[Congressional Record Volume 140, Number 23 (Monday, March 7, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: March 7, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                      NATIONAL COMPETITIVENESS ACT

  The Senate continued with the consideration of the bill.
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BAUCUS. Mr. President, I rise with some reluctance to oppose the 
proposed amendment which I believe may be offered by the Senator from 
Missouri, [Mr. Danforth].
  I am in this position reluctantly because I have the highest regard 
for Senator Danforth as a leader on international trade issues. He and 
I have worked together, for example, to extend Super 301, win passage 
of NAFTA, win passage of the 1988 trade act, and win trade negotiating 
authority for at least two administrations.
  I have the deepest admiration for his contributions to trade policy, 
and I see him as one of my most valued friends and allies in the 
Senate.
  I also share his concerns regarding the impact of the new GATT 
agreement on our countervailing duty or antisubsidy laws. The fact is 
that our trade laws, that is, our American trade laws, counterveiling, 
antidumping, section 301, are critical to American trade policy.
  These laws have taken us further in the direction of a genuinely 
free-trade provision than any other trade agreements. They are the 
backbone of American trade policy, and they cannot be traded away from 
any trade agreement. But I think with all respect to my friend from 
Missouri, before the Senate puts itself on record on this issue, we 
should at least listen and listen carefully to the administration's 
case. The administration has a number of arguments to make with regard 
to provisions of the Uruguay round which this resolution addresses. The 
administration's first chance to explain its views is a hearing being 
held by the Senate Finance Committee this Wednesday at 10 o'clock.
  Further, I am disturbed by this resolution's suggestion that the GATT 
agreement be renegotiated. Frankly, it is just not realistic to 
renegotiate the Uruguay round. It took almost 7 years of painful 
negotiations between 107 nations to conclude the round. We are not 
about to go back and ask each of those 107 countries to come back and 
renegotiate another agreement. We cannot at this point go back to the 
table and demand specific changes without endangering the entire 
agreement, which on balance will mean tens of billions of dollars in 
additional economic growth and hundreds of thousands of new jobs.
  I might also point out that other countries have plenty of provisions 
they also dislike, and they will certainly demand changes in exchange 
for the changes we want. The entire agreement could easily break down.
  Senator Danforth may be entirely right about the subsidy issue. It 
may be right for the Senate to take the step. But we should not do it 
hastily, and we should consider what is at stake. The round is 
projected to raise world economic production by $270 billion a year, 
and it could raise American GDP by $65 billion a year. It means 
hundreds of thousands or even millions of high-paying export jobs for 
the United States.
  This round has been a consensus goal of American trade policy since 
the mid-1980's. It is the product of three administrations. It is the 
perfect example of bipartisan cooperation. And, before we destroy it, 
let us at least look carefully and think hard. We should weigh the pros 
and cons of hearings and have this debate, but we should get the facts 
on the table first.
  I have been working with Senator Danforth's staff on provisions for 
the Uruguay round implementing language that I think will protect our 
trade laws. It may be that we could address the problem he raises in 
implementing legislation. We may be able to create a special procedure 
that balances foreign research subsidization with counter subsidies on 
our side. We may be able to limit the scope of this provision and 
provide a congressional check on its extension beyond the 5 years 
agreed to in the GATT.
  None of these options is perfect, but I am confident that we can 
protect section 301, and even strengthen it, in the implementing 
language. I am confident that we can protect our dumping laws, and even 
strengthen them, in the implementing language. I want to work with 
Senator Danforth to see if we can do the same to protect our 
countervailing duty law.
  At this point, I consider a vote on this resolution unwise. It would 
be premature. I urge my friend from Missouri to work with us to find 
other solutions. If in the end we cannot find them, I may well be back 
working with him on this resolution at a future date, but not here 
today. For today is too early for this resolution, and I urge my friend 
to withdraw it--at least not offer it--and, if he does offer it, to 
then withdraw it so the administration can make its case and work with 
the rest of us in this Senate to find a solution that does not threaten 
this round.
  I urge my friend, therefore, not to call up this amendment.
  Mr. President, I yield the floor.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. HOLLINGS. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BUMPERS. Mr. President, I am pleased to rise in support of S. 4, 
the National Competitiveness Act of 1994. Among other things, S. 4 
creates a Civilian Technology Investment Company [CTIC] program aimed 
at fostering the development of critical technologies by small- and 
medium-sized businesses. In large part, the program is modelled after 
the Small Business Administration's [SBA's] successful Small Business 
Investment Company [SBIC] program which has helped develop such 
business superstars as Federal Express, Cray Research, and Apple 
Computer.
  When S. 4 was reported by the Senate Committee on Commerce, Science, 
and Transportation, I could not have supported the CTIC program it 
contained. That version would have established a duplicative 
bureaucracy within the Department of Commerce to administer the 
program, which in many respects was identical to SBA's SBIC program. 
Further, that version would have permitted the CTIC program to use 
nonparticipating equity securities, thus permitting investment 
companies to circumvent sharing some of their federally sponsored 
profit with the Federal Government.
  Happily, today S. 4 contains an improved CTIC program, thanks to the 
dedicated efforts of my colleagues, Chairman Hollings and Senator 
Rockefeller, their staffs, the Department of Commerce, the Small 
Business Administration, and my staff on the Senate Small Business 
Committee. Like the SBIC program, the CTIC program will license 
investment companies which will provide financing through debt 
securities and participating equity securities, which parallel the 
recently created participating security created to finance SBIC's.
  In a few key respects, however, the CTIC program is different from 
the SBIC program. First, the CTIC program will require that the 
licensed investment companies make investments exclusively in critical 
technology ventures. Recognizing that technology investments are often 
riskier than other types of investments and that the budget of the 
Federal Government is tight, S. 4 strictly limits to 15 percent the 
cost of the CTIC program under credit reform. This will allow for the 
subsidy cost of the CTIC security to exceed the currently estimated 
cost of SBIC's participating securities by more than 4 percentage 
points, yet it will ensure the costs of this program remain within 
reason.
  Second, S. 4 establishes a Licensing Committee which will be 
responsible for granting licenses to CTIC's and for developing the 
operating plan and implementing regulations. The five-member Licensing 
Committee will have three members from the Department of Commerce, all 
of whom are well-versed in technology and one of whom is a finance and 
investment expert. The committee will also have two members from the 
SBA, both of whom shall be finance and investment experts. It is 
expected that all committee members will use their expertise to license 
only the most promising applicants which are financially sound and 
likely to succeed. After the licensing stage, the SBA will be 
responsible for administering and overseeing the program.
  Third, CTIC's will provide financial assistance to small businesses, 
as defined by the SBA, and to joint ventures, as defined by the 
Licensing Committee. As chairman of the Committee on Small Business, I 
encourage the Licensing Committee to not use the resources of this 
program exclusively to finance joint ventures. As evidenced by some of 
the successes of the SBIC program, some small businesses are very bit 
as innovative and may be more deserving of Federal investment than 
their more substantial joint venture competitors, who may be able to 
draw on the resources of some of America's wealthiest corporations.
  The issue of appropriations is a difficult one when joint programs 
are involved. S. 4 handles the issue by authorizing appropriations for 
the program to the Department of Commerce and directing that a portion 
of the appropriation be transferred to the Small Business 
Administration in proportion to its share of the program's 
administration. This is necessary to ensure that SBA has adequate 
salary and expense funds to administer the program responsibly.
  From the Licensing Committee to the program's funding, cooperation is 
the key to success of this new CTIC program. It, like the technologies 
it seeks to encourage, is an innovation. Although Federal agencies 
often do not work well together, I have confidence that this program 
will be different, because the common goal of providing investment 
capital for the development of technology will overcome parochial 
concerns. I look forward to the progress of this program as it is 
jointly developed by the Department of Commerce and the Small Business 
Administration.
  I can assure my colleagues that the Senate Small Business Committee 
will maintain rigorous oversight of this new program.
  Mr. JOHNSTON. Mr. President, I rise to speak in support of title VI 
of S. 4, the National Competitiveness Act of 1994. Title VI establishes 
the Information Technology Applications Act of 1994. This act amends 
and builds on the High-Performance Computing Act of 1991.
  The Committee on Energy and Natural Resources, which I chair, and the 
Committee on Commerce, Science, and Transportation, chaired by my 
distinguished colleague from South Carolina, Mr. Hollings, worked 
together in crafting the 1991 act. Again, our committees have worked 
together and developed the Information Technology Application Act of 
1994.
  The program established by the administration pursuant to the High-
Performance Computing Act of 1991, the High-Performance Computing and 
Communications Program or the HPCC Program, is an important Federal 
investment in high-performance computing and communications 
technologies, which are critical to the competitiveness and national 
security of the United States.
  The HPCC Program has been universally proclaimed as a success, both 
in the results achieved and in the manner in which agencies have 
coordinated their programs together. Similar research and development 
programs have been initiated following the model of the HPCC Program in 
advanced materials, biotechnology, and manufacturing.
  Since the establishment of the High-Performance Computing Act, 
however, the administration has proposed to expend the scope of the 
HPCC Program. The administration seeks to establish a new component of 
the program--the Information Infrastructure Technologies and 
Applications or the IITA. This effort will lead to the development of 
applications in high-performance computing and high-speed networking 
technologies for use in the fields of health care, energy, the 
environment, education, libraries, materials, and manufacturing. The 
Information Technology Applications Act of 1994 authorizes the IITA and 
provides direction to the administration in carrying it out.
  I would like to take a moment to clarify the intent and purpose of 
several sections of the Information Technology Applications Act of 
1994. The act makes no change to the management structure called for in 
the High-Performance Computing Act of 1991. The management and 
coordinating mechanisms in place today have produced remarkable 
interagency cooperation. There is no reason to change that structure 
and the IITA makes no changes. The main purpose of the Information 
Technology Applications Act is to call for, as part of the program 
created by the High-Performance Computing Act, the research and 
development of applications in high-performance computing and high-
speed networking technologies.
  Section 609 of the Information Technology Applications Act of 1994 
restructures section 102 of the High-Performance Computing Act. 
Currently, the High-Performance Computing Act calls for the creation of 
the National Research and Education Network. The High-Performance 
Computing Act envisions a national network that is accessible to 
researchers and educators throughout the country. The High-Performance 
Computing Act does not direct any one entity, including the Federal 
Government, to build and operate such a network. The High-Performance 
Computing Act directs the agencies of the Federal Government to ensure 
that agency networking activities are coordinated with each other and 
with the private sector with the goal that computer networks throughout 
the Nation can be connected together. This, in fact, has happened.

  Today, there are thousands of computer networks connected together 
allowing millions of researchers throughout the world to communicate 
with each other. No one entity, however, has built or operates this 
national network. This national network has been created largely 
through the voluntary cooperation of those who build and operate 
networks. By agreeing on the same standards and protocols, computer 
networks can now be linked together and be operated as one national 
network. The role of the Federal Government in this effort has been to 
act as a central coordinating point and as a catalyst for creating this 
national network.
  The Information Technology Applications Act would change the High-
performance Computing Act by eliminating the creation of the National 
Research and Education Network. Instead a National Research and 
Education Network Program is created. As no one entity is creating a 
national network and the focus of the High-Performance Computing Act 
has always been on the Federal Government's contribution, the creation 
of a program is a much better description of the Federal Government's 
efforts. The goal, however, has not changed--a national computer 
network accessible to researchers throughout the country. The Federal 
Government will continue to act as a catalyst and central coordinating 
point for connecting together the Nation's computer networks. The 
restructured section also calls for a much stronger effort in the 
research and development of applications technologies that may be used 
on computer networks.
  To help catalyze the effort to establish a system of interconnected 
networks, the High-Performance Computing Act of 1991 calls for the 
Federal Government to carry out research and development of high-
performance computing and high-speed networking technologies. This 
research has centered around the development of faster and more 
powerful supercomputers and networks, but has not focused on new uses 
or applications for high-speed computers and networks. The Information 
Technology Applications Act calls for a much stronger research program 
in the applications area for developing new uses for high-speed 
computers and networks in such fields as health care, energy, the 
environment, education, libraries, materials, and manufacturing. 
Applications in these areas are now possible because so much of the 
Nation has access to a national system of interconnected computer 
networks. For example, it is now possible for a doctor to communicate 
the results of a CAT scan as they are occurring to a colleague across 
country. The two can talk and look at the same time at the results of 
the CAT scan. A few years ago this would not have been possible. 
Additional research and development will lead to new applications in 
many other areas.

  The Information Technology Applications Act would add a new section 
102(g)(1) to the High-Performance Computing Act. This new section 
requires a point of clarification. This section calls for each agency 
to procure communications networking services through commercially 
available network services, or if these cannot satisfy agency 
requirements, then through contracting for customized services. This is 
a restatement of current law and of current practices. This language is 
not intended to change how agencies procure network services, but 
simply restates current agency practices to make clear that Federal 
agencies are to continue to competitively procure as much of their 
networking services as possible from the private sector as they do 
today. As agencies already do this, this section makes no change in 
current law.
  The final point I would like to make relates to section 606 of the 
Information Technology Applications Act. This section amends the High-
Performance Computing Act to direct the Secretary of Energy to develop, 
test, and apply high-performance computing and high-speed networking 
technologies in areas within the Department's missions such as energy, 
the environment, manufacturing, materials, health care, education and 
training, financial services, and law enforcement.
  Historically, the Department has been the lead Federal agency in the 
development and use of high-performance computing technologies. The 
Department operates more unclassified supercomputers than any other 
entity in the world and has working relationships between its national 
laboratories and most of the high-performance computing vendors. The 
Department connects its laboratories and researchers located throughout 
the world together through one of the Federal Government's largest 
computer networks. Some of the Nation's premier high-performance 
computing systems, applications, and networking capabilities have been 
developed, perfected, and routinely utilized by the Department's 
scientists and engineers in pursuit of the Department's missions. the 
Department has unique and extensive capabilities that could provide 
major contributions to the administration's Information Infrastructure 
and Technology Applications or the IITA Program. Considering the 
Department's expertise in high-performance computing, the Department 
should have at least an equal, if not larger, role in the 
administration's IITA, than the other agencies.
  Thus, I was disappointed that a role for the Department was not 
specified when the administration first proposed the IITA. The 
administration maintained that the Department had not established what 
role it could play in the IITA. The Department of Energy subsequently 
identified the potential applications and technology contributions it 
could make to the IITA. Section 606 would establish the Department of 
Energy's role in the administration's IITA.
  Information is one of the Nation's most critical economic resources. 
I welcome the administration's efforts to improve on the High-
Performance Computing Act by developing a program to develop new ways 
for this country to benefit from this resource. With the authorization 
and guidance provided by the Information Technology Applications Act, 
the administration can move forward with this most important 
initiative.
  I urge my colleagues to support passage of the Information Technology 
Applications Act.

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