Phil Gramm

Mr. GRAMM

Mr. GRAMM. And that following that, the Senator from Missouri be recognized for 5 minutes. I think that covers everybody present.

Mr. GRAMM. I was just setting up a procedure where we can all speak.

Mr. GRAMM. Mr. President, if the Senator will yield for a moment--I think this is the order in which we appeared on the floor--so we can all make plans, I ask unanimous consent that when the Senator from Texas finishes, I be recognized for 5 minutes, and then the Senator from Georgia be recognized for 5 minutes.

Mr. GRAMM

Mr. GRAMM. Mr. President, I thank my colleague for his speech. I think we all share some frustration--obviously, from different viewpoints--about the stimulus bill. I would just like to suggest there is a solution to the problem; and that is, we could have a unanimous consent agreement where we would let our Democrat colleagues put together a stimulus package, we would put together a stimulus package, we would have a unanimous consent agreement to vote on both of them, and if they both got over 50 votes, then the one that got the highest number of votes we would take to conference with the House. And we would, therefore, be on our way to have a stimulus package. Our Democrat colleagues are not going to accept that proposal because the problem is, we have a majority vote for a bipartisan agreement that was put together by Senator Snowe and Senator Breaux it has nice rhythm: Snowe and Breaux and it is supported by moderates on both sides of the aisle and has very strong support among Republicans in general. I remind my colleagues the sad history of the stimulus package is that the President met with Democrats and met with Republicans, took some Democrat ideas, took some Republican ideas, and made a bipartisan proposal, which I believe the President earnestly thought, in the aftermath of September 11, we would adopt. What happened--almost immediately--is that our Democrat colleagues said: We will take the half of the bill that is ours, but not the half of the bill that came from the White House and from Republicans. We can go back and forth and make our arguments. We have clever people on both sides of the aisle. We can argue we don't see any stimulus in the Democrat package. Obviously, they can make the same argument. I don't know who would be convinced on either side. But when that effort failed, Democrats and Republicans in the Senate got together and put forth the only bipartisan proposal for a stimulus package that has been put forward in the Senate. At that point, we clearly had more than 51 votes for a stimulus package. This was way back before Congress adjourned in December. In an extraordinary action, the President said: Take that bipartisan compromise. Let's agree on it. I will sign it into law. He asked the House of Representatives to take a bill written by the Senate, to introduce the bill in the House, and pass it, and send it to the Senate. At that point, as the session drew to a close last year, the majority leader, Senator Daschle, knew that the bill that had been passed by the House, and had come over here, and was waiting at the desk, that there were a majority of the Members of the Senate--Democrats and Republicans--who would vote for that bipartisan proposal if it were brought to the floor of the Senate. No one can dispute those facts. What did the majority leader do? He refused to bring it to the floor of the Senate. When we came back into session, the majority leader took three provisions from the President's proposal--some in a slightly different form than the President had put in his proposal--because Democrats had proposed them, threw the rest of the package out, and then made up a fourth proposal that no one had seen, and brought that forward as a stimulus package. He has every right to do that. He is the majority leader. But we have a right to offer our amendments. We have offered amendments. Some have been adopted. Some have been rejected. We have had an orderly debate. We have been willing to set time limits on votes. And now the Democrat floor leader says that we are getting nowhere and that this is not a real effort. We ought to have an opportunity to vote on a bipartisan proposal. I believe it would pass. It looks as if we are not going to do that. We want an opportunity to vote on some things we believe will stimulate the economy. I will, before I address the amendment before us, sum up the point I made earlier. The majority leader has some choices. He can bring up his bill and give us the right to try to improve it. That is what we are trying to do. He says now he is going to pull down the bill because we are trying to improve it. He has the right to do that. A second alternative is to bring up the bipartisan bill and give Senator Daschle a chance to amend it. I think we can work out an agreement to do that, but I do not believe Senator Daschle is going to do that because the bipartisan bill will pass. A final proposal, which I repeat in case anybody is interested in a compromise, is let the Democrats sit down and write the best bill they can write. We are going to take the bipartisan bill. It is not the best bill we can write, but it is a bill that has over 51 votes. It is not wonderful, but it would help the economy both in the short term and in the long term. We are going to take that bill. Let the Democrats bring forward their proposal as to how we stimulate the economy, and let us bring ours forward. We will vote on both of them, and the so-called ``king of the hill'' parliamentary procedure that we could put into place by unanimous consent is the one that gets the most votes will be deemed passed, and then we can go to conference with the House, and perhaps we might get a stimulus bill. I do not see how anybody can say that is unfair. Senator Daschle could get a vote on his stimulus package. We could get a vote on the bipartisan one, and majority would rule. I do not think that is going to happen because the Daschle package would get fewer votes. We all know it. The bipartisan bill would pass, and I believe that would be objected to. What does this all boil down to? The one bill that can pass the Senate, the majority leader will not allow to be voted on. You can say that is a good thing and you can say that is a bad thing, but it is a fact, and that is the impasse in which we find ourselves. We now have a bill that very few people are for, and we just want to try to amend it. We have an amendment before the Senate which is a very important amendment. When we passed the tax cut last year, we faced a parliamentary problem that most people do not understand; that is, we were operating under a process called reconciliation. That is a budget process. It means the things you do under that process can extend no longer than the budget unless you can waive a point of order and get 60 votes. Some will sadly remember that the tax cut received 58 votes in the Senate. We did not have the votes to waive this process so the tax cut could last only as long as the budget, and the budget was only 10 years long. It produced this incredible situation that stuns the American people when we tell them. The tax cuts that we passed--eliminating the marriage penalty, eliminating the death tax, reducing tax rates dramatically--all of those provisions go away in 10 years. Nothing is more destabilizing to the economy than having a temporary tax system. There is no doubt that we affect behavior when people do not know what the system is going to be in the future. This is especially true with regard to the so-called death tax. As our dear colleague from Arizona has pointed out very clearly, we have this incredible anomaly that if you die, depending on in what year you die, between now and the 10th year of the tax cut, the taxes you pay will vary. If you die in the 10th year, your family will inherit your business or your farm or your assets tax free. If you die in the 11th year, they are going to have to sell your business or sell your farm, sell or mortgage your life's work to give the Government 55 percent of every dollar you accumulated worth of value on your farm, your business, your assets in your lifetime. Needless to say, that is an absurd circumstance. I, quite frankly, am concerned that people who have some kind of serious illness might actually choose to end their lives in the 10th year. That is not beyond my imagination. We had a strong consensus on repealing the death tax. I know our dear colleague talked about rich people, but, we had a consensus that if somebody works their whole life, they pay taxes on every penny they earn and they skimp, they save, and they sacrifice and they build up a family farm, it is not right that their children have to sell the family farm to give Government a double taxation by paying 55 cents out of every dollar they accumulate in their life back to the Government. The same is true for small business. The National Federation of Independent Businesses, in surveying companies, found that the No. 1 reason small businesses do not survive into the second and third generation is death taxes. I rejoice. I know some of my colleagues view the whole world as a class struggle. They believe all of existence is a conflict between the rich and the poor. I always get confused about who is who because it changes so often. I liken the stimulus package to the coldest week of the year, it is snowing, it is sleeting, it is freezing, and a breeze comes along and blows a roof off an apartment building. Logical people say: Why don't we rebuild this roof? We have colleagues who say: Wait, won't people make money rebuilding this roof? There will be a profit, and don't rich people tend to live on the higher floors of this apartment building? Won't they benefit more by having a roof than the poor people who live in the basement and on the first and second floors? Really, wasn't that what the stimulus debate was all about? Honest to God, what we do, remarkable as it sounds, is we end up buying a bunch of blankets, stockpiling penicillin, we hire a bunch of doctors and nurses, and we spend a whole winter treating people for exposure rather than rebuilding the roof on the apartment building. On the death tax--and I am sure my colleague from Arizona will concur--I have never spoken on this subject in my State to any audience no matter what their background, what their education, no matter what their income, no matter what their wealth that did not believe that it was fundamentally wrong to force a family to destroy their life's work in a business or a farm to pay taxes when somebody died. People fundamentally think it is wrong to tax death. You have to die anyway. That is never a happy event. Why should we compound it by rushing in and collecting a tax at that moment? I have found in watching audiences, when I have spoken on this subject, it does not seem to matter whether it is a local banker or whether it is a guy who works at the filling station. Nobody believes, at least in my State, that it is right when somebody has paid taxes their whole lives, has built up a farm or a business, to take it away from their children when they die. We reached a bipartisan consensus on that principle, but because of this fluke in the budget process the death tax comes back in 10 years. So we have 1 year where it is repealed. The Senator from Arizona, in an amendment I am proud to support, has proposed we make the repeal of the death tax permanent. My guess is we are not going to get to vote on that this evening. I assume the Senator from Arizona would love to vote on it today. Our Democrat leader, our dear friend, has said there is a stall underway. We would like to vote on this amendment now. At some point, the Senator from Arizona might ask unanimous consent that we have an opportunity to vote on this amendment this afternoon. What I am fearful is going to happen is we are going to have a vote on cloture--and nobody knows what that means except people in the Senate, but that means no more amendments can be voted on, the Daschle proposal has to be voted on by a yes or no. If that is defeated, as I believe, A, it should be and, B, it will be, then in listening to Senator Reid it sounds to me as if the majority leader is saying he will pull down the bill and we will never get a chance on this bill to vote on making the death tax repeal permanent. I think this is an important issue. I would like to vote on it. Perhaps if people want to get on with writing the bill, if we could make the death tax repeal permanent, as bad as I believe the Daschle proposal is, I believe it does absolutely nothing for the economy, I would have a hard time not voting for it if we were making the death tax repeal permanent. Quite frankly, if Senator Daschle wanted to pass his bill he could probably pick up at least two votes by supporting our amendment. So, A, I hope we can vote on this today. B, I hope we can vote on it someday. C, I believe when the American people understand we did not really repeal the death tax unless you die 10 years from now and if you do not die in that year it comes back, I think they are going to demand it be repealed, and I believe it will be repealed. I do not have any doubt in my mind we will repeal the death tax. I thank the Senator from Arizona. I urge him to talk to the majority leader about having a vote this afternoon. We would like to vote. Every Senator in the Chamber right now, except Senator Reid, is convinced, and the Presiding Officer, and we are ready to vote. We would like to have a vote on this issue. Perhaps if we could adopt this amendment, we might be moving toward a stimulus package that would be truly bipartisan. I thank my colleague for his leadership, and I yield the floor.

Mr. GRAMM

Mr. GRAMM. Mr. President, I ask unanimous consent that a member of the staff of the chairman of the Finance Committee, Christy Mistr, be granted the privilege of the floor.

Mr. GRAMM

Mr. GRAMM. Mr. President, I want to begin by talking about the history of how we came to where we are today. Then I want to talk about where we go from here. When it became clear that the country was in a recession--in fact, before many people in Congress recognized that we faced an emergency situation--the President started to talk about a stimulus package. The President met with Democrats and Republicans. I remember a day I went down to visit with the President as he was soliciting advice as to what should be in a stimulus package. My advice was that there are two things we could do that would dramatically help the economy and that during the recession not only would not cost us money, but incredibly would probably put money in the Treasury. Those two proposals--not surprisingly, given that I made them--were to cut the capital gains tax rate and to make the tax cut permanent. From the time of John Kennedy, in each and every case where we have reduced the capital gains tax rate, we have encouraged people to more efficiently manage assets, we have encouraged investment, and people have actually paid higher taxes--at least in the short run and often in the long run--as a result of those changes. It seemed to me then and it seems to me now that cutting the capital gains tax rate would be the cleanest, most efficient, least expensive way of stimulating the economy. In fact, for the remainder of this recession that action would almost certainly put money in the Treasury, not take it out. In terms of making the tax cut permanent, what could be more destabilizing than having a Tax Code that is going to expire in 10 years? We tell people about how we are cutting their tax rates, we are eliminating the marriage penalty, we lowered the 15 percent rate, we will repeal the death tax, and yet everybody who has read the fine print knows in 10 years, because of a budget technicality, the old Tax Code comes back and a massive increase in taxes occurs in 1 day. In fact, there is the absurdity that if you die today, you face one set of taxes on your small business or your family farm that you built up; if you die 9 years from now, you face no death taxes; and if you die 10 years from now, the Government takes 55 cents out of every dollar you have earned in your lifetime and takes it away from your family, often forcing people to sell their small business or sell their family farm. What do you think people think about the prospects that if you die in 9 years, you pay no death tax, but if you die in 10, the Government takes 55 cents out of every dollar you earn? I, quite frankly, am concerned as to what is going to happen in that ninth year, with the kind of perverse incentives we have created. I proposed to the President that we make this tax cut permanent. Supposedly, we intended it to be permanent and I thought the stability that would come from having that certainty would help the economy. The President's response was that we had to come up with a package that was going to be bipartisan and that he did not believe those policies would be accepted by our Democratic colleagues and that they would become a lightning rod in the debate. Obviously, I did not agree with that, but the President came up with a proposal where over half the proposal came not from recommendations that Republicans made but from recommendations that Democrats made. The President, however anybody wants to criticize him, basically sat down thinking that after September 11, something had really changed. I remember a colleague of mine sitting in my office saying: After the 11th, things have changed forever. I suggested that forever is a very long time. By January, the things that had changed in Congress about cooperation had pretty much changed back, unfortunately. But the President--and I say this as a great compliment to him--when he wrote his initial stimulus package, tried to take Democratic ideas and Republican ideas and come up with a bipartisan compromise that he thought might be adopted on a bipartisan basis. So the debate started, and the House passed a bill. They passed it on a partisan basis. We had a debate in the Senate, but nobody could get to the 60 votes necessary to pass a bill, and we had an impasse. Then a series of our more moderate Members--I was not a member of this group--got together, Democrats and Republicans, and came up with a bipartisan proposal. That bipartisan proposal basically picked and chose among various stimulus proposals that had been made. Based on the fact we clearly had a majority of Members of the Senate who were for this bipartisan proposal that emanated from the Senate, the House of Representatives passed that bipartisan proposal in the waning hours of the last session. That proposal then came to the Senate. However, Senator Daschle decided to not allow it to be considered, even though clearly a majority of Members of the Senate--Democrats and Republicans--were for that bill. That is the way the last session ended. We are now in the new session. Senator Daschle approached our leadership and said: I am willing to bring up a stimulus package. But he was not willing to bring up the stimulus package the President proposed. He was not willing to bring up the stimulus package the bipartisan coalition proposed. What he wanted to do, in essence, was to take the provisions from the President's proposal that he agreed with, all of them in one form or another things the majority of Democrats were for, and he wanted to bring that up. Now we are perfectly supportive of bringing that bill up. The majority leader ultimately can bring up any bill he wants to bring up, but our basic position is simple and straightforward, and I think anybody who is trying to be objective about this will see it makes sense. If we bring up the bipartisan bill that was put together by moderate Republicans and moderate Democrats, I think within that context we could have an agreement limiting the number of amendments we would debate. Senator Daschle and others would have an opportunity to offer a substitute or other amendments. Those of us who might want to strengthen the package from an economic stimulus point of view would have an opportunity to offer a couple of amendments, and that would be it. That would have been a reasonable and acceptable proposal. The proposal the majority leader made, however, was to bring up a totally new bill, one-quarter of which--giving money to the States--was never in any of these other proposals I have seen. The President did not propose that. The House did not adopt that. Where that came from, I do not know. The point is: We have a bill before the Senate, and my suggestion is we let the Senate work its will; that we have a series of amendments, a Democrat amendment, a Republican amendment; that we debate these issues. There clearly will be an amendment to expand the accelerated depreciation part of this bill. We have a bill before us that provides accelerated depreciation for about 9 months. We had a proposal initially for 3 years. There will almost certainly be an amendment on that and it ought to be voted on. We have had a lot of debate about overturning the tax cut, not letting it go into effect. Clearly, I think we can provide some certainty to investors and to consumers by having the Senate go on record that we are not going to overturn the tax cut. I personally believe we will benefit the economy if we have the Senate make the repeal of the death tax permanent. I would like to have a vote on it. I am sure there will be many amendments, or some amendments, on the Democrat side, but it seems to me that if one wants to make up their own proposal--and when they are the majority leader, they have the right to do that--they have to recognize other people may not support it and they will want an opportunity to present their ideas. That is how the Senate rules work. If we had gone to something that had been agreed to by the majority of our Members to begin with, I think we might have limited amendments, but now I think what we need to do is to simply start the process of offering amendments. I do not know how long this is going to take. I do not think, quite frankly, it is going to take a terribly long time. I think there are issues that need to be voted on. Finally, let me say we have a deficit. We have a deficit primarily because we have a recession. The second largest cause of the deficit has been the explosion in spending, most of which occurred in the last 3 months of the Clinton administration. An increase of over $120 billion in spending above the level we set out in the bipartisan balanced budget agreement occurred in a 3-month period, with a Republican Congress. I am not only pointing at Bill Clinton. A Republican Congress and Bill Clinton had a spending orgy, the likes of which I have not seen in almost a quarter of a century in the Senate. The third thing is we have adopted a tax cut of $38 billion. Altogether, we have had over a $300 billion decline in the surplus. Some of our colleagues say the problem is the tax cut. But, that is only about one-tenth the size of the collapse of the surplus. I know there are people on the Democrat side of the aisle who would like to raise taxes and to eliminate that tax cut. We certainly will have an opportunity to vote on that. But the bottom line is, we need a stimulus package. We are in a recession, and every penny we use to stimulate the economy we are going to have to borrow. That is a dollar we are going to be taking away from somebody who might have used it in another way. So if we are going to have a stimulus package, I think it is very important it be a package that stimulates the economy. I find it incredible--some people might find it unbelievable, and in some ways it is both--that if we look at the Daschle proposal that is now before us, if someone paid income taxes last year as an individual, they will get no benefit from this stimulus package. We give big tax cuts to people who do not pay taxes. We have massive increases in spending, but if someone paid taxes last year; if they are working and saving and investing; if they are anybody who is currently making the American economy go and paying taxes in the process, this bill does not deem them worthy of having a stimulus provision that would encourage them to work more or save more or invest more. I do not know how the economy is stimulated without providing incentives for people who are engaged in productive activities. I do not understand that. I know the proposal that was in the bipartisan package and that was in the Bush proposal that would accelerate the tax cut that is coming for individuals who make more than $28,000 a year-- that there was opposition to it. I do not understand, if the objective is to get people to work and save and invest, why no incentives are provided for people who are working and saving and investing. So some will remember that when this bill was presented yesterday, these two intersecting circles--the Republican proposal and the Democrat proposal--were presented, and where the union of those two circles was, was supposedly what Senator Daschle was proposing. Well, it turns out a quarter of it I have never heard of before; and that is, we have a bigger deficit than all the States combined, but now we are going to run a bigger deficit to give them money. I don't understand it. What it really looks like to me, looking at this so-called stimulus package, is spending. You look at the words ``spending'' and ``stimulus,'' and the only similarity is they both start with an ``S.'' Here is my point and I will conclude: We can stand and talk about provisions that were in old bills that nobody has debated in months. I could rant and rave about stimulating the bison industry. That was a provision dealt with and laughed out of the of the Democratic version of the bill. I could taunt my Democratic colleagues with it forever, but what good would it do in this debate? None. Bringing up retroactive provisions in the original House bill that have never been considered by the Senate, that no Republican Senator has endorsed, that are not in the bipartisan consensus bill, I don't think is very productive, either. The path we have chosen, quite frankly, I think is the hard path. If we had brought up the bipartisan bill, we might have adopted it; it might have gone to the President and been signed. Instead, we brought up a bill nobody has ever seen. It will be amended, probably at great length. Then if it is adopted, it will go to conference, where there might be more mischief and the potential of not getting a bill. If there is an easy way and a hard way, we have decided, it seems to me, to do it the hard way. I think it is important to start the amendment process. I urge my colleagues on both sides of the aisle, we have a vehicle before the Senate. Whether Members are for or against it, everybody claims--with the exception of two or three Members of the Senate--that they want a stimulus bill. We have a proposal before the Senate. If we do not like it--and I don't like it --we should offer amendments to it. I believe we will be ready, hopefully this afternoon, to begin that amendment process. It may be, as we start debating amendments, as we start voting on them, that we could yet form a consensus and adopt this bill. That would be very beneficial if that were the case. I hope it will be the case. I yield the floor.

Mr. GRAMM

Mr. GRAMM. What is the amendment, Mr. President?

Mr. GRAMM. Mr. President, further reserving the right to object, it is my understanding there were additional provisions such as extended unemployment, provisions of that nature. Are they in this bill? Let me suggest the absence of a quorum so we could look at that.

Mr. GRAMM

Mr. GRAMM. I believe that the commission can and should alleviate this problem. When the Senate passed its version of fee reduction legislation in March, the bill, S. 143, provided for a delay of 30 days in the effective date for transaction fee reduction in order to provide securities firms and markets the necessary time to adjust their computer systems to accommodate the rate change. This language was changed when the bill was passed by the House in June, in order to comply with budget-scoring requirements. At that time, it was envisioned that congressional action on the bill would be completed well before the start of the new fiscal year in October, and that the effective date provision would not cause administrative problems for the securities industry. It is not our intention to impose an administrative requirement that would be impossible for industry to meet. In order to comply with congressional intent and to make this provision workable, I hope that the commission will consider using its general exemptive authority under Section 36 of the Securities Exchange Act of 1934 to extend the effective date for reduction of transaction fees.

Mr. GRAMM

Mr. GRAMM. Mr. President, I hope we get an opportunity to vote on the stimulus package. I liken our situation to a situation we would face if in the cold of winter a storm came along and blew the roof off of an apartment house. It is clear unless something is not done that people would get pneumonia, frostbite, and suffer from exposure. We have one group of Congressmen and Senators rushing in to say that we have to hire doctors. We have to buy penicillin. We need blankets. We have another group that says: Why don't we rebuild the roof? Then it is suggested that rich people live on the upper floors and they would benefit more by putting the roof back on. Then the President proposes the classic political compromise, which is: Why don't you rebuild some of the roof and buy some of the penicillin? I hope we can go that route. At least we would benefit people. I hope we get a chance to vote on that package today. I yield the floor. I thank the Senator for this and for many other things.

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

Mr. GRAMM. Mr. President, I think we need to take the opportunity to do terrorism insurance. I don't think at this late date, having put together two different compromises, that we could start from scratch on a program which nobody fully understands. We are going to have a chance this afternoon to do it. We have a compromise that has been worked out by Senator Dodd, Senator Daschle, Senator Sarbanes, and members of the Banking and Commerce Committees. I think we need to take it. The Stimulus Package

Mr. GRAMM

Mr. GRAMM. The point is, what is the purpose of a name? The purpose of a name is to convey information. A blue crab, a dungeness crab, a king crab--all are labeled as crab because, while they look very different and are very different sizes, they basically are similar creatures and a very high quality food source. Why would you call them anything but the same thing unless the objective was to try to reduce or remove one of the products from the market? Now, we produce Alaskan king crab. It is a superior product. I don't know whether people that produce it are rich or poor. I know anybody who has enough income to afford Alaskan king crab likes to eat it. I do. But if I were in France and I were in the crab business and I didn't want to compete against Alaskan king crab, what would I do? I would say this is not a crab. I would say that our French crab is a superior product and this Alaskan king crab is an inferior product that is being foisted off on French consumers by French chefs. What about the Florida stone crab that is so expensive and that people like so much? Now, I will say, and I speak with some authority, poor people do not eat stone crabs because it is expensive. It is very expensive. And it is very, very good. If I am in France, I have this crummy little crab they grow in France. It is good, but it does not compare to the Florida stone crab or the Maryland blue crab--I sing its virtues--or the Alaskan king crab. I don't know whether God didn't love them as much as he loves us, but he gave us this great variety of crabs. If I am a French crab grower--a ``water man'' as they call it on the eastern shore of Maryland--I might start a campaign because I don't want to compete against these crabs by going to a French parliamentarian. Do you think that parliamentarian would stand up and say: Although the American crab are better and cheaper, we don't want them in France because we think consumers in France are not paying enough for crab. We want to literally steal the crab right out of their mouths. We want to rip them off. Do you think you would stand up and say that, even in the French parliament? I think not. You know what I think the parliamentarian would say? He would get a picture of a glorious French crab and he would say: Monsieur, this is a crab. And then he would talk about the French water men who go out in the North Sea, with the winds blowing, where it is cold and risky. He would have a picture of a water man who fell and broke his leg during a storm, and with tears in his eyes, he would say: Are we going to take bread out of their mouths? Are we going to let Americans continue to send these inferior crabs into France? And then they would take down the picture of the French crab, with its scientific name, and he would put up a picture of the Alaskan king crab, and he would say: Can anyone say that is a crab? Then he would put up a table showing a family tree of the crab. He would show the crummy little French crab at the top, and the Florida stone crab and the Alaskan king crab, way down here. He might even argue that genetically, the Alaskan king crab is closer to being a lobster than to being a crab. I don't know. I have not looked at the crab family tree. Then he would say: We cannot allow these Americans to call this thing a crab. So he might suggest to the French parliament: Let us call it some scientific name that would scare consumers to death, like a giant sea spider. Now you go into a grocery store in France, and you see these Alaskan king crab--superior to any crab grown in France, and cheaper to boot-- and it is labeled in French ``giant sea spider.'' Why would it be called a giant sea spider instead of a crab? Because the French crab grower does not want people to buy it. That sums up what this debate is about. How can you sell catfish when you can't call it catfish? If the suggestion were to require that the catfish be labeled ``Vietnamese catfish,'' I would vote for it. I don't think that is a good idea nor one that would benefit me. I don't get all these arguments about it being unpatriotic to buy some product from another country at the same time that we want them to buy things from us. I don't understand it. I think that view is a road to poverty. I think that that view is what politicians have done to their people for thousands of years. The new thinking, the new revolution is trade. But what this is about--with the best of intentions--is the fact that we have competition in catfish. It has gotten cheaper. The consumer has benefitted, real income has risen, and nutrition levels are up because catfish now is cheaper. What we are debating now is an effort to take what the Internet reference database used by the scientists call a ``catfish'' and say they don't know what they are talking about because it is not a catfish. Just like the French might say the Alaskan king crab is not a crab. Instead we will force the Vietnamese catfish farmers to market their catfish under a name that nobody knows. Who knows what ``basa'' is? Let us say that I am a low-income person. I am looking at every penny. I am working. I have gotten off welfare. I am going to the grocery store to buy a product: catfish. So I go to the catfish counter, and I see catfish. It looks kind of high in price. Then I see basa over here. It looks like catfish, but I don't know if it is catfish. Is forcing sellers to call a product by a name that has nothing to do with our common knowledge of the product an insurmountable obstacle to trade? I believe that it is. I believe that any trade panel impaneled anywhere in the world would rule that this practice is an unfair trade practice. If scientists say it is a catfish, why don't we say it is a catfish? Why would we say it is not a catfish? If there were no significant imports of Vietnamese catfish, would we be in a debate about whether this is catfish? If this were a gathering of ichthyologists--the name for people who study fish--would we be debating whether this catfish is a catfish? No, we would not be debating it. We are debating it because people want protection. I understand why they want it. I am not saying some people may not be hurt without the protection, without destroying the ability of a competitor to compete. But my point is this: We are the greatest exporting nation in the world. Protectionist efforts are being directed at us all over the world. Similar debates are occurring in every parliament and every congress on Earth. In fact, right now there are efforts in the European Community to change our ability to market U.S. sardines. And the French have tried to label foreign scallops as not being scallops. I can't pronounce the French name for scallops. Why are they doing that? Is not a scallop a scallop? Quite frankly, even though the French scallops are smaller, they are superior to ocean scallops. Why are they doing that in France?

Mr. GRAMM. Why do the French want to say a scallop is not a scallop? Because they wanted to cheat French consumers. They wanted to make French consumers consume their domestically produced scallops rather than being able to buy scallops from around the whole world. Why is concern focused only on the people who produce things and not the people who consume things? How extraordinarily different that world view is. Quite frankly, when I look to the future, it frightens me that at the very time when we are seeing developing countries start to open up trade, developed countries are restricting trade. We are the greatest trading country in the world, with the largest export and the largest import base of any country on the planet. Yet somehow something is said to be wrong. I am reminded of Pericles, who gave the funeral oration each year in Athens to honor those who had died during the Peloponnesian War. Other than the Gettysburg Address, probably the most famous speech ever given was Pericles's funeral oration. It is very interesting that of all the things Pericles could have chosen to show the greatness about Athens, he picked out trade, and specifically, imports. He didn't pick out exports, although he could have said that if you go all over the world you will find products from Athens. But he didn't say that. He said: ``Because of the greatness of our city, the fruits of the whole earth flow in upon us, so that we enjoy the goods of other countries as freely as of our own.'' To Pericles, that fact represented the greatness of Athens. But yet, in America, the greatest, richest, freest country in history, we are debating a proposal that a catfish is not a catfish because catfish are too cheap and we want to restrict competition by forcing people who produce catfish in Vietnam to call it something other than catfish. Quite frankly I think that is a problem. Let me make a couple of other points. What is a red snapper? I thought I knew what a red snapper from the gulf was. I am sure the Presiding Officer, if I asked him to draw a picture of a red snapper, would draw the same picture of a red snapper: a red fish that is kind of flat. But if you asked Senator Stevens or Senator Murkowski to draw a red snapper, they would draw a very different fish because, in fact, the red snapper of the gulf coast is a very different product from the red snapper of Alaska. Should we pass a law that says you can call one a red snapper but not the other? Would that make any sense? I have already talked about crab, and the example of the French parliamentarian. Can you imagine the great passion he could muster in making his argument--an argument that quite frankly, would be a better case than we have here? The difference between the Alaskan king crab and the crummy little French crab is far starker than the difference between these two catfish. All over the world today, this very same debate is going on about what is crab and what is not crab, what are scallops and what are not scallops, or what are sardines and what are not sardines. Does this debate serve any purpose other than to cheat people, to limit trade, and to produce declining living standards? Finally, let me say that this effort won't end with seafood. Is pima cotton the same thing as short-strand cotton? Is the cotton produced in Arizona and West Texas the same cotton that is produced in Georgia and central Texas? Is Egyptian cotton the same as U.S. cotton? Could we not find ourselves in a similar debate over, literally, buying sheets? I have a son who is getting married on the 19th of January. I have become an expert on bedding. When you want to give someone the nicest sheets, you get sheets made of pima cotton or Egyptian cotton, because that is long-strand cotton. And you look for a large number of threads per square inch. If the United States Senate changes by legislation what catfish is for the purpose of trade--even though scientists classify catfish differently--is it hard to imagine that we might actually see a proposal that says Egyptian cotton is not cotton? Is that out of anybody's imagination? It is not out of my imagination. We could literally have a situation where a superior product--long-strand cotton--could not be sold because it was not allowed to be called cotton and consumers were not able to know what it was. I understand cotton. I must be like every other Member of Congress in that I have been given thousands of T-shirts every year. If it is not 100-percent cotton, I give it away. First I give it to my staff. If they don't want it, I send it off to somebody who is collecting clothes. It is not that I would take it if it said ``Free Love'' or something like that on it. But I want 100-percent cotton. What if, for political reasons, we started saying that some kinds of cotton are not cotton? The only reason someone would want to do that would be to impede trade. The purpose of this effort to prevent the use of the name ``catfish''--the name used by fisheries scientists--for imported catfish is to impede trade. Catfish, at the end of the day, is important to our trading partners in Vietnam. We could cheat them. And we could cheat catfish consumers, who probably would never know it. The millions of people who eat catfish have no idea that we are debating this today. I am guessing that some catfish producers are looking over my shoulder and sending letters back to Texarkana or the Golden Triangle-- where people grow catfish--asking whether Phil Gramm cares about catfish producers. Yet nobody is looking over my shoulder asking whether I care about the catfish consumer. This is how bad law is made. Even though nobody other than a few catfish producers is ever going to know how senators vote, I urge my colleagues to vote with Senator McCain because this is an important issue. If we start changing names to impede trade, who is more vulnerable to this kind of cheating than the United States of America? If we can do this to Vietnamese catfish, it can be done to every agricultural product that we produce. In fact, it is being done to our beef exports today in Europe using phony science. The scientific community says growth hormones have no impact. Yet the Europeans, for protectionist reasons, have reached the conclusion they do. It is limiting American cattle growers and it is cheating Europeans out of a superior diet. The problem with cheating in little ways in trade is that it undercuts our credibility when we tell other nations to treat people fairly and to respect free trade. I want to make one final argument. I know people flinch when I say it, but it needs to be said. I personally do not believe that the Vietnamese or the Chinese or anybody else will put us out of the catfish industry. But God did not guarantee that people have a right to be in the catfish business. I did not get to play in the NBA or the NFL. I did not get to act in movies. Nobody guaranteed me those rights. If other people can produce a catfish product that is better and cheaper than our catfish, what is wrong with letting consumers buy that catfish and letting us engage in the production of products that we do better? One final point, and then I will end my statement. Trade creates progress and increases living standards. Take textiles. For years, political representatives of the South tried to protect textiles--a low-wage industry that in the old days provided very poor working conditions and very poor benefits. By the way, Americans pay twice as much for their clothing as they would pay if we had free trade in textiles. Our textile policy literally steals money out of the pockets of working men and women in America, and cheats them every day through protectionism in textiles. Now any job is a godsend to anybody who wants to work. But Senator McCain and I recently were in South Carolina together campaigning at a BMW plant. I was struck by the fact that the old textile plants had gone broke anyway, and the same people who had worked in the textile mills now were working at BMW at three times the wages and with substantially better working conditions. I urge my colleagues: Let's not get into the business of saying that a catfish is not a catfish for a quick benefit today, because in 100 or 1,000 or 10,000 other ways the same game can be practiced on us. And we are far more vulnerable than the poor Vietnamese because they do not produce and sell many things. We produce and sell things all over the world. And when we start this kind of business, it encourages others to do the same against us. Certainly then the impact would become significant enough that people would pay attention. So I thank Senator McCain. His objection to this proposal is in part because the proposal is unfair, and in part because of the way the proposal was enacted. But as trivial as this issue may seem now, at 4:35 on the 18th of December, when we should long ago have gone to our homes and made merry with our families--as trivial as it sounds at the moment, saying that a catfish is not a catfish for political reasons is dangerous business. It may benefit a few producers--although not the consumers, who nobody cares about--in a couple of States today, but it could hurt every State in the Union and every consumer in the world tomorrow. That is why Senator McCain is right on this issue. I yield the floor.

Mr. GRAMM. Mr. President, surely God must be smiling that we are here on December 18th talking about catfish. I would like to try to address all these issues that have been raised as quickly as I can and get to the bottom line of what this issue is about. Let me first say I take a back seat to no man or woman on the issue of catfish. I have eaten as many or more catfish than anyone in the Senate. In fact, as a boy growing up on the Chattahoochee River, I can remember buying catfish from people along River Road who had up a sign: ``Our catfish slept in the Chattahoochee river last night.'' I think it is an incredible commentary on how poorly we understand trade that we have heard an endless debate today about what the income level of catfish producers is while nobody has mentioned catfish consumers. Is there anybody here who would be willing to wager whether the average catfish consumer in America is substantially poorer than the average catfish producer? Nobody would make that wager. Nobody thinks there is any question about it. The amazing thing about the debate on trade is that nobody cares about the consumer. The consumer is absolutely irrelevant in the trade debate. The trade debate is basically about single-entry bookkeeping. Nobody looks at all the agricultural products that the Vietnamese buy from America. Nobody looks at all the jobs that creates. Nobody looks at the fact that every American dollar that goes to Vietnam, or any other country, for that matter, comes back to America in purchases. We are focused on single-entry bookkeeping, and in this sort of naive world of the Senate trade debate, the end of all activities is exports. Imports seem to be terrible things. If that is true, I wonder why my colleagues go to the grocery store. They talk about free trade. But when is the last time Kroger or Safeway bought anything from you? They have never bought anything from me. I have never sold anything to a grocery store. I am engaged in absolutely one-way unfair trade with the grocery store. The groceries sell things to me but they do not buy things from me. If I listen to the logic of this debate, we should be putting up barriers to people getting in the grocery store because of unfair trade. Maybe I have been following these debates for too long, but I thought the end of all economic activity was consumption. Does no one care about what impact this provision will have on consumers? Does anybody doubt that limiting competition in the sale of catfish will hurt poor people? It will, and it will hurt them everywhere--not just in Arkansas, not just in Texas, but everywhere. I also do not understand the point about people in Arizona being richer than people in Arkansas. On that logic, why don't we simply have amendments to redistribute wealth? I do not think any of that is relevant. My point is that no one can dispute that the average consumer of catfish is poorer than the average producer of catfish. So if we are here choosing up sides based on income, we would all be against the provision that limits competition in catfish. But obviously, that is not what we are about. Let me try to address some of the issues that have been raised. First of all, many comments have been made today that I do not think comport with existing regulations and laws. I have here a September 27 directive by Phillip Spiller, who is director of the Seafood Center for Food Safety and Applied Nutrition, about labeling of Vietnamese catfish. I will ask that it be printed in the Record when I get through speaking. He lists about 30 commercial catfish labels, none of which is just plain catfish. You can label it basa catfish. You can label it bocourti catfish. You can label it short barbel catfish. You can label it sutchi catfish. You can label it striped catfish. But you certainly cannot label it plain catfish. So the idea that we have no way to indicate whether or not catfish is U.S. catfish just does not comport with the regulations in place today. In looking into this issue, and trying to find a neutral source, we pulled up www.fishbase.org, which is a taxonomic database on the Internet that serves as a reference for fisheries scientists. Rather than going to an old dusty library and pulling out a reference book and blowing the dust off it, you now can call up this information from a database on the Internet. And up pops various kinds of catfish. It is interesting to me that our colleagues are so adamant that the catfish grown in Vietnam is not catfish. That will come as a surprise to the scientists who compiled the taxonomic database at fishbase, because sure enough, right there on the database--and I challenge my colleagues to look it up--is this basa catfish. So apparently the scientists are confused. They may call this a basa catfish, and they may have a picture that goes with it that sure looks like a catfish to me. But we, of course, have in-depth knowledge of the catfish and the catfish family and its scientific names. I went to great trouble to actually get a photograph of this nefarious catfish. Just the growth of this catfish puts people out of work, and spreads hunger and disaster across the globe. Here is a picture of a very young one. If you put that before any child in America over the age of 3 and asked, what is that fish, what would they say? Mama, it's a catfish. I have a blowup of this picture. See those whiskers? Do you think that is a crab or a bass or a salmon? It is a catfish. Not only does it look like a catfish, but it acts like a catfish. And the people who make a living in fisheries science call it a catfish. Why do we want to call it anything other than a catfish? We want to call it something other than a catfish because of protectionism. I have never run into a man or woman serving in public office who said: I am a protectionist. Nobody says that. They are always for free trade, but they are never for free trade in anything that in any way affects anybody they represent. It never ceases to amaze me. I do not know what free trade they favor other than something their state does not produce. But that is not the way trade works. Let me address the many other issues raised. One argument we hear is that this Vietnamese catfish is an inferior import. If it is inferior, why do restaurants buy it in such overwhelming volume? Do they not want people to come back to their restaurant? Are they not interested in customer loyalty? And if it is inferior, why has no one presented us with taste test results? I do not know that such a test has ever been done. Do you know why I do not think it has been done? Because people would not be able to tell the difference. There obviously is a difference between a mud cat and a channel cat. I prefer the channel cat. If you tried to serve mud cat in a restaurant, you would not have many repeat customers. Restaurants are serving basa catfish because it is good catfish, people like it, and it is cheaper. You might say that there is something wrong with it being cheaper. What is trade about except seeing products become cheaper? Why would we trade with anybody for any item unless we could buy it cheaper from them than we could produce it for ourselves? That is what trade is about. That is where we gain from trade. But all that gets lost in this debate. What about a nutrition study? Does Vietnamese catfish have the same nutritional value as U.S. catfish? Is it nutritionally inferior? When consumed by the human species are its digestive qualities different? I suspect not, because certainly the proponents of preventing this catfish from being called a catfish would have done these studies if they thought there were any possibility of generating data in their favor. On the argument regarding a surge in imports, it all depends on where you start. It is true that between 1997 and 2000, there was a big surge in catfish imports, from .9 million pounds to 8.2 million pounds. But if you go back to 1986, the level of imports then was 8.2 million pounds. So the level of imports has not changed, at least as measured in million-pound increments, since 1986. It may have declined in 1997, but in terms of imports, we are not appreciably different today than we were in 1986. This data is data from the State Department. It is unclassified and available for everyone to look at, and I ask my colleagues to look at it. In terms of dirty conditions, where is the evidence? The State Department was asked to go out and look at how the Vietnamese catfish were grown, and they have come back and tell us that the conditions are highly sanitary. It is interesting that at this very moment, the Chinese are beginning to produce channel cat from American strains. There is no evidence to suggest that the Vietnamese could not ultimately produce channel cat. What would the argument be then? It seems to me all of the arguments we are hearing today come down to an argument against trade. The question turns on what is in a name. Imagine for a moment that Alaskan king crab were required to be labeled as ``giant sea spiders.'' Just imagine that I am in France and I don't want these Alaskan king crab brought into France because they are good, relatively inexpensive, and superior to the crab we have in France. The Alaskan king crab is a different subspecies. As everyone who has ever seen a blue crab and an Alaskan king crab knows, one is a No. 1 jimmy, the very top one you can get, at about 6 inches across. Then there are various gradations in the Maryland blue crab.

Mr. GRAMM. My point.

Mr. GRAMM

Mr. GRAMM. Madam President, I suggest the absence of a quorum.

Mr. GRAMM

Mr. GRAMM. I am not sure. I would like to be recognized. I don't think I am going to speak very long. If you want to set a time limit on it, I would say 10 minutes.

Mr. GRAMM. Where does the price come from? Do you have any idea where the price came from?

Mr. GRAMM. I know the Senator is a very senior member of the Armed Services Committee. Is there any evidence anywhere that the Air Force said it wanted these planes?

Mr. GRAMM. Mr. President, will the Senator yield for a question?

Mr. GRAMM. Let me ask a question. Maybe there is a shortage of tanker capacity now with the war in Afghanistan. Can we get these planes immediately? Do you know how long it is before the first one would be delivered?

Mr. GRAMM. I want to be sure I have it straight about this Boeing aircraft thing. Am I to understand that there is a provision in the bill that would have us lease 100 Boeing aircraft, paying $11 billion per year for the lease, and the Air Force did not ask for these aircraft? Is that right?

Mr. GRAMM. Let me pose another question, if I may. The Air Force doesn't want these planes. We are going to spend $10 billion plus another $1 billion to build hangars, and then we are going to give the planes back. Does the $10 billion sound to you like an inflated price to lease these airplanes for 10 years?

Mr. GRAMM. And we have them for only 10 years.