[Congressional Record Volume 145, Number 21 (Saturday, February 6, 1999)]
[Senate]
[Pages S1327-S1328]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. McCAIN:
  S. 384. A bill to authorize the Secretary of Defense to waive certain 
domestic source or content requirements in the procurement of items.


                  BUY AMERICA RESTRICTIONS LEGISLATION

 Mr. McCAIN. Mr. President, I rise today to introduce 
legislation that would authorize the Secretary of Defense to waive 
``Buy America'' restrictions on all items procured for the Department 
of Defense.
  I have spoken of this issue before in this Chamber and the potential 
impact of our ``Buy America'' policy on bilateral trade relations with 
our allies. From a philosophical point of view, I oppose this type of 
protectionist trade policy, not only because I believe free trade is an 
important means of improving relations among all nations and a key to 
major U.S. economic growth, but also because I believe we must reform 
these practices in order to make our limited defense dollars go further 
so as to reverse the downward trend in our military readiness.
  Mr. President, this is a simple and straightforward bill that 
promotes U.S. products, not by imposing restrictive barriers on open 
competition and free trade, but by reinforcing sound and beneficial 
economic principles.
  This bill gives the Secretary of Defense the authority to waive 
restrictions on the procurement of all items with respect to a foreign 
country if the Secretary of Defense determines they would impede 
cooperative programs entered into between a foreign country and the 
Department of Defense. Additionally, it would waive protectionist 
practices if it is determined that such practices would impede the 
reciprocal procurement of items in that foreign country, and that 
foreign country does not discriminate against items produced in the 
U.S. to a greater degree than the U.S. discriminates against items 
produced in that country.
  For example, the Secretary of Defense may waive ``Buy America'' 
restrictions for contracts and subcontracts for items because of 
unreasonable delays or costs to the U.S. government in equipping 
servicemembers with U.S. products; insufficient quantity or 
unsatisfactory quality of U.S. products; and absence of competition in 
the U.S., resulting in a monopoly or a sole source contract, and thus, 
a higher price for the Department of Defense and ultimately the 
taxpayer.
  Let me be clear, I am not against U.S. procurement of American 
products. The United States, without a doubt, produces the very best 
products in the world. In fact, a recent Department of State study 
reported that U.S. defense companies sold more weapons and defense 
products and claimed a larger share of the world market than was 
previously realized. This new study shows U.S. exports of defense 
products increased to nearly $25 billion in 1996, comprising nearly 60 
percent of global exports. This number continues to rise steadily.
  From a practical standpoint, adherence to ``Buy America'' 
restrictions seriously impairs our ability to compete freely in 
international markets for the best price on needed military equipment 
and could also result in a loss of existing business from longstanding 
international trading partners. While I fully understand the arguments 
made by some that the ``Buy America'' restrictions help maintain 
certain critical industrial base capabilities, I find no reason to 
support domestic source restrictions for products that are widely 
available from many U.S. companies (e.g., pumps produced by at least 25 
U.S. companies). I believe that competition and open markets among our 
allies on a reciprocal basis would provide the best equipment at the 
best prices for taxpayers and U.S. and allied militaries alike.
  In recent meetings, the Ambassadors and other senior representatives 
of the United Kingdom, Sweden, Netherlands, Australia and Israel have 
apprised me of similar situations in their countries. In every meeting, 
they tell me how difficult it is becoming to persuade their governments 
to buy American defense products, because of our protectionist policies 
and the growing ``Buy European'' sentiment.
  Mr. President, we have heard over the last four months of the dire 
situation of our military forces. We have heard testimony of decreasing 
readiness, modernization programs that are decades behind schedule, and 
quality of life deficiencies that are so great we cannot retain, much 
less recruit, the personnel we need. As a result, there has been a 
recent groundswell of support in Congress for the Armed Forces, 
including a number of pay and retirement initiatives and the promise of 
a significant increase in defense spending.
  All of these proposals are excellent starting points to help re-forge 
our military, but we must not forget that much of them will be in vain 
if the Department of Defense is obligated to maintain wasteful, 
protectionist trade policies. When we actually look for the dollars to 
pay for these initiatives, it would be unconscionable not to examine 
the potential for savings from modifying the ``Buy America'' program. 
Secretary Cohen and the Joint Chiefs of Staff have stated repeatedly 
that they want more flexibility to reform the military's archaic 
acquisition practices. We cannot sit idly by and throw money at the 
problem, without considering this partial solution regarding ``Buy 
America.''
  Mr. President, the Congress can continue to protect U.S. industry 
from foreign competition for selfish, special interest reasons, or we 
can loosen these restrictions to provide the necessary funds to ensure 
our military can fight and win future wars. Every dollar we spend on 
archaic procurement policies, like ``Buy America,'' is a dollar we 
cannot spend on training our troops, keeping personnel quality of life 
at an appropriate level, maintaining force structure, replacing old 
weapons systems, and advancing our military technology.
  Mr. President, it is my sincere hope that this legislation will end 
once and for all the anti-competitive, anti-free trade practices that 
encumber our government, the military, and U.S. industry. I urge my 
colleagues to join me in support of this critical bill.
  Mr. President, I ask unanimous consent that a copy of the legislation 
be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 384

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. AUTHORITY TO WAIVE DOMESTIC SOURCE OR CONTENT 
                   REQUIREMENTS.

       (a) Authority.--Chapter 141 of title 10, United States 
     Code, is amended by adding at the end the following new 
     section:

     ``Sec. 2410n. Authority to waive domestic source and content 
       requirements

       ``(a) Authority.--Subject to subsection (c), the Secretary 
     of Defense may waive any domestic source requirement or 
     domestic content requirement referred to in subsection (b) 
     and thereby authorize the procurement of items that are 
     grown, reprocessed, reused, produced, or manufactured--
       ``(1) outside the United States or its possessions; or
       ``(2) in the United States or its possessions from 
     components grown, reprocessed, reused, produced, or 
     manufactured outside the United States or its possessions.

[[Page S1328]]

       ``(b) Covered Requirements.--For purposes of this section:
       ``(1) A domestic source requirement is any requirement 
     under law that the Department of Defense must satisfy its 
     needs for an item by procuring an item that is grown, 
     reprocessed, reused, produced, or manufactured in the United 
     States, its possessions, or a part of the national technology 
     and industrial base.
       ``(2) A domestic content requirement is any requirement 
     under law that the Department must satisfy its needs for an 
     item by procuring an item produced partly or wholly from 
     components grown, reprocessed, reused, produced, or 
     manufactured in the United States or its possessions.
       ``(c) Limitation.--The Secretary may waive a domestic 
     source requirement or domestic content requirement under 
     subsection (a) only if the Secretary determines that one or 
     more of the conditions set forth in section 2534(d) of this 
     title apply with respect to the procurement of the items 
     concerned.
       ``(d) Relationship to Other Waiver Authority.--The 
     authority under subsection (a) to waive a domestic source 
     requirement or domestic content requirement is in addition to 
     any other authority to waive such requirement.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of such chapter is amended by adding the adding at 
     the end following new item:

``2410n. Authority to waive domestic source or content 
              requirements.''.
                                 ______