Peter DeFazio

Mr. DeFAZIO

Mr. DeFAZIO. Madam Chairman, I yield 5 minutes to the gentleman from California (Mr. George Miller), the ranking member of the full committee.

Mr. DeFAZIO. Madam Chairman, I yield myself such time as I may consume. Madam Chairman, I really never thought we would get here today to the floor of the House of Representatives adopting consensus legislation on behalf of the entire Oregon delegation to protect the extraordinary beauty, ecological value of the Steens Mountains. It is a place I visited, a place I love. It is not in my district. It is actually quite far away from my district, a number of hours' drive. But it is an unbelievably beautiful, almost mystical place rising up out of arid eastern Oregon overlooking the Alvord Desert on one side and looking back to the west over sagebrush and scattered farmlands to the west. The values in that area in terms of the environment are just amazing, not just the spectacular views but the wildlife habitat, the river canyons. This bill will provide extraordinary protections for some of the most delicate areas and the most beautiful areas in the Steens by affording, to the best of my knowledge, the first legislated cattle- free wilderness in, at least, Oregon and, I believe, throughout the western United States. That is crucial for the delicate nature of some of the uplands and the gorges and the headwaters for their preservation. This was not an agreement easily reached. Quite frankly, I think it was about a year ago when the gentleman from eastern Oregon (Mr. Walden) came to my office and said he wanted to talk about the Steens and about legislation for the Steens. I was open to meeting with him about this but did not expect much, to tell the truth. He came in with his trusty staff person, put down a map of the Steens with which I was familiar, and then started pulling out all these velcroed sections and stickies and saying, well, I want to do this. And after he got to about the fifth ``I want to do this,'' I said, this is a pretty good offer. And he said, well, that is not all and he kept pulling out the velcroed stickies and putting them on the map. It was a good first offer. We have improved the bill significantly since that time. We have worked with the conservation groups who are most familiar with the Steens area, environmental groups. The gentleman has done yeoman's work in bringing along the local community and the ranchers, who are significantly impacted by this legislation. I think it is just an extraordinary day and, in my tenure in Congress, a very unusual day when the entire Oregon delegation is unanimously in support of legislation that relates to the environment in our wonderful and beautiful State. This is not something that is frequently seen no matter how meritorious the legislation. So I stand here in strong support of the legislation. We will hear from other members of the Oregon delegation later, and the gentleman from California (Mr. George Miller) I will recognize later. But at this point I want to congratulate the gentleman from Oregon (Mr. Walden), who represents the district, for the work he has done. Madam Chairman, I reserve the balance of my time.

Mr. DeFAZIO. Madam Chairman, I yield myself such time as I may consume. Madam Chairman, I want to thank my colleagues from the Oregon delegation, both for their eloquent words in support of this legislation and for the team work that went into this bill. It is, as I said earlier, in my time in Congress fairly unprecedented the degree of comity and the progress we have made as we went through very, very long and productive discussions. One of the highlights has to have been the hour-and-a-half meeting in my office with the governor on the conference call. We are not quite sure how long he was there. He was there to help us with one key point and was subjected to listening for quite some period of time. I also want to thank others who were involved, Lindsay Slater, as was said earlier, just did yeoman's work; and it is a real loss to the gentleman from Oregon (Mr. Walden) that he is taking on the task of representing an inland State, but we wish him well in his new job. Troy Tidwell, our two senators who obviously played a key role in this and will play a key role in its final enactment, since we have to deal with the other body, so-called, Governor Kitzhaber, as I said earlier, his patience, his contribution, the staff of all of these individuals. In particular, I want to acknowledge Josh Kardon. He was in a number of meetings on this issue when Senator Wyden had to be occupied elsewhere by his official business, and Josh played a key role in meetings with Secretary Babbitt and others. Sarah Bittleman and David Blair also on the Senator's staff. Valerie West, who did tremendous work on Senator Smith's staff, and I have had an occasion to work with Valerie previously when she worked for Representative Smith on the Oregon Wild and Scenic Rivers bill, and she did great work on this. Kevin Smith from the governor's office. Madam Chairman, I had quite a number of occasions to meet with and chat with Secretary Babbitt over the phone on the development of this legislation, and he was a tremendous help, and his staff, Molly McUsic and Laurie Settlemeyer, were also tremendous contributors. Rick Healy from the Committee on Resources did a great job in basically pointing out what he felt were concerns and deficiencies on behalf of the gentleman from California (Mr. George Miller), the ranking member. And we addressed quite a few of those during the development of the legislation. Madam Chairman, I am proud of this legislation. It is a day when I am just so proud to be a Member of the rather small, but sometimes powerful, Oregon delegation, because I think we are going to bowl this bill right through here today without hardly any dissention on the part of our colleagues. So congratulations to the gentleman from eastern Oregon (Mr. Walden), who represents this area, and my thanks to all the other Members of the delegation. Madam Chairman, I forgot my staff, Amelia Jenkins, who did yeoperson's work in this battle on a fine, wonderful resolution. Madam Chairman, I yield back the balance of my time.

Mr. DeFAZIO. Madam Chairman, I yield 5 minutes to the gentleman from Oregon (Mr. Wu).

Mr. DeFAZIO. Madam Chairman, I yield 5 minutes to the gentlewoman from Oregon (Ms. Hooley). (Ms. HOOLEY of Oregon asked and was given permission to revise and extend her remarks.)

Mr. DeFAZIO

Mr. DeFAZIO. Mr. Speaker, let's briefly review why we find ourselves here today to debate replacing a rather arcane section of the tax code that allows corporations to avoid a portion of their tax bill by establishing largely paper entities in a filing cabinet in a tax haven like Barbados with the equally arcane tax provisions of H.R. 4986, the FSC Repeal and Extraterritorial Income Exclusion Act of 2000. Creating this new, expanded loophole to assist corporations in escaping their fair share of the tax burden in the U.S. makes a mockery of pleas by my colleagues to simplify the tax code and improve fairness. For nearly two decades, beginning with the Revenue Act of 1971 (P.L. 92-178), the U.S. provided tax incentives for exports. However, our trading partners complained that these incentives violated our commitments under the General Agreement on Tariffs and Trade (GATT). While not conceding the violation, in 1984, Congress scrapped the Domestic International Sales Corporation (DISC) provisions and created the Foreign Sales Corporation (FSC) provisions. The differences are highly technical and probably only understood by international tax bureaucrats. Under the FSC provision, corporations can exempt between 15 and 30 percent of their export income from taxation by routing a portion of their exports through a FSC. Our trading partners, specifically the European Union (EU), were not satisfied with the somewhat cosmetic changes made to the U.S. tax code. Going back on a verbal gentleman's agreement not to challenge our respective tax codes under global trading rules, the EU filed a complaint with the World Trade Organization (WTO), successor to GATT, essentially arguing the same thing that was argued about DISCs. Namely that export subsidies were illegal under global trading rules by conferring an unfair advantage on recipient companies. A secretive WTO tribunal ruled against the U.S. Dutifully, the U.S. appealed the decision. Earlier this year, the WTO appeals panel upheld the earlier decision and ordered the U.S. to repeal the FSC provision or risk substantial retaliatory measures. Specifically, the WTO appeals panel wrote, ``By entering into the WTO Agreement, each Member of the WTO has imposed on itself an obligation to comply with all terms of that Agreement. This is a ruling that the FSC measure does not comply with all those terms. The FSC measure creates a `subsidy' because it creates a `benefit' by means of a `financial contribution', in that government revenue is foregone that is `otherwise due.' This `subsidy' is a `prohibited export subsidy' under the SCM Agreement [Agreement on Subsidies and Countervailing Measures] because it is contingent on export performance. It is also an export subsidy that is inconsistent with the Agreement on Agriculture. Therefore, the FSC measure is not consistent with the WTO obligations of the United States.'' In other words, it is unfair and illegal under global trade rules for the U.S. tax code to provide welfare for corporations by allowing them to escape taxes that would otherwise be due. At this point, one would expect that my colleagues who, on most occasions eloquently defend the need for ``rules based trade'' and ``free markets'', to adhere to the WTO directive and repeal FSC. Because I assumed my colleagues would want to be intellectually consistent, I introduced legislation shortly after the WTO ruling to repeal FSC. After all, precedent proved the U.S. was more than willing to bend to the will of the WTO. When the WTO ruled against a provision of the 1990 Clean Air Act, the Environmental Protection Agency gutted its clean air regulations in order to allow dirtier gasoline from Venezuela to be sold in the U.S. Similarly, when Mexico threatened a WTO enforcement action on a 1991 GATT case it had won that eviscerated the Dolphin Protection Act, the U.S. went along to get along. In fact, the Clinton Administration sent a letter to Mexican President Ernesto Zedillo declaring that weakening the standard by which tuna must be caught in ``dolphin-safe'' nets ``is a top priority for my administration and me personally.'' The WTO also ruled against the Endangered Species Act provisions that required U.S. and foreign shrimpers to equip their nets with inexpensive turtle excluder devices if they wanted to sell shrimp in the U.S. market. The goal was to protect endangered sea turtles. The Clinton Administration agreed to comply with the ruling. Given this record of acquiescing to the WTO, one could be forgiven for assuming the Clinton Administration and Congress would behave in a similar manner when losing a case on tax breaks for corporations. Of course, sea turtles and dolphins don't make massive campaign contributions, or any campaign contributions for that matter. But, the large corporations who would be impacted by the WTO decision against FSCs do. Apparently not bothered by the hypocrisy, immediately after the ruling by the WTO appeals panel, the Clinton Administration, a few Members of Congress, and the business community openly declared the need to maintain the subsidy in some form and began meeting in secret to work out the details on how to circumvent the WTO ruling and maintain these valuable, multi-billion dollar tax incentives. Now, it is well-known that I am not a big fan of the WTO. It is an unaccountable, secretive, undemocratic bureaucracy that looks out solely for the interests of multinational corporations and investors at the expense of human rights, labor standards, national sovereignty, and the environment. But, by pointing out that export subsidies like FSCs are corporate welfare, however, the WTO has done U.S. taxpayers a favor. Unfortunately, this legislation before us today only does wealthy corporations a favor. I have several problems with H.R. 4986 besides the intellectual inconsistency. I will touch on each of these now. First, and perhaps most importantly, there is little or no economic rationale for export subsidies like FSCs or the provisions of H.R. 4986. In its April 1999 Maintaining Budgetary Discipline report, the Congressional Budget Office (CBO) noted ``Export subsidies, such as FSCs, reduce global economic welfare and may even reduce the welfare of the country granting the subsidy, even though domestic export-producing industries may benefit.'' Similarly, in August 1996, CBO wrote ``Export subsidies do not increase the overall level of domestic investment and domestic employment . . . In the long run, export subsidies increase imports as much as exports. As a result, investment and employment in import- competing industries in the United States would decline about as much as they increased in the export industries.'' Need further evidence? The Congressional Research Service (CRS) has written ``Economic analysis suggests that FSC does increase exports, but likely triggers exchange rate adjustments that also result in an increase in U.S. imports; the long run impact on the trade balance is probably nil. Economic theory also suggests that FSC probably reduces aggregate U.S. economic welfare.'' Of course, protests will be heard from supporters of H.R. 4986 that it gets rid of the export requirement. In testimony before the Ways and Means Committee, Deputy Secretary Eizenstat said the Chairman's mark is ``not export-contingent.'' Of course, that claim is absurd. If a company sells products solely in the U.S., they don't qualify for the tax subsidy. That is, by definition, an export subsidy. Therefore, the criticisms of export subsidies previously mentioned would apply to this new legislation as well. President Nixon originally prosed export subsidies, which became the DISC and then FSC, because he was alarmed at the size of the U.S. trade deficit, which was $1.4 billion in 1971, a number that seems almost quaint by today's standards. As Paul Magnusson noted in the September 4, 2000, Business Week FSC ``produced some hefty tax savings for big U.S. exporters, but it never did actually do much to narrow the trade deficit, which hit a record $339 billion last year.'' And which, I should add, has continued to set new records virtually every month this year. I can't understand why it makes sense to subsidize U.S. exporters to the tune of $5 billion or more when the economic impact is ``probably nil'' or worse. The economic rationale further deteriorates when one realizes, as the previous quotes suggest, that export subsidies discriminate against mom-and-pop stores who don't have the resources to export and against U.S. industries that must compete with imports. This means that export subsidies distort markets by pre-ordaining winners and losers. The winners? Large exporters and foreign consumers who get to enjoy lower priced U.S. products subsidized by U.S. taxpayers. The losers? Small businesses, U.S. taxpayers, and import-competing industries. I find it interesting while Treasury has spent a great deal of time figuring out how to combat corporate tax shelters that have no economic rationale, as discussed in a July 1999 report, that they would push this corporate welfare, which also has no economic rationale. So, who specifically benefits? The journal Tax Notes conducted a revealing study of FSCs in its August 14, 2000, edition. The article profiled the 250 companies that reported $1.2 billion in FSC tax savings in 1998. The top 20 percent of the companies in the sample claimed 87 percent of the benefits. The two largest FSC beneficiaries were the General Electric Company and Boeing, which saw their tax bills reduced by $750 million and $686 million, respectively from 1991-1998. What are some of the other top FSC corporate welfare queens? Motorola, Caterpillar, Allied-Signal, Cisco Systems, Monsanto, Archer Daniels Midland, Oracle, Raytheon, RJR Nabisco, International Paper, and ConAgra. The list reads like a who's who of extraordinarily profitable multinational corporations. Hardly companies that should need to feed from the taxpayer trough. Furthermore, American subsidiaries of European firms take advantage of U.S. taxpayers through export subsidies. British Petroleum, Unilever, BASF, Daimler Benz, Hoescht, and Rhone-Poulenc are all FSC beneficiaries. The fact that foreign companies can also claim export benefits pokes a large hole in the argument that these tax benefits are needed to ensure the competitiveness of U.S. businesses. Simiarly, isn't it a bit odd that economist and U.S. policymakers like to lecture European nation's about their high tax burdens, but now, suddenly their tax burden is too low and, therefore, U.S. companies need subsidies in order to compete? Let's be clear, this legislation is not about the competitiveness of large, wealthy, multinational corporations based in the United States. It is about wealthy campaign contributors wanting to keep and expand their $5 billion-plus tax subsidies and elected officials willing to do their bidding. Not only does H.R. 4986 allow these companies to continue receiving billions in tax breaks, but it actually expands them. This legislation will cost U.S. taxpayers another $300 million a year or more. It is also unfortunate that this legislation subsidizes a number of industries--such as defense contractors, tobacco companies, and pharmaceutical firms--that have no business receiving any more taxpayer hand-outs. Take the defense industry, for example. Under the current FSC regime, defense contractors can only claim 50 percent of the tax available to other industries. The legislation before us today allows the defense industry to claim the full benefit available to others. Leaving aside the fact that U.S. taxpayers are already overly generous to defense contractors, which no doubt they are, expanding this corporate welfare will have no discernible impact on overseas sales. The Treasury Department noted in August 1999, ``We have seen no evidence that granting full FSC benefits would significantly affect the level of defense exports.'' In 1997, the CBO made a similar point, ``U.S. defense industries have significant advantages over their foreign competitors and thus should not need additional subsidies to attract sales.'' Even the Pentagon has acknowledged this fact by concluding in 1994, ``In a large number of cases, the U.S. is clearly the preferred provider, and there is little meaningful competition with suppliers from other countries. An increase in the level of support the U.S. government currently supplies is unlikely to shift the U.S. export market share outside a range of 53 to 59 percent of worldwide arms trade.'' As Ways and Means Committee Member, Representative Doggett, noted in his dissenting views on H.R. 4986, ``In 1999, without the bonanza provided by this bill, U.S. defense contractors sold almost $11.8 billion in weapons overseas--more than a third of the world's total and more than all European countries combined.'' The U.S. should stop the proliferation of weapons and war, not expand it as this bill intends. The pharmaceutical industry is another industry that does not need or deserve additional subsidies from U.S. taxpayers. The industry already receives substantial research and development tax credits as well as the benefits flowing from discoveries by government scientists. As Representative Stark noted in his dissenting views, drug companies lowered their effective tax rate by nearly 40 percent relative to other industries from 1990 to 1996 and were named the most profitable industry in 1999 by Fortune Magazine. The industry sells prescription drugs at far cheaper prices abroad than here in the U.S. For example, seniors in the U.S. pay twice as much for prescriptions as those in Canada or Mexico. It is an affront to U.S. taxpayers to force them to further subsidize an industry that is already gouging them at the pharmacy as this bill would do. In direct contradiction of various federal policies to combat tobacco related disease and death in the U.S., this legislation would force U.S. taxpayers to subsidize the spread of big tobacco's coffin nails to foreign countries. This violates the American taxpayers' sense of decency and respect. Their money should not be used to push a product onto foreign countries that kills one-third of the people who use it as intended. By placing H.R. 4986 on the suspension calendar, debate is prematurely cut off and amendments to reduce support for drug companies, the defense industry or tobacco companies can not be considered. But, I guess that's just par for the course for a process that has taken place in relative secrecy between a few Members of Congress, the Administration, and the industries that stand to benefit from this legislation. You may not hear this in the debate much, but it is important to point out that the EU has already put the U.S. on notice that H.R. 4986 does not satisfy its demands. According to the EU, H.R. 4986 still provides an export subsidy, maintains a requirement that a portion of a product contain U.S.-made components, and does not repeal FSCs by the October 1st deadline. Therefore, it is likely the EU will ask the WTO to rule on the legality of the U.S. reforms. Most independent analysts agree with the EU critique of H.R. 4986. So, it is reasonable to assume the WTO will again rule against the U.S. and allow the EU to impose retaliatory sanctions against U.S. products. According to some press accounts, the EU would be able to impose 100 percent tariffs on around $4 billion worth of U.S. goods. These would be the largest sanctions ever imposed in a trade dispute. In other words, this inadequate reform of export subsidies will open up the U.S. to retaliatory action by the EU, which will harm exports as much or more than any perceived benefit that would be provided by H.R. 4986. Of course, the exporters that will be hurt by retaliatory sanctions probably won't be the same businesses that will enjoy the tax windfall provided by this legislation. Mr. Speaker, ADM is not suffering. Cisco Systems is not suffering. Raytheon is not suffering. Microsoft is not struggling mightily to keep its head above water. But, the American people are. Schools are crumbling, 45 million Americans have no health insurance, individuals are working longer hours for less money with the predictable stress on families, millions of seniors do not have access to affordable prescription drugs, and poverty remains stubbornly high, particularly among children. Rather than debating how to preserve billions in tax subsidies for some of our largest corporations, we should be figuring out how to address some of these issues. How many times over are we going to spend projected, and I stress projected, surpluses, if we want to pay down the national debt, provide prescription drugs, shore up Social Security and Medicare, and increase funding for education, Congress cannot keep showering wealthy corporations with unjustifiable tax subsidies. I will end with a quote from a newspaper I'm not normally inclined to agree with editorially, the Washington Times. In an editorial on September 5, 2000, the Washington Times wrote, ``The Ways and Means Committee boasts that support for its revised FSC bill was bipartisan and near unanimous. It remains a bipartisan and near unanimous blunder.'' I urge my colleagues to vote against H.R. 4986.

Mr. DeFAZIO. I did introduce legislation to repeal these provisions of law.

Mr. DeFAZIO. Mr. Speaker, will the gentleman yield?

Mr. DeFAZIO. Mr. Speaker, this is an extraordinary debate, a $5 billion per year perpetual tax break to the largest, most profitable corporations in the world; forty minutes of debate and that is it. No amendments are allowed. This bill was secretly negotiated, this bipartisan group, very secret and small group, revealed to members of the committee on the same day that the secret negotiations were concluded; perfunctory markup was held and now it is being rushed through. We cannot agree on marriage penalty relief. We cannot agree on small business relief. We cannot agree on inheritance tax relief but, by God, the administration, the Republican leadership, they can put this one together behind closed doors because it benefits the largest, most profitable corporations in this country. Over the last decade, almost $2 billion of these proceeds went to two companies, Boeing and General Electric, mostly for arms manufacturers. Now, we need to help our arms manufacturers. They already dominate the world market, but we need to give them another leg up because not 100 percent of the arms being bought out there by our enemies and our allies are U.S. made yet. We have to give them a leg up. The pharmaceutical manufacturers, well, they need an incentive to export because overseas they sell drugs cheaper than they sell them to the Americans who subsidize their manufacture here. So we have to give them a little tax break to export those cheap drugs to foreigners but not provide affordable drugs here at home. The tobacco companies, of course we want to export tobacco. Maybe that will hurt the productivity of our competitors around the world as they become sick and die from this product that is being promoted through this tax break. This is outrageous. We are taking $5 billion of hard-earned taxpayers' money and shifting it to some of the largest, most profitable corporations in this country under the dubious assumption that somehow this is countering unfair things the Europeans are doing. If they are doing unfair and illegal things, you people wanted this rules-based trade agreement, you wanted a WTO with a secret, deliberative body that would adjudicate these complaints. I did not. I voted against it. Well then file a complaint against the Europeans. Do not extend an unfair subsidy that does not even meet the laugh test. This does not comply with the last ruling. The Europeans will still get to penalize U.S. industries if this goes into effect, and they may well not penalize with tariffs the industries that are getting the tax break. Other U.S. manufacturers might be hurt. You are doing this country a double disservice today with this legislation. It is extraordinary that this would be rushed through in this manner while there is virtually nobody in this Chamber; virtually half the Members are probably not even in town yet. They are still enjoying the hospitality of some of our airlines. If it is an Endangered Species Act provision, by God, we have to comply. If it is a Clean Air Act provision, by God, the U.S. has to comply. If we can make the Europeans eat beef that has been treated with bovine growth hormone, which they have protested against because of health concerns, by God, they have to comply. But when it comes to corporate tax breaks, we will not comply. This is the highest and best use of trade policy. That is what it is all about. Trade policy was written for, by, and about the largest corporations in this country; and we will do anything behind closed doors or even here on the floor of the House under very restrictive conditions to defend those tax breaks in the name of free trade. If you have a problem with the European tax system, file a complaint. Answer that one. Why not file a complaint against OPEC? They are violating the WTO. It is awfully strange that we will not use this rules-based organization. Well, we are told we had a gentleman's agreement on taxes, gentleman's agreement. I voted against entering into the WTO. I never heard any discussion on the floor about gentleman's agreements that were binding as part of this that went to the Tax Code. Pretty strange way to have an enforceable rules-based trade agreement with gentlemen's agreements that no one knows about. If you have a problem with the Europeans, file a complaint. Do not use the tax dollars of American taxpayers to continue this outrageous subsidy, double the subsidy to arms manufacturers, extend it to pharmaceuticals and tobacco. It is outrageous.

Mr. DeFAZIO

Mr. DeFAZIO. Mr. Speaker, finally, today, Congress is going to push through a tax break that the President will rush to sign, not veto. Is it education credits, child care credits? No. A compromise on the marriage penalty or estate tax relief? No. How about how the other side loves to talk about tax breaks for small business. Will it go to small business? No. It is a tax break designed only for the largest multinational corporations operating in the United States. It will not produce a single American job, but it will cost American taxpayers $5 billion to $6 billion. Over the next decade, $750 million to GE, $686 million to Boeing. It will double the tax break for arms exporters. It will give a generous tax break to tobacco exporters, and it will give a tax break to the pharmaceutical companies to sell even more of their drugs at prices lower than that that they offer to U.S. citizens subsidized by the U.S. taxpayers. Mr. Speaker, this is outrageous. It will also go to foreign companies operating in the U.S.: BP, BASF, Daimler-Benz. Why are we rushing a $5 billion tax break to these companies when Americans are still waiting?

Mr. DeFAZIO

Mr. DeFAZIO. Mr. Speaker, I submit for the Congressional Record, an Opinion Editorial written by my predecessor, former Congressman Jim Weaver. In the article, printed in the Register Guard, Wednesday, July 26, 2000, Weaver discusses his encounters with Governor Bush's newly appointed running-mate, Dick Cheney. I recommend Jim Weaver's well- crafted, thought-provoking article to my colleagues for its insight and importance. Cheney Has Shown He's Soft in Nature, but Tough on Issues (By Jim Weaver) Dick Cheney and I were members of the House Committee on the Interior in the 1970s and 1980s. We sat opposite each other on the upper tier of the committee bench, he on the Republican side, and I on the Democratic side. Cheney was always cordial, even gentle in demeanor, willing to discuss any matter and listen to other views. I grew to like him and conferred with him often. While writing a book on the U.S. House of Representatives, he discovered that an ancestor of mine, James B. Weaver, had conducted a filibuster in the House in 1888 on the Oklahoma Land Bill. As I, too, had filibustered a bill, he told me the story. I appreciated his personal consideration. So it always surprised me that when decisions were actually made in the committee, Cheney was hard as steel, and uncompromising on the hard-fought issues over forest preservation, revision of the 1872 mining act, grazing on public lands or nuclear power. He was three or four places down from the ranking Republican on the committee, but there was little question as to who controlled the Republican side--Dick Cheney. This very strong, highly intelligent, determined man kept the Republicans unanimous against any environmental incursions the Democrats attempted. The chairman of the committee at that time was Mo Udall of Arizona. He bent over backward to conduct the committee fairly and to give the Republicans every parliamentary opportunity. His reward, offered by Cheney and his cohorts, was constantly and vehemently to accuse him and the Democrats of tyranny and railroading our bills. I only wish we had done so. After the accident at the Three Mile Island nuclear plant in 1979, a House committee was chosen to conduct an investigation. I was named chairman and Cheney vice chairman. It was an intensive inquiry and resulted in many revelations. Cheney was an admirable person to work with. Conscientious and penetrating, Cheney helped make the inquiry the best of the presidential, Senate and House investigations. But when the committee reported its findings, Cheney wrote a minority report to accompany my majority report. My report blamed the accident on the extreme technological complications of nuclear power while Cheney, as did the other reports, blamed ``human error.'' Cheney concluded with the NRC estimate that the accident would take a year and $60 million to repair. My report predicted 10 years and $1 billion dollars. Ten years later and more than a billion dollars spent, they were still cleaning up the last remnants. I think Cheney would make an outstanding Republican vice president; actually, an outstanding Republican president. If I were a dyed in the wool Republican, I could not find a better person to vote for. But I am not a Republican.

Mr. DeFAZIO

Mr. DeFAZIO. Mr. Speaker, I rise in strong support of House Concurrent Resolution 372, recognizing the 210th anniversary of the United States Coast Guard. Mr. Speaker, the U.S. Coast Guard is the premier maritime safety agency in the world. Its broad array of missions protect our coastlines and our communities. These missions include inspecting commercial vessels for compliance with all safety requirements; search and rescue; oil pollution prevention and response; maintaining all of the Federal aids-to-navigation on our navigable waterways; icebreaking in the Arctic, Antarctic, and domestic waterways; drug and migrant interdiction; and enforcing the fisheries laws in our 200 mile Exclusive Economic Zone. For 210 years, the Coast Guard has defended our Nation in wars and armed conflicts--whether protecting our ships from pirates in the 1800's to landing on the beaches of Normandy on D-Day. The men and women of the Coast Guard have driven their ships and aircraft through hurricanes to save mariners in distress, and directed the cleanup efforts of the disasters involving the Exxon Valdez and New Carissa. The people of the United States owe a debt of gratitude to the men and women of the Coast Guard. While most Americans sleep soundly in their beds, the members of the Coast Guard are risking their lives to save ours. The Coast Guard conducts over 65,000 search and rescue missions annually, saving more than 5,000 lives, and $1.4 billion in property. Therefore, it is entirely appropriate for the Congress of the United States, as representatives of the people, to express our gratitude to the Coast Guard by passage of House Concurrent Resolution 372. Therefore, Mr. Speaker, I urge my colleagues to strongly support passage of House Concurrent Resolution 372, commemorating the 210th anniversary of the establishment of the United States Coast Guard.

Mr. DeFAZIO

Mr. DeFAZIO. Mr. Speaker, I have no further requests for time, and I yield back the balance of my time.

Mr. DeFAZIO. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I am rising on the issue of S. 1629, the Oregon Land Exchange Act. As the gentleman from Utah (Mr. Hansen) stated, it is a bill that has come to us from the Senate sponsored by Senators Smith and Wyden and the gentleman from Oregon (Mr. Walden) who has done yeoman's work on this issue in the House. The issue has been before the House for nearly a year. There have been a series of administrative actions that go back several years regarding these proposed exchanges. In October of 1999, the subcommittee held a hearing on the issue, and in April of this year the bill was marked up. Before the hearing and before the markup, I and my staff made extensive inquiries of knowledgeable environmental groups throughout Oregon to see what concerns they might have regarding the legislation and what changes they might like to see. What I heard back, for the most part, was the benefits of the exchange, particularly along the north fork of the John Day. No one, until quite recently, came forward with specific objections to specific parcels involved as a small subset of the entire exchange. It is unfortunate that those concerns were raised so late in the process. In general, the legislation identifies isolated parcels of publicly owned lands in eastern Oregon. I have spent some time looking at the maps; and it is quite a dispersed ownership, much of it really public islands surrounded by private land, in particular a large block of lands along the north fork of the John Day River, which is critical salmon habitat, and other private inholdings to allow the Forest Service and the BLM to block up their holdings in the public arena. The bill is supported by Oregon Trout, the Native Fish Society, and the governor of Oregon. I contacted the Oregon Natural Resources Council, the Oregon Natural Desert Association, and the Sierra Club during consideration. They did support the Forest Service preferred alternative for the Northeast Oregon Assembled Land Exchange, which is part of the legislation. It is very complex legislation and includes other exchanges. As I said earlier, I have heard some concerns very recently from a number of people who reside in the district of the gentleman from Oregon (Mr. Walden) raising concerns. In general, I am skeptical of land exchanges. When I was first here, I opposed a land exchange proposed by the chairman of the Committee on Resources, joining with the gentleman from California (Mr. Miller) and very few others on the committee to oppose that, because we did not believe the public was getting full value. I have, in my district, put great emphasis in scrutinizing any proposals for even minor land exchanges. This is a large exchange; and all I can do in part is rely upon the governor, the advocates, like Oregon Trout and Native Fish Society, the environmental groups that are the most knowledgeable of the area about the benefits, and try to weigh those benefits against what I am told are some detrimental exchanges on isolated parcels. Unfortunately, I believe that at this point we cannot fix what minor problems might result, and we are threatened with harvest along the north fork of the John Day this summer or next fall if this exchange does not go forward. The owners there have withheld harvest for 3 or 4 years, and now this year went in and actually marked trees along the north fork, and I do know of the benefits and I am very familiar with that area. The ranking member has recently revealed a report from the GAO which goes to the issue of land exchanges and problems with land exchanges; and I am hopeful that my efforts and the efforts of other members of the Oregon delegation, the resource agencies involved, and the interest groups that have scrutinized this have prevented any of those problems from recurring in this particular legislation. Mr. Speaker, I would again, although unfortunately it comes very late in the process, I would enter the letter from the Friends of Rudio Mountain, Inc., into the Record at this point in time raising their concerns about that particular aspect of the exchange: Friends of Rudio Mountain, Inc. Forest Grove, OR, July 20, 2000. Representative Peter DeFazio, RHOB, Washington, DC. Dear Peter DeFazio: We are writing today with new and extremely important information that you should be informed of regarding the Oregon Land Exchange Act of 2000 (HR2950). The following new information gives the public moral grounds to ask you to stop all legislation regarding The Oregon Land Exchange Act Of 2000 (HR2950). Our first concern is that misleading information has kept the public in the dark. We want to make it clear that Prineville District BLM officials have told us from the start that the Congressional Trade (HR2950) followed PHASE 1 of the NOALE Land Exchange. We were told that the maps in the FEIS for the NOALE were the same as the maps that you are using for The Oregon Land Exchange Act. This is not the truth. Two weeks ago we received a set of the maps that outline the lands involved in (HR2950). Our group and many other special interest groups were not aware that entirely different maps were involved or that certain public lands of such high value in critical areas were being disposed of in (HR2950) until we reviewed maps 1 through 6. Had we known that the Congressional Trade was based on a different set of maps and that it intended to dispose of parcels of public land not set for disposal in PHASE 1 of NOALE we would have offered stormy opposition and this Bill would most likely have died at the onset. We are certain that if the true clear picture would have been laid out the Bill would not have had any supporters. Please note that on July 19th Jessica Hamilton from Congressman David Wu's office spoke with one of the public officials that has been involved from the start with the NOALE exchange and (HR2950). During her conversation with him he told her the same misleading information that we had been led to believe. He firmly told her that he was not aware of any Rudio Mountain land at all that was involved in the Congressional Bill and that he was certain that no public land defined as Phase 2 Disposal Parcels in the FEIS were involved in (H.R. 2950). On this same date he told us that he was not aware that the Congressional Bill maps were different from those of the PHASE 1 maps of the FEIS, furthermore, he told us once again the same information that he had told to Jessica Hamilton. He kept insisting it was true until we told him that we had documents in our possession to prove him wrong. He firmly denied sending us anything at which point we reminded him that we had a map that he had outlined for us and other correspondence from him and that we were going to the State Director regarding certain matters. At this point he admitted that several thousand acres of PHASE 2 Rudio Mountain public land had been put into the Congressional trade because it contained Old-Growth Timber. He told us not to worry about it because the BLM was opposed to disposing of any Rudio Mountain land and even if Congress passed the Bill the BLM definitely would not allow those parcels to be traded away and that the NEPA process had not been completed on those parcels so BLM could not get rid of them even if Congress passed the Bill. Talk about being led down the garden path! Shortly after this conversation this public official put in a call to Jessica Hamilton to clarify certain matters. I have not had the opportunity to discuss the matter with Jessica to see exactly what he clarified. Our second major concern is that the public lands involved do not meet the requirements of the Congressional Bill. (H.R. 2950) is defeating the purpose for land trades in Oregon. The agencies are not disposing of isolated parcels of public land as they would like the public to believe. (H.R. 2950) will dispose of large parcels of public land that are adjacent to other public land, for example, (SEE MAP 4), T12S R28E, Parcels 117B--139A--139B, (consisting of about 1500 acres), T12S R29E, Parcel 145, T12S R30E, Parcel 150A, (about 600 acres surrounded by public land and adjoining a major highway), to name just a few examples. Parcels like this have been targeted because they contain Old-Growth Timber. These public lands are currently being utilized by the public at large. To call them isolated or hard to manage is extremely misleading. In this same locale many parcels that are in fact isolated with no public access have been skipped over as they contain no Old-Growth Timber. In some areas small portions of large blocks of public land have been marked for disposal. Why would the agencies want to break apart large parcels when they could offer parcels that are truly small, isolated and separated from larger tracts. The answer is crystal clear, they contain no Valuable Old-Growth Timber. Our third concern is that we have been involved in public meetings with the agencies regarding the NOALE exchange from the very beginning. The original EIS and FEIS for the NOALE exchange concerned only public lands that were marked for PHASE 1 of the process but it also listed lands that were being considered for a PHASE 2 exchange. PHASE 2 public land consisted mainly of high value Old-Growth habitat and critical wildlife habitat in the vicinity of Rudio Mountain. We have corresponded with the BLM regarding Rudio Mountain Lands for a number of years. BLM officials have always assured us both verbally and in writing that they would never trade any land in the vicinity of Rudio Mountain unless they could gain private land on Rudio Mountain that would block up to other public land that would benefit the public. Some time ago former Congresswoman Elizabeth Furse and former Senator Mark Hatfield forwarded over 100 statements from individual people to the BLM addressing this very issue. The BLM had a firm agreement with us that no Rudio Mountain public land would ever be traded for land anywhere else except for on Rudio Mountain. In (H.R. 2950) over 8000 acres of the very best public land on Rudio Mountain will be forfeited in exchange for logged over land hundreds of miles from Rudio Mountain. Attached hereto as EXHIBIT A is a letter that we sent to Jessica Hamilton to assist her in researching our concerns. EXHIBIT A outlines some of the parcels of public land that we are concerned with. Will you stand by while hundreds of people are deceived through this Congressional Land Exchange. Will you stand by and let some of the most beautiful, untouched land in the State of Oregon be put into the control of a third party facilitator whose only interest is to reap outlandish profits by placing the public land into the hands of private parties and the Old-Growth Timber into the hands of private industries. Rudio Mountain public lands contain some of the best critical wildlife habitat and outstanding Old-Growth left in the State of Oregon. This valuable habitat in harmony with other things is responsible for producing and maintaining some of the best quality and wholesome wildlife in the Western States. We can not afford to lose these treasures. We have walked these lands and forests for decades and our love for this land, for the forests and the wildlife is overflowing. To take such simple yet important pleasures from us would be heartbreaking. Once again we ask you to stand with us and stop this land exchange. In closing this letter we have two requests. First, please consider the facts that we have set forth, second, please take one minute to look deep into our hearts before you make any decisions for our future and those that will come after us, who shall one day yearn to walk through the special places where we walk today. Thank you. Very truly yours, Kathleen R. Kidwell, For Friends of Rudio Mountain, Inc., & Others In Opposition To The Land Exchanges. Mr. Speaker, I reserve the balance of my time.

Mr. DeFAZIO

Mr. DeFAZIO. Mr. Chairman, I demand a recorded vote and, pending that, I make the point of order that a quorum is not present.

Mr. DeFAZIO. Mr. Chairman, I yield myself the remaining time. There is one issue and one issue only before the House: shall the taxpayers provide a special subsidy to Western ranchers. Approximately $7 million a year is spent on the wasteful, ineffective, indiscriminate killing of wildlife in the Western U.S. and, as we heard from my colleague from Oregon last night, it is not working. Maybe we should try something else. After more than a half century, there are more coyotes, more dispersed. They do not understand coyotes' biology. Kill the alphas and the rest of them go disperse and breed. They kill nontarget species. Here is a golden eagle. Well, here are some predators right here. We can see these little guys have definitely been feasting on sheep. No, they have not been, but they were killed too. This program should end. There is no effect on public safety, despite what we hear from others. Bird strikes at airports, rabbit are dangerous to humans, brown tree snakes, dusky geese, endangered species, all of those could continue to be controlled by a nearly $30 million-a-year budget for the animal damage control folks. Farmers and ranchers would be free to hire or themselves use any legal method of control for any threats to their flocks. Why send a Federal employee to take care of their private interests? I cannot call a Federal employee to take care of the possums, deer and raccoons who transgress on my property, probably from the nearby BLM. They will not come. But if I was a rancher, they would. Now, why is this exclusive subsidy made available? Do not be cowed by the howls of protests from the privileged few who are enjoying this subsidy. Ignore the false sense of their red herring arguments and stop fleecing the taxpayers here today. Vote for this amendment.

Mr. DeFAZIO. Mr. Chairman, I yield such time as she may consume to the gentlewoman from Texas (Ms. Jackson-Lee). (Ms. JACKSON-LEE of Texas asked and was given permission to revise and extend her remarks.)

Mr. DeFAZIO. Mr. Chairman, if the gentleman will again yield, I agree that the Fish and Wildlife Service and Wildlife Services should use the most humane methods in the conduct of their responsibilities under the Endangered Species Act.

Mr. DeFAZIO. Mr. Chairman, it is not my intent to impede recovery programs for threatened or endangered species administered by the Fish and Wildlife Service.

Mr. DeFAZIO. Mr. Chairman, will the gentleman yield?

Mr. DeFAZIO

Mr. DeFAZIO. Mr. Chairman, I yield 2 minutes to the gentleman from Florida (Mr. Deutsch).

Mr. DeFAZIO. Mr. Chairman, if I could inquire on the time, I yielded myself 3 minutes, the gentleman from Oregon (Mr. Blumenauer) 3 minutes, the gentleman from New Hampshire (Mr. Bass) 2 minutes, and the gentlewoman from Maryland (Mrs. Morella) 3 minutes. How did we get that one-half minute in there?

Mr. DeFAZIO. Mr. Chairman, I yield 3 minutes to the gentlewoman from Maryland (Mrs. Morella).

Mr. DeFAZIO. Mr. Chairman, I yield 3 minutes to the gentleman from Oregon (Mr. Blumenauer).

Mr. DeFAZIO. Mr. Chairman, I yield 2 minutes to the gentleman from New Hampshire (Mr. Bass).