[Congressional Record Volume 147, Number 102 (Friday, July 20, 2001)]
[Extensions of Remarks]
[Pages E1377-E1378]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


DEPARTMENTS OF COMMERCE, JUSTICE, AND STATE, THE JUDICIARY, AND RELATED 
                   AGENCIES APPROPRIATIONS ACT, 2002

                                 ______
                                 

                               speech of

                       HON. CONSTANCE A. MORELLA

                              of maryland

                    in the house of representatives

                        Wednesday, July 18, 2001

       The House in Committee of the Whole House on the State of 
     the Union had under consideraton the bill (H.R. 2500) making 
     appropriations for the Departments of Commerce, Justice and 
     State, the Judiciary, and related agencies for the fiscal 
     year ending September 30, 2002, and for other purposes:

  Mrs. MORELLA. Mr. Chairman, over the years we have heard a number of 
contentious arguments about the viability of the Advanced Technology 
Program (ATP). As a consistent ATP supporter, I understand these 
discussions are difficult to resolve and stem from fundamental 
questions about the proper role of government in the development of 
technology. While government should, and must, contribute to funding 
our basic research enterprise, there is fair ambivalence about the 
government taking on the role of private investors and picking the 
``winners and losers'' of the market by targeting funds to specific 
projects. While I also question the superiority of government over Adam 
Smith's ``invisible hand'' of the marketplace, I think this argument is 
severely flawed when it comes to ATP.

[[Page E1378]]

  The Advanced Technology Program is not public financing of 
established technologies. It should not be seen as speculative 
investment nor should its success be measured in the same economic 
terms as private investment. Framing the debate in these terms is 
fundamentally wrong and misses the point of the program. The ATP is a 
research and development program, not an exercise in government venture 
capital.
  The program seeks to provide a critical bridge for the ``funding 
gap'' from innovation to the marketplace of pre-competitive, emerging 
technologies. ATP seeks to smooth the transition from invention to 
commercialization, the so-called ``valley of death'' or ``Darwinian 
Sea.'' The United States has the greatest research effort in the world. 
Our universities and industries develop more ideas and discover more 
innovations than everywhere else combined. We also understand capital 
markets and have used our knowledge to produce the world's most vibrant 
and robust economy. Yet we are still not very good at turning raw ideas 
into commercial products. While it is tempting to believe that this 
process is straightforward and should be understandable from basic 
social and economic principles, it is not and cannot. The relationship 
between the private sector and this intermediate stage between research 
and venture capital investment is poorly understood and the subject of 
intense scrutiny. It would be wrong to treat it as a mature, fully-
formed, capital arena.
  As such, there is a role for government to play. What's more, the ATP 
has been largely successful in carrying out that role. The purpose of 
the ATP is to develop and disseminate high-risk technologies with the 
potential for broad-based economic benefits. It is devoted to technical 
research; research that is more directed that basic proof-of-principle 
work, but not to product development. And more often than not, it 
involves matching funds from industry. This process has worked. In a 
recent review of the first 50 ATP awards, 32 projects have been 
successful in bringing 61 products or processes to market.
  Despite this success, H.R. 2500, the Fiscal Year 2002 Commerce-
Justice-State Appropriations bill, only provides enough funds to 
fulfill existing commitments and halts new awards. While I understand 
the rationale to suspend new ATP grants is due to the on-going program 
re-evaluation efforts conducted by the Secretary of Commerce, I am 
concerned that this may ultimately lead to a zeroing out of the 
program. The ATP is one of the most closely reviewed government 
programs of all time. In addition, the National Research Council has 
just completed the most comprehensive review of ATP to date and the 
review is extremely positive. The report calls ATP an ``effective 
federal partnership program'' and claims that it ``appears to have been 
successful in achieving its core objective.'' It also cites its 
``exceptional assessment effort'' and compliments its review and awards 
process. These are extremely strong statements for a non-partisan group 
that tries to avoid making policy judgments.
  The Academy report, however, does not say the program is perfect and 
does take issue with certain aspects of the ATP. It also makes 
recommendations for changes and improvements. These concerns should be 
taken seriously, but the report is still a strong endorsement for 
continuing the program. Effective programs that produce measurable 
long-term economic benefits should not be sacrificed on the altar of 
short-term budget constraints. The success of the ATP speaks for itself 
and the program should be continued. At the very least, I hope that 
when this legislation is considered in conference, there will be 
adequate funding to continue the program pending the Secretary's 
reevaluation.

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