[Congressional Record Volume 141, Number 200 (Friday, December 15, 1995)]
[Senate]
[Pages S18702-S18711]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 1996--CONFERENCE 
                                 REPORT

  Mr. THURMOND. Mr. President, I submit a report of the committee of 
conference on H.R. 1530 and ask for its immediate consideration.
  The PRESIDING OFFICER (Mr. Craig). The report will be stated.
  The legislative clerk read as follows:

       The committee of conference on the disagreeing votes of the 
     two Houses on the amendment of the Senate to the bill (H.R. 
     1530) to authorize appropriations for fiscal year 1996 for 
     military activities of the Department of Defense, to 
     prescribe military personnel strengths for fiscal year 1996, 
     and for other purposes, having met, after full and free 
     conference, have agreed to recommend and do recommend to 
     their respective Houses this report, signed by a majority of 
     the conferees.

  The PRESIDING OFFICER. Without objection, the Senate will proceed to 
the consideration of the conference report.
  (The conference report is printed in the House proceedings of the 
Record of December 13, 1995.)
  Mr. THURMOND. Mr. President, I am pleased to present the conference 
agreement on the National Defense Authorization Act for fiscal year 
1996 for approval by the Senate.
  This conference agreement contains a broad range of authorities that 
are essential for the men and women who now serve in our Armed Forces, 
and for the effective operation of the Department of Defense. It is my 
hope that the Senate will pass this conference report, and the 
President will have the wisdom to sign it into law, because the 
important authorities it contains will significantly benefit our Armed 
Forces and the failure to enact these authorities will significantly 
disadvantage our troops. I am pleased that the House passed it today, 
267 to 149.
  I want to make sure my colleagues and the administration clearly 
understand that this is a period of high risk and exceptional danger 
for our military men and women. This is not the time to make defense a 
political issue. I want to caution my colleagues and the administration 
in the strongest terms not to politicize this bill at a time when the 
effects of such an action will be amplified to a high degree for every 
individual soldier, marine, sailor, and airman who is now deploying as 
part of the implementation force in Bosnia.
  The authorization bill contains abundant important elements of 
authority for programs, systems, acquisitions, administration, and 
operations, and its passage will ensure that the Department will have 
the best possible chance to conduct its work as efficiently as 
possible. Likewise, failure to pass the authorization bill will 
encumber and disadvantage the Department unnecessarily.
  The President has committed more than 30,000 uniformed men and women 
to a hazardous and lengthy operation in the former Yugoslavia. I 
believe no one doubts that he is sending our troops in harm's way. Some 
of these people may lose their lives in hostile actions and accidents. 
The President and the Congress must make every effort to ensure that 
nothing--absolutely nothing--is done to jeopardize or impede them in 
any way.
  The Senate just passed a resolution to support these men and women 
unequivocally. The Senate has committed itself to providing our troops 
with all the necessary resources and support to carry out their mission 
and ensure their security. Although the dollar resources for defense 
are addressed in part in the appropriations bill, which has been 
enacted, the detailed guidance and authority to conduct the business of 
the Department of Defense, and to implement badly needed improvements, 
and to award new contracts and take care of families, are all contained 
in the authorization bill.
  I would agree with the recent observation of my colleague from 
Vermont, Senator Leahy, who commented during the debate on veterans 
appropriations that he found ``a number of ironies, as I speak, 
American troops are being deployed in Bosnia. Every Senator who came to 
this floor, debating the deployment of our troops pledged support for 
them.'' Mr. President, I find it ironic that any Senator would consider 
blocking or voting against the defense authorization at this time or 
attempt to use this bill for political purposes. Politics must stop at 
the water's edge when our forces are deployed to a hostile fire area.
  Mr. President, it had been my impression that the Committee on Armed 
Services spent the last 3 months working in what had been its 
traditional bipartisan manner to reach a mutually acceptable conference 
agreement. I am now disappointed to learn at this late date that the 
minority have felt excluded from the conference negotiations. I want to 
assure my colleagues that was not my intent. I am disappointed that the 
bipartisan atmosphere of the committee may be about to be compromised 
and jeopardize the defense authorization bill.
  Mr. President, I would now like to turn to the substance of this 
bill. This agreement is in line with the priorities we established last 
January. I would summarize these priorities by saying there is a 
serious need to revitalize our Armed Forces in order to ensure our 
Nation remains clearly able to deter and, if necessary, to counter any 
future threat to stability and security. This legislation provides the 
direction and authority for that revitalization.
  The conference agreement authorizes a 2.4 percent pay raise for the 
uniformed services, including the 20,000 men and women who will be 
deployed in Bosnia and the thousands who will support them. If this 
agreement does not become law--and I want to repeat this, if this 
agreement does not become law--they will not receive this increase, and 
military pay will lag even more than it does already. I find it 
unfortunate that the administration would choose to block this pay 
raise for the men and women it is now sending to Bosnia.
  This agreement authorizes badly needed quality of life projects that 
are essential to family life and the retention of high quality people. 
It authorizes important improvements to military family housing, 
barracks, dining facilities, and work areas. Some critics of this bill 
would have us believe these authorities are unnecessary or extravagant. 
Mr. President, as we stand here today in the comfort of this Chamber, 
there are military men and women who are standing in the mud, exposed 
to rain and snow while they maintain their vehicles, because they do 
not have concrete hardstand in their motor pools. There are military 
men and women who are living in barracks that are 
substandard. Improvements will not be available unless this agreement 

[[Page S18703]]
is enacted. I want to repeat that: Improvements will not be available 
unless this agreement is enacted.

  This bill also contains the authority to reform the acquisition and 
procurement processes in accordance with the general effort to 
streamline government. These reforms will enable the services to obtain 
new equipment, supplies, and commercial products quickly and 
efficiently, instead of having to wait for the bureaucracy. It also 
reforms the process for managing the procurement of the information 
technology which provides our front-line troops with the latest and 
best information about their situation.
  I would like to point out that all the acquisition reform provisions 
contained in sections D and E of the bill will be lost if the 
conference agreement is not enacted. Federal agencies will not be able 
to acquire technology from the commercial sector rapidly. The 
administration will take the blame for failing to enable reform, 
despite their extensive rhetoric about how such reforms are needed.
  I am pleased that the conferees agreed that the military services 
have been underfunded and, in many cases, overextended, and that these 
problems had to be corrected. It is difficult to make the case, as some 
have tried, that the budget proposed by the administration is adequate 
in light of testimony by the Comptroller of the Department of Defense 
that defense is underfunded by approximately $50 billion. The General 
Accounting Office has concluded that the shortfall is actually closer 
to $150 billion. This legislation takes a step toward correcting this 
shortfall by authorizing $7 billion above the budget request. This is 
only a small amount of the deficiency.
  The additional budget authority is also necessary because the demands 
placed upon our military in the past 2 years have been greater than 
their budgeted requirements. These demands came at a time when the 
force was being reduced in the most dramatic drawdown since the end of 
the Second World War, and often exceeded the operating tempo of the 
cold war years. As a result, current readiness declined late last year 
and funds were moved or budgeted by the administration from future 
readiness accounts to current readiness accounts in order to prevent 
further movement toward a new hollow force.
  The Committee on Armed Services took note of the decline and added 
funds in this agreement to some current readiness accounts. However, I 
would like to stress again to my colleagues that the greater problem in 
readiness is not in the current readiness accounts but in modernization 
and procurement. These accounts remain significantly underfunded, and I 
am concerned that our Armed Forces may not have the modern, up-to-date 
equipment they will need to overmatch any potential adversary.
  Procurement funding has declined by 44 percent since 1992 and 
procurement is at the lowest level as a percentage of the budget since 
the years prior to the Second World War. This means that many basic 
essentials are not being bought in sufficient quantities to meet 
requirements and we are not investing today to achieve savings in the 
future. This also means the services must spend more of their budgets 
to keep older systems in operating order. The Chairman of the Joint 
Chiefs of Staff has stated there is a serious deficiency in 
procurement, and this agreement takes a step toward resolving that 
deficiency.
  Our Armed Forces were able to prevail in the Gulf war because they 
had superior equipment that had been developed, built, and fielded long 
before the threat of an Iraqi invasion emerged. Our military men and 
women were superbly trained because we recognized the inherent value of 
keeping our military trained and ready, not because we planned to fight 
a war with Iraq. This experience serves to reinforce the lesson that 
you cannot sacrifice future readiness in order to save current 
readiness. Both must be funded adequately, or both will be lost.
  That is the situation we confronted as we approached our work this 
year, and we took our time in order to get it right. By proceeding 
carefully and deliberately, the conferees ultimately achieved a 
responsible, thoughtful, and effective authorization bill. Although 
this legislation will serve as a roadmap to guide our national security 
into the 21st century, it is not all that I had hoped for, and our task 
is not yet finished. However, this legislation addresses future 
readiness requirements by adding substantial funds to procurement so 
that our forces will have superior, modern systems ready for any future 
conflict.
  The budget request raised grave concerns about the Navy's future 
force structure, but the conferees addressed the most serious shortages 
in the area of seapower. The funds requested for shipbuilding were at 
the lowest level since before 1950 and the number of ships, three, was 
the lowest number since the Great Depression. Next year's shipbuilding 
budget is even lower, and the Navy's 6-year shipbuilding plan will not 
sustain a fleet of 200 ships, let alone the 335 needed to meet the 
administration's own bottom-up review force structure goals. 
Shipbuilding budgets in the period beyond the 6-year plan will have to 
reach historical highs of $13 to $15 billion just to catch up.
  By utilizing the additional resources made available for defense by 
this year's budget resolution, the conferees were able to add $1.5 
billion in order to double the number of ships that will be bought this 
year. There is now authority to procure six Arleigh Burke class 
destroyers, two amphibious ships, and a Seawolf submarine. Ships that 
were added are in the Navy's shipbuilding plan; those ships had been 
squeezed into the outyears by the severe constraints of near-term 
budgets.
  Buying these ships now will: save money through more efficient 
production quantities; resolve severe deficiencies in amphibious lift; 
sustain the industrial base; provide combatants needed for fleet and 
ballistic missile defense and long range land attack; and relieve 
extraordinary pressures on future shipbuilding budgets. This is a 
responsible use of taxpayer dollars.
  The committee also sought to sustain Marine Corps modernization. 
There is authority to procure essential components such as: LHD-7 and 
LPD-17; the Advanced Amphibious Assault Vehicle; additional AV-8B 
aircraft; and the V-22 aircraft. Mine clearance and surface fire 
support are also strongly supported in this conference report, as is a 
wide spectrum of basic Marine Corps needs.
  Since the end of the cold war, the committee has emphasized programs 
that would counter the threat posed by the proliferation of weapons of 
mass destruction. The conference report would authorize funds for the 
counterproliferation support program. The nerve gas attacks in Japan 
and the bombing in Oklahoma this year highlight the need to protect not 
only our military personnel, but also our citizens within the United 
States, against the use of weapons of mass destruction by terrorist 
organizations or trans- national groups.
  Now more than ever, our U.S. military relies on space to sustain a 
broad mix of space- and ground-based capabilities to meet multiservice 
and joint warfighting requirements. These funds would accelerate the 
development and deployment of essential military technologies and 
capabilities to combat nuclear, chemical, biological and radiological 
weapons.
  The conference report would require the Department of Defense, the 
Department of Energy and other appropriate Government agencies to 
report to Congress on their military and civil defense preparedness to 
respond to these emergencies. The conference report would also 
authorize the Department of Defense to provide assistance in the form 
of training facilities, sensors, protective clothing, antidotes, and 
other materials and expertise to Federal, State, or local law 
enforcement agencies.
  In the area of arms control, the conference report authorizes funds 
that would enable the United States to meet its treaty obligations to 
destroy or dismantle chemical and strategic nuclear weapons and 
material, as well as provide $300 million for the Cooperative Threat 
Reduction Program, to aid the destruction of nuclear and chemical 
weapons in the former Soviet Union.
  On the question of theater missile defense demarcation, the 
conference outcome is virtually identical to the Senate-passed 
provision. This should alleviate concerns about constraining the 
President's prerogatives in negotiations while fulfilling the 
constitutional responsibility of Congress to review the 

[[Page S18704]]
results of those negotiations. I believe we have addressed all the 
concerns of the administration and the minority conferees.
  On national missile defense, the conference agreement strikes a 
balance between opposing views. The administration and others have 
argued that requiring deployment of a multiple-site national missile 
defense system by a date certain would constitute an anticipatory 
breach of the ABM Treaty. Although I do not agree with this argument, 
the conferees attempted to satisfy this concern. The conference 
agreement requires the Secretary of Defense to develop an NMD system 
that will achieve an initial operational capability by the end of 2003. 
However, we do not require that this be a multiple-site system, 
although it is clear that our ultimate goal is a multiple-site system.
  I am very disturbed to hear some talk about vetoing this agreement 
over the ballistic missile defense provisions, because I believe the 
conference outcome is balanced and fair. If this veto comes to pass, it 
will become clear that the administration's arguments over the ABM 
Treaty were merely attempts to block the deployment of any type of 
national missile defense system, to include one that complies with the 
ABM Treaty. At a time when we are about to deploy 20,000 Americans to 
Bosnia, I find it hard to believe that the President would veto this 
important bill simply because he does not want the American people to 
have a modest defense against ballistic missiles.
  In matters relating to readiness, the conferees agreed to an approach 
to reform the process of allocating and performing depot-level 
maintenance and repair. If this bill is not enacted, the administration 
will be throwing away its best chance to reform the process by which 
depot maintenance work is allocated and performed. The conferees also 
authorized funds above the budget request for base operations, real 
property maintenance, and recruiting.
  The section on Department of Energy national security programs 
contains numerous important provisions to strengthen the U.S. nuclear 
weapons program. These include $118 million above the request for 
stockpile management. It also directs DOE to modernize its remaining 
manufacturing plants in Missouri, Tennessee, Texas, and South Carolina. 
Modernization is necessary to meet the near-term infrastructure 
requirements of the nuclear posture review and signals that the United 
States will maintain the capability to repair and refabricate our 
nuclear weapons stockpile.
  The bill provides $50 million for the first year of an initiative to 
provide a new source of tritium gas. Because tritium decays, and since 
we ceased production in 1988, we must complete a new production 
facility early in the next decade.
  The bill authorizes several stockpile stewardship initiatives at the 
three nuclear weapons laboratories in California and New Mexico, 
enabling us to determine whether DOE can maintain long-term confidence 
in our nuclear weapons without conducting underground nuclear testing.

  The bill also focuses resources on cleaning up the highest priority 
nuclear waste problems at the former nuclear materials production 
sites, and accelerating certain clean up schedules. It also funds the 
isolation and reduction of spent nuclear fuel rods, some of which are 
beginning to corrode.
  This legislation sends the message to DOE that the maintenance of a 
safe and reliable nuclear weapons stockpile, sized to defense 
requirements, continues to be the DOE's core mission and the primary 
reason for its existence. It also tells DOE to get on with real clean 
up at the highest priority nuclear waste problem sites.
  To continue on the topic of environmental stewardship, the agreement 
establishes uniform national discharge standards for vessels of the 
Armed Forces. This important environmental initiative will be lost if 
the bill is not enacted.
  Quality of life for military personnel and their families was an 
important priority for the committee. In the areas of personnel, 
compensation, and health care, the conferees authorized a 2.4-percent 
pay raise for members of the uniformed services effective January 1, 
1996. We also authorized a 5.2-percent increase in the basic allowance 
for quarters to close the gap between the current allowance and actual 
housing expenses.
  The conferees changed the 1996 military retired pay cost-of-living 
adjustment to be effective March 1, 1996 and paid on April 1, 1996. In 
1997, the COLA will be effective December 1, 1996 and paid on January 
1, 1997. In 1998, military COLA will conform to the civilian COLA date. 
I am delighted that we were able to restore the alignment of the 
military retiree and Federal civilian retiree COLA dates. This has been 
a priority of the committee since 1993.I want to acknowledge the 
contributions of my friend Senator Domenici, chairman of the Budget 
Committee, for his help in making the COLA adjustment possible.
  However, neither the full pay raise nor the retiree COLA equity 
provision will take effect unless this agreement is enacted.
  We directed the Secretary of Defense to establish a dental insurance 
plan for members of the selected reserve, similar to the active duty 
dependent dental plan, with voluntary enrollment and premium sharing. 
We also authorized an income protection insurance plan for members of 
the ready reserve.
  With the cooperation of the Veterans' Affairs Committee, we were able 
to adjust the automatic level at which service members enroll in the 
Servicemen's Group Life Insurance Program to $200,000, effective April 
1, 1996. The last time we adjusted SGLI was during the Persian Gulf 
war. Ironically, we need to make another adjustment to SGLI as we again 
deploy U.S. forces in harm's way. I sincerely hope that no family finds 
itself in a position to receive this increased benefit, but I am 
pleased that we were able to authorize the increase. However, it will 
not take effect unless this bill is enacted.
  The conferees also recommend $480 million above the budget request 
for military construction, particularly for military housing, mission-
related facilities, and revitalizing infrastructure. The conference 
agreement establishes new authorities for the construction and 
improvement of military housing that will permit shared public-private 
funding in order to maximize opportunities at the lowest cost possible.
  This agreement also takes a major step toward a more streamlined 
government acquisition process. Provisions of the bill will enable 
greater access to commercial technologies for Federal agencies. These 
include relieving burdens on contractors who supply commercial items as 
well as giving agencies the ability to acquire new commercial products 
from the marketplace. This will result in savings to the taxpayer and 
create new opportunities for businesses. We have taken this major step 
in acquisition reform while maintaining the requirement that contracts 
be awarded using full and open competition.
  Mr. President, I would like to express my appreciation to my 
colleagues on the Committee on Armed Services for their cooperation and 
wisdom in developing and approving this agreement. I extend my 
appreciation to the distinguished ranking minority member of the 
committee, Senator Nunn, for his bipartisan work during the conference. 
I want to thank my staff director, Gen. Dick Reynard, and the majority 
staff for their fine work. I would also thank General Arnold Punaro and 
the minority staff for their contributions. I ask unanimous consent 
that a list of the staff be printed in the Record.
  There being no objection, the list was ordered to be printed in the 
Record, as follows:

                             Majority Staff

       Charlie Abell, Tricia Banks, Les Brownlee, Dick Caswell, 
     Monica Chavez, Chris Cimko, Greg D'Alessio, Don Deline, Marie 
     Dickinson, Shawn Edwards, Jon Etherton, Pamela Farrell, 
     Melinda Koutsoumpas, Larry Lanzillotta, George Lauffer, 
     Shelley Lauffer, Steve Madey, John Miller, Ann Mittermeyer, 
     Bert Mizusawa, Joe Pallone, Cindy Pearson, Connie Rader, 
     Sharen Reaves, Dick Reynard, George Robertson (GPO staff), 
     Steve Saulnier, Cord Sterling, Eric Thoemmes, Trey Turner, 
     Roslyne Turner, Deasy Wagner, and Jennifer Wallace.

                             Minority Staff

       Dick Combs, Chris Cowart, Rick DeBobes, John Douglass, Andy 
     Effron, Jan Gordon, Creighton Greene, P.T. Henry, Bill Hoehn, 
     Jennifer Lambert, Mike McCord, Frank Norton, Arnold Punaro, 
     Julie Rief, and Jay Thompson.
  The PRESIDING OFFICER. The Senator from Georgia. 
  
[[Page S18705]]

  Mr. NUNN. Mr. President, Senator Thurmond has shown great patience 
and endurance through a long and difficult negotiation with the House. 
I have great respect for Senator Thurmond and for his leadership. I 
commend him for his diligent efforts. Without his strong efforts we 
would have never been able to get this report out of conference.
  It has been a very difficult year. I signed the conference report out 
of my great respect for Senator Thurmond, and I have also voted in 
favor of the motion to proceed. This will give the Senate the 
opportunity to consider this conference report. As I said this morning 
on the floor of the Senate, contrary to one newspaper article, I am not 
lobbying Senators to vote against this bill. To the contrary, I am 
making sure that everyone understands my position. I do have serious 
reservations. I will vote against the bill. But everyone will have the 
conference report before them and they can make up their own minds.
  I think this bill deserves to be voted on. I have urged everyone on 
our side not to cause any kind of undue delay. There are a number of 
Members who want to speak and there are a number of Members who will 
speak, I am sure. But it is certainly my hope that we will be able to 
come to a conclusion on this bill. I will do everything I can to 
cooperate in bringing this bill to a vote and in making sure the 
conference report is sent to the President for whatever he may decide 
to do.
  As I said on the floor of the Senate this morning, and as I said when 
I signed the conference report earlier this week, I have serious 
reservations about the conference report and I will vote against the it 
when we vote. I also made it clear this morning that, in my judgment, 
the report speaks for itself. Each Senator can readily make his or her 
own judgment as to whether the conference report merits their support.
  On Monday I will give a detailed speech outlining my concerns--
assuming we are on the conference report on Monday, or whenever we are 
on it. For now, I will just highlight my major objections.
  The ballistic missile defense legislation contains national defense 
language which goes well beyond the mandates both of the House-passed 
and of the Senate-passed bill. As Senators will recall on this subject, 
during the debate on the Senate bill, Senator Thurmond asked that 
Senator Levin and I join Senator Warner and Senator Cohen to work on 
the missile defense language because there were obviously a great 
number of Senators who were very concerned about that language. A 
number of us had voted against that language in the committee. I was 
concerned about it. It was apparent that the bill on the Senate floor 
was going to have a hard time being brought to a conclusion without 
some consensus on ballistic missile defense.
  We spent about 4 or 5 days working very carefully with every word of 
that language. We made very substantial changes from what had come out 
of the Senate committee. We worked closely with the White House to make 
sure that whatever product we presented as a compromise would be 
something that the President would be able to sign. We achieved that 
through a great deal of effort. In the conference to work this out, I 
again worked with Senator Thurmond and others, including Congressman 
Curt Weldon on the House side, and Members on our side, to try to 
achieve a compromise between the Senate and the House versions in a way 
that would not lose the approval of the administration. The 
administration had been reluctant to move as far as we did on the 
Senate bill but did agree with it before we passed that bill.
  Mr. President, the bottom line of all this is that the missile 
defense language in this act goes well beyond the mandates both of the 
House-passed bill and the Senate-passed bill. I will go into more 
detail on Monday on this, or whenever I speak again. But this is not an 
issue to be taken lightly. This is not an issue that is a question of 
one word or two words or one sentence. This is enormously important.
  We have achieved, under Republican Presidents primarily, an arms 
control agreement called START II. That arms control agreement, I 
believe, has come out of the Foreign Relations Committee now. Although 
I am not certain, I believe the vote was unanimous.
  There is no doubt in my mind that all the defense experts that I know 
have concluded that this agreement is in the best national security 
interests of the United States and Russia. This START II Treaty has not 
been approved by the Duma in Russia and it is much more controversial 
there than it is here. The one thing we know is that if we convey the 
impression in this bill or in this conference report that the United 
States Senate is going to breach in any way or disregard or have an 
anticipatory breach of the ABM Treaty, that action will make it 
extremely unlikely that the Russian Duma will ratify the START II 
Treaty.
  In the name of protecting our own country against missiles that may 
be aimed against this country in the future, it would be the supreme 
folly if we passed a piece of legislation that is going to unwind the 
efforts made by several Presidents to get to the point where we have 
dramatically reduced the number of Russian missiles that are aimed at 
the United States. Those reductions are going to occur in START II, if 
that treaty is ratified. If we do something in this legislation, 
whether we intend it or not, that inadvertently causes that treaty not 
to be ratified in the Russian Duma, then we would have taken probably 
the most gigantic step backward in arms control that we have taken in 
many years.
  I emphasize, this START II Treaty basically requires dismantling 
literally thousands of missiles that for years have been aimed at the 
United States, including missiles that we called MIRV'd, multiple 
warhead missiles. We have feared for years that these missiles could 
cause tremendous problems in terms of the nuclear balance and could 
lead to an incentive for one side to strike first.
  This is not trifling. This is not picking at words. Every word in 
this Missile Defense Act is of great importance and the White House, 
the Department of Defense, and the National Security Council and the 
State Department have every reason to examine every word. And, 
regarding things to which we do not completely attach the same 
significance, we must remember that they are the ones negotiating with 
the Russians. They are the ones in touch with the Russians on a day-by-
day basis, and it is the executive branch that really has to work on 
this matter. So we have to have, I think, some deference to their 
judgment.
  This conference struggled and tried. We tried to get it worked out. I 
think it was a good-faith effort by Senator Lott, the Senator from 
Mississippi, Congressman Weldon, myself and others. But we did not 
achieve that goal, primarily because the House insisted we continue to 
work from the House language. Every time we worked out one problem with 
two or three words here, two or three words there, instead of working 
off the Senate language so we would have known what the underlying 
fundamental provisions were, it came back in some sort of a new 
conglomeration of House language. All of this is in multiple pages, 
anywhere from 10 to 20 pages. Therefore, we had to go over every word 
again.
  This went on and on and on. Finally, I had suggested many times that 
we should work off the Senate language, which would have narrowed the 
scope of what we had to examine. But, finally the time came when I know 
Senator Thurmond had to make a decision, as did his counterpart, 
Congressman Spence, to complete this conference report. I understand 
their position. But this is enormously important. The Department of 
Defense and the White House disagree with this language. There are 
legitimate and sincere fears that this kind of language could end up 
being extremely counterproductive to our Nation's security. I share 
those apprehensions and I will urge all Senators to take a close look 
at this language.
  My second problem with this bill is that it includes a specific 
legislative provision that would abolish the statutory requirement 
which came from the Congress of the United States--Senator Cohen and I 
led the way on this--for the Assistant Secretary of Defense for Special 
Operations in Low Intensity Conflict.
  I believe that abolishing that statutory authority could undermine 
civilian oversight of special operations. Special operations forces are 
absolutely necessary. These are the specialists. These are the people--
the SEALS 

[[Page S18706]]
and the special forces--who go into very dangerous situations in almost 
every area. They are the best trained military individuals we have. 
They take the most risk. They are in many types of activities, 
including activities of a highly classified nature.
  The Special Operation Force was begun by a legislative act which 
Senator Cohen and I co-authored. We decided at that time--and I think 
that the wisdom of that decision has been demonstrated very clearly--
that, if we are going to have those kinds of special forces, we need 
civilian control not just in the general sense but in the sense of 
having an Assistant Secretary of Defense who is responsible for the 
Special Operation Forces. The issue is civilian control. We do not want 
to lose the civilian control of those forces.
  But this legislation, in my view, mistakenly abolishes the Assistant 
Secretary of Defense for Special Operations and Low-Intensity Conflict. 
That does not mean, in theory, that there will not continue to be 
civilian control with the Secretary of Defense in charge. It means that 
the focus of civilian control over special operations on a daily and 
weekly basis is likely to be eliminated with the abolishment of the 
statutory requirement for that position. I think this is a mistake. It 
is a fundamental mistake.
  There is legislation in the conference report in which I know many 
people will be interested on the floor of the Senate because, again, it 
addresses another position that was created by the Congress. I know the 
Senator from Arkansas and the Senator from Iowa were very involved in 
an effort that language in this conference report that would abolish: 
the statutory requirement for an independent Director of Operational 
Test and Evaluation. Many fear--and I share this fear--that abolishing 
the statutory requirement for this position could undermine objective, 
unbiased testing of major weapons systems. In other words, it would 
abolish the statutory requirement to get testing and evaluation away 
from the program managers who have been somewhat generous in seeing 
that it worked which many times resulted in a lack of objectivity 
either in reality or in perception.
  Another problem I have with this conference report is that the Naval 
Petroleum Reserve sale provision establishes a 1-year timeframe for the 
sale even though the budget reconciliation bill no longer mandates sale 
within 1 year. Originally, this was mandated in the reconciliation bill 
in order to raise revenue. The Naval Petroleum Reserve is a complex 
operation, and compressing the timeframe for sale to within 1 year, I 
believe, is insufficient time. I fear that the taxpayers will not get 
the maximum value through knowledgeable competitive bidding. It could 
give one or two companies a real inside position on an enormous amount 
of value in terms of competitive bidding. So, that is also a provision 
about which I am concerned, Mr. President.
  I also have problems with the directive for procurement of specific 
ships at specific shipyards that are not tied to any clear industrial 
base requirement. Sometimes it is justified, but when there is no 
industrial base requirement, it undermines the cost-saving potential of 
competition. This is micromanagement in a sense that costs the 
taxpayers money in almost every case.
  Mr. President, I think this bill has a vast number of certifications 
and reports, and it gets into micromanagement. We have had some of that 
in past bills. I do not say that it is unique in this one. But it is of 
concern.
  I am also concerned about Buy American provisions for ships and naval 
equipment which will result in significant cost increases for naval 
vessels and which could produce an unfavorable reaction against U.S. 
military sales abroad.
  Mr. President, military equipment is one of the areas where we have a 
trade surplus. If we start putting numerous provisions in here saying 
you can only buy this product from America, the people who are going to 
end up paying the price are the workers for aerospace companies and for 
other companies that now have very strong export business. Believe me, 
when you put a Buy American provision in here, you pay a price for it. 
Other countries retaliate, and there we go in terms of restricting 
trade and increasing prices.
  Mr. President, I also am concerned about something which I know the 
appropriators have felt keenly about in the past. I am not sure how 
they feel about it at this point in time. But Senator Byrd and I have 
talked about this on numerous occasions in relation to this bill. There 
are mandated spending floors in the shipbuilding language; that is, 
requirements that say you have to spend this much money--not an 
authorization saying you can spend this much money, but a floor saying 
you have to spend this much money.
  Mr. President, this directly contravenes a longstanding agreement 
between the Armed Services Committee and the Appropriations Committees 
where I, at least as chairman, pledged not to place floors in the 
authorization bill. We put the ceiling on. We say you cannot spend any 
more in this area or that area. But, in this conference report, we 
become the floor. If we say you cannot spend any less, that in effect 
cuts out the appropriations process in that particular area.
  The reason I object to this is because I think the appropriators must 
respect that we are the ceiling. If they do not pay attention to our 
ceiling, if they go over those ceilings, there is no point of an 
authorization process. In other words, if we say that we are not only 
the ceiling but we are also the floor, you cannot spend more but you 
also cannot spend less than this for a certain item, then it undermines 
the appropriations process.
  The only way authorization and appropriations can work together is if 
we are the ceiling on weapons systems and on major considerations and 
if the appropriators have the ability to come and cut under our amount 
as they see in their discretion.
  Finally, there is an earmark for noncompetitive ship maintenance 
contracts for a specific shipyard. I do not know that the amount of 
money involved is vast. I am not sure how much the amount of money is. 
I will find out by the time of my next speech on this subject. But I 
think the principle of having an earmark for a noncompetitive 
maintenance contract for a specific shipyard is a very bad practice 
that will cost the taxpayers money. It certainly does away with 
competition. And that can, as we have seen in the past, cause a 
containment problem. If one shipyard has it, another shipyard wants it. 
And if another shipyard has it, the other shipyard wants it. Pretty 
soon you have eliminated competition and you have gone to a very 
serious erosion of stewardship in terms of the taxpayers' money.
  Finally, Mr. President, there is the creation of a special 
congressional panel on submarines. This probably will not concern other 
Senators. It concerns me because that is our job on the Armed Services 
Committee. But, this bill creates a congressional panel, and I think 
that needlessly duplicates the oversight role of the Armed Services 
Committee.
  Mr. President, I ask unanimous consent that a statement I released 
when this conference report came out be printed in the Record, and I 
will make further remarks at a later point in time during this debate.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
                                                December 13, 1995.


 senator sam nunn (d-ga), ranking member of the senate armed services 
           committee, today released the following statement

       I congratulate Senator Thurmond upon the completion of the 
     House-Senate conference on the National Defense Authorization 
     Act for Fiscal Year 1996. Senator Thurmond has shown great 
     patience and endurance through a long difficult negotiation 
     with the House.
       Out of respect for Senator Thurmond, particularly in his 
     first year as chairman, I have signed the conference report. 
     This will give the Senate the opportunity to consider the 
     report. I want to make it clear, however, that I have serious 
     reservations about the conference report, and I plan to vote 
     against the report when it is considered by the Senate.
       During the conference, the Administration raised a number 
     of important objections to the bill:
       The Administration identified constitutional problems with 
     the restrictions on the President's foreign policy and 
     Commander-in-Chief powers imposed by the provisions on 
     contingency funding and UN Command and Control.
       The Administration also raised serious objections to the 
     ballistic missile defense legislation, which contains 
     National Missile Defense language that goes well beyond the 

[[Page S18707]]
     mandates of both the House-passed and Senate-passed bills.
       The Administration has expressed serious concerns about the 
     impact of the proposed conference report language on Russian 
     consideration of the START II Treaty, which is designed to 
     produce a major reduction in Russian nuclear weapons.
       The Administration is also concerned that the language 
     could lead the Russians to abandon other arms control 
     agreements if they conclude that it is U.S. policy to make 
     unilateral action to abandon the ABM Treaty.
       I have serious reservations about these provisions and 
     numerous other provisions of the conference report, 
     including:
       Legislation that would abolish the statutory requirement 
     for an Assistant Secretary of Defense for Special Operations 
     and Low Intensity Conflict, which could undermine civilian 
     oversight of special operations.
       Legislation that would abolish the statutory requirement 
     for an independent Director of Operational Test and 
     Evaluation, which could undermine unbiased testing of major 
     weapons systems.
       The Naval Petroleum Reserve Sale provision, which unwisely 
     establishes a one-year time frame for the sale, even though 
     the budget reconciliation bill no longer mandates sale within 
     a year. The one year period is insufficient to ensure that 
     the taxpayers get the maximum value through knowledgeable 
     competitive bidding.
       Directed procurement of specific ships at specific 
     shipyards without a clear industrial base requirement, which 
     undermines the cost-saving potential of competition.
       Buy American provisions for ships and naval equipment which 
     will result in enormous cost increases for naval vessels and 
     which could produce an unfavorable reaction against U.S. 
     military sales abroad--one of the strongest elements of our 
     export economy.
       Mandated spending ``floors'' in the shipbuilding language--
     requirements to spend specified amounts for particular 
     programs--which directly contravene the longstanding 
     agreement between the Armed Services and Appropriations 
     Committees to not place ``floors'' in the Authorization bill.
       An earmarked non-competitive ship maintenance contract for 
     a specific shipyard.
       Creation of a special congressional panel on submarines, 
     which needlessly duplicates the oversight role of the Armed 
     Services Committee.
       Failure to include Senate-passed provisions which should 
     have been non-controversial, such as U.S.-Israeli Strategic 
     Cooperation, the Defense Business Management University, and 
     a North Dakota land conveyance that meets all of the Senate's 
     objective criteria.
       Weakening the Senate-passed formula for equity in cost-of-
     living adjustments for military retirees.
       Designating every single line of National Guard and Reserve 
     procurement funds, rather than providing generic categories 
     that can be used by the Department of Defense to meet 
     priority Guard and Reserve requirements.
       Earmarking Department of Energy defense funds for numerous 
     unrequested projects and programs at designated sites.
       Restrictions on access of servicewomen and dependents 
     overseas to privately-funded abortions, and the imposition of 
     special discharge procedures for HIV-positive 
     servicemembers--a small fraction of our military population--
     which needlessly inject domestic political issues into 
     military manpower policies.
       I recognize that the Senate could not prevail on all 
     issues. There are many other compromises within the 
     conference report which I do not particularly support but 
     which I understand in the context of the give and take of 
     conference. The issues I have raised in this statement, 
     however, represent fundamental flaws in the conference 
     agreement.
       If the conference report is not approved by the Senate, or 
     if the legislation is vetoed by the President, we will have 
     an opportunity to correct these flaws. The conference report 
     contains important legislative authorities, such as:
       A variety of military pay and allowance provisions.
       Approval of Secretary Perry's family and troop housing 
     initiative.
       Detailed acquisition reform legislation that complements 
     last year's Federal Acquisition Streamlining Act.
       Senator Thurmond and the Committee worked long and hard to 
     develop these important provisions, and I pledge to work 
     towards their enactment in a subsequent bill if the 
     legislation in this conference report is not enacted into 
     law.

  Mr. NUNN. Mr. President, I repeat for all Senators that I think we 
ought to have a good debate on this bill. I think there are things that 
are serious here that ought to be discussed. Voting against this bill 
is certainly not something that I relish.
  There is military pay in here for our troops. I hope we can find some 
other way because I do not want to go through the process of replacing 
a number of provisions in this bill. But, on the matter of military 
pay, I will do everything I can, if this bill does not become law, to 
see that we find another vehicle. I think it is enormously important 
that we be able to resolve that problem before we go home.
  Mr. President, I thank the Chair.
  Mr. BUMPERS. Mr. President, I wonder if the Senator will yield for a 
couple of questions. I do not want to take the time of the Senator from 
South Carolina, but the committee report on the B-2 bomber is mildly 
confusing.
  I just wonder if the distinguished ranking member could enlighten us 
as to what discretion the Pentagon has on how it spends the additional 
$493 million that is authorized for B-2's?
  Mr. NUNN. I say to my friend from Arkansas that is a good question. I 
think that ought to be directed to the majority. I was not in on that 
negotiation. I have read that language and I would be hesitant to try 
to interpret it. I think Senator Cohen has been involved in it, and 
also Senator Lott. I am sure Senator Thurmond is familiar with it. So, 
I think you would be better served to direct the questions to them.
  Mr. BUMPERS. For the benefit of the majority, who apparently crafted 
this report, I would like to say there is something here that is 
``passing strange,'' as we say in Arkansas. The report says, 
``Therefore, the Senate conferees believe that the increased 
authorization of $493 million provided for the B-2 bomber program may 
be expended only for procurement of B-2 components, upgrades, and 
modifications that are of value for the existing fleet of B-2 
bombers.''
  At another place, it says, ``The conferees agree to authorize the 
budget request for research and development and to increase the 
authorization for procurement.''
  So, I do not know whether the Pentagon has the authority to start 
buying 20 additional bombers or not. The thing that is strange to me 
about this is it says, ``Therefore, the Senate conferees believe.'' It 
does not say the House conferees believe. I was curious as to how this 
could be written with the Senate conferees believing one thing and the 
House conferees believing something else. Both sides usually have to 
concur, do they not?

  On another matter. Let me say to the distinguished ranking member 
also, he touched on the plan to sell the Naval Petroleum Reserve at Elk 
Hills, which really hit a nerve with me. I think it is the height of 
folly financially and economically to be selling off such assets and 
take credit for it under the Budget Reconciliation Act. Until this year 
it was specifically prohibited to count the sale of assets in budget 
deficit reduction. In other words, CBO was not to score asset sales.
  I thought that was a good rule. I have tried to reinstate it a couple 
of times and came within a couple of votes of getting it done. I think 
it was Mr. Bowsher who used to be at CBO who said that selling assets 
to reduce the deficit reminded him of the lawyer that came home from 
work one day and told his wife he had a great day, and she said, ``What 
happened?'' He said, ``I sold my desk.'' That is what we do when we 
sell off assets.
  One other question, because the Senator from Georgia was very active 
in crafting the so-called ABM language when that bill was in this 
Chamber. My staff has indicated to me that this bill would torpedo the 
ABM Treaty. Could the Senator from Georgia comment on that?
  Mr. NUNN. I say to my friend from Arkansas, I would not go quite that 
far. I would say that is the apprehension that the interpretation of 
this language could lead some, perhaps all in the Russian Duma that 
will be considering this, to believe that this is in the nature of what 
I would call, for lack of a better term going back to law schools days, 
an anticipatory breach.
  I do not think anyone could say that this is a direct breach because 
nothing has happened. Passing a law does not make it happen. But there 
is an old story from law school I recall well in a course on contracts 
in which the professor was trying to explain what anticipatory breach 
meant, and he said:

       Let's assume that a man goes from Atlanta, Georgia, to New 
     York and negotiates for 2 weeks to sell the Hurt Building. 
     This was a big building in downtown Atlanta. Now it is not 
     one of the big ones, but it was well known back when I was in 
     law school.
       He finally concludes the contract. They sign the deal, and 
     the buyer agrees to buy it for a certain amount and the 
     seller agrees to sell it. And so the buyer says, ``Let's go 
     out to dinner and celebrate. We have been negotiating long 
     and hard.'' But the seller says, ``No, I can't do it. I've 
     got to rush back to 

[[Page S18708]]
     Atlanta.'' The buyer then said, ``Why? You have been here 2 weeks. Why 
     don't you relax and celebrate. You have just sold a big 
     building. I don't see why you have to go back to Atlanta.'' 
     To which the seller replied ``Because I have to go back down 
     there and buy that building.''

  Well, he just sold something he did not own. Now, the contract did 
not call for performance for another 30 days. So it was not direct 
breach, but it is in the legal terms an anticipatory breach. And that 
is what the fear is here, that this could be taken as anticipatory 
breach.
  Mr. BUMPERS. I think the Senator describes the situation perfectly.
  I might say, Mr. President, this is not particularly apropos of the 
story he just told, but it is one that might introduce a little levity 
here on a Friday afternoon.
  Chet Lock, who used to be Lum, in Luck and Abner, became a very good 
friend of mine when I ran for Governor the first time, and he told me a 
great story about a fellow who owned a horse and another fellow who 
came by one afternoon. The visitor said, ``What would you all take for 
that horse?'' He owner said, ``I'd take a hundred dollars.'' And the 
visitor said, ``I think I'll buy him.'' So he paid a hundred dollars 
and took his horse home. And the original owner could not sleep that 
night. He got to thinking: If that horse is worth a hundred dollars to 
him, certainly it would be worth more than that to me.
  So he called the guy the next morning and said, ``Listen, that horse 
is pretty dear to me. I raised him from a foal and I really hate to 
part with him. I will give you $200 to buy him back.'' The other said, 
``Well, come and get him.'' So he went over and gave the guy $200. And 
the other fellow got to thinking that night: He knows something I don't 
know or he wouldn't have given me a hundred dollars' profit on that 
horse. The next day he called him back and said, ``I will give you $400 
for to buy that horse back.'' This kept going on until they got the 
horse up to about $3,000, and one morning one of them called the other 
and said, ``I've called to make you an offer on the horse. Can I come 
and get him? I will pay you $200 more than you paid me.'' The other man 
said, ``I can't do that. I sold the horse.'' He said, ``You sold the 
horse?'' The other said, ``Yes, sold him to somebody else.'' And the 
first man said, ``Why would you do that? We were both making a good 
living off of him.''
  I yield the floor.
  Mr. WARNER addressed the Chair.
  The PRESIDING OFFICER. The Senator from Virginia.
  Mr. WARNER. Mr. President, before the distinguished Senator from 
Arkansas leaves the floor, I hope to make some reply about this Elk 
Hills situation. Is the Senator aware that the sale of this was 
proposed by the President and one of his Cabinet officers?
  Mr. BUMPERS. I am sorry; will the Senator repeat the question?
  Mr. WARNER. Is the Senator from Arkansas aware that the proposed sale 
of Elk Hills was initiated by President Clinton and one of his Cabinet 
officers, Secretary O'Leary.
  Mr. BUMPERS. I was aware of that, and I said earlier in the Chamber 
the President has a right to be wrong just like everybody else.
  Mr. WARNER. Then I think that concludes my rebuttal to the Senator.
  Mr. NUNN. Will the Senator yield?
  Mr. WARNER. I ask unanimous consent that I can place into the Record 
a letter from the Secretary of Energy dated May 4, 1995.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                      The Secretary of Energy,

                                      Washington, DC, May 4, 1995.
     Hon. Albert Gore,
     President of the Senate,
     Washington, DC.
       Dear Mr. President: Enclosed is a draft bill to authorize 
     privatization of the Naval Petroleum and Oil Shale Reserves. 
     This legislation, which is proposed in the President's FY 
     1996 Budget, is part of the Administration's ongoing effort 
     to reinvent the Federal Government.
       The Naval Petroleum and Oil Shale Reserves, consisting of 
     Naval Petroleum Reserves Numbered 1, 2, and 3 and Oil Shale 
     Reserves Numbered 1, 2, and 3, were designated by Executive 
     Order near the start of this century to provide an emergency 
     source of fuel for the Navy's fleet as it converted from coal 
     to oil. In response to the Arab oil embargo of 1973-74, 
     Congress passed the Naval Petroleum Reserves Production Act 
     of 1976, which significantly altered the mission of the Naval 
     Petroleum Reserves, requiring that these Reserves be produced 
     at their ``maximum efficient rate'' in order to ensure a 
     reliable fuel supply for national security.
       Since 1976, oil and gas from the Naval Petroleum and Oil 
     Shale Reserves have been sold on the commercial market, to 
     the Strategic Petroleum Reserve, or to the Department of 
     Defense. The program has been highly successful, returning 
     approximately $16 billion to the U.S. Treasury, against total 
     costs of just over $3.1 billion. The program continues to be 
     a revenue generator, still returning in excess of $200 
     million in net revenues to the U.S. Treasury annually.
       The enclosed proposal has several elements. First, the 
     proposal would authorize the Department to privatize the 
     Government's interest in the Reserves (excluding Oil Shale 
     Reserve Numbered 2) by the end of FY 1997. The Administration 
     believes sale of the Reserves will generate proceeds of $2.6 
     billion, which is the current estimate of the discounted 
     value of the revenues to the Federal Government from the 
     properties. A percentage of proceeds from privatization would 
     be paid to the State of California to benefit the Teachers' 
     Retirement Fund. This payment would resolve a long-standing 
     land dispute with the State of California. Second, the 
     proposal would modernize the statute governing the operation 
     of the Naval Petroleum Reserves to ensure that the benefits 
     to taxpayers are maximized pending privatization.
       Finally, if privatization of the Reserves is disapproved by 
     the President or Congress, the proposal would transfer the 
     management of the Reserves to a for-profit, wholly owned 
     Government corporation, authorized to maximize net revenues 
     through commercial management and operating decisions. In 
     keeping with the Administration's emphasis on protecting the 
     environment, we also recommend that appropriate portions of 
     Oil Shale Reserve Numbered 2 be studied for possible 
     inclusion in the national wild and scenic rivers system.
       The National Defense Authorization Act for Fiscal Year 1994 
     directed the Secretary to ``study management alternatives for 
     the Reserves, including the concept of corporatization.'' The 
     proposed legislation would respond to that directive and 
     allow the Administration to maximize the value of the Naval 
     Petroleum and Oil Shale Reserves.
       The Balanced Budget and Emergency Deficit Control Act of 
     1985 (the ``Balanced Budget Act'') requires that all revenue 
     and direct spending legislation meet a pay-as-you-go 
     requirement through FY 1998. That is, such a bill should not 
     result in an increase in the deficit, and if it does, it 
     would trigger a sequester if not fully offset. The Naval 
     Petroleum Reserves Privatization Act will result in proceeds 
     of approximately $2.6 billion in FY 1997. A provision of the 
     Balanced Budget Act generally prohibits counting the proceeds 
     of asset sales as offsets to spending. However, the enclosed 
     legislation includes a provision (Sec. 202) to allow the 
     proceeds to be counted as offsets to spending. This provision 
     is patterned after the waivers of emergency spending provided 
     by the Balanced Budget Act and is being proposed for several 
     asset sales being recommended by the Administration for FY 
     1996.
       The Office of Management and Budget has advised that 
     enactment of this proposal would be in accord with the 
     President's program.
           Sincerely,
                                                 Hazel R. O'Leary.

       Enclosure.
  Mr. NUNN. If I could make a brief observation.
  Mr. WARNER. Whatever time is necessary.
  Mr. NUNN. I would say two things on that point. One is in the 
original reconciliation bill there was a mandate for sale, so when we 
brought this through the committee we debated it, we put safeguards in 
it, and there were many of us who were concerned that the timeframe was 
too compressed. When the President originally proposed this, he 
proposed it over a 2-year period.
  The difficulty, I say to my friend from Virginia, is not so much the 
sale itself. But if there is going to be a sale of this very large 
asset, the feeling has been that it ought to be over a period of time 
sufficient so that other companies that may bid, so they can go in and 
study it, and so forth.
  The provision in this bill is 1 year. So it is a move from the 
administration request of 2 years to 1 year, and that greatly 
compresses the schedule and puts on a whole lot more pressure. That was 
not put in by the Senate, but the House. I understand the House 
conferees insisted on it, and I think it is a mistake.
  There is a safeguard here that the Secretary of Energy can negate the 
sale, but there will be great pressure for her not to do so because, if 
she negates the sale saying she cannot do it in 12 months, then there 
would be no authority to make the sale. So the pressure is going to be 
there for an early, quick sale of this asset, particularly if this bill 
becomes law, and particularly with the pressure on the budget. That is 
what the problem is. 

[[Page S18709]]

  Mr. WARNER. Mr. President, if I might reply to my distinguished 
colleague, I am advised that senior DOE officials have stated that the 
1 year period as required by the Senate bill was reasonable in their 
judgment. And I would like at this point to put a second letter into 
the Record from the Deputy Secretary of Energy, dated November 13, 
1995. I read one paragraph:

       In general, with the exception of Senate provisions related 
     in the treatment of the State of California ``school lands'' 
     claim, the Administration prefers the NPOSRs privatization 
     provisions included in the Senate bill. In addition to 
     congressional sale notifications and procedural safeguards 
     included in both the House and Senate bills, the Senate bill 
     provides enhanced safeguards guards against ``fire sales'' of 
     the reserves, by authorizing the Secretary of Energy to 
     notify Congress if it is not proceeding in the best interests 
     of the United States and by authorizing the Secretary of 
     Energy to notify Congress of any slippage of the sales 
     schedule.

  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                               The Deputy Secretary of Energy,

                                Washington, DC, November 13, 1995.
     Hon. John McCain,
     U.S. Senate,
     Washington, DC.
       Dear Senator McCain: As the Conferees on the FY 1996 
     Defense Authorization bill meet to resolve differences. I 
     would like to emphasize the Administration's support for 
     privatization of the Naval Petroleum and Oil Shale Reserves 
     (NPOSRs) including Naval Petroleum Reserve Numbered 1 (Elk 
     Hills). The Elk Hills Reserve is by far the largest and most 
     valuable of the NPOSRs. This commercial oil and gas operation 
     is most appropriately and efficiently owned and operated by 
     the private sector.
       In general, with the exception of Senate provisions related 
     in the treatment of the State of California ``school lands'' 
     claim, the Administration prefers the NPOSRs privatization 
     provisions included in the Senate bill. In addition to 
     congressional sale notifications and procedural safeguards 
     included in both the House and Senate bills, the Senate bill 
     provides enhanced safeguards against ``fire sales'' of the 
     reserves, by authorizing the Secretary of Energy to notify 
     Congress if any proposed sale is not in the best interest of 
     the United States, by requiring congressional approval of any 
     sale for which there is only one offer, and by authorizing 
     the Secretary of Energy to notify Congress of any slippage of 
     the sale schedule.
       Regarding the treatment of the State of California ``school 
     lands'' claim, while the Administration recognizes that 
     California has not been successful in its legal claim, the 
     Administration believes that it is appropriate to provide a 
     portion of the proceeds from the sale of Naval Petroleum 
     Reserve Numbered 1 (Elk Hills) to the State of California for 
     payment into the California Teachers' Retirement Fund. This 
     position, as was the position reflected in the 
     Administration's bill, is based on equitable considerations.
       I reiterate the Administration's support for inclusion of 
     privatization of the Naval Petroleum and Oil Shale Reserves 
     in the Conference report.
           Sincerely,
                                                Charles B. Curtis.

  Mr. NUNN. Mr. President, I say to my friend from Virginia, as he 
recalls in the committee, there were a number of us who voiced 
objections, and the administration at that stage was in favor of the 1-
year provision. I think the Senator is right. They, too, were seeking 
money. I did not agree with the administration on that.
  I am not here speaking for the administration on this. I am saying I 
think it is shortsighted, whether it is the administration or whether 
it is Congress, to compress the timeframe for the sale of this to a 1-
year period because I think it puts enormous pressure on it and it 
gives undue leverage to the oil companies that are most familiar with 
it.
  It takes quite a while for an oil company to go out and find out 
enough about Elk Hills to make a reasonable bid. I thought it was a 
mistake to put it in the form of a mandate. If it is going to be sold, 
it should not be on the pretension it helps balance the budget. It does 
not matter whether it is sold in 1996 or 1997, it will supply the same 
amount of money.
  It will be the height of folly if we try to sell it in 1996 and get a 
lot less money for the taxpayers, and not give 2 or 3 years to the oil 
companies to make the kind of assessment needed for a confident and 
vigorous competitive process.
  Mr. WARNER addressed the Chair.
  The PRESIDING OFFICER. The Senator from Virginia.
  Mr. WARNER. If I may reply, the provision of the bill in the 
conference report provides a number of safeguards to ensure the 
taxpayers' interests will be preserved. First, the provision 
establishes a minimum price based on an average of five independent 
experts' assessments of the value of the field; and, second, the 
provision provides the Secretary of Energy the authority to suspend the 
sale if she and the Director of the Office of Management and Budget 
determine that the sale is proceeding in a manner that is inconsistent 
with the achievement of the sale price that reflects the full value of 
the reserve or a course of action other than immediate sale of reserve 
is in the best interest of the United States.
  And, Mr. President, I really feel those safeguards adequately protect 
the taxpayers' interests.
  Mr. NUNN. If I could just respond. I say to my friend from Virginia, 
let me tell him a little bit more about why this is a problem. The 
Congressional Budget Office issued a report--I am not trying to quote 
their exact words here, but this is a memo based on that report that 
the estimated net proceeds from that sale anticipated were $1.5 billion 
and the estimated revenue foregone by the Government over 7 years was 
$2.5 billion. Overall, this means that this sale that was supposed to 
reduce the deficit was scored by CBO as increasing the deficit over 7 
years by $1 billion.
  That is the kind of thing you get into in an asset sale. And that is 
why those of us involved in this need to be very conscious of 
protecting the taxpayers. Sure, you can say it drives down the deficit 
by $1.5 billion over the next 2 years if you sold it, but if it loses 
another $2.5 billion in revenue, it does not drive down the deficit; it 
increases it. So that is the problem. And that is why you need to give 
more time here, notwithstanding what the administration's position was 
at an earlier date. I think the Senator is correct on that.
  Mr. WARNER. Mr. President, I would like to point out that the CBO 
numbers did not include approximately $1 billion of savings in 
operating costs that will result from the privatization of Elk Hills. 
In addition, these numbers did not include the increased tax revenues 
that will result from the sale. I think that my good friend from 
Georgia will find that these two figures, taken together with the 
estimated sale price of $1.5 to $2.5 billion, will result in much more 
significant revenues for the Federal Treasury than would continued 
Government ownership of Elk Hills.
  Mr. THURMOND. Mr. President, Senator Nunn has mentioned about the 
entire conference report being placed in the Congressional Record. That 
is correct. It was placed in the Congressional Record on Wednesday, 
December 13, 1995.
  I just wonder if we could not debate this bill tomorrow and Monday 
and have a final vote on Tuesday. Is there any objection to that? I 
just wanted to know.
  Mr. NUNN. Mr. President, I say to my friend from South Carolina, this 
Senator would agree with that. I think that is a very reasonable 
proposal, and I would support it. I urge our colleagues to support it.
  Mr. THURMOND. Limit it to 6 hours.
  Mr. NUNN. That would be very reasonable to my point of view. We have 
the Senator from Vermont with strenuous objection to provisions here. 
He has to be heard. I am not in a position to agree to that on behalf 
of the Democratic side now, but from a personal point of view, I will 
say I would certainly work with the Senator in trying to get that kind 
of an agreement. I think it is a very reasonable proposal, and I would 
support it.
  Mr. THURMOND. If we can limit debate to 6 hours equally divided, I 
think that will give ample time to debate it tomorrow and Monday, and 
then have a final vote on Tuesday.
  Mr. NUNN. Actually we could perhaps have a longer period of debate. 
If we are going to have tomorrow and Monday, we might want to make it 8 
hours. That would give people a lot of time. But with all day Monday 
for debate, I am sure that we could accommodate whatever Senators want 
to talk.
  Mr. THURMOND. Would 8 hours suit the Senator all right?
  Mr. NUNN. I think that is completely adequate. We may not need to 
limit the time, though, if we just have a time certain Tuesday for the 
vote. That would be just up to----
  Mr. THURMOND. What time would the distinguished Senator suggest? 
  
[[Page S18710]]

  Mr. NUNN. I would have to check with the Democratic leader, but I 
would be glad to do that and get back to the Senator from South 
Carolina.
  Mr. THURMOND. I just wonder if we could not get some agreement as to 
when the final vote will come.
  Mr. NUNN. I will be glad to work toward that end. It is a good 
suggestion.
  Mr. THURMOND. If the distinguished Senator will get back in touch 
with us.
  Mr. NUNN. Yes.
  The PRESIDING OFFICER. Is there further debate on the conference 
report?
  Mr. WARNER addressed the Chair.
  The PRESIDING OFFICER. The Senator from Virginia.
  Mr. WARNER. Mr. President, during the course of this debate on the 
conference report, I will address a number of sections. I will see that 
a reply is made to the distinguished ranking member, the Senator from 
Georgia, with respect to the concerns that he has expressed here today 
regarding the section of the bill that relates to missiles; that is, 
both the long range and short range. I am prepared to do it, but after 
the expressions of Senators Lott and Cohen and Senator Smith who worked 
on that in some detail.
  Likewise, the questions relating to the B-2 program, we will see that 
the Senator from Georgia has an opportunity to give the expressions on 
this side. I likewise am prepared to do that, but I want to make sure 
those Senators who--for example, the subcommittee chairman--who dealt 
with that be given the first opportunity. However, Mr. President, I 
would like to address the section of the bill relating to submarine 
construction and, in particular, new construction.
  The United States today--let there be no mistake about this, Mr. 
President--is in competition with Russia as it regards underseas 
strategic systems. The reports that the Russian Navy are tied up at the 
docks, rusting away, both in the Black Sea and in the North Sea and 
other areas relate to the surface fleet.
  Indeed, the Russians have decided not to put the short assets that 
they have, supposedly, into surface naval operations of any 
considerable extent. But, Mr. President, they are pursuing, 
relentlessly, a program of research, development, and construction of 
subsurface systems, primarily submarines. It was reported in the media 
here of recent days that several of these submarines matched in many 
respects the quietness of the U.S. fleet. I cannot go into further 
detail, but a number of Senators have sought and received the briefings 
from the Intelligence Committee on these important points.
  But it is a well-known fact, publicly, that for some reason which is 
not entirely clear, Russia is putting a disproportionate amount of 
their funds for their overall national defense in subsurface strategic 
systems. And this places on the United States a very strong affirmative 
burden to go forward with our submarine programs and, in particular, 
new construction programs.
  I mentioned quietness. Submarines operate in various waters of the 
world which have various temperatures, have various ambient noises. And 
the noise level that emanates from a submarine is the Achilles heel 
because in waters of certain temperatures, ambient noises are different 
than in others. And, of course, it varies with depth and water 
temperature and currents and all sorts of conditions.
  But we have got to make progress in making our submarines quiet. And 
the new generations of submarines now on the drawing boards are key to 
our Nation's having an adequate deterrence subsurface, not only against 
Russia, but there are other nations of the world--and I will amplify in 
my statement other nations which are building diesel submarines.
  A diesel submarine can operate very quietly. It may not have, as we 
say, the sea legs to operate for long periods of time because of fuel 
requirements and battery requirements and other limitations, but it can 
operate very quietly.
  A diesel submarine poses a threat to both nuclear submarines and 
surface ships as well as through its ability to lay mines. Take the 
Strait of Hormuz, a quiet diesel submarine could slip into those 
straits, place mines and, once again, the world would be faced with a 
cutoff of one of the largest sources of petroleum which, in turn, is 
converted into energy.
  Therefore, submarine construction, research and development is 
absolutely essential to the security interests of our Nation.
  Some years ago, the decision was made to embark on a new class of 
submarines. The Seawolf was the interim class. The Congress this year 
will be completing, by and large, the authorization and funding 
requirements for the third and final submarine in the Seawolf class.
  It is now time to move on to another class. The plans have been made, 
and the initial work has begun. I do not wish to be political, but it 
is a statement of fact that the President of the United States--about 2 
years ago--indicated that he desired that all new submarine 
construction of this new class of submarine be performed at the Groton 
Shipyard operated by a very fine company, General Dynamics.
  That message was received in Virginia and across the Nation with 
great concern. Newport News Shipbuilding and Dry Dock in Virginia has 
been building submarines for the U.S. Navy for many, many years. To 
have a decision suddenly announced which would terminate construction 
of new submarines at Newport News, in my judgment, was not predicated 
on sound national security interests, nor sound financial interests. 
This decision was contrary to the best interests of this country.
  Needless to say, this decision was potentially devastating in terms 
of the economy of my State, Virginia, and, indeed, a range of 
contractors in many, many other States which worked in partnership with 
Newport News to build new construction submarines.
  This Senator, along with other Members of the Virginia congressional 
delegation, and indeed other Senators, embarked on a long mission to 
reverse that decision. I am pleased that, with this conference report, 
that decision has now been reversed. The President has agreed that it 
is in the best interest of the Nation to have competition once again 
between the two leading yards in America on new nuclear attack 
submarine construction.
  It enables the designers and engineers that are affiliated with both 
yards in research and development, as well as construction, to produce 
nothing but the best nuclear attack submarines for the United States of 
America. It helps the American taxpayer in terms of competition. 
Competition drives down cost, and the cost of the program envisioned 
for this follow-on attack submarine is in the billions of dollars, 
spread over many years, extending well beyond the year 2000.
  I am pleased that the President has reversed his decision, backed up 
by the Secretary of Defense and now implemented by the Congress in this 
report in very specific language, which I will address momentarily.
  I want to thank many who have worked in seeing that this decision was 
reversed. The Virginia congressional delegation, in particular, my 
colleague, Congressman Bateman. I wish to thank my junior colleague 
from Virginia, Senator Robb, who also worked on this effort. It was a 
concerted effort, and we are very pleased with what has been worked out 
in this conference report. It is in the interest, the security 
interests, of our country. It is in the fiscal interests of our country 
that this very substantial investment by the American taxpayers be the 
product of competition.
  Let me provide the Senate with a summary of this very important 
program.
  Submarine legislation in the current fiscal year 1996 defense 
authorization bill includes in law the essential elements of the 
Senate-passed bill with Seawolf funded at the appropriated level of 
$700 million; one submarine in fiscal year 1998, which will go to the 
Electric Boat Co. in Groton, CT; one submarine in fiscal year 1999 to 
Newport News Shipbuilding and Dry Dock, and if the decision is made to 
begin to produce a new class attack submarine with the third boat, then 
the third and all future boats of this class will be competed based 
solely on price.
  I want to underline that, competed based on price. That formulation 
allows these two real national assets, these two new construction 
yards, to be on an equal footing.
  If the decision is made to build additional R&D submarines--and the 
first two are characterized as R&D submarines--then price competition 
will 

[[Page S18711]]
begin with the fifth boat. That is a decision that will have to be made 
subsequently by the Secretary of Defense and joined in by the Congress.
  The key differences are that a new class of submarine previously 
designated as a new attack submarine will not begin until the third 
boat, the fifth boat, or later, if the Secretary of the Navy decides 
that additional R&D submarines should be built before beginning serial 
production of a new class.
  The bill also requires the Secretary of Defense to submit a plan 
leading to production of a more capable, less expensive submarine than 
the submarine previously designated as the new attack submarine.
  Legislation on attack submarines includes the following provisions:
  (1) Authorizes $700 million for the construction of the third Seawolf 
attack submarine. This, essentially, incrementally funds the ship with 
$700 million of the $1.5 million that is yet to be required.
  (2) Authorizes $704.5 million for long-lead and advance construction 
and procurement for the fiscal year 1998 submarine to be built at 
Electric Boat.
  (3) Authorizes $100 million for long-lead and advance construction 
and procurement for fiscal year 1999 submarine to be built at Newport 
News. Also authorizes $10 million for participation by Newport News in 
design of the submarine previously designated as the new attack 
submarine.
  Those sums and those provisions were carefully worked out with the 
Secretary of Defense, together with the Secretary of the Navy and the 
Chief of Naval Operations. May I commend particularly Admiral Boorda 
for the help and assistance that he gave this Senator and other Members 
of the Senate in working out this formula.
  I also wish to thank the Secretary of Defense, Secretary Perry. I 
remember so well when the pivotal decision was made by him when he came 
to my office in June and said that the President agreed that we would 
go back to the time-tested method of building new submarines and let 
two yards compete. That was the turning point and, thereafter, the 
Secretary of the Navy and the Chief of Naval Operations, working with 
members of the Armed Services Committee, devised this plan. I also 
would like to say how much I appreciate the cooperation of the Senator 
from Connecticut, whose interest, of course, rests with the Electric 
Boat, his constituent. Senator Lieberman has worked out with me as we 
worked out the provisions in the Senate bill.
  Those provisions are essentially the blueprint that remained intact 
as this went on to the House and was worked on in conference.
  Last, this bill restricts spending to no more than $200 million on 
these programs until the Secretary of the Navy certifies that 
procurement of nuclear attack submarines to be constructed after the 
first two boats will be competed on price, unless the decision is made 
to construct additional submarines, in which case all submarines after 
the fourth boat will be competed based on price whether they are R&D 
submarines or submarines of a new class.
  Mr. President, I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. THURMOND. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. THURMOND. Mr. President, earlier in the debate, a question came 
up about the Naval petroleum reserves, and I would like to make a 
statement on that.
  The conference agreement on the sale of the naval petroleum reserves 
contains a number of safeguards to ensure that the Federal Government 
receives full value. Among these safeguards are the following two 
clauses which clearly spell out the conferees intent that the reserves 
can be sold only if this will result in the highest return to the 
American taxpayer.
  The first is the mandated minimum acceptable price. This price will 
be established by five independent experts who shall consider: all 
equipment and facilities to be included in the sale; the estimated 
quantity of petroleum and natural gas in the reserve; and the net 
present value of the anticipated revenue stream that the Treasury would 
receive from the reserve if the reserve were not sold. The Secretary 
may not set the minimum acceptable price below the higher of the 
average of the five assessments; and the average of three assessments 
after excluding the high and low assessments.
  This requirement ensures that the minimum acceptable price has to be 
at least as high as what the Government would receive for these 
reserves if any other course of action is taken including the 
establishment of a Government corporation, the leasing of the reserves, 
or the continuation of the current operation of the field.
  The second key clause is the authority to suspend the sale. This 
clause gives the Secretary the authority to suspend the sale of Naval 
Petroleum Reserve No. 1 if the Secretary and the Director of OMB 
jointly determine that the sale is proceeding in a manner inconsistent 
with achievement of a sale price that reflects the full value of the 
reserve; or a course of action other than the immediate sale of the 
reserve is in the best interests of the United States.
  Mr. President, these two clauses essentially mean that Naval 
Petroleum Reserve No. 1 cannot be sold unless the Government gets a 
price for the field that exceeds the value that would be achieved by 
any other option, and that the entire sale proceed in a manner that is 
in the best interests of the United States.
  The sale will provide an estimated $1.5 to $2.5 billion to the 
Federal Treasury. This does not include the several hundred million 
dollars that the Government will receive in increased tax revenues. 
What's more, the Government will save about $1 billion in operating 
costs over the next 7 years.
  Mr. President, the sale of these reserves was initiated by this 
administration, and, in fact, the administration has come out in 
support of this provision. We have worked in a very bipartisan manner 
to draft this provision so as to incorporate the maximum safeguards 
possible. I hope that we can continue this bipartisanship and vote to 
approve the conference agreement which includes this provision.
  I yield the floor. I suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Santorum). The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. PRYOR. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. SPECTER addressed the Chair.
  The PRESIDING OFFICER. The Senator from Pennsylvania.

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