[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. BINGAMAN. Mr. President, I come here today to express my support 
for the efforts of the Senator from South Carolina, Senator Hollings, 
and to express my disappointment with the vote last night on the 
Danforth amendment and the ongoing partisan debate that seems to have 
bogged this bill down into what I see as extraneous matters.
  Last evening, I was somewhat amazed that the Danforth amendment won 
as much support as it did, particularly among Republican Senators. I 
hope that this does not signal the death knell of a very long era of 
bipartisanship on technology policy going back more than a decade. As 
we all tried to learn the lessons of the mistakes that were made in the 
seventies by Presidents of both parties on such large-scale development 
projects as the Clinch River breeder reactor, the Synfuels Corporation, 
and the supersonic transport.
  I have supported making the research and development tax credit 
permanent since I have come to this body. In my view, it is a false 
choice to choose between this bill and that tax credit. I would like to 
challenge some of the fundamental points that were made yesterday by 
the Senator from Missouri because I think they relate to the facts.
  The Senator from Missouri said yesterday that he is fundamentally 
concerned about the roles that this bill perceives for the Government 
in general and for the Department of Commerce in particular in the area 
of research. In my view, most of the roles that he is concerned about 
are long established.
  We had a very good hearing yesterday morning in the Finance Committee 
on the research and development subsidy issue in the Uruguay round of 
the GATT agreement. In that hearing, I made the point that the Uruguay 
round essentially embraces President Bush's technology policy and, as 
many Senators know, President Bush and his senior policy advisors, his 
senior science adviser Allan Bromley, and Dick Darman at the Office of 
Management and Budget, and others, went to great lengths to distinguish 
the technology policy of President Bush's Presidency and that of 
President Reagan from the so-called industrial policy, as that term is 
used in a pejorative sense, that had occurred in the seventies; that is 
the Synfuels Corporation, the supersonic transport and the Clinch River 
breeder reactor as being three examples of the industrial policy that I 
think there is a general consensus now that was objectionable.
  The heart of the Bush technology policy that is still the heart of 
the Clinton-Gore technology policy is that there is an appropriate role 
for Government in technologies that have commercial application, but 
that that role stops at precompetitive development which should be cost 
shared with industry.
  It was in this way that President Bush could push a high performance 
computing initiative, and an advance materials processing initiative, 
and an advance manufacturing technology initiative, and a biotechnology 
initiative, and an advance battery consortium with the automobile 
industry, and Sematech with the semiconductor industry, and a doubling 
of the small business innovative research setaside, and an explosion in 
cooperative research and development agreements between our Federal 
laboratories and the private sector to ensure the fruits of our Federal 
research and development flowed to private firms and to other programs 
that were not national security concerns.
  I know that yesterday Senator Hollings pointed out the contradictions 
between the Rudman task force on defense conversion, that report that 
the Rudman task force issued, and the position now being taken by many 
of our colleagues in this body.
  It might be instructive to read a bit from the last budget document 
submitted by a Republican President. I have President Bush's 1993 
budget request here, and it has in it a very nice section called 
Investing in the Future. Within that section there is a chapter 
entitled ``Enhancing Research and Development and Expanding the Human 
Frontier.''
  Let me just read a couple of excerpts from that chapter. These are 
items I know the Senator from South Carolina is very familiar with. But 
let me just read some of this from the last budget document that 
President Bush submitted to the Congress. This is a quotation from that 
document. He says:

       The administration has sought to foster technological 
     advancement through a multifaceted technology policy that 
     includes:
       Increased Federal investments in high-payoff applied 
     research and development, including increased emphasis on 
     pre-competitive generic technologies;
       Increased Government-industry collaboration, including both 
     formal consortia arrangements (such as the Advanced Battery 
     Consortium) and informal interaction such as the Computer 
     Systems Policy Project;
       Accelerated technology transfer from Government 
     laboratories;
       Greater emphasis on investments in new technologies as part 
     of several National Strategies to address transportation and 
     energy issues, and to advance the U.S. space program;
       Support for incentives to encourage greater private sector 
     R&D investments including making permanent the R&E tax 
     credit, expansion of the National Cooperative Research Act to 
     include joint production ventures, and the proposed reduction 
     of the taxation rate for capital gains.

  And on and on.
  Clearly, there was a major commitment to Government involvement and 
support for industry efforts to commercialize technology in the prior 
administration.
  Yesterday, the Senator from Missouri questioned what he referred to 
as the ``extent of partnership, if any, between Government and industry 
in research.'' That is a quotation from his statement yesterday.
  If he indeed has deep philosophical concerns about this sort of 
partnership, I think the reality is that there is already a huge 
partnership today in this country encouraged by numerous pieces of 
legislation that were passed by this body since 1980, usually by 
unanimous consent, signed into law by Republican Presidents. I do not 
know where my colleagues were when that legislation was passed.
  President Bush, at least in the budget document I referred to, was 
proud of the fact that on his watch civilian applied research and 
development had increased from $11.6 billion to $16.3 billion. He was 
also proud that he was proposing to increase that further to $17.3 
billion in fiscal year 1993. This is not basic research for which 
President Bush was asking these billions of dollars but civilian 
applied research and precompetitive development and probably some 
development at NASA and DOE that goes beyond precompetitive. President 
Clinton's fiscal year 1995 proposed budget for civilian applied 
research and development is $18.6 billion. This is not a sea change 
from President Bush's last budget. If you put 2 years of inflation on 
$17.3 billion, it may actually be less than President Bush requested.
  So, Mr. President, I frankly am somewhat perplexed by the debate that 
has occurred in the last day or two. I recall George Bush giving a 
series of speeches in the closing months of the 1992 campaign to 
industry groups in Detroit and Chicago and Colorado Springs where he 
enunciated a technology policy consistent with his budget.
  I recall Allan Bromley, the President's Science and Technology 
Adviser, complaining to the Los Angeles Times reporter in October 1993 
that President Bush did not get enough credit for his technology policy 
and that the Clinton policy was just borrowing the Bush 
administration's ideas.
  So maybe my memory is faulty. Perhaps the Senator from South Carolina 
has more details on this. I am sure he does since he spends great time 
on it. But I do not recall deep philosophical and partisan debates over 
this matter when we passed all the legislation that was passed in this 
area in the 1980's and in the early 1990's.
  We spend today $70 billion plus each year on research and 
development. That is at the Federal Government level. There is no way 
that that spending is going to be neutral among different industries. 
We have mission agencies, we have the National Institutes of Health, we 
have the Department of Energy, the Department of Defense, NASA, the 
Department of Agriculture. Mr. President, you can tell by the names of 
these agencies where they are going to direct the great bulk of their 
research dollars. Our research expenditures abandoned the pristine 
neutrality that the Senator from Missouri apparently desires, and we 
abandoned that when we invented these mission agencies.
  It is an incontrovertible fact that the research of these mission 
agencies increasingly overlaps with the research conducted in the 
private sector. It was the recognition of this fact that led us, on a 
bipartisan basis from 1980 until the present, to try to define 
partnership mechanisms between the mission agencies and the private 
sector. In my view, if Senators have concerns such as have been 
expressed in the last 24 hours, they should have opposed this entire 
body of law that has passed in the last 14 years.
  I do not think we should go back. I do not think we can go back. A 
research and development tax credit has a role in our policy, and I 
support making that R&D tax credit permanent. But we should not kid 
ourselves that such a credit is neutral. Obviously, it favors firms in 
sectors which invest intensively in research compared to those which do 
not. Electronics is benefited much more than textiles. Firms with 
profits to be taxed benefit more than small firms, small business 
startups still facing losses. So we should not kid ourselves that even 
that tax credit is perfectly neutral.
  The bill that the Senator from South Carolina is so ably managing has 
a significant role, too. If you accept that the mission agencies are 
going to be investing in research beyond basic research, as they have 
for the entire post-World War II period, there is a significant role 
for the Commerce Department beyond its traditional role in standards 
research and oceanic and atmospheric research. The Advanced Technology 
Program and the Hollings manufacturing technology centers are the heart 
of that role. They have broad support in industry, as the Senator from 
South Carolina has repeatedly pointed out in this debate.
  Until this year, they were not controversial. Since I have served on 
the Armed Services Committee, I tend to see some of what we are trying 
to do with the Advanced Technology Program in terms of the history of 
the Department of Defense research agencies.
  Back in 1958, President Eisenhower created the Advanced Research 
Projects Agency. He did this because he thought defense research was in 
a rut. It was not investing enough in breakthrough technologies. It was 
underinvesting in some key generic technologies that cut across all the 
services, technologies such as electronics and materials and 
computation. The Advanced Research Projects Agency became a court of 
last resort for innovative military technologies which the service 
bureaucracies, for whatever reason, were failing to fund. In that role, 
ARPA's successes included precision-guided munitions, phased-array 
radars, stealth technology, and many others.
  Our second mission was to invest in those crosscutting technologies 
which the services would underinvest in: electronics, materials, 
computation, et cetera. And in that role the agency has an even longer 
list of successes. The whole foundation for computer networking and 
personal computing is an obvious example.
  The Commerce Department through the ATP program can similarly be a 
locus of industry-led, pre-competitive research and development that 
seeks both to support cross-cutting generic technology, for example in 
advanced manufacturing processes, and to fund innovative industry ideas 
for pro-competitive development that the civilian mission agencies for 
whatever reason are underinvesting in.
  Yesterday, the Senator from Missouri posed the question whether the 
Commerce Department has a leadership role to play in this new era of 
strong international competition. His answer was no. My answer is yes. 
ARPA manages to lead innovative research within DOD despite having a 
budget that is only about 6 percent of the overall DOD research budget. 
Under S. 4, the ATP and Hollings Center budgets remain well less than 5 
percent of our civilian research budget. The key is not to duplicate 
what the other agencies are doing. It is to look, in partnership with 
industry, for the high-leverage opportunities that the other agencies 
are missing or to leverage their resources to get something done. In 
that way Commerce can keep those agencies on their toes and be an 
advocate for greater government-industry partnership in those agencies' 
research programs, where that makes sense, just as ARPA performs that 
same function in the Department of Defense.

  I am personally delighted with the people we have in place at the 
Commerce Department to carry out the programs we are authorizing in 
this bill. Mary Good, who comes out of Allied Signal with long 
experience on industry advisory boards, and Arati Prabhakar, who was 
ARPA's best program manager in the Bush administration, know how 
important it is to work with the other civilian agencies. They know how 
important it is to preserve industry-led, merit-based procedures in 
these programs. They have a strong champion in Senator Hollings in his 
role as chairman of the appropriations subcommittee to ensure that the 
earmarking Senator Danforth talks about does not occur here, as it too 
often does in the civilian mission agencies. And I have been an ally of 
Senator Danforth of Missouri on that subject of trying to reduce 
earmarking.
  My bottom line is that we need to move forward. Senator Danforth 
would move us back not just a small step, but all they way to 1980 or 
perhaps 1945 with his notion that government's role in civilian 
research should be limited to basic research and an R&D tax credit. 
Such a limitation of the government's role is not appropriate, it is 
not sustainable, and it flies in the face of decades of history. I am 
with him if he wants to oppose large-scale Federal support of 
development of particular commercial products by particular firms. I do 
not want to fund Synfuels Corps., or Supersonic transports, or Clinch 
River Breeder Reactors to the tune of billions of dollars.
  The real money to get a product to market comes in development beyond 
the pre-competitive stage. We should let our private sector handle that 
unless there is a compelling government mission need, such as defense, 
that forces us into the development phase.
  But there is a role for government in general, and the Commerce 
Department in particular, in research and pre-competitive development 
of technologies of commercial interest. It has been carefully defined 
in a large body of legislation which has preceded this bill into law. 
It has been carefully defined in this bill. This bill is simply not 
industrial policy in the sense that term has been used in the past. To 
call this bill industrial policy is to accuse Presidents Reagan and 
Bush of being card-carrying advocates of industrial policy.
  So I hope we will not go back. I hope this series of extraneous 
amendments will be rejected, just as the Danforth amendment was last 
night. I hope the Members on the other side of the aisle who supported 
Sematech, who supported the Trade Act of 1988, the Technology Transfer 
Act of 1986, the National Competitiveness Technology Transfer Act of 
1989, the Energy Policy Act of 1992, and numerous other pieces of 
legislation will join us in voting down these amendments. I hope those 
Members who supported President Bush's budgets for civilian applied 
research and development will support this bill. I hope those members 
who signed their names to the Rudman Task Force report in 1992 will 
support this bill. I hope those who have supported this very bill until 
recently will reconsider making technology policy a partisan issue, 
when President Bush's last budget saw it as a key component of our 
country's need to invest in our future.
  Again, I want to commend the Senator from South Carolina for carrying 
the entire burden of this debate on the very important legislation on 
the floor. If this bill is industrial policy, then virtually every 
authorization bill of every mission agency and every appropriations 
bill of every mission agency should provoke a similar debate. And this 
body will not have much time to debate anything else.
  Mr. President, I appreciate the opportunity to speak.
  Again, I commend the Senator from South Carolina for his excellent 
work, and I hope we can proceed to final passage of this bill quickly.
  Mr. HOLLINGS addressed the Chair.
  The PRESIDING OFFICER (Mrs. Murray). The Senator from South Carolina.
  Mr. HOLLINGS. Madam President, the distinguished Senator from New 
Mexico has been the leader with respect to technology and 
competitiveness in the field of technology.
  Madam President, he does not just serve as the chairman of the 
Subcommittee of Armed Services on Industry and Technology but he has 
chaired for years the Competitiveness Task Force in Congress. He and I 
have been in lockstep with respect to trying to sustain all of this 
wonderful talent that we have, and at the same time direct it to where 
it is needed, the talent being of course in our National laboratories, 
Livermore, Sandia, the others.
  We have worked very closely with Craig Fields over the years. We were 
disappointed when he left. Otherwise, we were very much enthused, as 
the distinguished Senator has emphasized, when Arati Prabhakar took 
over as the administrator of DARPA, and in her current capacity as 
administrator of NIST. Her service has given us a tremendous continuity 
and integrity in the entire approach.
  I like the Senator from New Mexico's emphasis with respect to the 
bipartisan nature of this effort. Until this bill reached the floor, I 
always thought it to be bipartisan. I cannot thank Senator Bingaman 
enough. We really are engaging in continuity and follow-up, here. This 
is just one more step in a well-established direction that he gets the 
lion's share of credit for.
  I do understand now that the distinguished Senator from Wyoming wants 
to amend his amendment, which of course is his right. I wish he would 
amend it all and eliminate it; eliminate all extraneous matters, and 
then he and I in a spirit of goodwill can get on with this measure. I 
yield the floor.
  Mr. SIMPSON. Madam President, Senator Hollings and I do a lot of 
legislative work together in this Chamber. As I say, I have been more 
times on his side than on the opposing side. But there is another 
linkage that we have, and that is that our spouses are trustees of 
Ford's Theater. Senator Hollings and I as ``spouses of are invited from 
time to time to various festivities at that particular remarkable 
historical and entertainment site. I want to keep that in close view as 
we go forward.


                     Modification of Amendment 1486

  Mr. SIMPSON. I understand that, procedurally, at the current time I 
have a right to modify my pending substitute. I send to the desk a 
modification of the substitute amendment.
  The PRESIDING OFFICER. The substitute is so modified.
  The modification is as follows:

       On page 13 strike line 6 through and including page 14, 
     line 25.

  Mr. SIMPSON. Madam President, although it is not necessary, it is 
important, I think, as we do proper legislation. This is a two-page 
section in the bill that has to do with codification of the issue of 
the taking of property and proper compensation. There is a judicial 
decision on that, and that is quite adequate. This would have codified 
that. But for the purposes of procedure at this time, I submit that 
modification and ask its acceptance.
  Mr. WALLOP addressed the Chair.
  The PRESIDING OFFICER. The Senator from Wyoming is recognized.
  Mr. WALLOP. Madam President, I have heard a lot of talk about this 
bill being industrial policy. I have heard a lot of talk about why it 
is unwise policy, and about all kinds of provisions in it, or that 
might be added to it. What has not been said, and must be said, is that 
it is none of the above. It is straight, old-fashioned, politics.
  Madam President, I have a speech that was given in California by the 
Democratic Party chairman, David Wilhelm. It says, in effect, that this 
bill--not by name, but by strategy--is for the purpose of taking 
California and its electoral votes for the Democratic Party. Let me 
read a few things from a news article:

       The comments by the 36-year-old Wilhelm, now the aggressive 
     new chairman of the Democratic National Committee, came last 
     weekend at the State party convention where he made sure 
     everyone understood that Clinton will not repeat Bush's 
     mistake of a year ago.

  The President was elected with just 43 percent of the vote. 
``Clinton's success or failure in transforming his first term into a 
new Democratic majority depends largely on his ability to consolidate a 
tenuous political hold on California,'' Wilhelm said.
  ``California is the beginning point and the ending point of our 
electoral college strategy,'' he said.

       If you win California, the entire match shifts in your 
     favor. If you lose California, you are so far behind the 
     eight ball, you are left with nothing but a thread-and-needle 
     strategy, where you have to win just about every remaining 
     State so that you have a chance.
       By contrast, Wilhelm ticked off a list of actions Clinton 
     and the Democrats plan to take through California: provide 
     money, operatives and frequent campaign swings by the 
     President and Vice President as part of a coordinated plan to 
     replace Pete Wilson with a Democratic Governor in 1994.

  Madam President, I hope the Senate listens to this and the American 
public listens to this.
  The next point says: Use the office of Commerce Secretary Ron Brown 
to develop and carry out a targeted strategy to help boost California's 
ailing economy and cushion the blow of military base closings by 
earmarking defense conversions and job retraining for the State.
  Madam President, what this bill does is take $2.8 billion of 
Americans' hard-earned tax money for a campaign fund. That is what this 
bill we are debating is all about. It is not about an industrial 
strategy. Rather, it is intended to put into the hands of the office of 
the Commerce Secretary, Ron Brown, the resources to carry out the 
above-described strategy to boost the economy of California and to earn 
votes.
  Some on our side have been willing and honest cosponsors of this 
legislation. But clearly they did not understand what it was that they 
were being asked to do. When you combine this bill with the comments 
from the chairman of the Democratic Party, it no longer is merely some 
little bill. Simply, it is a campaign strategy to use $2.8 billion of 
the public's money over 2 years. Incidentally, is it not curious that 
the length of the authorization period is only 2 years, when most of 
the rest of the appropriations and authorizations are for 5 years? How 
much will it cost over the next 5 years to help Secretary Brown carry 
out his targeted campaign strategy?
  I am opposed to an industrial policy because I do not believe it 
works. One of our so-called successful industrial strategies was the 
Synthetic Fuel Corporation, which wasted billions of American dollars 
to buy us nothing. We have seen what happened to Japan when they spent 
billions of their taxpayers' dollars trying to develop HDTV, only to 
find it was all wasted.
  The Government's place is not to pick winners and losers among 
America's private sector energy. But when they have $2.8 billion to woo 
big corporate America--and you can, because big corporate America's 
basic political philosophy is to go where they are rewarded--and you 
use that money to target a campaign strategy to elect Democrats, it is 
not why Americans pay taxes.
  This debate, therefore, is not an argument about whether we should 
have a national industrial strategy; it is an argument about whether we 
are going to stand by and allow the Congress of the United States to 
spend Americans money to assure a permanent majority for the Democratic 
Party. The sum $2.8 billion may not seem like very much in terms of the 
great, enormous deficits America runs, but I will tell you that the 
people in the State of Wyoming think it is a huge amount of money. It 
would run our State for 4 years.
  I hope that the Members of the Senate on both sides realize that what 
we are doing here is wrong. It is not about the philosophical 
differences between parties. It is about whether we will use the money 
of Americans honorably, or as part of a targeted strategy to help boost 
California and to keep Democrats elected.
  I yield the floor.
  Mr. HOLLINGS. Madam President, nobody in their right mind is going to 
believe what you just heard on the floor of the U.S. Senate. I thought 
as the Senator from Wyoming got into his marvelously creative tale that 
he was also going to assert that Ron Brown deliberately caused the 
earthquake in Los Angeles--for the sole purpose, of course, of allowing 
Democrats to pump $6 billion or $7 billion into California for sinister 
electoral purposes. This whole California conspiracy theory is 
fabricated out of the whole cloth.
  Because my own industry could not qualify under Ron Brown. We went 
out and got a $350 million program out of Livermore in California. It 
is almost like the fireplug wetting the dog. I mean, what we have had 
is California giving to the textile industry what Ron Brown refused 
them, a $350 million program.
  Let us talk sense and let us talk facts. I presume I have met Mr. 
Wilhelm. I cannot tell you when. I do not say that in a disparaging 
sense at all. I just am not that familiar with the national party and 
the talks they are making and what have you.
  But I can tell the Senator the Democratic National Committee has no 
relation whatsoever to this program here, and this has been his 
program, and I am going to show him how this reckless talk of $2.8 
billion could not possibly happen unless it went through very loyal and 
studious and professional Republican hands.
  If the Senator has a question, I will be glad to try to answer.
  Mr. WALLOP. Mr. President, will the Senator yield?
  Mr. HOLLINGS. Yes.
  Mr. WALLOP. The effect of it is, from what I read, it is not a unique 
thing. That was last April. But on December 5 of this past year, there 
is a statement that says:

       The White House, mindful of how California turned on George 
     Bush, is waiting to 1996 to shower the State with attention. 
     In addition to his three quick visits, Clinton put Commerce 
     Secretary Ron Brown in charge of a California task force that 
     directs Federal spending and other assistance to California. 
     Clearly it is a very important political State, Brown says.

  Mr. HOLLINGS. The Senator and I gave him the money.
  Mr. WALLOP. I am suggesting that what we are about to do is invest in 
the Department of Commerce a significant amount more of money. Its 
purpose has been signaled to us, not through California earthquake 
relief or fire relief, but through a very specific program which put it 
in the Department of Commerce to be expended by the Secretary of 
Commerce, Mr. Ron Brown, after having heard from him and from others in 
the administration, including the chairman of the Democratic Party that 
this is part of a targeted program to achieve political success.
  Mr. HOLLINGS. Let us get down to the real figure, I say to the 
Senator. Let us assume that is true and I am Ron Brown. Now, I am 
looking at the laboratory itself, and that is not for California. That 
is the regular old Bureau of Standards laboratory for next year, 
funding of $320 million. So I cannot send that money to California. I 
look down the list and find out the National Science Foundation is $75 
million, and I cannot send that money to California. I know 
construction and facilities, we have been trying to get the old Bureau 
of Standards into better facilities with $110 million of that amount. 
And the national information superhighway--that money will be 
distributed nationwide. Otherwise, the $475 million is all National 
Academy of Engineering merit selection and peer review.
  Maybe I ought to emphasize here the merit selection process, 
incidentally, because it is very interesting in that we have two folks 
over there administering that program--two women of impeccable 
credentials. But the truth of the matter is that we have Mary L. Good, 
who is the Under Secretary of Technology. She was appointed by 
President Reagan to chair the Board of Directors of the National 
Science Foundation. You are not going to find a more competent industry 
scientist. She was vice president in charge of all research and 
technology for Allied Signal for years. But she was President Reagan's 
appointee. So we more or less have a Republican appointee directing 
this alleged Democratic Party conspiracy to pump money into California.
  And then Arati Prabhakar, who served in the Department of Defense in 
the Reagan administration from 1986 to 1990. She was those 4 years 
program manager of the Electronic Sciences Division of the Defense 
Science Office in the Defense Advanced Research Program. That was under 
President Reagan. Then under President Bush she was Deputy Director of 
the Defense Sciences Office from January 1990 to April 1991, and then, 
from 1991 until 1993, she was Director of the Microelectronics 
Technology Office and managed the largest office of all, $300 million 
with 300 contracts--in a Republican administration. I guess that Ms. 
Prabhakar, too, is part of the Democratic National Headquarters 
conspiracy to pump money into California with an eye to 1996.
  So when you look at that particular part of the program, Wilhelm does 
not know what he is talking about. He is whistling Dixie. We right now 
have $30 million in manufacturing technology centers, the so-called 
Hollings centers. That would go up to $70 million next year and $100 
million the following year, and they are all under a competitive basis 
and peer review and by way of competition. I had agreed with the 
distinguished Senator from Missouri when we put through the authorizing 
legislation that this was going to be peer reviewed.
  I hear what the Senator says and, incidentally, I am grateful to the 
Senator from Wyoming. I heard the rumor, and I said I do not know what 
they are talking about. They are saying Ron Brown is going to be 
dishing out the big bucks to California to carry the State. I said I 
wish the Senator from New Mexico, Jeff Bingaman, were here. We have 
been working in this technology field for years now. Books have been 
written on it. We do not even have a good start. There is $70 billion 
in research money, $40 billion in defense alone, but we get peanuts for 
these technology programs. So if Wilhelm thinks S. 4 is a piggy bank 
for funding California, he doesn't know from ``sic 'em.'' He better 
look at some of the other departments where the real money is.
  I had one program here just came through this week for McDonnell 
Douglas, $42.9 million for advanced systems of hardware. They were in 
that contract. That is over in defense, that one little contract, in 
the backyard of the senior Senator from Missouri right where he is 
living in St. Louis, the fundamental industry that he supports, they 
get $42 million. That's just one defense contract, and we have $30 
million for seven of the centers around the country. It is a modest 
amount.
  But Ron Brown--let us get him out of the particular debate here. I 
cannot imagine passing this thing out unanimously on a bipartisan 
basis, and working on it over 3 years, and all the hitches taken care 
of. We got together on a bipartisan basis with the House side. All of 
these things have been ironed out. And the Lord is my judge, I never 
heard of David Wilhelm or any notion that this was a pot of money to be 
dished out for electoral purposes. That is pure fantasy.
  That is less than what the Senator from Missouri--the Senator voted 
for $1.5 billion in June when we reported the bill out. But when OMB 
got hold of it, they cut it back.
  So this is not any ballooning money the administration got. They have 
to find out from David Wilhelm, to quit cutting my budget because they 
are cutting, in fact, $143 million that we could have put out in 
California, according to that article. They are cutting it back $143 
million. We better get David Wilhelm to talk to the OMB, because they 
are cutting out our campaign in California. You know differently.
  Mr. WALLOP. Will the Senator yield?
  Mr. HOLLINGS. Yes.
  Mr. WALLOP. Madam President, I am touched by the list. The National 
Science Foundation, of course, takes the grant and places them, and has 
not been above having them placed with a little direction.
  But leaving that all aside, let me just not quote David Wilhelm. It 
is Secretary Ron Brown, himself, saying, ``It is a very important 
political State and we are really doing this because of basic economic 
judgment.''
  I understand how long the Senator has worked on this bill. But this 
is not what we passed almost by unanimous consent in previous years. It 
is quite a different bill. It contains nearly 10 times as much 
spending. Then, it authorized $208 million. Now it is $2.8 billion.
  The fact of it is, things have changed. I appreciate you do not 
believe this, but your party chairman appears to, and some of us are 
skeptical enough to believe that politics do play a role. I would not 
be accusing the Senator from South Carolina of playing politics, but 
when you have these various statements, one has to be skeptical.
  And one has to believe that corporate America is only too willing to 
take tax dollars from whatever source they are, Republican or Democrat. 
One of the things that is interesting to many of us is the fact that 
corporate America, having once opposed the bill, now supports something 
called industrial policy.
  But I am still persuaded that this is at least as much, and probably 
twice as much, political policy as it is industrial policy.
  Mr. HOLLINGS addressed the Chair.
  The PRESIDING OFFICER. The Senator from South Carolina.
  Mr. HOLLINGS. My head is shaking in disbelief about the figure used. 
They always relate that back about 10 times as much. It is 10 times as 
much that the Senator from South Carolina put in there under one 
particular item for the centers when we started, because the Bush 
administration did not like this program. They absolutely redlined it 
and would not appropriate anything for the first 2 years.
  So you can say, 1,000 times as much, if that is the way you want to 
describe it. But the bipartisan technology group--and I will put that 
in the Record--called for a program of between $4 and $8 billion. We 
got it up 2 years hence at $1.4 billion. We have not got it to $4 
billion, and we have not gotten it to $8 billion. These are your 
friends that recommended that much.
  But, the gentleman's statement should not really poison the well with 
respect to the bipartisan nature of this bill, because I think the 
distinguished Senator here was in on that program sometime back. I will 
have to get the particular one that was recommended by the task force.
  I have here the report of the Senate Republican Task Force on 
Adjusting the Defense Base. This is defense conversion, dated June 
1992. It is signed by Senator Rudman, Senator Dole, Senator Hank Brown, 
Senator Cohen, Senator Danforth, Senator Domenici, Senator Hatch, 
Senator Kassebaum, Senator Lott, Senator Lugar, Senator McCain, Senator 
Seymour, Senator Stevens, and Senator Warner.
  You have 17 distinguished colleagues of yours. I do not see your name 
listed on that particular task force.
  But this task force concluded as follows:

       The task force endorses two programs. The National 
     Institute of Standards and Technology is important to the 
     effort to promote technology transfer to allow defense 
     industries to convert to civilian activities. These programs 
     are the manufacturing technology program and the advanced 
     technology program.

  So we are doing exactly what the Republican task force recommended. 
Look at the public record. The peer review boards do not award plums to 
California on a political basis. We could not have gotten this thing 
through, we really could not have, if we had been a pork barrel 
program.
  We wanted to make sure it was balanced, it was peer reviewed, it was 
on a merit basis, it was on a contested basis in competition. And then 
we followed through by getting President Reagan's appointee and 
President Bush's appointee to come over to Commerce to run these 
programs.
  Then to come in loosely and say the funding is $2 billion, gone up 10 
times, ballooning--that is not the case at all. We have the breakdown 
here, and Secretary Brown has no control whatsoever in where the money 
is awarded.
  Now I know something about Government. I know where I can get money. 
I was taught by my own textile industry. We have never had $350 million 
for the advanced technology program. But the textile crowd came to town 
and could not qualify under Secretary Brown. And here I am, the 
chairman of the committee. They called and asked, ``Why can't you take 
care of your people?'' Commerce told me, ``Well, they do not meet 
muster.'' And so I said, ``Well, that is it. Live by the sword, die by 
the sword.'' I put it in merit review in the bill myself.
  Then I got a call to invite me to the textile award announcement down 
in Raleigh, NC. I said, ``What award is that?'' They said, ``We got the 
textile program funded out of Livermore, the Energy Department. It is a 
$350 million program and we are going down to Raleigh, NC, to advance 
it. We know you are interested and have tried to be helpful. Thank you, 
all the same.''
  So continue your search for conspiracies. Your notions are way off 
base with regard to S.4. If this is some kind of Democratic Party 
conspiracy, it is the sorryest, most inept conspiracy imaginable.
  Now you know that you would really be able to sail ahead here if 
Secretary Brown just disregarded the particular law and did not have 
the peer review, did not have the merit selection. Boy, oh boy, then 
you could really give us a fit there. And I hope you will watch it 
between now and 1996, because I certainly will, I promise you that 
right now.
  Mr. WALLOP. If the Senator will yield, I would say to my friend, by 
then it would be too late. Should this strategy have worked, it will 
not matter what I or anybody else on this side would say.
  Mr. HOLLINGS. But after all, to get California moving, we have got to 
start dishing out the big bucks, as the term was used. I would hope 
they could start dishing out the big bucks to California, but they are 
not dishing it out from this program.
  Watch defense, watch energy, watch disaster funds. I never did get a 
good accounting of that, and that bothered me, those disaster funds. 
Because I had the hearing, I say to the Senator, with respect to the 
San Andreas Fault where the veterans hospital fell into the crevice 
there. We went out after several months and found out, where in the 
world were these $3,500 loans being made by SBA. And they invariably 
had a swimming pool manufacturer going door to door, saying, ``Sign 
your name here and you get your $3,500. We will build a swimming 
pool.'' And the Government is never going to come back, as the district 
attorney is too busy out there in California, and they never did. It 
was a scandal. It was a scandal.

  You have to watch those things. But do not look at the newspaper at 
what Ron Brown or David Wilhelm were saying. If they were really going 
to attempt some political hijinx, do you think they would be announcing 
it in the newspaper? They are better politicians than that.
  Mr. WALLOP. Again, if the Senator will yield, forgive my continued 
skepticism. But when I see a strategy so clearly described and then I 
see money that had not been anticipated going to that source, you would 
forgive me if I thought--like most Americans thought--that this was 
part of a strategy that had been laid out.
  Mr. HOLLINGS. I understand the Senator's fear, but I can tell him in 
all honesty: All our Republican colleagues participated and they never 
raised this question. I understand that was April of last year, that 
particular statement. In 1993 we reported this bill out unanimously, 
all Republicans and Democrats, in June 1993.
  Mr. WALLOP. I would say the second one I quoted was December 5 of 
last year.
  Mr. HOLLINGS. The second one. But the first one----
  Mr. WALLOP. And it is, if anything, more specific. So the pattern is 
running in the direction that causes the Senator anxiety.
  Mr. HOLLINGS. Then as a last plea, think of the country, not 
Republicans and Democrats and who is going to get elected and 
reelected. We have had a struggle, trying to get the economic backbone 
of this country repaired. It has degenerated for various reasons. 
Financially, the Senator from Wyoming agrees on that, we have not paid 
our bills as a government. With respect to trade, we have not enforced 
the trade laws. I always said when I put up the textile bill, if they 
would only enforce the existing trade agreements I would withdraw the 
bill. We have never been able to get an industrial policy going except 
on an ad hoc basis for semiconductors; yes, for airplanes; yes, for 
cancer research and health matters and a select group of industries.
  But when it comes to small business and general assistance on a merit 
basis and peer review in limited amounts? I noted for the Senator a 
defense award made this past week in St. Louis that exceeds the entire 
budget for the extension centers over in Commerce--just one award.
  On a very, very limited basis, on a bipartisan basis, we have tried 
to move forward, but you would want a newspaper article quoting a party 
chairman to sour the well. I hope it will not. I hope the colleagues 
will look at the number, 10 times the number, $2.8 billion. When you 
vote the Simpson amendment, you do away with the Bureau of Standards. 
You do away with programs that have been going on for years, formative 
programs. The facilities they are going to build, $110 million 1 year, 
and $112 million--not out in California, that is right here in 
Washington.
  So I hope the Senator will look at it closely and reconsider his 
position on this one and I thank the distinguished Senator.
  The PRESIDING OFFICER. The Senator from Wyoming.
  Mr. SIMPSON. Madam President, the senior Senator from Wyoming and I 
have legislated together for nearly 30 years in the Wyoming Legislature 
and House of Representatives and then he went on to the Wyoming Senate 
and then he came to the U.S. Senate 2 years previous to my entry here. 
It has always been a great pleasure, a great exciting adventure in 
legislating with my friend Malcolm Wallop.
  Of course he will leave this Chamber at the end of this session to go 
into other things in life, like many others on both sides of the aisle 
have done. But one thing about my friend Malcolm Wallop, he is direct, 
exceedingly articulate, very dedicated, and he has come upon something 
that is very disturbing to us. It matters not. I do not attribute any 
of this to Senator Hollings. In fact, Senator Hollings is one of the 
most knowledgeable people of what the needs are out in the area of his 
committee jurisdiction. He works with Senator Danforth in a unique way.
  But Senator Wallop has just spotlighted something which has to be 
distressing. If this had happened during Ronald Reagan's time or George 
Bush's time, where the chairman of the Republican Party got up and 
spoke about what needed to be done in a certain State for one purpose 
only, to carry the State in the next Presidential election, I can tell 
my colleagues, having sat here for 12 years and watched--not Senator 
Hollings but a certain trio or cadre over here on this side of the 
aisle that chopped George Bush's bicycle tires to shreds on a daily 
basis, they would have had high glee in this situation.
  It is the same irony we find, I suppose, when we see what is 
happening with the Whitewater issue. I heard comments from others what 
a horrid thing it is that the Republicans are involved in this in some 
way.
  As far as I know, the Republicans do not have much power over the New 
York Times or the Washington Post or other papers that seem to be 
reporting this with great relish as they often do. They get excited and 
just seem to go to pieces when they get slavering over some cadaver in 
the roadway, some carrion upon the pavement. And that is what they see 
here as something they can hardly stop doing. And that is the way that 
works. But that is not Republicans.
  I could not help but think how, during the administration of Ronald 
Reagan and George Bush, we had a request for congressional 
investigation about once a day. There was the Iran-Contra. There was 
HUD. These were not just normal committee activities. These were the 
things that were just continual. October Surprise--oh, there was a 
magnificent, dazzling thing, the October Surprise--surely the most 
sinister thing that ever lurked in the caverns of American political 
life. And not a thing to do with it; nothing. Absolute zip. But it sure 
did not help George Bush when it came to October. So many things like 
that.
  So, if we can all remember the horror that would roar through our own 
bosoms if we saw this occur, whether it be investigations that the 
Democrats used to urge upon America once a week or once every other day 
with Ronald Reagan and George Bush in the White House. Oh, that was a 
frequent call. And from the same people who are saying you are picking 
on us.
  But there is one thing about the Senator from South Carolina and I, 
we both take politics as a contact sport. He is a good man to get in a 
scrap with, because it is done with gusto and spirit and energy and 
always, at least in my experience, good humor. When you walk away, you 
shake hands and move on. That is the pleasure of legislating.
  A lot of people do not understand that aspect of what we do, but I 
surely understand it because I have been doing it for 30 years. The 
only time I get in trouble is when I get a belly full of something and 
then I am not very good at my craft because it shows in many, many 
ways--when I get a pure belly full.
  So we have had some who feel very, very suspicious simply because, 
rightly or wrongly, this man, this chairman of the Democratic Party, in 
an interview of April 10, 1993, Saturday, final edition of the San 
Francisco Chronicle, talks about the comments by this vigorous 36-year-
old Wilhelm, David Wilhelm, who is the same person who wrote a very 
powerfully potent, almost threatening kind of letter to Senator Alfonse 
D'Amato of New York. That letter you will want to see, and plenty will 
see it, because it was a slasher.
  So this fellow is not exactly one to wallflower here or Willie 
Wallflower. He is pretty tough stuff. He tells us, as Senator Wallop 
shared with you, that the beginning and end of all political life for 
the President of the United States is California. That is in his 
article. He says:

       California is the beginning point and the ending point of 
     our Electoral College strategy. If you win California, the 
     entire map shifts in your favor. If you lose California, you 
     are so far behind the eight ball that you are left with 
     nothing but the thread-the-needle strategy where you have to 
     win just about every remaining State that you have a chance.

  And then the most disturbing part is that he listed the things, he 
ticked off a list of actions that Clinton and the Democrats need to do 
to woo California. And the one that grinds in our craw like the rocks 
in a gizzard is this one. It says:

       Use the Office of Commerce Secretary Ron Brown to carry out 
     a targeted strategy to help boost California's ailing economy 
     and cushion the blow of military base closings by earmarking 
     defense conversion and job retraining programs for the State.

  And then more.
  That is very disturbing and I think would be exceedingly disturbing 
if it were heard by a Democrat who is listening to a Republican 
Chairman talking about what he or she were going to do for a Republican 
President. That would spook you up.
  Then, of course, the more current one of December 5 where a 
California pollster--this is just a few months ago--says:

       But the White House, mindful of how Californians turned on 
     George Bush, isn't waiting until 1996 approaches to shower 
     the State with attention.

  I am being repetitive. It has been shared with you. Then it says:

       In addition to his frequent visits, Clinton put Commerce 
     Secretary Ron Brown in charge of a California task force that 
     directs Federal spending and other assistance to California.

  Then Ron Brown said clearly, it is a very important State 
politically, a political State but ``we're really doing this because of 
a basic economic judgment. You cannot very well declare economic 
recovery in America until you start to turn the California economy 
around. The politics won't matter if there isn't a recovery.''
  Those things do not have anything to do with Senator Hollings. They 
have a lot to do with serious reservations by people in our party when 
we see public comments like that. I think my good colleague from 
Wyoming is perfectly right in his scope and duty to present that, and 
it disturbs us.
  It is a big bill. It has lots of things in it. It has some things 
that have gone up from zero percent to big percent. I am sure that all 
of those have been explained, and I am not on the committee of 
jurisdiction and I would not in any way want to get into the detail of 
the bill because I know that the mastery of the subject is far beyond 
me.
  But I do note in the summary of the authorization--I believe this is 
a committee printout--that there are some huge increases. I am sure 
that every one of them is explainable. These are the things that have 
caused concern. Here is one, SBA pilot program. I do not know what that 
is, and that is $50 million. It was zero in 1994. There was no request 
for it and then $50 million. I am not trying to delay, but I ask about 
that one.
  Then the NIST funding goes from the fiscal year 1994, $520 million to 
a request of nearly double, $935 million. The bill takes it up further. 
Then in 1996, all of them go up.
  The disturbing thing to us, again, not attributed to the Senator from 
South Carolina, is that it is curious to see a bill with these kind of 
increases for only two fiscal years, the two fiscal years which will 
end at election time of 1996.
  That is the essence of Washington, DC. Because I am sure there is an 
explanation for that, but the perception of it is beyond comprehension. 
When you read the language, when you see the request, when you see it 
for 2 years, you know as a political person--and we all are--that this 
is a tremendous political advantage. I hear the part about peer review. 
I believe that, and I need to learn more about that, apparently. I hear 
the material about merit. But I also know that I hear politics, maybe 
on cat-like tread, but I tell you, I think if you listened and 
developed it further, it would sound like elephants clomping through a 
hard wood floor.
  So that is the concern; that remains a concern. I do not know how 
many more wish to speak on the amendment. I know that the Senator from 
South Carolina will, and he has been very courteous to us, make a 
motion to table within a very short time. I certainly will yield to the 
Senator from Washington. I believe that is perhaps, I will say, the 
final warning. I will say that I hope our people, if anyone wishes to 
speak on the amendment, will come forward so that Senator Hollings may 
proceed with that after we hear from our colleague from Washington.
  Mr. HOLLINGS. I did hear the Senator from Missouri wanted to say a 
few remarks. I hope he hears it or someone can communicate that to him.
  Mr. GORTON addressed the Chair.
  The PRESIDING OFFICER (Mr. Mathews). The Senator from Washington.
  Mr. GORTON. Mr. President, it occurs to this Senator that the 
amendment proposed by my distinguished friend and colleague from 
Wyoming presents at least two quite distinct issues for debate in this 
body and perhaps three.
  The first issue, of course, is the validity of the underlying bill, 
the bill for which the Simpson amendment is a substitute.
  The second is the validity, the importance, the urgency of the 
various reforms which are contained in the Simpson amendment itself.
  And the third has to do with one of the criticisms that was presented 
by the distinguished Senator from South Carolina with respect to this 
amendment, and that was that it substituted for every single element of 
S. 4 itself.
  This Senator, for example, joins with the distinguished chairman of 
the Commerce Committee in praising the effectiveness and acknowledging 
the importance of the National Institute of Standards and Technology 
and in being somewhat biased in favor of increasing its ability to 
provide services to American business.
  The Senator also is a strong supporter of the National Science 
Foundation and the work that it does in this connection.
  This Senator might suggest that if these items were separated from 
the primary thrust of the bill that the Senator from Wyoming himself 
would very likely be willing to accept these additions and these new 
programs. The criticism which he has levied and which his distinguished 
colleague from Wyoming has levied against the major portions of this 
bill is that which provides for subsidies, provide a huge new supply of 
pork to be distributed by a national administration.
  A particular department, a political agenda of which is certainly 
open to question at the very least, as the Senators from Wyoming have 
pointed out, that is the heart of the criticism which has been levied 
against this bill. In that connection, this Senator finds that 
criticism to be overwhelmingly justified.
  This bill and its principal elements, without exception, with respect 
to its new programs, is an attempt further to governmentalize the 
private sector of the economy of the United States, either at its worst 
to distribute money for purely or principally political purposes or, at 
best, to substitute the determination of Government bureaucrats for 
that of the private sector with respect to what should be the areas of 
concentration of a dynamic and a growing American economy.
  If the history of this economy and of every other economy in the 
world is any indicator, Government simply is not capable of making 
decisions of that sort effectively or efficiently when compared to the 
individual judgments of individual entrepreneurs. Government agencies 
will always and inevitably be behind the curve in that connection.
  When, on the other hand, the Government supports a National Science 
Foundation, when it supports a National Institute of Standards and 
Technology, it can be a facilitator when it stays out of the direct 
business of business itself.
  And so this Senator, and he suspects most of his colleagues on this 
side, would be happy to provide for increased efficiency, 
effectiveness, and services on the part of those two entities. This 
Senator joins with his colleagues on this side of the aisle, however, 
in stating that the bulk of this bill, the largest amount of money 
contained in this bill, is either purely political or almost certainly 
ineffective and would be far better not spent and returned to the 
people of the United States either directly by lower taxes or 
indirectly by this great a diminution of the deficit.
  But the other half, perhaps the more important half, of the debate in 
which we are engaged right now has to do with the merits of the various 
programs contained in the Simpson amendment itself.
  In that connection--and it seems to this Senator that the arguments 
in favor are for all practical purposes overwhelming--it may be that 
many of the individual bills which are gathered together in the Simpson 
amendment have not gone through the long and laborious process of 
endless committee hearings, but that certainly is not the fault of the 
sponsors from both sides of the aisle of each of these proposals. Each 
of them is a proposal which meets with a tremendous degree of support 
in the private sector of our economy, a private sector increasingly 
beleaguered by Government regulations which limit its ability to 
compete, limit its ability to innovate, limit its ability to provide 
better and better jobs and careers for increasing thousands of American 
people.
  While we can make these statements in general, I would like to share 
with my colleagues a couple of examples of specific small businesses in 
my own State that have taken the opportunity to write to me about the 
way in which they are treated and regulated by Federal agencies. The 
first is an excerpt from a letter I received from a business entitled 
``Skagit River Steel and Recycling.''
  The president of that company writes me as follows, and I quote:

       We are a typical small business. We employ 37 people at 
     well above minimum wage and provide 100 percent medical 
     insurance for our employees, life insurance, and a profit-
     sharing pension plan. We believe that by the very nature of 
     our business we are a big part of the solution to the 
     reduction of the waste stream. We take seriously our 
     responsibilities to educate the public about recycling and 
     conduct many school tours and speaking engagements to that 
     end. We strive to be a good corporate citizen as we believe 
     every business should. But we are also being taxed into 
     extinction. It is not just direct taxation but the insidious 
     tax that is imposed in the form of excessive regulation, 
     paperwork, and paperwork regulation. Because these taxes are 
     so difficult to quantify, most small businesses fail to 
     recognize the true impact this creeping bureaucracy is having 
     on their business. I have listed the administrative costs of 
     compliance with Federal, State and local regulations.

  This ends the quote directly from the letter.
  The president then said that his total tax of regulatory burden was 
$248,585 for a recent fiscal year. Of that, $51,341 was regulatory 
compliance spending.
  The president of the company ends his letter by saying, and I quote 
once again:

       We employ 3 full-time people or 8 percent of our total work 
     force just to complete Government forms and comply with 
     Government regulations. No small business can survive very 
     long under this burden.

  Now, Mr. President, two restaurant owners recently contacted us and 
said that they were forced by the Bureau of the Census to fill out what 
was called a Commodity Flow Survey. Each told me that this survey cost 
them $500 to complete. On their behalf, I contacted the Bureau of the 
Census and once the Bureau took a look at the requests, its officials 
said that for one of the restaurant owners, and I quote: ``The 
activities at his location are not covered by this survey.''
  I must say that I was somewhat puzzled that someone at the Bureau of 
the Census did not reach that conclusion before they required the 
business owner to shell out $500 in order to complete that survey. But, 
of course, the fact that that expenditure was undertaken did not affect 
anyone in the Bureau of the Census at all, but it did have a small but 
nevertheless measurable effect on the owner of that restaurant.
  There is not a Member of this body who could not multiply each of 
these examples by 10 or 100. There is not a Member of this body who has 
not heard the legitimate complaints of those who are attempting to 
build their businesses and provide jobs for the American people about 
the crushing burden of regulation imposed upon them. There is not a 
Member of this body who does not recognize that the great majority of 
all new jobs in this country are created by small businesses. The 
amendment of the distinguished Senator from Wyoming would mark a 
tremendous step forward in relieving some of that burden and in giving 
promise to our small business people that additional burdens would also 
be lifted.
  There is no question in the mind of this Senator whatsoever that the 
relief from the burdens which would be provided directly by the passage 
of this Simpson amendment into law would vastly exceed all of the 
improvements in our business climate and competitiveness by every one 
of the programs in S. 4 even if those programs worked in the way in 
which their sponsors intended, an intention which will almost certainly 
be frustrated in the real world.
  So purely on a substitution of the Simpson amendment for S. 4 itself, 
the business community, the job climate, American competitiveness, 
American exports would all be enhanced. At the same time, I am sure 
that changes and improvements in the National Institute of Standards 
and Technology and the National Science Foundation could also be 
accommodated.
  Mr. President, we do not need a whole series of new Government 
programs. We do not need a Government deciding which cutting edge or 
innovative businesses it should invest in. We need a freeing up of a 
free-market system which has meant so much to the people of this 
country, and we will come far closer to freeing up that free market by 
the passage of the substitute than we will by the passage of the 
original bill.
  Mr. HOLLINGS. Mr. President, it is difficult to believe your ears 
when those who come from the aircraft industry, subsidized over the 
many, many years, preach about free markets and the evils of industrial 
policy. The aircraft industry is the beneficiary of government 
industrial policy par excellance, when government-financed 
technological research, with all the financing of the Export-Import 
Bank; and just recently boosted with a $6 billion program, an order 
from Saudi Arabia for 50 commercial aircraft to be financed by in 
excess of $6 billion financing by the Export-Import Bank, and a 
rescheduling of billions in Saudi Arabia's debt.
  I have a hard time believing my ears when I hear about the free 
market from those who have benefited so generously from government 
policies.
  Let me refer specifically to April 10, 1993 where the Senator from 
Wyoming said that Wilhelm ticked off a list of actions that Democrats 
planned to take to move California. Amongst others here, about Ross 
Perot; high-techology planning, startup companies; investments; and get 
some other things done.
  And I quote, use the office of the Commerce Secretary Ron Brown to:

       * * * develop and carry out a targeted strategy to help 
     boost California's ailing economy, and cushion the blow of 
     military base closings by earmarking defense conversion and 
     job retraining programs.

  That is how much Wilhelm knows about it. After all, Secretary Brown 
does not have the defense conversion and job retraining programs. I 
know from my experience, a modest amount you might call it, in commerce 
with EDA, he could give the entire EDA budget. We do not earmark. We 
refuse, on the Senate side, to earmark EDA funds, as all the Senators 
know.
  Otherwise, to use Secretary Brown--that is why I was wondering, I was 
going down the list, not having seen the article, and saying, well, he 
cannot use it here, he cannot use this construction money there, he 
cannot do this other thing.
  One other one that was pointed out as an increase about the Small 
Business Administration, that is only $50 million. That was worked out 
for technology loans to small business. Everybody is for that. That is 
a pittance compared to the $720 million that we voted last year when 
the loan fund ran out of money.
  This Senator happens to have the Small Business Administration 
appropriations. We worked that out. But this, when it comes to small 
business loans, is peanuts in this particular bill.
  When we moved California, Wyoming or South Carolina, what is really 
said, and you have to agree, California is the beginning point. This is 
what chairman Wilhelm said.

       * * * is the beginning point and the ending point of our 
     electoral college strategy. If you win California, the entire 
     map shifts in your favor. If you lose California, you are so 
     far behind the eight ball that you are left with nothing but 
     a thread-the-needle strategy. Well, you have to win just 
     about every remaining State that you have a chance in.

  I agree with that. I know a little bit about national programs. I 
tried to get in one. Nobody remembers it. But in any event, I remember 
it very, very well. I traveled to the State of California, as well as 
the other 49 States.
  It goes on to say:

       Bush and the Republicans used to make similar noises in 
     paying lip service to California's 54 electoral votes. But 
     when the deal went down, their preelection strategy consisted 
     of making Vice President Dan Quayle the GOP point man in the 
     State. And their campaign plan was even worse. After 
     promising the California delegation to the Republican 
     National Convention that Bush would wage an enormous campaign 
     in the State, the Ex-President made exactly one appearance 
     shortly after Labor Day and never came back.

  I can tell you that in the little State of South Carolina, I was in 
the only statewide race with the President. He made four appearances in 
1992 in the little State of South Carolina.
  So do not let us get all boiled up. I rather think that rationale is 
accurate, and I think will help in emphasizing the importance of 
California. And I hope he, and whoever the chairman of the Republican 
Party is, will both emphasize it. That is real politics.
  But he is mistaken with respect to conversion and retraining 
programs. He is either under labor or the Department of Defense. That 
is why it does not allude to this bill at all.
  Look at another bill. Look to the funds that they may have in other 
programs in the Commerce Department like EDA, or look to the energy 
appropriations, or look to the defense retraining, and conversion 
moneys. Look, Mr. President, to the $8.8 billion that all of us 
Senators voted for disaster relief as a result of the earthquake.
  You can bet your boots there is going to be in 1996, out of that $8.8 
billion, $1 billion going perhaps into the State of California. That is 
a given.
  But that is not going to happen with this well-conceived, bipartisan 
program. At best, all we could do was take the $70 million that is in 1 
year, and $100 million in the other year, and put all of the 
development centers in the State of California. But under peer review 
that is not going to happen. In any case, California already has one. I 
doubt if they get any more under the particular merit selection basis. 
It is competitive. It will have to go through none other than Arati 
Prabhakar, who is the President Reagan appointee and President Bush 
appointee for these programs, and Mary Lowe Good who is also President 
Reagan's appointee as Chairman of the Board of Directors of the Science 
Board under the National Science Foundation. You cannot get two more 
people of higher integrity, and with the admonitions and restrictions 
of law, better peer review, and not political.
  Mr. DOLE. Mr. President, it is a fact that we are overregulated and 
the American consumer pays the price for it. The costs of this 
overregulation are really a hidden tax on the consumer that does not 
appear on paystubs but that is just as real and just as relentless as 
more-visible taxes.
  This substitute measure contains numerous proposals from both sides 
of the aisle, each of which aims to reduce the regulatory burden on 
American consumers, without endangering their health or their safety. 
The measure is a proposed substitute to S. 4, which is incongruously 
called the ``Competitiveness Act.'' Simply declaring something 
``procompetitive'' does not make it so.
  Mr. President, in the international marketplace, governments do not 
compete, people and companies do. And governments do not make people 
and companies more competitive in the global marketplace by further 
intervention into the private sector.
  Governments can make individuals and industries more competitive by 
reversing the crushing burden of regulation, and by eliminating the 
``hidden tax'' on consumers that overregulation creates.
  This substitute measure contains many proposals to begin that 
reversal. This is just a start. Preliminary CBO estimates show that the 
bill would save approximately $1 billion over 5 years. Clearly, this is 
just the tip of the iceberg.
  One element of this amendment is a proposal of which I am the primary 
sponsor. It was an honor for me to have been asked by our very 
distinguished former colleague, Steve Symms of Idaho, to introduce this 
measure a little over a year ago. It is called the Private Property 
Rights Act.
  One might reasonably ask why, in a nation in which the rights of 
property owners are supposed to be protected from the Federal 
Government under the fifth amendment to our Constitution, and from 
State Governments by the 14th amendment, would we need a law protecting 
private property? The reason is, unfortunately, those working in 
Government, those who have sworn to uphold our Constitution, are not 
always as vigilant as they need to be.
  There are literally billions of dollars in claims filed against the 
Federal Government by landowners who believe their private property has 
been taken by the Government without just compensation, as is required 
by the Constitution. It is important to note that a taking 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 these partial takings are subject 
to just compensation. Unfortunately, the only check on the enforcement 
of the Constitution has been through the court system, wherein citizens 
can, at vast expenditure of money and time, ensure that Government 
complies with the Constitution.
  Were it not so tragic, it might be amusing--we are forcing our 
citizens to spend their time, their money, to ensure those who are 
sworn to uphold the Constitution--Government employees--actually do so.
  President Ronald Reagan recognized this failure of the system and, on 
March 15, 1988, issued Executive Order 12630 which, in effect, required 
Federal agencies to review regulations before they were issued to 
determine whether takings of private property could occur thereunder. 
The order also established a set of principles based on the age-old law 
of man that private property ownership is sacred and should be 
defended. The order told the agencies not to take private property--in 
whole or in part--unless absolutely necessary.
  The private property rights provision in this substitute measure 
would accomplish two goals: First, the Executive order would become 
law, and second, would require all Federal departments and agencies to 
comply.
  These are simply goals really, we are asking the Government to uphold 
the Constitution--we are asking those who have sworn to uphold our Bill 
of Rights to do so, we are telling the citizens, the taxpayers, the 
landowners that finally we will do our job, and they can rest assured 
they will not spend their time, their money, to ensure we do our job.
  Mr. President, this substitute measure also contains a provision for 
Federal regulatory agencies to address the risk and cost/benefit of 
their regulatory actions. The provision requires Federal regulatory 
agencies to conduct a comprehensive analysis of the specific costs and 
benefits of a proposed regulation. It then asks the agencies to publish 
analyses or detailed summaries of such analyses in the Federal 
Register. Specifically, it asks the agencies to outline the jobs gained 
or lost; the costs incurred by Federal, State and local governments and 
other public and private entities; and any human health or 
environmental risks created by the regulations proposed.
  Mr. President, the substitute measure will be a start on the road 
toward real regulatory reform. In contrast, S. 4 will send us hurtling 
down the road of industrial policy. This is not a road that most 
Americans want us to take. I urge my colleagues to take the side of the 
American consumer and support this measure.
  Mr. BURNS. Mr. President, I want to announce my intent to vote 
against the amendment offered by Senator Simpson to the pending bill, 
S. 4, the National Competitiveness Act. Included in the Senator from 
Wyoming's amendment are a number of provisions I support. But even if 
this amendment passed all it would do is kill the bill now before the 
Senate.
  The National Competitiveness Act is legislation I have cosponsored 
since it was introduced on the first day of this Congress, January 21, 
1993. This bill is one of the top five priorities for Senate Democrats 
and I am the only Republican cosponsor. My support for this measure has 
not been overlooked by my colleagues on this side of the aisle.
  I worked closely with the distinguished chairman of the Senate 
Commerce, Science and Transportation Committee, Senator Hollings, to 
improve this bill as it moved through the committee. Senator Hollings 
indicated a willingness to work with all the members of the Commerce 
Committee both Democrats and Republicans on this bill. In fact, there 
were no Republicans on the Senate Commerce Committee who opposed the 
bill when it passed the committee.
  When I was sent to the Senate by the voters of Montana they knew my 
party affiliation but expected me to do what was in our State's and 
Nation's best interest. With this vote, that is what I am doing.
  I think it is vital for our Nation to be the world's leader in 
advanced technologies such as information, computers, electronics, and 
new materials. This bill helps us accomplish that goal. It contains 
provisions for research and development companies, universities and 
tribal colleges in my State.
  For these reasons and many more I will elaborate on in later debate, 
I want the National Competitiveness Act to pass the Senate. While I 
support a number of the provisions in the Simpson amendment because it 
is a substitute for the existing language in S. 4 designed to eliminate 
the thrust of S. 4, instead of improving the bill I plan to vote 
against the pending amendment. If the Simpson amendment was offered as 
an addition to the bill rather than a substitute, I would then support 
it.
  I yield the floor.
  Mr. HEFLIN. Mr. President, I rise to express my exasperation with the 
pending substitute amendment. The last version I have seen of it is a 
conglomeration of about 12 separate legislative proposals. Many of them 
I support. Some of them I am actively working to pass. Yet, without any 
notice from Members on the other side of the aisle, these proposals 
have been included in this substitute amendment, along with a host of 
other, unrelated provisions which I and other Members may or may not 
support. The upshot of this is that the sponsors of this substitute 
amendment are forcing Members to vote against proposals which they 
support and on which they have been working.
  For example, I, along with other of my colleagues, have been working 
to pass the Private Property Rights Act. In fact, staff are scheduled 
to meet tomorrow about this legislation. Yet, without any notice or 
warning, I find that this proposal, one which I support and am working 
on, has been incorporated into a controversial, killer amendment to S. 
4.
  Likewise, for some time now, I have been working with the chamber of 
commerce on a regulatory flexibility proposal, one which I support, to 
give small business judicial review of adverse decisions concerning the 
impact of Federal regulations. Yet, this amendment and many others, 
which enjoy bipartisan support, are being used here in the most 
partisan of manners.
  These are just two examples. There are others. Other proposals which 
I support individually but have been tossed into this substitute 
amendment. By incorporating them all in one amendment, the substitute's 
sponsors know they are forcing Members, especially Members on this side 
of the aisle, to vote against proposals which they strongly support. 
Rather than working for a vote on these amendments on their own merit, 
the proposals have been lumped together to serve a political purpose, 
not to provide any relief or benefit for our constituents. I for one 
believe that the individual's proposals which make up this substitute 
are too important to be used as a political hand grenade to be thrown 
at the underlying bill and I urge the sponsors of this substitute 
amendment to withdraw it from consideration immediately.
  Mr. LIEBERMAN. Mr. President, I very much oppose this amendment. 
Let's not lose sight of what is going on here. This is a substitute for 
S. 4. If adopted, this amendment would replace S. 4. Let's be clear 
about that. If we adopt this amendment, we will not simply have added 
provisions that might be appropriate in another time or another place. 
We will have replaced the text of S. 4--a bill that is critically 
important to our future competitiveness, a bill that will keep our 
manufacturers on the leading edge of technology and, perhaps most 
importantly, a bill that will help generate the technology that will 
create the high-skill, high-wage jobs of the future.
  So, you may like the idea the idea of reforming Davis-Bacon. You may 
like the idea of providing small businesses with judicial review of 
adverse decisions concerning the impact of regulations. You may like 
the idea of requiring cost benefit analysis of all regulations. In 
fact, I like some of the things in the Simpson substitute. But I don't 
like the idea of killing S. 4.
  In another place, in another time, I would certainly consider the 
merits of this proposal by my friend and colleague from Wyoming. But 
that is beside the main point.
  As I look through this proposal there is at least one section which I 
have trouble with--the Private Property Rights Act. Private property 
rights are, of course, an important foundation of our economic system.
  But one of the hallmarks of our system of government is that all 
rights are balanced and none are absolute. Even the freedom to speak, 
which is the cornerstone of democracy, has its limits. I respectfully 
suggest that this substitute takes the tried and true and much revered, 
much appreciated, much valued, much protected, right of private 
property in this country and would use that right as a theory to 
obliterate a host of other rights we have such as the right to due 
process, to be safe, healthy and free, and to be protected by a 
government of laws that we must depend on because we cannot always 
protect ourselves.
  Mr. President, this proposal overreaches by far. It prohibits any 
rulemaking from becoming effective until the promulgating agency has 
been certified by the Attorney General as complying with Executive 
Order 12630 or similar procedures. Believe it or not, Mr. President, 
this amendment actually prohibits deregulatory rulemakings from going 
into effect. This amendment prohibits rules from being repealed.

  It is important to understand the tremendous breadth of the 
regulatory freeze that would be imposed by this proposal. It prohibits 
regulations from becoming effective even where the benefits clearly 
outweigh the costs. It would even prohibit emergency regulations, such 
as might be imposed if we found ourselves suddenly at war.
  This proposal purports to codify by reference an Executive order 
which is a very significant change in the way this proposal was made 
from last year, because it means that no changes can ever be made to 
the Executive order except by statute. We must really devote careful 
study to the provisions of that Executive order before we codify it and 
prevent the President from ever changing it.
  Furthermore, even if this proposal only applied to rulemakings that 
increase regulatory burden, it raises very serious questions. Under 
this proposal, the remedy for an agency's failure to achieve Department 
of Justice certification of its regulatory procedures is holding up the 
implementation of the final rule. By the terms of this proposal, a 
party challenging a regulatory action would not need to show that an 
actual taking had occurred, or that takings concerns were even 
implicated by the rulemaking. All it would have to show is that the 
Department of Justice had not certified that the agency was in 
compliance with the codified Executive order. The remedy goes way 
beyond what is necessary to address the perceived harm.
  Mr. President, even where a taking may arguably have occurred, I am 
not convinced that this proposal is necessary. The Constitution 
establishes a very fair principle in the fifth amendment that when the 
Government takes private property there ought to be just compensation. 
Private parties who believe they have had their property taken can seek 
restitution in the U.S. Claims Court.
  Moreover, there is a clear line of decisions that establishes what 
private property is. There are some court decisions that have begun to 
raise the question of whether some of the kinds of actions by 
regulatory bodies sometimes affect private property rights, but the job 
of developing that peripheral body of case law is much more 
appropriately left to the courts. The courts have been addressing these 
issues for over 200 years. And the fact that some of these courts have 
found that some Government regulations may result in a taking shows 
that the court system is working.
  Mr. President, the proponents of this proposal have simply not made 
the case for this aggressive legislative intervention that I think 
would effectively and dramatically limit our Government's capacity to 
protect us, protect our environment, protect our health, protect our 
safety. It is important to remember what is at stake here. For example, 
should the President's proposals to reform banking regulations to ease 
the credit crunch really be delayed while the banking regulators are 
certified as complying with the Executive order? Do we really mean to 
suspend the government's ability to promulgate rules that save lives 
and protect public health? Do we really want to halt for an 
indeterminate period the Government's ability to issue rules that 
prevent fraud, waste, and abuse in Government programs, or that attempt 
to detect money laundering by drug traffickers?
  My answer to all of those questions is no, and that, as well as my 
support of the underlying language of S. 4, is why I will vote against 
this amendment.


                           amendment no. 1480

  Mr. PRESSLER. Mr. President, yesterday the Senate refused to table an 
amendment I cosponsored with my distinguished colleague, Senator 
Cochran, which delayed the implementation of burdensome EPA 
regulations.
  Regulations have damaged the competitiveness of U.S. businesses. If 
we are serious about passing legislation to improve the competitiveness 
of U.S. industry, the Simpson amendment deserves the consideration of 
my colleagues. Passing the Simpson amendment will do more for Main 
Street American business than any provision of S. 4.
  Most Americans do not make their living in the high technology 
industry or in manufacturing. Manufacturing jobs, as a percentage of 
all nonfarm employment in the United States, have remained relatively 
flat for the past 33 years. Most of the jobs created in the United 
States have not been in the manufacturing sector. Does this mean we are 
not competitive in manufacturing? Not necessarily.
  A recent McKinsey & Co. study, ``Manufacturing Productivity,'' found 
that the United States still holds a worldwide edge in manufacturing in 
certain sectors. I would like to ask consent to submit for the record a 
New York Times article about the McKinsey report.
  There being no objection, the article was ordered to be printed in 
the Record as follows:

                [From the New York Times, Oct. 22, 1993]

                     Why U.S. Is Indeed Productive

                           (By Sylvia Nasar)

       Contrary to a widely held view that the United States is an 
     industrial has-been whose productivity in manufacturing has 
     been surpassed in some other countries, a new study concludes 
     that for manufacturing as a whole, the United States still 
     holds a significant edge over the presumed world standard-
     setters, Germany and Japan.
       The yearlong study--by the consulting firm McKinsey & 
     Company, together with three of the nation's top experts on 
     productivity including Robert M. Solow, a Nobel laureate in 
     economics--combined research into nine industries with a wide 
     array of available statistics. While other studies have also 
     found that the United States was still the world's 
     productivity leader in manufacturing, the new study provides 
     a more detailed look at individual industries.
       Productivity, or output per hour worked, is the ultimate 
     yardstick of an economy's competitiveness. It determines a 
     nation's material standard of living as well as its standing 
     among nations.


                       explaining the disparities

       Perhaps the most provocative findings concern the probable 
     causes of the productivity differences that do exist. It 
     concludes that in industries where the United States has 
     fallen behind, the reasons have more to do with how goods are 
     produced than with the skills of workers or the quality of 
     technology.
       ``If the United States is lagging behind Japan in certain 
     manufacturing industries, it doesn't appear to be because of 
     the failure of our schools or technology,'' said Martin 
     Baily, a University of Maryland professor, who helped direct 
     the study. ``We haven't put enough effort into organizing the 
     workplace and designing products so that they are easy to 
     manufacture.''
       Others versed in the field welcomed the McKinsey effort. 
     ``A couple of economists in some dingy room can cook up 
     anything,'' said John A. Young, former chief executive of the 
     Hewlett-Packard Company and chairman of President Ronald 
     Reagan's Commission on Industrial Competitiveness. ``This 
     draws on McKinsey's incredible network of people in the field 
     who can do a little sanity check on the numbers.''
       The study, a sequel to a McKinsey report last year that 
     found that American service industries had a large 
     productivity lead over the German and Japanese industries, 
     challenges the view of some influential economists--from 
     Lester Thurow of M.I.T., author of ``Head to Head: The Coming 
     Economic Battle Among Japan, Europe and America,'' to Laura 
     D'Andrea Tyson, chief of the Council of Economic Advisers--
     who have argued that American manufacturing has been 
     overtaken by German and Japanese industries.
       ``There's a lot of conventional wisdom swirling around here 
     that's turning out, by and large, just to be wrong.'' said 
     Bill Lewis, director of the McKinsey Global Institute in 
     Washington, and a former Assistant Secretary of Energy in the 
     Carter Administration.
       The study also suggests that losing leadership in a 
     particular set of industries--cars, steel, consumer 
     electronics--does not preclude first-rate economic 
     performance or, for that matter, high living standards any 
     more than a student with A-'s and B+'s would necessarily be 
     less able than one who has a mixture of A+'s and D's.
       ``In the heads of a lot of people, there's a consumer-
     electronics theory of economic welfare,'' said Francis Bator, 
     a Harvard University economist, who advised the research 
     team. ``It's nonsense.''
       The advice the report proffers runs counter to the 
     conventional wisdom, and boils down to doing what the United 
     States--as opposed to Europe and Japan--has already been 
     doing: Where you lag, open your borders--not just to imports, 
     but to transplants; where you lead, set up shop in the 
     countries of the laggards.
       ``You can make theoretical arguments about managed trade,'' 
     Mr. Lewis said, ``but the evidence that we found, for the 
     first time, is that the more open you are, the more 
     productive you become. On the U.S. side, the proof is the 
     renaissance of the U.S. auto industry.''
       McKinsey's comparisons of individual industries show that 
     the United States is by no means the most efficient producer 
     of all products: Japanese output an hour is 15 percent to 
     almost 50 percent higher in cars, car parts, machine tools, 
     consumer electronics and steel.
       Germany's productivity, which is half to three-fourths this 
     country's in half a dozen industries from cars to beer, is 
     equal to the United States' in steel and machine tools.
       But these industrial powerhouses trail so far behind in 
     some other industries--packaged food in Japan, beer and cars 
     in Germany--that, measured in dollars of comparable 
     purchasing power, the average Japanese or German factory 
     worker produces $8 worth of goods in the time it takes an 
     American worker to make $10 worth. The comparisons are based 
     on case studies of nine industries that account for about a 
     fifth of United States manufacturing.
       In Japan, for example, a worker in the highly protected and 
     fragmented food-processing industry--which employs more 
     workers than the auto, computer, consumer-electronics and 
     machine-tool industries combined--produces $39 worth of food 
     in an hour, compared with an American counterpart's $119.
       ``What makes the Japan-U.S. comparison for manufacturing as 
     a whole so much in the U.S. favor is that food production is 
     such a large business in Japan and is so primitive,'' 
     Professor Bator said.
       The study suggests that a lack of leading-edge technology 
     is less important than some suggest. Brewers in Germany, for 
     example, are far less productive than Japanese or American 
     beer makers. But the reason is hardly that the Germans lack 
     the technology. The more efficient American and Japanese 
     brewers use machinery imported from Germany.


                       quality beyond technology

       Nor is lesser technology necessarily the difference in 
     cars. General Motors, for instance, poured billions into 
     robots and other glitzy technology, while Toyota and other 
     Japanese manufacturers placed less emphasis on a high-tech 
     approach and concentrated on how they trained, organized and 
     motivated workers.
       McKinsey's prescription for raising productivity--to expose 
     manufacturers to head-to-head competition with Japan, Germany 
     or whoever is No. 1 in an industry--raises hackles among 
     American advocates of industrial policy.
       The Europeans, said Stephen S. Cohen, co-director of the 
     Berkeley Roundtable on the International Economy, ``would be 
     foolish to resist pressures to insulate themselves.''
       ``They don't need more pressure,'' he added. ``They don't 
     have to take the same bloodletting.''
       But Professor Baily has a different perception. ``We keep 
     hearing policy makers say `We've got to protect,' as if 
     Americans got no benefit from going through all this pain and 
     agony,'' he remarked. ``Our industries today are in much 
     better shape. Our view is that the evidence--particularly 
     from Germany, which hasn't allowed that kind of competition--
     suggests that you should let the winners and losers emerge.''
       Copies of the report can be obtained from the McKinsey 
     Global Institute in Washington by calling (202) 662-3141.

  Mr. PRESSLER. High-technology jobs are high-wage jobs. I have seen 
the benefit of the creation of high-technology jobs in my State, but 
these jobs are still a small percentage of all the jobs created in 
South Dakota. Despite its small size, I doubt South Dakota is any 
different from other States in terms of jobs creation.
  I have heard my colleagues state that S. 4 will create jobs. What I 
have not heard discussed is how many jobs will be created. The high-
technology sector is promising, and has created well-paying jobs. 
Whether spending $2.8 billion over 2 years will generate a significant 
number of high-technology or manufacturing jobs is still, in my mind, a 
big question mark. Almost $3 billion may not impact significantly the 
trend of manufacturing jobs as a percentage of non-farms jobs since 
1961.
  By focusing on so-called critical technologies, we are rewarding 
specific sectors of our economy with Government incentives. The 
McKinsey study indicated that the United States has a worldwide edge in 
the food processing industry--not an industry identified as being a 
critical technology. It is, however, an industry of interest and 
importance to agricultural States. What do we do to assist industries 
that are not in manufacturing or high technology or identified as 
``critical''?
  The wisest course we could take to assist these businesses, indeed, 
all U.S. businesses, is to implement regulatory reform, lift burdensome 
paperwork reductions and Government mandates on wages that must be paid 
for work on Government contracts.
  I urge my colleagues to look upon the Simpson amendment as a logical 
extension of the Cochran amendment of yesterday. It is a concerted 
effort to lift onerous regulations from U.S. businesses, large and 
small, whether they are service industries or high-technology 
enterprises. Let us not just reward certain segments of the economy. 
Let us work for the benefit of all U.S. businesses.
  Mr. CRAIG. Mr. President, I commend the Assistant Republican leader 
for offering this substitute to S. 4. Senator Simpson's substitute is 
the real National Competitiveness Act. The underlying bill, S. 4, is 
really the Picking Favorites and Industrial Policy Act.
  Business enterprises in America want to compete, innovate, and create 
jobs. The biggest threat to their competitiveness, and therefore, 
America's competitiveness, is that the Federal Government will hobble 
them before they even make it into the world marketplace.


                         kempthorne osha reform

  There are many excellent provisions in the Simpson substitute. I 
note, particularly, language that originated with my Idaho colleague, 
Senator Kempthorne, providing exemptions from strict enforcement of the 
letter of the law when blind enforcement would punish heroic acts. 
That's pure common sense, but OSHA tried to fine an Idaho contractor 
when workers rushed to save the life of a coworker buried in a 
collapsing trench and ignored some OSHA technical requirements in the 
process.
  That's what the Simpson substitute is all about: A commonsense 
understanding of how Government excess can stifle competitiveness and 
destroy jobs.


                       davis-bacon reforms; intro

  I want to speak in particular to the reforms that the substitute 
would make to the outdated Davis-Bacon Act of 1931.
  I am the sponsor of S. 916, which would make comprehensive changes in 
Davis-Bacon, and I have cosponsored Senator Brown's S. 1228, which 
would go all the way and repeal the act. I will continue to pursue 
those more substantial changes, but I welcome the incremental 
improvements that the Davis-Bacon changes in the Simpson substitute 
would bring.
  I want to emphasize the compromise nature of the Davis-Bacon 
provisions in the Simpson substitute. These are the very modest reforms 
recommended by Vice President Gore's National Performance Review. This 
is about as bipartisan as you can get.
  These provisions would raise the threshold below which contracts are 
exempt from Davis-Bacon from $2,000 to $100,000 and scale back a lot of 
unnecessary and useless paperwork that employers are required to file 
every week.


                   raising the threshold to $100,000

  Setting this threshold for Davis-Bacon is consistent with other NPR 
recommendations that $100,000 should be a set as a uniform contract 
threshold for government acquisition of goods and services. The current 
$2,000 threshold was set in 1935 and is so low that, as a practical 
matter, all construction, alteration, and repair contracts are covered 
by Davis-Bacon.
  The $100,000 threshold would exempt only 3.5 percent of the contract 
dollar volume of current Davis-Bacon contracts--in other words, only 
3.5 percent of the actual construction alteration, and repair work 
being performed. But because a small amount of this work is covered by 
a very large number of very small contracts, almost 75 percent of the 
number of contracts would be exempted.
  Today, the Department of Labor is forced by Davis-Bacon to spend a 
disproportionate amount of its resources issuing prevailing wage 
determinations and collecting paperwork for hundreds of thousands of 
these tiny contracts. They are stepping over boulders to pick up 
pebbles. By Federal standards, a $100,000 construction contract is a 
tiny contract.
  Lifting this burden of micromanagement with a $100,000 threshold 
would free up resources to improve the quality of DOL's work on the 
remaining 96.5 percent of construction contracts.
  Many small and minority contractors would like to bid on Federal 
contracts for small jobs but are discouraged from doing so because of 
the rigid and archaic work rules, the arbitrary and artificial wage 
rates, and overwhelming paperwork requirements that come with Davis-
Bacon.
  To at least a modest extent, therefore, this reform would allow many 
small and minority contractors to compete for the first time in the 
Federal arena. Senators talk a good game about promoting small and 
minority businesses. This substitute actually does something to treat 
them more fairly.


                    davis-bacon paperwork reduction

  The other Davis-Bacon reform that Senator Simpson adopts from NPR is 
paperwork reduction. Today, the Copeland Act of 1934 requires 
contractors on Davis-Bacon projects to submit copies entire payroll 
records to the government on a weekly basis. It's estimated that this 
produces 11 million reports a year, requiring 5.5 million hours of 
industry expense, and accounting for 5.5 percent of DOL's total 
paperwork.
  Officials have testified in the past that, coming in a tidal wave as 
it does, all of this paperwork is useless and enforcement of Davis-
Bacon generally depends on the filing of actual complaints.
  The Simpson/NPR reform would require that every contractor certify 
compliance with Davis-Bacon on a monthly basis. This would still keep 
employers on notice as to their responsibilities and would deter 
violations.
  Mr. President, the Davis-Bacon Act discriminates against minorities 
and women, prevents public-spirited citizens from volunteering for 
community projects, reduces the amount of housing that can be provided 
for the poor, wastes billions of dollars, and lines the pockets of a 
few big contractors who specialize in milking the Federal procurement 
system.
  We ought to repeal or more substantially reform it. But the Simpson/
NPR provisions in this substitute are at least a step in the right 
direction.


            conclusion on the Simpson substitute, in general

  Back on a more general level, Mr. President; we all agree that 
government at local, State, and Federal levels should exercise its 
authority in appropriate circumstances to protect public and worker 
safety and promote fair dealing. But these responsibilities involve 
restraining excesses, promoting honesty, and penalizing negligent or 
dangerous acts.
  That's a far cry from government trying to substitute its supposed 
wisdom for the judgment of the men and women actually trying to provide 
goods and services.
  A funny thing happens when government gets tangled up in decisions 
that should be left to the marketplace. Political thinkers from John 
Locke to Lady Thatcher have pointed out that political considerations 
replace economic ones, favoritism replaces competition, and privileged 
elites are the principal beneficiaries.
  If we genuinely want to enhance competitiveness, if we want real 
regulatory reform, we will pass the Simpson substitute to S. 4. It's a 
thoughtful and comprehensive plan that includes ideas from both sides 
of the aisle and deserves the Senate's approval.
  Mr. HATFIELD. Mr. President, the Simpson amendment to the pending 
legislation, the National Competitiveness Act, includes important 
reforms to the Davis-Bacon Act of 1931. While I strongly support the 
continuation of the Davis-Bacon law, I do believe changes need to be 
made.
  It is my understanding that legislation has been pending before the 
Labor Committee that would make extensive changes to the Davis-Bacon 
Act for the last two Congresses. In fact, many of the reforms have been 
marked up in subcommittee by the House. Several of the provisions of 
the bill are meritorious and it is my hope that we will be able to 
enact some of these reforms in the near future. By supporting these 
carved out reform provisions now, I believe that it will serve notice 
to the Labor Committee that I am ready to reform the Davis-Bacon Act 
sooner rather than latter.
  I have my own ideas of reform that should take place regarding the 
applicability of the Davis-Bacon Act on volunteers. Volunteers should 
be allowed to work on certain types of community projects in rural 
areas if they choose to do so by their own volition and if they are not 
being supervised by paid contractors or subcontractors. Volunteers 
should not be allowed to work on the construction of nuclear power 
plants or highway projects. However, many rural communities cannot 
afford to improve their communities because of fiscal constraints. 
Without the use volunteers, many rural communities simply cannot afford 
to build new courthouses, schools, libraries, and the like. Clearly, 
projects of this nature benefit the community as a whole.
  Mr. President, although I support the Davis-Bacon Act reforms 
included in the Simpson amendment, I am committed to working with my 
colleagues on the Labor Committee towards comprehensive Davis-Bacon Act 
reforms in the near future.
  Mrs. FEINSTEIN. Mr. President, I would like to speak for a few 
minutes on the bill that is before this body, S. 4, the National 
Competitiveness Act.
  I rise in support of the bill. I believe that this bill is going to 
improve the industrial competitiveness and the economic growth of this 
Nation. The reason it is going to do that is that it is going to 
strengthen civilian technology programs, something that we do not pay 
enough attention to, primarily in the manufacturing sector.
  I am one that happens to believe that manufacturing is 
extraordinarily important to this country. It accounts for 19 percent 
of the gross domestic product, 75 percent of all U.S. exports, and 
approximately 19 million jobs. More importantly, it has traditionally, 
provided the well-paying jobs that have allowed average Americans to 
live the American dream.
  You can get a production line job, you can buy a home, you can 
finance a car, you can educate your kids and, yes, you can even send 
them to college. That is the American dream.
  In California--and since California plays so predominantly in this 
debate, let me make the argument on the basis of merit--our 
manufacturing sector has been severely and adversely affected by 
defense downsizing. Twenty-one percent of our manufacturing employment 
is in aerospace. The aerospace position of the manufacturing sector is 
being devastated. Since 1988, aerospace employment has declined by 42 
percent.
  On the basis of merit alone, the private sector job loss due to the 
defense drawdown between 1991 and 1997 is three times higher in 
California than in any other State in the Union. Of the top 10, 
California is No. 1, followed by New York, Texas, Virginia, 
Massachusetts, Pennsylvania, Ohio, Florida, Connecticut, and New 
Jersey. But the California job loss is three times that of the next 
highest States, Texas and New York.
  So nobody should ascribe politics to this. Take a look at what is 
happening out there. It is three times worse in the State of California 
than in the next worst off State.
  I mentioned this Nation must have a strong manufacturing base.
  I will never forget being at a speech that Akio Morita, the chairman 
of the Sony, made. One of the things he said in his speech was, ``What 
I greatly fear is that America loses its manufacturing base. If it 
loses its manufacturing base, it will cease to be a world power.''
  The United States, in fact, is falling behind other nations in 
adopting advanced manufacturing technologies to increase productivity 
and to improve the quality of goods.
  According to the Department of Commerce, the United States is either 
``losing badly'' or ``losing'' to Japan and Europe in 13 of 24 emerging 
technologies, including superconductors, advanced materials, sensors, 
and biotechnology. The United States is leading Europe in only 3 
technologies and is not leading Japan in any technologies.
  Let me quote from the 1991 Council on Competitiveness report:

       The United States is losing badly in many critical 
     technologies. Unless this Nation acts today to promote the 
     development of generic industrial technology, its 
     technological position will erode further, with the 
     disastrous consequences for American jobs, economic growth, 
     and the national security. The Federal Government should view 
     support of generic industrial technologies as a priority 
     mission.

  That is exactly what this bill does.
  Unfortunately, our Nation has not invested in these technologies as 
much as other countries. While some European countries invest upwards 
of 20 percent of their research and development budget for the 
industrial sector, the United States invests a mere 0.2 percent in 
industrial development. Other nations, 20 percent; we are investing 0.2 
percent only. At the same time, the United States invested over 65 
percent of its R&D budget for defense, compared with 12.5 percent for 
West Germany and less than 5 percent for Japan.
  Clearly, we must do more to help our civilian technologies. The 
United States R&D budget must place a greater emphasis on supporting 
civilian industrial technologies. As the committee report states, ``The 
selective expansion of Federal civilian technologies and manufacturing 
programs can contribute significantly to United States economic 
competitiveness and prosperity.''
  The National Competitiveness Act, this bill, helps to accomplish 
this. It creates a ``21st Century Manufacturing Infrastructure 
Program'' to develop, in partnership with the private sector, new 
technologies to enhance productivity and improve U.S. global 
competitiveness. Also, it helps get these new technologies into the 
private sector quickly and effectively.
  Let us talk about small business for a moment. The future of the 
American business sector is small business, rising dramatically, new 
startups, new ideas, new creativity. Small business is where much of 
the action is.
  This bill helps small business, and I will tell you how. Many small 
businesses, as we have discussed before on this floor, particularly 
when you talk about capital gains and capital formation, do not have 
the resources or the capital to invest in new technologies and upgrade 
existing equipment. According to the National Coalition for Advanced 
Manufacturing, of the 360,000 smaller American manufacturers--those 
with 500 or fewer employees --most have not advanced in the adoptions 
of modern equipment. Only 6 in 10 smaller businesses employ advanced 
technology, compared with 9 out of 10 businesses with more than a 
hundred employees.
  Building on the successes of manufacturing technology centers and the 
State technology extension program created in the Omnibus Trade and 
Competitiveness Act of 1988, this bill will increase authorization for 
advanced technology programs, ATP--the one Federal program whose sole 
purpose is to help private sector civilian companies with the research 
that is necessary to speed the development of promising new 
technologies. ATP is similar to the successful technology reinvestment 
project, known as TRP, which is devised to help defense firms 
transition to the civilian marketplace, and it is also a competitive 
grant program.
  This bill provides, as you know, $2.3 billion over 2 years to expand 
the efforts of commerce to place advanced manufacturing technologies 
into the hands of small- and medium-sized business.
  Please, let us not get into this bill might benefit California, or 
this bill might benefit another State. Do we not want to do this as a 
nation? Do we not want to be strong? Do we not want to see our small 
businesses be able to compete with others? Do we not want to see our 
manufacturing in America be able to compete with Japan and Germany and 
other countries?
  Anybody whose answer is no does not belong in the Senate of the 
United States.
  Of course, we do. It is American to think that way. We want to see 
our businesses upgraded.
  We talk a lot about global competitiveness, the free marketplace. 
What is wrong with talking about a partnership between the U.S. 
Government and the small businesses of this Nation; a partnership 
between America and manufacturing in this Nation? What is wrong with 
it? That is what we ought to be discussing.
  I commend the Senator from South Carolina. This is an important bill. 
I submit to you, it boggles my mind to see how people could be opposed 
to it.
  So I am very happy to support S. 4 and I was very pleased to see that 
it was unanimously reported out of committee with strong bipartisan 
support.
  Please, this is not the stimulus package of a year ago. This is a 
National Competitiveness Act aimed toward the private manufacturing and 
the private small business sector to make us competitive worldwide. Let 
us go ahead with it.
  Thank you, Mr. President.
  I yield the floor.
  Mr. HOLLINGS addressed the Chair.
  The PRESIDING OFFICER. The Senator from South Carolina.
  Mr. HOLLINGS. I thank the distinguished Senator. It is a very 
eloquent statement, and a unique one in that it is on the bill.
  This is the fourth day. We have never had an amendment, really, to 
the bill itself. We have had various political maneuvers to kill the 
bill, namely this one here at hand we will momentarily move to table. 
This, as the distinguished Senator reminded me, when Akio Morita made 
the statement that he was fearful we would lose our manufacturing base, 
that was over 10 years ago. MIT, a special commission on industrial 
productivity, issued a book back 5 years ago, ``Made in America.'' 
Right to the point, they found we ought to be getting just into these 
programs we are talking about of the partnership in technological 
research.
  I am going to skip over some things. Along comes the task force of 
the Republican Party. They state categorically, these distinguished 
Senators in the party itself, that ``The task force endorses the 
National Institute of Standards and Technology as an important effort 
to promote technology transfer to allow defense industries to convert 
to civilian activities. These programs are: First, the Manufacturing 
Technology Program and the Advanced Technology Program.''
  So we know we have their programs and we have them endorsed. I know 
it is all peer reviewed and all on a merit basis. So what has the 
Secretary of Commerce done? He has gone over to the Defense Department 
and got Arati Prabhakar on the one hand, as the Administrator or 
Director of NIST, the National Institutes of Standards and Technology, 
who has been working for over 10 years in the Department for President 
Reagan and for President Bush, administering the programs. Otherwise, 
you have Under Secretary Good, who was President Reagan's appointment. 
She is the Under Secretary for Technology, President Reagan's 
appointee--the Chairman of the Board of Directors of the Science Board 
of the National Science Foundation. Then we come almost in seriatim to 
the programs themselves: 31 States, some 85 of the different programs, 
all listed that we have taken from DARPA, and put over here. That is 
why we have the increases.
  Then we come, of course, to the Critical Technology Subcouncil itself 
that just recently put out a report saying this is exactly what we 
ought to be doing. It is updated now. They said we ought to have, for 
example, just by way of figures, because the moneys have come in--they 
said we ought to have in the Advanced Technology Program, I read: 
``Expanding the Advanced Technology Program in the Department of 
Commerce to an annual program level of $750 million.''
  This is only at the $500 million level 2 years out. We never have 
gotten to that. The overall program is less than $1 billion. In fact, 
all of these things in here, the National Science Foundation, the SBA 
loans, the construction of $100 million in here--all those add up to 
the $1.3 and $1.4 billion, which, incidentally, while I am reminded--
the ranking Member, he voted for $1.5 billion. So this is less than 
what the distinguished chairman voted last June, along with all the 
other Republicans and all Democrats in the report of the bill.
  But this auspicious group here, all the technology leaders in the 
country, said the Advanced Technology Program should reach $750 
million, and it has here, the amount for the entire program should be 
anywhere from $4 to $8 billion. We do not even approximate that.
  So we come to the end, after working through with the Energy 
Committee, with the Small Business Committee, Democrats, Republicans on 
both sides, Labor, Health, Human Resources, Education Committee; the 
White House, Department of Commerce, OMB that cut back the money and 
everything else like that, and really joined unanimously, 2 years ago--
unanimously out of the committee last year. Now we are ready to pass 
it. And in 4 days they have not put up a single amendment that was 
pertinent to the bill or to amend any section of the bill. There have 
been these onslaughts from pesticides to post offices, Whitewater we 
have had around here and everything else but this.
  This particular amendment has just a grab bag of any and every kind 
of regulations: Postal regulations, Davis-Bacon provisions, labor 
provisions, retraining provisions, Post Office provisions again, and 
everything of that kind. Not as an amendment to this bill, but as a 
substitute, to take all of this fine work and a studied measure, all in 
the best of light, really getting this country moving, and to put up 
that grab bag.
  I move to table the Simpson grab bag.
  Mr. President, I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  The PRESIDING OFFICER. If there is no further debate, the question is 
on agreeing to the motion of the Senator from South Carolina.
  The yeas and nays have been ordered. The clerk will call the roll.
  The bill clerk called the roll.
  Mr. FORD. I announce that the Senator from Colorado [Mr. Campbell] 
and the Senator from Connecticut [Mr. Dodd] are necessarily absent.
  The result was announced--yeas 56, nays 42, as follows:

                      [Rollcall Vote No. 52 Leg.]

                                YEAS--56

     Akaka
     Baucus
     Biden
     Bingaman
     Boren
     Boxer
     Bradley
     Breaux
     Bryan
     Bumpers
     Burns
     Byrd
     Conrad
     Daschle
     DeConcini
     Dorgan
     Exon
     Feingold
     Feinstein
     Ford
     Glenn
     Graham
     Harkin
     Heflin
     Hollings
     Inouye
     Jeffords
     Johnston
     Kennedy
     Kerrey
     Kerry
     Kohl
     Lautenberg
     Leahy
     Levin
     Lieberman
     Mathews
     Metzenbaum
     Mikulski
     Mitchell
     Moseley-Braun
     Moynihan
     Murray
     Nunn
     Pell
     Pryor
     Reid
     Riegle
     Robb
     Rockefeller
     Sarbanes
     Sasser
     Shelby
     Simon
     Wellstone
     Wofford

                                NAYS--42

     Bennett
     Bond
     Brown
     Chafee
     Coats
     Cochran
     Cohen
     Coverdell
     Craig
     D'Amato
     Danforth
     Dole
     Domenici
     Durenberger
     Faircloth
     Gorton
     Gramm
     Grassley
     Gregg
     Hatch
     Hatfield
     Helms
     Hutchison
     Kassebaum
     Kempthorne
     Lott
     Lugar
     Mack
     McCain
     McConnell
     Murkowski
     Nickles
     Packwood
     Pressler
     Roth
     Simpson
     Smith
     Specter
     Stevens
     Thurmond
     Wallop
     Warner

                             NOT VOTING--2

     Campbell
     Dodd
       
  So the motion to lay on the table the amendment (No. 1486), as 
modified, was agreed to.
  Mr. HOLLINGS. Mr. President, I move to reconsider the vote.
  Mr. FORD. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. WALLOP addressed the Chair.
  The PRESIDING OFFICER (Mrs. Boxer). The Senator from Wyoming.
  Mr. HOLLINGS. Madam President, if the Senator will yield a minute.
  Mr. WALLOP. I will be happy to yield.
  Mr. HOLLINGS. Madam President, we have had two formative votes 
relative to the so-called strategy, and I know this is not a partisan 
bill because I have worked it for 3 years. It is a bipartisan measure. 
So I hope that will satisfy the nicities of that particular thought. 
Now we can go on to anywhere, we have heard, from four to six remaining 
amendments. I do not know how long they will take. I think the two or 
three I have heard of will not take long, but there might be three 
others that might require extended debate. But it is the intent, with 
the majority leader's permission, to go right on at least a little bit 
later tonight to get several more votes.
  So we are ready to go, and I thank the distinguished Senator for 
yielding.
  Mr. WALLOP addressed the Chair.
  The PRESIDING OFFICER. The Senator from Wyoming.


                           Amendment No. 1487

 (Purpose: To amend chapter 6 of title 5, United States Code, relating 
                  to regulatory flexibility analysis)

  Mr. WALLOP. Madam President, I send an amendment to the desk on 
behalf of myself, Mr. Coats, Mr. Mack, and Mr. Simpson, and ask that it 
be stated.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Wyoming [Mr. Wallop], for himself, Mr. 
     Coats, Mr. Mack, and Mr. Simpson, proposes an amendment 
     numbered 1487.
  Mr. WALLOP. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       At the appropriate place, insert the following:
     definitions
       Section 1. Section 601 of title 5, United States Code is 
     amended--
       (1) in paragraph (2) by inserting ``any rule of the 
     Internal Revenue Service'' before ``or any other law, 
     including'';
       (2) in paragraph (5) by striking out ``and'' at the end 
     thereof;
       (3) in paragraph (6) by striking out the period and 
     inserting in lieu thereof a semicolon and ``and''; and
       (4) by adding at the end thereof the following new 
     paragraph:
       ``(7) the term `impact' means effects of a proposed or 
     final rule which an agency can anticipate at the time of 
     publication, and includes those effects which are directly 
     and indirectly imposed by the proposed or final rule and are 
     beneficial and negative.''.


                initial regulatory flexibility analysis

       Sec. 2. Section 603 of title 5, United States Code, is 
     amended--
       (1) in subsection (a)--
       (A) in the first sentence by inserting ``as defined under 
     section 601(2)'' after ``any proposed rule''; and
       (B) in the second sentence by striking out ``the impact'' 
     and inserting in lieu thereof ``both the direct and indirect 
     impacts'';
       (2) in subsection (b)(3) by striking out ``apply'' and 
     inserting in lieu thereof ``directly apply and an estimate of 
     the number of small entities to which the rule will 
     indirectly apply''; and
       (3) in subsection (c) in the first sentence by inserting 
     before the period ``either directly or indirectly effected''.


                 final regulatory flexibility analysis

       Sec. 3. Section 604(a) of title 5, United States Code, is 
     amended in the first sentence by striking out ``under section 
     553 of this title, after being required by that section or 
     any other law to publish a general notice of proposed 
     rulemaking'' and inserting in lieu thereof ``as defined under 
     section 610(2)''.


                            judicial review

       Sec. 4. Section 611(b) of title 5, United States Code, is 
     repealed.

  Mr. WALLOP. Madam President, as the Senate considers the National 
Competitiveness Act, many Americans find it ironic that the biggest 
hurdle to U.S. competitiveness is oftentimes their own Government. The 
rules to regulate every aspect of business activity--how it interacts 
with workers, other businesses, customers, the public, and the 
environment have become so pervasive and the burdens so onerous as to 
hinder all ability to compete.
  Regulations are estimated to cost Americans between $880 billion and 
$1.6 trillion per year. This sounds like the kind of deficits we run up 
in decades, but Madam President, this is the per year cost to American 
business.
  There are nearly 125,000 Federal employees who do nothing but issue 
and inforce regulations. In 1993, last year, the Federal Register 
published 69,688 pages of proposed and final regulations which 
businesses are expected to know and to comment upon.
  How can we expect American business men and women to compete when 
they have to spend so much of their time, so much of their effort, and 
so much of their creativity just trying to meet the demands of their 
government. The burden is especially difficult for small business, and 
even small rural communities, to shoulder. Even relatively inexpensive 
regulations can pose insurmountable obstacles to small businesses.
  One mechanism in place to help shield small entities is the 
Regulatory Flexibility Act of 1980. It requires agencies to consider 
the impacts of their rules on small businesses and when possible, 
modify those rules to mitigate any undue burdens.
  Madam President, unfortunately, the agencies have found innumerable 
ways to avoid complying with this act, so that, despite its intentions 
it is no longer effective.
  For instance, under current law no regulatory impact analysis is 
required for rules classified as interpretative--following 
congressional intent. Unfortunately, some agencies improperly classify 
rules as interpretative and thus avoid having to perform any analysis 
of its impact.
  This amendment closes the loophole by including interpretative rules 
within the coverage of the act.
  Second, the original Regulatory Flexibility Act does not take into 
account the fact that regulations which are imposed on small entities 
have an indirect impact on the customers and/or clients of those 
entities. This amendment would ensure that these are properly 
considered.
  Most importantly, currently the Reg Flex Act has no teeth. Whatever 
its intentions, it cannot be made to be enforced.
  Let me briefly outline how the process is supposed to work. If a 
proposed rule impacts small entities--small businesses, small nonprofit 
organizations, and rural municipalities--then agencies have two 
options; perform a regulatory flexibility analysis or issue a 
certification.
  If a rule significantly impacts a number of small entities then the 
agency must perform a regulatory flexibility analysis. Most 
importantly, the agency must review alternatives which might mitigate 
the adverse economic impact of the rule.
  If, on the other hand, the agency decides that a rule will not have a 
significant economic impact upon a substantial number of small 
entities, it issues a certification of that fact, along with the reason 
for the finding.
  The Reg Flex Act has no teeth because agency decisions cannot be 
challenged.
  Madam President, this Congress spoke loudly and clearly when it 
passed the Flex Act. It intended for agencies to pay heed to the 
effects of their regulations on small business. But these are made 
essentially unreviewable by any court. So while a court can look at a 
regulatory flexibility analysis to determine whether a rule is 
rational, no court has ever deemed the rule invalid based on a 
defective regulatory analysis. Thus, agencies can prepare an inadequate 
impact analyses with impunity and they can certify that a rule has no 
significant impact without any meaningful challenge.
  Absent judicial review, the Regulatory Flexibility Act simply does 
not work as intended. It will not, and cannot shield small entities 
from the crushing weight of burdensome regulations unless we give them 
the opportunity to have a court review agency actions.
  To my knowledge, the only opposition to allowing judicial review is 
from the Federal agencies themselves. They fear a flood of lawsuits to 
slow them down. Madam President, I do not believe that is a bad thing, 
but, history says those fears are unfounded. The fact of the matter is, 
that small businesses simply cannot afford to challenge any but the 
most egregious rulemaking. And I would also note that although 24 
States allow judicial review of their State rulemaking process, less 
than 10 lawsuits have ever been filed.
  Madam President, this is not a partisan issue. This is a provision 
which has widespread support on both sides of the aisle.
  Let me read from Vice President Gore's National Performance Review. 
The first recommendation of the Small Business Administration is to:

       Allow Judicial Review of the Regulatory Flexibility Act--
     allow access to the courts when federal agencies develop 
     rules that fail to properly examine alternatives that will 
     lessen the burden on small businesses.

  So the administration is in favor of it. The Vice President has made 
it part of his National Performance Review. The Acting Chief Counsel 
for Advocacy, the office charged with giving small business a voice in 
Government, recently discussed the importance of judicial review of Reg 
Flex decisions. Doris Freedman said:

       Absent some procedure to force agency compliance with the 
     RFA (Reg Flex Act), such as improved opportunity for judicial 
     review of agency determinations under the Act, some agencies 
     will continue to evade the spirit of the RFA through 
     mechanical and boilerplate application of the certification 
     process. Such evasion is antithetical to good government and 
     mocks the reform recommendations instituted by President 
     Clinton and other recommendations made by the NPR (Nation 
     Performance Review). After considering other alternatives, I 
     must agree with the NPR--the threat of litigation, judicial 
     review, and potential remand of regulations is the only way 
     to obtain full agency compliance with the analytical 
     requirements of the Act.

  Virtually every small business trade association supports 
strengthening the Reg Flex Act. The National Association for the Self-
Employed, representing 320,000 members 85 percent of whom employ five 
people or fewer, strongly support my amendment. The most recent White 
House Conference on Small Business, held in 1986, endorse strengthening 
it.
  I urge my colleagues to join me in doing something to improve 
national competitiveness. By mitigating the impact of excessive 
regulation, the competitiveness of America's small business can be 
determined in the marketplace, not the office of a Federal bureaucrat.
  Madam President, I ask unanimous consent that the paragraph from the 
Vice President's National Performance Review recommendation, Small 
Business Administration No. 1, be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record as follows:

     Vice President Gore's National Performance Review Recommends:


                     small business administration

       SBA01: Allow Judicial Review of the Regulatory Flexibility 
     Act--Allow access to the courts when federal agencies develop 
     rules that fail to properly examine alternatives that will 
     lessen the burden on small businesses.

  Mr. WALLOP. Madam President, I also ask unanimous consent that a 
letter to me from the Chamber of Commerce of the United States dated 
today endorsing this be printed in the Record. I will read the first 
paragraph.

       The U.S. Chamber of Commerce, representing 215,000 
     businesses, 3,000 state and local chambers of commerce, 1,200 
     trade and professional associations, and 69 American Chambers 
     of Commerce abroad, strongly supports the regulatory 
     flexibility act amendments, which are expected to be offered 
     as an amendment to S. 4 by Senator Wallop. Accordingly, we 
     urge you to vote for adoption of these amendments.

  The letter goes on to say that the Chamber will include this vote in 
its annual ``how they voted'' ratings, and it is signed by William T. 
Archey, a senior vice president for policy at Congressional Affairs.
  I ask unanimous consent that the entire letter be printed in the 
Record.
  There being no objection, the letter was ordered to be printed in the 
Record as follows:

                                        Chamber of Commerce of the


                                     United States of America,

                                   Washington, DC, March 10, 1994.
     Hon. Malcolm Wallop,
     U.S. Senate, Senate Russell Office Building, Washington, DC.
       Dear Senator Wallop: The U.S. Chamber of Commerce, 
     representing 215,000 businesses, 3,000 state and local 
     chambers of commerce, 1,200 trade and professional 
     associations, and 69 American Chambers of Commerce abroad, 
     strongly supports the regulatory flexibility act amendments, 
     which are expected to be offered as an amendment to S. 4 by 
     Senator Wallop. Accordingly, we urge you to vote for adoption 
     of these amendments.
       The Regulatory Flexibility Act of 1980 (RFA) was designed 
     to provide the small business community respite from the 
     ever-growing hindrance of excessive regulation by requiring 
     federal agencies to consider the impact of proposed 
     regulations on small entities. Its intent was to ensure that 
     the least burdensome approach for regulatory implementation 
     was adopted. Unfortunately, the law has some fundamental 
     flaws, the most important being that the agencies do not have 
     to answer to any compelling authority for noncompliance. The 
     RFA specifically excluded the courts as reviewers. In turn, 
     this has led to bureaucratic abuses of the RFA. Senator 
     Wallop's amendment would authorize judicial review of agency 
     compliance with the RFA--the crucial ingredient necessary to 
     make the RFA work as originally intended.
       The RFA was never intended to relieve small business of its 
     responsibilities, but rather to ensure ease of compliance. 
     Small businesses have too often borne the brunt of the 
     cumulative impact of federal mandates. Given their importance 
     to our struggling economy, we need to ensure not just their 
     survival but their growth as well. Senator Wallop's amendment 
     is in that spirit and merits your support.
       The Chamber will include this vote in its annual ``How They 
     Voted'' vote ratings.
           Sincerely,
                                                William T. Archey.

  Mr. WALLOP. Madam President, it is my hope that the Senate will see 
fit to adopt this amendment. It has been bipartisan and has been the 
subject of Small Business Committee hearings. The Senator from Arkansas 
[Mr. Bumpers], has been in favor of it. I do not see him here. The fact 
of it is that the agencies of the Government of the United States are 
simply not complying with the spirit of the law. Elsewise, we would not 
need judicial review. This amendment simply provides a means by which 
some in small business--and many of them do not have the wherewithal to 
challenge Government--will, from time to time, be able to take on the 
most egregious regulations and ask that they be reviewed as Congress 
intended.
  I urge adoption of my amendment.
  I yield the floor.
  Mr. GLENN addressed the Chair.
  The PRESIDING OFFICER. The Senator from Ohio is recognized.
  Mr. GLENN. Madam President, I regret that I must oppose the amendment 
offered by my colleague from Wyoming, Senator Wallop. I very strongly 
support the goals of the Regulatory Flexibility Act, and I realize, as 
hearings by the Committee on Governmental Affairs have shown, that 
Federal agencies have done a poor job. They have indeed done a poor job 
of meeting the Reg Flex Act and requirements for regulatory flexibility 
for small business and for small governments, also.
  I agree with Senator Wallop that the act has not lived up to its 
promise, and its regulatory flexibility requirements do need to be 
strengthened. I, too, have introduced legislation to accomplish that 
objective. But I feel that, right now, in the middle of this S. 4 is 
not the time to consider this particular amendment.
  The Committee on Governmental Affairs, of which I am chairman, will 
soon have a second hearing on unfunded Federal mandates on State and 
local governments. We plan a further hearing on the regulatory burdens 
on business and the current state of Federal regulatory management. 
These hearings, I think, will be a very appropriate forum in which to 
consider all the different aspects of proposals to reduce regulatory 
burdens on small business and small governments.
  There are a couple of specific concerns with this particular 
amendment that I wanted to point out. First, the proposed amendment 
would require agencies to analyze indirect economic effects on small 
entities, as well as the direct effects. I agree that agencies should 
consider such indirect economic effects in the regulatory process. But 
the amendment would, as I understand it, require regulatory flexibility 
analysis on all regulations that have either a direct or indirect 
effect on small business or small governments.
  If I read this correctly, this provision would require an analysis 
for every single regulation put forward by the Federal Government. I do 
not want to get us into another situation of paralysis-by-analysis. If 
we are saying, well, it would not require that on most of them, well, 
you never know what the direct or indirect effects are going to be 
unless you do this kind of analysis to find out. On every single 
regulation to be put out--and there are thousands per year--we are 
trying to reduce those regulations, and I agree that we have far too 
many regulations put out, and we want to curtail that. But to require 
such an analysis on every single regulation, which is the only way this 
can be interpreted, I think that puts us into a situation, as I said, 
where we are going to analyze things into paralysis, I am afraid.
  Further, the amendment subjects the analysis to judicial review--all 
of these things, every single one of them. I am sympathetic with the 
concerns that underlie the need for judicial review. I favor some sort 
of judicial review. However, we should be careful that in inserting 
judicial review into the Reg Flex Act, we do not want to turn this into 
the ``lawyers full employment act.'' I know the Senator from Wyoming 
addressed this, and there have not been many cases, or whatever the 
statement was a moment ago, in the State functions. Only a few cases 
have been brought.
  I believe that any efforts to establish judicial review should be 
very carefully evaluated and then carefully crafted so we can avoid the 
flood of litigation that could end up clogging the courts. So I hope 
that my colleague from Wyoming could work with us in strengthening the 
Reg Flex Act. I want to work with him on that. I believe that the 
currently scheduled hearing before the Committee on Governmental 
Affairs will provide an appropriate forum in which to consider the 
ideas. We already have the hearing schedules. This debate on S. 4 is 
neither the right time nor place to consider the amendment.
  With regret, I must urge my colleagues to vote against the Wallop 
amendment.
  I yield the floor.
  Mr. WALLOP. Madam President, I wish I had heard reason to oppose my 
amendment. I have heard lots of reasons to move on with it.
  I say to my friend from Ohio that we have been trying to get these 
amendments considered. We had hearings on this as far back as 1989. It 
does not give the people of America, who have to live with these 
things, a great deal of confidence to know that we are going to have 
more hearings. It has often been said, incorrectly, that the way to do 
nothing is to have a study. What we have is another study.
  The Senator from Ohio talks of unfunded mandates. For Heaven's sake, 
they are part and parcel of the problem, but not the direct effect of 
this amendment or the Senator from Wyoming and the Reg Flex Act.
  What we are talking about here is what the Vice President of the 
United States has endorsed. What we are talking about here is what the 
Office of Advocacy in the Small Business Administration has endorsed. 
What we are talking about here is the necessity for judicial review. If 
anybody thinks that there is the means by which you can add teeth to 
this regulatory flexibility, the Reg Flex Act, as it now exists, 
without giving judicial review, let them say. But there have been 
hearings in 1989, 1990, 1991, 1992, and 1993. It is time we acted on 
this. America is waiting for us to do something different, and we have 
not been willing to.
  They have been speaking to us about how the arrogance of the 
regulatory community is very, very simple. It just says we do not have 
to do it, and you cannot make us.
  The Senator says--and I agree--that we do not want to establish a 
paralysis-by-analysis and a lawyer's dream. But there are 240 years 
worth of experience within the States, and only 10 times have there 
been cases brought. American small business is a darn sight more 
intelligent and practical than is America's regulatory community. They 
are waiting for us to act, and we do not need more hearings. We know 
what it means.
  We have had, with all due respect, hearings and hearings upon 
hearings, and the fact of it is that the small business community 
continually comes to us and says: For Heaven's sake, put the voice of 
reason into this Government. The reason why we continue to have a high 
degree of small business failures, frankly, Madam President, is because 
it is so complicated to comply with the rules of the Government of the 
United States that most of them cannot afford to.
  If the Senator would agree, and I am sure he would if he has been 
traveling his State of Ohio, that what has taken place in America is 
that small businessmen and small governments are frightened of their 
Government lest it take notice of them. They are trying to serve it 
rather than be served by it.
  We would not be here with this amendment if the agencies of the 
Government of the United States had in any way lived up to their 
responsibility as Congress hoped when we passed the Reg Flex Act in 
1980.
  It just does not make sense to ask businesses and small communities 
and small governments in America to wait for more hearings when we have 
been doing nothing here. How do we listen? The hearings have been held. 
But the listening has apparently not started. This amendment is an 
attempt to get us to listen to America.
  If the Senator wants, report language could easily reflect the worry 
that he has about this turning into a judicial nightmare. I think the 
worry is misplaced. The experience of States has been that it just is 
not a problem, and there is no reason to suppose, unless there is a 
total lapse of responsibility, that the Federal Government would have 
more problems than do the States.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Ohio.
  Mr. GLENN. Madam President, I know we do not want a long, extended 
debate on this. I do not plan to get in a long discussion of this thing 
because I know the distinguished floor manager of the bill, Senator 
Hollings, wants to move along and get this done as rapidly as possible.
  I would only respond in brief, in that I know there have been 
hearings. For a long time I have tried to get regular review, and I 
know the Senator from Wyoming has been very interested in this.
  I submit, before one of the things that held it up in the previous 
administration was some of the action on the Council on Competitiveness 
where, when we tried to get regulatory reform and interest in it, there 
was not that kind of interest. There was interest in taking some other 
paths toward paperwork reduction and reg reform and that sort of thing.
  I submit we are into a different day now. The new administration has, 
in fact, put out an Executive order, which I am sure the distinguished 
Senator is aware of, cost-benefit analysis. It does not go to the 
smaller contracts, that is true. It is on the bigger contracts. But 
something like that can certainly be extended down to the smaller 
contracts, and smaller regulations will be considered. So we want to 
look at that.
  But as I understand it--and I would like to be corrected on this; I 
seriously would like to be corrected if I am wrong--as I understand it, 
this would require analysis of every single regulation put forward by 
the Federal Government for direct or indirect consideration and then 
would submit each one of those to judicial review if the person wanted 
to do that.
  That opens up a real enormous Pandora's box of potential litigation, 
as I see it. If I am wrong in my assumptions, then that is a little 
different ball game. But I do not think I am wrong, not by the wording 
of it anyway. This would require that kind of a regulation to know 
whether there are direct or indirect effects, I believe. Is that 
correct?
  Mr. WALLOP. The Senator is correct, when dealing with the final rule. 
But if the Senator has talked with his small businessmen and his small 
communities--and I am sure he has--and I am sure he knows that the 
indirect effects are the ones that are killing them. Their impact is 
not so difficult to analyze. The fact of it is that small businesses 
need this help. What has happened is that the arrogant Washington 
Government just does not care what the indirect effect is. If agencies 
did nothing but look over their shoulder, we would have a better and 
more efficient Government.
  Madam President, I do not intend to carry on the debate, but I would 
like to ask for the yeas and nays on my amendment.
  The PRESIDING OFFICER. Is there a sufficient second?
  There does not appear to be a sufficient second.
  Mr. WALLOP. Madam President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. GLENN. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  Mr. WALLOP. I object.
  The PRESIDING OFFICER. Objection is heard.
  The clerk will continue to call the roll.
  The assistant legislative clerk resumed the call of the roll.
  Mr. GLENN. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. WALLOP. Madam President, will the Senator yield again for a 
request?
  Mr. GLENN. I yield.
  Mr. WALLOP. Madam President, I ask for the yeas and nays on my 
amendment.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  The PRESIDING OFFICER. The Senator from Ohio.
  Mr. GLENN. Madam President, I was not aware until just a few moments 
ago that there has been a letter sent to the distinguished chairman of 
the Finance Committee, Senator Moynihan, from the Department of the 
Treasury, Secretary Lloyd Bentsen, and I will read the letter:
       Dear Pat: I understand that the Senate is currently 
     considering Senator Wallop's amendment to the Regulatory 
     Flexibility Act (the ``Act''). This amendment would subject 
     interpretative tax regulations issued by the Internal Revenue 
     Service (IRS) to the provisions of the Act. I believe that 
     this amendment is unwise and would operate to the detriment 
     of taxpayers, including small businesses.
       Currently, the Act requires agencies to prepare a 
     regulatory flexibility analysis when the Administrative 
     Procedure Act or any other law requires the publication of a 
     notice of proposed rulemaking--that is, when the regulations 
     are not interpretative. When regulations merely interpret 
     rules passed by Congress, rather than impose additional rules 
     on taxpayers, an agency is not required to issue a notice of 
     proposed rulemaking and thus is not required to prepare a 
     regulatory flexibility analysis.
       I oppose Senator Wallop's amendment for several reasons. 
     First, current law requires the IRS to consider the impact 
     that their interpretative rules will have on small 
     businesses. Congress has, in the past, carefully considered 
     and rejected the application of the Act to interpretative IRS 
     regulations. It should do so again. Rather than apply the Act 
     to all IRS regulations, Congress in 1988 enacted section 
     7805(f) of the Internal Revenue Code. This section requires 
     the IRS to submit all proposed regulations to the Small 
     Business Administration's (SBA) Chief Counsel for Advocacy 
     for review and comment. The IRS is required to explicitly 
     address comments of the SBA when it is finalizing 
     regulations. These rules are a very important part of the 
     regulatory process and the IRS fully complies with these 
     Congressional mandates.
       Second, this amendment would have a significant adverse 
     affect on the ability of the IRS to administer the tax code 
     and provide necessary and timely guidance to taxpayers. The 
     IRS issues interpretative rules to provide taxpayers with the 
     guidance necessary for compliance. Tax regulations are 
     generally classified as interpretative because they are so 
     closely tied to the statutory provisions to which they 
     relate. The IRS does not classify tax regulations as 
     interpretative to avoid rules requiring an analysis of how 
     the rules affect small businesses.
       Third, this amendment would have an adverse impact on 
     taxpayers ability to comply with a detailed and comprehensive 
     framework for the determination and collection of taxes. We 
     have received numerous complaints from taxpayers and their 
     advisers that the IRS issues too little, rather than too 
     much, guidance and that guidance is needed faster. On Sept. 
     30, 1993, the President issued a memorandum directing 
     agencies to review the procedures by which they develop and 
     review regulations and to report back to him by March 31, 
     1994 on actions they have taken to streamline those 
     procedures. The President's goal is that regulations be 
     issued on a more timely basis. To impose the Act on the IRS 
     when it is issuing regulations that merely interpret rules 
     enacted by Congress would clearly delay the issuance of 
     regulations to the detriment of taxpayers, including small 
     businesses.
           Sincerely,
                                                    Lloyd Bentsen.

  I was not aware of this letter until just a moment ago here. So I am 
sorry I did not have a copy of this to give to my colleague. If he 
wishes a copy, I will be glad to give it to him.
  Mr. WALLOP. Madam President, I will try not to carry on too long on 
this.
  The PRESIDING OFFICER. The Senator from Wyoming.
  Mr. WALLOP. Madam President, at the end of my remarks I know what 
happens. This will be used as a means by which to destroy what we are 
trying to do for small business.
  The letter from the Secretary of the Treasury is precisely why we 
need this amendment.
  I will move to strike the provision. If I could have the attention of 
the Senator from Ohio, I would like to say why it was included and why 
it is needed and why I will fight to return one day to put it in.
  The fact of it is that the IRS is the principal agency to whom this 
ought to apply. The Office of Advocacy in the Small Business 
Administration says so. But they have one person--one person, Madam 
President--to look at everything that comes out of the IRS.
  Now if we want to expand exponentially the staff of the Small 
Business Advocacy Administration, we can do that, but the IRS will 
ignore them anyway because they have no means by which to enforce the 
RFA.
  The Regulatory Flexibility Act now applies only when Federal agencies 
are required to issue notice and comment. As a result, interpretative 
rulings, general statement of policy, rules concerning loans, grants, 
benefits or public contracts are not subject to the analytical 
requirements under the act. Because the IRS claims that its rulings are 
``interpretive''--to advise the public on the construction of the law--
the IRS falls outside of the requirements of RFA.
  Our amendment would subject the IRS to the rules of RFA. It would 
treat them like other agencies. There is no good reason why the tax 
hounds of America ought to be treated differently than other agencies 
and, in fact, because of the economic cost of their regulations, it is 
all the more important that they are treated the same.
  By applying RFA to the IRS, they would have to consider the impact of 
their regulations on small businesses and determine if there is a less 
onerous alternative that does not detract from its collection purposes.
  And I might say, Madam President, that in the course of this, I will 
show that in some cases the IRS is costing itself money by its idiotic 
application of regulations.
  My amendment is intended to apply only to temporary, proposed, or 
final regulations issued by the IRS. These are the rules by which they 
interpret the tax code and which have the most impact on small 
business.
  Why should we not consider what the impact of regulations are on 
small business? Is the IRS king god, above all of us? Are they not part 
of a democratic process? Is the IRS so important to America that they 
can waive all the constitutional requirements of a democracy?
  Now I do not intend to have the amendment apply to such rules as 
technical advice memoranda, revenue rulings, or revenue procedures.
  The IRS says the Office of Advocacy at SBA should handle it this 
issue.
  They have used this argument, I would say to my friend, absolutely 
endlessly to claim that they should not be subject to the rules and, if 
they are, the Office of Advocacy should be responsible.
  I would tell the Secretary that the SBA Advocacy Office disagrees. He 
might once in awhile talk to the people who he says can undertake this 
process.
  Besides, the IRS is the only one really equipped to handle the 
analysis. Instead, they are advocating the creation of another entire 
bureaucracy to address an analysis which they alone are already 
prepared to do.
  Now the IRS says that the proposal will generate lots of litigation.
  The judicial review provision obviously adds teeth to the RFA. It 
will force agencies to assess and deal with the impact of their actions 
on small business. A simple certification would allow the IRS to avoid 
any analysis of the impact on small business.
  By making the RFA subject to judicial review, any challenge to the 
reasonableness of a regulation would include consideration of the 
regulatory flexibility analysis performed for the federal rule.
  All this provision will do, I say to my friend from Ohio and the 
Secretary of the Treasury, is give taxpayers additional information 
with which to challenge IRS regulations. It merely requires them to 
give further consideration to the impact on small business.
  I have seen a total lack of concern, even disdain, by the IRS about 
the impact of its action on taxpayers. And this is as true with its 
regulations, as it is when it brings a case against a taxpayer.
  For example, Senator Pryor from Arkansas has been trying for a long 
time to get his Taxpayer Bill of Rights 2 enacted into law, but he has 
been thwarted in his efforts, in part, because the bill would give 
taxpayers an opportunity to receive more information about the IRS 
actions and receive attorney's fees more readily.
  If the IRS does not care about the cost incurred by a taxpayer who 
may be wrongly affected by the service, why should we think that they 
care about the impact of their regulations on small businesses? And 
experience tells us they do not.
  As usual, this is a bureaucracy, and perhaps a bureaucracy above all 
others in the American bureaucracy, that wants all the powers and 
leaves the taxpayer without recourse.
  Let me give my colleagues an example of an IRS regulation that will 
have a significant impact on small business and to which the IRS and 
Treasury have shown little concern.
  When the tax bill was enacted last August, it included a provision to 
change the point at which the diesel fuel taxes are assessed and 
collected. It would require tax-exempt diesel fuel to be dyed, because 
it was thought that this would be an easier way to ensure compliance.
  This diesel fuel dyeing provision is ridiculous and it is going to 
cost businesses more to comply than the revenue that will be raised, 
which is why Senator Nickles' proposal to require a cost-benefit 
analysis provision prior to enactment of a law is so important.
  Now I understand that IRS and Treasury have to draft regulations on a 
bad law, but they have done nothing to alleviate the problems. And they 
appear to have little concern for the impact their regulations will 
have either on business or the environment.
  Did you know that the IRS may mandate that terminal operators to 
install dyeing equipment to meet the provisions of the law?
  In Wyoming, I have refiners who chose not to install dyeing equipment 
when the EPA rule requiring high sulfur fuel to be dyed, was enacted. 
Instead, customers agreed to pay slightly higher fuel prices for 
undyed, low-sulfur fuel because it was more environmentally sound.
  So now the IRS says that if they want to sell dyed fuel, they have to 
put in equipment that costs upwards of $20,000 per terminal in order to 
ensure that the IRS collects a few extra dollars--$20,000 per terminal, 
Madam President, and they do not seem to care. And there are other 
ways, and they have been shown other ways, to achieve their goal.
  Did you know that the IRS wants to require 10 pounds of dye per 1,000 
barrels of diesel fuel? Yet, preliminary data suggests that the 10-
pound dyeing requirement for high-sulfur diesel fuel could impair 
product quality by increasing the amount of sediment in the fuel; it 
could plug burners in heating units; and high dye concentrations make 
it impossible for pipelines to perform quality testing. Finally, those 
high dye concentrations leave residual deposits which causes storage 
tanks to be useless for other products or could bleed through to a new 
product.
  Does the IRS care that it is bothering the environment? Does the IRS 
care that it is making them useless? No, they do not.
  Does anyone in the Senate know that the regulations give the IRS the 
ability to detain a vehicle, a train or a boat to inspect its fuel 
tanks and storage tanks? This has nothing to do with collecting taxes. 
But there are no limitations to ensure that this detainment is not 
abusive. How can we stop the IRS from holding up important and timely 
shipments?
  These are only some of the problems with the IRS diesel fuel 
regulations. But they certainly highlight the need for a regulatory 
analysis.
  I would also like to reference some comments by Congressman Upton at 
a hearing on the Regulatory Flexibility Act:

       The IRS maintained that the contemporaneous record-keeping 
     requirements were a classic case of interpretive regulations. 
     They insist they were simply carrying out Congressional 
     orders which they were powerless to change or control. Yet 
     IRS used their own judgment in deciding what Congress meant 
     by ``adequate contemporaneous records.'' In the IRS view, 
     this required a daily log of date, purpose (whether business 
     or pleasure), user's name, place of use, odometer readings, 
     and length of use (if appropriate), as well as other related 
     expenses. When public pressure grew and it became obvious the 
     reporting cost far outweighed the benefits gained, the IRS 
     proceeded to amend their regulations and adopt alternatives.
       As they told an IRS commissioner later, ``If you were doing 
     the Reg Flex analysis that many of us think you ought to be 
     doing all along, you would have come up with the proposal and 
     said, `Look, in order to gain $150 million it is going to 
     cost the taxpayers $3 billion in extra paperwork.'''

  I know what this letter from Secretary Bentsen means. But I do not 
want it to be a means by which it impinges on the freedom of the rest 
of small business to receive the benefits of judicial review of the 
RFA.
  So, Madam President, I ask unanimous consent that I be permitted to 
amend my amendment by withdrawing paragraph 1 which says: ``in 
paragraph (2) by inserting ``any rule of the Internal Revenue Service 
before ``or any other law including''; which would eliminate the IRS.
  I will send that to the desk.
  The PRESIDING OFFICER (Mr. Wellstone). Is there objection?
  Mr. GLENN. Mr. President, reserving the right to object, and I do not 
think I will object because the Senator can modify his amendment if he 
likes. Either way.
  I want him to be aware there is another letter here that has come to 
our attention. We are not bringing these things out of the woodwork, 
they are just arriving as we are on the floor here. But this is from 
the Small Business Administration to Senator Bumpers, who is chairman 
of the Senate Small Business Committee. The last paragraph of which 
says:

       My support for providing regulatory relief to small 
     businesses is well known, but, under these circumstances, we 
     feel that S. 4 is not the appropriate vehicle for resolution 
     of the issues raised by Senator Wallop's amendment. We 
     recommend it not be added to S. 4 at this time.

  Mr. President, I ask unanimous consent the entire letter from Erskine 
Bowles, Administrator of the U.S. Small Business Administration, be 
printed in the Record at the conclusion of my remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  Mr. GLENN. Mr. President, at the appropriate time I will move to 
table the amendment. But I want the distinguished Senator from Wyoming 
to know----
  Mr. WALLOP. Would the Senator permit the Senator from Wyoming to 
modify his amendment as suggested, to remove the IRS?
  Mr. GLENN. I have no objection to that.
  The PRESIDING OFFICER. Is there objection to the Senator modifying 
his amendment? Without objection, it is so ordered.
  The amendment (No. 1487), as modified, is as follows:

       At the appropriate place, insert the following:


                              definitions

       Section 1. Section 601 of title 5, United States Code is 
     amended--
       (1) in paragraph (5) by striking out ``and''at the end 
     thereof;
       (2) in paragraph (6) by striking out the period and 
     inserting in lieu thereof a semicolon and ``and''; and
       (3) by adding at the end thereof the following new 
     paragraph:
       ``(7) the term `impact' means effects of a proposed or 
     final rule which an agency can anticipate at the time of 
     publication, and includes those effects which are directly 
     and indirectly imposed by the proposed or final rule and are 
     beneficial and negative.''.


                initial regulatory flexibility analysis

       Sec. 2. Section 603 of title 5, United States Code, is 
     amended--
       (1) in subsection (a)--
       (A) in the first sentence by inserting ``as defined under 
     section 601(2)'' after ``any proposed rule''; and
       (B) in the second sentence by striking out ``the impact'' 
     and inserting in lieu thereof ``both the direct and indirect 
     impacts'';
       (2) in subsection (b)(3) by striking out ``apply'' and 
     inserting in lieu thereof ``directly apply and an estimate of 
     the number of small entities to which the rule will 
     indirectly apply''; and
       (3) in subsection (c) in the first sentence by inserting 
     before the period ``either directly or indirectly effected``.


                 final regulatory flexibility analysis

       Sec. 3. Section 604(a) of title 5, United States code, is 
     amended in the first sentence by striking out ``under section 
     553 of this title, after being required by that section or 
     any other law to publish a general notice of proposed 
     rulemaking'' and inserting in lieu thereof ``as defined under 
     section 610(2)''.


                            judicial review

       Sec. 4. Section 611(b) of title 5, United States code, is 
     repealed.
  Mr. GLENN. Mr. President, I want to make clear I am entirely in favor 
of some of this regulatory relief that hits small businesses, hits 
small governments, hits them hard. We are moving in that direction. We 
have several pieces of legislation.
  I know the Senator says we have gone back many years but we did not 
go back many years with this administration, let me point out. The 
problem with regulatory change has not been with the Clinton 
administration, with all due respect. The problem has been in the past 
administrations, Bush and Reagan, where we really did try to do this 
and it was blocked. So let us just make sure we understand that.
  I was part and parcel of that, in trying to get some changes. So we 
do have a different ball game now. We have an Executive order out from 
this President that says we are going to look at these things. He 
applies it to the bigger entities, so it does not go down to the level 
the Senator from Wyoming wants. And I want to take it down to that 
level. But I want to do it after due consideration in the committee, 
where we already have hearings scheduled. I am committed to this as 
much as anybody in this Chamber, including my distinguished colleague 
from Wyoming, to getting regulations under control. We are inundated 
with regulations. We are moving with Leon Panetta, OMB, to look at 
these things. We are getting a new person in on management over there 
as well as the people who are working on this out of OIRA, the Office 
of Information and Regulatory Affairs. So it is not something we are 
ignoring.
  All this about the past history of this thing, that was the past 
administration where they did not really go for this sort of thing. 
They wanted to do it under the Council on Competitiveness, under the 
Vice President. That is what we had to fight before. When we tried to 
change some of these things we were blocked. So let us make sure we all 
understand what we are talking about here.
  I am not trying to block anything. I am as much for regulatory reform 
as anybody in this body and have worked to that end and am doing so on 
the committee now. That is what I want a chance to do, is go ahead and 
take these things up in committee so we can do the proper job on it and 
not just do it out here on the floor with one particular piece of 
legislation. We are going on longer than I had anticipated with this 
debate here.
  Mr. WALLOP. If the Senator will allow me to conclude?
  Mr. GLENN. I will indeed. At the appropriate time, if my colleague 
will let me know, I will move to table.

                               Exhibit 1


                                Small Business Administration,

                                   Washington, DC, March 10, 1994.
     Hon. Dale Bumpers,
     Chairman, Senate Small Business Committee,
     U.S. Senate, Washington, DC.
       Dear Mr. Chairman: It has come to my attention that Senator 
     Wallop proposes to offer an amendment to S. 4, the National 
     Competitiveness Act, which would amend the Regulatory 
     Flexibility Act to provide regulatory relief to small 
     businesses.
       As you know, we are strongly in favor of S. 4. We believe 
     it can make a real difference in promoting job growth and 
     economic development for the nation. The President has 
     indicated his preference that the Senate reject any 
     amendments which would delay enactment of this bill.
       My support for providing regulatory relief to small 
     businesses is well known, but, under these circumstances, we 
     feel that S. 4 is not the appropriate vehicle for resolution 
     of the issues raised by Senator Wallop's amendment. We 
     recommend that it not be added to S. 4 at this time.
           Sincerely,
                                                Erskine B. Bowles,
                                                    Administrator.

  Mr. WALLOP. Mr. President, I ask unanimous consent that Senator 
Pressler be added as a cosponsor.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. WALLOP. I would say to my friend from Ohio, his excuse is gone. 
His excuse is gone.
  Mr. GLENN. My excuse?
  Mr. WALLOP. It is not here anymore. And my question is, what is it 
about ruling that makes governments resist management? If the excuse 
was that the Bush administration stopped the Senator from doing it, 
well, that administration is gone.
  Mr. GLENN. Will the Senator yield for an answer?
  Mr. WALLOP. Absolutely.
  Mr. GLENN. I am not looking for any excuse at all. I am the last guy 
in the world here who is going to have an excuse for anything like 
regulatory reform. But I want to do it right. I do not want to do it 
here on a bill it should not be on to begin with. I want to take it up 
in committee, consider big business, small business, big government, 
small government, small government enterprises, and do it right. We 
have several different pieces of legislation that are proposed. I just 
do not want to see us do a halfway job on this and do something that is 
going to be a lawyers full employment act.
  All we are going to do--we say we are going to take up every direct 
and indirect possibility of every single rule and regulation that is 
put into effect in this Government. We are talking about thousands and 
thousands of potential lawsuits across this country. Maybe my colleague 
says in the States that has not been the track record, but that is the 
potential he is opening up. I would say, all I want to do is consider 
this in committee and take it up. I will be glad to work with the 
Senator from Wyoming on this in committee so we can come up with 
something that has less potential for disaster than this has. That is 
my only view on it.
  Mr. WALLOP. Mr. President, if we have the potential for those 
thousands and thousands of lawsuits, maybe it tells us something about 
what we are doing. I would say to my friend from Ohio that this 
administration in the past year has put out the third largest number of 
regulations in the history of our country. The previous two records 
having been held by Jimmy Carter.
  That is not a record that matches the rhetoric. But I would say that 
this Government, of which you are part of the majority, has already 
considered this in the National Performance Review.
  Let me say it is always interesting that an administration can 
summon, on demand, a new level of opposition even from someone who has 
just given his or her blessing. I speak in particular of the Small 
Business Administration. Administrator Bowles is obviously doing 
somebody's bidding that does not reflect his own view. Because in 
response to a question by Senator Mack during his confirmation hearing 
asking ``What changes do you believe need to be taken to strengthen the 
regulatory flexibility act?'' the answer was, ``Imposition of judicial 
review would strengthen the act by ensuring a Federal agency failure to 
comply would be answerable in the courts. In addition, the RFA must be 
clarified to ensure that agencies examine, indirect [``indirect'' 
Senator] as well as direct impacts on small businesses. Often agencies 
issue rules that only have minor direct impacts but the indirect 
impacts are quite onerous.''
  All I would say is that something has happened. I suspect it is an 
order from the Treasury Department or the White House, to have changed 
the very specific and clear response that Administrator Bowles gave in 
the first place.
  Mr. President, I ask in closing that a list of several dozen 
organizations, including the NFIB, be printed in the Record as 
supporting the concept of strengthening the Reg Flex Act, especially 
with regard to providing judicial review. I yield the floor.
  There being no objection, the list was ordered to be printed in the 
Record, as follows:

           Organizations which Support Strengthening Reg Flex

       National Federation of Independent Business.
       The Society of American Florists.
       National Tooling & Machining Association.
       Automotive Parts Rebuilders Association.
       National Association of Plumbing-Heating-Cooling 
     Contractors.
       Manufacturers' Agents National Association.
       The National Association of Negro Business and Professional 
     Women's Clubs, Inc.
       National Roofing Contractors Association.
       American Road & Transportation Builders Association.
       American Association of Nurserymen.
       National Association for the Self Employed.
       Business Advertising Council, Inc.
       Small Business Exporters Association.
       National Limousine Association.
       Association of Women Government Contractors.
       National Parking Association.
       United Bus Owners of America.
       Minority and Women Owned Businesses of the D.C. Metro Area.
       National Association of Chemical Distributors.
       Opticians Association of America.
       Associated Landscape Contractors of America.
       Asian American Business Roundtable.
       International Dairy Foods Association.
       Associated Specialty Contractors.
       Automotive Body Parts Association.
       Automotive Parts Rebuilders Association.
       Automotive Engine Rebuilders Association.
       Automotive Service Association.
       Auto International Association.
       Automotive Service Industry Association.
       Automotive Parts & Accessories.
       Automotive Warehouse Distributors.
       Council of Fleet Specialists.
       Paint, Body and Equipment Association.
       Motor & Equipment Manufacturers Association.
       Production-Engine Remanufacturers Association.
       National Glass Association.
       Specialty Equipment Market Association.
       National Tire Dealers & Retreaders Association.
       Automotive Wholesalers Association of New England.
       Professional Lawn Care Association of America.
       Independent Business Association of Illinois.
       National Small Business United.
       Northeast Texas Nursery Growers Association.
       American Boiler Manufacturers Association.
       American Trucking Associations.
       Associated Builders and Contractors, Inc.

  Mr. GLENN. Mr. President, only one final remark. I talked about the 
number of regulations that could come out this year. I am sure the 
Senator from Wyoming is aware it takes a year or two for regulations to 
come out after laws are passed. The regulations coming out this year 
are from laws passed during the Bush administration, basically.
  Mr. WALLOP. The regulation, nonetheless, I would say to my friend, is 
the province of the agency. Not the province of the Congress which 
passed them. That is why we passed the Reg Flex in the first place, 
because we saw the agencies doing more than we suspected they would 
when we passed the law.
  Mr. HOLLINGS addressed the Chair.
  The PRESIDING OFFICER. The Senator from South Carolina.
  Mr. HOLLINGS. Mr. President, I understood the discourse. I appreciate 
the interest--the Senator from Wyoming with regulations--but there has 
been no keener interest than the distinguished chairman of our 
Governmental Affairs Committee.
  I think Senator Glenn has outlined it exactly. Here is an amendment 
that has no relation whatsoever to the bill. This Chinese-bandit 
approach. I would have hoped now, having had two really informative 
kind of votes--one just to get rid of the bill, really not appropriate 
to anything to authorize, and another one of a grab-bag approach by a 
very popular leader, Senator Simpson, with Democratic cosponsors within 
the grab bag in order to get the vote, what have you. It did not work.
  I guess they want to wear us down. Of course, that is not going to 
happen. I learned one thing. I have a harder head than most of these 
folks around here, so we are willing to stay, rather than have all 
these votes on tabling.
  Mr. WALLOP. Mr. President, the Senator would surely not accuse me of 
taking a long time on this amendment.
  Mr. HOLLINGS. No, even bringing it up. There is no objection to your 
amendment; there is no objection to the subject matter. In fact, I am 
confident the Senator from Ohio would work with the Senator from 
Wyoming and get the job done within the committee and get it out. There 
is not going to be any delay this year.
  It is seemingly a part of the Chinese-bandit strategy: Keep peppering 
with nongermane amendments that do not apply to technology and the 
Advance Technology Program.
  Mr. WALLOP. I will say to the Senator, if he will yield, one of the 
rationale that has been proffered for S. 4 is to improve American 
competitiveness, and this does.
  Mr. HOLLINGS. That is the general idea. I guess we ought to change 
the title if we can ever get to an amendment and get to the real 
substance of it. That was just a buzz word and everybody can come in 
and say that improves competitiveness. It has no relation to the bill 
and ought to be tabled.
  I yield to the Senator from Ohio.
  Mr. GLENN. Mr. President, I move to table the amendment.
  Mr. WALLOP. I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  Mr. PRESSLER. Mr. President, I rise today as a cosponsor of the 
Wallop Regulatory Flexibility Act amendment to S. 4, the National 
Competitiveness Act. The Regulatory Flexibility Act is of paramount 
importance to the 21 million U.S. small businesses. This sector played 
a starring role in the economic expansion of the past decade. Small 
businesses today employ 54 percent of the U.S. work force, account for 
44 percent of all sales, and generate 39 percent of our gross domestic 
product. Government regulation places undue burdens on small businesses 
which in turn inhibits their ability to compete at home and in the 
global marketplace. However, the Regulatory Flexibility Act [RFA], if 
properly implemented and appropriately strengthened, can help ease the 
regulatory burdens on small businesses. That is why the small business 
community strongly endorses this amendment.


                     the regulatory flexibility act

  The RFA is based on two premises. First, Federal agencies often do 
not recognize the impact their rules have on small businesses. Second, 
small businesses are disproportionately affected by Federal regulation 
compared to their larger counterparts. The RFA was enacted to not only 
obtain Federal agency recognition of these effects, but to reduce them. 
The RFA requires Federal agencies to assess the impact of their 
proposals on small businesses. Agencies have two options under the 
statute--performing a regulatory flexibility analysis or issuing a 
certification.
  An agency certifies a rule if it determines the rule will not have a 
significant economic impact on a substantial number of small 
businesses. The certification must be announced in the Federal Register 
and must be accompanied by ``a succinct statement explaining the 
reasons for such certification.'' Boilerplate statements that the rule 
will not have such an effect are inadequate under the RFA.
  An agency assessment that reveals the rule will have a significant 
economic impact on a substantial number of small businesses requires 
the agency to prepare a regulatory flexibility analysis. The analysis 
must contain: a description of the reasons why the action is being 
considered; a succinct statement of the objectives of, and legal basis 
for the action; a description and estimate of the small businesses 
affected by the agency action; a detailed description of the reporting, 
recordkeeping, and other compliance requirements with special attention 
to the affected small businesses; and any duplicative Federal 
regulations.
  Additionally, the analysis must describe and examine significant 
alternatives to the proposed rule which accomplish the objectives of 
the agency, but that minimize the economic impact on small businesses. 
Significant alternatives may include, but are not limited to: 
Establishment of differing compliance or reporting requirements that 
take into account the resources available to small businesses; the use 
of performance rather than design standards; or exemptions of small 
businesses from all or part of the rule. When an agency promulgates a 
final rule under section 553 of the RFA, it must explain why it did not 
adopt other alternatives to minimize the effects on small businesses 
which were presented to the agency during the rulemaking process.
  Unfortunately, not every agency has discovered the RFA is a valuable 
tool in its regulatory process. When agencies fail to comply with the 
RFA, they impose significant and burdensome requirements on small 
businesses, and thereby threaten their viability. These agencies often 
view the RFA as nothing more than another procedural impediment to the 
promulgation of a particular rule. This causes agencies to issue 
boilerplate certifications without performing the underlying assessment 
of impacts on small business required by the RFA.
  Some agencies use loopholes in the RFA to avoid the analytical 
requirements of the act. For example, the Internal Revenue Service 
(IRS) avoids compliance by labelling its regulations as interpretative 
and therefore not subject to the rulemaking requirements of the RFA. 
These loopholes undermine the potential promise of the RFA as a tool to 
improve agency rulemaking.


           means to strengthen agency compliance with the rfa

  Our Regulatory Flexibility Amendment has three key elements: First, 
repeal of the prohibition against judicial review; second, coverage of 
both direct and indirect effects; and third, coverage of interpretative 
rules--closing the IRS loophole.
  The RFA requires agencies to consider the impact of their actions on 
small businesses. However, the authors of the RFA were concerned a 
litigation explosion might result under the RFA. The rationale being 
that businesses would attempt to delay the implementation of 
regulations through court action. To prevent this problem, the sponsors 
included a provision excluding separate judicial challenges to agency 
compliance with the RFA. However, it is highly unlikely there would be 
a flood of litigation if a judicial review provision was added to the 
RFA. The fact is, that most small businesses do not have the financial 
resources to bring countless RFA suits. As a consequence, my 
Colleagues, should not be fooled by the ``red herring'' of a threat of 
litigation explosion.
  The ability of agencies to ignore their responsibilities under the 
RFA is enhanced by the conspicuous absence of judicial review under the 
RFA. Without judicial review, compliance rests upon each agency's 
voluntary commitment to utilization of the RFA in its quest for 
rational rulemaking mandated by the Administrative Procedure Act (APA). 
However, small businesses do not need voluntary commitments, they need 
action. The primary means to accomplish mandatory compliance would be 
to repeal section 611 and authorize individuals aggrieved by agency 
failure to comply with the RFA to challenge the agency's action in 
court.
  Additionally, agencies would increase their contact with the SBA 
Office of Advocacy, take greater heed of its advice as the agency 
responsible for monitoring the RFA, and improve the documentation of 
their discussions with the SBA Office of Advocacy concerning potential 
impact on small business, in their efforts to avoid potential 
litigation. Of course, Federal bureaucrats will not view with any 
pleasure the institution of yet another means to challenge their 
regulatory authority.
  The RFA currently requires Federal agencies to comply with its terms 
only when they are required to issue notice and comment rulemaking of 
the APA or some other law. Thus, interpretative rules, general 
statements of policy, and rules concerning loans, grants, benefits, or 
public contracts are not subject to the analytical requirements under 
the RFA. For the most part, this causes no problems in agency 
compliance with the RFA. Generally, rules most often classified as 
interpretative do not pose problems for small businesses. Similarly, 
rules concerning agency management, while significant, usually do not 
affect small businesses. One exception to this basic premise is the 
actions taken by the IRS.
  A majority of rules issued by the IRS are characterized as 
interpretative. Interpretative rules are meant only to advise the 
public, not to bind them.
  However, many rules the IRS labels interpretative are 
indistinguishable in their substance and effect from rules requiring 
notice and comment under the APA. To the small business owner, who must 
comply with the IRS' rules, they are identical.
  Congressional committees with RFA oversight responsibilities, 
repeatedly have urged the IRS to put aside the often arbitrary 
distinctions drawn between interpretative and legislative rules and to 
utilize the analytical procedures of the RFA to provide a solid 
foundation for its rulemakings.
  The IRS has used this exemption and other means to avoid the small 
business analysis required by the RFA--irrespective of the potential 
burden the rules would place on small businesses. The RFA also does not 
reach Revenue Rulings, Revenue Procedures, Notices, or Letter Rulings. 
These are akin to general statements of policy which are not subject to 
the notice and comment provisions of the APA. In addition, they are not 
subject to the analytical requirements of the RFA. The IRS decision to 
classify a rule or pronouncement in a particular manner virtually is 
impervious to court challenge.
  The IRS should be required to comply with the provisions of the RFA. 
Its interpretations have a substantial impact on small businesses and 
the IRS should consider these effects when it issues rules. Congress 
should amend the RFA to require the IRS to comply with the Act, 
irrespective of the characterization of the IRS issuance. The 
interpretative rule loophole in the RFA needs to be closed if small 
businesses are to be protected from excessive regulation by the IRS.


                               conclusion

  Mr. President, I fully support this effort to strengthen the RFA. 
This amendment will help curtail excessive regulation by Government 
bureaucrats. Furthermore, it will add teeth to the RFA and give small 
businesses a legal means for countering continued violations of the 
RFA. The RFA, if properly implemented and appropriately strengthened, 
can help ease the regulatory burdens on small businesses. Regulatory 
relief for small businesses will create greater opportunity for small 
businesses, more jobs for American workers, and will expand the U.S. 
economy. I urge my colleagues to support this amendment.
  The PRESIDING OFFICER. The question is on agreeing to the motion to 
lay on the table amendment No. 1487. The clerk will call the roll.
  The legislative clerk called the roll.
  Mr. FORD. I announce that the Senator from Colorado [Mr. Campbell], 
and the Senator from Connecticut [Mr. Dodd] are necessarily absent.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 31, nays 67, as follows:

                      [Rollcall Vote No. 53 Leg.]

                                YEAS--31

     Akaka
     Biden
     Boxer
     Bradley
     Daschle
     DeConcini
     Dorgan
     Feingold
     Ford
     Glenn
     Graham
     Hollings
     Inouye
     Johnston
     Kennedy
     Levin
     Lieberman
     Metzenbaum
     Mikulski
     Mitchell
     Moynihan
     Murray
     Pell
     Pryor
     Riegle
     Robb
     Rockefeller
     Sarbanes
     Simon
     Wellstone
     Wofford

                                NAYS--67

     Baucus
     Bennett
     Bingaman
     Bond
     Boren
     Breaux
     Brown
     Bryan
     Bumpers
     Burns
     Byrd
     Chafee
     Coats
     Cochran
     Cohen
     Conrad
     Coverdell
     Craig
     D'Amato
     Danforth
     Dole
     Domenici
     Durenberger
     Exon
     Faircloth
     Feinstein
     Gorton
     Gramm
     Grassley
     Gregg
     Harkin
     Hatch
     Hatfield
     Heflin
     Helms
     Hutchison
     Jeffords
     Kassebaum
     Kempthorne
     Kerrey
     Kerry
     Kohl
     Lautenberg
     Leahy
     Lott
     Lugar
     Mack
     Mathews
     McCain
     McConnell
     Moseley-Braun
     Murkowski
     Nickles
     Nunn
     Packwood
     Pressler
     Reid
     Roth
     Sasser
     Shelby
     Simpson
     Smith
     Specter
     Stevens
     Thurmond
     Wallop
     Warner

                             NOT VOTING--2

     Campbell
     Dodd
       
  So the motion to lay on the table the amendment (No. 1487) was 
rejected.
  Mr. WALLOP. Mr. President, I move to reconsider the vote by which the 
motion to lay on the table was rejected.
  Mr. HOLLINGS. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.


                           Order of Procedure

  Mr. WALLOP. Mr. President, I ask unanimous consent that the request 
for the yeas and nays on the amendment be vitiated.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. WALLOP. I urge adoption of the amendment.
  The PRESIDING OFFICER. Is there further debate on the amendment? If 
not, the question is on agreeing to the amendment. The amendment (No. 
1487) was agreed to.
  Mr. WALLOP. Mr. President, I move to reconsider the vote by which the 
amendment was agreed to.
  Mr. HOLLINGS. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. WALLOP. I thank the Chair. I thank the Senator from South 
Carolina.
  Mr. HOLLINGS. 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. COHEN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                          ____________________