[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.
  The PRESIDING OFFICER (Mr. Conrad). The Senator from New Mexico.
  Mr. DOMENICI. Mr. President, I rise not to respond to Senator Pryor. 
Obviously some others will do that, perhaps in due course.
  I just wanted to say a few words about the amendment that Senator 
Nickles has pending before the Senate. Frankly, I say to my friend 
Senator Hollings, who is the chief sponsor of this bill, I believe in 
good faith he speaks of this bill as one that he wants to add to our 
competitiveness and make us more responsive and capable of being more 
productive so we can compete in this new world market that everybody 
speaks of. Frankly, I believe the subject matter of the Nickles 
amendment belongs on this bill.
  I do not know, maybe it could not have been put there because of 
jurisdictional issues. As the distinguished Senator, Senator Hollings, 
produced this bill, it might have been difficult to report out of his 
committee a measure that perhaps belongs partially before the 
Governmental Affairs Committee or some other. But this country 
desperately needs to recognize that whether we believe it or not, when 
we pass laws and regulate our businesses we have a premise that is a 
secret premise. Whether we believe it or not, it is true. It sort of 
says: Anything worth doing is worth overdoing. That is where we are 
when it comes to the regulatory malaise in this country.
  We do not even have an idea of what the regulations say or how they 
are interpreted from some simple little law that we pass talking about 
safety. By the time it gets to our people, and in particular small 
business, it is so convoluted and so complex that one of the major 
reasons that American business, in particular our smaller businesses, 
are anxious and angry at their Government is because they think these 
regulations and rules are impractical, for the most part.
  Frankly, they do not say that just because they do not want to do 
them. They say it because they know many of them cost far more than any 
reasonable person would say they are worth. As I understand the essence 
of the amendment, at certain intervals when we are ready to put a 
regulation in place, ready to pass a bill that has an impact in a 
regulatory manner on the businesses of this country--it does not say 
you cannot do it, it says: Do a bona fide evaluation of the economic 
impact of that regulation so somebody can say, is it worth it?
  Frankly, I am in the process in my own State of asking a group of 
business people to regularly talk about regulations as they affect 
their own brothers and sisters in corporations, that are in business. 
We call it an Advocacy Group for small business, but its primary 
function is to talk to each other about inordinate, ridiculous--maybe I 
should even say sometimes stupid--regulations that have a huge impact. 
And the businessperson or business entity is saying, to what end? What 
are they trying to do?
  I was hopeful, Senator Nickles, I would be able to bring a big list 
of this advocacy group's findings. But they have just started working. 
It was just one little story in the newspaper and they are all getting 
called up, these advocates, these five or six. People want to go see 
them to tell them about something the Government is insisting upon that 
they think borders upon the absurd.
  So I think at some point in time we ought to do something like this. 
I say for one, having been at this for awhile, I wish we did not have 
to. I wish there was another way for us to play a more important role 
in sorting out regulations and interpretations of our laws by 
regulators and rules imposed by regulators, informally and formally. I 
wish there is a better way.
  Mr. HOLLINGS. Does my colleague think this amendment will clean up 
this regulatory abuse?
  Mr. DOMENICI. It will help some. It will help some.
  Mr. HOLLINGS. How? That is what I am wondering about.
  Do we have an economic impact statement by CBO on the department of 
Government, whatever it is, under this bill? For this particular?
  How much is it going to cost the Government to give an environmental 
impact or economic or employment impact statement for every bit of 
Government activity? I remind my colleague and myself--here we have a 
problem of unfunded entitlements. We have toyed with that ad nauseam. 
Now what we have here is health care. So the solution of unfunded 
entitlements is one grand, magnificent, unfunded entitlement.
  Mr. DOMENICI. No doubt.
  Mr. HOLLINGS. Here we have too many regulations. I agree with that. 
Everybody knows it; regulations upon regulations and reports upon 
reports. We used to meet with the school boards at the appropriations 
level way back, and the school folks saying look at all these reports 
that we have to put in and other things. Now I am seeing Government 
saying, before we move we have to have an economic and employment 
impact statement?
  I remember the largest building in the world, Building No. 1 down in 
Atlanta, GA, where they built all the aircraft during World War II. It 
covers 75 acres, which is 3.4 million square feet. It is, under one 
roof, 78 football fields. They were grinding out, at the end of the 
war, five B-29's a day.
  We found out they broke ground for that building on February 1, 1942, 
and dedicated it and it was in operation March 1, 1943, in 13 months. 
They got a little lieutenant colonel in the Corps of Engineers and said 
go ahead and build the building, and he did. We cannot find him. But we 
know today it would take anywhere between 5 and 10 years to build the 
building with all the impact statements and reports and findings and 
hearings and bureaucracy. That is why I am particularly sensitive to an 
initiative of this kind. I know the intent is good. I know the Senator 
from Oklahoma is sincere. He has moved with it. From what I am 
understanding on this side, there is no one in the Governmental Affairs 
Committee--their committee, not ours--who wishes to be heard. Perhaps 
maybe we will accept it. I do not know. Whatever he wishes.
  Mr. DOMENICI. Mr. President, I believe I have the floor. I am going 
to finish one thought and then I will yield. I will not take much time, 
if Senator Nickles wants to move or vote--whatever he desires.
  We tried a lot of things. Senator Hollings will remember at one point 
we put in a law that the Supreme Court threw out that said before you 
initiate a full-blown regulation it has to come up and sit here in each 
House for 90 days and they have the right to veto it. Remember we had a 
veto regulation? I wish I remembered the case. It is a historic case. 
The U.S. Supreme Court said no dice; you cannot do that; separation of 
powers.
  In a sense I am not sure that was the greatest. But we are trying to 
do something to get rid of this huge, huge abundance that builds up 
without us knowing about it. My own observation as a Senator, after a 
number of years here, is that we ought to do something about it in an 
orderly way by making sure we actually oversight what our laws are 
doing and what regulations are doing in a more frequent manner in the 
committees of jurisdiction. We would be amazed at what we would find. 
Right now we will not do it because we do not want to spend the time 
and we do not think it is very politically forthcoming to have a 
hearing on regulations. But we would find so many things, if we had 
enough time to do that, that would become political issues and that 
would inure to our benefit. You cannot imagine.
  That is why from my standpoint I believe the time has come to have 
more oversight in the Congress. That is why in the reform of the 
Congress the one major proposal I offered was to not have to 
appropriate every year, to not have to budget every year, not to pass 
any authorization for 1 year. Do them all multiyear so at least you are 
finished with this process that is redundant now that permits us to say 
we do not have enough time to do oversight, we do not have enough time 
to have hearings.
  Having said that, the next best thing around is to adopt the Nickles 
amendment and make sure we do some impact statements on these 
regulations that have real, real anticompetitive components for 
American business.
  I yield the floor.
  Mr. NICKLES addressed the Chair.
  The PRESIDING OFFICER. The Senator from Oklahoma.
  Mr. NICKLES. Mr. President, I wish to thank my friend and colleague, 
Senator Domenici, for his statement. I hope my colleagues listened to 
many of the points that were so well stated by the Senator from New 
Mexico, because I will tell my friend from South Carolina that, if you 
go in and talk to your bankers and if they have any one big problem, it 
is usually not just taxes, it is usually not interest rates--although 
it may be sometimes--but it is probably Government regulations.
  If you go in and talk to a business person and if they find out some 
of the legislation that is running through Congress, they say, ``Wait a 
minute, what are you guys doing?'' There is legislation--I mentioned to 
my friend from South Carolina--dealing with rewriting OSHA that, 
according to one article I read in, I think, the Washington Times, the 
cost of that will be $62 billion per year on the private sector. I do 
not know. I am not privy to that report and how accurate it is. But I 
am sure that the legislation that is being discussed, the OSHA reform 
legislation, has some very well-meaning points. But if it is going to 
cost the private sector that much, I would like to know about it before 
we vote on it. I think it would help us. That is the purpose of our 
amendment.
  I might mention, Mr. President, that there is a large group of 
organizations and associations that support the Economic and Employment 
Impact Act that Senator Reid and I have been working on now for 2 
years.
  I ask unanimous consent that this list be printed in the Record.
  There being no objection, the list was ordered to be printed in the 
Record, as follows:

          Supporters of the Economic and Employment Impact Act

       American Bankers Association.
       American Farm Bureau Federation.
       American Forest Council.
       American Forest Resource Alliance.
       American Furniture Manufacturers Association.
       American Vocational Association.
       Associated Builders and Contractors.
       Citizens for A Sound Economy.
       Computer and Business Equipment Manufacturers Association.
       Independent Bankers Association of America.
       Independent Petroleum Association of America.
       International Association of Drilling Contractors.
       National-American Wholesale Grocers' Association.
       National Association of Homebuilders
       National Association of Manufacturers.
       National Association of Regional Councils.
       National Association of Wholesaler-Distributors.
       National Cattlemen's Association.
       National Conference of State Legislatures.
       National Federation of Independent Business.
       National Forest Products Association.
       National League of Cities.
       National Ocean Industries Association.
       National Rural Water Association.
       National Restaurant Association.
       National Taxpayers Union.
       Petroluem Marketers Association.
       U.S. Chamber of Commerce.

  Mr. NICKLES. Mr. President, that list includes the American Farm 
Bureau; American Forest Resource Alliance; American Furniture 
Manufacturers Association; American Vocational Association; Citizens 
for a Sound Economy; Independent Bankers Association; National 
Association of Home Builders; National Association of Manufacturers; 
National Cattlemen's Association; National League of Cities; National 
Rural Water Association; National Restaurant Association.
  I have some letters from many of these organizations, but when you 
think about it, we have legislation that is pending, like the National 
Rural Water Association, like the Safe Drinking Water Act, which again 
have very noble and good goals, but how much will it cost?
  Right now we monitor about 80 substances, and by the year 2000, we 
are going to monitor 200 substances. How much will that cost? I think 
this amendment will help that. That is what I am trying to do.
  I appreciate my colleague's willingness to accept the amendment. That 
is fine with me. I urge its adoption.
  The PRESIDING OFFICER. If there is no further debate on the 
amendment, the question is on agreeing to amendment No. 1485.
  The amendment (No. 1485) was agreed to.
  Mr. NICKLES. Mr. President, I move to reconsider the vote by which 
the amendment was agreed to.
  Mr. HOLLINGS. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.


                           Amendment No. 1480

  Mr. HOLLINGS. Mr. President, what is the pending business now? Is it 
the Cochran amendment?
  The PRESIDING OFFICER. The question recurs on the Cochran amendment 
No. 1480.
  Mr. HOLLINGS. The distinguished Senator Cochran is here. Maybe he can 
inform us, or should we put in a quorum call now?
  Mr. COCHRAN. Mr. President, if the Senator will yield, I am prepared 
to go forward with the vote, although the distinguished Senator from 
Ohio, Mr. Metzenbaum, indicated an interest in discussing the amendment 
further or possibly offering an amendment to the Cochran amendment.
  Mr. HOLLINGS. I will seek his attendance here.
  I suggest the absence of a quorum.
  Mr. NICKLES. Will the Senator withhold? I wish to thank my friend and 
colleague from Mississippi for allowing me to set aside his amendment. 
I also wish to thank the Senator from Missouri for allowing me to set 
aside his amendment so we could adopt this amendment.
  I appreciate their cooperation, as well as the cooperation of my 
friend and colleague from South Carolina.
  Mr. HOLLINGS. Mr. President, 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. DANFORTH. 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. DANFORTH. Mr. President, we have heard repeatedly from the 
distinguished chairman that the Senate has done all these things 
before; this is old news; where has everybody been? We have been asleep 
at the switch. This is nothing new; just a continuation of past 
programs; the same old thing.
  I would respectfully call the attention of the Senate to the fact 
that it is not the same old thing; that this is a new venture into 
Government spending for the purpose of industrial policy, a quantum 
leap forward into something entirely new.
  He said that the Senate has passed similar legislation. Well, in June 
of 1992, the Senate passed something called S. 1330, the Manufacturing 
Strategy Act. That authorized $280 million over 3 years. This bill 
authorizes $2.8 billion over 2 years. There is a significant 
difference, I would submit, between $280 million spread over 3 years 
and $2.8 billion spread over 2 years.
  Then let us look at some of the specific thrusts forward in spending 
that are represented in this authorization bill. This bill would 
authorize $11 million for the Office of the Under Secretary of Commerce 
for Technology for 1995, and $14 million for 1996; 11 and 14. What did 
we appropriate for 1994? $6 million; not 11 or 14, but 6. This creates 
a pilot program for SBA. This is the venture capital initiative. It is 
a new initiative. It is not something old, it is not something we have 
approved in the past, voted for in the past. It is something entirely 
new and different.
  The SBA pilot program, the Venture Capital Program, zero dollars in 
1994; $50 million for 1995; $50 million for 1996: $100 million in new 
funds authorized for something new and different, the venture capital 
fund, to be administered by SBA and Commerce.
  Additional activities: Zero, of course, 1994; $14 million, 1995; $19 
million, 1996.
  National Institute of Standards and Technology, NIST funding: 
Appropriation for 1994, $520 million. Authorization in this bill, $991 
million; for 1996, $1.150 billion. That is roughly doubling the amount 
of funding for the National Institute of Standards and Technology.
  The so-called ATP program: Appropriated for this year, $199 million; 
authorized for 1995, not $19 million but $475 million, which is, of 
course, a way station on the way to 1996 in which $575 million would be 
authorized.
  Mr. President, to go from $199 million to $575 million is not more of 
the same. This is not stuff we voted on before. This is a new 
development, new initiatives in spending.
  The Hollings Centers: $30 million appropriated for 1994; $70 million 
authorized for 1995; $100 million authorized for 1996--more than a 
threefold increase for the Hollings Centers.
  The NIST Laboratory to Improve Quality: $3 million appropriated for 
1994; $10 million authorized for 1995; $10 million for 1996. NIST 
Facilities: $62 million this year; $110 million authorized for 1995; 
$112 million for 1996. Wind Energy: Zero this year; $6 million 1995; $3 
million 1996. The National Technology Information Service: Zero 1994; 
$20 million 1995; $120 million 1996. Or the subtotal for the Department 
of Commerce, $526 million has been appropriated this year. That will go 
to $1.086 billion, more than doubling in 1995, and up to $1.253 billion 
in 1996 for the Department of Commerce alone.
  Now, how about the entire bill? For 1994, $526 million has been 
appropriated for these various categories, and that is going from $526 
million this year, to $1.370 billion in 1995, and in 1996, we would 
authorize $1.478 billion.
  Now, Mr. President, the Senator from Missouri would submit to the 
Senate it is simply not correct to suggest that this is just more of 
the same. This is a basic change in policy, a major increase in the 
function of the Federal Government with respect to pumping our money 
into the business sector of the country with respect to research and 
development, a change from $526 million of appropriations to $1.478 
billion in a period of 2 years. It boggles the mind.
  This is not more of the same. This is not matter that has been 
gleefully approved by Members of the Senate year after year. This is 
something new and different. This is what is accurately pointed out in 
the committee report where it is the position of the committee that 
``the Department of Commerce has a leadership role to play in this new 
era.'' It is a new era, and the Department of Commerce is to lead the 
way by this dramatic increase in spending.
  Now, I have not chosen to fight this battle primarily on budget 
grounds. I assume that we do want to help science and technology in 
this country. Others might want to fight it on the budget ground. I am 
addressing it on industrial policy grounds. I think if we are going to 
spend this money, we should not be spending it in this fashion. We 
should not be creating industrial policy.
  But to say that a dramatic shift from $526 million to $1.478 billion 
is more of the same is just totally wrong. We have never authorized 
anything like this before.
  As I pointed out, the last time the Senate had an authorization bill 
that was similar to this was 1992, S. 1330, $280 million over 3 years.
  So I would suggest this really is a policy switch. This is a major 
question before us. This is a major change. This is industrial policy, 
new vistas for the Federal Government, new things for the Federal 
Government to do.
  We have the wisdom somehow in Washington. We know what is good for 
the country. Just spend the money, dish it out. Find those sectors that 
are promising. Find those specific businesses that are promising. Put 
the money in them. If that is not industrial policy, what is industrial 
policy? That is clearly what industrial policy is. That is what it 
does.
  Government, the all-wise, all-powerful, all-expensive Federal 
Government has the funds available, borrowed from our children, to put 
into whatever we in our wisdom see fit to put it into.
  Well, I have an amendment which I have offered, and the amendment is 
very simple. The amendment says if we are going to spend $2.8 billion, 
let us use it to extend the R&D tax credit, make it permanent, improve 
it. Take the advice of the business community that says give us a tax 
credit and then let us make the decisions. Do not have the decisions 
manipulated from Washington.
  That is what my amendment would do. Maybe some Senators would rather 
say we do not want to spend the money at all. Well, if they feel that 
way, they can vote for my amendment and then vote against the bill, if 
that is what they want to do. But what I am saying is if we decide to 
spend this much money, $1.37 billion in 1995, $1.478 billion in 1996, a 
grand total of $2.8 billion over 2 years, let us do it in a way that is 
less manipulative of the private sector. Why do we have to horn in on 
everything? Why do we presume here in Washington that we have the 
knowledge, that we always have to create funds? The private sector just 
cannot get along without us; venture capital money being spent by Uncle 
Sam. Venture capital means venture. Venture capital means somebody is 
there who is taking a risk. We do not take risks. We are spending other 
people's money. There is no risk in Washington, putting money into some 
promising program. We just put it in. We are not taking a risk, and 
because we do not take a risk we tend to put money in and never take it 
out. If things do not go well, we put in more. Why, the sky is the 
limit around this place.

  Venture capitalists say: Well, we are going to make a decision, and 
if it does not work out, we are going to pull the plug on that 
decision. We in Washington say we make decisions, and then when the 
squeaky wheel squeaks a little louder, we will make the decision all 
over again even more so.
  That is the problem with this program. That is the problem with the 
idea that Uncle Sam knows best. Uncle Sam does not know best. Let us 
let the country work. Let us let the system work. And the way to do 
that, if you want to spend money on research and development, is to let 
the private sector keep the money it spends on research and development 
because the tax credit will be made available to the private sector.
  Mr. HOLLINGS addressed the Chair.
  The PRESIDING OFFICER. The Senator from South Carolina.
  Mr. HOLLINGS. Mr. President, it is really difficult to respond 
civilly to those comments in the light of the Senate Republican Task 
Force ``Report on Adjusting the Defense Base,'' dated June 25, 1992.
  I ask unanimous consent that the section of that report, titled 
``Retaining our Industrial Base,'' be printed in its entirety in the 
Record.
  Their being no objection, the material was ordered to be printed in 
the Record, as follows:

         Excerpt From ``Report on Adjusting the Defense Base''


                    B. Retaining our Industrial Base

       Retaining and improving the competitiveness of the American 
     industrial and manufacturing base must be a critical goal of 
     both public and private policy over the next few years. While 
     many American companies have improved their productivity and 
     competitiveness, in recent years, and while the export of 
     American goods has increased, the importance of manufacturing 
     industries in the economy has continued to decline.
       The full range of policies that the U.S. government can 
     adopt to strengthen our manufacturing base is beyond the 
     scope of this Task Force's jurisdiction, and the 
     recommendations listed below are not intended to be all-
     inclusive. Instead, the Task Force has confined itself to 
     particular domestic policy proposals that will help our 
     industrial base and at the same time be of some assistance to 
     the individuals and companies that have been producing 
     defense products.

               1. Small Business Innovation and Research

       Small businesses have been the leader in job creation and 
     technology development in this country for many years. To 
     facilitate the role of small businesses in this area, 
     Congress in 1982 enacted legislation requiring that 1.25 
     percent of the research budgets of the largest federal 
     research agencies be awarded in grants to businesses with 
     fewer than 500 employees. Research projects are initially 
     awarded a Phase I grant of up to $50,000. A project is 
     eligible for a Phase II grant of up to $500,000 following a 
     review of its potential. The SBIR program will end in 1992 if 
     not extended by Congress.
       This legislation has proven to be a tremendous success. As 
     of 1990, almost one in four SBIR participants reported 
     successful commercialization of projects six years after 
     receiving Phase II funding. Seventy percent of the 
     participants were businesses with fewer than 30 employees at 
     the time of their Phase I award.
       The Task Force recommends reauthorizing the SBIR program 
     and increasing the set-aside from 1.25 percent to 2.5 
     percent. In addition, consideration should be given to 
     increasing the maximum amount of the Phase I and II awards.

                         2. Aerospace Programs

       The Task Force believes that the important programs of the 
     National Aeronautics and Space Administration (NASA) need to 
     be adequately funded. Four programs, for which President Bush 
     has recommended significantly increases within the non-
     defense discretionery spending caps, deserve particular 
     mention.
       Space Station Freedom stands as one of the most promising 
     examples of a federal program that cultivates dual-use 
     technologies. The Space Station already offers the valuable 
     opportunity for us to discover how and why human beings can 
     live in space over long periods of time. It also has the 
     potential to uncover unknown atmospheric impacts on weather 
     patterns and soil quality, give doctors and technicians new 
     insights into how medicine might cope with deadly diseases, 
     and provide access to lighter and stronger components for 
     manufacturing activity.
       NASA's Aeronautics Research and Technology programs provide 
     support for key technologies such as aerodynamics, high speed 
     propulsion materials, and high performance computing. The 
     President recommended a $73 million (13 percent) increase in 
     this program for FY 1993.
       The President also recommended a $24 million (16 percent) 
     increase for NASA's Commercial Programs, including increased 
     funding of the 16 Centers for the Commercial Development of 
     Space. Finally, a $18 million (7 percent) increase was 
     proposed for NASA's space technology programs, including 
     increases for communications technology and Earth-to-orbit 
     transportation.

         3. R&E Tax Credit/Educational Assistance Tax Deduction

       The R&E tax credit provides a tax credit to businesses for 
     their research and experimentation expenditures. This tax 
     credit has been critical to maintaining the worldwide lead of 
     American industry in advanced technologies.
       The Employer-provided Educational Assistance tax exclusion 
     permits individuals to exclude from their taxable income 
     employer-provided educational assistance for upgrading their 
     skills and training. This deduction could be of particular 
     utility to employees of a defense contractor which needs to 
     retrain its workers as part of an effort to diversify or 
     expand into commercial markets.
       Both the tax credit and the exclusion have received 
     repeated temporary extensions to prevent them from expiring. 
     The latest extension of six months expires on June 30, 1992. 
     The Task Force recommends that both of these provisions be 
     made a permanent part of the tax code or, at the very least, 
     be extended for a period of five years to encompass the 
     period of the defense build-down. A permanent or lengthy 
     extension is desirable since it would bring some stability to 
     this area of the tax code and facilitate long-range planning 
     by businesses.

                            4. NIST Programs

       The Task Force endorses two programs of the National 
     Institute of Standards and Technology (NIST) as important to 
     the effort to promote technology transfer to allow defense 
     industries to convert to civilian activities. These programs 
     are the Manufacturing Technology Program (MTC) and the 
     Advanced Technology Program (ATP).
       During FY 1992, $15 million is available for the MTCs, and 
     the President has requested $17.8 million for FY 1993. MTCs 
     are designed to enhance American manufacturing 
     competitiveness by improving the level of technology used by 
     small and medium sized companies. They serve as regional 
     centers of information for these firms and also assist in 
     workforce training to allow for the adoption of advanced 
     manufacturing technology.
       The ATP is funded at a level of $49.9 million in FY 1992, 
     and the President requested $67.9 million for FY 1993. This 
     program provides grants to industry for the development of 
     pre-competitive generic technologies. Current projects 
     include research and development in such areas as data 
     storage, X-ray lithography, lasers, superconductivity, 
     machine tool control, and flat panel display manufacturing.

                  5. Manufacturing Technology Programs

       The Task Force supports increased funding for the 
     manufacturing technology (MANTECH) programs in DOD. History 
     has shown that MANTECH programs often return the value of the 
     initial investment many times over through lowered production 
     costs or improved equipment performance. As the new 
     acquisition strategy places greater emphasis on research and 
     development at the expense of production, defense firms can 
     be expected to invest less in technologies to improve their 
     manufacturing process. Over time, this lack of investment 
     could provide a significant barrier to the application of new 
     technologies in weapons programs. Therefore, substantial 
     increases in DOD investment in MANTECH will be necessary over 
     the next five years. Additional funds should be provided 
     above the $138 million requested by DOD for FY 1993. The Task 
     Force believes that, for such an investment to be effective, 
     MANTECH funds should be expended on projects that are 
     selected competitively on the basis of merit.

                  6. Manufacturing Extension Programs

       In section 824 of the FY 1992 Defense Authorization Act, 
     Congress provided authority to the Secretary of Defense to 
     support regional, state, local, and other efforts aimed at 
     providing manufacturing technology services to small 
     businesses. $50 million was authorized, but no funds were 
     appropriated. The Task Force also notes that there are 
     ongoing efforts to create such programs in other federal 
     agencies; for example, $1.3 million was appropriated to the 
     Department of Commerce in FY 1992 for state technology 
     extension programs. The Task Force recommends that any DOD 
     role in this area should be limited to the support role 
     envisioned by section 824 to reduce duplication among 
     programs conducted by state and local governments and federal 
     agencies.

             7. Advanced Manufacturing Technology Transfer

       The Task Force recommends use of the existing network of 
     DOD maintenance depots (including shipyards) as sites to 
     develop, test, evaluate, validate, and certify advanced 
     manufacturing technologies for direct application to current 
     manufacturing functions at the facility. Existing MANTECH 
     procedures should be used in the identification, selection, 
     and procurement of such technologies, to include emphasis on 
     their dual-use features. The maintenance depots could seek to 
     bring the technologies to the stage where they can be applied 
     to existing manufacturing problems, creating an incentive for 
     private sector investment in relatively risk-free, high-
     productivity equipment. The depots should observe MANTECH 
     practices in encouraging industrial participation in the 
     transfer of such technology from the laboratory to the 
     factory floor.

                       8. Manufacturing Education

       One of the key limitations to building a competitive 
     manufacturing base has been the lack of education programs 
     emphasizing manufacturing and production process engineering. 
     To date, a few models have been developed by universities 
     working with local manufacturing firms to structure 
     integrated multi-disciplinary programs involving a 
     significant work-experience component.
       In order to foster a greater number of such programs, the 
     FY 1992 Defense Authorization Act authorized $25 million to 
     fully fund DOD participation in ten existing or new 
     university programs for manufacturing engineering education. 
     A condition for an award is that at least 50 percent of 
     funding be provided by non-federal participants in the 
     program and that the program have the prospect of being fully 
     funded by non-federal sources within three years. The Task 
     Force supports a continuation of this program as an effective 
     means of significantly increasing the number of well-trained, 
     fully-qualified engineers, managers, and teachers entering 
     and supporting the manufacturing workforce. The benefits will 
     accrue to the defense as well as the commercial industrial 
     base.

                9. Environmental Research and Education

       The Task Force is aware that a major obstacle in the 
     process of site environmental clean-up is that there are not 
     enough trained professionals in the environmental sciences. 
     The Task Force therefore recommends that legislation be 
     enacted that will establish programs at universities in the 
     United States in the environmental sciences for men and women 
     with prior training in hazardous waste management and 
     radioactive materials through the Departments of Energy and 
     Defense to create a cadre of environmental scientists, 
     technicians, and engineers. This will not only provide 
     additional, needed professionals in this area, but will help 
     provide productive employment for those individuals now 
     working on the U.S. nuclear weapons programs.

  Mr. HOLLINGS. Mr. President, it says here:

       The formation of the Senate Republican Task Force on 
     Adjusting the Defense Base was announced on April 15, 1992, 
     by Senate Republican Leader Robert Dole.
       Senator Warren Rudman was named as Chairman of the task 
     force. Other Members appointed to the task force were Senator 
     Hank Brown, Senator William Cohen, Senator John Danforth, 
     Senator Pete Domenici, Senator Orrin Hatch, Senator Nancy 
     Kassebaum, Senator Trent Lott, Senator Richard Lugar, Senator 
     John McCain, Senator John Seymour, Senator Ted Stevens, and 
     Senator John Warner.

  And amongst other portions of this particular report, it has, on page 
24, subsection 4, NIST Programs, and I read:

       The task force endorses two programs of the National 
     Institute of Standards and Technology as important to the 
     effort to promote technology transfer to allow defense 
     industries to convert to civilian activities. These programs 
     are the Manufacturing Technology Program and the Advanced 
     Technology Program.

  Mr. President, these are the programs which are the focal point of S. 
4. Specifically, we have sort of married up with the rich uncle. They 
got $40 billion for Defense; this is a modest $1.4 billion. Yet, like 
Chicken Little, they are hollering that the sky is falling. This is 
sheer nonsense.
  The Department of Defense has $40 billion of the $70 billion, and we 
have had conversion studies here by both Republicans and Democrats. The 
distinguished Senator joined in this particular report and said: Get it 
out of Defense and put it in civilian. Here we are doing it. Here is 
where we take over one-half of the cost of administering these ongoing 
programs.
  TRP, Arkansas deployment projects; Arkansas Rural Enterprises; 
Marlton, AZ, TRP employment projects; Maricopa County Community College 
District; California links in Hawthorne, CA, to extend extensions; 
Field Agents Institute specific market identify; TRP deployment 
projects; California Manufacturing Technology Center; IRTA in Santa 
Monica--on and on; Colorado, the links at Fort Collins to provide 
national interactive telecasts on competitive manufacturing 
technologies and techniques; the Mid-America Manufacturing Technology 
Center at Fort Collins; the National Technology University at Fort 
Collins; and in Connecticut, the Manufacturing Outreach Center.
  Delaware; we have some in Georgia; the TRP deployment projects; 
Illinois; Iowa, the Manufacturing Outreach Center; the Manufacturing 
Center there in Kentucky; the TRP deployment projects, Maryland, 
Massachusetts--going right on down the list: Michigan; we come to 
Minnesota; Missouri; Kansas City, MO, to provide product development 
and hard manufacturing assistance to small manufacturers in Missouri, 
Kansas, and Colorado via an electronically linked network of private 
industry, university, and Federal laboratory technology providers.
  It is absurd to speak of S. 4 as some new departure, some new 
philosophy. Come on; come on now.
  TRP in Missouri, deployment project; Dematech; Intercorp; Missouri 
Enterprise Business Assistance Center; Rolla, MO; Mamtech; Southern 
Missouri regional office; one in Rolla, MO--on down the list--Nebraska; 
New Mexico; New York; Oklahoma; Oregon; Pennsylvania; South Carolina is 
one, the TRP deployment project of Columbia; Tennessee; Texas; 
Virginia; Washington; West Virginia; Wisconsin.
  These are the defense, already instituted programs of the 
manufacturing extension partnership, the very partnership that was 
called for by the distinguished Senator back in June 1992. Come on.
  We all have been hearing that. We marry a rich cousin; try to get a 
little tidbit of Defense's $40 billion. You get $1.4 billion by 1996. 
You have the figures that were so dramatically enunciated here right 
this minute. It is $726 million. So 2 years out, you have doubled it, 
taking over these partnerships to the tune of $1.478 billion. We hope 
to get seven new manufacturing centers.
  This is what has been done by the majority here. That is exactly what 
has happened. If you carry it forward, the amendment of the Senator 
from Missouri, where he says just cancel out the money. Here it is.
  Have you ever heard of an amendment like this? I have been here for 
several years now. I never heard of this one. Here's what it says:

       Notwithstanding any other provision in the 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.

  We do not need an amendment on this bill for the Committee on Finance 
to consider a research and development tax credit. They can consider 
the $1.6 billion that they had at one time to take our bill. It only 
has $170 million over 2 years; $70 million if we have it. That will not 
get any kind of tax credit going. But it is totally unnecessary and 
totally unconstitutional.
  The distinguished Senator, as a member of the Finance Committee, 
knows it. I do not know what the game is here. They get up and say, 
``Well, this is all new; we have a new philosophy,'' yet he called for 
it years ago, he voted for it unanimously years ago, he voted for it 
last year. And then he came to me and said now, at the beginning of the 
year, ``I don't like what happened in December with respect to 
subsidies on aircraft.''
  Well, we know what he thinks about subsidies on aircraft because he 
says right on with it. He has his argument, but he has his bill, S. 
419.
  Mr. President, this is to provide for enhanced cooperation between 
the Federal Government and the U.S. commercial aircraft industry and 
aeronautical technical research, development, and commercialization, 
and for other purposes.
  It says in here including the Department of Defense. Earlier the 
Senator said, ``Well, I was at a meeting this morning, and we had the 
president of Boeing. And I asked the president of Boeing, `Did the 
Department of Defense have anything to do with technology and civilian 
aircraft?' And he said, `No.'''
  Well, come on. You can keep on saying no. That is absolutely false. 
He put in a bill that gets it going. Going further, under paragraph 13 
on page 4, such Government-industry consortium is what he is trying to 
form, like Sematech. For the clarification of the Members, he says in 
section 11, Federal assistance, financial assistance to the 
semiconductor industry consortium, known as Sematech has been 
successful in improving the competitiveness of the U.S. semiconductor 
industry.
  I tried to help the textile industry, and he voted against it. He got 
into the Finance Committee, and I worked with him on semiconductors, 
because I thought we ought to do that. There is no new philosophy to 
it. We know the Senator believes in the philosophy for semiconductors.
  Reading further, trying to follow the model that the Senator believes 
in, a philosophy for aircraft, such a Government-industry consortium 
should focus its efforts on research, development, and 
commercialization of new aeronautical technologies and related 
manufacturing technologies as well as the transfer, Mr. President, and 
conversion of aeronautical technologies developed for national security 
purposes--transferred to commercial applications for large civil 
aircraft. He calls it a new one when he writes it in his own bill as of 
February 24 of last year. That is over a year ago. But now all of a 
sudden it is a new philosophy. Sooey pig, come for the money, and all 
that nonsense. Come on.
  It goes right on down here. The U.S. commercial aircraft industry, 
developing an aeronautical technology consortium. He goes further about 
this Department of Defense that he talks about, and they never used the 
technology. On page 8, section 4, it says: ``The President shall 
establish an aeronautical technology program which shall''--paragraph 
3--``promote to the maximum extent practicable the transfer and 
conversion to commercial applications of aeronautical technologies 
developed''--past tense--``for national security purposes.'' And on and 
on throughout the bill.
  He talks about the $70 million that we recommend. We go from this 
year at $40 million. We got $40 million. That is 1994. This is where we 
are. But here in his own backyard, the Advanced Systems Hardware Flash 
Program was just awarded to McDonnell Douglas in a bid. McDonnell 
Douglas Aerospace proposes $42.9 million fly-by-night Advanced Systems 
Hardware Flash Program over 24 months to develop vital components 
critical to making fly-by-night and power-by-wire technologies viable 
for commercial and military aircraft.
  Now, McDonnell Douglas, the Missouri employer, the largest out there, 
believes in publicly supported technology development programs, as do 
2,800 other applicants on this particular score over there at the 
Department of Defense.
  So here we have a program going that he does not want to double. We 
have $40 million for all of these particular programs this year on 
extension, yet here is one little contract under that $40 billion over 
there in DOD in his backyard for $42.9 million. But now we are on the 
floor, and he dares to characterize S. 4 as a runaway program and a new 
venture and new philosophy. It is hard to treat this thing seriously, 
because we worked with the Senator for 3 years on the thing, and he has 
been recommending it. There it is recommended in the Republican task 
force conversion. Everybody knows what we are trying to do. We are 
trying to get more centers.
  It has been announced by the administration that they are hoping to 
get 100 centers by the end of the century. Japan already has 170 of 
these centers. We are behind the curve playing catchup ball. He acts 
like it is an extravagance when we take over in the management 
partnership of these defense programs. And then he comes around and 
talks about a new philosophy. This is new, he says, because we have 
some more money. I hope we will increase it. This is a pittance. You 
can compare this to the size of agriculture programs, and the 
distinguished Chair is familiar with that. They have an Agricultural 
Export Promotion Program of some $900 million. Sunkist Lemon got a 
$17.9 million program just to promote the sale of lemons. I tried my 
best to sustain the Tourism Program in America at $17 million, and the 
country of Jamaica spends more on tourism promotion than that. Jamaica 
spends more than we do. But when we compare it to agricultural 
research, to NASA research, compare it to DOD research, and when we 
compare to NIH, National Institutes of Health, biomedical research, we 
come back here and it just helps more business.
  Heavens above, he says this is a new philosophy. But he recommended 
it himself, he himself voted for it.
  He says he does not like the GATT treaty. I do not debate the GATT 
treaty here.
  Heavens above, come, come now, let us move on with this program and 
not just take an amendment when the debate is ready, or completed. I am 
ready to move, obviously, and quickly to table the Danforth amendment, 
which is the pending question, because we have set aside the Cochran 
amendment, a matter to be worked out, as I understand it, from the 
Senator from Mississippi and the Senator from Ohio. If they can work 
that out, fine business.
  But right now, these maneuvers threaten to just kill the bill. If 
there is further debate, fine business, but I am prepared to move to 
table. I do not want to be presumptuous here.
  Mr. DANFORTH. Mr. President, just a few brief points. I just do not 
think that it is correct to say that this is just more of the same and 
that we voted on all this before, when the 1994 appropriations of $526 
million are ballooned into an authorization for $1.370 billion in 1995 
and $1.478 billion in 1996.
  There is nothing that any Senator has ever done that compels the 
Senator to feel that he or she must go along with this major advance in 
these programs. The so-called ATP program, taking it from $199 million 
to $575 million in a 2-year period of time is not just what we have 
always been for. Nobody that I know of has ever written a report or 
been on a commission or anything else that has said, well, let us take 
the Office of Under Secretary of Commerce and increase that by 133 
percent over a 2-year period of time; or create an SBA pilot program 
venture capital scheme and go from nothing to $50 million a year. We 
have not been voting for that or approving that. That is new. It is 
different. It is a change in policies.
  Now with respect to Aerotech--I am repeating myself, but again to try 
to explain the idea. I think it was a mistake for our Government, then 
the Bush administration, to agree with the European Community to green 
light or accept certain development subsidies for aircraft. I believe 
that what has happened with Airbus is outlandish. Airbus should not 
even be in business. It has never made any money. It is kept alive by 
subsidies and because it has been kept alive by subsidies, Airbus now 
has a third of the commercial aircraft manufacturing business in the 
world.
  So my view is that we should press countervailing duty cases under 
the trade laws against the Airbus subsidies, not permit them to 
continue to do this. That is my recommendation.
  The Bush administration agreed to green light certain subsidies. My 
response to that was to introduce two bills. My chairman has seen fit 
to introduce only one of the two into the Record, but they were 
alternative proposals. One proposal, the one that I happened to prefer, 
was to proceed with the countervailing duty case against Airbus. The 
second was, if we were not going to do that, we were not going to have 
a countervailing duty case against Airbus, then if you are not going to 
enforce the subsidies code, you better join them or you are going to 
lose your whole industry.
  That was the purpose of Aerotech. It was not that the Senator from 
Missouri had some great delight in launching into new ventures of 
industrial policy. It was that we have already agreed with an 
industrial policy performed by the Europeans, and we signed off on it 
in an agreement; and, if we are going to do that, we better join them 
or we are going to see the ruin of a major industry in the United 
States.
  I feel the same, as a matter of fact, about Sematech. If other 
countries are using unfair trade in order to gain advantage over the 
United States, we have to act. But to respond to what I consider to be 
unfair trade practices is one thing. To launch out into a new subsidy 
program is quite another.
  Am I concerned by the GATT agreement that has been negotiated? Yes, I 
am. The reason I am concerned is that I am concerned that Airbus is 
going to be replicated all over the world in industry after industry. 
What we have negotiated in the GATT agreement is accepting certain 
subsidies for research and development.
  In research and development, especially significant is the 
development subsidy. The vice president of Boeing, who testified today, 
said there is no way that we could green light up to 50 percent of 
development subsidies in the aircraft industry without having a trade-
distorting effect. We are inviting trade-distorting effects all over 
the world.
  (Ms. MOSELEY-BRAUN assumed the chair.)
  Mr. DANFORTH. If we are going to do that, then I would say, Madam 
President, we do not have any option. Then the Senator from South 
Carolina is absolutely correct. If the trade laws are not going to 
amount to anything, if they are not going to be enforced, if 
countervailing duties are not going to be useful anymore, if the rest 
of the world is going to pick off industry after industry by subsidy 
and we have tied our hands and said that we can no longer proceed with 
countervailing duty cases because these subsidies have been green 
lighted, if that is the state of affairs, then either we are going to 
lose out one industry after another or we were going to get into the 
subsidy game big time. That is the problem with this trade agreement.
  It may turn out to be the $2.8 billion is a pittance. It may turn out 
that to keep up with the Joneses, we are going to have to do much more 
than this. But let us not be the leaders in this enterprise. Let us not 
be the world leaders in subsidies.
  What was said by a memorandum of the Department of Commerce in 
connection with the trade negotiations is that, if we start green 
lighting development subsidies, the United States has committed itself 
to be a leader in subsidies and our Government pressed that change in 
the subsidies code in the GATT agreement. And if that stands, if the 
GATT agreement truly says that henceforth 75 percent of research and 50 
percent of development subsidies by Government are permissible and that 
other countries cannot countervail against them and cannot defend 
themselves against them, then the only way we will be able to defend 
ourselves is to get into the subsidy business ourselves.
  But we are taking the lead here. It was our Government that made the 
point in Geneva that we should green light subsidies, and it is our 
Congress that is now proceeding with S. 4 to provide the subsidies in 
order to get the job done. It is one thing to respond to unfair trade 
practices and to do the best you can to save your soul. It is quite 
another thing for the Government of the United States to be the leader 
in subsidies, to say it in our memoranda that, if we agree to green 
lighting, we have committed ourselves to be the leader in subsidies and 
then at the same time to proceed with S. 4, which is a major step 
forward in Government subsidies for research and development.
  I think it is bad policy. I think it is bad policy. I am making a 
policy argument. I am not making an argument rooting through past 
statements that Senators have made, personal arguments about what 
someone did or voted for way back then. I am saying that as a matter of 
policy this is new and it is consistent with the position we took in 
the trade talks and it is consistent, absolutely consistent, with the 
Department of Commerce memorandum, and it is part and parcel of a new 
relationship between the Federal Government and industry. And it is 
going to happen worldwide.
  I do not want us to do it blindly. I do not want us to do it with 
everybody saying, oh, well, you know, we have just done it 
incrementally, we have just done it step by step. We thought, well, S. 
4 seemed reasonable. I mean, everybody is for science. That is 
reasonable. And trade agreements, everybody likes trade agreements. 
That seems reasonable. And then we wake up some morning and someone 
said, why did not anybody warn us that subsidies are coming out of our 
ears? I am here to warn us.
  That is what I am trying to do. That is the point of this enterprise.
  If we decide that we are going to get into the subsidies business in 
this big way, let us at least do it as a deliberative act. This is a 
deliberative body. Let us make it a deliberative act.
  Yes, we have debated it. Yes, we decided to do it. Yes, we really 
want to green light subsidies on an international basis. Yes, we really 
want research and development spending by Government and industry to be 
the new order in international trade. Yes, we really want to create 
venture capital funds for the Government to spend on selected 
industries that somebody in Government picks out. Yes, we really want 
to expand the Hollings centers from $30 million to $100 million over 2 
years, and on and on and on. Let us do that deliberately, not some 
passive, ``Well, nobody ever talked about it,'' or ``Nobody ever told 
us.''
  I just have one final point to make.
  The point is continually made, ``Why, Japan does it. Japan does it. 
We have got to keep up with Japan.''
  Japan subsidizes, yes, and the Europeans subsidize. We are not Japan 
and we are not Europe. We are just not yet Japan.
  This is a different place. We believe that Government and business 
are not the same. We believe that Government and business are not all 
wrapped up in each other. We believe that there is a little tension 
between Government and business. And some of us believe that the 
economy would be better if Government did not get so entangled in 
business. Now, we are saying, ``Why, Government should get more 
entangled.'' Why? Because Japan does it. We are not Japan.
  Mr. HOLLINGS addressed the Chair.
  The PRESIDING OFFICER. The Senator from South Carolina.
  Mr. HOLLINGS. Madam President, since the distinguished Senator from 
West Virginia wants to speak, I ask unanimous consent that we 
temporarily set aside the Cochran amendment so the Danforth amendment 
would be the subject.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  The Senator from West Virginia.


                           amendment no. 1482

  Mr. ROCKEFELLER. I thank the Presiding Officer.
  It is my general conclusion, having listened to this debate for the 
last several days, that the Senator from Missouri, in fact, does not 
like S. 4 and wants to defeat it and is going to more or less talk it 
to death point by point, section by section.
  I note with interest that in 1967, there was a Federal loan guarantee 
and favorable antitrust review process which encouraged and arranged 
the marriage between McDonnell Douglas and Douglas Aircraft companies, 
which then became McDonnell Douglas, and which is a result of action 
that appeared to be favorable to a very large company in Missouri.
  The Senator has talked about GATT. GATT, of course, has absolutely 
nothing to do with S. 4. We also debated GATT, he and I, this morning 
in the Finance Committee. That was either a useful debate or it was 
not, but it has nothing to do with S. 4.
  The Senator says that we want to copy Japan. I do not want to copy 
Japan. We are not like Japan.
  What I believe we need to do is a better job than we are doing in 
creating high-wage, good jobs for the American people, which is what S. 
4 is all about. And this is precisely why President Clinton has placed 
such high priority on the passage of this bill.
  It is also my general conclusion that the Senator from Missouri, who 
is a very dear and close friend of mine, that he really is not open to 
any sort of arguments on this subject; that his mind is pretty much 
made up; that no matter how much we debate and talk, it will not make 
any difference--the debate from that side of the aisle reminds me of 
pushing the CD into the player and off it takes.
  But I think and hope that there are other Senators and their staffs 
who are listening to this debate. I think this is one of the supremely 
important debates of this year, rivaling health care, which, for me, is 
a significant statement. I hope they will listen to this argument, on 
why S. 4 is important, why this bill is important, why everyone in this 
body ought to vote for this bill.
  We can take its various sections and go at it however we want.
  The United States, Madam President, has a very large investment 
problem. It is not a Japanese problem. It is not a French problem. It 
is not a Tunisian problem. It is a United States problem, and it has 
cost us dearly.
  As a nation, we have systematically underinvested in areas that 
contribute to economic growth, job creation, and the standard of living 
of the people in my State of West Virginia and the rest of America. We 
systematically underinvest in maintaining our physical infrastructure, 
in educating our children, in training our workers, and in 
commercializing our technological discoveries.
  S. 4, which is the bill before us--not GATT, but S. 4--is the 
centerpiece of the President's program on technology and on job 
creation. It focuses on specific elements of this problem we have had 
in not investing in our own country.
  And that problem is called doing too little in keeping up with the 
Joneses or anybody else, but, most importantly, in failing to provide 
enough work for our own people; and doing too little to keep up with 
critical technologies.
  The Department of Defense and the Department of Commerce have agreed 
on the idea that there are approximately 25 critical technologies, 
which nobody disputes. If we do not have them, we will not get into the 
21st century competing with the rest of the world. And we are talking 
about laser optics, we are talking about ceramics, we are talking about 
semiconductors, and all kinds of other essential technologies. The 
point is there is no disagreement, under the Bush administration or 
under the Clinton administration, about what are our critical 
technologies. We have to have them. This bill is, in part, aimed at 
making sure we do as we approach the 21st century.
  So we are doing too little to keep up in critical technologies. And 
there is nobody I think who will disagree that we are doing too little 
to keep up in commercializing the dividends of our very, very fine 
basic research programs. Through these programs, incredible ideals are 
born, but too often they are not turned into applied research, applied 
technology, and then become products that put our people to work. The 
most obvious example of this is what we allowed to happen with VCR's.
  And all of these things contribute to the fact that our people, 
therefore, are not finding the work that they want and should have.
  Madam President, technology matters. That is why S. 4 matters, 
because technology matters. It matters a lot.
  Economic study after economic study has shown a strong relationship 
between technology progress and economic growth and between investment 
and productivity.
  In the 20 years following World War II, the U.S. economy grew at an 
average annual rate of a little less than 4 percent. According to the 
1994 economic report of the President, over 40 percent of economic 
growth over this period was due to advancement in technology. We 
discussed that a little bit this morning in the Finance Committee.
  In the last 20 years, Madam President, U.S. economic growth has 
dropped to an annual rate of about 2.3 percent. Wage growth, 
productivity gains over this period have been anemic compared to 
previous experience with the gains made by other countries.
  The principal reason for this disappointing performance was not the 
lack of will, not the lack of worker motivation or instinct. It was the 
result of a dramatic decline in technology progress on the part of our 
country for which we are responsible.
  Now, why is it that we have failed to benefit fully from technology 
discoveries made in the United States? This is what S. 4, the bill 
before us, is about.
  America is the world leader in discovering new technologies but, as 
the Presiding Officer knows perfectly well, we have done a very 
dreadful job in commercializing and adopting these technologies so that 
they go out to the marketplace providing jobs for our people and 
exports to other countries.
  The main reason for this dismal performance is that we underinvest in 
technology commercialization, product to market --basic research to 
applied research, applied research to product, product to market. That 
is called jobs.
  And we underinvest in technology commercialization because 
intensifying competition has reduced the ability of U.S. firms to 
capture the full returns from their R&D investments. This is a fact of 
recent modern industrial life. Technology is expensive to discover but 
increasingly cheap to disseminate in a competitive global economy.
  U.S. industry is slashing, and has been slashing, research and 
development investment, even though economic and social returns on that 
investment remain high. This is what S. 4 is about.
  Let me cite some examples of this market failure, Madam President, if 
I might. Economist Edwin Mansfield at the University of Pennsylvania 
estimates that the U.S. industry has cut research and development by 15 
percent since 1986.
  This next one fascinates me and scares me. A recent survey by the 
Industrial Research Institute shows that the number of U.S. firms that 
plan to cut research and development spending in 1994 is three times 
greater than those firms that plan to increase research and development 
spending in their companies in this year of 1994.
  IBM has cut its R&D funding from $6 billion to about $5 billion over 
the last 3 years and has reduced its work force by 125,000 employees, 
as we all know, since 1987.
  Digital Equipment Corp. has announced its plans to reduce research 
and development spending in 1994 by 25 percent. Digital Equipment 
Corp., a huge company, I might note.
  AT&T Bell Labs, once regarded as the best industrial research lab in 
the world, has not increased R&D funding in the past 3 years and has 
reduced its focus on long-term R&D in response to competition. In other 
words, it is like the emergency room at the hospital. The most 
important thing, it seems, is the first thing to get cut when you are 
under pressure. So you cut R&D because you cannot prove that you 
absolutely have to have it in order to develop new products. It is all 
very simple to me. If you do not do R&D, you are going to cease to 
invent things. If you cease to invent things at some time you are going 
to cease to make things, and when you cease to make things people do 
not have jobs.
  Industry observers believe the Baby Bell's research and development 
consortium, which is called Bell Corps, may not exist--may not exist in 
5 to 10 years, as competition in telecommunication markets increases.
  Recent studies by a number of respected groups including the National 
Academy of Sciences, Office of Technology Assessment, Council on 
Competitiveness, document the technology investment problem in the 
United States and urge proactive steps by the Government to deal with 
this problem.
  Madam President, I will never forget--and I do not have it with me so 
I cannot hold it up but I will have it printed in the Record later--a 
1992 issue of Fortune magazine, which I think, was entitled ``Wither 
America?'' It asked the question essentially of ``Where are we going?'' 
It surveyed corporate America about what we have to do in our country 
to get our act together, because we were clearly falling behind 
economically back then.
  It polled about 100 chief executives. It covered Bill Gates, Felix 
Rohatyn, the heads of huge companies, and the heads of small companies. 
It was clearly a representative group of industrialists. And it 
included President Bush.
  Person after person after person made the same point--although it was 
not uniform because some people, perhaps like the Senator from 
Missouri, hate Government so much that they do not want anything to do 
with it even though it could help them. There are those people. We 
recognize that and accept that. But person after person in this issue 
of Fortune magazine, which is not exactly the Village Voice, were 
saying, ``We need direction. We want to know where the Government wants 
to go. We do not want the Government to tell us how to run our 
businesses. But we need a sense that the Government recognizes we are 
struggling and that if it is appropriate, they would be there to help 
us.'' It was just one after another after another after another, and 
then they would say very strongly, ``But we do not want them running 
our businesses.'' But it was a cry for help.
  Then you flip back to the first page and there was President Bush. He 
said, basically, I see my job as President as getting out of the way 
altogether; business knows what to do and the further I stay away from 
all of this the better it is for everybody.
  One can debate what was happening in 1992. But I think the American 
people came to the conclusion the American economy was not working, 
they got tired of foreign policy, they started caring about economic 
policy. Foreign policy becomes economic policy under President Clinton 
and S. 4 becomes very important. So I now come to the need for action.
  There is a consensus that the United States has a technological 
investment problem. I hope I have made that clear. And that Government 
policies and programs should promote, where appropriate, technology 
investment. National economic performance and job creation will benefit 
from increasing the level and rate of technology commercialization. The 
debate on S. 4 centers on what specific policies and programs will 
promote technology in the most effective, prudent and efficient way.
  The opponents, of course, to S. 4, argue for tax incentives. ``Put it 
all in the tax credits.'' I remember that, I would say to my 
distinguished senior colleague from the State of South Carolina. I 
think we had that in 1981, where the rule was:
       Let us have personal tax cuts, let us have corporate tax 
     cuts. What will happen is the corporation will take all that 
     money and put it into new plant and equipment, which will 
     create jobs. And then let us give tax cuts to the American 
     people, particularly rich ones--believe me I know--and what 
     will happen is people will take that money and they will put 
     it in savings accounts so there will be more capital 
     available for industry to expand.

  Of course it did not work out that way. We started on a consumer 
binge the likes of which we had never seen before. Corporations took 
their tax breaks and took all that money and started buying up other 
companies and we got into the mergers and acquisition mania and the 
spiral of the 1980's, downward economically. That was very obvious to 
the American people and the people of my own State who did a lot of 
suffering.
  So the opponents for S. 4 are for tax incentives, spending cuts, 
regulatory reform, and they say that is the way we boost the 
competitiveness of American business. We tried this approach during the 
previous three administrations. And it got us into trouble big time. We 
deferred investment. We accelerated consumption. We took on huge debt. 
We went into recession. Why should we go back to that failed 
agenda?
  President Clinton's economic program is working. The economy is 
showing improvement. Why should we change the course? Why not 
accelerate the course?
  My friend from Missouri made quite an interesting statement which 
happened to be entirely false. I refer to when he was talking about the 
venture capital part of this bill which I have worked on for the last 
1\1/2\ years with Larry Pressler and Conrad Burns, who are very 
supportive of this proposal. And the Senator said--I wrote his words 
down when he said it--that ``the Government will make the decisions 
with this venture capital money.'' Wrong.
  Yes, the Government will put in $50 million and private corporations 
will put in $50 million or put in whatever they want to invest. But it 
will be the private sector and the private sector alone that will make 
all the venture capital decisions. The Government will not make any of 
those decisions. That is clearly written in the bill. And to mislead 
our Members who are listening upstairs, or their staff members, in such 
a way is wrong; false; and unhelpful.
  The President considers technology the engine of economic growth. So 
do I. That does not make either he or I particularly brilliant. It just 
happens to be true. It is true. His technology program which S. 4 
embodies--that is what we are here for--calls for Government to work 
with industry where appropriate to develop and commercialize the 
technologies of the future, technologies that will contribute to 
economic growth. The simple point is job creation and higher standards 
of living for all Americans.
  The role of Government in this program is as a partner with industry 
where appropriate, as those executives called for in Fortune magazine--
or a majority of them did. The idea is to promote commercialization of 
tomorrow's technologies that industry by itself cannot or will not be 
able to develop. The need is shown by the trends I just cited about the 
private sector pulling back on research and development.
  The President's economic policy is to compete, not retreat. S. 4 is a 
vital part of that policy, and that is why S. 4 and this debate are so 
enormously important to our people and our future.
  The PRESIDING OFFICER. Who yields time?
  Mr. HOLLINGS. Madam President, I thank my chairman of the Technology 
Subcommittee who has guided this measure through over the past 3 years 
and is totally familiar with it. The distinguished Senator has been 
working on the health programs and several other things. He has been 
spread somewhat. I understand that. I understand his outstanding work 
on the Finance Committee. We are really lucky to have his leadership 
with us on the Committee of Commerce.
  I have been able, since the distinguished Senator from Missouri came, 
to go to the record, and the reason we go to the record is the best way 
to prove that it is not new; that we have taken the distinguished 
Senator's own recommendation. He now says this is a new philosophy. How 
can it be new when his task force, after quite a study over months and 
months, reported in June 1992, almost 2 years ago, that:

       The task force endorses two programs of the National 
     Institute of Standards and Technology, NIST, as important to 
     the effort to promote technology transfer to allow defense 
     industries to convert to civilian activities. These programs 
     are the Manufacturing Technology Program and the Advance 
     Technology Program.

  So he recommended it almost 2 years ago, and then he comes to the 
money. ``Ballooned'' is the word. The only thing that has ballooned is 
his mistakes, and he will have to agree because I am going to give him 
his figures. It is in the report, right here, and the report was almost 
a year ago, June 1993. On page 20, you will see for the year 1995, the 
Senator supported an appropriation there for these amounts in the bill 
of $1.513 billion in 1 year.
  That $1.513 billion was reduced. I knew it. The OMB had cut me back 
because we had to get with the modification that OMB approved. When we 
sent it back to OMB, they actually cut it. They said we are cutting 
back on all programs.
  So while the distinguished Senator supported $1.513 billion, that is 
actually $143 million above what we have now for 1995 in this 
particular bill. If we voted it right in the next 10 minutes, it would 
be $143 million below the 1995 level and $35 million below 1996.
  We never recommended for either of those years. The bill we had at 
that time was for 1994-95. So the relative figure, the one that we can 
compare is the one he supported for the one year, 1995, for the ensuing 
fiscal year, that is $1.513 billion. How do you balloon that when you 
come now and put in the modification for 1995 at $1.370 billion, or 
specifically when you have reduced it a couple hundred million?
  Let us go to the ones he was talking about, the Hollings centers or 
extension centers. He approved then under that 1.5, he approved $220 
million. A moment ago he said, ``Seventy plus 100, it's ballooned to 
170,'' when the Senator himself--that is 2 years, 70 for 1995, 100 for 
1996. He himself voted for 1995 $220 million. Ballooning. There is a 
retraction. There is a reduction. There is no ballooning. We put this 
plan on a diet, and we cut it back. I do not like it. To tell you the 
truth, I wish we could have gotten the amounts we approved unanimously 
in the Committee of Commerce June a year ago, all Republicans and all 
Democrats.
  And there that is, 1.5, but he is out here on the floor. When you 
talk about his own idea and philosophy, you show what his philosophy 
was. When he talks about the figures, he says ``ballooned,'' and we got 
less than what he voted for, substantially less.
  For 1995, this next year, we have in this bill $1.370 billion, which 
is a $143 million cut from what the Senator supported back in June when 
the bill was reported. There is the bill; there is the committee 
report. Those are the facts.
  Now we are really getting jockeyed around here, as the saying goes, 
because we have an amendment and the amendment calls for an 
unconstitutional initiative. Being an expert member of the Committee on 
Finance, he knows that you cannot introduce a research and development 
tax credit in the Finance Committee. You have to wait on the House.
  But it is totally unnecessary. We do not need an amendment on this 
bill for the Finance Committee to consider one. They can consider one, 
they can consider the amounts in this bill, the amounts in everybody's 
bill, the amounts in no bill. It is their total discretion.
  That is a rather facetious amendment at best, and I am prepared, if 
we want to set a time--I discussed moving to table--if I do move, we 
might set a specific time, let us say at 7:10, so there would be 
notification. Excuse me, if one of the Senators wants to talk, we will 
make it a later time. I yield the floor at this time.
  Mr. DANFORTH. If the chairman would like to set a time for a vote, 
that would certainly be very satisfactory to this Senator.
  Mr. HOLLINGS. What is the disposition of the distinguished Senator 
from Pennsylvania? He is on the floor, and I do not want to cut him off 
if he wants to talk on the bill.
  Mr. SPECTER. I thank my colleague from South Carolina. I would seek 
recognition for a few minutes, perhaps up to 10 minutes to speak on the 
amendment.
  Mr. HOLLINGS. Very good. Would it be all right then we can agree to a 
time to vote at 7:10?
  Mr. SPECTER. Madam President, that is agreeable to me.
  Mr. HOLLINGS. Excuse me, we will yield to the Senator to have the 
floor in his own right.
  The PRESIDING OFFICER. The Senator from Pennsylvania.
  Mr. SPECTER. Madam President, I support the amendment made by the 
Senator from Missouri. It is an unusual amendment in that it seeks to 
stop appropriations and then calls for the Committee on Finance to 
consider using equivalent amounts of money to make permanent the 
research and development tax credit.
  The essence of what the Senator from Missouri seeks to accomplish is 
to have the private sector make the determination as to what research 
and development there will be as opposed to having the Government make 
that determination. The Senator from Missouri seeks to have the private 
sector make that decision by holding out the inducement of a tax 
credit.
  The Senator from Missouri has been a very distinguished advocate of 
the market as opposed to a governmental direction of the economy. I 
think that is a sound principle.
  I note from the provisions of the report that there would be 
established under title XII a program to foster the development of 
advanced manufacturing technologies, and title III establishes a 
program for the support of large-scale research and development 
consortium.
  The other provisions of the bill, without going into them in detail 
at the present time, provide for a governmental determination as to 
where this research and development would be directed, and the Senator 
from Missouri seeks to have it done in the private sector, which I 
think is a preferable approach.
  The face of the amendment is curious, to say the least, in that it 
says, ``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.''
  This amendment does not negate the authorization of the bill but says 
only that the amounts authorized to be appropriated shall not be 
appropriated. There is nothing in this bill which contains an 
appropriation. That is to be done at a separate time by the 
Appropriations Committee. And the procedure is that wherever there is 
an authorization it is still a matter of discretion for the 
Appropriations Committee to make the appropriation or not as the 
Appropriations Committee sees fit, and then be acted on by the full 
Senate.
  So I think that technically there could still be an appropriation. 
But the sense of this amendment really says that we ought not to 
appropriate, but that money ought to be handled by the Finance 
Committee with a permanent tax credit for research and development. I 
think that is the preferable way to go. It may be that this amendment 
realistically viewed as a sense-of-the-Senate resolution, that the 
preferable way is to have the tax credit and not have the thrust of 
this bill which is governmental determination of where the research and 
development should be undertaken.
  Knowing the politics of the Senate and having seen amendments like 
this come and be voted upon, the probabilities are very high that when 
the Senator from South Carolina makes a tabling motion, that tabling 
motion is going to be adopted, pretty much on a party line vote. So 
that the likelihood is that this authorization is going to stand, and 
then we will see what happens through the appropriations process.
  But I had discussed this amendment with the Senator from Missouri, 
and I did want to come to the floor for a few minutes, lend my support 
on the principal basis that it is preferable to have the private sector 
make the determination as the Senator from Missouri suggests through 
the tax credit from research and development.
  I might take a moment or two now, Madam President, to commend the 
Senator from Missouri not only on this amendment, but for his general 
approach in the Senate on emphasizing the private sector and opposing 
subsidies and, more broadly, to state that Senator Danforth has had a 
truly distinguished career in the Senate. There is not a more able 
Senator than Senator Danforth, in my opinion.
  I did not come here to praise Caesar, but I think it not an 
inappropriate time to make that comment. There will be ample 
opportunities later to talk about Senator Danforth and other of our 
colleagues who will be departing at the close of this session.
  When Senator Danforth talked to me about this yesterday, I asked him 
when the filing date was in Missouri, because there is still time for 
Senator Danforth to change his mind and stand for reelection this 
November. I have said this to Senator Danforth before privately. There 
is no reason to just speak to him privately or to compliment him behind 
his back. This body will sorely miss Jack Danforth for many, many 
reasons. He has been an extraordinarily thoughtful, constructive and 
productive Senator on many, many lines, on the Commerce Committee, 
where prior to the service of the distinguished Senator from South 
Carolina as chairman, Senator Danforth was chairman, and has worked on 
the Finance Committee.
  There is only one matter that I can recollect where his judgment was 
not impeccable. That is when he opposed an amendment that I offered to 
have a private right of action to stop subsidies and dumping.
  My State, Pennsylvania, was hit very hard more than a decade ago by 
subsidized and dumped goods coming into the United States. And when I 
came to the Senate, one of the first initiatives I had introduced was 
an amendment providing that injured parties could go into Federal court 
to seek injunctions or damages to stop goods coming into this country 
which are subsidized or dumped. At that time, England was subsidizing 
steel $250 a ton. No matter how efficient the steel companies in 
western Pennsylvania were, they could not compete with the subsidy of 
$250 a ton from England.
  Then Japan subsidized steel, and coal was subsidized and glass 
products, textiles and goods were dumped in the United States, which 
means for a few people who may be watching on C-SPAN2, they are sold in 
the United States for lower cost than they are sold in their home 
market, which is unfair trade practice.
  Free trade means the cost of production plus a reasonable profit, and 
the principles of free trade preclude dumping, which is selling in the 
United States, illustratively, cheaper than in the home market where 
the goods are manufactured. And free trade means no subsidies; cost of 
production plus a reasonable profit.
  Aside from Senator Danforth's opposition to that amendment--well, I 
may have disagreed with him on some other amendments from time to time, 
but he has made an outstanding contribution to this body, and I wished 
to take just a minute or two to say that in commenting on what I think 
is philosophically correct.
  I do not know whether Senator Danforth expects to be successful on 
this particular matter at this particular time, but I think the odds 
are against him. But I think it will articulate a principle, and I 
expect Senator Danforth to get a very substantial vote, maybe largely 
along party lines, but it will be meritorious nonetheless. But I do 
believe that his approach on letting the market decide is the proper 
approach, and the essence of this amendment would achieve that 
worthwhile objective.
  I thank the Chair and yield the floor.
  Mr. BAUCUS. Mr. President, I rise today in opposition to the 
amendment offered by my colleague from Missouri, Senator Danforth. As 
coauthor, with Senator Danforth, of S. 666, the Research and 
Development Enhancement Act of 1993, I am committed to the enactment of 
a permanent R&D tax credit with appropriate structural changes to 
address today's business environment.
  However, I also strongly support the provisions of S. 4. Both the 
National Competitiveness Act and a permanent R&D tax credit are 
necessary pieces of legislation. S. 4 is particularly important to 
small companies. It will enable them to find the most advanced and 
commercially viable technologies. Technologies the perfection of which 
was probably bolstered by the availability of the R&D credit.
  The permanent extension of the R&D credit, accompanied by technical 
changes in its application should be debated by the Finance Committee 
in consideration of a tax bill over which it has jurisdiction. It would 
be a disservice to the manufacturing industry in this country to 
prevent S. 4 from moving forward under the promise of someday enacting 
legislation involving the R&D tax credit.
  The National Competitiveness Act extends some of our most successful 
Federal research and development efforts. It builds on the Advanced 
Technology Program, to work with companies developing the most 
promising new technologies and assist with basic research. It will help 
to build the information superhighway And it will do this without 
adding a cent to the deficit.
  I will continue to work with my colleague from Missouri to see to it 
that that R&D credit becomes a permanent fixture in the Internal 
Revenue Code. However, it does not make sense to rob Peter to pay Paul. 
It is for that reason that I urge my colleagues to defeat the amendment 
by Senator Danforth should it be voted on, and to move quickly to pass 
S. 4.
  Mr. HOLLINGS. Madam President, it appears now that if we make that 
motion on tabling, we can set a time, and it has been cleared on both 
sides, for 7:20. Thereupon, the distinguished Senator from Mississippi 
has worked out his particular amendment, to be recognized, and then the 
distinguished Senator from West Virginia wanted to be heard.
  So, Madam President, I move to table the Danforth 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. I ask unanimous consent that the vote be set at 7:20 on 
the tabling motion.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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