Pete Domenici

Mr. DOMENICI

Mr. DOMENICI. Mr. President, I ask unanimous consent to speak for up to 10 minutes.

Mr. DOMENICI. Mr. President, I note the presence of Senator Kennedy on the floor. I want to say to Senator Kennedy and to Senator Frist-- who is not on the floor, but I have seen him personally--that I thank both of them for their marvelous efforts in having included in the health care bill, which was recently reported out, SAMSHA, and about five or six provisions contained in a Domenici-Kennedy bill regarding the needs of those in our country who have serious impairment from mental illness. We did not expect to get those accomplished this year. We thank them for it. We know that we will have to work together in the future to get them funded. But when we present them to the appropriators, they will understand how important they are. I thank the Senator.

Mr. DOMENICI

Mr. DOMENICI. Mr. President, I spoke yesterday for a bit and in the Energy Committee today for a bit about energy policy. I guess I believe so strongly about this issue that I want to speak again perhaps from a little different vantage point. I would like to talk today about the ``invisible priority'' that has existed in the United States for practically the last 8 years. The ``invisible priority'' has been the supply of reliable affordable energy for the American people. Let me say unequivocally that we have no energy policy because the Interior Department, the Environmental Protection Agency, and the Energy Department all have ideological priorities that leave the American consumer of energy out in the cold. Making sure that Americans have a supply of reliable and affordable energy, and taking actions to move us in that direction, is the ``invisible priority.'' And that is giving the administration the benefit of the doubt. ``Not my job'' is the response that the Interior Department of the United States gives to the energy crisis and to America's ever-growing dependence upon foreign oil and, yes, I might say ever-growing dependence upon natural gas. The other alternatives, such as coal, nuclear, or other--``not my job.'' It is also the response that the Environmental Protection Agency gives when it takes actions, promulgates rules, and regulations. Their overall record suggests--let me repeat-- ``not my job,'' says the Environmental Protection Agency. The Interior Department, making drilling for oil and natural gas as difficult as possible, says, ``Don't bother us.'' ``It is not my job'', says the Department of Interior. The Environmental Protection Agency's job is to get a good environmental policy based on sound science and be the enemy of an ideologically pure environmental policy at the expense of providing energy that we need. My last observation: In summary, the ``Energy Department'' is an oxymoron. It is anti-nuclear but pro-windmills. I know many Americans ask: what is the Senator talking about? Nuclear power is 20 percent of America's electricity. At least it was about 6 months ago. We have an Energy Department for this great land with the greatest technology people, scientists and engineers, that is pro-windmills and anti- nuclear. I will say, parenthetically, as the chairman of the Energy and Water Subcommittee on Appropriations, the last 3 years we put in a tiny bit of money for nuclear energy research and have signed it into law as part of the entire appropriation, and we do have a tiny piece of money to look into the future in terms of nuclear power. It is no longer nothing going on, but it is a little bit. Boy, do we produce windmills in the United States. The Department of Energy likes renewables. All of us like them. The question is, How will they relieve the United States from the problem we have today? I guess even this administration and even the Vice President, who is running for President, says maybe we have a crisis. Of course we have a crisis. The Federal Government spent $102 million on solar energy, $33 million on wind, but only $36.5 million on nuclear research, which obviously is the cleanest of any approach to producing large quantities of electricity. Sooner or later, even though we have been kept from doing this by a small vocal minority, even America will look back to its early days of scientific prowess in this area as we wonder how France is doing it with 87 percent of their energy produced by nuclear powerplants. With all we hear about nuclear power from those opposed, who wouldn't concede that France exists with 87 percent or 85 percent of its energy coming from nuclear powerplants? They do, and their atmosphere is clean. Their ambient air is demonstrably the best of all developed countries because it produces no pollution. We have an administration that, so long as we had cheap oil, said everything was OK, and we couldn't even seek a place to put the residue from our nuclear powerplants, the waste product. We couldn't even find a place to put it. We got vetoes and objections from the administration. Yet there are countries such as France, Japan, and others that have no difficulty with this problem; it is not a major problem to store spent fuel. Let me move on to wind versus nuclear. Nuclear produced 200 times more electricity than wind and 2,000 times more than solar. As I indicated, solar research gets three times more funding than nuclear research and development. The wind towers--we have seen them by the thousands in parts of California and other States, awfully strange looking things. They are not the old windmills that used to grace the western prairie. They have only two prongs. They look strange. We are finding wind towers kill birds, based on current bird kill rates. Replacing the electric market with wind would kill 4.4 million birds. I am sure nobody expects either of those to happen. However, more eagles were killed in California wind farms than were killed in the Exxon Valdez oil spill. The Energy Department calls wind a renewable energy policy, and the Sierra Club calls wind towers the Cuisinart of the air. I will discuss the SPR selloff. For almost 8 years, energy has been the ``invisible priority'' for the U.S. Government led by Bill Clinton and the current Vice President. Incidentally, the Vice President, who is running for President, had much to do with this ``invisible priority;'' he was the administration's gatekeeper on almost all matters that dealt with the Environmental Protection Agency and almost all matters that dealt with the Department of the Interior in terms of the production of energy on public land. Let me talk about the SPR selloff for a minute. Treasury Secretary Summers warned President Clinton that the administration's proposal-- now decision--to drive down energy prices by opening the energy reserve would be ``a major and substantial policy mistake.'' He wrote the President, and Chairman Greenspan agreed, that using the SPR to manipulate prices, rather than adhering to its original purpose of responding to a supply disruption, is a dangerous precedent. Summers added that the move would expose us to valid charges of naivete, using a very blunt tool to address heating oil prices. American refineries today have to make so many different kinds of fuel because of environmental protection rules that no one would believe they would be capable of doing. They were running at 95 percent of capacity last week. We have not built a new refinery in almost 20 years. What has happened: America builds no energy, no refining capacity, because it is too tough environmentally to do that and live up to our rules and regulations. Yet you can build them in many other countries, and people are surviving and glad to have them--at least, new ones-- because they are doing a great job for their economy and producing the various kinds of products that come from crude oil. Yet America, the biggest user in this area, has built none. If we take the supply of SPR out of SPR, it will still need to be refined into heating oil. I have just indicated there is hardly any room because there is hardly any capacity. The invisible policies wait ominously on the horizon, boding serious problems. We have found that natural gas produced in America, drilled for by Americans, offshore and onshore, is the fuel of choice. Now we are not even building any powerplants that use coal as the energy that drives them because it is too expensive, too environmentally rigorous, and nobody dares build them. They build them elsewhere in the world but not in America. We use natural gas, the purest of all, and say fill your energy needs for electricity using natural gas. Guess what happened. The price has gone to $3.35 per cubic feet; 6 months ago it was $2.16. And the next price increase is when the consumers of America get the bills in October, November, and December for the natural gas that heats their house and runs their gas stove because we have chosen not to use any other source but natural gas to build our electric generating tower when hardly any other country in the world chooses that resource. They choose coal or some other product rather than this rarity of natural gas. Now 50 percent of the homes in America are dependent upon natural gas. The companies that deliver it are already putting articles in the newspaper: Don't blame us; the price is going up. Who do you blame? I think you blame an administration that had no energy policy and for whom energy was an ``invisible priority.'' It was an ``invisible priority'' because the solutions lay within EPA, the Interior Department, and an Energy Department that was paralyzed by an attitude of anti-production of real energy. That is the way they were left by Hazel O'Leary, the first Secretary of Energy under this President, and Mr. Pena; and Bill Richardson is left with that residue. Fifty percent of homes are heated by natural gas. I predict the bills will be skyrocketing because we are using more and more of it because we have no energy policy, and American homeowners are the ones who will see that in their bills. When they start writing the checks with those increases, they are going to be mighty mad at someone. Don't get fooled. The candidate on the Democratic side, if the election is not over by the time that happens, will blame those who produce natural gas for they are related to oil and gas production. Would you believe, as we stand here today, 18 percent of the electricity generated in America is produced by natural gas? Oh, what a predicament we have gotten ourselves into because we have an invisible energy policy ruled over by an Environmental Protection Agency that never asked a question about energy and an Interior Department that takes property and land of the United States out of production. I want to tell you a couple of facts. As compared to 1983, 60 percent more Federal land is now off limits to drilling. On October 22, 1999, Vice President Gore, in Rye, NH, said: I will do everything in my power to make sure there is no new drilling. Then we have ANWR. It is off limits. Offshore drilling is off limits. We could double our domestic oil supply if we opened offshore drilling. Yet we will have more and more transports hauling in refined and crude oil products, creating more and more risk for our ports where they are bringing it in. Yet we maintain we cannot do any more drilling because it is too dangerous. The multiple-use concept in our public domain is, for all intents and purposes, practically dead. We have 15 sets of new EPA regulations. Not one new refinery has been built since 1976. Now we have soaring gasoline prices. I understand my time is up. Would Senator Kennedy mind if I take 1 more minute? I will wrap it up. I will close with one more fact, and I will put the others in the Record. Californians usually spend about $7 billion a year in electricity. The price spikes were so dramatic that they spent $3.6 billion in 1 month, the month of July--half of what they annually spend was spent in 1 month. Why? California is a big electricity importer. There is growing demand. Silicon Valley companies are big energy users. Demand is up 20 percent in the San Francisco area over last year but no new capacity has been built. Environmental regulations make building a new plant nearly impossible in California. I predicted exorbitant home heating bills this coming winter even while we were experiencing the gasoline price spikes in the Midwest. It used to be that one type of gasoline was suitable for the entire country. There are now at least 62 different products. One eastern pipeline handles 38 different grades of gasoline, 7 grades of kerosene, 16 grades of home heating oil and diesel. Four different gasoline mixtures are required between Chicago and St. Louis--a 300 mile distance. As a result of these Federal/local requirements, the industry has less flexibility to respond to local or regional shortages. We have 15 sets of new environmental regulations: Tier II gasoline sulfur, California MTBE phaseout; blue ribbon panel recommendations; regional haze regs; on-road diesel; off road diesel; gasoline air toxics; refinery MACT II; section 126 petitions; gasoline air toxics; new source review enforcement initiative; climate change; urban air toxics; residual risk. The MTBE groundwater contamination issue is going to make the gasoline supply issue even more complicated and reduce industry's flexibility to meet demand. S. 2962 includes a wide array of new gasoline requirements that are both irrelevant and detrimental to millions of American motorists. Legislation mandates the use of ethanol in motor fuel. This would cut revenues to the highway trust fund by more than $2 billion a year. The U.S. Department of Energy has projected that S. 2962 would increase the consumption of ethanol in the Northeast from zero to approximately 565 million gallons annually. Frankly, Mr. President, no energy policy is better than this administration's energy policy.

Mr. DOMENICI

Mr. DOMENICI. Mr. President, I am pleased to make these remarks while the occupant of the chair is the distinguished junior Senator from Arizona because these remarks have to do with the Baker-Hamilton report. The Secretary of Energy asked these two men--one an ex-Senator, one an ex-House Member--to compile a report with reference to the national weapons laboratories and the missing hard drive incident. These hard drives were apparently taken out, put back, and found behind a copy machine, and everybody is wondering what happened. I will talk about this report. I urge--and I do not think I have to--the occupant of the chair to read it soon. It is short and to the point. The findings of this Baker-Hamilton report confirm what some of us suspected and have said in one way or another many times about the science and security at our National Laboratories. The report concludes that the vast majority of employees of our National Laboratories are ``dedicated, patriotic, conscientious contributors to our national security and protectors of our national secrets.'' The report states, however, that these individuals, the ones who are responsible for the viability of America's nuclear deterrent, have been hounded by ongoing investigations and security procedures that render them incapable of achieving their mission. That is a very powerful statement. This commission is very worried about how the morale of the scientists at our National Laboratories, in particular Los Alamos, is affecting their ability to do their momentous work. They go on to say that while new security measures and processes continue to be imposed, the authors found that X Division--the one that was involved in the last episode--is: ambiguously lodged in a confused hierarchy, subject to unclear and diffuse authority, undisciplined by a clear understanding of accountability for security matters, frightened or intimidated by the heightened sense of personal vulnerability resulting from the efforts to address recent security lapses. These are hard-hitting, accurate findings. The scientists at our laboratories need clear lines of authority and accountability. The Department of Energy needs to simplify the lines of command and communication. The report overwhelmingly endorses the creation of the National Nuclear Security Agency--which we are beginning to understand exists, and we are going to begin to understand what it means when we say the NNSA--and the need to reinforce ``the authority of the NNSA Administrator.'' The NNSA Administrator must have more authority, not less. General John Gordon, the general who is in charge, is in fact the head man and is an excellent person to lead this agency and implement the organizational structure needed for the job. They reached some other very important conclusions on the current environment at our national laboratories: Demoralization at Los Alamos is dangerous; that poor morale breeds poor security. There is a severe morale problem at the labs, and they cite four or five general conclusions: ``Among the known consequences of the hard-drive incident, the most worrisome is the devastating effect on the morale and productivity at the laboratory. . . .'' They also say that ``. . . (the) current negative climate is incompatible with the performance of good science.'' The report states, ``It is critical to reverse the demoralization at LANL before it further undermines the ability of that institution both to continue to make its vital contributions to our national security and to protect the sensitive national security information.'' They recommend ``urgent action (is required) . . . to ensure that LANL gets back to work in a reformed security structure . . .'' Incidentally, they conclude that while they laud the Secretary of Energy for trying to create more security with the appointment of a security czar and the like, as some of us said when it was created, it fails to do a job; and remember the Senator from New Mexico saying we are creating another box but it is not going to have clear lines of authority, it is not going to have accountability, people are still not going to be in a streamlined process of accountability. I said it my way, they said it another way, but we concluded the same thing. There are many other conclusions in this brief report. I urge all of my colleagues to read this report and reflect on their conclusions. They call for a review of security classifications and procedures, security upgrades at LANL, need to deal with cyber security threats, and adopt or adapt ``best practices'' for the national labs. Then, under ``Resources'' they underscore: Provide adequate resources to support the mission of the national laboratories to preserve our nuclear deterrent, including the information security component of that mission. Mr. President, I yield the floor and suggest the absence of a quorum.

Mr. DOMENICI

Mr. DOMENICI. I thank the Chair.

Mr. DOMENICI. Mr. President, parliamentary inquiry: How much time do I have?

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

Mr. DOMENICI

Mr. DOMENICI. Mr. President, I would like to talk about two things today. The first is energy policy--or America without an energy policy. Let me say with as much certainty as I can muster that we have no energy policy because the Interior Department of the United States, the Environmental Protection Agency of the United States, and the Energy Department all have priorities, and they are ideological priorities that put the production of energy for the American people last. There is some other objective, motive, or goal that is superior to the production of oil and gas and the development of an energy policy that uses coal. Do you think Americans know today that we have not built a coal- burning powerplant in America in 12 years? Do you think Americans know that the only thing we are doing to increase our electric capacity so they can have light, electricity, and everything else in their homes is to build a powerplant with natural gas? We have built five--all with natural gas. And we sit back and wonder why natural gas has gone from $2 to $5.63 in 9 months. Let me be the first to predict that the next crisis will be when natural gas goes even higher, because we have made it the only fuel we can use--under what? Under the policies of the Environmental Protection Agency, which has their own rules, their own regulations, and their own ideologies. I have not heard them say once we have adjusted an environmental concern because we are worried about America's energy policy. I wonder if the occupant of the chair has ever heard the Environmental Protection Agency say we must be doing something wrong because there are no new refineries being built in America--none, zero, zip. The greatest nation on Earth has not built a new refinery to convert crude oil into the products of everyday use for years. We have, in fact, closed 38 refineries to environmental concerns--albeit they are small. We own millions of acres of land. That is why I say the Interior Department is part of our energy policy. But they have different concerns. They never consult on energy issues. So what do they do? They lock up millions of acres of land that could produce oil or natural gas and say, We are not going to touch them. Why don't you ask Americans? Why don't you ask Americans whether they want to be more beholden to the cartel or whether they would like to use a little bit of their property to go in and drill an oil well? Do it with whatever protection you want for the environment. Let's have a serious debate about ANWR, an American piece of real estate that is beautiful and something we should protect. It has many millions and millions of barrels of American oil that could be produced by American companies for American use. And every time it is brought up on the floor of the Senate, the environmentalists in America consider that even to take a little, tiny piece of that huge refuge and go see how many millions of barrels of oil are there would be the biggest environmental disaster ever. But who is worrying about Americans who want to use oil and have it refined so they can drive their automobiles? Who would like to use the coal we have in abundance and make sure we use it as cleanly as possible, and build powerplants so we don't run out of electricity and so we don't have brownouts in California?--Brownouts which some are predicting today because the policies that could have affected the production of electricity for California have not been judged on the basis of our energy needs, they have been based only upon environmental purity. That is why the United States of America is the most difficult piece of geography occupied by humans in the world in terms of establishing in America a powerplant. It is the most difficult and expensive place in the world to build a powerplant with the greatest engineers and scientists around. We can't build one because there is no agreement between the Environmental Protection Agency and the public holders of land to work together. The question is never asked: What would be good for American energy policy? Let me move on. Let me make sure we understand. We don't have someone making energy policy, or setting the rules, or saying to the American private sector: Here are the rules; go work under them. We have none because Interior, EPA, and Energy all have priorities, and none of their priorities makes the production of oil and gas and the development of our coal high priorities. The Interior Department is making the drilling for oil and natural gas as difficult as possible. EPA, rather than devising good environmental policy based on sound science, it has become the enemy. This is due to an ideological, pure environmental policy at the expense of providing energy we need. This is not understood by most Americans. Yet we have an Energy Department. Sometimes I feel sorry for the Secretary of Energy because there is no authority for them to do much about anything. But we do have a strange oxymoron. We have an Energy Department that is anti-nuclear power and pro-windmills to produce electricity and sources of electrical power for America. I might repeat, we have an Energy Department that is pro-windmill and anti-nuclear. I give Secretary Richardson credit for moving slightly under the prodding of Congress to do a little bit of research in future years on the use of nuclear power, which may end up falling on America as being the only thing we can do in 15 or 20 years that is environmentally clean by the time we get around to explaining it as safer than most any other source of energy. Yet only recently do we have an energy policy that would consider anything that has to do with nuclear power now or for the future. Treasury Secretary Summers warned the President that the administration's proposal--now a decision--to drive down energy prices by opening the Government's emergency oil reserves--and I quote-- ``would be a major and substantial policy mistake.'' Summers wrote the President--and Greenspan agreed--that using the Strategic Petroleum Reserve to ``manipulate prices rather than adhering to its original purpose of responding to a supply disruption is a dangerous precedent.'' You see, fellow Senators, we have established a Strategic Petroleum Reserve in the afterglow of some foreign country saying, ``We are cutting off your oil supply.'' And, even though it was a small amount, they said, We are cutting it off--and we were dependent on it. Lines were forming at our gasoline stations. Do you recall? In the State of New York, the lines were forming at 5:30 in the morning, to my recollection. People were so mad at each other that, if they thought somebody went ahead of them in line--in one case in eastern America, they even shot the person who went ahead of them in the line. We said we ought to find a place to put crude oil so that if anybody stops the flow of crude oil to America, or engages in some kind of war, or mischief that denies us our energy, we will have a certain number of days of supply in the ground for use. Mr. President, that is a lot different than an America which is now without any energy policy. We say the prices have gone too high, even though everything I have said contributed to it: An Interior Department that won't let you produce oil, an Environmental Protection Agency that has no reason to consider whether their rules and regulations are so stringent, too stringent, beyond reasonable, whether in the area of refineries, in the area of building a powerplant, in the area of producing more energy through wells that we drill, their policies have nothing whatever to do with energy needs of our country. With all that piled on America, we have an election coming up and the oil prices are a little too high. We would like to take a little bit of that oil out of the reserve and put it on the market and use it. Secretary Summers added that the move ``would expose us to valid charges of naivete, a very blunt tool to address heating oil prices.'' That is from the Secretary of the Treasury a couple of weeks ago. Of course, over the weekend, a spokesman for this administration and for the Gore campaign got on the national networks and said: The Secretary is with us. Of course, he works for the President. They all sat down and said: What is the worse thing that can happen to the Gore campaign? Clearly, they all said if these oil prices keep going up. It is not a question of, can we produce heating oil; our refineries are at the maximum production already. This release of additional barrels from the reserve can do nothing for that. It is just that the price is so high that a lot of poor people in northeastern America who still use heating oil, and those in the West are not aware how many, but there are millions; they are not going to be very happy. That is the issue. That is why the petroleum reserve is being used. The truth is, in our country it behooves people like myself and many others to at least make sure the public understands why we are in the mess we are, who got us there, what was done to make it so that it wouldn't happen the way it has. All the answers come down to the fact that nobody was worried so long as the prices were cheap, so long as those OPEC countries were producing more than was needed in the world, keeping the prices down at $10 or $11 or $12 a barrel. While we lived happily and merrily, month by month, with that situation, firing up our great economic recovery, at the same time we were destroying millions of little stripper wells that were producing three and four barrels per well. They closed down because the price was too cheap. Even today, we are producing less oil than we were 3 or 4 years ago because we destroyed oil production capacity when we let it go too low, while we were exhilarated with the fact that the cartel was cheating on itself and the price of oil was coming down. We didn't bother to find out how much that was affecting New Mexico in an adverse manner. When it went up in price, we went to them and said: Now it ought to come down; it is too high. I don't imagine for the first few months they greeted us with too much joy or willingness to help us after we sat by and watched it go so low without any concern for what happened to them. Refineries were running at 95 percent last week. To take a supply out of SPR, it would still need to be refined into heating oil. Obviously, I have explained that isn't the issue. The issue will be the price. We don't have enough refining capacity to take the SPR and add to the supply of heating oil. What else does this using the reserve as it was not intended by Congress do? It sends the wrong signal to the private industry in America. If I am in the business of storing heating oil, and the Federal Government starts stockpiling, I cut my reserve and I assume somebody will come in here asking us to prohibit them from cutting their own reserves. Clearly, they cannot keep their storage to maximum capacity while the government is building its own capacity to compete-- something we won't figure out until it is too late. Then somebody will say: Why did this happen? They should not have cut back on their reserves. I indicated natural gas prices were going up, up, and away. This fantastic fuel is $5.35 per 1,000 cubic feet; 6 months ago it was $2.16. We are talking about oil and derivatives of oil because of the cartel. From $2.16 to $5.35 is not because of any cartel; it is because of the huge demand for natural gas. When the demand gets so big the production can't go up so fast, what happens? The price goes up. That is a big signal and a sign to us. No one seems to be concerned in this administration that we haven't built a powerplant to generate electricity for the growing demand, such as in California. We haven't built a new powerplant of any significance because the only thing we can build it with is natural gas. We cannot build it with coal, even though they were being built around the world. America's environmental laws are out of tune with America's energy needs. They haven't been tuned to be concerned about America's energy future. It is just ideological--as pure as you can get it in terms of environmental cleanliness. That is it for America. Inventories are 15 percent below last winter's level and 50 percent of America's homes are heated with natural gas. They are beginning to see it in their bills. Clearly, America has almost no competitor for that. We don't have an abundance of electricity to take its place. In fact, brownouts are expected in many parts of the country because we are underproducing what we need by way of electricity. Natural gas fires 18 percent of the electric power. I am sure there are many sitting back saying: Isn't that neat? We haven't had to worry about nuclear. We don't have to clean up coal to the maximum and use some of it to produce electricity in America. We just build natural gas powerplants. We used to forbid it. I think the occupant of the Chair remembers that during the crisis we said don't use natural gas for powerplants. We took that out. Here goes America. Next crisis, will there be enough natural gas or will the price be so high? It will not be just to those who are burning it for powerplants. It will be in 50 percent of the homes in America. They will start asking: Where is an energy policy with some balance between energy sources instead of moving all in one direction because all we were concerned about was the environment? Compared to 1983, 60 percent more Federal land is now off limits to drilling. I spoke generally of that. Now I will be specific. As compared with 1983, there is 60 percent more Federal land that is off limits for drilling. On October 22, 1999, Vice President Gore said in Rye, NH: I will do everything in my power to make sure there is no new drilling. I guess what we ought to be working on is when will we no longer need any crude oil, which is refined into gasoline and all those wonderful products? Because, if you brag to America that you will do everything in your power to make sure there is no new drilling, we have to ask the question: Where are we going to get the oil? I will move to another item that I spoke of generally a while ago, a great American reserve of crude oil called ANWR, up in Alaska. I believe any neutral body of scientists--geologists, engineers--could go up there and take a look and report to the Congress and the people of this country that ANWR could produce oil for America without harming that great natural wilderness. I am absolutely convinced that is the case. Yet you cannot believe the furor that attends even a mild suggestion that we ought to do something such as that. Perhaps somebody will even quote what I just said, saying that I am for destroying the ANWR, that I am for destroying that wilderness area, that natural beauty. No, I am not. I am for trying to put together a policy that increases our production of crude oil so we can at least send a signal to the world that we do not want to increase our dependence. We want to do something for ourselves, and wouldn't it be nice if there were a stable oil market so Americans could get involved in production here at home, hiring Americans? It would be owned by Americans if that happened in ANWR. What a stimulus for American growth in oil-patch-type activities. OCS, offshore drilling--off limits. There is no question we could double our domestic supply if we could open up some of the offshore drilling areas. Clearly, the more we have to import crude oil, the more the environmental risk in getting it here in tankers where something could happen to them. The amount keeps going up. Yet right in various of our bays and ocean fronts, there is natural gas in abundance. And there exist wells where we have proved we know how to do it. But somebody says: Oh, my, no more of that. That's environmentally degrading. What are we going to talk about when Americans say we cannot afford the natural gas because the only thing we are fueling powerplants with and using in America is natural gas? We have it out there in the oceans and in some bays--yet we would not dare touch it? There are 43 million acres of forest land that are off limits for roadbuilding, thereby making exploration and production impossible. The Kyoto agreement would envision doubling the use of natural gas, thus doubling electricity costs. No policies address either consequence. Multiple use, which we used to think was a great thing for our public lands, is only words today. Multiple use means if there are natural resources that can help Americans and can help prosperity and help us grow, that ought to be used along with recreation and other things. That has almost left the vocabularies of those in high places who manage our public lands. There are 15 sets of new EPA regulations that affect the areas we are talking about. Not one new refinery has been built since 1976. This administration's energy policy has, in my opinion, been in deliberate disregard of the consequences on the consumers' checkbook and their standard of living and the way people will be living in the United States. This summer we had soaring gasoline prices and that left motorists in America--as prices soared they got more and more sore, but they didn't know who to get sore at. The prices are still pretty high. Other consequences that have been deliberately disregarded are the electricity price spikes California experienced this summer. Californians usually spend about $7 billion a year in electricity. This spike was so dramatic they spent $3.6 billion in the month of July, only half of what they spent annually before that. That is a great question to be asked--why? California is a big electricity importer. They have ever-growing demands because of Silicon Valley. These companies use a lot of electricity and a lot of energy. Demand was up 20 percent in the San Francisco area last year, but there is no new capacity. Environmental regulations make building a new powerplant in California impossible. That may be what they want. But I wonder where they are going to get the energy? Where are they going to get the electricity when nobody else has any to spare? I predict in a very precise way that home heating bills this coming winter will be exorbitant, even while we are experiencing the gasoline spikes in the Midwest. It used to be one type of gasoline was suitable for the entire country. You remember those days. There are now 62 different products--one eastern pipeline handles 38 different grades of gasoline, 7 grades of kerosene, 16 grades of home heating oil and diesel, 4 different gasoline mixtures are required between Chicago and St. Louis, just a 300-mile distance. As a result of these Federal and local requirements, industry has less flexibility to respond to local and regional shortages. There are 15 sets of environmental regulations--tier II gasoline sulfur, California MTBE phaseout, blue-ribbon panel regulations, and regional haze regulations--on-road diesel, off-road diesel, gasoline air toxics, refinery MACK II, section 126 petitions, and there are 6 more. S. 2962 includes a wide array of new gasoline requirements that are both irrelevant and detrimental to tens of millions of American motorists. Legislation mandates the use of ethanol in motor vehicles that would cut revenues to the highway trust fund by $2 billion a year as one side effect. The U.S. Department of Energy has projected this one bill would increase the consumption of ethanol in the Northeast from zero to approximately 565 million gallons annually. I have taken a long time. I have given a lot of specifics and some generalities. But I conclude that it is not difficult to make a case that we do not have an energy policy; that the U.S. Government has not been concerned enough about the future need for energy of our country, be it in natural gas, in the products of crude oil, how do we use coal, how do we make electricity. Frankly, things were very good. They were good because the cartel was selling oil in abundance. While America was enjoying its economic success story, a big part of that was because the cartel was having difficulty controlling its own producers. We lived happy and merrily on cheap oil as our production went down and we sought no other alternatives, and our demand grew as did our use of natural gas. Americans and American consumers are left where, in many cases, they are going to be put in a position where they can't afford the energy that will permit them to live the natural lifestyle that is typically American--living in a home and having in it electric appliances and whatever else makes for a good life, with an automobile, or maybe two, in the driveway. It will not be long that the voices from those situations, those events in America, those kinds of living conditions will be heard loud and clear. There will not be enough of a Strategic Petroleum Reserve to solve their problems because we have not cared enough to do something about it. I yield the floor.

Mr. DOMENICI

Mr. DOMENICI. Mr. President, I rise today to briefly speak about the passage of the children's health bill and the Substance Abuse and Mental Health Services Administration reauthorization bill. I would like to begin by congratulating Senators Frist and Kennedy for their work on this important piece of legislation and to tell them how pleased I am the package contains a number of provisions from the Mental Health Early Intervention, Treatment, and Prevention Act of 2000, S. 2639. Today we do not even question whether mental illness is treatable. But, today we recoil in shock and disbelief at the consequences of individuals not being diagnosed or following their treatment plans. The results are tragedies we would have prevented. Just look at the tragic incidents at the Baptist Church in Dallas/ Fort Worth, the Jewish Day Care Center in Los Angeles, and the United States Capitol to see the common link: a severe mental illness. Or the fact that there are 30,000 suicides every year, including 2,000 children and adolescents. It was not too long ago that our Nation decided we did not want to keep people with a mental illness institutionalized. Simply put, it was inhumane to simply lock these individuals up without even using science to consider other alternatives. Make no mistake, our Nation still has these same individuals with mental illness, we just do not have a very good way to deal with these individuals. Many of these individuals formerly locked up are now our neighbors taking the proper medication to manage their illness. However, our Nation simply does not have an understanding of what happens when individuals stop taking their medications because sadly many of these highly publicized incidents of mass violence all too often involve an individual with a mental illness. When these incidents occur, my wife and I watch with horror on television and we often turn to each other and say that person was a schizophrenic or that individual was a manic depressive. Some of you may have seen the recent 4 part series of articles in the New York Times reviewing the cases of 100 rampage killers. Most notably the review found that 48 killers had some kind of formal diagnosis for a mental illness, often schizophrenia. Twenty-five of the killers had received a diagnosis of mental illness before committing their crimes. Fourteen of 24 individuals prescribed psychiatric drugs had stopped taking their medication prior to committing their crimes. With this in mind I am especially pleased that with the passage of this package we are taking a very positive step forward to address the problem I have mentioned. The provisions adopted from the Mental Health Early Intervention, Treatment, and Prevention Act of 2000 will serve to give more people the ability to identify when someone might be suffering from mental illness and pose a threat to themselves or others. I think it's important that we begin to find ways to get these people help before we find them involved in a violent tragedy and I would like to briefly touch upon several of those provisions I believe will take us a long way towards that goal: A grant program will provide training to teachers and emergency services personnel to identify and respond to individuals with mental illness, and to raise awareness about available mental health resources. Another grant program creates Emergency Mental Health Centers that will serve as a specific site in communities for individuals in need of emergency mental health services, and will also provide mobile crisis intervention teams. The Jail Diversion Demonstration will create 125 programs to divert individuals with mental illness from the criminal justice system to community-based services. And finally, the Mental Illness Treatment Grant will provide integrated treatment for individuals with a serious mental illness and a co- occurring substance abuse disorder with an emphasis placed on individuals with a history of involvement with law enforcement or a history of unsuccessful treatment. In closing, I really believe we have a historic opportunity to become preventers of serious, serious acts of violence before they happen and I look forward to working with my colleagues in the future to continue addressing this important issue.

Mr. DOMENICI

Mr. DOMENICI. Mr. President, I am pleased to rise today in support of the conference report accompanying H.R. 4516, the Legislative Branch and Treasury-general government appropriations bill for FY 2001. The pending conference agreement combines two of the 13 annual appropriations bills into one bill, which provides $34.9 billion in new budget authority and $30.9 billion in new outlays to fund the operations of the Legislative Branch, and the Executive Office of the President, and the agencies of the Department of the Treasury, including the Internal Revenue Service (IRS), Customs Service, Bureau of Alcohol, Tobacco and Firearms, the General Services Administration, and related agencies. When outlays from prior-year budget authority and other completed actions are taken into account the conference agreement totals $33.0 billion in BA and $32.5 billion in outlays for fiscal year 2001. The final bill is $145 million in BA and $145 million in outlays below the most recent section 302(b) allocation for these two subcommittees filed on September 20th. The final bill also has a revenue effect for two provisions--repeal of a provision in the Balanced Budget Act of 1997 that temporarily increases federal employee retirement contributions by 0.5 percent; and repeal of the telephone tax enacted in the late 1800's to help finance the Spanish-American War. A loss of revenue totaling approximately $4.8 billion is estimated for fiscal year 2001, and additional amounts in the outyears. I commend the subcommittee chairman and ranking members for bringing this important measure to the floor. I urge the adoption of the bill and ask for unanimous consent that the Budget Committee scoring of the bill be printed in the Record at this point.

Mr. DOMENICI

Mr. DOMENICI. Mr. President, I am pleased today to be introducing a bill authorizing the next logical step in the City of Santa Fe's Regional Water Management and River Restoration Strategy. This bill allows the Secretary of Interior to participate in the design, planning and construction of the Santa Fe, New Mexico, regional water management and river restoration project, consisting of the diversion and reuse of water, the conversion of irrigation uses from potable water to reclaimed water, and the use of reclaimed water to restore Santa Fe River flows. Limited water resources in the Santa Fe region and increased demands threaten the sustainability of surface and groundwater supplies. The Regional Water Management and River Restoration Strategy is a comprehensive, collaborative plan to responsibly and sustainability address the region's water supply needs. The full program goals are to return flow to the river, protect riparian habitat and the traditional, cultural and religious uses of the water. The Santa Fe area has been working overtime to determine how best to improve its water supply. I have been proud to help fund its efforts. The FY99 Energy and Water Appropriations Act provided $450,000 and the FY 2000 Energy and Water Appropriations Act included $750,000 to support the Santa Fe Regional Water Management and River Restoration initiative to address long-term water supplies in the greater Santa Fe area. That funding allowed the Bureau of Reclamation to continue and complete environmental studies required under the National Environmental Policy Act for the comprehensive plan to improve Santa Fe's regional water supplies through a reuse program and restoration of the Santa Fe River watershed. I was also pleased to gain approval for $750,000 to support the project in the Senate FY01 VA/HUD bill to assist in the planning, coordination and development of restoration projects for the Santa Fe River under a comprehensive, watershed-based implementation program. The funding, provided through EPA's Environmental Programs and Management program, would help the WMRRS reuse treated effluent to augment streamflow, recharge the regional aquifer, and enhance the riparian habitat and recreational uses within the Santa Fe River corridor. The Santa Fe Water Management and River Restoration Strategy is a cooperative partnership among Santa Fe County, the city of Santa Fe, and the San Ildefonso Pueblo. The city of Espanola, the Eldorado Water and Sanitation District, and the Northern Pueblos Tributary Water Rights Association (representing San Ildefonso, Nambe, Pojoaque and Tesuque pueblos) are also involved. In June of this year, a $601,000 grant was awarded to the project following my request in the FY 2000 Veterans' Affairs, Housing and Urban Development and Independent Agencies (VA-HUD) Appropriations Bill. The funding was awarded through the Department of Housing and Urban Development's Economic Development Initiative (EDI) program. This funding represents federal support for the effort to rehabilitate the Santa Fe River, a project that is one aspect of an overall initiative to address the future of water in the Santa Fe area. Those funds will be used for urban river restoration planning, source water protection planning, and development of a comprehensive trails and open space plan. This authorizing legislation takes the water management strategy to the next phase. The plan has already been backed by a local and regional commitment of at least $2.7 million for the multi-year program. The sponsors of the program have requested this authorization to provide additional financial support for this project. This legislative authority will make the project eligible for future funding as the project is developed, as well as federal cooperation with the surrounding pueblos. I hope that this body can take swift action on the worthy legislation.

Mr. DOMENICI

Mr. DOMENICI. Mr. President, section 218 of H. Con. Res. 290 (the FY 2001 Budget Resolution) permits the Chairman of the Senate Budget Committee to make adjustments to the allocation of budget authority and outlays to the Senate Committee on Armed Services, provided certain conditions are met. Pursuant to section 218, I hereby submit the following revisions to H. Con. Res. 290: [By fiscal years; in millions of dollars] ------------------------------------------------------------------------ ------------------------------------------------------------------------ Current Allocation to Senate Armed Services Committee: 2001 Budget Authority..................................... $50,139 2001 Outlays.............................................. 50,129 2001-2005 Budget Authority................................ 267,298 2001-2005 Outlays......................................... 266,974 Adjustments: 2001 Budget Authority..................................... 50 2001 Outlays.............................................. 50 2001-2005 Budget Authority................................ 400 2001-2005 Outlays......................................... 400 Revised Allocation to Senate Armed Services Committee: 2001 Budget Authority..................................... 50,189 2001 Outlays.............................................. 50,179 2001-2005 Budget Authority................................ 267,698 2001-2005 Outlays......................................... 267,374 ------------------------------------------------------------------------

Mr. DOMENICI

Mr. DOMENICI. Parliamentary inquiry: Is there time now remaining to the Republicans to speak?

Mr. DOMENICI. Mr. President, I ask unanimous consent to be permitted to speak for an additional 10 minutes.

Mr. DOMENICI

Mr. DOMENICI. Mr. President, in order to complete our legislative agenda in the 106th Congress, our leadership has put forth a very simple concept. For the upcoming new fiscal year that begins in about 12 days, lets devote 90 percent of the surplus to debt reduction. And the remaining 10 percent can be used for tax cuts and final spending bills. This is a very reasonable and straightforward proposal, and I compliment our leadership both in the House and the Senate for making the proposal to the President last week. I don't quite understand why the White House and some Democrats are so negatively excited about this proposal. For some reason, the White House and congressional leaders are having a great deal of difficulty understanding a very simple proposal. Indeed, our distinguished minority leader, even said he ``smelled a rat'' in this proposal. Why is it so difficult for the White House and congressional Democrats to understand this simple proposal. Maybe it is because they are really not serious about their own rhetoric about debt reduction. Maybe this is consistent with their blocking not once, but six times our efforts to pass the Social Security lock box legislation now on the calendar. I am hopeful we will do that, with their help perhaps, in a way we can all agree upon. But we will do it, and we will do it under this 90- 10 formula. For my friends at the White House and across the aisle let me take just a minute to explain this proposal. We first start with the current CBO estimate of the budget surplus for next year--that number today is $268 billion. We are even using the Democrats favorite definition of the surplus, a definition that assumes that appropriate accounts grow by inflation between 2000 and 2001--the so-called ``inflated baseline.'' This is not my preferred definition, but it is the most liberal one available from the Congressional Budget Office. To this $268 billion estimate, we adjust for the net effect of the supplemental that became law after CBO made its summer update. Because the supplemental shifted some spending around, the surplus next year increases slightly to $273 billion. Now, we set aside the Social Security and Medicare HI trust fund balances--we fully protect Social Security and Medicare as we promised--those two accounts make up about $197 billion of our debt reduction next year. We also set aside $48 billion of the non-Social Security surplus for debt reduction. So we set the Social Security and the Medicare surplus aside, and then we set aside $48 billion more--a rather historic event because that is out of the non-Social Security surplus. Forty-eight billion dollars of that will go to debt reduction. In total, $245 billion of next year's surplus is set aside for debt reduction. This represents 90 percent of the total surplus next year-- just do the arithmetic--leaving $28 billion in outlays for the end of the session spending and tax legislation. This $28 billion should allow us to finish our work expeditiously. It would allow us to finish the appropriated bills that are still pending, fund needed priorities for hospital and health providers, for health research, aid to States and localities that have suffered this summer's fires and droughts, and other important and basic needs. The $28 billion should also allow us to provide minimal tax relief to American small business and families. This will be a smaller package than we have done before. We will ask the President of the United States whether there is any tax bill that we can send him that he will sign. We believe this is a winner, one attached essentially to the amendment that cleared the floor when we did our minimum wage bill. It was my amendment. I offered it along with Don Nickles and others to spread the minimum wage increase over 3 years and to provide small business and individuals with the kind of tax relief almost everyone agreed we should do. This is the least we can do for the taxpayers, as I see it, following both a vote of the marriage tax penalty and the death. This will not, as assumed by the administration, cause irreparable damage to the economy. The Secretary of the Treasury came all the way over here to have a press conference because they were terribly concerned about this 90 percent to debt service and 10 percent to finish our work idea--the 90-10 button that is being worn around here. I don't understand how it will cause any kind of damage. How quickly we forget the words of the Federal Reserve Chairman, who said the first thing we should do with a budget surplus is retire the debt. I can only conclude that the democratic roadblock to this very simple proposition must be, first, they do not want to provide tax cuts when taxes are at the highest level percentage of the American economy since the Second World War; second, they do not want to apply the surplus to debt reduction. They must have a very large bushel of expenditures they want to make at the end of the year that exceed the $28 billion, which is the residue of the 90-10 that will be around for tax cuts, for add-ons to appropriations, and for those extreme needs we have in the Medicare area with reference to nursing homes, HMO plus, and the like. Those will fit within the $28 billion because we are speaking of outlays--I hope everybody understands that--in the year 2001. Maybe this should not come as a surprise to anyone. The President of the United States has put forward an expansive and expensive set of budget proposals, a budget plan that even the Washington Post called a ``lopsided budget.'' The Financial Times article called it ``a masterpiece of central government planning.'' Maybe these are the real reasons why my friends across the aisle cannot grasp the simple consent: 90 percent of the total surplus going to retiring the debt, and 10 percent being available to finish our work on appropriations, on the other expenditures, and some tax proposals that should clear. I am prepared to talk to this issue with anyone, anywhere, and to produce the numbers. This is very close to what will happen if we take it right, watch our step, do what is needed, but not extravagantly spend money. If we try some very simple but needed tax cuts, which should challenge even this President in terms of his veto pen--and obviously we are all aware of fixing some Medicare needs, whether they are nursing homes that need some additional response from the Federal Government, whether it be the HMO plus, whether it be the home care, whether it be rural hospitals. Essentially, in the first year they do not cost that much money. They do a considerable amount over 5, but actually we believe they will fit within this $28 billion. That is the 10 percent of the 90-10 formula. I hope everybody will take a look at it. I think it is a good way to go. I yield the floor, and I suggest the absence of a quorum.

Mr. DOMENICI

Mr. DOMENICI. Madam President, section 220 of H. Con. Res. 290 (the FY2001 Budget Resolution) permits the Chairman of the Senate Budget Committee to make adjustments to the allocation of budget authority and outlays to the Senate Committee on Energy and Natural Resources, provided certain conditions are met. Pursuant to section 220, I hereby submit the following revisions to H. Con. Res. 290: Current Allocation to Senate Committee on Energy and Natural Resources: FY 2001 Budget Authority...............................$2,429,000,000 FY 2001 Outlays.........................................2,373,000,000 FY 2001-2005 Budget Authority..........................11,570,000,000 FY 2001-2005 Outlays...................................11,364,000,000 Adjustments: FY 2001 Budget Authority..................................200,000,000 FY 2001 Outlays...........................................200,000,000 FY 2001-2005 Budget Authority...........................1,100,000,000 FY 2001-2006 Outlays....................................1,100,000,000 Revised Allocation to Senate Committee on Energy and Natural Resources: FY 2001 Budget Authority................................2,629,000,000 FY 2001 Outlays.........................................2,573,000,000 FY 2001-2005 Budget Authority..........................12,670,000,000 12,464,000,000utlays.................................................

Mr. DOMENICI

Mr. DOMENICI. Madam President, section 314 of the Congressional Budget Act, as amended, requires the chairman of the Senate Budget Committee to adjust the appropriate budgetary aggregates and the allocation for the Appropriations Committee to reflect amounts provided for emergency requirements. I hereby submit revisions to the 2001 Senate Appropriations Committee allocations, pursuant to section 302 of the Congressional Budget Act, in the following amounts: ------------------------------------------------------------------------ Budget authority Outlays ------------------------------------------------------------------------ Current Allocation: General purpose $600,296,000,000 $592,773,000,000 discretionary.......... Highways................ .................... 26,920,000,000 Mass transit............ .................... 4,639,000,000 Mandatory............... 327,787,000,000 310,215,000,000

Mr. DOMENICI

Mr. DOMENICI. Mr. President, I rise today to join Senator Hatch in introducing the ``Skilled Nursing Facility Care Act of 2000.'' We can all take a certain amount of pride in the bipartisan Balanced Budget Act of 1997. However, it should come as no surprise that legislation as complex as the Balanced Budget Act (BBA), as well as its implementation by the Health Care Financing Administration, has produced some unintended consequences that must be corrected. Heeding this advice, Congress made a down payment last year on the continued health of the skilled nursing facility benefit by passing the Balanced Budget Refinement Act of 1999. While I believe this was a very good first step, I am convinced the bill we are introducing today is urgently needed to assure our senior citizens continue to have access to quality nursing home care through the Medicare program. The transition to the Prospective Payment System (PPS) for Skilled Nursing Facilities (SNFs) contained in the BBA is seriously threatening access to needed care for seniors all across the country. For instance, almost 11 percent of nursing facilities in the United States are in bankruptcy. In my home State of New Mexico the number is nothing short of alarming, nearly 50 percent of the nursing facilities are in bankruptcy. I simply do not know how we can stand by in the face of this crisis and watch our seniors continue to lose access to nursing home care. My belief is only buttressed in light of the fact that as the baby boomers grow older we will be needing more nursing homes, not less. We must have a strong system of nursing home care not only now but, in the future. With time having already run out on many nursing home operators and quickly running out on others, I believe Congress must act immediately. In New Mexico, there are currently 81 nursing homes serving almost 7,000 patients, and as the bankruptcies have proven, the current Medicare payment system, as implemented by HCFA, simply does not provide enough funds to cover the costs being incurred by these facilities to care for our senior citizens. For rural States like New Mexico, corrective action is critically important. Many communities in my State are served by a single facility that is the only provider for many miles. If such a facility were to close, patients in that home would be forced to move to facilities much farther away from their families. Moreover, nursing homes in smaller, rural communities often operate on a razor thin bottom line and for them, the reductions in Medicare reimbursements have been especially devastating. The legislation we are introducing today would go a long way to build upon the steps we took last year with the Balanced Budget Refinement Act in restoring stability in the nursing home industry. The Hatch- Domenici Care Act of 2000 would increase reimbursement rates through two provisions. First, for a 2-year period, the bill eliminates the one percentage point reduction in the annual inflation update for all skilled nursing facility reimbursement rates and raises that same update by four percent. I believe this provision is a matter of simple fairness because we are merely attempting to accurately keep reimbursements in line with the actual cost of providing care. Second, the bill directs the Secretary of Health and Human Services to reexamine the annual inflation update, the so-called market basket index, using actual data to determine the necessary level of update. As a result of the reexamination, the Secretary may adjust the inflation update accordingly. I look forward to again working with Senator Hatch to pass this critical legislation.

Mr. DOMENICI

Mr. DOMENICI. Mr. President, I rise today to join Senator Hatch in introducing the ``Skilled Nursing Facility Care Act of 2000.'' We can all take a certain amount of pride in the bipartisan Balanced Budget Act of 1997. However, it should come as no surprise that legislation as complex as the Balanced Budget Act (BBA), as well as its implementation by the Health Care Financing Administration, has produced some unintended consequences that must be corrected. Heeding this advice, Congress made a down payment last year on the continued health of the skilled nursing facility benefit by passing the Balanced Budget Refinement Act of 1999. While I believe this was a very good first step, I am convinced the bill we are introducing today is urgently needed to assure our senior citizens continue to have access to quality nursing home care through the Medicare program. The transition to the Prospective Payment System (PPS) for Skilled Nursing Facilities (SNFs) contained in the BBA is seriously threatening access to needed care for seniors all across the country. For instance, almost 11 percent of nursing facilities in the United States are in bankruptcy. In my home State of New Mexico the number is nothing short of alarming, nearly 50 percent of the nursing facilities are in bankruptcy. I simply do not know how we can stand by in the face of this crisis and watch our seniors continue to lose access to nursing home care. My belief is only buttressed in light of the fact that as the baby boomers grow older we will be needing more nursing homes, not less. We must have a strong system of nursing home care not only now but, in the future. With time having already run out on many nursing home operators and quickly running out on others, I believe Congress must act immediately. In New Mexico, there are currently 81 nursing homes serving almost 7,000 patients, and as the bankruptcies have proven, the current Medicare payment system, as implemented by HCFA, simply does not provide enough funds to cover the costs being incurred by these facilities to care for our senior citizens. For rural States like New Mexico, corrective action is critically important. Many communities in my State are served by a single facility that is the only provider for many miles. If such a facility were to close, patients in that home would be forced to move to facilities much farther away from their families. Moreover, nursing homes in smaller, rural communities often operate on a razor thin bottom line and for them, the reductions in Medicare reimbursements have been especially devastating. The legislation we are introducing today would go a long way to build upon the steps we took last year with the Balanced Budget Refinement Act in restoring stability in the nursing home industry. The Hatch- Domenici Care Act of 2000 would increase reimbursement rates through two provisions. First, for a 2-year period, the bill eliminates the one percentage point reduction in the annual inflation update for all skilled nursing facility reimbursement rates and raises that same update by four percent. I believe this provision is a matter of simple fairness because we are merely attempting to accurately keep reimbursements in line with the actual cost of providing care. Second, the bill directs the Secretary of Health and Human Services to reexamine the annual inflation update, the so-called market basket index, using actual data to determine the necessary level of update. As a result of the reexamination, the Secretary may adjust the inflation update accordingly. I look forward to again working with Senator Hatch to pass this critical legislation.

Mr. DOMENICI

Mr. DOMENICI. I wouldn't.

Mr. DOMENICI. Mr. President, I thank Senator Moynihan for those kinds words and for his last observation. Perhaps Mr. Shapiro said it more eloquently than I. I consider it one of the most important events, and I described that early on as I see it. I would add one observation. I ask the Senator if he shares this. Frankly, I think it is very important, when China is granted PNTR, when it becomes a member of WTO, that they not leave with the American people in the next few years, that they not let activity on their part happen which would let Americans think that they are discriminating against the purchase of American goods and services. If we are competitive in this world, whether it be in services or in products or in agricultural products, we don't expect China to control that through its Government but rather leave it to the free and open market or, indeed, Americans will look at this as a sham.

Mr. DOMENICI. Our companies are telling us they can compete. I know of many areas they can compete, and they are not competing because of trade barriers, because of tariffs, and because of the selectivity of some of the governmental entities in terms of who they pick and choose. That part is a little risky on their end. It may be a small amount of product, but it could be a very big wave if they are not careful.

Mr. DOMENICI. I thank the Chair.

Mr. DOMENICI. Mr. President, this bill before us is a decisive step toward normalizing trade relations with China. Chairman Roth has characterized this vote, the one we will make on this bill, as the most significant vote we will take this Congress. I agree. While we will be concerned with many more issues that seem more important to individual Senators, and certainly we will be looking after our parochial interests in our sovereign States as we work as Senators--and that is all very important--but when we look at America and what she stands for in the world as it is evolving and developing, the final vote on this measure is probably the most significant vote we will take this year and maybe in many years. Senator Roth, I repeat, said that. I agree wholeheartedly. I am quite sure the tenor of Senator Moynihan's suggestions--I have not been privileged to hear them here with the Senate--would agree with that. This is a very important issue. This is the one vote that will be heard around the world. This is the one vote which recognizes that countries must play by the same rules in a globalized market if the market is to be efficient and function properly. We hear so much talk about what is happening to the world-- globalization. International trade, as part of globalization, must be efficient and effective. This is the one vote that will do a great deal to encourage democracy for one in five people living on this Earth. I say encourage democracy because I truly believe this is the one vote that invites China to be our trading partner and, at the same time, determines whether American manufacturers, farmers, and service industries will get the benefit of trade and of an agreement pursued and negotiated by three different American Presidents. They cannot all be wrong. As a matter of fact, they were all right. China is joining the WTO and have implemented a lot of reforms in order to be eligible. Furthermore, it has made promises to do certain other things. So that the U.S. can benefit from this new WTO members' market, Congress needs to grant permanent normal trade relations to China. It just took us a long time to understand and to work our way to this day when granting China permanent trade relations is finally before us. On the subject of PNTR for China, Chairman Greenspan said: History has demonstrated that implicit in any removal of power from central planners and broadening of market mechanisms . . . is a more general spread of rights to individuals. Such a development will be a far stronger vehicle to foster other individual rights than any other alternative of which I am aware. That is precisely what globalization and international trading--China trading with America--have a chance to do. Exposure to democracy and capitalism, information, and telecommunications and communication technology will increasingly influence the course of global affairs, without any question. Imagine what Internet success means to a one-party, authoritarian state such as China. Even if China's economic growth and military modernization appear to be threatening, our relationship with China will evolve within the context of a very different world, a world increasingly reliant on information to achieve economic growth, prosperity, and jobs. Anyone who has gone to China recently or, for that matter, watched recent television programming regarding what is going on with the labor force in China will know that Chinese men and Chinese women will move to get good jobs. They are already moving from the countryside to the cities without any retribution. They are smiling. They are taking risks because they see the opportunity to get a good paycheck. Make no bones about it, they want jobs that pay them money so they can move up their standard of living in this world. That force, if turned loose in China, will change China forever. In particular, since China does not have the kind of central government the Soviet Union had, although we have from time to time called them both Communist countries, they are certainly very different in terms of the ability to control people and whether or not the central government really has as much control or is as despotic as the government that was managed by a small oligarchy in the Soviet Union. I am not suggesting the trade, the Internet and computers will topple authoritarian structures in China overnight, but I do believe that for many years information control was equivalent to people control, but information control is quickly becoming more and more impossible. Exposure to our economic system through trade, telecommunications, and the Internet will encourage strides toward freedom, in my humble opinion. For every argument that China is a risk to America's future, I argue that China trading with America is a move in a direction of freedom that takes away from the risk of the future, takes away from the risk of a centralized powerful Chinese Government being dangerous to the world. Not that they are not, not that they could not be, but I submit it will be more and more difficult for that to occur as free trade permeates the cities and suburbs of China and the people who live there and the businessmen who will prosper by it. I offer that while it is not at issue, education is another catalyst for economic freedom and democracy. Chinese students attending American universities is an important part of any effective economic trade and foreign policy for the United States. I know there are a lot of young Chinese coming to American universities to be students here, and living our way of life while they get educated. I asked my staff to find out just how many. Fifty thousand Chinese students from China now, not Taiwan--attended American universities last year. The number grows by the thousands every year. The important thing is that these students are not studying math and science and culture by remote control. They are doing this by being physically present in American cities across this land. I submit, the more the young people of China experience America and are exposed to American freedom and watch capitalism work in America, the more likely it becomes that the future of China will be subtly but unalterably influenced in a positive direction. Whether these Western-educated, young Chinese people are involved in politics or business--I would add in science or math or physics--their views about democracy and the free market economics will not be controlled or dominated by the so-called party. Over the long run, experience and exposure will have a direct and significant impact on mainland China. And the leaders know what is happening. The Chinese leaders do not attempt to stop their students from coming to the greatest universities in the world and get educated in the best way in the world. In fact, sometimes I think they must be aware that there is a better way than what they have in their country, and to some extent they may think a better way is substantially the free way, the American way. China is a big, big market. It has been estimated that the PNTR would increase U.S. exports to China by about $13 billion annually and will grow every sector of this economy. China is densely populated. It is a country in which one in five people alive today live. Think of that. This is largely an open, untapped market, both for the mind and for substances of trade. I will comment on my State, which is not looked at as an exporting State, but direct exports from New Mexico to China totalled $235 million in 1999; and adding indirect exports through Hong Kong, brings our total to about $320 to $350 million. We often hear the expression ``everything from soup to nuts'' to describe something very comprehensive, something widespread. An apropos variation of this colloquialism is ``China-New Mexico trade covers everything from chips to cheese.'' Agricultural tariffs will be cut by more than half. New Mexico has, believe it or not--and this is not because Pete Domenici is of Italian extraction, whose mother and father came to New Mexico as immigrants-- the largest mozzarella cheese plant in all the world. The mozzarella cheese for all of those delis they have in New York, where does it come from? New Mexico. And so is the case for China; it comes from New Mexico. They are one of our large importers of that cheese, and many other cheese products made in our State. Incidentally, I say to Senator Moynihan, while time has been passing, New Mexico has been growing in terms of dairy cows and as part of American milk production. Everybody thinks dairy product production is a Wisconsin issue, but New Mexico is now ninth among all of the sovereign States in terms of the production of dairy products. That is why it turns out we are working with China. PNTR and China joining the WTO will be a big help for the New Mexico producers of milk products, as the Chinese people get the opportunity to compare the comparative culinary merits of Domino's, Pizza Hut, and even Papa Johns. I know my friend from New York is not here working on this agreement because he wants to see more Pizza Huts in China, but I think he would not disagree that the United States has an array of export opportunities from State to State. When you add all those up, they do go as far as the ingredients that go into a pizza, all the way to the ingredients and intellectual knowledge that goes into making fancy computer chips or to make anything that China makes and sells to the world. The tariff on agricultural products will drop. It will drop from 50 percent to 10 percent on cheese products; from 35 percent to 10 percent for lactose and whey, both of which are produced in large quantities in the States of the United States that have many dairy cows and much milk production. It is not well known that Intel Corporation manufactures flash memory microchips in its Rio Rancho plant in New Mexico, right next to Albuquerque. Flash memory chips are used in cellular phones, digital cameras, personal computers. The flash memory chips are sent to Shanghai for assembly and testing before they are shipped to customers worldwide. In 2000, Intel earned over $500 million in revenue from the flash memory chips manufactured in New Mexico and tested in China. Both China and New Mexico added profit to the product as it moved its way to market. If we do not grant PNTR status to China, it is quite obvious that somebody else will take our place in each of these markets that I have described for my State in terms of being a manufacturer of products. Obviously, someplace else in the world can decide, if we are going to leave that trade barrier up, instead of reducing it 50 percent and 30 percent, as I have described, to get the business and the profit margin, where a foreign business could have the tariff rate that is not being adjusted. China is discovering the necessity for cellular phones. I am talking about a product with which we are all becoming very familiar. There were 40 million cellular phones in China last year. This year, the estimate is 70 million. By 2003, China has projected to have more cell phones in use than any other country on the globe. You can understand that because, you see, to some extent cellular phone use in America was inhibited by poles, with telephone lines, and telephones that are attached to them. We had that before cellular phones were invented. While we think that is great, it is a burden to the growth of cellular phones. Maybe the word ``burden'' is wrong, but at least cellular will not grow as fast. Now enter into a Chinese city where they do not have any telephone poles, and all of a sudden they have cellular phones. They will never build telephone lines. That is why you can say they will go from 40 million to 70 million in 1 year. And who knows thereafter? I guess we could then ask, how many telephone poles could they put in the ground? And how many telephone lines could they put up? While this was not part of my prepared text, I would speculate that they are not doing hundreds of thousands of miles of telephone lines. Why would they? They would just leapfrog to the newest technology. And that is what they began to use. That is what they will use for a long time hereafter. Some have argued that PNTR is an attempt to move manufacturing jobs overseas. That is an argument we have to confront every time we talk about lowering trade barriers with some country in the world. It was the same argument when created the North American Free Trade zone with Mexico, I say to my good friend from New York. Let me illustrate that this is not the case with reference to that contention. Last week, Intel broke ground on a new fabrication plant in Rio Rancho, NM. This expansion had a total cost of $2 billion.

Mr. DOMENICI. It will provide 500 to 1,000 more jobs for New Mexico, highly paid, skilled jobs. Obviously, local businesses will also profit from this expansion. That is what expanded trade with China means to Americans and to New Mexicans. I gave you the example of the $2 billion investment because that investment is made to make one phase of the computer chip that I just described. The other phase will be done in China. Both countries will gain employment and will gain in terms of the production of items that add to our respective gross national products. I do not know which will have more. I would assume they would have a few more workers doing theirs, but we will have the master plant with the most modern technology. The challenge to America in an international global market is the risk that we are taking, and it is singular. It is one. It is that we will not be able to produce the high-tech, high-paying jobs ahead of the rest of world and keep them here. That is really the only challenge. If we can do that, and train our people sufficiently to do that, we will win all the time because we will keep the high-paid, highly skilled jobs here, as we are currently doing vis-a-vis a country such as China or other countries in the world. So granting PNTR to China makes practical economic policy, and it makes good foreign policy. I think they are tied together in this case. I have had an opportunity to talk to Henry Kissinger, who I happen to know quite well from a long, long time ago, when he came to my State with his young son who is now grown up and is involved in the movie production business. He was 13 when he joined his father in my city doing an event for me when I was a young Senator. He talked about the global policy significance, not just its economic significance. I agree. I agree that there is no doubt that this is good trade policy and good foreign policy. Grant PNTR is practical economic policy, but it is also inescapable economic policy because it is impossible, in this era of globalization, for the United States to fence off 20 percent of the world's population and refuse to trade with them on the same trade terms we trade with others. Trade relations with China are not the same as they were in 1979 when China and the United States first resumed diplomatic relations. At that time, all trade flowed through the Chinese Government in the form of state-owned enterprises. Today the private sector accounts for nearly 70 percent of China's output. Maybe I would put it differently because some of these centers of trade, we don't know whether they are private sector, as we understand them, but the nongovernment sector, nonowned by the Government, is nearly 70 percent of the Chinese output compared with 30 percent Government-owned. We understand the Government is not too happy with owning even the 30 percent because they really don't know how to run it. They are seeing what is happening in the competitive world, and big policy discussions are occurring there as to what do they do about that situation. They have observed and have learned what happened to state-owned businesses in the former Soviet states, and they went from total ownership to nobody wanting ownership. There was nothing in between. We have the former Soviet Union, at least Russia, with an economic production machine that has been reduced to almost nothing. We will soon be comparing the total gross domestic product of Russia with one of the smaller countries in Europe. Imagine that.