[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]

 
                      NATIONAL COMPETITIVENESS ACT

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

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

  The Senate resumed consideration of the bill.

       Pending:
       (1) Brown amendment No. 1493, to institute a cost share 
     requirement for single businesses applying for funding under 
     the Advanced Technology Program of the National Institute of 
     Standards and Technology.
       (2) Brown amendment No. 1496, to amend rule 11 of the 
     Federal Rules of Civil Procedure.

  The ACTING PRESIDENT pro tempore. The time until 10 a.m. is equally 
divided and controlled by the Senator from South Carolina [Mr. 
Hollings] and the Senator from Missouri [Mr. Danforth] or their 
designees.
  Who yields time?
  Senator HOLLINGS addressed the Chair.
  The ACTING PRESIDENT pro tempore. The Senator from South Carolina 
[Mr. Hollings] is recognized.
  Mr. HOLLINGS. Mr. President, the concept of this measure, S.4, 
commenced a good 10 years ago.
  We have report after report from all the technology groups that you 
could possibly imagine who studied the need, and urged that the U.S. 
Government play a more affirmative role in promoting the development of 
technology. These groups include the MIT commission from Cambridge, MA, 
called the Commission on Industrial Productivity; the Council on 
Competitiveness; and the Critical Technology Subcouncil.
  Again and again these groups have reiterated that failure to confront 
this particular challenge what would result in the loss of some 2 
million jobs in the nineties.
  As a result, this Senator and others, the distinguished Senator from 
West Virginia, the Senator from Montana, and many others on the 
Committee of Commerce, started with the approach of trying to develop 
technology in the Department of Commerce.
  In the trade bill in 1988, and the Finance Committee asked each of 
the committees to report their contribution to our competitiveness in 
international trade and, more particularly, what each committee might 
have under its own discipline, for instance, technology under the 
Department of Commerce.
  So, we had a report and an amendment that was reported out 
unanimously in 1988 by the Committee of Commerce. It was included in 
the Finance Committee's work. We had then on the floor an amendment by 
our distinguished colleague from Ohio aimed at reorganizing the 
Department of Commerce with a different approach than what we in the 
Commerce Committee, had invisaged.
  My point here is we discussed it, we deliberated over it, we not only 
reported it out unanimously from the Committee of Commerce, but more 
particularly we debated this particular issue in 1988. That approach at 
that time was tabled, and the Department of Commerce was found to be 
the lead agency. And that was written into the 1988 law. The 1988 law 
included the technology extension activities, the Clearing house on 
State and local initiatives, the regional centers for the Tansfer of 
manufacturing technology and, of course, the Advanced Technology 
Program.
  So, the Department of Commerce was designated as the lead agency. And 
we had another authorization in 1990.
  In 1990, the committee reported out again, unanimously, the 
authorization for the National Institute of Standards and Technology, 
which included a 26-percent increase in the advanced technology 
program. It still was a modest sum of money.
  It was at that time then that the Bush administration finally picked 
up on the initiative and they moved to get America competitive in the 
field of technology.
  That bill was held up on the floor for a year by my former colleague, 
Senator Kasten of Wisconsin, who was trying to get, at that time, a 
product liability measure up for debate, and it was not until December 
1991 that we actually passed the NIST bill. It was held up for a solid 
year. But in December 1991, it passed. The House passed it then in 
February 1992, and on February 14, 1992, President Bush signed into law 
the authorization that we are now under and is presently law.
  I guess somehow it has been missed in this entire debate over the 
last solid week, that this is an ongoing program; that it was well 
conceived.
  John Young of Hewlett-Packard; George Fisher, then of Motorola; and 
other business leaders, say U.S. ``public policy does not adequately 
support American leadership in critical technologies.''

       Other nations already spend more nondefense R&D as a 
     percent of GDP than the United States, and they are steadily 
     increasing these levels. The United States needs to increase 
     support for R&D and focus more resources on nondefense R&D 
     that is commercially relevant.

  Well, commercial relevance is the concern of the Commerce Department. 
I emphasize this because time and again in the debate last week, the 
question was asked: Do we really want the Department of Commerce in 
this?
  We decided, you see, over 5 years ago that Commerce was the 
appropriate lead agency. And it has been recommended by the best of the 
best of minds in the fields of technology and industry.
  The report says:

       The most effective programs are those that encourage 
     sharing of the cost and results of precompetitive research 
     and that stimulate private-sector proprietary R&D and 
     commercialization.

  And, of course, that is exactly the course we followed. Specifically, 
we emphasized cost sharing, so you would not have picking winners and 
losers by the Government; but rather the industry itself, under this 
particular bill, must launch the initiative; industry must make the 
application; industry must come up with at least 50 percent of the 
funding. Indeed, experience has shown that industry puts up nearly 70 
percent of the money.
  And, at that time, on the counsel of the distinguished Senator from 
Missouri, we put in the matter of peer review, and we selected the 
National Academy of Engineers. So we have the merit selection; we have 
the requirement that industry initiate the activity. Industry brings in 
the money, then the projects get merit selection and peer review by the 
National Academy of Engineers; very deliberately done.
  But they found, again and again:

       Make technological leadership a central theme in the 
     administration's public communications effort and highlight 
     it in the President's annual State of the Union address, 
     budget submissions and other messages on national priority.

  So we also took in this particular bill the admonition of the Council 
on Competitiveness to make technological leadership a focus of the 
administration's public communications effort.
  We also provide for the information superhighway. None of this is 
political pork or political plum, or winners and losers, but rather all 
initiated by the industry itself.
  And that is why, Mr. President, every industry that is connected to 
technology and technological development has endorsed this bill. I have 
been in search of even one industry group that is opposed to it. We 
have not found a business group that is opposed to it.
  When the question was asked, should we put these technology programs 
in the Commerce Department, we debate it and reported out unanimously 
two or three times, debated on the floor and passed the Senate, passed 
it out again.
  So there is no new philosophy here. It is a steady philosophy, an 
intentional philosophy, an intention of the folks trying to play 
catchup ball for the United States of America in this global 
competition.
  I yield the floor and reserve the remainder of my time.
  Mr. PRESSLER addressed the Chair.
  The ACTING PRESIDENT pro tempore. The Senator from South Dakota is 
recognized.
  Mr. PRESSLER. Mr. President, this is a historic debate in the sense 
that we are struggling in the Senate of the United States as to which 
direction to go in terms of research and development and technology in 
our society. We are debating about a $2 billion to $3 billion 
authorization here over a period of the next 2 years. But, more 
importantly, we are wrestling with the question: How much should the 
Government contribute to research? Should the Government give subsidies 
and grants and low-interest loans to selected high-technology companies 
across the country?
  It has been a good debate. I salute the Senator from South Carolina 
for his leadership. I know he has his point of view. I salute our 
ranking member from Missouri, who has reservations about this measure.
  We are going to have a cloture vote at 10 o'clock, and I would guess 
that most Republicans will vote against cloture and most Democrats will 
for cloture. So there is a division by party here or by political 
philosophy, with some Members seeing Government's role as limited will 
vote not to proceed with the question, and those who believe in a more 
active Government role in terms of funding and participation will vote 
for it.
  Now, over my years in this body, I have observed that those 
activities in our free enterprise system that receive direct Government 
grants tend to atrophy and tend to not to do as well as those other 
industries that have to compete and change with the times.
  Indeed, we are sending people over to Russia as part of our aid 
program to teach them how to privatize industries, how to implement 
more free enterprise, how to get them to get the Government out of 
people's lives. There has been a change since the fall of communism. 
But it seems that in the United States we are moving more and more 
toward what we call socialism. The Clinton health-care plan, if adopted 
as originally proposed, would socialize about 10 or 12 percent of our 
total economy.
  But here today, again, we are not talking about socialism, but we are 
talking about the Government, under the Secretary of Commerce, giving 
out money and grants to selected high-technology companies, and many of 
which would be in the Silicon Valley of California, and Government 
would be picking the winners and losers. This has not worked well in 
many other countries.
  For example, let us take the drug industry. The drug industry has 
been under much attack in the United States, and I have been part of 
that. I have been a cosponsor of some of Senator Pryor's bills in the 
Special Committee on Aging. Our motivation is a concern that there has 
been some price gouging, some unfairness.
  On the positive side, most of the new pain-killing drugs that have 
been developed in the last 10 years have been developed in the United 
States or in for-profit laboratories. Nearly all the new drugs and the 
marvelous new procedures that have been developed have been created in 
a for-profit situation, with stockholders investments. Investors 
realize it is going to take 8 to 10 years to develop the drug and to 
get it through the FDA and to market it and to advertise it, and then 
there will be a financial reward at the end. So that ugly word to 
some--``profit'' --has meant a lot of comfort to a lot of medical 
patients.
  Europe has not produced new drugs at the same rate. They have 
produced a few, granted. Japan, with all of its research, has produced 
a lot of ``me-too'' drugs, but they have not produced very many new, 
innovative drugs.
  So I would say to you, if you are interested in finding a cure for 
AIDS, if you are interested in finding a cure for cancer, if you are 
interested in finding a cure for heart disease, the evidence is that it 
will probably come from a for- profit laboratory where people have 
invested their money and their resources, picked a target and have gone 
forward.
  For some reason, we believe that that is not true with the type of 
scientific and technological research we are talking about here today. 
The Government is embarking down a road of giving grants and loans to 
certain companies that the Government thinks are the best bets.
  I would cite another example. Those agricultural commodities that 
have received the most direct payments are in the worst shape in terms 
of overall agricultural competition. And those agricultural products 
that have not received direct cash payments, such as cattle, pork, 
soybeans, are in the healthiest state. They have had their tough times 
and their ups and downs, but they have proved to be the most profitable 
for farmers and ranchers in the last few years.
  There is also the issue of international competition. I know my 
colleague from Missouri has one example, where the Japanese Government 
picked a winner in Japan and it turned out to be a loser. But I would 
like to ask my colleague from Missouri to share any information he has 
about this. Can the Government pick winners and losers better than the 
free enterprise system?
  Mr. DANFORTH. Mr. President, let me thank my friend from South Dakota 
for getting right to the heart of the question that is before the 
Senate. The question really is do we believe that the Government has 
the special wisdom to lead the way--in advanced technology, especially? 
That is the heart of this legislation. It says right in the committee 
report that, ``We believe we are moving into a new era of 
competitiveness and the Department of Commerce is to be a leader in 
this movement.''
  It is my position that the Department of Commerce is not well 
equipped to do that, and market forces work better than Government in 
guiding our economy.
  I think the Senator is absolutely right. The leading example of a 
total failure is the decision of the Japanese Government, through MITI, 
which some hold out as an example of the way other countries and our 
country should operate. But MITI picked the wrong technology for 
getting into high-definition television. They were just absolutely 
wrong. The government said here is the way we should go. And it turned 
out to be the wrong way. So the Japanese Government not only wasted a 
lot of money, the Japanese Government marched that particular sector in 
exactly the wrong direction.
  Murray Weidenbaum, who is the former Chairman of the Council of 
Economic Advisers and a professor of economics at the Washington 
University in St. Louis, has other examples. He said at one point MITI 
attempted to get Sony out of the electronics market. He said MITI tried 
to keep Honda and Mazda out of the automobile business at one point 
because it underestimated the growth of Japan's automobile export 
market.
  Another example--I do not know whether people would call it a success 
or not, it certainly has been very injurious to a major industry in the 
United States--is aerospace. Airbus industry has never made a profit as 
of 1990 or 1991, I cannot remember which. But there was a major study 
of Airbus. As of that time the European governments had spent $26 
billion propping up Airbus through, among other things, research and 
development grants, the same kinds of things we are talking about here. 
Is it a successful product? It certainly is successful insofar as it 
has captured about a third of the commercial aircraft industry. But it 
is not successful as a business enterprise because Airbus has always 
lost money.
  One of the things that happens when the Government makes these 
decisions and the Government puts its dollars behind those decisions 
and people get employed in these businesses that are backed by 
Government, it is very, very hard for Governments to ever pull the 
plug. That I think is the situation with Airbus in Europe.
  I think the Senator has made a very good point.
  Mr. PRESSLER. I thank my friend and I thank him for his leadership on 
this issue.
  I would add another aspect to this whole debate that troubles me 
somewhat. Whenever our Secretary of Commerce has the ability to give 
money out in grants or low interest loans to companies, the specter of 
who is influencing the Government always arises. Last year we had a 
campaign reform bill on this floor. I thought it was a good campaign 
reform bill. I voted for it, although I was only one of seven on my 
side of the aisle who did, because I had an amendment in it that would 
eliminate political action committees. When campaign reform came up in 
the other body, the majority party in the other body tailored their 
bill so that it fits perfectly the people who are receiving PAC money 
and does not cut any campaign spending. It simply accommodates the 
practices that exist currently. Their bill has been called campaign 
reform and it is not campaign reform at all, it is incumbents 
protection reform--if anything.
  But when I look at the bill that is before us, it means the Secretary 
of Commerce is going to be selecting companies and handing them grants 
of taxpayers' money. Those companies will have political action 
committees, or will form them--many of these are in the computer and 
electronics industry where many have not yet formed PAC's. But they 
will form PAC's, they will raise money for candidates, they will be 
giving money. They will be asked to give money to the National 
Democratic Party, to the National Republican Party, and there will be 
newspaper articles written. You can say you heard it first on the 
Senate floor today. There will be many articles written saying how 
could Congress have set up such a conflict of interest? Because the 
very companies that are getting these grants will be asked for--and 
shaken down for--campaign contributions to the respective parties and 
candidates. You will be reading about this in 3 or 4 years if this bill 
passes.
  So it is yet another area where there is a conflict of interest. I 
wish there was a way to say none of the companies that receive these 
handouts from the Secretary of Commerce could make political 
contributions, but that would be a violation of free speech, I am told. 
I was going to offer an amendment to that effect.
  So I am concerned about that aspect. When taxpayers' money is handed 
out to selected companies, the average taxpaying citizen always has 
those questions.
  I view this debate as far more than the $2 billion we are talking 
about for the first period of time. I view this as a fundamental 
question about which direction we are going in terms of Government 
involvement in our research. I would be one who would be much more 
attuned to some form of a tax incentive system, perhaps, or some other 
incentive system. But for the Government to give out subsidies, it 
makes me very uncomfortable.
  I predict this bill may well become law. In 2 or 3 years we may 
regret this step because it will dry up private money for research. 
Government bureaucrats will make decisions regarding what type of 
research should be done rather than the marketplace. It is a 
fundamental debate as to which direction our country is going, not only 
in scientific research but in other areas.
  Mr. President, I shall vote against the cloture motion.
  The ACTING PRESIDENT pro tempore. The Senator from South Carolina 
[Mr. Hollings].
  Mr. HOLLINGS. Mr. President, before yielding to another distinguished 
colleague, let me emphasize here, just in an editorial years back by 
Business Week:

       The critics will chorus that government shouldn't interfere 
     with the marketplace. An industrial policy, they argue, puts 
     government in the position of picking winners and losers. An 
     industrial policy costs billions of dollars. An industrial 
     policy smacks of central planning, the critics charge, citing 
     the catastrophic failure of the Soviet command economy.
       A coherent, knowledge-based growth policy can avoid the 
     pitfalls the critics worry about. First, policies must be 
     designed in such a way that no particular industries are 
     favored. Parceling out research dollars via a scientific 
     peer-review process and requiring business to make matching 
     investments in some cases should protect the process from 
     being hijacked by political interests. Shifting federal 
     dollars out of other existing programs, such as military R&D 
     spending, is one way to hold down costs. No, America doesn't 
     want a Ministry of International Trade & Industry or a 
     Gosplan. But even in the former Soviet Union, the diversion 
     of good ideas to the defense industry produced some 
     unparalleled high-tech accomplishments, just as in the U.S., 
     the diversion of talent and resources to the defense sector 
     brought new advances. It's clear that when government sets 
     out to achieve something, the returns can be high. In the 
     post-cold-war world of ideas, industry and government can be 
     partners for growth.

  That is the present law. Just exactly as they say:

       No particular industries are favored. They must be 
     designed.

  We got it not for the semiconductor industry or Sematech, not for 
NASA and aerospace, not for Chrysler and alone for automobiles. This is 
for all of technology.
  Then second it said:

       Parceling out research dollars via scientific peer review 
     process * * *

  That is exactly what we have in the law today.

     and in some cases should protect the process from being 
     hijacked. Then shifting Federal dollars out of other existing 
     programs such as military R&D * * *

  That is exactly what we are doing. We brought over the Director of 
DARPA, Arati Prabhakar, who oversaw the transfer of some 85 programs in 
some 31 States, shifted from the Department of Defense to the 
Department of Commerce, and that process is what is ongoing. Yet they 
act as though these programs are something just being started. 
Nonsense. They have been on course for 5 years. They were the focus of 
very deliberate study. They are merit based and peer reviewed.
  I yield to the Senator from Connecticut.
  The ACTING PRESIDENT pro tempore. The Senator from Connecticut [Mr. 
Lieberman], is recognized.
  Mr. LIEBERMAN. I thank the Chair and I thank my distinguished friend 
and colleague from South Carolina.
  Mr. President, in this body, which has been called the greatest 
deliberative legislative body in the world, we sometimes end up, I 
suppose, by our deliberations, in a place that at least puzzles this 
Senator. I turn around and I scratch my head and say, ``How did we end 
up here?''
  I have that feeling this morning, which is to say: How did we end up 
divided essentially by party on this measure which has been and should 
be totally bipartisan? How did we end up at a point where we are in the 
midst of a filibuster, unfortunately, on partisan lines on a program 
that is not partisan and most critically of all is not seen as partisan 
by the thousands of workers in Connecticut who have been laid off who 
are looking forward to retraining programs but, more important, are 
looking forward to jobs that will only be created by programs supported 
by the kind of governmental partnerships created in this bill.
  I am puzzled and, in that sense, I am disappointed, and I hope in 
some way we can get back to a strong bipartisan ground of support for 
the creation of new high-technology jobs that so many thousands, 
hundreds of thousands of people in our country are going to need if 
they are going to get back to work.
  S. 4 did not spring miraculously out of nowhere. It is the progeny of 
a long history of American Government efforts--bipartisan efforts--to 
support economic growth. As has been stated repeatedly in this debate, 
probably the best example is American agriculture policy going back 
more than 100 years in which the Government has intervened much more 
aggressively than S. 4 suggests the Government involve itself in 
manufacturing technology. Those governmental programs of our private 
sector agriculture have created the most successful productive 
agricultural sector in the history of the world, certainly in the world 
right now.
  But in a more limited timeframe, S. 4 is the offspring of a 
bipartisan policy of governmental support for research and development 
that has been bipartisan since the end of the Second World War and its 
most notable success has been the growth and dominance of the American 
aerospace industry in the world.
  So I am troubled and I am puzzled again about how we ended up in such 
a partisan dispute on this bill.
  Let me go to more recent history. During the administration of 
President Bush, debate did break out about industrial policy, about 
taking some of these basic principles--bipartisan principles--of 
Government entering into partnership to support the growth of new 
businesses that would create new jobs. As has been pointed out here, 
both the Bush and Reagan administrations backed significant increases 
in research programs that were very important in creating new jobs. But 
there was also an understandable ideological concern about intrusions 
into the marketplace.
  The Bush administration, particularly, enunciated a series of ground 
rules for when and how it was appropriate for Government to play a role 
in R&D. They never, in my opinion, by all the documents, had any doubt 
about whether or not the Government should play a role in research and 
development.
  I quote, Mr. President, from the 1993 final budget submitted by the 
Bush administration in the section ``Enhancing Research and 
Development.''

       The Federal Government has a long history of funding 
     research and development with the goal of spurring 
     innovation. It is widely acknowledged that research and 
     development investments lead to new knowledge and innovation, 
     which in turn leads to economic growth. There is also strong 
     analytical evidence that research and development is an 
     important contributor to productivity growth.

  And it goes on and it goes on and it goes on.
  Mr. President, what is most significant, as I look back at the Bush 
administration, is that that administration, speaking particularly 
through Dr. Bromley, who was the science adviser, enunciated a series 
of ground rules for when and how the Government should play a role in 
R&D without getting into this business of winners and losers. There 
were clear ground rules:
  One, while the Government should support technology development, its 
support should occur at what the Bush administration called the early 
precompetitive stage, before it gets commercial, before it gets into 
the marketplace, so the Government was not intervening to help one 
marketplace competitor against another, which would be picking winners 
and losers.
  Second, the Bush administration said that it wanted technology 
investment decisions to be led by industry, not by Government. And it 
wanted all investment decisions to be peer reviewed to help ensure 
quality programs were selected.
  Third, the Bush administration wanted to make sure that the 
investments Government made in research and development made sense; 
that they were not just economic dead ends in the mind of some 
Government bureaucrat.
  So the Bush administration required that every Government dollar in 
research and development in these programs had to be matched by an 
industry dollar; industry had to be ready to absorb an equal and, in 
fact, a primary, a first risk, 50-50, on these new investments.
  In my opinion, Mr. President, those are strong ground rules, those 
are sound grounds rules and they were supported by Congress. But please 
note that each and every one of these ground rules is for governmental 
involvement in stimulating research and development, and the growth of 
high-technology jobs that was enunciated by the Bush administration is 
reflected, is fundamental to S. 4, this bill that is now the victim of 
a filibuster. That is why I say I do not know how we ended up in this 
partisan division on this bill, which is the logical continuum from 
years of bipartisan support.
  Mr. President, the Bush administration spoke on behalf of these kinds 
of programs, not just in the principles that I have described, but they 
put their money where their mouth was.
  In the final Bush administration budget, two of the programs that are 
supported in S. 4 were recommended for substantial increases. The 
Advanced Technology Program recommended fiscal year budget 1992 of 
$35,900,000; recommended increase, almost twice, to $67,880,000 
recommended by the Bush administration. Manufacturing technology 
centers and outreach, 1992 budget, $10,300,000. The final Bush 
administration budget, $18,187,000, almost a doubling of the 
recommendation.
  So there has been long bipartisan support for the basic elements 
contained in this bill. These manufacturing technology extension center 
programs were begun under President Reagan. They are based on a 
longstanding and successful effort in agriculture that dates back to 
the 19th century. The Manufacturing Extension Center Program is, in 
many ways, a traditional small business program similar to the programs 
that both parties have supported for years for small businesses.
  The Advanced Technology Program was also started under President 
Reagan. Again, this is a major part of S. 4 that we are trying to 
support here.
  The business community strongly supports this program. This program 
is led by the private sector, not by Government. It is designed to 
build a bridge between basic research and technology development. It is 
comparable to many of the R&D programs both parties have supported in 
many fields for many years.
  Finally, this bill creates a pilot program called the Civilian 
Technology Investment Program, but this again did not spring out of 
nowhere. This program builds on an old bipartisan idea. It is based on, 
and would be administered by, the Small Business Administration's Small 
Business Investment Company Program, which dates back to the 1950's and 
has strong bipartisan support.
  Mr. President, I am not just puzzled and troubled, disappointed by 
this partisan division, but I am pained by it because I know how much 
the thousands of workers in Connecticut, laid off by Electric Boat, 
Pratt & Whitney, Aetna, and a host of other big companies that have 
downsized in this recession, good people, hard-working people, skilled 
people, want to go back to work, whose families need them to go back to 
work, who know that their jobs ultimately will have to come from the 
private sector, and who will be benefited by the kinds of governmental 
programs, precompetitive of the private sector, that are part of this 
bill.
  So, Mr. President, I hope that as we approach this cloture vote and, 
if it does not succeed in achieving cloture, the one that follows it, 
our friends and colleagues on the other side of the aisle will step 
back, look at the bipartisan history and presence of this whole concept 
of S. 4, and once again find a way to join with us on this side of the 
aisle to create a bipartisan future that will not intervene in the 
marketplace but will help the market create the jobs that our 
constituents so desperately need.
  I thank the Chair, and I yield the floor.
  The ACTING PRESIDENT pro tempore. Who yields time?
  Mr. HOLLINGS. How much time do I have?
  The ACTING PRESIDENT pro tempore. The Senator has 3 minutes and 58 
seconds.
  Mr. HOLLINGS. I yield to the distinguished Senator from Arkansas.
  The ACTING PRESIDENT pro tempore. The Senator from Arkansas [Mr. 
Pryor] is recognized.
  Mr. PRYOR. Mr. President, I will try to be brief because we have only 
a few minutes.
  Mr. President, I do not quite know or understand what has happened to 
this piece of legislation. This is one of those mystery events that 
takes place every once in a while in the legislative process. This 
legislation came to the floor, from this Senator's impression, at least 
having broad-based support from both sides of the aisle. Something 
happened. I do not know exactly what, as I said. But here we have the 
National Association of Manufacturers writing a letter to all Members 
of this body talking about the necessity of S. 4.
  Mr. President, I ask unanimous consent to place this letter in the 
Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                              National Association


                                             of Manufacturers,

                                    Washington, DC, March 9, 1994.
     Hon. David H. Pryor,
     U.S. Senate,
     Washington, DC.
       Dear Senator Pryor:  The National Association of 
     Manufacturers (NAM) supports S. 4, the National 
     Competitiveness Act, and urges you to vote for its passage. 
     This legislation will markedly enhance the ability of U.S. 
     manufacturing firms to access and adopt modern manufacturing 
     technologies and techniques. It does so by improving the 
     coordination of existing, yet unconnected, institutions at 
     the federal, state and local levels. The industrial extension 
     network provided for by S. 4 would be a resource that 
     companies of all sizes and sectors could use to help 
     modernize their manufacturing operations. The result will be 
     a stronger manufacturing base and a stronger U.S. economy.
       The National Competitiveness Act also builds on existing 
     legislation, championed by then-Senator Gore and signed into 
     law by President Bush, that boosts research and development 
     efforts in the area of high-performance computing and 
     networking. High-performance computing will be a key generic 
     technology underpinning our 21st century information 
     infrastructure.
       The agenda for improving U.S. competitiveness does not end 
     with passage of the National Competitiveness Act, but we 
     believe enactment of S. 4 will be a significant step in the 
     right direction. Again, we urge your support for this 
     legislation.
           Sincerely,
                                                    Paul R. Huard,
                                            Senior Vice President.
  Mr. PRYOR. Mr. President, also a letter from the Advanced Technology 
Coalition talking about the importance of job creation and moving from 
a defense-based economy into the private sector, and what we can do and 
what we must do as a country.
  Also, the Council on Competitiveness supports S. 4 in a letter dated 
March 7. This is not something that came in last year or in January. 
This is a very recent indication of this particular Council on 
Competitiveness and their support for S. 4 now before the Senate.
  Mr. President, I ask unanimous consent to have printed in the Record, 
in addition to those three letters in support of S. 4, a letter from 
the National Coalition for Advanced Manufacturing, once again a strong 
vote in support of S. 4 in its present form.
  Also, the American Association of Engineering Societies. I think that 
we need to read a paragraph from it.

       There is no question that investment in technology fosters 
     productivity, economic growth and creation of high quality 
     jobs. We support S. 4 because it represents a balanced 
     effort--

  I repeat that, Mr. President--

     a balanced effort to strengthen the U.S. civilian technology 
     enterprise that forms the core of our global industrial 
     competitiveness.

  Mr. President, I hope our colleagues will reflect, look back, use a 
little common sense and some wisdom, and put aside some of the rhetoric 
that has been used in this Chamber for the last few days. I hope we 
will vote for cloture so that we can have a vote on this legislation. 
It has strong support; it merits support; and it justifies the support 
of this body. I hope our colleagues will support cloture.
  There being no objection, the letters were ordered to be printed in 
the Record, as follows:

                                Advanced Technology Coalition,

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


                                   Council on Competitiveness,

                                    Washington, DC, March 7, 1994.
     Hon. David Pryor,
     U.S. Senate, Washington, DC.
       Dear Senator Pryor: 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 our 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.
                                  ____

                                            The National Coalition


                                   for Advanced Manufacturing,

                                 Washington, DC, February 8, 1994.
     Hon. David Pryor,
     U.S. Senate, Russell Senate Office Building, Washington, DC.
       Dear Senator Pryor: 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.
                                  ____

                                    Washington, DC, March 3, 1994.
     Re: National Competitiveness Act (S.4).
     Hon. David Pryor,
     U.S. Senate, Russell Senate Office Building, Washington, DC.
       Dear Senator Pryor: On behalf of the Engineers' Public 
     Policy Council of the American Association of Engineering 
     Societies (AAES), I am writing to express our strong support 
     for passage of the National Competitiveness Act (S.4).
       AAES is a multidisciplinary organization dedicated to 
     coordinating the collective efforts of over 800,000 members 
     represented by 28 engineering societies to advance the 
     knowledge, understanding and practice of engineering.
       There is no question that investment in technology fosters 
     productivity, economic growth and the creation of high 
     quality jobs. We support S.4 because it represents a balanced 
     effort to strengthen the U.S. civilian technology enterprise 
     that forms the core of our global industrial competitiveness. 
     S.4 seeks to leverage the efforts of industry by increasing 
     authorized funding levels for the Department of Commerce 
     Advanced Technology Program which supports the development of 
     industry-led, pre-competitive technologies on a 
     competitively-awarded, cost-shared basis. The legislation 
     would also bolster federal and state industrial extension 
     programs across the country that provide technical expertise 
     and help small and medium-sized companies adopt modern 
     manufacturing technology.
       S.4 was approved by the Senate Commerce Committee in May, 
     and the bill was modified to meet the concerns of industry 
     and other parties. The legislation has the strong backing of 
     the Clinton Administration and thousands of U.S. 
     manufacturers. The House counterpart to S.4 (H.R. 820) passed 
     on May 19.
       We believe a vote for S.4 is a vote to help make U.S. 
     industry more competitive. And if the bill is debated on its 
     merits, we believe it will receive strong bipartisan support. 
     Attached is a copy of the testimony we presented to the 
     Senate Commerce Committee in March.
       Thank you for considering our views on the importance of 
     this legislation to the engineering community.
           Sincerely,
                                                  M. Jack Ohanian,
                                                   AAES, Chairman.
  Mr. PRYOR. Mr. President, I yield the floor.
  Mr. DANFORTH. Mr. President, how much time is remaining?
  The ACTING PRESIDENT pro tempore. The Senator from Missouri has 13 
minutes 57 seconds.
  Mr. DANFORTH. Mr. President, if the Chair would notify me when 10 
minutes have expired, I would appreciate it.
  Mr. President, let me attempt to answer some of the questions asked 
by various Senators but especially by the Senator from Connecticut.
  There is no doubt that research is very good, and there is no doubt 
that technology is very good; that they do promise great things for the 
future of this country, and that they are the pride and joy of this 
country.
  That really is not the issue. The issue is what is to be the role of 
Government? To what extent should we in Government get ourselves 
entangled in the process of research and development decisionmaking 
which otherwise would take place in the private marketplace?
  I would like to make about three points with respect to this 
legislation.
  The first has to do with overall cost. It is a little bit of apples 
and oranges, I suppose, in that there are brand new programs which are 
created in this bill. But in the areas covered, in the general thematic 
areas covered in this legislation, this bill represents a very dramatic 
increase in dollars.
  I do not think there is any doubt about that. This is not just 
ratcheting up or building on something that has been going on in the 
past. This really is an increase in dollars. In 1993, $389 million were 
appropriated for these programs--389. In 1994, the figure has grown to 
526--$526 million, and this bill would authorize $1.37 billion for 
1995, and $1.478 billion for 1996.
  That is, I submit, not something that is just more of the same. But 
it is a fundamental change in the Government's willingness to involve 
itself in what would otherwise be private sector research and 
development.
  Now, I would like to discuss two programs that I think are the heart 
of the problem with this legislation. The first is the so-called 
Advanced Technology Program.
  The Advanced Technology Program began in 1990. In fiscal year 1989, 
nothing was spent on the Advanced Technology Program. It began in 1990 
as a $10 million program. In 1991, it grew to almost $37 million. In 
1992, it grew to $49.5 million; in 1993, to almost $68 million. This 
year, it has grown to $200 million, and in this authorization for the 
Advanced Technology Program, we would authorize $475 million for 1995 
and $575 million for 1996. In other words, this is a program which 
started from nowhere and we would take it up for 1996 to a $575 million 
authorization.
  This is a program which provides direct grants to selected businesses 
doing research and development. That is the whole point of the grant. 
It is selective grants to those businesses that are chosen, that are 
selected, picked out as being beneficiaries of the program.
  Are we in a position, even if we think that this is a good idea--I do 
not happen to think it is--but even if we think that it is a good idea, 
is this the time for such a major increase in the amount of funding of 
this program?
  This is a GAO report that was made to the ranking minority member of 
the Committee on Science, Space, and Technology in the House of 
Representatives, Congressman Walker, last September. I want to say this 
is last September. It is now 6 months later. We have checked with the 
General Accounting Office and asked them if they still stand by this. 
My understanding is that they do. But let me just read one sentence 
from this report.

       However, the small number of completed projects and other 
     factors impede a program of valuation of ATP.

  So the General Accounting Office says as of September we are not in a 
position to make a value judgment quite yet on whether this program 
works, and we would carry it in this legislation from $200 million to 
$575 million over a 2-year period of time.
  This program, the ATP present program, in fact is unlike other ways 
in which Federal Government has spent money for research. I have a 
document which is entitled ``The Advanced Technology Program, an Engine 
for Enhancing U.S. Economic Growth,'' and it is my understanding that 
this is a publication of the Commerce Department. I just want to read a 
paragraph from the document.

       Historically, the Federal Government has focused R&D 
     funding on support of, one, basic research, primarily at 
     universities via NSF, NIH, and mission agencies, and two, 
     technology development to meet specific requirements of the 
     mission agencies such as DOE, NAFTA and DOD.

  Then it goes on and says:

       In contrast, the ATP is open to proposals from industry in 
     all areas of technology.

  In other words, this is not basic research money--maybe 
universities--and it is not research for the purpose of a product that 
the Government needs. This is getting involved in the development or 
potential development. It is down the road, somewhere between basic and 
actually producing the product in the private sector. It is a different 
kind of research, a different kind of involvement by the Federal 
Government in business.
  The second program that I would like to call the attention of the 
Senate to is the Venture Capital Program. This would have a $50 million 
authorization for each of the 2 years of this authorization bill for a 
grand total of $100 million. But I would like to call the Senate's 
attention to the committee report which is on everybody's desk, and 
especially to the bottom of page 20 and the top of page 21 of the book 
because what the committee report says is what we allow venture capital 
companies to do is to borrow money with the Federal Government 
guaranteeing the loan.
  So this is not just a $100 million program. According to the 
committee report, and I really suggest people read it:

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

  That is the point of doing this program, $300 million in the first 
year, $300 million in the second year, a total of $600 million in loan 
guarantees with the Federal Government getting in the business of 
venture capital--venture capital companies coming to the Commerce 
Department and the Small Business Administration getting licensed if 
they meet the right standards, and then getting loan guarantees or 
grants or stock being bought by the Federal Government.
  I think venture capital is very important. But I question whether we 
want to make venture capital decisions here in Washington, either in 
the Commerce Department or the Small Business Administration.
  Mr. President, I would simply conclude by saying this really is new. 
This is new in the total amount. It is new in concept. It is new in the 
Federal Government's willingness to get involved in applying its wisdom 
to what would otherwise be private sector decisions with respect to 
research and development for product development. I think it is a 
mistake. If the Senate wants to do it, it is my opinion it should do it 
with its eyes open after sufficient debate.
  Mr. HOLLINGS. Mr. President, do I have any time remaining?
  The PRESIDING OFFICER (Mr. Dorgan). The Senator has 52 seconds.
  Mr. DANFORTH. I yield the Senator 1\1/2\ minutes of my time.
  Mr. HOLLINGS. I appreciate the courtesy of the distinguished Senator.
  How can it be new, Mr. President? In 1980, we instituted the 
Competitiveness Policy Council. They were appointments by the Congress 
and President Bush. President Bush appointed Erich Bloch, the 
distinguished fellow who had been President Reagan's National Science 
Foundation Director, and he was head of the Critical Technology 
Subcouncil. I read from there just one section.

       The Government should reorient its own R&D spending from 
     purely military to civilian and dual use R&D. At the height 
     of the cold war, almost two-thirds of all Government R&D went 
     for narrow military purposes. The ratio has already declined 
     to less than 60 percent, and should fall to 50 percent in the 
     coming years as major defense systems are delayed or 
     canceled. The reductions in development and testing budgets, 
     a range of perhaps $4 billion to $8 billion, should be 
     applied to civilian and dual use R&D. Defense research and 
     exploratory development should be kept strong. But the new 
     R&D budgets should also emphasize generic technologies 
     including new materials, biotechnology, computers, especially 
     manufacturing processes.

  And continuing:

       Expanding the Advanced Technology Program in the Department 
     of Commerce to an annual program level of about $750 million.

  We do not have $750 million for any of these entities. Yes, we go in 
NIST from $226 million to $320 million. That is the old Bureau of 
Standards. We go from the extension centers, from $30 million to $70 
million. We go from the Advanced Technology Program, which this minute 
is $199 million, to $475 million. They say take the R&D from DARPA and 
defense, and put it over in Commerce. They recommended that we fund it 
at $4 billion to $8 billion, and we are under $1 billion.
  I thank the distinguished Senator.
  Mr. DANFORTH. Mr. President, again, reading from the Commerce 
Department's publication, this one called the National Institute of 
Standards and Technology and Investment in U.S. Economic Growth, one of 
the paragraphs is:

       The cross-hatch bars on the following figure show the 
     administration's planned ATP budget from FY 1994 through FY 
     1997. The planned short increases will enable a substantially 
     higher Federal investment in technology with strong 
     commercial application as called for by the Clinton 
     Administration's economic plan. The economic plan as 
     described in the February 1993 document entitled ``The Vision 
     of Change for America and Technology for America's Economic 
     Growth, a Direction to Build Economic Strength'', proposes a 
     substantial expansion of the ATP program over the next 4 
     years.

  Also, President Bush took the position in 1992 that he would veto 
what was then called the National Competitiveness Act of 1992.
  But, it makes it sound like it is a big partisan thing, Republicans 
and Democrats. I do think it is a difference in economic philosophy. I 
do think it is a basic difference in policy dealing with the degree to 
which the Federal Government should involve itself in research and 
development activities in the private sector.

                          ____________________