[Congressional Record Volume 140, Number 26 (Thursday, March 10, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: March 10, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                      NATIONAL COMPETITIVENESS ACT

  The ACTING PRESIDENT pro tempore. Under the previous order, the 
Senate will now resume consideration of S. 4, which the clerk will now 
report.
  The bill clerk read as follows:

       A bill (S. 4) to promote the industrial competitiveness and 
     economic growth of the United States by strengthening and 
     expanding the civilian technology programs of the Department 
     of Commerce, amending the Stevenson-Wydler Technology 
     Innovation Act of 1980 to enhance the development and 
     nationwide deployment of manufacturing technologies, and 
     authorizing appropriations for the Technology Administration 
     of the Department of Commerce, including the National 
     Institute of Standards and Technology, and for other 
     purposes.

  The Senate resumed consideration of the bill.

       Pending:
       Simpson amendment No. 1486, in the nature of a substitute.

  Mr. MACK addressed the Chair.
  The ACTING PRESIDENT pro tempore. The Chair recognizes the Senator 
from Florida [Mr. Mack].
  Mr. MACK. Mr. President, the amendment that was offered, or the 
substitute offered by Senator Simpson, recognizes that only the free-
market system in the private sector can determine what technologies 
will be economically viable in the next century. Japan has realized 
with the failure of the old technology in high-definition television in 
which their Government sunk billions of dollars--and I heard as high as 
$21 billion--that industrial policy does not work.
  We need to remove the artificial impediments of needless regulation 
and keep the cost of capital in check in order to help our businesses 
be competitive internationally. This amendment recognizes this and 
allows the private sector in the market system to choose the winners 
and losers in the next century.
  Small businesses are the backbone of the U.S. economy. It is my 
understanding that small businesses produce about 40 percent of GDP and 
50 percent of the total output of the private sector. In order for 
small businesses to stay competitive, they need access to a steady flow 
of inexpensive capital.
  One of the largest sources of both short-term and long-term capital 
for small businesses is the banking industry. We need to ask ourselves 
what can we do to make sure that this flow of capital is not impeded.
  I believe the one thing that we can do to help this capital flow is 
to reduce the crush of regulatory burden that our financial 
institutions are operating under and get them back into the business 
they were designed for: Providing credit to our Nation's businesses and 
consumers and keeping the economy going.
  Credit to the economy is like oxygen to the body. We need to get our 
Nation's financial institutions focusing on providing credit and not on 
complying with needless Government regulations.
  Year after year, Congress has passed well-meaning legislation that by 
itself may not impose significant regulatory burdens. While no single 
regulation is most burdensome and most have meritorious goals, the 
aggregate burden of the litany of banking regulations ultimately 
affects banks' operations and their ability to serve customers 
effectively.
  This aggregate burden has caused many banks, especially community 
banks, to reduce the number of employees serving customers because 
those resources must be devoted to compliance. One effect of 
accumulation of regulation is the additional staff devoted entirely to 
compliance.
  In addition, a study released on December 19, 1992, by the Federal 
Institutions Examination Council, included an estimate of regulatory 
compliance that was as high as $17.5 billion per year. If this cost was 
reduced by just 25 percent, that is approximately $4.4 billion that 
could be added to bank capital each year to support tens of billions of 
dollars in additional lending.
  I believe it is important to reduce this crush of Federal regulation 
and reverse the tide of new, unnecessary burdens imposed on these 
institutions. The provisions in this amendment were taken from S. 265, 
the Economic Growth and Regulatory Paperwork Reduction Act of 1993, 
introduced by Senator Shelby and myself and cosponsored by a total of 
51 Senators.
  These provisions were put together in consultation with banking and 
small business experts so as to remove the impediments to lending and 
to keep the economy moving. They are intended to ease some of the 
unnecessary costs to consumers, eliminate micromanagement of financial 
institutions, and eliminate those regulations that do nothing more than 
create paperwork and increase cost to our Nation's borrowers.
  These provisions leave in place, with little or no modification, the 
strong supervisory provisions enacted in recent years. These include 
risk-based premiums, strong capital rules, enhanced authority to 
restrict and close troubled financial institutions, strong supervisory 
sanctions, strong criminal sanctions, FDIC back-up authority, and 
limits on brokered deposits.
  If we are serious about economic competitiveness, we need to move 
away from the Federal Government dictating the winners and losers in 
our dynamic economy and toward allowing the private sector to act 
without unnecessary Federal impediments.
  I urge my colleagues to support this substitute. Thank you, Mr. 
President. I yield the floor.
  Mr. HOLLINGS addressed the Chair.
  The ACTING PRESIDENT pro tempore. The Chair recognizes the Senator 
from South Carolina [Mr. Hollings].
  Mr. HOLLINGS. Mr. President, I have a young staffer that was good 
enough to pick me up early this morning so I could be here at the 
opening. He is a brilliant young man. He asked a lot of questions.
  He asked, ``Senator, what aspect of the bill will we be discussing 
today?'' I said, ``None; no aspect.''
  We have been on the bill 3 days, and there are still no amendments 
relevant to this bill. Oh, yes, we have had plenty of utterly 
nongermane amendments. Now we are into banking regulations.
  I have never seen a more shabby treatment of a serious piece of 
legislation in all the years I have been in the Senate. It is 
absolutely ridiculous. We have had an amendment with regard to 
pesticides. We have had an amendment relative to postal affairs. We 
have had an amendment relevant to the General Agreement on Tariffs and 
Trade--the same people who advocated fast track consideration with no 
amendments for GATT, they now want to amend GATT on my bill. Excuse me, 
our bill. This is a unanimous bill, bipartisan.
  They argue that industrial policy does not work. In truth, we have 
had industrial policy since the founding of this Republic, and it has 
worked wonderfully. We also have an industrial policy with respect to 
our standard of living. In the body politic, supported by Republicans 
and Democrats, we have legislated Social Security, Medicare, Medicaid, 
unemployment compensation, clean air, clean water, plant closing, 
parental leave, safety, safe working place, safe machinery. You can go 
down the list.
  We legislate the fine standard of living. We put these burdens on the 
back of industry, then we turn around and say to American business that 
it needs to come in off the golf course; they have got to get more 
competitive; they have to invest for the long-term.
  Well, this bill goes right to that need: investment for the long-
term. We found out that the so-called venture capital alluded to by the 
distinguished Senator from Missouri is not found in high-technology. 
The investments in high-technology are too long range.
  Oh, they will invest in Wal-Mart. They will invest in 
telecommunications. They will get into various other ventures. But 
there is no venture capital for high-technology because it is on the 
long payout, and if any begin to score, the Japanese are in here 
cleaning our clock in short order.
  So we found, as a matter of industrial policy, after 10 years of 
industrial policy vis-a-vis the savings and loan; the industrial policy 
of aircraft deregulation, which has got all the U.S. companies begging 
their employees to please take over and help; the industrial policy of 
communications, with the deregulation of the FCC, Federal 
Communications Commission, with all the violence and crime, four-letter 
words and otherwise.
  My counterpart, the ranking member, was one of the leaders of the 
fight to institute what we called Sematech, industrial policy for 
semiconductors, a policy that has worked. He then put in a bill for an 
industrial policy for the aircraft industry modeled after Sematech. Now 
he presumes to say that we are embracing a new philosophy with S. 4. 
This is obviously not new--it has been discussed with him in specific 
for 3 years and with his approval. He has been supporting it for 3 
years. We voted this bill out unanimously in 1992, unanimously last 
year from the Committee of Commerce. So this is not any new philosophy 
at all. It has been tried and true and found, and proven. I refer to 
President Reagan's own competitiveness commission, the Young Commission 
back in 1985, which said:

       There is not enough for research and development with 
     competitiveness as its goal.

  And we can go on and on referring to it.

       If we are comparing our technological position to that of 
     our trading partners, then it is misleading to include all 
     government funded R&D. Given the limited amount of Federal 
     funds spent on many areas of commercial potential, the 
     question of how government manages its R&D becomes a critical 
     issue.
       Perhaps the most glaring deficiency in America's 
     technological capabilities has been our failure to devote 
     enough attention to manufacturing or process technology. It 
     does us little good to design state-of-the-art products if 
     within a short time our foreign competitors can manufacture 
     them more cheaply. The United States has failed to apply its 
     own technologies to manufacturing. Robotics, automation, 
     statistical quality control were all first developed in the 
     United States but in recent years they have been more 
     effectively applied elsewhere.

  Then coming to the statement, of course, by the Secretary of Commerce 
at that time, Secretary Mosbacher:

       Emerging technologies have the potential to create a 
     multitude of new products and services and to substantially 
     advance productivity and quality. This report identifies 12 
     emerging technologies in 4 major categories of featured 
     combined U.S. market potential of about $350 billion in 
     annual product sales by the year 2000 in a world market 
     approaching $1 trillion. If the United States takes maximum 
     advantage of this economic potential of emerging 
     technologies, further growth in the United States standard of 
     living should result. However, competition from the world's 
     other two economic power centers, Japan and the European 
     Community, is strong. If current trends continue, this study 
     indicates that before the year 2000 the United States could 
     lag behind Japan in most emerging technologies and trail the 
     European community in several of them.

  Those are the words of Secretary Robert Mosbacher, the Secretary of 
Commerce under President Bush. There's no hesitation about industrial 
policy in those words.
  Since they did not get complete support, the group under President 
Reagan, the Young Commission, regrouped again as the Council on 
Competitiveness headed up by John Young of Hewlett-Packard, former 
chairman. George Fisher, and others. They concluded, ``The U.S. 
position in many critical technologies is slipping, and in some cases 
has been lost. U.S. public policy does not adequately support American 
leadership in critical technologies.'' And on down the list, Mr. 
President. We will get into that very thoroughly.
  But the point to be made here is this is not a new philosophy. 
Leaders of American industry, particularly in the field of technology 
say, ``Wake up America. Let us get competitive.'' As a result of our 
hearings over a 3-year period, we have come forward again with a bill 
that has already been passed unanimously. Yet we still hear the charge 
that, wait a minute, we are starting a new philosophy. Nonsense, this 
is the same philosophy of the past 8 years. We had best leadership of 
America's industry saying let us go now. Let the Government invest 
smartly. Let us make sure it is not political, but businesslike, 
specifically instituted by business, no political or governmental 
picking of winners and losers, rather the industry itself picking.
  It has to be a serious selection in that the industry has to put up 
the majority share, and our experience over the past couple of years is 
that nearly 70 percent, the majority of the money, has come from the 
private sector. And these investments have to withstand peer review, 
merit selection.
  On that basis we move forward. We have a program already at work. But 
this is the outdated authorization, including an embellishment with the 
National Science Foundation, with the National Information 
Infrastructure championed by the distinguished Vice President, Mr. 
Gore, and several other measures.
  On the amount of money, opponents have tried to falsify the figures, 
and say, ``Wait a minute, these figures, this is not what we 
discussed.'' The funding has ballooned, as they say it; silly language 
of that kind, when the Senator is using the language and actually voted 
for more money for the next fiscal year, $143 million more than what is 
in this bill for fiscal year 1995, and voted for $35 million more than 
what is in this bill for 1996. We went to OMB and they retrenched and 
cut back. So what was voted for has not been ballooned, but rather cut.
  I do not know what the game is. It is a political game. It is not a 
factual game. Now we have an amendment before us on banking regulation. 
Yes, small business is a focus of this. This bill aims primarily to 
help small business. That is exactly what it is, and it was worked out 
with the Small Business Administration, worked out with the Small 
Business Committees of the House and the Senate.
  So we are on course. It is very dismaying for these Senators to come 
to the floor and weave together a bunch of comments and statements that 
have no regard for the facts about this particular measure, and come 
with amendments to other bills with separate initiatives. This is not 
the Banking Committee. There are some problems, I grant, with respect 
to banking. Let the distinguished Senator handle that in banking or on 
a banking bill. This is not the banking bill.
  But here we are. It is after 9 o'clock, and I understand my 
counterpart was held up a little in traffic. But I hope the others will 
come now and see what we can do with this particular amendment.
  I suggest the absence of a quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  Mrs. BOXER addressed the Chair.
  The ACTING PRESIDENT pro tempore. Will the Senator withhold the 
quorum call?
  Mr. HOLLINGS. Yes. I withhold the quorum call, please.
  The ACTING PRESIDENT pro tempore. The Senator from California [Mrs. 
Boxer] is recognized.
  Mrs. BOXER. I thank you, Mr. President.
  I want to say to my friend from South Carolina, the distinguished 
chairman of the Commerce Committee, how much I respect what he is 
trying to do for his country with this bill. This bill is crucial to 
our competitiveness.
  I had the opportunity to sit in the chair during some of the debate. 
We were debating things that had to do with farm workers, and all kinds 
of issues, pesticides. One can only ask what is the motivation behind 
this big stall? The only answer I can come up with is it is politics 
again. It is stopping progress again. We have seen it time and time 
again. I know my distinguished friend is going to stay here as long as 
it takes to get this bill finished. I want him to know that I am 
looking forward to working with him to see that this bill gets passed. 
For my State, it is absolutely crucial.


                           Order of Procedure

  Mr. President, seeing that there are no other colleagues who wish to 
speak on the bill, I ask unanimous consent that I be allowed to speak 
as if in morning business for 15 minutes.
  Mr. HOLLINGS. Mr. President, let me first thank the distinguished 
colleague from California. She is right on target. This is an extremely 
important bill, and we are facing some kind of political stall. It is 
very interesting that a serious statement was made. Otherwise, I would 
not have alluded to it. But it was stated that this bill really is 
political pork to carry the State of California. I said, ``Come on. Are 
you serious?'' They said, ``That is the word that has gotten out.'' I 
had to go into detail. That is why I continued to refer to this 
particular debate. They do not say so publicly.
  I can enumerate the merit review, the oversight by the National 
Academy of Sciences, and much more. How is the money spent. The bulk of 
it goes to NIST, the old Bureau of Standards. There is no pork there. A 
lot of the money goes to the National Science Foundation. There are no 
politics to the National Science Foundation. Money goes to the 
manufacturing technology centers; each one of those centers must be 
means tested and peer reviewed.
  We have been true to the original representation of the bill. The 
Secretary of Commerce could not possibly play favorites even if he 
wanted to. But that is why the bill has been distorted over here, and 
some of the Senators with good intent did not realize that. That is why 
I want to emphasize.
  I am particularly grateful for the distinguished Senator's comments. 
She has been a leader in the development of technology and the creation 
of jobs, which is so vital to the State of California as well as the 
country.
  I would be glad to hear her on another subject.
  The ACTING PRESIDENT pro tempore. Is there objection to the unanimous 
consent request? Without objection, it is so ordered.
  The Senator from California [Mrs. Boxer] is recognized.
  Mrs. BOXER. Thank you very much, Mr. President.

                          ____________________