[Congressional Record Volume 140, Number 7 (Wednesday, February 2, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: February 2, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
      IN SUPPORT OF AMENDMENT NO. 1342 ON EXCESS DEFENSE ARTICLES

  Mr. BINGAMAN. Mr. President, the amendment I am offering is a simple 
one. What it says is that the President should consider the effects of 
the transfers of excess defense articles on our industrial base before 
we proceed with the transfers.
  This amendment in a very similar form was adopted last year by the 
Senate Armed Services Committee and included in the fiscal year 1994 
Defense Authorization Act which was reported to the full Senate. It was 
adopted by our committee in response to testimony we received from 
industry that these transfers were in some instances directly competing 
with the undercutting U.S. industry efforts to sell new equipment. I 
would ask that an excerpt from the Armed Services Committee's report 
(Senate report 103-112) be included at this point in my statement.
  There being no objection, the excerpt was ordered to be printed in 
the Record, As follows:

      Limitation on Authority To Transfer Excess Defense Articles

       The drawdown of U.S. armed forces around the world has 
     resulted in a large amount of excess military equipment. At 
     the same time, funding for security assistance is declining. 
     These factors have led to more transfers of excess equipment 
     on a grant or low cost basis to eligible countries under 
     sections 516, 517, 518, and 519 of the Foreign Assistance Act 
     of 1961.
       The committee supports the transfer of excess defense 
     articles to U.S. allies and friends as a cost-effective means 
     of realizing security benefits from the transfer of equipment 
     that is no longer needed by U.S. military forces. In fact, in 
     1986, the committee initiated the so-called ``Southern 
     Flank'' amendment (section 516 of the Foreign Assistance Act 
     of 1961).
       However, at this time, the number and size of these 
     transfers are substantial enough to compete directly with 
     U.S. industry efforts to sell new equipment. The transfer of 
     excess equipment can undercut new equipment sales which 
     strengthen the national technology and industrial base, 
     maintain jobs, and reduce the unit costs of equipment 
     purchased by the Defense Department. Both the sale of new 
     equipment and the transfer of excess equipment offer 
     important benefits; however, the U.S. government does not 
     appear to systematically consider the effect of transferring 
     excess defense articles to a country upon any U.S. industry 
     efforts that might be underway to sell new equipment to the 
     same country. The committee recommends a provision that would 
     require the President to consider, on a case-by-case basis, 
     the effects of a transfer of excess defense articles on the 
     national technology and industrial base.

  Mr. BINGAMAN. Mr. President, at the request of Senator Pell, chairman 
of the Senate Foreign Relations Committee, this provision was dropped 
from the defense authorization bill when the full Senate took up the 
bill. The chairman felt that the State Department authorization bill we 
are now debating was the more appropriate vehicle for this provision 
since it amends the Foreign Assistance and Arms Export Control Acts. 
The chairman's staff indicated that they had no substantive 
disagreement with the provision.
  Mr. President, according to a just-completed GAO report done at the 
request of the chairman of the House Foreign Affairs Committee, 
Congressman Hamilton, the scale of these excess defense article 
transfers has increased significantly in recent years as we draw down 
our forces. According to GAO, between fiscal years 1990 and 1992, DOD 
notified Congress of proposed transfers of excess defense articles with 
an estimated current value of nearly $1 billion and an original 
acquisition value of about $3.5 billion. Given the scale of these 
transfers, it is not surprising that in some instances these transfers 
undercut potential sales of new items which could help sustain our 
industrial base. My amendment asks the Defense Department and the State 
Department to try to avoid such cases, but leaves the mechanism for 
obtaining industry input on these transfers and the ultimate decision 
on whether to proceed with the transfers to the executive branch.
  Mr. President, I would also note that I would hope that the fact the 
United States is supplying such large amounts of excess defense 
articles to some of our allies can have a positive contribution on our 
industrial base by influencing those countries to buy American in 
purchasing other military equipment. None of our competitors in the 
international arms market has a program on anything like the scale we 
have to dispose of excess defense articles on very attractive terms. It 
would be disappointing indeed to see beneficiaries of the excess 
defense article transfers turn around and not buy new equipment from 
U.S. industry.
  Mr. President, I believe that this amendment has been cleared on both 
sides, and I would urge its adoption.
  I ask unanimous consent that the amendment be printed in the Record.
  There being no objection, the amendment was ordered to be printed in 
the Record, as follows:

                           Amendment No. 1342

(Purpose: To provide for limitations on the transfer of excess defense 
                               articles)

       On page 179, below line 6, add the following:

     SEC. 714. LIMITATION ON AUTHORITY TO TRANSFER EXCESS DEFENSE 
                   ARTICLES.

       (a) Transfer to Countries on the Southern and Southeastern 
     Flank of NATO.--Section 516(b) of the Foreign Assistance Act 
     of 1961 (22 U.S.C. 2321j(b)) is amended--
       (1) by striking out ``and'' at the end of paragraph (2);
       (2) by striking out the period at the end of paragraph (3) 
     and inserting in lieu thereof ``; and''; and
       (3) by adding at the end the following new paragraph.
       ``(4) the President first considers the effects of the 
     transfer of the excess defense articles on the national 
     technology and industrial base, particularly the extent, if 
     any, to which the transfer reduces the opportunities of 
     entities in the national technology and industrial base to 
     sell new equipment to the country or countries to which the 
     excess defense articles are transferred.''
       (b) Transfers to Countries Participating in a Comprehensive 
     National Antinarcotics Program.--Section 517(f) of the 
     Foreign Assistance Act of 1961 (22 U.S.C. 2321k(f)) is 
     amended--
       (1) by striking out ``and'' at the end of paragraph (2);
       (2) by striking out the period at the end of paragraph (3) 
     and inserting in lieu thereof ''; and ''; and
       (3) by adding at the end the following new paragraph:
       ``(4) the President first considers the effects of the 
     transfer of the excess defense articles on the national 
     technology and industrial base, particularly the extent, if 
     any, to which the transfer reduces the opportunities of 
     entities in the national technology and industrial base to 
     sell new equipment to the country or countries to which the 
     excess defense articles are transferred.''.
       (c) Transfers to Countries Eligible To Participate in a 
     Foreign Military Financing Program.--Section 519(b) of the 
     Foreign Assistance Act of 1961 (22 U.S.C. 2321m(b)) is 
     amended--
       (1) by striking out ``and'' at the end of paragraph (3);
       (2) by striking out the period at the end of paragraph (4) 
     and inserting in lieu thereof ``; and''; and
       (3) by adding at the end the following new paragraph:
       ``(5) the President first considers the effects of the 
     transfer of the excess defense articles on the national 
     technology and industrial base, particularly the extent, if 
     any, to which the transfer reduces the opportunities of 
     entities in the national technology and industrial base to 
     sell new equipment to the country or countries to which the 
     excess defense articles are transferred.''.
       (d) Sales From Stock Under Arms Export Control Act.--
     Section 21 of the Arms Export Control Act (22 U.S.C. 2761) is 
     amended by adding at the end the following new subsection:
       ``(k) Before entering into the sale under this Act of 
     defense articles that are excess to the stocks of the 
     Department of Defense, the President shall first consider the 
     effects of the sale of the articles on the national 
     technology and industrial base, particularly the extent, if 
     any, to which the sale reduces the opportunities of entities 
     in the national technology and industrial base to sell new 
     equipment to the country or countries to which the excess 
     defense articles are sold.''.
       (e) Leases Under Arms Export Control Act.--
       Section 61(a) of the Arms Export Control Act (22 U.S.C. 
     2796a)) is amended--
       (1) by striking out ``and'' at the end of paragraph (2);
       (2) by redesignating paragraph (3) as paragraph (4);
       (3) by inserting after paragraph (2) the following new 
     paragraph (3):

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