Phil Gramm

Mr. GRAMM

Mr. GRAMM. Mr. President, in case any of our colleagues are watching, let me try to outline what we were going to do tonight. Senator Sarbanes and I are going to make opening statements tonight. It is our understanding that no one else wishes to speak tonight. Then it would be our objective to reserve the remainder of our time for the debate tomorrow. Then the Senate would begin the process of shutting down for the evening.

Mr. GRAMM. Mr. President, it is with great pleasure that under the previous agreement I call up the conference report to accompany S. 900, the Financial Services Modernization Act of 1999.

Mr. GRAMM

Mr. GRAMM. Mr. President, if there is no further business to come before the Senate, I now ask unanimous consent that the Senate stand in adjournment under the previous order.

Mr. GRAMM

Mr. GRAMM. Mr. President, I now ask unanimous consent there be a period for the transaction of routine morning business with Senators permitted to speak for up to 10 minutes each.

Mr. GRAMM

Mr. GRAMM. Mr. President, I ask unanimous consent that the bill be read a third time and passed, the motion to reconsider be laid upon the table, and that any statements relating to the bill be printed in the Record.

Mr. GRAMM

Mr. GRAMM. Mr. President, I thank our colleague from Nevada for his amendment and for withdrawing it, and for joining our effort to try to pass the Export Administration Act. As some of our colleagues will be aware, there have been 11 failed attempts to pass a new Export Administration Act since the last one expired. We now find ourselves in a position where despite the Cox report, despite concerns that have been raised about lost American technology, and despite the growing obsolescence of the residual permanent law the administration is forced to operate under, we have not reauthorized the Export Administration Act. I think it is a terrible indictment of the Congress that we have not done that. That is the bad news. The good news is that under Chairman Enzi we have put together an excellent bill. Chairman Enzi has done something I am not aware of any Member of the Senate ever doing. He has gone over and sat through meetings of the current bodies of the executive branch that make decisions related to export licensing. So he has, through practical experience, come to understand the process. He has provided leadership whereby we have put together a bill. He has provided leadership where we literally sat down with everybody who has any interest in this bill. We have had numerous meetings. We have let people submit concerns in writing. I believe we are on the verge of having a bill that is uniformly supported. What our bill tries to do is simple to say and very difficult to achieve. We have a conflicting interest. We want to sell things on the world market which embody new technology because those are items that we have a comparative advantage in producing, and they are items that are high-wage items in the production process. Finally, they represent commodities that will dominate the future of the world economy. So we want to be the leader in selling these types of goods. On the other hand, we have legitimate concerns about technologies. If they are in the hands of people who may be potential terrorist nations or potential enemies of the United States, they could end up hurting our national security. We have taken those two conflicting concerns, and we have put together a bill. The two major features of it are the following: One, we define a brand new concept called mass marketing. It is a very simple and powerful concept. It says if an item is for sale at Radio Shack, if you can buy it over the web site of Dell Computers, if it is generally being marketed in the United States and around the world--though you might wish that it is possible that all of this could happen without it falling into the hands of a potential adversary--the bottom line is there is no practical way at that point that you can keep anybody from getting the technology. So we take mass marketed items out of the process and, hopefully, reduce the number of different items that are under licensing in any given year from about 10,000 to 1,000 so that we could put the focus of attention where it belongs. Second, under current law, if companies are accused and found guilty of wrongdoing in China, despite numerous accusations, all of which carry some penalties, the maximum fine under current law would be $132,000, which for corporate America is a relatively insignificant amount of money. Under our bill, we have a $10 million fine per violation. We also have for a conscious, knowing violation where individuals are involved, prison sentences of up to 10 years, and in aggravated cases, life in prison. So there is a dramatic strengthening of current law. I agree with our colleague from Nevada. This needs to be adopted this year. I believe we have eliminated opposition to it. It simply is now our task to provide leadership where we can bring the bill to the floor later this week, or early next week, and get an agreement that this is not going to become a vehicle for a bunch of unrelated amendments. Having said that, let me stop before I sit down. I want to say a couple of words about the African trade bill. First of all, I congratulate the chairman of the Finance Committee for his leadership on this bill. I endorse the African trade bill. Our President went to Africa, did an extensive tour, and talked about what we could do to try to break the bonds of poverty--this crushing, grinding poverty--that people in sub-Saharan Africa face. I think the President rightly understood, if we take all the important aid provided by all the countries in the world and combine them, we have about $40 billion a year. There are 700 million people in sub-Saharan Africa, so if they get all the foreign aid provided by all the countries in the world, we will have relatively little impact on them, and there is relatively little evidence that foreign aid has produced economic development in areas where no economic development ever existed before. As a result, the President proposed bringing in the most powerful tool for economic development ever to evolve in the history of mankind; that tool is trade. The President proposed we open up a fiber trade agreement in textiles with sub-Saharan Africa. I remind my colleagues, under existing agreements internationally, by the year 2005, under the Multifiber Agreement, we will no longer have quotas on tariffs anywhere in the world. We are not talking about a permanent advantage for sub- Saharan Africa; we are talking about giving them a little bit of a head start. Let me briefly define the problem. The average per capita GDP of countries in sub-Saharan Africa is $490 a year; 40 percent of the people in sub-Saharan Africa earn less than $1 a day. The current estimates are, we import about .86 percent of textiles and apparel imported into America from sub-Saharan Africa. The International Trade Commission has estimated that if they devoted their productive capacity to textiles, under this agreement, still within 10 years we couldn't expect more than 2 percent of our textile imports to come from sub- Saharan Africa. We are talking about expanded trade, and we are talking about trade with countries that have no significant capacity to impact American imports of textiles. I believe this bill is needed. I think it is a step in the right direction. I remind my colleagues, for any country in sub-Saharan Africa to take part in this program, they have to do the following three things: they have to make progress toward a market-based economy, they have to institute a democratic society, and they have to open their trading system. These are all actions that will mean stronger economic growth in Africa, that will mean greater human happiness in Africa, and that will ultimately mean a greater demand for American goods and services. I believe this is an important bill. I believe it should be adopted. I am hopeful we will adopt it today. I intend to vote for cloture and for final passage. There is one provision in this bill in the Senate that is not in the House bill. That is a provision that requires, for textiles and apparel to be imported from Africa, they have to be made out of American fabric and yarn. That same agreement is in the Caribbean Basin Initiative, which I support. But the problem with Africa is that given the transportation costs, and given that their ability to market products is basically based on using longer strand cotton and basically producing different types of textiles that would be relatively new to the American market, I believe the provision in the Senate bill for all practical purposes kills the African trade bill. I am not going to offer an amendment to strike this provision because it is not in the House bill. I hope it will be dropped in conference. We are talking about a relatively small effort to benefit 700 million human beings. The worst thing that could come out of it is that we would have greater diversity in the textile goods that would be for sale in American stores and they would be at lower prices. I can't see anything but good that can come out of this. Anywhere in the world, when we can encourage people to move toward a market-based economy, toward a democratic society, and toward open trade, we are doing things that benefit them and benefit the world. These are important bills before the Senate. I am for them. Trade is vitally important. It is an amazing thing to me that, due to ignorance and prejudice, we continue to restrict the importation of goods and services into America. Why we should give government the ability to impose a tax on working Americans and deny them the ability to purchase, with the fruit of their own labor, better and cheaper goods if they are produced abroad, I don't know. That the greatest trading nation in the world would continue textile laws that cost every working American family of four $700 a year is an absolute outrage. Something needs to be done about it. This is not going to solve that problem, but it is the right thing to do. I hope it will become the law of the land this year. I am hopeful it will. I yield the floor.

Mr. GRAMM

Mr. GRAMM. In essence, the Social Security Administration says the proposal acts as if there is a transfer that can be invested, but since it cannot be invested, what you are doing is simply giving Social Security more meaningless IOUs, and the net result is no impact on anything. When the President said in his State of the Union Address now 3 years ago, ``Save Social Security first,'' we never heard a program as to how we were going to save it. When he said last year, ``Save it now,'' we had all of these meetings and all of these proposals, and the President ultimately proposed nothing. Now what we are seeing, sadly, is another gimmick where we do not do anything until the year 2011, and then it is simply a meaningless IOU where the Government owes Social Security but no money is available to pay for it other than if we raise taxes or cut Social Security benefits or cut another program in the future. I thank the Senator for yielding. If there has ever been a fraudulent proposal, this is it. The tragedy is, the President had an opportunity to lead on this. There were Democrats and Republicans willing to follow him, and he did not do it.

Mr. GRAMM. Let me pose another question. I have a memorandum to the chief actuary at the Social Security Administration which analyzes the President's proposal. I will read one part of a paragraph that analyzes the point the Senator from New Mexico outlined, and that is, the President is saying that in the future, long after it could have any impact on the amount of money we are spending now, we should pay the Social Security Administration for the interest savings we are accruing in the budget from using Social Security surpluses to pay down the debt. When the Social Security Administration in their memorandum of October 23 analyzed that, they concluded the following: Calculation of the assets in the combined trust funds on September 30 of the year 2011 through 2015 would treat all amounts transferred as if-- ``As if''-- they had been invested in special obligations of the United States. This provision is not likely to have any effect under enactment of this bill alone because the managing trustee of the Social Security trust funds is not authorized to invest any asset of the fund in stock, corporate bonds under either current law or this proposal.

Mr. GRAMM. When do you think the President starts this godzilla of all phony proposals?

Mr. GRAMM. Exactly. Actually, he begins on 2011 and then changes the formula on 2015. The first point is that one indication it is phony is that he does not start it until enough time has elapsed that it will have no impact on anything we are doing now.

Mr. GRAMM. Will the Senator entertain a question or two about Social Security?

Mr. GRAMM. We are, obviously, all aware Senator Domenici has been chairman of the Budget Committee longer than anyone has ever been, or ever will be again, under our new rules. We know he, of all people, knows how the budget works. If you wanted to write a proposal and implement it in the future, after its potential impact on anything we are doing now would be zero, given our budget rules about things that affect taxes and entitlements, when would you let it go into effect?

Mr. GRAMM. I will tell you. Under our current rules, we budget on entitlement and taxes for 10 years; right?

Mr. GRAMM. So that anything we do today that has any effect prior to 2011 has an impact on our current budget.

Mr. GRAMM

Mr. GRAMM. Mr. President, I wish to bring to the attention of my colleagues one of the most insightful articles that I have read in regard to the most effective way to promote health care and patient's rights. Written by Mr. M. Anthony Burns of Ryder System Inc., the comments appear on the op-ed page of yesterday's Washington Post. Mr. Burns speaks as the CEO of a company which provides health care benefits for 80,000 employees and family members. At a time when courage appears to be in short supply, it is refreshing to find a person who is able and willing to publicly examine a complex issue in such a lucid, thoughtful manner. I encourage all my colleagues to read and consider carefully the analysis offered by Mr. Burns. I ask unanimous consent that the article be printed in the Record.

Mr. GRAMM

Mr. GRAMM. Mr. President, I move to reconsider the vote.

Mr. GRAMM

Mr. GRAMM. I am pleased to discuss this legislation with my colleague from Michigan.

Mr. GRAMM. Yes it would. I would also say to the Senator from Michigan that, with this modification, I would have no further objection to the consideration of this bill. Also, I want to once again express my support for what the Senator is seeking to accomplish and pledge to assist him in this effort.

Mr. GRAMM. I thank my colleague from Michigan.

Mr. GRAMM. As I understand it, one proposed amendment to S. 761 contains language which would preclude the use of electronic records by business in instances where there is a state law or regulation affecting that record and that notification and disclosure requirements in particular would be precluded from being sent electronically.

Mr. GRAMM. That, Mr. President, is what causes some concern. I would say to the Senator from Michigan that I understand what your legislation intends to do and I support the goals of this bill, but notification and disclosure requirements are the responsibility of the Banking Committee. At this time, the Federal Reserve is formulating regulations for the use of electronic records by banks and mortgage providers, and notification and disclosure requirements will be a part of the proposed rules. For that reason, I believe the Banking Committee should have the opportunity to consider this matter.

Mr. GRAMM

Mr. GRAMM. Would the Senator yield?

Mr. GRAMM. We will be voting on the motion to table. At that point, the point of order will lie. All we are going to do is cost every Senator 15 or 20 minutes. It will not change anything.

Mr. GRAMM. Would the Senator from Pennsylvania yield?

Mr. GRAMM

Mr. GRAMM. I move to reconsider the vote.