Fritz Hollings

Mr. HOLLINGS

Mr. HOLLINGS. Madam President, I ask unanimous consent the order for the quorum call be rescinded.

Mr. HOLLINGS

Mr. HOLLINGS. Madam President, with respect to the Andean trade compact and its re-enactment, and particularly with respect to the intent to put fast track on the particular Andean trade agreement, the contention is that without this fast track, we are missing out on all of these wonderful deals. I wish I had time to give the litany of the wonderful deals on how the United States of America--from the Tokyo Round, Uruguay Round, right on down to the present scheduled rounds with the WTO and otherwise--has been going out of business. Literally, intentionally, we are going out of business, I would say. What we were trying to do was win the cold war. We wanted to defeat communism with capitalism. We sent over the Marshall Plan, with technology and expertise, and it worked. Everyone is happy with that. Now, after 50 years, hometowns have been totally depleted of any industrial manufacturing. Let me get right to the point and bring out the actual facts, using not just the record made here by the U.S. Trade Representative, but by the morning news. Let's look and find out what we are talking about with respect to trade agreements that we have been missing. Well, if you look at the recent edition of the 2001 Trade Policy Agenda of the President of the United States on the trade agreements program, you will find in the glossary in the back that there are some 200 trade agreements made without fast track. Do I need to remind the Senate that we just voted on--without fast track--a free trade agreement with Vietnam? Do I need to remind the body that we just voted on a free trade agreement with Jordan? I supported both of those. Do I need to remind them that we passed the Sub-Saharan Africa trade agreement, the Caribbean Basin Initiative Agreement, and the 1997 WTO telecommunications agreement? You can go down the list--and they are all listed in here. We have made some 200 agreements in the last 10 years--all without fast track. We didn't give total fast track authority to President Clinton because we wanted to deliberate and make sure the economy of the United States was protected. And it has been working. But look not only at the red book here, but with respect to the national news, in the Washington Post, it said this last Thursday: United States signs trade agreement with eight African nations. There are eight more trade agreements. We aren't missing out on all these so-called trade agreements. I wish the chairman of the Finance Committee could read the morning paper. He could find out that we did it without fast track. According to the financial news--let me read this to you. This is in the morning Financial Times: John O'Leary, former U.S. Ambassador to Chile and campaigner on a bilateral accord, said yesterday he expected a deal to be signed this year whether or not Mr. Bush won trade negotiating authority. . . . ``It's not a matter of consequence who is first past the finishing line,'' he said. ``But the deal with the EU is helpful for Chile because it gives fresh momentum to their negotiations with the United States.'' We read it. If they brought a Chilean trade agreement--I would have to look at it obviously, but why would I vote for it? They have relatively the same standard of living. They have a respected judiciary, they have property rights, they have labor rights, and they are strong on the environment. I voted for NAFTA with Canada because we have relatively the same standard of living. But this total farce that we are missing out on agreements all over the countryside is just wrong, wrong, wrong. The problem is the loss of jobs. You only have to go to the morning's paper. I hope the chairman, who just left the floor, will listen to this one. Of course, right now the best bet for the next few quarters is probably a jobless recovery in which the gross domestic product rises but unemployment stays high. After all, the economy needs to grow at about 3.5 percent just to prevent the unemployment rate from rising, and the odds are at least even that the growth will fall short of that mark. The funny thing is that a slow jobless and profitless recovery is exactly what level-headed people, such as economists at the Federal Reserve, have been predicting for a long time. So how did a far more bullish view become not just prevalent but more or less mandatory on Wall Street? How, with the business landscape still strewn with the rubble from the bubble, did that manic optimism so quickly become popular again? It seems that hype springs eternal. That is the morning news, and that is why the Senator from South Carolina only asks for just a closer look. Let me fulfill my obligation under the Constitution. Article I, section 8, says that--not the President of the United States, not the Supreme Court--but this branch of Government, the Congress of the United States, shall regulate foreign commerce. Now, these pollster politicians who come to Washington and crowd around take the easy course. They say: Free trade, free trade, fast track, fast track--and they don't have to take any responsibility. So when you lose all the jobs in St. Louis and in Charleston, SC, and you look around, you have to sort of take it or leave it. I didn't want to be against free trade, and that is what I had to vote for. Madam President, it is just terrible when you read in that same New York Times this morning: Auto Parts Makers Grinding to a Halt I have another article on a poster board, and I will get into the board debate when some of the others come with their particular boards. But the automobile industry is moving out of the United States. We have foreign locations here. Mercedes is in Alabama, BMW is in South Carolina, and some others are trying to get into the market. As far as the American manufacturer making that profit is concerned and as far as the American manufacturer keeping on the cutting edge of technology--why did they move to China? General Motors was told by the Chinese they didn't know how to trade. They don't run around saying, be fair, be fair, level the playing field, be fair. That is outrageous child's talk. That doesn't happen in commerce. You trade for the benefit and economic strength and the profit of your company. So the Chinese told General Motors: Not only do you manufacture that GM automobile over here, but the most modern automobile design plant in the world is in China. And that is as a result of that particular trade agreement that, of course, General Motors made with the People's Republic of China. The auto parts suppliers are grinding to a halt. They are moving those now. They used to send those down to Mexico, and we would get the finished product--the automobile--back. But you have here a quote from Paul Craig Roberts. Paul Craig Roberts served in the Reagan administration. This was an article in the Washington Times just the other day: The result is a decline in higher paying jobs in the United States as companies move higher value-added operations abroad to take advantage of cheaper labor. A recent Cornell University study: ``The Impact of U.S.-China Trade Relations on Workers, Wages and Employment,'' concludes that U.S. companies shift their production to China in order to produce for the U.S. market with cheap Chinese labor. The study estimates that a minimum of 760,000 U.S. jobs have been lost to China since 1992. ``An increasing percentage of the jobs leaving the U.S. are in higher-paying industries producing goods such as bicycles, furniture, motors, compressors, generators, fiber optics, clocks, injection molding and computer components.'' The shift in production is so extensive that the U.S. has run a trade deficit with China in advanced technology goods since 1995. That is the old wag I was given when as Governor of South Carolina I testified 42 years ago before the old International Tariff Commission. We were about to lose so much of our textile industry that 10 percent of the consumption of clothing textiles in the United States would be represented in imports. In looking around the Chamber right this minute, two-thirds of the clothing I am looking at is imported, 86 percent of the shoes. Then Tom Dewey, who represented the Japanese at the hearing and ran me around the hearing room, he said: ``But, Governor, let them make the shoes and the clothing. We will make the airplanes and the computers.'' Fast forward to the reality of today. They make the shoes, they make the clothing, they make the airplanes, they make the computers. We have a deficit in the balance of trade in computers and semiconductors. High-tech, globalization, you have to understand it. Come on. Do not tell this Senator what globalization is. I do not want to sound like Vice President Gore, that I invented it, but I did travel 40 years ago to South America and Europe as a Governor, soliciting their investment. I was looking for jobs. I have been in this game for over 40-some years. Today, we have 117 German plants in little South Carolina. I will never forget calling on Michelin in June of 1960, down in Paris, France, and I have now four beautiful plants of the French company. I also have the North American wonderful plant of Bowater. I see that rather than me trying to move corporations from overseas to the United States, which I am still trying to do--or more particularly carpetbagging New York in the Northeast--they are overjumping me into Mexico, into China, into Malaysia, into India. Hewlett-Packard, Motorola, and all the rest of these big-name companies, the high-tech companies, are not saving us. We have to retrain. I have another page of the Washington Post, ``Dupont Plans to Cut 2,000 Jobs.'' Some of them, of course, are in South Carolina. Everywhere we turn, we hear about cutting jobs, and it is not textiles or low wage jobs. It is high-tech jobs. I hope the Finance Committee will give me a hearing sometime. I would be delighted to educate that crowd because this is a fix. They have a bunch of oil people and a bunch of farmers and they could care less, as long as they get their depletion allowance and their subsidies, and then they come around hollering, ``Protectionism, protectionism.'' Well, that is the fundamental of government. We have the Army to protect us from the enemies without, and the FBI to protect us from enemies within. We have laws to protect clean air, clean water, the environment. We have Medicare to protect us from ill health. We have antitrust laws to protect us from monopolization and predatory practices. We have safety laws to protect us, safe machinery, safe working places and everything else. I was in the Rotunda on a cold January day when President Reagan was sworn in for his second term. He raised his hand to preserve, protect, and defend, and everybody clapped. We were all overjoyed, and then we came down into the Senate Chamber and had to listen to a bunch of children running around hollering, ``Protectionism.'' That is the function of government, and the security of this Nation. It is like a three-legged stool. There is the one leg of the values as a nation, unquestioned. We are admired the world around for America's stand for individual rights, freedom, and democracy. The second leg is the military. We are the superpower, unquestioned. The third leg, economics, that is my point. It has been fractured, fractured intentionally, with this so-called free trade. We knew we had to sort of spread the wealth, spread the capitalism in order to defeat communism. It has worked, now to a counterproductive point. We will not be in a position to produce foreign aid, we will not be able to defend freedom the world around unless we have a strong economy. I will never forget Akio Morita of Sony. We were in Chicago. We had a seminar, and he was talking about Third World nations. He turned and he said: In the Third World, the emerging nations, they have to develop a strong manufacturing capacity in order to become a nation state. Then talking along, he pointed over, and he said: Senator, that world power that loses its manufacturing capacity will cease to be a world power. And we wonder why we do not have the influence? They try to transfer it to hate. It is not hate. I have traveled. We have all traveled around. They admire and they like Americans in the Arab countries and everywhere else. You can go into downtown Baghdad, you can go into downtown Tehran in Iran right now, and they will come up to you and talk to you and say glad to see you. Do not give me all that hate stuff. What is happening is we are losing our economic clout and our economic strength because we are exporting the jobs faster than we can create them. In the Los Angeles Times, April 2, ``High-Paid Jobs Latest U.S. Export,'' the No. 1 story on the front page of the Los Angeles Times. I do not believe they read over in the Finance Committee. They give you all of this: We are missing out on agreements; we have to retrain. They sound like Mao Tse Tung: You have to go out and re-educate. Let us try it on for size. I had a plant close not long ago, Oneida. They made T-shirts. At the time of their closing, they had more than 400 employees. The average age was 47 years old, and tomorrow morning we have done it Washington's way. We have retrained. We have more than 400 people who are now skilled computer operators. Is a company going to hire the 47-year-old computer operator or the 21-year-old computer operator? You are not taking on the health costs for the 47-year-old and above. You are not taking on those retirement costs. You are going for the youngster who is just as expert. There you go, like we do not understand what is going on. ``Levi Strauss Closing Most U.S. Plants,'' another article, again in April. Every time I look around, they are closing, and what we have, so it is understood, is we have an affirmative action plan to get rid of the jobs. Mind you me, that is what I say, an affirmative action plan to get rid of the jobs. Why? Well, let me refer to this article from Business Week. Business Week, in 1999, reported on, of all people, Mr. Industrial Success, Mr. Industrialist of All Times, John F. Welch--Jack Welch. I ask unanimous consent to have the article printed in the Record.

Mr. HOLLINGS. I read: One of General Electric Co. CEO John F. Welch's favorite phrases is ``squeeze the lemon,'' or wring out costs to maintain the company's stellar profits. How did you squeeze that lemon? I am thinking now that he is squeezing something else. Squeezing that lemon in Mexico, he said to all of his suppliers two years ago. You have to go down to Mexico and cut the cost of your particular supplies, or you will not be a supplier of General Electric. When the best of the best blue-chip corporations of America has an affirmative action plan to get rid of the jobs and the industrial security of the United States of America, we are really in trouble. How does it occur? It is a natural thing. In manufacturing, 30 percent of volume is in the labor costs. As much as 20 percent of sales can be saved by moving offshore to a low-wage country or down to Mexico, India, or China. If you retain your executive office, of course your sales force, but move your manufacturing offshore, if you have $500 million in sales, you can reap a profit of $100 million before taxes. Or you can stay in America, continue to work your own folks, and go broke. That is how they look at it. So with the policies we have, they are not only moving their manufacturing, they are moving the executive office to Bermuda. They want the protection of the United States of America, but they don't want to participate in building up that protection. They want a free ride. That is why I say, in the Senate, we are in the hands of the Philistines. When my friend Bobby Kennedy really came in to national recognition he had published a book ``The Enemy Within.'' He was talking about organized labor. Now I can write the book ``The Enemy Within,'' and I can talk about management. Who is opposing us in the Senate, trying to create jobs, trying to hold together the strength of our economy, trying to maintain our industrial backbone? Who opposes this? The Business Roundtable, the Conference Board, the National Association of Manufacturers, the Chamber of Commerce, the National Federation of Independent Business, the retailers that make a bigger profit, newspapers that take the handouts from the retail associations. They make the most of their profits in newspapers from retail advertising. So they put out those things, free trade, free trade, fast track, fast track, and here comes the whole K Street crowd. I came here 35 years ago on the Commerce Committee. The very first person in the office on trade was a Japanese representative. No longer now. I haven't seen anyone from Japan in Lord knows when. I am trying to get there to see our Ambassador over there, Howard Baker. I respect their productivity and I have watched as we cry babied along. We never did open up their market. It was always a one-way street. In fact, the Japanese got to the position of saying, wait a minute, we are not going to buy your bonds if that is what you want to do in trade. We found out long since that the Secretary of the Treasury really is trying to sell, as in the morning headlines, which says we have a deficit, so he is trying to issue $1 billion in bonds, borrowing $1 billion. We have had the Japanese juggle our trade policy. But more than anything else, we have the arrogance now of the U.S. Chamber of Commerce. I speak advisedly of that body. Ten years ago I was their man. I was the Man of the Year of the U.S. Chamber of Commerce, if I quote correctly, Robert Thompson, who was the national president. He had me going around making talks and everything else because I had a standoff with my good friend Russell Long of Louisiana. We had labor law reform. On eight votes, up and down for cloture, I won and prevailed. I don't come here as an enemy of business. I know way more in experience, I should say, about getting jobs and creating jobs, instituting technical training, imparting the tools, high tech, and globalization than most because I have been in the game. I am a friend of business, but I am a greater friend of the United States. I hate to see my country go to pot with this childish nonsense of free trade. We are missing out on agreements. Since NAFTA, I have lost 53,900 textile jobs alone. My friend, the Senator from North Carolina, Mr. Helms, lost 124,000; 27,000 have been lost by the Senator from Mississippi. I don't know whether he is with us or not. This is what the Chamber of Commerce, Tom Donohue, says, and he knows nothing about trade. In yesterday's National Journal's Congress Daily, I quote Tom Donohue, the president of the U.S. Chamber of Commerce. He said the Chamber would not accept a bill weighted down by amendments that exceed the average man or woman's sense of what is appropriate for the bill. We will kill it and the people who loaded it up will pay a political price. Donohue also said that the business community has been patient and supportive through the political process to get the trade authority bill before the Senate, but there will be dire consequences if the bill collapsed under partisan politics. I know of many manufacturing companies that will move their operations offshore. I brought that message home to specific legislators about firms and their States and districts. That is a threat from the U.S. Chamber of Commerce. Tell him to wake up. He headed the Trucking Association when Jack Welch was putting in his affirmative action plan to get rid of the jobs and move to Mexico. Donohue now will warn you they will move. Everybody knows this has been going on for 10 years. We are going out of business. I wanted to bring that story home in this debate, not asking to vote pro or con with respect to a particular trade measure. As I say, I voted for Vietnam; I voted for Jordan; I voted for NAFTA with Canada. It is protecting not only your economy and your industrial strength but your standard of living. Incidentally, on the one hand, you can certainly bar child employment, children and youth production. But you are not going to get Mexico to pass environmental laws we have. Or the labor laws. They have that advantage. In China, in India, in Malaysia, the competition can keep on whistling ``Dixie,'' keep talking. It will not happen. It is not going to happen, and you can't blame them. If you were running the country of China, you would do the same thing. You wouldn't run around and say we have to get with the Americans and level the playing field, and put in these labor reforms, and put in these environmental requirements because we want to be seen as being fair. It is just absolute nonsense. Madam President, what happens is Republican and Democrat Senators unanimously support these requirements before you open up Carnahan Manufacturing. Think about it. Before you open your manufacturing plant, you are going to have to have minimum wage, clean air, clean water, Social Security, Medicare, Medicaid, plant closing notice, parental leave, safe working place, safe machinery, antitrust provisions. And everything else of that kind. You can go down to Mexico and pay 90 cents an hour and have none of those requirements. In order to compete, is it the case we are going to go back and retrench on this high standard of living? No; not at all. That will never happen. But we will have to maintain a balance with respect to the economic strength. We have to maintain our steel production. I will never forget, in 1961, before we got President Kennedy to enunciate his seven-point textile program, under the law--and, incidentally it is the law today--that before the President can take executive action unilaterally on a trade measure, he must prove that product is important to the national security of the United States. At that time we corralled five Cabinet members--one sub-Cabinet of the five, George Ball, because Dean Rusk was too busy, from the Department of State; Luther Hodges, Secretary of Commerce; Orville Freeman, the Secretary of Agriculture; Douglas Dillon, the Secretary of the Treasury, was there; and the Secretary of Labor, Arthur Goldberg. They had hearings and we brought the witnesses. They made a finding, and the record is still there, that second to steel, textiles was the most important to our national security. The wag at the time was you cannot send them to war in a Japanese uniform--because they were bringing in all those textiles. The Japanese don't fool with textiles anymore. They have gone high-tech. Now you would say you wouldn't send them to war in a Chinese uniform and Gucci shoes. You have to have the clothing. You have to have the uniforms. So you have to have that measure because it is important to our national security. We have to maintain a modicum of textile manufacturing. We certainly have to maintain the ability to produce steel. We have to retain these other industries--electronics, with respect to watch-making, and fine tooling, and hand tools, and computers. We have to retain some production of semiconductors and the like. In doing that, let's correlate, if you please, our 28 agencies and departments into one department of trade and commerce. We are all over the lot. It is our fault. We have to begin to enforce our trade laws against dumping. We can't let Wal-Mart sell below cost. They would be in trouble. We would get them for antitrust, Robinson-Patman violations, and we would send them to the hoosegow. In international trade that happened in steel. Bob McNamara went running the world around saying to the Third World countries that in order to be a nation state, you have to have steel for the tools of agriculture and the weapons of war. So they had 2-percent steel plants built all over Latin America and the Middle East. I have been into that game. Yes, the President was correct in moving on steel because they are dumping steel. I see it. My office is in Charleston, SC. I can look on the dock and see all of this Brazilian steel coming in at less than cost, putting out of business, 25 miles away, Nucor, the most productive of all steel plants in the world. Please, spare me from the idea of productivity. If you go to the international section of the United Nations, if you go to the Labor Department, Department of Vital Statistics or otherwise, you will find they will agree the world around, the most productive industrial worker is the U.S. industrial worker. We keep nagging: We have to get productivity up. My steel plant is the most productive in the world, and they are dumping steel at less than cost and criticize the President for moving on this particular score. He was right. He is right. We have to maintain that. We have to get a value-added tax to pay for this war on terrorism that is costing the country and offset the 17-percent value added tax advantage. For example, in Europe where it is rebated, it is costing us a 17-percent differential in trade right there. Enforce our dumping laws, but please do not say you have to get more productive. What is not producing is not the industrial worker in the United States, it is the U.S. Congress. We haven't produced. We have been running around like lemmings: Free trade, free trade, fast track, fast track--having no idea in the Lord's world what we are doing; whereas we are exporting jobs faster than we can create them. My time is up. I yield the floor.

Mr. HOLLINGS

Mr. HOLLINGS. I will complete this quickly.

Mr. HOLLINGS. I thank the distinguished Senator from Arizona. There is no question that they are better jobs, but textiles are very good paying jobs at $10 and some odd cents an hour. Those are middle class Americans. The Senator is correct, facts are facts. That is why this particular Senator, as Governor some 40 years ago, went to Europe to get that BMW plant. I didn't get BMW at that particular time. Since that time, in my travels to Germany, we now have in South Carolina 117 German plants in my little State. So, yes, we have gotten way better jobs. We have continued to work on that. But I would just address a few comments with respect to the need for the trade bill. I heard my distinguished leader earlier today. He outlined the need for the trade bill. He said: Wait a minute, you have to understand, after all, these are just singular examples that I had given earlier in the morning's debate with respect to Vietnam and Jordan. Those are just one country. He said: But when you have multilateral countries, it is sort of hard to get them all together and then get an agreement, then bring it back to the Congress and have amendments. Not so. The Andean trade agreement we are now discussing involves several countries. Without fast track, we have listed in the 2001 Trade Policy Agenda and 2000 Annual Report by the U.S. Trade Representative, some 100 different agreements. I have gleaned many of them. Of course, the African Growth Opportunity Trade Agreement, involved a few dozen countries. We got that without fast track. We told President Clinton we didn't want to abdicate our responsibility in regulating foreign commerce. Article I, section 8 of the Constitution, says the Congress shall regulate foreign commerce. It doesn't say the President, or the Supreme Court, but the congressional branch, the legislative branch. We were not going to abdicate that authority, which we are being asked to do at the present time. We didn't do it. And to refute that argument with respect to the multilateral requirements, the Caribbean Basin Initiative with nine countries; the chemical weapons treaty, of course, that we debated during the Clinton administration, there were over 100 countries; the semiconductor agreement with the European Union, the United States, Japan, and Korea, more than a dozen countries joined in that one without fast track; the telecommunications agreement with the Asia Pacific countries, that was more than a dozen countries involved there; the international tropical timber agreement with numerous countries, the United States; Central American Regional Trade Investment Agreement in November of 1998, there were nine countries; the WTO telecommunications agreement in 1997, that was some five dozen countries. So was the WTO financial agreement in 1999. I could go on and on. Don't be sold a bill of goods about the difficulty of fine points and numerous countries. That happens right regularly, and that is why you have trade agreements, and that is why we have been able to get over a hundred during the past 10 years alone. Now, Madam President, the next point that was made was that the United States has only 4 percent of the world's consumers. Of course, right to the point, the distinguished leadership is confusing the population with numbers of consumers. What we are really interested in is that 4 percent. Those who are opposing fast track are interested in those 4 percent of consumers because, unless you have a job and are making a living, we have consumers going out of business. That is the stopping, the cessation of consumption that has this economy in a funk. I just had a gentleman, from SBC Communications, telling me how his stock had gone down. I said: Meet the group. MCI has changed leaders today. So you have all of these telecommunications companies that are high-tech, and more growth, and they are in a funk because we don't have manufacturing, we don't have jobs. We have been exporting jobs faster than we can possibly create them. The United States also has the most skilled and productive workforce in the world--what is left? I pointed out here, with respect to the steel, that I commend President Bush for his recent actions. Mr. McNamara, the former Secretary of Defense and head of the World Bank, went running all around to the Third World emerging countries telling them they could not become a nation state unless they had steel--the capacity to produce steel for the weapons of war and the tools of agriculture. As a result, I look outside my office in Charleston at the dock, and they are off-loading Brazilian steel for construction all over the Southeast. Some 20 miles away is Nucor, the most productive, modern, competitive steel plant in the world. But how can they compete when the Brazilians are dropping steel off at less than cost on the dock there in Charleston. The rules are not being enforced. What we need is not a free trade policy, we need competitive trade; we need to go back to the word itself--``trade''--something for something. Not aid. That is what the Andean thing is all about down there with Colombia, Ecuador, and Bolivia. They are saying: Look, get out of the drug business. That is what this initiative is about. Get out of the drug business and grow pineapples and bananas and that kind of thing. I went and asked--in one of the meetings where I was getting a briefing in Bolivia a few years ago--what about this growing of pineapples. He looked at me and laughed. He said: You think I am going to struggle growing pineapples when I can get a little crop going and make a whole year's income in a week's time, when it would take a year with the pineapple crop, and have to worry about the weather? He said: With these drugs, you don't worry about the weather. Incidentally, he pointed out on the map an area as big as Georgia. He said: That is off limits for the Bolivian policy. We can grow anything we want to there. Let's get into these trade agreements in depth and find out what is going on. The tail of the drug war is wagging the trade policy of America. I went up 14,000 feet to La Paz and they were chewing the drugs walking up and down the street. Oh, we had a wonderful thing. We had conquered a little bit of it. We had not conquered much. What was in Bolivia went into Colombia, and it gets into Peru and Ecuador--those four countries. The United States has one of the most open markets in the world. Well, that is exactly what they all argue, and everything else, that our open market is going to open their closed markets. In the 1990s, they argued that if we get these trade agreements, we will open the markets. We have yet to get into Japan or Korea.

Mr. HOLLINGS. I thank the colleagues in the Chamber for allowing me to have a few more minutes. I wanted to make an important point. Ten years ago, in 1992, they said that is what we needed, just exactly what they said--to open up the markets. We would get these agreements to open up the markets. So here is a booklet by the Special Trade Representative on foreign trade barriers, and it equaled some 262 pages. Now, after we have gotten the NAFTA agreement, which was to open up markets, and after we have gotten WTO, which is a multilateral agreement--incidentally, let's find out how many markets have been opened. The book now has gone from 262 pages to 455 pages. It has doubled. We have doubled the foreign trade barriers. All these wonderful free trade agreements were supposed to open up the markets. You continually hear that, but that isn't what occurs. Twelve million export-related jobs are manufacturing jobs. There are less than 17 million manufacturing jobs left in the country. Manufacturing has gone from 26 percent of the workforce 10 years ago to 12 or 13 percent today. The export-related jobs pay 13 percent to 18 percent more. Definitely, the manufacturing jobs do pay more. The union jobs, in a general sense-- such as the Longshoremen and the AFL-CIO--are the ones opposed to fast track, vigorously, because they are exporting their jobs out from under them. The balance of trade--you cannot turn back the clock on trade any more than on technologies; namely, typewriters versus computers. This is the old argument about, wait a minute now, we went from the horse and buggy days to the automobile, and now in trade we are going from typewriters to computers. Here is a sample of the U.S. trade deficit in the world. We have a $20 billion deficit in the balance of trade with computers. We have a deficit in the balance of trade with cellular telephones, pacemakers, night vision equipment and other telescopes, and electrocardiographs. I could go on and on. The idea that, son, you don't understand, we are moving into globalization, and we have moved now from typewriters to computers. I told the story years ago as a witness. I was told: Look here, let them make the clothing and the shoes. We will make the airplanes and computers. The truth is they are making the shoes and clothing and the airplanes and computers. Finally--and I am trying to close down for my distinguished friend from Arizona. In the 1990s, we liberalized trade and saw record economic growth and job creation, some 20 million new jobs created from 1994 to 2000, and without fast track. I do not know who got these points up for the distinguished leader about why we need it, because, yes, we had wonderful economic growth, but we had that without fast track. That was due to another measure that we passed in 1993. I thank the distinguished Senator, and I yield the floor.

Mr. HOLLINGS. Madam President, I thank my distinguished colleague from Arizona, ranking member and former chairman of our Commerce Committee. The fact is, where we have that BMW plant, just 2 years ago, in Spartanburg County, we had 3.2 percent unemployment; it is now 6.1 percent. It is just an outflow, a stampede almost of the exportation of textile jobs in South Carolina. Since NAFTA we have lost 53,900 jobs. That is one of the things they are debating with respect to trade adjustment assistance to get health care. If you are going to have trade adjustment assistance, I certainly want to apply it to those lost jobs. They are out there struggling in the sense that almost, in a way, I don't have any more jobs to lose. I have to apply it to those because they are retrained and skilled. I gave the example of Oneida, the little T-shirt plant where they had more than 400 employees with an average age of 47 years old, lose their jobs. So they trained them as expert computer operators, as Washington tells them to do. Who is going to hire the 47-year-old? They are going to hire 21-year-olds. So they are still out of a job. That is the desperate circumstance that is going on all over the country.

Mr. HOLLINGS. I ask unanimous consent--is the Senator from Arizona ready to speak?

Mr. HOLLINGS

Mr. HOLLINGS. Mr. President, with respect to calling up the Andean trade pact for debate, someone could immediately question why the delay, trying to hold up on the actual calling of the bill? There will be plenty of time to submit amendments. I do not know of a more serious topic that will be discussed this year in the Congress, and yet discussion should be two ways: Those who are ready to propose and propound, and those who are ready to object to and explain why this is not in the economic interest of the United States. It is a one-way street, though, as it appears, in the Senate. The temptation is to have a live quorum so somebody can be talked to. This has been the typical treatment of trade in the United States now for the past several years. What really happens is those for the fast- track agreement work on the members to vote their way. By one vote, the House passed it, with what my friend from Arizona, Senator McCain, would call pork--little favors here, little favors there. After the passage of NAFTA some 8 years ago in 1994, the New York Times ran a story of the 26 different favors done by President Clinton at that particular time to get NAFTA and fast track passed. I think it was Congressman Pickle, who got a cultural center down in Austin, TX; another Congressman got a round of golf; another Congressman a round of golf personally with the President of the United States; another Congressman got two B-17 contracts, and so on. The New York Times wrote of the 26 different votes that were changed. There was only one important vote to change this particular time in the House. When it comes to the Senate Finance Committee, it is an easy fix. Once it is fixed and ready to be presented in the Senate, they withhold the presentation of the particular measure until they have 60 votes to make sure they can get cloture as they cut off debate, limit the amendments, and limit the time for each of the individual Senators. And since the Senators know the debate is limited and the vote is fixed, no one listens. I have to express my gratitude to the distinguished Senator from Minnesota for coming because I do not know of a more important subject than this. While cloture is obtained later at 6 p.m. today, we will again try to withhold the actual finalizing of the debate with another cloture vote after we present some amendments. The bottom line is, if one had to answer their opposition it would be difficult to do. They are putting out the Andean trade bill, combining it with the come-ons not only of fast track but trade adjustment assistance, and they put those amendments on and then pass it altogether. After they have bundled together various wants, namely trade adjustment assistance and the fast track which the White House wants; and, of course, the Andean trade bill which others interested in this particular hemisphere want, what happens then is they package together and get a bad deal for America. I say that advisedly for the simple reason, we are exporting jobs faster than we can create them. What happens is that in trying to create them, we are really facing organized society politically, economically, financially, and otherwise, in the United States against us. It is a very interesting thing. I think about my friend Robert Kennedy. I have had his desk for years in the Senate. Robert Kennedy came to political notoriety in a book called ``The Enemy Within.'' He was writing about James Hoffa and organized labor. Today I could write a book on the enemy within. Instead of labor, it is management. How does that occur? It occurs because 30 percent of production costs, 30 percent of volume, is in labor. In manufacturing, particularly, 20 percent of manufacturing costs can be saved by moving production or manufacturing offshore, to a low-wage country such as Mexico. If you have $500 million in sales at a manufacturing facility, you can make $100 million pretax profit by moving offshore. Just keep your executive office and your sales force in-country and move your production offshore and you have made yourself $100 million. Or you can continue to work your own people and go bankrupt. That is the job policy of the U.S. Government today. That is the job policy of the Senate. Who is supporting this? The Business Roundtable, the Conference Board, the U.S. Chamber of Commerce, the National Association of Manufacturers, and the National Federation of Independent Business. My friend, Tom Donohue, at the Chamber of Commerce, has it orchestrated where the five move in. I saw it with Y2K. Chicken Little, the sky was going to fall if we did not hurry and pass that particular provision to protect Silicon Valley. Of course, the Republicans and Democrats were fighting hard in the Silicon Valley to get their financial contributions. The fight was not to protect the computers. It was to protect the financial wherewithal of campaigns. They could care less about Main Street America. They are for offshore production, thereby the offshore creation of jobs outside of America. There is more. I will never forget the debates we had with respect to textile bills in my time. We passed five textile bills through the Senate. One did not get past the House; the other four that did were all vetoed after the President, of course, promised to sign them. The President promised to sign them in my State, in the city of Greenville, the heart of textile industry. They forget about that. I bought a shirt made in China and one made in New Jersey. I bought a catcher's mitt. One made in Korea and one made in Grand Rapids, MI. I showed that the markup on the imported article was much greater. So the retailers are getting behind the movement of big business. Who follows behind? The newspapers. The retailers are seeing the newspapers hand out free trade, free trade, fast track, fast track. They are like parrots. The majority of the newspapers are for retail advertising. So they, in turn, join in. You ought to see how the special trade representatives are representing the Government in these giveaway programs. They have literally drained the jobs from the United States of America. I was reading a book that has become required reading in the Washington area, ``Theodore Rex,'' by Mr. Edmund Morris. He is describing the United States of America at the turn of the century, 100 years ago: The United States could consume only a fraction of what it produced. More than half the world's cotton, corn, copper, and oil flowed from the American cornucopia, and at least one third of all steel, iron, silver, and gold. Current advertisements in British magazines gave the impression that the typical Englishman woke to the ring of an Ingersoll alarm, shaved with a Gillette razor, combed his hair with Vaseline tonic, buttoned his Arrow shirt, hurried downstairs for Quaker Oats, California Figs, and Maxwell House Coffee, commuted in a Westinghouse tram (body by Fisher), rose to his office in an Otis elevator, and worked all day with his Waterman pen under the efficient glare of Edison lightbulbs. ``It only remains,'' one Fleet Street wag suggested, ``for us to take American coal to New Castle.'' Behind the joke lay real concern: The United States was already supplying beer to Germany, pottery to Bohemia, and oranges to Valencia. Now, instead of that Ingersoll alarm, we get that from Malaysia, Korea, or of course an expensive one from Switzerland. With respect to the Gillette razor, it comes from either Mexico or China. With respect to the Arrow shirt, we have bought those shirts out of China. And instead of the coffee, it is Brazilian or Colombian coffee. When they have mentioned that Westinghouse tram, I took the Acela, the fast Amtrak train the other day to New York, and found out it was made in Canada. When I got to Penn Station, I was sniffed by the dog from Czechoslovakia. The police dogs have been so over bred in the United States they have lost their smell propensities. So the dogs, now, for security, are imported from Czechoslovakia. Now we have lost the watches, the cameras, the electronics. We are about to lose all the steel business and everything else. I could go down the list. We don't produce anything much to export, export, export as the fast track, fast track, fast track crowd will have us. The fact is, more than half of what we consume today is imported. The majority of our consumption is imported articles, including furniture. I had to rebuild a house, and to my surprise I had to get furniture from the Philippines and Vietnam. Yes, buy America, buy America. Well, I was a champion, still am, I hope, of trying to buy America, but I used to represent a bunch of automobile dealers. I think it was 20 some years ago, when I bought an American car, a Pontiac. I drove in front of my neighbor's place. He said: How much did you pay for that car, Fritz? I said: I don't know, let me look at the sticker price. As I looked at the sticker price--this was over 20 years ago it said--``Montreal, Canada.'' I had a foreign car. Why? Because automobile production had already moved across the border to save $800 per health contract on each of its employees. But the so-called high-tech industry was supposed to save us. That was the motor of growth. We tried to point out in one of those debates during the 1990s, here, in the last 10 years, when we had this wonderful growth, that it wasn't the motor of growth at all because 42 percent of Silicon Valley was on part-time, and one-third of the Microsoft employees had to sue Microsoft in order to get benefits. That was Senator Abraham, from Michigan, who was running around all over the Chamber for immigration, immigration, immigration. Why? Because you can get the Indian trade, Indian production, those experts coming over from India and China at $30,000 a year, maybe $35,000 a year; they are just as good as any you could ever find in the United States of America. So they were cutting their costs. That is why. There was not any shortage, any need to retrain or everything else of that kind. But let's complete the thought. We are in desperate circumstances. If I have to make one particular point, it is this: Your security as a nation rests, as it were, upon a three-legged stool. The first leg is the values we have as a nation--our stand for individual rights, democracy, freedom--is known and respected around the world. The second leg, the military, is unquestioned. But the economic leg has been fractured, and intentionally so. You see, after World War II we had the only industrial production. Trying to rebuild Europe and bring the Pacific rim to capitalism versus communism in that cold war, we sent over the Marshall Plan. We sent over the expertise, we sent over the technology and the equipment--and we won. No one regrets it. Everyone is proud of it. We defeated them-- capitalism defeated communism in the cold war. I testified back in the 1950s before the old Tariff Commission when Tom Dewey, representing the Japanese, ran me around the hearing room saying: Why don't you let these Third World countries make the shoes and the clothing and we will make the airplanes and the computers? Our problem is they make the shoes, the clothing, the airplanes, the computers, and everything else. Our manufacturers, our industrial giants, learned of this moving their manufacturing offshore to a lower wage country. As you and I sit here in the Senate, talking about the environment and our standard of living and safety and otherwise, before you can open up Nelson Manufacturing, you have to have a minimum wage, clean air, clean water, Social Security, Medicare, Medicaid, plant closing notice, parental leave, safe working place, safe machinery--I could go on and on. You can go down for 90 cents an hour to Mexico and have none of those requirements. You are guaranteed a profit. If your competition goes, you have to go or go bankrupt. So what is the problem? The problem is that they have all joined together, as I have described, to move the jobs out of the country, whereas you and I, as public servants, have the job of trying to create jobs. I can see the President now, after 9-11, saying: What can we do with this crisis we are in? Take a trip, go to Disney World with your family, live normally--whatever. I will tell you what we can do: Create a job. Give your neighbor a job. That is why I am on the floor of the Senate, trying to hold up this fast track so we can listen and learn just exactly what is in it. Article I, section 8, of the Constitution says that the Congress--not the President, not the Supreme Court, but the Congress of the United States--shall regulate trade or foreign commerce. We are abdicating our responsibility. It is a fix. The agreement is made downtown on K Street and with the White House and their minions. That is what happens. The interests that come to their Representatives in the House of Representatives and the Senate are wasting their time. The Senators and the House Members have nothing to do with it. It is a done deal at the time it is proposed, when they make these lousy agreements that continue to drain the United States of its economic strength. Other than draining us of our economic strength in that fashion, with a fixed vote, we ought to be on the floor of the Senate debating, if you please, the significance. Henry Ford, at the time he put on mass production, said: I want to make sure my employees make enough money to buy the article they are producing--so they could buy that car they were making. As a result, he started the benefits which resulted in the middle class. The labor movement over 100 years now has had difficulty developing and thereby holding on to these particular improvements to our standard of living, to health care, to different other benefits of that kind that we have now in the production contract that has created the middle class, or the strength of democracy itself. What I am fearful of is we are going the way of England. At the end of World War II, they told the press: Don't worry, instead of a nation of brawn, we will be a nation of brains. Instead of producing products, we will provide services. Instead of creating wealth, we will handle it and be a financial center. England has generally gone to hell in an economic handbasket. They have the haves and the have-nots. The middle class disappears, and downtown London is an amusement park. That is exactly the road we are on. We have to get off that highway. We have to be competitive. We have to understand the word ``trade'' means just that--something for something, not aid, and not developing it so that we have, as was said on the floor, something that is immoral. I heard my distinguished colleague from Florida say it was immoral for us to go along with these countries, and to even backtrack or hold the line with respect to Andean trade--that we owe them a duty to develop it. We all want to develop everything. But you can go forward and develop and develop until you become underdeveloped, which is our predicament today. Debt overseas stirs up trouble at home. There is an article in Business Week that I ask unanimous consent to have printed in the Record.

Mr. HOLLINGS. Mr. President, we have a $400 billion deficit in the balance of trade. We have a horrendous budget deficit of $168 billion. We are in the red. Even after all the money came in on April 15, we are still in the red by $168 billion. We are going to be around $300 billion to $350 billion in the red by the end of September. That is our fiscal deficit. We are not paying the bills. We are cutting taxes. We are running around saying we ought to make permanent the temporary tax cuts, which of course cost us another $4 trillion, and we are wondering why we have a deficit. In a similar fashion, we ought to be aware that we are in competition when we talk about trade. Let me refer to just one little bit of history because you can't fault our globalization and trading partners. I have been in the game. In 1960, as South Carolina's governor, I took a trade mission to Latin America and to Europe. Today, we have 117 German plants in South Carolina. I will never forget calling on Michelin in downtown Paris in June of 1960 to come to America. Now, they have about 11,000 employees and 4 big facilities. I called upon Bowater in London. Now the Bowater headquarters are in Greenville, SC. We believe in trade, and we believe in development. I have to pay particular attention at this time to jobs in the United States. That is what we did in the earliest days. We had just won our freedom when our friends in the mother country said: We will trade with the fledgling little United States of America with what it produces best, and England would trade with us what England produced best. Free trade, free trade, the doctrine of comparison advantage, as written by David Ricardo. Alexander Hamilton wrote a little booklet, A Report on Manufactures. It was Hamilton and Madison who wrote our Federalist Papers. Hamilton is one of the most disregarded former Treasury Secretaries with a magnificent history of having built this industrial giant, the United States of America. He countered to the Brits in that particular little booklet--I will not read it, but I will get a copy and put it in the Record during the debate--he told the Brits: Bug off. He said: We are not going to remain your colony shipping to you our coal, our timber, our rice, our cotton, our indigo, our iron ore, and import from England the manufactured products. We will become a nation state by developing our own manufacturing capacity. As a result, on July 4, 1789, the second bill Congress passed was a protectionist measure, a tariff bill on various articles. We began the United States with protectionism. When the Transcontinental Railroad was being built, they said: We can get the steel from England to build the railroad. President Lincoln said: No, not at all. We are going to build up our own steel mills. When we get through, we will not only have the Transcontinental Railroad but we will have the steel capacity. Lincoln provided protectionism for steel; Roosevelt for agriculture; and Dwight Eisenhower in the 1950s, provided protectionism for oil with import quotas on oil. We built this industrial giant, the United States of America, with protectionism. Don't go around here with these silly childish pollsters saying: Yes, you have to be for free trade, free trade. They do not know anything about it. They know nothing about the economy. They know nothing about the creation of jobs. They have never been in the business of trying to create jobs and bringing industrial expansion to your State and to this country. They just do not know. They automatically ask to be given free trade, free trade. The truth of the matter is that we have to put in a competitive trade policy. Since I mentioned deficits, I would be glad if I could get a cosponsor or another vote in this body to put on a value-added tax. These are serious times. During every moment of the history of the United States of America in war, we paid for the war. We put on special tax and revenue provisions to pay for the war. Now we have a President who comes and says: We are at war. We are going to have to run deficits. And, incidentally, the war will never end. What kind of leadership is that? I would put on a value-added tax and say: Pay for that war. Get the deficits down. If anybody within the sound of my voice wants to help cosponsor it, let me know. I have put it in before at least two-times. I have thought it through thoroughly. One of the biggest disadvantages we have is we are the only industrialized nation that does not have that tax. How does that work to our disadvantage? If I manufacture this desk in the United States of America, in Washington, I have to pay all the different taxes. If I am over in Virginia, or in Maryland, I pay the State taxes, the corporate taxes, the personal income taxes, and I ship it to Europe and to downtown Paris. They will put on a 17-percent value-added tax. In contrast, if I manufacture that desk in Europe, in Paris, they will put on a 17-percent value-added tax, but they rebate it when it leaves the border and is exported to Washington, DC. It is a given. The value-added taxes are rebated at the border. That is a big advantage which all of the trading partners have with us. If we are going to get serious about fast track and Andean trade, I am not particularly interested in a copout. Let's remove that 17-percent disadvantage immediately and pay for the government we are giving the people of the United States of America here this year. Yes, by the end of September we are going to spend some $300 billion more than we take in. We can pay for it. We always have, but not under the leadership here. Everything is: Let's have more loss of the revenues. Let's run up the debt, the current accounts deficit and debt, the trade deficit, and the fiscal deficit of the United States of America. It is a tragic thing. But we could easily get that done. Now, those competing nations say: Look, don't give me this environment stuff. Don't give me this label stuff. There is no chance of putting on the label and environmental protections, say the Mexicans, as we have here in the United States. That is an advantage. As long as those people suffer, that is a disadvantage as we see it, but that is an advantage to them, and they are going to continue so they can build up themselves economically and strong just as the United States of America did in its earliest days. We did not even pass the income tax until 1913. We financed our entire Government with tariffs and protectionism. But we run around now in the 21st century: free trade, free trade, that we can't have any increase in taxes or pay the bill. It's a very peculiar thing. If I run for Governor of South Carolina, I have to go all over the State and promise that I will pay the bill. If I run for the U.S. Senate in the same State, I run all over the same State promising I will not pay the bill. It is the same people, but that is the way the pollsters have conditioned it, and that is the way the media has covered that particular predicament. They have no idea. Yes, David Broder, the pre-eminent columnist, pointed out over the weekend how all the Governors and all the mayors all over the country are having to cut educational budgets, or else lose their credit ratings. If they lose their credit ratings, then they get no development, and then they even again lose more revenues or income from their different taxes. So they are having to cut back. But we up here in Washington are all running for reelection, saying: We will pay. Let's make the tax cut permanent. Let's lose another $4 trillion. We don't care. By the way, there is a war on. We are going to have deficits. So sui pig. Everybody come. Anybody who wants anything, we have the money. We will just print it. And with respect to the economy, we can forget about jobs. Let me, now that I have a good friend in the Senate Chamber, talk about the Washington solution because I have some other issues to talk about. But we have tomorrow and the next day and the next day. Let's do it Washington's way. Washington says: Now you have to get with globalization and high tech and retrain and retrain. That was Mao Tse-tung, if I remember correctly. We are getting to be like China with Mao. And we are going to reeducate. Well, let's say, down in Andrews, SC, where 40 years ago an Oneida plant came to the State of South Carolina to make T-shirts, now has to close. At the time of their closing, what they had was 487 employees. And the average age of the employees was 47 years of age. And then it is tomorrow morning and we have done it Washington's way. They are reeducated, they are retrained, they are now high tech, and we have 487 expert computer operators. I ask, are you going to hire the 47-year-old computer operator or a 21-year-old computer operator? Are you going to take on the retirement costs for that 47-year-old, and take on the health costs for that 47- year-old, or are you going to cancel that on the books and take on the 21-year-old? The answer is obvious. Those people are stuck down there. Down in Spartanburg, where we have a new BMW plant, unemployment was 3.2-percent last year. It is now at 6.1-percent. And in the surrounding counties, it is 11-percent, 12-percent, even 14-percent. With NAFTA, we were going to create jobs, solve the immigration problem, and do away with the drug problem. It was going to be the finest thing since sliced bread. But instead of getting 200,000 jobs, we have lost 1.3 million manufacturing jobs. That is from the Bureau of Labor Statistics. The drug problem has gotten worse, killing so many people. The immigration problem has gotten worse, to such a point that now we are passing legislation and breaking up the Immigration and Naturalization Service. I think the House is on track. We have to do something about immigration laws, and everything else of that kind. In little South Carolina, since NAFTA we have lost 53,900 textile jobs alone. We did not create jobs. And you put my State into poverty and into welfare. And I take no comfort in the idea that now we are going to pass trade adjustment assistance like it is just a little temporary thing. The United States of America is going out of business. We are on the road, as England, of the haves and the have nots. And we are not going to be creating anything in manufacturing or producing anything to export. So that is the trouble for the lethargic economy. It is not consumer confidence. It is not just the manufacturing because there is no manufacturing to boil up. You watch it. This recession downtime is going to last the rest of this year, and into next year, until we get a hold of ourselves and start rebuilding America. Yes. When people ask what we should do as a result of 9-11, instead of President Bush saying, we should take a trip with our kids, getting our families to go to Disney World, let's give our neighbor a job. I yield the floor.

Mr. HOLLINGS

Mr. HOLLINGS. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. HOLLINGS

Mr. HOLLINGS. Mr. President, I thank Senator McCain for his comments and his willingness to work with me on this issue. The need for reliable, sound advice to Congress on scientific and technology issues has never been greater. Many of the issues that we tackle every day involve some scientific or technological element. Congress needs to be sure that it can avail itself of excellent scientific analyses on complex issues. The advice that we were able to receive in the past from the Office of Technology Assessment on such issues as climate change and homeland security is sorely missed. As Senator McCain noted, any assessment service for the Congress needs to be non-partisan and effective. I look forward to discussions with the ranking member of the Commerce Committee, as well as other members of the Senate, regarding the proposed structure of the National Science and Technology Assessment Service and possible changes to that structure. Request for Tax Modification

Mr. HOLLINGS

Mr. HOLLINGS. I would like to thank my colleagues for their statements and indicate my support for this bipartisan agreement on climate science and technology policy. The Committee on Commerce, Science, and Transportation over the years has developed and implemented the key statutes governing these matters. These include statutes establishing interagency science and research programs like the Global Climate Change Act, a coordinated Federal science and technology policy, such as is called for in the National Science and Technology Policy, Organization and Priorities Act, and those establishing the first tier atmospheric science and technology programs within NOAA and NIST. I fully agree that responsibility for policy relating to climate issues should rest with an individual who is accountable to Congress, much as we have done for overall science and technology policy by exercising our oversight authority over the White House Office of Science Technology Policy, which will shoulder substantial responsibilities under this agreement.

Mr. HOLLINGS

Mr. HOLLINGS. Madam President, today I rise to introduce bipartisan legislation that will establish baseline requirements for the protection of personal information collected from individuals over the Internet. This bill, the Online Personal Privacy Act, represents the work of many months and important input from consumer groups, affected individuals, and most importantly, many Senators on the Commerce Committee. The origin of this emerging consensus position began to take shape at a Commerce committee hearing last summer that focused generally on whether there was a need for online privacy legislation. At that time, members of the committee began to articulate the notion that not all personal information is created equal. I agree. Some, highly sensitive personal information, such as personal financial or medical information or a person's religious beliefs are clearly more sensitive than other garden-variety types of information, such as a pair of slacks that an individual may purchase. Since that hearing, and in numerous meetings with members of the Committee, we have worked hard to develop a balanced approach to Internet privacy regulation that recognizes and builds upon best practices in the online community while establishing a federal baseline standard for the protection of individuals' privacy on the Internet. Let me begin by expressing my gratitude to Senators Rockefeller, Inouye, Breaux, and Cleland, who worked closely with me during the last Congress to advocate the need for strong online privacy protections and who have agreed to be original cosponsors of this legislation. In addition, I would also like to particularly thank Senators Kerry, Stevens, and Burns for their invaluable contributions throughout this process and their willingness to join with us in working to craft a workable, bipartisan, consensus position on legislation that will provide individuals with better controls over the use of their personal information while fueling the growth of e-commerce as consumer confidence in the Internet spurs a significant increase in online activity. Some have argued that Americans' concerns about privacy no loner exist in the aftermath of September 11. But poll after poll consistently demonstrates that the American people want companies they patronize to seek their permission prior to using their personal information for commercial profit. These concerns are heightened with respect to the Internet, which, in a digital age, enables the seamless compilation of highly detailed personal profiles of Internet users. Accordingly, fears about privacy have had palpable effects on the willingness of consumers to embrace the full potential of the Internet and e-commerce. Distrust of false privacy promises has sparked a rage of online self- defense, especially the providing of false information by individuals. Industry analysts estimate that between one-fifth to one-third of all individuals provide false personal information on the Internet. This response is understandable given that consumers have few tools to discover whether their personal information is being disclosed. sold, or otherwise misused, and they have virtually no recourse. Privacy fears are stifling the development and expansion of the Internet as an engine of economic growth. Because of consumer distrust, online companies and services are losing potential business and collecting bad data, blocking the Internet and its wide range of services from reaching its full potential. The lack of enforceable privacy protections is a significant barrier to the full embrace by consumers of the Internet marketplace. According to a recent Harris/ Business Week poll, almost two-thirds of non-Internet users would be more likely to use the Net if the privacy of their ``personal information and communications were protected.'' Moreover, according to a recent Forrester study, online businesses lost nearly $15 billion, or 27 percent of e-commerce revenues, due to consumer privacy concerns. Those numbers are significant in light of the economic downturn and its disproportionate impact on the high-tech Internet sectors. Good privacy means good business and the Internet economy could use a healthy dose of that right now. Accordingly, our legislation offers a win-win proposition for consumers and business: it will protect the privacy of individuals online and provide online businesses with a new market of willing customers. While protecting the necessary business certainty of a single Federal standard. Online companies have long argued that privacy regulations would hamper their ability to efficiently conduct business on-line and give consumers the tailored buying experience they now expect from the Internet. Online merchants also touted self-regulation as sufficient privacy protection. We know otherwise. Privacy violations continue to make headlines: a major outcry erupted last year after Eli Lilly disclosed a list of hundreds of customers suffering from depression, bulimia, and obsessive compulsive disorder over the Internet. Moreover, just last week, a New York Times article, ``Seeking Profits, Internet Companies Alter Privacy Policy,'' recounted how Internet companies such as Yahoo had changed their privacy policies in order to require consumers to restate their privacy preferences even if they had previously withheld consent for the use and commercialization of their personal information. Accordingly, these companies expanded their ability to use an individual's personal information for online and offline marketing purposes notwithstanding that individual's prior policy preferences. Still other businesses confound consumers with opaque privacy policies that begin with, ``Your privacy is important to us,'' but in the subsequent legalese, outline a series of exceptions crafted with double-negative verbs that allow virtually any use of a consumer's information. Still other commercial web sites fail to pass any privacy policy at all, safe in the knowledge that they face virtually no legal jeopardy for selling personal information. To be fair, some companies have taken consumer privacy seriously. Earthink launched a national television advertising campaign touting its policy of not selling customer information. U-Haul's web site simply says: ``We will never sell or share our information with anyone, or send you junk mail, we hate that stuff, too.'' Companies like Hewlett Packard, Intel, and Microsoft, giants of the high tech industry, already provide individuals opt-in protection with respect to their personal information. But, in the final analysis, despite the best of intentions and some successful efforts, reliance on self- regulation alone has not proven to provide sufficient protection. In its May 2000 Report to Congress, the Federal Trade Commission clearly recognized this shortcoming having studied this issue diligently for 5 years: ``Because self-regulatory initiatives to date fall short of broad-based implementation of effective self-regulatory programs, the Commission has concluded that such efforts alone cannot ensure that the online marketplace as a whole will emulate the standards adopted by industry leaders. The Commission recommends that Congress enact legislation that, in conjunction with continuing self-regulatory programs, will ensure adequate protection of consumer privacy online.'' Our legislation aims to do just that. Fundamentally, our legislation is built upon the five core principles of privacy protection identified by the Federal Trade Commission in its 1995 report to Congress regarding online privacy: 1. Notice, 2. Consent, 3. Access, 4. Security and 5. Enforcement. Those principles are tried and true and formed the framework for the bipartisan Children's Online Privacy Protection Act of 1998. Which was hailed by industry far and wide as a template for protecting children's personal information that is collected on the Internet. The bill we introduce today takes a singular approach. It divides online personal information into two categories: sensitive information and nonsensitive information. Sensitive information is narrowly tailored to include actual information about specific financial data, health information, ethnicity, religious affiliation, sexual orientation, and political affiliation, or someone's social security number. Non-sensitive information is all other personally identifiable information collected online. In this respect, the legislation is also similar to the two-tiered approach taken by the European Union in which companies are required to provide baseline protections governing the use of nonsensitive information, and stronger consent protections governing the use of sensitive data. More than 180 American companies, including Staples, Marriott, Microsoft, Intel, Hewlett Packard, DoubleClick Kodak, and Acxiom, doing business in Europe have agreed to provide such protections with respect to the personal data of European citizens. They have signed up for the EU Safe Harbor and their names are listed on the Department of Commerce's web site. Our bill simply asks these and other companies to provide similar protections for U.S. citizens. First, with respect to notice and consent, the bill would require web sites and online services to post clear and conspicuous notice of its information practices. In other words, plainly state to individuals what you plan to do with their personal information. To the extent that a web site collects sensitive information, it would also be required to obtain a consumer's affirmative consent, so-called ``opt-in'' consent, prior to the collection of such data. To the extent that a web site collects only non-sensitive personal data, it would be able to collect such data for other uses as long as it provides individuals with an ability to ``opt out'' of such uses and provides the consumer with actual notice at the point of collection, so-called ``robust notice'', which briefly and succinctly describes how the information may be used or disclosed. Many Internet companies are doing this already. For example, on the same page where an individual provides his or her personal information, the web site for 1-800 Flowers states: ``You will be receiving promotional offers and materials from our sites and companies we own. Please check the box below if you do not want to receive such materials in the future and do not wish us to provide personal information collected from you to third parties.'' Similarly, NBC's website says the following on the webpage where individuals register their personal information: ``As our customer, you will occasionally receive email from shopnbc.com about new services, features, and special offers we believe would interest you. If you'd rather not receive these updates, please uncheck this box.'' It's as simple as that. And it provides the individual the ability to make an informed choice at the critical point at which he or she is providing a company with personally identifiable information. Next, our legislation requires companies to provide individuals with the ability to find out what personal information a web site has collected about them. While important, this right of reasonable access is not unqualified. Rather, it considers a variety of factors including the sensitivity of the information sought by the consumer and the burden and expense on the provider in giving consumers access to their personal information. In addition, the bill would permit online companies to charge individuals a reasonable fee to access their personal data, as is similarly provided under the Fair Credit Reporting Act. In addition, our bill requires that web sites adopt reasonable security procedures to protect the security, confidentiality, and integrity of personally identifiable information, just as Congress required in the Children's privacy legislation. Moreover, the bill grants consumers important rights of redress. First, the Federal Trade Commission and state attorneys general are empowered to take action. If the FTC collects civil penalties, the bill creates a mechanism whereby those injured can petition to receive up to $200 of the award. For more serious violations involving sensitive information, the bill would additionally permit individuals on their own to pursue redress for damages in federal court. Finally, in addition to following these fair information principles, the legislation also takes the critical step of establishing a uniform federal standard for online privacy protection by preempting State Internet laws. Inconsistent state regulation of privacy is already causing problems for online businesses. Vermont has adopted ``opt-in laws'' governing financial and medical privacy. In Minnesota, the state Senate has adopted ``opt-in'' online privacy legislation by a vote of 96-0. In California, state privacy legislation is again moving through the state legislature, offering the very real possibility that online businesses will sooner rather than later face the prospect of trying to bring their online operation into compliance with inconsistent state laws. Because new technologies make privacy protection a constantly evolving issue, the bill requires the FTC not only to implement the requirements of the law, but further, to issue periodic reports about how the law is working; whether similar privacy protections should apply offline or to pre- existing data; whether standardized online privacy notices should be developed; if a meaningful safe harbor should be constructed; and whether privacy protection technologies in the marketplace such as P3P can help facilitate the administration of the Act. Consumer participation in cyberspace should not be conditioned on a willingness to relinquish control over one's personal information. Rather, for the medium to truly flourish, we must establish baseline consumer protections that will eliminate the tyranny of convenience in which consumers are forced to choose between disclosing private, personal information, or not using the Internet at all. Congress has a moral obligation to protect American individual liberties, including the right to better control the commercialization of one's own personal, private information. This bill is an important first step. The privacy protections in this legislation will instill more confidence in people to use the Internet and create a consistent legal framework for online businesses. It will provide better online privacy protections for consumers, better commercial opportunities for businesses who respond to consumer privacy concerns, and a better future for Americans who will embrace the Internet rather than fear it. Madam President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. HOLLINGS

Mr. HOLLINGS. Mr. President, I want to share with my colleagues an excellent essay by a long-time friend of this Senator, Bernard Rapoport. The essay points out that using any means to make money as those at Enron did, or evading taxes as too many American corporations do today by creating off-shore schemes, are unpatriotic acts, which should outrage the American people. As the message comes from someone who has distinguished himself as a business leader and whose generosity has made our society a little more just and equal, it is a message I hope all American business executives not only hear, but heed. The essay follows: ``Enronics''--(Lack of Patriotism) My father was a Russian Jewish revolutionist, (the Agrarian Revolution of 1905). He was a Marxist which advocated the philosophy that the ``ends justified the means.'' It is, perhaps, an understandable point of view of someone subjected to the despotic czarist rulers of the Russia in the time in which he was raised. A few years after he escaped from Siberia, to which he was exiled for life for participation in the revolution, he came to America still convinced about ends and means from the Marxian view. I, too, was raised with that philosophy. Fortunately, and I think at the same time as he, I was influenced by Emerson's wonderful admonition that ``character is that which can do without success,'' and it brought both of us to a new understanding. Yes, how one achieves is more important than if one achieves. It's the ``means'' that in fact does determine the ``ends.'' In my eight and a half decades of living I've had three poignant examples of unrestrained American patriotism. Of course, there have been many others, but what follows are the three that are most firmly imprinted in my memory. The first was America's reaction to Pearl Harbor. Second, during World War II, on that day that General Dwight Eisenhower told us by radio that D-Day had begun and that there would be a large loss of lives, and, third, 9/11! The most essential ingredient in patriotism is love of country, which requires a commitment that we conduct ourselves in such a manner as to consistently do those things to make our country better. The tragedy of ``Enronics'' is that these high-falutin' capitalists lowered themselves to a Marxian philosophy. Yes, their end was making money. Any means legal or otherwise, was justified because of their ``ends!'' My reason for this essay is that I'm not angry--``I'm mad!'' My father's daily plea was to me was to ``have a sense of outrage at injustice.'' ``Enronics.'' Gives just cause to understand outrage because it is unrestrained unpatriotism. Here's another example of what I perceive to be unpatriotism. In the New York Times of February 18, 2002, the column headline on the front page was, ``U.S. Companies Use Filings in Bermuda to Slash Tax Bills.'' I always thought I was fairly sophisticated when it came to finance, but I quickly learned after reading that article that I wasn't nearly as ``smart'' as I thought I was. This is an occurrence that happens often in my life. I majored in economics at the University of Texas. The bibliography included Adam Smith's ``Wealth of Nations,'' which is the predicate for capitalism. Smith realized the greed instinct within all of us, but thought that the invisible hand, i.e. competition, would be the moderator or leveler of the greed instinct. Well, this particular article to which I've alluded is beyond my comprehension. Evidently intelligent lawyers and accountants had come up with schemes to ``legally'' avoid the rules by which the rest of us must play. Secondly, this was combined with lobbyists who appealed to members of Congress to include riders to particular pieces of legislation which would benefit one particular corporation, and enable it to escape the responsibilities that any patriotic company would observe. Competition is making a better product, merchandising it more intelligently, and paying the taxes that all the rest in the same category pay. Well, not in the legal sense, but morally. I ask the question, ``Why do we put up with these kind of shenanigans? Why don't we have a sense of outrage at this injustice? Why don't we get mad? I'm reminded of Murray Edelman's wonderful though, ``Political history is largely an account of mass violence and of the expenditure of vast resources to cope with mythical fears and hopes. At the same time, large groups of people remain quiescent (that's us!) under noxiously oppressive conditions and sometimes passionately defend the very social institutions that deprive or degrade them.'' For example, in the New York Times article, it points out that one company made $30 million additional profit because they didn't pay taxes. Now if they had played by the same rules as other companies, they would've shown $30 million less profit because of the payment of what it really owes. Guess what! Their stock sells at a much higher price because they are taking advantage of what I call an ``Enronic'' approach. At least, such companies should have the courtesy and be required to show what their earnings would be if they were paying on the same basis as their competitors. In the New York Times article it is pointed out that one corporation saved $400 million in taxes! Reducing taxes can really be a meaningful objective if these groups to which I've referred to were truly patriotic. All these companies do to avoid these taxes is to have an office in Bermuda or the Cayman's or some other island, and obtain this unfair advantage. As ridiculous as it may sound, a company with one of these offices in Bermuda, for example, can borrow money from its Bermuda account, charge out the interest that it pays, reducing their taxes in the United States. Let's be quickly reminded that there is no tax on the interest earned by the Bermuda parent. So an additional injustice is compounded as a result of this tax avoidance scheme. The U.S. Treasury has to borrow money, sell bonds, and you know who buys them? These same corporations! Guess what! The interest they have received on their bonds as a result of their Bermuda office will not be taxable. It's a vicious circle! Where, of where, is there not a sense of outrage to their unconscientious acts of unpatriotism? We must be constantly reminded of what Guiseppe Mazzini said, ``God has given you your country as cradle, and humanity as mother; you cannot rightly love your brethren of the cradle if you love not the common mother.''

Mr. HOLLINGS

Mr. HOLLINGS. Mr. President, later this month, Andie Buel, Chief of the Congressional Operations Division at the Department of Defense, will be retiring after 35 years of government service. I wish her the very best. No question, the congressional delegation trip to Normandy in 1994 commemorating the 50th anniversary of D-Day stands out as one of the great highlights of my years in the Senate. Mrs. Buel was the architect of that trip. She has a long list of accomplishments, but to get right to the point: she has worked hard to ensure all our congressional trips are not only meaningful to our work in Washington, but that they run flawlessly. We thank her, and as she enters her new life we certainly will miss her.

Mr. HOLLINGS

Mr. HOLLINGS. Madam President, today I rise to introduce bipartisan legislation that will establish baseline requirements for the protection of personal information collected from individuals over the Internet. This bill, the Online Personal Privacy Act, represents the work of many months and important input from consumer groups, affected individuals, and most importantly, many Senators on the Commerce Committee. The origin of this emerging consensus position began to take shape at a Commerce committee hearing last summer that focused generally on whether there was a need for online privacy legislation. At that time, members of the committee began to articulate the notion that not all personal information is created equal. I agree. Some, highly sensitive personal information, such as personal financial or medical information or a person's religious beliefs are clearly more sensitive than other garden-variety types of information, such as a pair of slacks that an individual may purchase. Since that hearing, and in numerous meetings with members of the Committee, we have worked hard to develop a balanced approach to Internet privacy regulation that recognizes and builds upon best practices in the online community while establishing a federal baseline standard for the protection of individuals' privacy on the Internet. Let me begin by expressing my gratitude to Senators Rockefeller, Inouye, Breaux, and Cleland, who worked closely with me during the last Congress to advocate the need for strong online privacy protections and who have agreed to be original cosponsors of this legislation. In addition, I would also like to particularly thank Senators Kerry, Stevens, and Burns for their invaluable contributions throughout this process and their willingness to join with us in working to craft a workable, bipartisan, consensus position on legislation that will provide individuals with better controls over the use of their personal information while fueling the growth of e-commerce as consumer confidence in the Internet spurs a significant increase in online activity. Some have argued that Americans' concerns about privacy no loner exist in the aftermath of September 11. But poll after poll consistently demonstrates that the American people want companies they patronize to seek their permission prior to using their personal information for commercial profit. These concerns are heightened with respect to the Internet, which, in a digital age, enables the seamless compilation of highly detailed personal profiles of Internet users. Accordingly, fears about privacy have had palpable effects on the willingness of consumers to embrace the full potential of the Internet and e-commerce. Distrust of false privacy promises has sparked a rage of online self- defense, especially the providing of false information by individuals. Industry analysts estimate that between one-fifth to one-third of all individuals provide false personal information on the Internet. This response is understandable given that consumers have few tools to discover whether their personal information is being disclosed. sold, or otherwise misused, and they have virtually no recourse. Privacy fears are stifling the development and expansion of the Internet as an engine of economic growth. Because of consumer distrust, online companies and services are losing potential business and collecting bad data, blocking the Internet and its wide range of services from reaching its full potential. The lack of enforceable privacy protections is a significant barrier to the full embrace by consumers of the Internet marketplace. According to a recent Harris/ Business Week poll, almost two-thirds of non-Internet users would be more likely to use the Net if the privacy of their ``personal information and communications were protected.'' Moreover, according to a recent Forrester study, online businesses lost nearly $15 billion, or 27 percent of e-commerce revenues, due to consumer privacy concerns. Those numbers are significant in light of the economic downturn and its disproportionate impact on the high-tech Internet sectors. Good privacy means good business and the Internet economy could use a healthy dose of that right now. Accordingly, our legislation offers a win-win proposition for consumers and business: it will protect the privacy of individuals online and provide online businesses with a new market of willing customers. While protecting the necessary business certainty of a single Federal standard. Online companies have long argued that privacy regulations would hamper their ability to efficiently conduct business on-line and give consumers the tailored buying experience they now expect from the Internet. Online merchants also touted self-regulation as sufficient privacy protection. We know otherwise. Privacy violations continue to make headlines: a major outcry erupted last year after Eli Lilly disclosed a list of hundreds of customers suffering from depression, bulimia, and obsessive compulsive disorder over the Internet. Moreover, just last week, a New York Times article, ``Seeking Profits, Internet Companies Alter Privacy Policy,'' recounted how Internet companies such as Yahoo had changed their privacy policies in order to require consumers to restate their privacy preferences even if they had previously withheld consent for the use and commercialization of their personal information. Accordingly, these companies expanded their ability to use an individual's personal information for online and offline marketing purposes notwithstanding that individual's prior policy preferences. Still other businesses confound consumers with opaque privacy policies that begin with, ``Your privacy is important to us,'' but in the subsequent legalese, outline a series of exceptions crafted with double-negative verbs that allow virtually any use of a consumer's information. Still other commercial web sites fail to pass any privacy policy at all, safe in the knowledge that they face virtually no legal jeopardy for selling personal information. To be fair, some companies have taken consumer privacy seriously. Earthink launched a national television advertising campaign touting its policy of not selling customer information. U-Haul's web site simply says: ``We will never sell or share our information with anyone, or send you junk mail, we hate that stuff, too.'' Companies like Hewlett Packard, Intel, and Microsoft, giants of the high tech industry, already provide individuals opt-in protection with respect to their personal information. But, in the final analysis, despite the best of intentions and some successful efforts, reliance on self- regulation alone has not proven to provide sufficient protection. In its May 2000 Report to Congress, the Federal Trade Commission clearly recognized this shortcoming having studied this issue diligently for 5 years: ``Because self-regulatory initiatives to date fall short of broad-based implementation of effective self-regulatory programs, the Commission has concluded that such efforts alone cannot ensure that the online marketplace as a whole will emulate the standards adopted by industry leaders. The Commission recommends that Congress enact legislation that, in conjunction with continuing self-regulatory programs, will ensure adequate protection of consumer privacy online.'' Our legislation aims to do just that. Fundamentally, our legislation is built upon the five core principles of privacy protection identified by the Federal Trade Commission in its 1995 report to Congress regarding online privacy: 1. Notice, 2. Consent, 3. Access, 4. Security and 5. Enforcement. Those principles are tried and true and formed the framework for the bipartisan Children's Online Privacy Protection Act of 1998. Which was hailed by industry far and wide as a template for protecting children's personal information that is collected on the Internet. The bill we introduce today takes a singular approach. It divides online personal information into two categories: sensitive information and nonsensitive information. Sensitive information is narrowly tailored to include actual information about specific financial data, health information, ethnicity, religious affiliation, sexual orientation, and political affiliation, or someone's social security number. Non-sensitive information is all other personally identifiable information collected online. In this respect, the legislation is also similar to the two-tiered approach taken by the European Union in which companies are required to provide baseline protections governing the use of nonsensitive information, and stronger consent protections governing the use of sensitive data. More than 180 American companies, including Staples, Marriott, Microsoft, Intel, Hewlett Packard, DoubleClick Kodak, and Acxiom, doing business in Europe have agreed to provide such protections with respect to the personal data of European citizens. They have signed up for the EU Safe Harbor and their names are listed on the Department of Commerce's web site. Our bill simply asks these and other companies to provide similar protections for U.S. citizens. First, with respect to notice and consent, the bill would require web sites and online services to post clear and conspicuous notice of its information practices. In other words, plainly state to individuals what you plan to do with their personal information. To the extent that a web site collects sensitive information, it would also be required to obtain a consumer's affirmative consent, so-called ``opt-in'' consent, prior to the collection of such data. To the extent that a web site collects only non-sensitive personal data, it would be able to collect such data for other uses as long as it provides individuals with an ability to ``opt out'' of such uses and provides the consumer with actual notice at the point of collection, so-called ``robust notice'', which briefly and succinctly describes how the information may be used or disclosed. Many Internet companies are doing this already. For example, on the same page where an individual provides his or her personal information, the web site for 1-800 Flowers states: ``You will be receiving promotional offers and materials from our sites and companies we own. Please check the box below if you do not want to receive such materials in the future and do not wish us to provide personal information collected from you to third parties.'' Similarly, NBC's website says the following on the webpage where individuals register their personal information: ``As our customer, you will occasionally receive email from shopnbc.com about new services, features, and special offers we believe would interest you. If you'd rather not receive these updates, please uncheck this box.'' It's as simple as that. And it provides the individual the ability to make an informed choice at the critical point at which he or she is providing a company with personally identifiable information. Next, our legislation requires companies to provide individuals with the ability to find out what personal information a web site has collected about them. While important, this right of reasonable access is not unqualified. Rather, it considers a variety of factors including the sensitivity of the information sought by the consumer and the burden and expense on the provider in giving consumers access to their personal information. In addition, the bill would permit online companies to charge individuals a reasonable fee to access their personal data, as is similarly provided under the Fair Credit Reporting Act. In addition, our bill requires that web sites adopt reasonable security procedures to protect the security, confidentiality, and integrity of personally identifiable information, just as Congress required in the Children's privacy legislation. Moreover, the bill grants consumers important rights of redress. First, the Federal Trade Commission and state attorneys general are empowered to take action. If the FTC collects civil penalties, the bill creates a mechanism whereby those injured can petition to receive up to $200 of the award. For more serious violations involving sensitive information, the bill would additionally permit individuals on their own to pursue redress for damages in federal court. Finally, in addition to following these fair information principles, the legislation also takes the critical step of establishing a uniform federal standard for online privacy protection by preempting State Internet laws. Inconsistent state regulation of privacy is already causing problems for online businesses. Vermont has adopted ``opt-in laws'' governing financial and medical privacy. In Minnesota, the state Senate has adopted ``opt-in'' online privacy legislation by a vote of 96-0. In California, state privacy legislation is again moving through the state legislature, offering the very real possibility that online businesses will sooner rather than later face the prospect of trying to bring their online operation into compliance with inconsistent state laws. Because new technologies make privacy protection a constantly evolving issue, the bill requires the FTC not only to implement the requirements of the law, but further, to issue periodic reports about how the law is working; whether similar privacy protections should apply offline or to pre- existing data; whether standardized online privacy notices should be developed; if a meaningful safe harbor should be constructed; and whether privacy protection technologies in the marketplace such as P3P can help facilitate the administration of the Act. Consumer participation in cyberspace should not be conditioned on a willingness to relinquish control over one's personal information. Rather, for the medium to truly flourish, we must establish baseline consumer protections that will eliminate the tyranny of convenience in which consumers are forced to choose between disclosing private, personal information, or not using the Internet at all. Congress has a moral obligation to protect American individual liberties, including the right to better control the commercialization of one's own personal, private information. This bill is an important first step. The privacy protections in this legislation will instill more confidence in people to use the Internet and create a consistent legal framework for online businesses. It will provide better online privacy protections for consumers, better commercial opportunities for businesses who respond to consumer privacy concerns, and a better future for Americans who will embrace the Internet rather than fear it. Madam President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. HOLLINGS

Mr. HOLLINGS. Madam President, I want to recognize the 20 students of Wilson High School in Florence, SC, who will be visiting the Capitol in early May to compete in the national finals of the ``We The People . . . The Citizen and the Constitution'' program. Right now the students are conducting research and preparing for the contest, which will test their knowledge of the Constitution and the Bill of Rights against 1,200 students from across the country. They have earned the trip by showing they were the best of the best in a statewide contest in February. Obviously, I hope my fellow South Carolinians win it all, but whatever happens, we are all winners in this country. When young people, on their own, want to understand the fundamental principles and values of our democracy, they are more likely to vote. They are more likely to participate in political life. They are more likely to take serious the civic duties that this nation needs of our citizens in the new century. I wish the very best to the Wilson Tigers: Jessica Anderson, Whitney Benjamin, Carol Chen, Cameron Coker, Katherine Collar, Joshua Croteau, Matthew Daniels, Leon Dock, Cara Dowling, Christine Gonzales, Latrese McElveen, Matthew Meggs, Philip Miller, Virginia Munson, Ashley Neel, Dacey Riley, Elinor Rooks, Gregory Schuetz, Priscilla Suggs, and Jingtian Yu.

Mr. HOLLINGS

Mr. HOLLINGS. I object.

Mr. HOLLINGS. After the objection.

Mr. HOLLINGS. Mr. President, right to the point on Andean trade, we have supported it and we have indicated, of course, to the administration we would go along with an extension. However, we have given at the office, as the saying goes. I have lost 50,900 textile jobs since NAFTA, and I am wondering about these people talking of morality, if they would be glad to accept my amendment to include Brazil and orange juice. Wouldn't that be immoral? I have another moral for a motion on the Andean pact, and that is to get a little beef and wheat to Argentina; they are in desperate circumstances. Morally, under the good neighbor policy of Franklin D. Roosevelt, we Democrats ought to be morally committed to beef and wheat to Argentina. We have all kinds of amendments we can present. My point is, this country has lost its manufacturing capacity. That goes right to the heart of the economy and the recovery from the recession. Under the Marshall plan, yes, we sent over our technology and expertise. It worked. Capitalism conquered communism. However, there comes a time to face reality and that is that there is no such thing as free trade. We have the enemy within--the Business Roundtable. Boy, I have gotten awards from them. But what has happened over the years is they have moved their production. I would like to print in the Record about Jack Welch squeezing the lemon. He said on December 6, 2000, the year before last, squeeze the lemon. He said General Electric was not going to serve or contract with any supplier that didn't move to Mexico. So we have an affirmative action plan to get the jobs. Then comes free trade, promotes jobs. The gentleman Welch is squeezing something else. That is not a problem. I don't think we are going to handle that tonight. Let's now get on with what we are morally committed to on the idea of trade. I am morally committed to the economic strength of this country.

Mr. HOLLINGS. I object.

Mr. HOLLINGS. I do.

Mr. HOLLINGS

Mr. HOLLINGS. Mr. President, I rise along with Senators Stevens, Inouye, Breaux, Nelson, and Feinstein to introduce the Consumer Broadband and Digital Television Promotion Act of 2002, legislation that will promote broadband and the digital television transition by securing content on the Internet and over the Nation's airwaves. For several years the private sector has attempted to secure a safe haven for copyrighted digital products, unfortunately with little to show for its efforts. The result has been an absence of robust, ubiquitous protections of digital media which has lead to a lack of content on the Internet and over the airwaves. And who has suffered the most? Consumers, as they are denied access to high quality digital content in the home. The reality is that a lack of security has enabled significant copyright privacy which drains America's content industries to the tune of billions of dollars every year. For example, the movie studios estimate that they lose over $3 billion annually by way of analog piracy. In order to pirate copyrighted movies via analog formats, an individual makes an illegal copy of the movie, sometimes by taping it in a movie theater with a personal video recorder, and then distributes it, in analog form, at discount. However, because subsequent copies of analog movies degrade over time, there is a limit to the success of this type of piracy. In a digital age, however, the privacy threat is exponentially magnified. So on the Internet, copyright content, be it a movie, a book, music, or software, travels in a digital language of 1s and 0s, and every copy of that content, from the 1st to the 1000th is as pristine as the original. Also, unlike an analog pirated movie, which must be physically packaged and transported, a digital copy can be sent around the world on the Internet with a single click of a mouse. The copyright industries are justifiably worried about distributing their content on the Internet absent strong copyright protection measures. As Internet access becomes increasingly available over high-speed, broadband connections, these worries will only heighten. It should be noted, however, that the Internet is not the only threat to unprotected digital content. Digital video programming is also subject to a large privacy threat. Rapid advances in consumer electronics make it easier to steal copyright content. Newly developed digital compression and memory technologies make it possible to store two complete movies on a device the size of a postage stamp. Today, digital media can be transmitted over wired or wireless channels and played and stored on a host of consumer electronics devices. By and large, these are positive developments for consumers. But any device that can legitimately play, copy, or electronically transmit one or more categories of media also can be misused for illegal copyright infringement, unless special protection technologies are incorporated into such a device. Unfortunately, as technology has advanced, copy protection schemes have not kept pace, fostering a set of consumer expectations that at times actually promote illegal activity on the Internet. For example, according to a Jupiter Media Matrix report, over 7 million Americans use technology on the Internet to swap music and other digital media files. More recent news reports place this number at over 11 million. While some of this activity is legal, much of it is not. Every week a major magazine or newspaper reports on the thousands of illegal pirated works that are available for copying and redistribution online. Academy award winning motion pictures, platinum records, and Emmy award winning television shows--all for free, all illegal. Piracy is growing exponentially on college campuses and among tech savvy consumers. Such lawlessness contributes to the studios and record labels' reluctance to place their digital content on the Internet or over the airwaves. At the same time, millions of law abiding consumers find little reason to spend discretionary dollars on consumer electronics products whose value depends on their ability to receive, display and copy high quality digital content like popular movies, music, and video games. Accordingly, only early adopters have purchased high definition television sets or broadband Internet access, as these products remain priced too high for the average consumer. The facts are clear in this regard. Only two million Americans have purchased HDTV sets. As for broadband, rural and underserved areas aside, there is not an availability problem. There is a demand problem. Roughly 85 percent of Americans are offered broadband in the marketplace but only 10-12 percent have signed up. The fact is that most Americans are averse to paying $50 a month for faster access to email, or $2,000 for a fancy HDTV set that plays analog movies. But if more high-quality content were available, consumers might come. By unleashing an avalanche of digital content on broadband Internet connections as well as over the digital broadcast airwaves, we can change this dynamic and give consumers a reason to buy new consumer electronics and information technology products. To do so requires the development of a secure, protected environment to foster the widespread dissemination of digital content in these exciting new mediums. Although, it is technologically feasible to provide such a protected environment, the solution has not been forthcoming through voluntary private sector negotiations involving the industries with stakes in this matter. This is not to say, however, that those industries do not recognize the tremendous economic potential to be derived from a proliferation of top notch digital content to consumers in the home. The movie studios, and the rest of the copyright industries, for example, are tremendously excited about the possibility of providing their products to consumers over the Internet and the digital airwaves, provided they can be assured that those products' copyrights are not infringed in the process. Although marketplace negotiations have not provided such an assurance, a solution is at hand. Leaders in the consumer electronics, information technology, and content industries are America's best and brightest. They can solve this problem. The consumer electronics and high tech industries claim they are ready to do just that. America's top high-tech executives sent me a letter three weeks ago to that effect. While, I want to believe them, industry negotiations have been lagging. Both sides share some blame in this area. But the blame games need to end. It's time for results, not recriminations. I believe the private sector is capable, through marketplace negotiations--of adopting standards that will ensure the secure transmission of copyrighted content on the Internet and over the airwaves. But given the pace of private talks so far, the private sector needs a nudge. The government can provide that nudge, and in doing so continue the government's longstanding role in promoting, and sometimes requiring, the implementation of technological standards in electronics equipment to benefit consumers. We debated the merits of such an approach in the Commerce Committee on February 28, 2002 when the leaders of the copyright, consumer electronics, and information technology industries testified as to their distinct views on this issue. At that hearing, every Senator and every witness agreed that the problem of digital piracy requires resolution. Specifically, our hearing demonstrated that there are three discrete problem areas that merit government intervention. First, is the piracy threat presented toward unprotected digital broadcast television. Over the air broadcast digital signals cannot be encrypted because the millions of Americans who receive their signal via antennas cannot decrypt the signal. As a result, digital broadcast signals are delivered in unprotected format and are subject to illegal copying or redistribution over the Internet upon transmission. The technology exists today to solve this problem. It has been referred to as a ``broadcast flag'' which would instruct digital devices to prevent illegal copying and Internet retransmission of digital broadcast television. Consumer electronic devices would respond to the technology and prevent copyright infringement. However, because not every device would be required to respond to the technology, ubiquitous response requires a mandate by government. The second problem is commonly referred to as the ``Analog hole.'' As protected digital programming, usually delivered over satellite or cable, but also available on the Internet, is decrypted for viewing by consumers, most frequently on television sets, the programming is temporarily ``in the clear.'' At this point, pirates may have the opportunity to take advantage of an ``Analog hole'' by copying the content into a digital format, i.e. re-digitizing it, and then illegally copying and/or retransmitting the content. The technology to solve this problem either exists today, or will be available shortly. Regardless, the solution is technologically feasible. As with the ``broadcast flag'' the solution to the ``Analog hole'' will require a government mandate to ensure its ubiquitous adoption across consumer devices. The final problem poses the greatest threat. Literally millions of digital files of music and videos are illegally copied, downloaded, and transmitted over the Internet on a regular basis. Current digital rights management solutions are insufficient to rectify this problem. Some consumers resorting to illegal behavior do so unknowingly. Many others do so willingly. Regardless, consumers desire high-quality digital content on the Internet and it is not being provided in any widespread, legal fashion. Fortunately, a solution to this problem is also technologically feasible. It too will require government action, including a mandate to ensure its swift and ubiquitous adoption. While industries are at odds as to how to solve these critical content protection problems, the legislation we introduce today provides us with the tools to break the logjam. Specifically, the legislation requires the content, consumer electronics, and information technology industries to come together with representatives of consumer groups to develop standards, technologies, and encoding rules to safeguard digital content so that it will be made more readily available to consumers without being subject to piracy. The affected parties would have one year to reach agreement. The technologies would then be incorporated into all digital media devices to ensure universal protection for digital content and universal access to such content for consumers. The deadline on industry would work in the following fashion: if they come together to solve these problems in private sector talks, we will empower government enforcement so that all consumer devices comply. If they don't, the government, in consultation with the private sector, will have to step in. America's creative artists deserve our protection. Our copyright industries are among our greatest economic and creative assets. The framers recognized that innovation and creativity was instrumental to our country's economic health when they empowered Congress in the Constitution to protect copyrighted products. Now, however, copyrighted media products are delivered digitally, and copyright infringement is more difficult to detect and prevent. That is why strong technological protections need to be layered on top of the copyright laws, to complement the law as it exists today. Along those lines, I want to emphasize that this legislation does not alter existing copyright law. Copyright law rests squarely within the jurisdiction of the Senate Judiciary Committee. I hope to work closely with Chairman Leahy and Ranking Member Hatch to stop copyright piracy in a digital age. Some have said that legislation is unwieldy in this area. But our legislation would not be the first time Congress imposed technological requirements to benefit consumers. And it won't be the last. We have been here before. In 1962, under the All Channel Receiver Act, Congress mandated that all television receivers include the capability to tune all channels, UHF and VHF, allocated to the television broadcast service. More recently, in 1998, Congress required that all analog VCRs recognize a standard copy control technology, know as ``Macrovision''. In the former case, the Federal Government and the Federal Communications Commission took the lead. In the latter case, industry first agreed to the `Macrovision' standard which Congress later codified by legislation. So, whether Congress or industry has led the way, the results have benefitted consumers and industry, by providing Americans with wider access to programming and content. Pursuant to the bill we introduce today, the standards, technologies, and encoding rule would work in the following manner. Digital content delivered over the Internet and over the broadcast airwaves would include instructions as to consumers' ability to copy available content and would prevent the illegal retransmission of that content over the Internet. Digital media devices such as televisions sets, cable boxes, and personal computers, would be manufactured to recognize and respond to those instructions to prevent illegal copying or redistribution. I want to stress, however, in the strongest terms possible, that the standards agreed to by industry would not be permitted to thwart legitimate consumer copying of programming in the home, for time shifting purposes, for example. Similarly, the technologies and encoding rules would be required to take into account the need to preserve fair use of otherwise protected content, for educational and research purposes for example. Specifically, our bill requires that encoding rules ``take into account limitations on exclusive rights of copyright holders, including the fair use doctrine.'' In addition, the legislation specifies that no copy protection technology may prevent consumers from ``making a personal copy for lawful use in the home'' of non pay-per-view television programming. I want to be clear on this point, no legislation can or should pass Congress in this area that does not seek to protect legitimate consumer copying and fair use practices. Critics of earlier drafts of our legislation painted it as heavy handed and awkward government selection of technologies. I want to respond. We have listened to their arguments delivered in dozens of meetings with my staff, and the bill we introduce today does nothing of the sort. Under the new legislation, if the required private sector negotiations fail, the FCC will begin a process, in consultation with those same private sector representatives, to implement technologically feasible solutions. So, in practice, the private sector, even in the event of a government initiated approach, will have every incentive and opportunity to guide a solution largely on its own. Critics of earlier discussion drafts of our legislation also claimed that it would freeze innovation and that any solutions would invariably be out of date shortly after they are selected due to the rapid and accelerated development of technology in the high tech sector. But here too we have listened and responded. Pursuant to our legislation, if the private sector determines that the selected technological solution needs to be updated or modified, they may do so. Its as simple as that. Such a change might be warranted because the technologies or encoding rules in use have been compromised by hackers or pirates. Or, technological improvements may be developed that ensure greater security for content, or more readily take into account consumers or researchers' fair use expectations. Regardless, in any of these instances, at any time, the legislation would allow the representatives of the content, consumer electronics, and information technology industries to implement any necessary modification of the agreed upon technologies. They could simply do so on their own, and then notify the FCC of their actions. At every stage in the process, the private sector, not the government, has the opportunity and the incentive to grab the reins. To date, however, this has not happened. The legislation we introduce today seeks to change that. I ask unanimous consent that the text of the legislation, the Consumer Broadband and Digital Television Promotion Act, be printed in the Record.

Mr. HOLLINGS

Mr. HOLLINGS. Mr. President, I want to share with my colleagues an excellent column by Thomas E. Thornhill that appeared in Charleston's The Post and Courier on March 15, 2002. Mr. Thornhill points out the need to balance the environmental and esthetic consequences of expanding the port of Charleston with the economic benefits such expansion brings. As we debate what to do with the Alaska National Wildlife Refuge as part of the energy bill, I think it is important to add to our dialogue a perspective from someone who has seen the consequences of expansion in South Carolina, and who believes that nature mismanaged retaliates with relentless vengeance. I ask that the article be printed in the Record. The article follows. [From the Post and Courier, Friday, Mar. 15, 2002.] Port of Charleston Should Live Within Nature's Tolerances (By Thomas E. Thornhill) How about a different slant on the port expansion issue? Do we really know what Charleston Harbor can tolerate? This is a finite body of water which has some limitations dictated by nature. Yes, expansion of the port facilities will mean more business, more trucks, more highway building, etc., but what will it do to our rivers and harbor? My brother and I have been working for water and soil conservation for over 40 years. Our father coined the phrase, ``Nature mismanaged, retaliates with relentless vengeance.'' We, the citizens, and the Corps of Engineers mismanaged nature with the diversion of the Santee River into the Cooper River, and we're still paying for it. We were pumping enough mud out of Charleston Harbor to cover peninsular Charleston by about 6 feet each year. That was reduced with another diversion or rediversion canal, but the mud continues to build up--just look at Drum Island and the Cooper side of Daniel Island--tons and tons of spoil pumped from the rivers.. We are not a locale of deep water; let's recognize that. You need only spend a few days in our creeks and marshes to know that we have that wonderful pluff mud, the nursery grounds for the Atlantic Coast fisheries, that does not and will not stay in place like rock and sand of other ports. Waterside construction causes the natural flow to slow and, in short order, the mud builds up. How else would we have land east of East Bay Street, which was the city sea wall. Look at the SPA Passenger Terminal, Yacht Basin, Maritime Center--full of mud. Examine the land around the Sheraton Hotel or Comfort Inn along the Ashley. It's sinking. There is no way to contain our mud except by gentle slopes and marshes. As we dig our channels deeper and deeper, we are mismanaging nature. We cannot dig 50-foot ditches in our rivers without causing sloughing off of the shoreline, the changing of the flow of our rivers, and the sinking of our highlands. The harbor jetties are blamed for the demise of Morris Island so that the lighthouse is now at sea. The jetties are blamed for changing the geography on Folly Island. Breakwaters, jetties and revetments are now outlawed as they caused more erosion that they were designed to cure. Charleston Harbor has limits dictated by nature. We cannot continue to defy natural laws by overbuilding our shorelines, packing our marshes with silt and fill, and overpopulating our water courses. We cannot be one of the largest shipping ports in the country and yet have the finest harbor resource on the East coast. We cannot fill our waterfronts with docks and still be America's Most Historic City and have the quality of life that goes with it. We cannot double the amount of super ships and still have one of the finest recreational and scenic harbors in the world--to say nothing about the inability of our transportation network to handle the additional load. Trucks are clogging I-26 and I-526 on any workday. Driving a car is hazardous. The State Ports Authority has done a magnificent job to make our port facilities and service the envy of the world. With this same talent, they now need to find a future that can live within the environmental restraints that nature has dealt us. Perhaps their future should be planned as though Daniel Island did not exist--the filling of those marshlands is damage enough. We must not, as the Bible teaches, ``sell our birthright for a mess of pottage.'' As a port, we should live within the hand dealt us by nature. As a port city, we should do the best with what we were given to save it for future generations. Remember that thousands of acres of marsh have been destroyed just to keep the harbor dredged and remember that every structure on a waterway or beach causes erosion problems elsewhere. Of course the Port produces jobs and economic benefit (it always has and will), but the incremental increase gained by increasing the size of port facilities is to the profit of a relatively small amount of the population, while those who live here must shoulder the burden, esthetically, economically and environmentally. ``Nature mismanaged retaliates with relentless vengeance.''