[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 Senate continued with the consideration of the bill.
Mr. ROCKEFELLER. Mr. President, I rise to once again ask my
colleagues to consider the urgency and importance of the bill before
us, S. 4, the National Competitiveness Act.
I am still trying to understand why it is taking so much time and
energy to pass a bill that is about the heart and soul of this country.
Knowing what challenges we face in staying competitive and prosperous,
I find it inconceivable that anyone would oppose this effort.
Personally, knowing the opportunities this bill poses for my own
State--its industries, its workers and their families--I am determined
to see us get this legislation signed into law.
All of a sudden, we are hearing a series of misgivings about the idea
of continuing a long tradition of the Government working with American
industry to stay on the cutting edge of technology, improve
manufacturing, and create and even expand jobs for our people. In light
of the obvious competition we face in technology throughout the world,
isn't this bill one of the equally obvious answers--a bill to invest in
the Nation's economic future.
The bill before us is not a new or radical idea. It is not even some
sharp swerve in policy and direction. The programs we want to continue
or expand are the same ones that something called the Senate Republican
Task Force on Adjusting the Defense Base specifically endorsed in 1992.
In that report, it was noted that these kinds of programs are
``important to the effort to promote technology transfer to allow
defense industries to convert to civilian activities.''
Both Democrats and Republicans in the private sector support this
legislation and the time-tested concepts that are its underpinnings.
Just this week, the head of the Council on Competitiveness, in
endorsing this legislation, reminded us that many of the provisions in
S. 4 were initially proposed by the Bush administration and were in
fact signed into law by President Bush. That includes the Advance
Technology Program, started under the Bush administration with
bipartisan support in this body. This is the Government's principal
civilian program to help industry develop new technologies where the
risks or costs are just too much for companies to undertake alone. The
projects are industry-led, selected completely on the basis of merit
through a stringent review process, and require the companies to
contribute half of the costs. The idea of this program is to avoid the
infamous VCR experience--where Americans invented a path-breaking
technology only to see others solve technical problems more quickly
than we did, and get to the market first.
In contrast to some of the debate within these walls, just take a
look outside and you will be quickly reminded and assured that his bill
has strong bipartisan support and intense industry support. Indeed, the
fact of the matter is that this bill springs from a tradition of
public-private partnerships that go back decades.
Go back to World War II. As we woke up to the challenges being posed
by the Europeans, the United States committed the resources needed to
stay ahead. That investment led to new products, new industries, and
higher living standards.
As a recent Business Week article pointed out, U.S. wartime
discoveries fueled growth in the aerospace, nuclear power,
pharmaceutical, and electronics industries. And looking at the next
four decades, ``fundamental research produced transistors, lasers, and
molecular biology--the foundations of America's world-leading computer,
communications, and biotech industries.''
The entire U.S. Senate should strongly support the bill. As one of
its original cosponsors and architects, I am enormously proud of this
legislation. Through the steps that we propose, we will strengthen our
country's economy, promote U.S. competitiveness, and create more and
better jobs for the people of West Virginia and the rest of America.
I commend Senator Hollings, chairman of the Senate Commerce
Committee, who has been the master-architect of this effort. Many other
Members of this body have devoted serious thought and work to this
blueprint for investment and economic growth, and I hope they all get
the credit they deserve from the people and industries of their States.
This is an important bill, Mr. President, because it focuses
attention on the most pressing things we need to do to compete in the
international marketplace now and into the 21st century.
I presume that we will be discussing this bill throughout the day.
That's understandable, since it is a significant proposal that deserves
this body's full consideration. But I want to say as loudly as it is
humanly possible that this should not turn into a debate designed to
win political points.
This legislation deserves bipartisan support. It embodies the
pragmatism, the fiscal discipline, the commitment to private-public
partnerships, and the dedication to economic growth that all of us
share as objectives. It is based on practical experience in technology
programs within other agencies that have paid enormous dividends. It
recognizes that investing, by working directly with industry, in
technology, is the road to a more robust and competitive economy.
I have pointed out on other occasions in this Chamber that if we are
to maintain our position of global leadership, we must understand the
changes in the world that will define our future and adjust our goals
accordingly. Put simply, the end of the cold war means that our global
leadership role will be determined by our economic strength, which will
define our political and military strength. Economic strength, in turn,
will be measured by our ability to compete in the critical industries
of tomorrow that will be the infrastructure of the 21st century.
We usually think of infrastructure as roads and bridges, concrete and
steel. But it is now telecommunications and information, electronics,
fiber optics and computers. Instead of the interstate highway system,
we are contemplating smart highways, supersonic air transport, and
information superhighways. These are the things that will drive our
economy in the future.
Japan and the rapidly industrializing countries of the Pacific rim
understand this and are acting quickly to prepare themselves for the
future. Unfortunately, planning ahead has become politically incorrect
in the United States in the past decade. As a result, we are behind the
economic eight-ball, still debating the wisdom of Government action to
improve our manufacturing and R&D base, while our competitors have gone
ahead with aggressive action of this very sort.
If we lived in a world of closed markets and limited trade, we could
avoid these changes and survive. But as we all know, our world is
rapidly becoming a single market, making us constantly vulnerable to
our competitors' efforts. The computer I use may contain Japanese
semiconductors on a motherboard assembled in Singapore, shipped to
Taiwan where it is put inside its plastic frame along with a screen
assembled in Malaysia, before it is finally sent here--by an American
company.
That kind of globalized production may be inevitable, but it still
occurs in a world of nation-states, and governments have not lost their
ability to influence their own competitiveness through appropriate
macro and microeconomic policy tools.
The National Competitiveness Act is about the latter--using our micro
policy tools on behalf of the industries and sectors we need to be a
high technology 21st century economy.
I might add that I still believe we missed a golden opportunity to
move quickly on these issues last spring when Congress rejected the
President's stimulus program. Almost unnoticed in the debate over
summer jobs and other short-term spending was the immediate investment
that was included for technology research, development, and
commercialization.
This legislation is about where we know or competitive future lies.
It is manufacturing that generates not only jobs but profits to fund
research and development of new generations of technology and products.
We may lead the world in research--and I would argue that we do--but
ultimately if we don't make anything, we won't invent anything, and we
won't create good jobs for our workers. S. 4 deals directly with
commercialization and technology diffusion.
First, as others have made clear, it expands and extends our existing
manufacturing technology outreach efforts. Making the latest technology
and know-how available throughout our country, particularly in States
like West Virginia that have large rural populations and small towns
helps all our companies, including our smaller businesses improve their
competitiveness. For example, in my home State of West Virginia, this
bill will authorize a telecommunication network that will connect the
rural schools, hospitals, and manufacturers to the information highway.
These organizations will have the same access to information and data
that the more densely populated States already have. This portion of
the bill makes the State more competitive in international markets
which create more high quality jobs--the responsibility of those of us
who serve as elected representatives.
This bill also opens the door to new, innovative ways of looking at
the process of becoming competitive. It includes language I had sought
that could lead to the creation of a manufacturing technology center or
manufacturing outreach center that is concerned with the total
competitive environment in a region and not just with technology
transfer. A region's education system, its tax policies, its zoning
rules, and a thousand other, largely non-Federal, Government-related
activities have a critical impact on the companies that operate within
the region. Helping local governments and community leaders understand
that and adjust their policies so advanced manufacturing and
competitive companies are encouraged rather than discouraged is an
important new element in this bill.
In addition, S. 4 focuses directly on the need to spur
commercialization, which we all know is absolutely critical to our
future. Thanks to a great deal of work, the bill includes a revised
version of a proposal I originally introduced in 1992 to provide
Federal support for venture capital investments in critical technology
commercialization.
Mr. President, many of us believe that this country has an investment
capital shortage right now. Others do not agree with that assessment,
but all would agree that we clearly have a shortage of capital willing
to invest in relatively high risk critical technologies and willing to
invest at the critical commercialization stage of development.
Conventional venture capital companies have become risk averse over the
years, focusing on safer high return investments and often coming in
only at a later stage when success is more likely.
In truth, there's nothing wrong with that--it's the market making
appropriate judgments about where money should go to ensure a return.
But that does not mean that is in the national interest. It is my view,
Mr. President--and we have had hearings on this issue--that we could
significantly assist our critical technology companies in bringing
their ideas from the laboratory or prototype into mass production
through carefully structured minimal assistance from the Government.
S. 4 achieves that goal through its critical technology financing
program. By licensing venture capital firms specifically to invest in
critical technology enterprises and then purchasing some of their
equity with Federal dollars, the Government will create a cadre of
venture capitalists focusing their creative energies specifically on
critical technology development with a minimal transfer of Federal
funds.
Most important in this concept is the fact that the investment
decision making process remains in private hands. This is not the
Federal Government making investments or selecting winners and losers.
It is the private venture capitalists doing that--and they have the
expertise to succeed at it. The Federal role, and the Federal funds,
give them the incentive and the opportunity to take the particular
risks inherent in this kind of investment. We all know how successful
our basic research programs have been--leading to many Nobel prizes--
but how many of our best ideas have not created jobs in this country.
This provision of the bill will help to take the best ideas from
American research laboratories to products by providing patient venture
capital. This will create more high quality manufacturing jobs.
It is interesting to note, Mr. President, that there was little or no
debate over this section of the bill. It is so obvious, it has
attracted wide support. Instead, we had an extensive debate over
whether this program should be run by the Department of Commerce, our
lead civilian technology agency, or by the Small Business
Administration, whose SBIC program has some similarities to the
critical technology investment companies that would be created.
In the end, as so often happens, we produced a compromise, and the
Senators from Arkansas [Mr. Bumpers] and South Dakota [Mr. Pressler]
are to be commended for their cooperation in working this out. I will
leave it to others to describe the details of the revised provision,
Mr. President. Let me simply note that since this is fundamentally a
technology program, Commerce will retain the policy and decision making
lead but will rely on SBA's administrative experience in programs of
this kind to actually manage it. In my view, this is a suitable outcome
that uses the strengths of both agencies to create a successful
program.
The basis for this resolution came directly from discussions between
the Secretary of Commerce, Ron Brown, and the Small Business
Administrator, Erskine Bowles, both of whom, on behalf of the
administration, support this provision. I am also grateful to them for
their hard work and personal involvement in seeing this issue through.
I know that there are others in the administration, who were only
beginning their analysis of the venture capital problem when we were
ending ours, who are considering other means of achieving the same
objective. That is why this program is structured not to begin for a
year, and the Commerce Department is directed in the interim to develop
detailed procedures for its implementation. It may well be that the
Department will return to us in a year suggesting some modifications
even before the program begins. That would be entirely appropriate, and
I am sure the committee will consider such seriously.
Let me simply close by reiterating how important this legislation is.
I want to commend the chairman of the Commerce Committee again, and my
many colleagues who have worked for years to craft this agenda for the
future. I am very grateful for the hard work, the imagination, and
public service that were poured into this legislative effort by
numerous staff.
This bill is significant because it looks to our future, not our
past. It puts in place the objectives, the commitments, and the
programs to pave a future of continued global economic leadership. And
that future translates into one of hope, opportunity, and jobs for the
American people.
I thank the Chair and yield the floor
Mr. MURKOWSKI addressed the Chair.
The PRESIDING OFFICER (Mr. Wofford). The Senator from Alaska.
Mr. MURKOWSKI. I thank the Chair. I wish you a good morning.
Mr. President, I want to thank my colleague, Senator Simpson, for
including my language in the Republican substitute aimed at promoting
industrial competitiveness and economic growth through Federal
regulatory reform.
Both sides recognize the necessity of job creation. Federal agencies
must consider the costs associated with Government regulation. The
American family is currently paying over $1,000 per family every year
for the cost of environmental regulations.
The question before us is the merits of cost-benefit analysis. The
environmental community, the Environmental Protection Agency, and some
of my colleagues on the other side are fearful of cost-benefit analysis
being a factor in promulgating regulations along with the consideration
of international competitiveness and economic growth.
Agencies should be required in law to publish a cost-benefit analysis
in the Federal Register. The merits of every law that we pass should be
evaluated in terms of costs and benefits. This evaluation should
include a risk analysis.
The public really needs to have this information. A logical place to
put it is in the Federal Register.
My amendment requires the Federal agency heads to publish in the
Federal Register cost-benefit analysis for all proposed regulations.
More specifically, the regulatory actions to be published in the
Federal Register with an accompanying cost-benefit analysis include a
notice of proposed rulemaking, an interim final rule, and then a final
rule. The cost-benefit analysis should include some detail, not an
overabundance of detail, but some practical and understandable
recognition of the proposed regulations costs and benefits so everyone
can read and understand them. So often, we react after the fact to
horror stories from a constituent, and we shake our head and say, ``I
cannot imagine how that ever happened. That certainly was not the
intent.''
The cost-benefit analysis should include an analysis of specific
costs and the benefits resulting from the regulation and specifically a
certification from the Federal agency head that the regulation will
produce benefits that justify the cost. There is an environmental
terrorism associated with what this means. This is not an unfair
obligation nor an unreasonable requirement--a simple certification that
the regulation will produce benefits that justify the cost.
The costs as a result of implementation of, and compliance with, the
proposed regulations would include the total number of direct and
indirect jobs to be lost, the costs to the Federal Government and local
governments and other public and private entities, and the human health
or environmental risks created. With the cost-benefit analysis, it
would put an obligation, an appropriate obligation, to evaluate some
very important considerations.
Benefits include the total number of direct and indirect jobs to be
gained, the savings accrued by the Federal, State, and local
governments and other private and public entities, and the human health
or environmental risk reduced. We would like to think that the benefits
of regulations outweigh the costs in most cases but that is not always
the case.
The amendment covers the cost of regulatory reform on the economy
because there are costs. With the exploding costs of unfunded Federal
mandates which are imposed on local governments, the public should have
cost-benefit information available to them in the Federal Register.
Regulations often fail to assess the minuscule risks, and some of
them are very small, being addressed compared to the enormous costs of
reducing the risk. In my State of Alaska, unreasonable regulations are
most often in the area of environmental regulations, and they are
uniform. When they make a uniform environmental regulation, it has
different effects in Alaska than it has in other States. For example,
we are the only State with the Arctic in it. We have a big hunk of our
State that is in the Arctic. Wetlands are synonymous with permafrost
and we are the only State with permafrost. You mandate a wetlands
application; permafrost automatically is included--and one-half of our
State is in permafrost--and away we go. It is a free license for the
EPA, the Corps of Engineers and on and on and on.
Mr. HOLLINGS. Will the Senator yield?
Mr. MURKOWSKI. I would be happy to yield without losing my right to
the floor.
Mr. HOLLINGS. I know it is very, very difficult to keep up. We
adopted that amendment yesterday, cost-benefit analysis, in the
Nickles-Reid portion of the Simpson amendment. I just thought I would
bring that to the attention of the distinguished Senator.
Mr. MURKOWSKI. I appreciate that from my good friend from South
Carolina, but I am under the impression that my amendment as included
in the Simpson substitute is more direct on cost-benefits as opposed to
the Nickles, which is in the area of economic attention specifically.
So I want to just complete my little treatise here on the emphasis on
the environmental area, because, Mr. President, Government, business,
and industry in our country spent approximately $115 billion for
pollution control in 1990, and it is estimated that the figure will
increase to $185 billion per year--that is 2.3 percent of our gross
national product--by the year 2000. EPA continues to implement, I
think, overly burdensome regulations while the Government continues to
talk about creating jobs.
The tragedy is aggravated by the fact that we often know so little
about the benefits of regulation. Regulations often are based upon
inadequate scientific analysis or fail to assess the minuscule risks
being addressed compared to the enormous costs of reducing risks.
I do not know how many of you saw a Washington Post article, I think
it was yesterday. It covered a statement by the EPA. One of the EPA
water quality rules allows arsenic levels no more than 2 or 3 parts per
billion. Now, we all hear about arsenic, and we react and, good
heavens, we have it in our water and we are told that we cannot have
levels of more than 2 or 3 parts per billion. Yet we go out and eat a
plate of shrimp, and a plate of shrimp contains 30 parts per billion.
But there is no bridge between the two, which points out that clearly 2
to 3 parts per billion in water is of little concern to human health.
Now, there are other examples about which I could speak. We talk
about the proposed ban on lead fishing sinkers and about the merits of
ingestion of the sinkers by birds. I am not going to go into these
examples. I am just saying, Mr. President, that we are entitled to have
this cost-benefit analysis. I am pleased it is in the Republican
substitute. I wish to keep the issue alive. It is not a partisan issue;
it is a bipartisan issue because it represents common sense.
This is an important issue--the Federal Government often spends a
fortune on enforcing regulations where the costs far outweigh the
risks. And this cost-benefit analysis, I think, is an essential element
to the regulatory reform that needs to be addressed.
I thank the Chair. I yield the floor.
The PRESIDING OFFICER. The Senator from Oklahoma.
Mr. NICKLES. Mr. President, I wish to thank my friend and colleague,
Senator Simpson, from Wyoming for putting this package together. I wish
to especially say thank you to my friend and colleague, Senator
Murkowski, from Alaska, for the statement he made concerning cost-
benefit analysis, which is needed so desperately.
I picked up the paper recently, and it talked about EPA saying cost
on a life saved is as much as $1 billion per life. And some of these
regulations imposed have such enormous costs, whether you are talking
about clean air or clean water, OSHA, or you are talking about others,
having a risk-benefit assessment is awfully important.
I also wish to thank my friend and colleague from Wyoming for
including the Nickles-Reid Economic and Employment Act, which we agreed
to yesterday, because not only do we need to know the risk and economic
benefit, but we also need to know the cost and we need to know the
impact on employment.
So I think the Murkowski amendment and the Nickles-Reid amendment
complement each other significantly and, I think, will be giant steps
in the right direction.
I also wish to thank my friend and colleague from Wyoming for
including a couple of other provisions, one of which deals with Davis-
Bacon reform and increasing the threshold from $2,000 to $100,000. I
think people are shocked when they find out that the Federal Government
still mandates wage rates on any Federal construction project that is
more than $2,000.
That means, I say to my colleague from Wyoming, if you had a little
post office in Cody that had a door that needed to be fixed or a little
roof repair, if a contractor said, well, that is going to be over
$2,000, they cannot just do the work. They cannot just say here is what
the contract will be. They would have to go all the way back to
Washington, DC, get the Department of Labor, and ask what is the
prevailing wage. And maybe they already have the prevailing wage in
Cody. But I will tell you, they do not have the prevailing wage in a
lot of rural areas. And yet the Federal Government is going to mandate
what the wage rates are for any Federal construction project that is
over $2,000. I find that to be ridiculous in this day and age. That is
the same $2,000 that was enacted in 1935. It makes no sense.
So this is commonsense reform. It says, wait a minute. For small
construction projects, let us not have the Federal Government mandating
what people will pay. Let us not have the Department of Labor determine
what people should be paid. Let us allow private contractors, working
with their employees, who know best what the value or the merit of that
job is, to determine what the wage level will be, not the Department of
Labor.
So I think that is an excellent piece of reform. My friend from
Wyoming has come up with a very good, a very credible package, one that
does not cost money. Unlike the original bill, which is going to cost
taxpayers, if it is all appropriated, $2.8 billion, this program is
going to save money. The Davis-Bacon regs alone will save over $30
million over a few years. It is going to save a lot of money for
companies and individuals who will not have to comply with useless and
needless regulations.
I think it is an excellent package, and an excellent substitute. I
compliment my friend from Wyoming for putting it together.
Mr. SIMPSON addressed the Chair.
The PRESIDING OFFICER. The Senator from Wyoming.
Mr. SIMPSON. I thank the Senator from Oklahoma, Mr. President. He has
done tremendous work in this area over the years. In doing so he has
often presented matters to the Senate for consideration only to see
them targeted in a single-shot way, and then immediately in a partisan
vote shot down.
So he has, thanks to the floor manager, now included an amendment
which is of great interest to him. And I appreciate him making the
distinction between the Murkowski amendment on cost analysis and his
own amendment on cost analysis, hoping at least to attempt to answer
the question of Senator Hollings; that they are different, and that
they deal with different aspects of cost analysis.
But I know who has been working in this vineyard, laboring long for
years, and that is the Senator from Oklahoma. I deeply appreciate that.
Mr. President, I believe the order of business is that we are on the
amendment.
The PRESIDING OFFICER. That is correct.
Mr. SIMPSON. Mr. President, this amendment was sent up last night. As
the Senate begins debate on S. 4, the so-called Competitiveness Act, we
must ask ourselves: Do we enhance American competitiveness by allowing
ever greater Government intervention in the private sector? I do not
think so. The better approach is to attempt to reduce the existing
regulatory burdens which are anticonsumer, and which greatly inhibit
American competitiveness. Senators Dole, Nickles, Cochran, Pressler,
Thurmond, Durenberger, Coverdell, Hutchison, Helms, Craig, Coats,
Kempthorne, Wallop, Mack, Murkowski, Gramm, Lott, Smith, Gorton,
Warner, and I will be offering a substitute amendment to S. 4 which we
believe is a real competitiveness bill. It is aimed at reversing the
trend of anticompetitive regulations which take such an immense toll on
our economy. It also makes an effort to reform the process which leads
to the promulgation of such regulations.
Over the past century, Federal regulations have collectively limited
our economy's ability to approach its maximum potential for growth. As
many as 85 percent of Americans agree that Government regulators are
now out of control and that lowering the cost of regulation to the
public should be a very top priority. The American consumer obviously
know what is up. We consumers ultimately bear the costs of all these
regulations. The Clinton administration in the reinventing government
proposal has stated that the current costs of government regulation in
America is $430 billion per year. Thomas Hopkins of Rochester Institute
of Technology, who is thought to have authored the foundational study
of the cost of regulations, has projected $564 billion as the figure
for 1992. Either way, it amounts to $4,300 to $5,600 per family per
year. These costs do not appear on any Government ledgers or on a
paysheet stub. It is a hidden tax which equals or exceeds the average
Federal tax burden on an American family, estimated at $4,000 per year
by the Bureau of Labor Statistics Consumer Expenditure Survey 1988-
1989.
Our objective is to provide regulatory relief to American consumers
without endangering their health or their safety. This is not all-
sweeping legislation. Much more can and should be done. Our amendment
has the endorsement of the 600,000-member NFIB and the Labor Policy
Association. I ask unanimous consent that various letters of
endorsement be printed in the Record after these remarks.
This legislation incorporates a few good ideas from both sides of the
aisle. Some of them are new, and some have been shot down when offered
separately in the past. But, it is a good start down the right path of
regulatory reform. And based on preliminary CBO estimates, our
amendment would save approximately $1 billion over 5 years.
Included in this amendment is language from Senator Dole's Government
downsizing bill relating to reforming the Davis-Bacon Act of 1931. We
have also applied the same reforms to the Service Contract Act of 1965.
Throughout their history, these laws have artificially increased the
cost of Federal construction and service contracts. Davis-Bacon
requires that construction contracts of more than $2,000 entered into
by the Federal Government specify minimum wages to be paid to the
various classes of laborers and mechanics working under those
contracts. The minimum wages are based on the prevailing wage in the
locality of the project as determined by the Department of Labor. The
Service Contract Act also requires Federal contractors to pay the
prevailing wage in the locality when contracting for a service worth
more than $2,000. Several of my colleagues have advocated taking the
ultimate step and repealing these laws. That is not a consensus
building approach. Accordingly, we have tried to impose some sensible
reform on these laws. We have increased the threshhold which triggers
the applicability of these laws to $100,000. In Davis-Bacon, CBO
estimates that this reform would save $216 million over the next 5
years. In the service contract law, CBO estimates that this reform
would save the taxpayer nearly $100 million over the same period.
The costs of these laws are utlimately passed to the taxpayer. Not
only are these laws anticonsumer, they also burden the private sector
with tremendous paperwork. Contractors must submit extensive weekly
payroll reports in order to prove compliance. Our proposal would
eliminate the requirement of these weekly reports and instead require
contractors to file monthly to prove their compliance.
Senator Durenberger has contributed legislative language which would
enhance the international competitiveness of the American medical
technology industry. Under current law, a medical device which has been
approved in a foreign industrialized country may not be exported to
that country from the United States, unless the product meets FDA
standards. Even when the product will never be used in the United
States and customers in a modernized nation want it--it is currently
subject to the slow FDA product approval process. This impedes American
industry's ability to export its more advanced medical technologies in
an area where we have a large competitive edge. The ultimate effect of
current law is to encourage American firms to manufacture outside the
United States. Our amendment would allow the technology to be exported
to certain developed countries if that country's government makes a
positive finding regarding the safety of the product.
Senator Mack has contributed legislative language from the Economic
Growth and Regulatory Paperwork Reduction Act, which he introduced with
Senator Shelby. That bill has 51 cosponsors, and has the goal of
reducing, in a measured way, some of the regulatory burdens which
inhibit credit availability, and economic growth, without compromising
the safety and soundness of our Nation's financial institutions. The
redtape required of our lenders come at quite a cost of Americans. A
recent study by the Federal Financial Institutions Examination Council
estimated that the cost of regulatory compliance was as high as $17.5
billion per year. If this cost were reduced by just 25 percent, that
would be approximately $4.4 billion which could be added to bank
capital and could support tens of billions in additional lending. The
language of the amendment ensures that the strong bank supervisory
provisions enacted in recent years like risk-based premiums, strong
capital rules, enhanced authority to close troubled institutions, and
annual audits are maintained. Rolling back the crust of regulations on
our Nation's financial institutions while leaving in place strong
measures for safety and soundness of the industry is what we believe
competitiveness is all about.
The Paperwork Reduction Act of 1993 is bipartisan legislation that
was sponsored by Senators Nunn, Bumpers, Danforth, Dole, and others. It
is fully incorporated in this amendment. The fundamental purpose of the
Paperwork Reduction Act of 1980 was to minimize the Federal paperwork
burdens imposed on individuals, small businesses, State and local
governments, educational and nonprofit organizations, and Federal
contractors. That act established the Office of Information and
Regulatory Affairs [OIRA] within OMB. The mission of OIRA is to prevent
the imposition of needless information collection requests on the
public, and essentially to be the traffic cop to review potential
regulations. OIRA tries to ensure that the information requested is
necessary, assess how it will be used, and estimate the average burden
on the recipient of the request.
Our amendment would overturn Dole versus United Steelworkers of
America (1990). In that case, the Supreme Court ruled that the
Paperwork Reduction Act was not applicable to non-Federal Government
entities enlisted to process and maintain paperwork by the Federal
Government. This decision has exempted about one-third of all Federal
paperwork from OIRA review. Our amendment provides that all Federal
Government sponsored paperwork would be subject to OIRA review.
Furthermore, the amendment would set a governmentwide goal beginning on
October 1, 1994, in order to reduce the Federal paperwork burden on the
public by 5 percent per year for the next 3 fiscal years.
Senator Wallop and Senator Boren have introduced legislation called
the Rural Community Bank Paperwork Relief Act. We incorporate the
provisions of that bill in this amendment. The Community Reinvestment
Act enacted in 1977 was not intended to burden small communities and
responsible community banks in America's rural towns. The evidence is
clear. These banks are serving community development needs in their
areas. They must do so in order to stay in business. Our legislation
would lift unnecessary CRA paperwork burdens from those institutions in
small cities and towns, populations of not more than 20,000. The bill
would allow lending institutions in such cities and towns to show that
they are meeting their community's credit needs by utilizing State-
based ratios as defined by appropriate Federal agencies. The bill would
reward banks for making more loans in their communities, while
retaining all appropriate requirements for safety and soundness.
In trying to make some progress toward inserting some modicum of
common sense in the regulatory area, this legislation also includes
language sponsored by the fine new Senator from Idaho [Mr. Kempthorne]
called the Hero Act. The idea for his bill arose from an accident on a
construction site near Boise, ID. A dirt trench wall collapsed on 21-
year-old Dwight Kaufman. All but one inch of his head was covered. He
was suffocating and trying to scream for help. Two coworkers used their
hands and tools to dig out the dirt from around Dwight's head before a
rescue crew could arrive to pull him out of the ditch. His coworkers
were able to save Dwight's life. OSHA did not quite see it that way. It
fined the company nearly $8,000 because the good Samaritans failed to
put on hard hats, and took no precautions against other trench walls
falling on them during the rescue. The State OSHA director said that,
`Rescues must only be attempted after taking proper precautions to
ensure that victims are not injured in secondary cave-ins.'' Senator
Kempthorne was successful in having the fines dismissed by the Labor
Department. However, it is necessary to enact legislation which would
exempt such acts of heroism from OSHA fines in the future. There should
be a distinction made between technical violations of OSHA regulations
and the heroic acts of individuals who respond to save other lives.
Another bipartisan piece of legislation known as the Economic and
Employment Impact Act was introduced by Senators Nickles and Reid. It
too is incorporated into our alternative. This legislation would
require each committee report accompanying a bill to contain a CBO
analysis of the bill's impact on employment and the economy.
Furthermore, it would require the agency which publishes any
significant proposed regulation to include an analysis of its economic
and employment impact. Often, Congress fails to consider how much a new
law or regulation would increase the cost of products and services to
consumers or the loss in jobs when businesses have to cut back on their
employment in response to growing Federal demands.
Also included in our substitute is legislation introduced by Senator
Dole and many others called the Private Property Rights Act. There are
literally billions in claims filed against the Federal Government by
landowners who believe their private property has been taken by the
Federal Government without just compensation, as is required by the
Constitution. It is important to note that a taking of private property
can occur even though title to the property remains with the original
owner and the Government has only placed restrictions on its use.
Fortunately, courts have recognized that these partial takings are
subject to just compensation under our Constitution. Unfortunately, the
only check on the enforcement of these fundamental rights has been
through our judicial system. There, Americans can, often at huge
expense, seek to ensure that their Government complies with the
Constitution. President Reagan recognized the failure of the system and
issued Executive Order 12630 which in effect required Federal agencies
to review regulations before they were issued to determine whether
takings of private property might occur. The order directed the
agencies not to take private property in whole or in part unless
absolutely necessary. This legislation would codify that Executive
order. Secondly, it would require all Federal departments and agencies
to comply with that order.
I also appreciate the contribution of legislative language by Senator
Murkowski which further strengthens our amendment's efforts to reform
the regulatory process. The language would require the heads of Federal
agencies which are proposing regulatory actions to provide an analysis
of the costs versus the benefits of the proposed action, and to publish
that analysis in the Federal Register. This analysis will include the
effect of the proposed regulation on jobs, the economy, and the
environment. It requires a certification by the promulgating agency
that the regulation will justify the costs to the Government and to the
public.
Senator Wallop, my good friend from Wyoming, has contributed a second
regulatory reform measure to this package. Provisions he authored would
amend the Regulatory Flexibility Act [RFA] to provide relief to small
businesses. Currently there is no meaningful judicial review under RFA
from a Federal agency's decision that a regulation would not have a
substantial impact on small business. Our amendment would give RFA
teeth by providing for such judicial review procedure.
I very much appreciate the fine assistance and cooperation of those
colleagues who have had your legislative ideas incorporated into this
measure. This legislation is certainly not the end of our vigorous
efforts toward achieving regulatory reform, indeed it is a good start,
and a much better alternative to achieving real competitiveness than S.
4, as reported. I urge my colleagues to support this amendment.
I also emphasize that I am the compiler of the various components of
this amendment, not the author of the various provisions. Although I
appreciate the rich cooperation and contributions of my colleagues, I
would not pretend to be the expert on the provisions crafted by others.
So I know that my colleague from South Carolina will ask some
piercing questions on my amendment. When they become too piercing, I
shall simply call upon my colleagues who have authored that particular
section to come forward in order to provide a more detailed response.
The Senator from South Carolina has seen all of these provisions in
one form or another during his ``tour of duty,'' as have I. This is by
no means a frivolous amendment. We are not attempting to detonate the
whole situation. It is an honest attempt to say: If you are going to
talk about competitiveness, get some of these things done which, in our
minds, would truly be a competitiveness act of greater import.
At this time, I will certainly assist in seeing that those who wish
to speak on this amendment come forward; and if not, I will assist the
manager of the bill in setting a time agreement where we can dispose of
this during the day, because the majority leader clearly has indicated
that we will proceed into the dark hours if we do not conclude, or at
least get to a point of disposition.
Mr. HOLLINGS. Mr. President, if the Senator will yield, he said it is
not his intent to destroy.
Someone could well say: Fine, let's also tack on regulatory reform,
and Bacon-Davis, and labor matters, and banking matters, and economic-
impact statement matters, and so on without end.
But does the Senator realize that this has been a bipartisan effort
over the past 5, 6, 7 years, trying to boost America's technological
competitiveness? It has been a concerted effort by the House and
Senate, Republican and Democrat.
We got it moved. We got it ready to be approved, but now the
Senator's measure says, as a substitute, get rid of it, and let us just
have two regulatory reforms.
I am sure I would be astonished if that was the intent of the
Senator. Is that the intent--just to get rid of this bill?
Mr. SIMPSON. Mr. President, that is not the intent. It is trying to
bring a sense of reality.
There are those on my side of the aisle who feel that if this were
really the attempt to give a rebirth to President Bush's proposal,
which was somewhat similar to this, as I understand, and which had the
provisions in it which cost in total, I am told, $280 million, this
measure is $2.8 billion. My information, and I share it with the
Senator from South Carolina, would indicate that S. 1330--these are the
figures I have and I would like to have that discussed--was called the
Manufacturing Strategy Act of 1991. Of course, that was of the Bush
administration years. It authorized $280 million for 3 years. The bill
was passed in the Senate in June of 1992 and while in the House the
authorizing levels were increased and the House message was never
passed prior to adjournment. There was an understanding among Senate
Republicans that if the bill were to reach the White House, President
Bush would veto the measure. That signal went out that they had
increased the amount of the budget, and he did not go for that.
The pending National Competitiveness Act authorizes $2.8 billion for
2 years. I inquire of these figures, 1995 fiscal year and 1996. It also
encompasses parts of four other initiatives which individually have
never passed the Senate. If we are dealing with things that have never
passed, in my amendment we are dealing with four things that have never
been passed before in the Senate. In addition, the four initiatives
have also been authorized at a considerable increase, in some cases
nearly 10 times the original level. The four initiatives are, and I
seek information, S. 1328, which is the Advanced Manufacturing Act of
Senator Bingaman; a bill of Senator Wofford, the occupant of the chair,
called S. 3296, the Industrial Innovation Act; S. 1581, technology
transfer improvement by Senator Rockefeller; and S. 2937, the
Information Infrastructure Technology Act, which originally was an
authorship of Senator Gore, and Senate Republicans have supported
funding for advanced technology programs, manufacturing technology
centers, however at considerably lower levels than those authorized in
the pending S. 4, and that is a legitimate objection of many in my
party.
We are seeking a judgment on what is the best way to help move and
assist with competitiveness. The whole point of Senator Hollings' bill
is competitiveness. We take a different view, or a great majority of us
take a different view of what constitutes competitiveness.
We think our amendment is very germane, and it represents two
different approaches to that issue, but it is a very honest attempt. We
have the gravest of reservations of seeing the money go to the
Department of Commerce for even though there may be peer review and all
sorts of safeguards, this is a huge amount of money, and it will be
going out with a great deal of pressure involved because of the
matching funds and because of employers. You can bet we are getting a
lot of urging from some of our constituents, often the ones who write
us the most pungent letters about the deficit and the debt, saying
simply get the bucks, get the bucks, and get them in places where it
will best help this administration.
That is the viewpoint that is held by many on our side of the aisle.
So with those explanations if those queries can be assuaged, I would
certainly appreciate it. But that is where this amendment is coming
from.
I have the deepest respect for the Senator from South Carolina. I
worked with him side by side much more than we have ever been on the
other side. But it is simply our view that it is too big. It does not
fit. If we are continuing to say that President Bush made a proposal of
$280 million over 5 years and this one is $2.8 billion over 2 years, it
just seems all out of proportion to what has changed so much since 1991
and 1994.
Those are my inquiries.
Mr. HOLLINGS. Yes.
Mr. President, now for discussion with respect to amounts, the 1993
figure which was the last figure that we had from President Bush was
$288 million and the present 1994 figure that we have right now under
the budget is $526 million. So we both have the same figures of $526
million at the present time, $287 million under President Bush.
I am going to distinguish various things. One thing, in the Bush
years, we didn't have the national information superhighway, we never
had the National Science Foundation, and other moneys in here.
But let us start right at the beginning with one thing we can agree
on. This is not the Bush program. In fact, I wish the Senator would
have been there in 1988 when we had the trade bill, and I instituted
this at the request of industry. I had tremendous industry support
behind me. We put it on the trade bill, and the word came back from the
conference that it was veto bait by President Bush.
I then got with the conference and persuaded them that we had such
strong support. I can see Senator Bentsen now, and we intended just
frankly to take the floor and do the best we could to expose the
fallacy of the idea that here with $70 billion in Government research
there wasn't any for commercializing technologies. This was not going
to withstand the light of day and the light of truth.
So they included it on the bill and sent it to the President. He
signed it, but he did not like it, and he did not fund it. So, in 1989
and 1990 if you want to look at the Bush figure, it was zero. Let us
get the record straight. Zero. We put the moneys in in the
appropriations process. So we are not trying to implement any Bush
policy here. We brought him kicking and screaming into the real world.
He finally realized that he had to put some money up there in his
budget request, a minimal amount at that. When I say ``minimal,'' Mr.
President, let us go to various things here that refer to just exactly
where we are.
The Critical Technologies Subcouncil--and I want to get my
colleague's attention with respect to this because President Reagan's
National Science Foundation director was the chairman, Erich Bloch, of
the Critical Technologies Subcouncil, that submitted this report just
as President Clinton came to office the early part of last year.
The membership of this particular Subcouncil is very noteworthy with
the dean of the Albert Nerken School of Engineering, Eleanor Baum;
Frederick Bernthal, Deputy Director of the National Science Foundation;
Michael Borrus, co-director, Berkeley Roundtable on International
Economics; Eugene Wong, who was the Associate Director of Industrial
Technology, Office of Science and Technology Policy under President
Bush; Mr. Robert M. White was Under Secretary of Technology in the
Department of Commerce. You can go right on down, whether on the labor
side, Howard Samuel, president of the Industrial Union Department of
AFL-CIO; or Craig Fields, president and CEO of MCC; Edward Fort,
chancellor of North Carolina A&P Techical State University; John
Foster, consultant, TRW. William Happer, the Director of the Office of
Energy Research; Richard Lester, the director of the Industrial
Performance Center, MIT; Richard Nelson, a professor at Columbia
University.
I have got them on and on.
I ask unanimous consent that the entire report be printed in the
Record, along with these board members.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Promoting Industry
Equally important to a competitive economy is a clear and
rational approach to managing business and industry. This
includes a sharp improvement in our ability to develop and,
most important, to apply new technologies. It also means
careful attention to the way in which corporations are
governed by internal and external decision-makers, and the
relationships between corporations and the financial markets
on which they depend for capital. A competitive economy must
also look beyond its borders to international markets for its
products. Trade policy is an important ingredient in the
competitive vantage point of American businesses.
Technology
For most of the past 50 years, technology has been an
unquestioned American strength. US industry was the leader in
virtually all key areas of civilian technology. The United
States science and technology enterprise still has many
outstanding strengths, including unparalleled research
universities, an open and entrepreneurial climate that
attracts the best minds and ideas from around the world,
technically advanced national laboratories, and strong
corporate research labs.
Nevertheless, in many leading edge areas of technology, US
leadership has declined or been lost. Studies indicate that
the United States still leads in overall manufacturing
productivity by some measures but that we fall behind in
machinery, electrical equipment, transport equipment and
ground transport--technology intensive sectors that are
essential for trade, national security, and economic growth.
Moreover, R&D in general is underfunded. In 1990, for
example, the nation as a whole invested only 1.9 percent of
GDP on non-defense R&D as compared with 3 percent in Japan
and 2.7 percent in Germany.
A major problem facing American competitiveness is the lag
of American firms in converting technological advances into a
competitive advantage in the marketplace--the
``commercialization'' of technology. We continue to lead the
world (albeit by a shrinking amount) in new inventions. Firms
in other countries, however, seem to do better at converting
new ideas--including American ideas--into the third, sixth
and tenth iteration of the product that captures markets. Our
smaller firms are often unable to grow successfully beyond
the new venture stage, and our larger firms often seem unable
to sustain the continual flow of improvements in process and
product that is necessary to meet ever-more vigorous foreign
competition. Unfortunately it remains largely correct that
``Americans are good starters while the Japanese (and
others) are better finishers.'' Flat panel displays and
robotics are two prime examples of this pattern.
Furthermore, with five of the top ten recipients of US
patents in 1991 being Japanese firms, we cannot be assured
of our lead in invention for the future.
Our Subcouncil on Critical Technologies concluded that US
companies, universities, and the federal government have
undervalued the importance of making continual improvements
to products and processes, and of manufacturing in general.
As noted in our First Annual Report, federal technology
policy has contributed to the problem by focusing primarily
on esoteric defense technologies and on scientific break-
throughs rather than on areas that will provide the greatest
economic benefits and commercial follow-throughs.
To improve and accelerate the commercialization of US
technology, both industry and government must substantially
increase the resources devoted to R&D, on process
technologies in manufacturing. US manufacturing industries
currently invest about $76 billion annually in privately-
funded R&D, a little over 1 percent of GDP. Japanese and
German industry invest closer to 2 percent of their GDP
(Figure 5). The difference shows up clearly in the relative
roles of manufacturing industries in the three countries'
economies: manufacturing's share of GDP in 1989 in the United
States was 19.3 percent, but far greater in Germany (31.1%)
and Japan (28.9%).
[Graphics not reproducible in the Record.]
There must also be a renewed effort to disseminate
technological ``best practices'' throughout industry. With
proper reforms, government funding and technical resources
can provide incentives and leverage private sector
investment, requiring little if any net increase in
government spending.
The Council endorses a number of technology proposals
developed by our Manufacturing Subcouncil and our Subcouncil
on Critical Technologies. First, private sector R&D should be
stimulated and expanded by implementation of a new innovation
and commercialization tax credit (ICTC):
R&D on process improvements (in addition to R&D which
occurs before the ``first article of production'') should
clearly be eligible for the credit. This will support
continual improvements in process as well as product
technology.
The credit should be made permanent to provide a solid
basis for long-term corporate planning.
The credit should apply to incremental expenditures, as
recommended by our Subcouncil on Critical Technology. Our
Manufacturing Subcouncil prefers that the credit apply to all
research and development spending at a much lower rate.
An additional 25 percent credit should be allowed for
industry-sponsored university research, in light of the wide
benefits of such research and the desirability of linking
university research to industry needs. Most university
research is now government funded.
To help overcome corporate reluctance to test traditional
antitrust tenets, an additional 10 percent credit could be
allowed for the first two years of new R&D consortia
registered under the Cooperative Research Act of 1984, such
as SEMATECH or the Advanced Battery Consortium.
Second, the government should reorient its own R&D spending
from purely military to civilian and dual-use R&D. At the
height of the Cold War, almost two-thirds of all government
R&D went for narrow military purposes. That ratio has already
declined to less than 60 percent and should fall to 50
percent in the coming years. As major defense systems are
delayed or cancelled, the reductions in development and
testing budgets--a range of perhaps $4 to $8 billion--should
be applied to civilian and dual-use R&D. Defense research and
exploratory development should be kept strong but the new R&D
budget should also emphasize generic technologies including
new materials, biotechnology, computers and especially
manufacturing processes. The White House Office of Science
and Technology Policy (OSTP) should ensure that the efforts
of all the agencies--civilian and defense--are better
coordinated and better integrated with those of the private
sector, as has been done for high-performance computing and
communications.
Third, some of these funds should be used to expand federal
support for cooperative projects in areas of strong industry-
government mutual interest such as manufacturing processes,
improving energy efficiency, developing environmentally
benign products, improving the national information
infrastructure, and technologies for improved health care and
education. Specific steps include:
Encouraging the Defense Advanced Research Projects Agency
(DARPA) and the military services to actively promote dual
use technologies. Evidence of potential commercial utility
should be a plus, not a minus, in evaluating projects that
are otherwise significant for national security needs.
Expanding the Advanced Technology Program in the Department
of Commerce to an annual program level of about $750 million.
Allocating 10 to 20 percent of the resources of the multi-
program labs operated by the Department of Energy, of the
NASA labs, and of selected Defense Department labs to jointly
planned and jointly funded industry-government R&D on the
basis of model Cooperative Research and Development
Agreements (CRADAs) with private firms. Lab directors should
be able to enter into these partnerships without long delays
and micromanagement from their agencies.
Modifying federal procurement rules to make the federal
government a better consumer of leading edge technologies.
Authorizing on a pilot basis DARPA, the Department of
Commerce, the National Institutes of Health and perhaps
others, such as the National Science Foundation's Engineering
Research Centers, to participate directly in the
commercialization of technologies they have supported,
through equity participation or loans, increased both their
incentive to foster business successes and their funding for
future efforts.
Requesting the Department of Commerce to explore ways to
facilitate filing for foreign patents by American
universities, perhaps involving a revision of the overhead
rules.
cooperative government--industry technology programs
A number of cooperative government--industry R&D programs
were started in the 1980s, aimed at developing generic
industrial technologies and building cooperation across
industry, academia, and government. Key characteristics of
such programs are industry participation in project planning,
funding, evaluation, and personnel exchanges.
The Advanced Technology Program. A key missing piece in the
commercialization of technology is the R&D that falls between
basic research (often federally-funded) and specific product
development (usually industry-funded). This stage is known as
precompetitive or generic R&D and is the focus of the
Advanced Technology Program (ATP) within the Department of
Commerce. ATP was established in 1988 to support private
sector development of promising generic technologies. Project
proposals are submitted by private sector businesses and
joint ventures, and awards are made competitively based on an
external expert review of their technical merit and business
potential.
SEMATECH. SEMATECH is an industry-government funded,
industry-led R&D consortium created in 1987 to recapture US
leadership in semiconductor manufacturing technology. Member
companies set the research agenda and contribute at least
half of the $200 million in annual funding and approximately
60 percent of the technical personnel. A recent General
Accounting Office review found that SEMATECH's technical
progress is on schedule and that SEMATECH has led to improved
cooperation among semiconductor makers and between
semiconductor makers and their suppliers. Most observers
credit SEMATECH with helping the US semiconductor industry
and the semiconductor equipment industry regain global market
share.
Engineering Research Centers. The National Science
Foundation established its first Engineering Research Centers
in 1985 to foster an interdisciplinary, team oriented
approach to engineering and to speed the conversion of
advances in fundamental research in universities into
competitive products and processes in the marketplace. There
are currently 18 centers at major US universities in such
critical technology fields as bioprocessing and biomedical
engineering optoelectronics, microelectronics and
communications; and manufacturing and design. The centers are
jointly funded by government and industry and are evaluated
in part on their contribution to competitiveness and degree
of interaction with industry.
____
Critical Technologies Subcouncil
Chairman: Erich Bloch, Distinguished Fellow, Council on
Competitiveness, (President Reagan's USF Director).
David W. Cheney, Staff Director.
membership
Eleanor Baum, Dean, Albert Nerken School of Engineering,
Cooper Union;
Frederick M. Bernthal, Deputy Director, National Science
Foundation;
Sherwood L. Boehlert, U.S. House of Representatives;
Michael G. Borrus, Co-director, Berkeley Roundtable on
International Economics;
Rick Boucher, U.S. House of Representatives;
Lewis M. Branscomb, Professor, Harvard University;
Daniel Burton, Executive Vice President, Council on
Competitiveness;
Dennis Chamot, Executive Assistant to the President,
Department of Professional Employees, AFL-CIO;
John Deutch, Professor, MIT;
John W. Diggs, Deputy Director for Extramural Research,
Department of Health and Human Services;
Craig Fields, President and CEO, MCC;
Edward B. Fort, Chancellor, North Carolina Agricultural and
Technical State University;
John S. Foster, Consultant, TRW, Inc., and Chairman,
Defense Science Board;
William Happer, Director, Office of Energy Research, US
Department of Energy;
Joseph S. Hezir, Principal, EOP Group, and former Deputy
Assistant Director, Energy and Science Division, OMB;
Richard K. Lester, Director, Industrial Performance Center,
MIT;
John W. Lyons, Director, National Institute for Standards
and Technology;
Daniel P. McCurdy, Manager, Technology Policy, IBM;
Joseph G. Morone, Professor, Rensselaer Polytechnic
Institute, School of Management;
Al Narath, President, Sandia National Laboratories;
Richard R. Nelson, Professor, Columbia University;
William D. Phillips, Former Associate Director of
Industrial Technology, Office of Science & Technology Policy;
Lois Rice, Guest Scholar, Brookings Institution
Nathan Rosenberg, Director of Program for Technology &
Economic Growth, Stanford University;
Howard D. Samuel, President, Industrial Union Department,
AFL-CIO
Hubert J.P. Schoemaker, President and CEO, Centocor, Inc.;
Charles Shanley, Director of Technology Planning, Motorola
Inc.;
Richard H. van Atta, Research Staff Member, Institute for
Defense Analyses;
Robert M. White, Under Secretary for Technology, US
Department of Commerce;
Eugene Wong, Associate Director of Industrial Technology,
Office of Science & Technology Policy, (Bush administration).
Mr. HOLLINGS. Mr. President, addressing the charge that there is too
much money. Amongst other things, the report said:
Second, the Government should reorient its own R&D spending
from purely military to civilian and dual-use R&D. At the
height of the cold war, almost two-thirds of all Government
R&D went for narrow military purposes. That ratio has already
declined to less than 60 percent and should fall to 50
percent in the coming years. As major defense systems are
delayed or cancelled, the reductions in development and
testing budgets--a range of perhaps $4 to $8 billion--should
be applied to civilian and dual-use R&D.
Let me repeat that--that $4 to $8 billion should be applied to
civilian and dual-use R&D.
The total amount would be $1.37 billion for next year, and for 1996,
$1.4 billion.
And here, this Critical Technologies Subcouncil, that is an impartial
group of scientists, engineers, college presidents, and research
directors in the field of technology, they asked for a range of $4 to
$8 billion. I quote:
Defense research and exploratory development should be kept
strong but the new R&D budget should also emphasize generic
technologies including new materials, biotechnology,
computers, and especially manufacturing processes* * * some
of these funds should be used to expand Federal support for
operative projects in areas of strong industry-Government
mutual interest such as the manufacturing processes,
improving energy efficiency, developing environmental benign
products, improving the national information infrastructure,
and technologies for improved health care and education.
Now we have added in the national information infrastructure, as
well. We are only at $1.4 billion. We do not get to the bottom figure
of $4 to $8 billion. We look at the big picture, $70 billion in
research, and we say that of $70 billion, let us allocate to
commercialization and manufacturing some fraction of that, $4 to $8
billion. When we come year after next, 2 years from now, the sum is
$1.4 billion--a quarter of the amount recommended.
They say, too big, too big, and this is a Bush program gone awry. It
is not a Bush program. Oh, no, I can tell you. I had to fight for this
one, and he did not like it. We heard all of that nonsense about
industrial policy. At the same time we were trying to get Avtech, an
aviation consortium. When they got Sematech for semiconductors, they
did not mind industrial policy for their particular interests. But when
it came to industrial policy for all technology, then they started
squawking. Then came the election of November 1992, with the call to
get this country moving. Americans had had enough of the negative
industrial policy of the eighties, losing 2 million jobs and losing our
manufacturing backbone in this country.
Right to the point, I read: ``Expanding the Advanced Technology
Program in the Department of Commerce to an annual program level of
$750 million.''
Now look at the Advanced Technology Program under this bill. Instead
of $750 million, we asked for $475 million for 1995 and $575 million
for 1996, 2 years out. We have not gotten to that so-called Bush
figure.
When the impartial groups meet, we can go--and I think I should at
this time, by emphasis on money, I mean right now the funding for
extension centers is $30 million. Yet recently, McDonnell Douglas in
St. Louis, MO, just won a $42.9 million research program. Now that is
one single research program.
We are trying to bring this into perspective. For the understanding
of everybody, yes, there is the bill by the distinguished Senator from
Pennsylvania and the distinguished Senator from New Mexico. And so far
it is all into this particular bill. There will be other bills perhaps.
But this is the one adopted by the administration and a consensus of
Senators and Congressmen on both sides of the aisle, and that is why it
has been unanimous and we said let us come on in and let us get it
going because we have the instrumentality. The bill relies on peer
review. It is a merit selection process initiated by the industry
itself.
And I cannot overemphasize, Mr. President, that while we were talking
about the need for a growth policy, the Bush administration was
opposing, was offering absolutely nothing. At that time, we had the MIT
study about America regaining its productive edge.
I ask unanimous consent that this study be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Made in America--Regaining the Productive Edge
(By Michael L. Dertouzos, Richard K. Lester, Robert M. Solow, and the
MIT Commission on Industrial Productivity)
introduction
To live well, a nation must produce well. In recent years
many observers have charged that American industry is not
producing as well as it ought to produce, or as well as it
used to produce, or as well as the industries of some other
nations have learned to produce. If the charges are true and
if the trend cannot be reversed, then sooner or later the
American standard of living must pay the penalty.
The indictment of American industry has multiple counts.
Products made in the United States are said to be inferior to
foreign goods; this complaint extends both to consumer
products, such as cars and clothing, and to industrial
commodities, such as steel and semiconductor chips. American
factories are accused of inefficiency; the work force is said
to be indifferent and ill-trained; and managers are
criticized for seeking quick profits rather than pursuing
more-appropriate long-term goals. Designers, engineers, and
the research community are also named in the indictment, on
the grounds that America's best technology has been surpassed
in many fields.
Some of the charges can be backed up by quantitative
evidence. The United States buys far more overseas than it
can sell in other countries, which has resulted in a huge
current-account deficit: $161 billion in 1987. Most of this
imbalance is generated by trade in manufactured goods. Growth
in productivity, a crucial indicator of industrial
performance, has been slower in the past 15 years than it was
for at least two decades before; moreover, the rate of
productivity improvement in the United States has fallen
behind that in several Western European and Asian nations.
Certain American industries that once dominated world
commerce--automobiles and steel come immediately to mind--
have lost much of their market share both at home and abroad;
in a few industries, attitudinal complexes compete with one
another. Only an extraordinary optimist could believe, for
example, that the current wave of takeover activity is an
efficient way to deal with the organizational deficiencies
of American industries. In at least one respect, its
tendency to favor short time horizons, we believe it is
part of the problem, not part of the solution.
Why Manufacturing Matters
The Commission has concentrated much of its effort on
identifying and prescribing cures for weaknesses in
manufacturing performance. But how important is
manufacturing? Its share of total employment, more than 30
percent not long after World War II, has been shrinking
steadily and is now below 20 percent. Meanwhile, employment
in the service sector has been increasing both in absolute
terms and as a share of the total. By this measure, at least,
manufacturing is less important than it was in the past.
Indeed, some see a transition from manufacturing to services
as an inevitable and desirable stage in the economic
development of the nation, with the U.S. increasingly leaving
manufacturing to other countries.
We think this idea is mistaken. A large continental economy
like the United States will not be able to function primarily
as a producer of services in the foreseeable future. One
reason is that it would have to rely on exports of services
to pay for its imports, and this does not seem realistic. In
1987 gross U.S. exports of services, excluding income from
overseas investments and overseas sales of government
services, were worth about $57 billion, whereas the total
value of goods and services imported into the United States
was about $550 billion. Trade in services is increasing, to
be sure, and the United States is among the world's largest
exporters of services. Imports as well as exports of services
have been growing rapidly, however, and U.S. trade in
services, excluding official transactions and investment
income, is approximately in balance.
The notion that the United States could eventually become
almost exclusively a producer of services is all the more
implausible when it is recognized that all of the
manufactured goods now produced domestically would have to be
imported (and hence paid for with exports of services). In
1987 the total value of manufactured goods purchased in the
United States was about $1 trillion, nearly 20 times the
volume of services exported. Moreover, the long-term trend in
the United States is toward increased demand for
manufactured goods. Between 1960s and 1986 total spending
on manufactured goods other than food and fuel in the
United States increased threefold in real terms. In short,
it is unreasonable to expect that the United States could
achieve a trade surplus in services large enough to
satisfy its huge appetite for manufactured goods, if all
such goods had to be imported.
There is also reason to believe that if large sections of
American manufacturing industry were ceded to other
countries, high-wage nonmanufacturing industries would follow
them, including many of the service industries that provide
inputs to manufacturing, such as design and engineering,
payroll, inventory and accounting, finance and insurance,
transportation, repair and maintenance of plant and
equipment, testing services, and the like. According to a
recent estimate by the Congressional Office of Technology
Assessment, private service industries supplied 17 cents of
inputs toward each dollar of manufacturing output.
The United States thus has no choice but to continue
competing in the world market for manufactures. The ultimate
scale of American manufacturing industry is not known, but it
will not be trivial. The important question is not whether
the United States will have a manufacturing industry but
whether it will compete as a low wage manufacturer or as a
high-productivity producer.
If labor and capital were perfectly mobile across national
borders, there would be less need to worry about the
viability of American industry. Labor and capital resident in
the United States would earn what they could elsewhere, or
they would go elsewhere. But labor is far from mobile
internationally, and capital, while more mobile, is not
perfectly mobile. Hence, the best way for Americans to share
in rising world prosperity is to retain on American soil
those industries that have high and rapidly rising
productivity. Manufacturing, and high-technology
manufacturing in particular, belongs in this category.
A related fact is that manufacturing firms account for
virtually all of the research and development done by
American industry. They thus generate most of the
technological innovations adopted both inside and outside
their own industry. High technology manufacturing industries
account for about three-quarters of all funding for research
and development, and the other manufacturing industries
account for most of the rest. The roots of much of the
technological progress responsible for long-term economic
growth can ultimately be traced to the nation's manufacturing
base. Because of this connection, high-technology and
high-value-added services as well as products depend on
the presence of a healthy, technologically dynamic
manufacturing sector.
Finally, even if all the economic arguments for the
importance of manufacturing were somehow rendered moot, the
nation's manufacturing base would still remain fundamentally
important to national security. The Department of Defense has
estimated that it purchases about 21 percent of the gross
product of U.S. manufacturing industries and over a third of
the output of high-technology manufacturing industries; it
depends on virtually every sector of the manufacturing base
for its materiel. For the nation to become heavily dependent
on foreign technology for its defense would be politically
and militarily untenable.
These arguments for the importance of manufacturing still
do not explain why it is the exclusive focus of the
Commission's report. Manufacturing may be essential, but it
accounts for less than a fourth of the GNP and for less than
a fifth of all employment. Further, manufacturing is
certainly not the only troubled sector of the economy; as
shown in table 2.1, productivity growth in many
nonmanufacturing industries has been significantly worse.
Since these other segments now account for such a large part
of the economy, progress in them is essential; the nation
cannot sustain an overall improvement in its standard of
living without them, no matter how well manufacturing
performs.
Again, then, why did the Commission study only
manufacturing? In part, we were choosing the segment of the
economy with which MIT, an institution with technology at its
core, has the closest ties; we chose it because we know it
best. We should also acknowledge that the choice may have
caused us to miss certain causes of productivity weakness or
opportunities for productivity growth. We suspect that one
such neglected area may be low productivity among white-
collar workers, which is emerging as a particularly serious
problem in the services sector and which deserves more
careful attention than we have been able to give it.
____
technological weaknesses in development and production
In the postwar years the United States invested heavily in
research, and the investment paid off, sometimes in
surprising ways. Basic research, undertaken for its own sake,
often led to commercial applications that could not have been
predicted at the outset. Likewise, research for defense needs
generated innovations useful for the civilian economy. These
experiences shaped current expectations for science and
technology.
There are important truths embodied in these expectations.
Investment in basic scientific and engineering research is
essential for long-term economic growth. Defense research can
bear commercial fruit. But the nation's technological
strength depends on far more than the health of its research
laboratories, important as that is. Prowess in research does
not lead automatically to commercial success. New ideas must
be converted into products that customers want, when they
want them, and before competitors can provide them, and the
products must be made efficiently and well. Ralph Gomory of
IBM recently observed, ``You do not have to be the science
leader to be the best consumer of science, and you do not
have to be the best consumer of science to be the best
product manufacturer.''
The United States is still unarguably the leader in basic
research. The scale of its scientific enterprise is
unequaled, and it is second to none in making new
discoveries. Yet U.S. companies increasingly find themselves
lagging behind their foreign rivals in the commercial
exploitations and discoveries. Transistor radios, color
televisions, videocassette reorders, and numerically
controlled machine tools are just a few examples of products
now dominated by foreign manufacturers, even though the major
enabling technological advances were first made in the United
States.
There is irony in this situation. The industrial lead built
up by the United States earlier in the century rested in no
small part on its superior performance in exploiting
inventions made elsewhere. Later, during the first two
decades of the postwar era, American firms dominated the
early stages of the product cycle in most industries. Because
of the unrivaled strength of the nation's research base and
the industrial weaknesses of other countries, U.S. firms were
almost always first to market with new products. In many
cases overseas rivals eventually did acquire the technology,
and their lower labor costs sometimes enabled them to
manufacture the products more cheaply. By then, however, the
American firms had moved on to the next generation of new
products.
Today the industrial nations of Europe and Asia have
greatly expanded their technological capabilities. They can
understand and rapidly capitalize on promising technological
discoveries made anywhere in the world. They have also
developed their own private and public research
establishments. The emphasis of their research is somewhat
different, however. They have focused on applied research and
on product and process development. As a result, they have
greatly shortened the time between discovery and
commercialization.
In the United States, meanwhile, outstanding successes in
basic science and in defense research have left the product-
realization process a poor cousin. As firms in other
countries have improved their capabilities in these
downstream areas, shortcomings have become evident in the
performance of American industry in developing new products,
engineering them, and manufacturing them. Specifically, our
industry studies have revealed several closely related
deficiencies in this area. American companies evidently find
it difficult to design simple, reliable, mass-producible
products; they often fail to pay enough attention at the
design stage to the likely quality of the manufactured
product; their product-development times are excessively
long; they pay insufficient attention to manufacturing
processes; they take a reactive rather than a preventive
approach to problem solving; and they tend to under-exploit
the potential of continuous improvement in products and
processes.
Who Is to Blame?
The persistent failures of American industry to convert
technologies into products have several root causes. In
earlier chapters of this book industrial managers and
executives have already been accorded a generous share of the
blame. In the immediate postwar years they were complacent;
they held stubbornly to an outmoded mass-production model;
they set inappropriate financial goals; they relegated
product realization and production engineering to second-
class status; and they failed to make the investments in
plant, equipment, and skills necessary for timely product
development and efficient manufacturing.
But managers are not the only responsible parties; another
detrimental influence has been the apparent indifference of
government. Whereas the governments of most other industrial
nations have actively and explicitly promoted research and
technology for economic development, U.S. policy for science
and technology has traditionally focused on basis research
and paid much less attention to the commercial development
and application of new technologies. The latter has been seen
as the responsibility of the private sector. The Department
of Defense, NASA, and other government agencies have invested
heavily in technology development, but usually with specific
missions in mind; commercial spinoffs are sometimes cited by
those promoting the programs, but little is done to foster
commercial exploitation. Recently, as concern about the
nation's competitiveness has grown, the government has begun
to assume a more active role in supporting the
commercialization of technology. In the main. though, these
efforts have focused on the commercialization of new
products. Only very recently (in programs such as Sematech,
the National Center for Manufacturing Sciences, and the
Industrial Base Initiative, sponsored by the Department of
Defense) has the federal government paid much attention to
questions of manufacturability and process technology.
Mr. HOLLINGS. Starting right there with the very first sentence: ``To
live well, a nation must produce well.''
Now we are not legislating here about government regulations. That is
an ancillary issue, outside the scope of this bill. We do not have
anything in the 140-some pages to do the regulatory matters related to
the banking industry or Davis-Bacon in labor or environmental impact
statements or economic impact statements or paperwork or any of these
other things.
``To live well, a nation must produce well.''
It goes on to say:
The Commission has concentrated much of its effort on
identifying and prescribing cures for weaknesses in
manufacturing performance. But how important is
manufacturing? Its share of total employment, more than 30
percent not long after World War II, has been shrinking
steadily and is now below 20 percent.
This is 5 years ago in 1989:
Meanwhile, employment in the service sector has been
increasing both in absolute terms and as a share of the
total. By this measure, at least, manufacturing is less
important than it was in the past. Indeed, some use a
transition from manufacturing to services as an inevitable
and desirable stage in the economic development of the
nation, with the U.S. increasingly leaving manufacturing to
other countries.
We think this idea is mistaken. A large continental economy
like the United States will not be able to function primarily
as a producer of services in the foreseeable future. One
reason is that it would have to rely on exports of services
to pay for its imports, and this does not seem realistic.
Going on:
There is also reason to believe that if large sections of
American manufacturing industry were ceded to other
countries, high-wage nonmanufacturing industries would follow
them, including many of the service industries that provide
inputs to manufacturing, such as design and engineering,
payroll, inventory and accounting, finance and insurance,
transportation, repair and maintenance of plant and
equipment, testing services, and the like. * * *
The United States thus has no choice but to continue
competing in the world market for manufacturers. The ultimate
scale of American manufacturing industry is not known, but it
will not be trivial. The important question is not whether
the United States will have a manufacturing industry but
whether it will compete as a low-wage manufacturer or as a
high-productivity producer.
If labor and capital were perfectly mobile across national
borders, there would be less need to worry about the
viability of American industry. Labor and capital resident in
the United States would earn what they could elsewhere, or
they would go elsewhere. But labor is far from mobile
internationally, and capital, while more mobile, is not
perfectly mobile. Hence, the best way for Americans to share
in rising world prosperity is to retain on American soil
those industries that have high and rapidly rising
productivity. Manufacturing, and high-technology
manufacturing in particular, belongs in this category.
A related fact is that manufacturing firms account for
virtually all of the research and development done by
American industry. They thus generate most of the
technological innovations adopted both inside and outside
their own industry. High technology manufacturing industries
account for about three-quarters of all funding for research
and development, and the other manufacturing industries
account for most of the rest. The roots of much of the
technological progress responsible for long-term economic
growth can ultimately be traced to the nation's manufacturing
base. Because of this connection, high-technology and high-
value-added services as well as products depend on the
presence of a healthy, technologically dynamic manufacturing
sector.
Going on, Mr. President, I do not want to have to read the entire
matter. But let us say this:
In the postwar years the United States invested heavily in
research, and the investment paid off, sometimes in
surprising ways. Basic research, undertaken for its own sake,
often led to commercial applications that could not have been
predicted at the outset. Likewise, research for defense needs
generated innovations useful for the civilian economy. These
experiences shaped current expectations for science and
technology.
There are important truths embodied in these expectations.
Investment in basic scientific and engineering research is
essential for long-term economic growth. Defense research can
bear commercial fruit. But the nation's technological
strength depends on far more than the health of its research
laboratories, important as that is. Prowess in research does
not lead automatically to commercial success. New ideas must
be converted into products that customers want, when they
want them, and before competitors can provide them, and the
products must be made efficiently and well. Ralph Gomory of
IBM recently observed, ``You do not have to be the science
leader to be the best consumer of science; and you do not
have to be the best consumer of science to be the best
product manufacturer.'' * * *
Yet U.S. companies increasingly find themselves lagging
behind their foreign rivals in the commercial exploitation of
inventions and discoveries. Transistor radios, color
televisions, videocassette recorders, and numerically
controlled machine tools are just a few examples. . . .
Today the industrial nations of Europe and Asia have
greatly expanded their technological capabilities. They can
understand and rapidly capitalize on promising technological
discoveries made anywhere in the world. They have also
developed their own private and public research
establishments. The emphasis of their research is somewhat
different, however. They have focused on applied research and
on product and process development. As a result, they have
greatly shortened the time between discovery and
commercialization.
In the United States, meanwhile, outstanding successes in
basic science and in defense research have left the product-
realization process a poor cousin.
* * * * *
The persistent failures of American industry to convert
technologies into products have several root causes.
They go down and list these things. But managers are not
the only responsible parties; another detrimental influence
has been the apparent indifference of government. Whereas the
governments of most other industrial nations have actively
and explicitly promoted research and technology for economic
development, U.S. policy for science and technology has
traditionally focused on basic research and paid much less
attention to the commercial development and application of
new technologies.
Then it goes on to talk about how we ought to join together with the
private sector.
Mr. President, I ask unanimous consent that an editorial dated April
6, 1992 in Business Week, be printed in its entirety in the Record
here.
There being no objection, the editorial was ordered to be printed in
the Record, as follows:
Forging a Growth Policy for America
Call it the light bulb theory of growth. For some years
now, America's most competitive companies have been its
brainiest, the ones making the supercomputers and cellular
phones, the spreadsheets and the synthetic drugs--the new
products that dot our high-tech lives. In the global-growth
sweepstakes, these companies lead the pack, and their
competitors overseas in similar cutting-edge industries have
become formidable opponents. They all rely on ideas--ideas
for raw materials, product designs, manufacturing processes,
and, ultimately, for commercial products.
In such an environment, knowledge counts for more than
capital or labor. The nations that will prosper will be those
that create new knowledge best and are able to transform it
most effectively into new products and technologies. The end
of the cold war with its prospect of big defense cutbacks
breathes new life into an old question: Should the U.S. have
a policy to promote technology and industry? We say the
government must have an important role in spurring the
attainment of knowledge and the generation of ideas,
including research and development, scientific and technical
education, the diffusion of technological knowledge, and help
to industry in exporting science- and technology-based
products (page 70).
America needs a new growth policy for the 1990s, an
industrial policy that acknowledges that ideas drive growth.
Government should provide a fertile environment for
individuals, companies, and industries to pursue new ideas
and new techniques, and it should be willing to spend money
and even lose money today in order to ensure more vigorous
growth tomorrow. Supporting tuition for engineering and
science students and making the research and investment tax
credits permanent would be good moves. So, too, would
reallocating defense R&D spending toward civilian R&D.
And because so many people across so many industries
benefit from ideas that serve as building blocks for new
technologies and products, it's not right to assume that
individuals or individual companies can or even should
shoulder all the costs of developing new ideas. Even today,
the U.S. government is supporting supercomputing and biotech
research. Some basic ideas are, in economists' parlance,
public, or at least quasi-public, goods and deserve to
received public financing.
The critics will chorus that government shouldn't interfere
with the marketplace. An industrial policy, they argue, puts
government in the position of picking winners and losers. An
industrial policy costs billions of dollars. An industrial
policy smacks of central planning, the critics charge, citing
the catastrophic failure of the Soviet command economy.
A coherent, knowledge-based growth policy can avoid the
pitfalls the critics worry about. First, policies must be
designed in such a way that no particular industries are
favored. Parceling out research dollars via a scientific
peer-review process and requiring business to make matching
investments in some cases should protect the process from
being hijacked by political interests. Shifting federal
dollars out of other existing programs, such as military R&D
spending, is one way to hold down costs. No, America doesn't
want a Ministry of International Trade & Industry or a
Gosplan. But even in the former Soviet Union, the diversion
of good ideas to the defense industry produced some
unparalleled high-tech accomplishments, just as in the U.S.,
the diversion of talent and resources to the defense sector
brought new advances. It's clear that when government sets
out to achieve something, the returns can be high. In the
post-cold-war world of ideas, industry and government can be
partners for growth.
Mr. HOLLINGS. That is where, amongst others who testified before us
who said let us get going, we put it on the trade bill. As a result of
having put it on the trade bill we had a hard time: No, this is not the
Bush policy, this is not the Bush figure. But it is far below the
figures recommended by all the private sector; far below the figures,
$143 million, that the ranking member, formerly Chairman of Commerce
under President Reagan, voted for. It is $143 million less--this is
what we are recommending here rather than what Senator Danforth voted
for:
The end of the cold war with its prospect of big defense
cutbacks breathes new life into an old question: Should the
U.S. have a policy to promote technology and industry? We say
the government must have an important role in spurring the
attainment of knowledge and the generation of ideas,
including research and development, scientific and technical
education, the diffusion of technological knowledge, and help
to industry in exporting science- and technology-based
products.
The report anticipated the critics:
The critics will chorus that government shouldn't interfere
with the marketplace. An industrial policy, they argue, puts
government in the position of picking winners and losers. An
industrial policy costs billions of dollars. An industrial
policy smacks of central planning, the critics charge, citing
the catastrophic failure of the Soviet command economy.
A coherent, knowledge-based growth policy can avoid the
pitfalls the critics worry about.
That is why I want to allude to this particularly, because this is
what we have in this bill:
First, policies must be designed in such a way that no
particular industries are favored.
That is the Advanced Technology Program, the extension, and services
outreach centers. I will state that again: ``Can avoid these
pitfalls.'' We thought the same thing. We are not pell-mell down the
road, and we are certainly not with any Bush policy, you are right:
First, policies must be designed in such a way that no
particular industries are favored. Parceling out research
dollars via a scientific peer-review process and requiring
business to make matching investments in some cases should
protect the process from being hijacked by political
interests. Shifting federal dollars out of other existing
programs, such as military R&D spending, is one way to hold
down costs.
That is when you get the so-called cuts in defense, permitting the
increases here. We are not increasing anything in the overall. In fact
it is a net loss. We are cutting back, really, both. We cut back what
the Senator from Missouri and the Senator from South Carolina, leading
on this bill, voted for in the Commerce Committee last year in June
when we reported the bill:
No, America doesn't want a Ministry of International Trade
& Industry or a Gosplan. But even in the former Soviet Union,
the diversion of good ideas to the defense industry produced
some unparalleled high-tech accomplishments, just as in the
U.S., the diversion of talent and resources to the defense
sector brought new advances. It's clear that when government
sets out to achieve something, the returns can be high. In
the post-cold-war world of ideas, industry and government can
be partners for growth.
That is the business world talking. As I read the amendment of the
Senator, he said kill it. I would hope the Senator does not want to
kill the modest momentum we have going, bearing in mind that this is
far less than what we voted for. It has been cut back and it is far
less than what the business leadership, the technological world says it
ought to be: $4 billion to $8 billion. At best, 2 years from now we get
to $1.4 billion.
The PRESIDING OFFICER (Mr. Dorgan). The Senator from Wyoming.
Mr. SIMPSON. Mr. President, the Senator from South Carolina is very
instructive. I hear what he is saying. As far as numbers and history
and background regarding these measures, I leave those things in the
province of the chairman and the ranking member who is now on the
floor.
I can see there has been a response to my remarks about President
Bush. I do understand that. President Bush's proposal--and these
figures I do know because they come from the Congressional Record--was
for a manufacturing technologies bill. That was the very narrow scope
of it, limited only to manufacturing: $10 million for fiscal year 1993;
$145 million for fiscal year 1994; and fiscal year 1995 was $125
million. It went to the House, and the House raised it to $2.2 billion.
The House sent back a very broad-based bill, much broader in scope than
originally proposed, including manufacturing and other civilian
technology programs.
That is what happened to that legislation. It perished because of its
own greed and corporeal fat. So that was the end of that.
I listened to Senator Hollings' dissemination of the report he
cited--but there are some very interesting philosophical differences
the two parties have on the issue of competitiveness.
The purpose of my amendment is to deal with competitiveness and not
just deal with ``high tech.'' President Clinton said each nation is
``like a big corporation competing in the global marketplace.'' I think
that is quite revealing.
It suggests that if we erase the line between public and private
sectors, America will then be able to achieve its maximum potential
when it comes to being competitive in the international marketplace.
On page 3 of the committee report, this bill we are dealing with, we
are told:
The Department of Commerce has a leadership role to play in
this new era.
And this--
Expanded efforts at the Department of Commerce can be
important steps toward developing a comprehensive industry-
led national system to finance needed industrial
technologies.
And just down the page a bit in the report, we are told that
America's competitors are succeeding because they are being supported
by their governments. It is all right here in the committee report.
The premise of this S. 4 is a national industrial policy. That is in
the report of the committee. This grand assumption, I think, really
needs a closer look, because one international competitor of envy is
Germany. President Clinton has said on more than one occasion that
``Germany is the model.''
I lived there. I have a great affection for that country and its
leaders and its citizens. But let us examine Germany for a moment.
Germany's massive industrial policy appears to have done very little to
relieve the huge problems that confront that country's economy
presently. They have a skyrocketing unemployment rate of 12 percent.
Their work force is now 25 percent less productive than ours.
I must say, if there is a historically consistent role model of
success, it is not Japan, it is not Germany, it is the United States of
America. Ira Magaziner and Robert Reich wrote a book together in 1982
called ``Minding America's Business.'' The book advocated a U.S.
industrial policy by offering a quantitative basis for such policy.
They said:
Our standard of living can only rise if capital and labor
increasingly flows to industries with high value-added per
worker and if we maintain a position in those industries that
are superior to that of our competitors.
I guess if we were to follow the logic completely through, then we
should be further subsidizing the tobacco companies because they are by
far the No. 1 manufacturing sector in this country when it comes to
value-added per worker. No one can match tobacco companies on that
score. Oil refining, automobiles: Distant second, distant third.
So Ira Magaziner and Robert Reich are calling for an industrial
policy that would funnel capital and labor into the cigarette
industries. I do not think that will happen.
So you see, there will be somebody picking winners and losers under
their plan.
Finally, I simply add that, yes, technology is important and so are
high-tech firms, but the fact is there are other industries of equal
importance to this country. How about the oil and gas industry where I
come from, which has just gone into the ``bowwows.'' Out. Gone. And no
one is paying attention. We cannot get the ear of anyone as we talk
about relief for an oil and gas industry, which is truly on the ropes,
because of the cost of the product and because of Government
regulations, Mr. President. We are talking about the major source of
our energy, as long as we still like internal combustion machinery.
What about the uranium industry? Is it not ``high tech?'' It is the
``highest tech'' thing you can ever imagine. I bet they will not get
much out of this bill. I cannot imagine it. They are going to lose out
in the pick, and yet there are 109 reactors in this country. Pretty
high-tech stuff, too; about as high tech as you can get. They will not
be picked, you can bet on that.
So you see, maybe the opponents, when they use the phrase ``picking
winners and losers'' are wrong, but when you see the lists of the
potential participants and those who are going to be lined up on the
track for the ``great race,'' you can see that there will be pickers of
winners and losers just like a regular racetrack.
These are things that trouble me. I like the phrase ``high tech.'' I
think of what my good friend, Ed Markey, in the House said, when they
talk about the super information highway. He said the good news is we
have a new thing called the super information highway. He said the bad
news is nobody knows what it is. That is about where we are when we are
talking about high tech.
But if we are talking about something that is just distributed by the
Secretary of Commerce, even with a peer review, even with all the rest,
you can bet that industries that are really on the ropes will not be in
that selection process, and this is a very disturbing thing.
The amount of money is also disturbing to us. These are some of the
reasons for my amendment. If you really want to do something, then pass
our regulatory reform alternative and not just provide funds through
this process. Many of us think S. 4 will not accomplish anything more
than the mission--not of the Senator from South Carolina, but of the
administration--to enhance the position of the Department of Commerce
in America.
I have real concerns about that. That Department happens to be
operated by the person who was the chairman of the Democratic National
Committee, whether we like that or not. I do not want to be too
partisan, but that is who is there. He is very, very savvy, very
articulate and a very able man. He is looking for more ``turf,'' and he
is looking for more arena. He has the ear of his President because he
helped Bill Clinton get the title ``Mr. President.''
That is another aspect to this. I know that may detonate a great
miasma of clouds through the Chamber, and it is not intended to do
that. But these are some of the concerns of those on our side of the
aisle. What is the purpose, the real purpose of this unless it is
picking in the most adroit places and the most appropriate places to
ladle out some plenty big bucks?
It is odd that the high-tech firms are not in Wyoming, they are not
in North Dakota, they are not in Indiana. They are in the big places
like California and New York where there is much ground to be tilled
for 1996.
Mr. HOLLINGS addressed the Chair.
The PRESIDING OFFICER. The Chair recognizes the Senator from South
Carolina [Mr. Hollings].
Mr. HOLLINGS. Very few, I take it, in South Carolina, too.
But it is really disappointing to have injected in here the Secretary
of Commerce, who is a former chairman of the party. After all, we had
the former chairman of the Republican Party, who was President here for
4 years while we fought him, and then he finally came around to it.
The distinguished Senator from Wyoming talked very casually. There is
no program to be found that started off at $10 million and has gone to
$2 billion, something like he is talking about. What we did back then
is resolve the National Bureau of Standards into the National Institute
of Standards and Technology. And the Bureau of Standards is still
funded at $300 million in this one, less than any extension centers and
some of the others.
So it is very poor practice to lump together 2 years and say $2
billion something, when it is $1.2 billion for next year and $1.4
billion for 1996, including all of these programs of the National
Science Foundation and National Information Infrastructure and much
more. And then to go back and quote Ira Magaziner in 1982. Come on. We
marked up this bill--we never have had Ira Magaziner connected with
this bill in my life, and I have lived this bill since we started it
even before 1988. For the last 8 years, I have been knocking on the
door trying to get something. It was only part of an amendment.
I have other amendments over in the Finance Committee to do away with
the export sales offset and various other things of that kind, again
with respect to enforcing our dumping laws, with respect to enforcing
the free trade zones, with respect to transfer pricing to get the IRS
involved, and so on. This was part of a bill. I never heard of Mr.
Magaziner in relation to this bill. His field is health. He is not on
this particular score that I know of. And then to just quote him, so he
could drag in Ira Magaziner.
Of course, that side is in heat over Ira, which is obvious since
health care is on the griddle. There have been a few who have accepted
his statistics, so we just spread across the spectrum here the name Ira
Magaziner like he is associated with this bill. Likewise they invoke
the name of the former chairman of the Democratic Party. The name that
should be mentioned is Craig Fields, previously at DARPA in the
Department of Defense, and now a member of the Economic Competitiveness
Council, backed up by all the leaders of the National Science
Foundation. I cannot get a more outstanding group of scientists and
engineers, experts in technology, and everything else of that kind. It
is they who support this bill.
And then come and talk about the big bucks when it is less than what
we unanimously reported out in June of last year. The distinguished
Presiding Officer, as a member of the committee, realizes we have cut
it back. Last year, it was $1.513 billion. Now, instead of $1.513--
$1,513,000,000--this bill provides $1.370 billion for all of these
endeavors here listed. It is $143 million less than what Republican
colleagues on the committee supported.
The figures of the Senator here are totally inaccurate. His
explanation of the genesis of this is totally inaccurate. Everybody
knows. They cannot give one example. We have had Secretary Brown, the
former chairman of the party, administering this for over a year. Name
a center that he put in politically, or a grant that he has made
politically.
Well, they know that is sheer nonsense. They do not give any example.
They do not give any amendment. They just spew out all these nongermane
matters, and finally come around and say, well, we do not like it
because the former chairman of the party is the Secretary of Commerce.
This is a disgrace.
I yield the floor.
The PRESIDING OFFICER. Who seeks recognition?
Mr. BAUCUS addressed the Chair.
The PRESIDING OFFICER. The Chair recognizes the Senator from Montana
[Mr. Baucus].
Mr. BAUCUS. Mr. President, I rise in strong opposition to the Simpson
amendment, which attempts to add the provisions of S. 177, the Dole
Private Property Rights Act, to this bill.
Why do I oppose it? For a lot of reasons. First, this amendment would
write into law an executive order on takings; that is, takings under
the fifth amendment to the Constitution, signed not by President
Clinton, not by President Bush, but by President Reagan 6 years ago. It
would incorporate lock, stock, and barrel that executive order under
President Reagan signed 6 years ago. It would, therefore, carve into
legislative stone an Executive order which, as far back as 1988, the
Congressional Research Service concluded: First, overstated the
likelihood of a taking; second, was out of step with Federal case law
on takings; and third, had the potential to burden the implementation
of important Federal programs.
This amendment would saddle this President and all future Presidents
with what President Reagan's own Solicitor General, Charles Fried,
described as a quite radical plan to undermine Government's ability to
protect the health, safety, civil rights, and environment of all
Americans. In short, this amendment would make bad law.
How would this amendment make bad law? By writing into law the
provisions of Executive Order 12630, signed in March 1988 by then
President Reagan. That Executive order has three fatal flaws. First, it
interprets takings in a manner which goes far beyond any interpretation
by any Federal court. Second, it makes the Attorney General the czar of
all regulations promulgated by the executive branch. And third, it
chills the ability of Federal agencies to issue regulations to protect
our citizens' health, safety, civil rights, and environment.
Let me address each of these. First, by writing the Executive order
into law, the amendment undermines two centuries of Federal
jurisprudence defining what constitutes a taking in violation of the
fifth amendment of the Constitution. As recently as 1992, in the now
famous case of Lucas versus South Carolina Coastal Council, the U.S.
Supreme Court reaffirmed that property owners become entitled to
compensation for takings of their property when Government action
deprives them of all economically viable use of their property. The
Supreme Court essentially reaffirmed prior Supreme Court
interpretations of the fifth amendment.
The Executive order, however, declares that Government action may
result in a taking of private property--get this--even if there is only
a partial diminution in the value of property, even where there might
be temporary restrictions on the use of the property, or where there is
simply a delay in Federal Government decisionmaking.
I ask, Mr. President, what is a partial diminution? How much is
partial? Who decides how much is partial? What about temporary? How
temporary? Just a little bit temporary? Major temporary? How are we
going to decide? What Federal agency is going to decide how temporary?
What about delay? How much of a delay? A week? A day? A month? Two
years?
Mr. President, there is a reason that takings should properly be
decided in the judicial arena; that is, by courts, not by bureaucrats.
Courts decide what constitutes a taking under the fifth amendment of
the Constitution on a case-by-case basis. Each case is different, with
unique circumstances. If this Executive order passes, no regulation can
be issued until the Attorney General has certified that the agency has
determined there will not be a taking because of a partial diminution
of value or a temporary restriction of use or because there is a delay
in the agency's decision. Obviously, it is a process that cannot work.
The amendment before us would write the Executive order's extensive
and unjustified definitions of takings into the law. Broadening the
scope of potential takings in this manner would greatly increase the
potential liability of the American taxpayer for what up until now have
been legitimate forms of Government regulations designed to protect
Americans' health, safety, civil rights, and the environment.
Second, by legislating the Executive order, the amendment would make
the Attorney General the czar--or, in this case, the ``czarina''--of
all Federal regulations issued by any Federal agency.
The Executive order requires the Attorney General to issue guidelines
for agencies to follow to avoid takings in carrying out their
activities and to ensure that the policies of Federal agencies are in
line with the guidelines and the Executive order. The amendment
prohibits any new Federal regulations on any subject from taking effect
until the Attorney General has certified that the agency issuing the
regulations is in compliance with the Executive order. Thus, the
Attorney General could veto any Federal regulation issued by any agency
on the grounds that it does not comply with the Executive order's
interpretation of what constitutes a taking. Again, this is wide open;
a slight diminution; a slight delay; temporary restrictions. These
could be takings under the Executive order.
I have the highest regard for Attorney General Reno. However, I do
not believe that she should be passing final judgment on the wisdom of
regulations to control emissions of toxic substances under the Clean
Air Act, to determine whether a species should be listed as threatened
or endangered under the Endangered Species Act, or to establish factory
ventilation requirements under the Occupational Safety and Health Act.
If the Founding Fathers did not see fit to make the Attorney General
first among equals in the Cabinet, I do not see why we should allow
overzealous ideologues in an earlier administration to do so by
incorporating it into law today. I might add that Attorney General Reno
herself, in an April 26, 1993, letter to Senator Glenn, and in a March
9, 1994, letter to the majority leader, has expressed the
administration's opposition to the Dole bill and this amendment.
I ask unanimous consent that a copy of those letters be printed in
the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Office of the Attorney General,
Washington, DC, April 26, 1993.
Hon. John Glenn,
U.S. Senate,
Washington, DC.
Dear Senator Glenn: I am writing to express the
Administration's concern about S. 177, legislation that would
codify Executive Order 12630 issued by President Reagan in
1988. It is my understanding that an amendment to this effect
may be offered when the Senate considers your bill to elevate
the Environmental Protection Agency to Cabinet Department
status.
This legislation would require federal agencies to engage
in an additional, elaborate process of review of proposed
regulations. It would prohibit any regulation from becoming
effective until the Attorney General has certified that the
agency is in compliance with the terms of the Executive Order
``as in effect in 1991.''
This Administration is, of course, committed to protecting
the legitimate property rights of American citizens. We
believe, however, that freezing this Executive Order into law
would be unwise. Codifying the Order as it stood in 1991
would prevent this and any future administrations from
revising the Order to make it consistent with interpretations
of the law governing takings, as enunciated by the Supreme
Court. Finally, the legislation would create a private right
of action that would extend beyond that now available under
the Fifth Amendment to the Constitution.
I respectfully suggest that this legislation represents an
unnecessary incursion upon the executive authority of the
President and, accordingly, should not be adopted. Thank you
for your consideration of this important issue.
Sincerely,
Janet Reno.
____
Office of the Attorney General
Washington, DC, March 9, 1994.
Hon. George Mitchell,
Majority Leader, U.S. Senate,
Washington, DC.
Dear Senator Mitchell: I understand that a ``takings''
amendment may be offered to S. 4 that would in effect codify
Executive Order 12630, issued by President Reagan in 1988. I
write to restate this Administration's opposition to such an
amendment.
On April 26, 1993, I wrote Senator Glenn expressing concern
about a similar attempt to legislate a requirement that
federal agencies engage in an additional, elaborate process
of review of proposed regulations.
This Administration continues its commitment to protecting
the legitimate property rights of American citizens. However,
such an amendment could limit the ability of this and any
future administrations to revise the Order to make it
consistent with interpretations of the law governing takings,
as enunciated by the Supreme Court.
I respectfully suggest that this legislation represents an
unnecessary incursion upon the executive authority of the
President and, accordingly, should not be adopted. Thank you
for your consideration of this important issue.
Sincerely,
Janet Reno.
Mr. BAUCUS. Mr. President, third, this amendment, like the Executive
order, will chill the ability of Federal agencies to issue regulations
protecting Americans' health and safety, civil rights, and the
environment, or any thing else, for that matter. The Executive order
requires Federal agencies to perform ``Takings Implication
Assessments'' on virtually anything they do: regulations, proposed
regulations, proposed legislation, comments on legislation, and policy
statements. These Takings Implication Assessments are to be based on
the Executive order's erroneous and overbroad interpretation of what
constitutes a taking. Apply those incorrect standards, agencies will be
wary of incurring takings claims. Consequently, agencies may shy away
from adopting regulations governing the number of fire exits in food
processing plants, requiring employers to provide health insurance,
expressing a view on legislation to guarantee the civil rights of
disabled Americans, or requiring the cleanup of toxic waste in an
economically disadvantaged community.
With potential consequences like these, it is easy to see why this
amendment is opposed by diverse groups like the AFL-CIO, the American
Public Health Association, the National Citizens Coalition for Nursing
Home Reform, the National Trust for Historic Preservation, the National
Wildlife Federation, the United Steelworkers of America, and many
others.
Mr. President, as you can see, there are strong substantive reasons
why we should not adopt this amendment. But let me add one more reason:
The amendment presents a false choice between supporting and opposing
protection of private property rights. The amendment is billed as one
to protect private property rights. Vote for it, its proponents say,
and you will support protection of private property. Vote against it
and be branded as a foe of one of the most basic tenets of American
democracy--the right to property. Mr. President, it is not that simple.
There is an excellent article by Betsy Carpenter in the March 14,
1994, issue of U.S. News & World Report entitled, ``This Land Is My
Land,'' which describes the takings debate.
I ask unanimous consent that the complete text of the article be
included in the Record. Allow me, however, to now read a few excerpts
from this article:
[I]n fact, though America's land-use policies have been
among the freest in the world, private property rights have
never been absolute, say historians. Even in colonial
Massachusetts, property rights were sometimes abridged in the
interest of promoting social goals, says David Konig of
Washington University in St. Louis. To build and preserve a
sense of community, for example, villagers in many Puritan
towns weren't allowed to sell their land to outsiders or
build their homes more than half a mile from the meeting
house. There even were prohibitions on hunting--regulations
echoed in today's rules protecting endangered species. By the
late 1600's, for instance, deer populations had been so
ravaged by overhunting and habitat destruction that owners
were forbidden from killing deer on their property.
The fundamental rule, then as now, was that owners could
not use their land in any way that harmed the community,
according to John Humbach, a law professor at Pace University
in White Plains, N.Y. ``We've always agreed that some land
uses are socially intolerable,'' says Humbach. ``It's just a
matter of which are which.''
The article concludes with the following:
Ultimately, the controversy between land rights activists
and environmentalists boils down to the perennial question of
how to balance private rights with the public good. Though
the basic question has remained the same since the colonial
era, circumstances have changed--and greatly. Two hundred
years ago, when there was a superabundance of undeveloped
land and neighbors were often tens of miles away, it was
pretty hard to use land in a way that harmed the community.
Now, many parts of the country are densely settled, and
scientists have a much richer understanding of how countless
small assaults on the part of millions of individuals can
threaten a region's ecological health. Says Pace University's
Humbach: ``Property rights are important, but so is the
livability of the land.''
There being no objection, the material was ordered to be printed in
the Record, as follows:
[From U.S. News & World Report, Mar. 14, 1994]
This Land Is My Land--Environmentalism Is Colliding With the Rights of
Property Owners
(By Betsy Carpenter)
By all rights these should be glory days for
environmentalists. The nation's vice president is the author
of a green bestseller, and a battalion of environmental
leaders hold top administration jobs. Yet the movement is
faltering badly. From the newspaper oped columns to the
corridors of Congress, greens are under attack as elitists
who don't see or care about the problems of ordinary working
people. Moreover, the movement has suffered a string of
setbacks in Washington, D.C., including the recent departure
of a sympathetic Bureau of Land Management chief and the
defeat of a bill that would have elevated the Environmental
Protection Agency to departmental status.
These setbacks are only the opening volleys, however, of an
all-out war brewing between environmentalists and a
burgeoning force on the political landscape known as the
property rights movement. Land rights advocates are
challenging as unvarnished land grabs on the part of the
government a host of environmental laws, from the Clean Water
Act to the Endangered Species Act. Already, activists from
both camps have traded shots in state capitols and the
courts, and a Supreme Court case this month will test the
potency of both arguments. The struggle cuts to the heart of
the fierce convictions Americans hold about private property
and individual liberty, and the outcome will determine the
future of the nation's dwindling undeveloped lands.
The property rights credo is simple: The government should
compensate landowners any time green regulations lower the
value of property. But behind this proposition is the broader
goal of drastically curtailing the overall environmental
regulatory scheme. Says Donald Schmitz of the Fifth Amendment
Foundation, a property rights group in Santa Monica, Calif.,
``It would cool [the government's] jets significantly if it
had to pay people for what it stole.''
The land rights rebellion bubbled up as a coalition of
small grass-roots groups in the mid-1980s, right about the
time that the environmental agenda shifted to restrictions in
the use of private property. Today, it is a powerful force
composed of hundreds of organizations backed by conservative
think tanks and special-interest groups, including farmers,
developers, loggers, miners, and oil and gas producers. When
the environmental movement was launched in the early 1970s,
the government focused on curbing the poisons spewed out by
big polluting industries. Once industry's worst excesses were
checked, however, the feds began tackling the environmental
damage brought about by development and urban sprawl.
Suddenly, legions of property owners were feeling the pinch
of regulation, too.
For some, that pinch has felt more like a stranglehold.
Yshmael Garcia of Winchester, Calif., asserts that he lost
his home to a wildfire last October because of the endangered
Stephen's kangaroo rat. U.S. Fish and Wildlife Service and
state and county fire officials discouraged him from plowing
a proper firebreak around his home because the equipment
might have damaged labyrinthine burrows where the rats live.
Says Garcia, ``Now, I'm homeless, thanks to a bunch of
bureaucrats and so-called environmentalists.'' According to
U.S. Fish and Wildlife Service spokeswoman Connie Babb, a
plowed firebreak would not necessarily have saved Garcia's
home. ``Those fires were jumping six-lane highways,'' she
says.
At the root of this civil war are a dozen words seemingly
tacked on to the end of the Fifth Amendment of the Bill of
Rights: ``. . . nor shall private property by taken for
public use, without just compensation.'' According to legal
historians, the original purpose of the ``takings clause''
was to make sure that owners would be paid when their land
was actually seized, which was not uncommon in Revolutionary
times with two armies grabbing acreage to build roads and
quarter soldiers. In addition, the largely wealthy, landed
Founding Fathers wanted to ensure that when the Constitution
granted the masses political power, they would not turn
around and redistribute the holdings of the rich.
Both land rights advocates and environmentalists concur
that when the government actually seizes land--for roads and
schools, for instance--owners deserve to be compensated for
their losses. But the land rights camp takes the argument
further, maintaining that regulation without compensation is
tantamount to stripping owners of freedom of speech, due
process and other fundamental liberties set out in the Bill
of Rights. ``The right to own and use private property is
sacred,'' says Nancie Marzulla of the Defenders of Property
Rights, based in Washington, D.C. ``It's been that way since
the nation was born.''
historic perspective
But, in fact, though America's land-use policies have been
among the freest in the world, private-property rights have
never been absolute, say historians. Even in colonial
Massachusetts, property rights were sometimes abridged in the
interest of promoting social goals, says David Konig of
Washington University in St. Louis. To build and preserve a
sense of community, for example, villagers in many Puritan
towns weren't allowed to sell their land to outsiders or
build their homes more than half a mile from the meeting
house. There even were prohibitions on hunting--regulations
echoed in today's rules protecting endangered species. By the
late 1600s, for instance, deer populations had been so
ravaged by overhunting and habitat destruction that owners
were forbidden from killing deer on their property.
The fundamental rule, then as now, was that owners could
not use their land in any way that harmed the community,
according to John Humbach, a law professor at Pace University
in White Plains, N.Y. ``We've always agreed that some land
uses are socially intolerable,'' says Humbach. ``It's just a
matter of which are which.''
Until recently, property rights activists fought their
campaign primarily through the courts. In the past six years
the movement has chalked up several victories, but judges
have not embraced the entire agenda. Indeed, in a number of
landmark cases, the U.S. Supreme Court has affirmed that
reasonable regulation of land use is constitutional and that
the state need not pay unhappy landowners every times
regulations lower land values.
At the same time, the Supreme Court has emphasized that
governments cannot ride roughshod over property owners and
has laid down two key tests for deciding when owners
generally deserve compensation. First, the government must
open its coffers when a property owner suffers a permanent
``physical occupation''--no matter how minor--such as when
the government mandates that cable television lines be strung
across a property. Also, the state has to compensate a
property owner when a regulation goes ``too far,'' such as
when a property's economic value is destroyed. In 1992 the
Supreme Court ruled in favor of a South Carolina developer,
David Lucas, who lost the right to build on two oceanfront
lots, for which he had paid nearly $1 million, after the
state adopted a coastal zone management plan.
A case now before the Supreme Court will clarify another
murky area of the law: whether restricting land use is
justified absent a direct and immediate link to environmental
damage. The case, which will be heard March 23, concerns,
Florence Dolan of Tigard, Ore., who sought to enlarge her
plumbing and electrical supply store. The city granted her
permission on the condition that she set aside about a 10th
of the property for a bicycle path and a greenway along the
flood plain of an adjacent creek. When Dolan protested, the
city maintained that the greenway was needed to help handle
increased water runoff from the larger store and parking lot,
while the path would ease traffic congestion caused by
Dolan's growing number of customers.
daily damages
Florence Dolan's son Daniel Dolan argues that the city's
terms are ``extortion, pure and simple.'' But
environmentalists fear that a Dolan victory could severely
limit governments' ability to impose a variety of important
green regulations. By all accounts, many of today's
ecological problems stem from the ordinary activities of
millions of people, not the actions of a handful of dirty
industries. For instance, fisheries in the Chesapeake Bay are
declining in large part because of polluted runoff from city
streets, farms and septic tanks across a 64,000-square-mile
watershed. Protecting the bay hinges on state and local
governments managing growth, says Ann Powers, vice president
and general counsel of the Chesapeake Bay Foundation in
Annapolis, Md. According to Powers, a Dolan win could
``completely tie the hands of local governments.''
As it has become clear that the Supreme Court will not give
the land rights movement a total victory, its activists have
increasingly carried their crusade to Congress, attempting to
attach land rights amendments to every important piece of
environmental legislation and in the process paralyzing the
Clinton administration's environmental efforts. Last October,
for instance, conservative lawmakers tried to slap a land
rights amendment onto legislation authorizing a government
survey of plant and animal species. The amendment, sponsored
by W. J. ``Billy'' Tauzin, a Louisiana Democrat, would have
required the government to compensate owners if the economic
value of their property dropped by 50 percent or more as a
result of survey data. The amendment was defeated, but the
debate was so vociferous that environmentalists are putting
off reauthorization of the controversial Endangered Species
Act for at least another year.
``The premise [of the property rights argument] seems to be
that the individual produces while the government just takes
away,'' argues environmentalist Jessica Mathews, a senior
fellow at the Council on Foreign Relations. But often the
reason that land is so valuable in the first place, she
asserted in a Washington Post essay, is because the
government has built interstates and bridges, provided flood
insurance and paid for sewer lines. ``Perhaps, then, property
owners should pay every time a government action raises the
value of their property,'' she wrote. ``It makes just as
little sense.''
Land rights activists have also taken the battle to state
capitols, where in the past two years fully 39 states have
considered land rights legislation. Most of the measures,
known as ``assessment bills,'' would require states to study
the potential costs of compensating owners before writing any
new regulations. Some states have considered more-radical
proposals that, like Tauzin's amendment, would mandate
compensation whenever regulations cut the value of property
by a certain percent.
Most of these bills have been defeated because state
legislators conclude that such laws would not only break the
bank but undermine basic health and environmental
protections. At present, only four states--Delaware, Indiana,
Utah and Washington--have laws in place, though legislation
is pending in several others.
for everyman?
Property rights advocates often portray themselves as
average ``moms and pops'' fighting a rearguard action against
powerful bureaucracies and environmental organizations. But a
look at who owns land in America reveals that by and large
the property rights movement represents the wealthier and
more powerful segments of American society, according to John
Echeverria, counsel for the National Audubon Society in
Washington, D.C. First, the movement benefits from the
lobbying clout of many rich special-interest groups. In
addition, most of the privately owned land in America is
concentrated in the hands of relatively wealthy individuals
and corporations. Indeed, according to Charles Geisler of
Cornell University in Ithaca, N.Y., 5 percent of landowners
in this country, including corporations, have title to three
quarters of the privately held land. Moreover, says Geisler,
landownership is growing more monopolized all the time.
a delicate balance
Still, according to experts, when land-use rules change,
small landowners are often hit hardest, because they have a
high proportion of their total wealth tied up in real estate.
Government officials are beginning to recognize that the
property rights movement includes a contingent of ``regular
people'' who have been steamrollered by overreaching
regulations. ``It is clear that the federal government needs
to get more user-friendly for small landowners,'' says
Department of Interior spokesman Kevin Sweeney. He points out
that preserving small, isolated patches of natural lands in
the midst of sprawling development, as some of today's laws
require, does not always make ecological sense. Nor does it
make much sense economically to treat owners of small parcels
of land the same as major landholders, who often can afford
to set aside a portion of their holdings to preserve the
environment.
Ultimately, the controversy between land rights activists
and environmentalists boils down to the perennial question of
how to balance private rights with the public good. Though
the basic question has remained the same since the colonial
era, circumstances have changed--and greatly. Two hundred
years ago, when there was a super-abundance of undeveloped
land and neighbors were often tens of miles away, it was
pretty hard to use land in a way that harmed the community.
Now, many parts of the country are densely settled, and
scientists have a much richer understanding of how countless
small assaults on the part of millions of individuals can
threaten a region's ecological health. Says Pace University's
Humbach, ``Property rights are important, but so is the
livability of the land.''
Mr. BAUCUS. Mr. President, each of us in the Senate has sworn an oath
to uphold the Constitution, including the fifth amendment's protection
against taking private property for public use without just
compensation. I care deeply, as I believe all Senators do, about
protecting private property rights. But I also care deeply about
ensuring American's health, safety, and civil rights, and protecting
the environment. That is why I believe the best way to protect private
property rights and ensure these other important public rights is by
being faithful to the Constitution as it is interpreted by the Federal
courts.
Under our system of government, the courts have the duty to interpret
the Constitution. For two centuries now, the courts have done so. The
courts interpret the Constitution to determine what constitutes a
taking of private property in violation of the fifth amendment. In
doing so, the courts strike a balance between private property rights
and the public's rights to the type of community we all want to live
in.
I think we do the Constitution, and ultimately the American people, a
great disservice when we try to ignore the courts and legislate, as
this amendment does, with unwarranted, unbalanced, and ideologically
driven interpretations of the Constitution.
For all these reasons, Mr. President, I urge Senators to oppose the
amendment.
Mr. President, to some degree, what this comes down to is some public
concern about the overzealous issuance of regulations--too much redtape
in the Federal Government. That is a very legitimate concern. But the
answer is not this amendment. It is not this takings proposal.
Let me remind Senators, for example, of the Endangered Species Act.
In the 20 years of its existence, there have been two claims of takings
in the Federal courts--two. And no court has found that the Endangered
Species Act has resulted in a taking. In 20 years, under the Clean
Water Act, there have been just three cases in which a court has found
a taking. It just does not happen.
The answer, then, to concern about overregulation is for Congress to
do a better job in handling excessive rules and regulations. We are
doing that. For example, the Environment and Public Works Committee,
which has jurisdiction over most of our environmental statutes, just
last week concluded markup of the Clean Water Act. What do we do in
that legislation? No. 1, we reduce mandates. The public is concerned
about excessive mandates, unfunded mandates. We reduce those so that
now overflow and storm water requirements will be much less burdensome
and onerous on our cities.
In the Safe Drinking Water Act that we are taking up, communities are
concerned about excessive monitoring of their water systems and
excessive standards for the water systems. We will be reporting out
legislation in our committee this week, or the following week, which
dramatically addresses those points and reduces the monitoring
requirements and reduces the standards in a way consistent with public
health. We are responding.
Mr. President, I might say that part of the answer to excessive
regulations is for this body to have strong oversight hearings. We in
the Environment and Public Works Committee are doing just that. We are
making sure that the agencies follow the intent of the Congress. The
way to do that is to have very aggressive oversight hearings, and ask a
lot of tough questions of the agencies to make sure they do not go
afield.
Mr. President, that is basically the way to deal with excessive
regulation. It is not to pass this amendment--particularly an amendment
which includes the takings amendment, which incorporates an Executive
order that makes no sense, and that I think will be causing a lot more
problems than we are going to solve.
I did not address the gridlock that amendment would create. The
American people are very tired of gridlock. President Clinton ran on
the platform of change, to end gridlock and solve problems. We are
passing legislation which does that. But if this amendment passes,
believe me, we have not begun to see gridlock. We have not begun to see
gridlock, because if this amendment passes, everyone is going to be
reinterpreting whether or not something is a taking or not, as
interpreted by each agency, and as interpreted by the Attorney General.
Boy, then you will see litigation, then you will see gridlock.
Frankly, I do not think that is the intent of the sponsors. I do not
think that is their intent, but that will be the effect if this
amendment passes--a dramatic disservice to the American public. For all
of these reasons, I strongly urge my colleagues to not vote in favor of
the amendment.
I yield the floor.
Mr. HOLLINGS. Mr. President, I thank the distinguished Chair. Just to
correct the Record relative to the statement made by my colleague from
Wyoming, Senator Simpson said that four new bills had been added to the
S. 4 floor version. The Gore bill, S. 2937, was in the original S. 4.
It was not added. The fact of the matter is that the Gore bill, S.
2937, has been cut from $244 to $209 million. The Bingaman bill that he
referred to is included in the DOD authorization legislation. S. 1537,
by Senator Rockefeller, is not in S. 4. Senator Wofford of
Pennsylvania, his small bill was a series of amendments with no
authorizations and was added before the Commerce Committee vote. So I
wanted to make that absolutely clear.
The opponents lump together 2 years of appropriations to argue we are
going from $10 million to $2 billion. I wish we could, incidentally,
because it would be wonderful to take it out of Defense, some of that
$40 billion over there, and at most $2 billion over here in the
advanced technology, commercialization of our technology and advanced
technology. I wish we could. But this is bipartisan, and everybody
studied and looked, including OMB, which cut us back on the amounts.
These are not any kind of new bills all of a sudden coming up.
Another particular reference was made, of course, to the Secretary of
Commerce. I compliment the Secretary of Commerce, Ron Brown. They talk
about him as the former chairman of the Democratic Party, and I do so
advisedly. I will never forget my colleague to the north, in North
Carolina, running for reelection, and the hundreds of thousands, over
$1 million he got from the national committee. My colleague down in
Georgia similarly got a million-plus dollars. Old Hollings never got
anything. I understand when I made that statement, the party got
$25,000 at one time.
Let me say this: Chairman Ron Brown was not out politicking for old
Hollings' reelection in 1992. But I still admire the gentlemen. I think
he is an outstanding Secretary of Commerce. I have seen them all, for
40 years now, and have worked with them over the many, many years. I
really admire his diligence and his conscientiousness, particularly in
regard to technology, where Secretary Brown has coordinated this team:
Mary Lowe Good, who is the Under Secretary of Technology, and she
comes as the senior vice president for technology from Allied Signal.
It was only yesterday that colleagues said she had testified before the
Finance Committee relative to the General Agreement of Tariffs and
Trade, and how outstanding she was, how balanced and how cogent she was
in her presentation at that particular time. We have had nothing but
wonderful praise from both sides of the aisle for Mary Lowe Good. She
is not out there ``dishing out big bucks,'' as the Senator from Wyoming
states.
Similarly, we were very fortunate in bringing over as the former
office director of the Defense Research entity, DARPA, from the
Department of Defense, Arati Prabhakar. She is head of NIST. Right to
the point, the Senator from New Mexico said he had Arati Prabhakar come
out to New Mexico. Senator Domenici, my counterpart --and he and I
worked closely together on the budget, and we worked closely together
as the chairman and ranking member of the Commerce appropriations. But
Arati Prabhakar went out there to Sandia Laboratories and other
facilities in New Mexico, and Senator Domenici was exclaiming how
fortunate we are to have this consummate professional who is thoroughly
familiar and motivated with respect to playing catchup ball and getting
our country back on top of the technology heap. And she is not there, I
can tell you now, dishing out the big bucks.
Graham Mitchell, the Assistant Secretary for Technology Policy, from
GTE Laboratories, is the planning and forecasting director there and
was formerly with General Electric. These are the folks there now. If
you had, as intimated, the head of the party, he would have brought
along three assistants to help because he is traveling a lot. Any
Secretary of Commerce is responding to many, many duties. He would have
three there handling it and say ``dish out the money.''
I will never forget, that is exactly what happened with OEO and
President Lyndon Johnson when I was there serving under him in the
early days and the election was coming on. He told Sarge Shriver, ``Get
it out; get it out.'' That is why we had the Black Panthers meeting and
fighting with some other group up in Chicago. They were just dishing
out the money hither, thither, and yon, to get it. That is 30-year-old
politics.
In the olden days, we watched these things. Our Republican colleagues
watched these things. I am glad that they do. That is why we have this
bipartisan effort, and that is why we passed this out unanimously from
the committee last year in June, and it has been passed by unanimous
vote here in the U.S. Senate the year before that.
With respect to dishing out the big bucks, here are the endorsements
that have come from the Advanced Technology Coalition. The Advanced
Technology Coalition endorsing this includes AEA--the American
Electronics Association. I happen to know--having been around town long
enough you know their propensity and you know their politics. You do
have to raise money. All of them have been supportive of me, but not
nearly so supportive as compared to if I had been a Republican. In
fact, I have had a lot of them ask me, on account of my often
conservative views, and views on the budget, and my views with the
distinguished Chair trying to pay the bill around this town, why don't
I join the Republican Party. Maybe this is the reason why they come
with this extraneous nonsense here when you have a good measure,
unanimously passed, and engage in this. This would be embarrassing to
me. If I saw our side engage in this, I would go to George Mitchell and
say: ``Look here. Let us cut that nonsense out.''
We have a lot of good work to do up here in Washington. Let us not
all of a sudden, when you get a measure that has been unanimously
passed, thoroughly vetted, and with all the support you could possibly
ask, start dragging in Ira Magaziner and Ron Brown, former chairman of
the Democratic Party, and that kind of thing. That is an embarrassment.
Here are the groups whose names are associated affirmatively with S.
4: The American Electronics Association, the Modernization Forum, the
National Association of Manufacturers, the Microelectronics and
Computer Technology Corp., Honeywell, Inc., the National Society of
Professional Engineers, Business Executives for National Security,
IEEE-USA, Semiconductor Equipment and Materials International,
Institute for Interconnecting and Packaging Electronics Circuits,
Wilson and Wilson, American Society for Training and Development,
Catapult Communications Corp., Dover Technologies, Texas Instruments,
Columbia University, Motorola, Intel Corp., Cray Research, Electron
Transfer Technologies, Electronic Data Systems, American Society for
Engineering Education, U S West, Electronic Industries Association,
Tera Computer Co., Convex Computer Corp., Association for Manufacturing
Technology, Semiconductor Research Corp., American Society of
Engineering Societies, AT&T, and on down the list.
Mr. President, I ask unanimous consent that this letter and the
enclosure and endorsements attendant thereto be printed in the Record
at this time.
There being no objection, the material was ordered to be printed in
the Record, as follows:
There being no objection, the material was ordered to be printed in
the Record, as follows:
Factsheet on S. 4,, the National Competitiveness Act
the proposal
S. 4 will help American industry improve competitiveness
and create and retain jobs by reauthorizing the technology
and manufacturing assistance programs of the Commerce
Department's Technology Administration, especially its
National Institute of Standards and Technology (NIST). The
bill also authorizes several other Federal manufacturing and
computer initiatives.
The Senate will consider a modified version of the reported
bill. The Commerce Committee approved S. 4 without objection
on May 25, 1993. S. 4, in turn, is based on S. 1330, which
passed the Senate by unanimous consent on June 30, 1992. The
House companion to S. 4 is H.R. 820.
main provisions
NIST manufacturing research and extension. S. 4 directs
NIST to continue its existing manufacturing research efforts,
and also reauthorizes NIST's Manufacturing Extension
Partnership (MEP). The MEP program currently supports 7
Manufacturing Technology Centers around the country, which
give small manufacturers technical advice on improving
productivity, boosting profits, and saving jobs. The MEP also
awards State Technology Extension Program planning grants to
states, manages 42 DOD-supported extension projects in 25
states, and soon will support small Manufacturing Outreach
Centers to serve less urban areas. S. 4 is a step towards to
Administration's goal of eventually creating over 100
extension centers, large and small, to provide technical
assistance nationwide to America's 360,000 small
manufacturers.
NIST Advanced Technology Program. S. 4 also reauthorizes
the ATP--the government's principal civilian program to help
industry develop new technologies which have broad economic
value but also have risks or costs too steep for companies to
undertake alone. By helping companies solve technical
problems associated with new ideas, the ATP helps U.S.
industry avoid cases like the VCR--where Americans invent a
technology only to see others solve technical problems
quickly and get to market first. ATP projects are industry-
led, cost-shared, and selected by merit review. The ATP only
funds research; it does not subsidize commercial products.
Since its creation in 1988, it has supported 89 projects with
200 research partners in 34 states. The FY 1994 appropriation
is $200 million; S. 4 authorizes $475 million for FY 1995 and
$575 million for FY 1996.
NIST laboratories. Since 1901, NIST and its predecessor,
the National Bureau of Standards, have provided technical
services to American industry--particularly precise
measurement and quality assurance techniques which help
companies improve quality, lower costs, and speed new
products to market. NIST also has the leading Federal
laboratory on fire and building safety. S. 4 reauthorizes
these activities.
NSF manufacturing research and training. S. 4 also
authorizes $75 million at NSF to expand its manufacturing
research and training activities.
Information technology applications research. Title VI of
S. 4 revises the current High-Performance Computing and
Communications Program to require Federal computer agencies
to work with computer users and vendors on research to
develop new advanced computer applications in the socially-
important areas of education, health care, manufacturing, and
information.
Other provisions. The bill also contains several other
authorizations, including ones for the Office of the Under
Secretary for Technology, industry advisory groups, an
upgraded DOC office to monitor foreign technology, and a new
DOC-Small Business Administration pilot program to support
private technology venture capital companies. A new title VII
in the floor version contains amendments to the 1990 Fastener
Quality Act, a law which regulates the manufacture and sale
of high-strength bolts used in safety-related applications;
the revisions were recommended by both NIST and the official
Fastener Advisory Committee.
Authorizations. The floor substitute contains FY 1995
authorizations totalling $1,370 million and FY 1996
authorizations of $1,478 million. Any new appropriations
based on these authorizations will be within the
discretionary budget's hard freeze. A budget table is
attached.
talking points on the bill
S. 4 is an economic growth bill. It reauthorizes programs
at the Commerce Department and elsewhere that support
industry's own efforts to stay at the cutting edge of
technology, improve manufacturing, and create and retain
American jobs. In an era when American companies face serious
long-term competition in technology, S. 4 is a vital
investment in the Nation's economic future.
S. 4 focuses on today's priority--helping general
manufacturing and manufacturing jobs. The Federal Government
has long provided research support to several industries,
including agriculture, aerospace, energy, and medicine. But
while overall manufacturing employs 19 million Americans, as
late as 1992 less than 1 percent of the government's annual
$70 billion research budget went to support general
industrial development. S. 4 follows the proven model of
agricultural research and extension by expanding similar
support for U.S. manufacturing and technology firms,
including small companies.
S. 4 does not fit the caricature of ``industrial policy.''
The bill definitely will help industry--just as other Federal
research programs help agriculture, aircraft, and so forth.
But S. 4's programs do not fit the old stereotype of
``industrial policy.'' In the ATP, industry--not government--
picks technologies, runs research projects, and pays over
half the costs. S. 4's programs are not pork; peer-review is
used for the ATP and NSF, and manufacturing center proposals
are evaluated by the National Academy of Engineering.
Moreover, NIST and NSF only support research; they never
subsidize commercial products. These are high-quality
programs.
S. 4 will not bust the budget or lead to massive government
spending. All appropriations will be within the freeze on
discretionary spending, and even with this bill Commerce
Department technology programs will amount to less than 2
percent of Federal research spending. Is that too much to
spend in support of general American manufacturing?
Leading industry groups strongly support S. 4. Endorsement
letters have been received from, among others, the American
Electronics Association, the National Association of
Manufacturers, and the National Coalition for Advanced
Manufacturing. This bill supports industry's own technology
efforts, and was written in close consultation with industry.
____
Advanced Technology Coalition,
Washington, DC, February 9, 1994.
Hon. Ernest F. Hollings,
U.S. Senate, Russell Senate Office Building, Washington, DC.
Dear Senator Hollings: On behalf of the Advanced Technology
Coalition, we want to express our strong support for the
Senate version of the National Competitiveness Act, S. 4.
We believe that the bill deserves bipartisan support. We
ask that you vote for the bill when it reaches the floor in
the very near future. Its passage is essential to
strengthening the ability of our companies and members to
compete in the international marketplace; in short, S. 4
means jobs and will contribute to our nation's long-term
economic health.
Combined, the Advanced Technology Coalition represents 5
million U.S. workers, 3,500 electronics firms, 329,000
engineers, and 13,500 companies in the manufacturing sector.
The Coalition is a diverse group of high-tech companies,
traditional manufacturing industries, labor, professional
societies, universities and research consortia that have a
common goal of ensuring America's industrial and
technological leadership.
The members of the Advanced Technology Coalition have
invested an enormous amount of time working with both the
House and the Senate in developing and refining the National
Competitiveness Act. The Coalition believes that its views
have been heard by Congress and reflected in the bill.
In short, we believe that S. 4 will promote American
competitiveness and enhance the ability of the private sector
to create jobs in this country. We hope that you will play a
leadership role in ensuring its passage. We would be happy to
sit down with you or your staff to discuss the bill in
greater detail.
Sincerely,
American Electronics Association (AEA).
National Association of Manufacturers (NAM).
The Modernization Forum.
Microelectronics and Computer Technology Corporation (MCC).
Honeywell, Inc.
National Society of Professional Engineers.
Business Executives for National Security.
IEEE-USA.
Semiconductor Equipment and Materials International (SEMI).
Institute for Interconnecting and Packaging Electronics
Circuits (IPC).
Wilson and Wilson.
American Society for Training and Development.
Catapult Communications Corporation.
Dover Technologies.
Texas Instruments, Inc.
Columbia University.
Motorola.
Intel Corporation.
Cray Research.
Electron Transfer Technologies.
Electronic Data Systems (EDS).
American Society for Engineering Education.
U.S. West, Incorporated.
Electronic Industries Association.
Tera Computer Company.
Southeast Manufacturing Technology Center.
Convex Computer Corporation.
Association for Manufacturing Technology.
Semiconductor Research Corporation.
American Society of Engineering Societies.
AT&T.
Hoya Micro Mask, Inc.
____
The National Coalition for
Advanced Manufacturing,
Washington, DC, February 8, 1994.
Hon. Ernest F. Hollings,
U.S. Senate, Russell Senate Office Building, Washington, DC.
Dear Senator Hollings: On behalf of the National Coalition
for Advanced Manufacturing (NACFAM), I want to express our
strong support for the Senate version of the National
Competitiveness Act, S. 4.
We believe that the bill deserves bipartisan support and
ask that you join many of your colleagues in supporting the
bill when it reaches the floor. Its passage will enhance the
ability of U.S. manufacturing companies to compete in the
international marketplace. S. 4 would also help to expand the
pool of high skill, high wage jobs for the American
workforce.
NACFAM especially supports the manufacturing provisions of
the bill (Title II) which, among other things, will develop a
national system of manufacturing extension centers and
technical services. This system will improve the ability of
the nation's 360,000 small and medium-sized manufacturers to
modernize through the adoption of advanced manufacturing
technology and related processes critical to increasing their
productivity, product quality, and competitiveness.
These small- and medium-sized manufacturers are the
backbone of our domestic industrial base. Manufacturing
establishments with fewer than 500 employees represent 98% of
the nation's total, employ two-thirds of the manufacturing
workforce, and produce nearly half of the nation's value
added in manufacturing.
NACFAM, a non-partisan, non-profit, industry-led coalition,
has worked as a catalyst for public-private cooperation in
modernizing America's industrial base for over 5 years.
NACFAM's rapidly growing membership includes 65 corporations,
175 manufacturing technology centers (making NACFAM the
largest association of such centers) and 27 national trade
and technical associations (representing between them over
80,000 companies and thousands of technical education
institutions).
Thanking you in advance for your kind consideration of S.
4, I remain,
Leo Reddy,
President.
____
Computer Systems
Policy Project,
Washington, DC, February 23, 1994.
Hon. Ernest F. Hollings,
Chairman, Senate Committee on Commerce, Science, and
Transportation, Russell Senate Office Building,
Washington, DC.
Dear Chairman Hollings: I am writing on behalf of the
Computer Systems Policy Project (CSPP) in support of your
efforts to enact legislation to establish an information
applications technology component of the High Performance
Computing Act, Title VI of S. 4.
CSPP strongly believes that the research framework
established by Title VI of S. 4 will complement efforts by
the private sector to develop applications for an enhanced
national information infrastructure (NII). Title VI
authorizes funds for precommercial research that will
stimulate the development by the private sector of new
applications in education, healthcare, access to government
information and services, and digital libraries. These
applications have the potential to create new products,
services, and jobs and to improve the quality of life for all
Americans by bringing the benefits of the information age to
everyone.
The United States is currently the world leader in
computing and communications technologies. An enhanced
national information infrastructure will not only help us
maintain that lead, but will put our information technology
advantage to work for all Americans. CSPP believes that
initiatives such as those authorized by Title VI of S. 4 will
contribute significantly to successful and rapid evolution of
the NII.
Sincerely,
Lewis E. Platt,
Chairman and CEO, Hewlett-Packard Co., Chairman, CSPP
Working Group on Information Infrastructure.
____
American Industrial
Extension Alliance,
College Park, MD, February 14, 1994.
Dear Senator Hollings, The Senate will soon be considering
Senate File 4, a bill that will directly impact the ability
of American industry to compete in world markets. This
important bill contains a section on manufacturing extension
that is designed to provide the United States with an
effective system of assisting industry in modernizing
technical, management and processing systems. There is
preponderance of evidence that our industries lag in
utilizing modern equipment and systems, and this federal
effort will bring cohesion to the disparate systems now in
existence.
The members of the American Industrial Extension Alliance
are firmly behind efforts to strengthen this country's
technical assistance programs and bring this needed service
to all the states. The Alliance members represent most of the
industrial extension programs that now exist, but we are well
aware of the size of the problem is beyond the capabilities
of these few programs. We support the position of the
National Coalition for Advanced Manufacturing and the
expanding Manufacturing Extension Partnership at NIST.
Your support in strengthening American manufacturing firms
by the passage of Senate File 4 will be appreciated.
Sincerely,
David H. Swanson, Ph.D.,
President.
____
American Society for
Training and Development,
Alexandria, VA, February 4, 1994.
Re S. 4, the National Competitiveness Act of 1993.
Member,
U.S. Senate, Washington, DC.
Dear Senator: The American Society for Training and
Development (ASTD), on behalf of more than 55,000 corporate-
based human resources development specialists, urges your
support for S. 4, the ``National Competitiveness Act of
1993,'' when it is considered on the floor in the coming
days.
The ``National Competitiveness Act of 1993'' establishes
key underpinnings of a national technology policy based on
outreach to the private sector, the targeting of assistance
to small and medium-sized companies, and the integration of
worker training with technology assistance.
ASTD specifically supports provisions to create
Manufacturing Outreach Centers and expand the activities of
the existing Manufacturing Technology Centers. Enactment of
these provisions will help companies gain increased access to
manufacturing assistance, implement the best manufacturing
technology and processes at least cost, and train workers in
maximum utilization of technology and productions systems.
ASTD is the world's largest association dedicated to
advancing workforce training in conjunction with
technological progress and the creation of high performance
workplaces. We look forward to swift passage of this
important initiative during the 2d session of the 103d
Congress as a critical step to improve U.S. competitiveness.
Sincerely,
Curtis E. Plott,
President and CEO.
____
The American Society of
Mechanical Engineers,
Washington, DC, February 7, 1994.
Hon. Bob Dole,
Hart Building,
Washington, DC.
Dear Senator Dole: On behalf of the Technology Policy Group
of the American Society of Mechanical Engineers (ASME), I
urge you to support S. 4, the ``National Competitiveness Act
of 1993,'' which is scheduled to be brought to the Senate
floor this week.
This important legislation will provide the underpinning
for a realistic national technology policy. It includes
provisions that support the development and use of
manufacturing technologies which are essential for continued
U.S. gains in productivity and industrial competitiveness.
The bill also calls for industry participation in the
development of advanced manufacturing program strategies
through the use of an advisory committee to assure that the
infrastructure and new knowledge gained from the program will
be effectively utilized by U.S. manufacturers.
ASME has accorded competitiveness a high priority in our
1994 public policy agenda. This letter is written on behalf
of the Technology Policy Group, a group of ASME members with
expertise in the field of competitiveness, and reflects its
views, rather than an official position of ASME.
Again, I urge your support of this legislation to further
the nation's industrial competitiveness.
Sincerely,
John Parker,
Vice President,
Government Relations.
Mr. HOLLINGS. Mr. President, from the Council on Competitiveness, I
have from Paul Allaire, Council Chairman, chairman and CEO of Xerox, a
letter dated March 7, 1994:
On behalf of the Council on Competitiveness--a coalition of
chief executives from U.S. industry, higher education and
labor--I would like to express my support for S. 4, the
National Competitiveness Act.
As you can see the Chairman is Paul Allaire of Xerox; Tom Everhart of
California Institute of Technology; Henry Schacht, Cummins Engine Co.;
Jack Sheinkman, of the Amalgamated Clothing and Textile Workers Union,
AFL-CIO, CLC; Donald R. Beall, of Rockwell International; John L.
Clendenin, BellSouth Corp.; George M.C. Fisher of Eastman Kodak Co.;
Katharine Graham, the Washington Post; William Hambrecht, Hambrecht &
Quist Inc.; Jerry Jasinowski of National Association of Manufacturers;
Tom Labrecque, of the Chase Manhattan Corp.; Peter Likins of Lehigh
University; Robert Mehrabian of Carnegie Mellon University; Thomas J.
Murrin, Duquesne University; Michael Porter of Harvard; James J. Renier
of Honeywell, Inc.; Albert Shanker of the American Federation of
Teachers; Ray Stata of Analog Devices; Jerre Stead of NCR; William
Steere of Pfizer; Gary L. Tooker of Motorola; Charles M. Vest, the head
of Massachusetts Institute of Technology; Arnold Weber of Northwestern
University; William Weiss of Ameritech; A.D. Welliver, of the Boeing
Co.; Lynn R. Williams, the United States Steel Workers; John A. Young
of Hewlett-Packard, and on down. The Distinguished Fellow is Erich
Bloch and others listed here.
They said:
We commend your continued support for these initiatives and
urge you to play a leadership role in their implementation.
And they say:
S. 4 authorizes over $350 million in fiscal year 1995 and
fiscal year 1996 for a coordinated interagency program to
support research, technology development and pilot projects.
* * * These applications will help translate the potential of
a 21st century information infrastructure into tangible
economic and social benefits for the American people.
And they endorsed significantly expanding the advanced technology
program, S. 4.
Here is what they are talking about when they talk about big bucks
and all this. They are here. Here are the business folks--
S. 4 increases funding for ATP to $567 million in fiscal
year 1996 and requires that the Department of Commerce
develop a long-term plan for the program. These provisions
will promote increased private-sector investment in critical
enabling technologies and allow ATP to have a more strategic
impact on U.S. industrial competitiveness.
They say S. 4 will:
Support the development and diffusion of technology
especially to small- and medium-sized manufacturers.
S. 4 directs the Department of Commerce to work with
industry to develop new generic advanced manufacturing
technologies and consolidates existing NIST quality programs
into a NIST National Quality Laboratory. It also combines
existing Federal and State extension programs into an
integrated Manufacturing Extension Partnership to help small-
and medium-sized manufacturers in all geographic regions to
adopt modern manufacturing technologies and create high
performance workplaces. These initiatives will enhance U.S.
industry's ability to develop and manufacture competitive
products and promote long-term economic growth.
When they emphasize that extension partnership for manufacturing
which, yes, increases this bill, to have it managed by the Department
of Commerce now at the commercial and business end rather than the
defense end, that was the movement endorsed by the Republican
conversion committee 2 years ago. They said we ought to get on with
this and let us support this and let us support the Advanced Technology
Program, and let us get that thing from defense over here in proper
hands and properly peer reviewed. Yet some Senators who previously
endorsed it now come and say it is a new program or a new philosophy.
Then, of course, Mr. President, we have this endorsement this morning
from the National Association of Manufacturers--addressed, this one is
to Senator Wallop:
NAM supports S. 4, the National Competitiveness Act and
urges you to vote for its passage. This legislation will
markedly enhance the ability of U.S. manufacturing firms to
access and adopt modern manufacturing technologies and
techniques. It does so by improving the coordination of
existing, yet unconnected, institutions at the Federal, State
and local levels. The industrial extension network provided
for by S. 4 would be a resource that companies of all sizes
and sectors could use to help modernize their manufacturing
operations. The result will be a stronger manufacturing base
and a stronger U.S. economy.
The National Competitiveness Act also builds on existing
legislation, championed by then-Senator Gore and signed into
law by President Bush, that boosts research and development
efforts in the area of high-performance computing and
networking. High-performance computing will be a key generic
technology underpinning our 21st century information
infrastructure.
The agenda for improving U.S. competitiveness does not end
with the passage of the National Competitiveness Act, but we
believe enactment of S. 4 will be a significant step in the
right direction. Again, we urge your support for this
legislation.
Mr. President, in the face of all of that thoroughness, in the face
of that outstanding array of expertise and experience and endorsement,
now comes the Simpson amendment and says slash and burn; just get rid
of it. Do not now really get any kind of a Davis-Bacon, or do not get
any kind of reform for regulations or banking regulations, do not do
that as an amendment to the bill, rather as a substitute. Just kill the
bill.
And, by way of killing, they add on various Democratic Senators'
bills, hoping to put them in the juxtaposition of saying, ``Wait a
minute. I have to vote for my bill and then I have to vote to kill the
entire thing.''
I mean, come on. That is no way to do business. We had one amendment
which said, absurdly, that none of the amounts authorized should be
appropriated.
I hope we can sober up and understand what is afoot here.
I am glad to yield to the distinguished chairman of the Governmental
Operations Committee.
The PRESIDING OFFICER. The Chair recognizes the Senator from Ohio.
(Mr. HOLLINGS assumed the chair.)
Mr. GLENN. I thank my colleague.
Mr. President, I rise somewhat with regret, because I have to rise to
oppose the Simpson amendment. I do not question the motivation of what
my distinguished colleague from Wyoming is proposing. I do think it is
the wrong legislation to pass at this time, because we have other
considerations regarding many of the things being proposed by this
amendment.
I oppose the amendment basically for several reasons, among them the
following:
Rather than cure some of the gridlock that we know is endemic in
Government, I think this will create more gridlock in Government. I
think it will create Government redtape and paralysis by analysis. I
think it will increase Government spending and I think it will weaken
important public health, safety, and environmental protections.
Further, this amendment is being hastily considered without hearings
and without the careful study and consideration we should give to
something of this importance.
This amendment sort of takes a ``three blind mice'' approach to
legislating. It is an approach where the Senate makes national
decisions with little study or foresight as to their impact. In other
words, it adds more problems to what they are trying to cure with this
amendment to this legislation.
Now, what also troubles me is this would happen just as the Committee
on Governmental Affairs is in the midst of considering these issues. We
already have hearings scheduled, so we are not ignoring these things.
We are addressing them. We want to have the hearings that we have
scheduled so we can bring out all the pros and cons on each one of
these issues.
How does this amendment create more Government bureaucracy, red-tape,
gridlock, and spending? The amendment does it through a number of ways.
Just listen to this list.
First, it requires regulatory impact statements, risk assessments,
regulatory flexibility analyses, taking assessments or cost-benefit
analyses on virtually every single piece of legislation considered by
Congress and every single regulation promulgated by Federal agencies.
Now, does it make sense to do them on the literally hundreds and
hundreds of bills that we consider each year, or on the thousands upon
thousands of regulations that Federal agencies put out each year on all
of them?
While I certainly want to cut down on some of those rules and
regulations, I want to make sure the rules and regulations that are
promulgated are needed. But I do not think it is necessary to say that
we automatically would go through that whole list of things that I just
read that would apply to all the legislation and all the rules and
regulations that are written over in the agencies, pursuant to the
legislation that we pass here.
I submit, if we really are prepared to do that kind of an analysis on
these thousands of things, what we should call this is a lawyers' full-
employment bill, because that is what it is going to be. We are going
to require more lawyers than we have in Washington, DC, to run these
kinds of analyses if we do it on every single thing that is proposed
before the Congress.
Does it make sense to conduct some of these assessments or analyses
on certain pieces of legislation or regulations? That is a different
question. I have to answer a resounding yes to that. Of course, it
does. And, of course, we should make those assessments and analyses on
certain pieces of legislation.
But before we go ahead and impose this on the whole legislative
process--we are going to risk shutting down the legislative and
regulatory process--we ought to study where detailed analysis makes
sense and contrary to where it is wasteful and duplicative.
That is what the committee hearing process is all about. That is what
it is for.
I want to emphasize again that my Committee on Governmental Affairs,
which is the committee with jurisdiction over these particular items,
is taking very seriously the problems of administrative paperwork and
regulatory burdens on State and local Governments, business, consumers,
and the public. We are not sweeping these problems under the rug. We
are trying to address them, but do it in a logical way that brings out
the pros and cons on each one of these procedures.
Last fall, the committee held hearings on the problems of State and
local Governments and what they face from unfunded Federal mandates. We
have scheduled further hearings for early April to review specific
legislative remedies, and I plan to report out mandate relief
legislation later this year.
I met just a short time ago, during the National Governors Conference
when they were in here, in a meeting of the Governors, who let us know
about their problems with regard to unfunded mandates. We appreciated
their views on this thing and I agree with them on most of their
concerns. So we want to address that.
But, in terms of addressing the problems of regulatory and paperwork
burdens on business, the economy, and competitiveness, we have
scheduled three hearings so far for later this spring. They are already
scheduled.
So it is clear the committee is not sitting still, wringing its
hands. We are committed to tackling these problems head-on. We have a
schedule and we have a timeframe to do exactly that.
Now, let me discuss some of the concerns and problems with some of
the specifics in the Simpson amendment.
First, the various analyses that it advocates will cost the taxpayers
money. These things do not come for free. To do a regulatory impact
analysis, a risk assessment, or a cost-benefit analysis properly takes
planning and resources. They do not just fall out of trees someplace
all completed.
How much do they cost? Well, EPA estimates that on a major rule it
spends roughly $500,000 for a study of the rule's impact.
Now, I am not saying that every single rule or every single
regulation that is written is going to have that kind of an economic
impact. But I am not saying a lot of them will not exceed that, also.
If you extrapolate even a portion of that cost to all the rules and
regulations, both minor and major, we are not talking about peanuts, we
are talking about millions, if not hundreds of millions, of dollars in
new Government spending, a new bureaucracy supposedly to try to cure
the old bureaucracy that is out of whack. I agree that it is out of
whack, but we are looking at it, we are trying to come up with
legislation that considers all of these different things, considers the
costs and considers the effectiveness. That is what we are looking at.
The amendment also requires ``takings'' assessments on all
regulations. Again, these types of assessments are costly, not to
mention burdensome and paperwork intensive.
Further the Constitution is quite clear about compensation to private
property owners in case of a Government taking. This clause has fully
protected citizens' property rights for more than 200 years, and when
the Government has overstepped its bounds, the courts have intervened
to protect citizens' rights.
The process up to now has worked pretty well and should not be,
really, taken out of its current context unless we look at it very
carefully, make careful examination, and give some thought as to its
long-term consequences.
I agree wholeheartedly that we may need to change some of the
Government's responsibilities. We have moved into a new level, where
certain rules and regulations or legislation we pass here does have a
takings impact that may need to be considered more in the light of
modern business and industry than we had before. But the point I make
is let us look at it very carefully. Let us not just pass it out here
on the floor and maybe make some legislation that is going to cost
billions and billions of dollars in compensation as a result of the
takings legislation without looking at it very carefully.
Furthermore, the amendment does not simply direct agencies to protect
private property rights. Far from it; what it really does is to lock
into law a Reagan administration Executive order that legal experts
criticized from the beginning as inconsistent with Supreme Court
rulings. Now, it is even more out of date--on March 23, the Supreme
Court will be considering what experts describe as the most important
regulatory takings case in 15 years. Are we trying to preempt the Court
before it has even considered the case. I think certainly the time is
not at hand to do that. Let us let the Court make its decision.
The Simpson substitute includes the Wallop amendment on regulatory
flexibility. I support the goals of my colleague's amendment. Hearings
before my committee have shown that Federal agencies have done a poor
job complying with the Reg-Flex Act's objectives and requirements for
developing more flexible, less burdensome regulations that impact small
business and small governments. We have additional legislation on that.
I, too, have introduced legislation to put some teeth into the act. But
I am concerned that the Wallop amendment's requirement for judicial
review of agency analysis of the indirect effects of a regulation will
open the courts up to a flood of litigation.
Once again, what are we doing here? Are we just providing for a
lawyers full employment act? This increases regulation and increases
the legal review of all these things, I think unnecessarily. I am not
saying there are not some parts of this that need to have that kind of
approach; a legislative approach. But let us look at it in the light of
hearings and know what we are doing, rather than just passing this out
here on the floor right now.
While some judicial review of parts of the Reg-Flex Act may be
appropriate, it is a subject that needs further study.
Given its other paperwork-creating and bureaucracy-generating
provisions, it's ironic to note that the Simpson substitute contains an
amendment proposed by Senator Danforth, S. 560, the Nunn-Bumpers
paperwork reduction bill. I would note that I have my own bill, S. 681,
to reauthorize the Paperwork Reduction Act. Senators Nunn, Bumpers, and
I are currently working together, along with the administration, to
reauthorize the act. We have scheduled hearings on May 19 in my
Committee on Governmental Affairs to review the consensus compromise
that we will have worked out by then. While S. 560 has many worthy
provisions, we should allow the committee process to go forward and not
consider the bill at this time. Our negotiations will produce a bill
that can become law this year, but moving the Simpson amendment to
preempt that process makes no sense at this time.
I would add, I have a real sense of deja vu when it comes to this
particular item. Way back in the last administration we had an
agreement with Dick Darman who was the head of OMB at that time on how
we were going to work this out with the Paperwork Reduction Act. We
had, on the other side of the aisle, an anonymous rolling hold, one of
the more obnoxious things I have seen since I have been in the U.S.
Senate and I am on my 20th year here. I see my distinguished colleague
presiding now smiling, because an anonymous rolling hold gets his
hackles up too. I know that.
I ran into this in the waning days of a session. We had agreement
with the administration, had a sign-off. We still have a letter in the
files how we are going to reauthorize the Paperwork Reduction Act.
What happened? I came over. I thought we had unanimous consent to get
this passed on the floor. No, we had a hold on it on the other side of
the aisle.
So I thought I knew who had the hold on it. I went and I saw the
person. I will not use names at this particular point. The person said:
Oh, no, I took my hold off yesterday.
These are all anonymous. Whoever puts the hold on, leadership does
not let that be known. We are trying to figure out who had the next
hold, because they still would not let the thing loose. And by the time
we got that figured out, which we finally did, the session was over,
the bill died, the Paperwork Reduction Act did not get reauthorized,
and we are still living with that series of anonymous holds even though
we had the administration sign off on it. Dick Darman signed off. I
still have a letter in the file that he agreed with it.
That is several years ago now. We are still working to try to get
this reauthorized and I think we will be able to do that. But to me it
makes a lot of sense to run this through the committee, let us do the
pros and cons of it, and not pass something and preempt the committee
activity out on the floor right now with this bill.
The Simpson amendment addresses many important issues but I think the
solutions proposed, as I have stated through my remarks here this
morning--the solutions I believe will slow if not stop the basic
processes of government. It is going to cost millions of dollars of new
Government spending to implement these things. It cannot help but do
that. You do not do all these analyses for nothing.
In its effort to curtail regulation and reduce paperwork it winds up
creating more. As I said earlier, you could call this a lawyers' full
employment bill. It is going to put everybody to work doing all these
analyses and so on. I agree we have to have some of these done but to
make it as sweeping and all inclusive, and in effect shut down
regulations, shut down rules of Government, shut down the
implementation of what we pass here with legislation on the floor and
require all those same kinds of analyses here, too--I think we should
look at very carefully before we pass this legislation. The committee
process in our current legislation and hearing plans provide the forum.
I did not suddenly schedule hearings on these subjects. They have been
already scheduled for some time before our distinguished colleague from
Wyoming ever brought this amendment up. So we have had this scheduled
that we are going to have the hearings on it. We will look at these
things and provide a forum to examine the issues in further depth.
For all those above reasons I urge my colleagues to vote ``no'' on
the Simpson amendment or vote ``aye'' for tabling, if that is the
decision of the floor manager of the bill.
I yield the floor.
The PRESIDING OFFICER. The Senator from North Dakota.
Mr. DORGAN. Mr. President, I wanted to take the floor briefly to say
a few words in opposition to the Simpson substitute and a few kind
words about S. 4, that we have had on the floor, now, for some long
while.
It was not too many days ago that we all watched the Olympics. The
Olympics are a lot of fun to watch. They are interesting. They are
going to get your competitive juices flowing. The Olympics have events
in which, at the end of the events, the contestants do the best they
can and they either win or lose. If they win they get a medal, if they
lose they get nothing. It is a very simple concept: Winners get medals,
losers go home.
But it is not just on the athletic field that there is competition in
this world. We are involved in an Olympics of sorts. We are involved in
a competition that is a pretty intense, keen--tough competition in the
economic arena. It is not a competition that produces medals. The
winner of the economic competition produces jobs and opportunity. The
losers lose jobs and opportunity. That is the way the economic Olympics
works. If you win you grow; you produce opportunity and strength for
your country. If you lose you diminish; your economy shrinks.
What has happened in recent years? As I said the other day, when I
went to school I just got up in the morning and understood we were the
biggest, the best, the strongest, the most. We won just by competing in
the morning. That was the economic strength of the USA. Now we face
tough, shrewd economic competition from other countries.
Some of us say--the distinguished Presiding Officer, myself, and
others--just as when you are involved in any competition, you need to
have some teamwork. You need to work together with those who have the
same interests as you do and you need to have a plan to understand what
you are going to do here, how you are going to get to the finish line,
what is your goal, what kind of plan are you going to use to get there.
Some say, with great pride, not only do we not need a plan, we do not
have a plan and I would like to keep bragging about it, they say.
Not having a plan in this country for how we are going to enhance our
economic strength is surely something we ought to stop bragging about.
We had about 1\1/2\, 2 years ago a fellow come to speak in this town
who was one of the chief economists of one of the largest banks in
Japan. What he said made a memorable impression on me. I do not know
whether it is true or not, but here is what he predicted. He said their
economic modeling predicted by 1997, Japan would be the largest
manufacturing country in the world, and just after the year 2000, Japan
would be the world's economic leader.
He said they invest every year in Japan--at that time--$440 billion
more in new plants and equipment than we invest in new plants and
equipment in this country. Of course, we understand what that means.
You win in the economic competition when you produce a better product
and sell it at a better price. Part of that represents what kind of
factories you have, what kind of manufacturing facilities you have, and
what kind of technologies you have. That is the point, the reason we
are debating this bill on the floor today.
It is hard almost to go around during the day and find anybody in
this country who makes anything anymore. People are selling things back
and forth and competing, but it is hard to find somebody who is making
real products. This bill relates to manufacturing especially--and I
want to highlight that part of the bill, manufacturing technology.
Why is that important? I do not think this country can long remain an
economic giant unless it retains its economic base through
manufacturing. This bill relates to that. Some say, ``Well, the private
sector does just fine.'' We took an economic detour for a decade with
the private sector running up, wallpapering America with junk bonds,
loading S&L's with junk bonds. We had one guy make $600 million in 1
year, 1 year's salary from junk bond sales was $600 million. Then he
got 2, 3, 4 years at hard tennis at some minimum security prison, got
out and kept most of his money. That is the private sector at its
worst.
What happened in the decade when others were investing in plants and
equipment? Our big shots were wallpapering America with junk bonds. We
need to develop a plan and to say the private sector is just fine, it
will take care of itself, we can help the private sector and should
help the private sector, not by telling them what to do but by creating
mechanisms in which we share all across this country research in
critical technologies, information about manufacturing technology, and
give the opportunity to those small manufacturers all across this
country who want to compete and win the ability to do that. Give them
information, give them the kind of things that we develop in research
and know-how to allow them to better compete internationally.
We in this country have been a leader in the manufacturing of
airplanes. Did that come about because some private companies decided
we are going to decide to build a jet airplane, a commercial jetliner?
No. It came about through our military establishment. We sunk an
enormous amount of research into building military jet airplanes, and
from those military jet airplanes, the technology was used then for
enormously significant commercial contributions. The 707's, big four-
engine jets, that comes from the technology we learned in the military
that then became a commercial technology. That is Government;
Government to business, a partnership, and we became the leader. Think
of the hundreds of billions of dollars that has meant to our economy.
Now we are told on the floor today that this bill that we put
together, S. 4, that says let us find ways so instead of fighting each
other--the private and public sector--we are helping each other. The
public sector, the Government, finds ways to help the private sector
become more competitive and win in this economic competition. And
carefully constructed in this legislation are a series of steps to do
that, to say here is a helping hand, let us find ways to facilitate the
exchange of information, the development of technology, additional
research, distributing that research and helping American business.
Now we have someone come to the floor and say, ``Well, that might be
all well and good, you might think that is the right approach, but we
come from the side of the aisle that says we want to brag about having
no plan, so we're going to substitute for what you offered. We will
just get rid of everything you constructed over a number of years and
we offer sort of a vegetable soup package of legislative issues, some
of which have had hearings, some of which have not, some of which we
know about, some of which we do not. And we would like now to offer
this, and without the product of any careful research or careful
evaluation, let's just go ahead and have a vote on this as a substitute
for all of the other things that we have put together to try to create
this public-private sector partnership.''
I look at this substitute. There are some things in here that I can
agree with. Some of them have had hearings, some of them are coming to
the floor in other pieces of legislation. Some of them I have never
heard of before. A number of them have had no hearings, a number of
them look like they are brand new ideas. It is an interesting use of
the legislative process to decide the way to develop ideas and
legislate them is just to bring them to the floor with no notice and
just bypass all rational discussion and debate in the hearing process;
let us just have a vote on it before we even discuss it and know much
about it. That is a thoughtless way to legislate. I am not suggesting
that this is a thoughtless substitute. I am just saying any time we are
put in a position of voting on legislation that is comprehensive or
substantive, parts of which have had no hearings, that does not, in my
judgment, advance or serve the legislative interests of producing good
public policy.
Let me make one final point, Mr. President, and let me try to make it
as emphatically as I can. There is a major, major difference in
philosophy among many of us on this floor that is at the root of this
debate. Some say and boast continually that we ought not have any plan
in this country, the private sector is just fine; we do not need any
plan in terms of where we are going or where we are headed or what we
are doing.
Others say, if you are involved in the competition and the other side
has a plan, they have a training camp, they all get together and make
joint decisions and they help each other, whereas our side says, we do
not need any training camps, we do not need any plan, let us just sort
of show up, we will all wear different uniforms and all have a
different approach, that we can compete effectively.
We cannot. The fact is other economies around this world that have
been successful have some notion of what it is the investment is going
to produce.
Let me ask a quick question: Does anybody think this country will do
well if we have no automobile industry left? That is not going to
happen because we happen to be on the rebound for a lot of reasons. But
are there not certain sectors, manufacturing sectors, without which a
strong country cannot perform? I am just picking automobiles as an
example.
The answer, in my judgment, is yes, there are. There are certain
concentric economic activities without which a strong country cannot
function, and we must understand that, and we must reach out and say,
``All right, this sector is critically important to this country's
future. What can we do to strengthen it and improve it and help it
compete against other countries around the world?''
That is the purpose of this bill. It is very simple. The question is,
do you want to do something or do you want to do nothing? Do you want
to continue to boast we have no plan, or do you want to decide to
advance this country's economic interest with S. 4? That is the
question before us.
If you believe as I do that S. 4 makes good sense for this country,
is long overdue and ought to be passed as quickly as possible, then we
ought to vote no on this substitute and vote yes on S. 4.
I yield the floor.
The PRESIDING OFFICER. Who seeks recognition?
Mr. DORGAN. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. HOLLINGS. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER (Mr. Dorgan). Without objection, it is so
ordered.
Mr. HOLLINGS. Mr. President, the Senator from North Dakota has made a
very powerful statement. He talked of winners and losers, and the
winners getting medals and the losers going home.
I note that at the end of World War II, the United States had the
only strong economy, whereas the economy of Japan was devastated. Today
the Japanese per capita income is $23,325, and the great powerful, only
superpower in the world, the United States has a per capita income of
only $19,815.
That carries me back to the original comment made by the
distinguished junior Senator from Florida, who came early in the
Chamber here at 9 o'clock this morning and talked about how we do not
want to get into industrial policy. Look what happened to Japan. He
says Japan went and put its efforts behind high definition television
and found that that is not going to be the technology of the future and
therefore Japan is distraught, is lost in this economic Olympics.
They can make many, many more mistakes before the United States ever
catches up with them if we make the mistake of this particular Simpson
amendment by way of a substitute.
I wish we could debate the economy. I wish we could debate
international trade and GATT. I will never forget being told that the
foreign policy, the security of the United States is like on a 3-legged
stool. We have the one leg here, the values that we have as a Nation,
and that is, of course, very strong. We have just sacrificed lives to
feed the hungry in Somalia. There is no question about the values of
the United States for the principles of freedom the world around.
The second leg is that of your military power, and we know about that
with respect to our vast defense establishment.
But the third leg is that of the economy. And that leg is weak and
fractured. And going right to the competition down on the field, there
is the Japanese competition. Japan fielded its team out there. And
Japan has got its Government, the combination of MITI and the Ministry
of Finance correlated together. They are the Government. That is what
runs Japan. So the Japanese have the quarterback on the field calling
the plays, and we have the best players, we have the most productive
industrial worker in the entire world. The players are there, but the
Government quarterback is up in the grandstand whining, ``Be fair. Be
fair; I want a level playing field. I want a level playing field.''
Absolute nonsense. Whoever heard of anybody in economic affairs being
fair. Why do you think we have laws against monopoly? Why do you think
we have antitrust laws? Why do you think we have health laws to protect
our health? Why do you think we have safety laws?
I can go right on down the list. Do you think the market is going to
act safely? Do you think the market is going to act for good health?
For 13 years we heard the litany of deregulate, deregulate; get rid of
the Government; the Government is not the solution, the Government is
the problem.
They whined around here for 13 years and you see where we are. The
economic leg is fractured. We are behind the curve, and we are trying
to play catchup ball and the best of the best in industry, the best of
the best in technology, the best of the best in graduate education, the
best of the best in manufacturing has come in here in a uniform fashion
with organized labor saying we are joining hands and let us go with
this bill S. 4.
They come here with the monkeyshines of wait a minute; the Secretary
of Commerce is former chairman of the political party and the big bucks
here are going to the party chairman and we are going to deal out the
bucks. Sheer nonsense. They ought to be embarrassed.
They mentioned Arati Prabhakar, because she is the Director of the
National Institute of Standards and Technology. On this woman's
outstanding record with the Defense Advanced Research Programs office,
DARPA; managing a total annual budget of $300 million, and 300
contracts with 65 companies including large electronics manufacturers,
traditional defense contractors, midsized and small technology firms,
50 universities, and 30 other laboratories.
Now, that is where this money is going, to the National Institute of
Standards and Technology, and I am sure the distinguished lady had no
idea her record would be used in this debate, but I use it because it
is very pertinent, very relevant in the context of the reckless charges
of some sinister industrial policy here, the idea that this is a new
philosophy.
The distinguished director of NIST, she has been managing these high-
tech programs at Defense. She has been doing exactly what the
Republican task force said on defense conversion, get the money out of
defense and get it over to Commerce, get it into business hands, get it
into technology, get it into the commercialization of our technology,
and to do exactly what they say to do.
But the Director of the Office of Management and Budget has written
us a letter in support this morning. I would like to put it in the
Record at this particular point. It is dated March 9, to myself, the
chairman of the Committee on Commerce, Science, and Transportation.
I am writing to express the Administration's objections to
the amendment to be offered by Senator Simpson to S. 4, the
National Competitiveness Act of 1993. This amendment proposes
significant policy changes which could have serious negative
consequences.
This amendment could lead to sweeping changes in labor law,
worker protection, and Federal regulatory management. Largely
speaking, these proposals have not been fully reviewed by the
Senate or Administration and warrant further consideration
before they are enacted into law. Furthermore, I would note
that the Administration is currently working to address many
of the issues contained in the Simpson proposal.
In his March 7th letter to the Senate Majority Leader, the
President expressed his support for swift Senate action on
this legislation and urged that the Senate not adopt
extraneous amendments tht would delay enactment of the bill.
Clearly, the controversial nature of the proposals contained
in the Simpson amendment would significantly delay--if not
jeopardize entirely--the enactment of S. 4. I urge strongly
that the Senate reject the Simpson amendment and work quickly
to pass S. 4.
Sincerely,
Leon E. Panetta,
Director.
Mr. President, I think the main point to be made is that here we have
countering the pleas with respect to the big bucks and the small bucks.
They are talking about politically giving out pork and starting a big-
bucks program. They never called that program, over in the Defense
Department, such a thing. There was not any new philosophy arguments
there. We have supported it for years, and it had a $300 million budget
that the Director had with 300 contracts with 65 companies, electronic
manufacturers, defense contractors, midsized and small technology
firms, 50 universities, and 30 other laboratories--all pursuant to the
Republican Defense Conversion Task Force filed year before last, signed
by the distinguished ranking member of the Committee on Commerce, my
colleague, Senator Danforth.
We are doing conversion, so we not only take the programs over, we
not only take the Directors of those programs, and put the
distinguished lady as the Director of NIST, but they still bellyache
about ``pork'' and ``ballooning,'' and ``new philosophy.''
I can tell you here and now, when you do what they ask you to do,
then they just come politically here with slash and burn and
substitute. Just get rid of the National Bureau of Standards, which is
the fundamental part. That is the big one. Look at these figures. They
are talking about amounts. You will find that the Bureau goes up, up,
and away.
So that is what we want to do, instead of the research in DARPA; yes,
get that commercial research up, up, and away. That is intended. We
have the best doing it, who have been doing it with acclaim over in the
Department of Defense: Arati Prabhakar and Under Secretary Mary Lowe
Good.
I do not know how you do it better and gain the confidence of any who
would have a question, be they Republican or Democrat, to ensure that
we do not start a pork program.
I emphasize again we reported the bill out at $1.5 billion for next
year. That was supported by the Senator from Missouri, and now comes
the amount in the bill, $1.3 billion. So in actual figures, it is a
cut. I hate to see it. I wish we could get way, way more into that
program, as the private sector experts have recommended.
We need to really get going when we realize we now have only seven
manufacturing technology centers, and we hope to get only another
seven. The administration says that by the turn of the century they
hope to get 100. The competition that the distinguished Senator from
North Dakota was commenting upon, Japan, has 170 of them. And it is
working. That is where you get the high productivity. That is where you
get the quality. That is where you get the high pay. That is where you
get the higher per-capita income. Fledgling little Japan is a country
now that has won the gold medal as to per-capita income. Meanwhile, we
are still languishing here with diversionary amendments on banking
regulations, labor regulations, impact statements, pesticides, post
offices, anything in the heaven's world that they can think of except
an amendment relevant to the bill.
This is the fourth day of it, Thursday. We started on a measure that
had been passed unanimously through both Houses, ready in conference,
could not get it then up as a reported bill with all the conferees,
Republican and Democrat; then again last June, unanimously out of the
Committee on Commerce, all the Republicans and all the Democrats
supporting it, and at a higher amount than what we have at the present
time. Now they come and say just get rid of the program.
I yield the floor.
Mr. KEMPTHORNE addressed the Chair.
The PRESIDING OFFICER. The Senator from Idaho is recognized.
Mr. KEMPTHORNE. Mr. President, thank you very much. I want to thank
my friend from South Carolina for his courtesy.
I wish to address an aspect of the Simpson amendment which I am
responsible for placing in there. In all honesty, it should not be
necessary for this part of the amendment.
I am going to relate to you a situation that many Americans have
already heard about because Paul Harvey talked about this situation.
Many Americans read about this in Reader's Digest, in last January's
edition. I am going to tell you about an incident that happened in
Garden City, ID.
There was a construction accident. A trench caved in and it buried a
worker. Two people happened to be going by and they heard the
commotion; they heard the muffled screams. So they ran to the side of
this trench cave-in, and they saw what had taken place. They saw just
one inch of the buried victim's head. Of course, he was covered with
dirt and debris and was pinned in this trench and could not breathe.
So these people that happened to be coming by immediately began to
dig the debris from around that individual's head so that he could
breathe again. Then that trench began to fill with water. So they
rerouted the water so that this individual would not drown until
emergency personnel could get there with the appropriate equipment so
they could extricate him.
Thank goodness for the victim that these individuals happened to be
going by. For their efforts, the mayor of Garden City, ID, acknowledged
them in a proclamation as heroes; and indeed they were heroes.
Unfortunately, those heroes received from their Federal Government
citations, citations from OSHA of nearly $8,000.
Mr. President, I ask unanimous consent that the entire Readers Digest
article, entitled ``Fined for Heroism,'' in the January edition of
Readers Digest under the section of ``That's Outrageous,'' be printed
in the Record.
There being no objection, the article was ordered to be printed in
the Record, as follows:
[From That's Outrageous, Reader's Digest, January 1994]
Fined for Heroism
Kavin Gill and another employee of DeBest Plumbing Inc. had
to act quickly to rescue 21-year-old Dwight Kaufman after a
dirt trench wall collapsed on him at a construction site near
Boise, Idaho. Using their hands as tools, they dug the dirt
from around his head before a rescue crew arrived and pulled
him out of the ditch.
``We could hear muffled screams. You could just see about
one inch of the back of his head,'' Gill said. His shoulders
were pinned from the collapsed piece. With his head covered,
I think he would have died.''
But the federal Occupational Safety and Health
Administration didn't see it that way. It fined the Boise
plumbing company nearly $7875 because the good Samaritans
failed to put on hard hats and took no precautions against
other trench walls falling on them during the rescue.
Idaho OSHA Director Ryan Kuemichel said that ``rescues must
only be attempted after taking proper precautions to ensure
that victims are not injured in secondary cave-ins.''
But Gill said he, fellow worker Myron Jones and a bystander
didn't have the time to find their hats, remove water from
the trench and shield the walls.
Sen. Dirk Kempthorne (R., Idaho) asked the Labor Department
to review the case, and the fines were dismissed. Kempthorne
says he will draft legislation that exempts acts of heroism
from OSHA fines. ``Thank goodness there are still people in
this world who are willing to help their neighbors--despite
an absurd bureaucratic mind-set in the federal government
that would seem to discourage saving a life,'' Kempthorne
said.
Mr. KEMPTHORNE. Mr. President, let me tell you about these citations.
They received one citation of $2,250 for not properly being trained in
recognizing and avoiding unsafe conditions. That is of the two people
that happened to be walking by, or driving by, that had nothing to do
with this construction site--two employees of DeBest Plumbing. They
received a second citation, a $1,125 penalty because they did not first
run to their vehicles and retrieve hardhats.
It has been pointed out that if they had taken the time to run to the
trucks to get their hardhats, in all likelihood, it would have created,
potentially, greater injury to the victim, if not death.
They received a third citation for $2,250 for working in an
excavation where water had accumulated. This is outrageous.
They received a fourth citation from OSHA of $2,250, because the
employees should have shored up the walls of the trench before
attempting to rescue the victim. That is the letter of the law, but it
is not the spirit of the law.
If these good Samaritans that happened to be going by had abided by
OSHA's interpretation of the letter of the law, in all likelihood we
would have had a victim who was then deceased.
I had my office in Idaho contact the OSHA office there and say:
``Surely, there has been a mistake. Surely, you do not intend to fine
these two heroes $8,000.'' They said: ``Oh, yes we do.'' Then they went
on to explain that the agency felt it was necessary to cite everyone
for any possible violation, and then let them appeal the decision.
So you have to go to a review, and you have to go to court in order
to get citations removed that should never have happened.
Mr. President, this portion of the Simpson amendment that I have
added is necessary. It appears today in our Federal bureaucracy that we
are now going to have to legislate common sense and build it into the
law because, unfortunately, we have Federal regulators that, in their
intent to be so strict in their enforcement of the letter of the law
and their assessment of fines, are not using common sense.
I believe--as I think all Americans do--that heroes deserve
commendations, not citations. We need to ensure that we honor heroes
and not punish them. Therefore, Mr. President, that is why this
particular aspect of the Simpson amendment is there, so that these
regulators know that there will be an exemption so that when a heroic
act takes place that saves lives, they can abide by the spirit of the
law, not the absolute letter of the law.
Mr. President, I yield back to the distinguished Senator from South
Carolina.
Mr. HOLLINGS. Mr. President, I thank the distinguished Senator from
Idaho. I had to smile when he said we are going to legislate common
sense. He has a good initiative, and he has a good cause. I have
listened with tremendous interest. But, in fact, if he thinks he is
going to legislate common sense to the Government, I can speak from
hard experience over 27 years up here. Does the Senator realize the
stupidity of Government. Does he realize that this particular entity,
OSHA, elects Senators?
I remember about 20 years ago when OSHA elected Senator Wallop.
Senator Wallop ran in his campaign a good little TV ad against the late
Senator Gale McGee of Wyoming, and it said: ``Do you know what those
fools in Washington in OSHA are requiring here for the rancher to round
up his herd? They said you have to get a toilet bowl.'' And they had a
video of the toilet tank around the animal's head, and his head was
bent down--I can see it now. The ad said this is what Washington
requires of us. Elect Wallop.
They elected him; there is no question about that.
You and I are going to be dead and gone and that crazy crowd will
still be in the bureaucracy. They are still putting out bad decisions
of that kind. But it has no relation whatsoever to this bill. We have
140 pages, and you cannot find OSHA, or safety, or any of those other
regulations in this particular measure. This is technology. This is
every bit of research into technology, in the outreach extension,
advanced programs, the peer review. But OSHA--I did not intend to pass
a bill on OSHA.
That is why we are somewhat distraught, because here we have,
perhaps, as the Senator has described it, a perfectly fine initiative
relative to OSHA. Hopefully, we can legislate common sense separately.
Maybe I would support the distinguished Senator from Idaho then. But
right now we have Republicans and Democrats and a movement going here
with all the best of knowledge, already unanimously reported out of the
committee, and we are being distracted into OSHA.
Mr. KEMPTHORNE. If the Senator will yield, I appreciate his comments.
Under the umbrella of this underlying bill, we are dealing with
competitiveness. And what I have heard repeatedly from business people
is that if we would get the Government off their backs, they can be
more competitive. Here we have a situation where the Government has
erred in judgment, and it is on their backs. So we are trying to
correct that.
I agree with the good Senator from South Carolina that, as I said in
the beginning, it is unfortunate that this is even necessary, and that
we have to talk about this. It may be impossible to legislate common
sense. But we are the folks that are elected by the other people of
this Nation to come in here and, hopefully, bring some common sense in.
When we see a Federal agency that has run afoul, I think we have to
bridle it back. That is what this accomplishes. But again, the reason
that it is germane, in my opinion, is the fact that if we are going to
be competitive, we ought to look for every opportunity we can to get
the Government off the backs of the good folks that are out there
trying to be competitive.
Mr. HOLLINGS. I agree. The Senator is correct. Any time you can get
the Government off your back--and that expression is used just as
frequently in South Carolina as in Idaho. But this amendment is not
aimed at getting technology competitiveness going. I guess that any
subject could be brought up under the rubric of competitiveness and
described as such, but that is really stretching it. I am sure the
Senator realizes that.
Mr. KEMPTHORNE. If the Senator will yield. I ask the good Senator
from South Carolina, in the event that this is not successful in
today's debate, would the Senator be willing to cosponsor with me this
same amendment, in a stand-alone situation at some other time.
Mr. HOLLINGS. Yes. The way you have described it, I was powerfully
interested in it. That thing ought to be corrected. There is no
question about it.
Let me ask the Senator, because I know nothing about it, where is it
in hearings or why have we not made progress on his bill?
Mr. KEMPTHORNE. Mr. President, if I may respond, this occurred at the
end of last year. So, we talked with OSHA officials. They felt they
could correct this through other means.
I went ahead and prepared the language, which really reflects
language which I think OSHA would be headed toward. This gets us there.
So, this is the first opportunity that I have had to bring it
forward. But, again, if it was not successful in this particular issue,
then I appreciate greatly that the Senator would join me as a partner
because it ought to happen.
Mr. HOLLINGS. Yes, I hope we can have hearings and flesh it out and
bring it to the floor.
I thank the distinguished Senator.
The PRESIDING OFFICER (Mr. Campbell). The Senator from West Virginia
[Mr. Rockefeller], is recognized.
Mr. ROCKEFELLER. Mr. President, I ask unanimous consent that I might
speak as in morning business for a period of up to 15 minutes and at
the conclusion of my remarks that my remarks be placed in the Record at
the appropriate place.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. ROCKEFELLER. I thank the distinguished Chair.
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