Rod Grams

Mr. GRAMS

Mr. GRAMS. Mr. PRESIDENT, I ask unanimous consent that the Committee on Health, Education, Labor, and Pensions be authorized to meet for a hearing on ``Reducing Medical Error: A look at the IoM report'' during the session of the Senate on Wednesday, January 26, 2000, at 9:30 a.m. THE PRESIDING OFFICER. Without objection, it is so ordered.

Mr. GRAMS. Mr. President, I ask unanimous consent that the Committee on Banking, Housing, and Urban Affairs be authorized to meet during the session of the Senate on Wednesday, January 26, 2000, to conduct a hearing on the renomination of Alan Greenspan to Chairman of the Board of Governors of the Federal Reserve System. THE PRESIDING OFFICER. Without objection, it is so ordered.

Mr. GRAMS

Mr. GRAMS. I ask unanimous consent to speak as in morning business.

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 President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. GRAMS

Mr. GRAMS. Mr. President, for over six decades people have come to rely, expect, and depend on investments made into the Social Security system. However, the very financial structure created with the program in 1935 is about to face some very significant strains placed on it by changes in demographics and also by poor fiscal management by Washington. Basically, we are at a crossroads. Do we let the system wither on the vine or do we work to save Social Security? At the crux of this discussion is how best to serve our Nation's retirees. How can we offer them the most financial security in their retirement? I have some ideas I have shared with Minnesotans and also with the Senate. They are aimed at saving the Social Security system. It is a package of proposals, the Grams Plan for Retirement Security, that encompasses what we expect to do to protect and preserve the existing system, as well as what other steps we might take to offer retirees more security in their elder years. There are several main elements in my package. On Monday, I introduced the Social Security and Medicare Surplus Protection Act which would trigger an automatic across-the-board cut if the Government would happen to spend any of the surpluses, either Social Security or Medicare. In effect, this creates a retroactive lockbox to protect Social Security and Medicare surpluses. Even those in Washington who are fiscally conscious of the commitments made to our Nation's retirees were surprised that last year was the first in over 60 to not dip into the Social Security trust fund to pay for other Washington programs. This all-too-common practice necessitates a retroactive lockbox. My legislation contains the lockbox enforcement mechanism that triggers an automatic reduction in Government discretionary spending, including congressional Members' pay, if any of the Social Security or Medicare surplus is spent on other Government programs, thereby restoring the Social Security and Medicare trust funds. This would lock up the trust funds in case budget forecasts were inaccurate--and surpluses were spent. The Grams lockbox saves Social Security and Medicare from Washington's big spenders and reaffirms our commitment to our Nation's retirees. I have also introduced the Personal Security and Wealth in Retirement Act. It creates personal retirement accounts and offers every American the opportunity to achieve personal wealth, and also the dignity, freedom, and security that it affords in their retirement years. It also protects seniors by guaranteeing that their benefits won't be cut. The retirement age and taxes will not be raised if they decide to stay within the Social Security system as we know it today. At the heart of the Personal Security Wealth in Retirement Act is the personal retirement account, or a PRA. A PRA allows the option to invest dollars into the market that taxpayers are now forced to surrender to the Federal Government in their withholding for the FICA taxes. Workers would now have the freedom to design their own retirement plans, investing in stocks, in equities, bonds or T-bills, or any combination of these, or any other financial instruments with approved investment firms and approved financial institutions. Taxpayers can invest funds into traditional savings accounts if that is what they want. The result would be maximum freedom to control their resources for their own retirement security. There is no doubt that a market-based retirement system and the power of compounded interest would generate much better returns than under the traditional Social Security system we have to date. Under today's Social Security program, the average annual retirement benefit for a family with two working spouses is about $33,000 a year. Under the Personal Security and Wealth in Retirement Act, families could receive an annual benefit of more than $200,000 a year by investing the same dollars in a PRA rather than in the current system. Low-income families also would do better under this plan. Where Social Security now provides an annual benefit of about $18,000 a year, my proposal would produce benefits as high as $100,000 a year. Despite the obvious benefits of a PRA, if one chooses to stay within the traditional Social Security system, that is their right, and the Government would guarantee the promised benefits that would not be cut and that Washington could not increase the retirement age and Washington could not increase taxes. Special protections have been built in to keep the PRA safe. Government-approved private investment companies would manage those PRAs to ensure, to guarantee a return higher than what Social Security pays today. Social Security, by the way, today pays them less than a 2- percent return, and in the near future it will be less than 1 percent. That is not the kind of investment most people would make if they could walk up to a window. I don't think they would invest in an account that pays less than 1 percent. That is what happens. Many taxpayers in the future will have a negative rate of return, meaning it is better to put money under your mattress or bury it in a tin can in the backyard than invest in Social Security. Rules similar to those applying to individual retirement accounts would apply to the new personal retirement accounts. If a worker happened to fall short of accumulating the minimum retirement benefits, this is where the Federal Government would step in to make up that difference--in other words, to fill the glass full; to assure a minimum retirement benefit so no one will retire into poverty, so you will not lose if you choose a PRA. The Personal Security and Wealth in Retirement Act also offers features not found in Social Security because you can choose when you want to retire. Right now the Government tells you how much you pay into Social Security, when you can retire, and what your benefits are going to be. But under our Personal Retirement Account plans, you make those decisions, you choose when you want to retire. As long as you have accumulated the minimum benefits necessary for your lifetime, you are free to retire whenever you want. PRAs could be established early on in life, even before a child is out of diapers. The idea is, when a child was born and given a Social Security number, his or her parents or grandparents will be able to begin putting money into that child's retirement account. As an example, if you put $1,000 into an account for a newborn baby, that account would grow to nearly $250,000 by the time that child would be ready to retire. From $1,000 seed money to $250,000 by the time that child would retire--not a bad start. The Personal Security and Wealth in Retirement Act ensures that your PRA remains your private property and that you have a right to pass it on. When you die, the remaining funds that are in your account will be transferred, under your estate, to your heirs free of taxes. Right now, as you know, when you die there is no residual Social Security. That is it. So all the money you have paid in you do not get back. The Personal Security and Wealth in Retirement Act confidently answers the question of whether prosperity in retirement can best be achieved by the Government or by you, the individual. Given the tools and the freedom to put them to work, every American will discover that a successful and secure future is just a PRA away. These proposals are at the heart of the Grams Plan for Retirement Security. In addition to these bills, there are several others in the Grams Plan for Retirement Security. I have introduced the Social Security Benefit Guarantee Act which would create a legal right to Social Security benefits, including an accurate cost-of-living increase. I have also introduced the Fair COLA for Seniors Act, legislation to ensure that older Americans receive accurate cost-of- living adjustments based on their consumption patterns so they can better achieve retirement security, and the Social Security Information Act, to ensure that hard-working Americans receive adequate information on which they can begin to plan for their retirement, such as the rate of return on their Social Security investment. As I have mentioned, I think if people today would get information on what the return was going to be on their investment, it would play a big part in their decision to have that or turn to a private retirement account. I have introduced the Medicare Ensuring Prescription Drugs Act--that is legislation to ensure seniors do not have to choose between their medicines and their food--and the Tax Relief for Seniors Act, legislation to repeal taxes on our seniors' Social Security incomes. That is unfair, again--that tax on our seniors. These are all components of the Grams Plan for Retirement Security, legislation aimed at helping hard-working Americans receive retirement security. As I close, and as we enter this new session of the 106th Congress, we need to have an honest discussion, not about how best to extend the life of a Government program or how to alter numbers so we might technically fit within spending limits at the expense of our Nation's retirees; instead, we should debate and discuss how to offer hard-working Americans the retirement security they deserve. Mr. President, I suggest the absence of a quorum.

Mr. GRAMS

Mr. GRAMS. Mr. President, I ask unanimous consent that the cloture vote with respect to S. 625 be vitiated and, further, that order No. 109 be modified by the following: I ask unanimous consent that when the Senate resumes consideration of S. 625, the following be the only amendments in order and they be considered under the limitations as stated, with any debate times equally divided in the usual form, and the ability to withdraw any of the amendments be in order for the author of the amendment without further consent: Wellstone amendment No. 2537, lifeline accounts; Wellstone amendment No. 2538, debt collection; Craig amendment No. 2651, pawnshops, 15 minutes; Levin amendment No. 2658, gun manufacturers, 120 minutes; Feingold amendment No. 2747, arbitration, 60 minutes; Feingold amendment No. 2748, evictions, be modified to reflect the text of 2779, and there be 30 minutes for debate on amendment number 2748; Feingold amendment No. 2667, East Timor, as modified to reflect the sense of the Senate, 60 minutes; Reed-Sessions correction of amendment No. 2650, 10 minutes; Schumer amendment No. 2762, safe harbor, 15 minutes; Schumer amendment No. 2763, clinic violence, 40 minutes; an amendment by the majority leader or his designee regarding debts incurred by violence, 40 minutes; Harkin amendment No. 2770, household liens, 20 minutes; Sarbanes amendment No. 2517, as modified, consumer credit disclosure; and one amendment to be agreed to by both managers. I also ask consent that any other pending amendment not mentioned above be withdrawn, and further that no motions to commit or recommit be in order.

Mr. GRAMS. Finally, I ask consent that following the disposition of the above amendments, the bill be read a third time, the Senate then proceed to the House companion measure, H.R. 833, all after the enacting clause be stricken, and the text of S. 625 be inserted in lieu thereof, the bill be read a third time, and the Senate proceed to a vote on passage of H.R. 833, as amended. I further ask consent that following the vote the Senate insist on its amendment, request a conference with the House, and the bill, S. 625, be placed back on the calendar.

Mr. GRAMS

Mr. GRAMS. Mr. President, as in executive session, I ask unanimous consent that the following nominations be returned to the President. I now send that list of nominations to the desk.

Mr. GRAMS

Mr. GRAMS. Mr. President, there is a joint resolution at the desk which was received earlier from the House of Representatives. I ask for its first reading.

Mr. GRAMS. I now ask for its second reading and object to my own request.

Mr. GRAMS

Mr. GRAMS. Mr. President, tonight at the very beginning of the second session of the 106th Congress, I rise to talk about legislation that I introduced earlier today--on a vitally important issue: protection of the Social Security and Medicare surplus. My legislation reassures the American people that Congress and the Administration will not spend a penny of their Social Security and Medicare money and it creates a mechanism to enforce our commitment to protecting these surpluses. This ``look-back'' enforcement mechanism is simple and straightforward. It basically says if Congress and the Administration indeed spend any of the Social Security and Medicare surplus in the previous fiscal year, an automatic reduction in Government discretionary spending, including congressional Members' pay, will be triggered. The money will be returned to the Social Security and Medicare trust funds. It would work similarly to the sequester of Gramm-Rudman-Hollings, but applies to spending of Social Security and Medicare surplus funds. I stress the sequester could not cut any Medicare or other entitlement programs. Unlike similar legislation I introduced last year, this bill adds the Medicare surplus into the protection. The Medicare part A surplus will be about $20 billion this year. This surplus should also be preserved for senior's medical expenses only, not for any general Government spending. My legislation would in effect prevent anyone, whether it is the Congress or the administration, from raiding the Social Security and Medicare surplus. I believe this is a crucial step to truly protect the Social Security and Medicare surplus and save it exclusively for Americans' retirement and medical needs, not for tax relief, and not for government spending. Let me explain why we need this legislation. First and foremost, the American people do not understand why budget rules do not protect the Social Security and Medicare surplus. I have traveled intensively throughout Minnesota during this congressional recess. Everywhere I went, Minnesotans told me that the Federal Government's practice of so-called ``borrowing'' from the Social Security and Medicare trust funds must be stopped, and Americans' retirement funds must be secured. They are very worried that the retirement funds will not be there for them, and they are concerned that the Government will not be able to return the over $750 billion already ``borrowed'' and spent by the Government. They want me to take every measure possible to protect their retirement security and their future health care needs. Last December, the Congressional Budget Office's end of the session summary estimated that Congress spent $17 billion of the Social Security surplus and exceeded the spending caps by $7 billion in budget authority and $17 billion in outlays. In addition, Congress spent every penny of the $14 billion non-Social Security surplus which we promised to return to working Americans as tax relief. The Congressional Budget Office also reported that increased revenue would present a more favorable picture. On Wednesday, the CBO is expected to issue its new estimates and it appears likely that Americans' tax overpayments will enable us to avoid spending any of the Social Security surplus. However, my concerns are, first, the CBO December estimate gives the general public the impression that we failed to keep our promise to protect the Social Security surplus and that we are now covering it up with budgetary smoke and mirrors. Second, as a result, we have to use additional tax overpayments to fund the increased government spending, even if the new CBO estimate shows we did not spend the Social Security surplus. Already, lawmakers are talking about how to spend the rest of the non-Social Security surplus in an Supplemental emergency early this year. Because of this propensity to spend, I believe the look-back proposal is essential to protect us now and in the future from the temptation to spend ``just a little'' the Social Security and Medicare surpluses. Further, I have argued repeatedly before the Senate that economic forecasting is more of an art than a science. Many uncertainties, risks, and factors are involved. We have a budget of over $1.8 trillion based on a variety of assumptions, estimates, forecasts and projections, with people using both Congressional Budget Office numbers and Office of Management and Budget. It is highly likely that there are errors in this budget. If the error occurs in Social Security spending, we must have a mechanism to correct it. Another compelling reason for this legislation is that we are facing even more severe budget constraints and spending pressures this year because according to the CBO, the discretionary budget authority for fiscal year 2001 is about $542 billion, which is $18 billion less than the amount appropriated for 2000. What's worse, $23 billion out of the $542 billion cap has already been appropriated as advance funding in the 2000 appropriations bills. President Clinton has already talked about breaking the caps which he agreed to, by the way, in 1997. Although we may have more on-budget surplus this year, which is supposed to be returned to the taxpayers in the form of tax relief and debt reduction, there is no guarantee Congress and the administration will not touch the Social Security and Medicare surplus. Since we all have agreed that saving Social Security should be our top priority and have committed to not spending the Social Security surplus for Government programs, we must do everything we can to prevent the Government from spending the Social Security and Medicare surpluses. We need to find a better way to keep our promise to the American people. Senators on my side of the aisle have made a number of attempts to create a lockbox to lock in every penny of the Social Security surplus exclusively for Americans' retirement. Unfortunately, opposition by the other side has blocked the establishment of this safe lockbox. Some opposed because Medicare was not included. My proposal does protect Medicare. The ``look-back'' mechanism in my legislation is our best option. It will force the Government to live up to our pledge that not a penny of the Social Security and Medicare surpluses will be spent to fund either last year's or this year's appropriations. If our spending plans do pass and we would again, unintentionally wind up spending Social Security, we must be able to keep our commitment to the American people, by scaling back other spending to save Social Security. Without this mechanism Congress and the President may spend some of the Social Security surplus by using inaccurate estimates. The remedy in my bill is a simple one and it should be passed early before we face a problem, so we cannot play the blame game if a re- estimate shows spending of Social Security or Medicare surpluses. In an era of budget surplus, extra prudence and effort is needed to keep ourselves from spending more than we can afford. On principle, we must do everything we can to ensure Washington will not touch any Social Security money. Protecting the Social Security and Medicare surpluses from funding government operations is the last defense of fiscal discipline. I cannot emphasize how vitally important this line of defense is for both political parties because if we lose this defense, our credibility and accountability with the American people will be gone. I strongly believe we should continue to stress our promise to the American people. We must make protection of the Social Security and Medicare surpluses our top priority and ensure that not a penny of Americans' retirement needs is used for Government spending. Again, I believe this can be easily achieved by passing my ``look- back'' legislation which will allow us to enforce that commitment. I thank the Chair and I yield the floor.

Mr. GRAMS

Mr. GRAMS. If there is no further business to come before the Senate, I now ask unanimous consent that the Senate stand in adjournment under the previous order, following the remarks of Senator Feingold.

Mr. GRAMS. I yield the floor. The Senator from Wisconsin is recognized.

Mr. GRAMS

Mr. GRAMS. I thank the Senator from Nevada for all his efforts.

Mr. GRAMS. Mr. President, I ask unanimous consent that the agreement with respect to the bankruptcy bill be vitiated at the request of the majority leader or minority leader up to the hour of 12 noon on Tuesday.

Mr. GRAMS

Mr. GRAMS. For the information of all Senators, tomorrow the Senate will be in a period of morning business until 12:30 p.m., and will then recess until 2:15 p.m. to accommodate the weekly party conferences. When the Senate reconvenes, the Senate will resume consideration of S. 625, the bankruptcy reform legislation, under the previous consent agreement. Time agreements have been made on the remaining bankruptcy amendments. Therefore, the Senate is expected to complete action on the bill during Wednesday's session of the Senate. As a reminder, the 12 noon cloture vote for tomorrow has been vitiated, and the debate on the remaining amendments will begin tomorrow, with votes expected to occur on Wednesday at a time to be determined.

Mr. GRAMS

Mr. GRAMS. I also ask consent that the Senate stand in recess from the hours of 12:30 p.m. to 2:15 p.m. for the weekly policy conferences to meet, and that upon reconvening the Senate resume consideration of S. 625, the bankruptcy reform bill.

Mr. GRAMS. Mr. President, I ask unanimous consent that when the Senate completes its business today, it adjourn until the hour of 11:30 a.m. on Tuesday, January 25. I further ask consent that on Tuesday, immediately following the prayer, the Journal of proceedings be approved to date, the morning hour be deemed expired, the time for the two leaders be reserved for their use later in the day, and the Senate then begin a period of morning business with Senators speaking for up to 5 minutes each, with the following exceptions: Senator Bond or designee from 11:30 a.m. until 12 noon, and Senator Durbin or designee from 12 noon to 12:30 p.m.

Mr. GRAMS

Mr. GRAMS. I thank the Senator.

Mr. GRAMS

Mr. GRAMS. Mr. President, I ask unanimous consent that the Senate withdraw its request of November 19, 1999, for a conference on S. 376, and agree to the conference, with the same conferees previously appointed by the Senate, requested by the House of Representatives on November 10, 1999, which message was transmitted to the Senate on January 24, 2000.

Mr. GRAMS

Mr. GRAMS. Mr. President, I come to the floor today stunned by the addition of harmful dairy provisions in the final appropriations bill. This omnibus bill contains another extension of the Northeast Dairy Compact for 24 months--which I consider the most brazen attempt in my memory as a member of Congress to steal and move an industry from one region of the country to another. This economic power grab is alternatively characterized as a matter of states' rights, a way to guarantee a fresh supply of milk to local consumers, a means to ensure lower-priced milk to consumers, and a means to help the small family farmer survive. All of these arguments are false--a thinly veiled disguise to cover the truth, which is that this is an unvarnished economic power grab of major proportions. But first, I would like to explain what dairy compacts are, and explain why they are so destructive to the heart of dairy production in America and the Upper Midwest. The Northeast Dairy Compact raises the price of Class I fluid milk above the prevailing federal milk marketing order price within the participating states, and, I might add, above what the market would pay. Milk processors have to pay the higher price for the raw milk they process, and this higher price is passed along to the consumer at the grocery store. With higher prices, consumption goes down, and children are the biggest losers. I don't argue against a fair price or honest price--for any dairy farmer in Minnesota or Vermont or any other state. But I cannot support price- fixing schemes that legislatively transfer market share. The Northeast Compact was authorized in 1996 during consideration of the larger Federal Agriculture Improvement and Reform (FAIR) Act. This controversial issue was inserted in the conference committee, avoiding a separate vote, after the measure had been overwhelmingly defeated on the floor. While most of the FAIR Act was designed to help farmers compete in world markets and reduce government involvement in agriculture, the Northeast Interstate Dairy Compact established a regional price-fixing cartel within our very own country. The Northeast Dairy Compact has harmed dairy farmers in Minnesota, and this kind of unfair subsidy should be terminated. We should not be passing laws that will have such a harmful impact on any American. This compact does. When this issue came to the fore, compacts were roundly condemned in the major newspapers of the compact region. The New York Times, Boston Herald, the Connecticut Post, and the Hartford Courant all weighed in against the cartel, in addition to publications such as USA Today and the Washington Post. Again, compacts were hardly consensus legislation to begin with. The House refused to put the provision in its broader farm bill. And I must reiterate, the Senate voted on the floor to strip the Compact language from its bill. Despite these defeats, the compact provision was slipped into the bill in conference and signed by the President. The Compact legislation could not withstand the scrutiny of a fair debate on the floor, and had to be muscled in at the last minute in conference, just as we've seen with this attempted extension today. Knowing that this scheme was a bad idea from the start, Congress limited the life of the compact, and that is why compact proponents asked for an extension and could only achieve an extension sneaked into an omnibus bill as we are about to head out of town for the session. Retail prices of milk jumped immediately after the higher Compact price was implemented. As predicted, the milk produced in New England increased by four times the national rate of increase in a six-month period following Compact implementation. The surplus milk was converted into milk powder, leading to a 60% increase in milk powder production. That surplus directly harms dairy farmers in Minnesota and Wisconsin, driving down prices and demand in the Midwest. Soon after implementation, the Northeast Compact had to begin reimbursing school food service programs for the increases in cost caused by the milk price hikes; an admission that prices have gone up and consumers are being affected. However, low-income families that need milk in their diet are not being reimbursed by the Compact for their increased costs. Milk is a food staple, and one of the healthiest foods we have. Are we going to permit the extension of this milk tax that hits low- income citizens hardest? Are we going to continue a food tax on the group of citizens who spend the highest percentage of their income on food? What's next, a special tax on bread, eggs, ground beef, or potatoes? But that won't happen--Why? Because it would be unfair, just as this compact cartel is unfair. Consider the low-income families with small children and the elderly on fixed incomes in your state and ask if this is the population you want bearing the brunt of this regressive milk tax. Despite all of the discrediting information about dairy compacts, members continue to contemplate extending for the second time this bad policy that was initially only to be ``temporary'' assistance to Northeast producers. Everyone who truly understands this issue admits that compacts are harmful for consumers and for American agriculture, but somehow we can't muster the political will to say no to the entrenched interests that support the compact. Thus, we keep hitting the snooze button--preferring to ``temporarily'' extend bad policy rather than addressing it on a policy basis. What is even more egregious is other regions of the country are promoting compacts for themselves to tap into these goodies at the expense of other regions of the country such as the Upper Midwest. And again would force consumers to pay unfair high prices for milk. This is really Economics 101. If you artificially raise the price received for a commodity, you can count on more being produced. Where does the excess go? It goes into areas where there isn't a floor price, and that excess production depresses the price that producers in my state receive. It's really not that hard to understand, despite the sentimental arguments that compact supporters use to cloud the real issues at play in this debate. Again, we are trying to knock down or reduce trade barriers around the world to open markets and give our farmers a level playing field to compete, but would erect these same barriers to trade inside our own borders that will not allow dairy farmers in the Midwest to fairly compete. As I said earlier, I must address some of these urban myths about the benefits of compacts, myths that are so often repeated around here by colleagues that they have become difficult to distinguish from the truth. One of these claims is that compacts are somehow a matter of ``states' rights,'' and that compacts make an important contribution toward devolving power back to the states. The fact is that regulation of interstate commerce is a power specifically delegated to Congress in Article I, Section 8 of the Constitution, which states that Congress shall have power ``to regulate commerce with foreign nations, and among the several states, and with the Indian tribes.'' Regulation of interstate commerce was one of the chief reasons our country's founders abandoned the Articles of Confederation and moved to adopt the Constitution. I consider it one of the great ironies of this debate when I hear colleagues claim that the dairy compact issue boils down to ``states' rights.'' Professor Burt Neuborne, a constitutional law professor at the New York University School of Law, in testimony before a subcommittee of the House Judiciary Committee, noted that the chief motive for the Founding Fathers' decision to abandon the Articles of Confederation in favor of the Constitution was to foster a free market of trade within the United States. Under the weaker Articles of Confederation that entrusted commerce powers in the states, states enacted price controls to protect high-cost producers from competition from other regions of the country. The Constitution corrected this problem by empowering Congress to regulate interstate commerce. According to Professor Neuborne, At the close of the Revolution, the thirteen original states experimented with a loose confederation that delegated power over foreign affairs to a national government, but retained power over virtually everything else at the state and local level. The lack of a national power to regulate interstate Commerce led to the eruption of a series of trade wars, pitting states and regions against one another in a mutually destructive spiral . . . United States Supreme Court Justice Robert H. Jackson, reviewing the history of the Commerce Clause in a 1949 opinion, stated that: The sole purpose for which Virginia initiated the movement which ultimately produced the Constitution was 'to take into consideration the trade of the United States; to examine the relative situations of trade of said States; to consider how far a uniform system in their commercial regulations may be necessary to their common interest and their permanent harmony' and for that purpose the General Assembly of Virginia in January of 1786 named commissioners and proposed their meeting with those from other states. The desire of the Forefathers to federalize regulation of foreign and interstate commerce stands in sharp contrast to their jealous preservation of the state's power over its internal affairs. No other federal power was so universally assumed to be necessary, no other state power was so readily relinquished. [As Madison] indicated, ``want of a general power over Commerce led to an exercise of this power separately, by the states, (which) not only proved abortive, but engendered rival, conflicting, and angry regulations.'' Continuing to quote again from Professor Neuborne, James Madison noted that the single most important achievement of the Constitutional Convention was to rescue the nation from a continuation of the parochial trade wars that had marred the first ten years of its existence and threatened its future permanent harmony. . .. Congress should reflect on the fact that Madison's understanding of the relationship between economic protectionism and the erosion of political unity was brilliantly prescient. One of the Founders' enduring insights was that regional economic protectionism is ultimately corrosive of national political unity. To prevent economic regionalism, the Founders imposed a constitutional prohibition on state and regional efforts to discriminate against goods and services produced elsewhere in the nation. To tamper with that constitutional prohibition is to tamper with the mainspring of the nation's political and economic fabric. Professor Neuborne's research on the topic of interstate compacts, which originate under Congress' grant of power in Article I, Section 10, revealed that prior to the Northeast Regional Dairy Compact, Congress had never granted the compact power to enable states to engage in economic protectionism. Two hundred ninety-nine times before, the compact power had been used for a constitutionally legitimate purpose. Only now, with the advent of the dairy compact, has Congress ever contorted the meaning of Article I, Section 10 as an opportunity to set up a protectionist, multi-state cartel, in direct conflict with the Commerce Clause of the Constitution. The Supreme Court has repeatedly ruled that by granting to Congress the power to regulate interstate commerce via Article I, Section 8, the Constitution carries with it a negative implication precluding the states from engaging in protectionist schemes that favor local economic interests at the expense of national competitors. Mr. President, are we not in fact returning to the very types of behavior that the Constitution was in large part designed to remedy? Are we really willing to pit region against region, and create protectionist regimes, under the guise of dairy compacts, even within our own country? The next pro-compact argument I would like to address is the claim that the compact is necessary to guarantee an ``adequate supply of fresh, locally produced milk'' to consumers. As I have said before, I believe the constant refrain that compact supporters are merely trying to guarantee an ``adequate supply of fresh, locally produced milk'' is a calculated deception designed to mislead consumers into believing that without this legislation, there may not be a consistent supply of milk in the grocer's dairy case. This is simply false our nation produces three times more milk than it consumes as a beverage. And I should note that Minnesota farmers have not come to the federal government asking for pricing advantages so they can grow oranges or lemons and guarantee Minnesota consumers a quote ``adequate supply of fresh, locally produced citrus.'' Minnesota farmers want to produce what they produce best, which are dairy products, and they can deliver them to the consumer much cheaper, too. In fact, some compact supporters have the audacity to claim that without a compact, the region would pay more for milk as high shipping costs for imported milk was factored into the price. This is also false. If local producers can sell a product for less than their competitors, then they would have no need of a compact. They could keep their markets by beating the price of the competition. But the truth is, high quality milk can be trucked into New England at the peak of freshness and at less cost than it can be produced in most New England states. Compact supporters also claim that the compacts are necessary to save the small, family dairy farm. Interestingly enough, according to USDA figures, the average dairy herd size is 85 head in Vermont, while in Minnesota it's 57 head. This means that herd sizes in Vermont are almost 50% larger than those in Minnesota. So much for the idea that the compact is protecting dairy producers from competing against large, Midwestern dairy farmers. This is just one of the distortions that I have had to deal with in this dairy debate, and I'm tired of the hard- working dairy farmers in Minnesota being labeled as, quote, ``corporate dairy farmers.'' The average Minnesota dairy farmer grazes a 57-head herd on 160 acres. I know Minnesota dairy farmers don't want to consolidate into larger and larger operations; they just want a level playing field where they can earn enough to support their families and continue to do something they love to do. I would ask my opponents to please not cloak the dairy cartels with the mantle of supposedly helping the little guy against encroaching agribusiness conglomerates. The hard evidence shows that on average, the wealthy, large producers are not, I repeat, not, in the Midwest, and the rich will only get richer if a compact extension gets rammed through the Senate. Mr. President, not only are certain members of this Congress trying to impose expensive dairy compacts on the American consumer, but they are also trying to strong-arm through milk marketing order changes that adversely impact both Upper Midwest producers in the dairy heartland of America and low-income consumers. I also want to review how we have arrived at this point today where Congress is trying not only through compacts but through the milk marketing order system, to blatantly seize market share from dairy producers in one area of the country and give it to producers in another. This bill not only hits Midwest producers once, but twice. The current milk marketing system requires processors to pay higher minimum prices for fluid milk the further the region is located from Eau Claire, Wisconsin. To reform this antiquated, Depression-era method for supplying milk to consumers, which basically picks winners and losers in the dairy industry, Congress, through the 1996 FAIR Act, required USDA to significantly reduce the number of milk marketing orders, and transition to a more market-oriented system of milk distribution. After many months of study and having received comments from hundreds of market participants, USDA proposed Options 1-A and 1- B. The Option 1-A proposal made minimal changes to the old marketing order pricing system, while Option 1-B contained some basic free market reforms and modernizations of the system. The Upper Midwest did not like what it saw in 1-B, actually, and liked the compromise even less, but it was a small step in the right direction, and we supported it as a compromise. The compromise came after the USDA received testimony concerning the two alternatives, and, as I said previously, the final rule takes steps toward simplifying and modernizing the milk marketing order system. As an Option 1-B supporter, I hoped for a proposal closer to 1-B, but accepted the need for compromise and, again, supported it. Implementation of the new compromise orders has unfortunately been postponed by a lawsuit in federal court. Option 1-A is basically no reform, and would ignore the direction of Congress in the FAIR Act. It would increase prices for consumers, affecting most the low-income consumers that spend a high percentage of their wages on food. Option 1-A also keeps in place a regionally discriminatory milk pricing system that benefits producers in some parts of the country at the expense of dairy farmers in other regions, much like compacts. Again, it's a government program that picks winners and losers, not allowing the market to set the prices. It is opposed by free market taxpayer advocacy groups, consumer groups, regional producer groups, and processor groups, and it does nothing to protect the nation's supply of fresh fluid milk. Our nation produces an abundance of milk that is sufficient to supply consumers' needs. Secretary Glickman, writing about the final rule, said that: USDA's own analysis shows that nationally, dairy farmers will realize virtually the same cash receipts under the new, fairer plan as they do now, and when aggregated, the all-milk price will remain essentially unchanged from that under the existing program, which virtually all sides agree sorely needs changing[.] Moreover, Agriculture Committee Chairman Lugar said that the final compromise rule ``is a good first step toward a policy that places the nation's dairy industry in a position to better meet the challenges of the global markets of the new century[.]'' What we also need to ask ourselves is why are we considering these controversial issues without going through the committee process, with full hearings and testimony? The Agriculture Committee has jurisdiction over milk marketing orders; nonetheless, we are here today trying to circumvent that jurisdiction. Again, the final rule is a compromise, not the best for either 1A or 1B advocates but a middle ground. We should not rush to reverse a process that took months to complete in order to replace it with 1A. Adoption of 1A would in effect maintain the status quo that, again, heavily favors some dairy farms at the expense of others. And please don't look at this debate as a mere balance sheet of who wins and who loses, or count votes that way. Remember that the Upper Midwest has been at a price disadvantage for more than sixty years, and this reform was only a modest, and, in fact, inadequate, attempt to correct the unfairness. Compacts are bad enough, but retaining these failed dairy policies of the past on top of that is incomprehensible. Currently 85% of the milk produced in the Midwest goes into manufacturing. When other regions of the country receive higher Class I differentials, the excess production spills into Midwestern markets and lowers the prices that our producers receive. Artificially inflated prices will always, always, always increase production. You can count on it like the sun rising in the morning. And by artificially inflating milk prices in areas of the country that are not particularly suitable to dairy production, Congress is literally trying to micro-manage where America's milk will be produced, and to take away dairy markets from the Upper Midwest. No other product receives the same kind of discriminatory pricing treatment that milk does in our country. The Upper Midwest can produce milk for a third less than some regions of the country. Why should the family farmers in the Upper Midwest not be allowed to benefit from the comparative advantage they have in milk production? Some will claim that the compromise reform will cost the dairy farmers across the country $200 million. This is not true. Actually, according to a USDA study, net farm income will be higher under the compromise rule in comparison to the status quo. And the Food and Agricultural Policy Research Institute at Iowa State, an agricultural policy research group, concluded that 60% of the nation's dairy farmers would receive more income under the USDA plan. Some supporters of H.R. 1402 (the legislation upon which these provisions now before us are based) also make the same argument as dairy compact proponents that if we do not implement H.R. 1402 then milk will be produced by agribusiness, or that further farm consolidations will occur. Going back to the USDA figures, North Carolina, whose congressional delegation has argued strenuously for the reversion to Option 1A, has an almost 20% larger per head average dairy farm size than my home state of Minnesota. Of course, Minnesota is part of one of the regions of the country that the opposition tries to demonize as the center of corporate dairy farming. Proof that this is not a battle between, quote, ``small family dairy farms'' and large Midwestern dairy farms only gets more striking. New York, a state that has also seen significant political support for H.R. 1402, has an average herd size per dairy farm that is 37% larger than Minnesota's. Georgia's average herd size is 72% larger than Minnesota's, and Florida's average herd size is four times larger than my home state's. Like the dairy compact argument, so much for the idea that we are saving the family farmer through passage of H.R. 1402. As an aside, because of the blatant unfairness of the system, and because the efforts of Upper Midwesterners to compromise in good faith have been ignored, forcing us to fight these last minute riders and strong-arm tactics, I have recently introduced legislation to totally deregulate the milk marketing order system, effective upon the date of enactment. This milk marketing order system is a relic from the past. It's a byzantine arrangement of complicated pricing formulas that looks like something conceived in 1980s Eastern Europe. It's time to tear this entire decaying, outdated infrastructure down, and start anew with an even playing field on which all producers can compete. That's what my legislation does, and I ask my colleagues who believe in fair trade and a fair shake for hard working farmers to sign on as cosponsors. Mr. President, the dairy compact and the other dairy provisions attached to this legislation are anti-competitive, anti-consumer, unprincipled, and an affront to the family dairy farmers in my state. To be candid, I'm thoroughly disgusted by this entire turn of events. We have sacrificed any basic sense of fairness during this process. These provisions have been added at the last minute, behind closed doors because they won't survive the scrutiny of public debate. Because of the blatant injustice that is being done to Minnesota farmers, I am committed to joining my Upper Midwest colleagues in doing all I can do to ensure that this legislation does not reach the President's desk. Mr. President, I would now like to read several newspaper editorials that have been written across the country in opposition to dairy compacts and H.R. 1402. To begin, from the March 15, 1997 edition of The New York Times: Agriculture Secretary Dan Glickman blundered last year when he approved a dairy cartel in the Northeast that would jack up consumer prices by perhaps 25 percent. . . . The Dairy cartel, also called a compact, would control the production and distribution of milk in New England, raising its price by between 13 and 35 cents a gallon. That would pump money into the bank accounts of the region's 3,600 dairy farmers by pushing prices back up to last year's sky-high levels. But it would hit 13 million consumers in Maine, Vermont, New Hampshire, Connecticut and Rhode Island with an added cost of up to $100 million. Poor parents, who spend about twice as much of their income on food as do non-poor families, would suffer the most. Food stamps would buy less milk and other dairy products. High milk prices would also raise the cost of national, state and local nutrition programs. With Washington cutting money for welfare, food stamps and other poverty programs, this is no time to impose needless costs on the poor. It will be hard for Mr. Glickman to admit he erred when he approved the cartel. But it would be even harder on parents to pay more for their children's milk. From the March 2, 1998 USA Today: Imagine being a widget maker in Georgia or New Hampshire with a federal guarantee that assures you a higher price for your product than widget makers in Wisconsin or Iowa. Sounds incredible, huh? Imagine being a cattle raiser in Florida or Oregon with a guaranteed price for your beef that's better than what ranchers in Texas or Nebraska can get. Impossible? Yes--but only because you're producing widgets or hamburger. If you're in the milk industry, it's business as usual. Pressured by the dairy industry, the government maintains a Depression-era formula that makes some cows (and their owners) more equal than others, depending on where they live. Millions of consumers and taxpayers pay the price; higher milk costs for themselves, higher taxes for government-bought milk for schools and other programs. . . . Apologists for government control claim the program is necessary to keep farmers in business and assure a supply of milk. The number of dairy cows plunged from 23.6 million in 1940 to 9.4 million in 1996; farms with dairy cows dropped from 4.7 million in 1940 to 155,300 in 1992. But the milk produced per cow has nearly quadrupled. U.S. milk production is up from 109 billion pounds in 1940 to a projected 162 billion pounds in 2000, despite a 60% reduction in the number of cows. And while sales of cheese, cream and speciality products like eggnog and yogurt are up, U.S. demand for liquid milk has been essentially flat for more than 20 years. Yet dairy farmers continue to get special privileges, eluding even the 1996 ``Freedom to Farm'' law that committed the government to phasing out price supports and market manipulation for corn, soybeans, wheat and other commodities. . . . Aggressive dairy lobbies in state capitals from Louisiana to New York are pressing to form or enlarge new regional compacts that permit even more manipulation of milk prices at the consumer's expense--adding up to 15 or 20 cents a gallon. That's on top of the indefensible marketing orders, which inflate retail milk prices by at least $1.5 billion a year for a program that isn't needed. Congress abolished ``welfare as we know it'' for mothers and children. Welfare for cows and dairy farmers should end as well. The next editorial shows that though the compacts are ostensibly put in place to help small dairy farms, they have failed to do so, and exist as subsidies to large New England operations. Following are excerpts from a July 19, 1999 Boston Globe editorial: Dairy farming in New England, especially in Massachusetts has been a chancy proposition for small, family-run operation. . . . Congress, which must soon decide whether to extend the system's enabling legislation, should modify it to focus more closely on smaller farms rather than lavishing money on larger operations that are fully capable of competing in a tough economic environment. Congress should also resist the temptation to expand the system to other parts of the country. . . . The rescue effort now in place is a federally sanctioned system of mandated price supports, which amount to about 14 cents a gallon. In Massachusetts this generates $40 million annually, but only $2 million goes to Massachusetts farmers, with most of the balance going to Vermont farms, many of which are larger and have lower costs. Massachusetts's agriculture commissioner, Jay Healy, has proposed limiting the subsidy to a fixed level of production, about 1.5 million gallons of milk annually, which is typical for smaller farms. Concluding with an excerpt from the editorial, it says: Even the New England system provides more subsidies than are needed to achieve its objective. The funds that now go to larger farms would be more effective if they were used to increase small-farmer subsidies, typically $3,000 to $4,000 per farm. Now, I must disagree with the editorialist's assessment that the subsidies should be continued, but I find it very significant that even in New England they recognize that since the subsidy does not specifically target the smaller farms, it disproportionately helps the larger operations because the subsidy is based upon the volume produced. It should not be surprising that efforts to cap the subsidy to a fixed level of production have been successfully resisted by the large dairy farms in New England. The next editorial I will read is from the April 27, 1999 edition of the Houston Chronicle: The Texas House of Representatives recently approved a bill that seeks to raise milk prices and deprive Texans of the benefits of competition. The Senate need not reflect long before rejecting it. House Bill 2000 would require Texas to join the Southern Dairy Compact, which sets the minimum price for milk paid to producers in its member states. The minimum price inevitably would be higher than the price Texans pay in a competitive market. I should note at this point that Congress has not in fact authorized the Southern Dairy Compact, and if common sense, prevails, it won't. Congress has arbitrarily chosen New England consumers to pay the milk tax, and New England producers to receive it. Again continuing with the Houston Chronicle article: Texas dairy farmers are producing all the milk that Texas families and dairy product manufacturers need and more. There is no reason why state government should make families pay more for the milk, ice cream and other dairy products they buy. The state purpose of House Bill 2000 is to preserve family dairy farms and ensure a supply of fresh milk. But history shows that milk price controls heighten the financial advantage enjoyed by the largest producers without sustaining uneconomical small farms. Furthermore, anyone who thinks Texas needs added government regulation to provide a reliable milk supply has not seen the dairy cases at the supermarket that are filled to overflowing with milk and dairy products of every description. Why change a system that provides ample supply and variety at the lowest possible price? Adding Texas to the Southern Dairy Compact would do little to help Texas milk producers, but it would deprive Texas dairy product manufacturers of an advantage they enjoy over competitors in state where the price of milk is controlled. This bill is bad for consumers, bad for manufacturers and bad for the taxpayers who pay for or subsidize milk consumed by schoolchildren, prisoners, patients in public hospitals and food stamp recipients. Few bills could provide more reason to reject them than the authors of House Bill 2000 have provided. The next editorial is from the June 15, 1999 edition of the Philadelphia Inquirer: In 1996, Congress revamped federal farm laws, intending to ratchet down government's intrusion in agriculture. But a bill now pending would use that law to create regional cartels that would set artificially high prices for milk. Pennsylvania consumers should be lobbying lawmakers against this move. Despite the fact that the state's outdated milk- board system already sets minimum milk prices--but no maximum--the legislature last week allowed Pennsylvania to join the cartel known as the Northeast Interstate Dairy Compact. Consumers here who consistently pay more for milk than in neighboring states should wince at the prospect of a regional price-fixing body imposing still higher prices. Here's how it works: Congress established the Northeast compact under the 1996 act, an agreement among six New England states to prop up milk prices in an effort to save small dairy farms. When milk prices on the open market fall below a ceratin target price, the compact states tack a surcharge onto milk. The extra revenue is passed back to farmers; the higher milk price gets passed along to consumers. The compact is set to expire October 1, but a bill introduced in April would make it permanent and expand it to include six more states, including Pennsylvania. What's worse, the bill also would establish a Southern Dairy Compact, which could include up to 15 more states. Already the Northeast compact has raised milk prices by almost 20 cents a gallon since its inception. By federal and state law, the compact could raise milk prices in Pennsylvania by about 70 cents a gallon, consumer groups warn. The logic behind the original legislation, to save small dairy farms, had some appeal. Dairy farms nationwide have been going out of business, usually because they are acquired by larger producers, at an average rate of 5.1% a year in the 1990s, experts say. But that doesn't prove the compact would protect small farmers; it may hurt them. Larger dairy farms which produce the most milk reap the most benefit in subsidies from the compact. Alarmed by the potential harm both to middle-class consumers and low-income families, various groups are protesting the new bill. Nutrition and consumer groups, government-spending watchdogs and milk processors and retailers all have lined up against the concept. Congress should reject this attempt to extend the counterproductive intrusion on the workings of the free market. Let the milk cartel die. The following editorial is from the January 5, 1999 issue of Newsday: Despite a few new consumer protections that made the deal acceptable to the Democratic Assembly, the state should not have allowed New York's dairy farmers to join a regional milk cartel. This sour stuff will keep the wholesale price of milk artificially high, forcing processors and retailers to pass the cost on to consumers. The hit will fall hardest on the poorest parents who buy milk for their children. And it's not clear now much it will help the small farm owners most in need. Besides, there are other ways to help dairy farmers that wouldn't necessarily push up milk prices in markets. The state, for instance, could cut or subsidize a variety of taxes about which farmers have complained. Meanwhile, wholesale milk prices are at a record high, easing some pressure on farmers. Entrance into the Northeast Interstate Dairy Compact would tie New York's farmers into a New England cartel designed to keep prices higher when they otherwise would collapse. Rather than benefit from lower prices, consumers would pay the higher ones when wholesale prices soar. And the law's cap on retail prices is so high that, barring severe inflation, it won't ever be reached. Schools are protected but not other nonprofits. Now, there's only one way to stop this deal. Congress has to approve it. It shouldn't.'' This next editorial is from the April 4, 1999 edition of The Atlanta Journal-Constitution: Since the federal Freedom to Farm Act was passed in 1996, the U.S. government has been trying to wean the nation's farmers, including the dairy industry, from government price supports and other subsidies that interfere with the workings of the free market. Unfortunately, the dairy industry is trying to undo that progress by pressuring Congress and states such as Georgia to approve interstate dairy compacts. If the industry succeeds in that lobbying campaign, consumers will have to pay higher prices for a basic food commodity essential for good health. The compacts, if approved would essentially establish legal cartels for dairy farmers and allow the cartels to set milk prices higher than the market would otherwise allow. In Georgia, dairy farmers have rammed through the recent session of the General Assembly a bill allowing them to join the Southern Dairy Compact. The same bill was passed a year ago by the General Assembly but was vetoed by Gov. Zell Miller, who noted that it might be unconstitutional and would certainly raise costs for consumers. The decision whether to sign the latest bill rests with Miller's successor, Roy Barnes. Barnes was elected last year in part by portraying himself as a consumers' advocate. If he honors the philosophy, he too should recognize the dairy compact as nothing more than a back-door tax increase and veto it accordingly. Government should not use its power to guarantee any business or industry a profit. A dairy compact already exists in New England. After it was enacted in 1997, the price of milk rose from $2.54 and fluctuated to a high of $3.21 a gallon. Milk prices there initially jumped about 20 cents a gallon, enough to generate an additional $46.7 million for dairy farmers in less than two years. Not surprisingly, New England dairy farmers see the compact as a safety net designed to prevent their profits from dropping too dramatically. Those who actually pay higher prices, however, see it as little more than a special-interest tax increase that will only hurt consumers, particularly the poor, the elderly and those on fixed incomes. Milk prices go up and down monthly all over the country, but when prices drop significantly in the spring and fall, they only drop slightly in dairy compact states. The savings to the consumer is lost so the dairy farmer can keep a high return on the product. ``It socialism. It's a controlled economy,'' said John Schnittker, an economist with Public Voice for Food and Health Policy. ``Compacts are a really bad deal for consumers. They add about 22 cents a gallon to today's milk price. And they keep paying high prices when prices all over drop.' Nine southern states besides Georgia have already approved creation of a Southern Dairy Compact to mimic the protectionism found in New England. However, that and other proposed compacts must still be approved by Congress, which also has to decide whether to renew the New England Dairy Compact.'' Congress should reject both these proposals as unnecessary, counterproductive intrusions on the workings of the free market. However, if Barnes signs the Georgia law and Congress approves the Southern compact, Georgia consumers are stuck. The state can withdraw from the compact only through passage of another law by Congress and then only after a one-year waiting period. Approval of dairy compacts in the South would not suspend the law of supply and demand. It would only distort it. Some economists predict that as a result of higher prices, dairy compacts would reduce milk consumption by 8 percent nationwide. Those most vulnerable would be families with young children, who in many cases are already struggling to make ends meet. Georgia's dairy industry is going through a painful consolidation. The state lost 117 dairy farms over the past four years, and farmers warn that without government protection, more and more milk will have to be imported from other states. However, dairy farms in neighboring states have also been disappearing; the trend toward consolidation is nationwide. Furthermore, milk from Alabama or Tennessee tastes the same as Georgia milk, and today's technology allows quick transport to prevent milk products from spoiling. Free enterprise, competition and the open market have been the economic pillars of the United States' economy for more than 200 years. Every experiment at subsidizing an industry has proven to be a failure, particularly in agriculture. Gov. Roy Barnes should protect Georgia consumers and families by vetoing that state's entry into the Southern Dairy Compact. And Congress should dismiss the entire concept as an unnecessary infringement on free enterprise. I also want to share with my colleagues some editorials concerning the milk marketing order system. This editorial is from The Dallas Morning News, dated September 14, 1999. It says: Minnesota Gov. Jesse Ventura wants Beaumont, Texas to be the center of the dairy universe instead of Eau Claire, Wisconsin. Mr. Ventura knows that there are no dairy cows in Beaumont. Nevertheless, his logic is faultless. That's because federal farm policy dictates that the farther a dairy farmer lives from Eau Claire, the more milk processors must pay him for his milk. Minnesota profits little from the arrangement because it borders Wisconsin. But it is 1,200 miles from Beaumont. So making Beaumont the new Eau Claire makes sense for Minnesota's hard-pressed dairy farmers. In truth, Mr. Ventura favors a free market in agriculture. His facetious advocacy for Beaumont is designed to focus public attention on absurd federal dairy policies, which punish efficient producers and gouge consumers. The United States needs to abandon the Depression-era thinking that led it to calculate milk prices based largely on dairy farms' proximity to Eau Claire. Times have changed; U.S. agricultural policy remains mired in the 1930s. Unfortunately, Congress seems poised to revoke the few tentative reforms that it passed in 1996 and to expand and give extended life to a program that would create consumer- antagonistic milk cartels in sections of the country. A simplified milk-pricing system is supposed to go into effect on October 1. And federal price supports are supposed to end on Dec. 31. But a key congressional committee has approved a bill that would stifle both of these reforms. Another congressional committee is expected to vote soon on a bill that would expand a milk cartel of six northeastern states to as many as 27 states; if Congress does nothing, the cartel would disappear on October 1. Congress should leave the reforms in place and let the milk cartel ride into the sunset. Monkeying with the free marked has raised prices for consumers and hasn't kept marginal dairy farms from going bankrupt. This next editorial is from the July 29, 1999 Chicago Tribune: The U.S. justifiably accuses Europe of protectionism when it comes to beef and bananas. But when lamb and milk are on the menu, the accuser stands accused. The Clinton administration just slapped tariffs on lamb imports from Australia and New Zealand to protect U.S. sheep producers. That's outrageous and makes a mockery of the case the U.S. is trying to build that phasing out agricultural subsidies must be a priority when the next round of World Trade Organization negotiations is launched in Seattle this November. But as outrageous as the lamb tariffs are, they pale in comparison to the mischief currently afoot in Congress to extend and expand what can only be called domestic protectionism in milk pricing. Who needs the rest of the world for a trade war? If some in Congress have their way, we'll soon have our very own All-American trade war, pitting the Midwest against the Northeast and the South while needlessly raising milk prices for consumers. The facts are these: As part of the 1996 Federal Agriculture Improvement and Reform (FAIR) Act, the decades- old milk price support program was to be phased out over three years and the Department of Agriculture was ordered by Congress to reform its unfathomable pricing system. The farm bill also created a ``temporary'' milk cartel among six New England states--which account for all of 3 percent of U.S. milk production--to keep less expensive milk out of that region. The rationale was that small family-owned dairy farms in those states needed an adjustment period to prepare them for free-market competition come October 1999 when the cartel would expire. Now there is an effort in Congress to roll back the USDA pricing reforms, to extend the life of the New England cartel beyond October and expand it to include six other states, including New York and Pennsylvania. And 15 southern states say that, in order to compete with their brethren to the north, well, they're going to need a cartel of their own. Follow the map west to see where this is headed. There are about 9,000 dairy farmers in America--40,000 of them are in the upper Midwest and, at some point, why shouldn't they have a cartel too? And, of course, the West will need one to compete with all the others. Don't do it, Congress. The FAIR Act properly and at long last got Washington out of the milk business. Let the market work.'' This editorial is from the April 3, 1999 edition of the Boston Herald: The federal government is reorganizing its milk cartels, and that made news this week. Every bit of attention that can be focused on this absurd system of price controls ought to be considered help, no matter how small, toward eventual abolition. The Agriculture Department has a new set of price- setting formulas, which it estimates will reduce the national average price by 2 cent a gallon, and is consolidating regional cartels to make 11 cover the country instead of the previous 31. Nothing fundamental will change. The ``marketing order'' regions are protected markets for farmers--all dairies in one must pay the same government-dictated price to farmers. It is illegal to ship milk from one region to another. Nothing else in the economy is sold like this--not even essentials like gasoline or shoes. The effect is to keep prices higher than they would be otherwise and transfer wealth from families with children to dairy farmers. The farmers, the productivity of whose cows just keeps increasing, argue in essence they ought not to be driven out of business by economic forces. If we accepted that as a principle, we'd be subsidizing manufacturers of gas lamps and buggy whips. This editorial is from the July 17, 1999 edition of The Kansas City Star: In 1996, Congress ordered the administration to simplify the pricing of milk. That's easy enough: Stop regulating it. But this is the farm sector, and a free market in milk is somehow inconceivable. Instead, milk prices are calculated from rules and equations filling several volumes of the Code of Federal Regulations. The administration's proposed reform would reduce the number of regions for which the price of wholesale milk is regulated from 33 to 11. Fine, but it would also perpetuate the loopy, Depression-era notion that the price of milk should be based in part on its distance from Eau Claire, Wisconsin. Under current policy, producers farther away from this supposed heart of the dairy region generally receives higher premiums, or ``differentials.'' The administration called for slightly lower differentials for beverage milk in many regions, but in Congress even this minuscule step toward rationality is being swept aside. The House Agriculture committee has substituted a measure that essentially maintains the status quo. Similar moves are afoot in the Senate. Worse, some dairy supporters are working to reauthorize and expand the Northeast Interstate Dairy Compact, a regional milk cartel, and allow a similar grouping for Southern states. Missouri's legislature, by the way, has already voted to join a Southern compact, even though it would result in higher prices for consumers. The Consumer Federation of American reports that the Northeast Compact raised retail milk prices an average of 15 cents a gallon over two years. Kansas lawmakers gave tentative approval to participation in a compact but would have to act again to make the decision final. Dairy producers concerned about the long view should be worried. Critics point out that the higher milk differentials endorsed by the House Agriculture Committee may well lead to lower revenue for many producers. This is because the higher prices will encourage more production, driving down the ``base'' milk prices and negating the higher differential. The worse idea in this developing stew is the prospect of dairy-compact proliferation. A compact works like an internal tariff. Because the cartel prohibits sales above an agreed- upon floor price, producers within the region are protect from would-be-outside competitors. Opponents point out that more regional compacts--and the higher prices they support-- will breed excessive production, creating surplus dairy products that will be dumped in the markets of other regions. This will prompt other states to demand similar protection, promoting the spread of dairy compacts. Ultimately, as in the 1980s, political pressure will build to liquidate the dairy surplus in a huge, multibillion-dollar buyout of cheese, milk powder and even entire herds . . . Congress should permit the Northeast Compact to ``sunset,'' or expire, which will occur if the lawmakers simply do nothing. In fact, doing nothing to the administration's proposal seems the best choice in this case, or more properly, the least bad. Perhaps some day Washington will debate real price simplification, as in ditching dairy socialism and letting prices fluctuate according to supply and demand. This editorial is from the September 14, 1999 edition of the San Antonio Express-News: During the Depression, when it was impractical to truck milk long distances from dairy farms to processing plants, Congress devised a system of price supports that flattened the price farmers--and consumers--paid for milk. That system, still in place, pays dairy farmers more for milk the farther they are from Eau Claire, Wisconsin, the ``center,'' said Congress in the 1930s, of the dairy industry. While refrigerated trucks and modern dairy farms make the system arcane, Congress preserved it until 1996, when it ordered the Agriculture Department to phase it out. Price supports are scheduled to end December 31. However, Congress is toying with keeping them and adding to the mess by creating a new dairy compact. There already is a Northeast compact, designed to help family farms. However, it helps large dairy farms more than small ones and adds from 50 cents to $1 to the price of a gallon of milk. This not only negatively impacts families, but also child nutrition programs. The Northeast dairy compact also was supposed to die December 31, but some members of Congress now want to create a Southern compact . . . Let the dairy price supports expire and don't create a new Southern dairy compact. This editorial is from the September 20th edition of the Florida Time-Union: There is a good lesson to learn as reformers in Congress continue efforts to end milk subsidies. The lesson is that a government handout, once in place, is as close to having eternal life as anything on earth. Millions of consumers would benefit from the end of dairy price supports and milk marketing orders, but hundreds of wellheeled milk magnates would have a little taken off the bottom line, perhaps. Every product that contains any milk costs more because of them. Like most subsidies, it involves a double cost: higher taxes and higher prices. Even those who are lactose intolerant are injured by the subsidies. For example, taxpayers get hit hard when they buy milk for the Women, Infants and Children program and school lunches. People with food stamps get hurt because they pay more for milk and therefore have less for other staples. The industry's lobbyists stalk the halls of Congress carrying tales of woe about the diminishing number of dairy cows. Yet, they rarely talk about the nearly four-fold increase in milk from each cow that occurred between 1940 and 1996. The federal government got into the dairy business in 1933. Citizens Against Government Waste notes that the excuse was to relieve the existing national economic emergency by increasing agricultural purchasing power. Call Washington: The Great Depression has ended. Price supports and marketing orders are part of a . . . system rivaling anything devised in the old Kremlin's central planning office. They cut off the dairy farmer from the realities of the market, causing overproduction and waste, with the government trying to clean up its mess by buying huge stockpiles of cheese or even entire dairy herds. Price supports are winding down because of the 1996 Farm Bill, but marketing orders remain. Clinging to the days when long-distance refrigeration was a potential problem, the order include differential pricing based on how far manufacturing plants are from Eau Claire, Wisconsin, which makes that hamlet the center of the dairy universe for no logical reason. That translates into 35 cents more per gallon of milk for Florida residents, Citizens Against Government Waste says. Parents can do the math. Lobbyists succeeded in muddying the 1996 bill. Congress should now revisit the law and improve on the improvements. There simply is no rational reason for the federal government to set the price of milk. End the milk tax. This one is from the September 24, 1999 of the Christian Science Monitor: No one can dispute the difficulties many family farms face today, problems farmers have struggled with this entire century. For many, farming is more than just earning a living, it's a way of life and a connection with the land. The nation, too, has a stake in preserving farms. But at what price? It's mistake to argue that agriculture can be insulated from shifting market forces forever. Government can help farmers adjust but not always survive. This week saw Congress swing backward in its own mandate to update a federal system of setting milk prices that currently props up many dairy farms. It's not a minor issue: Dairy sales make up roughly 10 percent of American farm income. The House voted Wednesday to block the Agriculture Department (USDA) from modernizing the 1937 pricing system in which dairy farmers get higher prices for raw milk the farther they live from Eau Claire, Wisconsin. (Then considered the ``center'' of dairy farming). The idea back then was to ensure fresh milk supplies nationwide. But with modern refrigeration and transportation, it's obsolete. A 1996 law handed USDA the job of devising and implementing a new system since Congress, representing competing interests, couldn't get it done. The 1937 system expires October 1. While the USDA plan is more market-friendly, it's only a first step. It simplifies pricing and narrows disparities between efficient Midwestern farmers and less- efficient ones elsewhere that can get up to $3 more per 100 pounds of milk. But in doing so, it would remove a $200 million, consumer-paid subsidy, potentially driving many Northeastern and Southern dairy farmers out of business. The House scrapped the Eau Claire system, but left in place pricing that hurts consumers, who pay artificially high prices for milk. The Senate shouldn't follow suit; if it does, the President should veto the bill. Meanwhile, Vermont's senators are spearheading an effort to renew the federally authorized Northeast Dairy Compact, which is expiring. Separate from the USDA pricing system, the compact allows regional officials to set higher prices for milk. Some Southern senators want a similar cartel. Yet all this price-fixing has failed to halt the decline of inefficient dairy farms. Between 1992 and 1998, the number of dairy farms fell about 5 percent a year to 91,508. Price- fixing only drags out the difficult process at consumer expense. This editorial is from the April 29, 1999 of the Cincinnati Enquirer: Three years ago, Congress busted its bib-overall buttons with pride after it planted a few seeds of agricultural reform in the Freedom to Farm Act. Problem is, nobody's remembered to water them since. That neglect is placing a huge economic burden on farmers, says Representative John Boehner. The bill, co-written by Mr. Boehner, began to phase out some farm subsidies over seven years to create a free-market structure for agriculture that reflected America's economic reality. So far, so good. But the other part of the deal, Mr. Boehner points out, was the federal government was supposed to help farmers through the transition by opening new markets for their goods, cutting estate taxes and easing the regulatory burden on farmers. What's happened? Nothing, of course. President Clinton has made some occasional noises about the need to ``tear down barriers, open markets and expand trade,'' but administration officials conveniently forgot that part--and Congress hasn't been exactly diligent in reminding them. In fact, the White House only made matters worse--notably with a new set of costly federal environmental mandates on farmers announced last month. . . . On Tuesday, Mr. Boehner sounded the alarm on legislative efforts to renew one interstate price-fixing dairy compact and to create a new one. Such deals ``are bad for consumers, bad for farmers and bad for the future of American agriculture,'' he said. It would be another step backward from free-market reform--a troubling turn of events. And so the Freedom to Farm Act itself has been left to take the rap for farmers' woes--low prices resulting from a record harvest, coupled with overseas financial crises. The news is terrible: Kansas farm income plunged 72 percent last year, the Kansas Farm Management Association announced Tuesday. ``Farmers today are having a tough time, and Washington's inaction on this forgotten side of Freedom to Farm is making it even tougher,'' says Mr. Boehner, who's virtually alone in criticizing this federal foul-up. ``It is fundamentally wrong for the Clinton administration to make Freedom to Farm the scapegoat for its own failure to deliver on its promises to farmers.'' He says Mr. Clinton ought to help Congress with trade, estate-tax and regulatory relief legislation instead of throwing up roadblocks and imposing new sets of rules on farmers. Mr. Boehner is right, and his colleagues should join him in putting the pressure on the White House. As reforms go, Freedom to Farm was pretty tame, a watered-down compromise that left a lot of pet projects intact. But it did manage to break federal precedent, by starting to reverse 60 years of Depression-era subsidies and controls that made little sense once America recovered from economic devastation. Now, those modest gains are in danger from a rule-happy, control-freak administration, enabled by a complacent Congress. . . . Finally, the last editorial I'm going to read is from Wednesday's edition of the Washington Post. It says: This is a Congress that began with lofty discussions of saving Social Security, modernizing Medicare, etc. But all legislatures come back to the fundamentals in the end. Among the few issues that remained as the two chambers were completing their work--right up there with U.N. dues and Third World debt relief--was milk price supports. Somewhere in the final mega-bills will be provisions allowing New England to maintain a dairy compact that keeps milk prices artificially high, and abandoning a modest reform that Congress itself virtuously ordered a few years ago reducing such supports elsewhere in the country. These provisions are brought to you by people who in other contexts present themselves as foes of government regulation. But they like it well enough when it produces what they want--extorting higher prices for milk, for example. In the Freedom to Farm Act of 1996, while reducing supports for other crops, Congress called for a study of the milk marketing order system, which props up prices at the checkout counter. The study produced a recommendation that the system be preserved but eased. Even that seems too much for the milk folks in Congress. Though the issue was still in play, it appeared last night they would succeed in keeping the old system intact. It's just like the emergency aid they've doled out to producers of other crops in the past two years, repealing by another name the reduced supports in Freedom to Farm. Meanwhile, the New England compact, which was due to expire, will be allowed to remain in effect for two more years. The result will be to transfer hundreds of millions of dollars from consumers to inefficient producers who couldn't otherwise compete. By definition, most of the benefit will go to larger producers. The impact will be disproportionately felt by lower-income consumers. It will be evident inside government feeding programs as well, including that for low- income women, infants and children; the available dollars will buy less. It's a fitting testament to the instincts of a Congress that, from the standpoint of the public interest, can't go home soon enough. Mr. President, the editorial boards have got it right this time, and now is the time to end these distortions and fundamental unfairness in dairy markets before it gets worse. Mr. President, I wanted to take a moment to thank the majority leader and the Democratic leader for taking the time to work with us. I appreciated all their help and support in working with my colleagues, Senators Kohl, Wellstone, and Feingold. We don't see eye to eye on every issue, but on something as important to our States as this, I appreciated the opportunity to work with them. I want to say that any Senator who has one ounce of support for the capital market, the free market system, they could not support this part of the dairy provisions. The Northeast Dairy Compact and the bill, H.R. 1402, is unacceptable. I am not happy with this bill, but I am glad the majority leader has recognized the problem and has offered to work with us in the months ahead. I appreciate that. When we look at Freedom to Farm--the bill that passed--it says we should compete in the open marketplace, go head to head. The best person and the best farmer who can be competitive is going to win. Now, we should not be pitting our dairy farmers one against the other through an unfair, archaic Government program. Let our dairy farmers compete head to head in the marketplace, but let's not have Government pick winners and losers. I have worked closely with Senator Jeffords from Vermont. I told him, after we had a vote on the floor dealing with the Northeast Dairy Compact, I wasn't satisfied with that, as well, and we needed to get together and work out something where our dairy farmers are not put at a disadvantage, one against the other. Again, I appreciate all the efforts that have been put into this. I look forward to working with all our colleagues next year to try to bring some kind of fairness to this dairy program, as we have done with other farmers. We should not leave dairy unanswered. I thank everybody for their help, and I look forward to working with colleagues to make sure we can work out a fair bill that will satisfy everybody when it comes to dairy. I yield the floor.

Mr. GRAMS

Mr. GRAMS. At the Brandenburg Gate, West Berlin, on June 12, 1987, President Reagan issued a stunning challenge: ``General Secretary Gorbachev, if you seek peace if you seek prosperity for the Soviet Union and Eastern Europe, if you seek liberalization: Come here to this gate! Mr. Gorbachev, open this gate! Mr. Gorbachev, tear down this wall!'' And less than three years later, the wall crumbled, along with the threat of communism as a viable, universalist alternative to democracy. I remember reporting on the fall of the Berlin Wall as a newscaster. I remember those first tentative attempts to climb over it, and the rush of revelers that followed when no shots were fired. Remember, the wall was built to keep people in, and freedom out. The guard posts in the East were facing eastward, not toward West Berlin. It is incredible that the tenth anniversary of this seminal event passed almost without comment. For it marked the end of the Soviet Empire, and foreshadowed the end of the Soviet Union itself. The global correlation of forces, as the Soviets used to say, aligned with freedom, not oppression. The Wall crumbled because President Reagan was committed to achieving peace through strength. The Reagan Doctrine asserted the need to confront and rollback communism by aiding national liberation movements in Afghanistan, Angola, Grenada, Cambodia, and Nicaragua. He proved that once countries were in the Soviet camp, they need not remain there forever. He realized that our national prestige is reinforced and enhanced when we operate with a coherent, concise, and understandable foreign policy. And by doing so, he succeeded in inspiring and supporting dissidents behind the Iron Curtain who eroded the mortar of that Wall. In contrast, the Clinton Administration has reacted to foreign policy crises, but has failed to a develop a foreign policy. The Administration has lurched from managing one crisis to another, but never articulated the national interest in accordance with a core philosophy. Instead of consistently safeguarding and promoting our values abroad, it has acted on an ad hoc basis according to the needs of the moment, confusing our allies and emboldening rogue nations. Serbia was emboldened to conduct ethnic cleansing in Kosovo; North Korea was emboldened to develop nuclear weapons; Saddam Hussein was emboldened to strengthen his position in northern Iraq. What is the Clinton Doctrine? We have been told about a ``do-ability doctrine'' whereby the United States acts ``in the places where our addition of action will, in fact, be the critical difference.'' However, that alone cannot be the criteria for U.S. intervention. Under that formulation we could be expected to intervene anywhere in the world. And as Secretary Albright stated as our Ambassador to the U.N. ``we are not the world's policeman, nor are we running a charity or a fire department.'' However, as a practical matter, the combination of a ``do-ability doctrine'' with so-called ``assertive multilateralism''--places the United States in the very position which Secretary Albright derided. It has resulted in both the abdication of our responsibilities and the misguided projection of our power. Instead of applying the Reagan Doctrine by equipping and training the Bosnian forces over our allies' objections, the Administration subcontracted our role of arming the Bosnians to a terrorist regime in Iran, unnecessarily endangering the lives of U.S. troops. Instead of arming the Bosnians, we supported our allies standing by in U.N. blue helmets, watching unarmed civilians be massacred in Srebrenica. In contrast, the attempt at nation building in Somalia, and the refusal to provide equipment requested on the ground because it would send the wrong signal, sacrificed the lives of 18 brave soldiers without regard to whether such action advanced our vital concerns. When this Administration acts according to the exigencies of the moment instead of according to an underlying philosophy, the country lurches from paralysis to ``mission creep'' without regard to the national interest. Recently, there has been discussion of the possibility of reworking our entire military force structure--which is presently based on the capacity to fight two simultaneous major regional conflicts--in order to enable us to commit US troops to an ever-growing number of multilateral ``peacekeeping'' missions. I am concerned that we may sacrifice our vital national security interests in order to be able to participate in peripheral endeavors. We should not be shortsighted. We should not lose sight of what we must do in order to accomplish what we can do. Our military should be used to protect our national security interests, not provide peacekeeping in areas without strategic significance. That kind of distinction will never happen under the Clinton Administration. President Clinton does not have the clarity of purpose of Ronald Reagan. No walls will be torn down. There is no Clinton Doctrine. There is only a half-hearted attempt to justify random acts under an artificial rubric and a series of slogans. And our country is the worse for it. We should note the fall of the Berlin Wall symbolizes more than just a victory of liberty over totalitarianism. It shows that armed with a core philosophy, a coherent doctrine, and a lot of courage, there is no limit to what we can accomplish.

Mr. GRAMS

Mr. GRAMS. Mr. President, a year ago I was here in this chamber speaking on the 1998 Omnibus Appropriations legislation. I criticized the abusive process that made the entire negotiations exclusive, arbitrary, and conducted behind closed doors by only a few congressional leaders and White House staff, and few Members of the Congress had any idea what was in the bill but were asked to approve it without adequate review and amendments. I also urged the Congress not to repeat the mistake that we need to reform the process and start the process early in the year to avoid appropriations pressure. Many of my colleagues shared my views at the time and agreed that the federal budget process had become a reckless game, and it not only weakened the nation's fiscal discipline but also undermined the system of checks and balances established by the Constitution. At the beginning of the 106th Congress, I argued repeatedly in this chamber that the key to a successful budget process was to pursue comprehensive budget process reforms. I have introduced legislation to achieve these goals which includes legislation that would force us to pass a legally-binding federal budget, allow an automatic continuing resolution to kick-in to prevent government shutdown, set aside funds each year in the budget for true emergencies; strengthen the enforcement of budgetary controls; enhance accountability for Federal spending; mitigate the bias toward higher spending; modify Pay-As-You- Go (PAYGO) procedures to accommodate budget surpluses; and establish a look-back sequester mechanism to ensure the Social Security surplus will be protected. We also need to pursue biennial budgeting and getting rid of the so-called ``baseline budgeting.'' We were assured by Senate leaders that we were going to pursue real budget process reform early this year and that we would never have another omnibus spending bill in the future. Mr. President, I believe what we have before us today is a repeat of what was promised to never occur again. Once more, with inadequate time to review. The Houses passed this omnibus bill with absolutely no knowledge of what was in it. This is nearly a play-by-play of 1998 because we have not reformed our budget process. As a result, after seven Continuing Resolutions, we have before us an omnibus spending bill that is full of creative financing and earmarked pork programs. Mr. President, when will we ever learn our lessons? Mr. President, it is entirely irresponsible and reckless that Congress has over-used advanced appropriations, used directed scoring, emergency spending and many other budgetary smoke and mirrors to dodge fiscal discipline and significantly increase government spending. Like last year's omnibus bill, this legislation is heavily loaded with irresponsible and inappropriate provisions. It is severely flawed by new spending, no CBO scoring, gimmick offsets and billions of pork- barrel programs. Many last-minute spending needs were loaded into this omnibus bill just in the last few days. I still cannot even tell you what they are, since we haven't been given enough time to review it. The double whammy delivered to Minnesota dairy farmers by adding a two- year extension of the Northeast dairy compact and 1 A order reform is my main reason for opposing this bill. These outrageous last-minute additions seriously hurt Mid-West dairy farmers and are the reason why we are still here today. This omnibus bill has again proven that big government is well and alive in Washington. The bill provides a total $385 billion for just five spending bills, a significant increase over last year's levels. Congress is recklessly and irresponsibly throwing more and more taxpayers' money to help the President enlarge the government. Billions of dollars were added to the spending legislation avoiding the normal committee process, without any amendments and full debate. If hiring more police officers and more elementary school teachers is the solution to stop crime and improve education, let us have an open debate on the merits of the policy through the usual democratic process. Let's not cut deals behind the closed door in meetings by just a few. Since we established statutory spending limits, Washington has repeatedly broken them because of lack of fiscal discipline. We have done so again this year. In my judgment, this omnibus spending bill and the other appropriation bills have been enacted have spent billions of dollars more than the spending caps if we would use honest numbers to score them. To date, the Congressional Budget Office has not provided us with its estimates on this bill. Because of the CBO's inability to score the bill, we do not know what the real cost of it, or whether it stays within the 302(b) allocations. But we do know many accounting rules have been bent in putting this bill together to avoid the tighter spending caps. Let me explain: This bill relies heavily on the so-called ``directed scoring'' technique for it increased spending. Traditionally, Congress always uses the Congressional Budget Office estimates for scorekeeping. However, because the Office of Management and Budget (OMB) has more favorable estimates for some government programs than the CBO, the Congress simply directed CBO to use OMB numbers to keep score for this year's spending bills. One of these OMB estimates the CBO was directed to use is the $2.4 billion spectrum sales revenue expected to be collected next year. We all know that level of sales will not be reached. In fact, we criticized the President for using this overoptimistic number in his past budgets. Just by using the OMB's rosy estimates, without making any hard choices, Congress has increased this year's 302(b) allocations by over $17.4 billion. But the real danger is, by the end of the year, the CBO will use its own estimates to score our budget surplus or deficit. If OMB's numbers prove to be unrealistic and wrong, we end up spending the Social Security surplus we have vowed to protect and it will be too late to adjust the budget accordingly. This is the last thing we want to do. That is why I was disappointed my bill to provide an automatic sequester triggered by spending of the Social Security surplus was not passed. This procedure is absolutely essential to ensure we keep our commitment to protect Social Security. Again and again, Washington lowers the fiscal bar and then jumps over it, or finds ways around it, at the expense of the American taxpayers, so all the spenders and those special interests who benefit at other expenses go home happy. Mr. President, abusive use of emergency spending is another gimmick applied in this omnibus spending bill, as well as in the other appropriation bills we've passed. Last year alone, Congress appropriated $35 billion for so-called emergencies. This year again, over $24 billion of emergency spending was appropriated. Since 1991, emergency spending has totaled over $145 billion. Most of these ``emergencies'' were used to fund regular government programs, not unanticipated true emergencies. Emergency spending is sought as a vehicle to add on even more spending priorities and thus to dodge fiscal discipline because emergency spending is not counted against the spending caps. This has gone too far. We need a better way to budget for emergencies. Most of this spending can be planned within our budget limits. Even natural disasters happen regularly--why not budget for them, as I proposed in my budget process legislation. Mr. President, while I agree ``advance appropriations,'' ``advance funding'' and ``forward funding'' are not uncommon practice here, it does not mean they are the right thing to do, particularly when these budget techniques are used to dodge much-needed fiscal discipline. In the past five years, ``advance appropriations'' have increased dramatically, jumping from $1.9 billion in FY 1996 to $11.6 billion in FY 2000, an increase of $9.7 billion over five years. This year, at least $19 billion was advanced into FY 2001 and outyears which will create even worse problems for us next year and in the future. I understand the upward spending pressure the Congress is facing this year and in the outyears. But I believe we should, and can, meet this challenge by prioritizing and streamlining government programs while maintaining fiscal discipline. We can reduce wasteful, unnecessary, duplicated, low-priority government programs to fund the necessary and responsible function of government. But we need a Biennial Budget, as Senator Domenici recommends, to give us time to do this. Instead of streamlining federal spending, we have thrown in more money to please big spenders without the needed analysis to ensure the spending will help us solve problems. Like last year's bill, this bill looks like a Christmas tree full of pork projects. Many are added in the last minute negotiation. But we don't know exactly what they are and how much they cost, because again we have not been given enough time to review this bill. Here are a few examples as identified by Senator McCain: An entirely new title is included in the legislation during last minute negotiations, the ``Mississippi National Forest Improvement Act of 1999,'' which had not previously been considered in the previous Senate or House bills. A half million dollars is added for the Salt Lake City Olympic tree program. It earmarked $2 million for the University of Mississippi Center for Sustainable Health Outreach and $3 million for the Center for Environmental Medicine and Toxicology at the University of Mississippi Medical Center at Jackson. An earmark of $3 million is added for the Wheeling National Heritage Area and $3 million for the Lincoln Library. It earmarked $2 million for Tupelo School District in Mississippi for technology innovation. It includes an earmark of $3 million for the Southwest Pennsylvania Heritage Area. It also earmarked $1 million for the completion of the Easter Seal Society's Early Childhood Development Project for the Mississippi River Delta Region and $1 million for the Center for Literacy and Assessment at the University of Southern Mississippi. It also includes an increase of $3.6 million for Washington State Hatchery Improvement. As the result, we've ended up spending much more money than we should have. My biggest fear, Mr. President, is this omnibus spending legislation may allow Congress and the President to spend some of the Social Security surplus by not imposing an adequate across-the-board spending reduction. Even counting all the ``directed scoring,'' ``advanced appropriations,'' every penny of the $14 billion on-budget surplus and other budgetary gimmicks, it is estimated that Congress could still dip into the Social Security surplus by nearly $5 billion. To fill that gap we need to reduce government spending by 0.97 percent across-the-board. But the agreement reached between congressional leaders and the White House allows only a 0.38 percent reduction which would result in $1.3 billion savings. Clearly, this is done just for face-saving reason, and will not ensure that the Social Security surplus is protected. The proponents of this omnibus bill may quickly point out that there are offsets to fund the new spending. But we all know most of the offsets are simply gimmicks. The best example is a $3.5 billion transfer from the Federal Reserve surplus to the Treasury. As you know, there is nothing new about this proposal and it has been around for quite a while. In the past, Chairman Greenspan called this transfer of the Fed's surplus to the Treasury ``a gimmick that has no real economic impact on the deficit.'' Because it is just an intra- governmental transfer that would not change the government's true economic and financial position. Other offsets such as a one-day delay in pay for our military and civilians will cause enormous financial hardship for millions of American families who depend on the regular paychecks to pay their mortgage, daycare for their kids, and other priorities. Many small businesses and contractors can be adversely affected by this offset as well. Again, this has proven that the victims of Washington's spending spree are the American taxpayers. Mr. President, there are many provisions in the omnibus appropriations bill I support, such as the BBA Medicare fix which includes reinstatement of Minnesota's DSH allotment, the State Department Authorization which includes payment of the U.N. arrears and my embassy security proposal, Home Satellite TV access and others. In fact I have worked hard on many of these proposals. However, I believe the dairy provisions and the general lack of fiscal discipline in the bill have far overshadowed the good provisions. Overall, it is a bad deal for working Americans in general and it is a bad deal for my fellow Minnesotans in particular. I therefore cannot in good conscience vote for this fiscally irresponsible legislation.

Mr. GRAMS

Mr. GRAMS. Mr. President, I thank the Senator from Texas and also the Senator from Kansas for their work on this issue. Mr. President, I rise today to speak in opposition to the bankruptcy homestead cap proposed as an amendment to the bankruptcy bill. I appreciate the fact that the sponsors of this amendment are attempting to curb abuse of the system, but I fear that in these difficult times for family farmers the homestead cap amendment could disproportionately impact struggling producers. I will remind my colleagues that the Senate recently unanimously approved extension of chapter 12 of the bankruptcy code, which in part allows farmers to stay on their land if they are able to make rental payments to creditors. Just as farmers have needed extension of chapter 12 to weather the current economic downturn, they also need an adequate bankruptcy homestead exemption that will protect their homes and livelihoods from foreclosure as well. I am aware that the Sessions/Kohl amendment exempts ``family farmers'' from the homestead provision, but many farmers will not qualify because of off-farm income earned by the family. This off-farm income has become necessary for survival for may farm families, and as long as such families are not eligible for the exclusion, I must oppose the amendment. As the Senator from Texas mentioned, in Minnesota, the current homestead exemption is $200,000 property value and 160 acres. This is a reasonable, time-tested level of protection. We must remember that this property is not merely where the farmers make their home, but also where they earn their living. Congress recently passed $8.7 billion in emergency farm assistance to help family farmers continue the tradition of producing America's most basic needs, and we should not simultaneously undermine the position of these same farm families by denying them important bankruptcy protections. Again, I know that the amendment sponsors are trying to stop abuse of the system by those who have irresponsibly accumulated debt, but I am afraid many hard working Minnesota farmer who are barely covering their families necessities may be adversely impacted. I urge my colleagues to support the Hutchison-Brownback amendment allowing states to affirmatively opt out of the cap on the homestead exemption. I yield back the remainder of my time.

Mr. GRAMS

Mr. GRAMS. Mr. President, I rise to express my support and appreciation regarding actions taken at United Healthcare that clearly demonstrate to me that proposed congressional action in the area referred to as ``patient's rights'' can be best handled by the marketplace. Yesterday, United Healthcare announced they will be changing the way they manage care in their health plans by giving physicians the final say in determining what course of treatment their patients will receive. In citing the reasons for the change of policy, United noted the savings resulting from their $100 million review process do not justify continuing it. United Healthcare is the second-largest health insurer in the nation and I believe their actions signal an industrywide realization that their review process may be saving them less than they thought. According to United Healthcare, 99 percent of their claims are approved despite an exhaustive review process. While this raises the question of exactly why the federal government needs to disrupt the entire health system by getting involved with one percent of health care claims, it also demonstrates our current private-sector health care providers must respond to consumer concerns or lose their customers to health providers that do. Of course, United Healthcare will still have some review process and require physicians to notify them when a patient needs an expensive procedure or requires hospitalization. This is clear in all of our interests to ensure the appropriate treatments are considered. We should trust our physicians, but with the rapid advancements made in health care every day it is reasonable for us to have a team of experts review all the latest treatments, devices and pharmaceuticals. Clearly, this is an area where health plans are, and should be assisting physicians and ensuring quality health services are offered appropriately in their facilities. By changing their review process, United Healthcare will reduce its medical monitoring staff by 20 percent and re-focus the remaining staff on Care Coordination efforts. This saves money for the plan which in turn saves money for consumers through lower premiums. I believe it is a significant step in the right direction, proving once again, that market forces and demands are productive and responsive. Government solutions usually distort market forces and end up with poorer services at higher costs. I should like to be clear about my support for the Patient's Bill of Rights Plus legislation I cosponsored and voted for--it is still needed because it addresses other important issues. What this change of practice announced by United Health does signal is the potential for us to reach a reasonable conclusion to negotiations underway between the House-passed Patient's Bill of Rights and the Senate-passed Patient's Bill of Rights Plus, particularly on the contentious issue of health plan liability. Mr. President, it is hard to overstate the importance of this announcement from United Healthcare and I felt it was imperative someone in Congress acknowledged private market forces for positive change far outweigh a government imposed remedy.