Dianne Feinstein

Mrs. FEINSTEIN

Mrs. FEINSTEIN. Mr. President, I will quote from a March 5 letter of the American Public Gas Association by its president, out of Fairfax, VA: As you know, Enron operated in what was essentially an unregulated environment. While there will be much more to come in the wake of Enron, one thing is perfectly clear today--our Federal Government has an obligation to make sure that no important trading activities fall between the cracks, leaving some energy markets without a Federal agency with oversight authority. Your amendment remedies this glaring deficiency. The American Public Gas Association is fully committed to support our effort to reverse the action Congress took just 15 months ago in the Commodities Futures Modernization Act. The Commodities Futures Modernization Act amended the Commodity Exchange Act by allowing some energy contracts to be traded with no Government oversight. We firmly believe that the CFTC must have at its disposal the necessary jurisdiction and authority to protect the operational integrity of energy markets so that (1) transactions are executed fairly, (2) proper disclosures are made to customers, and (3) fraudulent and manipulative practices are not tolerated. I ask unanimous consent that the full letter be printed in the Record following my remarks.

Mrs. FEINSTEIN. Let me also quote from the Texas Independent Producers and Royalty Owners Association: [This association] believes that this measure will tend to improve price transparency in natural gas markets, leading to a more efficient and stable marketplace. The relatively modest requirements outlined above should not unduly reduce liquidity for gas traders. Accordingly, TIPRO endorses your amendment. I ask unanimous consent that that be printed in the Record following my statement.

Mrs. FEINSTEIN. Mr. President, this amendment would provide the same transparency and oversight that is provided for every other traded tangible commodity. All this amendment says is that electronic exchanges which change energy derivatives are subject to the same requirements as other exchanges, such as the Chicago Mercantile Exchange and the New York Mercantile Exchange. Incidentally, these two organizations support this legislation. Additionally, it says that if you are trading energy derivatives off an exchange, you simply need to keep a record of that transaction; and if it turns out that there is a complaint, the CFTC will have a record to review. The problem, and why we need the legislation: Presently, energy transactions are regulated by the FERC, Federal Energy Regulatory Commission, when there is an actual delivery of an energy commodity. Let me give you an example. If I buy gas from you and you deliver that natural gas to me, FERC has the authority to ensure that this transaction is both transparent and reasonably priced. That is a direct delivery. However, energy transactions have gotten so complex over just the past decade, most energy transactions no longer result in delivery; thus, with these nondelivery trades and transactions, a giant loophole has opened, where there is no oversight and no transparency. Let me explain. Mr. President, I can purchase from you a promise that you will deliver natural gas to me at some point in the future. This is referred to as a derivatives contract. I may never really need to physically own that gas, so I can sell that gas to someone at a small profit, who can then turn around and sell it to yet someone else, and so on and so forth. This promise of a gas delivery can literally change hands dozens of times before the commodity is ever delivered. Even then, it may never get delivered if the spot market price is lower than the future price that comes due on that day. In fact, 90 percent of energy trades represent purely financial transactions, not regulated either by FERC or the Commodity Futures Trading Commission. As long as there is no delivery, there is no price transparency. So we don't know the price or the terms for 90 percent of the energy transactions taking place. Again, this lack of transparency and oversight only applies to energy. It does not apply if you are selling wheat, or pork bellies, or any other tangible commodity. So, as I said, there is a very big loophole here. Why is this type of trading so important? Many of these transactions provide needed insurance so a company can lock in set prices in the future without necessarily ever having to receive delivery. For example, knowing the price of natural gas in the future allows an energy company to, in turn, contract out its electricity, since it will know the price of natural gas, the main cost of production. These transactions are here to stay. What this amendment simply does is shed light on them. Futures transactions do affect market prices for consumers, and that is why we need this transparency. That is precisely why other commodities, except for excluded financial commodities, are already regulated by the CFTC. One simple example of how energy derivatives can affect delivered energy prices is the long-term energy electricity contracts that California and other Western States entered into last year, which were priced according to the long-term future costs for natural gas. As soon as the future price of natural gas plummeted after the contracts had been signed, electricity prices fell substantially. All of a sudden, these States looked foolish for signing these contracts. How did this happen? How did it come up all of a sudden? The simple answer is that the Commodity Futures Modernization Act, signed into law in 2000, exempted energy and minerals trading from regulatory oversight and also exempted electronic trading platforms from oversight. In a sense, what that legislation did was set up two different systems treating electronic trading platforms differently from all other platforms and treating energy commodities differently from other commodities. Up until 2000, energy derivative transactions were regulated just like other transactions, and electronic trading platforms were treated like other platforms. I repeat, these were the standards that were in place all the way up to 2000. Up until that time, if a gas or electricity commodity was delivered, FERC had oversight. If there was not delivery, the CFTC had the authority. So the loophole arose just 2 years ago. At the time of the 2000 legislation, nobody knew how the exemptions would affect the energy market. We have a much better idea today because of what we have learned since then. It did not take long for Enron Online and others in the energy sector to take advantage of this new freedom by trading energy derivatives absent any regulatory oversight or transparency. Thus, after the 2000 legislation was enacted, Enron Online began to trade energy derivatives--not deliveries, but derivatives--bilaterally over the counter in a one-to-one transaction without being subject to any regulatory oversight whatsoever. If the trade has delivery, again, it is regulated by FERC. If it does not, it falls into the abyss. Enron Online was able to trade back and forth without records and in secret. The result, of course, was higher prices. Let me give an example of how that secret trading has affected California and the western energy markets. On December 12, 2000, the price of natural gas in southern California on the spot market was $50 a decatherm, while it was $10 a decatherm close by in San Juan, NM. A decatherm is 1,000 cubic feet or enough gas to power about 100 kilowatt hours of electricity for a typical powerplant. It is enough gas to provide electricity for about 900 homes for 1 hour. This problem lasted from November of 2000 to the end of April 2001--a full 6 months--while energy price spikes affected the entire western energy market. And all this time, hardly anyone understood what was happening in nondelivered energy transactions. In 1999, California's total electricity price for the entire State was $7 billion. In 2000, it was $27 billion, and in 2001, it was $26.7 billion. You can see there are serious ramifications when markets are secret without any Federal oversight or investigation of dramatic price spikes. You cannot investigate it because there is no evidence because all this trading was done in secret with no records. The Senate Energy Committee, of which I am a member, examined this issue last year, but we were not able to piece together the pieces at that time. In the wake of Enron's bankruptcy, we are beginning to learn a lot more. By controlling a significant number of energy transactions affecting California, and by trading in secret, Enron had the unique opportunity to drive up prices. Only time will tell whether that can be proved because of the absence of records and transparency. Let me explain how this amendment works. First, the bill repeals the provisions of the 2000 Commodity Futures Modernization Act which exempted energy derivatives from regulatory oversight. As I said before, these transactions were regulated by the CFTC until 2000, so this is not an entirely new authority for the CFTC. As a result of this provision, all electronic trading exchanges will once again be subjected to the same oversight as other exchanges when it comes to energy transactions. Companies trading energy commodities off the exchange will simply have to keep a record of that transaction, just as they do for other traded commodities. That is certainly not too much to ask. The amendment also requires FERC and the CFTC to work together to ensure that energy trading markets are, one, transparent, not in secret; two, regulated, which they should be; and three, working. This will close the regulatory loopholes that allowed entities, such as Enron Online, to operate unregulated trading markets in secret. I have received a letter from Pat Wood, the Chairman of FERC. Chairman Wood writes that neither FERC nor CFTC has adequate authority to determine price transparency and ensure that the energy market is functioning as it should. He supports this amendment. FERC Commissioners Brownell and Massey do as well. This amendment does one more important thing. It ensures that entities running online trading forums must maintain sufficient capital to carry out their operations and maintain open books and records for investigation and enforcement purposes. This last point is very important. Enron saw its future as a ``virtual'' company. As such, it sold off many of its physical assets over the past few years. So when investors and customers lost confidence and stopped trading out of fear that bankruptcy was in the offing, they learned that Enron had no collateral to back up these trades, and this was a major factor in Enron's final spiral into bankruptcy. Who is supporting this bill? The New York Mercantile Exchange, the Chicago Mercantile Exchange, Cambridge Energy Research Associates who asked for just this, the American Public Gas Association, the American Public Power Association, Pacific Gas & Electric, Calpine, Mid-America Energy Holding Company, Texas Independent Producers and Royalty Association, the Consumers Union, and the Consumer Federation of America, all because they believe the time has come to see there are no trading markets in secret that do not keep records, and to shine the light of day on these trades. Now, who is opposed to the amendment? Some energy companies oppose this bill. One lesson some of these companies seem to have learned from the recent energy crisis was they make more money when they can operate without any transparency, in secret, without any reporting requirements or oversight of any kind, and that cannot continue to exist. I am very much encouraged that not all energy companies want to operate this way. As I mentioned, PG&E, Calpine, Apache, Mid-America Energy, and others support this bill, and many other energy companies are sitting on the sidelines waiting to see what may happen. There are still some who fail to recognize the glory days of operating in secret are over. Regardless of what happens with this amendment, I want to go on record saying I will do everything in my power to see the energy sector is exposed to the same price transparency and oversight as every other sector of our economy. Make no mistake, this debate boils down to the issue of whether energy companies should be able to operate in continued secrecy. Some of these companies have argued this amendment creates unfair reporting and oversight over energy companies. So let us again look at what this provision would do. It would treat electronic trading exchanges like any other exchange since, as I said before, there is neither price transparency nor regulatory authority over those exchanges where there is not a direct delivery. So with this provision, the same reporting requirements that CFTC requires of the New York Mercantile Exchange and the Chicago Exchange would now be required of electronic exchanges. This means simply that CFTC would be able to assert the same oversight and require the same transparency of electronic exchanges that are already required of nonelectronic exchanges. I have a very hard time understanding why this is so burdensome and unfair. Additionally, some of these companies have also asserted this amendment would create unfair burdens on companies engaged in bilateral transactions. Here is what they are complaining about: With our amendment, any entity engaging in bilateral transactions in energy commodities would have to keep a record of those transactions, and the CFTC would have the authority to look for fraud and manipulation. Again, let me repeat, a company engaged in bilateral trading has to keep a record of that transaction, and the CFTC has the authority to investigate fraud. That is it. It is the same authority that was there before 2000 and the same standard that traders of all other commodities are required to meet. So with all we now know about the energy sector and Enron, I challenge anyone to explain to me why energy companies should continue to have a loophole so they can trade in secret, not keep any records, and therefore there is no evidence that can be proven as to manipulation of price. The day has come to close that loophole. I note one of the main original cosponsors is in the Chamber and wishes to speak to this amendment. I have had the pleasure of working with the Senator from Oregon on the Energy Committee, as I have with the Presiding Officer. The Senator from Oregon has been a leader and very focused on this issue. I want to thank him for his help, and I ask the Chair recognize him. Exhibit 1 American Public Gas Association, Fairfax, VA, March 5, 2002. Hon. Dianne Feinstein, Hart Senate Office Building, U.S. Senate, Washington, DC. Dear Senator Feinstein: The American Public Gas Association (APGA) is very pleased that you have taken the lead to amend the Commodity Exchange Act (CEA). Your revisions to S. 517, which amends the CEA, brings the trading of energy products, including natural gas spot and forward prices, under the appropriate jurisdiction of the Commodity Futures Trading Commission (CFTC). As a result, your amendment will reduce the various risks imposed on consumers by a partially unregulated energy trading market. As you know, Enron operated in what was essentially an unregulated environment. While there will be much more to come in the wake of Enron, one thing is perfectly clear today--our federal government has an obligation to make sure that no important trading activities fall between the cracks leaving some energy markets without a federal agency with oversight authority. Your amendment remedies this glaring deficiency. APGA is fully committed to support your effort to reverse the action Congress took just 15 months ago in the Commodities Futures Modernization Act (CFMA). The CFMA amended the CEA by allowing some energy contracts to be traded with no government oversight. We firmly believe that the CFTC must have at its disposal the necessary jurisdiction and authority to protect the operational integrity of energy markets so that (1) transactions are executed fairly, (2) proper disclosures are made to customers, and (3) fraudulent and manipulative practices are not tolerated. In December of 2000, when the CFMA was under consideration in the Senate, APGA submitted a Statement for the Record to the U.S. Senate Committee on Energy and Natural Resources during a hearing on the ``Status of Natural Gas Markets.'' In the statement, we expressed a concern that the proposed legislation would codify an exemption for energy commodity transactions that would shield those energy transactions from the oversight and review of the CFTC. Enron took advantage of this gap in regulatory oversight. Your amendment will close that gap. Consumers across the country will benefit from your efforts because they are less likely to be victimized by activities that occur in a market where the CFTC exercises oversight. Again, public gas utilities and the hundreds of communities that we serve commend you for your thoughtful and deliberate leadership on this very important issue. While there may be some who will oppose this amendment, one need not look far to see whether the opposition is looking out for the best interests of Wall Street or Main Street. We pledge to work with you in any way we can to pass this much-needed amendment. Please let me know how I can assist you. Sincerely, Bob Cave, President.

Mrs. FEINSTEIN. Mr. President, I rise to introduce an amendment on behalf of Senators Cantwell, Wyden, Boxer, Leahy, and Durbin to provide price transparency when energy derivatives are traded and to give the Commodity Futures Trading Commission oversight authority for such transactions. Let me set the framework for this amendment. I send the amendment to the desk.

Mrs. FEINSTEIN. Madam President, I thank the distinguished Senator from New Jersey for his support. In view of his background, his knowledge, and his expertise, I am particularly grateful for that support. It is one thing to stand here and feel in your gut what is right for the consumer, but it is another in the mystical world of finance. His wisdom and his knowledge hopefully will gain additional votes for this amendment. I am very grateful to the Senator. I thank him very much. Madam President, I note the absence of a quorum.

Mrs. FEINSTEIN. Mr. President, I ask unanimous consent that further reading of the amendment be dispensed with.

Mrs. FEINSTEIN

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

Mrs. FEINSTEIN. I thank the Chair. (The remarks of Mrs. Feinstein pertaining to the introduction of S. 1796 are located in today's Record under ``Statements on Introduced Bills and Joint Resolutions.'')

Mrs. FEINSTEIN. Mr. President, I ask unanimous consent that I be recognized as in morning business for the purpose of introducing a bill.

Mrs. FEINSTEIN

Mrs. FEINSTEIN. Madam President, I rise today to introduce the National Cancer Act of 2002. This bill is co-sponsored by Senators Gordon Smith, Daschle, Jeffords, Clinton, Hutchison, Mikulski, Snowe, Boxer, Collins, Landrieu, Chafee, Murray, Lincoln, Stabenow, Cantwell, Carnahan, Schumer, Torricelli, Ben Nelson, Johnson, Reed, Breaux, Corzine, Leahy, Reid, Kerry, and Bill Nelson. Today, cancer is the Nation's second cause of death, trailing heart disease. Over the next 30 years, cancer will surpass heart disease and become the leading cause of death as the baby boomers age. This bill represents a comprehensive national battle plan to reenergize the Nation's war on cancer, a war begun when President Richard Nixon on January 22, 1971 proposed to Congress that we launch a war on cancer. That commitment was a critical first step. But it is clear that we must take further steps to address the scourge of cancer in every respect. The bill we are introducing today is the product of more than 3 years and hundreds of hours of work. I am the vice-chair of the National Dialogue on Cancer. In discussions with cancer experts from this group, it became clear to me that the National Cancer Act of 1971 was out of date. We are now in the genomic era, on the cusp of discoveries and cures that we could only have dreamed about in 1971. The science of cancer has advanced dramatically with the revolution in molecular and cellular biology creating unprecedented opportunities for understanding how genetics, environmental risk factors, and lifestyle factors relate to cancer. The explosion in knowledge about the human genome and molecular biology will enable scientists to better target cancer drugs. I believe the opportunity for new drugs is so bright, we might well find a cure for cancer in my lifetime. With these advances, I thought it was time to update the National Cancer Act of 1971 to reflect these advances in science. I asked John Seffrin, CEO of the American Cancer Society, and Dr. Vincent DeVita, Director of the Yale Cancer Center, to form a special committee of cancer experts to provide recommendations on a battle plan to conquer cancer. The committee produced an ambitious plan and what I tried to do was take the most important components, given the current budget situation, and develop a piece of legislation that could pass the Senate. On November 7, 2001, President George Bush commended the work of the committee when he wrote, ``The journey ahead will not be easy. But 30 years ago, no one would have imagined coming as far as we have. Working together, we will take the next steps necessary to defeat this deadly disease.'' I invite him today to join me in taking these steps. Finding a cure for cancer is a very personal goal. I lost both my father, Leon Goldman, and my husband, Bert Feinstein, to cancer. I saw its ravages firsthand, and I experienced the frustrations, the difficulties, and the loneliness that people suffer when a loved-one has cancer. I determined that I would do all I could to reduce the number of people who go through this devastating experience. And it is my great hope that this legislation will help do just that, and enable us to find a cure for cancer in my lifetime. This may in fact be the most important thing I do in the Senate. There are several reasons we need a major attack on cancer. Much has changed since 1971. The way we prevent, diagnose, treat, conduct research, and understand cancer has changed dramatically. Cancer is a disease of aging and as the American population ages, cancer incidence will grow by 29 percent by 2010 and cancer deaths by 25 percent. The number of Americans over age 65 will double in the next 30 years. Since 1971, survival rates for some cancers have improved, while others have not. More and more people live with cancer. Compared to 1971, twice as many people, 8.9 million in 1997, are living with a history of cancer. Since 1971, more cancer care has moved from inpatient to outpatient settings. Some families find themselves virtually becoming nurses to their loved ones in their homes. Since 1971, more research is collaborative, between the public and private sectors, and more cancer research requires a multi-disciplinary approach. Since 1971, the biotechnology industry has blossomed and provided a broad array of new treatment options, promising even more innovations in cancer care. Since 1971, computer technology and communications have expanded and increased in complexity, making the accessing and transmitting of information more widespread, more readily available and transforming research methodologies. While the science of cancer has seen revolutionary change, there are still many gaps in the system, especially from the patient's perspective. Just three months ago, the President's Cancer Panel in their report titled, Voices of a Broken System: Real People, Real Problems, told us that cancer is an ``equal opportunity'' killer, but if you are poor, uneducated, or isolated you are doubly disadvantaged in America. They said, ``Access to appropriate cancer care is the crucial fundamental step needed to relieve the desperate physical suffering, financial devastation, and loss of dignity so many people endure when cancer is diagnosed.'' Take cancer screening, for example. Cancer screening can reduce cancer mortality. While many screening tools have been developed, screening rates are still low, especially for colorectal cancer. Screening technologies have improved, but cancer screening rates vary by cancer site, by population group, and by health insurance coverage. Another ``hole'' in the system: Fewer than 5 percent of adult cancer patients participate in cancer trials. Among the elderly, the population most likely to get cancer, only 3-4 percent participate. Drugs cannot be brought to patients without clinical trials. The quality of cancer care is uneven and often based on the pure coincidence of where one lives. According to the President's Cancer Panel, ``People living in rural, frontier, geographically isolated and impoverished inner city areas suffer the most from the uneven distribution of cancer care resources and providers. . . .'' Many studies show that many cancer patients do not receive optimal care. Additionally, the cancer care workforce will face severe shortages, particularly in long-term care settings. The pipeline of medical researchers is threatened with, the number of young physicians entering medical research declining. Over 44 million Americans have no health care insurance and those that do have uneven coverage. The President's Cancer Panel says that at least 31 million Americans have inadequate coverage. The National Cancer Act of 2002 takes a multi-pronged approach to winning the war against cancer. Here's what the bill will do: The advances in science that I spoke of earlier on the human genome and molecular biology have thus far produced medications that can target cancer cells and leave in tack healthy cells. This legislation would enable the National Cancer Institute (NCI) to fund up to 40 percent of grants over 5 years, up from the current level of 28 percent. Why is this important? The research is what will bring the cure. NCI now funds 4,500 research project grants at nearly 600 institutions every year. This represents 28 percent of the 16,000 grant proposals NCI receives. NCI scientists think funding 40 percent will allow them to fund the most promising grants. At 28 percent, it does not happen. Funding basic research is a full frontal assault on cancer, which will lead to more breakthroughs, more treatments, and ultimately, I believe, to a cure. We now have drugs, like Gleevec for Chronic Myeloid Leukemia and Herceptin for breast cancer, that can target and destroy cancer cells while leaving healthy cells unharmed. Patients, who were considered terminal, have taken Gleevec and were able to get out of their beds and leave the hospice within days of treatment. After one-year of clinical trials for Gleevec, 51 out of 54 patients were still doing well. With 4,500 Americans diagnosed with Chronic Myeloid Leukemia a year, the potential for this drug is tremendous. And just this month, Gleevec was approved by the FDA to treat another cancer Gastrointestinal Stromal Tumors, suggesting that the potential for this drug may be even greater than we hope. The bill authorizes funds for new and existing research centers to conduct translational, multidisciplinary cancer research, and to establish networks linking translational research centers to community cancer providers, hospitals, clinics, doctors' practices, particularly in underserved areas. The purpose of this provision is to greatly accelerate the movement of basic research to the patient, from the ``bench to the bedside,'' so that we can conduct more clinical trials. Clinical trials test the safety and efficacy of drugs, devices or new medical techniques. They are required for FDA approval. These trials require thousands of participating people to help determine if drugs are safe and effective. But clinical trials are expensive. They involve many people, who often have to travel to a cancer center; they involve staff time and careful monitoring and recordkeeping. The drug industry says it costs on average $500 million to develop a drug; a November 2001 Tufts University study puts the cost at $800 million. Whatever it is, it is expensive. The bill includes several steps to expand clinical trials, those research projects that require thousands of people to determine whether new drugs are safe and effective. First, the bill will provide $100 million per year for new grants for what is called ``translational'' research, work that moves promising drugs from the ``bench to the bedside.'' Right now, there are many new drugs under development that are stuck, as though in a funnel, because we have not put the resources into having the people-based research to test those drugs. There are approximately 400 new drugs that are held up in the development process because the resources are not available to fund clinical research to test those drugs. For every one drug approved, 5,000 to 10,000 were initially considered. The entire process can take as long as 15 years. NCLAC said it takes 12 to 14 years to bring one drug from discovery to patients. Second, the bill will require insurers to pay the routine or non- research costs for people to participate in clinical trials, while the drug sponsor would continue to pay the research costs. California already requires this coverage by private insurers. Third, the bill requires the National Cancer Institute to establish a program to recruit patients and doctors to participate in clinical trials. Dr. Robert Comis, President of the Coalition of National Cancer Cooperative Groups, has said that eight out of ten cancer patients do not consider participating in a clinical trial. They are unaware that they might have the option. He also has found that physician involvement is key. We must work all we can to make both physicians and patients more aware of the importance of participating. Currently, only 4 to 5 percent of adult cancer patients participate in clinical cancer trials. But Research America polls found that 61 percent of Americans would participate in a clinical trial. We should heed the example of what is called the ``pediatric model.'' Over 60 percent of children with cancer participate in clinical trials. Children in these trials get optimal care, with an overall physician manager or ``quarterback.'' The five-year survival rates for children with cancer have increased significantly. In the 1960s, childhood leukemia could not be cured. It was a death sentence. Today, 70 percent of children with acute lymphoblastic leukemia enter remission. This is but one example of the power and importance of clinical trials. An investigational treatment yesterday is standard treatment today. Only by injecting new funding into cancer research will we enable cancer researchers to conduct the trials that are necessary to bring promising new drugs to market. Scientists say we will stop defining cancer by body part, like breast cancer or prostate cancer. Because everyday we are understanding better the genetic basis of cancer and can focus drugs on molecular targets, we may have, for example, 50 different kinds of breast cancer, defined by their genetic basis. As NCI's Dr. Rabson has said, ``As we've come to understand the molecular signatures of cancer cells, we can classify tumors according to their genetic characteristics.'' This means that we need to create incentives to encourage companies to make these targeted drugs because as we redefine cancer, we will have smaller numbers of people who have that particular kind of breast cancer. Companies are often reluctant to make drugs for small patient populations. This legislation would provide tax and marketing incentives to encourage pharmaceutical companies to produce ``orphan drugs,'' or drugs targeted to small patient populations. Beginning with Gleevec and continuing into the future, drugs will target a narrow genetic or cellular mutation. While this holds great promise for patients, it also means that the number of treatments will proliferate, thereby segmenting cancer patients into smaller and smaller populations. In some cases, this will mean that pharmaceutical companies--for strictly financial reasons--may not want to produce a given drug. This provision would create incentives for those companies to produce and market the drugs targeted to patient populations of less than 200,000. The impact: This will help to ensure that patients receive the highest quality care, even when the number of people faced with a particular type of cancer is small. The bill will create a new initiative to train more cancer researchers. Specifically, it will (1) pay off the medical school loans of 100 physicians who commit to spend at least 3 years doing cancer research; and (2) boost the salaries of postdoctoral fellows from $28,000 to $45,000 per year over 5 years. Every year, young physicians and researchers avoid the field of cancer research because, frankly, they feel they can make more money elsewhere. This provision will help reverse that trend and add thousands of men and women on the front lines of the fight. The physician-scientist is endangered and essential, concluded a January 1999 study, showing that the number of first-time M.D. applicants for NIH research projects has been declining. The study, published in Science, said, ``. . . fewer young M.D.'s are interested in or perhaps prepared for careers as independent NIH-supported investigators.'' Young doctors and Ph.Ds do not want to go into cancer research because they can make more money elsewhere. Graduating physicians have medical school debt averaging $75,000 to $80,000. Because of the low pay to be a physician-scientist, these doctors cannot afford to go into research. Postdoctoral fellows, who conduct the bulk of day-to-day research, receive pay that is neither commensurate with their education and skills nor adequate. To attract the best and the brightest to the field of cancer research, we need to pay them more than $28,000 to start. The National Academy of Sciences in September 2000 called for increasing their compensation. All too often having cancer is a lonely and frightening experience. Cancer patients have a team of doctors, from the primary care physician to the radiologist to the oncologist. Patients need one doctor to be in charge. The Institute of Medicine told the Senate Cancer Coalition in our June 16, 1999 hearing that the care that cancer patients get is all too often just a matter of circumstance: ``. . . for many Americans with cancer, there is a wide gulf between what could be construed as the ideal and the reality of Americans' experience with cancer care . . . The ad hoc and fragmented cancer care system does not ensure access to care, lacks coordination, and is inefficient in its use of resources.'' The Institute of Medicine study on the uneven quality of health care says, ``Health care today is characterized by more to know, more to manage, more to watch, more to do, and more people involved in doing it than at any time in the nation's history.'' The bill will require plans to pay doctors, preferably oncologists, to become the overall managers of patients' care, what I call a ``quarterback physician,'' to be with the patient from diagnosis through treatment to prevent the patient from being forced to navigate the medical system alone. I developed this concept after meeting Dr. Judy Schmidt, a solo- practicing oncologist from Montana. Dr. Schmidt cares for her patients from diagnosis to treatment, and she is really a model for doctors across the nation to emulate. This ``quarterback physician'' would provide overall management of the patient's care among all the providers. Someone would be in charge. This provision could save money because good coordination can reduce hospitalization costs. The bill also authorizes $8 million to the Agency for Health Care Research and Quality to convene cancer experts, providers, patients and other relevant experts to coordinate the development of practice guidelines for optimal cancer care, prevention, palliation, symptom management and end-of-life care. People cannot get good health care if they have no way to pay for it, if insurance plans, public and private, do not cover the basics like screenings for cancer. My bill will require public plans, like Medicare and Medicaid, and private insurance plans to cover five services important to good cancer care: (1) cancer screenings; (2) genetic testing and counseling for people at risk; (3) smoking cessation; and (4) nutrition counseling. The coverage added by this bill is important to preventing cancer. Here's an example: On January 31, we read reports of a promising new screening test for colon cancer that can find extremely small traces of cancer in patients' stool, offering an entirely new approach to finding colon cancer, which kills 48,000 Americans annually and is often found too late to cure. Mammograms, pelvic exams, reducing fat in the diet and stopping smoking--all of which could be enhanced by this bill--can stop cancer before it is too late. Because too many Americans have no way to pay for their health care when cancer strikes and because seven percent of cancer patients are uninsured, the bill also requires the Institute of Medicine of the National Academy of Sciences to conduct a study of the feasibility and cost of providing Medicare coverage to individuals at any age who are diagnosed with cancer and have no other way to pay for their health care. Medicare already covers care for people of any age who have End Stage Renal Disease and Amyotrophic Lateral Sclerosis, Lou Gehrig's Disease. This study could provide helpful guidance to the Congress. Because no assault on cancer is complete without a strong cancer prevention component, the bill provides funds and requires the Centers and Disease Control and Prevention to prepare a model state cancer control and prevention program; expand the National Program of Comprehensive Cancer Control plans and to assist every state to develop a cancer prevention and control program. The bill also authorizes $250 million to expand the Center for Disease Control and Prevention's breast and cervical cancer screening program and authorizes $50 million for CDC to begin screening programs for colorectal cancer. Today, 16 states now have cancer plans and 16 states are creating or updating their plans. States could use these funds to promote cancer education and prevention, improve registries, study disparities and other uses. Because of the aging of the American population, we face a virtual explosion of cancer in the coming 30 years. The number of cases will double. But the sad fact is that we do not have enough nurses and other health care professionals to take care of this expected rise in cancer patients. My bill will provide $100 million for loans, grants and fellowships to train for the full range of cancer care providers, including nurses for all settings, allied health professionals, and physicians. The bill requires that these applicants have the intention to get a certificate, degree, or license and demonstrate a commitment to working in cancer care. In nursing alone, those critical people on the front line of care, we face a national nursing shortage in virtually every setting, say many experts, which will peak in the next 10 to 15 years unless steps are taken. By 2020, the RN workforce will be 20 percent short of what is needed. My home state of California ranks 50th among registered nurses per capita. And it's not just nurses. The Health Resources Services Administration says that the demand of health care professionals will grow at twice the rate of other occupations. Cancer is primarily a disease of aging. As the baby boomers age, there will be more cancer. Cancer care is becoming more and more complex as technology improves. Skilled providers, from the nurse assistant to the oncologist are needed to administer the complex therapies. This bill should provide some help. Cancer cannot be conquered without addressing smoking and the use of tobacco products. Smoking causes one-third of all cancers, and is the cause of approximately 165,000 deaths annually. Over the past two decades, we have learned that tobacco companies have manipulated the level of nicotine in cigarettes to increase the number of people addicted to their product. There are more than 40 chemicals in tobacco smoke that cause cancer in humans and animals, according to the CDC. Tobacco smoke has toxic components, as well as tar, carbon monoxide and other dangerous additives. The cancer community is united in the belief that the single most important preventive measure is to place tobacco products under the regulatory control of the Food and Drug Administration (FDA). It is long past time to reduce the addictive nature of cigarettes and curtail the marketing of these products to young people--I believe that empowering the FDA to regulate tobacco will help do that. The U.S. Surgeon General and the Centers for Disease Control and Prevention have unequivocally demonstrated that, for example, anti- smoking campaigns can reduce smoking, a major cause of cancer. California is a good example: My state started an aggressive tobacco control program in 1989 and throughout the 1990s, tobacco use dropped at two to three times faster than the rest of the country. Ninety percent of adult smokers being before age 18 and every day, 3,000 young people become smokers. This bill will provide meaningful regulation by the Food and Drug Administration of the content and marketing of tobacco products, especially the addicting and carcinogenic components. Dr. C. Everett Koop, former U.S. Surgeon General, and Dr. David Kessler, former Commissioner of the Food and Drug Administration, wrote in their 1997 report, cited FDA and other studies and said: ``Nicotine in cigarettes and smokeless tobacco has the same pharmacological effects as other drugs that FDA has traditionally regulated . . . nicotine is extremely addictive . . . and the vast majority of people who use nicotine- containing cigarettes and smokeless tobacco do so to satisfy their craving for the pharmacological effects of nicotine; that is, to satisfy their drug-dependence or addiction.'' They recommended: ``FDA should continue to have authority to regulate all areas of nicotine, as well as other constituents and ingredients, and that authority should be made completely explicit.'' I am pleased that to note that even the Philip Morris Companies has acknowledged the need for FDA to regulate tobacco. On their website, they say: We believe federal legislation that includes granting FDA authority to regulate tobacco products could effectively address many of the complex tobacco issues that concern the public, the public health community and us. It is long past time to reduce the addictive nature of cigarettes and curtail the marketing of these products to young people. This bill gives FDA the power to regulate tobacco products' content, design, sale, and marketing. The bill requires the NCI and the National Institute for Environmental Health Sciences to one or more strategic plans to intensify research in the following areas: quality of life for cancer patients and survivors; symptom management for patients and survivors; palliative care and pain management; health disparities for racial and ethnic minorities; cancer prevention; behavioral research associated with causing and preventing cancer; environmental risk factors for cancer and gene-environment interactions; new imaging and early detection technologies and methods; and cancer survivorship. Patient advocates and others have called on NCI and other institutes to develop a broad and responsive portfolio. Experts say we need to learn more about cancer survivorship. People used to die quickly of cancer, but today, more and more are living with cancer, as many as nine million Americans. Kathleen Foley of Memorial Sloan-Kettering Cancer Center said, ``While we work to cure the many types of cancer, nothing would have greater impact on the daily lives of cancer patients and their families than good symptom control and supportive therapy.'' Charles S. Cleeland, of the M.D. Anderson Cancer Center, said in the June 20, 2001 Washington Post, ``We need a new research agenda that focuses on alleviation of disease-related distress.'' The National Cancer Policy Board of the Institute of Medicine last year recommended that NCI conduct more research on palliative care. This is an example of an area that needs more emphasis. While NCI's work has brought huge advances in understanding, preventing and treating cancer, there is no question that we could do more. For eight years I have co-chaired the Senate Cancer Coalition. We have held eight hearings on cancer. With each hearing, I become more and more convinced that we can conquer cancer in my lifetime. Polls by Research America show that the public wants their tax dollars spent on medical research and that in fact people will pay more in taxes for more medical research. When Beatle George Harrison died in December of cancer, a Maryland nursery school teacher, Jennifer DeBernardis, said: ``All the fame and fortune and talent doesn't save you from something like cancer.'' Cancer impacts everyone. Everyone knows someone who has had cancer or will have cancer. I am thoroughly convinced that if we just marshal the resources, we can conquer cancer in the 21st century. Let's begin. The road ahead is long and treacherous. But if we all work together, I honestly believe we can do it.

Mrs. FEINSTEIN

Mrs. FEINSTEIN. Madam President, it is with great pleasure that I send belated birthday wishes to my friend and colleague, the senior Senator from Massachusetts. At 70 years old, Ted Kennedy is one of this country's most effective lawmakers, having served 40 years in the Senate. It is difficult for me to think of many major public policy initiatives that Ted Kennedy has not had a hand in shaping. What is most remarkable is that in many cases he has been here for both the inception and the reauthorization of some of the most important legislation of our time. When he was elected in 1962, women and minorities did not have equal rights under the law. It is fitting that Ted Kennedy's first floor speech was given on the Civil Rights Act of 1964 because he helped to make school integration, pay equity for women, and fair housing laws a reality. While serving with him on the Judiciary Committee, I have seen first hand his ability to tap into the needs of disadvantaged communities and pass meaningful civil rights legislation. When Senator Kennedy was elected to this body, Americans did not have equal access to high quality healthcare. With his support, the Medicare and Medicaid program were established to enhance the welfare of millions of elderly and disadvantaged Americans. And in his capacity as chairman of the Senate Health Subcommittee and later Full Senate Committee on Health, Education, Labor and Pensions, he has fought to pass laws allowing workers greater flexibility in keeping and choosing their healthcare coverage and making healthcare insurance more widely available to children. More recently, he fought tirelessly to enact a Patient's Bill of Rights to make HMOs more accountable to patients and less able to interfere with medical decision making. As the result of his efforts, we can now offer health care protections to all 190 million Americans in private health plans. This was no small feat. Before Ted Kennedy, reforming our country's education systems was an issue on the forefront of our minds, but the last item on the Federal Government's agenda. Not only was he among those to support the original passage of the Elementary and Secondary Education Act in 1965, but Ted Kennedy spearheaded the fight to pass the reauthorization of this sweeping federal school bill. Senator Kennedy's efforts have been particularly important to the 5.6 million economically disadvantaged students in my State. In the Senate, Ted Kennedy has been a champion for a society that is just, fair, and humane. He has fought tirelessly for working families and underserved communities. With passion and pragmatism, he has served this nation and his beloved Massachusetts--breaking down gender, racial, class, and religious barriers. On your 70th birthday, I salute you, Senator Kennedy, for your distinguished years of service and wish you continued success in the future.

Mrs. FEINSTEIN

Mrs. FEINSTEIN. Mr. President, today Hadassah, the Women's Zionist Organization of America, a wonderful organization that exemplifies a spirit of volunteerism and commitment to others is celebrating their 90th anniversary. With more than 300,000 members nationwide, Hadassah is one of the largest women's and the largest Jewish membership organization in America. Hadassah was founded in 1912 by Henrietta Szold as a group of women ``interested in the promotion of Jewish institutions and enterprises in Palestine.'' What began as an attempt to provide health and social services to both Jews and Arabs in Palestine has grown into myriad undertakings. Today, Hadassah's major activities in Israel and in the United States span the arenas of health, education, social services, and environmental preservation. For instance, the Hadassah Medical Organization supplies quality medical care to individuals in the Middle East, regardless of race, religion, or nationality. The Youth Aliya Program provides housing and support for disadvantaged and immigrant youth in Israel. Additionally, the Jewish National Fund helps to build parks and preserve Israel's natural resources, while Young Judea helps U.S. teenagers build connections to Israel and Jewish life. In all of its endeavors, Hadassah has fulfilled its mission to promote a peaceful and prosperous Israel, ensure Jewish continuity, pursue social justice, and provide for the health, education, and well-being of individuals both in Israel and in America. Over its 90 years of existence, Hadassah has touched the lives of millions of individuals in a tangible manner. In a time when the Middle East remains embroiled in controversy and violence, it is comforting to find a group whose commitment has not changed over time. Even today, Hadassah provides lessons that we can all learn from. I am proud my home state of California boasts more than 25,000 members, people devoted to improving the world around them. As a lifetime member, I would like to thank Hadassah for its efforts, and look forward to celebrating future milestones with them.

Mrs. FEINSTEIN

Mrs. FEINSTEIN. Madam President, in the past year, America witnessed the extremes of both tragedy and humanity. On September 11, 2001, we endured the most atrocious and devastating attacks on our soil. After such tragic events, we searched for answers and solace and found leaders and hope. Amidst the rubble and ashes, have arisen tales of heroism, courage and compassion and we, as a nation, have emerged stronger and more united. Indeed, African Americans have contributed enormously to this outcome. As we celebrate Black History Month and honor those outstanding heroes of the past, we should also take this time to recognize the leaders of the present and their outstanding efforts. In the political arena, leadership among African Americans has transcended political and racial lines. One need look no further than to Colin Powell, our Secretary of State and Condoleezza Rice, the National Security Adviser to the President. Both have served the country ardently and tirelessly during our war against terrorism. In times of economic uncertainty, we can look to Kenneth Chenault, the Chief Executive Officer of American Express; E. Stanley O'Neal, poised to become CEO at Merrill Lynch; and Richard Parsons, soon to become CEO at AOL Time Warner, all models of successful economic achievement and leadership. From Washington, D.C. to Wall Street, African Americans have left an indelible impression on the face of American recovery and strength. Yet while these leaders have played their tremendous roles on the national stage, African Americans in communities across the country have made contributions of innumerable value. Let us not forget that the strength of our Nation is inextricably linked to the fabric of our communities. In my hometown of San Francisco, Reverend Cecil Williams has served for 35 years as the Pastor of the Glide Memorial United Methodist Church. Rev. Williams was one of five students to break the race barrier at Southern Methodist University in the 1950s and accompanied Rev. Dr. Martin Luther King, Jr. in the 1963 civil rights march. Under his leadership, the Glide Church has over 9,000 members and has become the most comprehensive nonprofit provider of human services in the city. The church maintains a wide variety of community outreach and assistance programs, such as providing people with three meals a day, 365 days a year, substance abuse treatment, support against domestic violence, job re-entry help and a free health clinic. In Los Angeles, one can find the headquarters of Operation HOPE, Inc., America's first non-profit social investment banking organization, founded by John Bryant. John is also the chairman of the board and CEO of the community-based banking organization, which strives to bring economic self-sufficiency and revitalization to inner city communities. In 1994, John was selected by Time magazine as ``One of America's 50 Most Promising Leaders of the Future'' and just last year he was the recipient of Oprah Winfrey's Angel Network ``Use Your Life'' Award. As a result of his hard work and ingenuity, Operation HOPE, Inc. has indeed become a symbol of hope to many. Miriam Shipp-Tolliver-El has helped educate an estimated 1,200 students during her 36 years as a teacher of children from kindergarten through eighth grade in the Oceanside Unified School District and 25 years as an adjunct professor at Palomar College in Oceanside, CA. Miriam encountered many racial barriers during her childhood in North Carolina. While in high school in the 1940s, she hoped to become a Roman Catholic nun, but no convents would accept an African American woman. Her next choice of becoming a civil rights lawyer was also unfulfilled because law schools in her area would not admit African American students. So Miriam became a teacher and a very accomplished one at that. She was a co-founder of the North County NAACP chapter in Oceanside. She also created a multicultural program in Oceanside schools and started black studies classes at the college. Just last year, at the age of 73, Miriam was the recipient of the Lifetime Achievement Award from the NAACP chapter and a commendation from the city of Oceanside for her endeavors and achievements. These are but simply a few of the African American leaders that serve as wonderful role models present in our communities. Countless others serve each day in several capacities such as doctors, counselors, police officers and municipal workers and their constant contributions have helped make our country as strong as it has ever been. As Mary McLeod Bethune, founder of the National Council of Negro Women, stated: If we accept and acquiesce in the face of discrimination, we accept the responsibility ourselves and allow those responsible to salve their conscience by believing that they have our acceptance and concurrence. If the events of September 11 have proven anything, it is that we must not harbor hatred nor tolerate discrimination. Now more than ever, we must embrace our differences and learn from one another. We have proven that we can stand together, united against the face of terror and threat of evil, and overcome. That determination, spirit and resolve would not be possible without the many contributions of African Americans at both national and local levels. I applaud their achievements and encourage my fellow Californians to do the same.

Mrs. FEINSTEIN

Mrs. FEINSTEIN. Mr. President, I am pleased to introduce this bill today with Senators Cantwell and Wyden to make sure that all energy transactions are transparent and subject to regulatory oversight. With passage of this legislation, we can reinstate regulatory oversight to the marketplace and help ensure there is not a repeat of the energy crisis that had such a devastating impact on California and the West. The Enron bankruptcy has uncovered many gaping holes in our regulatory structure, everything from accounting and investment practices to on-line energy transactions. Congress must take a look at all of this. The bill we are introducing today is a first step. The exemptions and exclusions to the 2000 Commodity Futures Modernization Act essentially gave EnronOnline, and the entire energy sector, the ability to operate a bilateral electronic trading forum absent any regulatory oversight or price transparency. Let me give you an example of what that lack of transparency meant to California: On December 12, 2000, the price of natural gas on the spot market was $59 in southern California while it was $10 in nearby San Juan, NM. We know it costs less than $1 to transport gas from New Mexico to California because this was the cost when these transportation routes were transparent and regulated. So there was $48 unaccounted for that undoubtedly found its way into someone's pocket. This problem lasted from November, 2000 to April, 2001, and all this time no one knew where all this money was going. The Senate Energy Committee looked at this issue last year but was not able to piece together all of what happened. In the wake of Enron's bankruptcy, however, we are beginning to learn a lot more. By controlling a significant number of energy transactions affecting California, some traders estimate that Enron controlled up to 50-70 percent of the natural gas transactions into southern California, and by trading in secret, Enron had the unique ability to manipulate prices and gouge customers. And the consumes, particularly those in California, ultimately bore the brunt of the costs. In fact, through the course of the crisis in California, the total cost of electricity soared from $7 billion in 1999 to $27 billion in 2000 and $26.7 billion in 2001. A market does not function properly without transparency. Additionally, regulators need the authority and the tools to step in and do their jobs when markets have gone awry. This bill, then, is intended to close the regulatory loopholes that allowed EnronOnline to operate unregulated trading markets in secret. The Commodity Futures Modernization Act provided a regulatory exemption for bilateral transactions between sophisticated parties in nonagriculturual and nonfinancial commodities. This exclusion includes energy products and electronic trading forums. Because many of the EnronOnline transactions did not involve physical delivery, there was also no oversight by the Federal Energy Regulatory Commission. In determining which agency, FERC or the CFTC should have the proper authority, we are faced with two challenges: 1. FERC does not have the necessary expertise in derivative transactions; and 2. CFTC does not have the necessary expertise to protect consumers from out-of-control energy prices. This bill tries to utilize the unique talents of each agency. In summary, our legislation: 1. Repeals exemptions and exclusions provided for by the Commodity Futures Modernization Act of 2000; 2. ensures that energy dealers in derivatives markets (such as EnronOnline) cannot escape federal regulation; 3. makes sure that all multilateral markets and dealer markets in energy commodities are subject to registration, transparency, disclosure and reporting obligations; 4. gives FERC regulatory oversight authority over bilateral transactions not subject to CFTC oversight. Although CFTC would have antimanipulation authority over these transactions; 5. expands FERC jurisdiction to include derivatives transactions, which are defined to include transactions based on the cost of electricity or natural gas and include futures, options, forwards and swaps unless such transactions are under the jurisdiction of the CFTC or the state; and 6. Ensures that entities running on-line trading forums must maintain sufficient capital to carry out its operations and maintain open books and records for investigation and enforcement purposes. This last point is also very important. Enron saw its future as a ``virtual'' company. As such it sold off many of its physical assets over the past few years. Investors lost confidence in Enron's ability to back up its trades since Enron did not have enough assets to back up its trades. This was a contributing factor in Enron's final spiral into bankruptcy. Energy trading has gotten extremely arcane and complex over the last three decades. Very few people fully understand how swaps and other derivatives actually work. Without adequate transparency, regulatory oversight, and a regulatory agency willing to do its job, the likelihood is that consumers will pay the price. This is what happened in the California Energy Crisis and has happened with Enron. It would be unconscionable not to do everything we can to prevent the same thing from happening again.

Mrs. FEINSTEIN

Mrs. FEINSTEIN. Mr. President, I am pleased to introduce this bill today with Senators Cantwell and Wyden to make sure that all energy transactions are transparent and subject to regulatory oversight. With passage of this legislation, we can reinstate regulatory oversight to the marketplace and help ensure there is not a repeat of the energy crisis that had such a devastating impact on California and the West. The Enron bankruptcy has uncovered many gaping holes in our regulatory structure, everything from accounting and investment practices to on-line energy transactions. Congress must take a look at all of this. The bill we are introducing today is a first step. The exemptions and exclusions to the 2000 Commodity Futures Modernization Act essentially gave EnronOnline, and the entire energy sector, the ability to operate a bilateral electronic trading forum absent any regulatory oversight or price transparency. Let me give you an example of what that lack of transparency meant to California: On December 12, 2000, the price of natural gas on the spot market was $59 in southern California while it was $10 in nearby San Juan, NM. We know it costs less than $1 to transport gas from New Mexico to California because this was the cost when these transportation routes were transparent and regulated. So there was $48 unaccounted for that undoubtedly found its way into someone's pocket. This problem lasted from November, 2000 to April, 2001, and all this time no one knew where all this money was going. The Senate Energy Committee looked at this issue last year but was not able to piece together all of what happened. In the wake of Enron's bankruptcy, however, we are beginning to learn a lot more. By controlling a significant number of energy transactions affecting California, some traders estimate that Enron controlled up to 50-70 percent of the natural gas transactions into southern California, and by trading in secret, Enron had the unique ability to manipulate prices and gouge customers. And the consumes, particularly those in California, ultimately bore the brunt of the costs. In fact, through the course of the crisis in California, the total cost of electricity soared from $7 billion in 1999 to $27 billion in 2000 and $26.7 billion in 2001. A market does not function properly without transparency. Additionally, regulators need the authority and the tools to step in and do their jobs when markets have gone awry. This bill, then, is intended to close the regulatory loopholes that allowed EnronOnline to operate unregulated trading markets in secret. The Commodity Futures Modernization Act provided a regulatory exemption for bilateral transactions between sophisticated parties in nonagriculturual and nonfinancial commodities. This exclusion includes energy products and electronic trading forums. Because many of the EnronOnline transactions did not involve physical delivery, there was also no oversight by the Federal Energy Regulatory Commission. In determining which agency, FERC or the CFTC should have the proper authority, we are faced with two challenges: 1. FERC does not have the necessary expertise in derivative transactions; and 2. CFTC does not have the necessary expertise to protect consumers from out-of-control energy prices. This bill tries to utilize the unique talents of each agency. In summary, our legislation: 1. Repeals exemptions and exclusions provided for by the Commodity Futures Modernization Act of 2000; 2. ensures that energy dealers in derivatives markets (such as EnronOnline) cannot escape federal regulation; 3. makes sure that all multilateral markets and dealer markets in energy commodities are subject to registration, transparency, disclosure and reporting obligations; 4. gives FERC regulatory oversight authority over bilateral transactions not subject to CFTC oversight. Although CFTC would have antimanipulation authority over these transactions; 5. expands FERC jurisdiction to include derivatives transactions, which are defined to include transactions based on the cost of electricity or natural gas and include futures, options, forwards and swaps unless such transactions are under the jurisdiction of the CFTC or the state; and 6. Ensures that entities running on-line trading forums must maintain sufficient capital to carry out its operations and maintain open books and records for investigation and enforcement purposes. This last point is also very important. Enron saw its future as a ``virtual'' company. As such it sold off many of its physical assets over the past few years. Investors lost confidence in Enron's ability to back up its trades since Enron did not have enough assets to back up its trades. This was a contributing factor in Enron's final spiral into bankruptcy. Energy trading has gotten extremely arcane and complex over the last three decades. Very few people fully understand how swaps and other derivatives actually work. Without adequate transparency, regulatory oversight, and a regulatory agency willing to do its job, the likelihood is that consumers will pay the price. This is what happened in the California Energy Crisis and has happened with Enron. It would be unconscionable not to do everything we can to prevent the same thing from happening again.

Mrs. FEINSTEIN

Mrs. FEINSTEIN. Mr. President, I spoke on the floor in December about how devastating the original farm bill would have been to the California diary industry. And I have said California cannot be left out of any dairy equation. California is the largest dairy State in the nation. Last year, California dairy farmers produced 32.2 billion pounds of milk--over 19 percent of the nation's supply. With over 2,100 dairy farms in the state, California leads the Nation in total number of milk cows at approximately 1.5 million. The original bill agreed to in the Agriculture Committee would have cost California dairy farmers $1.5 billion over 9 years and driven up prices for consumers by $1.5 billion over 9 years. The bill on the floor, however, will hold California harmless. While it is difficult to project exactly how much income California dairy farmers will receive, I believe that by supporting the dairy language in the farm bill, an even better result can be achieved for California's dairy farmers. I wish to thank a number of Senators for working together to find a way that the California dairy industry can be held harmless by the dairy provisions in the farm bill. While the amendment offered by the Senator from New Mexico might seem like a better deal for California than what has been agreed to in the farm bill, I believe the California dairy industry will be better off in the long run if I continue to support the careful balance achieved during the farm bill debate in December. In theory, the amendment offered by the Senator from New Mexico would be good for California because there are no caps, or limitations, on the size of the dairies that will qualify for payments. However, the California dairy industry is at the point where they believe, like many other farm groups, that we need to get a farm bill passed in the Senate and get to conference. Voting against the Domenici amendment will allow us to pass a bill. A vote for the amendment will bring it down. I will keep a close eye on the conference negotiations and expect California to continue to be held harmless, or made better off. I yield the floor.

Mrs. FEINSTEIN

Mrs. FEINSTEIN. I ask the distinguished Senator a question. Would the Senator support the amendment if we amended it to make it clear, in simple English, that the proposal is within the confines of the existing sugar program?

Mrs. FEINSTEIN. Senator Breaux mentioned two things which were our intent, in any event, that would cause him to withdraw his disapproval of the language. I ask it be set aside for a few moments or we suggest the absence of a quorum to work out the differences and add the necessary words.

Mrs. FEINSTEIN. Mr. President, is it appropriate to set aside this amendment to see if we cannot work out some language with Senator Breaux?

Mrs. FEINSTEIN. I take it.

Mrs. FEINSTEIN. Provided we could produce those amendments, would the Senator then support that?

Mrs. FEINSTEIN. I thank Senator Reid, and I thank Senators Harkin and Lugar as well. On Friday, I offered an amendment to the sugar program, which really is a minor amendment, with one exception. It seems anything that has anything to do with the sugar program is frozen and can't be changed. As I noted 6 years ago when I came here, the sugar program works to the great detriment of America's domestic sugar refineries. The largest of those domestic sugar refineries happens to be in California. It is C&H Sugar. C&H got most of its sugar from Hawaii, and they used to have ads as I grew up: C&H pure cane sugar from Hawaii. It is a plant that can employ about 1,300 people. It can refine about 800,000 pounds of sugar. It is a union plant. It is the only source of employment, the major source of employment, in a small town in the East Bay known as Crockett. You drive over the Carquinez Bridge and you see this big old plant, and that is from where this wonderful sugar comes. The problem has been, year after year, C&H cannot buy enough sugar to refine. Why? Because the allotments in the sugar program were more than two decades ago. They do not adequately reflect who is buying and who is selling sugar at the time. The amendment I have offered would simply reallocate the unfilled portion of a country's quota when that country does not fulfill its quota. That is all it does. This is less than 3 percent of the sugar. About 3 percent of the sugar on the world market that is provided for in the allocation quota does not get allocated. So on a first-come- first-served basis, a company that wanted to buy sugar would be able to because the unused allocation of one country would go to another country that is exporting sugar, and on a first-come-first-served basis the refineries of our country would have an opportunity to buy their sugar. This amendment is supported by C&H Sugar; Colonial Sugar Gramercy, LA; Savannah Foods in Port Wentworth, GA; and Imperial Sugar in Sugar Land, TX. I ask unanimous consent that two letters be printed in the Record in support of the amendment, one from the Coalition for Sugar Reform and the other from Citizens Against Government Waste.

Mrs. FEINSTEIN. The fact of the matter is, this has been done. The Secretary can do this. As a matter of fact, in 1995 I implored Secretary Glickman to do just this, and he did it. The problem, I say to those opposed to this amendment, is that every year you have to go and lobby; every year you have to try to see that this company and others similar to it are able to get enough sugar. That is not right. Sugar programs should not operate this way. Awhile ago, we asked GAO to take a look at the sugar program. The GAO came up with exactly what we are proposing today. Let me read a couple of things. Some of the 40 designated countries have been provided an export allocation when they no longer export sugar. According to the GAO, on average, from 1993 to 1998, 10 out of the 40 countries were net importers of sugar. These countries are not exporting sugar because clearly they are importing sugar. Some countries have similar allocations under the quota despite dramatically different levels of sugar exports. For example, Brazil and the Philippines are both allowed to export around 14 percent of the total quota, but Brazil exports 21 times more sugar than the Philippines worldwide. In my view, it is unacceptable that sugar quota allocations have not been revised for two decades, despite dramatic changes in the ability of many countries to produce and export sugar. Is there a way to update the sugar export amounts allowed into the United States without adversely impacting domestic growers? I believe there is, and the amendment I have offered would provide this change. Incidentally, I would like the Record to reflect that Senator Gregg is a cosponsor of this amendment, if I may. The United States has imported on average, as I said, about 3 percent less sugar than the quota allowed from 1996 through 1998 because some countries did not fill their allocations. Now the question was asked in the caucus today by the distinguished Senator from Louisiana, What would happen to price if this amendment were passed? Let me again quote the GAO: USTR's current process for allocating the sugar tariff-rate quota does not ensure that all of the sugar allowed under the quota reaches the U.S. market. The current allocation has resulted in fewer sugar imports than allowed under the tariff-rate quota. From 1996 through 1998, US raw sugar imports averaged about 75,000 tons less annually than the amount USDA allowed USTR to allocate under the tariff-rate quota. The final quote from the GAO is this: Because the shortfalls in the tariff-rate quota reduced US sugar supplies by less than 1 percent, they had a minimal effect on the domestic price of sugar. So what I am saying is you can have a system that allows domestic refineries to buy sugar that they need from countries that are not using their allocated quota, and this will have a very slight, if any, mark on the domestic price of sugar. What is dreadfully unfair is to have a situation where domestic refineries, hiring men and women who live in this country, that want to refine sugar are prevented from doing so by a bill where the allocations and the quotas have not been revised in two decades. So I am asking the Senate to please permit this small change in the sugar program. I reserve the remainder of my time.

Mrs. FEINSTEIN. I thank the Senator. Our intent in drafting the amendment was that the sugar that comes in is within the program, not outside the program. But only 40 countries now covered by the program are eligible to participate. If there is an inadvertent error, we will be happy to correct it. The intent is that it be within the program. Then, from a country that is in the program but is not using its allocation, and sold on a first-come-first-served basis, so if the price is going to be changed, there will not be a buyer for the sugar.

Mrs. FEINSTEIN. I agree very strongly with the Senator from Washington that we need to fund the Market Access Program at $200 million. If American agriculture is to remain competitive, we must ensure that our farmers are given the same support that their foreign competitors receive. Heavily subsidized foreign citrus entering the U.S. has quadrupled over the last five years, significantly lowering prices domestically for California growers. In the European Union alone, government subsidization of the fresh produce sector reaches upwards of $15 billion each year. The Market Access Program provides new jobs--jobs for longshoremen, jobs in processing, jobs in transportation, and of course, jobs for growers. The Market Access Program is an important tool in expanding markets for U.S. agricultural products. The U.S. Department of Agriculture estimates that each dollar spent on the Market Access Program results in an increase in agricultural exports of between $2 and $7. Small farmers especially benefit from this program because they would not be able to break into these foreign markets on their own. The Market Access Program helps create and protect U.S. jobs, combat inequitable trade practices, improve the U.S. balance of trade, and improve farm income. I thank the Senator from Washington for her leadership on this issue. I look forward to continuing our work together on increasing funding for this valuable program. To the distinguished Chairman of the Agriculture Committee, thank you for your continued help and support.