[Congressional Record Volume 145, Number 49 (Monday, April 12, 1999)]
[Senate]
[Pages S3595-S3598]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


[[Page S3595]]
          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. THURMOND:
  S. 763. A bill to amend title 10, United States Code, to increase the 
minimum Survivor Benefit Plan basic annuity for surviving spouses age 
62 and older, and for other purposes; to the Committee on Armed 
Services.


                  SBP BENEFITS IMPROVEMENT ACT OF 1999

  Mr. THURMOND. Mr. President, today, as our Armed Forces are engaged 
in operations over Yugoslavia, I am introducing legislation that 
corrects a long-standing injustice to the widows of our military 
retirees. My bill would immediately increase for survivors over the age 
62 the minimum Survivor Benefit Plan annuity from 35 percent to 40 
percent of the Survivor Benefit Plan-covered uniform services retired 
pay. The bill would provide a further increase to 45 percent of covered 
retired pay as of October 1, 2004.

  Mr. President, I expect every member of the Senate has received mail 
from military spouses expressing dismay that they would not be 
receiving the 55 percent of their husband's retirement pay as 
advertised in the Survivor Benefit Plan literature provided by the 
military. The reason that they do not receive the 55 percent of retired 
pay is that current law mandates that at age 62 this amount be reduced 
either by the amount of the Survivors Social Security benefit or to 35 
percent of the SBP. This law is especially irksome to those retirees 
who joined the plan when it was first offered in 1972. These service 
members were never informed of the age-62 reduction until they had made 
an irrevocable decision to participate. Many retirees and their 
spouses, as the constituent mail attests, believed their premium 
payments would guarantee 55 percent of retired pay for the life of the 
survivor. It is not hard to imagine the shock and financial 
disadvantage these men and women who so loyally served the Nation in 
troubled spots throughout the world undergo when they learn of the 
annuity reduction.
  Mr. President, uniformed services retirees pay too much for the 
available SBP benefit both, compared to what we promised and what we 
offer other federal retirees. When the Survivor Benefit Plan was 
enacted in 1972, the Congress intended that the government would pay 40 
percent of the cost to parallel the government subsidy of the Federal 
civilian survivor benefit plan. That was short-lived. Over time, the 
government's cost sharing has declined to about 26 percent. In other 
words, the retiree's premiums now cover 74 percent of expected long-
term program costs versus the intended 60 percent. Contrast this with 
the federal civilian SBP, which has a 42 percent subsidy for those 
personnel under the Federal Employees Retirement System and a 50 
percent subsidy for those under the Civil Service Retirement System. 
Further, Federal civilian survivors receive 50 percent of retired pay 
with no offset at age 62. Although Federal civilian premiums are 10 
percent retired pay compared to 6.5 percent for military retirees, the 
difference in the percent of contribution is offset by the fact that 
our service personnel retire at a much younger age than the civil 
servant and, therefore pay premiums much longer than the federal 
civilian retiree.

  Mr. President, two years ago, with the significant support from the 
Members of the Senate Armed Services Committee, I was successful in 
gaining approval from the Congress in enacting the Survivor Benefit 
Plan benefits for the so-called Forgotten Widows. This is the second 
step toward correcting the Survivors Benefit Plan and providing the 
surviving spouses of our military personnel earned and paid for 
benefits. I urge that the Senate act promptly on this bill.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 763

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``SBP Benefits Improvement Act 
     of 1999''.

     SEC. 2. COMPUTATION OF SURVIVOR BENEFITS.

       (a) Increased Basic Annuity.--(1) Subsection (a)(1)(B)(i) 
     of section 1451 of title 10, United States Code, is amended 
     by striking ``35 percent of the base amount.'' and inserting 
     ``the product of the base amount and the percent applicable 
     for the month. The percent applicable for a month is 35 
     percent for months beginning on or before the date of the 
     enactment of the SBP Benefits Improvement Act of 1999, 40 
     percent for months beginning after such date and before 
     October 2004, and 45 percent for months beginning after 
     September 2004.''.
       (2) Subsection (a)(2)(B)(i)(I) of such section is amended 
     by striking ``35 percent'' and inserting ``the percent 
     specified under subsection (a)(1)(B)(i) as being applicable 
     for the month''.
       (3) Subsection (c)(1)(B)(i) of such section is amended--
       (A) by striking ``35 percent'' and inserting ``the 
     applicable percent''; and
       (B) by adding at the end the following: ``The percent 
     applicable for a month under the preceding sentence is the 
     percent specified under subsection (a)(1)(B)(i) as being 
     applicable for the month.''.
       (4) The heading for subsection (d)(2)(A) of such section is 
     amended to read as follows: ``Computation of annuity.--''.
       (b) Adjusted Supplemental Annuity.--Section 1457(b) of 
     title 10, United States Code, is amended--
       (1) by striking ``5, 10, 15, or 20 percent'' and inserting 
     ``the applicable percent''; and
       (2) by inserting after the first sentence the following: 
     ``The percent used for the computation shall be an even 
     multiple of 5 percent and, whatever the percent specified in 
     the election, may not exceed 20 percent for months beginning 
     on or before the date of the enactment of the SBP Benefits 
     Improvement Act of 1999, 15 percent for months beginning 
     after that date and before October 2004, and 10 percent for 
     months beginning after September 2004.''.
       (c) Recomputation of Annuities.--(1) Effective on the first 
     day of each month referred to in paragraph (2)--
       (A) each annuity under section 1450 of title 10, United 
     States Code, that commenced before that month, is computed 
     under a provision of section 1451 of that title amended by 
     subsection (a), and is payable for that month shall be 
     recomputed so as to be equal to the amount that would be in 
     effect if the percent applicable for that month under that 
     provision, as so amended, had been used for the initial 
     computation of the annuity; and
       (B) each supplemental survivor annuity under section 1457 
     of such title that commenced before that month and is payable 
     for that month shall be recomputed so as to be equal to the 
     amount that would be in effect if the percent applicable for 
     that month under that section, as amended by this section, 
     had been used for the initial computation of the supplemental 
     survivor annuity.
       (2) The requirements for recomputation of annuities under 
     paragraph (1) apply with respect to the following months:
       (A) The first month that begins after the date of the 
     enactment of this Act.
       (B) October 2004.
       (d) Recomputation of Retired Pay Reductions for 
     Supplemental Survivor Annuities.--The Secretary of Defense 
     shall take such actions as are necessitated by the amendments 
     made by subsection (b) and the requirements of subsection 
     (c)(1)(B) to ensure that the reductions in retired pay under 
     section 1460 of title 10, United States Code, are adjusted to 
     achieve the objectives set forth in subsection (b) of that 
     section.
                                 ______
                                 
      By Mr. THURMOND (for himself and Mr. Hatch):
  S. 764. A bill to amend section 1951 of title 18, United States Code 
(commonly known as the Hobbs Act), and for other purposes; to the 
Committee on the Judiciary.


      THE FREEDOM FROM UNION VIOLENCE ACT, MONDAY, APRIL 12, 1999

  Mr. THURMOND. Mr. President, today, I am introducing legislation to 
close a long-standing loophole in our Nation's labor laws. The purpose 
of the bill is to make clear that violence conducted in the course of a 
strike is illegal under the Federal extortion law, the Hobbs Act. I am 
pleased to have Senator Hatch, Chairman of the Judiciary Committee, 
join me once again in introducing this important measure.
  Violence has no place in our society. As I have said many times 
before, I would, if it were in my power to do so, put an absolute stop, 
without any compromise, to the disruption of commerce in this country 
by intimidation and violence, whatever its source.
  Unfortunately, corrupt union officials have often been the source of 
such violence. Encouraged by their special Federal exemption from 
prosecution, corrupt union officials have routinely used intimidation 
and violence over the years to achieve their goals. Since 1975, the 
Institute for Labor Relations Research has documented over 9,000 
reported incidents of union violence in America.
  Let me make clear that I agree that the Federal government should not 
get involved in minor, isolated physical altercations and vandalism 
that are bound to occur during a labor dispute when emotions are 
charged and tempers flare. Action such as this is not significant to 
commerce. However, when union violence moves beyond this and becomes a 
pattern of violent conduct or of coordinated violent activity,

[[Page S3596]]

the Federal government should be empowered to act. State and local 
governments sometimes fail to provide an effective remedy, whether 
because of a lack of will, a lack of resources, or an inability to 
focus on the interstate nature of the conduct. It is during these times 
that Federal involvement is needed to help control and stop the 
violence.
  Let me also note that this legislation has never been an effort to 
involve the Federal government in a matter that traditionally has been 
reserved for the states. Labor relations are regulated on a national 
basis, and labor management policies are national policies. There is no 
reason to keep the Federal Government out of serious labor violence 
that is intended to achieve labor objectives. Indeed, the Congress 
intended for the Hobbs Act to apply to the conduct we are addressing in 
this legislation today. The decision to keep the Federal government out 
was not made by the Congress. Rather, it was made by the Supreme Court 
in the United States versus Enmons decision in 1973, when the Supreme 
Court found that the Hobbs Act did not apply to a lawful strike, as 
long as the purpose of the strike was to achieve ``legitimate labor 
objectives,'' such as higher wages. Such an exception does not exist in 
the words of the statute. The Court could only create this loophole 
through a strained interpretation of the statute and a selective 
reading of its legislative history. In his dissent, Justice Douglas 
aptly criticized the majority for, ``achieving by interpretation what 
those who were opposed to the Hobbs Act were unable to get Congress to 
do.''

  More specifically, the Enmons decision involved the Hobbs Anti-
Racketeering Act which is intended to prohibit extortion by labor 
unions. It provides that: ``Whoever in any way . . . obstructs, delays, 
or affects commerce in the movement of any article or commodity in 
commerce, by robbery or extortion or attempts or conspires to do so or 
commits or threatens physical violence to any person or property . . 
.'' commits a criminal act. This language clearly outlaws extortion by 
labor unions. It outlaws violence by labor unions.
  Although this language is very clear, the Supreme Court in Enmons 
created an exemption to the law which says that as long as a labor 
union commits extortion and violence in furtherance of legitimate 
collective-bargaining objectives, no violation of the act will be 
found. Simply put, the Court held that if the ends are permissible, the 
means to that end, no matter how horrible or reprehensible, will not 
result in violation of the act.
  Let me discuss the Enmons case. In that case, the defendants were 
indicted for firing high-powered rifles at property, causing extensive 
damage to the property owned by a utility company--all done in an 
effort to obtain higher wages and other benefits from the company for 
striking employees. The indictment was, however, dismissed by the 
district court on the theory that the Hobbs Act did not prohibit the 
use of violence in obtaining legitimate union objectives. On appeal, 
the Supreme Court affirmed.
  The Supreme Court held that the Hobbs Act does not proscribe violence 
committed during a lawful strike for the purpose of achieving 
legitimate collective-bargaining objectives, like higher wages. By its 
focus upon the motives and objectives of the property claimant who uses 
violence or force to achieve his or her goals, the Enmons decision has 
had several unfortunate results. It has deprived the Federal Government 
of the ability to punish significant acts of extortionate violence when 
they occur in a labor management context. Although other Federal 
statutes prohibit the use of specific devices or the use of channels of 
commerce in accomplishing the underlying act of extortionate violence, 
only the Hobbs Act proscribes a localized act of extortionate violence 
whose economic effect is to disrupt the channels of commerce. Other 
Federal statutes are not adequate to address the full effect of the 
Enmons decision.

  The Enmons decision affords parties to labor-management disputes an 
exemption from the statute's broad proscription against violence which 
is not available to any other group in society. This bill would make it 
clear that the Hobbs Act punishes the actual or threatened use of force 
and violence which is calculated to obtain property without regard to 
whether the extortionist has a colorable claim to such property, and 
without regard to his or her status as a labor representative, 
businessman, or private citizen.
  In short, the Enmons decision is an unfortunate example of judicial 
activism, of a court interpreting a statute to reach the policy result 
the court favors rather than the one the legislature intended. This is 
a problem that has concerned many of us in the Senate for many years. 
We have held numerous hearings on this matter in the Judiciary 
Committee since the Enmons decision. Our most recent hearing was in the 
last Congress after the UPS strike.
  It is time we closed the loophole on union violence in America. It is 
my hope that this year we will be successful.
                                 ______
                                 
      By Ms. COLLINS (for herself and Mr. Torricelli):
  S. 765. A bill to ensure the efficient allocation of telephone 
numbers; to the Committee on Commerce, Science, and Transportation.


                       area code conservation act

  Ms. COLLINS. Mr. President, on behalf of Senator Torricelli and 
myself, I am pleased to introduce today the Area Code Conservation Act. 
This legislation is designed to spare American businesses and 
households the expense and inconvenience of unnecessary changes in 
their area codes.
  Mr. President, our current system for allocating numbers to local 
telephone companies is woefully inefficient. It leads to the exhaustion 
of an area code long before all the telephone numbers covered by that 
code are actually in use. My legislation will take steps to stop this 
wasteful practice and to bring some measure of sanity to our system of 
allocating telephone numbers.
  When area codes were first introduced in 1947, 86 area codes covered 
all of North America. During the three-year period beginning on January 
1, 1998, it is estimated that we will add 90 new area codes in the 
United States alone. In short, Mr. President, in only three years, we 
will add more codes than were originally required to cover the entire 
continent. And there does not seem to be an end in sight.
  To the extent that additional area codes are needed to bring new 
telecommunications services to existing users or existing services to 
new users, they are a price we must pay. To the extent they are the 
result of inefficient practices, however, they are a price we must 
avoid. Unfortunately, the latter is far too frequently the case, as I 
shall explain.
  The problem addressed by my legislation stems from a very simple 
fact. When a new carrier wishes to provide competitive telephone 
service in a community, it must obtain at least one central office 
code. Because it contains its own unique three-digit prefix within an 
area code, each central office code--and herein lies the crux of the 
problem--includes 10,000 telephone numbers. Thus, even if a telephone 
carrier expects to serve only five hundred customers in the community, 
it will exhaust 10,000 phone numbers in the process. And the ultimate 
effect of this occurring on a repeated basis is to exhaust all of the 
numbers in the area code, thereby requiring that a new area code be 
created.
  Let me illustrate this further. Let's assume that a town of 12,000 
households, each with one telephone line, is served by a single 
telephone carrier. The carrier will be able to meet the demand with 
only two central office codes and still have about 8,000 numbers for 
new customers. Assume further that three new competitors enter the 
market, which would be a welcome development and one that the 1996 
Telecommunications Act was enacted to promote. Since central office 
codes are not shared by carriers, each new competitor would need its 
own code consisting of 10,000 telephone numbers. As you can see when 
you do the math, we would go from exhausting 20,000 numbers to 
exhausting 50,000 numbers to serve our town of just 12,000 households.
  My own home state of Maine dramatically reflects the problem inherent 
in the current system. With a population of about 1.2 million people, 
we have 5.7 million unused telephone numbers out of the roughly 8 
million usable

[[Page S3597]]

numbers in our area code 207. However, more than 3 million of the 
unused numbers are within central office codes that have already been 
assigned, making them unavailable for other carriers. Thus, despite the 
fact that more than 70% of the telephone numbers in the 207 area code 
are not in use, Maine has been notified by the North American Numbering 
Plan Administrator that it will be forced to create a new area code by 
the Spring of the year 2000.

  As one Maine commentator noted, even if every moose in Maine had a 
telephone number, we would still have plenty of numbers left over. Yet, 
we are told we will soon need another area code, something that 
probably make as much sense to our moose as to our people.
  Mr. President, this paradigm of inefficiency in the midst of 
America's telecommunications revolution might almost be amusing were it 
not for the fact that it causes real hardships for many small 
businesses. With its great beauty, the Maine coast relies heavily on 
tourism for its economic health. We have heard from businesspeople 
throughout our coastal communities--a gallery owner in Rockport, an 
innkeeper in Bar Harbor, and a schooner captain in Rockland--who are 
among those who are rightly concerned about the cost of updating 
brochures, business cards, and other promotional literature, all of 
which will be necessitated by having a new area code. And as the 
innkeeper also told my office, it takes as long as 2 years to revise 
some guide books, the biggest source of information for many of his 
guests. Changing the area code could therefore lead to a significant 
loss of business and unneeded expenses for these small businesses.
  Along with the economic cost, new area codes create tremendous 
disruption and confusion for consumers. With geographically split area 
codes, States, counties, and cities are split apart, creating new 
territorial boundaries that only serve to divide citizens. With overlay 
area codes, even more confusion can result. Just imagine having to dial 
up a different area code in order to order a pizza from a delivery 
service just down the street.
  The legislation I am introducing today will resolve these problems 
and bring common sense to the process of allocating telephone numbers. 
The Area Code Conservation Act will set a date certain by which the 
Federal Communications Commission must develop a plan for the efficient 
allocation of telephone numbers. Consistent with the provisions of the 
Telecommunications Act of 1996, the plan must include measures to 
ensure that telephone numbers will be portable when customers change 
carriers and that unassigned numbers in a central office code will not 
be the exclusive property of a single carrier.
  The Area Code Conservation Act would also give decision-making 
authority to the States, where officials know the best policies to 
promote competition while minimizing costs and confusion to businesses 
and consumers. Specifically, the Act would authorize State public 
utility commissions to implement area code conservation measures while 
the FCC is developing its plan and, I would hope, before a new area 
code is needlessly forced on the State. These conservation measures 
could include minimum fill rates for central office codes, mandatory 
1,000-block pooling, individual number pooling, and interim unassigned 
number porting.
  The legislation would also allow State commissions to require the 
return of unused or underused central office codes to the numbering 
administrator.
  In developing this legislation, I received valuable assistance and 
technical advice from the Maine Public Utilities Commission. I have 
every confidence in the ability of the Maine PUC and, indeed, State 
commissions throughout this country to develop the best policy in this 
area.
  The people of Maine welcome technological change and accept that it 
may come with a price. They are prepared to pay for innovation and 
progress, but they object--indeed, they should object--when they are 
asked to pay for inefficiency. When one looks behind its technical 
subject matter, this bill is about nothing more complicated than 
stopping a form of government waste. Such waste should not be tolerated 
by Members of this body, whether they come from States like Maine with 
a single area code or from States with cities already divided into 
different area codes.
  I urge my colleagues to support my efforts to bring an end to this 
inefficiency and the unnecessary cost and inconvenience it will impose 
on our citizens, particularly our small businesses.
                                 ______
                                 
      By Mr. LEVIN (for himself, Mr. Abraham, Mr. Robb, Mr. Helms, and 
        Mr. Feingold):
  S. 766. A bill to amend title 18, United States Code, to revise the 
requirements for procurement of products of Federal Prison Industries 
to meet needs of Federal agencies, and for other purposes; to the 
Committee on the Judiciary.


      the federal prison industries competition in contracting act

  Mr. LEVIN. Mr. President, I am pleased to introduce, with Senators 
Abraham, Robb, Helms, and Feingold, the Federal Prison Industries 
Competition in Contracting Act. This bill, if enacted, would eliminate 
the requirement for Federal agencies to purchase products made by 
Federal Prison Industries and require FPI to compete commercially for 
Federal contracts. It would implement a key recommendation of the Vice 
President's National Performance Review, which concluded that we should 
``Take away the Federal Prison Industries' status as a mandatory source 
of federal supplies and require it to compete commercially for Federal 
agencies' business.'' Most importantly, it would ensure that the 
taxpayers get the best possible value for their federal procurement 
dollars.
  Mr. President, Federal Prison Industries has repeatedly claimed that 
it provides a quality product at a price that is competitive with 
current market prices. Indeed, the Federal Prison Industries statute 
requires them to do so. That statute states, and I quote, that FPI may 
provide to Federal agencies products that ``meet their requirements'' 
at prices that do not ``exceed current market prices.''
  Indeed, FPI would appear to have a significant advantage in any head-
to-head competition, since FPI pays inmates less than $2 an hour, far 
below the minimum wage and a small fraction of the wage paid to most 
private sector workers in competing industries.
  The taxpayers also provide a direct subsidy to Federal Prison 
Industries products by picking up the cost of feeding, clothing, and 
housing the inmates who provide the labor. There is no reason why we 
should provide an indirect subsidy as well, by requiring Federal 
agencies to purchase products from FPI even when they are more 
expensive and of a lower quality than competing commercial items.
  Yet, FPI remains unwilling to compete with the private sector, or 
even to permit Federal agencies to compare their products and prices 
with those available in the private sector. Indeed, FPI recently 
published a proposed rule which would expressly prohibit Federal 
agencies from conducting market research, as they would ordinarily do, 
to determine whether the price and quality of FPI products is 
comparable to what is available in the commercial marketplace. Instead, 
federal agencies are required to contact FPI, which will act as the 
sole arbiter of whether the product meets the agency's requirements. 
The proposed rule states:

       A contracting activity should not solicit bids, proposals, 
     quotations, or otherwise test the market for the purpose of 
     seeking alternative sources to FPI. . . . the contracting 
     officer or activity should contact FPI, and FPI will 
     determine . . . whether an agency's requirement can be met by 
     FPI.

  The reason for FPI's position is obvious: it is much easier to gain 
market share by fiat than it is to compete for business. Under FPI's 
current interpretation of the law, it need not offer the best product 
at the best price; it is sufficient for it to offer an adequate product 
at an adequate price, and insist upon its right to make the sale. 
Indeed, FPI currently advertises that it offers federal agencies ``ease 
in purchasing'' through ``a procurement with no bidding necessary.''
  The result of the FPI's status as a mandatory source is not unlike 
the result of other sole-source contracting: the taxpayers frequently 
pay too much

[[Page S3598]]

and receive an inferior product for their money. When FPI sets its 
prices, it does not even attempt to match the best price available in 
the commercial sector; instead, it claims to have charged a ``market 
price'' whenever it can show that at least some vendors in the private 
sector charges as high a price. As GAO reported in August 1998, ``The 
only limit the law imposes on FPI's price is that it may not exceed the 
upper end of the current market price range.''
  Yet, FPI appears to have had difficulty providing even this minimal 
protection for the taxpayer. GAO compared FPI prices for 20 
representative products to private vendors' catalog or actual prices 
for the same or comparable products and found that for 4 of these 
products, FPI's price was higher than the price offered by any private 
vendor. Moreover, for five of the remaining products, FPI's price was 
at the ``high end of the range'' of prices offered by private vendors--
ranking sixth, seventh, eighth, and ninth of the ten vendors reviewed, 
respectively. In other words, for almost half of the FPI products 
reviewed, the FPI approach appeared to be to charge the highest price 
possible, rather than the lowest price possible, to the Federal 
customer.
  One example of FPI overpricing was presented in a December 19, 1997 
letter that I received from a frustrated vendor. The vendor stated:

       If the Air Force would purchase a completed unit as 
     described in UNICOR's solicitation directly from a . . . . 
     manufacturer we estimate the cost will be approximately 
     $6,500.00. UNICOR is going to purchase a kit for $9,259.00 
     and add their assembly and administrative costs to the unit. 
     If UNICOR only adds $1500.00 to the total cost of the unit, 
     it will cost the Air Force $10,759.00. This is 66 percent 
     higher than the current market price. If the Air Force 
     purchases 8,000 units over the next five years it will cost 
     the taxpayers an additional $34,072,000.00 over what it would 
     cost if they dealt directly with a manufacturer.

A second frustrated vendor reported a similar experience to me. The 
vendor's letter stated:

       [FPI] bid on this item and simply because [FPI] did, I was 
     told that the award had to be given to [FPI]. [FPI] won the 
     bid at $45 per unit. My company bid $22 per unit. The way I 
     see it, the government just overspent my tax dollars to the 
     tune of $1,978. The total amount of my bid was less than 
     that. Do you seriously believe that this type of procurement 
     is cost-effective?
       I lost business, and my tax dollars were misused because of 
     unfair procurement practices mandated by federal regulations. 
     This is a prime example, and I am certain not the only one, 
     of how the procurement system is being misused and small 
     businesses in this country are being excluded from 
     competition, with the full support of federal regulations and 
     the seeming approval of Congress. It is far past the time to 
     curtail this `company' known as Federal prison Industries and 
     require them to be competitive for the benefit of all 
     taxpayers.

  This kind of overpricing has a real and dramatic impact on the 
ability of the Department of Defense to purchase the products that they 
need to provide for the national defense and for the welfare of our men 
and women in uniform. For example, the Master Chief Petty Officer of 
the Navy testified before the House National Security Committee on July 
30, 1996, and the FPI monopoly on government furniture contracts has 
undermined the Navy's ability to improve living conditions for its 
sailors. Master Chief Petty Officer John Hagan stated, and I quote:

       Speaking frankly, the [FPI] product is inferior, costs 
     more, and takes longer to procure. [FPI] has, in my opinion, 
     exploited their special status instead of making changes 
     which would make them more efficient and competitive. The 
     Navy and other Services need your support to change the law 
     and have FPI compete with [private sector] furniture 
     manufacturers [under GSA contracts]. Without this change, we 
     will not be serving Sailors or taxpayers in the most 
     effective and efficient way.

  Mr. President, I do not consider my self to be an enemy of Federal 
Prison Industries. I am a strong supporter of the idea of putting 
federal inmates to work. I understand that a strong prison work program 
not only reduces inmate idleness and prison disruption, but can also 
help build a work ethic, provide job skills, and enable prisoners to 
return to product society upon their release.
  However, I believe that a prison work program must be conducted in a 
manner that is sensitive to the need not to unfairly eliminate the jobs 
of hard-working citizens who have not committed crimes. FPI will be 
able to achieve this result only if it diversifies its product lines 
and avoids the temptation to build its workforce by continuing to 
displace private sector jobs in its traditional lines of work. For this 
reason, I have been working since 1990 to try to help Federal Prison 
Industries to identify new markets that it can expand into without 
displacing private sector jobs.
  Mr. President, avoiding competition is the easy way out, but it isn't 
the right way for FPI, it isn't the right way for the private sector 
workers whose jobs FPI is taking, and it isn't the right way for the 
taxpayer, who will continue to pay more and get less as a result of the 
mandatory preference for FPI goods. We need to have jobs for prisoners, 
but can no longer afford to allow FPI to designate whose jobs it will 
take, and when it will take them. Competition will be better for FPI, 
better for the taxpayer, and better for working men and women around 
the country.

                          ____________________