Bart Stupak

Mr. STUPAK

Mr. STUPAK. Madam Speaker, I rise in support of H. Res. 1260, a resolution in support of the goals and ideals of ``National Internet Safety Month''. This is an issue I have personally been working on for a number of years through the Subcommittee on Oversight and Investigations. Through the Subcommittee's investigation, we've been able to influence significant changes in the industry, including better filtering and reporting efforts among Internet Service Providers, social networking sites, and other content providers. We have also discovered a number of alarming statistics, for example: One in five children report receiving a sexual solicitation over the Internet, more than 3.5 million pornographic images of American children are in circulation on the Internet, and the sale of these images over the Internet represents a billion dollar industry. The anonymity provided by the Internet to those that seek to exploit and harm children and the lightning pace data is transmitted provides a Congress with significant policy challenges. While we've made some progress in the last few years, I feel that we've only begun to address the scope of this problem. By recognizing National Internet Safety Month, we remind ourselves how important it is for Congress to remain committed and vigilant to ensure that the Internet is a safe place for children.

Mr. STUPAK

Mr. STUPAK. Mr. Chairman, I have an amendment at the desk.

Mr. STUPAK. Thank you, Mr. Chairman. Mr. Chairman, the Stupak/Barrow amendment No. 16 would prevent any funds appropriated or made available under this Act from being used to increase the deductible veterans must pay to receive their mileage reimbursement. Currently, veterans driving to a Veterans Affairs facility for an examination, treatment, or other medical care receive a mileage reimbursement rate of 28.5 cents per mile. However, the 28.5 cents per mile benefit is subject to a $7.77 deductible for each one-way trip and $15.54 for a round trip with a maximum deductible of $46.62 per calendar month. Now, in a vast rural area where I live, many of my veterans drive more than 100 miles for an examination or treatment. So if a veteran lives 70 miles round trip from a VA facility, they would file a request for reimbursement for $19.95 minus the $15.54 deductible. This would mean a veteran would receive a mere $4.41. Even today's most efficient vehicles cannot make a 17-mile round trip on $4.41 when the national average price for a gallon of gasoline is $3.96. The Military Construction and Veterans Affairs bill, as it is currently written, would increase the mileage, and I'm appreciative of that. It would increase the reimbursement rate from 28.5 cents up to 41.5 cents per mile. And I support this increase, but the Act does not address the subsequent required increase in the deductible. Under law, each time the mileage reimbursement rate is increased, the Secretary of Veterans Affairs is required to proportionately increase the deductible veterans must pay to receive this benefit. The amendment offered by myself and the gentleman from Georgia would freeze the deductible and prevent the secretary from increasing it when mileage reimbursement is increased. In these times of rising gas prices, it's hard to justify an increase in the deductible veterans are required to pay for mileage reimbursement they receive. While I support the mileage reimbursement included in the bill, we need to make sure that the required increase in the deductible doesn't eliminate the benefit the veteran would receive from this policy. Mr. Chairman, I would like to give the balance of my time to the gentleman from Georgia (Mr. Barrow), the co-author of this amendment.

Mr. STUPAK. With that, I would yield back the balance of our time.

Mr. STUPAK

Mr. STUPAK. Madam Speaker, while Americans suffer pain at the pump, Republicans and President Bush continue every day to spew the same rhetoric about drilling, a move that would produce minimal savings in 10 years. Democrats, on the other hand, are providing short-term and long-term solutions to America's energy crisis. We have repealed subsidies to profit-rich Big Oil, cracked down on price gouging, and invested in clean and renewable energy. We realize that Americans are hurting now, and they can't wait 10 years for relief. So 2 months ago, Democrats forced President Bush to stop filling the Strategic Petroleum Reserve. Now we are urging the President to release oil from the Reserve, which would provide relief at the pump within 2 weeks. Unfortunately, Madam Speaker, President Bush and House Republicans are more interested in doing the bidding of Big Oil than actually providing relief to the American consumer today. How else can you explain their fixation with giving Big Oil more land to drill on when they aren't using the 68 million acres they already have? Democrats are taking our energy policy in a new direction, not one controlled by Big Oil.

Mr. STUPAK

Mr. STUPAK. Mr. Speaker, I thank Chairman Peterson for the time. I rise in support of H.R. 6604, the Commodities Market Transparency and Accountability Act. As the chairman said, for 3 years I have held hearings on speculators in the market, and here is what we have found. Since the Enron loophole became law in 2000, there has been a dramatic shift and physical hedgers continually represent a small portion of the market. The excessive speculation is a significant factor in the price Americans are paying for gasoline, diesel and home heating oil. Since the Enron loophole, what we found as money was shifted in this market, it went from $13 billion to $260 billion in this market, a 1,900 percent increase of money flowing into this market. After the Enron loophole we saw that contracts on oil futures markets went from 700,000 to over 3 million contracts, 425 percent increase. What we also found, the physical hedgers in 2000, had about 70 percent of the market. By 2008, April of 2008, they were down to about 29 to 30 percent of the market. In other words, those who have a bona fide reason to hedge, like airlines, truckers and others, against the increased costs in fuel have been squeezed out of the market by big money and lucrative contracts. While the Peterson bill may not have had all the things I would like to see, and in my legislation to prevent the unfair manipulation of prices, the PUMP Act, it does take significant steps to rein in excessive speculation. The legislation would improve the information available to the Commodity Future Trading Commission, significantly improving the CFTC's ability to monitor energy markets. Should the CFTC find excessive speculation on unregulated markets as a result, they can take the necessary steps to correct it. Well, speculators are not the only factor. We have seen that this Congress is serious about acting to curb excessive speculation in the energy market, and the markets are responding accordingly. Curbing excessive speculation is part of the solution to high energy prices. I thank Chairman Peterson and his staff for working with me and my colleagues to produce this legislation. I urge my colleagues to vote for H.R. 6604.

Mr. STUPAK

Mr. STUPAK. Mr. Speaker, I rise today in support of the Stupak/ Ramstad resolution, House Resolution 1324. Our resolution would commemorate the 25th annual National Night Out event, which is sponsored by the National Association of Town Watch. I would like to thank my Law Enforcement Caucus Co-Chair, Congressman Jim Ramstad, for introducing this legislation with me once again this year, and all members of the Law Enforcement Caucus who co-sponsored this resolution. This bipartisan resolution has had strong Congressional support for several years running and I am pleased we have another opportunity to highlight this important event again this year. National Night Out, an annual nationwide grassroots crime prevention event, will take place on Tuesday, August 5th. The event brings together involved citizens, law enforcement agencies, and civic groups throughout the United States to heighten crime and drug prevention awareness and to strengthen neighborhood spirit and police-community partnerships. Since its inception in 1984, National Night Out has become a crime prevention fixture that is enthusiastically supported by citizens, law enforcement and local officials. It is the Nation's largest, most cost-effective crime prevention campaign. By building community watch groups and police partnerships at an average cost of about $27 per community, National Night Out allows local law enforcement to extend its reach without incurring additional costs. Whether it is stopping illegal drug sales, making schools safer, locating missing children, or remaining vigilant against terrorism, local law enforcement officials depend on the support of community networks to succeed. The active involvement of citizens and the presence of local law enforcement in communities is a winning combination that makes and keeps neighborhoods safe. Last year's National Night Out campaign involved citizens, law enforcement agencies, civic groups, businesses, neighborhood organizations and local officials from over 11,130 communities in all 50 states, U.S. territories, the District of Columbia, and on U.S. military bases worldwide. In all, over 35.4 million people participated in National Night Out 2007. National Night Out is an integral part of America's grassroots efforts to fight crime and create safer neighborhoods. The Stupak/Ramstad resolution expresses Congress' support for community crime prevention and asks that the President focus Federal attention on the issue. With this in mind, we hope that you will show your support for the community crime prevention efforts of citizens and police in your district, and across the Nation. Vote for the Stupak/Ramstad National Night Out Resolution.

Mr. STUPAK

Mr. STUPAK. Madam Speaker, I rise to honor one of the Great Lakes' most hallowed traditions: annual Chicago to Mackinac Race, the world's oldest and longest freshwater sailboat race. Each July, nearly 300 boats make the 333-mile trip to Mackinac Island in 2 to 3 days. This year will mark the 100th anniversary of the race, commonly referred to by sailing enthusiasts as simply ``the Mac.'' Although the first race was held in 1898, several years passed between the first and second running of the race. In other years, the race did not occur because of the United States' entry into World War I. Two other years also did not count toward the total number of Mackinac races, as the race did not terminate at Mackinac Island, but at Harbor Springs, Michigan. This year, however, will mark the 100th time that the regatta will make the trek from Chicago, north up Lake Michigan, following the shores of Michigan's Lower Peninsula to finally land on historic Mackinac Island. In the nautical world, the Mac is viewed by many as an outstanding test of sailors' skill, experience and sailing aptitude. Lake Michigan's volatile weather conditions can mean that the race challenges sailors' abilities. Despite the dangers and challenges of the Mac, there has never been a fatality and only one boat has been lost. The weather challenges presented to those who sail in the Mac are well documented. In July 1925, 21 yachts started the race. Within 12 hours, six of the boats in the competition were blown back to Chicago. In 1937, sailors encountered winds with gusts up to 65 knots, or 75 miles per hour. In that race, only eight boats finished what 42 started. Mac enthusiasts refer to 1970 as ``the year of the big blow'' because a northerly wind blasted competitors in the race head on. Of the more than 160 yachts participating, more than half were forced to take refuge in safe harbor, crippled with shattered masts, torn sails and seasick crews. One of the most challenging Mackinac races in history occurred in 1911. That year, 11 boats holding 142 crewmembers set forth from Chicago to Mackinac. Overnight, temperatures dropped to freezing, the breeze turned into a blustering wind and then became a gale. To add to the discomfort, a rainstorm began. As night fell, the gale escalated to hurricane force, with gusts peaking at 80 miles per hour. The wind, rain and waves played topsy-turvy with the yachts and the race of 1911 ended with the loss of a legendary mahogany-hulled sail boat, by the name of Vencedor. The huge waves thrashed the boat mercilessly and plunged it between two boulders on one of the many Great Lakes reefs. Although the crew was rescued, the Vencedor was lost. Despite the terrible storm, all 142 men who sailed that regatta arrived safely ashore at Mackinac Island, showing once more the perseverance and determination of those who compete in the Mac. The race is sponsored by the Chicago Yacht Club and this year begins there on Saturday, July 19. The continued support of the Chicago Yacht Club and--since 1937--the Mackinac Island Yacht Club has been critical to keeping the Mac going these many years. The U.S. Coast Guard has provided tremendous assistance for the race over the years, working to ensure the safety of the sailors and rescue boats when necessary. Madam Speaker, there is great nautical history associated with the race and great personal pride among those who have participated. Sailors who have competed in more than 25 ``Macs'' are called ``Island Goats,'' a title they wear with pride and affection. There are various explanations for where the title ``Island Goat'' originates. Some say that the sailors who participated in the race smelled like goats when they completed their two- or three-day voyage from Chicago. Others claim that the title ``Island Goat'' is a reference to the unruly celebrations of the early sailors when they finally arrived at Mackinac Island. Regardless of where the term stems, those who are ``Island Goats'' are proud of this distinction and have even formed the Island Goat Sailing Society. Madam Speaker, this July, for the 100th time, those on the eastern shore of Lake Michigan will once again be able to gaze out upon the Lake and watch as an impressive regatta of hundreds of vessels race north toward Mackinac Island. As all of us from the Great Lakes observe the 100th anniversary of the Mac, I ask that you, Madam Speaker, and the entire U.S. House of Representatives join me in honoring the great tradition of the Mac and in saluting the thousands of men and women who have maintained this great race over the past century.

Mr. STUPAK

Mr. STUPAK. Cut the investment malarkey argument. This is profits. This is after you deduct your investments. I don't care if it is on geothermal or wind or solar, after you do all of these and pay your executive a $400 million pension, they still make $123 billion. I'm sorry, but I just can't find any sympathy in my heart with those numbers.

Mr. STUPAK. Of all of the corporations in the history of the world, these are the biggest after all of their investments.

Mr. STUPAK. What I'm saying is why don't you invest more. What I'm saying in my role as chairman of the Oversight Investigations Subcommittee, and for 3 years holding hearings in this area, let's end the excessive speculation in the market that runs up the basic price of crude that results in these record profits because corporations, not only do they have a responsibility to their shareholders, they also have a responsibility to this country to be a corporate citizen.

Mr. STUPAK. Because high energy costs kill our economy. Every aspect of our economy is being strangled while they make record profits and pay obscene pensions to their CEOs. So I believe one of the ways we can in the short term bring down these prices is take out the excessive speculation. If you take a look at it, the Government Accountability Office released its report on the ability of the Commodities Futures Trading Commission to properly monitor the energy markets, to monitor what they are making here. What they said, the GAO said they found that the volume of trading in energy commodities has skyrocketed, exploded, especially after 2002 when we enacted the Enron loophole. The GAO also found that while trading has doubled since 2002, notice that's when the profits start doubling, in 2002, the number of staff to actually monitor what is going on in the markets has declined. If you take a look at this chart here, if you will, this is the evolution of speculation, trading on west Texas intermediate crude, average open interest on NYMEX long and short positions. Between September 2003 and May 2008, traders holding crude oil contracts jumped from 714 to more than 3 million contracts. That is a 425 percent increase in trading oil futures. Since 2003, the commodity index speculation has increased 1900 percent. It used to be a $13 billion market, now, today, it's a $260 billion market. By Lehman Brothers estimate, that 1,900 percent increase in commodity index speculation has inflated the price of crude oil by $37. Other experts say it could be even more. So on June 23, as chairman of Oversight Investigations of the Energy and Commerce Committee, I held my sixth hearing on gas prices over the past 2 years, Fadel Gheit, the managing director and senior oil analyst at Oppenheimer & Company testified, and I quote, he said ``I firmly believe that the current record oil price in excess of $135 per barrel is inflated. I believe, based on supply and demand fundamentals, crude oil should not be above $60 a barrel. We are at over $136 per barrel today. It should be no more than 60, says Mr. Gheit. In 2002, here is what is happening. Over here on the yellow side, these are the commercial hedgers. These are the airline industries, these are trucking companies, these are the Big Oil users. They want to hedge. The blue area, pink area or blue area here, purple area, that's the nonhedgers. They have no interest in hedging; they are just in to play the market. Sixty-three percent in 2000 were legitimate hedgers, 22-- about 37 percent--were not. Come fast track April 2008, the legitimate hedgers are down to 30 percent, the swap dealers and the noncommercials, if you will, are 70 percent of the market. So what's happened? By April 2008 the physical hedgers only controlled 29 percent of the market, those who really do need the supply. What we now know is that approximately 71 percent of the market is taken over by swap dealers and speculators, a considerable majority who have no physical interest in the market. Over the past 8 years, there has been a dramatic shift of physical hedgers continuing to represent a smaller and smaller portion of the market. NYMEX, we have talked about the that tonight, New York Mercantile Exchange, has granted 117 hedging exemptions since 2006 for the West Texas intermediate crude oil contracts, many of which are for swap dealers without any physical hedging position. This excessive speculation is a significant factor in the price Americans are paying for gasoline, diesel and home heating oil. Even the executives of major oil companies recognize this. At a May 21, 2008, Senate judiciary hearing, Shell Oil President John Hofmeister agreed that the price of crude oil has been inflated, saying that the proper range for oil prices should be somewhere between $35 and $65 a barrel. In May of 2008, the IMF, the International Monetary Fund, compared the price of crude oil over the past 30 years, crude oil for the past 30 years, to the price of gold. Gold prices are not dependent upon supply and demand and have been viewed as a highly speculative commodity. The IMF's analysis shows us that crude oil prices track increases in gold prices. The big spike right here, that's the oil embargo. Look what happened as soon as you had the oil embargo in the late 1970s there, mid 1970s there, gold shot way up. Look at the track, look at the last 5 years of gold how they go hand in hand one over the other. What this really means is that oil has been transformed from an energy source into a financial asset like gold, where much of the buying and selling is driven by speculators instead of producers and consumers. Oil has morphed, has morphed from a commodity into a financial asset traded for its speculative value instead of its energy value. Even the Saudi oil minister has argued that high oil prices are due to excessive speculation in the market. Former Secretary of Labor Robert Reich noted on National Public Radio a few weeks ago, the problem is government's failure to curb excessive speculation. Now, the Commodities Future Trading Commission has the authority to set position limits and to take other action necessary to curb excessive speculation. Unfortunately, they have not done it. There are significant loopholes that exempt trading from these protections against excessive speculation. You have the Enron loophole, you have the Foreign Boards of Trade, no action letters, issued by the Commodities Future Trading Commission. You have the swaps loophole, you have the bona fide hedging exemption. While the recently passed farm bill that both Democrats and Republicans voted for and overrode President Bush's veto addressed the Enron loophole for electronic trading, only for natural gas, a significant portion of the energy continues to be exempt from any commodities future trade action to curb excessive speculation. As I said earlier, for 3 years I have looked at excessive speculation in the energy markets. In my latest bill to prevent the unfair manipulation of prices, the PUMP Act, H.R. 6330, would end or take away all these exemptions, to ensure that excessive speculation is not driving these markets beyond the fundamentals of supply and demand. We would crack down. The PUMP Act is the most comprehensive energy bill, and we would crack down on energy speculation through a bilateral trade, we would address that. We would take the Foreign Boards of Trade, and we would clarify the CFTC's jurisdiction over these Foreign Boards of Trade. The PUMP Act would give the CFTC the authority over the exchanges, if they are using computers here in the United States, or they are trading energy commodities that provide for delivery point in the United States. The swaps loophole that we talked about over here, that would be closed, you see, 32 percent right now, right now our swap dealers would close that loophole because there is no requirement for position limits. These swaps have grown exponentially, driving up the price of crude. By limiting this exemption, swaps would be subject to position limits to prevent excessive legislation. Bona fide hedging exemption, those who really need to have supply of oil, we would make sure that they are, we would limit businesses to hedge their legitimate anticipated business needs. I have trouble with the Harvard University needing a legitimate hedging exemption, which they certainly enjoy right now. What does Harvard University need to hedge on oil? The PUMP Act would also clarify that legitimate anticipated business needs does not mean energy speculators. Strong aggregate position, you have the NYMEX, you have the Intercontinental Exchange and now you have the Dubai exchange coming on. If you are going to have a limit, position, limit the position, it should apply to all three of the, the aggregate of all three, not just one or two. So if you see, if we would close these loopholes and set strong aggregate position limits, the Commodities Future Trading Commission would be better able to monitor trades to prevent market manipulation and help eliminate unreasonable inflation of energy prices caused by excessive speculation to help out the American people. If you don't believe excessive speculation is causing a problem, look at today's business news, especially in the New York Times, they are talking about home heating oil. And at our June 23 hearing that we held, Oversight Investigation, we had the home heating oil companies there. On that day home heating oil was $3.98 a gallon. Three days later, 3 days later I introduced the PUMP Act in the Senate with Senator Cantwell. Home heating oil then jumped to $4.60 a gallon. If you want to lock in, or if you want to hedge, you want to hedge your home heating costs for this winter, it's $5.60 a gallon, a 20 percent increase in about 4 or 5 days. That's excessive speculation gone wild. Our PUMP Act has 60 cosponsors, bipartisan piece of legislation, endorsed by agriculture, airline, labor, industry groups, trucking industry. So I urge my colleagues in this House, and I have enjoyed this discussion here tonight, to take seriously a look at excessive speculation. When they testified on June 23 in our committee, I know Mr. Barton was there and some others in this room tonight, Mr. Masters, Professor Greenberger, Fadel Gheit and others all indicated that if we would pass the PUMP Act the way it is right now, the most comprehensive legislation on excessive speculation, we could lower the cost of oil, of a barrel of oil coming into this country, by 50 percent, they said, within the next 30 days. I believe it might be 30 to 50 percent, but the point being, in the short-term, as we started this discussion, we could do something right now. I would take the excess of speculation, all markets, all commodities, be liquidated, although they will need some speculation. But when the physical hedgers are 2-1 being outbid by the swap dealers and the noncommercial people, the floor traders that manage money, the nonreportables, then we have a market that has been turned upside down, and we have turned supply and demand into really a financial asset and not really looking at the needs of the American people, or the U.S. economy.

Mr. STUPAK

Mr. STUPAK. Sure.

Mr. STUPAK. Sure.

Mr. STUPAK. Would the gentleman from Texas yield on that point?

Mr. STUPAK. And when did those standards come in?

Mr. STUPAK. I thank the gentleman. I just want to make a couple of points. Mr. Westmoreland seems to indicate that if we would just increase drilling somehow, we would increase supply and everything would be wonderful. But as chairman of Oversight and Investigations, we saw articles earlier this year which indicated that refineries were cutting back on their production. So myself and Mr. Shimkus from Illinois, the ranking member, we wrote to the Energy Information Agency and asked them: What is our gas supply? Take a look at the first 3 months of 2008, compare it to previous years. Is it a supply-and-demand problem? Now, it's not a Democratic issue or Republican issue. The Energy Information Agency puts forth these facts, and here's what they said. Gasoline inventory actually peaked on March 7, 2008, of 22 million barrels more than March of 2007. Gasoline imports were higher than they've been in the last 5 years when we looked back. Gasoline demand in the U.S. is actually down eight-tenths of 1 percent. So you have more than adequate supply, the most we've ever had in this Nation's history, at 22 million barrels in March of 2007, more than what we're using, but yet the price has still skyrocketed. Now, I think all of us, Democrats, Republicans, we're all willing to put more supply forward, trying to increase production, and in the 2005 Energy Policy Act, that Mr. Barton led that Energy Policy Act, I was a conferee on, we streamlined a way for refineries to produce more if they wanted to. But you see from the Energy Information Agency, the first 3 months of this year, there's more than adequate supply. When it comes to diesel, we actually exported 335,000 barrels out of this country to Western Europe and Latin America.

Mr. STUPAK. I think the gentleman misunderstood. The diesel is produced here in this country. We could have used it here in this country because home heating oil took off. Home heating oil took off for the east coast. We could have used it, but to keep that price, to artificially inflate the price of home heating oil, we exported 335,000 barrels: 93,000 to Western Europe and 182,000 barrels per day to Latin America. So, I mean, we refined it, we produced it, we had it all right here. But what did we say? We can get a bigger buck overseas than to provide a service to the American people. That's what happened, according to the Energy Information Agency, not me, Energy Information Agency.

Mr. STUPAK. Let me keep saying, could you articulate these new diesel standards which made diesel not usable in this country? What are those new diesel standards?

Mr. STUPAK. Sure.

Mr. STUPAK. So, well, when the Republican Party was in control then, in other words? There's nothing I can think of we did recently, and as the former chairman of the Energy and Commerce Committee knows, Mr. Barton and I have done a lot of work on this issue in the last 3 years. That's why I was surprised when you're saying new diesel standards. I wasn't aware of any so it must have been something that came back a couple of years ago when you-all were in charge.

Mr. STUPAK. I know Western Europe is very concerned about their diesel standards. In fact, they have the clean diesel, as we like to call it, here in Europe and that's why they rely more on diesel than gasoline. So when we export 92,000 barrels a day to Western Europe, obviously that diesel is meeting their standards, which are probably higher than ours. I'm making that assumption.

Mr. STUPAK. Very good. But the point being, on supply and demand, at least when we look back at least the first 3 months of this year, according to the Energy Information Agency, we had more than enough gasoline, we had more than enough diesel, and it was just that we had to get that price up so we exported it.

Mr. STUPAK. More than the previous year, more than March 2007, that's correct.

Mr. STUPAK. Sure.