[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.
____________________