[Congressional Record Volume 144, Number 22 (Friday, March 6, 1998)]
[Senate]
[Pages S1481-S1498]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        INTERMODAL SURFACE TRANSPORTATION EFFICIENCY ACT OF 1997

  The PRESIDING OFFICER. The Chair lays before the Senate S. 1173, 
which the clerk will report.
  The assistant legislative clerk read as follows:

       A bill (S. 1173) to authorize funds for construction of 
     highways, for highway safety programs, and for mass transit 
     programs, and for other purposes.

  The Senate resumed consideration of the bill with a modified 
committee amendment in the nature of a substitute (Amendment No. 1676.)
  Pending:

       McConnell amendment No. 1708 (to amendment No. 1676), 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 race, color, national origin, or sex, with respect 
     to use of those funds, in compliance with the equal 
     protection provisions of the fifth and 14th amendments to the 
     Constitution.


                           Amendment No. 1708

  The PRESIDING OFFICER. Who yields time?
  Mr. CHAFEE. Mr. President, I yield the Senator from Massachusetts 10 
minutes.
  The PRESIDING OFFICER. The Senator from Massachusetts is recognized.
  Mr. KENNEDY. Mr. President, the Disadvantaged Business Enterprise 
program in ISTEA has given numerous women and minority-owned businesses 
the opportunity they deserve to compete for federal highway 
construction

[[Page S1482]]

contracts. Since it began in 1982 and was expanded to include women in 
1987, the face of the construction industry has changed dramatically--
we still have far to go, but because of this program, we have come a 
long way.
  Today, however, we are faced with a choice. Do we continue to move 
forward or do we turn back, and return to the virtually all-male, all-
white construction industry that we had in the 1970s? Members of the 
Senate must consider this question carefully, because we know what will 
happen if the program is eliminated.
  In 1978--before implementation of the program--women and minorities 
received less than 2 percent of all federal contracting dollars. In 
1979, the figure was 2.22 percent--and no federal dollars went to 
women-owned firms--zero. Clearly, America had to do better, and the 
need to give women and minorities a fair opportunity to bid for 
contracts led to the implementation and expansion of the program in 
1982 and 1987, respectively.
  Because of these state and federal initiatives, women and minority-
owned firms made great strides in the construction industry. It wasn't 
until the Supreme Court's decision in Richmond versus Croson in 1989, 
that this progress began to slow. The Croson decision required 
application of the strict scrutiny test to state affirmative action 
programs, and, as a result, several states eliminated these measures.
  But, contrary to what some have said, the Croson decision was not the 
death-knell for these state and local programs. Many of these easily 
met the strict scrutiny test--in Denver and King County, Washington, 
for example--and other programs were revised to meet the constitutional 
requirement.
  One of the most important lessons in the wake of the Croson case is 
the evidence of what happens when these programs are eliminated. There 
has been a shocking disparity in participation levels by minorities and 
women in states setting goals under ISTEA for federal dollars, but not 
setting goals for state contracting dollars.
  In Nebraska, 10.5 percent of federal dollars went to disadvantaged 
business enterprises because of ISTEA goals--but only 3.6 percent of 
state dollars went to these firms.
  In Louisiana, 12.4 percent of federal dollars went to such firms 
because of ISTEA goals, but only 0.4 percent of state dollars went to 
the same firms.
  In Missouri, 15.1 percent of federal dollars went to such firms, but 
only 1.7 percent of state dollars did. The trend is the same in every 
other state that does not have such a program.
  This is not what we want for federal transportation contracts. It 
makes no sense to destroy women and minority-owned businesses and wipe 
out the 100,000 jobs that they create. That cannot possibly be the goal 
of this Republican Senate.
  The disadvantaged business enterprise program is essential for the 
survival of these firms. Not because they aren't qualified. Not because 
they can't compete on merit. But, because too many in the construction 
industry are not willing to give qualified firms a chance if they are 
owned by women or minorities.
  Ask the women and minorities who are certified for this program. Mary 
Aguillar-Lancome, president of Coast and Harbor Associates in Boston 
told me, ``If there is a goal, prime contractors will call DBEs; if 
not, they will not call.'' Other firms have made similar comments. Jack 
Bryant, President of Jack Bryant Associates in Massachusetts told me, 
``Without goals, most in the construction industry would not make a 
good faith effort to work with women and minority-owned businesses. The 
elimination of this program would be disastrous.''
  Of course, the program doesn't just help women and minorities. It 
extends a helping hand to firms owned by white males, as well. They can 
be certified to participation if they prove that they have been 
disadvantaged. Just ask Randy Pech--the owner of the Adarand 
Construction Firm--because he is currently seeking certification.
  It is preposterous to argue that the Sultan of Brunei would be 
certified, but that an economically disadvantaged white man would not. 
That cannot happen, and the new regulations clarify the certification 
requirements.
  Mr. President, I want to show this chart, which illustrates very 
clearly what happens when you have the Federal highway program with the 
DBE Program and no DBE Program for State-funded programs.
  The red indicates the various States that do not have the DBE 
Program. And you can see what happens in terms of women and also 
minority construction firms versus those States that are part of the 
Federal system. The contrast is so dramatic that I think it makes a 
powerful case. What we are talking about is quality programs--those 
programs that are going to meet the price competition and also the 
other competitive forces.
  But this illustrates what the principal problem is. I think it is 
incorporated in this statement by Elaine Martin, president of the 
MarCon Company in Nampa, ID.

       Most companies can point to one or two jobs that made it 
     possible for those companies to succeed. My essential job 
     would not have been awarded to me without the DBE program. I 
     was low bidder on a job in 1987 where the owner told the 
     estimator to give the job to a larger male-owned firm that 
     had a higher bid than mine. The estimator told the owner that 
     the job had DBE, and as the low bidder I should be given the 
     opportunity to perform.

  We have instance after instance.
  Dorinda Pounds, President of Midwest Contractors, Inc., in Cedar 
Falls, IA:

       One of the major reasons that my investors and my banker 
     was willing to take the risk with my new company was that I 
     had the opportunity to become certified as a DBE contractor. 
     Without the DBE program they felt the ``good old boy'' system 
     would lock me out and would keep me from having a chance to 
     become successful.

  That case has been made hour after hour during the course of this 
debate. We know what the issue is. We are talking about simple fairness 
and justice for women and minorities in our country to participate in a 
program that is being paid for by American taxpayers. The American 
taxpayers, women and minorities, are contributing the tax dollars that 
go to this program. All we are saying is they shouldn't be excluded 
from being able to participate in the program.
  Those who are trying to strike this program are effectively doing 
that. They may couch that in different kinds of language, but the 
record is very clear what the bottom line is going to be and what the 
results are going to be. The case couldn't be any clearer.
  I urge my colleagues to support this program. A vote for this program 
is a vote for fair opportunity for women and minority-owned 
construction firms, as well as for many other small businesses around 
the country. All these business owners ask is a fair chance to compete. 
We cannot and we must not deny them that opportunity.
  This is one of the most important civil rights votes of this Congress 
and one of the most important civil rights issues of the 1990s. It is 
time for the Senate to do the right thing, and stand up for civil 
rights and equal opportunities for all.
  I yield the floor.
  Several Senators addressed the Chair.
  The PRESIDING OFFICER. The Senator from Kentucky.
  Mr. McCONNELL. Mr. President, under the time controlled by the 
Senator from Kentucky, I yield 5 minutes to my friend from Texas.
  The PRESIDING OFFICER. The Senator from Texas.
  Mr. GRAMM. Mr. President, I rise in support of equal rights and civil 
rights and in support of this amendment.
  This program is not an issue about giving people an opportunity. It 
is a clear quota. It is a quota in the law that says not less than 10 
percent of the $208 billion that will be spent under this bill has to 
be spent through contractors who are not necessarily small or 
disadvantaged economically. Many of them are quite large, quite 
successful. But, what they have to fulfill is a quota based on race and 
gender. This is a violation of everything for which America stands. It 
is in violation of the Constitution. This specific provision was struck 
down in the Adarand case by the Supreme Court of the United States.
  I am strongly in support of this amendment.
  I want to make a point of expressing my admiration for our colleague 
from Kentucky. I have found that on those tough issues when our 
constitutional rights are threatened, there is almost

[[Page S1483]]

always one Member of the U.S. Senate who rises in defense of our 
freedom, and that is Mitch McConnell from Kentucky. Whether the issue 
is campaign finance reform, which is a cloaked effort to deny people 
freedom of speech, or whether it is quotas which violate the basic 
principle of equal opportunity, there is one man in the Senate who 
always stands up for our constitutional rights. I want him to know that 
his colleagues admire him and love him for that.

  There are two issues I want to address. No. 1, this provision, which 
the amendment of the Senator from Kentucky would strike, has been 
declared unconstitutional in the Adarand decision and, in fact, the 
court has said that section 1003(b) of ISTEA, which is repeated in this 
bill, and the regulations promulgated thereunder, are unconstitutional.
  I want to remind my colleagues that whether it was 6 years ago, 4 
years ago or 2 years ago, we each stood right down there in the well of 
the Senate, put our hand on the Bible, and swore to uphold, protect, 
and defend the Constitution against all enemies, foreign and domestic. 
Sometimes we are the enemies. The issue here is, are we going to uphold 
the Constitution or are we not? When it comes to the Constitution, put 
me down on the side of the Constitution.
  The second issue is fairness. We all want to help people compete. We 
all want Americans to have equality of opportunity, but you cannot have 
equality of opportunity through a program that clearly discriminates 
against people. There is only one fair way to decide who gets a 
contract and that is competition based on merit and price.
  The General Accounting Office, in a 1994 study, concluded that 
ISTEA's racial preferences over the next 6 years will cost the Nation 
$1.1 billion in unnecessary construction costs. The GAO also concluded 
that the program in this bill is not an avenue for contractors to 
become competitive. Less than 1 percent of the contractors who get 
special privileges under this bill graduate to become competitive 
contractors in the marketplace.
  Finally, let me note that the amendment by the Senator from Kentucky 
strikes down the unconstitutional provision on ``disadvantaged business 
enterprises''--which has nothing to do with disadvantaged business 
enterprises--and substitutes a new provision on emerging business 
enterprises, which is clearly constitutional. This provision includes 
outreach programs to help small businesses, no matter if the head of 
the business is a man or a woman, no matter what their ethnic 
background is. It helps people compete. It helps them find bonding. It 
helps them do the very complicated and expensive work of applying for a 
Federal contract. And, in fact, it is a better, more fair way because 
it is based on the American system.
  I believe in merit. If there is one principle on which America is 
established, it is the principle of equal opportunity. It is not 
equality to exclude people from competing based on race, color, 
national origin or sex.
  I yield the floor and thank the Chair.
  The PRESIDING OFFICER (Mr. Enzi). The time of the Senator has 
expired. The Senator from Kentucky.
  Mr. McCONNELL. I thank my good friend from Texas for his overly kind 
observations about my work. I thank him for his support for this 
important amendment.
  The PRESIDING OFFICER. The Senator from Rhode Island.
  Mr. CHAFEE. Before the distinguished Senator from Texas leaves, I 
want to say I always appreciate the opportunity to hear him debate on 
the floor because he is very good. In his admiration for the efforts 
that the Senator from Kentucky is making to defend our Constitution, as 
he outlines, I hope we can enlist the support of the Senator from Texas 
against an amendment that is clearly against the Constitution and 
restricting efforts there, and that is the so-called ``burning of the 
flag'' amendment. We would be glad to have him sign up against that 
pernicious proposed addition--I hope it never passes here--in 
connection with the Constitution.
  Mr. GRAMM. Will the Senator yield?
  Mr. CHAFEE. Yes.
  Mr. GRAMM. I do not think I will be attending any flag-burning 
parties. I think it is important to note that when you are dealing with 
a constitutional amendment, it is a question of whether you want to 
make that provision part of the Constitution, not whether or not it is 
constitutional now.
  If Senator Kennedy wanted to amend the Constitution to say that we 
have privileged Americans who are going to be treated differently than 
everybody else, and that we are going to discriminate against others in 
their favor, he would have a perfect right to do that. That provision, 
if it became part of the Constitution, would be the law of the land.
  The point is he would be up against a much bigger opponent than he 
would like people to believe, and that opponent is the Constitution of 
the United States, Jefferson, Washington, Lincoln, and every serious 
thinker about economic and political freedom in the history of this 
country.
  I yield the floor.
  Mr. CHAFEE. I am delighted that he has had a roll call of heroes of 
the country, but before he leaves I would point out one thing. It is 
not often that he is inaccurate, but I am afraid that he went overboard 
a little bit today when he suggested that the Supreme Court in the 
Adarand decision had struck down as unconstitutional the provisions of 
the affirmative action program. What the Supreme Court said in the 5 to 
4 decision--I am talking about the Supreme Court. I like to deal with 
the Supreme Court. What it did is remanded that case. It did not say it 
was unconstitutional. Any talk of unconstitutionality came by the lower 
court which then examined whether the provisions in the Adarand 
situation conformed to the restrictions that the Supreme Court was 
applying.
  I just want to say to the distinguished Senator from Massachusetts--
and by the way, I am on my time now, Mr. President--I think he is 
exactly right when he points out the difference between what happens 
when you have a State program with no admonitions in it, or 
requirements as far as minority contractors go, and what happens when 
you have the Federal program when the efforts are made. I might say 
these, the goals, are voluntary in the States. In Kentucky--I was 
pleased to see that Kentucky is considerably above the 10 percent. 
Kentucky itself is at 11.5 percent. In my own State, when we have the 
State programs with none of the Federal requirements in them--with the 
Federal requirements we are at 12.1 percent to minority contractors; 
when we do it with the State's money, we are at zero. That is my State, 
at zero when we deal with the State handing out its money. But when we 
deal with the Federal Government's requirements, then we go up to 12.1 
percent. So it shows the difference that the Federal Government's 
requirements make. Therefore, I am very much in favor of the language 
that is currently in the law and am in opposition to the McConnell 
amendment.
  Again, I would point out to everybody, if those who are against these 
preferences want to come out with a bill that deals with it 
generically--as we pointed out before, there are some 60 different 
programs--bring it out on the floor and let's debate it. But let's not 
do it one by one in individual programs such as this, and particularly 
this one where we have, as I pointed out yesterday, a letter from the 
Secretary of Transportation saying that he could not recommend the 
President sign this measure if the McConnell amendment should pass.
  Mr. KENNEDY. Will the Senator yield for a brief question?
  Mr. CHAFEE. I will.
  Mr. KENNEDY. Since the Senator has referred to Rhode Island, I am 
wondering, as the manager of this legislation dealing with the surface 
transportation, whether you have complaints from the contractors about 
the inefficiency or the poor quality of work, or the failure of being 
on time? Or the fact that here in Rhode Island, when they are using the 
Federal funds, it is 12.1 percent?
  Generally speaking, I have not, in the course of this debate, heard 
complaints that the work that is being done with the DBE has been not 
of first-rate quality, on time, and effective work. I am just wondering 
if the Senator from Rhode Island is receiving a lot of complaints 
because the DBE Program is in effect in his State?

  Mr. CHAFEE. No. I want to report that we have not received 
complaints. Indeed, as I pointed out, my State has

[[Page S1484]]

gone beyond the 10 percent. We are up to 12.1 percent. It is impressive 
how many States have gone considerably beyond. Our neighboring State, 
Connecticut, is at 15.7 percent. The suggestion that these are onerous 
restrictions that cause chaos amongst the States in dealing with these 
preferences just plain isn't true.
  Mr. KENNEDY. I thank the Senator. I yield.
  The PRESIDING OFFICER. The Senator from Kentucky.
  Mr. McCONNELL. I momentarily am going to yield 10 minutes to the 
Senator from Ohio. We had extensive discussion yesterday about what the 
Adarand case did and didn't do. What it did do was lay out a standard 
which this provision of the bill couldn't possibly meet and sent it 
back to the district court in Colorado, which found that this section 
of ISTEA was unconstitutional.
  We could argue this round and round and round, and we have argued it 
round and round and round. But I don't think there are serious 
constitutional scholars who believe that the Adarand case didn't set up 
a standard that this section of the bill could not possibly meet.
  I yield 10 minutes to the distinguished Senator from Ohio.
  The PRESIDING OFFICER. The Senator from Ohio.
  Mr. DeWINE. I thank my friend and colleague from Kentucky.
  Mr. President, I would like to offer a few thoughts on the pending 
amendment offered by my good friend from Kentucky, Senator McConnell.
  I intend to vote for the Senator's amendment. A new approach from the 
current set-aside is clearly needed--a new approach is needed because 
the current system, the current law, violates the United States 
Constitution.
  The United States Supreme Court, in Adarand Constructors v. Pena, 515 
U.S. 200 (1995), ruled that racial classifications are unconstitutional 
unless narrowly tailored to further a compelling government interest. 
The federal district court in Colorado in the case of Adarand 
Constructors, Inc. v. Pena, 965 F. Supp. 1556 (1997)--following the 
guidelines set by the Supreme Court--found that the current racial set-
aside for federal highway contracts is unconstitutional. The district 
court found that the 10% set-aside for federal highway contracts and 
the race-based presumptions contained in the implementing regulations 
were not narrowly tailored--they excluded certain unlisted minority 
groups who may very well have been socially and economically 
disadvantaged, while presuming that all minorities in the listed groups 
were economically disadvantaged, and in some cases, socially 
disadvantaged.
  Other federal courts, in applying the same strict scrutiny test to 
other federal, state, and local race-based laws and regulations, have 
consistently found that these racial preferences are not 
constitutional. In Ohio, a case is pending before the Ohio Supreme 
Court (Ritchey Produce Company v. Ohio Department Of Administrative 
Services, Supreme Court of Ohio, 1998 Ohio LEXIS 495). A Lebanese-
American did not fall within the listed minority groups who received 
preferential treatment under the Ohio set-aside program, so he was 
denied certification as a minority contractor. Even if the majority of 
his workforce consisted of the listed minority groups--that company 
would still not be eligible to receive minority certification under the 
current standards.
  Thus, given the constitutional guidelines that have been clearly 
established by the Supreme Court, we in the Congress face a fundamental 
choice--we can stand aside and watch federal courts dismantle race-
based set aside programs one-by-one, or we can exercise leadership and 
meet the challenge head on--by initiating a new approach that targets 
our resources to economically disadvantaged individuals in depressed 
areas who want a shot at the American dream. To his credit, the Senator 
from Kentucky has shown leadership by offering such an innovative, 
constitutional approach. His ideas are not totally new.
  In 1980, New York Mayor Ed Koch inaugurated a race-neutral 
affirmative action program targeted at the economically disadvantaged--
providing a 10% set-aside for small firms that did at least 25% of 
their business in disadvantaged neighborhoods, or employed 
disadvantaged workers as at least 25% of their workforce. This program 
has served as a model for other cities nationwide.
  In several respects, the Senator from Kentucky's amendment borrows 
from the Koch program. His amendment would target opportunity 
assistance programs toward businesses based not on the owner of the 
business exclusively, but on who's working for the business and just as 
important, who the business is serving. Specifically, the McConnell 
amendment targets assistance toward new businesses located in 
economically disadvantaged areas, or has a workforce half of which are 
employees from economically disadvantaged areas.
  This direction--to reach out to the economically disadvantaged, 
including minorities and women--will do much to promote the interests 
of minorities and the country as a whole. By reaching out to businesses 
that employ the disadvantaged or that are located in depressed areas, 
we are doing more than just helping disadvantaged businesses, we're 
uplifting entire communities.
  It's more than affirmative action--it's community empowerment.
  I would also like to point out that my friend from Michigan, Senator 
Abraham, was instrumental in the drafting of this specific provision. I 
commend him for working with the Senator from Kentucky--it reflects 
their strong interest and support for innovative approaches to 
community renewal.

  I also commend the Senator from Kentucky for placing a time limit on 
assistance. Assistance under this program would be offered to firms 
that have been in existence for less than nine years. That just makes 
sense. The best business development programs are those that help new, 
disadvantaged businesses stand on their feet and compete.
  That's exactly what the McConnell amendment would do. Specifically, 
the McConnell amendment provides a host of services for eligible 
businesses--services ranging from financial counseling, business 
management, and technical assistance for eligible businesses seeking 
contracts under federal transportation programs.
  Taken together, these provisions in the McConnell amendment represent 
a positive approach that is consistent with the Constitution and with 
the wisdom and intent of those who first championed the idea of 
affirmative action--action to provide equality of opportunity for 
individuals.
  Now Mr. President, let me be candid--if given the opportunity, I 
would have taken the McConnell amendment one step further. I would have 
maintained the set-aside program--one that would have been acceptable 
under our Constitution. I believe we can and should have race-neutral 
set-aside programs for new, economically disadvantaged businesses. The 
fundamental problem with the existing program is not the set-aside 
itself--but who receives it and how they are defined. The current 
program gives an advantage to those who may not need it--individuals 
who were given a chance based solely on race or racial goals. That's 
why the federal courts have found this and other set-aside programs to 
be unconstitutional. Therefore, I would support a set-aside program 
that provides time-limited business opportunities to businesses who 
employ or serve the truly disadvantaged--a program that goes beyond 
outreach and recruitment, and gives disadvantaged businesses a chance 
to do business--much like Mayor Koch did in New York a decade ago.
  Unfortunately, such a program is not before us today. We do not have 
that option. The choice today is between an unconstitutional law or a 
new constitutional plan that will provide hope and opportunity for the 
disadvantaged. While the McConnell amendment does not go as far as I 
would like or as far as I would go, it is clearly constitutional and it 
is clearly an effective way to help the disadvantaged. It is a 
significant improvement over the status quo.
  This amendment represents a positive, imaginative step in the right 
direction--one that is true to our Constitution and to our commitment 
to equal opportunity. I therefore urge my colleagues to vote in favor 
of this amendment.
  Mr. McCONNELL addressed the Chair.

[[Page S1485]]

  The PRESIDING OFFICER. The Chair recognizes the Senator from 
Kentucky.
  Mr. McCONNELL. Mr. President, I thank the distinguished Senator from 
Ohio for his contribution to this important and sensitive debate. I 
thank him very, very much for his support.
  Mr. President, how much time do I have remaining?
  The PRESIDING OFFICER. The Senator has 26 minutes 15 seconds.
  Mr. McCONNELL. I reserve the remainder of my time.
  The PRESIDING OFFICER. Who yields time?
  Mr. BAUCUS. How much time do we have left, Mr. President?
  The PRESIDING OFFICER. Twenty-six minutes 49 seconds.
  Mr. CHAFEE. I yield 12 minutes to the Senator from Pennsylvania.
  The PRESIDING OFFICER. The Chair recognizes the Senator from 
Pennsylvania.
  Mr. SPECTER. Mr. President, I thank my distinguished colleague from 
Rhode Island for yielding me 12 minutes. Perhaps I shall not need it 
all.
  I have sought recognition to speak in opposition to the pending 
amendment, because I think the statute, as it is presently drawn, is 
constitutional.
  The most recent articulation of the guiding legal principles were set 
forth in Adarand, and Justice O'Connor for the Court said that strict 
scrutiny does not require the elimination of a program designed to 
protect those who have been discriminated against as long as there is 
the requisite narrow tailoring.
  She noted the underlying factual basis which does persist to this 
day:

       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.

  That is precisely what is being done in the statute at hand.
  Justice O'Connor noted that as recently as 1987, every Justice on the 
Supreme Court of the United States agreed that the Alabama Department 
of Public Safety's ``pervasive, systematic and obstinate discriminatory 
conduct'' justified a remedy, and it was upheld in the case of United 
States v. Paradise.
  Even Justice Scalia, in his concurrence in the City of Richmond v. 
Croson, noted that there was at least one circumstance where the State 
may act to ``undo the effects of past discrimination.''
  When we deal with this area, it is an extraordinarily complicated 
matter and it is very fact-sensitive. I think it is important to note 
that the statute in question here does not involve the same underlying 
law which was at issue in Adarand.
  In Adarand, the issue involved the Department of Transportation's use 
in its own direct contracts of Federal compensation to encourage 
Federal prime contractors. This issue involves the constitutionality of 
section 1003(b)(3) of ISTEA, which sets a 10-percent goal for 
expenditures of authorized funds for disadvantaged business 
enterprises.
  The effort has been made in a very strenuous and, I think, successful 
way to accomplish the kind of narrow tailoring which was called for in 
Adarand and which is constitutionally mandated.
  I ask unanimous consent, Mr. President, to have printed in the Record 
at the conclusion of my remarks the specification as to how the new 
Department of Transportation regulations are narrowly tailored.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See Exhibit 1.)
  Mr. SPECTER. Mr. President, the cases in this area have been very 
complicated, very fact-sensitive, customarily decided, or frequently 
decided, on a 5-4 basis. There are very, very important objectives in 
the pending statute. There is a general agreement that quotas are wrong 
for America, and I believe, beyond that, it is inappropriate to give an 
applicant a position where the applicant is less well-qualified than 
some other applicant.

  I am convinced that if we take the applications for Yale or Harvard 
or Duke or Cornell or any other fine educational institution, that if 
there was to be sufficient outreach, we would find minorities who would 
be well-qualified to take positions in those institutions and that they 
would not, in fact, be displacing someone who was better qualified. It 
is a matter of outreach. What the legislation at hand seeks to do is to 
implement that concept of outreach.
  There has been a glass ceiling as to women, which is very well known. 
The glass ceiling is at ground zero. It is very hard to break into the 
kind of construction trades which are at issue in this ISTEA 
legislation. There is no doubt about the problems that other minorities 
have had. This is a plan to provide that outreach and that opportunity 
without displacing better qualified individuals or better qualified 
firms.
  For the argument to be made that this act is unconstitutional and 
that Members of the Senate are sworn to uphold the Constitution, 
drawing the suggested inference that we are violating our oaths of 
office in supporting the legislation as is currently written, I think 
is far, far beyond the mark, to put it in a very, very diplomatic 
context.
  This is an important provision. I believe that it is constitutional 
as applied with the narrow tailoring of the Department of 
Transportation regulations and that it meets the obligations of strict 
scrutiny under the U.S. Constitution. As a matter of public policy, it 
moves in the right direction.
  This is only one of many efforts by the Government to open the door 
on outreach, and I believe that is a very, very sound proposition.
  In my own personal experience as district attorney of Philadelphia, 
when I had hiring of a great many people as my responsibility, I got 
the list of all the African American lawyers in the city when I took 
office and made a systematic effort to call them on a matter of 
outreach and found that I could locate very well-qualified people to 
take the positions, not giving them any preference, not giving them any 
affirmative action in the sense of having people take those jobs who 
are less well-qualified than others who apply for them.
  The same thing followed in the detective branch where the detectives, 
men and women, were selected from the Philadelphia Police Department. 
It was a matter of outreach. It did take a little more effort to 
interview more people to find those in the minority who were well-
qualified and that they did not displace better qualified people to 
accomplish that result.
  As long as we have a system which does not discriminate against the 
better qualified, I think we have a system which is sound and is a 
matter of outreach, which is very important in this country today.
  I intend to oppose the pending amendment, and I urge my colleagues to 
oppose the pending amendment.
  I thank my colleague from Rhode Island. I yield back the remainder of 
my time.

                               Exhibit 1

        The New DOT Regulations--How Are They Narrowly Tailored?


                      calculation of overall goals

       Old rules: State recipients take into account the maximum 
     amount of work they can obtain from DBEs available to them, 
     and their past performance in meeting their overall goals.
       New rules: States must ask themselves: absent 
     discrimination, how much would DBEs participate in DOT-
     assisted contracts? and then look for that level of 
     participation as the goal. DOT has asked for comment on three 
     specific means of estimating this participation and setting 
     the goal, based on this concept.


                        meeting of overall goals

       Old rules: States believed they should put goals on every 
     contract.
       New rules: No requirement of setting a goal for each 
     contract. State's first effort should be race/gender neutral 
     efforts, such as outreach and technical assistance. If that 
     is insufficient, then states may consider race/gender 
     conscious measures, such as contract goals. More intrusive 
     mechanisms, such as set-asides, may only be used if the state 
     has legal authority outside of the DOT regulations, and has 
     made a finding that the other means had not worked. Finally, 
     once a state finds that the effects of discrimination had 
     been addressed effectively, the use of race/gender measures 
     must be reassessed.


                           good faith efforts

       Old rules: There was general guidance from DOT on the 
     granting of good faith waivers, but enforcement was not 
     strong.
       New rules: DOT emphasizes to states that they must take 
     seriously their obligation to award a contract to a bidder 
     who has made a good faith effort, and that doing otherwise

[[Page S1486]]

     would be a de facto quota. In addition, states must provide a 
     mechanism for reconsideration to bidders who are denied 
     contracts on the basis of lack of good faith. The mechanism 
     must allow contractors to make oral/written submissions about 
     the denial, and must provide for a review of the decision by 
     a neutral body before the contract is awarded.


                          dbe diversification

       Old rules: No provision.
       New rules: DOT requested comment on how to diversify the 
     types of work in which DBEs are involved, and reduce 
     concentration of DBEs in certain areas. The intent to promote 
     competition in non-traditional DBE areas, as well as reduce 
     pressure for non-DBEs in areas of typically heavily DBE 
     involvement. After receiving comments, DOT is now looking at 
     new ways to achieve that diversification goal, focusing on 
     the reasons for that concentration.


                    added flexibility for recipients

       Old rules: There were some waivers granted, and some 
     flexibility in the program.
       New rules: States with goal setting programs different than 
     the DOT program can submit to their program to DOT for 
     review; and if their program appears to be more effective 
     than the DOT program, the state can implement it. DOT will 
     grant broad program waivers for states who think they can do 
     it better their way.

  Mr. CHAFEE addressed the Chair.
  The PRESIDING OFFICER. The Senator from Rhode Island.
  Mr. CHAFEE. I thank the distinguished Senator from Pennsylvania for 
those very fine comments. We certainly appreciate his support in this 
effort.
  Mr. McCONNELL addressed the Chair.
  The PRESIDING OFFICER. The Chair recognizes the Senator from 
Kentucky.
  Mr. McCONNELL. Mr. President, I rise today to speak on behalf of my 
amendment to bring the federal highway bill into compliance with the 
equal protection clause of the Constitution and with various federal 
court rulings, including two landmark Supreme Court cases.
  The question for the Senate this morning is this: Is it fair, prudent 
and constitutional for the Federal Government to set-aside a fixed 
percentage of public highway contracts for a preferred group of 
citizens--until the year 2004, mind you--based on the immutable traits 
of race and gender?
  Or let me phrase it another way: Should U.S. Senators, all of whom 
have sworn an oath to uphold the Constitution, reauthorize a law that 
has been reviewed by the United States Supreme Court and subsequently 
struck down by a Federal court in Colorado?
  Mr. President, I say the answer to this question must be a firm and 
resounding ``no.''
  We must stand up for the Constitution. We must guarantee the equal 
protection of the laws to every citizen of our country, without regard 
to race and gender.
  We must follow the clear decisions of the Supreme Court, including 
Adarand and Croson, and the decisions of the court of appeals for the 
third circuit, the fourth circuit, the fifth circuit, the sixth 
circuit, the seventh circuit, the ninth circuit, the eleventh circuit 
and the DC circuit. All of them have struck down race-based programs in 
the past few years--all of them.
  We must take heed of unambiguous rulings of lower courts in Georgia, 
Connecticut, Ohio, Louisiana, Michigan, and, most importantly, in 
Colorado.
  Let me remind my colleagues that less than 9 months ago the Federal 
district court in Colorado followed the Supreme Court's lead in Adarand 
and Croson and ruled--and I quote:

       Section 1003(b) of ISTEA and the regulations promulgated 
     thereunder are unconstitutional.

  I do not know when this body will ever have a clearer decision than 
this one. The administration and the Department of Transportation have 
tried to obscure this clarity with three or four predictable 
diversionary tactics.
  Diversionary tactic No. 1: Ignore the court decisions. The first 
diversionary tactic is simply to ignore all the cases I have just 
cited, claim that Adarand never happened or simply claim that Adarand 
was wrongly decided or that it is just one decision by one court.
  Well, I have quoted Adarand directly and pointed out, with great 
detail, that Adarand is not an aberration--not an aberration, Mr. 
President. Again, I quote the Congressional Research Service. The 
Adarand decision--this is from CRS--``largely conforms to a pattern of 
federal rulings which have invalidated state and local governmental 
programs to promote minority contracting--in: Richmond, San Francisco, 
San Diego, Dade County, Fla., Atlanta, New Orleans, Columbus, Ohio, 
[the State of] Louisiana, and Michigan, among others--and new 
challenges continue to be filed [probably as we speak].''
  For those who say that Adarand is just not enough for us to go on, 
let me cite yet another Supreme Court case, Richmond v. Croson from 
1989. In that case, the Government decided that minorities were 
underrepresented in the public construction arena. So the Government 
enacted a law like ISTEA that said: not less than 30 percent of 
construction dollars must be allocated to officially preferred--this is 
officially preferred--minority groups.
  And you know what the Supreme Court said about the so-called ``30 
percent goal''? The Supreme Court said that this ``goal'' was ``an 
unyielding racial quota.'' It was a quota, even though the Government 
plan had a waiver process to supposedly let you out of the quota in 
certain circumstances.
  Let me quote the United States Supreme Court when it applied the 
``strict scrutiny'' test to a set-aside that is virtually identical to 
the DBE that we have been talking about the last 2 days, the DBE set-
aside in ISTEA. 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 the city'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. . . . We think such a result would be contrary to 
     both the letter and spirit of a constitutional provision 
     whose central command is equality.

  Diversionary tactic No. 2: ``We've changed the law,'' they say, ``by 
tinkering with the regulations.''
  When ignoring the Court fails, then someone suggests and the 
administration claims that they have simply changed an unconstitutional 
statute by simply tinkering with the regulations. But let me point out 
that the DOT has no new regulations. All we have from DOT is a promise 
to do better. And the Senate is apparently going to turn a blind eye to 
the equal protection clause of the Constitution and authorize a $17 
billion quota on the mere promise--the mere promise--of cleaning up the 
program.
  Does that fact not strike any other Member of this Senate as being a 
bit odd? I hope it does.
  These new regulations are only in the ``proposal'' stage. We do not 
know what they will end up looking like. We do not know if they will 
make the program better or worse, constitutional or unconstitutional. 
Even DOT does not know what the new regs will look like.
  For example, my colleagues argued yesterday that the proposed 
regulations would narrowly tailor the program because they would 
include an economic cap on DBEs. My colleague from Montana argued 
yesterday that our problems are solved because the new regulations will 
exclude the Sultan of Brunei--the wealthiest monarch in the world--from 
the Disadvantaged Business Program. The sultan will not be anywhere 
near the DBE program, my good friends argue.
  Well, last night I took a close look at the proposed regulations to 
see what the economic cap would be. And you know what I found? Let me 
read to you word for word the exact language of the so-called narrowly 
tailoring economic cap.

       You may require the individual whose disadvantage is being 
     questioned to provide information about his or her personal 
     net worth.

  But the proposed rule goes on to say:

       You may require only such information as is necessary to 
     establish whether the individual's personal worth exceeds 
     [blank].

  They have not decided yet how poor you have to be.
  So what is the economic cap? We have no idea. Will there be an 
economic cap at all? We are told there will be, but it has not been 
provided yet. DOT apparently does not know. So let me say, I do not 
know whether the Sultan of Brunei will be excluded or not.

[[Page S1487]]

 The proposed regs do not tell where this narrowly tailored economic 
cutoff is.
  But, Mr. President, even if the cap excludes the sultan--and this is 
what I hope everybody will remember--even if the cap excludes the 
sultan, it still will not solve the narrowly tailored problem. You know 
why? Because even if you solve the ``economic'' problem, you have still 
not solved the ``race'' problem. The Supreme Court and the district 
court did not focus on the ``economic,'' but rather the ``race'' issue.
  Changing the economic guidelines does not change the fact that the 
DOT will still presume that all members of certain races are ``socially 
disadvantaged'' and need preferences. In other words, the proposed 
regulations do nothing to solve the most serious problem, which is that 
ISTEA will continue to make presumptions and decisions based on race, 
without any particular findings of discrimination against particular 
individuals or even particular groups in the highway contracting area.

  So even if the new regs exclude the sultan economically, everyone 
will be relieved to know that other persons from Brunei will still be 
``presumed'' to be socially disadvantaged and get preferences, even 
though no State DOT agency has ever engaged in a pervasive pattern of 
discrimination against persons from Brunei or from Tonga or Micronesia 
or the Maldive Islands. Never heard of such a case, but these people 
are all, by Government fiat, put into the class for preferential 
treatment.
  In the words of the district court in Adarand:

       It [is] 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.''
  Mr. President, let me conclude this particular point by reminding 
every Senator that Adarand and Croson are landmark Supreme Court 
decisions that are now the law of the land. The administration's 
attempt to comply with the law of the land has been to merely do a 
little DOT song-and-dance by playing with transportation regulations, 
not changing any regulations, mind you, but simply proposing them--
proposing them.
  Mr. President, complying with a landmark Supreme Court case requires 
much more than a mere ``tinkering'' with the regs.
  Professor George LaNoue is a constitutional law expert who has 
testified in numerous minority contracting cases. Professor LaNoue has 
explained in great detail how the DOT's proposed regulations fail to 
bring the DBE program into compliance with the constitution. I ask 
unanimous consent that a letter from Professor George LaNoue that 
details the substantial shortcomings of the proposed regulations be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

         University of California, Berkeley Institute of 
           Governmental Studies,
                                   Berkeley, CA, October 17, 1997.
     Hon. Mitch McConnell,
     U.S. Senate,
     Washington, DC.
       Dear Senator McConnell: It is being asserted that various 
     alterations in proposed regulations for Intermodel Surface 
     Transportation Efficiency Act (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 alterations go only to the issue of 
     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 either by the administration or by Congress.
       For example,
       1. There has been no determination about whether there has 
     been any discrimination by any federal agency in the 
     contemporary procurement process.
       2. There has been no determination about whether any state 
     DOT agency or any other state agency has discriminated in the 
     award of federal contract dollars.
       3. There has been no determination 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. There has been no determination about whether, when MBEs 
     bid on contracts, they are proportionately successful. No 
     study of who bids on federal contracts has been released.
       As the Eleventh Circuit said unanimously on September 2, 
     1997 in striking down a preferential procurement program: . . 
     . if a [race conscious] program is not grounded on a proper 
     evidentiary basis, than all of the contract measures go down 
     with the ship, irrespective of any narrow tailoring or 
     substantial relationship analysis.'' (Engineering Contractors 
     Association of South Florida v. Metropolitan Dade County, 
     1997 WL 535626, *7, (11th Cir. (Fla.))).
       Second, even if a compelling interest has been established, 
     the proposed regulations do not meet narrowly tailoring 
     requirements.
       1. There has been no statistical analysis of whether the 
     particular racial and ethnic groups granted presumptive 
     eligibility are in fact economically or socially 
     disadvantaged because of patterns of discrimination in recent 
     years. The current list of presumptive eligible groups is a 
     polyglot of designations by racial group (African Americans), 
     culture (Hispanic), country of origin (Asian Americans) and 
     lineage (Native Americans). 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 very low. Some have 
     well-documented histories of discrimination; some are 
     virtually invisible. These groups have nothing in common at 
     all.
       The district court in the remand of Adarand v. Pena found 
     that the use of race and ethnic based presumptive eligibility 
     was unconstitutional because:
       ``. . . it [is] difficult to envisage a race based 
     classification that is narrowly tailored. By it's very 
     nature, such a program is both underinclusive and 
     overinclusive. This seemingly contradictory results suggests 
     that the criteria are lacking in substance as well as in 
     reason.'' (at 59-60).
       2. There has been no post-Adarand evaluation of the 
     effectiveness of existing federal race neutral programs or 
     the possibility of creating new ones. The utility of race 
     neutral programs must be established before race conscious 
     remedies are employed. The Eleventh Circuit citing Croson 
     recently said:
       ``. . . we flatly reject the County's assertion that 
     ``given a strong basis in evidence of a race-based problem, a 
     race-based remedy is necessary.'' That is simply not the law. 
     If a race-neutral remedy is sufficient to cure a race-based 
     problem, then a race conscious remedy can never be narrowly 
     tailored to the problem.'' See, Croson, 488 U.S. at 509). 
     (Engineering Contractors Association of South Florida v. 
     Metropolitan Dade County, 1997 WL 535626, *34, (11th Cir. 
     (Fla.))).
       Race conscious measures can only be used as narrowly 
     tailored remedies for identified discrimination. Race based 
     means can not be used, as the DOT regulations provide, 
     whenever an arbitrary set-aside or goal percentage is not 
     reached in a particular state during a particular period.
       3. There has been no fulfillment of the Administration's 
     promise to create goals specific to various industries. On 
     May 23, 1996, the Justice Department proposed ``benchmark 
     limits'' for each industry 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.
       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 strongly suggests federal goals in ISTEA are not 
     narrowly tailored.
       In short, the record does not support the conclusion that a 
     compelling basis for the use of Race conscious remedies 
     exists with regard to the ISTEA program. The 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.
           Sincerely,
                                                George R. La Noue,

[[Page S1488]]

         Professor of Political Science, Policy Sciences Graduate 
           Program, University of Maryland Graduate School 
           Baltimore, Visiting Scholar, IGS, University of 
           California, Berkeley.

  Mr. McCONNELL. Diversionary tactic No. 3, Mr. President: It is said 
that ``10 percent is a goal, not a quota.''
  When all else fails, the final diversionary tactic is to argue that 
the DBE program is a program with goals, not quotas. In fact, some of 
my colleagues have gone to great lengths to point out that the 10 
percent set-aside is merely a goal with no sanctions whatsoever.
  Well, let us look at the DBE manual--right out of the manual. This 
manual is the DBE law of the land for States that receive ISTEA money. 
The DBE manual explains that failure to comply with the requirements 
will result in sanctions. Let me quote:

       If the [Federal Highway] Administrator determines that a 
     State has violated or failed to comply with the Federal laws 
     or the regulations . . . with respect to a project, he may 
     withhold payment to the State of Federal funds on account of 
     such project, withhold approval of further projects in the 
     State, and take such other action that he deems appropriate 
     under the circumstances, until compliance or remedial action 
     has been accomplished by the State to the satisfaction of the 
     Administrator.

  In other words, there are sanctions. These same threats appear in the 
actual ISTEA contracts and in the Federal transportation regulations.
  Now that I have spelled out that the threat of DBE sanctions are 
serious and real, I am sure my colleagues will respond by saying, ``OK, 
sure we list sanctions, but we never use them. So 10 percent is still 
just a goal. It's not a quota.'' The reasoning here is that the 
Government must punish someone before the ``goal'' becomes a ``quota'' 
or a ``requirement.''
  Well, first, let me say that the threat of losing millions of Federal 
highway dollars is plenty of incentive for the States to enforce the 
quota requirement. When the Federal Government is wielding that kind of 
weapon from on high, it does not have to punish them. A 10 percent 
quota is still a quota, even if States always comply and no one is 
formally punished.
  Second, if you think the quota is never enforced, just ask two cities 
in New Mexico. The Senator from New Mexico and I were having a 
discussion about this issue on the floor just yesterday. Both the city 
of Rio Rancho and the City of Albuquerque were sued in Federal court 
over the use of ISTEA's racial quotas. What did the Federal Department 
of Transportation do? Did it simply call Rio Rancho and Albuquerque and 
say, ``Hey, don't worry about the whole 10 percent thing. It's just a 
goal''?
  That is not what happened, Mr. President. Both Rio Rancho and 
Albuquerque had to sue the Department of Transportation and Secretary 
Slater in Federal court to stop the quota enforcement. In the complaint 
that the cities filed they said:

       The [Department of Transportation] is placing facially 
     unconstitutional conditions upon the receipt of discretionary 
     federal funds to which the City would otherwise be entitled 
     to, and has caused or is likely to cause irreparable injury 
     for which the City has no adequate remedy at law.

  So both Rio Rancho and Albuquerque sought a court judgment that would 
require the Department of Transportation to justify or eliminate the 
quotas and pay any and all damages and attorney fees to the cities.
  And the Federal judge was perfectly clear in declaring that the race-
based programs were unconstitutional. In the words of the judge:

       It doesn't really take a first-year law student to say, 
     City of Rio Rancho, don't do this again. I mean, you're going 
     to get sued again.

  This is from the court case.
  Unfortunately, the city of Rio Rancho, like every other city that 
receives any ISTEA funds, has little choice in the matter. ISTEA 
requires racial preferences. And if you are going to get out of the 
quota requirement, you had better be prepared to go through hell, high 
water, and the Federal courts.
  Surely, my colleagues would agree that a true ``goal'' would not 
require State and local governments to sue the Federal Department of 
Transportation in Federal court just to get the ``goal'' fixed.
  Let's turn to Houston. If Albuquerque and Rio Rancho don't prove that 
10 percent is more than just a goal, then let's go from New Mexico over 
to Houston, TX. Let me share with you some comments included in the 
ISTEA committee report on the 6-month authorization bill in the House. 
These comments were part of a very detailed and astute statement made 
by several Republican House Members.

       In April 1996, a Federal court in Texas temporarily 
     enjoined Houston's METRO transit authority from utilizing 
     race or gender-based preferences in the selection or award of 
     construction contracts--making it impossible for Houston to 
     comply with the federally-approved DBE program.
       So, in response to the court's ruling, Houston designed a 
     race-neutral program to provide assistance to economically 
     disadvantaged small businesses.

  Very similar to what the McConnell amendment would provide, an 
opportunity for emerging business enterprises.

       The US Department of Transportation refused to recognize 
     this alternative [race-neutral] program and withheld federal 
     funding from METRO for nearly seventeen months.

  Seventeen months without Federal funds, all because Houston was 
complying with a court order, Mr. President--Houston was complying with 
a court order prohibiting preferences. I don't know about you, Mr. 
President, but that sounds like a sanction to me. It sounds like a lot 
more than mere goals. It sounds like quota enforcement to any rational 
person listening to what happened.
  The point here, Mr. President, is simple arithmetic: Goals plus 
requirements equal quotas--goals plus requirements equal quotas. The 
goals in ISTEA are not merely aspirational. The goals have requirements 
and the real threat of sanctions.
  Let me spell out a few human examples about how goals in theory are 
actually quotas in practice. The first example was mentioned by Senator 
Gorton yesterday here on the floor, the insightful story about a man 
named Frank Gurney from Spokane, WA.
  We have talked a lot about victims over the course of the last 2 
days. Let's talk about some of the victims of this program. Just a 
couple of months ago, the head of Frank Gurney, Inc. mailed me a copy 
of yet another letter explaining how he lost yet another job because of 
the 10 percent quota. The rejection letter stated:

       I regret to inform you that although yours was the lowest 
     guardrail quote that I received for the . . . project . . . I 
     found it necessary to use the third lowest guardrail quote 
     [the third lowest guardrail quote] in order to meet the DOT 
     requirement of 10 percent DBE.

  Sorry, you are out of luck, even though you had the lowest bid.
  The rejection letter was dated October 27, 1997. So this is still 
going on. The letters started in 1981, about the time we first 
authorized the DBE Program, and are still continuing up to and 
including last year. We know these letters will continue being sent 
until at least 2004 under this bill, unless my amendment passes, which 
will be the next time we will have a chance to revisit this law, Mr. 
President.
  I will say a word about Michael Cornelius. If you think the ISTEA 
quota is only a goal, just ask Michael Cornelius. Mr. Cornelius' firm 
was denied a Government contract under ISTEA even though his bid was $3 
million lower than the nearest competitor. Mr. Cornelius' bid was 
rejected because the Government felt the bid did not use enough 
minority- or women-owned contractors. In fact, the Cornelius bid 
proposed to subcontract 26.5 percent of the work to firms owned by 
minorities and women. Yet 26.5 percent was not enough in the world of 
goals.
  I listened yesterday to Senator Kennedy's example of women and 
minorities who, like Frank Gurney and Michael Cornelius, have been the 
victims of discrimination. I was moved by Senator Kennedy's stories, 
and with each of the two or three stories of discrimination that 
Senator Kennedy told, my instinct and my gut response was, ``That's 
discrimination, and it is wrong.''
  But, Mr. President, do you know the difference between my stories and 
Senator Kennedy's stories? There is a critical difference. In Senator 
Kennedy's examples, the discrimination was wrong and the discrimination 
is prohibited by title VII and the Civil Rights Act of 1964.
  So the examples of discrimination that were being cited are against 
the law--now, a law not being contested by

[[Page S1489]]

anyone, a law supported by virtually everyone I know back in the mid-
1960s.
  In my examples, the discrimination was wrong but the discrimination 
is required. In my examples, the discrimination is wrong but the 
discrimination is required, Mr. President--required by Federal law, not 
just any Federal law, but the very Federal law that we are about to 
reauthorize right here in the U.S. Senate.
  How can anyone hear these examples and not conclude that what we are 
doing in ISTEA is dead wrong? It is wrong for the Cornelius family, it 
is wrong for the Gurney family, it is wrong for the preferred 
businesses who get the contracts, and, most importantly, it is wrong 
for our country.
  I don't care how many times you tinker with the regulations or how 
many times you say 10 percent is only a goal, you can't change the 
fact, Mr. President, that the Federal Government is requiring States 
and prime contractors to pick and choose subcontractors based on the 
immutable traits of race and of gender. There is no lawyer in the 
Senate and no lawyer anywhere in the United States that will ever 
convince me that this racial program is fair, prudent, or--most 
importantly--constitutional.
  In closing, let me say, regardless of the outcome of this morning's 
vote, I firmly believe that the principle underlying the 5th and 14th 
amendments will ultimately carry the day. It obviously will take a 
while. The principle is the simple yet powerful idea that every 
American should be seen as equal in the eyes of the law. I firmly 
believe, as Justice Scalia explained in Adarand, ``Individuals who have 
been wronged by unlawful racial discrimination should be made whole; 
but under our Constitution there can be no such thing as either a 
creditor or debtor race. . . . In the eyes of the government, we are 
just one race here. It is American.''
  The courts and the American people understand this principle. 
Unfortunately, the Congress may be a bit behind.
  Mr. President, I'm greatly appreciative of my colleagues 
participating in this important debate on both sides. They are well 
meaning Senators who look at the same set of facts and reach a 
different conclusion, but the debate has come and gone, the sky has not 
fallen, the Capitol dome has not caved in. In fact, it is the opposite. 
I think this debate has been very positive and constructive.
  I end this debate as I began by asking one simple question: Should we 
place the Senate's seal of approval on a law that the Supreme Court has 
declared presumptively unconstitutional and the lower court has 
specifically struck down, without the Senate or House holding even one 
hearing after Adarand to determine if the law is narrowly tailored to 
remedy specific and persuasive discrimination?
  As a Member of this body, my duty and obligation to the Constitution, 
the courts, and individual citizens compels me to declare no, we should 
not reauthorize this law. We have had no hearings since Adarand to 
determine that this program or any of the 160 Federal programs of 
racial preference that have been identified by CRS have met the strict 
scrutiny standard. The tactic of the Clinton administration has been to 
delay, deny, divert, and obfuscate. The American people deserve better.
  Mr. President, I close with the words of the Weekly Standard:

       It won't do for a democratic country to lurch its way to 
     colorblindness courtroom by courtroom, without the clear and 
     resounding public debate an issue of such moment and 
     principle demands. It won't do . . . to delay the prize of 
     colorblindness, even for a moment, by silently ignoring the 
     battle while it's waged. And, most basically, it won't do . . 
     . to pretend that we don't understand what the Constitution 
     says.

  Mr. President, How much time remains?
  The PRESIDING OFFICER. Forty-five seconds.
  Mr. McCONNELL. I reserve the remainder of my time.
  Mr. CHAFEE. Mr. President, I ask unanimous consent that calculators 
be permitted on the floor during consideration of S. 1173.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. CHAFEE. I yield to the Senator from Arizona.
  Mr. McCAIN. I thank the Senator from Rhode Island.
  Mr. President, I rise in opposition to the amendment to eliminate the 
Disadvantaged Business Enterprise Program and establish a new Emerging 
Business Enterprise Program.
  Mr. President, I'm not a supporter of race-based or gender-based set-
aside programs. This amendment goes too far. It eliminates a program 
that, while seriously flawed in its current focus, was designed to 
provide opportunities for historically disadvantaged businesses to 
compete for Federal highway construction dollars. It establishes a new 
program that merely shifts the focus of Government intention and 
funding to businesses based on size and length of time in business.
  Ironically, Mr. President, if the Emerging Business Enterprise 
Program proposed in this amendment had existed in 1975, software 
industry giant Microsoft would have qualified. In its first 3 years of 
business, Microsoft took in only $420,000, putting it well under the 
$25.2 million limit of the new program. Clearly, this business did not 
need any Government help nor interference.
  I'm a member of the Renewal Alliance, and I listened with interest to 
comments made by my colleagues who are also working with this important 
project. As I stated earlier, I have serious concerns about the racial 
and gender bias of the DBE Program. However, to eliminate it without a 
suitable Government-wide replacement program focused on equal 
opportunity would be counterproductive and shortsighted.
  Mr. President, all Americans--regardless of who they are, where they 
live, or their gender or skin color--all Americans deserve the 
opportunity to provide for their families, to pursue their aspirations, 
and to share fully in the American dream. Our efforts to assist the 
truly needy in our Nation should be focused on providing that 
opportunity equally. The American dream is based upon equality. History 
teaches us that there is no panacea for artificial barriers to 
opportunity, but no matter how intractable the problem, it is the 
essence of the American character to constantly advance our society so 
that social and economic progress of each generation exceeds that of 
its predecessor. No American is unimportant, and as a Nation we have an 
obligation to help those in need to help themselves.
  Our success in that endeavor is bound only by the limits of our 
energy and our imagination. We must recognize that poverty and economic 
disadvantage do not confine themselves within a certain race, gender, 
or ethnic group. Economically disadvantaged people reside in 
practically every community. We have an obligation to help these 
Americans even if they do not happen to live within areas of the most 
severe poverty.
  I suggest we target the root of the problem--lack of economic 
opportunity, not race, gender, ethnicity, and the like. Current 
programs focus on providing Federal assistance in contract preferences 
to businesses based on race or ethnicity of a business owner. We should 
reorient these programs to provide preferences to economically 
disadvantaged Americans, regardless of their race, creed, or color.
  A needy American is a needy American, no matter their race, creed, 
color, or gender. Certainly the Supreme Court's decision in the Adarand 
case emphasizes the reality that, by and large, race-based set-asides 
do not comport with the fundamental tenets of equality and equal 
protection.
  Let me add a few thoughts of my own to the suggestions of other 
Members as to a possible focus for solving these problems. In the last 
Congress, I introduced a bill which included a section designed to 
retarget our efforts and redirect Federal spending goals to assist 
economically disadvantaged individuals and businesses regardless of 
race, ethnicity, skin color, or gender. There are a number of other 
areas where we can, as a Nation, assist our citizens who are less well-
off, particularly providing high-quality educational opportunities and 
accessible and affordable health care. Together, these are the kinds of 
parameters and programs that I believe would help provide important 
economic opportunity.
  The fundamental question is, shall our Government as a matter of 
policy prefer certain Americans because of their race or ethnicity or 
gender over other Americans, regardless of merit or need?

[[Page S1490]]

  An answer in the affirmative seems to contradict our aspirations for 
a color-blind society dedicated to the rights of the individual. An 
answer in the negative appears indifferent to the gross injustices that 
have been inflicted on various racial and ethnic groups who make up the 
American tapestry.
  The debate over contracting set-asides has focused too narrowly on 
either maintaining the status quo, with its inherent unfairness, or 
simply abolishing economic opportunity programs despite their potential 
to justly assist needy Americans. Fortunately, our options are neither 
so stark nor so limited. Rather, we can find the answer in reform.
  Reforming federal programs so that they are color-blind and gender-
neutral and focused on assisting needy Americans rather than wealthy 
business owners, will help us to address the economic needs of 
Americans without pitting one group against another, thereby violating 
the dictates of fairness and equality.
  Mr. President, we cannot write a bill that will solve the problem of 
joblessness and poverty in our nation today. But I believe we can make 
significant gains by employing the kinds of incentives I and others of 
the Renewal Alliance have described today. I look forward to a future 
debate on these ideas to ensure that we craft incentives that will be 
as appropriate and cost-effective as possible in ending the cycle of 
poverty and dependence.
  Mr. President, let me make one suggestion to my colleagues. I believe 
the relevant committees should hold field hearings and engage the 
Americans who live in the poorest communities in the debate over how 
best we can help them to meet the needs of their families and their 
neighborhoods. Perhaps it's time we more diligently consult and work 
with real people and address their realities as we endeavor to address 
the needs of our great nation.
  Mr. President, let me close by saying to my fellow Republicans that 
our party has much at stake in this debate. As the party of Lincoln, 
our heritage and destiny is to be a party of all Americans dedicated to 
the principles of democracy, limited but efficient government, 
individual freedom and opportunity.
  Unfortunately, in discussing the inherent contradictions and 
shortcomings of affirmative action programs, the danger exists that our 
aspirations and intentions will be misperceived, dividing our country 
and harming our party. We must not allow that to happen.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. CHAFEE. Mr. President, I thank the Senator for those thoughtful 
comments.
  Mr. BAUCUS. Mr. President, I see the Senator from New Jersey on the 
floor. I yield 4 minutes to the Senator from New Jersey, Mr. 
Lautenberg.
  The PRESIDING OFFICER. The Chair recognizes the Senator from New 
Jersey for 4 minutes.
  Mr. LAUTENBERG. I thank the Senator from Montana.
  Mr. President, I stand here in opposition to the amendment that is 
being offered. I hope that the Senate will reject this amendment 
because, despite the best intentions of so many, we still do not have a 
level playing field when it comes to Government contracting. There is 
still discrimination. Sometimes it's overt, sometimes it's subtle; but 
it definitely still exists, and the facts bear this out.
  Consider the following: for transportation construction contracts, 
minority-owned firms get only 61 cents for every dollar of work that a 
white male-owned business receives. Unfortunately, it's even worse for 
women-owned businesses--they only receive 48 cents. This amendment will 
only exacerbate these numbers.
  I have to take 1 minute, Mr. President, to describe a personal 
situation. My mother was widowed early in the war. I had already joined 
the Army, and she went to work for an insurance company, a large 
insurance company, and she did a good job for 3 years. At the end of 
that time, they said to her, ``Molly, thank you very much, but Joe is 
back from the Army.'' She said, ``Well, give me another territory.'' 
They worked in territories at the time. They said, ``Well, you know we 
don't hire women for these jobs.'' It was shocking. My mother was 
shocked, my sister was shocked, and I was shocked, because she did her 
job and did it perfectly. They said, ``We don't hire women for these 
jobs.'' We are past that stage, thank goodness. But the fact is that 
women, whether it is in salaries or in business, are always operating 
at a different level than white men.
  Mr. President, there are a few more figures I would like to give. Few 
are aware that white-owned construction companies receive 50 times as 
many loan dollars--and I know this having served for a short time on 
the Small Business Committee--as minority-owned construction firms with 
the same equity. And women-owned businesses have a lower rate of loan 
delinquency, yet still have far greater difficulty in obtaining loans. 
The majority of women business owners have to resort to personal 
resources, such as maxing out their credit cards, to finance their 
business.
  Mr. President, we all know what the problems are with the traditional 
affirmative action programs. But we ought to work to correct them 
because people who don't have the same advantage, whether it's 
education or family exposure or a job opportunity, deserve to be able 
to come into the mainstream of America's economic and cultural life. 
And if they don't, we know what the problems are.
  Mr. President, Jim Crow laws were wiped off the books over 30 years 
ago. However, their pernicious effects on the construction industry 
remain. Transportation construction has historically relied on the old 
boy network, which until the last decade, was almost exclusively a 
white, old boy network.
  I do not imply that the individuals running these white-owned 
companies were racist, rather, I blame the discriminatory laws and 
practices that shut minorities out of this industry for so many years.
  This is an industry that relies heavily on business friendships and 
relationships established decades, sometimes generations, ago--years 
before minority-owned firms were even permitted to compete. In 1982, 
President Reagan signed into law legislation attempting to put an end 
to the old boy network.
  That legislation, creating the Disadvantaged Business Enterprise 
program, or DBE program, has been a success.
  Mr. President, let me explain briefly what the DBE program does. The 
Secretary of Transportation sets a nationwide goal for participation by 
socially and economically disadvantaged businesses in transportation 
construction contracts. The program does not contain a quota or create 
a set-aside, but merely sets a goal for states to follow as they wish.
  To their credit, the overwhelming majority of states have chosen to 
follow or exceed the recommended goal of ten percent. Those states that 
have opted out of this goal have neither been the recipient of any 
retaliation nor have otherwise suffered from any adverse consequence.
  Furthermore, states and municipalities are given the flexibility to 
adjust their goals to reflect the availability of minority and women-
owned businesses in their area.
  Who are the participants in the DBE program? They are hungry small 
businesses that are just trying to get a chance at a Federal contract. 
These are competitive firms.
  As one of my constituents who participates in the DBE program told 
me, if a pie is sliced ten times and nine pieces are eaten by a ``big 
guy'' and one piece is thrown to ten hungry little guys, you can be 
certain that those ten hungry little guys are going scramble, shove, 
kick, and scuffle to get that one piece.
  Congress and President Reagan were right back in 1982 and the 
Chairmen of both the transportation subcommittee and the full committee 
were right to continue this program in ISTEA.
  Why do we still need an affirmative action program for federal 
construction contracts?
  Because we know that the private sector looks to the public sector 
for leadership on this issue. And we also know that once affirmative 
action programs stop, the inclusion of qualified minorities, be it in 
education or in business, drops. We have seen this with law school 
admissions in California and Texas. We have seen it in state 
contracting in Michigan and Louisiana.

[[Page S1491]]

  I fear this would occur at the federal level and that it would spill 
over into lower levels of government and into the private sector.
  Mr. President, it would be a shame to allow this to occur. I urge my 
colleagues to oppose the junior Senator from Kentucky's amendment and I 
yield the floor.
  The PRESIDING OFFICER. The time of the Senator has expired.
  Mr. McCONNELL. Mr. President, I understand that I have 45 seconds 
left, and I yield that to the Senator from Pennsylvania.
  The PRESIDING OFFICER. The Senator from Pennsylvania, Mr. Santorum, 
is recognized.
  Mr. SANTORUM. Mr. President, I support the McConnell amendment. I 
believe the constitutional arguments are persuasive. As a member of the 
Renewal Alliance, I must say that the substitute or the replacement 
program Senator McConnell put forward is a step in the right direction. 
I disagree with Senator McCain, who said it is not sufficient. I 
believe it is. It is, in fact, a good step.
  Also, if we are able to not table the McConnell amendment, I will be 
working with Senators Abraham and Coats to see if we can do more, in 
fact, to put an agenda in place that really will do something for 
economically disadvantaged areas, and particularly urban areas in this 
country, so we can in fact create more hope and opportunity in those 
neighborhoods. That is really the ultimate goal, and I think the 
McConnell amendment begins to go in that direction.
  Mr. BOND. Mr. President--I will reluctantly vote against the 
McConnell amendment. I am concerned that if this provision is included 
in this bill the President will veto the bill or it will cause delay in 
enactment of this important legislation that is imperative to saving 
lives in this country.
  This ISTEA legislation is a matter of life and death to Missourians. 
Highway fatalities in the state of Missouri increased 13 percent from 
1992-95; 77 percent of the fatal crashes during this time frame 
occurred on two-lane roads. In Missouri, 62 percent of the roads on the 
National Highway System, excluding the Interstate, are two lanes. I 
have had too many friends die on Missouri's highways. We need to make 
certain that this legislation is enacted at the earliest possible date!
  I want to make clear that since I became chairman of the Senate 
Committee on Small Business I have strived to make certain that 
government contracting opportunities are available to ALL small 
businesses. I know that the engine driving the economic growth of this 
country is small businesses. Small businesses and the entrepreneurs of 
this country, regardless of race or gender, should be given every 
opportunity to succeed.
  For example, last year this body passed the HUBZones legislation 
which I authored. It passed unanimously and has been signed into law. 
The law provides government contract set asides to small businesses 
that are located in HUBZones, which are economically distressed 
metropolitan areas and poor rural counties. To be eligible for a 
contract set aside, 35 percent of a small business' workforce must be 
residents of HUBZones. This program is designed to help small 
businesses grow, while creating jobs and investment in urban and rural 
communities that are suffering from economic neglect.
  I do have some concerns that the McConnell amendment could 
inadvertently eliminate the HUBZone program.
  It is my hope that I can work with my friend and distinguished 
colleague, Senator McConnell, on this issue in the future. But, I will 
not hold up $3.6 billion for my State of Missouri.
  Mr. DURBIN. Mr. President, I rise today to express my support for the 
Disadvantaged Business Enterprise (DBE) program and my opposition to 
any attempt to weaken or eliminate the program. Under the DBE program 
federal transportation trust funds from user fees are distributed by 
the Department of Transportation (DoT) through state DoTs and state and 
local mass transit agencies. These agencies are required to establish a 
10 percent goal for the trust funds they receive, but are afforded 
tremendous flexibility in reaching those goals. If a state agency or 
prime contractor is unable to find enough qualified subcontractors to 
perform the work, they are allowed to apply for a waiver or lower goal. 
In short, the DBE program does not establish a quota nor a set-aside 
program.
  The opponents of the DBE program argue that this sort of flexible, 
constitutional affirmative action flies in the face of the American 
people's disagreement with affirmative action. This is simply not true. 
A Wall Street Journal poll published in November of last year found 
that 48 percent of Americans favor affirmative action and only 43 
percent oppose. In addition, the voters in Houston last year rejected a 
Proposition 209-like initiative by 55 to 45 percent, thus, 
demonstrating the people's commitment to affirmative action.
  Moreover, since the opponents of affirmative action often offer no 
alternative other than the promise of a society free from all prejudice 
against women and minorities, they must implicitly believe that 
discrimination no longer exists in this country. Either that, or they 
are not concerned that there are still very real disparities between 
the races and genders. Both alternatives are troubling.
  The reality of these disparities is still disturbing. In a recent 
Urban Institute study identical black and white college students posed 
as test subjects in an experiment designed to measure the extent of 
racial discrimination in employment. The subjects were identical in 
dress, had the same resumes, and had scripted presentations. The only 
variable was race. Whites received job offers 41 percent more often 
than blacks. For those who received job offers, the wages whites were 
offered were 17 percent higher than the wages offered to blacks.
  Another recent study conducted by the Glass Ceiling Commission found 
that 96 percent of the senior managers of the Fortune 1000 Industrials 
and the Fortune 500 Companies are male; 97 percent are white; 0.6 
percent (that is, less than one percent) are black; 0.4 percent are 
Latino; and 0.3 percent are Asian.
  Sadly, I am concerned that the arguments waged against the DBE 
program are not truly criticisms of the program but are merely thinly 
veiled attacks on civil rights itself. Although I respect the DBE 
program opponents' right to disagree on these issues, I find it 
disturbing that the underlying theme of their arguments against the 
program boil down to this: ``Minorities and women may have been 
discriminated against in the past--they may even still be discriminated 
against today--but we, the majority, are no longer going to provide 
remedial efforts to counteract this discrimination. Enough is enough.''
  This sentiment runs counter to this country's dedication to civil 
rights and humanitarianism. To preserve our civil rights and to earn 
equal rights for all we must acknowledge the disappointing reality that 
we have not yet achieved a color or gender blind society. By attacking 
the DBE program, the opponents of the program are also dismantling the 
steps of progress we have made toward a nation we all want--a nation 
where there will be no reason to debate civil rights and where color 
and gender are not determinative of opportunity.
  Mr. DOMENICI. I wonder if I might have the attention of the 
distinguished chairman and banking member of the Environment and Public 
Works Committee, as well as the chairman of the Subcommittee on 
Transportation. I want to address a program that is authorized under 
Section 1111 of S. 1173, namely, the Disadvantaged Business Enterprise 
(DBE) program.
  As my colleagues know, in the wake of the Supreme Court's 1995 
decision in Adarand v. Pena, all federal agencies undertook a review of 
their affirmative action programs with an eye toward ensuring that 
those programs met ``strict scrutiny''--the new standard of review set 
by the Court.
  Toward that end, the Department of Transportation proposed a 
revamping of its regulations for the DBE program. D.O.T.'s intent was 
to ensure that the DBE program satisfied the two requirements of strict 
scrutiny--that the program met a ``compelling government interest,'' 
and that it was ``narrowly tailored.''
  It is my understanding that last May, the Department published 
proposed new regulations in the Federal Register for comment. That 
comment period closed last September. Since that

[[Page S1492]]

time, Department officials have been poring through the 300-plus 
comments received. They hope to have the new regulations finalized 
within the next two months.
  I believe the DBE program must be implemented in a manner that is 
constitutional. I believe that that is critical to the integrity of the 
program, and to the Senate's support of that program. Therefore, I 
would like to ask the chairman and ranking member--whose committee has 
oversight over the DBE program--if it is their intention to press the 
Department to ensure that the new regulations pass constitutional 
muster.
  Mr. CHAFEE. Yes: it is. We have made it clear to the Secretary that 
while one can never predict with 100 percent certainty what language 
may pass constitutional muster, the Committee expects the Secretary and 
his legal staff to do their utmost to make sure that the new 
regulations closely follow the guidance set forth by the Court in 
Adarand.
  Mr. BAUCUS. I concur. It is the committee's intention that his 
program be carried out in a manner that is consistent with the 
Constitution. We expect no less. Secretary Slater is aware of, and I am 
assured agrees with, our views on this matter.
  Mr. WARNER. As chair of the subcommittee that sponsored this bill, I 
have a particular interest in this matter, and I want to assure the 
Senator that adherence to Adarand is our intent.
  Mr. DOMENICI. I appreciate the Senators' confirmation on this point. 
Let me ask further: Will the committee continue to be in touch with 
Department officials as the regulations are readied for release? And 
will the Committee scrutinize the new regulations to ensure that the 
Department did in fact follow the Court's guidance under Adarand?
  Mr. CHAFEE. Yes: we will.
  Mr. BAUCUS. I can assure the Senator, and the Senate, that we will 
indeed.
  Mr. WARNER. We certainly intend to.
  Mr. DOMENICI. I am pleased to hear it, and I want to thank the 
Senators for taking the time to respond to my concerns.
  Mr. ABRAHAM. Mr. President, I rise today to comment briefly on some 
remarks made earlier during debate on the McConnell amendment. In this 
debate, several of my colleagues noted that the percentage of state-
awarded highway contract dollars realized by minority and woman-owned 
firms dropped dramatically in states that abolished their set-aside 
programs. Several speakers pointed to what happened in my own state of 
Michigan as an example of this phenomenon.
  What the speakers did not explain is how Michigan ended its program. 
In 1989, the Sixth Circuit Court of Appeals struck Michigan's state DBE 
program as being unconstitutional, as a result of which Michigan was 
forced to abandon it. What this proves, though, is the opposite of what 
my colleagues supporting the tabling motion are claiming. We need to 
devise methods that will pass constitutional muster for reaching out to 
minority and women-owned firms, rather than reenacting a program that 
the courts surely will strike down, leaving us with no mechanism for 
aiding disadvantaged businesses.
  Mr. DASCHLE. Mr. President, we all believe that America is the land 
of opportunity. But the road to opportunity is not always an equal 
access road. The highway construction industry in particular has kept 
newcomers, like women and minority-business owners, in the slow lane. 
There's no reason equal opportunity should be sacrificed when it comes 
to road building
  That's why I support the Disadvantaged Business Enterprise, or DBE, 
program and oppose the McConnell amendment. The DBE program was signed 
into law by President Reagan and reaffirmed by President Bush; it has 
always enjoyed bipartisan support. Designed to enhance opportunity for 
all, and not limit it for any--it's a true equal opportunity program.
  Contrary to arguments made by opponents of the DBE program, the 
Supreme Court in the Adarand case did not find the DBE program 
unconstitutional. The Court held only that strict scrutiny should apply 
to federal affirmative action programs as it does to those implemented 
by the states. Strict scrutiny requires that there be a compelling 
government interest in addressing discrimination and that the means 
chosen to address the discrimination be ``narrowly tailored.'' The DBE 
program meets both tests.
  There is clearly a compelling interest in addressing the pervasive 
discrimination that has characterized the highway construction 
industry. According to the Supreme Court, ``[t]he unhappy persistence 
of both the practice and the lingering effects of racial discrimination 
against minority groups is an unfortunate reality, and the government 
is not disqualified from acting in response to it.''
  The DBE program is also narrowly tailored, meeting the second prong 
of the Adarand test. The DBE program does not include quotas or set 
asides--it is a ``goals'' program. The individual States set their own 
goals that can be above or below the national goal of 10 percent. The 
DBE program does not set rigid numerical targets that must be met to 
avoid a penalty nor does it set aside contracts or dollars for certain 
businesses. Demonstrating conclusively that it is not a quota, the DBE 
program has no sanctions for failure to meet a goal.
  Working to make the program even stronger, the Department of 
Transportation is issuing new regulations that ensure that it is as 
narrowly tailored as possible. For example, the new regulations provide 
that the program must give priority to race-neutral measures to reach 
out to women and minority-owned businesses; must ensure that good faith 
efforts are enough, even if the bidder has not achieved the goal; must 
ensure that the goal-setting is based on number of qualified DBEs in 
the state; and tighten up the certification process so that only 
qualified DBEs are in the program.
  The DBE program is not only constitutional, but also is effective and 
necessary. The program creates jobs--the Department of Transportation 
estimates that the program directly or indirectly results in more than 
100,000 jobs each year. It also serves as a motor for economic 
development in disadvantaged communities, with more than two billion 
dollars in construction contracts going to small businesses under the 
program. Women too have benefited greatly from the program. Since women 
were included as DBEs, their procurement dollars have grown by 
approximately 175 percent.
  But we should not rest on our laurels. The time has not come to end 
the program, since women and minority-owned businesses are still 
greatly underrepresented in the highway construction industry. 
Minorities make up over twenty percent of the population, but minority 
businesses are only nine percent of all construction firms and those 
businesses get only five percent of construction receipts. Women own a 
third of all small businesses but receive less than three percent of 
federal procurement contract dollars.
  In my state of South Dakota, there are seven DBEs qualified as prime 
contractors and 75 DBE subcontractors. Their contribution to South 
Dakota's economy and to their own communities goes beyond just the jobs 
they create and the business they generate. They are inspiring a new 
generation of small business owners to believe that they, too, will be 
able to drive on the road to opportunity.
  That's why we need to keep this program--because we need to ensure 
that that road to opportunity is the wide open road that America is 
known for.
  Mr. LIEBERMAN, Mr. President, I rise to express my views on the 
Disadvantaged Business Enterprise program, and to explain why I have 
decided to vote against Senator McConnell's amendment, which would 
eliminate that program. This was not an easy decision for me to make. 
In attempting to analyze the constitutionality of the DBE program, we 
are dealing with a complicated area of the law, where many issues 
remain unsettled. But just as importantly, the outcome of this vote 
will affect hundreds of thousands of hard working Americans, of all 
races and of both sexes.
  I have always opposed laws that establish quotas. I am going to vote 
against this amendment because I am convinced that the DBE program does 
not create quotas. There is substantial flexibility built into the 
program for states to set their own goals based on

[[Page S1493]]

local conditions. If they fail to meet their own goals, there is no 
federal sanction or enforcement mechanism. The Secretary of 
Transportation may waive the national goal of 10% for any reason, and 
presumably would do so if the collective efforts of the states did not 
add up to 10% of all ISTEA funds expended. All that convinces me that 
the percentage stated, while troubling is a goal not a quota.
  But I am still troubled by the fact that this law establishes goals 
based on gender and racial classifications. Any law that confers some 
benefit based on gender or race can cause unfair results; those who are 
not members of the enumerated categories, the non-beneficiaries of the 
program, are being denied absolutely equal treatment. We should all 
hesitate before enacting such a provision. Indeed, the Supreme Court's 
Adarand decision now requires us to engage in a careful analysis before 
enacting such a provision. In Adarand the Supreme Court held that 
Congress may only enact racial classifications that are narrowly 
tailored to further a compelling interest. This standard of review, 
known as ``strict scrutiny'', is difficult to meet, but in her opinion 
for the Court Justice Sandra Day O'Connor emphasized that federal 
affirmative action programs could and would be upheld where Congress 
was acting in response to the practice and lingering effects of 
discrimination.
  I am voting against the McConnell amendment in spite of my 
reservations because I am convinced that discrimination persists in the 
transportation construction industry and in related industries, and 
because I believe that the DBE program is narrowly tailored to attack 
the ongoing practice of that discrimination. The program therefore is 
both justifiable as sound policy and in compliance with the Supreme 
Court's Adarand decision.
  We have before us ample evidence of historic and more importantly 
ongoing discrimination in the relevant industries, not just the 
transportation construction industry but also in the surrounding 
economic structure of lenders, suppliers, surety companies, and trade 
unions. Much of this evidence appears in the record before Congress; 
Congressional committees have received testimony describing this 
discrimination, and on many occasions committees of the House and the 
Senate have concluded that barriers still remain to equal participation 
by women and minorities.
  In May of 1996, the Department of Justice published in the Federal 
Register an extensive survey of evidence showing how discrimination 
works to preclude minorities from obtaining the experience and capital 
needed to form and develop a business, and how discriminatory barriers 
deprive existing minority firms of full and fair contracting 
opportunities. That report found ``powerful and persuasive [evidence] 
that the discriminatory barriers facing minority-owned businesses are 
not vague and amorphous manifestations of historical and social 
discrimination. Rather, they are real and concrete, and reflect ongoing 
patterns and practices of exclusion, as well as the tangible, lingering 
effects of prior discriminatory conduct.'' Discrimination by trade 
unions and private employers has prevented minorities from getting the 
requisite experience and opportunity to move on to self-employment. 
Dozens of studies and lawsuits cited in the report demonstrate gross 
disparities over the years in these sectors of the economy, often 
caused by proven racial discrimination. Similarly, minorities have 
often been shut out of lending and bonding markets: a recent study in 
Denver found that African-Americans were 3 times more likely to be 
rejected for business loans than whites, and Hispanics were 1.5 times 
as high. Contracting itself too often remains a ``closed network''; 
prime contractors maintain their long-standing relationships with their 
subcontractors, and the new entrant minority or women-owned firms are 
excluded.
  In my view, this evidence of discrimination is sufficient to 
establish the compelling interest required by the Adarand decision. But 
let's move beyond dry statistics for a moment and consider the people 
behind these numbers. Earlier I referred to the burdens that gender and 
racial classifications can impose on innocent parties. Our decision 
today is so difficult because we must compare that inequity to the harm 
caused to other, equally innocent people, by discriminatory business 
practices. The companies now benefitting from the DBE program are not 
inferior; we have heard no complaints about the quality of their work. 
Yet without the program many of them never would have received an 
opportunity to win contracts. I have met with these small-business 
owners, and they are rightfully proud of their accomplishments, and 
grateful for the opportunity this program gives them.
  Just as I am satisfied that ISTEA's DBE program serves a compelling 
interest, so too am I convinced that the program is narrowly tailored 
to further that interest, as required by the Adarand decision. My 
belief that the DBE program will survive court scrutiny is bolstered by 
the new regulations that the Department of Transportation will be 
finalizing in several months. From my discussions with the 
Transportation Secretary and my staff's discussions with Transportation 
Department attorneys, it appears to me that the staff at that agency 
have been doing an excellent job poring over court decisions as well as 
comments from interested parties. The new regulations will adhere very 
strictly to the narrowly tailored test, and the result will be a DBE 
program that considers gender and racial characteristics without 
becoming quotas.
  For example, states will be given a great deal more flexibility in 
determining how to calculate their goals, based on the availability of 
qualified DBEs in the relevant industries. These formulae are designed 
to focus on the extent to which discrimination in the contracting 
industry has actually reduced opportunities for DBEs, and to determine 
how much DBE participation there would be in the absence of 
discrimination.
  Under the rules someone who is not himself financially disadvantaged 
will not be able to qualify for the DBE program, regardless of how 
small his company is. Anyone will be able to start a proceeding to 
prove that an individual owning a DBE is not actually socially and 
economically disadvantaged. On the other hand, anyone not presumed to 
be socially or economically disadvantaged would be able to apply for 
DBE status based on special circumstances. Finally, the DBE program 
makes extensive use of gender and race-neutral alternatives, as well as 
waivers.
  I have listed only some of the more important regulations that have 
helped convince me that the DBE program will be narrowly tailored to 
further a compelling interest when it is implemented. Although I am 
satisfied that the DBE program can survive the courts' scrutiny, I 
still recognize that innocent people may be burdened by the program's 
effect on their livelihoods. Our obligation, and the obligation of the 
Executive Branch, is to minimize these unfair results in the design and 
implementation of the DBE program, and to strive for a day when we will 
not feel the need to incorporate even gender or racial goals into our 
laws at all.
  Mr. KEMPTHORNE. Mr. President. I rise today to address the issue of 
the Disadvantaged Business Enterprise (DBE) program in the Intermodel 
Surface Transportation Efficiency Act (ISTEA). This DBE program is a 
narrowly tailored program that establishes the goal for states to have 
prime contractors use DBE's to do some portion of their federally 
assisted construction projects. While the federal goal is 10% of all 
projects, states are free to develop their own goal for their level of 
participation.
  There is much confusion about what the ISTEA DBE program is and what 
it is not. It is not a program of federally mandated quotas that 
requires states to participate with the threat of financial sanctions 
for noncompliance. It is however, a program that allows states to set 
their own goals and targeted levels participation and permits annual 
renegotiation of these goals. Additionally, states are permitted to 
waive their self established goals in a particular contract or for an 
entire year if compliance is not possible. In fact in both 1996 and 
1997 two states did not meet their goals and no sanctions were imposed.
  Mr. President, the national goal for participation is 10% and while 
each state can vary from this my state of Idaho has adopted 10% as 
their target.

[[Page S1494]]

 The Idaho Department of Transportation informs me that this program is 
very popular, it is easy to administer and participation is high. In 
fact, the state of Idaho has exceeded their 10% goal every year 
including the last three where participation was 11%, 12.4% and 10.7%. 
In Idaho the majority of the recipients of these construction contracts 
have been women owned businesses. Interestingly enough since the 
inclusion of women owned business as an eligible class under the ISTEA 
DBE program in 1987 women owned business in my state have increased 
104%. While this growth figure includes all types of businesses, I am 
confident that the positive impact of this program on the construction 
trades cannot be over emphasized.
  Mr. President, put quite simply the ISTEA Disadvantaged Business 
Enterprise program works. Without federal threats and financial 
sanctions this program has encouraged states to set goals that provide 
increased opportunities for women and minority owned businesses to 
participate in the ISTEA program. This is an excellent example of an 
incentive-based program that benefits our nation as a whole. I am 
committed to retaining this important program during the 
reauthorization of ISTEA.
  Mr. BINGAMAN. Mr. President, I want to join my Senate colleagues in 
opposition to Senator McConnell's amendment to eliminate the Department 
of Transportation's Disadvantaged Businesses Enterprise program. This 
program, known as the DBE program, for years has been very successful 
in bringing equity and fairness into construction contracting, and I 
believe it should be maintained as it is. Most of all, I agree that 
this program does not violate the equal protections guaranteed by our 
Constitution, and I question the Senator from Kentucky's interpretation 
that it does.
  In fact, if Senator McConnell is basing his reasons for eliminating 
this program on our Supreme Court's decision in Adarand v. Pena, then I 
am confused. My reading of Adarand suggests nothing of that sort.
  While it is true that the underlying issue in Adarand was whether the 
Department of Transportation has infringed on Adarand's constitutional 
right to due process and equal protection, the issue the Court actually 
addressed and decided in this case was by what standard is an 
infringement in this context determined. In other words, how do we 
figure out what constitutes a violation of equal protection? Indeed, 
the Court reversed long-standing law, and raised the standard for 
justifying this program. Typically, the burden to justify the necessity 
and the implementation of a program that affects equal protection lays 
with the government.
  The Court, for the first time, determined that the standard of 
``strict scrutiny'' should be applied in a case of this sort. 
Specifically, the standard of strict scrutiny requires that if the 
government determines to implement a program such as the DBE program, 
which ultimately effects an individual's constitutional right to equal 
protection, the government first must show a ``compelling interest.'' 
Basically, the government must have more than a very good reason for 
the program. Second, even if the government can show a compelling 
interest, the standard requires that the government show that the 
program is ``narrowly tailored'' to serve that interest. So the issue 
before the Supreme Court in Adarand was which standard to apply, and 
the Court held that the standard must be ``strict scrutiny.'' This is a 
landmark decision, because it places on the government a very tough 
test, a test that often is very difficult to overcome. Of critical 
importance here, is that the Court recognized that the standard, 
although very tough to meet, is not fatal in fact, it is not impossible 
to overcome. And I believe that is where my colleague from Kentucky has 
erred.
  What I understand Senator McConnell to be saying is that the Court, 
in holding that strict scrutiny is the standard to apply in this 
context, ultimately held that the DBE was unconstitutional. To the 
contrary. The Court simply expounded the standard for making this 
determination, nothing more, nothing less.
  What does this standard mean to the DBE program? It means that the 
Department of Transportation must show that its governmental 
``interest,'' its important reason for having this program, is 
``compelling.'' In this context, it requires that the government must 
show that there is a history of discrimination in the construction 
contracting industry, such that minority and women-owned businesses, 
although qualified for a contract, continuously are not awarded 
contract simply because they are minority- or woman-owned.
  Clearly, there long has been a history of discrimination in this 
country, and the effects of discrimination still linger. Department of 
Transportation can show that although minority-owned businesses are 9 
percent of construction firms, they get only 5 percent of construction 
receipts. Additionally, DoT can show that women own one-third of all 
small businesses, but in 1994, for example, received only 3 percent of 
federal procurement contract dollars. Moreover, Department of 
Transportation can show that, in the wake of City of Richmond v. 
Croson, disadvantaged businesses have been squeezed out from 
contracting opportunities. Put simply, in those areas where there is no 
DBE program in place, minority-owned businesses received no contracts 
at all. So it's clear there is a wide gap in the availability of 
qualified minority- and women-owned contractors and the number of 
contracts they are in fact awarded. The government's compelling 
interest is to remedy discrimination, and I don't think anyone in this 
Congress can dispute the government has a compelling interest.
  The real issue here, however, is how the government sets out to 
remedy that discrimination. The Court explained that strict scrutiny 
requires the government must ``narrowly tailor'' whatever is crafted to 
address this problem. In other words, the program cannot be too broad, 
but must be designed specifically enough to remedy the discrimination 
without infringing on anyone else's Constitutional rights.
  That is exactly what the Department of Transportation has in the DBE 
program. The DBE is designed only to provide a ``goal'' that ten 
percent of contracts be awarded to disadvantaged businesses. You may 
ask, what is the difference between a ``goal'' and a ``quota'' or a 
``set-aside''? I see a clear distinction.
  A quota requires that a minimum number of construction contracts be 
awarded to disadvantaged business, regardless of the amount or history 
of discrimination that has taken place. Right or wrong, it allows no 
flexibility. Same is true with a set-aside.
  The Department's ``goal'' program, on the other hand, provides broad 
flexibility. I read the program to encourage contracting with 
disadvantaged businesses up to 10 percent of contracts. That is a very 
significant difference, particularly when you consider the strict 
considerations that DoT has built into the program.
  For instance, the program requires that the goal correspond to the 
availability of qualified DBE's in a given market area; it requires the 
goal be ``race neutral''; the program cannot be for an unlimited period 
of time but only for as long as it takes to address any measured 
inequities in contracting; the goal of 10 percent is not required; and 
it also provides the flexibility to tailor a program to the 
circumstances of the locality.
  Mr. President, I am confident that the DoT's DBE program is not 
unconstitutional and in full accord with Adarand. But nobody has to 
take my word for it. I suggest they examine Adarand for its real 
effect. That precisely is what many very esteemed constitutional law 
professors did, and they conclude that this program is within 
constitutional parameters. Any other conclusion we should leave to our 
Supreme Court.
  Mr. President, I appreciate Senator McConnell's concern for all the 
emerging small businesses in our country, and I agree there should be 
fairness, equality for all. I am certain he has only the most genuine 
interests in mind for everyone. I have to disagree, however, that 
fairness and equality will prevail if the DBE program is eliminated. 
Given our history as a nation and the lingering effects of 
discrimination, I believe the DBE program is necessary. Moreover, I 
believe it is constitutional and should remain

[[Page S1495]]

intact. Therefore, I will oppose the amendment.
  Mrs. MURRAY. Mr President, I rise in strong support of the 
Disadvantaged Business Enterprise program and in opposition to the 
McConnell amendment. This program is the right way for our nation to 
provide business opportunities for all Americans.
  I believe in the goals of the DBE program: To improve economic 
opportunities for qualified, but disadvantaged, business owners, who 
most frequently are women and people of color. This program counters 
the effects of past discrimination with a flexible and goal-oriented 
program that has worked. We have a much more diverse federal 
contracting base than we have ever had before. Since 1978, where women- 
and minority-owned businesses won only 1.9 percent of the federal 
highway construction contracts, they have 14.8 percent. That 
demonstrates the tremendous success of this program.
  The DBE program does an excellent job of providing sufficient 
flexibility to target true disadvantaged businesses. If an African 
female-owned business truly is not disadvantaged, it will qualify under 
this program. Likewise, if a Caucasian male owns a disadvantaged 
business, he has an opportunity to qualify under the DBE program. That 
flexibility is why so many of us believe it offers us the best path 
forward toward true equality for all business people. It focuses our 
attempts to strengthen our economy on those who need our help most; it 
forces us to look at economics, not race or gender.
  Mr. President, in 1995, the Senate debated this issue as part of the 
legislative branch appropriations bill. At that time, members of this 
body recognized this type of proposal simply goes too far. I led the 
fight to defeat that amendment with bipartisan support, 61-36. As 
ranking member of the legislative branch appropriations bill at the 
time, I offered a compromise amendment in an attempt to reach middle 
ground and deal with this issue in a constructive manner. That 
amendment passed 84-13.
  I pledge to continue to fight economic, gender and race 
discrimination throughout this country. The Disadvantaged Business 
Enterprise program is one proven path toward that goal. This is not 
about special preferences or arbitrary set asides; this is about 
expanding opportunities for business people. I intend to oppose the 
McConnell amendment and urge my colleagues to do the same.
  Mr. DORGAN. Mr. President, I rise to comment on the debate over the 
Disadvantaged Business Enterprise (DBE) program and the McConnell 
amendment. First, I want to say that I have some concerns about the DBE 
program, at least in its previous structure. I do not doubt the 
presence of racial, ethnic, and gender discrimination in this country 
and I would be the first to say that we ought to have strong national 
policies that are designed to rectify discrimination and provide 
assistance to businesses that are disadvantaged because of 
discrimination. However, a strict mandate on states to establish quotas 
and set asides is not the appropriate means to end discrimination.
  Unfortunately, much of the debate over the McConnell amendment has 
inaccurately characterized the question in polemic terms. The advocates 
of the McConnell amendment would suggest that a vote against his 
amendment is a vote for quotas and set asides. That is simply not true.
  While I have some concerns about the DBE program, I do not intend to 
vote for the McConnell amendment. The Department of Transportation has 
made significant changes in the DBE program under the directive of the 
President's review of all affirmative action programs. The new 
regulations no longer require states to adopt a 10% goal of DBE 
contracts for highway projects. The old regulations had that 
requirement. I would not support that approach. However, under the new 
regulations, the DOT provides states with several specific formula 
options with which they can utilize to establish the appropriate goal 
for DBE contracts for each particular state. Section 26.41 of the 
regulations--which specifies how each state sets their overall DBE 
goals--does not contain any specific percentage requirement.
  The 10% goal specified in the underlying legislation is a nation-wide 
goal. Under the Department's regulations, each state will utilize one 
of several formula options specified in the regulations to determine 
the appropriate goal for that state. There is no quota mandate. The 
only requirement is that states make a good faith effort to determine 
how to set an appropriate goal for DBE contracts.
  I am not persuaded by the agreements that the DBE program is 
unconstitutional. The Adarand decision did not declare the program 
unconstitutional. Rather, it required that the program be narrowly 
tailored. It appears to me that the Department's new regulations have 
been developed in a manner to comply with that requirement. I am 
confident that when these new regulations are implemented that the 
Department will be flexible and work cooperatively with states to 
establish appropriate goals. If the Department had not taken steps to 
revise this program, I would be advocating changes with respect to the 
ISTEA legislation. However, anyone who has reviewed the proposed new 
regulations (49 CFR Parts 23 and 26, May 30, 1997) would conclude that 
significant changes have been made and I believe that it is reasonable 
to allow the Department to implement those changes, which provide a 
great deal more flexibility to the states and will not impose a 
specific percentage requirement for DBE contracts.
  Notwithstanding the questions about the constitutionality of the DBE 
program and whether or not it is a quota program, I am very concerned 
about the McConnell amendment because of the new requirements it 
imposes on states. The McConnell amendment expands the definition of 
what constitutes a ``disadvantaged business,'' duplicating many small 
business development programs which are currently administered by the 
Small Business Administration (SBA). In addition, the McConnell 
amendment imposes a significant financial burden on states to develop 
new outreach programs without providing any federal assistance to pay 
for these new requirements. Even if one were to conclude that the DBE 
program ought to either be changed or eliminated, the McConnell 
amendment is certainly not the correct response.
  Therefore, Mr. President, I am opposing the McConnell amendment. 
However, I urge the Department to implement new regulations that give 
the states the flexibility to establish their own goal--as has been 
promised.
  Mr. BAUCUS. Mr. President, I yield myself such time as I consume. Mr. 
President, we had a good debate yesterday. I want to emphasize a couple 
of points.
  First, with all due respect, the argument that the Supreme Court has 
ruled that this program is unconstitutional and that we now have a duty 
to expunge the program from the statute books is a red herring. It is a 
bogus argument, a diversion, a smokescreen, as was so ably stated by 
the Senator from Pennsylvania, Mr. Specter.
  If there was any doubt, it should have been dispelled by the letter 
that Senator Domenici received yesterday from Attorney General Reno and 
Secretary Slater.
  I urge my colleagues to read that letter.
  In Adarand, the Supreme Court did not hold that the DBE program is 
unconstitutional. It held that the program is subject to strict 
scrutiny. And it emphasized that this is not equivalent to holding that 
the program is unconstitutional.
  The case was remanded to the district court. Judge Kane held that the 
program furthers a compelling governmental interest. But he also held 
that the program was not narrowly tailored.
  So we have one district court judge, holding that the program is 
unconstitutional. Not the Supreme Court. Not an appeals court. But one 
federal district court judge, out of the 647 federal district court 
judges in the country.
  The Justice Department disagrees with the decision. So do many 
others. And the federal government has appealed the decision.
  There are, moreover, strong arguments that the program passes the 
strict scrutiny standard.
  The district court itself held that the DBE program furthers a 
compelling governmental interest in overcoming discrimination in the 
construction industry.
  With respect to narrow tailoring, as the letter to Senator Domenici 
explains, the DBE program is not a mandatory set aside or rigid quota. 
It's

[[Page S1496]]

flexible. It's negotiated with each state. It can be adjusted, lower or 
higher. It can be satisfied by good faith efforts. No penalty has ever 
been imposed on a state that has not met it's goal.
  And the proposed rules would make the program even more flexible and 
narrowly tailored.
  So I believe that it is very clear that this program is 
constitutional.
  But there's another question.
  What's right? What's the right thing to do here?
  We all wish we lived in a world that was free from discrimination 
based on gender or race.
  We don't. Discrimination is still with us. I think we all know that.
  Women earn about 75 percent of what men earn for comparable work.
  Women own 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 population, but own only 9 
percent of the construction businesses, and those businesses receive 
only 4 percent of construction receipts.
  So what do we do about it?
  Sometimes, Mr. President, equal opportunity means more than outreach. 
It means more than mailing out brochures and holding seminars.
  It means giving people an opportunity to prove themselves.
  It means giving them a seat at the table.
  That's what the DBE program is designed to do.
  And, as I said yesterday, it works.
  In 1978, 1.9 percent of federal highway construction dollars were 
going to firms owned by women or minorities.
  Today, under the DBE program, it's 14.8 percent.
  That's progress.
  I, for one, am proud that the percentage of women and minorities 
participating in the federal highway program in Montana has risen to 20 
percent. That's good news. Not only for women and members of minority 
groups. But for all of us. For our communities.
  The program has worked. And because it has worked, people are still 
counting on it.
  About 20,000 companies have qualified as DBEs. They've grown their 
companies, taken out loans, hired more employees, in the expectation 
that the program would continue.
  If we look at the experience of Michigan, Louisiana, and other states 
that have repealed their state DBE programs, repeal of the federal DBE 
program will result in a sharp drop in the percentage of contracts 
going to businesses owned by women and minorities. By half, or more.
  If that happens, all across this country, small businesses women and 
minority entrepreneurs will be left high and dry.
  I, for one, will not vote to let that happen.
  Mr. President, the DBE program is constitutional.
  It's fair.
  It works.
  And it builds more inclusive communities and a stronger economy.
  It's good for America, and it brings us together. That is what 
America is all about.
  Again, I urge that the McConnell amendment be defeated.
  I reserve the remainder of my time.
  The PRESIDING OFFICER. There are 3 minutes remaining.
  Who yields time?
  Mr. CHAFEE. Mr. President, I have previously made clear my thoughts 
on this.
  I think the arguments have been very well made in connection with the 
opposition to this amendment. I strongly believe that the Congress 
should not interfere with the Disadvantaged Business Enterprise Program 
at this point. I don't think this is the appropriate time.
  As I have also pointed out several times, we have a letter from the 
Secretary of Transportation indicating that if this amendment should 
prevail, he would not be able to recommend that the President approve 
this legislation. What all that means, Mr. President, is that is a 
gentle way of saying he would recommend a veto. I suspect there would 
be a veto of this legislation. We have come a long way to try to get 
this legislation passed. I very much hope that it will not be subject 
to any kind of a veto threat, which would result if this amendment 
should pass.
  Mr. President, we are going to vote at 11 o'clock. We must be very 
close.
  The PRESIDING OFFICER. All time has expired.
  Mr. CHAFEE. Mr. President, I move to table the amendment and ask for 
the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  The PRESIDING OFFICER. The question is on agreeing to the motion to 
table the amendment. The yeas and nays are ordered.
  The clerk will call the roll.
  The legislative clerk called the roll.
  Mr. NICKLES. I announce that the Senator from Vermont (Mr. Bennett), 
the Senator from Indiana (Mr. Coats), the Senator from North Carolina 
(Mr. Helms), and the Senator from Texas (Mrs. Hutchison) are 
necessarily absent.
  Mr. FORD. I announce that the Senator from Ohio (Mr. Glenn) is 
necessarily absent.
  The PRESIDING OFFICER (Mr. Smith of Oregon). Are there any other 
Senators in the Chamber desiring to vote?
  The result was announced--yeas 58, nays 37, as follows:

                      [Rollcall Vote No. 23 Leg.]

                                YEAS--58

     Akaka
     Baucus
     Biden
     Bingaman
     Bond
     Boxer
     Breaux
     Bryan
     Bumpers
     Byrd
     Campbell
     Chafee
     Cleland
     Collins
     Conrad
     D'Amato
     Daschle
     Dodd
     Domenici
     Dorgan
     Durbin
     Feingold
     Feinstein
     Ford
     Graham
     Harkin
     Inouye
     Jeffords
     Johnson
     Kempthorne
     Kennedy
     Kerrey
     Kerry
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     McCain
     Mikulski
     Moseley-Braun
     Moynihan
     Murkowski
     Murray
     Reed
     Reid
     Robb
     Rockefeller
     Roth
     Sarbanes
     Snowe
     Specter
     Stevens
     Torricelli
     Warner
     Wellstone
     Wyden

                                NAYS--37

     Abraham
     Allard
     Ashcroft
     Brownback
     Burns
     Cochran
     Coverdell
     Craig
     DeWine
     Enzi
     Faircloth
     Frist
     Gorton
     Gramm
     Grams
     Grassley
     Gregg
     Hagel
     Hatch
     Hollings
     Hutchinson
     Inhofe
     Kyl
     Lott
     Lugar
     Mack
     McConnell
     Nickles
     Roberts
     Santorum
     Sessions
     Shelby
     Smith (NH)
     Smith (OR)
     Thomas
     Thompson
     Thurmond

                             NOT VOTING--5

     Bennett
     Coats
     Glenn
     Helms
     Hutchison
  The motion to lay on the table the amendment (No. 1708) was agreed 
to.
  Mr. CHAFEE. Mr. President, I move to reconsider the vote.
  Mr. LOTT. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. LOTT. Mr. President, first of all, it has already been announced 
informally that that is the last vote of the day. I thank the managers 
of the very important surface transportation legislation for their 
efforts this week. I think some good progress has been made. Several 
amendments have been disposed of. This was one that required some 8 
hours, I believe, of debate.
  Now that we have voted on that, we want to continue to make progress 
to complete this legislation. I think Senators on both sides believe 
that good progress has been made. I really appreciate, once again, the 
effort of Senator Chafee, Senator Baucus, Senator Byrd, Senator 
Domenici, Senator Gramm and others, in coming up with the formula 
change that I think generally is agreed to on both sides of the aisle. 
But we need to begin to think now about how we conclude this so we can 
deal with the other very important issues that are awaiting, including 
the NATO enlargement issue and the Coverdell A-plus education issue. We 
have a couple other bills we are looking at considering on Monday, 
including possibly a resolution with regard to Saddam Hussein being a 
war criminal, and an intelligence bill.
  But at the request of the chairman and the ranking member of the 
Environment Committee, our respective hotlines have asked that all 
Senators come forward with their amendments.
  We are developing a list and we need to know the ones that are 
serious. I know there are a lot of them out there still that Senators 
are contemplating

[[Page S1497]]

offering, but we need to begin identifying the ones that really are 
serious. For instance, the list we have from the hot line is 250 
amendments, with two Members on one side of the aisle having 100 
amendments; just two Senators have 100 amendments. I must say, on our 
side of the aisle, there are 75 amendments. That is ridiculous. We need 
to identify the ones that we really are going to offer. We need 
cooperation in order to get that done.
  We have been considering the bill really since the last session. 
Everybody has had a chance in the committee. Last year, we spent about 
2 weeks talking about it. We had four cloture votes. We have had a 
total of 14 days on it.
  There are several other issues that are important that we are going 
to have come up and will vote on, but I think now we need to get 
serious about bringing this to a conclusion. After looking at the list 
of amendments and consulting with the Democratic leader, I think we do 
need to go ahead and get a cloture vote so that we can eliminate the 
amendments that are not related directly to this bill and then begin to 
narrow the list.


                             Cloture Motion

  Mr. LOTT. Mr. President, I send a cloture motion to the desk to the 
committee amendment.
  The PRESIDING OFFICER. The cloture motion having been presented under 
rule XXII, the Chair directs the clerk to read the motion.
  The assistant legislative clerk read as follows:

                             Cloture Motion

       We the undersigned Senators, in accordance with the 
     provision of rule XXII of the Standing Rules of the Senate, 
     do hereby move to bring to a close debate on the modified 
     committee amendment to S. 1173, the Intermodal Surface 
     transportation Efficiency Act:
         Trent Lott, John H. Chafee, John Ashcroft, Larry E. 
           Craig, D. Nickles, Mike DeWine, Frank Murkowski, 
           Richard Shelby, Gordon Smith, R.F. Bennett, Craig 
           Thomas, Pat Roberts, Mitch McConnell, Conrad Burns, 
           Spencer Abraham, Jesse Helms.

  Mr. LOTT. Mr. President, the cloture vote will occur on Monday, March 
9, probably around 5:15 or 5:30. Again, we will check with the Members' 
schedules and with the Democratic leader, but it will be around that 
time. We indicated there would not be a vote before 5. It may be a 
little after 5, depending on when planes arrive and when we can get 
agreement to have this vote scheduled.


                            Call of the Roll

  Mr. LOTT. Mr. President, I ask unanimous consent that the mandatory 
quorum under rule XXII be waived.
  Mr. DASCHLE. Mr. President, reserving the right to object, and I do 
so to comment on a couple matters raised by the distinguished majority 
leader.
  First of all, he noted we have spent at least 3 weeks on this bill 
already, 2 last fall and 1 last week. He also noted that this has been 
a productive week, and I share that view; it has been productive. I 
will encourage my colleagues to vote in favor of cloture Monday night 
simply because we have to come to closure. There are a lot of good 
amendments to be offered yet. We will have that debate, but we can do 
that under the strictures which cloture provides, and I am very 
supportive of resolving the outstanding questions so we can move on.
  I also compliment, as the majority leader did, our two managers. They 
have done an outstanding job, to date, in working with Members on both 
sides. I hope that we can continue to be responsive to the concerns, 
both with the schedule as well as with the legislation. I am sure that 
will be the case.
  Finally, I thank all of those who voted in favor of tabling the 
previous amendment. I commend the leadership on both sides who took the 
active interest in enlightening us all about the importance of the 
Disadvantaged Business Enterprise Program. I appreciate very much the 
overwhelming vote we just had and, hopefully, at long last, it will put 
this issue to rest.
  Again, Mr. President, I share the sentiment expressed by the leader. 
This is the time to move this legislation forward. This cloture vote 
will allow us to do that. I am hopeful that we can have a good debate 
on other amendments on Monday and have that vote Monday night so we can 
complete our work sometime by the middle of next week. I have no 
objection.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. LOTT. I will note, Mr. President, that the chairman and the 
ranking member have asked me to advise Members they are going to be 
here for more time today, into the afternoon. They are open for 
business. If Senators have amendments, particularly if they think they 
will not be controversial and would like to get them considered, 
perhaps accepted or get them in line to be considered, I hope Senators 
will contact the chairman or the ranking member in the next hour. They 
will be off the floor in a meeting for the next few minutes, but they 
plan to stay here for several more hours to work on this bill.
  I ask unanimous consent now that all first-degree amendments under 
rule XXII be filed up to 1 p.m. on Monday and all second-degree 
amendments by 5 p.m. on Monday.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. LOTT. I understand that at 12 noon, approximately, Senator 
Brownback will be ready to offer an amendment regarding rail banks. I 
hope other Senators will come and be prepared to offer amendments and 
have them considered one way or the other this afternoon. Would the 
Senator from Iowa like me to yield?
  Mr. HARKIN. If the leader will yield for a question. On the highway 
bill, I am concerned the Banking Committee has to offer its amendment 
on transit. I am concerned about the cloture vote on Monday night. Does 
that cover the Banking Committee's provisions on transit, because some 
of us who are concerned about rural transit may have an amendment on 
rural transit depending on what the Banking Committee's amendment looks 
like?
  Mr. LOTT. I understand that amendment is being drafted, and we hope 
to have that offered Monday. The Senator will have a chance to take a 
look at it and be involved in it.
  Mr. HARKIN. If the leader will yield further, but if they offer it on 
Monday and the cloture vote is at, what time, 5?
  Mr. LOTT. At 5:15, 5:30, and it could be even a little later, 
depending on what is going on.
  Mr. HARKIN. That would cover the Banking Committee provision.
  Mr. LOTT. I think what we are saying is we hope to have the banking 
issue done before we get to cloture. But if we can't get it worked out, 
then we will try to work out an arrangement so the Senator's concerns 
will be addressed. We would not want to foreclose that, let's put it 
that way.
  Mr. HARKIN. I appreciate that. I haven't had any amendments to the 
underlying bill. Some of us from rural States may have an amendment 
depending on what the Banking Committee comes out with. We won't have a 
chance to look at it until Monday. I am concerned about having the 
cloture vote without time to look at it and consider it with Members on 
both sides of the aisle. That was my only concern on that.
  Mr. LOTT. I will just say, again, I think the Senator has legitimate 
concerns, and we will have to get an agreement to accommodate those 
concerns, and we intend to do that.
  Mr. HARKIN. I appreciate that.


                           amendment no. 1708

  Mr. BYRD. Mr. President, I would like to briefly explain my vote on 
the motion to table the amendment offered by my distinguished 
colleague, Senator McConnell, to S. 1173, the Intermodal Surface 
Transportation Efficiency Act. Despite my sympathy with the position of 
Mr. McConnell, and despite my reservations about the Disadvantaged 
Business Enterprise (DBE) Program, I voted in favor of tabling the 
amendment.
  Like many of my colleagues, I encourage small businesses--including 
those owned by socially and culturally disadvantaged individuals--to 
take an active role in bidding for federally funded highway 
construction contracts. But, while I understand the goals of the DBE 
program, as set forth in Section 1111 of ISTEA, I do not support 
preferential treatment for certain businesses on the basis of the race, 
ethnicity, or gender of their owners.
  I believe that the Constitution, as amended by the 5th, 13th, and 
14th Amendments, does not permit the government to discriminate or 
differentiate on the basis of race, ethnicity, or

[[Page S1498]]

gender--regardless of whether the government's motive is malicious or 
benign. If the precepts of ``equal protection'' and ``due process'' are 
to mean anything, then they must ensure that no one in this country is 
granted favorable or unfavorable treatment on the basis of some single 
differentiating characteristic.
  My reading of the Constitution is supported by the Supreme Court's 
1995 decision in Adarand versus Pena. In that decision, the Court rules 
that the DBE and other race-based affirmative action programs can only 
be upheld if they are narrowly tailored to meet a compelling 
governmental interest. This test, commonly referred to as ``strict 
scrutiny,'' makes it exceedingly difficult for any affirmative action 
program to pass constitutional muster. It should come as no surprise, 
then, that after the Court remanded the Adarand case, a federal 
district court judge found that the DBE program fails strict scrutiny, 
and thus is unconstitutional. Indeed, it is worth pointing out that the 
last time that the Supreme Court upheld a statute based on a racial- or 
national-origin classification under the strict scrutiny test was in 
1944.
  In my opinion, the correct course of action is to award highway 
contracts on the basis of cost, performance, and the most efficient use 
of taxpayer's money. This merit-based approach is both fair and 
constitutionally appropriate.
  Despite these reservations about DBE, I also recognize that the 
courts have not yet definitively ruled on the constitutionality of 
affirmative action programs. The Adarand district court decision is 
currently on appeal, and I look forward to further clarification of the 
constitutionality of programs such as DBE.
  Furthermore, while I support the McConnell amendment in principle, I 
believe that further debate and scrutiny is necessary. This amendment 
has not yet been subjected to the committee process, which is so 
essential to determining the true merits and flaws of a proposal. 
Before we replace the DBE program with an Emerging Business Enterprise 
Program, we need to ensure that the replacement does exactly what we 
want it to do. Otherwise, we risk hurting some small businesses through 
rash, ill-considered action. For these reasons, I voted to table the 
McConnell amendment.

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