Michael Oxley

Mr. OXLEY

Mr. OXLEY. Mr. Speaker, today's introduction of a telecommunications law rewrite is a landmark compromise that culminates years of work. I'm proud to be an original cosponsor of the Communications Act of 1995. The bill has already attracted significant support among Democrats, thanks to the leadership of subcommittee chairman Jack Fields. America is poised to lead the world in communications technology. This procompetitive, anti-regulatory legislation will help us make the most of the greatest economic opportunity in the history of the world. The United States should pursue two basic strategies during this transition into the information age: to increase competitiveness among U.S. companies to inspire more choices, better programming, and more efficient service for U.S. consumers, and to export aggressively so U.S. companies will prosper and hire American workers. I will offer a free trade amendment to the bill to repeal restrictions on foreign investment that date back to World War I. The foreign ownership restriction is a telegraph law that has no place in a telecommunications age. Section 310(b) of the 1934 Communications Act prohibits any foreign entity from holding an investment of more than 25 percent in U.S. broadcast facilities or common carrier companies. It was passed to guard against foreign sabotage when a limited number of information sources existed. When U.S. firms seek to sell telecommunications goods and services abroad, foreign governments point to U.S. market restrictions as justification for theirs. This is a distressing reality for U.S. companies seeking to create new jobs here at home. export industries, expected to account for one-sixth of the domestic economy by the year 2000. The global telecommunications services industry alone will generate almost $1 trillion in revenues by the end of the decade. I look forward to a constructive hearing and markup process on this bill, and I believe we will achieve our goal of enacting a modern telecommunications statute this year.

Mr. OXLEY

Mr. OXLEY. Mr. Speaker, I rise in support of House Concurrent Resolution 53, of which I am an original cosponsor. Given the fact that President Lee Teng-hui is the freely elected leader of the Republic of China on Taiwan--a United States ally and important trading partner--it would seem self-evident that he would be welcome at any time for private visits to the United States. Yet this is not the case. Frankly, President Lee has been subjected to some rather shoddy treatment by the Clinton administration, which, of course, is the impetus behind this concurrent resolution. I want to make it clear that President Lee is a reform-minded democrat who is offering just the kind of leadership the United States should wish to encourage in Asia. While I am certainly in favor of maintaining a constructive relationship with the People's Republic of China, I see no reason why the two policies should be mutually exclusive. Surely the situation calls for a degree of tact and diplomacy, two qualities which this administration has lacked in its dealings with President Lee. Again, Mr. Speaker, I support the resolution, and I hope the administration will take note of the position of the House.

Mr. OXLEY

Mr. OXLEY. Mr. Chairman, during the first 100 days of the Contract With America, I have repeatedly received three words of advice from my constituents in Ohio's Fourth Congressional District: ``Keep it up.'' The people I have talked with in my district are pleased that we are carving the lard out of an obese bureaucracy that micromanages our lives. They feel more secure knowing that we have passed a real crime bill this time, and they think it is about time that we revived the principle that the route to prosperity is through work, not welfare. They support our approval of the balanced budget amendment and respect us for facing up to the hard decisions needed to reduce the deficit. They have consistently told me one other thing. We are overtaxed and we need relief. I have been struck by one remarkable statistic. The average American family spends about half of its budget on Federal, State, and local taxes. Hardworking families just cannot afford to raise children and feed a hungry bureaucracy as well. H.R. 1215 represents a long overdue down payment on tax fairness. It provides relief for families and senior citizens, establishes critically needed savings, and encourages private sector investment that will promote economic growth and create thousands of jobs. The average taxpayer in my State of Ohio will save about $1,400. That is $1,400 for an individual family to spend rather than spent by a faceless Federal bureaucrat. Importantly, this $189 billion tax cut is fully paid for by responsible budget cuts and savings. To cite just one example that I have had a personal interest in, it is estimated that $2 billion, that is $2 billion in savings, will be realized through the extension of the Federal Communications Commission's spectrum auction authority. I sponsored the legislation that originally paved the way for these auctions which have already raised over $9 billion for the U.S. Treasury. Read that, the taxpayers. H.R. 1215 is a bill that all of us should support. The taxpayers have earned it, they deserve to keep it. Mr. Chairman, I ask for a strong support of this legislation.

Mr. OXLEY

Mr. OXLEY. Mr. Chairman, I rise in opposition to all term limits. We have term limits now, they are called elections. Mr. Chairman, this vote is a classic example of a solution in search of a problem. Let us consider the facts. More than half of the House of Representatives was elected in the 1990's. The momentous change of most recent election ended 40 continuous years of one-party rule. The average length of time a Member of Congress serves is 8\1/2\ Years. Because of this fact, it is entirely possible that a 12-year term limit would create less competition for congressional seats not more, the exact opposite of its intention. Right now, with energetic freshman and sophomore classes, this House is more vibrant and more responsive than it has been in years. For this supposed problem, we must amend the Constitution of this Nation? I do not minimize or ignore the public frustration and outrage that brought us to this debate. It is real and justifiable. We have already passed and implemented a great number of significant congressional reforms in response to that sentiment. The Speaker of the House can now serve for 8 years only. Chairmen may hold their posts for 6 years. Congress is now accountable to all the laws of the land. This body is leaner than it was last year, and it costs the taxpayers less. One of the hallmarks of American democracy is orderly change directed by the voters. The voters are powerful, and the Constitution provides them regular opportunities to use that power for change. Mr. Chairman, we owe our constituents representation of their views. But we also owe them our best judgment. This is not a miracle cure. This is not the real thing. This is the wrong way to go. gentleman from Georgia [Mr. Barr].

Mr. OXLEY

Mr. OXLEY. I rise today in strong support of the Contract With America's Personal Responsibility Act. Welfare has become a way of life for too many recipients. By making it easier to collect a hand out than to work, the system has destroyed individual initiative and actually perpetuated poverty. Bureaucratic barriers frustrate motivated recipients who want to get a job or acquire an education. We've seen an alarming breakdown of the family occur under programs that simply are not working. The Personal Responsibility Act will reform our welfare system to provide a helping hand, not a handout, to millions of Americans caught in this dead-end trap. I've heard a lot of talk lately that the Republican plan would be hard on children. This couldn't be further from the truth. Our plan will actually increase funding for many children's services. For example under our plan funding for school lunch and breakfast programs would actually increase by $1 billion over 5 years. By eliminating the Federal middle man, and block granting funds, the savings we achieve now could be used for providing increased assistance to needy children. Mr. Chairman, in the name of short-term compassion we have inflicted long-term cruelty. Let us pass this legislation so we can offer hope for our children's future, not despair.

Mr. OXLEY

Mr. OXLEY. Mr. Speaker, I recommend to my colleagues the following column by Robert J. Samuelson from the opinion page of yesterday's Washington Post. The subject is the comeback of American manufacturing. Members would do well to consider the conclusions drawn by the author. [From the Washington Post, Mar. 15, 1995] Why U.S. Industry Bounced Back (By Robert J. Samuelson) Dial back your time machine about a decade. You'll find plenty of newspaper and TV stories warning of ``deindustrialization.'' American manufacturers (it was said) were being pulverized. The Japanese were overwhelming our automakers, repeating their triumph in steel. Computer chip makers were rapidly losing ground. Americans had forgotten how to make things. It was only a matter of time before U.S. manufacturing sank into oblivion and we became a nation of ``hamburger flippers.'' None of these dire predictions came true; indeed, most were always silly (and this reporter at least said so). Yet the story of the comeback of U.S. manufacturing is still under- told and ill-appreciated, as economists Jerry Jasinowski and Robert Hamrin argue produced more cars than Japan for the first time since 1979. U.S. companies account for half of global shipments of fiber optic cable. The stunning manufacturing revival needs to be better understood. It is important in its own right and also teaches broader lessons. Consider first some basic facts: Between 1980 and 1994, U.S. manufacturing output rose more than 50 percent. In the past three years, it has increased 15 percent. It is now twice as high as in 1970 and five times as high as in 1950. Many things that didn't exist four decades ago (many drugs, most computers, commercial jets, much medical equipment, most anti-pollution devices) are produced in huge quantities, along with such traditional items as furniture and food. There has been no ``deindustrialization.'' In 1991 the United States regained its position as the world's largest exporter. In 1993 the U.S. share of global exports was 12.8 percent, compared with Germany's 10.5 percent and Japan's 9.9 percent. The American computer chip industry is again the world's leader. General Motors and Ford are still the first and second largest auto companies. American companies still dominate in aerospace, computer software and entertainment; they are strong in paper, chemicals and pharmaceuticals, among others. Industrial productivity (efficiency) has increased at its fastest rate in decades. Since 1985, manufacturing productivity--output per worker hour--has risen about 3 percent a year. Since 1980 the man-hours to produce a ton of steel fell from about 10 to four. Quality is also increasing. In one survey, two-thirds of respondents felt product quality had improved in the past five years; only 14 percent felt it had worsened. Obituaries for U.S. industry were inevitably wrong for two reasons. The first is that they mistook manufacturing's stagnant job base for stagnation. In 1970 about 19 million Americans worked in manufacturing; last year, the number was about 18 million. So? Rising production and falling employment merely signify higher productivity. Fewer people produce more; other people provide other things, from health care to software. This is the time-proven path to higher, not lower, living standards. The second error was presuming that setbacks, once started, were irreversible. Companies couldn't defend themselves; economic conditions wouldn't change. In their book (``Making It in America''), Jasinowski--president of the National Association of Manufacturers--and Hamrin show that companies did fight back. Costs were cut, processes streamlined. Xerox reduced the time to bring a new product to market by 60 percent. AMP, a maker of electrical components, raised ontime deliveries from 65 to 95 percent. Cannondale, a manufacturer of mountain bikes, increased foreign sales from 5 percent to 40 percent. What also changed were exchange rates. The dollar's steep rise in the early 1980s (up 63 percent between 1980 and 1985) was a basic cause of industrial distress. It made imports cheaper and U.S. exports more expensive. But the dollar had to drop, because trade deficits were unsustainably large. When foreigners had more dollars than they wanted, the dollar would decline. It did. In 1985, a dollar was worth 238 yen; now, it's worth 91. American exports more than doubled between 1985 and 1993. American industry doesn't enjoy--and never will-- preeminence in all areas. Japan still dominates consumer electronics and some computer chips. Japanese auto companies still make swell cars. In 1993 we imported 77 percent of our toys, 43 percent of our ceramic tiles, 56 percent of our TV tubes and 96 percent of our watches. Global markets mean just that; other countries will achieve comparative advantage in some products and technologies. But ``globalization'' is not pulverizing U.S. industry. The first lesson of its revival is simple: Keep markets open. What forced U.S. companies to improve was competition, whether from imports, new technologies or deregulation. Some industries received modest government help, mostly as import restraints; but generally, companies created their own comebacks. No one likes to change, and economic change is often cruel and ugly. Bankruptcies, ``downsizing'' and ``restructuring'' all disguise the human toll. The alternative, though, is stagnation. A second lesson: Keep foreign ``success'' in perspective. In the 1980s, the Japanese were celebrated. Their economic policies were wise; ours were foolish. They invested; we consumed. Now Japan doesn't look so good. In the late 1980s, its economic policies fostered a speculative real estate and stock market boom whose ill effects still linger. Protectionist policies have aggravated the yen's rise, which has hurt exports. Underconsumption also harms industry. Only 10 percent of Japan's households have personal computers, compared with 37 percent in the United States. Japan's computer industry suffers. The largest lesson is the contrast between economic and political change. Economic change proceeds, often roughly. In politics, people argue over winners and losers. Change occurs slowly, if at all. Sometimes that is preferable, but often it isn't. Paralysis can mean that everyone loses. If government had decided to revive manufacturing in the mid-1980s, we'd still be arguing over who should be helped and why. In this case, the best policy was to insist that companies and workers help themselves.

Mr. OXLEY

Mr. OXLEY. Mr. Speaker, I want to today applaud yesterday's spectrum auction conducted by the Federal Communications Commission. The broadband auction for personal communications services resulted in bids of more than $7 billion, that is 7 with a ``B'', billion dollars, exceeding all previous estimates. Pioneer preference licenses to companies using new innovative technologies resulted in bids of over $700 million. As many as 300,000 new jobs will be created as a result of these auctions. They have been more than successful than I ever dreamed when I first introduced this concept a few years ago in that auction revenues now will approach an impressive $9 billion. This is $9 billion that will go to the Treasury. Rarely do we see an idea whose time has not only come but has produced the kind of revenue to the taxpayers that this particular provision has. Our full Committee on Commerce tomorrow will consider legislation to extend the FCC's auction authority by the year 2000. We plan to continue in that vein.

Mr. OXLEY

Mr. OXLEY. Mr. Speaker, I thank the gentleman for yielding. Mr. Speaker, I rise in opposition to the motion to recommit, and I do so with some concern, because the fact is the language added regarding service of process I think is a bogus argument and is simply an effort to bash foreign manufacturers. The motion to recommit, as far as the language increasing its punitive damage ceiling and the cap to $1 million, is an amendment that I had supported and had offered, in fact, to the Committee on Rules. But clearly the language involving service of process in my estimation has no business in the motion to recommit. Frankly, it has no business in the bill. Mr. Speaker, for that, I feel compelled to oppose the motion to recommit.

Mr. OXLEY. Mr. Chairman, I rise in opposition to the amendment. When we first set out on this legislation we had several goals in mind, and I would remind the Members that it was to improve the competitiveness of American business, to increase economic growth, create more jobs, reduce overall liability costs of which insurance rates are only one portion of that equation. The gentleman from New York [Mr. Schumer] who offers the amendment it seems to me really misses the point behind the efforts that we are making with this legislation. The gentleman from Massachusetts [Mr. Markey], who I assume will speak later, had a similar approach in the Committee on Commerce, which was rejected at that point and I think the full House should reject the Schumer amendment as well. There are a lot of factors. The insurance rates are affected by a number of factors, medical costs, crime rates, accident patterns, court interpretation of legal reforms; punitive damages are not insurable in most jurisdictions, meaning that one of the core provisions of the legislation would not be relevant to insurance rates in most of the States. Insurer losses on which premiums are in part based will probably not decrease for several years because of all of the litigation in the pipeline. Finally, Mr. Chairman, this amendment places unprecedented power in the hands of the Secretary of Commerce, essentially giving one individual life or death power over this legislation and the good that it is trying to accomplish. So, Mr. Chairman, for all those reasons, and for the fact that we have a number of ambiguous circumstances involved in the uncertainties, I would ask that the Schumer amendment be defeated.

Mr. OXLEY

Mr. OXLEY. Mr. Chairman, I yield 1 minute to the gentleman from Georgia [Mr. Norwood], a member of the committee. (Mr. NORWOOD asked and was given permission to revise and extend his remarks.)

Mr. OXLEY. Mr. Chairman, I yield 1 minute to the gentleman from California [Mr. Bilbray], a valuable member of the Committee on Commerce.

Mr. OXLEY. Mr. Chairman, I yield 6 minutes to my good friend, the gentleman from Texas [Mr. Stenholm].

Mr. OXLEY. Mr. Chairman, I yield 1 minute to the gentleman from Oklahoma [Mr. Coburn].

Mr. OXLEY. Mr. Chairman, I yield 1 minute to the gentleman from North Carolina [Mr. Burr].

Mr. OXLEY. Mr. Chairman, I yield 30 seconds to the gentleman from Indiana [Mr. McIntosh]. (Mr. McINTOSH asked and was given permission to revise and extend his remarks.)

Mr. OXLEY. Mr. Chairman, I offer an amendment made in order pursuant to the rule.

Mr. OXLEY. Mr. Chairman, I rise to offer the bipartisan FDA defense amendment, along with my colleagues Mr. Coburn, Mr. Burr, Mr. Tauzin, Mr. Brewster, and Mr. Stenholm. Mr. Chairman, the amendment states simply that when the manufacturer of a drug or medical device receives pre-market approval from the FDA and complies with all post-approval reporting requirements, the manufacturer will not be liable for punitive damages in a civil suit. The amendment protects the rights of plaintiffs to receive full compensatory damages, including pain and suffering. Punitive damages are not compensatory. They are intended to punish malicious conduct. To bring a drug from the laboratory to the marketplace takes on average 9\1/2\ years and costs manufacturers $350 million. The sponsors and supporters of this amendment believe that compliance with the process, and post-approval reporting requirements, clearly demonstrate a lack of malice. Punitive damages are quasi-criminal in nature, and careful adherence to an expensive 10-year process is certainly not criminal. Members have asked me, what if the manufacturer knows the drug is dangerous, but still goes through the process and gets FDA approval? The defense is denied in that case, as it is when a manufacturer discovers a problem after approval. The defense only applies when the maker of the drugs or device acts in good faith and discloses all relevant information. predictability for liability in the development of life-saving drugs and medical devices. Because of our liability lottery, drugs are more expensive in the United States than almost anywhere on Earth. Products are kept off the market, or withdrawn after introduction. The effect of our liability system on drugs and medical devices was recently summarized by the American Medical Association: Innovative new products are not being developed or are being withheld from the market because of liability concerns * * * Certain older technologies have been removed from the market not because of sound scientific evidence indicating lack of safety or efficacy, but because product liability suits have exposed manufacturers to unacceptable financial risks. Mr. Chairman, writing on punitive damage damages, Justice Lewis Powell said, ``* * * punitive damages invite punishment so arbitrary as to be virtually random.'' Faced with a threat of random punishment, many manufacturers are understandably reluctant to put a new drug or device on the market. Our amendment says to them invest $350 million, wait 9\1/2\ years, obtain FDA approval, observe all reporting requirements, disclose fully, and we will say you did not act wantonly or maliciously. If your product causes injury, you are responsible for compensation. That determines the difference between economic and noneconomic and punitive damages. The plaintiff will be able to recover economic and noneconomic damages. This amendment is common sense and deserves the support of this body. I urge my colleagues to support this amendment. Mr. Chairman, I reserve the balance of my time.

Mr. OXLEY. Mr. Chairman, this has been a very worthwhile debate. I am only sorry we did not have more time. This has been a worthwhile and edifying debate. Let me conclude by answering some questions that have been raised during the debate and particularly from some conversations I have had with my good friend from New York, Mr. Towns, as to what this amendment does or does not do. First of all, this amendment applies only to punitive damages. Second, the amendment does not cap noneconomic damages in any way, so that the plaintiff would be entitled to receive economic and noneconomic damages; only punitive damages would not be permitted. Thirdly, the FDA is the agency we rely on to regulate food and drug purity and the only agency authorized to give premarket approval. This amendment encourages innovations, it protects consumers and it makes good common sense. Mr. Chairman, this was a bipartisan effort on this amendment, and we think it goes to the heart of the entire process of approving medical devices and drugs. It is in the best interests of our consumers and of our constituents that we have a system that we can rely on and that provides adequate protection against voracious punitive damage awards against drug companies or other manufacturers of medical products. The Oxley bipartisan amendment is an amendment that all Members can and should support.

Mr. OXLEY. Mr. Chairman, I yield 30 seconds to the gentleman from North Carolina [Mr. Heineman]. (Mr. HEINEMAN asked and was given permission to revise and extend his remarks.)

Mr. OXLEY

Mr. OXLEY. Let me just simply respond by saying that Judge Higginbotham's advisory committee that did a serious study on exactly what the gentleman from New York would try to do came to the very solid conclusion as he testified in the other body that it would have a deleterious effect on the litigation system and it would in fact discourage out-of-court settlements. This is somebody who has studied the issue, who has been a Federal judge, a well-regarded Federal judge, and I think that we ought to take his advice very carefully, as well as the 39 out of the 41 States that have essentially rejected the gentleman from New York's recommendations.

Mr. OXLEY. I yield to the gentleman from New York.

Mr. OXLEY. Mr. Chairman, I had a judge tell me one time that a poorly settled lawsuit is much better than a well-tried one. I found in my experience that that was the case. Indeed this provision, if it were to be adopted, the Schumer amendment, would clearly discourage the parties from considering whether that case should be settled. It seems to me that our public policy ought to be encouraging settlements, not discouraging settlements. Judge Higginbotham, from the fifth circuit, testified on the Senate side as the chairman of the Advisory Committee on the Federal Rules of Practice and Procedure. He testified that his advisory committee had studied this particular idea and had found that no change was needed to the basic approach to the issuance and the use of protective orders. In particular he stated that the results of these studies had shown that there was no need for these provisions and that they would create more burdensome and costly discovery as well as greater burdens on the court system. Mr. Chairman, this amendment makes a mockery of our system of justice by allowing third-party special interests unlimited access to private corporate documents. The gentleman previously had stated that one of the States that he pointed out that had changed the rules was Florida. In Florida, a trial lawyer recently testified that it has resulted in negative and confusing experiences that have discouraged out-of-court settlements. I would suggest that the reason why 39 out of 41 State legislatures have rejected the type of change that the gentleman from New York would ask for is precisely because it would discourage the ability of companies and people involved in a lawsuit, to encourage them to come to a conclusion and to settle out of court. I would think the gentleman from New York would want to have these kinds of settlements and not discourage those kind of settlements out of court and having to go to a trial and use up a lot of the resources of the court.

Mr. OXLEY. I yield to the gentleman from Illinois.

Mr. OXLEY. Let me respond, first of all, there is an expressed warranty provision in that that would cover the situation the gentleman mentioned. Let me say to my colleagues that when working on the statute of repose, we were looking for a particular length of time for the statute of repose. we found, to our amazement, that the longest statute of repose of any State is the State of Texas, the Lone Start State. And basically the statute of repose that is in this statute or in this bill copies almost word for word the Texas statute.

Mr. OXLEY

Mr. OXLEY. I thank the chairman for yielding this time to me. Mr. Chairman, let me say first of all that I hope we could have avoided some of the class war rhetoric that we have heard in debating this legislation. The fact is that in many cases in Europe, for example, where they probably have the safest automobiles in the world, there is no provision for punitive damages over there. The fact is that the American automobile manufacturers could not have child safety seats for about 7 years after Europe had introduced them because of the concern for product liability suits over here. I suspect there are a number of young people who were killed in auto crashes before these child restraint seats were made available in the United States because of the fear of excessive litigation in this country versus Europe. The idea behind our system was to make the plaintiff whole. It was basically to provide that the plaintiff be made whole. That is whole system that we talk about. Joint liability was created as a risk distribution insurance mechanism to insure that valid claimants would receive at least some compensation. However, no insurance program, not any workers' compensation program in any State, provides benefits or coverage for noneconomic damages. The voters of California passed a State initiative in 1986 which eliminated joint liability for noneconomic damages. California trial attorney Suzel Smith, who practices for both defendants and plaintiffs, testified twice last year in the Senate that the elimination of joint liability for noneconomic damages in California has been fair and that there has been no effort to repeal or modify the law. I think it is fundamentally unfair to have a situation where you have got a defendant who is found to be 1 percent responsible and yet, because they may have deep pockets, they will get 100 percent of the judgment.