May 3, 1995 CONGRESSIONAL RECORD — SENATE S6021

shameless, shameless seniors organizations who pray on the fear of seniors to

swell their membership and get contributions and be able to fund their

lobbyists and TV commercials and continue to go out there and feed on this

frenzy. I hope the American public and

seniors can see through this. It is a

scare tactic that should not succeed.

See through this. See that there is a

problem, and see that those who want

to tackle the problem now are doing it

because we care, not because we want

to destroy a program.

I yield the floor.

The PRESIDING OFFICER. Under a

previous order, the Senator from Montana is recognized to speak for up to 10

minutes.

(The remarks of Mr. BURNS pertaining to the introduction of S. 745 are located in today’s RECORD under ‘‘Statements on Introduced Bills and Joint

Resolutions.’’)

Mr. CAMPBELL. Mr. President,

there will be several people this morning who have reserved time to speak on

the potential sale of the Power Marketing Administrations.

I ask unanimous consent to also

speak on this issue during morning

business.

The PRESIDING OFFICER. Without

objection, it is so ordered.

Mr. CAMPBELL. Mr. President, I

OPPOSE SALE OF PMA’S

fwould like to add my very strong voice

to that of my colleague from South Dakota, who will be speaking on this; the

Senator from Montana, Senator BAUCUS; as well as Senator DASCHLE, on

the potential sale of the Power Marketing Administrations that the administration has proposed.

There are a lot of things wrong with

the Federal Government, very frankly,

and I know we should always be looking for the functions we can privatize,

that are done better in the private sector than by the Federal Government.

The American system of the Power

Marketing Administrations is, in my

experience and that of many of my constituents, an example of something

that the Government does well in direct partnership with those folks living

in rural regions of America.

The electrification of rural America

is a success story because it involved a

true partnership between the Federal

Government and the people of rural

America who rely on the electrification of the REA’s to provide their

power.

The partnership with the Federal

Government has been a mutually beneficial one. America’s rural electric cooperatives and small municipal power

systems agreed to purchase the initially more expensive Federal hydropower because they understood the

long-term security of a publicly owned

power system.

Without the commitment to purchase the power, the system could not

have been built. The REA members and

other customers pay for electricity

based on the cost of providing service,

retirement of the construction debt,

and interest.

The system is working well, Mr.

President. Those who rely on electrical

power from the system are repaying

the Federal Government for capital investment costs of building a system, as

well as the annual operation and maintenance costs of the system.

Down the road, when the projects are

paid for, these dams and facilities will

be federally owned and will continue to

provide significant sources of revenue

to the Federal Government.

The proposal of selling off the PMA’s

has a great deal of uncertainty. It is

clearly our goal to cut the deficit, but

on the other hand, if we are simply

doing things to privatize another Government function without understanding the effects of doing so, I think it is

rather risky.

Is it change just for the sake of

change? I hope not. If it is to maximize

deficit reduction, that means we sell to

the highest bidder. If we do that, clearly the highest bidder will have to raise

the electric rates for rural America,

and that will not do any good for those

who represent the States.

The rural regions that are having the

toughest economic times of anywhere

must have low rural electric rates. As

Congress considers a new farm bill and

the probability that many vulnerable

programs may be cut or eliminated, I

think it would be cruel to also turn out

the lights.

If, on the other hand, those who represent rural regions insist, and we will,

that there be a safe prohibition placed

on the rate increases if they are sold,

then it seems to me we are truly in a

pointless exercise, privatizing a function that most agree serves its customers well at no annual cost to the

Treasury.

I want to thank my colleagues, Senator PRESSLER, Senator DASCHLE, and

Senator BAUCUS, for arranging a section on which they will also speak.

Mr. PRESSLER. Mr. President, I rise

I yield the floor.

PUBLIC POWER

ftoday to express my opposition to the

administration’s proposal to sell the

Western Area, Southwestern, and

Southeastern Power Marketing Administrations—collectively known as the

PMA’s.

Public power serves many functions

in South Dakota. As a sparsely populated State, utilities are faced with the

challenge of how to get affordable electricity into small cities and communities where there are less than two

people per mile of transmission line.

Public power provides the solution.

In public power utilities, the only investors are the consumers. Revenues

are reinvested in the community—in

the form of taxes and services. And, the

low cost of power is essential to encourage economic development in

small cities and towns.

Public power, purchased through the

Western Area Power Administration,

known as WAPA, costs South Dakotans

an average of 2.5 cents less than the

market rate. This allows revenue to be

reinvested in additional transmission

lines, and better service. The availability of hydropower from the Missouri

River to rural cooperatives and municipals have helped to stabilize rates.

With 7,758 miles of transmission lines

in the Pick-Sloan region, WAPA can

serve 133,100 South Dakotans—without

charging them an arm and a leg.

Public power has brought more than

electricity to South Dakota. For example, Missouri Basin Municipal Power

Agency, based in Sioux Falls, has embarked on a program offering incentives for planting trees. The goal is to

plant at least one tree for each 112,500

meters in the Agency’s membership

territory. In fact, Missouri Basin was

recognized by the Department of Energy for outstanding participation in

this Global Climate Change Program. I

congratulate Tom Heller of Missouri

Basin for this excellent community

service program.

Public power also brings new jobs to

the communities it serves. In part due

to the low cost of power from East

River Electric, there are now three injection molding plants based in Madison, SD—creating snowmobile parts.

Arctic Cat, PPD, and Falcon Plastics

employ approximately 200 people in

Madison.

East River also is involved in other

economic development activities. It

provides classes to help the community

attract businesses, and offers grants

for feasibility studies associated with

economic development projects. South

Dakota clearly has benefited from the

work of Jeff Nelson, as the general

manager of the East River Electric

Power Cooperative.

Public power is a South Dakota success story. It is the source of innovation, development, and community

pride. I am sure the same is true in

other towns and communities across

America. In spite of these success stories, the Clinton administration—and

several Members of Congress—want to

put an end to this success.

Specifically, President Clinton has

proposed selling WAPA and two other

power marketing administrations in

order to pay for the modest tax cut he

has promised the American people.

In essence, this would force South

Dakotans—and public power consumers

in small cities and rural areas—to

cover for the rest of America.

Under the President’s plan, South

Dakotans would not be able to enjoy

the promised tax cut. Why? Because

the sale of the PMA’s could result in

rate increases totaling more than $47

million.

In addition, I question the claim

made by the administration that the
S6022 CONGRESSIONAL RECORD — SENATE May 3, 1995

sale of the PMA’s would generate revenue for the Federal Government. Will

it? Let us look at the facts.

PMA’s still owe $15 billion in principal. Also, more than $9 billion in interest already has been paid to the

Federal Government. By selling the

PMA’s, the Government would forfeit

future interest payments.

In fact, a recent report prepared by

the Congressional Research Service

demonstrates just how much money

the PMA’s are expected to contribute

to the Federal Government. This year,

WAPA is expected to pay back $225.1

million borrowed from the Federal

Government. But WAPA will also return another $153.4 million to the

Treasury. Given these figures, it is

clear that the Clinton plan does not

make good economic sense.

As my colleagues know, this is not a

new issue. I have been fighting the proposed sale of the PMA’s ever since I

came to Congress. In 1986, the Reagan

administration made similar attempts

to privatize the PMA’s. We stopped

them by passing a law to prevent the

Department of Energy from pursuing

any future plans to sell the PMA’s, unless specifically authorized by Congress. I suspect the Clinton administration may have forgotten that law.

Mr. President, once again, we are

fighting to prove the worth of public

power. Once again, we must demonstrate how necessary it is to the

lives of rural Americans. The people of

South Dakota have stated their message loudly and clearly—through thousands of postcards, letters, and phone

calls. South Dakotans such as Ron Holstein, Bob Martin, and Jeff Nelson have

been leaders in their opposition to the

proposed PMA sale and I appreciate all

their hard work.

Public power is a solid investment

for the Nation. Public power is one of

the great success stories of South Dakota. I urge all my colleagues to stand

united behind the continued success of

public power, and the essential service

it provides to the Americans who reside in small cities and towns. Now is

not the time to mess with success.

POWER MARKETING ADMINISTRATIONS

Mr. BUMPERS. Mr. President, I rise

today to join my colleagues in expressing opposition to the privatization of

the Federal Power Marketing Administrations [PMA’s]. This ill-conceived

concept, which proponents claim would

help reduce the deficit, is simply a

bookkeeping gimmick that would accomplish little except for raising the

electric rates of millions of consumers

served by municipal and cooperative

utilities.

A number of years ago customers of

municipal and cooperative electric

utilities entered into a covenant with

the Federal Government. In exchange

for the right to purchase the hydroelectric power generated at multipurpose Federal water projects at costbased rates, these customers have provided a significant portion of the funds

needed to build and operate the water

projects. In addition to power production these projects serve other significant purposes, including making water

available for irrigation, flood control,

navigation, municipal and industrial

water supply, wildlife enhancement,

recreation, and salinity control. In

many instances, the beneficiaries of

these nonpower purposes of the water

projects have paid little, if anything,

for the projects.

Some are not suggesting that the

Government renege on its agreement

with the power customers by eliminating their right to purchase the power

produced at Federal water projects. In

addition to being patently unfair, the

breach of this covenant with the power

customers raises serious questions

about the integrity of future agreements entered into between the Government and private parties.

The five power marketing administrations currently sell power to municipal and electric cooperative utilities

serving millions of consumers in 34

States. Privatization of the PMA’s

could result in tremendous rate increases for these customers. In some

areas, retail residential rates could triple. A recent study prepared by the

Congressional Research Service estimated that PMA privatization could

cause electric rates to rise by $1.2 to

$1.3 billion per year.

The Southwestern Power Administration [SWPA] currently sells power

produced at Federal water projects to

customers in my home State of Arkansas, as well as in Kansas, Louisiana,

Missouri, Oklahoma, and Texas. The

privatization of SWPA could cause serious adverse economic consequences

in the region. A study prepared when

President Reagan first proposed

privatizing SWPA indicated that consumers in Arkansas alone could stand

to pay as much as 343 percent more to

replace the power currently purchased

from SWPA. Mr. President, I don’t

want to go back to my constituents

and tell them that they are going to

have to pay three times as much for

electricity because the Government no

longer wants to honor a contractual

commitment.

Rather than roll up our sleeves and

make the tough choices in order to reduce the Federal budget deficit, some

Members of Congress instead want to

resort to budgetary gimmicks. The sale

of Government assets to increase the

Government’s cash flow, in the short

term, might be the most cynical gimmick of them all. Because budget scoring periods run for 5 or 10 years, it is

tempting to take actions that would

reduce the deficit during the scoring

period, but would actually increase the

deficit in the out-years. This is exactly

what would happen if the PMA’s are

privatized. Selling-off the PMA’s could

very well produce $2 billion in revenues

immediately. However, because the

PMA’s would no longer be selling

power on the Government’s behalf, the

immediate increase in revenues would

be offset by the revenues forgone resulting from the sale of the assets.

In 1990 Congress amended the Budget

Act to prohibit the use of receipts from

the sale of Federal assets to be scored

as a reduction in the deficit. The purpose of this provision is to prevent the

use of gimmickry to create an illusion

that we are balancing the budget. Mr.

President, I fully expect that efforts

will be made this year to repeal this

prohibition. I intend to fight any such

efforts that would make it more difficult to honestly balance the budget.

Mr. President, I recognize that we

live in a new era and that streamlining

Government and making it more efficient are not only desirable, but necessary. In this spirit, I am willing to

wok with critics of the PMA’s in order

to make them more efficient. But I will

not support any legislation that would

abrogate the covenant between the

Government and the PMA customers

which provides reasonably priced power

to more than 1,000 consumer owned

electric systems in the United States.

POWER MARKETING ADMINISTRATION

Mr. WARNER. Mr. President, I rise

today in opposition to President Clinton’s budget proposal for fiscal year

1996 to sell the Western Area, Southwestern, and especially the Southeastern Power Administrations to private

investors.

In Virginia, the electric cooperatives

and the municipal power systems represent almost a million citizens who

receive a significant portion of electricity from the Kerr-Philpott hydro

facilities located in southside Virginia.

It is estimated that preferred customers under the electric cooperatives

can expect annual increases of approximately $100 per year should the Southeastern Power Administration be sold.

I believe that it is fiscally irresponsible to turn the Power Marketing Administrations over to private interests,

which will in turn penalize our consumers by driving up their rates. These

members have already paid for a significant portion of investment in these

facilities and nearly twice that amount

in interest. SEPA has already repaid

$433 million, or 30 percent, of the $1.442

invested.

The Federal Government is currently

recovering its investment in SEPA facilities through the rates charged for

the hydroelectric power generated to

the customers in southside. This investment should be viewed as a contract with the ratepayers of the cooperatives to continue service with the

Federal Government.

While the sale of the PMA’s would

provide the Department of the Treasury with the desired instant cash flow,

we must consider how these Federal

power sales will continue to generate

revenue long after the projects are repaid.

The Power Marketing Administration should be valued for its assets, for

the income it produces to pay its own

way, and for the service it provides to

the members of the cooperatives. For
May 3, 1995 CONGRESSIONAL RECORD — SENATE S6023

these reasons, I believe that the sale of

the Power Marketing Administrations

is not an efficient means of contributing to deficit reduction and should not

be considered as a means of deficit reduction.

POWER MARKETING ADMINISTRATIONS

Mr. EXON. Mr. President, I will not

take a great deal of time this morning,

but I wanted to reiterate my strong opposition to the sale of the Power Marketing Administrations. I’ve made

similar points with the Director of the

OMB. And I sat to discuss this matter

with the President.

We seem to go through this exercise

just about every year, regardless of

who is in the White House or who controls Congress. Until someone can show

me some real benefits of privatization,

I will continue to oppose the sale of the

PMA’s.

The Power Marketing Administration’s deliver a critically important

service to a large portion of the Nation. They are an example of what’s

right with Government. It seems ironic

and very ill advised that they should be

put on the auction block and I will not

stand for any wholesale dismantling of

the PMA system.

Ms. MOSELEY-BRAUN. Mr. President, I concur and agree with Senator

EXON and I want the RECORD to state

that.

Mrs. MURRAY. Mr. President, I have

spoken in the past about my commitment to continuing the production and

distribution of clean, reliable hydropower through Federal Power Marketing Administrations. Today, I reaffirm

this commitment.

The Federal power program has

served well both the taxpaying public

and energy consumers. It serves the

taxpaying public by paying its own

way—and paying interest on its debt. It

also serves the general public by providing navigation, flood control, recreation, fish and wildlife conservation,

and irrigation. Few Federal programs

can claim such far-reaching benefits at

such a low cost.

Mr. President, if we sell our PMA’s,

we cannot be assured that the general

public will continue to reap these

many benefits. While the sale of PMA’s

would product short-term revenue, the

sale will do little to solve the longterm problem of our Nation’s debt. In

fact, the permanent loss of these productive assets will result in foregoing

future revenues likely to be in the billions of dollars.

At this time, the Bonneville Power

Administration is not immediately

threatened with sale. Several months

ago, however, officials within the administration suggested to the President that he sell BPA to finance a tax

cut. Fortunately, after hearing from

Senators and Representatives from the

Pacific Northwest, President Clinton

elected to decline that advice. Recognizing the special attributes of BPA,

he has said he does not intend to offer

it for sale. So, my constituents appear

to be safe for now.

I speak in opposition to the sale of

the other PMA’s because I believe their

sale is not in the best interest of either

the taxpaying public or the tens of millions of consumers who will certainly

be saddled with higher electricity bills.

Let us reject this short-term solution

to our deficit and protect our Federal

assets for the next generations of

Americans.

SALE OF THE POWER MARKETING

ADMINISTRATIONS

Mr. ROBB. Mr. President, like may of

my colleagues, I rise today to briefly

address the President’s fiscal year 1996

budget proposal to privatize some of

the Power Marketing Administrations

[PMA’s], including the Southeastern

Power Marketing Administration

[SEPA], which serves many Virginians.

I am concerned about the devastating

effects of the privatization of the

Southeastern Power Administration

and other PMA’s on rural electric providers and their consumers. Prior to

the fiscal year 1996 budget submission,

I contacted President Clinton and OMB

Director Alice Rivlin and asked for this

proposal to be reconsidered. Like many

of my Democratic colleagues. I was disappointed to find this one-time asset

sale in the final budget proposal.

Nationwide 650 rural electric systems

receive allocations of power from Federal projects. Eleven of our thirteen

Virginia rural electric cooperatives get

a portion of their power direct from the

Southeastern Power Administration.

Over the years, Federal hydropower

has helped rural electric cooperatives

keep their rates competitive with investor-owned utilities.

If we are serious about deficit reduction, we must ensure that all of our

Federal programs continue to provide

significant benefits to our taxpayers.

In my opinion, this proposal to sell

SEPA and other PMA’s is penny-wise,

but pound-foolish. I would favor any

proposal for deficit reduction, so long

as the savings result from sound public

policy. Our Federal power program

benefits consumers, taxpayers, and

continues to facilitate economic

growth and development in rural areas

across the country. Privatizing the

PMA’s will not produce benefits that

outweigh the current program and is,

in my judgment, bad public policy.

We should oppose the sale of the

PMA’s for several budgetary reasons.

In the first place, the Government

would lose a stream of revenue flowing

into the Federal Treasury if the PMA’s

were sold. The estimated revenues

which go to the Treasury exceed the

appropriations for the PMA’s. In fiscal

year 1995, it is estimated that the net

positive receipts to the Federal Treasury will be $243 million.

Given this situation, the fiscal advantage to the Federal Government of

selling the PMA’s is time limited. During the year in which sales are actually

occurring, the Treasury would receive

a windfall in receipts as monies received from the sales and saved from

appropriations overwhelm the revenues

lost as a result of the sale. However, as

the foregone revenues exceed the saved

appropriations in the years after the

sales, we would be adding to the deficit.

Because capital asset sales are a onetime event. We have a budget rule that

assets sales should not be counted in

the budget. If we were to count the proceeds from selling Government assets

as though they were receipts of the

Federal Government, then these onetime receipts could be used to fund new

spending programs or tax cuts that

outlive the stream of receipts. We

should follow the budget rule and not

allow these fleeting savings to be

counted as budget savings.

Another budgetary reason to oppose

the sale of the PMA’s is that the Federal Government could actually lose

money if the sale price were inadequate

to cover the present value of the federally-held debt. One study indicates

that the revenue from the Alaska

Power Administration under the current program would be higher than

under its proposed sale. If this is the

case with the APA, it could be equally

true of the others. Given these budgetary uncertainties, we should not be

rushing to privatize these entities.

The PMA’s remain an integral part of

our commitment to bring affordable

and efficient hydroelectric power to

the many Americans dependent on

rural cooperatives and municipal

power systems. PMA’s are a wise and

profitable investment on behalf of

rural America.

We have made great strides in bringing electric power and other utilities to

rural areas, largely through the work

of rural electric cooperatives, and we

should carefully consider the consequences of eliminating this valuable

supply of electricity now.

I respectfully urge all of my colleagues to join me and support the continuation of Federal power.

POWER MARKETING ADMINISTRATIONS

Mr. HATFIELD. Mr. President, I am

pleased to join with a number of my

colleagues from both sides of the aisle

who have come to the floor this morning to shed some light on proposals to

sell off the Federal power marketing

administrations. I continue to oppose

such proposals, not only as they relate

to the Bonneville Power Administration, but also as they relate to the

other power marketing administrations.

Power Marketing Administrations

are entities that have been created to

market the power generated by Federal

hydropower projects operated by the

Army Corps of Engineers. PMA’s are

part of the Department of Energy’s

Federal power marketing program. One

of the central features of this program

is the preference clause, which allows

consumer-owned, nonprofit local utility systems to have the preferential access to the power produced by Federal

dams.

The five PMA’s are as follows: The

Southeastern Power Administration
S6024 CONGRESSIONAL RECORD — SENATE May 3, 1995

[SEPA], the Southwestern Power Administration [SWPA], the Western

Area Power Administration [WAPA],

the Bonnville Power Administration

[BPA], and the Alaska Power Administration [APA].

The President’s budget includes provisions for the sale of each of these

PMA’s except BPA. Proposals are pending in the House to either sell all or

some of the PMA’s or require them to

sell their power at market rates, the

definition of which appears to this Senator to lead to highly inflated and unrealistic prices.

My opposition to the sale of the

PMA’s is based on my view that it is

shortsighted public policy to sell one of

the few revenue generating assets of

the Federal Government. It is important to remember that BPA is repaying, with interest, the capital investments in the Federal hydropower

projects in the Columbia Basin. The

other PMA’s are making similar payments. When the repayment is completed, the Federal Government will be

the owners of these projects. The

PMA’s pay their way and then some. I

ask unanimous consent that a table

showing project investments and repayment by PMA’s be printed at this

point in the RECORD.

Mr. FORD. Mr. President, I wish to

voice my opposition to any efforts to

privatize parts of the Federal Power

Marketing Administrations including

the Southwestern, Southeastern, or

Western Area Power Administration.

This Nation made a commitment to

bring affordable and efficient hydroelectric power to rural customers. In

conjunction with thousands of rural cooperatives and municipal power systems across the country, Federal

Power Marketing Administrations

[PMA’s] have met that commitment.

The utilities purchase power through

the PMA’s and the revenues cover PMA

operating expenses, construction costs,

and interest payments. And these sales

put money into the Federal Treasury.

The proposed sale of these PMA’s not

only jeopardizes that commitment to

rural Americans, but upsets the sensitive dynamics of the many dam

projects from which the PMA’s market

their power.

These dams perform an array of services, including power generation, navigation, flood control, water supply,

recreation, and fish and wildlife preservation. As a government entity PMA’s

have effectively balanced these sometimes diverse, and often competing

functions.

As several colleagues and I told

President Clinton in a letter back in

January, there is no indication that a

private, for-profit entity can be expected to become a full-partner in

these interests at an almost certain

loss of profits.

And what about the consumer? They

essentially lose twice. Estimates show

increases of as much as 30 to 50 percent

per month for some residential rates.

That’s a frightening prospect for many

families who are already living from

paycheck to paycheck.

The consumer gets hit a second time

when the Federal Treasury experiences

a loss of that steady revenue I mentioned earlier. Because the Federal

Power Program pays for all investments made, once construction, and interests costs are repaid, the Federal

Government will own the power plants.

But once sold, no revenue. And that’s

bad news for consumers at a time when

reducing the deficit is critical to continued economic stability.

The Federal Power Program is one

that assures access for rural residents

to affordable electricity, returns muchneeded revenue to the Federal Treasury, and effectively balances the many

demands on these dams—from flood

control to water supply to recreation.

Clearly, this is not the kind of program

Congress should add to the auction

block, and I urge my colleagues to oppose any such efforts.

There being no objection, the table

was ordered to be printed in the

RECORD, as follows:

PMA’S PAY BACK PRINCIPAL WITH INTEREST

Customers of the federal power marketing

administrations are required by law to pay

back the investment in federal hydropower

facilities with interest. They are doing so, as

shown in the table below:

STATUS OF REPAYMENT AS OF SEPT. 30, 1993 1

[Cumulative dollars in millions]

Location Power investment 2

Power revenues

Operation

& maint.

(O&M)

Purchased

power

Interest

paid thru

1993

Cumulative repayment

thru 1995

Unpaid investment

Alaska .............................................................................................................................................................................................................................. $205 $144 $52 0 $53 $39 $166 Bonneville ........................................................................................................................................................................................................................ 3 12,260 34,723 5,572 $20,825 5,914 3 2,412 4 9,848 Southeastern ................................................................................................................................................................................................................... 1,442 2,325 1,043 65 781 435 1,007 Southwestern ................................................................................................................................................................................................................... 997 2,042 688 520 536 298 699 Western ............................................................................................................................................................................................................................ 5,631 5 11,210 4,311 3,013 1,911 2,198 4 3,433

PMA total .................................................................................................................................................................................................................... 21,658 47,466 11,166 22,554 8,831 5,133 14,525

1 All data are on accrual basis of accounting, except as noted, and are based on the best information available.

2 The power investment to be repaid includes irrigation and other nonpower investment assigned to power for repayment for Bonneville and Western.

3 Cash rather than accrual basis.

4 The unpaid investment does not include construction work in progress or capitalized deficits.

5 Net of income transfers of $109 million.

Mr. HATFIELD. Mr. President, the

five PMA’s carry out a distinctive mission, including both power and

nonpower functions. For example, the

Bonneville Power Administration’s primary function is to market power generated by the Corps of Engineers dams

in the Columbia River Basin. They also

have significant involvement in implementing regional conservation measures, regional fishery recovery and conservation measures, and regional renewable energy programs. It is unlikely that the private sector would be

willing to fulfill these public duties in

the absence of PMA’s.

This is of particular interest to the

Northwest, where BPA is, under current plans, expected to shoulder the

vast majority of the costs of salmon recovery. While many in the Northwest

have argued that BPA should not be required to bear the entire burden of

these recovery costs, to remove BPA

from the picture leaves a void that

would be difficult if not impossible to

fill.

A number of economists have questioned the true fiscal benefit of selling

Federal assets such as the PMA’s. Not

only would such a sale require the

budget scoring rules of the Senate and

the House to be fundamentally altered

in order to show any positive deficit

impact, it would also be of questionable benefit to the deficit problems we

face. As Harvard Prof. Martin Feldstein has pointed out:

Although Government accounting methods

would make it look as if Federal spending

and receipts are in better balance, these

asset sales would do nothing to lessen the

burden of the deficit. That burden occurs because Government borrowing to finance the

deficit preempts savings that would otherwise be available for private investment in

plant and equipment and in housing construction. The administration’s proposed assets sales would preempt private savings

every bit as much as a Federal sales of new

debt of the same value.

Mr. President, over the last decade, I

have seen many shortsighted proposals

by successive administrations to sell

off or alter substantially the power

marketing administrations. I have had

to fight these proposals each time and

will continue to do so. As budget deficits grew, a cash-starved Federal Government looked to all sources of revenue generation to produce more dollars. The power marketing administrations, which produce large sums of annual revenues, became easy targets for

those who look only at the bottom

line. Little or no consideration was

given to the impacts on local economies or the overall impact on Federal

revenues.
May 3, 1995 CONGRESSIONAL RECORD — SENATE S6025

While none of these proposals ultimately was successful, each created a

cost for the economies which depend on

PMA electric power. Electricity is the

cornerstone of much of the Nation’s

economy, particularly in the Pacific

Northwest. The high reliability and

low cost of electric power provides the

United States, and especially the Pacific Northwest, with a global competitive advantage which benefits the entire Nation.

As each of these proposals were

made, uncertainty over the future cost

of electricity was created. In the Pacific Northwest, where over half the

electric power consumed is marketed

by the Bonneville Power Administration, these proposals cast a cloud of uncertainty over future electric power

prices. Rate increases of the magnitude

contemplated by the proposals would

devastate the economy of the region by

discouraging investment in infrastructure, including modernization of new

plants and equipment, and close factories and businesses which operate on

the margin, many of which were attracted to the availability of low cost

hydroelectric power in the region. The

benefit of these proposals has overstated by every administration because

the potential for lost tax revenue as a

result of business failure or lack of investment was never taken into account.

In conclusion, Mr. President, proposals to sell off these revenue generating

entities that are such fundamental importance to the local and regional

economies they serve are misguided

and will be opposed by this Senator. I

am pleased to join with my colleagues

to reinforce the importance of this

issue.

I yield the floor.

Mr. CONRAD. Mr. President, I would

like to speak for just a moment on this

PMA matter and then direct my attention to another issue. Who controls

time?

The PRESIDING OFFICER. The

Chair would inquire of the Senator

from North Dakota if he is speaking on

the time of his colleague from North

Dakota?

Mr. DORGAN. Mr. President, I ask

unanimous consent the Senator from

North Dakota be allowed to speak for 9

minutes in the time reserved for morning business.

The PRESIDING OFFICER. Without

objection, it is so ordered.

The Senator from North Dakota is

recognized for up to 9 minutes.

THE POWER MARKETING

ADMINISTRATIONS

fMr. CONRAD. Mr. President, I thank

the Chair and thank my colleague. I

would like to speak just briefly on the

PMA matter and then speak on another issue as well.

With respect to the PMA matter, I

salute my colleagues who have come to

the floor to oppose the sale of PMA’s.

Let me say I believe sale of the Power

Marketing Administrations represents

a very bad idea. It is bad for rural

America. It represents bad faith. It is

bad economics and it is bad policy.

This would have a very serious impact on rural America. In my State we

would see an increase in rates of up to

60 percent; 240,000 customers in North

Dakota would be adversely affected.

Those rural customers are already paying rates that are 15 to 40 percent higher than city customers. The reason for

that, of course, is very obvious. There

is much less of a load per mile in rural

areas than in city areas, so the costs

are higher.

Mr. President, this would be a very

serious matter for rural America. It

also represents bad faith. The Government made a deal. The deal was this

power was going to go to help rural

America. That is precisely why the

Federal Government entered into this

enterprise. Preference power, it should

be emphasized, is not a subsidy. These

facilities are being repaid with interest. I believe the sale also represents

bad economics. Selling the PMA’s

would be a one-time shot. It does not

reduce the deficit because their own

budget rules say you cannot sell assets

to reduce the deficit. So, Mr. President,

selling these facilities forgo decades of

steady income.

Finally, I believe the PMA sale represents bad policy. These dams serve

multiple purposes. No private entity

can balance the interests of power production with flood control, navigation,

water supply, and wildlife values.

Mr. President, for those reasons I oppose the sale of the PMA’s.

Mr. CONRAD. Mr. President, today is

WHERE IS THE BUDGET?

fMay 3. I think it is time to start asking the question of our colleagues on

the other side, where is the budget?

Where is the budget? We are supposed

to have completed action on the budget

in the Budget Committee by April 1.

Today is May 3. We still do not see a

budget. I am on the Budget Committee.

I still do not know when we are even

going to start to work on the budget.

Mr. President, I must say I am somewhat surprised because our friends on

the other side of the aisle had a budget

before the election. They told the

American people that they had a budget plan. They said they could cut taxes,

they said they could increase defense

spending, and they said they could balance the budget. But now that they

have assumed power and assumed control and assumed authority, there is no

budget.

Mr. President, it is amazing the difference an election makes. Before the

election there was this plan. They had

the Contract With America. They told

everybody they had this miracle. It

was not going to reveal the details but

a miracle plan that was going to allow

them to cut taxes dramatically, increase defense spending, and balance

the budget. Now that they are in power

their plan is missing in action. Maybe

it is because the plan just does not add

up. This chart shows what we would

need to do to balance the budget over

the next 7 years. We would have to

have a reduction in spending of $1.2

trillion to begin with. Then if we were

going to be true to the promise we have

made to Social Security recipients,

they would have to cover the $636 billion in Social Security surpluses that

are going to be generated during that

7-year period.

So now the hole to fill in is $1.8 trillion—not million, not billion, but trillion dollars. That is real money even in

Washington talk. On top of that, of

course, we are going to have to cover

the massive tax cuts that the House

has passed, $345 billion of tax cuts over

the 7-year period. So that is the hole

that we have to fill in, $2.2 trillion.

Unfortunately, before they ever

started to fill in this hole, they dug the

hole deeper by passing these massive

tax cuts.

Let us see what they have produced

so far by way of proposals to narrow

the gap between the $2.2 trillion we

need, and what they have actual done

so far over in the House in terms of

proposal. They are down here at a measly, anemic, $485 billion.

Mr. President, I would say our

friends on the other side of the aisle

have a credibility gap that is opening

up here. In fact, it is more than a gap.

It is a chasm. They are $1.6 trillion

short. No wonder we do not see a budget out here. No wonder they have blown

the deadline. No wonder they have not

even started in the Budget Committee

and they were supposed to be completed a month ago.

It is amazing. During the balanced

budget amendment debate there was a

rush to amend the Constitution to balance the budget. Boy, that was priority

No. 1. But now when it comes time to

actually do something to balance the

budget, because of course, a balanced

budget amendment will not cut one

dime, will not add one dime of revenue,

will not narrow the deficit by a dollar—now, when it comes time to actually present a budget, to actually do

something about the deficit, the budget

plan is nowhere to be found. This just

does not add up. It does not add up, and

not surprisingly our colleagues on the

other side are more focused on a tax

cut for the wealthiest among us than

presenting a plan to reduce the deficit.

It is very interesting. If you look at

who benefits from the Republican tax

bill, what one finds is if you are a family of four earning over $200,000 a year,

you get an $11,000 tax cut. If you are a

family of four earning $30,000 a year,

you get $124.

So the idea of our friends on the

other side is to target tax relief in this

country by giving 100 times as much to

those earning over $200,000 a year than

those earning $30,000 a year, and they

call this middle-class tax relief. It is an

interesting concept of the middle class.