Ensuring Tax Exempt Organizations the Right to Appeal Act

Floor Speech

Mr. McCAIN. Mr. President, I wish to thank the Senator from New
Hampshire for her support and continuing efforts to get rid of this
wasteful, pork barrel, outrageous program that has cost the taxpayers
tens of millions of dollars and with regard to the catfish office
alone, about $20 million to date. As the Senator from New Hampshire
pointed out, this could put the entire TPP--Trans-Pacific Partnership--
Agreement in jeopardy. So this has a lot more to do with just catfish
here; it has a lot to do with our international relations and the
prospects of concluding or not concluding one of the most important
trade agreements arguably of the 21st century, obviously.

I am pleased to join my colleagues, Senators Shaheen, Ayotte,
Isakson, Kirk, Crapo, Risch, Casey, Reed, Peters, Wyden, Warner,
Cantwell, and McCaskill, in introducing this amendment, which has
already been made pending to the trade promotion authority act, which
would repeal a proposed Catfish Inspection Program at the U.S.
Department of Agriculture. The amendment would end the waste of
taxpayer money pouring into the creation of a USDA catfish office,
which is about $20 million to date. It would also save American farmers
and livestock growers from potentially losing billions of dollars in
lost market access to Asian nations.

As the Senator from New Hampshire pointed out, I have been fighting
this catfish battle for a long time. I first tried to kill an old
catfish-labeling program in the 2002 farm bill. Later, during the
Senate's debate on the 2012 farm bill, I offered a similar amendment to
repeal this new catfish program, which was adopted by voice vote. But
when the Senate took up the 2014 farm bill after failing to pass it in
2012, I was blocked from having a vote by the Democratic manager
despite her assurances that my amendment would receive a vote.

I note that my dear friend from Mississippi is here, and I know there
may be others who will want to preserve this $14 to $20 million waste
of taxpayer dollars. All I want is a vote. All I am asking for is an
up-or-down vote on whether we should continue to squander millions of
taxpayer dollars on a program that is not only duplicative but
endangers the entire Trans-Pacific Partnership Agreement we are
discussing today.

American agriculture is the heart of our efforts to pass TPA,
particularly as negotiators move closer to completing the Trans-Pacific
Partnership Agreement. TPA can put wind in the sails of the 12-nation
TPP, which will promote hundreds of billions of dollars of American
exports, including beef, pork, poultry, soy, wheat, vegetables, and
dairy products. The TPP covers an area of the world that accounts for
about 40 percent of global GDP and one-third of all trade. The TPP will
strengthen our security relationships with countries such as Japan,
Malaysia, Vietnam, and Australia, and provide a strategic counterweight
to Chinese protectionist influence. So it is our responsibility to pass
a trade promotion authority that signals to Asian trading partners that
we are serious about free trade.

Free trade is good for America. I am a representative of a State that
has immeasurably benefited from the North American Free Trade
Agreement.

By the way, many of the same interests and people who opposed that
are opposing this now--i.e., primarily the labor unions.

Here, that means eliminating this catfish program, which is one of
the most brazen and reckless protectionist programs that I have
encountered in my time in the Senate. The purpose of the USDA catfish
office is purportedly to make sure catfish is safe for human
consumption. I am all in favor of ensuring that American consumers
enjoy wholesome catfish. The problem is that the Food and Drug
Administration already inspects all seafood, including catfish.

The true purpose of the catfish program is to create a trade barrier
to protect a small handful of catfish farmers in two or three Southern
States. Let's be clear about what this is all about--protecting catfish
farmers in two or three Southern States. Yet, we are endangering the
entire agreement here. That is not right, and it is not right for the
American people.

In classic farm bill politics, southern catfish farmers worked up
some specious talking points--which will probably be repeated here
today--about how Americans need a whole new government agency to
inspect catfish imports. As a result, USDA will soon hire and train
roughly 95 catfish inspectors to work right alongside the FDA inspector
doppelgangers in seafood-processing plants across the Nation. Experts
say it could take as long as 5 to 7 years for foreign catfish exporters
to duplicate USDA's new program, which would give southern catfish
farmers a lock on the American seafood market.

Growing government is not cheap. To date, the USDA has spent $20
million to set up the catfish office without inspecting a single
catfish. I am not making that up. Moving forward, the USDA estimates it
will spend around $14 million a year once the program is operational.

GAO has investigated this catfish office and warned Congress in nine
different reports--nine different reports to GAO, which is probably
clearly the most trusted organization here--nine different reports. The
catfish office should be repealed. It is wasteful and duplicative. The
FDA already inspects seafood. It fragments our food inspection system.
Nine different reports. One GAO report is simply titled
``Responsibility for Inspecting Catfish Should Not Be Assigned to
USDA.'' The Government Accountability Office has repeatedly found that
catfish inspectors are a phony issue and warned that implementing the
USDA program might actually make food less safe for Americans by
fragmenting seafood inspections across two Federal agencies.

Here are a few GAO excerpts.

GAO, May 2012:

USDA uses outdated and limited information as its
scientific basis for catfish inspection. The cost
effectiveness of the catfish inspection program is unclear
because USDA would oversee a small fraction of all seafood
imports while FDA, using its enhanced authorities, could
undertake oversight of all imported seafood.

GAO, February 2013:

Congress should consider repealing provisions of the Farm
Bill that assigned USDA responsibility for examining and
inspecting catfish.

GAO, April 2014:

We suggested that Congress consider repealing these
provisions of the 2008 Farm Bill. However, the 2014 Farm Bill
instead modified these provisions to require the Secretary of
Agriculture to enter into a memorandum of understanding with
the Commissioner of FDA that would ensure that inspection of
catfish conducted by the FSIS and FDA are not duplicative. We
maintain that such an MOU does not address the fundamental
problem, which is that FSIS's catfish program, if
implemented, would result in duplication of activities and an
inefficient use of taxpayer funds. Duplication would result
if facilities that process both catfish and other seafood
were inspected by both FSIS and FDA.

Even if my colleagues do not care about ballooning government
spending and taxpayer waste, then consider the risk this catfish
program presents to jobs and agriculture exports from their home States
to an area of the world that accounts for 40 percent of the world's GDP
and one-third of its trade.

Ten Asian-Pacific nations have sent letters to the Office of the U.S.
Trade Representative warning that this USDA catfish office is hurting
TPP negotiations. At least one nation--Vietnam--has threatened trade
retaliation if the program comes online.

American trade experts are equally outraged. In a legal opinion
written by the former chief judge at the World Trade Organization--the
chief judge at the World Trade Organization said:

The United States would face a daunting challenge in
defending the catfish rule . . . there was, and still is, no
meaningful evidence that catfish--domestic or imported--posed
a significant health hazard when Congress acted in 2008 . . .
the complete lack of scientific evidence to justify the
catfish rule combines with substantial evidence of
protectionist intent.

He further notes that when it came to creating the USDA Catfish
Inspection Program in the dead of night using a farm bill conference
report--that is interesting, my colleagues; a farm bill conference
report was how this whole thing came about--``Congress shot first and
asked questions later.''

This is perhaps Mr. Bacchus's most poignant warning:

If Congress continues to mandate the transfer of
jurisdiction over catfish, it will not only be inviting a WTO
challenge to the rule; it will be giving other nations an
opening to enact ``copycat legislation'' which will
disadvantage our exports. Moreover, if the United States
somehow prevails in defending the catfish measure in a WTO
case, it will truly be ``open season'' in the rest of the
world for new restrictions on U.S. agriculture exports of all
kinds.

Mr. Bacchus is not alone in his assessment. The Wall Street Journal
has covered this catfish debacle over the years. The Wall Street
Journal has editorialized and reported on this many times.

This past weekend, the editorial board of the Wall Street Journal
penned an editorial entitled ``Congress's Catfish Trade Scam.''

The Wall Street Journal, lead editorial, ``Congress's Catfish Trade
Scam.''

``The U.S. slams a trade partner and raises prices for Americans.''
``Senate Democrats dealt a blow to economic growth Tuesday by
refusing to advance . . . Japan, Vietnam,'' et cetera.

The problem dates to 2002, when Congress barred Vietnamese
exporters from marketing as ``catfish'' an Asian cousin known
as pangasius with similar taste, texture and whiskers. But
that failed to curb American enthusiasm for the cheaper
foreign creature, which is common in fish sticks and often
called ``basa'' or ``swai'' on menus. So in 2003 Washington
slapped tariffs on the Vietnamese fish, claiming they were
``dumped'' into the U.S. market at unfairly low prices.
That didn't work either, so Mississippi Republican Thad
Cochran slipped a provision into the 2008 farm bill to
transfer regulatory responsibility over catfish, including pangasius,
to the U.S. Department of Agriculture from the Food and Drug
Administration. The pretext was public health, but pangasius
posed no risk, and the USDA regulates meat and poultry, not
fish. The real aim was to raise costs for Vietnamese
exporters and drive them from the U.S. market.
Thus was born one of Washington's most wasteful programs,
which the Government Accountability Office has criticized
nine times and estimated to have cost $30 million to start,
plus $14 million a year to operate--as opposed to the
$700,000 annual cost of the original inspection regime. This
is ``everything that's wrong about the food-safety system,''
said former FDA food-safety czar David Acheson recently.
``It's food politics. It's not public health.''
Pangasius imports continue for now as the USDA sets up its
expensive new office, with the fish passing cod and crab last
year to become America's sixth most-popular. (Shrimp is
first.) Meanwhile, Vietnam has threatened to respond to a ban
by demanding the right to retaliate against U.S. beef,
soybeans and other products as part of TPP negotiations and
suing the World Trade Organization, where it would probably
win.
Most Members of Congress understand the damage, but Mr.
Cochran has used his seniority to block repeal. The latest
effort at repeal, sponsored by John McCain and nine other
Republicans and Democrats, could get a vote when the Senate
reconsiders the trade-promotion bill, then would have to go
through the House. Ending catfish protectionism would be a
sign that at least some in Washington are serious about free
trade.

Mr. President, I ask unanimous consent to have printed in the Record
the aforementioned Wall Street Journal editorial.

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Mr. McCAIN. Mr. President, I ask unanimous consent to have printed in
the Record an article dated June 27, 2014, entitled ``U.S. Catfish
Program Could Stymie Pacific Trade Pact, 10 Nations Say''; a letter by
Jim Bacchus dated May 14, 2015; a letter dated May 13, 2015, from the
National Taxpayers Union, Taxpayers for Common Sense, Taxpayers
Protection Alliance, and Council for Citizens Against Government Waste,
all of them urging Congress to repeal the catfish program in TPA; a
letter dated May 14, 2015, from the National Restaurant Association;
and a letter dated April 22, 2015, from the Vietnamese Ambassador to
the Senate Finance Committee.

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Mr. McCAIN. Mr. President, the National Restaurant Association sent a
letter:

On behalf of the National Restaurant Association, I
strongly urge you to support the bipartisan McCain-Shaheen
catfish amendment to the Senate's pending trade related
legislation. . . . As members of the foodservice industry, we
are committed to food safety. However, this new program would
provide no benefit. In fact, the USDA itself has stated that
its Food Safety Inspection Service (FSIS) would not provide
additional food safety protection.
Finally, implementation of this program could strongly
impact U.S. agricultural relations with key trading partners.

The Taxpayers Protection Alliance:

We support your efforts to repeal the program restoring
some measure of fiscal discipline and we urge your colleagues
in the Senate to do the same.

Mr. President, I understand that the parliamentary situation is that
we have a number of pending amendments and that probably it is very
likely that a cloture motion will be filed. That, of course, would then
mean I would not be allowed to have this amendment.

If we do not allow this amendment, I have to say that we will be
really showing a degree of contempt and arrogance for the taxpayers of
America. I have watched this program and this incredible--I have seen
$14 million wasted. I have seen an example of protectionism.

I was told in the last bill on agriculture that I would receive a
vote on my amendment. All I am asking for is a straight up-or-down vote
so we can save the taxpayers $14 million, $20 million, $30 million, $40
million on a program that is both wasteful and not needed.

I understand my colleagues from Mississippi and other Southern States
want to protect their catfish industry, which I have enjoyed many
samples of over the years. I do not understand the rationale for
continuing--particularly under conditions of sequestration--any program
that costs the taxpayers unending millions of dollars per year.

I urge my colleagues to demand a vote. All I am asking for is an up-
or-down vote on an amendment that is clearly relevant to the
consideration of this legislation.

I yield the floor.

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