Speech for
Michigan Business Group
May
17th, 2000
8:00 to
9:00am
at La
Colline Restaurant
Thank
you Bob and thanks to all of you for getting out of bed so early to be here this
morning. We’ve been having some
pretty late nights here on Capitol Hill this week so excuse me if I keep
reaching for the coffee.
I’m
definitely pleased to be here with you this morning regardless of the hour. Your group covers a wide and
diverse array of commerce that is vitally important to Michigan – that includes our vibrant agriculture
sector, our mainstay “brick and mortar” industries, as well as the rapidly
growing Internet, computer and telecoms businesses to mention only a few
examples. America’s, and
indeed Michigan’s, long economic expansion relies at heart on the core
businesses that you represent.
The
outlook remains promising as the nation’s productivity gains continue to astound
even the most pessimistic economists – inflation remains at bay and unemployment
at all-time lows. First
quarter GDP growth was a whopping 5.4%.
As with any economic prediction however, caution is required. I think we can all appreciate Harry
Truman’s lament for a one-handed economist – someone who doesn’t couch every
argument with the phrase “…on the other hand…”
Michigan, just like the nation as a whole, is enjoying a fair measure of
economic prosperity. In 1999
we attracted over 2,174 major, new projects or expansions -- more than any other
state. On the high-tech front, the
information industry is already the state's fastest growing, comprising more
than 7,500 information technology companies and some 3,000 software firms. And the education and research that is
taking place in our universities is at the highest levels in the world -- let
alone the nation. In short,
the Great Lake state has a superb workforce available and a business environment
and quality of life that few, if any, other places can offer.
Today
I would like to touch on a few issues that may be of particular interest to
those of you here today. I’ll go
over the budget and appropriations process as they currently stand in a minute,
but first I would like to discuss the issue of Permanent Normalized Trade
Relations, or PNTR, with the People’s Republic of China.
PNTR
represents one of the most important issues Congress has faced in several
years. The House vote is likely to
take place later this month and I am confident that after all the dust settles
and members recognize the importance of PNTR to our workers and businesses –
indeed toAmerica as a whole – that they will pass PNTR. Once the House has led the way, passage
in the Senate will soon follow.
The
United States and the international community have been working together with
China for decades to bring China into the World Trade Organization. For the first time in history, the doors
to China’s economy will be opened up to international commerce and
competition. U.S. companies
will be able to freely participate in the nearly $4 billion dollar Chinese
economy.
For those Members, like myself, who desire to make
progress with China on national security, human rights, Taiwan and any number of
other issues, we cannot afford to let this opportunity slip by. PNTR represents the greatest opportunity
America has had to break down the walls of isolation in China and provide the
Chinese people with the tools they need to pursue freedom and democracy.
China PNTR is good for Michigan business and good for
America.
I’m
certain you are all interested in the progress being made on the fiscal year
2001 budget and appropriations. As
one of only a handful of Congressmen who sits on both the Budget and
Appropriations committees, I am afforded the unique opportunity to be involved
with both the inflows as well as the outflows of federal spending.
And
with the election year upon us, the appropriations schedule is being both
compressed and advanced. The goal
is to get at least four of the appropriations bills signed by the President
before July 4th. The
remainder need to be well in hand by the August recess with conventional wisdom
leaving the month of September to consider any possible Presidential
vetoes. Let me assure you that the
pace will be hectic – remember that there are other legislative matters out
there that also require our consideration.
The
congressional budget resolution reached between the House and Senate last month
sets the total discretionary spending level for FY2001 at $600.3 billion --
nearly $14 billion more than the FY2000 enacted level of $586 billion. By comparison, the Administration’s
FY2001 budget requested total discretionary spending of $625
billion.
The
priorities in this year’s budget include protecting Social Security,
strengthening Medicare, paying down the debt, and bolstering defense and
education. The budget
resolution provides at least $150 billion in tax relief including the recently
passed repeal of the Marriage Penalty and the Small Business Tax Act. The resolution also requires that any
increases in the on-budget surplus be employed for further tax cuts or deficit
reduction. And that is where the
economic expansion that we are presently enjoying, presents us with a unique
window of opportunity. Just last
week we heard of reports that the on-budget surplus will be nearly $40 billion,
up from the predicted $26 billion that was made just a few short months
ago. Even in light of this
good news, Congress has to be careful not to go on any unwise spending
sprees.
You’ve also likely heard that a separate supplemental
appropriations bill does not appear to be in the works this year. Although the House passed a roughly $13
billion supplemental back in March – the Senate prefers to include any
supplemental monies into the thirteen FY01 appropriations bills.
Progress has already been made on the Military Construction, Legislative
Branch and Transportation Appropriations bills. Military Construction made it to the
House floor yesterday and later today the Agriculture Appropriations bill will
be taken up on the floor. There was
a 13% cut in Leg. Branch coming out of committee, clearly indicating Congress’
resolve to keep spending in line.
The $600 million increase over the President’s request for MilCon
likewise provides evidence of this year’s priorities.
As
you know, I sit on the Foreign Operations, Energy & Water and VA-HUD
appropriations subcommittees.
On Foreign-Ops the Senate has already acted and the
House is likely to begin consideration sometime in mid-June. As always, family planning and UN dues
will be arguing points, but the largest concern is the level of funding which
could be half a billion less than last year’s levels and which is complicated by
the supplemental requests.
On VA-HUD we anticipate subcommittee consideration
later this month, the 23rd to be exact, and again, the funding levels
will be very tight.
Energy and Water is looking at mid-June subcommittee
action and just like the other bills, spending levels will be constrained. Both the Corps of Engineers and the
Department of Energy are facing some difficult challenges this year. DOE must continue to make progress in
its Environmental Management program – a division which represents fully
one-third of the entire DOE budget and which is responsible for cleaning up the
nation’s environmental legacy from Cold War weapons production. I’ve worked hard in the past to reduce
the cost of cleanup at these sites and I will continue to keep at them. You’ve likely heard of DOE dismissing
the BNFL contract for Hanford tank cleanup. And we also have to be aware of the
worker compensation issue as well.
As for the Corps, if you’ve been reading the Washington Post this spring
then you are aware of some of the issues that they are facing.
This
week, during full-committee markup of the Transportation Appropriations bill, we
were successful in continuing the moratorium on any CAFE standard
increases.
As far as I’m concerned, raising CAFE standards would
severely restrict the ability of
U.S. automakers to produce the type of vehicles that the American people
want and the level of safety that they need.
Higher CAFE standards would require the Big Three to
reduce the size and scale back the amenities of their light truck models – this
only serves to distort the market and lessen consumer choice.
The American people like mini-vans, pickup trucks, and
sport utility vehicles because their size makes them safe and practical for
family use.
A recent study by the National Highways Traffic Safety
Administration found that every 100 lb. reduction in the average weight of an
automobile results in an additional three hundred highway related fatalities
every year.
Fuel efficiency is a goal that should and is being
pursued. Domestic automakers have
already increased passenger car fuel economy by 108% and light truck fuel
economy by 60% since 1975 and these design improvements will continue without
further government regulations and unfunded mandates. Already, the major automakers are
introducing hybrid vehicles that combine electric drives with internal
combustion engines. And significant
strides are being made towards bringing fuel cell technology into the auto
marketplace. Technological
improvements will lead the way in achieving even further emission
reductions. As the American people
demand and buy more fuel-efficient cars, especially with the current high price
of fuel, market forces will dictate any increase in fuel efficiency
As far as CAFE goes, the old saying, “If it ain’t
broke don’t fix it,” has never been more applicable. Congress needs to ensure that the
federal government doesn’t interfere by imposing unrealistic
mandates.
On the agriculture front, Michigan is being faced with
the threat of Bovine Tuberculosis in the wild deer population. The existence of the disease in the deer
population is most likely related to a combination of high deer population and
intense supplemental feeding of deer.
This presents a serious problem for Michigan because the deer have passed
on the disease to Michigan's livestock.
The problem is not limited to Northern Michigan, as TB-positive deer are
now turning up in other locations.
As a result, the USDA has now informed Michigan that they will be
revoking the state’s "TB free" status, creating the potential loss of more than
$156 million to the diary and cattle sectors over the next ten
years.
Just last week I was successful in offering an
amendment to the Agriculture Appropriations bill to urge the Secretary of
Agriculture to declare Michigan’s situation an emergency and to appropriate $7.5
million to fund critical areas such as surveillance, research, testing, and food
safety. These funds are essential
for the State of Michigan to identify the scope of the problem and formulate
solutions to eradicate the disease, as deer know no boundaries and are able to
spread TB to neighboring states. I
will continue the fight to ensure this problem is addressed before it becomes
unmanageable.
First and foremost there are serious discussions
taking place here in Washington concerning deregulation of the electricity
market – in both the House and the Senate.
H.R. 2944 by Rep. Joe Barton of Texas has already been
successfully voted on in subcommitte.
A full Commerce Committee hearing on the bill with Chairman Bliley is
still possible before the 106th Congress is over. Senator Murkowski continues to
First, we should not allow an electricity deregulation
bill to be used as an excuse or a vehicle for the liberals to play games with
additional federal Clean Air regulations.
Second, Chairman Barton has kept his bill free of any
“Renewable Portfolio Standards”-- and free of any “Date Certain” upon which
deregulation must take place.
The Administration wants to phase in a mandate that
7.5% of the energy portfolios come from renewable energy sources. My feeling on that is that we should not
get in the way of the free market.
Indeed, there is a certain percentage of the
population that will want to buy energy generated from renewable sources even
though it might comes at a premium.
And that’s just fine. But
lets not forget that there is another, larger segment of the population that
will seek to obtain power at the best possible prices.
Lastly, the decision on whether or not to actually
deregulate should be left to the states.
Michigan is already making progress in that respect with state Senate
bill 937. Each state is unique – so
lets leave it up to to them after setting a few basic groundrules.
Certainly you are all feeling the crunch from the rise
in petroleum prices this year.
After the 1973 oil embargo the nation made huge
investments into alternative sources of energy in the attempt to wean us off of
foreign oil supplies. Unfortunately
we don’t seem to be much better off today.
It makes me wonder whether the investments that have been made are ever
going to pay off. I certainly hope
so, but we will need some technological breakthroughs coupled with a responsible
and reasonable energy policy – a policy the Administration seems yet unable to
formulate.
Unfortunately, one piece that is missing from all the
debate surrounding energy prices is the Administration’s, particularly the Vice
President’s, ill-advised love affair with the 1997 Kyoto Protocol.
The cost of Kyoto to American competitiveness and our
economy would be severe. Developing
nations will be able to maintain their inexpensive energy prices while costs
here in the U.S. skyrocket, costing the loss of as many as 2.4 million jobs and
reducing average annual income by nearly $2700.
The impact at the state level is likewise staggering,
nearly 100,000 jobs lost in Michigan, raising the unemployment rate from its
current low of 3.6% to nearly 6% and bumping state electric bills by 64% and
home heating oil by 77%.
More importantly, the Administration has not, and
apparently has no plans to, submit the reckless treaty to the Senate for a
vote. Instead, it appears that they
prefer to end-run the Constitution by continually increasing funding to
government bureaucracies under the rubric of climate-change initiatives. Of course it is the taxpayer who foots
the bill, and this year Clinton is asking you to shell out over $4.1
billion. Yes that was “Billion”
with a “B”.
I can assure you that I will continue my fight against
Kyoto and the Administration’s attempt to circumnavigate both the Constitution
and the existing appropriations laws.
We now have the Knollenberg language to prevent just such abuses in the
spending of taxpayer dollars in 7 of the fiscal year 2000 appropriations bills
and I will do my best to ensure that these restrictions are inlcuded and
strengthened in this year’s bills.
Environmental Regulation
The last points that I would like to touch upon today
deal with the myriad of environmental regulations that are out there. In that respect, I have to admit that
the Environmental Protection Agency, EPA, along with some of the other executive
agencies, seem to think it is their calling to issue as many new and intrusive
regulations as they can possibly think up.
The problem is, these regulations are often based on shoddy or
insufficient science and they incur excessive costs to both individuals and
businesses, costs typically spent in lengthy court cases. Unfortunately the desired result of
protecting the environment, is not always achieved.
Now I assure you that protecting our environment for
future generations is one of my highest priorities. I want to ensure that future
generations have a clean environment and that our children and grandchildren are
able to enjoy the beauty of our natural habitat outside of a museum. The American people want to breathe
clean air, enjoy clean streams, and protect their families from pollutants.
Tradeoffs do of course exist but it is my opinion that
these are not mutually exclusive goals.
Two
of the environmental regulations that will be of greatest importance to you are
nitrous oxides (NOx) and Total Maximum Daily Loads (TMDL).
If you hadn’t heard, EPA had issued a
ruling requiring the limitation of nitrous oxides – or NOx - from several Midwestern states, my
state, Michigan included. Nitrous
oxides are emitted by utilities when they generate electricity, and the
northeastern states were claiming that NOx from the Midwest was impacting their
ability to meet the requirements of the Clean Air Act. The EPA rulemaking requires stringent
and costly reductions in NOx emissions for facilities that generate power and
industrial boiler. Its impact on
Michigan utilities alone is estimated to exceed $700 million. After a very long run in the courts, a
decision just a few weeks ago by the District court here in D.C. upheld the
EPA’s ruling. The eventual outcome
is still uncertain upon appeal.
And we are beginning to come to grips with the Total
Maximum Daily Load, or TMDL, regulations that EPA proposed last year.
EPA’s TMDL ruling will impact just about every
American, from farmers trying to fertilize their fields, to mining operations,
fish hatcheries, and power-producing utilities. It the case of farmers and timber, the
rule approaches a regulation on the rain.
The costs involved will certainly be severe. States and industry have estimated the
costs to reach the billions.
Well, I hope I have provided you with
some useful information here today.
Again, we have to ensure that communications between Washington and the
business community is a two-way street.
I am committed to working for you in Congress.
If we have time for questions – I would be glad to try
and address them for you.