FAA Reauthorization Act of 2007

Floor Speech

FAA REAUTHORIZATION ACT OF 2007 -- (Senate - May 01, 2008)

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Mr. SANDERS. Mr. President, in the last several weeks in a number of venues, I have met with hundreds, in fact thousands, of Vermonters, and to nobody's great surprise, the issue that is uppermost on their minds is the very high price of gas and the price of oil. I know that is true in all 50 States in this country and in thousands of communities. It is especially true in rural States because in rural States, especially cold-weather States, it is not uncommon for people to travel 50 miles to their jobs and then 50 miles back. If you drive 100 miles to work, the mileage runs up.

I should mention, I know it probably didn't snow in Florida, but it did snow in Vermont. We had a small amount of snow. That simply indicates that people know when it gets cold in Vermont it gets very cold. We have a lot of elderly people right now wondering how they are going to heat their homes next winter. We have a combination of working people in a rural State--this is true all over rural America--paying outrageously high prices in order to get to work and, in colder weather States, people very worried about whether they can stay warm next winter.

The arithmetic is not really hard to figure out. If you put 25,000 miles on your car going to work every year and you are paying a buck more than you used to and you get 25 miles per gallon on your car, that is a thousand dollars. If you make $30,000 a year and you get a 3-percent raise, that is 900 bucks. So all of your raise, all of your cost-of-living increase on your job is now in your gas tank. That is happening to millions of American workers. Then these same workers are paying more for health care, are paying more for food, more for education, which, added together, is why the middle class in America is collapsing.

For many years, as good-paying jobs have gone to China, as our people are struggling to make ends meet, people have been worried about how they are going to survive economically. On top of that, we now have the foreclosure crisis and we have the escalating cost of gas and oil in this country, which then leads some 80 percent of the people in this country to believe this country is going in the wrong direction, and one wonders, really, what the other 20 percent are thinking. Clearly, for the middle class in this country, we are facing a very serious problem.

I did an interesting thing a few weeks ago in Vermont. We were having some town meetings on the economy. We brought a professor from Harvard Law School, one of the best writers in America on the economy. Her name is Elizabeth Warren.

In preparation for that meeting, we sent out an e-mail to people in my State and said: Tell me what is going on in terms of the collapse of the middle class and how that impacts your life. Frankly, we expected a few dozen people to reply. As of today, we have received over 700 responses. This is doubly surprising because in Vermont people are quite reticent, not wanting to talk about personal aspects of their lives--700 people. I recommend you and Members of the Senate read some of these responses. They are up on our Web site. The tales people are telling are heartbreaking, they are poignant, they come from the heart, and there are hundreds of them.

Let me just read a few segments of some of the letters we have received and how they touch on gas prices and the general collapse of the middle class in our country.

We are hard-working people. We want to pay our bills. We want to keep what we worked so hard for. The constantly increasing cost of gas, oil, groceries are drowning us. I hear the same thing from most of our friends on a daily basis--hanging on by a thread, robbing Peter to pay Paul. It is such a stressful way to live. There are days when I get so discouraged I just want to call the banks and say just take it all. I don't have it in me to fight for it anymore.

This is a family in the State of Vermont.

Here is another one. This comes from an elderly couple in Vermont:

My wife and I are both 77, retired and living on a very limited income. We live in the country, and driving the 60-plus miles round trip for shopping and health care has become a financial hardship.

Traveling 60 miles for shopping and health care has become a financial hardship.

Even though we drive a car that gets 35 miles to the gallon, a tankful of gas eats up an awfully large amount of our disposable income.

That is true all over America. You have older people who get in their car, they go out to buy groceries, they go to the doctor, and suddenly they are finding that just getting into their car and going where they have gone their whole lives is now a very expensive proposition, in this case eating up a large part of their disposable income.

Another family writes:

I live in the Northeast Kingdom, which is a very rural area in the northern part of Vermont near the Canadian border, and I have to drive a 30-mile round trip to work in Morrisville and even farther to Stowe, where most of the jobs are now. With the gas prices high and most employers paying $8.50 to maybe $10 per hour, you spend much of your paycheck traveling to and from work.

In other words, in the real world, there are millions of people in rural Vermont and all over this country and in Florida who are making $8.50, $9, $10 an hour, and if you are paying $3.50 a gallon to get to work and you have to travel any kind of distance, what do you have left? Not a lot.

The average price for a gallon of gas recently hit a recordbreaking $3.62 a gallon, which is more than double what it was when President Bush first took office. The price of diesel fuel is now averaging over $4.17 a gallon, which is more than $1.36 higher than it was just a year ago. The price of oil is now $110 a barrel. I think these prices say it all. They tell every Member or should tell every Member of Congress what the American people understand, which is that we have a national emergency on our hands. If we do not act boldly and rapidly to lower gas and oil prices, the economic situation for millions of working families will only deteriorate even further.

What we are talking about is not just the worker who can't afford to fill up his gas tank, it is the entire economy. It is small businesses, it is farmers, it is truckers. The trucking industry is convoluting right now with these high prices. It is the increased cost of groceries, it is tourism. People come to Vermont and people go to Florida to enjoy vacations. They are not going to be able to drive there with these prices. In fact, what we are looking at is a major economic crisis impacting every segment of our economy.

Sadly, as in so many other areas regarding the needs of ordinary Americans, when it comes to gas prices the Bush-Cheney administration is just not there. This is an administration where, in area after area, you can count on them to stand up with the large multinational corporations. You can count on them protecting the wealthiest people in the country. Now, when the middle class is in crisis, when people cannot afford the rapidly rising costs of gas and oil, they are nowhere to be found.

What is particularly interesting, of course, as most people know, is both President Bush and Vice President Cheney have backgrounds in the oil industry. That is what they did before they assumed the Presidency and Vice Presidency.

Ironically--and this would really be almost funny if it weren't so sad--when President Bush ran for office in the year 2000, he touted his experience in oil as one of the reasons he should be elected President. He knew the oil industry. He would make the energy situation better based on his experience.

Here is a direct quote from what candidate Bush said in the year 2000, in his first campaign, regarding how he would improve our relations with some of the OPEC countries. This is what he said:

I will use the capital that my administration will earn with the Kuwaitis or the Saudis and convince them to open the spigot.

That is what candidate George Bush said in the year 2000.

Then he said, also in that campaign:

The President of the United States must jawbone OPEC Members to lower the price.

End of quote from candidate George Bush in the year 2000. That was 8 years ago. When then-candidate Bush made those comments, the price of oil was $30 a barrel. Today, after 7 1/2 years of the Bush-Cheney administration, the price of oil is now $110 a barrel.

It seems to me that it is imperative that among many other things, many other actions Congress must take, one of them is to do what President Bush talked about in 2000 but never did, and that is we must demand that Saudi Arabia and Kuwait produce the kind of oil they can. We must also move forward as a Congress to address the reality that OPEC is a cartel. That is their reason for existence. A cartel is formed in collusion in order, in this case, to prevent production of oil, control the production of oil in order to artificially keep prices high.

This Congress must demand two things: that Saudi Arabia and Kuwait and other OPEC members increase their production so we can lower prices, and second, we must be aggressive in telling the World Trade Organization that OPEC is a cartel; it must be disbanded.

Back to President Bush.

In 2004, when Saudi Arabia led the fight within OPEC to cut production and raise prices, the Miami Herald reported that President Bush ``refused to lean on the oil cartel'' and ``refused to even personally lobby OPEC leaders to change their minds.''

It is true that last January President Bush did visit Saudi Arabia to ask OPEC nations to increase production, but guess what. The Associated Press reported that President Bush's request was ``ignored.''

In 2000, as a candidate, he told us he was going to open the spigot, he was going to get them to produce more oil, but that, of course, has not happened.

Last March, after meeting with Saudi Arabia's oil minister, the Wall Street Journal reported that ``Vice President Dick Cheney suggested there is little more Saudi Arabia can do to increase oil production and relieve price pressures in global markets.'' But Stephen Brown, the energy economist at the Federal Reserve, has disputed this. He has said that ``Saudi Arabia is restraining its production, probably by about 1.8 million barrels a day. And OPEC is probably holding back 2.3 million barrels a day altogether.'' In other words, despite all of the rhetoric from President Bush, all of his experience in the oil industry, the reality is that Saudi Arabia is not producing the kind of oil it should be producing and we are hurting as a result of that.

Many of us are tired of waiting for the Bush administration to act. Congress must act. There are a number of things we must do in order to lower the price of gas and oil in this country. One of them is to demand that Saudi Arabia, Kuwait, and the other OPEC countries start producing the quantity of oil we know they can produce.

That is one thing we can do, but it is certainly not enough. The national oil emergency we currently face in our country and in many other countries demands both short-term and long-term solutions.

Long term, I think many people in the Senate and the vast majority of the American people understand that we must break our dependency on fossil fuel. We must move to energy efficiency. We must move to such sustainable energies as wind, solar, geothermal, biomass, and others. In my view, the potential is absolutely staggering in terms of the amount of energy we can produce through sustainable energy and the amount of energy we can save through energy efficiency.

Not only that, obviously we need to significantly improve public transportation. Our railroads today lag far behind Europe and Japan. In doing that, building a broad mass-transportation system, we can break our dependency on the automobile.

In terms of automobiles, people are just now beginning--and we must help them--to move to electric cars, move to hybrid plug-in cars. There is just enormous potential out there. Clearly, that is the long-term solution of where we have to go.

But I sometimes hear my friends coming here and they talk about a long-term solution and yet they forget about what is going on in America today for a family making $30,000 or $40,000 a year, and maybe they have two cars because they have two workers, and those people are going broke today.

So I do not think it is an either/or. I think we have got to be aggressive right now in moving toward energy efficiency and sustainable energy, but we have also got to be aggressive today in lowering the price of gas and oil. It is not an either/or. We move forward in parallel tracks.

One of the steps we have to take is to put pressure on OPEC nations to increase the production of oil. I think also we have got to break up OPEC, and let the free market work in that area. But that is only one of the things we have got to do.

Second, I believe it is absolutely imperative that we impose a windfall profits tax on the oil and gas industry. The American people do not understand, nor do I understand, why they are paying record-breaking prices at the gas pump, while ExxonMobil has made more in profits than any corporation in the history of the world for the past 2 consecutive years.

I know ExxonMobil and their propaganda machine will no doubt explain it. But the average person does not believe it and the average person should not believe it. ExxonMobil and the other major oil companies are ripping off the American people. That is clear. We need a windfall profits tax to address that.

Last year alone, ExxonMobil made $40 billion in profits, and rewarded its CEO Rex Tillerson with a $21 million compensation package. That is nothing. He is getting shortchanged, because the guy who went before him, when he retired--his name was Lee Raymond--got a $400 million retirement package. So my suggestion to Mr. Tillerson is: Go back to your board. You are getting ripped off 21 million bucks. How are you going to make it on that?

Here you have a company charging record-breaking prices, having given its former CEO a few years ago $400 million in a retirement package. But ExxonMobil is not alone. Chevron, ConocoPhillips, Shell, and BP have also been making out like bandits. In fact, the five largest oil companies in this country have made over $600 billion in profits since George W. Bush has been President. Not bad, $600 billion in profits in 7.5 years. And people in Vermont and Florida cannot afford to fill their gas tanks.

Last year alone, the major oil companies in the United States made over $155 billion in profits and, not surprisingly, those profits continue to soar. Today, ExxonMobil reported a 17-percent increase in profits, totaling $10.9 billion, $10.9 billion for one quarter.

Earlier this week, however, BP, British Petroleum, announced a 63-percent increase in their profits. Shell's first quarter profits jumped by 25 percent to over $9 billion; one quarter, 3 months. ConocoPhillips' profits increased by over 16 percent in the first quarter to over $4 billion.

It is hard to come up with the words to describe it, because I know, and I am sure you know, Mr. President, the problems middle-class people are facing today and what these high oil and gas prices are meaning to families, and at the same time this is going on, these major oil companies are enjoying obscene levels of profit. With their profits, among many other things, they are very lavish in the kind of benefits and salaries they provide their CEOs. Last year, Occidental Petroleum, one of the ``smaller'' companies, gave its CEO $34.2 million in total compensation. The CEO of Anadarko Petroleum received $26 million. Chevron's CEO made $15 million, as did ConocoPhillips' CEO. He made $15.1 million in compensation.

Let me be clear. I believe oil companies should be allowed to make a reasonable profit and CEOs of big oil companies should enjoy decent compensation. That is a tough job and they should earn a good salary. But they should not be allowed to rip off the American people at the gas pump, especially at this moment in our history when the middle class is stressed out and in many ways collapsing.

The time has come to impose a windfall oil tax on those companies so they cannot continue to gouge the ordinary people of our country. Unfortunately, however, imposing a windfall profits tax on big oil will not be easy. I think we all know the reason, and that is, since 1998 the oil and gas industry has spent over $616 million on lobbyists.

And dare I say that right now on the floors of the Senate, and on the floors of the House, you have very well paid lobbyists, former congressional leaders, big-time law firms, floating all over this place right now trying to convince Members of the House and the Senate to leave big oil alone. Not only have they spent, since 1998, $616 million on lobbying; since 1990 they have spent over $213 million in campaign contributions. That is the way the world goes--lobby, campaign contributions from powerful multinational corporations.

What is the end result? Their profits are soaring and ordinary Americans are hurting. The time has come, it seems to me, for the Senate to stand with working families all over this country, to have the courage to stand up to this very powerful industry and say ``yes'' to a windfall profits tax and ``no'' to the continued urges of the oil and gas industry to pat them on the back and do nothing.

While it is true that oil companies and their executives are making money hand over fist, it is also true they are not the only culprits in this situation. We must begin focusing on the very powerful speculators and hedge fund managers who have also been making obscene sums of money by speculating on futures and driving an unregulated market up and up and up.

There are some people who estimate, in fact, that half of the increase in oil costs is attributable to the cost of production but to the speculation that takes place.

In my view, Congress must act to rein in greedy speculators by closing what has been referred to as the Enron loophole and increasing oversight over the energy futures industry.

The Enron loophole was created in 2000 as part of the Commodity Futures Modernization Act. At the behest of Enron lobbyists, a provision in this bill was inserted in the dark of night and 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. Since the Enron loophole has been in effect, crude oil prices jumped from $33 a barrel in 2000, after adjusting for inflation, to over $110 a barrel today.

Last January, a veteran oil analyst at Oppenheimer estimated there is as much as a $57 a barrel ``speculative premium'' on the price of oil. In other words, he estimates that about half of the price of a barrel of oil is due not to the production and distribution of that product but simply to speculation.

The CEO of Marathon Oil said late last year that $100 oil is not justified by the physical demand in the market. In other words, those guys see that the price of oil is being driven up by speculation.

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 thank Senators Levin and Feinstein. I know Senator Dorgan and others have been involved in producing legislation and ideas to close this loophole. We must move forward and pass that type of legislation as soon as possible.

In addition--and this is an issue where there appears to be a degree of bipartisan support--some of our Republican friends also agree the Bush administration must stop the flow of oil into the Strategic Petroleum Reserve, and in my view, my view, immediately release oil from this Federal stockpile to reduce gas prices.

This action has been taken in the past. It is not a new idea. Goldman Sachs has estimated that continuing to fill the Strategic Petroleum Reserve has increased gas prices at the pump by as much as 25 cents a gallon, and that clearly is unacceptable.

Releasing oil from the Strategic Petroleum Reserve in the past, under both Democratic and Republican administrations has, in fact, lowered the price of gas and crude oil. For example, when President Clinton ordered the release of 30 million barrels from the SPR in 2000, the price of gas fell by 14 cents a gallon in 2 weeks.

When President George H.W. Bush, the first President Bush, released 13 million barrels of crude oil from the SPR in 1991, crude oil prices dropped by over $10 per barrel.

Let me conclude by saying that the issue we are dealing with today, in my view, is not only the high price of gas and oil. As serious as that is, and as much impact as that is having on our economy, the deeper issue here is the degree to which people in our country, the hard-working citizens of our country, will or will not continue to have faith that their Government represents them.

It is no secret that President Bush will likely go down in history as perhaps the least popular President and, in my view, one of the worst Presidents we have ever had. But it is also true that the ratings of this Congress are extraordinarily low; they are even lower than where President Bush is.

I think the reason for that is people are suffering terrible problems right now. In almost every area you can think of, this country is going in the wrong direction. The middle class is hurting. We talked about oil prices, food prices, the loss of good-paying jobs, the health care system, Social Security falling apart, people are paying 25, 30 percent interest rates on credit cards. People are in trouble. In a Democratic society, when people are in trouble, they look to the people whom they elected, to their Government, to protect their interests. They are looking to Washington right now. They are looking here. They are hurting, and they are asking whether the Congress of the United States has the courage to stand up to the very powerful financial interests which have so much influence over what goes on here.

So I hope very much we have the courage to once again earn the confidence of the American people, that we understand the pain they are feeling, and that we act properly, that we lower gas prices, that we lower oil prices.

We can do this with bold action, and we can move this country to a new energy policy dealing with energy efficiency and sustainable energy. I think the American people want us to do that. I think that is, in fact, what we should do.

I yield the floor, and suggest the absence of a quorum.

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