[Congressional Record Volume 144, Number 21 (Thursday, March 5, 1998)]
[Senate]
[Pages S1395-S1434]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
INTERMODAL SURFACE TRANSPORTATION EFFICIENCY ACT OF 1997
The Senate continued with the consideration of the bill.
Mr. McCONNELL addressed the Chair.
The PRESIDING OFFICER. The Senator from Kentucky.
Amendment No. 1708 to Amendment No. 1676
(Purpose: To require that Federal surface transportation funds be used
to encourage development and outreach to emerging business enterprises,
including those owned by minorities and women, and to prohibit
discrimination and preferential treatment based on face, color,
national origin, or sex, with respect to use of those funds, in
compliance with the equal protection provisions of the 5th and 14th
amendments to the Constitution)
Mr. McCONNELL. Mr. President, I send an amendment to the desk.
The PRESIDING OFFICER. The clerk will report.
The assistant legislative clerk read as follows:
The Senator from Kentucky [Mr. McConnell] for himself, Mr.
Gorton, Mr. Sessions, Mr. Hutchinson, Mr. Ashcroft, Mr.
Helms, and Mr. Smith of New Hampshire, proposes an amendment
numbered 1708.
Mr. McCONNELL. Mr. 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.'')
Privilege of the Floor
Mr. McCONNELL. Further, Mr. President, I ask unanimous consent that
Melissa Laurenza, an intern on my staff, be granted floor privileges
during the consideration of the amendment that is pending at the desk.
[[Page S1396]]
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. McCONNELL. Mr. President, I rise today to introduce my amendment
to bring the federal highway program into compliance with the
Constitution and with the recent landmark case of Adarand versus Pena.
According to the Congressional Research Service, the federal
government currently runs approximately 160 preference programs that
hand out jobs and contracts based on race and gender. Congress now has
an historic opportunity to take a small step toward equal protection
for all citizens by ending one of these 160 preference programs.
As the Senate seeks to put a new transportation bill into play, we
must allow the costly and divisive ISTEA quota to go into retirement.
ISTEA mandates that ``not less than 10 percent'' of federal highway
and transit funds be allocated to ``disadvantaged business
enterprises'' (``DBEs''). Firms owned by officially designated minority
groups are presumed to be ``disadvantaged.'' The government has placed
the stamp of ``disadvantage'' on groups with origins ranging from Tonga
to Micronesia to the Maldive Islands.
And, Mr. President, what is the reward for these government-preferred
firms? The reward is a $17.3 billion quota. In other words, if the
government decides that you are the preferred race and gender, then you
are able to compete for $17.3 billion of taxpayer-funded highway
contracts. But, if you are the wrong race and gender, then--too bad--
you can't compete for that $17 billion pot.
Frankly, I am astonished that any Member of this Senate would ever
think such a provision is fair, prudent, or constitutional. In fact,
the courts have clearly decided that this $17 billion quota is neither
fair nor constitutional.
respect for the constitution
First of all, Mr. President, the Constitution requires that we end
this race-based quota. ISTEA's racial presumption was specifically
addressed in the recent landmark case of Adarand versus Pena, where the
Supreme Court found that the presumptions subjected individuals to
unequal treatment under the law. The Court ruled that the presumption
was unconstitutional--unless the government could establish that the
race-based program was narrowly tailored to meet a compelling
governmental interest.
Let me repeat. That is the test, Mr. President, narrowly tailored to
meet a compelling Government interest.
The court held--and it is illustrated here on this chart, straight
from the opinion, that: ``. . . Section 1003b of ISTEA . . . and . . .
the regulations promulgated thereunder . . . are unconstitutional.''
The court specifically ruled on this program--yet somehow it is still
in the bill--that it is unconstitutional.
Mr. President, I don't need to remind everybody that when we first
came to the Senate, we took an oath right down here at the front of the
room. And we said, ``I do solemnly swear that I will support and defend
the Constitution of the United States.''
So, Mr. President, on the one hand we have a Supreme Court decision
striking down this set-aside in the highway bill and, on the other
hand, we have the oath that we took to uphold the Constitution.
Mr. BAUCUS. Mr. President, will the Senator yield for a point of
clarification?
Mr. McCONNELL. Let me finish my statement.
Mr. BAUCUS. Just so that the people watching know what the facts are
here, I was going to ask the Senator, is that quote on that chart the
Supreme Court statement, or is that not the Supreme Court statement--
that quote?
Mr. McCONNELL. It is a decision of a district court. But it is a
finding of the district court, upon remand of the Supreme Court
declaring that very standard unconstitutional, and sent it back down to
the district court which said we looked at it based upon the Supreme
Court decision and we found it unconstitutional.
Mr. BAUCUS. That is not the words of the Supreme Court.
Mr. McCONNELL. I thank my friend from Montana and look forward to
debating him on this important issue over the next 8 hours and 45
minutes.
First of all, Mr. President, the Constitution requires that we end
this race-based quota.
ISTEA's race presumption was specifically addressed in the case I
just referred to where the Supreme Court found that the presumptions
subjected individuals to unequal treatment under the law. The Court
ruled that the presumption was unconstitutional unless the Government,
as I said, could establish that the race-based program was narrowly
tailored to meet a compelling Government interest. That is the test.
This past summer, the district court in Colorado, as I just indicated
to my good friend from Montana, followed the Supreme Court's lead and
found that the Government, in fact, could not meet the Supreme Court's
test.
Specifically, the district court ruled, as in the chart that I
referred to--and if I said the Supreme Court, I stand corrected--the
district court ruled, as I just referred to the chart, section 1003(b)
of ISTEA and the regulations promulgated thereunder are
unconstitutional.
The court went on to declare that the Government was precluded from
the use of percentage goals found in and promulgated pursuant to ISTEA.
It could not be more clear that the Supreme Court set up the
standard, sent it back down to the district court, they applied the
standard, and found this provision unconstitutional.
It is now incumbent upon the legislative branch to bring ISTEA into
compliance with Adarand and the Constitution. That is precisely what my
amendment does, plain and simple. It prohibits the highway program from
engaging in discrimination or preferential treatment based on skin
color and gender.
In fact, as I indicated earlier, we all remember how we began our
careers here by swearing to uphold the Constitution. Here is a clear
example of a legislative provision that has been litigated, been found
unconstitutional, and, surprisingly enough, is still being proposed to
continue as part of the law of the land.
So we have, on the one hand, the courts telling us loud and clear
that ISTEA's racial preferences are unconstitutional and, on the other
hand, our own public oath to uphold, support, and defend the
Constitution. We have little choice but to comply with the unambiguous,
unequivocal mandate of the courts and end this unconstitutional race-
based program.
Every time the Government hands out a highway contract to one person
based on race or gender, it discriminates against another person based
on race or gender. Michael Cornelius recently spoke poignantly to this
point before the Constitution Subcommittee over in the House of
Representatives. He explained that his firm was denied a Government
contract under ISTEA, even though his bid was $3 million lower than the
nearest competitor--$3 million lower. Mr. Cornelius' bid was rejected
because the Government felt that the bid did not use enough minority-
or women-owned subcontractors.
If you think that ISTEA's quota is only a goal, just ask Michael
Cornelius. The Cornelius bid proposed to commit 26.5 percent of the
work to firms owned by minorities and women. Yet 26.5 percent was not
enough, in the world of so-called ``goals and timetables.'' These goals
and timetables are more appropriately called quotas and set-asides. You
see, the combined Federal, State, and local goal under ISTEA was 29
percent, and Mr. Cornelius' 26.5 percent did not perfectly match the
Government's so-called goal, and thus the Government awarded the
contract to the highest bidder--the highest bidder, Mr. President.
Do you know how much the winning bidder proposed to contract to
minority firms? I'll bet you can guess. I'll tell you how much work the
winning bid promised to funnel to preferred firms--29 percent. Surely
that is a coincidence, that the winning firm met the so-called goal
exactly, right on the point. But, you know, the average person would
hear this story and conclude that 29 percent is not merely a goal. The
average person would conclude that this so-called goal is really a
quota, and that is, in fact, precisely what it is. It is a race-based
quota and it is unfair, unconstitutional and, frankly, just plain un-
American.
[[Page S1397]]
So here we have the Government committing racial and gender
discrimination and paying $3 million extra just to do it. Let me
repeat. We have the Government committing racial and gender
discrimination and paying $3 million extra just to do it. The message
to Mr. Cornelius, his wife, his children and his employees, over 80
percent of whom are women and minorities, is: Sorry about the
discrimination against all of you, but the Federal Government requires
it. The Federal Government requires the discrimination. Mr. Cornelius
has publicly challenged Congress to give contracts to the lowest bidder
and spend the excess millions of dollars in ways that will actually
help low-income minorities, and that is exactly what my amendment
proposes.
This story of unfairness and discrimination is only one of the many,
many stories that result from the unconstitutional ISTEA quota mandate.
It is important to remember, as we debate this amendment, that
discrimination by any other name is still discrimination and it strikes
at the very core of the person being discriminated against.
Next, respect for our States and our cities compels Congress to end
the ISTEA quota. More and more States are being forced to choose
between court decisions, on the one hand, that order the termination of
preference programs, and, on the other hand, Federal Department of
Transportation officials who order them to promote preference programs
as a condition for receiving Federal aid. So here we have it, a
situation in which a State or a city is caught between a court decision
saying you cannot do this anymore and a Federal Department of
Transportation saying you must do it or you cannot have any money. The
administration would have the American people believe that Adarand is
only one decision by one court. It is much more than that. It is a
landmark Supreme Court decision and is now the law of the land.
Moreover, it is part of a widespread series of recent court orders
striking down preferences.
According to the Congressional Research Service, the Adarand decision
``largely conforms to a pattern of Federal rulings which have
invalidated State and local government programs to promote minority
contracting in Richmond, San Francisco, San Diego, Dade County, FL,
Atlanta, New Orleans, Columbus, OH, Louisiana, and Michigan, among
others.'' And new challenges continue to be filed. Congress must act
now to allow cities and States to get out of this constitutional
crossfire that they are caught between: On the one hand, courts saying
you cannot operate that way anymore and, on the other hand, the Federal
Department of Transportation saying you must operate that way.
I pointed out in some detail the very real human and societal costs
of ISTEA's racial preferences. Let me also point out that ISTEA has
serious financial costs for our country. Every time the Government
ignores the lowest bidder and pays more for a highway contract based on
race, it costs the taxpayers real and substantial dollars. As I pointed
out in Mr. Cornelius' case, the cost was $3 million. But there is a
global cost as well. Based on a 1994 study by the General Accounting
Office, ISTEA's racial preferences over the next 6 years will cost the
Nation $1.1 billion in unnecessary construction costs. And that doesn't
even include the administrative costs of running the program,
certifying firms as officially preferred every single year, and then
running an elaborate enforcement scheme to ensure that everybody meets
the racial quotas on every transportation contract.
Also, that $1 billion does not include litigation costs. As I pointed
out, racial contracting programs are being struck down all across the
country and more cases continue to be filed. State governments and the
Federal Government are being forced to spend countless dollars
defending plainly unconstitutional race-based quotas. So, let me
reiterate. We are authorizing a bill that not only requires
discrimination, it wastes over $1 billion of taxpayer money by ignoring
low bidders and funneling contracts to persons who are of the
officially approved race and gender.
The Federal Government ought to take the lead in ensuring that all
citizens are given opportunities without regard to race, color,
national origin, or gender. In that spirit of equality and
entrepreneurship, my amendment displaces the race-based Disadvantaged
Business Enterprise Program with a race-neutral Emerging Business
Enterprise Program. So let me make sure everybody understands. My
amendment replaces the race-based Disadvantaged Business Enterprise
Program with a race-neutral Emerging Business Enterprise Program.
My amendment requires every State that receives Federal highway
dollars to take concrete and specific action to enable emerging
businesses to compete for highway contracts and subcontracts. For
example, States will be required to maintain a directory of emerging
business enterprises and specifically provide outreach and recruiting
for highway contracts. The bill also requires targeted outreach and
recruiting of emerging businesses owned by women and minorities.
Finally, States will be required to provide technical services and
assistance on critical issues such as bonding, lending, and general
business management, including estimating and bidding practices.
This amendment requires a major outreach effort to make sure that
people understand how to compete for business. The emerging business
enterprise amendment offers genuine opportunity for substantive
business development of all emerging businesses, regardless of race or
gender. The emerging business enterprise program will allow small
businesses to learn how to compete instead of simply developing a
destructive dependence on bid preferences.
One example of the destructive tendency of preferences comes from a
very thoughtful book entitled, ``The Affirmative Action Fraud.'' In
that book, Clint Bolick explains that the Rocky Mountain News recently
tracked 100 companies that received contracts in 1985 under the city of
Denver's racial preference program. Denver's minority contracting
program required that a certain percentage of all contracts had to be
funneled to minority-owned firms. Ten years later--that was in 1985--10
years later, 42 minority firms had gone out of business, 34 were still
dependent on this supposedly temporary program, and only 24 were still
in business and actually independent from the program.
In point of fact, the current DBE program has a dismal graduation
rate. According to a GAO study, between 1988 and 1992, fewer than 1
percent of the DBE firms graduated from the DBE program. The General
Accounting Office reviewed six States to see how the States were
preparing DBEs to compete. In 1992, those 6 States had 4,717 certified
disadvantaged business enterprises. Out of those, 4,717 DBEs, only 17
graduated--17 out of 4,717. And most of the DBEs had been in the
program at least 3 years and apparently had learned very little.
The EBE program is a much needed replacement of the failed and
unconstitutional DBE program. Even the Department of Transportation has
conceded that the Disadvantaged Business Enterprise Program does not
prepare minority businesses to compete in the real world. On May 30 of
last year, DOT acknowledged the low graduation rates of its firms and
conceded in the fine print of the Federal Register that, ``The DBE
program does not provide for an encompassing business development
program.''
In short, all Federal contracting programs should meet a four-pronged
test. They must be constitutional, colorblind, merit-based, and
inclusive--constitutional, colorblind, merit-based, and inclusive. My
race-neutral amendment will ensure that the Federal highway program
passes this test.
It is time to end the divisive discriminatory practice of awarding
highway and transit construction contracts based on race, gender and
ethnicity of a company's ownership. Respect for our Constitution, our
courts, our States, and our individual citizens demands no less.
It is time to move beyond racial quotas and set-asides and focus our
national effort on improving the ability of small businesses,
especially those who are women and minorities, to compete through
genuine outreach and business development--genuine outreach and
business development, and that, Mr. President, is what this amendment
would do. It would take
[[Page S1398]]
out the clearly unconstitutional Disadvantaged Business Enterprise
Program, which is not only unconstitutional, but a conspicuous failure,
and replace it with a race-neutral emerging business enterprise program
that complies with the Constitution and can succeed.
Mr. President, I will stop at this point and inquire as to how much
time I have remaining.
The PRESIDING OFFICER (Mr. Smith of Oregon). The Senator has 3 hours
38 minutes remaining.
Mr. McCONNELL. I yield to the distinguished Senator from New
Hampshire whatever time he may need.
Mr. SMITH of New Hampshire. The Senator caught me a little bit by
surprise. I appreciate the Senator yielding. I will take 3 or 4 minutes
to make some comments, Mr. President, on behalf of my colleague's
amendment.
Again, the Senator from Kentucky is out in front taking the lead on
an issue which, when you look at it on the surface, appears to be the
right thing, but when you look deeper, you know that it is not. Again,
he has had the courage to take a lead on this.
This amendment would, I believe, end one of the most costly and
unfair and unconstitutional, as the Senator from Kentucky has said,
minority set-aside programs in our Federal Government. As the Senator
has already said, ISTEA mandates that ``not less than 10 percent'' of
Federal highway and transit funds be allocated to ``disadvantaged
business enterprises.'' These are firms owned by officially designated
minority groups presumed to be socially and economically disadvantaged.
The Senator from Kentucky already mentioned the Supreme Court case.
In the 1995 case, the Supreme Court spoke on this issue in Adarand v.
Pena. Senator McConnell has gone into the details extensively, and I
will not go back through it. But in that decision, as he has said, it
is explained that not only the Supreme Court but a U.S. district court
has ruled that this minority set-aside program is unconstitutional.
It does seem somewhat, I don't want to say odd, but maybe ironic that
we on the floor of the Senate have to debate to take language out
through an amendment a piece of legislation that has already been ruled
unconstitutional. I don't know what that says about the process, but it
does not sound very good to me that we have to do that.
It would seem to me that the logical thing to do would be to not have
it in here; in other words, let's end this program and let's not have
it in the legislation as we proceed. But it is there.
Plain and simple, this is an affirmative action program for
contractors. The administration's attempt to comply with the Court's
decision by fiddling around with the DOT regulations does not meet the
constitutional litmus test. Therefore, it is now incumbent on the
Congress to bring ISTEA into compliance with our Constitution.
We now have a major piece of legislation, i.e. the Intermodal Surface
Transportation Efficiency Act, ISTEA, and in order to pass it, we have
to bring it into compliance with our Constitution.
It is one thing for the Federal Government to carry out unfair quota-
based programs, which most reasonable people oppose, but it is
bordering on outrageous, if not outrageous in and of itself, to say
that the Federal Government should now mandate these very same unfair
quota-based systems on its face, which is exactly what is going on
without the Senator's amendment.
This is a time-consuming, a very costly burden to the States. Some of
the States, like my own State of New Hampshire, simply don't have, to
be very candid about it, some of the significantly racial minority
populations. So what happens is, it forces us into a position where we
have to deal with the bureaucracy and twist and turn and try to jump
through as many hoops as possible to meet that 10 percent DBE goal,
which, as the Senator from Kentucky mentioned, is not good public
policy. As the Senator well knows and has said--and I agree with him--
the opportunity to gain employment ought to be based on merit, not be
based on any type of quota.
So by continuing this and the other 150-plus, I might add,
preferential treatment programs--150 other preferential treatment
programs--we are encouraging businesses to tie their business
strategies to unconstitutional programs. As I said, what does this say
about our process here, that we are encouraging businesses to tie their
business strategy to something that is unconstitutional? The Court has
spoken; two courts have spoken. Let's listen to the courts. It is
sending the wrong message to many people, whether it is constitutional
students or whether it is simply the minority startup businesses that
we are trying to help.
A better way, as the Senator has suggested, is to encourage minority
entrepreneurs with a small business outreach program, which Senator
McConnell has in his amendment. It is a good amendment. This
alternative will still provide assistance to smaller minority-owned
businesses without the heavy-handed mandate upon our States.
Most Americans do not support preferential treatment programs, Mr.
President, no matter where they come from or who they are supposed to
help. We now have an opportunity to end one right here on the floor of
the Senate, to end special preferential treatment. This is an
opportunity to do that.
I urge my colleagues to do two things: One, to uphold the
Constitution, which, with all due respect to my good friend, is more
important than the McConnell amendment, but the language of the
McConnell amendment should be the second reason we should support it.
So support the Constitution and support Senator McConnell and adopt the
amendment. I yield to my colleague.
Mr. McCONNELL. Mr. President, let me say to the distinguished Senator
from New Hampshire, this is not exactly an isolated case. The Senator
from New Hampshire mentioned that the trend in the courts--in fact,
Richmond, San Francisco, San Diego, Dade County, New Orleans, Columbus,
Louisiana and Michigan are all court cases striking down these kinds of
preferences; in other words, striking down Government discrimination
based upon race in general.
What is astonishing, I agree with my dear friend from New Hampshire,
is that this is in this bill in the wake of the decision.
I wonder how long it is going to take, I ask my friend from New
Hampshire, at this rate with every single aggrieved party having to
sue, I wonder if my friend from New Hampshire has any sense of how long
it may take to get these preferences off the books and bring American
practice, Government practice into line with the Constitution.
Mr. SMITH of New Hampshire. A lot longer than the Senator from
Kentucky and I would want it to take.
Mr. McCONNELL. We probably won't be here.
Mr. SMITH of New Hampshire. I don't think so.
Mr. McCONNELL. It is an astonishing development. I thank my good
friend from New Hampshire for his important contribution.
Mr. President, I believe the Senator from Alabama is here and would
like to speak as well. I yield him whatever time he may need.
Mr. SESSIONS. Mr. President, I thank Senator McConnell. I say to
Senator Smith, we appreciate your comments and thoughtful insight into
this very important subject for our Nation. We want to do the right
thing with regard to all of our citizens. We want to have a nation in
which civil rights are protected and where everyone has an equal
opportunity to participate in the American ideal. It is a very, very
important issue.
I thank Senator McConnell for developing the kind of amendment that
will accomplish, I think, the legitimate goals of those who would like
to see more opportunity in contracting Federal road contracts while at
the same time protecting the great constitutional privileges that all
of us in this Nation have a right to count on.
I serve on both the Environment and Public Works Committee, from
which this legislation came, and the Judiciary Committee. In the
Environment and Public Works Committee, we had no hearings, took no
testimony, did no study as to the advisability and the practicality of
how these preferences work out in real life.
For a number of years, I was a U.S. attorney and had the opportunity
to prosecute criminal cases of all kinds and sorts. I have a distinct
recollection of a case involving a minority individual who had gotten,
I think, a $250,000
[[Page S1399]]
contract primarily because he was a minority. He was not the low
bidder. He got the contract because of the preference set-asides in
this highway bill. He promptly turned around and subcontracted the
entire contract work to another contractor, presumably not a minority
contractor, who did all the work and, in fact, there were false
statements made in the course of this situation, for which he was
convicted. But there is a lot of abuse in which people put up
individuals as straw people just to take advantage of this provision.
There are a lot of problems with the implementation of this act that
I could talk about at some length. Fundamentally, I will say the bill
is not good policy. It is not the kind of interference into the bid
process that we ought to have in this country. But secondly, and most
important, I will talk a few minutes about the fact that it is not only
bad policy, but unconstitutional.
We had hearings in the Judiciary Committee on this subject, both
before the full Judiciary Committee and before Senator John Ashcroft's
subcommittee. The House of Representatives Judiciary Committee has also
had hearings on this, which is chaired by Representative Canady from
Florida, who is an eloquent spokesman on this subject, who has come to
see, with absolute clarity, the unconstitutionality and the unfairness
of the racial set-asides that we now have in this bill.
Let me say this: The McConnell bill is good. It is a good approach
because it encourages new companies; it helps people get involved and
get into business for the first time and gives them a lot of other
advantages. We ought to do that. We ought to have outreach. We ought to
have affirmative action. That is a good ideal for America. It is
something that ought to be a part of our law insofar as it is
appropriate to do so. But it is wrong to have quotas and set-asides.
We first started affirmative action on March 6, 1961. That was when
President John F. Kennedy issued this order:
The contractors will take affirmative action to ensure that
applicants are employed and treated during their employment
without regard to race, color, creed or national origin.
That is an ideal with which we can all agree. That is an ideal we can
all support. It is something we ought to support and we ought to
believe in in this Nation. But President Kennedy did not go as far as
we have gone today, where we have actual set-asides that give
preferences to one group of people on account of their race and denies
a benefit or an equal opportunity to another individual on account of
their race. That is what is objectionable about this legislation.
Let me just say, how did we get to this point? I have, I think, an
idea about how we got to this point.
Most of us recognize and can remember that there was systematic
discrimination against African Americans and other minority groups in
this country as little as 30 years ago by law, in some instances. This
was an unacceptable event.
When the courts dealt with that, whether it was a police department
or a fire department or a State agency, they would enter remedial
orders, and they would put demands on those agencies to take immediate
steps to make up for the explicit discrimination that had been suffered
in that agency or department. The courts have always affirmed that.
Somehow we slipped from these situations into generalized quotas as
part of American law. That is a move which is not justified by policy
or law, and the United States Supreme Court, and other courts, are
beginning to make quite clear that it is unacceptable.
The people of California, with proposition 209, spoke quite clearly
as to their view about it, and the courts have promptly affirmed
proposition 209, even though this administration and the President of
the United States filed a brief saying it was unconstitutional. The
Ninth Circuit Court of Appeals ruled that there is no doubt that
proposition 209, which prohibited these kinds of quotas and set-asides,
was constitutional. I think that we have to deal with this issue
because it will not go away.
I was present in the Judiciary Committee hearing when Mr. Pech, who
was the chief operating officer of Adarand Constructors, testified. And
I have done some research into the law. And I would like to share my
thoughts with this body.
The Constitution requires all of us, not just judges, to uphold the
Constitution. We swore an oath, as is on that chart to do just that. I
believe section 1111 of the ISTEA legislation is clearly
unconstitutional under the Adarand Constructors, Incorporated v. Pena
case, the landmark 1995, Supreme Court decision.
Adarand involved the same program with the exact same language in
this new authorization that was in the previous bill. That was the
language the Supreme Court was dealing with and reviewed. In Adarand,
the Court ruled all--all--governmental racial classifications, like the
ones we have in this legislation, like the one it was considering in
the Adarand case--the same language--are subject to the strictest
judicial scrutiny.
The Court held ``federal racial classifications, like those of a
state, must serve a compelling governmental interest and must be
narrowly tailored to further that interest.''.
It ``must be narrowly tailored.'' There must be a compelling
interest.
Now, some make the argument--and this is a matter we have heard a lot
about recently--some make the argument that the Supreme Court did not
strike down this program in Adarand. But I just say this. It did not
uphold it, clearly. What they did was set a standard for the validity
or invalidity of this program. And they referred the case back to the
district court who tried it. And it gave that district court remand
instructions. They remanded it, and they gave them instructions as to
how they should evaluate whether or not this statute violated the
Constitution.
Justice Scalia, who was on the Supreme Court, wrote in his
concurrence:
[i]t is unlikely, if not impossible, that the challenged
program would survive under this understanding of strict
scrutiny, but I am content to let that be decided on remand
[by the district court].
Based on the instructions and the law, as set forth by the Supreme
Court, it was not surprising that on remand the Federal district court
properly ruled, on summary judgment, that this program, this set aside
program, was unconstitutional. They left no doubt about the
constitutionality of this program. The district court stated:
I find it difficult to envisage a race-based classification
that is narrowly tailored. By its very nature, such a program
is both underinclusive and overinclusive.
Now, those are legal terms. Somebody might think, ``What does that
mean, `underinclusive' and `overinclusive'?'' What the judge was saying
simply: It is unfair. It overincludes people beyond who ought to be
included; and when you do that, you underinclude people who have a
right to be included in the bid process, and have a right to
participate in these programs.
That is the fundamental constitutional wrong. It gives advantages to
people who do not deserve it; and it is a disadvantage to people who do
not deserve to be disadvantaged. That is a fundamental constitutional
principle. It will not go away.
So the Court also enjoined, issued an order stopping the defendants
from administering, that is, Secretary Pena, from administering section
1003(b) of the ISTEA.
So I would say to anybody who looks at this matter fairly and
objectively, without hesitation, there is no doubt that under the
current state of the law, regarding this specific statute, it has been
declared unconstitutional by the courts of the United States.
Now, yes, they can appeal this district court ruling. But based on
the plain holdings of the Supreme Court, which the district judge
clearly followed in his opinion, I submit to you there is virtually no
chance that it will be reversed. The Supreme Court of the United States
cares about this issue. They care about making sure everybody in
America has equal treatment. They want to see race relations in America
improve, but they have studied it and they have thought about it.
The courts have fulfilled their responsibility, in my opinion. And
what have they thought? And what have they decided? Our federal courts
have looked down the long road into the future, and they have asked
themselves: Will this Nation be better served if we allocate goods and
resources and contracts based on the color of one's skin?
[[Page S1400]]
Is that a defensible policy for a nation to undertake? Can we do that?
And they have concluded, no, you cannot, because when you do that you
deny someone else an equal right to apply.
Other Supreme Court cases have rendered very similar opinions. Bush
v. Vera, Miller v. Johnson, Shaw v. Reno, and Richmond v. J.A. Croson
Co. all have subjected Government racial preferences and
classifications to the strictest scrutiny. In each one of these cases,
the Court has found these racial classifications unconstitutional.
Section 1111 simply reenacts, without change, the same statutory
language that was invalidated in Adarand Constructors, Inc. v. Pena.
Mr. President, section 1111 literally does not change one single word
in the definition of ``socially and economically disadvantaged
individuals''.
Both the previous ISTEA legislation and section 1111 refer to the
exact same definition in the Small Business Act. This definition
states--and I have the legislation here before me--it states that
``contractors shall presume that socially and economically
disadvantaged individuals, including Black Americans, Hispanic
Americans, Native Americans, Asian Pacific Americans, and other
minorities or any other individual found to be disadvantaged by the
administration under the Small Business Act, shall be presumed to meet
the standard for socially and economically disadvantaged.''
So that is statute--the problem is not regulations. Some would say
``Well, you're quoting from regulations. They might change the
regulations.'' This is the Small Business Act. That is specifically
referred to in this highway bill to define what ``socially and
economically disadvantaged individuals'' are. And it gives a racial
preference. It says that a black individual is presumed to be socially
or economically disadvantaged whereas a struggling white businessman
may not.
So what we have here is an overtly racial Government classification.
That is why the Supreme Court is concerned about it. Consequently,
nothing in this reenactment does anything to strengthen the arguments
that this section is constitutional. We, indeed, held no hearings on
it.
Moreover, there is no legislative record to support this racial
classification. The Environment and Public Works Committee did not hear
any testimony concerning the constitutionality of this section or the
regulations promulgated pursuant to its identically worded predecessor.
The only hearings we had were in the Judiciary Committee, as I
mentioned earlier.
Now, the Clinton administration suggests that the new regulations
promulgated by the Department of Transportation somehow strengthen the
case for the constitutionality of this provision. This, however, is a
totally ineffective argument. Subsequent regulations simply cannot
repair a statute that is, on its face, unconstitutional. It is
difficult for me to see how anybody would argue otherwise. The courts
have held--and I will read the opinion of the district judge here, the
district judge, when he found this thing unconstitutional. He said:
``The statutes and regulations concerning the SCC program are
overinclusive, and they presume that all those in the named minority
groups are economically or, in some act and regulation, socially
disadvantaged. This presumption is flawed.''
The Court held that both the regulations and the statute
are unconstitutional. The statute is what the Supreme Court dealt with
when it sent the district judge its instructions.
Finally, some suggest that the Adarand v. Pena decision does not
render section 1111 unconstitutional. They point to the language of
Justice O'Connor when she wrote in the opinion:
We wish to dispel the notion that strict scrutiny is
``strict in theory but fatal in fact.'' The unhappy
persistence of both the practice and the lingering effects of
racial discrimination against minority groups in this country
is an unfortunate reality, and the government is not
disqualified from acting in response to it.
So they say, ``Jeff, she just said what you say is not true. Adarand
really did not close the door on this statute.'' But, Mr. President,
these advocates do not read the very next sentence in Justice
O'Connor's decision where she immediately explains this quotation.
Justice O'Connor's next sentence cites, as an example, a State
governmental agency that had been found to have been engaged in
``pervasive, systematic, and obstinate discriminatory conduct.'' All
Justice O'Connor says in this passage is that proven, widespread,
systematic discrimination can justify ``a narrowly tailored race-based
remedy.'' In other words, a limited racial preference can be
constitutional as a remedy for a proven case of specific governmental
discrimination.
However, section 1111 is not a remedy for specific governmental
racial discrimination. As I said earlier, there has been no
determination in this case that the administration of the Federal
Highway System is systematically and pervasively biased in its
operation.
Mr. McCONNELL. Will the Senator yield?
Mr. SESSIONS. Yes.
Mr. McCONNELL. I was listening carefully to what the Senator from
Alabama had to say. So the law is, as I understand what the Senator
from Alabama had to say, that the remedy has to be narrowly tailored to
meet actual past discrimination. Is that essentially the standard here
the Senator from Alabama is talking about?
Mr. SESSIONS. That is correct. Such is the essential holding and the
basic law of this country. Where you have systematic, proven
discrimination, a court can issue a remedy that may provide advantages
to one racial group who has been discriminated against.
Mr. McCONNELL. So that group, I say to my friend from Alabama,
actually has to have suffered discrimination?
Mr. SESSIONS. Certainly.
Mr. McCONNELL. The Court was saying, you could not just carve out a
big part of a program and hand it out to people based upon what color
they are or what gender they are; is that correct?
Mr. SESSIONS. Absolutely. This is not a close question.
Mr. McCONNELL. I ask the Senator from Alabama, isn't that what we are
talking about here, what, in fact, has been done in this bill that we
are trying to remedy with this amendment?
Mr. SESSIONS. Precisely so. The Senator from Kentucky is precisely
correct. He has gone straight to the heart of this matter and I think
makes a good point.
You know, many of us go around, and we blame Federal judges for much
of the litigation and problems and some of these ideas that many people
say are liberal ideas. But in this case, I think it is the Congress
that has been passing legislation that goes beyond its bounds and is
being brought to task by the courts.
So, fundamentally, I just further state that Environment and Public
Works Committee made no findings, we made no factual analysis of the
interstate highway program in order to determine there is some sort of
systematic discrimination ongoing that ought to be corrected. In fact,
I think a good argument can be made that the objectivity and fairness
of the bid process is virtually above reproach. So there is just no
basis for this. That is why it has no chance, in my opinion, of ever
passing Supreme Court muster. And this Congress ought not be passing a
bill that is bad public policy and is unconstitutional.
Mr. President, I want to read a quote from Mrs. Valery Pech who
testified on this subject. She is the wife of Mr. Randy Pech who owns
Adarand Constructors. She is an owner herself, I believe. She said:
We started our family-owned company in 1976 specializing in
the installation of highway guardrail systems. In August of
1989, we lost yet another Federal highway contract on which
we had submitted the lowest bid. Adarand lost this job and
numerous others, past and future, not because of poor
reputation, not because our price was too high, not because
we limited our bid date, not for any other reason but one.
Randy, as owner and operator of Adarand is a white male. We
didn't like it. We fought the decision. We contracted a legal
foundation to seek help. Six years later, in 1995, the
Supreme Court ruled for us and against race-based
decisionmaking in the Adarand Constructors case.
Adarand is the only nonminority guardrail business in the
State of Colorado. All our competitors are classified as
disadvantaged business enterprises. Their status is DBE, and
contracts are awarded based solely on the owner's race or
gender regardless of whether or not they have suffered past
discrimination.
She lists those competitors that they compete against. She notes all
of these
[[Page S1401]]
contractors have been in business--her competitors are minority owned
for over 10 years and have solid reputations for getting work done.
These four competitors get 95 percent of their work by being low bidder
in other than Government contracts; yet when they bid against Adarand
for Government contracts, they get a preference and are able to get the
bid, although they bid higher.
Do you see the unfairness of it? These are strong competitive
companies. One simply happens to be headed by a Hispanic and one is
not. The one who is not gets hurt, and the other one has an advantage.
That is why the polls of all racial groups feel that these are not fair
and just preferences.
Mr. President, I will not belabor the subject. Again, I want to
congratulate the Senator from Kentucky for his leadership in coming
forward with a remarkable proposal that gives opportunity, gives it
affirmatively, reaches out to help disadvantaged, gives them a chance
to be successful in getting Government contract work, but at the same
time does not violate the Constitution.
In conclusion, I have no doubt that this section is unconstitutional.
It is neither supported by a compelling Government interest nor is it
narrowly tailored. Therefore, I urge the Senate to consider Senator
McConnell's amendment. I cannot in good conscience vote for legislation
that I consider to be unconstitutional.
Mr. WARNER. Mr. President, I say to the distinguished Senator from
Kentucky, I do not wish in any way to interfere in his presentation,
but there are some of us who have a different point of view. I am
wondering if I could just talk about 3 or 4 minutes on this amendment.
Mr. McCONNELL. I say to my friend, that is fine. I have Senator
Ashcroft here in support of the amendment, and we will go to him when
you complete.
Mr. WARNER. This will be a very thorough debate because it is a
serious issue. It seems to me there are many facets to this debate. One
is the important one raised by my colleagues who have just been
speaking as to the constitutionality. Then each Senator has to reach
his or her own opinion on the constitutionality. Then there seem to be
other factors that have to be taken into consideration.
I rise to alert Senators to take a look at the importance of this
amendment. It so happens this bill is mine. I was the author of it as
chairman of the subcommittee. We considered this issue, and I
determined we should keep this provision in, despite the Adarand case
and the development of the law in the course of the writing of the
bill.
I urge Senators to begin to study, as a part of their preparation for
floor statements and decisions, the important aspect of this amendment
on the growth of the participation by women in this country in their
ability to compete as professionals in this area of work.
There are charts available; for example, in Virginia, the percent of
growth since 1987 in firms of women, an 84 percent increase in the
number of firms that are managed, owned, and operated by women in my
State. Each State is on this chart. I urge Senators to look at that.
Then the department of Federal highways, DOT, has prepared for each
State a chart showing the percentage of these DBE highway contracts
that go to women. Particularly in my State, 44 percent of these
contracts under the DBE Program go to firms that in this instance are
nonminority women--a very significant amount of work.
Another chart that Senators should look at is a comparison of the
Federal highway programs that have been since 1983 subject to the DBE
provisions, and the participation by the minority firms in the Federal
program as compared to the participation in State programs. My State is
not on this particular chart, but, for example, I will take
Connecticut, 15.7 percent participate under the Federal program; 5.2
percent under the State program. Arkansas, 11.9 percent under the
Federal programs; 2.9 percent under the State programs. I will let the
distinguished Senator from Rhode Island address this chart; 12 percent
in Rhode Island under the Federal program; 0 percent under the State
program. Maybe there is some explanation.
I just rise to alert Senators to include this as part of their study.
Mr. President, some have made statements to the fact that the DBE
Program has not been effective. I want to address--and indeed rebut--
that point.
Let's look at the effect on women-owned highway contracting
businesses. The effect has been dramatic. Since 1987, when women were
added to the DBE, women-owned highway contracting businesses increased
in number by 157 percent.
And women-owned businesses get a significant portion of the DBE
funds. Here are some examples:
Alaska: 75 percent of DBE funds go to women ($11.8 mil. of $15.7 mil.)
Indiana: 68 percent of DBE funds go to women ($21.5 mil. of $31.5 mil.)
Mississippi: 87 percent of DBE funds go to women ($19.5 mil. of $22.4
mil.)
New Hampshire: 63 percent of DBE funds go to women ($6.0 mil. of $9.6
mil.)
and in my State of Virginia 44 percent of DBE funds went to women
($14.1 mil. of $32.6 mil.).
In sum, the DBE Program has helped promote women's participation in
the construction industry, and will continue to do so under this bill
and the new regs.
Without this program, it is questionable that women would have this
opportunity. Let's compare some State programs--without DBE--and their
Federal aid programs:
------------------------------------------------------------------------
Federal State (No
(DBE) DBE)
------------------------------------------------------------------------
Arkansas...................................... 11.9 2.9
Louisiana..................................... 12.4 0.4
Missouri...................................... 15.1 1.7
------------------------------------------------------------------------
I believe data like that shows that DBE plays a critical role in
allowing women to compete. This is not a giveaway; they must still be
the low bidder, obtain bonding, and perform the contract according to
its terms.
The case for opportunities for minorities is equally clear. Thanks to
the DBE Program, persons of all race and ethnicity have had the
opportunity to compete for federally assisted State highway contracts.
With regard to the debate about the constitutionality of this
program, I reviewed what the Supreme Court said in the Adarand case.
Justice O'Connor, for the majority, made it clear that the Federal
Government may undertake affirmative action programs as long as they
meet the ``strict scrutiny'' standard. The Court did not outlaw Federal
affirmative action.
Indeed, Justice O'Connor stated:
When race-based action is necessary to further a compelling
interest, such action is within constitutional constraints if
it satisfies the ``narrow tailoring'' test . . .
As for the district court, to which the case was remanded, Judge
Kane's decision did not ban affirmative action either.
When Judge Kane looked at the program, he said:
I conclude Congress has a strong basis in evidence for
enacting the challenged statutes, which thus serve a
``compelling governmental interest.''
In other words, the program achieves one of the two ``strict
scrutiny'' requirements.
As for the second requirement of ``narrow tailoring,'' U.S. District
Judge Kane stated the program's regulations did not meet that
requirement.
But given that the Department of Transportation is readying new
regulations that are specifically designed to meet the narrow tailoring
requirement, it seems to me that that problem is going to be taken care
of.
In sum, the DBE Program will be in full compliance with Adarand.
Indeed, as the chairman of the Subcommittee on Transportation, I intend
to make sure of that and hold the Department to that standard.
Therefore, I believe that the DBE Program in this bill is both
critical to opportunities for women and minorities in the highway
construction industry, and constitutional. It is a program important to
a wide range of socially and economically disadvantaged persons,
including many in the State of Virginia. Thus, I will be supporting the
committee bill and opposing the pending amendment.
Mr. President, I ask unanimous consent that two tables be printed in
the Record relating to this subject matter.
There being no objection, the material was ordered to be printed in
the Record, as follows:
[[Page S1402]]
HIGHWAY CONTRACTING DOLLARS IN VIRGINIA
------------------------------------------------------------------------
Federal-aid Federal-aid
dollars dollars to Annual DBE Actual DBE
Year awarded DBEs goal participation
$(1000)\1\ $(1000)\1\ percentage percentage
------------------------------------------------------------------------
1991.............. 142,821 23,036 12.0 16.1
1992.............. 131,660 20,903 12.0 15.9
1993.............. 197,956 31,915 12.0 16.1
1994.............. 322,354 48,754 12.0 15.1
1995.............. 220,010 32,688 12.0 14.9
1996.............. 246,195 32,633 10.0 13.3
------------------------------------------------------------------------
\1\ Contracting dollars awarded by the State for the Federal-aid highway
program, not the annual apportionment.
Women and Minority-Owned Businesses Share of the Federal
Highway Program: In 1996, businesses owned by non-minority
women received $14.1 million (or 5.7% of total contracting
dollars awarded) and minority-owned firms received $18.5
million (7.5%). Non-DBEs got the remaining 86.8%.
DBE Firms Ready and Able to Perform Highway Construction
Work: There are 458 DBEs qualified as prime contractors in
the highway construction industry in Virginia. The State
reports that there are more qualified DBE firms than non-DBE
firms.
Without DBE Programs Prime Contractors don't use DBE
Subcontractors on State Contracts: In 1996, DBEs were
successful as subcontractors in the federal-aid program, but
there was a 34% drop in the use of DBE subcontractors in the
state program.
Women-Business-States 1996 Statistics
A state-by-state listing of the number of all women-owned
companies in 1996 (in thousands) and the percentage change
from 1987, as compiled by the National Foundation for Women
Business Owners:
------------------------------------------------------------------------
Percent of
State Firms in growth
1996 since 1987
------------------------------------------------------------------------
Alabama....................................... 98,000 87.9
Alaska........................................ 26,000 69.6
Arizona....................................... 130,000 97.3
Arkansas...................................... 68,000 76.0
California.................................... 1,082,000 77.7
Colorado...................................... 160,000 64.9
Connecticut................................... 103,000 56.2
Delaware...................................... 21,000 95.8
District of Columbia.......................... 19,000 59.2
Florida....................................... 497,000 106.3
Georgia....................................... 203,000 112.4
Hawaii........................................ 39,000 66.8
Idaho......................................... 42,000 104.1
Illinois...................................... 37,000 74.8
Indiana....................................... 167,000 71.0
Iowa.......................................... 92,000 58.6
Kansas........................................ 84,000 43.5
Kentucky...................................... 99,000 70.1
Louisiana..................................... 102,000 67.7
Maine......................................... 48,000 85.3
Maryland...................................... 167,000 87.7
Massachusetts................................. 192,000 58.5
Michigan...................................... 263,000 80.4
Minnesota..................................... 166,000 73.5
Mississippi................................... 55,000 73.9
Missouri...................................... 155,000 62.1
Montana....................................... 34,000 76.7
Nebraska...................................... 57,000 63.3
Nevada........................................ 47,000 130.0
New Hampshire................................. 42,000 69.6
New Jersey.................................... 221,000 72.7
New Mexico.................................... 57,000 108.0
New York...................................... 527,000 70.2
No. Carolina.................................. 198,000 94.3
No. Dakota.................................... 19,000 37.8
Ohio.......................................... 306,000 82.5
Oklahoma...................................... 107,000 54.3
Pennsylvania.................................. 300,000 74.7
Rhode Island.................................. 29,000 84.8
So. Carolina.................................. 90,000 93.8
So. Dakota.................................... 24,000 65.2
Tennessee..................................... 139,000 89.9
Texas......................................... 552,000 70.1
Utah.......................................... 63,000 95.5
Vermont....................................... 29,000 94.3
Virginia...................................... 189,000 84.0
Washington.................................... 188,000 91.8
West Virginia................................. 40,000 64.6
Wisconsin..................................... 134,000 78.5
Wyoming....................................... 19,000 63.7
United States................................. 7,951,000 77.6
------------------------------------------------------------------------
Note.--The growth rate in women-owned construction contractors since
1987 was 157% (2.6%-6.7%).
Copyright (C) 1996 The Associated Press 3/26/96.
I yield the floor.
Mr. McCONNELL. Mr. President, if the Senator from Montana would like
to rotate back and forth, that is certainly fine with me. Senator
Ashcroft has been here and is anxious to speak. I don't particularly
want to get into a dispute over the speaking order. Is the Senator from
Montana desiring to speak?
Mr. BAUCUS. I have another commitment that starts in about 5 minutes,
so if I could speak now that would help this Senator.
Mr. McCONNELL. I yield the floor.
Mr. BAUCUS. I yield myself such time as I may consume.
Mr. President, this obviously is a very important debate. It is the
first civil rights debate we have had in a long time. It is very
important that the Senate take this extremely seriously because it is
such an important matter. It goes to the heart of what it is to be an
American.
I begin by emphasizing a fact which puts us into a bigger context,
and that is all of us as Americans want to expand the economic pie. We
all want to encourage more American entrepreneurs to start new
companies, start more companies, create new jobs. That is especially
true for women and for minorities.
We, as Americans, will all be a lot better off and the country will
be better off if there are more successful businesses owned by women,
more owned by African Americans, more owned by Native Americans. All
Americans, as a consequence, will have more jobs, will have more
community leaders and will have more positive role models for our
daughters and our sons. We will be a more cohesive country, a better
country. I don't think there is any doubt about that. I think there is
a consensus about that.
The question, of course, is how we can best accomplish that goal. The
so-called DBE Program, the Disadvantaged Business Enterprise Program,
takes an important step to accomplish that objective by giving women
and by giving minority groups a fair shot at that economic opportunity.
It gives them a seat at the table.
I will take a few moments to explain the program. First, it was
created in 1982 as part of the highway bill signed by President Reagan.
It began in 1982. It was then expanded in 1987 when the Senate added
women-owned construction businesses to the category of businesses that
are presumed to be disadvantaged.
Let me emphasize this point: The program we are talking about is
based on the small business program usually referred to as the section
8 program. But it is broader than section 8. In 1987, we expanded the
highway Disadvantaged Business Enterprise Program to include not only
construction companies owned by members of minority groups but also
construction companies owned by women. The expanded program was
continued without change in ISTEA. That is, in the highway bill passed
in 1991, and the committee has here proposed to continue it again in
ISTEA II, the highway bill before the Senate.
How does the program work? The law says unless the Secretary provides
otherwise, at least 10 percent of the money expended on highway
contracts under the official highway program should go to small
businesses owned by socially and economically disadvantaged
individuals. So who qualifies? First, you have to be a small business
within the meaning of the Small Business Act. Beyond that, you have to
be socially and economically disadvantaged. There is the presumption
that women and members of certain minority groups are in fact
disadvantaged. It is only a presumption, a presumption that can be
overcome primarily in two ways. One is that a person who is not a
member of one of the presumptive groups can show he or she is socially
or economically disadvantaged. That can be shown. The other way is for
a third party to challenge the eligibility of a particular contractor,
such as a competitor, by showing that the person is not, in fact,
disadvantaged.
Under our Department of Transportation regulations, each State--let
me underline the word ``State''--each State highway program must take
various steps to reach out to disadvantaged businesses. In addition,
each State--underline again ``State''--must establish an overall goal
for the percentage of federally funded highway construction dollars
going to women and minority-owned businesses. Once that goal is
established--again, it is a goal; some States have more than 10
percent; some States goals are lower than 10 percent. It is a goal
depending on the State. Once the goal is established, the State highway
department establishes another goal for each particular contract. The
goal doesn't have to be 10 percent; instead the State can look at the
type of work, and the pool of available subcontractors and decide to
set a higher goal for certain contracts and a lower goal for others.
Once the goal is established for a contract, each contractor must
make a good-faith effort to meet the goal--not mathematically required,
not quota required, but a good-faith effort to meet it. That is all
that the program is. If the contractor does make a good-faith effort
but finds the qualified subcontracts are not available or that their
bids are too high, the contractor has satisfied his obligation. In a
nutshell, that describes the program.
So how has it worked? What are the results? The program has been in
place now for about 15 years. During that time, the percentage of
Federal highway expenditures going to disadvantaged businesses has
risen from barely 8 percent in 1992 to almost 15 percent today. In my
State of Montana, 1996, the State expended $133 million on ISTEA or
highway projects. Of that, $27 million--slightly more than 20 percent--
went to DBE's.
To companies like Omo Construction in Billings, MT--Ron Omo started
out
[[Page S1403]]
with a pick up, that is all he had, and the will to be his own staff.
He was certified as a DBE in 1986. In 1997 his company received $4
million in prime contracts and subcontractors.
Or Greenway Enterprises, in Helena, which is run by Dee Hoovestall,
who started out with a backyard seeding company and now runs a large
construction company in my State.
There are others, people who have created jobs and improved our
communities. With that as background, I would like to respond to the
principal criticisms that have been made of the Disadvantaged Business
Enterprise Program.
Three points: First, the program is constitutional; second, the
program is fair; and third, it works.
It has been argued that the Disadvantaged Business Enterprise Program
is unconstitutional. I disagree. There are important constitutional
questions, and they deserve careful attention, but when you look at the
decision of the Supreme Court, the decisions of the district court, and
the new proposed regulations, the program passes constitutional muster.
Let's start with the decision of the Supreme Court. In the Adarand
decision, the Supreme Court held that a Federal affirmative action
program is subject to what the lawyers call ``strict scrutiny.'' In
other words, to pass constitutional muster, the Government must show
that the program furthers a compelling interest--and that is a given in
this case; the lower court even found that--and also uses a narrowly
tailored means to do so. Strict scrutiny means compelling Government
interest and, second, that the program is narrowly tailored.
The Supreme Court did not hold that the program was unconstitutional.
Again, the Supreme Court did not hold that the program was
unconstitutional. Nobody can refute that statement.
In fact, the Court went out of its way to say that subjecting the
Federal affirmative action program to strict scrutiny was not
equivalent to finding that the program is unconstitutional.
In a majority opinion, Justice O'Connor said:
We wish to dispel the notion that strict scrutiny is
``strict in theory, but fatal in fact.'' . . . the unhappy
persistence of both the practice and the lingering effects of
racial discrimination against minority groups in this country
is an unfortunate reality, and government is not disqualified
from acting in response to it. . . .
The Court gives some examples and then it says:
When race-based action is necessary to further a compelling
interest, such action is within the constitutional
constraints if it satisfies the ``narrow tailoring'' test
this Court has set out in previous cases.
Having established that strict scrutiny applies, the Supreme Court
remanded the case so that the lower court could consider whether the
program furthers a compelling interest and is narrowly tailored.
The district court judge issued its opinion in June of last year. It
is a mixed bag.
After reviewing the legislative history, the judge found that
``Congress had sufficient evidence, at the time these measures were
enacted, to determine reasonably and intelligently that discriminatory
barriers existed in Federal contracting.''
Therefore, he concluded that ``Congress has a strong basis in
evidence for enacting the challenged statutes'' and that the program
was justified by a compelling Government interest. That was the
district court speaking.
Then the judge turned to the second part of the test, narrow
tailoring.
Looking at the details of the Federal lands highway program, he
concluded that it was not flexible enough or sufficiently related to
past discrimination to meet the narrow tailoring test. Therefore,
because the program did not pass both parts of the strict scrutiny
test, he held as a district court judge that it was unconstitutional.
Let me make three points about this decision.
First, the decision itself applies only to the Federal lands highway
program in Colorado.
Second, a single district court's decision that a Federal statute is
unconstitutional is, obviously, not the last word. Such decisions
frequently are reversed on appeal, and this decision has been appealed.
In fact, there are many law professors who have written that, in
their view, the district court decision that the statute is
unconstitutional is in error.
Third, the court was looking at the current program. But that program
is changing.
A few years ago, President Clinton ordered a review of all Federal
affirmative action programs. In response, Secretary Slater has proposed
significant changes to the DBE Program, designed to make the program
more flexible, more targeted, and, in a nutshell, more narrowly
tailored. The proposed new rules would make several important changes.
First, they replace the 10 percent goal with a new goal that's based
on an estimate of the extent to which discrimination has affected
construction contracting in each State. Again, no numerical goal.
Second, they give more emphasis to incentives like outreach and
technical assistance.
Third, they confirm that contract goals are not binding. If a
contractor makes a good-faith effort to find qualified women or
minority-owned subcontractors, but fails to meet the goal, there is no
penalty. If you do your best, that is good enough.
Moreover, the regulations allow the Secretary to waive the
requirements if a contractor comes up with an alternative approach that
is as good or better then the approach in the rules.
Putting all this together, the Supreme Court held that the program is
subject to strict scrutiny, but emphasized that it does not mean that
the program is unconstitutional.
The only district court to consider the question held that there is a
compelling interest, but not narrow tailoring. The proposed new rules
directly address narrow tailoring by making the program even more
flexible and targeted. In light of this, I believe that the DBE Program
is constitutional.
My second point is that the program is fair. It's fair because it
helps women and minorities get a seat at the bidding table--not the
only seat, not the best seat, but simply a seat at the table, an
opportunity to compete against equally qualified contractors.
Let's face the facts. We all wish we lived in a society that does not
discriminate based on gender or race. Well, we don't. Women and members
of minority groups do face barriers that the rest of us do not. That is
why the DBE Program was created. That is why it was expanded in 1987 to
include women.
Let me give you an example. In 1984 the Transportation Subcommittee
held an oversight hearing to review the implementation of the 1982
highway bill. A woman named Wendy Johnson testified about the
discrimination in the construction industry. She said:
Few, if any, of the major contractors of State departments
of transportation are making aggressive, affirmative efforts
to recruit women . . . Yet, we have documented that many
women want and need these jobs.
Let me make a point about discrimination another way. Look at the
statistics. Women still earn only 72 percent of what men earn for
comparable work. Women own about one-third of all small businesses. But
women-owned businesses only receive 3 percent of Federal procurement
dollars. Minorities make up 20 percent of the U.S. population but own
only 9 percent of the construction businesses, and those businesses
receive only 4 percent of construction receipts.
According to the General Counsel of the Transportation Department,
``Minority and women-owned firms report that they are routinely unable
to secure subcontracts on private work where there are no affirmative
action requirements and that white-owned prime contractors reject
minority or women-owned firms even when they offer the lowest bid.''
The DBE Program helps women and members of minority groups overcome
these barriers. That is why, to my mind, the program is fair.
My third point is that the disadvantaged business----
Mr. WARNER. If the Senator will yield, I think that is a very
important point, and it supplements what I brought to the attention of
the Senators earlier. They better do a little homework on this issue as
they approach this particular amendment.
Mr. BAUCUS. That is a very good point, particularly as to how much
this has helped women become an equal force in this society--or getting
there.
[[Page S1404]]
Third, the Disadvantaged Business Enterprise Program works. After the
program went into effect, the percentage of highway expenditures going
to disadvantaged businesses rose significantly, from 8 percent in 1982
to 12.9 percent in 1983. It has remained pretty stable ever since.
The percentage of expenditures going to women-owned businesses has
risen steadily, from 3.1 percent in 1983 to 6.7 percent in 1996. That
is still pretty low. After all, women make up more than half of the
population and own one-third of all small businesses. Maybe 6.7 percent
is nothing to crow about, but it's more than double the percentage of
expenditures that went to women-owned businesses in 1983, before women
were added to the DBE Program.
We can look at it another way. What would happen if this program were
repealed? In recent years, several States have eliminated their own
disadvantaged business enterprise programs, and the results have been
dramatic.
In 1989, Michigan repealed its disadvantaged business enterprise
program for State highway contracts. Within 9 months, the percentage of
highway dollars going to minority-owned businesses fell to zero. The
percentage of highway dollars going to women-owned businesses receiving
highway contracts fell to 1 percent.
By 1996, the total percentage of women and minority-owned businesses
receiving State highway contracts was still about 1 percent. At the
same time, for Federal highway contracts in Michigan, operating under
the Federal program, women and minority-owned businesses received 12.7
percent of the contract dollars.
In other words, on Federal highway construction projects, operating
with a DBE program, women and minority-owned businesses received a 12
times greater share of contracting dollars than they did on State
projects operating without such a program. Mr. President, that is
because the program was repealed in Michigan.
There have been similar results in other States and cities, and this
obviously tells us something. It is obviously a warning. That is, if we
repeal the Federal program or cut the Federal program way back--which,
in effect, the McConnell amendment does--opportunities for women and
minority-owned businesses are likely to suffer a sharp decline.
Think about what that will mean for hundreds of new, startup
companies all across our country.
In many cases, women and minority group members have worked for years
to build up their companies. They have borrowed thousands of dollars
for expensive construction equipment, all based on the expectation that
in America they will have a fair shot, a fair shot at highway
construction contracts.
If now, in this bill, we eliminate the DBE Program, a lot of small
businesses will be left high and dry.
Pulling all this together, the Disadvantaged Business Enterprise
Program is constitutional, it's fair, it works, and it is good for
America. We should maintain the program, not weaken or repeal it.
That brings me to the McConnell amendment. The amendment repeals the
Disadvantaged Business Enterprise Program and replaces it with
something called the ``Emerging Business Enterprise Program.'' This
program requires each State to establish a program for outreach,
education, and technical assistance for small businesses. But that is
about it.
I am all for outreach and I am all for education and technical
assistance. Who isn't? But by eliminating contract goals--not quotas,
but goals--the McConnell amendment dilutes the program down to almost
nothing. And by doing so, it really misses the point.
Women and minority group members who own small construction companies
often do need outreach, they often do need education and technical
assistance, but in many cases that is not enough. Even when they have
the information and the technical skills, they often find that they
just can't crack into the market. That is why we need to do more, why
we need to establish goals, goals that should be flexible and should be
based on the specific circumstances of each State--and they are. But
without goals against which we can measure progress, our commitment to
expanded opportunity is nothing more than an empty promise.
Fifteen years ago, we made a commitment. We told women and minority-
owned businesses in this country that we would give them an opportunity
to compete, we would give them a seat at the table.
The program has worked. It has created more opportunity, not less,
and it's still necessary.
As President Clinton has said, ``In the fight for the future, we need
all hands on deck, and some of those hands still need a helping hand.''
Mr. President, I urge that we maintain our commitment to opportunity,
to inclusiveness, and to lending a helping hand. I urge that the
McConnell amendment be defeated.
Mr. ASHCROFT addressed the Chair.
The PRESIDING OFFICER (Mr. Sessions). Who yields time?
Mr. WARNER. On behalf of the Senator from Kentucky, I yield such time
as the Senator from Missouri wishes.
Mr. ASHCROFT. Mr. President, I ask unanimous consent that, in
accordance with an agreement reached between the Members on the floor,
that Senator Kerry of Massachusetts be allowed to speak following my
remarks.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. ASHCROFT. Mr. President, I am pleased to take part in the debate
to reauthorize the Intermodal Surface Transportation Efficiency Act of
1997, commonly known as ISTEA. This debate was originally scheduled to
take place the first week in May. As we all know, the current measure
is designed to end in the last week in April and, had we not debated
this until the first week of May, there would have been an interruption
in the funding and the opportunity to build highways in this country.
So I express my appreciation to the majority leader for moving this
debate up and making it possible for us to address this issue in a
timely manner. When we are talking about the construction of
infrastructure, which allows the body politic to be nourished by the
stream of commerce, I think it is important that we don't interrupt
that stream. I thank the majority leader.
Although I rise to speak specifically on the amendment of the Senator
from Kentucky, I briefly would like to talk about the underlying bill.
I must say, I am grateful, on behalf of the citizens of Missouri, for
the work that has been done on this bill to ensure a fair return to
Missourians for the kind of contribution that they make to the highway
trust fund. I especially thank the senior Senator from the State of
Missouri, Kit Bond, for his tireless effort in this battle. No Senator
in this Chamber, in my judgment, has made a more conscientious and
consistent effort to make sure that there was fairness in the
allocation of these highway resources than Senator Kit Bond.
To me, the issue is clear, and it has been clear throughout the
entire debate. When a Missourian fills the gas tank and pays 4.3 cents
in Federal fuel taxes, that money should go to improving the roads of
the State rather than paying for additional Federal spending on some
social program in a distant State, and that is another improvement that
this bill reflects, putting highway taxes back into the highway trust
fund.
Mr. WARNER. Mr. President, will the Senator yield? I compliment the
Senator for recognizing the contributions of Senator Bond. As my
colleague knows, a good deal of money has been added to this bill.
Senator Bond laid the foundation, together with the Senator's support,
whereby this became a reality in the sequencing in the Byrd-Gramm-
Baucus-Warner amendment. But that foundation was laid by the
distinguished senior Senator. He serves on the committee and helped
develop the underlying bill and the amendment.
I thank the Senator for his participation. Missouri sent two strong
proponents for this highway bill, and I compliment the Senator.
Mr. ASHCROFT. I thank the Senator from Virginia. His recognition of
the contribution of Senator Bond of Missouri is appreciated and
appropriate. I think the decision, which involved both the authorizing
committee and the Budget Committee, to dedicate the 4.3-cent fuel tax
to highways is a good one, and I am pleased to support that aspect of
this bill. I believe that when this is all over, Missourians will now
see a 91
[[Page S1405]]
cent return on each dollar as opposed to a dismal 80 cents that it
received under the former funding scheme. Under the formula that was
passed out of the Environment and Public Works Committee, Missouri will
receive $3.6 billion compared to $2.4 billion that Missouri received
over the last 6 years of the 1991 highway bill. Missouri's average
allocation per year would be around $600 million as opposed to around
$400 million that the State received under the old bill. I believe this
allocation of highway trust money to the development and construction
of highways is appropriate.
I would add that this is not taking from other Government programs.
This is the allocation of highway trust money for highways. Uniquely,
we are beginning to get to the place where we focus resources that we
take from people who use the highways on the highways. That is a major
benefit. I would like to see a 100 percent return on Missouri's
investments. I appreciate the advancements made over the last few days,
and I am committed to working with the Budget Committee to see that
these additional funds are offset so that we can stay within the budget
caps that were approved by this Congress last session.
I quickly would like to address one more issue. This is the amendment
that was voted on yesterday to take away State highway funds if they do
not establish a blood alcohol content of .08 for drunk-driving
violations. I opposed this amendment, not because I do not abhor drunk
driving. Far too many of us have lost loved ones as a result of this
tragedy. However, I believe States are in the best position to make the
decision on the best way to eliminate drunk driving. The ``stick''
approach offered in the amendment was rejected by the 104th Congress,
when we repealed the Federal speed limit. I believe the ``carrot''
approach, contained in the safety provisions of this bill, which
contain a .08 option, is the appropriate method to allow States the
freedom to establish comprehensive programs to discourage drunk
driving. That is why the National Governors Association, the National
Association of Governors' Highway Safety Representatives, the National
Conference of State Legislatures, the National Association of Counties,
and the American Association of State Highway and Transportation
Officials support the safety provisions contained in the bill. I look
forward to the continued debate on the underlying policies in this
bill.
Now I would like to address the policy and constitutional principles
raised by Senator McConnell's amendment, which I have cosponsored. The
specific issue raised by Senator McConnell's amendment is whether we
should reauthorize provisions in the ISTEA bill which treat two
identically situated individuals differently, based solely on their
race. Let me just say, again, the question or issue raised by Senator
McConnell's amendment is whether we should reauthorize provisions of
the bill which require that we treat two identically situated
individuals differently only because of their race.
Specifically, a provision in the ISTEA measure requires that 10
percent of the amounts made available under certain titles of the act
shall be set aside for small business concerns owned and controlled by
socially and economically disadvantaged individuals. The provision goes
on to define ``socially and economically disadvantaged individuals'' by
cross-reference to section 8(d) of the Small Business Act.
If you go to that section, you will find that a Government contractor
shall presume that ``socially and economically disadvantaged
individuals'' include black Americans, Hispanic Americans, Native
Americans, Asian Pacific Americans, and other minorities. The net
effect of these provisions is that if two bids come in from two
subcontractors, one owned by a white male and the other by a racial
minority, and the bids are the same, or even close, the job will go to
the minority-owned company, not the low bidder.
I find this objectionable as a matter of public policy. But the
question facing the Senate is more than a debate over policy. The U.S.
Supreme Court has made it clear that a constitutional principle is at
stake. Members of this body have differed on the question of whether
the Government should treat people differently solely because of their
race. Personally, I believe that we all desperately want a future of
racial reconciliation in which race is simply no longer relevant.
People of good faith can differ on how best to achieve racial harmony.
My own view is that the best way is to usher in a future of racial
reconciliation by ending race-conscious Government programs, starting
today. You don't end racial discrimination by promoting racial
discrimination.
But, while the race-based set-asides in ISTEA are part of this
broader debate about whether the Government should let racial factors
cloud its decisions--a debate that raises difficult questions--the
ISTEA race-based set-asides are an easy case. In the first place, the
particular race-based set-asides in the transportation bill represent
an issue of constitutional principle.
We cannot evaluate these set-asides as if we were legislating on a
blank slate. The Supreme Court, and now a Federal district court on
remand, have considered these set-asides and declared them
constitutionally suspect. These courts did not consider a similar
program, or a related program, but the exact program that is at issue
today.
In the 1995 Adarand decision, the Supreme Court held that race-based
Government programs are subject to the most exacting level of scrutiny.
The Court rejected the notion that the Government's use of race should
be subject to a more relaxed standard because the Government's stated
purpose was assisting rather than disadvantaging racial minorities.
Instead, the Court made clear that when the Government makes
distinctions on the basis of race, it is engaging in a dangerous
business, and such laws will survive only if they are narrowly tailored
to serve a compelling Government interest.
The Supreme Court stopped just short of declaring the program
unconstitutional, leaving that task for the district court after any
additional development of the record that was necessary. In June of
last year, the district court to which the Supreme Court referred the
measure confirmed what seemed obvious; namely, that the Federal
Government's race-based set-asides were unconstitutional under the
Supreme Court's demanding test of strict scrutiny. As Judge Kane
emphasized, the race-based presumption of economic disadvantage is both
over- and underinclusive. Indeed, the district court said it is not
narrow at all; it is both too broad on the one side and too narrow on
the other side. It falls because it is not narrowly tailored. Judge
Kane observed that the Sultan of Brunei--I assume because this is an
Asian Pacific person, a minority--in spite of being one of the
wealthiest persons in the world, would qualify because of race-based
consciousness that is specified in the act and would presumptively
qualify as a disadvantaged business entity. The district court
understands that if you are trying to correct social and business
disadvantage, economic disadvantage, and instead of using something
that is narrowly tailored to address social and economic disadvantage
you use something as broad as race, you are using a category which is
overly broad and can't be considered to be strictly tailored--can't be
said to be narrowly tailored.
We know there are individuals in the Asian Pacific ethnic group or
minority who are as wealthy as any individuals in our entire culture
and some as poor as any individuals in our entire culture. The fact is
that the racial identity of an individual does not carry an individual
into the specific narrow category of being socially or economically
disadvantaged.
My concerns with the effect of the court decisions on Congress'
ability to reauthorize these provisions, led me to convene a hearing in
the Constitution Subcommittee of the Judiciary Committee of the Senate,
which I have the privilege of chairing, to examine the
constitutionality of the provision. At that hearing we were privileged
to receive testimony from Valery Pech, who, along with her husband,
Randy, runs Adarand Constructors, the plaintiff in the Adarand cases.
She provided the subcommittee with a firsthand look at how this program
has operated in practice and the impact it has had on their business.
She testified how this program has caused their firm to lose several
contracts, despite being the low bidder on
[[Page S1406]]
the job. She has also testified that the beneficiaries of this program,
which is purportedly targeted at disadvantaged business entities, are,
in fact, well-established firms. It has already been noted on the floor
of this Senate that most of the time those firms, when they win a
contract, win it based on the fact that they are the low bidders, but
when they are involved in this kind of contract for federally related
tasks, they do not even have to be the low bidder.
I think it should be said that the general public of the country does
not want to spend its money if it is not really helping someone who is
needy, but just helping someone who is a part of a broad category to
get a job which they don't earn by being the best in the competition.
The American way is not to award the prize to the one who has this race
or that race, or has this disadvantage or that disadvantage by the law.
The American system has been to reward achievement and merit. This is a
fundamental value of our culture. It is also reflected in our
Constitution, and it was reinforced in the Adarand case, both at the
Supreme Court level and on the remand. This is not the only set of
cases that has decided this.
As a matter of fact, it has been represented on the floor that there
has been no other case in which this has been decided. But I think, if
not directly on point at least so similar that one could not ignore it,
is the case of Houston Contractors Association v. The Metropolitan
Transit Authority of Harris County. In that instance, it was another
U.S. Federal district court which ruled, consistent with the U.S.
Supreme Court, that such set-asides and quotas and preferences as are
contained in the ISTEA bill are simply wrong. Those courts, I believe,
would provide more than an adequate basis; they would provide a
compelling argument that we adopt the amendment as propounded and
proposed by the Senator from Kentucky.
The two Adarand decisions make plain the unconstitutionality of the
ISTEA set-asides. But removing this provision from the bill as
unconstitutional should be an easy decision for Congress for a second
reason--the program uses race for a plainly impermissible end. The
Constitution obligates the Congress to reject unconstitutional
legislation whether or not the courts have, as here, already held the
legislation unconstitutional. Wholly apart from the conclusions of the
two Adarand courts, it is obvious that the ISTEA set-asides use racial
classifications in an impermissible way.
Reasonable persons can differ as to whether the Constitution forbids
the Government from using race as a factor in rectifying past racial
discrimination. You might have a different situation if you were saying
the statute set up a presumption that there had been racial
discrimination and then used race as the basis for rectifying that
racial discrimination. That is not what the Disadvantaged Business
Enterprise Program does.
As its name suggests, the Disadvantaged Business Enterprise Program
seeks to assure that a certain percentage of Government contracting
dollars flow to--and here are the words--``socially and economically
disadvantaged individuals.''
The statute then defines a disadvantaged business enterprise as any
business owned by members of certain ethnic groups and, since 1987,
businesses owned by women of any race.
In the statute, you say that you are trying to correct the problem,
which is social and economic, and then you get to the remedy, and the
remedy that is proposed is not based on social concerns, it is not
based on economics; it is based on race.
The truth of the matter is that the Supreme Court says you have to
narrowly tailor the remedy and focus the remedy on the problem, but
here the statute says that there is a problem that is social and
economic but then has a solution which is racial. Obviously, the
district court even saw the humor of the lack of fit between problem
and remedy. So far does the racial remedy miss the social and economic
problem that it would allow the Sultan of Brunei, one of the richest
people in the world, to be presumed socially and economically
disadvantaged.
It is clear, you do not have to have a Supreme Court ruling, you do
not have to have the district court rulings, you do not have to have a
second district court ruling in the State of Texas to tell you this. I
don't think you have to be a rocket scientist or law school professor.
If the problem is social and economic and your solutions should be
narrowly tailored, the solution should be social and economic. It
should be focused on the problem. But instead of this statute focusing
the solution on the problem of social and economic disadvantage, it
focuses the solution on race, which wasn't something that was mentioned
as the problem to begin with.
The notion that every small business owned by racial minorities is
somehow economically disadvantaged is nonsense. It flies in the face of
reality. As a matter of fact, it is an affront to many of the
businesses owned by racial minorities or women in this country. Many
are very successful. For us to presume that because a black person or a
Hispanic person or an Asian person owns a business it is disadvantaged
or it is economically failing is for us to engage in rank prejudice, in
my mind.
I cannot imagine going up to someone and saying, ``I see that your
computer business is disadvantaged, it's economically failing, it needs
Government assistance, you are a charity case.''
``Why?''
``Because your race is a minority race.''
That is un-American to me. It would be an affront to me if I were
told that in spite of my balance sheet, in spite of my portfolio, in
spite of the fact that we had orders backlogged, we couldn't supply the
demand, in spite of the fact our profits were up, we were still
economically and socially disadvantaged just because of the way we were
born, the color of our skin. That is an affront to the dignity of the
individuals that this law apparently hopes to protect.
I simply could not in good conscience go to my fellow Americans and
say, ``Well, your bottom line may show that you are successful and your
stock may be worth millions and you may be getting lots of contracts
and you may be beating everybody else in your business, but you're a
failure because of your race,'' or ``you are disadvantaged because of
your race.'' That is something that we should not do as a country.
Government should not go to people and say, ``We're going to presume
you're a failure, we are going to presume you economically can't make
it, that you are socially disadvantaged because you are of a certain
race or a certain ethnic minority.''
I can't believe that. Why should we suggest that? We have seen time
and time again, and we see it more and more frequently, people without
regard to race, because of this economy. The economy of America doesn't
make decisions based on race--look how many of the role models that are
used in selling products all across this country are people of a wide
variety of racial and ethnic backgrounds. Some of the most valuable
endorsements in America are endorsements from people who, according to
this law, would be socially and economically disadvantaged because of
race. I would hate to tell some of those people they were
disadvantaged. They might take out their wallet and buy me on the spot.
They might buy everything that I own, and they could probably do it out
of petty cash.
I think the day has passed when we as a nation should try to tell
people because they are of a particular race that they have an economic
or social disadvantage, when it is pretty clear, when the facts of the
matter just might be incontrovertible that they are not disadvantaged.
At the hearing we held in the Constitution Subcommittee, a number of
witnesses testified concerning the unconstitutionality of these set-
asides and the futility of the Clinton administration's efforts to
implement this flawed program and to continue to tell people that based
on race alone they are somehow economically disadvantaged or
unsuccessful. For example, Professor George LaNoue, of the University
of Maryland, provided a detailed account of how the administration has
failed to conduct the kind of detailed statistical analysis necessary
to justify a race-based program. There is no evidence of how specific
groups have been the subject of particular acts of discrimination and
how the program is tailored to address these instances of
discrimination. Thus, according to Professor LaNoue, there is no
compelling
[[Page S1407]]
interest to justify the use of race as a proxy or as a way of defining
remedy in this context.
Other constitutional scholars focused on the critical lack of narrow
tailoring in this statute. As Professor Eugene Volokh of the UCLA law
school stated:
The statute as now written . . . is not something that can
be saved through any regulations. It seems to be fatally
overinclusive, and that strikes me as an easy case that it is
not narrowly tailored.
Easy case.
Professor Volokh's testimony reflects the fact that the Constitution
allows the Federal Government to use race as a factor only in the
rarest of circumstances and only with surgical precision. Well,
surgical precision would probably have lopped off the Sultan of Brunei,
I might say.
As the constitutional scholars on our panel concluded, the race-based
set-asides in this bill are not drafted with sufficient precision or
supported with enough statistical evidence to survive constitutional
scrutiny.
I ask unanimous consent to have printed in the Record an excerpt of
the written testimony of Professor LaNoue and the full written
testimony of Professor Volokh.
There being no objection, the material was ordered to be printed in
the Record, as follows:
The Compelling Interest Basis for the Use of Race and Ethnic Conscious
Means in the U.S. DOT Proposed Regulations for Modifying its DBE
Program: An Analysis
(Excerpts of testimony before the Subcommittee on the Constitution,
Federalism and Property Rights of the Committee on the Judiciary U.S.
Senate by George R. La Noue, Professor of Political Science, Policy
Sciences Graduate Program, University of Maryland Baltimore County, and
University of Maryland Graduate School Baltimore; Director, Project on
Civil Rights and Public Contracts (Phone 410-455-2180); (Currently
Visiting Scholar, Institute for Governmental Studies, University of
California Berkeley) (Phone-510-527-6088), September 30, 1997)
Criticisms of the Administration's failure to produce
information necessary to support a compelling interest or
narrow tailoring with regard to the use of racial and ethnic
preferences in federal procurement programs.
Despite the fact that more than two years have passed since
the Supreme's Court's decision in Adarand v. Pena, and
despite the fact that the Justice Department and other
federal agencies have devoted a considerable amount of their
formidable resources to responding to Adarand, the federal
government still have not produced:
1. Any findings about whether there has been any
discrimination by any federal agency in the contemporary
procurement process.
2. Any findings about whether any state DOT agency or any
other state agency has discriminated in the award of federal
contract dollars.
3. Any findings about whether there has been any
underutilization of qualified, willing and able MBE
contractors in federal procurement or federally assisted
procurement as prime contractors or subcontractors. The
federal government has completed no disparity study that
could create the ``proper findings'' the judiciary requires
of governments before they employ race conscious measures.
4. Any findings about whether, when MBEs bid on contracts,
they are proportionately successful. No study or who bids on
federal contracts has been released.
5. Any statistical analysis of whether the particular
racial and ethnic groups granted presumptive eligibility are
in fact disadvantaged because of patterns of deliberate
exclusion or discrimination in recent years.
6. Any evaluation of the effectiveness of existing federal
race neutral programs or the possibility of creating new
ones.
7. On May 23, 1996, the Justice Department proposed
``benchmark limits'' for each industry which were intended to
represent the ``level of minority contracting that one would
reasonably expect to find in a market absent discrimination
or its effects.'' and to control the decision of whether race
conscious means were necessary in federal procurement related
to that industry. (61 Fed. Reg. 26042, 26045, 1996). These
benchmark limits still have not been produced. (``Response to
Comments to Justice Departments Proposed Reforms to
Affirmative action in Federal Procurement,'' 62 Fed. Reg.
25650. 1997) The Department apparently thought such benchmark
limits were essential to narrow tailoring and stated:
``Application of the benchmark limits ensures that any
reliance on race is closely tied to the best available
analysis of the relative capacity of minority firms to
perform the work in question--or what their capacity would be
in the absence of discrimination.'' (61 Fed. Reg. 26042,
26049, 1996).
Given this premise, the failure to develop the benchmark
limits suggests federal goals are not narrowly tailored.
____
Testimony Before the Subcommittee on the Constitution, Federalism and
Property Rights of the U.S. Senate Committee on the judiciary
(By Eugene Volokh, Acting Professor of Law, UCLA Law School)
1. The ISTEA is Unconstitutional
There are hard cases and easy cases under the Supreme
Court's race discrimination jurisprudence. This is a pretty
easy case.
To be constitutional, a racially discriminatory program
must be narrowly tailored to a compelling state interest. The
ISTEA is not narrowly tailored in at least four ways:
A. Overinclusiveness. I know of no evidence that, say,
South Asians or Cuban-Americans, or Spanish-Americans, or
East Asians are currently suffering from massive race
discrimination or the legacy of past discrimination.
Doubtless there's some discrimination against these groups,
just as there's some against Jews (my own ethnic group),
Italians, Irish, and others. But there's no evidence that
there's anywhere near enough discrimination to justify
preferences for these favored groups, or to explain why
Afghans, who are not seen as South Asians, should be treated
differently from Pakistanis, who are.\1\
---------------------------------------------------------------------------
\1\ Footnotes at end of article.
---------------------------------------------------------------------------
This alone makes the ISTEA unconstitutional under the
Court's decision in City of Richmond v. J.A. Croson Co.,\2\
and unconstitutional in a way that no regulations can fix,
because the statute itself contains the impermissible
classifications and the regulations must remain consistent
with the statute.
B. Mismatch between the alleged discrimination and the
remedy. ``Narrow tailoring'' means that the racial
classification must closely fit the government's interest in
remedying discrimination; but the remedy here simply doesn't
correspond to the alleged discriminatory conduct.
Consider, for instance, the supposed lending discrimination
against minority-owned businesses. If indeed lenders are
refusing to lend to qualified minority businesses, the
narrowly tailored remedy is to prevent or compensate for this
refusal: For instance, to set up a corporation that will lend
to all qualified businesses that have been passed over by
other lenders. In fact, if these businesses are really
qualified, then there's money to be made doing this; the
remedy can thus even be self-funding.
But the statute doesn't contain any narrowly-tailored
remedy like this. Instead, it provides a set-aside to all
minority-owned businesses, whether or not they have suffered
from discrimination in lending, with absolutely no program
that specifically addresses the supposedly grave problem of
lending discrimination.
In fact, the statute's ``remedy'' here is actually
perverse, helping those who seem to need help least. Those
businesses that benefit from the set-aside are the ones that
ultimately did get the loans they needed. Those that suffered
most, that couldn't get the loans, are out of business and
aren't helped by the set-aside at all.
C. The need for a race-neutral alternative. The lending
example would also be a race-neutral remedy--it would help
all businesses that were unfairly denied funding, regardless
of their owners' race. The Court has clearly said that race-
based remedies are allowed only when race-neutral
alternatives are unavailable.\3\ But the statute imposes a
set-aside that's required regardless of the availability of
race-neutral solutions.
D. The need for geographical tailoring. Different parts of
the country have wildly different ethnic compositions.
Hawaii, which is majority non-white, is a very different
place from Maine, and you'd expect very different levels of
minority participation in each state's contracting industry.
Likewise, different parts of the country have different
levels of participation by women in contracting, and
different levels of ethnic discrimination against different
ethnic groups. Having a uniform set-aside throughout the
country, regardless of all these factors, is the opposite of
narrow tailoring.
This is a somewhat controversial point; for instance, the
Adarand trial court has taken a different view.\4\ Still it
seems to make common sense. If contracting discrimination
against minorities in one state is largely eradicated--or if
the paucity of minority contractors in that state is caused
by the small minority population in the state--then it's
wrong to discriminate against whites there just because
substantial discrimination against minorities continues
elsewhere. Congress is quite right to try to create
nationwide remedies, but ``narrow tailoring'' consists of
creating nationwide remedies that are tailored to local
conditions, not remedies that treat the entire country as one
undifferentiated mass.
Perhaps someone can propose some statutory changes that
will make ISTEA's race preference program constitutional. I
doubt that this is possible, but one can't know until one
sees the specific proposal. But in its current form ISTEA is
clearly invalid.
2. Congress's Constitutional Duties
In Adarand Constructors, Inc. v. Pena,\5\ the Court held
that race classifications must pass strict scrutiny. This
means that the Court will strictly scrutinize them, but it
also means that Congress must strictly scrutinize them, too.
Before Congress enacts any racially discriminatory program,
Congress itself must verify that the program is indeed
narrowly tailored to a compelling state interest.
[[Page S1408]]
This is especially so because the Court has suggested that
it may in some measure defer to Congress's factual findings.
Though the Court never abandons its own duty to independently
review the facts, it acknowledges Congress's factfinding
capabilities, and thus listens carefully to Congress's
judgments.
This deference, then, would mean that the Court is trusting
Congress to do the right thing: To look at the facts
carefully and skeptically, and to make sure that race
preferences aren't just politically convenient or seemingly
useful, but genuinely and ineluctably necessary. Congress's
solemn constitutional obligation would thus be made even
graver by the fact that a coordinate branch is relying on
Congress's faithful discharge of its duties.
3. A practical note
So far, I have made two rather technical legal points; I'd
like to briefly step back and make a more practical one.
People on both sides of this debate share a common goal: To
eliminate discrimination. That's why the government properly
demands that contractors not discriminate. But under ISTEA,
the government in the same breath tells the Adarand
Constructors of the world: ``While we're demanding that you
not discriminate--while we're telling you that race
discrimination is a horrible evil--we're at the same time
proudly discriminating against you because of your race. You
must never treat an employee or a subcontractor worse than
another because he's black or Hispanic or Asian. But we are
treating you worse than others because you're white.''
Is that fair? And will it really work towards our shared
goal of ending discrimination? It seems to me the answer to
both these question is ``no.''
footnotes
\1\ In theory, the presumption of social disadvantage is
rebuttable--but mostly in theory. In practice, neither the
federal government nor state grant recipients have a duty to
investigate whether a supposedly ``disadvantaged'' minority
is indeed disadvantaged. Adarand Constructors v. Pena 965 F.
Supp. 1556, 1565 (D. Colo. 1997). In fact, state grant
recipients are required to presume disadvantage until a third
party comes forward with contrary evidence. 49 C.F.R. pt. 23,
subpt. D, app. A.
Moreover, while members of favored racial groups get the
benefit of the presumption, members of other groups who are
also socially disadvantaged have to show this disadvantage by
clear and convincing evidence--a far higher standard than the
conventional ``preponderance of the evidence.'' 13 C.F.R.
Sec. 124.105(c).
The deck is thus stacked very much in the direction of
treating the racial presumption as being essentially
dispositive.
\2\ 488 U.S. 469, 506 (1989).
\3\ Adarand Constructors, Inc. v. Pena, 515 U.S. 200, 237-38
(1995); Croson, 488 U.S. at 507.
\4\ Adarand Constructors, Inc. v. Pena, 965 F. Supp. 1556,
1573 (D. Colo. 1997).
\5\ 115 S. Ct. 2097 (1995).
Mr. ASHCROFT. Mr. President, the Constitution gives the Congress an
important duty in upholding the Constitution. The oath we take to
uphold the Constitution gives us an obligation to vote against
unconstitutional laws. The hearing I held in the Constitution
Subcommittee convinced me that this is clearly one of those
unconstitutional provisions that should be removed from the statute.
I yield the floor.
Mr. McCONNELL. Mr. President, can I say very briefly to the Senator
from Missouri how much I appreciate his fine addition to this debate
and how grateful I am for his leadership on this important issue, as
well as the distinguished Senator from Alabama, the current occupant of
the Chair. They both understand the issue well and make an important
contribution to the debate.
The PRESIDING OFFICER. Under the previous order, the Senator from
Massachusetts is recognized.
Mr. KERRY. Mr. President, I yield myself, with the permission of the
manager, such time as I may use.
I have listened carefully now to a number of the arguments for the
amendment of the Senator from Kentucky, and I am confident that a good
many of my colleagues will join me in adamantly opposing this amendment
and, most important, the arguments and the approach that underlie it.
This is a very, very significant debate for the Senate, and it is the
first very significant confrontation, though it will probably--not
probably, certainly--not be the last on the issue of race.
This is a fundamental challenge to an effort that this country has
undertaken to make real the promises of our Founding Fathers and the
fundamental values of our Nation: economic opportunity, equal
opportunity, a chance to be able to share in the remarkable assets of
our Nation.
I listened carefully to the Senator from Missouri, and one phrase in
particular in his comments that he kept repeating was that the economy
of America doesn't make decisions based on race; let me repeat, the
economy of America doesn't make decisions based on race.
First of all, I respectfully submit to my friend from Missouri, the
economy, per se, doesn't make the decisions; people make the decisions,
people within the economy, CEOs of companies, boards of directors,
shareholders, whole companies, individual employers, wholly owned
subsidiaries. But it is individuals, it is the bosses who hire, it is
the individuals who commit a company to a particular direction.
The fact is that individuals in America discriminate. Even in 1998
they discriminate, and anybody who believes that there is not
sufficient level of discrimination with respect to women-owned
businesses and minority-owned businesses, minorities themselves or
women themselves within the marketplace is not looking at the
statistics, is not looking at the cases, is not looking at the evidence
which clearly documents the existence of that discrimination. I will
say more about that in a minute, Mr. President.
There are three fundamental reasons why we should not accept the
amendment of the Senator from Kentucky. Reason No. 1 is the program for
disadvantaged business enterprises, the DBE Program, is constitutional.
It will pass constitutional muster, contrary to the arguments that are
being set forth.
Secondly, because of the discrimination that I have just broadly
pointed to, it is necessary.
And thirdly, Mr. President, it works; it works brilliantly. There is
no reason that we should take a program which already reaches out to a
very small group of disadvantaged people and broaden the definitions so
as to give more of the very little that goes to the disadvantaged to
the vast majority who are already getting the vast majority of what the
Federal Government expends in its programs.
I might add, there is, indeed, a compelling interest in the Federal
Government making this kind of choice about how the Federal Government
will expend Federal dollars.
Mr. President, let me point out, first of all, this is not a quota.
It is a set-aside of a specific amount of money, but there is no
specific direction as to who gets that amount of money. There is no
quota of numbers of women, no quotas of numbers of particular races. It
is open to any disadvantaged business enterprise.
And while we set aside a very specific sum of money, we do not
allocate it with specificity. We set a national goal. And it is
appropriate in this country to set national goals for what we will do
to try to break down the walls of discrimination, the barriers against
equal opportunity, in order to give people an opportunity to share in
the full breadth of the upside of the economy of our Nation.
Mr. President, this goal is renegotiated annually. And it has worked
very well to encourage disadvantaged business participation in these
contracts. I add, most States have exceeded the 10 percent goal, but
there is flexibility where it is needed. And existing law authorizes
the Secretary of Transportation to lower that goal in order to respond
to local conditions.
So when my colleague says that there has to be a level of
flexibility, and it has to be narrowly defined, I respectfully suggest
that part of that narrowness is met by the fact that the Secretary of
Transportation has the ability to lower that goal under very clear
circumstances.
I point out to my colleagues that since this program began, first as
an administrative initiative in the late 1970s, and later by statute in
1982, it has been an extraordinarily successful tool for leveling the
playing field in Government contracting and for remedying racial and
sex discrimination, which still persist.
I add to my colleagues, where you have a showing of clear cases or a
history or a pattern or instances of this kind of discrimination, we
have an affirmative obligation, both a statutory one and a moral one,
to make certain that we are going to do something very specific to
respond to that kind of discrimination. And, as I will show, the
evidence is so overwhelming as to what happens when you do not have it,
that it is clear why there is a compelling interest for the Government
to put this kind of effort into place.
Many of the firms that have been able to use the program, the women-
[[Page S1409]]
owned firms or minority-owned businesses, literally would have been
excluded from doing so altogether were it not for the DBE program. And
it is not, as my colleague from Missouri said--he kept saying that
since we set up this kind of goal, some people of race believe that
they are at a disadvantage because of their race. Ask people who
participate in the program. There are countless people who will tell
you they never believed they were disadvantaged. They do not think they
are disadvantaged today. And, in fact, it is only because of the
existence of the program that they have been able to prove to people
that not only do they not believe they are disadvantaged, but they are
not because they can perform equally as well as any majority firm. And
that, in fact, has been a record which has prompted many States to come
back and be extraordinarily supportive of the program.
In 1996, I am pleased to say, Massachusetts exceeded its goal of
providing 11 percent of the Federally assisted highway dollars to DBEs
by providing about 13.6 percent in total to DBEs. And I add, in one
multi-year project alone, Massachusetts provided 147 women-owned
businesses and 227 minority-owned businesses with an aggregate amount
of some $500 million of contracts. And the program has been an enormous
success and very well received, Mr. President.
So, let me look at the constitutional issue for a moment, if I may.
Contrary to the arguments of the Senator from Missouri, and others, I
believe that a careful examination of the Adarand case will show that
the Court made it very clear that ``strict scrutiny,'' as he said, is
the appropriate constitutional review standard. But that means that you
then look to the ``compelling State interest'' and to the ``narrowly
tailored'' definition in order to see whether or not it will pass
muster.
Unfortunately, Mr. President, as I mentioned earlier, there are just
countless examples across the country of what happens when you do not
have this kind of effort. Although minorities make up over 20 percent
of the population, minority-owned firms constitute only 9 percent of
all U.S. construction firms, and a mere 5 percent of Federal
construction receipts.
So you can see the sort of downward curve between total levels of
population, levels of construction, and then levels of receipts with
respect to the outlays by the United States to those firms.
Women own approximately 9.2 percent of the Nation's construction
firms, but according to the Urban Institute's recent study, their
companies earn only half of what is earned by their male-owned
counterparts.
Now, let us look at this question of ``narrowly tailored,'' Mr.
President.
The DBE program is a very flexibly defined program. It allows for
each State to respond to local conditions. And, by definition, by
allowing each State to respond to the needs of that State, it becomes
very narrowly tailored. In the implementation, the DBE program has
authority to waive the DBE goal. It can waive it completely where it is
not possible to achieve the goal in a particular contract or for a
given year.
In addition, the Department of Transportation recently proposed
regulations to modify the program even further so as to help with
compliance with the Adarand test. So you cannot come to the floor of
the Senate and measure the program exclusively by what might have been
in place several years ago, since already proposed are a set of
requirements that respond very specifically to the requirements of the
Adarand test.
In fact, the Department of Transportation has received over 300
public comments in response to the proposed rules. And the States that
commented on the rules overwhelmingly supported the Federal DBE
program.
Let me call the Senate's attention to the specific regulatory changes
which deal with this question of ``narrowly tailored'' and of
``flexibility,'' and which clearly bring it within constitutional
muster.
First of all, the Department of Transportation is building even more
flexibility into the program by setting goals that reflect the
availability and the capacity of DBEs in a given market. And the
contract recipients will be allowed greater flexibility to consider
local circumstances in formulating their plans to achieve DBE
participation.
Second, states and localities implementing the DBE program will be
directed to use race neutral--let me emphasize this. The Senator from
Missouri kept saying the decision will be made on the basis of race. In
fact, there are specific race-neutral aspects to the program, such as
outreach, training, technical assistance, and simplifying bonding or
surety costs in the bid preparation. And those are used in order to
achieve as broad a DBE participation as possible before any race-based
aspect of the program is used. So the race-based aspect is pushed way
down to the bottom of the list of criteria--only if you cannot satisfy
the goals by virtue of those original considerations.
Third, the new regulations will reinforce existing provisions to
ensure that firms owned by wealthy individuals are not certified as
DBEs and to clarify that non-minority individuals who have suffered
discrimination can be certified as DBE owners and become eligible to
receive the same program benefits as minority-owned DBEs.
Now, I do not see how anybody, examining those three regulatory
changes as a consequence of the Adarand decision, could say that that
is not a legitimate effort to meet the standards of ``narrowly
tailored'' and of ``flexibility.''
Mr. President, let me turn to the question of ``compelling interest''
and of ``need.'' Because in addition to being constitutional on its
face, it is my judgment that only at peril could you turn your back on
the reality of what has happened in many parts of our country.
In some States, the State DBE goals were repealed. So let us look at
what happened where they were repealed, Mr. President. Was it a neutral
reaction? No. Was it a marginal reaction? No. In point of fact, it was
a draconian step backwards. Without a State goal for DBEs, the
contracts to women-owned and minority-owned construction businesses in
a number of different States plummeted.
We see prime contractors that use DBEs on Federally-assisted
construction projects which had DBE goals often excluded DBE goals on
State projects where there were no State goals. So in other words, you
could have a company come in and they would be adhering to the Federal
standards, but where there was no State goal they made absolutely no
effort whatsoever in order to try to reach out to a disadvantaged
businesses in their State-sponsored contracts.
In Michigan, just to take one example, within 9 months of ending the
State DBE program, minority-owned businesses were completely shut out
of the State highway construction projects. They received no contracts
at all. By 1996, there was a tiny rebound to 1.1 percent, representing
only 31 subcontracts. This compared to Michigan's Federal DBE
participation of 554 subcontracts worth 12.7 percent. That is the
difference, Mr. President--12.7 percent versus first none--zero; then
creeping up to 1.1 percent.
Louisiana experienced a similar disparity between Federal DBE
participation, where the 1996 DBE negotiated goal was 10 percent, and
State participation where there was no State DBE program. In Federally
assisted projects, disadvantaged women-owned and minority-owned
contractors received 160 prime and subcontracts worth 12.4 percent of
Louisiana's Federal contract dollars, compared to a State participation
in a mere two prime contracts and 12 subcontracts. That was worth only
.4 percent of the State highway construction dollars.
In Hillsborough County, FL, awards to minority-owned contractors fell
by 99 percent--99 percent--after the minority contracting program was
ended.
In San Jose, CA, suspension of the city's minority contracting
program in 1989 resulted in a decrease of more than 80 percent in
minority business participation in the city's prime contracts.
Now, I ask my colleagues, is that just the economy of our country
speaking, an economy at one moment that is capable of having 12 percent
and at another moment, where they lose the incentive to do it, to drop
down to zero, to drop down by 99 percent, to drop down by 80 percent,
to have .4 percent at the State level while at the Federal level there
are 12 percent? You could
[[Page S1410]]
not have a more compelling interest if you tried, for understanding why
it is that in this country we need to continue to break down those
barriers of resistance. And there is nothing compelling in the proposal
to take away from that marginal percentage and give it to those
majority contracts and contractors who already are getting the lion's
share of what we expend for transit and highway construction at the
Federal level in this Nation.
Mr. President, as the Ranking Member of the Small Business Committee,
I find two aspects of this McConnell amendment particularly troubling.
First, the amendment expands the definition of who is eligible for
help to include the vast majority of construction firms. Now, I am in
favor of helping small businesses. We have done a lot in the Small
Business Committee to make sure that they are helped. As a group, they
ought to receive a greater percentage of Federal contract
opportunities. And I want them to. All of the growth in our economy
comes from small businesses. In fact, I cosponsored a bill with
Chairman Bond last year that raised the small business Federal
contracting goal from 20 percent to 23 percent.
But this program is intended to help level the playing field for
businesses owned by individuals that have historically suffered racial,
ethnic or sex discrimination in Federal construction contracting and
that continue to suffer that kind of discrimination. It helps women-
owned businesses, minority-owned businesses, and majority-owned
businesses that have suffered discrimination. They receive about 15
percent of the Department of Transportation-assisted contract dollars.
Mr. President, the other 85 percent still goes to nondisadvantaged
majority-owned companies. To increase the assistance to that universe
of businesses that, according to the Federal Procurement Data Center,
now receive 62 percent of contracts above $25,000, and a higher
percentage of those below, would dilute the very salutary effects of
the program on companies owned by truly disadvantaged individuals.
Second, and finally, the amendment proposes that the Senate
substitute requirements for outreach compilations and directories of
assistance and surveys of existing emerging businesses for the national
DBE goal and the current DBE program. The proposed substitute program
will be expensive to implement because of the detailed requirements for
compilation and directories and the frequency with which updates have
to be performed.
In addition to being expensive to implement, much of what is proposed
as the substitute for the DBE program is simply duplicative of aspects
of the existing DBE program and many of the Small Business
Administration's programs that are already in place. Each year, the SBA
provides outreach, training, technical, bonding, and surety assistance
to thousands of Federal contractors through a wide variety of programs.
Those programs include the SBA's procurement center representatives,
its more than 950 Small Business Development Centers, its Women's
Business Centers, and assistance provided through the procurement and
minority small business staff in SBA's network of 69 offices throughout
the country. It is hardly necessary to duplicate that or to come at it
with some kind of add-on program.
Mr. President, time has shown that the DBE program works. It is a
program that meets constitutional muster. It is a program that has a
rational, national compelling interest. I hope that my colleagues will
not undo what has proven to be of enormous benefit to countless
minority- and women-owned businesses in the country. Thank you, Mr.
President.
The PRESIDING OFFICER. The Senator from Minnesota.
Mr. WELLSTONE. I said to my colleague from Utah I will take less than
5 minutes.
The PRESIDING OFFICER. Who yields?
Mr. BAUCUS. Mr. President, I yield 5 minutes to the distinguished
Senator from Minnesota.
Mr. WELLSTONE. Mr. President, I will keep it very simple. As a
Senator from Minnesota, I rise in strong support of this Disadvantaged
Business Enterprise Program, what we are calling the DBE program. For
people who are watching, if you didn't catch it, it is Disadvantaged
Business Enterprise Program.
This program sets out a goal of 10 percent of the highway
construction funds. The attempt is to make sure that 10 percent of
these funds go to disadvantaged businesses, and the focus is on
``minority businesses'' and businesses owned by women.
My State of Minnesota has essentially had the equivalent of this
program since 1980. One of the reasons I am really proud of being a
Senator from Minnesota is I think we have a really strong, progressive,
justice tradition. In the last 5 years, Minnesota Department of
Transportation has exceeded the 10 percent goal. We have been between
about 11 and 13 percent for contracts that have gone out to
``minority''-owned businesses and to women-owned businesses.
Mr. President, the important point to make for colleagues is that
these businesses have been able to win these contracts because of a
level playing field. It has enabled them to get their foot in the door.
They haven't been able to obtain these contracts because they have a
bid that comes in higher than other contractors. Other things have to
be equal. They don't get these contracts because they do shoddy work.
It is because these are effective businesses that do good work. What
you have is a situation where around the country we have made the
argument through this Disadvantage Business Enterprise Program, we are
serious about entrepreneurship.
We think it is indeed better that the people who make the capital
investment decisions in the communities we live in are people who own
businesses and live in those communities, not people who make decisions
over martinis halfway across the world. We are not talking about big
multinational corporations.
Insofar as we are focused on our local economies and insofar as we
are talking about entrepreneurship, I will tell you, as a member of the
Small Business Committee, I have loved working on these issues. I am
not ashamed to say that small businesses have been my teachers. I was a
teacher, a college teacher. I never owned a small business, and I have
learned a lot about what it takes to do so. But it is absolutely true
that most of the growth in our economy is in the small business sector.
It is absolutely true that if we want to expand opportunities and if
we don't want to turn our gaze away from an unpleasant reality, which
is that we still have discrimination in our country--does anybody
believe that America is blind to issues of race? Does anybody believe
that we have conquered all of this? Does anybody believe that we don't
want to try and redress some major historical grievances? That is what
we are doing through this program.
It does just what the title says--it is the disadvantaged business
enterprise program. It sets a goal of 10 percent of highway money going
to these contractors which are owned by minorities and women. It has
been enormously successful in the State of Minnesota. We exceed that
goal. It enables people to get their foot in the door, start their
businesses, and then they become successful in a whole lot of other
areas as well.
I think then you have this kind of marriage between, on the one hand,
trying to expand opportunity, on the other hand trying to correct a
historical injustice, and--although there are only two hands--on the
third hand, also being serious about promoting entrepreneurship, also
being serious about making sure that women and people of color in our
communities are able to obtain some of the funding that comes out of
these contracts.
Instead, it will be a close vote. I hope we win. I think we should
win. I do not believe that the U.S. Senate ought to be turning the
clock back 30 years. I think we should be moving forward. I think a
vote which would eliminate this program, the DBE program, would be an
enormous step not forward for expanding opportunities, not forward for
promoting entrepreneurship, not forward for women and minorities having
these opportunities, it would be a giant leap backward.
That is why I come to the floor to speak in behalf of this program.
Mr. McCONNELL. Mr. President, I yield the distinguished Senator from
Utah such time as he may need.
[[Page S1411]]
Mr. HATCH. I thank my colleague.
Over thirty years ago, the U.S. Senate passed the Civil Rights Act of
1964. It was historic legislation, and its supporters showed great
moral courage in seeing it through.
The principle underlying that Act was equal treatment: The federal
government should treat all persons equally, regardless of their race,
color, national origin or sex. Indeed, it should mandate equal
treatment from employers, labor unions, providers of public
accommodation as well as many others.
Now, Contrary to popular mythology, however, the Senate was not ahead
of the moral curve when it passed the 1964 Act. Polls taken at the time
show that a majority of Americans supported the legislation. Indeed,
they continue to support it. They know that its principle is
fundamental. The United States government has no business making
distinctions based on skin color or sex. Period.
But there were many vocal opponents too. It is important to give
credit to the members of the Senate who resisted those opponents by
passing the legislation.
Somewhere over the course of the last generation, the federal
government started to fall away from the 1964 Act's fundamental
principle. In the name of ``affirmative action,'' is substituted a
policy of preference based on race and sex for the policy of equal
treatment. And that is why the term ``affirmative action'' sometimes
has a bad connotation. The fact is, affirmative action calls for
outreach, job training, education--those type of things I think
everybody is for, and certainly I am for.
I have no doubt that the supporters of preferences were--and still
are--well meaning. They wanted to do something about this country's
very real history of racial and gender inequity. But the policy they
created stood the color- and gender-blind principle of the 1964 Civil
Rights Act on its head.
I believe that it was a serious error to compromise one of our most
fundamental principles. Despite assurances from preference supporters
that these programs will be only temporary--lasting for a few years at
most--preference programs now permeate the Federal Government. Rather
than withering away, they are showing a remarkable tendency to expand.
New programs are added. New groups demand to be included. Under one
program, preferences are now available to no less than forty ethnic
groups.
Each time such an expansion occurs, we become less like the color-
and gender-blind country that we aspire to be and more like those
countries where an ethnic spoils system has been a way of life for
centuries.
Who would have thought it would be so difficult for the Federal
Government to reclaim the moral high ground? The public has never
supported preferences. They have been demanding a return to equal
treatment since preferences were first implemented. But the Federal
Government's decision to compromise its principles has proven to be
habit forming. Despite the public's support for a return to equal
treatment, many of our Nation's leaders have refused to stand up for
principle.
Even the most indefensible programs are tough to eliminate. ISTEA
mandates that ``not less than 10 percent'' of Federal highways and
transit funds be allocated to ``disadvantaged business enterprises,''
which firms owned by designated minority groups are presumed to be. It
is a set-aside, pure and simple.
Now, I might add here that these so-called disadvantaged business
enterprises need not be actually disadvantaged. Minority business
owners who qualify for this program need not be poor or even middle
class. The secret about this program is that, like many racial and
gender preference programs, its beneficiaries are quite often wealthy.
It is worse than no help for those--of all races and ethnicities--who
could really use a helping hand. Such programs lull the good people of
this Nation into believing that something's being done when in fact
little or nothing is being done to help out those who really need the
help.
If any set-aside program ought to be eliminated, this should be the
one. It is the very same program confronted by the Supreme Court in the
1995 landmark case, Adarand Constructors v. Pena. At that time, the
Court laid down a standard of strict scrutiny for this program and
others like it. Under such a standard, the program is unconstitutional
unless the federal government can demonstrate a compelling purpose and
has offered a solution that is narrowly tailored to serve that purpose.
It's a tough standard meet, but it's the standard our Constitution
demands.
Last year, on remand, the District Court in Colorado applied the
strict scrutiny standard and found this program to be wanting. The
Court therefore held the program to be unconstitutional. That was after
the Supreme Court had remanded it to the court to determine whether it
deserved to see the light of day and the District court of Colorado in
applying the scrutiny standard found this program to be
unconstitutional.
That decision was no fluke. Since the Supreme Court's decision in
Adarand, set aside programs have been consistently found to be
unconstitutional by the federal courts. Yet, the bill being considered
by the Senate blithely reauthorizes the program. In doing so, it
ignores our responsibility to bring the program into compliance with
the Constitution. That is a responsibility we cannot shirk.
The United States Senate is now seriously behind the moral curve on
this issue. The public supports a return to principle. The courts are
demanding it. The proposed amendment can do that. It eliminates set-
asides based on race and sex and substitutes a non-discriminatory
program of assistance for ``emerging business enterprises,'' something
that most of us can agree on. It will help put us back on the right
road. I urge you to support it.
Now, if you want the litany of the forty ethnic groups, here it is:
African Americans, Hispanic Americans, Native Americans--including
American Indians, Eskimos, Aleuts and Native Hawaiians), Asian-Pacific
Americans--including persons from Burma, Thailand, Malaysia, Indonesia,
Singapore, Brunei, Japan, China, Taiwan, Laos, Cambodia, Vietnam,
Korea, the Phillipines, the Republic of Palau, the Marshall Islands,
Micronesia, the Northern Mariana Islands, Guam, Samoa, Macao, Hong
Kong, Fiji, Tonga, Kiribati, Tuvalu, and Nauru, and Subcontinent Asian
Americans--including persons from India, Pakistan, Bangladesh, Sri
Lanka, Bhutan, the Maldive Islands and Nepal. Just think about that.
What we are doing is creating all kinds of special interest groups who
are vying for these programs and, in the end, the wealthy are getting
them anyway. But if we have the amendment of the distinguished Senator
from Kentucky, we will be providing an opportunity for those truly
emerging businesses that are disadvantaged.
To me, I see a tremendous difference between the language in the bill
and the language proposed by the Senator from Kentucky, and I think the
language proposed by the Senator from Kentucky is constitutional, where
the language in the bill is unconstitutional.
I yield the floor.
Mr. McCONNELL addressed the Chair.
Mr. CHAFEE. Does the Senator have a short request? I wanted to speak.
Mr. McCONNELL. I thank the distinguished Senator from Utah. He has
been a leader in this field of getting rid of unconstitutional quotas
and preferences, and has been one of the principal cosponsors of the
bill to eliminate all of the unconstitutional quotas and preferences in
the Federal Government. I thank the Senator from Utah for his support
and contribution to the debate.
Mr. CHAFEE. Mr. President, I have great affection for the Senator
from Utah, but I don't greet his remarks with the enthusiasm that the
Senator from Kentucky has.
The truth of the matter, Mr. President, is that this is the wrong
amendment, at the wrong time, in the wrong place. Why do I say this?
This is a transportation bill that every single one of us in this
Chamber knows is a very important and difficult bill. Trying to balance
everybody's interest has been very, very difficult. There isn't a
Senator in this place who doesn't know exactly how much his or her
State was getting under ISTEA I, then how much under the first proposal
of ISTEA II,
[[Page S1412]]
and finally how much under these new proposals. And all of them want
more. As I say, trying to satisfy all of these senators is very
difficult.
To come forward with an amendment like this doesn't help. It flies
right in the face of an October 1997 letter sent to the majority leader
by the Secretary of Transportation. In that letter, which was sent when
we first brought up this bill last fall--and there have been no changes
in his position since then--Secretary Slater talks about the
President's view on this whole Disadvantaged Business Enterprise, or
DBE, Program. He closed his letter by saying this:
This critical effort to achieve equal opportunity must
continue. Removal of the DBE program from S. 1173 would be a
serious blow to our efforts to assure fundamental fairness to
the citizens of this country. I would find it difficult to
recommend ISTEA reauthorization legislation to the President
for his signature that did not include the DBE program.
This is a gentle way of saying, listen, folks, if you knock out the
disadvantaged business enterprise section of S. 1173--which is exactly
what the Senator from Kentucky is proposing to do--then there is going
to be a veto of this legislation.
I see the Senator from Utah here. If I could get his attention for a
moment. Now, he spoke against the DBE provision of our bill. But my
question is, why pick on the provision in our bill? It is my
understanding that similar affirmative action language is contained in
some 160 different federal statutes or regulations. The Senator from
Utah chairs the Judiciary Committee--and certainly he is masterful in
that role, with all the great powers that supposedly appertain to the
chairmanship of a committee--and thus out of that committee comes
legislation he wants and bottled up in that committee is legislation he
doesn't want. I notice that the Senator from Utah now has before him,
in his own committee, legislation to eliminate all federal affirmative
action programs, not just this program. So I am asking him--don't pick
on our little program here that we are desperately trying to get
through. Imagine, here is an amendment that puts the whole bill under
the threat of a veto if it is adopted. If the Senator wants to debate
affirmative action at the federal level, I would say to him, go ahead
and deal with that issue in your own committee. Don't pick on our
program. I can't name all 160 federal affirmative action programs, but
certainly there are Small Business Administration programs and many
others that have special provisions for disadvantaged parties.
So if the senator so wishes, go ahead and do a generic bill on
eliminating affirmative action, and go ahead and have it out here on
the floor. But I feel helpless here as you all come forward with a
amendment like the one the senator from Kentucky has offered on our
bill.
Mr. McCONNELL. Is the Senator asking a question?
Mr. CHAFEE. I retract that word ``helpless.'' I feel frustrated. I am
not totally helpless.
Mr. McCONNELL. Mr. President, if the Senator was asking a question
about why the Supreme Court and the district court ruled this provision
unconstitutional, I say to my good friend that it cried out for
correction.
Mr. CHAFEE. Let me answer that quickly. There may be many arguments
against the DBE, but I must say that your weakest one is this so-called
unconstitutional argument. We all know about the constitutionality
issue. In 1995, the Supreme Court handed down a decision in Adarand v.
Pena. In Adarand, the justices specifically said that federal
affirmative action programs are not unconstitutional. As long as the
programs meet a compelling governmental interest and are narrowly
tailored, then they can pass constitutional muster. Now, US District
Judge Kane, to whom the case was remanded, ended up holding that part
of the DOT regulations were unconstitutional on the grounds they were
not narrowly tailored. But that is going to be corrected under the new
regulations that are due out this spring. So as I say, of all your
arguments, that really is the weakest. As a matter of fact, I will give
you an opportunity to jettison that argument, if you want.
Mr. McCONNELL. I say to my good friend from Rhode Island, there has
been no compelling interest found here, no such finding at all. I
guess----
Mr. CHAFEE. Wait a minute. I don't want you to get on with that.
Judge Kane found there was a compelling interest.
Mr. McCONNELL. But not narrowly tailored. There have to be two
standards: narrowly tailored and compelling interest. Narrowly tailored
was not met and, consequently, this effort to jimmy around with the
regulations is not going to cure the problem. What is going to happen,
if the Senator is successful in defeating the amendment, is that some
other plaintiff is going to have to bring some other case, at a cost of
thousands in legal fees, to get this struck down one more time.
Mr. CHAFEE. Mr. President, I haven't heard from the Senator from
Utah, the distinguished chairman of the committee who has power over
all these affirmative action programs. Why doesn't he go after all of
them? That would be a rather magnificent effort. It certainly would
shake things up. The senator could come to the Senate and try to get
rid of all 160 different affirmative action programs. Why doesn't he do
that instead of picking on the highway program? Go after all of them.
There is a suggestion for you. I certainly would not support that
effort, but I am saying that if you really want to get into an
affirmative action debate, why you don't do that, through your
committee.
Mr. HATCH. If the Senator will yield, let me just say that we are
going after all of these preferential programs. This is the first of
the 160. We may have to do them one by one, because it is very
difficult to even get an all-embracing bill up. But whether we go after
them one by one or en bloc, it is important that we go after them. If
we allow them to go on, we will be violating one of the basic
principles of the Constitution--that is, treating people equally. We
will be violating the actual, legitimate, straightforward language of
the Constitution and the 1964 Civil Rights Act, which provide equal
opportunity for all, not for a select few.
Now, with regard to this particular bill, I want to compliment my
dear friend from Rhode Island and my friend from Montana, the two
distinguished Senators, because they have carried what is a very
difficult bill all the way to this position. I am not here to give them
a rough time, but I do think that it's time that we do something about
these unconstitutional set-asides and preferences. Whether we do it
individually, each of the 160 programs, or whether we do it en bloc,
it's time to try and set the record straight with regard to how these
funds should be used.
Now, if the distinguished Senator from Kentucky were asking to
prevent disadvantaged businesses from benefiting from these funds, I
probably would part company with him. But he has a specific provision
in here that would help emerging new business enterprises that
otherwise might have difficulty competing to obtain some of this money.
I heard one of our colleagues talk about various companies--I think it
was the Senator from Minnesota--he talked about companies owned by
minorities and women who literally deserve a right to compete because
they are very competent and very good. Well, if they are very competent
and good and they can compete, then they ought to compete for this work
on the same terms and conditions as anybody else.
We should not be opening up a loophole here where companies that are
very capable of competing have an absolute set-aside so they don't have
to compete. I think that is what the Senator from Kentucky is doing. As
far as I am concerned, I think we ought to go after these programs and
straighten them out so they are not lacking in constitutionality--one
at a time, or 10 at a time, or 160 at a time. Ultimately, I think we
will probably vote on a full en bloc amendment. Until then, let's make
these bills as constitutional as we can.
The PRESIDING OFFICER (Mr. Hutchinson). Who yields time?
Mr. BAUCUS. Mr. President, I yield myself such time as I may consume.
I see the Senator from Maine on the floor, so I will be brief. I want
to just make a couple of points here.
One, I will reiterate a point made by Senator Chafee. We, in the
Senate, have received a letter from the Secretary of Transportation,
Rodney Slater, who said he would find it difficult to recommend to the
President
[[Page S1413]]
for signature ISTEA legislation that did not include the DBE Program,
which has been noted in a statement that he would recommend the
President veto this bill if the DBE Program is taken out.
I don't want to belabor this constitutionality argument, but it's
clear that the Supreme Court did not rule that the Federal highway DBE
Program in Colorado was unconstitutional. The Supreme Court did not
rule it unconstitutional. It is clear. All Senators who have studied
this know that. The Supreme Court said that program, like all
affirmative action programs, must be subjected to a strict scrutiny
test. That is what the Supreme Court held, that the Colorado public
lands DBE Program had to be subject to the strict scrutiny test. That
is all they held--nothing more, nothing less. The strict scrutiny test
has two parts, compelling interest and narrow tailoring. Even the
district court in Colorado said it looks like a compelling interest. So
the only question is whether the program was narrowly tailored. A
district court judge found, in his judgment, that it was not narrowly
tailored. Well, that is one man's opinion. That is a district court
judge's opinion. District court judges declare statutes
unconstitutional all the time, only to find them overturned by the
Supreme Court.
There is only one body that determines whether a statute is really
constitutional or not, and that is the Supreme Court. The Supreme Court
has not ruled up or down on the constitutionality of the program in
Colorado. They have not ruled. In fact, the U.S. Government has filed
an appeal on the district court decision. I have a letter from
Associate Attorney General Raymond Fisher to Senator Daschle, which
states that:
As we discuss further below, we believe that the ISTEA
program is narrowly tailored to meet this compelling interest
and is constitutional under the Adarand standards.
The U.S. Government is going to appeal.
I ask unanimous consent that this letter printed in the Record.
There being no objection, the letter was ordered to be printed in the
Record, as follows:
U.S. Department of Justice, Office of the Associate
Attorney General,
Washington, DC, March 3, 1998.
Hon. Thomas A. Daschle,
U.S. Senate,
Washington, DC.
Dear Senator Daschle: This letter responds to your request
for the Department of Justice's views regarding the
constitutionality of the Disadvantaged Business Enterprise
(DBE) program of the Intermodal Surface Transportation
Efficiency Act (ISTEA). I have been charged with supervising
the Department's review of affirmative action programs at
federal agencies, to ensure that such programs meet the
constitutional standards enunciated by the Supreme Court in
Adarand Constructors, Inc. v. Pena, 515 U.S. 200 (1995). The
Congress has repeatedly found that racial discrimination and
its effects continue, and that eradicating the effects of
discrimination is a compelling interest. As we discuss
further below, we believe that the ISTEA program is narrowly
tailored to meet this compelling interest and is
constitutional under the Adarand standards.
Under the ISTEA DBE program, the Department of
Transportation takes steps to ensure that firms qualifying as
disadvantaged businesses are made aware of contracting and
subcontracting opportunities in federally assisted state and
local construction projects, and that prime contractors use
DBEs to do some portion of federally assisted construction
projects. As explained below, Congress has found that without
the use of affirmative action measures such as the ISTEA DBE
program, minority-owned firms would be severely disadvantaged
in federally assisted construction projects. The program
serves a compelling interest and is narrowly tailored to
accomplish that interest.
Congress originally established the federal highway DBE
program in the Surface Transportation Assistance Act of 1982,
based on a compelling record demonstrating that efforts were
needed to ensure that federal highway dollars were not used
to perpetuate the effects of racial discrimination on the
ability of minority-owned small businesses to participate in
government contracting opportunities. Indeed, the Supreme
Court in 1980 addressed a very similar provision involving
federally-assisted public works projects. See Fullilove v.
Klutznick, 448 U.S. 448 (1980). The Court analyzed a number
of Congressional studies and reports issued prior to the
provision at issue there, and found that ``Congress had
abundant evidence from which it could conclude that minority
businesses have been denied effective participation in public
contracting opportunities by procurement practices that
perpetuate the effects of prior discrimination.'' 448 U.S. at
477-478.
Since that time, Congress has continued to oversee the DBE
program and has frequently reevaluated the continuing need
for it. See, e.g., The Disadvantaged Business Enterprise
Program of the Federal-Aid Highway Act: Hearing Before the
Subcomm. on Transp. of the Senate Comm. on Environment and
Pub. Works, 99th Cong., 1st Sess. (1985) (testimony on need
for program and capacity of minority-owned firms); Review of
the 10-Percent Set Aside Program, Section 105(f) of the
Surface Transportation Assistance Act of 1982: Hearings
Before the House Comm. on Small Business, 98th Cong., 2d
Sess. (1984) (testimony on problems faced by DBEs).
On the basis of extensive evidence that the effects of
discrimination continue to hamper the efforts of minority
firms to compete equally in public construction contracting,
Congress has twice reauthorized the program, first in the
Surface Transportation and Uniform Relocation Assistance Act
of 1987 (which also added a provision including women-owned
businesses in the program \1\), and again in 1991 in ISTEA.
In 1987, Congress expressly found that ``barriers still
remain'' to full participation by minorities and women in the
highway and mass transit construction industry. S. Rep. No.
100-4 at 11. The House Committee on Small Business found
``discrimination and the present effects of past
discrimination'' caused minority businesses to receive ``a
disproportionately small share of Federal purchases.'' H.R.
Rep. No. 100-460 at 18 (1987).
---------------------------------------------------------------------------
Footnotes at end of letter.
---------------------------------------------------------------------------
The compelling interest that supported the DBE provisions
of prior legislation still exists today. Congress has
continued through the 1990s to hear testimony and review
statistical evidence supporting the ongoing need for race-
and gender-conscious measures to ensure that minority- and
women-owned firms are not disproportionately excluded from
federally assisted highway and transit projects. For example,
in 1994 the House Committee on Government Operations found
that minority-owned firms face particular difficulties in the
construction industry due to negative perceptions by
commercial lenders and domination of the industry by ``old
buddy'' networks and family firms. H.R. Rep. No. 103-870 at
6-8, 15 & n.36 (1994). One particularly troubling area is
discriminatory treatment in obtaining credit and bonding,
which creates a negative cycle in which minority firms are
unable to overcome their perceived high-risk status. See,
e.g., Discrimination in Surety Bonding: Hearing Before and
Subcomm. on Minority Enterprise, Finance, and Urban
Development of the House Comm. on Small Business, 103d Cong.,
1st Sess. 2-3, 7-9, 16, 18, 25-26, 41 (1993); Availability
of Credit to Minority-Owned Small Business: Hearing Before
the Subcomm. on Financial Institutions Supervision,
Regulation and Deposit Insurance of the House Comm. on
Banking, Finance and Urban Affairs, 103d Cong., 2d Sess.
19-20, 22, 27 (1994). See generally 61 Fed. Reg. 26,042
26,057-26,058 (1996). Congress's examination of these
problems demonstrates quite clearly that discrimination is
in part responsible for the condition of firms owned by
minorities and by women, and that remedial action is still
necessary to ensure that the effects of discrimination do
not prevent minority- and women-owned small businesses
from competing on an equal footing for the federal
expenditures that will be authorized in the new highway
and mass transit bill.
In addition, the ISTEA program is narrowly tailored to meet
the compelling interest identified by Congress. The ISTEA
goals are not quotas, are renegotiated on an annual basis and
are not mandatory. Rather, the program allows recipients the
flexibility to determine the level of DBE participation
appropriate to current local conditions. Moreover, under the
current program, agencies are permitted to waive goals when
achievement in a particular contract, or even for a specific
year, is not possible.\2\
Recent regulations proposed by the Department of
Transportation will further ensure that the ISTEA's DBE
program is operated in a constitutional manner. The new
regulations would require the state or local goal for DBE
participation to be based on an assessment of the
availability and capacity of DBEs in the state or local
construction market. In this way, non-minority firms will not
be unfairly disadvantaged by the use of affirmative action
measures. The regulations also direct states and localities
first to use race-neutral means (such as outreach and
technical assistance, or simplifying bonding or surety costs
in bid requirements) to achieve their goals; where the state
or locality achieves the goal in that manner, affirmative
action measures that provide competitive advantages to DBEs
would be unnecessary. The regulations also bolster provisions
that ensure that firms owned by wealthy individuals will not
be certified as DBEs, and clarify that non-minority
individuals who also have suffered discrimination can be
certified as owners of DBEs and therefore receive the same
benefits that may be available to minority-owned DBEs.
Finally, the new regulations expand methods by which
challenges can be filed by third parties, as well as by state
and local officials, where questions are raised about the
bona fide status of any firm certified as a DBE.
In sum, as we have stated in defending the ISTEA program in
court, the Department of
[[Page S1414]]
Justice believes that the ISTEA program is constitutional.
Sincerely,
Raymond C. Fisher.
footnotes
\1\ Courts have applied intermediate scrutiny to gender-based
affirmative action programs, requiring that such programs
serve important governmental objectives and be substantially
related to achieving those objectives.
\2\ The ISTEA program was addressed in Adarand v. Pena, 965
F.Supp. 1556 (D. Colo. 1997). On appeal, we have argued that
the district court improperly reached the constitutionality
of the ISTEA program.
Mr. BAUCUS. Here is another letter signed by many law school
professors. I see 40 or 50, I don't know. They have the same
conclusion--that the district court's decision in Colorado was wrong;
that is, that the program is narrowly tailored and is constitutional.
Now, if that is not enough, the Department of Transportation has new
regulations, which go even further, and with more flexibility, to make
it even more clear that the program is narrowly tailored. Some Senators
spoke up and said, gee, wealthy people are, under this definition,
socially disadvantaged. Not true under the new regs. They have a net
worth test. If you are wealthy, you don't qualify. There are lots of
new provisions in the new regulations that will go into effect. They
are in the drafting stage now.
Again, just because a district court judge says it is
unconstitutional doesn't make it so. The only thing that does that is a
decision by the U.S. Supreme Court. They haven't ruled on this.
Second, many think the judge is wrong--many. Finally, there are new
regs which are much more flexible and which clearly make this narrowly
tailored. For that reason, this is not unconstitutional because it is
fair and helps people and it works. It should remain in the bill.
Ms. COLLINS addressed the Chair.
The PRESIDING OFFICER. Who yields time?
Mr. CHAFEE. I yield the Senator from Maine such time as she desires.
The PRESIDING OFFICER. The Senator from Maine.
Ms. COLLINS. Thank you, Mr. President.
Mr. President, there is much in the amendment offered by the Senator
from Kentucky that I support. I particularly support its expansion of
outreach efforts designed to help emerging small businesses compete for
Federal contracts.
I think that those specific provisions of the amendment offered by
the Senator from Kentucky would truly be very helpful to a lot of small
businesses regardless of their ownership. Moreover, I share the
opposition of the Senator from Kentucky to numerical quotas. I don't
like the numerical quotas that are in current law. Whether or not they
are constitutionally suspect, they are certainly inflexible, and they
are often unfair.
I am also opposed to creating a permanent entitlement or preference
for businesses based upon their ownership by minorities or women. We
should be providing such businesses a hand up, not a permanent handout.
However, I believe that the amendment offered by the Senator from
Kentucky goes too far. In my view, the programs funded under ISTEA
should include a nonnumerical goal--not a quota, not a 10-percent set-
aside, but a goal aimed at increasing participation by disadvantaged
business enterprises.
Unfortunately, the Senator from Kentucky has indicated that he is
unwilling to alter his proposal in this manner, and, for that reason, I
am going to vote against his amendment.
Mr. President, we all talk about the legalities of this issue. But I
would like to try to put a human face on the matter before us. Let me
tell you of a specific example of the benefits of the Disadvantaged
Business Enterprise Program, a specific case involving a woman from
Maine named Tina Woodman. Tina, in her own words, went from being a
waitress to being an ironworker, to being the president of her own
company. As a matter of fact, I talked with Tina just this afternoon
about her story, with which I was already very familiar.
Tina, after receiving specialized training, was able to go from being
a waitress for 10 years to learning to be an ironworker, to opening up
and becoming president of her own company, Maine Rebar Services. In
fact, she and her company worked this past summer on the Casco Bay
Bridge project in Maine, one of the largest construction projects our
State has ever had.
By building her own business, Tina has not only been able to provide
for her 6-year-old daughter, but for the first time in her life she has
also been able to buy her own home. She told me, and her daughter told
me, that the best part of this was that they could now plant flowers in
their own front yard.
Every time I drive across or see the Casco Bay Bridge, I think of
Tina Woodman, and I think of her daughter and the flowers growing in
their front yard.
All of this wonderful story would never have come about but for the
opportunity given to Tina through the Disadvantaged Business Enterprise
Program. Hers is the kind of success story that this kind of program
can bring about when it is properly applied.
Mr. President, we do need to reform this program. We need to make
sure that it is carefully tailored so as to give people a little bit of
a hand up so that they can participate in the American dream.
For this reason, Mr. President, I am going to reluctantly oppose the
amendment offered by the Senator from Kentucky. I hope, however, that
he and others will be willing to work with me in order to reshape these
programs.
Thank you, Mr. President. I thank the managers of the bill, and I
yield the floor.
The PRESIDING OFFICER. Who yields time?
Mr. McCONNELL addressed the Chair.
The PRESIDING OFFICER. The Senator from Kentucky.
Mr. McCONNELL. I yield such time has he may need to the distinguished
Senator from Washington.
The PRESIDING OFFICER. The Senator from Washington is recognized.
Mr. GORTON. Mr. President, the 14th amendment to the Constitution of
the United States relevant to this discussion reads ``nor shall any
State deny to any person within its jurisdiction the equal protection
of the laws.''
There was over an extended period of time a debate in the Supreme
Court as to whether or not that equal protection clause, applicable by
its terms only to States, applied as well to the Federal Government.
The Supreme Court has decided that question essentially in the
affirmative simply by stating that the fifth amendment to the
Constitution, through its due process clause, incorporates the
philosophy identical to the equal protection clause in the 14th
amendment.
The next debate is over whether or not a nonmember of a minority has
the ability to claim discrimination by reason of a provision like the
one that is at issue here today. The Supreme Court in the Adarand case,
a case already discussed at length during the course of this debate,
says, ``The principle of consistency simply means that whenever the
Government treats any person unequally because of his or her race, that
person has suffered an injury that falls squarely within the language
and the spirit of the Constitution's guarantee of equal protection.''
Finally, with respect to this provision here, the Court in that case
said, ``It follows from that principle that all governmental action
based on race, a group classification, long recognized as in most
circumstances irrelevant and therefore prohibited, should be subjected
to detailed judicial inquiry to ensure that the personal right to equal
protection of the laws has not been infringed. A free people whose
institutions are founded upon the doctrine of equality should tolerate
no retreat from the principle that government may treat people
differently because of their race only for the most compelling reasons.
Accordingly, we hold today that all racial classifications imposed by
whatever Federal, State, or local governmental action must be analyzed
by a reviewing court under strict scrutiny. In other words, such
classifications are constitutional only if they are narrowly tailored
measures that further compelling government interests.''
As against that, what do we have here? The heart of the amendment
proposed by the Senator from Kentucky strikes a section identical to
the present law that says, ``Except to the extent that the Secretary
determines, otherwise not less than 10 percent of the amounts made
available for any program under titles I and II of this
[[Page S1415]]
Act shall be expended with small business concerns owned and controlled
by socially and economically disadvantaged individuals.''
The dual statutory definition of ``disadvantaged'' deals with sex and
with racial minorities.
Mr. President, I do not see that it can seriously be maintained that
a national quota stating ``no less than 10 percent'' can possibly be
justified under that Supreme Court language granting neutral equal
protection of the laws of the United States to every single individual.
Clearly, the Supreme Court allowed a case-by-case evaluation of
disfavored classes, mostly racial minorities, to determine whether or
not they had suffered discrimination and, therefore, required specific
aid in order to catch up and to be put on an equal plane. But nothing
in the portion of this bill which the McConnell amendment would strike
speaks to that kind of consideration. It simply says that all of those
not defined as disadvantaged in our society are absolutely barred and
prohibited from getting certain governmental contracts.
Once again, I read from the Supreme Court decision. ``A free people
whose institutions are founded upon the doctrine of equality should
tolerate no retreat from the principle that government may treat people
differently because of their race only for the most compelling
reasons.''
Not only are there no compelling reasons in this section of this
bill, there are no reasons at all. Simply 10 percent of contracts are
barred from being awarded to any person outside this disfavored class.
Is it any wonder that the district court on remand summarily entered
judgment in favor of the plaintiff in that case? Of course. There is no
possible way of finding this statute to be constitutional.
That district court opinion is now on appeal in the 10th circuit, I
understand. It is possible that the ensuing decision may again be
appealed to the Supreme Court. I would give 20-to-1 odds that the
Supreme Court will simply deny certiorari since the conclusion is so
obvious.
This does not mean that the sponsors of this bill could not have
written in this bill a narrowly tailored specific set of preferences
for people against whom specific discriminatory actions had been taken,
tailoring it to meet the very requirements of the Constitution laid
down by the Supreme Court in a decision, the result of which, it seems
to me, was obvious.
But, Mr. President, the sponsors of this bill did not do that.
Whatever excuse the authors of the previous proposal 5 years ago may
have had, the authors of this bill had none. They know what is required
in order to discriminate. They ignored the views of the Supreme Court.
And they say, we don't care, we are going to continue this flat quota.
This is not the affirmative action about which we have been having a
legitimate debate over whether or not there ought to be certain forms
of assistance provided to disadvantaged people. This is a debate about
the most explicit quota one can possibly imagine and it is simply
irresponsible for us to continue.
If the sponsors of the bill do not like the specific proposal that is
substituted for this quota, proposed by Senator McConnell, fine. Let
them come up with one that meets constitutional muster. I think they
can. It is just that they have simply not done so to this point.
Mr. President, the preceding speaker has talked about what the
advantages of the present system have been, in a simple case. I ask
unanimous consent to have printed in the Record correspondence from a
general contractor, Frank Gurney, Inc., in Spokane, WA.
There being no objection, the letters ordered to be printed in the
Record, as follows:
Frank Gurney, Inc.,
Spokane, WA, October 9, 1997.
Hon. Slade Gorton,
Hart Senate Building,
Washington, DC.
Re McConnell amendment to the D.B.E. program for Federal aid
highway construction.
Dear Senator Gorton: We are a small subcontracting firm in
Spokane, Washington. We specialize in highway guardrail and
signing. More than 95% of our market is Federal, State or
County agency work--funded mostly with State and Federal
moneys. We are writing to you on the issue of Affirmative
Action. We are not a ``woman'' or ``minority'' owned firm--we
are simply Americans. My step-father, Frank Gurney, started
the firm in 1959--my brothers and I working with him to build
the business from nothing. We all worked very hard for a lot
of years to make it a good sound company. Frank Gurney passed
away in 1989 with the Affirmative Action quotas that
discriminated against our Company as the worst nightmare he
had ever experienced and could not overcome. Since Frank
passed away the nightmare of discrimination for our Company
goes on every week at the bidding table as it has for the
last 14 years.
So then please find enclosed correspondence regarding the
years of discrimination our firm has experienced.
Most Prime Contractors refuse to write these letters
because they always fear litigation--they also know that they
are in the middle of government mandated discrimination--that
it is in fact not only Constitutionally wrong but morally
wrong!
Please know that the intent of this letter is to inform you
with our documentation of legislation that No. 1, is very
constitutionally wrong and No. 2, does not work at all as
intended.
Our M.B.E.--W.B.E. competitors in Washington are mainly
Junlo Corp. (D.B.A.)--Asian owned, and Peterson Corp.
(W.B.E.--Woman owned, from Western Washington along with
other out of State M.B.E. firm--Dirt and Aggregate Inc. of
Oregon (? owned), Alexander--Martin of Boise, Idaho (W.B.E.)
Women owned--Omo Construction of Billings Montana--M.B.E.
(Indian owned). We compete with these firms at the bidding
table here in the Northwest nearly every week. They are all
strong well run firms that have been in business long before
the era of Mandatory quotas. We welcome them as competitors
on equal footing, but the D.B.E.--M.B.E. quotas in Federal
and State funded projects is an unfairness that is very, very
hard to overcome. They are larger firms than ours--they need
no help--yet they continue to enjoy that advantage of being
awarded work that they are not low bidder on simply because
of M.B.E.--D.B.E. quotas in government contracts.
We have realized long ago that Affirmative Action attitudes
are strongly entrenched in our government--and you as a
politician (until possibly now) would view your vote against
Affirmative Action as possible ``political suicide''
regardless of your inward belief--it just ``seems so right''
but is so wrong!
We like all conscientious Americans are very much in favor
of helping the truly disadvantaged but reverse discrimination
and quotas are not the way!!!
The thousands of dollars that our firm was low bidder on
through the years could have easily paid for a teacher that
would give 25 disadvantage minority children the economic,
social and academic headstart that would help them to become
responsible mainstream American citizens--but instead those
dollars simply lined the pockets of a few that did not need
help at all.
It is true--simply look into it with the Washington State
Department of Transportation. We of course do not have access
to exact numbers but we are most certain that if you were
informed of the truth you would find less than 5% of
registered M.B.E.--W.B.E. firms in Washington are doing more
than 95% of the quota dollars and that most of these firms
doing 95% of the dollars should have graduated from the
program long ago--but they remain in the program simply
because they are unchallenged. There is no course of action
allowing the Washington Department of Transportation, The
Idaho Transportation Department, or the Montana Department of
Transportation or anyone else to challenge them. They are the
same firms--week after week--month after month--year after
year that fill the quota requirements. These firms then
squeeze out and suffocate other smaller minority owned firms
that try to get started. After an on going gift of 14 years--
the large and established minority owned firms can and do
price the small ``Trying to get going'' minority firm out and
it is usually does not take very long at prices below cost to
do so. So then none of the Department of Transportation want
these larger firms out of their programs because they are
needed to comply with the legislative quotas that come with
Federal Dollars. We on the excluded side of this program are
an exact mirror of the ``Adarand'' guardrail firm in Colorado
which now is the focus of the Supreme Court ruling--and until
now we all know that the courts of America have strongly
ruled in favor of M.B.E.--W.B.E. regardless of the nature of
litigation. Litigation that no small company such as ours
could ever afford without financial ruination--which would
occur before a challenge could ever be heard.
We are not insinuating that anyone in the Department of
Transportation or any other agency is doing anything wrong--
in fact they are simply doing their job carrying out the
wishes of Congress. We are simply trying to display the poor
investment of tax dollars under the stewardship of Congress
that does not do as it was intended and is compounded with
promulgating more discrimination--that very same
discrimination that our country is trying to abate!!!
Our firm is not unlike any other small white male owned
firm in America that suffer daily from the discrimination
promulgated by the government of the United States in its
contracting policies.
We believe that God created us all equal. The Constitution
of the United States--the
[[Page S1416]]
most powerful document of democracy the world has ever known,
clearly was written by our Founding Fathers--that is God
created all men equal then it follows that the document of
the Constitution would be so written that is govern all men
and women under it as equals. So then why are we not being
governed equally? Our government now has preferences based on
race and color--the Government has simply uprooted and set
the Constitution aside and entered the business of
discrimination.
It is wrong.
We, again would like to affirm that we are simply
displaying our experience so that indeed you may be informed
with knowledge of the reality regarding this very difficult
issue--thus the attached sampling of correspondence from our
very large files. We love our Country--we pay our taxes and
we play by the rules. We, again, do believe in helping the
truly disadvantaged and would and do very much support
programs that do so--but mandatory goals and quotas are again
simply not the way.
Sincerely,
Thomas Stewart,
President.
____
Steelman-Duff, Inc.,
Clarkston, WA, July 17, 1996.
Mr. Tom Stewart
Frank Gurney, Inc.
Spokane, WA.
Re Contract no. 4916, East Lewis Street Interchange.
Subject: Quote.
Dear Tom: This letter is written as per our conversation
regarding your recent quotation on subject project. I had
informed you that you were apparent low quote on bid items
72, 73, 74 and 75, but due to MBE and WBE goals I could not
utilize you. Your quote on the above bid items amounted to
$29,031.27. Petersen Brothers, a WBE firm quoted $31,902.00
for the same work. I was forced to utilize the WBE firm as
the difference in your two quotes was very small and created
the least amount of inflation to meet assigned goals.
We thank you for your quote and understand your situation.
We are forced to inflate our bids to cover added costs on all
Federal, State, County and City projects that have DBE, MBE
or WBE goals assigned. This particular project the added cost
ranged in the vicinity of $20,000.00.
We trust you understand and if added information is needed,
please contact us.
Very truly yours,
Wayne L. Van Zante,
Vice President.
____
Associated Sand &
Gravel Co., Inc.,
Everett, WA, April 7, 1981.
Frank Gurney Inc.
Spokane, WA.
Re State highway bid for SR 90, Tyler to Salnave Road, bid
date April 1, 1981.
Gentlemen: We acknowledge receipt of and we thank you for
your guard rail quotation for subject project.
While your bid was lower than the quotation we used in
preparing our bid, we were obligated to use the higher
quotation to satisfy the 6% Minority Business Enterprise goal
as set forth in the specifications for subject project.
While we were unable to use your lower price quotation, we
trust you will continue to quote prices to our firm on future
projects.
Very truly yours,
Jack Zeigler,
Chief Estimator.
____
Robert B. Goebel
General Contractor, Inc.
Spokane, WA, April 25, 1996.
Frank Gurney, Inc.
Spokane, WA.
Attn: Tom Stewart.
Re Laurier Bridge replacement, Stevens County, WA, CRP-601A;
BROS-2033 (018); 5A-2802.
Gentlemen: We were apparent low bidder at $1,393,851.00 on
the referenced project which bid on 4/23/96 at 11:00 AM.
We received two bids from guard rail subcontractors:
(1) Gurney: $29,598.00.
(2) Petersen Brothers (DBE): $34,745.25.
As you know, there was a 10% DBE requirement in the
solicitation documents, which amounted to just under
$140,000.00. Even though you were significantly lower than
Petersen Brothers, we regret to inform you that we felt
compelled to use their amount to help achieve our DBE goal.
Sincerely,
Steven R. Goebel.
____
Gilman Construction,
May 1, 1995.
Frank Gurney Inc.,
Spokane, WA.
Attn: Tom Stewart.
Re Monida-Lima.
Dear Tom: We would like to thank you for your guard rail
quotation on the Lima-Monida Project. Although you had the
low guard rail quotation, we were forced to use a higher
quotation to meet our DBE requirements.
Listed below are the guard rail prices we received on the
project:
Frank Gurney, Inc.--142,906.45.
Omo Construction, Inc.--150,351.55.
Scott Long Construction--151,278.00.
Once again, we would like to thank you for your quotation
and hope you will continue to quote any future work.
Sincerely,
George M. Friez,
Engineer.
____
Westway Construction, Inc.,
Nine Mile Falls, WA, June 28, 1995.
Frank Gurney, Inc.,
Spokane, WA.
Attn: Tom Stewart.
Re: SR 27 & 23 bridge rail update/bridge replacement.
Tom: We regret we cannot use your quotation for this
project. Although your price for the guardrail items was
$2000.00 lower than Petersen Brothers, we were unable to use
you as we needed Petersen to meet our DBE goal.
Sincerely;
Mark Johnson,
Estimator.
____
Frank Gurney Inc.,
Spokane, WA, October 29, 1997.
Senator Slade Gorton,
Hart Senate Building,
Washington, DC.
Dear Senator Gorton: Please find another letter of
rejection attached that we just received today from Inland
Asphalt Company of Spokane. Peterson Bros. is a well run
firm--larger than ours--that is--and has--for 15 years--
benefited from your discriminatory ``Quota'' affirmative
action policies and legislation. We are not crying ``Sour
Grapes'' or ``Belly Aching'' we simply are again wondering
how you would feel if this were you in receipt of letter
after letter of this rejection (our file has many of them--
dating throughout 16 years) How would you feel about
displaying this letter to your employees and your family. How
do I tell my sons--who work in the company--and my employees;
not to hold prejudice? I don't know--I only know I really
don't know--I only know that it is wrong! Very Very wrong--
yet promulgation of this wrong continues in America by our
Government. It surely seems that the very discrimination that
you as government are trying to abate simply continues with
you at the top of the list as its greatest advocate. We
expect as usual no response--of course realizing we are the
``down side'' of the ``greater good''--regardless of right or
wrong.
Sincerely,
Thomas C. Stewart,
President.
____
Inland Asphalt Co.,
Spokane, WA, October 27, 1997.
Tom Stewart, P.E.,
Frank Gurney, Inc.,
Spokane, WA.
Dear Tom: I regret to inform you that although yours was
the lowest guardrail quote that I received for the WSDOT
Project SR 26 to Lind Coulee Bridge, I found it necessary to
use the third lowest guardrail quote in order to meet the DOT
requirement of 10% DBE. The second low guardrail quote was
from Coral Construction Company but they also are not a DBE
firm. The third lowest quardrail quote and lowest DBE
guardrail quote came from Petersen Brothers, Inc. (DBE/WBE
#D2F0901575). By using Petersen Brothers, Inc., along with
DBE traffic control and planing, we were able to just barely
meet the 10% DBE requirement at a cost of $11,768.76 to the
project.
We at Inland Asphalt Company think highly of the
professionalism and quality of work that we have always
received from Frank Gurney, Inc. I hope that this does not
discourage you from quoting us on future projects.
If you have any questions, please call me at 536-2631.
Sincerely,
Lee T. Bernardi,
Project Manager.
Mr. GORTON. This illustrates what happened in the real world. It
includes a half dozen responses to this small business company with
respect to contract submissions in which it was the low bidder, in
which the general contractor says, we would like to have picked you, we
would have saved money for the taxpayers had we picked you, but we
cannot pick you because of absolute orders from the Department of
Transportation because of a quota system.
Ironically, the winning high bidders in several of these contracts
are larger business enterprises than is Frank Gurney, Inc., with a
longer history. The net result is fewer roads are built and improved in
order to provide contracts for people less disadvantaged than the low
bidder. That is the real world impact of what we have done here.
The Senator from Kentucky knows that we have certain disagreements
over what the affirmative language in his amendment should have
included. I would have done it somewhat differently. But I am here
because I believe that the fundamental approach he has taken to strike
an express percentage racial quota is not only the only appropriate
response under the Constitution but is the only appropriate,
[[Page S1417]]
just response in a society based on the proposition that people deserve
equal treatment and only equal treatment.
Mr. President, it seems to me that this is an open-and-shut case. We
should repeal the sections to be stricken here. If a majority of this
body believes in a form of affirmative action, then it should devise a
form of affirmative action that meets the strict-scrutiny standards set
down by the Supreme Court and does not include a quota system that is
entirely unrelated to whether or not its beneficiaries have ever
suffered any discrimination whatsoever.
The PRESIDING OFFICER. The Senator from Kentucky.
Mr. McCONNELL. Mr. President, there are many lawyers in the Senate,
some out in the land believe too many. But it is my judgment that the
finest lawyer in the Senate is the Senator from Washington. I thank him
for his clear explanation of what the law demands in this situation.
No effort by the other side to obscure the obvious, it seems to me,
should fool anyone. The Senator from Washington has laid it out with
extraordinary clarity. This provision in the bill before us is
unconstitutional. I thank the Senator from Washington for his support
of the Constitution.
Mr. President, a number of the opponents of the amendment have said
they know discrimination exists in this kind of economic activity
because the numbers of minority participants have dropped in Michigan
and in Louisiana. Colleagues have lamented the loss of the DBE programs
in those two States, Louisiana and Michigan, but what they fail to
point out was that those DBE programs were terminated based on court
decisions that held that the preferences were unconstitutional, and
that is, of course, precisely what we are discussing here today, the
constitutionality of these kinds of race-based set-asides.
Even the Department of Transportation has quietly conceded that
disparity figures do not prove discrimination. Let me share this quiet
concession buried in the jungle of Federal regulations. The
administration notes that:
Minority firms may receive less work because of the
following reasons: Lack of interest in the work, other
commitments, limitations of the amount of work they can
handle or lack of qualifications, especially where a State
spends a large portion of its funds on a single large project
requiring special contractors.
There has been some suggestion by those opposing the amendment that
the Adarand case not only wasn't determinative of the race-based set-
aside in this bill, but it somehow is an isolated case. The
Congressional Research Service has found no--I repeat no--court ruling
after a trial where a race-based contracting program has met the
Supreme Court test of strict scrutiny. Let me say that one more time.
There has been an effort to portray the Adarand case as kind of an
aberration, or actually not determinative, not really on point. The
fact of the matter is it is just one more in a whole series of cases
indicating that these kinds of race-based programs are
unconstitutional. In fact, CRS has explained that Adarand conforms to a
pattern of Federal rulings across the country, striking down race-based
contracting programs as unconstitutional. Let me just mention some of
them: Associated General Contractors of California v. San Francisco.
That was in the ninth circuit. Michigan Road Builders Assoc. v.
Milliken, which was in the sixth circuit; Groves & Sons Co. v. Fulton
County, which was in the seventh circuit; Associated General
Contractors of Connecticut v. New Haven; O'Donnell Construction Company
v. the District of Columbia, in the D.C. circuit; Arrow Office Supply
v. Detroit, a Michigan case; Louisiana Associated General Contractors
v. Louisiana, Associated General Contractors of America v. Columbus;
Engineering Contractors Ass'n of South Florida v. Metropolitan Dade
County in the 11th circuit; Contractors Ass'n of Eastern Pennsylvania
v. Philadelphia, in the third circuit; Monterey Mechanical v. Wilson in
the ninth circuit, just last September; Houston Contractors Association
v. Metropolitan Transit, which is in the Southern District of Texas,
November 13 of last year, 1997.
Quoting from the Houston Contractors case, right out of the case, the
District Court for the Southern District of Texas, the court said:
Because race is inescapably arbitrary, basing governmental
action on race offends the American Constitution.
The court went on to say:
Assigning governmental benefits to people by their skin
color does not quit being arbitrary because the advocates
claim that a program has a progressive purpose; a principle
wrong for Eugene Talmadge is wrong for Jesse Jackson.
The court went on to say:
Nothing about transportation depends upon the race of the
person--not employees, officers, taxpayers, riders,
suppliers, or contractors.
It has been suggested that these are all sorts of lower court
decisions and somehow they are off on their own or something, not
following the mandate of the Supreme Court.
In the Croson case, way back in 1989, the Court said that:
. . . a generalized assertion that there has been past
discrimination in an entire industry provides no guidance for
a legislative body to determine the precise scope of the
injury it seeks to remedy. It ``has no logical stopping
point.''
The Court went on to say:
``Relief'' for such an ill-defined wrong could extend until
the percentage of public contracts awarded to MBE's in
Richmond mirrored the percentage of minorities in the
population as a whole.
Appellant argues that it is attempting to remedy various
forms of past discrimination that are alleged to be
responsible for the small number of minority businesses in
the local contracting industry. Among these the city cites
the exclusion of blacks from skilled construction trade
unions and training programs. This past discrimination [the
Court said] has prevented them ``from following the
traditional path from laborer to entrepreneur.'' [That is the
city talking.] The city also lists a host of nonracial
factors which would seem to face a member of any racial group
attempting to establish a new business enterprise, such as
deficiencies in working capital, inability to meet bonding
requirements, unfamiliarity with bidding procedures, and
disability cased by an inadequate track record.
While there is no doubt that the sorry history of both
private and public discrimination in this country has
contributed to a lack of opportunities for black
entrepreneurs, this observation, standing alone, [standing
alone] cannot justify a rigid racial quota in the awarding of
public contracts in Richmond, Virginia. . . . [A]n amorphous
claim that there has been past discrimination in a particular
industry cannot justify the use of an unyielding racial
quota.
It is sheer speculation how many minority firms there would
be in Richmond absent past societal discrimination, just as
it was sheer speculation how many minority medical students
would have been admitted to the medical school at Davis
absent past discrimination in educational opportunities.
Defining these sorts of injuries as ``identified
discrimination'' would give local governments license to
create a patchwork of racial preferences based on statistical
generalizations about any particular field of endeavor.
So the Court concluded:
The 30% quota cannot in any realistic sense be tied to any
injury suffered by anyone.
So the Court said:
We, therefore, hold that the city has failed to demonstrate
a compelling interest in apportioning public contracting
opportunities on the basis of race. To accept Richmond's
claim that past societal discrimination alone can serve as
the basis for rigid racial preferences would be to open the
door to competing claims for ``remedial relief'' for every
disadvantaged group. The dream of a Nation of equal citizens
in a society where race is irrelevant to personal opportunity
and achievement would be lost in a mosaic of shifting
preferences based on inherently unmeasurable claims of past
wrongs. ``Courts would be asked to evaluate the extent of the
prejudice and consequent harm suffered by various minority
groups. Those whose societal injury is thought to exceed some
arbitrary level of tolerability then would be entitled to
preferential classifications. . . .'' We think such a result
would be contrary to both the letter and spirit of a
constitutional provision whose central command is equality.
The Court went on:
There is absolutely no evidence of past discrimination
against Spanish-speaking, Oriental, Indian, Eskimo or Aleut
[Indian] persons in any aspect of the Richmond construction
industry. . . . It may well be that Richmond has never had an
Aleut or Eskimo citizen [the Court said]. The random
inclusion of racial groups that, as a practical matter, may
never have suffered from discrimination in the construction
industry in Richmond suggests that perhaps the city's purpose
was not in fact to remedy past discrimination.
If a 30% set-aside was ``narrowly tailored'' to compensate
black contractors for past discrimination, one may
legitimately ask why they are forced to share this ``remedial
relief'' with an Aleut citizen who moves to
[[Page S1418]]
Richmond tomorrow? The gross overinclusiveness of Richmond's
racial preference strongly impugns the city's claim of
remedial motivation.
Mr. President, even if by way of some disparity study mirror this
administration could show a finding of specific, pervasive
discrimination in the highway contracting arena, the administration
would still be unable to show that the ISTEA quota is narrowly tailored
to remedy that alleged past discrimination. ISTEA and the DBE Program
funnels not less than 10 percent of Federal highway funds to
disadvantaged business enterprises. The Government presumes that an
individual is disadvantaged if that individual can trace his or her
roots to one of over 100 different countries. These countries range
from Argentina to Spain and Portugal to Sri Lanka and Madagascar to
Japan and to the Fiji Islands.
Just look at the map I have to my right. If you are from one of the
countries with a ``P'' on it--it is probably hard for people to see--
you are in the preferred group. Look at the worldwide web of
preferences that we have created, and who can figure out this web? If
you happen to be from these countries, you get a preference. If you
happen to have emigrated from some other country, you do not.
If you are so unfortunate as to be from Poland, you are out of luck;
you actually have to compete and win on the merits. But if you are from
Pakistan, you are in the preferred group.
If you are from Nigeria, you are disadvantaged, but if you are from
Algeria, you are not disadvantaged.
If you are from Spain or Portugal, you are disadvantaged, but if you
are from Bosnia, you are not disadvantaged.
If you are from Israel, you are not disadvantaged, but if you are
from Pakistan, you are disadvantaged.
If you are from China or Japan, then you get a preference, but if you
are from Russia, sorry, you don't get a preference.
If you are from the Fiji Islands, it is your lucky day; you win the
preference prize. But if you are from New Zealand or are an Australian
Aborigine, you lose; you are not disadvantaged.
In the Adarand case, the plaintiff explained this overbreadth problem
to the Supreme Court. Specifically, the plaintiff's lawyers stated in
oral argument:
We have a situation here where a Hong Kong banker, a
Japanese electrical engineer, or the son of landed gentry
from Spain could come to Colorado Springs and . . . [run] a
[Disadvantaged Business Enterprise].
And, in fact, the district court in Adarand agreed the DBE program is
so overly broad that it violates not only common sense, but it violates
the Constitution. Indeed, under these standards, as Senator Ashcroft
and others have mentioned, the Sultan of Brunei would qualify as
disadvantaged.
By the way, let me tell you a little about our friend, the
disadvantaged sultan. This is a man who has an estimated $40 billion
fortune, making him the wealthiest monarch in the world. He lives in a
sprawling palace, which you can see reflected in this picture, the
palace of the Sultan of Brunei. This palace has 22-karat gold-plated
mosque domes and 37 types of marble. He has 150 Rolls Royces. And if
that is not enough, the sultan keeps his prize thoroughbred horses in
hundreds of air-conditioned stables.
So, the sultan could leave his estate in Brunei, forsake his Rolls
Royces, abandon his horses in their air-conditioned stables, and then
move to my home State of Kentucky and get a bid preference as a DBE
over a contractor from the hills of Appalachia. Mr. President,
something is wrong with this picture.
In 1980, Justice Stewart poignantly explained what was wrong with
this picture. To quote Justice Stewart directly, Congress has
``necessarily paint[ed] with too broad a brush.''
He said:
In today's society, it constitutes far too gross an
oversimplification to assume that--
And this was in 1980--
every single Negro, Spanish-speaking citizen, Oriental,
Indian, Eskimo and Aleut potentially interested in
construction contracting currently suffers from the effects
of past or present racial discrimination. Since the . . .
set-aside must be viewed as resting upon such an assumption,
it necessarily paints with too broad a brush. Except to make
whole the identified victims of racial discrimination, the
guarantee of equal protection prohibits the government from
taking detrimental action against innocent people on the
basis of the sins of others of their own race.
Congress has a substantial burden of ``inquir[ing] into whether or
not the particular [entity] seeking a racial preference has suffered
from the effects of past discrimination.''
This is what they were talking about in the Croson case, a Supreme
Court case.
Again, let me quote the Supreme Court:
The random inclusion of racial groups, that as a practical
matter, may have never suffered from discrimination in the
construction industry . . . suggests that perhaps the . . .
purpose was not in fact to remedy past discrimination . . .
The gross overinclusiveness of [a government's] racial
preferences strongly impugns the . . . claim of remedial
motivation.
If there is no duty to attempt either to measure the
recovery by the wrong or to distribute that recovery within
the injured class in an evenhanded way, our history will
adequately support a legislative preference for almost any
ethnic, religious or racial group with the political strength
to negotiate ``a piece of the action'' for its members.
Again quoting Croson.
Or, as the Fifth Circuit Court of Appeals recently explained in
striking down racial preferences:
A broad program that sweeps in all minorities with a remedy
that is in no way related to past harms cannot
survive constitutional scrutiny.
Hopwood v. the State of Texas.
As I have explain today, the Government has placed the stamp of
disadvantaged on a stupefying array of groups--groups and individuals
that are not similarly situated.
As Professor LaNoue has explained:
Some of the groups on the presumptively eligible list have
been in this country since its beginning; some are very
recent arrivals. Some are relatively poor; some are
relatively affluent. Some have very high rates of business
formation; some are very low. Some have well-documented
histories of discrimination; some are virtually invisible.
Again quoting Justice Stevens:
The statutory definition of the preferred class includes
``citizens of the United States who are [black], Spanish-
speaking, Orientals, Indians, Eskimos and Aleuts.'' . . .
There is not one word in the remainder of the Act or in the
legislative history that explains why any Congressman or
Senator favored this particular definition over any other or
that identifies the common characteristics that every member
of the preferred class was believed to share. Nor does the
Act or its history explain why 10 percent of the total
appropriation was the proper amount to set aside for
investors in each of the six racial subclasses.
In summary, as numerous speakers have said, the DBE program is not
narrowly tailored. As the district court concluded in Adarand just this
last summer, directly from the court:
I find it difficult to envisage a race-based classification
that is narrowly tailored. By its very nature, such a program
is both underinclusive and overinclusive. This seemingly
contradictory result suggests that the criteria are lacking
in substance as well as in reason.
Or as the Supreme Court held in Croson, a program is unconstitutional
where ``a successful black, Hispanic or Oriental entrepreneur from
anywhere in the country enjoys an absolute preference over other
citizens based solely on their race. We think it obvious that such a
program is not narrowly tailored to remedy the effects of prior
discrimination.
I cannot imagine how the courts would spell this one out any clearer
for us. This program is not designed to remedy past discrimination, it
is not narrowly tailored by any stretch of the imagination, and it is
plainly and clearly, as the distinguished Senator from Washington so
eloquently put it a few moments ago, not constitutional.
Mr. President, I yield the floor.
Mr. CHAFEE addressed the Chair.
The PRESIDING OFFICER. The Senator from Rhode Island.
Mr. CHAFEE. Mr. President, I know the distinguished Senator from
Illinois wishes to speak, and I will be very brief in commenting.
I have listened to the learned Senator from Kentucky speak this
afternoon. He spent a lot of time on the Adarand decision. The only
thing we ought to stress about the Adarand decision is that the Adarand
decision was a 5-4 decision that did not find that affirmative action
is not possible to have in our country. Indeed, I will give you a
couple of quotes from--I like to go to the Supreme Court. I am not big
on
[[Page S1419]]
district courts and circuit courts. Yes, they are nice, but I like to
go to the top and see what the top people have to say. This is what
Justice O'Connor said:
It is not true that strict scrutiny is strict in theory but
fatal in fact. Government is not disqualified from acting in
response to the unhappy persistence of both the practice and
the lingering effects of racial discrimination against
minority groups in this country.
Later on, Justice O'Connor stated for the majority:
When race-based action is necessary to further a compelling
interest, such action is within constitutional constraints if
it satisfies the narrow tailoring test.
So it can be done, and affirmative action is not unconstitutional. If
that is the implication that is derived from the remarks of the Senator
from Kentucky, I say it is just plain not accurate.
Mr. BAUCUS. Mr. President, I yield 20 minutes to the very
distinguished Senator from Illinois, Ms. Moseley-Braun.
The PRESIDING OFFICER. The Senator from Illinois is recognized for 20
minutes.
Ms. MOSELEY-BRAUN. Mr. President, thank you. I rise in strong
opposition to the pending amendment that would dismantle the Department
of Transportation's affirmative action programs and roll back 15 years
of gains that have been made by minority and women contractors.
The Department of Transportation's DBE program, Disadvantaged
Business Enterprise Program, ensures that small women- and minority-
owned companies have the opportunity to participate in the Federal aid
highway program. It does not guarantee anything; it simply allows an
opportunity to compete. It levels the playing field, giving small and
women-owned businesses and minority-owned businesses an equal
opportunity to submit winning bids. The DBE program is fair; it is
necessary, and it works.
This program--and let me suggest another way to look at this issue,
Mr. President--the DBE program is no more and no less than a structural
response to a structural distortion of our society, a distortion that
is caused by 200 years of slavery and segregation and, frankly, the
status of women and an age-old tradition that set women apart as
second-class citizens as well. It responds to the unfortunate but
obvious fact that our society was constructed on the traditional
station of women and minorities.
Women do not earn 75 percent of the earnings of men who have the same
jobs because they are 25 percent less competent or because they pay 25
percent less for food. African Americans are not proportionally poorer,
sicker, more imprisoned, or less educated because of accident but,
again, because of those distortions created in today's society by those
institutional structures that were crafted centuries and decades ago.
The DBE program addresses these underlying realities. It helps to
weave thousands of small businesses into the fabric of our economy and
our society. It creates for us a stronger Nation. A society that taps
the talent of 100 percent of its people is a stronger society because
it can draw on a broader pool of talent. A community that gives all of
its members a chance to contribute to the maximum extent of their
abilities is a stronger community because it benefits from a broader
range of contributions.
America is never so magnificent as when she reflects her nobler
tradition. Justice and equality, opportunity based on merit and
capacity--these are among some of the defining values of our country,
and these values are reflected in this DBE program.
The debate over the DBE program has so far been characterized by
distortion of the structure and the results of the program. I have
heard more than a few in the debate this afternoon. The facts are, it
is a fair program that operates within the bounds of the Constitution.
It has worked well, and it has created opportunities for thousands of
minority- and women-owned businesses.
I have heard a lot of conversation about the constitutionality. I
point out, Mr. President, if you read the Constitution of the United
States--and here is a copy. I took Senator Byrd's advice and I carry
mine around with me. If you read article I, it is very clear that
Americans of African descent were not citizens of this great country
when the Constitution was written. Similarly, women were not voters of
this country when this Constitution was written. Americans of African
descent did not receive the rights of citizenship until the passage of
the 14th and 15th amendments in 1868, and women were not enfranchised
to vote in this country until this century, until 1920, with the
passage of the 19th amendment. But ours is a living Constitution. And
it is a Constitution that changes over time to reflect the realities of
the community as a whole, to keep the core values as it adjusts to
changes in the makeup and composition and demographics of the country.
This Constitution has lived so long precisely because it responds to
distortions in our society, precisely because it adapts itself to the
realities of the time, and because it continues to reflect those core
values that bring us together and make us all Americans. And the fact
of the matter is that this legislation is constitutional, as has been
discussed on this floor.
In 1982, Mr. President, Congress established a national goal for at
least 10 percent of Federal highway and transit project funds to be
expended with small businesses owned and controlled by socially and
economically disadvantaged people.
In 1987, Congress extended this initiative to include women-owned
businesses. And in 1991, the program was first included in ISTEA, which
is, of course, the legislation that is sought to be amended today.
President Reagan signed the 1982 and 1987 measures into law; and
President Bush signed the 1991 legislation, again, to bring women, to
bring minorities into the economic mainstream of our country.
I will make one other point. This is another digression. But I have
listened to the debate today. And even on the screen when this gets
broadcast on C-SPAN, it says, ``Amendment re minorities.'' This
legislation is not just about minorities, Mr. President. It is about
women as well. And we need to make certain that every person who
listens to this debate understands that by casting it just in terms of
minorities, it changes the focus of the debate, it becomes a subterfuge
for a set of buzzwords that, frankly, in my opinion, do not reflect
well on this Senate and on this debate.
Under the Federal DBE program, State and local governments work to
achieve goals they set for themselves based on the ability of qualified
disadvantaged businesses in their areas, without quotas, without set-
asides, and without penalty if they fail to meet their goals after
good-faith efforts.
In 1996, most States set 10 percent goals for themselves. Some States
set higher goals, up to 14 and 16 percent. Only three States failed
altogether to achieve their DBE goals in 1996. And only two States
failed to reach 10 percent. Most States exceeded their DBE goals, in
some cases by large margins.
In my home State of Illinois, which set a 10 percent goal for itself
in 1996, 15 percent of its highway construction funds were awarded to
DBEs. Again, you are talking all minorities, you are talking all women.
So you are really talking about a majority minority set-aside, if you
think about it, because if you take women as a proportion of the
population, you take minorities, all of them as a proportion of the
population, what you really have is a majority of the population.
Again, this legislation simply seeks to address a structural distortion
in which that majority of the population participates at an unduly low
and restrictive level of our economic activity.
The DBE program is flexible in its work. In 1980, DBE participation
in Federal highway construction was only 3.6 percent--again for the
majority of the population of this country. Only 3.6 percent of the
contracts given out by the Federal highway construction efforts were
for DBEs.
DBEs realized small gains over the next couple years when the
Department of Transportation encouraged participation. Sharp gains were
made, however, after Congress put the program into the law in 1982. DBE
participation climbed to almost 17 percent in 1984, and it has hovered
around 15 percent ever since.
Now, who are the disadvantaged business enterprises? In 1996, DBEs
again received slightly less than 15 percent of
[[Page S1420]]
the Federal-aid highway construction money. Of that small slice, again,
here we are--14.8 percent. This is everybody. These are women,
minorities, Hispanics, Asians, Native Americans --these are all the
majority minority of the population that is described as ``minorities''
in the debate. They got all of 14 percent of Federal highway spending.
Remember, we are all taxpayers now. Everybody is in the pool putting
money in to make this happen, but 14 percent went out to women- and
minority-owned businesses in 1996. And 85 percent went to the
traditional white male business owners.
Now that is just the reality. This is not about taking anything away
from anybody. But it has to be said, and in very clear terms. Here is
everybody else. This is the traditional economics. This is a reflection
of an attempt to address a distortion in our society that comes out of
the tradition of excluding women and minorities. The exclusions are no
longer there, but inclusion has not yet happened. Integration has not
yet happened. And that is why this debate is so vitally important.
Let us take a look for a moment at the division within this 14.8
percent. African Americans are 14 percent of the 14 percent. Native
Americans are 9 percent of the 14 percent. Asian Americans are 3
percent; Asian Pacific, 3 percent of the 14 percent; Asian Indian, 3
percent of the 14 percent. And we are not talking about the Sultan of
Brunei either. He is not involved with any of this. We are talking
about citizens of this great country. Hispanic Americans, 20 percent of
this 14 percent. But look at this, Mr. President, 51 percent--51
percent--of this 14 percent are women-owned businesses.
I ask the question why 50 percent of the conversation that has been
going on this afternoon has not talked about the impacts on women that
this repeal, if it is successful, will cause?
So the DBE program then redresses gender discrimination as much as it
does lingering racial imbalances. It provides economic opportunities
for businesses and entrepreneurs who would otherwise be shut out of the
construction industry. I have received a number of letters from DBEs
urging me to oppose this effort to repeal the program, letters from
women and minorities who own and operate small business, small
construction firms in all corners of Illinois.
Their letters ask for the continued opportunity to compete. They
drive home the point that the DBE program is not about taking contracts
away from qualified male-owned businesses and handing them to
unqualified female-owned firms. The program is not about denying
contracts to Caucasian low-bidders in favor of higher bids that happen
to have been submitted by Hispanic or African Americans or Asians or
women.
Instead, this program is about creating a climate of competition that
brings everybody in. That is what all these business owners in Illinois
want, the opportunity to compete. They want a level playing field in
which to make the case that they can do the best job for the taxpayers
for the least amount of money. They just want a fair chance.
Listen to a letter from Sharon Arnold, who is president of SSACC,
Inc., a certified women-owned disadvantaged business enterprise in
Pontiac, IL:
I know that without the [DBE] program I would lose the
opportunity to compete. That is all this program does for me;
it gives me the opportunity to compete.
Ms. Arnold started her construction firm in 1986, the year before
Congress added women to the DBE program. She writes that at the time
``I was certain I had made the biggest mistake of my life. Contractors
who I had been working with in the bidding process [as a former
employee at another construction firm] had no interest [at all] in what
I was trying to accomplish . . . Now, the reality is, they still don't
care unless my . . . prices are the lowest. In this program competition
is the name of the game.''
Mr. President, that is the basic concept of the DBE program. Low bids
still get the contracts. The program does not create special
preferences for more expensive or less qualified bidders. It does not
increase the cost of highway construction.
The General Accounting Office has in fact examined this issue and
concluded that the program results in less than a 1 percent increase in
construction costs--1 percent, Mr. President--to begin to correct some
structural distortions that everybody here in this room and certainly
everybody in this country knows we have to be able to correct and
resolve.
All the DBE program does is open doors. Again, listen to Victor
Wicks, President of Wicks Construction Services in southern Illinois.
This is a man.
The DBE program is an economic development program for both
minority- and women-owned businesses. The program merely
levels the playing field for minorities and women and affords
them an equal opportunity to compete for federal construction
dollars. . . . All we are asking for is a fair chance--an
equal opportunity--a level playing field, for all Americans.
That is what the DBE program provides for Mr. Wicks and the rest of
the thousands of qualified disadvantaged businesses across this
country.
Mr. President, there has been some debate over whether the DBE
program is constitutional in light of the Supreme Court decision in the
case of Adarand Constructors v. Pena. Some of my colleagues have
asserted that the Senate must ``bring ISTEA into compliance with
Adarand and the Constitution.''
The fact is, the Senate need not do anything except extend current
law in order to keep ISTEA in compliance with Adarand and the
Constitution. The DBE program was not declared unconstitutional. On the
contrary, the Supreme Court wrote the Federal Government must subject
affirmative action programs to ``strict scrutiny,'' meaning that the
programs must be ``narrowly tailored'' to meet a ``compelling
government interest.''
The Court, in fact, explicitly stated that affirmative action is
still a necessary function of our Government. And it wrote:
The unhappy persistence of both the practice and the
lingering effects of racial discrimination against minority
groups in this country is an unfortunate reality, and the
government is not disqualified from acting in response to it.
Mr. President, the ``lingering effects of racial discrimination'' of
which the Court spoke are exactly the distortions in our society that I
referenced earlier. Racism and sexism are indeed unhappy, but still
very real, phenomena in our society. The DBE program is one of our
responses to those lingering effects, and it works.
Anyone who thinks there is not a ``compelling government interest''
to justify the DBE program need only to look at the States that do not
have them in place for their State-funded highway construction
programs.
Data from these States provide side by side comparisons of two
construction programs within each State--the Federal-aid highway
program, which includes a DBE initiative; and those States' own highway
programs for non-Federal-aid highways, which do not include DBE
programs.
I want you to consider the following examples from fiscal year 1996.
In Arizona, DBEs received only 3.8 percent of State-funded highway
construction dollars, State funded. They received 8.9 percent of the
Federal-aid highway program. Again, DBE exists here; it does not exist
there.
In Arkansas, 2.9 percent of State dollars; 11.9 percent of Federal
dollars. DBE program here; did not exist there.
In Delaware, DBEs received less than 1 percent--less than 1 percent
of State-funded highway construction dollars, while they received 12.7
percent of the Federal-aid highway funds in that State.
The next one, the DBEs in Louisiana received only .4 percent --.4
percent--of funds under the State's highway construction program, which
does not include a DBE initiative. They received 12.4 percent of funds
awarded by the Federal program.
In Michigan, another State without a DBE program, DBEs received only
1.4 percent of State highway construction funds. By contrast, they
received 15 percent of Federal highway construction funds.
I can go through Missouri, Nebraska, Oregon--Rhode Island, look at
this. In Rhode Island we have the State program without a DBE program,
and the State effort is zero percent for all the women and minorities
put together. Zero percent of the State highway construction funds; 12
percent of the Federal highway construction funds where there was a DBE
program.
[[Page S1421]]
Now, this evidence, Mr. President, is incontrovertible. Where there
are no DBE programs, women- and minority-owned small businesses are
shut out of the highway construction. The Federal DBE program serves to
redress the inequality and redress the unfortunate fact that all across
the country women and minorities would not otherwise have access to
construction contracts.
Now, consider another example--the State of Michigan. In the second
quarter of fiscal year 1989, the State of Michigan awarded 5 percent of
its highway construction funds to small and minority-owned businesses,
and 9.9 percent to small women-owned businesses. Again, I make the
point that this debate has been focused on minorities, but it is women
that are just as much at risk from this amendment as minorities. Near
the end of that quarter, the State ended its DBE program. OK. Here we
are right here. So 9.9 percent, 5 percent. Then the end of the program.
Within 6 months, by the fourth quarter of that same fiscal year,
minority disadvantaged businesses were completely shut out of the
State's highway construction program. Less than 1 percent--.6 percent.
They received zero contracts. By the first quarter of the following
year, women were down to only 1.7 percent of the State's highway
programs, down from 9.9 percent.
So this was the experience. Look at this. Here we go. Just totally
wiped out from the modest gains that had been made in that State.
Well, Mr. President, that is exactly what would happen if we ended
the Federal DBE program. Women- and minority-owned small construction
companies would go out of business by the hundreds of thousands.
I have to ask the question, is that really the result we want to have
coming out of this debate? Is that really the legacy that the 105th
Congress would like to impart on transportation policy--a legacy of no
economic opportunity for thousands and thousands of small businesses?
Nationwide, minorities represent 9 percent of all construction funds
but receive only about 5 percent of all business receipts. That is
overall--9 percent of all funds but 5 percent of all receipts. Women,
who own one-third of all firms, get only 19 percent of business
receipts. Let us not see 1998 go down as the year in which those
opportunities to compete were further eroded.
I urge all of my colleagues to consider the facts--the fact that the
DBE Program is constitutional, that it is a program of economic
opportunity, that it is a program of fairness, and that it is a program
that works. I urge my colleagues to cast their votes for the ideals of
opportunity and equality, which describe our Nation, which are
described in this Constitution, in this living document.
More to the point, Mr. President, I urge my colleagues to move beyond
the politics of division and zero-sum games. Those who oppose having
this modest opportunity provided for women and minorities--this modest
step to correct a structural distortion that has existed in our country
since its founding, this tiny step to bring women and minorities into
the economic mainstream and to integrate the business of our country--
those who would oppose that are pushing buttons to divide Americans; to
pit one against the other; to say this is a zero-sum game, you can't
progress, you can't be integrated in this society without someone
losing out. No one loses out in this program. No one loses out from
opening up the doors of opportunity.
Indeed, opportunity to compete, to have a level playing field, to
move beyond race and gender, is what this country has got to be about.
I urge my colleagues to reject this ill-considered amendment.
Mr. McCONNELL. I yield to the distinguished Senator from Michigan
such time as he may need.
Mr. ABRAHAM. Mr. President, I rise to discuss the amendment of the
Senator from Kentucky to the ISTEA legislation. Mr. President, the
Supreme Court decision in Adarand v. Pena appears to mean that section
1111 of the existing ISTEA legislation is unconstitutional. That being
the case, it is our duty, in my view, to replace this provision with
one that meets the test of constitutionality.
In its Adarand decision, the Supreme Court held that programs that
create race-based preferences must be narrowly tailored to further a
compelling governmental interest. On remand, the Federal District Court
determined that the presumption of social and economic disadvantage on
account of race included in an earlier version of ISTEA section 1111
violated the equal protection clause of our Constitution. This
provision of our Constitution has been crucial to the ongoing struggle
for civil rights in this country. It has been behind a number of
important Supreme Court decisions dating back to the seminal Brown v.
Board of Education.
The Adarand Court continued a long tradition of jurisprudence,
establishing a colorblind Constitution, one which demands equal
treatment under the law for members of all races. In acting, the Court
has drawn a clear distinction between preference or quota programs and
affirmative action efforts aimed at providing more opportunity for the
less advantaged.
In my view, Mr. President, this is a crucial principle and
distinction, one that will not allow the Government to give preference
to one individual over another simply on account of status--absent
direct evidence of past discrimination that the program is narrowly
tailored to address--but does permit us to provide special assistance
to those economically disadvantaged.
But our Constitution's principle of equality under the law must not
be allowed to conflict in any way with outreach programs aimed at
helping the economically disadvantaged of our society. Indeed, it
points to public policies more in keeping with America's constitutional
heritage, our commitment to fair play, and our desire to help the
disadvantaged become full participants in our market economy and the
prosperity it provides.
To that end, Mr. President, I believe that Senator McConnell's
amendment to the ISTEA legislation is potentially helpful. This
amendment would strike section 1111 from the legislation on the basis
that the changes between the language in this ISTEA and the version
deemed unconstitutional by the District Court based on the Supreme
Court's Adarand ruling are not sufficient to overcome the Court's
constitutional objections. I wish to state that while I realize there
is a difference of opinion on this issue, I agree with this
constitutional analysis. The amendment would replace section 1111 with
a requirement that every State in receipt of Federal highway dollars
engage in ``emerging business enterprise development and outreach.''
Under the language, ``emerging enterprises'' are defined as contractors
whose average annual gross receipts do not exceed $8.4 million over a
period of 3 years. To be eligible, the businesses also must be small
businesses that have been in existence for not more than 9 years.
Under this amendment, States would be called on to provide a number
of services to emerging businesses, including periodic review of
construction plans to ensure fairness and opportunity, as well as
offering seminars, compiling and publishing lists of interested
businesses and related companies, and providing networking
opportunities on a regular basis.
The McConnell amendment offers significant outreach programs aimed at
emerging businesses. By so doing, it aims Government assistance at
those who need it most. In the process, it avoids rewarding well-to-do
businesses simply on account of status, while providing assistance to
minorities and women truly in a position to need and make use of it.
In addition, Mr. President, I thank Senator McConnell for accepting
my language in modifying his amendment. That language directs States to
also aim efforts at business enterprises that are located in
economically distressed communities and employ a majority of their
workers from such economically distressed communities.
Finally, Mr. President, the McConnell amendment is constitutional.
Because it does not base the awarding of Government contracts or
benefits exclusively on the race of the recipients, it upholds the
principles of our Constitution and the equal protection clause in
particular. Support for this amendment is fully in keeping with our
sworn duty to uphold the Constitution on which our Government is based.
However, Mr. President, in my view, the McConnell amendment does not
go far enough. We must do more. I continue to believe, in other words,
that
[[Page S1422]]
economic empowerment initiatives are crucial to the well-being of
disadvantaged members of our society, and in the end, to our society as
a whole.
It was in order to promote these efforts that I joined a number of my
colleagues, including the Presiding Officer, in forming the Renewal
Alliance, an alliance dedicated to renewing the families and
communities which lie at the heart of our way of life and which are
crucial for success in America.
To further these efforts, we have formulated legislation aimed at
creating ``renewal communities.'' In these communities, targeted, pro-
growth tax benefits, regulatory relief, brownfields cleanup, and
homeownership opportunities will combine to produce jobs, hope, and a
sense of community. By targeting distressed communities for Federal
relief from onerous rules and taxes, we can assist the ongoing revival
of our inner cities by spurring growth and productive rebuilding
efforts.
In order to become a renewal community, a community must meet several
criteria to qualify:
First, it must need the assistance. According to the legislation we
have drafted, this means that the area must first be eligible for
Federal assistance under section 119 of the Housing and Community
Development Act of 1974. Second, it must have an unemployment rate of
at least 1\1/2\ times the national rate. Third, it must have a poverty
rate of at least 20 percent. And finally, at least 70 percent of the
households in the area must have incomes below 80 percent of the median
income of households in the metropolitan statistical area.
In addition, state and local governments must enter into a written
contract with neighborhood organizations to do at least five of the
following:
(a) reduce tax rates and fees within the ``renewal community;''
(b) increase the level of efficiency of local services within the
renewal community;
(c) formulate and implement crime reduction strategies;
(d) undertake actions to reduce, remove, simplify, or streamline
governmental requirements;
(e) involve private entities in providing social services;
(f) allow for state and local income tax benefits for fees paid or
accrued for services performed by a non-governmental entity but which
formerly had been performed by government; and
(g) allow the gift (or sale at below fair market value) of surplus
realty in the renewal community to neighborhood organizations,
community development corporations or private companies.
Third, the community must agree to suspend or otherwise not enforce
the following types of restrictions on entry into business or
occupations;
(a) licensing requirements for occupations that do not ordinarily
require a professional degree;
(b) zoning restrictions on home-based businesses that do not create a
public nuisance;
(c) permit requirements for street vendors that do not create a
public nuisance;
(d) zoning or other restrictions that impede the formation of schools
or child care centers; or
(e) franchises or other restrictions on competition for businesses
providing public services including but not limited to taxicabs,
jitneys, cable television and trash hauling.
State and local authorities may apply such regulations on businesses
and occupations within the renewal communities as are necessary and
well-tailored to protect public health, safety and order.
Now, in return for its reforms, Mr. President, the community will
receive a number of renewal benefits.
First, a capital gains tax rate of zero for the sale of any qualified
zone stock, business property or partnership interest held for at least
five years.
Second, increased expending for purchases of plant and equipment in
the community.
Third, a 20 percent wage credit for local businesses hiring
qualified, low income workers who remain employed for at least 6
months.
Fourth, a provision allowing taxpayers to expense costs incurred in
cleaning up contaminated sites within the zone.
Fifth, a provision allowing financial institutions to receive
Community Reinvestment Act credit for investments in, or loans to,
community groups within the zone. These groups would then provide loans
and/or credit to local small businesses.
All of these provisions would encourage investment and job creation
within the zone. In my view, this approach, as opposed to the existing
preferences structure, or the McConnell approach standing alone, is the
way to go.
Accordingly, Mr. President, while Senator McConnell's amendment is,
in my view, part of the answer to our challenge of providing all
Americans the economic opportunity they deserve, it is not enough.
It can, and in my view should, be part of a larger program aimed at
helping all Americans rebuild the community institutions which alone
can provide the support and training people need to succeed in our
competitive world marketplace.
Thus, if the motion to table the Amendment fails, I will attempt to
augment it with a broader package of economic empowerment proposals as
outlined above.
In addition, should the McConnell Amendment pass, I reserve the right
to offer amendments making certain specific modifications to the
language in this amendment.
That language would specify that state and federal outreach and
dollars under USTEA shall be directed toward emerging business
enterprises located in and/or employing the majority of their workers
from ``targeted areas.'' A targeted area is defined as a community
meeting the same criteria regarding poverty rates and so on necessary
to be deemed an empowerment community. This will concentrate our effort
where they are most needed and can provide the greatest benefit.
I appreciate the opportunity to speak on these issues today, and I
look forward to hearing the rest of this debate. I also look forward to
proceeding further in this area--whether in the context of this
legislation or at a future point this year--because I think that the
ideas which I have tried to outline, and which our Renewal Alliance has
been working on, must be part of a broader approach and a broader set
of solutions we are responsible for bringing to the American people.
Mr. McCONNELL. If I could take a moment to thank the distinguished
Senator from Michigan for his important contribution and the thought
that he and the occupant of the chair have put into their proposal. I
think is a very important contribution.
Mr. ABRAHAM. Thank you.
Mr. BAUCUS. I yield 10 minutes to the distinguished Senator from
Virginia.
The PRESIDING OFFICER (Mr. Coats). The Senator from Virginia.
Mr. ROBB. Mr. President, I rise to support the Disadvantaged Business
Enterprise Program and oppose the amendment of the Senator from
Kentucky which would eliminate it.
This amendment, at least, implies that there is something wrong with
supporting socially and economically disadvantaged businesses. I see
nothing wrong with supporting socially and economically disadvantaged
businesses. I believe it is entirely appropriate we do whatever we can,
legally, to help small businesses flourish, businesses that might
otherwise get swamped by larger, better financed competitors.
Mr. President, it is a sad fact that as we near the end of this
century, socially and economically disadvantaged businesses tend to be
minority owned. If we don't focus our attention on helping these
businesses succeed, we are never going to achieve the dream of an
economically colorblind society. The evidence of this, regrettably, is
compelling and disturbing. White-owned construction firms receive 50
times as many loan dollars as African American-owned firms that have
identical equity.
Where DBE programs at the State level have been eliminated,
participation by qualified women and qualified minorities in government
transportation contracts has plummeted. There is no way to know whether
this discrimination is intentional or subconscious, but the effect is
the same. This experience demonstrates the sad but inescapable truth
that, when it comes to providing economic opportunities to women and
minorities, passivity equals inequality.
If we don't exercise diligence, we are going to stifle businesses
owned by
[[Page S1423]]
qualified women and minorities. It is that simple.
I do not support numerical quotas and I never have. I would never
advocate awarding work to anyone who is, or any business that is
unqualified for the task. But I do support lending a helping hand to
individuals and businesses that, without special attention, might be
overlooked, even though they are perfectly capable of performing the
necessary work.
And that, Mr. President, I believe is the key to eliminating
discrimination over the long-term. We cannot simply declare that a
world where inequality exists is otherwise an equal world. We need to
recognize that inequality and address it by making an affirmative
effort to give qualified businesses a realistic chance to participate.
As Julian Bond remarked recently in a sentiment that I think is right
on mark in this case:
Affirmative action isn't a case of unqualified people
getting a leg up, but of qualified people getting an
opportunity.
Finally, I would like to commend the managers of the bill and, in
particular, my colleague from Virginia for taking a courageous stand to
support the DBE, despite the pressure that I am sure he is getting on
this particular issue.
Mr. President, the managers are on the right side of this particular
issue, and I urge my colleagues to support them by opposing this
amendment.
With that, I yield the floor.
The PRESIDING OFFICER. Under the previous agreement, the Senator from
New Mexico is recognized to speak for up to 45 minutes, if he so
chooses.
Mr. DOMENICI. Mr. President, if somebody needs 5 minutes or so; I am
awaiting a document that I need for my remarks.
Mr. BAUCUS addressed the Chair.
The PRESIDING OFFICER. The Senator from Montana.
Mr. BAUCUS. Mr. President, I yield myself 5 minutes.
Mr. President, I want to ruminate about this concept of quotas and
goals. First of all, nobody likes quotas. They are rigid, they are
unforgiving, they are almost insulting. The DBE program does not use
quotas; it uses goals.
Now, some say the goal is 10 percent, 15 percent, or 20 percent, or
what not; so is it really a goal? To be honest with ourselves here, it
is a goal, but it does have a number associated with it. For example,
the number is 10 percent. Some States ask for a lower goal--not a
quota, but a lower goal. Some States are granted those lower goals.
Some States ask for higher goals and they are granted those higher
goals. Some States say, ``Our goal is going to be 10 percent,'' and lo
and behold, it turns out that the disadvantaged business enterprise
program does not meet 10 percent, it is a lower percent. That has
happened in a couple of States. In 1996, in Arizona and in Alaska, the
goal was 10 percent, but those two States did not reach the 10 percent
goal. In Alaska, it was 8.6 percent. In Arizona, it was 8.9 percent.
You might ask: What happened? Why didn't those States meet their goals?
As far as I know, nothing has happened, which is further evidence that
this is not a quota; it is just a goal.
We all know that goals are important. We know that if we want to
achieve something, it is good to have a goal. If you don't have goals,
often we slip, we rationalize, and things fall between the cracks and
they don't happen. Sometimes it is helpful to have numerical dates or
to quantify your goals, again, to help assure that you reach them, like
benchmarks. We all know that sometimes quantifying a goal helps make it
happen. In this case, we are not talking about a rigid goal. It is a
goal that has a lot of flexibility to it in a lot of different ways.
I was a bit bemused when I heard Senators chafing at this concept of
goals, I guess the same way Senators resist unanimous consent
agreements. A unanimous consent agreement is a kind of a goal. It is a
statement that, within 2 hours we are going to vote or something, or
within an hour and a half we are going to do something else. We have to
have limits sometimes to make something happen. Look at newspapers.
Newspaper reporters know they have a deadline to get the paper out.
So if we do want greater inclusion of minority groups participating
in highway contracting, and if we want more women enterprises to
participate in highway contracting, it is good to have a goal to help
make that happen. That is what we are attempting to do here. It is not
unconstitutional because it is very flexible. It has a lot of give. I
might say that the proposed regulations that the Department of
Transportation is working on and, in fact, will probably finalize in a
couple of months, make the program even more narrowly tailored. For
example, the regulations include further emphasis on good-faith
efforts. All a contractor has to show is good faith, not a numerical
number. Also in the proposed regulations is a broad waiver allowing
States to come up with their own program that will replace the
Department of Transportation's program if the State can show that its
own program will effectively redress discrimination. That is a broad
waiver.
In addition, the proposed regulations would add a net worth cap. That
is, if your net worth exceeds a certain amount, you are not eligible,
even if you are a woman or a minority. So all those statements about
the Sultan of Brunei are irrelevant. The proposed regulations make it
very clear that the Sultan of Brunei, with all his palaces and gold-
plated Rolls Royces, and so forth, would not even begin to be eligible
for the DBE Program. I might say that it is not only the Sultan of
Brunei; it is a bunch of other folks whose net worth is significant and
who should not be part of the DBE Program.
So the basic point is, again, that this is very narrowly tailored, it
is flexible, it is based on good faith efforts. It is not a quota. And
the proposed regulations will be even more flexible and narrowly
tailored, with more emphasis on good-faith effort.
The PRESIDING OFFICER. Who yields time?
The Presiding Officer had earlier recognized the Senator from New
Mexico to speak under a previous agreement, if he is prepared to do so.
Mr. DOMENICI. Mr. President, I yield 5 minutes of my time--although
he may have a different view than I have--to Senator Brownback.
The PRESIDING OFFICER. The Senator from Kansas is recognized to speak
for 5 minutes.
Mr. BROWNBACK. I thank the Senator from New Mexico.
Although I think our views of the world are similar on many issues
and actually quite a bit similar on this particular issue, we end up
coming at it, in the end conclusion, a bit differently. I appreciate
the Senator from New Mexico yielding me 5 minutes for this purpose.
Mr. President, the Senate will soon vote, of course, on an amendment
proposed by the Senator from Kentucky on the ISTEA bill. As the bill
stands, it mandates that ``not less than 10 percent'' of Federal
highway and transit funds may be allocated to ``disadvantaged business
enterprises.''
I want to speak specifically about this amendment that does away with
racial set-asides and replaces it with an outreach program to emerging
small businesses. I have really struggled with this vote. I find this a
very difficult issue, not because I support quotas or because I believe
racial set-asides will help bring about racial reconciliation, which is
really my point of view and my difficulty with this because we
desperately need racial reconciliation in this country. We need that to
take place. We need that process to start in earnest, to move forward
with the hearts and souls of people in this country. My problem is that
I don't think quotas and set-asides alleviate the disadvantages many
Americans face or to increase their ability to compete on a level
playing field, nor do I really believe it is going to help us out with
this racial reconciliation that our country so desperately needs.
Nevertheless, this has been a hard decision to make. It will be a
hard vote to cast. I would like to explain why I will vote in favor of
Senator McConnell's amendment and why I have misgivings about doing so.
First, I believe that quotas are unconstitutional. Each of us, in
serving in this body, has taken an oath to uphold the Constitution. The
Supreme Court's ruling in Adarand is very clear. I took my oath of
office to uphold the Constitution seriously. I could not, in good
conscience, vote for a measure that I believe, and the Court has ruled,
violates the highest law of this land.
[[Page S1424]]
Second, I do not think quotas are the answer to the problems that
divide us and deny equal opportunity. Quotas do nothing to address the
problems that we face as a country, of not having a colorblind society.
Indeed, it actually perhaps makes us more aware of the differences,
rather than less aware of the differences. It doesn't address some of
the underlying problems such as the break-up of families, which is the
single greatest predictor of opportunities and income later in life--
coming from a solid family that cares and loves the children. Quotas do
not help the millions of children who attend schools where violence is
commonplace and drug use is rampant. They do not help children to read,
write, do arithmetic, or have the basic skills in society that we are
having so much trouble with.
Finally, I believe that set-asides are not only ineffective in
bringing about racial reconciliation--this is my key point; I don't
think they bring about racial reconciliation. Indeed, I think they have
been counterproductive. The last several years have shown that quotas
in some cases, indeed many, are an acid that further divides our Nation
and corrodes the principles of equality. More than 30 years ago, Dr.
Martin Luther King, Jr., shared his dream of a society where men and
women would be judged ``on the content of their character, not the
color of their skin.'' We all, as a country, saw those words as
electric and true. This is a dream that almost all Americans continue
to share--that we be judged on the content of our character, not on the
color of our skin. Although we may disagree on the best means of
getting there, I cannot believe that the best way to achieve a
colorblind society is to call more attention to race, to count by race,
and to divide by race.
That said, the reason I have struggled with this vote is I believe
that it is incumbent upon us to open the doors of opportunity to all
and reach out to those Americans who have been denied those
opportunities. Unfortunately, the way this debate has been spun, a vote
for quotas has been equated to show concern for the disadvantaged--a
portrayal both false and destructive, I think. We need to do more to
extend a helping hand to those in need and to open the doors of
opportunity and not only level but expand the playing field for all
Americans.
The Senator from Michigan has spoken and the Senator presiding, the
Senator from Indiana, has spoken frequently about initiatives of the
Renewal Alliance. I want to draw my colleagues' attention to these
efforts. I think this is a serious effort at reaching out and truly
showing that the way to racial reconciliation is to truly level the
playing field and to expand the playing field in the areas where we are
having the most opportunity. So the work in the inner cities and the
work of the Renewal Alliance has been key in that.
I think this work of the Renewal Alliance is critical because, as I
have struggled with this debate--and the reason I have struggled with
this vote is not because I believe quotas are the answer, because they
just are not, they are not constitutional--is that if we don't have a
colorblind society, what do we go to if we don't think quotas are right
or constitutional? Then what? I don't think we have answered that
question yet in this body. How do we address the needs to create a
colorblind society? That is where I think the Renewal Alliance is
reaching out and doing that and saying, here are some ways we can truly
develop in inner cities, and reach out and say: We care, we want these
places, we want you to have opportunity and growth and hope. It is just
that we aren't going to do it by acid tests that we have talked about
in these quotas and that we can really reach Martin Luther King's
vision of a colorblind society if we try to bid out and to reach out
and to hold.
I ask my colleagues to look at the work of Senator Coats from Indiana
and other people that have truly put their hearts into this and said,
here is a way we can go, this is what we can do, this is not
constitutional quotas. It is just not going to be. But this is what we
can do, and let's do that, and let's reach out as Americans and bind
arms together, of all creeds, of all kinds, of all races, of all
religions, and make a bigger, better playing field in this country.
That is why, Mr. President, I will be voting for this amendment. It
is a difficult vote. And I really hope and pray that we will revisit
this issue along the lines of what has been put forward as a way of
expanding the hope and opportunity.
With that, I yield the floor.
Mr. McCONNELL addressed the Chair.
The PRESIDING OFFICER. The Senator from Kentucky.
Mr. McCONNELL. Mr. President, if I could just have one moment to
thank the Senator from Kansas for his important contribution to this
debate, and thank him for his support.
The PRESIDING OFFICER. Under the Senate agreement, the Senator from
New Mexico is recognized.
Mr. DOMENICI. Mr. President, thank you, very much.
Mr. President, I rise today in opposition to the Amendment offered by
the Senator from Kentucky, Mr. McConnell. The Senator from Kentucky
proposes to replace the Department of Transportation's Disadvantaged
Business Enterprise (DBE) program with a new ``emerging business''
program. The amendment is intended to eliminate the DBE program and
would have a devastating effect on the opportunities for DBE's to
participate in federally funded highway and transit projects.
The proponents of this amendment urge Senators to vote for this
amendment by saying that it is incumbent upon the Senate to bring ISTEA
into compliance with the Supreme Court's ruling in Adarand versus Pena.
They assert that just this summer, after the Supreme Court sent the
case back to the District Court, that it found the DBE program was
unconstitutional. Furthermore, they declare that the District Court in
Colorado followed the Supreme Court's lead and found that the
government, in fact, could not meet the Supreme Court's test.
The proponents go on to remind Senators that every member of Congress
has publicly and solemnly sworn to support and defend the Constitution
of the United States, and that we now have little choice but to comply
with the unambiguous, unequivocal mandate of the courts and end the DBE
program.
If Senators are considering voting in favor of the McConnell
amendment on the basis that the program has been ruled
unconstitutional, and that it is now incumbent upon us to bring the
program into line with the Supreme Court's rule, then I would ask them
to take the time to listen to a different view, and one that I believe
is closer to the real facts.
The proponents of this amendment make the argument that we should
stand for the rule of law and on this point we agree. However, many
Senators will be interested to know that the District Court itself
appears not to have followed the rule of law as outlined by the Supreme
Court and therefore should not be mislead. I will say this again,
because if you listen to the proponents of the amendment, and I have,
you are compelled to consider their argument seriously. But if you look
at the facts closely, you will find that the very constitutional rule
of law the proponents ask us to uphold was itself not precisely
followed by the District Court.
In 1995, in Adarand, the Supreme Court did not find the DBE program--
or any other affirmative action program--unconstitutional. In fact,
seven of nine Justices upheld the constitutionality of affirmative
action and its continued need in certain circumstances. Instead, the
Supreme Court established a new standard of review--``strict
scrutiny''--for federal programs using race conscious measures. This
new two pronged test requires that affirmative action programs are
``narrowly tailored'' to meet a ``compelling governmental interest.''
Without deciding whether the DBE program met this new strict scrutiny
test, the Supreme Court sent the case back down to the District Court
for consideration in lieu of its holding.
Mr. President, this is the rule of law the Supreme Court said must be
followed, and it is the rule of law I would urge Senators to support.
However, it is not the rule of law that the District Court followed on
remand from the Supreme Court, and that is why the District Court's
finding that the program is unconstitutional should be viewed with
skepticism.
On remand, the District Court accepted Congress' determination that
[[Page S1425]]
there was a compelling need for the program. The District Court stated,
``I find on the record before me, Congress had sufficient evidence, at
the time these measures were enacted, to determine reasonably and
intelligently that discriminatory barriers existed in federal
contracting . . . I conclude Congress has a strong basis in evidence
for enacting the challenged statutes, which thus serve a compelling
governmental interest.'' This meets the compelling governmental
interest prong of the Supreme Court's ``strict scrutiny'' test.
The District Judge, however, decided that the program was not
sufficiently narrow in its scope. In this part of his decision, the
Judge took a position which directly contradicts the Supreme Court's
rule in Adarand.
While seven of nine Justices of the Supreme Court said that there
could be affirmative action programs that are both narrowly tailored
and meet a compelling governmental interest, this District Court Judge
found, and I quote, ``Contrary to the Court's pronouncement that strict
scrutiny in not `fatal in fact,' I find it difficult to envisage a
race-based classification that is narrowly tailored.''
Obviously, Mr. President, the key words in the District Court's
ruling are ``Contrary to the Court's (meaning Supreme Court's)
pronouncement. . .'' I agree with the proponents of this amendment that
every member of Congress took an oath to support and defend the
Constitution of the United States, and we should be vigilant in
adhering to that oath. But, the fact of the matter is that the District
Court itself does not view the constitutional rule the Supreme Court
set in Adarand as being able to be followed because it found that it
would be difficult to envisage any affirmative action program that
could be narrowly tailored. The Supreme Court said that it could
envision a program that was both narrowly tailored and furthered a
compelling governmental interest, and herein lies the flaw in the
argument of the proponents of the amendment. On this point, Justice
O'Connor, writing for the majority stated, ``We wish to dispel the
notion that strict scrutiny is strict in theory, but fatal in fact. The
unhappy persistence of both the practice and the lingering effects of
racial discrimination against minority groups in this country is an
unfortunate reality, and government is not disqualified from action in
response to it.''
The very District Court ruling that the proponents ask us to rely on
is currently being appealed by the Department of Transportation and the
Department of Justice in the 10th Circuit Court of Appeals. The case
has been fully briefed, but no date has been set for oral argument. So
while the proponents suggest that a decision on this matter has been
fully resolved by the courts and constitutes a mandate that we should
follow, the fact is that it is still an open question.
Furthermore, Mr. President, although the District Court found that
the scope of the program was not narrowly tailored, it did not take
into account the changes that the Department of Transportation has
proposed to the program to respond to the Supreme Court's narrow
tailoring guidelines. The Department of Transportation has issued a
proposed rule to improve the DBE program and respond to the Adarand
decision. The proposed rule is specifically designed to meet the narrow
tailoring requirement of the Supreme Court's strict scrutiny test.
Specific narrow tailoring proposals include: Ensuring that specific
goals are set to correspond to the availability of qualified DBEs in a
given market. The new goal-setting methods will ensure that DBEs
receive the same opportunities they would have but for the presence of
discrimination--no more, no less. Giving priority to race neutral
measures, such as outreach and technical assistance, in meeting overall
goals. Recipients would look to these approaches before using race-
conscious measures, such as contract goals. Emphasizing the need for
recipients to take good faith efforts to meet contracting goals
seriously. Recipients must award a contract to a bidder who documents
adequate good faith efforts, even if the bidder does not fully meet a
contract goal. Providing waivers that will afford recipients increased
flexibility in implementing the program.
So while the District Court found it difficult to envisage an
affirmative action program that could be narrowly tailored, it did not
even have before it the proposed rule that purports to meet that test.
These regulations are to be finalized within the next month. After
thorough review, both the Department of Transportation, and the
Department of Justice have determined the DBE program is
constitutional.
The proponents have urged us to comply with the ``unequivocal
mandate'' of the courts and end the DBE program. The only ``unequivocal
mandate'' the courts have stated is that race-based programs must meet
the strict scrutiny test. Contrary to the Supreme Court's decision that
an affirmative action program could be both narrowly tailored and meet
a compelling governmental interest, the District Court found it
``difficult to envisage'' any narrowly tailored program, and moreover,
it did not have before it the very rule proposed to address the aspect
of the Supreme Court's strict scrutiny test.
President Eisenhower, when he was still general, used to say that he
``. . . never liked to make decisions too quickly . . .'' I would urge
my colleagues to heed the advice of President Eisenhower, and not make
a decision to quickly on this matter prior to a determination being
made of whether the proposed rule can meet the narrow tailoring aspect
of the Supreme Court's test.
The Senator from Kentucky's amendment requires states to take action
to enable emerging businesses to compete for highway and transit
contracts and subcontracts. These actions include outreach to emerging
small businesses in the construction industry, technical services and
assistance with bonding and lending, and technical services and
assistance with general business management. The amendment prohibits
discrimination and preferential treatment based, in whole or in part,
on race, national origin, or gender.
Mr. President, the proponents of this amendment have lead members to
believe that the DBE program is really a ``quota program''. I want to
stress at the outset that this program is not a ``quota program'' as
some have suggested. There is a great difference between an
aspirational goal and a rigid numerical requirement. Quotas utilize
rigid numerical requirements as a means of implementing a program. The
DBE program utilizes aspirational goals.
Under the DBE program, state and local government recipients of
Department of Transportation funds administer the DBE program. Each
year, they determine how much DBE participation is reasonable to expect
based on the availability of DBEs and the types of work involved. The
recipient's annual goal may be more or less than the national 10% goal
established by Congress, and it is worth noting that if they do not
meet that goal there are no penalties. In fact, the Department of
Transportation has never penalized or sanctioned a state or local
recipient for not achieving their goals. This provides flexibility to
meet local conditions. Contract goals are not operated as quotas
because they only require that the prime contractor make ``good faith
efforts'' to find DBEs. If a prime contractor cannot find qualified and
competitive DBEs, the goal can be waived.
In as much as the DBE program is not a quota program, neither does it
constitute reverse discrimination as the proponents have suggested. The
DBE program works to remedy discrimination, not cause it. In fact, non-
minority business people who are disadvantaged have applied and been
accepted into the DBE program. In fact, any white male, as long as he
can demonstrate social and economic disadvantage, can be admitted to
the program.
Let's remember, the Department of Transportation reports that 85% of
the contracting receipts under ISTEA programs go to non-DBEs with the
current DBE program in place. This figure indicates that minority firms
do not dominate the construction industry. The role in the construction
industry will only be diminished by the elimination of the DBE program.
The DBE program works to ensure a level playing field for qualified
DBEs which have for years confronted discrimination and been blocked
out of contracting opportunities. That discrimination is evidenced by
District Court's finding that the program meets the compelling
governmental interest
[[Page S1426]]
prong of the Supreme Court's strict scruity test.
The Need for a Disadvantaged Business Enterprise Program
There is discrimination in the construction industry. Minorities make
up 20 percent of the U.S. population, but minority-owned businesses are
only 9 percent of construction firms and they get only five percent of
the construction business. Women own a third of all small businesses
but received less than three percent of federal procurement contract
dollars in 1994.
Lenders discriminate against minority firms. It is a lot harder to
capitalize a minority construction company. Black construction firms
can raise fifty times fewer dollars per dollars of equity capital than
White firms. When there is no affirmative action program, DBEs don't
get any work.
In Michigan within six months of ending the state DBE program
minority-owned businesses were completely shut out of state highway
construction. During the same period, in the same state, under the
Federal-aid highway DBE program the same DBEs received 554 subcontracts
worth 12.7 percent of the federal aid dollars. When there is no
affirmative action program white-owned prime contractors reject
minority or women-owned firms even when they offer the lowest bid.
The DBE program follows the Supreme Court's Requirements. The current
DBE program sets a national participation goal of 10 percent for
disadvantaged business enterprises.
The goals are flexible. DOT can, and has permitted, a lower goal
based on availability of DBE firms and opportunities for
subcontractors.
The goals are sometimes waived completely if a prime contractor,
despite good-faith efforts cannot find a qualified disadvantaged
business to meet a specific contract. The proposes regulations respond
to the ``narrow tailoring standards'' set out by the Supreme Court.
Courts have said: specific goals should correspond to the
availability of qualified DBEs in a given market. Provide the same
opportunity to DBEs that they would have received but for the presence
of discrimination--no more no less.
Courts have emphasized the importance of ``race neutral'' measures
such as outreach, training, and technical assistance.
Race-neutral measures would be used to achieve as much DBE
participation as possible before any ``race-conscious'' measures are
used. Only use ``race-conscious measures to extent, and only for as
long as, they are needed to achieve a level playing field. Goals are
not quotas. Prohibits set-asides except in most severe cases of
discrimination.
Mr. President, for those who are managing the bill, or might be
waiting to speak this evening, I don't believe I will use all of my
time. If I am not holding anybody up, I might reserve some of it until
tomorrow, or whenever we finish it.
How much time is allocated to the Senator from New Mexico?
The PRESIDING OFFICER. The Senator from New Mexico has 36 minutes
remaining.
Mr. DOMENICI. Mr. President, needless to say, the Senator from New
Mexico who comes from a State that has about 11 percent American
Indians as part of our population mix and about 38 percent Hispanics--
needless to say, I have lived my adult life in an atmosphere where I
have rubbed shoulders with those members of the minority--American
Indians and Hispanics--in my State as they spoke of opportunity and as
they spoke of a chance to own a business and of their hope that their
children would get a good education so they could have a chance like
all of us had in New Mexico who are not Hispanics or Indians.
I have seen a great number of successes in terms of business by the
minority community in New Mexico. Much less by the Indians
proportionately--American Indians--than by the Hispanics. And that has
a lot of cultural nuances to it also, and tribal nuances and the like.
But I have strived most of my life to try to be part of the kind of
community and the kind of lawmaking that gave the minorities an equal
chance to own businesses. That is essentially what we are talking about
here. And we are engaged in a debate--I don't think a debate about
whether everyone, including minorities, ought to have a chance to own
businesses in America. I would assume if we put that question to
everyone, they would all say of course. But the question is, even
though we all say of course, do they really have an equal opportunity?
Is it as easy for an intelligent, well-educated Hispanic American, New
Mexican, or a Native American to get into business? I will say that
without any of the Government involved, they are getting more and more
opportunities. And there is no question that more Hispanics are in
business in the United States on their own without the benefit of the
Federal Government programs than those who are in business because of
the Federal programs.
But I can also assure you that the Hispanic Americans who live in my
State and in other States are genuinely listening today to this debate.
And if they aren't tuned in on C-SPAN, they will soon be hearing what
people tell them we are doing here on the floor of the Senate. I
guarantee you, Mr. President, and my good friend, exceptionally good
friend from Kentucky, who happens to be on the opposite side of this
issue today, on the precise formulation of the issue--I guarantee you
that whether Hispanics and Native Americans, or other minorities, or
women who are part of this program and are scurrying around to catch up
with the men in business ownership--incidentally, as an aside, the
fastest growing portion of the American business ownership portfolio is
now women.
As a matter of fact, as of 2 years ago, women-owned businesses in
America, believe it or not, and all by themselves, employed more people
than the Fortune 500 in America. And it was the fastest growing piece
of those who were entrepreneurs. On the other hand, that doesn't mean
that they don't need some help sometime to break into the private
sector.
So I have come to the floor concerned because I do not want to be
part of an America that is saying, because we don't want quotas and we
don't want set-asides, which I will agree we should not have--we are
not going to have a major program within the highway programs of this
country, which we are currently thinking is $173 billion worth of
business, more or less, over the next 6 years, and add to it $41
billion more or less for mass transit. I do not want to leave the floor
with that bill and with people being able to say there may not be any
minority participation in the businesses that put this fantastic
roadway and mass transit system together. That may be a bit of an
exaggeration. But essentially what we have done in the past is to try
to make sure that there was participation. And we have broadened that
to women as part of a group of Americans that are disadvantaged when it
comes to owning their own businesses.
So I have for the last 3 days--not for months--studied this issue.
And I must say I didn't have hours upon hours to do it; I have a lot of
other things I have to do around here. But I have come to the
conclusion that we do not have to wipe out the Disadvantaged Business
Enterprise Program in this bill in order to accomplish our goal, which
I think is rather unanimous, that there be no quotas yet there be some
positive direction so that women and minorities will get a reasonable
portion of the business under this very, very large multimillion-dollar
contract authority that is going out to American business, large and
small, to fulfill.
The more I read, and the more I said, ``But you can't be right,
Senator Domenici, because of your wonderful friend from Kentucky whose
thoroughness and constitutional acumen on the bill called campaign
finance''--I read the same cases with him, and I agreed with him. In
fact, I told him that I had come full circle and could clearly
understand in campaign finance how it was a freedom of speech issue. He
recalls that. I would not have gotten to that point. I was still fuzzy
about it until I heard his interpretations of the Supreme Court.
But I tell you that I do not agree that this minority business
program that we have in this ISTEA bill before us is a program that
mandates quotas and mandates set-asides. In fact, I don't believe it is
even fair to just look at the face of the statute, as has been done
here on the floor, and read it, and say it is patently a quota system
because, Mr. President, it is not implemented without regulations. And
the
[[Page S1427]]
regulations and the way the program is being implemented, from
everything I can find out, do not establish quotas or set-asides.
Then I said, ``Well, my friend from Kentucky, whom I have just
expressed my admiration for, keeps saying the Supreme Court has already
ruled it unconstitutional.'' And I said, ``If that is really true, he
should get 100 votes.''
So I started asking. I have some lawyers on my staff. I don't think
necessarily I have Laurence Tribe on my staff. I could have sent it up
to Harvard for them to look at it. Maybe my friend from Kentucky would
say that wouldn't be a very good place to send it; I don't know. But
maybe over to Stanford. Well, let's settle for old Michigan, the
University of Michigan.
But in any event, the truth of the matter is that I have now received
very, very different information that I think makes sense about whether
this Disadvantaged Business Enterprise Program as currently being
administered has been declared unconstitutional by the Supreme Court.
As a matter of fact, let me say I am convinced that it has not.
What I have done--and I hope the Senate will find this interesting--
is I have asked the Attorney General's Office of the United States and
the Secretary of Transportation to answer some very precise questions.
I have them answered. They are so interesting and so precise. Maybe
that is because I asked the questions that I wanted answered. I would
like to read them. There are only six. When I am finished later this
evening, I will pass out the letter to whoever wants it. It will be
then signed by the Attorney General of the United States and by
Secretary Slater.
Let me read the letter. The letter is dated March 5, 1998, directed
to me.
It says:
Dear Senator Domenici: This letter responds to questions
that you have posed regarding the Disadvantaged Business
Enterprise (DBE) Program currently authorized by the
Intermodal Surface Transportation and Efficiency Act.
1. Has the text of section 1111 been ruled on by the
Supreme Court, and if not, how does section 1111 differ from
the statute that was before the Supreme Court in Adarand v.
Pena?
The Supreme Court in Adarand v. Pena did not find this or
any other program to be unconstitutional. Indeed, the Supreme
Court did not even consider the constitutionality of section
1003(b) of ISTEA, which sets a 10% goal for expenditure of
the authorized funds with DBEs. The Adarand case involved a
different program: the Department of Transportation's use in
its own direct federal contracts of compensation to encourage
federal prime contractors to use DBE subcontractors. The
compensation was provided through a specific contract
provision used only in DOT's own direct contracts for
highways on federal lands. Even as to this compensation
program, the Supreme Court's opinion merely establishes that
federal race-conscious programs, like state and local
programs, are subject to strict scrutiny. The Court made
clear, however, that such scrutiny is not ``fatal in fact,''
and that the federal government has a compelling interest in
remedying the lingering effects of discrimination through
properly tailored programs.
2. How do you conclude that Section 1111 of the ISTEA bill
was not before the Supreme Court in Adarand v. Pena and has
not been declared unconstitutional?
The Supreme Court's opinion in Adarand addresses only the
DOT's subcontracting compensation program, not the ISTEA DBE
program. The Supreme Court's remand in Adarand makes this
clear--it states that the courts below were to determine only
``whether any of the ways in which the Government uses
subcontractor compensation clauses can survive strict
scrutiny.'' 515 U.S. at 238. Only one district court judge--
the judge who is considering the remand in Adarand--has found
the compensation clause program unconstitutional. While that
district court judge also ruled the ISTEA program
unconstitutionality of ISTEA was not properly before the
court. The Justice Department has argued on appeal to the
Tenth Circuit that the district court improperly addressed
the constitutionality of ISTEA and, in any event, erroneously
concluded that ISTEA was unconstitutional.
3. Section 1111 of the ISTEA bill states, ``not less than
10 percent of the amounts made available under this program
shall be expended with small business concerns controlled by
socially and economically disadvantaged individuals.'' In
view of this language, why is the DBE program not a mandatory
set aside or rigid quota program?
The 10 percent figure contained in the statute is not a
mandatory set aside or rigid quota. First, the statute
explicitly provides that the Secretary of Transportation may
waive this goal for any reason--specifically, the language
quoted above is preceded by the phrase ``[e]xcept to the
extent that the Secretary determines otherwise.'' Second, in
no way is the 10 percent figure imposed on any state or
locality. Under the program, it is the states that really set
goals for contracting. They may set goals higher or lower
than 10 percent depending upon the local availability of
DBEs, projected contracting needs and past results of their
efforts. Moreover, state agencies are permitted to waive
goals when achievement on a particular contract or even for a
specific year is not possible.
The DBE program does not set aside a certain percentage of
contracts or dollars for a specific set of contractors. Nor
does the program require recipients to use set asides. The
DBE program is a goals program which encourages participation
without imposing rigid requirements of any type. Neither the
Department's current or proposed regulations permit the use
of quotas. The DBE program does not use any rigid numerical
requirements that would mandate a fixed number of dollars or
contracts for DBEs.
4. The comments to the new rule states, ``[i]f race-neutral
means are the first resort under this proposed section, then
set asides and other more intrusive means, such as a
conclusive presumption, are the last resort.'' In view of
this language, why is this not a mandatory set aside or rigid
quota program?
The comment is intended to make clear that race- and
gender-neutral mechanisms (e.g., outreach, technical
assistance) are the means of first resort for recipients to
use in seeking to meet overall goals. In fact, the rule
itself prohibits setting aside particular contracts unless
the state has been unable to meet its goals for a number of
years and there is a court-order or state law which directs
the recipient to use set asides. Such set asides would not be
permitted, even where state law authorizes their use, unless
it can be shown that less restrictive measures, including
race neutral programs and flexible contract goals, were
insufficient to address the demonstrated effects of
discrimination. As discussed above, the DBE program thus
neither mandates set asides nor permits the use of rigid
quotas.
5. Are there sanctions, penalties or fines that may be
imposed on any recipient who does not meet DBE program goals?
In the fifteen years that this program has been in operation,
has any state been sanctioned for not meeting its program
goals? In answering please provide specific examples to
support your conclusion.
No state has ever been sanctioned by DOT for not meeting
its goals. Nothing in the statute or the regulations imposes
sanctions on any state recipient that has attempted in good
faith, but failed, to meet its self-imposed goals. In 1995,
two states failed to meet their goals; in 1996, two other
states failed to meet their goals; and, in 1997, three states
failed to meet their goals. There were no sanctions,
penalties or fines of any kind imposed against any of those
states.
6. Is this program only for minorities and women?
No. Any individual owning a business may demonstrate that
he is socially and economically disadvantaged, even if that
individual is not a woman or minority. Both the current and
proposed regulations provide detailed guidance to recipients
to assist them in making individualized determinations of
disadvantaged status. And, in fact, businesses owned by white
males have qualified for DBE status.
7. What recourse is available to low bidders who have made
good faith efforts to meet DBE contract goals, but despite
those efforts were not able to do so? Is it true that low
bidders who have tried but failed to meet the contract's DBE
goal are automatically eliminated from consideration for the
contract?
Under the current regulations, if a prime contractor is
unable to find available and qualified DBEs to meet a
specific contract goal, the goal may be waived. Under the
proposed rule, the goal must be waived. No low bidder who
tried in good faith but failed to meet the goal is
automatically eliminated from receiving the contract.
Thank you for your interest in, and support of, this
important program.
Sincerely,
Janet Reno.
Rodney E. Slater.
That is the extent of the letter which I have now read into the
Record. Mr. President, let me say that, obviously, reasonably oriented
Senators, who have good motives, maybe even the same motives and same
goals, can disagree. But I take very seriously whether I should come
down and vote for a statute that is patently unconstitutional, and I am
very confident that, when I vote against the amendment of the
distinguished Senator from Kentucky to strike that provision and
substitute for it, that I am, when I vote against it, voting to leave
in this bill and the regulations accompanying it, a constitutional
provision with reference to helping the disadvantaged, including women
and any business that might qualify that is economically disadvantaged.
I hope, and I say to the administration very clearly right now: You
have now put the signature of the Attorney General of the United States
and the Secretary of the Treasury on the answer to these seven
questions. And this Senator, and I think a number of other Senators, is
going to be voting to keep
[[Page S1428]]
the provision in the bill based upon these kinds of assurances. Let me
make sure that the President of the United States understands that if
it turns out that, as they produce the completed regulations for the
program, as they attempt it across the board for all programs--they are
in the process of doing that; there are many other departments other
than the Department of Transportation that need refined regulations.
If, in fact it comes out in a few months that the regulations are not
being interpreted in the way suggested here, then I assure you that we
will change them. I am not suggesting we will do away with help and
assistance in the area that is encompassed here, but many are voting
because they have confidence that the rules, as they implement this,
will not be inconsistent with these statements. This better become a
very, very serious challenge to the administration as they finally
implement this program.
If they do that, and they are done as suggested in these responses,
then I have no doubt that anybody attempting to appeal will lose. I
have no doubt that the issue will not be before us again, because it
will not have any set-asides to it, it will not have any fixed ratios,
the kinds of things that we all know we don't want--quotas, numerical
quotas and the like.
With that, I reserve the remainder of my time. But I would say to the
leadership, if the rest of the time is running out and we are ready to
vote at any time in the near future, I believe a call to me will get me
to relinquish the remainder of my time. But for now I will reserve it.
I yield the floor.
The PRESIDING OFFICER (Mr. Allard). The Senator form Kentucky.
Mr. McCONNELL. I can say to my good friend from New Mexico, for whom
I have the greatest respect, I would like to just mention what the
Supreme Court said in the Adarand case. Basically what the Supreme
Court did was to lay out the standard, and they said that any racial
presumption must be narrowly tailored to meet a compelling governmental
interest. ISTEA uses that racial presumption. Then what the Court did
was they sent the case back to the district court to determine what
statutes and regulations were in play in Adarand and whether the
statutes and regulations met the strict-scrutiny standard.
In the district court case--I apologize to my good friend from New
Mexico if I said the Adarand case declared the regs unconstitutional. I
don't think I said that on the floor here today. I may have said that
in some conversation we had yesterday. But what the Adarand case did
was lay out the standard, sent the case back to the district court, and
the district court said, and this is a direct quote, ``Section 1003(b)
of ISTEA and the regulations promulgated thereunder are
unconstitutional.'' So the district court, applying the standard of
Adarand, said the case was unconstitutional.
The Department of Transportation, in trying to appeal the district
court decision--they don't like that decision. They are going to appeal
it to the 10th circuit. The Department of Transportation in their
brief, in describing the lower court decision, says, ``This order
declares unconstitutional the program operated by DOT, but also the
Federal aid DBE program operated by the State of Colorado under
ISTEA.''
So, I think we are in the same place here. Technically, the Supreme
Court only laid down the standard in this case. But that was a landmark
standard. It was sent back down to the district court, which applied
the standard and found this unconstitutional. And the Court in another
case, a very similar case to this--the Court meaning the Supreme
Court--has addressed this issue. So it is not like the Supreme Court
has never spoken, I would say to my friend from New Mexico, on this
subject. In the Croson case the Court said, ``In sum, none of the
evidence presented by the city''--this was referring to the city of
Richmond, a similar factual situation:
None of the evidence presented by the city point to any
identified discrimination in the Richmond construction
industry. We therefore hold that the city has failed to
demonstrate a compelling interest in apportioning public
contracting opportunities on the basis of race.
To accept Richmond's claim that past societal
discrimination alone can serve as the basis for rigid racial
preferences would be to open the door to competing claims for
remedial relief for nearly every disadvantaged group. The
dream of a nation of equal citizens in a society where race
is irrelevant to personal opportunity and achievement would
be lost in a mosaic of shifting preferences based on
inherently unmeasurable claims of past wrongs. Courts would
be asked to evaluate the extent of the prejudice and
consequent harm suffered by various minority groups. Those
whose societal injury is thought to exceed some arbitrary
level of tolerability then would be entitled to preferential
classifications. We think such a result would be contrary to
both the letter and spirit of a constitutional provision
whose central command is equality.
Finally, let me say the Supreme Court has addressed a similar issue
in the Croson case. The Supreme Court laid down the standard in
Adarand, sent it to the district court, which applied the standard
which found the very provision we are talking about unconstitutional.
That is on appeal to the 10th circuit. And the sufficiency of the new
regs that my good friend from New Mexico and other speakers on the
other side of this issue have referred to I suppose is the issue before
us today. In other words, has the Department of Transportation, bearing
in mind the Adarand decision and the subsequent district court
decision, adjusted the regulations in such a way as to come into
compliance with the law?
I cite on that point a letter from George LaNoue, who is an expert in
this particular field who has testified before a number of
congressional committees on this subject. Professor LaNoue addresses
the adequacy of the new regs. He says:
It is being asserted that various alterations and proposed
regulations for ISTEA solve the constitutional problems
created by the use of race, ethnic and gender preferences in
awarding of contracts under that program. That assertion is
incorrect for two reasons. First, the regulatory alternatives
go only to the issue of narrow tailoring--
Narrow tailoring--
not to the constitutional requirement that a compelling basis
of remedying identified discrimination be established before
any, for the use of preferences, be considered. None of the
fundamental evidentiary requirements necessary to support the
preferences in this legislation have been established by the
administration or by Congress.
He concludes his letter, which I will ask to have printed in the
Record:
Proposed regulations are either irrelevant or incomplete to
the major requirements of narrowly tailoring, and they do not
begin to supply a compelling basis for the use of
preferences.
So where I think we are is that reasonable people can differ about
what the courts are saying. I think it is pretty clear that the Senator
from New Mexico probably speaks for the majority here in the Senate,
and we will get an opportunity, as he indicated, to find out what the
law is because it is on appeal to the 10th circuit.
It is also very, very clear that quotas and preferences are going to
die hard, Mr. President, in this country. There are roughly 160
preferential quota and preference programs in the Federal Government
which dole out benefits on the basis of gender and race. It looks as if
the only way we will be able to dismantle those is case by case by
case.
The Senator from New Mexico is certainly correct, the district court
decision applying the standard in Adarand is on appeal to the 10th
circuit. But there are numerous Supreme Court and circuit court
decisions that give us an indication of what the result will be. It
will probably be a denial of cert, which someone will argue, again, is
not a Supreme Court decision. But a denial of cert, if the 10th circuit
upholds the district court, will, in fact, finish the case.
I am not saying the Senator from New Mexico will take this position
at all, but I bet you there will be some, I say to my good friend from
New Mexico, who, if we offer this amendment at some later time, will
say, ``Well, there wasn't a Supreme Court decision on it, it was only a
denial of certiorari.
So I thank the Senator from New Mexico. I understand the sensitivity
of this issue. I certainly agree with him that he could rely on the
Attorney General's opinion about this, if he chose to. She is a part of
the administration. The administration opposes dismantling this
particular program. Just speaking for myself, I am not surprised that
she would take the position she does, and ultimately the courts will
decide.
Mr. DOMENICI addressed the Chair.
The PRESIDING OFFICER. The Senator from New Mexico.
Mr. DOMENICI. I yield myself up to 5 minutes.
[[Page S1429]]
Let me say to my friend from Kentucky, actually, I am very pleased
with the remarks he has made, because essentially there is no question
that the amendment which he offers, as I view it, is premature if the
purpose is to make this bill eliminate any program that has been ruled
by the Supreme Court to be unconstitutional, because obviously,
whatever the district court did with it--and it has not been rendered
unconstitutional prior to this district court decree--whatever they did
to it is on appeal. As a consequence, we don't even know if the
appellate court agrees that it is unconstitutional as determined by the
district judge who, incidentally, did not even have ISTEA before the
court when this decision was rendered.
Let's just make one other observation about the administration. And I
hope Democrats will join me with this. I have just said they better be
right. They just told us what it does and doesn't do and how they are
going to make sure it is tailored that way. But I think it is fair to
say to the President that some of us remember when the decisions came
down from the Supreme Court about set-asides and the 8(a) program and
others that, as the President said--and I can't quote him verbatim nor
do I remember the time, but I can assure you it was sometime back--``I
will have my administration go through all these laws and correct them
so that they meet what the Supreme Court's test is.'' Frankly, there
are a lot of people who have been waiting for them to get that done.
Mr. McCONNELL. I ask my friend, did they find any they thought were
inappropriate?
Mr. DOMENICI. As a matter of fact, I understand from conversations
this morning, the conversations that preceded this letter, that they
are in the process of rewriting rules and regulations for all of them,
not just ISTEA, and I said, ``You better hurry up.''
We all know that they have to be rewritten. The minority community
knows they have to be rewritten. This debate may have been avoidable.
Had they written these both generic and specific rules, we might not
have had this argument.
The answer I received, so the Senator will know, is that it is very
difficult when you look at the whole array of programs. The Senator
says there may be more than 160?
Mr. McCONNELL. Close to. Between 150 and 160.
Mr. DOMENICI. It is very difficult for the lawyers and those who put
them together to get it all finished. I think this debate and this
letter will push them to get it done, and get it done as quickly as
possible.
I yield the floor, and I thank the Senator.
Mr. McCONNELL addressed the Chair.
The PRESIDING OFFICER. The Senator from Kentucky.
Mr. McCONNELL. Mr. President, with regard to the likelihood of the
district court decision in Adarand being overturned--I see my friend
from New Mexico is leaving--just to close the discussion on what is
likely to be the outcome in the case, I asked the Congressional
Research Service about the cases in this particular area of the law.
Let me, Mr. President, for our colleagues in the Senate, point out
that the Congressional Research Service has found no--no, not a one--no
court ruling after a trial where a race-based contracting program has
met the Supreme Court's test of strict scrutiny.
I say to my friend from New Mexico, there hasn't been a single case
that the Congressional Research Service could find where a race-based
contracting program has met the Supreme Court's test of strict
scrutiny. In fact, CRS has explained that Adarand conforms--this is not
sort of an aberration out there --it conforms to a pattern of Federal
rulings across the country striking down race-based contracting
programs as unconstitutional:
Associated General Contractors of California v. San Francisco, a
ninth circuit case; Michigan Road Builders v. Milliken, a sixth circuit
case; Groves v. Fulton County in the Northern District of Georgia;
Milwaukee County Pavers Association v. Fiedler in the seventh circuit;
Associated General Contractors of Connecticut v. New Haven, district
court in Connecticut; O'Donnell Construction Co. v. District of
Columbia in DC Circuit; Arrow Office Supply v. Detroit, Eastern
District of Michigan; Louisiana Associated General Contractors v.
Louisiana in Louisiana; Associated General Contractors of America v.
Columbus, Southern District of Ohio; Engineering Contractors
Association of South Florida v. Metropolitan Dade County in the 11th
circuit; and finally, Contractors Association of Eastern Pennsylvania
v. Philadelphia in the third circuit; and more recently, Monterey
Mechanical v. Wilson in the ninth circuit, decided last September;
Houston Contractors Association v. Metropolitan Transit, decided last
November.
Mr. President, CRS was unable to find a single court ruling where
after a trial a race-based contracting program has met the Supreme
Court's test of strict scrutiny.
I think it is extremely unlikely, in conclusion, I say to my friend
from New Mexico, that we are going to have a court decision overturning
the district court finding after Adarand laid down the standard. I
thank him for his important contribution.
This is a very, very important issue about what kind of a country we
are going to have, what kind of America we are going to have. Are we
going to realize Martin Luther King's dream of a colorblind society, or
are we going to continue down what the Senator from Kentucky believes
is a mistaken path of putting people into boxes, into groups, and to
doling out benefits and rights based upon what ethnicity they may be,
whether they are male or female? Are we going to continue to go down
that path or really work to achieve a colorblind society? I think the
courts are telling us that quotas and preferences based on race,
ethnicity, and sex are not going to be upheld. The pattern is clear,
and it seems to me we ought to follow what is, it seems to me, the law
of the land in this particular instance. I yield the floor.
Several Senator addressed the Chair.
The PRESIDING OFFICER. The Senator from Montana.
Mr. BAUCUS. Mr. President, I note Senator Kennedy is on the floor. He
has been over here many times seeking to speak. I yield to the Senator
15 minutes.
Mr. KENNEDY addressed the Chair.
The PRESIDING OFFICER. The Senator from Massachusetts.
Mr. KENNEDY. Mr. President, I welcome this opportunity to continue
the debate on the steps needed to achieve the goal of equal opportunity
for women and minorities. Clearly, we have made substantial progress
toward the goal of equal justice under law, but just as clearly, we
still have a long way to go.
From President Kennedy to President Nixon to President Clinton, there
has always been bipartisan recognition in the White House and Congress
that the playing field is not level for women and minorities and
widespread acceptance of the need to take steps to remedy the effects
of persistent discrimination.
Civil rights is still the unfinished business of America. We have
made significant progress toward justice for all and opportunity for
all. But, as the church arson epidemic, the Texaco and Mitsubishi
scandals, the Good Ol' Boys Round Up, and the brutalizing of a Haitian
immigrant by police officers in New York City demonstrate, we are not
there yet.
Incredibly, there are some who believe that discrimination is a thing
of the past, and that the playing field is now level for women, for
minorities, and for other victims of discrimination. They are wrong.
Job discrimination is still a persistent problem for minorities in all
aspects of the economy. The glass ceiling still prevents large numbers
of women from attaining important job opportunities.
Nowhere is the deck stacked more heavily against women and minorities
than in the construction industry. African American contractors still
report arriving at job sites to find signs with racial epithets. One
African American contractor was told to leave a home site by a white
customer who said, ``You didn't tell me you were black and you don't
sound black.'' In California, a female contractor was told that the
reason her asbestos-removal business had declined, even though her work
was good, was because ``it's back to the good ol' boys club. Haven't
you heard affirmative action is out?''
There is no doubt that if we terminate meaningful programs, like the
[[Page S1430]]
Disadvantaged Business Program in ISTEA, the clock will be turned
back--back to bigotry, back to closed-door deals, back to denial of
opportunity. The door that America is steadily opening to women and
minorities will be shut once again.
Proof comes from communities across the Nation. If we terminate a
State disadvantaged business program, public contracts awarded to
businesses owned by women and minorities decline rapidly.
In Philadelphia, contracts awarded to women and minorities dropped 97
percent--97 percent--in the first month after the city terminated its
disadvantaged business ordinance.
In Tampa, contracts awarded to black-owned firms dropped 99 percent--
when that city ended its goals program.
In Michigan, minority firms were eliminated as contractors on State
highway projects within 6 months after the suspension of the State's
disadvantaged business program in 1989. Within 9 months, participation
by women-owned businesses had dropped to 1 percent of total awards.
Can it be that no qualified minority contractor was available for a
highway construction contract in Michigan after the State program
ended? It defies reason to believe that is true.
The Disadvantaged Business Enterprise Program and others like it have
brought new faces to the table. Many women and minorities have had the
opportunity to participate--to show they can excel. An electronics
company in Orlando--a steel assembly firm in Illinois--a crane and
crane operator supplier in Chicago--all owned by women. This program
gave them the opportunity to prove themselves. But if these programs
end, they are deeply concerned that the major contractors that called
them and the companies that praised their work will disappear--not
because they do bad work, or charge more than their competitors, but
because they are women.
Dorinda Pounds, currently president of Midwest Contractors, Inc., an
Iowa highway construction business, had trouble getting startup
capital. After 9 years in the construction business, she had decided to
start her own business and was faced with the task of raising $500,000
for equipment and expenses. She turned to banks and investors, but they
initially expressed concern that the male contractors would lock her
out and the banks would not recoup their investment. The DBE program
certification was indispensable in persuading bankers and investors to
take a chance on her new company.
Three years later, prime contractors ask for her--not because she is
a DBE, but because she can get the job done.
Jennylynne Gragg, president of G and G Signals and Lighting, is
another example. After 6 years in her parents' construction business,
she became the company's general manager, and was able to increase
profitability immediately. Her father, acting on his belief that the
construction industry is ``no place for a woman,'' offered her job to a
younger brother with no experience, and Jennylynne decided to prove him
wrong.
Eight years later, she operates a successful contracting business of
her own. But it has not been easy. She and her mother--now a business
partner --have to struggle to obtain financing. General contractors
often solicit their bids with no intention of hiring them. Even when
they are the low bidder, general contractors have often used another
firm and accepted a higher bid.
Why would a general contractor accept a higher bid? It doesn't make
sense--unless you remember that the traditional business network
doesn't include women or minorities. At a Judiciary Committee hearing
on this issue, Janet Shutt, who operates an Indiana construction
company, said some general contractors would rather lose money than
deal with female contractors.
The Department of Transportation DBE program is changing all that.
The program was signed into law by President Reagan in 1983 to assist
minority-owned firms.
It was expanded in 1987 to include women. President Reagan and
Congress recognized that it was time to end the pervasive
discrimination in the highway construction industry, that positive
steps were needed to eliminate years of bias against women and
minorities.
Under the DBE program, the Department of Transportation sets a
national goal--10 percent of Federal contracting dollars--for
participation by women and minorities. States then set their goals--not
quotas or set-asides--based on the availability of DBEs and the kind of
work that must be completed. Most States set a goal of 10 percent. But
on occasion, States have set goals lower or higher than the national
level. States have never been penalized for failing to meet their goal.
Once States set their goals, contracts are identified for DBE
participation. Prime contractors must either meet the goal or show that
they have made a good-faith effort to meet it. The new regulations
proposed by the Department of Transportation clarify that States must
accept valid showings of good-faith efforts, so that the goal will
never become a quota.
The proposed regulations also ensure that only truly disadvantaged
businesses can participate in the DBE program. Currently, although
women and minorities are presumed to be DBEs, those who are not
economically disadvantaged are excluded from the program. The new
regulations will ensure the integrity of the program by requiring that
women and minorities certify that they are disadvantaged and provide a
summary of net worth. The presumption may be challenged at any time by
the State or the local certifying agency, the Federal Government, or
any third party.
Contracting firms owned by white males may also participate in the
DBE program, and the proposed regulations clarify the existing
requirements for certification. In fact, Randy Pech--the owner of the
Adarand Construction Company involved in the Supreme Court case--is
seeking DBE certification.
Discrimination by general contractors is a major obstacle faced by
women and minorities. But there are many others. A white contractor
with a background identical to that of an African American contractor
can expect to receive over 50 times as many loan dollars per dollar of
equity capital. A study of contractors in Atlanta found that 19 percent
of nonminority firms had unlimited bonding capacity--a privilege
granted to no minority firm, regardless of size.
Similarly, an African American owned company in Georgia found that if
it sent white employees posing as owners of a white-owned company to
purchase supplies, they could receive price quotations two-thirds lower
than those quoted to the parent company.
Discrimination in the form of higher quotations from suppliers is
commonplace. A recent survey reported that 56 percent of African
American business owners, 30 percent of Latino business owners, and 11
percent of Asian owners had experienced this discrimination.
Yet, despite the exclusion, the mistreatment, and the prejudice that
women and minority businesspeople experience every day--despite the
clear and convincing evidence that the DBE program and others like it
have given women and minorities a first, fair chance to succeed, there
are those who want to eliminate this sensible program.
Some argue that the DBE program is unconstitutional. But, the Supreme
Court's Adarand decision did not strike down the program, nor does it
prevent Congress from supporting measures to respond to the pervasive
discrimination that still exists in this country.
The Supreme Court, in reviewing this issue, has said only that
Federal race-conscious programs must undergo ``strict scrutiny''--they
must be narrowly tailored to meet a compelling governmental interest.
The Court did not say that affirmative action programs are
unconstitutional. What the Court did say is that:
[W]e wish to dispel the notion that strict scrutiny is
``strict in theory, but fatal in fact.'' The unhappy
persistence of both the practice and the lingering effects of
racial discrimination against minority groups in this country
is an unfortunate reality, and government is not disqualified
from acting in response to it.
To ensure that the DBE program passes the strict scrutiny test, the
Department of Transportation is currently completing new regulations
that give priority to race-neutral measures. The regulations also
emphasize that States must award contracts to bidders who document
adequate good-faith efforts, even if the bidder doesn't meet
[[Page S1431]]
the DBE goal. In addition, the regulations clarify DBE certification
standards, including the eligibility of white males who prove
disadvantage.
We know that properly administered programs can meet the strict
scrutiny test. State and local programs implemented after the Supreme
Court's Croson decision prove this point completely.
I urge my colleagues to vote against the amendment offered by Senator
McConnell. I support education and outreach efforts to eliminate
discrimination. But they are not enough alone to end the discrimination
that clearly exists. Congress must remain committed to taking needed
steps to guarantee equal opportunity for all Americans.
Mr. President, I yield back the remaining time.
The PRESIDING OFFICER. Who yields time?
Mr. McCONNELL addressed the Chair.
The PRESIDING OFFICER. The Senator from Kentucky.
Mr. McCONNELL. The Senator from Indiana is around. Someone can check
the cloakroom. He is, as far as I know, the last speaker on this side
for the evening. He is on his way, I am told.
The PRESIDING OFFICER. Does the Senator suggest the absence of a
quorum?
Mr. McCONNELL. I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. McCONNELL. 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. McCONNELL. Mr. President, I yield to the distinguished Senator
from Indiana such time as he may need.
The PRESIDING OFFICER. The Senator from Indiana is recognized.
Mr. COATS. Mr. President, we are considering an amendment offered by
the Senator from Kentucky, which is designed to address one part of the
increasingly contentious debate over affirmative action. The Supreme
Court's ruling in the Adarand decision most probably makes the existing
Disadvantaged Business Enterprise Program unconstitutional; and,
therefore, I think the Senator's amendment is appropriate.
There is a growing sense, however, that as well-intentioned as
affirmative action and set-aside programs are, whether they are
constitutional or not, really in any way can be reconciled to the
American commitment to equal justice under law. At the same time, I
think it is important to point out that Americans do remain deeply
troubled by the persistent poverty and lack of opportunity that quotas
and affirmative action were originally meant to remedy. As unemployment
approaches zero in much of the country, the inner cities are still
overwhelmed by double-digit joblessness, social breakdown, and
education failure.
I want to be clear here this evening: Quotas and set-asides are not
the answer to these problems. We have tried that. It has not worked. It
does, I believe, violate constitutional principles of equal justice
under law. Set-asides and quota programs have been largely a non
sequitur to the social and economic questions faced by the urban poor.
Quotas and set-asides do not strengthen civil society and do not
strengthen our neighborhoods. It is the churches and charities and
volunteer groups and community associations that bind neighborhoods
together, along with strong families. That is what makes progress
possible in these areas, not a statute written by the Congress that
attempts to force a solution that cannot be forced.
Quotas and set-asides do not foster the kind of spirit of
entrepreneurship, that is necessary and needed in these communities, by
encouraging the creation of the kinds of small businesses that provide
employment and help anchor community life. And they do nothing at all
for millions of children who are trapped primarily in urban public
schools serving primarily low-income families--schools which, by any
measure, are failing to provide adequate education for children who are
trapped in this school system.
When it comes to the real concerns of urban America, the national
debate over set-asides and quotas is just off the mark, Not just off
the mark; it is irrelevant. An unfortunate side effect of this debate,
however, is that it gives the impression that those who support the
amendment of the Senator from Kentucky have nothing else to say about
the real concerns of poor Americans living in inner cities, all they
want to do is eliminate the one advantage that individuals have.
Now, in the warp and woof of this quota debate, these supporters--
Republicans, conservatives, and the others--are painted as largely
unknowing and uncaring and uninterested in the real concerns of the
poor. Now, if this charge was warranted, it would be a tragedy--a
tragedy for our party, a tragedy for conservatives, a tragedy for
Republicans. But such a charge is not warranted.
Those who would support the amendment from the Senator from Kentucky,
those who would acknowledge that the quota set-aside program has not
addressed the real problems, are not those without alternative
proposals. They are not those who don't share the concerns of the poor.
We, as a group, have put considerable time and energy and thought into
new approaches to helping restore our cities, renewing the hopes and
dreams of those who live on some of America's meanest streets and
meanest neighborhoods, addressing their concerns for the need for
community empowerment, for strengthening families.
Several years ago, I introduced a package of proposals under the
title of ``Projects for American Renewal.'' It attempted, through a
series of initiatives of Federal seeding and Federal support,
demonstration programs, and grants, to accomplish a number of things,
but primarily falling in three areas: Strengthen families, because
families are so key to the strength and stability of communities, but
recognizing that not all families are intact; and promoting the role of
mentors, organizations and individuals that can provide support for
children who don't have fathers at home to help them. It addressed the
need for strengthening those community institutions--institutions of
charities and nonprofits, churches, synagogues, and other institutions
within the community that can reach out and address some of these most
fundamental social programs in ways that government programs never have
and never will.
It sought to provide for community renewal through a series of
empowerment measures and economic empowerment measures designed to
gather capital, build businesses, and provide job opportunity and job
growth for businesses within communities that needed the help the most.
For the past 18 months, a group of us have been meeting under the
title of ``Renewal Alliance,'' a group of roughly 30 Republican Members
of the House and Senate seeking to craft a new program of outreach and
empowerment to our Nation's urban areas and to our Nation's poor. We
have rejected the failed model of the past, the top-down Federal
programs that have brought devastation in inner-city communities. We
have also, however, rejected a ``hands off'' approach that believes the
best Federal urban policy is no policy at all.
Instead, we have attempted, through the Renewal Alliance, to provide
an opportunity agenda for urban America. We acknowledge that there is
at least a startup role that the Federal Government can play, primarily
through the Tax Code changes and through some seed money, but we also
want to make sure that the role of the Government is that of a
supporter and an encourager and a partner to local leaders and
institutions who know firsthand what America's urban problems are and
are already well on their way to finding solutions.
It is clear to us that from the range and complexity of problems
plaguing our inner cities, that capital development--social, human, and
economic capital--is the key to the long-term renewal of urban
communities.
Our plan addresses this problem at three levels. First, through a
charity tax credit and an expanded charitable choice program, we shift
authority and resources away from government and toward those private
charitable, religious, and voluntary organizations
[[Page S1432]]
that undergird the life of local communities. We support private
economic development through targeted tax incentives and regulatory
relief. And we address the dramatic educational defects of urban
schools by providing publicly funded scholarships for poor children to
attend schools of their choice.
I will take a few minutes--with the indulgence of the proponent of
this amendment, my good friend, the Senator from Kentucky--to in more
detail describe the Renewal Alliance agenda and its vision for urban
America.
First let me talk about community empowerment. Community activist Bob
Woodson said there is no social program in America today that is not
being solved somewhere by someone. The most intractable problems we
face--drug addiction, teen pregnancy, homelessness, youth violence--are
being conquered by community leaders most of us have never heard of.
Pastor Freddie Garcia of San Antonio has a drug treatment program that
has an 80 percent success rate, compared to the single-digit
performance of government programs. An independent study of Big
Brothers-Big Sisters found among at-risk youth, adult mentoring cut
first-time drug use by 46 percent, school absenteeism by 52 percent,
and violent behavior by a third.
These are just two of hundreds of examples of programs and
individuals involved in leading those programs that are making a
difference in dealing with these difficult social problems that plague
different communities, neighborhoods, and families in America.
We propose a package of reforms that will strengthen these
institutions, these charities, these volunteer groups, that bind
communities together and actually heal individual lives. We want to
continue the work of the 1996 welfare reform by encouraging States to
transfer more authority and resources to the private nonprofit groups
and religious groups through State-based charity tax credits.
Our bill also expands and strengthens the charitable provisions
contained in the 1996 welfare bill to permit faith-based institutions
to compete for all types of Federal human services contracts. The
Community Empowerment Initiative also builds on last year's Volunteer
Protection Act by limiting the liability of businesses that provide
equipment or facilities for use by charitable organizations.
The second component of our Renewal Alliance program is economic
empowerment. One of the great underreported stories of America's
booming economy is the fact that tight labor markets are increasingly
forcing businesses to look to inner cities for labor. In Wisconsin,
Allen-Edmonds Shoes last year moved a major facility from Port
Washington to inner-city Milwaukee to take advantage of the untapped
labor pool there. The city of Indianapolis has engaged in an aggressive
program to bring businesses into poor neighborhoods by reducing
regulations and promoting the relative lack of economic competition in
inner-city communities.
Our legislation wants to build on these trends. We target the 100
poorest communities in our Nation with tax and regulatory relief
designed to spur economic growth on a long-term basis. Our plan reduces
to zero the capital gains tax for investments in troubled areas,
increases the expensive plants and equipment purchases by small
businesses in the zones, and allows businesses in these zones to
receive a 20 percent wage credit for hiring qualified low-income
workers. To qualify for these benefits, States and localities must
agree to reduce local tax rates and fees within the renewal community
and to waive local and State occupational licensing regulations. The
proposal would also create family development accounts that encourage
low-income families to save a portion of their income or of their EITC
refunds, to be matched by private contributions which would be
available for the purchase of a home, education expenses, or creation
of a small business.
The third part of our program is educational choice for low-income
families. The recent survey on urban education by Education Week
reemphasized the alarming state of our urban schools. Nationwide, just
43 percent of students attending urban schools meet the most minimal
standards for reading comprehension. In schools in high poverty areas,
only 23 percent meet the basic standard. This pattern held true in math
and science, as well as reading.
Urban parents whose children are trapped in schools in which failure
is virtually guaranteed are increasingly demanding real change and real
alternatives. Publicly and privately financed scholarship programs are
now operating at over 30 cities. Early studies of these programs show
substantial academic improvement among participating students and a
sharp jump in parental satisfaction with the education their children
are receiving are the results and consequences of these initiatives.
Our legislation tackles the education problems faced by inner-city
children from two different angles. First, we call for a large-scale
test of publicly funded scholarships for poor children. We believe
these scholarships would provide some immediate relief for families and
inject badly needed competition in the public school system. The
scholarships would also put real pressure on the public system for real
reform as families begin shopping for schools that work. I am pleased
to offer these initiatives here on the Senate floor with Senator
Lieberman on a bipartisan basis in the past several years, and we want
to continue to do that.
The second part of the renewal education reform plan is targeted at
relieving the regulatory burden faced by urban schools. Administrators
routinely complain that although the Federal Government provides only a
fraction of overall education funding, it imposes an overwhelming
majority of the paperwork. Our bill would provide an education flex
waiver for urban school districts that will permit them to devote more
of their dollars to the classroom and less time filling out forms.
This is the Renewal Alliance plan in brief: To restore urban America,
community empowerment, economic renewal, educational choice, and
reform. We do so not by putting the Federal Government in charge, but
by bringing it alongside as a supporter of those individuals and those
civic institutions, nonprofits, churches and charities, synagogues and
parishes, that are already at work rebuilding lives and rebuilding
neighborhoods.
Mr. President, I will vote for the McConnell amendment. I believe the
constitutional case for it is compelling. The Senator from Kentucky has
crafted a measure that I believe addresses the issue of encouraging
participation by the underprivileged of taking advantage of the highway
funding that will result from passage of this bill. But I don't want
this vote to be interpreted as the answer to the problems that affect
the underprivileged, the answer to the problem that affects our
communities. We need to do much more. We need a much more comprehensive
effort.
The Renewal Alliance has proposed such an effort. It is not written
in stone. It is open to amendment. It is open to suggestion. It doesn't
answer the whole problem, but it moves us in a substantial direction
toward solving that problem. I'm going to discuss this in greater
detail. We will be offering this legislative package. We will be
exploring opportunities throughout this legislative session to debate
and vote on all or some of this package of proposals.
I am joined by a number of my colleagues here in the Senate. I hate
to start naming names, but key among them are Senator Santorum and
Senator Abraham. We are working with an expanded group of Senators who
have real concerns and want to propose real solutions to some of the
most difficult problems we face as a Nation.
So with that, Mr. President, we will be saying more and doing more on
this initiative in the future, but I wanted to take this opportunity to
at least inform our colleagues that this vote is simply the opening
foray into an area that I think the Senate needs to seriously address
and give serious debate and initiatives toward solving. I look forward
to the opportunity to continue this effort.
I yield the floor.
Mr. SESSIONS. Will the Senator yield?
Mr. COATS. I am happy to yield to the Senator.
Mr. SESSIONS. First, I congratulate the Senator very much on this
renewal idea and community empowerment. I had the opportunity to serve
as a U.S.
[[Page S1433]]
attorney and be a coordinator of a communities-based revitalization
program known as Read and See in Mobile and Martin Luther King Jr.
neighborhoods--a great neighborhood that declined dramatically over the
years.
What we did first was we had a big town meeting, a community meeting
of the leaders and the people who live there. We broke up into
discussion groups and we listed priorities. All 10 groups listed
priorities that they thought their community needed most. First, I
remember distinctly that every group listed crime. They wanted a safer
neighborhood for their children and their families to live in. They
listed programs where they wanted their churches to be stronger in
helping kids. As I recall, I can't think of a single one that listed a
preferential contract for businesspeople as a need for that community.
Is that what the Senator was saying and suggesting, that we really
need to deal with deeper problems than the kind we may be so
politically engaged in now?
Mr. COATS. That is precisely what I was saying. I appreciate the
Senator's experience and involvement with programs that are locally
based and really make a difference in people's lives. What I was trying
to say here is that we are faced with a situation where we have a
statute on the books that appears to be unconstitutional. I think it
goes against the grain of equal treatment under the law--something that
is the foundation for what this country believes in. But I didn't want
to misinterpret it as the attempt, this year, by the U.S. Senate or
U.S. Congress in addressing problems that affect people that are called
``underprivileged'' or ``low-income'' or ``minorities'' or people who
live in targeted urban areas. There are deeper problems. There are
problems that have defied the Federal solution and have defied the
legislative solution but have lent themselves to local solutions, often
faith-based solutions, or nonprofit, charitable solutions that we can't
write statutes for. Can we assist in the transition of moving the
Government from a ``one-size-fits-all, let Washington solve the
problem,'' to an aspect of greater involvement of these organizations
in dealing with these problems? I think we can. What we are trying to
do here is outline some steps that we believe we should take in order
to accomplish that.
I appreciate the continued support of the Senator from Alabama and
his interest in this and his experience in this. I welcome his
participation, as he has offered in the past and I know he will in the
future, in terms of our Renewal Alliance efforts.
Mr. SESSIONS. Mr. President, I agree with that. Every group that
listed ideas for that neighborhood--all of their ideas were good and
all of those ideas would work. I think you are correct, Senator Coats,
in how you are approaching this idea. I believe that we need to allow
the people in our communities to develop plans for their own
neighborhoods, to make them work, and we will get a lot better ideas
than some of the programs that have been conjured up in this Congress.
Mr. COATS. Mr. President, I thank the Senator and yield the floor.
Unanimous Consent Agreement--S. 1173
Mr. CHAFEE. The majority leader has informed me that there will be no
more rollcall votes tonight. Second, I ask unanimous consent at 9:30
a.m. on Friday, March 6, the Senate resume the pending McConnell
amendment regarding contract preferences and there be 90 minutes
remaining for debate, equally divided between opponents and proponents,
with 45 minutes of that time equally divided between Senators Baucus
and Chafee, and at 11 a.m. on Friday, the Senate proceed to a vote on
or in relation to the amendment, and no other amendments be in order
prior to that vote. I further ask consent that if the amendment is not
tabled, it be open to further amendment and debate.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. CHAFEE. In light of the agreement, as I previously announced,
there will be no further rollcall votes this evening. The next rollcall
vote will occur tomorrow morning at 11 a.m.
Mr. BAUCUS. Mr. President, I see the distinguished Senator from
California on the floor. She would like to address the McConnell
amendment.
I yield 5 minutes to the distinguished Senator from California.
The PRESIDING OFFICER. The Senator from California is recognized.
Mrs. BOXER. Mr. President, it is indeed an honor to participate in
this debate, a very important debate.
Mr. President, I will be voting against the McConnell amendment,
which would eliminate the Department of Transportation's highly
successful Disadvantaged Business Enterprise Program. The main reason I
am doing it--and there are many reasons--is because this program is of
great benefit to small businesses in my State.
Now, opponents of this program have attempted to label it a quota
system. I oppose quotas because quotas are bad policy and quotas are
unconstitutional. The people of California feel very strongly against
quotas. But what is important to note, as so many of my colleagues have
pointed out, the DBE Program is far from a quota program. It is, in
fact, a flexible outreach program with goals that bring into the
highway contracting industry many small businesses which might
otherwise be overlooked or left out.
Now, this program is so flexible, Mr. President, that no State has
ever been fined, no State has ever been reprimanded for not meeting the
goal, because there is no quota; there is a goal.
Now, we know that small business growth has been the most incredible
dynamic in California's economic recovery. There is no way--no way--
that a Senator from California, in my opinion, should vote against
anything that would put a damper on this extraordinary growth.
What is interesting to me--because I have listened to the debate and
I have heard Senator McConnell use the term ``race-based'' several
times--is that white males have always been eligible for the DBE
Program. They can participate, as well as, of course, minorities and
women. Now, under the new regulations, everyone who participates will
have to be certified that they are in fact disadvantaged. In other
words, wealthy individuals, whether they are white, whether they are
black, whether they are brown, whether they are women--none of them can
participate in this program if, in fact, they are not disadvantaged.
So, Mr. President, it is very clear to me--and it is as clear as it
can be--that this program is about assuring every American, regardless
of their background, wherever they are from, that they will have a fair
chance as small businessowners to participate in this very important
highway program. I want to say, as a member of the Environment and
Public Works Committee, it really makes me proud to see the leadership
from my chairman, Senator Chafee, and the ranking member, Senator
Baucus. I think that the two of them have really shown the way.
I want to also point out that Senator Warner, by adding his strong
voice to this debate, is also making a point that in this great Nation
the last thing we want to do is put a damper on the growth of small
business. In fact, people talk about being colorblind. This program is
colorblind. This program is open to all who need to have an
opportunity.
I am very proud to stand with Senators Chafee, Baucus, Warner, and
Domenici in casting a vote that will, in fact, allow this program to
continue. And, indeed, after I have read the new guidelines that will
be coming out, I think this is going to be a program that all of us can
be proud of.
Thank you very much, Mr. President.
Mr. SMITH of New Hampshire. Mr. President, I want to join my
colleague from Kentucky in supporting his amendment to end one of the
many costly, unfair, and unconstitutional minority set-aside programs
in our federal government. As the Senator has already stated, the
Intermodal Surface Transportation Efficiency Act (ISTEA) mandates that
``not less than 10 percent'' of federal highway and transit funds be
allocated to ``disadvantaged business enterprises''--firms owned by
officially designated minority groups presumed to be ``socially and
economically disadvantaged.''
In 1995, the Supreme Court spoke on this issue in its Adarand versus
Pena decision. While I will not go into detail on this decision since
it has already been explained by the Senator from Kentucky, suffice it
to say that both the Supreme Court and a U.S. district court have ruled
that this minority
[[Page S1434]]
set-aside program is unconstitutional. Plain and simple, this is an
affirmative action program for contractors. And, the Administration's
attempt to comply with the court's decision by tinkering with DOT
regulations does not meet the constitutional litmus test. Therefore, it
is now incumbent on the Congress to bring ISTEA into compliance with
our Constitution.
It is one thing for the Federal Government to carry out unfair,
quota-based programs, which I oppose, but it is even more egregious
that the Federal Government mandate that our states carry out such
programs. This is a time-consuming and costly burden on some states,
like New Hampshire, that simply do not have a significant racial
minority population. It forces the state into situations where it is
either awarding contracts to less qualified contractors or jumping
through bureaucratic hoops trying to prove that it cannot meet the 10
percent DBE goal. Both of which are not good public policy.
By continuing this and the other 150-plus preferential treatment
programs, we are encouraging businesses to tie their business strategy
to unconstitutional programs that will eventually be eliminated by the
courts. This is sending the wrong message to minority start-up
businesses.
A better way to encourage minority entrepreneurs is with a small
business out-reach program as outlined in the McConnell amendment. This
alternative program would still provide assistance to smaller,
minority-owned businesses without the heavy-handed mandate on our
states.
Most Americans do not support preferential treatment programs. We now
have an opportunity to end one of the many race and gender-based
programs in our federal contracting system. I urge my colleagues to
uphold the principles of our Constitution and support the McConnell
amendment.
Amendment No. 1687
Mr. INHOFE. Mr. President, I rise today to discuss an amendment that
I offered yesterday, amendment number 1687, to S. 1173, the ISTEA
Reauthorization Act. This amendment was agreed to by voice vote. This
amendment was cosponsored by Senator Breaux, Senator Byrd and Senator
Sessions.
The purpose of my amendment was to provide the necessary flexibility
and funding to the States that was promised by President Clinton and
EPA Administrator Browner for the new National Ambient Air Quality
Standards for ozone and particulate matter. These standards were
promulgated last July. My amendment in no way ratifies or affirms the
underlying standards. These standards are the subject of various
lawsuits and pending legislation which seeks to overturn the standards
in part or in whole. This amendment simply relieves the uncertainty for
the States during the implementation phase over the next few years.
The President and Administrator Browner promised a flexible
implementation time frame for the standards which was not based in the
Clean Air Act. This amendment ensures that the implementation of the
standards would not occur at a faster rate than the President promised.
The first section of the amendment, Section 2(a) provides that the
EPA will fund all of the costs for the PM monitoring network with new
program dollars and just doesn't take money from other State grants.
The States claim that the EPA has reprogrammed fiscal year 1998 dollars
from existing State Grant authorities, the amendment requires that
these funds be repaid to the States. This provides the assurance to the
States that this will not be another unfunded mandate. It also restores
the grant funds to the States that the EPA diverted to the monitoring
program in 1998.
Section 2(b) ensures that the national network (designated in section
2(a)) which consists of the PM2.5 monitors necessary to implement the
national ambient air quality standards will be established by December
31, 1999. EPA will have received the funding from Congress and they
will be responsible for ensuring that the network will be in place. If
they fail, they will be subject to legal action and must explain the
cause of any delay.
Section 2(c) requires that the PM monitoring network be in place and
that the States have three years of monitoring data before the
Governors are required to submit their recommendations to the EPA.
Under the Clean Air Act the Governors must examine the data and notify
EPA when an area in their State violates the standards. This will stop
the possibility of the EPA being sued by a citizens group demanding
that an area be classified before the data has been collected. The
Clean Air Act does not require the monitoring data to be collected
first. But the President and the EPA promised they would wait for the
three years of data. This provision provides the legal authority to
wait for the data.
Section 2(d) follows the Clean Air Act and the EPA's implementation
schedule, it is the EPA's official review of the Governor's
recommendations. It ensures that the Governor's data and information is
correct and allows EPA the time to publish the decision in the Federal
Register.
Section 2(e) addresses the concerns of the farmers who believe that
they will be targeted for PM 2.5 even though their emissions are larger
than 2.5. The study will examine the monitoring devices to ensure that
they do not capture larger particles. This section is endorsed by the
American Farm Bureau who wrote, ``The agriculture community continues
to be concerned over the accuracy of EPA's fine particulate
measurements, especially in regard to agriculture emissions. Testimony
has been given in both the Senate and House Agriculture Committees
indicating concern that agriculture would be `misregulated' due to
inaccurate fine particulate measurements. This amendment will allow a
comparison of EPA's approved method used to measure fine particulate
and the new monitors to find if both adequately eliminate those
particles that are larger than 2.5 micrograms in diameter.''
Section 3(a) follows the EPA's and the President's timeline for
allowing the Governors two years to review the current ozone programs
before they have to designate nonattainment areas. It allows the
Governors to review the other ozone programs such as the new regional
ozone transport program before they make new decisions about the new
ozone standard.
Section 3(b) follows the Clean Air Act and the EPA's implementation
schedule, it is the EPA's official review of the Governor's
recommendations. It ensures that the Governor's data and information is
correct and allows EPA the time to publish the decision in the Federal
Register.
Finally, Section 4 protects the pending lawsuits so that others can
raise the issues of Unfunded Mandates, Small Business Review, the
validity of the standards, and other issues without having this
amendment impede their legal rights. It affirmatively states that this
amendment is not a ratification of the new standards and any and all
legal challenges to the standards are still valid and real.
The PRESIDING OFFICER. Who yields time?
Mr. CHAFEE. Mr. President, we have completed on this side.
____________________