Kay Hutchison

Mrs. HUTCHISON

Mrs. HUTCHISON. Mr. President, I ask that the substitute at the desk, amendment No. 1689, be considered.

Mrs. HUTCHISON. Yes.

Mrs. HUTCHISON. Mr. President, I ask unanimous consent that there be a total of 10 minutes of debate on the bill, equally divided, between the chairman and ranking member or their designees, that there be an additional 60 minutes for debate on the Gorton amendment, equally divided between the proponents and the opponents. I further ask unanimous consent that following the expiration or yielding back of time, the Senate proceed to lay aside the Gorton amendment and a vote occur on or in relation to the Gorton amendment at a time to be determined by the majority leader, after notification of the Democratic leader, on Tuesday, April 21, to be preceded by 20 minutes for closing remarks equally divided on Tuesday, to be followed by adoption of the substitute amendment, and that the bill then be read a third time and passed, with no intervening action or debate. I finally ask unanimous consent that if the Gorton amendment is adopted, this consent be considered void and the bill be open to further amendment and debate.

Mrs. HUTCHISON. Mr. President, on behalf of the leader, I ask unanimous consent that the Senate now proceed to the consideration of S. 414, and it be considered under the following limitations: A substitute amendment offered by Senator Hutchison and an amendment to the substitute on application of the act to be offered by Senator Gorton.

Mrs. HUTCHISON

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 President, I ask unanimous consent that the order for the quorum call be rescinded.

Mrs. HUTCHISON

Mrs. HUTCHISON. Mr. President, a healthy domestic energy industry is critical to our nation's security and our economic well-being. That is why I am pleased today to introduce the U.S. Energy Economic Growth Act. My legislation provides much needed tax relief for the domestic oil and gas industry. It is a part of the omnibus Domestic Oil and Gas Security Enhancement Plan that I've developed with Senator Murkowski and Senator Nickles. Together, our comprehensive legislation represents the most sweeping tax and regulatory relief since before the Gulf War. Our package could not come at a more critical time. The price of crude oil recently dipped to its lowest level since April 1994. This downturn in world oil prices has exposed America's independent producers to great risk. If current market conditions persist, as is expected, thousands of wells could become uneconomic and be shut-in or plugged. It is time we acted to ensure this does not happen, and my bill is the first step in that direction. The U.S. Energy Economic Growth Act will do three things. marGINAL weLL taX RELief First, this bill provides tax relief for producers who operate marginal oil and gas wells. A marginal oil well is one that produces less than 15 barrels per day or produces heavy oil. A marginal gas well is one that produces less than 90 thousand cubic feet a day. Those who operate marginal wells are most at risk in times of lower oil prices. The National Petroleum Council (NPC) reported that America has over 500,000 marginal wells that collectively produce nearly 700 million barrels of oil equivalent each year. Texas alone has over 100,000 marginal wells. These wells contribute nearly 80,000 jobs and generate close to $14 billion each year in economic activity. In 1996, abandonment or plugging of these marginal wells led to a loss of more than 3,600 high-quality jobs and a loss of $84.1 million in earnings in 1996. States and federal governments lost $18.5 million in severance taxes and an equal amount of ad valorem taxes from wells plugged during 1996. Many domestic oil and gas businesses rely on these marginal wells as the backbone of their operations. However, as global market factors cause commodity prices to fluctuate, the economic viability of these wells is precarious. Marginal wells provide countless jobs, energy security and federal tax and royalty revenues. The tax credits in my bill will help keep these marginal wells in production and Americans employed. My bill provides for a maximum $3 per barrel tax credit for the first 3 barrels of daily production from an existing oil well. In addition, marginal gas well will receive $0.50 per mcf for the first 18 mcf of daily natural gas production. In addition, this tax credit would only occur when prices are low. This credit is phased out when prices for oil and natural gas increase. inactive well tax relief The second plank of my bill creates an incentive for independent oil and gas producers to recover abandoned wells and put them back into production. This provision allows producers to exclude income attributable to oil and natural gas from a recovered inactive well. In order to qualify, the oil or gas well must have been abandoned for at least two years prior to the date of enactment. In addition, this incentive would only apply to wells that are brought back on line within 5 years of the date of enactment. This economic incentive has a proven track record. In Texas, a similar law resulted in returning over 6,000 wells to production. The estimated annual production from these wells is worth $565 million at the wellhead, and approximately $1.65 billion to the economy of Texas each year. The wealth from this incentive provides over 10,000 direct and indirect jobs each year. The Texas legislature receives an estimated $22 million in additional annual tax revenues, over ten thousand jobs have been created, and $1.65 billion a year in wealth is generated. Over 90,000 idle wells remain in Texas. This incentive package would help return them to production and allow them to contribute to a strong economy in America. Thirteen states have inactive well recovery programs, including Alaska, Arkansas, California, Florida, Kansas, Louisiana, Mississippi, Montana, New Mexico, North Dakota, Oklahoma, Texas, Wyoming. This federal program would allow the benefits experienced by Texas and other states to continue to grow and to be shared by the rest of the country. Importantly, this provision increases the stream of revenue going into the federal government in two ways. First, royalty owners will pay federal taxes on income generated from the recovered well. Currently, no taxes are paid on these wells because they are inactive. Returning them to production will increase the royalties paid to the federal government. Secondly, the new jobs created will add significantly to the taxes paid on wages and earnings. This one-time shot-in-the-arm for the industry will provide countless jobs and considerable economic benefit to our communities. other incentives The third provision of my bill makes changes to the tax code that makes it easier for producers to take full advantage of already existing tax credits. Under these provisions, both geological and geophysical expenditures on domestic production and delay rental payments would be allowed to be expensed at the time incurred rather than capitalized over the length of the well. This election would allow producers more control over their income stream without changing the amount of tax. In addition, two relatively new types of drilling methods are included as a qualified enhanced oil recovery method for purposes of the Enhanced Oil Recovery Tax Credit. These two drilling methods, hydro-injection and horizontal drilling, would be included on the list of qualified methods. They provide us with some of the most innovative means of drilling and we should encourage producers to utilize these and other productive methods. Mr. President, my legislation provides incentives for the most threatened parts of the oil and gas industry. Relief for marginal and inactive wells encourages full utilization of existing wells, clearly provides jobs and helps the local economy grow. I encourage my colleagues to support this legislation and their local communities by making marginal and inactive wells productive contributors to the local economy. Our energy security depends upon it. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mrs. HUTCHISON

Mrs. HUTCHISON. Mr. President, a healthy domestic energy industry is critical to our nation's security and our economic well-being. That is why I am pleased today to introduce the U.S. Energy Economic Growth Act. My legislation provides much needed tax relief for the domestic oil and gas industry. It is a part of the omnibus Domestic Oil and Gas Security Enhancement Plan that I've developed with Senator Murkowski and Senator Nickles. Together, our comprehensive legislation represents the most sweeping tax and regulatory relief since before the Gulf War. Our package could not come at a more critical time. The price of crude oil recently dipped to its lowest level since April 1994. This downturn in world oil prices has exposed America's independent producers to great risk. If current market conditions persist, as is expected, thousands of wells could become uneconomic and be shut-in or plugged. It is time we acted to ensure this does not happen, and my bill is the first step in that direction. The U.S. Energy Economic Growth Act will do three things. marGINAL weLL taX RELief First, this bill provides tax relief for producers who operate marginal oil and gas wells. A marginal oil well is one that produces less than 15 barrels per day or produces heavy oil. A marginal gas well is one that produces less than 90 thousand cubic feet a day. Those who operate marginal wells are most at risk in times of lower oil prices. The National Petroleum Council (NPC) reported that America has over 500,000 marginal wells that collectively produce nearly 700 million barrels of oil equivalent each year. Texas alone has over 100,000 marginal wells. These wells contribute nearly 80,000 jobs and generate close to $14 billion each year in economic activity. In 1996, abandonment or plugging of these marginal wells led to a loss of more than 3,600 high-quality jobs and a loss of $84.1 million in earnings in 1996. States and federal governments lost $18.5 million in severance taxes and an equal amount of ad valorem taxes from wells plugged during 1996. Many domestic oil and gas businesses rely on these marginal wells as the backbone of their operations. However, as global market factors cause commodity prices to fluctuate, the economic viability of these wells is precarious. Marginal wells provide countless jobs, energy security and federal tax and royalty revenues. The tax credits in my bill will help keep these marginal wells in production and Americans employed. My bill provides for a maximum $3 per barrel tax credit for the first 3 barrels of daily production from an existing oil well. In addition, marginal gas well will receive $0.50 per mcf for the first 18 mcf of daily natural gas production. In addition, this tax credit would only occur when prices are low. This credit is phased out when prices for oil and natural gas increase. inactive well tax relief The second plank of my bill creates an incentive for independent oil and gas producers to recover abandoned wells and put them back into production. This provision allows producers to exclude income attributable to oil and natural gas from a recovered inactive well. In order to qualify, the oil or gas well must have been abandoned for at least two years prior to the date of enactment. In addition, this incentive would only apply to wells that are brought back on line within 5 years of the date of enactment. This economic incentive has a proven track record. In Texas, a similar law resulted in returning over 6,000 wells to production. The estimated annual production from these wells is worth $565 million at the wellhead, and approximately $1.65 billion to the economy of Texas each year. The wealth from this incentive provides over 10,000 direct and indirect jobs each year. The Texas legislature receives an estimated $22 million in additional annual tax revenues, over ten thousand jobs have been created, and $1.65 billion a year in wealth is generated. Over 90,000 idle wells remain in Texas. This incentive package would help return them to production and allow them to contribute to a strong economy in America. Thirteen states have inactive well recovery programs, including Alaska, Arkansas, California, Florida, Kansas, Louisiana, Mississippi, Montana, New Mexico, North Dakota, Oklahoma, Texas, Wyoming. This federal program would allow the benefits experienced by Texas and other states to continue to grow and to be shared by the rest of the country. Importantly, this provision increases the stream of revenue going into the federal government in two ways. First, royalty owners will pay federal taxes on income generated from the recovered well. Currently, no taxes are paid on these wells because they are inactive. Returning them to production will increase the royalties paid to the federal government. Secondly, the new jobs created will add significantly to the taxes paid on wages and earnings. This one-time shot-in-the-arm for the industry will provide countless jobs and considerable economic benefit to our communities. other incentives The third provision of my bill makes changes to the tax code that makes it easier for producers to take full advantage of already existing tax credits. Under these provisions, both geological and geophysical expenditures on domestic production and delay rental payments would be allowed to be expensed at the time incurred rather than capitalized over the length of the well. This election would allow producers more control over their income stream without changing the amount of tax. In addition, two relatively new types of drilling methods are included as a qualified enhanced oil recovery method for purposes of the Enhanced Oil Recovery Tax Credit. These two drilling methods, hydro-injection and horizontal drilling, would be included on the list of qualified methods. They provide us with some of the most innovative means of drilling and we should encourage producers to utilize these and other productive methods. Mr. President, my legislation provides incentives for the most threatened parts of the oil and gas industry. Relief for marginal and inactive wells encourages full utilization of existing wells, clearly provides jobs and helps the local economy grow. I encourage my colleagues to support this legislation and their local communities by making marginal and inactive wells productive contributors to the local economy. Our energy security depends upon it. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mrs. HUTCHISON

Mrs. HUTCHISON. This is a budget that will set our spending priorities. What my amendment says is there are only two responsible ways to spend any future surpluses: to pay down the debt, to save Social Security; or to give tax relief to the hard-working American family. If Congress decides to put all the money into debt relief and Social Security, that is consistent with this amendment. The only reason you would vote against this amendment is if you want Congress in the future to be able to go on spending binges and give the bill to our children. This allows us to put all the money on pay-down debt or to give tax relief. It is important that we recognize that we have labored mightily. We should not snatch defeat from the jaws of victory on the balanced budget. This is our chance to take a stand. We are going to spend any future surpluses in only two ways--to pay down debt or to give tax relief to the hard-working American family. I urge Members to support this.

Mrs. HUTCHISON. I yield back the remainder.

Mrs. HUTCHISON. I ask for the yeas and nays.

Mrs. HUTCHISON. I ask unanimous consent to add Senator Kyl as a cosponsor of the amendment.

Mrs. HUTCHISON. Mr. President, I say to my colleague from New Jersey that he can very well vote for my amendment and still do what he says he wants to do, and that is, save Social Security first, because my amendment just lays out the framework for what our priorities would be. What it says is that there are only two reasons we should spend the surplus: For tax cuts for the hard-working American family, or for debt reduction, which would save Social Security. I support saving Social Security first with all of the surplus, and that would be possible under my amendment. But what we are saying is, we are not going to do anything else with the surplus. We are not going to go on new spending binges. We are going to live within our income. We are going to prioritize our budget, just like every family in America does. We are going to live within that budget. And every penny of surplus can only go to one of two purposes: One is tax reductions on the hard-working American family, and the second is to pay down debt. If we continue to pay all the debt, to save Social Security, you can vote for my amendment and be very happy that all of the Congress will support debt reduction as one of our two priorities. I hope everyone will support this sense of the Senate, because I think it does set our priorities, just as this budget resolution does. That is what a budget does; it sets the priorities. I yield the floor.

Mrs. HUTCHISON. Mr. President, this is what my amendment does. It is a sense of the Senate that this resolution assumes that any budget surplus should be dedicated to debt reduction or direct tax relief for hard-working American families. It is really quite simple. This Congress has labored mightily for the last 2 years to come up with a balanced budget. This budget resolution, which has been so ably led by the Senator from New Mexico, and helped by the Senator from New Jersey, is an example of how difficult it has been to actually balance our budget. It has not been easy. It has been tough to make these hard choices, but Congress has done it. We are talking about a balanced budget and, in fact, surpluses. I am saying, do not fritter away the victory. We have done the tough things. Now is not the time to get wimpy. Now is the time to remain tough, so that we will be able to assure our children and grandchildren that they will not inherit the $5 trillion of debt that has been built up in this country for the last 40 years. It is a time to say we are going to be responsible stewards of this country while we are on the watch deck. It is time for us to say, it is the sense of the Senate that there are only two responsible choices for spending any budget surplus: either tax cuts for the hard-working American family that is today paying over 38 percent of its income in Federal, State and local taxes--and if you add the regulatory burden on top of that, government is costing the average American family, at the $50,000 level, 50 percent of its income. If we say we are going to give tax cuts to those hard-working Americans or we are going to start paying down the debt for our children and grandchildren, and to keep interest rates low, that would be the sense of this Senate for the responsible stewardship of our economy. We have the highest debt burden today of any peacetime in American history. Economic research shows that tax cuts actually add to the economy. They generate work; they generate jobs; they generate buying power. So it would have a huge impact in a positive way. Debt reduction also has positive returns because certainly it will keep interest rates low and we can continue to invest in our savings. Not only are taxes at record highs today, but the trend is in the wrong direction. Since President Clinton came into office in 1993, the tax burden as a percent of gross domestic product has climbed 2.1 percentage points. Just reducing taxes to the 1993 levels means the average family would have a tax windfall of $2,500. This is their money. This money is money they earn, and we believe it belongs to them. That is what this sense of the Senate would say to the American people--you earned this money, and it belongs to you, and if we are not going to give you direct tax relief, the surplus is going to pay down the debt so that you will be able to continue to enjoy the great economy we have and we will also give to our children the same stability in a great economy. The amendment is very simple. I ask my colleagues to vote that we will not undo the hard choices and the hard work that we have done in this Congress over the last 3 years, but in fact we will do the right thing, and that is, give the money back to the people who earned it or pay down that debt so that our interest rates can stay low and so that we can stop paying so much interest. Mr. President, I now yield the rest of our time--up to 5 minutes--to Senator Grams, the cosponsor of this resolution.

Mrs. HUTCHISON. I ask unanimous consent to add Senator Grams as a cosponsor of this amendment.

Mrs. HUTCHISON. I call up amendment No. 2208 and ask for its immediate consideration.

Mrs. HUTCHISON. Thank you. We will certainly yield back part of our time. Well, I will wait and see what the opposition is. Amendment No. 2208

Mrs. HUTCHISON. I ask the distinguished chairman of the committee, approximately how long is he asking authors of amendments to--

Mrs. HUTCHISON

Mrs. HUTCHISON. Mr. President, I rise today to highlight to the Senate and to the American people the importance of this day-- National Breast Cancer Survivors' Day--a day commemorating breast cancer awareness and the celebration of life. Breast cancer is the most common cancer among women of all ages. There is scarcely an American family that in some way has not been touched by this disease. In fact, it is estimated that over 180,000 women and men are diagnosed with breast cancer and over 43,000 die from the disease each year. Women have a 12 percent lifetime risk for developing breast cancer, and one in 25 women will develop the disease by age 60. While these statistics are grim, today we pause to focus our attention on the hundreds of thousands of success stories--individuals who have survived and even prospered despite breast cancer. I salute every brave woman and man who has battled and beaten this disease. Only someone who has had cancer can really know what it is like--the fear, the doubt, and the often painful and debilitating treatments and medical procedures. But beat it they have. And to those who are still in the fight, I say: ``Hang in there. You can do it, and the chances are ever greater that you will do it.'' When detected early and when confined to the breast, the five-year survival rate for this disease is over 95 percent. Mr. President, this is a remarkable statistic, and represents a dramatically improved picture than that of even a few years ago. It is also important to note that, for the first time in years, the mortality rate for both Caucasian and African-American women is also declining. With continued advancements in early detection and treatment procedures, and with the growing hope that a cure might be found in a matter of years, not decades, women today certainly do have cause to celebrate. But our work is far from done. I and many of my Senate and House colleagues are doing all we can to ensure that adequate federal resources are being allocated to research, education, and treatment of breast cancer. Through research grants and direct research conducted at the National Institutes of Health, promising leads and even occasional breakthroughs are being pursued with vigor by the best and brightest of the medical and scientific worlds. We can of course do more, and I am joining many of my colleagues on the Appropriations Committee in supporting a significant increase in the fiscal year 1999 budget for the NIH so that this important work can move forward. Put simply, we will not rest until a cure is found. But until a cure is found, let me say to every woman in America that you are your own best ally in the fight against breast cancer. Self- exams and regular breast cancer screenings for high risk women and women over 40 is absolutely crucial. I was pleased that last year the National Institutes of Health joined me and others in recognizing the importance of annual screening of women over 40, and the availability and affordability of mammography and other promising detection techniques continues to increase. So today, I join my colleagues and all Americans in celebrating those who have won the battle against breast cancer. We salute and celebrate their courage, optimism, and often selfless commitment to help those newly diagnosed to overcome the challenges that lay ahead. Mr. President, these individuals are not just survivors, they are beacons of inspiration and hope for all of us. With the heart and spirit of these survivors leading our way, I know that we will eventually win and conquer this disease. That will be the best Survivors' Day of all

Mrs. HUTCHISON

Mrs. HUTCHISON. Thank you. I urge all my colleagues to vote for the sense of the Senate, which basically says it will be a priority of Congress to eliminate the marriage penalty tax. People should not have to choose between love and money in this country, but 21 million couples are doing it. And they are the police and schoolteachers, people making $28,000 and $32,000 that are getting hit the worst with taxes up to $1,400 just because they got married. That is not right. It is a priority of Congress to change that. And I urge my colleagues to say that the U.S. Senate is going to fix this problem very soon. Thank you, Mr. President.

Mrs. HUTCHISON. I ask unanimous consent to have that 40 seconds.

Mrs. HUTCHISON. Mr. President, if there is any time left on Senator Faircloth's amendment, I would like to just say I am very pleased to support his leadership on the marriage penalty tax.

Mrs. HUTCHISON. I move to lay that motion on the table. The motion to lay on the table was agreed to. Amendment No. 2251

Mrs. HUTCHISON

Mrs. HUTCHISON. Will the Senator yield? If Senator Faircloth is not going to be able to give remarks, I would like to be able to say on his behalf what a leader he has been.

Mrs. HUTCHISON. I thank the Senator from Illinois for allowing me to clarify that. It is certainly important for us to keep the advantage for the one-income-earner couple, but that we give that added advantage to that two-income-earner couple that really does need it.

Mrs. HUTCHISON. I would love to address that issue. It is a valid point. We will not take away the break that a couple has in the one-income- earner family; that is, where people are ahead if they have one income in the family, they get a break on taxes. The people who get hit are the low-income people with two wage-earners in the family. They are the ones that often have to work to make ends meet, and yet they are penalized because they get married. It is a couple that makes $28,000 a year and $33,000 a year, and together they move into the higher bracket, but separately they would not be in the higher bracket, they would stay at the 15 percent bracket. What we are trying to do is create an equity for those lower- and middle-income two-earner couples that right now are paying a hefty penalty.