A Department Fighting for American Business In this new international battlefield of world trade, the Department of Commerce is our main arsenal, and it has a long and vital history. Article I, section 8, of the Constitution says that Congress shall have the power to regulate commerce with foreign nations, and among the several States. Our Founding Fathers knew the importance of a federal role in support of commerce. In the first days of our republic, Alexander Hamilton wrote his famous Report on Manufactures and called for government policies to assist U.S. industry. Theodore Roosevelt created the Commerce Department, and in the 1920s, Secretary of Commerce Herbert Hoover turned the department into an export powerhouse. Today, the Commerce Department provides the needed tools for helping Americans to succeed in the new global, high-technology world. Consider a few of its suc cesses: -The Department's export promotion efforts have been a huge success, helping American companies over the past 2 years to sell over $24 billion in American goods and services, and creating or saving over 300,000 jobs. -Its export control program will allow billions more in export sales while successfully preventing the sale of sensitive technologies to unfriendly governments. -In technology, the central economic battleground of the future, DOC supports industry's own efforts. DOC-supported Manufacturing Extension Centers, begun under the Reagan Administration, have helped over 15,000 small firms to improve their operations and profits, leading the firms themselves to calculate that each dollar of DOC investment leads to eight dollars in company revenues or savings. -The Advanced Technology Program, started under the Bush Administration and still new, is already helping dozens of companies (most of them small businesses) to develop new breakthrough technologies that the private capital markets will not finance because they are not guaranteed to make short-term profits. New developments will reduce the costs of computer chips, lead to cheap compact color TV displays, and create machines that can safely hold human bone marrow cells outside the body. -The National Oceanic and Atmospheric Administration (NOAA) is steadily improving the warning time and accuracy of weather and climate forecasts, with economic and safety benefits ranging from improved flood forecasts to safer airline flights. -The Economic Development Administration is one of the few Federal programs that give rural areas a chance to share in economic growth. -The Bureau of Economic Analysis is now substantially improving economic and trade statistics, to give both business and government a more accurate picture of where America stands in the new world economy. Contrary to what some may believe, these various parts of the Department work closely together and reinforce each other. The National Institute of Standards and Technology (NIST), for example, works with the International Trade Administration (ITA) and U.S. industry to monitor new product standards in other countries. They identify when foreign product standards are used not to protect local safety but as non-tariff barriers against American products. Similarly, the Patent and Trademark Office advises ITA when foreign governments appear to use their patent policies in ways which hurt U.S. technology companies. There are other examples. NIST and ITA's U.S. and Foreign Commercial Service are working closely with several friendly countries, including Saudi Arabia, to ensure that their new product standards are compatible with American goods and services. NIST and NOAA, in turn, are working closely to develop new measurement techniques for helping the fishing industry to locate fish stocks. The Census Bureau regularly provides important information on the state of U.S. manufacturing to companies and the trade and technology units of the Department. The National Telecommunications and Information Administration (NTIA) performs a critical role in forcing government users to become more efficient in their use of spectrum radio frequency and overseeing the governmental uses of the spectrum. NTIA has played a critical role in identifying frequency bands for reallocation to the private sector, which ultimately led to auctions that brought in over $9 billion to the U.S. Treasury. In this era of economic competition, the Commerce Department is the "arsenal" of business. It's the Commerce Department through the International Trade Administration that rings up sales for U.S. business from Boeing and McDonnell Douglas airplanes in Saudi Arabia to Raytheon radars in Brazil. It's the Commerce Depart ment that enforces the trade laws that enabled the steel and semi-conductor industries to beat back predatory trade practices. In the critical technologies that are the battleground of the 21st Century, it's the Commerce Department that is leading the way in developing and commercializing new and emerging technologies. While the Commerce Department is at the cutting edge of technological development, its Export Administration is walking the fine line between promoting U.S. exports and keeping our critical technology out of the hands of mad men. As one Commerce official noted, "If you wake up and the bomb hasn't been detonated, we've done our job!" Finally, it is the Commerce Department's economic statistics that provide the data which drive America's financial markets. This Department is not only working. Its units are working effectively together and with American business to save and create jobs. Building for the Future, Not Retreating It would be a grave mistake to break up this winning team of business and government working together. The Commerce Department is succeeding. Now is the time to build on that progress, not engage in economic retreat. What will happen if S. 929 passes and the Department is broken apart? Here are specific hard questions that need to be raised: -Do we genuinely want to break apart DOC's export promotion machine and forgo the billions of dollars in profits and thousands of jobs it helps American companies to obtain? -Do we really want to destroy NIST, which accounts for only one percent of the $70 billion annual Federal research and development budget used to help civilian companies develop new long-term, breakthrough technologies, while Germany continues to spend 14.5 percent of its R&D budget for the same purpose? -If the NIST laboratories (which have existed since Theodore Roosevelt established them in 1901) are abolished, what will the country do without their ability to help ensure accuracy in essential functions of government and industry? What, for example, will the FBI and the nation's law enforcement crime labs do with no agency to help them ensure accuracy in drug analyses and DNA fingerprinting? How many criminals will get off because the Nation no longer has credible crime laboratory measurements? -Why would we abandon the federal commitment to an effective, coordinated ocean policy? The need for that policy was first articulated by the Stratton Commission in 1969 and implemented under the 1970 Presidential Organization Plan #4 establishing NOAA. As President Nixon said at that time, "The oceans and atmosphere are interacting parts of the total environmental system upon which we depend not only for the quality of our lives but for life itself. We face immediate and compelling needs. for a better understanding of the total environment—an understanding which will enable us more effectively to monitor and predict its actions, and ultimately perhaps, to exercise some degree of control over them. Establishment of NOAA within the Department of Commerce would enable us to approach these tasks in a coordinated way." That statement is as true today as it was 25 years ago. -What will happen to the nation's $50-billion-a-year commercial fishing industry and $70-billion-a-year marine recreational fishing industry if we eliminate federal authority to monitor fishery harvests and collect management information? Are we really willing to abandon the federal programs that have made the United States into the top seafood exporter in the world? -Will we permit unplanned coastal development and marine pollution to continue shutting down our beaches and shellfish beds and threatening the health of marine resources? Half of the world's population now lives within 40 miles of the coastline, and by the turn of the century, more than three-quarters of Americans are expected to live within 50 miles of the U.S. coastline. -If we slash the NOAA budget, do we realize that we will surrender our modern weather satellites and radars and return to a time when, for example, a single hurricane surprised Galveston, Texas, killing 6,000 people? And are we willing to forgo further improvements in weather forecasting by eliminating weather research funds? What will be the economic effects from disrupted transportation, lost farm income, and massive rebuilding as a result of unforeseen natural disasters? -At the same time we see a revolution in communications policy, should we eliminate NTIA and leave the government with no objective advice on these issues? Without NTIA, how can we ensure that the federal use of the radio frequency spectrum is managed fairly and with the appropriate emphasis on national security, law enforcement, and other vital government interests of the United States? Besides losing these capabilities, can anyone seriously believe that rearranging agency boxes on the government's organization chart saves money? Where is the evidence for this? There may be savings from whatever programmatic cuts are made at the Department, but reorganizations per se, unless done where they truly make sense, only create chaos, confusion, poor government services, and extra cost. Moreover, political considerations should not dictate future decisions about the Department of Commerce. We all know it is an easy target, the smallest cabinet department. We all know why it is the target, rather than other departments whose importance in the post-Cold War era may in fact be substantially less. We have all watched the irony of distinguished Republicans proposing to destroy Herbert Hoover's department, when it is achieving again the same effectiveness as during his remarkable tenure. Eliminating this Department runs directly counter to the steps taken by our largest global contributors. Can you imagine any other industrial power ever deliberately shooting itself in the foot by eliminating export, technology, and related assistance to its companies? Can you imagine Japan, or Korea, or Germany, or France ever engaging in this type of economic retreat? Succeeding, Not Failing, in the New World Economy The idea of a powerful government agency lending a hand to assist U.S. business in becoming world leaders is not some idea hatched in the sheltered halls of academia. From China to Chile, from South Africa to France to Tokyo, Commerce Department officials are cracking open new markets for U.S. companies. To eliminate the Department would abandon U.S. business and give an edge to our international competition, which will be smiling broadly. As long as Americans engage in world commerce, we need a Department of Commerce to help level the playing field for these American industries and workers, to give them a fair chance to-compete in a world dominated by large foreign companies backed by the full resources of their governments. The choice is actually very simple and stark. Either we back our companies and workers, or we don't. Supporters of the Commerce Department believe that our government, like every other major government in the world, should take prudent steps to support its industries and workers-to help win at exports, technology, and other areas. This Department is fighting every day for American business, and it is succeeding. We shouldn't break up the cooperative effort of business and government that has developed in recent years. Opponents of the Commerce Department would leave American business out there with no backing, no assistance, and fewer economic prospects. This Committee, and this Congress, should strengthen the Commerce Department, not weaken or destroy it. This Committee, and this Congress, should soundly reject S. 929. Chairman ROTH. Thank you, Senator Hollings. Senator HOLLINGS. Yes, sir. Chairman ROTH. We appreciate your being here today. We will now call on Senator Pressler. As I stated earlier, we are going to try to limit the statements to 5 minutes, please. TESTIMONY OF HON. LARRY PRESSLER, U.S. SENATOR FROM THE STATE OF SOUTH DAKOTA Senator PRESSLER. I shall be even more limited than that. I will put my statement largely in the record. I thank the Committee very, very much for hearing me. I join in this effort to look at reorganizing the Department of Commerce and perhaps putting some of the missions elsewhere, but certainly keeping trade, technology, and the businessman's point of view at the cabinet table. I personally believe we can reduce the number of cabinet slots to a level that the President can truly have his cabinet reporting to him, rather than the White House staff carrying out the main functions. Many would agree that the Department of Commerce mission may be too diverse. The National Oceanographic and Atmospheric Administration has little in common with the Bureau of the Cen sus, and the Bureau of the Census has little in common with the International Trade Administration, yet all reside in the Commerce Department. First, I would like to address trade. The trade promotion activities of the Commerce Department are extremely important to U.S. business. Too often, I fear the effectiveness of Commerce's trade promotion activities have been dependent on the enthusiasm and energy of whoever is Secretary of the Department. Malcolm Baldrige and Robert Mosbacher did an excellent job with trade. Ron Brown deserves credit for his achievements in this area. However, not every Secretary of Commerce has been as dedicated in that area. At the same time, I would like not to see these important functions thrown back into the State Department, and I fear there may be an organizational conflict if that were folded into the U.S. Trade Representative's Office. It is difficult to expect our Trade Representative to, on the other hand, negotiate trade agreements while promoting U.S. exports on the other. Our competitiveness in global markets must be preserved. Whether a new, smaller agency created specifically to support trade activities would achieve this or whether we consider some reorganization of the U.S. Trade Representative's Office, we must take care in structuring our trade activities to benefit small U.S. businesses as well as Fortune 500 corporations. I would like to briefly address those areas of the Commerce Department which are organizational under our Committee's jurisdiction, the National Oceanic and Atmospheric Administration, the Technology Administration, which includes the Office of Technology Policy, the National Technical Information Service, NTIS, and the National Institute of Standards and Technology, NIST, the U.S. Travel and Tourism Administration, and the National Telecommunications and Information Administration, all which fall under the Secretary of Commerce. The National Oceanic and Atmospheric Administration may have some responsibilities that could be incorporated into other agencies. In general, this is an agency that is a separate department in the governments of other nations. Japan, for instance, has a separate department for its NOAA counterpart. NOAA conducts sound atmospheric and ocean science. The National Weather Service, which is located in every State of the Union, is part of this agency. Although I do not come from a coastal State, my colleagues who do rely on NOAA. As Ted Stevens will tell you, and he and I authored a joint memorandum on this subject of the Department of Commerce, NOAA is as important to his State of Alaska as any other cabinet-level department. We should carefully assess the NOAA mission, supporting weather warnings and forecasts, marine and resource management, and the overall research and development functions of the agencies. Some of the functions are inherently governmental and should be retained. Could they be housed elsewhere? I could make a good case for integrating NOAA into the Department of Transportation, for example. In fact, there are similar functions in other departments which could also be transferred. I know my constituents would thank us if all wetland-permitting agencies were in one organizational entity. The point is this. Take a look at the Government and as a whole and we must see where duplicative functions currently exist. We must take steps to consolidate and streamline those operations. The Technology Administration is a relatively new part of the Department, although the National Institute of Standards and Technology, NIST, which is part of this organization, has been in existence for over 100 years. As the National Bureau of Standards, NIST was charged with establishing and maintaining weights and measures for the United States. During the past decade, NIST has assumed more responsibilities for encouraging competitiveness in U.S. industry. Some of these programs, which are housed in the industrial technology services, are grant programs. They are the Advanced Technology Program, ATP, and Manufacturing Extension Partnership, MEP. There has been much discussion of the value of these programs to the competitiveness of small manufacturers in high-technology ventures. Regardless of the merit of NIST programs, it is clear to me that these programs alone will not make our nation more competitive. Any effective competitiveness strategy must also include appropriate deregulation, tax incentives, antitrust, and product liability reform. Standards are being used increasingly by foreign governments to thwart the entry of some U.S. industries into the markets. I am one who believes that standards will become an increasingly potent weapon used in trade to hinder market entry by U.S. firms or to retaliate against the U.S. Before any decision is made to sell the NIST laboratories to the private sector, the effective of privatization on the competitiveness of U.S. industry must be weighed carefully. Certainly, there is a model for a private entity establishing standards for industry. BellCorp, formerly part of AT&T, was spun off when AT&T was broken up. Bell Corp has since set standards for different competitors competently and efficiently ever since. A private entity with a proper transition period may be able to run the NIST labs effectively, but we are going to have to move into that gradually. Mr. Chairman, I see I have a red light. I know how busy this Committee is. I have several more pages I will put in the record regarding the National Telecommunications and Information Administration and their relationship, the possibility of transferring some of those to the FCC and further reorganization ideas. I would like to submit this, plus I would also like to submit a memorandum that Ted Stevens and I wrote to you, Mr. Chairman, and your Committee for the record, and I thank you very, very much. Chairman ROTH. Thank you for being here today, Senator Pressler. We appreciate your insightful observations. We look forward to working with you as we proceed with this matter. At this time, I would like to call forward Senator Rockefeller. You full statement will be included as if read. Senator ROCKEFELLER. Thank you, Mr. Chairman. |