Department of Defense Appropriations Act, 2007--Continued

DEPARTMENT OF DEFENSE APPROPRIATIONS ACT, 2007--Continued -- (Senate - August 02, 2006)

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Mr. WYDEN. Mr. President, first of all, I thank the distinguished Senator from Arizona for working with me on this issue for many months now. Colleagues know that I stood in this spot for almost 5 hours a few months ago to try to put together a bipartisan effort to save taxpayers billions of dollars. I believe we have done that.

I ask unanimous consent to have printed in the RECORD the official score that Senator Kyl and I have now received from the Congressional Budget Office, which the Congressional Budget Office has now officially informed us that over the next 10 years, the taxpayers will save $9 billion

There being no objection, the material was ordered to be printed in the RECORD, as follows:

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Mr. WYDEN. Mr. President, the reason Senator Kyl and I feel so strongly about this, this is a program that is out of control. The fact is that even the sponsor of this program, our distinguished former colleague, Senator Johnston of Louisiana, said this program is not operating as Senator Johnston intended.

A brief bit of history is relevant. This program began in the 1990s, when the price of oil was under $20 a barrel. The point of the program, as devised by Senator Johnston, nobody could really argue with. We needed to produce energy, and with the economic situation in that part of the country, folks were hurting. They devised this program.

But no one can make a case for a program that began when oil was $19 a barrel, when the price of it is now over $70 a barrel. We have a situation where the companies are charging record prices. They are making record profits. We certainly do not need record subsidies, particularly at a time when we have a program that even the sponsor of the original effort says is not working.

This is the biggest subsidy in the energy area. This is one of the biggest boondoggles we have seen operated by the Federal Government. The fact of the matter is, there have been mistakes made under both Democratic and Republican administrations.

As I outlined for the Senate several months ago, the initial mistakes were made by those in the Clinton administration which did not lock in the appropriate price thresholds. When former Secretary Norton came into office, she sweetened up the subsidies administratively, and Congress went still further with respect to this program in the Energy bill.

The Government Accountability Office has estimated that at a minimum the Federal Government and the taxpayers are going to be out $20 billion. There is litigation underway that could mean the taxpayers would be out in the vicinity of $80 billion. It is time to draw a line in the sand and ensure that this effort to roll back these subsidies becomes law.

If the oil industry can keep the Senate from voting on royalties, the legislation the House adopted after Senator Kyl and I came to the Senate and discussed it, almost certainly is going to disappear. The negotiations now underway with oil companies, in my view, are going to be dragged out until the last legislative vehicle has left town. Then the companies can walk away from the table and return to feeding at the expense of the taxpayers.

Senator Kyl and I have worked very closely with Chairman Domenici. As always, he has been very fair and very straightforward with us.

With this approach, we have a chance to get a permanent solution to this giveaway of taxpayer money. We will not interrupt the approach that Chairman Domenici has advocated. We hope it will work. It essentially involves negotiations on a voluntary basis. As I have indicated in the Senate before, while I hope that works, put me down as skeptical because it is fairly implausible that the oil companies will simply walk away from billions and billions of dollars at the negotiating table. If it does work, all the better. If it doesn't work, however, Senator Kyl and I believe it is finally time for the Senate, on a bipartisan basis, to lock in a permanent solution.

Colleagues, the President, to his credit, has said, ``You don't need subsidies for the oil industry when the price of oil is over $55 a barrel.'' The President made that statement, and I appreciate him making it. Second, this is an opportunity for the Senate to go back through these various programs, save taxpayers some money, and to do it in a bipartisan way.

Even though the President said we do not need incentives with the price of oil over $55 barrel, we did see the Secretary of the Interior and the Congress continue to sweeten this royalty relief program, even as the price of oil climbed far above the point mentioned by the President at which the oil industry no longer needs subsidies.

We are now faced with the prospect that if we are going to get a permanent solution, now is the time for the Congress to step up.

I, also, point out, given the fact that the Senate has voted in the last few days to start a new program, a program that will involve additional dollars going out to the oil industry, at a minimum, let us say we are going to fix the old program that is out of control before a new program is started. That is common sense.

For the Senate to talk about creating a new program, allowing even more taxpayer money to be given away--and in that case, for 50 years or more--common sense says the Senate should step up before the end of this session and move to permanently fix the old program that is out of control.

The Senate ought to have an opportunity to debate and vote on a permanent solution to ending these oil royalty giveaways. The House has voted to do it. They voted, in a bipartisan way, for the very thing that I spoke at length about in the Senate and that Senator Kyl and I have been trying to change for many months.

I also point out, if we can get the savings by fixing the old program, you can talk about a responsible way for funding new efforts, such as the effort approved by the Senate this week.

I am sure our citizens who now face the highest gas prices ever will be interested to know when the Senate is going to have a chance to vote on the question of, at this time of record prices and record profits, whether we should continue to give away record amounts of taxpayer subsidies that the President of the United States has indicated are not necessary.

If the Senate ducks this issue, I think it will be very difficult to explain to the American people how Congress can be proposing to allow additional billions of dollars of royalty money to go out before it fixes the current out-of- control program.

I have said for some time the Senate should not be forced into a false choice of either aiding the Gulf States or standing up for the public interest in the face of outrageous taxpayer rip-offs.

We can and should do both. Given what the Senate did earlier this week on the new program, it is, in my view, essential to protect taxpayers to accept the bipartisan amendment that Senator Kyl and I offer this afternoon to reform the Oil Royalty Program.

Mr. President, I urge colleagues to support the bipartisan Kyl-Wyden amendment. I would also note--I see Senator Stevens on the Senate floor--that we have a number of sponsors of this bipartisan proposal, including Senator DeWine, Senator Lieberman, Senator Cantwell, Senator Feinstein, and Senator Salazar.

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