[Congressional Record Volume 142, Number 97 (Thursday, June 27, 1996)]
[Senate]
[Pages S7142-S7151]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 1997
Amendment No. 4367
The Senate continued with the consideration of the bill.
Mr. COHEN. Mr. President, there has been a good deal of discussion
this evening about the amendment offered by my colleague from Georgia,
an amendment which I cosponsored. I know it has generated considerable
controversy because some have questioned the consequences of and even
the motivation for such an amendment at this time. But I would just
like to indicate that I think it is important that we try, as best we
can, to return to a bipartisan approach to foreign policy.
I would include within foreign policy our defense policy as well.
This is something that, when I came to the Senate in 1979, we assumed
would be the policy of this body--at least to try to forge a bipartisan
coalition that would support foreign policy initiatives and certainly
our defense policy, knowing unless we are united, we can only cause
confusion, certainly within the country, and confusion amongst our
allies as well.
The issue of NATO expansion is not new. We have been talking about it
for some time. Yet suddenly, by virtue of the submission of this
amendment, some of my colleagues assumed there may be some political
agenda, some hidden agenda on the part of my colleague from Georgia and
the cosponsors that would have implications for our Presidential
candidate.
Let me indicate from the very beginning, I favor the expansion of
NATO. I also support the candidacy of Bob Dole. I hope he becomes our
next President. I know that he feels very strongly that NATO should be
expanded. I intend to lend whatever support I can to his candidacy, as
I have indicated.
But I believe that before we make a decision on enlargement, which
carry some fairly serious consequences, we ought to know a number of
things. We ought to know what the implications are in terms of costs.
We ought to know, at least get an assessment from our intelligence
community, what the likely consequences would be for our allies and
what the reaction will be in Russia, to the extent we can calculate it.
Notwithstanding what the Russian reaction might be, we are likely to
take the steps necessary to enlarge. But we should at least be aware of
what our intelligence community can tell us about it so that we can
make informed judgments.
It seems to me that is not asking too much. And perhaps it comes at a
political time, but these are issues that we should raise in advance.
We should not find ourselves coming in at the tail end of a decision
where a President has made recommendations either to enlarge or not to
enlarge, where NATO has gone on record in favor, and suddenly the
President turns to the U.S. Senate and says, ``Well, the decision has
been made. NATO is in favor of the expansion. Now the Senate must go
along.'' Ipso facto, we must approve because NATO has approved.
That, I think, would put this Senate in an untenable position--to
have a President of the United States make a decision and then simply
submit it to us for ratification without us having any prior input into
the decision itself or any kind of prior analysis of the evidence that
we ought to be considering.
[[Page S7143]]
There are other questions that can be added to the list of questions
contained in this amendment. Indeed, one concerns the benefits of
enlargement. That, I think, is a very appropriate question to add. A
whole list of questions can be added. It is not locked in concrete.
These were not written on Mount Sinai. They can be added to; they can
be subtracted from. But it seems to me we ought to start the discussion
now.
One of my biggest criticisms is that NATO expansion has been bandied
about, but the American people have not been asked about it. I hope we
can persuade them that it is in our national security interest to
expand the coverage and the protection and the benefits of NATO
membership to countries that have long been under the heel and boot of
tyranny, who are yearning to become part of this wonderful experiment
in democracy and capitalism. They are eager to come in under our
umbrella, as such.
I hope that we can start the dialog now, to start going to the
American people and pointing out exactly what is involved,
understanding what the risks are, what the calculated risks are, if
any. I, frankly, think we have succumbed too often to Soviet, and now
Russian, indication. Mr. Lebed once indicated if we were to expand
NATO, that is world war III. Since that time, he has modified that
suggestion. Now that he is a candidate for vice president, as such, he
is taking a more moderate approach.
Nonetheless, we cannot ignore the statements made. We may take an
action in the face of such a threat, but at least it should be an
informed decision on our part. And I find nothing wrong with raising
these issues now, even though there is a Presidential campaign
underway, because President--well, I speak too soon--Senator Dole,
candidate for President Dole has been on record for a long time about
his favoring expansion. We will support him as best we can in that
regard.
But I think it is critically important that we start raising these
issues now, that we not blind side the American people and say, ``Well,
the President of the United States and the Congress have now gone on
record that we are all favoring expansion.'' We have never asked them.
We do not know if there are tax implications for them or whether we are
simply going to borrow the money, or if any money will be necessary at
all.
We have not asked them whether or not they would be willing to do it
for not only Danzig, but Poland or the Czech Republic or any of the
other nations that may come in, Hungary and others, Slovenia. We have
not asked the American people as to whether or not they would support
our sending our troops to those regions should there be an attack upon
any one of them. It is important we ask them now to get some sense of
what the public opinion is going to be, and if it is negative, to try
to overcome that and shape it to follow our leadership on that
particular issue.
I might say in connection with another subject matter, that of
Bosnia, I do not think we have asked enough questions on the subject of
Bosnia. Things are going well; apparently they are going quite well
now. There is less bloodshed, virtually no bloodshed taking place. The
sides appear to have stepped back from this warfare that has been waged
for so many years, and there seems to be a positive role that we have
played during this interim period, a period of trying to maintain a
truce.
President Clinton and Secretary Perry each have pledged publicly time
and time again this is a 1-year commitment. I think most of us would
raise questions initially as to whether you should ever make a time
commitment on the deployment of American troops anywhere, but a
political decision has been made that 1 year and 1 year only is the
amount of time we would deploy our men and women to that region on the
ground.
President Clinton has stated it publicly many times, Secretary Perry
has testified before the Armed Services Committee on a number of
occasions that they will start taking troops out, as a matter of fact,
beginning in either late September or early October.
So there will be no October surprise. It will not be a politically
astute movement on the part of the President, ``Aha, we're going to
have troops coming home; unbeknownst to the American people, they will
come on the eve of the election.'' We know in advance they will be
coming home before the election.
Yes, I am sure there will be some political benefit from that which
President Clinton will seek to reap. We know that is going to take
place. We also know, according to Secretary Perry, that all of our
troops will be out by the end of December.
IFOR will no longer exist, according to the stated plan. But there is
something else afoot, I must say, Mr. President. We have not talked
about it, but I see it starting to take place. It is somewhat undefined
right now. It is like a cloud very distant on the horizon that is
coming our way, and we ought to try to identify it, because, Mr.
President, there is afoot an attempt and a movement, I should say, in
which the IFOR--the so-called IFOR that is there today, the NATO
force--will be replaced with a new force.
That new force, presumably, will be made up of NATO members,
including the United States. The size of that force has yet to be
determined, but it will still have to be a sizable force if we are
going to deter and discourage any attempt to attack our men and women
who are serving there.
So now we have a situation in which we have pledged to the American
people it is 1 year, and that 1 year came over the strong objection, I
might say, of many on this side of the aisle. But, nonetheless, a
deployment for 1 year, and at the end of 1 year we are coming home.
That is the pledge.
What is taking place now, however, is a suggestion that we need a new
force, and that new force necessarily will have to include U.S. ground
forces. We ought to start discussing that now and not wait until after
the fact. Not wait until after November. Not wait until the Congress
has dispersed either at the end of September or early October, when we
are spread to our constituencies, and suddenly a decision is made that
we are now formulating a new policy.
The elections will come, and whether it is President Clinton who is
reelected or President Dole who is elected, a decision could be made in
that interim between November and January to create a new NATO force
committing U.S. participation. And then we would be told: ``Well, it's
a done deal. Our NATO allies are in favor of it, and now we must go
along or we undermine the credibility of the NATO force itself.'' Our
NATO allies would no longer trust the United States if we should back
away from such a commitment.
That is a subject matter that is worth discussing. It may be
necessary to do that. I have yet to identify a vital national security
interest in Bosnia, which is an artificial state, but nonetheless that
is this Senator's judgment. But we ought to be talking about that. We
should not wait until after the Bosnia elections in September. We
should not wait until after the Congress is dispersed and we adjourn
sine die. We should not wait until after the November elections and
then suddenly find, my God, the President of the United States has made
a commitment to deploy our troops in a new type of IFOR in the region,
maybe smaller, but nonetheless still significant in size.
So, Mr. President, we ought to get back to the business of having an
active, intelligent discussion of these issues. We ought to try to do
so on a bipartisan basis if at all possible. It seems to me we ought
not to look for hidden agendas. Does the Senator from Georgia have an
agenda to try to slow the process down? I do not think so. Others may
come to a different conclusion. He is raising these issues because it
is important that we prepare the American people for an analysis of
exactly what the pros and what the cons are, what the benefits are,
what the costs are.
Are we placing ourselves in greater jeopardy? Are we reducing the
jeopardy to our new friends and allies? All of that is of critical
importance, and we ought to discuss it before we take action, rather
than bemoan the fact that someone has taken action and we are called to
ratify it with no prior role or participation.
I hope we can amend the language to make it more positive, to ask
about the benefits of expanding NATO, which
[[Page S7144]]
I support. But I hope we do not simply defer these questions until some
time after the decision has been made and then have the American people
say, ``We don't want it. We don't want to pay for it. We don't want the
benefits of it. We don't want to defend Poland or Hungary or the Czech
Republic or Slovenia or the Baltics. We don't want any part of that.''
And suddenly the United States is placed in the position of saying,
``Well, we can't back out of it now. We have made the pledge.''
So I think these are important issues to be discussed. I hope that we
can help shape public opinion in favor of expansion, and I continue to
lend whatever support I can to Presidential Candidate Dole, Senator
Dole, whom I expect and hope will become the new President of the
United States.
Amendment No. 4369
(Purpose: To authorize additional disposals of material from the
National Defense Stockpile)
Mr. COHEN. Mr. President, I send an amendment to the desk and ask for
its immediate consideration.
The PRESIDING OFFICER. The clerk will report the amendment.
The bill clerk read as follows:
The Senator from Maine [Mr. Cohen] proposes an amendment
numbered 4369.
Mr. COHEN. Mr. President, I ask unanimous consent that further
reading of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
At the end of title XXXIII, add the following:
SEC. 3303. ADDITIONAL AUTHORITY TO DISPOSE OF MATERIALS IN
NATIONAL DEFENSE STOCKPILE.
(a) Disposal Required.--Subject to subsection (c), the
President shall dispose of materials contained in the
National Defense Stockpile and specified in the table in
subsection (b) so as to result in receipts to the United
States in amounts equal to--
(1) $110,000,000 during the five-fiscal year period ending
September 30, 2001;
(2) $260,000,000 during the seven-fiscal year period ending
September 30, 2003; and
(3) $440,000,000 during the nine-fiscal year period ending
September 30, 2005.
(b) Limitation on Disposal Quantity.--The total quantities
of materials authorized for disposal by the President under
subsection (a) may not exceed the amounts set forth in the
following table:
AUTHORIZED STOCKPILE DISPOSALS
------------------------------------------------------------------------
Material for disposal Quantity
------------------------------------------------------------------------
Chrome Metal, Electrolytic................ 8,471 short tons
Cobalt.................................... 9,902,774 pounds
Columbium Carbide......................... 21,372 pounds
Columbium Ferro........................... 249,395 pounds
Diamond, Bort............................. 91,542 carats
Diamond, Stone............................ 3,029,413 carats
Germanium................................. 28,207 kilograms
Indium.................................... 15,205 troy ounces
Palladium................................. 1,249,601 troy ounces
Platinum.................................. 442,641 troy ounces
Rubber.................................... 567 long tons
Tantalum, Carbide Powder.................. 22,688 pounds contained
Tantalum, Minerals........................ 1,748,947 pounds contained
Tantalum, Oxide........................... 123,691 pounds contained
Titanium Sponge........................... 36,830 short tons
Tungsten.................................. 76,358,235 pounds
Tungsten, Carbide......................... 2,032,942 pounds
Tungsten, Metal Powder.................... 1,181,921 pounds
Tungsten, Ferro........................... 2,024,143 pounds
------------------------------------------------------------------------
(c) Minimization of Disruption and Loss.--The President may
not dispose of materials under subsection (a) to the extent
that the disposal will result in--
(1) undue disruption of the usual markets of producers,
processors, and consumers of the materials proposed for
disposal; or
(2) avoidable loss to the United States.
(d) Treatment of Receipts.--(1) Notwithstanding section 9
of the Strategic and Critical Materials Stock Piling Act (50
U.S.C. 98h), funds received as a result of the disposal of
materials under subsection (a) shall be deposited into the
general fund of the Treasury and used to offset the revenues
lost as a result of the amendments made by subsection (a) of
section 4303 of the National Defense Authorization Act for
Fiscal Year 1996 (Public Law 104-106; 100 Stat. 658).
(2) This section shall be treated as qualifying offsetting
legislation for purposes of subsection (b) of such section
4303.
(e) Relationship to Other Disposal Authority.--The disposal
authority provided in subsection (a) is new disposal
authority and is in addition to, and shall not affect, any
other disposal authority provided by law regarding the
materials specified in such subsection.
(f) Definition.--The term ``National Defense Stockpile''
means the National Defense Stockpile provided for in section
4 of the Strategic and Critical Materials Stock Piling Act
(50 U.S.C. 98c).
Mr. COHEN. Mr. President, this is an amendment which I am offering,
actually, on behalf of the administration. It is something that
involves what we call research and development recoupment.
The state of affairs is as such: The U.S. companies that sell defense
equipment abroad are charged a fee by the Department of Defense for the
purpose of recouping the research and development investment that the
Department has made in developing the equipment. These fees can run
anywhere from 5 percent of the unit cost to as high as 25 percent of
the unit cost.
These recoupment fees often put our industries at a substantial
competitive disadvantage because the fees result in higher sales costs,
leading some of the buyers to simply purchase foreign-produced systems,
instead.
The Bush administration eliminated the R&D recoupment fee for
commercial arms sales, but in the case of foreign military sales, so-
called FMS, those in which the U.S. Government acts as a middleman, the
fee is actually required by law.
Last year--let me emphasize this--last year the Defense Authorization
Act included a provision to allow the President to waive the fee under
two conditions. First, if imposing the fee would cause us to lose the
sale, then the President can waive that recoupment fee. Second, if the
foreign sale would result in unit cost savings to the Defense
Department when it buys the same equipment and those fees would
substantially offset the revenue lost from waiving the fee.
Here is the problem, Mr. President. Since allowing the fee to be
waived would on a net basis lower Government revenues, last year's bill
delayed the waiver authority until the enactment of legislation to
offset the projected lost revenues through the year 2005.
So the administration, as required by last year's bill, has submitted
such offset legislation. They have now submitted offset legislation
which would cover the lost revenues by selling assets from the
strategic stockpile. The Congressional Budget Office has given its
stamp of approval to the administration's plan.
For several months there was some confusion over whether the
administration's bill would work because it significantly overestimated
how much lost revenue needed to be offset, calling into question
whether the Department of Defense could sell off sufficient stockpile
assets without interfering with the market.
Earlier this month, however, CBO concluded that waiving the R&D
recoupment fee per last year's bill would cost roughly $415 million
through the year 2005. That is about half of what the administration
originally projected would be the cost.
At the time that the Armed Services Committee marked up this bill,
CBO had yet to produce its analysis. So the issue simply was not
addressed at that time. But after we completed the markup, President
Clinton's administration said that unless we included this provision in
the offset, they would recommend a veto of the DOD bill.
So, in essence, I am acting on behalf of the administration to try to
avoid a veto of the measure by now offering that provision in the form
of an amendment, the provision that the committee had failed to
include. So I am serving here, I think, a bipartisan purpose; namely,
the administration said we are going to veto this bill unless you
include this amendment, so now I am offering the amendment to help
avoid a veto.
I know that some Members from States that produce materials that
would have to be sold have indicated some concern about the effect that
selling these strategic minerals would have on the markets. But I
emphasize, the amendment explicitly prohibits any sale that would have
an undue disruption on the markets involved.
Also, I am aware that some Senators might look at this amendment and
ask, ``Aren't we promoting international arms sales?'' I agree that we
should always be careful about what arms we sell and to whom we sell
them. But this amendment does not pose any problem in terms of unwise
arms sales.
First of all, the amendment only deals with FMS sales, which the
Government has complete control and discretion over. If a proposed sale
is unwise or against our interest, this amendment in no way creates any
incentive for U.S. officials to approve the sale. In fact, it would
create a disincentive because waiving the fee would reduce revenues.
I also note a Presidential commission on conventional arms
proliferation just last week released its report. That commission was
chaired by Janne
[[Page S7145]]
Nolan, known to many Senators because of her service in the Carter
administration and as a Democratic Senate staffer. Another commission
member was Paul Warnke, who was President Carter's head of the Arms
Control and Disarmament Agency. So we have two very strong individuals
who have served in past Democratic administrations who served on this
commission.
The commission came out with some strong recommendations to limit the
sale of conventional arms to other countries. The relevant point for
this amendment is that the commission called for the complete repeal of
FMS R&D recoupment fees.
My amendment does not go that far. Perhaps we ought to eliminate the
recoupment fee altogether. But my amendment is not trying to establish
new policy. It merely finances the policy decision that Congress made
last year when we approved the DOD authorization bill.
So, Mr. President, the President's commission on preventing the
proliferation of conventional arms sales totally supports this
particular approach. They want to eliminate the recoupment fee
entirely. This is a much more modest step. It is something that the
administration has requested. I hope that my colleagues will see fit to
support it.
Also, Mr. President, I ask unanimous consent to have printed in the
Record a letter from the Department of Defense supporting the
amendment, an excerpt from the report of the President's Advisory Board
on Arms Proliferation Policy, an article from the Washington Post
describing the general findings of the commission calling for greater
restraint in arms sales, and, finally, a letter from the Aerospace
Industries Association, which endorses the amendment.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Office of the
Under Secretary of Defense,
Washington, DC.
Senator Strom Thurmond,
Chairman, Committee on Armed Services, U.S. Senate,
Washington, DC.
Dear Senator Thurmond: Your staff has asked for the
Department of Defense views on two draft floor amendments to
S. 1745, the DoD Authorization Act for Fiscal Year 1997. The
first amendment would reinsert into the bill offsets valued
at $440 million over nine years for funding Foreign Military
Sales (FMS) from sales of excess inventories of the National
Defense Stockpile (NDS). The initial Department of Defense
legislative proposals for FY97 also contained such an offset
provision. The draft floor amendment is worded somewhat
differently from DoD's original offset proposal for FMS
sales. However, we support the amendment as long as it
contains language in subsection (c) subjecting the stockpile
sales to a provision that would prohibit disposals to the
extent that they would result in ``undue disruption of the
usual markets of producers, processors, and consumers of the
materials proposed for disposal.''
Without the market impact provision, the Department could
be in a position where we would have to sell large amounts of
its inventories of NDS materials on to the world market in
order to meet the mandatory schedule of receipts even if this
would adversely impact world markets for these materials and
harm both domestic and foreign producers. Moreover, such
action could affect the market value of the remainder of the
NDS inventories of these materials making it impossible to
meet the schedule of receipts in future years.
The second amendment would authorize sales of 10,000 short
tons of Titanium Sponge. This amendment is duplicative of the
disposal authority for Titanium Sponge in section (b) of the
first floor amendment regarding FMS offsets which authorizes
disposal of our total Titanium Sponge inventory of 36,830
short tons. Therefore, these amendments are mutually
inconsistent. We believe the FMS offset amendment should have
priority.
Sincerely,
John B. Goodman,
Deputy Under Secretary
(Industrial Affairs and Installations).
Enclosure.
Excerpt From the Report of the Presidential Advisory Board on Arms
Proliferation Policy
the r&d recoupment charge
Current law provides that when certain weapons developed
for U.S. use are sold abroad by the U.S. Government, a charge
is to be added to the price and remitted to the Department of
Defense. This requirement, intended to recover part of the
U.S. government's original investment, is called an R&D
recoupment charge. The case-by-case application of this
charge has historically been both uneven and controversial.
Various administrations have obtained numerous exceptions
from Congress, allowing the charge to be reduced or waived
for foreign policy reasons. General exceptions currently
exist in law for individual nations, including NATO allies.
Industry has argued that the charge discriminates against
defense contractors, since such recoupment rules have no such
parallel in other areas where the U.S. government has made
major R&D investments in developing and purchasing capital
equipment--for example, power generation, telecommunications,
computer systems, and nuclear reactor technology. Further,
American firms cite the R&D recoupment charge as a clear and
sometimes significant price discriminator against them as
they compete for sales in third countries against foreign
producers. These foreign competitors have no equivalent added
costs, and may even benefit from overt or covert subsidies
from their respective governments. Based upon its review of
this issue, the Board supports the Administration's stated
intent to seek repeal of the current R&D recoupment charge.
____
[From the Washington Post, June 26, 1996]
Arms Trade Menaces U.S. Security, Panel Says: Clinton-Appointed Group
Urges Restraint in Selling Conventional Weapons to Other Countries
(By R. Jeffrey Smith)
An advisory panel appointed by President Clinton has warned
that the $22 billion global trade in increasingly
sophisticated conventional arms threatens to undermine the
security of the United States and its friends and has called
on Washington and its allies to exercise more restraint in
selling such weaponry to other countries.
Noting that the end of the Cold War has reshaped the world
market for armaments and given the United States the
predominant share of all such exports, the panel said that
Washington should show more leadership to slow the
proliferation of advanced weaponry and ensure that civilian
technology are not being diverted to military use overseas.
Although the panel noted that some arms sales to friendly
regimes can add to U.S. security, it warned that modern arms
``have in some cases attained degrees of military
effectiveness . . . [previously] associated only with nuclear
weapons'' and expressed particular concerns about the risks
from selling to unstable regimes in Asia and the Persian
Gulf.
In particular, the panel called for U.S. policymakers to
stop approving some weapons exports to prop up declining U.S.
defense firms, a recommendation at direct odds with a U.S.
conventional arms control policy adopted by Clinton in
February 1995. National security interests should be the sole
criteria for making such exports, and domestic economic
pressures should ``not be allowed to subvert'' decision-
making, the panel said.
``The world struggles today with the implications of
[exporting] advanced conventional weapons,'' including the
promotion of regional arms races or political instabilities,
and risks to U.S. soldiers overseas, the panel said. It
warned of even greater problems in the future, as ``yet
another generation of weapons'' with greater destructive
power is exported.
As a result, the five-member, bipartisan panel said it was
``strongly convinced that control of conventional arms and
technology transfers must become a significantly more
important and integral element of United States foreign and
defense policy if the overall goals of nonproliferation are
to succeed.'' The report--the result of an 18-month study
with assistance from the Rand Corp.--was presented to the
White House on Friday, and is to be formally released this
week.
The U.S. shares of the global arms market is 52 percent, up
from around 25 percent nine years ago, and will likely expand
to about 60 percent by the end of the decade, according to
the report. But the size of the market has shrunk by more
than half during the same period, primarily at the expense of
Russia, which no longer ships arms to client states such as
Afghanistan, Cuba, Iraq, Syria and Vietnam. U.S. domestic
arms procurement also declined by $60 billion between 1985
and 1993.
The result is what the report describes as an ``excess
production capability'' in weapons factories around the world
that has created enormous corporate pressures to sell
products abroad. The Clinton administration paid heed to
these pressures when it decided that safeguarding the U.S.
``defense industrial base'' or certain key U.S. defense firms
should be among the criteria used in arms export decisions.
The panel said, however, that the export market remains too
small to compensate for domestic business losses, and that
``means other than questionable arms sales'' are available to
protect vital U.S. defense firms. It said that ``the best
solution to over capacity in defense industries is to reduce
supply rather than increase demand.''
This conclusion was hailed by House Budget Committee
Chairman John R. Kasich (R-Ohio), who sponsored legislation
creating the panel. ```It's the economy, stupid,' is a cute
slogan, but must never be the justification for arms sales
abroad. I am glad the commission rejected the industrial base
argument and hope the administration will implement the
recommendation.''
The panel was also sharply critical of the way the
administration reviews arms exports, accusing the National
Security Council of paying insufficient attention to the
issue and urging it to exercise more power to
[[Page S7146]]
restructure interagency mechanisms for greater efficiency,
including improved intelligence-gathering. It also said
regulations created by a half-dozen or more laws that govern
exports should be formed into a ``single, coherent
framework.''
``It looks like a very thorough, thoughtful, comprehensive
report and we look forward to studying its recommendations
closely,'' a senior administration official said.
The panel chairman was Janne E. Nolan, a senior fellow at
the Brookings Institution who was a delegate to international
arms transfer negotiations during the Carter administration.
Its other members were Edward R. Jayne II, a business
executive; Ronald F. Lehman, a former director of the Arms
Control and Disarmament Agency in the Bush administration;
David E. McGiffert, a former assistant secretary of defense;
and Paul C. Warnke, a former U.S. arms negotiator and
assistant secretary of defense.
____
Aerospace Industries Association,
Washington, DC, June 27, 1996.
Senator Sam Nunn,
Ranking Member, Senate Armed Services Committee, Russell
Senate Office Building, Washington, DC.
Dear Sam: The Arms Export Control Act currently requires
the government to add a charge on all Foreign Military Sales
(FMS) of major defense equipment to recoup costs incurred by
the government for the research and development, and non-
recurring costs for production of the products being sold.
The Bush and Clinton Administrations, recognizing that this
fee is essentially a tax on exports, asked Congress to
rescind this requirement. Furthermore, the recently published
Report of the Presidential Advisory Board on Arms
Proliferation Policy, also recommends that this charge be
eliminated.
Congress ultimately included an authority in the FY 96 DoD
Authorization bill to waive FMS recoupment requirement should
failure to do so likely result in the loss of a sale or
should U.S. Government procurement cost savings associated
with a sale substantially offset the foregone recoupment
revenue. However, this waiver authority is not effective
until qualifying budget offset legislation is enacted.
Recently, DoD has identified such a budget offset.
It is my understanding that Senator Cohen (R ME) will offer
an amendment to the FY97 DoD Authorization bill that will
enact the budget offset legislation. As I mentioned above,
the recently published Presidential Advisory Board report
states that recoupment charges should be completely
eliminated. Senator Cohen's amendment would provide only
partial repeal, and we feel that this is a fair compromise
position.
We believe that the time has come to eliminate this tax on
exports, and we urge you to support the Cohen Amendment.
Sincerely,
Don Fuqua.
Mr. LIEBERMAN. Mr. President, I am offering my support to and
cosponsorship of Senator Cohen's amendment to the fiscal year 1997
defense authorization bill which authorizes additional disposals of
material from the national defense stockpile. The revenues generated by
these sales are needed to offset the revenues lost as a result of
waiving certain surcharges on sales of U.S. defense equipment to
foreign countries aimed at recouping some of the original costs of
developing those products.
Last year, this Congress correctly saw fit to expand the President's
authority to waive these surcharges when, and only when doing so would
improve the prospects of winning contracts from foreign countries or
lowering the cost of acquiring similar equipment by the Department of
Defense. With the downsizing of our military force structure and the
concomitant reduction in demand for equipment, it has become
increasingly important for us to ensure that we can maintain a minimum
industrial base and the skilled workforce necessary to preserve our
production capabilities so as to provide for an adequate defense of our
Nation. These sales will help us maintain these manufacturing and
manpower capabilities.
In addition, the requirement for the stockpiles that would be reduced
by this amendment was established in case they would be needed in a
protracted war with the Soviet Union. Clearly, this threat has
significantly abated, and the stockpiles in question are in excess of
any near term requirement.
Mr. President, for these reasons it is important that these stockpile
sales be authorized. I urge my colleagues to vote for this amendment.
Mr. COHEN. I yield the floor.
Mrs. HUTCHISON addressed the Chair.
The PRESIDING OFFICER. The Senator from Texas.
Mrs. HUTCHISON. Thank you, Mr. President.
Amendment No. 4367
Mrs. HUTCHISON. Mr. President, I rise to speak on behalf of the Nunn-
Hutchison amendment. Let me just say that I appreciate what has been
said on the floor, and I think that all of us are moving in the same
direction. I think that we are moving in a very positive and
responsible way. This is not an issue of, are you for NATO expansion or
not? This is an issue of a responsible approach to the expansion of
NATO.
What we are asking for is a report that would ask and answer the
questions that anyone coming into a mutual defense pact would want to
be answered. Very clearly, if we are going to put up the resources of
the United States and the lives of our young men and women who are in
our armed services, we want to do it in a very responsible and studied
way.
We have simply said we want this decision to be a fully informed
decision. We want to know the extent to which any prospective new NATO
members have established democratic institutions, free market
economies, civilian control of their armed forces, the rule of law,
parliamentary oversight of military affairs. I think these are very
important questions to ask because they determine how strong a
democracy will be in any country that would be part of this very
important alliance.
I think it is important that we know what are the mechanisms for
border dispute resolutions. Certainly, we know there are going to be
border disputes among friendly nations. There are border disputes that
are not so friendly. We must know exactly what the resolution of border
disputes will be, how will it be handled, what are the mechanisms that
will be set forth for the resolution of border disputes.
Most certainly, had Yugoslavia been a member of NATO, it would have
put us in a very difficult situation. Yugoslavia was not a member of
NATO, so it was not in the perimeter of the actual NATO alliance. I
think these are very valid questions. I am certainly going to support
the informed expansion of NATO. I want to be there for especially the
countries that are trying so hard and are succeeding at having strong
economies and are putting democracies in place that are beginning to
work. I think we are looking at the time element here. We need to have
a test of time before we go into the mutual defense pact. That is what
we are saying here.
I think it is a very positive thing for all of us to ask these
questions and to make sure that if we are going to have before us the
ratification of the expansion of the NATO treaty, that we have all of
the answers to these questions, because a two-thirds vote will be
required in the Senate. We want to make sure there is overwhelming
support.
Last but not least, Mr. President, I want to make sure that we
protect the underlying NATO alliance. I think it is very important we
keep the commitment that we have in this country to our transatlantic
friendships and our transatlantic allies and alliances. To do this, we
must make sure if we expand this very important alliance, which I think
probably has been the most successful alliance perhaps in the history
of the world, that we need to do it judiciously and carefully and in a
very informed way.
I think we have seen great disagreement on American troops in Bosnia.
We did this in a NATO mission. I do not want there to be a question in
the future about the strength of NATO or our commitment to NATO. This
is our important alliance. I want to keep it strong. I think the way to
do that is to make sure when we expand, we do it in an informed way.
It is not a question if you are for or against the expansion of NATO,
but whether you are for a deliberate and informed expansion of NATO. I
think there can be no question that when the lives of our citizens are
at stake and when the money of our hard-earned taxpaying citizens is at
stake, we should know exactly what we are getting into, as should every
member nation of this alliance and every prospective member nation of
this alliance.
I speak in favor of the amendment. I hope we can work out the
language so that every single Member of the Senate will be comfortable
that this is the right thing to do. I yield the floor, and I suggest
the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
[[Page S7147]]
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, I support the adoption of the amendment
offered by the able Senator from Maine.
The Department of Defense proposed this amendment allowing the
President to waive recoupment charges on foreign military sales. This
measure to repeal the recoupment provision is strongly supported by
this administration, which feels that recoupment is an impediment to
foreign military sales. Eliminating recoupment was also supported by
President Bush's administration. So this is not a partisan issue.
Because of its support by the executive branches under both Republicans
and Democrats and because of the support on both sides of the aisle in
Congress, this matter needs to be addressed.
Some will no doubt contend that eliminating recoupment charges will
encourage an arms race. Those against repealing recoupment argue that
we are going to become an arms merchant, and that we are going to
contribute to the escalation of arms sales all over the world if this
recoupment provision is repealed. There is no basis for such claims. In
fact, the decision as to whether or not to buy a particular weapons
system is made primarily by countries and their particular defense
needs. Elimination of recoupment is not an incentive to additional arms
sales. However, its elimination will have the result of making the
United States much more competitive in terms of being able to compete
with those nations which are now both our allies in the world and also
now our industrial competitors. The United States initially enacted
laws requiring recoupment payments primarily for the benefit of our
allies, especially to enable our NATO allies to have these weapons. Now
that is no longer solely the case. Our friends are also competing
internationally with U.S. businesses, and in many cases they are
overtaking us on some of these arms sales. This ultimately affects U.S.
jobs.
Mr. President, recoupment payments were initially instituted in the
early 1960's. The intent of recoupment was to enable our Government to
recover part of the cost of developing the technology needed to fight
at the side of our NATO allies and win the cold war. However, our
allies--especially in Europe--have now also become our economic
competitors. Now, when American corporations attempt to sell military
goods, their products are burdened with a surcharge that makes American
products less competitive. These exports create and protect thousands
of American jobs and contribute billions of dollars to our national
economy. Lowering barriers and expanding opportunities for American
companies to trade abroad is critical to America's long term well-being
and international competitiveness.
If we encourage appropriate and responsible commercial foreign
military sales, we do three things. Jobs is one. Second, we save the
industrial base. The United States can use the advantage of a strong
industrial base later as our own national security problems arise.
Third, and this is very important in terms of saving money for the
Government, we are able to manufacture more units of whatever is
exported. Because of these exports, we lower the per-unit cost of
whatever the item might be. This means that when the U.S. Government
purchases that item in the future, it will cost the United States less.
If, for instance, C-17's are sold abroad, the per-unit cost of is lower
to the U.S. Government. We save the industrial base; we lower the cost
of defense purchases for the U.S. Government. For all these reasons I
think this proposed change in the law is a worthy idea.
Mr. President, the question of recoupment is also a question of
national security. If we can keep defense industry healthy doing
business that is fully supported by our laws and U.S. foreign policy,
then this same industry will be alive and healthy to produce weapons
and defense assets for the future in the event the need arises in this
increasingly unstable world. This is one strong measure in which we can
help preserve our industrial base. If our industrial base shrinks, it
would jeopardize us in the event we have hostilities elsewhere in the
world. We must respect these long-range national security implications.
The issue has jobs, economic, and security implications for our
country. For these reasons, I support adoption of this amendment.
(Mrs. HUTCHISON assumed the chair.)
Mr. GRASSLEY. Madam President, I ask unanimous consent that the Cohen
amendment be set aside for the purpose of my offering an amendment.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
Amendment No. 4370
(Purpose: To establish a commission to review the dispute settlement
reports of the World Trade Organization, and for other purposes)
Mr. GRASSLEY. Madam President, I send an amendment to the desk and
ask for its immediate consideration.
The PRESIDING OFFICER. The clerk will report.
The bill clerk read as follows:
The Senator from Iowa [Mr. Grassley] proposes an amendment
numbered 4370.
Mr. GRASSLEY. Madam President, I ask unanimous consent that reading
of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
(The text of the amendment is printed in today's Record under
``Amendments Submitted.'')
Mr. GRASSLEY. Madam President, the amendment that I am offering does
not need a great deal of discussion. The reason it does not need a
great deal of discussion at this point is because it has been
considered on the floor of the Senate and has been the subject of
hearings before the Senate Finance Committee.
This amendment incorporates the language contained in S. 1438, the
bill introduced by our former colleague, Senator Dole. It would create
a review commission, consisting of Federal appellate judges, who would
review the decisions of the World Trade Organization. It would review
those decisions made against the United States. The judges would
determine whether any decision was arbitrary or capricious, or
otherwise constituted an abuse of the World Trade Organization's
authority.
If such an abuse were found by our appellate judges, that
determination would be transmitted to the Congress. At that time, any
Member of Congress would be authorized to introduce a joint resolution
calling for the renegotiation of the World Trade Organization dispute
settlement rules.
Upon the third such determination within a 5-year period, a joint
resolution could be introduced withdrawing congressional approval of
U.S. membership in the World Trade Organization.
It should be remembered that this language was approved by the White
House as part of the compromise needed to assure passage of the Uruguay
Round and, as more and more cases will be going to the WTO in the
future, this amendment will provide a crucial safety valve to assure
that our interests in free and fair trade will be given a proper
hearing.
It should also ease the fears of any of our constituents that the
United States has somehow surrendered its sovereignty by joining the
World Trade Organization. I think such an argument is not very factual,
does not have any basis whatsoever; but those arguments are made. And
it was a major issue of concern during the debate on the approval of
the World Trade Organization 2 years ago. So we now know that not to be
true.
But Senator Dole, because of that concern at the time of the
approval, worked out this agreement with the administration, in order
to assure passage of the Uruguay Round. President Clinton strongly
supports this bill, and it is supported by the special trade
representative office. I believe that now is a good time to put this
commission into place. So I ask my colleagues to vote for this
amendment.
I yield the floor.
Mr. HOLLINGS addressed the Chair.
The PRESIDING OFFICER. The Senator from South Carolina, Mr. Hollings,
is recognized.
Mr. HOLLINGS. Madam President, I was just notified that the amendment
was called up, and I do not have my entire file on this subject here.
But I have
[[Page S7148]]
a mental file because this has been discussed back and forth over the
past several months.
What really occurred, Madam President, is that we made a disastrous
mistake in joining in the World Trade Organization. We joined the WTO
without the caution exercised in joining the United Nations. We would
never have really joined the United Nations and maintained our support
for its operations had we not had our veto power in the U.N. Security
Council.
The creation of a security council with an absolute veto by any one
member was debated at length at the time of the adoption of the United
Nations. Here we were, in the family of some 117 countries at the
time--and I think maybe 137 have joined since--and in this family of
nations, we were looked upon as the rich nation that could afford any
and every kind of contribution for the freedom of man the world around.
This was particularly true when it came to economic affairs. We agreed
to act as the market of first resort in order to rebuild the shattered
economies and in order to develop the third world. If we had any
illusions about how we are perceived in most international
organizations we need only to look back to 3 weeks ago when the--the
People's Republic of China--faced condemnation by a U.N. resolution
criticizing the People's Republic for human rights abuses. In the
United Nations they passed a resolution, joined in the Assembly with
the European Community and the United States, to get a hearing before
the Human Rights Commission. Our friends, the People's Republic of
China, immediately went down to Africa and corralled the votes, and
when the issue came up 3 weeks ago, the People's Republic of China had
the votes within the U.N. Human Rights Commission that it was what they
called a nonissue, and not to be discussed.
So here is an example of the problems we face in the international
organizations, rather than the United States being the leader we were
immediately put on the defensive and roundly condemned in the
developing world. We may think of ourselves as the light upon nations
leading the way to democracy but in international organizations we are
viewed as the hypocritical rich uncle constantly lecturing others on
how they should behave.
With respect to the World Trade Organization itself, we argued at the
time--and I will argue at length here this evening--how we lost our
rights under section 301. So we have lost those rights under 301.
Again, not just 3 weeks ago but this past week, you see where the
United States of America has abandoned the Eastman Kodak case, instead
of using sanctions for unfair practices not covered under the WTO the
Japanese have called our bluff and said in the new WTO era all disputes
must be taken to the WTO. We had no choice but to comply with their
desire to settle this dispute. If the WTO found against Japan and for
the United States in that particular case, I can tell you right now
that would be the end of the WTO. If the WTO rules in favor of the
Japanese in the Kodak case I can tell you right now, we won't need a
review commission, the pressure to withdraw from the WTO will be
overwhelming. This case amply displayed that we have lost our
independence in trade policy, the WTO has achieved its principal
objective, the elimination of U.S. unilateralism in trade policy.
There are two very important individuals that are worried about these
strains. One is the President of the United States, and the other is
the likely Republican nominee for the Presidency here come November.
These two folks are unindicted coconspirators if you will conspiring to
pass the GATT. The Senator from South Carolina would then charge them--
that is the President and the Republican nominee--as conspirators
unindicted to cover their backsides.
The Senator from Iowa has put in S. 1437, the Dole bill, Calendar No.
253, to establish a commission to review the dispute settlement reports
of the World Trade Organization.
Madam President, this is not a well-conceived thing. It need not be
well conceived because it really is to get the people past the
Presidential election. But the commission shall be composed of five
members, all of whom shall be judges of the Federal judicial circuits
and shall be appointed by the President, after consultation with the
majority leader and minority leader of the House of Representatives,
the majority leader and the minority leader of the Senate, the chairman
and the ranking member of the Committee on Ways and Means of the House
of Representatives, and the chairman and ranking member of the
Committee on Finance of the Senate.
Here is a high-level commission of Federal district judges from the
Federal judicial circuit, plus these leaders in both Houses, and
everything else, to get together to do what? To determine if three
adverse rulings by the World Trade Organization are, of course,
adverse, being against us, and, if so, then they can memorialize
Congress to pass a resolution to withdraw from the World Trade
Organization.
We can do that now. We do not need a commission.
This crowd has certainly got political gall to buck
the responsibilities of being Senators and Congressmen to any and
everybody else. It is sort of hit-and-run driving in politics in this
day--``I am concerned. I am concerned. I am disturbed.'' This crowd
should quit getting concerned and disturbed, and let us start to do
some things.
This does nothing. It can be used on the political stump in the
Presidential debates later on. ``Oh, yes, don't worry it. We got a
high-level commission that we passed this year to review it.''
Well, go over there and ask the Chief Justice of the Supreme Court of
the United States, and he will tell you these Federal district judges
have no authority to serve on such a commission. In fact, they will be
forbidden to serve on it.
This is hogwash, a cover-your-backside kind of resolution to show
that they are concerned and they are disturbed and they are watching it
carefully, as they berate, ``I am for jobs, I am for jobs, I am for
jobs.'' They are nothing but pollster politicians running around--``I
am for the family and against crime. I am for jobs and against taxes.''
And all they do is they take these seven or eight hot buttons, and they
make their little TV squibs, 20-second bites. As long as they can
articulate a lot of them with a lot of money, a lot of TV shots and
everything, come to public service, and they do not know anything else
to do.
They get in this sort of game here tonight where we have the armed
services bill, a very important measure. I serve on the Defense
Appropriations Subcommittee, so I am familiar with many of the
particular issues that need be decided here by the U.S. Senate on the
armed services authorization. But, instead of that, we got any and
everything--cattle, dog--bring it up with respect to this. This is a
grab bag for the Presidential race, and we do it, so-called, with
dignity and in seriousness of purpose, and treat it seriously by this
news crowd that my friend James Fallows has written an entire book
about, now, about breaking the news, how the media undermine American
democracy.
So it will be my purpose this evening--and I will be taking up a good
part of the evening, I would think, because I do not have some of the
colleagues alerted, but I will be taking up a good part of the evening
reading this bill and the Fallows book about how the media has
undermined American democracy by refusing to engage in the real issues
the American people should be engaged in.
Fallows really has a very interesting approach, Madam President. He
describes the dichotomy between Walter Lippmann, on the one hand, and
John Dewey on the other. Lippmann contended that the press should be an
erudite, an unusually trained and skilled group on all the complicated
subjects, and together they should decide the more or less bill of
particulars for the American public and the programs and the way they
emitted the news.
In contrast, John Dewey said, yes, they should be well trained and
skilled, fully informed of this particular subject matter, but, more
particularly, they should engage the American public in subject matters
that need to be engaged in--and that, they have not. And to tell the
American people the truth even at times they do not want to hear the
truth. The truth is the most important subject totally neglected in
this particular session of the 104th Congress is the subject matter of
trade. The helter-skelter treatment
[[Page S7149]]
given trade in November year before last was just that. We were force
fed without the proper leadership, without the proper hearings. We
tried our best at the level of the Commerce, Science and Transportation
Committee that I chaired at that particular time to bring the witnesses
from all the different trade organizations.
Madam President, I am getting good news. I feel that my good friend
from Iowa realizes how serious we are. I do not want to just act like
we do not have a point here and we are just politically rejoining.
I happen to be a friend of the distinguished former majority leader,
the Republican nominee for the Presidency. I will never forget the
early days when I had suggested the appointment of Clement Furman
Haynesworth to the U.S. Supreme Court, a distinguished South
Carolinian, and I turned to then freshman Senator Robert Dole, of
Kansas, who stayed in the Chamber intermittent hours on end to help me
with that particular appointment. We have been close friends ever
since. But I had explained to the distinguished former majority leader
that this was a subject matter not to be glossed over with one of these
cover-your-backside kind of amendments to get a judicial council like
they are studying it and they are watching it closely--all, of course,
apple sauce to get us past the November election and then once again
the total drain of America's industrial backbone.
I would be delighted to continue. I know my distinguished former
majority leader, the former President pro tempore of the Senate, the
Senator from West Virginia, had a studied amendment here. I wanted to
be able to discuss that. But I have just been notified that the
distinguished Senator from Iowa has a different idea perhaps at the
moment for this particular evening about his amendment. And I learned
in the courtroom long ago, when the judge is ruling with you, to hush,
so I yield the floor.
Mr. BYRD. Madam President, will the Senator yield before he does?
Mr. HOLLINGS. Yes.
Mr. BYRD. Madam President, I congratulate the distinguished Senator.
He will perhaps remember that one Friday afternoon, I believe it was,
most everyone had gone home and the distinguished former majority
leader, Mr. Dole, wanted to call up this bill and get it passed by
unanimous consent, and we contacted, I believe, Senator Hollings'
office and Senator Dorgan's office because I knew how they felt about
it. I think everybody was gone. I said, well, who am I to object to
this, but I just do not feel right in letting this bill pass with
nobody here, so I objected to passing the bill by unanimous consent on
that afternoon, which irritated the then-majority leader, but I was
sure I did the right thing in objecting to unanimous consent.
I voted against the GATT, as did the Senator from South Carolina; I
was very much opposed to it. I did not think too much of the
legislation that was being drawn up by Mr. Dole because it included a
number of judges, five I believe. They do not have time to engage in
matters of this kind. As a matter of fact, I received a letter dated
August 31, 1995, from the Administrative Office of the United States
Courts in which they objected to this legislation.
So I thought, well, I would like to get that judgeship panel out of
there, but I was unable to get it out, and so I decided I would try for
an amendment that would create some other entities, one of which would
be made up of business men and women and labor representatives, so that
they would have some idea of what is happening, what the impact of WTO
decisions was going to be on our own economy, jobs, and so forth.
So that was the amendment I was going to offer if this thing was
going to move, and I am sure the distinguished Senator, while he
opposed the then Dole proposal and now the proposal by the Senator from
Iowa, would not oppose my amendment if it had to go along with this
thing. If the Senate is going to act on it and take it, I would like to
have my amendment on it. But I am personally happy just to rest and let
matters take their course, and if on another day this comes up, I will
have my amendment ready if need be.
I thank the Senator. I think he has done yeoman's work here, and he
has been successful. I will sit down. I will take my seat along with
him.
Mr. HOLLINGS. I thank the distinguished Senator.
Mr. BYRD. Madam President, I ask unanimous consent to insert in the
Record the letter to which I referred from the Administrative Office of
the United States Courts.
There being no objection, the letter was ordered to be printed in the
Record, as follows:
Administrative Office of the
United States Courts,
Washington, DC, August 31, 1995.
Hon. Robert C. Byrd,
United States Senate,
Washington, DC.
Dear Senator Byrd: The Judicial Conference of the United
States opposes the enactment of S. 16, the WTO Dispute
Settlement Review Commission Act, so long as five sitting
federal judges are required to become members of this
commission. Accordingly, we applaud your action of August 11,
1995, when you declined to give consent to Senator Dole's
request to allow the Senate to pass this bill.
While you said on the floor that you do not have a full
understanding of the merits and demerits of S. 16, your
instincts were entirely correct. There is no compelling
reason why sitting federal judges have to comprise the
membership of this commission. As you say, the judiciary has
a very heavy workload, and also the responsibility to the
public and to litigants to promptly deal with the cases
assigned to them. In response to your second point, federal
judges have no special competence or experience to decide
whether a WTO dispute resolution panel complied or failed to
comply with GATT-related rules in reaching a decision.
The Finance Committee held a hearing on S. 16 on May 10,
1995. Judge Stanley S. Harris testified in opposition to the
bill on behalf of the Judicial Conference. A copy of the
Judge's statement is enclosed. Judge Harris explained that of
the 179 authorized circuit court judgeships, 16 positions are
vacant; that circuit court judges have, on average, dockets
of nearly 300 pending cases, up from 120 cases in 1970; and
that the forecast is that the caseload will continue to
increase. In sum, forcing five judges off the bench, for at
least six months each year, will have a negative effect on
judicial resources.
During the Finance Committee hearing, the issue of the
constitutionality of this bill was raised by Senator
Grassley. Judge Harris pointed out in his prepared statement
that the Judicial Conference does not offer advisory opinions
on such an issue, although he urged the committee to study
the constitutionality of this bill for itself. A witness at
the hearing, Alan M. Wolff, testified that the use of federal
judges on the commission ``does not present constitutional
problems''.
Given that, Senator Grassley asked Judge Harris his
personal opinion of whether Congress has the authority to
assign non-judicial duties to Article III judges in light of
Mistretta v. United States, 488 U.S. 361 (1989). In that
case, the Supreme Court held that sitting Article III judges
could serve on the U.S. Sentencing Commission. Judge Harris
said that the ``linchpin'' of the Mistretta decision was that
the Court recognized that the U.S. Sentencing Commission
operated ``within the essential framework of the Judicial
Branch of Government'', that the duties to be performed by
judges on this commission were clearly not judicial functions
but rather functions ``sort of in between the Executive
Branch and the Legislative Branch'', Judge Harris then
summarized as follows:
``I commend the purposes of S. 16. I think it would be
extremely unfortunate to have it begin to be implemented, get
down the track, and then get thrown off the track by a
conclusion that it involves an unconstitutional use of
Article III judges.''
In conclusion, I commend you for your action on August 11.
Hopefully, if and when the Finance Committee considers S. 16,
it will decide that all federal judges should continue to
judge as the Constitution commands, and that others can
decide whether the United States has been treated fairly by
the World Trade Organization. If I can provide anything
further to convince you to persist in opposing this bill,
please advise.
Sincerely,
L. Ralph Mecham,
Secretary.
Mr. THURMOND. Madam President, there is no question that the new
rules of the World Trade Organization, especially the new dispute
settlement regime, can create a situation of unprecedented opportunity.
It also creates a situation of potential harm to American interests if
we do not enact responsibilities by Congress on this matter.
Americans have been generally suspicious of the GATT Agreement and
the corresponding powers given to the World Trade Organization. Many
Americans feel our country might be giving up far more than we are
getting under this agreement. Most importantly, what we appear to be
giving up is some of our sovereignty, some of our ability to decide for
ourselves, and control over the laws and practices which govern us. The
biggest potential threat to our sovereignty is the new dispute
settlement process.
[[Page S7150]]
If we are to be comfortable with the international dispute settlement
process, above all else, it must be completely impartial. If the United
States does not perceive impartiality and if the WTO oversteps its
authority, then our country must be prepared to respond. That is what
this amendment calls for. The Dispute Settlement Review Commission will
help us respond. The Commission will review every adverse decision
issued by the WTO. Federal appellate court judges, which this amendment
proposes as Commission members, are especially qualified to review
these decisions, because the questions will be complex international
legal issues of whether the WTO as an international tribunal acted
within its authority, abused that authority or acted arbitrarily or
capriciously.
I believe establishing this review commission will enhance the
credibility of the WTO. It will be a powerful signal to WTO panelists
that their work must be absolutely impartial. And, a reminder of their
obligation to observe the bounds in negotiated trade agreements. And
perhaps, most importantly, it will demonstrate that the U.S. Congress
takes a strong and long-term interest in the dispute settlement process
and its proper functioning. Confidence in the WTO process was not
created merely by signing a trade agreement. Confidence must be built
up over a long time.
I believe the President has already expressed support for this
legislation in its earlier form as a bill. This is not a partisan
measure. It gives Congress some authority and some responsibility
required in international trade. We know the American people are
concerned about job loss, about exporting jobs, and about international
organizations making decisions that might affect their jobs. In this
light, the Congress should have some comment on the WTO's activities,
and if necessary, authority to initiate withdrawal from participation
if U.S. interests are abused.
It would also send a strong enough signal that some of our unfair
competitors in foreign countries understand that we are serious about
this. We are concerned about American jobs, fairness in international
trade, and the accountability of Congress in these matters.
Amendment No. 4370, Withdrawn
Mr. GRASSLEY. Madam President, I will withdraw my amendment and do
withdraw it, but I want to make some points.
The PRESIDING OFFICER. The Senator from Iowa is recognized.
Mr. GRASSLEY. My amendment is withdrawn.
The PRESIDING OFFICER. The amendment is withdrawn.
Mr. GRASSLEY. I want to make a couple of points, some of them on the
issue and some of them the situation we are in with this amendment.
This amendment has been approved by the Senate Finance Committee a
long time ago. This amendment has the support of the President of the
United States. This amendment has the support of the person who will be
the Republican nominee for President of the United States, a former
Member of this body, Bob Dole. I would imagine, if we could get this
amendment to a vote, it would carry overwhelmingly.
If anybody wonders why sometimes the political process does not work,
the decisionmaking process does not work, this is a perfect example.
How much better of a position should the Senate be in to get work done,
passing very good legislation, when the President of the United States,
who is a Democrat, thinks it ought to be done and the Republican
nominee to be thinks it ought to be. If they agree on it, it seems to
me it ought to have a pretty good chance of passing the Senate but not
so.
Just remember, that is the situation. Also remember the situation is
this in regard to the World Trade Organization, the WTO. It builds on
50 years of dispute settlement within the GATT process. There has been
a dispute settlement process to have trade disputes between two
countries settled for almost a half a century. The United States had a
lot of trade disputes with other countries before GATT over the last
half century. We would win a fair majority, a good number of those
disputes.
But under the old process, the United States could win and not win.
We could win because we had the facts on our side, the decisions were
made in our favor, but if the country we defeated wanted to ignore the
decision, they could thumb their noses at the process, thumb their
noses at the United States. If we were to take action, we could be
guilty of violating the GATT agreement, just because we were willing to
take action to do what was said to be right for ourselves in the first
place.
So the World Trade Organization has a process that will allow
disputes between countries to be settled, but it also allows
retaliation by a country if the country that is the loser in the
process is not going to honor and respect the decision.
It seems to me that anybody who wants the United States to advance as
a result of the freeing up of trade, and to have disputes settled,
ought to welcome the opportunity when there is a dispute settlement
process in which not only will the United States have as much of a
chance of winning as ever, which seems to always be in our favor, and
be able to enforce that, because if the other country will not respect
it, unlike in the past, if we were to take action, it would be GATT
illegal. If we are to take retaliatory action at this time, it will be
GATT legal. And everybody understands that the world is better off with
the freeing up of trade.
Any of the speakers on free trade, any of the speakers on GATT, have
to realize that our country has more to gain than any other country has
to gain by the freeing of trade because we already have lower barriers
than any other country has. If other countries under those agreements
bring their barriers down, we are the winners, not the losers. And $1
billion more in trade is 20,000 more jobs. That is not bad for America.
So I hope sometime we will be able to get this legislation passed.
Again, the President of the United States, President Clinton, agrees it
should be done, and Bob Dole agrees that it should be done. We should
do it.
Mr. HOLLINGS addressed the Chair.
The PRESIDING OFFICER. The Senator from South Carolina.
Mr. HOLLINGS. Madam President, right to the point, that is exactly
what is the trouble right this minute. The Finance Committee approved
GATT and the WTO. The President of the United States approved GATT and
the WTO. Senator Bob Dole approved and led the fight for the approval
of GATT and the WTO.
Now, why is the President this very minute in France beating up on
the council of the seven economic ministers? Why is he beating up on
the Japanese, trying to get their attention? Because the World Trade
Organization and the GATT agreement has chilled progress in trade
disputes.
Specifically, the Japanese will not even talk to us. They have WTO.
They know they have the vote. So, under 301, we found out we could not
use the sanctions, and if we tried to, they would retaliate against us.
Not retaliate as the distinguished Senator just referred--that is
exactly our dilemma.
So they say, point 1, it probably is a matter of terrorism. Because
publicly the public can understand that, and we all really regret the
loss. I have had 10 of those airmen--we did not lose them--we had 10
hurt in Charleston, and we had from the 9th Air Force, I would say, 30
or 40 at least flying those F-16's out of Shaw Air Base. So I do not
talk casually about that.
But the real No. 1 trade issue is this dilemma we have gotten into
with the World Trade Organization. We are not making any progress at
all. We had a semiconductor agreement. Instead of adhering to the
agreement, they ignore it now. They said, go to the WTO, go to the WTO.
We know that is a loser now.
So, politically, before the American people can appreciate --and my
distinguished colleague from Iowa can appreciate--the fact that the WTO
is a loser, before we can learn that, let us get in ahead of the curve
here, of public despondency over the trend of trade in this so-called
globalization, globalization, globalization.
Specifically, I want to make one good reference that is categorically
uncontested. In 1981, we had before then-President Reagan a textile
bill. The deficit and the balance of trade in textiles in the United
States was $4 billion. The deficit in the European Community in textile
trade was $4 billion.
[[Page S7151]]
I noted just recently, of course, that the Europeans enforce their
trade agreements. We do not. We act like we have these rights, and we
are in there moving and we are watching and everything else of that
kind. We just never have been astute to really go against these dumping
cases. We have asked for more customs agents and everything else. The
authorities, customs, tell us there are as much as $5 billion in
transshipments violations coming in here with this cheap clothing, way
less than any kind of minimum wage, child labor and slave labor, you
might call it, in the People's Republic, all being manufactured.
The deficit and the balance of trade in Europe in textiles is less
than $1 billion. The deficit in the balance of textile trade is $35.8
billion. So, the Europeans know how to deal and enforce, and
categorically have. We have taken the position of Uncle Sucker. We have
done it in defense, and we know it. We have done it in all these other
international organizations, and we know it. It is time we start
protecting our industrial backbone.
America's strength and security rests like on a three-legged stool.
We have the one leg of defense. That is unquestioned. That is what they
mean by superpower. We have the leg of the values as a Nation, and that
is strong. Yes, we feed the hungry in Somalia. We sacrifice for
democracy, to build it in Haiti. We commit troops to try to bring peace
in Bosnia. So our values, we all know, of the American good will, stand
for freedom and democracy the world around.
But the third leg of economic strength, that leg was fractured over
some 45 to 50 years now. The cold war, where we had to intentionally,
in a sense, sacrifice that leg in order to keep the alliance together.
But now, with the fall of the wall, we continue to act like we are fat,
rich and happy.
The American people see it. Why do you think they followed Pat
Buchanan wherever he went? Because he was talking sense on trade. I do
not agree with him on many of his other stances, but he was solid as a
dollar on the subject of jobs and trade. That is why he was picking up
Republicans, Democrats, Independents, all, as long as he talked that
sense on trade.
My workers know, for example, under NAFTA we have already lost, last
year, 1995, with the closure of 21 mills, the loss of 10,000 textile
jobs. Almost that many already this year have gone down to Mexico and
to Malaysia. You go over to the Secretary of Labor and the fine little
gentleman gives you the singsong, ``retrain, retrain, retrain.''
Madam President, I wish to get your attention here. If you look at
Oneida Mills that just closed--they have been there 37 years--just the
other day, 487 workers, most of them female. They make T-shirts. The
age average is 47 years of age.
Let us retrain them and assume tomorrow morning they are already
expert computer operators. Are you going to hire the expert computer
operator, 47 years of age, or the 21-year-old computer operator? The
answer is obvious. You are not going to take on the retirement costs.
You are not going to take on these medical costs. But that is what they
continue to tell you up here. The American people are losing these
jobs, losing this industry, losing, as a Nation, our economic strength.
Superpower--they are ashes in my mouth. You cannot use the nuclear
bomb, we all know that. We cannot meet them man for man on manpower. We
try to develop our technology, but the truth of the matter is, by the
year 2000--Fingleton, read his book ``Blind Side''--they will have a
larger economy with 120 million and less than the size of California,
compared with our 260 million.
They are already our manufacturing superior. Give them 4 more years,
and they will have a larger economy than we will have. In 15 years, the
People's Republic of China will be ahead of us. We are going the way of
England, I can tell you that right now: a second-rate nation with a lot
of parliamentary papers and scandalous newspapers, parliamentary
maneuvers around here and debate, debate, debate: ``I am concerned,''
``I am worried,'' ``I am disturbed,'' ``I am concerned,'' ``I am
worried,'' and nothing happens. It is all procedural.
That sorry contract over there on the House side was all procedural
bunk. Term limits, product liability--I can just go down the list of
all of those things they had in there. Constitutional amendments--it is
like running up in the grandstand like a football team: ``We want a
touchdown.'' We are on the field, and we are supposed to balance the
budget, but we have to hear all the procedural crap so we can get to
the next election and try to get elected and try to hoodwink the people
even further.
It is time we stop this nonsense and realize--I say to the
distinguished Senator from Iowa that I am just as much an agricultural
Senator as he is. I got up to WHO in Des Moines, IA. It was 5:30 in the
morning. ``No Democrat would appear.'' I did.
The first question for me was, ``Senator, how do you expect to get
any votes out here in Iowa when you are standing for all the
protectionism for the textile industry?''
I said, ``Wait one minute.'' It was a young lady. I said, ``Madam,
the truth of the matter is that we don't ask for any protection. What
we ask for is protection of our agricultural products. We believe in
price supports and import quotas and those Export-Import Bank
subsidies. We've got wheat, too, and corn. We've got agricultural
products.''
Until I was Governor, we were an agricultural State. Now the majority
are in industry today. We have to find technical training and skills,
but we think highly of agriculture. So do not think we do not know
about agriculture and jobs and wheat. We want to sell it, too, but we
have to have a balanced approach to try to maintain America's
industrial backbone.
So I appreciate the position of the distinguished Senator from Iowa
tonight, and I hope he will give me a little bit more notice next time,
because I thought once the distinguished Senator from Kansas, the
former majority leader, had left us, that that was one problem solved
and we could go on and get some other things done.
But I can tell you now why that passed before with all of those. We
had fast track, no amendments, limited time. When your amendment comes,
we will not have fast track, we will have amendments, and we will have
unlimited time, and my distinguished senior Senator has set the pace
for unlimited time and debate. I yield the floor.
Mr. THURMOND addressed the Chair.
The PRESIDING OFFICER. The Senator from South Carolina is recognized.
____________________