S6026 CONGRESSIONAL RECORD — SENATE May 3, 1995

It is an interesting concept of focusing

tax relief.

Mr. President, we have seen this plan

before. We have seen it all before—back

in the 1980’s. If we look back at that

time, we see what happens to the middle class. Do they benefit from this

kind of plan to give big tax cuts to the

wealthiest among us and explode the

deficit? No. We can look back and see

what happened in the 1980’s. The top 1

percent saw 62 percent of the wealth

growth go to them. The top 1 percent

got 62 percent of the wealth growth in

that period. The 80 percent at the bottom saw their wealth growth of 1.2 percent. That is trickle-down economics.

What we have learned is that wealth

does not trickle down. It gets sucked

up. The wealthiest 1 percent get all the

benefits.

Mr. President, let me just conclude

by saying our friends on the other side

have got to come up with a budget.

Then we are going to see the gap between rhetoric and reality.

I thank the Chair. I yield the floor.

Several Senators addressed the

Chair.

The PRESIDING OFFICER. The Senator from Montana.

Mr. BAUCUS. Mr. President, what is

the pending business?

The PRESIDING OFFICER. The Senator from Montana has 5 minutes in

morning business.

Mr. BAUCUS. I thank the Chair.

THE POWER MARKETING

ADMINISTRATIONS

fMr. BAUCUS. Mr. President, Webster’s define a tax as a requirement to

pay a percentage of income from property or value for support of the Government. So we can see that a tax can

come in many forms—a direct levy, or

a hidden fee that sneaks up on the taxpayers under a cover name. That is precisely what the Clinton administration

and some here in Congress have in

mind for many Montana and western

ratepayers.

As you may be aware, the administration in their fiscal year 1996 budget

proposes to sell off four Power Marketing Sdministrations: Alaska Power,

Southeastern Power, Southwestern

Power, and the Western Area Power

Administration, otherwise known as

WAPA which brings low-cost electricity to thousands of eastern Montana families, ranchers, farms, and

small businesses. They have found enthusiastic allies in the new House leadership. And together they say they will

privatize these electricity providers.

They predict a windfall, a one-time

profit of $3.7 billion. If anyone promises

you a free $3.7 billion, we all know you

had better think carefully. You had

better look at it real close. There is no

exception.

I submit that privatizing the Power

Marketing Administrations is a bad

idea. It is shortsighted, and it hurts. It

does not help. It hurts rural America.

Privatization cannot work when its result is to simply create four huge monopolies which will gouge their capital

market like any other monopoly.

So at its core, the proposal to sell off

PMA’s is no more than back-door tax

repeal. To sell off the PMA’s is no more

than a back-door tax increase on the

middle class. A tax hidden in the utility bill is every bit as much a tax as a

gas tax, an income tax, or anything

else. This is a tax, a tax increase on

rural America.

The chart, Mr. President, tells it a

little bit; $129 is the monthly bill of a

typical residential customer in this

area in Montana. This is from Marais.

Marais residents will find their bill will

increase 45 percent, which is $190 a

month, as opposed to $129.72 every

month.

What does that mean? That means

that Montana, like much of the West,

which is built on hydroelectric power,

will find their economies declining. By

harnessing the Missouri River, Fort

Peck Reservoir has provided water to

small industries which use the affordable power to create jobs and build

communities, and folks in rural areas

get affordable power to heat and light

their homes, an essential service. It is

something that works and has worked

ever since Franklin Roosevelt came

out to break ground at the Fort Peck

Dam and bring public power to rural

Montana.

Public power meant electricity an ordinary farm family could afford. It

helped create Montana communities

like Glasgow, Sidney, Shelby, and it

keeps towns like these strong and

healthy. As my friend Ethel Parker at

Fort Shaw says,

I have lived on a farm all my life; started

out south of Geyser in central Montana in a

semiarid prairie farm. The REA came to us

in the early 1940’s. Low-cost electricity has

made life livable for those of us who raise

the food and fiber for all Americans. Now

Congress would knock our pins out from

under us.

There are 100,000 Montana families,

one in three of all the men, women, and

children in Montana, that depend on

WAPA and share Mrs. Parker’s feelings, and they stand to see their power

bills increased by 25 cents on the average on the dollar if this proposal goes

forward. You are talking about real

tangible cuts in the living standards

for towns like Fort Shaw and all over

the country, and that is why I am a

staunch supporter of WAPA and equally against the sale of the PMA’s.

The second point is that WAPA and

the other power marketing programs

take not one tax dollar. In fact, the

Federal Government actually makes

money off of these programs. WAPA is

an example. The Federal Government

has invested a total of $5.6 billion in

WAPA, and each year the WAPA pays

the Federal Government approximately $380 million for this loan, with

interest, that is starting to be paid

back. And so far the Federal Treasury

has gotten back $4.1 billion on its initial loan. By the time this debt is retired in 24 years, the Federal Treasury

will have made $14 billion on its initial

investment of $5.6 billion. Even now,

the PMA’s run a profit for the Government. A recently released CRS report

on the PMA’s found that the Federal

Treasury actually earns a profit of $244

million a year.

To repeat, Mr. President, a recently

released CRS report on the PMA’s

found that the Federal Treasury actually earns a profit of $244 million a

year on the PMA’s. It is a profit. It

does not add to the deficit, Mr. President. It decreases the deficit. So you

have to look hard and you have to look

long to find a Federal program that

provides a good service to the public

and makes a profit. WAPA provides a

service and it makes a profit.

I find it incredibly shortsighted that

the administration would want to sell

America’s infrastructure for a quick,

one-time shot at cash—joined, I might

add, by the House leadership. They also

want to sell WAPA. So what’s next—

our highways, our bridges, our national

parks? The principle is the same.

America’s infrastructure up for sale.

That is what they want.

It does not make any sense to me,

and I do not intend to stand by and let

it proceed without a fight. And I serve

notice, Mr. President, I intend to do everything I can to see that this proposal

is defeated. We will shut the door on

this misguided backdoor tax.

Mr. President, I yield the floor.

Mr. WELLSTONE addressed the

Chair.

The PRESIDING OFFICER. The Senator from Minnesota.

Mr. WELLSTONE. I thank the Chair.

SALE OF PMA’S

Mr. WELLSTONE. Mr. President, I

shall be brief. I was one of the first

Senators—and I am glad to be out here

with colleagues on both sides of the

aisle—to oppose the idea of selling the

PMA’s. I have spoken with the President. I have spoken with Alice Rivlin

at OMB. I have spoken to relevant

Budget Committee members and written letters to other Senators.

I basically see it this way. If you sell

the PMA’s, if the Government should

sell the PMA’s above current value, the

only people who would want to buy

them, some of the private investorowned utility companies would want to

buy them in order to raise rates. That

is the only way they can make up the

difference, in which case the ratepayers

suffer. If you sell the PMA’s at below

current value, then this is a loss for

the taxpayers. If you sell the PMA’s at

exactly the current value, insulating

both the taxpayer and the ratepayer,

then the only thing you are doing is

privatizing for the sake of privatizing.

So this proposal makes absolutely no

sense.

Mr. President, I believe in the mission of the PMA’s and the longstanding

contract of the Western Power Administration with Minnesotans, and I

think to sell these PMA’s would be a

serious mistake for greater Minnesota.
May 3, 1995 CONGRESSIONAL RECORD — SENATE S6027

In western Minnesota, WAPA provides

hydroelectric power at production

costs to rural electric cooperatives,

municipal utilities, hospitals, school

districts, and Federal facilities. Without this program, the energy bill for

people in greater Minnesota could rise

as much as $400 a year per customer—

could rise as much as $400 per year per

customer.

In this time of budget cutting, it is

important to point out that WAPA is

not an example of wasteful Government spending. In fact, through WAPA

we actually pay off a Government loan.

And more importantly, WAPA is a

Government program that recognizes

the unique needs of rural communities

that lack the access to affordable energy enjoyed by their metropolitan

neighbors.

Rural Minnesota is willing to do its

part as our country works to reduce

the Federal deficit, including selling

wasteful Government operations. But

eliminating a program that does not

cost money and actually contributes to

the health of the rural economy is an

example of cutting for cutting’s sake.

It makes neither economic sense nor

common sense, and that is why, as a

Senator from Minnesota, I put this battle at the very top of my list of priorities.

I yield the floor.

Mr. DORGAN and Ms. MOSELEYBRAUN addressed the Chair.

The PRESIDING OFFICER. The Senator from North Dakota.

Mr. DORGAN. Mr. President, I have

been in the Chamber some while. It is

my intention to speak for 5 minutes on

the PMA matter and then claim the additional 3 minutes on the morning

business that was reserved.

The PRESIDING OFFICER. The Senator from North Dakota is recognized

for 8 minutes.

The Chair would advise the Senator

from Illinois that she does have reserved time to speak for up to 10 minutes and prior to taking the additional

5 minutes, we would recognize the Senator from North Dakota for the remaining 3 minutes and then the Senator from Illinois.

Mr. DORGAN. Mr. President, I would

ask if the allotted time for morning

business then allows for the full complement of time reserved for the Senator from Illinois; is that correct?

The PRESIDING OFFICER. That is

correct.

Mr. DORGAN. I thank the Chair.

SALE OF THE PMA’S

Mr. DORGAN. Mr. President, I should

like to add my voice to the thoughts

expressed today by the Senator from

South Dakota and the Senator from

Montana and others on the matter of

the sale of the Power Marketing Administrations, the PMA’s.

This does not mean much to a lot of

people because we hear the use of acronyms and titles of organizations with

which most people are not familiar.

But the power marketing administrations, along with WAPA, which is the

PMA that serves our region of the

country, provide a very important mission and role for our region of the

country and help provide, for a couple

hundred thousand North Dakotans,

reasonably low-cost power that has

been a Federal promise to them for a

long, long while.

We produce power through hydroelectric facilities that were built in

conjunction with the construction of

dams and reservoirs. Those projects

have many purposes, including flood

control and a range of other critical

needs.

Part of the promise in the construction of those dams and the public

works projects over time was the promise of being able to use the electricity

from the hydropower generators and

distribute it regionally at a reasonable

cost. That has been of enormous benefit to rural consumers in my State,

who, without this opportunity, would

see their electric rates skyrocket.

The President has proposed selling

the PMA’s. The leaders of the House

have proposed selling the PMA’s. It

does not make any sense, in my judgment, to do that. These are investments we have made. Payments have

been made under these investments, on

time and with interest. The PMA’s are

a $21 billion investment. The customers

of the electricity, the ratepayer in

rural America, have repaid $5.1 billion

in principle and have paid $8.8 billion

in interest.

For those in Washington to force the

sale of the PMA’s would be kind of like

a hostile takeover when somebody

comes along and says, ‘‘Well, it is true,

you made your payments. You bought

this. Now we are going to sell it out

from under you.’’

It is not the right thing to do. I do

not know why the President included it

in his budget recommendation. It was,

in my judgment, foolish to have done

so. It does not make good economic

sense. I think it breaks a Federal

promise, and I think it is actually moving in the wrong direction. I hope, on a

bipartisan basis, that we will find a

way here in the Senate to put the

blocks against these wheels and say,

‘‘No more. You are not going to move

this forward.’’

If someone happens to think that

selling the PMA’s is going to reduce

the Federal budget deficit, they should

understand that, according to our

budget law, you cannot sell assets and

claim that you have now reduced the

budget deficit. It does not do that

under our budget rules.

But, I hope that the Senator from

South Dakota, Senator PRESSLER, Senator BAUCUS, Senator CONRAD, Senator

WELLSTONE, myself, and so many others who care a great deal about this,

will be able to work together in a bipartisan way with the President and

the leadership in the U.S. House, to

show that that is an idea whose time

has never come and one that we must

defeat this year.

The PRESIDING OFFICER (Mr.

SANTORUM). The Senator’s time has expired.

The Senator from Illinois.

Mr. DORGAN. Mr. President, I ask

for the remaining 3 minutes of my time

under the order. When the Chair indicated that my time had expired, I assume the Chair was speaking of the 5

minutes under the PMA discussion.

The PRESIDING OFFICER. The Senator had 3 minutes remaining, and that

time has expired.

Mr. DORGAN. When I sought the

floor, I sought to use the 5 minutes

under the PMA discussion that was

under a previous unanimous-consent,

after which I had 3 minutes remaining

in morning business.

The PRESIDING OFFICER. There

was time for a list of speakers. My understanding is that you have used up

all of your time under that list.

Mr. DORGAN. Mr. President, there

was how much time reserved for Senator BAUCUS and Senator PRESSLER to

discuss PMA in morning business?

The PRESIDING OFFICER. Senator

BAUCUS had no time, and spoke under

the normal 5-minute limit under Senate rules in morning business. Senator

PRESSLER had 30 minutes.

Mr. DORGAN. How much of that

time was used?

The PRESIDING OFFICER. Senator

PRESSLER had 20 minutes remaining.

Mr. DORGAN. My understanding is

that is available in 3-minute increments for those of us who wish to

speak about PMA’s.

The PRESIDING OFFICER. The Parliamentarian advises me that there was

no such order that allows that to be

done under Senator PRESSLER’s time.

Mr. DORGAN. I disagree with the

Parliamentarian.

Let me ask unanimous consent that I

be allowed to speak for 3 additional

minutes as per the previous agreement

in morning business.

The PRESIDING OFFICER. Without

objection, it is so ordered.

Mr. DORGAN. In the remaining 3

THE BUDGET

fminutes—and I appreciate the indulgence of the Senator from Illinois—I

just want to discuss the issue raised by

Senator CONRAD a few minutes ago.

We had, not very long ago, an urgency on the floor of the Senate to

amend the U.S. Constitution to require

a balanced budget, and the urgency was

people moving around the floor here

saying, ‘‘We must do this immediately.

The country’s future rests on it. It is

critically important for the future of

America. We must change the U.S.

Constitution to require a balanced

budget.’’

And, of course, almost everyone

knew that if the Constitution were

changed to require a balanced budget,

not one penny’s worth of difference in

the Federal deficit would have occurred, because you cannot reduce the