Food Conservation, and energy Act of 2008 - Conference Report

Floor Speech

FOOD CONSERVATION, AND ENERGY ACT OF 2008--CONFERENCE REPORT -- (Senate - May 14, 2008)

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Mr. CONRAD. Mr. President, I have enjoyed immensely listening to the description of this bill of the Senator from New Hampshire who is the ranking member of the Budget Committee, which I chair. I have great respect for Senator Gregg and affection for him.

The description he has given of this bill has almost no relationship to the legislation that is before us. It is enormously entertaining but it is largely a fiction. It is a fiction that is interesting to listen to, but again it bears almost no relationship to the legislation before us.

The Senator made reference to Soviet economists. Let's make clear, the American system of food production is the most efficient, the cheapest, the most plentiful, the most stable, the safest in the world. Americans have less of their disposable income going for food at this time than consumers at any time in the history of the world.

Let me repeat that. The American consumer today enjoys the lowest cost of food in relationship to our income of any consumer in the history of the world. That is a fact.

In fact, the Wall Street Journal published, last year, an article in which they said--and I want to read this. I hope people will pay attention. People need to understand how remarkable the American agriculture system has been and is. This is what they said:

The prospect for a long boom is riveting economists because the declining real price of grain has long been one of the unsung forces behind the development of the global economy. Thanks to steadily improving seeds, synthetic fertilizers and more powerful farm equipment, the productivity of farmers in the West and Asia has stayed so far ahead of population growth that prices of corn and wheat, adjusted for inflation, have dropped 75 percent and 69 percent, respectively, since 1974. Among other things, falling grain prices made food more affordable for the world's poor, helping shrink the percentage of the world's population that is malnourished.

That is a result of the genius of American farm policy and the extraordinary productivity of American farmers and ranchers working within that system.

When the Senator says this counters market economics and leads to payments when prices are high, he obviously does not know how the farm program works. It is the opposite of what the Senator suggested. The way the system works is there is support from the Government when prices are low to prevent a collapse of the productive system. When prices are high, the support fades away. That is the way the system works. It does not increase support at times of high prices. It is precisely the opposite.

The Senator said the reform provisions in this bill only save less than $300 million. Wrong. The reform provisions in this bill save close to $3 billion, and I will specify that momentarily.

The Senator says the disaster program is a slush fund. Really? A slush fund? Let's review the facts. In the last 3 years, every State in the Nation has received disaster payments--none of it budgeted for, none of it paid for. In this bill disaster assistance is budgeted for and paid for. That is a reform and that is a fact.

One of the things I am most interested in is the Senator suggested millionaires could still get farm program support under this bill. Yes, and lightning strikes once in a while, too. Because that is what it would take for a millionaire to get support under this program. I have just gotten results from the IRS moments ago because I wanted to know, with the new limits put in place--which, by the way, are very dramatic reform. It used to be, under current law on nonfarmers, they had a limit of $2.5 million of adjusted gross income before they would start to lose farm program payments. We have reduced that for nonfarm income to $500,000.

There is another limit for farm income. Farm income, that had no limit in the past, now begins a limit at $750,000, at which, of that adjusted gross income, farm income of that amount, you lose all of your direct payments. But the two could go together. In other words, you could have somebody with $750,000 of farm income and $500,000 of nonfarm income, and still be under the limits. So I thought, wouldn't it be interesting to find out how many farmers in the country would be in that category--$750,000 of farm income and $500,000 of nonfarm income--because that is what the press is all talking about. They add the two together and then they double it because of a spouse. Do you know how many are in that category in the whole United States? How many would have $500,000 of nonfarm income and $750,000 of farm income?

Do you know how many the IRS has reported to me there are in the entire United States? Zero. None. So much for the argument from the Senator from New Hampshire. Facts are stubborn things.

Let's go to the essence of this bill. Why do we need support for farmers at all? It is a legitimate question. The Senator asked why don't we do it for the guy who has a shoe store? Why don't we do it for the guy who has some other small business? Here is the reason. Because we are in a world economy in which our major competitors have made a decision to strongly support their producers--far more strongly than we support ours.

Our major competitors in world agriculture are the Europeans. This is how much they spend to support their producers: $134 billion. This is after the so-called cap reform in Europe that dramatically reduced what they do. This is where they wound up: $134 billion.

Here is where we are: $43 billion. So they are outgunning us over 3 to 1 on support to their producers over what we do for ours.

OK, I had an interviewer say to me: That is wrong. Maybe it is wrong but it is reality. What would happen if we yanked this support out from under our producers when our major competitors are providing three times as much support to theirs? We did an analysis. Do you know what we found? Here would be the result. Two words: Mass bankruptcy. Because if your major competitors are providing three times as much support to their producers as we provide to ours and we yank the rug out from under ours, guess what happens: The Europeans take over world agriculture.

Wouldn't that be great, if we became dependent on foreign food the way we are dependent on foreign oil? That is what the critics of this agriculture policy apparently would prefer. But those of us who have studied it and those of us who have fought to ensure that we retain a strong agriculture component in this country have concluded that would be a disaster for the American economy, for American consumers, and that would be a disaster for our farmers and ranchers.

Where does the money go in this bill? We have looked at, and just received, a final analysis. Two-thirds of the spending in this bill goes for nutrition--two-thirds of the money in this bill. This is the absolute low-ball estimate of what goes for nutrition. You could do an analysis that would take it up to as much as 73 or 74 percent. It depends on what you include and exclude. We have tried to do this based on CBO analysis of the final scoring of this bill.

Nine percent goes for conservation. Only 13.9 percent goes for commodities, that is the support for farmers and ranchers, and about 8 percent for crop insurance. That is where the money goes.

When the other side asserts that this increases the deficit and it is not paid for, they are making things up. They are making things up. Because this is the score by the Congressional Budget Office. Here it is. This is not KENT CONRAD's numbers. This is not the Agriculture Committee's numbers. These are the numbers of the Congressional Budget Office and the Joint Committee on Taxation. They are independent. They are professional. They are nonpartisan. They are responsible for the scoring of all legislation before the Congress of the United States, and here is their conclusion. Over 5 years, this bill saves $67 million. Over 10 years, it saves $110 million. So all the spending has been offset, has been paid for. In fact, we have done a little bit more. So the net result is to actually reduce the deficit over 5 years by a modest amount--$67 million; over 10 years by $110 million.

But these are facts. This is not make believe. This is not make things up. This isn't the administration saying there is $20 billion here above the baseline--that is all made up. We are dealing with facts. We are dealing with reality.

When I hear them make these claims that we did not address the administration's concerns--we spent hour after hour after hour in this conference committee, attempting to address administration concerns. I think we did a pretty good job. The reality is the administration changed their stated concerns so often it was hard to keep track of what their priority was. In fact, at the end they came to us and said they had no priority, that all of their demands were nonnegotiable, that all of them should be treated with equal importance.

I have never negotiated with any administration on anything that came in with a list of nonnegotiable demands and said everything had the highest priority, but here is what we tried to do. They said we had to limit any additional resources to $10 billion. We agreed to that. They said it had to be offset with spending cuts. We agreed to that. They said that the adjusted gross income limits for farmers and nonfarmers had to be reduced significantly. We did that. They said there had to be beneficial interest reform to avoid the kind of scandal you saw in Katrina. We did that.

The Senator from New Hampshire said we did not, that a farmer could simply pick the right time to market his crop and avoid the consequences of any kind of reasonable restraint. That is not--they have not read the bill. In the bill we give the administration special authority in a disaster to prevent the Katrina abuse we all saw. In addition, we added an additional reform requiring a 30-day moving average for prices before somebody could fix their marketing loan. That is a very significant reform. Yet it is very clear, the critics have never bothered to read the bill.

We also were asked by the administration to provide a revenue countercyclical program, and we did.

They asked us to provide planting flexibility. And we did. They asked us to provide food aid flexibility. And we did. They have a series of miscellaneous provisions we tried to honor, including limitations on privatizing food stamps; Cuba trade provisions; out-of-lease fees. We answered each one of those objections.

It does not stop there. Because we have heard the critics say there is no reform, no reform in this bill. I will tell you, that is the biggest fiction of all. That is the biggest fiction of all. Let's talk about the reform that is in this bill.

First, significant adjusted gross income limit adjustments to prohibit payments to Manhattan millionaires. That is in this bill. We required payments to be attributed to living, breathing human beings instead of paper entities. We eliminated the three-entity rule that allowed paper entities to evade payment limits.

We cut direct payments by $300 million. We produced schedule F reform that will save $479 million. We reformed crop insurance, saving $5.6 billion. We decreased support for corn-based ethanol, saving $1.2 billion. We prohibited payments to cowboy starter kits and ranchettes.

We reformed disaster assistance so that it is budgeted and paid for. I might also add, we reformed disaster assistance so we would prevent what happened in the bad old days where somebody could have a loss on one part of their operation and gains on another part and still get a disaster payment. That is all over. If you do not have, on your whole farm, disaster losses, you will not get a disaster payment in the future. That is reform.

Facts are stubborn things. In short, we have gone the extra mile to address the administration's legitimate requests and provided reform in this bill.

I wish to take a few minutes to address three other claims the administration has made, because they are especially egregious and false.

The administration's spokesman said:

At a time of record farm income, Congress decides to further increase farm subsidy rates.

More fiction. Here is the fact. The conference proposal does not increase subsidies at times of record farm income. To the contrary, the conference proposal: cuts direct payments by $300 million, reduces commodity spending by $3.5 billion, reduces the ethanol tax credit by $1.2 billion.

The conference proposal only pays producers if prices collapse or when there is a loss of production. I am talking now about marketing loans. I am talking about the countercyclical program. Let me give you an example of what they are talking about.

They say we have increased farm subsidy rates at a time of record farm income. Let me give this example to show you how truly absurd that statement is. Wheat prices now average about $8 a bushel. Okay. That is what you get when you go to market. You go to sell, you get about $8 a bushel for wheat. We increased the loan rate from $2.75 to $2.94. We increased the loan rate from $2.75 to $2.94. We increased the target price from $3.92 to $4.17.

Obviously, neither one of those has any application when prices are high. The only way you would get the benefit of these safety net proposals is if prices were to collapse. We have not increased the support when prices are high; we have strengthened the safety net in case prices collapse. Facts are stubborn things.

In fact, the only one--the only one--who is a party to these negotiations who talked about increasing support when prices are high was the administration. They proposed increasing direct payments by $5.5 billion. Those are payments that would go out to farmers at a time of high prices. Facts are stubborn things.

When they say there has been no reform in this bill, here is the total spending under the farm bill compared to total Federal spending: less than 2 percent of Federal spending, and the support for commodity programs is one-quarter of 1 percent of the entire Federal budget; one-quarter of 1 percent.

When we wrote the farm bill in 2002, the estimates were that commodity programs would take three-quarters of 1 percent of all Federal spending. So support for commodity programs has been cut by two-thirds. That is a dramatic reform. Where did the money go? All of the new money, the $10 billion we are above baseline here, has been paid for by other spending cuts. All of it went to nutrition.

Now, on the disaster program--I want to end on this note--here are the States that got disaster payments over the last 3 years. Texas qualifies too, because it got payments. So every single State, and Guam, plus Puerto Rico, got support under the disaster program. None of it budgeted for, none of it paid for. In this disaster proposal, we budget for it and we pay for it. And to have the former chairman of the Budget Committee suggest this is a slush fund--no, no, no. What this is is being responsible. That is what this is called, because we know there are going to be disasters. We do not know what they are, we do not know where they are going to occur, but we know they will occur. Instead of leaving it out, putting it on the charge card, we budgeted for it and paid for it. This disaster program is not only budgeted for and paid for, it also will only go to people who actually have disaster losses. It also requires them to have crop insurance.

The CBO scoring proves this will increase the use of crop insurance, which is good for taxpayers as well as farmers.

One other thing that is very important to understand. This will protect against cuts in conservation. Because the one time they did pay for disaster programs, where did they take the money? They took it out of conservation. What a shortsighted approach that was. We have hopefully prevented that from happening again.

I am extremely proud of the product that has been produced by this group of Senators and Congressmen on a bipartisan basis. I thank our chairman, Chairman Harkin, for bringing a vision of change to this farm bill. Without that vision, without his passion for it, without his pushing for it, moving in the direction of a greater emphasis on conservation, it would never have happened; and to our ranking member, Senator Chambliss, who has been a strong guiding voice throughout these deliberations. He is somebody I formed a very close working relationship with as we wrote this bill. He has had the best interests not only of farmers and ranchers, he has had the best interests of this country foremost in his mind every step of the way. This country and certainly his State owes him an enormous debt of gratitude. We thank Senator Chambliss for the extraordinary time and effort he has put into this bill.

To Chairman Baucus, the chairman of the Finance Committee, who has been such a rock throughout this process, who provided strong leadership at every step of the way, and helped provide the financing, along with the ranking member of the Finance Committee, Senator Grassley, who also participated in hour after hour, day after day, week after week, of deliberations to form a bill that was responsible, and who provided much of the push to get these reforms adopted.

Now, I recognize this does not have all of the reforms certainly the Senator from Iowa would have liked, but we would never have gotten this much without his pushing. Chairman Peterson, on the House side, no one worked harder to get this result. I applaud him for the remarkable vote in the House today. The legislation passed there 318 to 106. That is in the face of a Presidential veto threat.

The ranking member, Congressman Goodlatte, whom I came to have great respect for in these discussions; thoughtful, responsible, rational. Chairman Rangel, who helped us with the funding so we could pay for this bill without any tax increase.

Congressman Pomeroy, the only Member of the House to serve on both Ways and Means and the House Agriculture Committee, who played such an important role.

In the Senate we cannot forget those other Members who played such key roles: Senator Leahy with the dairy provisions, former chairman of the committee; Senator Stabenow, who is, in large part, responsible for the dramatic improvement in the treatment of specialty crops that are such an important and growing part of American agriculture; and Senator Lincoln, Blanche Lambert Lincoln. I tell you, her constituents have got a fighter in their corner every day. Nobody is a more aggressive fighter for her folks than the Senator from Arkansas.

Before I end, I wanted to say a few thanks to staff as well, because this has been an effort that has gone on well more than a year. I want to thank my own legislative director, Tom Mahr, who played such an important role in making this all work financially. Jim Miller, my lead negotiator. Jim Miller has given body and soul to this effort. I am so proud of him. He is an encyclopedia on agriculture. He is also extremely adept with the numbers. I estimate Jim Miller has spent 3,000 hours on this effort.

I also want to recognize Scott Stofferahn, who is my other lead negotiator, who is the father of these disaster provisions, worked with the agriculture commissioners around the country to come up with the provisions for this reform.

John Fuher of my staff who is a young man who came on this team and brought his ``A'' game. Joe McGarvey, who does the energy work on my staff. Miles Patrie, who worked on the nutrition provisions. My deepest appreciation for their extraordinary effort. Day after day, night after night, weekend after weekend sacrificed.

To the chairman's staff, Mark Halverson and Susan Keith, who have spent--I would not even know how to calculate the time and effort. I do know Mark Halverson has gone gray in the effort.

The Finance Committee staff, as well. Before I mention them, I wish to single out the extraordinary staff of Senator Chambliss: Martha Scott Poindexter, Vernie Hubert, Hayden Milberg. What first-class people. These are the kinds of public servants who deserve everyone's respect.

On the Finance Committee staff, Russ Sullivan, Cathy Koch, Rebecca Baxter, Jon Selib, Senator Baucus's legislative director.

Senator Grassley's staff, who are outstanding as well, absolutely outstanding: Elizabeth Paris, Kolan Davis, Mark Prater, first-rate people who did their level best for the American people.

I can tell you, I have never been more proud to be part of an effort than I was to be involved in this one.

I see somebody else on the floor, the former chairman of the House Agriculture Committee, the Senator from Texas--the Senator from Kansas; I was seeing if I could get a rise out of him--Mr. Roberts, who has been of so much importance to this conference effort and to the effort in the Senate Agriculture Committee as well.

I tell you, I am proud of this product. This is a bipartisan product. This is a bipartisan effort. It is good policy and it deserves our colleagues' support.

I yield the floor.

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