Rick Santorum

Mr. SANTORUM

Mr. SANTORUM. I move to lay that motion on the table. The motion to lay on the table was agreed to. Vote on Motion to Table Amendment No. 970

Mr. SANTORUM

Mr. SANTORUM. Will the Senator from Arizona yield for a question?

Mr. SANTORUM. Once they understood that the Vice President could be implicated in this testimony, he called the Justice Department, not the Justice Department called him; is that your understanding?

Mr. SANTORUM. Your sense of the timing of the Democratic counsel's contact with the Justice Department was after the New York Times article----

Mr. SANTORUM. Democratic counsel; minority counsel is the Democrats' counsel.

Mr. SANTORUM. After the front-page story that morning, the story that implicated the Vice President with respect to knowledge of the fundraising scheme, Senator Daschle came forward and said, ``You're not going to get any support for allowing these people to testify under a grant of immunity,'' and then what? The Justice Department changed its mind overnight.

Mr. SANTORUM. I want to make sure I understand this. What you are suggesting is, prior to this story in the New York Times that Vice President Gore knew, was involved and had knowledge, of this fundraising activity, that the Justice Department was not objecting to allowing witnesses to come and be granted immunity before the committee, and there seemed to be a recognition that these people were not the target of the investigation--they were called conduits--and, as a result, should be able to come to the committee and testify under immunity; that was the state of play before this article.

Mr. SANTORUM. Will the Senator from Arizona yield for a question?

Mr. SANTORUM. When in fact the chairman has said--and I think it has come out since then, that the FBI and CIA in fact cleared that statement and in fact had made some changes, I think one change in one word, is my understanding, one change in one word to the statement that the chairman read, and that they cleared that statement, that this letter was in fact erroneous, that this letter was put forward by someone who I think you suggested probably had no knowledge of what was right or wrong.

Mr. SANTORUM

Mr. SANTORUM. Mr. President, I rise in remembrance of the 228 victims of the TWA airline crash off the Long Island coast which occurred just 1 year ago today. In that accident, the community of Montoursville, PA, lost 16 of its young citizens--students from the local high school who were traveling abroad as members of the school's french club--and 5 adult chaperones. While its cause remains unknown, I believe it is critical that our remembrance of the accident not be defined by this uncertainty, difficult as it is for those who mourn the death of family and friends. Because we do know, with certainty, what we lost: sons, daughters, classmates, as well as mothers, fathers, and neighbors. We know of their contributions to their communities, schools, and professions. We know, especially in the cases of the youngest victims, of their promise and of their vitality. We know of their importance in the lives of their families. It is with this sure knowledge of who the victims were and of what they did in their lives that we should remember them. The loss of the young Pennsylvania students--and all the members of that flight--to unexplained tragedy is terrible to bear. I know that the Montoursville students were the pride of their community. Responsible and accomplished students, cherished sons and daughters, they undertook the much-anticipated trip to France with gratitude, excitement and hope. By remembering them in this way perhaps we will always somehow know their presence in our lives.

Mr. SANTORUM

Mr. SANTORUM. I share the concerns expressed by Senator Robb and have asked the Defense Contract Audit Agency to give me a detailed explanation of their current position on this dispute.

Mr. SANTORUM. I agree with your understanding. You accurately describe my view of the intent of section 824.

Mr. SANTORUM

Mr. SANTORUM. I am happy to take it off my time. Does your amendment limit the cap just to executives?

Mr. SANTORUM. Will the Senator yield?

Mr. SANTORUM. Thank you, Mr. President. I yield myself such time as I may consume. Let me just say first in response to the Senator from Iowa's comments about the compensation levels of certain executives, No. 1, the Grassley previous amendment only applied to cost-type contracts; it did not apply to fixed-price contracts. When you negotiate a contract and say, here is the price we are going to pay you, it is a fixed price, and you produce the product for this price, we do not really care who you pay or how much you pay, just as long as you give us the product at this price. So they can pay their executives anything out of that as long as they deliver the product as per the price. Also these companies that have been listed by the Senator from Iowa, many have very large and substantial commercial entities who are not limited at all to what they pay their executives on that. So to suggest that there is some error here, some problem here, I just do not think is accurate. I think it is accurate to suggest that this approach does not work and is wrong, and I will go through as to why I believe it is. But to suggest that there is something funny going on here, I think is simply not accurate. Let me first start by saying what the Subcommittee on Acquisition and Technology did when it was presented with this issue. Last year, in the authorization bill, we requested the administration to come up with a suggestion on how to deal with this issue because the Congress every year seems to deal with this issue of setting levels of caps on compensation for, quote, ``executives.'' The administration came back with a suggestion. The suggestion had four parts. No. 1 was to limit the reimbursement of senior executive salaries to the median salary of executives in companies of similar size. Now, what does that mean? They take the large corporations and they figure out--they take the median salary of the large corporations, then the medium size and the small, and they have different compensation levels. The problem with that is that the committee saw that for some corporations, the large ones, the average median compensation was $4 million. To set a cost cap at $4 million does not appear to be much of a cost cap, even to this Member who does not particularly agree with the Senator from Iowa on compensation levels. So we decided to go back and relook at that. They did do some things that we adopted. No. 1, they defined executive compensation, which had not been done before, and we have adopted that definition in the committee's mark. I believe the Grassley-Boxer or Boxer-Grassley amendment adopted that definition of compensation. So on that we agree. We also disagree on the people that it should apply to. The administration has suggested just the top five most highly paid executives of the contractors should be limited here. The Boxer- Grassley amendment covers everybody. I will explain later why I think that is a problem. Senator Lieberman and I, the ranking member on the subcommittee, worked on what we thought was a compromise, something that was workable and took care of the concerns that I will enumerate in a few minutes. The compromise was to take the median salary of all companies who have sales over $50 million. So if you have sales over $50 million and you take the median salary from those executives, we came with a figure of $340,000. So $340,000 would be the cap under ours. Now the administration opposes this cap. The administration believes this is too low. Now, what Senator Boxer and Senator Grassley are suggesting is even going below what the administration believes is too low. But we believe this is a reasonable level to go. Now, why? Let me just explain what I believe is sort of the reality of what this amendment is. This is a huge antismall business amendment. Why? As you saw from Senator Grassley's chart, the big corporations do not have any problem paying their executives, particularly ones that are diversified, because they have price-type contracts, they have commercial business, so they can pay their executives from a variety of sources. The folks that really get nailed by this are the small businesses who do primarily defense work. They are the ones whose compensation is effectively capped at the level we set here. You say, what is the big deal? The big deal is these small businesses are in a very competitive industry and, yes, they are competing for high-priced talent, not just in managerial, and we limit it to managerial, the top five executives--but they compete even more fervently. Remember, what are we moving to in the Defense Department? We want high technology. We are drawing down our defense. We hope to be investing more and more into high technology. We want our vendors to be more efficient, more high technology. I will read from the Information Technology Association, what they suggest this amendment will do to, I believe, small contractors in particular, and I will quote from a July 2 letter from the Information Technology Association of America to the Chairman, Strom Thurmond. It will limit the government's ability to contract for personnel with specialty technology skills. A recently completed Information Technology Association of America study found that there are approximately 190,000 unfilled technology positions nationwide, with almost 20,000 unfilled positions just in the Washington metropolitan area. The shortage is even more acute for people with cutting edge skills who command far more than $200,000 in wage and benefits in the marketplace. What I am suggesting here that this amendment will do is it will not hurt McDonnell Douglas, it will not hurt Boeing, it will hurt the local organization in your community, the small business who is competing for defense contracting work, trying to get the best technology available, the highly skilled people who are in very competitive prices, and they will not be able to employ them. They will not be able to keep them. I am surprised some of the big businesses do not love this, that they are not supporting the Grassley-Boxer amendment. This is a boon to big business because it lets them cherry pick all these skilled people to employ them at their business because the small contractors simply cannot do it under this amendment. Now we improve things a little bit. We allow them to go up to $340,000. You hear $200,000 is the salary of the President. Well, $200,000 is about one-quarter what a shortstop hitting .190 for the Baltimore Orioles makes. If we are going to compare worth here, who is more important to the future of our country--someone who will redesign the air traffic control system in this country to make it safer and use the high technology and the skills they have, or someone hitting .190 for the Pirates? I think the answer is pretty clear. But on this floor, they are saying that guy hitting .190, we can pay him anything we want, but the guy who has high technology skills, the guy who has the skills that can add to the national security of this country, we cannot have. They will go off to Hollywood and make movies. That is where they go. They go to Hollywood and they make action pictures instead of redesigning systems to make our Nation more secure for the future. This is an unwise piece of legislation. This really does strike at the core of what the future is for our country. I will be honest. I frankly do not care if the CEO's of some companies do not make a lot of money. What I do care about is that we have the scientific expertise employed in the defense industry to move our country forward, to stay ahead. This amendment will hurt national security. This amendment will limit our ability to get the best and the brightest into the defense industry and keep them there, particularly for the small entrepreneurial companies and the small companies that get involved in the defense industry. So this hurts national security. It devastates small business' ability to compete. Just for those two reasons alone we should be against this amendment. I hope we do not get blinded by what appears to be populist. It looks populist to say we should only pay certain people who get paid from the Government a certain amount of money, except for the fact that when you do that, you lose good people and you hurt small business, both of which are vital to the national security of this country. I reserve the balance of my time.

Mr. SANTORUM. Mr. President, I am controlling the time for the majority on this.

Mr. SANTORUM. It seems to me that the Senator from Tennessee has raised several important concerns. The Department of Defense clearly has a responsibility to fully review each of its programs using carbonizable rayon fiber and make certain it has planned for future needs before allowing the Nation's only domestic supplier to go out of business.

Mr. SANTORUM. It is my understanding that the Department of Defense has procured its identified requirement for this material.

Mr. SANTORUM. Could I interrupt the Senator from Tennessee and ask where the Department of Defense would turn for carbonizable rayon fiber in the future?

Mr. SANTORUM. Mr. President, Senator Lieberman, who is on the subcommittee, looked at this issue and asked the administration last year to come up with a proposal. They came up with a cap of $4 million. We didn't think that was particularly salable on the floor of the U.S. Senate. So we came up with a different calculation that put the cap at $340,000. That is the median salary of the executives of companies that have sales of over $50 million. What this amendment does is lower that cap to $200,000, and in so doing it applies to not just executives but scientists--people who are in demand, who are going to be taken away from high-technology firms and national defense and are going to other places where they can make a lot more money because they are going to be capped under this amendment. This is a bad amendment. It is going to hurt national security. It also hurts small businesses, because those are the businesses that are primarily defense businesses that are not going to have the opportunity to compensate their employees from other sources like commercial entities. I encourage a strong no vote on this. I yield the remaining time to the Senator from Connecticut.

Mr. SANTORUM. I cannot be any more eloquent than the Senator from Connecticut in defending this position. I urge the Members to look at this issue and to stay away from this populist appeal and look at the impact, as the Senator from Connecticut said, on small business and on high-technology firms that desperately need to get out there and compete in the marketplace. I yield back the remainder of my time.

Mr. SANTORUM. How much time?

Mr. SANTORUM. Mr. President, I have sympathy for what the Senator from Iowa is saying. The fact of the matter is the amendment doesn't accomplish what he wants to accomplish. We will be back here next year, if the Senator's amendment passes, with the same because all the Senator's amendment does is limit cost-type contracts. It does not limit those contracts in which we purchase things from contractors for a fixed price. We tell them when we purchase it for a fixed price, You can pay whoever you want. You can pay whatever you want for the material. You can pay the executives anything as long as you deliver the product at this price. So they allocate some substantial portion or what looks like at least some portion of these contract dollars. That is perfectly legal. If the Senator wants to say that we should not do any fixed-price contracts, come with an amendment that says that. If he comes with amendment that says we don't limit fixed contracts --I don't think he would support it, but the Senator from California supports it--then we can deal with this issue. But if all you are going to deal with is one type of contract which is cost, then go out and show compensation levels that include moneys from fixed-pricing contracts. That is what they have done. So for all of the passion--and I believe in the passion of the Senator from Iowa, and the Senator from California--it doesn't solve the problem; at least what they perceive as the problem. What I perceive as the problem with their amendment is it does hurt since technology and the highly competent people we need to be in the national security area. And, frankly, not just national security but in all areas of Government, if we can get them. As I mentioned before, wouldn't it be nice if we had a more modern upgraded air traffic control system? And we have the ability to pay scientists the amount of money in contracts to be able to design those. Under this amendment we could not get the best and the brightest to do that. So what this executive compensation amendment really effectively does is limit the amount of money that we can pay people in the high- technology field, the scientists and the information specialists that we need to move the national security front forward. So for that reason alone it should be soundly defeated. We cannot afford, as we draw down defense, as we reduce our troop levels, as we continue to rely more and more not only on high-tech--which is certainly something we rely more upon, high technology but on commercial technology and commercial contracts--contracts with commercial organizations who will steer clear of Government contracts, if they are going to be limited in how much they can reimburse their scientists and other personnel through their technology that they are sharing, because if they limit it they have to pass that cost on to their private sector clients which makes them uncompetitive. So they will choose not to compete in the defense area. So we lose valuable commercial technology. So we are not only losing the scientists. We are losing the opportunity in the commercial area. We are creating a disincentive for people to be involved. And, even with all of that, if we adopt the amendment, it wouldn't work. So it accomplishes all those negative things, and the one positive thing they choose to accomplish it does not accomplish because it does not limit anybody's salary except those small businesses that have primarily cost-type contracts. Those small businesses, 80, 90 percent of the contractors that have principally cost-type contracts, they get nailed by this amendment. All the big guys it does not bother. It nails the small companies and their ability to compete, to get compensated for the technology that they are inventing in many cases and to get good people to work in those businesses in towns all across America. This is a dangerous amendment for national security. It is an amendment that I hope is overwhelmingly rejected. It is an amendment that I know the Senator from Connecticut, the ranking member, opposes and I know the ranking member on the full committee, Senator Levin, opposes. They support the underlying committee decision which, I would add, is opposed by the White House because they believe our cap is too low. I know that this amendment has passed in the past, and the Senator from California said it was passed overwhelmingly, but I would implore that the Senate come to its senses in this case and realize its impact. I now yield the remaining part of my time to the Senator, the ranking member, from Connecticut, Mr. Lieberman. Mr. LIEBERMAN addressed the Chair.

Mr. SANTORUM. I yield to the Senator from South Carolina such time as he may consume.

Mr. SANTORUM

Mr. SANTORUM. Mr. President, I rise today to commend some students from Landisville, PA, for their outstanding effort in the We the People. . . . The Citizens and the Constitution national finals. In this competition, 20 students from Hempfield High School participated in a simulated congressional hearing. Testifying as constitutional experts, they argued points of law before a panel of judges. By all accounts, they demonstrated a remarkable understanding of the American constitutional government. Mr. President, I ask my colleagues to join me in congratulating Paul Brewer, Lauren Charles, Benjamin Coons, Andrew Fergusson, Michael Hollinger, Noah Hunt, Derrick Karimi, Rebecca Kinsey, Benjamin Kornfield, Nathaniel Kraft, Rachel Moore, Derick Mundey, Elizabeth Myers, Megan Newcomer, Alison Miebanck, Jessica Petocz, Stella Reno, Melissa Sanders, David Stairs, and Brandon Zeigler, and their teacher Elaine Savukas for their outstanding performance. I urge these young people to use the knowledge they acquired from this experience to continue upholding the principles that have made this country great.