David Dreier

Mr. DREIER

Mr. DREIER. Mr. Speaker, one of the goals of the new Republican majority in Congress is to evaluate the performance and objectives of all federal programs and agencies. In undertaking such evaluations, I believe two fundamental questions need to be answered: First, what aspects of the program or agency continue to serve a beneficial public policy purpose? Second, how can we redesign the program or agency to perform the useful functions in a cost-effective manner? Today, Representative Joel Hefley, vice chairman of the Committee on Small Business, and I have introduced H.R. 2125, the Small Business Administration Transfer Act, which addresses these two questions in a positive way. In conversations with small business owners and their representatives here in Washington about the role of the Small Business Administration, I am told consistently that the two areas where the Federal Government can be helpful are in providing access to capital and a voice at the highest levels of government. The remaining functions of the Small Business Administration have little to do with, or actually hinder, small business growth. The Small Business Transfer Act strengthens the programs that matter most to small business while saving taxpayers $3 billion over 5 years. Under the legislation, the present Small Business Administration, with its outdated and heavily bureaucratic regional, district, and field structure, would cease to exist on October 1, 1996. An Office of Small Business Advocacy would be established in the Executive Office of the President. This office, which would function in a manner similar to the SBA's Office of Advocacy, will give small business a voice inside the White House. The bill also establishes an Office of Small Business Lending in the Department of Treasury. The office would consist of an Under Secretary, Deputy Under Secretary, and no more than 200 auditors who would administer a small business general loan guarantee program. All other SBA credit programs and revolving funds would be transferred to this office for servicing and liquidation. The guaranteed loan program would function like the current Preferred Lenders Program, whereby the lender would have the complete authority to make close, service and liquidate loans. Maximum loan amounts would remain the same, but the guaranteed portion may not exceed 75 percent of the financing outstanding at the time the loan is made. No direct or immediate participation loans could be made. To be eligible for a guaranteed loan, a business must meet: First, the credit elsewhere test, denied credit by two lending institutions; second the definition of a small business; and third, the requirements of Sec. 7(a)(6) of the Small Business Act that all loans be of such sound value or so secured as reasonably to assure repayment. For lenders to be eligible to participate in the program, the lender must maintain at least a 6-percent capital-to-asset ratio. The bill contains language explicitly subjecting lender loan portfolios to an annual compliance review conducted OSBL auditors. As an option, this could be done as part of an institution's overall compliance review conducted by the appropriate bank regulator. The bill also contains language capping taxpayer exposure with excess or above historic average losses on each lender's portfolio. For example, if the lender's portfolio is 10 percent above the industry's historic loss average, the guarantee on loans originated by the lender would fall by 10 percent--from 75 percent to 68.5 percent. The Treasury Secretary would be required to collect a minimum guarantee fee of \1/2\ of 1 percent of the amount of the deferred participation share of any guaranteed loan. The lender would be permitted to finance the guarantee fee as part of the loan. The Treasury Secretary would be required to adjust the guarantee fee, subject to the normal reporting requirements, to ensure a guarantee fund that is self-financing. The reforms made to the loan guarantee program respond to a December 1992 General Accounting Office study of Housing and Community Development issues. The study made the following observations: There has been no recent assessment of what sector of small business, if any, would receive financial assistance if SBA did not exist. Nor has there been a recent assessment of the economic impact that has resulted from billions of dollars in Federal guarantees that SBA has provided to small businesses. Yet in fiscal year 1992, SBA almost doubled the value of the business loans that it guaranteed--from $3.8 billion in fiscal year 1991 to $6.4 billion in fiscal year 1992. Our work has shown that SBA's loss rate is greater than that of private lenders and that SBA has not adequately overseen the operations of lenders receiving government loan guarantees. Mr. Speaker, the reason the GAO's assessment of the SBA is so negative is that the agency's mission statement is faulty. In 1985, then OMB Director David Stockman called the SBA a billion-dollar waste--a rathole. Ten years later, the agency has undergone numerous reorganizations and credit reforms that have brought down default rates and improved the operations of credit programs. But the agency is still a failure because of the faulty premise that Government can create private sector jobs. Even if the Government could create private sector jobs, the SBA's programs are inconsistent with that mission. Instead, what we have is an agency that reallocates credit to the least credit worthy; provides noncompetitive contracts to millionaire minorities at the expense of small business; plants trees at a cost of up to $1,200 per tree; and provides $70 million a year in grants to universities, which is the last place a small business person goes for advice. In his book ``The Effective Executive'' Peter Drucker, my professor at the Claremont Graduate School, referred to an order by President Johnson that all Government agencies adopt program reviews to weed out obsolete and unproductive work. ``This is a good first step, and badly needed,'' Drucker said. ``But it will not produce results as long as we maintain the traditional assumption that all programs last forever unless proven to have outlived their usefulness. The assumption should rather be that all programs outlive their usefulness fast and should be scrapped unless proven productive and necessary. Otherwise, modern Government, while increasingly smothering society under rules, regulations, and forms, will itself be smothered in its own fat.'' Mr. Speaker, the Small Business Administration has clearly outlived its usefulness. While I also question whether a guaranteed loan program remains productive and useful, there are legitimate concerns that excessive Government regulation of lending institutions has made it cost-prohibitive to lend to many legitimate small businesses. Until those regulations can be eased, a case can be made for maintaining a loan guarantee program. The Small Business Transfer Act offers a unique opportunity to make Government more effective by expanding small business capital, reducing taxpayer risk, and giving small business an antitax and antiregulatory voice at the highest level of Government. For these reasons, Mr. Speaker, I urge my colleagues to join us in cosponsoring H.R. 2125.

Mr. DREIER

Mr. DREIER. What I said, if I can reclaim my time, what I said is under an open amendment process we are all allowed the chance to offer striking amendments.

Mr. DREIER. Yes, to transfer money into a program that does not even exist.

Mr. DREIER. Reclaiming my time--if I could reclaim my time, we had a very healthy exchange that took place between the chairman of the authorizing subcommittee that deals with this issue, the gentleman from New York [Mr. Lazio], and it seems to me that there needs to be recognition that an opportunity to deal with this is on the horizon. Now my friend has raised the issue which I was not even going to talk about in my remarks, but let us look at the issue of drugs as it has existed over the past several years, and, as has been pointed out time and time again, we have seen during the Reagan and Bush administrations a decline in drug use in this country, but since we have seen the election of President Clinton there has been an increase in drug use in this country.

Mr. DREIER. If I can continue to hold onto the time----

Mr. DREIER. Let me just say that we have seen that increase. We are working to deal with the issue of authorization. We are trying to deal with this question head-on. But the fact of the matter is, there have been tremendous chances for Members of the formerly-in-the-majority-party to deal with this issue through authorization, and it has not been dealt with. So in any way to claim the gentlewoman from Ohio [Ms. Kaptur] is denied her opportunity to offer striking language is way off base. Let me just say I want to compliment the gentleman from California, Chairman Lewis, for the superb job he has done in dealing with the veterans, as the gentleman from Tennessee, Mr. Quillen, has raised this, and I know the gentleman from New York, Mr. Solomon, has, and also with an issue that is very important to me, and that happens to be the science question. I believe as we charge towards the millennium, we have to recognize our responsibility in further research and development in the area of the sciences. The gentleman from California [Mr. Lewis] has done a superb job in dealing with that. This is an open rule. It is one that deserves the support of the full membership in a bipartisan way. We complained on our side of the aisle in the past when we did not have an open amendment process. Frankly, we have brought that forward. We hope very much we can move ahead with this extremely important piece of legislation.

Mr. DREIER. Mr. Speaker, I thank the chairman emeritus of the Committee on Rules, my friend from Kingsport, TN, for yielding this time to me, and I rise in very strong support of this rule. I have been listening for the last few minutes to the statements which have been coming from our friends on the other side of the aisle, the gentleman from Minnesota [Mr. Vento], the gentleman from Michigan [Mr. Dingell], and others who are in some way implying that this is less than an open rule. Mr. Speaker, the chairman of the Committee on Rules, the gentleman from New York [Mr. Solomon], has made it very clear this is an open rule. Any of these Members, any of these Members who are complaining about this process, have an opportunity to offer striking amendments. They can do that under the open amendment process.

Mr. DREIER. Mr. Speaker, I yield to the gentleman from Massachusetts, and I look forward to his remarks.

Mr. DREIER

Mr. DREIER. Mr. Chairman, this is a very important moment. For the first time the Federal Government has stepped up to the plate to acknowledge its responsibility with the issue of illegal immigration. There is a perception this is simply going to benefit California. I was joking with the gentleman from West Virginia about that a few minutes ago. The fact of the matter is California will proportionately get less than any other State involved in this based on the number of illegals we have in California, and the figures that have been thrown about here, especially by my friend from West Virginia, are way off base. The best example was Florida, where we have seen an increase from 13 to 80.7 million as the cost for the incarceration of illegals in that State. This is a very serious Federal problem. Let us defeat the Mollohan amendment and move ahead with the committee position.

Mr. DREIER

Mr. DREIER. Mr. Speaker, I thank my friend, the distinguished chairman of the committee, for yielding me this time. Today is a great day for the people's House, because this concept, which was first initiated by Speaker Gingrich following a conversation with the mayor of San Diego and several other State and local elected officials, established corrections day. The concept being very simply that we should look at some of the most preposterous ideas that are out there by way of Government regulation, that have been imposed from Washington, DC on State and local governments and other entities, and deal with them. A three-fifths vote is required, and we will have from this institution taken our action to actually eliminate it. This issue has raised some controversy on the other side of the aisle, and some statements have been made that frankly need to be addressed. My very good California colleague from the San Jose area up north has said that this is pure politics. Well, Mr. Speaker, this is not pure politics. As was said by the gentleman from Tennessee, this was addressed earlier by a vote when this institution was under the control of what is now, I am happy to say, the minority party. When the Democrats controlled this institution, they took action providing this waiver, yet the Environmental Protection agency has still been screwing around with this. We have now gotten to the point where we want to take the firm action that is necessary to deal with it, and that is what we are doing today. It has not been handled adequately. To call it pure politics is way off base. Why? Because the bipartisan effort has come together to deal with this question. Dr. Ravel, in his last words to Brian Bilbray, who has worked long and hard on this, who was a member of the San Diego County Board of Supervisors, said that this issue needs to be addressed. He is not some right-wing conservative Republican who is playing pure politics; the father who discovered the whole greenhouse effect. He said this to the gentleman from California [Mr. Bilbray] before he passed away. My colleagues, the gentleman from California [Mr. Cunningham], the gentleman from California [Mr. Hunter], and others have worked on this. This is the responsible thing to do. We should move forward and do it immediately in a bipartisan way.

Mr. DREIER

Mr. DREIER. Mr. Speaker, I thank the chairman of the Committee on Rules for his very kind remarks. As I look in the Chamber here, it was, believe it or not, exactly 1 year old today, July 20, 1994, that my colleague, the gentlewoman from California, Ms. Pelosi, my colleague, the gentleman from Virginia, Mr. Wolf, my colleague, the gentleman from New York, Mr. Solomon, the gentleman from Maryland, Mr. Hoyer, the gentlewoman from Texas, Ms. Eddie Bernice Johnson, our colleague, the gentleman from Arizona, Mr. Kolbe, and the gentleman from Oregon, Mr. Kopetski, our former colleague, joined in the first bipartisan, bicameral debate on a very important question that came forward. That question was, should U.S. trade policy be used to enforce human rights? I would say to my colleagues who participated in that, they remember very well that we had a difficult time determining exactly what the exact question was going to be. We all agreed, we all agreed that U.S. trade policy should be used to promote human rights, but we decided to take the negative position, that U.S. trade policy should not be used to enforce human rights. That is for a very simple and basic reason. I remain convinced that trade promotes private enterprise, which creates wealth, which improves living standards, which undermines political repression. If we look at the very serious challenges that lie ahead for the most populous Nation on the face of the Earth, a country which has five times the population of the world's only complete superpower, the United States of America, we clearly have an obligation to remain engaged. Right here in the United States, we know full well that there are thousands and thousands of jobs that depend on our exports to the People's Republic of China. In fact, 360,000 jobs hinge on our exports, so clearly, cutting off trade with China would jeopardize economic growth right here in the United States. Quite frankly, I believe that it is extraordinarily important for us to look at the gains which have been made in China over the past several years, since we worked to deal with this issue of engagement. As my friends here on the House floor know full well, I take a back seat to no one when it comes to demonstrating outrage at the issue of human rights violation. The gentlewoman from California [Ms. Pelosi], and I joined with the gentleman from Virginia [Mr. Wolf] and others in marching, following the Tiananmen Square massacre from right here in the Capitol up to the Chinese Embassy to protest the Tiananmen Square massacre. The fact of the matter is we have to realize that if we are going to continue to deal with the improvement of human rights, there is nothing, nothing that we could do to jeopardize it in a greater way than to bring to an end, bring to an end the engagement policies that we have had over the past several years. Mr. Speaker, last year I went with my father and traveled throughout China, and had fascinating experiences there. As I talked to people who worked, peasants and others, clearly they carried the strong message that as the old leaders of China fade from the scene, they do not want to see us leave their country economically devastated. It is for that reason that they encouraged us to maintain MFN with China. As we also look at the situation which exists there, it is very clear that there are many things that we as a country can continue to do to improve the quality of life of the people of China. Just this week we received a letter from Jack Valenti, our friend with the Motion Picture Association of America, in which he talked about that to near record crowds; the movie ``Forrest Gump'' is playing in China. Let us think about the movie ``Forrest Gump,'' that great American drama, set with the backdrop of 20th century American history. What an amazing message to have moving throughout the country of 1.2 billion people living today under political repression. My hometown newspaper, the Los Angeles Times, just this week had a very important article talking about individuals within China from all across the economic spectrum who are benefiting from the kind of engagement that we have going on today. The benefits have been very, very great: black and white TV's are even appearing in caves in China. When one thinks about that kind of exposure to the West, we are clearly, clearly on a path toward improving the situation there. I hope very much that we will be able to now move ahead in a bipartisan way. This is a new day, because there is recognition that while we can never tolerate the reprehensible human rights violations, the violation of Harry Wu's rights and others' rights, we need to do everything that we possibly can to move ahead with this very important policy of engagement. I thank my friends for working in a very close bipartisan way with the gentleman from California [Mr. Bereuter], and others to bring this about.

Mr. DREIER

Mr. DREIER. Mr. Speaker, I thank my very good friend from Nebraska, and rise in very strong support of the Bereuter resolution. The gentleman has worked long and hard on this issue, along with many of our colleagues, and I believe that this is a very important day in the history of the United States Congress and in world history. Mr. Speaker, speaking of history, when I look back on one of the most interesting years in the last quarter of a century, 1989 has to stand out. We observed that year the crumbling of the Berlin Wall. We saw the tremendous changes take place as we saw the first transition of one democratically elected government to another in El Salvador. We saw political pluralism emerge in Nicaragua. We saw great speeches made right here in this Chamber by Vaclav Havel from then Czechoslovakia, from Lech Walesa, the leader of Poland, an electrician from the Gadansk Shipyard. To me, one of the most moving speeches came from the first democratically elected President in the history of South Korea. Now, one of the arguments that I have made time and time again, and many of our colleagues have joined in this, is if we look over the past several years at countries where tremendous political repression has existed, we chose as a nation not to impose trade sanctions, countries like Taiwan, countries like Argentina, countries like Chile, and nations like South Korea. Well, on October 18, 1989, just a few months after the tragic Tiananmen Square massacre, President Roh Tae Woo stood right behind me here. He does not speak English at all, but he, out of respect to this body, delivered his speech in broken English. He phonetically delivered his statement to us. And there was an item in that which to me really demonstrates where we stand today and what it is that we are trying to do. He said: The forces of freedom and liberty are eroding the foundations of closed societies. The efficiency of the market economy and the benefits of an open society have become undeniable. Now these universal ideals, symbolized by the United States of America, have begun to undermine the fortresses of repression. Mr. Speaker, that statement was made in 1989, right here in this Chamber, and we have seen tremendous changes take place in the ensuing 6 years. We proceeded during that 6-year period with engagement with China with most favored nation trading status. And my colleagues are right in talking about the fact that things have not necessarily gotten better. They have in many ways gotten worse. But it is important for us to look at some areas of improvement. Remember, we are talking about a nation that has a history that spans four millennia. Now, we cannot expect a change to take place overnight, but we do realize that exposure to western values has gone a long way towards improving things. We have seen the establishment of a stock market in Shanghai. The reports to come from that have been incredible. Obviously any economic visitor in Shanghai would love to have the opportunity to see how their stocks are doing. Well, how do they find those reports? It has to be printed in the newspaper. One of the things that the government of China is having a very difficult time doing is keeping any kind of political reporting out of that information that is disseminated through the free flow of economic activity in Shanghai. Mr. Speaker, it seems to me that we must realize that trade promotes private enterprise, which creates wealth, which improves living standards, which undermines political repression, and that is exactly what is happening here. We are not going to change things overnight. We have a long way to go. But if we believe for one moment that shutting the door with China will all of a sudden get Harry Wu released, that is preposterous. If we believe that closing the door will improve the plight of those many people in China who are seeking economic opportunity, we are crazy to believe that. The two southern provinces of Guangdong and Fujian see Chinese people literally clawing their way to get in there. Why? Because that is the place that they can find economic opportunity. So I believe that this is a very balanced approach that the gentleman from Nebraska [Mr. Bereuter] is taking, and I again congratulate him for all that he has done, the work of the Committee on International Relations, working closely with members of the Committee on Ways and Means. I believe that we have a positive solution to a very, very tough problem. Mr. Speaker, this is a great day. This is an historic day as we look towards the most important relationship between two countries on the face of the Earth. I support the Bereuter resolution.

Mr. DREIER

Mr. DREIER. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, first let me say that again this is an open rule, and the gentleman is right that we protect the provisions that deal with the issue of meat inspection. While I am not an expert myself on meat inspection, I am very expert on consumption. With that, I should say that I am convinced, based on the action that was taken by the committee, that there is a tremendous effort that has been made in the area of inspection. Mr. Speaker, I yield such time as he may consume to the gentleman from New Mexico [Mr. Skeen], the distinguished chairman from the Subcommittee on Agricultural Appropriations, to deal with this issue.

Mr. DREIER

Mr. DREIER. Mr. Speaker, I ask unanimous consent that the following [[Page H 7030]] committees and their subcommittees be permitted to sit today while the House is meeting in the Committee of the Whole House under the 5-minute rule. The Committee on Government Reform and Oversight, the Committee on the Judiciary, and the Committee on Resources. It is my understanding that the minority has been consulted and that there is no objection to these requests.

Mr. DREIER

Mr. DREIER. Mr. Speaker, that is the reason that I was very careful in maintaining time over here so that I would get those wonderful words from the distinguished minority manager of this rule. Mr. Speaker, I yield back the balance of my time, and I move the previous question on the amendment and on the resolution.

Mr. DREIER. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, as I mentioned in my opening statement and in response to statements from the gentleman from New York [Mr. Nadler] and the gentleman from Michigan [Mr. Dingell], this amendment would simply permit the House to debate a specific group of 9 amendments for up to 20 minutes each, rather than the 10 minutes provided for under the pending rule. Debate time on these amendments shall be equally divided and controlled between the proponent and an opponent. As the new rule already stipulates, the amendments shall be considered as read, are not subject to amendment or to a demand for a division of the question. Mr. Speaker, as I was saying earlier, we are offering this amendment in a spirit of bipartisanship, recognizing that certain issues that are associated with this bill, such as funding for the arts and humanities, deserve additional time on the floor for debate. As I have said, we have doubled the amount of time on that. This amendment was developed in close consultation and cooperation with the minority and I urge my colleagues to support this fair and straightforward amendment. Mr. Speaker, I yield to the gentleman from California [Mr. Beilenson]

Mr. DREIER. Mr. Speaker, I offer an amendment.

Mr. DREIER. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, we did hear from my friend from Woodland Hills that there is support of this rule. I guess I am speaking for the leadership on both sides of the aisle in stating that there is strong support for this rule. I hope that we can pass it. Amendment Offered by Mr. Dreier

Mr. DREIER. Mr. Speaker, I thank my friend for yielding. I would like to clarify one more time the time for debating the amendment to which my friend is referring has been doubled, or will be when I offer an amendment at the end of the debate. We are doubling the amount of time.

Mr. DREIER. Mr. Speaker, will the gentleman yield?

Mr. DREIER. Mr. Speaker, if the gentleman will continue to yield, we simply did that at the request of the minority.

Mr. DREIER. Mr. Speaker, I would simply like to clarify a statement made. In my opening statement, I said that at the end of this rule debate, I will, having a request that came from Members on my friend's side of the aisle, ask for a doubling of the amount of time for debate on nine amendments, including amendments that were raised. If I could continue, I say that because we did have an agreement of 10 minutes per side, a total of 10 minutes. Now we have doubled that, because Members on your side made that request of us.

Mr. DREIER. Mr. Speaker, it is my great pleasure to yield 2 minutes to my very good friend from Michigan, Mr. Dingell, pending which I hope he will yield to me just a moment so that I might clarify some of the things the gentleman has said.

Mr. DREIER. Mr. Speaker, I yield 1 minute to the gentleman from Ohio [Mr. Regula].

Mr. DREIER. Mr. Speaker, I yield myself such time as I may consume to express my very deep appreciation to my friend, the gentleman from Martinez, CA, the former chairman of the authorizing committee, for his very kind words in support of our efforts to proceed with the open amendment process. He has described us as being both cynical and deceitful. The fact of the matter is when we began this appropriating process, we had a wide- open rule that had the goal of allowing every Member to participate in this process. Only when we had to stay in session very, very late at night and deal with this process of delay did it lead us to conclude that this was necessary. Mr. Speaker, I yield 6 minutes to the distinguished gentleman from Ohio [Mr. Regula], the chairman of the subcommittee. (Mr. REGULA asked and was given permission to revise and extend his remarks.)