[Congressional Record Volume 140, Number 28 (Tuesday, March 15, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: March 15, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                                 RECESS

  The PRESIDING OFFICER. Under the previous order, the Senate will now 
stand in recess until the hour of 2:30 p.m.
  Thereupon, at 12:43 p.m., the Senate recessed until 2:30 p.m.; 
whereupon, the Senate reassembled when called to order by the Presiding 
Officer (Mr. Kohl).
  Mr. RIEGLE. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. MITCHELL. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                      Unanimous-Consent Agreement

  Mr. MITCHELL. Mr. President, I ask unanimous consent that the Brown 
Amendment No. 1496 be withdrawn and the 2:30 p.m. cloture vote be 
vitiated; that it now be in order for Senator Hollings, in behalf of 
himself and Senator Danforth, to modify the committee substitute to S. 
4 with language which would reduce the substitute to a 2-year 
authorization level of $1.9 billion; that Senator Danforth then be 
recognized to offer an amendment to delete the venture capital 
provision of the committee substitute to S. 4; that there be a 
limitation of 90 minutes for debate on the amendment, with no 
amendments in order thereto or to the language proposed to be stricken, 
with the time equally divided and controlled in the usual form; that 
when the time is used or yielded back, the Danforth amendment be laid 
aside, with no other amendments in order, that there then be 60 minutes 
remaining for debate on the bill and committee substitute, inclusive, 
with the time equally divided and controlled between Senators Hollings 
and Danforth or their designees; that at 9 a.m. on Wednesday, March 16, 
the Senate then proceed to S. 1458, the Kassebaum general aviation 
liability bill, under the provisions of a previous unanimous consent 
agreement; that when the time is used or yielded back, S. 1458 be 
temporarily laid aside and the Senate then resume consideration of S. 
4; that upon resuming consideration of that bill and without 
intervening action or debate, the Senate proceed to vote on the 
Danforth amendment relating to the venture capital provision; that upon 
disposition of the Danforth amendment, the committee substitute, as 
amended, be agreed to and S. 4 be read a third time; that the Commerce 
Committee then be discharged from further consideration of H.R. 820, 
the House companion, and that the Senate then proceed to its immediate 
consideration; that all after the enacting clause be stricken and the 
text of S. 4, as amended, be inserted in lieu thereof; that the bill be 
advanced to third reading, and without intervening action or debate, 
the Senate vote on final passage of H.R. 820; that upon disposition of 
H.R. 820, the Senate insist on its amendment, request a conference with 
the House on the disagreeing votes of the two Houses, and that the 
Chair be authorized to appoint conferees; that upon disposition of H.R. 
820, and without intervening action or debate, the Senate resume 
consideration of S. 1458 and then proceed to vote on final passage of 
S. 1458, the general aviation liability bill.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  Mr. MITCHELL. Mr. President, I thank my colleagues.
  Let me now say that, as a consequence of this agreement, there will 
be no further rollcall votes today. The Senate will debate an amendment 
by Senator Danforth to delete the provisions of the pending bill 
relating to venture capital. It will then complete debate on the bill 
itself. That will be the action today.
  At 9 a.m. tomorrow, the Senate will take up S. 1458, the Kassebaum 
general aviation liability bill. Under the agreement governing that 
bill, there is 1 hour for debate equally divided. When that time is 
either used or yielded back, that will be laid aside, and the Senate 
will then vote first on the Danforth amendment to delete the venture 
capital provision from S. 4 and then upon final passage of S. 4 itself, 
and then upon S. 1458, the general aviation liability bill.
  Under this provision, the vote on the first of those three votes will 
occur some time between 9 a.m. and 10 a.m. It is not a certainty that 
the vote will occur at 10 a.m. because the time, the 1 hour, may not be 
used. So Senators should be aware that three votes will occur tomorrow 
morning commencing at some time prior to or at 10 a.m.
  Mr. President, I thank all of my colleagues for their cooperation to 
permit us to go forward. This involves a very large number of Senators 
and a very large number of issues, and I appreciate their cooperation.
  I am pleased now to yield to the Republican leader.
  Mr. DOLE. Mr. President, I understand, following disposition of these 
matters, we move to the park concessions bill.
  Mr. MITCHELL. Mr. President, I have not yet had an opportunity to 
discuss the schedule request with the Republican leader. I would like 
to do so. I made no decision in that regard. I want to discuss that 
with him later in the day.
  The PRESIDING OFFICER. Without objection, amendment No. 1496 is 
withdrawn.
  Mrs. MURRAY. Mr. President, I rise in strong support of S. 4, the 
National Competitiveness Act.
  In the Pacific Northwest I have met with many workers in industries 
as diverse as timber, commercial fisheries, agriculture, aerospace 
manufacturing, and computer technology. These workers have one 
overriding concern--job security. Timber harvests have declined. Many 
salmon stocks have been decimated. Workers in natural resource 
industries are being advised to look elsewhere for employment. On the 
shop floor of the giant aerospace manufacturing plants in my State, 
workers talk about jobs moving abroad.
  These concerns reach our children, who are dropping out of school in 
record numbers. They no longer feel there is a reason to continue their 
education.
  During the next several months Congress will be considering 
fundamental changes in Federal unemployment policy. I whole heartedly 
agree with the administration's assessment that the current premise for 
our unemployment system has outlived its purpose. Generally, workers 
are no longer laid off only during periodic cycles. The Washington 
State Employment Security Department estimates that about three-
quarters of laid off workers will not be rehired. These unemployed 
workers must be trained in skills necessary for reemployment in good 
jobs to replace the ones they lose.
  Opponents of this scoff at a national policy to stimulate job 
creation. I believe they just don't get it. This country is competing 
in a global economy. Countries that actively develop and create the new 
technologies will have winning companies in the international 
marketplace. In order to succeed, the United States must create jobs.
  The Department of Commerce estimates that by the year 2000, annual 
worldwide sales in products based on 12 key emerging technologies may 
total $1 trillion. According to the Department of Commerce, American 
companies could capture about one-third of those sales.
  So, how are we doing? The Department's report card, comparing the 
United States with Japan, shows us losing badly in the following areas: 
advanced materials, biotechnology, digital imaging technology, and 
superconductors. Other areas where we are merely losing to Japan 
include advanced semiconductor devices, high-density data storage, 
high-performance computing, medical devices and diagnostics, 
optoelectronics and sensor technology. It will take a concerted effort 
to turn this situation around.
  There are ways to reverse the United States' overall decline in 
advanced technology. The National Competitiveness Act calls upon the 
Department of Commerce through the National Institute of Standards and 
Technology [NIST], to create manufacturing technology centers. These 
centers assist States, local governments, and private business 
organizations in training workers in the use of modern and advanced 
manufacturing technologies and the creation of high-performance 
manufacturing. These centers work.
  NIST oversees the Washington Manufacturing Extension Center, in 
Everett, WA. The center's initial goal is to provide technical 
assistance and resources to approximately 2,000 local defense-
dependent, small manufacturers in the area. An owner of a small 
aerospace company was quoted in a local newspaper recently saying his 
23-person company does not have the time, energy, or background to do 
the research, planning, and marketing to keep his company moving ahead. 
He said his business needs the center's technical help to do much of 
the footwork, the phone work, and the digging if it is to succeed.
  The American Electronics Association is one of the founders of the 
Everett manufacturing extension center. The partnership also includes 
the Washington Department of Community Development, Washington State 
University's Cooperative Extension and a matching $3.1 million, 2-year 
grant by NIST. This center does not pick specific winners and losers. 
The center's immediate goal is to focus on 2,000 small and medium-size 
private, defense-related contractors in the area. Eventually, the 
center wants to expand its mission to food processing and forest-
product firms. Technology centers, such as the Everett center, will 
promote manufacturing activity on local and region levels.
  The National Competitiveness Act also authorizes the Advanced 
Technology Program. Under this program, the Department of Commerce 
works with industrial groups to develop large-scale, industrial 
consortia, similar to the Semiconductor Manufacturing Technology 
Institute. As a leader in aerospace manufacturing, Washington State 
appreciates the leading role that the Federal Government plays in 
stimulating industry. Our international trading partners also 
understand the important role of Government support.
  The National Competitiveness Act should be a wake-up call for our 
country. It serves as the foundation of a new activism by our 
Government in job creation for our people. We cannot afford to wait any 
longer for this type of initiative.
  Mr. RIEGLE. Mr. President, I rise in support of S. 4, the National 
Competitiveness Act. I am proud to be an original cosponsor of this 
legislation. This bill reauthorizes and expands a number of important 
technology programs, such as the Advanced Technology Program and the 
manufacturing extension partnership.
  We need to invest in advanced technology, especially in the 
development of new technologies that are emerging as the industries of 
the future. Millions of valuable new jobs can come from these vital 
sectors if we wake-up and prevent their loss to aggressive foreign 
competitors.
  The provisions contained in this bill are especially important to 
reinvigorating our manufacturing base.
  Manufacturing is the heart of our economy; it keeps the lifeblood of 
the economy flowing. Manufacturing is the key to maintaining middle-
class jobs that are the backbone of our Nation--jobs that pay middle-
class incomes with health care protection and pension benefits. These 
are the jobs we are losing. The number of manufacturing jobs, after 
growing on a fairly steady basis since the end of World War II, peaked 
in 1979. Since then, we have lost almost 3 million manufacturing jobs. 
In 1990, only 18 percent of the U.S. work force was in manufacturing. 
In Japan, 24.1 percent work in manufacturing; in Germany the number is 
31.5 percent.
  This loss of jobs has resulted in a decline in earnings for working 
Americans. In 1989, the number of jobs in retail trade surpassed those 
in manufacturing. In retail trade, the average weekly gross earning is 
about $200. In manufacturing, it is about $470. The average real weekly 
earnings for production or nonsupervisory workers peaked in 1972. By 
1991, it had dropped by almost 20 percent, reaching the lowest level 
since the 1950's.
  The result of this trend in wages is frightening. After declining 
steadily since World War II, we are now seeing a dramatic increase in 
the proportion of full-time workers working for wages that put them 
below the poverty line. According to the Census Bureau, in 1990, 14.4 
million. American workers with full-time jobs--18 percent of all full 
time workers--made less than $12,195.

  To reverse this trend, we must increase manufacturing productivity. 
We need to increase the value-added of American production. Better 
products, produced more quickly and at lower cost is way of adding 
higher value. That mean it's not just the number of cars per hour we 
produce that's important--it's also how well those cars are made. To 
move to this higher value-added production requires increasing the 
skills and knowledge of our workers. It also requires providing them 
with the best equipment and infrastructure possible. In essence, it 
means a shift to a strategy of creating high-skill, high-wage jobs 
rather than competing with low skill, low-wage production.
  The creation of high-skill, high-wage jobs must be the central goal 
that drives our economic strategy for the future. High wage jobs 
increase the standard of living and increase investment, which in turn 
generates a new round of economic growth and even more jobs. This is 
the cycle of growth we need to restart. By addressing the critical 
areas of technology and manufacturing, this bill, the National 
Competitiveness Act, is an important step toward our economic renewal.
  Parts of this bill dealing with technology financing issues are of 
particular interest to the Banking Committee, which I chair. I was an 
original cosponsor of Senator Rockefeller's legislation which was the 
basis for this provision. I believe that the technology financing pilot 
program in this bill is an important step. This program will help fill 
the technology financing gap between basic research and the 
commercialization of a new product--a gap pointed out by the Reagan 
administration in the early 1980's.
  The pilot program created in this legislation is based on the 
successful Small Business Investment Corporations [SBICs]. Under his 
program, business will decide--not government--as some have claimed. 
Whereas the SBICs focus on small business, often in the retail sector, 
this pilot program focuses on investments in critical technologies--
investments that are vital for our future economic prosperity.
  Mr. President, there are those on the other side of the aisle who 
have called this bill industrial policy. I wish it was. I think we need 
to have an industrial policy. We need a new Team America approach where 
all of us--business, labor, government, and private individuals 
acknowledge the problem and work together to ensure a strong economic 
future.
  We need strategies to strengthen the auto industry, the aerospace 
industry, the chemical industry, computers and software, 
pharmaceuticals, electrical components and equipment, machine tools, 
telecommunications. These are the industries that are critical for us. 
They provide hundreds of thousands--in the end, millions--of jobs in 
our economy.
  At some point, I hope the Senate will debate and pass a comprehensive 
industrial policy. This bill is not that--it is simply a technology 
policy. In fact, this bill is a continuation of a bi-partisan 
technology policy crafted over the past decade. It is ironic that we 
now see a Republican challenge toward programs that were supported by 
previous Republican administrations and by Republicans in the Senate in 
previous years.
  I hope that we can move forward with these important programs and 
pass this legislation quickly.
  Mr. BAUCUS. Mr. President, I rise today to support S. 4, the National 
Competitiveness Act of 1994.


                    government/industry partnerships

  Not long ago, American manufactured products dominated world markets. 
Our goods were synonymous with quality and technological leadership. 
But over the past few decades we grew complacent. Others improved upon 
our ideas and our products. By the middle of the 1980's, our basic 
industries had clearly slipped into decline. Goods from Germany and 
Japan replaced American products here at home and around the world.
  Since then, our industries have done a great deal to raise their 
productivity and the quality of their products. We in Government have 
worked hard to reduce the budget deficit and thus give American firms a 
larger and cheaper pool of capital. But we can, and we must, do more to 
strengthen our manufacturing base.
  The President's report on the economy finds that for every billion 
dollars in increased manufacturing sales, we create more than 69,000 
high skill, high wage jobs. And conversely, of course, when we let 
manufacturing decline, we let jobs and international leadership slip 
away. So while we have made progress in the past 10 years, we cannot 
take our situation for granted. We must continue to look into the 
future; to support the basic research that will let our industries 
operate most efficiently and develop the best products.


                        a successful partnership

  When Government and industry work in partnership, we succeed. One 
clear example is the case of semiconductors. In the early 1980's, 
collusion and dumping by Japanese semiconductor companies threatened to 
drive the United States out of the semiconductor market entirely. We 
recognized the problem, and took action by working with American 
industry to create Sematech in 1987.
  Sematech is a phenomenal success. Last week the chip industry 
reported that the American share of the world semiconductor market rose 
to 43 percent. For the first time since 1985, we have taken the largest 
share of the world market. This turnaround in the market equates to 
$3.4 billion more in yearly sales and the preservation of 16,500 
American jobs. Because of this recovery, the American chip industry is 
now building three new semiconductor plants costing about $1 billion 
each. They will create 12,000 to 15,000 thousand new jobs.


                    the national competitiveness act

  The National Competitiveness Act takes some of the lessons we have 
learned in our experience with Sematech and our observation of 
successful foreign industries and applies them on a wider scale.
  Of particular importance, are provisions that will make it easier for 
small companies to utilize the most advanced and commercially viable 
technology. One of the most important is the establishment of numerous 
manufacturing technology centers to disseminate knowledge and ideas. 
The information made available may not always constitute a ground-
breaking innovation. But small companies simply do not have the 
resources to seek out the incremental advances that together make a 
product more durable, easier to operate, and easier to sell.
  Today, Japan operates nearly a hundred manufacturing technology 
centers, which allow small companies with limited manpower to get the 
maximum benefit from technological advances. Here in the United States 
we have a grand total of seven. Montana has none, but my State 
understands how important they can be for our economic development.
  Montana State University, for example, is trying to make up for the 
present lack of Federal commitment with a University Technical 
Assistance Program, which provides onsite engineering expertise to 
local firms, helping them with everything from design to production. 
The MSU Entrepreneurship Center directs many other programs to help 
small business. The Agricultural Extension Service, which is something 
of a model for this Act's manufacturing technology centers, serves 
local farmers. Montana's economy benefits immensely from these 
programs, but we will do even better with the help this bill will 
provide.
  The National Competitiveness Act also extends some of our most 
successful Federal research and development efforts. It builds on the 
Advanced Technology Program, to work with companies developing the most 
promising new technologies and assist with basic research. And it will 
help to build the information super-highway. And it will do all of this 
without adding a cent to the deficit.


                            green buildings

  Finally, I would like to call the Senate's attention to a provision 
in this bill which I think is critical. That is the establishment of a 
Federal environmentally sensitive construction program, more commonly 
known as green buildings.

  The use of ecologically sensitive construction procedures, materials, 
and practices obviously has good environmental effects. But it also has 
important economic effects. Recent studies point to natural 
agricultural and wood products as promising sources of environmentally 
sensitive construction materials. In Montana, that means we can add 
value to our agricultural and timber products and develop innovative 
ways to use them.
  The bill creates a competitive process for its demonstration of 
environmental technologies. And I am proud to say that Montana State 
University is poised to compete in this process, with its proposal for 
a green building at the Advanced Technology Park in Bozeman.
  In Montana, we have some of the most wide-ranging temperatures the 
widest ranges of temperature anywhere in the continental United States. 
This variation calls for the most energy efficient technologies 
available. Furthermore, Bozeman's abundant sunshine makes expanded use 
of solar technologies logical.
  Montana, in my completely objective and unbiased view, provides the 
ideal climate in which to demonstrate the virtues of environmentally 
sensitive construction and materials. But wherever we test these 
technologies, be it Bozeman or Boston, the environment and the economy 
stand to benefit.


                        environmental technology

  The green buildings provision brings me to a larger point. The 
National Competitiveness Act is a very good bill. It will help our 
country. But no bill is enough in itself. As we embark upon this new 
path to revitalize our manufacturing base, I think it is essential that 
we consider the environment.
  In the past, new industrial development often came with an 
environmental cost. The factories we built in the 1950's brought jobs 
and growth; but they also brought pollution, and left our generation 
with a huge burden of avoidable health spending and cleanup costs. In 
the past two decades, we have spent $1 trillion dollars on 
environmental cleanup. We must not leave such a bill to the generation 
that will follow us.
  The new technologies which this bill will help develop must be 
environmental technologies; technologies that reduce or reverse the 
impact on the Earth while still boosting economic growth. The only way 
we can do that is to consider the environment from the very beginning 
design stages until the end of the live-cycle.
  S. 978, a bill I have introduced and which the Environment and Public 
Works Committee should send to the floor this year, uses the same 
precompetitive approach as the National Competitiveness Act. However, 
it focuses entirely on environmental technologies. It also makes sure 
the new technologies developed by S. 4 consider the environment. It is 
a partner and a complement to this bill.
  The President has recently sent me a letter in support of S. 978, 
which I now ask unanimous consent to include in the Record. It may not 
be out of place here to mention that when I visited Japan last summer, 
MITI's vice minister for international affairs told me he thought it 
was precisely the kind of effort America needs to remain a 
technological leader.


                               conclusion

  With the end of the cold war, America and the world have entered a 
new era. Like the pioneers who set out for California a hundred and 
fifty years ago, we have scaled a mountain range, and emerged to find a 
new world on the other side.
  In the past decades we faced a challenge to our national security. 
Today we face an economic challenge; the challenge of living and 
leading in a highly competitive global economy. S. 4 will help our 
country meet this challenge by making sure that American technology is 
the best and the cleanest in the world. This is a good bill, it is 
critical to our future, and I urge the Senate to move quickly to pass 
it.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                              The White House,

                                    Washington, DC, March 4, 1994.
     Hon. Max Baucus,
     Chairman, Committee on Environment and Public Works, U.S. 
         Senate, Washington, DC.
         Dear Mr. Chairman: Over the past months, the 
     Administration has worked with the Committee on Environment 
     and Public Works on S. 978, the National Environmental 
     Technology Act of 1993, which you introduced to promote 
     development and use of ``green'' technologies. I am pleased 
     that we have been able to work together with you and your 
     colleagues to refine the legislation, and understand that you 
     hope to take this revised version of the bill to the Senate 
     floor soon. I support your proposed substitute as a 
     legislative framework for the Environmental Protection 
     Agency's contribution to the Administration's overall 
     strategy for promoting environmental technologies. I look 
     forward to working with you and other Members of Congress 
     through the remainder of the legislative process to come to 
     agreement on environmental technologies legislation that can 
     be quickly enacted and implemented.
       The development and deployment of environmental 
     technologies are an essential part of the Administration's 
     commitment to creating jobs and strengthening the economy 
     while restoring and protecting the environment. I want to 
     thank you and the other cosponsors of S. 978 for your 
     leadership in this area. Working together, I believe we can 
     achieve our common environmental and economic goals.
           Sincerely,
                                                     Bill Clinton.
  Mr. BURNS. Mr. President, I rise today to support this amendment 
offered by the distinguished chairman of the Senate Commerce, Science, 
and Transportation Committee to S. 4, the National Competitiveness Act. 
Passage of this amendment allows this body to pass this important piece 
of legislation.
  This amendment is cosponsored by Senators Danforth, Rockefeller, and 
myself.
  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.
  I am supporting this amendment because it cuts the authorization 
level in this bill by over $900 million over 2 years. From $2.8 to 
$1.9-billion for fiscal years 1995 and 1996.
  By agreeing to do this we can save this important legislation that 
moves Montana and our Nation forward in the high-technology world in 
which we live and compete with other nations.
  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. It has a provision for needed research on 
so-called green buildings for environmental sensitive construction 
technologies to be developed.
  For these reasons and many more I want the National Competitiveness 
Act to pass the Senate. But I want to expand on an area I have been 
working on since joining the Senate just 5 years ago.
  With S. 4 the National Competitiveness Act, we are taking two 
critically important steps in creating an advanced, state-of-the-art 
national information infrastructure which will substantially improve 
our economic and social welfare over the remainder of this decade and 
on into the next century.
  If, after reading or watching stories about the so-called information 
superhighway over the last few months, the public is confused about the 
Government's role in promoting a ubiquitous, state-of-the-art, feature-
rich high speed national telecommunications network, one should not be 
surprised. I have included in this bill a number of answers to the 
Government's role in the national information infrastructure.
  With the assistance of Chairman Hollings, I was able to substantially 
modify title VI of S. 4 when it passed the Commerce Committee. This 
bill limits the role of the Government to three areas in building the 
national information infrastructure:

  First, funding basic research and development for high speed 
networks:
  Second, funding leading-edge applications in education, digital 
libraries, health care, manufacturing, and Government information; and
  Third, implementing interconnection standards and interoperability 
protocols to ensure a seamless, ubiquitous network of networks.
  I also included the addition of a NASA education program, funding for 
training and access to network capabilities, digital libraries and 
Government information applications, and other changes.
  But most importantly and significantly, the new title VI contains 
language I requested which states unequivocally a new policy that the 
Government cannot expend funds to build, own or operate networks in 
competition with those networks available in the commercial, private 
sector. This has been a serious concern to all segments of the 
telecommunications and information industries. This bill directly and 
specifically address those concerns with a clear delineation and 
demarcation of the respective roles of the Government and private 
sectors in the building of America's national information 
infrastructure.
  Let me just conclude by strongly suggesting that we now move forward 
with the next critical step in developing a national information 
infrastructure--the creation of a rational, procompetitive, 
proinvestment national telecommunications and information policy.
  I believe that there is a consensus developing that Government has 
become a problem and obstacle in completing a national information 
infrastructure due to the morass of regulatory and legal restrictions 
and barriers that segment and balkanize the information and 
telecommunications industries into protective enclaves created for the 
Old World order in which we had one monopoly telephone company and 3 
broadcast networks. That system is under tremendous pressure and it's 
time to change our national telecommunications policy in a 
comprehensive, wholistic way.
  I want to say to this body and our Nation that passage of this bill 
with this amendment offer by Senator Hollings is vital to our Nation's 
schools, hospitals, libraries, and small companies to hook up to a 
national information infrastructure. It is also vital to my small 
businesses in Montana and small business throughout the United States.
  I urge my fellow colleagues on both sides of the aisle to vote for 
this amendment. This amendment is a way to stop the bickering and to 
move this bill forward.
  I want to salute my good friend Senator Danforth, the ranking member 
of the Commerce Committee, for his excellent debate and good faith 
effort to resolve his differences with his colleagues on the other side 
of the aisle.
  If this competitiveness measure does not pass the Senate, my State 
loses, our Nation loses, this body loses, we all lose.


                 modification to committee modification

            (Purpose: To modify the committee modification)

  Mr. HOLLINGS. Mr. President, I think the first order of business is 
the modification which I send to the desk on behalf of the 
distinguished Senator from Missouri, our ranking member, and myself and 
ask the clerk to report.
  The PRESIDING OFFICER. Under the previous order, the amendment is so 
modified.
  So the modification was agreed to, as follows:

       At the end of the Committee, add the following new section:

     SEC.   . OVERALL AUTHORIZATION LIMIT.

       Notwithstanding any other provision of this act, the total 
     amount authorized to be appropriated under this act shall not 
     exceed $1,900,000,000.

  Mr. HOLLINGS. Mr. President, I move to reconsider the vote.
  Mr. DANFORTH. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  The PRESIDING OFFICER. Under the previous order, there will now be 90 
minutes of debate.
  Mr. HOLLINGS. On the Danforth amendment, I yield 1 second to me.
  I want to thank Senator Danforth and the majority leader and the 
minority leader and friend, the Senator from West Virginia over here, 
the chairman of our subcommittee, and the ranking member, Senator 
Burns, over on the other side for their getting together here and 
working this out.
  I yield the floor so he can present that amendment.


                           Amendment No. 1522

                    (Purpose: To strike section 306)

  Mr. DANFORTH. Mr. President, I send an amendment to the desk and ask 
it be stated.
  The PRESIDING OFFICER. The clerk will report the amendment.
  The assistant legislative clerk read as follows:

       The Senator from Missouri [Mr. Danforth] proposes an 
     amendment numbered 1522.
       On page 58, line 19, of the committee modified substitute, 
     through page 68, line 24, strike everything.
       Amend the last section of the committee modified substitute 
     by striking ``$1,900,000,000'' and inserting in lieu thereof 
     ``$1,800,000,000''.

  Mr. DANFORTH. Mr. President, I note the presence of the Senator from 
West Virginia on the floor, and I know that the Senator from West 
Virginia will have to be out of the Chamber for part of the afternoon 
and he would like to speak in opposition to this amendment.
  Mr. ROCKEFELLER. My dear friend, the distinguished Senator from 
Missouri, is correct, but it is the Senator's amendment to strike. I 
think in spite of his generosity it will be better for him to go ahead.
  Mr. DANFORTH. All right.
  The PRESIDING OFFICER (Mr. Robb). The Senator from Missouri.
  Mr. DANFORTH. Mr. President, let me say that when the Senator from 
West Virginia is ready to speak, if he would let me know, I will be 
happy to accommodate him.
  Mr. President, we have reached an agreement with respect to the bill 
itself to reduce the authorization to $1.9 billion over a 2-year period 
of time. The exact splitting up of how that will be done would be 
worked out presumably in conference. But this does represent a very 
major step forward, and it has required working together and 
accommodation of a large number of Senators, as the majority leader has 
pointed out, and I for one am glad that we have reached this point, 
because now I think we are ready to go forward on a main issue which 
should be brought to the attention of the Senate, and it is the venture 
capital provision.
  That is the substance of the amendment that has been sent to the 
desk. If this amendment is agreed to, the effect of that would be to 
delete the venture capital provision in this legislation and to reduce 
the total amount of the authorization from $1.9 billion to $1.8 billion 
over the 2-year period of time.
  It is important to realize that this venture capital provision is one 
that appears in the bill as an authorization of $50 million for each of 
2 years. How that would be worked out with the change in the overall 
figure remains to be seen. But just for analysis purposes, looking at 
this as a $50 million program in each of 2 years, Senators may say, 
``Well, $50 million a year, what is that? I mean, by Washington terms, 
that does not appear to be much.''
  However, I would call the Senate's attention to pages 20 and 21 of 
the committee report that is on every Senator's desk. Because this 
committee report, on pages 20 and 21, points out the fact that the loan 
guarantee feature in this venture capital provision would allow the 
Government to guarantee loans up to $300 million a year or a total of 
$600 million.
  So this is a major loan guarantee program for very high risk 
businesses--$600 million, if we kept it at the $100 million figure, 
$600 million of loan guarantees.
  I would suggest to the Senate that these are loan guarantees for the 
kinds of business opportunities that venture capitalists get into; 
namely, high risk. And in all the literature put out by the Department 
of Commerce in general support of the provisions of S. 4, it is clear 
that it is the high-risk ventures that are the ventures that are to be 
favored under this legislation.
  So the Senate should understand that this is not $100 million, it is 
a potential of $600 million in loan guarantees for high-risk business 
ventures. And high-risk ventures are ventures that can go sour.
  I would simply ask Members of the Senate, when these business 
ventures go sour and we have voted to create a program to finance them 
with loan guarantees, what then is the explanation that we make to our 
constituents?
  Reading from page 47 of the committee report, the committee report 
says:

       In order to encourage the formulation and growth of 
     civilian technology investment companies pursuant to this 
     section, the Secretary is authorized, when funds are 
     previously made available in appropriations Acts, to--
       (A) purchase or guarantee the timely payment of up to 100 
     percent of the principle and interest as scheduled on, 
     debentures issued by such companies, on such terms and 
     conditions as the Secretary

  That is the Secretary of Commerce.

     deems appropriate pursuant to regulations issued under 
     subsection (e); and;
       (B) purchase nonparticipating or participating, nonvoting 
     preferred securities and issue trust certificates 
     representing ownership of all or part of such preferred 
     securities.

  So, Mr. President, we had an amendment that was offered by Senator 
Brown today on the ATP program saying that there had to be at least 50 
percent participation of the businesses that wanted the R&D grants. 
This is to say that 100 percent of the debentures with no limitations, 
100 percent of the debentures issued can be guaranteed as to principle 
payments and interest payments, and that 100 percent of nonvoting stock 
can be bought out of the taxpayers' funds. This is supposed to be 
venture capital, risk capital, venture capitalists.
  And under the provisions of this legislation, venture capitalists 
would come to Washington and be licensed by the Federal Government--
licensed by a committee created by the Department of Commerce and the 
Small Business Administration, a committee of five individuals to 
license venture capital operations. But where is the venture and where 
is the capital? There is no requirement that the capital be provided by 
the venture capitalists. Maybe some of it would be; maybe some of it 
would not be. One-hundred percent of the indebtedness can be guaranteed 
by the Federal Government. One-hundred percent of the indebtedness of a 
venture capital operation can be guaranteed by the Federal Government. 
That is the program.
  You talk about the Government getting into the world of business, 
this is the Government taking the private sector for totally off the 
hook. ``You do not have to assume any venture capital, venture 
capitalist. Come to us and we will buy up to 100 percent of your 
debentures and we will guarantee them 100 percent. We will buy up to 
100 percent of nonvoting securities. We will guarantee the payment of 
dividends.'' Where is the venture? Where is the capitalism? It is the 
same as the Government making grants and taking risks and making 
investments in the private sector.
  There are people out there who are venture capitalists and if the 
Government does not want to buy 100 percent of the venture capitalist's 
operation--say, it takes 50 percent, 75 percent, whatever. What it is 
saying is some venture capitalists apply to the Department of Commerce 
licensure, they go away empty-handed. Other venture capitalists come 
here and say we would like to apply for our license, and they get a 
license. They are officially sanctioned venture capitalists and they 
are venture capitalists under this scheme who would not be officially 
sanctioned at all.
  Talk about picking winners and losers. We are picking winning venture 
capitalists and losing venture capitalists.
  And then we get down to the particular programs that they are 
venturing their capital on. We are saying that there are some business 
enterprises that are going to receive the Federal subsidy and there are 
some business enterprises that are not going to receive the Federal 
subsidy. Ultimately, this committee of five individuals--three 
appointed by the Secretary of Commerce and two by the Administrator of 
the Small Business Administration--is going to make the judgments as to 
what business enterprises get the subsidies and what business 
enterprises do not.
  I call that industrial policy. I call that very heavy Government 
involvement in what should be marketplace decisions.
  Mr. President, turning to the provisions of the bill, and this is 
section 306 of the bill which we would delete, I would like to call the 
attention of the Senate to various relevant positions.
  Before I do that, I see the Senator from West Virginia, and I would 
yield the floor. My understanding is that the time that he claims would 
come out of those who oppose the amendment.
  Mr. ROCKEFELLER. The Senator is correct.
  The PRESIDING OFFICER. Who yields time?
  Mr. ROCKEFELLER addressed the Chair.
  The PRESIDING OFFICER. The Senator from West Virginia [Mr. 
Rockefeller], is recognized.
  Mr. ROCKEFELLER. Mr. President, what the Senator from Missouri has 
just done is very gracious. He knows I have a 4 o'clock appointment 
that I have to keep, and he is allowing me to speak. I want to say to 
those who might be watching and listening to this debate that it is an 
extremely important debate and that I will be back, hopefully, at about 
5:15. I hope this debate is still going on so I can continue, because I 
strongly believe in this amendment.
  Mr. President, I want to respond to some of the issues that the 
distinguished Senator from Missouri has already raised, and speak in 
anticipation to other points. We are talking about a venture capital 
financing initiative. The opposition seems to have a concern about 
putting the Government in the business of assisting in the financing of 
particular ventures. They have chosen a pilot program, which is what is 
in S. 4--a pilot program--that lasts 2 years and then stops unless 
continued, and is called Civilian Technologies Investment Program. They 
have chosen this to make their point.
  Critical technologies are about the 25 most important aspects of 
advanced manufacturing--lasers, optic fibers, ceramics, composites, 
computer chips, et cetera--that if we do not have and are not 
manufacturing in the 21st century, we are going nowhere economically as 
a country.
  Opponents have questioned whether the Federal Government ever plays a 
role in financing, or should. They have argued that the Government does 
not have the ability or the skills to play a role in financing. They 
argue the Government is destined to lose money.
  Mr. President, let me just point out some of the implications of that 
argument. If we concluded that that Civilian Technologies Investment 
Program is an inappropriate use of Federal resources, then we had 
better also conclude that a whole host of financing programs the 
Government guarantees--subsidies and tax credits--are also an 
inappropriate use of Federal funds.
  We come here to a very critical, basic decision. As one of the 
authors of this initiative, it is--and I say again--a pilot project. We 
are not unleashing some gigantic series of aircraft carrier. This is a 
2-year pilot project. That is all it is. Let me elaborate on what we 
are proposing.
  The Civilian Technologies Investment Program was modeled after the 
Small Business Administration's SBIC, the Small Business Investment 
Company Program, which has been very successful. It was created in 
1958. I have no choice but to use the acronym for that program. SBIC is 
what we call the SBA program because it is well known to people. SBIC 
has a reputation for bringing high-risk products and services to the 
market--and that is what this is all about--at a relatively low risk 
and at a relatively low cost to the Government or the economy.
  SBIC finance projects have been proven, they have spurred 
innovations, advances in technologies, product development and, Mr. 
President, that translates into what the only thing S. 4 is about, 
which is economic growth, new job opportunities, and more 
competitiveness for our country.
  The SBIC Program was reauthorized and restructured under the 
leadership of President George Bush and the SBA Administrator at that 
time, Patricia Saiki. That leads me to this bill, S. 4, and its 
provisions that the Senator from Missouri and I are now debating.
  We followed the leadership of President Bush on this and designed the 
Civilian Technologies Program after his model. Contrary to the 
suggestions made, or that might be made by the opposition, SBIC's are 
not run, and the critical technology investment companies will not be 
run, by the Federal Government. They will be run by private-sector 
venture capitalists, not Government bureaucrats. May I say that again? 
They will be run by private-sector venture capitalists, not Government 
bureaucrats. Additionally, the Government will not be writing checks to 
these companies. We will be providing only a guarantee.
  I want to stop at this moment because the distinguished Senator from 
Missouri made a point, and if I were listening to that and did not have 
the bill in front of me, it would be of concern to me because he 
indicated and, in fact, read the other day the following:

       Therefore, CBO estimates that the $50 million authorized 
     for this program in 1995 would permit the Government to make 
     or guarantee about $300 million in loans.

  And then he stopped. So I would have to assume that Senators and 
their staffs who were watching this debate would assume, ``Good grief, 
we are about to spend $300 million.'' That is not correct.
  The sentence preceding the sentence that the Senator from Missouri 
read, reads as follows:

       The bill would require that the subsidy rate for the loan 
     program not exceed 15 percent.

  The point I am making is that there is no way that the Government 
will spend more than $50 million. It will not happen. There is no way 
that the default rate will exceed 15 percent. It cannot happen. And 
Senator Hollings, as chairman of the Appropriations Subcommittee, will 
be sitting and watching that very, very closely.
  Mr. President, there was also a point raised with regard to the 
budget of the program. I want to point out that the SBIC Program was 
involved with the early financing of a few companies that I believe my 
colleagues just may have heard about. One is called Apple. It makes 
computers. Another is called Nike. I believe it makes sneakers. And the 
other is called Federal Express, and they do a lot of things very 
quickly.
  I want to point out that these programs were financed by SBIC, and we 
can pay the entire Government cost, going all the way back to 1958, 
based just upon those three companies and what they have done alone in 
terms of yields to the Federal Treasury.
  I would like to point out that the tax revenues, again, generated by 
just three companies have more than paid for the entirety of the SBIC 
Programs since its inception in 1958.
  Second, Mr. President, let me point out some other areas of financing 
where the Government plays a role:
  SBA Guaranteed Loan Program; Community Development Corporations; 
Certified Development Corporation; section 503/504 loans. We are in 
this business already. Export-Import Bank loan guarantees.
  The Senator from Missouri is going to produce a letter from some 
venture capitalists later in this debate which will say these companies 
do not want to see this happen. They are very much like the companies 
in the Export-Import Bank who are receiving money and do not want to 
see more competition.
  This plan in S. 4 is aimed at medium- and small-size industries, of 
which there are many in Missouri, West Virginia, South Carolina and 
other places.
  But let me go on. The Export-Import Loan Guarantee Program, 
guarantees for export revolving lines of credit--guaranteed loans by 
the Government, Mr. President. We are doing it. We have been doing it. 
It works. We are there already. This is nothing new.
  Beyond these examples there is a whole level of programs where the 
Government assists in creating a financing market. For example, 
Government-sponsored enterprises: Fannie Mae; Freddie Mac; Sallie Mae. 
Tax subsidies, Mortgage revenue bonds; industrial development bonds; 
general obligation bonds; low-income housing tax credit.
  Mr. President, I ask unanimous consent that this particular piece of 
paper I am holding be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

       Guaranteed Lending Programs (partial list): Small Business 
     Lending Companies; Small Business Investment Companies; 
     Minority Small Business Investment Companies; Small Business 
     innovation Research; Small Business Guaranteed Loans; Export 
     Revolving Lines of Credit; Economic Development 
     Administration Revolving Loan Funds; Export Import Bank Loan 
     Guarantees; Overseas Private Investment Corporation; S.B.A. 
     Sec 503/504 Fixed Asset Loans; Rural Development 
     Administration Loans; Federal Home Loan Banks; Community 
     Development Corporations; Microloan Program; Multi-Family 
     Housing Program; Section 108 Loan Guarantees.
       Government Sponsored Enterprises: Fannie Mae; Freddie Mac; 
     Sallie Mae.
       Tax Subsidies (Partial List): Mortgage Revenue Bonds; 
     Industrial Development Bonds; General Obligation Bonds; Low 
     Income Housing Tax Credit.

  Mr. ROCKEFELLER. There are numerous programs where the Government 
assists in creating a financing market. We are doing it. For example, 
is the opposition to this initiative suggesting--and I would think they 
would have to be to be consistent philosophically--that we reevaluate 
Fannie Mae; that we reevaluate Freddie Mac or Sallie Mae?
  To take it a step further, Mr. President, we use the Tax Code to 
promote financing all the time, and we know that a tax benefit has the 
exact same economic effect as a direct subsidy--not even a loan in this 
case, but a direct subsidy. We use that for certain purposes. The 
Government has been doing it in many areas.
  For example, if we follow the logic of the opposition, we might have 
to eliminate mortgage revenue bonds, municipal bonds, industrial 
development bonds, and the low-income housing tax credit. If we are not 
going to be for one, and we are going to be consistent in philosophy, 
then we should not be doing all these others we have been doing all 
these years.
  Furthermore, unlike any other program, under this program, the 
Government can ``share in the up side.'' Not very elegant language, I 
would agree, but it means that if the CTIP, which is this program we 
are debating, does well, the Government can benefit, bringing dollars 
into the Treasury and reducing the Federal deficit.
  So, Mr. President, unless the opposition is suggesting that we 
eliminate all programs that I have just listed and take the Government 
completely out of the role of financing and creating markets for small 
business in housing and economic development, we ought to get on with 
this longstanding, bipartisan approach and support this section of S. 
4.
  I do not know of any other program than the one we are suggesting 
here where we can get more ``bang for the buck''. For every $1 that the 
public sector contributes to this, we are leveraging $6 of private 
money. I think that is a good deal. The SBIC has gone on since 1958, 
and they have had a default rate of only 4 percent. So then, you might 
say, why do we put it at 15 percent? And here comes about my final 
point, and again I thank the Senator from Missouri. We are talking 
about venture capital in critical technology.
  Mr. President, I would like to tell you that this country is full of 
entrepreneurs and entrepreneurial financing sources which is simply 
where we make funds available for smart ideas, particularly ones 
involving critical technologies like ceramics, optic fibers, 
composites, and all of the things the Presiding Officer knows very 
well.
  But we are now discussing more high-risk efforts than the SBIC funds. 
The SBIC has experience with technology, but they have not had that 
much experience with high technology, and certainly none with critical 
technology types of programs. So that is the reason, even though the 
SBIC default rate is only 4 percent, we chose to be more conservative.
  My final point is simply this. The venture capital market has more or 
less closed down except for the larger level, and when it comes to 
high-risk, critical technologies, it really is not there.
  If Thomas Edison wanted to invent the light bulb these days, Mr. 
President, he would have to bring in Shea Stadium in his arms with all 
the lights on to convince venture capital that the light bulb is an 
idea which might be useful. It has just changed. The venture capital 
market has dried up in the last several years because of the general 
economic condition, because people are more cautious and more 
conservative.
  So I would in a sense almost challenge the Senator from Missouri, my 
good friend, Senator Danforth, to come up with any other program of the 
Government that gives you the same bang for the buck and at the same 
time takes on what this Senator considers to be the single most 
important manufacturing effort this country has to undertake. When the 
year 2000 arrives, we are not only doing best basic and applied 
research, but we are commercializing and taking to market the critical 
technologies that will make us as an economic force in the future.
  Mr. President, I yield the floor, once again thanking my friend from 
the State of Missouri for his very clear and obvious courtesy.
  The PRESIDING OFFICER. Who yields time?
  Mr. HOLLINGS. Mr. President, one thing that should be emphasized is 
the fact that this has been worked out with the Small Business 
Administration. I cannot overemphasize that, because I happen to have a 
particularly high regard for Erskine Bowles, the Administrator of the 
Small Business Administration.
  My particular association with it is that we handled the 
appropriations last year. The SBA, as is emphasized now by the 
distinguished Senator from West Virginia, has really been running out 
of money. Everybody knows what the banks have been doing for the past 
couple of years.
  And in that light, we ran out of money for the loans, and we put in, 
in April of last year, another extension, an emergency provision for 
$750 million in small business loans.
  Now, that was not directed to technology. That could go to 
restaurants; it could go to clothing stores, or whatever else. But I 
want you to know that this Senator does have a slight feel for the idea 
of responsibility, not just a pilot program to be given to the 
Secretary of Commerce burning a hole in his pocket.

       The pilot program shall be operated under the direction of 
     the Department of Commerce Small Business Administration 
     Venture Capital Licensing Committee, and that committee shall 
     consist of three Department of Commerce designees appointed 
     by the Secretary, one of whom shall be the Under Secretary 
     for Technology.

  Now, we really started off on the right foot there. I am sure the 
Senator from Missouri will agree. That is Ms. Good, Under Secretary 
Good, in charge of technology. She headed up the entire technological 
and research effort for Allied. She was President Reagan's appointee as 
Chairman of the Board of Directors of the National Science Foundation 
Board back about 10 years ago--thoroughly experienced, thoroughly 
reliable. So she serves as the Chairman of it.

       Two of the Secretary's appointments shall be technology 
     experts, at least one of whom shall also be a finance and 
     investment expert.

  So we have the credibility further enhanced with that particular 
requirement. And then, of course, two Small Business Administration 
designees appointed by the Administrator of the Small Business 
Administration, who shall be finance and investment experts.
  Now, that cannot be overemphasized, because the Senator from Arkansas 
[Mr. Bumpers] the chairman of the committee, and the ranking member, 
the Senator from South Dakota [Mr. Pressler] on our committee, had 
immediate misgivings: Wait a minute; what are we doing here? We have 
the SBIC. We have the loans; let us not start another one.
  However, with the need here on technology, with the particular 
emphasis that is the intent of S. 4 to emphasize technological loans, 
then we wanted to at least institute this as a pilot program.
  You say why? You have heard from two venture capitalists already with 
differing views. But I try my best to listen and learn.
  One thing just impresses this Senator who is outside the realm of 
venture capitalism, and I quote from Alan Wolfe in his book on 
``Improving United States Trade Policy'' back some 6 years ago. He 
served as the Special Trade Representative's Assistant to the 
Ambassador during the seventies. He has credibility on both sides of 
the aisle and with experts in the field of trade all over the country. 
I quote from page 563.

       In 1990, a Wall Street analyst commented to a group of U.S. 
     semiconductor executives that ``The goal of people investing 
     in stocks is to make money. That is what capital is all 
     about. It is not a charity. I cannot tell my brokers, gee, I 
     am sorry about your client but investing in the semiconductor 
     industry is good for the country.'' While this individual was 
     stating a truth so obvious that it verges on the banal, he 
     was touching on a fundamental dilemma confronting U.S. 
     industry today. In light of the investment sentiment 
     expressed above, how is a company to maintain the level of 
     investment needed to remain competitive over the long run, 
     particularly if there is no prospect of a short run payoff or 
     if foreign competition has destroyed the prospect of earning 
     a return on the investment? A few U.S. firms, family-owned 
     and managed companies like Motorola and Corning, and some 
     very large firms like IBM and GE, have on occasion proven 
     capable of undertaking long-range strategic investment on a 
     regular basis, and in some cases meeting foreign below-cost 
     price offensives head-on for a sustained period. Moreover, 
     however, a company's internal investors, the executives who 
     allocate capital, have no choice but to invest in areas that 
     are likely to produce a high return on investment over the 
     short run. They know they are accountable to lenders and 
     shareholders who can simply redirect their investments 
     elsewhere if the firm persists in simply committing to areas 
     where returns are low or negative or are perceived to be 
     forthcoming only in the distant future.

  Then there is a note to this particular section:

       ``The New York Times noted on February 6, 1987 that U.S. 
     venture capital investment, which had been an important 
     source of capital for U.S. high-technology industries, was 
     shifting away from high tech to areas where greater returns 
     were anticipated, such as leverage buyouts of existing 
     companies, pizza shops, athletic apparel concerns,

and on down as he lists them there.
  That gives you a feel for the problem that S. 4 with this particular 
provision is trying to address. Specifically, again President Bush's 
Competitiveness Policy Council, I quote from it:

        Entrepreneurs and small companies with exciting new 
     technologies often have trouble obtaining the financing 
     needed to commercialize products and grow their business, and 
     frequently end up licensing their technology to more patient 
     and deep-pocketed foreign companies.

  I remember well the vice president of GE came into my office some 
years back. We had a competition back in the 1970's for low-cost 
housing on military bases. They had won the competition out at 
Vandenberg. You could build at that particular time a house with three 
bedrooms, a bath and a half, a dining room-kitchen combination, for 
$17,500. But it had all the new things. It did not have copper gutters. 
They were reinforced with fiber, Owens-Corning fiber, and the likes of 
that. It had a special kind of roof with a 20-year guarantee.
  They had won the competition. But then going around trying to sell 
the production of it with all the zoning laws and regulations, they 
just gave up and sold it to the Japanese, and went over and started 
building the houses in Saudi Arabia. The GE vice president had his big 
briefcases. We were good friends. He said, ``I am just going over to 
the Saudis. We finally got it off, and the Japanese have picked it 
up.''
  So there is the problem, particularly for small companies. These are 
the kinds of things that we are confronting in S. 4.
  And we go to the track record of the small business-licensed 
investment corporations.

       Since 1958, the SBA-licensed SBIC's have invested more than 
     $9.7 billion in small businesses. Two features are central: 
     Most of the money is privately raised, and venture 
     capitalist--not Government--officials decide which small 
     business to invest in.

  We will benefit from the objectivity and expertise of the Under 
Secretary, Mary Lowe Good. She is not a partisan Democrat. She will not 
be giving out moneys to California and grants willy-nilly. She is very 
conscientious about her own credibility and she is going to be the 
chairman of it. Other experts are involved from the SBA, and Mr. Bowles 
will be watching it, and again on a merit basis, a peer-review basis. 
You are going to have the Senator from Arkansas on our Appropriations 
Subcommittee, Senator Bumpers, the chairman of the SBA Committee here 
on the Senate side, and this particular Senator. We do not want to 
start a boondoggle. We are going to watch this because I am selfish 
about this. If this initial program were subject to abuse and 
politicization, then the entire program would fall, the program that is 
just getting started.
  So I am just as concerned as the Senator from Missouri or anybody 
else that this must not turn into pork barrel, we must not throw money 
away. The multiplying effect is absolutely critical. That is the key in 
all of these SBA loans.
  So we are not giving out $600 million or $300 million. It is only a 
$50 million pilot project that generates that $300 million in one year 
we hope, and $300 million in the second year we hope, or $600 million. 
But if we get to the $600 million, it would be a success story. That is 
the whole thrust of this particular provision by the Senator from West 
Virginia.
  I yield the floor. I reserve the remainder of my time.
  The PRESIDING OFFICER. Who yields time?
  Mr. DANFORTH addressed the Chair.
  The PRESIDING OFFICER. The Chair recognizes the Senator from 
Missouri, Senator Danforth.
  Mr. DANFORTH. Mr. President, as indicated by the Senator from West 
Virginia, I have a letter from the National Venture Capital Association 
signed by Allen Neece, their legislative counsel. Mr. Neece says for 
the National Venture Capital Association:

       This letter is to confirm that the National Venture Capital 
     Association is adamantly opposed to the venture capital 
     provision contained in section 306 of S. 4.

  I ask unanimous consent that the letter be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                         National Venture Capital Association,

                                   Washington, DC, March 15, 1994.
     Hon. John C. Danforth,
     Russell Senate Office Building, Washington, DC.
       Dear Senator Danforth: This letter is to confirm that the 
     National Venture Capital Association (NVCA) is adamantly 
     opposed to the venture capital provision contained in Section 
     306 of S. 4. As the President-Elect of NVCA, Patricia 
     Cloherty, stated in a letter dated last Friday, March 11, to 
     all of your colleagues, the creation of still another 
     government backed venture capital program is out of order. 
     Not only is it redundant of an almost identical program 
     authorized two years ago, but because of its emphasis on so-
     called ``critical technologies,'' it smacks of a government 
     directed industrial investment policy. Similar attempts have 
     been made in the past going way back to the Eisenhower 
     Administration and all have ended in abject failure.
       Section 306 is a no more enlightened program than its 
     predecessors; and we, therefore, recommend that this section 
     be struck, or failing that resolution, that Sectors vote 
     ``nay'' on final passage.
           Sincerely,
                                                      Allen Neece,
                                              Legislative Counsel.
  Mr. DANFORTH. Mr. President, I also have a letter from William 
Sahlman, who is professor of business administration at Harvard 
Business School. I would like to read just a couple of excerpts from 
the memorandum to me from Professor Sahlman:

       Recently, a number of legislative initiatives have been 
     launched that would have the government play an active role 
     in the creation of venture capital firms. The underlying 
     rationale is simple: There is, according to the sponsors, a 
     shortage of risk capital in the United States, particularly 
     capital aimed at early-stage ventures.
       As evidence, people point to the decline in professional 
     venture capital commitments in the most recent 8 years.
       I, personally, believe no such shortage exists. I have yet 
     to see a good idea and team not get funding, and I have seen 
     many bad ideas (and/or bad teams) get funding.

       I should also note that all attempts by the Government to 
     direct investment have enriched the wrong people--lawyers, 
     accountants, and promoters. The record for State initiatives 
     in venture capital is disastrous. Loan guarantees are like 
     heroin: They give promoters the upside, leaving the taxpayer 
     holding the bag if the investment doesn't work out--not my 
     idea of a sensible policy.
  I ask unanimous consent that the entire memorandum from Professor 
Sahlman be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

     To: Senator Danforth.
     From: William A. Sahlman, professor of Business 
         Administration, Harvard Business School.
     Subject: Government sponsorship of venture capital.
     Date: March 15, 1994.
       Recently, a number of legislative initiatives have been 
     launched that would have the government play an active role 
     in the creation of venture capital firms. The underlying 
     rationale is simple: there is, according to the sponsors, a 
     shortage of risk capital in the United States, particularly 
     capital aimed at early-stage ventures. As evidence, people 
     point to the decline in professional venture capital 
     commitments in the most recent eight years.
       I personally believe no such shortage exists. I have yet to 
     see a good idea and team not get funding, and I have seen 
     many bad ideas (and/or bad teams) get funding. The level of 
     professional investment in early-stage ventures in the past 
     few years is a result of the fact that returns to venture 
     capital investing were meager during this period, approaching 
     0% per year. It wasn't a productive place to put capital to 
     work. One reason returns were low was that there were too 
     many companies being funded in each industry, which resulted 
     in competitive mayhem and poor fundamental results.
       In the most recent period (1991 to the present), a 
     significant increase in early-stage investing has taken 
     place. Why? The fact that investors exited the business in 
     the late 80s and early 90s created an attractive opportunity 
     to invest. Lo and behold, venture capital investors came back 
     with a passion. In this regard, to the degree that government 
     policy creates artificial inducements to invest, it will 
     ultimately result in poor returns and exit from the business.
       I should also note that all attempts by the government to 
     direct investment have enriched the wrong people--lawyers, 
     accountants and promoters. The record for state initiatives 
     in venture capital is disastrous. Loan guarantees are like 
     heroin: they give promoters the upside, leaving the taxpayer 
     holding the bag if the investment doesn't work out--not my 
     idea of a sensible policy.
       I do believe that government policy has a big impact on the 
     high potential entrepreneurial sector. Right now, the trend 
     seems to be to move in the direction of a European social 
     system, which makes it costly and risky to employ people. We 
     are rapidly building a system that penalizes firms that 
     exceed fifty employees. We are trying to destroy Sub-S 
     companies that are successful.
       I have appended an editorial I recently wrote on government 
     policy. I hope this is useful. This letter represents my 
     ideas, not necessarily those of my employer.
  Mr. DANFORTH. Mr. President, turning to the loan guarantee provision 
in this legislation, I will read from the committee report, and the 
Senator from Missouri did not write the committee report. Let me just 
read the relevant portion from it:

       The bill would require that the subsidy rate for the loan 
     program not exceed 15 percent. Therefore, CBO estimates that 
     $50 million authorized for this program in 1995 would permit 
     the Government to make or guarantee about $300 million in 
     loans.

  In other words, $50 million is 15 percent of $300 million, and 
according to the way CBO scores this, a $50 million authorization 
permits $300 million in loans. And it follows, as day and night, that 
$50 million a year for 2 years, or a total of $100 million in 
authorization, would yield $600 million in loans. That is the exposure 
under this legislation. It is not $50 million or $100 million; it is 
$300 million, or $600 million in loans. To whom? I intend to pursue 
that in just a minute.
  Mr. President, reading from some excerpts and commenting on them from 
the section which my amendment would strike from the bill, this 
provision in the legislation provides that a pilot program, as it is 
called, shall be operated under the direction of the Department of 
Commerce-Small Business Administration Venture Capital Licensing 
Committee. That is the name of the new organization that is created--
the Department of Commerce Small Business Administration Venture 
Capital Licensing Committee. It is referred to throughout the rest of 
the bill as the licensing committee.
  Then it says that the membership consists of three people appointed 
by the Secretary, and they include, as the chairman pointed out, the 
Under Secretary for Technology, and also two people appointed by the 
Small Business Administrator, and an investment expert is supposed to 
be included in that list from both Commerce and SBA.
  In other words, here is a committee of five people that is the 
licensing committee for venture capital operators. We say, well, please 
do not worry about this licensing committee, because we absolutely 
promise you that these are smart people. We do not have dummies here in 
Washington. We do not have fools here in Washington. We have geniuses. 
And we guarantee that the people who are going to do the licensing of 
these venture capital operations are smart. So that is good news.
  Then it goes on to say that the licensing committee may license 
pursuant to joint regulations. So, obviously, we are going to have 
regulations, and they are on the next page. But we have to have 
regulations. How do we operate Government without regulations? And how 
can we operate our licensure system for venture capitalists unless we 
have regulations, joint regulations, by the Commerce Department and the 
Small Business Administration for how we are going to go about the 
business of licensing venture capitalists?
  ``Activities of licensees. Each civilian technology investment 
company''--these are the venture capitalists who are the beneficiaries 
of the largess of the taxpayers--``company licensed under this section 
may provide venture capital and loans to eligible technology firms * * 
*''
  ``Eligible'' is defined, incidentally, in this section.
  ``* * * and eligible joint ventures in such manner and under such 
terms as the licensee may fix in accordance with''--hold onto your 
hats--``joint regulations.''
  Then it says that the type of financing to be provided ``shall be 
determined by the licensing committee.'' ``Each civilian technology 
investment company shall have authority to borrow money and to issue 
its debentures.'' These are the joint venture operators.
  So if you are licensed, if you are a civilian technology investment 
company, a venture capital operator, then you have the authority to 
issue debentures, promissory notes, securities and other obligations 
under such general conditions and subject to such limitations and 
regulations as prescribed in the joint regulations. This is called a 
partnership. This is what we call a Government-business partnership. We 
have the licensing committee --smart people--and we have regulations on 
how it functions. We issue the licenses and tell them how they can 
finance themselves.
  The licensing committee is authorized to the extent the funds are 
made available to the Department of Commerce in appropriations acts to 
transfer such funds as may be necessary to the Small Business 
Administration to purchase or guarantee the timely payment of all 
principal, interest, and dividends, as scheduled on debentures or 
participating, nonvoting preferred securities issued by such companies.
  I repeat. The licensing committee has the authority to purchase or 
guarantee the timely payment of--please note the following word--all 
principal, interest, and dividends as scheduled on debentures or 
participating, nonvoting preferred securities issued by such companies.
  The Small Business Administration is also authorized in accordance 
with sections 321 and 322 of the Small Business Investment Act of 1958 
in regulations promulgated thereunder to issue and guarantee such trust 
certificates as are necessary and appropriate to provide funding for 
qualified civilian technology investment companies, that is an open-
ended authority to loan or guarantee the loans for up to 100 percent of 
debentures to be issued.

  Now, the licensing committee shall require that any civilian 
technology investment company licensed and assisted under this section 
shall--and there are several requirements:

       3. Demonstrate to the licensing committee credible 
     procedures for ensuring that investments are made in critical 
     technology projects for which eligible technology firms 
     cannot obtain necessary financing solely through commercial 
     capital markets.

  The Harvard professor says that if they are good ideas they can get 
funded. This says if you cannot get funded, if you go into the 
marketplace and you cannot get funded in the marketplace, then that is 
a condition precedent to getting funded under this operation.
  I think that means that if you have an idea which cannot hack it--you 
have an idea out there, nobody likes it, you try to peddle it, you try 
to get money, you try to get capital, you cannot hack it, you cannot 
make it, the private sector does not want it, what do you do next?
  Well, it turns out that that is good news not bad news. It is good 
news that nobody likes your idea. Come to uncle. We like bad ideas. If 
you have got a bad idea out there, we will fund it. In fact, if it is a 
good idea we will not fund it. That is how I read that section.
  Mr. President, I simply point out the fact that if we are going to 
get in the business of trying to fund those good ideas in research and 
development, I do not think that it should be something that is done by 
Government. I think that is what the private sector is for.
  The Harvard professor, whose memorandum I just submitted for the 
Record, believes that there is not a shortage of venture capital money. 
Some say that there was a decline. There was a decline--there is no 
doubt about it--for a couple of years in the few years in the late 
eighties and early nineties, and people have speculated why that is. 
Some people believe that it is because in the mid 1980's there was a 
excess of venture capital funds. Some believe it has to do with the 
termination of the capital gains differential. I am not going to get 
into that speculation or that debate. But I do believe that the current 
state of affairs is that there is not a shortage of venture capital 
from the private sector.
  But even if there were, even if there were a shortage, that would 
seem to me to be a marketplace matter, not something that we 
pontificated on here in Washington. The availability of capital--the 
money is out there in the marketplace in a capitalist system. That is 
how the marketplace functions. If there are good ideas, there is 
capital to fund good ideas. If the ideas are not any good, then capital 
will not subsidize those ideas.
  We are saying in this program we are going to have a licensing 
scheme, we are going to have exposure for up to $600 million of 
Government loans or loan guarantees for ideas that by definition cannot 
make it in the marketplace. It seems to me, Mr. President, that this is 
a direction in which we should not go.
  The PRESIDING OFFICER (Mr. MATHEWS). Who yields time?
  Mr. HOLLINGS. Mr. President, how much time do I have remaining?
  The PRESIDING OFFICER. The Senator from South Carolina has 16 minutes 
and 20 seconds.
  Mr. HOLLINGS. And the other side?
  The PRESIDING OFFICER. The Senator from Missouri has 17 minutes and 
51 seconds.
  Mr. HOLLINGS. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. BURNS. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Who yields time?
  Mr. HOLLINGS. Mr. President, I yield to the distinguished Senator 
from Montana.
  Mr. BURNS. I thank the Senator very much.
  Mr. DANFORTH. I was hoping to have the opportunity to yield to the 
Senator.
  The PRESIDING OFFICER. The Senator from Montana is recognized.
  Mr. BURNS. Mr. President, the Senator from Missouri makes a very 
valid point when we start talking about financing new ideas. That part 
of this particular piece of legislation is designed for small 
businesses. And I can probably cite as many situations on new ideas, 
new technologies, and new products that have been designed, drafted and 
thought about and really put together on America's farms.
  One of them I think would be in the eastern part of North Dakota, by 
a good friend of mine, and the idea was an excellent. It had to do with 
clean air into diesel engines, how we filter that air. He just did not 
have enough money to put that idea into a situation of research and 
development. So when presented to another entity that did have the 
money, the idea was no longer his.
  So what we are talking about here is not the Government in 
competition with other venture capitalists, because there is a specific 
part of this bill that prevents that from happening. We are talking 
about a situation that is designed sort of like the Small Business 
Investment Company Program which was created way back in 1958 in 
response to a lack of financing for small entrepreneurial businesses 
there. This was just a rifle shot that would probably help facilitate 
that idea and to get it off the ground. The SBIC programs were 
responsible for getting, in the early stages of companies like Apple, 
Nike, Federal Express, and those kind of companies, a new idea, a new 
industry to allow it to flourish.
  With the tax situation as it now is because we continue to tax and 
tax and tax, for small business, Mr. President, it is pretty hard to 
amass capital and to take that capital and to promote an idea and to 
get it into the marketing place. If we are going to take, we have to 
also, maybe, reinvest--maybe reinvest with the small idea that grows up 
to be great ideas.
  I can tell you my own kind of a situation in Montana. I can remember 
when I had this silly idea about the radio business and television 
business and trying to get started. But I had some options. I was cut 
off from a couple of my options to prevent me from going into business, 
because the people who owned the competitive business also owned the 
vehicle with which my business had to travel. But I had another option 
or two, and I took advantage of those options and went on from there to 
be able to provide for me and my family as I thought I should, and do 
what I enjoy doing and, of course, that was in the farm broadcast 
business. I still look back on those days, wishing I was back in it.
  Nonetheless, it is the time when, if we are not going to allow that 
businessman to amass money, we are going to tax it, we are going to 
have to help him in other ways.
  A young man coming out of college, full of hope, believing in this 
country, the fairness of this country, is going to find out that if his 
idea is a good one, he is going to have a pretty darn hard time hanging 
on to it and trying to develop it at the same time so that he can 
improve his lot in life.
  So unlike any other program under the CTIC Program, the Government 
can share in the upside of the commerce of this country. In other 
words, if the CTIC does well, the Government can benefit, bringing 
dollars to the Treasury and also reducing a little bit of our deficit. 
It has to be handled in a proper way.
  So I would support this part of the bill and would not like to see it 
weakened any more at a time when new ideas and new technologies are 
abounding and should be allowed to flow.
  Mr. President, I remind my colleagues that venture capitalists 
participating in a program can supplement their own private investment 
capital with this funding. They could be commingled, giving more market 
power to whoever wants to invest.
  So I oppose stripping this from this piece of legislation and I will 
vote to do so.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. HOLLINGS. How much time does this side have remaining?
  The PRESIDING OFFICER. The Senator from South Carolina has 9 minutes 
and 26 seconds.
  Mr. HOLLINGS. I yield myself such time as is necessary.
  Mr. President, I am trying to determine who belongs to the Venture 
Capital Association. We are now in the sixth day of debate, and we 
finally have located someone who opposes a feature of this particular 
bill; whereas, we have on hand all of industry, all of technology, all 
of education, all in strong support.
  They support it because not only does it aim at developing our 
technology, it would also move forward here with the Small Business 
Administration, the SBIC, and others.
  The argument is made by my distinguished colleague, the ranking 
member on our committee, that the letter from the Venture Capital 
Association is an argument against SBA, period, the Small Business 
Administration. I am confident they do not like that. I am confident 
they do not like the SBIC. They do not like any part of it. Because, 
yes, their interest is to grab all the capital that comes to them and 
they manage it.
  But we have found that the private market is the wrong place to leave 
these things because we would not have any of these businesses. Think 
back over the long list of speeches in support of SBA and SBIC in this 
body in the last 2 years.
  The SBIC Program creates business and business ownership 
opportunities. The SBIC financing has contributed to the creation of 
thousands of new companies between 1959 and 1991. The SBIC has financed 
70,000 small business concerns in approximately 100,000 financing 
transactions, disbursing approximately $9.7 billion, of which $4.6 
billion was private capital and $3.1 billion was funded by SBA through 
debentures preferred stock. It is a generator. It creates jobs.
  These SBIC finances have created jobs in a broad spectrum of small 
businesses, from ice cream companies to computer companies. And there 
have been some 570,000 jobs in the direct financing of the SBIC.
  Now what we are trying to do is get over to the technology part. It 
says that more than one-half billion dollars of direct taxes have been 
paid by the SBIC's to the Federal Government. And the partnership and 
corporate SBIC's are paid in excess of $800 million in dividends for 
the owners. I could go down, on and on.
  We have a real winner here.
  But what comes? The Venture Capital Association. And I have been on 
the budget end of this thing since we organized the Budget Committee 
back in 1974. I have never seen a letter from the Venture Capital 
Association saying, ``Please, Senator, pay your bill, because you have 
the sharp elbows of Government out there financing your deficits and 
debts, taking out from the market the venture capital, another $300 
billion this year.''
  I am not talking about a little, measly $50 million pilot program. 
But we were getting up to $400 billion deficits. And we have been 
running deficits again. Of course, they said the deficit was going down 
to $176 billion next year. But then, add on another $100 billion that 
we are using from the Social Security fund, the Highway fund, the 
airport and airways fund, the Federal Finance Bank fund, the Medicare 
Fund, and others, and you still are up around $275 billion.
  Sharp elbows of Government kicking away at venture capital? I have 
never seen that crowd write this Senator, working on the Budget 
Committee, that we are taking away billions. We are taking away a 
little mealy-mouthed $50 million in a pilot program, studied well, 
conceived well, a well-audited, well-directed program. That is part of 
this. That is the whole point.
  We do need for the IBM's, the GE's, and the Motorola's to get into 
technology. They can get governments to move, as we have just done with 
the cellular radio. We have not been able to do anything with Japan. 
But Motorola is powerful enough on just that one thing, cellular 
radios, to move the Government of Japan. In the morning paper, it is 
moving.
  But the small businesses that generate the jobs in this country, that 
really create the opportunity, these are real success stories that 
should not be foregone in the adoption here now of S. 4. It is 
fundamental. It is just a pilot program. It is well guarded against any 
kind of abuses. We will be watching that.
  It phases out in just a 2-year pilot here. So that would be the only 
authorization, just for 2 years, to see how this can work.
  It is really the best part of this entire bill, in our opinion, and 
should not be stricken from the bill here because of the opposition of 
this single group, the Venture Capital Association.
  Heavens above, I would like to see the board of directors of that 
crowd. I want to know if it includes executives of small business. But 
all the businesses, the National Manufacturing Association, right on 
down the list, endorse this bill with this particular provision.
  I reserve the remainder of my time.
  The PRESIDING OFFICER. Who yields time?
  Mr. BRADLEY addressed the Chair.
  Mr. DANFORTH. Mr. President, I yield such time as he requires to the 
Senator from New Jersey.
  The PRESIDING OFFICER. The Senator from New Jersey is recognized.
  Mr. BRADLEY. Mr. President, I rise in support of the effort to strike 
this provision from the bill. I do so because I think it is in the 
interest of the American taxpayer and because it will reduce the budget 
deficit if we eliminate this section of the bill.
  We can have a legitimate debate over what the Government can and 
cannot do well. Running a venture capital operation is, however, 
something I am fairly sure that the Government cannot do well.
  Before the Government steps into the marketplace, I think we have to 
think there is some problem that the private sector cannot, on its own, 
solve. There should be some market failure that we need to address.
  My question is: What is the problem? What is the market failure here?
  Before we go forward with this program, ask yourself just a couple of 
questions: Would you put your own personal money in a Government-run 
venture capital program? Would you risk your pension funds on the 
ability of a technology licensing committee to find the right 
technologies?
  Would you risk your child's education bonds on the ability of 
bureaucrats to outperform markets?
  If you would not, then you should not be voting for this program. You 
should not be wagering taxpayer money on an ill-advised effort at 
industrial policy.
  The goal of this program is ``to stimulate and expand the flow of 
private capital to private companies.'' And the means of doing that is 
a 100 percent guarantee of principal and interest --100 percent.
  Let us be a little more serious about this. Profits stimulate and 
expand the flow of private capital. A growing economy and low interest 
rates stimulate the flow of private capital. The dreams and genius of 
entrepreneurs stimulate the flow of private capital. Government 
bureaucrats reading business plans and interviewing would-be Bill 
Gateses will not stimulate or expand the flow of private capital. Given 
a choice, I will stake my faith in markets and not in bureaucrats.
  I simply do not believe that we should be attempting to direct the 
flow of venture capital. Who is to make the decision on which 
technologies, let alone which entrepreneurs, to back--Government 
bureaucrats receiving applications? There are thousands of venture 
capitalists around the Nation attempting to find the next Microsoft. 
They are all over. They are looking, they are interviewing companies, 
they are interviewing this guy in his garage, they are interviewing 
that guy in this State or that State. They are trying to find the guy 
where, if they invest in him, they will get the payoff. There are 
millions of investors out there, and they are not limiting themselves 
to any given set of technologies or industries. They are guided by one 
thing: The profit motive, the best incentive yet we have found at job 
creation.
  Do we really think that Government is going to do a better job of 
finding the next breakthrough industry or the next breakthrough product 
or the next breakthrough idea than all these millions out there looking 
to find it so that they can make a lot of money?
  Mr. President, venture capital is risk-based capital. What does that 
mean? It assumes that out of every 10 investments, 7 or 8 will go bad. 
That is why it is risky. Seven or eight will go bad; two might make it.
  My prediction is under this program such a number--two or three--
might be a tremendous success. But what about the seven or eight that 
fail? The taxpayer is on the hook.
  We are not going to eliminate the risk in the market. We should not 
even try. What we are going to do is squander $50 million in loan 
guarantees that could go to guarantee about $300 million in loans. I 
think that that is too much. If we have these funds to spare, instead 
of putting them in some bureaucracy to be loaned out to whomever can 
get to the bureaucrats, I say we ought to reduce the budget deficit. It 
is as simple as that.
  With that said, Mr. President, I want to say I think I have an idea 
where this program came from. Not the individual but an idea of the 
mindset that generated this program. It came from, I think, well-
meaning people. It came from individuals with the highest motives. It 
came from people who want to see America compete. It came from people 
who believed that we should have every possible advantage in the 
worldwide competitive marketplace. It came from people who are 
patriotic and who want America to win.
  But, Mr. President, what is the reality after this provision passes, 
after it was written by those with the highest motives? Then it is 
turned over to the lobbyists, to all the people who will flood the 
department with various proposals. It will, of course, under the 
provisions of the law, be judged on the highest meritorious basis, 
according to X, Y, and Z criteria, designed by the following 
subcommittees of the Technology Review Committee and advising it 
pursuant to the seven sets of regulations that each one will have to 
comply with.
  The lobbyists, or those who have lobbyists, will have an advantage 
because they will know how the system works. And the result is going to 
be, I guarantee, if this passes: I think my New Jersey venture 
capitalists are better than the venture capitalists of any other State, 
and I am going to be knocking down the door of that technology 
committee saying, give my New Jersey venture capitalists the money for 
this great program.
  Mr. President, every other Senator is going to be doing that. And to 
think that this is going to be an allocation based solely--solely--on 
the technological criteria, I think, is to live somewhere other than 
Washington, DC.
  Even during the course of this debate, I had a Senator come up to me 
and say, ``This is an important bill. My State does very well under 
it.''
  I said, ``How do you know your State does very well under it?''
  The answer was because that Senator's particular State is well enough 
placed, well enough represented, effectively enough represented that 
that Senator believed that an administration, a bureaucracy, could not 
help but see the importance of that State politically.
  So, Mr. President, I believe that this program should be rejected. 
Research and development is enormously important. Venture capital is a 
big industry in this country. But there is no shortage of venture 
capital. Venture capital funds increase when the economy is good and 
they decrease when the economy is bad.
  In 1991, there was about $1.2 billion in venture capital in America 
invested that year. We were in the middle of a deep recession. In 1993, 
the recession ended; we were coming back out, robust growth. What 
venture capital was available? About $2.5 billion. This is no mystery. 
When the economy is well, there is more venture capital, and when the 
economy is poor, there is less venture capital.
  Then, of course, if we are looking for precedents, we will hear 
Senators talk about, ``Well, if we had only done this and only done 
that,'' as if there is some advantage for us trying to be like another 
country.
  My point is, why can we not just be America? Venture capital in 
America is a unique phenomenon. They do not have it in Germany. The big 
banks control it. They do not have it in Japan. The cartels and the 
financial institutions and the Government control it. Why can we not 
just allow the venture capital community of America to do what is does 
so well, which is to find a new idea and fund it as opposed to the idea 
of a Government bureaucracy in competition?
  Sometimes it is good to argue from some analogy, and many Senators 
have stood and argued the importance of this kind of thing because 
other countries have had it. Primarily they point to Japan, although 
Russia--no, it is not that bad. Japan.
  Well, indeed, a couple years ago we had the big debate over HDTV. 
Remember that debate, Mr. President? HDTV. Why was not the United 
States Government subsidizing the development of HDTV that was going to 
be taken over by the Japanese. The Japanese had the Government in there 
subsidizing it and they had the technology of the future and they were 
going to take over the whole television industry because of this 
technology with Government support and Government leadership.
  Well, I wish I had the videotape of the press conference just a short 
while ago where the Japanese Government essentially admitted that the 
United States private sector wiped them out, wiped out the subsidized 
consortium. There was the Japanese Government admitting failure, 
announcing the end of the subsidies, and admitting that they were 
lobbied by the firms that received them and that they were caving into 
those firms. You want to see a picture of this endeavor; if it were 
written into law, I simply ask you to get the videotape of the Japanese 
Government officials admitting failure in the HDTV.
  So, Mr. President, I urge support of the amendment to strike this 
provision from the bill. I think that the venture capital industry in 
the United States is the most robust and creative. Government 
bureaucrats should not be in competition. The result is going to be a 
politically biased allocation that is not going to produce winners. We 
ought to save the money and reduce the budget deficit by the equivalent 
amount.
  The PRESIDING OFFICER. Who yields time?
  Mr. HOLLINGS. Mr. President, I yield such time as necessary to the 
distinguished Senator from Connecticut.
  Mr. LIEBERMAN. I thank the Chair, and I thank my friend and colleague 
from South Carolina.
  I am proud to rise and support him in opposition to this amendment 
which would strike from S. 4 this Civilian Technology Investment 
Program. I wish to respond in part to the comments made by my friend, 
the Senator from New Jersey, because I think there is a fundamental 
difference of understanding about what we are trying to do here and the 
way in which it is done.
  In my opinion, this section of this bill, the Civilian Technology 
Investment Program, a new program, responds to a clear need in our 
economy today, and it does it in a manner that is tried and true, 
widely accepted, not controlled by Government bureaucrats but led and 
driven by the marketplace. So I have a fundamentally different 
perception of what this program is all about than my friend, the 
Senator from New Jersey.
  Let me deal first with the problem. I cite and quote John Hodgeman, 
president of the Massachusetts Technology Development Corp., speaking a 
year ago, a little more, February 16, 1993.

       There is a chronic capital gap with respect to early 
     technology companies.

  John Carruthers, director of research at the Intel Corp., speaking on 
behalf of the American Electronics Association, composed of companies 
that have been critical in bringing America back to economic strength 
and creating new jobs, said:

       Since the mid-1980's, our Nation has failed to produce a 
     new generation of technology companies for a variety of 
     reasons. Chief among them has been the alarming and growing 
     inability of American entrepreneurs to obtain seed and 
     venture funding.

  That is the problem. The money is not out there to help the genius, 
the entrepreneur, with the bright idea in an area of critical 
technology, that is, a technology that we know is going to be critical 
to economic growth and job creation around the globe. The money has not 
been out there.
  Now there are a lot of reasons people give for that. For instance, 
some say it is----
  The PRESIDING OFFICER. If the Senator will suspend, all time of the 
Senator from South Carolina has expired.
  Mr. HOLLINGS. Mr. President, I ask unanimous consent that I yield 
time on the bill itself--I think under the unanimous-consent agreement 
we have 60 minutes, 30 minutes to a side--if there is no objection.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. LIEBERMAN. I again thank the Chair and thank the Senator from 
South Carolina.
  There are some who will say that this problem of a lack of 
availability of funding results from the fact that individuals are 
putting more money today into mutual funds. Those assets have increased 
dramatically. And they are displacing banks and venture capital as 
major sources of investment capital, and that creates a problem, which 
is mutual funds have shorter time horizons. They have to show a quick 
return, and as a result, they invest primarily in publicly traded 
securities instead of taking that chance that at an early stage of 
development will produce the very successful critical technology 
company of the future.
  So that is the problem, and it is a problem that we have seen over 
the years. We have suffered from it. Some of the great American 
universities and research laboratories have been and remain the best in 
the world. And this is a litany that has been said over and over on 
this floor, which I will repeat briefly, and it is a perception that is 
generally shared.
  Too often, in the past--happening less today--the great idea of 
American laboratories and research facilities has been converted into a 
commercial product in another country, particularly in Asia--Japan, 
Taiwan--because they have taken the funds and invested them at that 
early stage of development in trying to take the bright idea and 
convert it to a commercial success. And we also cite here the VCR, the 
fax machine. Those are very powerful examples of exactly what we are 
talking about and why we have said repeatedly on this floor anytime 
technology comes along that can lead to the fax machine or the VCR, we 
want it commercialized in America, and we want it built by Americans.
  That is what this section of this bill attempts to make happen, to 
find those bright ideas at an early stage before they are ready to take 
off and make sure that there is enough venture capital out there which 
the market has not provided to bring them along.
  So in that sense--and I think it is important to say this--this 
section of this bill actually responds to a market failure. Because of 
the short-term incentives in the system, short-term profits, because of 
the somewhat higher risk involved, there is a market failure. There is 
not enough capital being put into those bright ideas to convert them to 
the commercial products that will create the thousands of jobs to 
reemploy Americans who have lost their jobs in this recession.
  It is that market failure that this section of this bill attempts 
to--I hesitate to say cure but at least make better, to lighten the 
consequences of that failure. It adopts an idea, a program that has 
worked in countless ways, put into effect: loan guarantees--have the 
power of the Federal Government stand behind guarantees; the issuance 
of some kind of paper to raise money to put out there in an area that 
is normally limited by statute that this Congress has deemed to be 
important to the well-being of our country and our future; small 
business lending companies limited to small business, the same as small 
business investment companies. It is the SBIC's, the small business 
investment companies, that this program is most clearly directly 
patterned after.
  It has been said before, and I will say it again in one sentence, it 
is the SBIC's that presented the capital that made it possible for 
Nike, Apple Computer, and Federal Express to be born and to grow. And I 
know the occupant of the chair knows the benefits of at least one of 
those great companies through Federal Express. Minority small business 
investment companies, there we use this guarantee power to encourage 
the movement of capital toward minority small businesses limited by 
statute, small business innovation research, export revolving loans.
  Even Fannie Mae, Freddie Mac, Sallie Mae, those are all governmental 
institutions that guarantee the flow of money to programs that we 
consider socially, societally, and economically productive, housing or 
student loans, whatever it happens to be in the particular case.

  So we have the need, which is the absence of capital. We then adopt 
this tried and true system of meeting that need. But what I want to 
stress now is that S. 4 does it in a way, in this section of this bill 
brought out of the Commerce Committee, that is not governmentally 
controlled and governmentally operated.
  The kinds of fears expressed here about politicians going to the 
Federal Government to make a case to put pressure on to give money to 
this particular company in their home State to increase the funding for 
it, the Government, under this program as proposed in this bill, does 
not have the capacity to do that.
  Basically this $50 million program leverages on private capital put 
out by private venture capital firms that are licensed, but only 
because they have shown their qualifications, and that they have 
committed their operations to achieve the program objectives which are 
to support critical technologies that will create the jobs of the 
future.
  In other words, you have some venture capitalists who come together. 
The first thing they have to do is put up some money of their own. That 
is a response to the market. That is why this program is market driven. 
The Government does not get involved until these private venture 
capitalists say, ``We are going to put some money on the table.'' It is 
at that point, after the Government determines the qualifications 
commitment to the program objectives to create these new critical 
technologies and commercialize them, that the Government can agree to 
give the guarantee authority to this venture capital firm to expand the 
money it has to put into critical technologies. Fifty million dollars, 
as has been said over and over again, multiplies into $300 million 
because of the economics and accounting systems of the Federal 
Government, the so-called default rate.
  What I want to stress here, Mr. President, is that you create this 
venture capital firm called the Civilian Technology Investment Co. It 
has to have private capital at risk to participate in the program. 
Never does a private company that has an idea for a new technology that 
it wants to commercialize come to Federal Government, to any Federal 
bureaucrat, or to their Senator or Congressman to say, ``Help me get 
this Federal bureaucrat to give me money.'' The entrepreneur, the 
genius with the bright idea that will become tomorrow's fax machine or 
VCR goes to this Civilian Technology Investment Co., a private venture 
capital firm. They never come to the Government. And that private 
venture capital investment firm which we have licensed, which has put 
its private capital at risk, makes the decision as to whether to invest 
in this company.
  Here is the Federal Government over here licensing the venture 
capital firm willing to extend our guarantee. Here is the entrepreneur 
and the genius with the bright idea. That person only comes to the 
private venture capital firm to make the market-based decision as to 
whether that is a good program to put money into.
  So I think we have the need, we have a tried and true mechanism, and 
we have a structure here built on the SBIC model that is market driven, 
that is not Government-controlled. CTIP's, as they are called, are 
designed to fill an early funding gap. CTIP'S are flexible.
  Again, the only funding by the Government is through a guarantee. 
Venture capitalists participating in the program can supplement their 
own private investment capital with Government financing. That is not a 
direct investment. The private sector must put up part of the funding 
and share the risk, and unlike any other program under this critical 
technologies investment program the Government can share in the upshot. 
In other words, if the CTIP does well, the Government can benefit 
bringing some dollars into the Treasury, and in that sense reducing the 
deficit.
  I think this is a superb program. Just as the other parts of this 
underlying bill, S. 4 do, it responds to this gnawing problem that we 
have in our society today, our country today, and we certainly have it 
in the State of Connecticut. A national recovery recurring by the 
economic statistics--and you can fool a lot of Americans out there as 
to whether they feel there is an economic recovery. They do not. They 
have lost their jobs in the recession; downsizing; able, qualified, 
hardworking people. We are setting up programs to retrain them. The 
question is always asked, and it is the right question: ``Retraining 
for what?'' If there is no job there, the retraining is not going to 
mean anything.
  It is through these measured investments of this kind of Civilian 
Technology Investment Program that we answer the question, ``Retraining 
for what?'' Retraining for the jobs that will be created by the 
breakthrough, high-tech, critical technology businesses that will be 
allowed to grow as a result of this program.
  It has been an interesting and a substantive and a thoughtful debate. 
I am glad it is made in the context of an understanding that the 
underlying bill will go forward.
  I appreciate very much the sense of accommodation between the 
chairman of the committee, Senator Hollings, who has been such an 
extraordinary leader in this effort, and to our friend and colleague 
from Missouri, Senator Danforth, whose support now will make the 
underlying bill possible.
  So I rise to support the Civilian Technology Investment Program, 
hoping that the amendment of the Senator from Missouri will be 
defeated, but thanking him nonetheless for enabling and joining with us 
in making sure that the underlying program will go forward. I thank the 
Chair. I yield the floor.
  Mr. HOLLINGS. Mr. President, the bill itself--on my time--let me 
thank the distinguished Senator from Connecticut. He has chaired the 
economic leadership group within the U.S. Senate over the past several 
years. He has been a wonderful adviser and has motivated this 
particular piece of legislation; the overall thrust to get America back 
into technology development, and the commercialization of our 
technology. I want to thank him. It is a wonderful contribution. We 
appreciate his leadership on this score.
  How much time do I have on the bill?
  The PRESIDING OFFICER. The Senator from South Carolina has 16 minutes 
and 8 seconds remaining.
  Mr. HOLLINGS. I reserve the remainder of my time.
  The PRESIDING OFFICER. The Senator from Missouri has 4 minutes and 45 
seconds remaining on the amendment, and then the full time on the bill.
  Mr. DANFORTH. Mr. President, first, I would like to express my 
appreciation to both Senator Burns and Senator Bradley because I think 
what they have done is to create a sense of bipartisanship and focus on 
the issue before us. Clearly, we were pretty well divided on a party 
basis. But Senator Burns, supporting the chairman, and Senator Bradley, 
supporting me, in this amendment has created a sense of bipartisanship 
on the issue that is now before us.
  I think one of the points that was made by Senator Bradley deserves 
special attention; that is, the way the marketplace works is that 
people invest in good ideas, and if the ideas do not turn out to be 
good, they withdraw their investment. That is the efficient way of the 
market's operation. Bad ideas are not pursued. Good ideas are.
  That is one of the problems that is created when the Federal 
Government gets into the venture capital business because, while true 
venture capitalists have real money at risk, they are going to lose 
something if they lose out. Those of us who are in Government are not 
really investing our own money. We are investing the taxpayers' money, 
or what is worse, we are investing borrowed money. We do not sense any 
personal risk. That is the difference between the Government 
participating in the economy, and the private sector participating in 
the economy.
  Now we are told that on a pilot project basis the Government should 
participate in the business of venture capitalism. To what extent? 
``Well, we really have not worked out the numbers yet because that will 
await conference.'' But in the bill that came to the floor of the 
Senate, it was $100 million for this venture capital program.
  Now the Congressional Budget Office in its analysis, and its 
computation for a loan guarantee program, says that an authorization is 
the same as 15 percent of a loan program.
  So in other words, when CBO computes the exposure of the government 
in loans, the authorization equals 15 percent of the total amount of 
exposure in the loan. In other words, we now have, in this legislation, 
the potential of $600 million of exposure in loans and loan guarantees. 
That is what we are talking about--whether we are going to get that 
heavily into this venture capital.
  As I say, a true venture capitalist with real money at risk pulls the 
plug on bad ideas. That is not the nature of government. One of the 
things that a lot of people say about government is that we do not 
terminate programs. We do not tend to terminate programs. We tend, in 
government, not to want to admit mistakes. People in the bureaucracy do 
not want to admit mistakes, and we in Congress do not want to admit 
mistakes. Our tendency is to throw good money after bad. It is the 
opposite of how a venture capitalist functions. So it is more likely 
that what we will do is to pick losers, because the winners will be 
privately funded, and because one of the conditions of receiving money 
under this program is that you cannot get it in the private sector. So 
we are more likely to fund losers than the private sector, and then 
once we have funded them, we are less likely to cut our losses. That is 
the way government works.
  So my contention is that government is not a good venture capitalist; 
government is a bad venture capitalist. Senator Bradley says, well, we 
can save money--he said $100 million; I say $600 million--from the 
Federal deficit. That is right, in assuming what the appropriations 
would be; but that is correct, the deficits involved here. But what is 
involved also is just a bad idea. This is not the way to fund research, 
to provide funds, nor to provide loan guarantees for people who cannot 
get money in the private sector, when we do not tend to pull the plug 
on bad ideas, but tend to send good money following after bad money. I 
think that is a very important point. It is a point that is not new to 
Senator Bradley, and it is not new to me.
  There was a piece by Alvin H. Meltzer in the Wall Street Journal last 
May. The title is ``Why Governments Make Bad Venture Capitalists.'' I 
would like to read just a portion of that:

       The U.S. could learn from the experience of other 
     countries. In Korea and much of Latin America, governments 
     have acted as venture capitalists, often subsidizing loans to 
     favored firms and burying their losses in the banking system. 
     Professor Elwyn Young has compared the Singapore Government's 
     policy of managing investment with the free market policy of 
     Hong Kong. His analysis shows that government direction is 
     inefficient. Singapore invests much more but does not get 
     more growth.

  Why? In general, is government less efficient? One reason is that 
products and companies do not leap from the drawing board with 
``winner'' or ``loser'' stamped on their blueprints. Someone has to 
decide to make additional investments in companies that appear to have 
good prospects, thereby putting more money at risk, or to shut down 
companies that no longer appear promising. Government is more likely to 
delay closing the failures and more likely to pump in additional money 
to try to cover mistakes or misjudgments.
  That is what Alvin Meltzer, a professor at Carnegie Mellon 
University, has written about the Government as venture capitalists. I 
believe, Mr. President, that that follows as the night to day.
  Senator Lieberman says there has been a failure in the market system. 
I doubt that. I doubt that we in the Senate are in a position to say 
that there has been a failure in the market. I think what happened--
this is my understanding, and I do not pretend to be an economist or 
business person. My understanding is that in the midsixties, there was 
really a glut of venture capital money. It was the thing to do. As 
people have written, there was a lot of money chasing too few good 
ideas. And venture capital became less profitable, less good of an 
investment and, therefore, the amount of the investment went down. Now 
it is going back up again. I think that is the way the market system 
works.
  If we in the Senate do not believe the market system works 
sufficiently, then this is exactly the kind of program we would like. 
Let us substitute for the market. Let us substitute for the capitalist 
system. Let us become capitalists, venture capitalists, by creating a 
licensing committee--three members appointed by the Secretary of 
Commerce and two by the Small Business Administration--and that 
licensing committee receives applications pursuant to regulations 
established by the departments of government. The applications come in 
and the licensing committee says, ``Yes, we will license you,'' or 
``No, we will not,'' depending on what you intend to spend your money 
on. Then the licensing company decides how to finance the applicants if 
they are licensed. That can be by loans and loan guarantees, with 
tremendous exposure.
  It is certainly not the free market system, Mr. President. It is 
something else. It is a statement that we really do not believe the 
market system works. We really do not believe that the free market 
system works. We want to do something else. We want to try something 
else. Government to the rescue. Licensing of venture capitalists. 
Licensing companies established in the Department of Commerce and the 
Small Business Administration. Licensing and financing, and the 
purchase of stock and venture capitalists, and loans and loan 
guarantees, loans that can be guaranteed to 100 percent.
  I do not see any limitation in the legislation. I do not see any 
requirement that the entrepreneur has to come up with 50 percent of his 
money. My reading of it is that there is no such requirement. That was 
in the advanced technology program we were debating this morning. That 
was the Brown amendment that applied to the advanced technology 
program. This, as I read it, can be 100 percent.
  In fact, in the committee report, it says just that. Here is the 
committee report, page 47:

       The Secretary is authorized, when funds are previously made 
     available in appropriations, to purchase or guarantee the 
     timely payment of up to 100 percent of principal and interest 
     as scheduled on debentures issued by such companies, and (b) 
     purchase nonparticipating or participating nonvoting 
     preferred securities and issued trust certificates 
     representing ownership of all or part of such preferred 
     security.

  All or part of such preferred security.
  I do not see any requirement that private money be put at stake, and 
I also do not see any requirement that this be small businesses that 
are the beneficiaries.
  I think big businesses can. Maybe I will be corrected on that. Maybe 
I have not read it correctly. I am sure that is the reason the SBA is 
part of it, to try at least to weight it to small businesses. But I do 
not see any requirement that it could be small businesses. I think it 
could be big businesses. I think they can have very little risk 
themselves, the so-called venture capitalists. I think it is just 
putting money into some people's pockets, to put money into someone 
else's pockets, on the theory that is how to support research and 
development; that is how to do it.
  Someone around here has that kind of genius, and we say: Well, we are 
going to have a committee of five people, but please do not worry. The 
American people should not worry. They should understand that these are 
really bright people. We are going to have five really smart people. 
And there are smart people here in Washington. So there is a failure in 
the marketplace because people in the marketplace do not know what they 
are doing. People in the marketplace really do not know what they are 
doing. So there is a failure of the marketplace, we have been told 
today, but help is on the way. Smart people in a licensing committee 
are going to find venture capitalists to license. And then they are 
going to finance them, and the money will be available to people who 
cannot get money in the marketplace.
  I reserve the remainder of my time.
  Mr. HOLLINGS. Again, please, Mr. President, what is the time 
remaining on either side?
  The PRESIDING OFFICER. The time remaining to the Senator from South 
Carolina is 16 minutes and 9 seconds, and the Senator from Missouri has 
26 minutes and 48 seconds.
  Mr. HOLLINGS. Mr. President, I ask unanimous consent that the Senator 
from Montana [Mr. Burns], be added as a cosponsor of our modification 
reducing the amount authorized.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. HOLLINGS. Mr. President, quite quickly, we had a report card at 
the end of the year entitled ``Learning to Change, Opportunities to 
Improve the Performance of Smaller Manufacturers.'' This report card 
was issued by the National Academy of Engineering, the Committee to 
Assess Barriers and Opportunities to Improve Manufacturing at Small- 
and Medium-Sized Companies, at the end of last year.
  I ask unanimous consent the entire report be printed in the Record at 
this point.
  There being no objection, the report was ordered to be printed in the 
Record, as follows:

Learning To Change--Opportunities To Improve the Performance of Smaller 
                             Manufacturers

   (Issued by the Committee To Assess Barriers and Opportunities To 
   Improve Manufacturing at Small and Medium-Sized Companies of the 
 Manufacturing Studies Board, Commission on Engineering and Technical 
                   Systems National Research Council)


      problems and challenges for smaller manufacturing companies

       Smaller companies confront major problems in responding to 
     increased global competition. These problems encompass a 
     broad range of issues, only some of which relate directly to 
     technology. Inadequate resources--people, money, expertise, 
     information--and insufficient time are reasons that many 
     smaller firms are not improving their manufacturing 
     performance. The idiosyncracies that come from the genesis of 
     entrepreneurial companies are also contributing factors in 
     their resistance to change and slow adoption of more advanced 
     technologies and new organizational structures.
       Five fundamental barriers to manufacturing performance 
     improvement in smaller firms were identified and discussed 
     during the workshops hosted by the committee. The barriers 
     are well corroborated in the extensive literature about 
     conditions in smaller companies. The means for helping firms 
     adequately deal with the problems include a combination of 
     approaches undertaken by MTCs, various state assistance 
     programs, and several private sector service providers. A 
     comprehensive response to most of the barriers will require a 
     combination of the approaches discussed.

            Barrier 1: Disproportionate Impact of Regulation

       The regulatory environment creates a disproportionate 
     burden for smaller firms. National, state, and local 
     initiatives and decisions concerning trade, the environment, 
     employment, work place safety, health care, and liability 
     have a direct impact on the competitiveness of manufacturing 
     companies. Despite efforts to lessen the impact of regulatory 
     actions on small businesses, the amount of time and effort 
     required to comply with complex regulations has become a 
     disproportionate hardship for smaller organizations. One 
     result is that the economic impact of regulatory compliance 
     is much greater as a percentage of capital investment than it 
     is for larger businesses.
       Opportunities for improving the ability of smaller 
     manufacturers to cope with regulatory actions include: 
     Improved dialogue between regulators and smaller 
     manufacturers; one means for improving dialogue between 
     regulators and smaller businesses would be to provide 
     assistance in identifying and filing appropriate forms and 
     documents required by regulatory agencies; timely information 
     to manufacturers about new or modified regulations; and 
     reorientation of the strategies of regulatory agencies 
     towards ``compliance assistance'' rather than ``adversarial 
     and punitive.''

                      Barrier 2: Lack of Awareness

       Smaller manufacturers are often unfamiliar with changing 
     technology, production techniques, and business management 
     practices. The staff and senior managers of smaller 
     manufacturing companies must devote most of their time and 
     energies to managing the day-to-day operations of the firm. 
     As a consequence those companies are less likely to be aware 
     of the best manufacturing practices, innovative application 
     of new technologies, and fresh approaches to improved 
     production efficiency. With less relevant experience and 
     expertise, their expectations for successfully selecting and 
     effectively assimilating new technology are not high, and so 
     they are less likely to risk investment in new ways of doing 
     things or in major changes to the management structure and 
     relationships within the business.
       Opportunities for increasing the awareness of manufacturers 
     to new technologies and best manufacturing practices include 
     providing: National benchmarking data for smaller firms, and 
     illustrative cases of best manufacturing practices; greater 
     access to video tape libraries that illustrate technologies 
     and implementation problems; local and regional forums and 
     workshops; low-cost seminars and formal courses on selection, 
     adoption, and management of specific technologies; and 
     expanded mechanisms to provide access to equipment for ``try 
     before you buy.''

                          Barrier 3: Isolation

       Smaller manufacturers are generally isolated and have too 
     few opportunities for interaction with other companies in 
     similar situations. Interaction with other firms is essential 
     to continuous improvement. These associations seem to be most 
     productive when they occur among companies of similar size 
     and with larger organizations that might be role models 
     for smaller firms. The chance for suppliers to interact 
     with major customers, to benefit from membership in a 
     supplier improvement program or keiretsu-like 
     confederation of companies, can significantly increase the 
     chances for smaller firms to improve their performance.
       Opportunities for increasing the interaction and exchange 
     of information with other manufacturers in like circumstances 
     include: Workshops, meetings, site visits, focus groups, 
     forums, and roundtable discussions; television and video 
     programs to expose manufacturers to specific problems and the 
     solutions adopted by other firms; construction and operation 
     of networks of companies with similar interests and needs to 
     share costs; encouraging professional and trade associations 
     to be more active in determining needs and developing 
     appropriate programs for their membership; and electronic 
     networks that provide bulletin boards for direct exchange of 
     information and sharing of approaches to common problems.

                    Barrier 4: Where to Seek Advice

       It is difficult for owners and managers of smaller 
     companies to find high-quality, unbiased information, advice, 
     and assistance. When companies need help with technical 
     problems, when they want to replace production or design 
     equipment, or when they want to upgrade the skills and 
     talents of their work force, they are often at a loss for 
     sources of assistance. Searching for help in the public 
     sector often reveals a confusing uncoordinated array of 
     services--universities, economic development groups, 
     technical schools, government agencies--``competing'' for 
     clients. Inappropriate choices can waste precious resources 
     and time, a waste that smaller firms cannot afford.
       Opportunities for helping smaller manufacturers acquire 
     necessary information and unbiased advice include: Databases 
     of consultants with relevant references and qualifications, 
     toll-free numbers to provide firms with a single contact for 
     assistance, and electronic bulletin boards to notify service 
     providers of opportunities in the manufacturing community; 
     field engineers that provide small companies a strategic 
     perspective on how they compare to competitors and what 
     changes they need to make to remain competitive in the long 
     term; and interpreters and catalysts to communicate the needs 
     of smaller manufacturers to vendors, suppliers, academic 
     institutions, federal laboratories, and government agencies.

                     Barrier 5: Scarcity of Capital

       Operating capital and investment funds for modernization 
     are difficult for small- and medium-sized manufacturing firms 
     to obtain. The financial community does not readily 
     understand manufacturing and often perceives loans for new 
     equipment as unattractively high risks. Smaller firms are 
     unlikely to have the capabilities needed to put together 
     proposals for funds in the format familiar to lending 
     officers. The consolidation of banks, with some exceptions, 
     has removed much of the decision making from the communities 
     where many loan officers have traditionally relied on the 
     ``known character'' of management and owners of the companies 
     in lieu of collateral.
       Opportunities for improving access to capital and 
     understanding the requirements of the financial community 
     include: Local and regional forums and workshops for bankers, 
     regulators, and others who work with manufacturers; 
     assistance developing justification for capital improvements 
     in the format and language understood by the financial 
     community; and creation of mutual loan guarantee networks 
     among peer companies.


                         sources of assistance

       Fortunately, the efforts of many assistance organizations, 
     educational institutions, and businesses have demonstrated 
     ways to help companies successfully contend with most of 
     these obstacles. With some regional variation, assistance is 
     available in both the private and public sectors.
       The private sector offers a number of resources that 
     manufacturers can buy to solve problems, to modernize their 
     production operations, and to upgrade the skills of their 
     workers. Among these are consultants, suppliers of 
     technology, trade associations and professional societies, 
     and other miscellaneous service providers. The backgrounds 
     and expertise of many consultants are, however, primarily 
     founded on principles relevant to larger corporations; 
     they often fail to appreciate subtle but important 
     differences in smaller organizations. And though many 
     suppliers will provide fairly substantial ``proposal 
     engineering'' services while competing for a sale, fewer 
     are able to follow through with sustained support and 
     service after a sale to a relatively small customer. There 
     are no precise data available on the number of smaller 
     companies buying private sector assistance.
       Numerous initiatives have been undertaken at the federal, 
     regional, state, and local levels to help manufacturers and 
     business in general. For the most part, these initiatives 
     have become overlapping uncoordinated programs, and the 
     effectiveness of many programs has yet to be systematically 
     evaluated or demonstrated. The programs typically operate on 
     fragile financial underpinnings and often compete for funds 
     to support assistance efforts. The availability of public 
     assistance, which is usually dependent on funding by state 
     and local government, tends to vary with the perceived 
     contribution of smaller manufacturing firms to the well-being 
     of the local economy, and the best state programs are unable 
     to help more than a few hundred firms per year.
       Until 1989, the federal role in providing assistance to 
     small manufacturers was primarily through the Small Business 
     Administration and various defense programs. Beginning in 
     1989, however, the National Institute of Standards and 
     Technology (NIST) has funded the Manufacturing Technology 
     Centers (MTCs), seven of which are now operating. The MTC 
     program is the primary federal activity in industrial 
     extension providing matching grants for creating centers to 
     enhance ``productivity and technological performance in U.S. 
     manufacturing through the transfer of manufacturing 
     technology and techniques * * *'' (U.S. Congress, 1988).


           effectiveness of manufacturing technology centers

       To understand the challenges facing smaller manufacturers 
     and to determine the nature and effectiveness of MTC 
     activities, the committee held eight workshops throughout the 
     United States, six of them at MTCs. The conclusions of the 
     committee concerning the effectiveness of the organizations 
     are based on workshop discussions with smaller manufacturers 
     and company representatives who had some experience working 
     with the Manufacturing Technology Centers, as well as 
     conversations with MTC staff and other service providers.
       A majority of the committee has concluded that the MTCs are 
     well placed to provide many of the services needed to improve 
     the performance of smaller manufacturers. However, the 
     committee found that the legislative ``sunset provisions,'' 
     which eliminate NIST funding after six years, and the present 
     metrics (cash flow, number of clients, length of engagements, 
     attendance at manufacturing meetings) tend to adversely 
     dominate the missions, attitudes, and behaviors of the MTCs 
     that have been operational for two or more years. While there 
     is an extensive range of services that can be offered by 
     MTCs, the typical long-term strategies to fill the funding 
     gap and comply with performance measures place increasing 
     emphasis on fee-for-service activities.
       Many of the needs and opportunities identified by the 
     manufacturers attending the workshops were not project-
     oriented kinds of assistance but were, instead, concerned 
     with improving access to information and building stronger 
     networks among companies, suppliers, technology developers, 
     regulators, and financiers. These ``soft'' services were 
     noted repeatedly as some of the most useful and important 
     contributions that could be made by the MTCs as neutral 
     parties. Such services, however, are not easily converted 
     into fees, and their contribution to the accomplishment of 
     the MTC mission is difficult to measure. All of the MTCs 
     provide these kinds of ``soft'' services to a greater or 
     lesser degree, but they should receive more emphasis despite 
     the lack of clear metrics on which to judge their value. The 
     committee can foresee a situation emerging in which MTCs fail 
     to provide services that would be most useful and effective 
     to smaller firms because the fee income is insufficient, 
     while at the same time competing more with the private sector 
     service providers for the business of larger firms.
       Each of the MTCs continues to learn how best to serve its 
     customer base and is flexible enough to adapt. The local 
     infrastructure and industrial economy determine to a great 
     degree the characteristics of the MTC organization and its 
     chosen position in the spectrum of support needed by 
     manufacturers in its region. This drives each MTC to develop 
     a unique combination of services targeted at local industrial 
     conditions, and subsequently each evolves a relatively unique 
     relationship with other providers of services and assistance. 
     They are learning how to serve as a hub of information and 
     facilitator of cooperation in their local industrial 
     communities, and how to amalgamate a range of programs into a 
     core set of useful services. Each MTC, therefore, can be 
     viewed as an experiment or prototype in how to integrate 
     federal efforts in manufacturing assistance with existing 
     private and public assistance resources to meet the 
     demands of very diverse local manufacturing communities.


                              conclusions

       The investigations and deliberations of the committee have 
     led to the development of opposing sets of conclusions 
     concerning the appropriateness of a federally funded national 
     system of manufacturing assistance. The majority opinion and 
     recommendations are presented followed by the minority 
     opinion.


                            majority opinion

       Based on the committee's discussions with smaller 
     manufacturers and with staff at the MTCs and other industrial 
     assistance programs, a majority of the committee has 
     concluded that a national industrial assistance system is 
     justified. The committee majority has concluded that barriers 
     to manufacturing performance improvement in smaller firms and 
     the opportunities to overcome those barriers, as described by 
     manufacturers in the committee's workshops, define roles for 
     public sector assistance programs.
       The majority assessment of the current MTCs is that the 
     MTCs are well-placed to address many of the challenges 
     confronting smaller manufacturers. Within the fragmented 
     network of assistance sources, the MTCs have begun to carve a 
     niche that, at least within their geographic regions, has 
     brought some degree of order to the community and has raised 
     the awareness of smaller companies that useful help is 
     available. The MTCs are still experimenting with different 
     mechanisms for marketing, ensuring responsiveness to the 
     local customer base, working with other sources of 
     assistance, and building the intercompany networks and 
     information resources that many smaller firms need. This 
     process of experimentation and learning should be encouraged 
     and the lessons broadly disseminated. This is the only way to 
     increase effectiveness in a necessarily diverse environment 
     and to keep expectations realistic as the MTC program is 
     expanded and other initiatives begin in the context of a 
     national manufacturing assistance system.


committee to assess barriers and opportunities to improve manufacturing 
                  at small and medium-sized companies

       Gary Markovits, Chairman, President, Gary Markovits & 
     Associates, Inc., Wappingers Falls, New York.
       Winston J. Brill, President, Winston J. Brill & Associates, 
     Madison, Wisconsin.
       Jay P. Cooper, Director (Retired), Materiel Policy and 
     Socio-Economic Business Program, Northrop Corporation, 
     Hawthorne, California.
       Irwin Feller, Director, Graduate School of Public Policy 
     and Administration and Professor of Economics, Pennsylvania 
     State University, University Park.
       Barbara M. Fossum, Associate Director, Manufacturing 
     Systems Center, University of Texas, Austin.
       Sara P. Garretson, Director, NYC Industrial Technical 
     Assistance Corporation, New York, New York.
       Harold G. Hall, President, Hall Industries, Inc., 
     Pittsburgh, Pennsylvania.
       Bruce E. Hamilton, Vice President, Operations, United 
     Electric Controls, Company, Watertown, Massachusetts.
       Anne L. Heald, Executive Director, Center for Learning and 
     Competitiveness, School of Public Affairs, University of 
     Maryland, College Park.
       Dundar F. Kocaoglu, Professor and Director, Engineering 
     Management Program, Portland State University, Oregon.
       Joe H. Mize, Regents Professor, School of Industrial 
     Engineering and Management, Oklahoma State University, 
     Stillwater.
       R. David Nelson, Vice President, Purchasing, Honda of 
     America Manufacturing, Inc., Marysville, Ohio.
       Robert A. Pritzker, President and CEO, The Marmon Group, 
     Inc., Chicago, Illinois.
       Paul D. Rimington, President, Diemasters, Manufacturing, 
     Inc., Elmhurst, Illinois.
       William B. Rouse, Chief Executive Officer, Search 
     Technology, Inc., Norcross, Georgia.
       William E. Ruxton, Vice President, National Tooling & 
     Machining Association, Fort Washington, Maryland.
       Charles F. Sabel, Ford International Professor of Social 
     Science, Massachusetts Institute of Technology, Cambridge, 
     Massachusetts.
       Philip P. Shapira, Assistant Professor, School of Public 
     Policy, Georgia Institute of Technology, Atlanta, Georgia.
       John B. Woodard, President, Institute of Advanced 
     Manufacturing Sciences, Inc., Cincinnati, Ohio.
       Staff:
       Thomas C. Mahoney, Director, Manufacturing Studies Board.
       Joseph A. Heim, Senior Program Officer and Study Director.
       Lucy V. Fusco, Staff Assistant.

  Mr. HOLLINGS. Mr. President, we had such outstanding individuals as 
Irwin Feller of the Pennsylvania State University, Graduate School of 
Public Policy and Administration and professor of economics; Bruce 
Hamilton from United Electric Controls Co., Watertown, MA; Robert 
Pritzker, president and CEO, The Marmon Group; William Ruxton, vice 
president, National Tooling & Machining Association; Charles Sabel, 
Ford International, professor of social science of MIT; Philip Shapira, 
assistant professor, School of Public Policy at Georgia Tech; and John 
Woodard, president of the Institute of Advanced Manufacturing, amongst 
others.
  What happens is, and I quote just a few sentences here from the 
report itself:

       Smaller companies confront major problems in responding to 
     increased global competition.

  There are five reasons, they said.
  First:

       The regulatory environment creates a disproportionate 
     burden for smaller firms.

  Second:

       Smaller manufacturers are often unfamiliar with changing 
     technology, production techniques, and business management 
     practices.

  Third:

       Smaller manufacturers are generally isolated and have too 
     few opportunities for interaction with other companies in 
     similar situations.

  Fourth:

       It is difficult for owners and managers of smaller 
     companies to find high-quality, unbiased information, advice, 
     and assistance. When companies need help with technical 
     problems, when they want to replace production or design 
     equipment, or when they want to upgrade the skills and 
     talents of their work force, they are often at a loss for 
     sources of assistance. Searching for help in the public 
     sector often reveals a confusing, uncoordinated array of 
     services--universities, economic development groups, 
     technical schools, government agencies--``competing'' for 
     clients. Inappropriate choices can waste precious resources 
     and time, a waste that smaller firms cannot afford;

  And fifth:

       Operating capital and investment funds for modernization 
     are difficult for small and medium-sized manufacturing firms 
     to obtain. The financial community does not readily 
     understand manufacturing and often perceives loans for new 
     equipment as unattractively high risks. Smaller firms are 
     unlikely to have the capabilities needed to put together 
     proposals for funds in the format familiar to lending 
     officers. The consolidation of banks, with some exceptions, 
     has removed much of the decisionmaking from the communities 
     where many loan officers have traditionally relied on the 
     ``known character'' of management and owners of the companies 
     in lieu of collateral.

  That is something that we are having a debate about with respect to 
interstate banking and otherwise with these mergers.
  This particular study group of the National Academy of Engineering 
held eight workshops throughout the United States, and as a result, the 
bottom line is, and I quote:

       * * * a national industrial assistance system is justified.

  These are some of the smart people, if we want to talk about smart 
people, who studied this.
  Additionally, rather than fail in the marketplace, Mr. President, in 
the limited time I have left, let me include in the Record these 
particular enclosures of endorsement of S. 4, which include, of course, 
the small business provision and otherwise.
  I ask unanimous consent to have that printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                Advanced Technology Coalition,

                                                 February 9, 1994.
     Hon. Ernest F. Hollings,
     U.S. Senate, Russell Senate Office Building, Washington, DC.
       Dear Senator Hollings: On behalf of the Advanced Technology 
     Coalition, we want to express our strong support for the 
     Senate version of the National Competitiveness Act, S. 4.
       We believe that the bill deserves bipartisan support. We 
     ask that you vote for the bill when it reaches the floor in 
     the very near future. Its passage is essential to 
     strengthening the ability of our companies and members to 
     compete in the international marketplace; in short, S. 4 
     means jobs and will contribute to our nation's long-term 
     economic health.
       Combined, the Advanced Technology Coalition represents 5 
     million U.S. workers, 3,500 electronics firms, 329,000 
     engineers, and 13,500 companies in the manufacturing sector. 
     The Coalition is a diverse group of high-tech companies, 
     traditional manufacturing industries, labor, professional 
     societies, universities and research consortia that have a 
     common goal of ensuring America's industrial and 
     technological leadership.
       The members of the Advanced Technology Coalition have 
     invested an enormous amount of time working with both the 
     House and the Senate in developing and refining the National 
     Competitiveness Act. The Coalition believes that its views 
     have been heard by Congress and reflected in the bill.
       In short, we believe that S. 4 will promote American 
     competitiveness and enhance the ability of the private sector 
     to create jobs in this country. We hope that you will play a 
     leadership role in ensuring its passage. We would be happy to 
     sit down with you or your staff to discuss the bill in 
     greater detail.
           Sincerely,
       American Electronics Association (AEA).
       National Association of Manufacturers (NAM).
       The Modernization Forum.
       Microelectronics and Computer Technology Corporation (MCC).
       Honeywell, Inc.
       National Society of Professional Engineers.
       Business Executives for National Security.
       IEEE-USA.
       Semiconductor Equipment and Materials International (SEMI).
       Institute for Interconnecting and Packaging Electronics 
     Circuits (IPC).
       Wilson and Wilson.
       American Society for Training and Development.
       Catapult Communications Corporation.
       Dover Technologies.
       Texas Instruments, Inc.
       Columbia University.
       Motorola.
       Intel Corporation.
       Cray Research.
       Electron Transfer Technologies.
       Electronic Data Systems (EDS).
       American Society for Engineering Education.
       U.S. West, Incorporated.
       Electronic Industries Association.
       Tera Computer Company.
       Southwest Manufacturing Technology Center.
       Convex Computer Corporation.
       Association for Manufacturing Technology.
       Semiconductor Research Corporation.
       American Society of Engineering Societies.
       AT&T.
       Hoya Micro Mask, Inc.
                                        The National Coalition for


                                       Advanced Manufacturing,

                                                 February 8, 1994.
     Hon. Ernest F. Hollings,
     U.S. Senate, Russell Senate Office Building, Washington, DC
       Dear Senator Hollings: On behalf of the National Coalition 
     for Advanced Manufacturing [NACFAM], I want to express our 
     strong support for the Senate version of the National 
     Competitiveness Act, S.4.
       We believe that the bill deserves bipartisan support and 
     ask that you join many of your colleagues in supporting the 
     bill when it reaches the floor. Its passage will enhance the 
     ability of U.S. manufacturing companies to compete in the 
     international marketplace. S.4 would also help to expand the 
     pool of high skill, high wage jobs for the American 
     workforce.
       NACFAM especially supports the manufacturing provisions of 
     the bill (Title II) which, among other things, will develop a 
     national system of manufacturing extension centers and 
     technical services. This system will improve the ability of 
     the nation's 360,000 small and medium-sized manufacturers to 
     modernize through the adoption of advanced manufacturing 
     technology and related processes critical to increasing their 
     productivity, product quality, and competitiveness.
       These small- and medium-sized manufacturers are the 
     backbone of our domestic industrial base. Manufacturing 
     establishments with fewer than 500 employees represent 98% of 
     the nation's total, employ two-thirds of the manufacturing 
     workforce, and produce nearly half of the nation's value 
     added in manufacturing.
       NACFAM, a non-partisan, non-profit, industry-led coalition, 
     has worked as a catalyst for public-private cooperation in 
     modernizing America's industrial base for over 5 years. 
     NACFAM's rapidly growing membership includes 65 corporations, 
     175 manufacturing technology centers (Making NACFAM the 
     largest association of such centers) and 27 national trade 
     and technical associations (representing between them over 
     80,000 companies and thousands of technical education 
     institutions).
       Thanking you in advance for your kind consideration of S.4, 
     I remain,
                                                        Leo Reddy,
                                                        President.
                                  ____



                                   Council on Competitiveness,

                                                    March 7, 1994.
     Hon. Ernest F. Hollings,
     U.S. Senate, Washington, DC.
       Dear Senator Hollings: On behalf of the Council on 
     Competitiveness--a coalition of chief executives from U.S. 
     industry, higher education and labor--I would like to express 
     my support for S. 4, the National Competitiveness Act.
       As a leading bi-partisan private-sector voice on U.S. 
     competitiveness, the Council is dedicated to helping make 
     America more competitive in the global marketplace and more 
     prosperous at home. We believe that S. 4, through its support 
     for civilian technology and manufacturing, is an important 
     step towards these ends. The Council is on record as 
     supporting several programs, in particular:
       Significantly expand the Advanced Technology Program (ATP). 
     S. 4 increases funding for ATP to $567 million in FY 1996 and 
     requires that the Department of Commerce develop a long-term 
     plan for the program. These provisions will promote increased 
     private-sector investment in critical enabling technologies 
     and allow ATP to have a more strategic impact on U.S. 
     industrial competitiveness.
       Support development and diffusion of technology, especially 
     to small and medium-sized manufacturers. S. 4 directs the 
     Department of Commerce to work with industry to develop new 
     generic advanced manufacturing technologies and consolidates 
     existing NIST quality programs into a NIST National Quality 
     Laboratory. It also combines existing federal and state 
     extension programs into an integrated Manufacturing Extension 
     Partnership (MEP) to help small and medium-sized 
     manufacturers in all geographic regions adopt modern 
     manufacturing technologies and create high performance 
     workplaces. These initiatives will enhance U.S. industry's 
     ability to develop and manufacture competitive products and 
     promote long-term economic growth.
       Stimulate investment in high performance computing and 
     communications applications. S. 4 authorizes over $350 
     million in FY 1995 and FY 1996 for a coordinated interagency 
     program to support research, technology development and pilot 
     projects for computing applications in health care, education 
     and manufacturing. These applications will help translate the 
     potential of a 21st century information infrastructure into 
     tangible economic and social benefits for the American 
     people.
       We commend your continued support for these initiatives and 
     urge you to play a leadership role in their implementation 
     through timely passage of S. 4.
           Sincerely,

                                                 Paul Allaire,

                               Council Chairman, Chairman and CEO,
                                                Xerox Corporation.
                                  ____



                              Computer Systems Policy Project,

                                                February 23, 1994.
     Hon. Ernest F. Hollings,
     Chairman, Senate Committee on Commerce, Science, and 
         Transportation, Russell Senate Office Building, 
         Washington, DC.
       Dear Chairman Hollings: I am writing on behalf of the 
     Computer Systems Policy Project (CSPP) in support of your 
     efforts to enact legislation to establish an information 
     applications technology component of the High Performance 
     Computing Act, Title VI of S. 4.
       CSPP strongly believes that the research framework 
     established by Title VI of S. 4 will complement efforts by 
     the private sector to develop applications for an enhanced 
     national information infrastructure (NII). Title VI 
     authorizes funds for precommercial research that will 
     stimulate the development by the private sector of new 
     applications in education, health care, access to government 
     information and services, and digital libraries. These 
     applications have the potential to create new products, 
     services, and jobs and to improve the quality of life for all 
     Americans by bringing the benefits of the information age to 
     everyone.
       The United States is currently the world leader in 
     computing and communications technologies. An enhanced 
     national information infrastructure will not only help us 
     maintain that lead, but will put our information technology 
     advantage to work for all Americans. CSPP believes that 
     initiatives such as those authorized by Title VI of S. 4 will 
     contribute significantly to successful and rapid evolution of 
     the NII.
           Sincerely,
                                                   Lewis E. Platt,
         Chairman and CEO, Hewlett-Packard Company, Chairman, CSPP 
           Working Group on Information Infrastructure.
                                  ____

                                           Business Executives for


                                      National Security, Inc.,

                                                    March 4, 1994.
     Hon. William S. Cohen,
     U.S. Senate, Hart Senate Office Building, Washington, DC.
       Dear Senator Cohen: My organization, Business Executives 
     for National Security (BENS), has worked for many years, as 
     you have, to help promote American competitiveness and 
     revitalize the American industrial base.
       We have made much progress in promoting these goals, and we 
     now have an opportunity to solidify these advances through S. 
     4, the National Competitiveness Act of 1993. Programs such as 
     the Advanced Technology Program, manufacturing extension 
     centers, and the newly proposed foreign technology monitoring 
     office will all make important contributions to future 
     economic strength of American industry.
       While these programs enhance competitiveness, BENS also 
     recognizes that these initiatives are critical to America's 
     military security. The ATP and other programs are critical to 
     the future success of the DoD's efforts to create an 
     integrated industrial base to supply future military systems. 
     These programs also play an important role in our efforts to 
     promote defense conversion and to create the new military 
     technologies of the future. Finally, the foreign technology 
     monitoring office can serve as an early warning system of 
     potential industrial weaknesses that might cause dangerous 
     vulnerabilities in future conflicts.
       When S. 4 comes to the Senate floor next week, we urge you 
     to support these initiatives which are so critical to 
     America's economic and military security. If we can provide 
     you with any additional information, please do not hesitate 
     to contact me. I look forward to working together.
           Sincerely,
                                                    Tyrus W. Cobb,
                                                        President.
                                  ____

                                               American Industrial


                                           Extension Alliance,

                                                 February 14, 1994
       Dear Senator Hollings, The Senate will soon be considering 
     Senate File 4, a bill that will directly impact the ability 
     of American industry to compete in world markets. This 
     important bill contains a section on manufacturing extension 
     that is designed to provide the United States with an 
     effective system of assisting industry in modernizing 
     technical, management and processing systems. There is 
     preponderance of evidence that our industries lag in 
     utilizing modern equipment and systems, and this federal 
     effort will bring cohesion to the disparate systems now in 
     existence.
       The members of the American Industrial Extension Alliance 
     are firmly behind efforts to strengthen this countries 
     technical assistance programs and bring this needed service 
     to all the states. The alliance members represent most of the 
     industrial extension programs that now exist, but we are well 
     aware of the size of the problem is beyond the capabilities 
     of these few programs. We support the position of the 
     National Coalition for Advanced Manufacturing and the 
     expanding Manufacturing Extension partnership at NIST.
       Your support in strengthening American manufacturing firms 
     by the passage of Senate File 4 will be appreciated.
           Sincerely,
                                                 David H. Swanson,
                                                        President.
                                  ____

                                     American Society for Training


                                              and Development,

                                                 February 4, 1994.
     Re S.4, The National Competitiveness Act of 1993.

     Member,
     U.S. Senate,
     Washington, DC.
       Dear Senator: The American Society for Training and 
     Development (ASTD), on behalf of more than 55,000 corporate-
     based human resources development specialists, urges your 
     support for S.4, the ``National Competitiveness Act of 
     1993,'' when it is considered on the floor in the coming 
     days.
       The ``National Competitiveness Act of 1993'' establishes 
     key underpinnings of a national technology policy based on 
     outreach to the private sector, the targeting of assistance 
     to small and medium-size companies, and the integration of 
     worker training with technology assistance.
       ASTD specifically supports provisions to create 
     Manufacturing Outreach Centers and expand the activities of 
     the existing Manufacturing Technology Centers. Enactment of 
     these provisions will help companies gain increased access to 
     manufacturing assistance, implement the best manufacturing 
     technology and processes at least cost, and train workers in 
     maximum utilization of technology and productions systems.
       ASTD is the world's largest association dedicated to 
     advancing workforce training in conjunction with 
     technological progress and the creation of high performance 
     workplaces. We look forward to swift passage of this 
     important initiative during the 2nd session of the 103rd 
     Congress as a critical step to improve U.S. competitiveness.
           Sincerely,
                                                  Curtis E. Plott,
                                                President and CEO.
                                  ____

                                           The American Society of


                                         Mechanical Engineers,

                                 Washington, DC, February 7, 1994.
     Hon. Bob Dole,
     Hart Building,
     Washington, DC.
       Dear Senator Dole: On behalf of the Technology Policy Group 
     of the American Society of Mechanical Engineers (ASME), I 
     urge you to support S. 4, the ``National Competitiveness Act 
     of 1993,'' which is scheduled to be brought to the Senate 
     floor this week.
       This important legislation will provide the underpinning 
     for a realistic national technology policy. It includes 
     provisions that support the development and use of 
     manufacturing technologies which are essential for continued 
     U.S. gains in productivity and industrial competitiveness. 
     The bill also calls for industry participation in the 
     development of advanced manufacturing program strategies 
     through the use of an advisory committee to assure that the 
     infrastructure and new knowledge gained from the program will 
     be effectively utilized by U.S. manufacturers.
       ASME has accorded competitiveness a high priority in our 
     1994 public policy agenda. This letter is written on behalf 
     of the Technology Policy Group, a group of ASME members with 
     expertise in the field of competitiveness, and reflects it 
     views, rather than an official position of ASME.
       Again, I urge your support of this legislation to further 
     the nation's industrial competitiveness.
           Sincerely,
                                                      John Parker,
                             Vice President, Government Relations.
                                  ____



                                     United States Activities,

                                                    March 4, 1994.
     U.S. Senate,
     Washington, DC.
       Dear Senator: On behalf of the 240,000 members of the 
     Institute of Electrical and Electronics Engineers, United 
     States Activities, I am writing to express our strong support 
     for passage of S. 4, the National Competitiveness Act.
       The programs and provisions contained in S. 4 are bi-
     partisan, and industry endorsed. The bill expands civilian 
     technology initiatives like the Advanced Technology Program, 
     started under the Bush Administration, that have the support 
     of the business community because they are industry-led, 
     cost-shared, and merit-based.
       In supporting passage of S. 4, we join a multitude of 
     electronics firms, manufacturing companies, and professional 
     societies that believe its provisions will help make U.S. 
     industry more competitive.
       Thank you for considering our views on this important piece 
     of legislation.
           Sincerely,

                                            Charles Alexander,

         Vice President, Professional Activities, and Chairman, 
           United States Activities Board.
                                  ____



                                               Honeywell Inc.,

                                Minneapolis, MN, February 7, 1994.
     Hon. Robert Dole,
     U.S. Senate, Hart Senate Office Building, Washington, DC.
       Dear Senator Dole: S. 4, The National Competitiveness Act 
     of 1994, will be coming to the Senate floor for a vote at any 
     time. As you know from our previous correspondence on this 
     legislation, Honeywell very strongly supports the bill. We 
     again urge you to vote for its passage as reported out of the 
     Senate Commerce Committee.
       Honeywell has been actively supporting the development and 
     passage of this legislation for over two years. We have 
     welcomed the leadership which the Congress has demonstrated 
     on measures to support US technology and manufacturing 
     competitiveness, and have been gratified that the 
     Administration and the Congress have been able to cooperate 
     effectively in the past year on this effort. These efforts by 
     Congress and the Administration have also gained a strong 
     consensus of support within the technology and manufacturing 
     community.
       Passage of the National Competitiveness Act represents a 
     vital and strategic investment by the US government in our 
     national competitiveness. As a high technology manufacturing 
     company, Honeywell has had direct and positive experiences 
     with the existing Commerce Department programs, such as the 
     Advanced Technology Program, which S. 4 seeks to strengthen. 
     We also see value in those measures in the bill which will be 
     of benefit to our small and medium-sized customers and 
     suppliers, such as Title II, which provides for a 
     Manufacturing Extension Program, among other initiatives.
       We sincerely hope the Senate will recognize and appreciate 
     the interests and strong support for the Competitiveness Act 
     which have been expressed by companies such as Honeywell 
     throughout this deliberative process, and will act decisively 
     to approve S. 4.
       If you would like further information concerning 
     Honeywell's views on specific elements of the legislation, 
     please do not hesitate to contact Susan Rochford, Director, 
     International and Technology Affairs, in our Washington 
     Office (202) 872-0495.
       Thank you for your kind consideration of our views.
           Sincerely,
                                                  Carl L. Vignali.
                                  ____

                                          Optoelectronics Industry


                                      Development Association,

                                                    March 7, 1994.
     Hon. Ernest F. Hollings,
     U.S. Senate,
     Washington, DC.
       Dear Senator Hollings: I am writing to express the support 
     of the Optoelectronics Industry Development Association 
     (OIDA) for S. 4 the National Competitiveness Act. OIDA was 
     formed in 1991 to improve American competitiveness in 
     optoelectronics, which includes fiber optic communications 
     systems, flat panel computer displays, optical storage (e.g. 
     CDs), and laser printers and scanners. These are key enabling 
     technologies for the nation's information infrastructure and 
     are critical technologies for the nation's defense.
       OIDA has conducted a major study of the technology needs of 
     the optoelectronics industry for the coming decade, and many 
     of the programs authorized by S. 4, support the highest 
     priorities of the industry. In particular:
       The Advanced Technology Program in the National Institute 
     of Standards and Technology (NIST) is an effective mechanism 
     for supporting industry-driven optoelectronics research and 
     development and is already having a significant impact.
       NIST intramural research supports key measurement 
     technologies that the optoelectronics industry needs.
       The Information Technology Applications Research Program 
     can help to expand the use of optoelectronics in hospitals, 
     schools, factories, libraries, and other organizations. This 
     will expand the markets for optoelectronics and will 
     stimulate greater private sector investment.
       We believe that this legislation is important for the 
     competitiveness of the U.S. optoelectronics industry--and the 
     nation--and support its passage. If you would like additional 
     information, please do not hesitate to call either me at the 
     above number or OIDA President Arpad Bergh at (201) 829-4938.
           Sincerely,
                                                  David W. Cheney,
                                               Executive Director.

  Mr. HOLLINGS. Mr. President, addressing these on February 9, the 
Advanced Technology Coalition endorsed S. 4. Smart people, using the 
expression of our distinguished colleague, not failures in the 
marketplace:
  The American Electronics Association, successes in the marketplace; 
the National Association of Manufacturers; the Modernization Forum; 
Microelectronics and Computer Technology Corp.; Honeywell; National 
Society of Professional Engineers; Business Executives for National 
Security--going down--Texas Instruments; Columbia University; Motorola; 
Intel; Cray Research; Electron Transfer Technologies; American Society 
for Engineering Education; Southeast Manufacturing Technology Center; 
Convex; Semiconductor Research; American Society of Engineering 
Societies; AT&T--all smart people. Smart people these are and 
successes, not failures in the marketplace--the National Coalition for 
Advanced Manufacturing--all smart people--the Council on 
Competitiveness--all smart people; not failures, but all successes. The 
chairman of that group is Paul Allaire, the chairman and CEO of Xerox; 
the Computer Systems Policy Project, Lewis E. Platt, chairman and CEO 
of Hewlett Packard--a smart individual, not a failure; a success in the 
marketplace.
  We go on down the list. The Business Executives for National 
Security, Tyrus W. Cobb, president, dated March 4; the AIEA, the 
American Industrial Extension Alliance, David H. Swanson, Ph.D., 
president--not dumb, a smart fellow, a smart fellow here; ASTD, the 
American Society for Training and Development, Curtis E. Plott, 
president and CEO--not dumb, a smart fellow; a success in the 
marketplace.
  All of these, successes in the marketplace, have endorsed S. 4.
  The American Society of Mechanical Engineers, John Parker, vice 
president; the United States Activities of the Institute of Electrical 
and Electronics Engineers, the IEEE, Charles Alexander, Dr. Charles 
Alexander, chairman of the United States Activities Boards; next, the 
Honeywell Corp., Carl L. Vignali, the senior vice president in charge 
of operations.
  We go right on down the list. The Optoelectronics Industry 
Development Association, David W. Cheney, executive director; the 
chairman being William Braun of Motorola. The president is Arpad Bergh. 
The treasurer is Roland Haitz of Hewlett Packard.
  I cannot get a more distinguished group than all of these particular 
endorsements, which we have now entered in the Record.
  So it is not politicians. It is the market force operating through 
the industry itself; it is the market force operating through the peer 
review and the merit selection and the actual individuals that we have 
in charge.
  I do not know of a better, more well-considered success story than as 
a result here of the report card that we have just gotten from the 
National Academy of Engineers.
  I reserve the remainder of my time.
  The PRESIDING OFFICER. Let the Chair correct himself. The Chair was 
in error in stating the time of the Senator from Missouri. It is 20 
minutes, rather than 27 minutes.
  Who yields time?
  Mr. DANFORTH. Mr. President, I do not know of any other speakers on 
my side. I do want to speak briefly if for no other reason than to give 
people the opportunity to call in if they do want to speak. If I hear 
from nobody, I intend to propose that we might consider yielding back 
the remainder of our time, but not quite yet. I would like to make just 
one comment.
  Mr. President, I think that it would be no surprise to many people in 
the Senate for me to say that this last week has not exactly been my 
favorite week in the Senate. But, Senator Hollings and I have had a 
very good relationship over the years and we have much work to do in 
the 7 months between now and when the Senate adjourns. We have 
telecommunications legislation, which I think is as important as any 
legislation that will be before the Senate. I think it is as important 
as the health care legislation. We are working on it and will continue 
to do so.
  And so the difficulties of last week are really behind us and I am 
glad we could work out an arrangement by which we bring this matter to 
a conclusion on the floor of the Senate.
  I think, though, for all the difficulty of the last week, it served a 
very useful purpose, because I think what it has done is to heighten 
the recognition in the Senate that there really is a serious issue out 
there, and it is an issue that I for sure have tended to bury on my 
list of priorities and I think maybe other Senators have as well. And 
the issue does have to do with how the Government relates to research 
and development. How do we feel about it? Do we believe that the 
Government should be directly involved, and, if so, how?
  Most of us think that, with respect to basic research, the Government 
should be directly involved, and it is; in NIH, for example. Most of us 
believe that when Government has a direct result that it needs--for 
example, national defense--the Government is going to be involved and 
that it should be involved.
  What we are talking about here is somewhere in between basic research 
and buying things for the needs of the Federal Government. We are 
talking about the business sector, the private sector of our economy, 
and how it functions and how products are developed and how products 
are manufactured and how products are brought into the marketplace. And 
that really is the issue.
  Some people believe that there is a very definite role for the 
Government to play in subsidizing research and development, in 
subsidizing it directly, in subsidizing it through venture capital 
operations; that the Government really should be doing more; that the 
marketplace has failed; that somehow the private sector is 
underinvesting. Other people feel that the Government really is not the 
answer, that the Government is not going to do it well.
  It is not just a matter of wasting money; that the Government is 
going to tend to invest in those things that do not make it in the 
marketplace. That is the justification for the program in the first 
place. And the Government is going to tend to continue investing in 
failed ideas in the future because of the propensity of those of us in 
Government not to give up on things as somebody with real money at 
stake would give up. So it is a very real issue and I think it is going 
to be a recurring issue about the role of Government in financing 
research and development.
  I happen to be the ranking member of the Trade Subcommittee of the 
Finance Committee. International trade has been an interest of mine 
ever since 1978. I was the chairman of the Trade Subcommittee when our 
party was in the majority. I was very active in every trade bill that 
has come before the Senate since the Trade Act of 1979. I have followed 
the negotiations that went on in Geneva and the agreement that has been 
initialed.
  What really hit me and what elevated this whole matter in my own mind 
was the change in the subsidies code which was pushed by this 
administration to provide that henceforth governmental subsidies for 
research and development would no longer be subject to countervailing 
duties up to a certain amount. I thought that that was and do believe 
that that was a major loophole in the subsidy code.
  I am concerned that Airbus is to be the model for the future, 
internationally and with this legislation here at home. So I do see a 
connection between S. 4 and what was done with respect to the 
negotiations of the GATT agreement. I think it is bad policy. I think 
it is a bad approach.
  I think that we are going to lose out if this is the way that other 
countries are going to operate. And I think if this is the way our 
country is going to operate, it may be necessary, in order to meet 
foreign subsidies, but that it is a real departure from the market 
system. When we depart from the market system, I think it is to the 
detriment of our economy and to the ultimate detriment of our people. 
That has been what this whole debate has been about.
  I think the debate, particularly this afternoon, has been a good one. 
I am very, very pleased especially that Senator Bradley and Senator 
Lieberman participated in it in their characteristically very well-
informed and articulate ways, because I think that they brought to the 
floor of the Senate, both Democrats in that case, two different views 
of the relationship between Government and the private sector in the 
doing of research.
  I hope that it is a matter that will continue to be debated, not only 
here on the floor of the Senate but in the media and by the American 
people.
  So, while it has been a very difficult 6 or 7 days--there is no 
question about that at all--I think that it served a useful purpose.
  The PRESIDING OFFICER (Mrs. Feinstein). Who yields time?
  Mr. HOLLINGS addressed the Chair.
  The Senator from South Carolina.
  Mr. HOLLINGS. Madam President, there is a fundamental difference 
between the distinguished Senator and myself about relief for that 
marketplace.
  I could almost go back to the founding days--``We the People . . ., 
in Order to form a more perfect Union.'' In part those efforts were 
directed against abuses of the marketplace. We found long since that if 
we allowed the marketplace to operate as it sees fit, we would have 
child labor. So we passed laws against child labor.
  This Government did it. Politicians did it. In a totally unfettered 
marketplace, we found out that big business would constitute all kinds 
of monopolies, so we passed our Robinson-Patman and the Sherman 
Antitrust Act against monopolies. We found the marketplace would not 
pay a decent, living wage--there is no question about it. So we 
continually, Republican and Democrat, look at it and say, instead of 
that marketplace just determining it, we invade that marketplace as a 
matter of public policy by creating a minimum wage.
  We go into health care, where the majority of the money--it is in the 
billions that we are talking about--is a Government program now, right 
this minute, with Medicare and Medicaid and medical research and all 
the other attendant parts of it. It has been well conceived. The 
trouble is just that the marketplace is gobbling us alive with the 11- 
to 12-percent increase in the cost each year, way over and above any 
kind of inflation. Marketplace is the problem for this Congress, right 
now, when we are talking about health care reform.
  We have the matter of safety. We legislated requirements for safe 
machinery and a safe working place under OSHA. We intervened to protect 
the environment. We did not depend on the marketplace to protect the 
environment. Heavens above, we would all be dead and gone the way they 
would pollute. We intervened in the marketplace with plant closing 
notice, parental leave, and many, many other things.
  At the beginning of our Republic, when we were largely a rural, 
agricultural nation, the British said, ``You go ahead as a fledgling 
colony, you have freedom, you produce what you can best and we in 
contrast will produce what we can best, and trade along those lines, no 
tariffs, no barriers.''
  Alexander Hamilton responded in his ``Report on Manufactures.'' He 
said, in effect, ``Bug off; we are not going to remain your colony.'' 
And the very first substantive bill that passed the first Congress on 
July 4, 1789, invaded the marketplace with tariffs. And with those 
tariffs of 50 percent on 30 different articles: iron, textiles, going 
down the list, we started building up our productive capacity. We did 
not leave it to the marketplace. In fact, we did not leave the rural 
market alone. We came in with agricultural subsidies way back in 1862, 
132 years ago.
  So we started with land-grant colleges, then continued to the 
enormously successful Agriculture Research and Extension Services; 
these are the models for the current bill. That is exactly what we have 
sought to accomplish for manufacturing, for technology, for the 
commercialization of our technology. And we did this some 6 years ago, 
in 1988. And it is working. We have gotten our report card in the form 
of glowing endorsements from all the technological industries and the 
leaders of America's industry, coming forth saying this is not a 
runaway grab bag. If it were anything akin to that, the Chamber of 
Commerce and other business groups would be in here opposing it.
  So the debate on the marketplace has been going on for many, many 
years. We found out we have to come in, not only on agriculture, not 
only on the aerospace industry, not only on the energy industry, not 
only on the semiconductor industry--because we put in multimillion 
dollar, billion dollar programs along these lines, that have worked--
but we have come along now with technology. We are saying, look at our 
competition in the global economy, the global competition. We are 
really behind the curve. We have to get out there in front and start 
playing catchup ball in a studied, deliberate, peer-reviewed, industry-
initiated manner. That is what S. 4 does and it does a wonderful thing 
to this marketplace. It generates all these jobs, the backbone of 
manufacture that has gone from 32 percent down to 16 percent, half of 
our GDP. And we claim to be the only remaining superpower in the world? 
Come on.
  We have this country, its national security, its foreign policy, can 
be compared to a three-legged stool. We have the one leg consisting of 
the values of our country, which are very strong. The second leg 
consists of military prowess and power. But the third leg--the leg of 
economic strength--has been fractured. All the reports say so and they 
have been saying so for 15 years around this country. So we finally 
started moving on a trade bill and now this technology bill.
  S. 4 moves in the right direction. I implore our colleagues, look at 
it as you have before. You have systematically done it. You have had 
hearings on it. You unanimously passed it out of the Commerce Committee 
back 2 years ago; passed it unanimously through this body in a 
bipartisan way. We did not wait. I do appreciate the two Senators 
referred to getting back to bipartisanship again. But there has been 
bipartisanship throughout. It was bipartisan again last year when we 
reported it.
  So here it is. There has been some differences with the other side of 
the aisle, but we have moved on. I do say to the Senator from Missouri, 
it is a pleasure to work with him. The differences we have had are 
past. We will be working together constructively and cooperatively on 
S. 1822, the Communications Act of 1994. We will have a good 
relationship. It is for his good, my good, the good of the Senate and 
the country that we do that, and I am glad to do it.
  But let us not talk of S. 4 as a new venture or new departure. We 
debated 26 amendments on everything from aircraft and pesticides and 
paperwork. But we did not get to the heart of this bill.
  Now we are getting, finally, to our debate on one particular issue. I 
was glad for that debate.
  The PRESIDING OFFICER. The time of the Senator has expired.
  Mr. HOLLINGS. I thank the Chair.
  The PRESIDING OFFICER. Who yields time?
  Mr. ROCKEFELLER addressed the Chair.
  The PRESIDING OFFICER. The Senator from West Virginia.
  Mr. ROCKEFELLER. I apologize to the Chair. I am a little bit out of 
sense of what my rights are, or lack of rights are, or what I should 
do. I would like to say a couple of things, but my time I am sure is 
gone.
  The PRESIDING OFFICER. The Senator from Missouri controls the time 
for the Senator from West Virginia, and there is 12 minutes and 31 
seconds remaining.
  Mr. HOLLINGS. We are out of time.
  Mr. DANFORTH. How much time does my colleague want, 5 minutes?
  Mr. ROCKEFELLER. If Senator Danforth will give me 5 minutes, I will 
take it.
  Mr. DANFORTH. I yield 5 minutes to the Senator from West Virginia.
  Mr. ROCKEFELLER. I do not want people to be swayed by his personal 
generosity in terms of their votes, Madam President. But it is just a 
very generous thing.
  Dr. John Carruthers, the head of Intel, testifying on behalf of the 
American Electronics Association, said:

       The early and mid-1980's were the age of startup, a period 
     when investments in high technology flourished. * * *

  But then he said:

       But for more than 5 years now, our Nation has failed to 
     produce a new generation of such companies. The reasons for 
     this precipitous decline are many, but chief among them has 
     been the alarming and growing inability of American 
     entrepreneurs to obtain seed and venture funding.

  The Civilian Technology Investment Program, which the Senator from 
Missouri wants to strike from this bill, which I hope will fail, is 
based upon the SBA's small investment program. It was created in 1958. 
It has worked. This program, if we are to defeat the amendment of the 
Senator from Missouri, would give us, for every $1 of Federal money put 
in, $6 of private sector money. We cannot under any conditions spend 
more than $50 million, if that is the final amount that is in the bill. 
Private venture capitalists have focused up to this point on what is 
called mezzanine financing, which is second stage--not startup, that 
the Intel focused on--types of money. Exactly what this program is 
designed to fill is that early funding when people have a good idea, 
small, medium businesses, but they cannot get the venture capital. 
Which is a fact. They cannot do it these days. That is what this bill 
is for and this section of the bill.
  The bill is flexible. The private sector must put up part of the 
money and share the risk. Under the Civilian Technology Investment 
Program the Government can share in the up side--which means they can 
get some money, and they will--and that can help to reduce the deficit.
  It seems to me one of the most obvious things that is good that needs 
to happen to our country, Madam President. I do not consider it 
controversial. I grew up in a Republican family that was not unknown 
for business entrepreneurship. I cannot imagine my great grandfather 
saying, ``Gee, this is a terrible idea.'' I think he would have thought 
this is a good idea.
  It seems to me American business is saying this is a good idea. They 
are saying that unanimously, with the exception of one group which 
represents more or less high-level venture capital people who do not 
have to worry about startup money.
  So I hope either the motion to table the amendment of the Senator 
from Missouri will succeed or, if it is an up-or-down vote, that the 
amendment of the Senator from Missouri will not succeed.
  I thank the Chair and I thank the Senator from Missouri. Of course, I 
thank the chairman, Senator Hollings, from South Carolina.
  Mr. DANFORTH addressed the Chair.
  The PRESIDING OFFICER. The Senator from Missouri.
  Mr. DANFORTH. Madam President, the committee report--and I am now 
speaking about the underlying bill--speaks of ``an era of strong 
international economic competition.''
  Then on page 3 of committee report it concludes that ``the Department 
of Commerce has a leadership role to play in this new era.''
  This whole debate is about whether or not we really believe the 
Department of Commerce has a leadership role to play in this new era. 
It is the judgment of this Senator that if we are relying on the 
Department of Commerce to lead us into a new era, we are going to be 
led in exactly the opposite direction.
  Madam President, seeing no other Senator who wishes to speak, I yield 
back the remainder of my time.
  The PRESIDING OFFICER. All time has either been yielded back or 
expired.
  Mr. HOLLINGS. 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. HOLLINGS. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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