will go back to the letter of June 11. This is a letter from the Department of the Treasury, the Board of Governors of the Federal Reserve System, the U.S. Securities and Exchange Commission, and the Commodity Futures Trading Commission in which they state they were aware that one of the arguments was they do not have the authority or that adequate regulation is not taking place. This is a letter written to me and to Senator Zell Miller, whom I commend for his efforts in this matter. They state in the letter: As you know, the Commodity Futures Trading Commission has brought formal actions against Enron, Dynegy, and El Paso for market manipulation, wash--roundtrip--trades, false reporting of prices, and operation of illegal markets. If they don't have the authority under the act to regulate price manipulation or other market manipulations, then how could they have brought formal actions to enforce it? Not only do they bring formal actions but the Securities and Exchange Commission, the Federal Energy Regulatory Commission, and the Department of Justice have also initiated formal actions in the energy sector. At the time of this letter, which was last June, they indicated: Some of these actions have already resulted in substantial monetary penalties and other sanctions. These initial actions alone make clear that wrongdoers in the energy markets are fully subject to the existing enforcement authority of Federal regulators. We can debate about whether we should increase the penalties or add more regulations on top of this, but the fact is that under the Commodity Futures Trading Act, anti-price-manipulation and other antifraud provisions are enforceable. I wish to go back also to one other comment the Senator from California made. She read to us out of the 1999 report of the President's working group. I listened very carefully to the words she was reading because it is important to understand the usage of words by the President's working group. I will go back again to when the President's working group recommended how to create this statutory system. When Congress adopted that recommendation and made it law, we created three categories-- included, exempted, and excluded. What this working group language which was read to us said was that due to the characteristics of nonfinancial commodities, exclusion was not intended or not recommended. That is exactly, in fact, what we did in the law. We did not exclude the energy sector. We put it in the middle category, which is exactly where their working report said it should go. It said they should have authority to be exempted. It was put in the ``exempted'' category which, again, although that exempted word makes it sound as if they are excluded, is not the way the wording of the statute works. The exempted category is fully subject to antifraud and antiprice manipulation protections and to record-reporting requirements imposed by the CFTC. Again, we may have a difference of opinion on where the reach of the law is, but the bottom line is the agencies involved in administering these and other laws are fully enforcing the law. I conclude by reading one further letter sent to the Honorable Bill Frist and Tom Daschle yesterday by a number of associations. I will read the names of the associations. These are not just energy companies but companies, associations, and groups involved with the management of our economy from many different perspectives. They point out that the President's working group's approach, which we have been debating today, has been applied and that enforcement actions are taking place. In their words: These actions make it clear that wrongdoers in the energy markets are fully subject to the significant authority of federal and state authorities. Again, in their words: Led by the CFTC, federal and state authorities are currently investigating 32 companies and since last year the Commission has entered into six settlements collecting a total of $96 million in civil penalties from energy companies and power merchants for attempting to manipulate energy prices. Again, if they do not have the authority to regulate, they are certainly doing a good job of regulating. They have collected over $96 million in civil penalties and continue to enforce the act. Signers of this letter are: the American Bankers Association, the ABA Securities Association, the Association for Financial Professionals, the Bond Market Association, EMTA, the Financial Services Roundtable, the Foreign Exchange Committee, the Futures Industry Association, the International Swap and Derivatives Association, the Managed Funds Association, the National Mining Association, and the Securities Industry Association. I bring that up simply to point out that not only are those agencies in our Government--such as the Department of the Treasury and the CFTC and the Federal Reserve and others--concerned about this, but those in the industry, those operating in our financial industries are concerned about what this will do to our economy and the resilience of our ability to manage risk in our economy. One of the factors that gives us the ability to have the strongest economy in the world is our ability to utilize these types of transactional authorities to allocate risk in a way that gives us the resiliency to defend against the kinds of threats against our economy we faced over the last few years. I yield back the remainder of my time.

Mr. CRAPO

Mr. CRAPO. Mr. President, I submit the following notice in writing: ``In accordance with rule V of the Standing Rules of the Senate, I hereby give notice in writing that it is my intention to move to suspend paragraph 4 of rule XVI for the purpose of proposing to the Committee Amendment to the bill (H.R. 2673), Making appropriations for Agriculture, Rural Development, Food and Drug Administration, and Related Agencies for the fiscal year ending September 30, 2004, and for other purposes, with respect to amendment No. 2068.

Mr. CRAPO

Mr. CRAPO. Mr. President, I will be very brief. I know Members are here waiting for a vote. I also have to rise in opposition to the amendment. When we first began crafting the legislation in the Agriculture Committee, of which I chaired the Forestry Subcommittee, our first thought was to have no limit on time and no limit on acreage because, frankly, this is a good bill and it provides good management techniques we ought to utilize until we can devise better ones for our forests. However, in the compromise through the negotiation process, as we were working to make this a strong bipartisan bill and bring it together, we agreed to a 20 million acre cap. I believe that 20 million acre limit is very modest compared to the risk we face. We need to put a perspective on this. The fact is the estimates are that there are 100 million acres at risk in America today, and this bill has a 20 million acre limit. If anything, we need to be talking about how to consider whether we need to expand the application of this bill rather than to retract it or put more limits on it because we have worked in a bipartisan fashion to put together a good compromise that is going to be good for our forests and good for the people who live near the forests. I conclude by also thanking those who worked with us to make this truly a bipartisan effort: The chairmen of the two committees, the Agriculture Committee, Senator Cochran, and the Energy Committee, Senator Domenici; my colleague from Idaho, who is the chairman of the Forestry Subcommittee on the Energy Committee, and Senator Lincoln, who is the ranking member on my subcommittee who worked so closely with me to draft the first piece that became the underlying language from which we then built this compromise. She has worked very hard and very effectively to make this all happen; Senator Feinstein and Senator Wyden, who came in and worked with us, with a true and sincere interest to make this a true and strong bipartisan effort; Senator McCain and Senator Kyl from Arizona, who became involved; Senator Baucus and Senator Burns from Montana; and Senator Thomas from Wyoming--all of whom were very integral in working to help make this a broad, successful, bipartisan effort. I am sure I have left some out. The reason I go through this is to, once again, reiterate how this is the way people in America want the political process to work. They want us to find common ground and build good commonsense solutions to issues that cross party lines and get to the issue on principle rather than on partisanship or personal attacks. That is what this bill is about. As I move to table this last amendment, I will announce that we will then be going forward after that with a managers' amendment and to final passage. I think tonight we are going to have a very big victory for America.

Mr. CRAPO. Mr. President, I join with my colleague from Oregon in opposing this amendment. Let me make a couple of quick points. First of all, if the Senator from Washington is concerned about the issue of funding, we increase by 80 percent the funding provided for fuel load induction. With regard to process, the process in this bipartisan amendment will require the agencies work together in collaboration with the public to develop proposed projects. It will allow the communities to develop community protection fire plans to help land management agencies better understand their individual needs. It requires the agency to publish a notice of each proposed hazardous fuel reduction project authorized under the act. It requires the agency to hold public meetings to describe the project and take the public comments on the project. It requires a NEPA analysis of two action alternatives and one no- action alternative. It requires the agency to facilitate a predecisional protest process once the project analysis has been completed, and then the publication of a final decision notice. Finally, it allows the public to pursue a case in the courts if, after all of that, they still do not support the outcome of the decisionmaking process. Because of this, I believe it is very important that we do not continue to increase the cost and the bureaucracy surrounding the management of these decisions. Therefore, I oppose the proposed amendment. Mr. President, I move to table this amendment. I ask for the yeas and nays.

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

Mr. CRAPO. Mr. President, I object.

Mr. CRAPO. As we move forward on the Healthy Forests legislation, it is my understanding we have worked with all those interested here.

Mr. CRAPO. I will not object.

Mr. CRAPO. Mr. President, I intend to move to table, so if anybody wants to debate before I do that, I will look around and see if someone wants to speak. I wish to make two quick comments about the debate before I move to table the amendment. First, it has been suggested the intent of those who want to keep the bill the way it is is to allow cutting of old-growth forests. That is simply not the case. First of all, as everyone who has focused on this bill knows, we have provisions in the bill that protect old growth in the forests. Second, the fact is, as I will say again, the bill gives communities and the Forest Service managers the flexibility to make the decisions about where the fuel reduction will be most effective to preserve and protect our forests and the people who live near the forests. Certainly, our focus on the Western Governors' proposal and the protection of communities is what we ought to be doing in this legislation. Mr. President, I move to table the amendment and ask for the yeas and nays.