Don Nickles

Mr. NICKLES

Mr. NICKLES. Mr. President, I thank the Senator for this amendment. I think this is a very important amendment. I wish we would debate it at much greater length, because I am afraid, from some of the things I have read, from comments made by the President of the United States, that he is expanding NATO's role, commitment, obligation, frankly, far beyond the treaty we have signed, which has been so successful, the 50th anniversary of which we commemorated this year. I look at the President's statement he made on May 27, 1997. He did this in concert with French President Chirac and Russian President Yeltsin in France. He stated: In turn, we are building a new NATO. It will remain the strongest alliance in history, with smaller, more flexible forces, prepared to provide for our defense, but also trained for peacekeeping. He goes on, and I will just read the last sentence: It will be an alliance directed no longer against a hostile bloc of nations, but instead designed to advance the security of every democracy in Europe--NATO's old members, new members, and non-members alike. A couple of days later he made a speech at the United States Military Academy, a commencement speech at West Point, May 31, 1997: To build and secure a new Europe, peaceful, democratic and undivided at last, there must be a new NATO, with new missions, new members and new partners. We have been building that kind of NATO for the last three years with new partners in the Partnership for Peace and NATO's first out-of-area mission in Bosnia. In Paris last week, we took another giant stride forward when Russia entered a new partnership with NATO, choosing cooperation over confrontation, as both sides affirmed that the world is different now. European security is no longer a zero-sum contest between Russia and NATO; but a cherished, common goal. Clearly, President Clinton is trying to redefine NATO's mission far beyond a defensive alliance, as our colleague from Kansas pointed out. The purpose in the charter of NATO under article 5 was a defensive alliance. Now he is expanding it to include nonmembers. He is including out-of-area conflicts. He includes ethnic conflicts or trying to resolve ethnic conflicts. I think, clearly, if he is going to do so, he needs to rewrite the NATO charter and submit that as a treaty to the Senate for its ratification. So I compliment my colleague for this amendment. I think it is one of the most important amendments we will consider on this bill. I urge my colleagues to vote in favor of the Roberts amendment, and I thank him for his leadership.

Mr. NICKLES. Mr. President, will my colleague yield 3 minutes?

Mr. NICKLES. Mr. President, I compliment my colleague from Kansas for this amendment. I know there are additional speakers--on this side, at least--who desire to speak on it, so I ask unanimous consent both sides have an additional 8 minutes to speak on this amendment.

Mr. NICKLES

Mr. NICKLES. I announce that the Senator from Arizona (Mr. McCain) is necessarily absent.

Mr. NICKLES

Mr. NICKLES. Mr. President, I rise today to introduce legislation which will right a wrong that has been in the tax code for too long. This legislation will clarify the U.S. tax treatment of foreign pipeline transportation income. This legislation is needed because current tax law causes active foreign pipeline transportation income to be unintentionally trapped within the anti-abuse tax rules of Subpart F. These anti-abuse rules were originally established to prevent companies from avoiding payment of U.S. tax on easily movable and passive income. Pipeline transportation income, however, is neither passive nor easily movable. Pipes are located where the natural resources and energy needs are--they cannot be placed just anywhere. Further, one a pipe is in the ground, it is tough to move. Referring to the legislative history, we find that Congress did not intend these anti-abuse rules to target foreign pipeline transportation income. Rather, these rules were intended to reach the significant revenues derived by highly profitable oil related activities that were sourced to a low-tax country as opposed to the country in which the oil or gas was extracted or ultimately consumed. Furthermore, it is important to note that when these anti-abuse rules were being considered and then put into place, pipeline companies were not engaged in international development activities, rather they were focused solely on domestic infrastructure development. Today, pipeline companies are continuing to actively pursue all development opportunities domestically, yet they are somewhat limited. The real growth for U.S. pipeline companies, however, is in the international arena. These new opportunities have arisen from fairly recent efforts by foreign countries to privatize their energy sectors. Enabling U.S. pipeline companies to engage in energy infrastructure projects abroad will result in tremendous benefits back home. For example, more U.S. employees will be needed to craft and close deals, to build the plants and pipelines, and to operate the facilities. New investment overseas also will bring new demands for U.S. equipment. Yet before any of these benefits can be realized, U.S. companies must be able to defeat their foreign competitors and win projects. Unfortunately, current U.S. tax laws significantly hinder the ability of U.S. companies to win such projects. We must act now if we are to ensure that U.S. companies remain competitive players in the international marketplace. There are incremental, low cost, reforms that we can and must make. My legislation--to clarify that U.S. tax treatment of foreign pipeline transportation income--is one such low-cost reform. I urge my colleagues to join me in this effort to bring current U.S. tax law in line with good tax policy. It is up to us to do all we can to keep America competitive in the global economy.

Mr. NICKLES

Mr. NICKLES. Mr. President, Senator Murkowski was unable to cast a vote on this amendment because of unavoidable flight cancellations back to Washington.

Mr. NICKLES. I announce that the Senator from Alaska (Mr. Murkowski), the Senator from Arizona (Mr. McCain), and the Senator from Arkansas (Mr. Hutchinson) are necessarily absent. I further announce that, if present and voting, the Senator from Arkansas (Mr. Hutchinson) would vote ``yea.''

Mr. NICKLES

Mr. NICKLES. I announce that the Senator from Arizona (Mr. McCain), is necessarily absent.

Mr. NICKLES. I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. NICKLES. I announce that the Senator from Arizona (Mr. McCain) is necessarily absent.

Mr. NICKLES. I announce that the Senator from Arizona (Mr. McCain) is necessarily absent.

Mr. NICKLES. Let me reclaim my time. On page 10 of the amendment, it says ``hiring cops.'' It says the bill is amended by striking $75,000 and inserting $125,000. The cost of this program--the subsidy of this program right now of the current program, the one we have had for the last 5 years--has been a Federal subsidy per cop of $75,000. That is a pretty generous subsidy. I believe the first year subsidy is $50,000. In Oklahoma that may pay the entire salary of a cop. Maybe it doesn't in some places. But it does in my State. Then the subsidy is reduced the next couple of years so that by the fourth year, the total cost of the program needs to be borne by the city. This subsidy is much greater. The Senator's amendment says the subsidy increases from $75,000 to $125,000. For $125,000, you can pay, frankly, probably the entire 3-year salary in many areas--certainly in rural areas. And some people said we purported to help them particularly. I just question the wisdom of doing it. I have just two more comments. We are having the Federal Government provide for police in cities, and that is not a Federal responsibility. I think it is a mistake. I also think it is kind of gratuitous to say this program is responsible for the decline in crime rates. I think that might be a lot more attributable to a change in political leadership in the states and in the Congress. I know the mayor in New York City has had a different philosophy on crime which is greatly responsible for the reduction in crime. Now he may take advantage of this program. In a lot of cities they are going to say: Hey, if you will help pay for our police force, thank you very much. But why should we be doing it? Is that a Federal responsibility? The whole purpose of the program initially, if I understand it, was that we were going to put 100,000 cops on the street, but then phase it out. This was not going to be an addiction for cities. We would phase it out where the Federal Government may pay 100 percent the first year, but by the fourth year the subsidy is reduced to zero. Put another way, where the Federal Government was paying most of the subsidy to get this thing started to hire new cops, but by the fourth year the cost would be totally borne by the city. Now we are saying let's extend it. Let's just keep this thing going. Let's have more Federal cops. Then we passed an amendment yesterday, for the information of my colleagues, over my objection. But it passed by unanimous consent, unfortunately. It said that we have a COPS Program, and some of these cops are going into schools, and we will waive the requirement of local matching funds. In other words, the cops will be paid for 100 percent by the Federal Government. That is now part of this bill. We will waive the local contribution. So it won't be just a partial Federal subsidy, it will be a total Federal subsidy. Is that the Federal Government's responsibility? I don't think so. If we want to subsidize cities, subsidize cities. We are saying: Well, let's have the Federal Government do it. We have a problem. Let's just write a check. We don't think the city should be able to decide their own needs. Maybe they need computers and cars, and not cops. Maybe they need a different training program. But we are saying, no: you are going to have the cops. There is a study that was done by the inspector general, the IG. Maybe the Senator from Utah will allude to it. The IG's research said-- in just one example--52 out of 67 grantees are receiving more grants; 78 percent either could not demonstrate that they redeployed officers, or could not demonstrate they had a system in place to track the redeployment of officers into community policing. At that point, the COPS office counted 35,852 officers under more programs toward the President's goal of adding 100,000: we hadn't made it to 100,000. It says 60 of 147 grantees--41 percent--showed indicators of using Federal funds to supplement local funding instead of using grant funds to supplement local funding. In other words, hey, Federal Government, thank you very much. You are helping meet our budgets, and we appreciate the contribution. Meanwhile, it just so happens that we have a Federal Government that doesn't have a surplus, if you do not include the Social Security surplus. I don't think we should be subsidizing cities. I don't think we should get cities addicted to this program that will never end, especially when you are talking about increasing the cost from $75,000 per police officer to $125,000. I don't think we can afford that. I urge my colleagues to vote no on the amendment.

Mr. NICKLES. I am just getting it from staff. My point is that this is an enormously expensive program. Let me ask the question a different way. If I can have the Senator's attention, I only have 7 minutes and I have to go kind of quick. Can he tell how much the cost is per cop per subsidy per year? It is graduated--100 percent the first year, and some other reduced percentage over the next 2 years. Can the Senator give us those percentages?

Mr. NICKLES. The staff tells me that under the proposed new authorization that cost rises from $75,000 to $125,000 per police officer. Is that correct?

Mr. NICKLES. Let me back up. I will reclaim my time, but please correct me if I am wrong. I asked staff how much this subsidy cost, and they said the old program cost a total of $75,000 over 3-year period-- $50,000 the first year, $15,000 the second year, and $10,000 the third year--for a total over a 3-year period of $75,000 in a Federal subsidy.

Mr. NICKLES. The first year?

Mr. NICKLES. What is the estimated cost, or subsidy, or the Federal payment per cop?

Mr. NICKLES. One-hundred and fifty thousand, or fifty thousand?

Mr. NICKLES. That is to hire how many cops?

Mr. NICKLES. $1.150 billion each year.

Mr. NICKLES. Just a few billion dollars.

Mr. NICKLES. Maybe I am reading the amendment wrong. The way I am reading the amendment, it says----

Mr. NICKLES. Mr. President, I thank the former chairman of the Judiciary Committee, Senator Biden, who is on the floor. Maybe he can answer a couple of questions. I am trying to find out how much this amendment costs. Can you tell me how much it costs a year?

Mr. NICKLES. I announce that the Senator from Arizona (Mr. McCain) is necessarily absent.

Mr. NICKLES

Mr. NICKLES. Mr. President, I do not support the adoption of the conference report on H.R. 1141, the fiscal year 1999 emergency appropriations act. My decision to oppose this bill was not an easy one, Mr. President. This legislation contains funding for our U.S. military forces in Kosovo, Iraq, Bosnia, and elsewhere around the world. Regardless of my deep concerns about NATO's Kosovo operations, I realize that our military, already stretched to the limit by numerous foreign deployments, needs the resources provided by this legislation. Further, this bill contains funding to help farmers in Oklahoma who are finding it hard to get credit, and it will make sure disaster assistance for Oklahoma tornadoes does not deplete FEMA's funding reserves. Unfortunately, it is also fiscally irresponsible. H.R. 1141 provides $15 billion in new spending authority, $13 billion of which is provided for fiscal year 1999 and $2 billion of which is provided for fiscal year 2000. The outlays flowing from this budget authority will reduce our budget surplus by $14.6 billion over the next five years. In fiscal year 1999 and 2000, when the entire budget surplus is attributable to the Social Security trust fund, this bill spends $11 billion of the surplus. Additionally, $14.7 billion of the bill's total spending is designated as emergency spending, so that it is outside of the spending caps. $10.9 billion of the emergency spending is attributable to defense. Unfortunately, the efforts of my colleague Senator Gramm to remove the nondefense emergency designations failed earlier today. I supported him in that effort, and I am disappointed that more of my colleagues did not join us. This legislation makes a mockery of our budget process. I believe Congress cannot continue to squander the economy's good fortune on a bigger, more invasive government. I believe the fiscal restraints we all agreed to in 1997 should be enforced, and I believe the budget we passed just a few weeks ago must be complied with. A soaring economy and the 1997 budget agreement combined last year to produce the first budget surplus since 1969. What was Congress' reaction? We abandoned all fiscal restraint and passed a monstrous Omnibus spending bill which included a record $22 billion in emergency spending. With CBO predicting an even bigger budget surplus this year, $111 billion, we are rushing to enact a $15 billion emergency spending bill. Since spending caps were instituted in the 1990 budget deal, Congress has appropriated $132 billion in emergency spending; $70 billion since the end of the Gulf War. The average annual emergency appropriation from 1993 to 1997 was $8 billion. I believe that Senators must decide if they truly intend to abide by the budgets we pass, or simply ignore them. As I have already mentioned, this bill includes $1.13 billion in new spending for the Federal Emergency Management Agency, partially offset by a $230 million transfer from the Community Development Block Grant program. This $1.13 billion is in addition to the $1.2 billion Congress has already appropriated to FEMA for fiscal year 1999. While I support the work FEMA is doing to help my state recover from massive tornado damage, I believe the funding in this supplemental is far more than the agency needs. In fact, after touring Oklahoma tornado damage two weeks ago, the President asked for an additional $372 million for FEMA. I have been assured by FEMA that they do not require resources beyond this request to accommodate the Oklahoma disasters. Unfortunately, the conferees on the supplemental decided to pile on $758 million more than the President requested. This extra funding has nothing to do with FEMA's current needs. It has everything to do with the appropriations committee's desire to ``pre-fund'' the agency in an attempt to avoid the fiscal year 2000 spending caps. Mr. President, I commend the majority leader for his efforts to keep the cost of this bill down and remove some of its objectionable provisions. However, I deeply regret that I cannot support this emergency supplemental spending bill. I believe we are losing our grip on fiscal sanity, and I fear that worse is coming later this year. I plan to work aggressively throughout this year to make sure we comply with the budget we enacted last month.