Marcy Kaptur

Ms. KAPTUR

Ms. KAPTUR. Mr. Chairman, I would simply state to the gentleman that that is correct. The amount that was included in our bill was passed unanimously by our subcommittee. It was also passed in full committee and its intention is that the transition subsidy payments would require that farmers be engaged in the production of commodities or conserving purposes in order to receive assistance. So the answer to the gentleman's question is yes.

Ms. KAPTUR. Mr. Chairman, will the gentleman yield?

Ms. KAPTUR. No. The farmers have to go into the local farm service agencies anyway to sign these contracts, and that is the procedure that will be used in this. I think maybe it is important also just to place on the record, so Members understand what is going on here, there was somewhat of an omission in the original bill when it passed the House originally in that the conference report stated that farmers were really not required to plant a crop to qualify for a farm payment. The intention of this is not to reward investors but to reward farmers and ranchers who are actually doing the work of agriculture in this country. We also recognized the need for conservation and conserving uses, and we do make exceptions in the bill for weather. We cannot control drought or flooding or serious weather situations. So we are not after changing the requirements when they go into the farm service agency. We are just wanting to make sure these transition payments are going to farmers who are actually doing the work.

Ms. KAPTUR. Mr. Chairman, I thank the gentleman.

Ms. KAPTUR. Mr. Chairman, if the gentleman will continue to yield, that is correct. The Secretary of Agriculture will administer the program under the requirements of the production flexibility contracts as contained in the act.

Ms. KAPTUR. It has to have a crop cover. In other words, there is a lot of land out there that needs to replentify itself with additional moisture and so forth. We have severe problems in many parts of our country, we understand those needs, but we want the land ultimately to be used for livestock. We want it to be used for cash crops, vegetable crops, whatever. We just do not want to reward investors. We have gotten some letters from the gentleman's part of the country, for example, from tenant farmers who have had their contracts cut off for this next fiscal year because the investors who own the land can actually make more money by getting the payments from USDA than if, in fact, they had raised a herd or grown a crop. We want to prevent any abuse like that and really reward the people who are doing the work. That is the purpose of the language. I think both gentlemen, being respected ranchers and farmers in their own States, understand those who may try to cash in on a program like this, and I know that is not his intention in any way.

Ms. KAPTUR

Ms. KAPTUR. Mr. Chairman, I move to strike the requisite last word. (Ms. KAPTUR asked and was given permission to revise and extend her remarks.)

Ms. KAPTUR. Mr. Chairman, I wanted to rise in support of the entire bill and commend our chairman, the gentleman from New Mexico [Mr. Skeen], and our ranking member, the gentleman from Illinois [Mr. Durbin], who is handling this bill for the last time here in the House, and wish him well in the other body as of next January, and to thank the gentleman from New Mexico for working with all of us on the committee, on both sides of the aisle, to continue support for American farmers, who are the most productive in the world. Mr. Chairman, just for the record, let me say that in view of how much we have cut spending in this bill to meet the budget mark, let no one doubt which committee in this Congress is taking seriously the mandate to balance our budget. Our discretionary spending levels have been going down dramatically over the past several years. Frankly, if you ask me, one way to solve the entitlement and mandatory spending problems and overruns we face as a country, it would be to collapse the jurisdiction of all those entitlement and mandatory spending programs right here in the Committee on Appropriations. We do a good job of it. I just want to thank the chairman for his leadership. Mr. Chairman, the bill provides $52.6 million in total budget authority for USDA and related agencies, a level that is $10.51 billion below the fiscal year 1996 appropriations and $5.9 billion below the Administration budget request for fiscal year 1997. Let no one doubt which committee in this Congress takes serious by its mandate to balance the budget. Our discretionary spending levels are on a consistently downward slope. Frankly, if you ask me one way to solve the entitlement and mandatory spending overrun in other committees of this Congress would be to transfer their jurisdiction here. This is the only, committee that has a proven track record of deficit reduction. The bill includes a total of $12.8 billion for discretionary programs which is $508 million less than the amount appropriated in fiscal year 1996 and $1.3 billion less than the budget request. For mandatory programs, which are nearly 80 percent of the funding in this bill, the committee provides $39.9 billion, a decrease of $9.9 billion below the amount available for fiscal year 1996 and $4.5 billion below the budget request. Mr. Chairman, those who serve farmers and work with Agriculture are taught over and over again that there is a big difference between money and wealth. Our job on this Committee on Agriculture is to help create the wealth of America through the investments that we make in agriculture. Market-oriented farm policy means farming for the market and not the Government, and requires investments in research which will keep agriculture competitive as we move into the new century. The committee faced tough choices given our spending constraints. Yet, while faced with tight budget constraints we were still able to shift resources to priority programs. In order to adequately fund critical programs like agricultural research and food safety, we needed to look at all programs funded in this bill including the new mandatory programs created by the farm bill. Much discussion has focused on the $100 million cut in farm program payments that was included in the subcommittee mark. I did not support efforts to restore this funding--$100 million out of $5.2 billion, is reasonable particularly when you consider that prices are record levels. At a time when we are on a path to balanced budget, it makes no sense to add new mandatory programs or to provide a windfall in farm payments. I am particularly pleased that this bill also includes a provision which I offered and passed unanimously at subcommittee which requires farmers to plant in order to receive production flexibility payments under the new farm bill. This is a good Government amendment that allows taxpayers to get something in return for their investment in agriculture. The amendment allows for exemptions for conserving uses and weather-related exceptions. As one supportive Member has described it, this is the ``just don't sit on the tractor'' amendment. This amendment basically says to receive a Federal payment you must work for it. If we expect welfare recipients to work for Federal payments, why shouldn't farm payments go only to those who work. Since this amendment was offered I have heard from a number of tenant farmers who have been told by their landlords that their annual leases will not be renewed, so that the landlord can collect the full transition payment. For example, a rice farmer in Texas called my office today to say that the land he had farmed for the past 20 years was being taken away from him. He paid $80 an acre for rent and under the payment structure of the new farm bill that landlord could receive $160 an acre. Since the signup for the new farm bill is in effect through July 12 we can make no estimate as to how widespread this concern is. But I want to serve notice today, that I will offer this amendment year after year until this provision which allows landlords to ``take the money and run'' is fixed. And another farmer wrote me recently, By all accounts my farming operation is rated as one of the top five in my county. We (my father and brother) combine ourselves so we rely on no outside help . . . We specialize in production of rice, corn and soybeans. We lease 75% of ground to farm which is the cause of our problem. The landowner can now, terminate a lease of the tenant, . . . with the sole purpose of collecting the payment and not producing any crops on that land. . . . it allows investors to buy real estate and use the payment to help pay for the land, while not allowing a producer to farm it. . . . It was not the intent of this legislation to give land owners or any one the chance to exploit this bill into another public relations nightmare. I must however express my opposition to the cap on sugar payments that is included in this bill. While I will not offer a motion to strike this provision, its impact will be devastating to the sugar beet farmers in my District. This bill caps the U.S. raw sugar price at 117.5 percent of the loan rate, or 21.5 cents per pound. This about 1.5 cents below current prices. According to USDA, so much foreign sugar would have to be imported to reduce the raw sugar price to the capped level, that the refined sugar prices beet producers receive for their crop would plummet to about 24 cents per pound from the current 32 cents per pound. This cap will reduce the value of the sugar produced by beet growers by $650 million. Traditional farm programs continue to receive a decreasing portion of our spending and in my view we should target our scarce agricultural dollars to small family farmers. I opposed the recent farm bill because I do not believe that it did enough to target assistance to family farmers and to provide them with a safety when times are bad. While the farm bill made progress by enacting a $40,000 payment limitation, I remain concerned that large corporate farmers can still have access to Federal payments. In the decade of the 1980's we have slowly eroded the basis of American agriculture--the family farmer--and are moving in the direction of large corporate farms. We must address the increased concentration in agricultural markets that is squeezing family farmers out of business. We must also ensure that commodity prices are maintained at a level high enough to compensate for costs of production and to maintain standards of living in order to attract and retain individuals in farm production. And further, we must also negotiate trade agreements which encourage and enhance the ability of family farmers to compete in world markets. In agriculture trade, we must also work to recapture lost markets and increase exports. As American agricultural exports grow, foreign agriculture exports are being shipped to the United States in greater magnitude. Since 1981, our agricultural exports have declined from $43.8 billion to a low of $26.2 billion in 1986 and are projected to be a record $60 billion next year. At the same time agricultural imports have increased from $10.8 billion to approximately $25 billion in 1995. In many cases these are products our own farmers could be selling. In closing, I want to again commend the chairman and the ranking member for putting together a good bill. I urge the Members to support this fiscally responsible measure.

Ms. KAPTUR

Ms. KAPTUR. Mr. Speaker, I rise today to pay tribute to the St. Vincent School of Nursing, and to offer my congratulations as the school celebrates its centennial anniversary. Since 1896, the School of Nursing has remained a healthcare education landmark in Toledo, OH. Opened by the Sisters of Charity of Montreal, more commonly known as the ``Grey Nuns,'' the School of Nursing became the first school of its kind in Ohio. Sr. Elodie Mailoux served as the first director, from 1896 to 1898. Currently, Ms. Elizabeth Cain holds the post. She has been director since 1989 and is the 18th director of the school. Throughout its history, the School of Nursing has kept pace with the evolution of healthcare and nursing to graduate nearly 4,000 highly skilled, dedicated nursing professionals. In addition, the school has prided itself on its ability to successfully blend common spiritual beliefs with the latest healthcare technology and nursing education. Mr. Speaker, I am proud to recognize the 100th anniversary of the St. Vincent School of Nursing. As it enters its second century, the school's dedication to care, education, and service continues to provide the northwest Ohio area with outstanding nursing education.

Ms. KAPTUR

Ms. KAPTUR. Mr. Speaker, tomorrow it is my understanding that the Subcommittee on Trade of the House Committee on Ways and Means will be holding hearings on the very important issue of China and the renewal of most-favored-nation trade status with China. I am here this evening to enter remarks in the Record because the committee scheduled these hearings very quickly, without much public notice, and is allowing no Member of Congress to testify on this very important issue. If I had been allowed to testify tomorrow, I would be one Member of Congress who would state that I strongly believe that this issue deserves more than a perfunctory hearing largely closed to the public, and to the membership, because a new course in our relations with China must be struck; a course that reflects the rule of law and benefits the wider populace of both our great nations rather than the base material interests of a few who trade off that closed marketplace. Congress has been voting annually on China and its preferred trade status since 1974 when Jackson-Vanik was signed into law, which tied the internal politics of nonmarket economies to their external trading relations with the United States. Jackson-Vanik was a good idea in 1974, and it remains a good idea today if anybody would bother to go back and read it. The amendment provided a classic carrot-stick approach to policy. The carrot was the U.S. market. The stick was taking away any nation's most favored trading status if it hurt us or it did not live up to our highest ideals. While China has been gorging itself these many years on the carrot of our marketplace, somewhere along the line we lost the stick to effect change in regard to China's attitudes and policies toward our country and toward the citizens of both our nations. Every year since 1974, President after President, from President Ford to President Clinton, have stood before this Congress and the American people to assure us that our trading relations with China will improve if China's most-favored-nation status is renewed for just 1 more year. This, of course has not happened. If we refer to this chart here, over the past decade alone the United States has recorded a 1,000 percent increase in our trade deficit with China. Just this year alone, it is projected to be even higher than ever in the past, over $40 billion of additional debt, another record. Thirty-three percent of China's exports come here to this market. One out of every three products they send someplace else in the world ends up on our shelves. At this pace, China will surpass Japan in the next 2 to 3 years as the nation with which we possess the largest trade deficit in the world. And of course, as our trade deficits have been getting larger and larger every year, the pull-down on our wage levels is greater and greater very year and the erosion of our manufacturing base greater and greater every year as we watch it replaced with service jobs that pay so much less. If we look at what is happening, however, under China MFN it effectively says to China they have a 2-percent tariff rate to get into our market, but guess how much China's tariff rate is against our goods, even with MFN? Thirty to forty percent. Thirty to forty percent. What kind of a deal is it for our country where we lower our barriers to their goods, but they refuse to lower their barriers to ours? What kind of a deal is it for us? China is a closed command economy with tariff rates much higher than our own and, beyond that, exchange rates which they manipulate that actually increase the price of our goods into their market by over 50 percent. We know, beyond the exchange rates, beyond tariff barriers, our own U.S. Trade Representative has stated in a report that there are so many nontariff barriers that China also employs to prevent our goods from going into that land, and also is known for other trade abuses involving arbitrary standards, testing, labeling, certification. Their government procurement process remains largely closed to foreign competition. They engage in export subsidies, theft of intellectual property, and they employ an array of barriers to our services and foreign investment. There is no question who benefits from the renewal of China MFN. It is not the American worker. It is companies like Wal-Mart that employ 700 different contract shops, that employ people in China at 10 cents an hour to make everything from toys to Nike shoes that they then send back into our market, and our people's prices are not lowered. Forty percent of our own apparel industry, for example, has been wiped out, out of this country, replaced by Chinese production, and it is as though nobody here in Washington has even been hit with a brick bat over the head. Let me say that in the days ahead I will be putting in the Record additional information about what China MFN actually means to our country and the people of China. It is time to stand for the rule of law and reciprocity in trade.

Ms. KAPTUR

Ms. KAPTUR. Mr. Speaker, I rise today to pay tribute to a Toledo institution which has been serving women and their families for 75 years. The Beach House has worked to meet the needs of our city's homeless women, children, and entire families. Our Nation's lack of affordable housing is a crucial problem and a principal reason why women often find themselves and their families without shelter. Beach House provides emergency shelter for 30 days in a clean and safe environment with 24-hour supervision 365 days a year. An on-staff licensed social worker helps clients to establish a plan of action, which includes finding housing and making referrals to other agencies for needed assistance. Beach House opened its doors in May, 1921, under the guiding hand of Mrs. Helen Beach Jones, the wife of Toledo's Mayor ``Golden Rule'' Jones. Mrs. Jones worked with several women's organizations to establish the shelter, and named it Beach House in honor of her mother Harriet Beach. In 1982, the shelter expanded its clientele to include fathers and husbands in order to keep homeless families intact. The Women's Protective Association has governed and managed the shelter from its inception. In 1941, Beach House moved to its present location, and in 1963, it received a charter as a nonprofit organization. A recent complete remodeling of the shelter has made it accessible to disabled persons. Beach House also operates a transitional shelter project called Steinquest House that allows qualifying women and families to continue supportive services for up to 24 months. Mr. Speaker, at 75, Beach House is a wonderful example of a community helping its own. It has seen good times and bad times. It has seen depression and war, and throughout its years Beach House has served the women of Toledo and their families with steadfastness and with compassion. I commend Beach House to my colleagues. We know it will be there whenever there is need.

Ms. KAPTUR

Ms. KAPTUR. Madam Speaker, who is really going to benefit if Congress renews China's most-favored-nation trade status for another year? Will more of our citizens get good jobs with good benefits? No. Will prices go down in our stores? No. We will all wait for that day. But will leading importers from China make billions off trading our jobs for outsourced production to China? Absolutely. People like David Glass will benefit. Who is he? He is the chief executive officer of Wal-Mart, the leading United States importer from China. Last year he earned over $1 million trading off the handiwork of Chinese women who earn 10 cents an hour working 14-hour days. So did his top five executives, who hauled off over $3 million just last year. Evidently Wal-Mart believes China's repressive regime is somebody they want to do business with. Last year, Wal-Mart imported 1,000 shipments from China by relying on 700 Chinese contract sweatshops. Can Members imagine how many jobs that would create in our country, including in those communities in which Wal-Mart does business here? I say it is time to revoke China's privileged trade status until we get a fair shake for American and Chinese workers and consumers.

Ms. KAPTUR

Ms. KAPTUR. Mr. Speaker, I rise today to pay tribute to Rabbi Edward and Sara Garsek as they leave our community after more than 20 years of service. Since 1975, Rabbi Garsek has served as the spiritual leader of the Orthodox Congregation Etz Chayim in Toledo. In that capacity he has earned the admiration and respect of the entire Jewish community and beyond that all of the citizenry of our city. Through these years he and his wife Sara have worked lovingly and consistently to raise the spirituality of their extended Toledo family. An integral part of the Garseks' roles as rabbi and rebbetzin has been as teachers--filling an enormous need in our community, teaching audit education courses, Hebrew High School, Community Hebrew School, as well as Sunday religious school. The benefit of their professionalism is most keenly felt at the Hebrew Academy of Toledo, where they meet daily with their pupils. They will be long remembered by their students. Rabbi Garsek leads his congregation with a wonderful sense of humility, a warm sense of humor, and a passionate love of Israel--the People and the State. Sara is his perfect complement, a tower of strength in her knowledge, believe, and devotion to the words of the Torah. We in Toledo know them to live by the words of Hillel, ``Be of the disciples of Aaron, loving peace and pursuing peace; be one who loves human beings and draws them near to Torah.'' Rabbi and Sarah Garsek came to Congregation Etz Chayim bringing with them three very young girls, Chaya, Esther, and Devorah. Over the years, they have been blessed with four more beautiful children, Zev, Shoahana, Rachael, and Yitzchak; a son-in-law, David; and two grandsons, Bentzion and Akiva. Rabbi and Sara Garsek will be missed, but we know their presence will grace their new community as it has ours.

Ms. KAPTUR

Ms. KAPTUR. Mr. Speaker, Congress will soon take up the question of whether or not to renew China's most-favored-nation trade status inside this marketplace for another year. I am one Member of Congress who will vote ``no,'' as in no more lost U.S. jobs, no more abdication of the U.S. marketplace, no more trade deficits and no more wishful thinking on our trade policy toward China. Every year the American public is told that, if Congress votes to renew China's MFN status just one more year, that our trading relationship with China will improve. Well, it has not. This chart shows over the last 7 years the United States trade deficit with China has increased over 1000 percent, from a deficit of $3 billion in 1988 to over $35 billion last year and projected over $40 billion this year. At this rate China will even pass Japan shortly in racking up the most red ink with this country. China remains a closed authoritarian Communist regime. Why should Congress add more red ink to this ledger?

Ms. KAPTUR

Ms. KAPTUR. Mr. Speaker, this Sunday, May 19, the Interracial Religious Coalition in my community will hold its Sixth Annual Honorees Banquet at the Islamic Center of Greater Toledo. The coalition is to be commended for its celebration of interracial and interreligious harmony and unity. Four individuals who have contributed to the quality of community relations in our city will be honored at the banquet, Rev. Claude Christopher, pastor of St. Paul AME Zion Church; Joan Coleman, Toledo city councilwoman; Rev. Martin Donnelly, pastor of St. Martin DePorres; and Larry Sykes, division of business development and retail lending, Fifth Third Bank. I also rise to commend the coalition for passing a recent resolution in response to current strife and loss of life in Lebanon: Be it resolved that the Interracial Religious Coalition called upon its Members to pray for peace in the Middle East, pray for those who have lost their lives in the strife, and to ask our government to stop the bombing on both sides and continue the pursuit of peace. The diplomats of Syria, Lebanon, Israel, and France brought together by the Clinton administration in Washington, DC, to arrange for monitoring of the ceasefire between Israel and Hezbollah guerrillas would do well to follow their lead.

Ms. KAPTUR

Ms. KAPTUR. Mr. Speaker, last month as a cochair of the Jobs and Fair Trade Caucus, I proudly presented our group's first monthly Golden Eagle Award to Malden Mills in Methuen, MA. If you will recall, the Gold Eagle Award recognizes fine U.S. companies that exemplify the best that is in us as a nation, companies which treat their workers with dignity while making decent profits, companies which contribute to strengthening their communities, companies which charge a reasonable price for their products and remain and prosper in these United States. When all of these practices are undertaken by one company, that company deserves our praise as a Golden Eagle U.S. company. On the other hand, the Corporate Vulture designation, like the scavenger it represents, is given to a company in need of vast improvement, a company which exploits our marketplace yet downsizes its work force in America and outsources most of its production to foreign countries using sweatshop labor abroad. These firms then import their transhipped products back to the United States while keeping their prices high here at home and maintaining all of the benefits of being called an American company. Corporate vultures deserve the consumers' disdain. Now, let me acknowledge this month's Golden Eagle company. The March 18 issue of Business Week detailed the unprecedented stock ownership of the company we all know as United Airlines, our Nation's leading airline company. Tonight, the Jobs and Fair Trade Caucus awards the employee owners of United Airlines our Golden Eagle Award and this new U.S. flag flown over the Capitol for your leadership, your rising productivity, and the example you set for all other companies in these United States. United Airlines and its employee owners fit our description of a golden Eagle company in every respect. In the 18 months since United employees bought 55 percent of their company for $5 billion, United Airlines has confounded all the skeptics by their success. The Nation's No. 1 airline is outperforming most of its rivals, gaining markets share from the other top two airlines. The company is posting fatter operating margins and higher stock gains, with the stock price more than doubling since the purchase of the company. The American workers of United and its chief executive officer Gerry Greenwald have made the company the success it is. By taking a huge risk in accepting pay cuts of 15 percent or more in the short term, United employees have shown that hard work over the long haul pays dividends. Operating revenue per worker jumped by 10 percent last year. Employee complaints, down by over half, have turned into new ideas about how to better work together with management. And unlike many large corporatios these days, which relentlessly downsize their work force, United is a job creator, hiring 7,000 new people since the buyout. In marked contrast to our Golden Eagle Award, this month's Corporate Vulture designation goes to Hershey Foods, a company no longer so sweet to America. Hershey Foods, America's largest producer of chocolate, continues to outsource its production to countries like Mexico and cut its U.S. work force. Last fall, Hershey Foods announced layoffs of approximately 500 workers and then announced the company was moving the production line of its giant kiss from Hershey, PA, to its plant in Guadalajara, Mexico, which employs approximately 260 workers. The U.S. workers laid off were earning $15.40 an hour, and as one old-timer stated, as a part of that enjoyed health insurance, dental, eye, along with a pension plan. Hershey's Mexican workers are paid 50 cents an hour with almost no benefits. The chief executive officer of Hershey Foods, Chairman Kenneth Wolfe, says he understands the pain he has caused the workers and their families in Hershey, PA. I frankly find that hard to believe. Chairman Wolfe earned an annual compensation of $1.2 million in 1994, not counting his stock options. Moreover, Hershey Foods is earning increased profits. The latest annual report shows that Hershey Foods enjoyed a net profit of $184 million, while total sales have increased to $3.6 billion. A company and a chief executive officer earning millions of dollars every year have no idea what it means to lose your job and worry about your family's future. Economists will claim that Hershey's move to Mexico is good for American consumers. After all, when you are only paying your Mexican workers a few cents an hour and earning millions of dollars, your product will be cheaper, right? Take a look at the shelf. Hershey prices on chocolate have gone up in bars. So this evening, this month, Hershey Foods definitely fits the bill as this month's Corporate Vulture, May 1996.

Ms. KAPTUR

Ms. KAPTUR. Mr. Speaker, over the weekend, here in Washington there was a public relations blitz organized by the administration to tell us and the world how United States trade relations with Japan have improved. National Economic Council Chair Laura Tyson went so far as to state we have had a great record of success with the Japanese in the area of trade with our exports increasing by one-third since 1993, and we have seen the trade deficit come down, she said, for the first time in 5 years, so we have a strong record of success. Well, you know, people can twist numbers in amazing ways. If the administration had such a strong record of success, why has the United States trade deficit with Japan worsened during the Clinton watch and become even worse than during the Bush years when the United States trade deficit with Japan reached all-time highs? Look at the facts. During the first 3 years of the Bush administration, the United States trade deficit with Japan reached over $133.5 billion. During the first 3 years of the Clinton administration, our trade deficit with Japan has soared to over $185 billion. That is $50 billion worse, according to my math, and a 39-percent increase. Wishing a problem away certainly will not make it so, and Japan knows it. Our Nation gains nothing by denial. Facts again: During the Bush years, the 4 years, the total trade deficit with Japan reached over $183 billion, an all-time record. President Clinton has racked up that amount in just his first 3 years. In fact, during the Clinton watch, the trade deficit with Japan has rung in at all time record highs each year, $60 billion in the red in 1993, $65.7 billion in the red in 1994, and $60 billion in the red in 1995. We cannot project what the United States-Japan trade deficit will be this year, but all indicators are that the total for the 4 years of Clinton's time will easily be over $230 billion to the deficit side of the ledger. Let us take a look at the automotive sector, which still accounts for over half of the deficit with Japan, more exports coming over here, fewer of our imports going into their market. Remember when President Bush journeyed to Japan late in his Presidency and became ill at the official dinner held during the automotive trade rift? This is not a new problem. I personally have been working on opening Japan's market to United States goods for over a decade. I can tell Members Japan's auto market largely remains closed. They continue to believe we are not really serious. United States auto manufacturers still have less than 1 measly percent of Japan's auto market, yet Japan holds upwards of one-third of our market. Think about this. With our low interest rates, the value of our dollar against the yen has fallen 40 percent since 1990, which means that our products are 40 percent cheaper in Japan. Yet we gained only one-third of 1 percent additional market penetration in Japan in 1995. While we were able to sell about 58,000 cars there last year, Japan has sold over 100 times that amount in our country over the last decade. When I ask my local auto people, how are you doing, they smile and they look down. In a recent survey of United States auto parts suppliers to Japanese customers, two-thirds of our suppliers say they are working hard to crack Japan's market with roughly half of those responding saying they are currently achieving either limited success, sporadic success or no success at all in really opening that market. Can you imagine, in the second largest marketplace in the world, if we could get trade reciprocity with Japan, the amount of jobs we could create in this country, in shipping, in distribution, in manufacturing, in parts, et cetera? Compare the limited success of United States auto and auto parts manufacturers to crack Japan's market to the administration's exaggerated claims. Friends, let us stop the denial. You cannot look at these numbers and not know that trade is going one way and not the other. We have scaled an ant hill in our efforts to open Japan's market. Now all that is left is the mountain of red ink to scale.

Ms. KAPTUR

Ms. KAPTUR. Mr. Speaker, with the President in Japan, it is time to take stock of our abysmal trade accounts with that nation. The administration is doing its best to put a public relations spin to last year's massive $60 billion trade deficit with Japan. Look at the facts: During the first 3 years of the Clinton administration, the United States has suffered over $185 billion in more trade deficits with Japan, a 39-percent increase over the abysmal trade deficit records under the Bush administration. U.S. auto manufacturers still have less than 1 measly percent of Japan's auto market, while Japan commands over one-third, 33 percent of this market. The value of the dollar against the yen has gone down by 40 percent since 1990, making our automotive goods 40 percent cheaper in their market. Yet the United States gained only one-third of 1 percent of Japan's auto market since 1995. Mr. Speaker, let us save the high fives. We have scaled an ant hill. Now all that is left is the mountain.

Ms. KAPTUR

Ms. KAPTUR. Mr. Speaker, I thank the gentleman for yielding me time. Mr. Speaker, I rise in strong opposition to this amendment to slice another part out of the precious heritage of our Constitution. This is in fact the fourth attempt by this Republican leadership in the 104th Congress to rip apart the Constitution of the United States, a document that has only been amended 17 times, excluding the Bill of Rights in our 207 year history as a nation. Now they are trying to rid it of majority rule, enshrined in the Constitution since the beginning of this Republic. We are being asked to undermine the delicate checks and balances between the executive and legislative branches on the important issue of revenues. Other equally weighty issues, such as borrowing or coining money or even declaring war, itself could eventually become subject to the same supermajority threshold. Reread article I, sections 5 and 7. It specifically defines how decisions are to be made between this legislative branch and the executive branch. It does provide for a two-thirds override in the event of a veto by the President, but majority rule is enshrined in this Chamber. In 1779 the emerging republic that was to call itself the United States of America threw off the shackles of monarchy and gave voice to the people by vesting all their legislative powers in those they elected here, and they did it by majority rule, bound by the Constitution that has kept us free. Frankly, this amendment is a cheap shot against a sacred document during a week that most Americans would like to forget: tax filing time. But this Member is one that is unwilling to unravel the Constitution and its environment of majority rule for the sake of a few well-timed press releases at tax time. For shame.

Ms. KAPTUR

Ms. KAPTUR. Mr. Speaker, a little over a year ago, our Jobs and Fair Trade Caucus brought together a small coalition of working women, consumer groups, and Members of Congress to launch what we have called the come shop with me campaign, a campaign to educate the American consumer about the link between the loss of U.S. jobs here at home, high prices, static wages, sweatshop working conditions in the developing world and even in some places here in this country and the record profits being made by certain multinational companies which keep U.S. prices high while relentlessly moving our jobs offshore. We illustrated this link between loss of U.S. jobs and trade by targeting specific corporations, going to stores and checking prices, scouring annual reports and newspaper clippings, and most importantly, talking to consumers and workers, getting their side of the story. Mr. Speaker, today we embark on a golden eagle campaign to recognize and reward fine U.S. companies that exemplify the best that is in us as a nation. Simultaneously, we will identify those companies and chief executive officers whose behavior is not exemplary and deserve to be labeled only as corporate vultures. The corporate vulture label will be given to American corporations which are in need of vast improvement. These are the ones which exploit our marketplace yet have downsized their work forces, which have outsourced most of their production to foreign countries, which use sweatshop labor abroad and then import these transshipped goods back to the United States, keeping their prices high here at home and maintaining a shell company in our country, even while enjoying all of the benefits of being called an American company. The vulture, a predator and a scavenger, is an appropriate symbol for identifying U.S. corporations that exploit foreign workers while getting fat on the backs of American consumers and giving back almost nothing in return. But let us begin on the positive side of the ledger with our first award, the Golden Eagle Award, and we will do one of these each month between now and the end of this fiscal year. This very prestigious Golden Eagle Award recognizes a U.S. firm and its chief executive officer who exemplified the best in business behavior. We are proud of them as citizens of this great country. The Golden Eagle Award will be presented to a U.S. firm that treats its workers with dignity while making decent profits, resists the tide of downsizing and outsourcing production, contributes to the strengthening of our communities, charges a reasonable price for its products, and remains and prospers in the United States of America. I am very pleased to present the first Golden Eagle Award on behalf of our caucus, along with a new U.S. flag flown over our Capitol, to Malden Mills in Methuen, MA, and more specifically I would like to present the first Golden Eagle Award to Aaron Feuerstein, the 70-year- old owner of Malden Mills whom the local press there has hailed as the saint in New England. On December 11 last year a major fire struck Malden Mills, the company Mr. Feuerstein's grandfather founded in 1906, burning down 3 of 9 buildings and idling 1,800 employees, three-quarters of the work force at that company. But instead of laying off his work force and pulling up stakes for Mexico, as so many other textile and apparel firms have done across this land, Mel Feuerstein promised he would pay the workers their wages and, even more incredibly, their health care benefits, for 30 days, and when it became obvious that more time was needed, he extended the period to 60 days and then to 90 days. When asked why he did it, Mr. Feuerstein replied simply, ``Because I consider the employees standing in front of me as the most valuable asset Malden Mills has. I don't consider them as just an expense which can be cut.'' What makes Mr. Feuerstein's story all the more remarkable is that he stayed in Methuen, MA, even in the face of adversity while most of his much larger competitors, some of the names you will even recognize, Sara Lee, Fruit of the Loom, continue to close plants in this country and give pink slips to workers and move their production offshore. Over the past 20 years 292,300 workers, mostly women, have lost their jobs in our Nation in the textile and apparel industries. Forty percent of that industry in our country is without a job. But Aaron Feuerstein, and he is not a multinational, has tried to hold out, treated his workers well and has continued to make a profit. He is a shining example of what it means to be a good corporate citizen in the United States and try to struggle uphill against the vultures of the mega corporations that would like to snuff him out of business. Mr. Feuerstein truly deserves our praise as a patriotic citizen. Along with our first Golden Eagle Award, we will mail to him today this brand new flag flown in his honor and his firm's honor over this Capitol of the United States. Mr. Feuerstein, thank you, thank you for your decency and for your leadership as a corporate citizen of this Nation. By contrast, we have chosen to designate the Nike Corp. as the first recipient of our corporate vulture label. Nike has shut down all of its production in this country. It does not even produce one athletic shoe in the United States of America, even while it earns billions in profits off this marketplace. In fact, their profits have quadrupled, gone up over 4 times over the past 5 years, by aggressively marketing, and I underline the word ``marketing,'' many of their shoe products and marketing them to some of our most impressionable young people. The company now commands over one-half, one-half of the men's athletic shoe market in this country. Not a bad racket if you are Nike, paying your women workers in Indonesia and China 12 cents an hour while charging our kids and our families $135 to $150 a pair for shoes, but not a good deal if you are a downsized American worker who used to make those shoes in Maine or in California, or a consumer who has to pay those high prices. Not a good deal for them. Or how about if you are an anonymous Chinese woman worker whose government makes its money off the sweat of your work? Not a good deal for you either. Now Nike would like you to believe that they are a great American company. In fact, they have been spending $250 million a year out of the money they make off of you trying to convince you how good they really are. They bought so much advertising it is hard to turn on television without seeing it. Nike has virtually bought off the entire American sporting world to delude the American consumer about what is really going on here. The truth of the matter is that all of Nike's 75,000 production workers, mostly poverty-stricken women and hungry girls, are in countries like Indonesia, Thailand, China, and South Korea, countries which are notorious for their sweat shop working conditions and bleeding all they can out of their people until they are finished with them. Then they throw them out the door, and there is another million people who are hungry, lined up to replace them to work for 10 cents an hour. Now here at home Nike threatens to tear up our communities with their relentless marketing to our most vulnerable kids. You know what is happening. In some places in this country our children are killing one another for these shoes. As Phil Mushnick, a sports writer for the New York Post, courageously pointed out when he refused to endorse Nike shoes, he said, ``I saw the prices going from $40 to $90 to $100 and then $150, and in full cognizance that people were dying for these shoes, inner city kids, too, the kids that Nike was targeting with their inner city role model marketing binge.'' For this our caucus can think of no other company more deserving of the label ``corporate vulture'' than Nike Corp. Now Mr. Philip Knight, the chairman of the board of that company and its chief executive officer, took home compensation of over $1.5 million last year, not including his stock bonuses and other benefits and perks. I often ask myself whether this type of individual has any conscience left or if he ever had any, to profit personally off the meager wages paid to Asian women and the U.S. workers he has sent to the unemployment lines. Mr. Knight and Nike, for you our caucus designates the ``vulture'' label. Mr. Speaker, I also wanted to place in the Record this evening in our battle, continuing battle for job creation in this country to give our workers and our communities a fair shake in the international market, some information on a bill moving through this Congress that Members should know about. It concerns our patent laws, the very basis for our collective intelligence as a people, the foundation of our new products where the genius for America's future lies. The U.S. patent system is under attack, and the United States, without question, has the largest body of intellectual property in the world, protected from the time of George Washington and created by the first Congress of the United States. If this system is weakened, and there are many who would like to see that it is, America's job creation capacity will be even more seriously eroded. Today I rise to point out that one of the bills moving in this Congress is a grave threat to our traditional patent system; that bill number, H.R. 2533, with a very innocuous title, ``The U.S. Intellectual Property Organization Act of 1995.'' Why am I concerned about it? Because why should our Nation pass a law that puts us at a greater competitive disadvantage with our trade competitors around the world? H.R. 2533 is tantamount to selling off our national heritage bit by bit. H.R. 2533 would subject our patent examiners to undue pressure by special interests by removing their current civil service status. You know, there ought to be some things in this town not for sale. H.R. 2533 would undermine the Constitution of this country by removing the Patent Office as a core Federal function, and congressional oversight in that bill becomes almost nil. I ask my colleagues to pay attention to this bill, oppose H.R. 2533, and support H.R. 359, which restores patent terms and gives our patent and inventors, the geniuses of our country who are inventing our future, the kind of protection and respect that the Government of the United States and the people of the United States owe them. Let me say to my colleagues, do not be fooled by the wolves at the door, and let me say you might ask yourself the question, ``Well, who would want to tamper with our patent system? In whose interests would it be to weaken the protections we give to our inventors?'' There is an article I am going to be placing in the Record called the National Security Report, lead article, ``American Patent System Subject To Foreign Power Grab.'' There are plenty of powerful interests around the world that would like to own the competitive genius of this country, and they know the only way they can do that is by changing the laws. In fact, the Constitution of the United States, and I quote from the article I am going to enter in the Record, In the war for global economic dominance, the fiercest battles today are over intellectual property. Where nations once fought for control of trade routes and raw materials, they now fight for exclusive rights to ideas, innovations and inventions. The article referred to is as follows: [From the ROA National Security Report, Sept. 1995] American Patent System Subject To Foreign Power Grab (By Beverly Selby) The recent book Patent Wars: The Battle To Own The World's Technology, best describes the reason for the current legislative struggle in the 104th Congress about intellectual property. It states, ``In the war for global economic dominance, the fiercest battles today are over intellectual property. Where nations once fought for control of trade routes and raw materials, they now fight for exclusive rights to ideas, innovations and inventions.'' In 1947, intellectual property comprised just under 10 percent of all U.S. exports; today, the estimate is that ``intellectual property accounts for well over 50 percent of all American exports.'' The United States is a major player in the world community because it has the largest body of intellectual property in the world. Job creation opportunities are directly linked with the patent system which has been the secret of America's job creation and economic power for over 200 years. Today, in the 104th Congress, the debate is about restoring the patent term, and other issues which will radically change the American patent system. Legislation has been introduced to restore the patent term, publish patent applications before a patent is issued, re-examine issued patents, and create a government Patent and Trademark Corporation. On one side of the argument are multinational companies and foreign interests, and on the other are independent inventors, small businessmen, venture capitalists and universities. The major issue is the patent term. Several concerns have been raised about pending legislation and its effect on the American patent system. Last year when Congress approved legislation implementing the General Agreement on Tariffs and Trade (GATT), a provision was included that dramatically changed the way the U.S. patents will be issued. Historically, patents have been awarded for a term of 17 years beginning when the Patent & Trademark Office (PTO) grants a patent to an applicant. However, beginning on 8 June of this year, the PTO will issue patents for a 20-year term beginning when the application was filed with the PTO. The net effect of this change is to dramatically shorten the useful life of breakthrough patents held by emerging companies, which have led to the creation of entire industries. Patents of highly technical, cutting-edge discoveries take years to issue. Under current law, such a delay in inconsequential as the patent holder is assured a minimum patent term of 17 years because the time does not begin to tick until the patent is issued. Not so with the new 20 year standard, as it often takes the PTO eight to nine years or even longer to issue a patent, leaving the patent holder with only a few years of protection, if any. Given the vast amount of capital needed to sustain many high growth companies, retaining exclusive use of the underlying intellectual property for a full 17 years is imperative if any emerging company is to recover its costs and provide a competitive rate of return to its venture investors. Congressman Dana Rohrabacher (R-Calif.) has introduced legislation that would cure the problem of a shortened patent term. His bill, H.R. 359, would make U.S. patents valid for 17 years from date of issue, or 20 years from date of filing, whichever period is longer. During the course of the GATT debate last fall, United States Trade Representative Mickey Kantor agreed the Administration would not oppose legislation guaranteeing a minimum patent term of 17 years as it would not constitute a violation of the GATT agreement. Many changes to the American patent laws were proposed in 1994. The patent term limitation was passed because it was piggybacked on the GATT-implementing legislation. This change in the patent term weakens the American patent system and penalizes the breakthrough patents. Also, these changes facilitate widespread copying of the more important inventions by foreign companies. Three of these changes, when taken in combination, establish a disastrous scenario that clarifies the reason for the Japanese insistence that America adopt these changes. These three changes are (a) a patent term measured from the filing date (the GATT patent term), (b) publication in 18 months and (c) three party re-examination. The scenario for important breakthrough (e.g. high-tech) patent applications is disturbing. The breakthrough patent application is filed and then it is published in 18 months. Because of its importance, large multinational companies rally to oppose the breakthrough patent by filing prior art, and most likely by filing arguments opposing the issuance of the breakthrough patent. Because of the significantly longer pendency for important patents, the breakthrough patent is far from issuing when the oppositions' are filed. The patent examiner, who is reluctant to issue a breakthrough patent having broad claims, enters new rejections based upon the prior art submitted by the opposition. This further increases the pendency time. Currently, the patent officer permits the filing of multiple re-examinations in sequence. Therefore, to be consistent, the patent office will undoubtedly permit the filing of multiple oppositions in sequence, opposition after opposition, causing the examiner to enter new rejections as new art is cited, further delaying the issuance of the patent. Under the GATT patent term, the term of breakthrough patent applications is further reduced by the long pendency. Because of the 18 month publication requirement, companies worldwide are able to copy and to develop the breakthrough technology while the patent application is still pending. As currently practiced in Japan, and as a direct result of the publication, competitive products begin to appear in the marketplace and large companies ``flood'' the PTO with multitudes of mundane improvement patents on the breakthrough technology. As in Japan, these mundane improvement patents are often issued before the breakthrough patent because of the prosecution delays inherent with such a breakthrough patent, and because delaying oppositions are not filed for mundane improvement patents. When and if the breakthrough patent finally issues, much of the GATT patent term has expired, and its patent owner will be competing with mature products in the marketplace and ``floods'' of mundane improvement patents based upon the patent owner's originally published breakthrough technology. However, this is far from the end of the ordeal for the patent owner. Now the competitors file a sequence of re- examinations, one after another. A re-examination is a post- issuance opposition. The company behind the re-examination is kept secret, and an attorney is usually named as the re- examination requester. A re-examination can take more than five years. After a re-examination is completed, another, and another, and another, can be filed. A patent cannot be realistically enforced while a re-examination is in progress. Hence, a sequence of re-examinations further dissipates the effective term of the patent. Now, new legislation is in progress to make re-examinations third party proceedings. Presently, a re-examination is conducted by the patent examiner. The requester can file initial papers but is not permitted to intervene in the re- examination. The new legislation permits the requester to participate in the re-examination. This will change a re- examination into a form of litigation with a team of opposing attorneys arguing issues, filing briefs, and performing many other complex litigation activities. The PTO has trouble hiring and training qualified patent examiners; now the PTO will have to train patent examiners to be litigation judges. Even worse, many breakthrough inventions come from small companies and individual inventors with limited resources. Matching up such a patent owner against a team of attorneys from a large foreign company will usually end in devastation of the breakthrough patent. Even if the patent owner prevails, another re-examination will be requested by another large company citing a different stack of prior art references and the attack will start all over again. In Japan the combination of conditions has resulted in important technologies being exposed and unprotected: a patent term measured from the filing date (the GATT patent term), publication after 18 months, and third party oppositions. This has resulted in Japan becoming a nation of copiers. Now, those seeking to copy American technology are demanding legislation to deprive America of its innovative talents. America must stand firm behind its inventors, small businesses, research universities, and entrepreneurs, and not permit its intellectual property to be copied with impunity. Research universities also share a longstanding interest and an active involvement in intellectual property issues that affect higher education. Since the passage of Public Law 96-517 (The Bayh-Dole Act) in 1980, research universities have been actively engaged in establishing patent protection for university-developed technology and subsequently licensing their patents to industry and small business. Innovations resulting from university research are deemed largely responsible for the spectacular growth of the biotechnology industry, and of significant importance to the microelectronics, computer and health care industries. These innovations are culled from the fundamental scientific explorations of university faculty, students and research scientists and, as a result, tend to be at the cutting edge of scientific theory and practice. As a consequence, patent applications on university inventions have historically spent years in the PTO before ultimately issuing as patents. University licensing programs are generally dependent upon patent protection to induce mature companies as well as small businesses and start-up company investors to take a financial risk on backing the further development of new, and often early-stage, technologies. Consequently, university technology transfer managers were indeed concerned to find that H.R. 5110, in implementing the GATT, had potentially shortened the long-established patent term of 17 years from date of patent issue, and had done so despite the fact that such action was not required by the GATT. Our interests in enhancing the successful transfer of university technology, and in helping to keep the U.S. as a front-runner in commercially exploiting new technologies, are not well-served by potentially diminishing the useful life of our patents in an effort to reap an unquantified benefit from harmonization with potentially less innovative nations who stand to gain from shorter patent terms. These are but a few of the concerns of the independent inventor, venture capitalists and universities who are relying on their patents for income and to create new industries. What must be remembered is the fact that the U.S. system is unique and was created by the founding fathers as a means of generating jobs and prosperity for the country. To date, the United States is leading the world in fundamental patents, which are most often cited in patent literature worldwide. These patents are the way to chart the prosperity and future for a nation because the patent holder will derive income over a period of time. From those patents spring new industries. At stake in the legislation now before Congress is whether the patent system should be used to benefit the American taxpayer and voter, or the world at large. The choice of the future is ours.--NSR nsr focus Experts warn that the current debate in Congress on patent regulations can have a serious impact on the national security of our nation. Critics of the new system, which resulted from GATT negotiations and a deal cut with Japan last year, contend that foreign firms will gain access to American inventions, ultimately weakening the international competitiveness of the United States. Robert Rines, an inventor and prominent Boston lawyer, claims that the new system is going to wreak havoc with breakthrough inventions, which, historically, have come from individual inventors or small firms, not from large corporations. The U.S. system awards patents to the original inventor, not the first to file, as in other countries. Under the new 20-month publication provision, key concepts of an invention become available to anyone before the inventor has a chance to refile and win protection. That is why Japan, the multinations and other big companies love it, and why, according to Rines, ``the little guys are deathly afraid of it.'' Beverly Selby's article is a fundamental document which clearly details the fear and concerns of the small businesses and American inventors, who, at the core of the U.S. innovative process, are faced with new patent provisions that fail to protect American technology and innovative small business--AACG

Ms. KAPTUR. I ask my colleagues again to support H.R. 359 and oppose H.R. 2533, and, Mr. Speaker, I would like to yield to the gentleman from New Jersey [Mr. Pallone], who I understand has some remarks that he would like to make at this point. independence for the belarus republic

Ms. KAPTUR

Ms. KAPTUR. Mr. Speaker, I rise in support of this bill which will move the Federal Government out of planting decisions while providing some support during the shift to a market driven agricultural economy. However, I must express my strong opposition to language inserted in the bill during the conference which will severely impact our ability to move to a modern science-based meat and poultry inspection system. Section 918 of this bill establishes a permanent advisory committee to evaluate and review meat and poultry inspection programs. This proposal is similar in effect to the proposal made last summer in the Appropriations Committee to slow meat and poultry inspection reform by forcing USDA to undertake negotiated rulemaking at a late point in the regulatory process. Section 918 was never subject to public hearings and was not included in the Senate or House passed bills. This advisory committee would review every decision made by the Food Safety Inspection Service, including inspection procedures, labor relations, employee work rules, food safety practices in meat and poultry plants and approval of new technologies. This could delay the implementation of the new Hazard Analysis and Critical Control Points [HACCP] inspection system, a science-based system endorsed by both industry and consumers. Further, this panel will be able to meet in secret and conduct its deliberations outside of public scrutiny because it is specifically exempt from the requirements of Federal Advisory Committee Act. Mr. Speaker, last year there were five million foodborne illnesses and 4,000 deaths in our Nation. Section 918 has no place in this bill and we should take no actions which will decrease public confidence in the healthfulness and safety of our meat and poultry products. Have we learned nothing from the recent British experience?

Ms. KAPTUR

Ms. KAPTUR. Mr. Speaker, in support of our ``Come Shop with Me'' campaign, the New York Times fortunately ran a story this month on the business page with the subtitle ``Low Wages Would Foreign Business, But the Price Is Worker Poverty.'' The story, which I will enter in the Record tonight, describes how a 22-year-old Indonesian man named Tongris was dismissed from his job making Nike shoes for export to the United States because he was organizing his fellow workers to demand more than the government-dictated poverty wage. How much was Tongris and his co-workers getting paid to make Nike shoes? Twenty cents an hour. And that is with no benefits. More than 5,000 workers turn out Nike shoes at this plant in Indonesia, shoes which often sell for over $100 a pair here in the United States. Nike and thousands of other manufacturers have been lured to set up business in Indonesia by the pitifully low wage level, along with the assurance by the Indonesian government that it will tolerate no strikes or independent worker associations. But as the Indonesian government itself admits in the article, it sets its wage purpose fully extremely low to only provide the minimum calories the worker need to survive each day. My friends, this is no different from how plantation owners though about feeding their slaves. Feed them enough so that they will not die on the job. In fact, I remember visiting the Auschwitz death camp and reading the sign above the entry gate that read ``Work will make you free.'' Nike would like you to believe that they are truly a great American company. Nike in fact has been spending over $250 million a year in advertising to sell you, the consumer, the message that they are a good American corporate citizen. Nike has virtually bought off the entire American sporting world. Just look at how many college coaches and athletes in the NCAA basketball tournament now being played have been paid to wear Nike's trademark, the Gold Swoosh. Your people across this Nation are literally killing people to acquire Nike products. The truth of the matter is, Nike does not produce one athletic shoe in this country, not one. It has shut down all its U.S. production while siphoning off billions of dollars in this marketplace through sales. But it employs 75,000 workers in places like Indonesia and China, hidden from view of the news media of this country. And they pay their workers exceedingly low wages, 10 cents an hour in China, 20 cents an hour in Indonesia, work them 7 days a week, under complete control of those employers. And yet though the shoes cost only $6 to make and ship to the United States from Indonesia, we end being asked to pay up to $150 a pair. So it is fair game to ask who is benefiting from this kind of production system? It is not the American worker who is no longer employed making Nike shoes. It is not the worker in Indonesia or China who earns poverty wages. Finally, it is not the American consumer, who is being gouged to pay outrageous prices for Nike. As Hakeem Olajuwon, the star basketball player from the Houston Rockets courageously pointed out when he refused to endorse Nike shoes, he said, I saw the prices go from $40 to $90 to $150, and in full cognizance that people were dying for these shoes, including inner-city kids, the kids that Nike was targeting with their inner-city role models. There is one sports figure with a conscience in this country. Thank God for that. We as American workers and consumers could do one better. We could stop buying Nike shoes until Nike pledges allegiance again to the workers of this country and to its producers around the world. Is it not time we put a little bit of conscience back into corporate America? Mr. Speaker, I include for the Record the New York Times article. [From the New York Times, March 16, 1996] An Indonesian Asset Is also a Liability (By Edward A. Gargan) SERANG, Indonesia.--Many days Tongris Situmorang, in his blue baseball hat with a large X on the front hangs around the gates of the enormous Nike sport shoe factory here, talking to friends leaving the assembly lines at the end of the work day. The gangly 22-year-old used to work inside the well-guarded gates, but five months ago he was dismissed for organizing workers to demand more than the 4,600 rupiah they are paid each day, about $2.10, the Government-dictated minimum wage. Then, after being dismissed, he was locked in a room at the plant and interrogated for seven days by the military, which demanded to know more about his labor activities. ``We went on strike to ask for better wages and an improvement in the food,'' Mr. Situmorang explained ``Twenty- two of us went on strike. They told us not to demand anything. They said we wouldn't get any money. But I have sued to get my job back.'' Low wages are a big attraction for foreign companies doing business in Asia as high labor costs in the industrialized nations make the manufacturing of many consumer goods uneconomical. Like a wave washing over Asia, labor-intensive factories have swept south and west as incomes and living standards have risen from Hong Kong, Taiwan and South Korea, across Asia to China, Vietnam and Indonesia. And across the region, businesses in developing economies are felling pressure from workers like Mr. Situmorang to lift wages. Clashes erupt between workers who want more and businesses and governments that fear that rising wages will drive away jobs to even-lower-wage countries. As strikes and worker-organizing attempts have increased here, the Government has taken a harsher line by cracking down on workers with police and military force. For some companies, like Levi Strauss, worker complaints, were enough to prompt it to leave Indonesia two years ago. But others, like Nike, whose shoes are made in 35 plants across Asia, have expanded in the region to take advantage of cheap labor. For the Indonesian Government, the long-term solution may be to find manufacturers of products that can support higher wages. ``Our strategy is to improve our products so we are not producing products that are made in China, Vietnam, India or Bangladesh,'' said Tunghi Ariwibowo, the powerful Minister of Industries and Trade. ``We cannot compete on wages with them.'' More than 5,000 workers churn out Nike shoes here, shoes that often sell in stores in Asia, Europe and North America for perhaps $100 a pair. Nike and thousands of other manufacturers have been lured to set up business in Indonesia by the low wages--and the assurance that the Government will tolerate no strikes or independent unions. Yet even at a little more than $2 a day, there is a widespread sense in Government circles that even that is too high for Indonesia to stay competitive. As the Government tries to hold down wages--wages the Government admits provide only 93 percent of the earnings required for subsistence for one person--strikes and worker organizing have increased. And with the increase in labor agitation have come harsher crackdowns by the Government. A spokeswoman for Nike in the United States, Donna Gibbs, said she was not aware of Mr. Situmorang's case or of the detention and interrogation of workers for a week. However, when pressed, she said, ``Our information is that workers were not held for a week.'' All the plants that manufacture Nike shoes in Asia, Ms. Gibbs said, are owned by subcontractors, mostly Koreans. Each subcontractor is required to adhere to a code of conduct drawn up by Nike, she said, and managers from Nike are involved in the daily oversight of subcontractors' operations, including not simply quality control matters, but the treatment and working conditions of the labor force. Nike's code of conduct, Ms. Gibbs said, requires compliance with all local laws, the prevention of forced labor, compliance with local regulations on health and safety and provisions of workers insurance. She said she was unaware of 13- and 14-year-old girls working at the Nike plant here. ``Certainly we have heard and witnessed abuses over time,'' she said ``and typically what happens is that we ask the contractor to rectify the situation and if it is not resolved we can terminate the business. Ms. Gibbs said Nike has four to six subcontractors in Indonesia, a number that varies according to production needs. She said the minimum monthly wage was 115,000 rupiah, about $52.50, although the average was 240,000 ripiah, about $110. For a pair of shoes costing $80 in the United States, she said, labor accounts for $2.60 of the total cost. ``The problem is that the minimum wage does not provide for minimum subsistence,'' an Asian diplomat here said. ``And beyond that, the companies don't always pay what is required by law. The level of unrest is not reported, but there are lots of reports from around the country of strikes.'' ``The philosophy of the minimum wage is to make sure the minimum calorie need per day is fulfilled,'' said Marzuki Usman, who heads the finance and monetary analysis body for the Finance Ministry and was the first chairman of the Jakarta Stock Exchange. ``That is the formula.'' On April 1, the minimum wage is to rise in many places to 5,200 rupiah, about $2.37. ``There are so many labor strikes,'' said Apong Herlima, a lawyer for the Indonesian Legal Aid Foundation who specializes in labor cases in Jakarta. ``Employers always call the police and they come and interrogate the workers. Then, the workers are fired.'' Because Indonesia's press treads carefully around sensitive issues--and social unrest is among the tenderest of subjects--it is difficult to gauge precisely the level of labor unrest. The Government reported that there were 297 strikes last year, although it did not provide the number of workers involved. Independent labor organizes insist the actual number is far higher. ``The number of strikes is increasing,'' said Leily Sianipar, a labor organizer in nearby Tangerang. ``Most factories don't actually pay the minimum wage. Garment factories should pay 4,600 rupiah each day, but there is usually underpayment. So there are strikes. We try to organize workers. The factory owners use the police and the military to crack down. They try to intimidate the workers.'' The Indonesian Government recognizes only one Government- sponsored union, the Federation of All Indonesian Workers Union. But most workers and independent activists maintain that the Government union does nothing to represent Indonesia's 40 million workers. ``Since they don't come from the bottom, and they aren't elected by the workers, there is no hope for the Government union,'' said Indera Nababan, the director of the Social Communication Foundation, a labor education group sponsored by the Communion of Churches of Indonesia. ``I don't think over 10 years there has been any considerable change. The workers have no rights here to argue for their rights.'' Not far from the Nike factory here, Usep, a lean man of 25, leaned against the cement wall of the tiny room he shares with his 19-year-old wife, Nursimi. Together, said Mr. Usep, who like most Javanese has only one name, the couple earn about $4.10 a day--or $82 a month. Of that, they must pay about $23 for the 6-foot-by-6-foot cement room they live in, with the remainder for their food and other needs. A single bare bulb dangles from the ceiling, its dim glare revealing a plain bed, a single gas burner, and a small plastic cabinet. Their room, one of a dozen in a long cement building, is provided with one container of water daily. If they want more water, each jug costs 100 rupiah, about 5 cents. ``Of course we're not satisfied with this,'' Mr. Usep said, his words coming quietly. ``We tried to talk to friends about this, but there is no response. Probably they are worried they will lose their jobs.'' It is workers like these whom Ms. Sianipar has been trying to organize for the last seven years, a task that entails the constant risk of arrest. ``If we have a meeting, the police take us to the station and want to know if we want to make a revolution,'' she said, a laugh breaking over her words. ``We had a meeting here last week and the police came. So we changed the topic of the meeting, but they took me to the station anyway. The police got angry and banged the table. But they let me go at 4 in the morning. They had the idea that we were doing underground organization.'' Still, she admitted, the attitude of the police has moderated somewhat over the years. ``Five years ago,'' she said, ``we would have had much more trouble.'' Not all foreign investors who use cheap Indonesian labor have ignored workers' complaints. In 1994, the American clothing company Levi Strauss withdrew its orders from a local garment contractor after reports that the management had strip-searched women to check if they were menstruating. But many factories that manufacture clothing, shoes or electronic goods for American companies are owned by Taiwan or Korean companies, and labor organizers contend that conditions in these factories are much worse than in factories directly owned by Americans. ``American companies are here because they have to pay very little,'' said an American who works for a private aid organization, but who did not want his name used. ``But American companies are not the worst violators of basic working conditions. The Koreans really stand out for poor conditions in their factories.'' Outside the Nike factory, Mr. Situmorang continues his vigil, waiting for a court decision on whether he can get his job back. ``I've gone to the labor department and the court,'' he said. He paused and sighed. ``I really don't think in the end I will get my job back. This is Indonesia.''

Ms. KAPTUR

Ms. KAPTUR. Mr. Speaker, I rise tonight on the topic of jobs in America and the trade deficit, an issue which, after 10 years of very hard work, has finally made it into the headlines during this Presidential primary season, and it could not have come too soon. Last week, in our local newspaper, the Toledo Blade, one of the headlines read, ``Trade Deficit Highest in 7 Years.'' In fact, last year, 1995, the amount of imports coming into this country versus exports going out ballooned to over $111 billion, the worst performance of this economy since 1987, and, in fact, last year's goods deficit, that means the part of the trade deficit that deals with hard merchandise, grew to $175 billion, an increase of over 5 percent from the prior year. That means we are digging ourselves deeper in the hole. Trade deficits like these have turned our country from being the largest creditor in the world, that means that people borrowed from us, rather we have become the largest debtor nation in the world, importing much more than we export and having to monetize, pay for those imports with our hard-earned dollars. Is it any surprise that the kind of lingering trade deficit has served to act as a downward push on wages in this country, contributing as well to the loss of millions of jobs across our country as we see not just low-skilled jobs but high-skilled jobs moving abroad and a general decline in our own living standards? And if you think about that for a second, with interest rates even at the level that they are today, is it not harder for you to afford a car than it was for your parents? That is because goods cost more here now. I just want to show you a chart, I will put it up here, which in the red, which is the part I want to reference here, shows what has been happening for the last 20 years in our country. We have not had a year where we have had more exports going out of our country than imports coming in here. In fact it has been getting worse and worse. Last year, 1995, will be worse than the year of 1994. In fact, if you look at our entire balance of payments, the measure of all of the inflows and outflows of capital, goods and services to and from our country, our position has been deteriorating, as this chart indicates, since the 1970's, largely as a result of a lack of domestic savings and investment here at home, but more important, the rising penetration of foreign imports into this country and the literal displacement of jobs in our country. I cannot tell you how many Members have come up to me on this floor since NAFTA's passage, which we fought so hard against. They said, ``Marcy, we lost 3,000 jobs in northern Alabama. We have lost 2,000 jobs in east Tennessee. We have lost 14,000 jobs in Florida,'' and the automotive parts companies of my State of Ohio, 1,000 jobs gone already just as a result of that one trade agreement and as well as the lack of access we have into other closed markets in the world. Much attention has been put on the impact of a long-term budget deficit in our country, and that is important. However, very little has been said about this structural trade deficit, the other pillar of the twin deficits on which our economic house and our futures stand. And I am very happy this has become a Presidential issue. It is being talked about in the Republican Party. It is being talked about in the Democratic Party. I guess it just goes to show that when you run for President, probably the most important power you have is to focus attention on something important. The trends are not encouraging. Since 1990, even though we cut our budget deficit by 23 percent and further cuts are expected in the coming years, our trade deficit has grown by 54 percent. At this rate, the trade deficit will overtake the budget deficit within the next 2 years, and, in fact, it already has. The same logic that is used to support cutting the budget deficit could be equally applied to the argument for cutting this trade deficit. Any borrower or buyer of a foreign good knows that debt has a price. The U.S. trade deficit technically represents a liability on our national balance sheet, a loan from a foreign seller or creditor that must be financed. As noted economist Wynne Godley has stated, the main causes for concern are the financial constraints that occur when countries become heavily indebted and the loss of national income that results from rising interest payments. In the past, even though you may go and buy a car and it may come from another country, you purchase it with your credit card, when you make those interest payments, those go to the foreign manufacturer. This is what I talk about when I say monetizing that debt. In the past, increased flows of foreign investments into our country as well as their purchases of our securities, our Treasury bills, were necessary to pay for our trade deficit. Now the willingness and capability of these foreign creditors, especially Japan, to continue these investments and purchases is on the wane. As foreign direct investment and purchases of our securities decrease, the United States will still need to attract foreign capital to pay for this deficit. If the trade deficit remains at the same level, by the year 2010 we will be paying the equivalent of 2.5 percent of the entire amount of goods and services produced in this country and interest payments and capital outflows to foreign countries. Now, the 2.5 might not sound like a lot, but it represents the amount by which this economy is growing. It is not enough to catapult us into the high standard of living we would hope for our people. Only with the goal of cutting our exploding trade deficit and making sure it remains a part of the Presidential race this year will we be able to cure the other part of the twin deficit that is causing the downward pressure on wages and living standards in this country.

Ms. KAPTUR

Ms. KAPTUR. I would very much like to be there. I want to compliment the First Lady, Hillary Clinton. I understand today she was in New York City somewhere sewing on a label, I hope it was a made in the USA label, to a garment in New York City. And we look forward to welcoming Secretary Reich to that very important hearing on sweatshops and what is happening to women workers in New York City who sew so many of the garments still made in this country that are worn by women across this country. Thank you so very much for being a part of that and for the kind invitation. Mr. Speaker, I include for the Record the article to which I referred. [From the New York Times, Feb. 21, 1996] Squeezing the Textile Worker (By John Holusha) Pisgah, AL.--Martha Smith cried as she left the Dover Mills plant of Andover Togs Inc. on a Wednesday afternoon late in January. Along with approximately 100 other people, she had lost her job sewing children's clothing. Now she is enrolled in a state-sponsored program to learn clerical skills. ``There's no more textile jobs around here,'' she said. ``They are all going to Mexico and overseas.'' Ms. Smith, who has lost three jobs due to plant closings, seems to have the evidence on her side. Two other sewing mills in this region of northern Alabama closed at about the same time, sending 550 people, most of them women, into the local labor market. The layoffs are not just a regional phenomenon. After four years of stability, employment in the apparel industry took a sudden plunge last year, falling by more than 10 percent, to 846,000, from 945,000 at the end of 1994. An additional 42,000 jobs vanished in the fabrics industry, which produces the raw material to make clothing, for a total shrinkage of 141,000 jobs--40 percent of all manufacturing jobs lost in the United States last year. Job losses like these provide grist to politicians with protectionist messages, especially in an election year. So while dismantling trade barriers benefits most consumers by lowering prices, it also deepens blue-collar anxieties in industries that are vulnerable to foreign competition. The new wave of job losses in the apparel industry, coming as they did soon after the passage of the North American Free Trade Agreement and the latest global trade accord, benefits candidates who say they want to save jobs and protect workers. Four years ago it was Ross Perot railing against free trade accords, and this year, the Republican populist, Patrick J. Buchanan, has enjoyed a surge in the polls with his attacks on free trade as a sellout of American labor. And while textile-plant closings have been a fixture of the economic scene in the small towns of the South and Northeast for nearly a quarter-century, the recent hemorrhage of jobs, though predicted by many economists, is devastating some areas. It is driven by two forces--government policy, which encourages free trade with low-cost apparel exporters like Mexico and Malaysia, and high technology, which helps big, profitable textile companies produce more cloth with fewer workers. ``We have lost on the order of 500,000 jobs in apparel in the past 23 years and we will probably lose another 40,000 to 50,000 this year,'' said Carl Priestland, an economist with the American Apparel Manufacturers Association. Most of the pain will be felt in small towns like Pisgah, named after the mountain that Moses climbed to get his first glimpse of the Promised Land. Locals fear that Andover Togs, Pisgah's biggest employer, will shut down its remaining operations, including lithography and engineering, in addition to the sewing plant it just closed. If that happens, 400 more jobs will disappear--and with them, the town's hopes for an economic recovery. ``I do a good business with people at the mill, so this is going to slow down the economy big time,'' said R.D. Mitchell, a former mayor who runs a Chevron service station that is one of the town's unofficial gathering spots. ``There are a lot of people being pushed out of jobs within a 20-mile radius of here,'' he added. ``People can't spend money they don't have.'' For all the financial turmoil in textile workers' lives these days, the industry itself remains a huge and profitable sector of the American economy. Output has grown steadily, from $32.8 billion in 1974, to $56.3 billion in 1984 and to $74.2 billion in 1994, the last year for which figures are available. Even after adjusting for inflation, the increase over the last two decades has been more than 33 percent. Profits in 1994 totaled $1.74 billion, or 2.7 percent of sales, half the 5.4 profit margin for all manufacturing. Broadly speaking, the textile trade consists of three sectors. Fiber manufacturers, the smallest of the three, spin cotton and other raw materials into threads for the fabric makers, which weave the threads into cloth for apparel producers to make into clothing. While it is profitable, the continued prosperity of the industry hinges in large part on its ability to squeeze out as many American jobs as possible from the production process. The two main sectors--raw fabrics and finished clothing--achieve that goal in two very different ways, cutting labor costs and automation. And industry experts say that outside attempts to stanch the bleeding may do more harm than good. Clothing manufacturers, swamped by a flood of cheap imports from Asia and elsewhere that have grabbed 50 percent of the American market, up from 20 percent two decades ago, stay profitable by exporting jobs to low-wage Latin American countries like Mexico and the Dominican Republic. These companies have been unable to exploit America's vaunted technological superiority to offset their foreign rivals' wage advantage because no one has been able to develop an economical alternative to the old-fashioned sewing machine. Automated machines have a hard time handling soft, floppy cloth, and the vision-recognition systems needed to match patterns at seams, collars and cuffs are far too expensive for the low-margin apparel business. In an integrated apparel factory, one that converts raw fabric to finished clothes, 50 percent of the jobs are sewing machine operators, 86 percent of whom are women. ``You can automate design, you can automate pattern setting and cutting, but sooner or later you have to push fabric through a sewing machine,'' Mr. Priestland said. ``That's still the bottleneck.'' And that is where governmental policy comes in. Congressional approval of the North American and world trade accords in 1994 and 1995 made it much easier for American corporations to bring in goods from factories in third world countries, notably Mexico, by moving to eliminate quotas on imported apparel. The search for cheap labor is nothing new. Many of the mills that are closing now migrated to impoverished regions of the rural South decades ago from the relatively prosperous Northeast. Even today, says David Thornell, director of the economic development authority of Jackson County, an economically depressed region that includes Pisgah, many of the factory workers here till the fields part time to make ends meet. But with the factory idle, farming alone will not pay all the bills, and residents are bitter. ``They pay those people down there a dollar and a nickel an hour,'' said Jim Mabry, another Pisgah resident. ``Then they ship the clothes back here for finishing so they can call them American-made. Andover Togs, which is based in New York, says it had little choice but to open its factory in the Dominican Republic. ``I don't think we have ever seen a retail environment this sour,'' said Alan Kanis, the company's chief financial officer. He added that the company's major customers, discount chains like Wal-Mart and Kmart, were major importers, forcing the company to keep a tight rein on its costs. David Buchanan, associate dean of the college of textiles at North Carolina State University, predicted more mills would shut down. The trend could turn out-of-the-way places like Pisgah into ghost towns, just as many farms villages in the upper Midwest faded into history when farming became mechanized. ``Historically, the role of the textile and apparel industry has been to provide employment for the otherwise unemployable,'' Mr. Buchanan said. ``But that has been changing. If there is no work, the sons and daughters will move away, the way they did in farming. If there is no reason for a town to exist, it will go away.'' If American apparel makers are surviving by hiring cheap labor overseas, the other big component of the textile industry, the companies that weave the cloth and fabric, is thriving by applying the latest technology at home. A visit to the Cone Mills Corporation plant in Greensboro, N.C., shows the strides in productivity that American fabric makers have made in recent years. In the weaving room, a total of 416 looms pump out 12,000 square yards of denim every hour, nearly 50 percent more than the 1,000 older machines that they replaced. Yet they are so much easier to operate that only about 20 workers are needed to tend them, about one for every 21 looms and a tiny fraction of the 400 or so workers that handled the previous generation. Not only that, but weaving technology is about to take a major step forward. The projectile looms in use now can insert 258 threads a minute; new air-jet machines just now coming onto factory floors can process 745 a minute, nearly three times as many. Cone plans to replace its older machines with the more advanced models but will not increase its production capacity, since little growth is seen in the American market. ``We'll just have fewer looms and fewer people,'' said Patrick Danahy, Cone's president. The combination of faster machines and fewer people explains the decline in employment in the fabric industry from more than 700,000 in the late 1980's to 625,700 in January, even as fabric output increased. Although the people in Pisgah are unhappy when their jobs depart for Caribbean nations like the Dominican Republic, the location is good news for the American fabric industry because the new factories there are more likely to buy cloth from them rather than their Asian competitors. ``Eighty percent of clothing imports from Mexico and the Caribbean are made of American fabric,'' Carlos Moore, executive vice president of the American Textile Manufacturers institute, said. ``That explains why we have been able to supply a lot of fabric in the face of slow growth and imports.'' And though the recent liberalization of world trade seems to be accelerating the exodus of apparel jobs from the United States, Mr. Moore said it might also provide an opportunity to increase American raw-textile exports. ``Most countries have traditionally protected their textile industries, but now they may be forced to open up,'' he said. Moreover, some people question whether the North American Free Trade Agreement and other trade pacts should be blamed for the flight of jobs abroad. Without the trade agreement, Mr. Danahy of Cone Mills said, ``Both the apparel and textile jobs would have gone to Bangladesh and elsewhere in the Far East. ``With Nafta in place,'' he added, ``the textile complex on this continent is more competitive.''