Judd Gregg

Mr. GREGG

Mr. GREGG. Mr. President, I rise today in support of the original MedGuide provision that was included as part of the Agriculture Appropriations bill. The Agriculture Appropriations bill contained the language on the MedGuide issue that was overwhelmingly passed by the Labor Committee by a vote of 13 to 3 during the markup of S. 1477, the FDA reform bill, in March. This provision in the Agriculture bill required the Secretary of HHS to request, within 30 days after enactment, that national consumer, industry and practitioner groups work together to develop a plan for the distribution of high quality, helpful consumer information about prescription drugs, such as adverse reactions and product combination problems. It provided the opportunity for the private sector to continue building on its marked successes in this area over the last several years. By FDA's own survey, the percentage of consumers receiving substantial written information about their prescription increased from 32 percent to 59 percent between 1992 and 1994. There is no reason to believe that pharmacists will either suddenly begin to perform this task more poorly, nor any reason to think that the goal of 75 percent by the year 2000--shared by FDA and professionals practicing pharmacy-- will not be voluntarily achieved, without FDA getting involved. It called for an approach to public policy that is flexible, sufficiently specific and comprehensive so as to meet consumers' needs, and neither promotional nor so technical that it is of no use to the consumer. The information has to be legible, comprehensible, and accurate. This amendment did not do one thing--it did not allow the FDA to expend its limited funds to implementing its MedGuide regulation. The FDA cannot afford diversions from their mission to review and approve quality, and often life-saving, products. This is clear from the numerous hearings we have held, reports that have published, and complaints we have heard from the FDA itself--``Give us more resources. Give us more time to do our job.'' The FDA regulation would require every pharmacist to provide specific information to patients each time they fill a prescription. While FDA claims the regulation is voluntary, if 75 percent of consumers are not receiving the formatted information by 2000, the regulation becomes mandatory. Well, there is nothing voluntary about this regulation--pharmacists will no longer be able to craft written information to meet individual patients' needs if this regulation is imposed. There is also nothing voluntary about imposing a $121 million cost annually on pharmacists and manufacturers, according to the FDA's own calculation. FDA's calculation determined the program would cost individual pharmacies at least $1,500 to comply, equaling $106.7 million a year. Manufacturers are expected to spend $5,000 to $12,000 per medication guide developed, or at least $14.4 million annually. And who do you think those costs will be passed on to? The consumer. One must also consider that the practice of pharmacy has always been regulated at the State level--FDA may not regulate the practice of medicine. FDA only has product labeling authority, not the accompanying information. There is also a great deal of concern that this regulation also has not taken into account the expanded liability it imposes on pharmacists. Pharmacists not only have the ability to tailor information to suit the patient, they are able to phrase--and sometimes rephrase--information in a way that the patient understands. Going to a one-size-fits-all information standard will defeat this important purpose of pharmacy as the pharmacist will be prevented from serving as the learned intermediary. The provision in the underlying bill would have had the same goals as MedGuide: 75 percent consumer receipt by the year 2000; a way to assess the effectiveness of any consumer information distribution system; and a measure of the quality of the information being distributed. This provision would not have simply cut the FDA out of the process-- instead, it provided a 120-day stay of execution from the FDA rule. After that, if the private sector failed to respond, the Secretary of HHS could proceed with the detailed regulation proposed by the FDA. This regulation is not only a poor priority for the Commissioner--he has stated it is his No. 1 issue--and an inappropriate use of limited funding, it is also beyond the general authority of the FDA. While we all would agree that it is important that the consumer get the information they need, as their circumstances call for, I don't understand how the FDA can believe it is somehow more capable of telling Americans what they must, and cannot, know than the pharmacists serving consumers on a daily basis. Mr. President, I think the FDA has enough to do already without breaking new regulatory ground, especially where the private sector is already rising to the task at hand.

Mr. GREGG

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

Mr. GREGG. I appreciate the courtesy of the managers of the bill in allowing me to proceed in morning business.

Mr. GREGG. Mr. President, I rise to talk a little bit about an issue that is absolutely critical, obviously, to the future of America. It is on the minds of many. And that is the issue of retirement of Americans and how we are going to pay for it. This has become increasingly an issue that is receiving some visibility in a substantive way verses in a political and demagogic way as a number of proposals have been discussed over the last few months regarding the issue of how we are going to pay for retirement for our senior citizens who are presently receiving funds from the Social Security fund or from private pensions and also for those who are headed toward some sort of retirement benefit. The reason that the visibility of the issue has increased is probably because the largest generation in America, in American history, I guess--the postwar baby boom generation--is starting to see the whites of the eyes of retirement coming over the hill and it is necessary for the postwar baby boom generation to focus on how its retirement years are going to be paid for. It is a very big issue, and it is one that needs to be addressed. This Republican Congress has actually passed a series of major proposals in the area of retirement security. Most of these major proposals were included in last year's Balanced Budget Act, and they were aimed at making pensions more available and at making personal savings more attractive and at improving the Medicare system. The President, regrettably, vetoed that proposal, which would have gone a long way toward assuring solvency specifically of the Medicare system. Perhaps as a result of that veto, the White House has become concerned about their culpability in not addressing the important issue of how we protect the retirement systems of this country, especially Medicare, which, we have heard from the trustees, is going to go bankrupt in the year 2001, potentially 2000. And so, as a result of that, the President has now put forward a proposal. Of course, he puts forward a proposal on something almost every day, recognizing that most of it is not going to become law or enacted. Although it is really political in nature, it is still at least of some value in that he has put forward a proposal called the Retirement Security and Savings Act. The congressional leadership on the Democratic side of the aisle has also decided to put forward some proposals in this area called pension security bills--well, they were pension security bills. In May of this year, they put them forward and they were part of their families first agenda. My concern is that many of these ideas which are being initiated on the other side of the aisle not only miss the mark, but they actually aggravate the problem because, for the most part, most of these ideas come out of the position of big government resolves problems and it is to the big-government approach that we should turn in order to address the problems. They are ideas born in the 1930's, which should have died with the passage of the Berlin Wall but, unfortunately, continue to engender themselves on the other side of the aisle. However, at the same time that those ideas have been put forward, during the past year myself and Senator Simpson have been holding a series of coordinated hearings on the Nation's retirement policy, both in the Finance Committee and in the Labor Committee, where we chair the various subcommittees that are charged with this responsibility, I being responsible for the Committee on Aging, and he is responsible for Social Security. So we have examined the current status of the Nation's public and private retirement system and the nature and magnitude of the challenge that system confronts as the baby boom generation moves towards retirement. We have learned some important facts that provide a message of perspective on the current retirement security debate. These facts tell us that the scope of the problem we confront is enormous and, if anything, the American public is underestimating the problem and is underanxious about the problem. Fact No. 1 is that the Social Security system presents a major problem in its present structure. Within 35 years, our country as a whole will have more senior citizens than Florida does today. Think about that. In 35 years, the average age of the American population generally will exceed today's average age of Florida's population. This wave of senior citizens will have a life expectancy 8 years longer than current seniors, which is good, obviously, but it also creates issues. Social Security is terribly unprepared to cope with this change in demographics. The program operates on a pay-as-you-go basis, which works all right today when about 4.5 workers support each retiree, but by the year 2030 the ratio will have fallen to 2 workers supporting each retiree, and the program will simply collapse. Absent reform, nearly $8 trillion of unfunded liability exists today--$8 trillion. That is more than the national debt. That is what the unfunded liability is. Tomorrow's workers and the economy will never be able to withstand the taxes necessary to sustain an unreformed program once the baby boom generation begins to draw its retirement. Fact No. 2: Our private pension regime presents a major problem. Keeping in mind Social Security's future, it should be considered a national crisis that just half of today's full-time workers participate in employer-sponsored pension plans or that 45 million Americans have no access to a private pension plan or that over the past decade corporate contributions to pension plans have declined by 50 percent. These sad facts are driven by the even sadder state of the pension access in smaller businesses and for lower income workers. We passed a law just a few weeks ago which will correct some of this problem, but it does not solve all the problem, and it has not been signed by the President so we do not know that it will be agreed to. Today only 15 percent of the firms with less than 25 workers offer pensions to their employees. Whereas almost 80 percent of today's work force earning over $50,000 have pension plans, only 44 percent of the workers earning between $10,000 and $25,000 have pensions, and only 9 percent of those earning less than $10,000 have a pension. While many likely theories underlie our Federal pension system regime, the fact remains that the marketplace's reaction to it is failing our workers. Proposals that we did pass just in the last few weeks will help alleviate this to some degree, but it will not correct the fundamental problem. Fact No. 3, personal savings presents a major problem. The typical working American retires with less than $10,000 of personal savings. Baby boomers now earning $75,000 a year, those doing well under the current pension statistics and expected to receive a typical employer- provided pension, would have to triple their current savings rate to maintain their current standard of living upon retirement. It is just logic that tells you this. The fact is, people today work for about 30 years. But because life expectancy has been extended, they also retire for about 30 years. So you cannot save just a few dollars while you are working and expect to have enough to cover you during your retirement when your retirement years are actually almost equaling your working years. The majority of Americans are very unprepared in the area of pensions. Americans do not save anywhere near the rate required to sustain themselves. The reasons for this likely vary--the triumph of consumerism over thrift, the increase in family tax burdens, the welfare state's culture of dependency, the burdens of repaying student or other loans which now exist at levels unheard of for prior generations--but the effects are all too real. We simply are not saving enough as a culture. These three basic facts concerning the three legs of the retirement stool--Social Security, private pensions, and savings--when viewed in combination, present a startling and disheartening picture. They also lead to some important lessons for judging the adequacy of any retirement security proposals the Congress may address over the next year. Lesson No. 1: We can no longer ignore the Social Security problems. We have a lot of faith in the common sense of the American people, at least we do in New Hampshire, and believe that the true root of their retirement anxiety is the fear that Social Security will not be there for them. They are right to be scared. Continuing to ignore Social Security reform because the program is now running a surplus is inexcusable. Retirement policy is long-term policy. We must allow the public adequate time to adjust their pension and savings activities to any Social Security changes we may enact. Every additional year of delay makes any change not only more Draconian but also less fair and less likely to succeed. Further, any reforms to Social Security should complement and reinforce the changes that must also be made to address today's savings and pension inadequacies. Those who champion ``retirement security'' but steadfastly ignore the Social Security problems not only mislead the American public but also now present a real danger to the retirement security of today's workers. Lesson No. 2: We must act to buttress the private pension and personal savings activity of Americans. While the need for Social Security reform has gained some national attention and numerous reform proposals have been made, Social Security is just one portion of our national retirement policy. We must also reform the other components with similar zeal and creativity. Just as the debate on Medicare was taken to a new level last year, with a general consensus developing that more individual choices should be offered, and just as the debate on Social Security is moving toward a new level with the discussion gravitating toward personalized savings options, the debate on employer-provided pension reform must move to another level as well. Our current pension structure does nothing for roughly half of our working population and neglects mainly the poorer workers at that. We do not need further tinkering, but we need new ways of thinking. We must also move with similar urgency and innovation to address the significant inadequacies in personal savings. While new tax incentives for savings seem to be the standard for the solution, increasing education on the need to save and changing the cultural attitude toward thrift may be even more effective and at a lower price in some regards. Lesson No. 3: We do not have time for political silliness. Our most basic lesson is that we must consider and deal with the totality of the problem. Any retirement reform proposal must be looked at through a comprehensive, long-term lens. The fundamental test for each private pension or personal savings proposal must be: Will it really expand pension coverage or savings? And a key test for Social Security reforms must be: Will they complement, not undermine, our pension and savings goals? Based on the facts I have just discussed, we do not have time to pass feel-good proposals that will end up making a bad situation even worse. We believe that many of the Democratic proposals would fail this test. While in theory they may work to give workers more pension security, in practice we know increased mandates, administrative expenses, and regulation causes businesses--and particularly small businesses--to opt out of pension activities. We have seen that in the defined benefit area especially. Some Republican proposals should be reexamined as well. If tax incentives like IRA's only cause shifting of savings and not new savings, a tax cut that offers working folks new money to save may be a better approach. It is important to keep in mind that the problems we confront result from an excess of good news. Americans are living ever longer, the Nation is prosperous, and we have come to expect a relatively comfortable retirement lifestyle. Our senior population is, as a whole, a generation that is in better financial shape than the other generations within the country. These expectations, however, are running head-on into unavoidable demographic facts. Thus, we believe the Nation's retirement structure, a public program designed in the 1930's and which has become a Rube Goldberg hodge-podge of tax and regulatory provisions built up over time, must be overhauled and restructured in light of the population pressures the Nation confronts. Continuing a process of incremental changes will continue failure. Outdated structures offer little hope for achieving what must be achieved. During the next few weeks, it is my intention to offer specific options which will lead to a comprehensive response to the problems which we have in the Social Security accounts, the pension accounts, and the savings area. I do not expect these proposals to be the end of the discussion but rather to be an effort to energize and promote the discussion. What is critical, however, is that we dedicate ourselves to the fact that we have to take action and we have to take it within the context of the next Congress. During this election year, when many politicians are putting their heads in the sand on this issue, we cannot afford that type of action. As we go into this election cycle, there should be a significant national debate and discussion of just what we are going to do in the area of retirement security. Mr. President, I yield the remainder of my time and I suggest the absence of a quorum.

Mr. GREGG. Mr. President, I ask to proceed as if in morning business for a period of approximately 10 minutes.

Mr. GREGG

Mr. GREGG. Mr. President, this amendment deals with the sugar program which, over the years, has been debated at considerable length on this floor. It does not deal with the issue of the price of sugar, which is outrageous and the manner in which it is maintained at almost 10 cents more than the world price. It does not deal with the fact that there is a $1.4 billion tax which is basically assessed against the American consumer as a result of the sugar program. What it does do, however, is deal with the issue of those instances, rare--in fact, I doubt that they would occur often--when someone defaults on their loan on sugar.

Mr. GREGG. Mr. President, in light of the position of the Senator from Arkansas, I am especially appreciative of his courtesy. The proposal is outlined on this yellow sheet. Somebody from one of the sugar-producing States accused me of yellow journalism, but I hope the Members of the Senate will take time to review the sheet. It essentially says the sugar program and producers will be put on the same level as students, veterans and homeowners who, when they default on a loan to the Federal Government, are personally responsible to pay it. Under the program, as currently structured, that is not the case. I could have offered an amendment which would deal with the essence of the sugar program in the pricing policy, which is this outrageous ripoff of the American consumer to the extent of $1.4 billion. But rather than do that, I have limited this to the issue of liability in the area of a sugar processor who fails to repay their loan. And it only applies to sugar processors with more than $15 million of annual sales. Therefore, I think it is a very reasonable amendment. And I would appreciate the consideration by the body.

Mr. GREGG. Mr. President, I ask unanimous consent that the parties involved in this amendment be given 2 minutes equally divided to present the terms of the amendment.

Mr. GREGG

Mr. GREGG. I send an amendment to the desk.

Mr. GREGG. Mr. President, I yield the floor. Amendment No. 4968

Mr. GREGG. Mr. President, I ask for the yeas and nays on my amendment in the second degree.

Mr. GREGG. This is the same as the underlying amendment, but it changes the amount that is required of processors to have recourse on from a $10 million threshold to a $15 million threshold. After that, it is a more lenient amendment than the first, if we presume we are requiring people to pay back loans. It does not, I think, aggravate the situation and should not from the standpoint of my colleagues who feel differently on this amendment than I do. I offer it to protect my position in the batting order here. I make one additional point. There was a point made on the other side, and this is, really, ancillary to the overall debate but needs to be responded to. There was a point made on the other side that the Sugar Program as presently structured actually causes a net ``infloat'' of the Treasury because this is an assessment process. However, if you take into effect in the calculation the cost to the Federal Government of having to buy sugar for products which it uses and food stamps and military feeding and child nutrition at the inflated rate we must pay because the Federal Government is a fairly large consumer--also as I mentioned, and I suspect ad nauseam for my colleagues, the price here is dramatically more than the price the market would be were this a market-oriented program versus price-control program. GAO has advised us the cost to the Federal Government, by letter of July 18, the cost in 1994 to the Federal Government for purchasing products which had inflated prices due to the cost of sugar was approximately $90 million annually. So that exceeds, by, I think, a factor of three, what is alleged to be the positive cash flow of this program to the Treasury. Let me read the operative sentences: In 1994, total expenditures on food were approximately $647 billion. Of this amount, approximately $42 billion was government expenditures for food purchases and cash transfers to consumers for food purchases. This represented 6.5 percent of all domestic food expenditures. Applying this to the $1.4 billion cost of the sugar program, we estimate that the government's additional cost of purchasing food and providing the level of food assistance it delivered in 1994, was approximately $90 million. Mr. President, I ask unanimous consent this letter be printed in the Record.

Mr. GREGG. I certainly appreciate the eloquence and the aggressiveness and obviously the effectiveness of the Senator from North Dakota and the Senator from Idaho in defending the sugar program as it impacts their sugar beet growers who, in most instances, I suspect--I suspect in all instances--are very hard working, farm community votes. However, the sugar program itself is structured in a way that it benefits a lot of major corporate farm activity, and that farm activity, as I mentioned before, is extraordinarily expensive to the American consumer in an unfair and unjust and unmarket-oriented way. The argument on the other side appears to have fallen into a few categories. Let me try to respond to them in some sort of argument. The first argument is that this amendment would eliminate the program because any processor doing more than $10 million in business would be out of the program. No, that is not true. I think that is simply not true. It would say that any processor who generates more than $10 million in annual sales would have to pay their loans back--just like a student, just like a veteran, just like a homeowner. Now, there was some representation that we do not collect veterans' loans and maybe they are an outright gift. I do not think so. I think most veterans pay back their loans, but if they are not paid back, the Federal Government has the right to go after them individually. The same thing of a student. If a student does not pay back his or her loan--it happens a lot, unfortunately--the Federal Government has the right to collect that. Of course, in the homeowner's situation, that is a collateralized event. The Federal Government takes the home, sells the home, but if there is a deficiency, in other words, if there is a difference between what that home is sold for under foreclosure and what the note is paid out for and the note exceeded the foreclosure price of the loan, the individual remains personally responsible for that amount. What we are suggesting is that a $10 million processor as a consortium, as a co-op or as a manufacturing cooperation, the $10 million processor should have to be liable also just like the student is, just like the veteran is, just like the homeowner is for that loan. So the program is still very much available. It is available under approximately the same terms and conditions relative to default and recovery that a loan to a student is, that a loan to a veteran is, and that a loan to a HUD recipient of a home ownership loan is. You have to pay the loan. You have to pay back the Government. That is all we are asking. So the program is very much vibrant and alive. To reflect the fact that there is a sort of inherent contradiction in this debate that I hear from the other side, the position of the other side, on the one hand, they are saying this proposal, which is to allow people to borrow the money but to have to pay it back, versus borrow the money and then if they decide they do not want to pay it back they can just turn over their sugar to the Government--that this proposal is going to have a disastrous, debilitating, totally scorched earth effect on the farm program; and then I heard that nobody has ever defaulted, or if there has been a default they sold the collateral for more than the loan was worth. So why is this such a terrible event? Why is it such a terrible event to make it a matter of public policy that people who borrow money from the Federal Government should pay it back? I guess it is a terrible event because it happens to be perceived, I think, as a threat to the sugar growers and the sugar processors. They maybe see it as a camel's- nose-under-the-tent approach to the issue of their $1.4 billion subsidy which they are taking the American consumer to the cleaners with. But, as a practical matter, the debate on the other side of this issue has defended the position I have proposed in this amendment, because they have stated accurately that there have been no defaults that would have created recourse beyond the collateral, and, therefore, why should it matter to the industry if they find themselves subject to recourse loans? Especially when you have an Agriculture Department that is controlling the importation of sugar so it keeps the price of sugar 4 to 5 cents above what the loan price is? I mean, really. It is like going into a blackjack game and saying, ``You have to deal me both an ace and a jack. If you do not deal me the ace and the jack, I am not going to play.'' In this case we are going to give them the ace and the jack, I guess. But it makes no sense, that if they should, by some strange coincidence end up losing, they should not at least expect the Federal Government should be paid back. It is hard to believe there is a scenario where under the present scenario they would lose. As long as the Department of Agriculture is going to keep the price 4 cents or 5 cents above the loan price, how do you ever end up with the collateral being less than the loan? It is pretty hard to see that fact pattern occurring. But I am told this amendment devastates the program. How does it devastate a program when the defense of the opposition has been that there has never been a default, and when the numbers, on their face, speak for themselves that if there were a default, there would not be any recourse? No, I do not think it devastates the program. It does not affect the program at all. That was my point when I first started this. I said, ``Gee, I would really like to do something about this program but I know I cannot win. But let us at least get ourselves on some sort of even keel relative to the American taxpayer and relative to fairness. If we are going to say to the homeowner and the student and the veteran you have to pay your loans back, let us say to the processor you have to pay your loan back, too. That is the purpose of this.'' So I do not think there is any substance to that argument. I think the substance of it was undermined by the presentation of the defense. To the effect there was a substantive point made in the opposition, it went to the issue of this price stability, which was specifically stated by the Senator from North Dakota and clearly implied and alluded to by the Senator from Idaho. Essentially, the theme of that position was that if you do not have price stability in sugar, then you are going to have up-and-down years, you are going to have years when the price will go down, when there is dumping, and years when the price will go up. So the idea is to have 23 cents or 22 cents all the time for sugar, even though the world market price is 13 cents. Granted that may be a dump price, for all I know. It may not be, but it could be a dumped price. But there is clearly a heck of a lot of difference, there is a big difference between 22 cents, 23 cents, and 13 cents. So somewhere in there is the real price of sugar one presumes, between those two numbers. It is pretty obvious the American consumer is paying a lot more than the real price, if the world dump market is 13 cents. So, if that is the case, if the purpose here is to maintain a stable price for sugar, if that is the real gravamen of the argument, and that price always has to be 23 cents or 22 cents--and why is that number picked? That number is picked because the loan price is 18 cents and they do not want anybody defaulting on their loan. If we apply that logic to all the commodities made in this country: All right, let us see, now. A couple of weeks ago my son bought a MacIntosh computer. I bought it for him for his birthday. The price of that computer, as I recall, was somewhere in the $1,500 range. It was a pretty expensive item, but it was for schooling. It seemed like a good investment. His sisters can use it. All prices of all computers should be $1,500--right? The theory of the sugar program is the price for a commodity should be the same price at all times, because the prices might go up and the prices might go down; if you want to maintain stability--we have a lot more people working in the old computer industry in this world, in the Apple computer industry, I suspect, than make sugar. I bet there are probably more people that work for Apple Computer than produce sugar. What has happened to Apple computers because they have not had a Department of Agriculture fixing the price of that product? The prices went down. I found out a few days ago I could have bought the same computer I bought a few months ago for $400 less, because there is something called a price war going on in the computer industry. And, worse than that, for the folks at Apple, they are in serious trouble. They have had to lay off thousands of people, because their product was not able to maintain the employment. And the prices of computers and other computers that have been brought on the market that have made that Apple computer, which is a heck of a good computer, I think-- especially the software in it--be not as competitive with whatever the appropriate other computer that is competing: Dell, AST, Gateway, Digital. Digital is a great computer, by the way--made in New Hampshire. The point here, of course, is: It is called a marketplace. It is called America. It is called a market system. It is called capitalism. It is called ``what made this country great.'' It is called competition, worldwide, sometimes. Take another little commodity called cars. Shall we fix all Chevrolets at the price of Chevrolets sold in the year 1979 or 1985? We could, I suppose. Then we would not allow the Japanese to import to compete. I think we went through that, did we not? That is why the Big Three had such a tough time, because their quality went down because they did not have the competition. Prices stayed up. Then, when they did get the competition, it took them a while to turn around. Of course, with American know-how they did it pretty quickly, didn't they? Now you have the most viable and energized car producers in the world, and they are American again. For a while, of course, we had a huge Japanese threat to our industry, but we responded. Are we to say that the sugar growers in this country would not be able to compete? I do not know, I guess that is exactly what we are saying in this plan. But, essentially, this concept of stable prices, which has been alluded to specifically by the Senator from North Dakota and clearly highlighted or addressed by the Senator from Idaho, is another term for non-market-place economy. It is another term for price fixing. Price fixing does not benefit the consumer. It does not benefit the marketplace. It benefits that small group of people who are able to benefit from the fixed price which, in this case, happens to be a very small group of sugar growers, and it is extremely expensive to the American economy. There was a statement that there are no tax dollars at risk; the taxpayers pay nothing. Well, if you say that the dollar that a taxpayer pays in taxes and a dollar a taxpayer takes out of his wallet to pay for sugar does not come out of the same wallet, then I guess taxpayers are not impacted. If the taxpayers are some mythical beings out there who don't go to the marketplace and buy food then, yes, there is no impact on the taxpayers. But if the taxpayers happen to be real, live Americans who go down to the grocery store and buy food with those dollars that are left over after the Government takes their money for taxes, well, then it does impact them quite a bit, because they are paying somewhere around twice the going rate for the price of sugar. They are paying $1.4 billion a year more to buy that sugar than they should have to. But this amendment does not address that issue, that outrageous issue which I would love to address. Unfortunately, I cannot get the votes to address it. But this amendment does not address that issue. This amendment addresses the fact that these are loans that do not get paid back if they go bad. Granted, it may never happen. It may never happen that the Agriculture Department is able to manipulate, through controlling imports, something that comes close enough to the loan price so that there never is a loan that goes bad. But there ought to be a statement of policy, at least, that this Congress expects the $10 million processor to at least be as liable for his or her loans or its loans from the Federal Government as we expect the struggling student, the veteran and the homeowner. There were a couple of ancillary issues that were raised that I think need to be addressed. Maybe I already addressed them. I was even more thorough than I thought in my statement, so I yield back the remainder of my time. Mr. COCHRAN addressed the Chair.

Mr. GREGG. Mr. President, I ask for the yeas and nays.

Mr. GREGG. I thank the clerk for reading the amendment. I did want the whole amendment read so it would be understood. It is an amendment which on its face says, as I stated, if somebody is going to borrow from the Federal Government, even when they are getting twice the price for their product they should be getting, if somebody is going to borrow from the Federal Government, they ought to pay the Federal Government back. Now, some will claim they can take the sugar and then the Federal Government can sell the sugar. That is true, but if there is a difference, the Federal Government eats the difference. There is no reason the Federal Government should be put at that risk. They are not put at risk for students, veterans or homeowners, so we should not be put at that risk for sugar growers simply because they have the capacity to protect themselves in the legislative arena better than students, homeowners or veterans.

Mr. GREGG. I send the amendment to the desk.

Mr. GREGG. Mr. President, since it is 3 o'clock, this being the time I was advised to bring this amendment to the floor and at that time there was to be a time agreement, which appears now will not occur, I thought I would discuss my amendment and point out some of the problems with the sugar program and then make a decision later on as to whether or not I will offer it in this context or not. But essentially what this amendment deals with is the sugar program. For those who may be following this debate in some other venue other than this floor, because I know everybody who is a Member of the Senate understands the sugar program, the sugar program is the last vestige of gross corporate welfare in the farm community. In the farm bill that was just recently passed, there was a major initiative undertaken to try to put the farm community generally on a more market-oriented approach, although some arguments might claim it is even less market oriented. At least it was an attempt to have some forces brought to bear on what farmers would plant, how much they would plant of a certain commodity which would be something other than a decision made by a Government leader. It would be the marketplace. However, there still exists this sugar program which has just the opposite approach toward financing and growing and creating of sugar in this country. The sugar program, as it is basically structured today, is a classic, what can best be defined as a Marxist system of economics. Essentially, the Government sets a price for a commodity which far exceeds what the marketplace would set for that commodity were the marketplace allowed to work in its ordinary fashion, and then it requires the consumer to pay that price no matter what the consumer's interest may be. As a result, the growers of that product grow it, make a great deal of money and have no relationship between what they grow and what the market wants or what they grow and what the market wishes to pay. It is a classic definition of Marxism. In fact, this program is so outrageous that it costs the American consumer approximately $1.4 billion a year of subsidies to a very small cadre of very influential sugar growers. In fact, I think the number I saw was something like less than 70 sugar growers obtaining a huge percentage of the income from this program. This subsidy is a function of the fact that it costs about 23 cents a pound for sugar in the United States, whereas on the world market, it costs about 13 cents a pound for sugar. Think about that for a minute. It is hard to believe that an American product would cost American consumers twice what the world market is. You might expect that in the old Soviet Union. You might even expect it in Cuba today. But in the United States, for somebody to be paying twice the cost of a product that is paid by people in other countries for that same product when that product is fully fungible around the world is incomprehensible. It just runs against the whole concept of a market economy, of an American system, what the United States theoretically stands for in the international community, what we stood for years against the Soviet system and what has theoretically, at least, won the debate of international economics--something called market forces. If a commodity costs 10 cents or 13 cents in Brazil, or let's take a more industrialized state--although Brazil is a very industrialized state--say, Spain, Japan, or France, and that commodity, that item you want to buy costs 13 cents, in this case that is called a pound of sugar--if you wanted to make some chocolate chip cookies maybe or a cake--and in the United States, it costs 23 cents, you would say, ``Well, that can't be, that can't be. Why would that be?'' Why, in a country that professes a free-market approach to economics, an international world free market, would one commodity that we grow in the United States that is grown around the world and moves from country to country with fair ease, why would that commodity cost 10 cents more in the United States per pound than it does in some other reasonably industrialized nation? The reason is because the influence of the people who make all the money on this product is so great that they are able to set up a system which benefits a few at the cost of many. It is pretty much the last surviving system of this type of productivity in our country in the farm program area. There is still some of this, obviously, in the peanut area, and to a slighter degree, you can argue in the dairy area, but a much slighter degree. But clearly, sugar is unique in having this level of perversion of the marketplace for the benefit of a few at the expense of the many, at the rather significant expense, $1.4 billion of expense. You might think that people who would be getting a $1.4 billion extra price for their product beyond what the market usually bears or would reasonably bear, would think that they were satisfied, but that is not the case here. I suppose greed feeds on greed, and it is inevitable, if you have proven that you can be really greedy and successful, you can get even greedier. So this group of great troughers--by troughers, I mean porker, corporate pork--this group of magnificent troughers--these folks would win just about any contest at any country fair in the pork-producing category--decided that not only do they have to have a price that is almost twice the world price for the product, which the American consumer has to pay, they do not even want to have to pay off--when they borrow from the Federal Government to produce that product, should they by some unbelievable process lose money, they do not even want to pay it off. Not only do they want a product that is priced at twice what it is worth, but should they actually lose money producing a product that is priced twice what it is worth--it is hard to believe they might lose money--but should they lose money, they do not even want to have to pay it off. They have something called the Nonrecourse Loan Program. This is almost beyond belief. It is so egregious in its attack on all sensibility relative to the marketplace--a nonrecourse loan. If you are a student in the United States and you find yourself going to a school that costs you more than you can afford to pay from the summer job you have been working for the last 5 or 6 years, and it costs more than your parents can afford to pay because they cannot simply scrape together enough, because a college education has become so expensive, if you are a student and you borrow $1,500, $2,000 from the Federal Government, and you cannot pay it back, does the Federal Government say, ``That's OK, forget it, you don't have to worry about it''? No. The Federal Government requires you to pay it back. We do not do a very good job of collecting it. I admit that. We have to change our collection system. But to those people who are honest and sincere-- that is the majority of our American students--they have to pay their loans back. But not the sugar industry. No. The sugar industry, after ripping the American public off, after the $1.4 billion a year, after being the biggest porkers in America, they do not even want to pay back their loans. If you are a veteran, and you get a VA loan, have served this country--maybe you have even given blood for this country, maybe you are even a wounded veteran--and you get a VA loan, and you find that you cannot pay that loan back, does the American Government say, ``OK. OK. Forget it. We won't collect that debt''? No. It does not. It duns your VA benefits, probably garnishes them, takes them as payment even though you may not be able to afford it because you may have other expenses at that time. But do we say that to the sugar producers in this country? No. We do not. To the sugar producers, we say, because they have the power to demand it, ``If you don't want to pay your loans back, tens of millions of dollars of loans back, it's OK. Forget it. That's all right. The American taxpayers are already paying $1.4 billion to your industry. Why not pay a little bit more through a nonrecourse-loan process?'' If you happen to be a homeowner who borrows money through the HUD program, and you have your first home, and something goes wrong with your family finances, and the Government comes in and takes your home-- which might be similar to a recourse loan--does the Government stop there, to the nonrecourse loan? No. It does not. No. It does not. If there is a debt above the obligation that is available through the repossession of your home, the Government has the right--may not exercise it--but it has the right to collect that extra debt from your wages. So if you own a home, and through some real tragedy or some unfortunate situation your home is taken from you as a result of your not being able to pay back that debt--and it is a Government loan--the Government has the right to sell the home, and to the extent that the price of that home, as sold, does not cover the cost of your loan, and you personally are liable, you personally, you, John or Mary Jones, working down at the pizza store or working on an assembly line in Detroit or working at a computer shop in New Hampshire, you are personally liable for that loan. Is the sugar producer--even though his or her company may have borrowed millions of dollars--are they liable for that loan? No. They are not. No. They are not. It really is hard to believe that that would be the case in this economy, in this structure we would have that sort of situation. But that is the way it is. That is the way it is structured, as unbelievable as it may seem. I guess it survives because of the fact that it has what is known as logrolling. ``You scratch my back; I'll scratch your back.'' There are enough people producing this product in the country, although many of them are not very large compared to the big guys, that they all feel they have to protect the program and, therefore, everybody helps everybody else out. But it is pretty hard to defend this program under any sort of--you do not have to look through a magnifying glass to defend this, to look at this program, and see it is an outrage. You can take this glass of water, and put this on top of the program, and you would see that this program is just an unbelievable outrage on the body politic of the American consumer, and $1.4 billion a year in the process. Nonrecourse loans. Just imagine it. If you are a student you have to pay your loan back. If you are a home-owner, you have to pay your loan back. If you are a veteran who served this country, you have to pay your loan back. Even if it is only $1,000, you have to pay it back. If you are a sugar grower, processor, you do not have to pay it back. You do not have to pay it back. That is after you made the price of the product twice what it is worth. Pretty outrageous. ``Sweetheart deal'' I think is the term that most appropriately comes to mind. Corporate pork would be an understatement. There is some logic, I suppose, to say that small farmers need to be protected. Maybe you will hear small farmer stories. Well, maybe small farmers do need to be protected. And to the extent we have good stories about small farmers, I suspect there will be some nice sad stories told. But the fact is that the amendment I am going to offer is not going to affect any small farmers. It is going to affect farmers of over $10 million in sales. And that is not a small farm. This is not a small farm in New England, not small anyplace. And $10 million is a good many sales. So small farm stories are not applicable to this issue at this time, although certainly they will be raised. This issue, the issue of the sugar program, has been brought up on a number of occasions in this body. It has always been defeated. Any attempt to address the sugar program has been defeated. It was defeated last year even in the midst of major rewriting of the farm programs generally, as I mentioned earlier. Defeated a couple of years ago. It has always lost, but usually the amendments have been directed at substantive reform of the pricing mechanism. You know, this fact that you, the consumers, are paying 23 cents for a pound of sugar when your neighbors, maybe relatives in Canada, are paying 13 cents. So that has been the usual target of the amendments. That has been soundly defeated because the influences I mentioned of so many different groups growing this product around the country is so pervasive. So my amendment--which the recourse issue does not take on that core issue of pricing policy, although pricing policy certainly should be addressed. And I would be happy to do it if I thought I had a chance of being successful. But I know I do not. My amendment takes on the issue of recourse. As a practical matter nobody in this body should object to this, because, as I mentioned, the price of the product has been made so high that how can you object to the concept of having to pay back your loans when you are already getting such a huge subsidized price? Then if you compare the fact that you are requiring people to pay back their loans who are fairly large businesses--$10 million in sales--well, that is not too outrageous, not too outrageous, to require them to pay back their loans. So I am talking about really a peripheral amendment here. I have to admit to that. I wish it was more at the heart of the sugar program. I wish it went to the pricing mechanism. But you know, I accept reality. I cannot win that one. I got 35 votes last year, probably about the same this year. So what this amendment does--I hope my fellow Members of the Senate will take a look at it who voted against affecting the pricing mechanism. It does not address that. So all the sugar beet growers and all the sugarcane growers are still going to get their 23 cents a pound out of the American consumer. They are going to get their pound of sugar out of the American consumer. What they should not get, however, is this nonrecourse treatment that we do not give to students, we do not give to homeowners, we do not give to veterans. I mean, let us have some decency around here. Let us admit that we will let them go to the trough and maybe eat everything in it, but let us not let them eat the trough, too. It is getting a little outrageous. So that is the purpose of this amendment. And I regret that the context of offering this amendment puts me in a difficult position, because I understand that I am not going to be protected on second- degrees, and I understand I am not going to be protected on time. I will say this, however, that I do think this is an important issue to vote on, that we will vote on this issue, I hope, before we complete this bill. I have no desire to delay this bill. I know the Senator from Mississippi and the Senator from Arkansas have worked hard to move this bill quickly, and they have done a superb job of getting it out of committee. On the general farm programs, they have done an extraordinary job of funding those in, I think, a responsible way. This program, really, is independent of that effort. They have done an excellent job on this bill. I do not want to delay it. I want the bill to get through as soon as it can. I do think this has to be voted on. I hope when I send this amendment to the desk, it will not be subject to a second-degree amendment. It can be couched in a variety of terms, so obviously we can return to this issue if it is, ad nauseam. Amendment No. 4959 (Purpose: To prohibit the use of funds to make loans to large processors of sugarcane and sugar beets unless the loans require the processors to repay the full amount of the loans, plus interest)

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

Mr. GREGG. The committee amendments to go forward. It was my understanding that committee amendments would go forward because I was going to be given a specific time and time limit. That does not appear to be the case. I find that to be inconsistent with the understanding I had. And I guess I just have to accept the fact things happen that way around here. Mr. BUMPERS addressed the Chair.

Mr. GREGG. There are a few that have been extinguished and diminished, I point out to the Senator, in allowing----

Mr. GREGG. I guess if I had known that I would not have foreclosed my rights on other parts of this bill.

Mr. GREGG. In a prior discussion with the Senator from Mississippi, it was my understanding this was going to be subject to a time limitation of 40 minutes.

Mr. GREGG. I am happy to respond to the inquiry of the Senator from Mississippi. I would like to offer my amendment when it is convenient to the Senator from Mississippi. I ask if he would ask unanimous consent that no second-degree amendments be offered to my amendment.

Mr. GREGG. I ask unanimous consent reading of the amendment be dispensed with.

Mr. GREGG. I ask for the regular order.