Judd Gregg

Mr. GREGG

Mr. GREGG. Mr. President, reserving the right to object, for clarification, we are going to have 40 minutes of debate and then at some point we will have the vote, right?

Mr. GREGG. But we will have 40 minutes of debate now equally divided between myself and Senator Grassley, and then when we get to a vote on it, we will have 2 minutes equally divided.

Mr. GREGG. If that is agreeable with the managers, that is fine with me.

Mr. GREGG. Mr. President, I send an amendment to the desk. Is there an amendment pending? This is a second-degree amendment to the Baucus amendment.

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

Mr. GREGG. Mr. President, this amendment is an attempt to remedy what is an unfortunate situation, which is that people who cannot buy ethanol from the Midwest and have to buy it from other sources, especially outside the United States, end up being taxed at 54 cents a gallon. So people from the east coast and, to some degree, from the west coast are paying an excessive amount to use product which significantly improves the environment and which also obviously reduces our dependence on oil. The argument at the time this tariff was originally initiated was we needed to protect the ethanol production capability of the Midwest, the corn producers. That may have had some resonance a few years ago, but it certainly does not have any resonance any longer. It does not have any credibility any longer. Today, there are about 7.5 billion gallons of ethanol produced in this country. Under this bill it is required that go up to 36 billion gallons. Most of that will come from the production of corn, most likely in the Midwest. So there is already a huge demand for corn, and corn prices are high. In fact, they are so high as a result of the use of corn for ethanol that many people who use corn as feedstock are complaining vociferously. So there is no need to protect production in the Midwest with a tariff that impacts people on the east coast disproportionately. The second reason there is no need for this tax is that people from the east coast cannot get ethanol from the Midwest because it cannot be shipped efficiently. That is because ethanol cannot be shipped through pipelines because of its volatility. Therefore, our only option on the east coast is to buy ethanol that comes from outside the country, the Caribbean Basin and Brazil. Therefore, it makes no sense to penalize the east coast to try to encourage production in the center of the country for corn and ethanol when the corn is already being significantly subsidized to the tune of $3 billion annually just through agricultural subsidies. But, in addition, its production is being encouraged by the requirement that we produce so much ethanol in this country that corn is essentially the feedstock for it, and that we therefore are having a dramatic expansion in the production of corn and the utilization of corn. This is not as if in any way this is going to affect that production capability. What it does do, however, is put us in the right place environmentally, and in the right place from a standpoint of utilization of energy sources because we should be using ethanol, obviously, and on the east coast we want to use ethanol. We just want to pay a fair price for it. When we have this 54-cent-a-gallon tax on the consumers in the Northeast and the East, it is not a fair price. If we take this tax off, we will actually expand ethanol consumption in the East, and so, hopefully, at some point they will figure out a way to ship ethanol through pipelines and that will create a greater demand for ethanol generally in this Nation since so many people live on the east coast. And that will, again, help the production in the Midwest once we figure out how to ship it efficiently to the East because the demand will have been created. Secondly, we have a choice. We can either heat with oil and we can run our cars on oil and gas or we can run in part on ethanol. The simple fact is, however, I would rather buy ethanol from Brazil than oil from Venezuela. It makes a lot more sense geopolitically as to how we protect ourselves. It is a cleaner burning energy, it is a better form of energy, and it is an energy which should be burned and is an energy that I think is a national policy we would rather buy than underwriting the present Venezuelan Government by having to buy oil there. So the concept of having this tariff, which is essentially a 54-cent- a-gallon tax on everybody who lives on the east coast, is no longer viable. It is not viable because corn production is up dramatically, the price of corn is up dramatically, and it will continue to go up especially under this bill since we are going to require a dramatic increase in the number of gallons which are ethanol based. So the ethanol industry, to the extent it is corn based, is going to continue to grow and be viable, and they do not need this tariff production, which is its only purpose. It is not viable because it is not an efficient way for us to purchase energy, to have us pay this much extra money in tariffs so we basically undermine the use of ethanol on the east coast. It is not a good policy because it encourages the use of Venezuelan or other types of oil imports over ethanol because of the pricing situation. And it is not a good idea because it is simply bad policy to have in place this type of tariff. This is not the mercantile period of the 19th century when we basically arbitrarily threw tariffs on products in order to create an inefficient marketplace, which was something we thought was going to help some producer here or there. It makes much more sense to have a situation where consumers can purchase ethanol-based products at reasonable prices so we can get more utilization of ethanol. This amendment would eliminate the 54-cent-a-gallon tax which is targeted on a majority, quite honestly, of the American population and which the majority of Americans should not have to pay. I reserve the remainder of my time.

Mr. GREGG. Mr. President, I yield 3 minutes to the Senator from Arizona.

Mr. GREGG. I yield 1 more minute to the Senator from Arizona.

Mr. GREGG. Mr. President, could the Chair advise us as to the time situation?

Mr. GREGG. Senator Grassley has how much time?

Mr. GREGG. Mr. President, I ask unanimous consent to add as cosponsors Senators Feinstein, Sununu, Kyl, and Ensign.

Mr. GREGG. Mr. President, I think there is some inconsistency coming from the argument of the other side on this issue. There is the argument, well, reducing the 54-cent-a-gallon tax would not reduce the price of gasoline. That is very hard to sustain on its face; it is counterintuitive, for obvious reasons. If you cut the cost of gasoline 54 cents a gallon, or if you cut the cost of ethanol 54 cents a gallon, obviously, the price of gasoline is going to go down. It is equally hard to defend that position when, within two sentences of that argument, you make the argument that the country is going to be flooded with low-cost ethanol. You can't have it both ways. As a practical matter, yes, this will reduce the price of gasoline. But that is because the ethanol blend will be more affordable in pricing gasoline, and that should be our goal, obviously, for the American consumer--to produce a more environmentally positive form of energy at a lower price. The second major argument made here is, we can't do this because it will assist the foreign producers over domestic producers, which is totally inconsistent with the bill itself. The bill requires that 36 billion gallons of ethanol be produced by 2022. There is no way that does not mean our domestic production is going to expand dramatically to meet that obligation, so the bill already has in it the built-in obligation and requirements to expand domestic production, coupled with the fact there is a $3 billion subsidy already paid independent of the ethanol benefit, which is accruing to the corn-producing segment of our economy. A $3 billion subsidy for corn producers is paid directly, coupled with the fact that Midwestern-produced ethanol cannot be shipped to the east coast, so it is not a competition. We have to buy the ethanol off-coast because that is the only way we can get the ethanol efficiently and safely because ethanol cannot be shipped through pipelines. As a practical matter, this tariff is a holdover from a day when, yes, there may have been a fledgling industry in the ethanol community. Maybe there was some viability to it 5 years ago. But that is no longer the case. We have seen a significant increase in corn prices as a result of the expansion of ethanol use. We are going to continue to see a significant increase in corn production, in corn prices, because of continued ethanol use. The simple fact is, as other types of ethanol sources are brought on line, they are going to be brought on line at a competitive price. In fact, they may even be more competitive than corn. And that competitive price, and hopefully a way to ship it, will then be taken advantage of in the East and obviously be a benefit to the entire community of ethanol producers. The arguments being put forth are classic protectionist arguments, but they have no feet underneath them. They have no basis underneath them. Protectionism, to begin with, is a lousy idea, but it is especially a lousy idea when it is basically not accomplishing its goal. On the face of it, we know it is not accomplishing its goal. Again, the argument of the Senator from Iowa made this point for us when he said the 7 percent was being allowed in the country, and he had no problem with that. If he has no problem with 7 percent, then why not more, as a practical matter? As a practical matter, we are not competing with the Midwest, we are just trying to get a reasonable price for ethanol in the East. This tax--and that is what it is--on American consumers, on a product that we should be using, is totally inappropriate and cannot be justified on the basis of protecting a domestic industry, specifically corn production, in light of the economics of corn production in today's market--which is doing extraordinarily well. It is seeing a massive expansion. Its prices are at their highest level in recent memory. They are going to continue to expand because this bill requires that expansion with the requirement that we use 36 billion gallons of ethanol by 2022, which is almost a quadrupling of the amount of ethanol required today. I hope Members of the Senate would join me in voting to eliminate this unfair tax, this inappropriate tax. Down the road there is going to be an amendment to eliminate the blenders credit which would offset any of the revenues this would incur. I ask for the yeas and nays.

Mr. GREGG. Mr. President, before we go to the vote, I want to clarify two things. First, there was an implication that the administration might not support this amendment. In fact, the administration supports the repeal of this tariff, and they openly supported it. They were on record as supporting it when they were negotiating with Brazil. They do support the repeal of this tariff.

Mr. GREGG. Yes, to ask a question.

Mr. GREGG. Reclaiming my time----

Mr. GREGG. I am happy to say that I did not understand the question. If I did understand the question, I believe it was that the President said he would not repeal the ethanol credit during his time in office, which I don't happen to think is the administration's position, which was that they publicly do not support this tariff. They do not support this excessive tariff; they do not support this tax. This administration has a strong record on opposition to taxes and tariffs, and they have been publicly in opposition to this for a while. I also ask unanimous consent to add Kay Bailey Hutchison as a cosponsor.

Mr. GREGG. I ask unanimous consent to have a statement from the Taxpayers for Common Sense in support of the amendment printed in the Record.

Mr. GREGG. I yield the remainder of my time and suggest we go to the vote.

Mr. GREGG. Mr. President, pursuant to section 904(c) of the Congressional Budget Act of 1974, I move to waive section 201 of S. Con. Res. 21, the fiscal year 2008 budget resolution, for consideration of H.R. 6. I ask for the yeas and nays.

Mr. GREGG

Mr. GREGG. And Senator Murkowski.

Mr. GREGG. About 10 minutes.

Mr. GREGG. Senator Murkowski for 5 minutes, I believe.

Mr. GREGG

Mr. GREGG. Mr. President, I thank the Senator from Wyoming for bringing forward this bill on behalf of Senator Thomas, who was such a force in this Chamber and especially a force on behalf of his State. It is a very appropriate thing to do.

Mr. GREGG

Mr. GREGG. Mr. President, I rise to talk about an amendment I wish to offer--I will offer it later--relative to the tax package that was just introduced relative to this Energy bill. Today, for those of us who live on the east coast, we would like to be able to buy ethanol at a reasonable price. In fact, we would like to be able to buy ethanol at all. The problem is, for ethanol to be shipped to the east coast, it has to go through pipelines. Transportation by truck or tank car is not viable, and thus ethanol, because of its components, cannot be shipped and is not stable in going through pipelines. So the east coast really does not have too many options for purchasing ethanol. One option is to buy it from the Caribbean countries that produce it or from Brazil. Unfortunately, there is a tariff in place on Brazilian ethanol which amounts to 54 cents a gallon. That is a tariff which those of us on the east coast are subjected to and the effect of which is the price of ethanol is arbitrarily overstated. This tariff was put in place quite a while ago and was put in during a period when the production of ethanol was not commercially viable because the cost of oil was still very low and when corn production was not oriented toward ethanol production. So this tariff was put in purely as a protective tariff for the purpose of allowing the corn industry in the Midwest to be successful in developing ethanol--at least that is the representation. However, that position no longer has viability. The simple fact is that the corn industry in the Midwest is doing extraordinarily well because not only is it still a major feedstock for most of the traditional animal use to which it is applied, but it is also being used aggressively for the production of ethanol. In fact, we are looking at about 7 billion gallons of ethanol being produced this year. Under this bill, for the purpose of gasoline replacement, it will be required that we have 36 billion gallons produced by the year 2022. So we are putting in place mandates which will absolutely require an expansion in the use of ethanol of dramatic proportions, which we should, and which will therefore raise the ship of the production of ethanol by the use of corn in the Midwest or sugar beets in the Northern Plains States as a form of producing ethanol. Therefore, they should not be concerned about the threat or the potential threat or the alleged threat of having ethanol come into this country from other producers in the Western Hemisphere, such as Brazil, because that is not going to affect their price and it is not going to affect their production capability. Secondly, we still have in place in this bill and under the agricultural bills which we passed in the Senate a $3 billion annual subsidy for corn production--a $3 billion annual subsidy. The irony is we are subsidizing a product which is now extraordinarily productive and which has great viability--corn production--and, in fact, the cost of which has gone up so much that we are hearing complaints from many of the various farm communities, such as cattle producers who need corn, because the price has gone up so much as a result of the demand for corn. But at the same time, we are making it virtually impossible, because of the protective attitude of the Midwest on the issue of corn production for ethanol, to bring into the Northeast and into the Eastern States ethanol at a viable price and at a competitive price. Our goal basically as an economy should be to get ourselves off oil, to move away from oil, and to move to ethanol production, which is the most efficient and cost competitive. So the Northeast and the Eastern States should be allowed to purchase ethanol from Brazil without this arbitrary tariff that was put in place many years ago and continues. In addition, if you just want to look at it on the basis of purchasing an overseas product--and some will argue this is just going to underwrite the foreign production of an energy source, ethanol, in Brazil--you can make that argument, but as a practical matter, if you make that argument, you have to ask yourself, would you rather buy ethanol from Brazil or oil from Venezuela because essentially the choice is just about that stark. You can buy your ethanol from Brazil or you can buy Venezuelan oil. By making Brazilian ethanol more competitive and taking off this arbitrary 54-cents-a-gallon increase, which people from the East have to pay, you will actually make ethanol a more viable product in the East and thus reduce our reliance, for example, on Venezuelan oil or, for that matter, Middle Eastern oil. I personally would rather be buying ethanol from a country such as Brazil than buying oil from the Middle East or from Venezuela. So the arguments for eliminating this tariff are myriad. They are that we should be purchasing ethanol at the most competitive price, that the Northeast and the East cannot purchase Midwestern ethanol anyway at a competitive value because it cannot be shipped by pipeline because it is so combustible. The original concept of protecting corn producers in the Midwest no longer has viability in light of the fact that we have mandated an ethanol usage in this country that is going to absorb just about every ounce of corn produced, and we see corn prices are already at extraordinarily high price and that has put a lot of pressure as a feedstock commodity on various other industries, such as cattle production; and that it makes no sense in light of the $3 billion subsidy which we already have in place for corn to require people in the Northeast--who are paying that subsidy, by the way, through their taxes--to also have to pay an inflated price for ethanol which is produced in Brazil. If we are going to choose to use overseas sources of energy, which we are going to have to on the east coast, at least for the foreseeable future, why wouldn't we choose ethanol produced in Brazil over oil produced in the Middle East or Venezuela? In addition, there is another argument, which is that if the Midwest is so concerned about having this tariff in place, they seem to be cutting off their nose to spite their face because the practical matter is that the more ethanol that is used on the east coast where the population of this country is concentrated to a large degree, the more the east coast will become dependent on ethanol, and when we get over this hurdle of moving ethanol through pipelines or other ways of moving it from the Midwest to suppliers and producers, we will see there is a demand that has been created, and at that point we will have a competitive commodity, one presumes, with the Brazilian ethanol. There is no logic to continuing this arbitrary tax on people from the Northeast and the East relative to the price on ethanol, a 54-cent-per- gallon tax. It should be repealed, and therefore I will be offering an amendment to repeal this tariff. Mr. President, I yield the floor.

Mr. GREGG

Mr. GREGG. Mr. President, I rise today to speak about several of the personal problems currently being experienced by some military families due to the deployment of one or both parents and to introduce three pieces of legislation, the language of which is included in the recently passed House of Representatives Defense authorization bill, which are designed to help alleviate those problems. But first, I would like to express my sincere thanks to the fathers and mothers, husbands and wives, sisters and brothers, and the sons and daughters of our Nation, who in these very tumultuous and dangerous times have volunteered to join our Armed Forces and serve our country around the world. In December 1776, another of the tumultuous times for our Nation, Thomas Paine wrote ``These are the times that try men's souls: The summer soldier and the sunshine patriot will, in this crisis, shrink from the service of his country; but he that stands it now, deserves the love and thanks of man and woman.'' Our modern day Patriots, who are now serving in the Army, Navy, Marine Corps, Air Force and Coast Guard, also heard and answered our country's call and they surely deserve the love and thanks of our Nation. In some cases, while a military parent is deployed overseas, courts have overturned custody arrangements of their child or children; this while the deployed military custodial parent was unable to appear before the court. The first piece of legislation, S. 1658, would provide protection of child custody arrangements for Armed Forces parents who are deployed in contingency operations. The legislation states that if a motion for change of custody of a child of a servicemember is filed while the servicemember is deployed in support of a contingency operation, no court may enter an order modifying or amending any previous judgment or order, or issue a new order that changes the child custody arrangement that existed as of the deployment date. An exception is allowed whereby the court may enter a temporary custody order if there is clear and convincing evidence that it is in the best interest of the child. Additionally, if a motion for the change of custody of the child of a servicemember who was deployed in support of a contingency operation is filed after the end of the deployment, no court may consider the absence of the servicemember by reason of that deployment in determining the best interest of the child. The second piece of legislation, S. 1659, is intended to preclude some of the tension and anxiety that a child may suffer from the simultaneous deployment of both parents, as well as the grief that would result if both those parents were to lose their lives while simultaneously deployed. This bill would provide a limitation on simultaneous deployment to combat zones of dual-military couples who have minor dependents. It states that in the case of a member of the Armed Forces with minor dependents who has a spouse who is also a member of the Armed Forces, and the spouse is deployed in an area for which imminent danger pay is authorized, the member may request a deferment of a deployment to such an area until the spouse returns from such deployment. And the third piece of legislation, S. 1660, would initiate studies that could hopefully lead to improved support services for families of members of the National Guard and Reserve who are undergoing deployment. This legislation would direct the Secretary of Defense to conduct a study of possible methods to enhance support services for children of members of the National Guard and Reserve who are deployed. Additionally, the legislation would require the Pentagon to carry out a study on establishment of a program on family-to-family support for families of deployed members of the National Guard and Reserve. Mr. President, I ask that my fellow Senators consider these bills.