Larry Pressler

Mr. PRESSLER

Mr. PRESSLER. Mr. President, today, as chairman of the Committee on Commerce, Science, and Transportation, I am introducing the National Science Foundation Authorization Act of 1995. The bill provides a 3- year authorization for the science and education programs of the National Science Foundation [NSF]. Our economy, our quality of life, and our national security are increasingly dependent on our leadership in science and technology. Since its beginnings in 1950, the NSF has played a central role in maintaining that leadership through its research programs. In fact, NSF remains the principal source of funding for fundamental research at our Nation's academic institutions. While America is still doing well in science and technology, our leadership position is slipping. For example, while the U.S. leads the world in total dollars spent on research and development, both Japan and Germany currently outspend the United States as a percentage of GNP. Similarly, a recent study by the White House Office of Science and Technology Policy revealed the U.S. leads in 27 critical technologies, but Europe and Japan are catching up in many of those areas. There is little question that meeting these challenges in science and technology requires a strong and robust NSF. To that end, the legislation I am introducing today provides $3.2 billion for each of fiscal years 1996, 1997, and 1998 to allow NSF to continue its efforts to keep America at the forefront of basic research. In a fiscal environmental in which we are looking to eliminate entire agencies, this authorization bill reflects a strong commitment to basic science. The annual funding is only slightly below NSF's fiscal year 1995 funding level. Moreover, the bill's funding authorizations for both the overall agency and its [[Page S 18017]] major individual accounts correspond to the appropriations levels approved for NSF by the Senate in September. Mr. President, of the total NSF authorization, the bill authorizes $2.3 billion for the research and related activities account, the main source of NSF's research grants. This is roughly the same as the fiscal year 1995 funding level. NSF's research programs support important work in advanced materials, biotechnology, global climate studies, general science and math, and high performance computing. Many of the products and services we take for granted are the direct result of research funded by NSF grants. Within the Research Account, let me make special mention of one program: the Experimental Program to Stimulate Competitive Research [EPSCoR] at NSF. This program has been particularly helpful in strengthening the research capabilities of colleges in States that historically have been unable to effectively compete for Federal research opportunities. EPSCoR has been so successful at NSF that it has also been adopted at five other Federal science agencies, including NASA. To allow EPSCoR to continue its important work in our rural States, my bill provides an annual authorization of $46 million for the program. This is a 24-percent increase over its fiscal year 1995 level of $37 million. Unfortunately, when it comes to many Federal science programs, my home State of South Dakota and other rural States have had little, if any, involvement--either as participants or beneficiaries. These States, too, must be part of the technological revolution. In that regard, the National Science Foundation, through EPSCoR and other programs, has done a tremendous job of including rural States in that revolution. I should mention the bill funds EPSCoR out of the Research Account rather than its current funding source, the Education Account. This change is intended to encourage greater coordination and interaction between EPSCoR and the larger research programs. To further build on the successful EPSCoR concept, my bill authorizes $10 million a year for a new pilot program to provide research grants to partnerships formed by EPSCoR institutions and large research universities. This program will enable small schools participating in EPSCoR to graduate from the smaller EPSCoR science projects into larger mainstream programs by joining with a big brother research university like MIT. The large schools participating in the program stand to gain as well. The program would enable large schools to become more competitive by combining their talent, experience, and resources with those of their rural counterparts. In short, Mr. President, if approved, this program will help broaden and strengthen America's science and technology base. My bill also provides $599 million for the education account at NSF to help develop a new generation of scientists and engineers to tackle future scientific challenges and to ensure a technologically literate Nation. NSF's programs support educational activities reaching students at all levels in South Dakota and all across the Nation. Science education must be a national priority if we are to remain competitive in our increasingly global and technologically oriented marketplace. My bill's full funding for NSF's education programs indicates the high priority I place on science education. Finally, I note that my bill authorizes $100 million for the facilities program at NSF. Good science requires good research facilities. The NSF facilities program provides funding to enable our research institutions to renovate old facilities and buy up-to-date lab equipment so our scientists will have the proper tools and environment to conduct their studies. Mr. President, we in South Dakota are especially grateful for the work of NSF. Currently, NSF is supporting more than 50 research and education projects in South Dakota educational institutions ranging from elementary school to graduate school. These activities have been crafted to reflect the special expertise of those schools and universities as well as the particular needs of our region. For instance, NSF is supporting research at the South Dakota School of Mines and Technology designed to better understand and predict weather and climate to help our agriculture community. NSF also is funding several projects in South Dakota to improve the teaching of math and science at our schools. In September, for example, NSF began funding for a project designed to create degree programs in science, engineering, and mathematics at our tribal colleges. This important work must be allowed to continue. Mr. President, my bill will enable these and other NSF projects to move forward and to keep America strong in science and technology. I look forward to working with my colleagues to get this important legislation enacted.

Mr. PRESSLER

Mr. PRESSLER. Mr. President, today, as chairman of the Committee on Commerce, Science, and Transportation, I am introducing the National Science Foundation Authorization Act of 1995. The bill provides a 3- year authorization for the science and education programs of the National Science Foundation [NSF]. Our economy, our quality of life, and our national security are increasingly dependent on our leadership in science and technology. Since its beginnings in 1950, the NSF has played a central role in maintaining that leadership through its research programs. In fact, NSF remains the principal source of funding for fundamental research at our Nation's academic institutions. While America is still doing well in science and technology, our leadership position is slipping. For example, while the U.S. leads the world in total dollars spent on research and development, both Japan and Germany currently outspend the United States as a percentage of GNP. Similarly, a recent study by the White House Office of Science and Technology Policy revealed the U.S. leads in 27 critical technologies, but Europe and Japan are catching up in many of those areas. There is little question that meeting these challenges in science and technology requires a strong and robust NSF. To that end, the legislation I am introducing today provides $3.2 billion for each of fiscal years 1996, 1997, and 1998 to allow NSF to continue its efforts to keep America at the forefront of basic research. In a fiscal environmental in which we are looking to eliminate entire agencies, this authorization bill reflects a strong commitment to basic science. The annual funding is only slightly below NSF's fiscal year 1995 funding level. Moreover, the bill's funding authorizations for both the overall agency and its [[Page S 18017]] major individual accounts correspond to the appropriations levels approved for NSF by the Senate in September. Mr. President, of the total NSF authorization, the bill authorizes $2.3 billion for the research and related activities account, the main source of NSF's research grants. This is roughly the same as the fiscal year 1995 funding level. NSF's research programs support important work in advanced materials, biotechnology, global climate studies, general science and math, and high performance computing. Many of the products and services we take for granted are the direct result of research funded by NSF grants. Within the Research Account, let me make special mention of one program: the Experimental Program to Stimulate Competitive Research [EPSCoR] at NSF. This program has been particularly helpful in strengthening the research capabilities of colleges in States that historically have been unable to effectively compete for Federal research opportunities. EPSCoR has been so successful at NSF that it has also been adopted at five other Federal science agencies, including NASA. To allow EPSCoR to continue its important work in our rural States, my bill provides an annual authorization of $46 million for the program. This is a 24-percent increase over its fiscal year 1995 level of $37 million. Unfortunately, when it comes to many Federal science programs, my home State of South Dakota and other rural States have had little, if any, involvement--either as participants or beneficiaries. These States, too, must be part of the technological revolution. In that regard, the National Science Foundation, through EPSCoR and other programs, has done a tremendous job of including rural States in that revolution. I should mention the bill funds EPSCoR out of the Research Account rather than its current funding source, the Education Account. This change is intended to encourage greater coordination and interaction between EPSCoR and the larger research programs. To further build on the successful EPSCoR concept, my bill authorizes $10 million a year for a new pilot program to provide research grants to partnerships formed by EPSCoR institutions and large research universities. This program will enable small schools participating in EPSCoR to graduate from the smaller EPSCoR science projects into larger mainstream programs by joining with a big brother research university like MIT. The large schools participating in the program stand to gain as well. The program would enable large schools to become more competitive by combining their talent, experience, and resources with those of their rural counterparts. In short, Mr. President, if approved, this program will help broaden and strengthen America's science and technology base. My bill also provides $599 million for the education account at NSF to help develop a new generation of scientists and engineers to tackle future scientific challenges and to ensure a technologically literate Nation. NSF's programs support educational activities reaching students at all levels in South Dakota and all across the Nation. Science education must be a national priority if we are to remain competitive in our increasingly global and technologically oriented marketplace. My bill's full funding for NSF's education programs indicates the high priority I place on science education. Finally, I note that my bill authorizes $100 million for the facilities program at NSF. Good science requires good research facilities. The NSF facilities program provides funding to enable our research institutions to renovate old facilities and buy up-to-date lab equipment so our scientists will have the proper tools and environment to conduct their studies. Mr. President, we in South Dakota are especially grateful for the work of NSF. Currently, NSF is supporting more than 50 research and education projects in South Dakota educational institutions ranging from elementary school to graduate school. These activities have been crafted to reflect the special expertise of those schools and universities as well as the particular needs of our region. For instance, NSF is supporting research at the South Dakota School of Mines and Technology designed to better understand and predict weather and climate to help our agriculture community. NSF also is funding several projects in South Dakota to improve the teaching of math and science at our schools. In September, for example, NSF began funding for a project designed to create degree programs in science, engineering, and mathematics at our tribal colleges. This important work must be allowed to continue. Mr. President, my bill will enable these and other NSF projects to move forward and to keep America strong in science and technology. I look forward to working with my colleagues to get this important legislation enacted.

Mr. PRESSLER

Mr. PRESSLER. Madam President, I am pleased that the Senate today is taking action on H.R. 2519, the Philanthropy Protection Act, and H.R. 2525, the Charitable Gift Annuity Anti-trust Relief Act. Both bills are very important to our Nation's charitable organizations. These bills deserve our full support. America's charities are America's inspiration. They serve those in physical and spiritual distress. They educate our children and adults so that they can become self-sufficient. They enrich our lives through music and the arts. They seek cures for diseases that plague humanity. They encourage the preservation of our environment. As our Government finally begins to tighten its fiscal belt, America's charities will be expected to assume an even greater responsibility. As they have done on so many occasions during war and peace, depression and prosperity, America's charities are prepared to answer the call for assistance. America's charities are a vital foundation of our Nation. However, today, they are under unwarranted and life-threatening assault. As many of my colleagues know, an ominous class action lawsuit in a Federal court in Texas has put American philanthropy in jeopardy. Specifically, this lawsuit disingenuously attempts to apply securities and antitrust laws meant to govern commercial enterprises to fundraising and money- management techniques of charities. This is an application of Federal law never contemplated by Congress. This lawsuit has been an issue of great concern to this Congress. To their credit, my friends and colleagues from Texas and Connecticut, Senators Hutchison and Dodd, identified this problem early on and introduced S. 978 to address the issues raised in the lawsuit and clarify the role of the securities laws and the antitrust laws with respect to charitable organizations. I am pleased to be one of a number of bipartisan cosponsors of this legislation. I am even more pleased that the Senate is taking action to pass this legislation. Quick action to enact this legislation would free donors to make year-end gifts without fear of becoming entangled in a stressful, costly lawsuit. Further, enactment of this bill would free charities to do what they do best: serve the people of America. With the beginning of the holiday season--the peak period of charitable giving--passage of this bill could not have come at a better time. I also would like to commend our colleagues in the House of Representatives. They took action last night and passed both H.R. 2519 and H.R. 2525 unanimously. I applaud the House leadership and the bipartisan sponsors of this bill, including Representatives Hyde, Conyers, Bliley, Fields, Dingell and Markey, among others, for working together to pass the bill as part of the House's Correction Day calendar. Action is needed. Millions of dollars of donations that should be going to charitable programs are instead being wasted on attorneys' fees and needless litigation. We must not stand idly by while America's charitable organizations are looted. Both bills make clear that charities that go astray of both the law and the public trust will be held accountable to the full extent of the law. Both bills would end unfair punishment of those charities that play by the rules and pursue their missions in good faith. Both bills restore fairness to the law and remove the cloud over charitable giving. Today, we can send an important signal to our citizens that in their time of need, America's charities will still be there for them and future generations. Again, I commend my colleagues from Texas and Connecticut, Senators Hutchison and Dodd, and all the co-sponsors of S. 978, for coming together in a demonstration of bipartisan support for America's charities. I urge all my colleagues to support immediate passage of H.R. 2519 and H.R. 2525.

Mr. PRESSLER

Mr. PRESSLER. Mr. President, I rise today to commend Chairman Chafee, Subcommittee Chairman Kempthorne, and Senator Baucus, as ranking member of this committee, for their hard work in drafting this bill. Certainly, we need a uniform system of Federal laws and regulations to maintain the public health and safety of our drinking water. These laws must be reasonable. They must make sense. The bill before us, S. 1316, would go a long way to bring common sense to safe drinking water regulations. This is good news for small cities and rural communities. For example, S. 1316 would require the EPA to provide sound scientific background for future drinking water standards. In addition, this legislation would grant flexibility to small water systems that cannot always afford the expensive treatment technology to comply with Federal regulations. S. 1316 represents a reasonable approach to drinking water regulation. I am particularly pleased that my colleagues agreed to improve the original language in section 9, regarding the levels of sulfates allowed in drinking water supplies. This original provision would have required that communities provide bottled water as an alternative to water containing sulfate. This provision is similar to a proposed Environmental Protection Agency regulation that would require communities to limit sulfate in drinking water. However, there is no scientific study to prove that these low levels of sulfate in drinking water result in negative health affects. As originally drafted, the bill would have affected roughly one- quarter of all the water systems in South Dakota--108 of the 483 water systems in the State. The South Dakota Department of Environment and Natural Resources [DENR], which opposed both section 9 and the EPA's proposed sulfate rule, has estimated that the costs of compliance for those affected water systems would have been 40 to 60 million. That was just the initial cost of compliance. Small, rural communities in South Dakota should not be forced to pay such a high price to enforce a regulation that has no valid scientific justification. Let me put these figures in real terms we can all understand. The largest of the 108 affected South Dakota communities would have been Madison, with a population of 6,395 people. Currently, the average water bill for each household in Madison is $13.75 per month. According to the South Dakota DENR, if the original section 9 were enacted, the additional cost to each household would have been almost $14 per month. That would have meant an average monthly water bill of $27.75--a 101 percent increase. Remember, this figure is for the largest of the affected communities. Let us take Big Stone City, SD, as another example. With a population of [[Page S 17730]] 670 people, Big Stone City has the median population of the 108 communities in South Dakota affected by the original sulfate proposal. Currently, the average monthly water bill per household in Big Stone City is $9.80. If the original section 9 were to become law, each household in that community would have seen its water bill rise about $12.00, for a total monthly bill of $21.80. That would be a dramatic 122 percent increase. Just imagine the impact this provision could have on communities even smaller than Big Stone City. Mr. President, what would these communities have gotten in return for these shocking rate increases? Nothing. That is right. Nothing. For years, South Dakotans have been drinking water containing sulfate with no apparent adverse health effects. In response to the concerns of my constituents, my colleagues on the committee agreed to suspend the current EPA rule. Instead, additional research conducted jointly by the Centers for Disease Control and the EPA would be required on the health affects of various dose levels of sulfate in drinking water on the broader population. The EPA then would propose a new regulatory standard for sulfate based on the findings of this study, and on the standards set forth by this bill. I am convinced that this additional study will prove once and for all that the sulfate which occurs naturally in much of South Dakota's drinking water causes no harmful side affects. The revised sulfate provisions of section 9 also have received the endorsement of the South Dakota Department of Environment and Natural Resources, and the South Dakota Municipal League. Mr. President, like all Americans, South Dakotans certainly want safe and healthy drinking water. But they also want Federal rules that are reasonable, understandable and flexible. By passing this bill, we are finally taking much-needed steps to solve the problems associated with the current safe drinking water law. I am happy that I was able to work with the chairman to develop sensible language to reduce the impact of burdensome sulfate regulations on small cities and rural water systems in South Dakota and other States. Again, I thank Chairman Chafee for his leadership and for accommodating the concerns of my constituents. I also want to thank my friend from Minnesota, Senator Grams, for working with me to ensure that we achieve a commonsense legislative solution on this matter.

Mr. PRESSLER

Mr. PRESSLER. Mr. President, I rise in opposition to the Dorgan amendment. Let me make some general remarks on the issues surrounding antitrust and some of the standards that are used. [[Page S 17820]] First, let me point out that this amendment is an attempt to change the way the ICC looks at the competition among rail carriers. Changing the standards by which rail mergers are judged is very complicated. The current public interest standard is well established and has been in place for 75 years. Changing them now, particularly while two class one railroads are in a merger proceeding, without fully understanding how these changes affect railroads, shippers, States and even the financial markets, is not the approach we should take without fully understanding what we are doing. Unintended consequences could easily result. We have one of the most efficient, if not the most efficient, transportation system in the world. A large part of the system is the level of competition that exists between the transportation modes and within the modes. Merely trying to guarantee competition in the rail industry by changing how the ICC looks at competition could easily backfire. In the last 15 years, there have been roughly a dozen rail mergers, a tremendous increase in concentration when just measured by the number of railroads. However, at the same time, real rates have fallen up to 50 percent with the decreases occurring every year across all major commodity groups and in all major geographic areas. This cannot just be attributed to deregulation, because without ongoing effective competition, the productivity gains that deregulation made possible for the railroads would not have been passed through to the shippers. Without fully understanding what we are doing in this area, we could easily turn back this trend, even though we have the best intentions. As a result, I urge that this amendment be defeated. I urge my colleagues to vote against it as well. Now specifically, the ICC does not apply or follow antitrust law, though it pays very close attention to competitive issues. The rail system is the underpinning of our entire economy, and many rail efficiencies can be achieved only through mergers. The ICC applies a public interest standard, under which the public benefits, competitive or otherwise, of a merger, are balanced against any detriments, again competitive or otherwise, of a merger. This process allows the Commission to approve consolidations, even if they otherwise would violate antitrust laws. Rather than applying a narrow DOJ-type antitrust analysis, the Commission has consistently looked at all factors in deciding the competitive impact of rail mergers and has found pure concentration measures, such as the number of railroads serving a point, to be too simplistic a standard. The UP/MKT merger is a good example. In that case, a number of markets went from three railroads to two. Various parties, including the Justice Department, argued that there would be a reduction in competition in those markets and that conditions should be imposed to introduce additional rail competition in them. The Commission rejected these arguments, finding that the continued competition from a strong second railroad, the increase in competition from the merged system's introductions of new single-line routes and other service improvements and other competitive constraints, such as modal and source competition, would keep competition vigorous. In fact, the Commission was right. Union Pacific, at the request of an agency in California, had studied the rates in these 3-to-2 markets before and after the UP/MKT merger which was consummated in 1988. What they found was that in all cases, rates had decreased significantly, confirming the Commission's conclusion that competition would be intensified by moving from three railroads, one of which, MKT, was a weak third, to two strong rail competitors. The evidence is overwhelming that a mere reduction in the number of railroads does not stifle competition and, in fact, can enhance it where the effect is to add to the efficiency of the merged carriers and to their ability to offer new services. Furthermore, there is ample proof all across the country that where markets are served by two railroads with broad, equivalent networks, rail competition is intense. Perhaps the best example is a precipitous drop in Powder River Basin, WY, coal rates following the entry of CNW into the basin as a competitor, in partnership with UP against Burlington Northern. This experience of huge declines in the rates for the transportation of Powder River Basin coal is flatly incompatible with any theory that two railroads in a market will collude to keep prices at or near the level where other constraints, such as truck or product competition would cause a loss of traffic. Other examples are the intense two- railroad competition throughout the Southeast, between Norfolk Southern and CSX, and for Seattle/Tacoma and other Washington and Idaho traffic between BN and UP. The number of railroads alone is not what matters, it is the effect of the merger on competition. Absent some compelling reason for change, which has yet to appear, the current process should stand. Mr. President, let me make a few more remarks, and if other Senators come to the floor, I will certainly yield to them, but I want to continue to state my opposition to the Dorgan amendment. Since 1920, due to the unique place railroads hold in our economy, Congress has consistently found that applying a pure antitrust standard to rail mergers is inappropriate. Railroads carry roughly 40 percent of the freight in this country. These include 67 percent of new autos, 60 percent of coal, 68 percent of pulp and paper, 55 percent of household appliances, 53 percent of lumber, and 45 percent of all food products. Much of this material is delivered on a just-in-time basis. What is impressive about these numbers is that, unlike the trucking, ship, barge, and aviation industries, which operate over national systems and which are built and/or maintained by Government and open to all operators, the goods that move by rail are transported over fixed, regional systems. Due to the regional nature of railroads, much more interchange occurs than in other modes of transportation. That is, railroads hand off cargo to one another while other modes of transportation have very little of this type of interchange--truck to truck, barge to barge. As a consequence, there are natural efficiencies in these other modes that do not readily occur in the rail industry. To achieve these types of efficiencies in the rail industry, there must be consolidations. Mergers and consolidations allow the rail industry to maximize the use of its tracks, cut down on interchange points, get the most out of switching yards, consolidate terminals and, in short, provide better service to its customers at the lower cost. In the past, Congress has recognized that rail consolidations cannot occur if rails are subject to the normal antitrust tests imposed on other businesses. What makes the ICC test different? There are three major components. The first is the use of the public interest standard. When looking at a merger, the Department of Justice focuses almost exclusively on possible reductions in competition. Under a pure antitrust review, the Justice Department could deny all rail mergers, which is what happened before the public interest standard was adopted. The ICC, on the other hand, takes into account both the public benefits of a merger, in terms of increased efficiencies, better service and enhanced competition, and any harms, in terms of reduced competition and loss of service. The ICC also has the power to condition mergers to take care of anticompetitive concerns. While the Department of Justice could try to negotiate conditions, it does not have the same power and discretion as the ICC. As a result, the ICC can condition and approve mergers that are in the public interest but might normally fail a review by the Department of Justice. The second is the open and well-developed process the ICC has for reviewing rail mergers. The process includes discovery, the development of a detailed record and a full and fair opportunity for all affected parties, including Federal agencies, States, localities, shippers, and labor to be heard. The DOJ process, on the other hand, is a closed informal ex parte process in which DOJ speaks with only those persons it chooses to and hears only the [[Page S 17821]] evidence it chooses to. There is no opportunity for discovery and no opportunity to learn and to respond to what others are saying. Taken together, these first two points are extremely important. Railroads cannot be duplicated. The lines that exist today are essentially it. While spur lines and short lines may be built, there will be no more railroads built from Chicago to LA or New York to St. Louis, not in the near future at least. A fair, impartial system bound by rules and precedent where all parties can be heard is important in deciding how these systems are rationalized. A DOJ review is far more subjective. All parties may not be heard and DOJ can decide which types of traffic patterns to look at, thereby making the process unpredictable from one case to another, from one administration to another. So I think, in looking at this, we have to look at what we are dealing with in the uniqueness of railroads. We will not have more railroad lines built in this country in terms of major routes from Chicago to LA or New York to St. Louis. We will have those remaining. But the question as a public interest standard allows some flexibility on the part of the rulemaking body which will now be in the Department of Transportation. The third component is the actual approval. The Department of Justice does not approve mergers, it merely indicates whether or not the Government will bring suit to stop it. I think now under the Hart- Scott-Rodino standard, companies can get an opinion before they actually go to the expense of getting together. The ICC process brings with it a formal approval and preemption of other laws. This is important for a number of reasons. Without formal approval, abandonments or line sales contemplated by a merger will have to be approved by another agency. State laws designed to prevent or hinder mergers will not be preempted. This is particularly important to the free flow of interstate commerce. Further, private parties would not be prohibited from bringing suit to seek conditions or block the transaction. Finally, the Rail Labor Act would not be preempted. This is critical. Most railroads have 13 different unions with hundreds of different contracts. Absent the preemption of the Rail Labor Act and the imposition of labor protection conditions, the merging carriers would be forced to negotiate implementation agreements with each union under the Rail Labor Act. Because rail transportation is so vital to the economy, this act was created ``to avoid any interruption to commerce.'' The act achieves this goal by obligating management and labor to negotiate using a long, drawn-out process. Using this act to negotiate the implementation of a merger would take years. As a result, without a formal approval, even if a merger were approved by the Department of Justice it would more than likely be years, if ever, before it could be implemented. At the heart of this debate is, What is best for transportation policy? The more than 500 railroads that are in existence today are an integral part of our country's transportation system and are a linchpin in our economy. We have the best rail system in the world. The long- established national railroad merger policy has served our country well. Absent some compelling reason, there is no basis for gambling with the future of an industry that is so important to our Nation. Finally, the private parties would not be prohibited from bringing suit to seek conditions or block the transaction. Finally, the Rail Labor Act would not be preempted. This is critical. Most railroads have 13 different unions with hundreds of different contracts. Absent the preemption of the Rail Labor Act and the imposition of labor protection conditions, the merging carriers would be forced to negotiate implementation agreements with each union under the Rail Labor Act. Because rail transportation is so vital to the economy, this act is created to avoid any interruption to commerce. This act achieves the goal by obligating management and labor to negotiate using a long, drawn-out process. Using this act to negotiate the implementation of a merger would take years. As a result, without a formal approval, even if a merger were approved by the Department of Justice, it would more than likely be years, if ever, before it would be implemented. So, Mr. President, at the heart of our debate is, what is best for transportation policy? The more than 500 railroads that are in existence today are an integral part of our country's transportation system and are a linchpin in our economy. We have the best rail system in the world, although it certainly needs improvements, and the real rail rates are 50 percent lower than when the Staggers Rail Act was passed in 1980, despite a reduction of about two-thirds in the number of major railroads. The long-established national railroad merger policy has served our country well. Absent some compelling reason, there is no basis for gambling with the future of an industry that is so important to our Nation. So let me say that I very much admire the intentions of my friend from North Dakota with this amendment. This piece of legislation has been many months in the negotiating stages. My friend from Nebraska first introduced the piece of legislation, and we decided to work as a team. We had in various shippers, railroads, the public, and consulted with State public commissions. We consulted with Governors. We consulted with experts. We developed this piece of legislation that is here on the floor. It is not perfect, but it has been crafted on a bipartisan basis. We also have the support of Senator Hollings, the ranking member, and several of the Republican Senators. We feel strongly that the public interest test that the ICC has said will go with it to the Department of Transportation, we feel it would be an additional layer of regulation to add to the Department of Justice and to add the antitrust standards which we feel exists anyway, but it would be an unnecessary additional regulatory burden. We are trying to deregulate as much as possible. This amendment would put us not only into a pre-Staggers position, but we never had this much regulation. Mr. President, we had a similar debate here. I stood in this very place during the consideration of the telecommunications bill, which is now in conference. We debated between the public interest, convenience and necessity standard used by the Federal Communications Commission regarding administrative law cases as opposed to adding an additional Department of Justice review of certain telecommunications, and it was the decision of this body on a rollcall vote not to have the Department of Justice review because it is another layer of regulation. We are trying to deregulate wherever possible. We are trying in this bill to have a review but not a lot of bureaucracy. With all due respect, I must strongly oppose the Dorgan amendment. I urge my colleagues to defeat it.

Mr. PRESSLER

Mr. PRESSLER. Madam President, I do not want to hold anyone up, but I join my friend in that effort. I know at my party caucus today--if I may admit that we have caucuses--I did announce we were starting this bill at 2:15 and asked anyone who had amendments to please be here. We do not know of any amendments. We are ready to pass this bill. If any Senator or anybody listening within [[Page S 17584]] the reach of my voice knows of any amendment, please call the hotline now or we will pass this bill in a few minutes.

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

Mr. PRESSLER

Mr. PRESSLER. Mr. President, I rise in opposition to the Dorgan amendment. Let me make some general remarks on the issues surrounding antitrust and some of the standards that are used. First, let me point out that this amendment is an attempt to change [[Page S 17588]] the way the ICC looks at the competition among rail carriers, particularly whether the reduction in number of railroads at any one point is harmful. Changing the standards by which rail mergers are judged is very complicated. The current public interest standard is well established and has been in place for 75 years. Changing them now, particularly while two class one railroads are in a merger proceeding, without fully understanding how these changes affect railroads, shippers, States and even the financial markets, is not the approach this committee should take without fully understanding what we are doing. Unintended consequences could easily result. We have one of the most efficient, if not the most efficient, transportation system in the world. A large part of the system is the level of competition that exists between the transportation modes and within the modes. Merely trying to guarantee competition in the rail industry by changing how the ICC looks at competition could easily backfire. In the last 15 years, there have been roughly a dozen rail mergers, a tremendous increase in concentration when just measured by the number of railroads. However, at the same time, real rates have fallen up to 50 percent with the decreases occurring every year across all major commodity groups and in all major geographic areas. This cannot just be attributed to deregulation, because without ongoing effective competition, the productivity gains that deregulation made possible for the railroads would not have been passed through to the shippers. Without fully understanding what we are doing in this area, we could easily turn back this trend, even though we have the best intentions. As a result, I urge that this amendment be defeated. I urge my colleagues to vote against it as well. Now specifically, the ICC does not apply or follow antitrust law, though it pays very close attention to competitive issues. The rail system is the underpinning of our entire economy, and many rail efficiencies can be achieved only through mergers. The ICC applies a public interest standard, under which the public benefits, competitive or otherwise, of a merger, are balanced against any detriments, again competitive or otherwise, of a merger. This process allows the Commission to approve consolidations, even if they otherwise would violate antitrust laws. Rather than applying a narrow DOJ-type antitrust analysis, the Commission has consistently looked at all factors in deciding the competitive impact of rail mergers and has found pure concentration measures, such as the number of railroads serving a point, to be too simplistic a standard. The UP/MKT merger is a good example. In that case, a number of markets went from three railroads to two. Various parties, including the Justice Department, argued that there would be a reduction in competition in those markets and that conditions should be imposed to introduce additional rail competition in them. The Commission rejected these arguments, finding that the continued competition from a strong second railroad, the increase in competition from the merged system's introductions of new single-line routes and other service improvements and other competitive constraints, such as modal and source competition, would keep competition vigorous. In fact, the Commission was right. Union Pacific, at the request of an agency in California, had studied the rates in these 3-to-2 markets before and after the UP/MKT merger which was consummated in 1988. What they found was that in all cases, rates had decreased significantly, confirming the Commission's conclusion that competition would be intensified by moving from three railroads--one of which, MKT, was a weak third--to two strong rail competitors. The evidence is overwhelming that a mere reduction in the number of railroads does not stifle competition and, in fact, can enhance it where the effect is to add to the efficiency of the merged carriers and to their ability to offer new services. Furthermore, there is ample proof all across the country that where markets are served by two railroads with broad, equivalent networks, rail competition is intense. Perhaps the best example is a precipitous drop in Powder River Basin, WY, coal rates following the entry of CNW into the basin as a competitor, in partnership with UP against Burlington Northern. This experience of huge declines in the rates for the transportation of Powder River Basin coal is flatly incompatible with any theory that two railroads in a market will collude to keep prices at or near the level where other constraints, such as truck or product competition, would cause a loss of traffic. Other examples are the intense two- railroad competition throughout the Southeast, between Norfolk Southern and CSX, and for Seattle/Tacoma and other Washington and Idaho traffic between BN and UP. The number of railroads alone is not what matters, it is the effect of the merger on competition. Absent some compelling reason for change, which has yet to appear, the current process should stand. Mr. President, let me make a few more remarks, and if other Senators come to the floor, I will certainly yield to them, but I want to continue to state my opposition to the Dorgan amendment. Since 1920, due to the unique place railroads hold in our economy, Congress has consistently found that applying a pure antitrust standard to rail mergers is inappropriate. Railroads carry roughly 40 percent of the freight in this country. These include 67 percent of new autos, 60 percent of coal, 68 percent of pulp and paper, 55 percent of household appliances, 53 percent of lumber and 45 percent of all food products. Much of this material is delivered on a just-in-time basis. What is impressive about these numbers is that, unlike the trucking, ship, barge, and aviation industries, which operate over national systems and which are built and/or maintained by Government and open to all operators, the goods that move by rail are transported over fixed, regional systems. Due to the regional nature of railroads, much more interchange occurs than in other modes of transportation. That is, railroads hand off cargo to one another while other modes of transportation have very little of this type of interchange--truck to truck, barge to barge. As a consequence, there are natural efficiencies in these other modes that do not readily occur in the rail industry. To achieve these types of efficiencies in the rail industry, there must be consolidations. Mergers and consolidations allow the rail industry to maximize the use of its tracks, cut down on interchange points, get the most out of switching yards, consolidate terminals and, in short, provide better service to its customers at the lower cost. In the past, Congress has recognized that rail consolidations cannot occur if rails are subject to the normal antitrust tests imposed on other businesses. What makes the ICC test different? There are three major components. The first is the use of the public interest standard. When looking at a merger, the Department of Justice focuses almost exclusively on possible reductions in competition. Under a pure antitrust review, the Justice Department could deny all rail mergers, which is what happened before the public interest standard was adopted. The ICC, on the other hand, takes into account both the public benefits of a merger, in terms of increased efficiencies, better service and enhanced competition, and any harms, in terms of reduced competition and loss of service. The ICC also has the power to condition mergers to take care of anticompetitive concerns, while the Department of Justice could try to negotiate conditions, it does not have the same power and discretion as the ICC. As a result, the ICC can condition and approve mergers that are in the public interest but might normally fail a review by the Department of Justice. The second is the open and well-developed process the ICC has for reviewing rail mergers. The process includes discovery, the development of a detailed record and a full and fair opportunity for all affected parties, including Federal agencies, States, localities, shippers and labor to be heard. The DOJ process, on the other hand, is a closed informal ex parte process in [[Page S 17589]] which DOJ speaks with only those persons it chooses to and hears only the evidence it chooses to. There is no opportunity for discovery and no opportunity to learn and to respond to what others are saying. Taken together, these first two points are extremely important. Railroads cannot be duplicated. The lines that exist today are essentially it. While spur lines and short lines may be built, there will be no more railroads built from Chicago to Los Angeles or New York to St. Louis, not in the near future at least. A fair, impartial system bound by rules and precedent where all parties can be heard is important in deciding how these systems are rationalized. A DOJ review is far more subjective. All parties may not be heard and DOJ can decide which types of traffic patterns to look at, thereby making the process unpredictable from one case to another, from one administration to another. So I think, in looking at this, we have to look at what we are dealing with in the uniqueness of railroads. We will not have more railroad lines built in this country in terms of major routes from Chicago to Los Angeles or New York to St. Louis. We will have those remaining. But the question is a public interest standard allows some flexibility on the part of the rulemaking body which will now be in the Department of Transportation. The third component is the actual approval. The Department of Justice does not approve mergers, it merely indicates whether or not the Government will bring suit to stop it. I think now under the Hart- Scott-Rodino standard, companies can get an opinion before they actually go to the expense of getting together. The ICC process brings with it a formal approval and preemption of other laws. This is important for a number of reasons. Without formal approval, abandonments or line sales contemplated by a merger will have to be approved by another agency. State laws designed to prevent or hinder mergers will not be preempted. This is particularly important to the free flow of interstate commerce. Further, private parties would not be prohibited from bringing suit to seek conditions or block the transaction. Finally, the Rail Labor Act would not be preempted. This is critical. Most railroads have 13 different unions with hundreds of different contracts. Absent the preemption of the Rail Labor Act and the imposition of labor protection conditions, the merging carriers would be forced to negotiate implementation agreements with each union under the Rail Labor Act. Because rail transportation is so vital to the economy, this act was created ``to avoid any interruption to commerce.'' The act achieves this goal by obligating management and labor to negotiate using a long, drawn-out process. Using this act to negotiate the implementation of a merger would take years. As a result, without a formal approval, even if a merger were approved by the Department of Justice it would more than likely be years, if ever, before it could be implemented. At the heart of this debate is, What is best for transportation policy? The more than 500 railroads that are in existence today are an integral part of our country's transportation system and are a linchpin in our economy. We have the best rail system in the world. The long- established national railroad merger policy has served our country well. Absent some compelling reason, there is no basis for gambling with the future of an industry that is so important to our Nation. That is an important point. The second point is, the Senator from South Dakota spoke of deregulation. I am probably much less a fan of deregulation than he or some others in this Chamber. There are certain areas in our country where regulation, I think, is critical, where, without regulation, you get price gouging, you get pricing outside of a free market that disadvantages consumers. I will give some examples of that. While I say this, I am not opposed to all deregulation. Some of it has been just fine. But the Senator from South Dakota and I come from States that are sparsely populated, and we often, especially in the area of transportation, suffer the consequences of a deregulated environment in which, without competition, they extract prices that are unreasonable. I used an example of the airline industry in the Commerce Committee that the Senator from South Dakota will recall. I held up a picture of a big Holstein milk cow, called Salem Sue. It is the world's largest cow. It happens to be metal, but it is the largest cow. It sits on a hill about 25 or 30 miles from the airport in Bismarck, ND, if you drive down Interstate 94. I pointed out, if you get on a plane here in Washington, DC--and I admit, there are probably not a lot of folks who have an urgent desire to go see the world's largest cow just for the sake of going to see the largest cow--but if your desire is to go from Washington, DC, to see the world's largest Holstein cow, 30 miles from the Bismarck airport, you will pay more money for that trip than if you get on an airplane in Washington, DC, and fly to London to see Big Ben. Or, let us decide you want to see Mickey Mouse and decide to fly to Disneyland in Los Angeles. You fly twice as far and pay half as much as getting on an airplane here and flying to Bismarck. Question: Why would that be? Answer: Because we do not have substantial competition. We do not have the kind of competition in the airline industry that you have if you are in Chicago or Los Angeles. There, if you show up at the airport you have dozens of choices, all competing against each other, and the result is attractive choices at lower prices. But, with deregulation in the airline industry, we have fewer carriers, fewer choices, and higher prices. Now, deregulation is not always a boon to areas of the country that are sparsely populated. When you talk about deregulation with respect to railroad carriers, you must find a way, it seems to me, to provide protections for consumers. My concern about all of this is that the consumers be afforded an opportunity to have a price in the open market system or the free market system that is a fair price. We can foresee circumstances, and we have already seen some in this country, where the prices charged in areas where there is not substantial competition are prices far above those that should be charged. I mentioned earlier that my amendment is not directed at any carrier or any company or any merger. I mentioned I was interested in the telecommunications legislation, and I rose to offer an amendment including the Department of Justice there. I also have been involved in similar issues. About 3 weeks ago, I asked the Banking Committee in the Senate to hold hearings on bank mergers. This is not a newfound interest of mine. I was on a program awhile back and they asked me about my interests in having hearings on bank mergers. We were talking about a specific merger where two very large banks were combining and merging to be a much, much larger bank. They said, ``Does that not make sense? Two banks become one and you are able to get rid of a lot of overhead and lay off 6,000 or 8,000 people. Does it not make sense to be more efficient?" I said, ``Following that logic, it makes sense to have only one bank in America, just one. That way you do not have any duplication. Of course, you do not have any competition either.'' Following this to its extreme, this notion of efficiency without caring much about what it does to the free marketplace and without caring much about what violation occurs to the issue of competition, I suppose you could make a case that in every industry the fewer companies the better, because the fewer companies the more efficient you are going to become. You can lay off people. Of course, it would not be very efficient for consumers, because you can then engage in predatory pricing and no one can do very much about it. The point I am making is, I am not here because of a railroad or a merger. I have been involved in the issue of bank mergers, calling for hearings at the Senate Banking Committee in recent weeks on that. I have been on the floor on several other merger issues. I hope that the Senate will take a look at this and decide this makes sense. If it does not, at the next opportunity I will again raise this issue. Frankly, there are not many people in the Senate, or the House, for that matter, who care to talk much about antitrust issues. First of all, it puts most people to sleep. You know, it is [[Page S 17590]] better than medicine to put people to sleep. Nobody cares much about it. Nobody understands it much. It is, to some people, just plain theory. But, if you are a shipper and you are somewhere along the line someplace and the company that has captured the competition and is now the only opportunity for you to ship says to you, ``By the way, here is my price; if you do not like it, tough luck,'' all of a sudden, this has more meaning than theory. If you are a traveler on an airline and you have no competition when you used to, but now the only remaining carrier that bought its competition and became one says to you, ``By the way, here is my price; if you do in the like it, do not travel,'' then this is more than theory. That is what persuades me to believe that in a free market system, if you preach competition but do not care very much about whether meaningful competition exists, or whether we have adequate enforcement of antitrust standards, then in my judgment you do no favor to the free market economy. I hope people will consider this on its merits and consider that it would be wise for our country and for public policy to ask that this legislation be amended with the amendment I have offered, along with Senator Bond. Mr. President, I yield the floor. I make the point of order a quorum is not present.

Mr. PRESSLER

Mr. PRESSLER. Yes. I amend that by saying at the hour of 4:55 p.m., the Senator from California will offer her amendment, and then at 5 o'clock we divide up the time. I want everybody to speak as much as they wish.

Mr. PRESSLER. I will give him half my time.

Mr. PRESSLER. I further ask unanimous consent no amendment be in order to the Dorgan amendment and the amendment be laid aside at 5 p.m.

Mr. PRESSLER

Mr. PRESSLER. Mr. President, I yield myself 2 minutes to say I urge all Senators to vote against the Dorgan amendment. We have taken care of the problems which the Senator from North Dakota raised in this bill. This is a carefully crafted bill which Senator Exon and I and others have worked out over months of negotiation and this is unnecessary additional regulation. I rise in strong opposition to the Dorgan amendment. I urge all Senators to vote against it. I reserve the remainder of my time and, Mr. President, I suggest the absence of a quorum and I ask unanimous consent that time be charged equally.

Mr. PRESSLER. Mr. President, reserving the right to object--and I do not want to object--some of the Members may want to have a chance to speak on the amendment. I am trying to find a way here to cooperate quickly. But we do not know what the amendment is.

Mr. PRESSLER. Yes.

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

Mr. PRESSLER. Mr. President, I send an amendment to the desk to modify the manager's amendment. This amendment just changes one word, and it has been agreed to by both sides of the aisle. I send the amendment to the desk.

Mr. PRESSLER. Mr. President, I suggest the absence of a quorum.

Mr. PRESSLER

Mr. PRESSLER. Mr. President, I send the enclosed bill to the desk and ask for its first reading.

Mr. PRESSLER. I now ask for its second reading.

Mr. PRESSLER. I object to my own request.

Mr. PRESSLER

Mr. PRESSLER. Mr. President, I am opposed to sending troops to Bosnia based on the information I now have. I base that judgment, in part, on my own experience as a lieutenant in the Army in Vietnam many years ago. It has been my observation that our soldiers have a very hard time in a civil-war situation in another country, and that is because our soldiers are frequently used essentially as shields. We value human life so highly that we react very strongly to any body bags coming back or to any casualties, as we should. There is probably no other country in the world that reacts to its soldiers being killed or captured as we do in the United States, and again, Mr. President, we should act that way. Any action by our soldiers will be shown on television in living color. If there are any funerals, they will be a nationwide event. U.S. soldiers become shields and hostages and symbols very quickly. If we had a vital interest that we could accomplish there, I would be for [[Page S 17602]] it. Unfortunately, it is my strong feeling that the various civil wars in Yugoslavia since the 15th century have been augmented by virtue of having foreign troops come into what is now Yugoslavia and enter into the civil war. The current civil war there has been extended because foreign troops have come. Let us analogously consider our Civil War in the United States. There were not foreign troops involved, and it was settled. It was a bloody, gruesome war, but it was settled. Let us just imagine foreign troops had come to our Civil War. We probably would still be fighting it today. What is happening in Yugoslavia is that they are on the border between East and West, between the Moslem world and Christian world, between all the empires of the East and West. Every time they have a civil war, foreign troops come and get involved, and we are part of that pattern. We are doing the same thing. I do not believe our troops are going to be able to solve the problem there. I think they are going to be shields and hostages. I think, as occurred in Haiti, our best intentions will not result in our intended consequences. We are receiving reports that in Haiti, all the money our taxpayers spent, plus the presence of the U.S. troops, have been for nought, because now President Aristide is indicating he wants to stay on, or at least that has been the indication. There is rioting in the streets, and it does not seem we accomplished the objectives the taxpayers were asked to pursue. So I know our President is acting in the best faith, but based on my personal experiences as a soldier in Vietnam, I believe this is a mistake. Some people have said to me, ``Are you willing to support the President?'' Of course, I want to support the President, but I have a great deal of difficulty because of my personal experiences. I served two tours of duty in Vietnam as a lieutenant and based on that experience, I am opposed to our troops going into Bosnia. Mr. President, I yield the floor, and I suggest the absence of a quorum.

Mr. PRESSLER

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

Mr. PRESSLER. Mr. President, I ask unanimous consent to speak for 5 minutes as in morning business.

Mr. PRESSLER

Mr. PRESSLER. Mr. President, I commend my colleague from Missouri for his leadership, and we look forward to him revisiting this issue again. At this time, I ask that the bill be read the third time.

Mr. PRESSLER. Mr. President, I ask unanimous consent that the Commerce Committee be discharged from further consideration of H.R. 2539, the House companion, and that the Senate immediately proceed to its consideration.