[Congressional Record Volume 147, Number 54 (Thursday, April 26, 2001)]
[Senate]
[Pages S3937-S3966]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          EXPORT ADMINISTRATION ACT OF 2001--MOTION TO PROCEED

  Mr. LOTT. Mr. President, I now move to proceed to S. 149, and I 
understand that there are some opening statements that can be made. I 
hope that we can work through the objections so that we can actually 
move to the legislation. I move to proceed to the bill at this time.
  The PRESIDING OFFICER. The question is on agreeing to the motion, and 
it is debatable.
  The Senator from Texas is recognized.
  Mr. GRAMM. Mr. President, I thank the majority leader for moving to 
bring this bill to the floor of the Senate. As many of my colleagues 
know, the Congress has not reauthorized the Export Administration Act 
on a permanent basis since the early 1990s. As a result, we have been 
in a period where we have sought to get multilateral action on export 
controls to protect critical national security secrets, but we have had 
a very difficult time having standing on those issues among our allies 
when we do not even have a regime in place to monitor exports coming 
out of the United States of America.
  I think it is a terrible indictment of the Congress that for so many 
years we were unable to enact a bill to restore our export control 
authorities. I understand that these are very difficult issues, and 
they are difficult for a very simple reason: the Nation has apparently 
conflicting goals. We want to export high-tech items, we want to 
dominate the world in new technology, we want new innovations to occur 
in America, and we want to be the principal beneficiary of the 
technological revolution that is changing our lives and the life of 
every person who lives on the planet. And to do these things, we want 
Americans to be able to sell high-tech products on the world market.
  Wages in these industries are among the highest wages in the world. 
They really will determine the future of economic development on the 
planet, and it is a very high American priority to see that we generate 
these new technologies, that we generate these new jobs, and that 
Americans be the highest paid workers on the planet.
  Our problem comes in that we also have an objective of trying to 
prevent sensitive technologies that have defense applications from 
getting into the hands of people who might, at the current time or in 
the future, become adversaries of the United States of America. First 
of all, I think we have to admit to ourselves that there is an apparent 
conflict in these two goals and, hence, you have the difficulty in 
dealing with this problem.
  Now, I want our colleagues to understand that, first, the Banking 
Committee has very large jurisdiction as it relates to national 
security. In fact, other than the Armed Services Committee, no 
committee in Congress has authorizing jurisdiction in defense that 
rivals the Banking Committee.
  Let me give some examples. The Defense Production Act is under the 
exclusive jurisdiction of the Banking Committee.
  The Trading with the Enemy Act is under the exclusive jurisdiction of 
the Banking Committee.
  The International Emergency Economic Powers Act, which has frequently 
been used for export control purposes, is under the exclusive 
jurisdiction of the Banking Committee.
  The Export Administration Act, which is before us today, is under the 
exclusive jurisdiction of the Banking Committee.
  The Exon-Florio amendment, which set up the process whereby we look 
at foreign ownership of defense industries, to look at the national 
security implications of foreign investments and mergers, is under the 
exclusive jurisdiction of the Banking Committee.
  Sanctions bills that imposes economic sanctions against any country, 
whether it be the Iran-Libyan Sanctions Act, or whether it be any 
sanction imposed in the future, would be imposed in legislation that 
falls under the jurisdiction of the Banking Committee.
  Quite frankly, I believe some of this dispute is about jurisdiction. 
I did not write the rules of the Senate, but I believe that when this 
jurisdiction was put under the Banking Committee, it was the right 
decision because the Banking Committee is basically the Banking and 
Economic Committee. These issues have to do with economic matters that 
have defense implications. I think the correct decision was made in 
placing these items within the jurisdiction of the Banking Committee.
  We have spent 2 years exercising our responsibility in trying to come 
up with a workable and, I believe, if I may say so immodestly, a 
superior Export Administration Act. We have held extensive hearings on 
the Export Administration Act.
  I want to show my colleagues some of the studies that have been done 
that we have looked at. We have had the authors of these studies appear 
before our committee.
  The first, of course, is the now famous Cox Commission report. This 
was focused on China, and it was focused on the loss of American 
defense secrets. The Cox Commission report made a series of 
recommendations. Those recommendations are now embodied in the bill 
that is before the Senate.
  Rather than trying to go through all of the elements of this lengthy 
report at this time, which obviously would empty the Chamber for 
several days as I would be standing alone talking about them, given how 
voluminous they are, I will share with the Senate one point that Chris 
Cox made in presenting these reports to us and giving us the 
recommendations which we have incorporated in this bill.
  And this is critically important because I have colleagues who say 
that now is not the time to do this bill because of our recent problem 
with China. I say to my colleagues, we should have done this in 1995, 
but given the problems we have had with China,

[[Page S3938]]

given their irresponsible behavior, we need this bill in place now more 
than ever. If it was not the time to do this 3 weeks ago, it is the 
time to do it today. I say the time to do it was 5 years ago, and we 
certainly need to do it today.
  Chris Cox, in looking at the loss of technology to China, cautioned 
the committee on something that I think every Member of the Senate, as 
we begin this debate, needs to be cautious about. What he cautioned us 
about was doing feel-good things, doing things where we pound our chest 
and act as if we are doing something, when in reality we are not 
achieving anything.
  One of the things I am very proud to say about this bill is that 
there is no feel-good provision in this bill. Everything we did we did 
because we believed it would work, not because it simply made us feel 
good to place it in the bill.

  The quote I want to read from Chris Cox is the following:

       We ought not to have export controls to pretend to make 
     ourselves a safe country. We ought to have export controls 
     that work, and you have to assume that if the Ministry of 
     State Security in the People's Republic of China can gain 
     access to the computers at Los Alamos, they can probably gain 
     access to the Radio Shack in Europe.

  One of the fundamental principles of this bill is that we want to 
focus our attention on technologies that have defense implications, 
that are significant, and where we have some hope of being successful 
in controlling those technologies. When a million copies of a computer 
have been manufactured, when they are sold at Radio Shack in Bonn, when 
there are a million distributed worldwide, there is no possibility that 
we can keep that computer from falling into anyone's hands who might be 
potentially hostile to the United States of America.
  We might want to do it. We might wish we could keep an agent from a 
foreign country from going into Radio Shack in Bonn and buying this 
computer, but when there are a million copies of it worldwide, only 
divine intervention could keep someone who wanted that computer from 
having it.
  So rather than waste our time and energy on products that are sold by 
the millions, we try to focus our attention in this bill on trying to 
deal with those technologies where we have some realistic hope of being 
successful. Our current Secretary of Defense, Donald Rumsfeld, said it 
best when he said we need to build higher walls around a smaller number 
of things, and that is what we have tried to do.
  The next point that I want to raise from one of the witnesses before 
our committee I think reinforces what Congressman Cox said. It is from 
Donald Hicks, who is the former Under Secretary of Defense for Research 
and Engineering and chairman of the Defense Science Board Task Force on 
Globalization and Security. Here is what Donald Hicks said. He refers 
to what he calls the ``utter futility of the U.S. attempt to control 
unilaterally technologies, products, and services that even its closest 
allies are releasing on to the world market.''
  This study in my hand is the study that was done by Under Secretary 
Hicks making this point.
  The next quote I want to give is from John Hamre, who is the former 
Deputy Secretary of Defense. We all knew him when he was the staff 
director of the Armed Services Committee. Here is what he says on this 
subject:

       America needs effective export controls to protect its 
     national security. Our current system of export controls 
     fails that test and fails badly. In ultimately approving 99.4 
     percent of the requests, we are not really protecting our 
     security. In fact, we are diverting resources from protecting 
     the most important technology and products.

  That is a critical point of this bill. When we have a system where we 
are approving 99.4 percent of the requests for licenses, we have a 
system where many things are in the system that should not be in the 
system. We are granting licenses on computers that are being 
manufactured by the millions and sold all over the world.
  We try to focus our attention where it can do us the most good. Frank 
Carlucci, the former Secretary of Defense and former National Security 
Adviser, gets right to the heart of it when he says:

       But we should do only that which has an effect, not that 
     which simply makes us feel good. Many technologies are 
     uncontrollable, given the access to the Internet. Others can 
     and will be supplied by our competitors. Our job, your job, 
     is to strike the right balance. Don't help our enemies. But 
     at the same time, allow and encourage innovation and research 
     to flourish.

  We have spent 2 years looking at all of these studies, having the 
authors of all of these studies appear before our committee, and in 
each and every case their recommendation to us is quit doing things 
that make you feel good. Quit forcing us into a mechanism where we are 
having to deal with thousands of items, when 10 are really important. 
By dealing with thousands, we are not paying enough attention to the 10 
that ultimately affect American security.
  We have put together a bill that I believe dramatically improves the 
export control process, the export control review mechanism that is 
used, and greatly enhances national security. I am proud to say this 
bill is supported by the President. The President said in very simple 
terms, ``I believe we've got a good bill and I urge the Senate to pass 
it quickly.'' He said this in the East Room of the White House on March 
28.
  The bill before the Senate has been endorsed by the Secretary of 
Defense, by the Secretary of State, by the President's National 
Security Adviser. We gave them an opportunity when the new 
administration came in, to take the bill we had worked on, and go 
through it in detail. They suggested some 21 changes. We adopted those 
changes. In several cases I thought the previous bill was stronger, but 
we adopted those changes. I think in the process, on net, we have 
improved the bill.
  What does the bill do? The bill strengthens national security. No. 1, 
and most importantly of all these other things, while it doesn't sound 
as robust as these other things I will mention, it is actually more 
important. We focus the attention of the export administration process 
on defense sensitive items where we have some hope of being successful.
  We set up a procedure whereby the President is given tremendous 
powers to negotiate international agreements with our major trading 
partners to cooperate to try to prevent sensitive technologies from 
getting into potentially hostile hands.
  We establish new criminal and civil penalties for knowing and willful 
violations. One of our problems under the current situation we face is, 
for example, that with the question of an illegal transfer of missile 
technology to China, given the laws that are in place, even if the 
parties are convicted, the penalties would be trivial. No one will call 
the penalties in this bill trivial. The penalties in this bill begin 
with $5 million for a violation. In the case of multiple violations, 
the penalties could run into the hundreds of millions of dollars. We 
have tough prison sentences for knowing and willful violations. When we 
have those penalties, we affect people's behavior, which is what we 
need to do.
  Again, it is very difficult to enforce these laws. It is difficult to 
prove intent. Knowing it is difficult to catch people, we wanted to 
have very severe penalties when they are apprehended, prosecuted, and 
convicted.
  We strengthened the hand of the national security agencies by, for 
the first time, giving them a formal procedure by which to be involved 
in this process. We were very concerned that in the previous 
administration the Defense Department was in a position of not being in 
concurrence with some decisions that were being made but not having an 
effective way to show it did not agree. So we provided a process 
whereby if any member of the review panel--and we would assume in 
general it would be the Defense Department--objects, that individual, 
with the concurrence of the designated political appointee in his or 
her department, has the ability to object and force that decision to 
the next highest review level. That is a substantial strengthening, in 
my opinion, of the process.

  We have greater predictability in the process, as well, which is 
important both for national security and economic reason.
  I will end with this: We do have a cloture motion. At some point that 
petition may be filed, because it is critical to national security we 
get on with this process.

[[Page S3939]]

  I conclude by talking about the balance we are trying to establish. 
We want a balance that allows us to provide for the national security 
of the United States, but on the other hand, we want to be able to be 
the dominant high-tech manufacturer in the world.
  Please remember, despite any feel-good speech we could make, most 
high-tech companies have operations worldwide, so when they are 
developing a new product, they can develop it in Germany or they can 
develop it in Dallas. If we have an export control process that is 
cumbersome or inefficient or costly or overly burdensome, they will 
develop these products in Germany and not in Dallas. That is harmful to 
our security, and it is harmful to people who are working in America.
  This bill is good for security because it restores the expired 
control authority. It adopted the recommendations from the studies I 
referred to earlier, such as the Cox Commission and the commission 
studying proliferation of weapons of mass destruction. It protects 
sensitive U.S. goods and technologies. It strengthens the role of the 
national security agencies, and it toughens criminal and civil 
penalties.
  That is how it strengthens national security, why it is good for 
national security.
  Why is it good for trade and for job creation and for the economic 
development and economic dominance of the United States of America?
  No. 1, it streamlines controls and procedures.
  No. 2, it removes ineffective controls where we know an item is mass 
marketed. A million copies are sold on the world market, and an 
American company trying to get market share ends up, under current 
practices, being delayed for long periods of time to get approval to 
sell something that is readily available on the world market. That 
makes no sense and it burdens the process to such a degree that we are 
not paying attention to the things that are really important when we 
are doing those things. This bill changes that, it fixes that problem.
  This bill brings certainty and transparency to the licensing process. 
When somebody applies, they know how the process works. They know what 
the timetables are. They know they are going to get an answer--yes or 
no. As anybody who has ever been contacted by a high-tech manufacturer 
knows, what they want to know is, yes or no. If the answer is no, they 
can deal with it. If the answer is yes, they can rejoice. What they 
cannot deal with is no answer, which is what the current process is 
producing, even though it is eventually approving 99.4 percent of the 
applications.
  This bill seeks to restore the international cooperation that we had 
under the cold war export control regime, where we had multilateral 
agreements and where we could prevent things from being sold by one 
country or another to our potential adversaries. This bill, first, sets 
up the best system we can set up given we are acting unilaterally, but 
it also gives the President strong new directive to go to England, to 
go to Germany, to go to Japan, and try to work out multilateral 
agreements, and then this bill automatically makes those binding.
  Finally, it creates a framework compatible with the high-tech economy 
in which we live and work. We have currently set into static law the 
number of MTOPS, millions of theoretical operations per second, that a 
computer could generate as a condition for export, when we know that 
this number is doubling every 6 months. So what did this provision of 
the law do? What it did was put American producers at a disadvantage 
because they would have to go through our export control process, while 
their competitors in Germany and Japan could rush right out into the 
marketplace. Our producers would fool around, trying to get a 
Presidential decision to update the standard, generally with legions of 
high-tech people coming to kiss the President's ring and in some cases 
attend his fundraisers.

  That is an unworkable system. It breeds corruption. It hurts America. 
It does not enhance security. So we in this bill we repeal the MTOP 
limit and set out a process where the focal point is not on something 
that is doubling every 6 months--we cannot change that, we cannot 
legislate it away.
  I do not question the sincerity of the critics of this bill. I do not 
think their hearts are any less pure than mine. But I would like to say 
that I don't take a backseat to anybody in America in supporting 
national defense. I was in the House, and I helped write the budget in 
1981 that rebuilt defense and helped fund Peace Through Strength that 
tore down the Berlin Wall. I am concerned about American security. My 
dad was a sergeant in the Army. I am from a part of the country that 
lost a war. I understand something about national security and why it 
is important. So while I do not doubt that I have colleagues who have 
national security concerns, I have those concerns as well. They are 
reflected in this bill and its provisions.
  I believe we put together a good bill. I know that not everybody 
agrees with that. We got a vote of 19-1 in the Banking Committee. I 
have been the ``1'' many other times, on other committees under other 
circumstances, and that didn't make me any the less right that the 
other 19 people voted the other way. I understand that. But we have 
come to the point where we have to make a decision.
  I urge my colleagues, let's go to the bill, let's make our cases, and 
I will pledge to them if they convince me that they are right--I helped 
my colleagues in the committee write the bill the way we wrote it 
because I thought it was best, but if there is a better way, I am 
willing to support changing it. I cannot speak for other people. But if 
my colleagues can convince me there is a better way of doing it, I will 
do it that way.
  What I do not think I can be convinced of is that the best thing to 
do is to do nothing, that the best thing to do is to continue to limp 
along without having an effective process in place. I am concerned 
about the potential threats we face as a nation. I think we need this 
bill to help meet those threats. I urge my colleagues to support the 
bill, but if they are not going to support the bill, tell us how they 
would make it better, let's look at it, let's have votes on it. Again, 
anybody who has a way to make it better, I am willing to support it. I 
do not think we have reached the perfect bill yet, but I do think we 
have a dramatic improvement on the status quo.
  I thank my colleagues. I thank Senator Enzi and Senator Johnson for 
the great work they have done. I have never seen a Member get as 
involved in issues as Senator Enzi has been involved in this process. I 
have never seen a Member of the Senate who went to the actual meetings 
of these agencies and sat for hours, trying to figure out what they do 
and why they do it and how it works. The quality of this bill is in 
large part due to the work that he did and the work he did with Senator 
Johnson on the International Finance and Trade Subcommittee.
  I thank Senator Sarbanes. This is a bipartisan effort. Senator 
Sarbanes and I are far apart on some kind of mythical, philosophical 
line. But I think the reality is that we have been very effective in 
legislating and we have been effective because we have tried to work on 
a bipartisan basis. If we can work in a bipartisan basis, it can be 
done.
  I thank my colleagues for their leadership and their cooperation. I 
am hopeful we will pass this bill. I hope after the debate our 
colleagues who are concerned about the bill will be convinced--not 
necessarily to be for it--but will be convinced that maybe it is an 
improvement over the status quo, and maybe it is not quite as bad as 
they would think.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Maryland.
  Mr. SARBANES. Mr. President, what is the parliamentary situation?
  The PRESIDING OFFICER. The Senate is debating the motion to proceed 
to S. 149.
  Mr. SARBANES. I thank the Chair.
  Mr. President, I urge the Senate to adopt the motion to proceed and 
give itself the opportunity to move to the substantive consideration of 
S. 149, the Export Administration Act of 2001. The adoption of this 
motion to proceed would enable Senators, then, to consider the bill on 
its merits, to offer amendments, if they have them, to alter or change 
the bill in whatever direction they think is desirable. I think this is 
important legislation. I am frank to say I think this bill before us

[[Page S3940]]

is well crafted and deserves the support of the Senate. But in any 
event, whatever your attitude on that question is, I certainly think 
this issue, and this legislation dealing with this issue, deserves to 
be considered by the Senate.
  I very much hope, after we have had this opportunity for some 
discussion, we will be able to move ahead and consider the bill on its 
merits. I understand it is the leadership's intention to file a cloture 
motion--the leadership, as I understand it, on both sides of the 
aisle--in order to enable us to go to this legislation. I hope that 
will not be necessary. I think there is a compelling argument for 
taking up this bill and addressing this issue.
  Let me say a few words about the bill itself. Earlier this year, I 
was pleased to join with my colleagues, Senator Enzi, Senator Johnson, 
and Senator Gramm, in introducing this legislation. It was reported out 
of the Banking Committee on a bipartisan vote of 19-1, so there was a 
very strong majority within the committee. That was on March 22 that we 
met and marked up the bill and reported it to the floor of the Senate.
  The Export Administration Act provides the President authority to 
control exports for reasons of national security and foreign policy. I 
think there is a strong national interest in Congress reauthorizing the 
Export Administration Act. If we do not do that by August, there will 
be no Export Administration Act. And, in fact, we are now working under 
a temporary extension of the Export Administration Act, passed in the 
last Congress, which will expire in August.
  Before we passed that temporary extension, we were dealing under the 
International Economic Emergency Powers Act. Let me be very clear about 
this because it is very important. We need to understand what the 
situation has been and what the situation will be if we do not act on 
this legislation. The Export Administration Act has not been 
reauthorized since 1990, except for temporary extensions in 1993, 1994, 
and last year. In other words, for most of the past decade we have been 
operating without an Export Administration Act. We are now in the 
framework of a temporary extension that expires on August 20 of this 
year.
  Without these temporary extensions--in other words, for over this 
past decade--the authority of the President to impose export controls 
has been exercised pursuant to the International Economic Emergency 
Powers Act--the so-called IEEPA.
  In my view, it is highly desirable for the Congress to put in place a 
permanent statutory framework for the imposition of export controls. 
That is what this bill will do. That underscores the importance of 
considering this legislation. Export controls should not be imposed 
pursuant to the emergency economic authority of the President.
  One example of the reason for depending on IEEPA is that penalties 
that may be imposed under export controls under IEEPA are significantly 
less than those imposed by this legislation. In other words, reliance 
on IEEPA and the President's extraordinary authority under that 
legislation still leaves us falling short in terms of the penalties for 
violations of export controls for what this legislation provides.
  It is ironic that this bill is being in effect contested on these 
national security grounds when in fact it does more to protect the 
national security concerns than the existing IEEPA scheme.
  The IEEPA scheme is also weak in the sense we are quite worried that 
it will be subject to a court challenge, which in effect would make the 
limited penalties that it contains inapplicable. I think that has to be 
kept very much in mind as we consider taking up this legislation.
  This legislation has been worked over very carefully. I think it 
represents a carefully balanced effort to provide the President 
authority to control exports for reasons of national security and 
foreign policy while at the same time responding to the need of U.S. 
exporters to compete in the global marketplace.
  We have two major objectives we are trying to harmonize. I think this 
legislation does it in a balanced way.
  In preparation for acting on this legislation, the Banking Committee 
held two hearings in this Congress. We held a number of hearings in 
previous Congresses and two hearings with representatives of industry 
groups and foreign and Defense Department officials. Extensive 
consultation took place with representatives of the current 
administration, including representatives of the Defense Department, 
the State Department, the intelligence agencies, the Commerce 
Department, and the National Security Council.
  Prior to the markup of the legislation in the Banking Committee, 
Condoleezza Rice, Assistant to the President for National Security 
Affairs, sent a letter to the committee. I will quote it because I 
think it is important. I will quote it actually in full. The Assistant 
to the President for National Security Affairs in a letter to the 
chairman of our committee stated:

       The Administration has carefully reviewed the current 
     version of S. 149, the Export Administration Act of 2001, 
     which provides authority for controlling exports of dual-use 
     goods and technologies. As a result of its review, the 
     Administration has proposed a number of changes to S. 149.

  Actually a number of colleagues were involved in urging the 
administration to seek such changes, including colleagues I see on the 
floor now and who remain, I take it, concerned about this legislation.
  To go back to the letter:

       The Secretary of State, Secretary of Defense, Secretary of 
     Commerce, and I agree that these changes will strengthen the 
     President's national security and foreign policy authorities 
     to control dual-use exports in a balanced manner, which will 
     permit U.S. companies to compete more effectively in the 
     global market place. With these changes, S. 149 represents a 
     positive step towards the reform of the U.S. export control 
     system supported by the President. If the Committee 
     incorporates these changes into S. 149, the Administration 
     will support the bill. We will continue to work with the 
     Congress to ensure that our national security needs are 
     incorporated into a rational export control regime.

  Mr. SARBANES. Mr. President, a major effort was made by the committee 
to work through the list of proposals by the administration. Those 
proposals were incorporated into the bill during the Banking 
Committee's markup. I thought the administration's recommendations were 
a balanced set of proposals. I believe they strengthen the overall 
bill.
  Subsequent to that and subsequent to the committee reporting the bill 
out, the President in remarks to high-tech leaders at the White House 
on March 28 urged quick passage of this bill by the Senate.
  In that appearance at the White House--and I will quote briefly from 
the President's--actually, he started off by saying to this group:

       Thanks for coming. I appreciate that warm welcome. And 
     welcome to the people's house. It's a nice place to live. And 
     I'm glad I'm living here.

  That is the President talking.
  He went on and said to the high-tech group:

       I've got some good news and you may have been watching the 
     Senate Banking Committee. But after a lot of work with 
     industry leaders and the administration and members of the 
     Senate, the Export Administration Act--a good bill--passed 
     the Banking Committee 19-1.

  He then goes on to say that ``this has been crafted as a good bill. 
And I urge the Senate to pass it quickly.''
  Mr. President, I ask unanimous consent that these remarks of the 
President in a meeting with high-tech leaders be printed in the Record 
at the conclusion of my remark.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See Exhibit 1.)
  Mr. SARBANES. Mr. President, I commend very strongly Senator Enzi, 
who was chairman of the relevant subcommittee in the last Congress and 
chairman of the International Trade and Finance Committee, and Senator 
Johnson, who is the ranking member of that subcommittee, for their 
extraordinary work in developing this legislation. They worked 
tirelessly both in the last Congress and again in this Congress to help 
bring us to this point.
  I commend Senator Gramm and the staff of all Senators and the 
committee staff for their strong efforts to develop a bipartisan 
consensus on this legislation.
  Senator Hagel and Senator Bayh, who have taken over these positions 
now in the new Congress on the subcommittee, also made constructive 
contributions in moving this legislation forward this year.

[[Page S3941]]

  Let me say this about the legislation. It generally tracks the 
authority provided the President under the Export Administration Act, 
which expired in 1990, as I indicated earlier. But a significant effort 
was made with the excellent assistance of the legislative counsel's 
office to delineate these authorities in a more clear and 
straightforward manner.
  We made a very strong effort to inject an element of clarity and 
directness into the statute which would make it easier for the 
executive branch agencies to administer the statute and for the 
exporters to comply with it.
  The bill makes a number of significant improvements to the EAA. It 
provides, for the first time, a statutory basis for the resolution of 
interagency disputes over export license applications. The intent is to 
provide an orderly process for the timely resolution of disputes while 
allowing all interested agencies a full opportunity to express their 
views.
  This is very important. There is an orderly process now by which 
disputes can be moved up the ladder in order to be resolved. So any 
concern that any department or agency of the Government has as they 
work through this interagency process can be heard and dealt with and 
resolved, and, if necessary, at the final level, be resolved at the 
Presidential level. This orderly process was an issue of great concern 
to the administration, to the national security community, and to 
industry.
  I think we have reached a reasonable resolution of the issue in this 
bill. This was an issue on which Senator Enzi and Senator Johnson spent 
countless hours in order to try to work out arrangements that would be 
acceptable to all. As I have indicated, now they are acceptable to the 
agencies and the departments of the executive branch across the board. 
Not one department or agency is coming in now and telling us they think 
this is not a workable system under which they can operate.
  The bill significantly increases both criminal and civil penalties 
for violations of the Export Administration Act, reflecting the 
seriousness of such violations.
  The bill provides new authority to the President to determine that a 
good has mass market status in the United States and should therefore 
be decontrolled. This gets at this issue of, well, you can go out and 
buy a store on the market. Why are we controlling this good? But the 
bill retains authority for the President to set aside a mass market 
determination if he determines it would constitute a serious threat to 
national security and that continued export controls would be likely to 
advance the national security interests of the United States. So we 
retain an ultimate authority in the President with respect to this 
matter.
  At the particular urging of Senator Enzi, the bill contains a 
provision that would require the President to establish a system of 
tiers to which countries would be assigned based on their perceived 
threat to U.S. national security. The intent of this provision is to 
provide exporters a clear guide as to the licensing requirements of an 
export of a particular item to a particular country.
  The bill would also require that any foreign company that declined a 
U.S. request for a postshipment verification of an export would be 
denied licenses for future exports. The President would have authority 
to deny licenses to affiliates of the company and to the country in 
which the company is located as well.
  You get a sense of the reach of some of these provisions in providing 
important protections for national security concerns.
  We also included a provision in the committee to make a number of 
technical corrections and incorporate the suggestions made by the 
administration.
  The bill contains a provision from the expired EAA relating to the 
imposition of export controls on crime control and detection 
instruments that inadvertently had not been included in the bill as 
introduced.
  So, to close, let me just again underscore that this is a very 
carefully crafted piece of legislation. It is a very balanced piece of 
work. I believe that the Senate, when it finally is able to get to the 
substance of the bill, will provide broad support for it, just as it 
had broad support in the committee.

  Again, I underscore that though it is asserted now that the 
protections are inadequate for national security and foreign policy, 
that runs so counter to the situation in which we find ourselves. If 
you compare what is in this bill with the existing arrangements, or 
with the previous arrangements under the EAA, this bill has done a good 
job of providing clarity and providing process of procedure of the 
arrangements to be followed, which gives to the exporters more 
definition and more certainty in how they can proceed, what the rules 
of the road are, while at the same time retaining for the 
administration, ultimately for the President, very significant powers 
in controlling exports.
  As I indicated, it establishes tough new criminal and civil penalties 
for export control violations. It strengthens our ability to control 
critical technologies by building a higher fence around the truly 
sensitive items. That is very important. One of the things we are 
trying to accomplish is a focus on the truly sensitive items. It grants 
the President special control authorities for cases involving national 
security, international obligations, and international terrorism. It 
promotes discipline in licensing decisions by codifying the role of 
national security agencies in the licensing process and then 
streamlining licensing procedures, and it encourages U.S. participation 
in strong multilateral export control regimes.
  We have a short timeframe to deal with this legislation this year, 
given that the short-term extension of the EAA expires this summer in 
August. We need to put in place a permanent statutory framework for the 
imposition of export controls. I believe this legislation is that 
framework. I strongly urge my colleagues to support the effort to move 
to this legislation and subsequently to enact it.
  Mr. President, I yield the floor.

                               Exhibit 1

 Remarks by the President in Meeting With High-Tech Leaders, March 28, 
                                  2001

       The President. Thanks for coming. I appreciate that warm 
     welcome. And welcome to the people's house. It's a nice place 
     to live. (Laughter.) And I'm glad I'm living here.
       . . . As well, I've got some good news and you may have 
     been watching the Senate Banking Committee. But after a lot 
     of work with industry leaders and the administration and 
     members of the Senate, the Export Administration Act--a good 
     bill--passed the Banking Committee 19-1.
       The technology that you all have helped develop obviously 
     gives us an incredible military advantage, and that's going 
     to be important. And it's an advantage, by the way, that we 
     tend--want to develop, to make sure we can keep the peace, 
     not just tomorrow, but 30 years from now. We've got to 
     safeguard our advantages, but we've got to do so in ways that 
     are relevant to today's technology, not that of 20 years ago.
       The existing export controls forbid the sales abroad of 
     computers with more than a certain amount of computing power. 
     With computing power doubling every 18 months, these controls 
     had the shelf life of sliced bread. They don't work.
       So in working with the Senate, we're working to tighten the 
     control of sensitive technology products with unique military 
     applications, and to give our industry an equal chance in 
     world markets. And I believe we've got a good bill. It's a 
     bill that I heard from you all during the course of the 
     campaign. The principles we discussed are now a part of this 
     bill. I want to thank Senator Phil Gramm for his hard work in 
     working with us and industry and some members of the Senate 
     to make sure the bill that has been crafted is a good bill. 
     And I urge the Senate to pass it quickly.

  The PRESIDING OFFICER (Mr. Bunning). The Senator from Alabama.
  Mr. SHELBY. Mr. President, I objected to the motion earlier to 
proceed to the Export Administration Act. I want to share some of my 
concerns in why I did that.
  I, too, serve on the Banking Committee. I have been on it 15 years. I 
worked with Senator Gramm, Senator Sarbanes, Senator Enzi, and Senator 
Johnson. It is a great committee. It is the committee of jurisdiction 
for this legislation. I also happen to be chairman of the Select 
Committee on Intelligence. And this is why I am concerned about this 
piece of legislation today.
  Yesterday, we in the Intelligence Committee spent 2 hours being 
briefed on the damage of our national security from China's seizure of 
sensitive technologies aboard our EP-3 reconnaissance plane, which 
remains, as of this hour, in Chinese custody.
  Chinese technicians are picking that plane apart, and I do not 
believe they

[[Page S3942]]

are looking for loose change under the seat cushions.
  Yet today, right now, we are talking about moving to debate a bill 
that will make it easier for the Chinese, and others, to get technology 
like that aboard the EP-3 and other advanced technologies without any 
licensing or export restrictions.
  I ask my colleagues: What is wrong with this picture?
  I am sure the Chinese leadership can't believe its luck. The U.S. 
Senate, which until a few days ago was criticizing China's aggressive 
tactics, militaristic policies, and disdain for the rule of law, is now 
rushing to open the floodgates for the advanced technologies China 
needs to upgrade its military.
  And a few days after the administration announced an unprecedented 
package of arms to help Taiwan defend itself, the Senate wants to sell 
China the very technologies that will help it to overcome Taiwan's 
defenses, and threaten the U.S.
  The events of the last several weeks underscore a fact that has been 
apparent to many of us for some time: China is not our strategic 
partner. It is our competitor and could be our adversary.
  Yet we are moving ahead on this bill today as if these events never 
occurred. I fear the Senate is signaling to the Chinese that whatever 
they do and however much we may criticize their actions, we will always 
put our commercial interests ahead of our national security.
  We have done this in the past, and we are reaping the results today.
  Equally important is the risk of advanced dual-use technologies 
falling into the hands of countries such as Iran, Iraq, or Libya.
  While supporters emphasize the economic benefits of provisions in 
this bill that would ease controls on exports to large markets like 
Russia and China, they don't tell you that Russia and China are 
routinely identified by the Director of Central Intelligence as the 
``key suppliers'' of nuclear, biological, and chemical weapons 
technologies.
  Although this bill may help our U.S. technology industry increase its 
exports in the short run, I believe its impact on our national security 
in the long run may be disastrous.
  As a result, I cannot support proceeding to this bill at this time 
until the entire U.S. Government has had an opportunity to thoroughly 
review the legislation, take a fresh look at our overall China policy, 
conduct an in-depth study of our export control policies, and address 
the national security concerns shared by the chairmen of the national 
security committees in the Senate.
  In addition to these governmentwide efforts, we in the Senate must do 
our homework. This is an extremely complex piece of legislation that 
raises a host of extremely complex issues. They need to be debated and 
looked at thoroughly.
  The economic benefits of increased high technology exports are 
quickly apparent and relatively obvious; the national security 
implications are less immediate, less obvious, and often classified.
  Therefore, before voting on this legislation, every Senator should 
have the benefit of the extensive briefings that Senators Warner, 
Helms, Thompson, Kyl, McCain, and I have had.
  Should the Senate now vote to take up the EAA, I intend to join my 
colleagues from the other national security committees in setting forth 
in detail our concerns about the national security implications of this 
bill.
  We believe the case is compelling for those who are willing to 
listen.
  That is why I object to proceeding with the bill so soon.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from South Dakota.
  Mr. JOHNSON. Mr. President, I rise today in support of this historic 
legislation before the Senate. I regret that there is resistance to the 
motion to proceed. I believe it would be best to proceed to the 
consideration of this legislation by the full Senate, to debate the 
merits of the legislation, and, for those who object, to provide 
opportunities for them to offer amendments to be debated on their 
merits in the course of our consideration.
  Whether we move forward today or are delayed a couple more days, it 
is important that we move ahead as expeditiously as we can on passage 
of the Export Administration Act reauthorization.
  This legislation is the culmination of many long hours of bipartisan 
cooperation to modernize America's export laws to reflect our rapidly 
changing world. It was first put together last year, when I served as 
ranking member of the Subcommittee on International Trade and Finance 
of the Banking Committee. Senator Enzi, my Republican colleague from 
Wyoming, served as chairman of that subcommittee. We were able to pass 
similar legislation out of the committee on a 20-0 vote. This year 
Senator Enzi and I have moved on to other subcommittees but have 
remained actively involved in this issue.
  I particularly commend Senator Enzi for his continued strong 
leadership and the work he and his staff have put into this effort. The 
consequence of that work during this Congress has been the legislation 
before us that passed out of the Banking Committee on a bipartisan vote 
of 19-1 and which has the support of the President of the United 
States, the Secretary of Defense, the Secretary of State, the Secretary 
of Commerce, as well as the National Security Adviser to the President.
  While there are some who raise the specter of diminished security 
concerns, it is interesting that, in fact, not only is there 
overwhelming bipartisan congressional support for this balanced piece 
of legislation, but the people who are most knowing or most in the 
position to advocate for strong national security in America, our 
President and Secretaries of Defense and State, are all supportive of 
this legislation. To raise the specter of China strikes me as something 
that has been thought through very carefully by our President and our 
defense establishment in the course of endorsing and supporting this 
bill.
  The fact is, under this legislation, our national security would be 
strengthened, not diminished. Yes, sales of technology items could be 
made to China but only those items which our defense establishment and 
our President endorse as appropriate sales and which are otherwise 
available on the open market.
  I have had the great pleasure of working on a team with Senators 
Enzi, Gramm, Sarbanes, and their staffs, to craft this legislation. I 
thank them for their professionalism and their cooperation on this 
effort. It is rare that legislation of this importance comes before the 
Senate with this level of bipartisan support, and the cooperation and 
support of the White House and the defense and commerce establishments 
in the United States. It is a rare day that legislation of such 
consensus comes before us. I had hoped we would not lose this 
opportunity to advance the interests of our national security and our 
economy at the same time.
  I am gratified for the support of the Bush administration and their 
willingness to express their support for the legislation.
  I also note with appreciation the role Senators Gramm and Sarbanes 
have played. We have had constructive participation across the board, 
and that spirit contributed to the construction of the newly amended 
version of S. 149 that is before the Senate today.
  As my colleagues know, we live in a truly global economy. America has 
enjoyed unprecedented growth in recent years in large part because of 
the expansion of our marketplace overseas. American businesses look 
well beyond our borders for customers, and exports play a critical role 
in keeping our economy strong. We have also seen enormous changes in 
the goods, services, and the technologies American companies produce.
  Back in my home State of South Dakota, we have seen a 172-percent 
increase in high-tech employment over this past decade. Our workers 
have benefited from the good jobs and fair salaries that the high-tech 
sector brings. The goods, the services, and the technologies they 
produce are in tremendous demand throughout the world.
  However, we must not be naive. Certain products and technologies can 
be used for the wrong purpose. But we must not allow fear to prevent us 
from crafting laws that face those issues head on and establish a 
balance between economic growth and national security, and our other 
needs.

[[Page S3943]]

  The Export Administration Act is a thoughtful, balanced bill. EAA is 
an important step toward ensuring our continued ability to export 
American goods to the rest of the world. At the same time, EAA includes 
the necessary safeguards to ensure that our export policy protects our 
vital national security interests.
  Since EAA's expiration in 1990, Congress has declined numerous 
opportunities to reauthorize the EAA. I lament those missed 
opportunities, and strongly urge my colleagues not to squander the 
opportunity before us today.
  Reauthorization has become still more urgent as the courts consider 
the legality of our reliance on an expired EAA, and on the annual 
temporary extensions we provided in the underlying legal authority 
claimed under the International Economic Emergency Powers Act. I fear 
the day that one of these challenges will ultimately succeed and strip 
this Congress of any control over sensitive dual-use technologies. 
Contrary to what some of my distinguished colleagues may argue, 
reauthorization of the EAA in fact greatly enhances our national 
security.
  We had a simple goal when we embarked on this effort: reduce or 
eliminate controls on exports with no security implications, and 
tighten controls on exports that raise security concerns. These 
principles are not controversial; yet crafting legislation that puts 
these principles into practice has been difficult to accomplish.
  We worked very closely with concerned Senators, the national security 
establishment, the administration, and the impacted industries. I 
believe we addressed the major concerns in a balanced manner.
  We increased the penalties on export violations, so that violators of 
export control laws will pay a real price for breaking the law. We made 
realistic assessments with respect to what items should be decontrolled 
based on foreign availability and mass market standards.
  It does us no good to be trying to limit the export of items that can 
be found anywhere on the open market throughout the world.
  In one respect, however, I am disappointed. I am disappointed that we 
were forced to drop title IV, which lifted the practice of using food 
and medicine as a weapon against rogue nations. It is my understanding 
that a majority of the national farm groups believe our language could 
potentially delay regulatory actions with respect to the lifting of 
sanctions.
  But as important as that legislation is, I also acknowledge that 
there are other forms, other vehicles, legislatively for those issues 
to be taken up at a time when we need to focus primarily on the export 
of high-technology products and the defense implications of those 
exports in the course of this debate. I am confident there will be 
other opportunities to raise the larger issue of economic sanctions on 
agricultural and medical products throughout the world.
  My colleagues, the Export Administration Act is a good bill. It is a 
balanced bill. It is good for America and for Americans.
  S. 149 strengthens our national security--it doesn't weaken it. To 
those who argue against this legislation in light of recent events with 
China, I respectfully refer to them to the Cox Report that specifically 
recommended reauthorization of the EAA as a way to strengthen our 
national security with respect to exports to China. The EAA is a 
strategic, intelligent response to the real threats that face America.
  America benefits when our businesses prosper. Exporting technology 
has long been an American success story. The high-tech field will lead 
our economy into the next century. We understand, new technologies 
could prove dangerous in the wrong hands, and our national security 
depends in part on limiting access to limited specific goods, services 
and technologies. That is the balance we seek to strike, and I believe 
S. 149 does that.
  That is the balance that has caused this broad-based, bipartisan 
support, and the support of the White House, for this effort.
  I look forward to a vigorous debate of these important issues. 
Passage of this EAA bill will make a significant contribution to our 
national security and will help bring transparency to our export 
control system. I encourage my colleagues to join this bipartisan, 
balanced approach to these critical issues.
  I regret that we may not proceed today on the motion. If that is the 
case, I have great confidence that with the cloture motion we will be 
back on this legislation within a very short period of time.
  Again, in closing, I commend the leadership of Senator Enzi, my 
friend from my neighboring State of Wyoming, and his staff for the work 
they have devoted to this effort, as well as to Chairman Gramm and the 
ranking member, Senator Sarbanes, who have worked with us and with 
their staffs throughout this entire effort.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Tennessee is recognized.
  Mr. THOMPSON. Mr. President, I support the chairman of the 
Intelligence Committee, who objected to proceeding at this time on this 
bill. First of all, I wish to state my reasons for supporting an 
objection to proceeding at this time.
  I do not think this bill is going to be delayed indefinitely. It is 
not my wish to do that. I think the Export Administration Act ought to 
be reauthorized. I have thought that for a long time.
  The question is, What is going to go in the act when we reauthorize 
it? We have had a vigorous bipartisan debate inside the Senate, and I 
would venture to say also inside the House, among our Members, as to 
what we ought to do about controlling or decontrolling certain 
sensitive items in this country. We all have the same goals, but we 
have markedly different views regarding certain aspects of how to 
achieve those goals. We now are being--after having about 24 hours' 
notice--asked to take up a piece of legislation which has national 
security implications, which is controversial, which is going to take 
some time in order to consider amendments which we think can benefit 
and strengthen the bill. It is going to take some time in that regard. 
It is simply not something that we should be fitting in in the middle 
of a week for a day, or day and a half, and either dispose of it or 
continue it on to another time. We ought to try to get together and set 
aside some time, a reasonable time--I would be in favor of a time 
agreement to do that--so amendments can be heard and we can debate the 
merits of the bill.
  This is not the time to do that. It is going to take more time than 
what we have right now. At the outset, perhaps in some respects in a 
very general sense, balancing our concern over commerce with national 
security is what we are about. But that is not what the Export 
Administration is all about. That is not what export controls are all 
about.
  It is pretty clear that what that is all about is national security. 
It doesn't say anything in this bill or anything in the legislation on 
the books now that we should engage in this balancing act of commerce 
versus national security. What it says is that you protect national 
security. In the bill before us, the purposes are set out. The purposes 
of national security export controls are the following: To restrict the 
export of items that would contribute to the military potential of 
countries so as to prove detrimental to the national security of the 
United States and to stem the proliferation of weapons of mass 
destruction.

  That is what this bill before us states is the purpose of these 
controls. That is with what we are dealing.
  As we proceed, I hope we do not think we should strive so hard to 
draw a 50-50 balance with regard to the considerations involved because 
they are heavily weighted, to say the least, toward national security. 
That, of course, is the basis of our concern.
  In terms of the timing, it is my understanding that a part of the 
administration's position is they want to draft an Executive order that 
will strengthen the visibility and the voice of other Federal agencies 
in the interagency dispute resolution process that will give the 
Department of Defense greater visibility and a major role in the 
commodity classification process and ensure that deemed exports are 
covered, which are not covered by this law. Those are three very 
important provisions that the administration says it wants to address 
by means of an Executive order.
  I think we are entitled to see that Executive order. I believe we 
would

[[Page S3944]]

want to consider whether or not to make them a part of the legislation. 
They are very important items, as important as several of the items 
that are in the legislation.
  It is only proper, considering the severity of the issues with which 
we are dealing, that we have all of the cards on the table and that we 
deal with them in an appropriate manner.
  Also--and the chairman of the Intelligence Committee alluded to 
this--this is the wrong time to bring this up for another reason. It 
has broad ramifications and broad applications with regard to many 
different items and many different countries, but this is, in many 
respects, a China trade bill.
  Much of the impetus among the commercial world for getting this 
passed has to do with decontrolling previously controlled items, many 
of which are high-technology items, many of which have potential 
military application, and many of which would be going to China. They 
have a vast potential market. Only about 10 percent of the items we 
export to China are controlled items. So it is not a large part of what 
we are doing with them right now.
  Apparently the idea is, with China's concentration on high tech and 
their need for our supercomputers and other sensitive matters, that 
trade will pick up and the desire among industry is to more easily 
export without having to apply for a license, that trail of what 
granting a license entails. That is what this is all about.
  At a time when the Chinese leadership is issuing belligerent 
statements with regard to our policy toward Taiwan, right after they 
detained 24 American crew members and, as the chairman of the 
Intelligence Committee pointed out, we are feverishly trying to destroy 
computers aboard those airplanes and other items of hardware and 
software, at a time when the Chinese are engaged in a rapid military 
buildup and have 300 missiles on their coastline that can be used 
against Taiwan, at a time when they are detaining Chinese American 
scholars against their will, I do not think this is the time to send 
the message to China that we are going to engage not only in business 
as usual but become even more liberal in our policies of sensitive 
exports. We had best wait until that dust settles a little bit before 
we take it up.

  We have had a policy in this country for some time of controlling 
certain matters that fall into the sensitive category with regard to 
supercomputers, milling machinery, centrifuges, and a host of items 
which have dual use, both civilian and potential military use.
  It has always been a concern as to how far we can go in allowing 
civilian trade without the items being used by the military. We find 
from time to time, on the rare occasions we check on them, that China 
has diverted from civilian to military use. The Cox Commission points 
out to us that they are using our high technology to benefit their 
military. It is not that we have to speculate about that.
  This Congress has responded in various ways with regard to high-
performance computers which can be used for simulation, for nuclear 
testing, reliability, and without actually doing the testing of the 
bombs. They can use computers nowadays to test the efficacy of their 
bombs by use of high-speed computers. So Congress in 1998, as a part of 
the National Defense Authorization Act, provided, with regard to these 
high-speed computers, that there should be a national security 
assessment to see to what extent we might be harming ourselves.
  That act also provided for postshipment verifications for tier III 
countries, such as China; in other words, to see how these computers 
are actually being used in China.
  It also required congressional review with regard to notification 
thresholds. We require our exporters to notify the authorities when 
they are doing certain things at certain levels. If the President is 
going to change that notification threshold, he needs to notify 
Congress.
  The bill before us would basically do away with all of those 
requirements and would abrogate those requirements that Congress set 
down in 1998. If we take these broad categories of items totally off 
the books and say there is no licensing at all, there will be no 
monitoring even of what is being shipped to whom. There will be no 
ability for a cumulative effect analysis. This particular item or that 
particular item does not have a serious effect but the cumulative 
effect of all of them might. That is a requirement of the law that has 
not been observed in the last decade, as far as I know.
  This is going to be the basis of the discussion. That is not to say 
we should not reauthorize the act. That is not to say we cannot improve 
and close some of these openings that I believe are unfortunate and 
uncalled for and deleterious to those issues on which we all agree.
  We hear all this talk about building bigger fences around a smaller 
and smaller number of items, but I do not see where the fences are. I 
would like to have explained to me how we are building higher fences by 
this act, because this is a decontrolling, in large part. There are 
certainly other provisions, but I see nothing where there is a 
tightening of the process in building higher fences. We are winding up 
with more openings in that fence instead of building a higher fence.
  Substantively, the bill before us is a good improvement over the 
first draft last year. We had certain concerns about it. We had a lot 
of discussions about it. It was vigorously defended.
  The administration has come in and just within a few days--they have 
two people confirmed in the Department of Defense right now. That is 
with what we are dealing. When we talk about the administration and all 
these various agencies that have a piece and a part of this as we go 
through the licensing process, let's keep that in mind.
  It will be the better part of a year before this administration is 
intact because of the scandalous difficulty we have in getting people 
through this process in our Government. It has been going on for a long 
time.

  A lot of these things require input of people who are appointed by 
the President and confirmed by the Senate. If this bill was part of the 
law today, as far as defense is concerned, as far as appealing 
something, for example, in the export control process, it would either 
have to be Mr. Rumsfeld or Mr. Wolfowitz because they are the only ones 
who fit that criteria. That is totally unworkable.
  Another reason not to rush is that we do not have an administration 
that is fully staffed in the relevant departments.
  One of the key provisions involves foreign availability, the idea if 
under the Secretary's determination, after consulting with others, the 
Secretary of Commerce determines there is foreign availability of an 
item, they will lift controls, the idea being it will not do any good 
to try to control that.
  There is probably some truth to that. It very well may be we are 
trying to control more than what can be controlled. The real question 
is not whether or not we on this side of the issue or our colleagues on 
the other side of the issue can sit here and determine what ought or 
ought not be controlled. The question is, can we come up with a 
procedure where on the questionable items, we know they will get full, 
fair, and complete consideration by people who ought to be considering 
the products. That is the question. We are not talking about things all 
over the world, through Radio Shacks around the world. Keep in mind, we 
are not talking about restricting any of these items from being 
exported. We are talking about whether we ought to have a license 
requirement.
  Most of these items are going to be exported anyway. The difference 
is whether or not it will take 30 or 45 days or whatever the normal 
amount of time is. Sometimes goods are held up longer than that. 
Sometimes they are held for national security reasons and this cannot 
be explained to the person making the application. There is a bit of 
delay there. In most cases it is not a great delay.
  Some say our competitors are so hot on our trail, our European allies 
are so close to us in technology that the month delay will mess up a 
large number of sales. That is not very credible as far as I am 
concerned. We have the lead in so many areas that going through the 
licensing process, if it goes through as it should and is supposed to, 
is not going to make the difference in terms of this commercial 
activity.
  We need to think through the foreign availability argument. If the 
genie is out of the bottle and none of these things can be controlled, 
why do we still have restrictions on rogue nations? If we furnish 
Saddam with the

[[Page S3945]]

computers, wouldn't that be better than having somebody else furnish 
them, if he is going to have them anyway, or the centrifuges or the 
milling machines--they are sensitive--that go to make nuclear items? 
There are certain good arguments, good reasons to be made that he will 
have it anyway; why not supply it with our companies so we know exactly 
how it works.
  I find it a bit inconsistent to say none of this stuff is 
controllable. It is out there; you can't do anything with it. But we 
want to make real sure we keep these controls on rogue nations--Iran, 
Iraq, and the bad guys. Clearly there is a limit. Clearly there is a 
line. Maybe we have not drawn the line in the right place in times 
past. Maybe even the old end top criteria is out of date. It has been 
going so rapidly up it has become almost irrelevant. Many have been 
critical of the Clinton administration for raising it so rapidly and 
now it will be done away with altogether. We are having to take a new 
look at that. People say you cannot regulate computing power. You have 
to regulate or deal with the software. You have to deal with the 
application being made with the use of the computer. It is a different 
kind of world with which we are dealing.

  We have to be careful. While acknowledging that technology has 
greatly expanded and there are more things in the world that perhaps 
can't be controlled, there are still some areas where we do not want to 
open the floodgates. The question is, What are those areas and what 
kind of procedure will we have to ensure that those are not sent along 
with the rest? When we deal with thousands and thousands of items, it 
is not an easy answer.
  The President, it has been pointed out, under this bill, can have a 
set-aside if there is a threat to national security. On this business 
of balancing commercial interests over national security, get a load of 
this: The set-aside provides the President can take this action only if 
there is a threat to national security, not because it has national 
security implications. I assume this is a direct threat. I don't know. 
But the President cannot do this until there is a threat to national 
security. Then once he makes the determination that there is a threat 
to national security, he has to leap more hurdles than if he were in 
the average track meet. If he makes the designation, he has to report 
to Congress and justify himself. Then under this bill he is required to 
pursue negotiations to try to get the countries making this available 
to quit making it available. He has to notify Congress about that. Then 
the President has to review this matter every 6 months.
  Remember, this is a matter that is a threat to national security. He 
is required to review this every 6 months so it can be lifted if the 
circumstances change. He has to report that to Congress and justify not 
lifting it. Then the President, after having gone through all of that, 
if the set-aside is still standing, has to relinquish his set-aside if 
there is still not a high probability that there will be any changes 
made in terms of the foreign availability picture, and if there is no 
agreement under any circumstances after 18 months, the President has 
this authority. We make the President do a lot of things and place 
burdens on him to do that.
  As far as mass marketing is concerned, it has to be a serious threat 
to national security. Foreign availability, he can set it aside with a 
threat to national security. For some reason, if the item in question 
is mass marketed, just in the United States, presumably, the President 
has a set-aside if there is a serious threat to national security.
  We will want to debate and see whether or not we can improve that 
language, whether or not we want to set that high standard for a 
President to stop an export, that it has to reach that extremely high 
standard when we know already that the Chinese are using our high 
technology to benefit their military.
  The penalties are great in this bill. There is no question about 
that. But before an item has already been decontrolled, there is no 
danger of any penalty coming into play.
  My concern is this: We have a couple of basic trends going on in this 
country. One is that we are moving pell-mell to decontrol. The genie is 
out of the bottle. There is no question about that. The last 
administration certainly liberalized our control procedures. The 
Chinese and others certainly took advantage of that. We are still 
moving in that direction. Perhaps we should, to one extent or 
another. But there is no question that using the word ``decontrolling'' 
with regard to matters of high technology, with regard to matters of 
dual use, with regard to matters that have military significance, we 
are saying, ``What, me worry?'' and rapidly decontrolling. This would 
enhance that process and take it to another level.

  Mr. McCAIN. Will the Senator yield for a question?
  Mr. THOMPSON. I am glad to.
  Mr. McCAIN. Is there any doubt in the Senator's mind that over the 
past 8 years of the previous administration--is there any doubt in his 
mind that sensitive technology that affects American national security 
was transferred to China, Iraq, and other nations?
  Mr. THOMPSON. No, there is no doubt in my mind, Senator.
  Mr. McCAIN. So my further question is, If sensitive technology which 
affects American national security was transferred to China, to Iraq, 
and perhaps other countries, are we going in the right direction with 
this legislation or are we going in the opposite direction of loosening 
these controls, according to this legislation?
  Mr. THOMPSON. There is no question that we are loosening. There is no 
question that it will inure to the benefit of the Chinese, who are well 
known to be concentrating especially on high-technology matters, 
building up their military, building up their missile capability--both 
ICBMs and shorter range missiles.
  I think the best witness on this, Representative Cox, has been quoted 
a few times. The Cox Commission stated in July 1999:

       The People's Republic of China was diverting U.S. 
     manufactured high-performance computers for unlawful military 
     operations. Specifically, it was using American-made 
     computers to design, model, test, and maintain advanced 
     nuclear weapons. The commission clearly stated that the 
     illegal diversion of high-performance computers for the 
     benefit of the People's Republic of China military is 
     facilitated by the lack of effective post-sale verifications 
     of the locations and purposes for which the computers are 
     being used. High-performance computer diversion for PRC 
     military use is also facilitated by the steady relaxation of 
     U.S. export controls over the sale of high-performance 
     computers. The committee added that U.S. origin high-
     performance computers have been obtained by PRC organizations 
     involved in the research and development of missiles, 
     satellites, spacecraft, submarines and military aircraft, 
     just to name a few.

  Mr. McCAIN. If there is no doubt in the Senator's mind, and I think 
it has been clearly established in several cases--I think one was the 
case of Loral where the Chinese missile technology was increased 
through the transfer of technology--I am curious, if it is a severe 
problem, and obviously our relations with China have not improved 
recently, to say the least, our sanctions efforts against Iraq have 
been eroded by the disappearance or dramatic reduction in the coalition 
that imposed sanctions on Iraq, yet we are now trying to pass 
legislation in very short order that reduces these controls that 
inhibit our ability to examine these systems and their export to these 
countries.
  Finally, could I ask the Senator, how much involvement have the 
sponsors of this legislation allowed the Senator from Tennessee and my 
colleague from Arizona, Senator Kyl, and Senator Shelby? Have they 
tried to involve you in negotiations, conversations, or amendments?
  Mr. THOMPSON. We have had extensive conversations on this over the 
past, I guess, year and a half. My desire would be that--this has been 
off the table now for some time. Until yesterday, I did not know it was 
going to be brought back up. But now that it has been brought back up, 
it is back on the table, as we all knew it would be and should be, that 
we would sit down again on some proposed amendments to see if we could 
agree on some. We might be able to.
  As I say, I think they have improved the bill. It is all in the eye 
of the beholder. The thinking was it was a bill right where it ought to 
be. The administration came along and made 20-some-odd suggestions. I 
understand they were adopted. Presumably, it is a better bill. Maybe it 
can be even a better bill.

[[Page S3946]]

  Up until yesterday, the negotiations did not go the way I would have 
liked for them to go, frankly, but I cannot complain about not having 
been included in discussions. We have had a lot of discussions.
  What I would like to do is address the question of the Senator, 
though, a little bit more directly, the other question he asked. The 
question is: Why? I think the answer would be that for some of these 
items, there is foreign availability. If they are out there and France 
or someone, or Russia, let's say, is supplying China with these items, 
why shouldn't we?
  It raises a question--I did not plan on getting into the substance of 
the debate as much today as we will later on--as to whether or not 
there is a moral dimension to our foreign policy, whether or not there 
is a moral dimension to our export policy, whether or not, because some 
other entity is supplying somebody with something they should not have 
that hurts our national security potentially--and these items I am 
talking about, some of them, are serious threats to our national 
security, as acknowledged in the bill, if it is mass marketed--whether 
or not, even if they would get them, we ought to be supplying them.
  I would not feel any better to find American troops shot down with 
technology supplied by American companies if I knew there was mass 
marketing of those products. In the last year, the PRC reportedly was 
illegally using American supercomputers to improve their nuclear 
programs. Just 2 months ago, we learned that Chinese technicians were 
installing fiberoptic cable for Iraqi air defenses, a clear violation 
of U.N. sanctions.
  Worse yet, this assistance and technology which were provided to 
Chinese companies by American firms when President Clinton decontrolled 
this equipment over the objections of NSA in 1994 aided Saddam Hussein 
in his quest to shoot down American and allied pilots.
  I don't know if it proved whether or not this very strand of 
fiberoptic was used down there or not. But what apparently is pretty 
clear is that we took this Chinese company from a startup and, because 
of business that we did with it, put it in a position where they could 
go down to Iraq and help Saddam Hussein better shoot down our pilots. 
That merits serious consideration. It does not merit a day or a day and 
a half of discussion in some kind of desire to balance what we are 
talking about with our commercial interests.
  Mr. McCAIN. May I ask a final question--and I would like to state I 
agree with Senator Thompson. This is a very serious issue. It brings 
into question the influence of big money and big business in American 
politics. But would the legislation that we are discussing have 
facilitated the ability of the Chinese to acquire that technology and 
transfer it to Iraq or would it have been made more difficult?

  Mr. THOMPSON. I have not thought it through. I think after it was 
decontrolled in 1994, over the objections of the National Security 
Agency, the cat was out of the bag. I am not sure it would have made 
any difference.
  I think the point is that what we are dealing with today would 
further decontrol a host of additional items that heretofore you had to 
have a license to get.
  Some of those--I would venture to say the large majority of those 
things--would be harmless. But my concern is whether or not we have a 
procedure to catch the ones that are not harmless. That is what we are 
trying to deal with here. I hope we can move in that direction.
  Mr. JOHNSON. Will the Senator yield for a question?
  Mr. THOMPSON. I will be happy to.
  Mr. JOHNSON. I am interested, given his remarks today, whether the 
Senator views President Bush's support for this legislation, support 
expressed by our Secretary of Defense and Secretary of State, as 
reflecting an inadequate consideration of the implications relative to 
China and inadequate consideration of the moral dimensions of our trade 
policy in the United States and certainly an inadequate consideration 
of the national security fundamentals of our Nation. Does the Senator 
suggest the Bush administration is in error in their support of this 
legislation?
  Mr. THOMPSON. I would respond to the Senator that my concentration 
has to do with my own obligation. I respect the members of this 
administration who have taken a look at this in a few days, and with 
the few people they have had take a look at it.
  I respect their opinion. I weigh it very seriously. We are another 
branch of Government. We have obligations also. The Senator from Texas 
points out that the Banking Committee has a lot of jurisdiction. That 
is true. The chairman of the Intelligence Committee has a lot of 
jurisdiction. The chairman of the Foreign Relations Committee has a lot 
of jurisdiction. The chairman of the Armed Services Committee has a lot 
of jurisdiction. They are all concerned about this. I am concerned 
about it.
  I would like to always be in agreement with all of my friends. 
Sometimes it is difficult to do.
  I referred to the Cox Commission report. As I say, he has been quoted 
in regard to this piece of legislation. I am not sure where he stands 
on this piece of legislation. I am sure he supports the Export 
Administration Act reauthorization, as I do, but it has been said that 
the bill addresses the major findings and recommendations of the Cox 
Commission report. Upon closer examination, many of the Cox 
Commission's conclusions are not addressed. For example, the Cox 
Commission recommended that the Government conduct a comprehensive 
review of the national security implications of exporting high-
performance computers to the PRC. Yet S. 149 does away with that 
requirement.
  The Cox Commission also recommended reestablishing higher penalties 
for violations, which was done, but the evidentiary standard was 
lowered and promotes the sale of high-performance computers to the PRC 
for commercial but not military purposes provided the PRC establishes 
an open and transparent system to conduct on-site inspections of the 
end use of these machines.
  This bill takes these recommendations in an opposite direction. We 
are going to have an opportunity to go through in detail the extent to 
which this comports with the recommendations of the Cox Commission.
  The Rumsfeld Commission, of course, points out that one of the more 
serious concerns that we have had in Congress for some time is the 
proliferation of weapons of mass destruction. Even though it was 
significant to learn the extent to which some of these rogue nations 
have the ability, or rapidly developing the ability to hit the United 
States with missiles and weapons of mass destruction, and the fact that 
they were getting a lot of their capability from China and Russia, I 
think perhaps the most significant and troubling part was the fact that 
our intelligence was not aware of the extent of these things.
  Intelligence is not perfect--nobody's intelligence and no country's 
intelligence. I think they do a good job on most occasions, but they 
were behind the curve on this.
  I simply reiterate that in matters of this importance it is not 
something we ought to take to the floor and discuss in general terms, 
talk about balancing, and do in a day and a half. We need to be 
concerned about what else is not going to be caught by this process. We 
need to be concerned about the big picture, and we need to be concerned 
about the little details that have to do with the interagency dispute 
resolution.
  For example, as was pointed out, if someone disagrees with a 
determination as to whether or not an item ought to be controlled, it 
can be escalated by a majority vote. But it can only be escalated by 
someone who has been appointed by the President and has been confirmed 
by the Senate.
  Hopefully, we will have these Departments staffed. We have Defense, 
we have Commerce, and we have several other Departments that have a 
place in this. But they are grossly understaffed and will be for some 
time.

  Incidentally, the process has never been taken to the President of 
the United States in the history of process, if you want to know about 
the practical application of this thing. But it looks pretty good on 
paper, and maybe it can work.
  Do we really want to have that escalation done only by someone 
appointed by the President? Shouldn't he be able

[[Page S3947]]

to delegate that somewhere for someone to handle that kind of paperwork 
on the thousands of the items that are going to be coming to the floor? 
Is the intention to make it such a high level to escalate that there 
will be much less escalation so that people who may have concerns and 
objections will not bother under that kind of a system? I think we have 
seen that before.
  We had extensive hearings before the Governmental Affairs Committee 
with our inspector general, who looked at all of this. They came to the 
conclusion at that time that the Defense Department was under the 
impression that there was inadequate input by the Defense Department.
  Will this cure that? I do not know. It looks to me as if it is more 
difficult under this regime to raise a question. They are supposed to 
be included under the bill. Are they really going to have a practical 
voice? Those are the kinds of things we need to look at.
  Again, my objection to doing this now after having learned about the 
consideration of it yesterday was not because I necessarily opposed the 
reauthorization of the Export Administration Act. I do not. The world 
is not going to come to an end if we don't consider this now. It has 
been in this condition for several years now. It can wait a little 
while longer until hopefully the dust settles down in terms of our 
relationship with some of the people to whom we are going to be sending 
all of these additional items. Wait until the administration becomes a 
little better staffed so they can deal with these things.
  I respect the administration and the people handling it. I respect my 
colleagues who have pushed this because I think they have legitimate 
interests in making sure we are not unnecessarily hurt in terms of our 
economy.
  But we have to make sure in the present environment--I read as well 
as anybody else about the tremendous interests out there that have been 
brought to bear on getting this done, and we have to make sure we 
listen to their legitimate points but that we don't lean too far too 
fast in that direction until we have thoroughly explored the 
alternatives. Hopefully, we will have some amendments that will improve 
upon this, and maybe we can even agree to some amendments.
  But, again, we are on a motion to proceed right now. It has been 
objected to. I agree with that objection for those reasons.
  This is not the kind of issue we should consider in short order and 
in the limited amount of time that we have now, unless we can reach 
some time agreement that I will agree to right now after consulting 
with my colleagues who have other amendments in order to have a 
thorough debate on this issue. It is going to come.
  We cannot and will not hold this up. I know which way the wind is 
blowing. I can guess probably what the outcome is going to be. But 
hopefully it will be done after a thorough and deliberate consideration 
in this Chamber of all of the ramifications and with a fair 
consideration of some amendments.
  Thank you, Mr. President. I yield the floor.
  The PRESIDING OFFICER. The gentleman from Wyoming is recognized.
  Mr. ENZI. Mr. President, I appreciate the comments of all the Members 
who preceded me. It has been a very nervous situation to have to sit 
through all the statements when I would like to have been contributing 
all along. Over 2 years of my life I have invested in extensive 
meetings on this bill. I figured I could wait a little longer.
  I support the motion to proceed. I unequivocally support the motion 
to proceed. I am sincerely disappointed that we didn't get the motion 
to proceed. I would be happy to agree to a time agreement. What we are 
faced with right now is unlimited debate on whether we get to debate.
  So I would like to have some kind of a time agreement, if we got 
passed this motion to proceed--which is unlimited debate on whether to 
debate--then we have unlimited debate on unlimited amendments. So there 
is the capability of doing extensive debate on any amendment that 
anybody wants with no time limits on any of those amendments or debate 
on the entire bill. So I would be just delighted if we could proceed 
and look at those amendments.
  I appreciate the Senator from Tennessee's response about the 
extensive meetings that we had previously. I am sure he has noticed 
that in this bill there are extensive changes that resulted from those 
meetings. The most particular one is the Presidential set-aside, the 
Presidential set-aside that allows the President ultimate authority 
over every bit of national security, which is what the President should 
have. We did allow that in every instance. We think it is 
constitutional. We did not think it had to be in the bill, but it is in 
the bill now. We think that change alone makes the biggest difference 
in national security in the history of the United States, but 
particularly in the history of export administration.
  We have some things in this bill that are absolutely crucial. We have 
some things that need to be done for national security. I am not 
talking about a balance. I am talking about basic national security, 
where everybody who looks at national security says we need this Export 
Administration Act. We do not need a temporary extension of it. We 
definitely do not need to be operating under the President's Executive 
order, the IEEPA process, in order to have some control over our 
national security. That is what has led to the national security 
problems we have had since the act expired in 1994.
  These problems we are talking about in relation to China--and I am 
glad we are having that discussion--you will recall we said, bring this 
bill up any time; we do not care what kind of international crisis 
there has been with China; it is a good time to discuss national 
security, no matter what the timing with China. We did not expect it to 
be quite this timely, but we are willing to work with that because we 
want to make sure this country's secrets are not taken.
  Most of what has been referred to happened after the act expired in 
1994. When it expired in 1994, we were faced with an Executive Order 
and the President using some of his emergency powers. What is the big 
difference with that? Penalties are the big difference with that. 
Penalties dropped down to $10,000 a violation. On the multimillion-
dollar contracts we are talking about around the world, $10,000 is less 
than a contingency. It is less than the cost of an ad in many cases.
  Mr. President, $10,000 is not a penalty. It is not a deterrent.
  Penalties are an important part of this act. The penalties expired in 
1994. We have them under a short extension of that old bill that lacks 
a lot of the security we need, purely by an agreement that we would 
extend it until August 20 of this year. That means on August 20 of this 
year we are back to the same old bind where companies can violate 
national security for less than the cost of an ad. It should never 
happen in our country.
  When I became chairman of the International Trade and Finance 
Subcommittee, with Senator Johnson as the ranking member, and found out 
that the main piece of business we had to face was this Export 
Administration Act, we started digging into it. We have kind of lived 
together for a couple years, going to meetings, meeting with anybody we 
possibly could who had an interest in it, trying to find out how the 
process worked, looking at what had happened to it before. There were 
12 previous attempts to get this passed. How could something that is 
this important to the country not make it through on 12 successive 
attempts? Well, I am getting a better and better idea every day. Part 
of the reason is that we are so security minded we would lock up all 
exports in exchange for security. But that will not provide security. 
So we need a system that will work. Bringing everybody together on a 
mechanism that will work has been an interesting and difficult process.

  I do thank my colleagues on the Banking Committee for their support 
and their recognition that this legislation is needed to strengthen our 
export control system. I do appreciate the support of the 
administration. President Bush and his team immediately realized that 
the reauthorization of EAA was vital to the national security and the 
economic interests of this country.
  With the few changes that were made by the Banking Committee during 
markup, the bill received the written endorsement of President Bush's 
national security team. That includes the Secretary of State, the 
Secretary of

[[Page S3948]]

Defense, and the National Security Adviser. Those are people who are in 
place. I know they have had advice from people who have been working on 
this issue for years.
  On March 28, 2001, not very long ago, President Bush called the 
committee's action good news and urged the Senate to pass it quickly. 
You have heard the longer versions of that earlier in this Chamber.
  Mr. JOHNSON. May I put a question to the Senator from Wyoming?
  Mr. ENZI. Certainly.
  Mr. JOHNSON. Given the support of this legislation by the Bush 
administration, including the Department of Defense, the Secretary of 
State, the Secretary of Commerce, it has been noted in this Chamber 
that somehow the Bush administration is not yet staffed up. Do you 
believe that the Bush administration would endorse legislation of this 
consequence and of this importance if they felt that somehow their 
counsel had been inadequate or had been short? Or do you believe that 
the Bush administration felt very comfortable about its familiarity 
with the details of this legislation in issuing its recommendation for 
passage?
  Mr. ENZI. I am certain that the Bush administration has felt the 
importance of getting the EAA reauthorized. They have been looking at 
the documents that have been mentioned on the need for this for several 
years.
  I was very pleased during the campaign that President Bush addressed, 
as part of his campaign, this Export Administration Act. He had looked 
at a number of the principles. In fact, on his Web site he has listed 
what he thought ought to be included in the Export Administration Act. 
It gave me a lot of confidence that he had looked at the Export 
Administration Act that you and I worked on because it went point by 
point on it. I was pleased with the diligence with which the 
administration and their staff spoke to me and my staff. We were able 
to go through a lot of the points and a lot of the questions and a lot 
of the past discussions and a lot of the past meetings we had had with 
other Members to be sure to cover as completely as possible those items 
of national security.

  Mr. THOMPSON. Will the Senator yield for a brief question?
  Mr. ENZI. I will. I was hoping to finish my statement.
  Mr. THOMPSON. I am sorry.
  Since my comment was referred to, I want the Senator to be aware, if 
he is not, that my reference was meant to be with regard to staffing, 
not with regard to making the recommendations that they have made. It 
was with regard to carrying out the bill once it has been enacted. It 
has to do with personnel, people appointed by the President and 
confirmed. My concern is, these various departments, they have a 
skeleton crew of people that fit that description.
  So my reference to a lack of staffing has to do with their ability to 
effectuate the appeals process, and what have you, once this is 
enacted.
  Mr. ENZI. I am glad the Senator raised that point because we have 
export security that is being executed at the moment. We do not need 
this bill for export security to begin. It is happening right now. The 
people who are in place right now are in charge of our national 
security under export administration. They are having to deal with 
inadequate legislation to be able to do what needs to be done.
  So while the staff isn't there, they are still having to comply with 
licensing. I do not know how they are doing it except that there are 
still many civil service employees who have been around, and will be 
around, and are dealing with these problems. But the problem goes on 
right now. It does not matter whether this bill is in place or whether 
we are operating on the extension of the old one.
  There are some definite improvements in this Export Administration 
Act that absolutely need to be in place to provide for our national 
security. I hope that, first of all, we do not have to continue to 
operate under that old Export Act, regardless of who is in place, and, 
secondly, that that old Export Act does not expire on August 20 without 
a backup bill that does something extensive such as this bill does.
  I congratulate the chairman of the Banking Committee, Senator Gramm. 
He has probably been more involved at a member level on this bill than 
perhaps any bill Banking has done. He has involved all of us in that 
process; at least whenever Senator Johnson and I have asked him to be 
at a meeting, he has been at the meeting. He has been willing to 
participate, learn the bill in tremendous detail, and work on it that 
way.
  The same is true with Senator Sarbanes. There has never been a time 
Senator Johnson or I have invited him that he did not show up to help 
out in the process. He has been involved with this particular bill for 
about 20 years and understands it to a higher level than most of the 
people we have run into who have been involved. His comments have been 
extremely valuable, and a couple of times he has even reined in my 
enthusiasm a little bit, making very good points that needed to be 
incorporated. He has been one of the Senators who contributed very much 
by listening to the other side in the debates to make sure we got these 
processes included.
  I have already mentioned Senator Johnson and his help on the 
subcommittee. I don't know how many panels we served on, answering 
questions about how this works and how it could work better. That has 
always been our approach to the bill: How can we make it better? How 
can we improve it so that it works?
  This legislation is unfinished business left from the 106th Congress. 
The activity Senator Johnson and I engaged in didn't happen this year. 
As soon as we got chairmanships, we started working on the bill. That 
was our prime emphasis for the 2 years of the last session. It took all 
of that time. It took all of that time to go through the process of 
understanding exactly how the bill works, reviewing previous failures, 
visiting the Department of Commerce. Of course, the Cox report we have 
referred to several times came out during this process.
  One of the actions I took was to go over to the Intelligence 
Committee and read the Cox report when it was still a secret document. 
I am always amazed that just by being elected a Senator, one gets a top 
security clearance. I understand why that is and I am glad that it 
happens. I understand we have had a pretty good review of our 
background by the time we get elected, whether we want it or not. I 
went over and received a briefing and read the document. I wanted to be 
sure the ideas we were generating for solving the problem followed the 
direction of the people who were really concentrated on the Export 
Administration Act and the security of the country, particularly as it 
related to China.
  I was convinced and am convinced that we did what can be done 
legislatively. There are a lot of other processes that need to go on, 
particularly in the executive branch, to deal with this, but that is 
not legislation. We deal with the legislative part.
  We also lived with people from the Departments of Defense, Commerce, 
and State for a long time. I have to thank Dr. Hamre and Secretary 
Reinsch for their dedicated devotion to coming up with a solution. Both 
of them had worked intensively on this issue from their own positions 
in Defense and Commerce. Without their interaction and daily meetings 
and telephone calls, we would not have been able to get to the 
reasonable position that we have.
  I was able to get some people on my staff for a very short time who 
had dealt with license applications. We wanted to know what the person 
putting in the license had to go through. Then following that, because 
of the concern over enforcement and particularly the postshipment 
verification, I brought somebody into my office who was an enforcement 
officer, somebody who had actually done some of these things on site, 
somebody who knew how to calculate old penalties under IEEPA versus the 
penalties under EAA as we propose it. It was fascinating, absolutely 
crucial to what we are doing.

  Of course, this was reviewed and endorsed by the Clinton 
administration. Now the Bush administration has taken a look at it, and 
it has been endorsed by them. We have many people from both sides of 
the aisle who have been looking at this, working on it, and hoping that 
at some point, after extensive debate and amendment, it would come to a 
vote.
  What we are debating today is whether or not we ought to proceed. We 
could save a lot of time if we proceeded to offering amendments. All of 
those

[[Page S3949]]

amendments won't be debated on the floor. If there are some that deal 
with a top secret security, those will be dealt with as we do with that 
kind of an amendment. If some of the discussion or parts of the 
discussion cannot be in the Chamber, it will be held in one of the 
rooms designed for that kind of discussion. We have done that before. 
In fact, two of the hearings we held were done under those 
circumstances so that the people in the intelligence community who 
needed to communicate some of the problems they saw could get those 
problems directly to us.
  We invited every Member of the Senate, but we haven't had every 
Member of the Senate listen to it. Those of us who have attended, who 
have worked on this bill, think we have incorporated the solutions that 
were brought out in the hearings into this bill.
  What happened on it last time? We ran out of time. It is pretty easy 
to run out of time on a bill, I am finding. This one is in trouble of 
running out of time. I am hoping, because we were able to bring up this 
version at this point in time, that that will not be the case.
  We need this bill. I emphasize, the reauthorization provides 
authority to control exports for commercial or dual-use items. I need 
to mention that because we are not talking about munitions here. That 
is a separate process. That needs to be reviewed, too. In fact, one of 
the suggestions we had was that the fines in this bill should not get 
out ahead of the fines in the munitions bill. This is way out ahead of 
the fines in the munitions bill. It was our suggestion that maybe if we 
cut the fines back a little bit, that the munitions bill could be 
brought up to this so that there were sufficient fines in that bill.
  At any rate, we don't want the two confused. I don't want to talk 
about that very much because that has been one of the difficulties with 
this. It gets confused with munitions and satellites. These are the 
dual-use items. These are items that, yes, there could possibly be a 
military application for them. If there is a military application that 
would be detrimental to the security of this country, we have put in 
the provision that the President of the United States can set aside any 
other permission, any other possibility of licensing, and protect that 
item. We have included that national security aspect.
  It does establish the modern effective framework recognizing items 
available in foreign or mass markets that are not effectively 
controlled. It puts stronger controls over a few items, which should 
equal more effective controls. We are talking about building a higher 
fence around fewer items. I will talk about that, too.
  I did have the fortunate opportunity to cochair and work with 
Congressman Cox on the study group to enhance multilateral export 
controls for U.S. national security. Together we released the study 
group's final report on Tuesday, April 24. That was this week. There is 
a need beyond the export and included in the Export Administration Act 
to enhance multilateral controls. What we do as a country by ourselves, 
if it is being done everywhere else, isn't going to cut it. We need to 
have everybody who has that item working with us to make sure it 
doesn't get in the wrong hands.
  That is what the report we released on Tuesday dealt with. Mr. Cox 
referenced the fact that we need a commonsense export control policy. 
He said that we should not make the mistake of confusing a more 
burdensome system with the more effective system. He went on to mention 
that the current export control system has ``an instinct for the 
capillary rather than the jugular.'' In other words, the current system 
often has the tendency to put the same focus and expend the same amount 
of energy on the more trivial items, as opposed to concentrating on the 
truly dangerous items. That is what we are trying to do. That is what 
we talk about in building higher fences around fewer things, but being 
able to control them. If we try to control absolutely everything and 
expend an equal amount of effort on each item that the United States 
produces, we don't stand a chance of keeping up. So this bill focuses 
and gets some concentration and handles the problem.
  I do happen to agree with Mr. Cox that S. 149 is structured in a way 
that will focus on the jugular, not the capillary. As everybody is 
aware, Mr. Cox chaired the Select Committee on U.S. National Security 
and Military Commercial Concerns with the People's Republic of China. I 
mentioned that before. It investigated several export-control-related 
problems concerning China and offered recommendations to improve our 
export control systems. He noted during his testimony before the 
Banking Committee last year that:

       We ought not to have export controls to pretend to make 
     ourselves safe as a country. We ought to have export controls 
     that work.

  That is what S. 149 aims to do. It will make export controls work. It 
will make export controls effective.
  The bill would establish a strong, but flexible, export control 
framework that can adapt to our national security needs in today's 
globalized and uncertain world. Recent events tell us that as 
situations change, the administration should be provided with the 
flexibility it needs to adapt to that change. S. 149 does not lock the 
U.S. into a policy position toward any particular country or any 
particular item. It sets the framework that the administration would 
carry out. The Congress would then have the appropriate oversight 
responsibilities.
  The bill provides the President with authority to control items 
beyond current law. Section 201(d) of the bill--and I have mentioned 
this before--grants the President special control authorities for cases 
involving national security and international terrorism, as well as 
international commitments made by the United States. Section 201(c) 
allows controls to be imposed based on the end use or end user of an 
item if it could contribute to the proliferation of weapons of mass 
destruction.
  I remind my colleagues that these two provisions could be used 
regardless of foreign availability or mass market status of the item.
  Other national security items are also included in the bill. For 
example, it requires that whenever items are to be taken off the list, 
the Secretary of Defense concur with the decision. In addition, country 
tiering would be made by the President. He would be the one to 
determine where a country is assigned to a tier for each controlled 
item or group of items. The President is to take into consideration 
several risk factors, including the present and potential relationship 
of the country to the U.S. and the country's weapons of mass 
destruction capabilities and compliance with multilateral export 
control regimes. In other words, if they are cooperating with us and 
our allies, they will be rated better. If they are a rogue state, they 
will be rated terrible, and that can vary as we find out things about a 
country. There is no country referred to by name in this bill, and that 
is so that the President and the Congress have the total flexibility in 
dealing with any country as they become friends or as they become 
enemies.

  Additionally, it will establish tough new criminal and civil 
penalties for export control violations much greater than are in the 
current law. Those penalties were outdated and needed to be enhanced, 
and they have been enhanced dramatically. These penalties will deter 
potential violators, rather than be computed as part of doing business.
  The bill establishes a program to increase compliance with the 
freight-forwarding firms--the people shipping the items. This will in 
turn allow enforcement to detect and interdict possible illegal 
shipments. That is an improvement over the old system. It increases the 
overseas presence of enforcement agents who conduct prelicense and 
postshipment checks.
  A very important part of the bill is its emphasis on multilateral 
export controls--the report that we put out this last Tuesday. Many 
dramatic changes have occurred over the past decade that present 
additional challenges to the effective control of sensitive technology. 
The U.S. now is rarely the only producer of militarily useful high-tech 
product. The effects of globalization, such as increased flows of 
trade, foreign investment, and international communications have 
contributed to the more widespread production and availability of high-
tech products. The threats are now different and more diffuse. 
Therefore, the bill urges the administration to strengthen the existing 
multilateral export control regimes. Multilateral export controls are

[[Page S3950]]

the most effective controls. The U.S. has to exercise its leadership in 
this area now more than ever, and the bill provides a mechanism for 
encouraging and, in fact, forcing that.
  Our position of world leadership in stemming the transfer of weapons 
of mass destruction is compromised by our failure to enact a more 
permanent national vehicle to authorize our export control program. 
Passage of S. 149 will reaffirm U.S. leadership in the area of export 
controls. U.S. leadership in this area has been lacking in large part 
because of Congress' failure to reform and reauthorize EAA. If we don't 
have good controls in place, it is very difficult for us to talk to our 
allies and ask them to join us in these multilateral processes.
  I look forward to the President signing this bill. It is essential 
that the EAA be reauthorized and reformed this year before August 20. 
Passage of S. 149 will advance both our national security and our 
economic objectives.
  Is this the final answer? No. There is always going to be more work 
that is needed to be done on national security. Times change. We have 
had a drastic change in the times. The Iron Curtain came down. But this 
bill operates the same way. We always have to be working on it, but we 
have to have something in place now. We ought to be proceeding to the 
debate on this bill. We should be talking about those amendments that 
were referred to earlier and debating them now. We should be proceeding 
on the debate.
  If we can proceed on the debate, we can reach a logical conclusion 
that will solve the security problems of the United States, or at least 
begin the process. I could answer some of the other things, and I 
should answer some of the other things that were mentioned. Computers 
is one of the items that was brought up, and it was mentioned that we 
are taking out a provision that has been present for a decade. Well, 
the way the computers operate now, as everybody in the country knows, 
has changed dramatically. They are not the same mechanism they once 
were. They are being linked in unusual ways to provide capabilities 
using older machines or less capable machines than some of the brand 
new machines.

  Another discovery: I sat by a guy on the airplane and he was talking 
to me about supercomputers. I had to check out what he said. He said 
the U.S. was no longer producing any supercomputers; that Japan is the 
only country producing them. Do you know that he is right? We have some 
special linkages of computer chips that provide as much or more 
capability than the supercomputer that Japan makes. But if you are 
talking about a single computer, Japan makes the supercomputer; we 
don't. That takes out some of the mechanism for measurement that we 
used to have. We need to have a knew measurement. That is recognized by 
the Department of Defense and the Department of Commerce and the 
Department of State and the security agencies. So that is why we have 
made some provisions to do something with computers.
  Foreign availability: A lot of what was talked about isn't current 
law. The change in foreign availability is that we have a Presidential 
set-aside. We give the President authority to set aside in national 
security instances. We change the word ``significant'' down to 
``detrimental'' so it would be easier. But we are talking about the 
President of the United States.
  Who determines whether the President of the United States sets it 
aside for a significant security reason or a detrimental security 
reason? Actually, the President of the United States determines that. 
So whatever he says is detrimental or significant would be detrimental 
or significant. It is very easy for him to justify any of his actions.
  We also call for multilateral controls when foreign availability is 
put in place so it is not just the United States saying what cannot be 
done, it is all of the countries that produce that product saying it 
cannot be so. That is the only way to solve that problem.
  I have to talk a little bit about the appeals process because there 
is some confusion on that. I suspect a lot of the reason we are not 
debating this right now, why we are not proceeding to this legislation 
is that there is some confusion.
  I have a little trouble with the suggestion that we are moving ahead 
too fast. We did it last year. We met extensively last year. We brought 
it up this year. We talked to all of the parties--all of the parties--
who were willing to sit down and talk again this year. We brought it to 
committee. We debated it in committee. We had amendments from the 
President's staff. Those were circulated, and the people who were 
opposing our motion to proceed had meetings with the President.
  When we passed it out of committee, everybody had to suspect that at 
the first possible moment we could bring up this bill, particularly in 
light of the August 20 deadline, that we would bring it up for the 
security of this Nation. We wanted to bring it up as soon as possible.
  This is one of those gaps in legislative time that came up. We were 
asked: Do you want to bring it up now, particularly in light of what 
has happened with China?
  We said: We need to bring this up at any time we can, particularly in 
light of what has happened with China, both now and in the past.
  We are not afraid of any amendments. There are ways that a bill can 
always be improved. That is why we have this legislative process in 
which 100 people participate. It is so everybody can have a say from 
their perspective. The group as a whole can determine whether that is 
something that needs to be a part of whatever legislation is being 
considered at that time.
  I ask unanimous consent that, following my remarks, the summary of 
EAA discussions that me and my staff have had with different groups be 
printed in the Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See Exhibit 1.)
  Mr. ENZI. Mr. President, under the present appeals system, for 
someone to appeal a decision on licensing at the committee level, they 
have to talk to their boss and educate their boss enough about that 
particular license so their boss can file the appeal. There has to be a 
lot of tension, particularly in the military, of someone having to 
disturb somebody further up the line over a decision. Uniformly people 
agreed there was some difficulty with that.
  We have provided for an appeal in the first round by the person 
sitting on that committee. He prepares the documents now. As it gets up 
to the decision level, then the decision has to be made by people who 
are in office.
  Did China get our secrets? Yes, China got our secrets. Does this bill 
stop that? This bill stops it to the best ability I know, and it is 
certainly better than doing it under an Executive order, an emergency 
provision by the President.
  This bill is needed. We should be debating it. We should be 
proceeding with whatever amendments are needed. The country desperately 
needs this bill.
  Again, I thank Senator Gramm, Senator Sarbanes, and particularly my 
ranking member on the subcommittee, Senator Johnson, for all of the 
hours they have spent on this legislation. We are still willing to 
spend hours. We want to have a debate. We want to proceed.
  I yield the floor.

                               Exhibit 1

                 Summary of EAA Discussions, 1999-2000

       Jan. 20, 1999, 10 a.m.--Subcommittee on International Trade 
     and Finance--Hearing on the Reauthorization of the Export 
     Administration Act.
       Jan. 28, 1999, 3:30 p.m.--Enzi staff meets with Thompson 
     staff to discuss issues regarding reauthorization of EAA.
       Feb. 8, 1999, 10 a.m.--Enzi staff meet with Gary Milhollin, 
     Wisconsin Nuclear Arms Control Project.
       Feb. 8, 1999, 2 p.m.--Enzi staff meet with NSA staff.
       Feb. 9, 1999, 10 a.m.--Enzi staff meet with Senate 
     Intelligence Committee staff member (Joan).
       Mar. 16, 1999, 9:30 a.m.--Subcommittee on International 
     Trade and Finance--Hearing on the Reauthorization of the 
     Export Administration Act and Managing Security Risks for 
     High Tech Exports.
       Mar. 18, 1999, 3 p.m.--Enzi staff meet with WMD Commission 
     staff.
       April 14, 1999, 10 a.m.--Subcommittee on International 
     Trade and Finance--Hearing on the Export Control Process.
       April 28, 1999, 1 p.m.--Enzi staff meet with Kyl staff.
       June 7, 1999, 9 a.m.--Banking staff meet with Cox 
     Commission investigator.
       June 10, 1999, 10 a.m.--Banking Committee Hearing on Export 
     Control Issues in the Cox Report.
       June 17, 1999, 10 a.m.--Banking Committee Hearing on 
     Emerging Technology Issues and

[[Page S3951]]

     Reauthorization of the Export Administration Act.
       June 22, 1999, 10:30 a.m.--Enzi meets with John Barker, 
     State Department.
       June 23, 1999, 10 a.m.--Banking Committee Hearing on 
     Reauthorization of the Export Administration Act: Government 
     Agency Views.
       June 24, 1999, 10 a.m.--Banking Committee Hearing on 
     Reauthorization of the Export Administration Act: Private 
     Sector Views.
       June 28, 1999, 4 p.m.--Enzi staff meet with Mack staff.
       July 29, 1999, 9:30 a.m.--Enzi staff meet with Kyl staff.
       June--July/Sept. 1999--Numerous meetings with 
     Administration (BXA, State, Defense, intelligence), industry, 
     Senators and staff to discuss draft EAA.
       Sept. 16, 1999, 9 a.m.--Banking Committee staff meet with 
     AIPAC staff.
       Sept. 23, 1999, 10 a.m.--Banking Committee Votes 20-0 to 
     Approve Export Administration Act of 1999.
       Sept. 27, 1999, 11 a.m.--Banking Committee meets with DoD 
     staff to discuss S. 1712 issues.
       Oct. 6, 1999, 10 a.m.--Banking Committee meets with AIPAC 
     staff.
       Oct. 10, 1999, 10 a.m.--Enzi meets with Cochran. Cochran 
     says he will not hold up consideration of the bill.
       Oct. 20, 1999, 11:30 a.m.--Enzi meets with Kyl. Kyl says we 
     did not listen to his staff at all when putting bill 
     together.
       Oct. 25, 1999, 4:15 p.m.--Warner meets with Gramm/Enzi. 
     Warner staff (SASC Joan) says she has not seen the reported 
     bill. Warner commits that his staff will review the bill and 
     get back to us.
       Oct. 28, 1999, 4 p.m.--Gramm/Enzi meet with Lott to discuss 
     consideration of bill. Lott says window is narrow. Will 
     consider if it will only take one or two days.
       Nov. 1, 1999, 6 p.m.--Banking Committee staff meet with 
     SFRC staff (Marshall Billingslea). He provides us with 
     extensive list of concerns, mostly jurisdictional in nature.
       Nov. 4, 1999, 3 p.m.--Banking Committee staff meet with 
     SASC staff. SASC says they don't know how the bill will 
     impact military since military now incorporates more off the 
     shelf commercial items.
       Nov. 5, 1999, 1:30 p.m.--Banking Committee staff meet with 
     SASC staff, Hamre, NSA.
       Dec. 14, 1999, 11 a.m.--Banking Committee staff meet with 
     Thompson staff (Curt Silvers introduces Chris Ford, new 
     staff).
       Fri., Jan. 21, 12:30 a.m.--Banking Committee staff to meet 
     with Marshall Billingslea.
       Wed., Feb. 2, 10 a.m.--Banking staff meets with SASC staff.
       Wed., Feb. 9--Senators Warner, Helms, Shelby, and Thompson 
     send a letter to Senator Lott expressing concerns with S. 
     1712 and requesting referral to the Committees on Armed 
     Services, Foreign Relations, Governmental Affairs, and 
     Intelligence.
       Wed., Feb. 9, 3 p.m.--Senators Gramm and Enzi meet with 
     Senator Lott in the Leader's office.
       Thu., Feb. 10, 5 p.m.--Senators Gramm and Enzi meet with 
     business community in Senator Gramm's office.
       Fri., Feb. 11, 10 a.m.--Lott staff holds meeting with 
     Gramm, Enzi, Warner, Helms, Shelby, and Thompson staff in 
     Appropriations Committee room [3 hours].
       Tue., Feb. 15, 11 a.m.--Lott staff schedules staff meeting/
     canceled by Lott staff.
       Wed., Feb. 16, 12 p.m.--Lott staff holds second meeting 
     with Gramm, Enzi, Warner, Helms, Shelby, Thompson and Kyl 
     staff in Leader's office [2.5 hours].
       Thu., Feb. 17, 3 p.m.--Banking staff hold informational 
     briefing re S. 1712 for all Senate staff in Banking hearing 
     room.
       Fri., Feb. 18, 1 p.m.--Lott staff hosts third meeting with 
     Gramm, Enzi, Warner, Helms, Shelby, Thompson, and Kyl staff 
     in Leader's office; Gramm/Enzi staff provide document 
     outlining provisions that may be accepted. [45 min].
       Tue., Feb. 22 9:30 a.m.--Senator Lott meets with Senators 
     Gramm, Enzi, Warner, Kyl, Shelby, and Thompson in Leader's 
     office; Senators Gramm and Enzi identify three key issues in 
     contention; agree to provide Managers' Amdt.
       Wed., Feb. 23--Gramm and Enzi staff provide Managers' 
     Amendment CRA00.098 to other senators' staff.
       Fri., Feb. 25--Gramm and Enzi staff provide pullout 
     CRA00.120 regarding three issues to other senators' staff.
       Fri., Feb. 25--Senator Thompson sends a letter to Senators 
     Gramm and Enzi, cc'd to Senator Lott and the other senators, 
     expressing ``grave concerns'' about S. 1712.
       Mon., Feb. 28, 4 p.m.--Senator Warner holds SASC hearing on 
     EAA; Senators Enzi and Johnson among witnesses.
       Mon., Feb. 28, 6 p.m.--Warner staff host impromptu meeting 
     with DOD and DOC officials and Enzi and Johnson staff in SASC 
     hearing room; walk through differences [4 hours].
       Tue., Feb. 29, 10 a.m.--Warner staff host meeting with DOD 
     and DOC officials and Gramm, Enzi, Sarbanes, Johnson, Levin 
     staff in SASC hearing room [2.5 hours].
       Tue., Feb. 29--Senators Warner, Helms, Shelby, Kyl, 
     Thompson, Roberts, Inhofe, and B. Smith send a letter to 
     Senator Lott to express ``continuing concerns'' with S. 1712, 
     stating that ``even with its proposed managers' amendment'' 
     the bill fails to address concerns, and objecting to its 
     consideration.
       Tue., Feb. 29--Senators Abraham and Bennett send a letter 
     to Senators Lott and Daschle urging that they make Senate 
     consideration of S. 1712 a priority.
       Wed., Mar. 1, 2 p.m.--Gramm, Enzi, Sarbanes, Johnson staff 
     meet with business community in Banking hearing room.
       Fri., Mar. 3, 2 p.m.--Senators Gramm and Enzi meet with 
     Senators Warner, Helms, Kyl, and Thompson in Senator Gramm's 
     office; walk through their concerns [3.5 hours].
       Mon., Mar. 6, 11 a.m.--Senator Gramm meets with Senator Kyl 
     in Senator Gramm's office to discuss concerns [1 hour].
       Mon., Mar. 6, 1 p.m.--Senators Gramm, Enzi, Johnson, with 
     Sarbanes staff, meet in Senator Gramm's office to discuss 
     concerns raised [1 hour].
       Mon., Mar. 6, 3:30 p.m.--Senators Gramm and Enzi meet with 
     Senators Warner, Helms, Shelby, Kyl, and Thompson in Senator 
     Gramm's office; finish walking through their concerns [2 
     hours].
       Tue., Mar. 7, 8 a.m.--Senators Gramm and Enzi meet with 
     business community in Banking hearing room to discuss ongoing 
     member negotiations.
       Tue., Mar. 7, 4:30 p.m.--Gram and Enzi staff meet with 
     Warner, Helms, Kyl, Thompson, and Shelby staff; walk through 
     4-page Managers' Amendment document [1.5 hours].
       Tue., Mar. 7, 5:45 p.m.--Senator Lott brings up EAA by 
     unanimous consent (Senator Thompson raises concerns on floor 
     but does not object).
       Wed., Mar. 8, 11 a.m.--Senators Gramm and Enzi meet with 
     Senators Warner, Helms, Shelby, Kyl, and Thompson at those 
     senators' request. Members agree to suspend floor 
     consideration of EAA until details agreed; Gramm/Enzi provide 
     revised 4-page Managers' Amendment document and ask for 
     comments by the end of the day [1 hour].
       Wed., Mar. 8, 12:30 p.m.--Senator Gramm takes EAA off floor 
     via special UC agreement among Senators Lott, Daschle, 
     Thompson, Reid, and others.
       Wed., Mar. 8, 4 p.m.--Gramm and Enzi staff provide other 
     senators' staff with revised Managers' Amendment CRA00.262.
       Thu., Mar. 9, 3 p.m.--Senator Warner gives Senators Gramm 
     and Enzi misdated letter with attachment of proposed 
     amendments to Managers' Amdt.
       Thu., Mar. 9--Senators Warner, Helms, Shelby, Kyl, and 
     Thompson send another letter to Senator Lott expressing 
     ``continuing concerns'' with S. 1712 and objecting to moving 
     to its consideration.
       Fri., Mar. 10, 12 p.m.--Senator Gramm meets with Senator 
     Warner (other senators represented by staff); gives him 
     Gramm/Enzi final response document; asks for final decision 
     from senators.
       Week of Mar. 13-17--Gramm/Enzi staff wait for response re 
     3/10 document.
       Thu., Mar. 16--Senator Gramm schedules members' meeting for 
     10 a.m. Fri. 17th to get response to 3/10 document; postpones 
     to following week after being told that Kyl/Helms/Shelby not 
     in town and Warner and his staff both ``unable to attend.''
       Mon., Mar. 20--Senator Gramm schedules members' meeting for 
     2 p.m. Tues. 21st to get response to 3/10 document; postpones 
     to later same week after being told that Shelby not back til 
     Tues. night and that the senators first need to meet to 
     confer.
       Week of Mar. 20-23--Gramm/Enzi staff continue to wait for 
     response re 3/10 document.
       Tue., Mar. 21--Senator Warner announces sudden SASC hearing 
     for Thurs. 23d; cites ``considerable differences'' remaining 
     between Banking and other senators.
       Wed., Mar. 22, 1 p.m.--House International Relations 
     Subcommittee on Economic Policy reluctantly removes Senators 
     Gramm and Enzi from their witness list, and instead holds 
     hearing solely with industry witnesses; hints at marking up 
     narrow EAA bills.
       Wed., Mar. 22--[Other senators apparently hold meeting to 
     confer].
       Thu., Mar. 23, 10 a.m.--Senator Warner holds second SASC 
     hearing, at which he presses GAO witness to say S. 1712 
     ``must'' be strengthened, and states that ``the four chairmen 
     have not received some legislative language which we feel is 
     essential to making our decisions on this.''
       Thu., Mar. 23--Senator Reid gives floor statement urging 
     Senate passage of S. 1712, noting that its sponsors ``tried 
     to move a bill . . . but frankly, the majority is unable to 
     join with us to allow us to move this bill forward.''
       Fri., Mar. 24--Two weeks from the date on which they gave 
     the other seniors their final offer, Senators Gramm and Enzi 
     receive a letter dated March 23 from Senators Warner, Helms, 
     Shelby, Kyl, and Thompson. The letter stated:
       ``As you know, on March 6 [sic], 2000, we provided you with 
     a package describing the issues that we consider critical to 
     reaching an agreement on the proposed reauthorization of S. 
     1712 [sic], the Export Administration Act. We were 
     disappointed that you were only able to agree to at most four 
     of the eighteen issues we identified, and were unable to 
     agree to some issues on which we believed we had previously 
     reached agreement in principle. Accordingly, we cannot agree 
     at this time to return the bill to the Senate floor under the 
     terms of the unanimous consent agreement filed on March 8.
       ``There are important issues remaining to be resolved, and 
     we feel that negotiations should continue in order to for 
     there being hope for achieving an Export Administration Act 
     that successfully balances the needs of industry and national 
     security.''
       Week of Mar. 27-31--Gramm/Enzi staff do not hear from other 
     senators' staff.
       Week of Apr. 3--Gramm/Enzi staff do not hear from other 
     senators' staff.

[[Page S3952]]

       Tues., Apr. 4--Senator McCain holds hearing on S. 1712, at 
     which he expresses concern that the bill does not adequately 
     protect national security. Senators Thompson and Enzi 
     testify.
       Tues., April 11--Gramm staff call the staff of other 
     senators to alert them that Senator Lott planned to make a 
     pro forma effort to bring up S. 1712 by UC on Wed., at which 
     point Senator Gramm would object pursuant to the gentleman's 
     agreement made with the other senators on Mar. 8; and that 
     Senators Lott and Gramm then would file a cloture on a motion 
     to proceed to S. 1712.
       Wed., Apr. 12--At Senator Lott's request, Senators Gramm 
     and Enzi give Senator Lott two cloture petitions (one on a 
     motion to proceed to S. 1712, and one on S. 1712); both were 
     signed by 16 Republicans representing a broad diversity of 
     states and of Senate Committees (including SASC, SFRC, SGAC, 
     and SCST).
       Wed., Apr. 12--Senator Thompson holds SGAC hearing on 
     multilateral export controls.
       Apr., May--Gramm/Enzi staff do not hear from other 
     senators' staff.
       Thurs., May 25--Senators Thompson and Torricelli hold a 
     press conference on S. 2645. According to press reports, 
     Senator Thompson said that in his opinion, legislation to 
     reauthorize the Export Administration Act is probably dead as 
     a stand-alone measure in 2000; when asked whether he was 
     partly responsible, he replied, ``Let's just say that truth 
     and justice were served''
       Fri., May 26--Senator Thompson holds SGAC hearing on mass 
     market/foreign availability; no Administration witnesses are 
     invited

  The PRESIDING OFFICER. The Senator from Nebraska.
  Mr. HAGEL. I thank the Chair.
  Mr. President, what is the time arrangement? Is Senator Enzi 
controlling time?
  The PRESIDING OFFICER. There is no control of time.
  Mr. HAGEL. Mr. President, I rise this afternoon to support the Export 
Administration Act of 2001. I support the effort to move this debate 
along for all the reasons my distinguished colleagues have mentioned.
  I am an original cosponsor of this bill. I have participated in a 
number of the hearings over the last 2 years, so I have some sense of 
the thoughtfulness and the depth of the hearings, the testimony taken 
and the analysis given to this bill. I do want to make some brief 
comments, but as I lead into those comments, I want to make a couple of 
general observations.
  First, Senator Enzi said a few minutes ago that the previous 
administration supported this bill and the current administration 
supports this bill. The current administration consists of Vice 
President Cheney, who has some practical and working knowledge of 
national security as he served with great distinction in the House of 
Representatives, was the No. 2 Republican there for years, and he was 
our Secretary of Defense at a very critical time in the history of this 
country.
  Secretary of State Powell supports this bill. Secretary of State 
Powell's entire life has been about national security as he served as 
National Security Adviser to President Reagan, as he served as Chairman 
of the Joint Chiefs of Staff under Presidents Reagan and Bush; two 
tours in Vietnam, decorated. I do not think there is a question about 
whether Secretary Powell or Vice President Cheney would risk national 
security for the dynamics of any legislation, but yet they strongly 
support this bill.

  Our current Secretary of Defense, Don Rumsfeld--we all recall that 
Secretary Rumsfeld is on his second tour of duty as Secretary of 
Defense. I ask the same question about Secretary Rumsfeld: Would he, in 
fact, be supporting a bill that would jeopardize the national security 
interests of this country? I do not think so, nor do I think President 
Clinton would have risked the national security interests of this 
country, nor do I believe President Bush would risk the national 
security interests of this country.
  So this talk about national security not being well thought through 
and not being advanced and prioritized, that somehow we are selling out 
to big business and commercial interests, with all due respect, that is 
nonsense. That is complete fabrication.
  Senator Enzi talked a bit about the current law, the current rules, 
restrictions, and regulations that we are dealing with today. Does it 
enhance our national security? Is it relevant to today's challenges? 
No, it is not. This update, this new bill makes our export control 
regime relevant to the challenges of a very complicated new world.
  America is faced with a very challenging dilemma. We live in an 
unpredictable and dangerous world. Part of our dilemma is a result of 
the fact that America leads the world in products and technologies that 
can be used for the best possible technologies, ends, and purposes and 
also the worst technologies, ends, and purposes.
  Again, there is no higher interest for America than our national 
security interest. We all agree America's national security interest is 
its most fundamental interest, so let's not cloud this debate about 
that.
  While always putting our national security first, our responsibility 
and challenge is to develop a workable and relevant balance that allows 
America's economic and trade interests to be protected as well. That is 
the challenge. In fact, our economic and trade interests are very much 
integral and part of our national security interest. They are not 
separate. You do not deal with trade and economic interests in this 
vacuum and national security interest in this vacuum. It doesn't work 
that way.
  The Export Administration Act of 2001 is a very important piece of 
legislation. It represents an effort to deal with this balance, to come 
to grips with the realities of this balance: How do we ensure we 
continue to sustain our economic growth and yet ensure, as best we can, 
that Saddam Hussein and other dangerous tyrants on the world stage do 
not gain access to our technologies that could aid in advancing their 
weapons programs, detrimental to our national security interests and 
the national interests of the world.
  We will begin to build a missile defense system in the near future 
because of the real and growing threat posed by infant ballistic 
missile programs in other nations. The world's collective failure to 
prevent nuclear proliferation is a constant threat to civilization. We 
need an export control regime that recognizes the real threats to this 
Nation, to our allies, to all the world and, at the same time, 
recognizes the utter futility of trying to control everything.
  This bill is based on the premise we need to build a higher fence 
around a smaller number of items, just as Senator Enzi said a few 
minutes ago. In the 1970s, you could track high-performance computers 
worldwide because there were fewer of them, less sophisticated, less 
powerful, easy to do in a bipolar world--the Soviet Union and the 
United States. Today, computers with nearly unlimited power, far more 
powerful than anything we saw in the 1970s or the 1980s, with far more 
capacity and capability, are available at Radio Shack. Are we going to 
shut down Radio Shack? Let's get real with a sense of economic sense in 
how we deal with this.
  Many components manufactured and sold in the United States are 
reproduced by foreign competitors with little lapse of time or effort. 
The world is simply too integrated. Some may not like that, but it is a 
fact of life. Capabilities abroad advanced so far to put the old system 
in jeopardy are not working, and we are dealing now with an old system 
that, in fact, is not effective. It is no longer relevant to today's 
global economy and national security interests and world threats.
  Our exports must recognize the realities of today's worldwide 
interconnections. The President of the United States, Secretaries of 
Commerce and Defense, our entire intelligence community, and our 
business community can all work within this legislative structure to 
provide a flexible export regime and continue to protect our national 
security interests. This bill establishes a system which meets both our 
security and commercial concerns.
  Only a control regime that raises the fence on the most critical 
dual-use technologies makes any sense. Our dilemma on exporting 
technology can only be solved by making control of critical technology 
a critical issue. Exporters and national security officials need 
clarity.

  We should not treat exporters as unpatriotic or unconcerned about 
proliferation or our national security interests. I have heard in the 
Senate over the last year not so veiled charges to that point. I have 
heard in the Senate things such as the almighty dollar is most 
important for many of the corporations of America. My goodness, what 
are we saying?

[[Page S3953]]

  I come from the business world. I am a businessman personally 
offended by that kind of statement. I don't know one businessman--there 
may be a businessman out there--I do not know one responsible corporate 
citizen in this country who would say to me privately or publicly that 
the interests of his or her company are more important than the 
national security interests of this country. It isn't true. Be careful 
about throwing around loose language, saying many of America's 
companies and corporations are more concerned about their bottom line 
than the national security interests of this country. That is not 
correct.
  This legislation provides a structure that will allow our exporters 
to be partners in the overall objective of helping to prevent weapons 
development by the world's most dangerous and irresponsible dictators. 
We need to work more closely with our allies to continue to enhance 
multilateral controls and reporting on the movement of sophisticated 
technologies.
  America continues to provide the leadership and the negotiating 
process, as we have from the beginning, for more effective, 
multilateral controls. This bill ensures continued U.S. participation 
in multilateral export control regimes that support U.S. national 
security objectives. The United States will continue to exercise its 
leadership in export controls worldwide under this bill.
  In conclusion, I acknowledge Chairman Gramm and Senators Enzi, 
Sarbanes, and Johnson. These four have worked tirelessly, effectively, 
over the last 2 years to bring together a responsible, relevant piece 
of legislation of which we can be proud, and I am proud of being part 
of it. They have developed a commonsense and strong proposal for 
improving the current system. I look forward to continuing to work with 
them to get this legislation enacted so we can update America's 
approach to export controls for this hopeful new world where all 6 
billion people reside together. That is doable. Let's get on with the 
work at hand.
  I yield the floor.
  Mr. JOHNSON. I ask unanimous consent to have printed in the Record a 
document I received from the White House and their Office of Management 
and Budget, a statement of administration policy expressing support for 
S. 149 and also clarifying that there is minimal pay-go consequence to 
this legislation.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                   Statement of Administration Policy

       The Administration supports S. 149, as reported by the 
     Senate Banking Committee. The bill provides authority for 
     controlling exports of dual-use goods and technologies. The 
     Administration believes that S. 149 would allow the United 
     States to successfully meet its national security and foreign 
     policy objectives without impairing the ability of U.S. 
     companies to compete effectively in the global marketplace. 
     As reported, S. 149 includes a number of changes that the 
     Administration sought to strengthen the President's national 
     security and foreign policy authorities to control dual-use 
     exports. The Administration will continue to work with 
     Congress to ensure that our national security needs are 
     incorporated into a rational export control system.


                         pay-as-you-go scoring

       S. 149 would affect receipts and direct spending; 
     therefore, it is subject to the pay-as-you-go (PAYGO) 
     requirement of the Omnibus Budget Reconciliation Act (OBRA) 
     of 1990. OMB's preliminary scoring estimates is that the 
     PAYGO effect of this bill is minimal. Final scoring of this 
     legislation may deviate from this estimate.

  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. KYL. Mr. President, first, I express regret the Senate is being 
asked to take up this legislation at this time. As pointed out earlier, 
the Export Administration Act, which this bill reauthorizes, with 
changes, has not been reauthorized for over a decade. It is not as if 
there is an emergency to do it this week. We have lived without a 
reauthorized bill for over 10 years.
  What we have done is reauthorized it on a year-to-year basis from 
time to time--most recently, last year. I believe it is in October that 
reauthorization runs out, so we have to take some action before that 
time. I believe we should. I believe the Senate should act on this 
legislation before that time. I suspect there will be some amendments 
offered. I suspect there will be a healthy debate.
  But at the end of the day, in one form or another, the bill will pass 
and the Export Administration Act will be reauthorized as significantly 
modified. President Bush, when campaigning, campaigned on that promise, 
and he has made good on that promise by supporting this legislation. I 
appreciate that effort on his behalf. But I think it would be wrong to 
suggest that it was the administration that requested the bill be 
considered at this time.

  The administration was asked by a group of Senators who have 
expertise in national security matters to evaluate the bill that is 
before us. In less than a 2-week period that evaluation was complete, 
and it was done largely by people about whom Senator Thompson was 
talking this morning, who are not new additions to this administration. 
Meeting this morning with Secretary Rumsfeld, we found that there are 
only two confirmed positions in the Defense Department--Secretary 
Rumsfeld and the No. 2 person in the Defense Department, Secretary 
Wolfowitz: That is it. So it is not as if a new Bush team has evaluated 
this legislation, has had the time to give it the kind of critical look 
I had hoped it would be able to do.
  Mr. JOHNSON. Will the Senator yield for a question?
  Mr. KYL. I would like to continue making a point. The Senator has had 
quite a bit of time. I will note, however, I have heard the questions 
of my colleague. The question is the same: Essentially, as a good 
Republican, why wouldn't you support the Republican administration with 
all its expertise on this? I guess part of my answer is if the Senator 
from South Dakota is willing to abide by the expertise and 
recommendations of this administration on all matters from here on, I 
would almost be persuaded to sit down and to pocket his votes on the 
tax cuts, education bill, all the defense matters that come before us, 
and everything else.
  The fact is, reasonable people can differ. The Senator from South 
Dakota can agree with the administration on some things and disagree 
with them on others, just as people on this side of the aisle can do. 
So it is no great argument to say if you belong to the party of the 
President, you have to walk in lockstep with the President or somehow 
there is a suggestion that your position is tainted.
  But let me go on with my point.
  Mr. JOHNSON. If I might respond?
  Mr. KYL. I will be happy to yield for a moment.
  Mr. JOHNSON. I will be very brief. I appreciate the Senator's 
thoughtful remarks. I do not want to delay his proceeding with those.
  The question is not whether the Senator supports the White House on 
each and every issue. The question simply is, Does the Senator support 
the administration and Colin Powell and the defense establishment of 
this administration on this specific issue?
  The point the President has made is that he wished this legislation 
would be brought up in a very timely, very expeditious manner. The 
question is not whether he supports the President--of either of our 
parties, all the time. Certainly we do not. The question is whether 
there was a disagreement with the defense establishment of this 
administration on this specific issue.
  Mr. KYL. I appreciate the question being reasked by the Senator from 
South Dakota, and my answer is as I indicated and as I will continue to 
demonstrate in my remarks. I think it would be a mistake for us to take 
the position on either side that this is an all-or-nothing proposition. 
It is not.
  I respect, for example, the work of Senator Enzi from Wyoming, a 
member of the Banking Committee, who has worked very hard on this 
issue, and in good faith, and his chairman, Senator Gramm. There is no 
one in this body for whom I have greater respect than Senator Gramm, 
the chairman of the committee. Because they are putting this 
legislation forward at this time, and some other Senators disagree on 
national security grounds as to whether it is exactly the right bill to 
be passing at this time, I would think it absolutely appalling that 
anyone would question in any way their commitment to national security 
because that would simply be wrong.

  By the same token, it would be wrong for anyone to question the 
sincerity or the knowledge of those who

[[Page S3954]]

may oppose every jot and tittle of this legislation on the grounds that 
they are somehow either not in synchronization with the administration, 
not in favor of free trade, or somehow caught in cold war legislation, 
or something of that sort.
  Anytime you get that kind of personal suggestion in a debate, it 
lowers the tone of the debate and is not productive to a rational and 
constructive solution to the problem.
  What is the problem? We need to reauthorize the law in a way that 
properly melds both the trade and national security ramifications. 
There are those in this body with a great deal of expertise in national 
security matters who have come to the conclusion that the bill that 
came out of the Banking Committee would in some respects be inimical to 
national security and have asked for an opportunity, a greater 
opportunity, to try to work out some of the differences they have with 
the sponsors of the bill.
  These are not people without expertise. We are talking about 
committee chairmen of every committee in this body that has 
jurisdiction over national security matters; specifically, Senator John 
Warner, chairman of the Armed Services Committee, who I believe is 
going to be here within the hour to speak to the issue; Senator Shelby, 
who is chairman of the Intelligence Committee on which I sit; Senator 
Thompson, who chairs the Governmental Affairs Committee, the committee 
that had the jurisdiction to look into Chinese espionage and other 
matters; Senator McCain, chairman of the Commerce Committee and also a 
member of the Armed Services Committee; and Senator Helms, chairman of 
the Foreign Relations Committee. All of these Senators have extensive 
experience in matters relating to our national security.
  I have not added up the combined years of wisdom represented by them, 
but it is not inconsiderable. They have all raised a red flag. None of 
them has said they are opposed to reauthorization of an Export 
Administration Act. All of them assume we are going to do this. But all 
would like to do so in a way that accommodates both interests. These 
Senators simply are not of the view that we have had the opportunity to 
do that yet.
  I spoke to the issue of timing a moment ago. There is another reason 
I think it is unfortunate that the legislation is brought up right now. 
Not only is it not critical that it be done this week or even this 
month, I am fearful that having this kind of debate at this time could 
very well send the wrong signal to China. China is very much in the 
news today. It holds our reconnaissance aircraft. It improperly held 
American crewmen for 11 days. Its pilot wrongly and accidentally 
endangered the lives of our crew members, in the process of which he 
lost his own life. China has been making extraordinarily belligerent 
comments in recent months. It has continued to hold and has arrested 
people, some of whom are U.S. citizens or relatives of U.S. citizens, 
without much explanation, and it has acted very negatively to the U.S. 
response to these actions.
  This is all in the context of a buildup of military might across from 
Taiwan, accompanied by threats that if Taiwan does not negotiate its 
return as a province to mainland China, there is a possibility that 
China would use force against Taiwan to achieve that reunification.

  This is all quite troubling, and it is a circumstance that requires 
great care on the part of the United States. We want to live in peace 
with China. We expect we are going to be able to do that for decades 
and decades. We would like very much to have good trading relationships 
with China. But we also understand that there are some tensions in our 
relationship.
  Part of the reason for these tensions is, I suspect, misunderstanding 
between the leaders of our two countries--misunderstandings, frankly, 
between the peoples of our two countries. It is frequently said we just 
do not understand the Chinese well enough and we do not deal with them 
very well as a result. I suspect the converse is true as well. So there 
is a great deal of talk about sending messages. I think it is important 
for us not to send the wrong messages.
  I think in this regard the President was masterful in his handling of 
what was a serious crisis. A country was improperly holding U.S. 
citizens. The President, in a very understated but very firm way, was 
able to effect the return of our people and I hope not send any 
negative messages and in fact send some pretty positive messages, at 
least designed to elicit cooperation from China.
  He was very sensitive, in other words, to the notion of what kind of 
messages were being sent. He sent another message when he decided to 
sell defensive arms to Taiwan--arms necessary for Taiwan's defense in 
the face of an attack by the PRC. That has grated on the PRC. And they 
reacted publicly to it. But he was very candid and clear about 
obligations of the United States in this regard. Again, he sent the 
right message: We mean you no harm. Obviously, we want to avoid 
conflict.
  The best way to do that is to ensure that Taiwan can defend itself 
because, obviously, we wouldn't want the PRC to be tempted to engage in 
any kind of belligerent activity toward Taiwan.
  Messages that are sent are very important. My fear is that by acting 
on this legislation at this time, whatever we end up doing, we are 
going to end up sending the wrong message. To the extent that this 
debate boils down to a question of whether or not those who are in 
favor of enhancing trade prevail over those who are involved in trying 
to preserve our national security--a very false dichotomy--but to the 
extent that is the way it is played--and it will be played that way by 
the media--we send a very bad message to our friends in China. It is a 
message that trade trumps national security. That is wrong. It would be 
an incorrect interpretation. But that is a message that I guarantee you 
will be in the headlines and in the papers to the extent that people 
pay attention to this debate.
  I am trying to bend over backwards not to characterize it that way. 
The people who are sponsoring this bill are very interested in national 
security, and they believe they have crafted a bill that meets national 
security requirements, as does the administration.
  There are others who very much believe in free trade and expanding 
our trade with China but who believe there are additional changes that 
need to be effected in this legislation and that it can best be done 
before the bill is brought to the floor for the amendment process.
  It will be a wrong message, but it will be, nonetheless, a message 
that will be delivered, and I guarantee you that the longer this debate 
goes on the more of us are going to be called by the talk shows. They 
are going to call, for example, the Senator from Wyoming and myself. 
They are going to say: Will the two of you debate trade versus national 
security? Both of us are going to say that we really do not want to 
debate this issue in those terms because that is a false dichotomy. But 
that is the way it is going to be interpreted. It would be the wrong 
message at this crucial time in our sensitive relations with China. 
China represents only something like 1 percent of our trade and much 
less than that relates to dual technology.
  In some sense, this whole question about what kind of export controls 
to put on dual technology items is much overblown. It is not nearly as 
important as a lot of people would have us believe. We are not talking 
about an amount of trade that is going to affect the U.S. economy, or 
even any specific segment of our economy. We are talking about a very 
small number of items.
  I happen to agree with the authors of the bill that there are many 
items that can be decontrolled. That is the word we use. It is now 
possible because of the evolution in technology to take items that were 
at one time deemed to be sophisticated off the list because they are 
simply no longer state of the art, and they are no longer all that 
useful if applied to military weaponry.

  That is one of the features of the bill that I think is good. I think 
we all agree with that. But I also think it would be a big mistake to 
assume that just because the cold war is over there is no longer any 
concern or shouldn't be any concern on our part and any justification 
on national security grounds for controlling the exports of 
technologies which have dual uses; that is to say, both civilian uses 
and military

[[Page S3955]]

uses. It would be just as wrong to characterize the proponents of this 
legislation as believing in that.
  There is a middle ground. I think one of the problems with the 
legislation that has not been adequately addressed is the fact that a 
new regime has been introduced. The regime is that if these items are 
readily available, either domestically or on the foreign market, then 
they are no longer subject to the same kinds of stringent controls that 
they were before. That something has a dual application to both 
civilian use and military use, by definition virtually everything that 
we are concerned about will, therefore, have applicability because it 
will be available either in the United States or on the foreign market 
for civilian uses, and, therefore, for military uses as well.
  That is the definition of dual-use technology, and that is the 
concern we have. The mere fact that something is available to be 
purchased in the United States or abroad for civilian purposes doesn't 
necessarily mean we should forget about any kind of restrictions with 
respect to its export, irrespective of whether its export might result 
in its use in military equipment that could be used against the United 
States. It doesn't mean that at all.
  Yet because of provisions of this bill, it is going to be very 
difficult to regulate the export of items which one can argue are 
available either in the United States or abroad.
  Why is that argument so important?
  When it comes to U.S. military equipment, we have always had superior 
technology, and while it is possible that a particular item might be 
available in another country--I am just speaking hypothetically. But 
let's say the French manufacture it, the Israelis manufacture it, and 
maybe the Germans manufacture it as well as the United States. It 
doesn't necessarily stand true that all of those items are equal and 
that purchasers of those items are indiscriminate with respect to from 
whom they buy it. If that were the case, it wouldn't much matter unless 
the U.S. products were a whole lot cheaper. These other countries are 
going to be able to export their products, in any event.
  The truth is that in most cases, even when U.S. products are more 
expensive--in some cases much more expensive--they are the items that 
are sought because other countries understand that for various reasons 
the U.S. product is superior. Some of these products have intelligence 
components associated with them. They know that in certain cases other 
countries have certain capabilities with respect to that equipment that 
makes their use suspect. Not so with the United States. They know they 
can buy these products from the United States and have no worry about 
being compromised through their use. They cannot be so sure with 
respect to the very same item that they might buy from someone else.
  Just because an item is available someplace else doesn't necessarily 
mean that it is comparable, or that the United States should allow our 
product to be exported even when we know that its use will be embedded 
in military equipment and it could be used against the United States in 
the future.

  That is part of the problem. While the legislation itself grants to 
the President, and only the President, the ability to waive certain of 
these requirements, even the President is limited. He can only do it 
three times. He can only do it for 6 months at a time, and after 18 
months even he can't control the item or require an export license for 
it.
  There are some significant concerns that I think we have to be aware 
of before we just necessarily assume that because we are all for free 
trade--and most of us are for free trade--therefore, we ought to adopt 
this legislation.
  The very fact that the President just this week announced the arms 
sales to Taiwan because of the threat that China poses to Taiwan should 
give us some pause. China is the same country which bought fiberoptic-
cable technology items from American companies and then was found to 
have helped the Iraqis imbed those fiberoptic cables in Iraqi air 
defenses causing the United States enough concern that in February the 
President ordered U.S. jets--and British jets accompanied ours--to 
carry out airstrikes against those very same Iraqi air defense systems. 
It was because of the upgrade through the installation of the 
fiberoptic cable provided and installed by China.
  Fiberoptic cable is a dual-use item, and it is of considerable 
strategic importance. Its export to China is permissible under Senate 
bill S. 149. Let there be no mistake, fiberoptic cable not only 
increases the amount of data that can be transmitted, virtually 
exponentially, but it is also extraordinarily difficult to intercept 
signals in fiberoptic cable as opposed to, for example, through 
microwave transmissions or through regular copper wire.
  This is an item that is in clear use all over the United States. You 
can buy it on the market. But when it is applied to certain kinds of 
military uses, such as military equipment, it can become very dangerous 
to the United States. We have actually taken action against it for that 
very reason.
  Why should we liberalize its export to countries? If Iraq could have 
gotten that equipment and China could have gotten that equipment from 
anywhere else in the world, why didn't they? They buy it from the 
United States because we have the best products. If we deny that for 
military use to countries in the world that we do not want to have it, 
then they are going to have to accept an inferior product, one which 
presumably, at least, hopefully, we would be able to deal with much 
better than our own particular product.
  Let me try to also put in perspective what all the bill relates to. 
There are literally thousands of items on the list of dual-technology 
materials or services that could be, in effect, decontrolled through 
this legislation. I certainly do not have time to go through all of 
them. Let me give you some ideas of what some of these are. I have a 
very lengthy report which, given the time, I will be happy to go 
through in some detail because I think it is most illustrative in 
relation to those who believe there is not much of a problem. One of my 
colleagues said that you can buy it all from Radio Shack. The truth is, 
you cannot buy all this from Radio Shack. Yet it has enough 
availability to escape the requirements of an export license.
  We talked about the Chinese company that helped Iraq outfit its air 
defenses with fiberoptic equipment. This results in high-speed 
switching and routing. That equipment is all provided by U.S. companies 
which, by the way, would like to sell some additional items, various 
communications technology, to the very same Chinese firm that provided 
this technology to Iraq. Is that what we want to be doing? I am not so 
sure. I think we want to think about this very carefully.
  We ought to have the ability to deny an export license for this kind 
of dual-use technology to a company such as the Chinese company that 
bought it in this case. Yet under this bill these technologies would be 
determined to have foreign availability because of their marketing 
abroad, and they would meet the mass market criteria in the bill. 
Therefore, unless the President himself exercised the authority that I 
talked about, they would be eligible for export.
  That is a very recent example. Let's go back to look at some other 
examples. There were news stories at the time of ball-bearing grinders 
purchased from the United States. Since then, there have been quite a 
few public reports, although much of it is classified. But the fact is, 
in the 1970s the Soviet Union purchased ball-bearing grinders from the 
United States ostensibly for its use in civil industry. It used them, 
in fact, to produce pin-sized bearings for use in the SS-18 guidance 
system.
  The SS-18 is the most fearsome weapon on the Earth today--a nuclear-
tipped intercontinental ballistic missile. These ball bearings are 
crucial to produce the guidance system capable of ensuring the very 
high degree of accuracy which this missile possesses. Those are the 
missiles that could incinerate every American living today. The 
guidance systems are perfected because of the ball bearings produced by 
equipment that the United States sent.

  These precision machine tools and ball bearings are controlled by the 
Commerce Department under the authorities granted by the Export 
Administration Act. But under the legislation pending here, these items 
would be available to foreign sources. The bill prohibits export 
controls on them unless the President is able to set aside

[[Page S3956]]

the determination. And he can only do that for 6 months at a time.
  Submarines have to be quiet in order to be effective. The advantage 
of United States submarines is that they are the quietest submarines in 
the world. The other side cannot detect them, and we can pretty much go 
where we want to at will.
  The dual-use technology control list contains numerous technologies 
that can be used to make submarines quieter. This technology is, to 
some extent, available from foreign suppliers. Its export should be 
regulated to prevent nations such as China from freely purchasing it 
from American companies.
  While foreign submarine manufacturers such as Russia and Sweden have 
made great strides in submarine technology, we think U.S. technology is 
superior, and it is unique to U.S. submarines, and, if nothing else, 
its export could compromise the vital capability of U.S. submarines.
  There are those in Government who also like to talk about something a 
lot more mundane. I am choosing examples almost at random, but this 
caught my eye: a variety of devices that can be used to torture 
prisoners.
  We are now talking human rights, folks. These devices that can be 
used to torture prisoners--some of which are as mundane as electric 
prods and shock batons and shackles, and so on--are controlled for 
export due to human rights considerations. You can get these on the 
open market. If you are a bad guy, and you go shopping for them, you 
can find them somewhere in the world.
  Should the United States be selling them to countries that we know 
engage in human rights abuses? That is the kind of consideration that 
distinguishes America from many of the rest of the nations of the 
world. We just do not sell equipment and items to other countries that 
we know will be used to hurt people improperly, even though that 
equipment can be obtained from other places.
  It is perhaps a small point, but I think it makes a big difference. 
Even if people can buy something from someplace else, it is not 
necessarily a good idea for the United States to be selling it, again, 
partially because of the signals that we send.
  I may, if I have a little time later, also discuss in greater detail 
about technology that relates to the production of nuclear weapons, 
nuclear reactors, tritium plants, fissile material, liquid and solid 
propellant rocket engines, chemical and biological processing 
equipment, encryption software, flow-forming machines for a variety of 
production applications. All of these are items that are on the dual-
use control list.
  I am going to talk a bit about maraging steel and gas centrifuges in 
just a moment. But suffice it to say, on this list there is page after 
page after page of items that have dual uses; that is to say, perfectly 
permissible civilian uses and also very sophisticated and, in some 
cases, very dangerous military uses.

  The question is, just because you can buy them for civilian purposes, 
should the United States be allowing the export of these items, without 
some control, to nations of the world that we believe would or could 
use them against us?
  In some cases, we use the export control regime for the purpose of 
not prohibiting the export but providing some conditions on it or 
limiting it in some way. Part of the ability to calibrate what we allow 
to be exported is lost as a result of the specifics of this 
legislation.
  I am sure my colleagues would agree with me--those who are supporting 
this legislation--that in some cases we may want to ultimately grant 
the export license but to have certain conditions on them.
  One of the conditions we have had in the past, for example, has to do 
with who the end user is. There are some fairly well-known cases of 
situations in which we thought that the end user was a civilian entity, 
and it turned out not to be the case. I have in mind two cases. One of 
the cases is where McDonnell Douglas--a very prominent company; a 
company that was formerly in my State, as a matter of fact--thought it 
was selling machine tools for the manufacture of civilian aircraft, and 
it turned out it went to China for the production of military aircraft.
  We also had some very sophisticated computers that we did not want to 
go to a military end user in China. It went, I think, to a research 
institute. But it ended up in the wrong hands. My recollection is, in 
that case, because of some limitations we had put on the export 
license, we were able to pull it back.
  There are cases where if you have some ability to regulate the 
specifics of how the license is granted, you can actually prevent items 
from falling into the wrong hands.
  I haven't talked about computers yet. We know that high-performance 
computers are one of the main areas of contention here because the 
evolution of the technology is so rapid now that something that was 
really leading edge a year or 18 months ago is relatively passe today, 
overtaken by much more high speed and capable computers. U.S. computer 
technology exceeds that of all foreign competitors, yet our 
manufacturers argue for more and more liberal ability to export, to the 
point that the Clinton administration, for all practical purposes, 
eliminated controls on high-performance computers without any 
compelling evidence that reasonably comparable foreign systems were 
seriously sought by foreign customers.
  That brings up another question. There isn't any real definition in 
this bill of what we mean by ``availability.'' It is a very subjective 
term. One wonders why or how it is that we are going to judge something 
to be available. If the market that they really want to buy from is the 
U.S. market, then maybe the availability of a so-called comparable 
foreign product isn't as great as we might think it to be. That is an 
element that needs a further look.
  There is a very interesting example that was pointed out by Gary 
Milhollin of the Wisconsin Project on Nuclear Arms Control. He noted 
that high-precision electronic switches needed to detonate nuclear 
weapons would be decontrolled under the act because of their civil 
application in medical instruments. I believe this device is used in 
the lithotripters, the equipment now that can actually blast apart gall 
stones so you don't have to painfully extract them from an individual. 
They are blasted apart and taken out like little bits of sand. The 
electronics of that are the very same electronics that are used in the 
nuclear detonation components of weapons.
  Similarly, he points out that glass and carbon fibers are used in 
ballistic and cruise missile construction as well as in the enrichment 
of uranium for nuclear weapons and that they could be decontrolled 
because of their use in the manufacture of skis and tennis rackets and 
boats and golf clubs. We have heard recent reports in the news about 
the possibility that different countries--Iraq comes to mind--might be 
buying some of these items off the shelf in fairly huge quantities. 
Everyone asks: Why would they be buying so many of those? The 
speculation is, of course, that it just might be because they want to 
apply them to one of their military uses.
  I mentioned maraging steel before. This is a very special kind of 
steel that is used in the manufacture of solid rocket motor cases, 
propellant tanks, and interstages for missiles as well as in the 
enrichment of uranium. It would be decontrolled because its application 
in commercial rocketry and also the fact that in many forums it is 
available in other countries. There are many other items.
  I will summarize a couple: Corrosion resistant valves used in the 
enrichment of uranium for nuclear weapons; they are also used in the 
commercial paper, energy, and cryogenic industries. This is a list of 
pretty deadly serious military applications of items that nonetheless 
would be decontrolled under this legislation because of their 
applicability to civilian uses as well.
  I talked in the beginning about a concern I had that this legislation 
is being debated at the wrong time. I hope I am not, by articulating 
this list of items--and again, we can talk about a lot more--leaving 
the impression that there is no role for the approach of this 
legislation to get rid of a lot of items on the list that have both 
civilian and military applications. The legislation moves in the right 
direction because there are a lot of items that

[[Page S3957]]

don't need to have this kind of regulation. There are some that do. The 
question is, have we discriminated properly in drawing the dividing 
line between those that do and those that do not?

  There is another provision of this bill that has to do with another 
way we can judge whether or not something would be automatically exempt 
from the export control regime. It has to do with how much value an 
embedded component has. On the surface, you would say, what difference 
should that make? If you have a very highly classified component and it 
represents only, let's say, 10 percent of the cost of an item, simply 
because it is only 10 percent of the cost of the overall item, should 
that mean that the entire item is decontrolled and another country has 
the ability, then, to reverse engineer the entire component so that it 
can take out the part that is highly classified?
  That is what this legislation allows. It says that if only a certain 
percentage of the value is in this very highly controlled component, 
you can go ahead and sell it. There is sort of a presumption that it 
can't be all that big a deal if it is only a small percentage of 
value--10 or 25 percent. A case that I don't think is included in this 
legislation, because of action that the Congress took last year to take 
it out of the Commerce Department and put it back with the State 
Department, but which obviously we had to act on or it would have been, 
is the case of rocket motors. I shouldn't say rocket motors, rather, 
the so-called kick motors that are in many cases embedded in 
satellites. These are very highly classified items. We take a satellite 
that we want to launch, and when it is kicked into its final orbit by 
this little motor, it can actually perform the way we want it to 
perform.
  In the case of China, for example, the Chinese have made it a 
condition for some companies doing business in China that those 
companies allow China to launch a certain percentage of the satellites 
that they want to launch. So those companies, in order to do business 
in China, have to agree to that, and they have. These satellites are 
supposed to be under the control of Americans at all times because they 
are very sophisticated. We don't want them to fall into the wrong hands 
and to be reverse engineered. We don't want our technology to be stolen 
from them. That certainly applies to an item such as the kick motor 
embedded in the satellite.
  We recall that a couple years ago there was a great deal of evidence 
of the fact that certain American companies had allowed satellite 
launches in China without adequate security, the result of which was 
that we believe there was some compromise of American technology by the 
Chinese. It is not only the kick motors. There are other components, 
too. Had Congress not acted last year to retrieve those satellite items 
from the Commerce Department and put them back on what was called the 
munitions list, where the State Department would have the authority to 
require license, we wouldn't have had the same degree of control over 
them that we do today. This is the kind of thing that can happen.
  Again, the timing is wrong here because we are forced to talk about 
situations involving China over and over and over again. I don't 
particularly care to do that. This is a time when it would be nice if 
we could kind of lower the rhetoric and try to develop a relationship 
with China which very clearly states our goals and tries to deal with 
China in a way that doesn't result in more belligerency on their part.

  By the authors of the legislation being insistent on bringing it up 
now, some of us have no choice but to use examples that are, 
unfortunately, very real examples of where we believe that sensitive 
technology has been either sold to or acquired by China in ways that 
this legislation would not prevent. I wish we didn't need to talk about 
that at this time, but since they are very real examples, we will talk 
about them. Again, I hope the message isn't misunderstood. This is not 
about either having trade or national security. The authors of this 
legislation agree with me and I with them that we can do both. We have 
to do both. We will do both. But this will be portrayed as trade 
trumping national security. That would be a mistake.
  With the indulgence of my colleagues, I will continue now to discuss 
some of this other technology that I mentioned would be impacted by 
this legislation. I talked before about maraging steel. Here are some 
of the countries where this product is of particular interest. This, 
again, is the high-alloy steel that has very high yield strength. 
Pakistan has used it for uranium enrichment centrifuges; India for its 
polar satellite launch vehicle; Russia and Iran, special alloys for 
missiles.
  I talked before about the bearings and gas centrifuge. There are 
military applications for high uranium production, and there is some 
evidence that China has sold this technology to Pakistan for the 
production of nuclear weapons in Pakistan. The centrifugal isotope 
separation plant, equipment and components, the military applications: 
Russia's uranium isotope separation plant has played a significant role 
in warhead production. The plant is primarily a centrifuge enrichment 
facility, and it has produced about 40 percent of the Soviet Union's 
enrichment uranium. I talked about explosive detonators earlier.
  Aluminum alloys is another very interesting case. This is obviously 
very useful in rocket technology and missile technology for casings. 
China has developed a welded aluminum alloy used in the design of the 
torpedo hull. It manufactures aluminum alloy casings. India is 
manufacturing heavy-duty aluminum alloy extruded composition and has 
conducted studies on this that are very significant relating to its 
satellite launch vehicle.
  All of these are items that would be impacted by this legislation. 
The ceramic composite materials are a new and increasingly important 
kind of material because they don't conduct electricity. Therefore, 
they have some very unique military applications. They have been used 
in ballistic missiles and reentry vehicle antenna windows, for example. 
They are produced, by the way, by companies in France, Germany, India, 
Japan, Russia, as well as the United States.
  Laminates: Again, missile parts are often made from these other kinds 
of materials. Composite structures and laminates are materials used in 
rocket systems, including ballistic missiles and space vehicles, and 
they are produced in a whole variety of countries, including the United 
States.
  There are military applications to something called crucibles. These 
are used to melt and reduce and cast uranium and plutonium for nuclear 
explosive devices. I realize when I read these, people may say: Wait a 
minute; we are not talking about just putting these things on the open 
market. What I am saying, folks, is they would be items that are no 
longer controlled under the dual technology control regime under the 
old Export Administration Act, which everybody would like to see 
reauthorized, with some changes. Because of the liberalization under 
this act, these items, in effect, become decontrolled.
  In the early 1990s, for example, the U.S. was licensed to sell a 
significant volume of this equipment for making crucibles for high-
performance furnace systems. It found its way to Iraq and to Iraq's 
nuclear missile and chemical weapons program, and for its nuclear 
weapons design and research center. This particular item at that time, 
because of a law that existed, was stopped by Presidential order. That 
would not be possible today if this legislation were to pass.
  Guidance sets for missiles--you might think this is pretty technical 
stuff that we should not be selling on the open market. But there are 
items here that have dual uses. So ballistic missile guidance sets are 
often built to fit into a particular missile to be used in a hostile 
environment, and it would perform with a high degree of accuracy. It 
could have both civilian and military uses. They are produced in a 
whole variety of countries, in addition to the U.S.
  There are services as well as products--and I will not go into all of 
these. We are not just talking about the military applications of 
specific pieces of equipment. We are also talking about certain kinds 
of services showing people how to do certain kinds of things.
  We talked about propulsion systems and components. Here are some of 
the military applications of that. On one occasion, they were disguised 
as automotive spare parts on the airwaves of a

[[Page S3958]]

certain country and were destined for Libya. This was very recently, by 
the way. Some of the paperwork indicated that the seized shipments had 
already reached Libya, I might add.
  The China Aerospace Science and Technology Corporation, which was 
sanctioned by the U.S. in August of 1993 for missile proliferation 
activities, designed and researched propulsion systems, among other 
things. Russia aided Iran with the design of guidance and propulsion 
systems, some of which found their way into the Shahab 3 and Shahab 4 
ballistic missiles for Iran. There are a variety of examples that I can 
give you.
  Reentry vehicles--we are familiar with those--for both commercial and 
military applications. These, too, would be subject to the provisions 
of this legislation.

  And I hate to talk about China again, and I wish we didn't have this 
debate right now. Chinese engineers were arrested for trying to steal 
some blueprints from a plant in the Ukraine. Yet these very items would 
be subject to sale because they are produced by a variety of countries 
and have dual applications.
  Without getting into a lot of detail, I will indicate the nature of 
some of these other activities or products. Propellant additives, 
propellant control systems, propellant production equipment, radar 
software--you can easily understand why that could be a dual item--
radiation-hardened computers. The applications here for military use 
are obvious.
  Ramjet engines: The military applications there, I think, are fairly 
obvious; rocket motor mounts and sounding rockets as well. These all 
have to do with space, and also aircraft, such as airborne radar, 
navigational systems, depleted uranium, fly-by-wire flight control. 
Obviously, that is the way our commercial aircraft is now designed. It 
is also a very important military design. We have various kinds of 
noise reduction and acoustic mounts and valves and other kinds of 
things that are used in quieting for the Navy, primarily.
  Precision tracking systems: We are all familiar with how we are able 
both in civilian and military applications to precisely track using the 
global system. Yet many of those items would also be covered by this 
legislation and no longer require license: side-looking airborne radar, 
sonar signal processing equipment, underwater breathing apparatus, wind 
tunnel applications.
  Mr. ENZI. Will the Senator yield for a question?
  Mr. KYL. Yes.
  Mr. ENZI. Mr. President, is the Senator aware that we are not doing 
away with the control list and any item on the list continues to stay 
on the list unless it goes through the process? Is the Senator aware 
that we have added country tiering so that rogue states are taken care 
of that way?
  Mr. KYL. Yes. Is China defined as a rogue state in the legislation?
  Mr. ENZI. It could be.
  Mr. KYL. But it is not.
  Mr. ENZI. It doesn't say any particular state.
  Mr. KYL. I answer the Senator that I am aware that the items are not 
automatically decontrolled. But by virtue of what I talked about 
before--and I think the Senator was here--because of availability for 
commercial purposes, the items will also be available under the dual 
technology regime that is contemplated by the legislation.
  Mr. SARBANES. If the Senator will yield, the legislation specifically 
gives the President the authority to continue to control any item. I 
don't think the items the Senator is listing would be mass market items 
under this legislation. But even if one or a few were to be sold 
classified, the President has the authority under this legislation to 
deny that category and to continue to control the item.
  Mr. KYL. First of all----
  Mr. SARBANES. I don't understand.
  Mr. KYL. Does my colleague want an answer to his question?
  Mr. SARBANES. There are examples that happened under the previous 
regime. This bill will actually improve the regime.
  Mr. KYL. The Senator has mischaracterized what I said. I pointed out 
a couple of instances in which these items got into the wrong hands in 
the past. But under the previous law, we had the ability to pull them 
back. I did cite some examples. We would not have that authority under 
the legislation as the Senator has written it. Moreover, I am perfectly 
aware that many of these items would not necessarily be mass marketed. 
Yet every one of them would be subject to the definition of 
availability, foreign availability, or U.S. availability.
  That is precisely why I picked these items because under any 
reasonable definition, you would have to say, yes, those are available 
someplace. Now, if the Senator is telling me some of those look serious 
and I don't think we would want to consider them available, then I say 
we have to be more careful about how we draft this legislation.
  On that point I agree with the Senator, but as to the first point, 
the Senator raised the suggestion--I heard it made several times: The 
President has the authority to waive this. No, the President does not 
have the authority to waive this. The authority is very constricted. 
The President, and only the President--as if he did not have anything 
else to do--can three times for 6 months only, for a total of 18 
months, waive the applicability of that section.
  Mr. GRAMM. That is not right.
  Mr. KYL. That is absolutely correct, and I would be happy to cite the 
provision of the legislation. To think it is going to work very well--
--
  Mr. SARBANES. Would the Senator do that for us?
  Mr. KYL. To think it would work very well to have a regime in place 
where the President is going to have to continually be waiving its 
requirements I think is going at it the wrong way.
  Therefore, while it is important for any President to have a waiver 
component--we frequently have national security waivers of one kind or 
another--if you set up the presumption that it is going to be sold and 
require only the President to stop it, you are going to be putting a 
pretty big burden on him.
  In the past, the presumption has been effectively the other way. Part 
of this is due to the fact that there is no really clear way of 
defining availability. I talked to that before the Senator arrived.
  Mr. President, my colleague from Wyoming may wish to join in this. If 
so, that is perfectly fine with me. I stand corrected. The 
authorization for this current extension of the EAA runs through a date 
in August--August 31?
  Mr. ENZI. August 20.
  Mr. KYL. Not October. We will either have to pass a resolution 
extending the date beyond that, which I presume would be relatively 
easy to do, or act on the reauthorization of the EAA in some form prior 
to that time.
  Frankly, that is fine with me. As I have said now several times, the 
effort of the Banking Committee to rewrite this legislation in light of 
changed circumstances in the last decade is a laudable effort, and 
there are a lot of changes that need to be made in the legislation. 
There is no argument about that. That, frankly, is what President Bush 
campaigned on and what he said he was for. That is perfectly 
appropriate.
  We are talking about details. It is evident that reasonable people--
or at least I hope the chairmen of these committees would be deemed to 
be reasonable; certainly my friends in this administration are 
extraordinarily competent on these matters. I believe with a little bit 
of time reasonable people will be able to resolve whatever differences 
exist. I know some are not quite that sanguine about those prospects.
  I also am aware of the fact that the administration has an idea which 
is a good one. That is, not everything in this regard ought to be put 
in the legislation itself, which can become relatively inflexible. As 
we have seen, it is a little bit harder to change than an 
administrative action. Therefore, the administration has in mind 
developing an Executive order that would implement this legislation and 
related legislation in such a way as to provide the President with a 
little more flexibility to handle particularly those situations that 
arise very quickly.

  The shelf life of some of the equipment we are talking about is very 
short, and therefore sometimes there may be a need to act with 
alacrity. Under the provisions of the bill, it may be too slow, though 
they intend to speed it up.
  There are also intelligence considerations which I cannot go into at 
this

[[Page S3959]]

point, but they, too, can be dealt with by means of an Executive order.
  I applaud those members of the administration who raised this as a 
possible way of dealing with some of these issues. The fact is they 
have not had time to do this, and I fully appreciate that. Those of us 
who have concerns about the legislation would very much appreciate the 
opportunity to await the drafting of that order. As I said, I suspect 
that will remove many of the concerns some of us have just about the 
bill itself.
  That said, I go back to the point I made in the beginning, which is, 
this is the wrong time to bring up this legislation.
  I also, again with some trepidation, make the following point: Some 
of my colleagues have said: Look, bringing it up now actually helps you 
because you are able to talk about a situation that has rubbed the 
American public pretty raw these days, and that is a belligerent and 
overly hostile China. In fact, China has obtained a lot of its 
technology in the past, not all of it properly so, as pointed out 
before. So actually this is a good time to bring this up because you 
will be at your strongest in arguing we should not be passing this 
legislation right now when it could only make it easier for China to 
obtain this equipment.
  At the same time, some of these folks say: Look, this legislation is 
actually tighter; it is more strict; it is more conservative than ever 
in the past. We are actually tightening the law; we are enhancing 
national security. Mr. President, you cannot have it both ways. It is 
my view the legislation is not tight enough, that it could result in 
technological acquisition by countries that would use that technology 
against the United States and that we do not want to do that; there are 
ways to prevent that.
  Our argument is over some relatively narrow points. If we appreciate 
that, then we can also appreciate that it is possible to come together 
on those, come to closure on those without necessarily engaging in a 
great long public debate which I really do not think serves anybody's 
purpose at this point in time, especially given the circumstances that 
exist with respect to our current relationship with China.

  My hope is the authors of the legislation on this Thursday afternoon 
will say, all right, let's talk about this for a little bit, get a date 
certain to bring up the legislation, and see what additional fixes are 
needed, if necessary, and get additional amendments that might be 
offered so we can persuade colleagues, if there are certain changes to 
make, we can do that and take it up at a time when perhaps nerves are 
not quite as raw.
  Frankly, I fully expect the administration to engage at that point in 
time because they have a great deal of expertise and they are all 
people whom I know people on this side of the aisle respect a great 
deal. So we will be taking their views very much into consideration.
  That is my hope. I hope our leadership will focus on elements of this 
President's agenda of which everybody on our side of the aisle is very 
much in favor, including this tax cut and education proposals.
  By virtue of the fact I had to be on the floor, I missed discussion 
of the tax proposals that I very much hoped to attend because we are 
trying to put together the final package that will effectuate President 
Bush's campaign promise of tax relief for all Americans. I hope we can 
take that up next week. If not, we will take up education reforms next 
week and take the tax bill up the week after that.
  If we are stuck debating the Export Administration Act, all of that 
gets delayed. That is not good for the American people. My hope is the 
authors of the legislation will be willing to work with us and defer 
this until we take care of these other items that are a little bit more 
important, in my view, and then come back to this with plenty of time 
to do it prior to the time the authorization expires. If need be, we 
can clearly do a temporary resolution extending the time of the EAA 
until we are able to act upon it later this year.
  With that, I relinquish the floor at this time.
  The PRESIDING OFFICER (Mr. Fitzgerald). The Senator from Wyoming.
  Mr. ENZI. Mr. President, I need to answer some of the items that have 
been raised. I appreciate the Senator correcting the date on which the 
present extension of the EAA runs out. I know that confusion came from 
me. I am involved in another bill with a sunset at a later date, and I 
mentioned the wrong date. August 20 is the drop-dead date on the Export 
Administration Act.
  Can we extend it again? It was extended last time under a unanimous 
consent agreement in both Houses. That won't necessarily happen again. 
Unanimous consent is not the easiest thing to get. We were running out 
of time under appropriations last time and believed that was an 
appropriate action to take. However, it is not necessarily the same 
action that will be taken again.
  We are running out of time to solve the export administration 
problem. Education will be coming to the floor. I am on the Health, 
Education, Labor, and Pensions Committee. We did the education bill. It 
actually went through committee faster than any other ESEA bill of 
which I am aware. Normally it takes a couple of weeks for debate. It 
went through the committee in 2 days. Normally the bills come out of 
that committee along party lines. It came out unanimously. There are 
still details on which to work.
  I think we will have an Elementary and Secondary Education Act 
reauthorized shortly. I would not want to stand in its way. However, it 
is not ready or we would be debating that now. There are still details 
being worked out.
  That leaves a window. It was mentioned that taxes need to be debated. 
I am one of the proponents of the tax cut and have been working 
steadily to get that and would not stand in the way of a tax cut. 
However, the tax cut isn't ready for floor debate. It will be.
  Education will be ready. Taxes will be ready. And then something else 
extremely important to this country--appropriations will come out. We 
have to pass 13 appropriations bills. That is supposed to be over by 
October 1, but that usually takes us well into October, sometimes into 
November. That is past October 20, without an opportunity to do this 
extensive debate that is purported to be needed.
  One of the things we have done is killed 4 hours--not really 
``killed'' because everybody needed to make their statement and get 
their stance out on the Export Administration Act. I am glad we have 
done that. From this point forward, the time we are taking is time we 
could actually be debating these amendments.
  I have had some Members on the other side say, we know what will 
happen to those amendments. That is how education works around here. If 
you don't have the majority of the vote, you lose on your amendment. 
There is a point to which people see amendments as being reasonable and 
helping national security, but there is a point where they see it as 
stopping all trade.
  There is a balance. We still intend to be a country that has a good 
economy--not just a country that is militarily capable of being the 
best in the world. This bill has been a deliberate and timely attempt 
to reach that kind of situation.
  What we need is the amendment suggestions through the debate process. 
I submitted the list earlier. It is in the Record. You can look at all 
the meetings we have had--probably not all of them, but the ones we 
recorded as having. Those produced the suggestions in this bill.

  Now a perfect bill will prevent any law from being in place. There 
isn't such a thing as a perfect bill. When I was legislating on the 
State level, as well as here, I had a pretty good idea when I was 
holding hearings on a bill that there was somebody in the audience who 
knew a loophole to that bill and they were not about to share it until 
they had taken advantage of it. However, we hope to catch as many of 
those as possible when it is being considered. That is why we have 100 
people, we have 100 different opinions--at least 100 different opinions 
from 100 different perspectives contributing to a bill.
  When we debate whether we go ahead and debate, we are not making any 
progress toward a final solution.
  On the China issue, there probably isn't a time that could be more 
sensitive. But the ones who are talking about greater security than 
what this

[[Page S3960]]

bill provides would have it to their advantage to talk about it because 
of the timing of the situation with China.
  We don't have any problem debating it. We don't have any problem 
considering amendments to this bill, even in light of the China 
situation. The reason we don't is that we are sure we have addressed 
those issues. If we missed something, we need to know about it and take 
action.
  Everybody keeps saying there are a very small number of items that 
need to be regulated. How do we go about doing that? Give me a 
suggestion if you have one other than the way we are doing it.
  There was a comment that there is a new regime, that we are talking 
about things readily available in either foreign or mass markets; that 
these other countries have access to all of those things and we will 
give up all of our control. Not true. We have tried to address keeping 
control in every possible way. There still will be a control list. We 
didn't get rid of the control list. The wording in the bill says any 
item that is controlled now will continue to be controlled until the 
committee makes a decision otherwise. So if it is controlled now--and a 
bunch of the items mentioned were controlled and were against the law, 
but they were done anyway.
  How did somebody get away with that? I imagine things will still be 
done illegally no matter what kind of bill we pass because we don't 
handle ethics and morals; we just handle the law.
  One of the problems we have under the law is, for about a 6-year 
period we did not have sufficient findings to get anybody's attention 
of the fines and penalties and prevention, more so than beating 
somebody up after it happens--although that has to be there for the bad 
actors.

  We have a number in this bill that will get people's attention. For 
those people who are talking about this bill not having enough 
security, the last version, the one we could have done at the end of 
last year, had penalties that were twice as big, but we were asked to 
reduce those to get them more reasonable, to make it closer to what the 
munitions list has. If anything ought to have fines and penalties to 
get the attention of people, it ought to be the munitions list. We 
would not agree to go to that low a level.
  In fact, there is even jail time involved in this one. I think some 
of the those things are needed to keep people's attention. So we have 
tightened up the bill.
  We talked a little bit about Iraq. We have to trust that the 
administration will rate Iraq as one of those countries that should get 
a very poor rating under the tier system--the worst. I suspect they 
will. I will not dictate which ones ought to be the bad guys and which 
ones ought to be the good guys. I have been contacted by a number of 
countries that wanted to be specifically mentioned in the bill as one 
of the good guys. I said: No, the administration makes that decision 
based on your relationship with the United States and your involvement 
in making and selling weapons of mass destruction. We have some 
criteria by which you are considered a good country. I have no doubt 
the administration will adequately do that rating on those countries.
  That is something brand new, too. We did not have the tier system 
before. Now we have a tier system so countries that are adverse 
countries will not get items. We have a control list so that items we 
do not want people to get they cannot get. So some countries are going 
to be prohibited both for being on the control list and being a country 
to which we will not sell that kind of item. I do not know how you 
could make it tighter than that.
  Then--and this was at the suggestion of the people who are asking we 
not be allowed to go ahead and debate this motion--that the President 
be able to have total control over absolutely any item that can be 
sold. This is a Presidential enhanced control. Yes, it says the 
President has to do it. We know the President will get a suggestion 
from somebody along with all the backup reasoning on why it ought to 
happen. Some of those decisions will be pretty pro forma. I do not 
think we are talking about a huge expenditure of time on the 
President's part. On those items that are really a national security 
issue, I hope the President is personally and timely involved.
  But the President can control absolutely everything. How much 
documentation, how much review does he have to do? That is for a little 
transparency, so we know what is being controlled. But the President is 
the ultimate authority on all of it. We have given him that 
constitutional right. We have now put it in writing.
  We also have some extra control authority, which are on page 183 of 
this little document that is on every single desk for the end use and 
end user controls. And then the most important paragraph, the enhanced 
controls. So if somebody has a suggestion on how to make it tighter 
than that and still be able to sell to our allies the things that we 
want our allies to have that would be beneficial to them and to us, 
tell me how to do that; present an amendment.
  Of course, we cannot present an amendment until we get past this 
debate about how long we are going to debate about whether we get to 
debate.

  I have been here before on this bill. I have to say it is a lot 
easier to defeat a bill than it is to pass a bill--I noticed that 
through my legislative career, as well as my senatorial career--because 
if you create a little confusion, confusion goes a long way.
  We have heard a lot of confusion. I think we can address everything 
that has been mentioned to this point. We can show where it has been 
covered in the bill. But it is easier to defeat a bill. I have to say 
in the Senate it is even easier than that because we have this thing 
called filibuster and that is where you stop the motion to proceed and 
have people debate on whether to debate for a long period of time.
  I understand the other side understands how many people there are who 
have been working on this bill, been involved in this bill, who will 
vote for this bill. If we file cloture, we will get cloture. It is just 
a long process and a way of delaying it. But it is a route that can be 
taken.
  We had the signatures for that last year but ran out of time. I only 
mention this time again to get back to the original point, which is 
August 20 is when the bill runs out. If we have not solved it by that 
time, we may not be able to solve it. So I ask that we get past this 
motion to proceed.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Oklahoma.
  Mr. INHOFE. Mr. President, reluctantly I rise to differ with my good 
friend from Wyoming. I come from the perspective of chairing the 
Readiness Subcommittee of the Senate Armed Services Committee. I have 
looked carefully at some of the problems over the last 8 years in a 
couple of respects. First of all, we are dramatically and grossly 
underfunded in most of our accounts for our military relative to the 
threat that is out there. We have gone through a difficult time with 
China and hopefully it is coming to an end now. If we go back to 1995 
when we started getting some of the very first comments made by the 
Chinese that have been very threatening to the United States, it was 
during the elections not long ago in Taiwan when the Chinese were 
demonstrating their missiles in the Taiwan Strait and the statement was 
made ``we are not concerned about the United States coming to the aid 
of Taipei because they would rather defend Los Angeles.'' That is at 
least an indirect threat.
  Most recently there have been statements made from more than one high 
Chinese official saying war with America is inevitable. Over the last 8 
years, we found that half of our nuclear secrets--we had a total of 
16--were compromised during the Clinton administration, 8 of them were 
compromised prior to the Clinton administration. We found out in 1999 
that way back in 1995 the other 8 nuclear compromises took place. There 
was an informant who came in, in 1995, and informed us these 
compromises had taken place. This was covered up, I am sorry to say, by 
the administration until the Cox report discovered it and released it 
in 1999, 4 years later.
  We look at those things that have taken place, the transfer of 
technology to the Chinese, and we now see a massive military buildup by 
the Chinese. This is the same country that is saying war with America 
is inevitable. We know they made some purchases of SU27s and SU30s. 
They will have aircraft that is better and more modern

[[Page S3961]]

air-to-air aircraft than anything we have in our arsenal, including the 
F-15. We are looking at a percentage of their budget that is going now 
to buildups. We also know they have virtually all--at least those 16--
of our nuclear secrets.

  We have been facing also, during the Clinton administration, the 
signing of waivers. In order to make it easier to transfer technology, 
they took the waiver process out of the State Department and put it 
into the Commerce Department, only to reverse that later on when we 
found out that many of the transfers had taken place.
  We remember regretfully the time President Clinton signed a waiver to 
allow the transfer of guidance technology that was produced by the 
Loral Corporation. That is something that would be very dangerous for 
the other side to have.
  Considering what little we do have left in terms of technology, I 
cannot imagine a worse time in our Nation's history to be making it 
easier to transfer technology from a pure national security standpoint 
than right now. So I am hoping my colleagues will look at what has 
happened over the last 8 years, look at what has happened over the last 
2 weeks, and come to the conclusion that maybe this is a good idea for 
sometime in the future. It is not a good idea for this time.
  I yield the floor.
  Mr. ENZI. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. THOMPSON. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. THOMPSON. Mr. President, we have had considerable discussion 
about the President's authority under this proposed legislation. The 
point has been made that we have a fail-safe provision--that the 
President can always intervene and stop some item from being exported 
that should not be exported. But I think if you examine the 
legislation, you would have to conclude that through this legislation 
the drafters have made it difficult for the President to intervene and 
step in under those circumstances even in matters that constitute a 
threat to the national security.
  If you look at section 212, which gives the President the right to 
set aside the foreign availability status--as you recall, under this 
legislation, something that heretofore has been controlled required a 
license. If there is a determination made by the Commerce Secretary 
that it is a matter of foreign availability under the criterion that 
they come up with, it will be decontrolled. They will be able to send 
it to China, Russia, or any of the other what have been tier III 
countries in times past. But there is a provision in here that the 
President can step in and exercise a set-aside.
  Here is what the set-aside language says. It says if the President 
determines that decontrolling or failing to control an item constitutes 
a threat to the national security of the United States, and export 
controls an item which advances the national security interests of the 
United States--I will skip some of what I don't think are particularly 
pertinent provisions--it says the President may set aside the 
Secretary's determination of foreign availability.
  Then it goes on to say that the President may not delegate the 
authority provided in this paragraph.
  In the first place, we make it so that the President and only the 
President must deal with this matter, considering all the matters that 
he has to deal with, especially as I would again point out while he is 
trying to build his administration and while he is trying to get his 
people in place.

  Then the act goes on to say that the President shall promptly, if the 
President chooses to use their nondelegation authority, notify the 
Congress. He shall promptly report any set-aside determination as 
described along with any specific reasons for the determination to the 
Committee on Banking, Housing, and Urban Affairs of the Senate and the 
Committee on International Relations in the House.
  In other words, if the President chooses to intervene for reasons of 
a threat to national security, he must justify that to the Banking 
Committee and to the Committee on International Relations in the House. 
Then he must publish the determination in the Federal Registry.
  That is not all the President has to do. Then the President has to 
engage in negotiations with foreign powers. It says in any case in 
which the export controls are maintained on an item because the 
President has made a determination under subsection (a), the President 
shall actively pursue negotiations with the governments of appropriate 
foreign countries for the purpose of eliminating such availability.
  It may be a desirable thing. It might have been a desirable thing to 
negotiate with foreign countries even before somebody wanted to export 
something under this act to get them to try to do the right thing. But 
do we want to require the President to enter into negotiations with 
foreign countries? I assume we can do that under the separation of 
powers doctrine, if we choose to do so. But it is a rather significant 
step--all, again, under the rubric of the conditions that the President 
must comply with if he is going to step in and exercise this authority 
that we say he has to stop something from being sent abroad that 
constitutes a threat to the national security of this country.
  That is not all the President has to do. It says he then has to 
report to Congress. Not later than the date the President begins 
negotiations, the President shall notify in writing the Committee on 
Banking, Housing, and Urban Development of the Senate and the Committee 
on International Relations in the House of Representatives that the 
President has begun such negotiations, and why the President believes 
it is important to the national security that the export controls on 
the items involved be maintained.
  Again, the President is required not only to enter into negotiations 
but to justify to the Senate Banking Committee and to the International 
Relations House Committee as to why he thinks this is important. But 
that is not all that we impose on the President if he wants to 
intercede on behalf of national security because of a threat to the 
Nation.
  There is a periodic review of determination provision. It says the 
following:

       The President shall review a determination described in 
     subsection (a) at least every six months.

  Here he has made this determination that this item constitutes a 
threat to the national security, and now he must review it every 6 
months. Promptly after each review is completed, the Secretary shall 
submit to the committees of Congress a report on the results of the 
review together with the status of international negotiations to 
eliminate the foreign availability of the item.
  Again, the President has to make the review every 6 months. Then the 
Secretary has to go back to the committee and give them a report about 
the review, and then the status of negotiations. The President, through 
his representative, has to give the committee a status of these 
negotiations that have been imposed on the President.

  But that is not all we require the President to do in order to 
intervene on behalf of national security.
  There is an expiration of Presidential set-aside time. It says the 
determination by the President described in subsection et cetera shall 
cease to apply with respect to an item on the earlier date--that is 6 
months after the date on which the determination has been made--or if 
the President has not commenced international negotiations to eliminate 
the foreign availability of the item within that 6-month period; B, the 
date on which the negotiations described in paragraph 1 have terminated 
without achieving an agreement to eliminate foreign availability; C, 
the date on which the President determined that there is not a high 
probability of eliminating foreign availability on the item through 
negotiation; or D, the data is 18 months after the date on which the 
determination described in subsection et cetera is made if the 
President has been unable to achieve an agreement to eliminate foreign 
availability within that 18-month period.
  In other words, after setting up all of these obligations on the 
President, in

[[Page S3962]]

order for him to intervene on behalf of national security because of a 
direct threat to this country, the determination that has been made 
will go away and the thing can still be shipped unless he complies with 
the provisions I just read--if at the outside it is an 18-month time 
period, unless he can report back that they have concluded their 
negotiations successfully.
  So then it says:

       Action On Expiration Of Presidential Set-Aside.
       Upon the expiration of a Presidential set-aside under 
     paragraph (3) with respect to an item, the Secretary shall 
     not require a license or other authorization to export the 
     item.

  Then we get to the final point. If the President, after going through 
this process, has not followed each of these items in any way, then the 
item is still shipped even though he originally made a determination 
that it constituted a threat to national security.
  My point is this. I do not particularly object to any particular 
provision. I have not thought about it enough, quite frankly. I did not 
realize yesterday we were going to be having this debate in this much 
detail. But my point is this. Clearly, we are making it kind of tough 
on the President to intervene on behalf of national security, even when 
there is a threat to the national security of the United States.
  He is going to look at this--and somebody on his behalf, hopefully, 
will look at it beforehand--and look at the onerous requirements, 
including entering into negotiations with foreign countries, reporting 
requirements time after time to congressional committees and 
certifications, in effect, as to what they are doing, giving up-to-date 
reports on how negotiations are going.
  The President has to make the determination himself because under the 
act you cannot delegate. He has to do it himself. This is a burden on 
the President. While it is true that the President, under some 
circumstances, can intervene on behalf of national security, it is not 
an easy path for the President to take. That has to do with regard to 
matters of foreign availability status.
  There is another section--I am not going to put you through the 
entire section 213, but there is another section called the 
``Presidential Set-Aside Of Mass-Market Status Determination.'' So even 
though there is a determination that an item is mass marketed in this 
country:

       If the President determines that--

  And I am reading from the provision--

     decontrolling or failing to control an item constitutes a 
     serious threat to the national security of the United States, 
     and
     export controls on the item would advance the national 
     security interests of the United States, or [et cetera]
     the President may set aside the Secretary's determination of 
     mass-market status with respect to the item.

  Why it requires a threat to national security under the foreign 
availability set-aside, and a serious threat to the national security 
for the mass-market status determination, I do not know. But there is 
that distinction.
  So here, even more than was applicable in the preceding discussion we 
had, it focuses our attention on a matter where the President of the 
United States could make a determination that something is a serious 
threat to the national security and still ``[i]n any case in which 
export controls are maintained on an item . . . the President shall 
promptly report the determination.''
  He must give reasons for the determination to the committees that I 
just mentioned and ``shall publish notice of the determinations in the 
Federal Register not later than 30 days after the Secretary publishes 
notice of the Secretary's determination that an item has mass-market 
status.''
  The President shall review a determination made under subsection (a) 
at least every 6 months.

  Here is a President who has made a determination that something is a 
serious threat to the national security of our country, and we, as a 
Congress, require him to review that because we want to make sure the 
President did not make a mistake and say something was a serious 
national security threat when it was not, presumably. He is required to 
review it every 6 months. I quote:

       Promptly after each review is completed, the Secretary 
     shall submit a report on the results of the review to the 
     Committee on Banking, Housing, Urban Affairs of the Senate 
     and the Committee on International Relations of the House of 
     Representatives.

  So, again, my point is not that there is anything intrinsically wrong 
with any particular part of what I just read. It is that clearly this 
legislation is designed to make things more easily subject to export. 
It is clearly designed to decontrol even to the point where we give the 
President authority to step in. We are setting up several steps for the 
President to go through over a period of time before he can do that.
  So I want to make sure anyone who might be listening to this 
understands that, yes, the President can step in under some 
circumstances with regard to certain determinations but that he cannot 
snap his fingers, and he cannot pick up the phone, he cannot write out 
a memo; he has to go through a procedure that is a long-drawn-out 
procedure involving several steps if he wants to do that.
  One of the things we are going to have to ask ourselves when we deal 
with this in a little bit more detail is whether or not, in matters 
involving a serious threat to this country, it is so important for us 
to lower the export standards that we are not willing to give the 
President a little more leeway, that maybe even if he justifies it to 
Congress and we do not agree with him, are we not willing to give the 
President perhaps a little more leeway in making a determination that 
under the words of the statute is a serious threat to our national 
security?
  That is a serious question. That is one question that we are going to 
have to answer. That gets back to why we are in this Chamber today. We 
are still on a motion to proceed today. That is why we do not believe 
it is appropriate to notify us 24 hours in advance, and to try to push 
for a resolution of this matter in such a short timeframe, when 
amendments have not been fully drafted, when the Executive order that 
the administration is working on has not been drafted.
  These are serious matters, serious questions. I may be overly 
concerned about what I just talked about. I am not sure. I have not had 
a chance to really digest it. All I know is that it is not enough to 
say that the President can step in and, lickety-split, there is no 
problem; he has taken care of the problem. It is not that simple at 
all.
  Mr. KYL. Will the Senator from Tennessee yield for a question?
  Mr. THOMPSON. I am delighted to yield.
  Mr. KYL. Apart from the steps the President has to take if he is 
going to obtain this national security waiver, so that the item would 
be controlled, how long does that order last? And isn't there a 
limitation so that he can only issue that three times, for 6 months at 
a time, after which the President no longer has any control? In other 
words, the longest period of time he can control an item is 18 months. 
And after that, even the President has no authority.
  Mr. THOMPSON. That gets back to the provisions in subsection (3) (A) 
(B) (C) and (D) on pages 200 and 201 in the document I think we are all 
looking at. It talks about the expiration of the Presidential set-
aside. It says: ``A determination by the President described in 
subsection (a)(1)(A)(i) or (ii) shall cease to apply with respect to an 
item. . . .'' and it sets up conditions under which it ceases to apply 
with respect to the earlier of several dates. The Senator is right, 
there is an 18-month maximum period.
  If some of these things happen earlier than 18 months, it would cease 
to apply then, as I understand it.
  Mr. ENZI. Will the Senator yield for a question?
  Mr. THOMPSON. Yes, I will.
  Mr. ENZI. I am beginning to see the problem. We have ignored page 183 
which is the section that, when we went through those extensive 
negotiations, we added that supersedes all of these 18-month, 6-month 
paragraphs about which we have been talking. Those are options. But 
undoubtedly the option the President would take would be the one on 
page 183, which allows the President to override anything in section 
204, which are provisions that deal with components we have heard about 
earlier, and 211, which is the foreign availability and mass market 
status determination. This is a much easier section for him to use.

[[Page S3963]]

  It does mention significant threat, but the President gets to 
determine significant threat. Nobody has the right anywhere in this 
bill to override whatever the President thinks. There is a reporting 
requirement, but that is all it is. He reports to the committees that 
have some jurisdiction on foreign availability and mass marketing. It 
doesn't say that the committee can challenge anything he says.
  There is no recourse for the Congress other than knowing that he did 
it, and we asked for the transparency through the process. That 
paragraph overrides, at your request, the sections on foreign 
availability and mass marketing. I was hoping that had taken care of 
the problem and was of the understanding that that did eliminate the 
problem.
  Mr. THOMPSON. This is very good, if I may respond. We did indeed talk 
about this. I was interested to see whether or not it was your view 
that this provision you just described did in effect override what I 
just read. If so--and I ask the Senator if he will agree with me--are 
these pages I have been discussing with regard to criteria for 
Presidential set-aside under 212--does that not make those requirements 
under 212 superfluous or irrelevant, and in what case would 212 apply 
when the enhanced controls provision would not apply?
  Mr. ENZI. We had the language in section 212 in the versions when we 
were discussing it before. The President could use that. It is a 
mechanism. We thought that that provided Presidential control, even 
before we had our discussions. But we were specifically asked for 
sections 204 and 211, that we do something that was more overriding and 
more comprehensive, and we did.
  Mr. THOMPSON. But 212 is not discretionary. The language of 212, and 
in certain important respects, requires the President to do certain 
things--the President shall actively pursue negotiations, et cetera. So 
if the language remains there, it is mandatory language, and it seems 
there might be some inconsistency there. I am wondering whether or not 
one of the things we might talk about is maybe paring this thing down a 
little bit in terms of some of this language in that it does appear--if 
my friend agrees that the enhanced control provisions are overriding. 
It does appear that this language would be superfluous and, if it 
remains, would be contradictory. I am wondering if perhaps that would 
be the basis of some discussion.
  Mr. ENZI. It wasn't our intent to make it contradictory, but it was 
language that was already in there. The request was to override those 
sections, and we did that by putting in another one. Perhaps there 
could be a way to address this.
  Mr. THOMPSON. With all due respect, I suggest there is more to it 
than that. It is not a matter of shortening it or making it more 
difficult. We have one provision here that says the President can 
intervene and override, in effect, if he goes through several steps, 
including negotiating with foreign countries. Then we have another 
provision--although the standard is a little bit different--that lets 
him do the same thing without going through all those steps.

  Mr. ENZI. The criteria you mentioned of foreign availability is 
current law. That is what the President is forced to do at the moment.
  Mr. THOMPSON. I am not saying I necessarily object to any portion of 
this. I am saying there is an inconsistency here.
  Mr. ENZI. We were trying to get the administration, whatever 
administration it was, to work more on multilateral controls because 
everybody agrees that multilateral controls have more impact than 
unilateral controls. That is why we were encouraging the President to 
negotiate with the other governments to get them to fall in line on the 
controls so that we would have an effective multilateral control 
process as well. That was covered in the report we put out last 
Tuesday.
  Mr. THOMPSON. Well, I understand it might be desirable for the 
President to do that. For my part, I would rather leave it up to the 
President to decide when he wants to negotiate with foreign leaders on 
these matters.
  I will also suggest that when the President makes the determination 
under this enhanced control provision, that you just pointed out, that 
an item on one of these lists would constitute a significant threat to 
the national security, he ought to be given quite a bit of leeway. It 
might be a good idea to negotiate with foreign leaders; it might be a 
good idea to do a lot of things. We have to ask ourselves how many 
hoops we want the President to jump through if, in fact, he makes a 
determination that it constitutes a significant threat to national 
security.
  I am not trying to negotiate the details of the bill with my friend 
today. This is one of the benefits of discussing this today and one of 
the reasons we are not ready to put a bill to bed. I don't claim to 
have all the answers to it. I haven't had a chance to think all the 
details through. But I believe we really need to ask ourselves how many 
hoops we want the President to have to jump through before he can 
exercise some authority when he makes a determination that there is a 
significant threat to the national security.
  All these requirements I read a while ago having to do with the 
President negotiating, with reporting to Congress, having the thing 
expire--it even expires under that set of provisions--that is greatly 
different from the enhanced control provision that doesn't put any of 
those requirements on him if he determines that there is a significant 
threat to national security.
  We don't want a court 2 years from now having to be the one to decide 
what we meant when we drafted this legislation. We need to decide here 
in this Chamber, after thorough debate and consideration, just exactly 
how that ought to be worded and whether or not we want to have what 
appears to me to be inconsistent provisions in the legislation.
  I thank my friend for his comments. It is the basis for some 
discussion, as far as I am concerned, in an attempt to reach some 
resolution. I was not aware we were going to debate all the details. I 
welcomed the opportunity to have done that. The issue before us today 
is whether or not this is the right time, in the midst of everything 
that is going on in the country right now and everything that is 
happening internationally, to choose to signal to the world that we 
want to liberalize our export policies with regard to dual-use, high-
tech, military-related items when we know the primary beneficiary of it 
is going to be China.
  It is not a good time, and that is the reason I join my colleagues in 
opposing the motion to proceed. I do look forward, when we have had a 
chance to draft our amendments and hopefully have had a chance to look 
at the administration's Executive order that is supposed to fill in 
some of the areas that are a little bit sparse, to coming up with an 
Export Administration Act that is reauthorized but one that does what 
the Export Administration Act was designed to do--not to balance 
commerce with national security but to protect national security and do 
those things that are reasonable.
  Nobody is intent on trying to protect things that are unprotectable. 
Nobody is intent on basing the legislation on yesterday's technology. 
Everybody knows that the world has changed. But that does not mean we 
should, without very careful consideration, change a policy we have had 
in this country for decades in terms of controlling those kinds of 
items and go to something that might sound reasonable and logical: The 
genie is out of the bottle; they can get it anywhere else; our friends 
will sell it to them; we might as well sell it to them. I am not there 
yet.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Arizona is recognized.
  Mr. KYL. Mr. President, I wonder if the Senator from Wyoming might 
respond to a question I have. As I read the bill, the section that he 
cited before, which relates to an override of sections 204 and 211, 
does not apply to section 213. Section 212 has to do with foreign 
availability, 204 deals with incorporated parts and components. The 
mass marketing section is 213.
  As I read the President's authority under enhanced controls in that 
section the Senator referred to, on page 183, it deals with sections 
204 and 211 only.
  Mr. ENZI. Section 211 covers both foreign availability and mass 
market status. You are talking about the set-aside of the mass market 
status.
  Mr. KYL. So the significant threat override authority would apply to 
any of the three items that we just talked

[[Page S3964]]

about--mass marketing, foreign availability, or component parts; is 
that correct?
  Mr. ENZI. Yes.
  Mr. KYL. I thank the Senator.
  Mr. ENZI. We are hoping that adequate information will be given to 
the Senate for their oversight and their understanding of what is going 
on. We have always wanted that.
  Mr. KYL. I thank the Senator for his information.
  Mr. McCAIN. Mr. President, I join Senators Thompson, Shelby, Kyl, and 
other members in objecting to the rushed consideration of the Export 
Administration Act of 2001.
  This legislation, which governs the exports of sensitive technology 
to overseas buyers, has critical ramifications for American national 
security. Republicans in Congress rightly raised grave concerns over 
the Clinton Administration's export control policies, which had the 
appearance of being linked to campaign donations, and which we know 
improperly enhanced Chinese and Iraqi military capabilities. This 
Republican Congress, and our Republican Administration, must ensure 
that our national security controls on sensitive exports prevent 
powerful technology from falling into the hands of those who would do 
America harm.
  This bill does not yet meet that threshold. Since the beginning of 
this year, six Senators, including Senator Kyl and the Chairmen of the 
Armed Services, Foreign Relations, Intelligence, Governmental Affairs, 
and Commerce Committees, have sought and continue to hope to work with 
the sponsors of this bill, and with the Bush Administration, to ensure 
that S. 149 strikes the proper balance between our country's commercial 
and national security concerns.
  I will save my specific, technical concerns about this legislation 
for the full floor debate on this measure, whenever it should occur. At 
this time, let me say that the bill's restrictions on presidential 
authority to regulate national-security related exports, the enhanced 
role given the Secretary of Commerce in the national security decision-
making process, and the liberalization of exports of all goods, however 
dangerous to U.S. security interests, that may be otherwise available 
for sale in the United States or overseas pose problems that need to be 
resolved before the Senate can properly address this legislation.
  As Chairman of the Commerce Committee, and as a strong supporter of 
free trade, it comes as no surprise to me that American businesses 
dominate world markets and have propelled the Information Age. Unlike 
businesses, however, we in this body have responsibility not only for 
the prosperity of this country, but also for its security in an 
uncertain and hostile world.
  Let's be clear, far less than 1 percent of total U.S. exports fall 
under the jurisdiction of the EAA. Within that small proportion of 
exports that are sensitive, we have an obligation to ensure that these 
goods are appropriately controlled so that the peace and prosperity we 
enjoy are not threatened.
  Have no doubt, our enemies, be they foreign nations or terrorist 
groups, have no qualms whatsoever with buying dual-use American 
products and putting them to military use. In this time of peace, let 
us work to sustain the dynamism of our economy while safeguarding our 
people by striking the right balance between the commercial and 
national security provisions in this bill. We have much work to do. 
That is why I join my distinguished colleagues in objecting to 
consideration of this measure until we have had the chance to prepare 
amendments and continue our work with the Administration to improve the 
bill.
  The PRESIDING OFFICER. The Senator from Connecticut is recognized.
  Mr. DODD. Mr. President, I don't want to interrupt the flow of 
debate. I have a matter I would like to discuss that doesn't pertain to 
the matter before us. I see my good friend from Virginia. He may want 
to comment on this debate. If that is the case, then I will yield for 
this discussion to go forward, since I don't want to necessarily 
interrupt the flow.
  Mr. WARNER. Mr. President, I have joined my colleagues for the 
purpose of contributing to the debate at hand. I think maybe I need 10, 
12 minutes. Much material has already been covered. I don't wish to be 
redundant, but there are some points I would like to make.
  Mr. DODD. I am happy to yield to my colleague from Virginia.
  The PRESIDING OFFICER. The Senator from Virginia is recognized.
  Mr. WARNER. Mr. President, I reflected, as I approached the Chamber, 
that in my 23 years in the Senate, I don't know if I have ever opposed 
my leader on a motion to proceed. But, reluctantly, I do so this time 
because of my fervent belief that the views I have and share with a 
number of my colleagues are in the best interests of our Nation's 
security. With that in mind, I have tried for over 2 years to work with 
my distinguished colleagues, who have been speaking for some time, to 
resolve disputes within this legislation.
  These disputes have cut to the very essence of how the United States 
plans to protect its national security in an era of rapid globalization 
and proliferation of technology--most particularly technology related 
to weapons of mass destruction.
  On many occasions over the past year, I have joined others and have 
thought that we were close to obtaining a resolution on how to proceed 
on this bill. But each time, details have derailed us, regrettably, and 
those details indeed have overwhelmed the ability to compromise. I say 
``details,'' but I think they are very important points.
  My goal has been to strike, together with others, the proper balance 
between national security and commercial interests. This is a 
complicated issue that cuts across the jurisdiction of six committees. 
Five committee chairmen with the responsibility for national security 
matters in this country are together on this issue. I think that 
carries a subtle message in and of itself.
  We have continuously expressed opposition to this bill in a 
respectful manner. I will not list the others because they are in the 
Record in the course of this debate. In addition, Senator Kyl, although 
not a chairman, has taken a leading role. He has sort of been the 
``Paul Revere.'' Each time this matter is approaching, he sounds that 
alarm and we respond.

  This is an effort that requires careful thought and deliberate 
action. All of our committees should be united in an effort to reform 
our export control laws. If we do not obtain that type of unanimity--
and I say this respectfully to my good friend from Wyoming and my good 
friend from Texas--we could be doing a disservice to our country.
  At the present time, I believe it is premature to move this bill 
through the Senate, for two very good reasons: First, we need to give 
the administration, our new President, sufficient time to provide 
Congress with the promised details on how it plans to implement this 
legislation. I know full well that it has been stated--and I believe it 
is factually correct--that the administration has contributed a number 
of suggestions--which I think is 21--in the Banking Committee. The 
distinguished manager of the bill is present, and they have 
incorporated all of those. But when I look at it and listen and talk 
with the administration, those areas in which we have special concern 
are to be brought forth in an Executive order.
  Very simply, we are just saying allow time for the administration to 
do the Executive order. Otherwise, we risk spending a lot of time on 
the floor with amendments if we should go ahead with the bill and 
proceed in addressing issues that may be better left to the discretion 
of the executive branch.
  Secondly, moving this bill at this time without establishing 
consensus sends a wrong signal and could complicate a very difficult 
and tenuous policy toward China, which is still evolving. I cannot 
think, therefore of a worse time to pass legislation that could result 
in an increase of exports of high technology to China. I think we 
should listen carefully to the people in this Nation on this issue. 
This China policy is not just reserved to the bureaucrats in 
Washington--I say that respectfully--the executive branch and the 
Congress. The people of this Nation have very deep-rooted concerns 
about our relationship with China, and this subject goes to the very 
heart of those relationships.
  I have serious reservations about bringing up the bill at this time, 
as I said. We are still awaiting specifics from the administration on 
how it will

[[Page S3965]]

implement this bill. We need to give the administration enough time to 
respond to our inquiries and deliver on their promises of additional 
information.
  The administration reviewed this bill at the request of myself, 
Senators McCain, Shelby, Thompson, Helms, and Kyl. We had one meeting 
with the National Security Adviser on this issue. While the review was 
conducted without the benefit of working level political officials in 
place with responsibility for export control issues, I am confident the 
administration did the best it could given the timeframes and the 
people with whom they had to do the job.
  Based on this review, the administration came up with a series of 
legislative changes that the Banking Committee included in its bill. 
This was a positive step, and I commend them. I support it, although I 
would have preferred this review take place with the benefit of the 
full administration package; that is, these amendments that have been 
adopted, together with other commitments that they have made to 
Congress on other issues.
  More remains to be done. We have not received specific comments or 
recommendations from the Department of Defense. That input, in my 
judgment, is critical. The Banking Committee's bill, including the 
changes made to the bill at the request of the administration, provides 
for even less protection for national security than changes proposed to 
us by the last administration.

  When the National Security Committee chairmen of the Senate were 
briefed on the results of the administration review, we were informed 
at that time that an interagency agreement had been reached on how the 
administration would enhance national security controls during 
implementation of the bill. We were then informed that the national 
security protections that we have sought would be included in an 
Executive order that would implement S. 149.
  Despite several inquiries on the part of my staff and others to get 
the information that we sought, we have not been able to get any 
specifics on what is in this interagency agreement or what might be in 
the Executive order.
  This information is critical in helping this Senator, and I think to 
not only the team we have put together, but many others, in order to 
make an informed judgment on this important piece of legislation.
  Therefore, I most respectfully urge our majority leader and sponsors 
of the bill to wait until we have more information from the 
administration about how it intends to implement the national security 
protections.
  Many of my concerns, as well as those of my colleagues, may be 
alleviated by the details of the administration's implementation plan.
  If, however, we do not get an answer from the administration in a 
reasonable amount of time, I urge the majority leader to chair a 
working group of interested members to work to clear as many amendments 
as possible prior to taking the legislation up on the floor, so as not 
to waste a great deal of time.
  At this time, in the absence of additional information from the 
administration, I have fundamental concerns with this bill. This bill 
continues the trend of dismantling our export control structure. During 
the height of the cold war, this Nation had a carefully formulated and 
carefully crafted export control process. There was a consensus--both 
here at home and with our allies--that we needed to protect our 
Nation's technology. The bottom line: It must never be used against us.
  This consensus has broken down with the end of the cold war. 
Technology is proliferating, and this bill will continue that trend. If 
our pilots are shot down over Iraq or put in harms' way due to enhanced 
communications and computing technologies that enhance Iraqi air 
defense capabilities, we need look no further than to the lack of will 
and leadership over the last decade to control this technology. While 
this proliferation of technology may be inevitable, we need to 
understand the implications of any decision that leads to freer trade 
in advance technology. With that understanding, we then must do 
whatever it takes to protect our soldiers, sailors, airmen and marines 
as they face these new threats.
  Since the fall of the Berlin Wall, we have witnessed a slow demise of 
the cold war consensus on export controls. I make three observations:
  First, we have seen a dramatic liberalization--primarily through 
Executive orders of successive Presidents--of export controls. We are 
only controlling about 6 percent of what we controlled during the 
height of the cold war.
  Second, because of the decline in defense R&D, technology innovation 
is primarily advancing in the commercial rather than the defense 
sector. This makes dual use export controls covered by the EAA even 
more critical in protecting our national security.
  Finally, as a result of both of these developments, we are witnessing 
the global spread of advanced technology that was once solely in the 
military realm. This threat will require a significant investment in 
defense capability to counter.
  Simply put, our export control policy has gotten out of balance. The 
Export Administration Act before the Senate, as currently drafted, tips 
the balance even further toward meeting commercial needs versus 
national security needs. There is a predominant emphasis in this bill 
on export decontrol, without, in my judgment, an adequate assessment of 
the national security impact of that decontrol. The bill now gives the 
Commerce Department the predominant role. I believe that this must be 
brought back into balance with enhanced DOD authorities and 
discretion. As now drawn, this bill also unnecessarily limits the 
President's discretion to control items for legitimate national 
security reasons.

  At a minimum, we must address in this bill:
  No. 1, the need to protect militarily sensitive technology. DOD and 
the intelligence community need to be able to protect sensitive 
technology from falling into the hands of potential adversaries. 
Technologies which, if proliferated, would undermine U.S. military 
superiority must be controlled. The national security agencies must be 
able to block any decontrol or export that might harm national security 
now or in the future. For example, hot section engine technology and 
other technologies that DOD and the intelligence community consider 
critical need to be protected.
  No. 2, the need to enhance the role of the Secretary of Defense and 
the intelligence community in the export control process, given the 
limited amount of items we are now controlling, and provide for a 
workable national security waiver for the President. At a minimum, the 
concurrence of the Secretary of Defense should be required in matters 
relating to which products should be controlled, the process for 
reviewing export licenses, the rules for any interagency dispute 
process, and regulations implementing dual use export controls; and
  No. 3, the need to ensure that the national security impacts of any 
proposed decontrol are well understood and articulated before 
decontrols are allowed to proceed. This assessment should be based on 
how this technology can be used as part of, or to develop, a foreign 
military or intelligence system or capability. Ongoing assessments need 
to be made to assess the cumulative impact of decontrols and the 
proliferation of technology.
  This last point is critical. Congress needs to look at the impact on 
national security of export decontrol and the global diffusion of 
technology. We need to assess the degree of technology proliferation 
that is occurring and the risk that our adversaries will use this 
technology to gain some type of asymmetric advantage over our forces. 
Global technology proliferation could put at risk our military 
superiority. Future historians may look back on the rapid decontrol and 
leakage of western technology as the biggest national security lapse of 
the post-cold-war period.
  I also want to ensure that unnecessary restraints on the ability of 
the private sector to compete in the global marketplace are removed. It 
is in our interest that U.S. businesses are able to maintain their 
commercial and technological edge over foreign competitors. However, 
when hard decisions must be made, national security must always be the 
paramount consideration.
  The PRESIDING OFFICER (Mr. SMITH of Oregon). The Senator from 
Connecticut.
  Mr. DODD. Mr. President, I came to speak on an education matter, but 
I

[[Page S3966]]

have enjoyed the last 45 minutes. I thank my colleagues from Tennessee, 
Virginia, and Arizona. I serve on the Banking Committee and have great 
respect for my colleague from Wyoming who chairs the subcommittee that 
deals with these issues.
  The committee had extensive hearings going back into last year. The 
Senator from Wyoming deserves a great deal of credit--I know my 
colleagues share these views--for his tireless efforts to bring forth a 
bill that reflects not only the desires of exporters, but also takes 
into consideration the very important national security issues that our 
colleagues from Virginia, Tennessee, and Arizona have raised this 
afternoon.
  The committee sent out this bill in March after seven different 
hearings with extensive testimony. I have been supportive of this 
effort.
  I say to my colleague from Virginia, that he raises some very good 
points. This is not a debate that is going to attract nightly news 
attention. It can get rather detailed, as the Senator from Tennessee 
pointed out when he started talking about various provisions and what 
is intended by them.
  As I listened, I clearly heard the spirit with which my colleagues 
raised these concerns, and they are concerns to which we should all pay 
attention. I know my colleague from Wyoming does. I, for one, thank 
them. I do not know what is going to happen with the debate. I hope my 
colleagues can address some of these concerns. Some amendments may be 
necessary. I suspect they will get broad-based support.
  So, I came over to give a speech about education and I got educated, 
myself. I thank my colleagues, and I appreciate the points they raise. 
They are very valuable. The point raised about China is worthy of 
valuable note.
  Mr. WARNER. Mr. President, I thank the Senator for his courtesies as 
always. It is a very simple equation. The bill got the attention of the 
administration. It is a new administration. Secretary Rumsfeld, for 
example, has in place today only three persons who have reached the 
full confirmation process and are now sworn into office. Six more have 
been processed by the advise-and-consent procedures of my committee and 
will come before the full Senate next week.
  The administration is struggling to put together this highly 
technical response. I think they should be given a reasonable period of 
time before we plow into a legislative process in this Chamber.
  Mr. President, I thank my colleague.
  Mr. DODD. Mr. President, I thank my good friend and colleague from 
Virginia.
  Mr. President, I am not going to take much time. I see my good friend 
from West Virginia who always has worthwhile information to share with 
this body. I see my colleague from Louisiana is here as well.
  I ask unanimous consent to speak as in morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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