Byron Dorgan

Mr. DORGAN

Mr. DORGAN. Let me make one final point, and then I will relinquish the floor. I know my colleagues wish to speak. This is a map of the United States. This map shows in red the counties of our country that have lost more than 10 percent of their population. It shows where people are moving out, not coming in. We have cities growing in various parts of America, but in the center of our country, in the farm belt of our country, we are being depopulated. People are leaving. My home county, which is about the size of the State of Rhode Island, was 5,000 people when I left, in population. It is now 3,000. The neighboring county, which is about the same size, the size of the State of Rhode Island, had 920 people last year. The fact is, people are moving out. Why? Because family farmers cannot make a living. We have had other farm policies that have not worked. I mean we have had Democratic and Republican failures. Both parties have failed in many ways in farm policy. It is just the circumstance today where we have farm prices, in constant dollars, that are at Depression level; and we have a farm program that, like it or not, was offered by the majority party that does not work. It does not work at all in the context of what our needs are to try to save family farmers. We will have two votes today: One on a disaster package or a price relief package that offers more help, and one that offers less; one that offers some help for disaster relief, and one that does not. A whole series of differences exist between these proposals. My hope is that at the end of this day the Senate will have agreed to the proposal that Senators Daschle, Harkin, Conrad, myself, and others have helped draft and that we will be able to send a message of hope to family farmers, to say, we know what is happening, we know we need change. This is the first step. The second step, in September or October, will be to force a fundamental change in our underlying farm policy. Madam President, I yield the floor. Exhibit 1 Exported to Death the failure of agricultural deregulation (By Robert E. Scott) In 1996, free market Republicans and budget-cutting Democrats offered farmers a deal: accept a cut in farm subsidies and, in return, the government would promote exports in new trade deals with Latin America and in the World Trade Organization (WTO) and eliminate restrictions on planting decisions. In economic terms, farmers were asked to take on risks heretofore assumed by the government in exchange for deregulation and the promise of increased exports. This sounded like a good deal to many farmers, especially since exports and prices had been rising for several years. Many farmers and agribusiness interests supported the bill, and it was in keeping with the position of many farm representatives and most members of Congress from farm states who already supported the WTO, the North American Free Trade Agreement (NAFTA), and the extension of fast-track trade negotiating authority, usually in the name of supporting family farmers. But for family farmers, the Omnibus Farm Bill--and the export-led growth strategy upon which it was based--has been a massive failure. The U.S. farm trade balance declined by more than $13 billion between 1996 and 1998, and prices have plummeted. August U.S. corn prices fell from $4.30 per bushel in 1996 to $1.89, or 56%. Wheat prices fell from $4.57 per bushel in 1996 to $2.46 in 1998, a drop of 46%. The combination of export dependence and deregulation have left increased numbers of family farmers facing extinction. At the same time, U.S. agriculture becomes more centralized in the hands of large farms and national and multinational companies. Contrary to the Department of Agriculture's rosy predictions, the plight of farmers is likely to get worse under current policies. Expanding supplies are likely to outpace the growth in demand for U.S. farm products; restricted access to foreign markets will continue; and the strong dollar, actively supported by the U.S. Treasury, will further depress the prices farmers receive for their goods. It is time to end this cruel hoax on the American family farmer. The U.S. government should: reduce the value of the dollar in order to boost farm prices; shift subsidies away from large farms and corporate farmers to independent, family-run farms; increase expenditures for research, development, and infrastructure; and support new uses for farm products. freedom to fail: the omnibus 1996 farm bill For more than a half-century after the Great Depression, government policies helped create a highly successful U.S. agricultural sector by reducing risks to family farmers. Crop insurance and disaster programs reduced production risk, and a variety of price and income support programs, plus set- aside programs that paid farmers to remove excess land from production, reduced price risks. But the Omnibus 1996 Farm Bill eliminated price and income supports and replaced them with annual income payments, to be phased out, on a fixed declining schedule, over seven years (Chite and Jickling 1999, 2). The 1996 farm bill also eliminated the set-aside program, thus giving farmers, in the words of one commentator, ``the freedom to plant what they wanted, when they wanted. . . . With prices rising and global demand soaring, lawmakers and farmers were happy to exchange the bureaucratic rulebook for the Invisible Hand'' (Carey 1999). The rapid growth in U.S. agricultural exports--they more than doubled between 1985 and 1996--encouraged many farmers to buy into the deregulation strategy. But rising exports have not translated into rising incomes. Due to globalization and relentless declines in the real prices of basic farm products, the structure of American agriculture has been transformed, and, as a result, real U.S. farm income has been steady or declining for many years despite the long-run trend of rising exports. In the two decades from 1978 to 1997, real grain prices were slashed in half. Then, in 1998, prices fell an additional 10-20%, pushing many family farmers to the brink of bankruptcy.\1\ In this environment, only the largest and most capital intensive farms are able to survive and prosper. Growing concentration throughout the food chain There are about 2 million farms in the U.S., but three- quarters of those generate minimal or negative net incomes (USDA 1996). Since farms with less than $50,000 in gross revenues tend to be primarily part-time or recreational ventures, this section analyzes working farms that generate gross revenues in excess of $50,000 per year. Within this group, the number of large farms is growing while small farms are disappearing at a rapid pace, as shown in Table 1. There were 554,000 working farms in the U.S. in 1993. More than 42,000 farms with revenues of less than $250,000 per year disappeared between 1994 and 1997, a decline of about 10%. Nearly 20,000 farms with revenues in excess of $250,000 per year were added in this three-year period, an increase of about 17%. Thus, the U.S. experienced a net loss of about 22,000 farms between 1994 and 1997 alone.

Mr. DORGAN. I say to the Senator from Iowa, the answer to that question is, clearly, farm income is collapsing. It is collapsing with grain prices, with commodity prices generally, and family farmers are put in terrible trouble as a result of it. Many of them are facing extinction. I have here a report from the Economic Policy Institute that describes the almost complete failure of the current farm bill and current strategy. It is written by Robert Scott. It is about an eight- page report. I ask unanimous consent to have that printed in the Record following my remarks.

Mr. DORGAN

Mr. DORGAN. Reserving the right to object, I think the Senator from Mississippi misunderstood. My intention was to say if there is a request after Senator Wellstone to speak on that side, I understand that. But if we are going to establish an order, because I am here and would like to speak, I am happy to leave and come back at an appropriate time. If we going are to establish an order now, I would like to be in that order.

Mr. DORGAN

Mr. DORGAN. Will the Senator yield?

Mr. DORGAN. I think the points being made here are important to understand. If all we do is to pass a disaster relief package and do nothing to change the underlying farm bill, we will not have addressed problems in a way that gives family farmers hope that there is a future. Let me ask the Senator about the underlying farm bill. The underlying farm bill, the Freedom to Farm bill, has put us in a position where payments were made to farmers early on when farm prices were very high and farmers didn't need those payments. Now, when farm prices have collapsed and farmers need a bigger payment, they are still getting the same payment or a lower payment than they were getting when prices were high. In other words, there is a disconnection with respect to need. Freedom to Farm, was it not, was a transition payment. It was to transition them out of the farm program. That was the philosophical underpinning of the farm bill. Is it the judgment of the Senator from Iowa that while we do this-- and it is urgent that we must do this, pass some disaster relief bill-- that we also must accompany that with a change in the underlying farm bill, sooner rather than later, because if we do not, those farmers who are making decisions about the future will have to decide there is no hope ahead? Freedom to Farm means there are lower price supports even when prices collapse. Isn't it true that this must be the first step in a two-step process?

Mr. DORGAN. May I ask one further question?

Mr. DORGAN. Payments, as I understand them, have gone too far in the current farm bill, the underlying farm bill; too high in the disaster programs. Perhaps both programs should be adjusted lower. My understanding of the program that has been offered earlier today, by the majority party, is with the triple-entity rule, the payment limits would effectively, under that rule, be about $460,000--under their disaster package. In my judgment, that is too high. In my judgment, we should craft a farm program and craft disaster programs that target help for family-size farms. If that is not what it is about, my feeling has always been, if we are not targeting help to family farmers, we don't need a Department of Agriculture. The only reason to have all of this is to help family farmers.

Mr. DORGAN. If I might again just inquire, I had computed it under the three-entity rule, what they could achieve. If I have missed part of that and they can achieve $460,000, it simply makes the point; $300,000 is too much. Mr. President, $460,000 is way out of bounds. We ought to be trying to get a reasonable amount of support during this price collapse to family-size farms. I come from ag country, but I will not support giving $300,000 to anybody in farm country. We don't need that. That is not what a farm program ought to be about, in disaster help or in regular help, when prices collapse. That is not supporting a family-size farm; that is spending taxpayers' money in support of farm operations far in excess of family farms. That doesn't make any sense to me. Again, when I inquired of the Senator from Iowa, I was thinking of the repeal of the three-entity rule. If there is another device that goes above the $300,000, that simply compounds the aggravation with respect to who is going to get this money and how much. Let us find a way. I ask the Senator from Iowa, isn't our job here to craft a decent disaster bill, first, that gets the most help possible to family-size farms and, second, to decide we must follow it quickly by saying the current farm bill doesn't work, that is obvious to everyone--obvious because we have to pass disaster bills every year now--and we should change the underlying farm bill in the same way that provides real help to family farmers so when prices collapse they have a chance to survive?

Mr. DORGAN. Senator Conrad.

Mr. DORGAN. If I might--

Mr. DORGAN

Mr. DORGAN. Mr. President, this afternoon at 3 o'clock we will begin debate on a farm disaster relief plan that will be offered by Senator Harkin, myself, Senators Conrad, Daschle, and others. I think this will be, for those of us from farm country, one of the most important pieces of legislation addressed by this Congress this year. I know that unless one lives on a family farm, it is probably pretty hard to describe the farm crisis, but I thought I would read a couple letters from my constituents in North Dakota. Before I do, I am reminded of the story the former chairman of the House Agriculture Committee used to tell. Kika de la Garza was his name. He used to talk about agriculture and food by telling a story about nuclear submarines. He said he met with all these folks from the Defense Department and they told him about the wonders of these nuclear submarines the United States had. They told him about all of their provisions and all their fuel and their capabilities and their speed and their distance. And he said, well, how long can a nuclear submarine stay under the sea? And the admiral says: Until the food runs out. It was Kika de la Garza's way of pointing out that food, after all, is the essence of most of our existence, and we are a world, a rather fragile, large globe--as seen by the astronauts who leave our Earth and go into space--of diverse interests, diverse people. However, one thing that seems constant in this world is that we read that so many people go to bed hungry--especially children, but so many people across the world go to bed hungry. Somewhere around half a billion people go to bed with a serious ache in their belly because they do not have anything to eat. Malnutrition and lack of good nutrition among billions of others exists around the world. Then we go to the farm belt in the United States where a family is struggling to make a living on the family farm and find that its farmer loaded some grain on the truck and took it to the elevator and the grain trade said to the farmer: Your food does not have any value. Our grain trade assesses the value of your food as relatively meaningless. The farmer wonders about that because we live in such a hungry world. How could it be that what we produce in such abundance has no value? That is what our farmers wonder. Let me talk just about these farmers in the context of their words. This is a letter from a woman in the central part of our State whose family farms; she farms. Here is the kind of plaintive cry that exists from a proud and hard-working people in our country, family farmers who take enormous risks, risk everything they have to try to make a living with seeds they plant in the ground. They do not know whether they will grow; they do not know whether the natural disasters will occur--insects and hail and rain too much, too little. They don't know what will happen with this money they have invested in the soil. If they finally get their crop and they escape all of those problems, they get the crop off the ground and take it to the elevator, they don't know whether there will be a price that allows them to get a return for that crop. Those are the kinds of people who live on our family farms. They are the people who create the backbone of our society in our country. They are the people who together build a small community where they trade and do business. They build our churches in those communities. They create charities. They do the things together in a community that we forget about sometimes in our country. What is it that makes this country work at its roots? It is entrepreneurship, it is family farming, it is a sense of community, and it is a sense of sharing. Here is a family farm. This woman says in her letter to me: We aren't asking for a free ride, just the possibility of surviving. We are private people and we bear our pain alone, and we don't discuss the true situation out here on the family farm with anybody. Our neighbors are all in the same shape. The spirit of North Dakota will be gone with these people and their farms. We cannot survive without a reasonable income. How much longer will it be before people understand that we are trying to feed our family, and pay for basic necessities? But with today's income we are not saving money for retirement. We are not going on trips. We are not enjoying any of the fruits from our labor. We are slowly but surely going broke. A man who lives in southeastern North Dakota on the family farm says: It sometimes brings a tear to my eye that maybe in a year, maybe two years, I will not be around in family farming to matter anymore. This won't be easy to explain to my three young daughters. This is where I wanted to bring them up, in a rural setting of life that I was used to and that I understand. If it happens, I hope they read in their history books that it wasn't because their dad was a dumb man. It was because it was caused by policy and giant concentration of companies who want dominance. Or, from a woman named Susan, whose letter I have read previously on this floor. She lost her husband, and she had to sell their family farm. Prices had collapsed. I had an auction last week to sell the machinery so that I could help pay off some of the debts that incurred after 26 years of farming. I have a 17-year-old son who would not help me prepare for auction and did not even get out of bed the day of the auction sale because he is so heartbroken that he cannot continue to farm this land. This is a 17-year-old boy who is not a bad boy. It is just that he couldn't get out of bed to watch the auction sale of his farm because he couldn't bear to see the loss of his dream and his families' dream. He wanted to be a farmer as well. She said: My husband was an excellent manager, fully educated. He chose to farm rather than live in a big city. He had a job once with Motorola. He wanted to raise his children in a place with clean air, no crime, and good schools. He worked very hard physically and emotionally to make this farm work. And its failure was no fault of his. Something is seriously wrong with our country when we will sacrifice the family farm for a political system and an entire way of life for hundreds of years. Her point is that farmers at this point are not at fault for what is happening. The world is hungry. Most people need food. We raise it in great abundance, and family farmers are told that what they produce doesn't matter. I would like to use a couple of charts that show the dilemma that family farmers are facing not only in my State but around the country. I show this chart because some people might wonder, well, what is all this farm crisis about? I ask anyone who looks at this chart--this chart shows prices received by farmers for wheat. Most of the farmers in my part of the world are wheat farmers. Put minimum wage in this chart, if this had happened with the minimum wage; put corporate profits on this chart, if this had happened to corporate profits--what do you think the outcry would be? Put congressional salaries on this chart. If this had happened to congressional salaries, what would the outcry be? This represents the income farmers are receiving from their products when the price of every other thing is increasing. The income received by farmers is collapsing. For purposes of comparison, let me compare the price of corn and wheat with what farmers received for those commodities during the middle of the Great Depression. With the price adjusted over time, ask yourself: What do farmers get now relative to what they got during the Great Depression? Take a look at it in 1998. These are the worst farm prices price adjusted for 50 years. Families cannot make a living in this country in these circumstances. I am tempted to go into a long discussion of so-called Freedom to Farm. I didn't vote for it. It was a terrible piece of farm legislation. Some loved it. Some voted for it. Some still support it. Certainly it has a wonderful name. It reminds me of the people early on who sold insurance. They called it ``death insurance.'' Many years ago they sold ``death insurance.'' Do you know something? Death insurance didn't have a very good name for it. It didn't sell very well. Nobody wanted to buy death insurance. So what did they do? They changed the name to ``life insurance.'' It is a better sounding name, and it sold much better. So we had a farm bill called Freedom to Farm. What a nice sounding name with bankrupt policies that said family farming doesn't matter much in whatever the market system says with respect to agriculture. There has never been a free market in agriculture, and never will be. Do you think the European countries whose citizens have gone hungry will decide it doesn't matter whether they have family farmers? They will never make that decision. They will always have a farm program that insists on price supports for families on the farms in Europe. The point is that this country has decided by itself that family farming as a concept doesn't matter to its future; that whatever the market decides is what our future shall be. If the market decides that corporate farms shall farm from California to Maine, so be it. The problem with that is that all across this country we will have yardlights turned off and families leaving the farm. The economic arteries that they provide to the small towns will be closed and dried up, and those small towns will be boarded up. The people will be leaving small towns. We will see the collapse, the total collapse, of a rural lifestyle. The author Critchfield, who was a wonderful, world-wide, world-renown author, who actually grew up in Fargo, ND, said that family values have always been nurtured on the family farms in this country, and the refreshing small towns rolled to the cities from many family farms. It was always a seedbed of family values of nurturing and helping and working together. We will lose all of that because some people say it doesn't matter. We are having a debate this afternoon at 3 o'clock. It is critically important. This matters more than most people in this country will ever know. I hope that with my colleagues we can easily pass a disaster bill in the first step, and in the second that we can then pass a revision of the underlying farm bill, and say to farmers: You have a future. We want to provide you hope and help because we think you matter to our country. Mr. President, I yield the floor.

Mr. DORGAN

Mr. DORGAN. Mr. President, I ask unanimous consent to speak for 10 minutes in morning business under the time allocated to Senator Daschle.

Mr. DORGAN

Mr. DORGAN. Will the Senator yield?

Mr. DORGAN. I want to address the question to the Senator from Iowa. The discussion we had about income support for family farmers in the nature of a disaster program being income support in the form of a transition payment or AMTA, the whole notion of a transition payment is to transition farmers out of a farm program into the free market. This chart shows what has happened to the price of wheat since 1996. This chart is similar to the corn chart and the price of corn which the Senator from Iowa shared. This is what has happened to the so-called ``free market'' for wheat. The price of wheat has collapsed. The notion of a transition was philosophically by those in this Chamber who said let's transition people out of a farm program. Isn't that the base of an AMTA payment?

Mr. DORGAN. This is the right subject and the right time; we are debating the right issues. The Senator said it well. We have an economy that is growing and prospering, more people are working, fewer people are unemployed, fewer people on welfare, inflation is down. So many good things are going on in this country, but in rural America family farmers are in desperate trouble through no fault of their own. If any group of Americans found their income had collapsed, or if the salary for Members of Congress had fallen where income for family farmers had fallen, we would have dealt with this immediately and a long time ago. The same is true with corporate earnings. However, we are here through no fault of the family farmers but because they are trying to do business in a marketplace where prices have just collapsed. If we don't take action soon, we won't have many family farmers left across the bread basket of the country.

Mr. DORGAN

Mr. DORGAN. I have a motion at the desk and ask for its immediate consideration.

Mr. DORGAN. Mr. President, this is a motion to recommit. I will not seek a recorded vote on it. My motion to recommit is to recommit the bill to the Finance Committee with instructions to report back with an amendment to reserve sufficient amounts to establish an improved income safety net for family farmers and ranchers in fiscal years 2000 through 2009 by limiting the bill's new tax breaks for large corporations and those with annual incomes in excess of $300,000. I ask for its immediate consideration.

Mr. DORGAN. Mr. President, I rise to enter into a colloquy with the chairman of the Finance Committee, Senator Roth, about a tax issue that is important to farm families across the country. The Senate is on record in this year's budget resolution as supporting legislation to end the disparity between family farmers and their urban and suburban counterparts with respect to the $500,000 capital gains inclusion for homes sales that Congress passed in 1997 by expanding it to cover capital gains from the sale of farmland along with the farmhouse. Under current law, farmers receive little or no benefit from the existing capital gains exclusion because farm homes away from town often hold little or no value. It is my understanding that the chairman is supportive of the effort to end this tax inequity and will work to include this family farmers capital gains fairness proposal in conference should the final tax bill include other capital gains tax relief.

Mr. DORGAN. Mr. President, I would like to take just a few seconds and then yield to Senator Wellstone the remainder of the 1 minute. This is a motion to recommit the bill to the Committee on Finance with instructions to report back with an amendment to reserve sufficient amounts of funding to allow our Nation to reach our goal of serving 1 million children through the Head Start Program and to make sure we are not diminishing or threatening those who are receiving benefits under the WIC Program. We hope if there is enough opportunity to provide tax cuts for 9 or 10 years, Members of the Senate will agree that Head Start and WIC also ought to receive priority. I yield to Senator Wellstone.

Mr. DORGAN. Mr. President, I call up my motion to recommit.

Mr. DORGAN

Mr. DORGAN. I am happy to.

Mr. DORGAN. The economy has performed in a way no one expected. But we knew that the direction this country was headed in was wrong--$290 billion in a year in deficits, and heading up; more inflation, more people out of work. And we proposed to change the fiscal program for this country. It took some guts to vote for it because it was not very popular. But I said to the folks I represent: Don't blame me for voting for that. Give me credit for it because I stand behind this program. We did what was necessary to put an end to these Federal budget deficits and to put this country's economy back on track--over the objections of a lot of folks in this Chamber who today are telling us they have a new vision, a new idea. We have heard their ideas. An old fellow in my hometown--a small town--once told me: Never buy something from somebody who is out of breath. There has been an almost breathless quality to the efforts by the majority party, for 6 months, to get to the floor as quickly as they could with their tax cuts. If this is a battle of the pie charts, I say you win, we just give up. Here is a pie chart. Let me just show you. Let us just right at the start of this discussion say: You win; this is your pie; if it is a battle of the pie charts, you get the pie award. Republican tax breaks: $23,344 for the top 1 percent of the income earners. So you win the pie award. Of course, these folks down here, they pay taxes, too. They all go to work. They pay payroll taxes. Eighty percent of the people in this country pay more in payroll taxes than income taxes. But you breathlessly run to the floor of the Senate with a bill that says let's cut income taxes, because that allows you to give a huge portion of this pie to the largest income earners in this country. In the meantime, there are folks working today for the minimum wage, $5, $6, $7 an hour, who pay a payroll tax, a big tax, pay more in payroll taxes than they do in income taxes. Are they going to get a tax cut? No; they don't count because they ``don't pay taxes.'' They are not taxpayers according to this strategy and this kind of philosophy. That is what is wrong with it. Let me just run through a couple charts. One of my colleagues showed this earlier this morning. I want to show it again. The bottom 60 percent of the income earners, under this plan, will get $141 in tax breaks a year; the top 1 percent, $23,344 a year. And people say: How dare you tell us this benefits the rich. How dare we? It happens to be the fact. As I said, so much of politics is fuzzy. But you do not need strong glasses to see this chart. There is nothing fuzzy about this. If you decide you do not want to do this, then do not do it. It is easy to amend your bill. If it is not your intention to give the bulk of the tax cut to the wealthiest Americans, then do not do it. But do not complain to us that we are calling attention to it when you do it. If you do not stand behind it, then change it. My problem is this: I don't understand what conservatism means anymore. I thought being conservative would be to try to put this country at a lower risk with respect to future opportunities and its future economy. Conservatism apparently means put the country at higher risk. If you see a glimmer of a prospect of an estimate by an economist that there might be a surplus, rush to the floor of the Senate and propose a three-quarters-of-a-trillion-dollar tax cut. Is that conservative? It was a perfect symmetrical proposition that, on the floor of the Senate yesterday, the first vote was to waive points of order that would exist against their bill, waive points of order for a conference report that has not yet been written, for a conference that has not been held. That was, in my judgment, in perfect symmetry to the proposition they bring to the floor to provide tax cuts, paid for with surpluses that don't yet exist. What perfect symmetry. But how perfectly awful as public policy to do that and put the country at this risk. We have some choices. The choice is that we have good economic times in the future. Let us all hope and pray we do because that is good for this country. More people are working. Fewer people are on welfare. The country is growing, less inflation. It is a wonderful opportunity we have in this country. But the same people who opposed the fiscal policy that got us here have decided they want to create a new fiscal policy and a new strategy that puts all of that at risk. They know we are heading towards a serious problem.

Mr. DORGAN. I ask for an additional 5 minutes.

Mr. DORGAN. I will.

Mr. DORGAN. Well, the Senator knows the economy not only did not collapse and crash and go into a depression as a result of our new fiscal policy; the economy blossomed and grew and everything changed. The deficits were gone. The deficits were at $290 billion and growing. We changed the fiscal policy. A number of our friends stood up and said: You do this and you are going to collapse this country's economy. In fact, the fellow who has offered this amendment is an economist, taught economics. I taught economics in college. I have been able to overcome that and lead a reasonably productive life, but economists can argue forever about all these things. The question is whether we are going to put the country at risk by moving away from a fiscal policy that we know works and taking three- quarters of a trillion dollars from surpluses that do not yet exist and giving big tax breaks. This amendment is the House tax bill. I want to read for the author something he probably heard me read yesterday.