CONSUMER-FIRST ENERGY ACT OF 2008--MOTION TO PROCEED--Continued -- (Senate - June 10, 2008)
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Mr. GRASSLEY. Mr. President, I congratulate the Senator from South Dakota. He is expressing a very simple law that everybody learns in economics 101: If you increase supply, it reduces price; if you restrict supply, price goes up. What we want to do is increase the supply of energy.
For myself, I want to explain earlier today my vote to invoke cloture on the motion to proceed to S. 3044, the so-called Consumer-First Energy Act or, another title, the antiprice-gouging bill. I want to explain it because people might think that I am in support of everything in the legislation. I will explain why I wasn't, but why I thought we ought to move forward.
The legislation includes provisions that I have long supported, including the no oil producing and exporting cartels legislation. I am an original cosponsor of the NOPEC bill. This bill would authorize the Department of Justice and the Federal Trade Commission to bring lawsuits against oil cartel members for antitrust violation because it is a fact of American law, if oil companies were doing the price fixing that OPEC countries do, these executives would be in jail. Yet we are faced with the same anticompetitive environment from other countries.
As our gas prices continue to rise, it is time to say enough is enough to OPEC anticompetitive activities. It is past time to let OPEC know that we are committed to stopping illegal pricing, the same illegal pricing that would put CEOs of major oil companies in jail.
This legislation also includes provisions aimed at reducing speculation in oil markets. I support that. I can't say for certain whether the provisions included in the bill will have the desired effect. I can say, however, that something needs to be done to address what seems to be out-of-control speculation in crude oil markets, and speculation of crude oil tends to show up on the business pages of the newspaper as a major cause of the increase in oil and, in turn, gasoline.
I am pleased that recently the Commodity Futures Trading Commission has taken steps in recent days and weeks to increase their access to data and information that will hopefully allow them the proper oversight and transparency of energy markets. Take a little bit of speculation, take a little bit of unknown out of the market, more transparency ought to help our markets work better.
In conjunction with what the Commodity Futures Trading Commission is up to and my wanting to build on what they are doing, I asked Acting Chairman Lukken and Commissioner Chilten very pointed questions during a recent confirmation hearing in the Agriculture Committee on the CFTC's oversight responsibilities. In addition, I sent a letter to the CFTC today seeking more information about the CFTC's action to rein in speculation by investment banks and traders on foreign exchanges.
I voted today as I did in a manner uncustomary of Republicans to proceed to the bill because I think we need to have a debate on the critical issue of energy prices. However, that doesn't mean I support everything in S. 3044. The bill, for instance, included a windfall profits tax on oil companies. I saw firsthand a couple decades ago the result of a windfall profits tax the last time it was enacted. It didn't do anything to produce more energy. Simple economics: You tax something, you get less of it. Why would those on the other side believe if you tax energy production, you would get more energy produced? Of course, it is counterintuitive. Yet this bill doesn't include a single provision to increase the production or supply of traditional energy resources. Why aren't we considering policies to develop the resources that God gave us at home? We have a huge supply of oil and gas in Alaska. We could be opening areas of the Outer Continental Shelf to exploration. We could be looking at Federal lands onshore for energy production. These are things we could do this very day that would increase supply and drive down prices. Yet they have been blocked time after time by people on the other side.
If you think this is a partisan shot by a senior Republican, let me suggest to you that I can show you rollcall after rollcall after rollcall, not just recently but over a long period, of opposition from the other side to increasing the supply of fossil fuels and the use of fossil fuels we know. My constituents need to know why they are paying $4 at the gas pump. Yet we in Washington have done little to increase our own supplies.
Speaking from the grassroots of the State of Iowa, I want to remind my colleagues of what I said last week on the floor of the Senate. Of at least 14 out of the 17 town meetings I have had, the question came up very simply: Why aren't we producing more oil? Why aren't we going where the oil exists, with $4 gas? I can give a simple answer, and I tell the people ahead of time in my town meetings. I try not to make partisan comments, but occasionally I think I can when it is intellectually honest to do it. I suggest to them that there is opposition in the other party to more exploration, where we know there is oil. We just don't have the votes to get the job done.
That could be considered a partisan shot, but I think I can back it up with rollcalls. It is a justification to my constituents when I am asked why we don't drill more where we know there is oil. Most of my constituents expect you to do this in an environmentally sound way as well. That doesn't, to me or my constituents, appear to be incompatible because the United States is dependent upon oil cartels and foreign countries such as Iran and Venezuela, very unstable, yet we have done nothing to help ourselves. That is the way my constituents see it, as evidenced by 14 out of 17 town meetings I held during the week of Memorial Day.
In the other three town meetings, it just did not happen to come up.
I believe oil is trading today at around $135 a barrel. Yet there is an overwhelming aversion to environmentally sound resources developed at home. We ought to be developing our domestic resources. There is no rational reason not to, and at $4-a-gallon gas, consumers ought to be outraged they are not exploring for more domestic resources, and Congress making decisions to do that, and to do it so quickly that it is telling people why it is not being done. At the grassroots of America, we ought to be having the same march on the Capitol as when people are outraged about other things, which we do not seem to be having this time.
Maybe we will have this outraged expressed. It is a little bit of a quandary to me why, at the grassroots of America, when gas goes from $3.50 to $4, or from $3 to $4, it does not seem we are having as much outrage as we had when gasoline was going from $1.50 to $1.75 about 4 years ago. Maybe it is because people have lost confidence in Congress. I do not know. I can understand why you can lose confidence in Congress when you have $4 gasoline and we know where there is 13 billion barrels of oil in this part of the country and 7 billion barrels of oil in other areas of the country and we are importing 10 to 15 million barrels of oil a day and paying out to some foreign country money that if we drilled in the United States we would keep in the United States.
The bill I am explaining to you takes billions of dollars of permanent tax provisions and dumps them into a special piggy bank designed to let appropriators dole out special interests checks for their favorite spending projects. I know the rhetoric you have heard today is to make big oil pay to lower the price of gasoline. But I can promise you, there is absolutely nothing in this bill that accomplishes that charge. This bill, flawed as it is, would have to be amended. Any permanent tax provisions on the backs of the energy industry should immediately go back into tax benefits that expand conservation and clean energy tax provisions currently in the Internal Revenue Code.
We cannot put the cart before the horse. It is irresponsible to change taxes for future undisclosed spending. It is even more irresponsible to do this before we make certain the current tax benefits available for wind, solar, alternative fuels, and much needed conservation in buildings and homes.
It was wrong for the Democratic leadership to dump permanent tax provisions into a slush fund for future appropriations. But those types of wrongs cannot be fixed if we never proceed to the bill, hence why this Senator voted as I did today, contrary to what a lot of the members of my party did.
HOUSE EXTENDERS BILL
I turn now to the tax extenders bill. I voted today on the second rollcall along with 43 other Senators against invoking cloture on the motion to proceed to H.R. 6049, the House extenders bill.
Earlier today, the Democrat leadership released a description of a substitute extenders bill that included many provisions that were not extenders.
As you know, I joined Senator McConnell in filing an extenders bill last Friday that is not offset by increases in taxes elsewhere because it is our policy that if you extend existing tax policy, you should not have to raise taxes on somebody else for an extension of tax policies that in some instances have been in place for 20 years.
Here are some of the reasons, then, why I opposed the Democratic leadership bill and support the Republican leadership bill.
The Senate Democratic leadership bill contains numerous provisions that do not either extend or make permanent expiring tax provisions. On the other hand, the Republican bill really is an extenders bill, with all the provisions in the Senate bill extending or making permanent expiring tax provisions.
Included in the Senate Democratic leadership bill is a proposal to give $1.2 billion in tax credits to New York City, even though New York City does not pay Federal tax. This proposal is widely reported to fund the building of a train from Manhattan to John F. Kennedy Airport, through the use of New York Liberty Zone tax credits.
According to the Joint Committee on Taxation, the Congress has never--and I want to emphasize ``never''--before provided a limited tax benefit such as this to a governmental unit.
In addition, the bill provides a new $1.6 billion tax benefit just for trial lawyers. Now, think about that. We are trying to extend tax policy to bring economic development and create jobs, and it has something in it for trial lawyers. It allows trial lawyers to deduct their upfront expenses in contingency fee cases, even though they expect to recover them when they win or settle the case. And these trial lawyers do expect to win or settle their case; otherwise, they would not take the case on a contingency fee basis.
So why should trial lawyers get a deduction for something they expect to get back? We do not give lenders a current deduction when they make a loan. Some would argue that this is a large chunk of pork that the Democratic leadership bill is trying to feed to trial lawyers.
The Democratic leadership bill, for the first time in history, makes tax benefits directly conditioned on the Davis-Bacon Act. That is the prevailing wage requirement. It is added to a new provision called the New Clean Renewable Energy Bonds.
The Senate Democratic leadership bill only extends provisions that expire at the end of 2007 until the end of 2008, setting up another extenders fire drill early next year. In contrast, our bill on the Republican side generally extends provisions that expired at the end of 2007 until the end of 2009.
The Democratic leadership bill contains permanent tax provisions to offset temporary extensions of current law. Anonymous Democratic lobbyists are misstating the Republican position on offsetting expiring tax relief provisions. The lobbyists have been quoted in the Roll Call newspaper and other publications stating that part of the Republican theology is opposition to offsets.
Republicans will support offsets if they make sense on the policy merits. If the revenue-raising proposals make policy sense and offset the revenue loss for new tax policy--I want to emphasize ``new tax policy'' as opposed to extending existing tax policy--then it will likely garner majority support among Senate Republicans.
However, one of the revenue raisers in the Democratic leadership bill is a proposal to delay the effective date of the worldwide interest allocation rules. This provision was enacted in the American Jobs Creation Act of 2004, with a delayed effective date for revenue purposes.
The decision to reform the interest allocation rules was bipartisan back then in 2004. The reform came out of the Finance Committee working group set up by Chairman Baucus in 2002 and passed the full Senate by a vote of 92 to 5. So after a vote of 92 to 5--bipartisan--why would they try to undo a very important provision in it? The current rules actually penalize domestic manufacturers who compete in global markets by making it more likely they will be double taxed on their foreign income.
The Senate Democratic leadership bill would delay the effective date even further--can you believe it--by 9 years, giving it an effective date of 2018. This provision raises almost $29 billion over 10 years.
The President of the United States, aware of how important this provision is that is going to take effect in 2009--that was actually passed in 2004 to make our manufacturing competitive with international competition--issued a statement of administration policy noting that ``the Administration strongly opposes the provision in the bill that would subject U.S. companies to continued double taxation by delaying the effect of new rules for allocating worldwide interest for foreign tax credit purposes.''
Let's look at the Senate Republican alternative. I hope people listening know that a minority in the Senate has a responsibility to have alternatives, not just jab at the majority position. So we have this responsible alternative. It contains alternative minimum tax relief and extensions of individual and business tax provisions, but with no offsets, following the philosophy we have that if you have had tax policy in place for decades that tends to sunset from time to time--it has been on the books--you should not have to raise taxes on new people to extend it for a few more years. So there are no offsets for the continuation of existing tax policy.
It also includes the Ensign-Cantwell energy tax incentives, an unoffset provision which was approved by the Senate by a vote of 88 to 8. This means an overwhelming majority of this body were willing to pass energy extenders without requiring offsets.
So why, if we have a vote of 88 to 8 to extend energy tax credits for a few years, and we do not have to offset it--how does the other side get the idea that if you had other tax policies that maybe have been on the books for decades and sunset, you have to have offsets for that? I do not understand the inconsistency.
The bottom line is, we need a package that can garner 60 votes in the Senate and get a signature by the President of the United States. So Senate Republicans will seek to proceed to the Senate Republican leadership bill which contains a package of proposals that have bipartisan agreement.
Mr. President, I yield the floor, and since I do not see other Members ready to speak, I suggest the absence of a quorum.
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