Peter Welch

Mr. WELCH of Vermont

Mr. WELCH of Vermont. Mr. Chairman, I thank the gentlewoman from California. We have two issues here. The first is whether this body, the Congress of the United States, is going to exercise its responsibility or abnegate its responsibility to the President of the United States. We have a bit of a factual dispute about the nature of this agreement. The chairman of our committee, a distinguished veteran, has made it clear that this can be in the nature of a treaty. That is what it applies to. It could implicate us in the second issue, and that is where the United States should be providing security when essentially you have a civil war. The agreements and Status of Force Agreements that Mr. Hunter has described have been with countries that have stability. This is a country that has Shia fighting Shia, Shia fighting Sunni, the Kurds sitting on the side, waiting. The United States should not be providing security guarantees without the vote of Congress in that circumstance.

Mr. WELCH of Vermont. I want to thank Chairman Skelton for his leadership, Chairman Waxman, Mr. Hunter and Mr. Davis. I have been listening to Mr. Davis, and he makes a good point; you have to, when you're spending $1 trillion on a war--and we're pushing that--have a good acquisition team. But that really begs the question, we have to have oversight. And there has been documented an astonishing amount of waste, fraud and absolute rip-off in this expenditure of close to $1 trillion. And that does require some simple reporting requirements. Mr. Murphy's amendment, where private companies that go into contracts from $700,000, and then when the war starts over the next 4 years to $1 billion, that 10 percent cut for the owner of that company, or the owners, the public has a right to know. Sunlight is going to put some limits on how much profit is reasonable when our soldiers are working so hard for so little. Secondly, when we have no-bid contracts--and these have proliferated so that they are about over $1 trillion--and the companies that have those contracts become aware of fraud, why is it not plain common sense that that company would have the obligation immediately to report to the American government their knowledge of fraud so that we can save taxpayer dollars, particularly when these involve national security contracts, oftentimes with things that are going to protect our troops? We owe them no less and we owe our taxpayers no less. So I thank the gentlemen for the work that they've done to restore fiscal responsibility.

Mr. WELCH of Vermont

Mr. WELCH of Vermont. I thank the gentleman from New York. This bill has many good features, and I want to speak about two. One is energy and two is children. If we are going to take on the challenge of energy independence, then we have to start providing incentives, as we do in this bill, for wind, for solar, for biomass, for alternative energy and efficiencies. It is a confident Nation that takes on that challenge. It is a submissive Nation where the leader of our country goes hat in hand to a country that is not our friend and asks him to solve our problem by pumping more oil. This moves us in a confident direction of independence, self- sufficiency, and self-reliance. The second is children. It is troubling I think to many of us in this country, and many of us in this body, that the gap between the wealthy and the poor has never been wider. The top five hedge fund managers last year earned $12.6 billion. The 9 million lowest income families, that was their equal income, $12.5 billion. This bill finally increases the earned income tax credit for low- income families, bringing down the floor to $8,500, and 15 percent above that is going to be eligible. Do you know what that is going to mean just in the State of Vermont? 21,000 kids are going to get help. 21,000 kids. It also means 77 low-income kids from military families are going to get some assistance. This is money in their pocket where they too can be self-reliant.

Mr. WELCH of Vermont

Mr. WELCH of Vermont. Mr. Speaker, I thank Chairman Dingell for his leadership and commitment to getting gas prices under control. Mr. Speaker, I would like to submit this letter from Congressman Ron Kind for the Congressional Record. Mr. Kind has been a leader on this issue starting in January when he sent this letter to the President urging him to take action in suspending shipments to the SPR. Mr. Speaker, in the face of skyrocketing fuel costs and growing economic concerns, Congress must take action. Today we take the small but important step of temporarily suspending the fill of the Strategic Petroleum Reserve. Taking this action sends a strong message to the market that will lower fuel prices and provide immediate relief to consumers. With the price of gas today at nearly $4 a gallon and crude oil trading at a record high of $126 a barrel, we cannot continue the out- dated policy of topping off a full SPR. Since 2002, the price of oil has risen a staggering $100 a barrel, and prices at the pump have more than tripled. We must stop taking 70,000 barrels of oil off the market every day while hard working Americans are struggling to till their gas tanks. By continuing to top off our oil reserve, consumers are paying not once, but twice. Taxpayer dollars are being used to pay record high prices for SPR oil, while the act of buying that oil is actually driving gas prices higher. The reserve is currently 97 percent full and maintains a stockpile of over 700 million barrels of oil. By taking this action today, we can offer short term economic relief to the market and to all consumers. This is a short term solution, and by no means a replacement for the long term energy policy we need to end our dangerous and costly addiction to oil. Last year this Congress made real progress by increasing CAFE standards for the first time in 2 decades by committing to combat oil and market manipulation, promoting the use of more affordable American biofuels, and making large investments in renewable energy development. The U.S. consumes nearly 20 million barrels of oil a day. Prices are high in part because supply has not kept up with demand. The Department of Energy recently reported that suspension of shipments to the SPR could reduce prices by about $2 a barrel of oil and 5 cents per gallon of gasoline. Other experts have estimated that the suspension could diminish speculation in the market, and lower the price by anywhere from 5 to 25 cents a gallon. This action would provide real and immediate benefits. Twenty-five cents would add $300,000 to the bottom line of a local trucking company in my district. A rural school district in E. Montpelier, Vermont would save $30,000 in taxpayer financed busing costs. Families, workers, seniors and students need this relief. Over the last 8 months, the Bush administration has purchased over 10 million barrels of oil to top off the SPR. In that same period of time the price of oil went from $40 a barrel to over $120. In 2006, facing record high oil prices President Bush said ``. . . by deferring deposits until the fall, we'll leave a little more oil on the market. Every little bit helps.'' Every little bit does help, and I urge my colleagues on both sides of the aisle to take this opportunity to provide them immediate relief. Congress of the United States, House of Representatives, Washington, DC, January 22, 2008. Hon. George W. Bush, The White House, Washington, DC. Dear Mr. President: I write to urge the U.S. Department of Energy to suspend oil shipments to the Strategic Petroleum Reserve (SPR) to allow more oil to remain on the market and available to consumers. This action is necessary to address record prices and stimulate a precarious economy. While the escalating cost of crude oil has made headlines for the past several years, never before have we seen as dire a situation for consumers as the one we are experiencing now. Even the price spikes following Hurricane Katrina did not come close to the $100 per barrel oil we saw last month, yet your Administration wisely responded to that crisis by temporarily suspending purchases for the SPR. That action was successful in providing the type of immediate, targeted relief we need now. The writing is on the wall: our country is clearly in danger of recession. Unemployment is up, retail sales are slowing, housing prices continue to slide, and consumers and lenders alike continue to suffer the fallout from the sub- prime mortgage crisis. Average families are feeling the effects more painfully than ever as they experience the worst inflation in 17 years, largely because of escalating food and fuel prices. Suspending the 12.3 million barrels of oil scheduled to be delivered to the SPR over the next six months is a simple step your Administration can take immediately to lower gas prices, put money directly into the wallets of Americans, and save taxpayer dollars. Congressional investigations and independent experts have found that purchasing oil for the SPR drives up gas prices, and costs taxpayers billions. This is money that working men and women cannot put into other parts of the economy, harming American families and businesses alike. While I recognize this action should not be taken as a means of reducing prices in the long run, it can have temporary benefits that could go a long way to helping American families who are being squeezed, and to stimulate the economy. I urge you to take this important step. Sincerely, Ron Kind, Member of Congress.

Mr. WELCH of Vermont

Mr. WELCH of Vermont. Mr. Speaker, I yield myself such time as I may consume. First, I want to thank Chairman Dingell for his leadership on energy issues and for assisting in bringing this legislation to the floor for consideration by the full House. I want to address a couple of observations by my friend from Texas. Number one, the revenues that would be generated from drilling on Federal lands would go into the Treasury. And there are many uses and debates that can be had about whether that money ultimately should go into alternative energy, whether it should go into LIHEAP, and those will all be had in due course as part of other legislation. The question that we have before us today is whether or not taking a small step that in the past has been taken by this President Bush, by his father, by President Clinton, that when it has been taken has proven to actually have a direct and immediate impact on lowering the price of gas at the pump from 5 cents to 25 cents a gallon. All of us know, we're going home every weekend and we're hearing from our constituents. It doesn't matter what district we're in, it doesn't matter what part of the country we're from, folks are really feeling burdened by these ever-escalating home energy heating bills and the cost of filling up their pick-up truck and their car. And basically the question for us is whether or not, even as we have to proceed with long-term debates about our future energy policy, this Congress is going to be willing to take a short-term step that has the potential to bring down energy prices. You know, we could go out and clap, but I actually think this would be more effective. History tells us that, in fact, when we've used this Strategic Petroleum Reserve as an asset belonging to the American people and suspended purchases--and incidentally, this Strategic Petroleum Reserve is nearly full, we're talking about topping it off, it's very expensive to do so now with $126 per barrel oil--that when we've done it in the past, it has actually reduced that pump price. And just two examples of what it would mean in my small State of Vermont. I talked to a trucker from Barre, Vermont; they've got a company and drive a lot. It would put $300,000 on his bottom line if the price of gas went down 25 cents. A school district in a rural area, it would be $30,000 off their bottom line if we could get the price down 25 cents. No one here is suggesting that this is an answer to our energy situation. What we are suggesting--and, really, recommendations on a bipartisan basis--is that the tool that's within our reach we should use and do all we can on a short-term basis even as we debate long-term energy policies. Mr. Speaker, I reserve the balance of my time.

Mr. WELCH of Vermont. A point of inquiry. The ruling of the Chair is that that proposed amendment was not in order?

Mr. WELCH of Vermont. I am not making a request for unanimous consent.

Mr. WELCH of Vermont. Mr. Speaker, I reserve the balance of my time.

Mr. WELCH of Vermont. Mr. Speaker, just in response, as a clarification for my friend from Texas, my understanding of the bill is we will continue to accept and will honor contracts during that 45-day period for royalty in kind. Mr. Speaker, at this time I yield 2 minutes to the gentleman from Massachusetts (Mr. Markey).

Mr. WELCH of Vermont. Mr. Speaker, I yield an additional 1\1/2\ minutes to the gentleman from Massachusetts.

Mr. WELCH of Vermont. Mr. Speaker, I yield the gentleman another 15 seconds.

Mr. WELCH of Vermont. Mr. Speaker, on that I demand the yeas and nays.

Mr. WELCH of Vermont. Mr. Speaker, I want to answer a few questions that were raised by my friend from Texas. First of all, the question is how, when it's such a small amount of oil, 70,000 barrels a day, can suspending purchases have an impact on the price? There are two things, number one, history has shown that when the Federal Government, on behalf of the consumers of this country and the small businesses, have used this Strategic Petroleum Reserve to help alleviate market pressures. It's worked, and the previous speakers have recited how it happened with this President Bush, the prior President Bush and President Clinton. We have history as a guide that says taking this action does work. Second, the reason it works is that one of the problems we have in the oil market is speculation. There was legislation passed in 2002 by Congress that included a loophole that allowed the deregulation of the energy futures trading market, and there is enormous evidence, that that has allowed hedge funds and arbitrageurs and speculators to impose a premium in the cost of each barrel of oil and in the cost of a gallon of gas. The fact is, if the Federal Government is showing, particularly on a bipartisan basis, that we are going to use the levers that we have, even in a short-term way, to protect the consumer against the speculator, then that has a chastening impact on speculation and helps bring the price down. Third, the process. My friend from Texas is the distinguished ranking member of that committee, but this issue about the Strategic Petroleum Reserve is well worn. In fact, it's been used before, as I mentioned, so it's not all that complicated. We are doing it only for the period of 2008 in respect to the wishes of the chairman. The Senate has passed the Reid-Dorgan amendment by 97-1, essentially the very same proposal that we are considering today. The bottom line is this, will we take the short-term actions that it's within our reach to take that have a proven capacity to help the consumer? I urge a ``yes'' vote on the bill.

Mr. WELCH of Vermont. Mr. Speaker, how much time do I have?

Mr. WELCH of Vermont. Mr. Speaker, my understanding is that we can't amend the bill at this stage, and that this is a question for the Speaker.

Mr. WELCH of Vermont. Mr. Speaker, not having had an opportunity to review this, only hearing the recitation of it from my friend from Texas, not having any awareness as to whether this has been scored by the CBO, as has the underlying bill, I am not prepared to give unanimous consent to the gentleman's offer and would object at this time.

Mr. WELCH of Vermont. I yield 1 minute to the gentleman from Massachusetts (Mr. Markey).

Mr. WELCH of Vermont. I yield the gentleman 30 additional seconds.

Mr. WELCH of Vermont. Mr. Speaker, I yield to the gentleman from Illinois (Mr. Emanuel) for 2 minutes.

Mr. WELCH of Vermont. I recognize the gentleman from Colorado (Mr. Perlmutter) for 1 minute.

Mr. WELCH

Mr. WELCH. I yield 1 minute to the gentleman from Pennsylvania (Mr. Altmire).

Mr. WELCH of Vermont

Mr. WELCH of Vermont. Mr. Speaker, I yield another 30 seconds to the gentleman from Texas.

Mr. WELCH of Vermont. Mr. Speaker, I yield 2 minutes to the gentleman from Texas (Mr. Lampson).

Mr. WELCH of Vermont

Mr. WELCH of Vermont. Thank you, Mr. Chairman. Mr. Speaker, I rise in strong support of this legislation. The legislation does two things that are good and one thing that is very good in its absence. The two things that are good are one, it addresses very specifically, in a practical way, the housing crisis that has been brought on by the subprime foreclosure debacle. What it does is it shares the opportunity of relief and it shares the pain of getting the relief so that we can end up at the end of the day with several hundred thousand American families still in their homes, lenders having been able to mitigate their loss, homeowners being able to keep a roof over their head, and the American taxpayer not being left on the hook. It does it by recognizing we have to use existing institutions to accomplish that. It does it by acknowledging that it has to be voluntary. A lender will be in this program only when they make the practical business decision that it is a better route than foreclosure. A borrower is going to be able to make that same change and has to be able to demonstrate an ability to pay at the new current appraisal value of that property. And in the process of doing that, it means that we use the guaranty of the taxpayer, but in all likelihood, according to the CBO score, not the money of the taxpayer. So it is a practical solution to a very severe problem that could only have been brought to this House for consideration with the extraordinary cooperation of both sides in the Ways and Means Committee, the Financial Services Committee, and the help of high administration officials who had significant input along the way. And it would be very unfortunate if the procedural debates that we are having about process, made at the leadership level, derail what is a practical approach to solving a very serious problem. What this bill isn't, and I congratulate the Members on both sides as well, it is not a blame game about who caused this. That is for another day.

Mr. WELCH of Vermont

Mr. WELCH of Vermont. I continue to reserve my time.