Byron Dorgan

Mr. DORGAN

Mr. DORGAN. Mr. President, I know we are nearing the end of the day, and there are no further votes today or tomorrow. I will be reasonably brief. I wanted to come to the floor when my colleague, Senator Durbin, and others were speaking about the crisis dealing with AIDS in Africa. I wasn't able to come. I would like to mention that issue for a couple of moments; then I would like to talk about the issue of trade. Today in the Democratic Policy Committee luncheon, we heard from the President's chief adviser on the subject of AIDS policy, and we also heard from Rory Kennedy, who has done a 12-minute documentary film, an award-winning film on the issue of AIDS in Africa. I know my colleagues came out to the floor and spoke on that subject following the Democratic Policy Committee luncheon. It is almost unthinkable what has happened, especially in Africa, with respect to the subject of AIDS. AIDS is a scourge, a plague that is affecting the entire world. It is the first plague since the bubonic plague for which there is no cure, no vaccination, no significant remedy. It is devastating to a number of parts of this world, especially the continent of Africa. Twenty million people have died in Africa from AIDS; 14 million people are currently infected with HIV or AIDS in the continent of Africa. We can't pretend it doesn't matter to us. AIDS is affecting all of the world, including our country. It has a devastating effect on Africa, a devastating impact on the millions and millions of children in Africa who now have no parents, who are left homeless by this scourge called AIDS. We must, as a country, gather with others in the world and combat this deadly plague. We are spending substantial resources to try to find a cure for AIDS. We are also joining with others to try to find ways to educate people about how to stop the spread of HIV and AIDS. Some countries in Africa have begun to take emergency steps and have been successful and are beginning to stem the tide of the spread of AIDS, but it is not nearly rapid enough. These steps need to be taken with much greater urgency, and our country needs to be a part of that with other countries in the international community. I would first like to compliment Rory Kennedy, who appeared today and played for us a 12-minute documentary film that almost takes your breath away when you see on film what has happened to the children and the families in Africa with the decimation of so many families as a result of death from AIDS. We must do more. I compliment my colleagues, Senator Durbin, Senator Bryan, Senator Feinstein, Senator Feingold, and others, many of whom have traveled to Africa in recent months, and my colleagues on the other side of the aisle as well who are involved in this. We must work together to address this issue.

Mr. DORGAN

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

Mr. DORGAN. I will talk for a moment about the issue of the trade deficit that faces this country. I would like to do so, understanding that this country is full of good economic news. And there is a lot of reason for all of us to be optimistic about the future. The good economic news that was described last week--in fact, a week ago this evening--by President Clinton in the State of the Union Address tells us that unemployment is way down and more people are working than virtually ever before in this country; home ownership is up at record levels; inflation is down, down, way down; income is up; the stock market is up. There are so many evidences of good news in our country. Crime rates are also down. There is evidence all around us that things are better in America. All of us feel good about that. We live at a wonderful time in a wonderful country. It is quite a remarkable opportunity all of us have. But we must be vigilant about some storm clouds on the horizon. One of those storm clouds for this country's economy is the burgeoning trade deficit, the imbalance between what we buy from other countries and what we sell to other countries and the resulting deficit that comes from selling less and buying more. The trade deficit in this country is virtually exploding. We have a trade deficit that is higher than any trade deficit ever experienced anywhere on this Earth at any time. Does it matter? Is anybody talking about it? Was it mentioned in the State of the Union Address last week? No. Everyone wants to ignore the fact that we are rolling around pretty well, even though the trade deficit is increasing dramatically, and it somehow doesn't matter. We have wrestled this ``500-pound gorilla'' called the Federal budget deficit, with great pains, over many years. Finally, the scourge called the budget deficit, which was growing like a tumor--growing forever--is now gone. But the budget deficit, while gone, is being replaced by a trade deficit that is growing at an alarming rate. I want to describe part of that today. Everyone talks about the past 107 months of economic expansion. I want to talk about that, but I also want to talk about the trade deficit that could put an end to that economic expansion if we don't do something to resolve this burgeoning deficit. I will put up a chart that describes what we face for a trade deficit. This chart goes back to 1991. It shows the amount of goods and services we export and the amount we import. The red, of course, represents the imbalance, the trade deficit. In January, the Commerce Department announced that the trade deficit had widened to $26.5 billion in November alone, a new monthly record. But a new monthly record was set in 8 of the last 11 months. Our goods and services trade deficit--that is, all goods and services--in 1999 will be $266 billion. That will exceed the previous year's $164 billion by 62 percent. Understand that the goods and services trade deficit will have ratcheted up by 62 percent in 1 year alone. We imported $92 billion worth of goods and exported $59.5 billion in goods in November. Now, if current trends continue, the growth in our international debt will simply not be sustainable. The foreign debt in this country is projected to be $1.7 trillion in 1999. That is not debt we owe to ourselves as the Federal budget deficit was; that is debt owed to foreigners who have a claim to assets in this country--$1.7 trillion. Almost all economists will tell us that is not sustainable and we must do something to address it. When we become more dependent on receiving and retaining foreign capital to finance this imbalance, the day will come when foreigners lose faith in this economy and begin to pull out of our financial markets. When that happens, the value of the dollar will fall, interest rates will rise, corporate profits and stock prices will decline, and then we will have a slowdown in this economy. Senators Byrd and Stevens and I authored legislation, which is now law, creating a trade deficit review commission. That commission is now impaneled and underway, looking into the nature, causes, consequences, and remedies of this trade deficit. They will report their findings in August. In the meantime, this trade deficit escalates. This is the deficit in goods alone--what is called the merchandise trade deficit. This shows what happens to your manufacturing base. This is the most alarming deficit of all--$343 billion--and you can see what has happened to this trade deficit since 1991. It is a dramatic escalation--$343 billion in a single year. It would be useful to look at how our bilateral agreements have contributed to our bilateral goods deficit. Between 1998-99, our merchandise trade deficit with Canada went from $14 billion to $28 billion. Mexico--incidentally, I might mention that, before Congress passed NAFTA--without my vote; I didn't vote for it--we had a trade surplus with Mexico and a relatively small deficit with Canada. NAFTA turned that into a large deficit with Canada and a very large deficit with Mexico. The European Union: You can see what happened in the last year with respect to trade deficits with the European Union. They have increased dramatically. China and Japan: What happened there is almost unforgivable in terms of an economic relationship. China had, in 1999, a merchandise trade deficit of over $60 billion with the United States, up from about $53 billion in the previous year. Japan's is $67 billion. These aren't getting better, they are getting worse. What does all that mean for this country? We just negotiated a trade agreement with China. One of the major issues of great controversy in this Chamber in the coming months will be whether China should be granted permanent normal trade relations, the same as we grant other countries. We will debate that sometime soon. That will be the source of great controversy for a number of reasons. Some in this Chamber will believe the Chinese have not made progress on human rights. Others will perhaps believe the Chinese are not abiding by fair labor standards that we would consider important in this country. Still others will believe China hasn't complied with previous trade agreements. So there will be a substantial amount of debate about this issue. I have been interested in the bilateral trade agreement negotiated with China because we have a very large trade deficit with China. I wonder, when our negotiators negotiated, did they negotiate with some idea that we will bring that into balance? Can we send more goods into China? Can we sell more to China? Or will we simply continue to be a sponge for China and watch their goods come here while they still retain a relatively closed market to many of our goods? Once when I was in China, I met with the President of that country. I talked to the President of China about trade issues. I said: You must buy more pork from the United States. You must buy more wheat from the United States. You must buy more from the United States. You ship us your trousers, your shirts, your shoes, your trinkets. Boats come from China loaded with all of the things you produce. Our consumers are happy to buy them. But we are not so lucky when American producers are trying to sell goods into the Chinese economy. We are told: No, you can't sell wheat in these circumstances in China; no, we won't purchase your pork; or, no, we won't purchase this or that. In fact, the things we do have, you want to make copies and violate the intellectual property rights of our producers. And we are not going to enforce that. We are going to look the other way when your plants press out the CDs with copyrighted music made by American artists. My point is this: I think China is a very big, strong, interesting country that is going to be a significant part of our lives in the future. I am not sure what kind of influence they will have on our future, but it will be significant. I want China to play a constructive role in our future. I want us to play a constructive role in their future. So I want us to have engagement and opportunity. I want us to have trade relationships that are fair. I want China to move in a more significant way to improve their record on human rights and to move in a way that provides more opportunity for their workers to have a fair say in their economy. But having said all of that, I don't have great confidence that the trade agreements we have with countries such as China are intent on ending these kinds of trade circumstances that are unfair to our country. Two weeks ago, for example, after a bilateral trade negotiation with China was announced as a great success, the Chinese WTO negotiator, Vice Minister Long Yungtu, went to Kweichow in south China to talk about it. He was quoted in the South Asia Post as saying: You know, the agreement we have with the United States, this notion of buying a certain number of millions of tons of wheat doesn't mean we are going to buy any wheat in the United States. That is just theory. That is all theoretical. The notion that we will now accept meat from several thousand meat-packing plants in the United States doesn't mean we intend to have any U.S. meat come into our country. That is all just theoretical. When I read what Minister Long, the man who negotiated the Chinese side of the agreement, said, I wrote to him and asked about that. I understand people get misquoted from time to time. I also asked Charlene Barshefsky, our trade ambassador, to find out what this means. So far I have not heard a word from the Chinese negotiator. I have not heard a word from the U.S. trade ambassador. I hope to hear from both. I would like to see some progress in these areas. I want us to have a good trading relationship with China, Japan, Europe, Canada, and Mexico. But a good trading relationship to me is not defined as a circumstance where they plug our market with all of the goods from their country and then keep their market closed to many of our producers of commodities and goods. That doesn't make any sense to me. This country can't allow that to happen any longer. We must insist on a reciprocal opportunity in foreign markets. A trade relationship with another country must be mutually beneficial to us and to them. We have far too often negotiated trade agreements that are one-way streets with foreign goods coming into the U.S. economy, but not a similar opportunity for U.S.-produced goods, including agricultural commodities and manufactured goods, to go into other economies. That is one of the reasons we have this massive trade deficit that is growing at an alarming rate. I was going to speak about our situation with Canada and durum. I will reserve that for another time. I know we are nearing the end of the day. Some have other things they want to do. I am going to close with a point about trade enforcement. It is one thing to have trade agreements that are bad agreements. We have had plenty of those. Our trade negotiators have not done well for this country, in my judgment. But it is another thing to have trade agreements that are reasonably decent but are unenforceable. That is also, I think, what happens even with those agreements that were decent agreements in the first place. In the Department of Commerce where we monitor trade agreements, the number of people whose job it is to work on enforcement issues with respect to China and our trade agreements with China is 10. We have nearly a $65 billion merchandise trade deficit with China. We have all kinds of problems getting into the Chinese marketplace with American goods, and we have 10 people whose job it is to work on the issue--10. Or Japan--we have had a trade deficit with Japan of $45 billion to $60 billion forever. Do you know how many people work on that issue? Sixteen. Canada and Mexico together--we turned a surplus with Mexico into a big deficit, and we doubled the deficit with Canada. That is all the result of this wonderful trade agreement called NAFTA for which we had people stand up and brag on the floor of the Senate saying that you have to pass this because if you do we will have more American jobs. It will be better for everybody. I didn't vote for NAFTA. But the Congress passed it. Guess what. All of those economists are now unwilling to show their face around here because they predicted several hundred thousand new American jobs. In fact, we lost several hundred thousand opportunities, and a trade surplus with Mexico turned into a huge deficit. And a trade deficit with Canada doubled because this country didn't negotiate a reasonable trade agreement with Canada and Mexico. This country lost. Do you know how many people are working on this issue at the Department of Commerce? Ten for two countries, and a combined trade deficit of over $50 billion. We have 10 people working on it. There was a story not too long ago that said that U.S. officials who are responsible for monitoring trade agreements sometimes couldn't even locate the text of the agreements. It is one thing to be incompetent. It is another thing to exercise benign neglect over things that are your responsibility. But it is quite another thing to be in charge of something and then just lose it. Do those of us who have concerns about this have legitimate concerns? Yes. We need to negotiate better trade agreements. We need to enforce trade agreements. And we need to make certain that the relationships we have with other countries are mutually beneficial to us and to them. That has not been the case, sadly. At the WTO conference in Seattle, which turned out to be such a fiasco with demonstrators in the streets, with some thugs in the streets who defaced buildings, broke windows, and that sort of thing, one thing happened that was quite remarkable. I want to say, however, there were very few people who I call thugs who used paint cans up and down the streets of Seattle. It was regrettable that they defaced buildings and destroyed property. But the bulk of the people in the streets of Seattle--literally tens of thousands of them--were perfectly peaceable. They demonstrated up and down the streets in ways that were perfectly peaceable. They were there to demonstrate for legitimate reasons. They demonstrated about a range of issues about which they cared deeply and passionately. There will never be, in my judgment, a place in the world where there are negotiations about trade in which there won't be people showing up to ask legitimate questions about labor standards and environmental standards because you can't fight in a country such as ours for 75 years and have people die in the streets demonstrating for the right to form unions and then decide, well, we will just pole-vault over all of those things and go and produce our goods in Sri Lanka or some other country where you do not have to worry about labor unions because they don't allow workers to form unions. We won't pay a livable wage, we won't have safe workplaces, and we won't restrict people from dumping chemicals into the streams and into the air. We'll hire kids for 12 cents an hour, work them 12 hours a day, and put them in unsafe plants. And, if you do not like it, tough luck. That is the attitude of some in the rest of the world, and the people who demonstrate in the street are saying that isn't fair because we fought 75 years in this country for a minimum wage, for safe labor standards, and for a whole range of issues that are very important to who we are and what we are, and we are not going to allow those to be traded away in trade agreements. They have a legitimate concern. There will always, in my judgment, be Americans in the streets unless they are part of the negotiations. That is why the WTO needs to be much more open and much more inclusive. Having secret negotiations and excluding people is not a way to resolve these issues. Globalization, galloping along, must be accompanied by rules that are fair and thoughtful dealing with these serious issues of labor standards, environmental standards, and other issues. They must be accompanied by thoughtful rules. In Seattle, I met with a group of Parliamentarians from Europe. I and a number of my Republican and Democrat colleagues went together to the WTO meetings in Seattle with great hope, and regrettably those meetings didn't produce much in terms of agreement. They produced a great deal of chaos in the streets, and among the negotiators nothing much happened. But during one memorable meeting for me with a group of Parliamentarians from Europe something happened that was quite remarkable. Michel Rocard, who was a former Prime Minister of France and is now a member of the European Parliament in Europe, leaned across the table to me and said something interesting. He said: We talk about the beef dispute, beef hormones, and the dispute with Roquefort cheese, and all of these issues we have with Europe. They are nettlesome, difficult issues with Europe on the trade disputes. As we were talking about the differences between Europe and the United States, Mr. Rocard, who was the former Prime Minister of France, leaned forward to me and he said: I want you to understand something, Mr. Senator. We talk about our differences, but I want you to understand something about how I feel about your country. I was a 14-year-old boy standing on the streets of Paris, France, when the U.S. Army came in to kick the Nazis out of our country. A young black American soldier handed me an apple as he walked past. It was the first apple I had seen in several years. I will never forget how a 14-year-old boy felt about this young American soldier walking down the street in Paris, to liberate my country, and this young soldier handing me, this young French boy, an apple. It occurred to me that we forget, I think, what this country means, what it has been to so many others in the world; what we have done and what we have yet to do in the world. I tell you that story only to say that while we have substantial trade disputes, our country has done a lot for a lot of people around the world. We liberated Europe. We beat back the forces of fascism. This country was perhaps the only country that was capable of doing that at that time. After the Second World War, for the first 25 years after that, we said to Europe not only did we kick the Nazis out of France and American soldiers moved across Europe and liberated the Europeans and defeated Hitler, not only that, but this country has decided to create a Marshall Plan to rebuild Europe. We rebuilt the economies of Europe. For 25 years, in addition to spending money for the Marshall Plan to rebuild Europe and rebuild the economies of Europe, we also said our trade policy will be our foreign policy. We made concessional trade agreements with everybody because it was not a problem for us. We were big enough and strong enough so that with one hand tied behind our backs, we could beat almost anybody in the world with international trade. So our trade policy was our foreign policy, and it was to help other countries get back on their feet. But things changed. After about a quarter of a century, from the Second World War on, at that point we began to see our allies gaining strength, having better economies, doing a better job. All of a sudden, we had some tough, shrewd economic competitors. And in the second 25 years post-Second World War, our competition has changed. Our competition has been tougher in international trade. But in this country, much of our trade policy has remained foreign policy. Instead of our being hard-nosed competitors with a reasonable trade policy that cares about our producers and the economic health of our producers, our trade policy has remained largely focused on foreign policy. That needs to change. We cannot always say it does not matter what our deficits are with China or Japan. We cannot say it does not matter--of course it matters. This has economic consequences to us. Our trade policy with respect to Japan needs to be a hard-nosed trade strategy that says you have tough competitors. But we need to compete with fair rules, and the rules of trade between the United States and Japan are fundamentally unfair. They are fundamentally unfair. I will come some other time to talk about the specifics of that. That was all fine, post-Second World War for a quarter of a century, but it is not fine anymore, and it is going to begin to injure this country and sap economic strength from this country. No one wants a future of economic growth for this country more than I do. But the way to assure continued months of economic prosperity and continued years of prosperity will be to deal with problems that exist. One set of problems and storm clouds on this country's horizon is a huge, growing trade deficit that nobody seems to care about and nobody seems to want to talk about and no one seems willing to do anything about. I just hope one of these days enough of us in the Senate can say to our colleagues, can say to the administration, and can say to our trading partners and our allies, that things are going to have to change. We believe in the global economy. I believe in expanding trade opportunities. I do not believe in putting up walls, and I do not believe in restricting trade. But I believe very much this country needs to say to our trading partners that we insist and demand fair trade rules. We demand it. It was fine 40 years ago that we did not have them because we did not need them and we were helping other countries get back on their feet. That is not the case any longer. With Japan, we need some equilibrium and fairness. If you want to ship your products to this country, God bless you. They are welcome, and our consumers will be advantaged by having the ability to buy them. But we demand the same of your consumers. We demand the ability of your consumers to buy that which is produced in this country. When you go to a grocery store in Tokyo and pay $30 or $35 for a pound of T-bone steak, you do that because they do not have enough beef. They don't have enough beef. That is because we don't get enough American beef in, because it is limited. Why? Because we have a trade agreement that provides, as we speak, a 40-percent tariff on every single pound of American beef going into Japan. If we did that on anything Japan sends into this country, it would be considered an outrage. We would be held up to ridicule, saying how on Earth dare the United States do this? Yet for every single pound of U.S. beef going into Japan as I speak, today, there is a 40-percent tariff attached to it. It is not fair. My point is this country can compete. Its producers can compete anywhere in the world any time. But only if we negotiate trade agreements and enforce trade agreements that are fair to our country and our producers and that are mutually beneficial to us and to our trading partners. Mr. President, I yield the floor. I make a point of order a quorum is not present.

Mr. DORGAN

Mr. DORGAN. Mr. President, is the Senate in morning business?

Mr. DORGAN. I ask unanimous consent to speak for as much time as I consume.

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

Mr. DORGAN

Mr. DORGAN. Mr. President, I ask unanimous consent that Lori Way, a legislative fellow from the Department of Commerce, and Wayne Pieringer, a legislative fellow from the Air Force, be granted the privilege of the floor for the 106th Congress.

Mr. DORGAN

Mr. DORGAN. Mr. President, I understand we are here on the floor of the Senate to talk about the renomination of Alan Greenspan as Chairman of the Federal Reserve Board. I want to start my presentation by saying it is not my intention to come to the floor of the Senate to persuade people Mr. Greenspan is not a good person or has not been a good public servant--I do not believe that. He is someone with great skill and great devotion to public service. But I do come to say that I have profound differences with Mr. Greenspan over monetary policy issues and I believe his stewardship with the Federal Reserve Board, while widely hailed by many, falls short of what I think should have been done at the Fed during the same period. I would like to spend some time describing that. As I begin this discussion, let me point out that just this afternoon the Federal Reserve Board has announced yet another interest rate hike. They have announced today that the Federal Open Market Committee is hiking short-term interest rates another one quarter of 1 percent. What does that mean? A lot of people will not think much about the one quarter of 1 percent in terms of what it means to them. It means the Federal Reserve Board is imposing a tax on every single American with these interest rate hikes because they are worried about some new wave of inflation that does not exist in our country. I had some work done at the North Dakota State University by Dr. Won Koo in the Department of Agricultural Economics. I asked him to tell me what it means, just in terms of North Dakota, when the Federal Reserve Board has now on four occasions in a matter of 8 months raised interest rates by 1 percent. What does it mean when we have a 1-percent interest rate increase? The additional average interest payments for North Dakota farmers will be nearly $23 million a year as a result of the actions of the Federal Reserve Board, or about $719 per farm annually. A typical North Dakota household will see their interest charges go up by an additional $356 a year because of the four Fed interest rate hikes. The Federal Reserve Board is imposing a tax on every single American with these four rate hikes. I will explain more later why I think the rate hikes are unjustifiable. But these rate hikes are unjustifiable because the Federal Reserve Board is searching for inflation that does not exist. Inflation has gone down, down, way down, all the while the Federal Reserve Board has insisted the fires of inflation are just around the corner. The Fed has been consistently wrong on that. And there seems to be almost no debate about it. It is OK if the Fed decides it wants to increase interest rates and effectively tax all the American people with higher interest rates. Some of those who come to the floor of the Senate who are the most aggressive people in opposition to any kind of a tax increase, sit silently while the Federal Reserve Board says: We want to impose new costs on the American people in the form of mandated higher interest charges. That is rather curious to me. Why so silent when the Federal Reserve Board does this without justification, I might add. Here is the Federal Reserve Board. And I do this to give the American people a sense of who makes monetary policy. We have a Board of Governors. There are two seats that are currently vacant. We are hoping maybe we can get someone appointed to the Federal Reserve Board who cares something about consumers and family farmers and others who will have to pay the higher interest charges. It is not likely to happen, but we are trying. None of the current Board members is from our part of the country. There have only been three Board members from the Upper Midwest appointed to the Board of Governors since it was created. We are hoping maybe somebody who might take one of these vacant seats will be somebody who knows how to make something, to produce something, who does something every day and will come here not representing the money center bankers' interests but representing the interests of consumers, family farmers, or Main Street businesses. The Board of Governors and, the presidents of the regional Fed banks on a rotating basis, go in a room, shut the door, and in secret decide what kind of monetary policy they want to employ and whether they want to increase interest rates. The American people were not present in the room and I was not present in the room because we are excluded from these deliberations by the Federal Reserve Board. These are the folks who went into that room: Roger W. Ferguson, Jr., Alan Greenspan, Edward Gramlich, Edward W. Kelley, Jr., Laurence Meyer; and then these folks from the Fed regional banks, the ones with the gold stars: Robert Perry, Jack Guynn, Mr. Broaddus, Mr. Jordan, and Mr. McDonough. They apparently think the American people's interest charges are not high and decided to raise it one-quarter of 1 percent, a total of 1 percent over the last four rate hikes. The question is why. It is interesting, the Chairman of the Federal Reserve Board says he does this because there is a threat of new inflation in this country. Over the past 12 months, however, inflation has been well under control. The CPI has risen 2.7 percent in the last 12 months. In the last 3 months, the CPI has risen at an annual rate of 2.2 percent, and the core CPI--if you take out volatile food and energy prices, has risen 1.9 percent in the last 12 months, the lowest it's been since 1965. In addition, Mr. Greenspan has come to the Capitol and said: We think the CPI overstates inflation by 1.5 percent. I do not think he is right about that, but if he is right, we have effectively no inflation in this country. If we have no inflation in this country, what on Earth are these folks doing in a secret meeting downtown, wearing suits and glasses and talking in bankerspeak, deciding to increase taxes in the form of a higher interest rate on every American? What are they doing? How do they justify that? Why do those in this Congress who wail so much about taxes sit silently while the Federal Reserve Board does this without justification? You tell me where the new fires of inflation exist. Alan Greenspan for years came to counsel us on Capitol Hill. He said: We cannot countenance economic growth in this country more than 2.2 or 2.5 percent without risking substantial new waves of inflation--just can't do it. He was wrong. Again and again he was wrong. Economic growth has been well above 2.5 percent, and inflation has been way down, not up. Mr. Greenspan came to Congress and gave us the sage advice that if we saw unemployment fall below 6 percent, we risked new fires of inflation. He was wrong again and again. He was wrong. Yet we hear people come to the floor to say he is the greatest American ever. He is a nice enough fellow. I have nothing against him personally. His policies, in my judgment, have imposed an added financial burden on the American people in the form of higher interest charges than is justifiable. I ask all of you who know these numbers, evaluate what have been the interest rates relative to inflation--that is, the real rate of interest--in the Greenspan years versus pre- Greenspan years. What is the real economic rent for money? What kinds of policies imposed by the Greenspan years at the Fed have resulted in what kinds of charges to the American people relative to what had been done before Mr. Greenspan came to the Fed? I will tell you the answer. The answer is, interest rates on a real basis have been higher in the Greenspan years by about one-half of 1 percent than the pre-Greenspan years. Can you justify that? I do not think so. And Mr. Greenspan, leading this Fed--and make no mistake, he is in charge, it is his policy, no one would contest that--has said over the years: We must grow more slowly; we cannot support higher growth; we must shade on the area of having more people unemployed rather than fewer people unemployed, and because of the risks of having too few people out of work and too much economic growth, we must retain interest rates at a level that is higher than historically justified relative to the rate of inflation. Some might come to the floor and be able to justify that in their own minds. I certainly cannot. I do not think the American people believe either that Mr. Greenspan's higher interest rates relate to this new economy that can grow faster with lower unemployment numbers than most economists ever thought available or doable. Let's talk just about the numbers for a few minutes. I mentioned that the core rate of inflation is now 1.9 percent over the last 12 months, the lowest its been since 1965. I mentioned Mr. Greenspan thinks the CPI overstates the rate of inflation by a percent and a half. That means we have virtually no inflation. But today the Fed said we are worried about inflation, therefore we must increase interest rates once again. The Fed is wrong once again. In 1999, the GDP grew at 4 percent; in 1998, 4.3 percent; in 1997, 4.5 percent. In other words, in the two previous years to 1999, we had higher rates of growth than in the last year, and yet the Fed today, by its interest rate increase, says our economy is growing too fast. Again, in my judgment, it is implausible. This Fed Chairman steers the Fed on monetary policy on the side of money center banks. I think monetary policy ought to be steered in a direction and on a course that relates to all of the needs and all of the interests of this economy and of the American people. I talked a little about unemployment. In the past, the Fed has preached that the non-accelerating inflation rate of unemployment was 6 percent. In short, if the unemployment rate goes below 6 percent, consumer prices will go up. The Fed's reliance on this and other buggy- whip approaches to economic analysis have been terribly misdirected given the globalization and the galloping globalization of the workforce. The unemployment rate has been below 6 percent for 64 consecutive months, over 5 years, without a peek at a new wave of inflation. Today, unemployment rates are at a 30-year low of 4.1 percent, and our economy is growing at a healthy rate without a shred of evidence that there is a new threat of inflation. Some say Mr. Greenspan is increasing interest rates not so much because he is worried about inflation, although that is what he says, but because he wants to curb speculation in the stock market. He thinks there is something in the stock market; he said once ``irrational exuberance''--whatever that means to economists. I used to teach economics ever so briefly. Irrational exuberance, he says--it is interesting--irrational exuberance on the part of those who are engaging in transactions on Wall Street that are presumably market transactions, and presumably in a circumstance where the market works. It is interesting that Mr. Greenspan decides, because of this irrational exuberance, he wants to impose a penalty on all the American people through higher interest rates rather than deal with what I think may be the cause of this so-called irrational exuberance. If Mr. Greenspan really wants to try to bust some of the bubble on Wall Street, maybe he ought not raise interest rates that cause direct and immediate harm to families and to producers, but maybe he ought to consider taking real steps to put limits on the use of ``margins'' by investors to buy stocks. It is interesting, the amount borrowed by investors to buy equity securities is growing to levels of significant concern. Last November, the margin amount increased by 13.2 percent in 1 month alone--the largest monthly increase since 1971. Perhaps Mr. Greenspan might want to put some limits on the use of margins; but, no, not Mr. Greenspan. He would sooner impose an added interest charge on all Americans. Let me talk for a moment about what I think is the low watermark of the Fed in recent times. That is the issue of Long-Term Capital Management, the ill-fated hedge fund, because it relates not only to the management of the Fed, but it relates to what the Fed is interested in and relates to the Fed's, in my judgment, insensitivity of or, perhaps in a stronger sense, blindness to solve the risks that exist that they ought to be concerned about but are not. Long-Term Capital Management. Mr. President, how much of my time remains?

Mr. DORGAN. There is so little known about the Federal Reserve Board that when Senator Reid and I had a GAO report done recently, they said that the Federal Reserve Board has stashed away now close to $6.4 billion--then I believe it was $3.7 billion--in a kind of a rainy day fund. The rainy day fund was described by the Fed as a surplus fund that was to be used in the event they needed it if they suffered a loss. This is an institution that makes money. This is an institution that has never had a loss, will never have a loss, and stashes away a cash reserve in the event that it has a rainy day. The GAO report, of course, was very critical of the management of the Fed on a wide range of things. But I will not put it in the Record.

Mr. DORGAN. Mr. President, some while ago the Federal Reserve Board orchestrated a $3.6 billion bailout of something called Long-Term Capital Management, the highflying hedge fund, which I think calls into question the leadership at the Federal Reserve Board and calls into question what they think is important and what they are willing to ignore. The federally insured banks were lenders and investors in this Long- Term Capital Management fund. The GAO, in its 1999 report, requested by myself and Congressman Markey, Senators Harkin and Reid, found that federal regulators failed to detect lapses in risk management by lenders, and others, that allowed Long-Term Capital Management to become large and excessively leveraged until after the crisis. Mr. Greenspan testified that the intervention in the Long-Term Capital Management debacle was needed to prevent a crisis in the global financial markets. But then he appears just as quickly to dismiss the Fed role in the bailout as little more than a spectator providing office space. What makes this more troublesome, to me, is that just days before the Federal officials visited Long-Term Capital Management in Connecticut to discuss its financial problems, Chairman Greenspan was testifying before the House Banking Committee that: ``Hedge funds were strongly regulated by those who lend the money.'' Of course, nothing could have been further from the truth, as was uncovered by the GAO's 1999 investigation of the Long-Term Capital Management's near collapse. The independent report reveals that our Federal regulators, including the Fed, allowed this speculative hedge fund to load up with $1.4 trillion notional value in derivatives, which threatened to bring chaos in financial markets here and around the world. While I am on this subject of unregulated hedge funds, which the Fed on a Sunday had to bail out by arranging bank loans, shortly after they said: Gee, there is no problem here with hedge funds. Let me add that the subject of derivatives ought to have some attention by not only our committees but by the Fed and other banking regulators, as well. There is something around $33 trillion notional value derivatives by banks in this country, and we have banks whose deposits are insured by the Federal Government, doing proprietary trading on derivatives on their own accounts. They could just as well put a craps table in the lobby of a bank. They could just as well put a roulette wheel in the lobby of a bank. A bank, with federally insured deposits, trading on its proprietary accounts in derivatives, and nobody seems to care. But someday, some way, someone will care because this is going to go the way of Long-Term Capital Management, unless there is adequate supervision. When those cards collapse, that collapse is going to be significant. We need, in my judgment, strong management. We need assertive oversight by our committees. We need strong, aggressive oversight in the regulatory approaches by the Federal Reserve Board. Regrettably, that is not the case these days with respect to the Federal Reserve Board. Since the chairman of the Banking Committee is here, I will say that I urge the committee to pay some attention. You probably already have. I am not suggesting you have not. I don't know what your agenda is. I hope very much the issue of derivatives and the issue of the regulation of hedge funds, or at least the concern about what hedge funds are doing in light of Long-Term Capital Management scandal, is something that is part of the agenda of the Banking Committee in this Congress. I have described, at the start of my presentation, it is not my intention, nor would I expect it to be the intention of the Senator from Iowa, Mr. Harkin, or others, to come to the floor to say that the Chairman of the Federal Reserve Board is a bad person. I do not believe that. I met him. I like him. I think he is a good public servant. I think he has given a great deal to this country. He and I simply have fundamental differences on monetary policy. He has run monetary policy with a tight fist, believing a certain way, and those beliefs include that we could not allow more growth. We had to have slower growth in order to avoid inflation. We had to have more people unemployed in order to avoid inflation. He was wrong on both counts, wrong consistently. My point is, I think it is time--and I have told this to the President--I think it is time for new blood at the Federal Reserve Board. I say to the Senator from Iowa, who has come to the floor, look at this Board. I, from time to time, as a public service--because the Fed is so closed and so secretive; it is the last dinosaur on the American landscape in public policy--I bring pictures to the floor to show people what the Fed looks like. Here is who they are. Here is where they graduated from. Here is what their degrees are. Put a gray suit on all these folks, and they all look the same, talk the same, and think the same. That is why this policy is a homogenized policy that does not provoke any debate in this country about monetary policy. A century ago they used to debate monetary policy in bars and barbershops. I thought that was healthy. Fifty years ago and 40 years ago, when McChesney Martin was running the Federal Reserve Board up here, he was going to raise interest rates by one quarter of 1 percent, and Lyndon Johnson got him down to the ranch in the Perdinales in Texas and darn near broke his shoulders he was squeezing him so tight. The point is, it was front page headlines around the country because McChesney Martin was going to have the Fed raise interest rates by a quarter of 1 percent. The President got so upset he even called McChesney Martin down to the ranch. The Fed did not have to respond to Lyndon Johnson, but my point is, back then interest rate policy was a matter of public concern, of public debate. These days, these folks go in that well-paneled room and shut the door, and it is all done in secret. Then they open the door and say: Guess what we have done for you. There are too many people working. We are growing too fast, so therefore we have increased a tax on all the American people by increasing interest rates once again. Four successive interest rate increases--1 full percent. Again, let me say that the average North Dakota household, which pays $356 a year more in interest rate charges--that is a new tax on the American consumer in my State and around the country.

Mr. DORGAN. It was not a tax debated on the floor of the Senate. If we had that debate, my friend from Texas, Senator Gramm, the distinguished chairman of the Banking Committee, would be on the floor, I guarantee you, because when we debate taxes he is on the floor. He is a passionate combatant in those debates. But we cannot have that debate on the floor of the Senate because the Federal Reserve Board does not have a debate in public. It does it in secret. What I am saying is, I think the Federal Reserve Board process needs to be more open. I know the response and the rejoinder to that will be: Well, the Senator wants to make the Federal Reserve Board process politics on the floor of the Senate. That is not my point. My point is, I think there ought to be, leading into this process somehow, some interests of the American people. It does not exist at the moment. It is my intention to not support this renomination. I expect this renomination will carry with a very large vote in the Senate, but it will not carry with my vote because I believe monetary policy ought to change in this country. I do not believe our country is growing too fast. I do not believe too few people are unemployed. I do not share that view, that is too often shared in the bowels of the Federal Reserve Board. I would like someday for us to have a monetary policy that represents the entire interests of our country, not just the interests of money center banks.

Mr. DORGAN. I am happy to yield.

Mr. DORGAN. I don't know what length of time they keep the transcript private. However, the Federal Reserve Board is enormously private. I have said it is the last dinosaur. A little sunlight would be a great disinfectant for monetary policy.

Mr. DORGAN. Mr. President, I ask unanimous consent for 1 additional minute.

Mr. DORGAN. Mr. President, does the unanimous consent agreement include a time for me to speak?

Mr. DORGAN

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

Mr. DORGAN. Mr. President, I ask unanimous consent to be allowed to speak as if in morning business for 15 minutes.

Mr. DORGAN

Mr. DORGAN. Mr. President, I would like to speak for a few moments today about the call in the State of the Union Address for a prescription drug benefit to be added to the Medicare program. In all of the discussions about the State of the Union and what is happening to the health of the American people, one of the underlying issues is that people are living longer and better lives. When people live longer and better lives, it means we have more strain on Medicare and on Social Security. But, of course, all of that is born of good news: People are living longer. At the start of the last century, citizens of the United States were expected to live, on average, to about 48 years of age. One hundred years later, in the year 2000, you are expected to live to be about 78 years of age--a 30-year increase in life expectancy. That is really quite remarkable. What are the reasons for that? There are a lot of reasons: Better nutrition, new medical technologies, and life-saving prescription medicines that have been developed to extend life. There are a lot of reasons for the increased longevity. In 1965, we created a Medicare program that has contributed substantially to the increase in longevity in this country. Prior to that time, 50 percent of senior citizens had no health care coverage at all--none. Medicare provided health care coverage to all senior citizens, and now 99 percent of older Americans in this country have basic health care protection through Medicare. That clearly has extended life and has allowed people to live longer and better lives. But in 1965 when Medicare was created, many of the prescription drugs that now exist for extending life simply weren't available. There was not, therefore, a need for a prescription drug benefit in Medicare. The call now by the President and by Members of Congress, myself included, Democrats and Republicans alike, is for a prescription drug benefit for the Medicare program. Why? Because senior citizens in this country comprise 12 percent of our population and consume 33 percent of the prescription drugs in our country. Let me repeat that because it is important. Twelve percent of our population are senior citizens, but yet they consume one-third of the prescription drugs. The cost of prescription drugs last year increased nearly 16 percent--last year alone. Part of the reason for that increase was price inflation, and part of it was a dramatic increase in utilization. But we should, it seems to me, be especially concerned about senior citizens having access to the prescription drugs they need to extend and improve their lives. As chairman of the Democratic Policy Committee, I have been holding hearings in various parts of the country on this very subject. For instance, I held a hearing with Senator Schumer in Westchester, NY, and a hearing recently with Senator Durbin in Chicago. I guess I have held perhaps six or eight hearings on this subject. It is heartbreaking sometimes to hear the stories told at these hearings. An oncologist came to a hearing I held. He told of one of his patients who was a senior citizen, a woman who had breast cancer. And he said: There is a medicine she needs to take following her surgery, chemotherapy, and radiation that will reduce the chances that she will have a recurrence of breast cancer. When I described this medicine to her, she said: What does it cost? The doctor told her what it cost. And she said: There isn't any way I can afford that medicine. I will just have to take my chances. I will just have to take my chances of the breast cancer recurring because I can't afford the medicine. It breaks your heart to hear that. Or to hear a senior citizen who said: When I go into the grocery store where I purchase my medications, the first stop for me must be the pharmacy counter because I must get my prescriptions filled, so then I will know how much money I have left for food. Only then will I know how much food I can buy. Senior citizens will find in some circumstances that they take 4, 6, or 8, and in some cases 10 and 12, different kinds of medicines at the same time. Some of them are horribly expensive. Yet most older Americans have very little prescription drug coverage. I would like to show some charts that describe these circumstances graphically, especially for senior citizens. This chart shows that nearly a third of senior citizens spend $1,500 a year on prescription drugs. These are people who are living on fixed incomes, and 70 percent of them have incomes of $15,000 or less. This chart shows that nearly 75 percent of Medicare beneficiaries have inadequate prescription drug coverage. In fact, 34 percent have no drug coverage at all--none, zero. So they must go to the drugstore to buy their prescription drugs, living on a fixed income, trying to balance the need to pay heat and light and rent and food, and then try to figure out how to pay for increasingly expensive prescription drugs. Many of them find they can't do it. They tell me at these hearings some of the measures they are forced to take: I have heart trouble, or I have diabetes, they tell me, and what I do is buy the prescription drugs that the doctor says I must have, and cut the pills in half and take half the dose so it lasts twice as long. And they hope somehow that they will avoid medical problems by doing it. It breaks your heart to hear someone 85 years of age who knows he has to take medicine to deal with his heart disease and diabetes, but who says: I can't afford it so I don't take the medicine. As this chart shows, this is especially a problem for older women. As you can see, the majority of women have no prescription drug coverage at all. That is a very serious problem. This chart illustrates that rural beneficiaries are less likely to have prescription drug coverage across all income groups. I represent a rural State and the many hearings I have held in North Dakota confirm this fact. We are going to be confronted in this Congress with the question of whether we should add a prescription drug benefit to the Medicare program. When I was in New York with Senator Schumer, Connie Pennucci, 77 years old, said she has no prescription drug benefits and pays $200 a month out of pocket for the medications she needs to treat her arthritis and osteoporosis. In Illinois about 2 weeks ago, a woman named Anita Milton told Senator Durbin and I that she had a double lung transplant. Because of the way Medicaid works, she gets help to pay for her prescription drugs one month, but then the next month she has no drug benefits at all. I think she told us that her prescription drugs to prevent the rejection of her new lungs cost $2,500 a month. Think of that, $2,500 a month. At that same hearing, this wonderful woman who had a double lung transplant was joined by two people who had heart transplants. They told us the cost of their prescription drugs that are necessary to prevent rejection of their transplanted hearts. Is all of this miracle medicine? Of course it is. But it is only miraculous if you can afford the prescription drugs that must be taken on a daily basis to ward off the rejection of the transplanted organ. There is an urgent requirement, in my judgment, for all of us in Congress to join together to find a way to add a prescription drug benefit to Medicare. We should do it in a way that is voluntary for senior citizens. We should do it in a way that doesn't break the Treasury, and pharmaceutical prices should be affordable. But we can do that. I hope Republicans and Democrats together will recognize the urgent need to do this. I would like to address one other issue, and that is the issue of the price of prescription drugs. Why do prescription drugs cost so much, and what can we do about it? Let me say at the outset, I want the pharmaceutical industry to be successful. I want the drug companies to be successful. I want them to be profitable. I want them to continue to invest in new research and development to help discover new lifesaving medicines and drugs. As you know, the federal government provides a substantial investment in pharmaceutical research and development through the National Institutes of Health and tax credits. A substantial amount of research and development for new medicines is publicly funded. But the pharmaceutical industry does private research and development. I want them to be successful. But I also want them to price pharmaceutical drugs fairly for all of the American people. In virtually every other country in which you purchase a prescription drug made by a pharmaceutical company in a plant inspected by the Food and Drug Administration, the same pill in the same bottle made by the same company costs double, sometimes triple the amount in the United States than in virtually any other country in the world. I will give you some examples. Let me go back to some of the medications most frequently used by older Americans who consume a third of the prescription drugs in our country. If they take Zocor, a cholesterol-reducing drug, the same drug in the same dosage and quantity costs $106 in the United States, and only $43 in Canada, $47 in Mexico. These prices have been converted to U.S. dollars. Or Prilosec, a drug for ulcers costs $105 in the U.S., $53 in Canada, and $29 in Mexico. Zoloft, a drug for depression, costs $195 in America, $124 in Canada, and $155 in Mexico. The list goes on. This chart shows it better. How much do we pay for prescription drugs? For every $1 that American consumers pay for a prescription drug, that same drug would cost much less in other nations. For every dollar Americans spend for prescription medications, Canadian consumers pay 64 cents, the English pay 65 cents, the Swedes pay $68 cents, and the Italians pay 51 cents. Why do U.S. consumers pay the highest prices in the world for prescription drugs? The answer is because the pharmaceutical industry can charge as much as they want if they choose to do so --and they do. I took a small group of senior citizens to Emerson, Canada, recently. They purchased prescription drugs at the pharmacy in Emerson. These are senior citizens with heart disease, osteoporosis, diabetes, and other illnesses. Guess what. We went 5 miles across the border into Canada and there they could buy the same prescription drugs at a small percentage of the price of the prescription drugs in this country. These are the same pills, made by the same company, often actually made in the United States and then shipped 5 miles north into Canada. Yet, if U.S. consumers were to buy them in the United States, they are charged much higher prices. Is that fair? No. If this is truly a global economy, then it seems to me that pharmacists in this country ought to be able to access those same drugs in any market in the world and pass the savings on to their customers. That would, in my judgment, force the pharmaceutical industry to reprice their products in the United States. As I said when I started, I want the pharmaceutical industry to make money. I want them to do good pharmaceutical. The Wall Street Journal calls the profits of the pharmaceutical industry ``the envy of the corporate world.'' Why? At least in part, it seems to me, it is because the U.S. consumer is charged very, very high prices for the same drug that is marketed in the rest of the world at a much lower cost. I have introduced a piece of legislation, the International Prescription Drug Parity Act, that I and a bipartisan group of cosponsors are going to try to get passed in this Congress to address this problem. These issues of pharmaceutical drug costs and a prescription drug benefit in Medicare are very important issues. Lifesaving medicine is only able to save lives if people can afford to have access to that medicine. Too many Americans find these prices are out of their reach. Too many senior citizens living on fixed incomes are finding they are not able to afford the medicines that are necessary for them to prolong their lives, to improve their lives, and to treat their diseases or illness. We in Congress can do something about that. But I would say this. Even as we try to add a prescription drug benefit to Medicare, we must find a way to put some downward pressure on prescription drug prices and provide some fairness relative to what the rest of the world pays for the same prescription drugs. Mr. President, I again thank the Senator from Iowa for the courtesy. I know the bankruptcy bill is on the floor. I yield the floor.

Mr. DORGAN

Mr. DORGAN. Mr. President, one of the bills that will pass today as part of an Energy and Natural Resources Committee package is S. 769, which provides a final settlement on certain debts owed by the city of Dickinson, North Dakota to the Bureau of Reclamation. The legislation, which was introduced by Senator Kent Conrad and myself, is virtually identical to that introduced during the last Congress. The Dickinson Dam Bascule Gates Settlement Act (S. 769) will afford long overdue relief to the citizens of Dickinson. Let me briefly explain why the debt liquidation is needed and appropriate. For one thing, the Bureau of Reclamation built a faulty project. The debt was incurred by the city of Dickinson for construction of a dam with gate structures which never worked properly. In addition, the need for the bascule gates as regulating structures to help provide a reliable local water supply was eclipsed by the construction of the Southwest Pipeline. The pipeline is part of the Garrison Diversion Project which is managed by the same Bureau of Reclamation. Consequently, it makes no sense for the city of Dickinson to have two water supply systems when it needs only one--especially when the first system was a faulty one. The city has already repaid more than $1.2 million for the bascule gates, even though they now provide virtually no benefit to the city. The legislation itself is actually quite simple. It would permit the Secretary of the Interior to accept one final payment of $300,000 from the city of Dickinson in place of a series of payments, totaling about $1.5 million, required by city's current repayment contract. The final payment may be adjusted for payments made after June 2, 1998. The bill also clarifies that the city of Dickinson will be responsible for up to $15,000 in annual operation and maintenance (O&M) costs. This amount represents the average costs for O&M on the gate structures over the past 15 years. The bill as introduced was not explicit on this point and Senator Conrad and I have worked with the Energy Committee on an amendment that is part of the reported bill. I want to thank Chairman Frank Murkowski, Ranking Member Jeff Bingaman, Subcommittee Chairman Gordon Smith, and their staffs for their cooperation and assistance. I also want to underscore the leadership of Senator Conrad in developing this legislation and the excellent work of his Deputy Legislative Director, Kirk Johnson. May I also commend Dickinson Mayor Fred Gengler and City Administrator Greg Sund for their help and persistence in seeking a fair resolution to this matter.

Mr. DORGAN. I appreciate the Chairman's cooperation and assistance on this bill and his willingness to work with me in the Energy Committee to bring this legislation to the floor. His commitment to convene a workshop to resolve outstanding issues provides the basis for moving forward with this legislation, which would meet the outstanding Federal commitment to our state. As the Senator from Alaska knows, North Dakota has significant water quality and water quantity needs that must be addressed. In many parts of my state, well water in rural communities resembles weak coffee or strong tea; it is unfit for drinking and other domestic uses. Several parts of my state, including the Red River Valley, do not have access to reliable sources of water. This bill is designed to address those needs and help provide clean, reliable water to families and businesses across North Dakota. When the Senate attempted to consider this legislation in recent days, objections were registered by other Senators who had concerns about the bill. In response, Senator Conrad and I have worked with those Senators to address their concerns. I am certain that with the Chairman's assistance and that of Senator Smith we will be able to resolve these concerns expeditiously.

Mr. DORGAN

Mr. DORGAN. This little guy/big guy notion of economics reminds me of the old parable that the lion and lamb may lie down together but the lamb isn't going to get much sleep. That is also true in economics. It is certainly true in this economy. The little interests are disappearing. That is true of agriculture. Family farmers are having the life choked out of them by the concentration in industries which they have the muscle to say: We want more of our food dollar coming from that bread, and we want you to have less. That is what they are saying to family farmers.

Mr. DORGAN. Mr. President, first of all, I commend Senator Wellstone for his leadership on this issue. I rise to support the amendment that he has offered. I have been involved with Senator Wellstone in constructing this proposal. The proposal very simply is to try to have a time out of sorts with respect to the mergers that are occurring in the agricultural processing industries. The question at the root of all of this is, What is the value of a family farm in our country and do we care about whether this country has family farmers in its future? If we do, if we care about keeping family farmers in our country's future, then we must do something about the concentration that is occurring and plugging the arteries of the free market system in the agricultural economy. Family farmers are not able to compete in a free and open system. It is just not happening. Why? Because of these mergers and concentration in the large agricultural industries. Let me show you with this chart what is happening to family farmers. The family farm share of the retail cereal grains dollar has gone down, down, and way down. Why? Why is the family farm share of the food dollar going down? Because as my friend from Minnesota likes to say, the big food giants have muscled their way to the dinner table. He is absolutely correct. They are grabbing more of the food dollar. The family farmer gets less. The food processors are making substantial amounts, record dollars, and the family farmers are, unfortunately, not able to make it. The farm share of the retail pork dollar is down, down, way down. The family farm share of the retail beef dollar? Exactly the same thing. Why is all of this occurring? Because concentration in these industries means there are fewer firms. For example, in market concentration in meat processing, in beef, the top four firms control 80 percent of the profits; in sheep, 73 percent; pork, 57 percent. Exactly the same is true in grain. Wet corn milling, 74 percent, the top four companies. The point is, this massive concentration is plugging the arteries of the market system. There isn't competition, or at least the kind of competition that is fair competition for family farms. Now, our proposal is very simple. It proposes a moratorium on certain kinds of mergers. We are talking only about the largest firms. And then during that moratorium for 18 months we have a commission review the underlying statutes that determine what is competitive and what is anticompetitive. There are people here who don't care about family farmers. They say, if the market system would decide that family farms should continue, then they will continue. And if the market system is ambivalent to it, then we won't have family farmers. But that is because the view of such people matches the view of economists, which is that you can value only that which you can measure in quantitative terms. If you can attach dollars and cents to it, then it has value. If you can't, it doesn't. The fact is, family farm enterprises have value far beyond their production of corn or wheat. Family farms in my State produce much more than their crops. They also produce a community. They have a social product as well as a material product. Now, this product is invisible to economists and to policy experts who only see what they can count in money, but it is crucially important to our country. We tend to view our economy as a kind of Stuff Olympics: Those who produce the most stuff win. We are a country that produces more stuff than we need in many areas but much less of what we really need in other areas. And one such thing we lack is the culture and the opportunity we get when we continue a network of family farms. Europeans call this contribution ``multifunctionality.'' That is just a fancy way of saying that an enterprise can serve us in more ways than an economist can give credit for. A small town cafe is much more to that small town than its financial statement. It is the hub of the community. It is the hub of interaction, the crossroads where people meet rather than be blips on a computer screen. The same is true with family farms. It is much more important to this country than the financial receipts would show. To those who do not care much about family farms, none of this matters. To those of us who believe a network of family farms preserved for our future enhances and strengthens this country, we believe very strongly that we must take actions to give family farmers a chance to survive. One of those actions--only one--is to say, let us stop this massive concentration in the giant food industries that is choking the life out of family farms. Why is it that when you buy a loaf of bread, the amount of money the farmers get from that loaf of bread is now not even the heel, it is less than the heel? Why is it that anyone in the food processing industry who touches that which farmers produce--wheat, corn, soybeans, and more--makes record profits, but the farmers are going broke? Why is it that a farmer who gases a tractor, plows the land, and nurtures the grain all summer, combines it and harvests it in the fall, goes to the elevator only to be told the county elevator and the grain trade have described that food as worthless. Then someone gets hold of that same grain and crisps it, shreds it, flakes it, puffs it, puts it in a box and gets it on the grocer's shelf. The grain then sells for $4 or $5 a box, and all of a sudden it has great value as puffed or shredded wheat. The processor makes record profits and family farmers are making record losses. Why is that? Because this system does not stack up. It does not stack up in a manner that allows fair, free, and open competition. When you have this kind of concentration, there is not a free market. That is true in the grain processing industry, it is true in meat, and it is true as well in the other areas I have discussed. Family farmers are seeing record declines in their share of the cereal dollar while everyone else who handles the grain the farmer produced is making a record profit. That is the point. I am for a free, fair, and open economy and fair competition. But our economic system today is not providing that because some are choking the life out of family farmers by clogging the marketplace with unfair competition. We have antitrust laws to deal with this. They are not very effective, frankly. When Continental and Cargill can decide to marry, and are then sufficiently large to create a further anticompetitive force in this market, then there is something wrong with the underlying antitrust laws. This bill is not a Cargill-Continental bill, incidentally. It is not aimed at any specific company. It is aimed rather at having a timeout on the massive orgy of mergers that is occurring at the upper level of the corporate world, $100 million or more in value, and at evaluating what is happening to the market system. If we believe in the free market, we have to nurture that free market and protect it. A free market exists when you have free, fair, and open competition. The last antitrust buster of any great note was Teddy Roosevelt at the start of the century saying the robber barons of oil could not continue to rob the American people. My point is that if we want to keep family farms in our future, we must take bold and aggressive action to make certain that competition is fair to family farms. Today, it is not. They are losing their shirts primarily because of the unfair competition that comes from substantial concentration. My point, to conclude, is we lose something very significant, much more than economists can measure, when we decide we will not care about the destruction of the network of family farms in this country. Europe has 7.5 million family farms dotting the landscape because they decided long ago that these contribute much more to their culture and economy than what the balance sheet shows in numbers. They do in this country as well. It is time we take bold action to do something about it. The first step, a modest step in my judgment, proposed by the Senator from Minnesota, myself, and others is to do something about antitrust, the concentration that is clogging the free market, taking money away from family farmers and putting us in a position where the family farm in this country is devastated. We can stop this. This is not rocket science. Good public policy directed in the right area will give economic help and opportunity to families who are attempting to farm in America. Mr. President, I yield the floor.

Mr. DORGAN. Mr. President, in my concluding 30 seconds, I will say that the Jeffersonian notion of how this system ought to work is broad- based economic ownership. That is what Thomas Jefferson envisioned-- broad-based economic ownership in this country which not only guarantees economic freedom but political freedom as well. The point is, the concentration that is occurring is unhealthy, especially in agriculture, because it is choking the life out of family farmers. We are talking simply about a timeout here. When I talked about Harry Truman's description of hogs, incidentally, that would have lost its luster had he said that nobody should become President without first knowing about green peas. He was talking about hogs because he was talking about broad-based economic ownership on America's family farms. He had it just right. That is what we are trying to get back to with this amendment.

Mr. DORGAN. I understand the point made by the Senator from Oregon. First of all, I was not here during the discussion on the floor. So I am not someone who can describe what happened during that discussion. But if the Senator from Minnesota is correct--and he may well be--that, in fact, the majority leader made representations, I think he would not want to abridge them at this point. I think it is a matter of finding the record; the majority leader has always acted in good faith to honor an agreement he made on the floor. Before denying the opportunity to the Senator from Minnesota, we ought to get that record and find out to what the majority leader agreed. I am certain what he agreed to then he would agree to today. If he agreed to allow a modification, the Senator from Minnesota should be allowed to pursue that modification. I make a point of order that a quorum is not present.

Mr. DORGAN. Mr. President, might I ask the Senator for 1 minute for the purpose of making an inquiry?