Kay Hutchison

Mrs. HUTCHISON

Mrs. HUTCHISON. Mr. President, I ask unanimous consent that the Committee on Agriculture, Nutrition, and Forestry, be allowed to meet during the session of the Senate on Thursday, September 23, 1999. The purpose of this meeting will be to (1) to examine the impact of electronic trading on regulation and (2) to consider the nominations of Paul Riddick to be Assistant Secretary of Agriculture for Administration and Andrew Fish to be Assistant Secretary of Agriculture for Congressional Relations.

Mrs. HUTCHISON

Mrs. HUTCHISON. I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mrs. HUTCHISON. I have 5 minutes under a unanimous consent. I didn't interrupt the Senator from Florida, and I would like to finish my 5 minutes, if I can. The Senator from Florida talked about the ``rabbit warren'' of regulation. I want to put that chart up because it is a valid question. Is this the same as, or any worse than, the regulations that we have today? In fact, this whole segment of this chart isn't there today because today, if oil is sold at the wellhead, the Federal Government recognizes that is the price. Under the new regulation, we have this theory of procedures that would be required for a person who is selling at the wellhead to prove that was really the price because the Mineral Management Service reserves the right to second-guess the price that is actually paid. I say that there is a good case to be made that this is actually more complicated than it is today. I hope that we will not allow that to go forward. The third area that was mentioned by the Senator from Florida is, why is this coming up in this bill? He said: Why don't we have hearings? Why is this coming up in this bill? It is coming up in this bill because the Federal regulators are spending taxpayer dollars to perpetrate a tax increase on the hard- working people of this country who buy gasoline at the pump, and they are doing it with the appropriations that we are passing tonight. Of course, if we are going to have any say, if we are going to have the ability to exercise the responsibility of Congress to set tax policy in our country and determine that we are going to raise gasoline prices at the pump, we must act on the bill that gives them the money, and direct them as a Congress to not raise taxes on the people of America who buy gasoline for their cars every day. Last but not least, the Senator from Florida raised the question: Are we living up to the legacy of Theodore Roosevelt? I think it is important that we look at the money that we are spending to preserve our wildlife and preserve our natural habitat. I think that is a valid question. My answer is yes. That is not an issue in anything we are talking about tonight because if these companies don't agree to take care of the environment and clean up anything that might be built, then they will not get the lease. That is part of the least arrangement. So protecting the environment is not an issue, and, of course, we want to protect the legacy that we have been given by our forefathers and mothers of this wonderful country. Thank you, Mr. President.

Mrs. HUTCHISON. Mr. President, I want to take 5 minutes at this time to answer what questions were asked by Senator Graham from Florida. First of all, he asked: Why are we calling this a tax? This is really a lease payment, a condition for a lease. What I am concerned about is that he is willing to say we will change the terms of the lease during the term. If that is not an increase in a tax, I don't know what it is. It is a tax increase during the term of a lease. It changes the conditions of the lease, and it will raise the costs to oil companies. Who is going to pay the increased costs? Who always pays the increased costs on business? I am always amazed that people talk about taxing business and making business pay their fair share. When the business is going to sell the product, the business has to have a certain margin in order to stay in business and keep the jobs that it is creating. Of course, they have to raise the price of the product. That is exactly what is going to happen. This is the chart about which the Senator from Florida spoke. There is no question that the taxes at the top of the chart are 56 cents for a gallon of gasoline, and the oil is 64 cents. If you add more to the taxes, you are going to add more to the price of gasoline. This is a tax increase on the people who are going to pay for gasoline at the pump.

Mrs. HUTCHISON. Mr. President, I ask unanimous consent that I be allowed to speak for up to 5 minutes, following which Senator Boxer from California would be recognized for up to 10 minutes, after which Senator Murkowski would be recognized to speak for up to 5 minutes, and then I will close for up to 5 minutes.

Mrs. HUTCHISON. Mr. President, I am prepared to let the Senator start her time now. For Senators who are looking at our timetable, we have pretty much agreed we are looking at perhaps a 6 o'clock vote; 6 to 6:15, but we are pushing closer to 6.

Mrs. HUTCHISON. Mr. President, I thank the Senator from Montana because he has made a very important point from the independent producers' standpoint. We have seen independent producers go out of business at a greater rate than ever in the history of our country in the last year because oil prices were so low they could not keep their employees and they had to go out of business. They could not afford to drill because their costs were higher than the price they could get. The Senator from Montana so ably represents that small businessman, that small businesswoman who is out there in the field, working so hard to make ends meet, trying not to let his or her employees go in a bad time. Now we have a situation where we could be putting the last nail in the coffin of those who are left. So I am very pleased he talked about the independents and small producers. I am going to talk a little bit more about that because it has been said in this debate that we are only talking about 5 percent, the big oil companies. But that is not the case. In fact, the small oil companies, the independent producers, have written letters to us, to me, saying: Please do not let this happen. This is going to affect our ability to say the price we are actually getting at the wellhead will not actually be what we are taxed on. That is what the new rule would do. It would say to the independent producer that it doesn't matter what you actually are getting at the wellhead, if someone pulls up and takes their oil right out of the ground. You have to pay a tax on what we say is the market price. We are going to go to the New York Mercantile Exchange to determine the price. We do not care if it is Odessa, TX. If we say the price is $22 and you are getting $21, you are going to pay a tax on $22. Is this America? My heavens. These are the companies affected by this new MMS rule, and it is 100 percent of every company drilling, every company, small and large, that is going to have second-guessing of the prices, that is going to have indexing to the New York Mercantile Exchange, regardless of where they are, in Arkansas or West Virginia or Texas or Arizona. They will not be held to the determinations they make. So a small, independent producer who doesn't have a staff of lawyers isn't going to be able to say: OK, we have sold for $21 at the wellhead in Odessa, TX, and therefore, anyone else selling at the wellhead in Odessa, TX, take your chances. We may or may not say it is the same price. So every independent is affected. I appreciate the Senator from Montana pointing that out. Now I yield up to 5 minutes to the Senator from Kansas.

Mrs. HUTCHISON. Mr. President, we have heard so much rhetoric on the Senate floor about a former ARCO employee who testified that the oil companies were trying to cheat the State of California and the Federal Government. In fact, that ARCO employee was the very same person who was involved in the Long Beach lawsuit about which the Senator is speaking. I ask the Senator if it isn't true that the jurors rejected his testimony?

Mrs. HUTCHISON. Mr. President, will the Senator yield for a question on that very point?

Mrs. HUTCHISON. Yes, it will.

Mrs. HUTCHISON. Mr. President, I thank the Senator from Louisiana. I think he has shown exactly what the problem is, why what is being proposed is so unfair, and why we on a bipartisan basis have said to the MMS: We want you to go back to the drawing board, and we want you to do something that is fair, simple and understandable, and then we will be supportive. I thank him for his leadership in this area. Mr. President, I yield up to 10 minutes for the distinguished Senator from Oklahoma, the assistant majority leader, Mr. Nickles.

Mrs. HUTCHISON. Mr. President, I thank the Senator from New Mexico because we have talked earlier about taxing expenses. That is exactly what he is talking about. The idea that we would introduce into tax policy in this country the taxation of expenses is, A, outrageous, and, B, if it is going to be done, let us do it straight up; let us let Congress pass a law saying we are going to tax expenses. It won't just be oil companies; it will be other companies as well. Of course, I think that is a bad policy because I can't imagine we would do something that would hurt our economy anymore. Nevertheless, if we are going to do it, it certainly shouldn't be done by a Federal agency that isn't accountable to anyone. I don't think Congress would be doing its responsibility if we allowed that to happen without our imprimatur. I thank the Senator from New Mexico for clarifying the duty to market. It is a very important technical point that is just one more showing of why this is so unfair and why we must do something to correct it. I want to make a quick announcement, and then I am going to yield up to 10 minutes to the senior Senator from Louisiana. For the information of all Senators, the Senator from California and I have talked about how much longer this debate would go. It appears that we have an agreement that we would be looking at two stacked votes between 6 and 6:15 tonight, one on the Hutchison amendment, and one on final passage of the Interior appropriations bill, which has been so ably led by the occupant of the chair. With that, I yield up to 10 minutes to the Senator from Louisiana, who has been a great ally in this fight. There is nobody who understands the importance of oil jobs to our country and the stability of energy in our country than the senior Senator from Louisiana.

Mrs. HUTCHISON. I yield up to 15 minutes to my colleague from New Mexico, who is the cosponsor of this amendment and who is doing a super job of not only explaining this but also working on the balanced budget that is so important for our country. In fact, the reason he has not been on the floor with me today is because he is working so hard to make sure we do keep the balanced budget, that we do try to make sure we are responsible stewards of the taxpayer dollars. I commend him for all he does for our country and yield him up to 15 minutes.

Mrs. HUTCHISON. Mr. President, I thank the Senator from Oklahoma. I am very pleased he covered some of those issues. We have heard a lot about the lawsuit and especially the employees of the Federal Government directly involved with this rulemaking taking $350,000 each from an organization called POGO. That does not pass the smell test. I am very pleased the Senator from Oklahoma pointed that out. That is another reason this rule needs to go back to the drawing board. That is not the American way. I am happy to yield up to 15 minutes to the Senator from Montana, Senator Burns, who has been very active in this debate and who understands from a small businessman's point of view how important it is we have fairness in taxation in our country.

Mrs. HUTCHISON. I propose that request.

Mrs. HUTCHISON. I ask unanimous consent that I have the hour from 4:15 to 5:15, and then the Senator from California will have the next 30 minutes.

Mrs. HUTCHISON. I ask unanimous consent that at 5 o'clock I have 5 minutes for Senator Brownback and 5 minutes for Senator Enzi, and then perhaps Senator Graham can come after that.

Mrs. HUTCHISON. Mr. President, I say to the Senator from California, I certainly will not object, but I have one other Senator who has also asked for time.

Mrs. HUTCHISON. Michael Gaudlin of Department of the Interior, Communications Director, quoted in Inside Energy magazine, November 2, 1998, in which he said, ``We're sticking to the position we've taken.'' ``It gives us an issue to demagog for another year.''

Mrs. HUTCHISON. Is the Senator referring to the quote from Michael Gaudlin of the Department of the Interior, Communications Director, quoted in Inside Energy magazine, November 2, 1998, in which he said, ``We're sticking to the position we've taken.'' ``It gives us an issue to demagog for another year.'' Is that what he is referring to?

Mrs. HUTCHISON. Mr. President, will the Senator yield?

Mrs. HUTCHISON. Fifteen minutes, from 4 to 4:15, is what the Senator would have.

Mrs. HUTCHISON. Mr. President, at 4:15 Senator Domenici or I will be recognized and we will use approximately 45 minutes of our time.

Mrs. HUTCHISON. Talking about education, along the lines of what the Senator from Idaho was just saying, we have another double standard, and that is, the Senator from California led the effort not to allow drilling offshore in California that is estimated to have cost the schoolchildren in the school districts of California over $1 million a year. That is a California decision. But the fact is, you cannot talk about losing money for schoolchildren by raising the taxes on oil companies on the one hand and then on the other hand say: But we are not going to allow drilling offshore that would put $1 million into the coffers for the schoolchildren of California. Don't you think there is a relationship here and perhaps there are the same issues but just people taking different sides?

Mrs. HUTCHISON. Will the Senator from Wyoming yield for a question on a similar subject?