Gil Gutknecht

Mr. GUTKNECHT

Mr. GUTKNECHT. We are delighted to have the gentleman from Illinois (Mr. Manzullo) join us and be happy to yield some time to him to talk about this.

Mr. GUTKNECHT. If the gentleman will yield, it is even more convoluted than that. It is one thing if the country music industry or the orange juice industry or the taconite industry or the automobile industry, if they decide that it does make some sense to have regional differentials, that is one thing, because that would be the market determining that. The difference here is the Federal Government sets this price. There is no other example, and we have searched in vain, whether we are talking orange juice, country music, computers, software, ice water, hockey sticks, there is no example anywhere else in our entire economy where we have a product where the Federal Government sets the price that the producer is paid based on where it comes from and what it goes into. We produce taconite in the upper--what we call the iron range of Minnesota. They also produce taconite on the upper peninsula of Michigan. There is no Federal agency that says, well, if that taconite goes into automobiles, if that taconite that is ultimately produced and is melted down and produced as steel that goes into automobiles, well, it is worth one price; but if that taconite is melted down and it goes into refrigerators, then it is worth a different price. Now, if the market decided that that was true, because we know that stainless steel is worth more than rolled steel, and we know I beams are probably worth less than other fine steel, but, again, that is not determined by the Federal Government, that is the market that sorts that out. So I wanted to just make that point that there are a lot of areas where there are regional differentials. We probably do pay more for orange juice in Minnesota than they do in Tampa, Florida, but that is because of transportation costs and other factors where the market determines. It is not determined by the Federal Government.

Mr. GUTKNECHT. Their other input costs, their electric bill is not based on how far they are from Eau Claire, Wisconsin; only the price they get from their local cooperative or whomever they sell their milk to; right?

Mr. GUTKNECHT. So feed prices are not based on how far a farmer is from Eau Claire, Wisconsin?

Mr. GUTKNECHT. Does the gentleman mean to say that the real estate taxes are not based on how far away a farmer is from Eau Claire, Wisconsin?

Mr. GUTKNECHT. I think that is a pretty accurate characterization. Then the gentleman from Illinois pointed out something else, that a few years ago as part of a compromise, and unfortunately that is a word that we hear, some of us think we hear too often, here in Washington but as part of a compromise, they allowed six of the northeastern States where they have a lot of population, they have big markets for fluid milk, they allowed them to create what can only be called a cartel, a compact between those six States that would in effect keep other milk out and in effect help to artificially drive their price of milk up even higher. Now, what is truly ironic about this, and I know both of you and particularly the gentleman from Illinois has been one of the real fighters for free trade in this Congress and he has got a lot of high tech companies that really do depend, and I know I have a lot and I suspect the gentleman from Wisconsin does as well, companies who recognize the importance of world trade. In fact, I am wearing a Spam watch tonight. They produce Spam in my district. Every day in Austin, Minnesota, we turn 16,000 pigs into Spam. Spam is a great export product. But we need export markets. Whether we are producing Spam or whether we are producing cheese or whether we produce automobiles, you name it, the United States desperately needs to export more of what we produce. At the very time we are trying to open up markets for our farmers, whether it be in China, whether it be in Japan, whether it be in the European Union, Africa, Central, South America, anywhere else in the world, at the very time we are saying we have got to open up markets for our products around the world, we cannot open up markets in the East. There are six States that try to keep our dairy farmers from coming in and competing. It really is like salt in a very sore wound.

Mr. GUTKNECHT. For two reasons. Because, first of all, more of their milk goes into cheese and because they are closer to Eau Claire, Wisconsin.

Mr. GUTKNECHT. Artificially higher prices, yes.

Mr. GUTKNECHT. I would yield to the gentleman from Illinois and then we are going to yield back our time.

Mr. GUTKNECHT. They are trying to derail that train.

Mr. GUTKNECHT. It is a small baby step in the right direction, and if Congress takes no action, the President does not sign a bill, the USDA's rule will go into effect October 1, and the anticommerce clause compacts will disappear, and we will move gradually, and I mean very gradually, to a more level playing field for dairy farmers around the United States; that is correct.

Mr. GUTKNECHT. Mr. Speaker, tonight we are going to talk about an issue which I suspect most of our colleagues and anyone else who might be watching on C-Span tonight would say, how in the world can the issue of milk be a controversial issue? I think if they pay any attention tonight, they will find that milk is an enormously controversial issue, particularly for those of us in the upper Midwest. It is a very difficult issue I think for the average person to completely understand, and we hope that we do not bore our colleagues who may be watching tonight. It is a little like the story of the little boy who came in and asked his mother a question. His mother was kind of busy and she said, well, why don't you ask your dad? The little boy, said, well, I didn't want to know that much about it. I suspect a lot of people who may tune in tonight may say, well, I did not want to know that much about milk policy here in the United States. To start off, though, I think we have to kind of look at this chart and begin to understand the history. First of all, let me say that this is June. It is Dairy Month. Some people know that. A lot of people do not know that. But June is dairy month for a very interesting reason. Back in the thirties, farmers recognized that in June, we reach what is called the peak of the spring flush. That is when dairy cows produce the most amount of milk they are going to produce all year. At the same time, schools get out, a lot of kids go home, they drink less milk, more soft drinks, more lemonade and so forth, and so at the very time milk production goes to its peak, consumption drops. Back in the thirties the Chain Drugstore Association got together with the Dairy Association and had the first dairy month. Now it has become a very big event, particularly in the upper Midwest, and we encourage people all over the country to enjoy milk, but, more importantly cheese and cottage cheese and yogurt, ice cream, all the other things made from the real thing, dairy products, real cheese, real milk. Back in the thirties we were suffering from some rather difficult financial circumstances for all Americans, but for farmers in particular, and they came up with a rather convoluted system back in 1937 as part of the agricultural marketing agreement in 1937 to create various regions around the country and price milk based on where it came from and what it went into. We are going to talk about this whole issue a little bit tonight, but I want to talk about the disparities that this system is creating. This is the 1998 average blend prices for current Federal milk marketing orders. What it demonstrates, and I think the numbers may be too small to really pick up on the television screen, so any of the Members who may be watching in their offices who would like a smaller version of this so that they can actually look at it and read the numbers, I am going to read some of them for you. But in effect what we have is a system where milk is priced to the dairy farmer based on what it goes into and where it comes from. Now, this may seem bizarre, but in 1937, Eau Claire, Wisconsin, was considered the epicenter of the dairy production area in the United States. Anybody who has ever watched a Green Bay Packers game understands that there is an awful lot of cheese produced in Wisconsin. There is also a lot of cheese produced in my district. As a matter of fact, there is one cheese plant in my district that produces 500,000 pounds of cheese every single day. That is a lot of cheese, and, of course, we cannot eat all of that cheese in the upper Midwest. But what they did is they created this system because they decided that Eau Claire, Wisconsin, was the epicenter of the dairy production area for the United States. They said the closer you are to Eau Claire, Wisconsin, the less you will get for your milk. Because of all the cheese plants and because back in 1937, we did not have the interstate highway system and refrigerated trucks, it probably made some sense back in 1937 to have a system so that it would encourage production in places like Texas, Los Angeles, the Pacific Northwest, particularly out here in the populated areas of the eastern seaboard, Boston, New York, Washington. They wanted to encourage more dairy production in those areas relative to Wisconsin, Minnesota, northern Illinois and Iowa. So they came up with this rather convoluted system, which may have made some sense in 1937, but, guess what, since 1937, we built the interstate highway system, we have refrigerated trucks that can now get milk almost anywhere in the United States within a matter of a few days, while the milk is still absolutely fresh, delicious and wonderful to enjoy. But we still have the system. It is interesting, once you create a Federal Government program, in fact, Mark Twain once observed the most permanent thing on Earth is a temporary government program. Back in 1937 they created this system, and to give you some of the numbers that are shown on this chart to kind of give you an idea of the differences, the average blended price for the upper Midwest, including Minnesota, most of Wisconsin, the eastern Dakotas, part of northern Iowa, and I think it actually gets into northern Illinois, the average blended price last year that was paid to dairy farmers was $13.57 per hundred pounds of milk. Now, that is another thing most people do not understand. The dairy farmer always receives his milk check based on the number of hundreds of pounds of milk. So the average dairy farmer in the upper Midwest got $13.57. That was what the Federal Government mandated. ``Mandated'' is an important word. We are going to talk about that a little bit. Now, if you were a dairy farmer for example in Washington or Oregon, the Federal Government mandated a price of $14.75. If you were in central Arizona, that price was $14.90. But if you lived down here in the southeast, one of the States that produced milk, for example in southern Tennessee, Mississippi, Alabama, Georgia, that dairy farmer got $16.13, mandated by the Federal Government. If you lived in southern Florida, for example, down in the Tampa Bay region, your price was $16.82. The differential, $13.57 if you live in my district, or Wisconsin or parts of Illinois, $13.57, but if you are down in Florida, it is $16.82. Again, that may have made sense back in 1937 when we did not have the interstate highway system, did not have refrigerated trucks, but it does not make a whole lot of sense today. So we are here tonight to talk about this and sort of raise some of the questions, rhetorical questions, and ask if anybody can honestly defend a system that says to dairy farmers that your product will be based on where it comes from and what it goes into. Incidentally, to make things even more complicated, yes, milk is priced based on what it goes into. If your milk goes into fluid milk, the stuff that comes in containers that you drink and everybody loves, good for your body, gives you a white mustache, if it goes into fluid milk, it is worth more than if it is going into what is called Class 2 milk, which is spoonable. That would include ice cream, cottage cheese, yogurt. Class 3 milk is products like cheese and butter. Class 4 milk is powdered milk. So we have four classes of milk, and, again, that determines the price that the dairy farmer gets that does all of the work, that gets up every morning at 5 o'clock in the morning because cows have to be milked at least twice a day. This is not a job for the faint of heart. Anybody who wants to go into the dairy business, see me, because there are lots of people looking for folks who want to get up at 5 o'clock every single morning, 365 days a year, and milk those cows. That is what they have to do. But the real problem is if you live in Minnesota, Wisconsin, what we call the upper Midwest region, the eastern Dakotas, you get $13.57. If you live in southern Florida, you get $16.82. Now, is it any wonder that some of our producers in the upper Midwest say, this is not fair? It is absolutely not fair. That is a system that we hope to change. I started this conversation tonight by saying you would not think that milk is a particularly controversial issue. Well, it is, because, believe it or not, the people in Florida think this is a pretty good system. What is wrong with the system that pays our dairy farmers $16.82? In fact, I am in my third term in Congress. I have learned in those three terms that whenever you talk about leveling the playing field, you can always bet that at least half of the people participating in that debate do not want to level the playing field. Why? Because relatively speaking, their constituents lose. Well, the point that we have been making in the upper Midwest since 1937, now, let me do a little arithmetic, it is now 1999, less 37, that amounts to, what, 62 years. For 62 years the dairy farmers in our region have been receiving less money relative to dairy farmers in anywhere else in the United States. So for 62 years we have been saying it is time to level the playing field. I have got another chart here, and, again, if anyone would like a copy of these charts, we would be more than happy to send them out. If you contact my office we will send them to you. But this gives some idea of the producer Class 1 blended price benefit. A regional average, it shows how the differences work out between the northeast, the average, what the average is in the Appalachian region. Florida, for example, as I mentioned, you can see by this bar chart, Florida receives the best of all the deals, and, unfortunately, the region that we represent is down here way at the bottom. Again, we are not asking for special privileges, we are not asking for special favors, but we are asking in the day and age when we have the interstate highway system, we have refrigerated trucks, all we are asking is for equal pay for equal milk. I have joining me tonight a couple of my colleagues, one from Illinois and one from the State of Wisconsin, and I want to yield some time to my colleague, a freshman member, the gentleman from Wisconsin (Mr. Ryan), from, I believe, the First Congressional District. I represent the First Congressional District in Minnesota the gentleman from Wisconsin (Mr. Ryan) represents the First Congressional District in Wisconsin. I wonder if you want to talk a little bit about this and what the dairy farmers are talking about and ultimately the unfairness of the system we have.

Mr. GUTKNECHT. Absolutely, tomorrow afternoon.

Mr. GUTKNECHT. How about the feed prices?

Mr. GUTKNECHT. I think the gentleman has asked a question which I cannot answer. I think it is a great rhetorical question. It is particularly troubling for those of us in the upper Midwest where about 85 percent of our milk goes into cheese. One other thing. We have already made this far more complicated, I think, than the average Member can really understand. But the problem, of course, is if you artificially set the price of milk too high in some regions, which in our opinion they do, what it does is that fluid milk begins to back up in the system and then goes into cheese, which drives the cheese price down, which drives our price down, which drives everybody's price down.

Mr. GUTKNECHT. I yield to the gentleman from Wisconsin. We need to wrap it up here for any last comments you would have.

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Speaker, I want to thank the gentlewoman from Idaho (Mrs. Chenoweth) for bringing this resolution forward. If for no other reason, it gives us a chance to talk about history and the relationship between this great government and God and prayer and all that goes together. When I was sitting here listening to some of the debate earlier, I was looking up at these words right on top of the Speaker's rostrum. It says, In Got We Trust. The words that the gentlewoman from Idaho (Mrs. Chenoweth) started off this conversation tonight about this resolution are so important. Mr. Speaker, we need to remind ourselves of how this great country was founded. Many of us forget that the first official act of the Continental Congress was to appoint a chaplain, and then they prayed, and not a perfunctory prayer. They prayed for one and one half hours. Let me read what Thomas Jefferson said in 1781: Can the liberties of a nation be thought secure when we remove their only firm basis, a conviction in the minds of the people that these liberties are the gift of God? Let me read what George Washington said in his farewell address: Of all the dispositions and habits which lead to political prosperity, religion and morality are indispensable supports. In vain would that man claim the tribute of patriotism, who should labor to subvert these great pillars. Benjamin Franklin said, at the Constitutional Convention in June of 1787, and I quote: I therefore beg leave to move that henceforth prayers imploring the assistance of heaven and the blessings of our deliberations be held in this assembly every morning before we proceed to business, a tradition which continues in this House to this very day. And Abraham Lincoln in his Emancipation Proclamation closed with these words: ``And upon this act, sincerely believed to be an act of justice, warranted by the Constitution upon military necessity, I invoke the considerate judgment of mankind and the gracious favor of Almighty God.'' Mr. Speaker, I would remind the Members of what the Continental Congress said in 1779. They said, and this is from an absolute resolution that was passed by the Congress, and I quote, that it be recommended to the several States to appoint the first Thursday in May next to be a day of fasting, humiliation and prayer to Almighty God; that He will be pleased to avert the impending calamities which we have but too well deserved; that He will grant to us grace to repent of our sins and amend our lives according to his Holy Word; and that He will continue that wonderful protection which hath led us through the paths of danger and distress. That was signed on March 20 in the Year of our Lord, 1779, by John Jay, President. Finally, let me just remind Members that the very same day that the Congress passed the First Amendment to the Constitution, September 25, 1789, they approved a resolution requesting that President George Washington proclaim a day of prayer and thanksgiving in the land.

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Speaker, I rise today in strong support of this legislation. Let me say at the outset, hunger knows no politics; and we have seen down through the years that embargoes have very little positive consequences, either for whatever we are trying to achieve diplomatically but certainly for our farmers. I want to share a story that every day in Mankato, Minnesota, there are more soybeans processed than anywhere else in the United States. We grow an awful lot of soybeans in our area; and something that many of the Members do not know is that literally over half of all the soybeans grown, at least in the upper Midwest, ultimately wind up in some kind of export markets. Now, soybeans should be selling for somewhere between $7 or $8 a bushel. Today, they are looking like they may test at $4 a bushel. Here is an unvarnished fact, that whether one is talking about soybeans, whether they are talking about pork, whether they are talking about corn, name the commodity that we produce here in the United States, here is an unvarnished fact about it, we cannot eat all that we can grow. If we are going to allow farmers to achieve the kind of income levels that they deserve for the work that they put in, we have to open markets. We cannot close them off. Using food as a political weapon has never worked. It is like holding a gun to the heads of our farmers. It has not worked in terms of achieving diplomatic ends. It has been a mistake. This is a very important step in the right direction. Mr. Speaker, as long as I have the floor for just a moment I want to say that one day I hope that we in this capitol of Washington and capitols all over the rest of the world will embrace the idea of a world food treaty, because we ought to say that as long as there is not a declaration of war between two countries we ought to always say that we are going to be willing to sell food to those countries, regardless of their politics, regardless of what may happen within their borders in terms of their own political process, but we will never use food as a political weapon. This is an important piece of legislation, a very important step in the right direction. It is good for farmers, and I think in the long run it is good for our diplomatic relations as well.

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Speaker, later this week this House will take up the explosive issue of youth violence and guns. I would like to read from a column by Paul Harvey. I quote: For the life of me, I cannot understand what could have gone wrong in Littleton, Colorado. If only the parents had kept their children away from guns, we wouldn't have had such a tragedy. Yeah, it must have been the guns. It couldn't have been because half of our children are being raised in broken homes. It couldn't have been because our children get to spend an average of 30 seconds in meaningful conversation with their parents each day. After all, we give our children quality time. It couldn't have been because we treat our children as pets and our pets as children. It couldn't have been because we place our children in day care centers where they learn their socialization skills from their peers under the law of the jungle while employees who have no vested interest in the children look on and make certain that no blood is spilled. It couldn't have been because we allow our children to watch, on average, 7 hours of television every day, filled with the glorification of sex and violence that is not fit for adult consumption. It couldn't have been because we allow our children to enter into virtual worlds in which, to win the game, one must kill as many opponents as possible in the most sadistic way possible. It couldn't have been because we sterilized and contracepted our families down to sizes so small that the children that we do have are so spoiled with material things that they come to equate the receiving of material with love. It couldn't have been because our children, who historically have been seen as a blessing from God, are now being viewed as either a mistake created when contraception fails or inconveniences that parents try to raise in their spare time. It could not have been because our Nation has become the world leader in developing a culture of death in which 20 to 30 million babies have been killed by abortion. It could not have been because we give 2-year prison sentences to children who kill their newborns. It could not have been because our school systems teach children that they are nothing but glorified apes who have evolutionized out of some primordial soup of mud by teaching them that evolution is a fact and by handing out condoms as if they were candy. It could not have been because we teach our children that there are no laws of morality that transcend us; that everything is relative and that actions do not have consequences. What the heck. The President gets away with it. Nah, it must have been the guns, closed quote.

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Chairman, I was unavoidably detained earlier today and was not present for rollcall vote No. 172. Had I been present, I would have voted ``no''. Amendment Offered by Mr. Nethercutt

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Chairman, I move to strike the requisite number of words. Mr. Chairman, despite all of the protests, this bill will not even go into effect until October 1. So no one is going to miss a payment, no one is going to miss a program, no farmer is going to be injured by delaying this process just a little bit. And the issue, of course, is not whether or not farmers will ultimately be treated equitably by this Congress. The bipartisan agreement that we see here today means that we all want to help our farmers. But the real question before us is will we live within those spending caps; will we, in fact, balance the budget; will we, for the first time in my memory, perhaps in my lifetime, not actually steal from the Social Security Trust Fund? That is the issue that we are talking about. That is the issue we ought to focus on. And, ultimately, I think that is what a number of us want to see happen. In fact, I believe that all of us want to see that happen. So if it means this bill is delayed by a day or two, that is regrettable, but I think in the end we will all be happy if we get a better product through the entire appropriation process, that abides by the spending caps, that saves Social Security and for the first time says to our kids, we mean what we say; we are going to try to preserve the Social Security system.

Mr. GUTKNECHT. I yield to the gentleman from Oklahoma.

Mr. GUTKNECHT. Reclaiming my time, Mr. Chairman, and I am sure the gentleman from Oklahoma knows that sunshine is the best antiseptic, and allowing a little sunshine to shine on the appropriations process here in the Congress is not a bad thing. If it takes an extra day or two, so be it. In the end, I think we will all have a product that we can be more proud of, that we can defend when we go home to our constituents, and ultimately will keep that promise all of us have made to our kids, and that is that every penny of Social Security taxes should go only for Social Security.

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Speaker, I want to engage in a little visualization quiz with my colleagues this morning. If all the Members would just close their eyes, relax, and think. Think of all the things that our Federal Government artificially sets prices on based on their distance from a specific geographic location. Think hard. There is only one correct answer. Here is a hint: It is the only product where we allow States to set up artificial trade barriers. Here is another hint: It gives you a white mustache, and it is actually good for you. That is right, milk, only milk. Here is another interesting factoid. At the very time when we are trying to break down trade barriers around the world, some Members are actually trying to construct trade barriers here in the United States when it comes to milk.

Mr. GUTKNECHT

Mr. GUTKNECHT. I would like to thank the chairman. As I mentioned earlier, we have been pushing now for 60 years to get this whole milk marketing order system reformed. Finally, under the leadership of former Congressman Gunderson from Wisconsin, we finally got included in the ag bill a couple of years ago a requirement that the Secretary of Agriculture, Secretary Glickman, was forced to come up with a new plan to begin to bring some equity to this whole milk marketing order system. To his credit, he did come up with a plan that frankly some of us are not completely happy with. I want to point out these colors if I could. I promise not to take too much time here, but this essentially reflects some of the changes that would occur under the plan that Secretary Glickman came out with. If you look at this, actually Minnesota and Wisconsin lose under the Glickman proposal. And so we are not asking for completely equal pay for equal milk, but we are asking to level the playing field. The net practical effect of the Glickman plan is, it does eliminate some of the differences. Relative to some of the other areas of the State, if you just go by winners and losers, we lose less than some of the other States, but that is because they already are getting more than we are getting. So we are prepared to accept what Secretary Glickman has proposed in a spirit of compromise, because at least in general it moves to a leveling of the way that the milk marketing orders are set up. Before I yield back to my colleague from Wisconsin, I want to play a little visualization game with some of my colleagues. If you could, just close your eyes and think of all of the products that the pricing is based upon some geographic location. Just think about that. Well, the answer is, there is only one. Only milk. I think we have got a cartoon from, I believe it is from the St. Paul Pioneer Press. Maybe the gentleman from Wisconsin wants to talk a little bit about it. Maybe it is easier for me to talk about it because I have got it right here. But could we imagine a system where all computers would be price adjusted according to their distance from Seattle? We could not imagine that, could we? Could we imagine a system where all country music should be price adjusted according to how far it is away from Nashville, Tennessee? Where all oranges should be price adjusted according to their distance from Florida? But we do have a system where all milk is priced based on how far away it is from Eau Claire, Wisconsin. Now, the question at the bottom is, which of these is actual Federal policy. It is amazing when you stop to think about it. It is the only product where the price is based on some arbitrary geographic location. Secondly, it is based on what that product is going to go into. In fact, up in northern Minnesota where we produce an awful lot of iron ore, they produce taconite pellets. These taconite pellets, no one could imagine that some Federal bureaucrat would sit up there in front of an iron mine and say, well, these taconite pellets are going to go into automobiles so they will be priced at this level, and these taconite pellets are going to go into steel lockers and therefore the price will be something else. That would be a crazy, absurd idea. But the truth of the matter is that is exactly what happens to milk. It is all done by bureaucrats here in Washington, D.C. Once again, we are here on the floor of the House tonight arguing this case because farmers in the upper Midwest have been dealing with this antiquated, in fact Justice Anton Scalia has referred to this system as ``Byzantine.'' We have dealt with this Byzantine system for 60 years. Finally, Secretary Glickman has come out with a plan which is not perfect, actually in some respects it still punishes dairy farmers in the upper Midwest, but at least it levels the playing field, at least it is fairer for dairy farmers regardless of where they are than the system we have today. I congratulate him for it. I am willing, in a spirit of bipartisanship, to move forward with the plan that the Secretary came up with. I will yield back to the gentleman from Wisconsin and maybe we can talk a little more about this cartoon. As I say, it would be a whole lot funnier if it was not true.