Jeff Flake

Mr. FLAKE

Mr. FLAKE. Mr. Chairman, I demand a recorded vote.

Mr. FLAKE. I thank the Chair. This amendment would strike additional flood-related coverage provided in the underlying bill for business interruption and cost-of- living expenses. Specifically, this amendment would prohibit FEMA from offering individuals up to $5,000 for living expenses and up to $20,000 for interruption of business expenses. I understand that the committee worked to ensure that the inclusion of this additional coverage would be provided at fully actuarial rates, but let me remind this body that Congress does not have a great track record when it comes to pricing risks. One has to look no further than Fannie Mae and Freddie Mac to see an example of that, or just look at this program, itself. The National Flood Insurance Program is about $18 billion in the red. Let me say that again. We have a Federal flood insurance program that currently owes the Treasury Department nearly $18 billion, so we shouldn't take at face value the notion that any new coverage that's offered is priced at fully actuarial rates. This expansion of coverage will only increase taxpayer liability, which is the last thing that this Congress ought to do with a program so severely in debt and with a country so severely in debt. Instead, we should be passing legislation to narrow the scope of the NFIP, not to expand it. Simply put, any reform to the NFIP should be moving toward privatization, and I am sure this belief is shared by a number of my colleagues. Voting against this amendment is a vote to expand the current National Flood Insurance Program. Again, a vote against this amendment is a vote to expand the current flood insurance program, a program that is currently $18 billion in debt to the U.S. Treasury. My understanding is that private market participants are hesitant to offer this type of coverage because it is not profitable for them to do so. I'm not sure I've ever seen an instance where government involvement in the market incentivized the private sector to compete. In fact, according to testimony from Taxpayers for Common Sense: ``We have learned from Federal flood insurance itself that the best way to stifle a private market is to have the Federal Government provide the same product.'' That simply makes sense. When you have a Federal Government borrowing 41 cents on the dollar, the last thing we need to do is expand an insurance program that is already $18 billion in the red. Again, voting for this amendment isn't to cut this program--I wish it were--but it is simply to not allow the program to expand further. FEMA estimated that had this same policy been enacted in 2005 before Katrina and Rita hit, combined losses from additional expenses and business interruption would have been about $600 million in net losses. If you consider the increase in policies since 2005, they estimated if we had another 2005-like year, this additional coverage would result in $850 million in net losses just for 2011. We can't afford to do that, Mr. Chairman. If there is no private market for this type of coverage, we ought to understand why there is no private market, and having government enter the marketplace will only ensure there is no private market for it. We shouldn't be comforted by the notion that we will hear, I am sure, that the premiums will be priced at fully actuarial rates. That's saying that there's no private market out there, government has to be involved, but we have priced it as if the private sector were involved. Anybody who believes that, I have a bridge somewhere to sell you. Government entrance into this type of marketplace is simply not right. We shouldn't be doing it. And to my colleagues who think that we have a debt problem today, think what problem we will have if we have another year like 2005. According to FEMA's only projections, it could result in $850 million in net losses. So I would urge adoption of the amendment. I yield back the balance of my time.

Mr. FLAKE. I have an amendment at the desk.

Mr. FLAKE

Mr. FLAKE. Mr. Chairman, I demand a recorded vote.

Mr. FLAKE. That's below the President's request, not below the budget----

Mr. FLAKE. The gentleman mentioned that this defense budget is cut $7 billion below?

Mr. FLAKE. Will the gentleman yield?

Mr. FLAKE. I thank the gentleman.

Mr. FLAKE. I thank the gentleman for yielding. I should mention the gentleman from Washington mentioned that the Secretary of Defense said we have got to do something about these schools. I should note that this was not in the Defense request. If he thought something ought to be done, you would think that they would have put it in their request. They didn't. It wasn't in the authorization bill. There is a Department of Education program, a competitive program for this already. If we think that it should have more money, then it should.

Mr. FLAKE. I just appreciate that this is not the most ridiculous amendment. I'm glad that threshold was reached.

Mr. FLAKE. I have an amendment at the desk, designated as No. 2.

Mr. FLAKE. I have an amendment at the desk, designated as No. 3.

Mr. FLAKE. Mr. Chairman, I demand a recorded vote.

Mr. FLAKE. Mr. Chairman, I demand a recorded vote.

Mr. FLAKE. This amendment is straightforward. It will simply reduce the amount appropriated to the Overseas Contingency Operations Transfer Fund by roughly $3.5 billion. We often hear in this body the Constitution grants the Congress the power of the purse, that the President's budget is not sacrosanct, and that Members should be able to guide Federal spending. I agree with that. So I was quite surprised that the committee included in this bill an appropriation of $5 billion to the Overseas Contingency Operation Transfer Fund, but provided virtually no guidance on how it should be spent beyond requiring that any obligations be, quote, pursuant to the global war on terrorism. That's roughly 4 percent of the overall cost of the war spending portion of this bill. I understand the funding could provide the Department of Defense with a little more flexibility as it moves ahead with operations in Afghanistan, while simultaneously withdrawing troops from Afghanistan and Iraq. I am sympathetic to the need to properly fund the war in a way that requires us to budget for it. But this $5 billion with very few strings attached could also be used for just about anything, including, as a bargaining chip, for negotiations with the Senate, according to the CQ Today article, which ran on June 14. I would submit that it's an expensive bargaining chip, and it's a very risky gamble, in my view. The President recently announced his intent to withdraw 10,000 U.S. troops from Afghanistan, which I think he will make the case for in the months ahead. And the Department of Defense has some flexibility as we move ahead in the months ahead. So I think it's fair to reduce the amount appropriated in this fund to roughly $1.5 billion. That amounts to 1 percent of the war-related costs of the bill instead of 4 percent. Oversees Contingency Operations Transfer Funds have been requested in the past by the Department of Defense. I understand that. I think we all understand that, to give the Department of Defense some flexibility. What I am saying here is, $5 billion is a little too much flexibility here. Let's regain our prerogative here to direct this money, to have the power of the purse and simply not allow that amount, $5 billion. That would simply reduce it to $1.5 billion. According to CQ Today, the Army requested about $2 billion for transportation expenses in Afghanistan. The House panel said that funding need was overstated because the Army was assuming all supplies are flown into that country, when only about 20 percent arrive by air. I commend the committee for carefully drilling down on the requests submitted by the services and identifying places where funding is unjustified and unneeded. However, instead of pulling back all the money in what could become a slush fund, we should do better. We should take steps to simply make sure that money that doesn't have to be spent is not spent. That's what this amendment does. I urge its adoption. I yield back the balance of my time.

Mr. FLAKE. Will the gentleman yield?

Mr. FLAKE. I thank the Chair. This amendment would reduce the operations and maintenance defense- wide account by $250 million, the same amount appropriated by section 8122 of the bill. Section 8122 appropriates another $250 million in FY12 for the Secretary of Defense to use for the Office of Economic Adjustment, or to transfer to the Secretary of Education to make grants to public schools located on military bases for construction, renovation and repairs. I will just summarize what's happening here. We have some schools that are on military bases. Now, some of the schools on military bases are run by the Department of Defense. That's not what we're speaking about here. The schools that we're talking about here, LEAs, Local Education Agencies, run them. In the FY11 budget, we appropriated $250 million of defense money--this is in the Defense bill--to go to schools that are the responsibility of Local Education Agencies. Now, some of these schools are in disrepair. They're in bad shape. Nobody's questioning that. Education budgets are tight everywhere around the country. Ask your own States. Ask your local school districts. But we cannot continue to divert money from the Department of Defense simply because that's where money is and few people question it. I'm sure the gentleman will stand up here and say, hey, these schools are in bad shape; they're on military bases; we've got to fix them, and the Local Education Agencies have said these schools are in disrepair. But why are we taking money that should be going to the military, to the troops, to other purposes, and diverting it to local education or local schools that are the responsibility of Local Education Agencies? I have here one of the contracts for one of these schools that is being discussed here. It says: The permittee or his designee shall, at his own cost and expense, protect, preserve, maintain, repair and keep in good order and condition these schools. This is a Local Education Agency, not the Department of Defense. That shouldn't be the responsibility of the Department of Defense, and we're bleeding off $250 million. I'm sure the gentleman will stand up and say this is needed, this isn't going to be a continual thing, we've just got to bring these schools up to repair. They'll say that the Department of Defense has said that these schools are in disrepair. They are. Nobody is questioning that. The question is: Where should this money come from? And if we have this kind of money to throw around for defense, then we ought to be cutting more defense funding. This funding, if there's a problem, it should go through the Local Education Agencies, or convince the Federal Department of Education through Impact Aid to send money to these schools, but not the Department of Defense. That has been the practice, unfortunately, around here for quite a while now. We say, all right, what account can we take money from, for earmarks or whatever else, that few people will question? It's defense spending. We take that off for education or research or whatever else, and pretty soon we're diverting a lot of money that should go to the troops to other purposes. Like I said, nobody's questioning that these schools are in bad repair. Newsweek ran an article on June 27 that said 39 percent of the schools run by the public systems on Army installations fell in the failing or poor category. I don't question that. Nobody does. What's at question here is another $250 million. As I said, we appropriated in the FY11 budget $250 million. So apparently this is going to become a standard practice now? And then you start to get the prospect of Members of Congress starting to submit their local bases, saying, hey, the schools there are bad, and we get into the old earmarking game by letter, or phone marking, or whatever else, because it will be the spoils system all over again as to who gets the defense money to actually fix these schools. So this would simply say this money, $250 million that has been requested for this purpose, shall not be spent. The gentleman may stand up and say, hey, this is generally taken from the Department of Defense, or from the operations and maintenance, and so that's not specific enough. Believe me, the Secretary of Defense, if they have the choice to fund the troops or the schools, will fund the troops because the schools are under the responsibility of the local education agency. The Department of Defense may submit a list and say these schools are in disrepair, but it's not the responsibility of the Department of Defense to fund these schools.

Mr. FLAKE. I have an amendment at the desk, designated as No. 1.

Mr. FLAKE. The amendment would reduce each of the Research, Development, Test, and Evaluation accounts by 1 percent, or roughly $730 million below the currently appropriated $73 billion provided in this measure. Amendments of this sort have been offered to other Defense-related measures recently, though they have attempted to cut amounts far greater than what I am proposing. During one of these debates, the chairman of the Defense Subcommittee made the point that ``if you are going to reduce the defense budget, there ought to be a good reason.'' I agree. And I submit that both the severity of the fiscal situation we face and the consequences of inaction are compelling reasons to reduce the defense budget along with everything else. The Appropriations Committee started a positive trend when, during the consideration of appropriations for fiscal year 2011, it reduced the RDT&E accounts below the levels that have been funded in recent years. I applaud the committee for taking a serious look at these and other accounts and for acting accordingly, but I think we need to do better. We're going to have to get used to cutting defense budgets here if we're going to get our fiscal situation in order. The defense budget accounts for roughly half of the discretionary spending that is considered during the regular appropriations process during the year. According to the Domenici-Rivlin Commission ``Restoring America's Future,'' RDT&E budgets have increased from $49.2 billion in fiscal year 2001 to $80.2 billion in fiscal year 2010. So you are seeing an amount of about 80 percent higher now than they were in just 2001. That is a 63 percent increase. I'm getting my math wrong here. That report also suggested reducing the RDT&E budget would ``impose greater discipline in research investments.'' In addition, Gordon Adams of the Stimson Center argues in an essay in Foreign Affairs magazine that the RDT&E budget should be reduced, saying that ``it would be safe to cut it, too, by 19 percent between fiscal year 2012 and fiscal year 2018. Such a reduction would yield $87 billion in savings while keeping the United States' level of military R&D far above any other country.'' I'm not attempting to or suggesting that we make cuts that deep in these accounts with this amendment. I recognize that they have already taken a sizeable hit in fiscal year 11. I also know that my colleagues will come to the floor and tout the values of these accounts. They'll talk about and highlight important successes we've achieved with weapons and other systems that wouldn't have been possible without these accounts. I recognize that. But if we're all going to have to get used to voting for cuts in defense, cutting 1 percent of the $73 billion made available to RDT&E is far from Draconian and will not preclude any such future successes. I urge adoption of the amendment. I yield back the balance of my time.

Mr. FLAKE

Mr. FLAKE. Madam Chair, I have an amendment at the desk.

Mr. FLAKE. Madam Chair, as I'm certain my colleagues are aware by now, in 2002 Brazil filed a complaint with the WTO accusing the U.S. of trade-distorting cotton subsidies that were inconsistent with our international trade obligations. The WTO sided with Brazil; and after years of debate, a WTO arbitration panel authorized Brazil to engage in retaliatory trade sanctions against the U.S. for more than $800 million. Instead of effectively reforming our programs, however, the administration agreed to pay $147.3 million annually in technical assistance to Brazilian cotton farmers every year until the issues of trade compliance in our cotton programs are resolved in the next farm bill's passage or a mutually agreed upon solution is reached. There is little chance that we're going to have reauthorization this year of the farm bill. I would suggest that it's probably not likely that we will do so next year either. So here we are again. We've talked about this before: spending money, 147 million taxpayer dollars to the Brazilians, so that we can continue to subsidize our own cotton farmers. We simply shouldn't do that. Now some will say, hey, if we do this, it will spark a trade war, if we get rid of this payment to Brazil. In my view, we dealt with that effectively in the Appropriations Committee. I offered an amendment saying if you want to pay the Brazilians off to not have them retaliate for our trade protections, then let's do that out of the money we're giving to our own cotton farmers. So take out of direct payments $147 million and pay that. That amendment was adopted in the Appropriations Committee. Well, guess what? A point of order was raised here and that amendment was stricken, so we couldn't do that. So all this concern--people say they're concerned about the taxpayer, well, we protected the taxpayer there by saying let's take the money out of the fund that we already pay our own farmers and pay off the Brazilians. That was rejected here. And so here we are again. We have an amendment that will be voted on later, the Kind amendment, which will simply strike that payment. I plan to vote for that amendment; I hope we do that. But another way of approaching that as well is to simply go at our own cotton subsidies to ensure that we're not distorting the market by doing this program in the first place. Now the Ag Committee will say, that's our expertise, let us deal with that; we'll deal with that in a new farm bill. Well, they dealt with that in the old farm bill, and many of us stood here and warned and said this is trade distorting; the WTO is going to rule against us and we're going to end up with retaliatory trade sanctions. Well, the Ag Committee went ahead and did it anyway. It didn't fix the problem. They will say, well, we tried, we tried. But it's not the direct payments that are the problem. It's the countercyclical, it's the other programs that we have. And until that is dealt with, we're going to have these trade sanctions. So when the Ag Committee stands up and says let us deal with that, I would remind people we have let them deal with that, and they haven't dealt with it. And so we have to go about it in another way. I would simply say we cannot continue to subsidize our own ag interests this way, in particular this cotton program, when we know it's out of step with our international trade obligations. So you can go about it in two ways. You can go ahead and say, hey, we're going to not pay Brazil this amount, this protection money--or whatever you want to call it, this tribute--and then that will force us to deal with our own cotton subsidies; or we can deal with the cotton subsidies ourselves with this amendment and simply say we aren't going to do these trade-distorting cotton subsidies anymore. Then there won't be a need to pay Brazil off. So that's what this amendment does. I would urge adoption of it. I yield back the balance of my time.

Mr. FLAKE. Will the gentleman yield?

Mr. FLAKE. I thank the gentleman. I recognize the appropriations process isn't the best way to legislate, it really isn't, and this is a clumsy way. This only applies to this act, and you have to do it in strange ways. I understand that. But we are told that we ought to rely on the expertise of the Ag Committee. Well, the expertise of the Ag Committee is what got us into this problem in the first place. It is what got us into the problem of having to pay Brazil in order to continue to subsidize our own farmers. That is what we are dealing with here. I recognize this is clumsy. I recognize this is uncomfortable. But we have got to do this some way, and we can't rely on just waiting until the next farm bill is passed. It may not be this year, or likely won't be. It won't be next year, or likely won't yet. So we could be doing this for years. So I recognize it is clumsy, I apologize for that, but we have to do something at some point.

Mr. FLAKE. I thank the gentleman. I want to thank the gentleman for his work in this area for a long time over the years to try to end these out-of-step programs that we have in the agricultural field. Let me just correct something that was said before. It was said that we're in this position because of Brazil, because of the practices that they're doing. No. It's because our own agricultural policy--in this case, our cotton subsidies--is trade distorting. Nobody can stand up in this body or on this floor and make a case otherwise. Nobody can stand up with a straight face and say that our cotton program that we have is not trade distorting. That's why we're in this problem. That's why Brazil was able to take this case to the WTO, and the WTO ruled in their favor--because we have trade distorting farm policies. That's what we need to fix. That's the intent of this amendment. There was an amendment last night by Congressman Kind that will be voted on later today. I may not and likely will not call for a rollcall on this one so that people can focus on that one. The Kind amendment limits payments to Brazil. If we do that, then we can force a change in our own policy, and we can force that issue better than perhaps any other amendment right now. So that's what I would encourage people to vote for, is the Kind amendment, when it comes to a rollcall later. If you do not believe that it's proper to be sending money to Brazil to address our own trade distorting cotton policy, then vote for the Kind amendment later today. I thank the gentleman for yielding.

Mr. FLAKE. I yield to the gentleman from Georgia.