Byron Dorgan

Mr. DORGAN

Mr. DORGAN. Madam President, I have come to the floor to talk a bit about the crisis in agriculture, especially the crisis facing family farmers in my State of North Dakota. But before I do that, I would like to talk just for a moment about a piece of legislation that I understand may be brought to the floor of the Senate tomorrow--probably tomorrow evening. It is the so-called IRS reform bill. In my judgement, there is much in the IRS reform bill that has merit. The hearings that were held in the Senate, which reviewed cases of harassment of taxpayers, some unacceptable behavior by Internal Revenue Service agents, and some other items clearly made the case for the need for some changes with respect to the Internal Revenue Service. Much of this piece of legislation, as I indicated, has merit. But I want to object to something that was done in legislative darkness in putting this conference report together. It is a provision that was not in either the House or Senate bills. It is a provision that had never been debated. It had not been put in either bill in the House or Senate. Yet at the last moment, in legislative darkness, it was stuck in this conference report in the conference committee. I don't understand by what rules they operate when they say we are going to stick something in the conference report that is not in either the House or Senate bill. Here is what they did. They said in the conference report that they will reduce the holding period of assets for capital gains from 18 months to 12 months. What does that mean? Well, it means that those with incomes in this country of over $100,000 a year are going to get 90 percent of the benefit of a $2 billion tax break. That is $2 billion in tax breaks. Ninety percent of it will go to people who make over $100,000 in income. In fact, 76 percent goes to people making over $200,000 a year or more. This was done without debate. This was one of those little nuggets that was stuck in the bill. It was not debated by the House or the Senate. The same day they said we have $2 billion to give away to the upper- income people, they said we don't have enough money to provide for low- income heating assistance during the winter for low-income folks in the northern climates. This majority in Congress doesn't have enough money for that. They don't have enough money for low-income people who are trying to heat their homes. They say we are out of money, so we will cut that program off. They don't have enough money for summer jobs for disadvantaged youth. Gee, there is not enough money for that. They say there is not enough money for school construction in Indian schools, where the schools are falling apart and kids are walking through school doors into classrooms of which we all ought to be ashamed. No, there is not enough money for that. But in the dark of the legislative night, there is enough money to stick $2 billion into the purses of the richest Americans. This is done with no debate in this Congress. To the people who behave and operate like that and carry those knapsacks full of money to the upper-income folks, I just say that is a terrible way to legislate. On one hand you say you can't afford to help people who really need help, and that you have to abolish low-income energy assistance. Yet, on the other side there is plenty of money to reduce the capital gains holding period, without even a discussion in Congress about who it is going to benefit. It seems to me this is not a very happy day, when you talk about what should be our legislative priorities around this Capitol Building. I will talk more about that when the bill comes to the floor of the Senate tomorrow evening.

Mr. DORGAN

Mr. DORGAN. Madam President, for the Record, I want to read a letter from Joni Flaten from Langdon, ND. I visited with her this afternoon. She sent me a letter some while ago. She is a farm wife. We have a huge farm crisis not only in my State of North Dakota, but also in the entire wheat belt. Grain prices have collapsed. We have been hit with the toughest, worst outbreak of crop disease in a century in North Dakota. So you take crop disease that devastates the crop and then you add collapsed prices, and you have a calamity for a lot of family farmers. Joni Flaten writes: My husband has been farming now for 18 years. He is a third generation farmer, and with my oldest son graduating last Sunday, we were looking forward to some day having the fourth generation. However, that will no longer be possible for we have been unable to get an operating loan this season due to low grain prices . . . I have 3 children and have stayed home for 18 years to raise them and help my husband on the farm. We are now going to be forced into giving up the family farm, and I'm not sure if there is a lot of need for a 38-year-old combine operator/ tractor driver/trucker/run for parts person and be a mother in the work force in North Dakota. We have been a true family operation since the boys were able to see over the steering wheels . . . We have not been able to hire an extra man to help us, but we have pulled together as a family at planting and harvest times to get the job done. Now Farm Credit tells us we are unable to get a loan to operate our farm. FAHS tells us we can't have a loan and the sad truth is such a blow to all of my family. Not that you or anyone can do much about this but maybe somehow you can stop it from happening to some other family in the future. It is a good life here in ND but I think you will be 5 people less come this winter!!! This is from a woman named Joni Flaten, a farm wife, has been a farm wife for 18 years, and they are losing their livelihood, losing their family farm. Let me show you a picture of Bev and Jim McAllister from Oriska, ND. Jim McAllister came to a meeting that I had in Mandan, ND, a few months ago. You can see Jim is a pretty big guy. He stood up at that meeting and began talking about his family farm. He said his granddad farmed it, his dad farmed it, and he has farmed it for 23 years. Then his chin began to quiver and he got tears in his eyes. Then he said he is going to have to quit farming. Jim and Bev McAllister love farming. They are family farmers. They have raised their family on the farm. It is a way of life they say they wouldn't have traded for anything, and yet they are having to leave the farm. There family farm will be history. No more family farming for the McAllister family. Why is this happening? This is a picture of an auction sale in North Dakota. You can see what an auction sale looks like. There are a lot of folks standing around with an auctioneer auctioning off farm machinery. Here are pages from a North Dakota newspaper. It shows about 150 auction sales. It is all advertised in the same week's paper. These auction sales go out for a good number of weeks. This listing includes some 150 auction sales. They have had so many auction sales on North Dakota farms that they have had to call retired auctioneers back from retirement to handle the auction sales. Every one of these auction sales represents a family farmer who has tried to invest everything they have, and have worked hard, to run a family farm. And then they discover they can't make it. Why can't they make it? Well, farmers are beset by a whole range of problems these days. First, they wrote a new farm program in Congress two years ago. I didn't vote for it. I thought it was a terrible farm program. But those who voted for it--and the President reluctantly signed it--essentially said we are going to pull the safety net out from under family farmers. It doesn't matter what the circumstances are. If grain prices collapse, somehow we are going to still pull the safety net out from under family farmers and instead set up a decreasing scale of price supports, eventually hoping that family farmers will deal in whatever is the open market. They called this program Freedom to Farm. It would be like saying to the people in the workforce we are going to reduce the minimum wage to $1 an hour and we are going to call it ``Freedom to Work.'' It is the same logic, exactly the same logic. If they cut the minimum wage to $1 an hour and call it ``Freedom to Work,'' it would make as much sense as what they have done to family farmers. Here is what family farmers face in my State. Wheat costs somewhere around $4.50 to $5 a bushel to raise. When farmers plant it in the spring, in order to plant it they have to have equipment. They have to buy fuel for the tractor. They have to buy seed to plant in the ground. They have to buy fertilizer to fertilize it. They till and seed the ground, and hope and pray and cross their fingers and hope they get enough moisture. If they get enough moisture for that, and if they grow wheat, barley, or corn, they hope it doesn't hail and destroy the crop. Then they hope the insects don't come and eat the crop. And, they hope they don't experience crop disease that will in other ways ravage and decimate the crop. If all of that is avoided, then maybe in the fall they will have a crop that has come out of the ground and is high enough to harvest. Then they will buy fuel for the combine and they will go harvest the crop. When all of that is done, if they have been very lucky, they will have raised a crop that cost them $4.50 or $5 a bushel to raise, and they truck it to the county elevator, and they may get $3.10 a bushel for it. That means they go broke. On top of the collapsed prices, in North Dakota and a couple of other States, we have been ravaged by the worst possible crop disease. It is called scab. The technical name is fusarium head blight. I am told that this is the worst crop disease in this century. So these family farmers are trying to fight a crop disease that decimates their crop and then a price that is in the tank. The question is: Does anybody care? Does anybody care at all? We had a group of Senators a week and a half ago who held a press conference that said, ``Gee, this farm bill is working just fine. We think things are on the right track.'' What planet could they have possibly come from? Where on Earth did they get off the mother ship? How could they say, ``This farm bill is working just fine?" I would encourage anyone who thinks that to go buy a quarter section of land and plant yourself a crop. After you plant it, raise the crop, and then sell it, then you will have the big loss that you are going to get under this farm program. After you have done that, then come and gloat about how the farm program is working. I dare you. See, if you have the courage of your convictions. Any one of those who think this farm program is working just fine, should go buy a farm and have the opportunity to lose some money for awhile. Then you will have your banker tell you it is not working out. Only then should you come back and give us your theory and tell us how great the farm program is working. Just do it. But don't come in here and preach these platitudes about a program working when it is a disaster. Freedom to Farm has been a disaster for family farmers. Let me tell you what else is facing family farmers. There are hundreds of thousands of family farmers out there. There are almost two million of them out there. You see them with a yard light on at night dotting the countryside. They are raising a family and planting crops. Let s say they are raising livestock and they go to market. Let's assume they are taking some cows to market. What they find at the marketplace is the neck of that bottle up through which they are trying to market is squeezed by four beef packing plants. Four beef packing companies in this country control 87 percent of the market. That is right. Four firms with 87 percent of the market. Ten years ago, it was 67 percent. Now those four control 87 percent of the market. They set the market. They tell somebody out there who is herding cows and raising cattle exactly what they are going to pay them. If they don't like it, tough luck. If you are not raising cows, maybe you are raising hogs. The top four pork packers in this country control 60 percent of that market. If you go into a packing house that slaughters hogs, 60 percent of the market is controlled by only four companies. With sheep, it is 73 percent of the market that is controlled by the top four companies. How about raising grain? The top four firms in flour milling in this country have 62 percent of the market. The top four grain elevator firms control nearly 60 percent of the Nation's elevator facilities at our ports. The top four corn milling firms control 74 percent of the market. In soybean crushing, the top four firms have 76 percent of the market. When farmers try to market through the neck of this bottle, it is squeezed with an iron grip by increasing monopoly pricing power by corporations that press down on these farm prices. If that is not enough for our farmers to face, then they have to haul their grain to the markets on railroads that are increasingly monopolistic. In 1980, there were 40 class-one railroads in this country. Now there are only four. In our State, when they come through with the railroad cars, they charge $2,300 to ship a carload of wheat from Bismarck, ND, to Minneapolis. The railroad charges $1,000 to ship a carload of wheat from Minneapolis to Chicago, which is the same distance. What is the difference? The difference is that on one segment there is competition and, therefore, lower prices. In North Dakota, there is not. Therefore, they charge us more than double. We get overcharged because there isn't competition. If farmers aren't discouraged enough by prices that are in the tank or by markets that are controlled by increasingly monopolistic tendencies, then they are beset by trade problems. The Canadian trade agreement that we have is unforgivable in the way it was negotiated. The United States negotiator went to Canada and negotiated a United States-Canada trade agreement and fundamentally sold out agricultural interests. I say that understanding exactly what I am saying. I am sure the trade ambassador got other concessions. But family farmers had the rug pulled out from under them. Every day we have carloads and carloads of grain coming across from Canada into our marketplace. In my judgment this is in contravention of U.S. law. Yet, the Canadians refuse to open their books to GAO audits. In fact, they just recently refused once again to allow the GAO at my request to go up and audit their books. I think they are guilty of violating American trade laws. But they say, ``No. We are going to ship all of this product into your country and we don't intend to open our books to you.'' The United States-Canada free trade agreement is an outrage. It takes money right out of the pockets of family farmers, and it has gone on for a number of years, and nobody seems to care much. It is not just grain that comes in from Canada. It is also truckload after truckload of livestock. But nobody seems to care much. It seems to me that farmers are told in every way that somehow it is a free market out there. They are told to go participate in that free market. Yet, when it comes to this country deciding that it wants to impose sanctions on Cuba, farmers are told: Oh, by the way, you can't sell grain to Cuba. Or they are told, by the way, you can't sell grain to Iran; and, you can't sell grain to Iraq; and, you can't sell grain to Libya. Farmers are told, you have to pay the cost of those markets that are closed to you. Farmers are told they have to pay the cost of lost wheat sales to China, because we don't have the backbone to stand up to China. We should say to China, if you send us your shirts, your trousers, your shoes, and your trinkets, you then have to buy our wheat. Yet, because we don't have the backbone to say to China that as a condition of our market absorbing all her products that China must buy American grain. Farmers bear the consequences of those kinds of incompetent trade agreements and the lack of will and the lack of nerve and the lack of backbone. Farmers bear the consequence of that. Most people probably don't know much about farming. Most people probably don't care much about farming. They probably in many cases think that food comes from a carton somewhere at the grocery store. I had a fellow come to North Dakota once. He was a Member of Congress, who had never been on a farm. I decided that since he votes on farm policy issues that I should really take him out and show him a farm. And we did. We went to a dairy barn. And the dairy business is as tough a business as there is. It is hard. You get up early in the morning and milk cows. The last thing you do at the end of the day is milk cows. There is no tougher job in the country. My friend was standing there in a blue-striped suit, which is the uniform for Congress, and he saw how hard this was. This fellow and his wife were in the dairy barn on a little farm north of New Salem, ND, and they were milking about 90 cows. That is tough. It was about 5:30 in the evening. The light was shafting through the barn, and it was beautiful. And my friend, this Congressman, watched this go on, and finally he said to the farmer, ``How often do you have to do this?'' The farmer was hooking up the milk machines. It is very tough work. He says, ``How often do you have to do this?'' The farmer, whose name was George, said, ``Well, you have to do it twice a day. You have to do it every morning and you have to do it every evening.'' And my friend, the Congressman from out east, thought about that a bit, and then he said, ``George, do you have to do this on weekends, too?'' And he didn't know. Of course, you have to do it on weekends. You milk 7 days a week twice a day. But he didn't know it. He had never been on a farm. Family farmers work hard, risk everything they have. In every circumstance, all they want to do is make a decent living. And what we are finding in North Dakota and across the farm belt these days is that we have the goofiest, most detrimental farm program you can possibly conceive. What does our farm program say to our family farmers out there? What does it say to some lonely farm family living on the farm with a yard light on at night, 5 miles from the nearest neighbor? What we say to them is that you are on your own. You fight the big grain trade firms. You fight the railroad companies. You fight the meat packing plants. And, when you are done with those fights, which by the way you are going to lose, then you go ahead and fight the European Union, because they are subsidizing their farmers. You fight China which keeps your wheat out. You fight Japan that doesn't buy enough beef. You go ahead and fight Canada that floods your market and takes money out of your pocket. We tell our farmers that they have to wage those fights alone, and we know they are going to lose. Yet, we have people on the floor of the Senate who chant, ``Free market.'' All they can do is chant, ``Free market.'' There has never been a free market in agriculture. There never has been, and there probably never will be. Nobody would like it more than I would if farmers could go to the grain elevator with their 2-ton truck, haul their wheat in and get a decent price. Nobody would like that better than I would, because farmers ought to be able to get a decent price from the marketplace. What if farmers can't? Does this country care whether there are any family farmers left? It is questionable whether at least some in the Congress care at all. But, if this country cares about whether there are family farmers left, then if farmers can't get the price at the grain elevator because the market is a manipulated market that is not a free market at all, then there has to be some mechanism, as other countries have done, that says to family farmers, here is a support price in the event you can't get a decent price at the marketplace. It is the only way we will keep family farmers on the farm. Now, we don't have much choice, it seems to me, in the coming weeks. We are going to have to decide that we are either going to do something to respond to this farm crisis or we are going to see wholesale farm bankruptcies all across the country. The very survival of family farms is what is at stake. Let me just briefly go through a couple of charts. Here is what has happened to wheat prices. Wheat prices have fallen 53 percent in the 2 years since the farm bill was passed. That is what has happened to wheat prices under Freedom to Farm. If you love Freedom to Farm, then vote Freedom to Farm. But here is what has happened to wheat prices. You can chant ``Freedom'' all you like, and it is not going to help families on the farm stay on the farm. As I said when I started, chanting ``Freedom to Farm'' and pulling the rug out from family farmers, would be the same thing as coming to the floor and saying what we propose is to cut the minimum wage to a dollar an hour and we will call it freedom to work. It is exactly the same principle. That is what has happened to grain prices. They have dropped from $5.75 per bushel to $2.72 per bushel. That is why farmers are in such significant trouble. Secondly, in addition to that, there is no longer a disaster program. Now when you suffer disasters, we cannot respond to it. That is also part of the Freedom-to-Farm approach. I want to show you what has happened to family farmers in North Dakota. This is only one State. The red area means that these counties and those farmers living in those counties have been living in a county declared a disaster area for 5 years in a row. The orange areas have had disasters 4 out of 5 years. You can see that takes up the entire eastern half of the State. Incidentally, this half of my State is equal to five times Massachusetts in land mass. North Dakota is 10 times the size of Massachusetts in land size. But this half of North Dakota has had a disaster declaration for every county 4 out of 5 years. A third of our counties have been declared a disaster every year. All of our counties were declared a disaster area this past year. Family farmers can't make it when they have disaster after disaster after disaster. Yet, we have people in Congress saying to them, ``Well, so what. Go to the marketplace. It's a free market.'' It is not a free market. When you have crop disease and disasters, resulting from the wet cycle, and collapsed prices, here is what happens to income: In 1 year, there was a 98 percent reduction in net farm income. Family farmers as a group in North Dakota lost 98 percent of their net income. Think of it. Can you think of anyone else in your neighborhood, anyone in your town, who would still be on their feet if they lost 98 percent of their net income? I don't think so; not with a 98 percent loss in net income. Here is what happened to the production costs for family farmers. They have to buy tractors, right? In 20 years, here is what happened to the price of a tractor? In the past 20 years, here is what happened to the price of a combine. Look at what has happened to the fertilizer costs and what has happened to the price of diesel fuel. And then I showed you what happened to wheat prices. All of those input costs increased dramatically and wheat prices come down. Well, there are a lot of solutions to this, some of which will appease no one in this Chamber, I suppose. Yet, we must decide as a Congress whether this matters. If we have big corporations in this country that get into trouble, gosh, there are all kinds of friends there willing to fluff up their pillow and give them an aspirin and get them to bed for a short nap, maybe give them a transitional loan. It is really interesting. While I am describing to you the problems in family farming, think of what has happened during this period of time when family farmers like Jim McAllister and Joni Flaten and others are losing everything they have. Yes, absolutely everything. What is happening on the front page of your newspaper? All the biggest companies in the country are finding romance once again. They are dating, and then they are getting married, and so we have these big mergers and combinations. Gosh, they love each other. The bigger, the better. At the upper end of this economic system, things are just swimming, I guess. There are record profits, and the largest mergers in the history of humankind. And at the bottom, the folks who are out there trying to raise a family and keep a yard light on and run a family farm are going broke in record numbers. There is something really wrong with that. There is something wrong with a system that doesn't reward what this country should value most and that doesn't connect effort and reward. You talk about effort? You know, family farmers are the ones who invest everything they have, work hard, risk everything they have, and then discover at the end of it that they don't have the capability of continuing. And this country has a policy that says that is fine; we don't care about that? We are going to have a big fight in this Chamber this summer to see who cares. Some people may say they don't care. Or they may say they care, but they have constructed these goof-ball policies and they just want to stand over in a corner and chant about free markets. That is one solution, I guess. But that solution will simply continue this decline, this spiral of failing our family farms. But there are other ways to address this. One is for this Congress to write a simple farm plan that starts with one single sentence, and that sentence says: The purpose of this farm bill is to maintain a network of family farms in this country. Otherwise, you will have corporate agrifactories farm from California to Maine. There won't be anybody living in the country, and the price of food will go up. That can happen and probably will happen unless this country decides that family farmers are in this country's best interests. Thomas Jefferson used to say that it is in this country's best interests to maintain a broad network of ownership in this country. Broad-based economic ownership is critical to the success of this country. Even if one doesn't care about family farmers, one ought to care about the disparity that exists here. We should care about the massive failure at the bottom of the system affecting people who really produce real things, and the orgy of mergers that is occurring at the top with the big getting bigger. One of the things that bothers me the most about all of this is the people who are out there raising a kernel of wheat or corn or barley to take it to the market are the very ones who are failing. And then everybody else who gets hold of that seems to be making record profits. Go to the grocery store and buy a box of cereal and look at the price. Somebody took that kernel of wheat or corn or grain of rice and they might have puffed it. Now that it is made into puffed wheat, does its price bear any relationship to the price that the farmer gets for the wheat? No, not at all. The farmer gets a pitiful price that is insufficient to keep the farmer in business. But those who process it, those who haul it, those who puff it, those who crisp it, those who shred it, they are all making record profits. There is something wrong with that. There is something wrong with the method by which this system values what people contribute to our economic system. Some people might say to me, ``Gee, you come from North Dakota and you have a different view of economics. You didn't go to the University of Chicago, the School of Economics; you don't understand free markets,'' and so on. No, I understand it. I understand the difference between the theory, the chanting and all the nonsense and the reality that exists every day confronting people who produce every day. So I know there will be some in this Chamber who will be upset this summer that we are going to push them very hard on these policies. Those of us who have other ideas and believe there is a better way and different approach and believe there is a way for this Congress to stand up for family farming. We need to say to our family farmers, just as the Europeans have said to their family farmers and other countries have said to theirs, that you matter. Your presence as a producer, as a family farmer in this country, makes a difference to us. It strengthens this country. It nurtures this country. The formation of family values in America always came from family farms. The seed bed of family values came from family farms. They have rolled into small towns and rolled into the cities, nurturing and refreshing the family values of this country. So, therefore, family farming matters. It is more than just dollars and cents, and it is more than just economics. Family farming, as an economic and social policy, matters in this country. Those who have currently gained the upper hand politically on this issue have constructed a farm policy that says, ``We are going to pull the rug out from under you even as we negotiate bad trade agreements. We are going to pull the rug out from under you on support and there will be no disaster programs for massive crop disease.'' Those folks are not going to like what some of us feel we must do this summer to try to force the issue to deal with family farming. Mr. President, I think of Joni Flaten, a 38-year-old woman from Langdon, ND, who writes a letter with resignation. She and her husband have invested in their farm and in fact they are losing their farm, and they wonder what to do next. She says, ``. . . I'm not sure if there is a lot of need for a 38-year-old combine operator/tractor driver/ trucker/run for parts person and be a mother in the workforce in North Dakota.'' That is what you do to run a farm. Everybody does everything. Some, I guess, as the old saying goes, understand the cost of everything and the value of nothing. That is what we have here, in my judgment. We went through this debate a couple of years ago on the Freedom to Farm bill and I was never made quite so despondent about a U-turn in public policy as I was by those who said, ``Gee, family farmers really don't matter very much. We have this market system they can work in.'' Everybody here knows. The statistics I have just used are not foreign to anybody here. They say to the family farmer: You operate in this market system. We understand the grain trading firms have a hammerlock on price; we understand the railroads have a hammerlock on your transportation; we understand that meat packing plants have a hammerlock on your marketing system, but, still, you go ahead and operate in the free market. I think it would be perfectly understandable for farmers to start their tractors and gas them up and head them towards the byways and highways that haul policy makers to legislative forums where they extol about a free market that doesn't exist and see if they cannot persuade them that family farming matters and that their futures and their fortunes matter as well. We expect in the coming weeks to have discussions about a disaster program or an indemnification program, either one; about a price support program; about a range of other issues that need to be addressed, including the question of concentration in the meat packing industry and other issues. But through it all, I expect we will debate these issues in the month of July. Now that the Senate will be back voting tomorrow, we will see work on appropriations bills. Will we see business as usual? Will we see the kind of legislative sleight of hand that I mentioned at the start of this discussion? Will we see conference committees come to the floor of the Senate in which a $2 billion item was offered in legislative darkness that will butter the bread of the richest folks in America? Then the same people who decide they want to do that will say, ``Gee, we don't have enough money to help poor people who can't afford home heating.'' We will see all that kind of thing that goes on around here because people can do it, and they do do it, and that is unfortunate. That is not the bright side of legislating. That is the dark side of legislating. But, hopefully, enough of us will force enough of others of us in this Chamber to confront these questions. Does farm policy work when farmers are told that whatever they get in the marketplace is all there is, and the marketplace collapses like a used accordion, and the farmers are then told, well, it's tough luck; some big corporation will come and farm all that land and America will be just as well off with an agrifactory? In my judgment, it won't. I recognize I come from a town of 300 people in a small rural area of North Dakota. But the people who farm in North Dakota and up and down the farm belt are some of the best people in this country. They don't deserve to be whipsawed by an economic system that is unfair to them, that treats them fundamentally unfairly with respect to trade agreements and sanctions, and markets that are unfair, markets that are clogged. It is not the right way for this country to treat its family farmers. So, again, Mr. President, in the coming couple of weeks, the leadership of the Senate should expect to confront these issues. I hope those who feel strongly about the current farm policy will bring their notebooks, bring their theory, and sharpen their chants, because they are going to have an opportunity to tell us about free markets once again. We will have an opportunity to visit about farm families who are going broke under that very same set of circumstances. Mr. President, I yield the floor.

Mr. DORGAN

Mr. DORGAN. Mr. President, it is my hope and the hope of many of my colleagues, that, when we return following the Independence Day break, we will take up a piece of legislation called the Patients' Bill of Rights. We have, over many weeks, come to the floor of the Senate to talk about cases around the country that illustrate the critical need for us to do something about a health care system that has increasingly herded people into managed care plans in which profit and loss, or the bottom line, becomes more important than a person's health care needs. That is why the American Medical Association and many others support the Patients' Bill of Rights that we have introduced. My fervent hope is that the Congress and the Senate will find time to address this issue in July. Let me talk just for a moment about a woman, Phyllis Cannon from Newcastle, OK. In September of 1991, Phyllis Cannon was diagnosed with acute myeloblastic leukemia. She underwent a regimen of chemotherapy, which her HMO did pay for, and her leukemia went into remission. But her doctor, her oncologist, fearing that her cancer would again surface, recommended that she undergo an analogous bone marrow transplant. However, her HMO contended that this procedure was still experimental for first remission patients, and it refused to pay for the bone marrow transplant, even though a bone marrow transplant procedure was covered under the terms of her plan. Phyllis Cannon's oncologist fought vigorously for this procedure. He supplied the HMO with the latest medical literature on the procedure, knowing that an urgent transplant was critical for Phyllis' health. But, once again, the HMO denied coverage. Phyllis, her husband Jerry, and the doctor continued to fight, and finally, after another month had passed, the HMO relented and said it would pay for the bone marrow transplant. But the HMO officials, once they had agreed to cover the transplant, didn't notify Phyllis of the decision until a month later, and by then it was too late. The leukemia had returned, and Phyllis died 6 weeks later. Because Phyllis received her health care coverage from her employer, her HMO was protected under a law called ERISA. Employer-sponsored plans, like the one covering Phyllis, are governed by ERISA, which gives HMOs immunity from the harmful effects their decisions might have. So, for Jerry Cannon, ERISA left him no chance to hold the HMO accountable for its decision which led to his wife's death. And this story, one more story, of Phyllis Cannon, demonstrates the need for a Patients' Bill of Rights. Increasingly, as health care becomes more a function of profit and loss, it is straying from the central purpose of health care. Let me share with my colleague what Phyllis' husband Jerry said. This is a picture of Jerry holding a photograph of his wife. [Telling my wife that the HMO was not going to provide the transplant she needed] just devastated her. She gave up after that. Oh, it was horrible. Once I got off the phone, I could see all hope leave her. This is just one person, one person among thousands and tens of thousand in this country who now fear a health care system in which they are herded into this big chute called HMOs or managed care, and some insurance company accountant in a back room 500 miles away will make a decision about whether a medical procedure is covered. And when they make a mistake in that back room of the insurance office, no one can hold them accountable. If the doctor makes a mistake, that doctor is accountable. But the health care plan has no accountability. In fact, they have special protection under the law. We suggest as the remedy a Patients' Bill of Rights supported by the President, by the American Medical Association, and by a vast array of groups around this country that represent patients. Let me describe one more time, as I have before when I have come to the floor to talk about this issue, why the American people are demanding we do something about this problem. There was a story in the paper several months ago about a woman who was injured quite severely by a fall from a horse. Her brain was swelling, and bystanders called an ambulance to take her to the hospital. While this woman was in the ambulance, with her brain swelling, she said, ``I don't want to go to hospital X,'' which was the nearest hospital. ``I want you to take me to hospital Y,'' which was further away. She survived this brain injury and was asked later, ``Why did you, while you were in this ambulance suffering from a serious injury, ask to be taken to the hospital that was further away?'' She said, ``Because I had read a lot about the hospital that was closest, and it was all about profit and loss, all about the bottom line. I didn't want to be wheeled into an emergency room in that hospital and have someone look at me in terms of dollars and cents, in terms of profit and loss. That is not the way I wanted to be treated as a patient.'' Our Patients' Bill of Rights says that every patient has a right to know all the medical options available for treatment of their disease, not just the cheapest option. Our Patients' Bill of Rights says that people have a right to go to an emergency room when they have a medical emergency. You think that is something that is understood across this country? It is not. There are plenty of instances when people are not getting coverage for emergency room visits. Our Patients' Bill of Rights says that when someone is in need of a specialist to treat their disease, he or she has a right to see that specialist. You think that is routine in managed care organizations today? I am sorry to say it is not. And our Patients' Bill of Rights--unlike the bill that was unveiled just yesterday, I believe, in the other body--says patients have a right to sue their health plan if its decision harms them. We take away the special exemption that is given these organizations so that when a health plan makes medical judgments that can deny someone like Phyllis the cancer treatment she needs the folks who made that decision are made to take responsibility for it. That is why President Clinton and a good many in Congress, Republicans and Democrats, say it is time to do something about this issue. I suppose that one can make the case, ``Well, there's only so much money in the system.'' Doctors make the case that they want to practice medicine in the doctor's office, in the hospital room. I have met with a good many doctors in my State to talk to them about the health care system. Increasingly, they tell us that managed care organizations are taking the decisions out of the doctors' offices and out of the hospital rooms, and making them instead in some insurance office hundreds of miles away by someone who knows nothing about the patient and nothing about the patient's needs. Doctors are angry about that, and justifiably angry in my judgment. It is time--long past the time--to pass a piece of legislation that says to these organizations, there are certain basic rights that ought to be available to every American when they are ill, when they are in need of help from the health care system. Among those rights, as I just mentioned, is the right to understand, from your health care provider, all of the options available to you to help treat you, not just the cheapest option available that the managed care organization is willing to provide. Those are the kinds of things that we will address and discuss and hopefully deal with when we bring a Patients' Bill of Rights to the floor. Again, I am pleased to say this is not one of those issues that is a partisan issue. There are Republicans and Democrats who feel strongly and have spoken aggressively on the floor of the Senate and the House about this issue. The power to schedule here in the Congress is a very important and very significant power. We hope that those who have the power to schedule will put on the agenda of the U.S. Senate the Patients' Bill of Rights. No, not some watered down, lukewarm version like was introduced yesterday that is designed only to allow Congress to say it dealt with this issue. I am talking about a real Patients' Bill of Rights, one that addresses and solves the health care problems that Americans are forced to deal with every day and that, regrettably, Jerry Cannon and his poor wife Phyllis discovered a few years ago in a very tragic way. We can solve these problems, and we should. We owe it to Phyllis and Jerry and the other families around this country who confront this every day in the doctors' offices and in the hospital rooms. Mr. President, I yield the floor.

Mr. DORGAN

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

Mr. DORGAN

Mr. DORGAN. Mr. President, yesterday I introduced a bill to compensate farmers if we choose to continue using food as a weapon. I do not support the use of food in this way, but if this country chooses to use food as a weapon, then the producers of that weapon deserve to be compensated, just as all other weapons manufacturers are compensated. Today, ten percent of the world's wheat markets are off limits to American farmers because of sanctions. If we include the recent loss of the markets in Pakistan and India, sixteen percent of the worlds markets are not available. Farmers in my state, and farmers across this nation, cannot afford to pay for this foreign policy option out of their own pockets. This bill amends an existing statute which is so narrowly drawn that, despite ongoing sanctions, the statute has not required any compensation to farmers. The existing statute requires that the sanction be imposed by the executive branch of government, be unilateral, and not be joined by any other nation. It also limits compensation to three years and allows the Secretary of Agriculture to choose between direct compensation and export assistance programs. This bill eliminates all of the restrictions in the existing statute which preclude it from being of any assistance to farmers hit by declining prices caused by lost export markets. The new statute will make it clear that, if our government chooses to use food as a weapon, then those who produce that food will not alone bear the financial burden. I ask that my colleagues join me in passage of this bill to ensure fairness in our foreign trade policy.

Mr. DORGAN

Mr. DORGAN. Mr. President, I shall not use all the time allotted to me. I just want to make a couple points. There isn't any question, I say to my friend from Arizona, Senator McCain, that the base-closing rounds have saved money. I don't think there is a quarrel in this Chamber about that. Base closings save money. They do cost some money in the short term--there is no question--but they save money. I have voted for four rounds of base closures, and it is likely that I will vote for additional base closures, because we need some restructuring. But the real question is this: Will we have the information we need to make the right decision as we cast that vote? As my colleagues will recall, both the Congressional Budget Office and the General Accounting Office are skeptical about the Defense Department's savings estimates. Let me share what the Congressional Budget Office said about this a while ago: The Congress could consider authorizing an additional round of base closures if the Department of Defense believes that there is a surplus of military capacity after all rounds of BRAC have been carried out. Then the Congressional Budget Office says: That consideration, however, should follow an interval during which DOD and independent analysts examine the actual impact of the measures that have been taken thus far. About a couple dozen of the bases that have been ordered to close are not yet closed. We ought to finish the job we have done in the previous rounds before we begin a new one. I have another question about this issue, and I think all of us should bear this question in mind. What does the Defense Department mean by requesting two additional base-closing rounds at the same time that folks at DOD are talking about building and developing new superbases? Where? How big? At what cost? Let's answer some of those questions before we proceed. Finally, let me respond to the remarks of the Senator from Arizona about civilian employees. The civilian employee standard has been in law for some 20 years. This amendment modifies it or adjusts it some. But as a standard for the Department's authority in this area, the number of civilian employees is not new. So I am happy to join the Senator from Oklahoma in authoring this amendment. Again, I think some base closings will save money. I think we will do that at some point, but this is not the time. We have nearly 30 that were ordered closed that are not yet closed. Let's finish that job.

Mr. DORGAN. Mr. President, the Senator from Oklahoma closed?

Mr. DORGAN

Mr. DORGAN. Mr. President, I had not intended to come to the floor to make a few comments today until I read a story about a press conference that was held in the Senate here yesterday by some Senators about farm policy. A group of Senators held a press conference on farm policy of this country and said, ``We've got a good, solid farm policy. The problem is not the farm bill. The problem is the farm bill is not being implemented properly.'' We have a good, solid farm policy? Are they kidding? What planet are they living on if they think we have a good, solid farm policy? What we have is a new farm policy written by people who don't know much about farming and it is called the Agricultural Market Transition Act, and what it is transitioning is family farmers straight out of business. Farm families are going broke in our State in record numbers. In fact, there are more auction sales of family farmers this year than ever before, and they have had so many auction sales of family farmers in North Dakota that they have had to call auctioneers out of retirement to handle the sales. There is a lot more than statistics about losing these farmers. Farmers plant a seed in the spring and then hope it will grow. They hope it doesn't hail and insects don't come and the crop doesn't get diseased. And if it does come above the ground and then eventually if they escape all those weather disasters, they harvest in the fall and they hope maybe they will get a decent price for their crop. These families struggle hard, they work hard and they risk everything they have. Guess what? This current farm policy is a mess. We have prices that are in the tank for grain, and family farmers out there, who are raising grain and trying to take it to the market these days, discover that they have lost their shirts. And then we have people saying that we have a good, solid farm policy. I had a farm meeting in North Dakota and a fellow stood up. He was a big rugged fellow, kind of a husky build. He had kind of a black beard. He stood up and he started speaking. He said, ``My granddad farmed, my dad farmed, and I farmed for 23 years.'' Then he got tears in his eyes and his chin began to quiver, and he said, ``The problem is, I can't continue anymore.'' That is more than just losing a business. That is losing their life's dream. And, now, we have people who say we have a good, solid farm policy. I didn't vote for this previous farm bill that was passed a couple of years ago. There were people involved in writing that who wouldn't know a dairy cow from a Dairy Queen. The fact is, they don't know much about farming. I would counsel them, if they think it is a good farm policy: Go buy yourself a farm. Go buy yourself a farm, take your suit off and gas up the tractor and plant a crop. Then risk your money and hope all summer you are able to harvest, and when you do, then truck it to the elevator and sell it for $3 a bushel after you put $5 a bushel into raising it. Then add up your bank balance, and then ask yourself if you think it is good farm policy? Ask yourself, after you have lost your shirt and lost your suit and lost your savings, ask yourself whether you think it is a good farm policy. Of course it is not a good farm policy. The fact is, the little guy is going broke; the big guys are getting rich. I am talking about the folks who take the product off the farm and they haul it and they process it. They take that grain and they puff it and they crisp it, they do everything with it. The miller and grocery manufacturers and everybody else are all making money. But it is the person out there who is trying to run a family farm who is not doing well. I find it interesting, the people who do not seem to care much about that are the same people around here who bellow every day about being profamily. Nobody in politics in this town is profamily if they are not willing to stand up and be profamily farmer, in my judgment. Let me show a chart that demonstrates part of the problem in my State, the State of North Dakota. This area here, the red area, means that these folks have had a disaster declaration every single year for 5 years in a row, weather related. One third of our counties, you can't do much about that. That is not a family farm's fault. These are weather-related disasters, 5 years in a row, every year. The orange one-half our counties is 4 out of 5; the yellow two-thirds of our counties have had disasters 3 out of 5 years. In addition to having the weather problem--here is what has happened to the price of wheat. It has fallen like an elevator, straight down. The price of wheat was up here when the Freedom to Farm bill or the Market Transition Act was passed. Here is the price of wheat now at a five-year low. Here is what happened to net income to North Dakota farmers, according to the U.S. Department of Labor statistics. North Dakota's net farm income dropped 98 percent for family farmers. That is 98 percent. They virtually lost all of their income. What has happened to those family farmers out there struggling with grain prices that are terrible, and with weather problems? The price of a tractor goes up, as you can see. The price of a combine goes up. The price of fertilizer goes up. The price of diesel fuel goes up. So their income goes down, way down, and all the prices they pay for their input go up. Then what has happened to the folks who take that grain and do something with it? Bread profits, the price of a bushel of wheat goes from $5.50 to $3. Do you think you see lower bread prices in the grocery store? You don't. What happens is the profits for the folks who are making bread go right here. These folks who constructed the farm policy that we have in this country today called this ``Market Transition Act''; that is, transitioning family farmers right off the family farm. They said, ``We don't need a price support anymore for family farmers. Let them take their own risks, and if the market price for grain is dropping, too bad. Tough luck.'' So they set up a circumstance where you end up having no deficiency payments. They put, instead, a declining payment, which at the end of 7 years phases out and goes to zero. It is interesting, at the press conference yesterday that was held by some Senators, they said the problem is we cannot retreat. The rest of the world is not going to retreat. The fact is, in much of the rest of the world they understand family farmers are important and they have policies that try to support and help family farmers and keep them on the farm. It is this country that has decided, as a matter of policy by the majority party in this Congress, that family farmers really don't matter very much. Oh, giant agrifactories will farm the land from California to Maine, I suppose. They don't seem to care who farms the land, because they think family farmers don't matter. They say, ``We can fix all this. First of all, the policy is sound, and we can fix it. We will fix it with fast track, fast track trade authority.'' Gosh, there is a new idea. Fast track trade authority. We send an American trade negotiator up to Canada to negotiate with Canada; send him to Mexico to negotiate with Mexico; send him to Geneva to negotiate GATT. We had an $11 billion trade deficit with Canada and we negotiated with them and it went from an $11 billion deficit to a $23 billion deficit. Does anybody think that is going to help family farmers? And, incidentally, the trade deficit with Canada is exacerbated by a flood of Canadian grain coming to our border, undercutting our grain. It is unfairly subsidized. Nobody seems to be willing to do much about it. We have a $2 billion surplus with Mexico, negotiate a treaty, and the surplus goes to a huge deficit, $15 billion deficit. It doesn't look like that is progress to me. Do you want to see how the Mexican trade agreement works? Look at it through the eye of a potato. Try to take a potato across the Mexican border, a raw potato. You can't do that very easily, but you can see french fries coming north. Or how about a bean? How about a bean going across the Mexican border? Do you think we can export unlimited quantities of beans? I am sorry, no, our negotiator said no, we don't care much about beans. What about beer? Do you like Mexican beer? You can buy plenty of it in the United States. You like American beer, in Mexico? I am sorry, you will have great trouble finding it because our negotiators, in my judgment, did an incompetent job in negotiating the trade agreement with Canada and Mexico. And, yes, GATT. When I say the GATT agreement, do you know a ship pulled up at a dock in Stockton, CA, a few weeks ago loaded with European barley. This was feed barley, which in fact is not worth very much, probably a couple of dollars a bushel or less--subsidized by $1.10 a bushel by the Europeans, shipped into this country where we already have a surplus of barley, and guess what, it was legal. It was legal under GATT. You can do that under the trade agreement our negotiators negotiated, you can ship in barley with a subsidy that is almost 50 percent of the market price of the product. Who are these people kidding? Do we want to send negotiators out to negotiate more of these agreements, and they are going to help our country? I don't think so. The fact is, the people who held a press conference yesterday and said this farm policy works just fine don't have the foggiest idea of what is going on on the family farm. They say, ``Well, let's go to fast track and have more of this trade.'' All that has done is set you back. I am for opening foreign markets and forcing opportunities to market more of our grain overseas, but that is not what is happening with our trade agreements. I find it interesting. They said one of the ways that will solve this farm problem is farmers' savings accounts. Oh, yeah? Where are the farmers going to get the savings? If you are able to raise wheat and lose $2 a bushel for selling it, you are going to get a lot of savings, so we are going to produce farmers' savings accounts. Maybe the people who held the press conference will be able to tell farmers where they are going to get savings, when the price for wheat is in the tank, and when they pulled the rug out from under family farmers saying they don't need a safety net. They said, in effect, we don't care if there are family farmers left in this country. What we need to do, Mr. President, is to reestablish a safety net and recognize that this transition program doesn't make any sense. Yes, farmers ought to have all the planning flexibility in the world. This Congress ought to decide that family farmers matter, and we ought to do as Europe and others do and decide there ought to be some basic support mechanism for family farming. We have a minimum wage for lower-income working folks, but we say to the family out there on the farm, ``You're on your own. Oh, you can try and market your beef to big packing plants''--where four of them control almost 85 percent of the beef packing and they have a fist around the neck of the bottle. They say to the farmer and rancher, ``You go ahead and market up in that direction and the big packing plants are going to tell you what you're going to get, and if you don't like what you get, tough luck; you're out of business.'' Or people raising wheat or barley, we say, ``You can market with the grain companies. They have an iron fist around the neck of the bottle where you are going to market, and if you don't like the price, tough luck; you're out of business.'' The fact is, when we get an industry or a big special interest in this country that has a headache, you have a dozen people in the Senate rushing to see if they can't pat their pillow and give them aspirin and help them take a nap. The big interests in this country have plenty of friends around here. It's just the little guy who is left in the dust. You have family farmers who don't have a lot of money. They don't have a lot of clout. They are not like the tobacco industry. They are not able to spend $50 million or $100 million worth of advertising on their issue. The tobacco industry this week was able to turn back this tobacco bill because they were able to advertise all across this country. What about the issue of stopping teen smoking. Well, the tobacco industry won; kids lost. The tobacco industry had money, kids didn't. If you're a big interest, you have big money, and you can find plenty of folks to care about your interest in the Congress. The question is, Will there be enough people caring about the interests of family farmers in the coming weeks to decide we are going to intervene and try to save a network of family farms in this country? We ought to resurrect the safety net. There ought to be at least some sort of marketing loan that gives farmers a decent price if they don't get it from the marketplace. I much sooner they get it from the marketplace, but if it is not there, farmers need some help. They ought to get some indemnity payments for the crop diseases that have been pervasive in my State and other States. The crop disease is called scab. We ought to have a Crop Insurance Program that works, and if it doesn't work, let's make it work. We ought to have something in place that starts to do something about market concentration. Yes, let's look into the livestock industry, the railroads, the big packing plants, and in all the areas where concentration exists. All that concentration squeezes down on family farmers and takes potential profits away from family farmers. Finally, those who talk about trade, it seems to me ought to spend their time not talking about going to some sort of fast track where the record has been a disaster for this country and for our producers and, yes, especially for our farmers. They ought to talk about sanctions. We don't like Cuba, so we say we are going to have sanctions against Cuba. We don't like Libya, so we have sanctions against Libya. We don't like Iraq, so we're going to have sanctions against Iraq. We don't like Iran, so we're going to have sanctions against Iran. India and Pakistan detonate nuclear devices, so we're going to have sanctions against those countries. Ten percent of the markets in the world are off limits to farmers. These sanctions have something to do with national security decisions. The defense authorization bill deals with national security. It seems to me if you are taking markets away from family farmers, you ought to pay them for it. Why should family farmers lose markets and be told, ``Well, you're going to contribute now to our national security interest because we are taking this market away from you; yes, your price is going to go down, and, yes, you are going to lose money. Be a good American; you accept the cost.'' In virtually every other area in this country, we do something about that. If it were big business, we would come in with a big policy to reimburse them. You don't think when the big exporters lose money that they are not reimbursed? It is interesting to me that virtually every time something happens that causes a substantial disruption in part of our economy, somebody is here saying we ought to do something about it, but there is not much discussion about family farmers, and I really regret that. I know some people say, ``Well, this country is New York and Los Angeles and a few big airports in between, and what you fly over and look out at is just rural territory.'' Food doesn't come from a plastic bottle; food doesn't come from a package. It comes, in most cases, from the land, and the rural people in this country. These are people who come from my home area in Hettinger County, ND, who decided long ago they love the land and they want to live on the land. They want to raise their children on the land, and they have 500, 800, or 1,000 acres. They have risked everything they have and everything they own to try to make a living. Yet, we come along with this farm policy that says we are different from Europe, from Japan or other countries. We have a policy that doesn't care whether family farmers continue to exist. Our policy says if the marketplace gives them a decent price, fine; if it doesn't, tough luck, because we believe in the free market. There is no free market in agriculture. What an absurd contention. There has never been a free market in agriculture and will not be a free market. Our farmers are asked to compete not just against European farmers, they are asked to compete against European farmers and the European Governments. Our farmers are asked to sell in circumstances where our trade negotiators negotiate agreements and you can't get enough T-bone steak into Tokyo. Did you know that T-bone steaks are roughly $30 a pound into Tokyo? Do you know why? Because we can't get enough beef into Japan. Why can't we? Because their market is closed. We are getting more than we used to. We have a $50 to $60 billion trade deficit with Japan, but we still don't get enough beef into Japan. We don't get enough wheat into China. I can stand here all day and talk about the problems we impose on family farmers to interrupt their markets because of incompetent trade negotiators and unenforced trade agreements. We negotiate an agreement and we forget about it in a month. They were bad agreements to start with, and they are rarely enforced, if at all. I am just saying that the economic all-stars in this country are its family farmers. If this Congress doesn't decide that broad-based economic ownership matters in this country, then it will have made a very large mistake. I am standing on this side of the aisle. So that means I am a Democrat. That is how I came to Congress. I ran for the U.S. Senate as a Democrat, and I believe in the Jeffersonian strain of the Democratic Party, and its support for broadly-based economic ownership. We believe that the broad-based economic ownership provides the guarantee of economic freedom and, therefore, the guarantee of ultimate political freedoms in this country. I think that is a very, very important issue. I have come to the floor of the Senate recently talking about concentration in this country. Every day you hear about a new merger, when two huge behemoth American corporations decide to get married. We didn't even know they were dating or having secret discussions. All of a sudden, we discover they have taken out a marriage license. They love each other. What they love is the profits. Now we have bank after bank, telecommunications companies--you name it--they are all marrying up. The bigger the better. The free market in this country and the market system in this country works only when you have broad-based ownership and robust competition. Concentration means less competition. Family farmers, individuals all across this country turn on the yard light at night, worship at their local church, and try to send their kids to school, and do a good job, and make a little profit on the farm. All that those family farmers ask is to participate in a market system that works. Almost in every instance they discover that all their input costs are increased by the largest corporations in the land that produce these products. And when they go to market with the products they raise, they discover is worth very, very little. When they try to market it up through an income stream, they find that if they are marketing a cow or a hog, they are marketing through packing plants that are too concentrated to have what is called a ``free market.'' And the same is true with grain. So, Mr. President, in the coming week or so, you are going to see a lot of activity on this issue. Our family farmers deserve the same kind of interest, in their long-term economic health, as the large special interests get here on the floor of the Senate. The piece that I referenced at the start, written by Curt Anderson, an Associated Press farm writer, referenced a press conference yesterday. To all of those who attended the press conference yesterday, telling us that we have a good solid farm policy, I say nonsense; this farm policy is a miserable failure. Anybody here who cares about family farmers as I do, and anybody here who cares whether we have family farmers in this country's future ought to be coming to the floor of this Senate and helping us change this farm policy to one that really provides some help to families who are struggling in this country, trying to run their family farms. Mr. President, I yield the floor.

Mr. DORGAN

Mr. DORGAN. Mr. President, I object.

Mr. DORGAN. I object.

Mr. DORGAN

Mr. DORGAN. Mr. President, I understand that we are in morning business. However, the pending business, beginning at 2 o'clock, is the Energy and Water appropriations bill. I will make a couple of comments about the legislation brought to the floor by Senator Domenici and the ranking member, Senator Reid. I am a member of the Subcommittee on Energy and Water, and I support this piece of legislation. I think Senator Domenici and Senator Reid have done a wonderful job. I understand that a lot of the details of this legislation will not be discussed at great length today, but I want to mention a couple of things in this bill just for purposes of alerting people that there are some significant problems that are being addressed, especially in the State of North Dakota, in this legislation. One piece of this legislation deals with funding for something called the Garrison Diversion Project. Now, that is a foreign language to most people, and no one really would be expected to know much about the Garrison Diversion Project in North Dakota. But I want to give some history, just for a few brief minutes, about this project and why it is important. Many years ago, the Missouri River--which was an aggressive, large river coming out of the mountains in Montana--was untamed, and during the spring flooding it would race down over its banks, and in the lower regions of the Missouri River down in Kansas City and elsewhere you would have massive flooding, flooding, in fact, all the along the way, including cities in North Dakota. It became a huge problem. Federal officials said let us try to harness the Missouri River with a series of dams. They proposed a series of ``stem'' dams on the Missouri River and one would have been in North Dakota. In the 1940s, the Federal officials said the folks downstream want the river harnessed so it won't flood, so they don't have all the problems downstream. What we would like to do is build a dam in your State. We would like to have a flood come to your State--behind the dam--that comes and stays forever. The flood in your State of North Dakota will be a 500,000-acre flood about the size of the State of Rhode Island. So they said to North Dakotans--in the 1940s--if you will allow us to put a permanent flood in your State by building a dam and damming up the water behind it, put a permanent flood that comes and stays forever in your State, we will give you the ability to move that water behind that dam in that reservoir around the State for a whole range of important purposes, including municipal, rural and industrial water needs. People of North Dakota thought, that is not a bad deal. We will accept the flood that comes and stays forever, but then we will get this promise from the Federal Government of being able to take water from behind that dam and moving it around the State to improve water supplies to farmsteads, cities and so on in North Dakota, to provide water for industrial development and a whole range of things that will create more economic growth in the State. So they built the dam. President Eisenhower came out and dedicated the dam. Then they created the flood. So the dam is there, the flood came, the flood stayed, and we have a Rhode Island-size flood in our State forever. So we got the cost, we are now hosts to a permanent flood, but we have not yet gotten all of the benefits. And that is what the Garrison Diversion Project and the funding in this bill is about. With the consent of the Presiding Officer, I will show my colleagues, or at least provide a demonstration today for those watching, the quality of water that we are talking about in some of our communities.

Mr. DORGAN. Mr. President, I brought to the floor a little container of water. Now I know this looks very much like coffee. It is not coffee. It is well water from a well at Keith and Ann Anderson's place in North Dakota. The water that comes from that well, looking like the color of coffee, is water that will be replaced by water behind the Garrison Dam from the Missouri River. That new water, the fresh water, coming out of the mountains from Montana in that large reservoir now in North Dakota can be moved around our State and can replace this water and we will have safe, wholesome and healthy drinking water in communities and on farmsteads in our State. That is one part of this project. This chart shows what I have just showed a moment ago, the color of some of this water, the quality of the water that is being used, forced to be used in some communities, in some farmsteads in North Dakota and why we must find a supplemental supply for it. That is what this project is about. Water delivered to rural North Dakota by pipeline behind the reservoir looks like this clear water, and it replaces this brown water. Is that good for people's health? Of course it is. Is it good for our State? Is it a good investment in our future? Of course it is. Is it, more importantly, keeping a promise to a State that got the cost of a flood that comes and stays, keeping the promise to be able to use that water for economic development for our future? Yes, that is an important promise for this government to keep. For that, I appreciate the work of the Senator from New Mexico and the Senator from Nevada today on this piece of legislation. I will make a point about one additional provision in this legislation dealing with some construction money for what is called an emergency outlet at Devils Lake, ND. I show a photograph that was taken in 1965. This is a woman standing next to the bottom of a telephone pole. She is looking up to the top of the pole. The pole actually ended about here. This lake, is now way up to here, far, far above her head. This is Devils Lake, which is part of a basin the size of the State of Massachusetts. It is one of two closed basins in the United States. One is the Great Salt Lake and one is Devils Lake. In this basin the water runs down, just like any funnel, except there is no place for it to go. This lake has gone up and up and up. You can see, relative to this picture in 1965, where the water is today. This graph shows it even better. It shows what has happened over 150 years with respect to the water level. It is at 1,445.5 feet now. The cumulative damages from all of this are substantial: hundreds of millions of dollars, threatening people's homes, inundating farmland, threatening cities. This has been a huge problem, and there is no obvious solution for it--at least there is no one obvious solution. We are working on a range of things to try to resolve and respond to this issue: No. 1, upland storage, up in the upper part of the basin, to store water so it doesn't flow down to the lake, building dikes to protect cities; No. 3, raising roads, which is expensive, we have had to raise roads and then raise them again; No. 4, an emergency outlet to try to take some pressure off of that lake--an emergency outlet that would go over to the Sheyenne River. That is what is in this piece of legislation--another component of financing for an emergency outlet from Devils Lake. I know for those who have never seen or heard of Devils Lake that this doesn't mean very much. But this means almost everything to the people in the region and who are now threatened every day by this lake that continues to rise. The lake has doubled in size and tripled in volume in just a few short years. It now threatens a very substantial city in our State, cripples an economy, inundates roads, and it is a very, very serious problem. The piece of legislation before us provides another increment of construction funding for an emergency outlet. The outlet would not be huge; it would not be an outlet sufficient to let a lot of water off of the lake. But the outlet would remove a foot to a foot and a half a year of water from the lake depth. Marginally, over a period of years, it would help to take some pressure off of that lake. So that is the story of these two projects. Once again, I wanted to simply indicate that both of them are very important. We have had the cooperation of the chairman of the subcommittee, the ranking member, and others, on the appropriations subcommittee, to get some funding for both of these projects. Both projects will be good investments in our country and in our country's future. I commend the Chairman of the Energy and Water Subcommittee, Mr. Domenici, and the ranking member, Mr. Reid, for the consideration given to the people of North Dakota in the Fiscal Year 1999 Energy and Water Appropriations bill. The people of North Dakota are most thankful for the Appropriations Committee's support of the state's priority water projects, particularly the Devils Lake emergency outlet and the Garrison Diversion project. I am privileged to serve on the Subcommittee and I note that Senator Domenici, in his statement before the Full Committee, remarked that he was able to provide only between 60-70 percent of the optimal funding level for water project construction in this bill. He faced enormous difficulties in this bill brought on by a budget request which was $1.8 billion below the level required to continue ongoing construction projects at their optimal level. In the face of these difficulties, the Subcommittee supported funding for an emergency outlet from Devils Lake--a body of water that normally has no natural outlet. It's a body of water that is rising inexorably and with a vengeance, displacing people, rendering formerly productive fields and roads useless. The devastating flooding in the Devils Lake region is very similar to recent flooding at Salt Lake, Utah--the other major closed basin in the United States. A headline this week from a local newspaper reads: ``Economic costs of Devils Lake flood are staggering.'' More than 170 homes have had to be moved. Damage to roads, bridges, and other property is estimated at around $250 million. And 70,000 acres of prime land have disappeared. The long-term effects of this flood emergency on personal incomes, on regional agriculture and local businesses, and on the local tax base are as yet undetermined. But the short-term impacts are unmistakable as bankruptcies multiply, farm auctions become routine, and local governments scratch to pay for mounting costs with dwindling revenues. The Senate Subcommittee and Full Committee honored the President's request for funding to address this emergency. Some predictions are that the lake could keep on rising and eventually spill into the Sheyenne River, resulting in a flood of unknown magnitude, but sure to result in the loss of key roads, vital infrastructure and thousands of acres of farmland. Such an uncontrolled outflow from the east end of the lake, with extremely high levels of dissolved solids, would create environmental havoc for the water supplies of downstream communities. For these reasons and others, the Committee wisely provided additional funding for an emergency outlet from the west end of the lake, where water quality is compatible with the Sheyenne River. Controlled releases would also be managed so as to avoid any downstream flooding. I would further point out to my colleagues that the project must meet tough fiscal and engineering tests, besides complying strictly with the National Environmental Policy Act and the Boundary Waters Treaty of 1909. The latter requirement involves full consultation with the International Joint Commission in order to address potential concerns of the Government of Canada. Finally, let me emphasize that the appropriation for an outlet bars the use of these funds to build an inlet to Devils Lake. Despite the lingering fears of some interests, neither the FY 1999 appropriations nor the prior appropriations would allow for an inlet. Moreover, pending legislation to revise North Dakota's main water development project, the Garrison Diversion Unit, includes no provision for either an inlet to or an outlet from Devils Lake. This reflects a joint determination by the bi-partisan elected leadership of North Dakota on how to proceed with these projects. This FY99 funding bill also addresses another emergency situation near Williston, North Dakota. There again rising waters are threatening to render useless thousands of acres of farmland in the Buford-Trenton project and to displace farmers. The funding provided by the Senate will allow for the purchase of easements which are authorized under the Water Resources Development Act of 1996. This is another extremely important project which the Senate has supported at a reasonable level. The Subcommittee has added $6 million to the budget request the Garrison Diversion project, in order to meet the federal responsibility for critical water development needs in our state. Let me state that the key to economic development in North Dakota is water development and that the key to water development is the Garrison Diversion project. Let me illustrate the importance of this project. Garrison funding will ensure that Indian tribes can provide clean drinking water to tribal members that often have to use some of the worst water in the nation. It will also deliver reliable water supplies for irrigation, industry, and residential use in semi-arid regions of the state and to communities whose normal drinking water looks more like tobacco juice. Moreover, the bill will continue to support environmental enhancements and wildlife habitat by means of such Garrison programs as the Wetlands Trust. In a word, the Garrison funding will help to fulfill the federal commitment to develop a major water project in North Dakota to compensate the state for the loss of 500,000 acres of prime farmland. This land was flooded behind the garrison Dam in order to offer flood protection and inexpensive hydro power to states downstream. I would also advise my colleagues that North Dakota's elected leaders are working on legislation to revise the Garrison project to meet the state's contemporary water supply needs in a fiscally and environmentally responsible way. The Garrison revision bill will refocus the project to provide municipal, rural and industrial water supplies to regional water systems, Indian reservations, and the Red River Valley while enhancing fish and wildlife habitat. Finally, the bill before the Senate has supported funding which will allow the Army Corps of Engineers to proceed on a long-term flood protection plan for the city of Grand Forks, North Dakota on the Red River. Approximately one million dollars included will be used for preparatory studies and planning of the permanent levees to protect the sister cities of Grand Forks, North Dakota and East Grand Forks, Minnesota that were devastated in the catastrophic floods of 1997. My purpose today is to thank the leadership of the Energy and Water Subcommittee, and the Full Committee leadership, Mr. Stevens and Mr. Byrd, for addressing in this bill projects of critical importance to North Dakota. Their leadership is appreciated. Mr. President, I yield the floor and I suggest the absence of a quorum.

Mr. DORGAN

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

Mr. DORGAN

Mr. DORGAN. Mr. President, there are two lessons that we are learning here today: First, money talks; second, the tobacco companies have money and kids don't. We have heard people say this is an issue of taxing and spending. Of course it isn't. They are trying to change the subject. The issue is very simple. When the roll is called, the question is, Who do you stand for? Do you stand for the tobacco companies or do you come and stand on the side of kids? If you stand for the tobacco companies, understand this: If enough of you do it, and you prevail, this issue is not over. It is coming back and back and back again, and eventually enough Senators will stand for the interests of kids and the interests of preventing teen smoking in this country. And we will prevail.

Mr. DORGAN. Mr. President, parliamentary inquiry. I ask that the 1 minute be restored to our side of the aisle which was taken from the leader's time on the other side of the aisle.

Mr. DORGAN

Mr. DORGAN. Mr. President, today I introduce a bill that would end federal funding for the National Endowment for Democracy, known as NED. Last year the Administration asked for $30 million in NED funding, and after a Senate debate on the program, the Congress met that request. This year the Administration has requested $31 million for NED for fiscal year 1999. In my view, the time has long since come for Congress to end our subsidy of NED. Let me take a brief moment to explain why. NED began back in the early 1980s, during the darkest days of the Cold War, when Solidarity was on the ropes in Poland and a former KGB chief ruled the Soviet Union. As we all know, Solidarity has given birth to political parties that have governed Poland, and Lech Walesa, the Solidarity union leader, was elected Poland's president. The Soviet Union and the KGB are no more, and Russia has a multi-party political system. There is no Warsaw Pact. In fact, the Senate has just decided to admit into NATO some of the countries that NED used to help. The historic fall of the Berlin Wall, the breakup of the Soviet Union, and the successes of democracy worldwide in the past 15 years should make us wonder whether NED is as necessary now as it was at the height of the Cold War. Democracy is on the march worldwide, most recently perhaps even in Indonesia. Yet the American taxpayer is still coughing up $30 million a year to foot the bill for NED. It's also worth noting that when NED started, back during the Cold War, it was supposed to be a public-private partnership. Federal money was supposed to ``prime the pump'' of private contributions. Private corporations, foundations and philanthropists were supposed to foot much of the bill. But it didn't happen. Since 1984 the American taxpayer has spent over $360 million on NED. And according to NED's most recent annual report, in 1996 NED's total revenue was $30.9 million, but its revenue from nonfederal sources was only $585,000. In that year, it took 53 taxpayer dollars to leverage one private dollar contributed to NED. These statistics show that NED is a very poor investment for the Federal Government. There is no public-private partnership funding NED. It's the public, the Federal Government, all the way. Of course, the Federal Government has some private partners when it comes to spending NED funds. Year after year, NED distributes taxpayer dollars to the same ``core grantees.'' This is despite the fact that everything we know about good government says that there should be competitive contracting for government work. NED isn't one sole-source contract. It isn't just one set-aside. It's four. Four private institutions got just over $4 million each in 1996 and 1997. These private groups are: the National Democratic Institute, also known as the Democratic Party; the International Republican Institute, better known as the Republican Party; the Free Trade Union Institute, which is really the AFL-CIO; and the Center for International Private Enterprise, which we all know as the Chamber of Commerce. Mr. President, these four ``core grantees'' get the lion's share of NED funding, year after year. As our former colleague Senator Hank Brown of Colorado said four years ago, ``How long does it take for people to realize that what we are doing is not promoting democracy, but promoting these four organizations?'' What do these four groups do with this money? They use it to send well-connected Democrats and Republicans, and business and labor leaders, around the world. These folks visit various countries and try to promote democracy. It sounds fine until you consider that this activity duplicates work done by the United States Information Agency, the Agency for International Development, and the Departments of State, Justice and Defense. In 1996 alone, AID spent $390 million, USIA spent $355 million, and the Defense Department spent $38 million, all to promote democracy. There's no reason for another Federal program to achieve this same goal. The American people know that the time is past when we could spend money we didn't have on programs we don't need. Last year, I thought that my hope of ending federal funding for the National Endowment for Democracy had come true. The Commerce-State- Justice appropriations bill actually zeroed out this program. Let me quote from the Appropriations Committee's report language on this issue: The Committee does not recommend funding for fiscal year 1998 for the National Endowment for Democracy. . . . The NED was originally established in 1984 during the days of the cold war as a public-private partnership to promote democratic movements behind the Iron Curtain. Limited U.S. Government funds were viewed as a way to help leverage private contributions and were never envisioned as NED's sole or major source of continuing funds. Since the cold war is over, the Committee believes that the time has come to eliminate Federal funding for this program. Unfortunately, the full Senate approved a floor amendment that restored the requested $30 million for the NED. So I am here today to call on Senators to accept the dictates of common sense this year, and to accept the recommendation of the Appropriations Committee. We are having great difficulty allocating funding among the different discretionary programs. The Senate is having to make difficult choices about federal spending. We need to determine what is a priority. I strongly believe that NED no longer deserves the Senate's support. The Cold War is over, and we have other, more effective ways to promote democracy abroad. I hope that the Senate will act favorably on the bill that I am introducing today, and that we will save the American taxpayer $30 million a year.

Mr. DORGAN

Mr. DORGAN. Mr. President, today I introduce a bill that would end federal funding for the National Endowment for Democracy, known as NED. Last year the Administration asked for $30 million in NED funding, and after a Senate debate on the program, the Congress met that request. This year the Administration has requested $31 million for NED for fiscal year 1999. In my view, the time has long since come for Congress to end our subsidy of NED. Let me take a brief moment to explain why. NED began back in the early 1980s, during the darkest days of the Cold War, when Solidarity was on the ropes in Poland and a former KGB chief ruled the Soviet Union. As we all know, Solidarity has given birth to political parties that have governed Poland, and Lech Walesa, the Solidarity union leader, was elected Poland's president. The Soviet Union and the KGB are no more, and Russia has a multi-party political system. There is no Warsaw Pact. In fact, the Senate has just decided to admit into NATO some of the countries that NED used to help. The historic fall of the Berlin Wall, the breakup of the Soviet Union, and the successes of democracy worldwide in the past 15 years should make us wonder whether NED is as necessary now as it was at the height of the Cold War. Democracy is on the march worldwide, most recently perhaps even in Indonesia. Yet the American taxpayer is still coughing up $30 million a year to foot the bill for NED. It's also worth noting that when NED started, back during the Cold War, it was supposed to be a public-private partnership. Federal money was supposed to ``prime the pump'' of private contributions. Private corporations, foundations and philanthropists were supposed to foot much of the bill. But it didn't happen. Since 1984 the American taxpayer has spent over $360 million on NED. And according to NED's most recent annual report, in 1996 NED's total revenue was $30.9 million, but its revenue from nonfederal sources was only $585,000. In that year, it took 53 taxpayer dollars to leverage one private dollar contributed to NED. These statistics show that NED is a very poor investment for the Federal Government. There is no public-private partnership funding NED. It's the public, the Federal Government, all the way. Of course, the Federal Government has some private partners when it comes to spending NED funds. Year after year, NED distributes taxpayer dollars to the same ``core grantees.'' This is despite the fact that everything we know about good government says that there should be competitive contracting for government work. NED isn't one sole-source contract. It isn't just one set-aside. It's four. Four private institutions got just over $4 million each in 1996 and 1997. These private groups are: the National Democratic Institute, also known as the Democratic Party; the International Republican Institute, better known as the Republican Party; the Free Trade Union Institute, which is really the AFL-CIO; and the Center for International Private Enterprise, which we all know as the Chamber of Commerce. Mr. President, these four ``core grantees'' get the lion's share of NED funding, year after year. As our former colleague Senator Hank Brown of Colorado said four years ago, ``How long does it take for people to realize that what we are doing is not promoting democracy, but promoting these four organizations?'' What do these four groups do with this money? They use it to send well-connected Democrats and Republicans, and business and labor leaders, around the world. These folks visit various countries and try to promote democracy. It sounds fine until you consider that this activity duplicates work done by the United States Information Agency, the Agency for International Development, and the Departments of State, Justice and Defense. In 1996 alone, AID spent $390 million, USIA spent $355 million, and the Defense Department spent $38 million, all to promote democracy. There's no reason for another Federal program to achieve this same goal. The American people know that the time is past when we could spend money we didn't have on programs we don't need. Last year, I thought that my hope of ending federal funding for the National Endowment for Democracy had come true. The Commerce-State- Justice appropriations bill actually zeroed out this program. Let me quote from the Appropriations Committee's report language on this issue: The Committee does not recommend funding for fiscal year 1998 for the National Endowment for Democracy. . . . The NED was originally established in 1984 during the days of the cold war as a public-private partnership to promote democratic movements behind the Iron Curtain. Limited U.S. Government funds were viewed as a way to help leverage private contributions and were never envisioned as NED's sole or major source of continuing funds. Since the cold war is over, the Committee believes that the time has come to eliminate Federal funding for this program. Unfortunately, the full Senate approved a floor amendment that restored the requested $30 million for the NED. So I am here today to call on Senators to accept the dictates of common sense this year, and to accept the recommendation of the Appropriations Committee. We are having great difficulty allocating funding among the different discretionary programs. The Senate is having to make difficult choices about federal spending. We need to determine what is a priority. I strongly believe that NED no longer deserves the Senate's support. The Cold War is over, and we have other, more effective ways to promote democracy abroad. I hope that the Senate will act favorably on the bill that I am introducing today, and that we will save the American taxpayer $30 million a year.

Mr. DORGAN

Mr. DORGAN. Mr. President, the Senator from New Mexico makes a point that I feel strongly about. If we don't finish this product now, if we don't get a tobacco bill completed in the Senate, in my judgment, we probably will never get it done. We have come a long, long ways. We are, I think, close. I don't think there is any question but if the tobacco bill were voted on by the full Senate, it would pass. I don't think there is much question about that. There are some in the Senate, however, who are intent on trying to kill the legislation. So we have been tied up here in legislative knots, going through some amendments, but going through a process that has led some to conclude that maybe this bill ought to get pulled, maybe we ought to go to something else. I ask the Senator from New Mexico, as it was stated this weekend by the majority leader that perhaps we have to move to some other legislation, is it the belief of the Senator from New Mexico that if we don't get this bill completed now, it is likely we will never get this piece of legislation?

Mr. DORGAN. Mr. President, if the Senator would yield further, I point out that I, and I think a number of others in this Chamber, would resist strongly an attempt to move to some other piece of legislation. That would require a motion to proceed, which obviously some of us would resist strenuously. We think it is important to finish this bill. I think that some have missed the point. You go through this process and have a debate. Some have missed the point. The point here is about trying to prevent children from smoking in this country and trying to prevent the tobacco industry from targeting kids with their tobacco products. That is not rocket science. We can do that. The piece of legislation that is before the Senate is a good piece of legislation which has a series of things in it which are very important--smoking cessation programs, counteradvertising programs, prohibitions against advertising in ways that will target children, getting rid of vending machines in areas where children have access to cigarettes--a whole series of things that try to make certain that in the future we will not have the tobacco industry able to target kids to addict them to cigarettes. We know every day 3,000 kids start smoking in this country. We know 1,000 of those 3,000 will die. We know 300,000 to 400,000 people in this country die every year from smoking and smoking-related causes. We also know that smoking cigarettes and the use of tobacco products is legal for adults and will always remain legal. No one is suggesting that it be illegal. But we are saying with this piece of legislation that we ought not have a tobacco industry get its new customers from teenagers. I read yesterday and the day before a whole series of statements we have now unearthed from the bowels of the tobacco companies which demonstrate that they understood that their customers are teenagers, their future customers come from teenagers. If you don't get them when they are young, you don't get them. The industry's own documents suggest that--that if you don't get them when they are kids, almost never will they reach age 30 and try to evaluate, What am I missing from life? come up with the idea they are missing smoking, and go out and start getting addicted to cigarettes. That almost never happens. I say to the Senator from New Mexico, and I ask him this question, it seems to me we have kind of lost our way here on this bill as it has been on the floor of the Senate for some weeks now. It seems to me that we have, through amendments, gone zigzagging across the landscape here and forgotten what the central premise of this piece of legislation is; that the central premise, is it not, is to try to make certain that we are not having an industry targeting our kids to smoke, and also providing a whole series of steps--smoking cessation programs, investment in health research, counteradvertising, and a range of other things--to try to make sure that will not happen in the future; is that not the case?

Mr. DORGAN. Mr. President, let me take another minute or so of my time. I know the Senator from Kansas wishes to seek the floor. Virtually everything we do represents a series of choices. We have a choice now here in the Senate; we can choose to succeed, or we can choose to fail on this tobacco legislation. As Senator Conrad has indicated, we have come a long way, and we have had people all along the way who are detractors. I can remember how controversial it was just to put a warning label on the side of a pack of cigarettes. Do you remember how controversial that was? It was the right thing to do, obviously. Would someone vote now to take the warning label off? I don't think so. The legislation before the Senate is very important. We as Senators and as a body can choose to succeed or fail. To those who want to choose to fail and say this bill cannot become law, we are going to pull the bill and go to something else, we simply want to say that some of us will resist that with great effort. We will resist every decision to move to other legislation before we complete work on this legislation. We hope the bipartisan leadership of the Senate will decide that this bill is important enough to finish, and it can be finished, in my judgment, this week or next week. We have traveled too far a distance on this to fail in the final week on a piece of legislation this important to our country. Mr. President, I yield the floor. Mr. ROBERTS addressed the Chair.

Mr. DORGAN. I wonder if the Senator from New Mexico would yield?

Mr. DORGAN

Mr. DORGAN. Mr. President, a couple of weeks ago a couple of Members of Congress came to the floor of the Congress to announce Bob Hope's death. Bob Hope was having breakfast in California at the time. This weekend, we had some legislators talking about the tobacco bill and predicting that the tobacco bill was dead. Well, the tobacco bill, or the tobacco legislation, that is being debated by the U.S. Senate is not exactly having breakfast--clearly, this has been a struggle to get a piece of legislation through the Senate dealing with the tobacco issue--but, the tobacco bill is not dead by any means. I hope that those who tell the American people that the Senate cannot pass a tobacco bill will understand that the Senate fully intends to pass legislation dealing with tobacco. I want to describe just for a moment why I think those who predict its death are wrong, and why those who call this a bad bill are wrong, and why those who believe that Congress will eventually not act on tobacco are wrong. Let me go back to the start of this issue. Why are we debating a tobacco bill? Why tobacco legislation? Simply put, it is because we now know things we did not know 25, 50, and 100 years ago about tobacco. We know that tobacco can kill you. The use of tobacco, we know, causes from 300,000 to 400,000 Americans a year to die from smoking and smoking-related causes. Tobacco is a legal product and will remain a legal product. But we also know that it is illegal for kids to smoke, and we know that tobacco companies have targeted our children to addict them to nicotine. The majority leader this weekend said, ``Well, the tobacco bill is so bad that it should not be passed in its current form,'' and so on and so forth, and ``If we can't get to a conclusion on it this week, we've got to move on.'' That is another way of saying, ``We're going to leave this carcass in the middle of the road and just drive forward.'' Fortunately, we learn a lot as we go along here in this country and in life. One of the things we ought to learn is, this piece of legislation dealing with tobacco, and especially dealing with the tobacco industry targeting America's children--we must resolve this issue; we must pass this legislation. Let me describe for my colleagues some of the evidence that has been unearthed from depositions and from court suits, and so on, in recent months. A 1972 document by a tobacco company, Brown & Williamson. It says: It's a well-known fact that teenagers like sweet products. Honey might be considered. Talking about sweetening cigarettes because teenagers like sweeter products--does that sound like a company that is interested in addicting kids to their product? How about Kool--the cigarette Kool? KOOL has shown little or no growth in share of users in the 26 [and up] age group. This was written by a Brown & Williamson person. It is a memo from 1973. It says: . . . at the present rate, a smoker in the 16-25 year age group will soon be three times as important to KOOL as a prospect in any other . . . age category. Talking about their 16-year-old customers for Kool cigarettes. Marlboro's phenomenal growth rate in the past has been attributable in large part to our high market penetration among young smokers . . . 15 to 19 years old . . . This is according to a report by a Philip Morris researcher. You say that they are not targeting kids? 1974, R.J. Reynolds. A marketing plan submitted to the board of directors of the company says: As this 14-24 age group matures, they will account for a key share of the total cigarette volume--[in the] next 25 years. Or if you are still unconvinced--that there is no need here; that the industry has not targeted our children--how about a Lorillard executive, a cigarette company executive, in 1978: The base of our business is the high-school student. A cigarette company executive saying, ``The base of our business is the high-school student.'' Philip Morris, 1979, says: Marlboro dominates in the 17 and younger category, capturing over 50 percent of this market. It is like they should have a fiesta here. They capture over 50 percent of the 17-year-old and under market. And you say the industry isn't targeting kids? Well, cigarette smoking is addictive. It is legal but addictive. Here is something that was picked up this morning. It is actually a piece from Marlboro. It talks about river rafting, cookouts, fly- fishing, bonfires, mountain biking, and bands. And it is advertising, of course, cigarettes. It has the warning, as we require by law, ``Surgeon General's warning: Smoking causes lung cancer, heart disease, emphysema, and may complicate pregnancy.'' The question for the Congress is: Do we want an industry to try to addict our children to this product? And the answer is no. And if not, if we do not want the industry to continue to do that--and they have in the past; the evidence is quite clear--if we do not want them to continue to do that, if it is our position that it is wrong for the industry to target children--and that is our position--then the question is, What are we going to do about that? Is the Congress going to pass a piece of legislation that prohibits this industry from targeting our children? And that is the legislation that is on the floor of the Senate. Some do not like it; and some, for their own reasons, want to kill it. But they will be on the wrong side of history if they succeed in killing this legislation. Oh, we have done a lot of things over the years that were controversial at the time we did them. Even things like giving women the right to vote in this country was controversial, wasn't it? For more than half of this country's history, women were not allowed to vote. Or skip forward to the Civil Rights Act of the early 1960s. Who in this Chamber now would decide that the things that we provided for in the Civil Rights Act in the early 1960s they would now support? A good number of them opposed it back then. Things like requiring labels on food--that was controversial. Requiring companies that produce our food in the grocery store to actually put something on the label that states the fat content, the sodium content, or the carbohydrates--that was big government intruding on those who manufacture the food. How could we require that someone put on the can of peas what is in that can of peas? We did it. Now you can go down the grocery store aisle and see traffic jams of people, taking that can or package, and trying to figure out what is in it, how much fat it contains, how much sodium is in a product. It was controversial at the time. A lot of things that were controversial at the time turned out to have been the right thing. The tobacco bill will turn out to be the right piece of legislation for this country. How many in this Chamber who spend a lot of time on airplanes remember, going back 10 or 20 years, getting in the middle seat of a 727 and as the airplane takes off, the person in the seats on the right-hand side and the left-hand side light up their cigarettes. Because then there were no restrictions on smoking anywhere on airplanes? Eventually they put the smokers in the back of the plane. That meant everybody breathed the same smoke, although they were separated by distance. Then, finally, you shall not smoke on airplanes in this country. It was controversial at the time. I voted for that. It was the right thing to do. This piece of legislation on the floor of the Senate talks of a range of issues, most especially the issue of teen smoking. In an industry that knows the only customers it has access to are kids--because almost no one reaches adult age in this country and tries to figure out what they have missed in life and comes up with the idea of smoking; nobody 30 or 40 years old says what will really enrich my life is if I started smoking--kids are the only source of new customers for tobacco companies. The tobacco companies say it themselves in the research material we have provided. This legislation provides a range of programs, including providing smoking cessation programs, trying to help people who are now addicted to quit; prohibits advertising that targets our children; provides for counteradvertising, that actually tells our kids that smoking is not cool and that smoking can cause lung cancer, heart disease, emphysema and so on. The resources in this bill help us invest in the National Institutes of Health to continue to develop the breathtaking achievements in medical research that we see day after day and month after month in the National Institutes of Health. It seems to me this is a remarkable bargain for the American people. This legislation, I think viewed 10 years from now, will be seen as something that was right for the time. Ten years from now, those who vote against this legislation will say, ``How on Earth did I ever come to that conclusion?'' Of course it made sense for us as a country to decide cigarette companies cannot target our children. Of course it made sense for us to have counteradvertising and smoking cessation programs and more investment in the National Institutes of Health to deal with the range of medical problems caused by smoking. Of course that made sense. So let me conclude by saying that those who this weekend were on the talk shows and were speaking to the press about what will happen to this tobacco bill, they have prematurely announced its death. This tobacco bill is not dead. There are some who wish it were dead. There are some who this week will work against it and will try with every bit of energy they have to kill it, but they will not succeed because this is the right thing to do. We have made the case effectively that at this time in this country we ought not allow the tobacco industry to target our kids to the addiction of cigarettes. This piece of legislation moves us in that direction in a very, very significant way. The majority leader and others who speak about this legislation need now, I think, to provide some leadership to help us pass this legislation. A bipartisan group of Senators, including Senator McCain, who has spent a great deal of time on this legislation and someone for whom I have great admiration and I commend him for his work, Senator Conrad on our side and others, a great many people have spent a lot of time crafting this in a bipartisan way. Now we need this week to finish a job and pass it through the Senate and get it to a conference with the House so that the American people can look at the job the Congress has done. And then make the judgment that they have done a good job on behalf of our children, they have stood up for our children and have told an industry that addicted our children, you can't do that anymore; we are not going to let you do that anymore. That is the right position for our country. I know that the Senator from Rhode Island is about to talk about an amendment, I think, that he has pending in the Senate. Let me, as I conclude, also commend him for the work he has done. The Senator from Rhode Island, the Senator from Illinois, Senator Durbin, and a number of others have worked a great deal on this legislation, including the Senator from Massachusetts, and I mentioned the Senator from Arizona, Senator McCain. This is a tough piece of legislation. The toughest thing in the world is to propose. The easiest thing in the world is to oppose. It doesn't take any skill to oppose. I think it was Mark Twain who once was asked if he would be involved in a debate and he immediately accepted, ``provided I can take the opposing side.'' They said, ``You don't even know the subject of the debate,'' and he says, ``I don't have to, as long as I am on the opposing side.'' It takes no time to prepare. We are proposing a piece of legislation in the Senate dealing with smoking, tobacco and children that is right for the time. Those who stand in its way will be on the wrong side of history. Those who predict its death are dead wrong, because we fully aim, this week or next week, to pass this legislation through the U.S. Senate. I yield the floor.

Mr. DORGAN

Mr. DORGAN. Madam President, I am interested to see that at a time when the tobacco bill is on the floor of the Senate, we are debating the marriage tax penalty. It is unique, I suppose, that in the U.S. Senate one does not have to talk about the subject that is on the Senate floor at that time. We experienced, earlier in this session, the majority leader bringing to the floor a piece of legislation which created a parliamentary situation where no one could offer any other amendments except those he would prefer to have offered because he was afraid someone on this side of the political aisle would offer an amendment not related to the subject. So we had a legislative logjam on a number of pieces of legislation. That was his right, and I complained about it at the time. And at the same time, the majority leader was complaining that somebody might offer an amendment that had nothing to do with the bill on the floor of the Senate. Well, here we are. We have a tobacco bill on the floor of the Senate and what have we been talking about now for a number of days? The marriage tax penalty. We had a tax bill on the floor of the Senate some long while ago and we debated that. But now, on the tobacco bill, we are talking about the marriage tax penalty. I don't think the Senator from Texas will get anybody to swallow the bait here that a marriage tax penalty is justifiable. The Congress has worked on the marriage tax penalty attempting to fix it, to reduce it, to abolish it, and to otherwise change it for a long, long time. Long after this debate is over, there will be discussion about this so- called marriage tax penalty. Should it be abolished, should it be fixed? Of course, it should. Easier said than done, but we ought to do it. But we are now on a tobacco bill. I bring this discussion back to the reason that we have a bill on the floor of the Senate dealing with tobacco. I want to read again, for some of my colleagues and those who are interested, what persuades those of us in the Senate who support this tobacco legislation and think this legislation is necessary. I was on the Senate Commerce Committee when we passed the legislation out of the committee. I voted for it, and I supported it. Senator McCain was the principal author of the bill, and Senator Conrad, my colleague from North Dakota, has also written a piece of legislation which found its way, or at least in large part, into the McCain legislation. I compliment both of them, and others, including the Senator from Massachusetts, and a number of others who have worked hard on this legislation. But why tobacco legislation? Because many of us believe that it is inappropriate in this country to allow the tobacco industry to continue to try to addict America's children to nicotine. Some say, ``Well, gee, that is not what has been happening.'' Of course it has been happening. Several court cases have now unearthed the memoranda and the information from the bowels of the tobacco companies that they didn't want to disclose but were required to disclose. This information showed exactly what their strategies were in recent decades to try to addict America's children to tobacco. Almost no one reaches adult age and discovers that what we really wanted to do and have failed to do is start smoking. Does anybody know a thoughtful adult who scratches their head and says, ``Gosh, what have I missed in life? I know what it is. I need to start smoking. That is what I am missing. That is what will enrich my life.'' Did you ever hear of anybody doing that? I don't think so. The only way you get new smokers is to get kids to smoke. On Friday, I described for my colleagues some of the data and the memoranda that were in the files of the tobacco companies. I want to read some of them again, because I want us to be talking about the subject of tobacco on the floor of the Senate. But why do we want to do something to tell the tobacco industry they can't addict America's children to nicotine when it is legal to smoke, and it will always be legal to smoke. It is an adult choice. But it is not legal, and ought not be legal nor morally defensible for anyone to say we are going to try to addict 15-year-old kids, or 13-year-old kids, to our cigarettes in the name of profit. So let me proceed to describe some of the documents, that we have unearthed in various court cases and elsewhere, that describe what the tobacco industry has done. At the end of that, I will ask my colleagues if they think this behavior is defensible. If you don't, then we ought to pass this kind of legislation and stop talking about other subjects. In 1972, Brown & Williamson, a tobacco company: ``It is a well known fact that teenagers like sweet products. Honey might be considered.'' In 1972, they are talking about adding honey to cigarettes. Why? Because kids like sweet products. Does that sound like a company that is trying to addict kids to cigarettes? It does to me. In 1973, RJR, a tobacco company, says: ``Comic strip type of copy might get a much higher readership among younger people than another type of copy.'' They are talking about advertising. Does this sound like a cigarette company that is interested in trying to get kids to smoke? It does to me. In 1973, Brown & Williamson: ``Kool''-- This is a quote. The cigarette brand Kool: Kool has shown little or no growth in the share of the users in the 26 and up age group. Growth is from 16- to 25- year-olds. At the present rate, a smoker in the 16- to 25- year-old age group will soon be three times as important to Kool as a prospect in any other broad age category. This is a company that is talking about 16-year-olds and how attractive it is that 16-year-olds are using their cigarettes. Philip Morris, 1974: ``We are not sure that anything can be done to halt a major exodus if one gets going among the young.'' ``This group''--now speaking to the young, according to Philip Morris--``follows the crowd, and we don't pretend to know what gets them going from one thing or another. Certainly Philip Morris should continue efforts for Marlboro in the youth market.'' Is this a company looking at selling cigarettes to kids? I think so. In 1974, R.J. Reynolds, they write, speaking of kids: ``They represent tomorrow's cigarette business. As this 14- to 24-age group matures, they will account for a key share of the total cigarette volume for at least the next 25 years.'' This is a company talking about the 14-year-old smoker. In 1975, a researcher for Philip Morris writes: ``Marlboro's phenomenal growth rate in the past has been attributable in large part to our high market penetration among young smokers 15 to 19 years old. My own data, which includes younger teenagers, even shows higher Marlboro market penetration among 15- to 17-year-olds.'' Does anybody who reads believe after reading this that the tobacco companies weren't vitally interested in selling cigarettes to these kids? Of course they were. In 1975, RJR-Nabisco talks about increasing penetration among the 14- to 24-year-olds: ``Evidence is now available to indicate the 14- to 18- year-old group is an increasing segment of the smoking population. RJR Tobacco must soon establish a successful new brand in this market if our position in the industry is to be maintained.'' In 1976, that is RJR saying about 14- to 18-year-olds that we have got to get a new cigarette out there to attract these people if we are going to retain our position. In 1978, the Lorillard Cigarette Company said the following: ``The base of our business is the high school student.'' ``The base of our business is the high school student!'' This from a tobacco company. In 1979: ``Marlboro dominates in the 17 and younger category capturing over 50 percent of the market,'' Philip Morris writes proudly. In the name of profit, they say: Our cigarettes dominated the 17-year and younger category. We capture over 50 percent of the market. They make it sound like a county fair, don't they? A blue ribbon--a fat steer gets a blue ribbon. We were able to get 15-, 16-, and 17- year-old kids to smoke. We win. Now tell me that this industry doesn't target young kids to smoke. Marlboro Red, a derivative of Marlboro, I guess--I have not seen a Marlboro Red cigarette. But a Marlboro Red in 1981, a Philip Morris researcher writes: ``The overwhelming majority of smokers first begin to smoke while in their teens. At least part of the success of our Marlboro Red during its most rapid growth period was because it became the brand of choice among teenagers who then stuck with it.'' I think maybe ``stuck with it'' is a misnomer. I think maybe ``who were addicted to it'' rather than ``stuck with it.'' The whole purpose, of course, is you attract a 15-year-old to start smoking and you have got a customer for life. Smoking is legal in this country, and it will always be legal. Adults have the right to make the choice to smoke. Three hundred thousand to four hundred thousand people a year die in this country from choosing to smoke, from smoking and smoking-related causes. Three hundred thousand to four hundred thousand people a year die from having made that choice. You have heard the statistics: every day, 3,000 kids will start to smoke; 1,000 of them will die from having made that choice. The question for us is, will we as a country continue to sit on our hands and say to the tobacco industry, ``It is all right, we understand your future customers are our children; it is all right, our sons and daughters are available to be a marketing target for you? Should it be all right to say that you can advertise to them; you can make pitches to them; you can provide all kinds of subtle approaches to our kids that smoking is cool, smoking is something you ought to do, smoking tastes good, smoking feels good, your peers smoke so you ought to smoke''? Is that something this country wants? Is that something this country is going to allow to continue? I don't think so. Let me continue. The tobacco industry in 1983, says Brown & Williamson, will not support a youth smoking program which discourages young people from smoking. In 1983, you heard all of the references that I used about the pitches that were made by the industry to the children and the importance they placed in having those children as their customer base. And then in 1983 they say this tobacco company ``will not support a youth smoking program which discourages young people from smoking.'' Well, I guess that is because they knew who their customers were. They knew where their future profits would come from. ``Strategies and Opportunities,'' a memorandum, 1984, from R.J. Reynolds, and I quote: Younger adult smokers have been the critical factor in the growth and decline of every major brand and company over the last 50 years. They will continue to be just as important to brands [and] companies in the future for two simple reasons: The renewal of the market stems almost entirely from 18-year- old smokers. No more than 5 percent of smokers start after age 24. . . . Younger adult smokers are the only source of replacement smokers. . . . If younger adults turn away from smoking, the industry must decline, just as a population which does not give birth will eventually dwindle. Let me read again what the tobacco industry understood. No more than 5 percent of the smokers start after the age 24. If you don't get them when they are kids, you are not likely to get them. If you don't addict someone in childhood to nicotine, you are not likely to be able to addict them when they become adults. In 1986, R.J. Reynolds--they were talking about their advertising for Camels: [Camel advertising will create] the perception that Camel smokers are non-conformist, self-confident, and [they] project a cool attitude, which is admired by their peers. . . . [They aspire] to be perceived as cool [and] a member of the in-group is one of the strongest influences affecting the behavior of [young adults]. It is pretty clear. And this is just a smidgeon of the evidence that has come from the tobacco industry about what they have been doing over the years to appeal to a customer base coming from our children. Now, they have always insisted they have not been doing this. In fact, until a couple of years ago the CEOs of tobacco companies insisted that nicotine was not addictive. Nicotine was not addictive. They are the last Americans, apparently, to be willing to testify under oath that nicotine was not addictive. But, of course, now most of them admit they understand nicotine is addictive. And we raised the question in a piece of tobacco legislation whether this country wants to continue to countenance this behavior. Smoking is legal, but should we allow tobacco companies to target children to become addicted to nicotine? The answer clearly ought to be no, and the answer ought to be delivered with some urgency on the floor of the Senate. We have a tobacco bill that was brought to the floor of the Senate which had a number of very important goals, the most important of which, in my judgment, was to interrupt, intercept, and stop the tobacco industry from appealing to our children. Among other things, it will raise the price of a pack of cigarettes. But what will happen as a result of that price increase and the revenue that comes from it will be a range of programs such as smoking cessation programs, so that those who are now addicted to cigarettes and want to get off of that addiction will have the opportunity, the resources, and the wherewithal to do that. Also, the bill had a prohibition on advertising directed at children and a prohibition on vending machines in areas that are available to children. The smoking cessation programs will be supplemented by counteradvertising programs. Counteradvertising programs that tell America's children that smoking does not make sense, smoking can injure your health, smoking can cause death, smoking is a contributing factor to causing heart disease and cancer and more. Counteradvertising will be very helpful, it seems to me, to warn kids away from cigarettes. Additionally, the resources will be used to invest in the National Institutes of Health where research occurs every single day to try to respond to the health consequences of not just the addiction to cigarettes, but cancer and heart disease, and a range of other problems as well. I cannot think of anything that gives me more pride than to decide that we are going to take substantial new resources and invest them in the National Institutes of Health which will result in exciting, wonderful, and breathtaking new changes in health care and medicines. That is the subject for the Senate: Do we want to stop the tobacco industry from trying to addict our children? Do we want to put together an approach that does all of these things, counteradvertising, smoking cessation, investment in the National Institutes of Health, and a whole range of things? I think most people would say, absolutely, this legislation makes a great deal of sense? And so the bill comes to the floor of the Senate, and to describe the pace in the Senate as a glacial pace is to describe a condition of speeding. I mean, glacial doesn't begin to describe the pace of the Senate when we have a bunch of people who are determined to slow something down. Glaciers at least move forward by inches. You bring a tobacco bill to the floor of the Senate and then we have somebody who wants to speak for 46 hours on the Tax Code. Well, God love them, they have every right under the rules of the Senate to talk about whatever they want. We could talk about almost anything that anybody wants to come and talk about on the floor of the Senate, and so today we are talking about the marriage tax penalty. The Tax Code is a fascinating subject, and if ever there was anything in need of reform it is America's Tax Code. It seems to me that there is a time and a place for us to work together in a thoughtful way to reform the Tax Code, to fix the marriage penalty, and to do a whole range of other things that decrease its complexity, make the code much more understandable, and much fairer. But I wonder if we ought not keep our eye on the ball this afternoon and see if we can't pass the tobacco bill, see if we can't do what this piece of legislation that we designed will do, and that includes the five or six steps I have just described. If one thinks they are unimportant, I suppose you can conceive of a dozen other things that you want to do to change the subject. We could have a discussion, I suppose, this afternoon about the space station. Gee, that is a controversial subject. You could have an amendment here and we could debate the space station for the next 4 or 5 hours. Or we could have a discussion about the nutrition of canned soup from the grocery store shelves or our trade problems with Australia. There is no end to the subjects if somebody wants to change the subject. There is no end to the other things to ruminate about or talk about if one doesn't like the subject of this bill, which is producing a piece of legislation that deals with the tobacco issue the way I have just described it. Let me go back to where I started. After having read the evidence and information that comes from the files of the tobacco industry, if anyone does not yet believe that these companies were targeting children because they knew the only opportunity for them to profit in the future would be to get a customer base among young people, if anyone doesn't yet believe that, they are not prepared to believe anything about this subject. The evidence is clear. It is not debatable. It is in black and white. The industry didn't want to give it up. They were forced to. And this country now should make a decision: is this behavior tolerable or should we stop it? I hope at every desk of this Senate when the roll is called and the Senator is named, I hope they would stand up and say that we ought to stop it. No company in this country has the right to try to attract a 14-year-old son or daughter in an American family to become addicted to tobacco. No company has that right. Tobacco is a legal product for those age 21 or over. It ought not be right for any company to try to addict our children to tobacco. That is what this is all about. It is not about the marriage tax penalty. It is not about the space program. It is not about Food for Peace. It is not about the Food Stamp Program. It is not about any of that. It is about the tobacco issue. I am as patient as anybody. I can be here 2 weeks from now and we can be talking about new discoveries in the habits of earthworms or whatever it is somebody wants to talk about 2 weeks from now. But in the end, this Congress will have to deal with this bill. Are we going to pass a tobacco bill? And to those who do not want to pass it, those who do not want to vote for it, I would say: Just give it your best shot and then stand up and vote against it. If you don't like it, vote against it. But don't thwart the will of the American people to pass legislation that will stop the tobacco companies from addicting our children. Don't do that. You will be on the wrong side of history on this question. Ten years from now, 5 years from now, you will look back at that vote, you will look back at this debate, and you will have to ask yourself, if you vote the wrong way--How on Earth could I have been so out of step with common sense? How on Earth could I have been so out of step with what this country needed to have done at that time? I notice my colleague from North Dakota is on his feet, waiting patiently to speak. I have only 25 more minutes--I am, of course, only kidding. Senator Conrad from North Dakota has been a principal author of a piece of legislation that has become a part of the bill that is now on the floor of the Senate. I mentioned the role that Senator McCain and Senator Conrad and others have played. I think it has been very important. I know there are people outside this Chamber who watch this debate and whose teeth you can hear gritting a mile away, they are so upset about what is going on here. Tough luck. Just tough luck. Times have changed. With Senator Conrad's help and Senator McCain's help and the help of others who have done, I think, remarkable work on this kind of legislation, we will in the end--whether the opponents like it or not-- pass this tobacco bill. There will be enormous pressure on the House of Representatives to pass a similar piece of legislation. We will have a conference. I predict we will have a new law in this country before the end of this session of Congress that does something that we can be proud of and should be proud of on behalf of our children. So as I yield the floor, let me compliment my colleague, Senator Conrad, for the work he has done for so many months on this legislation. And, as I do, let me also pay a compliment to the chairman of the committee on which I serve, Senator McCain, who similarly has done some wonderful work on this legislation. I yield the floor.

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

Mr. DORGAN

Mr. DORGAN. Mr. President, today Senator Reid and I are introducing legislation to help address a number of budgetary excesses and accountability lapses at the Federal Reserve Board. When the General Accounting Office (GAO) released its comprehensive and historic report about the management of the Federal Reserve system--which took over two years to assemble --we learned about disturbing financial practices and management failures within the Federal Reserve system. The report is packed with examples of where the Fed could substantially trim costs, and it makes specific recommendations for changes in Fed operations. Unfortunately, the Federal Reserve dismissed most of the GAO's recommendations as irrelevant or unnecessary. The GAO report shows that during the late 1980s and early 1990s, Federal Reserve expenditures jumped by twice the rate of inflation, while the rest of the federal government has been downsizing. This runaway spending is remarkable given Chairman Greenspan's advice about the need for belt-tightening in the rest of government. The gold-plated hood ornament of the Federal Reserve System's questionable practices is, in my judgment, its huge cash surplus account that's funded with billions of dollars in taxpayer money to protect against losses, despite the fact that the Fed hasn't suffered a loss for more than 80 consecutive years. When the GAO's report was released a couple of years ago, the Fed had squirreled away some $3.7 billion into the surplus account, which was up some 79% from its level in the late 1980s. Now the Fed has increased the surplus account by another 40% to about $5.2 billion--even though the GAO concluded that ``it is unlikely that the Federal Reserve will ever incur sufficient annual losses such that it would be required to use any funds in the surplus account.'' Our bill, the ``Federal Reserve Fiscal Accountability Act of 1998,'' includes many of the changes recommended by the GAO. It would do the following: First, the Federal Reserve is required to immediately return to the general fund of the federal Treasury the $5.2 billion of taxpayer's money that has unnecessarily accumulated in the Fed's surplus fund. In addition, the bill asks the GAO to determine the extent to which the Fed's future net earnings should be transferred to the federal Treasury each year. Second, the GAO, in consultation with the Federal Reserve, will identify and report to Congress a list of the Federal Reserve System activities that are not related to the making of monetary policy. After the report is completed, all non-monetary policy expenditures, as identified by the GAO, would be subject to the congressional appropriations process. We do not intend to inject politics into monetary policy with this provision. However, over 90 percent of the Fed's operations have nothing to do with interest rate policy according to the GAO. And there is simply no good reason why the Fed's non-monetary expenditures are immune from the same kind of oversight and review required of other federal agencies. Third, the regional Federal Reserve banks and the Board of Governors will be subjected to annual independent audits. This provision merely codifies what the Federal Reserve has been doing for the most part in recent practice. The detection of any possible illegal acts must be reported to the Comptroller General. Fourth, the Federal Reserve will be required to follow the same procurement and contracting rules that apply to other federal agencies. These rules should help to prevent the examples of favoritism highlighted in the GAO report and increase competition among contract bidders with the Fed. This requirement ought to substantially reduce procurement costs on a system-wide basis. Finally, we've made some changes to require the Fed to compete more fairly with the private sector in providing a variety of payment system services, such as check clearing and transportation to banks and other financial institutions. I invite my colleagues to join us as cosponsors of this much-needed legislation.