Henry Waxman

Mr. WAXMAN

Mr. WAXMAN. Mr. Chairman, I rise in opposition to section 762(c) of this legislation. Methyl bromide is a powerful ozone depleting substance. Releasing methyl bromide into the environmental degrades the Earth's protective stratospheric ozone layer, increasing the risks of skin cancer and cataracts. As a result, the United States has joined with the international community to phase-out methyl bromide by 2005 with only limited exceptions. Unfortunately, section 762(c) of the ``Farm Security Act'' could be interpreted to grant the Secretary of Agriculture the authority to allow continued use of methyl bromide even if the use is not in conformity with our international commitments under the Montreal Protocol. The provisions may well circumvent or override regulations issued under the Clean Air Act and the Montreal Protocol. This language could shift EPA's traditional authority to implement the Protocol to the Department of Agriculture, notwithstanding the fact that Congress affirmed EPA's primacy on this issue as recently as 1998. Additionally, the provision waive compliance with the Administrative Procedures Act, the Department of Agriculture's policy on public participation, and the Paperwork Reduction Act. These provisions could significantly undermine our efforts to protect the stratospheric ozone layer as well as the nation's credibility in international meetings. These provisions are strongly opposed by the environmental community, including the following groups: American Rivers, Friends of the Earth, Greenpeace, League of Conservation Voters, National Audubon Society, National Environmental Trust, National Parks Conservation Association, Natural Resources Defense Council, Physicians for Social Responsibility, 20/20 Vision. Mr. Chairman, we should strike these potentially destructive provisions. I urge all members to support removing these provisions as this bill proceeds through the legislative process.

Mr. WAXMAN

Mr. WAXMAN. Mr. Speaker, on September 21, the House passed H.R. 2926, legislation providing billions of dollars of financial relief to the airline industry from the September 11 terrorist attack. Unfortunately, H.R. 2926 was rushed through the legislative process without any independent assessment of the actual losses incurred by air carriers or consideration by the relevant committees. And it was considered on the House floor under a rule that prohibited any amendments and limited debate to one hour. Although I support the well-meaning intentions that motivated H.R. 2926 and the paramount need to provide aid to the victims of the September 11 tragedies, I oppose this fundamentally flawed bill and want to take a few minutes to explain my reservations. H.R. 2926 fails to address essential measures, such as airline security and assistance to displaced workers, but includes numerous provisions with cost ramifications that have not been considered carefully. While the bill provides specifically for $15 billion in relief to the airlines, the final cost of the bill could easily be far higher. Further, the bill establishes a compensation scheme for victims that could commit federal taxpayers to pay more to the families of deceased Wall Street executives than to the families of the firefighters who lost their lives trying to rescue others. This may well be a policy choice that Congress would have ultimately made, but it is not a policy choice or precedent that Congress carefully considered or even debated. no provisions to improve airline security The most important element of an airline relief bill is improving airline security. Unless airline security is improved, any airline bailout may fall. No matter how many billions of taxpayer dollars are given to the airlines, no airline can stay afloat if Americans refrain from flying. Unfortunately, the bill contains no funding for airline security measures. It also contains no provisions to enhance security, such as making airline security a federal responsibility. The legislation thus does little to assure Americans that flying will be safe again. The rationale for failing to address airline security is that airline security should remain an airline responsibility and should not be ``federalized.'' But this is exactly the same reasoning that is responsible for our current, deeply flawed system of airline security. In past years, the airline industry has resisted implementing stringent security measures on the grounds that the costs are prohibitive. As recently as the week following the September 11 attacks, an Alaska Airlines executive testified that he believed Americans would be unwilling to pay a three-dollar surcharge on their airline tickets to fund security measures. no support for displaced workers In the aftermath of the September 11 attacks, airlines reportedly have already laid off over 100,000 workers, and some airlines are refusing to honor the standard severance provisions of their labor contracts. H.R. 2926, however, provides no relief whatsoever for these workers and their families. It contains no funds for laid-off workers who now lack health insurance. It contains no assistance for job- training that would help these workers find new employment. And it contains no funds to help support laid-off workers and their families during the search for new employment. At the same time that the legislation ignores the needs of laid-off workers, the bill protects airline executives who earn millions of dollars in compensation. The legislation provides that to qualify for loans, airlines must freeze current executive compensation at 2000 levels for two years and limit severance pay to twice that amount. This means that airline CEOs can continue to earn astronomical salaries and receive multi-million dollar severance packages. Airlines do not have to limit executive salaries at all to qualify for the other benefits provided in the legislation, such as the $5 billion in grants awarded by the bill, the limits on liability, and the potential federal payment of increased airline insurance premiums. excessive relief for the airline industry The airline industry deserves federal support after the September 11 attacks. But I am concerned that the level of relief in the bill may go beyond what is reasonable. After the September 11 attacks, the Federal Aviation Administration grounded all airplanes for two days and gradually resumed service thereafter. This order caused a cash crunch for the airlines. They could take in no revenue during the shutdown, but remained responsible for many fixed costs. Airlines estimated that these losses amounted to $330 million per day. The airlines' strongest case is for federal relief to compensate them for this loss. (It should be noted, however, that even without a federal order, the airlines--which had the primary responsibility for safety--would have likely halted flights until new safety procedures were in place.) But the legislation provides many other forms of relief. The rationale for this additional relief is tenuous at best. There was no independent review of the need for these transfers of billions of dollars from federal taxpayers to the airlines. $5 Billion in Grants. Under the legislation, $5 billion in grants are available to the airlines that can be used to offset any future losses between now and the end of the year that are attributable to the attack. Many other types of businesses will have downturns in revenues resulting from the attacks, but only the airline industry is likely to receive this special relief. Moreover, the bill provides minimal guidance on how the airlines are to calculate the losses. For example, the bill leaves open the possibility that an airline could choose to reduce its flights between now and the end of the year, lay off thousands of workers, but still obtain a substantial amount of the profit it would have realized had it flown a full schedule. $10 Billion in Loan Guarantees. The bill also provides $ 10 billion in federal loan guarantees. This measure was rushed through the legislative process without a reasoned examination of the need for this component in light of other relief provided by the package. Even the Administration initially opposed inclusion of this measure. In a September 20 hearing before the Senate Banking Committee--just one day before enactment of the bill--Treasury Secretary Paul H. O'Neill testified that if Congress approved the Administration's $5 billion grant proposal, ``the idea of loan guarantees makes no sense.'' Federal Payment of Insurance Premiums. The bill allows the government to pay increases on insurance premiums for the airline industry, as well as for any vendors, agents and subcontractors of airlines, from an existing federal airline insurance fund. The rationale for this provision is difficult to understand, particularly since other provisions in the bill limit airline liability for the September 11 attack and future terrorist attacks. But the costs are potentially enormous, as the provision covers not only airlines, but a broad range of related entities. The existing insurance fund contains only $83 million, but it is likely that the costs of increased premiums would substantially exceed that amount. Thus, to cover this cost, the federal government would have to appropriate additional money for the insurance fund. Further, making the federal government responsible for any premium increases provides a disincentive for the insurance industry and the airlines to negotiate low premium costs. problematic victim Compensation Scheme The legislation contains provisions to provide federal compensation to the victims of the September 11 attacks. I strongly support this humanitarian gesture, but I have questions about the details of the victim compensation scheme, and whether Congress has adequately considered the implications of this provision. The bill provides that a Special Master should use a tort model to determine the extent of compensation to individuals, basing compensation in part on the ``economic'' losses suffered, which includes the ``loss of earnings or other benefits related to employment'' of the victim. This model makes sense when a defendant has been held responsible for a wrongful death. But when the compensation is being provided by the federal taxpayer, it may result in inequities. As a government, we should not value the life of a Wall Street executive more than the life of a firefighter, secretary, or janitor. But under a strict application of the tort model, Wall Street executives with large incomes would have greater ``economic'' damages and hence would be entitled to larger federal payments than firefighters, secretaries, or janitors who also lost their lives. The language in this area of the bill provides the Special Master with some discretion, and I hope the Special Master will use this discretion to ensure that the victim compensation is administered fairly. But I regret that the haste in which this legislation was put together made refining the victims compensation provisions impossible. There is a second important question that Congress didn't address: Should the compensation system in this bill be the model for future victims of terrorist acts or natural disasters? Past victims of terrorist attacks have not received the generous compensation amounts H.R. 2926 envisions. Apart from the obvious fairness question of how best to give victims and their families similar compensation, there are cost considerations that Congress did not evaluate if the model in H.R. 2926 is to be used in future cases. In short, compensation to the victims of the September 11 tragedies is appropriate and important. H.R. 2926, however, fails to thoughtfully address: How to allocate compensation among victims killed or injured on September 11; Whether past victims of terrorist attacks should be similarly compensated; Whether the compensation system will be a model for future victims; The estimated aggregate cost of this compensation system; How federal compensation will be coordinated with other compensation that the victims and their families will receive from charitable funds and other sources. Unknown and Potentially Significant Cost Ramifications In addition to the problems described above, the legislation also has another provision that could end up costing the federal taxpayer billions of dollars. The bill allows the Secretary of Transportation to determine that an air carrier is not liable for claims regarding losses suffered by third parties above $100 million in the aggregate arising from any terrorist acts that occur in the 180-day period following the enactment of the bill. Where the Secretary makes this certification, the government is responsible for liability above that amount. In the event of another airline-related tragedy or tragedies resulting from terrorist acts, this provision potentially could result in the expenditure of many billions of additional government funds. Lack of Independent Review The many substantive problems with the airline relief bill are the result of a defective process. Although the bill commits federal taxpayers to providing tens of billions of dollars in relief, there was no meaningful opportunity for review of the merits of the legislation by independent experts without a stake in the outcome. In particular, Congress erred by not adequately involving the General Accounting Office in review of this legislation. Nonpartisan and independent, GAO specializes in evaluating expenditures of federal programs. Yet Congress made no request for a formal GAO analysis before enacting the bill. Conclusion H.R. 2926 reflects a commendable and understandable response to a heart-breaking national tragedy. Unfortunately, the process used to draft the legislation prevented the careful review that is needed to ensure the bill is an effective and fair response to terrorist acts. By omitting any provision dealing with airline security or compensation for displaced workers, this legislation unwisely focuses just on responding to the immediate needs of the major airlines. That need is unquestionably urgent, but addressing it without resolving other urgent problems is a mistake. H.R. 2926 received so little scrutiny that it's impossible to assess how much the bill will cost federal taxpayers. At a minimum, this legislation will obligate the federal government to provide $15 billion in financial assistance, but the actual costs could be far higher. And if this bill becomes a model for other affected industries or future victims of terrorist attacks, the total costs could multiply rapidly. In the aftermath of the September 11 attacks, our nation has learned to put a premium on the value of shared sacrifice. Shared sacrifice was embodied by the firefighters who charged into the World Trade Center to rescue people they never met and who died in the effort. Shared sacrifice, we're told, is over 100,000 workers losing their Jobs in the airline industry, and many being denied promised severance benefits. And shared sacrifice will be exemplified in the commitment of the men and women in our armed services who are being sent into battle. But under H.R. 2926, we have found there are limits to shared sacrifice. This bill asks for no sacrifices from those who earn millions in the airline industry. To the contrary, it allows airline executives to continue to earn millions of dollars in salary and compensation, while at the same time imposing no new security responsibilities on the airlines and providing no relief to laid-off workers. That is inexcusable. Congress and the Bush Administration are going to have to respond to unexpected demands and urgent needs in the coming months. It is essential that our legislative responses be thoughtful, carefully responsive to actual problems, and effective. Given the haste in which it was considered, H.R. 2926 likely fails these tests. We can do better in future challenges, and we owe it to our nation to do better.

Mr. WAXMAN

Mr. WAXMAN. Mr. Speaker, as our country faces some very difficult times, we are going to hear a lot about shared sacrifice. Shared sacrifice is firefighters charging into the World Trade Center to rescue people they had never met and dying in the effort. Shared sacrifice, we are told, is the unfortunate news that over 100,000 workers are going to lose their jobs for the good of their companies. Shared sacrifice, it is clear, means that our sons and daughters, mothers and fathers in the military are going to be sent into battle. But today, in the first economic bill to deal with the September 11 tragedy, we see that there are limits to shared sacrifice. Under this airline bailout bill, senior executives will be able to continue to earn millions of dollars in salary and other compensation. In one case, this bill will permit a senior executive to earn over $34 million and, if he leaves the company, to receive up to $70 million in severance benefits. This is inexcusable, it is obscene, it exploits a painful tragedy, and it makes a mockery of the idea of shared sacrifice. We cannot change this bill; but we can be morally outraged by this inequity, and we can ask the airline CEOs to do what this bill does not. They are asking taxpayers for billions of dollars in help, and then they will be firing thousands of their workers. At this time, they should publicly adopt policies that limit executive compensation to reasonable levels. That will honor shared sacrifice and the sacrifices so many others have made and will make.

Mr. WAXMAN

Mr. WAXMAN. Mr. Speaker, H.R. 788 is special legislation which transfers a surplus piece of Federal property to the City of Kewaunee, Wisconsin. This piece of property is no longer needed as an Army Reserve Center nor is it needed for any other federal government purpose. I would like to thank the Gentleman from Wisconsin, Mr. Green, for working with me to address my concerns regarding this piece of legislation. I know it was his desire to have H.R. 788 passed prior to the House breaking for summer recess. However, by waiting until today, we were able to work together over the recess period and produce a stronger bill. The bill before us is significantly different from the bill as it was originally introduced. I will highlight the differences quickly. The bill specifies that the property must be used and occupied only by the City, or by another local or State government entity approved by the City. In addition, the bill includes a reversionary clause which states that, during the next 20 years, if the property is not used as intended, it will revert to the federal government. Furthermore, the bill states that the property cannot be used for commercial purposes. In the 1949 Property Act, Congress lays out how surplus federal property is to be disposed. GSA is instructed to sell property for the most profit possible. Monies received are used for a number of things including environmental clean-up and land preservation. However, the Act also listed a number of ways a piece of property can be transferred free of charge under what is called a ``Public Benefit Conveyance'' exception. Congress decided that the public interest in giving property away for ``public benefit'' outweighs potential profit from public sale. Included in the 1949 Act were four such public benefit exceptions: health, education, park and recreation, and historical monuments. Since 1949, the Act has been amended numerous times to add more public benefits. These additions are wildlife refuge, ports, prisons, airports, homeless, self-help housing, and law enforcement/emergency response. The City of Kewaunee is interested in using this former Army Reserve Center to house its city hall, city council, and senior center. Those types of use do not fit into any of the 11 current exceptions. Therefore, the federal government cannot transfer this property free of charge without special legislation like that which is before us today. Although I am pleased that the City of Kewaunee is able to benefit from this property transfer, this bill should not in anyway be seen as setting a precedent for future special legislation. Congress can and should amend the Act if it determines that city halls or other exceptions should exist. With proper hearings and mark-ups, the Committee on Government Reform may decide that the definition of public purpose should be expanded. It may decide otherwise.

Mr. WAXMAN

Mr. WAXMAN. Mr. Speaker, I join my colleagues in shock, horror, and outrage over the indescribable tragedy that has engulfed our nation. Yesterday, extremists hijacked our own domestic airplanes and used them as missiles in a horrific terrorist attack against the symbols of American economic and military strength. No words can fully describe the sense of loss that we and other members of our American family feel. The lives of thousands of families were shattered among yesterday's rubble and we grieve with them. No American was left untouched by yesterday's quiet heroes who put their own lives at risk. From the employee of the World Trade Center who carried a disabled woman on his back down dozens of floors to safety, to the firefighters and police officers who lost their lives running into burning buildings, to airplane passengers who performed tremendous acts of heroism that will forever remain unsung, to the thousands who gave blood and volunteered to help in any way they could. There are so many examples of selfless acts by Americans who, despite their own crises, looked to ease the tragedy of those around them. We also cannot forget the courage of tens of thousands of federal employees who reported for work today despite the fear and vulnerability they cannot help but feel. Yesterday's terrorist attack was an act of pure evil, but the foundations of American democracy remain intact and strong. As incomprehensible as it is to understand how our lives will be changed, one thing is certain--the United States Government will seek out those responsible, avenge these attacks, and take fierce retribution against the cowards who are responsible. America is at war. We will remain vigilant and we trust that all civilized nations of the world will join us in our determined fight to uphold democracy and the rule of law.

Mr. WAXMAN

Mr. WAXMAN. Mr. Speaker, I rise today in recognition of the fourth anniversary of the passage of the Morris K. Udall Parkinson's Research Act. I cannot think of a more fitting tribute to my friend and colleague than this legislation. Mo Udall was a member of the House Representatives for thirty years from 1961-1990. He earned the respect of all who served with him through his humor and civility as well as his ability to work with Members from both sides of the aisle. Mo's courage and determination to continue to serve even after being diagnosed with Parkinson's disease in 1978 was an inspiration for all who had the privilege to be around him during that time. He was determined to continue to lead a full and vigorous life even in the face of this debilitating disease. Although his death in 1998 was a blow to all of us, his legacy lives on in the great and important work started through this legislation. Mr. Speaker, Parkinson's disease afflicts 1 million Americans, 40 percent of whom are under the age of 60. This landmark legislation dramatically expanded and coordinated clinical research into Parkinson's disease as well as established the Morris K. Udall Centers across the country. These centers have been an invaluable resource in the fight against Parkinson's disease. They have provided state-of-the- art training facilities for new researchers and the resulting work has greatly increased our knowledge and understanding of the disease. We have an opportunity and an obligation today to rededicate ourselves to the goal of finding a cure for Parkinson's disease. Our initial investment into research four years ago has yielded impressive returns. Still, however, much more needs to be done. Mr. Speaker, I call on Congress to continue the valuable work we started four years ago and fully fund federal research into Parkinson's disease done by the National Institutes of Health and the Morris K. Udall Centers.

Mr. WAXMAN

Mr. WAXMAN. Mr. Speaker, today I am introducing H.R. 2693, the Holocaust Victims Insurance Relief Act, a bill to require all companies operating in the United States to disclose the names on Holocaust-era insurance policies. The legislation would also enable survivors to access to this information by establishing a Holocaust Insurance Registry at the National Archives. At its core, this is a moral issue. Insurance companies holding Holocaust-era policies have a responsibility to disclose any information that will help survivors finally reclaim their policies with dignity and equity. In many cases, company archives contain the only existing files related to the countless policies that were stolen from victims of Nazi ghettos and death camps. Just one year ago, on July 17, 2000, the United States and Germany signed an Executive Agreement establishing the German Foundation ``Remembrance, Responsibility, and the Future,'' a $5 billion fund to settle all Holocaust-era claims, including slave and forced labor, banking, and insurance. During the preceding ceremony, U.S. Holocaust Envoy Stuart Eizenstat said, ``It is critically important that all German insurance companies cooperate with the process established by the International Commission on Holocaust Era Insurance Claims, or ICHEIC. This includes publishing lists of unpaid insurance policies and subjecting themselves to audit. Unless German insurance companies make these lists available through ICHEIC, potential claimants cannot know their eligibility, and the insurance companies will have failed to assume their moral responsibility.'' Unfortunately, little progress has been made since then and the urgency of this issue grows as Holocaust survivors are dying every day. Although the ICHEIC was established in1998 to expeditiously resolve unpaid Holocaust-era claims, more than 84% of the over 72,675 claims inquiries filed remain unresolved because the claimants cannot identify the company holding their assets. Furthermore, it is outrageous that regardless of their level of compliance with ICHEIC rules insurance companies that contribute to the Foundation fund are given a minimal $150 million cap on all liabilities, virtual legal immunity in U.S. courts, and an arbitrary January 31, 2002 expiration of their obligation to accept claims. The insurance companies must be held accountable. H.R. 2693 will ensure that Congress will not stand by and allow them to shirk their obligation. This bill also expresses congressional support for states seeking to adopt and enforce their own laws to address the issue of unpaid Holocaust-era policies, and recognizes the efforts of legislatures in California, New York, Florida, Washington, and Minnesota. I also understand that similar efforts are underway in the legislatures of Texas, Illinois, and Massachusetts. California led the nation in enacting a Holocaust insurance reporting statute at the state level, and it has provided the insurance companies with a powerful incentive to comply with the law. It is time for us to extend this relief to survivors across the country. I would also like to thank my colleague Representative Engel, who is an original cosponsor of this bill and who was instrumental in introducing similar legislation in the 105th and 106th Congresses. Less than six months from today, the ICHEIC deadline for accepting claims will expire. We must act swiftly to make sure that survivors have the necessary information to file their rightful claims. I urge my colleagues to support this legislation and I hope we can bring it to the floor for a vote in the near future.

Mr. WAXMAN

Mr. WAXMAN. Mr. Chairman, I am sorry to say it is hard to escape the conclusion that last night President Bush finally put so much pressure on the gentleman from Georgia (Mr. Norwood) that in the words of the New York Times editorial today he, quote, ``apparently sold out his own cause.'' That is sad for Americans who need and deserve a strong and enforceable Patients' Bill of Rights. Mr. Chairman, I just want to review what the American Medical Association concluded about the deal agreed to by their former ally: It overturns the good work done by States in protecting patients; it reverses developing case laws that allow patients to hold plans accountable when they play doctor. In other words, it makes things worse instead of better for patients. It provides patient protections, but does not allow enforcement of those rights. If the White House operatives thought they could defend the so-called ``compromise'' President Bush talked the gentleman from Georgia (Mr. Norwood) into, why did they insist that he make a commitment without talking it over with his allies in and out of the government? Why did they insist that drafting be rushed through in the wee hours of the morning, and insist that they move forward before consumer and physician groups and the American public could see and understand the provisions? Why do we find ourselves here on the House floor voting on an amendment that either deliberately or accidentally preempts State laws, disadvantages patients, and provides HMOs with a presumption that they are right and the patient and physicians are wrong. Mr. Chairman, I think the answer is obvious. They knew that if people really got a chance to look at this, they would see it for the sham that it is. This is not the way to enact a Patients' Bill of Rights. This is the way to ensure another stalemate. Reject this amendment.

Mr. WAXMAN

Mr. WAXMAN. Mr. Chairman, I yield 1 minute to the gentleman from California (Mr. Sherman).

Mr. WAXMAN. Mr. Chairman, I yield 1 minute to the gentleman from Washington (Mr. Inslee), who authored this amendment by way of legislation.

Mr. WAXMAN. Mr. Chairman, I yield 1 minute to the gentlewoman from California (Ms. Pelosi).

Mr. WAXMAN. Mr. Chairman, will the gentleman yield?

Mr. WAXMAN. Mr. Chairman, I thank the gentleman for yielding. I think it is worth emphasizing the point that California will have to meet the clean air standards that are set for the country. In fact, we even have more stringent standards. Some previous speakers have talked as if we want to get out from under the clean air requirements to protect the environment. We are going to meet the clean air standard; but we do not want to be told by Washington that we have to either use MTBE, which gets into our drinking water, and we do not want to use that; or we have to go into the Midwest and buy ethanol, when we can reformulate our own gasoline in California that will burn clean enough to meet the clean air standards. We want to be able to make decisions for ourselves; and after we get that, we want other States to have that, as well. We would have preferred to have an amendment that would have covered everybody at once, but start with California. Do not tell California how to handle our own gasoline, to have balkanized fuels. We want one fuel in California that will clean up the air in the State, and not have to use ethanol to benefit Archer Daniels Midland in the Midwest, or MTBE to benefit some of the manufacturers in Texas. We want to handle our own affairs for ourselves.

Mr. WAXMAN. Reserving the right to object, Mr. Chairman, I want to use this time reserving the right to object on this unanimous consent request to address the remarks by the gentleman from Minnesota, who said his State decided to use a blend of ethanol, 10 percent, in their gasoline. I applaud that. The State of Minnesota can make its decision for itself. If they are happy with that decision, fine. But we should not deny the State of California the same ability to make our own choice for fuels. I think we ought to let every State make the decision. I have heard over the years Republicans say, and I have learned from them, that ``We do not have all the wisdom here in Washington. We do not have to make the decisions for every State here in Washington. There are some decisions the States can make for themselves,'' as long as they are meeting the environmental standards, which we set out in the Federal law. So I applaud Minnesota if that is what they want to do. It is their choice. Let California and other States make our choice. Do not force us either to use MTBE, which we will not use because it damages our drinking water, or have to import ethanol at a great expense with a possible interruption of supply when it will even make the air dirtier, the way we see it in California, than what we would get if we had one reformulated gasoline.

Mr. WAXMAN. Mr. Chairman, I withdraw my reservation of objection.

Mr. WAXMAN. Mr. Chairman, I yield 1\1/2\ minutes to the gentlewoman from California (Mrs. Capps).

Mr. WAXMAN. Mr. Chairman, I seek recognition in opposition to this amendment.

Mr. WAXMAN. Mr. Chairman, I rise in opposition to this amendment, and I yield myself 4 minutes. Mr. Chairman, this amendment will remove what is an exemption under existing law on intrastate pipelines in California. This amendment would deny California, and only California, the ability to regulate pipelines that are wholly within the State's borders. It singles out California for unequal treatment. The amendment would overturn decades of established practice without serving any beneficial purpose whatsoever. The Hinshaw exemption dates back to 1954 when Congress amended the Natural Gas Act to give States sole jurisdiction over pipelines entirely within their borders. As the legislative history explained, the Hinshaw exemption was designed to prevent unnecessary duplication of Federal and State jurisdiction. These concerns are as important today as they were 47 years ago. Supporters of the amendment seem to believe that California has done an inadequate job regulating intrastate pipelines. They believe California's high natural gas prices are the result of insufficient pipeline capacity within the State. This is simply not true. The cause of California's high natural gas prices was market manipulation by a subsidiary of El Paso Natural Gas, which owned the rights to and about a third of the capacity on the El Paso pipeline into Southern California. The El Paso subsidiary drove gas prices through the roof by withholding capacity. El Paso lost its stranglehold on the California market on June 1 when its right to control pipeline capacity expired. Overnight, natural gas prices in California dropped. Gas prices at the Southern California border were around $10 per million Btu on May 31. By June 8, a week later, they had dropped to around $3.50. If the problem with natural gas prices in California was inadequate capacity within California, this dramatic drop in price would not have occurred. There was no increase in pipeline capacity in California during this period. There is no need for this amendment. The only pipeline in California that sometimes has a shortage of capacity is the Southern California Gas pipeline, but the capacity issue on this pipeline is being addressed by California. SoCal Gas is building four additional pipeline expansions. These will be complete by this winter, the peak demand season; and they will make sure Southern California Gas continues to have enough natural gas to serve its customers. I also oppose this amendment because it places California at the mercy of the Federal Energy Regulatory Commission, which has shown little interest in the welfare of California consumers. Giving FERC jurisdiction will not expand capacity any faster than is already being expanded. It will only complicate the expansion and slow it down. Let me tell my colleagues, from a California perspective, that this is a very dangerous amendment. It would put us at the mercy of FERC, where El Paso Natural Gas and others, who have a record of manipulation of natural gas price, will have a friendlier audience than the State of California, and it would have Washington, D.C. telling the State of California it cannot handle its own affairs. In Washington, the decisions have to be made, not in California, for intrastate, intrastate California pipeline capacity. I strongly oppose the amendment. Mr. Chairman, I reserve the balance of my time.

Mr. WAXMAN. Mr. Chairman, I yield 1 minute to the gentleman from California (Mr. Radanovich).

Mr. WAXMAN. Mr. Chairman, I yield myself such time as I may consume.

Mr. WAXMAN. I yield to the gentleman from California.

Mr. WAXMAN. Reclaiming my time, I will answer the gentleman's question. The comments were made by my colleagues from Texas that we are downsizing the ability of the pipeline in California to carry natural gas. That is not true. They said we do not have full capacity to handle intrastate all of the gas that is coming to the border. I have a chart right here that shows how California did not use its full capacity throughout the year 2000. That demonstrates that we have additional capacity. We are trying to build up for more natural gas in California. What this amendment does is put us in the lap of FERC. When it comes to natural gas regulation, FERC's record is pretty bad. When natural gas prices in California skyrocketed earlier this year, FERC regulators were nowhere to be seen. These prices were caused by market manipulation by a subsidiary of El Paso Natural Gas which hoarded unused pipeline capacity. California regulators filed a complaint about El Paso with FERC back in April 2000. It is now August 2001, and FERC still has not resolved the El Paso problem. Anyone who thinks that FERC regulators can do an adequate job regulating California's pipelines just has not been paying attention over the past year.

Mr. WAXMAN. I yield to the gentleman from California.

Mr. WAXMAN. Mr. Chairman, I reserve the balance of my time.

Mr. WAXMAN

Mr. WAXMAN. Mr. Speaker, I am releasing today an important report. It is titled Hitting the Jackpot: How the House Energy Bill (H.R. 4) Rewards Millions in Contributions with Billions in Returns. Mr. Speaker, what this report indicates is that the cumulative value of campaign contributions from coal, oil, gas, nuclear and electric utility industries in the 2000 election cycle was $69.5 million. The cumulative value of the tax breaks and subsidies for these industries in this energy bill comes to $36.4 billion. If campaign contributions are viewed as a form of investment in the legislative process, the rate of return on this investment is an astounding 52,200 percent. Mr. Speaker, I want to point out that the majority sets the agenda, and they set an agenda that gave away $2 trillion in tax cuts earlier this year. They are now going to give away $36 billion in tax breaks and subsidies to the energy special interests. We have a rule before us that will not provide for an opportunity to move to strike these provisions. The American people ought to understand that this is not a balanced bill. This is a special interest bill. It appears to include rewards for the campaign contributions from the energy industry. Boy, are they getting a good return on their money. Mr. Speaker, I include for the Record the following report. Hitting the Jackpot: How the House Energy Bill (H.R. 4) Rewards Millions in Contributions with Billions in Returns (Prepared for Rep. Henry A. Waxman, Minority Staff, Special Investigations Division, Committee on Government Reform) executive summary This report which was prepared at the request of Rep. Henry A. Waxman, compares contributions from the energy industry to provisions in H.R. 4, the energy bill sponsored by the Republican leadership of the U.S. House of Representatives. The report finds that energy interests that gave millions of dollars in campaign contributions during the last election cycle will receive billions of dollars in tax breaks and subsidies under the legislation. The cumulative value of the campaign contributions of the coal, oil and gas, nuclear, and electric utility industries in the 2000 election cycle was $69.5 million; the cumulative value of the tax breaks and subsidies for these industries in H.R. 4 is $36.4 billion. If the campaign contributions are viewed as a form of ``investment'' in the legislative process, the ``rate of return'' on this investment is an astounding 52,200%. Table 1 shows how much key energy industry sectors contributed to federal campaigns and how much they stand to benefit from H.R. 4. To put this in perspective, the total $36.4 billion cost of the tax breaks and subsidies in H.R. 4 is equivalent to the federal taxes paid by 9,764,169 typical households in 1998.