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| December 14th, 2007 |
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Media Contact(s): Jared Whitley (202) 224-5251 |
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FLOOR SPEECH: ON THE GRASSLEY AMENDMENT TO THE FARM BILL
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Washington - Sen. Orrin G. Hatch (R-Utah) today offered the following speech on the Senate floor opposing Senator Grassley’s Amendment #3823 to the Farm Bill.
Mr. President, today I rise in reluctant opposition to the amendment offered by my friend, the gentleman from Iowa.
Mr. President, our nation has been blessed with a judicial system dedicated to the principle of the rule of law. Each one of us no matter how: rich or poor; strong or weak; big or small; receive equal justice under the law.
In part, that is one of the reasons why our national competition policy is framed in general, universal terms. Specifically, the Sherman Act prohibits every “contract, combination … or conspiracy, in restraint of trade;” and the Clayton Act prohibits all acquisitions whose effect “may be substantially to lessen competition.”
There are many instances, where we have diverged from these principles, even for good cause. However, in many of these instances we have encountered numerous difficulties and our economy harmed by unexpected consequences.
One need only look at correcting legislation that the Chairman of the Antitrust Subcommittee, Senator Kohl, recently offered eliminating railroad antitrust exemptions.
Senator Kohl believes, with a great deal of merit, that many shippers are being charged exorbitant prices to transport their goods by the railroads. In fact, the Antitrust Subcommittee, of which I am Ranking Republican Member, received a letter, as part of the Subcommittee’s hearing into railroad anti-trust exemptions, from several states’ Attorney Generals that discussed how foreign corporations are very reluctant to invest in new American manufacturing facilities if the proposed location of these facilities is serviced by only one railroad.
Senator Kohl’s solution to this problem is to eliminate the special antitrust exemptions granted to railroad mergers.
Indeed, many Senators have argued for the repeal of the McCarran-Ferguson Act. As my colleagues know the McCarran-Ferguson Act exempts the business of insurance from federal anti-trust laws when and to the extent that business is regulated by state law.
These Senators believe that certain insurers took advantage of the McCarran-Ferguson exemption to implement a collective agreement to raise insurance prices on Gulf Coast residents still recovering from Hurricane Katrina.
Clearly, Mr. President, there is evidence of unattended consequences when special provisions are permitted in antitrust law.
That being said, there is a substantial difference between railroad antitrust exemptions, McCarran-Ferguson exemptions and creating new agriculture antitrust guidelines as called for by the Grassley amendment. I thoroughly recognize that the market relationship between the producer and the food packer desires special attention. However, the underlining concern is well founded: special antitrust rules for specific industries can have profound undesirable consequences and violate one of our national competition policies fundamental tenants: that antitrust law should be framed in general, universal terms.
So the question I believe that we should be asking is if the remedy to this situation is additional, special legislation, or greater enforcement? Currently, the Department of Justice has devoted considerable effort to investigate agricultural mergers but the time might be coming where we need to increase those resources for the Department. Perhaps the creation of a new Deputy Assistant Attorney General, whose responsibilities are solely to investigate agriculture mergers, is the correct path.
Mr. President, my trepidations of industry-specific rules, such as those called for by the Grassley amendment, are that they are likely to create legal difficulties. First, industry-specific rules add to the danger of inconsistent enforcement across industries. Second, industry-specific rules introduce additional uncertainty, since it will not always be clear in which industry a particular product should be classified, and thus not clear which legal standard will apply. Finally, has shown that once you enact industry-specific rules other industries and constituency groups will request there own special antitrust rules.
So what should we do? Do we maintain our national competition policy which is framed in general, universal terms, or should we embrace through industry-specific enactments.
Well let’s look at the record. During a period of ever increasing complex laws and regulations having general and simple rules makes antitrust law more understandable to both the legal and business community. The general language of current statutes provides courts and enforcement agencies valuable flexibility to incorporate the latest developments in business and economic learning. It should also be noted that, where industry-specific factors are important to reaching a correct decision in a particular case, the agencies and the courts are already fully authorized to consider those factors under current law. In particular, current antitrust principles can address issues of buyer power that have concerned some observers of agricultural mergers.
One should also remember that congressionally-created Antitrust Modernization Commission concluded that “the basic framework for analyzing mergers followed by the U.S. enforcement agencies and courts is sound.”
Therefore, Mr. President, I oppose Senator Grassley’s amendment.
Senator Grassley has a well-deserved reputation for standing up for and defending the American farmer. I agree that we must be vigilant in ensuring that the Department of Justice and Federal Trade Commission are diligent in enforcing antitrust laws – but those laws should be for all American economic endeavors, not fragmented as all too many of our laws have become.
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