Under the previous order, the Senate will resume consideration of the motion to proceed to S. 2230, which the clerk will report.
The legislative clerk read as follows:
Motion to proceed to Calendar No. 339 (S. 2230) a bill to reduce the deficit by imposing a minimum effective tax rate for high-income taxpayers.
Under the previous order, the time until 5 p.m. will be equally divided and controlled between the two leaders or their designees, with the Republicans controlling the first 30 minutes, the majority controlling the second 30 minutes, the majority controlling the time from 2 p.m. to 3 p.m., and the time from 3 p.m. to 4 p.m. to be controlled by the Republicans.
The Senator from Wyoming.
Madam President, I ask unanimous consent to engage in colloquy with a number of my colleagues for the next 30 minutes.
Without objection, it is so ordered.
Madam President, I come to the floor today, as I have over the last 2 years since the health care law was passed, with a doctor's second opinion. I do that as someone who has practiced medicine and taken care of families across the country--primarily in Wyoming--for a quarter of a century, listening to them, trying to care for them, and knowing that what the American people want is the care they need, a doctor they want, at a price they can afford.
During the last 2 years since the health care law was passed, the American public has found out that now that it has passed, they get to know what is in it, they don't like what they are seeing. Instead of providing patients with the care they need from the doctor they want and at a cost they can afford, they are seeing time and time again a significant change and the promises the President has made broken.
I am here with my colleagues to talk about some of these concerns. I see the Senator from Arizona, who has heard the promises made. I know that when he goes to townhall meetings and talks to people, they have found out that the costs they were promised would go down have gone up instead. The opportunity of patients to keep the care they want and the doctor they want--they are not able to do that. Is that what the Senator from Arizona has been finding?
Madam President, I thank my colleague for his continued leadership on this issue and his eminent qualifications to address it and help educate the American people about what is at stake.
I think this colloquy we are having has to be considered in the context of the arguments before the U.S. Supreme Court. I think my colleague from South Carolina, Senator Graham, will mention that we should not draw too many conclusions from the questions that are asked by the Justices of the Supreme Court.
One of the things I find when I watch the talk shows--and I ask the Senator from Wyoming this--the first thing they say is that the most important thing about ObamaCare is that parents can keep their children on their health insurance plan until they reach age 26. Well, you know, I think all four of us right now would be glad to put that into law as an amendment in a New York minute. If they want to keep their children home living in the basement until they are 30, that is fine. But for that to be the centerpiece, saying that this is why we have to preserve ObamaCare, is, of course, a bad joke.
What we are arguing about here is the thousands of pages--I guess the Senator from Wyoming knows--is it 100,000 pages of regulations that have been already issued to try to implement this plan?
Also, we have promised to repeal and replace ObamaCare, depending on not only the Supreme Court decision but the will of the people as expressed, perhaps, next November.
Of the areas that I think we have not focused enough attention on, one is the unsavory process that resulted in passage of this legislation--behind closed doors and everybody at Blair House bludgeoning the AMA and the pharmaceuticals and the deals that were cut here.
Another area was a promise made by the President that he would consider--it wasn't committed to, I will admit--medical malpractice reform. And here we are talking about 20 to 30 percent of the health care costs in America which, in the view of some, can be attributed to the unnecessary tests that are being administered and prescribed by physicians and health care providers because of their fear of ending up in court. Yet, in all of this bill, there is not one mention that I know of that has a meaningful approach to medical malpractice reform.
Since the Senator from South Carolina not only is an expert on the Supreme Court, but also he is one of the trial lawyers' Republican favorites, maybe he could address that aspect of medical care as well.
Would the Senator from Wyoming comment on that?
I agree with my colleague from Arizona that there are a number of things that continue to drive up the cost of health care. One of the things I believe should have been included in the health care law--I would think we could actually lower the cost of care, lower unnecessary testing, and part of that--all of the studies show--is doing away with these junk lawsuits that result in significant numbers of additional expensive tests being done. It seems to me that we spend more time trying to protect the doctors than trying to help the patients.
Even in a rural State such as Wyoming--and I see my colleague from South Dakota on the floor--this is a national concern and should have been included in any health care law that was supposed to target lowering the cost. That is what the President promised in the beginning, that families would see their health care premiums go down by $2,500 per year. Instead, the premiums have gone up by about $2,100 year.
My colleague from South Carolina has cosponsored legislation to try to give States the opportunities to opt out of a number of provisions of the health care law because they are onerous as to the costs and what is happening in the States and for people at home. If you look at the President's proposals, I would think that any national health care law ought to look at certain components of things that actually bring down the cost of care. With this one-size-fits-all approach and the demand that everyone buy government-sponsored or government-approved health care insurance, the rates are going up instead.
I turn to my friend from South Carolina and ask him about that, plus the unfunded mandates that are forced on the States with Medicaid, which is a significant part of what is being discussed today in the Supreme Court.
I will be glad to discuss that. I have enjoyed the opportunity to create legislation that would allow States to opt out of Medicaid's expansion under this bill. About 30 percent of the people in South Carolina will be eligible for Medicaid by 2014 when this law is fully implemented. It is the second largest expense in South Carolina. With the matching requirement, we get three Federal dollars for every State dollar you put on the table dealing with Medicaid. That sounds like a good deal until Medicaid explodes in costs and becomes the No. 1 driver of the budget in South Carolina, Wyoming, South Dakota, and Arizona. Under this bill, the problem we have today with Medicaid becomes Medicaid on steroids.
I am confident that there are plenty of Democrats who have Governors who are Democrats who will say: Wait a minute, before you expand Medicaid and put additional burden on my State's budget, see if we can find more creative ways of dealing with it and give people the ability to opt out of that. That would be good policy.
I want to comment about this. One rule of thumb is that any bill passed on Christmas Eve on a party-line vote is probably no good to the country. And that is what happened.
As Senator McCain would say, this was a party-line vote, 60 to 40, on something dealing with one-sixth of the economy.
This was supposed to happen on C SPAN. President Obama said: I am coming and we are going to change the way Washington works.
If I had to offer exhibit A of what is wrong with Washington, it would be the ObamaCare process. Everything that people hate about Washington resulted in this bill being passed. There was absolutely no bipartisanship; there were behind-closed-door negotiations, beating people over the head to get their support; there was buying votes based on special interest deals for their States. That is not exactly what the American people had in mind. Is it any surprise that something that came out of that process is going over like a lead balloon?
One of the problems with health care is getting doctors to take Medicare and Medicaid patients. What did we do with Medicare? We took $500 billion out of a system that is $33 trillion underfunded to help the uninsured. We have an uninsured problem, but we have a Medicare problem that will be an absolute nightmare.
What I wanted to do on malpractice is to tell a doctor: If you will take a Medicare or Medicaid patient, doing the country a service, and you get sued, we will go to arbitration--require arbitration--and let the panel render their judgment. And if you want to go to court, you can.
That is fair. I want people to have their chance to litigate differences on alleged malpractice. I also want doctors to feel there is an incentive to serve Medicare and Medicaid patients.
What was promised in this bill--the remedies to our health care system--none of them have come true. What you see 2 years later are our worst fears being realized at a faster pace.
The President promised: If you like your health care, you will be able to keep it. What is going on in this country is that employers are dropping health care for their employees because it is cheaper to pay the fine. What is happening in this country is that the idea of being able to expand Medicaid without bankrupting the budgets of this country at the State level, when you look at the consequences, is a nightmare in the making.
We were promised this bill would reduce the deficit. Well, to me, health care includes doctors, and in the bill itself we never dealt with the problem that doctors face of having their budgets, their reimbursements cut. That was not even addressed in ObamaCare. That is a couple hundred billion dollar liability. So the idea this thing has been paid for, as promised, no longer exists. It is adding to the deficit. It was projected to be $900 billion in cost; now it is about $1.7 trillion. So the basic promises around what this bill would do for our budget, what it would do for our choices in health care, have not come true.
I am here to say to our Democratic friends, fix this before it is too late. You will find people on our side willing to meet you in the middle when it comes to reforming health care because it needs to be reformed. But the model you have created--centralized health care--that is going to damage State budgets beyond belief, that will drive private sector insurance out of the market, and it is going to have a budget consequence on top of what we already have is not the right model.
I say to my colleagues here today, I will work with you to do two things: Educate the public about what awaits us if we don't change this bill quickly, and work with our Democratic friends to find a better alternative. I think that is what America wants. When 67 percent of the people, 2 years later, feel this is not the way to go, responsible leadership would say let's alter course.
The Supreme Court may strike down the mandate. They may say Medicaid expansion is a violation of the tenth amendment. I hope they do. But I can say one thing with certainty: Because nine judges, five of whom say it is legal to do something, doesn't make it smart to do something. What is smart is to fix health care in a sustainable way. And what is smart is for Republicans and Democrats to work together in a transparent, open fashion. We haven't done anything smart about health care yet, and I hope that changes.
Could I ask my colleagues if they remember the Cornhusker kickback? Another Democratic holdout took credit for $10 billion in new funding for community health centers, an exemption for nonprofit insurance in their States; and Vermont and Massachusetts were given additional Medicaid funding; a $300 million increase for Medicaid in Louisiana, and the list goes on and on. This was the process they went through, culminating, as the Senator from South Carolina mentioned, on Christmas Eve--a process that, obviously, most Americans find unsavory.
It is interesting, and I would ask my two colleagues to comment on the fact that the same people, the same organizations--the AMA, the hospitals, the pharmaceuticals, and others, that all signed up and were bludgeoned into supporting ObamaCare--and by the way, that negotiating that took place, since the President promised there would not be lobbyists in the White House, that they would not play a major role, it was done in Blair House--these same people, these same organizations, have come to our offices asking for relief from ObamaCare. Isn't that fascinating. I mean, time after time, the same members of the same organizations that supported ObamaCare come and say, look, we can't live with this provision, we can't do this, it is impossible for us to comply with that provision. It is a fascinating commentary on trying to do the Lord's work in the city of Satan, is it not, I ask my colleagues?
Well, I would say to my colleague from Arizona, he always has a way with words when it comes to describing the strange meanderings of the process here in Washington, but it is.
Unfortunately, all those groups that had access to the process in the end all got sort of kowtowed into going along with it and now they are all being hit with this huge tax bill, because everybody is getting taxed to pay for this. All of it is being passed on, I might add, to businesses in this country, driving up their costs.
But the one thing everyone here this morning has mentioned is who didn't have a seat at the table, and that is the States. Think about the States and what this means for them. Of course, in the first 3 years, the Federal Government said it was going to pay 100 percent of the new population to be covered under Medicaid. But if you look at what happens after that, the States then are starting to have to share or bear more of the burden and be forced to pay at least another $118 billion, according to one congressional report, through the year 2023, which crowds out priorities such as education, law enforcement, and all the things we expect our States to do.
So the States get all these mandates shoved down their throats, making it more difficult for them to bear the responsibilities they have to the people in their individual States because the Federal Government has not only said they are going to have to pay for this, but they have also become very prescriptive about what they can and cannot do. So States are no longer going to have--and frankly, even in the past, haven't had--a lot of flexibility when it comes to setting eligibility standards and determining who can and cannot be covered by Medicaid in their individual States. They just get the costs shoved down their throats, with very little input into how to implement this program, so much so that Governors all over the country are reacting to this, and that is why we have 26 Governors who are part of the litigation that is going on right now at the Supreme Court to challenge the mandate on Medicaid, which will be heard today by the Court.
But listen to what some of the Governors around the country have said--and these are Democratic Governors. This is the Democratic Governor of Kentucky:
I have no idea how we're going to pay for it.
And, of course, he is referring to these new mandates, regulations.
The former Governor of Tennessee said:
I can't think of a worse time for this bill to be coming. Nobody is going to put their State in bankruptcy or their education system in the tank for it.
The Governor of Montana said:
I'm going to have to double my patient load and run the risk of bankrupting Montana.
Those are Democratic Governors reacting to this new mandate that is being shoved down their throat because of the changes that were made to Medicaid in the health care bill. So I think the States, unfortunately, did not have a seat at the table. If they did, they certainly didn't get their voices heard because they are going to be forced now, and people, individuals in these States, to come up with the billions and billions of additional dollars to pay to finance the new mandates in the legislation.
I want to make one other point, because there has been a lot said here on the floor of the Senate, and by people in general in Congress, about the importance of focusing like a laser on jobs and the economy. Frankly, I think there are some things that actually have been done around here. Last week, we finally passed a jobs bill, a private sector jobs bill, that would create jobs, and hopefully make it easier for our small businesses to access capital to grow their businesses and create jobs. But the health care bill, clearly, is going to have the opposite effect.
Interestingly enough, when it passed, there were lots of statements made at the time about how many jobs it was going to create. In fact, if you go back, the former Speaker of the House said it would create 4 million jobs--400,000 jobs almost immediately. That was former Speaker Nancy Pelosi. Interestingly enough, that contradicts what the Congressional Budget Office Director said. He testified the new law would actually reduce employment over the next decade by 800,000 jobs. And analysts at UBS stated the law is ``arguably the biggest impediment to hiring, particularly hiring of less skilled workers.''
So what we are seeing again is a promise made about creating jobs and the very opposite is what we are going to see.
There was a Gallup poll recently that found 48 percent of small businesses in this country are not hiring because of the potential cost of health insurance under the health care law; 46 percent are not hiring because of concerns over other government regulations. But if you look at the impact this legislation is having on hiring in America today, what we are hearing from the people who hire--the job creators out there and the small businesses--this is a huge impediment to hiring.
The device manufacturer Stryker announced they are shedding 5 percent of their workforce over concerns about the impending 2.3 percent medical device tax which was included in the health care law. There is another employer here, somebody who owns a restaurant chain, who stated bluntly, ``This law will cost my company more than we make.''
Another employer in this country said this: ``The new health care law has wrecked our plans to grow our business and create jobs.''
That is exactly the thing many of us predicted would happen, notwithstanding the assertions made by the proponents of this legislation--that it was going to create jobs. We see the very opposite happening. We see our small businesses pulling back, not hiring, not growing their businesses because of the concerns about the costs and the penalties that would be imposed and the taxes that are included in the health care law.
I know my colleague from Wyoming represents a lot of small businesses, as I do. South Dakota and Wyoming are similar in terms of the size of the States and the way people make their living. We have a lot of small businesses and entrepreneurs, and we look to them to grow the economy in our States. Obviously, it becomes much more difficult when you continue to drive and shove these mandates, these requirements, down the throats of our small businesses, these new taxes they are going to have to bear. And the list of new taxes that are going to imposed under this is pretty amazing. It adds up to--and this is just over the cost of the first decade--$552 billion; when it is fully implemented, $1 trillion of tax increases, all of which get passed on in the form of higher costs of health insurance and other costs around the economy.
My point is simply that if we are sincere in being focused on creating jobs in this country, perhaps the biggest impediment, the biggest barrier to that now is the ObamaCare law that is currently being heard by the Supreme Court.
I guess I would ask my colleague from Wyoming to comment on his view with regard to some of these promises that were made regarding this legislation and how actually the bill is now playing out, as we get to know more about it. That is what the former Speaker of the House also said: We have to get this bill passed to find out what is in it. The American people are finding out what is in it and are becoming increasingly convinced this was the wrong direction to go. I assume that is a view shared by the majority of people in Wyoming.
Well, it is. And as neighboring States, South Dakota and Wyoming work closely together and are very similar. The experiences we are having in Wyoming--we now have a Republican Governor but previously had a Democratic Governor--as my colleague talked about, with the Medicaid mandates, which were called by one Governor the ``mother of all unfunded mandates,'' is that the money that has to be used for that is crowding out other things, so that is money that can't be used specifically for education. One of the worst things that is happening for education across our country is the health care law, because for every penny the State now has to add to pay for this Medicaid expansion--this unfunded mandate--and I heard the numbers from my colleague from South Dakota, and these are astronomically large numbers--those are dollars that are not going to go to the universities and the institutions of higher education, as well as our additional schools throughout the State. So all of a sudden, if you have a student in college and you see the tuition has gone up much more than you thought it should have--when you likely think it shouldn't go up at all--and you say, why is that, well, it is President Obama's health care law. That is what is happening by mandating money be spent for Medicaid. That unfunded mandate is taking dollars away from education.
This month, in March 2012, a report came out entitled ``The 2011 Actuarial Report on the Financial Outlook for Medicaid.'' The figures are astonishing on this health spending law called ``ObamaCare'' or the so-called ``Affordable Care Act.'' And by the way, just because you call it that doesn't mean it is affordable, as we see from this report. It drives up Federal Medicaid costs by hundreds and hundreds of billions of dollars through 2020. It forces many more people onto the Medicaid rolls.
The President has talked so much and used interchangeably the words ``coverage and care.'' What we know is that across the country, if somebody has a Medicaid card, that does not equate necessarily to receiving care. My colleague from South Dakota talked about reimbursement rates for physicians. Medicaid, in many ways, underpays sometimes even the cost of seeing a patient, so it is harder for those patients to get seen. So I think the President has used two words interchangeably which are in no way interchangeable. Someone can have a Medicaid card but not be able to get care.
The concern is now, as my colleague from South Dakota said, $500 billion of Medicare taken out of Medicare, not to strengthen Medicare, not to increase the security for people on Medicare, not to help improve Medicare but to start a whole new government program for other people. The Medicare patients are having a harder and harder time finding a physician to care for them.
I would say the President of the United States, by using those two words interchangeably--coverage and care--has, unfortunately, misled people to think coverage equals care, and we know it does not. That is one of the concerns with the health care law, as we talked about the broken promises and the unfunded mandates sent to the States.
As I stand with my colleague from South Dakota, I assume when he goes home on weekends--and he does almost every weekend--he hears the same things I hear. When I have a townhall meeting and I ask the question: How many of you believe that under the health care law--remember, the one the President promised your insurance rates would go down $2,500 a year--how many believe that actually, because of the law, your rates are going up faster than if there hadn't been a law at all, all the hands go up. I ask: How many of you believe the quality and availability of your care is going to get worse because of this law? Again, the hands go up.
For a second, I thought maybe that was just something we saw in Wyoming and in South Dakota. But in a national poll yesterday--in the New York Times, of all places--on page A15 of yesterday's New York Times, in terms of the health care law: How will this health law affect you personally? Will this help you? Less than one in five Americans said this will help them. Twice as many said it will actually hurt them. When they asked: Will this decrease your costs, one in six said it would decrease their costs. More than half said it would increase their costs. When it asked, How about the quality of your care, only one in six said they actually expected better quality of care. Many more expected worse quality of care. So it is not just Wyoming, it is not just South Dakota. It is the entire country which is seeing this same impact.
I would ask my colleague from South Dakota, as he travels around, is this what he is seeing everywhere as well?
It certainly is. As the Senator from Wyoming mentioned, the huge majority of businesses around this country--and especially small businesses such as those he and I represent in Wyoming and South Dakota--are enormously concerned about what this is going to do to their ability to create jobs, to maintain coverage for their employees. There are so many huge impacts from this, much of which, frankly, we predicted. But again, the idea or the notion that somehow imposing over $\1/2\ trillion in new taxes on businesses in this country, on health insurance plans, was somehow going to lead to lower costs for people to get coverage in this country is beyond me.
I am at a loss to explain how anybody could make the argument this was going to create jobs. Former Speaker Pelosi predicted 4 million new jobs. The Congressional Budget Office had said it would cost us 800,000 jobs. I suspect that is a conservative estimate, based on what I hear from employers in my State and elsewhere around the country.
But I do wish to point out too that in so many ways, because of the new mandates, because of the new taxes, because of the new costs, this is just going to make everybody's lives more complicated and more difficult, including our States. We represent States where our Governors, our legislators work hard to balance our budgets and to live within their means, not to spend money they don't have. Yet here they are being forced by the Federal Government to swallow these additional costs that are coming because of this new health care plan.
Basically, what the Obama administration has done is put shackles on the States when it comes to making decisions about the eligibility needs in their States. They are going to have lower spending on Medicaid providers. In some cases, our States are trying innovative approaches to care and delivery. They are trying to come up with new ways of doing this and to do it more effectively. Yet the Federal Government is going to make that much more difficult.
The bottom line is the combined effect of the ObamaCare's policies has taken power from the States, given more of it to Washington. It has forced unrealistic new spending mandates on the States that are going to crowd out those local priorities the Senator from Wyoming mentioned, such as education, such as law enforcement, the things I think constituents in our individual States expect their Governors and their State legislators to deal with.
Again, I would come back to what these Governors have said, and I am not talking about the conservative Republican Governors in this country. Look at what the Democratic Governors have said. The Governor of Kentucky: ``I have no idea how to pay for this.'' The Governor of Montana basically saying that increasing the patient load under this bill will cause bankruptcy or force him to bankrupt his State.
The Senator's time has expired.
Then, of course, there is even the Governor of a State such as California, which I will submit for the Record.
But the point is, there are lots of promises made that haven't been kept with this legislation.
I yield the floor.
The Senator from New Jersey.
Madam President, I come to the floor to talk about what is the pending business before the floor, which is my legislation to end Big Oil subsidies in this country.
Middle-class families are hurting, struggling to make ends meet. Yet today we are on the floor of the Senate fighting an uphill battle against those on the other side of the aisle who, with one hand, would continue handing out $24 billion in wasteful subsidies to five of the biggest, most profitable oil companies in the country and, with the other hand, take away vital programs from our Nation's veterans, its seniors, disabled children, just to name a few.
We hear our Republican friends talk about balanced budgets and we hear them talk about austerity. We hear them saying we all have to tighten our belts, we all have to make hard choices on Medicare and veterans and veterans' benefits and student loans, just to name a few. Yet they will not, in that austerity or shared sacrifice, say we will end unnecessary tax breaks to Big Oil. They will continue to ask the same things they have asked a thousand times before, which is that the American taxpayers subsidize the richest five companies in the world, while we cut programs for our wounded soldiers, for our seniors, and for our students.
Some people think of budgets just as boring documents with lots of bewildering numbers. In reality, they are statements about our priorities. This debate draws the brightest lines between our priorities and theirs. The Romney-Ryan budget, for example, cuts $2.2 billion in education for children with disabilities. What do they say to these parents? I guess they justify it by saying we can't afford it.
Why is it we cannot afford it when five companies that collectively made $137 billion in profits last year alone are getting $24 billion in subsidies over the next 10 years? So we tell these children on the Romney-Ryan budget they cannot be helped to fulfill their God-given potential because we can't afford it, but we can afford to give these five companies that made $137 billion in profits--not proceeds, profits--that we should give them an additional $24 billion of our taxpayers money? I don't think so.
Here is another example. Republicans are proposing cutting $13 billion per year from the SNAP program--that was formerly called the food stamp program--for families who do not know where their next meal will come from. So laid-off workers may not be able to feed their families, but our Republican colleagues will ensure that big oil companies continue to stuff their face at the taxpayer trough and they make sure no subsidies are cut that will hurt the bonuses of the big five oil companies' CEOs.
Here is one of them, Rex Tillerson, the CEO of ExxonMobil. He made nearly $29 million in 2010. How is it we can afford to protect Mr. Tillerson's pay but not a program designed to help hungry children? Why is it we need to protect those who need it the least but take it from those who need it the most?
Another issue we keep hearing from the other side is that cutting these subsidies will somehow raise gas prices. The notion that gas prices will go up is only in Washington. Anyplace else in this country, they get it. But only in Washington are we hearing from the other side that cutting subsidies will somehow raise gas prices. The notion that gas prices will go up if we end subsidies to Big Oil is nothing more than Republican snake oil, and the American people aren't buying it.
Let me put it plainly. We are subsidizing these companies to the tune of over $2 billion per year. Collectively, just these five companies--not talking about other sized producers. Just these five companies made $137 billion last year. Can anybody, with a straight face, tell the American people that they could not live with $135 billion in profits, that they could not give up their $2 billion; and, therefore, if they could only live with $135 billion, they wouldn't need to raise gas prices a dime--unless they are so greedy that $135 billion is not enough in profits that they need, out of each and every taxpayer's pocket in this country, another $2 billion to add to their profits.
Yesterday morning I heard one of my colleagues on the floor ask why are we picking on the poor oil companies when everyone gets the same tax deductions. So I took out my 1040 tax form to look for myself, and I was looking, let's see, for intangible drilling costs. No, I don't see it in my 1040 form. Tertiary injectants, I don't see it in my 1040 form. So I guess not everyone gets the special tax deductions for drilling.
There is a tax deduction Big Oil gets called domestic manufacturing deduction. When Congress was contemplating that provision, Big Oil, through their legion of lobbyists, managed to convince many on the other side of the aisle that drilling for oil was somehow manufacturing. When we think of manufacturing, we think about creating a product. I don't know about you, but being able to call drilling for oil manufacturing seems like a real special tax break to me.
As I said yesterday in this Chamber, it is time to get back to reality, the type of reality middle-class families face in this country, the type of reality middle-class families face as they go to the pump, as they have to get to work, take their children to school, to doctor appointments, the type of reality small businesses face when they are trying to send their sales force across a State and have them traveling in a car to do so. It is time to tell middle-class families struggling to make ends meet that fairness means everyone pays their fair share when it comes to reducing the deficit and that it also means it is time to stop wasting taxpayer moneys on oil subsidies and use this money to invest in clean energy, in jobs, in lowering the deficit. It is time for us to repeal the Big Oil tax breaks. It is time for our colleagues on the other side to join us to end this corporate welfare for big oil companies, to create competition to help lower gas prices and to reduce the deficit rather than continue to sell snake oil to the American people to protect Big Oil profits.
I have listened to some of the debate. I don't get it. I have seen average Americans who are struggling, and they say: Wait a minute, $24 billion of our money is going to the big five oil companies and they are making $137 billion? As a matter of fact, that is just 1 year. The $24 billion we want to eliminate and put into renewable energy fuels would create competition, will ultimately help drive down gas prices, to reduce the deficit significantly, instead of calling upon cuts to children, whether in their nutrition or cuts to children who are disabled. I only talked about $137 billion in 1 year. We want to cut $24 billion over the course of 10 years. Guess what they will make in 10 years--over $1 trillion in profits. I find it hard to fall for the crocodile tears that taking $24 billion over 10 years, a little over $2 billion a year, when they are going to make $1 trillion over a decade is somehow not enough, that leaves them with not enough profits--$24 billion from $1 trillion--and that because we take that $24 billion, gas prices are going to go up.
All these subsidies have not made gas prices go down. As a matter of fact, as I pointed out yesterday, at a time when they were making $137 billion in profits, they were producing 4 percent less oil. Come on. It is time to give working families in this country a break. We can do that as we vote to end Big Oil subsidies.
I yield the floor.
I suggest the absence of a quorum.
The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Madam President, I ask unanimous consent the order for the quorum call be rescinded.
Without objection, it is so ordered.
Madam President, we continue the discussion about the impact of high energy prices, high gasoline prices at the pump, what they mean to families from Alaska to New York--the very reality we face as a nation that is struggling still, coming out of a recession. We are worried about jobs. We are clearly worried about the high price of energy and what can be done. I think it is important to note this is something to which there are no clear and easy answers. There are no short-term, quick, flip-the-switch fixes we can do. But there are a lot of things we can help to make happen by either affirmative action or, in many cases, getting the government out of the way.
In doing so, I think it is important we speak honestly about the situation before us, about what the potential solutions are and how they translate. In the past day or so, I have heard some comments from some of my colleagues that I think deserve a fair and honest rebuttal so this conversation, the dialog, can continue and be better understood in terms of what we are talking about with these oil and gas tax increases--because that is exactly what the Menendez proposal would do. It would increase the taxes on an industry that is providing not only much needed resources for this country but much needed jobs.
The first point I have heard is that American taxpayers are, somehow or other, subsidizing the oil companies. Again, it is important to put this in context. This argument I think rather bizarrely labels basic tax deductions, somehow or other, as a subsidy, as though the Federal Government allowing businesses to retain more of their earned dollars--because that is what is happening with the situation of the oil companies; they have earned the dollars and they are basically keeping more of the dollars they have earned--that, somehow or other, that action is the equivalent to handing them a check from the government; whether it is what we see, for instance, with the situation at Solyndra, where they got a check from the government. It is important to put in context that when some say we need to end subsidies for oil companies, I think what that translates into is raising taxes on oil production.
I think it important to note and understand this is an industry that does pay substantial taxes to the Treasury. Their taxes are already higher than we see in most other industries. The four largest companies have an effective tax rate that is over 40 percent. In 2010, they paid $55 billion in income taxes to Federal, State, local, and foreign governments. That is a huge sum. It probably increased, along with the oil prices, back in 2011. These numbers are from 2010. But when people say we all need to pay our fair share, I think it is important to ask the question: How much does the industry have to pay before it is sufficiently considered to be doing its part?
One of the other points of contention that has been raised by my colleagues on the other side of the aisle is that raising taxes on oil companies will not increase gas prices. Well, it is certainly not going to lower them. I think we can probably agree on that.
If we raise taxes on oil production, we are going to get less oil production, and it is a question that I think we need to ask. Think of any situation where if we tax it more, we will have more of it, and it will be more affordable. It just doesn't make sense here.
Both the President and the sponsor of the legislation before us have publicly stated that more production can help lower prices. Loss of oil production due to punitive taxes--I think we have seen this play out time and time again. Back in the Carter administration they advanced a failed windfall profits tax.
I mentioned yesterday on the Senate floor the example that we are seeing play out in Great Britain right now. One year ago the United Kingdom decided to do essentially what is being proposed here. They reacted to high oil prices by raising taxes on the industry, and the net result was companies produced less, and they diverted their investment elsewhere.
In the year since the UK imposed its tax hikes, the production decline has tripled from 6 percent to 18 percent. They are now looking at reversing that decision and have announced new oil tax breaks to try to bring back that production.
Another point that has been raised is that somehow or other oil companies are getting special treatment, and I just mentioned this a little bit. Again, the four largest oil companies have an effective tax rate that is over 40 percent. What that means in terms of where they stack up with other industries--this is a higher effective rate than in most other industries that we would see there.
Another point that has been raised is that oil companies are not investing their profits in more oil production. The President seems to disagree with this statement, arguing that the United States is producing the most oil it has seen in years. But the reality is, efforts to produce oil here in this country have been blocked or slowed by the Federal Government seemingly at every turn. Again, I think it is important to put this in context in terms of where we are seeing increased production because that part of the discussion is true. We are seeing increased production but not necessarily on our Federal lands.
On this map of the lower 48, the Federal lands are all these areas in yellow. The red dots are Federal shale well operations on Federal land. The blue is the shale well private land operations. So we have a situation where 96 percent of all production increases have occurred on our States and on our private lands. This comes from the administration's own EIA that we have seen production on the Federal side drop under this administration. The fact that exists is that America's largest untapped oilfields--whether they are in the offshore areas, the mountain west, Alaska, which is not even on this map--are still off-limits under Federal law. None of these resources are counted when people say the United States only has 2 percent of the world's reserves.
I showed a chart yesterday that indicated we are not even allowed to count these areas that have not been truly proven. It is because of the lands being off-limits or the permitting delays that we see that the United States is not a larger producer of oil. If the Federal Government wanted to, it could allow us to become the world's top oil producer and be virtually independent of OPEC sources.
A fifth point that deserves some comment: Yesterday, the majority leader said for every 1 cent increase per gallon of gas, Big Oil profits rise by $200 million. Presuming this figure is true in the general sense that it has been alleged, I think my Democratic colleague appears to prefer that perhaps those profits should go to OPEC rather than to U.S. companies or to the pension holders. At least in the United States those dollars are taxable. They support jobs--including 9.2 million jobs within the oil and gas industry--and help us with the balance of trade issues. So, again, that is a contention that needs to be directed, some commentary.
Another point is that America is now a major or net exporter of oil. This was raised yesterday by the Senator from California when I was on the Senate floor. She said: We are now a major or net exporter of oil. That statement is absolutely false and needs to be corrected. Under 15 CFR 754.2, it is illegal to export crude oil from the United States without a rare and very special waiver. Therefore, 99 percent of the oil that is produced here stays here. Ninety-nine percent of the oil produced in this country stays in this country. Only 1 percent of U.S. oil is exported.
The very small, very insignificant exports of crude that do occur require a very extensive review process. It is typically sent to Canada or Mexico for refining purposes. Ultimately, that fuel is returned for use in the United States.
In terms of exporting refined products, if that is the concern, Secretary Chu came before the Senate Energy and Water Appropriations Subcommittee and stated that the only refined product exports from the United States consist of certain types of diesel fuel and products we don't use in the United States. So that is a big difference between refined product and crude.
But it is important to correct the record and demonstrate that we are not in a situation where, as a country, we are exporting our crude oil. It is totally inaccurate to say the United States is running a surplus or acting as some major exporter of any of the fuels which Americans need and use to fill up their vehicles or heat their homes. As a result, almost 90 percent of refined products stay in this country. Pretty much the only products that are exported are those products we don't use.
The last and final point I would like to make is about a statement that was, again, made yesterday that somehow or other Republicans only want to drill, and they are not interested in renewable energy. Again, I think that statement is a false one and needs to be corrected.
I come from an oil-producing State and certainly believe very strongly that we need to also focus our efforts on renewable energy. Republicans are simply proposing that we pay for renewable energy research and development without raising taxes on employers and consumers.
I have been pushing for years to allow for revenues from the development of ANWR to help us build out that next generation of energy source for our country. ANWR revenues alone could provide as much as $300 billion in Federal revenues for renewables--depending on what the price of oil is--if Democrats would simply allow access to it. Instead, they propose to raise taxes on whatever production is taking place and hand out loan guarantees, unfortunately, to many unstable companies.
I would also point out that allowing the Keystone Pipeline has nothing to do with drilling. Neither does pressing the EPA to settle down with its regulations that are making refineries so expensive to operate and in some cases actually shutting them down. I think most Republicans also support the new CAFE standards and many of the other renewable provisions that were in the energy law passed in 2007. This Congress has passed multiple efficiency and renewable bills out of the Energy Committee. Unfortunately, none of them have been allowed a vote on the floor of the Senate.
So I think it is wrong to suggest that Republicans are not willing to talk about anything but drilling. We just want it included in part of that discussion when we are talking about ``all of the above.'' I think we absolutely need to mean all of the above, and that includes increased domestic production and it includes a strong future for renewables. It must focus on conservation and efficiency. This is how we will get to a true level of energy independence and reduce our energy vulnerability on our insecurity.
With that, I know my time has expired. I would ask unanimous consent that the time during all quorum calls be divided equally.
Without objection, it is so ordered.
I yield the floor.
The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
The Senator from New Mexico.
Madam President, I would ask unanimous consent that the order for the quorum call be rescinded.
Without objection, it is so ordered.
Madam President, a week or so ago I came to the floor to talk about the general issues of gasoline prices and domestic energy production. I believe it is important for us to use accurate facts as we are talking about our energy challenges and we work on energy policy issues. Only by using actual facts can we identify policies that will hopefully bring down the price of gasoline at the pump.
So I would like to focus on a particular aspect of our domestic production; that is, production on federally owned land. This is something which has been the subject of a lot of political discussion, both out on the Presidential campaign trail and to some extent in the Senate.
Let me first comment with respect to the price of gasoline and the impact of domestic production on the price of gasoline. This chart, which I put up before, ``U.S. oil production and gasoline prices during the period 1990 through 2011,'' I think, makes the point very well. That point is that the price of oil is set on the world market. What we produce domestically does not have a significant effect on that market. So the red line on the chart represents increases and decreases in domestic production of oil and the blue line represents the price of gasoline. Clearly, there is not a lot of correlation between those two. It is worth looking again at this chart because I think it makes the point that as U.S. production has increased from 2009 to the present, oil prices have also increased. So increased production has not resulted in lower prices, and it cannot, because the price of oil is set on the world market and the price of gas is, in effect, pegged to the price of oil.
Increased domestic production, while important for our country--and it is important for many reasons--does not bring us lower gas prices. Our policy approach must be to find ways to use less oil and be less dependent on the volatility we see in the world oil markets. We know how to do that. We know how to decrease our vulnerability to those world oil markets and we have made some, in my view, enlightened policy steps to accomplish that. We got a good start in the 2007 Energy bill. It was a bipartisan bill, and that bill requires the use of more biofuels; that is, homegrown energy which is not traded on a world market. We require the use of those biofuels in transportation. We require that vehicles of all sizes be more fuel efficient. We have seen dramatic results from that, and we have hopes for even greater results in the future.
This next chart shows the real progress we have made in reducing our reliance on imported oil. It was about 60 percent in 2005; it is now down closer to 45 percent in 2011. The Energy Information Administration projects that this progress will continue and their projection is that under current law, if we do nothing else, imports should drop to around 38 percent of our oil consumption by 2020. I, for one, hope we are able to do some other things and bring that dependency on foreign oil down even more.
One way to continue that improvement is to support the expansion of our renewable fuels industry and support efficient vehicle production. In the context of our debate about energy tax policy, we must use some of our limited taxpayer resources to encourage a diverse supply of both energy and fuel. Promoting homegrown advanced biofuels and highly efficient alternative vehicles needs to remain a priority for our country.
Yesterday we had a hearing in the Finance Committee's Subcommittee on Energy, Natural Resources, and Infrastructure, the purpose of which was to explore how the exploration of a number of tax incentives directed at advanced biofuels and at energy efficiency and at renewable energy has affected those industries. I hope very much that we can find a way to work together to keep those incentives in place and continue to make progress in developing these alternative ways to meet our energy needs.
Unfortunately, there are those involved in these discussions who persist in focusing almost entirely on how to increase domestic production instead of on any other policy that could help us to use less oil. While we know domestic production will not significantly impact gasoline prices, at the very least when we discuss domestic production, I think it is important to get the facts right.
There is an ongoing misunderstanding or misstatement of the facts about the production of oil on federally owned land. Let me address that for a bit. One of the Republican candidates stated last week in the context of gasoline prices that ``[p] roduction on government lands has gone down under Obama.'' Indeed, he went on to suggest--without any basis I could determine--that increasing domestic production of oil would reduce the price of oil by $1.13 a gallon. How he came up with that number I have no idea, but it is important that we all work from the same facts.
Here are the facts: It is undisputed that overall domestic production of oil has increased, not decreased, over the last 3 years. We are showing a chart that makes that point. This chart shows that during the 3 years of 2006, 2007, and 2008--the last 3 years of the Bush administration--we produced 1.78 billion barrels of oil. During the first 3 years of the Obama administration--2009, 2010, and 2011--we produced 2 billion barrels of oil. One of the witnesses we had in a recent hearing in the Energy Committee was James Burkhard, a managing director of IHS/Cambridge Energy Research Associates, and he described our situation in this country as the ``great revival'' of U.S. oil production.
Over the last 3 years, the U.S. increase in oil production was far greater than that in any other country in the world. The United States is now the third largest oil producer in the world after Russia and Saudi Arabia. This trend is also true for the subset of domestic oil production which we would define as federally owned resources; that is, oil production on Federal land. This chart I think illustrates that very well. Production on federally owned land is higher in every year of the Obama administration than it was in the previous administration.
Between 2006 and 2008, as I said before, we had a total of 1.78 billion barrels of oil produced on Federal land. Between 2009 and 2011, the total is over 2 billion barrels being produced on Federal land.
Secretary Salazar testified to the Energy Committee recently that oil production from the Federal Outer Continental Shelf increased by 30 percent between 2008 and 2010. Offshore production decreased somewhat between 2010 and 2011 because of the BP disaster in the gulf, but it still remained higher than it was in 2008, and that production, of course, is increasing substantially again in 2012.
The Energy Information Administration suggests that clearly the decrease experienced in 2011 in offshore production was due to the Deepwater Horizon disaster. It projects that domestic oil production will increase over the next 10 years, in part due to ongoing development in the Gulf of Mexico. The projection is that it will increase by over 1 million barrels per day as compared to 2010. Annual oil production onshore on Federal lands has increased by over 8 million barrels between 2008 and 2011 and is now over 111 million barrels.
Oil production has always fluctuated a bit from year to year on Federal lands and on private lands. There is no doubt that will continue to be the case. The important point here is that we need to put to rest once and for all the claim that the Obama administration is causing a reduction in production of federally owned resources. That simply is not the fact.
We should also be aware that the industry has access to a great deal of productive Federal acreage that it has not yet developed. This chart is instructive. This shows total federally owned acres leased for oil and gas development as of 2011. We can see there are 74 million acres that are currently under lease. This is Federal land currently under lease, both onshore and offshore. The striking thing about this chart is that roughly 25 percent of this is actually being produced--producing oil and gas at this time. There are many reasons for that. I am not accusing anyone of not diligently pursuing this; I am just saying there is a lot of land under lease, a lot of area under lease that is available for production, and I assume the companies that have leased it are aggressively pursuing that production.
This final chart I wish to share with my colleagues covers the number of acres offered to industry for lease on the Outer Continental Shelf, all of which were in the resource-rich central and western Gulf of Mexico and the number of those acres actually leased. As we can see from this chart, the blue area is the area that was offered for lease but not purchased and the red is the area that was actually leased. The administration, of course, has announced they will have another lease sale in the Gulf of Mexico--in the central and western gulf--and this will cover 38 million initial acres. So there is a very substantial amount of land being offered for release.
It is useful to keep in mind that federally owned oil production today is about 37 percent of our total domestic production. Many of our oil resources are located on private lands or State lands and resources from all of these areas are important in meeting our energy needs.
We need to produce domestic oil and produce it responsibly. There are a lot of good national security and economic reasons for that. I have always supported doing that. But to suggest that some change in policy regarding domestic production is going to change the price of gasoline at the pump is disingenuous. In order to move toward policies that will work to moderate the impact of gasoline prices in the future, I think it is important we be honest with our constituents and ourselves about what the factors are that influence that price.
We enacted some policies in 2007 that have been helpful. I hope we can build on that work at a time and on an issue of such great importance to the future of our country. I hope we can work together and stick to the same facts. If we do that, I believe we can develop and enact policies that can provide real help in the long run to our constituents who are suffering from high gas prices.
Madam President, I yield the floor and suggest the absence of a quorum.
The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Madam President, I ask unanimous consent that the order for the quorum call be rescinded.
Without objection, it is so ordered.
Madam President, I ask unanimous consent to be recognized for up to 25 minutes.
Without objection, it is so ordered.
I thank the Chair.
Madam President, I voted against the motion to proceed to the Menendez bill on Monday because, quite frankly, it is just a bill to continue raising gas prices. I talked for quite some time yesterday on the Senate floor about this; that by raising taxes on the oil and gas industry it sounds good to a lot of people because people do not like the oil and gas industry. They have been vilified, so everybody thinks we ought to get the oil and gas industry.
What they do not understand is--I think they understand it, but they will not admit it--that is the way to increase prices at the pump. Somebody has to pay for all that stuff. So even Senator Menendez and several Democrats have said this bill is not going to lower gas prices. It would raise gas prices. I do not think anyone who looks at it logically could come to any other conclusion.
As I discussed Monday on the Senate floor, the Democrats' plan goes against everything we know about basic economics--higher taxes limits supply. Whenever we limit supply, the price goes up. I do not think there is a person out there right now who does not remember, back in their elementary school days, the basic concept of supply and demand. We have this huge supply out there. But if we cut the supply, then the demand is going to be greater, and the prices are going to go up.
The bottom line is, President Obama and his allies do not have an answer to high gas prices. That is because high gas prices--higher prices for all the energy we use--are exactly what they want. This administration remains committed to a cap-and-trade, green agenda. It is a plan that severely restricts domestic development and drives up the price of gas and electricity.
Let me put it another way. Their policies are designed to make recoverable traditional energy more expensive so their desired green energy can compete. There is no question that is what the Obama administration has wanted.
You all remember--and we have quoted so many times on this Senate floor--that Steven Chu, the Secretary of Energy, told the Wall Street Journal: ``Somehow we have to figure out''--speaking on behalf of President Obama and the Obama administration; not so much the Democrats in the House and the Senate, but this is the Obama administration--he said: ``Somehow we have to figure out how to boost the price of gasoline to the levels in Europe.'' Well, the levels in Europe were ranging, at that time, when he made the statement, around $8. Well, we are getting up there. He is getting his way. This is something that is happening now.
We all know the infamous quote from President Obama in 2008 when he said under his cap-and-trade plan--this is a quote now--``electricity prices would necessarily skyrocket.'' Notice the word ``necessarily.'' It is going to happen. The President had it right. The point of the cap-and-trade regulations is to make us pay more on our utility bills.
A lot of times people do not draw the connection. Energy is energy. If we raise the price of energy on utilities, on utility bills, or gas prices at the pump, it all relates to the rest. If we somehow put coal out of business so we have to use more natural gas and more gas, then that raises the price because that makes more demand for that particular product. I think most people understand that. That is very basic.
If we are serious about lowering prices at the pump, then we need to open the vast oil and gas reserves we have at home to develop. After all, CRS recently reported--this is kind of interesting because it was a CRS report; so far, I have not heard anyone counter this report--we have more recoverable reserves of oil, gas, and coal than any country in the world--more than Saudi Arabia, more than China, more than Canada, all of them combined.
In fact, with more than 160 billion barrels of recoverable oil, we have enough to maintain America's current rate of production and replace all of our imports from the Persian Gulf for 50 years. That is just domestically what we could do. It is out there.
A lot of them try to say: Oh, no, we only have 2 percent of the reserves. I have said this so many times, and yet the other side just keeps repeating it over and over: We only have 2 percent of the reserves, and we are using some 25 percent when, in fact, they are talking about proven reserves. Proven reserves are reserves where we have drilled and proved there is oil there. Recoverable are the areas where we have not drilled yet because we have not had an opportunity.
So if we have a policy, as this administration has, not to allow us to drill for oil, then we cannot prove anything. So the 2 percent means absolutely nothing. It is totally false. The thing is they know it. The key is ``recoverable.'' We have more recoverable reserves in fossil fuels; that is, oil, gas, and coal, than any other country in the world.
But today we have awful government regulations that prevent us from accessing it, and we are the only Nation that does this. I defy anyone to tell me the name of another country that does not develop its own resources. They all do it, and we have this President saying, well, we encourage them down in Brazil and Venezuela to drill but not here.
Well, anyway, we have these reserves that we need to start doing something with. That is why I have submitted three amendments that will address President Obama's war on affordable energy. I am going to talk about them.
First of all, amendment No. 1974 is the American Jobs and Domestic Energy Production Act. In order to increase the development of our wealth of resources, I have submitted a substitute amendment to this bill that will open literally billions of barrels of oil and gas for commercial development. It is something that will actually bring down the prices, directly bring down the price of oil, of gasoline at the pump.
First, the bill opens significant portions of the Outer Continental Shelf for development. Right now, the entire east coast and west coast and much of the Gulf of Mexico are completely off-limits. For the most part, the only offshore development allowed is in the western portion of the gulf and in certain areas offshore of Alaska. But we have to keep in mind, to do this, we have to get the permits, and that is where they have dragged their feet.
My amendment would require the rest of the OCS to be leased over time. According to a recent study, these areas have at least 63 billion barrels of recoverable oil and up to 186 trillion cubic feet of natural gas. Once brought fully online, this will create tens of thousands of new jobs and ultimately may bring in an additional $1.4 trillion in additional tax revenue for the government.
My amendment would also require the administration to move forward with three lease sales that were conducted by the Bush administration but were subsequently pulled by the Obama administration after taking office.
Additionally, my amendment allows ANWR on the Northern Slope of Alaska to be developed. Experts believe this area contains 16.4 billion barrels of oil and 18.2 trillion cubic feet of natural gas.
I have been up there. People talk about ANWR and all this, and it is a beautiful area. They have systems now where we cannot even tell where they are developing it. I have seen polls ranging from 70 to 85 percent--and I can actually identify these polls--of the people in Alaska, they want to do it. Why are we, in our infinite wisdom in Washington, DC, telling them in Alaska they cannot go after their own oil and gas?
I think it is ludicrous. Anyway, this amendment will correct that situation.
My amendment removes also the statutory moratorium on the development of this resource, and it requires the Secretary of the Interior to begin an oil and gas leasing program in that area.
Today, oil shale--particularly that in Western States--represents some of our greatest energy potential. Just a few years ago we didn't know this. We didn't have any idea of the size of this.
Some experts believe the Western States hold as much as 1.8 trillion barrels of oil shale, of which 800 billion barrels is presently recoverable. This is simply an astonishing amount of oil, and it would do a lot to help lower the price at the pump. That is what we are talking about. Everything we have talked about on the floor in opposition to the Menendez bill is something that will lower prices of gasoline at the pump.
My bill forces the administration to release 10 research and development leases that were approved by the Bush administration but then canceled by the Obama administration.
Thereafter, the Obama administration would be forced to conduct additional oil shale leases on Federal lands. We have 93 percent of the Federal lands that are off-limits. That needs to be corrected.
Lastly, my bill reserves the right of regulating hydraulic fracturing to the States. I know a little bit about this because the first hydraulic fracturing that took place in this country was in my State of Oklahoma in 1949. Since 1949, there has not been one documented case of groundwater contamination. It has worked beautifully, I think most people agree, now that it is better regulated by the States. The States differ in the depth of their resources, what they have to do to achieve it. It has worked. The old saying is ``if it ain't broke, don't fix it.'' We have to look behind the motive of the Federal Government. This administration, if they can stop hydraulic fracturing, can stop the production of oil and gas. I believe that is their motivation. It is a State process that is successfully regulated by the States, and in 60 years there has not been one documented case of groundwater contamination.
Because States have done such a good job regulating fracking, I think they ought to continue having that exclusive right. My bill does this. It takes away the temptation of the power grab by the Federal Government to regulate this thing that doesn't need to be regulated at the Federal level, particularly when their motivation is to do away with hydraulic fracturing. If we do that and we talk about when they are trying to go after these types of formations, they cannot extract 1 foot of natural gas without using hydraulic fracturing.
That is what the bill does. It would be a big win for energy production because we all know the administration's regulations would likely prevent anybody from ever using hydraulic fracturing again. I can remember when the President was giving his speech to the Nation at the joint session. All of a sudden, people caught on that he has had this war on fossil fuels. He started saying complimentary things about good, clean natural gas. I agree. But what we didn't hear him say--because he said it so fast toward the end of his remarks--is we have to do something about hydraulic fracturing. If we kill hydraulic fracturing, we cannot get the natural gas we are talking about.
All told, by tapping into our domestic supply of oil and gas, we could increase our economic output by trillions of dollars over the next several decades. It could increase government tax revenues by $2 trillion, and it would create hundreds and thousands of new well-paying jobs.
We have the energy resources we need, and if we develop them, it will significantly improve our economy and, there again, lower the price at the pump.
By raising taxes, as the Menendez bill would, it would only make the problem worse. I urge adoption of that amendment.
The next amendment I introduced is the Gas Regulations Act of 2012. To hold the Obama administration accountable for their role in gas prices, I am also introducing the Gas Regulations Act of 2012 as an amendment. We actually have this, and we are going to try to introduce it as a bill. This amendment would require an interagency committee to conduct a cumulative analysis on certain EPA rules and actions that impact the price of gasoline and diesel fuels.
My amendment is the companion amendment to a bill introduced last week by House Energy and Power Subcommittee Chairman Ed Whitfield. This amendment will help us to obtain a better understanding of the costs of all these levels of regulation. I have often talked about the regulation and what the cost is. It is kind of masquerading. I will read the cost of these regulations that this administration is accountable for and that directly relate to the increased price of gas at the pump. Tier 3 motor vehicle emissions and fuel standards--that would levy a $12 billion gas tax on refiners. Who will pay for it? You will and my wife will at the pump. New source performance standards for petroleum refiners could result in billions of additional environmental and compliance costs. Again, that will be passed on to the consumer. The RFS2 standards too would force Americans to consume 21 billion gallons of expensive biofuels, such as the one the Navy procured for $26 a gallon last year, instead of paying $3.50 a gallon.
Ozone standards would result in a $676.8 billion loss in GDP. Again, these standards increase directly the price of gas at the pump. There is greenhouse gas PSD and title V permitting actions--again, another regulation. This regulation slows down the permitting process and would prevent upgrading refining capacity from coming online quickly. Again, this causes an increase in the gas price. People know pretty much the supply-and-demand argument, but they don't know what the regulations do. Anyway, this amendment No. 1963 is designed to do that.
The next one I introduced is amendment No. 1967. This is kind of called the Inhofe-Upton Energy Tax Prevention Act. Fred Upton, a Congressman, actually passed this. I have introduced this now for 3 years. We have been trying to do this.
Just yesterday, we found out President Obama fully intends to make good on his campaign promise that under his plan of a cap-and-trade system, electricity prices would ``necessarily skyrocket.'' That is what we are talking about with this amendment, cap and trade. People remember that. A lot of Republicans were concerned about this issue after Kyoto, and they said let's do something about this; this idea that somehow we are going to have to reduce and regulate greenhouse gases in order to do this. They are introducing cap-and-trade bills. It goes back to the Kyoto convention in 1993, when the famous meeting was held, and Al Gore went down to try to put it together in Rio de Janeiro 20 years ago. He was going to put this together to come up with an international convention called Kyoto, and they tried to, of course, get us to pass it. We saw it would cost the American people between $300 billion and $400 billion a year, and it would treat developing countries differently, so we didn't do it.
The interesting thing about the Kyoto treaty is that the President--then President Clinton--never submitted it for ratification in this body. After that didn't work out, they went ahead and did a second effort to do it through cap-and-trade legislation. We beat all the cap-and-trade regulations. The main reason is because it became evident the science was cooked--all put together by the United Nations. It started back in 1992. They developed something called the IPCC, which is the Intergovernment Panel on Climate Change, which was designed in order to, I believe, cook the science and make people believe we are going to have to do something and that CO and anthropogenic gases were causing global warming.2
We know what happened since that time, and with climategate, which showed they cooked the science. Consequently, we introduced this legislation. This legislation merely does one thing. It will take away the jurisdiction of the EPA to regulate greenhouse gases. My concern is this: We were able to stop all these bills from passing that would have imposed a tax increase on the American people.
To give an idea how much that $300 billion or $400 billion would mean, in Oklahoma, I keep track of the number of families who file tax returns, and I do the math. If we do the math with what it would cost for cap and trade and do the legislation they were talking about passing, which we defeated on the Senate floor, it would cost each taxpayer in Oklahoma over $3,000 a year. What would they get for that? This is interesting. Even those people out there who think I am way off base and wrong, in terms of CO and anthropogenic gases--keep in mind we asked the question to President Obama's Administrator of the EPA: ``If we were to pass cap and trade, would this reduce CO emissions worldwide?'' She said: ``No, logically, it would not.''22
This isn't where the problem is. The problem is in China and in India. Those are the places where they would have to be regulated. But they don't regulate it to the degree we would here. We can carry that one step further. If we pass cap and trade, it would have the effect of increasing anthropogenic gases worldwide, because as our manufacturing base leaves the United States and seeks energy in those areas where there are less controls, that would have the effect of not reducing but increasing emissions.
What we would attempt to do is to take away that jurisdiction. Here is the reason we want to do that. It is bad enough--when I talked about $300 billion to $400 billion it would cost to do cap and trade through legislation, if we do it through regulation, it will be a lot more for this reason: Most of the bills that were introduced, starting back in 2003, ending up with the Waxman-Markey bill, which was a couple years ago, these were bills that would regulate emitters that emitted over 100,000 tons a year. However, if we do it through regulation, it has to be under the Clean Air Act, and the Clean Air Act specifically says not those that emit 100,000 tons a year but those who emit 250 tons or more. That would be every church, every school, and every hospital in America. We cannot even approximate that cost. That is what doing cap and trade by regulation would do.
Simply put, my third and last amendment would be to do here what they have already done in the House of Representatives, which is to take away the jurisdiction from the EPA. It directly relates to the price of gas at the pump. Take these three amendments, and if the Menendez bill should get through, with these amendments we can totally stop the increase of gas at the pump because that is what we will be faced with if we adopt the Obama-Menendez amendment.
With that, I yield the floor.
The Senator from Tennessee.
Mr. President, last Wednesday, I had the privilege, as did many in this body, of attending a tribute to two former majority leaders of the Senate, Howard Baker and Bob Dole. It was a great evening. President Clinton sent a video and the Vice President attended, as did the Secretary of Defense, the Secretary of Health and Human Services, and all former majority leaders of the Senate, except one. It was a long evening but a good one. Along with Senator Baker was his wife former Senator Nancy Kassebaum Baker, and along with Senator Dole was his wife former Senator Elizabeth Dole. It was sponsored by the Bipartisan Policy Center. It was a reminder that while in this body we have differences, in fact, this body was created to resolve differences. People sometimes say to me: You Senators argue. That is what we are supposed to do. When they kick over to us issues that cannot be resolved other places, with respect for each other's points of view, we try to resolve them, and we often do. Well, Bob Dole and Howard Baker were among the best at working across party lines and getting results, and it was for that skill as much as for any other skill that they were honored.
I was asked to introduce a short film about Senator Baker, and I did. Senator Roberts of Kansas was asked to introduce a short film about Senator Dole, and he did. I ask unanimous consent to have printed in the Record my remarks about Howard Baker as I introduced the film.
There being no objection, the material was ordered to be printed in the Record, as follows:
Good evening. My job tonight is to introduce a short film about Howard Baker, but I want to do that the way he would do it with a story. I was thinking that--I believe the very last time I appeared anywhere with both Senator Baker and Senator Dole was almost exactly 16 years ago. It was just before the Tennessee Republican primary. Bob had run me clean out of the presidential race. I was trying to do the only graceful thing, which was to support him. And so Howard held a press conference at the Knoxville Airport, and I did what I thought was a good thing to do. I presented Bob Dole with one of my red and black plaid shirts and my endorsement, whereupon Howard Baker said loud enough for everybody in the news media to hear him: I hope that's Lamar's last red and black plaid shirt. Howard Baker loves a good story. He especially loves a story about his maiden address. He spoke a little too long. His father-in-law, the late Senator Dirksen, walked over to congratulate him. And Howard said, well, Senator Dirksen, how did I do? And Senator Dirksen looked down and said, Howard, perhaps you should learn to occasionally be guilty of an unexpressed thought. From that he learned eloquent listening. My favorite story of his was when he suddenly found himself the majority leader after the Reagan sweep in 1980, and no one was more surprised than him except Bob Byrd, who suddenly found himself the minority leader. So Howard went to see Bob Byrd, and he said, Senator Byrd, I'll never learn the rules of the Senate as well as you know them. So I'll make a deal with you. I won't surprise you if you won't surprise me. Senator Byrd said, let me think about it. But he called him the next morning and said yes, and they worked beautifully together for four years, effectively, with the Senate. Senator Baker, when he was the chief of staff to President Reagan, every single morning--so he tells me--would begin his day with the president sitting down, just the two of them, each of them telling the other one a little story. That got to be a lot of stories. But it always made me feel a lot better about our country to know we had a president and his chief of staff who were so secure in their own skin that they could sit down at the beginning of each day and tell each other a little story. That was one of Howard Baker's secret weapons. His other secret weapon is that he remembers Roy Blunt's advice: People start getting into trouble when they stop sounding like where they grew up. Howard Baker has never stopped sounding like where he grew up, because he never stopped living where he grew up, the little town of Huntsville, Tennessee. Earlier this week a student asked me, what's the best way for me to get into politics? And I said, I can tell you exactly how to do it. Pick out the person you admire the most, volunteer to go to work for them without any pay, carry their bag, drive them wherever they want to go, baby-sit their children, write their speeches for them, even if they don't give your speeches. I know that works, because that's what I did. I did it for the very best. And 45 years ago, I went to work in the United States Senate for Howard Baker, in the very same office that I occupy today. So I agree with Senator Dan Quayle, who once said, there's Howard Baker, and then there are the rest of us senators.
Mr. President, Senator Baker, recalling the story of his maiden speech, asked that his remarks be put into the Congressional Record. The story was this, which I told that night:
Senator Baker was here in 1967 and made his maiden speech at a time when his father-in-law, Everett Dirksen, was the Republican leader. I was here then, as Senator Baker's young legislative assistant, right out of law school. Senator Dirksen walked over to Senator Baker and sat down next to him after what had been a fairly long speech--maybe 45 minutes. Senator Baker looked at his father-in-law and said: Senator Dirksen, how did I do? And Senator Dirksen said to his son-in-law Howard: Maybe occasionally you should enjoy the luxury of an unexpressed thought.
So Senator Baker, recalling that advice, I assume, asked that his remarks to be delivered that night at the end of a long ceremony be placed in the Congressional Record, and so I ask unanimous consent to have printed in the Record Senator Baker's remarks.
There being no objection, the material was ordered to be printed in the Record, as follows:
When I first arrived in Washington as a newly-elected Senator in 1967, the Vietnam War was at its height, with no end in sight and with anti-war protests growing increasingly violent. Race riots were burning down American cities. A president of the United States had been assassinated just over three years earlier, and there were more assassinations to come. It was a dangerous time in America, and many of us feared the center would not hold. We came to Washington as the last of the World War II generation to seek public office. We had been, in President Kennedy's words, ``tempered by war, disciplined by a hard and bitter peace,'' and we sought positions of leadership to help heal the Nation we had sworn to defend as very young men and women. Bob Dole, a genuine hero of the Second World War, had already come to Washington six years earlier as a Congressman from Kansas, and he would join me in the Senate two years later. George Bush the elder, another young hero of the war, was elected to the House the same day I was elected to the Senate. The overwhelming majority of members of the House and Senate in those days had served their country in uniform, most of us in war. We had a perspective on political conflict that today's leaders cannot have. We knew what it was like to be a nation totally at war. Most of us were old enough to have suffered through the gloom of the Great Depression that had gripped our economy for more than a decade. And now our country was being torn apart by an unpopular war, by racism, by extremism, by violence. We were no less committed to the success of our political parties and the supremacy of our policy objectives than the leaders of today. Indeed, we understood profoundly that the vigorous contest of political ideologies and policy ideas lay at the very heart of a successful democracy. We knew that it was through those contending interests, passionately but peacefully pursued, that the full range of the American people's demands and dissents could be properly addressed, and sound public policy could emerge from this constitutional crucible. But we also knew that none of us had a monopoly on truth, or wisdom, or the best interests of our countrymen. We had--and we kept throughout our Washington careers--a decent respect for differing points of view. Without this respect, democracy cannot work. With such respect, with good will toward our adversaries even when political passion is most intense, democracy cannot fail. The abundant harvest of this philosophy is plain to see. In our time of testing, we replaced race riots with racial justice. We won the Cold War. We saved Social Security from bankruptcy and created a social safety net that rescued millions from poverty and desperation. We created economic policies that led to the most sustained and widely shared prosperity in the history of the world. In much worse times than these, President Lincoln told his deeply divided countrymen, ``We are not enemies but friends. We must not be enemies.'' This is the credo of the Bipartisan Policy Center, which does great honor to Bob Dole and me tonight. This is the secret of America's success. This is the foundation of America's democracy. And this is my fondest wish for the country I love. Thank you, and God bless us all.
Mr. President, I would like to make a few remarks on the subject we are debating here, which is energy.
Last week the majority leader said he was disappointed that we were not moving to the Ex-Im Bank and to postal reform and to cybersecurity, all of which he said are urgent national issues the citizens of the United States expect our Senate to deal with. The Republican leader said that, on our side, we are ready to deal with all three, and the Republican leader offered to join the majority leader in dealing with the Ex-Im Bank, with a few relevant amendments. That might be a pretty good way to begin our process of getting the Senate back to doing what the Senate is supposed to do, which is to bring up important pieces of legislation, allow Senators on both sides to offer their amendments, speak on them, and then vote on them. It is easier to do if the amendments are relevant to the legislation that is being offered.
So we were looking forward this week to dealing with a postal reform bill, which needs to be dealt with. We have a several-billion-dollar debt for the post office, which has been a part of our lives ever since our country was founded, and we have competing pieces of legislation on the issue, with very good Senators on both sides of the aisle ready to discuss it. Yet, suddenly the majority leader changed his mind, which he has a right to do, and instead, he brought up legislation repealing six tax provisions for five oil companies--provisions that, for the most part, are tax provisions that are similar to those available to most other companies in America.
Why would the majority leader do that? Well, in the Senate it is not considered to be good form to inquire into the motivation of other Senators, and I won't do that, but I will read a paragraph or two from The National Journal this week that speculated on what might have happened this past Monday evening. I quote:
The Senate holds a procedural vote this evening on legislation sponsored by Senator Menendez of New Jersey that would repeal tax incentives for the country's biggest oil companies. It won't pass, but it will create a platform for Democrats to try to reclaim the debate on gas prices. Indeed, a memo circulated over the weekend by John Podesta, president of the liberal Center for American Progress, and Democratic pollster Geoff Garin, notes that the vote ``offers a huge opportunity for progressives to frame energy policy through the gas price debate.'' Democrats will use familiar tactics of linking high gas prices to Big Oil, and Big Oil to Republicans, with the aim of attacking GOP presidential candidates and of putting three vulnerable Republican Senators up for reelection--Scott Brown of Massachusetts, Richard Lugar of Indiana and Dean Heller of Nevada--in tough spots.
That is the end of the speculation from the National Journal.
Now, maybe that was the reason the majority leader decided to bring this up, but clearly we are spending a whole week on a political exercise. If this is true--that it is being brought up to frame an issue to put Republican Senators who may be running for reelection in a difficult spot--well, then the Republicans must not think so because we all voted to bring it up. So instead of doing cybersecurity or postal reform, we are spending a whole week on something we all know is not going to pass and is a misuse of the time of the Senate. It would be much better if we were using the time on those other issues.
But as long as we are discussing lowering gasoline and fuel prices, I have a suggestion to make. Here is a plan to lower fuel prices: Double energy research. And here is a way to pay for it without adding to the Federal debt: Stop wasteful, long-term subsidies that are exclusively or mostly for both Big Oil and Big Wind.
Look at shale gas. The Senator from Oklahoma was talking about shale gas, which is being produced thanks to new technology found through energy research. This is a remarkable development in our country. But, as Daniel Yergin, the leading expert on energy, reports in his new book ``The Quest,'' the innovation on this began over 20 years ago, some of it from the private sector, some from government funding. Basically we found a way to find natural gas and oil through a process called hydraulic fracking. It is possible all around the world. I was in Australia in January, and they are doing it and selling it to China. The remarkable difference for the United States is not just that we suddenly have a lot more natural gas but that it is cheap gasoline. Instead of being $15 a unit, which it was when we passed the last Energy bill in 2005, it is $2 a unit or $3 a unit.
More than that, while Australians are selling their gas to China and paying the world price at home for their own natural gas, in the United States it appears likely we will be able to buy our gas at a U.S. price rather than a world price. What does that mean? That means that natural gas in Europe and in Asia is going to be worth four to five times what natural gas is here. So chemical companies that were thinking about moving overseas 5 years ago in order to be able to buy cheap natural gas for their feedstock, their raw materials, are staying here, expanding here, thinking about moving back. Older people who need to heat and cool their homes can use natural gas at a cheaper price. Manufacturing companies that are adding up the costs to make a decision on whether to put a plant in Mexico or some other place in the United States can put cheap energy in there with the natural gas. For the foreseeable future, it appears that natural gas in Europe and Asia is going to be four or five times what it is in the United States, giving us a tremendous advantage.
So energy research, both in the government and in the private sector, has given the United States the advantage that, if truth be told, has been our advantage ever since World War II. The principal reason we have produced 25 percent of all the money in the world is because of the innovation, technology, and research that have come since World War II, and it is hard to think of an important advance in biological or physical sciences without support from government research. So shale gas is one example of that.
So shale gas is one example of that. Here is another example: I drive an all-electric Nissan LEAF and pay about $3 for the electricity to travel 100 miles--better than spending an equivalent $20 on gasoline. Researchers at battery maker Envia have invented a way to double the density of lithium ion batteries, hastening the arrival of the $20,000 electric cars that travel 300 miles per charge. That research is permitting us, in the case of shale gas, to find more American energy and in the case of electric batteries, to use less of it.
That is why I argue that the United States should launch a series of mini Manhattan Projects with the same focus and determination of the original World War II Manhattan Project, this time with the goal of finding more energy and finding ways to use less of it.
The United States has a resource no other country has--dozens of major research universities and 17 national laboratories that can advance research on cheaper solar, better batteries, recapturing carbon from coal plants, biofuels from crops we don't eat, better ways to dispose of nuclear fuel, offshore winds, green buildings, and even fusion. To pay for doubling the $5 billion the United States now spends on energy research, Congress should end current tax breaks that are exclusively or mostly for both Big Oil and Big Wind and of every $3 saved, use $1 for more research and $2 to reduce the Federal debt.
For all we hear about Big Oil--and we hear a lot about it--you may be surprised to learn that special tax breaks for Big Wind are even greater. During the 5 years between 2009 and 2013, Federal taxpayer subsidies for wind power developers equaled $14 billion, according to the Joint Committee on Taxation and the U.S. Department of Treasury.
Here, I am only counting the production tax credit and the cash grants that the 2009 stimulus law offered to wind developers in lieu of the tax credit. An analysis of that stimulus cash grant program, which this legislation offered here would extend, found that 64 percent of the 50 highest dollar grants awarded--or about $2.7 billion in subsidies--went to projects that had begun construction before the stimulus measures started. Steve Ellis, vice president of Taxpayers for Common Sense, told Greenwire:
It's essentially funding economic activity that would have occurred. So it's just a pure subsidy.
It sounds like, in the President's budget, Big Oil receives multiple tax subsidies that are exclusively for Big Oil. Doing away with them, they say, would save about $4.7 billion next year or about $22 billion to $24 billion over 5 years. So far, it sounds as though Big Oil with $22 billion is bigger with its subsidies than Big Wind with only $14 billion. But here is the catch: Many of these subsidies the President is attacking oil companies for receiving are regular tax provisions that are the same or similar to tax provisions that are available to hundreds, even thousands of companies in America. For example, Xerox, Microsoft, and Caterpillar all benefit from tax provisions such as the manufacturing tax credit, amortization or depreciation of used equipment that the President is counting as Big Oil subsidies. And of course wind energy companies also benefit from many of these same provisions, but the production tax credit that benefits mostly wind is in addition to the regular Tax Code provisions that benefit many companies. So the only way to make a fair comparison is to look at subsidies that mostly benefit only oil or mostly benefit only wind, and by that measure, Big Wind gets more tax breaks than Big Oil.
So the bill proposed by the Senator from New Jersey that is limited to just five big oil companies is limited to them even though many of the tax breaks they receive are the same or similar to tax breaks many other companies receive. This bill also extends many tax breaks, including the wind production tax credit and the 1603 grant program for renewable energy, which mostly benefits wind.
Two weeks ago, during the debate on the Transportation bill, the Senate wisely refused to extend the 20-year-old temporary production tax credit which mostly benefits wind. That was the correct decision. We should allow this tax provision to expire. Congress made a much more difficult decision last year to allow the ethanol tax credit to expire, and we should hold our ground and do the same thing for the wind production tax credit.
There are three reasons Big Wind subsidies should go the way of the $5 billion annual ethanol subsidy. First, we can't afford it. The Federal Government borrows 40 cents of every dollar we spend.
It can't justify such a subsidy, especially for what the U.S. Energy Secretary calls a mature technology. According to a 2008 Energy Information Agency report, Big Wind received in subsidies 25 times as much per megawatt hour as all other forms of electricity production combined.
Second, wind turbines produce a relatively puny amount of unreliable, expensive energy. Wind produces about 2.3 percent of all of our electricity. A better alternative is clean natural gas. An even better alternative is cleaner nuclear power. Nuclear power reactors power our Navy and produce 70 percent of our pollution-free electricity. Using windmills to power a country that uses one-fourth of the world's electricity would be the energy equivalent of going to war in sailboats.
The Tennessee Valley Authority has erected 18 massive wind turbines on 3,300-foot Buffalo Mountain outside Knoxville. Other than deface the landscape and waste ratepayer dollars, the turbines have done little. The wind there blows 19 percent of the time, usually at night when we don't need it, and its unused electricity production cannot be stored.
Finally, there is the question of whether, in the name of saving the environment, wind turbines are destroying the environment. These are not your grandma's windmills. They are taller than the Statue of Liberty. Their blades are as long as a football field, and their blinking lights can be seen for 20 miles. In Nashville, Vanderbilt and the Metro water system is about to erect a small wind turbine as tall as the Parthenon replica we have in Nashville. It would take 1.1 million of these eyesores to equal the production of TVA's new Watts Bar 2 nuclear reactor. Building that many turbines would cost 15 times the cost of the nuclear reactor, and you would still need the nuclear plant for when the wind doesn't blow.
When wind advocate T. Boone Pickens was asked whether he would put turbines on his Texas ranch, he answered, ``No. They're ugly.''
Birds must think of turbines as Cuisinarts in the sky. Eagle killing has become so commonplace that the U.S. Department of the Interior has set up a process to grant licenses for eagle takings, sort of a hunting license. A new documentary, ``Windfall,'' chronicles the despair of upstate New York residents debating whether to build giant turbines in their town.
So I ask the question: If wind has all these drawbacks, is a mature technology, and receives subsidies greater than any other form of energy per unit of actual energy produced, why are we subsidizing it with billions of dollars and why are we not including it in this debate? Why are we talking about Big Oil subsidies and not Big Wind subsidies?
Our energy policies should be, first, to double the $5 billion Federal energy research budget we now have and focus it on new forms of cheap, clean, reliable energy. I am talking about the 500-mile battery for electric cars; commercial uses of carbon captured from coal plants; solar power installed at less than $1 per watt; or offshore wind turbines. That would be research.
Second, we should strictly limit a handful of jumpstart research and development projects to take new technologies from the R&D phase to the commercial phase. I am thinking here of projects such as ARPA E, modeled after the defense department's DARPA agency that led to the Internet, to the stealth, and to other remarkable technologies; or the 5-year program for small modular nuclear reactors; or incentives for the first 200,000 electric vehicles purchased in America. These are a strictly limited number of jumpstart R&D projects.
Third, we should end wasteful, long-term, special tax breaks, such as those for Big Oil and those for Big Wind. I am talking about the tax breaks that are exclusively mostly for Big Oil and Big Wind and not similar to what other industries receive. These savings from those subsidies should be used to double clean energy research and to reduce our Federal debt.
But that is not what this bill does. This bill ends subsidies for five companies that many other companies receive, and it extends subsidies for a few companies that other industries don't get.
This debate isn't even about an energy plan, which is what we should be debating when gas is around $4 a gallon right now.
Here is a very specific plan: Increase energy research--double it--to find more American oil and more American natural gas and more American alternative forms of energy, and increase energy research to find ways to use less of that energy. I have highlighted the best ways to use less, and I have highlighted a way to pay for it.
I thank the President and I yield the floor.
The Senator from Iowa.
Mr. President, a couple weeks ago, and just now my colleague, the Senator from Tennessee, has been speaking on the Senate floor in opposition to the wind energy production tax credit.
Obviously, I have great respect for Senator Alexander. A person who has been in the Cabinet, a person who has been Governor of their State, a person who has been president of a university, and probably a lot of other important positions, can't help but be respected as a very important Senator and a very knowledgeable Senator. While I differ with him greatly on this issue, I will continue to respect him.
The greatness of this body allows for debate and disagreeing points of view to be heard. I disagree strongly with my colleague. It might be natural for me to do that because I have championed the wind energy tax credit as a way to provide a level playing field for a very clean renewable resource.
As a result, wind energy has become more efficient and cost effective. The cost of wind energy has declined by 90 percent since the 1980s. Wind has accounted for 35 percent of all new American electric generation in the last 5 years. Wind already provides 20 percent of the electric generation in my State of Iowa. It supports as many as 5,000 good-paying jobs in our State.
As a result of the tax incentive, the wind energy has actually created new manufacturing jobs in the United States. Today, 60 percent of the wind turbines' value is now produced in the United States, compared with 25 percent 6 years ago. There are now 400 facilities building wind components in 43 States. That is why a bill in the House of Representatives to extend the wind energy production tax credit has 80 cosponsors, including 18 Republicans.
If we fail to extend the incentive, thousands of jobs will be lost in the wind manufacturing industry. Unemployment remains high at 8.3 percent. Why would Congress exacerbate the unemployment in our country by failing to extend this successful incentive?
The Senator from Tennessee has criticized wind turbines because he believes they are ugly and they kill birds. Well, I happen to find them majestic and awe-inspiring on the landscape.
With regard to bill-kill accusations, the Senator's claims were evaluated by Politifact, a fact-checking organization. They concluded that the estimates of birds killed by wind turbines vary widely and that there is no consensus. They do point out that the 400,000-bird estimate used by Senator Alexander is the conclusion of just one person. It is not an official U.S. Fish and Wildlife estimate. In fact, the U.S. Fish and Wildlife cites figures that are, at most, half that, if not less by much.
By comparison, 976 million birds die annually from collisions with buildings. Collisions with high-tension lines kill between 130 million and 1 billion birds. Cars kill 80 million birds each year.
The Senator from Tennessee referred many times to the wind project built in his State by the Tennessee Valley Authority. They constructed a 29-megawatt wind farm at Buffalo Mountain at a cost of $60 million. But it only generates 6 megawatts, because it generates electricity only 19 percent of the time. The Senator criticized it as being inefficient, wasteful, and ill-advised. The TVA apparently characterizes it as a failed experiment. He blames the Federal incentive for this failed wind project. The blame is totally misplaced. I think the blame should go to the taxpayer-subsidized TVA which put windmills where there was very little wind.
We do agree that the modification made to the renewable energy incentives in the stimulus bill of 2009, specifically the creation of the 1603 cash grant program, is in fact bad policy and should not be extended. However, the production tax credit, which I first authored in 1992, provides the incentive only for electricity that is actually produced. Under the production tax credit, there is no tax benefit simply for placing the turbine in the ground. Electricity must be produced in order to get the credit.
The Senator from Tennessee went on to say that the tax incentive has encouraged developers to build wind projects in places with insufficient wind resources. The TVA project is the only one I am aware of that was built with no prospects of generating electricity. For-profit utilities have to look out for the bottom line. They are not going to make an investment if it doesn't make economic sense. A nonprofit such as TVA can fritter away money, which is what they apparently did in this wind energy project.
The Senator from Tennessee might spend a bit of time criticizing the leaders of the TVA over their poor decision to build this wind project in the first place. I am not aware of a policy forcing them to develop wind. There is no mandate that they build a wind farm there in the State of Tennessee.
Most intelligent businesses determine whether an investment makes common sense. The Tennessee Valley Authority obviously failed in that regard in relationship to this wind project. The Senator from Tennessee might use his time getting to the bottom of this leadership failure and squandered resources by the Tennessee Valley Authority.
I am also glad that he raised the issue of the Tennessee Valley Authority. Much of the criticism aimed at the wind production tax credit is that it is costly, was meant to be temporary, and that it provides a small benefit at great cost. Those same accusations could clearly be aimed at the Tennessee Valley Authority. Regardless of one's opinion of the TVA, there is no doubt--it is a big government program subsidized by all Americans that benefits just a few.
The TVA was created in 1933 to provide flood control, navigation services, and electrical power in the Tennessee Valley region. For more than 60 years, Congress appropriated funds to cover losses by the Tennessee Valley Authority.
A 2009 article published by Jim Powell of the Cato Institute noted that a study estimated the annual cost of capital subsidies exceeded $1.2 billion, including taxes that the Tennessee Valley Authority was able to avoid.
In 1997, the Heritage Foundation issued a report entitled ``Five Good Reasons to Force the TVA into Mandatory Retirement.'' This report stated:
Throughout its history, the TVA has benefited from generous subsidies, tax breaks, and regulatory exemptions that allow it to keep its power rates lower than the national averages. Yet, despite its protected geographic monopoly, substantial indirect subsidies totalling roughly $1.2 billion each year, sweeping, across-the-board regulatory exemptions, the TVA has managed to amass a debt of well over $27 billion and a disturbing record of waste, mismanagement, and chronic cost overruns.
The private nonprofit group Citizens Against Government Waste has suggested selling the TVA's electric power assets and privatizing its nonpower functions. In their 2011 list of ``Prime Cuts,'' they argued this move would save taxpayers $16.2 billion over 5 years.
Even the Congressional Budget Office listed the TVA in its March 2011 report on spending and revenue options to reduce the national debt and the annual deficit. When the Federal Government is borrowing 40 cents of every dollar we spend, perhaps the time has come to review an entity that benefits 3 percent of the population at a cost of over $1.2 billion annually. And I use that 40 cents the Federal Government is borrowing of every dollar we spend just as the Senator from Tennessee a few minutes ago used that very same figure as a rationale for eliminating certain expenditures. In this particular case, I apply it to the Congressional Budget Office recommendation of selling TVA.
Rather than blaming the tax incentives for an ill-conceived wind project, I think a review of the management and taxpayer subsidy of TVA would be more appropriate. On many occasions, the Senator from Tennessee has argued that the incentives should be repealed and the savings used to double the Federal energy research budget and to support development of new nuclear.
First, I support research efforts to develop clean energy, but I do not support imposing a tax hike on one energy industry so we can spend billions through our Federal bureaucracy. This idea is nothing more than a tax increase to pay for further Washington spending. It is this kind of activity that helped create the fiscal mess our country is in right now.
Second, I strongly support nuclear energy. In fact, I believe there are four critical elements to a comprehensive energy policy. They are drilling for domestic oil and gas, promoting renewable and alternative energy, supporting conservation and, of course, fourth, nuclear energy.
Nuclear is an emission-free resource. It certainly should play a key role in providing our Nation and economy with renewable emission-free energy. However, this discussion of wind energy versus nuclear energy should be an intellectually honest debate. The fact is, nuclear energy in the United States would not exist today--would not even be here today--without significant government support over 60 years, and development of new nuclear in the United States is unlikely to happen without even greater government intervention and subsidies.
An analysis done by the Christian Science Monitor concluded that the nuclear power industry in the United States receives about $9 billion annually in subsidies. They state that the subsidies stem from things such as Federal decommissioning, waste management policy, and research and development in the Nation's National Laboratories.
The Union of Concerned Scientists published a document in February of last year entitled ``Nuclear Power: Still Not Viable without Subsidies.'' They contend that the 50-year-old nuclear industry has benefited from 30 subsidies. The Price-Anderson insurance liability policy was enacted in 1957 as a temporary measure for an infant industry. It was recently extended until the year 2025.
The Cato Institute published an article, June 2003, entitled ``No Corporate Welfare for Nuclear Power.''
That report states:
Despite extensive and continued government assistance-- including more than $66 billion in research and development alone--no nuclear powerplant has been ordered and built in the United States since 1973.
But it goes further.
The decline of nuclear power is the result of several factors: the Three Mile Island disaster heightened public safety fears and citizen opposition to the siting of grants in their neighborhood grew. But nuclear power was ultimately rejected by investors because it simply does not make economic sense. In truth, nuclear power has never made economic sense and exists purely as a creature of government.
A more recent piece by the Cato Institute cites an economist who believes existing nuclear power subsidies are equal to one-third or more of the value of the power produced, and that they face a negative 49-percent tax rate.
There are only two new nuclear plants on the drawing board in the United States today. Both are recipients of loan guaranties provided by the Department of Energy. One is an $8.3 billion loan guaranty, and the other is $2 billion. When the Loan Guaranty Program was first created by Congress, the Congressional Budget Office estimated that ``the risk of default on such loan guaranties to be very high--well above 50 percent.'' This is the same program that backed Solyndra.
Congress originally set aside $18.5 billion for loan guaranties for nuclear. President Obama has requested tripling that amount to $54.5 billion. It is estimated that this $54 billion would help construct 12 new nuclear plants. That is about $4.5 billion each.
Congress created a production tax credit for new nuclear in the year
They are also advocating that the production tax credit be extended to the year 2025--that is right; they are seeking to extend for another 13 years a temporary tax incentive.
Taxpayers for Common Sense, in an article published just last week, concluded:
The U.S. cannot afford to shoulder the high price tag and long term fiscal risk. If the industry cannot figure out a way to manage its long term risks, the taxpayer should not step in. This is especially true when the nation is staring into a $15 trillion chasm of debt. After more than 50 years of subsidies and support, it's well past time for the nuclear industry to stand on its own two feet.
I do not raise these points to undermine our nuclear industry. I am not urging my colleagues to end the entire big nuclear gravy train at this time. I support that form of energy as one component of a comprehensive energy program. I support a real, ``all-of-the-above'' approach to energy security. But a fair comparison of Federal support for wind and nuclear needs to be made. That is the point of my remarks at this time.
I say to the Senator from Tennessee, as he just spoke and as he spoke a couple of weeks ago, it is intellectually dishonest to criticize wind incentives while at the same time ignoring those subsidies for nuclear energy. The Senator from Tennessee referred to a Wall Street Journal editorial that criticized the wind energy incentive. It called into question whether wind energy could survive a market-based system.
I will eagerly await an editorial in the Wall Street Journal--which, by the way, will never appear--calling for the gravy train for big nuclear to end after nearly 60 years of Federal subsidies with no market-based timetable on the horizon.
I yield the floor. I suggest the absence of a quorum.
The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. President, I ask unanimous consent the order for the quorum call be rescinded.
Without objection, it is so ordered.
Mr. President, I ask unanimous consent the Senate proceed to executive session at 4:30 p.m. today and that all other provisions of the previous consent remain in effect, and that the previous order regarding the division of time on the motion to proceed to S. 2230 be modified to reflect this consent.
Without objection, it is so ordered.
For the information of Senators, the two votes originally scheduled to begin at 6 p.m. will now begin at 5:30 p.m.
I ask unanimous consent to speak in morning business.
Without objection, it is so ordered.
Mr. President, right outside this Chamber, across the street, is a huge gathering. It is the third day in succession that people from all across America have gathered before the Supreme Court. They have different points of view. They express those points of view in various ways--with signs, chants, music, a variety of others--costumes that are worn to express their points of view.
Let me first salute the fact that it is part of America. It is protected, and no one is going to be arrested for expressing themselves, whether they are for or against health care reform. We take it for granted, and we should not because in some countries around the world it is an exception rather than a rule. In America, it is who we are. We should celebrate even when we disagree.
But let me say a word about what is going on inside the building across the street. They are considering the health care reform bill that was passed by the Congress and signed by President Obama. Some have tried to characterize it as ObamaCare. For the longest time that was the biggest applause line at Republican Presidential rallies, after candidate after candidate stood up and said: I will repeal ObamaCare.
Let me speak to the issue which I think is guiding the discussion across the street and give perhaps a perspective on it that is not often stated on this floor. Earlier this morning several of my colleagues on the Republican side who voted against health care reform came to the Senate floor to express their opposition to the notion of a mandate. Here is what the mandate is about.
Currently, in America, there are millions of people who have no health insurance. Some of them by choice--young people think they are invincible; they will not buy it. Some people cannot afford it. But the fact is, even these uninsured people get sick.
When they get sick or are the victims of trauma--automobile accidents, diagnosed with a disease--they don't stay at home and wait for death, they go to a hospital. When they arrive at that hospital they are treated--emergency rooms, regular treatment--and then the bills are sent their way. Without health insurance many of them cannot pay the bills.
A little over a year and a half ago I went in for one night, overnight surgery in Chicago--the first time I was ever in a hospital since I was born. Everything worked perfectly. The ending was great. I couldn't ask for a better result. The total bill, start to finish, was
Lucky for me, I am a Senator. I have the Federal Employees Health Benefits Program. It paid for almost everything. What if I had no insurance? They would have sent me the bill. Perhaps I could have come up with the money to pay for it, but some people cannot. What happens then?
The hospitals and doctors then take these bills and say: Well, so-and-so didn't pay their bill. We are going to charge someone else who is paying more. Mr. President, 63 percent of the medical care given to uninsured people in America is not paid for, 63 percent. It is shifted, that financial responsibility is shifted to those who do pay, those who are under government insurance programs and private insurance programs. What it means is for those of us in private insurance programs, we pay $1,000 more a year--$80-plus a month--to pay off the bills of those who are uninsured. That is the subsidy which insured people pay to cover the unpaid medical expenses of the uninsured. That is the starting point.
Until we reach the point where everyone is under the tent of insurance, this will continue. Uninsured people will get sick, and those who buy insurance will pay for them. That is cost shifting. It happens every single day in America.
The health care reform bill said we have to have health insurance. It is a mandate. But we know some people cannot afford it. If someone is poor, in the lower income category, we will enroll them in Medicaid so they will have at least Medicaid insurance to pay their medical bills.
At Memorial Medical Center in my hometown of Springfield, IL, Ed Curtis, who runs that hospital, said to me: Senator, if you just did that alone, if we could just get Medicaid payment for everyone who walked through the door, we would be fine. What hurts us are those who pay nothing because they can't. That is a problem. The bill we passed went on to say that if you are working, you will never have to pay more than 8 percent of your income for health insurance premiums. People would rather pay nothing, but 8 percent is a lot more manageable than people who are facing 10, 20, 30 percent of their pay going to health insurance premiums. So we basically have created a requirement to have health insurance but with a helping hand to reach that goal.
So what about the people who already have health insurance? They are untouched by this mandate. They just continue on and let life continue. You have made your choice; you have health insurance; it doesn't affect you.
What I find interesting are so many Senators--primarily from the other side of the aisle--who come to this floor condemning government-administered health insurance. ``Get the government out of health insurance.'' You hear that speech over and over. What they don't tell you is their own health insurance policies are administered by the Federal Government.
Mr. President, as Members of the Senate, you and I are eligible--so too are Members of the House--to be part of the Federal Employees Health Benefits Program. This was created decades ago to provide health insurance for people working for the Federal Government. Eight million people--employees and their families--are covered by this plan. What you have learned as a new Senator is that they come to us once a year and say: Durbin, you and your wife are eligible for the Federal Employees Health Benefits Program, and here are the private insurance plans you can choose from that are enrolled in our program.
We have nine choices in Illinois, so Loretta and I looked through and picked the plan we liked. We pay part of my income as premium, and the government pays the remainder. It is a government-administered plan, and each year we have an open enrollment to change if we wish. This has been wildly successful and popular. Private insurance companies fight to enroll in it so they can cover Federal employees, and we have good, reliable, affordable insurance, insurance that we can change if we don't like it.
A few years back, one of my employees needed a specific foot surgery. It turned out her health insurance didn't cover it, but she knew the open enrollment period was coming. She waited and enrolled in a plan that covered it. What a luxury. People across America would applaud if they thought they could get that treatment, government-administered health care for Members of Congress.
I have waited patiently now throughout this entire debate for the first Republican Senator who condemns government-administered health care to come to the well of the Senate and announce they are dropping their own health insurance as a matter of principle. No way.
I think people across America are entitled to health insurance that is at least as good as the health insurance Members of Congress have today. I don't think that is a radical idea, and, in fact, the health care reform bill we passed said that Members of Congress will be part of the same insurance exchanges we are creating all across America. That is only fair. I am hoping it offers the same plans as the Federal Employees Health Benefits Program, but I am sure it will offer me a choice, and with that choice I am sure my family will get good coverage.
When I hear the debates across the street suggesting that the notion of requiring people to buy health insurance is somehow un-American or unconstitutional, I struggle with that concept. We know what we are trying to do--reduce the overall cost of health care for America. We also know that the requirement of having health insurance is not that much different from the requirement of paying into Social Security if you go to work in America. If you want another parallel, in my State you have to have insurance to drive an automobile. They don't want you getting involved in an accident without insurance. For one thing, it is not fair to the other driver, let alone the person who might be injured in the car. These are mandates under the law relative to insurance--one for retirement, the other for liability--that are built into the law, and we don't have people marching in the streets over them.
We have to come to a point in this country where we reach a balance, and the balance suggests personal responsibility. It means that the millions of Americans who should have and could have health insurance with the help of a tax break, perhaps with the help of Medicaid, should have that insurance so that the burden of their medical bills does not fall on every other family and every other insured person. Those who are screaming for freedom ought to stop and think a second. Those who are accepting the personal responsibility of having health insurance are exercising their right to protect their family, and they should have the peace of mind of knowing that their neighbor who didn't accept his personal responsibility will not pass his medical bills on to them. I think that is the basis of what we are debating across the street.
I would like to raise a point, if I can, about a bill that was pending this week. It was offered by Senator Menendez of New Jersey to end Federal subsidies to oil companies.
Last Sunday in Chicago, I went by a BP gas station on the Congress Expressway, and I saw it for the first time--more than $5 a gallon for gas, $5.03 a gallon for ultimate gasoline at the BP station. For reasons I cannot explain, Illinois has the highest gasoline prices in America. We have refineries all over our State. I don't get it. But I know it is a recurring problem and a recurring theme. Every spring we go through it. The runup to Easter is the time for every politician in America to dust off the press release expressing outrage at our oil companies.
They do it to us every year. They come up with convenient excuses: You know, it is all about uncertainty in the Middle East. How long have they been playing that card. No, it is about the change of seasons. You see, when we go from winter to spring, we just are not ready for it. Really? You weren't ready for the change of seasons? There was a refinery accident in some town in the Midwest 400 miles away, and it has really disrupted everything. Well, I don't buy it, and I haven't over the years.
What they are doing is what they can do: they run up the price of this commodity because we have no choice. Until we have a choice in the vehicles we drive or in the sources of energy we use, we are kind of stuck with oil companies. But we are not stuck with paying a $4 billion annual subsidy to these oil companies. That is what the tax break we give to oil companies comes to. Senator Menendez of New Jersey has said: Stop it. Take the $4 billion and invest it in renewable, sustainable energy research, and take the rest and reduce the deficit. The five biggest oil companies had profits of over $137 billion last year. They won't miss $4 billion. And we should be ashamed that we continue to shove subsidies at them when they are so profitable.
What is happening when it comes to oil exploration? It is a legitimate question. We are now at an 8-year high in terms of the oil production in America. Starting under President Bush and continuing under President Obama, we have more oil and gas rigs in place working today in the United States than in the rest of the world combined. So those who say that if we just drilled a little more, gasoline prices would come down, you have to look at that. We are increasing the supply, and yet the prices go up.
Secondly, we also understand that when it comes to these gasoline prices, even when the supply goes up, the prices are going up. It defies the law of physics. Demand is down because of the recession, supply is up, and prices are going up. That violates principles of economics 101 that I studied in college.
What Senator Menendez is suggesting is a move in the right direction, not just because we cannot justify the subsidies to oil companies anymore but because we should be investing in new ideas that will move us forward in the right direction.
This morning we had a meeting that I think the Presiding Officer attended, and the CEO of Chrysler Corporation was there. He is an interesting and curious man, Sergio Marchionne. I don't think he owns a suit and tie. He never wears one. He is the CEO of a major corporation, and he wears kind of a black-knit sweater. I see him all the time. But you have to give him credit; he took Chrysler Corporation when it was on the ropes struggling and near extinction and turned it around completely. They are looking forward to more than doubling the automobiles they are going to sell. Those who thought that the automobile bailout, as they called it, was a bad idea should listen to this man.
I can tell him the story of Belvidere, IL, northern Illinois, Boone county. We have a Chrysler production facility that Marchionne said to me is one of our best. They have gone on to a second shift, and he said that by the end of the year, they will go to a third shift in producing cars for America. He gets it. And when you talk to him about fuel efficiency and fuel economy in cars, they are moving in that direction. They are committed to it.
The President brokered an agreement with the major auto companies that they would make more fuel-efficient vehicles. That is good news for consumers. We need to be subsidizing research into better, more efficient forms of energy instead of subsidizing oil companies with recordbreaking profits.
Would the Senator yield for a moment?
I thank the assistant majority leader. I heard his comments about Chrysler and what happened with the CEO when he was in town today talking to some of our colleagues. And one of the untold stories of the auto rescue is not just that in my State 800,000 people work directly or indirectly for the auto industry. Most of those are part of the supply chain that makes products and sells those products--a large number of them--that are assembled in Lordstown or Toledo or different places around Ohio. But one of the untold stories is that not only were these jobs and these companies saved from going bankrupt--and who knows what would have happened to a State such as mine where much of the State is pretty dependent on the auto industry--but in the case of the Toledo Jeep plant, prior to the auto rescue only 50 percent of the components that went into the Jeep Wrangler were made in the United States. After the President and Vice President negotiated with the auto industry and the auto task force and the House and Senate weighed in, now 75 percent of the components that go into the Jeep Wrangler are made in the United States. So we are not just seeing the 5,000 jobs in Lordstown making the Chevy Cruze or the jobs at the Honda assembly plants in Marysville, OH, or Toledo, or Ford, we are also seeing that a lot more of the components are made in the United States. And these are often union jobs, often not union jobs, but they are almost all good-paying jobs that give people a ticket to the middle-class. It helps them to buy a house, send their son or daughter to school, or buy a car. Without it, my State would probably be in a depression.
I say to the Senator from Ohio, that is a good point and one we ought to make over and over because there is no question that the downturn in the recession forced the management of these auto companies and the workers to step back and take a look at the challenges they faced.
Mr. Marchionne, the CEO of Chrysler, said this morning: We are where we are today because our UAW workers--union workers--sat down at the table and said, we have to agree on a future together or we are sunk. They agreed on that future, and he said: Now my workforce is excited and productive.
The Senator just made the point--more businesses are coming back from overseas. It is a great success story.
I have been to the plant where they make the engine for the Chevy Cruze, I have been to the plant where they make the bumper for some of these cars, and I have been to the assembly plants, and the workers are excited. And the workers sacrificed a lot, as the auto industry--all kinds of people took a hit with the managed bankruptcy of those two companies. But we have seen not just the auto industry, but for 12 years, from 1997 to 2009, in my State and I assume in Illinois too and all over the country we lost manufacturing jobs. Almost every month for the last 2 years we have gained manufacturing jobs.
The auto rescue is not the only reason we have seen things turn around. We also have a productive workforce and we are training workers better. I have 55 college presidents I just met with whom I bring to Washington for a conference--it is the fifth year in a row. Senator Portman, Congresswoman Sutton, and others have met with them. They are more focused than ever on manufacturing, working to train those people so they can go into manufacturing. The students they are educating are in a whole lot of fields, but one of them is focusing on how to train people to do this high-end, much more technical, complicated manufacturing than a generation ago, and it is starting to work.
It is not lost on the American people. There was a different point of view when President Obama said: I never wanted to own an automobile company; that is not why I ran for President. But he realized we faced an economic crisis. If he had not stepped in for Chrysler and General Motors at the moment he did, they might not exist today.
Mr. President, if my colleague would yield one more time, it wouldn't have just been Chrysler and General Motors that would have faltered. Honda--a foreign-owned company that has made a huge and positive presence in the Columbus area, in northwest Columbus and in Marysville--and Ford, obviously one of the Big Three but one that didn't ask for the rescue--both those companies wanted us to do the rescue because they knew if we didn't, their whole supply chain would begin to fall apart too. So this mattered not just for Chrysler and GM, saving them, and now that they are putting tens of thousands of people all over the country back to work, it mattered for the entire industry, including the foreign companies that have invested and hired a lot of American workers.
I thank the Senator from Illinois.
Mr. President, I would just add--and this is not lost on most Americans--there are some political figures who said publicly they should have just gone bankrupt and gone out of business. I think the President made the right decision. Today, Mr. Marchionne made it clear Chrysler has paid back everything. They have paid it all back. So now, he said, if we need to borrow money, we are not going to come knock on the door of Secretary Geithner of the Treasury Department; we can go to banks. We are a thriving corporation. We are doing well. He said: I have nothing but good news for you, which is great to hear in a recovering economy.
It was a bet made by the President on behalf of hundreds of thousands of workers and companies and it paid off. What it says is that if we stand behind the basic pillars of the American economy--and manufacturing is one of those; maybe the largest pillar that holds up this great economy--we can prosper and succeed. Jobs being brought back from Mexico and overseas into the United States, I am glad I have lived to see it because I can remember when they were headed in the other direction.
Companies that were almost given up on by some politicians turned out, such as GM and Chrysler, to be prosperous today, building new cars and thinking about the new demands of our economy and our future, tells me we can put this together.
So when we hear those who say what we need to continue to do is to shovel subsidies at oil companies that earn $137 billion a year in profits, let's take that money--we do have a deficit--take that money, invest it in something that will create jobs and take the balance and reduce the deficit. I don't think that is a bad outcome. There are lots of good things we can invest in. The Department of Energy is talking about battery technology. That is still going to be our challenge for the future--finding ways to create power and save power for when it is needed. I think we need to incentivize that kind of research in the future as well.
At this point, I will yield the floor and suggest the absence of a quorum.
The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
The Senator from Indiana.
Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.
Without objection, it is so ordered.
Mr. President, right now there is an issue on the mind of every Hoosier and most Americans, if not every American, and that issue is the high price of gas. Over the past few months, gas prices have risen higher and higher each week. Currently, across the Nation, the average price is $3.90. In Indiana, it is even higher. It is close to $4, and in many parts of our State it is well over $4 per gallon.
These prices obviously have a significant economic impact on our country. It causes budgets to get tighter, planned vacations to either be canceled or shortened; families, farmers, and businesses across the State of Indiana are having to rethink their budgets for the year and make tough financial decisions. This is all at a time when unemployment continues to remain high. Americans are struggling to make ends meet. Rising gas and energy costs only further weaken an already struggling economy.
It is true supply and demand of gasoline and oil prices are subject to global considerations. There are concerns that the supply is not meeting the demand. That triggers some clear increase in prices of crude oil. There is also the concern that conflict in the Middle East could potentially shut down lanes of commerce that bring oil out of the Middle East to the rest of the world. So we need to acknowledge there are these spikes.
However, this is a trend that has been going up and up and up. We have seen gas prices more than double in the last 3 years and, clearly, now $3.50, $3.75 is not something that looks like a spike; it is starting to look like the normal average and that certainly has real serious economic implications for this country.
There is some good news. The good news is, Americans are increasingly understanding and learning we can be a major player in producing energy. We are discovering abundant amounts of energy in this country we didn't think we had. A lot of that is right in our backyard. That is the good news. The bad news is, we have had an administration that for 3 years has been promoting policies that work against the goal of achieving more energy independence. That is the problem with the bill we are currently discussing because that bill raises gasoline prices by raising taxes on oil production. Why in the world would we want to raise prices on gasoline at a time when America's economy is struggling to come out of recession? At a time when gasoline prices are rising through the supply-and-demand issues we have had, why in the world would we want to do anything that would further increase the cost of gas at the pump?
The current Tax Code provides a number of targeted tax incentives for the energy sector. It is important to note the vast majority of those subsidies go to the so-called new wave of energy production, the renewables, and only a small minority of those subsidies and credits go to producing the oil and gas that drives this economy. So eliminating only those benefits that go to the production of needed oil and gas that benefits our economy while at the same time extending the subsidies and credits and support for renewables is not the direction we need to go. This is not about producing more energy; it is about targeting just one sector of our energy industry, which is oil--a fossil fuel energy source that is absolutely essential to our economy. If we want to eliminate oil and gas subsidies, we ought to put all subsidies for energy on the table.
Senator Wyden and I have coauthored a comprehensive tax reform bill, and in that bill we look at the idea proposed and suggested not only by the Bowles-Simpson Commission but by others who have looked at this and who have said we need to get on a level playing field. We are willing to make adjustments even in our own bill, if it is necessary, so we can lower tax rates on American companies and on the American people by getting to a more level playing field.
We have all heard the President say we are doing all of the above or we need to do all of the above in terms of an energy approach, and unblock American resources and put us back in the driver's seat of energy production. The reality is, the administration's policies over the last 3 years have been directed at only subsidizing a certain portion of the ``all of the above.''
Let me give a couple examples. President Obama has reduced the number of new offshore leases in half over the next 5 years. In terms of current exploration and production, 97 percent of offshore areas are out of bounds, cannot drill, cannot explore.
Most recently, the President rejected the Keystone XL Pipeline, a privately--privately, not publicly--funded project that would create 20,000 jobs and deliver more than 800,000 barrels of oil per day from Canada.
Then, just last week, the President says we are going to improve the pipeline from Cushing, Oklahoma down to Port Arthur, Texas but rejected doing anything to bring the pipeline from the source of the oil down to the point in Oklahoma where it would continue on. That is essentially akin to saying: We have goods we need to move. They are essential. They are essential to the running of this country and the economy and we need to ship those from Chicago to New Orleans, but we are only going to build the road from Little Rock to New Orleans, and we will not have any other way of transporting it to get it to that particular point. So it makes no sense whatsoever.
We cannot have it both ways. We cannot tell the American people we support an ``all of the above'' energy plan and then undercut attempts to produce domestic energy sources. We cannot say we want to reduce America's dependence on foreign oil and then block major parts of the Keystone Pipeline or tell political leaders in Brazil we want the United States to be one of their best customers. We cannot tell Americans we are focused on job creation and then impose one unrealistic regulation after another that increase energy costs, jeopardize jobs, and shut down plants across the country. But that is exactly what this administration is doing.
The Obama energy plan is to pay lip service to American energy production at the same time while enacting policies that limit our ability to tap into domestic resources.
Our country faces an energy crisis. We have high unemployment. We have troops putting themselves on the frontline to protect oil in the Middle East. But we can change that. We can unlock American energy resources. We can put Americans back to work in doing so. We can protect our troops and reduce our dependence on Middle East oil. We have the ability, we have the innovation, and we have now, we know, the resources to lead the world in energy production. It is time for the President to support American energy production. That is the real ``all of the above'' energy plan.
I yield the floor and suggest the absence of a quorum.
The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.
Without objection, it is so ordered.
Mr. President, I ask unanimous consent that I be allowed to speak as in morning business.
Without objection, it is so ordered.
Mr. President, I wish to discuss what everybody else is discussing these days--I say discussing or maybe even cussing--and that is gas prices and, more to the point, some unfortunate finger-pointing that I think is going on in regards to our energy policies and why we see the increase we are seeing at the gas pump and the role of speculation in regards to the futures market and the energy environment we are now living in that is so challenging.
I have the privilege of being the ranking member of the Agriculture Committee, which has jurisdiction over the Commodity Futures Trading Commission, and I feel it is very important to address some of the claims being made by a number of my friends--some across the aisle--this week with regard to speculation in the commodities market.
From the rural farmer to the urban commuter, Americans everywhere are, obviously, deeply impacted by high gas prices. That is the biggest and most often negative sign we see when we drive anywhere: Whoops, we see all of a sudden that the gas price has shot up 10 cents. Unfortunately, I do not think posturing or finger-pointing does anything to minimize the pain felt at the pumps.
Similar to the annual planting and harvesting seasons in Kansas, a yearly occurrence happens in Washington, DC, for certain Members of Congress to blame the commodity markets every time a particular commodity reaches an uncomfortable price level. If we see a big price jump, we, obviously, want to blame the commodity markets. It is easy to do. We saw it in the 1970s when we had gas lines during the Carter administration, the 1980s, the 1990s. It is the same old talking points. We could have the speech in the file. Just pull out the file, cross out the date, and start making these points.
But let me talk about some economic facts, if I might. The populist rhetoric fails to acknowledge that everyone's money is the same color in the futures market. For every buyer, there is a seller and for every seller there is a buyer.
The historical problem for futures markets and the hedgers who use them is, oftentimes, particularly in the deferred month contracts, there is not the liquidity or an adequate number of market participants to take the other side of a trade to allow the hedgers to manage their deferred price risk.
Market participants who actually provide this liquidity provide a valuable tool that allows producers and consumers of products to lock in their inventories well in advance, which can lead to lower costs to producers and certainly better prices for consumers.
If long speculation and the liquidity it provides is artificially driven from the market, the potential short-term advantage of lower prices could lead to shortages in production, higher demand, and even higher prices for both energy and agricultural commodities.
My point in this dissertation on futures markets 101 is to emphasize that speculation is not manipulation. Speculation is trading to make a profit from anticipated price changes--either higher or lower. Manipulation, on the other hand, is intentionally acting to cause artificial price changes.
As explained by the Commodity Futures Trading Commission, the independent regulatory arbiter of excessive speculation, speculation is excessive when it causes any sudden or unreasonable fluctuations or unwarranted changes in the price of a commodity.
In fact, the CFTC currently has the authority to regulate against price manipulation. So if we want to go to the people who are in charge to make sure there is not any manipulation, we already have the regulatory body and they are doing exactly that and it has had this authority since its creation by Congress in 1974.
Furthermore, we have experts at the clearinghouses, at the National Futures Association, and at the CFTC whose job it is to watch these markets minute by minute, hour by hour, day by day, to assure everybody that the discovery of prices between buyers and sellers is occurring openly and transparently.
Yet when prices just so happen to move above what somebody in this body might think is reasonable or an uncomfortable level, we have a tendency to blame the participants in the market rather than the multitude of factors and economic variables these market participants react to each minute the market is trading.
Let's examine some of these real factors that are affecting our energy prices.
First off, there is tremendous increased demand outside the United States; particularly, in Asia, China. It has caused the price of oil to rise rather dramatically. Even with the increased production in Canada, the United States, and Brazil, declines in the North Sea, Mexico, Sudan, and Libya have impacted the global supply.
Second, our U.S. refining capacity has decreased as a result of stricter environmental regulations, where they get their crude from. Both have lowered the supply of gasoline enough to prop up prices. We see reports in the press every day about one refinery making it big and other refineries are having a lot of difficulty.
Third, restricted domestic energy development on Federal lands has disrupted our futures projections.
Fourth, fear over Iran's nuclear weapons ambitions is leading to increased demand for gasoline, as people try to stock up in anticipation of any supply disruption that would be based on the possibility of a conflict in the Middle East.
Lastly, I would simply point out that blaming speculators ignores the inflationary aspects of the monetary policies of several central banks around the globe. It does not take a speculator to know that when the U.S. Treasury prints more money, it drives down the value of the dollar and drives up the price of raw materials and commodities, such as oil, priced in dollars. Yet despite these facts, we have too many who keep seeking a solution for a problem that simply isn't there.
What have the regulatory bodies found in their investigations as we look for somebody to blame? There have already been studies and investigations into whether excessive speculation is manipulation and they are manipulating prices. Let's take a look at what they found.
Last year, a Federal Trade Commission report on manipulation of gas prices determined that none of the complaints investigated violated any FTC rules.
A similar study by the CFTC stated that its preliminary analysis ``does not support the proposition that speculative activity has systematically driven changes in oil prices.''
Last but not least, the administration's own Financial Fraud Enforcement Task Force set out to investigate illegal speculation in the energy markets. To date, it has found none.
The effects of high gas prices on our economic growth and on each individual business and family are certainly well understood. We should be finding effective solutions to fix a failed Federal energy policy rather than trying to place the blame where it does not exist.
These solutions do not stop at increased domestic oil and gas production. They include implementation of workable environmental regulations. Unfortunately, the multitude of regulations under this administration is anything but workable.
They are like a Katrina flooding virtually every part of the economic sector. That is all I hear about when I go home to Kansas. There are a lot of things that are on people's minds, but regulation is No. 1, and I don't care what sector of the economy we are talking about. There is a very real fear in my State that the new clean air regulations we are hearing about targeting coal-fired powerplants could disrupt our power grid. In a State that relies on coal for 75 percent of our power, this is simply unacceptable.
Yes, let's continue moving toward cleaner forms of energy--certainly we want to do that--but in a way that will not compromise the ability for Kansans or any citizen of any State to access affordable energy. This includes impending Federal regulations on hydraulic fracturing, which will continue to play a huge role in my State's energy economy.
In closing, on a larger topic of domestic energy companies, I think it is unfortunate for elected officials to come to the floor--or for that matter make a speech anywhere--and single out specific industries or private U.S. citizens, for that matter, that employ millions of Americans and blame them for our energy woes. I think we are better than that.
Let's remember that attacking their profits is an easy target. It is not going to hurt the few top-level executives at these companies, but it will hurt middle-income Americans and retirees who make up over 90 percent of the ownership of so-called Big Oil or so-called big anything, and rely on their IRAs, pension funds, and mutual funds for their very livelihood. These are not privately held companies, so let's remember who actually owns the companies. It is our constituents, that is who it is.
I yield the floor and suggest the absence of a quorum.
The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.
Without objection, it is so ordered.
Mr. President, I ask unanimous consent that the time under the control of the majority be divided as follows: Mr. Schumer for 10 minutes, Mr. Cardin for 10 minutes, Mr. Sanders for 10 minutes, Mr. Levin for 10 minutes, Mr. Reed of Rhode Island for 10 minutes, and Mr. Merkley for 10 minutes.
Without objection, it is so ordered.
Mr. President, I rise today in support of the legislation authored by my good friend from New Jersey, Senator Menendez. But before I do, I want to call attention to the highway bill and its holdup by our colleagues in the House.
Once again, we are facing the specter of an unnecessary shutdown caused by intransigence in the House Republican caucus, and time is ticking away. Should we reach the March 31 deadline without passing a bill, States' contract authority for construction projects will cease, and 2.9 million jobs will be put at grave risk.
It doesn't have to be this way. Speaker Boehner has once again been painted into a corner by the extreme wing of his caucus, which is committed to blocking a responsible highway bill at every turn. It has become clear Speaker Boehner has run out of options. He has tried to pass a highly partisan House-drafted highway bill, and that failed. He has tried to pass a 90-day extension on Monday, and that failed. He then tried to pass a 60-day extension on Tuesday, and that failed as well. Now we have learned the House will not vote on any type of extension today either.
Time is running out. Speaker Boehner simply cannot pass a transportation bill of any length without Democratic votes, and it is time he accepts that.
Fortunately, Mr. President, there is an easy way out that already has a stamp of approval from some of the most conservative Republicans in Congress. The House could pass the Senate bill. If Speaker Boehner put the Senate bill on the floor, there is virtually no question it would pass by a large majority.
You know, this is beginning to look a bit like a replay of the payroll tax cut episode. Just like then, the Senate passed a bipartisan bill by an overwhelming majority. Just like then, the Speaker originally said he would act based on the Senate compromise, but then went back on what he said. Just like then, with the deadline looming, the Speaker is unable to pass an alternative measure and is resorting to asking the Senate for a conference.
We all know how the payroll tax cut saga ended. Republicans started turning on the Speaker and asking him to pass the Senate bill. Now that is happening here too. Earlier this week, three House Republicans from mainstream Republican districts--Congress Members Dold, Biggert, and Bass--joined the growing calls for Speaker Boehner to put the Senate's 2-year highway bill on the floor. These are major cracks in the dam, and we believe it is the start of a trend.
Earlier today my friend from New York, Pete King, also said he would support the Senate bill if the Speaker put it to a vote. Now, that doesn't come as a surprise, as Congressman King is a strong fighter of New York's transportation needs, including mass transit, which are protected in the Senate bill.
The Senate bill is about two dozen publicly declared Republicans away from having the votes to pass. We believe we have those two dozen Republicans in the House and more. They may not be publicly declared, but they are there. The Senate's 2-year bill can be a lifeboat for Speaker Boehner. He should take it before it is too late.
As we speak about the highway bill over in the House, in the Senate Democrats are hard at work taking on Senator Menendez's fine legislation. He was prescient to focus on this idea years ago, and I am glad this bill has come to the floor. I look forward to a debate on the issue.
In the last election, voters gave those of us who have the privilege of serving in this Chamber two distinct mandates. They told us to do two things at once: First, and perhaps foremost, make the economy grow. Create good-paying jobs. Make sure the American dream burns brightly--the dream that says to the average middle-class family: The odds are pretty good if you work hard you will be doing better 10 years from now than you are doing today, and the odds are very good your kids will do better than you.
For that dream, which has burned so brightly in this country for hundreds of years, the candle began to flicker a little in this decade. Median income actually went down even before the recession, which meant even if people had a job--and we know there are millions out of work despite the fact they look hard for jobs--their income was declining. Buying power was declining for the average person. That is difficult. Even people who do have work have a difficult time when they sit down at that dinner table Friday night after dinner trying to figure out how they are going to pay the bills. The costs and needs keep going up, and even when they have a job the income doesn't seem to keep up.
So we first think of the people we have met who are struggling because they don't have jobs, and then we look at the people lucky enough to have jobs who are still having a difficult time making ends meet. We know this Congress must focus like a laser on jobs, the economy, and the middle class. So this is one obligation voters sent to us, and it is a justified one. Secondly, they said, in no uncertain terms, to rein in that Federal deficit--rein it in. They are right.
So that brings us to today, where we are fighting to grow the economy through projects such as those in the highway bill, which will bring good-paying jobs to communities across the country, and we try to rein in this out-of-control deficit by passing the Big Oil Tax Subsidies Act. It would be hard enough to accomplish one of these goals, but we are trying to do both.
We can do it because this choice is simple. It is obvious that at this time, when there are so many needs, that giving oil companies the kind of tax breaks we do makes no sense at all. Getting rid of these corporate subsidies to Big Oil is a no-brainer. At the time these subsidies were passed decades ago, oil was $17 a barrel and there was a worry there wouldn't be enough production. Maybe it made sense in those days to give oil companies an incentive to explore and produce. But with oil hovering at $100 a barrel, and Big Oil reaping record profits, this outdated subsidy makes no sense. Yet it remains on the books, amazingly enough.
It defies logic for this government to spend billions of dollars in tax giveaways to Big Oil; for taxpayers to give dollars out of their pockets every year when they are struggling and Big Oil is making record profits. Believe me, the free market gives the oil companies enough of an incentive to produce. When oil is $100 a barrel, they do not need an extra subsidy from the government to produce. They are going to produce every bit of oil they can. They make huge profits, so they do not need a financial nudge from Washington. At the same time, middle-class Americans get hit with a double whammy. They are paying $70 or more to fill up their gas tanks and then some of their hard-earned dollars are being used to line Big Oil's pockets.
Economists estimate the typical family will pay almost $1,000 more on gasoline this year than last year. But families in my home State of New York and across the country are still struggling to make ends meet. As the economy slowly recovers, they cannot afford to get gouged at the pump.
With billions of dollars worth of tax subsidies, and gas prices at near record highs, it is no wonder the top five oil companies are on track for another record-breaking year. These companies are not only the most profitable businesses in the United States, they are among the most profitable in the world. In the past decade, they took home $1 trillion--not $1 billion, $1 trillion--in profits.
Now, there is nothing wrong with profits in and of themselves. In America, we celebrate success. We want the private sector to survive and thrive. But at a time when the government is looking to tighten its belt, and we are grappling with painful cuts because we have the dual goal of growing the middle class and also reducing the deficit, it boggles the mind that we would continue to subsidize such a lavish industry.
I have watched my colleagues on the other side of the aisle stand idly by while the type of funding that helps our middle class is threatened. Now they are going to choose these subsidies to Big Oil over money to help kids pay for college, over cancer research, over helping our veterans, over keeping our highways and transit systems reliable. Hardly any American would agree with that. Hardly any American--Democrat, Republican, Liberal, Moderate, Conservative--from the Northeast, South, or West would agree.
Try to wrap your head around that. Big Oil is reporting record profits, gas prices are at an all-time high, and we, the American taxpayers, are still subsidizing the oil industry. We don't need the imagination of Lewis Carroll to come up with a more ridiculous scenario. That is why I strongly support and am proud to cosponsor Senator Menendez's Repeal Big Oil Tax Subsidies Act.
If our Republican colleagues are serious about deficit reduction, the Menendez bill is the chance to show it. There is no good reason not to support this sensible legislation.
In fact, Speaker Boehner himself has said as much. Let's not forget, he was in favor of repealing oil subsidies before he was against it.
So the bottom line is this: At a time of sky-high oil prices, it is unfathomable to continue to pad the profits of oil companies with taxpayer-funded subsidies. The time to repeal these giveaways is now.
Mr. President, I yield the floor and I suggest the absence of a quorum.
The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.
Without objection, it is so ordered.
Mr. President, I want to concur with Senator Schumer about his comments on the passage of Senator Menendez's legislation, S. 2204. This legislation is very important for America's energy needs, and I urge my colleagues to allow us to take up this legislation and let's act on it and let's move it to the other body.
There is one commodity just about everyone knows the price of: a gallon of gasoline. People will have a rough idea what a gallon of milk or a dozens eggs or a loaf of bread costs, but they will know to the penny what a gallon of gasoline costs. The price is rising, and people are understandably upset. They are upset because it costs more to fill up at the pump. But they are also upset because crude oil and gasoline price increases affect the price of every other commodity--including milk, eggs, and bread--that has to be transported from where it is produced to where it is consumed. Petroleum is a feedstock used in the production, not just transportation, of so many critical products, including fertilizer.
According to the U.S. Energy Information Administration, EIA, the retail price of a gallon of regular unleaded gasoline was 27 cents higher for the week ending March 5, 2012 than it was a year ago. EIA reports that vehicle fueling costs for the average U.S. household will be about $238 higher in 2012 than 2011.
According to EIA, the price of gasoline has increased dramatically every year--in 2011, higher than 2010, and 2012 is projected to be higher than 2011. This price increase is occurring despite the fact that the United States has stepped up its crude oil production considerably over the past 4 years by 1.3 million barrels per day. Production is at an 8-year high. The United States is the third largest producer of oil, behind the Saudis and Russia, and domestic oil consumption is at a 15-year low. Americans are driving 35 billion fewer miles today than they did in 2010.
If we were producing more and consuming less, then why are prices going up? Supply and demand would tell us that they should be going down. The answer is straightforward: Crude oil and all of the products derived from it, including gasoline, are fungible commodities traded on world markets. Increasing global demand for these commodities is putting a relentless upward pressure on prices.
Growing demand for oil in developing countries has reshaped the global market. Developing nations now consume 47 percent of the world's oil. In 1970, it was 25 percent. The number of cars in the world exceeded 1 billion for the first time in 2010, with one-half of the global growth occurring in China. Beijing adds 1,500 new cars every day.
Another reason for price increases is market uncertainty over crude oil supplies. Much of the world's crude oil is produced in the Middle East and North Africa, regions plagued with turmoil. Right now, the United States accounts for about 9 to 11 percent of the world's crude oil production. This is despite the fact that we have less than 2 percent of the world's total proven oil reserves. We have 2 percent of the world's reserves and we are producing 9 to 11 percent. We are, in fact, drilling here and drilling now, with more oil rigs in operation than the rest of the world combined, according to the Baker-Hughes rig count.
According to economist Steve Baker at the Center for Economic and Policy Research, even if U.S. production could be increased by one-third overnight, that would increase world supply by 3 percent which would lower the price of oil by 7 to 8 percent. As Baker notes:
This is not trivial, but it is not the difference between $2 a gallon gas and $4 a gallon gas.
T. Boone Pickens said it best:
I've been an oil man all my life, but this is one emergency we can't drill our way out of.
A recent Associated Press fact check analysis found that there is no correlation between domestic oil production and the price at the pump. I am for reasonable oil production. We need as much as we can get in a reasonable manner. As reported in the Washington Post of March 28:
A statistical analysis of 36 years of monthly, inflation- adjusted gasoline prices and U.S. domestic oil production by The Associated Press shows no statistical correlation between how much oil comes out of U.S. wells and the price at the pump . . . More oil production in the United States does not mean consistently lower prices at the pump . . . U.S. oil production is back to the same level it was on March 2003, when gas cost $2.10 a gallon when adjusted for inflation. But that's not what prices are now. That's because oil is a global commodity and U.S. production has only a tiny influence on supply . . . Factors far beyond the control of a nation or a president dictate the price of gasoline.
The United States is incapable of having a significant impact on world crude oil and gasoline prices from the supply side of the equation, but domestic oil production does play an important role in bolstering our energy and economic security. We should produce where we can, in a safe and environmentally sensitive manner.
While increasing domestic production and decreasing domestic demand may not be lowering world prices, it does have a significant effect on imports. Our dependence on foreign oil is at its lowest level in 16 years. As a share of total consumption, oil imports declined from nearly 60 percent in 2005 to 45 percent last year, the lowest level since 1995. And nearly one-half of our imports come from the Western Hemisphere nations such as Canada and Mexico, while the Persian Gulf countries account for only 18 percent of our net imports.
The biggest impact the United States could have on oil and gasoline prices is not on the supply side, it is on the demand side. We account for close to 25 percent of the world's petroleum consumption, even though we account for less than 5 percent of the world's population. The best way to continue reducing our demand for crude oil and gasoline would be to: Promote fuel efficiency with higher CAFE standards. We have made progress. We are doing better. We know we can do better than our current standards; Replace conventional fleet fuels with alternative fuels such as propane, natural gas, and biofuels. That will help us consume less oil; Electrify transportation, focusing on hybrid and plug-in electric technologies. Here you get jobs in the United States helping our economy as well as helping our energy security; Boosting transit ridership by increasing funding for the Federal Transit Administration. People don't like to be stuck in traffic jams. Let's have a modern transit system that can help move our people;
Eliminating the tax expenditures that benefit Big Oil could generate over $20 billion over the next 10 years. This is the bill we are talking about, S. 2204, the Menendez bill. It takes the revenues we are giving to the oil industry and uses them to help pay for these green energy measures. This makes a lot of sense. It will hardly be noticed by the big five oil companies--BP, Chevron, ConocoPhillips, ExxonMobil, or Shell. They made record profits in 2011, $137 billion. I talked about $20 billion over 10 years. They made $137 billion in 1 year. That was up 75 percent from 2010. From 2001 through the last year, Big Oil has made more than $1 trillion in profits. Every penny increase in the pump increases their profit by another $200 million. So as we are suffering with prices going up, the big oil companies are making more and we are still giving them the subsidies, where we could be using those subsidies to help America develop alternative energy sources.
Big Oil has been getting big subsidies for 100 years. It is time to use that money for developing alternatives to oil. That is the best and most sustainable way to address the high cost of gasoline at the pump. S. 2204 will help us bring down the cost at the pump. It is good for our economy, good for our environment, and good for our national security.
Mr. President, I yield the floor.
The Senator from Vermont is recognized for 10 minutes.
Mr. President, the skyrocketing price of gasoline is clearly causing tremendous hardship to American families all across this country, to small businesses to truckers to airlines and, in fact, to the entire economy. We are trying to claw our way out of this horrendous recession and the high price of oil and gas is not helping us.
I come from a rural State, and it is a State where people often drive 30, 40, 50 miles to work and back home again. Many of these workers make $10, $12, $14 an hour and when the price of gas goes up to $4 a gallon, this is money that is coming right out of their paychecks and it is money they can ill afford to pay. Many of them have seen stagnation in wages, and these high gas prices are doing their families severe harm.
Further, I think the American people understand that our good friends at the oil companies continue to do phenomenally well in terms of the profits they are making. In the last decade, the major oil companies in this country have earned $1 trillion in profits while gas prices have soared.
The Repeal Big Oil Tax Subsidies Act we are debating today is a step in the right direction. This legislation would repeal more than $20 billion in tax breaks to the big five oil companies, and use roughly half of this money to extend renewable energy tax credits and use the other half for deficit reduction. Over the past decades, our friends at ExxonMobil, among others, have seen more profits in ExxonMobil in a given year than any other corporation in the history of the world. Meanwhile, many of the largest oil companies over the years have paid little or no Federal income taxes. Let me give you an example.
In 2009, ExxonMobil--again, which has made more profit on a given year than any corporation in history. In 2009, ExxonMobil made $19 billion in profits while receiving a $156 million refund check from the IRS. How is that? A pretty good deal? It made $19 billion in profits, did not pay any Federal income taxes, and yet received a $156 million refund check from the IRS. Chevron received a $19 million refund from the IRS after it made $10 billion in profits in 2009. Not a bad deal. In 2009, Valero Energy, the 25th largest company in America, with $68 billion in sales, received a $157 million tax refund from the IRS. ConocoPhillips, the fifth largest oil company in the United States, made $16 billion in profits from 2007 to 2009 but received $451 million in tax breaks through the oil and gas manufacturing deduction.
At a time when the American people are getting ripped off at the gas pump, the last thing we need to be doing is giving big oil companies massive tax breaks which only add to our deficit and national debt crisis.
In my view, we have to do more than simply end these outrageous tax breaks that Big Oil has enjoyed. In my view, we must also end excessive oil speculation on the oil futures market. There has been a major debate over the last several years as to whether spikes in oil prices were caused entirely by the fundamentals of supply and demand or whether excessive speculation in the oil futures market is playing a major role.
That debate is over. That debate should be put to rest. Let's simply look at the facts. When we were in elementary school and in high school we learned what supply and demand is all about. When supply is high and demand is low, prices go down. When demand is high and supply is low, prices go up. The reality is, today the supply of oil and gasoline is higher right now than it was 3 years ago when the national average price for a gallon of gas was just $1.96 a gallon--more supply than 3 years ago when gas was $1.96 a gallon.
In terms of demand, the demand for oil in the United States today is at its lowest level since 1997. Internationally, during the last quarter of 2011, world oil supply exceeded demand by nearly 2 to 1, while at the same time crude oil prices increased by over 12 percent.
Let me recapitulate: Supply is high, demand is low. Yet oil prices are going through the roof. What is happening? There is a growing consensus within the business community, among economists, among people who study this issue, that the reason oil prices are soaring is excessive speculation on the oil futures market. That is the cause.
ExxonMobil, Goldman Sachs, the IMF, the St. Louis Federal Reserve, the Saudi Arabian Government, the American Trucking Association, Delta Airlines, the Petroleum Marketers Association of America, the Consumer Federation of America--all of these groups are involved in one way or another in studying oil prices. That is what they do because many of them are affected by high oil prices. Others of them are consumer groups studying the impact of high oil prices. All of them have agreed that excessive oil speculation significantly increases oil and gas prices. That is the conclusion more and more observers are making.
Interestingly enough, Goldman Sachs, perhaps the largest Wall Street speculator on the oil futures market, recently came out with a report indicating that excessive oil speculation is costing Americans 56 cents a gallon at the pump. This is the conclusion of Goldman Sachs, perhaps the largest speculator on the oil futures market.
I personally believe and many others believe that number is low, but it is important to understand we now have a major speculator telling us what excessive speculation is doing, in terms of gas prices.
Last year the CEO of ExxonMobil--not one of my best friends, not a company I particularly trust--ExxonMobil's President last year testified at a Senate hearing that excessive speculation on the oil futures market contributed as much as 40 percent to the cost of a barrel of oil. In fact, Bloomberg News reported on March 26, 2012, that:
According to Commodity Futures Trading Commission data, bets on rising gasoline prices advanced for 11 weeks through
Gary Gensler, the chairman of the CFTC, has stated publicly that oil speculators now control over 80 percent of the energy futures market, a figure that has more than doubled over the last decade. In other words, the vast majority of oil on the oil futures market is not controlled by people who actually use the product. It is not controlled by airlines or trucking companies or fuel dealers--people who actually use the product. But over 80 percent of the oil futures market is controlled by speculators whose only function in life is to make as much profit as they can by buying and selling oil futures.
Let me list a few of the oil speculators and how much oil they were trading on June 30, 2008, when the price of oil was over $140 a barrel and gas prices were over $4 a gallon. On that day, Goldman Sachs bought and sold over 863 million barrels of oil. Morgan Stanley bought and sold over 632 million barrels of oil. Bank of America bought and sold over 100 million barrels of oil. The only reason these companies were on the oil futures market was to make as much profit as possible. They do not use the end product.
We have to make sure the price of oil and gas is based on the fundamentals of supply and demand and not Wall Street greed. To correct this problem I have introduced S. 2222 with Senators Blumenthal, Feinstein, Tester, McCaskill, Klobuchar, Levin, Franken, Sherrod Brown, Cardin, Mikulski, Casey, Bill Nelson, Begich, and Pryor.
This legislation--which I have also filed as an amendment to this bill--requires the CFTC to use all of its authority, including its emergency powers, to eliminate excessive oil speculation.
I should point out this emergency directive in our bill is identical--I want my Republican colleagues to hear this--is identical to bipartisan legislation that overwhelmingly passed the House of Representatives in 2008 by a vote of 402 to 19, with significant large-scale Republican support.
The Dodd-Frank financial reform bill stipulated very clearly that the CFTC needed to eliminate, prevent, or diminish excessive oil speculation by January 17, 2011, 14 months ago. They have not done it. The CFTC has not obeyed the law, and it is time for Congress to tell them their breaking the law is not acceptable and what they have to do is, in fact, to defend the consumers of this country.
In my view, what this legislation would accomplish is immediately curbing the role of excessive speculation in any contract market within the jurisdiction and control of the Commodities Future Trading Commission on or through which energy futures are trading--that is what this amendment does. It also eliminates excessive speculation, price distortion, sudden or unreasonable fluctuations or unwarranted changes in prices or other unlawful activity that is causing major market disturbances that prevent the market from accurately reflecting the forces of supply and demand for energy commodities.
The bottom line is Congress has to tell the CFTC to obey the law. They have to use their emergency powers to end excessive oil speculation. When we do that, I believe we will see oil prices go down.
I ask for bipartisan support of my legislation and thank all the cosponsors who are already on the bill.
I yield the floor.
The Senator from Michigan.
Mr. President, first, let me thank Senator Sanders for his leadership in this area of excessive speculation. I am going to have a word to say about that in a few minutes. Before he leaves the floor, let me say he has taken a major role in trying to get the CFTC to carry out what the law requires that they do, which is to consider excessive speculation and to put a lid on it. They are authorized to do it without any doubt. That was our intention, and they should get about it.
The bill we are considering would end an egregious example of corporate welfare. Hopefully, we are going to be allowed to be on this bill and be able to defeat a filibuster and vote for cloture sometime, I understand, tomorrow.
At a time when some argue the Federal debt is so out of whack that we need to cut funding for programs to provide food to hungry children or health care to our seniors, surely we ought to be able to agree the most profitable corporations in the country no longer need these enormous subsidies, but here we are. Those oil and gas subsidies have not reduced the price of oil or gas; that is obvious.
The price of gas is complex. I have said many times before, and I will say it again now, the huge increase in speculation plays an important role in the price, the high price of gas. The Permanent Subcommittee on Investigations, which I chair, has spent years examining these issues, and the evidence is compelling and overwhelming that financial speculators have played a huge role in driving up gas prices at the same time supply and demand has not significantly changed.
To the extent supply and demand has changed, supply is up and demand is down. So if market forces were really in control, the price of gas would be going down, not up. Some estimate that as much as 50 cents on the price of every gallon of gas is the result of excessive speculation, and another huge portion of the price is simply the wide profit margin for the oil and gas companies.
I agree with my colleagues that we must do what we can to ensure that gas prices do not swing wildly and that they do not pull precious resources out of the all-too-tight budgets of American families. But I think we have to focus on some of the true causes for the rapid rise and the swings in gas prices and not hide behind unfounded assertions that taking away corporate welfare from an already incredibly profitable handful of companies will somehow or other drive up gas prices.
Study after study and expert after expert have told us that removing these subsidies will have no impact on those prices. For instance, Severin Borenstein, codirector of the University of California Berkeley's Center for the Study of Energy Markets, has said ``the incremental change in production that might result from changing oil subsidies will have no impact on . . . gasoline prices.''
The nonpartisan Congressional Research Service has concluded that removing these subsidies would not impact gas prices because ``prices are well in excess of costs and a small increase in taxes would be unlikely to reduce oil output.''
No, ending these subsidies is not going to impact the price of gas, but maintaining these subsidies does impact taxpayers. These subsidies take money from the vast majority of taxpayers to simply add to the already astronomical corporate profits of oil and gas companies. Just five companies last year reported a profit of $137 billion. Over the past 10 years, the profits of just these five companies have totaled nearly $1 trillion. That is trillion with a ``t.'' These astronomical numbers can only be thought of in connection with the only other number of that size, which is similar, and that is the Federal budget. Congress will soon enact deficit reduction of at least $1.2 trillion or our Nation and our economy will be facing sequestration, facing the slashing of programs that impact nearly every American. That $1.2 trillion in deficit reduction over the next decade is about the same amount as the expected profits for just five oil and gas companies. These companies, which are reporting record profits while paying record-low rates of taxes, should be paying their fair share to help get and keep our economy strong.
While some complain that the United States has such an egregiously high corporate tax rate that companies fail to invest here, the facts show just the opposite. Just a short time ago, the Congressional Budget Office released a report that corporations paid an effective tax rate of just 12.1 percent last year, which was the lowest percentage in decades. Corporations pay extremely low taxes in the United States, and those rates have been steadily declining. Corporate taxes now make up a record-low percentage of all Federal revenues.
The oil and gas subsidies should be cut, and the savings should be used to pay for our Nation's other priorities. That is why I introduced an amendment last year that would have cut just one of these oil and gas subsidies. By eliminating these unnecessary oil and gas incentives and adopting the bill before us, we would be able to preserve or reauthorize a series of other energy tax incentives and grant programs, some of which have expired and others are in danger of expiring, all of which would help promote American energy efficiency and self-sufficiency. Extending these provisions will help lower energy costs for businesses and families, would help diversify our energy strategy beyond oil, and would reduce the dependence on imported oil that undermines our economy and threatens our national security.
Among these important tax provisions is section 45, the production tax credit for electricity produced by wind and other renewable sources; the section 1603 program to encourage the installation of energy equipment; the section 48C advanced energy manufacturing credit that promotes American production of the items used in renewable energy production, such as wind turbines and advanced batteries; the cellulosic ethanol credit to encourage production of fuel through renewable feedstocks; and the tax credit for refueling infrastructure that helps to encourage installation of alternative-fuel infrastructure and electric charging stations in homes and in businesses.
These and other energy provisions, which are in our bill, are vital tools in our battle to reduce our dependence on foreign oil, to substitute alternatives for fossil fuel, and to promote and sustain domestic manufacturing. Energy is a huge cost for businesses in nearly every field. If we can improve energy efficiency, we can lower costs and increase competitiveness. Rest assured that our competitors around the globe are doing that, and we need to do the same or risk falling behind.
Energy efficiency is also vital to national security since our dependence on foreign oil from volatile regions of the globe is an enormous complication to our foreign policy. It leaves our economy vulnerable to actions by unfriendly nations such as Iran. The more we can loosen the grip imported fossil fuels have on our economy, the more prosperous and secure we will be.
Rarely is the choice as stark as it is before us. We can continue corporate welfare for the oil and gas industry, which does nothing but add to those companies' corporate profits and the Nation's deficit, or we can end these subsidies and push for the priorities that will help ensure our energy future and reduce our deficits.
I thank the Presiding Officer.
I yield the floor.
Mr. President, I rise to join many of my colleagues in support of the efforts to stop wasting taxpayer money subsidizing oil executives' huge profits. We need to end these wasteful handouts, reduce the deficit, and develop clean energy solutions.
While the oil industry is thriving, making $137 billion--that is billion with a ``b''--in profits last year, Rhode Islanders are paying nearly $3.90 per gallon at the pump. Working families are being are forced to cut back because of high gas prices. In turn, big oil companies should have their wasteful tax subsidies eliminated. We should be working to fuel the U.S. economy, not the oil cartels and big oil companies. That is why I am a proud cosponsor of the Repeal Big Oil Tax Subsidies Act, which would put a stop to these wasteful tax breaks and use the savings to invest in clean energy technologies that will create jobs, save money for middle-class families, and increase America's competitiveness in the global clean energy economy.
Addressing gas prices and reducing our dependence on oil requires a smart, balanced, and responsible national energy policy. There are no silver bullets, but there are both short-term and long-term steps we should take.
In the near term, we have to be ready to respond to geopolitical events by making it clear that we are prepared to release oil from the Strategic Petroleum Reserve if such a measure is necessary because of geopolitical developments.
We need to continue efforts to prevent excessive speculation and speculators from manipulating the market and needlessly inflating energy prices. And I have asked the Commodity Futures Trading Commission--effectively our cop on the beat--to do that and have sought to provide them with the tools and funding to achieve this objective.
We also need to continue investments in smart growth policies to promote mass transit in next-generation vehicles and alternative energy. That is why I have fought for things such as better fuel mileage for cars and smart investments in mass transit. Improved energy efficiency and developing clean energy technologies will help cut our oil addiction.
Working with President Obama, we successfully persuaded automakers to double the fuel efficiency of cars and light trucks. After staying the same for over 20 years, under the Obama administration the average fuel economy of vehicles will be 35.5 miles per gallon by 2016. And the administration has proposed to further increase the standards to 54.5 miles per gallon by 2025. Combined, by the year 2025, these standards would save 2.2 million barrels of oil a day and save consumers at the pump an estimated $8,000 over the lifetime of a vehicle. These new standards will reduce the impact of future price hikes by weaning us off oil.
In addition to protecting their unnecessary subsidies, the oil industry continues to push increased drilling as a solution to reducing gas prices. I support safe and responsible oil production, and the administration's efforts to decrease our reliance on foreign oil. U.S. domestic oil production has reached its highest level since 2003. The number of oil rigs in the United States has more than quadrupled in the last 3 years, and U.S. dependence on foreign oil is at its lowest level in 16 years. Indeed, net imports as a share of total consumption declined from nearly 60 percent in 2005 to 45 percent in 2011.
When oil companies tap into resources on Federal property, the taxpayers must be fairly compensated and assured it is done safely and responsibly. Therefore, the oil companies should pay their fair share of drilling royalties and inspection fees to make sure what they do is done right. As chairman of the Interior and Environment Subcommittee of the Appropriations Committee, I worked to secure an increase in the inspection fees for offshore drilling last year, and will push for the same for onshore drilling this year.
For all the sloganeering about domestic drilling, we know we can't drill our way out of this problem. Even the oil companies admit that the biggest factor in the price of gasoline is the cost of crude oil, which is set in the world market. It is not pegged to U.S. production. In fact, an Associated Press analysis of 36 years of Energy Information Administration data shows ``no statistical correlation''--their words--between domestic oil production and gas prices.
Again, we need a balanced, well-thought-out national energy policy, one that will help reduce our dependence on oil and the amount paid at the pump. What we should not be doing is continuing to give away billions in corporate welfare to Big Oil while middle-class families see their gas prices rise. It simply is not fair. The oil companies that soak up these subsidies are effectively charging taxpayers twice for the same gallon of gasoline.
Mr. President, middle-class families are struggling. Oil companies are not.
I urge my colleagues to repeal these oil subsidies, make clean energy investments in America, and take commonsense steps to get our fiscal house in order. I urge passage of this very important piece of legislation.
I yield the floor.
The Senator from Oregon.
Mr. President, I ask unanimous consent to speak for about 5 minutes.
Is there objection? Without objection, it is so ordered.
Mr. President, this is a tough time for Americans. We all know families are sitting around at their kitchen tables struggling to figure out how to make ends meet, but those tough times have not extended to the boardrooms of the five big oil companies.
In 2011 alone, those companies saw more than $100 billion in profits--a sum that is difficult to get your hands around. It is difficult to understand what $1 billion is, let alone $100 billion, not in revenue but in profits. Exxon is sitting on $8 billion that it has not reinvested. Shell is sitting on $13 billion cash in hand. The five largest companies together--BP, Exxon, Chevron, ConocoPhillips, and Shell--have cash resources of $59 billion and have made nearly $1 trillion in profits over the last decade.
Meanwhile, the American taxpayers are not only being forced to hand over larger and larger portions of their paychecks at the pump, they are also being asked to have a share of their taxes go to additional subsidies to these large companies. Let me restate that. When you go to the pump and pay $4 or more, the oil companies make a tremendous profit. There is nothing wrong with making a profit in America, but what seems wrong is that these same companies are then coming to these hallowed Halls and saying: We want a handout from the general fund.
Those companies know there are many other pressing needs in America. Indeed, there are many folks who are hungry across our Nation. There are many families who are hoping but cannot save enough money to send their kids to college. Many families who are pressed by the loss of our manufacturing jobs, our middle-class, living-wage jobs, who are providing for their families on service jobs are having a tough time meeting the mortgage.
Families are struggling, and certainly they would like to see this body say that we understand the challenges so many face. We understand that the cost of tuition for their children is way outpacing inflation, and they are worried about the possibility of their children not having the full opportunities that should be available within our society. They are worried about keeping their homes. They are worried about finding that next job if their current job goes away. But they are wondering why we aren't helping with those problems with these funds instead of giving these funds away to the oil companies. The only explanation they can come up with is that the oil companies are very powerful; they can come here and talk to this Chamber and say: You know, we just want more. It is more important for us to add to the billions we have in the bank than it is to have basic nutrition programs expanded in this country. It is more important for taxpayers to give us money to add to the money we have in the bank than to address the desperate infrastructure funds that are needed around our Nation. It is more important that they give us a handout rather than give a hand up to struggling families in this Nation.
Well, I disagree. I think it is more important to help our families. I think it is more important to help our children. I think it is more important to build our fiscal infrastructure for the economy and for the future. I think it is more important to build the infrastructure through education, the intellectual infrastructure of our Nation that provides both opportunities to individuals and opportunities and strength to our economy as a whole.
There are some who say these giveaways reduce the price of oil at the pump and reduce the price of gasoline. Nothing could be further from the truth. We all know what is driving the price of gasoline. Demand is down because people don't have enough to spend, supply is up, so it is certainly not supply and demand. But what we do have is a big increase in speculators. Speculators are going to the Commodity Futures Trading Commission, and they are making bets that because of the crisis in the Middle East, because of the issues with Iran, because of the concern about oil flowing out through the Strait of Hormuz, that others will also buy oil futures, so they will buy them, too, and they will make money on the way up, and the result is, for all of us, a higher price at the pump. So if we want to do something about oil prices, we take on the speculators. That is why in Dodd-Frank we gave the CFTC the ability to exclude speculators from that marketplace, to say they have to have positions, they have to have an end use for oil. But they haven't used that power. Maybe we need to pass a stronger bill to suppress the speculation, since the CFTC is not doing its job.
What we know for certain is that giving powerful oil companies the people's money to add to the money they are keeping in the bank, the billions they are sitting on, will not do one thing to drop the price of oil. Let's help American families and not the most powerful who have no need for these funds.
Mr. President, I suggest the absence of a quorum.
The clerk will call the roll.
The legislative clerk proceeded to call the roll.
The Senator from Mississippi.
Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.
Without objection, it is so ordered.
Mr. President, we continue to watch fuel costs skyrocket--shockingly so in the last 3 months--as the average price of a gallon of gasoline breaks records again and again for this time of year. Today, the national average, when I last checked, was $3.91 per gallon.
When President Obama took office, Americans paid $1.85 for a gallon of regular gasoline. Now they are paying more than twice that price, with analysts projecting even higher spikes on the horizon. Some are speculating gasoline prices could top $5 per gallon by summer. Now Senate Democrats propose raising taxes on gasoline production.
We hear a lot about an all-of-the-above energy approach, and that needs to be put into practice. This should include expanding access to America's critical resources. Instead, the President insists on flawed energy strategies such as using taxpayer money for high-risk projects such as Solyndra, while delaying drilling in the gulf.
The President has slowed the permitting process, he has blocked leases, and he has supported higher energy taxes and more regulations. His actions have come at the expense of valuable opportunities for greater domestic energy. The gains our energy producers have made are in spite of the President's policies, not because of them.
The de facto moratorium on drilling in the Gulf of Mexico made it clear that strengthening the country's energy security was not a White House priority. The plan the President proposed for offshore oil and gas leasing for the next 5 years would open less than 3 percent of offshore areas for production.
Then there was the rejection by the President of the Keystone XL Pipeline--the subject of an extensive environmental vetting process and a project which would guarantee nearby available oil from our largest trading partner. The President may talk about the need for oil and gas pipelines and even try to take credit for the lower part of the pipeline that did not need his approval, but there is no denying his administration is responsible for roadblocks standing in the way of a better national energy policy.
The 830,000 barrels per day the Keystone Pipeline would transport offers a 7-percent increase to current imports. Vetoing it keeps Americans vulnerable to spiking gas prices and the dangerous whims of energy providers from volatile regions of the world.
High fuel prices can have far-reaching economic effects. According to the Oil Price Information Service, Americans spent more on gasoline in 2011 than in any other year in the past three decades--some $481 billion. For the average household, about 8.4 percent of the family budget or $4,155 went toward filling up at the pump last year. Of course, it is more this year. This means consumers have less money to spend and invest in their local communities, ultimately hurting the economic growth we desperately need.
In 2008, then-Senator Obama said he would have preferred a gradual adjustment of gas prices. That same year, Energy Secretary-to-be Steven Chu told the Wall Street Journal: ``Somehow we have to figure out how to boost the price of gasoline to the levels of Europe.'' This is the President's choice for Energy Secretary, someone who wants our gasoline prices to be at the $8-per-gallon level they are experiencing in Europe. This mentality has not changed since 2008. Earlier this month, President Obama said the only solution was to start using less. That lowers the demand and prices come down, according to the President. He later asserted that ``how much oil we produce at home'' is ``not going to set the price of gas worldwide.'' Somehow, using less will lower the prices, according to the President, but producing more will not lower the prices. In other words, the President believes in only half the principle of supply and demand.
Indeed, basic economics tells us otherwise. It tells us that alleviating demand can lower prices but having a greater supply does that too. The argument the President is trying to make that domestic production is inconsequential does not add up. Not expanding production forces American wealth to go overseas because we have to buy our oil from overseas. As Charles Krauthammer recently wrote in the Washington Post:
Drill here and you stanch the hemorrhage. You keep those dollars within the United States economy.
That is exactly what we need to do in these troubling times.
According to the Institute for Energy Research, we have enough oil within our borders to supply our own fuel needs for 250 years. That is not Senator Wicker talking; that is not a Presidential candidate talking; that is the Institute for Energy Research--250 years we have in the United States. Yet they are being kept off-limits by the administration.
Now the administration wants an $85 billion energy tax hike. This new tax will not translate into cheaper gasoline, a fact my Democratic colleagues have, in fact, acknowledged. It will make it more expensive to produce, drive up imports, and hamper economic investment.
According to a study by the Congressional Research Service, higher energy taxes will increase gas prices and likely increase foreign dependence--exactly what we don't want to do. This would ultimately hurt average Americans who depend on affordable gas prices to get to work every day and businesses--small businesses--that need fuel to transport their goods and services. We have seen how the administration likes to use taxpayer money on high-risk bets such as Solyndra and algae. Instead of gambling on unproven ideas, we should be ensuring economic growth with policies that strengthen our energy capacity. We are blessed to live in a country with plentiful resources and we are far from maximizing America's energy potential.
I have filed amendment No. 1966 to this bill. The amendment would establish a production goal for the Obama administration's 5-year offshore oil and gas leasing plan. It calls for 3 million barrels of oil per day and 10 billion cubic feet of natural gas per day by the year 2027. Compared to today's levels, this increase in production would triple America's current offshore production and reduce foreign imports by nearly one-third. By setting these benchmarks for the output of oil and natural gas, we can make measurable progress toward energy independence.
So I would propound this parliamentary inquiry, Mr. President: If we were on the bill at this point, would it be in order for me to offer such an amendment, No. 1966, at this time?
If the pending question was S. 2204, it would take unanimous consent to offer an amendment to that measure because there is not an available amendment slot at this time.
I regret that. I hope we can negotiate on both sides of the aisle so amendments such as this can be offered.
To set benchmarks, we could use an additional 3 million barrels of oil per day and 10 billion additional cubic feet of natural gas per day to help us attack this very serious energy problem.
I would simply conclude by saying today's high gasoline prices confirm the urgency of pursuing better energy strategies as demand for oil continues to increase across the globe. Taking steps now is essential to meeting future needs and bringing relief at the pump.
Seeing no one who is seeking to speak--does the Senator seek to speak? If so, I yield the floor.
The Senator from North Dakota.
Mr. President, I request an opportunity to speak for up to 10 minutes on the pending energy legislation.
Without objection, it is so ordered.
Mr. President, I am here to offer a substitute amendment to the Menendez act, which is currently under consideration on the Senate floor. That is S. 2204. The substitute amendment I would like to offer is legislation I have authored along with Senator Lugar and also Senator Vitter. It is legislation that would approve construction of the Keystone XL Pipeline and authorize that that construction proceed. That authority is provided to Congress under the commerce clause of the Constitution. With gas prices now close to $4--and going higher--Congress needs to act.
President Obama has turned down the pipeline. He continues to block the Keystone XL Pipeline, and it is time for Congress to act on behalf of the American consumer. Every single American, every hard-working American, is feeling this pain at the pump.
The Keystone XL Pipeline would help us produce more energy supply for our country to help reduce the price of gasoline at the pump. It will help us create more jobs in this country. Close to 13 million Americans are now unemployed. It would help put more of those Americans back to work. Of course, it would help reduce our reliance on oil from the Middle East.
The first chart I have in the Chamber shows what is happening with gasoline prices in the United States. This is over the last 3-year period. This shows the price of gasoline was about $1.87 a gallon when President Obama took office 3 years ago. Today, the national average, I believe stated by AAA, is on the order of $3.91. So the price of gasoline during the Obama administration's tenure has more than doubled. It has more than doubled.
I think there is something like 8 or 9 States now where the average price of a gallon of gasoline is over $4. In places such as Chicago--the President's hometown--I believe the average price is on the order of $4.68. If we go right down to the corner here, right near the Capitol, I filled my car the other day. It cost me more than $100 to fill the tank, and I think the price was $4.39 a gallon.
So what is the solution offered in the Menendez legislation? What is the solution proposed by the Obama administration? What is the solution proposed in this bill we are considering right now on the Senate floor?
What that bill would do is raise taxes on energy companies. It would raise taxes on energy companies. Let's think about this. We are going to raise taxes on these energy companies, so we are going to increase their costs. When we add taxes, that means it not only raises their costs, which will create even higher costs at the pump for American consumers, but it also tends to restrict supply. If we want less of something, and if we want it to cost more, what do we do? We tax it. So this legislation does exactly the opposite of what will help the American consumers with the price of gasoline at the pump.
Instead, we need to increase supply. By providing more supply, we help create downward pressure on gasoline prices. That helps our hard-working Americans not only today but tomorrow as well. Let's talk about that.
Why are gas prices high? It is supply and demand. This is economics. This is about supply and demand. If we increase supply, we put downward pressure on prices. If we increase demand, we put upward pressure on prices. Global demand for oil is growing. We know that. Global demand is growing. So we need to increase the supply; otherwise, that growing demand continues to push gasoline prices higher.
As shown on this chart, here is the amount of crude oil we produce in the United States, along with our good friends in Canada today. That is shown in the first bar on this chart. We can see, it is just below 10 million barrels a day. That is where we are now. With the current policies the administration has in place, we will actually produce less supply in the future--less supply in the future.
Think about that. If gasoline prices are a function of supply and demand, it is not only the supply and demand of today, it is what people anticipate the supply and demand will be in the future. If we have growing global demand--which we know we have--and we have an administration that is constricting supply, then not only do we have an issue in terms of present supply and demand, but we have people going: Look, there is going to be less supply. We know there is going to be growing demand. That puts upward pressure on prices.
So the actions of the administration have a direct impact, a direct correlation with the price of gasoline at the pump. As I showed on the previous chart, under this administration, gas prices have more than doubled. So what we need to do is, we need to produce ``all of the above.'' We need to produce ``all of the above.''
Note that I said ``produce'' it. I do not mean talk about it. I do not mean block it when it comes to building needed infrastructure such as the Keystone XL Pipeline or preventing us from drilling offshore or preventing us from drilling onshore or having the redtape that prevents us from getting permits and the regulatory burden that prevents us from producing more energy. I mean actually doing it--not blocking it, doing it.
This third bar on the chart shows that if we just worked to produce more oil and gas in the United States and Canada, we can produce more than we consume within 15 years. That is just oil and gas. That is not even ``all of the above.'' That does not count producing all the natural gas we have in this country and in Canada or biofuels or other sources. That is just oil and gas if we start working to produce it rather than have the administration continue to block it.
Of course, that is what I am talking about with the Keystone XL Pipeline. The President has studied the Keystone Pipeline, the administration has studied it, the State Department has studied it, the EPA has studied it for 3\1/2\ years. Now the Department of Energy has come out and said--they did a study in June of last year--in their study, they said: We need the crude in the United States. We will use the crude in the United States, and it will lower gas prices on the east coast, on the gulf coast, and in the Midwest. That is Secretary Chu, the Secretary of Energy--his Department of Energy produced the report, and that is what it said.
After 3\1/2\ years, the President says: That is not long enough. We need more time. The administration needs more time to make a decision. After his own State Department said they would have a decision done before the end of the year--before the end of the year--the President says: No, we need more time, maybe sometime after the election--maybe. We need more time to make the decision.
So Congress said: OK. We will help out. You have expressed concern about the routing of the pipeline through Nebraska. We will pass legislation to kind of give you support and encouragement that says they can go ahead and build the pipeline, and we will give them whatever time they need to reroute Nebraska so there is no issue because that is what you have identified as the problem.
We passed that legislation as part of the payroll tax cut extension. The President denied it, turned it down, blocked it, and he continues to block the Keystone XL Pipeline today.
A couple weeks ago, bipartisan legislation--the very same legislation I am offering in this substitute amendment--was brought to the Senate floor. Bipartisan legislation. We had 11 Democrats who voted with us. Fifty-six votes, well over a majority--56 votes. The reason we did not get 60 votes on the legislation is because that day the President was calling Members of this body, this Senate body, to get them to vote no. So we got 56 votes instead of the 60 we needed.
The very next week--after calling Members of the Senate to get them to vote down this legislation that would authorize moving forward so we could actually bring oil in from Canada, bring more oil from my home State of North Dakota to refineries to help out Americans at the pump--the very next week, after blocking the pipeline, after calling Members of the Senate to get them to vote against it, the President goes to Cushing, OK, and takes credit for this small portion, the southern leg of the pipeline project, saying that somehow he is expediting it.
Interestingly enough, that is the only portion of the pipeline that does not require his approval. But after blocking it, he goes down and takes credit for somehow expediting the portion that was going to be built anyway, while he continues to block the two-thirds that actually brings us more oil.
So go back to what I said just a minute ago. We need more supply. If the policy of this country is to say all of the above, but then go about blocking our ability to produce more supply, guess what happens. Prices go up. Because what counts are the actions.
So the market takes that into account and says: Look, if supply is going to be constrained, then we anticipate higher prices in the future with growing global demand. That is what we see: prices rising at the pump.
Look, we can have energy security in this country. We need to increase our oil production in this country and work with our neighbor to the north, Canada, rather than have them send their oil to China, which is what will happen if we cannot build these pipelines. We need to increase our use of natural gas. We need to do ``all of the above,'' increase renewable fuels, with a market-based approach--a market-based approach--and we need to use technology to drive energy production in this country, and working with Canada, with better environmental stewardship.
What I mean by that, in Canada, oil is produced in the oil sands with in situ, which is the new technique. It is similar to drilling, rather than the old methods--more energy, better environmental stewardship.
Look, we can create a more secure energy future for our country, we can create jobs in America, and we can reduce the price of gasoline at the pump for hard-working Americans. But we need to take commonsense steps, and we need to take them now to produce more oil and gas, to produce more energy of all kinds in this country. We are asking for the President to work with us to do just that.
Mr. President, at this point, I have a parliamentary inquiry: When the Senate resumes consideration of the pending energy tax bill, would it be in order for me to offer my amendment, a substitute amendment, which would approve the Keystone XL Pipeline to help Americans at the pump with the price of gasoline?
If the pending question was S. 2204, it would take unanimous consent to offer an amendment to that measure because there is not an available amendment slot at this time.
So no amendments will be allowed?
Mr. President, I think that is unfortunate. It is time, it is well past time, to take action on behalf of the American people.
I yield the floor.
The Senator from Alaska.
Mr. President, I follow my friend and colleague from North Dakota who has been a real leader in these Chambers trying to educate not only those in these Chambers but people across the country as to the value and importance of the Keystone XL Pipeline and what it means to this country, not only in terms of a resource we need but also in terms of jobs and not only construction jobs but what it means to fill a pipeline and provide for a product that goes down to our refineries.
Again, when we are talking about an economic boom, where better to look than to our neighbors to the north, and I thank Senator Hoeven for his leadership on this issue.
I too wish to talk about our opportunity as a nation to do more when it comes to increasing supply within our own country. As has been mentioned on this floor numerous times today, numerous times yesterday, we are in a position as a nation to be doing more to access our own resources, to make us less dependent on countries that do not like us, to make us more energy secure, less energy vulnerable. At a time when the geopolitical scene is so shaky, every step we can take to make us more secure from a national security perspective and an energy security perspective is clearly important.
I have a substitute amendment that I have filed, which I think is important to this debate. I think it is important when we are talking about our access to supply.
What I will discuss in my 10 minutes is not new. Members have heard me talk over and over about the prolific oil resources that reside in Alaska. According to the Energy Department, we have over 40 billion barrels of oil that could be produced up North, providing not only the energy but the energy security, the jobs, and new revenues. We have a pipeline that is built already. We don't need to deal with the permitting issues there. It is there waiting to carry oil. We have overwhelming support from Alaskans.
What we don't have is what is perhaps most important, which is permission from the Federal Government to actually develop our huge oilfields. The biggest on the continent is in the northwest corner of ANWR. For years, we have sought to develop a total of 2,000 acres in what is known as the 1002 area, which Congress set aside back in 1980 to access for energy exploration. They knew then that this area had great potential. The 1002 area is projected to contain more than 10 billion barrels of oil. If you were to put it into context this way, it would be 1 billion barrels a day coming down that pipeline to us from ANWR. That is enough to replace Venezuela or Saudi imports for about 30 years. To think that we could get off of Venezuela and we would not need to go to Saudi Arabia with tin cup in hand because we are producing ourselves here--think about what that means to us. For those who bring about the speculation and argument of what that does to prices, think how this would mess up speculators if you add a million barrels a day online. Instead of embracing this as an opportunity, every excuse in the book has been thrown at us against development. You hear that the environment will be degraded, wildlife will be disturbed, and that despite a better environmental record than just about anywhere else in the world at Prudhoe Bay, we cannot do it. They don't trust us to do it. But for 20 years we have been hearing: Don't go toward ANWR; don't develop ANWR because it will take you 10 years to get that online; therefore, it is not even worth considering.
Even the late-night TV shows talk about it. Jay Leno joked about that and said, ``Democrats said it would take 10 years 10 years ago.'' If you don't get started, it is never going to happen. We are going to keep that money in the ground indefinitely if we don't get moving on it. I don't accept the arguments that have been tossed out, but they have not accepted the facts that we have presented.
I have an amendment that has changed a little bit. It is designed to address this debate. It would prohibit surface development entirely. Yet, it still allows for a very substantial portion of the oil to be accessed from our State lands, with drills reaching beneath the Coastal Plain. We do this by allowing only subsurface occupancy. We use extended horizontal drilling production. Right now, it can reach about 8 miles underground in all directions. As the technology advances, more and more of that refuge's oil could be tapped. Again, we are not going to be occupying the surface. There is no surface occupancy in this legislation. All land-based structures would be located on adjacent State lands. You would not see permanent roads, wells, buildings, and pipelines constructed on the surface of the refuge.
If you were to put together a slide show of development, the surface would be unchanged before, during, and after production. This is a photo of ANWR, and this is probably in the spring because you have tufts of grass coming up through the melting snow. This is what it would look like before, during, and after because we are underneath through the technology.
The amendment I am offering gives the Senate a chance to put reason ahead of rhetoric, policy above politics, when it comes to oil production in this State. It is a chance to end this decades-old dispute about whether development can proceed safely.
We have not just met the opposition halfway here on ANWR; we have met them 90 percent of the way. We have written into the amendment more stringent environmental safeguards than on any other Federal lands. We sacrifice 90 percent of the revenues, which Alaska is entitled to under our statehood agreement. We proposed a 50 50 Federal split. It seems that we are now begging to access a small fraction of the reserves from miles away.
It defies logic to think that, again, an idea, a concept like this would be kept off the table. I realize many are dug in on this issue. I have attempted to change the debate, change the conversation. I would ask the Senate to take a moment to consider how far we have compromised on this amendment and understand why it is different. I hope we can get a vote on it.
I ask, as a point of parliamentary inquiry, when the Senate resumes consideration of the pending energy tax bill, would it be in order for me to offer my amendment No. 1976 at that time?
If the pending question were asked regarding S. 2204, it would take unanimous consent to offer an amendment to that measure because there is no available amendment slot at this time.
The Chair is saying that the amendment slots have been filled by the majority leader, is that right?
That is correct.
Mr. President, I have another issue I wish to bring up today in the remainder of my time. I have two other amendments I would like the body to consider. I understand what the Chair has just said.
One of the things that I think we recognize is much of our country's production can lag due to an accumulation of redtape due to permitting issues. We know the Federal Government cannot necessarily set global commodity prices, but it can create a situation where capital that might be invested in American mineral production is stranded for long periods of time. That is what we see happening, and it is unacceptable.
What we should not do, particularly in the case of energy and minerals development, is subject a project to an unnecessarily long permitting process. I have an amendment that would begin to remedy this situation, and it would do so by using the very language the President used last week with his executive order, which he signed March 22. My amendment incorporates provisions that had pretty broad bipartisan support on the highway bill considered by this body. These provisions will work. According to the September 2010 report by the Federal Highway Administration, these reforms have cut the time required to complete environmental reviews and have mitigated the delays caused by last-minute legal challenges. What they do, more specifically, is take the President's executive order and put some teeth to it, if you will.
The President simply asked the agencies to consider making certain improvements. What I have done through my legislation is ask for a process for States to nominate items that might be subject to NEPA, allow for a shortening of review periods, and the designation of a single lead Federal agency. It is a situation that I do think rests on a good premise. The President has suggested that this is an approach that needs to be considered when, again, making such improvements.
I suggest that if it is good enough for the President and for our transportation needs, as we have seen demonstrated in the highway bill, then it is good enough for energy, mineral, and infrastructure needs as well.
I ask unanimous consent to call up amendment No. 1985, which includes all of the provisions I have described.
Is there objection?
Mr. President, reserving the right to object, we have the bill before us relative to the tax subsidies given to major oil companies--it gives $4 billion a year to companies that registered $137 billion in profit last year. It is such a popular measure that moving to it attracted a 92-to-4 vote in the Senate. We are trying to bring that to closure and get a vote on it. I know the Senator has an amendment she feels is valuable. I don't know the merits of it. I wasn't on the floor to hear the entire explanation. We have just gone through a transportation bill on which for more than a week we entertained an amendment on contraception on that side of the aisle.
We wish to, if we can, limit amendments to relevant issues, and limit them in number and try to actually pass a bill in the Senate, which would be almost historic. I hope we can do it in a bipartisan way. I invite the Senator from Alaska to join us in a conversation about that. Until we can reach agreement on that, I am afraid I have to object.
Objection is heard.
Mr. President, I am disappointed we won't have an opportunity to offer the amendments. Several of my colleagues will be coming down to offer their amendments. We have been told that the tree has been filled. The amendment I am proposing--I actually have two. One, as I have described, is probably broader in scope, but I have a second amendment that literally takes the President's executive order and provides instructions to the agencies to do a rulemaking to implement them within 1 year. This is not something that the Senator from Alaska has designed; this is the President's executive order. I think it is designed to get us to an expedited permitting process so we don't have the lag times, whether it is on transportation infrastructure or energy issues.
I think it is a good measure, and I ask my colleague from Illinois, in the effort to work together, which I appreciate, to take a look at this amendment. I apparently will not be able to introduce or call up amendment No. 1986. But again, what that bill would do is pretty simple. It is to codify portions of the President's executive order. The title is ``Improving Performance of Federal Permitting.'' He suggested it, and I thought it made sense. Now we are urging the agencies to provide for an implementation.
Again, I think this debate we are having on the floor this week is an important one. We are focused on the issues that people in this country are talking about. Folks back home are very concerned. I just met with a group of students. One young man is a high schooler from Yakutat, probably driving his first car, and they are paying in excess of $5.50 a gallon at the pump. When you are a 16- or 17-year-old boy, that is pretty high. Even when you are a person our age, that is high. He wanted to know what we are doing as a Congress to help address these issues.
I cannot overstate my disappointment, as we are dealing with these difficult issues in what we all know to be a great deliberative body, that we cannot move to a process where we can allow for fair and germane amendments that I think would help address some of the energy challenges we face, recognizing where we are today.
I see my colleague from Louisiana has joined us on the floor. My time has expired.
With that, I yield the floor.
The Senator from Louisiana is recognized.
Mr. President, I come to the floor to offer amendments to this bill. Let me assure our colleague from Illinois that they are not amendments about contraception or any other unrelated issue. They are energy amendments, which go directly to one of the greatest challenges all of our constituents, fellow citizens, face, which is the ever-rising price at the pump.
I am glad we are on this Menendez bill, because at least it puts us on that major challenge that faces Louisiana's lower to middle-class families, and those families in Illinois, and all around the country. I bring amendments that are directly relevant to that.
The first amendment has to do with supply. First of all, let me say why I oppose the Menendez bill. It is because when we tax something at a higher level, when we increase the tax on it, we get less of it. So it will produce less energy, in particular less U.S. domestic energy. When we lower supply, we increase the price. It is not only not going to have a positive impact on the price at the pump, it will increase the price and have a negative impact.
I take the opposite approach. We need to increase supply, starting with activity and supply right here at home in the United States. So my amendment, offered along with Senator Murkowski of Alaska, No. 1965, would do that. It would replace President Obama's current 5-year plan for Outer Continental Shelf leasing with basically the plan that existed previously, which is double President Obama's plan.
So President Obama's plan, which he put in place after coming into office, is about half of the previous plan. It backs us up and turns us around, moving us in the wrong direction. Amendment No. 1965 would turn us back, move us in the right direction, and adopt pretty much that previous plan--to expand our access to our own U.S. energy resources offshore.
So, Mr. President, with that said, I ask unanimous consent that when the Senate returns to consideration of S. 2204, the pending energy tax bill, it be in order for me to offer amendment No. 1965, which I have authored along with Senator Murkowski.
Is there objection?
Mr. President, reserving the right to object.
The Senator from Illinois.
The Senator from Louisiana and I can get into a debate about whether taking $4 billion in subsidies away from five oil companies that reported $137 billion in profit last year is going to change the production of oil, but we will save that for another day.
This amendment, like others, needs to go through the Senator's leader, and with some understanding as to whether we are going to stay in the energy field or go far afield, as we have in previous bills. I am afraid I am constrained, until that conversation takes place between the leaders, to object.
Objection is heard.
The Senator from Louisiana.
Mr. President, that is unfortunate. It is particularly unfortunate because everyone knows our leader and everyone on our side has absolutely agreed to offer energy amendments and give the other side an equal number of energy amendments. We are perfectly agreeable to that, and everybody knows that.
It is in that context that I bring up another energy amendment, our amendment No. 1997. This has to do with another huge opportunity we have in the United States right here at home; that is, enormous oil resources we can get from western shale. Quoting the Institute for Energy Research:
USGS estimates that unconventional U.S. oil shale resources hold 2.6 trillion barrels of oil, with about 1 trillion barrels that are considered recoverable under current economic and technological conditions. These 1 trillion barrels are nearly four times the amount of oil reserves as Saudi Arabia's proven oil reserves.
That is the potential we have right here in this country--enormous reserves, available now, recoverable now. So what is the problem? Well, one big problem is the Obama administration has canceled all leases to access this oil shale. There was movement to properly, responsibly access that 1 trillion barrels, but that has been canceled under the Obama administration.
My amendment, No. 1997--again, obviously, an energy amendment that can affect prices at the pump--would expedite movement toward that important resource and would get us moving again in the right direction, accessing that U.S. energy resource.
With that said, Mr. President, I ask unanimous consent that when the Senate returns to consideration of S. 2204, the pending energy tax bill, it be in order for me to offer that amendment No. 1997.
Is there objection?
The Senator from Illinois.
For the reasons stated earlier, I object.
Objection is heard.
Mr. President, if I can wrap up, again, I think this is unfortunate. Everybody knows Republicans are perfectly willing to limit ourselves to relevant energy amendments. That is what we are doing. That is what we are bringing to the floor. Leader McConnell has offered that. He has offered to have a like number of energy amendments from the Democratic side. What is happening is we are being completely shut down and shut out.
The main issue is not that I am aggrieved, the main issue is the American people are being shut out. The folks I represent--the folks all of us represent--are being shut out from offering good, sensible ideas to at least debate and vote on which would access more American energy, more U.S. energy, to help solve the pressing problem of the price at the pump in that way. Let's control our own destiny in that way.
This is a sensible solution. It is a major solution. It will move us in the right direction.
I thank the Chair, and I yield the floor.
The Senator from Arizona.
Mr. President, I am glad to see the Senator from Illinois on the Senator floor to object to my next proposal.
Mr. President, throughout our history, from time to time we have passed legislation that long after it has served its purpose, if it ever did, still remains on the books. I think one of the great and outstanding examples of that is a law called the Jones Act.
The Jones Act, I am sure, may have had some rationale behind it back in 1920 when it was enacted. I am also sure there is perhaps only 1 American in 1,000 who has ever heard of the Jones Act. But the Jones Act has a direct impact on oil supplies, on the cost of oil, and the cost of other products.
The Jones Act says, incredibly, any product shipped between two U.S. ports--whether it is Honolulu, HI, and San Francisco or one of the gulf coast ports to the northeast or anyplace between two U.S. ports--can only be transported by U.S.-owned, U.S.-built, and U.S.-crewed vessels. Talk about protectionism. There is probably no greater example than this.
The Jones Act, enacted in 1920, has cost consumers--especially in places such as Hawaii where the transportation of goods is long distance--enormous amounts of money. In other words, citing the February 2012 Energy Information Administration Report, there are only 56 tankers that meet the Jones Act requirements, which accounts for less than 1 percent of both the total number and the total deadweight tonnages of tankers in the world. So less than 1 percent of the tankers in the world are able, by law, to operate between two U.S. ports.
So what does this do? Obviously, when we are talking about supply and capacity, it drives up the cost of petroleum. In fact, sometimes it is two or three times the rate of a foreign flagship--again, according to the Energy Information Administration. Not only that, the Jones Act tankers--those 56--aren't always readily available, so the costs can be even higher than we are talking about.
Let me give another example of the harm the Jones Act does to American consumers. In 1999, the U.S. International Trade Commission--not a Republican or Democrat or Liberal or Conservative organization--said a repeal of the Jones Act would lower shipping costs by approximately 22 percent. A 2002 economic study from that same commission found repealing the Jones Act would have an annual positive welfare effect of $665 million on the overall U.S. economy. Given the price of oil, that is probably now close to $1 billion.
The Jones Act adds real direct costs to consumers, as I mentioned, particularly to Hawaii and Alaska. I notice the Senator from Alaska is on the Senate floor. A 1988 GAO report found the Jones Act was costing Alaskan families between $1,921 and $4,820 annually for increased prices paid on goods that were shipped from the mainland. In 1997, a Hawaii Government official asserted that ``Hawaii residents pay an additional $1 billion per year in higher prices because of the Jones Act. This amounts to approximately $3,000 for every household in Hawaii.'' Again, those figures are from 1988 to 1997. Obviously, they are higher today.
Everybody says there is nothing that can be done immediately about the price of oil. My friends, if we repeal the Jones Act, we would have an immediate effect on the price of oil because when we are transporting oil from the gulf coast to the Northeast, and it costs two or three times more if that supply is restricted to being transported only by these 56 tankers, then, obviously--according to figures that are accurate that it costs two to three times more than if we allowed other foreign-flagged ships to move these goods and services, but particularly oil tankers--we could cut the cost of oil, of gasoline, immediately.
So the next time you hear the President of the United States or my friends on the other side of the aisle say there is nothing that can be done now about reducing the price of a gallon of gasoline, understand that we can do so by repealing the Jones Act immediately.
If there was ever a law that has long ago outlived its utility or usefulness, if it ever had any, it is this law passed in 1920. Only American built? We can't even buy another one--a tanker or a ship--that is built in another country and not have it fall under the Jones Act, even if it is American owned and with an American crew. Amazing.
What I am leading to, obviously, is that we should repeal the Jones Act. If not repeal it, then waive the Jones Act. If not fully waive it, then waive it just for the transport of oil, for oil and gas tankers. If that is not enough, let's just waive it for 6 months. Couldn't we just do that for 6 months?
I know what the response of the Senator from Illinois is going to be. That is his duty on the Senate floor, and I respect that. But, my friends, the price of a gallon of gasoline is now, this March, according to media reports, the highest it has been in history. Depending on what happens in a lot of different areas of the world--particularly the Middle East and what happens in Iran and other things that are going on in this very dangerous world we are living in today--it could go considerably higher.
So why don't we take a commonsense approach and at least for 6 months waive the requirements of the Jones Act for only oil and gasoline tankers--for just 6 months. It seems to me that would make a great deal of sense.
I know all four of my unanimous consent requests on these amendments are going to be denied. But, first of all, I think the Jones Act should be repealed completely. If it isn't to be repealed, couldn't we at least waive the Jones Act restrictions on coastwise trade for oil and gas tankers? If we can't waive it permanently for that, can't we waive those restrictions for 6 months? We are discussing energy and the price of oil. Can't we waive the Jones Act restrictions on coastwise trade for oil and gasoline for 6 months.
So with the indulgence of my friend from Illinois, I ask unanimous consent that when the Senate returns to consideration of S. 2204, the pending energy tax bill, it be in order for me to offer--I want to offer them all--my amendment No. 1948, which is, as I described, an amendment that would waive the Jones Act restrictions. In other words, it would allow a foreign-flagged tanker to move oil and gas--a waiver for 6 months to move just oil and gas--so that we can immediately reduce the cost of transportation, which would then translate itself at the pump at every gas station in America.
Is there an objection? The Senator from Illinois.
Mr. President, reserving the right to object, I believe the shipbuilding industry in Arizona is about the same size as it is in Illinois, so I don't come to this issue with any particular hometown or home State view, and I am open to the Senator's suggestion. But I would say at this moment we are clearly focused on doing one thing; that is, eliminating the $4 billion annual subsidy to the five big oil companies that registered $137 billion in profits last year. Moving to this measure was voted favorably by 92 Senators, and we are trying to move this to a vote. Perhaps we can move to another issue--the ones the Senator is proposing--at another time, but at this point, I have no other alternative but to object.
Objection is heard.
Mr. President, I always enjoy a little dialog between myself and the Senator from Illinois. I hope he would have the same passion concerning all subsidies, including the outrageous and disgraceful subsidies that--and there is a lot of solar in the State of Arizona--a lot of solar. I will stop here, but if we are going to repeal the gas and oil subsidies, let's repeal them all. Let's repeal them all.
I am not sure--again, the logic that says that if we are able to immediately reduce the cost of oil by repealing the Jones Act, which then would reduce the cost of transportation, would then reduce the cost of gasoline--why should we out of hand reject such a motion or an effort to do so?
But I understand what the position of the majority and the distinguished Democratic leader is, and I know others are waiting, so I thank the Senator and I yield the floor.
The Senator from Wyoming.
Mr. President, how much time remains on our side?
No time remains.
I ask unanimous consent to speak for up to 5 minutes.
Without objection, it is so ordered.
Mr. President, President Obama often boasts about oil production he really had nothing to do with. My amendments I am bringing forth today would allow him to be proud of his own record instead of his predecessors, and that is why I ask unanimous consent that when the Senate returns to consideration of S. 2204, the pending energy tax bill, that it be in order for me to offer amendments Nos. 1956 and 1957. Amendment No. 1956 would accelerate permitting of oil and gas exploration on our Federal public lands, and amendment No. 1957 would require Federal agencies to use existing environmental review documents for oil and gas permitting.
Is there objection?
Mr. President, I object.
The Senator from Illinois. Objection is heard.
Mr. President, the reason I come to the floor today is to speak on behalf of these two amendments I have filed to S. 2204.
A few weeks ago, we learned that oil and gas production on Federal public lands and waters is down. Specifically, we learned there was a 14-percent decrease in oil production on Federal public lands and waters from 2010 to 2011 and an 11-percent decrease in gas production from 2010 to 2011.
On March 14, Bob Abbey, the Director of the Bureau of Land Management, testified about this before the Appropriations Committee. He explained that there had been ``a shift [in the oil and gas production] to private lands to the east and to the south where there is a lesser amount of Federal mineral estate.''
That is why amendment No. 1956 would accelerate permitting for oil and gas exploration on our Federal public lands, and that is why I just offered that. I took a look at the amendments and the discussion on the bill on the floor, and that is why specifically I offered an amendment that would rescind the administration's rules requiring what are called master leasing and development plans. These regulations were put into place over 2 years ago by the Secretary of the Interior. It is unclear why the Secretary issued these regulations. They add more redtape, they cause more bureaucratic delay, and they slow down American energy production. This amendment would also require the administration to set goals for oil and gas production on Federal public lands. It would ensure that the United States maintains or increases onshore oil and gas production.
I have also filed a second amendment, No. 1957, which would require Federal agencies to use existing environmental review documents for oil and gas permitting. When we take a look at this amendment, this would expedite the time it takes to prepare environmental analyses under the National Environmental Policy Act, often known as NEPA. Too often, NEPA delays onshore and offshore exploration. My amendment provides a commonsense solution. It requires agencies to use, in whole or in part, an existing environmental review document if the existing document was completed for a permit that is substantially the same as the permit under consideration. This amendment doesn't exempt agencies from complying with NEPA, and it does not provide for categorical exclusions. It simply requires agencies to use their previous work so they don't have to reinvent the wheel.
I am disappointed that the majority continues to prevent the Senate from doing its job and that we heard an objection to these amendments. High gasoline prices are causing hardships for American families and American businesses.
My Republican colleagues and I filed a number of amendments to S. 2204. We would like to have votes on these amendments. We would like to take steps to increase American oil production. Instead, as we just saw, the majority says no. ``No'' to more American energy, they say; ``no,'' they say to jobs; and ``no,'' they say to strengthening our energy security. We can do better, and it is my hope that we will.
Madam President, I yield the floor.
The Senator from Alaska is recognized.
Madam President, I ask unanimous consent to speak for no more than 5 minutes.
Without objection, it is so ordered.
Madam President, I wish to thank my colleagues who have come down to the floor this afternoon for their efforts to offer what I believe are very substantive, very meaningful amendments to the legislation that is before us. I think we can condense the message you have heard here this afternoon pretty easily.
The fact is that the bill before us is highly misleading, and I don't believe it will work. The legislation that has been introduced, S. 2204, is not going to put an end to Federal subsidies for oil and gas producers because there are none. There are no subsidies here. The oil and gas industry actually sends money to the Federal Government to the tune of tens of billions of dollars each year, and it is not the other way around. Basic tax deductions that allow businesses to retain more of their earned dollars is not the equivalent of handing them a check. So I think that is the first thing we need to get out on the table and make very clear.
The second point I want to reinforce is that S. 2204 is simply not going to work. By definition, increasing costs will not lower prices. There is nothing I can think of that, if we tax it more, it will make it more affordable and more abundant. It just doesn't work that way. And judging from both history and some recent international examples, it is virtually certain that S. 2204 would have damaging effects on this country.
Back in 1980 the Carter administration imposed a windfall profits tax. We remember that. This was a tax that was imposed on domestic crude oil. According to the Congressional Research Service, that tax reduced domestic oil production, it increased our dependence on foreign nations, and it collected far less in revenue than was expected.
The example that is more current on the international scene is one I spoke to yesterday, and that is the example in Great Britain. A year after raising its oil tax rates, production declines in Great Britain have increased from 6 percent per year to 18 percent per year. As a result, Great Britain is reversing that course. They are now planning to offer new incentives to encourage producers to return to the North Sea.
So all we need to do is look at a real-time example of what one country did in an effort to deal with high gas prices. They increase the taxes, and investment and production goes overseas. Now they are turning the corner on this, and they are working to reduce their taxes.
I think there is clearly a better way. The other side of the aisle has refused to even consider amendments that will increase Federal oil and gas production, create good jobs in this country, generate billions of dollars of Federal revenues at a time that we desperately need them, restrain if not reduce gasoline prices, and increase our domestic energy security.
We believe very strongly that the solution to these many problems should be a reasonable combination of increased domestic production, for which we have huge world-class untapped resources that are still locked up by our Federal Government--America could be the world's largest oil producer, and we could be independent of OPEC. That is real. That is achievable. But we have to set our mind to it, we have to make that happen, and we have to have the Federal Government get out of the way or help us with the right incentives to do so.
The hundreds of billions of dollars in Federal revenues from increased production could, and should, help support the research and the development of our renewable resources, our alternative energy, as well as efficiency and conservation. We know that building out the energy of the future--renewables, alternatives--is expensive. How are we going to fund it? Well, many of us believe that resources that come from expanded production could help us with that. Yet what we are presented with today is a bill that does nothing more than raise taxes--raise taxes on an industry that has created good jobs, is providing us with the resource that we need, and we are not even allowed to offer a single amendment to produce one additional drop of American oil. I think that is unfortunate. I wish it were otherwise.
But I do think the debate, the discussion we have had on this floor in the past couple of days has been good and helpful in helping to educate the American public in terms of what we truly have as a nation in terms of our capacity and our capability to produce if given the opportunity.
Madam President, I yield the floor.
The Senator from California is recognized.
What is the parliamentary situation at this time?
The majority retains 16 minutes in time.
I am confused a little bit because didn't the minority get extra time? Did they not get extra time?
The Senator asked consent and no one objected.
Well, I would ask consent that I have an additional 5 minutes on the 16.
Is there objection? Without objection, it is so ordered.
So, Madam President, I think it is very important that we understand what we are trying to do here.
The Senator from Alaska said it has been a good debate. Yes, it has been a good debate, but let me tell you what is not good. What is not good is that Big Oil is getting corporate welfare. Big Oil is ripping us off at the pump. They never had greater profits. We are being asked to sacrifice and pay more at the pump because of instability in the world, because of problems with the refineries, even though we have never drilled as much as we are drilling now. Big Oil exports our oil now. We have never had as many exports as we have now.
Big Oil gets billions of dollars of subsidies, so big that I would tell you, $2 billion a year in U.S. tax breaks. Let me tell you, to explain how that compares to something we do that is very near and dear to my heart and to every mother and father, grandma, grandpa, or aunt and uncle, we put about $1 billion a year into afterschool programs, and we have millions of children waiting--$1 billion a year on afterschool programs while we give away $2 billion a year to the most, shall we say, successful companies in America.
I want to show you what I am talking about because I don't want people to think this is rhetoric. These are the facts. When my Republican colleagues come on the floor and defend these profits, let's talk about what they are.
Now, remember, we have been in a deep recession for several years now. Remember that President Obama and we had to confront the loss of 800,000 jobs a month. Now, thank goodness, he has turned it around--we have turned it around. It is still not good enough but we were in the worst situation. During that time, small businesses went out of business. People lost their homes. If it were not for the leadership of the President, we would have lost the auto industry in America. Thank you, Mr. President, for saving the auto industry in America. Thank you for that. I was proud to vote for that even though I had a lot of problems with the auto industry not moving quickly enough to fuel efficient cars. Now they are doing a great job with it.
During that time when Americans were suffering, we were bleeding all these jobs and even now, just getting back on our feet, what has happened to Big Oil while they have raised our prices at the pump? In 2009, all the five oil companies made $64 billion. In 2010, Big Oil made $76 billion, and in 2011 they made a whopping $137 billion. So they went from $64 billion in 2009 to $137 billion in 2011, and my Republican colleagues are crying bitter tears for them. Oh, let's keep giving them that $2 billion a year.
Why would we do that when we are sacrificing and our constituents are paying more at the pump and Big Oil is profiting from it? There is no reason for this kind of increase at the pump. There is no reason for it. Look at what is going on here. If they made the normal profits, we could have some relief at the pump. But, oh, no. So now the Republicans are going to reward them by allowing them to keep these subsidies.
That started a long time ago. That started in the 1980s, most of it, because we wanted to help them get moving. How much more do they have to earn before we say they can get off corporate welfare? You talk about welfare queens, here it is. And my Republican friends defend giving these people, who have ripped us off at the pump, billions of dollars of subsidies.
They are exporting the oil they recover here. They will not keep it in the country. We had a proposal for the XL Pipeline to keep the oil in the country. My friends on the other side of the aisle voted against it. They don't care, they just want these companies to have their way, to do with it what they want.
If they want to send our oil to China, fine, that is what they want. But they also want to keep their subsidies. It is not right. I want to see these subsidies done with and I want to see us invest in alternatives to these big oil companies that hold us by the throat. I want to have alternatives.
I have been all over this country looking at the alternatives we are developing now. We know, for example, in Brazil they use sugar cane to create their gasoline and they are completely free from imported oil. That is the kind of thing we need to do. I am fortunate that I drive a hybrid vehicle and I get 50 miles to the gallon, so I don't go in for gas that often. But when you go in there, it is a shock. We want to have cars--let them be big cars. If people need that for their families, I understand it. I have grandkids. I know what it is to put your grandkids in a small car. It is hard. We need to have larger cars. They need to be fuel efficient. We are going to get there. We are getting there already.
Isn't it better to take that money away from people who are ripping us off at the pump, away from the corporate welfare queens here, and put it into alternatives so our people are no longer victims to their prices? That is the fight we are having. That is the debate we are having.
On the other side they say drill, baby, drill. You know what, I am for drilling where it makes sense. Do you know how many acres the oil companies are holding now that they have not drilled upon? It is pretty amazing. My friends say open the Arctic to drilling--a precious environment, God-given, placed in a refuge by I believe it was Dwight Eisenhower. They want to go in there and ravage it. Why don't they drill on their nonproducing acres? It looks like 75 million nonproducing acres, onshore and offshore, on which they hold leases.
Oh, no, that is not good enough for them. They are only drilling on 25 percent of the leases they hold, of the acreage they hold in those leases. How about ``use it or lose it,'' instead of ``drill, baby, drill''? Drill, baby, drill in here. Don't go into the coast of California where they want to go, or Washington, or Oregon, where we have fishing, tourism, recreation.
There are so many people here to whom I listen who make the arguments for the oil companies. I am so tired of it. How about speaking up for the American people who are getting brutalized at the pump? How about speaking up for the people who make their living off of a beautiful, pristine environment?
Oh, by the way, many jobs in my State, over 400,000 jobs, are related to a pristine coastline, and they don't care about that on the other side. They want to open it, push these people out of the way and create a few jobs--because there are far fewer jobs created from drilling. As President Obama has said many times, and the other side gets rankled: We only have 2 percent of the world's proven oil reserves and we use about 20 percent of the energy. You do the math, as the President said. You could drill in your grandmother's bathtub, you could drill in the Great Lakes, you could drill anywhere you want--you are not going to find enough oil.
So let's get off foreign oil, let's tell the oil companies to drill, baby, drill where they have the acres and let's look at these prices and let's understand--we will look at it again--the profits of Big Oil. They are crying all the way to the bank, as my dad used to say.
Look at this. In the height of the recession they are making record profits and crying to keep their subsidies and my Republican friends are crying right along: Oh, here, have a tissue. We are so sorry for you, even though we have to turn away millions of children from afterschool programs because we do not have more than $1 billion to spend on it. They are giving away $2 billion a year. That is just one example.
I hope we vote for the Menendez bill. I hope we vote tomorrow on that, to stop the filibuster, to vote it up or down. What a message of hope it will send to the American people, that we are willing to stand up to the biggest powers that be, that we are willing to fight for the average American, that we are not in the pockets of Big Oil. You don't need to give American taxpayer dollars to Big Oil. It is absolutely ridiculous. We don't have to allow them to drill in pristine areas when they will not even drill in areas that they have had under lease for years. And let's stop them from exporting the oil. We need it. Let's keep it here.
By the way, if they keep on ripping us off like this and getting rewarded for it from my Republican friends, let's release oil from the Strategic Petroleum Reserve, and let's increase the supply and let's see prices go down.
Let's look at the CEOs of Big Oil for a minute, these poor guys who are fighting for the subsidies. Let's look at them. CEOs for the big five made more than $14.5 million in total compensation in 2010. This is it, average compensation. That is 307 times the average salary of a firefighter; that is 273 times the average salary of a teacher; that is 263 times the average salary of a policeman; that is 218 times the average salary of a nurse. But they need subsidies for their companies and they need to rip us off at the pump so they can make a little more money--$14.5 million isn't enough for a poor oil company executive. Give me a break. And stop giving them a break because they don't need this break.
We have an opportunity to stand for what is right and I hope we take it. Right now we want alternatives to Big Oil. We want competition for Big Oil. We want to be able to become energy independent. So let's stop these taxpayer handouts. The oil companies do not need them. Let's start investing in America's energy future which, by the way, that kind of investment creates many jobs at a time that we need to do that.
I want to switch topics here for the remainder of my time and talk a minute about health care and then close with a little bit about the highway bill over in the House and the struggle over there to get their work done.
I ask how many minutes I have left.
The Senator has 6\1/2\ minutes remaining.
Will the Chair advise me when I have 2 minutes remaining.
The Chair will so advise the Senator.
Madam President, we all are watching what the Supreme Court is going to do in terms of the health care bill they have before them. What I want to do today is completely stay away from that argument and talk about what the health care bill is doing now, right now as we speak, because people tend to get involved in mandates, and if it is constitutional, and how does it work and so on. I want to talk about what the Obama health care plan is doing for my people at home, your people back home, and the people of this country right now.
As we stand here today, over 5 million seniors have saved more than $3 billion on their prescription drugs. The way it worked before this bill was passed, you would use up a certain amount of money and then you would fall into this coverage gap that they call a doughnut hole, and just when you are at your sickest point, you get no help. A lot of our seniors were not taking their medicines at that critical point because they could not afford the full cost; they were cutting the pills in half and praying. It was a sad situation. Because of health care reform, we have these seniors being able to keep their medications flowing. Last year in my State, 300,000 seniors were able to save $171 million in their costs.
Let's look at that again. As a result of Obama health care, which I proudly supported, already 5 million senior citizens are able to afford their prescription drugs--your mother, your father, your grandma, your grandpa. That is important. What is going to happen to these people if this whole thing gets overturned? They will get sick and they will not have those medications.
In addition, what else is happening--2.5 million young Americans are now covered because they can stay on their parents' health plan until they turn 26. Without this law, when you graduated from college you were out of luck, and you had to find your own health care. The Obama plan said you should be able to stay on your parents' health plan until you turn 26. I cannot tell you how many people have written to me to thank me for that.
So over there in the Supreme Court they are talking about legalese, and I appreciate that. They are talking about severability, and they are talking about a lot of interesting things. One thing I want to talk about is what is going to happen to 5 million senior citizens who are able to stay on their medication as a result of the Obama health plan.
What is going to happen to the 2.5 million Americans who are young who can stay on their parents' plan until they are 26 if something happens over there across the street in terms of this legal case? In California 335,000 Californians have benefited from that young person being able to stay on their parents' insurance provision.
What is going to happen to 54 million Americans who now have access to free preventive care, such as screenings for colon cancer, mammograms, and flu shots? This is new, folks. Before we didn't get free prevention. We had to pay a copayment. I have to tell you, as I lived my life and I have seen the tragedy of cancer, I have learned very clearly that if you take care of yourself and have mammograms and colon cancer screenings, your life can be saved.
What is going to happen to 54 million Americans who have that preventive care now if the Supreme Court strikes it down? Out of that 54 million, 6 million Californians have gotten these screenings and vaccinations. I will close with health care on this story.
I don't know how many people realize this, but before the Obama health care plan there were caps on insurance policies. Maybe they were a million-dollar cap or a half-million-dollar cap. Before I had different insurance, I had a cap on my husband's policy. What happened at that time is, if you used up enough health care, you were finished at a certain point.
I want to tell you the story of Julie Walters of Nevato, CA. She wrote to me last year about her 3-year-old daughter Violet who suffers from a severe form of epilepsy. She wrote that Violet could hit her lifetime limit in 5 years. So here is a little baby who is reaching her lifetime limit, and her mom wrote:
A lifetime limit on insurance is a limit on Violet's lifetime, and that is immoral.
Because of health care reform, there is no longer a lifetime limit. So I wanted to point this out and so many other things that are totally essential to our people that are at stake across the street.
In closing, before we reach our full time, I want to call on the House to take up and pass the Senate Transportation bill. There are 3 million jobs at risk. They cannot get their act together. Allow a vote on the bipartisan Transportation bill and then leave for your vacation. But don't just give us these extensions which are, frankly, death by 1,000 cuts. We already know of six or seven States--including those in the Northeast--that are laying people off because they don't have certainty with the Transportation bill.
So I thank you very much. I thank the chairman of the Judiciary Committee for allowing me to finish.
I yield the floor.
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