Two years ago, I opened a hearing by saying that I was disappointed to be revisiting the issues of interstate waste and flow control. My views haven't changed much in that regard. In the four years since the Senate addressed interstate waste and flow control in 1995, we have seen State and local governments continue to address this topic in the context of a free market. Even witnesses testifying today in support of Federal legislation will acknowledge that fact. In my view, the case for Federal intervention becomes more difficult to make with each passing day.
In 1995, Senator Chafee and I worked very hard to pass an interstate waste and flow control bill, S. 534. The House took a more free market approach to the issues, however, and S. 534 died in that body. That may have been the right outcome, in hindsight.
I believed then that the legislation we passed had significant flaws, particularly in regards to flow control. At the time, however, I thought it was important to quickly address these issues, in light of the allegedly dire consequences we faced if we failed to act. Well, Congress did not enact Federal legislation in this area, parties continued to operate in a free market in this regard, and, simply put, the sky did not fall.
I would like to make a few specific comments about the two issues we are here today to discuss. In previous Congresses, we heard testimony supporting flow control stating that immediate action was required to protect municipalities from having to default on bonds they had issued to fund their waste-to-energy and recycling efforts. Today, however, one of the witnesses will testify that bond defaults should actually not be the "litmus test" for legislation. The reason for that new position is clear: While some downgrades have taken place -- a total of 17 nationwide-- widespread municipal defaults did not occur. Testimony from another witness indicates that only two counties in New Jersey have entered "technical default" -which as I understand it means the issuer is still current on payments but the revenue available for debt service has declined.
Rather than simply defaulting, localities have responded the way we would hope and expect them to: they have instituted competitive tipping fees, cut their overhead costs, and sought alternative streams of revenue. That is the way the free market should work, and that is the way it has worked. I commend those communities for taking responsibility for their own actions.
The fact is, supporters of flow control have a much tougher case to make this year. It is clear that the free market is not broken. Tipping fees have fallen and competition has proven favorable to residents who ultimately pay for this disposal. Flow control legislation would upset market forces that are reducing costs for residents. It would constitute a tax on consumers, no matter how disguised as a "user fee." If localities want to impose a tax on their citizens, they should do so directly, rather than hiding it in Federal flow control legislation.
Proponents of interstate bans or controls also have a difficult case to make, but I am interested in hearing about creative solutions that can balance competing interests in this regard. I understand the need for States to plan for their future in-state disposal needs. I also understand the real benefits of the free market, as Mr. Miles so eloquently states in his written testimony.
The interstate issue remains complex. Many states, including my own, both import and export significant amounts of waste, in cooperation with neighboring states. Regional solutions are clearly being sought -- and found -- to regional problems. I do not see how allowing individual states within a region to take themselves out of the equation helps matters, but I am concerned about in-state capacity issues -- particularly in light of the impending closure of the Fresh Kills landfill. Those 11,000 tons of excess waste from New York must be disposed of, and I understand that other states don't want their own planning and in-state capacity disrupted by that state's waste.
To date, however, I have seen no evidence that we can improve upon the solutions emerging from the interplay of local, state, and regional political and business entities operating within a free market system. I remain unconvinced that the bills before us are the answer to concerns about the interstate transportation of solid waste. There may be creative solutions out there to these issues, but it is not clear to me that presumptive bans, freezes, and ratchets are among them.
I want to thank the witnesses for coming today and I look forward to their testimony.