tv U.S. Senate CSPAN June 13, 2011 5:00pm-8:00pm EDT
more tax breaks for wealthy americans and large corporations. and here's where i come to what i just don't understand. about what's going on in this body. evidently, it isn't going on in america. 60% don't want medicaid, 82% didn't want medicare touched. just the enact it is a majority on medicaid is amazing and wonderful to meevment to me. i don't understand it, mr. president. i think it's political. i think people know that poor people, the disabled -- i run into them often, seek them out sometimes, the disabled. they gather in clusters. you see 50, 75 people in wheelchairs. what do they depend on? they depend on medicaid. we see them here in the capitol. do people stop to see them?
not particularly, no. they know that so they're not very good lobbyists. they can't be very good lobbyists; it's harder for them to get around. so is it political? i mean, the ryan budget cuts taxes on the wealthy, on big-deal people and big-deal corporations by $4 trillion, but cuts medicaid. is that an act of social conscience? is that an act of budget wisdom? is that a thought-through value system? or is it just political basically because they know that poor people don't vote? that's what i think the answer is. you get worried about medicare real fast, and we saw the results. we saw the house back off from that completely. medicaid, not so. and it won't be so unless people start standing up for medicaid, because they don't have lobbyists. they can't afford lobbyists. they don't even speak that much
for themselves. i don't get as many letters from them by a factor of ten as i do from medicare recipients. there's sort of a sense that life has it in for them. and that's partly an appalachian characteristic and i think many of many parts of the country and i often regret it. a certain fatalism in life that god has a plan for you and it isn't necessarily very good. and if people accept that -- which i don't -- as a theory, then they're not going to fight for what lyndon johnson gave to the nation and passed overwhelmingly in 1965. any deep cuts to medicaid will also, to the pleasure of some, undermine the health care reform law that we just passed, which still is law. medicaid is the underpinning of the entire coverage expansion and reform. we talk about 32 million people that we're going to cover.
that goes way down, mr. president, if these medicaid cuts are made. so i ask my colleagues, why is medicaid so often treated like a second-class program? and more to the point, why are people who are on medicaid treated so often as second-class people? how does that work out? is that a product of the american sense of justice? is that thoughtful america looking at, you look around you. i have friends, we all have friends who have been on medicaid, are on medicaid, were on medicaid, have made it. unfortunately, sometimes those people forget their medicaid background and turn away from that because they're into a new and better life. somebody has to fight for these people, mr. president. somebody has to fight for them. is it the feeling that maybe they're an unwanted burden on
society? we have a tendency in america to say that if you don't work, it's because you don't want to. if you're not -- if you don't have a decent job and you have a shabby home, it's because that's what you sought. not what was given to you in your, at least destiny of the moment. again, i think is it because most of the people enrolled are low-income and many typically do not vote? i think that sums it up pretty well. but it's more than that. it's more than that. it's very hard -- you can't go into the hollows of appalachia or nebraska or other places and organize poor people to vote because their sense is why? what does it get me? where does it get me? decade after decade. a little bit is there on the part of the american people a
little sense of a disdain towards people on medicaid? that somehow medicaid -- a glorious program -- is an inglorious word when applied to individuals because it implies that they don't want to better themselves. now i'm not going to go through my vista experience in west virginia for the 58th time on this floor, but all i can tell you is i saw so many examples of people who are beaten down not with a cudgel, but they were beaten down because all economic opportunity vanished from their life, all the coal mines shut down. there weren't any other jobs around. they didn't get to go to school. why didn't they get to go to school? because no school bus would come pick them up because they were too far beyond the end of a hard road and county law said you don't have to pick them up. the deck stacked against you? yes, it is. now out of that group, there is
one -- i guess he's a guy about 40. i won't mention his name, but he's got a terrific job. he works with c.s.x. system, is one of their railroad maintenance people. he's got a good family. wonderful, wonderful person. but, you know, his parents were killed in a vehicle crash, and his brothers have been fighting all kinds of problems. so it really takes something special to fight your way out of that self-defined position and make you move forward. so i must say to my colleagues that the point of a representative democracy is not to serve the few, not even to serve many, but to serve all as
best as we can. does that mean we don't touch anything in medicaid? no, it doesn't. but does it mean that we keep medicaid as a safety net? yes, it does. we don't -- we're not here elected by some people with incomes above "x" amount of dollars. we're here by all people, even the people who didn't vote for us or didn't vote at all. i take that very seriously, and i take my experience with west virginia very, very seriously. so 68 million people enrolled in medicaid. i think they deserve a voice in this debate, and i for one am going to speak out for them. it's because somehow we feel that medicaid recipients are not worthy -- i've expressed that in a different word -- simply because they have fallen on hard times or they were born in hard times. how do you help that? your father didn't work, your
mother didn't work; there wasn't any work available so you're born in that situation. what are you going to do about it? you're born in the ghetto. rise above that. barack obama did. therefore, so can anybody. life doesn't work like that, and the presiding officer knows that very, very well. then i must ask of my colleagues: how could this be? we all have neighbors. we have friends, we have family that have or do benefit from medicaid, even perhaps in their distant past. in fact, nearly half of all americans have a friend or family member that has received medicaid assistance at some point, and they're absolutely worthy of our support. is it because we believe medicaid spending is truly out of control? then i would remind my colleagues that medicaid costs per beneficiary grew much lower over the past decade than costs for any private health insurance
coverage. the administrative costs in medicaid are about between 1% and 2%. the average health insurance company probably 10%, 15%, 20%. all of this despite the fact that medicaid's more comprehensive benefits are there. they're much larger benefits. they cover more. they do more for people. and significantly lower cost sharing. i fervently believe, mr. president, that the american tradition of shared responsibility, everybody working together for the greater good, is a tradition worth upholding and that a government has an ongoing role to play in its preservation. cannot play that role perfectly, but can do it as best and most fairly as is possible. instead of shortchanging medicaid, we must have the courage to rein in tax breaks for corporate america and for people of great wealth. medicaid does exactly what it was designed to do all those
years ago, mr. president. provide a safety net for low-income americans. there are lots of worthwhile and positive ways that we can improve the program, i grant you that, but trashing medicaid, gutting medicaid and especially if it's sort of out of, sort flipping it aside or for political gain, cannot be an option. i thank the chair, and i yield the floor. a senator: mr. president? the presiding officer: the senator from iowa. mr. grassley: mr. president, tomorrow afternoon we're going to be voting on senator coburn's amendment dealing with ethanol. so i come to the senate floor at this time to express my strong opposition to that amendment. senator coburn's amendment would raise the tax on domestic energy
production. it would do this by repealing an incentive for the use of homegrown renewable fuel called ethanol. with conflicts in the middle east and crude oil more -- priced at $100 a barrel or more, and domestic biofuels should be on the same side. let me make that clear once again. we have middle east problems. we have crude oil priced at over $100 a barrel. oil interests and biofuel interests, if both are domestically produced, should be on the same side of the energy issue.
why would anyone prefer less domestic energy production? in other words, why would anyone prefer importing more oil over domestically produced energy, whether it's fossil fuel or whether it's renewable? we should all be on the same side of more domestically produced energy. the tremendous cost of america's dependence on foreign oil has never been more clear. i support drilling here and drilling now. i support renewable energy. i support conservation. i support nuclear energy. and the reason i support different forms of energy and why we have to support more energy, if you're going to have an expanding economy to create more jobs, you're obviously
going to use more energy. and remember, i included conservation in my, in my energy program. so, the attacks on domestic energy is really quite a remarkable thing happening right now when gasoline is $4 a barrel and we're spending $385 million -- or i should say $835 million a day importing oil. so, whether it's oil or whether it's renewable energy, we shouldn't be fighting each other over any source of domestic energy. we should be fighting together against opec and these foreign dictators and oil sheiks, some of them that hate the united states, from holding our economy
hostage. the author of the amendment has argued that the production of clean homegrown ethanol is fiscally irresponsible. it's important to remember that the incentives exist to get producers of ethanol to compete in the foreign industry. have a level playing field for all forms of energy. the oil industry has been well supported by the federal treasury for more than a century. the senator from oklahoma, the sponsor of the amendment, has touted with much fanfare a letter from oil companies that say they don't need or want the credit. it's my understanding that many of the oil refiners are no longer in the business of downstream ethanol blending and subsequently do not pay the
excise tax on gasoline and do not benefit from the credit. now isn't it really easy to be advocating repeal of something when you don't benefit from it? it's even easier to advocate for its repeal when doing so would undercut your competition. it -- it shouldn't surprise anyone that the oil refineries and big oil are advocating a position that would reduce the competitiveness now that they have from the renewable ethanol. refineries enjoy a cozy monopoly on our nation's transportation fuel. they oppose the renewable fuels standard because it cuts into their monopoly. alternatively, if the members of the national petro chemical and
refiners association say they don't want or don't need the credit, then it's pretty simple: just don't take it. it's a tax credit which they must apply for in the first place, and they apply for it to the internal revenue service. if they don't want it and they don't need it, they shouldn't file for that credit with the internal revenue service. i would be glad to work with the senator from oklahoma in getting the members of the national petroleum and refiners association to return the credit to the federal treasury. no one is forcing them to take the credit. since they seem eager to return it, perhaps senator coburn and i can work together to get them to return it. if you like tight gasoline supplies and if you like $4 gasoline, join the campaign led by big oil and the national pet
petro chemical and refiners association, but if you want less dependence upon foreign oil and more use of home-grown renewable fuels, support ethanol producers. the fact is a portion of the -- the portion of the industry that blends ethanol and sells it to the consumers supports maintaining this credit. i refer to an organization called the society for independent gasoline marketers of america, or they go by the name sigma. that organization recently wrote to senate majority leader and minority leader opposing efforts to prematurely and abruptly eliminate the blenders credit, and i would quote from their letter -- "on behalf of our
client, the society of independent gasoline marketers of america, i write to you to oppose efforts in congress to prematurely and abruptly eliminate the veetc -- that's the ethanol blenders credit. increasing the tax paid on ethanol-blended gasoline makes no sense at a time when consumer fuel prices are already high and the need to maximize domestic energy sources is so very critical. very true at the time when gasoline is $4 a barrel. now, this organization, sigma, their members account for 37% of the petroleum retail market. sigma works to promote competition in the marketplace to help keep consumer fuel costs down.
now, this is contrary to the position of oil refiners who prefer no competition. i have further words from that letter. this incentive has been extremely useful tool in helping the nation's fuel marketers and chain retailers deliver fuel to the market at a competitive price. continuing to quote, by providing long-term price competitiveness for ethanol-blended fuels, veetc also helps provide assurances to marketers and retailers that important infrastructure investments necessary to deliver these fuels will continue to provide returns and not result in wasted improvements.
a further quote, sigma opposes moves to prematurely or abruptly end the subsidies without any consideration for future fuel or fuel delivery costs. to end this incentive immediately would no doubt result in an immediate spike in consumer fuel costs. and then the last paragraph, i quote -- "sigma believes that a policy that provides an effective transition for the industry from the current tax structure is a better alternative to slash and cut budget strategy being promoted by some members of congress." so there you hear from another segment of the industry. i would ask unanimous consent to put this entire record -- letter in the record at the conclusion of my remarks. the presiding officer: without objection, so ordered.
mr. grassley: the senator from oklahoma also mentioned the total cost of the blenders credit as a reason for supporting repeal of veetc. he claimed that the american people will have spent spent $32 billion on this credit over the past 30 years. now, that may be the case. again, i don't believe we should be debating ethanol incentives by themselves or in a vacuum. for comparison's sake, i'd like to inform my colleagues of the cost and duration of a few oil subsidies. the senator from oklahoma has derided the 30-year-old ethanol blenders credit, arguing that the industry is mature. well, what about our century old oil industry? don't forget, oil was discovered in pennsylvania in 1859. now, we haven't had the incentives for that long, but according to the government accountability office, the tax
breaks allowing for the expensing of intangible drilling costs began in 1916, more than 95 years ago and continues today. the percentage depletion allowance was enacted in 1926, 85 years ago, and it still exists today. after 95 years, is the domestic oil industry not mature? i know my colleagues will be interested in how much these two subsidies have cost the american people. a report issued by the general accounting office in the year 2000 looked at the subsidies for the oil production. they recrude a 32-year period between 1968 and the year 2000. during that time frame, intangible drilling subsidy cost the american people as much as as $52 billion.
the percentage depletion subsidy cost the american people people $82 billion. so these two provisions enacted nearly a century ago cost the american people as much as as $114 billion from 1968 until the year 2000, and this doesn't even include the subsidies during the past 11 years. last month, we had a vote here in the senate to repeal a number of these oil and gas tax provisions. opponents of repealing oil and gas subsidies argued -- argued then and i would presume would argue again today that doing so would reduce domestic energy production and drive up our dependence on foreign oil. opponents at that time also argued that it would cost u.s. jobs and increase prices at the pump for consumers.
now, i happen to agree with those arguments, but if those arguments are good for oil, they are good for not just ethanol but they are good for all sorts of green energy as well. prices at the pump are nearly $4 a gallon. all of our constituents are crying out for action to lower these prices. so it makes sense that congress would consider the steps to address the rising energy costs and work to drive down the costs to consumers at the pump. that's not what the coburn amendment would do. it would not drive down the costs at the pump at all. it would very likely lead to higher prices for consumers. it won't lead to the production of any more energy. it won't create any more jobs. it could very well lead to less domestic energy production and
less employment in the u.s. energy sector. in other words, more unemployment and more dependence upon foreign sources of energy. at a time of $4 gas and 9.1% unemployment, why would we in this body consider an amendment that will increase the cost of energy production, reduce guess energy supply and lead to job losses? ethanol is reducing prices at the pump. a recent study by the center for agriculture and rural development found that ethanol is reducing the price at the pump by an average of 89 cents a gallon. the fact is this amendment is not about reducing prices at the pump. the amendment before us is not about reducing our dependence upon foreign oil. that amendment is about raising taxes, and one thing is for
certain. if you raise taxes on any activity, you get less of it. that's common economic principle. a taxpayer watchdog group considers a repeal of this tax incentive to be what it is, a tax hike. americans for tax reform said -- quote -- "repealing the ethanol credit is a corporate income tax increase." end of quote. i agree. now is not the time to impose a gas tax hike on the american people. now is not the time to send pink slips to ethanol-related jobs. i know we -- i know we all agree that we cannot and should not allow job-killing tax hikes during the time of economic uncertainty. what this congress should be doing is increasing the domestic production of energy as a way to increase jobs, increase domestic
investment and lower prices at the pump. this amendment does none of those things and actually, you know what? does exactly the opposite. a repeal of the ethanol tax incentive is a tax increase that will surely be passed on to the american consumers. repealing incentives for ethanol would have the same exact result as the repeal of the oil and gas subsidies. we'll get less domestically produced energy, it will cost u.s. jobs, it will increase our dependence upon foreign oil, it will increase prices at the pump for the american consumer. so why do my colleagues want to increase our foreign energy independence when we can produce it right here at home? so i'd like to ask my colleagues who voted against repealing the oil and gas subsidies but
support repealing incentives on renewable fuels why the inconsistency. interestingly, the same oil and gas association that is lobbying for repeal of the ethanol incentive led the charge against raising taxes on the oil and gas industry. the president of the national petro camden and refiners association stated -- quote -- "targeting a specific industry or even a segment of that industry is what we would consider punitive and unfair tax policy, and it is not going to get us increased energy security, increased employment and certainly not going to lower the price of gasoline." end of quote, from the president of the national petro chemical and refineries association.
the fact is it's intellectually inconsistent to say that increasing taxes on ethanol is justified but that it is irresponsible to do so on oil and gas production. if tax incentives lead to more domestic energy production and to good-paying jobs, why are only incentives for oil and gas important? it is even more ridiculous to claim that the 30-year-old ethanol industry is mature but the oil and gas industry now over 100 years old is not. regardless, i don't think that we should be raising taxes on any type of energy production or on any individual, particularly when we have a very weak economy. and this amendment is a tax
increase. the senator from oklahoma also insists that because the renewable fuel is required to be used, it doesn't need an incentive. but but with oil prices at $100 a barrel, oil companies are doing everything they can to extract more oil from the ground. there isn't a mandate to use oil, but oil already has a 100-year-old monopoly on our transportation infrastructure. and that 100-year-old monopoly, they want to maintain as much of it as they can now. right now, because about 10% of the energy used in cars is ethanol, they may only have a 90% of a monopoly, but they sure got a lot to say about what goes into your gas tank without
competition. when there is little competition to oil and it's enormously profitable, wouldn't that industry argue that the necessary incentives exist to produce it without additional taxpayer support? oil essentially has a mandate today, and the economics of oil production are clearly in favor of producers. it's still unclear to me why we're having this debate on this bill. this is not an energy bill. it is not a tax bill. its prospects here in the senate are unseine. maybe, most importantly, if this amendment were tached to a bill, the entire bill would be blue-slipped by the house because revenue bills nders under our constitution must originals nate the house of representatives and this is not a house revenue bill.
if we send is it to the other body with this amendment, they will send it right back here to us. it will be dead on arrival in the other body. so why are we having this debate on this bill? we should be debating this amendment in the context of a comprehensive energy plan. this debate should be included -- should include a review of the subsidies for all energy production, not just for one of many renewable resources. i could ask, why are we talking about this subsidy on energy -- i mean, on ethanol when we're not talking about the subsidies on oil? why should we be tbawg this subsidy on one -- we be talking about this subsidy on one alternative energy, which is ethanol, but not talking about the subsidies for wind and solar and biomass and geothey are mall
and i guess a dozen other alternative energies that we have? it boils down to the fact that we shouldn't be singling out ethanol. nearly every type of energy gets some market distorting subsidy from the federal government. and i've indicated that to you at least for 95 years on one oil subsidy. an honest energy debate should include ethanol, oil, natural gas, nuclear, hydropower, wind, solar, biomass and probably a lot of others that don't come to my mind at this particular time. in december 2010, congress enacted one-year extension of the volume umetric ethanol excise tax credit that for short goes by the acronym vetc.
this has allowed congress and the domestic biofuels industry to determine the best path forward for federal support of biofuels. as a result of these discussio discussions, senator conrad and i introduced bipartisan legislation on may 4 that is a serious, responsible first step to reducing and redirecting federal tax incentives for ethanol. our bill will reduce vetec to a fixed rate 206% in 2012, 15 cents in 2013. it will then convert to a variable tax incentive for the remaining three years based upon the price of crude oil. when crude oil is more than $90 a barrel, there will be no blenders' credit whvment crude oil is $50 a barrel or less, the blenders' credit would be 30 cents. the rate will vary when the price of crudes is between $50
and $90 a barrel. when oil prices are high, a natural incentive shouldies if the market to drive ethanol use. it also would extend through the -- the bill would extend through the year 2016, the alternative fuel refueling property credit, the cellulosic producers' tax credit, and the special depreciation aallowance for cellulosic biofuel plant property. today senator thune and senator cloture chaklobuchar are introdg another bill to immediately reduce and reform the ethanol tax incentive. it includes many of the same features as the bill i introduced last month but it enacts the reform this year. senator thune's approach also leads to significant deficit reduction. the legislation we've introduced is a responsible approach that
will reduce the existing blenders' credit and put those vbl resources into investing in alternative fuel infrastructure, including alternative fuel pumps. it would responsibly and predictably reduce the existing tax incentive and help get alternative fuel infrastructure in place so consumers can decide at the pump what fuel they'd prefer. i know that when the american consumers have their choice, they will choose domestic, clean, affordable, renewable fuel. they'll choose fuel from america's farmers and ranchers rather than from oil sheikhs and foreign dictators. both of the ethanol reform bills i mentioned are supported by the ethanol advocacy groups in an almost unprecedented move, the ethanol industry is advocating for a reduction in their federal incentives.
no other energy industry, whether it's fossil fuels or renewables, has come to the table to reduce their subsidies. no other energy advocate has come to me with a plan to reduce their federal support. in conclusion, i'd like to address two points that ethanol opponents continue to make despite facts to the contrary. first, ethanol and ethanol incentives are not a major factor in rising food and corn prices. u.s. secretary of agriculture tom vilsack recently stated -- quote -- "during the great run-up in food and commodity prices in 2007 to 2008, biofuel production played only a minor role, accounting for about 10% of the total increase in global prices. qulings "end of quote.
but going back to that time or even more recently, listen to the big food manufacturers that are part of this coalition attacking ethanol. you'd think that the entire blame for the increase in the price of food is because of eth, even though ethanol -- is because of ethanol, even though ethanol consumes only 3% of the coors grain produced in the entire world. a recent report by the center for agriculture and rural development skewed concluded that only 8% of the increase in corn prices from 2006 to 2009 was due altogether million to. further, they concluded that because of this small impact, it -- quote -- "necessarily implies that the contribution of ethanol subsidies to food inflation is largely imperceptible in the united states." end of quote. second, ethanol reduces greenhouse gas emissions significantly compared to gasoline.
the fact is, under the renewable fuel standard created in 2007, corn eth nominee was required -- ethanol was required to real estate duce greenhouse gas emissions compared to gasoline by at least 20%. now, the fact is corn ethanol exceeded that threshold. if you remove e.p.a.'s use of the murky science surrounding emissionemissions from indirecte changes -- land use chairntion ethanol reduces greenhouse gas emissions by 48% compared to gasoline. a recent peer review study published in the yale journal of industrial ecology found that ethanol reduces greenhouse gas emissions by up to 59% compared to gasoline. ethanol currently accounts for 10% of our gasoline fuel pool. a study found that the ethanol industry contributed $8.4
billion to the federal treasury in 2009. that happens to be $3.4 billion more than the ethanol incentive. today the industry supports 400,000 u.s. jobs. that's why i support homegrown renewable, reliable fuel industries. i'd rather our nation be dependent on renewable fuel producers across this country, rather than relying on middle-eastern oil sheikhs or humana low chavez in brazil. and none of those people like us and some of them are training terroristterrorists with our owo kills. i'd preaver that we instead -- i'd prefer that we instead support our rue newable fuel producers based right mere in the continental united states. i'd prefer that we decrease our dependence on hugo chavez and not increase it. and certainly don't support raising the tax on gasoline
during a weak economy. i encourage my colleagues to vote "no" on the motion to invoke cloture on the coburn amendment and i yield the floor. a senator: mr. president? the presiding officer: the senator from nother. mr. menendez: i ask unanimous consent that the period for morning business be extended until 7:00 p.m. with senators permitted to speak for up to ten minutes each. the presiding officer: without objection, so ordered. mr. menendez: mr. president, i ask unanimous consent to speak in morning business for 25 minutes. the presiding officer: without objection. mr. menendez: mr. president, to the millions of americans who are struggling to find jobs or make ends meet, this is simply stating the obvious, but i rise today a decade after we were told that the bush tax cuts for the wealthy would stimulate the economy and create jobs to say that they have done neither.
a decade of the bush tax cuts have proven what we knew from the beginning: that they disproportionately benefited the wealthy, shifted wealth, did nothing for the middle class, and nothing trickle the down. -- trickled down. the tax cuts exploded the debt and continued to be an economic burden that be with twisted into a republican man infrastructure, an ironic rallying cry for what clearly is a failed economic policy. and yet addherence to the tax cuts for the wealth economy is a republican political litmus test no matter how clear the evidence is that they have failed to deliver on their promise. and now we again hear our colleagues on the other side of the aisle pursuing their "my way or the highway" approach to legislating. this time they're protecting these failed tax policies in the
current debt limit negotiations and they're putting tax cuts for millionaires ahead of poor seniors in nursing homes. these are the very same tax cuts for millionaires that helped get us into this fiscal mess, and they should most recently be on the table to help us get out. it is like my republican colleagues have thrown a lavish dinner party for the past decade and now they want us to pick up the check. what we're saying, mr. president, is, let's go dutch and share the tab. ten years later it is abundantly clear that tax cuts for the wealthy are nothing more than an ideological and political pivot point, not a sustainable economic policy. our republican colleagues use this failed notion as a one-size-fits-all for political sleight of sleight of hand for l circumstances.
tax cuts in all times of . present, that's nots. policy, it's a convenient bumper sticker slogan. our republican friends on the other side come to the floor prepared to end medicare as we know it. they come to the floor prepared to slash government to the bone but are unwilling to even entertain revisiting this failed economic policy. unwilling to consider adding a single penney to the revenue side of the equation by limiting this blind giveaway to those who need it the least. they will not entertain asking the wealthiest to be part of the solution for america, and i believe if asked they would be. they will not put tax cuts on the table but have made ending medicare as we know it the centerpiece. they've told us from the beginning that wealth will trickle down, tax cuts will lift all boats, those are get the benefit of the cuts will do what's right for america and i people and create american jobs
for american families. well, the facts do not suggest such an altruistic outcome. tax cuts for the wealthy have turned out to be the greatest failed jobs program in american history. all of the grand promises aside, all of the rhetoric about job growth and economic stimulus, all of that lofty rhetoric aside, just three years after the bush tax cuts in june of 2004 we lost almost a million jobs. more than 300,000 a year for each year of three years. the fact is this economic policy didn't stimulate job growth at home, but it did create job transfers abroad. factories closed, jobs went overseas, services were outsourced, the rich got richer and tax cuts produced no jobs in america for three years.
none. in april of 2003, almost two years after the tax cuts were passed, president bush stood before the american people and he said -- quote -- "these tax reductions will bring real and immediate benefits to middle-income americans. by speeding up the income tax cuts, we will speed up economic recovery and the pace of job creation. and he called the tax cuts a victory for fairness and a vote for economic growth. well, the fact is that the bush cuts coincided with the most anemic economic expansion of the post war period. it exploded the deficit and the debt and concentrated wealth at the top, unlike any concentration of wealth since the gilded age of the late 19th century. this, in addition to two wars unpaid for in iraq and afghanistan, a new entitlement program passed by republicans unpaid for, and a marketplace
that instead of being a free market was a free-for-all market created the excesses that brought us to the culmination of 2008's incredible economic challenge to this country on the verge of a potential new depression and drove so much of the debt that the nation faces today. so for all the rhetoric from the right, the bush tax cuts have been the greatest failed jobs program and the most ineffective economic stimulus effort in our history, succeeding only in creating a new class of superrich in america. let's talk about the shift in wealth in the last decade. as much as my republican colleagues try to twist themselves into knots and jump into elaborate hoops to prove the opposite, the facts are clear. ten years later and the bush scats disproportionately widened
the gap today where the wealthiest 1% of households in this country own almost 40% of all private wealth in this country. more wealth than the bottom 90% of all americans combined. think about it, mr. president. the wealthiest 1% of households in this country own 40% of all private wealth, more than almost all of the rest of us combined. that is an extraordinary shift in wealth in the ten years since the tax cuts were enacted that has cost this nation $2.5 trillion in revenue, with about 40% of the benefits going to households with incomes over $380,000. yet, our friends on the other side say no to a single mother who sits up in the middle of the night with a sick child wondering if she can afford to
take that child to the doctor, praying so that she can afford the medicine that child needs and still put food on the table, hoping she'll be able to keep her job and her health care plan. all that wealth at the top, and republicans have said no to a young student who needs a pell grant so he or she can get the education they need to succeed. all that wealth at the top, and republicans have said no to a mom-and-pop grocery store owner who can't get the capital they need to make reprayers or expand -- repairs or expand. our friends on the other side looked into the eyes of that mother, student, that mom and mop seined no to health care, no to education, no to business capital, no to extending unemployment benefits. but asking the wealthy to pay their fair share that,'s off the table. to one thing they have said yes is to ending medicare as we know it and leaving seniors to fend
for themselves. now, i have been visiting senior centers in my home state of new jersey -- i just came from one earlier today to hear thoughts on the current budget discussions on medicare. a typical 65-year-old at these meetings under the republican budget proposal would pay an additional $70,000 by the year 2022. right now over 1400,000 seniors -- 140,000 seniors in new jersey are paying more for their health care because of that doughnut hole. under the republican plan those seniors will pay an additional $80 million for prescription drugs next year. by 2020 seniors in the doughnut hole will pay an additional $1.6 billion. nationwide nearly 4 million seniors will pay $2.2 billion more for prescription drugs in 2012 alone under the republican plan. a plan that would end medicare, also force at least one million
seniors to pay over $110 million more for annual wellness visits in 2012. and then turning to medicaid, look to go turn that into a block grant program, the republican plan could cost america more than 2 million private-sector jobs and threaten our economic recovery. but that's not all. nationwide the republican plan could cut more than $503 billion of medicaid funding for seniors, the disabled, including lifesaving nursing home care, leaving us with the uncomfortable and unanswerable question i pose to my republican friends: what will those fellow americans do? where will they go? what happens to them under the republican budget plan? these are people, not budget numbers. what happens to them? something is wrong with that picture of america. it is not the america i know,
mr. president. something is fundamentally wrong when we let seniors fend for themselves and enact policies that lead to inequalities in income and wealth that are the most skewed since the gilded age and the great depression. how many years are we going to buy into the failed notion of trickle-down voodoo economics that reward winners and leave the middle class behind. we know we need to kuft wasteful spending, balance the budget. it wasn't that long ago that in fact during another democratic administration, we had budget surpluses as far out as the eye could see. and how quickly we forget. the day bill clinton left office, he handed the incoming president a $236 billion surplus with a projected surplus of $5.6 trillion over the next ten years. when president bush left office, he turned a $236 billion surplus into a $1.3 trillion budget
deficit with projected shortfalls of over $8 trillion over the next decade and handed the new president -- president obama -- an economy headed off the cliff. now our republican colleagues want to give more tax cuts to millionaires and billionaires, continue subsidies to big oil while we cut medicare as we know it. they insist on tax cuts that will cost $7 billion on the revenue side and trillions more by slashing tax breaks for the wealthy and powerful. those making more than $1 million a year will see a windfall of $125,000 each from the tax cuts and tens of thousands more from proposed tax rate cuts, while people in my home state lose $34 billion in health benefits and 400,000 new
jerseyans end up without health coverage at all. they want to continue to shift the balance to millionaires and billionaires while making draconian cuts to health care benefits to seniors. cuts do not reflect our values as a people and as a nation. even a majority of tea partyers think it's a bad idea according to recent polls. now i'm remind that had our distinguished republican colleagues are symbolized in their party by an elephant, a large animal that never forgets. but conveniently our republican colleagues have forgotten what price president cheney told america on national television as he was waging two wars, both unpaid for. he said -- quote -- "deficits don't matter." vice president cheney: deficits don't matter. republicans have apparently forgotten president bush's own words on april 16, 2001, about the benefits of favoring the wealthiest americans. tax relief will create new jobs.
tax relief will generate new wealth and tax relief will open new opportunities. he was right about one thing. it created new wealth and new opportunities, all of them at the top. but show me the jobs, mr. president. show me the new opportunities for middle-class families. show me what it did to keep our economy on track and protect hardworking families from losing their homes in mortgage schemes and hedge fund gambles that stole the wealth of middle-class families, taking us to the brink of economic ruin. let's look at the simple facts about the bush tax cuts ten years later. the top .1% of american wage earners, those earning more than $3 million a year, received an average tax cut of $520,000 each, far more than most american families dream of making. a tax cut more than 450 times larger than the meager tax cut of an average middle-class wage
earner. those earning over $3 million benefited from lower tax rates on capital gains, lower tax rates on dividends, lower margin rates on the top two tax brackets. from 2002 to 2007 the top 1% of wage earns enjoyed 65% of the total income gains during that five-year period. and in those five years, nothing trickled down. in fact, real hourly earnings fell by almost 2% for men on the bottom, 10% of wage earners. it fell .5% for men in the middle of the 50th percentile. but it increased almost 3% for men in the top 10%. nothing trickled down. if the bush tax cuts were designed as a stimulus, they failed again. moody's has said that making the cuts permanent would generate only 35 cents in economic activity for every $1 they cost. under the american recovery act, the pay back would be $1.17 for
every $1 of the making work pay credit and $1.38 for the child tax credit. clearly the stimulus effect of the bush cuts was not a stimulus at aufplt as far as the debt is concerned, from 2001 to 2010, the cuts added $2.6 trillion to the debt, 50% of the total accrued during that ten-year period. the fact is the bush cuts averaged out to lower revenue levels as a share of the economy than any previous decade since the 1950's, even as we have america's sons and daughters and two wars raging abroad unpaid for. and the extension of the cuts in the december tax bills projected to decrease revenues by $423 billion, from 2012 to 2021, making the total cost more than $5 trillion over the next decade. and yet republicans will not put any of that $5 trillion on the table, not even the tax cuts for
millionaires. but they'll happily end medicare as we know it and kick poor seniors out of their nursing homes. this is something we cannot let happen. so, mr. president, as i said before on the floor of the senate, in their ideological haez, they seem to have lost sight of the real people whose lives would be affected by the choices we make. a republican vision of america is about the bottom line. it seems to me that they failed to realize that budgets are not just about numbers, budgets are about people, their hopes, their dreams, their expectations for a better life for themselves and thinker children. -- and their children. they are the about the promise of this country and the dream we have come to expect, the vision we have of safe, clean, vibrant communities in which to raise our families. budgets are a reflection of our values, not a faceless calculation of pluses and minuses just to reach an
arbitrary number regardless of the impact of middle-class families looking to get back to work and pay the bills. all of us have a budget, mr. president. maybe it's not a formal budget but we all have one. on the revenue side we have what we earn from gainful employment, interest on savings. obts flip side -- on the flip side we have our expenses, mortgage payments, groceries, utilities. we have donations to a favorite charity, a worthy cause. these are expressions of our personal values, just as the nation's budget is an expression of our collective values. we may not always think of the budget in those terms, but we should. it's about our values. the bush tax cuts enacted a decade ago are antithetical to the values that we as a people and nation have. middle-class families and seniors should not be left to pay the tab for a decade of lavish tax cuts that did nothing but make millionaires richer. those tax breaks helped to us get into this mess, and they certainly should be on the table
to help us get out of it. if we do that, mr. president, then we have the wherewithal to do what we did once again under president clinton: balance the budget for the first time in a generation, create record surpluses, low unemployment, low interest rates, low inflation and the greatest peacetime economy in over a generation. those are the choices that are before the senate and the country, and i hope we can get our colleagues to understand the right choice on behalf of the nation's progress and prosperity. with that, mr. president, i yield the floor. a senator: mr. president? the presiding officer: the senator from minnesota. mr. franken: mr. president, i rise today to express my strong opposition to the amendment offered by my colleague from oklahoma which we will be voting on tomorrow. before i talk about the substance of the amendment, i want to comment on the procedure
through which it was offered. there was no warning to senate leadership or to any of our colleagues, and while technically it wasn't in violation of senate rules, it undermines the basic comity that makes this body work. it's a disservice to do business this way, to our colleagues, to bipartisanship and to the american people who sent us to washington to get things done by working together, so i'm disappointed in the way this was handled. now, let me talk about the amendment itself. today, families in minnesota and around the country are paying painfully high prices at the pump as oil still hovers around around $100 a barrel. what this amendment does is cut the legs out from under the most viable alternative to foreign oil that we have. despite decade after decade of
rhetoric about weaning our country off of foreign oil, we're still dependent on it, and while about a third of our oil imports come from canada and mexico, close to half come from the persian gulf, africa or venezuela. last year at this time, we were dealing with the gulf oil spill, the worst environmental catastrophe that we have ever had. that was maybe the most jarring reminder of what's been clear for decades that we have got to kick our addiction to oil, and while that's not something we can do overnight, we need to do everything in our power to transition to alternatives. well, there is no more viable alternative than biofuels. today, the industry that has been most successful in displacing oil is under attack. we're talking about an industry using home-grown american
resources in an industry that has created thousands of jobs and stopped economic development across rural america. the first generation of biofuels has paved the way for the next generation of biofuels. the first commercial scale celluloseic plant is being built in emmettsburg, iowa, where they will be making ethanol from corn cobbs. according to a recent study done by researchers at iowa state university and the university of b.w.i.-madison, the growth in ethanol production reduced wholesale gas prices by an average of 89 cents per gallon in 2010, and in the midwest that number was higher, $1.37 per gallon. let me repeat that. at a time when so many american families are struggling to pay
their bills and make ends meet, they would have paid an average of 89 cents more per gallon of gas last year had we not had ethanol. but instead of giving this industry the tools that it needs to grow and reduce our oil dependence even more, this amendment hangs the ethanol industry out to dry. it makes no sense. now, i share my colleague from oklahoma's concern about the deficit and our national debt. to cut our deficit, everyone in america will have to make some sacrifices, and that includes the ethanol industry. the easy part here is that the ethanol industry agrees. ethanol producers stand ready to phase out the ethanol blenders credit, but we need to be consistent. if the ethanol industry is being asked to make some sacrifices, other fuel industries need to be
willing to do the same, yet just a month ago, many of my colleagues, including my colleague from oklahoma voted against repealing billions of dollars in subsidies that we pay every year to the biggest five oil companies. we're talking about oil companies that have made almost almost $1 trillion in profit over the last decade. my colleagues chose to leave that -- those tax breaks in place, amounting to $21 billion in taxpayer dollars to oil companies over the next ten years. and expert after expert has basically concluded that these subsidies are not lowering the cost of gas and would not cause it to increase if they were eliminated. but you don't need experts to tell you that.
subsidies for oil and gas are on the books right now, and some have been on the books since as far back as 1916, but they have done nothing to stem the skyrocketing gas prices that are squeezing the budgets of american families. yet when we're talking about ethanol, a home-grown alternative to foreign oil that lowers prices at the pump, my colleagues seem to think it is absolutely imperative to repeal this tax credit now. so when it's repealing subsidies for oil and gas companies operating in oil-producing states like oklahoma, that's somehow a tax hike, but cutting a tax credit that supports an american renewable fuel, well, that's fiscal responsibility. the hypocrisy here is just stunning. regardless, america's ethanol
producers are ready and willing to phase out this credit, but there is a right way and a wrong way to do it. the coburn amendment which abruptly ends the credit at the end of this month is the wrong way. the right way is to responsibly phase out the tax credit in a manner that allows the industry to build out the infrastructure it needs to bring advanced biofuels into the u.s. market. today, my colleagues and i are introducing legislation that does it the right way and i urge every member of this body to support it. right now, our biofuels industry is hitting a wall because of the national 10% ethanol blend limit we have had on the books. it also is hamstrung by the inability of most cars and gas pumps to use blends higher than 10% ethanol.
that means that celluloseic ethanol and other biofuels have no market access or market to grow into. this isn't an industry problem, it's a public policy program. the e.p.a.'s e-15 waiver was a step in the right direction to address this very problem, but without pumps that can blend higher ethanol blends, american consumers have no way to access additional ethanol that would and should be on the market. what our legislation does is reform our ethanol tax policy by ending the ethanol tax credit in its current form at the end of the month. it then invests part of the savings into biofuels infrastructure, part toward extending the cellulosic ethanol credit and puts $1 billion toward reducing our deficit.
reducing america's dependence on oil is going to require a national strategy and biofuels are just one part of that strategy. we also need to do things like deploy more electric vehicles and make our entire economy more energy efficient, but we have to recognize that if we don't fix our national policies to allow the biofuels industry to grow, we're actively choosing foreign oil and dirty fossil fuels over domestic home-grown renewable fuels. because let me tell you something, you're never going to see a massive, massive ethanol oil spill in the gulf of mexico that kills 11 workers, destroys thousands and thousands of livelihoods and does irreparable harm to vital ecosystems.
you're never going to see foreign countries collude to restrict the supply of ethanol and drive up gas prices for american families. and as we transition to advanced biofuels and expand this industry, you're not going to see these jobs go overseas. this is an american industry, it's american jobs and it's american energy independence. i urge my colleagues to make the responsible choice, one that will keep this industry moving forward. thank you, mr. president, and i yield the floor. a senator: mr. president? the presiding officer: the senator from minnesota. ms. klobuchar: i'm here with the senator from south dakota -- i first want to thank my colleague from minnesota for his strong words. i'm here with the senator from south dakota, senator thune, to talk about the legislation that
we are introducing today along with several other senators to find a good way to handle this, not the way this has been handled. my colleague from minnesota talked about senator coburn's amendment that we will be voting on tomorrow. i urge my colleagues to oppose this amendment. i believe that, first of all, we need to invest in home-grown energy and that this amendment would abruptly eliminate the veetc, the volumetric ethanol excise tax credit, immediately without any kind of a glide path during this year, so that the people who are directly or indirectly employed in this industry, 450,000 people, when you think about all of the jobs that we work on every single day, just because jobs are in states that maybe some people don't live in, north dakota, south dakota, minnesota, iowa, these are very important jobs throughout the country. and the other piece of this that i think we can't neglect is the
effect that this would have on gas prices. that being said, both senator thune and i understand that this is a situation that needs to change. we're in a difficult budget situation in the senate and that's why we're introducing legislation today and working with stakeholders and members from both sides of the aisle to find a reasonable solution that offers a responsible and cost-effective approach to reforming our biofuel policy. this bill would transition to a more sustainable model of support for renewable fuel production in america instead of pulling the rug out from under an industry with four days' notice that employs hundreds of thousands of people in this country, and also provides an alternative to oil. and i think that senator thune is here and maybe he would like to address this a bit, we'll go back and forth, but i think one thing that people need to understand is that this biofuel industry has become a major component of our fuel supply.
one statistic is that the gasoline that is made from the oil that we import from canada, people know that's our biggest trading partner from oil, we literally produce as much biofuels as we produce gas from the oil that we import from canada, so it is a major part of our fuel supply and something that you shouldn't just decide with four days' notice to change the rules of the game when, in fact, as a recent vote showed us, oil is keeping every single cent of their subsidy. and senator thune and i have a bill which basically gives away the subsidies for the rest of the year that the biofuels industry has and puts $1 billion toward deficit reduction, reduction, $1 billion toward deficit reduction, as well as making some investment with the remaining money in the infrastructure that this industry needs to be able to compete on any kind of an even playing field with oil. so i know senator thune has some thoughts on this as well and i would like to come back and talk
a little bit about what's been going on with oil versus ethanol in this country, but i think it's important to understand that the bill that we're introducing today could be a major help, $1 billion into deficit reduction. mr. thune: mr. president, if i might just say to my colleague from minnesota that i appreciate her good work and advocacy on this. this is something that we have been working on for some time along with some of our colleagues on both sides of the aisle, for a lot of reasons, and one of which, of course, is the the -- as the senator from minnesota mentioned, these are difficult fiscal times. obviously, every area in our budget needs to be reviewed and scrutinized and looked at to see where we might be able to achieve some savings. but as my colleague noted, there is a right way and a wrong way to do this. the way that has been proposed in an amendment that was filed on which the cloture vote will occur tomorrow is the wrong way.
you cannot tell an industry in december that we're going to give you a set of policies that are going to be in effect for the year. you're going to be able to make investment decisions. you're going to be able to go to your lenders, you're going to be able to go and get financing, secure financing based upon this set of policies. we do that around here all the time. we make policy. we try to do it in a way, hopefully, that gives those that are investing their dollars some certainty about what those policies are going to be. well, how can you then in the middle of the year come back and say, we're just going come back and pull the rug out from under you? i'm sorry, this is gone. well, frankly, there's a much better way to go about doing this and what the senator from minnesota and i have proposed does just that. and in my view, it does this in a responsible, measured, thoughtful, reasonable way, gets to the same ultimate result, which is for those who are
really interested in doing away with the volumetric excise tax credit it does phase it out, but it does it in a way that doesn't create disruption and harm and allows people to plan for the future. and it also invests so some of those resources in areas that are really important to the future that have industry; namely, blender pumps, which is the one thing that doesn't exist out there today -- at least not in any great numbers. and if those pumps were more available, you would think, i believe, a lot higher usage of the fuel than we already have seen but we already know it is 10% of our fuel supply. now, whether the opponents of this like it or not -- and i know they don't -- there are 13 billion gallons of ethanol produced in this country, at least that's what it was in 2010, we assume i it'll be that number, maybe higher, this year. that displaces 445 million barrels of imported crude oil -- 445 million barrels of imported
crude oil, mr. president. that is 55 million barrels more than the total crude oil imports from saudi arabia last year. now think about that. a fuel -- a fuel that's produced from a kernel of corn now displaces more than the entire import of saudi foreign oil into this country. that is what we ought to be looking at. we ought to be looking at more ways to raise -- to produce domestic energy, homegrown energy, adding that to our fuel supply rather than taking it out. and what the amendment that our colleagues are trying to get a vote on tomorrow would do is basically to say to this industry, yes, we're going to take away this particular tax incentive and we're going to do it right in the middle of the year. we're going to do it and we don't like this descrirks which i think is probably what an maillots a lot of -- an matters a lot of the opposition to this.
because when people look at the contribution that biofuels has made to our fuel supply in this country, it is significant. 10% of our fuels are biofuels. if you look at the other by-product of biofuels, once you take the stamp oust that kernel of corn and convert it into liquid form, you can get for every bushel of corn almost three gallons of ethanol, but you also get dried distiller's grain, which is something that has been used extensio extensivw for feed, for livestock. so if you take 5 billion bushels of corn that are used for ethanol in any given year, the equivalent is 1.7 billion barrels of corn that is returned to the livestock food chain as theght million to by-product called dried distiller's grain. so you are adding additional profeign that is fed to livestock in addition to the three gallons -- or almost three
gallons of eth nominee that you get from every single bushel of corn. so, mr. president, i do believe that there is an approach here that makes sense. and what the senator from minnesota and i and many of our colleagues on both sides have come together around is a way in which we can move forward, do it in a twhai not only makes it reasonable for the industry to plan for the future, but also in a way that returns dollars to the treasury of this country because there is a $1 billion for debt retirement. and i think that's something that the industry recognizes, we all recognize we need to address and it is addressed as part of this bill. so i appreciate the good work of the senator from minnesota in working with me and along with other colleagues of ours to introduce the bill that we introduce today. ms. klobuchar: mr. president? if i could continue, i thank senator thune for his work and one point i think he made that
is inyeb incredibly important, t think all of our colleagues understand that this vtec that has been in place to make sure we have an alternative to oil in this country ends at the end of this year. the one piece of it that continues for another year is the cellulosic research, the cellulosic credit, but the rest of it ends at the end of this year. so instead of looking at a glued path, as suggested in our bill, where you could take $1 billion, put it into deficit reduction, take another $1 billion or so and put that which would be going right now as a credit, put that into the infrastructure, the alternative here that's suggested by our colleague from oklahoma's amendment is just to cut it off today basically, with a few days' notice. what i've heard time and time again from businesses, whether in the energy or medical device area, they want certainty. they don't want washington
coming in with one day's notice and changing things. so that's why the bill i asked my colleagues to look at this bill as an alternative. we're glad to discuss details with thevment one of the things we tried to do with this bill to acknowledge the emerging field of cellulosic with algae and other forms of research into biofuels, that that would continue into next year, but basically this would end vtec as you know it the proposal that senator thune and i have put forward. and you look at the comparisons here, over the last few decades, more than $360 billion worth of disibs have gone to oil companies. that is nearly 10 times greater than the investments we've made in homegrown biofuels. they are saipt in a dinner way -- they're set up in a different way but those are the numbers. the jobs with biofuels are jobs made in america. we're basically investing in the farmers of the midwest instead of the oil cartels of the mideast. i'm not just a one-size fuel
person but i think to disrupt an industry like this with no notice is just the wrong way to go, and i hope that our colleagues will look at our bill seriously, talking to us about this, think about how the gas prices, which have now topped $3.75 per gallon, while they're high now, you look at fact -- "the chicago tribune" looked at the fact that if we cease to produce the gallons of ethanol we produce every year it would drive up prizes at the pump as much as $1.40 a gallon. i don't think that's something we can afford right now. so we have put together a good-faith proposal that basically for even those that have a lot of questions about biofuels right now, about ethanol, will have to admit is a dramatic change. it ends v tevment c as we know it, it puts in a big chunk of change, $1 billion that otherwise would be going to the subsidies this year toward deficit reduction, while still allowing for the infrastructure investment and then looking into next year for just some of the
key pieces but severely changing any kind of subsidy for this industry. so with that, i want to thank senator thune. i don't know if you have something -- i think our time is ending here -- that you'd like to add. mr. thune: if i might add one point here, and i think it's -- the senator from minnesota did point out that there are a significant number of jobs that are associated with this industry. in fact, half a million jobs. they're american jobs. they're jobs in the heartland of this country. they're jobs that help grow the economy, make it more prosperous. and it strikes me at least that what we ought to be looking at is more jobs in this country, less investment in foreign regimes from where we get a lot of our energy today, $1 billion a day is what we send outside of the united states because of our adisiks to foreign oil. we've dangerous dependence upon foreign energy and we have a fuel that, as i said, displaces
445 million barrels of oil every single year, more than we import from saudi arabia. that is a pretty remarkable number when you think about it. we had a debate here a few weeks ago on the floor of the senate about whether or not we ought to change tax policy with regard to oil companies. and the decision was reached that we shouldn't do that. that it would be punitive, directed the oil companies. we decided, too that it would raise taxes on gas for people in this country. i would make the same argument here today, mr. president. you are talking about a tax increase, a large tax increase, which you know is going to get passed on. so you are talking about raising taxes on consumers at a time when we can least afford t we have today $3.50, $4 a gallon gasoline. the last thing that consumers in this country need is something that would actually push that gas price higher. in fact, if you did away with biofuels altogether, which some people would like to do, there is a study out in last year in
2010 that said the price% gallon of gasoline would go up by 89 cents a gallon. so you've got a proposal here that would have an adverse impact on energy prices, fuel prices for people in this country, which frankly again, because of the commitment that was made last december, strikes at the very heart of economic certainty, which so many of us come down here and talk about the importance of having policies in place that are reliable, that people who are investing in particular areas of our economy can know are going to be there at least when congress makes a commitment. this completely undermines the commitment are that congress made back in december that this particular tax credit would be in place until the end of the year. so what the senator from minnesota and i have done, have proposed a path forward that we believe makes sense and that is a thoughtful, measured, reasonable, responsible way in which to get to the goal that many of the proponents of the
amendment that will be voted on tomorrow want to get to, and that is to phase down the volumetric ethanol excise tax credit but it does it in a twhai makes sense for the american consumer, for those who have investments in the industry today. so, mr. president, i hope that my colleagues will take a look at that legislation and we would like to see t we think we can get that moving this year. and it does, as was noted by my colleague from minnesota, put a significant amount toward reducing the debt, which i think is something that you will of our colleagues are -- that all of our completion are very, very interested in doing. we will present that to our colleagues and hope there are many who will dhoos support it. i would yield the floor and yield back to the senator from minnesota. ms. klobuchar: thank you, mr. president. i yield the floor as well. we hope that our colleagues will look at this bill. it is a serious bill and very different than other bills that have been proposed in the past in that it actually takes existing money that was set out at the end of this year and puts
a big number -- peds 1 billion -- into debt redufntle thank you. mr. coburn: mr. president? the presiding officer: the senator from oklahoma. mr. coburn: thank you. i have had a good time listening to the debate on the amendment i filed and visiting with senators. i think there is an important distinction that needs to be made in the arguments that have been brought forward. the first is we have a mandated level of ethanol that has to be produced and blended into gasoline, and it grows from now on. there will be zero job losses if this amendment is improved. the second thing is my colleague, and i love him to death, from south dakota says we're going to save $1 billion. we can save $3 billion. if we eliminate the vtec blending subsidy. now, why should we do that?
here's a subsidy that goes to all the blenders of gasoline in the united states, all of them, and they all have called and written and said, we don't want the $3 billion for the rest of the year. we don't want it. we actually have a letter here from the national petrochemical and refiners association, which they're all members of, saying we don't want this money. so the best way to get money against the deficit is to not give money to people who don't want it on something that's already mandated anyway. i spent a great deal of time listening to my colleague from iowa, senator grassley, and his figures were very good. but they were only up through 2008. according to the united states department of agriculture, 40% of last year's corn crop was utilized -- converted to ethanol. now, why would the american
bankers association, the american frozen food institute, the american meat institute, california dairies, the grocery manufacturers association, the international dairy foods association, the milk producers council, the national chicken council, the national council of chain restaurants, the national meat association, the national restaurant association, the national turkey federation, the national wildlife federation, which is expwrus a third of people who are endorsing this, why would they be for this? because it's not just less than 3% the cost of food. it has been -- this last year -- the significant driver. corn prices are at $7.65 a bushel. they are two and a half times what they were three and a half years. i'm not against the farmer and i am for ethanol. i don't want to do away with ethanol blending.
i don't want to do away with ethanol as an substitute. but we have a way to get same amount of ethanol produced and put into our cars without spingdz $3 billion between now and the end of the year or $5.8 billion is what it's averaged over the last few years. we spent $34 billion of money we didn't have subsidizing something that's mandated. i mean, it even goes beyond the reagan quote, which is a government view of the economy could be summed up in a few short phrases. if it keeps moving, tax it. if it stops moving, subsidize it. we have the incentive to blend in ethanol. that by insentive is you by law have to blend it. they don't have a choice. so we're going to use ethanol in this country. now, another factor that the american people ought to take into consideration, when you go buy a gallon of fuel today, you
already have $1.72 worth of subsidy in there, and that doesn't have anything to do with oil and gas drilling. that has to do with the subsidies that go through all these programs for ethanol. and i'm for using cellulosic. i'm actually for using corn ethanol. i just don't think we ought to pay twice for it. i think we ought to pay once. the number that the senator from minnesota talked about in terms of subsidies, there are -- i have worked on the president's commission on debt, i have worked with the gang of six. you can't be for changing the tax code to get rid of tax expenditures and vote against this amendment. i mean, how do you explain -- here's one that we don't need the incentive for and we're going to pay for and yet you want to say you want to solve the problems of the country, but the first time we have a vote to really eliminate one that will
make no difference in terms of the amount of ethanol that's produced in this country, it will just cave us $3 billion, you can't be on both sides of that issue. let me address the oil and gas industries for a minute. they get accelerated depreciation and write-off. that's true. and that amounts to taking legitimate business expenses and saying you can write them off sooner. why did we do that? and this started in 1903, by the way. that's when we started it. we started it because it's a capital-intensive business, in terms of the exploration. it's associated with a lot of dry holes. now, the very companies that we say we want to take some of their -- quote -- "subsidies, there is a big difference between a subsidy that is a tax credit and allowing somebody advanced depreciation because they are going to get to write
it off anyway. the net effect of the federal government's revenue if you take all those away is still zero. the federal government doesn't get any additional money because under accounting standards, they get to write off those expenses anyway. they just don't get to write them off as fast. so the body has already chosen to not do that because they are a -- because there are legitimate business expenses. we are not saying take away legitimate business expenses from the ethanol distilleries or the blenders. we're just saying don't pay them money for something they are going to have to do anyhow that they have already said to us they don't want. and tomorrow during the debate on this, i will add to the record the statement from the national petrochemical and refiners association. the other point i would make, there is no question we're not energy independent, and there is no question that biofuels and
cellulosic ethanol can contribute to what our results can be in terms of maintaining that independence. but we're the only nation in the world where we as citizens own more oil and gas than canada, china and saudi arabia combined and our government won't let us have it. now, think about that for a minute. according to the congressional research service, there is more oil, gas and gas liquids on tap in the united states than is known in all of canada, all of china and all of saudi arabia combined. so the reason we're in trouble and importing oil is because our own government won't let us have our own resources. why would we continue that? that's a debate for another time
no matter what we believe in terms of green energy, what we do know is that we're 30 years away from getting away from carbon-based fuels at the earliest. and so we can either pay a price or we can buy from the saudis or buy from other marino countries or we can develop our own. and you talk about jobs, the estimate is if we would truly go after our own energy, we would generate over 100,000 jobs a year the next ten years in the oil and gas industry in this country. cleanly. the other comment i've heard is that this amendment wasn't brought up properly. let me talk about something for a minute. when the senator from south
dakota and myself came to the senate, the first two years, you could offer an amendment on anything on any bill at any time. because that's the way the senate was intended to operate. that you had as a senator, a member of this body, you had the right to offer an amendment. now, you may lose it or you may get tabled, but you had the right to offer it. that's not a majority's prerogative. that's the prerogative of any individual senator that you ought to cherish and protect. because if the majority leader is the only one that can decide when amendments -- what amendments get offered and when they get offered, this is no longer the u.s. senate. it's no longer an ability to offer what is in the best interests of our country or our constituents. and the very fact that we don't want to have amendments, controversial amendments that we have much disagreement on coming to the floor because we don't want to have to go home and
defend it or we don't want to vote on it because we might lose it, the senate ought to be a free place to offer ideas and get them voted down. in my first two years of the senate, i had tons of amendment voted down. in fact, i had every amendment voted down. there wasn't an amendment i won. but i had the freedom to offer the amendments. you know what? we passed ten times as much legislation in that congress than we have the last two. so limiting amendments is not the prerogative of the majority leader. deciding what bills come to the floor is the prerogative of the majority leader. and if we want to go home and tell our constituents that we voted against saving $3 billion, that we're going to borrow 40% of it from outside this country because we don't like the way an amendment was brought up, how else do you think up an amendment if you can in the u.s.
senate? every true and proper procedure was followed in bringing this amendment up, and had this amendment been allowed to come up, if other members hadn't objected to it, we would never have used cloture to bring an amendment up. you shouldn't have to use cloture to bring an amendment up. you should be able to bring any amendment you want upnd let senators have the courage to vote the way they want on it. rather than to say i'm going to hide behind not having to vote, so i'm going to object to having to vote on an amendment. if we start down that process, we're never going to have any amendments and every amendment is going to end up having to have 60 votes just to be brought up. because if we're going to move to that procedure -- and i know procedure in this body pretty well -- then i will insist that we do it all the time. that will dead stop the senate. so the idea that you can hide behind the excuse that even though you want to save the the $3 billion but you don't
like the way the amendment was brought up is a pretty flimsy excuse to go home and explain to your public that you think we shouldn't ever have cloture motions on amendments. we ought to be able to bring any amendment up at any time. and i see the majority leader coming to the floor. he's a dear friend of mine. he has the hardest job in washington. there is no question. but the privilege to bring an amendment to the floor ought to be protected for both sides of the aisle, and you vote it down, you table it, but you do something with it. let me -- let me just finish by saying i agree this is supposed to expire at the end of this year. i hope it does because we don't need it. our corn farmers don't need it. the worldwide demand for corn is high. we're going to continue to
produce ethanol. we have a federally mandated requirement that we produce ethanol. this amendment doesn't touch that, never intended to touch that. but ethanol as a fuel should be processed to the next stage which is methanol, because methanol is not water soluble and it has the same octane rating as gasoline. ethanol is not a great fuel. it's not an economical fuel, but we can take that same carbon atom and add to it and create methanol from corn and get a much better fuel that can be transported much easier and have a much greater effect on our economy and have much better gas mileage and less effect on the engines and drive trains and all the other smog prevention that we have on automobiles today.
so let me say it again. i'm not against using biocrops. i'm for biocrops. i'm not against cellulosic ethanol, i'm not against ethanol, i'm not against algae. but exxonmobil has spent a couple billion of their own money on algae-based biofuels without the government's help, which is one of the points of this amendment. we no longer need to help. we no longer need to spend this money. so as we debate tomorrow, i look forward to the debate. i will be on the floor all day to answer questions and to debate the pros and cons of this amendment, and i thank the senate for the time and i yield the floor. the presiding officer: the majority leader. mr. reid: i ask unanimous consent the senate proceed to s. res. 207. the presiding officer: the clerk will report. the clerk: s. res. 207, supporting national men's health week. the presiding officer: without objection, the senate will proceed to the measure. mr. reid: thank you,
mr. president. i ask unanimous consent the resolution be agreed to, the preamble be agreed to and the motion to reconsider be laid on the table. the presiding officer: without objection. mr. reid: i ask unanimous consent that on tuesday, june 14, following the 2:15 cloture vote on the coburn amendment number 436 as modified, senator up to 20 minue purpose of giving his maiden speech in the senate. the presiding officer: without objection. mr. reid: i ask unanimous consent that the appointment at the desk appear separately in the record as if made by the chair. the presiding officer: without objection. reid: mr. president,k consent that when the senate completes its business today, it adjourn until 10:00 a.m. on tuesday, june 14, following the prayer and pledge, the journal of proceedings be approved to date, the morning hour be deemed expired, the time for the two leaders be reserved for their use later in the day. following any leader remarks, the senate proceed to a period of morning business until 11:00 a.m. with senators permitted to speak for up to ten
minutes each, time equally divided and controlled between the two leaders or their designees, with the majority controlling the first half, republicans controlling the final half. following that morning business, the senate proceed to executive session under the previous order. further, that the filing deadline for second-degree amendments to the coburn amendment number 436 as modified be at 11:30 tomorrow morning. the presiding officer: without objection. mr. reid: mr. president, tomorrow at noon there will be up to two roll call votes in relation to the cecchi and salas nominations. at 2:15 p.m., there will be a roll call vote on the cloture motion that senator coburn filed on his ethanol amendment. if there is no further business before the senate, i ask that it adjourn under the previous order following the remarks of senator thune who will speak as if in debate and debate only. the presiding officer: without objection. mr. reid: i didn't realize senator coburn was here. just so we will have some rough idea, could i ask senator thune how long you wish to speak? mr. thune: 10 minutes. mr. reid: so we'll say 10
minutes. senator coburn? another 10 minutes? so that would be the order that senator coburn be recognized following the 10-minute remarks of senator thune for up to ten minutes. the presiding officer: without objection. mr. reid: for debate only, and we have already made that clear. i would note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call: quorum call: the presiding officer: the senator from south dakota.
mr. thune: i ask unanimous consent that the quorum call be dispensed with. the presiding officer: without objection. mr. thune: mr. president, i -- one of the, i think, probably the senator from oklahoma has a strongly held view about ethanol, particularly on this issue. on the vtec. but -- and i understand that. and i understand there are members here who would like to see that particular tax credit go away. i understand that. and what the senator from minnesota and i have come up with is a way for them to achieve that objective. but it does it in a way that is reasonable, that is measured, and that doesn't totally in the middle of the year abruptly disrupt an industry and all the investment that's been made. i mean, the question i would ask my colleagues, mr. president, is does our word mean anything around here? we passed this in december.
there were 81 senators -- 81 senators who voted for a package of tax extenders, one of which was the volumetric ethanol excise tax credit. 381 senators are on record. now, if you want to do away with it, there i think, lots of ways that you can do that. but the way the senator from oklahoma is proposing to do that is to say tomorrow, let's pass this and let's end it. $2.5 billion we can save the taxpayers. well, we're about $500 billion a month is about p what this thing is going to cost and every month that goes by, there's a little less available to the taxpayers. what we are saying is we've put peds 1 billion today into this proposal that would go towards debt retirement, and we phase out the tax credit to which the senator from oklahoma refers, and we take a very, i think, forward-looking, futuristic-type view toward ethanol production
in this country, biofuels production in this country. because we are -- i mean, we're going to be capped out at 15 billion gallons is what the r.f.s. -- the renewable fuels standard -- of which the senator from oklahoma referred. we're going to hit that and then we've got to get to the next generation of biofuels. i would say with all due respect to my colleague from oklahoma that methanol is not a realistic option. you would have to retool every plant in this country. we've 204 plants in america today that indirectly or directly employ 500,000 americans. those are the jobs that are impacted by that. we have had policy on the book now for nearly 30 years, which s encouraged the investment in these plants on the belief that we need to get away from foreign sources of energy, which i think should be a stated objective of all of our energy policy. i'm for oil and gassments the
reason i voted against the proposals that were leveled a couple of weeks ago that would have targeted the oil gansdz industry is because i think we need all forms of energy. we need oil and gas, we need clean coal, we need biofuels, we need nuclear, we need any form of energy that we can generate and produce here in the united states is -- i'm for it. i'm for it. and that's why i think that the future of this industry is still very bright, because i think there's -- there is an advanced biofuels future out there, a cellulosic ethanol, a next-jn reagan administration ethanol, whatever you want to call it, where we can make it from switchgrass, we can make it from blue stem grass, from corn stover, from these types of products. that future is out there but you don't get there unless you have the corn-based platform to start w now, the senator from oklahoma talked about the renewable fuel standard and talked about this being redundant public policy.
the only thing i would say is one of our colleagues from south carolina has introduced an amendment to this bill which would end that, and i assume -- i don't know this for a fact -- that my colleague from oklahoma would support that amendment. which would do away with renewable fuel standard. certainly. mr. coburn: you obviously didn't hear what i was saying as you were conversing. i said i support ethanol. i wouldn't support that. you know that my position son that. so the question is -- and i would ask him this question -- how do you fit what the people who get this $3 billion that you say it is going to have a negative impact. the very people who get the $3 billion who say they don't want it, why would they say that if it's going to snreagive impact on their -- if it's going to have a negative impact on their industry? mr. thune: i was not aware -- you said he supports ethanol. i was not aware that he supports
the r.f.s. if there is an amendment to support the r.f.s. offered, which there will be, and if my colleague from oklahoma, if i am wrong in saying that, you would oppose that amendment to strike -- mr. coburn: i will oppose that amendment. but my worry is because of the process of the senate, we may not get that amendment to vote on. and i think my colleague aas part of the leadership on my side would recognize that we have a problem with amendments. mr. thune: and i don't disagree with that. i think there is an issue here with amendments. i would say that the twhait this -- i have not argued -- it is your prerogative to bring this up, it is your prerogative to file cloture, which you have done in this sinchts the renewable fuel standard, which creates sort of the policy construct that we're talking about here today, is one aspect of the -- what we call biofuels policy going forward. but the other one historically, going back a long tiernlg the blenders' credit.
what i would tell you, because of the statement you made, is all the people that get this, all the people that get this don't want it. that's not true. the large, integrated oil companies which are also refiners and retailers of refined gasoline don't want it, maybe don't want it -- i assume that if you have a letter to that effect. but there are lots of smaller refiners who do want it. and there are also an awful lot of, you noshing the blunders' credit gets passed on to the retable, which gets passed on, hopefully, to the sciewmplet and the people in this country who are going to be impacted by this aren't just the large integrated oil companies. if you talk about them saying they don't want this, they said in hearings before congressional committees a few years ago that they didn't want the oil subsidies that they get in the tax code today. they are on the record saying that. and yet we voted to keep those in place just a few weeks ago. mr. coburn: would the senator
yield for a a question? mr. thune: yes. mr. coburn: could you deghien a subdid i is to you. we cape saying "subsidies," but we don't have any subdismiss the true oil and gas industry. what we have accelerated depreciation which even if you took away the dollars is to the federal government would not increase. so how is there a subsidy to the oil and gas industry in. mr. thune: what i would characterize -- i think you have to say when we characterize what you call tax spend chiewrks there are a whole bunch that fall into that category. i know you're familiar with that because you served on the president's debt commission. that in some way, form, or another, reduce the tax liability of various individuals and businesses around this country. now, i don't disagree. nrvetion i would work with you on a proposal that would address and look at all those types of tax expenditures. i just think it is punitive to single out one, say we're going
to kill this one, after we made a dmiment december with 81 votes in the united states senate that we're for this. i don't know how we can in good faith go to this industry which employs 500,000 americans and say, we're going to put rug out from under you after six months. but that being said, i would characterize it as anything that redices the -- reduces the tax policy. the oil depletion allowance, the intangible drilling cost are all things unique to the oil industry. mr. coburn: which would include charitable contributions? that's a subsidy? mr. thune: well, under the definition of "tax expenditure," sure. oil depletion alownsz and intangible drilling costs are characterized as subsidy purposes the same way the equity million to tax credit is. we have lots of tax credits in the tax code. weerched-income tax credit. we have lots characterized as tax spend chiewmplets i guess
what i'm saying to you you is may characterize it differently and say that's accelerated depreciation, but for purposes of description as we describe things around here, it fits into that category. my point is this clierntion the oil industry came in front of congressional committees in the past and said they didn't want those. for them to say they don't want this particular blenders' credit, i'm not sure is -- in my view certainly isn't determinative because i think the very companies that et go to blend sers credit, the large integrated oil companies also view ethanol has a threat. it is today, lick like it or not, the croal only viable alternative to oil. i am not debating about whether or not the merits of this particular policy at least in its current form shouldn't be transformed or reformed. i'm saying that we should. and i have come to you with a proposal to do that. that's not something obviously that you've greed and that's
fine. you can have -- you're entitled to not support that. but i believe that we ought to reform this and i think the way that we reform is we do it in a reasonable way that doesn't cut it off tomorrow but, rather, phases it out, and i think that the senator from oklahoma that to me that's something that is a win for him as well. he gets what he wants. the gets the phase-out mrs. you get $1 billion in debt reduction, which in this thing g's to the end of the year, we get zero, we get goose egged. this thing expires tend of the year. one thing we know with certainty is that i am putting a proposal on the table today that gets $1 billion in debt reduction, that provides some certainty at least in phasing out the vtec and also makes an insnrevment blender pumps, which is something that is very important to the future of this industry. soy think it is a reasonable way in which to deal with this issue. the senator oklahoma and i
obviously have disagreement on this subject and that's not probably going to change. but i'm offering what i think is a reasonable that gets you where you want to end up and i think also is a by that which we can keep this industry from having the rug pulled out from under them after we made a commitment to them in december of last year. mr. president, i yield the floor. mr. coburn: mr. president? the presiding officer: the senator from oklahoma. mr. coburn: let me make a couple of points. when the federal government writes a tax credit, that means we take money from our treasury, which is empty, so therefore we bro it and we write a -- so therefore we borrow it and we write a check. when we've a -- quote -- "accelerated appreciation," what we do is allow people to pay less back in. a big difference. how many of the ethanol refineries and blenders are not represented by this group?
about 11%. they all reside in the upper midwest. that's why there's such a wree ssistance to it. when i met with the representatives of the ethanol descrirks the reason they don't want the credit to go away is because they are afraid they won't be ail to drive as hard of a bargain with the large blenders of gasoline. that they'll actually be able to determine what their grind cost is, what their true cost is. the difference between what the senator from minnesota and the senator from south dakota offer is $2 billion. that's the only difference p. there is to phase it all out and spends 1 billion on pumps and infrastructure, money we don't have, and mine is to say, quit doing it because we're going to blend the ethanol anyway. that's the only difference in the two programs.
one continues to subsidize noneconomic blenders, obviously, because they want it. that's a very small portion. but the vast majority of people who are producing ethanol-blended gasoline -- how did it ever get to the point in our country where the federal government is going to tell you that you have to buy a gasoline that's only 65% as efficient as the gasoline you were buying? and,oh, by the way, because it is only 65% efficient, it actually pollutes more? that's why in this list of people supporting this are all the environmental groups because they know it is bad policy. and the reason i support and mandated the level of ethanol is until we have a cogent drilling policy in this country that says we're going to actually utilize our own resources, then we ought to -- we need to keep ethanol. but what really ought to happen is we ought to let markets
determine -- we'll all be better off. we'll have less government regulation, lase tax -- less tax code expenditures and the markets will determine what the most efficient product is by what people will buy. what people will buy what they want to buy. it's called freedom. and we've got ourselves in this mix where we -- actually what people don't realize is we're down to only 47% of our oil coming into this country is coming from outside now. we've moved from 62% down to 47%. and the reason is because the oil and gas industry has actually gone out there and find an environmentally smart way to produce tons of gassily quids, which are easier to gheert fuels, than anything. easier than oil, easier than any other product that we have. so the senator didn't really answer why the people who are getting the money don't want it
and yet we should continue sending it to them. i mean be, ask yourself the question. we're broke. we're going to run a $1.4 or $1.5 or $1.6 trillion deficit this year and here's a way to save $3 trillion. and the people we're going to send the money to and borrow the money to be a i believe to send it to them -- to be able to send it to them don't want it. but yet they can't answer why they don't want it. this represents 97% of all of it in the country. they don't want the money. we're going to sit here as a body and continue to send them money they don't want? go home and explain that to your constituents. which child are we going to take the opportunity away because we don't have the courage to do the smart thing? we have a mandate. they have to blend it. they're making a ton of money. one final point and i will let the senate staff go home. every time you go to buy a
gallon of gasoline today, the price you pay at the pump is not the price you pay. if you look at all the subsidies that go into ethanol, when you go look at that $3.75 or that $4 around here -- $3.50 in oklahoma and colorado -- add $1.72 per gallon to it because that's what you really paid in terms of the government support for the ethanol program in terms of subsidies, $1.72 a gallon. so you buy it for $3.50, add add $1.72. you're paying $5.22 a gallon for it. you just don't know that we have picked your pocket through the government expenditures out of your taxes that you have paid, we're paying $1.72 per gallon. it makes no sense. what this does is eliminate 45 cents of that. it doesn't take away all the grants and loans and low interest loans.
the other thing that people don't recognize is most of the ethanol plants, even with this subsidy, have been bought out because they weren't economical because they didn't know how to run them. that's why most of them ended up with the large companies because they didn't know how to run, they weren't efficient. and now that they are profitable even without the blender's credit. so it's a simple question. do we save $3 billion or save $1 billion? i would tell you that what's in front of us as a nation with our our $14.3 trillion debt, i'm going to opt for the kids that follow us and the grandkids, i'm going for the the $3 trillion -- $3 billion, not the one, and with that, i yield the floor. the presiding officer: the senate stands adjourned until senate stands adjourned until
>> the fda's deputy commissioner for food, michael taylor, says the e. koaly breakout in europe does not pose a significant threat to the u.s.. he made those threats on the food safety modernization that president obama signed into law in january. mr. taylor's in the position to oversee all the agency's food and nutrition programs. this is about an hour. [inaudible conversations] [inaudible conversations] >> good morning, ladies and gentlemen. welcome to washington. i'm robert mathias, the president here, and i want to
welcome you to the exchange. this is one of a series of gathering we do here where we pick topical subjects and bring in experts and invite representatives of the washington community in this hear them, and today is no exception. to get going, i want to introduce brandon daly who will announce our speaker today. >> thank you, rob. good morning, as rob said, this is our oval exchange series, and we're honored that michael taylor is here this morning, deputy at the goods and fda and named that in january 2010. he's the first person to have this position actually. he's leading efforts on food safety to implement the new legislation which i'm sure he'll talk about and we want to hear about today to ensure food labels have clear and accurate information on nutrition. he's a nationally recognized food expert and served in the
fda and the u.s. department of agriculture. the deputy commissioner speaking today during a newsworthy period for food safety. for one thing, he's in the process of appointing the food safety act that we think is very significant and will go a long way in improving food safety in the united states, but we have funding issues why congress to work out, and of course, the e. coli outbreak in europe. that's something unfortunately that's going to happen there, has happened here, and he'll talk about that as well. the format is simple speaking for 20 minutes and then opening it up to questions. please identify yourself and where you're from, and with that, we'll take it from there and introduce michael taylor. thank you. [applause] >> thank ogilvy glad to be here for the chance to talk to the
interesting diverse folks you pulled together. this is a lecture series. i stopped giving lectures when i left gw. they are not well-received in my current position. i want to talk about what's going on in food safety for a few minutes and really do want to talk about the most important ideas in the new food safety modernization act that was mentioned, and we're working hard to implement, but it is, i think, really important we relate that what law is about with what's going on in europe. once again we have a very large, really tragic outborn of food -- outbreak of foodborne illness and many sick with disease and have impacts that will be life changing for them for the rest of their lives for hundreds of people. there's huge economic impact across the european ag economy, and we have to figure out what
is the cause of this and all the uncertainty that inevitably surrounds the outbreak and it has negative effects on the food economy and on the public health and on individuals in europe, and so there's a lot of people working hard to respond to this, to discover the cause, to contain it, react to this problem, and i think we all know there's no silver bullets to eliminating these problems, and we'll always to some extent be reacting, but the lesson that we've learned over the last decade or so in this country is that ultimately it's a losing proposition to put all our eggs in the basket of reacting to the problems. we have to take a prevention approach. we have to harness the knowledge we've got, do the things we know we can do to reduce the likelihood of these events happening in the future, and that's really what the food
safety modernization act is all about. there's no maimingic bullet solutions, the fact is that over the last couple decades, the industry itself, the food industry itself, has learned about systematic approaches to understanding the hazards that come into food processing operations, put controls in place, monitor that the controls are working, have ways to correct problems quickly when they do occur, systematic approaches with preventative controls on food safety that we know reduces the likelihood significantly that food will be contaminated and that people will get sick, and what the food safety modernization act recognizes is really consensus now. you know, within the food industry, the consumer and public health community, the expert community, that this approach to prevention pie pioneered by the food industry itself can really work to make food safer and meet the expectations that the public has. the public is not satisfied when
what we do is react, and frankly, this country, we're getting better and better to reacting to problems. the systems are important. we'll keep working to do better, but the public expects us to do what we can, everything we can to prevent these problems, and that's really the mandate that the food safety modernization act passed by congress in january has given to not just the food and drug administration, but to the food system, you know, to the industry. as i'll discuss in a few minutes, to our state own local partners, our foreign partners, congress really recognized that food safety is a system problem and requires a system solution. we're very grateful congress passed the legislation and given us this significant workload, i'll have to admit. i'll talk about the challenges we face from a resource stand point, but there's really four important ideas that are embodied in this law, and this will be the lecture part of the conversation, but just to be sure that, you know, you have a
sense of the, what this law is really all about in its approach to prevention. first of all, it mandates that fda set prevention oriented standards, what it is that needs to happen broadly speaking, the prevention approaches that need to be taken throughout the farm to table food production system. for the first time, we have a mandate that sets standards for growing practices to reduce the likelihood of con contamination. food processing, feed manufacturing facilities, again, a mandate to establish regulations that would spell out the framework for preventative control in those facilities. again, drawing on what industries learned, but ensuring that's a standard of care and ensures all commodities and processes, not just the ones providing leadership today. we have many standards for safe
transport, a farm to table approach. we have to have standards to -- whether it's a biobacteria level or anything in the system, the first big theme of the law is very large mandate from congress for fda to establish regulations, provide guidance to support the regulations and explain to industry what's the standard of care for prevention. that's the first basic idea. the second basic idea, of course, is that we've got to go beyond regulations on the book and guidance in the book and guidance we would give to industry. we need high rates of compliance with these standards. food gets safety not just by the books, but by the standard of care, what's appropriate in a science-based way to be preventative every day when food is being grown and processed and transported. those standards have to be met every day, and congress has said
at fda, you have a significant role to play in ensuring high rates of compliance. the clear message is that the primary responsibility for compliance is the industry. it's industry's responsibility to have the preventive controls, see they are observed every day, fda plays an accountability role, and when that standard is not met, take appropriate action. we have a whole new inspection and compliance tool kit. we've had the authority to inspect facilities, look around and see if there's problems, and if we find problems, correct them. congress now said there's an inspection frequency mandate. you have to get into facilities on a certain frequency which, again, i think will provide a base for ensuring adequate oversight of facilities. very importantly, congress said you now have access to the records that companies are keeping so as companies have their systems in place at preventative controls, it's no
longer a matter of us going in, looking for problems, we can audit the system, check the records and see whether there's confidence of a documented system of prevention in place every day. that's an enormous enhancement of the value of inspection what we can do in facilities, and then there's strength in tools when something does go wrong. mandatory recall authority is one that gets a lot of attention. more significantly, we now have administrative enforcement tools, powers to take action to keep a potentially harmful product out of congress through our administrative action without going to court with all of the time and burden that that entailed and uncertainty about the outcome. we can administratively detain product that appears to be potentially putting people at risk, and we can suspend the regulation, the ability to be in business of companies who are producing product that again
puts people at risk. you know, a strong tool so congress las said we want the right prevention standards, stronger tools of accountability for ensuring those standards are met, and those are the core elements of how we think that this law's implementation makes food safer. the third big idea though is congress realized that we are in a global food system. the laws under which we operate and our authorities to oversee imported foods go back to 1938, preglobalization, before the current state of play in which 15% of all of the food consumed in in country is imported, 75% of the seafood is imported, 25% of vegetables and fruit imported into this country, and a large realm of other ingredients and substances we rely on in the
food supply. we've had issues with imports. everyone knows whether it's an intentional adulteration of food or the drug residues in imported sea foods, number of examples of problems we've had, and produce is associated with outbreaks. congress said we really do need to completely shift what is frankly an antiquated approach to imports that we have today where it consists of our investigators at ports of entry checking goods as they come in, and we get about 12 million entries every year of food products into this country, and we can screen as much as we'd like on computers, but -- and we actually have done a pretty good job leveraging that limited authority and targeting that border oversight, but there's no way that we can meet the prevention aspiration, and i think the public cares about it
by relying on a thin line of fda inspectors and checking 12 million entries or trying to so congress said let's create a modern, you know, system that effects globalization and takes this principle of prevention and establish is domestically and that's the standard we expect of those exporting foods from other countries into the united states and shift the burden from fda to catch the problem and place much more of the burden on the importer to provide the assurances we expect that the food they bring in are produced at standards that correspond with the standards we establish for domestic producers so there's a so-called foreign supplier verification program we're required to establish which just shifts the burden in a very positive way for consumers and establishes that clear accountability on the part of importers. there's a whole other set of tools with respect to imports. we can establish an accredited
third party certification program, for example, building on an enormous amount of work going on in the food system and the food industry of private audits where companies pay to have an audit company go in and conduct inspections and certify that a facility is operating in compliance. congress said, let's build on that, but make it something that's done under standards that fda has set in terms of qualification, the training of the inspectors, the auditors that go in, let's be sure that they don't have conflicts of interest, and let's make what they do transparent to fda so the information they generate is available to fda, and then there's another source of exec checking accountability. that is a voluntary measure, but there's circumstances under which we can mandate that third party certification under certain conditions if food is
coming from a country or conditions that present an unusually high risk. we've got a mandate under this set of provisions to work with foreign governments. that, again, is an important part of what we do. foreign governments put a lot of efforts in food safety, and the question is how to hairness their efforts and provide that level of assurance that consumers expect when food comes in here. that's leading to the fourth and final idea i want to mention, and that's partnerships. this law, i'm sure not too many of you read all 270-some pages of the law, but it's to coordinate and collaborate with federal and state agencies. we're clearly charged with collaborating with the food industry in establishes the standard of care for prevention, and to collaborate rate with foreign governments so congress really recognized that while fda
does certainly have an important and central role in the food safety system, the food safety system is not fda or what we do. it's really that vast array of public and private activities that go on every day to improve the safety of the food that we offer consumers, and so we buy into this in a big way. we know that food safety as a problem is a system problem. there's no one culprit. i was here and you can track down you're the problem or you're the problem. hazards arrive through a vast array of behaviors thought the system, and many actors need to be involved and the change that will make the food safer, we've got to work at claib ration with that network of folks. again, public sector, private sector, domestically, internationally who can crypt to a system of food safety protection that meets this goal of prevention, and so those are the four ideas. i've gotten use the to saying
them enough so is sounds like this is straightforward and simple. we know this is a huge task to implement this. in fact, we know that, and i think it's important that people understand that, again, this is not a silver bullet solution to food safety. it's about building a new system of prevention. it's about, you know, not just getting the regulations on the books which itself will take a couple, you know, years, but it's in a sense implementing there in a way that actually works in a practical level, building the new systems, particularly with respect to inspect oversight. it's a system building process that we're launching here with the implementation of the law, and we take a long-term view of it, and i will close by acknowledging the reality that this does require investment. i mean, there's no way we can build a new system of food safety protection without making investments in that system, to build the capacity that we need.
just a few examples, it's clear to those who have been working in this area. we need to invest more in science. we do need to invest in the science that permits us to understand the hairs aireds -- hazards we need to address and mine mize or eliminate the hazards. the e. coli case in europe is a good example of where food safety as a scientific manner is a big challenge. bacteria themselves change. we know that the food system changes, the way food is produced changes, the globalization,ed food supply, technologies, bad lettuce products, convenient, but changing the dynamic of the way, you know, food is prepared and moves through commerce. well, we've got to invest in the science to keep up with that dynamic changing food system,
and that's one area where, again, i think we are looking to step up our up vestment and need the resources to increase our investment in science. we've got a big training demand on our, just our staff at fda, our field force, who have been trained using a certain set of tools of inspection tools and compliance tools now given a whole new set of tools that are based upon the science-based prevention model, and instead of looking for problems and inspecting evidence to go to court, we have to train investigators to inspect systems, to understand the controls that companies are putting in place enough to assess whether the systems are working well. we have a big retraining investment that we need to make in the new inspection approaches. the industry, in many cases, has the need for technical assistance and guidance from us. there's a number of companies
implementing state of-the-art technologies right now. for a lot of companies, including some on the small end of the spectrum, there's a need for technical assistance to spell out what this new framework means, and the government has a speedometer to provide the -- responsibility to provide the assistance and implement preventative controls for their operations, but we want to up -- invest in work that supports that and make this a reality that works well to make food safer, not just regulars on the books that we inspect, but produces safe food on a consistent basis. another area of investment that's a priority for us is investing in leveraging state resources. you know, the states all have
agencies that are involved in food safety that already conduct inspections. the states and localities, of course, are the primary inspectors at retail and grocery stores and restaurants and so forth, but many states also inspect food manufacturing facilities. the state agriculture departments are interested in what goes on in produce operations. we have long had a partnership with state and local agencies and worked to, in some cases, contract with state governments to inspect for us. congress says in the law that we embrace if we systemize that and invest in capacity and build the state governments up to a common level in conducting inspections, the standards they use, how they use their labs, invest in sharing data that we generate, we can build an integrated system, and a national integrated food safety system. it's a modest investment in
state capacity. we think that can be a highly leveraged investment that will increase our ability to cover the establishments, to be preventative through implementing the provisions of the law, but also respond better when problems do a cor, and -- occur, and finally, the import system. i think it goes without saying, shifting from inspector at the port of entry to a system that reaches out globally and builds the principles of prevention all the way up to the point of production in foreign countries. that's going to require investment. we have a substantial foreign inspection mandate in this law that would take us from the current level of 600 foreign food inspections every year to doubling that every five years to get to a mandate of over 19,200 inspections in 2016. i guess the term exponential
growth fits in context, and that's the case of exponential growth. that's costly. we have to figure out how to do that and work with foreign governments. geep, you -- again, you can't do that without investment so we're -- we've been working closely with the stake holders in the food industry and consumer community and within the administration and the congress, and we'll work to get these needs met. finally, and i'll stop with this. one of the themes if you're of our implementation process is the need to reach out to the folks who help get this law passed and the food industry, the consumer community, all the folks who are implementing this law and to have really substantial dialogue with that community, and so we've had any number of public meetings and opportunities like this. we just had a large public meeting yesterday out at fda to look at the inspection and compliance aspects of the law.
we need input from the community in order to get this law done right. we're seeking a lot of input before we put proposals out for public comment. we'll seek more comment after that, but we need the engagement of the community. i'll give you our website which is www.fda.gov/ffma and that gives you the information we nude about this law, and we look forward to hearing from you and working request you. that's my lecture for this morning, and i'm delighted to be here this morning and happy to take questions on any topic. >> i'm from the association of veterinary medical colleges. you mentioned partnerships and human food problems originate with animal food problems, either the way animals are cared
for or animal seed. at the same time there's a sornlg of rural veterinarians, and i was wondering if you partner with veterinarians, and since we educate them, what would you like us to focus on? >> no, the point about the relevance of veterinary medicine and animal health and food safety is a strong point, important, and, again, congress recognizes that in writing the food safety modernization act so animal feed as much as human food is covered by the laws and preventive controls put in place, tailored for the different conditions surrounding animal feed, but more fundamentally, the health of animals, the use of drugs, and the residues they leave in meat
and milk and eggs, these are all important food safety considerations. we have, you know, regulates the animal drug products and animal feed and so forth. i was administer of the food safety and inspection service back in the mid-90s, and i was there as an odd duck. i was a lawyer with 1200 veterinarian working for me, and it took us a while to realize we were all doing the same job. people don't appreciate this, you know, veterinarians are very involved and committed to food safety and play a critical role. as far as i'm concerned, the more medical colleges prepare veterinarians to play public health roles, the better. ..
particular more abundant and present. so this is a good example of the partnership relationship that we have seeking and look forward to working with. >> fox news. to questions about the situation in germany. would you say we are back to square one and trying to identify the source and our federal authorities looking at
the possibility this may have been a deliberate act? >> we are in this country following the investigation the centers of disease prevention and their counterparts in europe which are the agencies that are doing these epidemiological investigations. the fda is following it from the standpoint of wanting to be sure the product produced in europe that might be at risk is not entering our market, so we've got our import alerts and mechanisms. we import from europe so it's not a significant problem. this investigation is not so different from many in which the in here and uncertainty in the epidemiological investigation are making it difficult for the cause to figure out what the vehicle is for this coming and i'm not going to stand here in the short characterize the investigation going on in europe. they are working hard to get to
the answer. i'd think the evidence in these matters always evolves over time and i think whenever you have an outbreak this big and get the media scrutiny and people watching blow by blow, you see plate of the uncertainty the people who do this work day in and day out investigate with these things so it's very difficult to watch. i admit it's what we do for a living, but i'm confident the folks in europe are working hard to get to the best answer as quickly as they can come in and we in the cdc offered support and we will do anything we can but the space systems in place and we are confident that they will get to the answer just as soon as they can. >> [inaudible] >> i haven't heard about that. i don't want to speculate about that. >> there's been a lot of concern in the local community about your efforts against rommel,
interstate shipments of raw milk and juice and a lot of resources in the case of an amish farmer in pennsylvania. it seems out proportioned timoney compared to say contamination of eggs from the iowa farms and so forth. can you tell me why you're putting so many resources and so much effort been given the budget constraints you have in targeting for example an amish farmer with 20 cows? >> i'm not going to comment on any particular case. i might quibble with the fact that suggestion a big chunk of our overall resources is going into the raw milk. we do respond to cases where people put at risk people can be made a seriously ill or die so again it is a very challenging issue and we all know the value that surrounds that and the traces a lot of people want to
make. when it comes to interstate commerce we have a statutory duty to implement the standards that can make milk safe. not everybody is a free choose surf when it comes to raw milk. so we feel we are doing a public health job that's a challenge that's one of those areas the conflicting values are more sensitive to that,. >> there is language in the bill to change the way -- >> eustis mic please. >> i just wanted to know if you could comment on that at all, it would be fairly big change for not only your part of the fda but the entire year fda, and
what would you see happening if this language actually makes it into law? >> public health is all about prevention. it needs to be science based prevention, so the fda in fact prides itself on being a sign in space agency that wants to use the best available science to protect people, and legislation that would require us to wait until people are hurt until we take action is counter in our view to what public health is all about. we deal with scientific uncertainty all the time, and i think if we waited until the last science was in, the public would find that unacceptable because we would be waiting until people are hurt when we have a body of evidence that says proven measures can be taken to prevent people from getting hurt. so that's the conflict, and again, we want our silence to be the best it can be but we also
recognize the inherent uncertainty and a good bit of evidence to come before that. >> [inaudible] >> what might change or [inaudible] >> kind of science i guess process being used and what are some of the worst case scenarios? >> will again is a little hard to speculate a piece of legislation written in terms that are on a familiar to us. but again, we know that certain practices in agriculture with respect to water and the quality of water where it's potentially contaminated with bacteria that can make people sick, we know that people are going to eat without any cooking is inherently a hazard. we don't have epidemiological
evidence for every single commodity that there's x number of people made ill or hurt and we shouldn't have to wait for that. we know that is a hazard and it's a hard question of how to set the standard and we want to do that in an inappropriate science base wage. but again, it's the balance between understanding to know what a proven provision the measure is and the case in which i think we should act that's different from waiting until you've got people hurt by each commodity before you apply common sense prevent engine measure to protect the food. so we can spend a lot of time parsing through the examples. but again it's a question of how you do the science based prevention that's why we are about. >> i feel like i'm not the right person to be calling on people. >> bill thompson with dow jones.
in light of what is going on in europe, are we focused on the 015787 as the primary threat in e. coli. does the fda and the usda need to work on focusing other types of bacteria? >> will again, we have to understand all of the hazards that are in food and be as preventive as it can be with all of them. there are a in the european outbreak illustrates there are a number of different strains of a very dangerous e. coli in the same broad category but deferring in various characteristics but all still capable of making people seriously ill. we need to be as comprehensive as we can be. these pathogens often though i do have common prevention strategies and opportunities that can address them, these
typically get into food because they start out in the intestines of animals and fecal matter in terms of food stream whether it is directly with water or the air or any number of ways, so if we are putting in place measures to prevent that sort of contamination we can be prevented any comprehensive week. on the other hand, when any strain of pathogenic bacteria bits and food in particular in the case of produce where the food is not going to be cooked and we need to be able to take action to remove that from commerce so from their vantage point, any pathogenic strains of bacteria we consider to be illegal and not appropriate and we can take action to remove food contaminated in those bacteria from commerce. >> i was wondering if what is going on in the produce has an
impact on the produce you guys have been working on for a couple of years and can you tell us what the status of that is? >> again, the outbreak is another example of why we need to do the rules. i think as we investigate just like we investigate other outbreaks if we can learn something about what the cause and problem is that something we need to do on a continuing basis but i think we did a good understanding of the major hazard coming into fresh produce. it is animals, it is water, it is human - gene, it is so forth and when it comes to directing us specifically to address these major that is what we are going to do. from the date of enactment deadline for the proposed rules of january 4th, 2012 is the deadline we are working hard to meet that deadline. we have a lot of deadlines in this legislation and as we said
before we will be prioritizing our work and leading the most critical deadlines as fully as we possibly can and is one of our priorities. we then have a comment period one year from the final let's do so folks are working hard and just watch this space. >> my name is becky and and with the national association. i was hoping that you could maybe expand a little bit upon what role you see the role of the local health departments? >> the county in the city health department's are critical partners of ours and your organization is as well and i'm glad that you are here. as i mentioned, and as you well know, your health officials are the front line on the retail and
from that vantage point retail is a critical part of the strategy so when the food modernization act says the attention to the capacity to understand it the capacity, come up with ways to enhance the capacity we see the state and local capacity that retail being an important part of that and so we need to part start to make sure your constituents in that capacity building. it's also the case that the law directs the fda and the cdc to work in closer ways with the partners in obra chris wants and needs sure we are doing the best possible job in to outbreaks so that's another part of capacity building but also information sharing and building systems so that we are working in an integrated way, so again i think i would consider state and local to be as much a part of the system as any in fact of the
agents in this country during food safety most of the more local. so you are in the action for sure. >> i wanted to desk about import safety so that that's one of the four pillars that you talked about coming in and wanted to know what the status of pushing out the import safety issue is particularly in china and india and the offices that way and also i wanted to ask about the resources needed, where you anticipate those coming from and where you are going to get them from. >> well, again, i think as i mentioned, there's a mandate that set up some new regulatory tools and accountability tools, verification, third-party certification and those rulemakings will happen, the regulations to get on the books the next couple of years. but you mentioned our offices in china and india, and i think
it's important for people to understand what that's about and the importance of that because the mandate to work more closely with the government partners is a very important one and something we have appreciated before the law was passed, and that's why we have the offices in china and india. these are not foreign inspections per say although the help facilitate inspections in china and india, but it is a way to build the partnership of the chinese of the agency and communicate the expectations so we can learn about what the chinese government in particular is doing on food safety and they are making a big investment in improving their system and we all know that there is a way to go, but we are eager to figure out how we can leverage some of the efforts the chinese government is undertaking. so when i see system building long term, these are the kind of
things we think are important for the long-term future of the program just globally. there's globalization and harmonization resulting the elevation of standards and the elevation of the level of efforts that's expected and is going to be had in to provide assurance and that is going to acquire not just what we do by any stretch but harnessing what players throughout the global community do and we can't afford to be duplicating effort and that's why we need to partner with the partners in the foreign governments whose work can contribute to the assurances and for those that any alliance we place is well-founded. we are certainly in that dialogue with china, and which is a major exporter here and also india and other countries. >> thanks for your remarks. there's a project on going at
the pew charitable trust, and the question is what does the agency expect from that project, or what you want to see from that project? >> so, we are working closely with pew on that. it's a product to see how fda regulates the safety of chemicals and retention added to food, cold food additives, and again, which has been the bedrock program of the fda since congress passed the food additive amendment of 1958. i'm sure you would remember that, bob. [laughter] and i think what the project is about is recognizing that the science of toxicology has devolved we are learning more and more about some of the subtle effects chemicals can have and so the need to be sure the science we are using and the industry is using to test the substances is up-to-date and actually to see the policies embedded in the current system are what they should be. it's a very complex subject and
i won't go into the details of the policy issues, but there are limitations in the current law on our ability to have as much knowledge as we would like to have about what is actually being added to food. there's some features into law at present the chemicals in the market without necessarily coming to the fda for approval. so i think there's some legitimate policies on the issues, so again, we are very supportive of what pew is doing and expect to continue collaborating. >> heuvel of rulemakings were talking about, it's going to take some time to formulate and be implemented. how concerned are you that in the interim similar european-style outbreak could have been here coming and can you talk about any cases that the fda and the cdc are tracking in canada? >> well first of all, it's inevitable that we will have future outbreaks, some of which will be significant in this
country over the next few years. i mean, this is despite the fact that there's a lot going on across the food system. in produce and processing and in terms of managing the global supply, a lot of with the food industry is doing and some of our stimulus and engagement -- there's a lot going on to improve the system, but there will be outbreaks. i think the public has to be realistic about that expectation. when we implement this law we think we can significantly reduce the severity of outbreaks. but even then, we are not going to get to the scale of the food supply that occasionally caused problems. so, again, i think it's important that the public has realistic expectations about both where we are and where we are going, and i think that confidence if we make the investment and are able to fully implement we can make a big difference. the we are going to have to stay vigilant and when these outbreaks occur be able to respond and contain them as quickly as we can, and we are
working on that part of the problem as well. >> [inaudible] -- tracking. >> there's always a small number of clusters being tracked. i can't sort of recent the ones being tracked right now, if you want follow-up with our folks to get some sense, but no, i'm not aware of any large looming outbreaks, but these usually happen on friday. [laughter] >> with virginia tech i have two questions. thanks very much for your talk. we've gone over the first one and that is how diverse could these rules before produce? and i kind of thinking in the good and effective in practices specifically for cantaloupe or leafy greens or tomatoes or will that be more of a wide method thrown in terms of preventive action for produce? and then the second question i can't seem to get clarity on are the exceptions or non-exemptions
for farmers and restaurants if you can talk about that. >> to the diversity of the producing sector, the economy is just enormous and it's one of the big challenges that we've got implemented in the law because we've got everything from a thousand acres of lettuce fields in sabrina in california to the three to 4-acre the growers of produce and farmers' market and commercial channels, and so the differences in the scale but also differences in commodities and pose different risks, different climactic and economic conditions and the country so it would be enormously complicated and congress made it clear once it takes that complexity into account, so we are working and this is the hard work we are doing right now to come up with a framework that is going to address the hazards in a way that can be adapted to the diversity of operations, and i think that is again going to be the test of whether we can pull
that off and i think we can and we've got some great ideas. we've gotten through engagement with the community. we went to 13 states last year listening to people, growers large and small and experts and we got a good base of understanding so came up with proposals and got a comment and see how come see how that goes. remind me of your second question. i forgot. >> [inaudible] >> yes, yes, yes. there's legislation, there was a big debate over whether small growers and those selling to consumers should be exempted and there was a so-called tester amendment sponsored by senator tester from montana, which did exempt growers and processors with less than $500,000 per year and left at least half of their sales going direct to consumers or retail outlets so have the sales were not going into the commercial wholesale channels. so, does it send a large number
of growers and processors, or relatively modest percentage of the total food supply, but nonetheless a number of small operators and that is a judgment the congress so we will spell out exactly what that means in practical terms. these folks aren't exempted from food safety altogether. i mean, they have to be able to show they are meeting in the state standards. if they have a food safety problem we can revoke the exemption. if the ship food that's contaminated we can take action to remove it from commerce so it's not exempted from food safety it's from the new preventive control standards vv implemented -- will be implemented. >> i'm with the american society for nutrition. as you know, product tracing is an important part of strengthening our food supply, and so beyond the fda having access to record that the food company is keeping, i was
wondering what the fda plans are to enhance the record being kept to ensure accurate records are being kept beyond one step forward, one step back for the product transformation. i didn't know if you started to look at the project tracing requirements in the modernization act. >> we have started looking, and we do consider enhancing the tracing and the ability to get quickly back to the source of the product of the potentially harmful and critical part of the modern system they would give some new mandates of tracing but it's largely in the context of one up and one back enhancements of that. we want to work with the industry really closely to take a vantage of the technologies that are available to deutsch racing in a much more electronic and real-time way than the current system which is from the
fda vantage point involved in the level going from front to front looking at the written records and that adds to the time it takes to get back to the source of the problems of the question is how can we, using the tools we got it but i think going beyond that working with the industry on figuring out what works in the particular sector of the industry one thing we know is we are never going to know enough to specify what is exactly the right tracing approach and technology for particular sectors. they've got to be adapted and the leaderships have to be an important part of getting where we are going on tracing. >> to more questions, please. >> you mentioned earlier the sma impact on food shippers and manufacturers, i was just curious what exactly you feel was the biggest threat from food manufacturing with regards to containers and what of the sma
and the fda are planning to implement in the future with regards to that. >> that food additive all that i mentioned earlier, there is a law that governs the chemicals used in food packaging and that governs a potential safety concerns posed by the migration of the chemicals into food, and so that is a system that operates independently of the new law. i don't see all the itself having a big impact on that. at the higher level of the transport and the way in which for the example the tankers food products are managed to ensure sanitation and prevent contamination problems would be addressed in the regulation, but in the lobby in terms of food
packaging, that's regulated separately and i think there are other issues obviously which have been visible of late but that is a system that point needs to keep up with the science and framework is pretty solid. >> one more question. >> i'm the editor of the public manager, which deals with federal workers issues and we are an independent. i was wondering since you've been leading all of these challenges and mandates you have to deal with, do you have sufficient resources to meet these declines? [laughter] >> we can write regulations with current resources.
we can write regulations and current resources and we are doing that. we are prioritizing our work and being sure that we do everything we can to meet the deadlines and the law. what requires the resources is building a system that takes those regulations from works on the page to actually being a functioning system that really is working in the practical way to make food safer, so it is the science to meet the standards the best possible standards and keep up with the changes is the training of our folks, the technical assistance and guidance for the industry. the investment in the state capacity. the oversight system we cannot create the system of import oversight for the globalized food system of investing and we look forward to working with our stakeholders in congress to get those resources. it's been a deputy commissioner,
thank you very much for your time today and for joining us. [applause] >> we have a small token of appreciation as a genuine crystal flow well under $20 appropriately in washington and the center of the globe, and we thank you for coming. ladies and gentlemen, thank you. [applause] [inaudible conversations]