Fritz Hollings

Mr. HOLLINGS

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 President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. HOLLINGS. Mr. President, I ask for the yeas and nays on the remaining Hollings amendments. I think they may have been ordered on one. I ask unanimous consent that it be in order to ask for the yeas and nays on the other two.

Mr. HOLLINGS. Mr. President, how much time do I have remaining?

Mr. HOLLINGS

Mr. HOLLINGS. Mr. President, I ask unanimous consent that the reading of the amendments be dispensed with.

Mr. HOLLINGS. Mr. President, I call up four amendments which are at the desk, and I ask the clerk to report them.

Mr. HOLLINGS. Mr. President, I ask unanimous consent that the pending amendment be temporarily laid aside so the Senator from South Carolina can call up four amendments. They are short. I thank the distinguished Senator from Tennessee and the distinguished Senator from New York, the manager of the bill. It is not my purpose to debate these amendments but to call them up so they can be printed in the Record. I will not consume over 15 minutes.

Mr. HOLLINGS. Mr. President, the next amendment is the Export-Import Bank: Notwithstanding any other provision of law to the contrary, and in addition to any requirements imposed by . . . the Export-Import Bank . . . or the Overseas Private Investment corporation . . . . The applicant, in making those applications before those entities, will certify that they have not transferred advanced technology after January 1, 2001, to the People's Republic of China, and, two, have not moved any production facilities after January 1, 2001, from the United States to the People's Republic of China. With more time, I can go into the reason for it. I only want to substantiate what the distinguished Ambassador said. Finally, the fourth amendment has to do with agriculture. I ask unanimous consent to print in the Record a schedule of commodity groupings of the trade balances with the People's Republic of China in the years 1996, 1997, 1998, and 1999.

Mr. HOLLINGS. Mr. President, the first amendment to H.R. 4444, No. 4134, has to do with jobs and the trade deficit. It says: The Securities and Exchange Commission shall amend its regulations to require the inclusion of the following information and 10-K reports required to be filed with the Commission: (1) The number of employees employed by the reporting entity outside the United States directly, indirectly, or through a joint venture, or other business arrangement, listed by country in which employed. (2) The annual dollar volume of exports of goods manufactured or produced in the United States by the reporting entity to each country to which it exports such goods. (3) The annual dollar volume of imports of goods manufactured or produced outside the United States by the reporting entity from each country from which it imports such goods. It is not a burdensome amendment. They report where they are working and the number of employees in those countries. I was intrigued by the report from the National Association of Manufacturers that came out today. I quote from it: Of the total $228 billion U.S. merchandise trade deficit so far this year, 77 percent has been in manufacturing. We are losing our manufacturing capacity, and as Akio Morita, the former head of Sony, said some years back, the world power that loses its manufacturing capacity will cease to be a world power. The second amendment has to do with technology and the export of technology. Our distinguished Ambassador engaged in the conduct of trade, Ambassador Barshefsky, said before the press and the Finance Committee: The rules put an absolute end to forced technology transfers. This particular amendment is to then monitor that statement: The Congress makes the following findings: (1) The trade deficit with the People's Republic of China for . . . 1999 was approximately $3.2 billion. It is estimated that it will be $5 billion this year. So beginning with the first business day of January 2001 and thereafter, ``the President shall report to the Congress on the balance of trade between the United States and the People's Republic of China in advanced technology products . . . .'' If the President reports a trade deficit in favor of the People's Republic of China . . . in excess of $5 billion-- I want to be realistic; it probably will get to that $5 billion this year-- the President is authorized and requested to initiate negotiations to obtain additional commitments from the People's Republic of China to reduce or eliminate that imbalance. And, of course, report. I ask unanimous consent to print in the Record an article entitled ``Raising the Technology Curtain.''

Mr. HOLLINGS

Mr. HOLLINGS. Mr. President, amongst all articles, you can see, generally speaking, China has a glut in agriculture. Their problem, of course, is transportation and distribution. But there is no question that once that problem is solved, that 7800 million farmers can certainly outproduce, if you please, the 3.5 million farmers in the United States. All of the farm vote is in strong support of PNTR because they think, of course, it is going to enhance their agricultural trade. The fact is there are only a few here--the significant ones--and I have picked those out; cereals--wheat, corn, rice--and soybeans. Yes, there is a plus balance of trade in the cereals--wheat, corn, and rice--but it has gone from 440 million bushels down to 39 million bushels. With soybeans, it has gone from 366 million bushels, in the 4-year period, down to 288 million bushels. So this particular amendment states that beginning on the first day of next year: [T]he President shall report to the Congress on the balance of trade between the United States and the People's Republic of China in cereals (wheat, corn, and rice) and on the balance of trade between the United States and the People's Republic of China in soybeans for the previous year. If the President reports a trade deficit in favor of the People's Republic of China . . . for cereals or for soybeans, then the President is authorized and requested to initiate negotiations to obtain additional commitments from the People's Republic of China to reduce or eliminate the imbalance. The President shall [also] report to the Congress the results of those negotiations . . . . In a line last week, I saw the Prime Minister of Great Britain at the conference in New York. He was all stirred and upset with respect to 1,000 cashmere jobs in the United Kingdom. He was really going to bat for them. The story had his picture politicking, trying to convince the United States in particular not to take retaliatory action against his 1,000 cashmere jobs. Here I stand, having lost 38,700 textile jobs in the State of South Carolina since NAFTA--over 400,000 nationally. According to the National Association of Manufacturers, we are going out of business. And I can't get the attention of the White House and I can't get the attention of Congress. I thank the distinguished Senator from New York for permitting me to have these amendments called up and printed, and then, of course, obviously set aside. Let me take my turn in behind the distinguished Senator from Tennessee and the Senator from West Virginia. The Byrd amendment is up, and I think several others. I will take my turn. But I want my colleagues to look at these reasonable, sensible, pleading kind of amendments so that we can fulfill, as a Congress, under the Constitution, article 1, section 8: The Congress of the United States shall regulate foreign commerce. Mr. President, I yield the floor and suggest the absence of a quorum.

Mr. HOLLINGS

Mr. HOLLINGS. Mr. President, I rise along with my colleagues Mr. Brownback and Mr. Kerry to make clear the intent of certain provisions in the Pipeline Safety Improvement Act of 2000. It has come to my attention that there may be some ambiguities contained in the language of Section 10(b) of the proposed legislation (S. 2438). As you are aware, Section 10(b) of the bill adds a new provision--Section 60117(b)(3)--to the Revised Pipeline Safety Act. This provision requires that, during the course of an incident investigation, a pipeline owner or operator make records, reports, and information relevant to the incident investigation available to the Secretary upon request within the time limits prescribed in a written request. The bill incorporates by reference this new section into both the civil and criminal penalties sections of the Act, Sections 60122(a) and 60123(a), respectively. Under the current proposal, failure to comply with this reporting provision can result in civil penalties of up to $500,000 for each violation and $1,000,000 for a related series of violations. And, a separate violation occurs for each day the violation continues. Civil penalties are capped at a maximum of $500,000 per day and $1,000,000 for a ``related series of violations.'' The information required to be produced during an investigation pursuant to Section 60117(b)(3) is limited to information ``relevant to [a particular] incident investigation.'' I am seeking clarification that all information requests issued by the Secretary pursuant to a single incident investigation are considered ``related'' for purposes of calculating the $1,000,000 civil penalty cap for a ``related series of violations'' under Section 60122(a). In other words, the provision would not treat each written information request as a separate and unrelated event for purposes of applying the $1,000,000 cap so long as all of the requests concern the same incident. Were that not the case, a pipeline owner or operator that receives numerous document requests relating to an incident, but is unable to assemble and provide all of the information in time to meet the Secretary's deadline, could face fines far exceeding the $1,000,000 contemplated by this legislation.

Mr. HOLLINGS. Mr. President, I rise today in support of S. 2438, the Pipeline Safety Improvement Act of 2000, and to support the amendment to the bill. I urge my fellow Senators to adopt the amendment and to support passage of this bill. It, indeed, will make our Nation's pipeline system safer. The purpose of the bill is to ensure the safety of natural gas and hazardous liquid pipelines. I appreciate the considerable number of hours that went into creating this bill by all of the parties. I also am satisfied by the spirit of compromise that infused the parties' diligent efforts. As a result of their admirable and cooperative work we have a bill that reaffirms our efforts to regulate gas and hazardous liquid pipelines safely and effectively without interfering with the pipeline operators and owners ability to provide service to our Nation. With respect to concerns regarding the existing pipeline safety program, I want to share my concerns about the delays in issuing Congressional mandates. Some may find it hard to believe that the Office of Pipeline Safety, OPS, has failed to issue final rules on measures that required rulemakings under its 1992 and 1996 reauthorizations. Unquestionably, the rules on environmentally sensitive and high density areas should have been completed by now. I have been advised that a final rule is expected this year. But even if this is the case, the fact remains that the final promulgation is still significantly behind schedule. The rules on operator qualification and periodic inspections are not final either. One of the goals of this legislation is to stimulate the finalization of these rules. Over the past few years, we have experienced two major pipeline accidents, one in Bellingham, WA, and the other near Carlsbad, NM. While accidents happen, we need to take all necessary steps to ensure that accidents are not waiting to happen. I think that this legislation will increase the arsenal of tools available to OPS to ensure that our pipeline system is as safe as possible. I ask that OPS use the tools that we provide to ensure the aggressive oversight of pipeline safety practices. While there were many who worked arduously to ensure passage of legislation in this area, I would like to recognize, in particular, the efforts of Senators Murray and Bingaman. Senator Murray doggedly pursued changes to increase the level of safety and public participation in pipeline safety, and she worked closely with other Commerce Committee members to ensure a reasonable and fair compromise. Senator Bingaman was instrumental in helping bolster the bills provisions on research and development. We also were able to add provisions he authored to focus our research on progressive areas that will help us develop better systems of early detection, and to ensure that we can avoid accidents such as those that occurred in Bellingham, WA, and near Carlsbad, NM. This bill is good legislation. It will require our regulators to finalize a number of overdue regulations. The bill also allows for a greater degree of public participation in the process of pipeline safety, updates the penalties that would be levied for misconduct and provides whistle blower protection for employees who reveal misconduct. The bill also helps us focus on long-term needs so as to make our future pipeline system even safer. I urge my colleagues to support this measure. Amendment No. 4130 (Purpose: To incorporate additional provisions in, and make minor modifications to, the bill as reported by the committee)

Mr. HOLLINGS

Mr. HOLLINGS. Right.

Mr. HOLLINGS. Mr. President, I had the distinction of working with this tremendous public servant, a brilliant fellow with the best personality. We all loved him. I worked with him on the budget. We even got Sec. 13.301, regarding a lockbox. We already have written in law that you are not to include Social Security in your budget. It is supposed to be in a trust fund. It was signed into law on November 5, 1990, by George Herbert Walker Bush. But they all say: Now I have a lockbox bill. They voted--98 Senators, Senator Heinz, and myself included, back at that particular time. But they don't obey it. I think the most brilliant of Senators--I have been around 34 years-- is our distinguished colleague, the ranking member, Patrick Moynihan of New York. Sen. Moynihan wrote a very scholarly bill. I don't disparage at all. I lost a lot of valuables during a fire at my home. One was a collection of his books, which has now been replaced. He is a brilliant author, a most interesting writer, and a tremendous authority. But on this particular score, he is incorrect. The outcome of this vote won't threaten any world war, or anything else like that. It is very important to realize that the crash came in October 1929, and Smoot-Hawley did not occur until June of 1930--8 months after the crash. And furthermore, back in 1929 and 1930, international trade to the United States economy was only 1.5 percent of the GNP. So Smoot- Hawley could not have caused the crash, which has been contended on the floor of the Senate. And, No. 2, it had no far-reaching effects. In fact, it was hardly mentioned by either President Hoover, or then-candidate Franklin Delano Roosevelt, or President Roosevelt after he took office because there were other things to be disturbed about. The adverse effects of Smoot- Hawley paled in comparison to the problems facing the United States at that time. I quote: The conclusion appears inescapable on the basis of these numbers; a potential adverse impact of $231 million spread over the great array of imported products which were dutiable in 1929 could not realistically have any measurable impact on America's trading partners. $231 million--here we are talking about a $350 billion to a $400 billion deficit. This is the overall trade figure of $231 million. I read further: Meanwhile, the gross national product (GNP) in the United States had dropped an unprecedented 13.5 percent in 1930 alone, from $103.4 billion in 1929 to $89 billion by the end of 1930. It is unrealistic to expect that a shift in U.S. international imports of just 0.2 percent of U.S. GNP in 1930 for example ($231 million on $14.4 billion) could be viewed as establishing a ``precedent'' for America's trading partners to follow, or represented a ``model'' to follow. Even more to the point an impact of just 0.2 percent could not reasonably be expected to have any measurable effect on the economic health of America's trading partners. I read and skip over because it is too long under the limited time to read the report in its entirety. But I quote this part. 1. The international trading system of the twenties bears no relation to the interdependent world of the eighties commercially, industrially and financially in size or complexity. 2. No effective international organization existed, similar to the General Agreement for Tariffs and Trade (GATT) for example for resolution of disputes. There were no trade ``leaders'' among the world's nations in part because most mercantile nations felt more comfortable without dispute settlement bodies. 3. Except for a few critical products foreign trade was not generally viewed in the ``economy-critical'' context as currently in the U.S. as indicated earlier neither President Hoover nor President Roosevelt viewed foreign trade as crucial to the economy in general or recovery in particular. 4. U.S. foreign trade was relatively an amorphous phenomenon quite unlike the highly structured system of the eighties; characterized largely then by ``Caveat Emptor'' and a broadly laissez-faire philosophy generally unacceptable presently. That brings it into sharp focus, because you have heard again and again that Smoot-Hawley started a trade war, that collapsed economies brought on the Depression and started World War II. They say if we don't vote for PNTR, it will cause World War III. They are bringing out all of these bogeymen. There is no merit in this. Again, the Constitution, article I, section 8, says the Congress shall regulate and control foreign trade. We are listening to the White House and the fix that is on, and they said, permanently abandon, amend the Constitution if you please, disregard this fundamental, and let us handle it because the White House father knows best. They bring out that white tent, and they all run around. They are mostly your friends, Senator Roth. You know them well. And they are for profits. They don't have a country. Listen to what Boeing says: I am not an American corporation, I am an international company. Listen to the chairman of the board of Caterpillar: I am an international corporation. They are companies without any country. They could care less about you, and I have to give every care. You and I are responsible for the regulation of foreign trade, and we ought not vote against it this afternoon by voting down this amendment on the premise of no amendments, no amendments, no amendments. If we have amendments, the House would then have a chance to look at it and realize that permanent trade relations with China abrogates the responsibility of Congress under the Constitution. Reading on, there are a couple more quotes in the limited time. In the concluding comments by Senator Heinz at that time: The attempt to assign responsibility to the U.S. in the thirties for passing the Smoot/Hawley Tariff Act and thus set off a chain reaction of international depression and war is, on the basis of a preponderance of fact, a serious misreading of history, a repeal of the basic concept of cause and effect and a disregard for the principle of proportion of numbers. It may constitute a fascinating theory for political mischief-making but it is a cruel hoax on all of those responsible for developing new and imaginative measures designed to liberalize international trade. Such constructive development and growth is severely impeded by perpetuating what is no more than a symbolic economic myth. Nothing is less worthwhile than attempting to rewrite history, not learning from it. Nothing is more worthwhile than making careful and perceptive and objective analysis in the hope it may lead to an improved and liberalized international trading system. Senator John Heinz of Pennsylvania said that 15 years ago, almost to the day, September 1985. Those observations that our distinguished colleague made are just as true today. Under the Constitution there is a fundamental responsibility that Congress regulates foreign commerce, but the Finance Committee and the administration with its fixed votes says: No, give it up. When I say ``fixed votes,'' I wish I had the New York Times article. I wish I had the Washington Post article. There were followup articles to the vote on NAFTA, the North American Free Trade Agreement with Mexico, and in that, distinguished Chairman Roth, it was revealed that they gave our friend, Jake Pickle, a cultural center, they gave another Congressman two C-17s, and another a round of golf in California with the President--just to get their vote. They went around to fix, nothing to do with trade, and once the fix is on, you come out on the floor and say: Vote if you please to abandon your constitutional responsibility. My amendment says: No, let's have trade with China. That is obviously going to occur. We live in the real world. These embargoes don't work. Forget about the embargoes. You cannot stop trade and grind the economy to a halt, the world economy to a halt, as they alleged Smoot-Hawley did. It will never happen. It is not about starting a trade war and having an embargo. It is about enforcing our dumping laws--we could start by consolidating the enforcement efforts--and realizing that the industrial worker of the United States of America is the most competitive in the world. The thing that is not competing is the Congress of the United States. We are about to vote. They say this amendment, too, will be voted down. We are about to vote down our responsibility to one of the most important issues that possibly could confront us. Alan Greenspan says the only bad effect on the economy is the $350 billion trade deficit. I reserve the remainder of my time.

Mr. HOLLINGS. Mr. President, I am reading the words of art here. That is why I have drawn this particular amendment because I thought there might be a question of germaneness. You cannot tell from reading without reference what exactly this amendment does. But in a line, it does away with the ``P'' of PNTR, the ``permanent'' normal trade relations, so that we can annually, as we have in the past, fulfill the obligation referred to by the distinguished Senator from West Virginia, who knows better than any our Constitution, article I, section 8. I almost have to demonstrate, like my forbearer, L. Mendel Rivers, the distinguished Congressman from Charleston, SC, who used to head up Armed Services. He would bring up the Secretary of Defense. He would say, Robert Strange McNamara, not the President, not the Supreme Court, but the Congress shall raise and support armies. Similarly, not the President, not the Supreme Court, but the Congress, under article I, section 8, shall regulate foreign commerce. Now word has it the ``Philistines'' got the fix on; we can't regulate anything. As the distinguished Senator pointed out in the previous debate on the amendment, there is no debate. They fix the Finance Committee, and once they--the leadership on both sides--get that, then they see how many votes they need and they wait until now to give us a little time, when we are about to leave for the Presidential campaign in another 3 weeks. You would think we would have a chance to debate and exchange ideas about the significance of a $350 billion to $400 billion trade deficit. But not at all. Nobody to listen or to exchange vows and no debate whatsoever. It is very unfortunate. PNTR, to bring it right into focus--and the reason we submit this particular amendment has nothing to do with opening up China. They say with this agreement and with going into the World Trade Organization, we are going to open up China. Not at all. We have had an agreement with Japan, and Japan has been in the WTO for 5 years, and it has yet to open up the Japanese market. PNTR has not a thing to do with jobs in America, either. My friend, the director of the U.S. Chamber of Commerce, Mr. Tom Donahue, says PNTR will create 800,000 jobs. I can show you we will lose at least 800,000, according to the Economic Policy Institute. I will get that particular study later. When they had the House vote and a headline in the Wall Street Journal, there was a footrace for investment in China. But it's not that we are going to start hiring more in America because we are going to have increased production and increased exports and increased jobs, not at all. So it is not about exports whatsoever. We have a $70 billion deficit in our balance of trade with China, and I will bet you that it increases. Does anybody want to take on the bet? Name the amount, name the odds; the bet is on. This deficit is going to increase with or without this particular amendment. And it has nothing to do with technology. We already have a $3.2 billion deficit in the balance of trade in high-tech with the People's Republic of China that will approximate $5 billion alone just this year. It has really nothing to do with the environment and labor. I supported strongly the amendment of the Senator from West Virginia. But, mind you me, it took us 200 years and more to get around to the environment, to get around to a safe working place and everything else of that kind. It has nothing to do with human rights. The first human right is to feed 1.3 billion. The second human right is to house the 1.3 billion. The third human right is to educate. And the fourth human right, of course, is one man/one vote. Many here in the Congress have been touting one man/one vote. Without education, you have total chaos. As a result, you are not going to have a PNTR agreement that will improve human rights. They have used traumatic control. We oppose that; we don't like it. But run a country of 1.3 billion and let demonstrations get out of hand, and you have total chaos and no progress or improvement. So it is really not about undermining the Communist regime. I have heard that on the floor. On the contrary. The Communist regime is unanimously in favor of PNTR. They know what they are doing. We don't know what we are doing. It is not about China obeying its agreements, it is about the United States enforcing ours. I don't know where the fanciful thought has come from that somehow we have to continue like this, after 50 years of almost losing our entire manufacturing capacity, whereas Japan--a little country of 126 million--takes on 280 million Americans and almost outmanufactures and outproduces the United States of America. We are losing our economic strength. We are losing our middle class that is the backbone of that economic strength. ``The strength of a democracy is its middle class,'' said Aristotle. We put in yesterday a particular article from Fortune magazine about the disparity between the rich and the poor and how the middle class is disappearing. This has to do with the United States competing in international trade, the global economy. That is why I put up this amendment, so that we won't get it done in the year 2000. There is too great an interest in the Presidential campaign right now to really get anything accomplished on this important issue. Neither Presidential candidate has really addressed the subject of our trade deficit. They just say it in a Pavlovian fashion: ``I am for free trade.'' Well, free trade is an oxymoron. Trade is something for something. We know it is not free. Otherwise, of course, they hope to have trade without restrictions, without tariffs, without nontariff barriers, and those kinds of things. As the father of our country said, the way to maintain the peace is to prepare for war. And the way to maintain free trade, rather than preparing for war, is to prepare for the trade war. It means in a sense to begin to compete, raise a barrier, and remove a barrier in China. Jiang Zemin or Zhu Rongji should run for President. They know how to run the trade policy. They use that rich market of 1.3 billion and say: You can't come in here and sell that Boeing airplane, that 777, unless you make half of it in downtown Shanghai. You can't come in here with that automobile, that Buick, unless you put your research center here in Shanghai. They just told Qualcomm--although Trade Representative Barshefsky said we solved this problem--that there will be no more technology transfers. Hogwash. Tell them to call Qualcomm. They found out they couldn't sell there unless they shared the technology to the Chinese. So business is business; it is not the Boy Scouts and it doesn't adhere to the golden rule. Incidentally, it is not for profits in the international competition. The global competition is for market share and for jobs. We are losing out in every particular turn. So since I am a little bit limited in time here this afternoon, I want to correct the Record. I know the distinguished chairman of our Finance Committee will enjoy this, because I could quote myself. We did this research 15 years ago. We were tired of hearing about Smoot-Hawley, and that the hobgoblins were coming. They really went around yelling ``peril,'' and the Chinese, how we discriminated against them. Then the talk was that Smoot-Hawley would cause a world war; if you do not vote for this we are going to have World War III. I never heard of such nonsense. It is time we jailed that buzzard, Smoot- Hawley. Unfortunately, Ross Perot didn't understand Smoot-Hawley. Mr. President, I ask unanimous consent to have printed in the Record a part of the Congressional Record dated September 17, 1985, the text by the former distinguished Senator of Pennsylvania, John Heinz.

Mr. HOLLINGS. Mr. President, I yield back the 38 seconds.

Mr. HOLLINGS. Mr. President, I want to yield time to the distinguished Senator from Oklahoma or I will ask unanimous consent that he be permitted such time as is necessary. He wanted to speak on this. I did not realize that. I want to have a few minutes left. I want to comment on the remarks of the distinguished Senator from Montana. All these wonderful benefits--he has not read the GAO report. Everything is indeterminate. This is the most flexible agreement ever made. We made one with Japan and we have not penetrated that market. We made one with Korea and we have not penetrated that one, either. All these benefits--I do not know if a $68 billion deficit is a benefit. Heavens above, we have to stop this somehow. Paraphrasing Abraham Lincoln: We have to think anew, act anew, and work together, we might get a plus balance of trade. The distinguished Senator is saying if you vote for this amendment, you are violating article 1 of the WTO. I say if you vote against it, you are violating article I, section 8 of the U.S. Constitution, abdicating our responsibility to regulate foreign commerce. We cannot make an agreement with the WTO to disband and dispel that particular obligation and responsibility. I do not understand that at all. That is a narrow analysis if I ever saw one, that somehow the WTO is a wonderful thing. In fact, we are getting all kinds of requests to get out of it on account of the foreign credit sales given American corporations in their exports overseas. I will get into that later on, perhaps next week. We have received a number of those requests. We are losing, I say to the distinguished Senator. The only reason for this amendment is to say: Wait a minute, let's have trade with China; go ahead with the WTO. Let's just take the ``P'' out of PNTR. The Senator from Montana said on the floor and Senator Moynihan said on the floor, irrespective of this bill, China will become a member of the WTO--and we are a member of the WTO, so why are they so worried about this amendment? We are not violating anything by voting for this amendment, but my colleagues will violate article I, section 8 of the Constitution and our responsibilities under the Constitution if they vote against it. I have used the remaining time I had, I believe. I thank the distinguished Chair. I yield the floor.

Mr. HOLLINGS. Mr. President, I call up amendment No. 4122 and ask for its immediate consideration.

Mr. HOLLINGS. Mr. President, I ask unanimous consent that the reading of the amendment be dispensed with.

Mr. HOLLINGS

Mr. HOLLINGS. Mr. President, Ken Lipper, the CEO of Lipper & Company investment firm, is a man of many talents. Ken is a novelist, a film producer and one of the most profound thinkers with respect to the new economy. In a February speech at the University of California Technology Conference, he outlined the strategies we must employ to address today's economic problems. Although he delivered the speech seven months ago, it is still valid. I ask that the text of the speech be printed in the Record. The text of the speech follows. Remarks of Ken Lipper As of February 2000, the United States is in the 107th month of an economic boom, the longest in history. Even as this economic expansion continues, observers have been amazed that inflation remains a low 2.5 percent. Ordinarily, at the stage of ``full employment'' we are now enjoying-- unemployment is at 4 percent, and is projected at 3.8 percent for the year 2000, with nearly 90 percent capacity utilization--there would be serious labor shortages and rising prices. As a result, the Federal Reserve would intervene to raise interest rates and tighten the money supply, causing the expansion to fizzle. Why is this boom different? Currently there is an excess world capacity in basic manufacturing of goods and commodities, due in part to the Asian collapse combined with high unemployment and relatively slow growth in Europe. More important is the unprecedented and uninterrupted level of U.S. capital investment. Productivity has been increasing at historically high levels, an average of 2.5 percent each year, so that with a 3.2 percent annual wage increase, there is a real standard of living increase for workers without significantly increasing unit labor costs. In addition, the amount and efficiency of capital behind each worker has increased. For example, in 2000, manufacturers expect to increase revenues 7.7 percent with only a 0.5 percent increase in their labor force; non- manufacturing sectors will increase revenues 6.9 percent with only a 1.4 percent labor force increase. These gains are possible thanks to a high level of investment in plant and equipment, which was up 21 percent in 1999 and is expected to rise another 15 percent in 2000. In non-manufacturing sectors, investment was up 4.7 percent in 1999 and expected to rise 8.7 percent in 2000. And this increased investment continues because a high consumer confidence level--now at an index of 144, compared to an average of 115--encourages corporations to expect growth in consumption. Another factor keeping inflation low is heightened competition, both domestic and, thanks to free trade, foreign. The strong dollar magnifies the effect of this competition, translating into cheaper prices for imported goods. And buyers can also now compare prices by B-B commerce. As a result, 81 percent of manufacturers and 67 percent of non-manufacturers report that they cannot pass along price increases to consumers. At the same time, low interest rates worldwide and the buoyant U.S. stock market have made for cheap capital availability, enabling the investments in productivity. The strong dollar and stock market have made up for the low U.S. savings rate--among the lowest in the world--by encouraging record levels of foreign investment, year in, year out. Finally, the cost of investment capital has been held down because the U.S. government budget surplus takes the U.S. out of the bond market as an issuer competitive with businesses; indeed, the U.S. is now buying back old bonds and liquefying the market. U.S. and European municipalities are also borrowing much less worldwide. These trends force investment funds to be reallocated to the private sector, lowering the cost of capital. These are the reasons why some people feel that the old economic paradigm the boom-to-bust cycle, is outmoded. But we have not repealed the business cycle; we have only added significant time to the boom equation. Ultimately, the laws of supply and demand will still have their impact. The risks to our economy are apparent, and rising. The Asian economies are recovering. In Europe, unemployment is falling and the pace of economic growth is rising, while the Euro is beginning to take hold and compete for funds. This means that over time there could be no cheap imports to hold down inflation. These factors have expressed themselves already, in conjunction with rocketing U.S. consumption, huge oil price increases, an end to the decline in raw materials prices, and rising intermediate-product prices. And these pressures occur as a dwindling supply of new entrants to the U.S. labor force will begin to push up wages. Aggregate U.S. profit margins decreased in 1999, because companies lacked pricing power. But as Asian and European economic recoveries absorb excess worldwide capacity, corporations will regain their pricing power to restore profit margins and pass on increasing costs. The Federal Reserve is already intervening, and will continue to raise interest rates. Many have asked why these interventions are necessary when there is no current sign of rising inflation. One reason is that the Fed's actions generally take about 18 months to filter through the economy. But there are other justifications. The first is labor. We have seen how labor has been able to get real standard of living increases without large wage increases, due to low inflation. But if labor anticipates inflation from the causes discussed above, it will build protective wage increases into multi-year settlements, in order to hedge its potential loss of buying power. This would accelerate the wage-price spiral that itself fuels further inflation. Thus the Federal Reserve is signaling labor of its determination to fight inflation. Second, the Fed is also signaling Congress not to cut taxes or increase programs using the budget surplus, thus putting further pressure on available resources. The Fed's moves seem to indicate that it wants the national debt repaid and Social Security and Medicare funded. Third, the Fed wants to dampen consumption due to the ``wealth effect,'' the stock market gains which are responsible for about 25 percent of the growth in U.S. GDP. Currently, over 50 percent of American households own stocks, with increasing numbers borrowing to carry them. People are spending based on presumed wealth from the stock market, a major difference from the time when consumption was directly linked to more predictable earned income. Nobody knows how fast or how steep a fall in the stock market might be, given high debt levels, but consumption would certainly be affected. When the Japanese bubble burst, the stock market never recovered from its 50 percent loss, and no government program has succeeded in reviving the shocked Japanese consumer. Fourth is the housing market. I expect housing starts to decline by 6 to 8 percent in the second half of 2000 due to rising mortgage rates, which will also affect existing housing prices. At a time of historically minuscule savings rates, how will the stock market investor and consumer react when both his storehouses of wealth--stock and homes--start to fall? I expect that stock prices will recover during the first quarter and perhaps the first half of 2000, as profits reflect the high productivity investments already made and consumption continues unabated. But the risks touched on above will become increasingly evident, and the second half should begin to anticipate and express them in declining stock prices in the U.S. And the Federal Reserve will continue to increase interest rates. Nobody can reliably predict when a stock boom will end. But this one seems to operate in an atmosphere of growing threat, and from lofty heights. NASDAQ has an unprecedented 178X multiple, which might be justified for a few companies but cannot be sustained for an aggregate, 4,700 entities. So how will it end? Probably very suddenly, as other bubbles have burst; and they often take years to recover. On May 4, 1990, Christie's Evening Auction failed to attract bids; art prices tumbled 50 percent and the market evaporated. The price of gold reached a peak of 665 in September 1980; in January 1981 it was at 505; in March 1982 it had fallen to 320. The stock market plunged from a peak of 2650 in October 1987 to 1770 two months later. In Japan, the stockmarket collapsed from a peak of 39,000 in December 1989 to 21,000 in September 1990. And Russia defaulted on $2.5 billion of debt in August 1998, just two months after borrowing it. What does this mean as a practical matter? Anyone who anticipates needing refinancing should do it sooner rather than later. Those who wish to liquidate some of their concentrated stock holdings should act now, to protect their future lifestyles. Corporate strategies that are based on a fast burn rate of cash, and that plan to get new money to reliquefy, should modify these plans to slow the burn rate in case refinancing is not easily available. And those who need refinancing should cultivate venture capital sources in Europe, where economic growth and an appetite for U.S. venture opportunities should provide a fertile alternative to a more subdued U.S. market. Now I would like to turn from these dry ruminations on the economy to more value-oriented thoughts on building a business, based on my personal experiences as an entrepreneur. Creating an enterprise for nothing should be a reflection of your own values, fears, experiences, intellectual insights, and sense of what is important-- becasue you, as the entrepreneur, must feel comfortable with running it. There is no single formula, but certain observations might prove applicable to your own situation. Professor Bhide wrote in Harvard Business Review: ``Several principles are basic for successful start-ups: get operational fast * * * [and] don't try to hire the crack team. * * *'' These precepts are not supported by my own experience. The professor's recommendations place a huge premium on the exclusivity and value of an idea, and the notion that others could beat you out if you delay. These beliefs are responsible for a large number of helter-skelter business-launches-as-preemptive-strikes, premature introductions that fail due to poor product quality, weak delivery systems, inadequate customer support, or inadequate internal financial controls. Every shoe-shine man will freely share his ideas with you. However, what counts is the implementation of an idea by a quality team of people. My products were carefully crafted and tested over two years, altered and risk-adjusted through examining results. A crack team was put together, with the first hire being Salomon's top accountant--because I wanted to know the limits of my dream before I acted beyond my resources, capacity, or risk profile. Simply to the point: was it Prodigy's innovations, or Lotus's being first in the market, that won the software battle? Or was it Microsoft's better preparation for meeting and servicing customers' needs that won the day? You generally have one shot at the marketplace. And credibility depends on predictability. Make sure everything is carefully prepared in depth, no matter how long it takes, so that the product and its supports work as promised. Getting started is not the goal; permanency is! Building many products and applications can be exciting in concept, but it is difficult in terms of financial and physical resources. I build my products narrowly and very deeply, so that we could equal any competitor in a specialty area. Editing out the many other opportunities is vital for concentrating resources and talent on the very few things that you can do best. Choose your product, refine it, and continuously monitor it based on experience. I chose specialty products that did not require muscularity of distribution, capital, and related support inputs, all of which favor existing large corporations. By developing a few intellectually rich products at the beginning, we weren't forced to compete head-on with the big boys, and therefore we could get profit margins and cash flow that provided fuel for further expansion. I believe that many Internet retailers go into commodity- oriented businesses in which price is the key determinant, only to find that success means bigger losses and that old, dominant players can enter internet distribution at will and grab market share. Time is the most precious capital, so a business should only enter growing markets with a superior service or product, where decent profit margins are available over a long period of time. It was my experience that becoming a brand name quickly is extraordinarily difficult. It requires a long period of exposure and in-depth, sustained advertising. Few newcomers have the necessary financial staying-power, so avoid spending money on ineffectual ads. If your business strategy requires you to promote the product enormously, then maybe it is the wrong product choice. Remember that it is easier for GM or Toys R Us to learn how to use the Internet than for you to gain their brand images. And, conversely, once the speculative fever recedes, why would anyone pay 9 times earnings for Macy's and 1,000 times revenues for a wannabe whose aspiration is to maybe become the Macy's of the Web? It is also important not to gild the lily technologically. Think of the customer's technical competence and how he will actually use your product. My biggest recent error was listening to a tech analyst who told me not to buy AOL at $26 a pre-split share, because there were technically superior products. The mix between technology and user friendliness is vital. After all, do you use Betamax or VHS? In building a business, it is crucial to put emphasis on becoming an institution. I found that it takes two years for a person to feel comfortable in a corporate culture, so it is better to build a team in anticipation of growth than in response to it. Invest early and heavily in support systems, in the areas of client service, electronic information, and financial controls. Let everyone know what is expected of him or her through clear communication, so that employees are moving in the direction of corporate goals. My company has never been star-oriented, in a star-studded industry. Good organization creates a whole that is more than the sum of its parts. Relationships are key to success, and that means knowing the people in your arena. Biotech executives should know the important people in the FDA, the universities, and the pharmaceutical companies. And relationships should be maintained for the long term. Remember, credibility equals predictability; long relationships allow people to judge you based on past interactions. It's too late if you only meet people when you need them. Personnel turnover is a significant problem today. The mantra everywhere is stock options, the chance to get rich quick. This leads to high turnover if a company has actual or perceived problems, or, on the other hand, if it is too successful and young people get rich quick. In my company, which is family owned, we have low turnover. We build loyalty in three important ways. First, all employees share in profits; we have a flatter compensation scheme than many technology companies. Second, there is justice in allocating rewards over long periods of time. Our people know that we have permanency; we give them a long-term horizon, with expectation of growing rewards over time. Third, our people feel safe. There are no politics, few layoffs, and no acting out; people check their egos at the door. We breed loyalty through civility. People are trained and moved around the company to keep the interest level high, and promotions are made internally. The culture is kept strong by outsourcing and a small number of hires. And finally, there is a single decision-maker; everyone has input, but I make the final decision based on careful research and many individual inputs. There is no ranting or screaming by anyone; instead, there is a free flow of ideas, tentative acceptance, and thorough investigations, so that all communication moves back and forth. A great business idea, or a great scientific idea, does not just come about through hard work and incremental advances. It is more like poetry. It is about having the imagination and heart to strike out on a path that others didn't dare to follow, or didn't see in its entirety. Implementation, management skills, and the ability to anticipate customer needs are built on a knowledge of how human beings react. These types of imagination and understanding are more likely to come from wellness than from frenzy. I don't subscribe to the continuous-all-nighters, no-personal-life recipe for success. For a super-successful entrepreneur, having broad horizon--through reading fiction and biography, appreciating art, and interacting socially with a variety of people--is more important than working yet another Sunday. But there is more at stake than business success. You want to be a happy person, a good father, a community builder. I find that I can only eat one tuna-fish sandwich at lunch, no matter how many millions I have earned. Money can give you time, and how you spend that time is key. And wise expenditure of personal time on human development can also help you make money, because knowledge, experience, and wisdom are usually the key to the ``poetic'' business idea. Young people are leaving college to make quick money, like a gold rush. But life is about more than money or success or technical achievement. It is critical that people see the world in vibrant colors and in multiple shades. To raise children, face the death of parents, appreciate beauty, even make love well, people need emotional and intellectual depth. These come from being exposed to the collective experience of civilization, which is transmitted through books and a liberal education. In the scheme of your success, it will not make a difference if you leave school two years early; but it could alter your life greatly. Absorb the intangibles, not just because they will give you the imagination to come up with ``poetic'' business ideas to help you deal with customers, but also because they will give meaning to the life you lead, whether you succeed materially or not. After all, living life well, in all its dimensions, is what it's all about.

Mr. HOLLINGS

Mr. HOLLINGS. Mr. President, in making opening comments relative to permanent normal trade relations with China, I feel compelled to sort of qualify as a witness in that we have over the years in these particular debates about international trade made very little progress, whether with Democratic administrations or Republican administrations. My rising in opposition and my amendments will be to the thrust of not having permanent and not having normal trade relations with anybody because our normal trade relations are a $350 billion to $400 billion trade deficit which is destroying the middle class in our society, weakening our democracy, and diminishing our influence in world affairs. With all of the pep talk about the wonderful economy, we are actually, on this particular score, in tremendous decline. I say ``as a witness'' in a sense because I can remember when southern Governors started computing. People up in New Hampshire and other places say that they are from down south and that they are blind protectionists; they do not understand the importance of manufacturing and international trade and exports. So I hearken back to the day when I represented the northern textile industry from New Hampshire as well as the southern textile industry. I appeared before the old International Tariff Commission. Who ran me around the room? None other than Tom Dewey. This was back in 1960. The subject was textiles--that 10 percent of the American consumption of textiles in clothing was represented in imports, and if this continued at the pace that it was going, before long we would be out of business. By the way, they told me at that particular hearing: Governor, what do you expect? For those emerging Third World countries in the Pacific rim and everywhere else, what do you expect them to make? Let them make the shoes and the clothing, and we will make the computers and the airplanes. Fast forward 40 years: They are making the shoes. They are making the clothing. They are making the airplanes and they are making the computers. They are making all of it. Actually, we have high tech. I want to get into that in a minute. High tech--they think that is saving us. We have a deficit in the balance of trade with the People's Republic of China in high technology. This Congress doesn't have any idea where we are on this particular score. Everybody is outside talking about the new economy. True it is, we are all proud of that new economy, particularly on this side of the aisle. They were afraid to say they raised the Social Security tax in 1993 when Clinton came into office. But I wasn't afraid. I brought it in line with all other pension plans. We are afraid to say we raised gasoline taxes. But we did. We cut spending $250 billion. The taxes that were supposed to be $250 billion are now up to $370 billion. Then we cut some taxes very minimally. We reduced the size of government by some 377,000 Federal employees. They have the new economy. But the new economy has a private side and a public side. The private side is doing extremely well. High employment, low unemployment, low interest rates, booming economy, booming stock market, strong bank system--but the public side is almost a disaster. I say that advisedly. The reason I say it is so that, for one thing, they are talking surplus, surplus. Everywhere, someone cries ``surplus.'' The public debt to the penny according to the U.S. Treasury Department shows that, as of September 1, the debt is $5.676 trillion. At the beginning of the fiscal year of September 30, 1999, it was $5.656 trillion. I ask unanimous consent to have this printed in the Record.

Mr. HOLLINGS. I thank the Chair and yield the floor. Mr. President, I suggest the absence of a quorum.

Mr. HOLLINGS. It is $321 billion without the August and September payments. When we get those particular payments, it will go up, up, and away. And that is under low interest rate circumstances. We have the worst waste of all. I served on the Grace Commission under President Reagan. We were going to cut out waste, fraud, and abuse. Now we have caused the greatest waste of all. After President Clinton early this year made the State of the Union Address, the comment was made by the distinguished majority leader that it was costing $1 billion a minute. The President talked for 90 minutes; that is $90 billion. Governor Bush wants to give a $90 billion tax cut. We could give President Clinton $90 billion in spending. We could give Governor Bush $90 billion in tax cuts and still have $170 billion left for all the increases to the Department of Health, for class size reduction and school construction and any and every kind of research at NIH that we wanted. The point is, we are spending the money and we are not getting anything for it and we don't talk about it on the campaign trail. What do they avoid talking about? The $350 to $400 billion--and it will probably be nearly $400 billion--deficit in the balance of trade. The economists say that costs us at least 1 percent on our GNP. Instead of 4.1, we would have 5.1, and more jobs. This is ignoring the failure of the United States to compete in international trade. I emphasize that for a reason, for those who say we are blind protectionists, that we don't understand the global economy, the global competition and do not want to compete and want to start a trade war. No. 1, we have been in a trade war and we have been losing. They don't understand that. No. 2, on globalization, I don't want to sound like the Vice President, but I helped invent it 40 years ago. I went as a young Governor to Europe. I have that Deutsche Telekom bill that they talked about in the paper the other day. The truth is, I called on the Germans in Frankfurt. Today we have 116 German industries in the little State of South Carolina. I will never forget calling on Michelin in downtown Paris in June of 1960 with 11,600 Michelin employees. We have Hoffman-LaRoche from Switzerland. And Honda broke ground a few years ago. I was amazed to hear that Honda produced and exported more vehicles than General Motors. I have been in public service 50 years. I have been debating this issue in all five textile bills that passed here. Four of them passed the House also and were vetoed by Presidents over the years. When we come to trade and globalization, I think it behooves me not to talk about permanent, not to talk about normal, but use this opportunity to sober up the Congress and the leadership of the United States, making them realize that we are in a real competition, but not for profit. That is, the American multinational. They could care less. They don't have a country. Boeing came out the other day and said in the United States, we are not a U.S. company but an international company. Caterpillar has been holding in Illinois. But they were international. They think it is fine. The Chamber of Commerce has forgotten about Main Street America and gone with the multinationals. NAM and the Business Roundtable--we are in the hands of the Philistines. We are losing our manufacturing base because we don't understand that the global competition is not for profit but for jobs and market share. Let me talk a minute about jobs. At the fall of the wall, 4 billion workers came from behind the Iron Curtain, ready to work for anything, anywhere, at any time. In the last 10 years, with computerization and satellites, you can transfer your technology on a computer chip, you can transfer your financing by satellite. You can produce anything anywhere that you please. That is the global competition and international trade. While our American producers for the so-called profit want to manufacture, say, in the People's Republic of China, for 10 percent of the labor costs than it is paying in the United States, we have been losing, losing, losing. In manufacturing, they say 30 percent of volume is in the cost of labor. Or you can save 20 percent of your volume by moving the manufacturer of your product offshore or down to Mexico. Simply put, you can maintain your executive and your sales force here but put your manufacturing elsewhere. If you have $500 million in sales, at 20 percent, before taxes, you can save $100 million. Or you can continue to work your own people and go broke because your competition is headed that way. That is the job policy of the U.S. Congress today. It is to accelerate the exodus and the export of jobs. I will never forget when they told us that NAFTA was going to create 200,000 jobs. I just looked at the figure from the Bureau of Labor Statistics. It is more than just that 38,700 figure, but in textiles alone we have lost 38,700 jobs since NAFTA; in North Carolina, 90,000. I will never forget when they came down to Charlotte and said they wanted to talk about the digital divide. They are the ones dividing it. You think if you lost a job you are going out and buying a $2,000 or $3,000 computer? ``It's the economy, stupid.'' That is where we are. You just can't understand we are here, when they think it is a productivity thing on jobs: Productivity, productivity, productivity-- We have global competition. The U.S. industrial worker was the most productive industrial worker in the world, all during the 60s, all during the 1970s, all during the 1980s, all during the 1990s, and is today still the most productive industrial worker. They are not the highest paid. They pay much more in Germany and a bunch of other countries--and I will have a word to say about that, where the rich are getting richer and the poor are getting poorer and the middle class is disappearing. But the point is, we are losing our manufacturing strength and capability. We are losing our economy. America's security and strength is like a three-legged stool. You have the one leg which is the values of a nation, and that is unquestioned. We commit for freedom in Somalia and down in Haiti, Bosnia, Kosovo. There are nine peacekeeping missions currently and we are adding four more around the world. People admire the United States of America and its high principles and values. The second leg is one of the military, and that is unquestioned. But the third leg is a fraud--intentionally so. You see, after World War II we had the only industry, so with the Marshall Plan, that really started globalization. We not only sent the money, we sent the technology and the expertise--and capitalism has defeated communism. In the People's Republic of China, which is the present subject, they are tending more every day towards capitalism. That is a wonderful thing. The question is, Can we afford to give away the store? We have sacrificed and sacrificed so that now Boeing of Seattle, WA is moving production of airplanes--the most prominent of export industries--out of the country. Why do you think the machinists at Boeing led the strike not to break up in Seattle last December? That was a crowd that came out of Oregon, if I remember correctly, the Ruckus Society, or something like that. But the AFL-CIO march, at that WTO meeting in Seattle in December was led by the Boeing machinists. Why? Because 70 percent of the Boeing 777--McDonnell 90-10 is made overseas. In order to sell the Boeing plane in the People's Republic of China, according to Bill Greider, 50 percent of the Boeing 777 is made in downtown Shanghai. So we are losing the best, the best of the jobs. We know about jobs. We know about globalization. We are looking at this constant drain, so to speak, over the 50-year period. At the end of World War II we had 41 percent of our workforce in manufacturing. Last month, we lost another 69,000 manufacturing jobs. Go to the Department of Commerce--ask them. So we have gone from 41 percent down to 12 percent. Akio Morita, the former head of Sony said: Wait a minute, that world power that loses its manufacturing capacity ceases to be a world power. That is why we stand opposed to permanent normal trade relations with China. I know full well--I live in the real world--we are going to have trade with China. I am not opposed to trade with China. I am opposed to permanent, normal. When I say ``permanent,'' that is exactly what these CEOs of the Fortune 500 companies want. Because they know if they go over and invest in China and it has been permanent, they can come back appealing, ``Don't change anything,'' and they can get a foothold there and they can really make a wonderful profit. But, of course, that puts us more and more in jeopardy because we cannot shout ``productivity'' to the most productive industrial worker while at the same time saddling him with all the penalties. What are the penalties? What are the costs of productivity? We, the Congress of the United States, say: Before you open up the XYZ manufacturing company you have to have a minimum wage, Social Security, Medicare, Medicaid, clean air, clean water, safe working place, safe machinery, plant closing notice, parental leave. We might add on prescription drugs. Everybody is for prescription drugs. That is the cost of doing business. You can go down to Mexico for none of that, 58 cents, $1 an hour. You can go, for 10 percent of the cost, to China. We run around here like we understand something when we are totally off base, operating in the dark, on one of the most important issues confronting the United States. They think: Technology, high tech, high tech. Let's talk about jobs. High tech jobs? Do you know that a third of Microsoft's workers are part time? At one time they were all full time and lower-level workers sued and said: We are going to get some of these stock options and other benefits. And they won the case in court. So Gates and Microsoft turned around and gave them a 364-day contract. They are part time; 40 percent of the employees in Silicon Valley are part time. They don't give them any jobs. Gates has 22,000 up there in Redmond, WA and Boeing has 100,000. But what jobs they do have don't produce anything to export. We had a deficit balance of trade in advanced technology products with the People's Republic of China of $3.5 billion in 1999. This year it will be almost $5 billion. So don't give me anything about high tech--the high tech is going to save us. That is not going to save us at all. Advances in technology has spurred productivity. We all acknowledge that. The Japanese, after all, are the ones that taught us that with their advances in robotics in the early 80's. The BMW plant in Spartanburg, SC has been able to incorporate cutting edge technology and machinery. That is why over half the employees came off the farms within 50 miles and the other little textile industries and have been able to produce very efficiently. The quality of the Spartanburg plant exceeds the quality of Munich BMW. As a result, BMW is doubling the size of its operations at the Spartanburg plant. Open your eyes. The most productive automobile plant in the world, according to J.D. Power, is not in Detroit, it is down in Mexico--the Ford plant. We know about productivity and we know about jobs. While we lost 69,000 manufacturing jobs this August, we took on some 127,000 service jobs. We are going just the way of England. At the end of the war, they told the Brits: Don't worry; instead of a nation of brawn, this will be a nation of brains; and instead of producing products, we will provide services. Instead of creating wealth, we will handle it and be a financial seller. And England has gone to hell in an economic hand basket. Even Land Rover is leaving there now, and there is some question with the BMW plant there. I am not anti-British. I love the Brits. But London has become a downtown amusement park. I like to go there like everybody else. What I am talking about here is economic strength. The British Army is not as big as our Marine Corps. We are running around here puffing and blowing about the world's superpower. You cannot use and you would not use the hydrogen bomb. They couldn't care less now about the 6th Fleet or our military superiority. So what counts? Money. Money talks in international affairs. I will never forget when in the U.N. there was a resolution to examine China with respect to human rights and they were preparing to set up the hearings. This was 1993. The last time I checked 5 years later, 1998, they did not have the hearings. Why? Because the Chinese are the best diplomats. The Chinese are the best negotiators. They are the best business people. They have the best commercial minds. They went all around Africa, down into Australia and everywhere else. They never called for the hearings. Why? Because everybody wants to get into that rich market of $1.3 trillion. At the moment, we have the richest market in the world, and we refuse to use it and whine: Be fair, fair trade, level the playing field. Come on. Trade is not Boy Scouts. There is no morality to trade--be fair. I know what they are talking about. I know the word ``trade'' itself. ``Free trade'' is an oxymoron, but they hope there will be no barriers, no tariffs, no limitations. As we shout for free trade, the same thing we shout for is world peace. I do not believe we are going to get either one in my lifetime. Maybe in Strom's. The fact of the matter is, the father of this country said the best way to preserve the peace is to prepare for war. The best way to get free trade is to compete, raise the barriers and then remove them. The Chinese do that. They use their market. Some come to the floor and talk at length with respect to how the agreement is so good and it will not do this and it will not do that. I will touch on one thing this afternoon because I am limited in my time. My colleagues will remember, they said there would not be any more forced technology transfers. That is what Qualcomm thought when it invested in China. Ambassador Barshefsky, the Special Trade Representative, said: The rules put an absolute end to forced technology transfers. This was November of last year after they had the agreement. I have an article from the Wall Street Journal with regard to ``Qualcomm learns from its mistake in China'': U.S. mobile phone maker listens to Beijing's call for local production. This is dated June 7 of this year. The Ambassador is telling us the agreement does one thing, but the reality is quite another. Qualcomm, trusting it would not have to transfer, has to have local production before it can sell. So it is with all of these other industries. I am not anti-Chinese. I am anti this policy. I have been against this particular policy for years on end. We had a GAO report--about which I could go on at length--that the agreement is indecisive and complex. When we negotiate, we find out again and again it is normal trade relations; namely, you have to give before you can take. You have to give the Chinese the technology, and move production to China. I do not fault China. The Chinese are doing only what we did to build this great United States of America. In the earliest days, we had just won our freedom, and the Brits corresponded with the fledgling Colonies and said: Now that you have won your freedom, why don't you trade with us what you produce best, and we will trade back with you what we produce best--the doctrine of comparative advantage these economists will tell you about. Alexander Hamilton had the wisdom, outlined in the Report on Manufactures. There is one copy left at the Library of Congress. That little booklet in a line told the Brits to bug off: We are not going to remain your colony. As a result, the second bill that ever passed Congress--the first being the Seal of the United States--was a protectionist measure passed on July 4, 1789, a tariff bill of 50 percent on 60 different articles. From there we began to build our own economic strength, our own industrial capacity, carried on by President Lincoln. When plans were being made to build the transcontinental railroad, some said buy the steel from London. Lincoln said: Oh, no, we are going to build our own steel plants, and then when we get through, we will not only have the railroad, we will have a steel capacity. Again, that crowd that comes around here whining about free trade, getting all the protection you can possibly imagine--the farmers--are solid for this. They are going to learn a lesson--be careful what you wish for. Maybe I will get on to that in a minute. It was Franklin Delano Roosevelt who instituted marketing quotas, protective import quotas, price supports--protectionism that built up. Yes, I am for the farmer and we are the greatest agriculture producer in the world. But do not tell me about free trade. There have not been any price supports for my textiles and my 38,700 textile workers who have lost their jobs since NAFTA. Incidentally, I remind people just exactly what happened. Yes, they are having to turn to service jobs if they can. I remember Onieta Industries in Andrews, SC. They made T-shirts. Everybody can understand it. They closed the plant in the early part of last year. There were approximately 480 employees with an average age of 47. Do it Washington's way; do it the way Congress lectures: Education, education--we have to reeducate. They sound like a bunch of Mao Tse-tungs. So we reeducate, and tomorrow we have 487 expert computer operators. Are you going to hire the 47-year-old or the 21- year-old? Those 47-year-olds are out of a job. The average employer is not going to take on the pension costs and health costs for the 47-year-old when they have relatively none to consider for the 20-year-old. So they are sidelined. And that is the anxiety explored recently in Business Week: ``The Backlash Behind the Anxiety of Globalization.'' President Clinton, himself--this is from the Los Angeles Times in May of this year. I quote: So Clinton asked rhetorically, why are we having this debate on PNTR? Because people are anxiety ridden about the forces of globalization. I just finished reading David Kennedy's ``Freedom from Fear,'' the legacy of Franklin Delano Roosevelt. The legacy of William Jefferson Clinton is fear and fear itself. Global anxiety. Why? Because that 47- year-old who worked at a plant for 25 years was saving his money, making his home payments, his car payments and had a little boat down on the Black River--now he is high and dry. At best, he is trying to get a job at McDonald's or at the laundry or somewhere else in the service economy that doesn't pay. Talking about those jobs, I think we ought to really emphasize the fact that we are separating, if you please, the society. In Fortune magazine, dated September 4 there is the article entitled, ``Are the Rich Cleaning Up?'' It is by Cait Murphy: Blue-collar workers make less than they did a generation ago while the earnings of professionals have soared. Mr. President, I ask unanimous consent to have this article printed in the Record.

Mr. HOLLINGS. You begin to understand--when we talk about jobs, when we talk about pay, when we talk about our society, when we talk about our economic strength, when we talk about the middle class--that the strength of our democracy is disappearing. So, yes, we are going to trade with China. But if you make it permanent and you make it normal and you want to compete with China, you are going to be in one heck of a fix, is all I have to say. Let me say a word about market share. Japan has been practicing this for a long time. They have a society that sacrifices at the home market in order to take on the international market, the market of the United States. There is no question about it. That Lexus that costs $34,000 in the United States costs $40,000 to $44,000 in downtown Tokyo. That camera that sells for $300 here--a Japanese camera--sells for $600 to $1,000 in downtown Tokyo. That Handycam that sells for $640 in the United States--made in Japan--sells for almost $2,000 in downtown Tokyo. We do not have that kind of society. This is a spoiled society. We are supposed to give you tax cuts even though we have hardly any taxes to cut. And they can't be punitive, because look at the economy. By the way, we are paying down the debt, but we do not tell them we are increasing the debt at the same time. I really have not had but one person ask me about the estate tax. Nobody has asked me about the Social Security tax because we put it in line with all other pension plans. Nobody has bothered about gasoline. Overseas, they regularly sacrifice $4.20 for a gallon of gas. When we get to $2 a gallon, we go ape and hold Federal investigations, TV shows, and everything else. So the competition in globalization is one of sacrifice. In China, they call it communism; sacrifice, in Japan, in Korea, and even in France and Germany. They have all kinds of rules and regulations. Try to buy a year 2000 Toyota in France. They keep it at the Port of Le Havre and inspect it a year or so, and you can buy the year 2000 model on January 1, 2001. They have all kinds of barriers and different tricks. We talk about globalization and productivity as if we know something about it and that all we have to do is reeducate and get more engineering graduates. Come on. I am talking about middle America, the blood and guts of this society, the blood and guts of this democracy. That is what keeps us a strong country. That Fortune magazine article that came out the day before yesterday will tell you about that divide, will tell you that the take-home pay of that industrial worker is less than what it was 20 years ago, adjusted for inflation. It is a devil of a trend, but they are not talking about that or even mentioning trade. But when it comes to market share, the Japanese set the pace. What is going on in telecommunications? I have a bill which is a reminder because the law is there. I am going to testify tomorrow that it is nothing more than a reminder. No communications bill is going to pass unless they put it as a rider on one of these appropriations bills. Because they do not want to debate these things. All you have to do is look at Deutsche Telekom's SEC reports and know they call themselves a monopoly and that the German government is in control. When you are a country in control, you can print money. We know that better than anybody. We have been running deficits since 1968, 1969 under Lyndon Johnson; now the debt is $5.7 trillion. So we know about governments printing money. Deutsche Telekom had its stock at $100 earlier this year, in March. Now it is down to $40. Do you think Ron Sommer, the CEO of Deutsche Telekom, is worried? He could care less. He says: I have $100 billion. He just had a bond issue of $14 billion. Everybody got into it. We could not get a $14 billion bond issue going in this country. But a government-controlled company can easily get it because that company can't go broke. It is bound to win. Sommer says: I have $100 billion. And I am ready to buy AT&T or MCI or Sprint or VoiceStream or any telecom company I please. If his stock was down in the regular market to $40, and he had $100 billion, there would be a footrace between Boone Pickens and Carl Icahn. They would be in there in a flash. There would have been a takeover long ago. You see, they can come in with all kinds of capital and distort the competitive market. That is why we deregulated telecommunications from U.S. Government control in 1996. We certainly did not do it to put it under German Government control. That is why we have the World Trade Organization, in order to get competition, not to set up government-controlled companies to take over in the private market. But why do they do that? Who does offer the highest price, they tell me, per subscriber in one of these communications entities. Previously the highest bid was $12,000 per subscriber. Deutsche Telekom comes in with $21,000 to $22,000. Money is nothing to them. Why? Because they want market share. They battle. And the whole fight in globalization is for either jobs on the one hand, market share on the other hand, or both. That is the globalization. That is the trade. And we do not have a trade policy. They talk about free trade, and they get together. Unfortunately, our Democratic leadership gets together with the Republican leadership on this score. They put out the white tent and they fixed the vote. The New York Times wrote the article about it. The New York Times put in there that they got the NAFTA vote by giving our friend, Jake Pickle, a culture center; another Congressman two C-17s; another one a golf match. They had 26 gimmies to fix the vote. So they fixed the vote here in the Finance Committee and fixed the vote with the leadership, and they have the unmitigated gall to come and say: No amendments, don't discuss it, when can we vote, let's get this thing over with, free trade, free trade, free trade. I am going to join my friend, our leader from West Virginia, Senator Byrd, and others, and hope we bring some sobriety to this crowd up here in Washington. Let's start competing and let's start being productive. Congress berates the U.S. industrial worker. You must become productive. But we can't pass an increase in the minimum wage. We can't pass a patients' bill of rights. We can't pass gun control. We can't pass campaign finance. We can't do anything. Remember, we are competing with ourselves. I think that is one of the main points to be understood. I will never forget those industrialists who traveled all the way to Europe and back with jet lag to implement the Marshall Plan. Now with the profit the corporations make, they don't mind the jet lag. They don't mind moving for a while to Japan and Korea and other places. And as of 1973, the banks--Citicorp and Chase Manhattan--made a majority of their revenues and profits outside of the United States. They became more or less multinational. Then, of course, the corporations themselves started traveling over there and they organized in order to support this so-called free trade, which they knew historically was a bummer. They organized the Trilateral Commission and the Foreign Policy Association. If you run for President, the first thing you do is get a gilded invitation to go up and pledge on the altar of almighty free trade your loyalty and your fealty to free trade. So you become sophisticated. You become knowledgeable. Yet you don't know what you are talking about. Then they give the contributions to the college campuses so that you not only have the companies and the banks, but you have the campuses. There was a Ms. Jacobson who put out a study back in the 1980s where the majority of the contributions, I think, on the Harvard campus were Japanese. So you get all the campuses. You get the consultants. You get the Washington lawyers. We don't hear too much from our friend Pat Choate. I wish he would run again. Pat Choate wrote ``The Agents of Influence.'' The agents of affluence were our special Trade Representatives, whether it was Eberly or Brock or Strauss, those representing us immediately went to represent the other side. It would be like General Powell going to represent Saddam Hussein and Iraq. But that is what has been going on. To Mickey Kantor's credit, he has not done that. But I have been here long enough to watch all of them. Carla Hills, who gets all of these awards and everything else, represented the other side, the competition. Then you have the retailers. We used to debate a bill, Mr. President. I would go down to Bloomingdale's, and I would get a lady's blouse made in Taiwan and one made in New Jersey because they are trying to fill up the order. They were never the same price, and the American manufacturer wasn't the lower price. I went to Herman's and got a catcher's mitt, one made in Michigan, one made in Korea--the same thing, the one from Korea was cheaper. So they make a bigger profit, the retailers. And the retailers pay the newspapers through advertisements. That is the source of the majority of newspapers' profits. The business manager of that newspaper says you have to be for free trade because the retailers are their clientele. I just heard the distinguished Senator from Arkansas talk about free trade. She was very much for this particular bill. Their biggest industry? Wal-Mart, import industry. They are going to sell a few chickens in Arkansas. Tyson hopes he can sell a few chickens. But they are not producing anything else there. So we have to go over to the retailers. We have the banks, the corporations, the consultants, the societies, the campuses, the lawyers, special trade representatives and, yes, the lawyers. The Commerce Committee does not consider a bill that your office does not fill up with this crowd. In fact, these folks are confusing the Deutsche Telekom bill that my distinguished colleague cosponsored with me, running around the whole month of August trying to figure out how to get this vote and how to get that vote. Section 310(a) says you cannot license a foreign government in telecommunications. It has been that way since 1934. We argued and debated it in the 1996 bill. We ultimately left it alone. In spite of the White House and the FCC and all the other legal shenanigans they have ongoing, the law is still there, but they are trying to confuse that. It is like Spain with the fifth column. We have the enemy within, like Bobby Kennedy wrote about. I mean, I am not worried about China. I would run it the same way they are running it. They have a $68 to $70 billion plus balance of trade. We have got $70 billion minus balance of trade and it has been growing each year. It is going to continue to grow. This is not about jobs in the United States. It is about jobs in China. The Wall Street Journal had a big headline that said investors are racing now to invest in downtown Beijing, get a foothold there and then get the protection of the WTO--because you know who the WTO is going to rule in favor of. Fidel Castro can cancel your vote, Senator, my vote, the U.S. vote. I mean, come on, the WTO setting our trade policy? I have introduced a bill in each of the last sessions of Congress and I will introduce it again next year. I am trying to get the 28 Departments and the Agencies coordinated in a department of trade and commerce so that we can have a coordinated assault on the needs of this Nation. At the present time, it is all spread around, disparate. You have the policy from the Trade Representative. No, it is the Commerce Secretary. No, it is the Secretary of Defense. No, it is the White House. No, it is some other ruling that the administrative body, the FCC, has made. That is why we have these booming 60,000 lawyers at the bar in the District of Columbia--not 6, 60,000. I believe 59,000 of them are communications lawyers. If we could just coordinate and get one trade policy for this country and get competitive like the old Yankee trader; otherwise, we are losing our jobs, our manufacturing. We are in economic decline. We are losing our middle class. Unfortunately, we are losing the strength of our democracy. I really believe that. My friend, the Senator from New York, says this is a most important vote. Well, I think it is just as important for the exact opposite reason, that we kill it, not pass it, kill this thing, have regular trade, not normal, because we have been losing. I want to start competing. I certainly don't want a permanent trade agreement. Don't have one Congress try to bind the other Congresses. ``Permanent'' was put in there by the NAM Business Roundtable and the downtown lawyers. They are trying to get predictability to that investment over there, and they want to come back and tell ensuing Congresses: Look, you told us it was permanent and so we have our money over there. And so just like the Senator from Arkansas protects Wal-Mart, which he should, maybe I would be here trying to protect a textile company that wants to produce in downtown Beijing.

Mr. HOLLINGS. Mr. President, that shows that the debt has increased $20 billion--no surplus. They don't want to say where they get the surplus from. I can tell you where they get the surplus from. We had an increased measure of taxation over the years. When we had the 1983 Social Security settlement, we wanted it to increase to build up a trust fund to take care of the baby boomers in the next generation-- which is now. In 1992, the Social Security surplus was $50 billion; now the Social Security surplus is $150 billion. Over the last 8 years--because of what we did back in 1983--we have an additional $100 billion surplus, if you please, for the Social Security trust fund. We voted it here--section 13-301 of the Budget Act--that you shall not use Social Security surpluses in your budgets. Section 12 of the Greenspan commission said it should be set aside. It took us from 1983 until 1990 in order to get that done, but we finally got it done. Ninety-eight Senators voted for it. Almost all the Members of the House voted for it. It was signed into law on November 5, 1990, by President George Bush. But all of them are running around saying we are going to save Social Security while they are spending it with all kinds of monkeyshine plans--invest a little, invest a lot, do this, or do that to save Social Security. They set up the straw man in violation of the law--the policy of the Greenspan commission and talking about surpluses when there is not any surplus. The debt is increasing. If there is a surplus, why has the debt increased $20 billion? With all the wonderful income tax from which we had revenues on April 15, with all the good corporate tax revenues in June, we are still increasing the debt some $20 billion. All of them say tax cut, tax cut, but if you cut the estate taxes, you have increased the debt. All tax cuts are increasing the debt. They are all saying pay down the debt, pay down the debt. It is Alice in Wonderland. It is double talk. They are not talking sense with relation to what is actually going on. Everybody says we are paying down the debt. But they are for all of these taxes. Whether it is middle class, or targeted, or estate, or gasoline, or capital gains, or marriage penalty, any of those tax cuts under present circumstances obviously amount to an increase in debt. They talk about surplus that doesn't exist, and they talk about paying down the debt as they regularly increase it. They don't mention waste. As a result of this charade, interest costs have gone up to $366 billion for this fiscal year. I remember when we balanced the budget in 1968 and 1969 under President Lyndon Johnson. The interest cost on the national debt was less than $1 trillion; the interest cost was only $16 billion. That was the cost of all the wars from the Revolution, to the Civil War, the Spanish-American War, World War I, World War II, Korea, Vietnam. We had a debt of less than $1 trillion and they had interest costs of only $16 billion. Now we are up to $5.7 trillion, with $1 billion a day being spent. Wait until the whopping payment is made in September. I ask unanimous consent to have printed in the Record the interest expense as of this minute.

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