[Congressional Record Volume 140, Number 25 (Wednesday, March 9, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: March 9, 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.


                           amendment no. 1480

  Mr. LEAHY. Mr. President, I rise in strong opposition to the Cochran 
amendment. It is not germane in any way to S. 4 nor is the amendment 
necessary.
  There is a compelling public health reason to get these standards in 
place. There are at least 20,000 physician-diagnosed pesticide 
poisonings a year. Countless more are undiagnosed. The California 
Department of Health has estimated as many as 300,000 pesticide 
injuries occur each year. We have known for over 10 years that current 
regulations are putting farmworkers and pesticide handlers at risk.
  The standards provide very elementary protections. Employers have to 
let their workers know how to protect against unnecessary, dangerous 
pesticide exposures. They have to provide soap, water, and towels to 
wash after contamination, and if necessary, transportation for 
emergency medical treatment. Every worker does not have to wear a moon 
suit, contrary to some of the misinformation that has been circulated 
about these standards.

  These simple protections have already been delayed for many years. 
The Reagan administration determined in 1983 that our current worker 
protection standards are seriously inadequate. It was not until 1992 
that the Bush administration finalized new standards and set the 
implementation date now in question.
  Since 1992, EPA and some States, including Vermont, have worked hard 
to educate growers and workers and get them ready to comply with the 
new rules.
  Many education and training materials are already available.
  Pesticides with new labels are already in the channels of trade. EPA 
reports that most of the 2,000 pesticide products affected by the new 
standard already have new labels. A delay in implementation would cause 
real confusion for farmers.
  Some have asked EPA and the President to delay implementation of 
these standards. The answer was ``no.''
  EPA has been working closely with parties who have complaints about 
the implementation and has pledged to do everything it can to help them 
comply.
  The Agency has made it clear that enforcement will be flexible. It is 
going to focus on cooperation and outreach, not assessing fines for 
technical violations.
  There should be careful deliberation before we make any changes to 
these regulations that have been over 10 years in the making. This is 
not the time or place for such deliberation.
  Mr. KOHL. Mr. President, I commend my colleague from Mississippi, 
Senator Cochran, for raising concerns about the implementation of the 
EPA farmworker protection standards for pesticides. This is an 
extremely important program, and its effective implementation is 
critical to the health of millions of farmworkers across the Nation.
  While I am concerned that some of the EPA educational materials that 
State Departments of Agriculture need to effectively implement these 
standards have been delayed somewhat, I must oppose the Cochran 
amendment. I do so because the dangers to human health associated with 
the delay proposed by this amendment are unacceptable to me.
  There are an estimated 20,000 incidences of physician-diagnosed 
pesticide poisoning a year. EPA estimates that there are as many as 
280,000 other pesticide injuries a year that go undiagnosed. The 
Cochran amendment would delay the worker protection standards by 
another year and a half. I am not willing to tell the hundreds of 
thousands of men, women, and children who are likely to be poisoned 
during that time that we jeopardized their safety for bureaucratic 
reasons.
  Instead, I have asked the Wisconsin Department of Agriculture, Trade, 
and Consumer Protection, the agency in my State charged with 
implementing these standards, to send me a list explaining exactly what 
material they are lacking in order to effectively implement the 
standards by the April deadline. I have alerted EPA that I will be 
sending this list to them as soon as I receive it, and that I expect 
them to supply Wisconsin DATCP with those materials, and other 
necessary assistance, as soon as humanly possible.
  Further, EPA has indicated that they will be very flexible in their 
enforcement of these provisions, and will continue to work 
cooperatively with the States to implement this program.
  In closing, I would say that if the price of the delay that the 
Senator proposes were anything less than human health, I might be more 
willing to consider it. But Mr. President, human health is exactly 
what's at stake here. I regret the inconvenience, and call on EPA to be 
as flexible as possible in their enforcement as states and farmers get 
used to the new standards. However these standards are long overdue, 
and any further delay could be disastrous.
  Mr. BAUCUS. Mr. President, I rise today in opposition to the 
amendment offered by Senator Cochran. As you know, this amendment would 
serve just one purpose--to delay the implementation of the worker 
protection standards for agricultural workers as regards agricultural 
chemicals.
  While some may perceive a link between this issue and the concept of 
competitiveness, such a bond is quite weak. Therefore, the debate over 
germaneness to S.4 has not been dominant. Therefore, like other 
speakers, I will concentrate on the merit of the amendment.
  Few in agriculture, indeed few in our society, would question the 
need to ensure the safety of agricultural workers. They provide a 
critical service in getting the crops raised that become food for our 
table and clothing for our families. However, as research has indicated 
and personal examples will emphasize, there are dangers involved. 
Therefore, the Environmental Protection Agency has brought forth the 
worker protection standards.
  Let there be no mistake about it. These are necessary standards. I 
know of an example in my State where a young man was literally showered 
with insecticide by an aerial applicator. Just a few short years later, 
this man is no longer with us. Robbed of the years of his life. There 
are countless examples where agricultural workers are injured by 
agricultural chemicals, through no fault of their own. If these 
standards prevent the loss of a single life, they will be worthwhile.
  However, I believe that balance is in order. Most agricultural 
employers take a zero-risk policy when it comes to protecting their 
employees from pesticides; they want to do what's right. Therefore, we 
must make certain they are not unnecessarily burdened by regulations 
which are irrelevant.
  I will work with the EPA Administrator to ensure that these vital 
regulations are implemented in a fair and reasonable manner. I am 
confidant that together, we can avoid the dangers feared by the 
proponents of this delaying amendment. Therefore, the amendment is 
unnecessary. So I urge my colleagues to defeat this measure and join me 
in working with the Administrator to resolve these concerns.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from South Carolina.
  Mr. HOLLINGS. Mr. President, what is the pending business before the 
Senate?
  The PRESIDING OFFICER. The pending question is an amendment from the 
Senator from Mississippi [Mr. Cochran].
  Mr. HOLLINGS. Mr. President, it is my hope, if a rollcall vote is 
agreed to, that we have that rollcall vote--I will ask consent later 
on--at 3 o'clock. We have given both sides notice, and they continue to 
work around the clock.
  So I move to table the amendment and ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  Mr. HOLLINGS. Mr. President, I ask unanimous consent that the 
rollcall vote on the motion to table be at 3 o'clock.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           amendment no. 1481

  The PRESIDING OFFICER. The question occurs on the amendment of the 
Senator from Georgia.
  Mr. HOLLINGS. Mr. President, I move to table that one, to follow the 
rollcall vote on the Cochran amendment. So I move to table the 
amendment of the distinguished Senator from Georgia and ask for the 
yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  Mr. HOLLINGS. Mr. President, I ask unanimous consent that the 
rollcall vote on the Coverdell amendment occur at the expiration of the 
rollcall vote on the Cochran amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. HOLLINGS. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. BURNS. 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. BURNS. Mr. President, I ask unanimous consent to proceed as in 
morning business for no more than 5 or 6 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered. The 
Senator from Montana is recognized.
  Mr. BURNS. I thank the Chair.
  (The remarks of Mr. Burns pertaining to the introduction of 
legislation are located in today's Record under ``Statements on 
Introduced Bills and Joint Resolutions.'')
  Mr. BURNS. I suggest the absence of a quorum.
  The PRESIDING OFFICER (Mrs. Murray). The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. HOLLINGS. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. HOLLINGS. While my distinguished ranking member is present now, 
earlier today, since I had been asked several times about this alleged 
pork bill, I became sensitive to some feel amongst our colleagues that 
this might be a bill where, as one described to me, Secretary Brown 
could be using moneys to just distribute around politically, and I wish 
to give what the actual fact and truth of the matter is.
  Let us go first to the amounts of money. With respect to the National 
Institute of Standards funding, what we have is a laboratory which is 
the old National Bureau of Standards laboratory, and that goes from 
$241 million, which it is today, to $316 million. And, of course, there 
are laboratory standards on safety, quality and otherwise. There is no 
pork in that to be awarded to any local folks relative to politics.
  Under the Advanced Technology Program, that goes from $200 million to 
$451 million. I happened to fashion that in consultation with our 
distinguished ranking member to make certain that it would not be pork.
  In that context, Madam President, what we have said is, first, rather 
than the Secretary of Commerce or the Senator or the Congressman 
picking for political reasons, the initiative in picking winners must 
come from the industry itself. And the industry itself must have 
confidence enough in its own particular interest in the project being 
researched to furnish at least a half the funding. We have seen now 
over a 2-year experience that upward to 70 percent of the money comes 
from private sources, because they just cannot come in and get a grant.
  There is no earmarking of a particular industry, even though the one 
singular industry brings the request to the department. But we make 
certain that it is peer reviewed by the National Academy of Engineering 
to make absolutely sure that in the review of it, it goes for all of 
industry and it is in the interest of all technology.
  I do not believe we could ever have passed this unanimously, as we 
have, not only year before last but out of the committee last year, if 
we had a pork bill because the Senators have all been priding 
themselves on getting rid of the pork and cutting out the Government 
and cutting back on expenses and cutting spending and those kinds of 
things. So the reason we got unanimous and bipartisan support not only 
within the Senate but within the committee itself was that we had set 
these safeguards in there. And as the chairman of the subcommittee of 
State, Justice, Commerce of appropriations we have forestalled any of 
those projects getting into that particular bill.
  That is this Senator's experience on the one side to assure the 
colleagues just exactly what we have.
  Otherwise, yes, there was a request made year before last, Madam 
President, with respect to the Advanced Technology Program by an 
industry that I am vitally interested in, and that is the textile 
industry, which has substantial employment in my State. But on behalf 
of all the textiles in the country, and apparel and garment workers, an 
application was made to the Advanced Technology Program that involved 
the computerization of the flow of orders for particular garments or 
textiles or cloth. And in that light it was to be a very sophisticated 
type of computerization whereby there would not be a backup or an 
oversupply, thereby cutting back on the inventory costs and thereby 
increasing the productivity.
  The Advanced Technology Program officials looked at it with 
sufficiency but found it did not pass muster. There was not any 
advanced technology to it as they saw, and there was not any uniqueness 
to it that would really improve all of industry as they saw it. And 
while we tried to impress upon them the seriousness of the application, 
we did not pass muster.
  Madam President, what really happened is they went out to Livermore 
and the energy lab. There at Livermore they fashioned together, with 
contributions, of course, a $350 million grant. They had last year a 
high-level meeting down in North Carolina. They announced that they 
have their research activity, and have it going. You will find they 
have around $6.8 billion, I think it is, over in the Energy Department. 
The total for all of this, excluding the laboratories, is only $l.37 
billion. But there was the request where right now we only have this 
year $200 million for the Advanced Technology Program. One industry has 
come in, and another division of Government, and they have gotten a 
$350 million project going.
  So you can see, when I say of the $70 billion expended in Government 
for research, we have at present less than 1 percent. If this bill is 
approved, it will still be less than 2 percent of the research moneys, 
and well shielded against any kind of political pork activity.
  So I think that ought to be emphasized with the distinguished Senator 
from Missouri present, because I wanted to make absolutely sure when 
people keep coming up and asking what is this program, why we find all 
of industry and all of labor, all of the Republicans and all the 
Democrats, having sponsored and supported the bill, all the 
competitiveness councils and committees of Congress, all in support of 
the bill, so that if we are suffering a slowdown with peripheral and 
nongermane amendments to somehow defeat or otherwise delay this 
particular measure on the basis that we did not want to start another 
pork program, I will agree with them.
  We do not want to start another pork program. This one is no such 
thing. It has a track record. There have been no projects earmarked, or 
any of those kinds of things.
  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. DANFORTH. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DANFORTH. Madam President, I want to get back to what I consider 
to be the main issue raised by S. 4, which is the question of the 
relationship between the Federal Government and the private sector on 
matters of research and development spending. I want to call the 
Senate's attention to a hearing that was held in the Finance Committee 
this morning and to the testimony of Mary Lowe Good, who is the Under 
Secretary of Commerce for Technology. It was a very forthright 
description of the position with the administration, and I think that 
it does a good job of helping to clarify what the underlying 
philosophical question is that is now before the Senate.
  She was testifying on the issue of the GATT agreement and what has 
been done to the subsidies code in the GATT agreement. But in the 
process of her testimony, she talked about science and about technology 
and about the private sector and about the Government. I want to just 
read a few portions of that testimony.
  Under Secretary Good said:

       The longstanding bipartisan support for technology 
     investments recognizes that Government investment in research 
     and development is essential. New technologies and 
     improvements to promote domestic development often fail to 
     attract sufficient private sector investment. The risk is 
     often high, and the globalization of the economy is putting 
     tremendous pressure on industry to reduce costs.
       After several years of cutbacks, major U.S. companies spend 
     less than 22 percent of R&D on long-term projects. In 
     comparison, their current counterparts in Japan expend nearly 
     50 percent of R&D on longstanding investments, according to 
     estimates by the Council on Competitiveness. And the pressure 
     is mounting. The Industrial Research Institute survey of 253 
     industry R&D managers found that 41 percent said that they 
     would reduce total R&D in 1994 versus 20 percent the plan 
     increases. Three times as many plan to cut long-term research 
     funding as to raise it.

  That is the concern that has been addressed by the administration, 
and it is a justifiable concern about research and development and 
about American investment in technology. The troublesome issue is not 
the question of whether or not it is good to have business investing in 
research; the question is the extent of the partnership, if any, that 
exists between the Federal Government and the private sector. And in 
reading Under Secretary Good's testimony, and in listening to it this 
morning, it is clear that the intention of the administration is to 
make up for underinvestment by the private sector by simply infusing 
funds into preferred industries.
  The Under Secretary continues:

       The Clinton administration has reinvigorated the public-
     private partnership as a key means of achieving technology 
     investments. In most cases, projects are cost shared, often 
     50 percent from industry and 50 percent from Government, and 
     selection is merit based.

  So, in other words, Under Secretary Good is talking about a 
partnership with respect to a specific industry and project. The 
industry antes up 50 percent and the Government antes up 50 percent on 
a cost-sharing basis. And that, in her mind, makes up for the 
shortfall--or helps make up for the shortfall of U.S. investment in 
research and development.
  She says, as Chairman Hollings pointed out a few minutes ago, that 
the selection is merit based.
  If we are going to get into the business of direct Federal grants for 
research, it is very important that those grants be merit based, that 
the selection be merit based, and that they be peer reviewed. And it is 
true that with respect to at least large parts of this bill, there is 
the provision for peer review, for merit selection of beneficiaries.
  However, as we have learned in our own appropriations process, there 
is often a lot of slippage between the intention of peer review and the 
actuality of earmarking. We have promised ourselves in committee 
reports, and I believe in legislative language, that henceforth we are 
not going to be involved in earmarking of particularly defense dollars; 
yet, every time a Defense appropriations bill, particularly a Defense 
appropriations conference report, hits the floor of the Senate, buried 
in that legislation is a whole host of earmarked funds for specific 
colleges and universities.
  My point is that a provision for peer review and the actuality of 
peer review are very often two different things. It is a worthy 
objective, and it is a very good thing to tell ourselves that we are 
all for peer review. But, Madam President, does any Senator truly 
believe that we, as politicians, will be able to restrain ourselves 
from putting our hands on this fund of $2.8 billion that would be made 
available in this legislation?
  Under Secretary Good continued in her testimony saying:

       We have ensured that Government involvement in industrial 
     research, a mainstay of our public-private partnerships, 
     continues without threat. The Government may be involved 
     either directly with funds, or with personnel, or in-kind 
     resources, in critical investigations aimed at the discovery 
     of new knowledge, with the objective that such knowledge may 
     down the road be useful in developing new products, 
     processes or services, or in bringing about a significant 
     improvement to existing products, processes or services. 
     These kinds of partnerships are industry focused, very 
     free, competitive and have the potential to provide 
     benefits across a number of companies and industries.

  Madam President, what businesses are in the business of doing is 
producing products and making money selling those products. To put 
money into particular businesses is really not like putting money into 
basic research. It is not like putting money into universities, for 
example, for basic research. It is putting money into something that 
eventually is going to earn a profit. If an industry is in the business 
of doing something other than earning a profit, it is going to have 
problems with its stockholders down the road. Probably its board of 
directors is going to have problems with lawsuits down the road.
  So it is not simply a matter of increasing the pool of knowledge in 
the United States when the Government makes grants to particular 
businesses. Those businesses are going to attempt to produce products, 
and on the continuum between basic research, on one hand, and 
development of products, on the other side of the continuum, clearly 
the private sector is going to be weighted very heavily toward 
something that is product oriented.
  So I believe that what Under Secretary Good did today is to help us 
clarify the issue that has been brought to the floor of the Senate by 
S. 4. And I would also point out what I think is interesting language 
in the committee report because the committee report speaks of an era 
of strong international competition and then the committee report says: 
``DOC''--that is the Department of Commerce--``has a leadership role to 
play in this new era.''
  One question that Members of the Senate might want to ask is, do we 
really believe that the Department of Commerce has a leadership role to 
play in this new era of strong international competition? Do we have 
that kind of confidence in the Department of Commerce to play this kind 
of leadership role of guiding the economy of the future, of directing 
the course of the economy? That is what the spending of money does. It 
puts the thumb of Government on the scales of economic decisionmaking.
  How do we feel about that? Do we believe that the Department of 
Commerce is that kind of agency? Do we believe that the Department of 
Commerce really has a leadership role to play in this new era?
  I would suggest that the answer to that question is no, that if the 
Government is going to be involved in research and development--and it 
is and it should be--it should do so in a much less directive way with 
respect to the private sector. It should do so by emphasizing 
especially basic research, rather than the development of products, and 
it should do so in a way which is neutral with respect to 
decisionmaking that is made in the private sector.
  I have long advocated the research and development tax credit, and I 
think if we want to spend $2.8 billion of new money to assist in 
research and development it would be better to do it in the neutral way 
of making the R&D tax credit permanent than by directing funds to 
specific and favored industries.
  The R&D credit allows the risk to continue to exist in the private 
sector. It does not put the Government in the business of being a 
venture capitalist The R&D tax credit says to business you make the 
decisions as to what the new technologies are. We in Government do not 
purport to make those decisions, nor will we set up some kind of 
commission or board to make the decisions for you. You do that in the 
private sector.
  So that is the way I would suggest that we proceed, that we, in 
effect, set the $2.8 billion aside for the R&D tax credit, and I am 
going to in a few minutes offer an amendment that would do just that.
  Now, clearly, Madam President, an amendment to the Internal Revenue 
Code is not in order in this bill. You cannot amend the Internal 
Revenue Code in a Senate bill. But we can make a decision in the Senate 
with respect to the best way to do research spending by the Government. 
We can make a decision in the Senate as to a matter of basic policy.
  Clearly, we are going to have tax bills that reach the floor of the 
Senate. They usually do every year or two. The R&D credit has been on 
the books since 1981. It has never been permanent. It has always 
existed more or less year to year, hand to mouth, and people in 
business say that R&D spending is something that is done over long 
periods of time. So it would be much more helpful to those who are 
engaged in research and development to have a permanent R&D credit 
rather than to have 1 or 2 or 3 year increments added on to each other 
for the research and development tax credit.
  Also, there has been a lot of work that has been done by Members of 
the Senate on improving the R&D tax credit, work that has been done in 
concert with representatives of industry, telling us how we can improve 
the R&D tax credit and make it more useful to industry.
  So I would suggest that we redirect the debate, that we make up our 
minds that this $2.8 billion will not be used for this particular 
program that is developed in S. 4 but that instead it will be set aside 
for the next tax bill to use for the R&D tax credit.
  Therefore, Madam President, I ask unanimous consent that the pending 
amendments be set aside so that I might send an amendment to the desk.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 1482

  (Purpose: To make permanent the research and development tax credit)

  Mr. DANFORTH. Madam President, I send an amendment to the desk and 
ask that it be stated.
  The PRESIDING OFFICER. The amendment will be stated.
  The legislative clerk read as follows:

       The Senator from Missouri [Mr. Danforth] proposes an 
     amendment numbered 1482.

       At the appropriate place, insert the following:

     Notwithstanding any other provision in this act, the amounts 
     authorized to be appropriated by this act shall not be 
     appropriated, but rather the Committee on Finance of the 
     Senate is directed to consider using the equivalent amount to 
     make permanent the research and development tax credit.

  Mr. HOLLINGS. Now, Madam President, in all candor someone ought to be 
ashamed to put in an amendment of that kind.
  The reason I say that, Madam President, is here we have had a bill 
totally mischaracterized. I just listened a minute ago about the $2.8 
billion.
  You cannot pork barrel the National Institute of Standards and 
Technology. That is a research entity over there. If you want to give 
them more money, fine business. But that is not the pork barrel for 
these specific projects. They could have been under the extension 
programs.
  When he talks about the extension programs or centers and, some have 
called them not just manufacturing centers but the Hollings centers, 
$70 million for fiscal year 1995 in this bill and $100 million for 
fiscal year1996.
  Immediately we begin to see the context in which the distinguished 
Senator is treating the matter, whereby I am confident he would not 
have gone along with the bill here year before last and unanimously out 
of the committee this time for $2.8 billion pork barrel.
  There are all of these other things in here with respect to the 
laboratory, but the $170 million is described as pork barrel as $2.8 
billion. The $170 million is described as $2.8 billion pork barrel. 
Otherwise, he takes the entire program and says, now wait a minute. It 
all of a sudden strikes the distinguished Senator as a philosophy of 
putting the thumb on the scales of industry.
  Well, since the Senator and I worked closely together, I am very 
familiar with his particular position with NASA, as well as my own. The 
distinguished Senator has always supported the NASA program. And from 
the NASA program has come the spinoff to the aircraft industry where we 
did indeed put a thumb on the scales of the aircraft industry. Not 
generally an advanced technology program for all of technology, but he 
has joined in that thumb on the scales and never worried about 
industrial policy at that particular time, specifically in support of 
the Kassebaum amendment. That was for the aircraft industry. That was a 
specific tort provision and thereby a thumb on the scales of the 
aircraft industry.
  Here, just in the last 2 days, he now comes up with an amendment to 
just take all of the funds, just take all of the funds. That is playing 
games now, to just say take all of these moneys and put it into the R&D 
over in the Finance Committee.
  We had research and development bills out of the Finance Committee, 
and we voted on those and we are prepared to vote. But I never heard of 
a bill that has support on both sides and then to come here with these 
monkeyshines and just take the bill and forget about the provisions and 
take all of the moneys and put it over in the Finance Committee, 
particularly in light of the track record of the distinguished Senator 
from Missouri.
  I am looking at S. 419, a bill before the Congress today. This bill 
was introduced last year on February 24, 1993, by Mr. Danforth, for 
himself, Mr. Rockefeller, Mr. Gorton, Mr. Lieberman, Mr. Baucus, Mr. 
Bond, Mr. Dodd, Mrs. Murray and Mr. Riegle. This particular bill is to 
provide for the enhanced cooperation between the Federal Government and 
the United States commercial aircraft industry in aeronautical 
technology research.
  Now you know how deeply they feel about the philosophy of industrial 
policy.
  With respect to the philosophy, this bill's principal author says, 
what I want is to put my thumb on the scales of aircraft research, put 
my thumb on the scales of aircraft technology. I would cite also 
Federal assistance to the semiconductor industry consortium, known as 
Sematech, which has been successful in improving the competitiveness of 
the U.S. semiconductor industry--that is a thumb on the scales of the 
semiconductor industry.
  Come on. That is begging the question.
  The Senator was a leader in this 7 years back in the institution of 
Sematech and cites it again with pride in this particular bill here for 
the aircraft industry. We know about the philosophy behind these 
initiatives. You might apply Mr. Darman's famous duck test. If it walks 
like a duck, squawks like a duck, flys like a duck, then it's a duck. 
Likewise, if the Senator's efforts on behalf of the aircraft industry 
and Sematech walk, squawk and fly like industrial policy, then they are 
industrial policy.
  And since we have just cited the duck test, lets also allow that 
what's sauce for the goose is sauce for the gander. If industrial 
policy is good for semiconductors, if it is good for aircraft, why not 
also for general research on merit-based, industry selected 
technologies?
  Now, it is just playing games to come forward here, having approved a 
bill that has been through him as ranking member on the committee on 
two occasions, unanimous support, Republican and Democrat, and then out 
of the blue just take all of the money from the bill and put it over to 
the Finance Committee and hope they direct it after the House, because 
under the Constitution, you cannot put in a finance-raising measure, 
tax measure with respect to R&D, but hopefully they will put in the R&D 
and thereupon the committee would come out and take these moneys and 
allocate from there.
  Now, that is the treatment we are getting on this particular measure.
  Now, I am not sure exactly what is going on. We will try to find out.
  But anybody with common sense can see that they are not talking about 
the bill. They are trying to recreate in their minds, because they 
cannot talk about the provisions in the bill, they are trying to set up 
a diversion by talking about an alleged philosophy of industrial 
policy. ``Well, wait a minute. We have a new philosophy here of 
industrial policy and a thumb on the scales of industry.'' Meanwhile, 
they are putting their paws all over Sematech in the semiconductor 
industry, putting their paws all over the aircraft industry. But now, 
as we contemplate putting a thumb on the scale for advanced technology, 
wait a minute, we have to discuss philosophy.
  I yield to the distinguished Senator.
  Mr. DANFORTH addressed the Chair.
  The PRESIDING OFFICER. The Senator from Missouri.
  Mr. DANFORTH. Madam President, if I may respond.
  Madam President, first, let us talk about the aerospace industry.
  It is often said, as it was just asserted by Chairman Hollings, that 
we are busily subsidizing the aerospace industry because we have NASA 
and because we have a defense budget, and that is said to be a great 
boon to the aerospace industry.
  Well, today at our hearing, we had as a witness, a vice president 
from Boeing. And because this statement has been made so frequently 
about how the aerospace industry has been subsidized, I put the 
question to the vice president from Boeing: Is it correct; is the 
defense budget, in effect, a subsidy for the commercial aerospace 
industry? Is NASA a subsidy? And the witness said flatly that the 
answer to that was no.
  He was pressed on that answer, and he said that he could not think of 
any use that the defense spending or NASA has given to the commercial 
aerospace industry.
  The argument that the aerospace industry has been a beneficiary of 
the largess of the Federal Government is the argument that has been 
made by the Europeans in defense of Airbus, and it is a bum rap. It is 
simply not the case.
  Our aerospace industry is not, in fact, on the same footing as Airbus 
is with the Europeans. The Europeans have conducted an aggressive 
policy of subsidizing research, development, and production of 
aerospace.
  Now, an agreement was made a couple of years ago between the United 
States and the European Community with respect to aircraft 
manufacturing. In that agreement, it was agreed that certain 
development subsidies would be green-lighted; henceforth, that certain 
subsidies for development of aircraft would be permissible.
  I did not agree with that agreement. I thought that was a bad 
agreement. I thought that it was the forerunner of the subsidies 
agreement that has been reached in these GATT negotiations, and it was. 
I objected to the green-lighting of certain subsidies in aerospace.
  As a result of that, I offered two pieces of legislation, introduced 
two bills. I saw them as being in the alternative. One was to mandate 
the commencement of a countervailing duty case against Airbus. The 
second was, if we were not going to do that, then to go to a Sematech 
type of operation, which we called Aerotech, on the theory that we 
could not sit by and allow a major industry of the United States to be 
victimized by unfair trade practices.
  I will be the first to say that, if there are unfair trade practices, 
the United States of America must act. We cannot be chumps. We cannot 
do nothing. We are going to have to do something.
  I would prefer to use the trade laws. I would prefer to use the 
subsidies code. I would prefer to file a countervailing duty case 
against Airbus. I have been advocating that for years. I think that is 
a totally ridiculous subsidy.
  But if the position of the United States is to do nothing or little 
or green light subsidies, if we are now into the world of subsidies, 
obviously the United States has to be toe to toe with whatever 
countries in the world are subsidizing their own industries.
  If we proceed with this GATT agreement and the result is wide open 
subsidies for research and development, I will be right there. Well, I 
will have left the Senate by that time, but I will be at least morally 
supportive of the position taken by Chairman Hollings. I will say if it 
is a world of subsidies, and the United States is falling behind, we 
have to keep up. We have done that with agriculture and we are going to 
have to do it with other sectors as well. I hope we do not come to 
that.
  I do think it is a basic question of philosophy. I do think it is a 
basic question of policy. Once you get into the business of competing 
subsidies, I do not see how you are ever out of the woods. Once you are 
in the business of competing subsidies, I think there is going to be 
more and more and more demand for more subsidies.
  I would rather see us not get into the game. I would rather see us 
do, by tax credit, what Chairman Hollings says we should do by direct 
governmental intervention in specific industries. I would rather be 
much less directive than S. 4 would have us be. I would rather have us 
say to the private sector: You make the decisions on research and 
development. You make the decisions. We are not going to make those 
decisions for you. And, if you do, then there is a tax credit for R&D.
  That is a much different situation than is the case with S. 4.
  The PRESIDING OFFICER. The Senator from Arkansas.

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