Judd Gregg

Mr. GREGG

Mr. GREGG. Mr. President, I ask unanimous consent that the Committee on Commerce, Science, and Transportation be authorized to meet on Thursday, July 24, 1997, at 9:30 a.m. on management and program weaknesses at NASA and National Science Foundation.

Mr. GREGG. Mr. President, I ask unanimous consent on behalf of the Governmental Affairs Committee Special Investigation to meet on Thursday, July 24, 1997, at 10 a.m. for a hearing on campaign financing issues.

Mr. GREGG. Mr. President, I ask unanimous consent that the full Committee on Environment and Public Works be granted permission to conduct a business meeting Thursday, July 24, 1997, at 9:30 a.m. hearing room (SD-406)

Mr. GREGG. Mr. President, I ask unanimous consent that the Committee on Foreign Relations be authorized to meet during the session of the Senate on Thursday, July 24, 1997, at 9:30 a.m. and 11:30 a.m. to hold hearings.

Mr. GREGG. Mr. President, I ask unanimous consent that the Committee on the Judiciary, be authorized to hold an executive business meeting during the session of the Senate on Thursday, July 24, 1997, at 9 a.m. in room 226 of the Senate Dirksen Office Building..

Mr. GREGG. Mr. President, I ask unanimous consent that the Committee on Labor and Human Resources be authorized to meet for a hearing on Higher Education Act Reauthorization during the session of the Senate on Thursday, July 24, 1997, at 10 a.m.

Mr. GREGG. Mr. President, I ask unanimous consent that the Committee on Labor and Human Resources Subcommittee on Public Health and Safety to authorized to meet for a hearing on National Institutes of Health Reauthorization during the session of the Senate on Thursday, July 24, 1997, at 2 p.m.

Mr. GREGG. Mr. President, I ask unanimous consent that the Select Committee on Intelligence be authorized to meet during the session of the Senate on Thursday, July 24, 1997, at 2:30 p.m. to hold a closed hearing on intelligence matters.

Mr. GREGG

Mr. GREGG. Mr. President, it is a pleasure to be joining with my colleague from Illinois today in this amendment to correct what is an obvious inconsistency, to put it in conservative terms, in American public policy. I think there is a general consensus now in this Nation that the use of tobacco is unfortunate, that we wish to discourage its use, especially amongst young people, and that as a government we are trying desperately to inform people of the harm of tobacco to their health and the addictive nature of tobacco and the fact that there is very little positive that comes from smoking tobacco. We have had innumerable Surgeon Generals, including the great Surgeon General Dr. Koop, point out this problem as a matter of Federal public policy. We now have a commitment by this administration, and I believe by this Congress, to try to change the manner in which tobacco is marketed in this country, especially to the young people, so that we can lessen the impact of this harmful addiction on America and especially on our young. Yet at the same time that we are doing this, at the same time that as a matter of Federal policy, as presented by the Surgeon General, as presented by the Congress, as presented by the administration, at the same time that we are pointing out as a matter of Federal policy that the use of tobacco is harmful and bad and it has a deleterious effect on health and a very dramatically negative impact on the financial situation of this Nation because of its costs in the area of health costs, at that same time we are subsidizing the capacity of the product to be grown. It makes no sense at all. This amendment will save $34 million, but it is hardly the money that is important here. It is the statement of public policy that is important. The fact is that, if this Government is going to subsidize the growing of tobacco at the same time it is claiming tobacco is a scourge on the health of this country, we are sending two messages which are totally inconsistent and inappropriate. Now, the insurance program, as it is presently structured, is a program which basically puts the grower of tobacco in a unique position, the position where essentially there is a no-loss situation where the Federal Government comes in and assures that the grower, whether tobacco grows or not, whether tobacco is brought to market or not, is able to recover the value of the tobacco. This type of a fail-safe situation makes little sense for any commodity, but it certainly does not make any sense for a commodity which has already been declared a detriment to the health of America and especially to the health of children. More importantly, it is not needed. It is not even needed. Tobacco is a very lucrative crop. In fact, compared to other crops, tobacco is dramatically more profitable than other crops. I have a chart which reflects that fact, which I will not subject you to because this floor gets enough charts, but essentially tobacco crops as a cash crop per acre generate approximately $3,700, whereas wheat, for example, on a per acre basis generates about $134 and corn on a per acre basis represents about $322. So tobacco is generating 10 times the value of corn and many times the value of wheat. It hardly seems a crop which is so lucrative would need to have a Federal insurance program to guarantee it, but we do have that program, and that program costs about $34 million a year. Thus, this amendment, which will put an end to that type of an insurance program, which is, first, not needed because the crop itself is viable on its own, regrettably, but it is viable on its own at such high value that it should not be protected by this type of insurance program; but, second, an insurance program which flies in the face of the public policy of the Government generally, especially public policy as stated by the Surgeon General, the President, and this administration, that that type of program should be ended. So this amendment ends it. It is about time we did that. It is certainly consistent with the direction which this Congress is moving and this Government is moving and the American people are moving relative to the use of tobacco and the harm that it is causing in the area of health in this country. I congratulate the Senator from Illinois for bringing forward this amendment. I am happy to join him in it, and I hope that the Members of the Senate will support it. I yield back the balance of my time.

Mr. GREGG. I appreciate the Senator from Illinois yielding and congratulate him on this amendment, on which I join him.

Mr. GREGG

Mr. GREGG. Would the Senator from Missouri yield for a question?

Mr. GREGG. Would the chairman of the Appropriations Subcommittee on Veterans Affairs, Housing and Urban Development and Independent Agencies agree that the Federal Emergency Management Agency should act in a swift manner to settle its account with the Rockingham County jail in Brentwood, NH? As the Senator from Missouri may know, the county jail sustained flooding of more than 3 feet of water during a storm this past October. The county has been looking to FEMA for reimbursement of 75 percent of the damage it usually covers when there is a disaster.

Mr. GREGG. Yes, the county has received roughly $150,000 from FEMA, but there is still about $178,000 outstanding. Most of the money paid to Rockingham County came only after a meeting this past March 3, which I hosted in my office with officials from FEMA and Rockingham County Commissioner Tom Battles. At that meeting, we were encouraged by FEMA that the outstanding balance would be settled within the next few months after some more flood mapping was conducted. With adequate time having passed and a new fiscal year on the way, it is only fair to Rockingham County and the State of New Hampshire that this issue be settled as budgets have to be structured. Mr. Bond. I would say that I do agree that FEMA should work very quickly on this. particulate matter research

Mr. GREGG

Mr. GREGG. Mr. President, if the Senator from Minnesota will yield for a question, I simply have about 3 minutes I would like to talk, and it has nothing to do with this amendment.

Mr. GREGG

Mr. GREGG. I think the Senator from Texas has probably been to Ipswich and may have visited this small plant. We appreciate his interest. I thank the Senator.

Mr. GREGG. Mr. President, I rise on a matter that is not related specifically to this bill, although it has to do with the issue of national defense and technology, and that is the issue of our probe which is now on the planet Mars. What an exceptional thing it is, as we watch the TV pictures come back as they analyze the rocks of Mars and determine that this planet is a fascinating place. We set history and we can investigate the universe. All of this is possible because of a product made in New Hampshire. I wanted to congratulate the Warwick Mills of New Ipswich, NH, a small company started in 1888. NASA decided they wanted to land this probe on Mars, and they had to go to the Warwick Mills to be able to do it. It is one of the few places in this world that still weaves in the old- fashioned way. They were able to put together this fabric. This is a picture of the probe on Mars and the fabric that allowed the probe to set down on Mars without being damaged, and it allows it now to wander around the planet Mars and learn about the history of that extraordinary planet and to further the knowledge of man dramatically. So from a little mill in New Ipswich, NH, started in 1888, using old- fashioned weaving machines, we sent the material to Mars. So on behalf of the State of New Hampshire, I congratulate this little firm that is doing such an extraordinary job to advance the knowledge of America and the world. I yield back my time.

Mr. GREGG

Mr. GREGG. That is under the Daschle plan.

Mr. GREGG. When we were coming up through the ranks, if you had seven to eight kids, which is a lot of kids, you would need an income probably of $70,000 to $80,000. Both parents would have to be working to maintain those families. In that bracket, you would be paying an effective rate of 58 percent on your income tax. And another FICA tax on top of that works out to be an effective rate of 73 percent on the additional earnings.

Mr. GREGG. If you happen to have a large number of kids, and I think the Senator from New Mexico may have a few children----

Mr. GREGG. I am delighted to yield.

Mr. GREGG. I thank the Senator from Delaware. I wish to join with the many Members of this Senate who have congratulated the Senator from Delaware and the Senator from New York for bringing forward this bipartisan initiative, which is really rather extraordinary when you think about it. It is obviously an outgrowth of the fact that the President and the leadership of the Congress have gotten together on how to balance the budget and give a tax cut to working Americans. This bill is a product of that initial agreement which occurred in May. The fact it came out with almost unanimous support out of the Finance Committee is something that we should take very seriously as a Congress and especially as a people, in recognition of the fact that this is a bipartisan initiative. Now the leader of the Democratic Party has come forward, even though a large--well, the entire Finance Committee membership of the Democrat Party voted for the underlying bill--the leader of the Democrat Party has come forward with a proposal as an alternative. I think a couple of comments need to be made about the specifics of that because it has some problems in the way it handles children and families with children. To begin with, it is a phased-in child credit. So, under Senator Daschle's proposal, it is not until the year 2000 that families get the $500 credit. In fact, if you have a child who is over the age of 12, you do not get any credit, any credit at all until the year 2002. Well, the practical effect of that is that there are going to be a lot of kids who outgrow the credit; the kids grow up; they get older. The credit will not be available. The families will not have a credit between now and the year 2000 if their children are under 12. It will be a phased-in credit. And if their children are over 12, they won't get it until 2002. If you have a child who happens to be a 12-year-old today, you are never going to get this credit under the--not the Democrat proposal, because the Democrats are supporting the underlying bill--under the Daschle proposal. It is pretty outrageous, really, to claim that that bill is more effective in addressing kids than the bipartisan proposal when it does not even cover kids. It does not even cover kids who are over 12 years old until the year 2002. Equally significant is the practical effect of the way that they recover the credit from working families. Under the Daschle proposal, the effective tax rate of families earning between $70,000 and $80,000 that have a number of kids in the family would be 58 percent not counting the FICA tax. So the actual tax rate under the Daschle bill is 73 percent--73 percent for those folks in that income bracket. Now, there are a lot of working Americans today who have a fair number of kids who have to have both parents work to support them. And, in fact, unfortunately, one of the facts of America today is that many parents have to work simply to pay taxes. One of the spouses works full-time simply to pay the taxes on the family and the other spouse works to try to take care of the family. One is working to take care of the Government; the other one is working to take care of the family. If you have a number of kids and you are getting hit with a 73- percent tax rate, even though you may have a fairly high income with a fair number of kids, that tax rate essentially wipes out your income, wipes out not only the income of the spouse working for the Government, but it does a pretty good job on that spouse who is out there trying to earn for the family.

Mr. GREGG. I thank the Chair.

Mr. GREGG. That is exactly what happens, because the manner in which they recover the tax credit from people after they start to phase down the tax credit is a tax increase of significant proportions, well above the base rate of 28 percent.

Mr. GREGG

Mr. GREGG. Mr. President, I move to waive the Budget Act and ask for the yeas and nays.

Mr. GREGG. Mr. President, just to recap where we are, basically, the Senator from Arkansas has authored an amendment to end the ability to take the depletion allowance for mining companies for that part of their mining activity which occurs on public land. Now, let's understand the facts here. A mining company comes along and it buys the right to mine on public land for the value of, I think, $2.50 an acre. For example, in 1995, ASARCO bought 349 acres for $1,745, which had 3 billion dollars' worth of assets on it. Public land, public land. And then a Danish company came along, and for $275 bought 110 acres, which had 1 billion dollars' worth of assets on it. Then a Canadian company came along and spent $9,000 for 1,800 acres which had 11 billion dollars' worth of assets on it. That, in and of itself, is a bit of an affront to the American taxpayer. That is not what we are debating here. We are debating an even greater affront--an even greater affront--because after they bought this land for $2.50 an acre, they then go out and take a depletion allowance against that land. Now, it is not against the equipment they are using to mine the land. They can deduct that. They have a right to do that. No, it is a depletion allowance against land which is publicly owned, taxpayers' land. It is not their land. It is taxpayers' land which they bought for $2.50 an acre, and now they get to take a depletion allowance which costs $400 million over the next 5 years. Excuse me, what dinner party am I at? Is the Mad Hatter here? Is the Queen of Hearts here? What is this? We have the taxpayers first subsidizing an $11 billion, a $1 billion, and a $3 billion asset purchase which flows to these companies, and then we have the taxpayers subsidizing a depletion allowance which flows to these mining companies. And what does the taxpayer get back for all of this? $2.50 an acre. It is corporate welfare, corporate pork. The term can be applied at a variety of different levels. What it is, is wrong. It is wrong that the depletion allowance should be available for land which is public land that is purchased at these outrageously low prices. It doubles up the insult. It doubles up the insult to the American taxpayer. I strongly support the initiative of the Senator from Arkansas. I cannot understand how anyone who would believe that the American taxpayer deserves some modicum of respect would not also support this proposal. It simply is an attempt to try to correct just a small sliver of what is a very significant and inappropriate affront to the American taxpayer. It is costing us a lot of money, money that we should not have to pay. I heard somebody say, well, this is a tax increase. My goodness, how could you argue that? A tax increase? What we are doing is hammering the taxpayers, expecting the American taxpayer to pick up a depletion allowance on top of having already picked up a loss for having sold this property at a ridiculously low price in light of what the value of the asset being conveyed is. It is not a tax increase. What it is is an attack on the taxpayer. It should not occur any longer. The Senator from Arkansas is right in his amendment. I am happy to join him. I yield back the remainder of my time.