FAA Reauthorization Act of 2007 - Continued
Floor Speech
FAA REAUTHORIZATION ACT OF 2007--Continued -- (Senate - April 30, 2008)
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Mr. SANDERS. Mr. President, I think virtually everyone in America understands our country is in extremely difficult straits; that the middle class is collapsing; that poverty is increasing; and that one of the immediate factors that is driving so many Americans over the edge is outrageously high energy prices.
This impacts every community in America, but it especially impacts rural States such as the State of Vermont, where workers are forced to drive long distances to work and end up spending an inordinate amount of money at the gas tank.
It is not uncommon in my State for people to travel 100 miles a day to work and back. If you do the arithmetic, you will find that in many cases, as oil prices and gas price have risen, people today are paying $1,000 a year more than a year and a half ago to fill up their gas tanks.
If you are a worker earning $30,000 or $35,000 a year, and you got a 3-percent increase in your wages, that is pretty good; in some cases all of your wage increase is going down that gas tank. You have to pay higher health care costs, higher educational costs, higher property taxes, and you are in a lot of trouble, which is why the middle class in America is, in fact, shrinking significantly.
Not only is this a major crisis in terms of what is happening at the gas pump, there is also severe worry about what happens next winter when people have to fill up their home heating oil furnaces and stay warm in the winter in States such as Vermont.
I can tell you that all over my State, a lot of senior citizens and other people are extremely worried about how they are going to stay warm next winter with the price of home heating fuel soaring to the degree it is.
Meanwhile, while prices at the gas pump are soaring, while home heating oil and diesel fuel are soaring, the profits of huge oil companies are going up to recordbreaking levels; hedge fund managers make billions speculating on oil futures, and OPEC continues to function as a price-fixing cartel in violation of World Trade Organization rules.
The average price for a gallon of gas recently hit a record breaking $3.60 a gallon, which has more than doubled since President Bush has been in office. The price of diesel fuel is now averaging over $4.17 a gallon, which is a $1.36 more than a year ago, and the price of oil is well over $114 a barrel. These prices say it all. What they say is we have a national emergency on our hands. It is absolutely imperative for the Congress to begin to act in order to lessen this onerous burden on tens of millions of families. These record-breaking oil and gas prices at the pump are impacting not only consumers of oil and gas but, obviously, our entire economy. They are impacting family farmers, small businesses, airlines, grocery stores, restaurants, tourism and, of course, the price of food. This national oil emergency demands both short-term and long-term solutions.
One of the issues that concerns me is, I hear people getting up and saying: Long term, we have to transform our energy system away from fossil fuel to energy efficiency and sustainable energy. There is nobody in the Senate who believes that more than I do. We are on the cusp of a major transformation of our energy system. We need an Apollo-type project to invest heavily in wind, solar, and geothermal energy efficiency. We can do that. In the process, we can create millions of good-paying jobs. We have made a start in that direction, but we have not gone far enough. But to say we must focus on long-term solutions does not mean we can ignore the immediate crisis. Yes, we have to break our dependency on fossil fuel, but that is not going to solve the problem for a worker in Vermont who is paying $3.50 for a gallon of gas today. We have to address his and her problem as well. So it is not either/or. Yes, we break our dependency on fossil fuel and move to sustainable energy, but we also address the crisis of today. We tell workers all over this country that we understand they cannot afford to pay outrageous prices for gas.
There have been literally dozens of ideas from both sides of the aisle, good ideas, an understanding of the crisis as to why oil prices are soaring and also good ideas as to how we might solve the problem. I applaud all of those Senators who have come up with ideas. But it seems to me if we are going to be successful in helping the average American, we have to come forward with a comprehensive package. It is not good enough to say: I have an amendment in this bill and I have some language in that bill which may come about in 2 years or may never come about, and I have something over there. What we need is a comprehensive piece of legislation which understands the cause of this crisis is not just one thing--it is a multipronged problem which is causing oil prices to soar, and we will not solve this crisis through one simple action. We need a series of actions, but we have to bring our solutions together in a comprehensive package which says to the American people if that package is passed, oil and gas prices are going down. That is what we need to do.
I have been working with a number of my colleagues in order to do that. Let me briefly talk about what I believe should be in that package. It is about four provisions that could play a major role in lowering gas prices today. First, we need to impose an excise tax on the profits of the oil and gas industry. The American people simply do not understand why they are paying record-breaking prices at the pump while ExxonMobil has made more profits than any company in history in the last 2 years. Last year alone, ExxonMobil made $40 billion in profits, and they rewarded their CEO with a $21 million package in total compensation. A couple of years ago, they rewarded their former CEO, Lee Raymond, with a retirement package of $400 million. But it is not ExxonMobil alone. We have seen BP come in the other day with a 63-percent increase in their profits. Shell made a huge increase in their profits.
Since President Bush has been President, the five largest oil companies have made over $595 billion in profits, and that number is only going to go up as the oil companies report last quarter's profits. Last year alone, the major oil companies made over $155 billion in profits. People are sitting at home saying: I can't afford to fill up my gas tank to go to work, and ExxonMobil and Conoco and Shell, all the big oil companies, are making huge profits. What is the Congress doing about it?
Well, up to now, the truth is, the Congress is doing nothing about it. Obviously, the President is not doing anything about it. But I think most people understand the President and Vice President are never going to do anything to represent the interests of ordinary Americans. The question is, what do we do about it? The time is now that we should move forward with an excise profits tax. If we enacted a 23-percent excise tax on oil company profits, that would bring in about $35 billion this year. That sum of money would be enough to provide a 6-month suspension in Federal gas and diesel taxes and would also allow States to suspend all or part of their gas and diesel taxes as well. In other words, we are not just talking about Federal taxes; we are talking about State taxes. That would lower gas prices at the pump by almost 37 cents a gallon and up to 48.8 cents for diesel during the next 6 months. Is that going to solve all of the problems? No. But if you can't afford to get to work right now, it will help. Having an excise profits tax on the oil companies is only one of the things we should be doing.
Congress has to also address another area where there is strong evidence that speculators, both in hedge funds and in other financial institutions, are driving the price of oil to outrageously high levels. What we have to address is undoing the so-called Enron loophole. This loophole was created in 2000, as part of the Commodities Futures Modernization Act. At the behest of Enron lobbyists, a provision in that bill was inserted in the dark of night with no congressional hearings. Specifically, the Enron loophole exempts electronic energy trading from Federal commodities laws. Virtually overnight the loophole freed over-the-counter energy trading from Federal oversight requirements, opening the door to excessive speculation and energy price manipulation. Of course, nobody knows exactly what the impact of the Enron loophole is. But we do know huge amounts of money are being made, not simply in the production of oil but in driving oil futures prices up.
Let me quote Stephen Simon, a senior vice president of ExxonMobil, on April 1, 2008, in recent testimony before the House:
The price of oil should be about $50 to $55 per barrel.
Right now it is more than double that. He attributes the addition, the almost doubling of the price, to speculation that is taking place.
Closing the Enron loophole would subject electronic energy markets to proper regulatory oversight by the Commodity Futures Trading Commission to prevent price manipulation and excessive speculation. I applaud Senators Levin, Feinstein, Dorgan, and others who have focused on this issue. In addition to an excise profits tax on the oil companies, we must go after the speculation on the part of people within hedge funds and in the financial institutions industry who are simply playing games, making money, and driving the price of oil up. Those are two important steps we must take to lower the price of gas and oil.
Thirdly, the Bush administration must stop the flow of oil into the Strategic Petroleum Reserve and, in fact, release oil from this Federal stockpile. At a time of record-breaking prices, it makes no sense to continue to take oil off the market and put it into the Strategic Petroleum Reserve. This is not just my opinion. We have seen staff at the Strategic Petroleum Reserve recommend against buying more oil for the SPR in the spring of 2002. This is not a new idea. The truth is, this is an idea that has been used before under Democratic and Republican administrations. For example, when President Clinton ordered the release of 30 million barrels of crude oil from the SPR in 2000, the price of gas fell by 14 cents a gallon in 2 weeks. When the first President Bush released 13 million barrels of crude oil from SPR in 1991, crude oil prices dropped by over $10 a barrel. This is an approach which has been used in the past. It has worked in the past, and it is something we should do right now. That is the third provision I believe we should undertake.
Further, and in terms of where I think the comprehensive package should be, we must begin to address the OPEC cartel. I hear a lot of folks around here talk about the wonders of the free market and capitalism and free enterprise. But every single Member of the Senate understands that by definition, OPEC is a cartel. That is what they are. They are a group of oil-producing nations that come together to control oil production, to limit oil production, and, therefore, to artificially raise the price of oil. That is what a cartel is, and that is what OPEC is doing.
In that regard, we have to do two things. No. 1, the President must file a complaint with the World Trade Organization. The truth is, OPEC itself is a violation of the rules of the WTO which is presumably about creating the free flow of goods and free trade. On the surface, OPEC is in violation of those rules and agreements. The second thing we must do is to tell people in Saudi Arabia, Kuwait, people whom American soldiers died for in 1991, when Saddam Hussein invaded Kuwait: Friendship is a two-way street. We protected you in 1991. Now the United States economy and much of the world's economy is in serious trouble. What you, Saudi Arabia, have to do is increase the production of oil.
My understanding is that right now Saudi Arabia is producing less oil than they did 2 years ago. There are experts who believe Saudi Arabia can produce almost 2 million barrels a day of oil more than they are currently producing.
So that is where we are. Where we are right now is, we have a national crisis. We have working people suffering and wondering about how they are going to be able to afford to get to work or keep warm in the wintertime, at the same time as oil companies are enjoying recordbreaking profits, and at the same time as speculators are making billions and billions of dollars in profits.
Now, it is no secret--everybody knows--that the oil and gas industry is enormously powerful. Everybody understands these people have spent hundreds of millions of dollars in the last 10 years on lobbying, and we know their lobbyists are hard at work at this very moment. We know those people have contributed hundreds of millions of dollars in campaign contributions. That is the reality and that is the American political system. That is the way it is. It is a system we have to change, but that is the way it is.
I think the time is now for the Congress and for the Senate to begin to stand up to these very powerful special interests. I think we need a comprehensive energy approach, and I have outlined it. I think we need a long-term approach moving away from fossil fuels to sustainable energy. I think we need a short-term approach, and I have outlined the four provisions I believe should be in it.
Let me conclude by saying this: The crisis we are facing as a nation is not just an energy crisis. It is a crisis as to whether the American people have faith in their own Government, in the people they elect. It is no secret that the President's approval ratings are perhaps as low as any President in American history, and the approval ratings of this Congress are even lower. That is the simple reality.
We are a democratic society. When people have problems, they look to their elected officials to respond to those problems and, hopefully, to address them. If we cannot do that, I am not quite sure why we are here. If the oil companies and the gas companies are so powerful with all of their money and their lobbyists and their campaign contributions that we cannot address the crisis facing working Americans, well, maybe we should rethink about what we do here.
But I think we can do something, and I have outlined what I think is a series of ideas that, if passed, would address, in a very significant way, this crisis. I look forward to working with my colleagues to do just that.
Mr. President, I yield the floor and suggest the absence of a quorum.
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