[Congressional Record (Bound Edition), Volume 146 (2000), Part 5]
[Senate]
[Pages 6893-6897]
[From the U.S. Government Publishing Office, www.gpo.gov]



       INCREASING FEDERAL INVESTMENTS IN RESEARCH AND TECHNOLOGY

  Mr. LIEBERMAN. Mr. President, I wanted to bring to the attention of 
my colleagues an important letter dated March 22, 2000 sent to our 
Senate leadership by forty-seven leaders of our high technology 
companies, universities and labor organizations who are members of the 
highly-respected Council on Competitiveness. The letter argues for a 
significant increase in federal Research and Development funding as key 
to our economic future. It also points out that much of the current 
technology talent shortage Congress has been spending so much time on 
could be alleviated through increased R&D support, since that funding 
supports our technology education and training system. It is frankly 
unique in my Senate experience to see a letter signed by such a 
significant segment of our nation's technology leaders and I hope the 
Senate will heed its counsel.
  This letter comes to us in the context of the recently passed Budget 
Resolution which calls for a small increase in federal investments in 
science and technology over last year's levels. I believe that a strong 
bipartisan majority of the Senate would agree that more is needed. Past 
investments in research, made in all scientific disciplines and 
supporting work performed in universities, industry, and government 
labs, have been the driving force for creating the technologies that 
have driven our high tech economic boom, preserved our national 
security, and created fantastic new advances in medical care. The 
Senate has recognized this, and last year passed the Federal Research 
Investment Act (S. 296) unanimously--legislation which had 42 
bipartisan cosponsors and which calls for a doubling of funding for 
civilian science and technology over the next decade.
  I note that this year the Administration has submitted an aggressive 
program for civilian science investments for many key agencies, 
consistent with both the spirit and text of the Senate's legislation, 
and with the points made in the letter. In particular, I want to call 
attention to the Administration's efforts to restore balance to the 
federal research portfolio by aggressively funding work in the physical 
sciences and engineering, through programs at the National Science 
Foundation and Department of Energy. Consistent with the March 22nd 
message sent to us by our country's technology leadership, I hope the 
Congressional Appropriations Committees will be able to support 
critical civilian federal Research and Development programs at least at 
the levels called for in the FY01 Administration Budget Request. This 
investment, administered by the National Science Foundation, National 
Institutes of Health, Department of Energy, National Aeronautics and 
Space Administration, and other agencies, funds university, government 
lab, and industrial efforts to develop the technologies that energize 
our economy and protect our health.
  I also hope the Congress will increase funding for the Department of 
Defense's Science and Technology program--whose products are critical 
to our security. Defense science and technology has in the past given 
us the technologies--including stealth, advanced computing, the Global 
Positioning System, and precision munitions--that have provided our 
defense technology edge and led to our victories in the Gulf and 
Kosovo. These investments have been drastically reduced over the 
years--risking both our national security and our technological 
leadership in a variety of key physical sciences and engineering 
disciplines.
  On April 5th, I and the other members of the Senate Science and 
Technology Caucus had the opportunity to learn about an example of 
excellent federally-funded science--the fantastic new world of 
nanotechnology--from a

[[Page 6894]]

group of world renowned academics and industrial researchers. 
Investments in nanotechnology will help create the systems that will 
shrink microelectronics down to the scale of atoms and molecules and 
create entire chemistry labs on a single computer chip, potentially 
leading to a technology revolution along the lines of those generated 
by the transistor and the Internet. One of my constituents, Professor 
Mark Reed of Yale University, is already taking steps to turn federal 
investments in fundamental nanotechnology research into technologies 
that will enhance our nation's productivity. He recently announced the 
creation of a single molecule electronic switch, using a chemical 
process called ``self-assembly.'' A nano-scale switch is a breakthrough 
that may lead to huge performance improvements in digital electronics. 
Professor Reed has just established a new company aiming to move the 
integrated electronics world into the era of molecular manufacturing, 
by making the building blocks of computer circuits out of single 
molecules.
  But these kinds of commercial ventures and the resulting gains in 
productivity and economic growth that result will only occur if the 
federal government maintains and increases its investments in science 
and technology. The Internet, the Human Genome Project, the Space 
Shuttle, miracle drugs, and global telecommunications networks are but 
a few examples of what previous investments by the federal government 
in science and technology have generated. Current work in 
nanotechnology and other fields supported by sufficient and stable 
federal investments can also lead to developments that will affect and 
improve our lives in ways we cannot imagine today. Congress will soon 
enter the annual Appropriations cycle and I hope that our 
Appropriations Committee and Subcommittee leaders over the course of 
this session can work together in a bipartisan fashion to insure that 
we adequately invest in our nation's technological future.
  I ask unanimous consent that the March 22nd letter from the Council 
on Competitiveness members be printed in the Record in full immediately 
following my remarks. The letter demonstrates to the Congress that our 
constituents and the leaders of our high-tech industries and 
institutions are calling for more far aggressive action in increasing 
Federal support for science and technology research.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                   Council on Competitiveness,

                                   Washington, DC, March 22, 2000.
     Hon. Trent Lott,
     U.S. Senate, Russell Senate Office Building, Washington, DC.
       Dear Senator Lott: As you and your colleagues shape 
     America's budget priorities for 2001, the undersigned members 
     of the Council on Competitiveness urges you to strengthen 
     America's science and technology enterprise.
       Decades of bipartisan congressional investments have 
     contributed decisively to the current U.S. economic boom. 
     These investments created the advances in knowledge as well 
     as the pool of technical talent that underpin America's 
     competitive advantage in information technology, 
     biotechnology, health science, new materials, and many other 
     critical enablers.
       Nevertheless, public-sector investments in frontier 
     research have declined sharply relative to the size of the 
     economy. An additional $100 billion would have been invested 
     if the federal share of such research had been maintained at 
     its 1980 level. Physical sciences, math, and engineering have 
     been particularly affected. The recent ramp up of private 
     sector investment in R&D, while vitally important, is no 
     substitute for the federal role in creating next generation 
     knowledge and technology.
       We are also training fewer and fewer American scientists, 
     engineers, and mathematicians despite soaring demand for 
     these skills. Education and training of scientists and 
     engineers are tied to federally sponsored research performed 
     in the nation's laboratories and universities. When federal 
     R&D commitments shrink, so too does the pool of technically 
     trained talent, forcing industry and academia to look abroad 
     for skilled knowledge workers.
       In this time of prosperity, we ask that you use this year's 
     budget resolution, authorization and appropriations process 
     to start America down the path toward significantly higher 
     long-term investments in our national science and technology 
     enterprise. Your commitment to continued U.S. technological 
     leadership will generate high-wage jobs, economic growth, and 
     a better quality of life for all Americans for decades to 
     come.
         Raymond V. Gilmartin, Chairman, Council on 
           Competitiveness, Chairman, President & CEO, Merck & 
           Co., Inc.; Jack Sheinkman, Labor Vice Chairman, Council 
           on Competitiveness, Vice Chairman, Amalgamated Bank of 
           New York; Richard C. Atkinson, President, University of 
           California; Craig R. Barrett, President and CEO, Intel 
           Corporation; William R. Brody, President, Johns Hopkins 
           University; Vance D. Coffman, Chairman and CEO, 
           Lockhead Martin Corporation; L.D. DeSimone, Chairman of 
           the Board & CEO, 3M Company; F. Duane Ackerman, 
           Industry Vice Chairman, Council on Competitiveness, 
           Chairman & CEO, BellSouth Corporation; Roger Ackerman, 
           Chairman and CEO, Corning Incorporated; David 
           Baltimore, President, California Institute of 
           Technology; Alfred R. Berkeley, III, President, The 
           Nasdaq Stock Market Inc.
         Richard H. Brown, Chairman and CEO, Electronic Data 
           Systems Corporation; Jared Cohon, President, Carnegie 
           Mellon University; Gary T. DiCamillo, Chairman and CEO, 
           Polaroid Corporation; Charles M. Vest, University Vice 
           Chairman, Council on Competitiveness, President, 
           Massachusetts Inst. of Technology; Paul A. Allaire, 
           Chairman, Xerox Corporation; Edward W. Barnholt, 
           President and CEO, Agilent Technologies, Inc.; Molly 
           Corbett Broad, President, University of North Carolina; 
           G. Wayne Clough, President, Georgia Institute of 
           Technology; Philip M. Condit, Chairman and CEO, The 
           Boeing Company; Sandra Feldman, President, American 
           Federation of Teachers, AFL-CIO.
         Carleton S. Fiorina President and CEO, Hewlett-Packard 
           Company; Joseph T. Gorman, Chairman and CEO, TRW Inc.; 
           Shirley Ann Jackson, President, Rensselaer Polytechnic 
           Institute; Jerry J. Jasinowski, President, National 
           Association of Manufacturers; Patrick J. McGovern, 
           Chairman of the Board, International Data Group Inc.; 
           Michael E. Porter, Professor, Harvard University; David 
           E. Shaw, Chairman, D.E. Shaw & Co., LP; George M.C. 
           Fisher, Chairman of the Board, Eastman Kodak Company; 
           William R. Hambrecht, President, W.R. Hambrecht & Co., 
           LLC; Irwin M. Jacobs, Chairman & CEO, QUALCOMM, Inc.; 
           Peter Likins, President, University of Arizona.
         Henry A. McKinnell, President and COO, Pfizer Inc.; Heinz 
           C. Prechter, Chairman, ASC Incorporated; Frederick W. 
           Smith, Chairman, President & CEO, FDX Corporation; 
           Louis V. Gerstner, Jr., Chairman and CEO, IBM 
           Corporation; Charles O. Holliday, Jr., President & CEO, 
           E.I. du Pont de Nemours & Company; Durk I. Jager, 
           Chairman, President & CEO, The Procter & Gamble 
           Company; Richard A. McGinn, Chairman and CEO, Lucent 
           Technologies, Inc.; Mario Morino, Chairman and CEO, 
           Morino Group; Eric Schmidt, Chairman and CEO, Novell; 
           Michael T. Smith, Chairman and CEO, Hughes Electronic 
           Corporation.
         Ray Stata, Chairman of the Board, Analog Devices, Inc.; 
           Mark Wrighton, Chancellor, Washington University; Gary 
           L. Tooker, Vice Chairman of the Board, Motorola Inc.; 
           John Young, Founder, Council on Competitiveness; G. 
           Richard Wagoner, Jr., President & COO, General Motors 
           Corporation.

  Mr. ROCKEFELLER. Mr. President, I rise today to join my colleagues in 
highlighting a powerful call to action on science and technology 
funding issued by our nation's high technology, academic, and labor 
leaders.
  On March 22, 2000, forty-seven CEOs of high technology companies, 
Presidents of our leading universities, and representatives of labor 
organizations came together in an unprecedented Council on 
Competitiveness letter petitioning Congress for ``significantly higher 
long-term investments in our national science and technology 
enterprise.'' This investment, they stated, should come in the form of 
increased ``public-sector investments in frontier research'' such as 
research in the ``[p]hysical sciences, math, and engineering.'' This 
letter also includes a clear warning--Congressional failure to 
appropriate more funding for science and technology research will 
threaten America's competitive advantage in information technology, 
biotechnology, health science, new materials, and other critical 
technology-intensive fields. As we all know, many economists, including 
Alan Greenspan, have asserted that our country's leadership in these 
areas is an important reason for our current economic success. A 
refusal to support America's dominant

[[Page 6895]]

position with adequate appropriations today threatens our economic 
success tomorrow.
  The Council on Competitiveness letter also reveals that increased 
federal funding to science and technology will positively affect 
another key policy issue--the scarcity of technologically skilled 
workers. The debate over whether to raise the number of H1-B visas has 
alerted all of us to the technology industry's critical need for more 
highly skilled workers. In the New Economy large numbers of 
``knowledge-based'' workers are essential to economic growth. Because 
we are not training enough American knowledge-based workers, high-tech 
companies have asked Congress to increase the number of H1-B visas 
granted to skilled workers who are willing to immigrate from other 
countries.
  Appropriating more funding for science and technology research will 
increase the number of technologically trained Americans, thus 
addressing the current scarcity of knowledge-based workers. The letter 
explains that: ``Education and training of scientists and engineers are 
tied to federally sponsored research performed in the nation's 
laboratories and universities. When federal R&D commitments shrink, so 
too does the pool of technically trained talent, forcing industry and 
academia to look abroad for skilled knowledge workers.'' I therefore 
urge all my colleagues who support increasing the H1-B cap to support 
increased federal science and technology funding--we must develop more 
American technology workers.
  It is important to understand that this letter's signatories are not 
alone in their recommendation for more substantial funding for science 
and technology research. The House Science Committee wisely wrote in a 
1998 study titled ``Unlocking Our Future: Toward a New National Science 
Policy'' that ``[t]he federal investment in science has yielded 
stunning payoffs. It has spawned not only new products, but also entire 
industries. To build upon the strength of the research enterprise, we 
must make federal research funding stable and substantial, maintaining 
diversity in the federal research portfolio, and promoting creative, 
ground breaking research.''
  Similarly, a Business Week editorial on July 26, 1999 stated that 
``[b]ecause of productivity gains, the economy can now operate at a 
higher speed without inflation. . . . [P]romoting the New Economy also 
requires wise policy from Washington. We need to support basic research 
and education at all levels, the seed corn of innovation.''
  These arguments are supported by noted MIT economist Lester Thurow in 
a June, 1999 Atlantic Monthly article, where he comments that: ``[a] 
successful knowledge based economy requires large public investments in 
education, infrastructure, and research and development. . . . Private 
rates of return on R&D spending (the financial benefits that accrue to 
the firm doing the spending) average about 24 percent. But societal 
rates of return on R&D spending (the economic benefits that accrue to 
the entire society) are about 66 percent. . . . This result, never 
contradicted in the economic literature, provides powerful evidence 
that there are huge positive social spillovers from research and 
development . . . Because the government doesn't care exactly which 
Americans reap the benefits, it has a very important role to play in 
R&D. Rates of return on R&D spending are far above those found 
elsewhere in the economy. Government now pays for about 30 percent of 
total R&D, but with a 66 percent rate of return it should be spending 
much more.''
  In recognition of this need for greater public support of science and 
technology research, last year the Senate unanimously passed the 
Federal Research Investment Act (S. 296). This bill would double our 
investment in civilian science and technology over the next decade. The 
Administration also understands how critical publicly funded R&D is to 
the country's vitality. Its budget includes a strong and balanced 
program which will begin to recharge our sagging R&D portfolio. The 
administration's program is consistent with the spirit and the text of 
the Federal Research Investment Act and the Council on Competitiveness 
letter.
  Unfortunately, our Congressional Budget Resolution calls only for a 
small increase in federal investments in science and technology. We 
have a chance to make an important investment in our country's future 
and to lay the groundwork for continued American high-tech leadership. 
I urge my colleagues to heed our high-tech, academic, and labor 
leaders' call to action on federal R&D support and work together to 
achieve more substantial appropriations for science and technology.
  Mr. BAYH. Mr. President, I am very pleased today to join with a 
number of my colleagues on both sides of the aisle to call attention to 
the remarkable letter sent to our Senate leadership by the nearly fifty 
members of the Council on Competitiveness. The letter points out the 
importance of basic scientific research to our economy, and shows how 
such public-sector investments have been on the decline. When so many 
prominent leaders agree on an issue of public policy, it is incumbent 
upon us to pay attention to their views.
  I believe that the recent increases in private-sector research are no 
substitute for the government's traditional role in funding the most 
basic research that may or may not yield important discoveries. It is 
this so-called ``market failure'' in basic research--those making the 
investments are not assured of positive outcomes, and cannot 
realistically capture all of the economic gains from new discoveries--
that makes the government's role so vitally important. What's more, the 
private sector's new investments have been increasingly focused on 
biotechnology and product development, while investment in basic 
sciences such as math, chemistry, and physics has experienced sharp 
declines. This has important implications for today's workforce, as 
well as the rate of innovation that will drive future increases in 
living standards.
  While advances in the health sciences, such as the Human Genome 
Project, are extremely exciting, there are areas in the physical 
sciences that are on the verge of generating important discoveries, and 
where government ought to be focusing additional resources. One area in 
which I am keenly interested is the area of nanotechnology. This 
groundbreaking area--which examines structures atom-by-atom and 
molecule-by-molecule, on the scale of just a few billionths of a 
meter--may lead to discoveries that will change the way almost 
everything, from building materials to vaccines to computers, are 
designed and made. Neil Lane, the President's science advisor, says 
that this area of science and engineering will most likely lead to 
tomorrow's breakthroughs. It's a very important new area, but one where 
the practical applications are a few years away. Basic research is the 
key to pushing the envelope forward.
  Yet despite the potential applications of these and other 
discoveries--and President Clinton's half-billion-dollar National 
Nanotechnology Initiative--recent trends do not bode well for the 
physical sciences. The Senate voted last year to double our investment 
in basic scientific research over the next decade, but the budget 
recently passed by this Congress places a higher priority on tax cuts 
and therefore will make such increases very difficult without forcing 
important cuts in other areas. Nevertheless, I hope that my colleagues 
understand that basic research is an appropriate role for government, 
and that such investment is clearly in the national interest.
  To be sure, the R&D picture as a whole--public and private sectors 
combined--has been improving. R&D had reached a peak of nearly three 
percent of GDP in the early 1960s, and the number has recently risen 
close to its 1960s peak. But the overall federal investment in R&D is 
still relatively flat, because much of the recent gains have come from 
private industry. And as I already mentioned, much of that is in 
product development, rather than the most basic research.
  If we look exclusively at the federal role in basic research, the 
numbers show the trend even more clearly. The

[[Page 6896]]

federal R&D budget as a percent of GDP was nearly two percent in the 
mid 1960s, and it is less than eight-tenths of one percent today. These 
declines have not been shared equally. Funding for the National 
Institutes of Health is much higher, and funding for the National 
Science Foundation is up slightly. But the other traditional big 
science agencies are significantly lower, with defense R&D cuts playing 
a central role. Defense R&D is down thirty percent over the past six 
years.
  Again, some claim that this problem is overstated, because the 
private sector has picked up the slack. But there are two problems. 
First, with such a short time horizon for corporations, the private 
sector often looks to short-term projects like product development, 
rather than long-term projects with unsure real-world applications. 
This makes basic research more dependent on the federal government.
  Second, public and private investment is only increasing in two 
areas, information technology and biotech/pharmaceuticals. Math, 
chemistry, geology, physics, and chemical, mechanical, and electrical 
engineering are all declining. The United States risks falling behind 
in the area of innovation, as other nations such as South Korea, 
Taiwan, Singapore, Israel, and even Japan increase their investments in 
new ideas and new technologies.
  The shift in federal R&D resources to health and biotech is a major 
reason we see so many talented people in the life sciences, but fewer 
and fewer mathematicians, chemists, physicists, and engineers. You 
could make a very strong argument that the stagnation in U.S. degrees 
in physical sciences and engineering is related to the decline of 
federal research dollars in these areas, because R&D funds not only 
science projects, but also the graduate students and researchers who 
will be tomorrow's scientists, technical workers, and teachers.
  Consider the upcoming debate over increasing the number of H-1B 
visas, a special visa that allows foreign workers with special skills 
to work in the United States. Our national talent pool is being raided 
so heavily by the life sciences--in large part because the research 
money is there, meaning more opportunities for students--that the high 
tech industry desperately needs workers. By some estimates, hundreds of 
thousands of well-paying high-tech jobs remain unfilled because the 
U.S. talent pool is stretched so thin. While some in Congress--
including myself--are willing to allow more H-1B workers if there is 
additional money for job training and science scholarships, we also 
know that job training alone is not the answer to the high-tech labor 
shortage. We must put more research money into the physical sciences so 
that more young people are attracted to these fields of work.
  Another problem that we must deal with is entitlement reform. The 
constant growth of entitlement programs like Social Security and 
Medicare squeezes other areas of the budget and puts every program on 
the discretionary side in direct competition with each other. All 
discretionary programs, including research, are coming out of a smaller 
and smaller share of the pie.
  The numbers here are telling. In the early 1960s, discretionary 
spending--where all of the research money comes from--was two-thirds of 
the budget, while mandatory spending and entitlements accounted for 
only one-third. Today, this is completely reversed, with discretionary 
spending now accounting for only one-third of all spending. Some 
estimates show that if we don't make changes soon, the entire budget 
could go to entitlements just a few decades from now. We must all 
recognize that future increases in science and research will suffer if 
entitlements are not reformed.
  Michael Porter of Harvard University has done a great deal of 
research on what makes countries competitive in the global economy. He 
writes that continuous innovation is the key--but innovation requires 
research. For example, where will tomorrow's Internet come from? No one 
could have known that government's investment in this area would have 
such a huge impact on all of our lives. If we fail to shift our 
budgetary priorities to make investments in the future, we cannot 
promise our children an ever-growing economy.
  In closing, I am encouraged that the Council on Competitiveness has 
recognized the importance of basic science research to our economic 
well-being. I hope that the Senate, in a bipartisan fashion, will 
recognize that such investment is an appropriate role for government 
and is without question in the national interest, and that we will find 
ways to make the ``doubling bill'' a reality.
  Mr. FRIST. Mr. President, I would like to make a few brief remarks 
about an usual letter I received on behalf of forty-seven leaders of 
the nation's premier high technology companies, universities, and labor 
organizations. This is the first time in its history that the Council 
on Competitiveness, a non-profit organization dedicated to 
strengthening U.S. innovation, has sent such a letter to Congress on 
behalf of its outstanding membership. The message is loud and clear: 
substantially increased funding for R&D is necessary to continue our 
national economic success and our international leadership.
  Michael Porter, noted professor at the Harvard School of Business 
stated, ``the key to U.S. competitiveness is innovation--the ability to 
deliver products, processes, and services that cannot be easily or 
inexpensively produced elsewhere. Data shows that the U.S. is strong, 
but that a number of other countries are successfully making the 
transition from imitator to innovator.'' Economists argue that such an 
investment in innovation, through its impact on economic growth, will 
not drain our resources, but will actually improve our country's fiscal 
standing.
  Current economic expansion and growth, however, cannot be maintained 
if we do not provide the necessary funds and incentives to perform 
critical R&D throughout the scientific disciplines. During the 1990s, 
the funding for math has declined 20 percent, physics has declined 20 
percent, chemistry has dropped by 10 percent and engineering has 
dropped 30-40 percent. These reductions have the combined effect of 
eroding the base from which new technologies can be derived.
  The Government plays a critical role in driving the innovation 
process in the United States. The majority of the federal government's 
basic R&D is directed toward critical missions to serve the public 
interest in areas including health, environmental pollution control, 
space exploration, and national defense. Federal funds support nearly 
60 percent of the nation's basic research, with a similar share 
performed in colleges and universities. It is this fundamental 
research, combined with a strong talent pool, that ultimately drives 
the innovation process.
  Throughout my career in the Senate, I have spent a considerable 
amount of time advocating for greater funding levels for civilian R&D. 
Together with many of my colleagues from both sides of the aisle, I 
have been trying to educate others on the value of the federal 
government's role in funding merit-based and peer-reviewed programs. 
One only has to look at lasers, mechanical cardiac assist devices, and 
automatic internal defibrillators to find an examples of prudent 
federal investments in R&D.
  The Federal Research Investment Act, which I authored with Senators 
Rockefeller, Domenici, and Lieberman, passed the Senate last July for 
the second year in a row. Yet it has unfortunately languished in the 
House. The bill would double the amount of federally-funded civilian 
R&D over an eleven year period, while at the same time, establishing 
strong accountability mechanisms. I believe that a balanced portfolio 
of research across all scientific disciplines will enable our national 
economy to continue to grow and to raise our standard of living.
  We rally around increased federal funding for basic R&D, yet we are 
faced with daunting prospects each year of drastic cuts in the federal 
investment. Somehow, we are stuck in the same position each year of 
trying to convince Congress of R&D's necessity to the well-being of our 
nation, as we confront very real budgetary limitations. We must set 
priorities. While I strongly believe that Congress must strive to

[[Page 6897]]

stay within the budget caps, I also firmly believe that funding for R&D 
should be allowed to grow in fiscal year 2001 and beyond.
  As a result of the current fiscal environment in Congress and the 
desire to utilize the surplus prudently, I am confident that investing 
in basic R&D, and in turn the technological innovation of the future, 
is a proper use of the federal taxpayers dollars. This pivotal need for 
a resurgence in basic R&D investments is evident when we further 
consider our nation's increased dependency on technology and the global 
competition that threatens our sustained leadership position. R&D 
drives the innovation process, which in turn drives the U.S. economy. 
Now is not the time to turn our backs on the nation's future 
prosperity.
  Mr. President, I want to thank the Council on Competitiveness again 
for it poignant statement and strongly encourage each of my colleagues 
to consider its message as we continue to make budgeting decisions this 
year.

                          ____________________