[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.
____________________