John Thune

Mr. THUNE

Mr. THUNE. Mr. President, I want to speak for a couple of minutes, until another speaker arrives on the other side. If I might, I want to elaborate on where these discussions are that we have been having with regard to getting a result and a solution that I think actually could get enacted and become law. Since we first had this vote a couple days ago, I have been in conversations, along with Senator Klobuchar from Minnesota, Senator Coburn, and Senator Feinstein, the sponsors of this amendment, to see if there isn't some way we can find something we could actually do that would accomplish what probably many of them would like to see accomplished but doing it in a way that is not disruptive, that is a thoughtful approach to the future of the biofuels industry, and that actually does something meaningful in terms of dealing with the debt and deficit. Those discussions continue. I think we continue to get closer and closer to an agreement. I hope my colleagues will continue to talk and discuss this matter. We will continue those discussions after the vote at 2 o'clock. I say that to let my colleagues know that even though this particular vote is going to amend a piece of legislation that perhaps isn't going to go anywhere--and certainly this amendment, because it is a blue slip and has a constitutional issue, isn't going to go anywhere--there are earnest discussions going on that I hope will yield a result. Again, in my view, there is a better way to do this. Obviously, there are people who feel strongly and deeply, and we have heard the emotion of this debate over the last few days about this subject. But there is, in my view, a right way and wrong way to do this. The right way is to do it so that we are not pulling the rug out from under an industry after we already put in place policy that they have relied on in terms of their investment issues. I hope we can get that agreement, and I certainly hope my colleagues will bear that in mind. There are a number of Members here who obviously are very supportive of the legislation that Senator Klobuchar and I introduced earlier this week, and we heard Senator Grassley speak to that point and others who are cosponsors. We continue to work with the sponsors of the Coburn-Feinstein amendment to see if there isn't a path forward that will enable us to pass something through the Senate. I wanted to let my colleagues know that and apprise them of the status of those discussions. I hope we can come to a conclusion that will get a result and not simply have a vote that ends up being largely symbolic. We will continue to have discussions, and I will continue to keep my colleagues apprised of the discussions. I yield the floor and suggest the absence of a quorum.

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

Mr. THUNE. Mr. President, how much time remains?

Mr. THUNE

Mr. THUNE. Mr. President, I ask unanimous consent that the quorum call be rescinded.

Mr. THUNE

Mr. THUNE. Mr. President, these past few weeks I have been coming to the floor to talk about the size and scope of our Nation's fiscal problems. It has been said often that this is the most predictable crisis we have ever faced, and I believe that is true. I have talked about how the tremendous growth of government has limited the ability of small businesses to create jobs. I have noted the severe and dramatic cuts Medicare and Medicaid and Social Security will face if we do not act now to reform those programs. I have also pointed out how the Draconian cuts would need to be paired with painful, job-crushing tax hikes. Simultaneously, the interest we pay on that debt will take up an ever-increasing share of our revenue. In fact, it has already been noted that in a few short years the interest on the debt alone would exceed the amount we spend on national security. In other words, we would spend more paying for the amount of money we borrow in the form of interest than we spend defending the country. At some point, bondholders are going to recognize that we don't have an ability to pay out these bonds, and they will demand increasingly higher interest rates. This in turn sends our interest rates even higher in a vicious spiral. However, what I would like to focus on today is to talk about how none of this is necessary. So how do we prevent this from happening? I believe the solutions we need fall into three broad categories: We need reforms to our budget processes, and that includes, one, a balanced budget amendment to the Constitution; we need caps on overall and discretionary spending; and we need entitlement reform. In the 1990s, the Senate was within just one vote of passing a balanced budget amendment to the Constitution. I can't help but think just how different our country's fiscal situation would be if that amendment had been approved. We now have two different balanced budget amendment proposals put forward this year. I cosponsored both of them. I had the opportunity to lead a working group of my fellow Republican Senators to discuss these proposals and to help find the best parts of each. From those discussions and others, we were able to come together with the Hatch- Lee balanced budget amendment, of which every single member of the Republican conference is a cosponsor. This important amendment requires the budget to be balanced every year, except for when there is a declared war. A supermajority would be required to waive this provision. This amendment puts the emphasis on controlling spending, which is the real cause of our debt and deficits. It requires supermajorities to raise taxes, and it prevents spending from exceeding 18 percent of our GDP, 18 percent of our entire national output, which has been the historical level of taxation for our country. Not only do we need to balance our budget but we need to ensure that every dollar is being spent in the most efficient way possible. We need to be honest about the cost of this spending and to create processes that will prevent wasteful, unnecessary, and excessive spending. In order to do this, we need a number of budget reforms in addition to the balanced budget amendment. I have introduced the Deficit Reduction and Budget Reform Act, which has a number of reforms to the budget process we use today. The bill reforms the pay-go rules to prevent the double-counting gimmicks that get used around here all too frequently, and it makes the Federal budget a binding joint resolution signed into law by the President--something that doesn't happen today with our budget. It moves us into a biennial budget timeline, which leaves more time for oversight. As everybody knows, we are supposed to do a budget at least every year. We haven't done one now for 777 days. So the notion that we do a budget every year may be somewhat an antiquated one, but we are supposed to do a budget every single year. Because of that, we spend an awful lot of time going through the budget process, doing all the appropriations bills, and it doesn't allow very much time for oversight, which is a function that I think we have a responsibility to do. So if we went to a biennial budget--in other words, if we did a budget every other year--if we did the spending, the budget, and the appropriations bills in the odd-numbered years, then in the even- numbered years when people have to go home to run for reelection, we could actually focus on oversight. We could look for ways not to spend money but to save money. I have been a big advocate of biennial budgeting--doing a budget every other year, 2-year budgeting--for some time. A number of States do it that way. I think it is important we make that reform so we have the appropriate time to do the level of oversight that is required and is so desperately missing around here today, which is why we end up having so many government agencies with so much duplication, so much redundancy, and so much overlap that leads to wasteful spending on behalf of the American taxpayers. My budget reform would also create a legislative line-item veto. My Governor in South Dakota has that, and I believe the President should too. In fact, I think most Governors across this country have some sort of mechanism that allows them to veto extraneous spending measures. I believe the President ought to have that power, and it needs to be done in a way, of course, that is consistent with the Constitution, and a legislative line-item veto would meet that test. It prevents the abuse of emergency spending designations which have been used to pass hundreds of billions of dollars in deficit spending since the last time we passed a budget resolution. It creates a new CLASS Act trigger to make sure that program is solvent over the 75-year timeframe. I think most of my colleagues know that the CLASS Act is a new long- term care entitlement program that was enacted as part of the health care reform bill last year. It, similar to so many other government programs, relies upon premiums that will be paid in the early years, which actually show revenues coming into the Treasury which are then counted and used to pay for other things--in this case, the health care bill. But at some point in the future, when the demands come for those benefits that people have subscribed for, it becomes a liability because the funds, the revenues that have come into that program in the early years have already been spent. Again, it leads to more and more borrowing. That is what the Congressional Budget Office has said would happen with the CLASS Act. To make sure that program is going to stay on the books--and, by the way, I have a piece of legislation to repeal it because I think it is very bad policy and I think it is going to put our country into an even deeper fiscal hole. But that being said, if it is going to stay on the books, we ought to have a mechanism to ensure the program is solvent over the 75-year timeframe. My legislation would do that. Likewise, it modifies the Medicare cost containment trigger to have honest accounting with respect to revenues and savings in the new health care bill, and it updates the Credit Reform Act to score the purchases of debt, stock, equity, and capital using a discount rate that incorporates market risk. Whenever the Government gets into the business of acquiring debt, stock equity, those sorts of things--and that hasn't happened, as you know, in the last few years--it needs to be accounted for honestly by using real discount rates that make market risk part of that calculation. Today, that is not necessarily the case when those calculations are made. It also creates a new standing joint committee of Congress for budget deficit reduction. It might interest my colleagues to know--sometimes we forget about this around here--we have 26 committees and subcommittees in Congress that spend tax dollars. We do not have one that focuses on saving tax dollars. We need a committee that is exclusively committed to reducing the cost of spending, to saving tax dollars as opposed to spending them. With 26 committees and subcommittees around here that spend money, it is time we had one to save money. The joint committee would be responsible to produce a bill to cut the deficit by at least 10 percent every budget cycle and to do it without raising taxes. It would be a standing committee that would continue to fight government spending, would even issue recommendations to cut spending by at least 10 percent, even in years when the budget is balanced. It has been a long time since we have seen that around here. That probably is not going to happen in the foreseeable future. I certainly hope it does. But in any case, my legislation would require, even in years when the budget is balanced, that we be looking for ways to cut spending. Importantly, these recommendations would be assured of an up-or-down vote in Congress. This committee would make its recommendation each year, and my legislation would require expedited consideration on the Senate floor; in other words, to ensure it gets an up-or-down vote and doesn't languish somewhere similar to so many reports that come out of various committees. This committee would actually have the authority to put a product out on the floor of the Senate and to ensure it gets a vote. Finally, what my bill would do is freeze and cap spending, the third action we need to take in order to get spending under control. This bill would institute a 10-year spending freeze at 2008 levels adjusted for inflation. After all, between 2008 and 2010, nondefense discretionary spending increased by 24 percent while inflation in the overall economy was just over 2 percent. The Federal Government, in the last couple years, between 2008 and 2010, was spending literally over 10 times the rate of inflation. How can you go to the American taxpayer with a straight face and explain that? We need to go back to those 2008 levels and freeze it there, cap it there, and then allow for adjustments for inflation. But let's go back and negate this 24-percent increase we have seen just in the last couple years. The recent continuing resolution that was passed by Congress started to put downward pressure on these accounts, but more needs to be done. My colleagues, Senators Corker and McCaskill, have introduced what they call the CAP Act, which would put our spending on a downward glidepath so we do not spend more than our historical average of 20.6 percent of GDP. For the last 40 years, spending on the Federal Government has averaged 10.6 percent of our total economy. That represents all Federal spending. It doesn't represent State and local government spending, but Federal spending, percentagewise, on average, for the past 40 years has equaled 20.6 percent of our entire economic output. This year we are in the 24- to 25-percent range. Now we have gone from spending one-fifth of our entire economy on the Federal Government to spending about one-quarter of our entire economy on the Government. That, to me, is something that needs to be reined in. There has been a huge ramp-up of spending in terms of our economy. What that means is, the private economy, as a percentage of our entire economy, is getting smaller and the government component of that is getting larger. We need to get that back on a more historical and what should be a realistic course. There are at least three different possible proposals to cap spending: the 18 percent included in the constitutional amendment, the CAP Act, which I just mentioned, and my own proposal to cap discretionary spending. These caps are necessary to signal to the markets we are serious about cutting spending. Finally, we need entitlement reform. The CAP Act and the 18-percent cap would both force us to deal with entitlements. I am heartened by the budget working group that is being led by Vice President Biden, in that they are considering some entitlement reforms. I hope they can produce a product that actually will tackle entitlements. We need, at the end of the day, to have the President leading. As I said, I hope this group that has been put together will produce a result that will take us down a path toward tackling runaway entitlement programs. At the end of the day, for any of this to be signed or get enacted, we have to have the President stepping in and providing leadership. So far we have not seen that. The President, in his budget he submitted to Congress and a subsequent budget speech he made, has done little, if anything, to deal with the issue of entitlement reform. Frankly, you cannot deal with the fiscal problems this country faces, the challenges we face or the deep hole we are in when it comes to getting on a more sustainable course for the future without taking on entitlement reform. The President needs to be explaining to Americans the need for entitlement reform and showing us what his plan is to save Social Security, Medicare and Medicaid, not simply getting out and demagoguing Chairman Ryan's budget and kicking the can further down the road. We know these entitlements already represent $61.6 trillion in unfunded liabilities. There is no more road. We have kicked the can as far as possible. It is now time for us to face the reality that we have to deal with this and we cannot afford the luxury of waiting any longer. It is clear that action needs to be taken. If the President were to step to the plate, I think we would have a real chance to enact substantial entitlement reforms that could preserve the important role these programs play. Enacting these three different prongs or these three different approaches--one dealing with budget reforms that includes a balanced budget amendment being the first component, spending caps being the second component on both discretionary and overall spending, and entitlement reform--are not going to be easy to do. We have been on autopilot around here for a long time. What that has gotten us is deeper and deeper into the fiscal hole, to the point today we are at $14 trillion in debt--meaning we are going to have to raise the debt limit in the very near future--and growing by the day. The amount it grows by the day, interestingly, is $4 billion. Between this time and 10:40 tomorrow, we will borrow another $4 billion that we will add to the debt of our children. That represents more than we spend in my home State of South Dakota for an entire year; $4 billion, the amount we borrow every single day at the Federal level exceeds the amount the State of South Dakota spends in an entire year. That is the dimension of the problem we were dealing with. There are three very important numbers people need to focus on to remind ourselves how critical it is that we act. One is forty-two. That is the cents out of every $1 we borrow. Forty-two cents out of every $1 this government spends today is borrowed. That is a staggering statistic. The other number is 93. Ninety-three is the number now that represents the percentage of our entire economic output that is represented by our gross debt. In other words, our debt to GDP, our debt to total economic output ratio is 93 percent. That is the danger zone. Historical research has demonstrated, when you get a debt-to-GDP ratio that exceeds 90 percent, you are losing 1 percentage point of economic growth every single year. One percentage point of economic growth translates into 1 million lost jobs. So every year we continue on this path of sustaining this level of debt as a percentage of our entire economic output, we are bleeding 1 million jobs in our economy, costing us 1 percentage point of economic growth. That is a very real and immediate impact from the amount of spending and the amount of debt we have. The final number I think is important for people to understand too, a number I mentioned earlier, is the 777 number. That is the number of days that have passed since Congress passed a budget. I know it is very hard around here, particularly in the present circumstances, to find consensus on a path forward to pass a budget. But we have a responsibility to the American taxpayers, when we are spending literally $3.7 to $3.8 trillion every single year, to at least let them know how we are going to spend their money. We have not done a budget in 777 days. I serve on the Budget Committee. We have not had a markup. There is no indication we will have a markup. There is no indication we are going to do a budget. We have already blown past all the deadlines the law requires when it comes to doing a budget. We didn't do a budget in the last Congress. I think what that does is it makes it even more complicated to address these issues. If you do not have an overall framework, if you do not have a construct or understanding of what it is going to take to get our books back in order, then it is going to be very difficult. Sometimes around here we do not have enough teeth in the laws we pass when it comes to budgeting. We do not have enough enforcement mechanisms. I am proposing provisions in the budget reforms to add enforcement mechanisms to cure that. But even with that, you at least have to have a plan. You at least have to have a blueprint, a path for how you are going to spend $3.7 trillion of the American taxpayers' money. I urge my colleagues, the majority, to put forward a budget. At least let's debate it. Let's talk about priorities. Let's have a debate, debate amendments, but let's do a budget or reform the budget process along the lines I suggested so we get a process in place that enables us to make some headway, to make some progress toward dealing with this runaway debt and these runaway deficits that are going to not only crush our economy in the near term but put an unfair burden on future generations of Americans. Right now, the things most Americans are worried about are spending, debt, jobs, the economy, and they are all connected. The level of spending and debt is something that needs to be gotten under control to get the economy growing and prospering again, so you don't have the Federal Government out there competing with the private economy when it comes to capital. Small businesses need capital to invest to create jobs. When the government is crowding that out, it makes it more difficult. There are so many adverse economic implications from the debt levels we are sustaining today that are going to make it increasingly difficult, the longer we stay deeper and deeper in the red, for this economy to recover and grow. That is fundamental to all this. When it comes to jobs and the economy, we also have to have policies that encourage economic growth. I know the President talks a lot about jobs and the economy. He certainly is rhetorically, at least I believe, saying the right things out there. But you have to have actions that are consistent with the rhetoric. If you look at the President's record, we have not seen that. The reason we have not seen that is because the policies are all adverse to economic growth and job creation, whether it is regulations coming out of agencies, whether it is the new mandates imposed by the health care reform bill, whether it is the out-of-control spending and debt and no attempt to address the long-term challenges we face there, particularly entitlement reform, whether it is the new taxes that have been imposed through the legislation that has been enacted since this President has come into office. But if you look at the economic record, if you look at unemployed Americans since this President took office, we have almost 2 million more unemployed Americans. The unemployment rate has gone up 17 percent. Fuel prices, which impact everybody's pocketbook in this country, since this President took office, have gone up by over 100 percent, over a 100-percent increase in the price per gallon of gasoline since this President took office. The debt has gone up 35 percent. The debt per person in this country has gone up $11,000 per person. That is the amount the debt has increased since this President took office. Food stamp recipients are up 39 percent. Health insurance premiums--despite the promises of what health care reform would do to lower insurance premiums--health insurance premiums have gone up 19 percent since this President took office. The only thing that has gone down since he took office is home values. Home values are down 12 percent. That is the economic record. That is the composite record. Of course, we can all say things, but we have to be judged by what we do. We cannot judge people by what they say. We have to judge them by what they do. I hope the President will decide it is time for him and for his administration and for his leadership to focus on policies that will be conducive to economic growth, that will enable that, rather than make it more expensive and more difficult to create jobs, which are the policies that are being employed by this administration. That applies to so many areas. It is developing domestic energy resources, so we can get more American supply of energy and start driving that price down. So many areas are off-limits. Even more have gone off-limits since this President took office. It means getting trade bills enacted. We have heard now for several years the President talk about how we need to pass the Colombia, Panama, and South Korea Free Trade Agreements. Yet they languish. They have not been submitted to us. We are ready to act. We have said repeatedly these are important to our economy. I have used this example on the floor before, but just one brief data point for agriculture. I represent an agricultural State, so we are always looking for opportunities to export. In wheat, corn, and soybeans exports, we had an 81-percent share of the Colombia market in 2008. In 2010, that had dropped to 27 percent. We have literally been locked out of that market because this free-trade agreement has languished in Congress and, as a consequence, other countries have stepped in to fill the void. Now you have the Canadians, the Europeans, the Australians stepping in and picking up the slack and we continue to lose more and more market share, which means more and more lost jobs in the American economy. So it is about trade policies, tax policies, energy policies, regulatory policies and spending and debt. Those are the things, in my view, that will get this economy back on track, start creating jobs, create a better and brighter and more prosperous future for future generations of Americans. Unfortunately, the policies being employed by this administration are making it worse, and at least according to this economic record, much worse. We can do better. We should do better by the American people, and I hope we will find the political will to do that. I yield the floor.

Mr. THUNE

Mr. THUNE. Mr. President, today I recognize Turton, SD. The town of Turton will celebrate the 125th anniversary of its founding this year. Located in Spink County, Turton came into existence during a time known as the ``Great Dakota Boom,'' when the railroads were expanded throughout the State. Since its beginning 125 years ago, the Turton community has continued to serve as an outstanding example of South Dakota traditions and values. I would like to offer my congratulations to the citizens of Turton on this milestone date and wish them continued prosperity for years to come.

Mr. THUNE

Mr. THUNE. Mr. President, I urge my colleagues to vote no on this motion. As the Senator from Minnesota has pointed out, there is a better way to do this. I think we can all work together in a constructive way and accomplish what the proponents of this amendment want to do, but do it in a way that does not disrupt this industry. In December, 81 Senators--81 Senators--voted for tax policy. Here we are 6 months later and we are going to say we are going to pull the rug out. We are going to tell you guys just to go pound sand--after giving them a commitment back in December that we would have this tax policy in place until the end of the year. That is not the way to do business. This can be done in the right way. I urge my colleagues to defeat this motion, and then we can work together to try to get to where we have a solution in place that is good for jobs, good for the energy industry in this country, and good for the taxpayers of America.

Mr. THUNE

Mr. THUNE. Mr. President, if I might just say to my colleague from Minnesota, I appreciate her good work and advocacy on this subject. This is something we have been working on for some time, along with some of our colleagues on both sides of the aisle, for a lot of reasons; one of which, of course, is because, as the Senator from Minnesota mentioned, these are difficult fiscal times. Obviously, every area in our budget needs to be reviewed and scrutinized and looked at to see where we might be able to achieve some savings. But, as my colleague noted, there is a right way and a wrong way to do this. The way that has been proposed in the amendment that was offered, and on which the cloture vote will occur tomorrow, is the wrong way. We cannot tell an industry in December we are going to give them a set of policies that are going to be in effect for the year, that they are going to be able to make investment decisions, they are going to be able to go to their lenders, they are going to be able to go secure financing based upon this set of policies--we do that around here all the time. We make policy, and we try to do it in a way, hopefully, that gives those who are investing their dollars some certainty about what those policies are going to be. Well, how can we then, in the middle of the year, come back and say we are just going to pull the rug right out from under them? We are sorry, that is just the way it is. This is gone. Well, frankly, there is a much better way to go about doing this, and what the Senator from Minnesota and I have proposed does just that and, in my view, does this in a responsible, measured, thoughtful, reasonable way. We get to the same ultimate result, which is that for those who are really interested in doing away with the volumetric ethanol excise tax credit, it does phase it out, but it does it in a way that does not create disruption and harm and allows people to plan for the future. It also invests some of those resources in areas that are important to the future of that industry; namely, blender pumps, which is the one thing that does not exist out there today, at least not in any great numbers. If those pumps were more available, I believe we would see a lot higher usage of the fuel than we already have seen. But we already know it is 10 percent of our fuel supply. Whether the opponents of this like it or not--and I know they do not--there are 13 billion gallons of ethanol produced in this country. At least that is what it was in 2010. We assume it will be that number, maybe a little higher, this year. That displaces 445 million barrels of imported crude oil. That is 55 million barrels more than the total crude oil imports from Saudi Arabia last year. Now, think about that: a fuel that is produced from a kernel of corn now displaces more than the entire imports of Saudi foreign oil into this country. That is what we ought to be looking at. We ought to be looking at more ways to produce domestic energy, home-grown energy, adding that to our fuel supply rather than taking it out. What the amendment our colleagues are trying to get a vote on tomorrow would do is basically to say to this industry: Yes, we are going to take away this particular tax incentive, and we are going to do it right in the middle of the year. We are going to do it, and we do not like this industry--which is probably what animates a lot of the opposition to this because if people look at the facts, if they look at the contribution that biofuels have made to our fuel supply in this country, it is significant. Ten percent of our entire fuel now is biofuels. In fact, if we look at the other byproduct of biofuels--once we take the starch out of that kernel of corn and convert it into liquid form, we can get, for every bushel of corn, almost 3 gallons of ethanol. But we also get dry distillers grain, which is something that has been used extensively now for feed for livestock. So if we take 5 billion bushels of corn, for example, that are used for ethanol production in any given year, the feed product equivalent is about 1.7 billion bushels of corn that is returned to the livestock food chain as this ethanol byproduct called dry distillers grain. So we are adding additional protein that is fed to livestock in addition to the almost 3 gallons of ethanol we get from every single bushel of corn. So I do believe there is an approach that makes sense. What the Senator from Minnesota and I and many of our colleagues on both sides have come together around is a way in which we can move forward, and do it in a way that not only makes it reasonable for the industry to plan for the future but also in a way that returns dollars to the Treasury of this country because there is $1 billion in here for debt retirement. I think that is something the industry recognizes, we all recognize, and we need to address. It is addressed as part of this bill. So I appreciate the good work of the Senator from Minnesota in working with me, along with other colleagues of ours, to introduce the bill we introduce today.

Mr. THUNE. Mr. President, if I might add one point. I think the Senator from Minnesota did point out that there are a significant number of jobs that are associated with this industry--in fact, one-half million jobs. They are American jobs. They are jobs in the heartland of this country. They are jobs that help grow the economy, make it more prosperous. It strikes me, at least, that what we ought to be looking at is more jobs in this country and less investment in foreign regimes, where we get a lot of our energy today. Mr. President, $1 billion a day is what we send outside the United States because of our addiction to foreign oil. We have a dangerous dependence upon foreign energy, and we have a fuel that, as I said, displaces 445 million barrels of oil every single year--more than we import from Saudi Arabia. That is a pretty remarkable number when you think about it. We had a debate here a few weeks ago on the floor of the Senate about whether we ought to change tax policy with regard to oil companies. The decision was reached that we should not do that; that it would be punitive, directed at oil companies. We decided, too, that it would raise taxes on gas for people in this country. I would make the same argument today. We are talking about a tax increase--a large tax increase--which we know is going to get passed on. So we are talking about raising taxes on consumers at a time when they can least afford it. We have today 3\1/2\ to $4-a-gallon gasoline. The last thing consumers in this country need is something that would actually push that gas price higher. In fact, if we did away with biofuels altogether--which some people would like to do--there was a study out last year, in 2010, that said the price per gallon of gasoline would go up by 89 cents a gallon. So we have a proposal here that would have an adverse impact on energy prices, fuel prices for people in this country, which, frankly, again, because of the commitment that was made last December, strikes at the very heart of economic certainty, which so many of us come down here and talk about: the importance of having policies in place that are reliable, that people who are investing in particular areas of our economy can know they are going to be there, at least when Congress makes a commitment. This completely undermines the commitment Congress made back in December that this particular tax credit would be in place until the end of the year. So what the Senator from Minnesota and I have done is propose a path forward that we believe makes sense and that is a thoughtful, measured, reasonable, responsible way in which to get to the goal that many of the proponents of the amendment that will be voted on tomorrow want to get to; that is, to phase down the volumetric ethanol excise tax credit. But it does it in a way that makes sense for American consumers and those who have investments in the industry today. So I hope my colleagues will take a look at this legislation. We think we can get it moving this year. It does, as was noted by my colleague from Minnesota, put a significant amount toward reducing the debt, which I think is something all of our colleagues are very interested in doing. So we will present this legislation, obviously, to our colleagues and hope there will be many who will choose to support it. Mr. President, I yield the floor back to the Senator from Minnesota.

Mr. THUNE

Mr. THUNE. Yes.

Mr. THUNE. I don't disagree with that. There is an issue I have not argued. It is your prerogative to bring this up and file cloture, which you have done in this circumstance. I think the renewable fuels standard that creates the sort of policy construct we are talking about here today is one aspect of the biofuels policy going forward. The other aspect, going back for long time, historically, is the blenders credit. I will tell you--because the statement you made is all the people who get this don't want it--well, that is not true. The large integrated oil companies, which are also refiners and, in many cases, retailers of refined gasoline, don't want it, maybe. I understand you have a letter to that effect. But there are lots of smaller refiners who do want it. There are also an awful lot of--the blenders credit gets passed on to the retailer, which gets passed on to the consumer, hopefully. The people who will be impacted by this are not just the large integrated oil companies. If you talk about the large integrated oil companies, saying they don't want this--they said in hearings before congressional committees a few years ago they didn't want the oil subsidies they get in the Tax Code today. They are on the record saying that. Yet we voted to keep those in place just a few weeks ago.

Mr. THUNE. If it is under the definition of tax expenditure, sure. Oil depletion allowances and intangible drilling costs are characterized, for subsidy purposes, the same way as the ethanol tax credit. We have lots of what we would characterize as tax credits and earned income tax credits in the Tax Code. We have lots of what is characterized as tax expenditures. You may characterize it differently, and that is accelerated depreciation, but in fact for the purposes of description, as we describe things here, it fits into that category. The oil industry came in front of congressional committees and said they didn't want those. So for them to say they don't want this particular blenders credit--and my view certainly isn't determinative, but I think the large integrated oil companies that get the blenders credit also view ethanol as a threat. Like it or not, today the only viable alternative to petroleum--the only one we have--is 10 percent of our fuel supply in this country. I am not debating the Senator from Oklahoma about whether the merits of this particular policy--at least in its current form--should not be transformed and should be reformed; I am saying that we should. I have come to the Senator with a proposal to do that. That is not something, obviously, that he agrees to. That is fine. He is entitled to not support that. But I believe we ought to reform it. I think the way we reform it is do it in a reasonable way that doesn't cut it off tomorrow but, rather, phases it out. I think that for the Senator from Oklahoma, to me, it is something that is a win for him as well. He gets what he wants. He gets the phaseout, plus $1 billion in debt reduction, and if this thing goes to the end of the year, we get zero. We get goose-egged. This thing expires at the end of the year. Whether it gets extended or not remains to be seen. But one thing we know with certainty is that I am putting a proposal on the table today that gets $1 billion in reduction, that provides some certainty at least in phasing out the VEETC and also makes an investment in blender pumps, which is something that is very important to the future of the industry. So I think it is a reasonable way to deal with this issue. The Senator from Oklahoma and I have a disagreement, and that is probably not going to change. But I am offering what I think is a reasonable proposal that gets you where you want to end up and I think also is a way in which we can keep this industry from having the rug pulled out from under them after we made a commitment to them in December of last year. Mr. President, I yield the floor.

Mr. THUNE. Well, I say to my colleague from Oklahoma that I was not aware he said he supports ethanol. I was not aware he supports the RFS. If there is an amendment offered to strike the RFS, which there will be--am I wrong in saying the Senator would oppose that amendment?

Mr. THUNE. Certainly.

Mr. THUNE. Mr. President, the Senator from Oklahoma has a strongly held view about ethanol, particularly on this issue, on the VEETC, and I understand that. I understand there are Members who would like to see that particular tax credit go away. I understand that. What the Senator from Minnesota and I have come up with is a way for them to achieve that objective, but it does it in a way that is reasonable, measured, and which doesn't totally, in the middle of the year, abruptly disrupt an industry and all of the investment that has been made. The question I ask my colleague is, does our word mean anything around here? We passed this in December. There were 81 Senators who voted for a package of tax extenders, one of which was the volumetric ethanol excise tax credit. Eighty-one Senators are on record. If you want to do away with it, there are lots of ways you can do that. But the way the Senator from Oklahoma is proposing to do that is to say, tomorrow let's pass this and end it. It is $2.5 billion we can save the taxpayers. Well, about $500 million a month is about what this is going to cost. With every month that goes by, there is a little less available to the taxpayer. What we are saying is that we put in a billion dollars today into this proposal that would go toward debt retirement, and we phase out the tax credit to which the Senator from Oklahoma refers, and we take a very forward-looking, futuristic-type view toward ethanol production in this country, biofuel production in this country. We are going to be capped out at 15 billion gallons, which is the RFS, the renewable fuel standard to which the Senator from Oklahoma referred. We are going to hit that. Then we have to get to the next generation of biofuels. With all due respect to my colleague from Oklahoma, methanol is not a realistic option. You would have to retool every plant in this country. We have 204 plants in America today that, directly or indirectly, employ 500,000 Americans. Those are the jobs that are impacted. We have had policy on the books now for nearly 30 years that has encouraged the investment in these plants on the belief that we need to get beyond dependence on foreign sources of energy. That ought to be our energy policy, and we ought to be looking to producing more. I am for oil and gas. The reason I voted against the proposals leveled a couple weeks ago that would have targeted the oil and gas industry is because I think we need all forms of energy--oil and gas, clean coal, biofuels, nuclear, and we need any form of energy we can generate and produce in the United States. I am for it. That is why I think the future of this industry is still very bright, because I think there is an advanced biofuels future out there, and a cellulosic ethanol, next-generation ethanol, whatever you want to call it, where we can make it from switch grass, from blue stem grass, from corn stover, and these types of products. That is out there. But you don't get there unless you have a corn-based platform to start with. The Senator talked about a renewable fuel standard and talked about this being redundant public policy. One of our colleagues from South Carolina introduced an amendment to this bill that would end that. I assume--I don't know this for a fact--that my colleague from Oklahoma would support that amendment, which would do away with the renewable fuel standard.

Mr. THUNE. When we characterize what you called tax expenditures, there are a bunch that fall into that category. I know the Senator is familiar with that as he served on the President's debt commission. It is about $1.1 trillion a year. In some way or another, we reduce the tax liability of various individuals and businesses around the country. I don't disagree with you. In fact, I will work with the Senator on a proposal that would address this and look at all those types of tax expenditures. I think it is punitive to single out one and say we are going to kill this one, after we committed in December, with 81 votes, that we are for this. I don't know how we can, in good faith, go to this industry, which employs 500,000 Americans, and say we are going to pull the rug out from under you after 6 months. That being said, I would characterize it as anything that reduces the tax liability that is public policy. I think it is characterized as tax expenditures. The oil depletion allowance and the intangible drilling costs--those are all things that are unique to the oil industry.

Mr. THUNE

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

Mr. THUNE. For 10 minutes.

Mr. THUNE

Mr. THUNE. Mr. President, in closing, I wish to, first of all, thank the Senator from Nebraska for joining us. He has a great wealth of experience, not only having grown up on a family farm in his early years but representing his State as a mayor, as a Governor, and then representing our Nation as the Secretary of Agriculture. I recall working with him when he was the Secretary of Agriculture on a lot of these issues. One of the things that strikes me about where we are today relative to where we were then is the prosperity that has returned to the agricultural sector in our economy, to rural America. We can't say the biofuels industry has been solely responsible for that, but certainly a contributing factor. We have seen growth in the economy in the Midwest. Again, what I would point out about this, which is so important for people to realize is that these are American jobs. This is our home- grown industry. We are either going to get fuel in the United States or we are going to buy it from some foreign country. That is what we have been doing, and that is what we continue to do to the tune of $1 billion every single day. So to the degree we can promote domestic energy production in this country and add to the supply in this country, which is what biofuels does, it is for the American consumer and, obviously, good for America's economy and America's dangerous dependence we currently have on foreign energy. So the proposal the Senator from Nebraska is a cosponsor of and that he and I have worked together on and that we will file as a bill today will present an alternative to the approach that will be advanced, or that they will attempt to advance tomorrow, which is to just right now, in a very disruptive way, abruptly end something that we just voted on in December to put in place. We have people who have made investments in it, and it has made a tremendous impact on jobs in this country. The approach the Senator from Nebraska and I are advocating I believe is a reasoned approach. It is forward looking in the sense that it promotes the next generation of biofuels, advanced biofuels, and cellulosic ethanol. In the same way the Senator from Nebraska mentioned, it gets us to where we have more choices for American consumers when they come into a filling station by investing in some of the pumps out there and giving consumers more choices. Then, finally, as the Senator from Nebraska said, it also puts money toward the debt, toward deficit reduction, and phases out the tax credit that is available today to ethanol producers in this country. It is a reasonable, responsible and, as the Senator said, measured way of dealing with this, not the way that is being proposed by the vote we are going to have tomorrow. So I hope our colleagues will join us in working in a constructive way to continue to grow this industry and do it in a way that creates jobs for Americans and lessens our dependence on foreign nations. I yield the floor.

Mr. THUNE. Mr. President, if I might just say to the Senator from Nebraska, because I am wondering if perhaps in his discussions with farmers and ranchers in his State--I am sure the issue which he alluded to, which I think is an important one, comes out--I wonder if other people around the country realize, when we make a gallon of ethanol, we take a bushel of corn--which is a remarkable thing that we have gotten to, where the technology enables us to do that--we produce 2.7 gallons of ethanol from a bushel of corn. We have almost 3 gallons of ethanol from a bushel of corn which goes into our fuel supply and represents about 10 percent of all the fuel we use. I wonder if a lot of people realize that one of the byproducts of that, as the Senator from Nebraska has mentioned, is something called dried distillers grain. The DDGs, as we refer to it, is something that is then used to feed livestock. Now, a lot of people think there is this whole corn debate about food versus fuel, but I don't think most Americans realize that only about 12 percent of our corn crop in this country actually ends up in foods. It is either consumed directly, such as corn chips, or indirectly, such as high fructose corn syrup. But one-third of the grain that goes into ethanol production comes out as dried distillers grain, these DDGs, and for each bushel of corn used in the ethanol-making process--as I said, the 2.7 gallons of ethanol--18 pounds of DDGs and 18 pounds of carbon dioxide. If we took, let's just say, for example, 5 billion bushels of corn used for ethanol production in a year, the feed product equivalent of about 1.7 billion bushels of corn is returned to the livestock food chain as an ethanol byproduct. So we take about one-third of all of the grain that is put into the process to make ethanol, and that comes back in the form of something we feed to livestock and something that has been a great source of protein for livestock producers in this country. I don't think most Americans even realize we are not just talking about the fuel component; we are not just talking about that liquid we use to blend with petroleum products and get ethanol in this country; but there is also this other byproduct which is essential for livestock producers to feed their livestock. I am wondering if, in the conversations the Senator from Nebraska, I assume, has with his farmers and ranchers--of course, they are very familiar with this--the average person around this country understands this.

Mr. THUNE. Mr. President, tomorrow the Senate will vote on a cloture motion that deals with an amendment that would do away with a tax provision that was enacted many years back by Congress but was extended just this last December. In fact, there were a whole series of tax extenders that were passed by the Congress in December of last year, but this particular one, the volumetric ethanol excise tax credit, was also extended. It was extended until the end of the year 2011. December 31 of this year is when it would expire with the amendment we will be voting on tomorrow--or at least the cloture motion we will be voting on is with regard to an amendment that would eliminate that and end it now. There are a number of problems associated with that approach, one of which is this issue of economic certainty. We have lots of people across this country who have made investments. We have lots of jobs that are impacted by this industry. In fact, if you look, there are 204 plants, ethanol plants, in America today, spread across 29 States and on the order of about half a million jobs--all of which, I might add, are American jobs--you have half a million American jobs impacted by this industry. The ironic thing, too, is coming on the heels of an announcement last week that Venezuela, Libya, and Iran will block OPEC from producing more oil to relieve gasoline prices, we continue to be held more and more hostage every single day by our addiction to foreign oil. We send $1 billion a day outside the United States to purchase foreign oil--$1 billion every single day to purchase foreign oil. The ethanol industry, which now represents about 10 percent of the fuel mix in this country, displaces 445 million barrels of oil every single year. That is the equivalent of $34 billion that we don't send overseas--445 million barrels of oil displaced every single year, $34 billion that we don't have to spend purchasing foreign oil. So this is an issue that has a direct bearing on the issue of energy independence, the issue of continuing what I think is a very dangerous dependence on foreign sources of energy, foreign oil, and has a direct bearing as well on the price consumers pay at the pump. Clearly, if you took 10 percent of the fuel mix out of production or out of that mix, you would put an additional pressure on the price that currently is being paid by consumers. In fact, there was a study done by Iowa State University that said, in 2010, if you took away the contribution ethanol makes to the fuel mix in the country today, you would see gasoline prices increase by 89 cents per gallon. When you are already facing $4 gasoline prices in this country, which I think is having a profound impact on our economy and particularly on consumers who, day in and day out, are having to deal with these high prices, it seems ironic that we would be looking at legislation and policy that would further drive up the cost of gasoline. We ought to look at ways we can reduce it, and this clearly would have the opposite effect. A few weeks ago there was a proposal to put additional taxes on oil and gas or at least to change some gas policy with regard to oil and gas which many of us argued would add to the cost of gasoline in this country. It would essentially, in effect, be raising taxes on gasoline. This proposal would have the same effect. It would increase the cost of energy and obviously impact many of the jobs to which I just alluded. It would also break faith with the commitment made by this Congress last December when we extended the VEETC, the volumetric ethanol excise credit, for another year. We have a lot of folks who made investments, you have people across the country whose livelihoods and jobs depend upon this, and I think it makes sense, when we put policy in place and we say it is going to be in place for a certain period of time, that that be honored. Having said that, I have been working closely with my colleague from Nebraska and others of our colleagues on both sides of the aisle, Republicans and Democrats, on a proposal that would reform the VEETC and move us in a direction that puts us on a pathway or a trajectory into the future that will take greater advantage of this contribution that is being made by biofuels to our country's energy independence and also phase out the VEETC tax credit but that does it in a way that does not impact and disrupt in a way that this would, where you say you are going to end this today. As I said, you have lots of people who made investment decisions based on current policy. You would change that policy immediately and abruptly, but that is not the right way or correct way to go about this. There is a better way. That is what my colleague from Nebraska and I have been working on. I hope my colleagues in the Senate will vote tomorrow against this attempt to end this abruptly and to disrupt this market and do tremendous harm to an industry that is contributing, in a significant way, to America's move toward energy independence and is helping to keep gas prices lower than they would otherwise be were it not for the 10-percent contribution ethanol makes year in and year out to our energy. So there are lots of reasons why we think it is a bad idea to move forward with the amendment that will be offered tomorrow and the cloture motion that would get on that amendment. I hope my colleagues will defeat that cloture motion so we can work on a more responsible, reasonable way that phases out the VEETC and, in a responsible way, that would allow those who have made investments to be able to plan accordingly. I would simply say, as we get into that debate tomorrow, this is an issue which has ramifications for our economy because of the price of fuel and the impact ethanol has on the price of fuel in this country. It has an impact on the old issue of energy independence and whether we are going to continue to be held hostage and over a barrel by oil we have to import from other places around the world. Of course, it has implications as well for just the jobs that are created here at home, American jobs that could very well be lost if we move down a path that, in my view, would be very harmful for this industry and its ability to create jobs. I have my colleague from Nebraska here as well this afternoon and I would welcome his thoughts on this subject and would like to enter into a dialog with him about the impact this industry has on his State of Nebraska--and not just the impact it has on Nebraska or South Dakota but the impact it has on this country by creating jobs, by lessening the dependence we have on foreign sources of energy, and by keeping gas prices at a more reasonable level than we would otherwise see if it were not for the contribution ethanol makes to our fuel mix. I am going to yield to the Senator from Nebraska for his observations about this subject.

Mr. THUNE

Mr. THUNE. Mr. President, I ask unanimous consent the order for the quorum call be rescinded.

Mr. THUNE. I also ask unanimous consent I be allowed to enter into a colloquy with my colleague from Nebraska, Senator Johanns.

Mr. THUNE

Mr. THUNE. Mr. President, if I might add one point. I think the Senator from Minnesota did point out that there are a significant number of jobs that are associated with this industry--in fact, one-half million jobs. They are American jobs. They are jobs in the heartland of this country. They are jobs that help grow the economy, make it more prosperous. It strikes me, at least, that what we ought to be looking at is more jobs in this country and less investment in foreign regimes, where we get a lot of our energy today. Mr. President, $1 billion a day is what we send outside the United States because of our addiction to foreign oil. We have a dangerous dependence upon foreign energy, and we have a fuel that, as I said, displaces 445 million barrels of oil every single year--more than we import from Saudi Arabia. That is a pretty remarkable number when you think about it. We had a debate here a few weeks ago on the floor of the Senate about whether we ought to change tax policy with regard to oil companies. The decision was reached that we should not do that; that it would be punitive, directed at oil companies. We decided, too, that it would raise taxes on gas for people in this country. I would make the same argument today. We are talking about a tax increase--a large tax increase--which we know is going to get passed on. So we are talking about raising taxes on consumers at a time when they can least afford it. We have today 3\1/2\ to $4-a-gallon gasoline. The last thing consumers in this country need is something that would actually push that gas price higher. In fact, if we did away with biofuels altogether--which some people would like to do--there was a study out last year, in 2010, that said the price per gallon of gasoline would go up by 89 cents a gallon. So we have a proposal here that would have an adverse impact on energy prices, fuel prices for people in this country, which, frankly, again, because of the commitment that was made last December, strikes at the very heart of economic certainty, which so many of us come down here and talk about: the importance of having policies in place that are reliable, that people who are investing in particular areas of our economy can know they are going to be there, at least when Congress makes a commitment. This completely undermines the commitment Congress made back in December that this particular tax credit would be in place until the end of the year. So what the Senator from Minnesota and I have done is propose a path forward that we believe makes sense and that is a thoughtful, measured, reasonable, responsible way in which to get to the goal that many of the proponents of the amendment that will be voted on tomorrow want to get to; that is, to phase down the volumetric ethanol excise tax credit. But it does it in a way that makes sense for American consumers and those who have investments in the industry today. So I hope my colleagues will take a look at this legislation. We think we can get it moving this year. It does, as was noted by my colleague from Minnesota, put a significant amount toward reducing the debt, which I think is something all of our colleagues are very interested in doing. So we will present this legislation, obviously, to our colleagues and hope there will be many who will choose to support it. Mr. President, I yield the floor back to the Senator from Minnesota.

Mr. THUNE. Mr. President, if I might just say to my colleague from Minnesota, I appreciate her good work and advocacy on this subject. This is something we have been working on for some time, along with some of our colleagues on both sides of the aisle, for a lot of reasons; one of which, of course, is because, as the Senator from Minnesota mentioned, these are difficult fiscal times. Obviously, every area in our budget needs to be reviewed and scrutinized and looked at to see where we might be able to achieve some savings. But, as my colleague noted, there is a right way and a wrong way to do this. The way that has been proposed in the amendment that was offered, and on which the cloture vote will occur tomorrow, is the wrong way. We cannot tell an industry in December we are going to give them a set of policies that are going to be in effect for the year, that they are going to be able to make investment decisions, they are going to be able to go to their lenders, they are going to be able to go secure financing based upon this set of policies--we do that around here all the time. We make policy, and we try to do it in a way, hopefully, that gives those who are investing their dollars some certainty about what those policies are going to be. Well, how can we then, in the middle of the year, come back and say we are just going to pull the rug right out from under them? We are sorry, that is just the way it is. This is gone. Well, frankly, there is a much better way to go about doing this, and what the Senator from Minnesota and I have proposed does just that and, in my view, does this in a responsible, measured, thoughtful, reasonable way. We get to the same ultimate result, which is that for those who are really interested in doing away with the volumetric ethanol excise tax credit, it does phase it out, but it does it in a way that does not create disruption and harm and allows people to plan for the future. It also invests some of those resources in areas that are important to the future of that industry; namely, blender pumps, which is the one thing that does not exist out there today, at least not in any great numbers. If those pumps were more available, I believe we would see a lot higher usage of the fuel than we already have seen. But we already know it is 10 percent of our fuel supply. Whether the opponents of this like it or not--and I know they do not--there are 13 billion gallons of ethanol produced in this country. At least that is what it was in 2010. We assume it will be that number, maybe a little higher, this year. That displaces 445 million barrels of imported crude oil. That is 55 million barrels more than the total crude oil imports from Saudi Arabia last year. Now, think about that: a fuel that is produced from a kernel of corn now displaces more than the entire imports of Saudi foreign oil into this country. That is what we ought to be looking at. We ought to be looking at more ways to produce domestic energy, home-grown energy, adding that to our fuel supply rather than taking it out. What the amendment our colleagues are trying to get a vote on tomorrow would do is basically to say to this industry: Yes, we are going to take away this particular tax incentive, and we are going to do it right in the middle of the year. We are going to do it, and we do not like this industry--which is probably what animates a lot of the opposition to this because if people look at the facts, if they look at the contribution that biofuels have made to our fuel supply in this country, it is significant. Ten percent of our entire fuel now is biofuels. In fact, if we look at the other byproduct of biofuels--once we take the starch out of that kernel of corn and convert it into liquid form, we can get, for every bushel of corn, almost 3 gallons of ethanol. But we also get dry distillers grain, which is something that has been used extensively now for feed for livestock. So if we take 5 billion bushels of corn, for example, that are used for ethanol production in any given year, the feed product equivalent is about 1.7 billion bushels of corn that is returned to the livestock food chain as this ethanol byproduct called dry distillers grain. So we are adding additional protein that is fed to livestock in addition to the almost 3 gallons of ethanol we get from every single bushel of corn. So I do believe there is an approach that makes sense. What the Senator from Minnesota and I and many of our colleagues on both sides have come together around is a way in which we can move forward, and do it in a way that not only makes it reasonable for the industry to plan for the future but also in a way that returns dollars to the Treasury of this country because there is $1 billion in here for debt retirement. I think that is something the industry recognizes, we all recognize, and we need to address. It is addressed as part of this bill. So I appreciate the good work of the Senator from Minnesota in working with me, along with other colleagues of ours, to introduce the bill we introduce today.