Donald Manzullo

Mr. MANZULLO

Mr. MANZULLO. Mr. Speaker, temporary tax relief should not be offset with permanent tax increases that will stifle foreign direct investment into this country. The Alternative Minimum Tax is a mistaken tax policy. Originally designed to tax the super-rich, it now covers many in the middle class, particularly those with large families, because of inflation. Without relief, 19 million Americans will see a tax increase of $2,000 next year. However, to temporarily correct this error by permanently raising nearly $7 billion from foreigners who invest in the United States simply makes a bad situation worse. We are finally attracting more foreign investment into the United States. In 2007, foreign direct investment rose to its highest levels in seven years, reaching over $204 billion. U.S. subsidiaries of companies headquartered abroad now employ 5.3 million Americans, of which 30 percent work in the manufacturing sector. Nineteen percent of all U.S. exports came from these firms and they reinvested nearly $71 billion back into their U.S. operations. In Illinois, U.S. subsidiaries of companies headquartered abroad employed over 226,000 workers, of which over 61,000 were in the manufacturing sector. In fact, there are over 30 U.S. subsidiaries of companies headquartered abroad that employ over 6,000 workers in the northern Illinois district that I am proud to represent. The offset used to ``pay for'' part of this AMT bill will strongly discourage future foreign investment in the United States and will halt any future progress on negotiating tax treaties with other countries. For example, Nissan USA, which is owned by Nissan headquartered in Japan, borrows money from their finance unit based in the Netherlands. Under our current tax treaty with the Netherlands, no tax is applied. However, under this bill a new 10 percent tax would be applied to this transaction. The Netherlands will then most likely view this as an abrogation of our tax treaty and will either seek renegotiation or outright annulment, thus hurting our overall trade with the Netherlands. This is all a silly exercise. We all know how this will turn out because the Senate will not agree to these offsets. However, this bill sends a chilling message to our friends overseas that they will be subject to a higher tax next year because this is the second time that the Democratic Party has proposed this offset. Vote no on H.R. 6275 to preserve jobs in your district and to send a signal that the U.S. remains open to foreign direct investment.

Mr. MANZULLO

Mr. MANZULLO. Mr. Speaker, when Jefferson was given the duty and obligation of drafting the Declaration of Independence, he could have turned to the Revolutionaries of lower Europe, the followers of Russo, which led to the Jacobites and the reign of terror who believe that man is the center of the universe and man is the ultimate judge of what is truth. But instead, Jefferson turned to the writings of Blackstone and Locke. Ms. Blackstone, the great jurist of England, examined the laws of England and laid them side by side with the biblical statements to come up with something called the Doctrine of Natural Law. And Blackstone said, When the supreme being formed the universe and created matter out of nothing, he impressed certain principles upon that matter from which it could never depart, without which it would cease to be. This will of a Maker is called the Law of Nature for as God, when he created matter and did it with a principle of mobility, established certain rules for the perpetual direction of that motion so when he created man and indued him with free will to conduct himself in all parts of life, he laid down certain immutable laws of human nature. Considering the Creator only as a being of infinite power, he was able unquestionably to prescribe whatever laws he placed to his creature, man, whoever unfit or severe. But as he is also a being of infinite wisdom, he has laid down only such laws as were founded in those relations of justice. These are the quotes of Blackstone. It was the thoughts of Blackstone, in fact many of the words that were incorporated directly into the Declaration of Independence, and that great document set forth not only our severance from Great Britain, but also a statement as to the source of laws in this country that God is the source of liberty, that man is given the power to form governments for the purpose of protecting those rights that God gives. Jefferson took that knowledge, sat down, inscribed that into the Declaration, and that's what forms the basis of the law of America. It's the law of nature and of nature's God.

Mr. MANZULLO

Mr. MANZULLO. Madam Speaker, with the recent firings at the Air Force, I am greatly concerned about the aerial refueling tanker contract that was awarded to a consortium dominated by Airbus. In its internal evaluations, the Air Force gave almost identical scores to both sides. Yet, they awarded this contract to a company that has never delivered a tanker with a refueling boom to be assembled in a factory that does not yet exist. EADS has pledged to incorporate about 60 percent U.S. content in its tanker. Yet, Boeing already has 85 percent U.S. content in its tanker. EADS has promised to create up to 48,000 jobs to Americans. However, a recent analysis concluded that EADS' job figure is closer to 14,000. The same study found Boeing would create at least twice as many U.S. jobs. The sad truth is that the bulk of the EADS tanker will be built in Europe. Yet, current policies prohibit the Pentagon from considering the U.S. industrial base during a major defense acquisition. This must change. We must have the ability to build the weapons necessary to defend ourselves to be a great nation. Even Adam Smith agrees.

Mr. MANZULLO

Mr. MANZULLO. Mr. Chairman, I would like to thank my colleagues on the House Armed Services Committee, specifically my good friend, Representative Duncan Hunter of California, for including a provision in the Fiscal Year 2009 Defense Authorization bill that finally provides for consideration of our Nation's defense industrial base when contracting officials evaluate major Federal defense contract proposals. Few people are aware that the Pentagon is prevented by law from including defense industrial base considerations when deciding to award a major defense contract. A contract award determination is made primarily by examining which party has the ``best value'' in terms of price, quality, quantity, and delivery. However, how many jobs a particular contract would produce or retain in America or how many suppliers would be able to stay in business in America because of a particular contract is currently not part of the ``best value'' evaluation by the Pentagon. Most believe that the Buy American Act protects the interests of American workers. However, because of a series of Memorandums of Understanding, MOUs, signed years ago between the Pentagon and other foreign defense agencies, a product can be made completely in Europe and be considered as if made in America and thus compliant with the Buy American Act. In return, U.S. defense articles are supposed to be considered by European procurement officials on the same grounds as European products. However, Europe protected its economic interests in these agreements by including European defense industrial base protections as one criterion in their source selection process. This didn't used to be a problem in the past. However, with the consolidation of major prime defense contractors in the United States and the relatively recent creation of the European Aeronautic Defense and Space Company, EADS, there has been more and more conflict in major U.S. defense procurements. Section 805 of H.R. 5658 seeks to copy Europe's example. It simply allows the Pentagon to consider impacts on the U.S. industrial base during source selection for major defense acquisition programs. This section also authorizes defense acquisition officials to impose penalties on a contractor who misleads the Government regarding potential domestic industrial base impacts. The bill also asks the Secretary of Defense to notify congressional defense committees at least 30 days before requesting a proposal for any major defense acquisition program that will not use a domestic industrial base evaluation factor during the source selection process. It also includes second and third level suppliers as part of the defense industrial base because the health of this sector of the economy cannot be measured solely by looking at the stock price of the large prime defense contractors. As someone who voted for every free trade agreement since being elected to Congress in 1992, this section is not protectionism. Back in 1776, Adam Smith argued in his celebrated ``Wealth of Nations''; that ``(i)t is of importance that the kingdom should depend as little as possible upon its neighbors for the manufactures necessary for its defense.'' He supported a bounty--or a tax--on the export of British sailcloth and gunpowder to prevent other nations and potential enemies from benefiting from Great Britain's advantage in these products. If the founder of modern-day capitalism and free trade supported an exception to the free flow of trade in defense goods, then domestic sourcing preferences to protect our national security and defense industrial base must be considered consistent with the very foundation of free trade and capitalism. Congress has a duty to be concerned with our nation's ability to build the weapons and equipment necessary to defend itself. Any argument founded merely on shopping for the best value without considering the larger defense industrial base will leave our great nation exposed and vulnerable. A nation that cannot produce the materials necessary for its defense will eventually become a second- rate power. Now, some analysts have argued that we should not press for more domestic sourcing of defense articles because Europe and other nations buy more U.S. defense technology that we buy from them. These statistics, however, fail to account for the offsets in defense sales required by other governments, including our friends in Europe. According to a 2007 report entitled Offsets in Defense Trade prepared by the Bureau of Industry and Security of the Department of Commerce, over 98 percent of all U.S. defense sales to Europe were ``offset'' from 1993 to 2006. In other words, for every dollar a European government spent on U.S. defense equipment, the U.S. prime defense contractors had to provide 98 cents in industrial compensation arrangements to that government. These compensation arrangements range from requiring re-locating a share of the production of that defense item to that country to marketing that country's goods in the United States. However, the United States is prohibited by law to require of a foreign defense contractor to ``offset'' part of the cost of the proposed acquisition. thus, our two-way defense trade with Europe is already heavily weighted in their favor. Finally, Section 805 of H.R. 5658 will not launch a trade war because there have been several occasions in the past when European governments refused to buy from American companies because of their own defense industrial base concerns. In 2003, Pratt & Whitney lost a bid to EuroProp International (EPI) to supply the engine for the A400M European military troop transport plane despite the fact that their initial bid was 20 percent lower, they had a higher quality engine, and they committed to build a new assembly line in Europe and include 75 percent European content in the engine. According to the Financial Times on June 13, 2003, Airbus effectively declared Pratt & Whitney the winner until European governments intervened and promised financial support to EPI so it could drop its price and clinch the deal with a redesigned engine in order to keep all the work in Europe. Similarly, in 2003, when Italy wanted to build a new fleet of search and rescue helicopters, Skirosky and MD Helicopters were interested in bidding on the contract but were not even given the opportunity. The Italian government decided instead to award the contract without any competition to their national helicopter company--Augusta/Westland--on the grounds of ``homeland security.'' Mr. Chairman, encouraging the Pentagon to consider the defense industrial base as one factor in their contract decision-making process will help us safeguard over the long-term the knowledge and innovation that make our defense industry the best in the world. I urge my colleagues to support H.R. 5658 and, in particular, Section 805, throughout the legislative process.

Mr. MANZULLO

Mr. MANZULLO. I have no more speakers. Can I inquire of Mr. Wu if he has any more speakers?

Mr. MANZULLO. I'm ready to yield back the balance of my time, if the gentleman from Oregon is.

Mr. MANZULLO. Mr. Speaker, I yield back the balance of my time.

Mr. MANZULLO. Madam Speaker, I yield myself as much time as I may consume. Today, we rise to offer our heartfelt condolences and sympathies to the people of China for the horrific loss they suffered as a result of the gigantic earthquake that struck Sichuan Province in southwestern China on May 12 of this year. The 7.9 earthquake struck without warning during the busiest time of the day when schools and office buildings were full of people. And as Congressman Wu states, the toll of the dead has not yet been completed, except we know it remains in the tens of thousands, including those that remain missing. At least 10 to 12 million people remain displaced, and we all saw with horror on television the school that had collapsed on over 900 children on that one particular site. I want to thank Mr. Wu for sponsoring this resolution so that the House of Representatives can stand with the people of China in their hour of need. I also want to commend the American people for showing their generosity in pledging humanitarian support for the victims. In America, the sense of loss is perhaps felt strongest in the Chinese American communities where loved ones pray and hope for positive news from across the Pacific. Madam Speaker, I chaired the U.S.-China Interparliamentary Exchange for 7 years, and I'm now the vice-chair. I had the opportunity to travel extensively in China, including the Chengdu area in 2005, as part of our official business. To see the utter destruction on television comes as a complete shock. I echo the words of the President in saying that we admire the spirit and the character of the Chinese people as they desperately strive to put their lives back together. I also want to commend the Chinese Government for not being embarrassed or too proud to seek out and receive help from American resources. I only wish that the Government of Burma were as open under these particular and similar circumstances. I urge my colleagues to support this resolution. Madam Speaker, I reserve the balance of my time.

Mr. MANZULLO. I recognize Mr. Smith of New Jersey, ranking member of the Subcommittee on Africa and Global Health, for as much time as he may consume.

Mr. MANZULLO

Mr. MANZULLO. Mr. Speaker, I yield back the balance of my time.

Mr. MANZULLO. Mr. Speaker, I yield myself such time as I may consume. I rise in support of House Resolution 1194, which reaffirms America's support for the Government of Lebanon and condemns the violent Islamic group Hezbollah and its state sponsors, Iran and Syria, for undermining the sovereignty and independence of Lebanon. For over two decades, Hezbollah and its state sponsors have done everything in their power to destroy any hope for a free and democratic Lebanon. In response, some have tried to compromise with Hezbollah to incorporate it into the Lebanese electoral system, to pretend that it is a group of Lebanese freedom fighters instead of a wholly-controlled subsidiary of Iran and Syria, to permit it to arm and re-arm in violation of U.N. Security Council resolutions, and to excuse its relentless attacks and incitement against America and Israel. Mr. Speaker, America and other responsible nations must stop Hezbollah's current attempt to rule by the gun. We must support efforts in the U.N. Security Council and elsewhere to ensure that Hezbollah is disarmed and that Iran and Syria are barred from rearming that group. Moreover, we must hold Iran and Syria accountable for the continuing efforts to spread violence and to undermine our allies in the Middle East, including Lebanon, Iraq, and Israel. Mr. Speaker, Iran and Syria continue to start fires throughout the region only to disingenuously step forward and offer to put them out for an unconscionable price. We must cease falling prey to their deception, and we must stop their deadly behavior, which undermines the security of Lebanon and the entire world. I thank my good friend and colleague from California, Chairman Berman of the Foreign Affairs Committee, for introducing this resolution. Mr. Speaker, I yield as much time as he may consume to the gentleman from Illinois (Mr. LaHood), an esteemed member of the Committee on Appropriations. (Mr. LaHOOD asked and was given permission to revise and extend his remarks.)

Mr. MANZULLO. Mr. Speaker, I yield such time as he may consume to the gentleman from Illinois (Mr. LaHood).

Mr. MANZULLO. I am prepared to yield back. I want to commend the gentleman for his impassioned speech. I thank you for the things you have said this afternoon in this Chamber.

Mr. MANZULLO

Mr. MANZULLO. Mr. Speaker, today is a great day. When others talk about a dysfunctional Congress or claim that members of different political parties can't work together, they ought to look at this bill. Today, the House votes on the Security Assistance and Arms Export Control Reform Act of 2008 (H.R. 5196) that we debated on Tuesday. Subtitle A of Title I of H.R. 5916 has been in the making for the past 18 months when I first learned of the complaints from industry regarding the immense backlog of defense export license applications at the State Department. The Executive Branch, both sides of the House Foreign Affairs Committee, industry, and Non-Governmental Organizations, NGOs, interested in non-proliferation all had input into this legislation. Last year, I joined with Representatives Joe Crowley of New York and Earl Blumenauer of Oregon to establish the Congressional Export Control Working Group. We educated Members of Congress and their staff on the importance of export control modernization efforts to both our national and economic security. Export control modernization is extremely important to the constituents I am proud to represent in the 16th District of Illinois. This area of the country is one of the most heavily industrialized Congressional districts in the Nation. We make everything from nuts and bolts to the advanced electrical system for the new Boeing 787, the Dreamliner. Many of the products and technologies produced by the manufacturers I am so proud to represent are regulated under U.S. export control law. When I was first elected to Congress almost 16 years ago, a manufacturer from northern Illinois came to me for assistance in navigating the regulatory process for selling their product overseas. Ever since that first experience, I have been dedicated to modernizing our Nation's export control system. I am continuing to work on policies that will enhance U.S. national security, strengthen our defense industrial base, and boost U.S. competitiveness. One piece of that puzzle is being considered here today. The Security Assistance and Arms Export Control Reform Act of 2008--which I am proud to have co-sponsored--contains legislation (Subtitle A of Title I entitled the Defense Trade Controls Performance Improvement Act of 2008) I co-wrote along with my good friend and colleague from California, Representative Brad Sherman who is the Chairman of the Terrorism, Non-proliferation, and Trade Subcommittee. This legislation will reduce defense trade license processing times, create a spare part waiver for our closest allies, and make licensing of defense items more transparent and predictable. These process improvements will make U.S. defense manufacturers in every category, including space, more competitive in the international marketplace. No longer will they have to fear being shut out of foreign markets or products because of a taint from the International Traffic in Arms Regulations, ITAR. The bill will modernize the Federal Government's inefficient export control policy while strengthening national security and helping American companies sell more defense-related goods and services overseas to our allies. H.R. 5916 requires the Directorate of Defense Trade Controls, DDTC, at the State Department to hire more staff to reduce the backlog of license applications that impedes legitimate trade with our allies without compromising national security. The last time I checked, the State Department has only 42 licensing officers. By 2010, this legislation requires adequate staff and resources at the State Department to review and process defense trade licenses in a timely manner. This legislation creates a ratio of at least one DDTC officer for ever 1,250 applications by 2010. The independent Congressional Budget Office, CBO, estimated that this provision would require the hiring of 35 additional licensing officers. H.R. 5916 also requires DDTC to assign no less than 3 individuals by fiscal year 2009 to review applications for commodity jurisdiction determinations. This is one area of export controls that is extremely complex and time consuming--determining whether or not a particular widget is a commercial dual-use item or a munition. Having specialized personnel dedicated to this task will be extremely helpful in improving the processing of these determinations. The legislation also increasing the transparency of commodity jurisdiction determinations with the publication of those decisions on the Internet. This will help companies know in advance whether or not their particular product would fall into a commercial or munitions category. The legislation also creates a series of performance goals for DDTC: No longer than 60 days to process a defense trade license; 30 days to process a defense trade license for close allies; and 7 days to process a defense trade license from our close allies in support of combat operations or peacekeeping or humanitarian operations with U.S. Armed Forces. This in no way implies forcing a premature decision--these are simply goals to achieve that have already been vetted with the Executive Branch. All tolled, CBO scored these personnel enhancement as costing $6 million in 2009 and $31 million over the next 5 years, which is a relatively modest price to pay to insure a vibrant and growing U.S. aerospace export industry. In 2007, the U.S. exported nearly $97 billion worth of aerospace products, producing a $60 billion positive trade balance in an otherwise grim trade picture. Nevertheless, H.R. 5916 also requires a report within 90 days on possible means for DDTC to achieve 100 percent self-financing. H.R. 5916 creates a special licensing authorization for U.S. manufactured spare and replacement parts or components in connection with defense items previously lawfully exported to our closest friends and allies. This will help free up time of DDTC employees to go after more significant threats to our national security. Finally, the bill augments the input of the private sector Defense Trade Advisory Group, DTAG, into the State Department's defense trade agenda. In conclusion, the Security Assistance and Arms Export Control Reform Act of 2008 streamlines the export control process, reduces the application backlog, and allows greater scrutiny on sensitive exports that could harm our country. It will better protect our Nation while helping U.S. companies sell more goods and services to our allies, creating more jobs for Americans. I appreciate the Foreign Affairs Committee's bipartisan efforts on this issue, particularly Chairmen Berman and Sherman and their respective staffs, and I urge my colleagues to support H.R. 5916.

Mr. MANZULLO

Mr. MANZULLO. I yield 3 minutes to the gentleman from New Jersey (Mr. Smith).

Mr. MANZULLO. Mr. Speaker, it's not without irony that just this past week Congressman Joe Crowley and I, representing the House, and Senators Feinstein and McConnell, representing the Senate, the other body, were at the White House for the signing of the bill that awarded the Congressional gold medal to Aung San Suu Kyi, and it was a very interesting moment there. The First Lady joined the President at the bill signing, which was quite unusual. And the First Lady, the day before, had actually conducted a press conference, which is quite unusual for her, talking about the untold suffering that is occurring in this country. And while we discussed the issue, it was apparent the intensity with which the President and the First Lady, and indeed the entire Nation is viewing the impact of the fact that the junta in Burma simply would not allow humanitarian aid to flow into that country. And so at the time, when we honor somebody with the Congressional Gold Medal, somebody who represents a bulwark of freedom and democracy, the country gets hit with this horrible tragedy. Our purpose here today is simply to encourage the junta to follow the humanitarian strain which is written in the soul of every individual, and that is to set aside the politics, to allow the American aid that is available and, indeed, world aid that is available, in order to alleviate the suffering.

Mr. MANZULLO. I have no further speakers. I yield back the balance of my time.

Mr. MANZULLO

Mr. MANZULLO. Mr. Speaker, we have a unique opportunity today to improve national security, support our foreign policy interests, and help American manufacturers. H.R. 5916 is a product of nearly 18 months of work. We closely worked with the executive branch, the business community and non-proliferation nongovernment organizations. Without this legislation, foreign customers will continue to search out products that are ITAR-free to avoid being entangled in U.S. export control laws. The process improvements in this bill will make U.S. manufacturers more competitive in the international marketplace, creating and retaining American jobs, and supporting economic growth here in the United States. This legislation permits the State Department's Directorate of Defense Trade Controls to hire more staff, reducing the backlog of defense trade license applications and improving our scrutiny of the most sensitive technologies. The bill creates a special licensing authorization for American-made spare and replacement parts. It also establishes some goals for licensing processing, including a 7-day deadline for defense trade licenses for those countries who support our combat, peacekeeping or humanitarian operations. I appreciate the Foreign Affairs Committee's efforts, particularly the outstanding leadership of my good friend from California, Mr. Sherman, on this very delicate issue. I urge my colleagues to support this bill.

Mr. MANZULLO

Mr. MANZULLO. Madam Speaker, I rise today to honor Mercy Health System for receiving the highly prestigious Malcolm Baldrige Award yesterday at a special White House ceremony with the President. This award was created by Congress in 1987 in honor of former Commerce Secretary Malcolm Baldrige who had a passion for instilling quality and excellence in U.S. products and services. The award recognizes those in the private sector that help improve quality and productivity. It honors U.S. companies and non-profits for organizational innovation and performance excellence. Mercy Health System started 18 years ago as a stand-alone hospital and transformed into a vertically integrated health system with 63 facilities serving 24 communities throughout southern Wisconsin and northern Illinois. Mercy now sees over 1 million patients annually, and employs 3,856 partners, 285 of whom are employed physicians. Mercy has added nearly $1.1 billion in industry economic sales, which has created an additional indirect 1,200 jobs in their service area. In the 16th District of Illinois, Mercy has a 77-bed acute-care hospital in Harvard, Illinois, along with 17 health care clinics in McHenry County, Illinois. It is obvious that Mercy Health System did not reach these achievements by resting on its laurels. They have met the challenge of growth by developing a holistic approach to quality and a commitment to organizational excellence. Their actions back up their Four Pillars of Excellence: Quality, Service, Partnering, and Cost. I am impressed by their servant-leadership model as exemplified by Javon Bea, President and CEO of Mercy Health System. Madam Speaker, I am proud to represent the employees and the patients of the Mercy Health System. They richly deserve to share in the high honor of the Malcolm Baldrige Award.

Mr. MANZULLO

Mr. MANZULLO. Madam Chairman, I rise in reluctant opposition to the SBIR/STTR Reauthorization Act (H.R. 5819). I am a long-time supporter of the Small Business Innovative Research, SBIR, and the Small Business Technology Transfer, STTR, program because it requires federal agencies with at least a $100 million research and development, R&D, budget to set aside a certain percentage of awards for small firms. The SBIR program was created in 1982 because small businesses--the most innovative sector of our economy--received very few R&D awards. Almost the entire federal R&D budget back then went to large firms and academic institutions. There are many good provisions in H.R. 5819. Section 102 increases the small business set-aside in the SBIR program from 2.5 percent to 3 percent. The SBIR awards come in three phases--Phase 1 is for start- ups; Phase II is for follow-on work; and Phase III is for commercialization of the product either in the form of government procurement or for sale in the marketplace. Section 103 increases the maximum award in Phase I from $100,000 to $750,000. For Phase II awards, the maximum award goes up from $300,000 to $2.2 million. There are no grant dollars for the Phase III or commercialization phase. In the past, few federal agencies had any interest in Phase III. However, H.R. 5819 contains several provisions, most particularly in Title IV, to encourage commercialization of products developed with SBIR awards. However, Section 201 of H.R. 5819 opens up more of the SBIR program to small firms that have significant investments from venture capital (VC) companies. For the purposes of the SBIR program, a small firm would be considered to be independently owned and operated even with a majority share owned by VC firms. VC investments, unlike a bank loan, make the ``owner'' of the company no longer the true leader of the firm if venture capitalists own more than 50 percent of the firm. In other words, he or she doesn't control the ultimate destiny or direction of the company--the ``owner'' has to take ultimate direction from the VC firms. The small business is no longer independently owned and operated. Thus, if a small company receives venture capital even from multiple sources to pursue Vaccine A but then sees the research going in a different direction to develop Vaccine B, the ``owner'' of the company will be compelled to complete the research on Vaccine A for which he or she received funding unless the ``owner'' receives permission from the venture capitalists to pursue Vaccine B. The only limitations on VC investments in Section 201 for SBIR firms are that (1) no one single VC firm can own a majority of the tech company applying for a SBIR grant; (2) the VC firm does not control a majority of the seats on the tech company's board of directors; (3) only ``small'' VCs, as defined in the bill as those VC firms employing 500 employees or less, can participate; and (4) a ``corporate-owned'' VC firm can only own up to 10 percent of a SBIR tech company and that a SBIR tech company can only have one investment from a corporate VC. My concerns are that the first two limitations can be easily evadable by creative VCs that set up multiple firms. The third limitation dealing with a small business definition of a VC encompasses almost every VC in the nation. The Small Business Administration (SBA) currently defines small venture capital firms as those with less than $6.5 million in annual receipts. There is no need to change the small business definition of a VC. In Section 110, H.R. 5819 also allows firms to apply directly for Phase II awards, bypassing the Phase I process. In my opinion, combining three key elements of H.R. 5819--dramatically higher awards (Section 103), allowing almost every VC in the nation to own more than a majority of a SBIR firm (Section 201), and bypassing Phase I (Section 110)--sets up a stage where VC-owned ``small'' firms will gobble up most of the money in the SBIR program. Then, there would be a dramatic drop-off in the number of truly very small and independently-owned companies in the SBIR program, particularly those looking for Phase 1 start-up funding. During my tenure as Chairman of the House Small Business Committee, I spent a lot of time and effort trying to solve the specific problem of the eligibility of some small businesses with venture capital investments to participate in the SBIR program at the National Institutes of Health (NIH). After the Defense Department, the NIH is the second- largest spender of R&D funding in the federal government. This issue of the role of VC investment in SBIR companies seems primarily confined to NIH. Section 201 in H.R. 5819 tries to solve a problem that is grossly exaggerated. It is a myth that small businesses with VC investments are unable to participate in the SBIR program at NIH because of a misinterpretation of the law by the SBA. In an impartial Government Accountability Office (GAO) study that was released in 2006, the GAO discovered that 17 percent of NIH SBIR awards, accounting for 18 percent of the dollar value, went to small businesses with VC investments in Fiscal Year 2004. These small firms had no problem in complying with SBA guidelines. Nevertheless, I tried to proffer a compromise to establish a two-year pilot SBIR-like program to set-aside 0.5 percent of NIH R&D funding for smaller firms that receive a preponderance of their funding from VCs and do not own or control their company. Unfortunately, my compromise was rejected by NIH and by the biotech and VC industries. However, the solution contained in Section 201 is a dramatic overreach in the effort to solve this specific problem with NIH. Finally, the Bush Administration shares my concern on this issue. According to the Statement of Administration Policy issued on April 22, 2008, ``the Administration believes that H.R. 5819 goes too far in relaxing constraints on venture capital ownership of firms receiving SBIR and STTR funds, which could lead to inappropriate subsidization of well-capitalized businesses that do not warrant funding through a set- aside program. The Administration is reviewing whether venture capital funding of businesses receiving SBIR and STTR funds could be expanded through reforms of SBA regulations without inappropriately providing Federal commercialization subsidies to well-capitalized businesses.'' Thus, for these reasons, I urge my colleagues to oppose H.R. 5819.

Mr. MANZULLO

Mr. MANZULLO. Madam Speaker, I move that the House do now adjourn.

Mr. MANZULLO. Madam Speaker, I object to the vote on the ground that a quorum is not present and make the point of order that a quorum is not present.

Mr. MANZULLO

Mr. MANZULLO. Madam Speaker, I yield myself such time as I may consume. I rise today in support of H. Res. 854 on the opening of Bad Arolsen Holocaust archives. I would like to thank the author of this resolution, Congressman Hastings, as well as Ranking Member Ros- Lehtinen, Congressman Wexler, and Congressman Kirk, who have fought for opening access to the Holocaust archives in Bad Arolsen, Germany. The archives there have been the largest closed Holocaust-era collection of documents in the world, containing millions of records about the fates of over 17 million victims of Nazi Germany. The archive became open to the public in November of last year after 11 countries of its governing body ratified the agreement that allowed the collection to become open and for those documents to be transferred to the United States Holocaust Memorial Museum and Yad Vashem in Israel. Open access to these records will provide many Holocaust survivors and their families with the information about their loved ones. Additionally, it will present researchers and scholars with materials necessary to enhance the public knowledge about the Holocaust. Now that the archive is open and the U.S. Holocaust Museum is able to answer requests, it is very important that the survivors and their family members are aware of these services and are able to immediately submit requests for information about their loved ones. In conclusion, I urge Members from both sides of the aisle to support H. Res. 854. Madam Speaker, I reserve the balance of my time.

Mr. MANZULLO. Madam Speaker, I continue to reserve the balance of my time.

Mr. MANZULLO

Mr. MANZULLO. Madam Speaker, I reserve the balance of my time.