July 16, 1982 EXTENSIONS OF REMARKS 16679 EXTENSIONS OF REMARKS THE ENTERPRISE ZONE The enterprise zone program will help chance to prove the worth of the experi­ PROPOSAL new businesses, primarily. It will give them ment. a chance to get started and the opportunity Applications which depend on the Federal to grow, providing two important ingredi­ incentives along will not compare favorably HON. WILLIS D. GRADISON, JR. ents to turning around a distressed area: with applications that cut redtape and taxes OF OHIO Create jobs within the most economically at the state and local level, involving neigh­ IN THE HOUSE OF REPRESENTATIVES depressed areas, particularly for lower borhood groups in the program, and experi­ Thursday, July 15, 1982 income and minority workers, and ment with improving public service through Redevelop and revitalize these places of a greater involvement of the private sector. e Mr. GRADISON. Mr. Speaker, as decay and despair. I have been asked what factors I will one of the original cosponsors of H.R. The President's proposal for enterprise weigh when making my decisions, and what 6009, I have followed the progress of zones is a good one, and its chances for suc­ enterprise zone applications should contain, the enterprise zone proposal with par­ cess are excellent. Many earlier attempts to but I want to wait until the legislation is ticular interest. There is widespread solve the problems of physical decay and passed and signed by the President before I economic stagnation depended almost en­ speculate. In any case, I firmly believe the support in this House for innovative tirely on Federal grant programs. This pro­ creativity and innovation shown by so many methods to revitalize our decaying gram, to the contrary, seeks to get Govern­ state and local governments will guarantee inner cities. ment out of the way in order to stimulate far better proposals than any I might specu­ Because my district includes a large both private investment and local public ini­ late about now. inner city area, I have seen firsthand tiatives. I have said that I think there is a good the need for new approaches to aid Cities will be able to coordinate this pro­ chance for success with the program. Let urban areas. The direct spending poli­ gram with existing efforts now underway in me be clear that this is not the "be-ail-and­ cies of the past have been limited suc­ distressed sections. Enterprise zones will not end-all" for urban areas. There are no in­ cesses at best. While enterprise zones replace the Community Development Block stant solutions for these longstanding prob­ Grant or Urban Development Action Grant lems. Only a recovered nation's economy cannot perform miracles, nor can they programs, and in fact, both of these proven and the full success of the President's over­ stand alone as an urban policy, they programs can be used as a major stimulus in all program hold out long term, permanent offer a much-needed new dimension to a zone. solutions. our efforts to aid cities. The crux of This will not be a HUD-run program. But until that time, the idea of helping that new dimension is the emphasis on State and local governments will design and the people and places in greatest need is private sector job creation, a focus make their own contributions to enterprise something all of us in the Reagan Adminis­ which has been lacking from past pro­ zones and develop creative initiatives to tration feel deeply that we want to do. But grams and which is vital to the suc­ help new businesses take root and grow. instead of Government spending, inner-city The role of the Department of Housing and residents need opportunities. A job is the cessful revival of any urban area. Urban Development will be to select the best social program. In a recent article in the Cincinnati best applicants to participate in the pro­ This is the focus of the enterprise zone Herald, Samuel Pierce, Secretary of gram-up to 25 per year for 3 years. concept. The program will identify and Housing and Urban Development, The incentives in our proposed le~lation remove Government barriers to entrepre­ clearly and succinctly explains how en­ are substantial, whether the new business neurs who are capable of creating jobs and terprise zones will work, and how, in calls for a staff of one, or a factory force of economic growth. It will draw out and build conjunction with certain existing Fed­ 1,000. It allows state and local governments upon existing talents and abilities already eral programs, enterprise zones can be to balance incentives for employers, employ­ present in depressed areas. It will call for an important catalyst for urban devel­ ees, entrepreneurs, and neighborhood the kind of imagination and innovative local opment. I wholeheartedly recommend groups, depending on local needs. leadership and private initiatives needed to Regulatory relief can also be substantial bring renewed hope for our ailing communi­ this article, which is printed below, to in an enterprise zone, depending once again ties throughout the Nation. all of my colleagues, but especially to on local needs. State and local governments With the cooperation of the Congress, those who have expressed reservations will be authorized to request relief from this idea will have a chance to prove its about enterprise zones. Secretary Federal regulatory agencies. However, no worth.e Pierce's description of the proposal rule will be lifted which would affect civil should provide answers to many of the rights protections, the public health, safety questions raised about this legisation. or welfare, or the minimum wage for zone FOREIGN POLICY AND ARMS The article follows: workers. CONTROL IMPLICATIONS OF A significant amount of regulatory relief CHEMICAL WEAPONS [From the Cincinnati Herald, June 5, 19821 will come at the State and local levels. In a AN AMERICAN REVOLUTION IN TROUBLED number of our recent cooperative efforts CITIES with local governments, we've seen that HON.CLEMENTJ.ZABLOC~ United States should It also offers hope that our most distressed and State governments, we at HUD will areas can reverse their present fate, and compare all the applications submitted. The resume production of chemical weap­ create opportunities for thousands of disad­ process is designed to be competitive be­ ons-after a 13-year moratorium on vantaged people. cause we want to give the best proposals a such production.

e This "bullet" symbol identifies statements or insertions which are not spoken by the Member on the floor. 16680 EXTENSIONS OF REMARKS July 16, 1982 Our colleagues in the other body and later transferred to Boston Uni­ ment? A search for power . . . perhaps. A have already expressed their concern versity where he graduated cum laude sense of dedication ... possibly. Or maybe over the binary chemical weapons pro­ in systematic theology. the sense of duty to respond to a call from gram by adopting an amendment to Dr. Anderson has always been a cou­ his President. the fiscal year 1983 Defense authoriza­ rageous civil rights fighter. He carried Robert P. Nimmo, Administrator of Veter­ tion bill which prohibits U.S. produc­ the struggle to Atlanta, Selma and ans Affairs, did not seek the position he holds. It sought him. Just as he did several tion of chemical weapons for our allies Montgomery, Ala. He participated times before as a soldier, he answered his in Europe unless those allies request with others in the march to integrate country's call. U.S. chemical weapons and agree to the Georgia State Legislature. Whether Robert Nimmo would answer the pre-position them on their territory. He served as director of public rela­ call if it came today is questionable. In spite This amendment, which passed by a tions for the Western Christian Lead­ of being a capable and effective Administra­ vote of 92-0, resulted from testimony ership Conference under the late Dr. tor, he has come under severe barrages. in the other body earlier this year that Martin Luther King. Later, he was ap­ Some criticism is warranted, much is not. the preponderance of binary artillery pointed a Ford Fellow to study urban His biggest problem has been his inexperi­ planning, designing, strategy, and ence in knowing how the game is played in production would not be for U.S. the nation's capital. A person in public life forces, but for allied use. management. in Washington, D.C. does not honestly and Clearly, the views of our friends and Dr. Anderson served as president of frankly express himself. He speaks general­ allies in Europe-on both binary mod­ the Northern California NAACP for 4 ly to express nothing, for to voice a truism ernization and chemical weapons arms years. He served as a councilman and could result in the vultures descending in control-are of critical importance mayor of the city of Richmond, he was droves. when making a decision on resumed a member of the Contra Costa Civil And there is no denying that the Adminis­ chemical weapons production. Service Commission for 10 years, 4 of trator has committed several faux pas It is for this reason that I wrote to which he served as president. He was which have antagonized the various service also a member of the San Francisco organizations. For this, his wrists have been the President on January 7, 1982, ex­ slapped and they probably will be again in pressing concern that a binary produc­ Housing Authority and was later ap­ the future. Undoubtedly by now, the Ad­ tion decision at this time could under­ pointed to the San Francisco Commu­ ministrator understands and accepts this. mine far more important and funda­ nity College Board. Presently, he is an But muck.rak.ing is something else. It has mental foreign policy interests-such elected member of that board. He has no place in our society. None should be ex­ as TNF deployment and cooperation been a lecturer at the University of posed to it. And certainly a public servant of on Poland-of the U.S. Government California and the San Francisco Mr. Nimmo's caliber should not be subjected and the NATO alliance. Theological Seminary. to its abuse. Criticism of his public utter­ Dr. Anderson is married and has two ances is one thing. Reflecting on his integri­ The Soviet submission last month at ty by slanting or concealing the facts is an­ the United Nations of a chemical war­ sons, one enrolled at the University of other. fare arms control proposal offers a California and the other at Dart­ Which brings us to the allegations con­ real opportunity to pursue a negotiat­ mouth University. cerning his remodeling of the executive of­ ed ban as opposed to production on Rev. Dr. Anderson is pastor of Jones fices and his use of a government vehicle. new lethal chemical weapons. Memorial Methodist Church in San During a past month or so, the Adminis­ The Soviet proposal contains a Francisco. trator was attacked on consecutive days on I join with Dr. Anderson's many television for his extravagances in refur­ number of significant changes from friends and admirers in recognition of bishing his executive offices and his use of a the past, the most important of which his dedication and contributions to his chauffeured car. This was followed by press relate to verification of a chemical country, his community and his fellow attention at appropriate, calculated inter­ weapons arms control agreement. man.e vals, with articles expounding the theme of It is the Chair's view that the very his extravagant abuses at the expense of fact that the Soviets took the initia­ the veterans. tive and tabled this proposal, and ad­ THE OTHER SIDE OF THE VET­ What the original fuss was all about was ERANS ADMINISTRATION CON­ that Nimmo's offices were remodeled at a dressed the substantive issue of verifi­ cost of $54 thousand. The figure is correct cation, offers the Reagan administra­ TROVERSY but the description is lacking. The inference tion a unique opportunity to resume is that it applied only to the Administrator's bilateral negotiations with the Soviet HON. HENRY J. HYDE immediate office. In fact, the cost covered Union. OF ILLINOIS the entire executive area of the southwest Let us meet the Soviets head on­ IN THE HOUSE OF REPRESENTATIVES wing of the tenth floor involving all of the resume the bilaterals-and negotiate a staff offices. The expenditures for the Ad­ verifiable ban on chemical weapons, to Thursday, July 15, 1982 ministrator's office alone was approximate­ stop this new, costly, and dangerous • Mr. HYDE. Mr. Speaker, I am sure ly $18 thousand. we have all read recent news reports Even to the most naive, this cost to ren­ arms race.e ovate the Administrator's office, the head of regarding the controversy swirling the second largest agency in personnel and around the head of the Administrator the third largest in appropriations, was not TRIBUTE TO DR. BOOKER T. of the Veterans' Administration, only reasonable but extremely modest. ANDERSON Robert P. Nimmo. As with all things, But there is more. The $18 thousand there are always two sides to a story, would not have been spent if certain HON. GEORGE MILLER but it is rare that both sides are pre­ changes were not required because of the sented. former occupant who was confined to a OF CALIFORNIA wheelchair. There were no carpets in cer­ IN THE HOUSE OF REPRESENTATIVES Therefore, in an attempt to present the other side, I want to share with tain offices and surrounding areas to facili­ Thursday, July 15, 1982 tate the locomotion of the former Adminis­ my colleagues an article which ap­ trator. And because of his handicap, he had e Mr. MILLER of California. Mr. peared in the June 24 issue of The a special chair which he took with him. Speaker, on July 21, 1982, Rev. Dr. Stars and Stripes-The National Trib­ There is no reason why the Administrator Booker T. Anderson, Jr., will be hon­ une. The author, Gabriel P. Brinsky, is of Veterans Affairs should go without a ored by the residents of the city of the national service and legislative di­ desk or carpets on his floor. Nor is there any Richmond for his many years of dedi­ rector of AMVETS, and his comments reason why he should be required to live cated service to the civil rights strug­ are well worth everyone's attention. with a VA motif wall covering which was damaged, faded, and dirty. Or to accept gle of all mankind. THE MUCKRAKERS wallpaper incompatible with the furniture. Upon graduation from San Francisco Come on! We're talking about a prominent State University, Dr. Anderson studied What brings a man, financially independ­ official in our government charged with systematic theology in Atlanta, Ga., ent, out of retirement to serve his govern- running an agency with a budget of more July 16, 1982 EXTENSIONS OF REMARKS 16681 than 24 billions of dollars. Even a middle erans. Sure, he has made mistakes and he is nary on 17 June was a recapitulation of pre­ level functionary is entitled to some perks a natural object for criticism. But if it is viously made statements on U.S. Govern­ such as a carpeted floor and a desk. Oh yes, necessary to condemn him by reason of his ment arms control policies. and even a desk chair. acts, let us be fair. There should be some su­ Obviously, as Eleanor Roosevelt once As for the shower that was installed, some perficial, shallow standards of ethics even pointed out in a statement Reagan quoted, funds were expended in providing different among the muckrakers.e "empty promises are not enough." Never­ accesses to the two half baths in the execu­ theless, the U.S. President could have pre­ tive suite. The shower and stall was stand­ sented some new proposals that would have ard prefabricated, a nonluxurious, unit. ADMINISTRATION NEEDS TO demonstrated that the U.S. Government is Surely, it is not unreasonable for the Ad­ GET SERIOUS ON ARMS LIMI­ sincere in its desire to seek nuclear arms re­ ministrator, when he needs to leave directly TATION ductions. from his office to attend an official function What could Reagan have proposed? First, to refresh himself and to avoid smelling like he could have stated that the United States yesterday's clothes. If he is expected to HON. PAUL SIMON was willing to join the Soviet Union in work and to directly repair from his place of OF ILLINOIS pledging to a "no first use" of nuclear weap­ work, the least we can do is place a shower IN THE HOUSE OF REPRESENTATIVES ons, on the conditions that the Soviet Gov­ at his disposal. ernment take immediate steps to reduce the Of course, a big deal was made over the Thursday, July 15, 1982 conventional arms arsenal of the Warsaw former Administrator's furniture which • Mr. SIMON. Mr. Speaker, one of Pact countries in Europe to bring them in Nimmo sent to his daughter in the Depart­ the things that concerns many of us is balance with NATO forces. Such a proposal ment of Commerce. Nothing was mentioned the question of arms reduction. After surely would have been greeted with loud of the fact that the former Administrator's the massive movements in the streets applause in the Assembly Hall. It would furniture was transferred to the Depart­ have also addressed the fears the NATO ment of Commerce in exchange for execu­ in Europe and the United States, this allies have regarding the superiority of tive furniture which they in turn would pro­ administration is at least paying lip­ Warsaw Pact conventional weapons in the vide to the Veterans Administration. Since service to it. I hope it is more. Motiva­ European theatre. the GSA furnishes all furniture, who got tion is a very difficult thing to judge, Secondly, Reagan could have challenged what is really immaterial. It all belongs to but I hope we are serious in our arms the Soviet Union to agree to bilateral reduc­ the government and no costs were involved. control negotiations tions in the number of nuclear weapon tests. As for the allegations relating to the Ad­ And like many, I yearn for strong In recent years, the Soviet Government has ministrator's use of a government vehicle evidence of our seriousness of purpose. conducted more such tests than the United for transportation from home to office, the States; offering to agree on reductions in Veterans Administration's Appropriation A publication called the Disarma­ this area would have cost the U.S. virtually Acts do prohibit, since 1978, such use of ment Times, published by the non­ nothing. transportation. Why the Administrator of governmental organizations who cov­ Thirdly, the U.S. could have offered uni­ Veterans Affairs should be singled out and ered the special session on disarma­ laterally to suspend production of chemical denied such transportation is not clear. ment in New York, ran an article weapons as long as negotiations on a ban on We may wonder how an Administrator titled: "What President Reagan Could chemical weapons production are proceed­ with an erratic schedule imposed by uncer­ Have Told the Special Session." ing. This proposal would have been particu­ tain demands can be denied the flexibility What they suggest here makes emi­ larly timely in view of the Soviet's state­ of repairing to his residence and reacting to ment on 16 June that it is willing, for the the demands of his responsibilities. Admit­ nent good sense to me. first time, to move in the direction of allow­ tedly, remedial legislation is needed. I urge my colleagues in the House ing onsite inspection to verify the destruc­ But apart from all this, it is questionable and Senate to read their suggestion. tion of chemical weapon stockpiles and to whether the stories released criticizing the More than that, I urge those in the verify that the ban on production of such Administrator would have achieved the White House who are involved in the weapons is being respected. same adverse impact had certain relevant decisionmaking to read this. Fourthly, President Reagan's statement information been disclosed. As one of those who was named a that the U.S. Government is "deeply com­ Consider, for example, the fact that it was congressional adviser to the special mitted" to a "strengthening" of the nonpro­ the Administrator who requested the In­ liferation framework would have been spector General to look into any impropri­ session on disarmament by the Presi­ viewed more seriously if the U.S. would eties. It was the Administrator who request­ dent, I confess considerable concern have pledged itself to exert pressure on the ed that his office be furnished, not with new about the general tone and attitude of countries that have refused to sign the NPI' furniture available within the Agency. the U.S. delegation. In addition to the and submit all their nuclear installations to It was the Administrator who voluntary article from the Disarmament Times, I international safeguards. gave up an airy, cheerful reception room in am placing into the REcoRD a letter I Finally, in connection with the proposal order that the space could be utilized for sent to the President. I also called my that an international conference be con­ needed office space. The Deputy Adminis­ senior Senator, CHARLEs PERcY, and vened to establish a common system for the trator and his secretary are now occupying reporting and accounting of military ex­ that space. expressed concerns. penditures, Reagan could have gone one Consider, too, that the only items of furni­ Like many others, I want to be step further and added that, once such a ture bought for the Administrator were the proud of my country and what it system is in place, the United States would high back chair and a coffee table. Or con­ stands for. I am proud of my country be willing to negotiate substantial reduc­ sider that the renovation which occurred by but not always what it stands for. tions in military spending. the construction of walls was for the pur­ Nothing President Reagan could do Even allowing for the fact that the U.S. is pose of creating two offices where one exist­ could secure his place in history more not interested in "propaganda," as David ed before. This resulted in the addition of than if he could move us to a meaning­ Adamson, a specialist in disarmament issues five valuable space-saver offices. Maximum at the U.S. Mission stated at a press confer­ utilization of space has never been a valid ful, verifiable arms control package. ence following Reagan's speech, some effort subject for criticism. But for that to happen this adminis­ could have been made to convince the And, of course, the stories made no men­ tration is going to have to exert much worldwide community that the U.S. is ready tion of the cost involved by prior Adminis­ stronger leadership than I have seen "to serve mankind through genuine disar­ trators which would make the $54 thousand on the issue of arms reduction up to mament," as President Reagan claimed. expenditure a new low in the poverty level. this point. Nothing was said that the Inspector Gener­ The supplied material follows: HOUSE OF REPRESENTATIVES, al concluded his report with the finding Washington, D.C., June 9, 1982. WHAT PREsiDENT REAGAN CoULD HAVE ToLD Hon. RoNALD REAGAN, that "the renovated space is compatible SPECIAL SESSION with the office appointment which has his­ The White House, torically and customarily been provided to When you speak in New York next a higher standard, then let the judging be sion appears to have no plans greater than week, you may be making the most impor­ fair: avoiding embarrassment and denouncing tant talk of your presidency. As important Why is it wrong for Israel to threaten tens the Soviets. The Heritage Foundation as economic problems are, and other mat­ "backgrounder" on the session appears to be of thousands in west Beirut to get at a few ters which you face day to day and hour to thousand remaining P.L.O. fighters-but accurate in calling the U.S. posture "largely hour, next week you will be addressing the an exercise in damage limitation for the not wrong for those fighters to hide in civil­ question of whether humanity can survive. ian neighborhoods, using innocent people as American delegation." If there is anything You have been blessed with great skills as a positive coming out, anything in the way of hostages? As The Economist reported while communicator. This can be your finest hour criticizing Israel's assault on Sidon: "Civil­ hope, anything more than anti-Soviet rheto­ and the nation's finest hour, if you seize the ric, I have not detected it. I do not suggest ians trying to escape from the camp were opportunity to present a positive program, shot, apparently by the guerrillas.... Pal­ that others in your Administration, at to create a better atmosphere. and pledge Geneva and elsewhere, have not been work­ estinian prisoners the Israelis sent in to your efforts to achieve significant arms con­ plead for the civilians to be freed are also ing hard on the arms control question, but trol. the public stance at the UN is largely nega­ said to have been shot." Unless and until these two actions take Why is it wrong for Israel to fight to re­ tive. place the United States will be in the awk­ That concerns me for several reasons: store a once-friendly Christian power in First, it ignores the urgency of the issue ward situation of betraying the ideals and Lebanon-but not wrong for the P.L.O. and itself. This precedent-breaking meeting is hopes of the American people and the hope Syria, with Arab League sanction, brutally of millions around the world who now look to have destroyed that power? gathered on our soil and we appear to have to our nation for leadership. no dream or vision, no plan to use it to Sincerely, Why was it wrong for Israel to let the nudge the world toward arms control. That P.L.O. grow strong enough to make all of ill becomes us. PAUL SIMON, Lebanon its base-but not wrong for Syria, Second, it shows indifference to those who Member of Congress.e Jordan and Saudi Arabia to support that have serious questions about our motiva­ buildup on someone else's territory and at tion. As an official of a country close to us JUDGING ISRAEL Israel's expense? told me recently, "You are our good friends. Why is it wrong, woefully wrong, for But we have serious questions as to whether Israel to ignore the aspirations of Palestin­ you really want arms control." That con­ HON. CHARLES E. SCHUMER ians who lost their roots to Zionism-but cern is widespread among other nations, and OF NEW YORK not wrong for other Arab nations to exploit among many of our citizens. I am among IN THE HOUSE OF REPRESENTATIVES the dispersed refugees while refusing for them. decades to partition the old Palestine? Third, there are serious reservations Thursday, July 15, 1982 Why, in short, should Israel be held to among some of our friends who sense that higher standards of moral conduct when we seem more interested in reviving the • Mr. SCHUMER. Mr. Speaker, many voices have been raised in moral con­ most Arab states still deny it even the Cold War than in establishing a solid peace. lowest attributes of nationhood: safe bor­ At the U.S. Mission to the United Nations demnation of Israel for her recent ac­ ders and legitimacy? Why should Israelis be­ there is now an exhibit which pits the tions in Lebanon. I urge all who have lieve that what the P.L.O. was allowed to do United States against the Soviet Union; we expressed such feelings to consider to Lebanon was not also its program for are vividly portrayed as the heroes and the carefully the points presented in the Israel? Soviets as the villains. I do not believe we following New York Times editorial of Such brutal warfare required more justifi­ need to convi."lce others of Soviet excesses; cation than Israel has so far provided. It the UN vote on Afghanistan is clear evi­ July 1, 1982: JUDGING ISRAEL needs to answer some hard questions. Even dence of that. What is more important is to a less-embattled nation would feel obliged to show other countries that we are serious Israel is, or should be, morally "different" follow so costly a triumph with a plausible, about the issue of arms control, and the ex­ from other nations. So say the critics of its generous program for coexistence. Nonethe­ hibit suggests to some the opposite. pre-emptive war against the P.L.O. in Leba­ less, by fair standards, if it will finally There are three films shown to visitors. non, in which uncounted civilians have died. accept the responsibility of its might, Israel One, for example, is "Czechoslovakia, 1918- Because Israel was born of the world's re­ deserves understanding for its plight.e 1968". It portrays what has happened in vulsion over Hitler's genocide, the critics Czechoslovakia, and the Soviets do not look note, they hold it to a higher code, even in good. But does showing it contribute any­ war. Some of these critics are Israelis, strug­ HALTING POLLUTION OF OUR thing toward arms control? Or does it con­ gling to show how morally different they vince visitors that the United States is inter­ are from their Arab enemies. Are the critics COASTAL WATERS ested in reviving the Cold War? The answers right? seem to me fairly obvious. It is a boomerang Their case is initially compelling because HON.JAMESJ.HOWARD we are tossing at the Soviets which comes of the way the war unfolded. The Begin OF NEW JERSEY back to hit us. Government, having reneged on its prom­ Fourth, agreement with the Soviets on ises of "full autonomy" for Palestinians in IN THE HOUSE OF REPRESENTATIVES arms control will come only after long and the West Bank and Gaza, lied at the start Thursday, July 15, 1982 difficult negotiations, but that will happen when it said it wanted only a 25-mile cordon only if there is at least some modest effort sanitaire. Subsequently, it has probably lied e Mr. HOWARD. Mr. Speaker, the toward creating an atmosphere of mutual about, or at least suppressed, the civilian Marine Protection, Research, and trust and respect between our two countries. casualties it has caused. Sanctuaries Act, commonly known as If we continue with this type of propagan­ Throughout, it has been less than the Ocean Dumping Act, was enacted distic effort nothing is contrib­ that the slaughter in Lebanon was clearly The act established a policy to prohib­ uted toward creating the atmosphere that is disproportionate to any immediate P.L.O. it or strictly limit the ocean dumping essential for real negotiations. threat. of materials harmful to people or the It is irresponsible to have a "pie in the But even after granting all that, there is marine environment. The 95th Con­ sky" attitude about Soviet intentions, or another side. Critics of the civilian blood- gress strengthened this legislation July 16, 1982 EXTENSIONS OF REMARKS 16683 with my active support and estab­ The Environmental Protection Agency 1979s off the Scotian shelf wipe out the her­ lished a deadline to terminate ocean . which vigorously opposed ocean ring spawning ground there? Marine biolo­ dumping of harmful sewage sludge by dumping under the Carter Administration, gists suspect so, but there is no way to prove has switched signals and is now refusing to it. December 31, 1981. The 96th Congress appeal the judge's order. That, fears amended this law to include a ban on In the laboratory, oil deranges a wide vari­ Kamlet, "is a clear signal that the ocean is ety of processes in almost every organism the dumping of harmful industrial once again fair game." At least two other studied, but in the ocean, it has to rain dead wastes by the same date. East Coast cities have expressed interest in fish before oceanographers can say for cer­ As my colleagues know, I have been resuming ocean sludge dumping, instead of tain that an oil spill has killed anything. working to help end ocean dumping trucking it to expensive landfill sites. Cur­ That is a disturbing notion to the fishermen along the New Jersey coastline. H.R. rently, the EPA is in the process of relaxing whose livelihoods depend on the resources 6113, the Ocean Dumping Act amend­ the nation's ocean dumping regulations. of Georges Bank-the 12,000-square-mile ments was reviewed by the Public Like the air, the seas suffer from the trag­ area off New England that is one of the edy of the commons: there is no economic world's most fertile commercial fisheries, Works Committee in June of this year. incentive for we humans to protect them, It is my hope that the entire Congress and which is currently the site of increasing because for any individual, the benefits of offshore oil exploration. A major spill at will join with me in supporting a having a "free" dump outweigh the costs of Georges Bank could be a catastrophe. strong Ocean Dumping Act. adding to the worldwide burden of pollu­ What's more, Jelle Atema, a researcher at The following article appeared in tion-at least until that burden is so great Woods Hole, has discovered an added the June/July 1982 issue of National that it poisons us all. danger from oil drilling: the sticky muds Given enough information about the un­ that are pumped into wells to flush out the Wildlife. The necessity of pursuing an derlying strata, a geologist can predict with expeditious cleanup of our ocean is drilling canal appear to be highly toxic to fair accuracy what will happen to sewage lobsters. The problem needs further study. clearly evident from this article: sludge deposited on land: which layers it The plight of marine biologists has been How FRAGILE Is THE OcEAN? will penetrate and which it won't, where it likened to that of a naturalist who visits . the disinterested protection. It is precisely be­ amount of lead in the oceans has increased cause the sea has no one to speak for it that HON. DOUGLAS K. BEREUTER by a factor of ten in some places, reports the federal Ocean Dumping Act was neces­ OF NEBRASKA Clare Patterson of the California Institute sary in the first place. IN THE HOUSE OF REPRESENTATIVES of Technology. In a "cloud" of lead whose And the law was never more necessary bottom boundary now extends several hun­ than today. We have done everything to the Thursday, July 15, 1982 dred yards below the surface, the North At­ ocean except dry it up, and the lesson of e Mr. BEREUTER. Mr. Speaker, we lantic registers concentrations as high as 30 history is that we would have done that, to 40 parts per trillion, compared with 2 to 4 all want peace; no one will dispute too, if there was money to be made at it. Yet that. But there are different ways to parts per trillion in the South Pacific. Pat­ in recent years, some progress has been terson acknowledges that no widespread ill made in protecting the seas. If we are care­ achieve and maintain peace. History effects on marine life are yet apparent, but ful and lucky, then the oceans, where all life can provide us with examples of meth­ he has stopped eating oysters as a direct began, may not be the place where it all ods that did and did not work, and re­ result of his research. He also believes that ends.e cently the Sioux City, Iowa, Journal we are nearing "the borderline at which per­ urged us to examine that history as we turbations occur. We have to act now." The monsters may well be real; it is surely consider the future of the nuclear too soon to tell. Almost everyone agrees HONORING MR. LOREN M. arms race. that the continued accumulation of low­ BARNETT Noting that arms control treaties level synthetic organic waste in the oceans have never deterred those who are de­ will ultimately end in disaster. But some sci­ termined to break them, the Journal entists are growing less concerned about the HON. JERRY LEWIS said in an editorial entitled "History worldwide effects of metals and naturally OF CALIFORNIA Lessons" that demands for unilateral occurring petroleum; what impresses them IN THE HOUSE OF REPRESENTATIVES disarmament and freezes in the West is not the occurrence of Minimata Disease, leave the Soviet Union with little in­ but the fact that it has not manifested seri­ Thursday, July 15, 1982 ously anywhere else except in that one con­ centive to bargain. The Journal then fined and exceptionally polluted bay. Says • Mr. LEWIS. Mr. Speaker, on July 27 concludes that President Reagan's Derek Spencer, associate director for re­ the Associated General Contractors, course of rearming while negotiating is search at Woods Hole: "We have moved San Bernardino-Riverside chapter, will a wise one. I have included the entire away from the view of ten years ago that honor Mr. Loren M. Barnett on the oc­ editorial in the REcoRD. the ocean is a very fragile thing." casion of his retirement from the Cali­ [From the Sioux City Journal, June 26, It may be that there is room in the ocean 1982] for some of man's wastes, even within the fornia Department of Transportation. strict requirements of the Ocean Dumping It is with great pleasure that I join in HISTORY LESSONS Act, which prohibits activities that "unrea­ honoring Loren Barnett. History offers scant evidence for the sonably degrade" the marine environment. A native Californian and lifelong notion that signing arms control treaties Peter Anderson, head of marine and wet­ resident of Redlands, Calif., Mr. Bar­ helps to keep the peace or deter aggressors. lands protection for the EPA's Region Two, nett served the people of California As historian Barbara Tuchman noted in a which includes New York, gives an illustra­ recent essay, nations bent on conquest have tion of reasonable degradation: the dumpng for 41 years in the Department of always found ways to evade arms limitations of inorganic acid waste, such as ferric chlo­ Transportation and its preceding that constrained their ambitions. ride, a byproduct of pigment production agency, the California Division of Germany and Japan were classic examples that is currently discarded off the coast of Highways. during th 1930s. The Soviet Union behaves New Jersey. Seawater is a weak base, he Loren graduated as a civil engineer in a similar fashion today, cynically violat­ says, so the acid is quickly neutralized. from the University of California in ing long-standing prohibitions against the Plankton or other creatures hit directly by use of chemical and biological weapons. the acid as it comes off a barge would, of 1941. Following graduation, he began Accordingly, the arms reduction proposals course, die, but the population quickly re­ working for the division of highways put forth by the Reagan administration and bounds to fill the gap. In terms of degrading in San Bernardino where he has reaffirmed by the president last week in his the environment, it has no more lasting worked until his retirement except for speech to the United Nations' special ses­ impact than digging a hole in the ocean. a 6-year term in the military. sion on disarmament, may be doomed to Nevertheless, environmentalists are In World War II, Loren served in the failure. The Soviets may continue to reject alarmed, and with good reason. The long­ U.S. Navy from July, 1942 to May, them or, having "accepted" them, may standing EPA policy against issuing permits cheat even as they are now cheating mas­ for ocean dumping where any feasible land­ 1946. He achieved the rank of Lieuten­ sively on the terms of the 1925 Geneva Pro­ based alternatives exist may soon be altered. ant Commander in the Naval Re­ tocol and the 1972 Biological Weapons Con­ In drawing up new criteria for issuing dump serves. Again Loren served his country vention. permits, the EPA may place more emphasis during the Korean conflict from No­ Even so, Reagan has good reason for on observable effects directly at the dump vember 1951 to November 1953. pressing the Soviets hard on arms control site, and less on hypothetical dangers to a Loren Barnett was instrumental in issues. To do otherwise would be to surren­ whole ecosystem-a potentially fatal mis­ der the high ground in what has become a take when dealing with the deceptive ocean. the construction of all major State full-blown propaganda war launched by the "Some metals may be more toxic when they highways in San Bernardino and Riv­ Soviets. Losing this war could have disas­ reach the ocean bottom than they were on erside Counties from 1946. He has dis­ trous consequences. Among them: a further the surface," says George Knauer of the guised himself since 1964 as a deputy unraveling of NATO; an erosion of domestic Moss Landing Marine Laboratories in Cali­ district director and assistant district support for rebuilding the American nuclear fornia. There is also concern over the possi­ engineer in district 08 of the depart­ deterrent, and casting the Kremlin in the ble disruptive effects of synthetic organic ment where he has directed the main­ undeserved role of spumed peacemaker. chemicals, such as PCBs, which may not tenance and construction activities of Then, too, there is always the possibility show up for years. "Even if the oceans are that resolute diplomacy backed by unques­ very robust," notes Wayne Stobo, a fisheries the district. tioned military strength just might per­ expert at the Bedford Institute of Oceanog­ A leader in community activities, he suade the Soviets to accept and abide by a raphy in Nova Scotia, "as you keep pumping has been actively involved in the civic genuine arms reduction agreement. Howev­ in poisons, you'll reach a level where the and youth programs of his native Red­ er remote that possibility, Reagan must oceans can't absorb them. Once you reach lands, Calif. pursue it. that crisis state, the game is obviously lost." Mr. Speaker, I take great pride in He must also show he understands the In deciding whether land or ocean dump­ growing disarmament movement in the ing is best in a particular case, the EPA may recognizing an outstanding public West. If the nuclear debate in the United decide to give more weight to the onshore servant and community leader, Mr. States becomes politically divisive, it will pollution problems associated with soil and Loren M. Barnett, and commend him soon doom any chance for successful negoti­ drinking water. That seems only reasona- to the House of Representatives.• ations with Moscow. The Soviets will have July 16, 1982 EXTENSIONS OF REMARKS 16685 little incentive to bargain in good faith, The zero nuclear policy advocated by FIRE ISLAND NATIONAL much less agree to actual reductions in their President Reagan last fall on intermediate SEASHORE nuclear arsenal, so long as Western govern­ nuclear forces in Europe was a major start ments are under mounting pressure to make toward responsible arms control negotia­ unilateral concessions. tions. A worldwide zero nuclear option with HON.THOMASJ.DOWNEY The tone and contents of the president's adequate verification should now be our OF NEW YORK UN speech were welcome indications that goal in all arms control negotiations-the IN THE HOUSE OF REPRESENTATIVES he understands the need to negotiate from a freeze-now option is dangerous. position of strength with the Soviets while Thursday, July 15, 1982 simultaneously reassuring at least the more The principal strategic needs of the thoughtful among the peace marchers in United States and the West have little to do • I\1:r. DOW:-lEY. Mr. Speaker, today I the West. with a multiplicity of nuclear weapons sys­ introduced legislation to amend the Thus, he underscored the administration's tems. This is particularly true inasmuch as I Fire Island National Seashore Act. commitment to avoiding war, nuclear or am confident that our missile-firing subma­ The Fire Island National Seashore was conventional. But he also noted that merely rines will remain invulnerable through this established in 1964 to preserve and signing arms control agreements that century. New fiber optic detective systems protect one of the last relatively un­ cannot be verified and are not adhered to is and other breakthroughs may make attack an exercise in building "paper castles." Ex­ submarines vulnerable during this period spoiled natural barrier islands in the actly so. because of the speeds they are required to Northeast for the use and enjoyment Reagan called upon the Soviets to demon­ travel. This is not the case with ballistic­ of future generations. strate their oft-proclaimed commitment to missile-firing submarines because of their Fire Island is a unique resource. It is arms control and disarmament with "deeds, different operational requirements. located only 50 miles from New York not words." He repeated the administra­ Our principal defense needs in this decade City and has one of the finest ocean tion's standing offers to rid Europe of all in­ beaches in the world. It also has mag­ termediate range nuclear arsenals of both have instead to do with such requirements superpowers by one-third, and reduce the as the ability to keep open the sea and air nificent dunes and spectacular mari­ size of the conventional forces fielded by links of the alliance, the ability to hold time forests including the famous NATO and the Warsaw Pact. ground without resort to nuclear weapons, sunken Forest Preserve. Although Taken together, these propo::als go far and the ability to project and sustain power there are bridges at either end of Fire beyond those offered by any previous ad­ at great distance. Island, there are no roads to mar the ministration. Indeed, they far exceed the The general perception of the current De­ beauties of the island. Access to most nuclear "freeze" offered by Soviet President fense Department and of many Americans of the seashore is by ferry or footpath. Leonid Brezhnev and endorsed by many dis­ seems different. Multiple nuclear weapons Within the boundaries of the seashore armament activists in the West. systems are accorded highest priority and are 18 scattered small heavily devel­ The Soviets can prove that they too desire are seen to be central to military strength. an end to the arms race by meeting Reagan oped communities, primarily consist­ Nothing could be further from reality. This ing of single-family homes and cot­ halfway, and by permitting adequate means is a bad misconception. of verification. If they refuse, as history tages and the businesses serving them suggests they will, the Reagan policy of The security of the United States, the and day visitors. There are about 4,500 arming while negotiating will have proved Western alliance and the Free World deeply such structures today compared with an indispensable insurance policy for keep­ concerns me. The United States and its fewer them 3,000 when the seashore ing the peace.e allies must take the lead to provide and maintain a realistic deterrent and usable was established. Future growth is esti­ military strength in the service of freedom. mated at about 1,000 additional struc­ WHAT OUR DEFENSE REALLY In the long run, the danger of nuclear war tures. NEEDS can be averted only by serious negotiation The act exempts private property with the Soviet Union for reductions in nu­ within these communities from con­ HON. PAUL SIMON clear weapons of all kinds to zero. These demnation, with some exceptions, pro­ OF ILLINOIS weapons of mass destruction may be impor­ vided that the local authorities have IN THE HOUSE OF REPRESENTATIVES tant for political purposes, but they are use­ in effect zoning ordinances which con­ less for military purposes. They do increase form to standards promulgated by the Thursday, July 15, 1982 enormously the dangers of military confron­ Secretary and which are approved by e Mr. SIMON. Mr. Speaker, Melvin R. tation. him. No current local zoning ordi­ Laird, the Secretary of Defense in the Our true strategic military needs have nances have been approved by the Sec­ Nixon administration, recently had an little to do with nuclear weapons except to retary, although three of the four article in the Washington Post in deter their use against us. These needs have zoning authorities have made the nec­ which he calls for serious negotiations much to do with the fact that America and essary amendments and the fourth with the Soviet Union for reductions its allies are a far-flung array of nations, one is expected to follow shortly. No in nuclear weapons and for greater at­ separated by distance and by oceans. The new commercial use or expansion of tention to more conventional weapons. Warsaw Pact, in contrast, dominates the existing ones is permitted without the I am placing his article in the heartland of Eurasia. It follows that we must be able to keep open the sea and air approval of the Secretary of Interior. RECORD. links that bind together the alliance, to hold Property subject to a variance or non­ [From the Washington Post, Apr. 12, 1982] ground on the borders of Europe and else­ conforming use loses this exemption. WHAT OUR DEFENSE REALLy NEEDS where, and to project and sustain power at Since the subdivision in many commu­ of Enforcement of standards by and vation Act. It has not been used in the this paragraph acquired by condemnation large has been a failure because Con­ Seashore because the proceeds from under this Act- gress authorized condemnation as the such sales do not go back in the Sea­ "(i) to the highest bidder; only enforcement tool. The Secretary shore but into the general fund. This " at not less than the fair market value; has no authority to obtain an injunc­ bill would establish a "revolving fund" and tion in Federal court. We twice have to put proceeds of the sales right back "(iii) subject to covenants or other restric­ raised the authorized ceiling for land into the Seashore only for the pur­ tions that will ensure that the use of such acquisitions, but annual appropria­ poses of implementing the act. property conforms to the standards speci­ fied in regulations issued under section 3(a) tions have not been adequate. Fur­ One reason the deterrent has not of this Act which are in effect at the time of thermore, in these times of fiscal con­ been effective is that the safeguards such sale and to any approved zoning ordi­ straints, the National Park Service Congress has built into land acquisi­ nance or amendment thereof to which such puts a low priority on using scarce tion procedures to protect the inter­ property is subject. land acquisition funds for enforce­ ests of private property owners have a " The property referred to in subpara­ ment. A Federal court has criticized built-in time delay. Where develop­ graph of this paragraph is any property this scheme as follows: ment pressures are as great as they within the boundaries of the national sea­ In their justifiable frustration plaintiffs are at Fire Island, these put the prop­ shore as delineated on the map mentioned have sought relief from the courts but it is erty owner who is determined to vio­ in section 1 except- clear that only Congress can provide the late the standards in a "no risk" situa­ "(f) property within the Dune District re­ remedy . . . nevertheless, precatory though ferred to in subsection (g) of this section; tion and the Government in a "no " of this halt their procrastination and get on with Testimony before the House Appro­ section; and the urgent business of saving this charming priations Subcommittee on Interior "(iii) property within the eight-mile area and fragile outpost of nature before the en­ and Related Agencies, March 17, 1980, described in the second sentence of subsec­ croachment of haphazard development ir­ documented a number of recent in­ tion of this section. revocably despoil it. fails, or would result in a failure of the zoning standards. The principle of prevent such exploitation. It does not such property, to conform to the standards home rule in this area is primary. The confiscate property rights because at specified in regulations issued under section 3 of this Act in effect at the time such Secretary's powers are a "court of last the end of this procedure one of two use or construction began; or resort." things happens: either the property "(B) in the case of undeveloped tracts in It is intended that the Secretary owner is paid fair market value for his the Dune District referred to in subsection shall use the powers given to him only property, or he decides to use it in con­ (g) of this section, would result in such un­ in cases of gross violations which de­ formity with the zoning standards. If developed property not being maintained in grade the character of the communi­ the property is acquired, this bill pro­ its natural state. ties or which threaten the natural re­ vides for the "tum-around" and the "(2) Any temporary restraining order or sources which the Seashore was estab­ ability to use appropriated funds simi­ injunction issued pursuant to such an appli­ cation shall terminate on the date the lished to protect. The Seashore now larly for future potential violations. United States acquires title to such property has a land acquisition plan that takes This is not exactly a "free lunch" or, if such proceedings are terminated with­ into account these fine distinctions. proposal. There will be some costs. But out the United States acquiring title to such Congress cannot take on the burden of it does protect both the public interest property, on the date of such termination.". enforcing the Secretary's zoning regu­ in preserving the island and the Public SEc. 3. Section 3, we feel that H.R. 6530 Public Relations Society of America. has struck an acceptable balance. Some im­ Like many of us in the Congress who tal scientists throughout the Pacific North­ portant areas will not receive the level of west and to tour the volcanic site on two oc­ protection we would prefer. The 115,000- are concerned about the continuation casions, both on the ground and by helicop­ acre proposal does go quite far, however, in of vital social service, health, research, ter. Because this major eruption and its dev­ protecting areas of foremost importance for and arts programs, Mr. Schwartz poses astation to nearly 200 square miles of pris­ scientific research, watershed protection, the question of how far corporations tine forests provided a once-in-a-lifetime op­ fish, wildlife and recreation which were ex­ can go in "picking up the slack" left portunity for unique research, NSF and cluded from the original protective area pro­ by the reduction in funds available other agencies, federal and state, have quite posed by the U.S. Forest Service. properly supported millions of dollars of re­ from the Federal Government, and We appreciate and commend your contin­ with the role which corporations search projects. It cannot be stated too ued diligence and hard work on this meas­ many times that the Mount St. Helens erup­ ure and look forward to the passage of H.R. might play in the future. This article tion in May 1980 continues to provide an ex­ 6530. points to some new partnerships ceptional opportunity for biological and eco­ Sincerely yours, which I thought might be of interest logical research-natural recovery of major CHARLES M. CLUSEN, to my colleagues. forest ecosystems, effects of volcanic ash Conservation Director. and debris on wildlife, potential devasta­ The article follows: CORPORATE PROFITS AND THE PUBLIC INTEREST tions of insects and the like. NATIONAL AUDUBON SOCIETY, The ecological research projects on Mount Washington. D. C., July 9, 1982. St. Helens have necessarily embraced large Hon. DON BONKER, Few will argue that corporate America is experimental areas. For these projects to be U.S. House of Representatives, under increasing pressure to pick up the meaningful to the scientific community, Washington, D. C. slack made evident by Federal cutbacks in they require equally large control areas, DEAR CONGRESSMAN BoNKER: The National social, cultural and educational programs. namely unaffected contiguous forests at dif­ Audubon Society strongly supports H.R. How far corporate America is expected to ferent levels, slopes, climates, and the like. 6530, to create a 115,000 acre Mount St. go is the underlying question. And what is I, therefore, wholeheartedly support the Helens National Volcanic Area. We com­ the fine line between the fictional society concept of a National Volcanic Monument mend you and your colleagues in the Wash­ depicted in "Atlas Shrugged," by Ayn Rand, for research and your compromise bill to in- ington delegation for cosponsoring this leg- in which each produced according to ability July 16, 1982 EXTENSIONS OF REMARKS 16689 and each was provided for according to I am a cosponsor of H.R. 5868, a bill draining away millions from the productive need-and the emerging industrial society which directs the Secretary of the sector to the unproductive. of the 1920s in which the public could be Treasury to conduct a study regarding Those are some of the larger consider­ damned? the replacement of the current indi­ ations which sprinkle appeal on the flat­ In 1980, American corporations gave away rate tax idea just now, as well as a few of about $2.7 billion out of $550 billion profits. vidual and corporate income taxes the considerations which make congression­ That amounts to a little more than one half with such a flat-rate structure. al adoption problematical. percent for the arts, charities, education, re­ I request permission that the editori­ The Journal concludes with an opinion ligion, and various social programs. The tax al be reprinted in the RECORD. that basic models of different flat-rate tax laws have allowed corporations to donate up A FLAT-RATE TAX? MAYBE proposals should be developed for public in­ to five percent of pre-tax profits and deduct [From the Lincoln Journal] spection. There ought to be projections the amount. But according to the Council of made on how the shift would affect the na­ Financial Education, only one-third of At their recent midterm conference in tional economy as well as individuals at cur­ nearly 1.5 million companies make any phil­ Philadelphia, organizational Democrats sup­ rent different income brackets. anthropic contributions. ported the snowballing idea of junking the The idea of an easier-to-comprehend tax The Conference Board recently released a present individual Federal Income Tax Code survey showing that many corporations are system, with comparable equity, is auto­ and replacing it with a flat-rate national matically attractive. How it might work war­ reluctant to increase their contributions to income tax. This is an approach that's been social, cultural and educational programs. rants exploration. Surely there's nothing to pushed by certain tax theorists for years. be lost by browsing.e The survey raised a good question: What is In this enterprise, liberal Democrats have corporate America's role in the '80s-a curious companions, indeed. Several of the decade brought to reality by overspending more celebrated banner wavers of the politi­ AND of previous years? cal Far Right are keen on the flat-rate EPA NOAA MINORITY One executive, who asked for anonymity, income tax, too. Bill Bradley and Jesse VIEWS was far from enthusiastic. "We didn't start Helms, arm in arm? Wow! these programs and we shouldn't be respon­ Even President Reagan Tuesday conceded HON. LARRY WINN, JR. sible for their continuation if Federal a flat-rate income tax looks "very tempting" money is not available." to him. OF KANSAS Other corporations have made news with Already, Nebraska's congressional delega­ IN THE HOUSE OF REPRESENTATIVES their contributions to philanthropic tion is starting to receive letters from con­ projects. Some months ago, Merrill Lynch, stituents casting opinion ballots for the rad­ Thursday, July 15, 1982 Pierce, Fenner & Smith announced it was ical change. • Mr. WINN. Mr. Speaker, the legisla­ contributing $300,000 to the Metropolitan The first sampling suggests many see the Opera-the first time in 99 years that the tive reports for the EPA and NOAA reform as a simple, effective answer to what annual authorizations, H.R. 6323 and Met had obtained corporate support for its has been a very complicated problem-the annual spring tour. horrendously formidable Federal Income H.R. 6324, were filed with minority Yale University recently signed a $1.1 mil­ Tax Code. views. However, because of time con­ lion contract with Celanese Corporation to Yet that very rationale encourages cau­ straints they were signed only by conduct research on enzymes. Yale gets the tion. There always are simple answers to myself and my colleague, Mr. CARNEY. patents and salaries for four doctoral stu­ perplexing, mosaic-streak issues. They also Following is a list of those members of dents. It joins Harvard, MIT, Stanford, and almost always turn out to be either wrong the committee who support these other institutions that are doing industry­ or aggravating. views. For the benefit of my colleagues subsidized research where, in many cases, The flat-rate tax proposals floated by dif­ both the corporation and the institution I am also including the minority views ferent groups are not quite such simple de­ themselves. benefit. vices as applying a single percentage tax This year, the government is increasing rate to all income. Almost instantly come EPA views-Messrs. GoLDWATER, tax deductions to ten percent. The doubling calls for qualifications, conditions, excep­ WALKER, F.:>RSYTHE, SENSENBRENNER, is supposed to be an incentive from the gov­ tions, et cetera. SKEEN, DUNN, and LoWERY. ernment to corporations in the hope that By way of illustration, the flat-rate plan NOAA views-Messrs. GOLDWATER, business will help close the gap created by which the Democrats in Philadelphia liked the Administration's cutbacks. FISH, WALKER, FORSYTHE, SENSENBREN­ would continue to exempt the lowest NER, SKEEN, and LoWERY. Other tax laws have been changed that income from any tax liability and, according will affect the relationship between business to "Congressional Quarterly", would not do MINORITY VIEWS-ENvl:RONKENTAL and society. These include corporate deduc­ away with the "more popular" tax deduc­ PROTECTION AGENCY AUTHOIUZATION BILL tions for child care which could have the tions, such as the tax write-off for home The Minority members of the Science and same dramatic impact on the work culture mortgage interest oppose the Committee's authorization bill tax laws governing employee health bene­ for the Environmental Protection Agency fits and retirement benefits had. Democrats also tilt toward adding a surtax It seems that society is indeed straddling which would be progressive for the higher due to the 5 percent increased level of fund­ incomed. But a flat-rate tax designed by ing, the request for a two year authoriza­ the fine line between defining corporate tion, and particularly the highly restrictive profits and the public interest. The 1980s hard-shell fiscal conservatives certainly remain wide open for answering these diffi­ would be without any surtax feature. Better language included in sections 2<3> and the existing loopholes. the entire section 6 of the bill amending the cult questions.e This Nation's great institutions and activi­ Science Advisory Board . ties which depend upon tax-exempt gifts­ The Environmental Protection Agency EDITORIAL OPINION: FLAT RATE churches, schools, hospitals, foundations, has enjoyed bipartisan support in the Con­ TAX etc.-could be expected to oppose ending of gress since its inception under a Republican exemptions which pump their vital fluids. administration. That same bipartisan con­ That, however, could be creatively accom­ cern and support for environmental protec­ HON. DOUGLAS K. BEREUTER modated, by the way a flat-rate tax is struc­ tion exists in this Congress today. However, OF NEBRASKA tured. One approach could be an extra tax the Democrats' approach to the current IN THE HOUSE OF REPRESENTATIVES for any person who fails to give 5 percent of fiscal reality varies quite drastically from his or her income annually to charity, or ours. In an era of fiscal restraints, it is much Thursday, July 15, 1982 the other way around, a tax credit for one easier for opponents of the Administration e Mr. BEREUTER. Mr. Speaker, I who can prove his or her charity. to arbitrarily establish budget levels at un­ would like to share with my colleagues Enthusiasm for the flat-rate tax springs realistically higher figures than the Admin­ an opinion expressed by the Lincoln from the frightful difficulty inherent in the istration requests rather than try to develop current tax code. It's just too complicated. A budgets within current economic con­ Journal concerning the flat-rate tax system so forbiddingly difficult erodes tax­ straints. Under such a scenario, the Majori­ proposals. As expressed in the article, payer confidence. ty, by setting higher levels, implies that the idea of a simpler tax system is cer­ More, it fosters tax evasion and tax avoid­ bigger is better. The Minority, on the other tainly attractive; yet, we should be cer­ ance. It stimulates business mergers which hand, contends that more dollars in the tain to explore the many facts of each make little economic sense and almost none EPA R&D budget does not equate directly proposal before making any decision. at all socially. It fertilizes the tax shelter, to more useful products, to more effective 16690 EXTENSIONS OF REMARKS July 16, 1982 environmental regulations, or even to a meet that deadline, we have decided not to nority Members wish to emphasize is the safer environment for Americans. route these views for the signatures of other overriding importance of supporting the Ad­ This Committee has continually scruti­ members who are certain to support this po­ ministration's funding levels as a means to nized the EPA R&D program and has wit­ sition. national recovery through fiscal responsibil­ nessed in the past that increased funding ity. has often not produced higher quality re­ MINORITY VIEWS-NATIONAL OCEANIC AND The preceding views are signed only by search. To respond, once more, by substan­ ATMOSPHERIC ADMINISTRATION AUTHORIZA­ the Ranking Republican of the Full Com­ tially increasing funding brings forth a TION BILL mittee and Subcommittee because of the question as to the merits of such a business­ The Minority Members of the Science and time constraints imposed by the Committee as-usual attitude. Technology Committee reluctantly find it on filing the legislative report. Rule XI, cl. 2 Despite our desire to remain within the necessary to oppose the Committee bill, as of the House rules specifies that three legis­ Administration's budget request of $215.9 amended, due to the request for a two year lative days will be provided for this purpose. million, the need to protect programs which authorization imposing a 6 percent increase The Committee-imposed deadline was 12 this Committee has repeatedly expressed in spending for fiscal year 1984, the rein­ hours after bill passage. In an attempt to concern over led us to offer an alternative statement of a second polar orbiter the ad­ meet that deadline, we have decided not to EPA budget of $222.9 million. ditional paperwork and reporting require­ route these views for the signatures of other We take great issue with the increase of ments in sections 203 and 204, and for the members who are certain to support this po­ $24 million proposed by the Majority in establishment of a new Great Lakes Office sition. Energy Research. The President's proposal clearly ignoring existing programs and of­ LARRY WINN, JR. for energy control technology reflects the fices within NOAA which could achieve the WILLIAM CARNEY•• philosophy that the private sector can be same goal. expected to undertake final development Despite our differences, however, there is and commercialization of control equip­ much agreement on both sides of the aisle DO SANCTIONS DETER ment. This major market has been created on the vast majority of the research and de­ AGGRESSION? by the issuance of air quality standards. velopment programs of NOAA. Specific EPA will continue to evaluate the reliability areas of agreement include marine ecosys­ and effectiveness of control technologies. tem research and analysis, the importance HON. ROBERT H. MICHEL The proposed addition of $9.0 million by the and necessity for a strong ocean pollution OF ILLINOIS Majority perpetuates a belief that the gov­ and ocean dumping research program, basic IN THE HOUSE OF REPRESENTATIVES ernment is more qualified than private in­ atmospheric and climatic research, and the dustry to conduct these developments. The weather service functions of NOAA. The al­ Thursday, July 15, 1982 Minority does not support this thesis. ternative budget, offered by the Minority, e Mr. MICHEL. Mr. Speaker, it has We also disagree with the increases this supported these programs which the Major­ been said that true power is shown not bill calls for in the energy monitoring re­ ity and Minority agree on and did so at a in striking hard or in striking often search program. The Agency's budget con­ level of increased yet reasonable funding. but in striking accurately. Nowhere is solidates such research into the non-energy The Majority's amendment to the bill dis­ programs at an estimated budget of $31 mil­ plays an attempt to reduce a previous unac­ this more true than in the case of lion. Finally, EPA's proposed reduction in ceptable funding level, yet the Minority still trying to deter aggressive behavior on energy ecological effects research is based regards the level proposed as too high. We the part of the Soviet Union through on the successful completion of significant regard our alternative budget, at a level of the use of selective unilateral sanc­ research in mining and reclamation and off­ $16.5M above the NOAA request, to be a tions. shore oil and gas drilling. Therefore, we find much more realistic approach to current There is a considerable body of evi­ the increases proposed by the Majority to fiscal realities. It is clear to us, and the dence that such a move, no matter be unnecessary and inappropriate. American public, that this nation is strug­ how deeply it is rooted in the motiva­ The Minority wishes to express strenuous gling in its emergence from severe and deep objection to the language contained in this economic troubles that have plagued us tions and rhetoric of principled anti­ legislation which represents a totally unwar­ since the 1930's. Increased federal spending, Soviet policy, just may not work. And ranted attempt by the Majority to improp­ at a level suggested by the Majority, would if it does not work, it not only misses erly limit the authority of the Administra­ be counterproductive to the efforts to re­ the target-it actually hurts the tor to transfer and to efficiently manage the store vitality and sustained growth to the United States. agency. This attempt at micromanagement economy. Recently, on July 14, 1982, the Wall by the Committee Majority could remove The changes made in the Administration's Street Journal published three arti­ essential management authority and flexi­ budget by the Minority affect four line cles, all of which offer evidence that bility from the Administrator and will inevi­ items. First, an addition of $8,833,000 was sanctions do not work. At this point I tably result in less effective management, made for three directorates: (1) $5.5 million reduce efficiency, and substantially increase for ocean dumping research; (2) $2.8 million wish to place in the record these arti­ paperwork. Such heavy handed attempts to for the reinstatement of the Great Lakes cles: "U.S. Effort to Block Soviet Gas impose ridiculous and unnecessary con­ Environmental Research Laboratory; and Pipeline Recalls Failed Embargo of 20 straints merely because members of the Ma­ <3> $.5 million for a NOAA/EPA joint cross­ Years Ago"; "Can Economic Sanctions jority do not approve of the current Admin­ media sewage sludge study. Secondly, an ad­ Deter Aggression?"; and "Norway's istrator's management style must be reject­ dition of $6,000,000 was made for Weather Gas Reserves and the Soviet Pipeline." ed. Services/Supporting Research to provide Finally, Section 6 of the bill which for the continued procurement of CAN ECONOMIC SANCTIONS DETER amends the enabling statute under which NEXRAD, to restore $1 million to the Space AGGRESSION? the Science Advisory Board was created, is Environmental Laboratory, to reinstate the both unnecessary and redundant to provi­ Agricultural Weather Service Program Are economic sanctions against the Soviet sions contained in this Committee's authori­ Fruit Frost Forecast Program, and Fire Union a useful instrument of foreign policy? zation bill of 1978 in which specific guide­ Weather Program, and finally, $2.0 million That question is the subject of growing lines were provided for establishment of the for the reinstatement of 45 weather sta­ debate within the Western alliance, particu­ SAB. tions. Thirdly, the increases in Atmospheric larly now that President Reagan has decid­ In conclusion, the Minority continues to Research totalled $1,750,000 to be applied to ed to try to block European licensees of U.S. support the bipartisan efforts to maintain a the First Global Atmospheric Research Pro­ companies from exporting technology for sound environmental program and supports gram <$.5 million), the World Climate Re­ the Siberian gas pipeline. the Administration's efforts to restore eco­ search Program <$.5 million), and $. 75 mil­ A historical study on "Economic Sanc­ nomic stability to our nation. lion for basic research in other severe tions," just published by Harvard Universi­ The preceding views are signed only by storms program under the Weather Modifi­ ty's Center for International Affairs, may the Ranking Republican of the Full Com­ cation category. The final and fourth line help sort out some of the issues. The mittee and Subcommittee because of the item change was a request for an increase of author, Robin Renwick, was head of the time constraints imposed by the Committee $120,000 in user fees for the Environmental Rhodesia Department in the British For­ on filing the legislative report. Rule XI, cl. 2 Data and Information Services. eign Office from 1978 to 1980, and is there­ of the House rules specifies that three legis­ It is not an easy task to make cuts in the fore familiar with the most sustained and lative days will be provided for this purpose. National Atmospheric and Oceanic Adminis­ systematic international effort to apply eco­ The Committee-imposed deadline was 12 tration; the Minority is unanimous in its nomic sanctions for a political purpose-the hours after bill passage. In an attempt to support for NOAA's mandate. What the Mi- British and United Nations sanctions July 16, 1982 EXTENSIONS OF REMARKS 16691 against Rhodesia from 1965 to 1979. His drive Italy into an alliance with Germany, tion facilities, whether in the form of LNG book focuses on the Rhodesian sanctions and the British feared it might lead to a terminals or pipelines, possibly from North­ and on the League of Nations sanctions war. ern Norway through Sweden and on to the against Italy in 1935-36, and looks briefly at Mr. Renwick also suggests that sanctions continent, is time-consuming, and third, the U.S. embargo against Cuba under Fidel are a double-edged sword. He argues that there are the very important political con­ Castro, economic warfare against the Ger­ the sharp reduction in Rhodesian trade siderations with regard to Norway's national mans in World Wars I and II and the cutoff hurt Zambia and Mozambique more than it economy. of U.S. strategic exports to Japan half a hurt Rhodesia. The Britain, froze all Rho­ When Norway found itself obliged to de­ year before Pearl Harbor. desian sterling assets in Britain, but the velop an oil policy just over a decade ago, Mr. Renwick concludes that economic Rhodesians retaliated by defaulting on pay­ the overriding aim was to go slow so that penalties alone haven't been effective in de­ ment of their considerably larger sterling only a measured amount of money would be terring aggression or fundamentally chang­ debts, and also by blocking remittances on pumped into the economy of a nation of ing the political conduct of states. The deci­ investment income. four million people. Also, it was decided that sions by 50 members of the League of Na­ Mr. Renwick does not directly address Norway's geographic population pattern tions to cut off all imports from Italy, and such issues as credit subsidies or tecl"...nology should be preserved. to ban arms shipments to Italy as well as all transfers, except to say that bans on the To Americans, used to economic expan­ credits and loans to the Italian government, supply of arms or high technology "are sion on the fast track and to geographic mo­ did not stop Mussolini's army from conquer­ easier to operate than attempts at wider bility, this may seem to be going against ing Ethiopia. The U.S. embargo against economic embargoes." He argues that sanc­ nature. But Norway's three northernmost Castro cut off the traditional market for tions may serve useful propaganda purposes counties cover an area the size of Belgium, three-quarters of Cuba's exports, and denied in mobilizing world opinion and that they the Netherlands and Denmark combined, spare parts for most of the island's plant can modestly "weaken the country to which and they have less than 400,000 people. and equipment, but it did not reverse Cas­ they are applied." But, he cautions, "more And the northernmost export revolution in Latin America. It was a policy." county, Finnmark, with 80,000 people, has a debilitating civil war in the late 1970s, not 122-mile common border with the Soviet sanctions, that brought negotiations for ma­ NORWAY'S GAS RESERVES AND THE SOVIET Union. jority rule to Rhodesia. PIPELINE Keeping the population in these areas is But Mr. Renwick argues that economic extremely important in terms of national se­ sanctions can inflict economic damage on An innocuous sentence in President Rea­ curity, as Norway's defenses are based on the target country. Over the eight-month g~i's press conference June 30 didn't make calling up local reserves in an emergency. course of the League of Nations sanctions, it into most American papers, but it did And as for going against nature: A winter in the value of Italy's exports fell by 35% and create a stir in Norway. Answering a ques­ Arctic Norway is an unforgettable experi­ the resulting foreign-exchange constraints tion about possible additional steps to force ence-and a very long one, too. forced Italy to do without nonessential im­ America's European allies to go along with Americans tend to blame the Norwegians ports; in addition, the lira was devalued by the embargo to block export of pipeline for an unduly virginal attitude to the oil bo­ 40%. From 1965 to 1968 Rhodesia's tobacco equipment to the Soviet Union, the presi­ nanza. At the time of the energy crisis in farmers-the core of political support for dent said: 1974, one American in Oslo remarked: "You Ian Smith's white-rule regime-lost two­ "We offered to help them with are the funniest people I know. The world is thirds of their income; sugar growers were a source of energy closer to home, Norway screaming for oil, and you have it. And you similarly hit. In 1966, Rhodesia's exports and the Netherlands, and gas fields that ap­ walk around wringing your hands, com­ and imports each dropped by about a third; parently have a potential that could meet plaining about the problems it will bring and throughout the 14-year sanctions their needs. We weren't able to get that you, and wishing that it would somehow go period, the country was unable to attract agreement." away.'' much foreign investment or gain access to It so happened that a fair number of The basis for President Reagan's words at the world's major capital markets. prominent Norwegian parliamentarians his press conference seems to be a study by In neither the Italian nor the Rhodesian were in the U.S. at the time, attending the a consulting firm in Geneva, commissioned case, however, was the economic damage U.N. session on disarmament, and watched by the U.S. Department of Defense and pre­ severe. Mr. Renwick asserts that the aver­ Mr. Reagan on television. While not exactly sented on March 24. The study, titled "Al­ age Italian hardly noticed the effects of screaming bloody murder, they were terse ternative Strategies to Gas in Western sanctions, particularly not by comparison and rather sharp in their comments. The Europe,'' deals in great detail with known with the Depression, from which Italy was former prime minister, Mrs. Gro Harlem and probable gas reserves under the North then emerging. He estimates that in 1966, Brundtland, now leader of the opposition, Sea and the Norwegian Sea. Its policy rec­ Rhodesia's national income declined at most criticized Mr. Reagan for implying some­ ommendations, from which the U.S. govern­ by 5 percent. From 1966 to 1974, moreover, thing in the nature of jurisdiction by the ment has publicly dissociated itself, include Rhodesia's gross domestic product rose in United States over the energy reserves of attempts at exerting pressure on Norway real terms by 6 percent per year, one of the two sovereign nations-Norway and the and the Netherlands to get them to acceler­ world's highest growth rates. The end of Netherlands. ate the development of their gas fields, to this growth in the mid-1970s was due more Public criticism in Norway was even make this gas a viable and attractive alter­ to war and high oil prices than to sanctions. stronger in some quarters, with the left native to imported gas from the Soviet In both examples, sanctions were partially wing complaining that the president had Union via the Siberian-Western European undemined by offical and unofficial non­ openly attacked or reprimanded the Norwe­ pipeline currently in the works. complicance. The U.S., Germany, Austria, gians for lack of solidarity and will to coop­ In the study, Norway's energy policy is de­ Switzerland and Hungary refused to join erate. The American Embassy in Oslo point­ scribed as "intensely nationalistic," even the sanctions against Italy, South Africa, ed out that nothing of the kind could or compared to other Scandinavian countries. Portugal and its African colonies and the should be read into the statement, and said For the reasons mentioned above, it is hard United States which from 1971 to 1977 al­ that the President was referring to ex­ to fault that description, and for the same lowed the import of Rhodesian chrome-on changes of views that had been going on reasons, Mr. Reagan's use of the words "we the grounds that the only other source was among the allies since the industrialized offered to help" was perceived by many the Soviet Union-didn't go along with the countries summit meeting in Ottawa last Norwegians as especially grating. Rhodesia sanctions. Through unofficial cir­ July. The latest exchange of views on this sub­ cumvention, moreover, Mr. Renwick asserts But even the political leaders in the Nor­ ject between the U.S. and Norway took that Rhodesian products found their way to wegian department of oil and energy said place in Oslo June 21 and 22, when Richard the Soviet Union, Eastern Europe and virtu­ they were somewhat surprised at the presi­ Perle, assistant secretary of defense for ally all OECD countries. dent's words. They pointed out that during international security policy, met with the Sanctions are often conceived as a "blood­ the exchanges, which they describe as swaps minister for oil and energy, Vidkun Hved­ less substitue for war." but Mr. Renwick of information rather than of views, they ing, and the minister's deputy, Hans-Henrik suggests it is impossible to make sanctions have emphasized that the gas reserves Ramm. effective without being prepared to use mili­ under the North Sea and the Norwegian Sea In several interviews in Norway, Mr. Perle tary power. Mussolini reportedly told Hitler off Arctic Norway cannot be developed pointed out that for the Norwegians to pro­ that he would have been unable to conquer before the start of the 1990s at the earliest. ceed at their leisurely pace might expose Ethiopia if the League of Nations had em­ This, according to the Norwegians, is due them to two risks: bargoed oil shipments to Italy. The French, to several factors: First, exploration has There may be no market for their gas however, were afraid an oil embargo might hardly begun; second, building transporta- when it does come on line in the 1990s be- 16692 EXTENSIONS OF REMARKS July 16, 1982 cause of the downward projections for gas The U.S. decision to embargo large-diame­ pants without buttons, since otherwise he demand, and the Soviets might manipulate ter steel pipes to the U.S.S.R. in 1962 was a would have to hold them up with his hands. their price so as to squeeze the Norwegians response to growing European trade with And then what can he do with his weapon? out of the market even if there is one. His Russia and to concern about increasing Rus­ But if buttons really had such great impor­ answer to the objection that the Soviets will sian oil exports, according to Miss Stent. tance and we couldn't find any substitute be able to market their gas in Western Soviet plans at the time called for an in­ Europe long before the Norwegians anyway, for them, then I am sure that our soldiers crease in oil exports to the West to more would even learn to keep their pants up even if the Norwegians were to give up their than a million barrels a day, from a 1960 policy of deliberately slow development, level of 486,000 barrles a day. Even the in­ with their teeth, so that their hands would runs as follows: The Soviet pipeline, origi­ creased level was just 4 percent of world oil be free to hold weapons." nally planned to start deliveries in late 1984, sales. About 40 percent of the Soviet oil ex­ In the end the pipeline was finished, will be considerably delayed because of the ports went to Italy, Japan and West Germa­ though slightly late. Soviet oil exports in­ American embargo and because of endemic ny. creased as planned. Miss Stent concludes in Soviet administrative problems. And then AN EARLIER CONTRACT her book that "the chief result was a gener­ we are talking about the late 1980s, maybe al irritation both in East-West relations and even the early 1990s. West Germany was attracted to the pipe­ in relations between the United States and While both Norwegian and American offi­ line project as much for prospective steel exports to stop the slide in steel prices as its allies." cials deny that any kind of pressure has "It's obviously comparable," she says. Like been brought to bear, the difference of for oil availability. On Oct. 5, 1962, three opinion goes to the core of the present dis­ major Ruhr steel companies signed con­ the Soviet oil pipeline, the current Soviet pute between the U.S. and Western Europe: tracts to supply the U.S.S.R. with $28 mil­ natural-gas pipeline will contribute relative­ What strategy should the countries of the lion of 40-inch diameter steel pipe. ly small amounts of Europe's total energy Western Alliance follow in their dealings American officials cried out against the needs. The U.S. is again hinging its embargo with the Soviet Union? plans. "Economic warfare is especially well effort on one crucial item-compressors-in­ Here, the Norwegian conservative govern­ adapted to their aims of world-wide stead of large pipe, and trying to enforce ment, while less critical of the U.S. than its conquest," concluded Sen. Kenneth Keat­ the embargo on European firms retroactive­ Labor predecessor, is sticking to a policy ing's subcommittee after hearings on Soviet ly. oil. "They are using oil to buy valuable ma­ very close to that of the West German EUROPE MORE OUTSPOKEN TODAY Social Democratic leader, Helmut Schmidt. chinery and know-how from the West. They It's a more realistic version of the original have even succeeded in exchanging oil for One important difference today is that Nixon-Kissinger detente concept: Economic the pipelines, valves and tankers. . . . If Europe is more galvanized in its opposition cooperation with the Soviets is mutually these tactics continue to succeed, there is to the U.S. efforts. "The Germans don't beneficial and contributes to stability-and danger that Western countries will become play the same role, but America is showing may even bring some political spinoffs. But increasingly dependent on Soviet oil sup­ its allies that it doesn't like East-West trade it is not a case of Great Expectations so plies for vital defense as well as industrial policy," says Miss Stent. "The Russians are much as the thin hope that something activities." reacting in the exact same way: Their na­ might turn up, and, despite the differences, Oil companies also denounced the project. tional virility is being salted. It is inducing of sticking with Our Mutual Friend. Who They charged that the Soviet Union was them to develop their own capacity." happens to be Mr. Reagan-even when he dumping oil, selling it to Germany at a price of $1.71 a barrel, well helow world market Another difference today is that some chooses his words with less than immacu­ U.S. officials and conservative commenta­ late care. prices of $2.56 a barrel, according to Miss Stent. tors are focusing their criticism on the U.S. EFFORT To BLOCK SOVIET GAS PIPELINE Unable to muster complete allied support credit arrangements through which the RECALLS FAILED EMBARGO OF 20 YEARS AGO for a formal Western embargo, the U.S. ob­ Soviet Union is financing the pipeline. They tained an informal North Atlantic Treaty say that some Western governments are Organization resolution opposing the pipe­ subsidizing credit that Moscow wouldn't be "Trade denial has come to be an impor­ line. Highly sensitive to U.S. pressure. the able to raise on a free market. Such credit, tant symbol of our cold war resolve and pur­ West German government agreed to comply they say, will indirectly help the Soviets pose, and of our moral disapproval of the with the resolution and barred the three U.S.S.R.,'' wrote a presidential aide. build other segments of their economy or These words weren't written about the steel companies from fulfilling their con­ military. Proponents of the pipeline project Reagan administration embargo of natural­ tracts. In the domestic political uproar that reply, however, that the Soviet Union will, gas pipeline equipment to the Soviet Union followed. the ruling West German coalition in effect, pay for those credit subsidies in the aftermath of the military crackdown was brought to the brink of collapse after it through lower gas prices. used the heavy-handed tactic of walking out Miss Stent plays down U.S. arguments of in Poland. They were written 19 years ago of a meeting of the Bundestag, thus depriv­ by John F. Kennedy aide Walt Whitman ing the parliamentary body of a quorum potential security threats posed by energy Rostow about an almost identical U.S. em­ and of the chance to vote down the pro­ dependence on the Soviet Union. "Some of bargo of equipment for a Soviet oil pipeline posed sanctions. that dependence already exists. Besides in the aftermath of the Cuban missile crisis. The three German companies slashed there are other areas, such as Berlin, where All but forgotten in the U.S., the pipe em­ their operations in the wake of the sanc­ the Soviet Union can put pressure on with­ bargo of 1962-1963 remains a sore point for tions. The Soviet Union sued the firins. And out sacrificing earnings." Furthermore, she West Germans eager for trade with the West German-Soviet trade dropped sharply. adds, "it is in the security interests of Euro­ Soviet Union. Western experts on Soviet peans to diversify sources of supply. The trade argue the Reagan administration OTHER ALLIES WENT AHEAD Soviet Union is as attractive as Libya or Al­ could learn much from the pipeline battle Other allies weren't so easily deterred. geria." 20 years ago. They also say the outcome of The British deemed the NATO resolution the current fight will probably be the same: diameter pipe to the Russians. The Italians John Hardt, Library of Congress analyst, some construction delay, but ultimately interpreted the resolution as not applying about the Soviet Union. "The pipeline, like completion of the project, a political victory retroactively and fulfilled existing con­ the one in 1962, will be more costly, take for the Soviets and a setback for the unity tracts. Japan and Sweden also continued to more time, be of less quality. But the Soviet of the Western alliance. supply the Soviet Union. Union will offset the efficiencies it would The American embargo two decades ago The embargo stimulated increased Soviet have gained by making different priorities." remains freshest for the West Germans, production of large-diameter pipes, albeit at "We've created new opportunities for the who were the only ones to go along with the expense of other Soviet industrial Soviets," says Ed Hewitt, Soviet Union U.S. efforts then. "The Germans keep goods. The Soviet pipe was also somewhat expert at the Brookings Institution. coming back to this ,'' says inferior in quality to Western pipe. In 1961 "They'd like to come out with some diplo­ Angela Stent, Georgetown University pro­ the U.S.S.R. produced no 40-inch diameter matic coup, an agreement with Europe di­ fessor and author of "From Embargo to pipe; by 1965 it was producing 600,000 tons a rectly contrary to the wishes of the U.S. Ostpolitik," and book about West German­ year. government. If they can come off with a Soviet relations. "They were the only coun­ Soviet leader Nikita S. Khrushchev ridi­ try to go along with the <1980) Olympic boy­ culed the American embargo. "Anything visible, highly publicized agreement in operation, has served as a model of David and Thomas Economus are Sky As a result of reports received since 1975, what caring, innovative people can do Ranch success stories. David graduated the State Department has concluded that to protect and preserve our most im­ from high school in South Dakota and re­ "lethal chemical agents" have been used by portant natural resource, our young turned to Chicago, where he now works as a Communist forces in Afghanistan and Laos. people. I request permission that the boiler engineer in a hospital. Thomas grad­ Further, the State Department notes that article be reprinted in its entirety, and uated from college and worked at an adver­ the Russians possess such agents and were I urge my colleagues to read it, and tising agency in Chicago after he left Sky responsible for their use in Vietnam as well take its message to heart. It is nice to Ranch. He recently moved to Washington, as using them themselves in Afghanistan. D.C., as a salesman for a book publishing The central question concerns the nature of know that there are still people who company. the evidence. care, and, more importantly, have the Thomas recalls that when he left the In clinical medicine, decision making fre­ ability and determination to do some­ ranch, he was a completely different person. quently depends on "soft" evidence. Popula­ thing about the troubled youth of this "Sky Ranch taught me how to respect tion studies, anecdotal reports, deviations country. people, how to love people and how to from normal, morbidity and mortality sta­ ToHELPABoY adjust to living in society," he observes. tistics and careful evaluation of clinical data Sioux warriors once taught their children Father Kutil says the ranch keeps track all play a role in defining the presence of to grow strong on the high plains of the Da­ of graduates and has achieved a high rate of disease in a community. We teach medical kotas. The landscape has changed little success. "The boys who come here have low students and resident physicians that the since the days of Sitting Bull, and children self-esteem," he says. "We give them an correct diagnosis of a viral infection is still learn to survive in the bleak terrain. image of self-worth here. We teach them to either isolation of the virus or demonstrat- · But today the children come from far away, give respect and to get respect." ing the host response to the virus. Yet, in and for a special purpose. They are delin­ The ranch offers almost one-to-one con­ practical terms, the diagnosis and treatment quents who have been sent to Sky Ranch in tact between the staff and the boys. Up to of most viral infections proceed without this Buffalo, S.D. 40 boys stay at the ranch at any one time, kind of information. To probation officers and social workers, and the staff usually numbers 36. The USED AGAINST PRO-U.S. TRIBES the Spartan regimen of the Harding County school at the ranch is accredited for special Population field studies began with the re­ ranch offers the possibility of motivating education, but it cannot give a diploma. ports by the Hmong tribes of Laos. The boys labeled "incorrigible." To the boys, However, the ranch operates a halfway tribesmen participated in support of the aged 10 to 18, the ranch offers an opportu­ house in Sturgis, 100 miles away, which has U.S. against Communist forces in the moun­ nity not only to straighten out their lives a high school nearby. tains of central and northern Laos. Hmong but also to prove themselves-to test their On the grounds of the 300-acre ranch are refugees streaming into Thailand told of courage and ability by flying an airplane. a hangar, an airfield and two small planes. "poison rains" usually yellow but also red, "It takes a great deal of responsibility to Its 12 buildings include the school and a green and blue. The clinical symptoms usu­ solo out a plane, to take it up and bring it rodeo arena. And among the staff of teach­ ally included skin irritation, dizziness, down safely," says Father Dale Kutil, the ers and counselors is a flight instructor to nausea, hematemesis Alexander Haig tions, from Thunderbird to Skyhawk to Murray, is unable to fly because of medical Jr. This detailed document provided the evi­ Falcon to Eagle. "Not all the boys want to problems, but the ranch still offers boys the dence to establish the fact that chemical fly-and they don't have to-but we encour­ chance to take control of a plane-and their toxins, derived from fungi, were used as a age it," Father Kutil says. lives.e form of biological warfare. Tricothecenes 16694 EXTENSIONS OF REMARKS July 16, 1982 are potent, lethal toxins produced by molds cothecene when ingested in small amounts through inclusion of CWIP in the rate growing on a variety of grains. Known as over long periods. The direct effect of those base. the vicious circle can be broken mycotoxins, they have been a health prob­ toxins and certain of their metabolities di­ lem for humans and animals in many parts rectly on heart muscle is already estab­ where high risk creates low earnings of the world. lished. It may be necessary to revise some of quality that leads to power companies The accumulated data, after careful our current thinking in cardiology as it con­ paying the highest interest rates review and scientific scrutiny, lead to one cerns primary heart muscle disease. Known which hurts ratepayers. conclusion: Chemical and biological warfare as cardiomyopathy, there is one type re­ AFUDC AND CWIP is being conducted by the Soviet Union in ferred to as "beer-drinkers' cardiomyo­ Southeast Asia and Afghanistan. What does pathy" and thought to be associated with To understand the CWIP issue, a the civilized world do next? cobalt toxicity. As the toxic actions of myco­ brief review of relevant utility regula­ We need an intensive research effort on toxins become better understood, it now tory policy is necessary. Traditionally, the mechanisms of toxicity produced by tri­ seems possible that "beer-drinkers' cardio­ it has been assumed that ratepayers cothecenes. This effort must be guided by myopathy" may have resulted from con­ should not pay for a utility plant until the assumption: "What if American troops tamination with tricothecene toxins. it becomes used and useful-that is, and civilians were exposed to these toxins?" Mycotoxins are soluble in fats and may be until the plant actually provides serv­ One could take the position that this is a released slowly in the body from "fat ice. Accordingly, utility commissions problem for the United Nations or NATO or depots." There are highly sensitive analyti­ some other multinational organization. cal methods available for the detection of have allowed construction costs into After all, it's not happening to us. This may these toxins in body fluids and extracts of the utility rate base only when a plant not be true. tissues. We need to apply sophisticated begins service. Prior to the online Since February 1981, the U.S. Department techniques to microscopic tissue sections in date. construction costs. and debt serv­ of Health and Human Services' Center for attempting to elucidate the puzzling syn­ ice on funds borrowed to finance con­ Disease Control has been notified of 38 drome of sudden death experienced by the struction are usually credited to the cases of sudden death among Southeast Hmong refugees in the U.S. Asian refugees in various parts of the U.S. company's assets in an account re­ The highest number of cases was in Califor­ ACHIEVING GOAL WITHOUT NUKES ferred to as allowance for funds used nia. All these sudden deaths were investigat­ It is clear that the world-wide scientific during construction . which ed by medical examiners or coroners. Cer­ community must intensify its research ef­ is a paper asset only. No revenue is tain common features emerged from the forts concerning the enormous hazard to earned on these assets until PUC's before death. The families of 34 be delivered in an insidious, almost undetec­ utilities to include a portion of the refugees who died were interviewed and this table manner defying even late recognition costs of construction in rate base. re­ information added to the medical reports. of the act. I am convinced that, until proven In this group, 29 deaths were witnessed otherwise, the syndrome described is related ferred to as construction work in and occurred between 9:30 p.m. and 7:00 to biological warfare. progress the International Academy of Pathology.>• There are two kinds of utility rate in an age-matched American population and bases: That devoted to PERC-regulat­ a statistical analysis of death rates in Laos ed service and that devoted to intra­ was done. The estimated rate of sudden, un­ H.R. 6738: CWIP IN UTILITY state service that is regulated by State expected, nocturnal death among Laotian RATE BASE utility commissions. The policy of the men ages 25-44 is equal to the sum of the Federal Power Commission, FERC's rates of the four major causes of death among U.S. males of the same ages. HON. JAMES M. COWNS predecessor, prior to 1976 was to admit Detailed study of all data available sug­ OP TEXAS no CWIP in the FERC-regulated rate gests that the refugee deaths in the U.S. IN THE HOUSE OF REPRESENTATIVES base. In 1976, three conditions were constitute a distinct syndrome. The syn­ specified by the Commission under drome may be defined as follows: Sudden, Thursday, July 15, 1982 which CWIP might be granted: First, unexpected deaths without antecedent e Mr. COLLINS of Texas. Mr. Speak­ construction of pollution control facili­ symptoms occurring during sleep at night in er, I introduced legislation yesterday ties; second. conversion from oil or gas Laotian males who were either from areas that would amend section lll(d) of to another fuel; and, third, severe fi­ where toxin attacks had taken place or who could reasonably be assumeci to have passed the Public Utility Regulatory Policies nancial distress which might be allevi­ through such areas in their flight from Act to require State public ated through admission of CWIP to Southeast Asia. utility commissions to consider the ad­ the rate base. Given our limited knowledge concerning visability of including construction The General Accounting Office the effects of tricothecenes in humans, we work in progress in the rate criticized the Commission's cannot exclude the possibility that the base of electric utilities. The financial CWIP policy as being "vague and gen­ deaths were indeed related to toxin expo­ crisis facing the electric utility indus­ eral" in a 1980 report. Inter­ CWIP were included in rate base. pay the highest rates for borrowed nal cash generation for construction PURPA AMENDMENT money. Thus, there is a vicious circle through CWIP is critical in this Congress should not take sides on wherein low utility earnings quality regard. hotly contested regulatory issues such requires utilities to pay the highest in­ Another strong argument document­ as CWIP in the rate base. To establish terest rates for borrowed money which ing the need for CWIP in rate base is a tacit Federal presumption against in turn causes stock prices to fall, that, according to FERC Chairman CWIP would remove the flexibility of often below book; this leads to bonds Butler, "* • • current utility regula­ FERC to formulate a policy that could being downgraded with the end result tion discourages them (utilities> from be applied with discretion to different that the combination of low prices and making capital expenditures that cases and shifting economic condi­ quality discourages investment. would ultimately result in lower costs tions. Congress is not equipped to Unless broken, this cycle will repeat and, therefore, lower prices to consum­ become involved in the nuts and bolts until the utility industry is so finan­ ers." of PURPA tore­ ties could be eventually nationalized able to earn at least their cost of cap­ quire State utility commissions to con­ begins to seem more threatening. In­ ital, which is not happening under cur­ sider the appropriateness of including cluding CWIP in rate base could help rent regulation. As Butler pointed out CWIP in the rate base of their juris­ break this downward financial spiral in his April 23 testimony, investments dictional utilities. State PUC's know by helping utilities become less de­ in even cost-effective plants such as their utilities' regulatory situations pendent on external financing in the coal-fired generation "have too often best and should have discretion with capital markets. This is particularly become, for existing utility investors, regard to CWIP. At the Federal level, crucial as utilities are forecast to have exercises in assured losses." This unat­ the FERC should proceed in a deliber­ to invest over $100 billion in plant and tractiveness of investment which prej- ate fashion in its CWIP rulemaking. 16696 EXTENSIONS OF REMARKS July 16, 1982 The rationale for amending PURPA Philip Geyelin recently noted in a t..t.at were a balanced budget amend­ is that the need for CWIP in rate base column appearing in the Washington ment in the Constitution today, we is so important that PUC's should give Post that the opportunity has arisen would simply be in violation of the it serious consideration in generic for a fresh round of negotiations on Constitution. hearings. PUC's should provide the the future of the Palestinians but that The proposed amendment is an ex­ public with a complete explanation of to be successful such negotiations will pression of the viewpoint we all feel: their decision whether or not to in­ require new initiatives on all sides, in­ we should reduce the deficit and bal­ clude CWIP in rate base. cluding the United States. I have had ance the budget. But the amendment PURPA, among other things, re­ excerpts from that column included in provides absolutely no idea how to quires State PUC's to consider the the RECORD. achieve that goal. It sets out no pro­ adoption of various ratemaking stand­ The article follows: gram or process. As a result, the ards and make public their reasons for BuT ·wHAT LIEs ABEAn? amendment is really just a symbol. agreeing or failing to adopt them. According to the you-have-to-break-eggs­ We need more than symbols to end These standards include declining to-make-an-omelet school of thought, as reliance on the deficit, high interest block rates, time-of-day rates, lifeline practiced by Israel and applauded by the rates, and economic stagnation. The rates, load-management techniques, likes of Irving Kristol, the solution to the "pay as you go" plan, as those who cost of service, and interruptible rates, Palestine problem is simple. First you crack the PLO wide open, pulverizing Lebanon in supported it recognized, provided a among others. As these standards are passing. Then you somehow herd the hap­ workable and equitable method for ac­ designed to benefit the ratepayer, so less, stateless, widely scattered, former Pal­ tually achieving a balanced budget: the consideration of the adoption of estinian Arabs in the general direction of hold spending to current levels, and CWIP in rate base is a standard the the Hashemite Kingdom of Jordan. require offsetting, equivalent savings adoption of which could present sig­ What's urgently needed is a fresh start at or new revenues to pay for all new nificant ratepayer benefits. Ultimate­ the beginning of the road: renewed negotia­ spending. ly, however, the decision should be left tions on some variation of Camp David's ex­ periment with "full autonomy" on the West Let us subject all new spending to to the regulators on a case-by-case Bank. this same process, and let us find out basis. In this, the Arab moderates, even the Eu­ just what this Congress really is com­ The financial crisis of electric utili­ ropeans, can help. But first you need Egypt. mitted to support. ties requires immediate legislative and President Hosni Mubarak has promising Let us stop trying to deceive the regulatory responses that benefit both ideas about how to exploit the "new condi­ American people by marching around the industry and ratepayers. I hope se­ tion" of the PLO by promoting a political in lock step, singing a chorus of "Bal­ rious thought will be given to the issue Palestinian government-in-exile in Cairo ance the Budget" while continuing to of including construction work in composed of "moderates" prepared for re­ ciprocal recognition and negotiation with vote for reckless spending and endless progress in rate base. A copy of H.R. Israel. You also need an Israel whose West reliance on the deficit. I am willing to 6738 is provided below: Bank policy and performance convey a read­ submit the programs I support to that H.R. 6738 iness to reciprocate and negotiate. test. So were 80 percent of the Demo­ Be it enacted by the Senate and House of But for that you need an American admin­ crats. Unfortunately, over 98 percent Representatives of the United States of istration strong enough to stand up to of the Republicans in the House who America in Congress assembled, That sec­ Israel. Only then can the United States voted on the balanced budget "pay as tion lll of the Public Utility Regulatory hope to restore the influence it will need on you go" plan failed the test and voted Policies Act of 1978 is amended by adding the Arab side-the leverage lost in the the following new paragraph at the end smoke and thunder of American-supplied instead for big deficits. thereof: weapons in Lebanon-to make the most of So, I would caution voters to be very "(7) CONSTRUCTION WORK IN PROGRESS.­ "new" conditions in the Middle East. skeptical of those Members who vote The cost of construction work in progress for the goal of a balanced budget in shall be included in the rate base for the the form of an amendment, but who purposes of establishing electric utility "PAY AS YOU GO" VERSUS BAL­ voted against the "pay as you go" rates.". ANCED BUDGET AMENDMENT means of achieving it. A balanced (b)(l) Section 112(b) is amended by strik­ budget amendment without "pay as ing out "Not" in each place it appears in HON. GEORGE MILLER you go" budget-making is meaningless; paragraphs and <2> and substituting OF CALIFORNIA "Except as provided in paragraph (3), not". with a "pay as you go" budget, a con­ <2> Section 112 is amended by adding IN THE HOUSE OF REPRESENTATIVES stitutional amendment is totally un­ the following new paragraph at the end Thursday, July 15, 1982 necessary. thereof: • Mr. MILLER of California. Mr. The Oakland Tribune, one of the "(3) In applying paragraphs <1> and <2> in Speaker, a large number of the Mem­ leading newspapers in California, edi­ the case of the standard established under torialized on this subject earlier this paragraph <7> of section lll, the date of bers of the House has voted in favor of a sound, workable program to balance week. I would like to share that edito­ the enactment of this paragraph shall be rial with my colleagues. substituted for the date of the enactment of the Federal budget by 1985-the "pay this Act.".e as you go" budget alternative which I A BUDGET NOSTRUM offered. It is of considerable interest If words could balance budgets, the feder­ to note that 80 percent of the Demo­ al government would have no fiscal prob­ LEBANON cratic Members of this body who voted lems. Not since the days of Herbert Hoover has Washington seen a president so quick as that day voted for the "pay as you go" Ronald Reagan to denounce the evils of def­ HON. DOUGLAS K. BEREUTER balanced budget plan, which according icit spending. OF NEBRASKA to the Congressional Budget Office But when it comes to the federal budget, IN THE HOUSE OF REPRESENTATIVES would result in a $27.5 billion surplus words are useful mostly as disguises. Had by 1985. balancing the budget been as simple as rail­ Thursday, July 15, 1982 By comparison, the Congress passed, ing against deficits, the deed would already e Mr. BEREUTER. Mr. Speaker, the with the full blessings of the adminis­ have been done. Alas, none of the presi­ recent events in Lebanon, no matter tration, a budget which will add a dent's stern denunciations of federal red ink what we may think of them, have if quarter trillion dollars to the debt in have kept him from becoming the champion deficit maker of American history, with nothing else created a new political only 3 years, and that will result in a deficits of $100 billion-plus for this year and landscape in the Middle East. This $60 billion deficit even in 1985. next. new situation creates both new oppor­ We continue to hear that a balanced Nor would the words of the balanced­ tunities and new dangers for the budget amendment is the only way to budget amendment to the Constitution, now United States. end reliance on the deficit. The fact is being debated in the Senate, have saved the July 16, 1982 EXTENSIONS OF REMARKS 16697 president from himself. This amendment, that we need. To that end, the admin­ badly needed fleet in the tryng years warmly embraced yesterday by Reagan, istration has come up with a bold pro­ to come. Even more importantly, this would require Congress to adopt a balanced posal to satisfy our national security Nation needs to see this bold budget­ budget each fiscal year, except in wartime needs in a timely and efficient or when three-fifths of Congress votes for a ary planning in these days of fiscal deficit. manner, and at the same time, reduce constraint. The procurement plan for The president submitted a budget this the pressures on the budget coming CVN72 and CVN73 is not only the less year with a projected $121 billion deficit not from the Department of Defense. expensive, and more efficient way to because he loves deficits-all evidence To protect our interests around the bring back the needed power to our points to the contrary-but because he globe, and to counter the growing en­ naval forces, it is the right thing to do. hates taxes more. circlement of our trade and freedom I urge all my colleagues to look at His budget could have been balanced, but by the Soviet Union, the Navy, in its the plain sense of the need to initiate only at the cost of jettisoning his tax cuts, mission profile, has decided that a 15- this bold procurement plan.e his plan to build up the military and his battle group Navy is essential to our promise to protect the Social Security bene­ national security needs. These battle fits of current pensioners. A balanced­ POLITICS AS USUAL budget amendment would have changed groups would be centered on the large­ nothing, because no government looking out deck nuclear-powered aircraft carrier. for the good of the country would have The normal method of acquisition is HON. WILUS D. GRADISON, JR. drastically raised taxes in the middle of a beginning of construction of one carri­ OF OHIO painful recession. This year three-fifths of er and then procurement of the next IN THE HOUSE OF REPRESENTATIVES Congress would have voted for a deficit. near the end of the construction of Had the amendment been in effect this the first. In an imaginative effort to Thursday, July 15, 1982 year, though, a budget compromise would combine urgent and badly needed e Mr. GRADISON. Mr. Speaker, have been much more difficult to achieve. Under the amendment, a shifting minori­ shipbuilding with cost savings, the social security is at the brink of bank­ ty of 41 percent of the members of Congress Navy has proposed that the next two ruptcy. How could Congress have al­ would have been in a position to sabotage carriers built, be built concurrently, lowed a financial crisis to come so any budget worked out by the majority. The thus giving this country additional close? Unfortunately, the answer is Democrats in the Senate could have blocked naval strength many months in ad­ "politics as usual." the third year of the tax cut. The opponents vance of earlier planning and at a Last September, politics derailed a of the president's Pentagon spending could lower cost. In addition to bringing the strong bipartisan bill to finance the have held the budget hostage until he new carriers CVN72 and CVN73 in at system that the House Ways and agreed to cut back. Control over govern­ an earlier date, this bold procurement ment would have shifted from the majority Means Social Security Subcommittee elected by the people to minority veto plan will allow for earlier delivery of had been working on for over 6 groups. It is not a good way to run a govern­ the CVN71, already under construc­ months and that was near completion. ment. tion. It now seems unlikely that the 97th Railing against federal deficits is political­ Studies indicate that concurrent pro­ Congress will even address the issue. ly popular, but not as popular as deficits curement of the next two line carriers Thus, this Congress rightfully will be themselves. Managing the economy through will result in a savings of over $754 viewed as irresponsible with regard to federal fiscal policies has proved an effec­ million, as opposed to the traditional our country's largest social program. tive way of smoothing out the worst bumps method of procurement. These savings Despite this evidence that politics in the business cycle. Neither Democrats can be broken down into four specific nor Republicans will give up the tactic, nor has prevented responsible congression­ should they. areas: one, reduced startup costs, $100 al action, our political parties are Unfortunately, Congress has not always million; two, enhanced productivity, again playing with the fiery issue of over the past decade, had the discipline to $100 million; three, multiple purchases social security. And once again it is the match deficits in tough times with surpluses of material, $250 million; and four, re­ beneficiaries that will be harmed the or balanced budgets in good years. Thus the duced escalation, $304 million. most. impetus for the balanced budget amend­ The reduced escalation costs are the The political fire was lit in 1969 ment. most significant. They are the most when social security was first included More discipline in the budget process is significant in any weapons systems necessary. An approach something like the in the unified Federal budget. In the "pay-as-you-go" budget process suggested by purchase. 1970's, consecutive deficits in social se­ Rep. George Miller, D-Contra Costa, which The mostly significant feature of curity which created the need for would require Congress to match each in­ this bold procurement proposal, how­ reform of the system coincided with crease in spending with new tax revenue or ever, that the Navy estimates that by large budget deficits and the desire to commensurate cuts in other programs, procuring the carriers at the same cut back general revenue spending. Be­ would be useful. But putting the budget time, there will be bonus in having cause social security was part of the process into a constitutional amendment both the CVN72 and CVN73 delivered budget, confusion over the need to that tampers with majority rule in Congress for operations 22 months before the is the wrong way to go.e reform the system and the need to bal­ regular procurement schedule would ance the overall budget resulted. Con­ permit. In addition, the Navy, and the sequently, proposed changes to slow CARRIER PROCUREMENT: A shipyard that would do the construc­ the rate of growth in social security BOLD PROPOSAL tion have indicated that concurrent benefits have been portrayed as cuts procurement would enable the already "to balance the budget on the backs of HON. ELDON RUDD authorized CVN71, to be delivered 14 the elderly." Politics have forced these months ahead of schedule. This mea.ns unfortunate public perceptions that OF ARIZONA that the United States would receive IN THE HOUSE OF REPRESENTATIVES have kept reform from moving for­ the operating capacity amounting to 5 ward. Thursday, July 15, 1982 years between the three ships that it would not have had under the normal Taking social security offbudget e Mr. RUDD. Mr. Speaker, it is evi­ procurement procedure. Even more would eliminate much of the basis for dent that if we are to retain the free­ importantly, this two-ship procure­ political maneuvering. For this reason, doms that we cherish: that if we are to ment will have a neglible effect on the support for moving if offbudget has remain free politically, and economi­ fiscal year 1983 deficit as outlay differ­ been growing ever since it was placed cally, that a strong Navy is a must. ence between one- and two-ship pro­ in the budget. The 1971 Social Securi­ However, while no budgetary problems curement for the first year is only $25 ty Commission endorsed this proposal, should dictate national security policy, million. as have four former Social Security we must take into account our finan­ Clearly, the Nation can use an addi­ Administration Commissioners, includ­ cial well-being as we build the Navy tional 5 years of operations out of our ing Robert Ball, and two former Secre- 16698 EXTENSIONS OF REMARKS July 16, 1982 taries of HEW, including Wilbur tory preference for the use of commer­ curtailment in GSA purchases of metal Cohen. President Carter's National cial products to meet the Govern­ office furniture which has existed for the Commission on Social Security and, in ment's needs. last several years. Only recently, GSA once particular, Bob Myers, one of the ar­ That change would mean that Mr. again began buying furniture and Jebco was chitects of the social security system, Barrow's small business, because it fortunate to be low bidder on several con­ recommeded separation in 1981. Rich­ tracts. However, if Jebco is precluded from sells much more to Government than bidding on future GSA purchases, it will be ard Schweiker, Secretary of HHS, to commercial sources, would lose the unable to operate. Jebco's sales to the U.S. stated in Ways and Means testimony right to bid for GSA and other Gov­ Postal Service are insufficient, standing that he personally likes the idea. A ernment contracts. A company like alone, to sustain operations over the long majority of the members of President Mr. Barrow's, even if it might be the term. Reagan's National Commission on lowest priced supplier of Government With that background, I would like to Social Security Reform, which must office furniture, would be shut out be­ turn to the proposed Uniform Federal Pro­ report by December 31, 1982, support cause its products are not generally di­ curement System . separation. verse or numerous enough to grab a From Jebco's standpoint, the most signifi­ cant change in the proposal is the creation Last October, I introduced a bill to share of the commercial market. of a new, statutory preference for "the use separate the social security trust funds This possible policy change should of commercial products to meet the govern­ from the Federal budget. In June, I re­ be scrutinized very carefully. Would it ment's needs." Commercial products are not introduced a technically amended ver­ discourage full and free competition, specifically defined in the legislation most sion, House Joint Resolution 499, while centralizing the sources of Gov­ recently proposed by the Administration. which now has over 80 cosponsors ernment furniture? Would it penalize However, earlier draft legislation defined from both parties. small businesses who have specialized commercial products as ". . . property or Separation will strengthen the budg­ in designing goods for the Govern­ services which are regularly sold or made ment because it was the only way to available to the public at established cata­ eting of general revenues by ending logue or market prices." the distortion of the deficit that compete against bigger companies who Implementation of this commercial items occurs when the independently fi­ sen large amounts to both public and preference will discourage competition in nanced social security trust funds are private sectors? the metal office furniture industry. Office incuded in the budget. Moreover, sepa­ What follows is the testimony of Mr. furniture is unique in that desks, credenzas, ration will save the independent social Barrow's lawyer, Mr. Lee Henkel, file cabinets and other furniture in an office security system from ill-conceived cuts before the Government Affairs Com­ typically must be the same color and style designed to balance the budget. Per­ mittee of the other body on June 29. and be otherwise compatible. Commercial It makes a very good case for opposing buyers rarely buy one type of metal office haps most importantly, separation furniture which does not match others. As a may dampen the politics enough to any legislated change in GSA's result, to be viable in the commercial allow a responsible reform of the present policy of seeking widespread market place, a producer must offer a fairly system to be made.e competitive bids. complete line of metal office furniture at all The testimony follows: times. This requires capitalization and a Mr. Chairman and Members of the Com­ sales volume much greater than Jebco has, PERSONAL EXPLANATION mittee: or realistically could hope to have. In the I am Lee H. Henkel, Jr. of the law firm of past, the Federal Government has achieved HON. CUNT ROBERTS Henkel, Hackett, Edge & Fleming, P.C. of desired coordination through specification. OF SOUTH DAKOTA Atlanta, Georgia. I am here today on behalf Jebco has been able to compete and to bid of our client, Jebco, Inc. , a contract and produce particular items to specifica­ IN THE HOUSE OF REPRESENTATIVES manufacturer of metal office furniture lo­ tion. Under the commercial items prefer­ Thursday, July 15, 1982 cated in Warrenton, Georgia. I am accompa­ ence, the Federal Government would still nied by Mr. J. Eliott Barrow, owner of achieve coordination through specification, e Mr. ROBERTS of South Dakota. Jebco, and by my partner, Stanley H. Hack­ although the new specifications may be less Mr. Speaker, official business in my ett. detailed than in the past. Jebco has no ob­ congressional district prevented me Jebco manufactures metal office furni­ jection to commercial specifications or func­ from being on the floor for votes on ture, principally for sale to the United tional specifications per se. Jebco could July 13 and 14. Had I been here, I States Government . and postal stor­ manufacture quality products which would would have voted as follows: age and handling equipment for the U.S. Postal Service . price. However, Jebco and similarly situated rollcall No. 178, nay; rollcall No. 179, Through the yearn, Jebco has also made producers, in effect, would be precluded sales to the military. Jebco makes some from bidding under the proposed statutory nay; rollcall No. 180, yea; rollcall No. commercial sales each year, but such sales commercial items preference, regardless of 181, yea. are negligible in terms of its total sales their ability to produce pursuant to the new On July 14: Rollcall No. 182, yea; volume. specifications. rollcall No. 183, nay.e Jebco does not manufacture a full line of The commercial items preference appears metal office furniture on an on-going basis. to be based on the presumption that if an However, on a contract basis, Jebco has item is offered in the commercial market MAINTAIN WIDE COMPETITION manufactured double and single pedestal place it is "good". Conversely, if an item is FOR GSA CONTRACTS office desks; clerical and secretarial desks; not offered in the commercial market place card file cabinets; map and plan filing cabi­ it is "bad". However, all that is really being HON. NEWT GINGRICH nets; tables and stands; costumers; various done with the preference is that one set of filing cabinets; mall boxes; USPS workroom specifications is being substituted for an­ IN '.rHE HOUSE OF REPRESENTATIVES of other office furniture. Jebco's present other set . Thursday, July 15, 1982 capitalization is approximately $2,500,000. Furthermore, the only specific assurance of Its sales volume has ranged from $5,000,000 quality is a representation by a bidder that e Mr. GINGRICH. Mr. Speaker, a to $8,000,000 in recent years. Jebco's present the product it proposes to supply is the home-State friend of mine, Mr. Eliott capitalization is insufficient to permit ongo­ same grade as supplied in the commercial Barrow, has been manufacturing ing production of the broad line of furniture market place. Jebco can make the equally metal office furniture since 1956. Most to achieve and maintain viable commercial valid representation that the product it of his production has been sold to the sales. would propose to supply to the Government General Services Administration and Jebco normally employs 200-250 people; in the same grade as that supplied by others to the U.S. Postal Service. employment has been as high as 350 in to the Government and in the commercial recent years. Jebco's minority employment market. The bottom line on quality is the Now Congress is considering a pro­ normally averages 70 percent. For the last same in both cases-the Government is posal called the Uniform Federal Pro­ several years, Jebco's employment has been looking to the integrity of the manufacturer curement System. Legislation pushed reduced considerably. The reduced employ­ and its ability and willingness to repair or by the administration creates a statu- ment has been attributable directly to the replace products which may be defective. July 16, 1982 EXTENSIONS OF REMARKS 16699 Tlie proposed statutory preference for ROBERT E. HULL, A But all is not well. A recent article cvmmercial products effectively would ex­ DISTINGUISHED HOOSIER that appeared in the July 11 issue of clude a large body of current suppliers from Parade magazine entitled "Why Viet­ competing in the future for government HON. JOHN HILER cong Flee," based upon firsthand rev­ business. Again I refer to contract manufac­ elations from former high-ranking turers, such as Jebco, who typically bid to OF INDIANA IN THE HOUSE OF REPRESENTATIVES Vietcong officials, strongly confirms supply volume purchases pursuant to some what many of us have been arguing all type of specification and who do not main­ Thursday, July 15, 1982 tain a full inventory for sale to the general along-that the situation in Vietnam public on an ongoing basis at established • Mr. HILER. Mr. Speaker, many of is infinitely worse now under totalitar­ prices. us here in Congress frequently speak ian communism than it ever was under A contract manufacturer invariably can of those who have made special im­ Presidents Diem or Thieu. The con­ beat a commercial manufacturer on price prints on our lives, or inspired not quering armies from the north were for a specified product, with quality and only us but hundreds of fellow Ameri­ quick to banish the National Libera­ other relevant factors defined by specifica­ cans whose lives also have been tion Front flag of the Vietcong. They tion. The new statutory preference, in ex­ touched by the character, leadership, confiscated the best houses, the rich­ cluding such contract manufacturers from and wisdom of those close to us. est plantations, and the luxuries of even bidding for government business, is Mr. Speaker, such a man passed the black market. Thousands of Viet­ blatently anticompetitive. Please under­ away earlier this year. His name was namese have been sent to prisons or stand that in practical effect, a statutory Robert E. Hull, a close family friend, "reeducation camps", 500,000 are preference in favor of one type of product respected co:m.munity leader, and out­ being exported to Siberian labor will operate as a statutory exclusion of standing achiever in the foundry in­ camps-many to work on the Soviet others. dustry. pipeline-and nearly a million Viet­ However, to deal with this obvious objec­ Mr. Hull typified the greatness that namese have fled by boat. As Truong tion, the proposed UFPS would simply rede­ inspired the successful growth of our fine competition from the "full and free" Nhu Tang, a founder of south Viet­ standard, which has been the federal stand­ Nation years before him. He advocated nam's National Liberation Front and ard in one form or another since the early the virtues of free enterprise, not only later its minister of justice, candidly 1800s, to the "efficient and effective" stand­ in words, but in deeds. He cofounded admitted: "The living situation in the ard. The proposal makes clear that this new Kingsbury Castings, Inc., a ductile South has never been as bad as it is standard of competition could be satisfied iron foundry, serving as vice president now. The Hanoi Communist Party has by going to as few as two producers. until his retirement in 1980. He was in­ concentrated power into a small caste A traditional response to competition is to volved in the experimentation that led of corrupt and incompetent bureau­ reduce prices; the response articulated in to the development of that new metal. crats and brutal security forces. Cur­ the proposal is to redefine certain competi­ He was also one of the early foundry­ rent repression is far worse than tors out of the system. We find that quite men who worked on the development during Thieu's regime, and there is disturbing, and sincerely pray that this Sub­ of the highly successful Meehanite nothing to eat. Hanoi blames these committee-and this Congress-will not go process. problems on the Americans or the Chi­ along with such a blatent grab for the Mr. Hull's leadership did not stop nese, but the real cause is themselves." public dollar. there. He was active in the American Mr. Speaker, at this time I would However, when S. 2127 is considered to­ Foundryman's Society for 45 years, like to submit this excellent eye-open­ gether with Executive Order 12352-which holding numerous postions of respon­ ing article for the RECORD. has already been promulgated-the effect is sibility. He also served as a member of very close to the statutory preclusion con­ WHY VIET CONG FLEE tained in the proposed UFPS. Executive the National Foundry Association and Order 12352 provides in part that the Gov­ Cast Metals Federation of Indiana. Nguyen Tuong Lai, the former VietCong ernment shall "establish criteria for en­ Mr. Speaker, Mr. Hull is deeply national chief of intelligence, guided his hancing effective competition ..." and that missed by those of us who were fortu­ wife and children across the rickety bamboo these criteria shall include such actions as nate enough to have known him, and catwork suspended above the mudflats sur­ " ... expanding the purchase of available will long be remembered for his serv­ rounding the boat dock on Vietnam's tropi­ commercial goods and services." We already ice to his community, his State, and cal coast of Rach Gia. Using the stealth he know that there is a certain amount of Or­ his Nation.e had learned as a Viet Cong surviving jungle wellian "double-speak" here. "Effective wars for 21 years, he kept the movement of competition" clearly means something less their shadows camouflaged within the than "full and free" competition. When we WHY VIETCONG FLEE moonlit walls of the pier. have statutorily permissable limited compe­ Quietly, after lifting the last of his chil­ dren onto the boat, he untied the small tition as contained inS. 2127, and an Execu­ HON.ROBERTK.DORNAN craft, which slowly drifted out to Sea. tive Order that requires the expanded pur­ OF CALIFORNIA Eighteen people-grandparents, adults and chase of commercial items, then it is not too IN THE HOUSE OF REPRESENTATIVES children-huddled. All on board kept a nerv­ difficult to conclude that manufacturers ous watch for the Soviet-made PT boats of such as Jebco will find themselves excluded Thursday, July 15, 1982 the Vietnamese navy. Capture would mean from the system. e Mr. DORNAN of California. Mr. years of prison labor or death. Worse, in All we ask, Mr. Chairman, is that under Speaker, during the Vietnam war, these waters prowled pirates who preyed whatever system is ultimately designed, we there was a great hue and outcry upon defenseless refugees, looting valuables have the right to compete. We are extreme­ among JJrotestors that the "struggle", killing the men, carrying off the women and ly concerned that efforts are underway to as they referred to it, was simply one children as slaves. Two old grandmothers deny us this right. We resent it, we will prayed aloud for safety. Lai wondered resist it, and we sincerely hope this Con­ of national liberation-liberation, that whether they'd make it. It was autumn, is, from the corrupt officials of the 1979.) gress will resist it. pro-American Diem regime. Many in That concludes my formal statement. We Since the Americans left their country in the media hammered away incessantly 1975, nearly a million Vietnamese have fled would be delighted to respond to any ques­ by boat; an estimated half of them have tions the Committee may have. that those in the north merely sought to reunite the oppressed people of the died at sea. Parade has found that a surpris­ Thankyou.e south so that there would once again ingly high number-thousands, according to refugee leaders-were Viet Cong and Com­ be a single, united, and prosperous munist Party members. These unusual and Vietnam. Once the "imperialistic" rarely noted refugees have resettled in Americans were defeated and driven Thailand, Hong Kong, Malaysia, Switzer­ out-so the propaganda went-all land, Paris and even Boston and San Jose, would be well. Cal. What follows is the result of interviews

8!H)59 Q-86-37 (Pt. 12) 16700 EXTENSIONS OF REMARKS July 16, 1982 with high-level Viet Cong and Communist bers their disillusionment: "We contributed Point Plan for National Reconciliation," leaders we believe representative of those so much during the war, and suddenly we which was approved by Hanoi's Communist who have escaped. They made the following don't have any responsibility and are not leaders and became the centerpiece of the assertions about conditions in Vietnam trusted by the party." 1973 Paris Peace Agreement. It called for a today and the actions of the Communist Like most Viet Cong leaders, Lai had rela­ coalition government in Vietnam, free and government since its takeover in 1975: tives who had been officials in the defeated democratic elections and no foreign inter­ Thousands of citizens-including many Southern regime. "After years of fighting." ference in government affairs. former Viet Cong-have been imprisoned, he says, "I reestablished close contact with When the war ended, Tang recalls, North sent to "reeducation camps" or executed. In my relatives. I had brothers, and my sister's Vietnamese political officials went South addition, 500,000 Vietnamese are being ex­ husband, who fought in the ARVN £South with the conquering army. They fought ported to Siberian labor camps by agree­ Vietnamese Army], and my uncle, a landown­ among themselves, sometimes at gunpoint, ment with the Soviets. er. I developed good relationships with them. to confiscate the best houses, richest planta­ Large amounts of Vietnam-grown rice, But at party self-criticism sessions, cadre tions and luxuries of the black market­ rubber and other raw materials are shipped members from the North condemned South­ while refugees fled the country by the thou­ to the Soviet Union, while the Vietnamese em cadres like myself for associating with sands. The economy deteriorated rapidly be­ at home go hungry and the economy dete­ our 'capitalist' family members." cause of inadequate industrial planning by riorates. Though given a reduction in rank, Lai was the Soviet-trained Northern cadre, Tang Religious freedom has been restricted named head of security and counterintelli­ says. greatly, with church and temple properties gence in southwest Vietnam. There, he "The living situation in the South has confiscated or desecrated. found himself participating in the forma­ never been as bad as it is now," says Tang. U.S. pilots were seen doing hard labor in tion of a police state. Every citizen was sus­ "The Hanoi Communist Party has concen­ North Vietnam several months after Hanoi pected of being a counterrevolutionary who trated power into a small caste of corrupt said it had freed all POWs. These men are had to be watched or sent to prison or one and incompetent bureaucrats and brutal se­ still there. of the "reeducation camps," which actually curity forces. Current repression is far The once-questioned "domino theory" were forced-labor compounds. Among the worse than during [President Nguyen Vanl seems to be proving out. The Vietnamese thousands sent away were many former rev­ Thieu's regime £1967-751, and there is noth­ Communists plan, after conquering Cambo­ olutionaries, imprisoned because they had ing to eat. Hanoi blames these problems on dia and Laos, to "liberate" Thailand. opposed the severity of the Northern Com­ the Americans or the Chinese, but the real Nguyen Tuong Lai's family and friends munists and the Soviet presence in Vietnam. cause is themselves. were lucky. After nearly a week at sea in Lai's disenchantment increased when he "For example, the damage caused by their small boat, they arrived at a refugee was made commander of the reeducation American defoliation during the war has camp on Bidong Island, Malaysia. Lai was camp at Long Tan and ordered to draw up a been exaggerated to give an alibi for the given a job helping to question other former stricter national surveillance policy. But catastrophic agricultural situation. But the Communist soldiers and political cadre what finally drove him to leave his country real reason is that the farmers have adopted members, who continue to arrive in the were the invasions of Cambodia and Laos. a form of passive resistance and protest Bidong camp. For two years, the family "I am not afraid to die or sacrifice for my toward the government." Farmers refused waited to emigrate. Today, in a small town country," Lai says, "but I was against the to join government cooperatives based on in the mountains of Switzer!and, Lai is mission in Cambodia. As a party member, I the Soviet model, Tang says, because of learning the local language and how to drive was obliged to obey orders. But many unfair compensation for their work and a car. Southern members questioned the reasons broken promises by the Communists, who He had been a soldier all his life. At 14, he and merits for going into Cambodia. Many had agreed to grant the peasants ownership joined the Viet Minh to fight the French in of us felt it was because of Cambodia's alli­ of their land. the swamps of his native Mekong Delta. ance with China and our own party's obedi­ Much of the rice grown in Vietnam today, After the defeat of the French at Dienbien­ ence to Soviet dictates. After 21 years of Tang notes, is shipped to the Soviet Union phu, Lai was assigned to organize resistance war, another battle was beginning. I felt it or goes to the army to continue the unpopu­ units in the delta. By 1959, he had elite would not be good for the reconstruction of Vietnam. So, even though I was unsure how lar wars in Cambodia and Laos. Meanwhile, membership in the Vietnamese Communist my former enemies in the West would the people at home starve. Party. He commanded Viet Cong units in accept me, I decided to leave." "We were betrayed by the Hanoi regime," early battles and, having proven his valor, Truong Nhu Tang was another who Tang says, "because they immediately was sent to military academies in the Soviet emerged from Viet Cong jungle headquar­ brought the Russians into the South, and Union and Hanoi, then home to lead a com­ ters in 1975 as the last U.S. helicopters flew today they are everywhere in Vietnam." To mando regiment against U.S. forces. out of Saigon. Today, at age 59, he lives in help pay its debts to the Soviet Union, the Lai is a huge man who stood head and Paris, writing his memoirs while his wife Vietnamese government recently agreed to shoulders above the troops in whom he had works as a pharmacist to help make ends export 500,000 "guest workers" for Siberian to instill fearless obedience-their work was meet. Small, white-haired, conservatively slave labor, Tang says. He estimates that among the most daring and bloody in the dressed, soft-spoken-Tang hardly seems most of these slaves came from the reeduca­ war. During the 1968 Tet Offensive, in the dedicated former revolutionary leader in tion camps and jails for political prisoners. which the Viet Cong was decimated, his a vicious civil war. Tang knew that his authority as justice troops led a suicide attack on the Bien Hoa Yet this French-educated sugar industry minister of the revolutionary government airfield. executive from one of South Vietnam's most was illusory. He had assembled a staff of ~ Lai was assigned to Nafiomil Liberation respected families was one of 60 nationalists legal experts, but those not approved of by Front JACK KEMP, REPUBLICAN anything would be better than Thieu. NLF prison or death, which happened to many OF NEW YORK, ON THE ENTERPRISE ZONE propaganda promised a just unification of party members, even veterans of the French TAX ACT BEFORE THE SUBCOMMITTEE ON our society, and the Communists promised war." ' ECONOMIC STABILIZATION OF THE COMMIT· peace, justice, democracy, independence and In June 1973, Yen says, he saw 30 or 40 TEE ON HOUSING, BANKING, AND URBAN AF­ a better life. On paper, the NLF was a coali­ American pilots still held as POWs in the FAIRS, JULY 13, 1982 tion of many groups. We did not realize highlands of North Vietnam. It was two Mr. Chairman and Members of the com­ that, in reality, only one group controlled­ months after the North Vietnamese govern­ mittee, I want to thank you for giving me the Communist Party." ment said it had released all POWs, and to this opportunity to testify on behalf of the Shortly after the "liberation," Hoan says, this day, adds Yen, these men have not been Enterprise Zone Tax Act. the Communists cracked down on all reli­ released. "The district chief of that region Let me also say how pleased I am that gious groups. Most prominent antiwar lead­ told me the party's central committee in these hearings will focus on two of the ers were imprisoned, church and temple Hanoi had sent these prisoners to his region issues most crucial to the success of enter­ properties confiscated, pagodas and church­ for him to take care of,'' says Yen. "The prise zones: community involvement and es desecrated and the laity was prevented men were doing hard labor." Today, the fate venture capital. These two issues have been from going to religious services. A few tem­ of these Amedcans is still in Hanoi's hands. repeatedly raised in my own discussions ples-run, Hoan says, "by puppets of the Yen says that Hanoi will try to use these with community leaders in my Congression­ Communists"-were allowed to remain for prisoners as bargaining chips to reestablish al District, particularly the Black Leader­ cosmetic purposes. diplomatic relations with the U.S.-which, ship Forum, and the Enterprise Zone Task After the fall of Saigon, Hoan returned to he says, "would be a grave mistake." He em­ Force. I understand that today you are his home in South Vietnam to teach school. phasizes, "It would only help them to make taking testimony on the role of the commu­ He was informed that within the first days war with other countries and further op­ nity; however, I'd like to take the liberty to of the "liberation," 700 people were execut­ press the Vietnamese people. The aid would discuss both this and potential sources of ed in his province and thousands impris­ be used to buy weapons and supply the venture capital in my testimony this morn­ oned. army to invade the rest of Southeast Asia. ing. According to former intelligence chief Lai, In addition, the Soviets would like to use The notion of community lies at the heart "people's courts" were staged in public the Vietnamese to divide the U.S. and of enterprise zones. Not that this is always throughout the country. All tried were sen­ China." popular! Enterprise zone supporters are tenced to death, but Communist Party According to Nguyen Tuong Lai, resist­ often accused of "confusing" people and policy was to kill them in secret places so ance to the government is increasing in places, of refusing to accept that urban re­ the international media would not pick up Vietnam-paasive resistance by civilians and development is really very different from the story and local populations would not be organized armed resistance by former Viet helping inner city residents find new Jobs repulsed by the spectacle. Another form~r Cong and ARVN members and tribespeople. and opportunities. government official estimates that 200,000 In 1977, Lia says, the resistance forces blew In fact, I think this so-called "confusion" executions took place. up a major fuel storage facility at Long is one of enterprise zones' greatest In 1975, the Communist made Hoan a Binh-something the Viet Cong could never strengths. My good friend and colleague "legislator" in the National Assembly of the accomplish during the war. Yen adds that Representative Robert Garcia sums this up Socialist Republic of Vietnam. But, like the resistance has been lar&'ely hidden by very movingly when he describes the South other Southerners appointed to the assem­ the government. Bronx of his childhood. It was a true com­ bly in Ho Chi Minh City, he was never al­ "My job in Hanoi was to prepare people munity, a place where people worked and lowed to speak or act on anything substan­ for visits by Western media,'' Yen says. lived, shopped and spent their leisure time. tial, as the assembly was controlled by a "When Western delegations come to visit Yet today in areas like the inner city Buffa­ dozen party members from North Vietnam. Hanoi or other cities, the people are pre­ lo or the South Bronx, money flows in from As assemblyman, Hoan took two trips to pared ahead of time as to how they should outside and escapes back out again. Very North Vietnam, where he had access to in­ act and what they should say. Even on the little economic activity is being generated formation on national objectives and gov­ streets, the reality is quite different from within. ernment policies. what a journalist will be shown. The secret This economic stagnation produces more Hoan says the Vietnamese do not want to police are everywhere. A journalist will be than just the outward signs of urban stop fighting after the conquest of Laos and taken to see only trusted party members, decay-the derelict streets and burnt shells Cambodia. "During the first session of the who wm say what the party has told them of buildings. It drastically limits the oppor­ National Assembly in Hanoi," he recalls, to say and nothing more. When Westerners tunities of people who live there. Many of "Tran Quynh, assistant to party secretary see a Vietnamese smile, they do not realize these individuals, like each new wave of im­ Le Duan, told me: 'The liberation of Thai- that it is a form of social dignity, not a re- migrants that arrived in America's cities, 16702 EXTENSIONS OF REMARKS July 16, 1982 came seeking opportunity. As innovation the communit~''" role in enterprise zones. In tial-that is, capital for newly forming and economic growth has dried up in these a speech before a Seminar on Enterprise firms. Banks provide less than 10%. More cities, so has their chance to get on that cru­ Zones held in Philadelphia on March 27 he than 85% of all new businesses start without cial bottom rung of the ladder to economic made the following observation: using any outside debt or equity at all. success. "A strong local business community-rep­ What this suggests, it seems to me, is that It's just not enough to say that many of resentative of the residents of that commu­ any significant venture capital program these individuals can pick up and move nity-is critical to the stabilization of any must seek out the greatest potential source somewhere else. With the disintegration of neighborhood. Local owners have a stake in of capital: the private savings of individuals. communities come~ the abandonment of val­ the community, and therefore provide posi­ UDAG and SBA loans together will provide uable intrastructure, and far worse the tive role models for others. They also are a little over $1 billion in new capital this abandonment of the very poorest Americans acutely sensitive to the needs and character­ year-and most of this will not be venture to areas where there is no longer any tangi­ istics of their neighborhoods-a sensitivity capital. At the same time Americans have ble opportunity and therefore no incentive which would be difficult for owners who almost $200 billion invested in money to preserve and invest the human capital reside elsewhere." market funds. if we could capture just one­ which all of us possess. I have been focusing on what community half of one-percent of this for our inner This is why I have been so deeply disap­ groups and local leaders can bring to enter­ cities we would have drastically increased pointed by the British approach to enter­ prise zones. At this point, however, I usually the venture capital available for investment prise zones. Instead of trying to revitalize get a question back-a very fair question. in these areas. communities, the British government chose "What's in it for us, the community group?" Aside from sheer quantity, there is an­ to take enterprise zones outside of commu­ One blunt answer is that it can give these other advantage to creating new incentives nities altogether. By creating zones in aban­ groups clout with the local, state, and feder­ for private capital rather than trying to doned areas, and concentrating incentives al government. I have always argued that create a new public capital program. The on investment and construction, rather enterprise zones cannot be a substitute for big job creators, especially for cities and for than job creation and training, the British other programs, and that instead they approach runs completely contrary to our disadvantaged workers, are small businesses. should be seen as an additional urban policy Yet even as they are creating virtually 100% bill. tool. By encouraging state and local govern­ Because American enterprise zone sup­ of the net new jobs in America's older cities, porters view cities-and indeed towns and ments to use some of their resources (in­ these small businesses are notoriously diffi­ rural areas as well-as far more than just cluding federal resources) in the very poor­ cult to help with direct government assist­ places with an arbitrary collection of est communities, enterprise zones should ance. people, we have included strong protections help community groups in these areas gain Most entrepreneurs are hard to identify, for community involvement in the legisla­ new commitments for help. I know that and many avoid direct government assist­ tion. "Involvement in the program by many of these groups have felt in recent ance because they fear encouraging inter­ private entities, organizations, neighbor­ years that their areas were overlooked as ference as well. What's more, almost 4 out · hood associations, and community groups, city governments sought more politically re­ of 5 small businesses fail in their first year. particularly those within the nominated warding downtown development projects. Even if government officials were willing to area" is listed as a central element in an en­ Enterprise zones could help redress the bal­ forego largescale, immediately rewarding terprise zone "contract." In addition, prefer­ ance. projects for risky small ventures, how would ence in selecting zones will be given not only Enterprise zones also bring opportunity they justify even a statistically successful to those zones with the greatest community for community groups to work directly with failure rate, like 50%? The government can't involvement, but also to those where there private enterprise for their mutual gain. To take those kind of risks with the taxpayer's is a "strong likelihood that zone residents consider just one possible scenario, the En­ money. Only the individual taxpayer can. . . . will receive jobs in the zone." terprise Zone Tax Act provides an unprece­ Finally, I think we need to recognize that We can't just impose urban programs dentedly large tax credit for hiring disad­ while up-front incentives are important, from Washington, without any regard to vantaged workers-50% of wages without a they aren't all that is important. Only the the wishes and needs of people living in cap for 3 years, followed by 40%, 30%, 20%, most optimistic-and unrealistic-entrepre­ urban communities. The tragic aftermath of and 10% in the subsequent four years. A neur is looking for immediate profits. Most many urban renewal projects attests to the business hiring a qualified worker at $10,000 new small businesses don't make money for disaster this can bring. a year and employing him or her for seven their first five years, when they beat the But ignoring community concerns is not years would reap a $25,000 tax benefit-and odds and survive at all. Entrepreneurs must only cruel; it is stupid as well. In recent that's leaving out the likely increase in pro­ by nature and circumstance be seeking a years, even as inner city communities were ductivity and salary as the worker gains ex­ long-run balance between initial risks and being written off as hopeless, small self-help perience. The business, then, has a substan­ ultimate rewards. The risks are higher in groups sprung up to rehabilitate homes, tial financial interest in hiring qualified enterprise zones . . . but then, so are the plant gardens, train youth, and inspire new workers; but it has to identify those workers after-tax rewards. The reduction in taxes on hope in their neighborhoods. In Philadel­ and find those who are or can be trained to investment and employment, and the elimi­ phia one neighborhood family concerned do the job. nation of capital gains taxes, will also come about their child's future took on a sup­ My friend Rev. Leon Sullivan, head of Op­ into the calculus when an individual is de­ posedly insoluble youth gang problem and portunities Industrialization Centers, Inc. ciding whether or not to risk his or her sav­ started to solve it-with the help of the has told me that his and other community­ ings on a venture in an enterprise zone. gangs themselves. All across the country based groups would have a chance to step in What I conclude from these venture cap­ neighborhood "crime watch" progams have here. They can find and train disadvantaged ital "facts of life" is that any new enterprise made streets safer and brought communities workers, a job they've been accomplishing zone venture capital proposal should seek to together. for many years. And if this can be done at a attract private investors to put money into My own community of Buffalo has wit­ fraction of the tax benefit, then both the enterprise zones. This taps the greatest po­ nessed impressive successes by individuals community group and the private sector tential source of capital for the inner cities. and groups who have been unwilling to con­ business will benefit. It avoids the problem of government trying cede defeat for our city. The Linwood­ Yes, comes the next question, but where to select likely winners and losers. And it Oxford Association has rehabilitated homes will the private business get the capital to allows the market ultimately to award win­ and combated juvenile crime. My good start up an enterprise zone business? ners and losers without putting all taxpay­ friend Donald Lee's Planning Assistance I recognize that the availability of venture ers at risk. Consultants, Inc., has helped minority and capital has become the greatest concern of There are a number of suggestions about neighborhood entrepreneurs start up and those analyzing enterprise zones-friends as how this could best be accomplished. The expand. The Urban League under Leroy well as critics. I have come to agree that en­ original Kemp-Garcia legislation contained Cole's leadership has provided job training, terprise zone legislation needs an additional refundable credits, and exempted interest while the NAACP under Dan Acker has "venture capital" provision. Before discuss­ income on loans to enterprise zone firms fought hard against discrimination and for ing just what such a provision could be, from taxation. Another promising proposal, economic justice and opportunity. One however, I would like to review some basic which I understand will be discussed at reason I believe enterprise zones will work facts about venture capital. some length before the committee tomor­ well in Western New York is that I know Recent studies of venture capital in cities row, is "equity expensing." how much ability, energy, and commitment the cost of purchasing enterprise zone Our colleague Bill Gray, of Philadelphia, Federal business assistance programs ac­ stock or debentures. By offering an immedi­ has made another important point about count for at most 3% of new business cap- ate tax advantage it would help attract up- July 16, 1982 EXTENSIONS OF REMARKS 16703 front capital, and significantly improve its 2. How would it work? 6. What about people who purchase enter­ rate of return. In simple terms, any individual who pur­ prise stock and debentures from the original I have had the opportunity to discuss this chased enterprise stock or debentures (a investor? Would they also be entitled to the idea with several groups and individuals, in­ long-term unsecured loan) would be entitled deduction? cluding our colleague Charlie Rangel, a to a Federal tax deduction equalling the No. Only the original purchaser of enter­ leading member of the Ways and Means amount of the investment. For example, a prise stock or debentures will be entitled to Committee, and Malcolm Corrin, President person who put $10,000 into a qualified zone the deduction. Once the investment is sold and Chief Executive Officer of the Interra­ company would be able to claim a $10,000 to a second owner, it would lose its special cial Council for Business Opportunity. deduction on his or her Federal tax return tax status. While there are still important questions re­ for that year. If the taxpayer were in the 7. What about firms which are already in maining about how such a provision would 50% bracket, the deduction would reduce business and need money to expand? be designed, certain advantages have taxes owed for that year by 50% of the Any firm meeting the definition of "quali­ become apparent: $10,000, or $5,000. The deduction essentially fied zone small business" would be entitled 1. It dramatically improves the rate of allows the investor to get up to half of his return on venture capital, thus providing an to issue enterprise stock and debentures. or her investment back almost immediately 8. Will corporations be able to get the de­ incentive for risk-taking investment in en­ in the form of tax savings. This should be a terprise zones. For an investment held five duction by investing in subsidiaries or other strong incentive to invest in zone firms. firms located in enterprise zones? years, and then sold at a gain, the expensing 3. Won't this proposal encourage people to proposal increases the discounted rate of No. The incentive is available to individ­ make investments with no real economic uals only. return by over 70%. value just to get a tax break? 2. It provides an important capital source Not really. Again, the proposed tax incen­ 9. Given the high failure rate of new and for small firms. By limiting eligible stock tive would only give the taxpayer up to one small firms, won't this proposal simply and debentures to those of smaller firms, half of the money invested back in the form make it easy for people to lose money? this proposal could target benefits to the of Federal tax savings. Most of the return of Some investors will undoubtedly lose businesses which create the most jobs, yet and on the investor's capital would have to money. However, the incentive is aimed have the least access to traditional sources come from principal and interest paymentc;, principally at people in high tax brackets of capital. dividends or from the subsequent sale of the who can afford the risk. In addition, our 3. It would offer community development investment. In other words, the investment proposal would permit the formation of pro­ corporations, MESBICs, and other commu­ will only pay off if the firm succeeds. fessionally managed investment partner­ nity-based organizations a tool with which 4. Would there be any restrictions on the ships to assess and make risky investments to seek private capital. With the "expens­ types of firms which could issue enterprise on behalf of individual investors. For exam­ ing" incentive these groups could bring to­ stock and debentures? ple, MESBICs and SBICs might form sub­ gether potential enterprise zone entrepre­ Small firms-defined as those with a net sidiaries to develop and manage such invest­ neurs, especially minority entrepreneurs, worth of $5 million or less-which obtain at ment pools. with investors seeking a greater rate of least 50% of their income from other than 10. Won't this provision cost the Treasury return on their capital. passive sources