American Jobs Creation Act of 2004 - Conference Report

CONGRESSIONAL RECORD
SENATE
Oct. 11, 2004

AMERICAN JOBS CREATION ACT OF 2004-CONFERENCE REPORT

Mr. McCONNELL. Mr. President, today is a truly historic day for my State, the Commonwealth of Kentucky. Burley tobacco production has been a part of our way of life going back to 1792 when Kentucky joined the Union. Tobacco itself-there are tobacco leafs painted in various places here in the U.S. Capitol-was the most important export product from the Colonies, predating the formation of our country.

Over the last 40 years, we have come to understand that the use of tobacco products is certainly not good for our health. More Americans, correctly, are choosing not to use tobacco products. Consumption has, therefore, declined, as, frankly, it should.

Back in the 1930s, when tobacco was still at its peak but we were in a national Depression, during the New Deal a Federal tobacco program was created. After that program was enacted into law by President Roosevelt, employees from the U.S. Department of Agriculture went around and surveyed the farms in Kentucky and Tennessee and Virginia and the Carolinas and Georgia to find out what their historical production had been and assigned those what we now call quotas to the land.

That quota was like an asset. It could be sold. It could be leased. It was an asset attached to the land. And that quota had in some early years grown but, of course, over the last few years it dramatically contracted. That asset was on its way to becoming worthless, many people felt, in my State.

To give you a sense of how pervasive tobacco has been in the Commonwealth of Kentucky, when I came to the Senate some 20 years ago, we grew it in 119 of our 120 counties. We had 100,000 producers. The average base then was about three-quarters of an acre. So you had a lot of people in our State who got some income off burley tobacco. It provided for many families a significant portion of their income. For a whole lot of other families, because of the auction warehouse system under which it was sold in the fall, it provided Christmas money for the family, a second income, an opportunity for some extras. For a lot of other Kentuckians, it was very much a basic part of their income.

Well, all this is in the process of changing. Six years ago, I advocated a buyout. At that time that was controversial in my State. In fact, I think a majority of the tobacco farmers thought I was in the wrong position. That certainly was the view of the Kentucky Farm Bureau and the burley council and the burley co-op, all of whom thought I was in the wrong position.

A few years later, I noticed I was then being treated as a visionary who was ahead of my time and had sensed that this thing was heading in the wrong direction and we better try to figure out some way to achieve a buyout or we would never get an opportunity.

A lot of people have contributed to this day. This buyout that is in this bill is not paid for by the taxpayers. And it is, indeed, a buyout. It terminates the program. The program is entirely terminated and off the books. People who vote for this bill will be able to say, among other things, that they ended the Federal tobacco program.

It is paid for by a manufacturer's fee, which will no doubt be passed along to the consumers. And as public health advocates will tell you, the higher the cost of tobacco products, the fewer the number of people who will use them. So it even has a public health aspect to it.

That is the version of the buyout, $10.1 billion over 10 years. That is in this underlying bill.

Mr. President, as I say, today is a historic day for Kentucky and other tobacco producing States that have suffered for far too long under a Government program that destroyed their assets, sapped their competitiveness, and destabilized their communities.

The tobacco buyout included in this legislation is culmination of many years of hard work and difficult sacrifice.

Kentucky has long been known for its three "B"s: Bourbon, basketball, and burley tobacco. Burley tobacco has been the lynchpin of Kentucky's agricultural economy since Kentucky first became a State in 1792.

Since the early years of the Commonwealth, burley tobacco provided a steady and reliable income for farmers with small patches of land unsuitable for the production of other crops. There are virtually no other crops that can provide the return per acre that tobacco production does, and it has a unique place in the economy and the culture of Kentucky.

However, in recent years, increased foreign competition combined with decreased consumption, increased taxation, and a broken Federal tobacco program created a perfect storm that had the potential to bring about an economic disaster of epic proportions for Kentucky.

The passage of this buyout will end the Federal tobacco program and end the suffering caused by this outdated program. The buyout will pay owners of quota for what remains of their disappearing asset, and it will provide assistance to growers to help them move into other forms of agricultural production.

Those that choose to continue to produce tobacco will do so without the price supports or Federal programs that support other crops. They will have to compete on the free market. However, without this buyout, they would not have been able to compete at all.

This is indeed a great day for the Commonwealth of Kentucky. But, no project of this magnitude is undertaken alone, and there are many people to whom I am grateful.

Many people deserve thanks for bringing us to the day we experience today. I thank Chairman Grassley. I know he, as indicated, was not in favor of this, but this was part of the compromise worked out in the conference.

I particularly thank Chairman BILL THOMAS over in the House, who did support it and aggressively advocated it, helped work with us to craft a final version.

I particularly thank RICHARD BURR from North Carolina, who was on the conference and a particularly significant player in this whole process.

Here in the Senate, I thank Senator ELIZABETH DOLE, whose tireless effort on behalf of farmers in North Carolina is truly inspirational. I thank her staffer David Rouzer, who also worked for Senator Helms, for being a critical part of all of this. Senator Helms, of course, was so much associated with tobacco over the years.

I also thank Senator Bunning and Congressman Lewis of my State. I thank my own staff, former staffers Mason Wiggins and Hunter Bates, who in the early days were extremely important in this. I thank my chief of staff Billy Piper, Scott Raab, and Michael Zehr, my agriculture aid. They were all indispensable.