Kay Hutchison

Mrs. HUTCHISON

Mrs. HUTCHISON. Mr. President, I ask unanimous consent that the Committee on Agriculture, Nutrition, and Forestry be authorized to meet during the session of the Senate on Tuesday, April 11, 2000, at 9:30 a.m., in SR-332, to conduct a full committee hearing to consider the nomination of Christopher McLean to be Administrator for the Rural Utilities Service for the Department of Agriculture and to examine how likely reductions in the use of MTBE in reformulated gasoline will affect the demand for renewable fuels.

Mrs. HUTCHISON

Mrs. HUTCHISON. I commend my colleague from Maine for submitting this resolution. It is very similar to a resolution I submitted 2 years ago. Unfortunately, the U.S. Trade Representative has not taken this cause as a serious cause. I hope with bipartisan support on Senator Collins' resolution the U.S. Trade Representative will see this is an issue on the northern border and on the southern border. It is a very serious issue that severely disadvantages retailers in the United States and also is a handicap for the consumers in both Canada and Mexico that want to purchase big items such as television sets, refrigerators, washing machines, and dryers available on the borders that they are not able to purchase without huge tariffs. We passed the North American Free Trade Agreement to do away with tariffs so we would have free and open trade across our borders. It is not working when it comes to retailing in that cross border area where people walk back and forth. Parity is achieved if you fly in and out of our three countries, but not if you go across by car. It is a terrible inequity. I hope Senator Collins' resolution gets the attention of our U.S. Trade Representative about the seriousness of this issue. I commend her for the resolution.

Mrs. HUTCHISON

Mrs. HUTCHISON. Mr. President, I ask the majority leader to yield for a question. I am confused. It appears the distinguished deputy minority leader suggested you were not conducting the Senate like the Senate. Yet you have offered to go forward on the bill, you have offered to have the Democratic amendment that is a substitute come forward, and you have offered to go into morning business so that no one is obligated. The alternative, it seems to me, is to shut down the Senate entirely. I don't think that is conducting the business of the Senate as the Senate should be conducted. I ask the distinguished leader, does it appear that the distinguished group from the minority doesn't want to debate the marriage tax penalty at all and would prefer to shut down the Senate rather than talk about this very important tax correction for the hard-working people of this country?

Mrs. HUTCHISON. Parliamentary inquiry: What is the time allocation between now and 10 minutes after 4 o'clock?

Mrs. HUTCHISON

Mrs. HUTCHISON. Thank you, Mr. President. I yield the floor.

Mrs. HUTCHISON. Mr. President, at this time the other speakers on our side have not arrived. I will yield back the time, with this reservation: Before the vote on this cloture motion, is there time equally divided for further debate?

Mrs. HUTCHISON. Mr. President, the Senator from Florida has a unanimous consent agreement that would allow him to introduce his bill. Let's go forward, and if there is someone on our side, I will be happy to relieve the Chair.

Mrs. HUTCHISON. Mr. President, I do not object to the Senator from Florida going forward because the speakers on my side have not arrived. If, after he has finished his 10-minute presentation, we do not have our speakers, then I will yield the remainder of our time. If we do, I will continue to pursue our debate.

Mrs. HUTCHISON. Mr. President, I have been listening to the debate on the repeal of the 4.3-cent-a-gallon gasoline tax. I think perhaps there is a misunderstanding of what this resolution does. I will reiterate it. The bill which Senator Lott has introduced, along with Senator Murkowski and myself, gives a Federal fuels tax holiday that would suspend through the end of this year the 4.3-cent-per-gallon gas tax that was put on about 3 or 4 years ago. If the average gasoline price in our country reaches $2 a gallon, it would suspend for the rest of this year the entire 18.4-cent-per-gallon Federal excise tax on gasoline. The bill specifically holds harmless all of the trust funds. Social Security, and the highway trust funds would not be affected. So we would make up any lost revenue from other sources, not the highway trust fund. I do not think the highway contractors should be alarmed. The highway contracts are going to go out just as they have been. We are now 2 years ahead in contracting. There will be no suspension of the contracting under the highway trust fund. I think our highways are a first priority, and I do not think the highway contractors should be concerned in any way that that is going to lessen to any degree. It is very clear what this does. It says to the traveling public, it says to the family trying to take a vacation, it says to the truckers who are depending on a gasoline price that is stable, so they know what that price is going to be, approximately, when they make their contracts to haul goods back and forth in our country, we are going to have a suspension of up to 18 cents a gallon until prices come down to a level that is reasonable and that could have been anticipated when a contract was made. Airline passengers are paying $75 one way on most trips across this country because of this gasoline price increase. We need to respond to something so basic to so many people, and that is the transportation costs--for people to take a family vacation, to drive to and from work, or for their very livelihoods, if they are truckers. We are going to respond to this crisis. I have heard people from foreign countries say: I do not know what you Americans are complaining about; we pay $4 a gallon in Europe--in Brussels, in London. That is not the price on which our economy is based. We travel greater distances. We have an economy that is based on gasoline prices in the $1- to $1.40-a-gallon category. That is an important part of the cost of doing business in our country. Furthermore, we do have the ability to control our own destiny. We do have the ability to drill and explore in our country. Many private businesses, small businesses, want very much to do that. They want to be able to drill a well as small as one producing only 15 barrels a day. To put that in perspective, a 15-barrel-a-day well is a very small well. The average well in Alaska produces 650 barrels a day. In the Gulf of Mexico, it could be 10,000 barrels a day. We are talking 15 barrels a day. Our small businesses can continue to do business and make a modest profit on a 15-barrel-a-day well, but they have to know the price is going to be somewhat stable. When oil prices went down to $9, $10 a barrel, 2 years ago, these little guys could not make it. These little producers are small businesses, and they could not break even on $9 or $10 a barrel. What I would like to propose is that we pass the bill before us today to give instant relief to the consumers and business people in our country, but that we look at the longer term issue as well, and that is, what can we do to encourage our small businesses to be able to stay in business, drilling wells that produce 15 barrels a day or less? If they will stay in business, they will produce the same amount we import from OPEC today. That is the important issue. We will not be at the whim of OPEC, to have huge price spikes, if we will encourage our own people to explore and drill even the small wells. There is another advantage of that, and that is it keeps the jobs in America. Today we are going to foreign countries and producing because it is cheaper to do it over there in OPEC countries or in Mexico or Venezuela. It is cheap to do it there. That does not create American jobs; it creates jobs in foreign countries. If we pass the bill before us today and say we are going to give relief immediately to the people who are driving to work, the people who depend on a stable price as they drive their trucks carrying goods back and forth across the country, I am saying let's look at the long term, too. Let's look at the stable price that is necessary for them to enter into contracts that will keep them in business. Let's do it by encouraging our small producers to take the risk to go out and drill either a dry hole or one that would produce up to 15 barrels a day, by giving them a tax credit if the price goes below $17 a barrel, so they can stay in business, much as we do for farmers when the prices they can get on the open market do not allow them to break even. We want the farmers to stay in business so they will be able to continue to provide food for our country and for export. Why not do that for a small producer? If that well produces 16 or more barrels a day, no tax credits, because the margin, then, is much higher and they will be able to break even in the low-price times. I am saying let's give immediate relief and let's look at the long term, let's do something that will be a win-win for our country, something that will provide more price stability so we will not have the price spikes we are seeing now. We do that by stopping our 56- percent dependence on foreign imports for the fuel we require every day in this country. Let's do it by creating more American jobs for small businesses, and let's keep those jobs in America so we will be more self-sufficient and more in control of our own destiny. I hope my colleagues will pass the bill that is before us today, give the instant relief, and say we are going to protect the highway fund absolutely, so the contracts can continue to be let and our highways will continue to be built and improved and maintained. I yield the floor and reserve the remainder of my time.

Mrs. HUTCHISON

Mrs. HUTCHISON. Mr. President I yield up to 10 minutes to my colleague from Maine, Senator Collins.

Mrs. HUTCHISON

Mrs. HUTCHISON. Mr. President, I ask for the yeas and nays.

Mrs. HUTCHISON. Mr. President, the Senator from New Mexico is absolutely right. We are going to take care of Medicare. We are going to have reform that includes prescription drugs of some kind. But we are saying a good idea is in the wrong place, and it is going to absolutely eliminate the ability for us to correct a huge inequity in the Tax Code. This is not a tax cut. It is a tax correction. Twenty-one million American couples pay an average of $1,400 extra just because they got married. A policeman and a schoolteacher get married and owe $1,000 more in taxes. This is wrong. We must go on record saying that we are not going to tolerate it for one more minute. The Robb amendment eliminates our ability to do that. We cannot allow the Robb amendment to vitiate all the efforts that we have made to correct the marriage penalty tax in this country. We will deal with prescription drugs. We will deal with Medicare. We are committed to doing that, and we are committed to doing it in this budget. Thank you, Mr. President. I urge rejection of the Robb amendment and the passage of the Hutchison-Ashcroft amendment.

Mrs. HUTCHISON

Mrs. HUTCHISON. Mr. President, I thank Senator Coverdell for his remarks. He laid out the fairness question very well. I thank him for the leadership he has provided in trying to give tax relief to hard- working American families on several fronts. Of course, he was the leader helping people give their children extra education benefits. Unfortunately, that bill was vetoed last year by the President, and hopefully, having passed it again this year, the President will give that area of tax help to the hard-working families who want to send their children to college or who want to buy a computer for their child in elementary school. That has been led by Senator Coverdell. Certainly, Senator Coverdell is now helping lead the effort on reduction of the marriage penalty tax because, of all the Tax Code inequities, this is the biggest. It affects the most people. It is the biggest tax cut that should be given. It is a fairness question. If one is a policeman and making $30,000 a year and marries a schoolteacher, why should they pay $1,400 more in taxes just because they get married? There was no promotion, no bigger salary but the same salaries, two people, and they got married. They pay $1,400 more a year in taxes. It hits the schoolteacher and the policeman the hardest. It is the people making that $25,000 to $35,000 who get hit the hardest. Yet that is the couple trying to save to buy a home for their family or to upgrade a home or to buy the second car or to go on a family vacation. This is money that should not be spent by the Federal Government; it is money that should be spent by the people who earn it. That is the question today. We are going to continue to debate the issue of the marriage penalty tax, and we will be testing people to see what their priorities are. Why would we continue to have this inequity in the Tax Code when we can fix it? We can fix it, and we are going to have the opportunity to do that the week people are beginning to pay their taxes. We are going to take this bill up the week of April 10, so that when people are filling out their tax forms, they can look at that standard deduction and say: My goodness, I am a married person and my standard deduction is $7,350 and it should be $8,800. If the bill that will be before the Senate on April 10 is passed, it will be $8,800 next year, and this year will be the last year that a married couple has to pay more taxes because of the standard deduction inequity. I thank the Presiding Officer, and I thank the Senator from Georgia. I urge my colleagues to look at this issue. Let's focus on doing away with this inequity as soon as we possibly can. I yield the floor.

Mrs. HUTCHISON. Mr. President, parliamentary inquiry: What is the time remaining on my 30 minutes?

Mrs. HUTCHISON. Mr. President, I rise today to talk about the marriage tax penalty. We are trying not so much to give a tax cut to married couples but to make a tax correction. It is not the business of Government to say that when you are married your taxes should be higher. The Tax Code should be blind. It should be fair to all. Any single person making $35,000 a year marrying someone making $35,000 a year should not automatically go into a higher tax bracket. In fact, under today's Tax Code, that is exactly what happens. It is one of the most egregious oversights of our tax system that we must address. It is estimated that 21 million married couples pay a marriage penalty; about 48 percent of people in this country who are married pay a penalty for being married. The question is, What can we do to correct that inequity? This is not just a tax cut. It is a tax correction. Yesterday, Senator Roth revealed his plan that will go to the Finance Committee for markup, hopefully, tomorrow. It is a very solid beginning. His plan, first and foremost, does something that will affect every single married couple: It doubles the standard deduction. Today, the standard deduction is $7,350 for a married couple. It is $4,400 for singles. One would think a married couple would get $8,800. That is not the case. They get $7,350. Regardless of the tax bracket, there is a marriage tax penalty from the standard deduction. Senator Roth's bill doubles the standard deduction next year. Second, the bill starts with the lowest tax bracket, the 15-percent bracket. Over a 6-year period, starting in 2000, that bracket will be doubled for married couples. This is an $8,650 increase that allows people to continue paying in the 15-percent level for $8,650 more. Basically, that means if someone today is making up to $43,000 as a married couple, they are in the 15-percent bracket. We raise that to $52,500. As a married couple making about $26,000 a year, they will stay in the 15-percent bracket and will not have that penalty. It is important for people to know that everyone pays up to the $52,000 in the 15-percent bracket. Even if you go up to the 28-percent bracket or the 36-percent bracket, you will also get that 15-percent bracket relief. It was my hope to double the 28-percent bracket, as well, because this is where most people get hit the hardest. A policeman who marries a schoolteacher gets hit in that 28-percent bracket. They are making approximately $30,000 each. They would not be fully covered under the bill that will go to markup. There will be opportunities to increase that bracket to 28 percent, which is what we hope to do. We want to go up to about $120,000 in joint income to do away with that penalty for married couples. We will take the 28-percent bracket up to about $126,000. A 28-percent tax bracket is almost a third of what a person makes, so with salaries of $40,000 or $50,000, it is a pretty big hit, especially if you have children and are trying to do the extras for their education. We have the 15-percent bracket doubling, starting in 2000. We want to make that 28 percent, but even if we can do the 15 percent, it is certainly a step in the right direction, saying to people they should not be penalized because they chose to get married. The penalty is not small. The average is about $1,400 more that people pay. If they are making $28,000 a year or $40,000 a year and have to pay $1,400 more in taxes, that is a lot of money, money that could be saved for the first downpayment on a house. It is money that could be put on car payments, mortgage payments, or a family vacation. This is the time in people's lives when they need the money the most, when they are a young couple, just beginning. They do not have a nest egg yet. To tax them $1,400 more a year is a heavy penalty. There is no reason for it. We should not make the choice for people that if they get married they must pay more taxes. The alternative minimum tax is also reformed in Senator Roth's plan. The alternative minimum tax is a tax that is levied on people. An alternative minimum tax is levied perhaps because too much of their income is tax free. This has begun to hit more and more people. The alternative minimum tax has begun to hit people who make $75,000 a year as married couples. This keeps them from having the $500-per- child tax credit fully given; it keeps them from getting the Hope scholarship money fully given; it keeps them from having an adoption credit fully given. It takes away the value of those credits. We say to people: You get a $500-per-child tax credit because we want you to have more of the money you earn, but if you make over $75,000 a year, we will take part of that credit away. We want to make those types of tax credits, the nonrefundable tax credits, whole for people, regardless of where they are in the system. We don't want the marriage tax penalty to encroach on that, as well. We are trying to exempt those nonrefundable tax credits from the AMT. We also increase the earned-income tax credit for low-income couples, so if a person chooses to go to work and get off welfare, which is what we are encouraging them to do, we don't want to punish them by taking away their earned-income tax credit. It is ironic that today we say to a married couple: You will pay more in taxes than if you had stayed single. We have a higher tax burden in our country today in peacetime than any time since World War II. We are trying to take away some of that tax burden on hard-working Americans. We find with many couples that both work because the tax burden is so high. They are trying to do extra things for their children. In order to meet all of their needs and the extra requirements they have for giving their children a good education, they are having to go to work. That second income is penalizing that spouse who decides to leave the home and go into the workplace. This is wrong. It is time to end this unfair part of our Tax Code. We started trying to correct this inequity 3 years ago. We sent President Clinton a bill that had marriage tax penalty relief in it and the President vetoed that bill. It is very important that President Clinton look carefully at this particular bill. It hits people at the lower and middle-income level. The President has said he is for income tax relief for middle-income people. He has said that in public statements. But, in fact, he has vetoed the marriage tax penalty relief we have sent him. I hope this is going to be a clean bill. I hope it will be a bill that is not amended with extraneous amendments that are not marriage tax penalty amendments. If we can send that clean bill, then I think the President will have some explaining to do if he does not sign it to give this relief to hard-working American couples. We are about 20 days away from having to file the income taxes for 1999. April 15 is the day. April 15 is Saturday, so we get a reprieve until April 17. But when people are filling out their income tax returns in the next few weeks, I hope they will think of this marriage penalty that most people are paying in this country. I hope they will realize Congress is trying to give people relief. Congress is trying to double the standard deduction, so when you are filling out your form in the next 20 days, realize if you are married, your standard deduction is $7,350. Under our plan it would be $8,800 that would be totally exempt from taxation. Furthermore, we would give you about $8,000 more over the next 6 years in the 15-percent bracket. So whereas today you would start going into that 28-percent bracket at $43,000, we are going to give you up to $52,000 over a 6-year period with the bill that is going into the Finance Committee tomorrow. We are hoping we can even expand that to the 28-percent bracket so more people will pay at the lower bracket levels. This will help every single tax-paying American who is married and paying this penalty. I hope very much the President of the United States is listening. I hope we can pass this clean marriage penalty bill through the Senate. We have a good start in the House bill. We have a good start from the Senate Finance Committee mark. I hope we can even make it better. With a relatively small addition, I think we can. I think we can go from the 15-percent to the 28-percent bracket--doubling. That will give significant relief to the most taxpayers in this country. Most people pay in the 15- and 28-percent brackets. That is where I think we need the relief. I urge my colleagues to work with us on this marriage penalty relief. I urge the President to listen to the hard-working people of this country who are saying: We need relief, and most of all, we need fairness in our tax system. It is not fair to tax people because they are married. I see my colleague from Georgia is on the floor. My colleague from Georgia has been one of the early cosponsors of this marriage tax penalty relief. He has been a stalwart defender of fairness in our Tax Code and fairness in our tax system. I appreciate that he is here and I yield the floor to the Senator from Georgia.

Mrs. HUTCHISON

Mrs. HUTCHISON. Mr. President, on March 7, 1959, history was made when the first aviator charted over a million miles in a jet. Although it seems commonplace today, at the time, traveling a million miles was indeed, an aviation milestone. Well, today, more than forty years later, we are considering another aviation milestone of sorts: a reauthorization of the Federal Aviation Administration which will be of significant benefit to our nation's communities, our air infrastructure and the flying public. I represent a state that has an enormous amount of aviation. Texas is home to one of the Nation's busiest airports, DFW, but we also have 27 other primary airports, 21 designated reliever airports and more than 1600 other small airports that Texans depend upon to get from one place to another. Therefore, I recognize the importance of aviation to my state, the critical role my state plays in the national aviation system and the important of Airport Improvement Program funding in maintaining it. This bill provides a framework and the necessary tools to responsibly and substantially fund our nation's air infrastructure as we have never done before. For the first time we will guarantee that all receipts and interest in the Air Trust Fund--totaling more than $33 billion--will be spent over the next three years for only aviation purposes. We will enhance air safety, allow local areas to provide for their financial needs, and assist our traffic controllers in watching our skies and protecting the flying public. The Airport Improvement Program, on which so many of our airports rely, will see an increase of $1.9 billion this year alone. It will increase to as high as $3.4 billion over the next four years. This funding will allow our airports to make necessary improvements to their existing facilities and expand to accommodate the amazing growth that all of our nation's airports have seen in recent years. Additionally, the Military Airport Program, which helps to assist our current and former military airports by providing funds for needed structural improvements, will see a boost from twelve airports to fifteen designated and eligible this year, and 20 designees, thereafter. In Texas, we are affected by both national and international air traffic growth. Traffic to Latin America in the next few years is set to exceed capacity and place an even larger burden on neighboring air route systems. This will affect traffic in the Gulf of Mexico, in particular, where traffic is controlled in large part by the air traffic control center in Houston. In fact, this is one important area where improvements are greatly needed. A large portion of the Gulf of Mexico remains without visual communication on radar, nor sufficient two-way communication, in general. Traffic in much of the gulf is controlled solely by one-way radio communications. The Gulf of Mexico airspace accommodates passenger airlines serving destinations worldwide, cargo and general aviation traffic engaging in air commerce, and heavy helicopter traffic serving the offshore petrochemical industry. It also serves important users such as our armed forces, Coast Guard, Customs Service, and the Drug Enforcement Agency. All aircraft, from large commercial planes, to military aircraft, to helicopters need to have direct two-way communication to protect the safety of all those who fly these skies. Currently, if a craft hits turbulence due to poor weather and seeks to ascend or descend the pilot must radio in to a controller, who must check the frequency and the surrounding traffic and then dial and pilot back and advise him on altering his position. One-way communication alone simply to reach the controller can take as long as seven minutes, and as long as fifteen minutes total to relay back to the controller. This is unacceptable for a pilot who needs to respond immediately to escape violent turbulence and blindly must change his altitude. This frightening scenario could be all too real and common as air traffic grows. The FAA Gulf of Mexico Task Force was formed to highlight the problems in the gulf and recommend solutions. More than 100 individuals representing the Federal Aviation Administration, airlines, the military, and others in the industry have come together to address this problem and seek an expeditious and thorough remedy. We can wait no longer to let this safety hazard go unaddressed. This bill gives the FAA the tools to begin to remedy this situation. This bill is a step in the right direction to provide for our aviation needs, both on the ground and in the sky. By putting our Aviation Trust Fund dollars to work we can help all airports large and small provide for their needs. We can ensure that our skies are safe, our airports are secure and that our controllers have modernized tools to accommodate the growing air traffic demand. I am pleased that the Senate has decided to pass this important legislation.

Mrs. HUTCHISON

Mrs. HUTCHISON. When the price goes to $18 a barrel, there are no tax credits--nothing--because they can make it on their own.

Mrs. HUTCHISON. They couldn't exist when prices fell to $11, $10, or $9 a barrel. They cease to exist. Some of them will never come back.

Mrs. HUTCHISON. That is exactly right, and 250,000 barrels a day could come on line practically immediately.

Mrs. HUTCHISON. I think the chairman is exactly right. In fact, if we helped these small stripper wells and these little guys so they could afford to go back in and drill again, we would be creating the same number of barrels as we import from Saudi Arabia. They could produce 250,000 barrels almost immediately if they knew there was a policy that would protect them against a drop because then they could afford to make the investment.

Mrs. HUTCHISON. That is exactly right.

Mrs. HUTCHISON. Mr. President, I thank the Senator from Alaska, the chairman of our Energy Committee, for taking the lead on this very important issue. Not one person who drives a car in this country or rides on an airplane can fail to realize what is happening--that we have oil prices that are going through the roof and it is affecting every one of us in our daily lives. The sad thing is that this could have been avoided. We had the opportunity to present an energy policy in this country that would not make us beholden to foreign oil resources. In fact, when President Clinton took office, we imported 48 percent of the oil needs in our country. Today, it is approaching 56 percent. Over 50 percent of the oil needs in our country are imported. I am going to vote for all the quick fixes that we can to get prices down as quickly as possible because it does hurt people who have to drive for a living, or those who are planning family vacations, to have this kind of added expense they didn't count on. But if we do a short- term fix without a long-term fix, we are doing nothing to solve the real problem in this country--that we are consuming more oil than we are producing and we are too dependent on foreign sources. I want to help the people in the Northeast who are suffering from terrible heating oil shortages and high prices. I want to help every American who is driving a car and seeing $50 register on the gasoline pump. I want to make sure we realize we can do something to make our own country more self-sufficient and these are things that will be good for everyone. When prices were so low that small producers could not break even--in 1997 and 1998--we lost much of the small business in our country that is in oil production. I have a great empathy for farmers in our country, as does Congress and the President. So when prices are artificially low for agricultural products, we do something for the small farmer to make sure they can stay in business because they are the bread basket of America and it is in all of our interests to do that. But somehow, when we talk about small oil producers, people don't think of that as a small business. They think of oil as big oil. They think of it as J.R. Ewing. That is not the small producer in our country. A normal well in our country would be putting out 1,000 barrels. In Alaska, they put out 6,000 barrels a day. When we talk about a marginal well, we are talking about a 15-barrel-a-day quantity; the output is 15 barrels a day. This is a very small, low-profit-margin well. These are small businesses that are creating jobs in America. What I want to do as part of a long-term solution is help those small producers when prices go so low that they have to go out of business and close their wells. In 1997 and 1998, 20 percent of these producers were put out of business because prices were $7, $8, $9 a barrel and they could not break even. Once a well is shut in, they pour concrete down the hole, so it is very expensive to reopen it. Now, to put this in perspective, you might think, why would we want to save a 15-barrel-a-day well? The reason is that all of those small wells, put together--about 500,000 of them across the country--can create the same amount of oil as we import from Saudi Arabia. So if we can keep these little guys in business, that creates a base for our country that does make a difference--the same amount of oil we import from Saudi Arabia that we are getting in our own country, creating jobs in our own country, creating taxpaying citizens, paying taxes to school districts, paying sales taxes to our States and income taxes to the Federal Government. So this is not a loss to the Federal Government; this is a win for everyone. In my State of Texas, where they have given tax breaks to small producers--the 15-barrel-a-day producers--they have reopened wells and they have put over a billion dollars into the economy of the State just by giving incentives for these small guys to stay in business. So if we can do this when prices fall below $17 a barrel, we will create revenue for our States and Federal Government, jobs for American people, and we will create more oil so the price is stabilized, so we won't see the spikes caused by foreign countries deciding they are not going to produce. It is a win for everyone. This is not big oil. The big oil companies rarely, if ever--I would say never, but I could be wrong; maybe there is a well out there that is 15 barrels a day, but it is not the kind of thing big companies do. But it is a livelihood for a small producer, and we should treat them like a small family farmer because it is in our interest to do so. It doesn't hurt us in revenue, it helps us. My addition to the long-term solution here is to help producers who are drilling wells that produce 15 barrels a day, or less, by giving them a tax credit for the first 3 barrels of the 15 barrels when the price falls below $17 a barrel. That is it. If it goes to $18 a barrel, there is no tax credit because then they can break even on their own. But when it falls below $17, then they need that help to keep those jobs, to keep that well pumping until they get to $18 a barrel. Frankly, if we did this, the prices would stabilize and we wouldn't have the lows and the highs. I commend our chairman, Frank Murkowski, for putting together a package. I wish we had an energy policy from the administration. I hope they will work with us. Our package says we are going to lower the gasoline taxes immediately until prices go back up to the $17 or $18 a barrel level; we are going to give help to people who need help in extra funding for fuel oil; we give help to the truckers who rely on fuel prices being at a steady level when they make contracts. We will do the short-term fixes. But we must address the long-term problems. If we did, we could pump immediately 250,000 barrels a day in our country with the small guys, with the little guys--the little oil producers who would reopen a well or believe they could make the investment to go back in and start drilling again--and start our production so we would not be totally beholden to foreign countries for our energy needs. I hope our package is not just short-term fixes because if it is, we will be walking away from the responsibility of Congress to have an energy policy that will for the long term stabilize prices at a reasonable level so we can keep jobs in America and so we can have the security that we will not import more than 50 percent of the needs of our country. Thank you, Mr. President.

Mrs. HUTCHISON. Yes.

Mrs. HUTCHISON

Mrs. HUTCHISON. Mr. President, I am pleased today to introduce with my colleague from Louisiana, Senator Breaux, and the other cosponsors of the bill, the Marginal Well Preservation Act of 2000. This bill represents a necessary and workable proposal to ensure that the United States does not lose even more of its domestic energy production and to help prevent the further escalation of gasoline, diesel, and home heating oil prices for consumers. Mr. President, just a few days ago, on March 18, President Clinton announced his support of a number of provisions to respond to the recent spike in oil and gasoline prices in America. Among the issues to which he referred, I was most pleased and surprised to hear the president express his support for, quote, `tax incentives . . . for domestic oil production,' enquote. Well I for one welcome the President's long overdue endorsement of an issue that I and many other Senators have been promoting, discussing, and introducing legislation on for years. It is unfortunate that the President's newfound support for domestic oil production comes now, rather than a year ago when our domestic producers were being wiped-out by record low oil prices and when communities across Texas and other states were having their economic and tax base decimated. Nevertheless, I do welcome the president's comments, and I urge him to now turn those comments into action. I publicly urge him and the Treasury Department to pledge to sign into law, and to urge Congress to pass, the bill we are introducing today. Called the Marginal Well Preservation Act of 2000, this bill borrows from legislation I introduced earlier this year to create incentives to keep marginal wells (those producing fewer than 15 barrels per day--and a corresponding level for natural gas) in production during times when oil and gas prices fall below break-even. The bill also contains provisions that the Administration explicitly endorsed over the weekend: the same-year deduction of geological and geophysical (exploratory) and delay rental costs associated with lease development. Taken together, these two provisions will help ensure a minimal level of protection for our nation's independent oil and gas producers and will help prevent America from becoming even more dangerously dependent on foreign oil. Mr. President, in addition to the President's recent round of proposals, tt seems as if everyone these days has their own ``quick fix'' to address the recent spike in oil and gas prices. But regardless of what short term solutions may be proposed, as America slips further and further into dependence on foreign oil the volatility of oil and gasoline prices is almost certain to get worse. The only logical response to this crisis is to increase our domestic supply of oil and gas. Much of the estimated 350 billion barrels of our domestic oil reserve lies not on public lands, but on private property where oil and gas production already occurs. Why isn't that oil and gas being produced? The answer is that much of it is in small pockets and is relatively difficult to retrieve. Such ``marginal well'' production accounts for roughly 20 percent of our domestic oil production, or about as much as we import from Saudi Arabia. But while these wells are critical to our energy security, they are the most susceptible to oil price crashes, like we saw during 1998 when oil fell below $10 per barrel. During this time we lost over 65,000 American jobs and over 150,000 marginal oil and gas wells. And despite the high price of oil today, the small, independent producers that own the majority of marginal wells cannot assume the economic risk of re- opening them because there is no assurance that the price of oil will not again fall in the near future (see enclosed article). The Marginal Well Preservation Act will provide a tax credit of $3 per barrel for the first three barrels of production when oil falls to between $17 and $14 per barrel for oil, and a corresponding price for natural gas. This represents the average break-even price for these wells. In states like Texas, where marginal well tax incentives have been enacted, the result has been to keep thousands of wells open that would have been closed, and thousands of American jobs here that would have moved overseas. Such a tax credit at the federal level would reduce our dependence on foreign oil and help us meet our growing demand for natural gas. If we were to enact the marginal well tax credit today, we would not only ensure a long-term safety net for producers, but we would also create an incentive today to re-open those shut-in wells. In fact, a reasonable estimate is that, within a reasonably short period of time, we could bring half, or 75,000 of those shut-in wells back into production. This would mean an addition of about 250,000 barrels of daily production. Given that America uses 19 million barrels of oil per day this may not seem like much, but when one considers just how tight the supply of oil is today, this relatively small increase in production could have a significant impact in the price of crude oil and oil products like gasoline and diesel fuel. In addition, Mr. President, this bill brings the U.S. Tax Code in line with the present-day realities of the oil and gas industry by allowing oil and gas exploration (geological and geophysical) costs to be expensed rather than capitalized, and by allowing delay rental lease payments to be deducted in the year in which they are paid, rather than when the oil is actually pumped. The Administration's own endorsement of this measure, which I and others have been promoting for years, should mean it's quick enactment into law, and I hope that it does. In fact, the Administration estimates that allowing the expensing of exploration costs alone could spur an additional daily production of 126,000 barrels, on top of the roughly quarter million barrels that the marginal well provision would bring back in the near-term. For those keeping score, that totals almost 400,000 barrels of added daily production that can conservatively be expected to result from the passage of this bill. But it must be done soon. We are quickly approaching a $2 per gallon nationwide price for gasoline, and we have not even entered the peak vacation driving season. Americans need relief now, and this bill will give it to them. Mr. President, this legislation is long overdue, and I appreciate the support of Senator Breaux and my other colleagues who are cosponsoring the bill. Most importantly, I urge the President and my other colleagues in the Senate, particularly those from non-energy producing states, to join with us in supporting this effort. High prices and low prices are two sides of the same coin, and it is high time we realize that. Price dives are as detrimental to producers as price spikes are to consumers. We can break this cycle, and we can do it now by passing the Marginal Well Preservation Act. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mrs. HUTCHISON

Mrs. HUTCHISON. Mr. President, I am pleased today to introduce with my colleague from Louisiana, Senator Breaux, and the other cosponsors of the bill, the Marginal Well Preservation Act of 2000. This bill represents a necessary and workable proposal to ensure that the United States does not lose even more of its domestic energy production and to help prevent the further escalation of gasoline, diesel, and home heating oil prices for consumers. Mr. President, just a few days ago, on March 18, President Clinton announced his support of a number of provisions to respond to the recent spike in oil and gasoline prices in America. Among the issues to which he referred, I was most pleased and surprised to hear the president express his support for, quote, `tax incentives . . . for domestic oil production,' enquote. Well I for one welcome the President's long overdue endorsement of an issue that I and many other Senators have been promoting, discussing, and introducing legislation on for years. It is unfortunate that the President's newfound support for domestic oil production comes now, rather than a year ago when our domestic producers were being wiped-out by record low oil prices and when communities across Texas and other states were having their economic and tax base decimated. Nevertheless, I do welcome the president's comments, and I urge him to now turn those comments into action. I publicly urge him and the Treasury Department to pledge to sign into law, and to urge Congress to pass, the bill we are introducing today. Called the Marginal Well Preservation Act of 2000, this bill borrows from legislation I introduced earlier this year to create incentives to keep marginal wells (those producing fewer than 15 barrels per day--and a corresponding level for natural gas) in production during times when oil and gas prices fall below break-even. The bill also contains provisions that the Administration explicitly endorsed over the weekend: the same-year deduction of geological and geophysical (exploratory) and delay rental costs associated with lease development. Taken together, these two provisions will help ensure a minimal level of protection for our nation's independent oil and gas producers and will help prevent America from becoming even more dangerously dependent on foreign oil. Mr. President, in addition to the President's recent round of proposals, tt seems as if everyone these days has their own ``quick fix'' to address the recent spike in oil and gas prices. But regardless of what short term solutions may be proposed, as America slips further and further into dependence on foreign oil the volatility of oil and gasoline prices is almost certain to get worse. The only logical response to this crisis is to increase our domestic supply of oil and gas. Much of the estimated 350 billion barrels of our domestic oil reserve lies not on public lands, but on private property where oil and gas production already occurs. Why isn't that oil and gas being produced? The answer is that much of it is in small pockets and is relatively difficult to retrieve. Such ``marginal well'' production accounts for roughly 20 percent of our domestic oil production, or about as much as we import from Saudi Arabia. But while these wells are critical to our energy security, they are the most susceptible to oil price crashes, like we saw during 1998 when oil fell below $10 per barrel. During this time we lost over 65,000 American jobs and over 150,000 marginal oil and gas wells. And despite the high price of oil today, the small, independent producers that own the majority of marginal wells cannot assume the economic risk of re- opening them because there is no assurance that the price of oil will not again fall in the near future (see enclosed article). The Marginal Well Preservation Act will provide a tax credit of $3 per barrel for the first three barrels of production when oil falls to between $17 and $14 per barrel for oil, and a corresponding price for natural gas. This represents the average break-even price for these wells. In states like Texas, where marginal well tax incentives have been enacted, the result has been to keep thousands of wells open that would have been closed, and thousands of American jobs here that would have moved overseas. Such a tax credit at the federal level would reduce our dependence on foreign oil and help us meet our growing demand for natural gas. If we were to enact the marginal well tax credit today, we would not only ensure a long-term safety net for producers, but we would also create an incentive today to re-open those shut-in wells. In fact, a reasonable estimate is that, within a reasonably short period of time, we could bring half, or 75,000 of those shut-in wells back into production. This would mean an addition of about 250,000 barrels of daily production. Given that America uses 19 million barrels of oil per day this may not seem like much, but when one considers just how tight the supply of oil is today, this relatively small increase in production could have a significant impact in the price of crude oil and oil products like gasoline and diesel fuel. In addition, Mr. President, this bill brings the U.S. Tax Code in line with the present-day realities of the oil and gas industry by allowing oil and gas exploration (geological and geophysical) costs to be expensed rather than capitalized, and by allowing delay rental lease payments to be deducted in the year in which they are paid, rather than when the oil is actually pumped. The Administration's own endorsement of this measure, which I and others have been promoting for years, should mean it's quick enactment into law, and I hope that it does. In fact, the Administration estimates that allowing the expensing of exploration costs alone could spur an additional daily production of 126,000 barrels, on top of the roughly quarter million barrels that the marginal well provision would bring back in the near-term. For those keeping score, that totals almost 400,000 barrels of added daily production that can conservatively be expected to result from the passage of this bill. But it must be done soon. We are quickly approaching a $2 per gallon nationwide price for gasoline, and we have not even entered the peak vacation driving season. Americans need relief now, and this bill will give it to them. Mr. President, this legislation is long overdue, and I appreciate the support of Senator Breaux and my other colleagues who are cosponsoring the bill. Most importantly, I urge the President and my other colleagues in the Senate, particularly those from non-energy producing states, to join with us in supporting this effort. High prices and low prices are two sides of the same coin, and it is high time we realize that. Price dives are as detrimental to producers as price spikes are to consumers. We can break this cycle, and we can do it now by passing the Marginal Well Preservation Act. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.