Paul Wellstone

Mr. WELLSTONE

Mr. WELLSTONE. Mr. President, I rise today to thank the Chairman and Ranking Member for including in the manager's amendment, my amendment to the VA/HUD appropriations bill. This amendment addresses the loss of Section 236 and Section 221 housing across the country. Prepayment of federally assisted mortgages is exacerbating an already static housing market and is wrenching for the tenants, who often barely receive adequate warning that their homes may soon become too expensive for them to afford. My amendment provides tenants and local officials with fair notice that a Section 236 or 221 building is leaving the federal subsidy program. This allows tenants the ability to try and find alternate housing, and non-profits and local governments the opportunity to preserve the housing by buying out the owner's interest. Section 236 and Section 221(d)(3) of the National Housing Act provided for the creation of federally assisted, privately owned affordable housing. Under the Section 221 program, the federal government insured the mortgages on certain rental housing, under the Section 236 program, the federally government subsidized the interest payments that owners of rental housing made on the mortgages. Both of the programs offered the security of a federal subsidy for building owners in return for their maintaining these buildings as affordable housing--the regulatory agreement signed between HUD and the building owner restricted the rents which could be charged on the units within the building so long as the mortgage was insured or subsidized by HUD. To be eligible for the program, an owner signed a 40 year mortgage, however, the deeds of trust for such properties that the owner could prepay the mortgage or terminate the insurance contract after 20 years and potentially remove that building from the pool of affordable housing. By the late 1980's, Congress realized that the loss of Section 236 and Section 211 properties could be devastating to the supply of affordable housing. In many communities across the country, housing and real estate markets were tight enough that owners of such properties had a strong incentive to leave the programs and convert their units to market rate, or to find alternate uses for the property. In 1987, Congress enacted the Emergency Low Income Preservation Act, which created a two year moratorium on prepayment of Section 221 or Section 236 mortgages. This was done to allow Congress some time to formulate a comprehensive solution to the prepayment problem. In 1990 as part of the National Affordable Housing Act, Congress enacted the Low Income Housing Preservation and Resident Homeownership Act of LIHPRHA (LIPRA). This law was intended to manage the prepayment process, to provide incentives for owners with critical properties to stay in the system and to create a mechanism for transfer of properties to nonprofit or resident ownership. Today this system is in tatters. Congress has not appropriated funds for the incentive program since fiscal year 1997 and it appears that HUD is no longer enforcing the provisions of LIHPRHA which call for fair notice to tenants and a plan of action to be submitted by owners. Mr. President, the loss of Section 236 and 221 properties has become a crisis in my state. The Minnesota Housing Finance Agency believes that 10% of Minnesota's Section 236 and 221 housing is at risk--Housing advocates believe that the long term losses will be far greater. But the loss of these apartment buildings does not occur in a vacuum, the Twin Cities metropolitan area has a vacancy rate of 1.9 percent--five percent vacancy is usually regarded as full. The loss of these buildings as affordable housing is absolutely devastating to these communities. Mr. President, I'd like to share some examples from my own state of illustrate the problem facing these tenants. These Minnesotans have had their lives completely disrupted by the prepayment of a Section 236 mortgage and if you listen to their stories over and over again you hear the same thing: with more notice they could have organized an equitable buy out of the current owner's mortgage or have made a dignified search for other housing. Terry Truja moved into Oak Grove Towers in Minneapolis, MN, ten years ago when she became disabled; she now uses a wheel chair. She lived in the neighborhood around Oak Grove Towers for seven years prior to her disability and worked as a nurse. Her building's Section 236 mortgage was prepaid in July of 1997. Prior to the prepayment, Terry paid $250 a month for her apartment. After prepayment, her apartment now rents for $615. She has been able to stay in her apartment for one year thanks to en Enhanced Section 8 Voucher, but she will not be eligible for ordinary Section 8 after that period. Terry and the other tenants of Oak Grove Towers received 60 days notice that the mortgage was being prepaid. They are trying to work with a local non-profit who wishes to buy the building and keep it as low income housing, but now they are fighting against time. Extra notice could have made all the difference. Elza Glikina is a Russian immigrant who lives with her husband in Oak Grove Towers. She speaks fluent English and serves as a contact with the outside world for the many elderly Russian immigrants who live in the building, many of whom do not speak English. She says that these people ``lived through so much grief in their lives'' back in their home countries and that they ``thought they had found peace'' here in Oak Grove Towers where they have formed closed bonds with others of the same nationality. For them, Elza said, the prepayment was terrifying. It reminded them of arbitrariness and soullessness of life in the Soviet Union. 60 days was not enough time for these immigrants to get their affairs in order, to apply for supplemental assistance. Though Elza is more capable then most, she says that she ``feels sick at the thought of moving.'' Jennifer Nguyen is a severely disabled Vietnamese immigrant who lives next to her brother and mother in Oak Grove Towers. She suffers from multiple medical problems, including tuberculosis and has only a portion of one lung remaining. Her doctor is located in the neighborhood, and her health might be seriously jeopardized if she is forced to move. She likes living at Oak Grove Towers, but if the building is not sold to a non-profit, she will likely have to relocate to the suburbs--away from her friends and her doctor. Ann Peterson is a mother with a nine year old son who lives in Boulevard Villa in Coon Rapids, MN. She works, but medical problems make employment difficult. The mortgage on their building was prepaid in April of this year. Tenants and local housing officials received three weeks notice of prepayment. Ann and others tried to find a non- profit to take over the mortgage but three weeks was just not enough time--in fact it took 6 weeks after prepayment for the paperwork to provide Enhanced Vouchers to be approved. She has lived there 8 years and says that she still ``has faith that they will be able to stay.'' She continues to try and find a buyer for the building. Mr. President, these are a few stories from two buildings where the Section 236 mortgages have been repaid. Together they represent the potential loss of 281 units of affordable housing--in a market that already has a 1.9 percent vacancy. Again, I think there stories show why notice is important for two reasons: as a buffer to the tenant and to allow local governments and non-profits time to react to keep the housing affordable. Mr. President, I believe my amendment is a step in the right direction. It: 1. Requires an owner of eligable low income housing, such as a Section 236 or Section 221(d)(3) building, who intends to prepay a federally subsidized mortgage or terminate the federal insurance contract to give a one year notice of such intent to the tenants of the affected property and to the appropriate state and local authorities. 2. Waives this requirement in the event that the owner wishes to transfer the property to a non-profit or Residents Council which intends to maintain the units as affordable housing. 3. This amendment does not apply to owners who have already given notice of prepayment or termination, as of July 7, 1998, in accordance with current law and regulation. Under current federal law, tenants of federally assisted rental housing receive only 30 or 60 days notice of an owner's attempt to pre- pay an insured mortgage. This short time period makes it impossible for the tenants, their advocates, local or state government to devise any alternatives to prevent the permanent loss of affordable housing. Minnesota has enacted a one year prepayment notice requirement, but this been pre-empted by LIHPRHA, LIHPRHA specifically struck down state laws which put more restrictive requirements for Section 236 and 221 than is provided for in federal law. This was justified by the funding mechanism also included in LIHPRHA, which was designed to preserve the housing should the owner decide to prepay. Now that this federal funding is gone, I believe Congress should act to require a firm, one year notice period. Again, however, my amendment is not intended to cover owners who have given legal notice of prepayment or termination under the prepayment process currently being implemented by HUD. Mr. President, the Congressional budget office has determined that my amendment would not add to the cost of this bill. I don't believe it will be a burden to owners either. It simply provides warning to tenants, warning that I believe out of simple dignity they should be provided, and gives local and state governments the tools they need to preserve the housing--after buying out the owner at a fair price--in the affordable housing pool. Mr. President, other speakers have talked about the crisis in affordable housing. We are at a point in our history where we are simultaneously experiencing some of the most tremendous economic growth while enduring an all time high of renters with worst case housing needs--5.3 million people across the country. My amendment is a small change, but if it is a change which provides low income tenants with increased security and allows for ample warning so that housing can be preserved then, I believe it will have a big impact.

Mr. WELLSTONE. The Chairman and Ranking member's comments on property disposition reform are well taken. I thank my colleagues.

Mr. WELLSTONE. Mr. President, other colleagues may want to speak to that. I will take 2 minutes, I say to all of my colleagues. I would like to thank the Senator from Maryland for her very kind remarks. I have to say that I will not go now through the technical part of what happened. I am telling you that this was a real injustice. We sort of went on record saying we wouldn't do this, and we have done it. We shouldn't have. This amendment restores that funding to where it should go. I wish to say to my colleagues that we have a huge surplus. We really essentially took some of that money and put it in the highways. We shouldn't have. We got the highways. But we left the veterans out in the cold. They know that. All of these veterans organizations know that. I will say this tomorrow again. All these veterans know that. Senator Murray, Senator McCain, and many of my colleagues know it as well. I hope that there will be very strong support for this, Democrats and Republicans alike, because, again, the money should have gone to deal with the problem, to deal with veterans who really are struggling with illness based upon addiction to tobacco, and, if not, it should have gone into the veterans' health care. It should not have gone, as my colleague from Maryland said, to pay for additional highways, which is what happened. So let's correct a wrong. Please. Let's have a very strong vote on this tomorrow morning. I yield the floor.

Mr. WELLSTONE. Mr. President, my amendment would restore benefits to veterans with smoking-related diseases. How would we do that? It is simple. The TEA 21 highway program canceled the disability benefits that veterans would have received under existing rules and procedures, and it used that money instead to pay for more highway projects. My amendment would simply return the favor. It would repeal that offset from the highway bill. Let me go through the procedural history of this to review how we got to where we are today. This offset first appeared in the President's 1999 budget request. The administration, I think, wildly overestimated the cost of benefits for smoking-related disabilities. But this money was then taken from veterans and it was used elsewhere. There is a tremendous amount of indignation in the veterans community over this, and there should be. Congress decided to play the same game. In the budget resolution they agreed to deny benefits to veterans and use the money elsewhere just like it had been done by the administration. But the budget priorities were a little different. The savings were used for highway projects. That didn't happen on the Senate side, but by the time it came back from the House, that is what happened. That was the major reason I voted against that bill. The appropriate place to repeal this offset and restore veterans' benefits would have been in the technical corrections to the TEA 21 highway bill. Senator Rockefeller and I intended to offer an amendment which would have done just that, but we never got a chance because that amendment was folded into another conference report so we could never get an up-or-down vote. We all know that conference reports, as I just said, cannot be amended. As I have said before on the floor, it is only right that we should have a clean vote on this issue. This is not only a question of veterans, it is a question of accountability. There is simply no excuse for hiding behind procedural gimmicks to avoid responsibility. Some have said we have already voted on this bill, or we have already voted on this question, but I don't think that is true. Let me explain. The two votes we had on the budget resolution did not deal directly with this question. Senators got a chance to pretend they were for veterans and against the offset, knowing that 5 minutes later we could cast a vote in the opposite direction. We had some camouflage about doing a study sometime in the future. But I think we all recognize it was only a study. And the vote on the IRS reform bill was not a clean up-or-down vote; it was only a procedural vote, a point of order. We need to have a clean vote up or down, no subterfuge, no trickery. It is not enough to take these benefits away from veterans. Congress will add insult to injury by not having a clean up-or-down vote on this question. I think veterans should take a clear position on this issue, and that should go on the Record. Now, some may object to this amendment because it is legislation on an appropriations bill, or they may think that this appropriations bill is the wrong place to remedy this particular problem. Let me remind my colleagues that this offset was a jurisdictional raid to begin with. Transportation conferees stole the money without ever going through the Veterans' Affairs Committee. This was originally the Veterans' Affairs Committee. If we now repeal this offset through the Veterans' Affairs Committee, we will have to pay for it by taking even more money away from veterans. The highway bill took that money away. It was not taken away by the Veterans' Committee. Nobody wants to do that. Nobody wants to take more funding away from veterans. There are a few misconceptions that I would like to clear up. First and foremost, compensation for veterans with smoking-related illnesses was not a new program. It was not an expansion of a program. It was a benefit to which disabled veterans were entitled to under existing law. Veterans who had become addicted to tobacco because of their service in the military had the right to apply for disability. The highway bill took that right away. It is a very tough test that the veterans have to meet. Only 300 have passed it. These were not special rules, either. Those veterans had to meet the same legal and evidentiary requirements as for any other service-connected disability. They had to prove that their addiction began in the military service. They had to prove that their addiction continued without interruption. They had to prove that their addiction resulted in an illness. They had to prove that their addiction resulted in a disability. There is another thing that ought to be pointed out tonight. We are not really talking about $17 billion here. Let's be clear about it. OMB first came up with that figure based on an estimate of 500,000 claims granted every year. But over the past 6 years, a grand total of only 8,000 veterans have applied, and only 300 of those claims have been granted. CBO came in with a lower, but still high, estimate of $10.5 billion. But the TEA 21 conferees needed more money, so they took advantage of the higher OMB number to pay for a huge increase in funding for highways. The administration's cost projections are based on many, many unknowns. More importantly, OMB is assuming VA will grant 100 percent of all claims but, to date--listen to this, colleagues--VA has granted only 5 percent of the claims. The test veterans have to meet is simply much harder than OMB seems to think. There are a number of other unknowns with the administration's methodology. On the percentage of veterans who currently smoke or are heavy smokers, VA experts made what we consider to be a questionable assumption that veterans who smoke more than 100 cigarettes in their lifetime would have the same disease rates as smokers; the percentage of veterans who may file claims for tobacco-related illnesses that are already receiving compensation for those or other conditions; the rate at which the VA can adjudicate these claims. There are lots of assumptions I would question. Let me get right down to the very nitty-gritty of what this amendment is about. My first choice would be to keep the old rules for deciding disability claims--the ones we had before the TEA 21 highway bill. I don't see why Congress should go out of its way to deny disability benefits to veterans. Don't we have better places to look for spending offsets? Back in World War II, these veterans had free and discounted cigarettes included in their rations, and those packs didn't even have warning labels on them. Soldiers were encouraged to smoke to relieve the stress of military strain. And now some of them are suffering the consequences and they are not getting the compensation. That is what is so outrageous about what we have done, and that is what this amendment intends to correct. The second choice--even if Congress does decide to deny these benefits, I find it hard to understand why this money should be taken away from veterans' programs. I believe, at the very least, it should stay with veterans. It is quite one thing to argue, look, though they deserve this compensation, they have to meet strict criteria to get this compensation. We handed cigarettes out like candy and we know veterans became addicted. They should have been entitled to this benefit. It is quite one thing to take away the compensation benefit, which we have done; it is adding insult to injury to not at least have to put that money, scored by OMB and CBO, back into veterans' health care. That is why I come to the floor and I speak with so much indignation about this. That is why Senator Murray from Washington and Senator McCain from Arizona join me in this amendment. If this offset proposal had been considered in the Veterans' Affairs Committee, as it should have been, I doubt that it would have seen the light of day. But if it had passed the committee, those savings would have remained within the committee's jurisdiction. Those savings would have been plowed right back into veterans' programs. That would have been my second choice. So let me be clear again. The first choice: This compensation should have gone to the veterans. This is an injustice; it really is. Secondly, if we weren't going to do that, it should have stayed in the Veterans' Committee. I can tell you that committee would have at least made sure that this money would have been invested in veterans' health care. Only because it is late at night and because there are other colleagues who have amendments--trust me, I think I can talk, without notes, for 2 hours about the holes right now--gaping holes--in veterans' health care, in the financing and delivery of veterans' health care. After all, we are running out of excuses for underfunding veterans' programs. Remember, for many years, Congress used deficit reduction as an excuse. That was the justification for flat-lining the VA budget in the 1997 budget deal. By the way, the flat-line budget is not going to work. It doesn't take into account inflation. It doesn't take into account all of the veterans now living to be 85--an ever-aging veterans population. It won't work. But now the deficit is gone and we can no longer claim that there are no offsets available. The first time an offset comes down the pike, and it is a real whopper, Congress immediately whisks it away to pay for other programs-- programs that obviously have a much higher priority. I can't imagine how Congress can make its budget priorities any clearer. I have to tell you that if our priority is to live up to our commitment to veterans, then I believe we should have 100 votes for this amendment. The VA-HUD appropriations bill does include a significant $222 million increase over the President's request in funding for veterans' health care. I thank my colleagues, the Senators from Missouri and Maryland, for their very fine leadership. Let me bring something to my colleagues' attention. As the Veterans Affairs' Committee wrote in its letter to Appropriations, an increase of over $500 million is necessary to maintain the current level of services. My argument is that not only did we not give the veterans the compensation they would have gotten if we hadn't raided--really, what was their funding for their addiction, for their illness--but to add insult to injury, if we didn't do that, we should have at least put it into veterans' health care because we are not properly funding health care for veterans in this country. Before the budget deal, we just simply did not take into account the inflation that is taking place. The budget is not enough. Finally, let me be clear about what this amendment will do and what it will not do. First of all, this amendment does not cancel or deny any transportation projects. Those projects are already in law. This amendment would not affect them in any way. Second, this amendment that I have introduced with Senator Murray and Senator McCain would not trigger a budget sequester. It includes the same protection against sequestration, the same budget gimmickry that was included in the TEA 21 bill. It may be argued that this amendment would be using the surplus to pay for veterans' benefits. I would argue that the highway bill was spending the surplus because it was using an unreasonably high estimate for this offset. That is going to happen whether or not we repeal that offset. But to the extent we do restore previous law on veterans' disability benefits and waive the Budget Act--I am asking colleagues to waive the Budget Act--the cost is not going to be anywhere near $17 billion. I want to be clear about that. In the summer of 1997, the VA said it wouldn't be able to process more than a couple billion dollars worth of claims over 5 years. Mr. President, and colleagues, let me just summarize. I have decided to really try to be brief. There is a lot that I feel strongly about, and there is a lot that I would like to talk about. But I think my colleagues from Missouri and Maryland were gracious enough to let me come to the floor with this amendment and get to work on it. I summarize this way. This amendment would restore benefits to veterans with smoking-related diseases. This amendment that I introduce on behalf of myself and Senator Murray and Senator McCain does what we should have done--to have provided this funding for compensation to go to veterans for smoking-related disease. We did not do that through a whole lot of gimmickry and a whole lot of zigs and zags. We took that funding away from veterans. My second choice would have been to have at least invested this funding into veterans' health care. We have got so many needs for those that are 85, and elderly veterans; so many needs for veterans that are walking around and struggling with PTSD; so many needs for more drop-in centers; so many needs to fill the gaps in our current VA health care system. And we didn't put the money into the veterans' health care. Then, finally, I want to make real clear what this will do and what it will not do. I don't want anybody to be able to say that we are now going to cancel any transportation projects. That is not what this amendment does. I don't want anybody to say it is going to trigger a budget sequester. It has the same protection that we had against sequestration. I don't want anybody to argue that we will waive a budget order, that we will have to go into a surplus. We have a huge surplus. We put the surplus into the highways. Now, I am just saying take it back, even though you don't take it from the highways, because you have already funded that. You should at least take that money that belongs to the veterans that should have gone to them directly for compensation. I don't think we can avoid an up-or-down vote on this any longer. We should have a clear up-or-down vote. We should all be accountable. I feel very strongly about this, and I hope that I will receive very strong support for this amendment. Several Senators addressed the Chair.

Mr. WELLSTONE. Mr. President, I ask unanimous consent reading of the amendment be dispensed with.

Mr. WELLSTONE. This is the amendment that will restore benefits to veterans for smoking-related diseases. Mr. President, this amendment which I now send to the desk is on behalf of myself, Senator Murray and Senator McCain.

Mr. WELLSTONE. Mr. President, I will get started on this amendment.

Mr. WELLSTONE. Mr. President, if there is more comment on this amendment, I will wait. I ask my colleague from Alaska whether he intends to move on to another amendment, or comment on this amendment.

Mr. WELLSTONE. Mr. President, I understand that in conference the issue of FHA property disposition reform may be raised. Without going into the details of any possible changes to the program, I would like to receive some indication from the bill managers as to how the funds that would be saved by such reforms might be used. I hope such savings would be used for housing assistance. It seems to me that this would be a unique opportunity to further address the 5.3 million American households with worst case housing needs. I know that my colleagues on the VA/HUD appropriations subcommittee worked hard to put as much money into housing as possible given the constraints that they were working under. I know housing is a priority for them. So I would simply ask my colleague if he agrees with the logic of putting HUD program reform savings into housing assistance.

Mr. WELLSTONE. Might I make a request for 1 second? I ask unanimous consent that I be able to follow the Nickles amendment, so I can go back to the office and come back.

Mr. WELLSTONE

Mr. WELLSTONE. Mr. President, my colleagues--I have been waiting for awhile--have asked me whether they could have a minute--a minute, I say to my colleague from Arkansas--to speak. But I understand their passion and know how strongly they feel about these issues. My very good friend from New Mexico has also asked for some time, and I would be pleased to defer to him. I ask unanimous consent that I follow the Senator from New Mexico, and that then I will be free to speak and take more than a minute.

Mr. WELLSTONE. Mr. President, my colleague from Kansas asked whether he might speak, and then I know the Chair wants to speak briefly. I will be pleased to defer to my colleague. I ask unanimous consent that I then be allowed to follow those two Senators.

Mr. WELLSTONE. Mr. President, I ask unanimous consent that Christy May Carlson, an intern in my office, be allowed on the floor during today's debate on the legislation.

Mr. WELLSTONE

Mr. WELLSTONE. Mr. President, I wanted to briefly speak to this amendment, as well, and I thank my colleagues for their indulgence. I don't know ultimately how we will dispense with this. I understand there has been some change in the language from the original amendment that was brought to the floor. By the way, I would like to associate myself with the remarks of the Senator from Arkansas, Senator Hutchinson. In addition, I would like to say to my colleague, Senator Grassley from Iowa, a colleague for whom I have a tremendous amount of respect, that there are some provisions in this amendment I just don't quite understand. The idea of most farmers right now being able to put money in IRAs just doesn't make a lot of sense. If I go to northwest Minnesota this weekend and I say, ``We have a sense-of-the-Senate resolution that talks about your being able to put all the extra money you are making into IRAs, tax free,'' they are going to look at me like I have been living on the Moon. What good does it do for farmers who are going under to have a provision talking about IRAs--that you can take all the extra money you have and put it into savings? For the last several days we have been talking about a farm crisis. We have been talking about 20 percent of the farmers in Northwestern Minnesota in economic trouble. We have been talking about people not being able to cash-flow. Why are we talking about IRAs, tax-free savings, for people who not only can't save but can't cash-flow on the record low prices they are getting? Second, we can talk about trade and fast track and all the rest. Our farmers can compete with anybody, anywhere, anytime, if we have fair trade. But in all due respect--and my colleague from North Dakota talked about this the other day--if I was to take a look at the United States-Canadian Free Trade Agreement, which was the precursor to NAFTA, which then superseded that agreement, and asked the wheat farmers in northwest Minnesota, ``How are you doing on the basis of that trade agreement?'' they would say, ``What are you all talking about? You cut an agreement that did great for intellectual property rights, that did well for all the big grain companies, but left us completely out in the cold. Why in the world would you want to extend or expand that trade agreement that never gave us a fair shake or level playing field in the first place?'' Maybe the wording of this amendment has changed, and maybe everybody can agree, but I only saw the original version; I was down here on the floor listening to my colleague from Iowa. I have to say, maybe we hear what we want to hear. Maybe we talk to different kinds of farmers. Maybe there is something else that explains this. But I have been to a fair number of farm gatherings, now called ``farm crisis meetings.'' When you walk into a school in northwest Minnesota, there is a sign outside ``Farm Crisis Meeting.'' When people start talking about what is happening to them, there are two things that I hear: No. 1, we need some direct assistance; this is a disaster. In northwest Minnesota, that means scab disease, wet weather, and low prices. My colleague, Senator Conrad, I think, will have an amendment on the floor talking about indemnity payments. People are saying, ``In the here and now, please get that payment to us.'' It is like in Ada, Minnesota, I say to my colleague from North Dakota. We got hit with the flooding. It destroyed the high school. FEMA, the Federal Emergency Management Assistance, came in with direct grant money that enabled the communities to rebuild their school. That is what we are talking about--some direct assistance to family farmers so that they can rebuild their lives, so they at least have a chance to go on and don't go under. The other thing that I hear farmers talking about over and over and over again is price. In all due respect, this Freedom to Farm legislation which my colleague, Senator Grassley from Iowa, talks about, and I have heard other colleagues talk about staying the course, is a disaster. When prices were up, yes, people were for it--some were--when there were the transition payments. But we cut out the safety net; we took away from farmers their ability to have any leverage and get a fair price in the marketplace. Farmers can't cash- flow on less than $2 a bushel of corn and $2.58 a bushel of wheat. It is that simple. I think I am pretty good at arithmetic. If on every bushel of corn and every bushel of wheat you continue to lose a lot of money because it costs you far more to produce it than the price you get, then just producing more bushels of corn and more bushels of wheat will put you further into debt. The way it works, colleagues, vis-a-vis trade, is we should go with the trade, go with the exports. But if you don't get the loan rate up, the family farmers have no leverage with the grain companies, and the grain companies make the money on the trade; it is not the family farmers. The loan rate is what is key to the price. We are talking about price. It is like when I was teaching in Northfield, MN, at Carleton College, I remember one evening bringing in a bunch of farmers from the community so they could teach the class. Many of the students, even though Rice County, where they lived, was very much an agricultural county, hadn't had a chance to learn that much about agriculture. I remember one farmer coming in and he came up to the blackboard and he wrote down ``price,'' and then underneath it ``price,'' and then underneath it ``price.'' I just want to say one more time, since we had this discussion on the floor here today, that if we don't do something about the loan rate and get it up to give the farmers a price, they can't cash-flow. The exports will be great for the grain companies, but the farmers aren't going to get the fair price. Do you think that farmers, when they are dealing with the big grain companies, are dealing with Adam Smith's invisible hand, some small businesses? They are dealing with a few large companies that dominate. They are facing an oligopoly. They need to have some leverage in the marketplace, so we need to get the loan rate up. So, with all due respect, I am in profound disagreement about staying the course on Freedom to Farm. It has become freedom to fail. It is great for the grain companies and terrible for family farmers. If you don't get the price up, all the speeches and rhetoric in the world will not help, and the surest, quickest, most efficient, fairest way to get the price is to at least take the cap off of the loan rate. We lost that amendment yesterday. We are going to come back to it because, in the fall, this situation could be even worse. In the short run, to lead up to my colleague from North Dakota speaking, who is about to lay down an amendment, I fully support this effort by my colleague from North Dakota, which at least will get some indemnity payments out there and give farmers some assistance so our families can stay on the land and they can have a chance at least to dream about a better tomorrow. I yield the floor.

Mr. WELLSTONE

Mr. WELLSTONE. Mr. President, for more than 5 weeks, the Nation's largest industrial corporation has been locked in a labor dispute with workers in two of its Flint, MI, plants. I do not believe that we have had any discussion on the floor of the Senate about this. I want to speak about it. The company and the workers are fighting over local issues--health and safety, speeding up the production lines, and sending work to outside suppliers--but these local disputes also highlight a broader national concern that affects millions of working Americans: how U.S. corporations invest, how they compete, and where they invest. GM's hard-line stance and labor-war tactics endanger the livelihoods of tens of thousands of workers in the automotive industry and in the industries that rely on auto production for their business. Ironically, these hardball tactics also undermine the very competitiveness that GM says it wants. Competitive firms need good labor relations; and good labor relations begin with a handshake, not a 2 by 4. Monday's Washington Post reported that high-level negotiations to end the strike broke down Sunday ``amid signs the auto maker now may be willing to risk an all-out labor war.'' The company has asked an arbitrator to rule on the legality of the strike. The union has said fine. But GM's vice president in charge of labor relations broke off negotiations, refusing to even participate further in talks to reach an overall solution to the strike. The Post further reported, ``A GM source said some top company officials are pushing for a form of drastic action to `send a clear message to the UAW' * * * Options reportedly under consideration, the source said, range from a legal action challenging the walkout * * *; cutting off health-care benefits to all UAW members idled by the strike; or shutting down the two strike-bound parts plants in Flint, Mich., and contracting out the work. Such a move,'' the Post explained, ``would amount to an all-out war.'' GM has taken the first step, filing a lawsuit against the union. GM would apparently rather sue than negotiate. They would rather fight than talk. The Post has reported that, ``Company sources said the lawsuit is probably the first step in an escalating war between the company and the union.'' This is no way for the Nation's largest industrial organization to treat its workers and their representatives. The duly recognized representatives of GM workers, the United Auto Workers, had sought to negotiate a global settlement. GM senior representative should come back to the table. Yes, GM has every right to seek to improve productivity and profits. But as yesterday's New York Times reported, ``G.M.'s biggest productivity problem lies in its auto parts factories, which were * * * starved of investment during the 1980's * * * and have antiquated machinery as a result.'' GM entered into agreements with the United Auto Workers to invest more in its American operations but has fallen short of making new demands on workers before it would comply with what it had already promised. What is really at stake here are American jobs--good jobs, with good benefits. The workers at GM's Flint parts plants are fighting to preserve those American jobs. Over the next 2 years, in this act alone GM threatens to transfer about 11,000 of these jobs to subcontractors or out of the country altogether. GM's workers are justifiably concerned with what the New York Times calls ``G.M.'s steady push to build factories overseas while slowing investment in its low-profit American operations.'' GM should stop fighting its workers and get back to investing in the creation of those good jobs which bring good benefits right here in the United States. Strikes are hard on everyone--on the company, on the economy, and hardest of all on the men and women on the picket line. The best way for GM, or any corporation, to avoid picket lines is to address the underlying problems that lead to strikes, not to challenge the right of workers to strike. The free world looked upon strikes in the 1930s with hope, because, as Franklin Roosevelt said in 1939, ``Only in free lands have free labor unions survived.'' As long as there have been unions, we have known that the right to strike and liberty go hand in hand. That is why, in 1860, Abraham Lincoln told striking New Haven shoe factory workers, ``Thank God we have a system of labor where there can be a strike.'' I have confidence in the auto workers of Flint, MI. Although I stand here today on the floor of the U.S. Senate, in my heart I stand with the auto workers of Flint, MI. They know the history of work, the auto workers of Flint, MI. It was the auto workers of Flint, MI, who, on December 30, 1936, called another strike against the same company, General Motors. The goal of that strike was simple, too. All the strikers wanted was for GM to recognize the union. For over 6 weeks, the auto workers of Flint, MI, stopped production in the famous Sit-Down Strike of 1937. They slept on unfinished car seats and ate what food their families could slip through the factory windows. The auto workers of Flint, MI, faced tear gas, heat shutoffs, and company security guards. Led by their new 29-year-old president of Local 174, a man named Walter Reuther, and the great union leader, John L. Lewis, the auto workers of Flint, MI, prevailed. Because the auto workers of Flint, MI, were willing to strike, the auto industry was forever challenged. Because the auto workers of Flint, MI, were willing to strike, over the years the automotive industry became a source of good jobs with good benefits and the Nation prospered. GM was the most successful auto maker in the world when it paid the highest wages, not the lowest. Americans want to be the beneficiaries of a more competitive firm, not their victims. And that is exactly why the auto workers of Flint, MI, walk the picket lines today.

Mr. WELLSTONE

Mr. WELLSTONE. Thank you, Mr. President, and I thank my colleagues for their courtesy. I will definitely speak to the amendment in a moment.

Mr. WELLSTONE. I ask unanimous consent that I be able to speak briefly as if in morning business, and then go right to this amendment.

Mr. WELLSTONE

Mr. WELLSTONE. Mr. President, in reply to my colleague from North Dakota, I also want to ask my colleague to focus his attention for a moment on the original United States-Canadian trade agreement superseded by NAFTA and ask him how well our wheat growers have fared by that agreement. Those who are talking fast track without a fair trade agreement for farmers--I want to raise a question about that in a moment. But let me say to my colleague, the thing I find maddening right now--and I hope I am wrong--is that, yes, obviously, if the farmers don't have the leverage and they can't get the price, it is great for the grain companies; they get to buy from the farmers at record low prices. The problem is that I think a lot of colleagues are not willing to revisit this question. In other words, we voted for what was called Freedom to Farm. We set the loan rate at such a low level, the prices have plummeted, and what I worry about is that somehow this amendment becomes a referendum on Freedom to Farm. It is not. For those colleagues, Democrats and Republicans alike, who supported the Freedom to Farm bill--fine; we can continue to agree or disagree. But for right now, given the fact that prices are way down, all we are saying in this amendment is, for 1 year, as an emergency measure, take the cap off so we can get the loan rate up, so we can get prices up. Combine that with indemnity payments and a couple of other measures, but in particular these two measures, and we can help get farm income up and enable people to stay on the land and not be driven off their land. That is what it is all about. In other words, time is not neutral. We are confronted with the fierce urgency of now. I would say to colleagues, I am willing to debate trade policy. Personally, I don't think the United States-Canadian agreement has worked well at all for our wheat farmers. Nor has NAFTA--it has been a terrible agreement, a terrible agreement. You can ask the farmers about that. But above and beyond any debate about trade policy today, above and beyond the overall debate about the Freedom to Farm bill, let me just simply make this appeal to everybody who is out here. For right now, can't we at least reach some common agreement on some emergency measures that we can take? The fact of the matter is, you can export more bushels of corn and more bushels of wheat, but if the price is so low it is costing the farmers more to produce that bushel of corn than the farmer is getting for that bushel of corn or bushel of wheat, they go further and further in debt. At least let's get the floor up. At least let's get the price up. At least let's get the disaster payments out there. If we do that, then we will have taken some action that will be concrete, will be real, and can make a difference. There is a lot more I would like to say about what I call the ``freedom to fail'' bill. I am a critic of it. I think it is a terrible piece of legislation. I said it then; I will say it now. It was great for the grain companies; it was terrible for the family farmers. It looked great when prices were up and transition payments were out there, but what goes up goes down, and now we have no way of stabilizing the situation for family farmers in this country. This amendment goes a significant way toward stabilizing the situation, getting the prices up, enabling our farmers to get back on their feet to be able to cash-flow. Combine it with the disaster relief payments and we will have done something good. I hope we will have support for this amendment. I yield the floor.

Mr. WELLSTONE. I will be pleased to yield for a question.

Mr. WELLSTONE. This amendment will lift the cap on the farmer's marketing loan rate and extend the loan repayment period from 9 months to 15 months. That sounds very impersonal, to lift the cap on the loan rate and extend the repayment period, but I say to my colleagues--and I know my colleague from North Dakota, Senator Dorgan, will speak about this as well--this proposal goes to the heart of what we must do this week if we are to respond to the economic pain, and for that matter, the personal pain, of many farm families in our country. I will be going to another farm crisis meeting in Granite Falls, MN, in western Minnesota, this Saturday. I am hoping and praying I can come back with a report that we have been able to take some action that will give farmers some hope--it is really a desperate situation. Wally Sparby, who is the director of the Farm Service Agency in Minnesota, is predicting that on the current course--and we have to change the course--we could see about 20 percent of the farmers in serious trouble. That is a lot of farmers in the State of Minnesota. Agriculture is very important to my State. From 1996 to 1997, we saw about a 38-percent drop in farm income. When I talk to farmers at gatherings, or when I am in cafes in Minnesota, I think the one thing they talk about more than anything else--and I imagine you hear the same thing in Arkansas--is price. That is really the key thing--a fair price in the marketplace. That is what farmers are asking for. They are saying, give us a fair shake. Now, unfortunately, that is not what is happening, and I believe that one of the mistakes that was made in the 1996 Freedom to Farm Act, which I called then the ``Freedom to Fail Act''--and I wish I could be proven wrong, but unfortunately I think the evidence which is staring us in the face proves me right--while we gave farmers the flexibility in planting, which I am all for, the problem is that the loan rate which sets the floor price is set at such a low level. Right now, the 1996 farm bill caps the price at an extremely low level artificially. The rate is $1.89 per bushel of corn and $2.58 for wheat. No one can cash-flow or stay in business at these prices. Since market prices are now, in fact, nearly down to those levels for corn and for wheat, that is exactly why we have this crisis which we are calling an emergency. So far in Minnesota this year the average price for corn has been under $2 a bushel and it has been about $3.25 for wheat. In the wheat-producing parts of Minnesota, those low prices have combined with the bad weather and scab disease to create truly dire economic conditions. What I want to say to colleagues, and what I want to say to people in our country is that right now $2 a bushel for corn and $3.25 for a bushel of wheat is way below the cost of production. Farmers cannot make it--nobody can make it--at these prices, unless you are a huge conglomerate that can weather low prices while family-sized farms get driven out, and then you can buy up that land. But for the Midwest and for other parts of the country as well--this is not just a regional issue--for all of us who value the family farm structure of agriculture where the people who farm the land live there and live in the community, this is a crisis all to be spelled out in capital letters. What our farm policy used to be was that when the prices were good, you let the market pay the farmers. When the market wasn't so good, you would help stabilize income by holding the market price up. Freedom to Farm changed that. In other words, the loan rates gave the farmers some leverage vis-a-vis the huge grain companies because, if the prices were down, farmers just held on because they knew at least they would get this loan at this price. But, of course, the grain companies needed the grain so they would have to pay more. That set the price for the farmers. Now, what we have done with this cap is we have set the loan rate at such a low level, the prices are plummeting, people cannot make it at these prices and therefore they are going under. This is a matter of elementary justice. This amendment that I speak in behalf of lifts the cap on the loan rate. That means that the loan rate would rise to $2.25 for corn and $3.22 for wheat. This is still too low a price. I see my colleague from North Dakota in the Chamber. If we at least do that, combined with extending the period that the farmers can hold on for another 6 months, extend the loan rate period, then I think we can begin to lift the market prices. Now, I would like to raise the loan rate further, and Senator Dorgan and I may be back in the Chamber to talk about this later or to take action on this later. I think it should be something like at least $3 for corn and $4 for wheat, at least for a targeted level of production, which would be a family farm level of production. But I want to make it crystal clear that at the very minimum what we have to do this week--this is very reasonable; this is a 1-year emergency--is take the cap off the loan rate to begin to get the prices going up, extending the period for the loan rate, making sure that there is some indemnity payment, some disaster relief for farmers that have been hit by this disaster of low prices, bad weather, scab disease. This is all targeted, all focused on a disaster in rural America, in agricultural America, and this for us, for those of us who come from the farm States, is a matter of huge importance. There is no more important amendment that we could be speaking for than this amendment. Mr. President, I just want to speak to one argument that has been made on the floor, and that is the argument that trade is the answer. I am for trade. In fact, I wish we had fairer trade for agriculture. But I find it surprising that some so-called advocates for farmers are in a big hurry to grant fast track negotiating authority. My question is, For what? If we export more bushels of corn, or more bushels of wheat, at a loss, how does that do the farmer any good? I say to my colleague from North Dakota, it is sort of confusing to me. If, in fact, the prices are so low that the farmers in our States are losing on every bushel of corn or every bushel of wheat they produce, how does it help them to produce more bushels of corn or more bushels of wheat? It makes no sense at all.

Mr. WELLSTONE. I thank the Chair. Mr. President, I speak in favor of this amendment introduced by Senator Harkin and ask unanimous consent that if I am not already, I be included as an original cosponsor.

Mr. WELLSTONE. I thank the Chair. Amendment No. 3146 Mr. President, I ask unanimous consent that a letter from Wally Sparby, who is the State executive director of the Minnesota Farm Service Agency be printed in the Record.

Mr. WELLSTONE. Mr. President, I also ask unanimous consent that Dan Weiner, who is an intern in my office, be allowed to be in the Chamber during the debate on this bill.

Mr. WELLSTONE

Mr. WELLSTONE. I thank the Chair.

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