15778 CONGRESSIONAL RECORD-SENATE July 11, 1994 SENATE-Monday, July 11, 1994

The Senate met at 1 p.m., and was the Senator from Georgia is recognized and are living in temporary shelters. called to order by the President pro for not to exceed 10 minutes. One out of four Georgians has been af­ tempore [Mr. BYRD]. .fected by the flood itself. I have just The PRESIDENT pro tempore. The had a report come to me that in Al­ Senate will be led in prayer by the Sen­ THE FLOODS IN GEORGIA bany, which is one of the many affected ate Chaplain, the Reverend Dr. Richard Mr. COVERDELL. Mr. President, I cities, 23 square miles are now under C. Halverson. have just returned from my flood-rav­ water, 22,800 people have been directly Dr. Halverson. aged State. I suspect that anybody who impacted and 8,500 homes are in· flood has ever witnessed such a national dis­ waters. PRAYER aster of these proportions cannot but As you travel and look down across The Chaplain, the Reverend Richard be terribly affected in grieving for the these bleak rooftops, I think everybody C. Halverson, D.D., offered the follow­ ache being experienced and felt by so can empathize to think of all the per­ ing prayer: many of our fellow citizens. sonal letters, the home effects that are Let us pray: In particular, I know everybody in cherished and gathered over the years our country joins me in offering sym­ * * * the powers that be are ordained of of a family's life. To see it all washed God.-Romans 13:1. pathy to those families who have lost away just deepens the ache that we Living Father, revive the Senate. In­ loved ones and those that will lose know these people are experiencing. members of their family in these tragic I am convinced from my review of fuse it with new life. Dissolve the frus­ circumstances we are confronted with the area that we are going to be con­ tration, the disappointment, the dis­ in our region of the State. fronted with-! know this is of particu­ enchantment. I would like to take just a moment to lar interest to the President pro tem­ Ignite the fire that burned in the thank my colleagues, in particular, pore--a need for supplemental appro­ Senators' hearts when first they con­ from South Carolina and Florida and priations. I think that is almost indis­ vinced the people to send them here. the midwestern Senators who have putable as we look at the growing Restore the faith, the sense of purpose, called to express their concern and value of the losses. The number I have the enthusiasm, the dream, the vision. worry about the citizens of my State heard offered as a preliminary number Mighty God, from whom comes all and region. I want to thank the Presi­ is in the range of $200 million. I person­ authority, the world waits for the Sen­ dent for being so prompt in declaring a ally think it will be double that. Of ate to be the powerful, intelligent, de­ national disaster and emergency in course our sympathy goes out to the liberative, legislative leaders so des­ Georgia. States in the West that are experienc­ perately needed today in the Nation I also want to take just a moment to ing another kind of disaster with the and the world. Let it be true, dear thank the many heroes and heroines fires ravaging in Colorado and Califor­ Lord. Let it be true. that none of us will ever know-the nia. I am convinced the national disas­ In Jesus' name. Amen. person that reached out and grabbed ter list of 31 counties in our State will one person about to be lost in the ma­ grow by at least another 5 to 10 coun­ RESERVATION OF LEADER TIME rauding waters; the individuals, name­ ties before we are through with the as­ less, that showed up to fill sandbags to sessment. The PRESIDENT pro tempore. Under protect a critical water plant, a key fa­ As difficult as the last few days have the previous order, the leadership time cility in one of the many jurisdictions been-and they have been exceedingly is reserved. that have been so ravaged by these difficult-unfortunately we have to floods; and, as most would appreciate, look at local officials or involved citi­ MORNING BUSINESS that unique American quality, that zens and say to them this is just the neighbor-to-neighbor value of our beginning. Not many have thought The PRESIDENT pro tempore. Also countrymen that causes them to ap­ about what happens to those in the under the previous order, there will pear from nowhere to help another shelters when the water goes down, now be a period for the transaction of neighbor in trouble. when you go to the home that is routine morning business not to extend It is happening throughout our re­ pushed off its foundation, the soybean beyond the hour of 2 o'clock p.m., with gion-thousands upon thousands of crop that has been under water for 5 Senators permitted to speak therein people that have stepped forward with days, mud-filled homes, businesses for not to exceed 5 minutes each. no call, no call to arms, on their own, closed, cash registers that have been No Senator seeks recognition. there at the water's edge, trying to shut down for weeks, the loss of the The Chair, in his capacity as a Sen­ help those that have been so severely water system, the loss of the sewer sys­ ator from the State of West Virginia, harmed by this disaster. tem, an inability to provide the basic notes the absence of a quorum. I think it worthy of noting the scope necessities of human life. The build­ The clerk will call the roll. of the damage. Georgia is the largest back is going to be a long and arduous The assistant legislative clerk pro­ State east of the Mississippi and nearly one. It is going to require the patience ceeded to call the roll. one-third of her land mass has been di­ of those directly involved. Mr. COVERDELL. Mr. President, I rectly affected by these floods. It is But more important, it is going to ask unanimous consent that the order just hard to imagine 2 feet of water call for unprecedented coordination for the quorum call be rescinded. dropping from the skies in a 24-hour pe­ among Federal officials. Again, I want The PRESIDENT pro tempore. With­ riod. We have at latest count around to compliment the Director of the Fed­ out objection, it is so ordered. 2,000 roads that have been severed by eral Emergency Management Agency The Senator is recognized for not to the flood; 100 Federal highways; Inter­ and all Federal agencies and the execu­ exceed 5 minutes. states I-75 and I-16, vital links north tive branch for their attention to this Mr. COVERDELL. Mr. President, I and south for our entire Nation, have disaster. They have worked well with ask unanimous consent to speak for 10 been ravaged and severed by the force our Governor's office and local offi­ minutes. of these unpredicted waters. cials. But now comes the long period I The PRESIDENT pro tempore. Is Currently, somewhere between 40,000 have alluded to. We will have many sis­ there objection? Hearing no objection, and 50,000 people have been evacuated ter counties and sister States that will

e This "bullet" symbol identifies statements or insertions which are not spoken by a Member of the Senate on the floor. July 11, 1994 CONGRESSIONAL RECORD-SENATE 15779 offer support: Clothing, personal ef­ of a health care policy assisted by tax panied by insurance market reform, fects, housing, trucks, earth-moving credits and/or deductions. In fact, an such as most plans now before us in­ equipment. But that is going to require individual requirement lies at the clude, is what is referred to as adverse enormous coordination. I have dedi­ heart of the Clinton health reform risk selection. Most proposals before cated my office and all our energies to package. Every individual would have Congress would eliminate the ability of working with Federal and State offi­ to have health care coverage for which health care insurers or other providers cials to be a participant in facilitating the individual would be responsible for to refuse to cover preexisting illnesses coordination, making sure the will of at least a portion, or the individual, if and to discriminate against those who the country-which is so enormous and not employed, would have to purchase are sick. If a person could wait until he so encouraging-is not lost, as it tries the health care policy themselves. was very sick to purchase insurance on to move to be of assistance to these The so-called employer mandate his way to the hospital, then the cost citizens. alone in the Clinton plan does not of insurance could be driven further Already we can see the signs of achieve universal coverage without the out of reach of many citizens who strain-strain because we are dealing requirement that the individual par­ would be faced with the high premiums with public officials who have not slept ticipate and, if self-employed, buy that for health insurance policies purchased in 72 hours. We are dealing with a rush coverage for himself or herself and the only by sick people. of offers of good will and support which family. This adverse risk selection can be can overrun the capacity of those with The employer mandate is simply a dealt with by limiting the coverage of the best intentions, trying to deal with thinly disguised way of hiding health preexisting conditions to allow insur­ this major disaster. care costs by imposing what amounts ance companies to impose a waiting pe­ So I call on the President, call on the to a payroll tax on employees, and riod to cover preexisting illnesses for Federal agencies: Agriculture, ffiS, that, in my view, would significantly people who have chosen not to pur­ HUD, the Small Business Administra­ curtail job creation and cost millions chase insurance. Under that provision, tion-to make every effort to be pre­ of jobs. there would be less an incentive to pared for the long haul, this long build­ As I have traveled around my State delay the purchase of insurance until out period. And I call on local officials of Missouri in recent weeks, I have illness strikes. and all of our Federal delegation to do heard more and more people telling me A third frequently cited problem the same. We should be as one because that while they want to fix what is with a lack of universal coverage is the this problem is so severe, affecting so wrong with health care, they also do phenomenon of cost shifting. When a many lives and futures. This is the not want to be told by Government hospital, a physician or other health time. for the ultimate form of neighbor­ that they have to purchase a certain care provider provides basic care to package of health care insurance. In ef­ people who cannot or will not pay, to-neighbor work in coordination. fect, they are saying that we do not In closing, Mr. President, let me sim­ want to cross that street, as the lady these costs have to be shifted onto the ply again thank all of my colleagues told the Scoutmaster. bills of the middle-class patients and who have expressed sympathy, all the There are three basic reasons why others who pay their bills personally or local officials, and again the unsung universal health care coverage, or sig­ through health insurance. heroes and heroines who have done so nificantly increased health care cov­ Some estimates indicate that as high much to reduce what would have been erage, is very desirable. as 30 percent of health insurance pre­ far, far worse without this neighborly First, much human suffering could be miums or other health care charges on support. alleviated, lost time avoided and paying customers are imposed to pay I yield the floor. health care costs reduced if everyone for the uncompensated care given to Mr. President, I suggest the absence received regular, primary, and preven­ those who have inadequate coverage or of a quorum. tive health care. When people do not no coverage at all. The PRESIDENT pro tempore. The have health care, they too often wait One of the greatest villains in this question of a quorum having been until late stages of an illness to seek piece is the Federal Government. noted, the clerk will call the roll. health care, often in an expensive Under pressure from Congress to save The assistant legislative clerk pro­ emergency room and have to have on health care costs, arbitrary price ceeded to call the roll. much more costly treatments which controls have been placed on the Mr. BOND. Mr. President, I ask unan­ may or may not be effective. amount reimbursed for patients under imous consent that the order for the Much of that problem can be solved Medicare and Medicaid. We do that quorum call be rescinded. by eliminating the tax inequities which when we ratchet down the payments The PRESIDENT pro tempore. With­ discourage and penalize farmers, ranch­ made for Medicare and Medicaid pa­ out objection, it is so ordered. ers, other self-employed people and em­ tients. The Senator from Missouri [Mr. ployees who do not receive health care As a result of the underpayment by BOND], is recognized for not to exceed 5 coverage at work from obtaining their the Federal Government, ratcheting minutes. own coverage. down the reimbursement for Medicare In addition, under the Chafee health and Medicaid, which amounts to about plan, the HEART proposal which I $15 billion a year in cost shifting and HEALTH CARE REFORM helped draft, and most of the other the uncompensated care that must be Mr. BOND. Mr. President, a Boy plans, low-income individuals would be provided by the health care system, Scout leader approached an elderly provided with subsidies to enable them charges for private patients are about lady who had just been helped across to purchase health care coverage. 130 percent of their costs in most areas the street by one of his Scouts, so the A recent study by Lewin-VHI sug­ of the country. story goes. When the Scout leader in­ gested that a system of tax equality It seems to me that if the Federal quired if the Scout had rendered good and low-income assistance could Government makes fully deductible and courteous service, the lady replied: achieve coverage for significantly over the cost of a reasonable health insur­ "He was very nice, but I did not want 90 percent of Americans even without a ance policy, provides a 100-percent sub­ to cross the street." mandate. For those initially who do sidy for health care premiums for those In the battle over health care reform, not choose to receive health care, edu­ at the poverty level and below, and de­ I have been an advocate of achieving cation, effective public advocacy and clining subsidies with those just above universal coverage by requiring every economic incentives can significantly the poverty level, the health care con­ citizen to take responsibility for their raise the level of coverage under a vol­ sumers and providers would be in a bet­ health care coverage, either obtained untary system. ter position to protect themselves at work, through a Government pro­ The second problem with a lack of against uncompensated care. If an im­ gram, or by the individual's purchase universal coverage when it is accom- poverished patient seeks health care 79--059 0-97 Vol. 140 (Pt. 11) 27 15780 CONGRESSIONAL RECORD-SENATE July 11, 1994 and has no coverage, then the health Senator ToM HARKIN, would require leadership and his devotion to family care provider could require that he or AFDC recipients to sign family respon­ are commendable. His accomplish­ she apply for the subsidies available to sibility agreements obligating them to ments will continue to benefit the participate in a health care . program. obtain health care including immuni­ community and all those who knew For those who have ample resources zations for their children. Failure to him. but have not chosen to purchase health sign the agreement or to comply with My thoughts will be with him and his care, the health care provider could in­ its provisions would lead to a reduction family as well. sist prior to providing such care, other and ultimately termination of AFDC Mr. President, I am submitting a me­ than an emergency setting, that the payments. morial to Jim. I ask unanimous con­ patient must make arrangements to In my view, we can correct many of sent it be printed in the RECORD. pay for the health care charges. Under the things that are wrong in health There being no objection, the memo­ a system with full tax deductibility care without damaging the health care rial was ordered to be printed in the plus subsidies, the likelihood of uncom­ system, as I believe the Clinton plan or RECORD, as follows: pensated care and its amount should be the plan reported out of the Senate JIM THRASH (1949-1994) substantially reduced. Labor Committee would do. I believe Idaho Outfitters and Guides Association Apparently my colleagues in this that a significant majority in this body (IOGA) President Jim Thrash was one of at can be mustered for a health care pro­ least a dozen firefighters killed while fight­ body and in the House are hearing ing fire near Glenwood Springs, Colorado on similar complaints from constituents posal that does take the necessary steps of reforming the insurance mar­ Wednesday, July 6. Apparently, Jim was who do not want to be faced with a caught when flames, fanned by a sudden shift Government directive saying that they ket, providing for fair tax treatment, in winds, jumped the fire line that was being must purchase health care. That is why offering subsidies for low-income peo­ established. The fire was moving at a rate the Senate Finance Committee has ple, setting standards for electronic fil­ that did not allow some of the firefighters come forward with a bipartisan com­ ing, processing of health care claims to time to deploy their fire shelters. Details on promise that provides for Federal as­ reduce administrative costs, lessening the tragedy are still being pieced together. the cost of malpractice litigation, and Jim has been a Forest Service smoke sistance but no requirement that peo­ jumper based out of McCall, Idaho for the ple purchase health care policies. It reducing defensive medicine. If we are willing to recognize the re­ past 14 summers with 213 career jumps. In seems to me that there are not the 1985, Jim and Holly purchased and began a votes to impose individual mandates in alities of health care and listen to the hunting business on the Payette National this body, as I have talked with col­ people we represent, I am convinced Forest. Their business later expanded to in­ leagues. and I have listened to their Congress can pass health care reform clude a whitetail deer clientele on the Nez comments on the floor. that will remedy the flaws in the cur­ Perce National Forest. Jim was also one of Another way, of course, to provide rent system. This can be done without Idaho's most respected bighorn sheep outfit­ destroying the benefits we receive from ters. universal coverage is to have the Gov­ Jim wasted no time in becoming involved ernment provide health care for every­ having a high-quality health care sys­ tem that is run by the private sector. in IOGA (1983) and quickly established him­ body. I do not believe that there is any­ I look forward to working with my self as a good listener and reasoned voice. where near a majority for that, and colleagues in this body and, we hope, Beginning in 1988, Jim served two terms as a even that Government-provided health Board of Director, was elected Vice Presi­ ultimately in the House, to achieve a dent in 1992 and became President in 1993. care does not ensure that it will be uti­ workable compromise that achieves lized by those who need it. Jim personified volunteerism and leader­ what is needed in health care and does ship within the Association and believed We have seen the shocking statistics not fix that which is not broken. strongly in the diversity of IOGA. He worked of the large number of children under 2 I thank the Chair. behind the scenes to encourage the member­ in this country who have not had their ship to serve on a committee, seek an elect­ recommended immunizations. In my ed position or pursue a nomination to the Li­ State in our two largest cities, only 50 TRAGEDY IN COLORADO censing Board. He was consistently proactive percent and 30 percent of infants have Mr. CRAIG. Mr. President, I am ter­ and a savvy negotiator regarding issues and been fully immunized. Thus, 50 percent ribly saddened by the wildfire tragedy concerns at the state and national levels. and 70 percent of infants have not been Jim was a champion of IOGA's Code of Eth­ near Glenwood Springs, CO, which took ics. He was a thoughtful and articulate lead­ fully immunized, even though vaccines the lives of 14 firefighters last week. er for the industry at the Legislature, in are widely available through Medicaid My deepest sympathies go out to the Fish and Game matters, and in his role as and public health departments for par­ families and friends of all who were chairman of the Wilderness Committee, Jim ents who could not afford to buy them. lost. also was IOGA's chief spokesman in the on­ The failure to obtain immunizations Two of these, Jim Thrash and Roger going effort to monitor and work with the strongly indicates that these infants Roth, were experienced smokejumpers Idaho Outfitters and Guides Licensing Board. are also not receiving the vitally im­ who were dispatched to the fire from Active with national wildlife conservation portant well-baby preventive care that our smokejumper base at McCall, ID. organizations, he was recently chosen by his peers to be the chairman of the Foundation should be among the highest priority Jim had jumped out of McCall for 15 for North American Wild Sheep outfitter ad­ preventive programs that we have. seasons, and Roger for 3. Both were visory board. A pediatrician who practices in rural highly regarded for their knowledge Like all outfitters and guides, he was at Missouri tells me that his office must and skill as firefighters. Coworkers at home in the backcountry. He practiced what triple book Medicaid patients. That is, the McCall Smokejumper Base and the he preached when it came to responsible, book three Medicaid patients for chil­ community at large mourn their loss. shared use of·our public lands and waters. He dren at each given hour because rough­ This tragedy strikes me personally, knew, understood and respected the role of ly two out of the three Medicaid-recipi­ as I knew Jim Thrash in his capacity fire in the ecosystem. Needless to say, his leadership will be sorely missed. ent parents who make appointments do as president of the Idaho Outfitters and Jim was a very devoted husband and fa­ not show up. Guides Association. Jim and his wife ther. Like many outfitter spouses, Holly Senator DALE BUMPERS of Arkansas Holly established their own hunting · shared the day-to-day duties of running introduced an amendment to cut wel­ guide business in 1983, and they have Salmon Meadows Lodge-Warren Outfitters fare payments-AFDC-to parents who been active in the organization and providing quality service. Jim leaves fail to immunize their children. Al­ through the years. I have met with two children a ten year old daughter, Ginny, though the amendment was over­ both Jim and Holly on issues related to and seven year old son, Nathan. Jim's par­ ents were visiting the family at their home whelmingly adopted in this body, it the management of natural resources near New Meadows at the time of the trag­ never made it out of the House-Senate in Idaho. Their advice has been very edy. Jim is also survived by a sister, Loretta conference. helpful to me. Beecher. A bipartisan welfare reform measure, Jim's 14-year commitment to his Decisions on IOGA tributes, memorials and S. 2009, which I have introduced with Forest Service career, his professional remembrances are pending. Holly asks that July 11, 1994 CONGRESSIONAL RECORD-SENATE 15781 Jim's many friends and acquaintances in the two centuries, it has educated young visitors when they came to the campus, said outfitting world contact the IOGA office (2081 men and women from not only South Daniel W. Hollis, professor emeritus at the 342-1438) for additional information. Carolina, but from throughout the university and Dial's son-in-law. He recalls being awestruck as a freshman United States and the world. in 1938. LEGITIMIZING KIM IL-SONG The heart of the university is an area "She was a very strikingly handsome lady, known as the Horseshoe. This is the dressed beautifully. She radiated style and Mr. DOLE. Mr. President, last Satur­ site of the original campus and it con­ class, particularly for us bushers from the day upon hearing of the death of North tains a number of historic buildings boondocks," Hollis said. "She was very popu­ Korea's President Kim ll-song, Presi­ that serve as dormitories, a library, lar with the students. We were all charmed dent Clinton offered condolences to the and a museum. Also among these build­ by her.'' North Koreans on behalf of the Amer­ ings is the beautifully restored presi­ Dial, an outgoing woman, decorated the ican people. By personally offering dent's house, where distinguished visi­ president's home and added the president's friendly condolences on behalf of the tors to the university, including Amer­ rose garden to the grounds. Many of the American people and failing to men­ functions held at the president's house today ican Presidents and the Pope, have were started by Dial, Hollis said. tion the criminal history of Kim Il­ been entertained. " She was the first president's wife to open song's dictatorship, President Clinton The woman most credited with ren­ up the house and make it the center of enter­ helped to lend legitimacy to the North ovating the president's house is Caro­ taining and welcomed students and alumni Korean regime. line McKissick Belser Dial, who resided in," Hollis said. " She just opened up a new Let us not forget, Kim Il-song was in those quarters with her then hus­ dimension of the president's house." not just the leader of another country. band, President J. Rion McKissick, Dial served the university and the public He was the dictator of one of the most from 1936-44. Since her days as the first diligently, Terry and Hollis said. evil and represdve regimes of this cen­ In addition to making an untold number of lady of the university, Mrs. Dial has al­ visits to the university to attend meetings tury-a regime opposed to every value ways been known to South Carolinians and other functions, Dial also made frequent and principle our great Nation stands for her devotion to Carolina, and she stops at the South Caroliniana and Thomas for; a regime hostile to any notion of has been one of the university's strong­ Cooper libraries to view her extensive game­ human rights; a regime that has est supporters over the years. I am sad­ cock collections. threatened our friends, the South Kore­ dened to report that this fine and gra­ She collected everything from ceramics to ans, and our interests in the region for cious woman passed away last week at photos, " literally anything with the picture decades. the age of 93, and while Mrs. Dial will of a gamecock," Terry said. " She had prob­ Historically Kim Il-song is in the ably more gamecocks, more different type be greatly missed by all those who gamecocks, than any person on the face of same league as Joseph Stalin-".aving knew her, she will never be forgotten. the earth." enslaved the North Koreans in his own Her contributions to the University of The hood ornament of her car was a game­ brutal brand of communism. And, even South Carolina have forever strength­ cock. though Joseph Stalin was the dictator ened that institution and have bene­ Dial served on many boards at the univer­ of 9, country we recognized and were al­ fited my State. sity, Terry said. She also was a leader in lied with during the Second World War, Mr. President, I would like to take civic affairs around the state. the Eisenhower administration only this opportunity to extend my deepest Dial was chairwoman emeritus of the sent perfunctory condolences from the condolences to the family and friends Board of Visitors at her death. It was a posi­ tion she held for decades. She was the last State Department when he died. of Mrs. Dial; and, to request unanimous living member of the founders of the South Finally, let us not forget that the consent that a copy of an article about Caroliniana Society. She funded a chair in sufferings of the American people dur­ Mrs. Dial that appeared in a recent the USC history department. ing the Korean war: 54,000 Americans issue of the State newapaper be in­ In 1947, she organized Palmetto Girl's lost their lives-54,000 families lost cluded in the RECORD following my re­ State in South Carolina on USC's campus, their loved ones. Over 100,000 Ameri­ marks. which introduces high school seniors to pub­ cans were wounded and over 5,000 are FORMER USC FIRST LADY, LONGTIME lic office. missing. SUPPORTER DIES She was honored as a Distinguished USC So, it seems to me that we need to (By Warren Bolton) Alumnus and awarded an honorary doctor of laws degree from USC. In 1984, the McKissick keep things in perspective. Yes, we Caroline McKissick Belser Dial was a Uni­ Library was rededicated as the McKissick want to see the North Korean nuclear versity of South Carolina Gamecock-one of Museum in her honor to include her with J. crisis resolved. However, that does not the most graceful and supportive ever-until Rion McKissick in recognition of her con­ mean that we should be insensitive to her death Wednesday at age 93, those who tributions to the school. knew her say. the generation of Americans who suf­ Dial is credited with transforming the Uni­ Dial, of 15 Heathwood Circle, graduated fered as a result of the Korean war, in versity of South Carolina's president's house from Winthrop College in 1921 and taught at particular our Korean war veterans and into a showplace for entertaining dignitaries several schools in North Carolina and South and other visitors while she was the wife of Carolina. their families. Nor should we ignore Surviving are stepsons, George Louis Dial the threat posed to present and future the late J . Rion McKissick. McKissick served Jr., and Irvine F. Belser Jr.; stepdaughters, generations by North Korea's nuclear as USC president from 1936 until his death in May Belser Douglass, Anne Belser Boas, program. 1944. Even after McKissick's death, Dial, known Catherine Belser Barnhardt, Harriet Belser The bottom line is that Kim Il-song as " Miss Caroline," continued to show her Deas, Peggy Belser Hollis and Mildred Belser was a brutal dictator of a government ardent love and support for the university Reid; nieces and nephews. that is neither a friend, nor an ally of and was considered one of its most gracious the United States-a government benefactor.:'. whose policies and actions have threat­ " She was somebody who was literally in­ TRIBUTE TO JAMES L. ISENOGLE ened and continue to threaten U.S. se­ volved with the university all of her life up Mr. JOHNSTON. Mr. President, on curity and interests. until the time of her passing," USC Vice July 2, 1994, this country lost one of its Provost George Terry said. "She was a con­ stant benefactor and supporter of the insti­ best public servants and a great man. tution." From 1957 until his retirement in 1987 TRIBUTE TO CAROLINE McKISSICK Born in Sumter on July 15, 1900, Dial was James L. Isenogle served the United BELSER DIAL the daughter of late George William and States as an officer of the National Mr. THURMOND. Mr. President, es­ Caroline Hutchison Dick. After McKissick's Park Service. His legacy, however, will tablished in 1801 and located in the cen­ death, she married Irvine Belser. In 1976, she continue to serve the Park Service, married George Louis Dial. ter of my State's capital city, ·the Uni­ A memorial service will be held at 3 p.m. Louisiana, and this Nation for many versity of South Carolina is one of the Sunday at Rutledge Chapel at USC. years to come. Southeast's oldest and most prominent As the wife of USC's president, Dial had a Jim Isenogle was the first super­ educational institutions. For almost flair and polish that impressed students and intendent of the Jean Lafitte National 15782 CONGRESSIONAL RECORD-SENATE July 11, 1994 Historical Park and Preserve in Louisi­ James Isenogle has left us a great [From the Wall Street Journal, July 11, 1994] ana. It was in large part thanks to Jim legacy and a great challenge. He cre­ THE BLACK CRIME GAP that so many historically and bio­ ated the vision for the Jean Lafitte Na­ (By John J. Dilulio, Jr.) logically rich areas of Louisiana are tional Historical Park and Preserve; it The poverty gap between blacks and whites being preserved and maintained for fu­ is up to us to see that we implement may be shrinking, but the crime gap is grow­ ture generations. The Lafitte Park and continue to develop it to keep this ing. No group of Americans is more dev­ complex includes not only the vision alive. He will be truly missed. astated by crime than black inner-city citi­ Barataria wetlands south of New Orle­ zens and their children. No wonder black ans, but also the Chalmette battlefield urban residents overwhelmingly cite crime and a string of institutions celebrating IS CONGRESS IRRESPONSIBLE? as the single biggest problem in their neigh­ the cultures of the Acadians, Italians, YOU BE THE JUDGE OF THAT borhoods. In 1992, the violent-crime victimization Germans, Spanish, and native Ameri­ Mr. HELMS. Mr. President, anyone rate for blacks was the highest ever re­ cans who settled in south Louisiana even remotely familiar with the U.S. corded. Some 113 out of 1,000 black teenage and added diversity to what can be Constitution knows that no President males were victims of violent crimes. This called the Louisiana Culture Gumbo. can spend a dime of Federal tax money compared with 95 for black teenage females. We were very fortunate to have had that has not first been authorized and 90 for white teenage males and 55 for white Jim Isenogle's talent, vision, patience, appropriated by Congress-both the teenage females. The rate was 80 for young and commitment for a time. It was be­ House of Representatives and the U.S. (age 20-34) black men, compared with 52 for cause of Jim's extraordinary capability Senate. young white men. And the rate was 35 for that the Jean Lafitte Park truly is as adult (age 3fHi4) black males vs. 18 for adult So when you hear a politician or an white males. The chances that a black male the New York Times once described it editor or a commentator declare that teenager would be victimized by violent "America's most unique park." "Reagan ran up the Federal debt" or crime were 6.2 times that of a white adult He cared deeply about the land, but that "Bush ran it up," bear in mind male, 7.5 times that of a white adult female, he also cared deeply about people. Jim that it was, and is, the constitutional 18.8 times that of an elderly white male and worked hard to give them dignity and duty and responsibility of Congress to 37.6 times that of an elderly white female. recognition and to include everyone in control Federal spending. Congress has Black residents of cities are most at risk. the park, which he firmly believed was failed miserably in that task for about From 1987 to 1989, the average rate of vio­ truly for the people. lent-crime victimization among city resi­ In beginning to establish the Jean 50 years. dents was 92% higher than among rural resi­ Lafitte Park, many would have con­ The fiscal irresponsibility of Con­ dents, and 56% higher than among suburban centrated on natural resource protec­ gress has created a Federal debt which residents. In 1992 the rate at which black tion alone; that would have been a leg­ stood at $4,618,832,031,822.90 as of the males in central cities experienced violent close of business Friday, July 8. Aver­ crimes was 2.5 times the rate at which non­ acy by itself. But from the beginning, metropolitan white males experienced them. Jim aggressively led the effort to im­ aged out, every man, woman, and child in America owes a share of this mas­ Even within central-city populations, the plement immediately the mandate in rate at which black males experienced vio­ the legislation to include cultural in­ sive debt, and that per capita share is lent crimes was 53% higher than the rate for terpretation in the park. Through $17,716.29. white males (up from 31% higher in 1989). Jim's insight, the first cooperative CRIMINAL DATA agreement was signed to establish the THE BLACK CRIME GAP Now let's look at the data about those who Islenos Unit in St. Bernard Parish. Mr. DOLE. Mr. President, freedom commit crimes. This unit not only tells the story of, Statistics show that the vast majority of but also celebrates the many contribu­ from crime is the most important civil violent crime is intraracial. About 84% of tions of the too often forgotten Canary rights issue for the 1990's. violent crimes committed by blacks are com­ Islanders to Louisiana's cultural, eco­ In an article appearing in today's mitted against blacks, while 73% of violent nomic, and political development. Jim Wall Street Journal, Prof. John crimes committed by whites are committed Diiulio, Jr., points out that while the against whites. reached out to them, and found a way In 1991 black youths were arrested for to include them in the park and in the "poverty gap between blacks and whites may be shrinking, the crime gap weapons-law violations at a rate triple that history of the area. of white youths. In the same year, the vio­ Jim reached out to others as well. He is growing.'' According to Professor lent-crime arrest rate for black youths was began a Black History Month Program Diiulio, in 1992 the violent-crime vic­ five times higher than that of white youths in 1982-long before such programs timization rate for blacks was the (1 ,456 vs. 283 per 100,000) . From 1976 to 1991 , were expected-and established a con­ highest ever recorded. Blacks suffer the murder rate among white youths was tact point in Armstrong Park to begin disproportionately at the hands of pa­ stable at two to three per 100,000. Between rolees who have slipped through the re­ 1976 and 1986 the murder rate for black a dialog which has helped lay the foun­ youths fluctuated between around seven and dation for what we hope will be a new volving prison door-legally-only to commit more violence and destroy 10, then .rose steadily to about 14 in 1988, 18 park celebrating jazz in New Orleans. in 1990 and 20 in 1991. One of the first posters he commis­ more lives. The tragedy of thousands of black youths sioned was of George "Big Chief Jolly" No doubt about it, white racism still killed by black youths might be expected to Landry, head of the Wild Tchopi toulas persists in America. Our criminal jus­ concentrate hearts and minds on the ques­ Mardi Gras Indian Tribe, forging the tice system is not perfect. Unfortu­ tion of how to stop the violence. Instead, way for a farsighted and sensitive cul­ nately, justice is not always meted out this national tragedy has been trivialized by tural interpretation program. in a colorblind fashion, as it should be. those who spout errant nonsense about racial With Jim's help and leadership, the But whatever these shortcomings may disparities in the justice system. be, they pale · in importance when In fact, once one controls for such charac­ foundation was also laid for the devel­ teristics as the offender's criminal history or opment of the three Acadian cultural matched against the carnage inflicted whether an eyewitness to the crime was centers in Eunice, Lafayette, and on the black community by violent present, racial disparities melt away. To cite Thibodaux. In his life of full service he crime each year. Fighting crime is, and a typical example, a 1991 study of adult rob­ also made great contributions in Penn­ should be, our No. 1 civil rights prior­ bery and burglary defendants in 14 large sylvania, Utah, and Colorado, and he ity. urban jurisdictions found that a defendant's participated in studies for parks in­ Mr. President, I ask unanimous con­ race or ethnic group bore almost no relation cluding sites in Florida and Alaska. sent that the article by Professor to conviction rates or other key outcome measures. Jim was recognized for his great con­ Diiulio be reprinted in the RECORD im­ In 1980, 46.6% of state prisoners and 34.4% tributions by the Park Service with mediately after my remarks. of federal prisoners were black. As the prison two commendations and by the Depart­ There being no objection, the article population increased during the 1980s, the ment of the Interior with the Meritori­ was ordered to be printed in the percentage of blacks changed little. By 1990 ous Service Award. RECORD, as follows: 48.9% of state prisoners and 31.4% of federal July 11, 1994 CONGRESSIONAL RECORD-SENATE 15783 prisoners were black. Compared with white away liquor stores in areas where they serve Center, providing accounting manage­ prisoners of the same age, black prisoners as magnets of crime and disorder. ment, and marketing assistance to are more likely to have committed crimes of Second, redirect existing police personnel struggling small businesses. violence. In 1988 the median time served in to high-crime neighborhoods, add new police Presently, he is serving as the honor­ confinement by violent offenders was 24 manpower and target it on the same neigh­ ary chairman of the business advisory months for whites vs. 25 months for blacks. borhoods, and empower police to work with For crimes of violence, the mean sentence law-abiding residents and community lead­ group of the Providence Chamber of for whites was 110 months vs. 116 months for ers, aggressively check disorders (vagrancy, Commerce and vice president and di­ blacks, while the mean time in confinement graffiti, public drunkenness, aggressive pan­ rector of the North Central Chamber of differed by only four months (33 months for handling) that are associated with crime and Commerce in Rhode Island. whites vs. 37 months for blacks). citizens' fear of crime, and last but not least, Mr. President, David Lucier is an At the federal level, a 1993 study showed arrest the bad guys, charging them to the outstanding member of Rhode Island's that the imposition from 1986 to 1990 of stiff­ full extent of the law. business community. I ask my col­ er penalties for drug offenders, especially Third, follow through with truth-in-sen­ leagues to join me in congratulating crack cocaine traffickers, did not result in tencing and related measures, and start him on receiving the 1994 Rhode Island racially disparate sentences. The amount of keeping track of how many citizens from the drug sold, the offenders' prior criminal which neighborhoods are victimized or mur­ Small Business Accountant Advocate records, whether weapons were involved, and dered each year by the roughly 3.5 million Award. other characteristics that federal law and probationers and parolees. The federal gov­ sentencing guidelines establish as valid con­ ernment can tell us how many prisoners are TRIBUTE TO RUTH ANN MYERS siderations accounted for all the observed in various treatment programs. But it can­ variation in sentencing. not tell us how many poor black children Mr. DECONCINI. Mr. President, I rise In short, the best available evidence indi­ have been gunned down by plea-bargained to pay tribute to Ruth Anne Myers for cates that race is not a significant variable violent criminals. Existing data are limited, her 32 years of Federal service with the in determining whether a criminal is ar­ but we know that about one-quarter of those Immigration and Naturalization Serv­ rested, sentenced to probation or prison, or arrested for murder are on probation or pa­ ice [INS]. Ms. Myers is to be com­ given a long or short term. role at the time of the offense. Blacks suffer mended for her many accomplishments Of course, American justice is not yet fully disproportionately from ·crimes by parolees color-blind. But rather than celebrate our and probationers since many violent and re­ throughout her career, including her progress in approximating this ideal, some peat offenders call the inner city home. most recent achievements in Arizona during her tenure as District Director prefer to focus attention on whatever evi­ A CIVIL-RIGHTS ISSUE dence of racial disparities they can muster. of the INS in Phoenix. For example, there are hundreds of post- Inner-city crime must be understood as a Prior to coming to Arizona, Ms. civil-rights issue. The little Linda Browns of 1969 studies of minorities in the juvenile jus­ tpday's urban neighborhoods are being de­ Myers accumulated a distinguished tice system. Barely two dozen, however, ac­ record of service to the INS in a num­ tually offer evidence of any overall pattern prived of basic governmental protections and civil rights. It is a contorted conception of ber of capacities throughout the world. of racial discrimination. But based on an in­ civil rights that requires government action Among her many accomplishments, I terpretation of 46 of 250 of these studies, a against segregated schools but does not re­ much-cited "research summary" published would like to particularly recognize by the federal Office of Juvenile Justice and quire it against violence-ridden ones. It is an Ms. Myers' participation in the 1962 empty jurisprudence that sees a civil-rights Cuban Bay of Pigs prisoner exchange, Delinquency Prevention last December as­ interest in enabling children to attend the serted that there was "substantial" evidence in the 1975 Operation Babylift of Viet­ of racial discrimination against minority ju­ local public school of their choice but sees namese orphans, in 1981 representing none in enabling children to walk to school venile offenders. This report was drafted in without having to dodge stray bullets or run the INS with the U.N. High Commis­ October 1989, peer reviews were ready in Feb­ sion for Refugees in Africa, and in 1982 ruary 1991 and the report itself was not pub­ from drug dealers. In a speech last November to black pas­ with Cambod ian refugee processing. lished until December 1993. But the report's Ms. Myers also served in administra­ postscript states that because of "time pres­ tors, President Clinton imagined that if the sures" and "numerous requests for the final Rev. Martin Luther King Jr. could return to tive capacities in 1986 in Minnesota and the pulpit today, he would say: "I fought to 1990 in Texas, and was Chief of Staff for document," OJJDP "decided not to update stop white people from being so filled with the research" or "make any major sub­ the INS Commissioner in 1988 and 1989. stantive changes." Congressional overseers hate that they would wreak violence on During Ms. Myers' tenure as District black people. I did not fight for the right of Director in Phoenix, new INS facilities should see to it that OJJDP, a bureaucratic black people to murder other black people bastion of sociological cant on crime that were built throughout the area, includ­ has enjoyed large budgetary increases under with reckless action." Amen. ing the district office in Phoenix, the Attorney General Janet Reno, straightens Phoenix Sky Harbor International Air­ house. TRIBUTE TO DAVID J. LUCIER port, with suboffices in Reno and Las There is also some evidence that blacks Vegas, NV, the ports of entry at Doug­ who kill whites are more likely to be sen­ Mr. CHAFEE. Mr. President, I rise laS!; Nogales, Sasabe, and San Luis, and tenced to death than blacks who kill blacks. today to salute David J. Lucier, a cer­ This is the focus of the Racial Justice Act, service processing centers [SPC's] at which some House Democrats have made the tified public accountant who was re­ Florence and Eloy. Under her direc­ perverse price of their support for the pro­ cently honored by the Small Business tion, the Florence SPC received accred­ posed crime bill. But most of the evidence Administration as the 1994 Rhode Is­ itation in 1993 by the American Correc­ centers on pre-1972 rural Southern jurisdic­ land Small Business Accountant Advo­ tional Association for meeting deten­ tions; it is hardly conclusive. cate of the year. tion standards and to date holds the The black crime gap is real, not rhetorical After gaining experience in several record for the highest score obtained or racist, and black Americans' rising fear of Rhode Island C.P.A. firms and a large by any INS facility for meeting such crime at a time of declining crime rates na­ jewelry manufacturer, Mr. Lucier tionwide must be addressed. There are at standards. In addition, because of Ms. least three things that government can do. started his own accounting firm. Myers leadership, the Phoenix district First, give low-income people vouchers so Today, this firm provides accounting became one of the first in the Nation to they can protect their homes against crime. and business consulting services to be totally computer automated, includ­ The private foundations that have spent tens small and medium-sized businesses in­ ing ports of entry and all suboffices. of millions of dollars to analyze inner-city cluding manufacturing, retailing, and Furthermore, Ms. Myers has been ex­ problems have never spent a penny on such construction. tremely visible in various community mundane things as deadbolt locks for public­ The success of Mr. Lucier's firm is, groups in Arizona and throughout the housing residents or private security for pub­ without a doubt, a result of his per­ lic housing complexes. Uncle Sam should Nation to communicate a better under­ also lend a hand in erecting gates on crime­ sonal interest in his clients' success standing to the public of the mission of plagued inner city streets, automatically and his understanding of the issues fac­ the INS and to promote a positive evicting drug dealers from public housing, ing small businesses in today's world. image. installing metal detectors in public schools Mr. Lucier also works as a consultant Mr. President, Ruth Anne Myers ex­ and cutting aid to cities that don't zone for the Small Business Development emplifies the very finest tradition of 15784 CONGRESSIONAL RECORD-SENATE July 11, 1994 career Federal service. I am proud to ativity of our citizens, a vibrant ex­ passed the House of Representatives recognize her life and accomplishments pression of why Delawareans have so last year by a substantial margin. A on behalf of my constituency and all much to be proud of. majority of the Senate supports it as Americans. It is an occasion that renews our well. I want to emphasize that point. A bond to one another not only as fellow majority of the Members of this body citizens but as members of a true State are in favor of this legislation. Most THE 75TH ANNIVERSARY OF THE family. After 75 years of growth and importantly, according to a recent poll DELAWARE STATE FAffi change, the Delaware State Fair re­ by Fingerhut/Fowers, the American Mr. BIDEN. Mr. President, this mains a family-made, family-oriented people support it by a margin of more month we are celebrating a proud and event, centered around the values and than two-to-one. important occasion in my State, the relationships that matter most. So why is not this bill about to be­ 75th anniversary of the Delaware State It inspires a remarkable feeling of come a law? Because the Republican Fair. community- not a naive or simple or leadership opposes this bill, and is I've had the pleasure and privilege of nostalgic diversion, but a genuine and blocking the Senate from even debat­ being an annual participant in the lingering feeling of shared pride, ing it. Delaware State Fair for more than 20 shared purpose, and shared hope. In I have been in the Senate for 19 years, almost a third of its proud his­ this annual gathering of family and years, and while I strongly disagree tory. In that time, a lot has changed friends, we not only enjoy ourselves, with the Republican leadership's posi­ about our annual gathering in Har­ we rediscover ourselves, and we redis­ tion, I must say that I am not sur­ rington, with the fair's ever-increasing cover the promise of what a commu­ prised. In fact, the Republican Party stature attracting more visitors and nity of neighbors can be at its best. has a long and rich tradition of turning more entertainers of national and So as we in Delaware mark the 75th its back on American workers. international renown each year. anniversary of our State fair, Mr. In the past two decades, the GOP has Yet the foundation of the Delaware President, we celebrate the annual re­ consistently served as the tool of State Fair has remained very much the newal of a spirit that deserves to be America's corporate giants, ignoring same. It is a foundation that has been celebrated every day and in every com­ the needs of America's working fami­ built and maintained by people whose munity. And we do so with gratitude to lies. The Republican Party has fought extraordinary personal commitment the people who have kept that spirit at the battle for the National Association has ensured not only the fair's endur­ the foundation of the Delaware State of Manufacturers. It has stood shoulder ance but its success and its meaning to Fair, and shared it with all of us, for so to shoulder with the U.S. Chamber of our State. To give you an idea of the many years. Commerce. It has fought for other big level of dedication I'm talking about, business groups. But when it comes to there have been just three fair man­ fighting for American workers, the Re­ agers during my 20-plus-years associa­ CONCLUSION OF MORNING publican Party is nowl:lere to be found. tion with the event. And there are BUSINESS In fact, when the chips are down, the many others who make a similar com­ The PRESIDING OFFICER (Mr. DOR­ Republican Party is consistently mitment, year in and year out, and GAN). The Chair advises the Members of against fairness in the workplace. Just whose efforts make everyone else's en­ the Senate morning business is now take the last 5 years as an example. In joyment possible, from the staff, to the closed. 1989, the Republican Party fought board of directors and superintendents, against minimum wage legislation, to the exhibit area and event volun­ turning its back on millions of low­ teers. NATIONAL LABOR RELATIONS ACT wage workers struggling to make ends Organizations, too, like 4-H and Fu­ AND RAILWAY LABOR ACT meet. In 1990, the Republican Party ture Farmers of America, have made a AMENDMENTS fought against civil rights legislation, sustained and defining contribution to MOTION TO PROCEED turning its back on women, minorities, the Delaware State Fair. Long before The PRESIDING OFFICER. Under older workers, and the disabled who offering substance abuse prevention the previous order, the Senate will now suffered harm from intentional dis­ programs won a place among our na­ resume consideration of the motion to crimination or harassment on the job. tional priori ties long before there were proceed to S. 55, which the clerk will In 1991, in the midst of a serious re­ seminars on how to combat the nega­ report. cession, the Republican Party fought tive influences of today's world on our The assistant legislative clerk read against an extension of unemployment young citizens, such organizations as follows: compensation benefits, turning its were at work in our communities, and Motion to proceed to the consideration of back on millions of working families at the Delaware State Fair. The con­ S. 55, a bill to amend the National Labor Re­ hard hit by layoffs and plant closings. stancy and quality of their involve­ lations Act and the Railway Labor Act to In 1992, the Republican Party fought ment have contributed not only to the prevent discrimination based on participa­ against this very bill, after it had fair's growth and appeal, but also to its tion in labor disputes. passed the House of Representatives, value and character. The Senate resumed consideration of turning its back on thousands of work­ I ·use words like "character," the motion to proceed. ers who lost their jobs for exercising "value," and "meaning" in describing The PRESIDING OFFICER. The their Federal right to strike. the Delaware State Fair, because this Chair recognizes the Senator from Ohio In 1993, the Republican Party fought anniversary represents more than the [Mr. METZENBAUM]. against the Family and Medical Leave 75th recurrence of a successful and en­ Mr. METZENBAUM. Mr. President, Act, turning its back on workers who joyable public event. It represents the today we begin debate on S. 55, the need time off to care for sick or dying endurance of a cherished spirit, a defin­ Workplace Fairness Act. This legisla­ family members. And this year, con­ ing sense of community. We celebrate tion would ban the hiring of permanent sistent with its previous actions, the not only what the fair is, but also how striker replacements, but ultimately it Republican leadership has talked about it makes us feel. is about much more than that. It is filibustering health care reform, turn­ The State fair, is, truly, Delaware's about fairness to workers. It is about ing its back on 37 million Americans annual reunion. It brings us together restoring a degree of balance to labor­ who have no health care at all, and on in celebration of the best that our management relations. And it is about all working Americans who are fed up State has to offer-the products of our preserving our collective bargaining with spiralling health care costs. farms, our homes, our community or­ system. So it is no surprise that today, the ganizations, and our stores. It is a cele­ The Workplace Fairness Act has the Republican leadership, as a policy mat­ bration of the talents, skills, and ere- strong support of our President. It ter, is fighting against the Workplace July 11, 1994 CONGRESSIONAL RECORD-SENATE 15785 Fairness Act. A majority of the Amer­ their work force to keep operating, or that is very well known in this coun­ ican people and the Congress support would consider doing so. More specifi­ try; how they could ask their workers this bill, but the Republican Party is cally, roughly one-third said they to give back part of their wages, accept blocking the Senate from even moving would . definitely hire replacements, the give backs that they gave them in to the point of debating it. We are on a and half said they would consider doing order to help the company survive, and motion to proceed to be able to get to so. Finally~and this is a critical then turn around and fire the workers the point of debating the merits of the point-of the employers who said they when they had to go on strike in order bill, but the Republican Party is fili­ would hire replacements, or consider to regain some of the losses that they bustering the motion to proceed. doing so, more than 1 in 4 said the re­ had given up. Then the company hired The Republican Party has turned its placements would be permanent. permanent replacements. Hundreds of back once again on working families in True, this deplorable practice was loyal workers have been left out in the this country. first suggested by the Supreme Court cold for 3 years, losing their jobs for Let me make it clear. Not every Re­ in 1938 in the Mackay Radio case. But exercising what they thought was a publican Senator has opposed these for decades, employers virtually never protected right. · measures, and I am grateful for the hired permanent replacements. In­ Thanks, Diamond Walnut. You are support some have given. In fact, some stead, they valued their workers and sure a great employer. And anybody have had to rise above their own col­ counted on them to return after a who buys Diamond walnuts knowing of leagues to stand up and vote for some strike. these conditions has to have their head of these measures that I previously In the merger-crazed 1980's, however, examined. mentioned, and there will be some in this union-busting practice exploded. A Similarly, in Hope, AR, 300 low-wage on the opposite side of the aisle who new breed of employer emerged, one workers at Champion Parts Rebuilders will vote to make it possible to proceed that does not hesitate to replace its were permanently replaced after the forward with this debate. But as a pol­ union work force. These employers company demanded sweeping cuts in icy matter the Republican Party's po­ treat loyal workers--many of whom health benefits. At first, the workers sition is against even moving forward have given 10, 20, 30, and in some cases, did not want to strike, so they offered to debate this legislation. But time 40 years of their working lives to build to take substantial health insurance after time after time, when the inter­ a successful enterprise-as just another cuts. But the company absolutely re­ ests of American workers have been be­ commodity to be used up and tossed fused to budge from its position, which fore this body, the Republican Party aside. would have left many workers unable leadership has turned its back. It may This issue is of critical importance to to afford health coverage at all. The be a "no" vote, it may be a filibuster, working Americans, but the Repub­ workers continued to negotiate for 5 it may be a Presidential veto, but the lican Party does not even think it de­ months after the contract expired, but result is the same: The Republican serves to be debated by the Senate­ finally found themselves with no Party gives a leg up to big business and that is why the Republican leadership choice but to strike. The company corporate greed, while American work­ is filibustering this bill. hired permanent replacements several If you are on the side of history, you days later. ers get the cold shoulder. must vote to restore the historical bal­ For these and thousands of other The Workplace Fairness Act is not ance between labor and management hard-working Americans, the practice just about restoring the right to that existed for decades before this des­ of hiring permanent striker replace­ strike-it is about the very survival of picable practice developed. ments has had a devastating impact. It the American labor movement. For Second, I would ask my colleagues, is absurd to force workers to choose be­ decades, American workers have helped are you on the side of fairness? The tween their right to strike and their make this country a great and progres­ very purpose of our Federal labor pol­ livelihoods. But that is just what the sive nation. But the growing practice icy is to enable workers to join to­ Republican Party is doing today, by of hiring permanent striker replace­ gether to improve their wages and preventing the Senate from even debat­ ments has stripped workers of the eco­ working conditions. As part of that ing this legislation, when a majority of nomic leverage they once had, and policy, our Federal labor law expressly the Senate and the House and the crippled the American labor move­ protects the right to strike. But what American people support it. If you are ment. good is that right if you can lose your on the side of fairness, you must vote Today, we are at a critical juncture. job for exercising it? for the Workplace Fairness Act. I would say to my colleagues, you have In the last few years, tens of thou­ And not permitting this Senate to two choices: You can restore the right sands of American workers have lost move on to get to the substance of the to strike, or you can turn your backs their jobs at companies like Eastern legislation itself is an impropriety and on the working men and women of this Air Lines, International Paper, Grey­ certainly does not serve the Republican great Nation. The American people are hound, Phelps Dodge, and dozens of Party well, except as they serve the watching, and they want to know: other companies. Hundreds of thou­ U.S. Chamber of Commerce and the Na­ Which side are you on? sands more have refrained from exer­ tional Association of Manufacturers. First, I would ask my colleagues, are cising their right to engage in collec­ Third, I would ask my colleagues, are you on the side of history? Since 1935, tive action because of the threat of per­ you on the side of collective bargain­ our· Federal labor law has expressly manent replacement. ing? Since 1935, our national labor pol­ protected the right to strike as an inte­ There is no shortage of examples. At icy has favored the resolution of labor gral part of our collective bargaining Diamond Walnut in California, workers disputes through collective bargaining. system. For decades, workers were free earning between $5 and $10 an hour As the Supreme Court has recognized, to exercise this right without fear of agreed to cut their own pay by up to 40 Congress specifically protected the losing their jobs. With this economic percent when the company was strug­ right to strike as "an economic weapon balance, workers were an equal partner gling. They were not making much. which in great measure implements in a fast-growing American economy. They were making between $5 and $10 and supports the principle of the col­ In the last decade, however, all that an hour. They agreed to cut their own lective bargaining system." Although has changed. The General Accounting wages by up to 40 percent because the the right to strike is exercised in less Office has reported that employers hire company was in tough times. But after than 1 percent of all bargaining nego­ or threaten to hire permanent replace­ their sacrifices turned the company tiations, it serves to bring the em­ ments in one out of every three strikes. around, the company demanded even ployer to the table. This year, the Bureau of National Af­ more givebacks, leaving workers with Without a meaningful right to strike, fairs reported that an incredible 82 per­ no choice but to strike. collective bargaining becomes little cent of employers indicated that if I do not understand the attitude of a more than collective begging. As Sec­ struck, they would attempt to replace company like Diamond Walnut, a name retary of Labor Robert Reich said in 15786 CONGRESSIONAL RECORD-SENATE July 11, 1994 his testimony before Congress, "man­ Let me take a moment to tell you according to the most recent poll. That agement that has the option of simply what the Workplace Fairness Act does, is why the House of Representatives eliminating the other side has little and what it does not do. The act pro­ passed it. That is why a majority of the commitment to finding a mutually sat­ hibits the hiring of permanent striker Senate and the President of the United isfactory resolution of differences." No replacements, or other discrimination States support it. But today, the Re­ matter what the opponents of the against workers engaged in a lawful publican leadership is blocking the Workplace Fairness Act say, there is economic strike. Senate from even debating the bill. one very simple, indisputable fact: The Does it preclude employers from op­ Once again, the Republican Party has hiring of permanent replacements trig­ erating during a strike? Absolutely turned its back on America's working gers longer and more bitterly divisive not. Employers would be free to oper­ families, siding instead with big busi­ struggles, and turns a limited dispute ate during strikes, using temporary re­ ness and corporate greed. about wages and working conditions placements or managerial personnel, or For America's hard-working men and into a much broader, and much more subcontracting or transferring work, as women, whose hours are growing destructive conflict about every work­ they have done successfully for 59 longer and whose paycheck is growing er's job. That is why the average strike years under the National Labor Rela­ smaller, this is an issue of basic fair­ lasts several times longer when the em­ tions Act. ness. This week, they are asking each ployer hires permanent replacements. Does it beckon workers to strike? Of one of us, "which side are you on?" Some employers have actually used course not. Those who say S. 55 will The PRESIDING OFFICER. The the practice of hiring permanent strik­ trigger many more strikes do not have Chair recognizes the Senator from Kan­ er replacements · to attack the very a clue about what a strike means for sas. concept of collective action. More spe­ workers. The right to strike is labor's Mrs. KASSEBAUM. Mr. President, I cifically, these employers have most effective weapon, but workers are rise in strong opposition · to S. 55, precipitated strikes in order to replace loathe to exercise it. Striking means which, as the Senator from Ohio has striking workers, and decertify the foregoing wages, walking the picket said, is legislation which will prohibit union once and for all. For example, in line, and exhausting the family's life the hiring of permanent replacements a study covering strikes between 1983 savings. It is a decision of last resort, during an economic strike. The impli­ and 1994, the steelworkers found that in and not one taken lightly. That is why cations of this, as the Senator from two-thirds of the strikes involving per­ S. 55 would not trigger a flood of Ohio pointed out, go beyond just the manent replacements, the union was stri~es. stark words of this legislation. decertified or the plant was closed, de­ Fifth, I would ask my colleagues, are Two years have passed since the Sen­ stroying the bargaining relationship you on the side of democracy? Our de­ ate last considered this bill. If any­ altogether. mocracy is premised on the principle of thing, the passage of time has only In short, the hiring of permanent re­ majority rule. As I have said, a sub­ confirmed that this measure is ill-con­ placements creates an imbalance of stantial majority of the House has al­ sidered and ill-founded. Frankly, I do power that jeopardizes the continued ready passed this bill, and a majority not believe that there are any changes effectiveness of the American labor of this body supports it as well. Two that could possibly be made to salvage movement. Without an effective labor years ago, the Members of this body this bill. No matter how you dress it movement, our collective bargaining never got a chance to vote on it, be­ up, S. 55 will turn 50 years of labor law system cannot work. That does not cause of a Republican-led filibuster. seem to trouble the Republican leader­ This year, we face the same tactics of on its head, creating new incentives for ship, which has fought this legislation longer strikes that will wreak havoc on obstruction. our economy. at every turn. If you are on the side of If the last election taught us any­ collective bargaining, you must give thing, it is that Americans are tired of More strikes, more disruptions in the back to workers the economic leverage gridlock. American workers deserve a workplace, and more antagonism be­ to make collective bargaining work. vote on this bill. If it passes, the Presi­ tween labor and management will only Fourth, I would ask my colleagues, dent will sign it. If it does not pass, so add to the uncertainty about our eco­ are you on the side of competitiveness? be it. But let the Senate decide, based nomic future, at a time when workers In the coming years, we must meet the on the democratic principle of major­ are seeking more stability and greater tremendous challenges of the new glob­ ity rule. So if you are on the side of de­ job security. al economy. But we cannot hope to mocracy, you must vote for cloture, This bill is not about turning our compete in world markets if those who and allow this measure to stand or fall backs on the American worker. This labor cannot work with those who on its merits. bill is about trying to assure that there manage. Finally, I would ask my colleagues will be a greater sense of stability and Hiring permanent replacements sends this fundamental question: Are you on security in the workplace. an unmistakable message that workers the side of the American labor move­ This bill does not destroy the right are disposable, reducing employee mo­ ment? That is ultimately what is at to strike. The right to strike is cer­ rale and lowering productivity. The stake here. The labor movement was tainly retained. But that is one side of practice can tear a community part, as built on some of this country's highest the coin. Just as an employer's right to was the case in Jay, ME, several years ideal&-fairness, social justice, and the hire permanent replacement workers ago when International Paper disposed right to earn a decent living. And the has, for 50 years, been the other side of of second and third generation workers labor movement has won many battles the coin. Now some are trying to say, like so many paper cups. over the year&-for fair wages, safe "No, that is not fair. It should be just It is no wonder that our principal workplaces, basic benefits and a secure one way, not two sides of the coin.'' competitor&-including Germany, Can­ retirement-not just for their mem­ Our current Federal law already es­ ada, France, and Japan-have long rec­ bers, but for all working Americans. tablishes. an appropriate balance be­ ognized that using permanent replace­ But the future of our labor move­ tween the interests of labor and man­ ments is unwise, as a matter of both ment depends on restoring the right to agement. On the one hand, the law public policy and good business. A ma­ strike as an effective economic weap­ guarantees labor the right to strike­ jority of the Senate recognizes this on. In turn, a healthy labor movement and that is as it should be. But the law too-but because of the Republican will restore balance to labor-manage­ balances this right against an employ­ leadership filibuster, we may never get ment relations, facilitate greater labor er's right to operate his or her busi­ to vote on this issue. If you ·are on the peace, and contribute much toward en­ ness. On rare occasions, this may re­ side of competitiveness, you must en­ suring U.S. competitiveness in world quire hiring permanent replacements. sure that workers and managers can markets. This balance provides a key element to face these global challenges as part­ That is why the American people stable labor relation&-an incentive to­ ners, rather than adversaries. support this bill, by more than 2 to 1 wards settling labor disputes. Mr. July 11, 1994 CONGRESSIONAL RECORD-SENATE 15787 President, we all wish to see the set­ cantly increased both the incidence nut. The only way to avoid the dev­ tling of disputes and cooperation be­ and duration of strikes. astating losses of an entire year's crop tween labor and management. The fact is, that over the past 25 was to hire permanent replacements. Companies have invested large years, under our current system we The labor relations history is impor­ amounts of time and energy into devel­ have witnessed a dramatic decrease in tant. Diamond Walnut t;ound itself in oping the skills of their work force. the number of strikes. In 1974 there an uncompetitive labor cost situation Their institutional memory, their were 424 major strikes. By 1984, that in 1985 and negotiated wage rate reduc­ knowledge, skills and abilities, are not number had declined to 62. And in 1993, tions, as was mentioned by the Senator something that can be easily replaced. there were just 35 major strikes, an all­ from Ohio. Businesses will not replace their time low. Nevertheless, Diamond Walnut re­ work force knowing that they will have The current system, I believe, works mained an industry leader in employee to retrain replacements at great cost, well. It could work even better if, in­ compensation. So while they reduced unless there is no alternative. The de­ deed, labor and management recog­ their compensation, they were still cision to strike and the decision to hire nized the importance of cooperation in paying more than their competition. In permanent replacements both carry resolving their differences instead of 1991, negotiations centered on health great risk. ever greater antagonism. care employee copayments, with Dia­ These choices, although painful, are In fact, the Dunlop Commission, ap­ mond Walnut suggesting that workers precisely the incentives that lead both pointed by President Clinton to study pay about 9 percent of that burden. The labor and management to settle, with­ worker-management relations, re­ company also wanted to implement a out disruption, the overwhelming num­ cently concluded that: profit-sharing plan as part of the com­ ber of contract negotiations. The com­ In most workplaces with collective bar­ pensation package. peting rights of the parties, and the gaining, the system of labor/management ne­ Mr. President, I think it might be hardships that they impose, are what gotiations works well. Conflict is relatively helpful to look at the wage and benefit compel management and labor-far low, and unions and firms have developed di­ package that was offered by Diamond verse forms of new cooperative arrange­ more often than not-to resolve their ments. * * * The relations among workers, Walnut and that the Teamsters re­ differences at the bargaining table. their unions, and management in these jected in 1991, because it was a very By contrast, S. 55 will overturn a workplaces are well regarded by these par­ generous package. half-century of established Federal ties. According to Diamond Walnut man­ labor law. The bill would upset the Even the Secretary of Labor has rec­ agement, a "general laborer" at Dia­ delicate balance that has worked so ognized that "The vast majority of col­ mond Walnut earned about $6 per hour well. It would, for the first time, create lective bargaining contracts are settled and would have received a 10-cent-per­ the unqualified right for labor to walk without strikes * * *." hour raise. Competitors, mostly non­ off the job, for any reason, without ad­ I suggest, if the system is not bro­ union we would assume, paid $4.99 per vanced notice, no matter how unrea­ ken, why are we trying to fix it? hour. The union demanded $7 per hour. sonable the demands. The Senator from Ohio has said we So Diamond Walnut was paying $1 per Current law draws a distinction be­ will not have time to debate this issue. hour more than its competitors, and tween workers who strike because We have today, tomorrow, the next the union wan ted the company to pay their employers are violating the law, day-and potentially the next day after $2 an hour more than its competitors. and workers who strike because they that-during which we will be debating The situation was equally troubling are dissatisfied with their wages and this issue. I hope that during the for "machine operators." Diamond benefits. Workers who strike because course of this debate arguments both Walnut paid $10 per hour; the union de­ their employer commits an unfair pro and con will be made which will manded $11 per hour. Diamond Walnut labor practice cannot be replaced. How­ help the American people to under­ competitors were paying $6.30 per hour. ever, if a union strikes over demands stand what is at stake. After the strike, the company imple­ for higher wages or greater benefits, an Hiring permanent replacements is mented their final offer, which was employer may have to resort, ulti­ hardly a standard practice. A recent $10.10 an hour. mately, to permanent replacements in General Accounting Office report found Diamond Walnut paid highly com­ order to keep the business open and in that only 3 percent of striking workers petitive wages, but that was not good operation. were permanently replaced in 1989. We enough for the union business rep­ S. 55 would eliminate this critical should not ban this seldom-used prac­ resentative. So they ordered a strike. distinction in the law. Under this bill, tice when the consequences will be dev­ Mr. President, health care was an im­ workers may strike for any reason astating to the vast majority of our portant issue in the Diamond Walnut with complete impunity, even if their Nation's workers. strike. Health care costs had increased demands for wages and benefits are Mr. President, in response to the from 74 cents per hour to $2.21 per hour completely unreasonable. Simple com­ Senator from Ohio on the issue of Dia­ from 1988 to 1990. Something had to be mon sense tells us that this will lead, I mond Walnut, I would like to go done. · would argue, to more strikes. through a bit of the history at Dia­ Diamond Walnut asked their employ­ The Senator from Ohio said that any­ mond Walnut. ees to pay about 9 percent of their one who makes that statement does Another relatively recent strike that monthly health care costs, which was not know what this is all about. But I highlights the dangers, I suggest, of S. $12 per month for individuals and $33 suggest that S. 55 would create a great 55 becoming law, is the one that hap­ per month for families, with no deduct­ sense of uncertainty and antagonism at pened at Diamond Walnut. The Team­ ible. Before the strike, the union plan the very time that we most need tore­ sters struck Diamond Walnut, a Cali­ had $100 per individual and $300 per store a sense of security in our work­ fornia agricultural cooperative, on family yearly deductibles. place. The ability to strike for wages September 4, 1991, at the beginning of I ask my colleagues to note that this and benefits without risk or adverse the annual walnut harvest. All the crop proposed health care copayment was consequences is bound to encourage­ must be harvested immediately to well below the 20 percent copayment not discourage-the use of strikes, with avoid spoilage. Diamond Walnut is a that the Clinton health care plan envi­ devastating effect on our economy. cooperative, owned by more than 2,000 sions. In fact, this cone! usion is borne out growers who own, on the average, 36 Diamond Walnut also proposed sev­ by the evidence of what has occurred in acres of walnut orchards. We are talk­ eral improvements to the health care Canada, where several provinces have ing about family farms, not some huge, plan, including the addition of an an­ banned replacements. According to one enormous agribusiness. nual physical for $20; eye exams for $10; comprehensive study, a prohibition of The union timed this strike to place out-of-pocket limit reduced from $2,100 replacement workers in Quebec signifi- maximum pressure on Diamond Wal- to $1,000 for individuals; $6 for generic 15788 CONGRESSIONAL RECORD-SENATE July 11, 1994 prescription drugs; and a modification A Kansas City Star editorial called world already protect strikers and do of the maximum benefit from $1 mil­ the striker replacement bill "an ill­ not permit the bringing in of perma­ lion to unlimited amounts. considered time bomb" that, if passed, nent replacements. But the fact is-and The union chose to walk away from would be "one of the most irresponsible I think we ought to be realistic about this offer. That was their choice. But acts of the modern Congress." I would this-we live by the laws of this coun­ should we say to the small farmers who like to quote at length from that edi­ try going all the way back to the belonged to the Diamond Walnut coop­ torial because I think it states the case Mackay Radio decision, which was a erative and to the thousands of work­ so well: decision in the thirties that made it ers who will lose their jobs if this legis­ The long-term damage a striker replace­ possible for employers to bring in per­ lation passes, that the union can shut ment law would do to this country's com­ manent striker replacements. But em­ you down even when you are paying petitiveness is beyond calculation * * * If ployers did not do that. They had an well above the market rate of com­ organized labor is given the leverage to push ethic about them. They were decent pensation? That was really the issue up wages faster than productivity, it will employers. Then some of the leveraged surely use that leverage. If companies can here. never replace employees who refuse to work, buyout artists and the fast-buck boys Mr. President, the Caterpillar Co. unions will steadily undermine the very came in and started buying up compa­ and Diamond Walnut strikes are both trends that are erasing America's labor dis­ nies. And as soon as they came in, they excellent examples of how out of touch advantage relative to developing countries. started terminating worker pension union leaders can be with the best in­ Organized labor cannot have it both ways. rights, taking the excess pension funds, terests of their membership. Both Cat­ It is inconsistent to complain that jobs are and then deciding they were going to erpillar and Diamond Walnut offered moving off-shore and then lobby for meas­ cut back on wages so that they could generous contract proposals, but the ures that will, over time, undermine the make up for the debts they had in buy­ union leadership thought the union course that makes American workers more productive. If a striker replacement ban be­ ing up the companies. should hold out for more. comes law, it will increase the incentive of Now, why did they do that? What I suggest in both these instances that employers to move work to overseas labor happened for the 50 years when perma­ the workers probably were ill-served by markets that are more flexible-and less hos­ nent striker replacements were permis­ their union leaders. Nevertheless, our tile. sible but were not used? I will tell you Federal law should not bail out these Mr. President, rather than encourag­ what happened. There was a wonderful leaders for their mistakes, because the ing more strikes, more divisiveness, President, a President who was really system worked just as it should have in and more antagonism between labor concerned about workers, who came each of these strikes. and management, we should be seeking into office. That President was sup­ That is not to say that there are not ways to encourage greater cooperation. ported in his election effort by two two sides to every labor dispute. Man­ I can think of nothing more beneficial. unions. One was the Teamsters Union agement does not always recognize the But if S. 55 becomes law, it will turn and the other was PATCO, the Profes­ value of their employees. There have the clock back to an era in which ev­ sional Air Traffic Controllers. been times in the past when that was eryone loses, not only the workers but Now, between the time he was elect­ certainly true. But I believe we must the economy as well. ed and shortly after he took office or also recognize that union leadership I oppose S. 55 and urge my colleagues thereabouts-and I do not remember has not always acted in their members' to vote "no" on the cloture motion, the specific times-those P ATCO em­ best interest. which I suggest is not just a procedural ployees went out on strike. It was an Our economy is just now recovering vote in this instance but a vote on the illegal strike. They did not have the from a recession. We have seen a long­ merits of the bill itself. And during the right to do so. But that wonderful de­ term restructuring of our economy. course of these days of debate, I hope fender of the American worker, Presi­ Americans are anxious about their that not only my colleagues here on dent Ronald Reagan, what did he do to jobs. They are concerned about having the Senate floor, but all those who are this union that supported him? Bang, a job to go to in the week ahead, let listening, will listen carefully. The he fired them all. And suddenly the em­ alone the next year. They are not in­ consequences of our action on this par­ ployers of this country said, well, if the terested in legislation that promotes ticular bill will go far in determining President can do that, so can we. strikes and costs jobs. They want legis­ what kind of work force and what type And so a practice that had not been lation that promotes real job growth. of security and stability we will have used for the past 50 years, although it Over the past several months, we in our labor market in future years. I was legal to do so, suddenly became the have heard a great deal about the job­ feel strongly, Mr. President, that S. 55 rule of thumb, and today more and less recovery. Even as our economy ex­ will work to the detriment of the fu­ more employers are using this proce­ pands, our blue chip companies con­ ture of our labor force. dure of bringing in striker replace­ tinue to downsize their work forces. I thank the Chair. I yield the floor. ments. It is an unfair, inhumane proce­ President Clinton has stated that his I suggest the absence of a quorum. dure. It is a procedure that says we do top priority at the G-7 summit in The PRESIDING OFFICER. The ab- not care how many years you have Naples will be to create jobs. Regret­ sence of a quorum is noted. The clerk worked for us. We do not care how hard tably, S. 55 will not help us meet that will call the roll. you fought to make our machines oper­ goal. The legislative clerk proceeded to ative. We do not care how cooperative S. 55 will adversely affect our Na­ call the roll. you have been in the last 10, 20, or 30 tion's competitiveness. Companies Mr. METZENBAUM. Mr. President, I years. We are going to fire you if you must respond to the needs of the mar­ ask unanimous consent that the order go on strike. ketplace. Yet, S. 55 will force U.S. com­ for the quorum call be rescinded. I remember conducting a hearing up panies to engage in global competition The PRESIDING OFFICER. Without in New York at the New York Daily with one arm tied behind their backs. objection, it is so ordered. News. Those employees did not even go I know that unions have had a tough Mr. METZENBAUM. Mr. President, I on strike. I remember testimony before time over the past two decades, but the listened with interest to my colleague our committee which said: "I wasn't on fact is our whole economy has been in from Kansas talk about how much bet­ strike. I walked outside to take a transition. Employers and workers ter it would be if we do not change the smoke and I couldn't get back into the have all had a difficult time. My con­ law and how this is so necessary to per­ plant because the company said I was cern is that striker replacement legis­ mit permanent replacements in order on strike. But I wasn't on strike." lation will force companies to adopt to protect employers of this country The companies have used this whole uncompetitive labor contracts, and and the economy of this country. concept of permanent striker replace­ this will lead to further layoffs and fur­ I previously pointed out that our ments to break unions. My distin­ ther downsizing. major industrial competitors in the guished colleague from Kansas quotes July 11, 1994 CONGRESSIONAL RECORD-SENATE 15789 an editorial from the Kansas City Star. country by the people in this country concessions of a union. Force them to I would like her to point out to me to move forward; that harmonious strike, then permanently replace them once-not twice, once-in the history labor relations make good business, with workers unsympathetic to the of this Nation that the Kansas City make for a strike-free enterprise sys­ union, and then move to decertify the Star was ever on the side of working tem. union. people. The Kansas City Star is a retro­ Mr. WELLSTONE addressed the We should call this what it is, Mr. gressive newspaper that has been con­ Chair. President: "Outright union busting." sistently Republican, consistently The PRESIDING OFFICER. The That is what has been going on in our antiworker, consistently antiunion. Chair recognizes the Senator from Min­ country. Twenty years ago, Mr. Presi­ And the fact that they write an edi­ nesota [Mr. WELLSTONE]. dent, this approach was used by just a torial saying that this is the right Mr. WELLSTONE. Thank you, Mr. few renegade American employers. But thing to do does not make it so. I think President. as Senator METZENBAUM has already the paper ought to come forward and Mr. President, I would just echo the said on the floor of the Senate today, start to get common with this century. sentiments of the distinguished Sen­ given all the mergers and acquisitions, It has not been in this century for ator from Ohio. I hope that we will in the leveraged buyouts and the rise of a many years. And with all due respect fact get a chance to have a discussion new breed of employer, not locally to the fact that it is the leading paper and a debate in the U.S. Senate about owned businesses but firms who make in the Senator's State, I have to say to this piece of legislation, S. 55, which I business. decisions halfway across the her that quoting that paper and mak­ think is one of the most important country or halfway across the world, ing it right to use striker replacements workplace fairness pieces of legislation too often communities no longer mat­ is very irritating to this Senator, as is ever to be introduced in the Senate. I ter, workers are expendable, and col­ quite obvious at this point. commend Senator METZENBAUM for his lective bargaining agreements are es­ Let me make it clear. When we talk leadership, most importantly because the bill is designed to combat an unfair sentially being torn up. about Diamond Walnut, Diamond Wal­ labor practice which strikes at the Mr. President, there are an estimated nut, that great employer that was so very heart of the collective bargaining 14,000 workers covered by the NLRA concerned about bringing in permanent process: the permanent replacement of that are replaced each year by Amer­ replacements, they really talk out of striking workers. ican employers, and thousands more both sides of their mouth. When they Mr. President, during the hearings under the Railway Labor Act. took the permanent replacements on, that we had in the labor subcommittee The GAO report indicates that from they made each of them sign a state­ o! the Labor and Human Resources 1985 to 1991, employers hired permanent ment that says the following: Committee, many men and women replacements in 1 out of every 6 I understand that the company has the came in and talked in very personal strikes, and threatened to hire replace­ same right to terminate my employment at terms about what this legislation ments in 1 out of every 3. But ulti­ any time and for any reason and without any mately, this is not a quibble about the notice. meant to them. I have seen some of this out in Minnesota as well. It is numbers. The essential point is this: What a wonderful employer Diamond really quite heartbreaking when you all workers engaged in legal economic Walnut is. They bring in permanent re­ think about what our country is about, strikes must be protected from perma­ placements and then say to them, "Oh, which I think is fair wages and decent nent replacement. but you are not permanent. We can fire working conditions, and making sure Mr. President, during this debate we you at a moment's notice." that working people get a fair shake, are going to hear from some urging us Now, I would guess that the Repub­ to see people who go out on strike be not to meddle with "the delicate bal­ licans will win on this issue because permanently replaced, to see people ance of labor-management relations es­ there are enough of them to keep this afraid to go out on strike because they tablished over 50 years." But I think matter from moving forward toward know they will be permanently re­ we should be frank. This is an attempt the vote. But the reality is that a ma­ placed, to see an erosion of any kind of to restore some balance. From my own jority of the Members of the Senate do fair balance of power between manage­ point of view, I think that it is ex­ not believe that bringing in permanent ment and labor. Too often, working tremely important that we have high striker replacements is the right thing people do not feel like they are in a po­ levels of productivity. I think it is ex­ to do. sition to really negotiate because they tremely important that employers and It is only by reason of the rules of are put in the impossible position of employees are partners. I think it is the Senate that make it possible to fil­ being forced to go out on strike and extremely important that there be ibuster and require 60 votes in order to then being permanently replaced. high morale. But that cannot be the cut off that filibuster that Republicans What has happened is that the right case when all too often some employ­ are saying they will not even permit us to strike has become the right to be er&-! think the good employers do not to get into the substance of the legisla­ fired in the United States. This piece of have any problem with this at all­ tion. What we are on now is a motion legislation which is now being filibus­ force people out of work and them per­ to proceed, and a motion to move for­ tered on the floor of the U.S. Senate is manently replace them. ward with respect to the whole issue an attempt to restore some fairness Mr. President, the debate boils down rather than to debate the issue itself of and balance to labor-management rela­ to this: We must restore two principles striker replacement. The legislation is tions. which have undergirded the collective not yet before the body. During the 1980's, as a January 1991 bargaining process established by the So I say to my colleague from Kan­ General Accounting Office study and Railway Labor Act, and the National sas, for whom I have tremendous re­ other studies have observed, the use of Labor Relations Act, in the 1930's. spect, this is an embarrassing situation permanent replacement has increased The two principles: one, employees for the Republicans. It is an embarrass­ dramatically. Private sector employers have a right to pursue their interests ing situation to say that we are con­ emboldened-as Senator METZENBAUM collectively without fear of employer sistently against American working said-by what happened with PATCO in reprisal; and, two, the representation people, we consistently carry the hod the early 1980's have used the perma­ questions must be separated from the for the U.S. Chamber of Commerce, the nent replacement of striking workers substantive issues in disputes, and a National Association of Manufacturers, as a way of abrogating collective bar­ Government-supervised procedure and so many other right-wing groups. gaining agreements and bringing in should be established to ensure fair It is time in this Senator's opinion for new hires often screened for their representation. Remaining substantive my colleagues on the other side of the antiunion biases. disputes are to be resolved through the aisle to catch up with the present and Mr. President, the process is fairly collective bargaining process. But this realize that there is a desire in this simple: require major and unreasonable system can work only if the right to 15790 CONGRESSIONAL RECORD-SENATE July 11, 1994 strike, in the words of the National It goes on, and section 2 states that These were people who worked for the Labor Relations Act, is not "interfered employees do not lose their status company for a long period of time. with or impeded or diminished in any when their "work has ceased as a con­ These were people who wanted nothing way." Sadly, this is no longer the case. sequence of, or in connection with, any more than to work and to make a de­ It is no longer the case in the face of current labor dispute." cent wage to support their families. all attempts today on the floor of the Given these protections, Mr. Presi­ As the rain came down and I looked Senate to focus attention away from dent, the notion that permanent re­ at the fences and at the security the central issue that is before us placement is somehow practically dif­ guards and was wondering, is this the today: The right to organize and bar­ ferent from being fired is not only un­ United States of America in 1994? I gain collectively. That is what is at tenable, but it is ludicrous. We say on asked them: "Why did you go out on issue here. the one hand that a company cannot strike?" They said that it just came to It is no longer the case in the face of fire people for going out on strike, but, the point where it was a matter of dig­ efforts today to point to this legisla­ on the other hand, a company can per­ nity, just in terms of the way they tion as special interest legislation. It is manently replace them. It ignores the were treated by a company for whom no longer the case in the face today of central, practical reality of such labor­ they had worked for years-although a attempts to present this bill as a "solu­ management disputes. In either case, different management was brought in. tion in search of a problem." whatever you call it, the employee They said, "We simply could not work Mr. President, I have seen people in loses his or her job because he or she under those conditions. We are men Minnesota recently going out on has exercised the right to strike. and women of dignity, worth, and sub­ strike. They did not want to. They felt Mr. President, this piece of legisla­ stance. We could not work under those they had no other choice. Then they tion-! will give a short history of this, conditions. We had to take on what we were permanently replaced. It is all because I see my colleagues, Senator felt were very unfair conditions." When over for them and their families. When you see all the people who can SIMON and Senator COHEN, on the floor they spoke up and when they tried to no longer bargain, can no longer bar­ here. This legislation simply overturns negotiate and tried to reach a settle­ gain collectively, and have no way of the judicially-created "permanent ment, the company said no, no. They getting decent wages and decent work­ strike replacement doctrine" first stat­ believed that OF Industries wanted ing conditions, this is hardly a solution ed in Labor Board versus Mackay them to go out on strike because, given in search of a problem. This problem is Radio in 1938 and amplified in other the current law, they could perma­ all too real in the face of an alarming cases in the 1980's. This decision said nently replace them. That is precisely increase in hard hitting antiunion ac­ that a company cannot fire those what they did. That is what this debate tivity among some employers and their workers who had gone out on strike, today is all about. hired consultants. but a company can permanently re­ So to the workers of Hormel Meat It is helpful to remember these two place them. It is absurd logic. It has re­ Packing in Austin, to the employees at principles. Workers have a right to or­ sulted in some truly bizarre and, I Quality Tool, to the employees at ganize without being retaliated against think, very tragic results. Union Brass and Metal Manufacturing for exercising that right, and they have Mr. President, to those who argue in Saint Paul, to the employees at Jen­ a right to negotiate decent wages, de­ that this is a solution in search of a nings Red Coach Restaurant-these are cent benefits, and decent health and problem, to those who argue that this all people who were permanently re­ safety conditions through collective bill is unnecessary, to those who are placed-Midwest Motor Freight in bargaining. Those are the rights that unwilling to even let us proceed and Roseville, or Fargo/Moorhead, to the have been so severely undercut by what have a debate for several days or weeks "Hibbing Seven," seven women who has been going on in this country for or whatever it takes to pass this piece were permanently replaced for years more than the last decade. of legislation, for those who say that and finally won their jobs back in Mr. President, let me just go through we should not pass this piece of legisla­ Hibbing, MN, to all of those men and for a moment the legislative history of tion because we do not need to do any­ women in my State, much less other Section 7 of the National Labor Rela­ thing to restore some kind of balance strikers that we hear about-New York tions Act which, in the words of its au­ and fairness in labor-management rela­ Daily News, Pittston Coal, Eastern thor, Senator Wagner, are described as tions, let me invite them to smaller Airlines, Greyhound, Ravenswood Alu­ "an omnibus guaranty of freedom for cities and towns in Minnesota where I minum-let me simply say that I think American workers." The purpose of went to talk to working people who it is really an injustice that we cannot this act is clearly stated and quite un­ have been permanently replaced by proceed and go on with a full debate, equivocal. their employers. Let me invite them whenever the final vote is, if we do not Employers shall have the right to self-or­ out to CF Industries in Pine Bend, MN, get the 60 votes. ganization, to join, form, or assist labor or­ where many workers have been perma­ I think it will be a real injustice if ganizations, to bargain collectively through nently replaced, again, for exercising this piece of legislation gets filibus­ representatives of their own choosing, and to their legal right to strike. tered. I think it will be a real injustice engage in other concerted activities for the I say to my colleague from Illinois, I to "regular" people, which I do not use purpose of collective bargaining or other forms of mutual aid or protection. went out to OF Industries several in a pejorative sense-whether they are weeks ago knowing that we were going in unions or whether they are not in It sounds simple and straightforward, to have this debate. I had to pinch my­ unions, by the way-because I feel, for and it is. Again, in section 8 of the act self to remind myself that this is 1994. working people, there ought to be a we see that it provides explicit assur­ I felt like it was in the 1930's and we ances that workers who engage in the way that they have decent representa­ had turned the clock back. These were tion. There ought to be fairness for concerted union activities protected by a group of people together on a Sunday section 7 will not be subject to em­ them. I think this would not only be ployer reprisals. It says: morning, it was raining, and they were important for working people in this out there with their spouses and chil­ country, moderate and middle income, It shall be an unfair labor practice for an employer* * * to interfere with, restrain, or dren. Without going into a long history whether in unions or not; I frankly coerce employees in the exercise of their of this strike, they were essentially think it is the key as to how we com­ rights guaranteed in section 7. given no other choice but to go out on pete in the international economic Even more specifically, it prohibits strike. They were permanently re­ market. employers "by discrimination in regard placed the day they went out on strike. I mean that sincerely, because when to hire or tenure of employment or any These were people who had done ex­ we look at our competitors, I kind of term or condition of employment, to tremely well in terms of productivity. lose patience with people who say that encourage or discourage membership in The fertilizer company had done ex­ if we pass S. 55, we will not be able to any labor organization~ * *." tremely well in terms of its profits. compete. Look at the other advanced July 11, 1994 CONGRESSIONAL RECORD-SENATE 15791 economies in the world: Japan, Ger­ I must say I find this characteriza­ should be given to establishing a more many, France, Belgium, Greece, Italy, tion not only simplistic but fundamen­ cooperative and harmonious relation­ Netherlands, Sweden, Canada; all of tally wrong. ship between labor and management. those countries do not permit the per­ Over the years, I have supported and Clearly, a strike represents the ulti­ manent replacement of workers. I worked to help the working people of mate failure of opposing parties to think one of the things they have done my State. compromise. In the end, everyone suf­ well is they built up a partnership. I I supported the Worker Adjustment fers. The workers and their families thought we were talking about employ­ and Retraining Notification Act, for suffer because of lost wages and lost ees becoming more involved in the de­ example, which requires employers to opportunities; the employer who has to cisionmaking, not being shut out com­ provide advance notice to workers who spend time and money hiring and re­ pletely. will be laid off, as well as passage of training the replacements also suffers. I thought we were talking about peo­ the Job Training Partnership Act, We have heard a lot of talk of how ple who build a partnership where which provides training to those who important it is to maintain productiv­ there is a real stake, a real sense of have been laid off. I also supported ex­ ity, efficiency, and high morale. An ownership of the company. I thought tending emergency unemployment employer can hardly do that if he or we were talking about how we build compensation benefits to the long-term she is simply resorting to replacing higher levels of morale. I thought we unemployed and an increase in the striking workers on a permanent basis. were talking about how to have a minimum wage. And, given that both sides want to skilled work force that believes in the Creating new jobs and maintaining avoid a strike, my hope was that over companies, and the companies that be­ existing ones are two of the most im­ the past 2 years both labor and man­ lieve in that work force. portant tasks facing Maine's citizens agement would see the mutual benefit I am telling you, Mr. President, this and elected officials. To this end, I in reaching a compromise on the issue is not just an issue of justice to work­ have worked vigorously to keep the of permanently replacing striking ing people; this is an issue of how we as Portsmouth Naval Shipyard open and workers. a country compete in the international to bring its facilities up to date. This Unfortunately, I must say we are no arena. We are an advanced economy. modernization, in which I played a further along today than in 1992. Both We do not compete by depressing large part, was a major factor in the labor and management continue to in­ wages. We do not compete by unsafe Pentagon's decision to keep the yard sist vehemently that there is no room working conditions. We do not compete open and thus preserve thousands of for compromise on this issue. with an unhealthy work force. We do many Maine jobs. While certainly not perfect, the cur­ not compete with low morale. We do In addition, I helped bring two new rent law regarding striking workers is not compete when we have some com­ Federal programs-the Jobs Corps and preferable than the legislation now be­ panies-thank goodness not all-that the Defense Finance and Accounting fore us. Unlike the striker replacement make the workers expendable, force Service [DFAS] to the area around legislation, for example, current law them out on strike and permanently Loring Air Force Base. Together they creates economic incentives to bring replace them. should create 850 to 900 new jobs, and both labor and management to the bar­ We compete when we have the frame­ the Job Corps is expected to spend an gaining table. Workers who are on work set up through this kind of legis­ additional $4 to $6 million on local strike to protest wages or benefits will lation that brings employees and em­ services. be more willing to negotiate with man­ ployers together, brings workers and Like labor, I also am concerned agement if they know that at some management together, and restores about the future of the Nation's mari­ point they might be replaced by others fairness in the workplace. time industry, which is in a serious who are willing to accept those condi­ state of decline that threatens our na­ tions. The striker replacement legisla­ I think that is what this legislation tional security. To combat this trend, I tion, on the other hand, places all the is about. There is not a piece of legisla­ have consistently opposed efforts to bargaining chips on the side of labor. tion I feel more strongly about. I have weaken cargo preference requirements, Labor unions could strike and return seen what this means in human terms long a cornerstone of our maritime pol­ to their jobs at any point in time, and in my State. I do not want to continue icy, which require goods purchased by management would be left to hire tem­ to see people driven out, squeezed out, the U.S. Government to be shipped on porary workers only-assuming they permanently replaced. I do not want U.S.-flagged vessels. could find people who would be willing that to be part of what our country is Most recently, I supported legislation to work on a temporary basis in a very about. in the Senate Judiciary Committee to hostile and highly charged environ­ I hope my colleagues will not fili­ allow baseball players the right to sue ment. buster this. We have a majority of the owners under antitrust laws. All other At the same time, current law pre­ Senate supporting this bill on the sports allow players this right. In the serves strong incentives for businesses floor. We have majority support in the case of baseball, I believed that the re­ to negotiate at the bargaining table. country. I hope we can go forward with lationship between the players' union Companies have a tremendous amount this piece of legislation. I urge my col­ and management was out of balance, of time and money invested in their leagues strongly to vote "aye" on the and I agreed with labor's position. De­ employees. Like labor, they recognize motion to proceed to the Workplace spite my support of numerous labor po­ that a well-trained work force is a Fairness Act. sitions, today we are told if you are company's most valuable asset. The PRESIDING OFFICER (Mr. against S. 55 you must be fundamen­ In addition, it is costly, inefficient, DASCHLE). The Senator from Maine. tally opposed to working people. and demoralizing to new workers who Mr. COHEN. Mr. President, I have lis­ Again, I want to reiterate the sim­ come on board as the permanent re­ tened to the arguments of my col­ plistic nature of that particular argu­ placements because they know that leagues on the other side. I must say ment and the erroneous conclusion. somewhere down the line they too the way in which the debate has been I disagree with organized labor on might be summarily fired or let go if characterized is if you are for fairness the issue of striker replacement. In they refuse to accept the conditions for working people then you will vote 1992, I joined a number of my col­ that they may find to be either eco­ for S. 55; if you are for unfairness for leagues in opposing similar legislation. nomically unjust or fundamentally un­ working people, you will oppose it; if At that time, I was disturbed by the in­ fair. So knowing this, companies, I be­ you favor helping working people, you transigence of both labor and manage­ lieve, would prefer to reach an agree­ will vote for S. 55; if you are opposed to ment in addressing the issue of perma­ ment with their current employees helping working people, then you will nently replacing striking workers. I rather than train permanent replace­ vote against it. suggested that further consideration ments. 15792 CONGRESSIONAL RECORD-SENATE July 11, 1994 Current law also creates an incentive operative way with the employees to higher than it is in the United States for management to negotiate in good settle disputes without resorting to re­ of America. That is hard to believe. I faith with striking employees. For ex­ placing striking workers. Moreover, I was stationed in Germany in the Army ample, if striking employees uncondi­ hope that management and labor will after World War II when the Germans tionally offer to return to their jobs do everything possible to address some were desperately poor. Things have and the employer does not reinstate of the animosity that seems to exist at changed dramatically. And it is not be­ them because permanent replacements some worksites around this country. cause there is some magic in Germany. have been hired, an employer may be Our competitiveness in the inter­ It is because of flawed policy. Things liable for back pay if the National national economy depends on it. And have gotten out of balance. Labor Relations Board finds that the the well-being of our work force de­ Part of this getting out of balance is workers were striking over unfair labor mands it. that companies which had the ability practices. Moreover, if an employer re­ If employers choose to simply sum­ for a long time to permanently replace instates its striking workers, the indi­ marily replace workers without a good­ workers now are taking advantage of viduals who were told they were per­ faith effort to end the strike on terms that. The self-restraint is gone. And manent replacements also may have a that are mutually agreeable, then I when self-restraint leaves on one side, right to sue. think they would invite legislation it too easily leaves on the other side, Federal law should not distort these such asS. 55 and it will receive support too. economic incentives for both labor and of an overwhelming majority. I am not saying that labor unions are management to reach agreements. Fed­ Mr. President, I yield the floor. all right and management is all wrong. eral laws should neither tip the scale in Mr. SIMON addressed the Chair. There is a lack of self-restraint on both favor of striking workers nor penalize The PRESIDING OFFICER. The Sen­ sides. workers for exercising their right to ator from Illinois. But where are the places you can le­ strike. Mr. SIMON. Mr. President, I am gally fire your strikers and have per­ In the past 2 years, I have met on pleased to stand up and support S. 55. manent replacements? Great Britain, nearly 20 occasions with a number of I would like to use a word that our Singapore, Hong Kong. That is it. You individuals from my State on both colleague from Minnesota, Senator cannot do it in Canada. You cannot do sides of this issue. Since April, I have WELLSTONE, used-"balance." This is it in France. You cannot do it in our heard from approximately 2,800 con­ what is lacking in our situation today. industrialized countries. In Quebec, stituents and about 4,600 others who In the past, when you had a Demo­ you cannot even have temporary re­ have expressed concerns on this issue. cratic President, the National Labor placements. And I tried to make clear to all con­ Relations Board had a slight tilt to­ And if there are permanent replace­ cerned that I do not believe that strik­ ward labor. When you had a Republican ments, then there is a bitterness in the er replacement legislation-at least President, there has been a slight tilt community that hurts in ways that this bill- offers the sort of balance that toward management. But, basically, none of us can measure. exists with current law. the National Labor Relations Board Right now, we have a strike in Illi­ I know there is concern that manage­ has been pretty balanced. nois at Caterpillar. This hurts many ment either threatens or has an im­ I do not say this as a partisan now, communities, but particularly Peoria, plied threat that if anyone goes out on because I think privately many of my IL. I have been urging both sides to strike they are immediately going to colleagues on the other side would come together. I have been on the be replaced. If that is the case, if the agree with me. Then, when Ronald phone to both sides. But if there should replacement on a permanent basis of Reagan got elected President, it went be permanent striker replacements at the striking workers becomes the rule way out of balance, and not only that Caterpillar, let me tell you, there rather than the exemption, I must tell went out of balance, but the whole would be violence in that community. I my colleagues I would not hesitate to business of labor-management rela­ do not advocate it; no union official ad­ reconsider my position on this or any tions went out of balance, and we have vocates it; no Caterpillar official advo­ other modified legislation. been hurt. cates it. But there would be violence. We have been through such a strike We are now at the point where 16 per­ Just as certain as I am standing here, with the International Paper Co. in cent of our working force belongs to or­ that would be the case. Jay, ME. Let me tell my colleagues it ganized labor. No other Western indus­ We have to have balance, and this has torn that small town asunder trialized country has that kind of a bill moves us in the direction of bal­ where families do not even talk to each small percentage. And, if you accept ance. other anymore because of the way in the governmental unions, it is down to Is this bill a substitute for better which it was handled. I must say both 11.8 percent; one-third of Canada, less labor-management relations? Obvi­ labor and management misjudged and than that from Western Europe and ously, it is not. What you need is labor mishandled that entire situation. Japan. and management sitting down, work­ There were families who were thrown I am not suggesting that this is sole- . ing together. out of work, replaced by relatives, and ly because of this, but there has been Just a few days ago, I was visiting others coming up from different parts slippage in our standard of living. the Sunstrand Corp., whose corporate of the country. The strike has made There is no question our deficit has office is in Rockford, IL. It was not that town a place which does not bear been a big part of that. That deficit has very many years ago when Sunstrand much resemblance to a place it used to caused interest rates to be excessive; it had terrible labor-management rela­ be. has caused 37 to 55 percent of our trade tions. But I sat down with the cor­ So I understand some of the heart­ deficit, according to the studies, and porate officers and right there in that aches and hardship that can be created that has discouraged industrial devel­ board room was the president of the by such a situation. But I must say I opment in South Dakota, in Illinois, in UAW, as we talked about various as­ still believe that employers should re­ Kansas, in Idaho, in Minnesota, and the pects of Sunstrand and what they are sort and will resort only as a last other States. But the combination has trying to do and not do. measure to hiring permanent replace­ been devastating. Let me add that, whether this is ments for strikers. If they turn to it as As late as 1986, the average manufac­ adopted or not, we need some changes a first resort, then I believe it does un­ turing wage per hour in the United in labor law in this country to help bal­ dercut the right to strike in this coun­ States was higher than any other coun­ ance things. I think we have to recog­ try. try. Now there are 13 countries higher nize that things have gone out of bal­ I would send a message to employers than the United States. The average ance. as well as to labor that I continue to manufacturing wage in Germany, for Up to the north in Canada, if you hope that employers will work in a co- example, is approximately $7 an hour want to organize a plant, for example, July 11, 1994 CONGRESSIONAL RECORD-SENATE 15793 you have to have a majority of the peo­ nership." That is what we have to cre­ Clearly, from all of this polling infor­ ple sign a card and pay a dollar, and it ate in labor-management relations. mation, Senate bill S. 55 does not have is automatically organized. Here, the That partnership in our country is anywhere near the majority support of process can drag out for as much as 7 · frayed, and I think this bill moves it the American people. But I think what years to get organized. I think we have back in the right direction. the polls also speak to is the attitude to modify that so that if a majority of I understand we may have a hard that our public has that can only be workers clearly evidence they want to time getting the 60 votes because of the seen as an understanding of the need have a union represent them, that we filibuster. I would just say to my for a level playing field for both the move quickly on that. This cannot friends who are inclined to vote against employee and the employer. drag out. cloture, the filibuster is a good weapon We all know that a strike causes Second, right now, even if the NLRB if it is used selectively. If we keep on hardship on both sides, giving both recognizes that a plant is organized, using it over and over and over and sides, in essence, the inc en ti ve to nego­ then the company can just negotiate over again, we may reach the point tiate. In many cases, S. 55 would give endlessly on that first contract. I think where the Members and the American strikers the power to threaten the em­ we have to say, for the first contract public will say you cannot let a minor­ ployer with a give in or get out of busi­ after a plant is organized, that they ity stop the will of the majority here ness kind of approach. This amounts to have 60 days, 90 days, to work out a endlessly. It ought to be used rarely. unilateral disarmament of employers contract, and if they do not, then there We are using it over and over. It is the at the bargaining table, and that kind is binding arbitration for that first old story of somebody crying wolf, and of imbalance has never been granted ei­ contract so we can get things going. if you cry wolf too often, pretty soon ther side in the kind of confrontation Third, there has to be reasonable people do not believe you. If we use that can often go on, and can justly be penalties for firing people who are ac­ this filibuster too often, the day will allowed to go on, between employers tive in trying to organize a company. come when it will be stopped. and employees. Federal policy should Back a few years ago, there might be a Mr. President, you may be the next promote negotiations, consultation, few hundred people at the most fired majority leader of this body. One of the and conciliation. It should not empha­ during the course of a year because questions you will have to face if you size confrontation and/or escalation in they advocated having a union in a are elected to that position is the the use of an economic weapon against company. Now, literally thousands are abuse of the filibuster. Let us be care­ an employer. fired every year because the penalty is ful. Let us not use it unnecessarily. If That has been the principle of labor a slap on the wrist. It is back pay. But we keep on using it excessively, it is law in this country historically. S. 55, if, in the meantime, you have worked going to go-no question about it. in my opinion, would largely upset for McDonald's, or anyplace else, that Again, I hope we do not use the fili­ that balance. pay is subtracted. So there is very lit­ buster to stop the majority of Members The argument is that employers hire tle penalty for an organization. of this body voting for legislation that replacements only as a last resort, and Fourth, if you violate civil rights I think is balanced, that is in the na­ I think we believe that to be the case. tional interest. laws, then you cannot get a Federal I yield the floor. Others would argue that once hired, re­ Government contract. But if you have The PRESIDING OFFICER (Mr. HEF­ placements would be there perma­ a pattern and practice of violating LIN). The Senator from Idaho. nently. General Accounting Office labor laws, you can still get a contract Mr. CRAIG. Mr. President, this after­ studies of strikes in 1985 and 1989, found from the Federal Government. We noon, as I express my opposition to that only 3 to 4 percent of strikers are should not be awarding Federal Gov­ Senate bill S. 55, I think there are replaced with workers who may or may ernment contracts to lawbreakers. It some very important statistics that de­ not get to keep their jobs at the end of just seems to me that is basic. serve to be a part of the record. a strike. These studie-s also clearly There ought to be equal access for For example, all of us have received demonstrate that two-thirds of the re­ both sides when there is an attempt to in our offices a great amount of com­ placed strikers are reinstated within organize. What happens now in some munications over this issue, an issue the year. plants, let us just say you have a plant that has been a very high profile issue Current law already protects the in Sioux Falls, SD, and in the plant in the debate around the country over basic rights of both parties in em­ there are 1,000 people. The company the last 1112 or 2 years. For example, in ployer-employee negotiations. For ex­ owners say, "Everybody has to show up my office I have had 649 contacts from ample, it is illegal to fire a striker for at 10 o'clock. We are going to have a the citizens of my State-472, to date, striking. It is illegal for an employer to movie." And then they have an have expressed their opposition to, 177 provoke a strike with the intent to antiunion movie, and they give an have expressed their support for, S. 55. bust a union. Strikers get preferred re­ antiunion lecture. That represents about 73 percent in op­ hire status when a strike is over. An In most countries, the unions would position and about 27 percent in favor. employer cannot hire a replacement then have equal access to those em­ That is quite close to a CNN/Time worker for less than the last bona fide ployees. That is not the case in our poll which found that, when our citi­ offer made to the strikers. country. That just seems to me to zens were asked if they favored Senate Strikers can be replaced only during make sense. bill S. 55 as it related to prohibiting an economic strike, a term used and And then, finally, in the area of labor employers from hiring permanent re­ defined in court decisions and the Na­ law reform, we ought to say to law placements for striking workers, they tional Labor Relations Act, and it is firms and lawyers, and specifically to spoke out by saying 60 percent "no" defined in this way: An economic lawyers who advocate violating the and 29 percent "yes." That was in 1992. strike is one over pay, benefits, and the law, that the National Labor Relations In 1991, the question was asked by usual, negotiated terms and conditions Board has the obligation of reporting Penn & Schoen, a polling firm which of employment. that to State bar associations for pos­ has done work for the AFLICIO, Strikers cannot be replaced except by sible disbarment. We should not-and "Should companies be permitted to op­ explicitly temporary workers when a this applies whether it is an advocacy erate during a strike using replace­ strike is over unfair labor practices. to labor unions or to corporations-we ment workers?" And 63 percent of the If an employer is found to have com­ should not be encouraging and tolerat­ public of our country said "yes," 25 mitted an unfair labor practice, strik­ ing people advocating breaking the law percent said "no." ers must be reinstated with back pay who should be guardians of the law, Then the poll went on to ask, "Once and interest. What these facts say very and that is our lawyers. a strike has ended, should the replace­ clearly is that current law already pro­ Senator WELLSTONE used another ments be fired?" And 54 percents said tects the basic rights of both parties in word besides "balance;" he used "part- "no", 34 percent said "yes". that a balanced playing field that 15794 CONGRESSIONAL RECORD-SENATE July 11, 1994 should be what we strive for in labor for the Journal of Labor Economics or, I should say, all policy ought to be negotiations. found that. prohibiting replacements formed by screening it through that During a strike, strikers can take produces more strikes and longer kind of statement. But I suggest, Mr. other jobs as long as they are not sub­ strikes. That is clearly not in the best President, that if we are to emulate stantially equivalent to the work being public interest; just look at the recent European labor practices and European struck. Strikers retain prestrike se­ strike we had with the truckers. · labor law, the result would be just the niority. Replacement workers must be S. 55 could destroy jobs by promoting reverse; that it could not fit; that it is represented by the same union that more strikes. One trucking company time we clearly recognize that it is the continues to represent the strikers. Re­ estimates that the recent strike will European policy of which striker re­ placement workers may not vote to de­ cost it 20 percent of its business perma­ placement is a substantial part, and certify a union until at least a year nently. That means it will never have that it would not serve our country after a strike has started, and such a the work it needs to rehire about 20 well. All we have to do is look at the vote will be delayed longer if unfair percent of its drivers. S. 55 would only economics of Western Europe to make labor practice complaints are filed and make things worse in most regards. that argument sound. must be heard. There are other circumstances this So, Mr. President-and I mean Presi­ In many cases, strikers benefit from bill does not take account of, Mr. dent Clinton, not the Presiding Offi­ compensation from union strike funds President. Due to factors of geography, cer-while you were talking about job and State unemployment insurance. the area labor market, the skills in­ creation and yet promoting the passage Once again, let me emphasize that volved, and safety knowledge con­ of S. 55, you were doing several other the American people, in all instances, cerned, temporary replacements are things that are not consistent with in labor negotiations want a balanced, often just not an option. As it is, re­ economic growth, that are not consist­ level playing field. Current law offers placements now are hired only with the ent with job creation in the way that that. S. 55 radically tips the scales prospect of long-term employment. we as a government ought to be pro­ away from the relationship that has Under current law, negotiated settle­ moting it. For example, you enacted historically brought stability and accu­ ments often could result in the firing the biggest tax increase in America's racy and responsibility in labor rela­ of permanent replacements and the re­ history, which has been and will be dis- · tions. To balance these protections of hiring of the strikers. And that seems couraging new business investment and employers, employers are allowed to to be what we have always seen. The job creation by raising corporate and stay open and stay in business during a reason, of course, is because of those individual tax rates. You signed the strike by hiring replacement workers. very individualized circumstances of family and medical leave mandate. In other words, there has to be a bal­ each case. Again, we believe that will cost the ance so they can hire replacement What I am suggesting, because of working men and women of our coun­ workers with full-fledged employee what I know of current labor law, is try a substantial number of jobs. And rights, including the possibility-! re­ that this type of legislation just does you have proposed a massive overhaul peat, the possibility-of permanent sta­ not fit in with our sense of what it of the health care system, and there tus. takes to have a growth economy, does are an awful lot of statistics out Under current law, if a strike is over not fit with the fact that it is our re­ there-and you by your own admission unfair labor practices or if an employer sponsibility to promote positive poli­ suggested it in your early days of pro­ commits such practices, permanent re­ cies that create economic growth and moting it-that it would cost in its ini­ placements are prohibited. S. 55 does development, that actually stimulate tial phase over 600,000 jobs across this not change that. and produce jobs for our economy and country and that they would not be re­ S. 55 would take away the right of do not, instead, destroy them or dam­ placed because jobs that would be cre­ good employers to stay in business dur­ age them. ated under your proposal would be in a ing a strike. Employers who are bar­ So for the next few minutes, I would different setting, in a different work­ gaining in good faith, who are dealing like to talk about some of the policies place, and a different skill would be re­ fairly and honestly with their employ­ of this administration, their promotion quired; you have proposed worker ees and who are being struck over eco­ and support of S. 55 in the context of training and unemployment insurance nomic issues, those are the good em­ jobs: Jobs and job creation. That is reforms that would cost between $3 bil­ ployers. S. 55 would be worse than the what we all really ought to be about. lion and $9 billion per year to the em­ old adage of throwing the baby out This Senate ought to cautiously screen ployer; you have asked consideration of with the bath water. Only good em­ the public policy that it promotes with a hike in the minimum wage from $4.25 ployers would lose legal rights in this the goal of economic growth and devel­ to $4.75, again a disincentive to hire instance. opment in mind. S. 55 simply does not teenagers and the poor and the inner­ I assume the best motives on the part fit in that matrix. It is not a promoter city unemployed. And you have moved of the supporters of S. 55, but the facts of that kind of a relationship that pro­ ahead in my region of the country very tell us something about its real pur­ motes economic growth. It is a pro­ aggressively with new environmental pose, and that it seems to be misguided moter of confrontation. For example, it regulation, in the instance of logging in its purpose. This bill is not about is found, as I mentioned, in Canada in Oregon, to the tune of thousands of stopping bad employers or protecting that the S. 55 approach actually pro­ jobs. You are now supporting a mining jobs. As we just said, it is the good em­ motes strikes and prolongs strikes be­ law reform that, if it went through in ployers that would get penalized. It is cause there is little or no will to settle; the form that your Secretary of the In­ not about ensuring the level playing that the employer is held hostage. terior Bruce Babbitt has proposed, field I have spoken of while protecting Our President was speaking in Eu­ could cost 35,000 to 40,000 jobs across the basic rights of the bargaining par­ rope to the economic jobs summit that the public-land West. Your logging ties. What it is about is determining was held in March of this year in De­ policies in my State will cost jobs. You the outcome in advance of a strike. It troit, MI, between the 14th and the just joined a battle with me in this is about tilting the playing field in one 15th. At that time, as he spoke in Eu­ Chamber on a policy, Mr. President, direction in advance in all cases re­ rope, he spoke of jobs and job creation, through the advocacy of your Sec­ gardless of the specific circumstances and here is what he said: retary of Energy in opposing the inte­ in each individual case. We simply must figure out how to create gral fast reactor. We were successful in In essence, it can be responsibly ar­ more jobs and how to reward people who defeating you. But that, again, would gued that S. 55 would promote strikes. work both harder and smarter in the work­ have been over 1,200 jobs across this In Canada, some provinces prohibit hir­ place. country. ing replacements and some do not. In Mr. President, we agree with that So, Mr. President, as we talk about 1990, the University of Toronto study statement. All policy ought to be used growth and economic development in July 11, 1994 CONGRESSIONAL RECORD-SENATE 15795 this country, why are we putting S. 55 men and women of our country the may only add to the difficulties cre­ up front? Why are you saying that this greater opportunity, the better work ated by an employer mandate. is a No. 1 policy or one of the legisla­ climate, and clearly the unique chance Liability is further limited as the tive priorities of your administration, for advancement and career fulfill­ number of employees falls and average along with major tax increases, along ment. wage decreases, creating a potentially with the overhaul of a health care sys­ Those are the kinds of issues that serious problem. Employee liability as tem that would cost thousands of jobs, this Senate ought to be addressing. In­ outlined in the Clinton plan provides a along with new environmental policy stead, we are stepping backwards into great incentive for cutting back em­ that will shut businesses down and a century-old attitude that somehow ployees and disincentive for hiring. turn people away from the workplace? labor deserves the upper hand and that, For example, if a company has 49 em­ Let me suggest that there are basic if this one side is granted the upper ployees with an average wage of $20,000, principles to which we ought to adhere hand, somehow all of the relationships hiring the 50th person would cost the as a policymaking body of this country are improved. History has shown that employer more than $9,000. Accord­ as it relates to job creation and a fa­ is simply not the case; that when peo­ ingly, a company with 50 employees vorable climate in the workplace for ple come to the table to negotiate, that earning an average wage of $20,000 will the men and women who are seeking table must be level. There must be save over $9,000 by dismissing 1 worker. employment in this country. equal balance on either side, equality Mr. President, the Federal subsidies Those principles, I believe, were ef­ on both sides. S. 55 would destroy that are designed to protect jobs by releav­ fectively outlined in a position paper equality. ing financial pressures placed on em­ put forth some months ago by the Her­ ployers. However, the combined effect itage Foundation. And let me for the HEALTH REFORM AND JOBS: THE of incentives for fewer workers with next few minutes state those principles CLINTON PLAN lower incomes and increased competi­ because they are the kind that we tion among employers to attract ought to be speaking to instead of ar­ Mr. CRAIG. Mr. President, several skilled workers will escalate employer­ guing about S. 55 and radically chang­ studies have been performed examining employee tension. ing the balance in the relationship and how the Olin ton health security plan In addition, to avoid expanding enti­ the negotiations between the employer would affect jobs in America. Leading tlements and thus adding to the Fed­ and the employee. economists predict that employer man­ eral deficit, the Clinton plan places dates, Government subsidies, and other Principle 1: European-style job training caps on these Federal subsidies. For ex­ and employment practices have proven in­ aspects of the Clinton plan will result ample, the Congressional Budget Office capable of keeping unemployment low or in serious wage reduction and job loss. predicts that small businesses would raising the worker's overall standard of liv­ To avoid these adverse effects, Mr. require $58 billion in subsidies under ing. President, reforms cannot place intol­ the Clinton plan in the year 2000, al­ And yet it was those types of employ­ erable burdens on employers, but rath­ er must further expand and improve though the subsidies are capped at $4.1 ment standards and European-style job billion. training programs that you proposed at the current system, allowing the mar­ ket to develop naturally. To maintain the level of Federal sub­ the job summit in Detroit, MI, March When President Clinton introduced sidies the President has promised, the 14 and 15. his health reform plan last year, his Federal Government would be forced Principle 2: High tax rates on employers administration stated that as many as into even greater deficit spending to and capital is the quickest way to insure make up the difference in cost; on the high unemployment. 600,000 people could initially lose their jobs, if everything works as planned. other hand, if the Federal Government And yet we know the tax increase of Since then, other studies have pre­ remains true to its caps and is forced last year went directly at medium- and dicted job loss anywhere from 624,000 to to" cut back on subsidies, financial pres­ small-sized businesses that are now the 3.8 million. In addition, as many as 23 sure on employers will far exceed that largest employers in our country in the million workers could experience lower predicted by the President, and job loss composite. wages, lower benefits, or reductions in will be much greater than forecasted. Principle 3: Excessive financial and bank­ hours worked. Any President who Mr. President, a large portion of the ing regulations, which restrict the amount of could stand before the American people job losses will affect small businesses capital firms can obtain, greatly limits busi­ with fewer than 100 workers, and an ness and job expansion. and advocate a policy that would put people out of work amazes me. overwhelming majority of those work­ And, once again, the kinds of rules Mr. President, employer mandates ers who would lose jobs currently make and regulations that are now pouring will obviously place burdens on many less than $40,000. In addition, job losses out of this Government, all in the employers who do not currently offer would disproportionately affect mi­ name of the environment or in the health insurance to their workers. The norities. Most of the jobs will be lost in name of better practices or certainly in President's solution to ease this new services, manufacturing, and retail the name of Federal mandates, that burden is to provide subsidies from the businesses; all States will be hit hard, say that business and Government Federal Government. with an average job loss near 1 percent ought to conduct itself in certain ways According to the Clinton health plan, of the total work force throughout the at the local level, do nothing but re­ employer contributions must equal 80 country. strict the economic climate in our percent of a "weighted average pre­ Whether the total number of jobs lost country and make more difficult the mium," and the individual employees is closer to 600,000 or 4 million, almost creation of jobs. would pay the difference between the all Americans will know someone who Principle 4: Increasing the regulatory bur­ 80-percent employee contribution and will have lost a job as a direct result of den and mandating numerous employee ben­ the actual premium. However, the pro­ the Clinton health security plan. efits is a recipe for job destruction. posal also places limits on the percent­ In response to this projected job loss, That I just spoke to, like the Family age of the payroll spent on health in­ the President claims his health secu­ and Medical Leave Act-again, a job surance premiums. rity plan will create new jobs. How­ destroyer, very destructive in the No employer will be required to pay ever, this will not offset the initial workplace. more than 7.9 percent of the payroll; if shock of job loss. Jobs will not be re­ Principle 5: Sustained job growth results health premiums exceed this amount, placed as soon as they are lost. Em­ from competitive, efficient industries that the Federal Government will make up ployers are often quick to recognize are free of excessive Government inter­ the difference. This is the essence of savings opportunities by releasing ference. the President's Federal subsidies. workers, but corporate expansion, on Those are the industries in 21st cen­ But the regulations are more com­ the contrary, is generally gradual. No tury America that offer the working plex than this, and Federal subsidies wise businessperson welcomes possible 15796 CONGRESSIONAL RECORD-SENATE July 11, 1994 liabilities, and additional workers in There being no objection, the mate­ suggest that any changes to this law are an unproven system appear to be ex­ rial was ordered to be printed in the needed or even wanted by the American peo­ actly that. RECORD, as follows: ple. In fact, a recent Gallup poll shows that 57 percent of Americans oppose a ban on per­ In addition, the promised new jobs [From the Christian Science Monitor, July will affect a different group of workers. manent replacement workers. 11, 1994] The current debate in Congress reflects Job losses will affect a working popu­ STRIKE BILL COULD DESTROY CRITICAL these facts. In an effort to save the Strike lation in services, manufacturing, and WORKPLACE BALANCE Bill, proponents of the legislation are search­ retail; new jobs will appear in health (By Howard Jenkins and John A. Penello) ing for an acceptable compromise. However, professional, policy, and administra­ For many years we served as representa­ none of the proposed compromises improve tive fields. tives of the federal government in various the original legislation. Any Strike Bill Mr. President, we should be protect­ capacities with the National Labor Relations compromise would have the same result as ing rather than jeopardizing jobs. The Board (NLRB). We were appointed board the original legislation-risk free strikes. Consumer Choice Health Security Act members under both Republican and Demo­ Under the most discussed compFomise pro­ (S. 1743), which I cosponsor, will do cratic administrations. Together we rep­ posal-a moratorium on hiring replace­ this. This bill is designed to guarantee resent more than 100 years of experience in ments-strikes would be limited to durations high quality, accessible health care labor-management relations. of four to 10 weeks. This would avoid few While we did not always agree on the out­ strikes, since most strikes last less than 10 services. weeks, and would do little to mitigate the I am particularly pleased with how come of cases brought before the NLRB­ member Jenkins's decisions were more often devastating economic impact of the original this plan would enable us to move to­ pro-union and member Penello's dissents bill. ward achieving universal access and were more often pro-employer- we agree Economic strikes were never intended by comprehensive coverage. Refundable that the Strike Bill would destroy the core Congress to be risk-free. And the right to tax credits, based on the percentage of principle of balance in collective bargaining. strike was never guaranteed to be successful gross income spent on medical serv­ The Strike Bill, which has passed the in forcing an employer to accede to a union's ices, and the introduction of medical House and is expected to be voted on today bargaining demands. To the contrary, the savings accounts are two features of by the Senate, would prohibit employers ·core principle of our national labor law is a this plan which will dramatically im­ from defending their businesses by offering balance of rights and obligations, risks and prove access without taking the permanent jobs to replacement workers dur­ reward, which, through the dynamics of col­ ing a strike over economic issues such as pay lective bargaining, drives parties closer to­ choices from the consumer. raises and benefits. gether toward labor contracts and peacefully Mr. President, we can reform our Proponents of the Strike Bill claim that negotiated settlements. health care system without the serious employers' use of permanent replacement For these reasons and based upon our long side-effects of job loss and decreased workers during an economic strike is a re­ experience in administering federal labor wages. In supporting health care re­ cent phenomenon. This simply is not true. policy we must now speak out against the form, my goal has been to empower The National Labor Relations Act, enacted strike-replacement legislation-in any form. people, to let them choose their own in 1935, provided a delicate balance that al­ We believe the Strike Bill would imperil fu­ health plans and doctors. Individuals lows unions to strike over wage demands and ture decades of improving cooperation be­ are certainly better able to determine allows employers to defend their businesses tween labor and management and return us their needs than is the Federal Govern­ by hiring permanent replacement workers. to the disruptive labor disputes of previous The striker-replacement legislation would decades. ment. Strikes in the US are at an all-time low. In We do not need extensive Govern­ destroy this core principle of United States labor law, which has been consistently sup­ 1974 there were 424 strikes involving 1.8 mil­ ment intervention to provide universal ported by Democratic and Republican presi­ lion workers and 32 million lost workdays, health care. On the contrary, excessive dents and federal courts for over half a cen­ compared with 1993, when there were only 35 Government involvement only in­ tury. major work stoppages involving 182 fl00 em­ creases bureaucracy, reduces quality of In our experience, the balance of power in­ ployees and 4 million lost workdays. services, and weakens a vibrant private herent in these countervailing economic With the incidence of strikes at a record business sector. The Federal Govern­ weapons is what has made the system work. low, it is difficult to understand why Con­ ment functions best when simply devel­ Take away either the right to strike or the gress would pass legislation that would actu­ oping the framework in which the mar­ right to operate with permanent replace­ ally increase the number of strikes in Amer­ ket can work, and health care reform ments, and the other party will be sure to ica. should focu;:; on building this founda­ overreach. We fear the striker replacement legislation will encourage confrontation and [From the Heritage Foundation tion. " risk-free" strikes, where economic strikers Backgrounder, Mar. 11, 1994] Mr. President, I ask unanimous con­ could make unreasonable demands and shut PREPARING FOR THE " JOBS SUMMIT" : THE sent that the following materials be down employers with no risk of their own. FIVE PRINCIPLES OF JOB CREATION printed in the RECORD: Some contend that the system is not bal­ INTRODUCTION "Strike Bill Could Destroy Critical anced, that permanent replacement of eco­ Workplace Balance"-an op-ed in to­ nomic strikers is the equivalent of being Leaders from the major industrialized day's Christian Science Monitor, by fired. Again, this isn't true. Even so-called countries are scheduled to meet in Detroit, two former members of the National " permanently replaced" strikers have con­ Michigan, on March 14-15, at the request of tinuing rights to reinstatement to all avail­ President Clinton, to discuss the causes of Labor Relations Board with more than the persistently high levels of unemploy­ 100 years experience, between them, in able future jobs. The NLRB developed ade­ quate safeguards for economic strikes, one of ment in their countries. Announcing the employer-employee relations; which puts employers under an affirmative goals of the summit in Europe this January, "Preparing for the 'Jobs Summit': continuing obligation to first offer jobs to President Clinton declared that, " We simply The 5 Principles of Job Creation"-a unreinstated economic strikers on a pref­ must figure out how to create more jobs and Backgrounder by the Heritage Founda­ erential basis before hiring new employees. how to reward people who work both harder tion; Furthermore, the actual number of work­ and smarter in the workplace." 1 "Why Employer Mandates Hurt ers replaced is minute. A Bureau of National The President is right to focus on how to Workers"-a Brief Analysis by the Na­ Affairs study found nearly 40,000 economic create more jobs in this country. Although tional Center for Policy Analysis; strikers were replaced in 1991-1992, out of a he boasted during his State of the Union ad­ "F.Y.I.: The Jobs Impact of Health US labor force of 125 million. That's less dress that 1.6 million jobs were created in 1993, job growth, in fact, is much weaker Care Reforms"-a Heritage Foundation than .03 percent. Nearly 70 percent of these 40,000 strikers were later reinstated to their than normal this long after a recession. Backgrounder; Since World War II, total employment A white paper prepared by the Na­ jobs. Also, the number of strikes in the US has been decreasing since 1947, the first year growth has averaged 9.2 percent 33 months tional Federation of Independent Busi­ the US Department of Labor's Bureau of after a recession. But since the bottom of the ness on the President's proposed Labor Statistics began to maintain strike 1990-1991 recession, total employment in the "Health Security Act"; and data. United States has climbed by just 2.5 per­ "Enraging Species Act"-a Wall Current collective bargaining is a fair and cent.2 President Clinton would do well to Street Journal editorial from April 19, reasonable system that has worked for over 1994. 50 years. We see no compelling evidence to 1 Footnotes at end of article. July 11, 1994 CONGRESSIONAL RECORD-SENATE 15797 ponder the anemic job growth in Europe, be­ Principle #5: Sustained job growth results tion, "A single 40-year-old previously em­ cause European firms are encumbered with from competitive, efficient industries that ployed at the average production worker's costly mandates and taxes on employment are free of excessive government inter­ wage would get benefits equal to 59% of pre­ that have discouraged hiring and held back ference. vious earnings in France, 58% in Germany employment growth. The President should Only by talking bluntly to the European and 70% in the Netherlands." 12 These bene­ recognize that his Administration's policies allies and shunning "solutions" to the con­ fits can be collected for many years as well. are repeating the mistake of the Europeans, tinuing problems of unemployment that will Hence, although the broad safety net avail­ and contributing to slow growth of earnings only slow wage growth, can President Clin­ able to displaced workers seems compas­ and employment in the United States. Fo~ ton help the industrialized world to correct sionate on the surface, it actually creates example, the Administration has: its economic ills. Adopting European-style disincentives to full employment and a pro­ Enacted the biggest tax increase in Amer­ employment policies, on the other hand, will ductive workforce. Absenteeism, for exam­ ican history, which will discourage new busi­ lead only to European-style results. ple, ran at 9 percent in Western Germany in ness investment and job creation by raising 1992, 8.2 percent in France, and 12.1 percent UNDERSTANDING THE FIVE PRINCIPLES OF JOB in Sweden. By way of comparison, the U.S. corporate and individual tax rates. GROWTH Signed the mandated Family and Medical rate is only 3 percent.13 Principle #1: European-style job training Also overrated is the German job training Leave Act, which will raise labor costs and and employment policies have proven in­ force employers to be far more selective system, which Clinton and his Labor Sec­ capable of keeping unemployment low or retary, Robert Reich, seek to emulate. While about whom they hire, since they are re­ raising the worker's overall standard of liv­ quired to offer certain employees more time the German educational system focuses on off. ing. highly technical training for its future work­ Proposed a massive overhaul of the health During his speech announcing the jobs ers, the U.S. system focuses on generalized care system, which would raise labor costs summit, President Clinton declared, "We training. Some academics, such as Lester by mandating that employers cover workers. Americans have a lot to learn from Europe Thurow of MIT argue that the German ap­ in matters of job training and apprentice­ proach has created a superior workforce According to Lewin-VHI, one of the coun­ ship, of moving our people from school to try's leading health care econometrics firms, which enjoys a better standard of living. But work into good-paying jobs."7 Undoubtedly, the Clinton health plan would mean that a recent comparison of the two systems by among firms now providing health insurance, Americans have much to learn from the Eu­ Kenneth A. Couch, of Syracuse University, 19.9 percent would see cost per employee ris­ ropeans, but not about their employment disputes this belief. Couch concludes that, policies. "an apprenticeship program by itself is un­ ing $500-$1,000 per year, 51.6 percent would The true effects of the European policies likely to have widespread positive effects ei­ face cost increases per employee of $1,000- which the President and others glorify are ther on economic measures such as employ­ $2,500, while another 15.2 percent would face best illustrated by the case of Germany. Ger­ ment or indirectly related social prob­ costs per employee of more than $2,500.3 man workers enjoy roughly six weeks paid lems." 14 For example, comparing German Proposed worker training and unemploy­ and American 24- to 33-year-old high school ment insurance reform, that would cost be­ vacation each year, the shortest work week of any major industrial nation, high wages graduates without further education, Couch tween $3 billion and $9 billion per year.4 (averaging $26 an hour), and extensive health found roughly the same percentage were em­ Considered a hike in the minimum wage ployed (with actually more Americans than from $4.25 to $4.75 an hour, which would fur­ benefits mandated by the government. But as Ferdinand Protzman of The New York Germans possessing manufacturing jobs), ther increase the disincentive to hire teen­ more of the Americans in the sample group age and poor, inner-city unemployed individ­ Times notes, "Unfortunately, [the German system] no longer works. Instead, the social were married, and slightly more Americans uals. had children. Likewise, from 1983 to 1988, Moved ahead with an ambitious environ­ contract that once made Germany's econ­ omy a model of stability has helped erode Couch found American workers out­ mental regulatory agenda ranging from glob­ performed their German · counterparts over­ al warming to new logging policies.s the nation's competitiveness as it struggles to recover from the worst recession in post­ all. America experienced average annual em­ These policies signal an apparent mis­ ployment growth during the period of 2.4 per­ understanding of the employment and job war history."B Like many of its European neighbors, Ger­ cent, versus Germany's meager 0.4 percent. policies that led to the creation of over 20 And real GDP growth over the same period million new jobs in the 1980s.6 Each of these many is struggling with what has come to be known as "Eurosclerosis," which signifies a averaged 3.9 percent for America and 2.3 per­ new programs or proposed policies add to the cent for Germany. Other European countries three principal governmental barriers that stagnant growth environment. As the chart on the following page shows, adherence to have fared no better relative to America. discourage employers from creating new If American policymakers choose to move jobs: taxes, credit barriers, and regulatory this model has brought the European Union toward a more technical-based educational and mandated benefit burdens. These bar­ (EU) slow growth and high unemployment. system, the German approach thus is not the riers, which have steadily increased over the Unemployment has averaged almost 10 per­ obvious model to follow. As Couch notes, past few years in the United States, have dis­ cent over the past decade in the major Euro­ "Emulating the German approach may in couraged business expansion and increased pean countries, and is projected to average fact five us an educational system that will the cost of hiring new workers. Failure to re­ 12.1 percent in 1994 for the members of the not perform better but will cost more than duce these barriers or-worse still-the im­ EU. At the end of last year, approximately 32 our current one." 1s position of new barriers, means that America million Europeans were jobless, which is Following the Failed Model. European­ will become a slow-growth economy. roughly equivalent to the combined style job training and employment policies President Clinton should realize that high workforces of Spain and Sweden.9 Overall, which have been implemented in America wages and mandated benefits are ruining the the U.S. rate of employment growth has far have met with failure. Public employment European economies and leading to high un­ outstripped Europe. Observes C. Fred programs have proven to be net job destroy­ employment rates. In fact, several European Bergsten, director of the Institute of Inter­ ers, since the amount of money required to countries and Japan are now trying to lower national Economics, "The U.S. has kept create a public sector job is typically several their labor costs and dismantle their gener­ labor costs down and created 40 million new times that of private sector job creation.lG A ous "safety nets." Instead of continuing to jobs over the past 20 years. In Europe, wages recent study of public transit investment by add more burdens on employers, President have risen about 60 percent during that span John Semmens of the Chandler, Arizona­ Clinton should take the opportunity of the but only 2 or 3 million jobs have been cre­ based Lassez Faire Institute, notes that for summit to advocate five simple principles of ated."1o the $61.5 billion invested since 1965, only job creation: Peter Gumbel of The Wall Street Journal 800,000 jobs were created. If that same Principle #1: European-style job training maintains this Eurosclerosis is caused by a amount of money had been invested by pri­ and employment policies have proven in­ "tangle of labor regulations and rising costs vate business through a corporate tax cut, 8 capable of keeping unemployment low or for employers [which] acts as a major dis­ million jobs could have been created.l7 Like­ raising the worker's overall standard of liv­ incentive to job-creation-and a powerful in­ wise, Semmens found that 13 million to 20 ing. centive to moving production elsewhere." 11 million jobs would have been created if the Principle #2: High tax rates on employers Not surprisingly, perhaps, some 30 percent of $61.5 billion had instead been devoted to a and capital is the quickest way to insure business surveyed recently by the German capital gains tax cut, or an expansion of In­ high unemployment. Chamber of Commerce say they are consider­ dividual Retirement Account investment in Principle #3: Excessive financial and bank­ ing shifting production to a more hospitable Treasury bills or common stocks.18 Most im­ ing regulations, which restrict the amount of business environment. portant, instead of producing the high-wage, capital firms can obtain, greatly limit busi­ Beside the European burdens on employers well-skilled jobs the current Administration ness and job expansion. which discourage job expansion, employment calls for so frequently, public programs only Principle #4: Increasing the regulatory bur­ is also discouraged through extensive unem­ provide low-wage, low-skill, temporary em­ den and mandating numerous employee ben­ ployment insurance programs. Explains ployment, which often costs taxpayers dear­ efits is a recipe for job destruction. David R. Henderson of the Hoover Institu- ly in the process. 15798 CONGRESSIONAL RECORD-SENATE July 11, 1994 Further, it cannot be argued that govern­ for immediate purchases. But foregoing cur­ Anderson Enterprise Group revealed that 38 ment sponsored employment training poli­ rent consumption to invest assets represents percent of all businesses surveyed were un­ cies provide European citizens with greater an increasingly unattractive option if there­ able to fulfill their capital needs. Perhaps purchasing power and a higher standard of wards of profitability springing from invest­ more important, 58 percent of businesses living than Americans. Purchasing power ment are penalized with higher tax rates. that were in their first three years of oper­ parity, which is the most accurate measure Moreover, earnings in the U.S. are still pe­ ation have been unable to fulfill their capital of comparative consumer power, shows that nalized twice through taxation, first at the needs. The same survey noted that, due to the U.S. consumers have a clear advantage corporate level and then later at the individ­ the lack of capital, 39 percent of the sur­ over foreign citizens (see table at end of arti­ ual level. Therefore, if an investor had $10,000 veyed businesses were unable to expand oper­ cle). Following Europe's poor example, to spend or invest, spending currently would ations and almost 20 percent of them reduced therefore, likely will lead not only to lower more than likely represent a more attractive employment.23 Limited access to capital has growth and fewer jobs, but also to a lower choice than investing. also made it more difficult for firms to pur­ standard of living for American citizens. Taxes raise the cost of capital for indus­ chase their own equipment, forcing an in­ The "Europeanization" of American Labor trial equipment and machinery. As the creasing number of small businesses to lease Market. Despite the failure of the European American Council for Capital Formation equipment, often at very high interest system to sustain employment and a higher (ACCF) reports, "Recent research rates.24 standard of living, America's federal labor confirm[s] ... that the volume of invest­ In response to this problem, the Clinton market policy is being molded to resemble ment in equipment is a critical factor in the Administration has called for new banking German, French, and other European mod­ pace of economic growth and development. regulations governing how loans are made. els. This "Europeanization" of the American [I]nvestment in equipment is perhaps the The Administration hopes to boost the num­ labor market policy threatens to undermine single most important factor in economic ber of loans made through the Small Busi­ industrial competitiveness, increase budg­ growth and development." 19 Yet, ACCF ness Administration to "make SBA more re­ etary strains, and lower the average work­ points out that despite the beneficial effects sponsive to those industries with the poten­ er's standard of living. of the tax-reducing Economic Recovery Act tial for creating a higher number of jobs, Principle #2: High tax rates on employers of 1981 on such investment, tax policy in the those involved in international trade, and and capital is the quickest way to insure following years became heavily biased those producing critical technologies."25 But high unemployment. against such investment incentives. The tax this is unlikely to be a solution to the under­ To hire additional workers, employers need acts of 1982 and 1986, which raised taxes, each lying problem of restricted credit growth. capital. Capital fuels job creation by allow­ resulted in an increase in the cost of capital The SBA loan program accounts for only a ing employers to invest in the various means for equipment as investors found such oppor­ small percent of capital for new firms. and in of production, including land, equipment, tunities less attractive. Largely as a result any case tends to funnel dollars to favored factories, new technologies, and labor. Cap­ of these high-tax policies, the total cost of businesses rather than the best investments. ital can be acquired in one of two ways: sav­ capital for manufacturing equipment in­ Clinton's new plan to reform banking regu­ ing it from profits or borrowing it. Examin­ creased by 22.9 percent from 1981 to 1986. The lation through agency consolidation will not ing each method of capital accumulation in­ most recent revisions of the tax code are help either. Monopolizing regulatory power dicates why U.S. employers are finding it in­ likely to further discourage investment, and in the hands of one agency will make it easi­ creasingly difficult to obtain the fuel for job thereby increase barriers to expansion and er for heavy-handed and manipulative poli­ creation. job creation. cies to be implemented, thereby raising the The Current Tax Environment. Past recov­ Hence, the potential for long-term job cre­ regulatory burdens faced by banks. Lawrence eries show that the U.S. economy is perform­ ation in the current tax environment is not Lindsey, a member of the Board of Governors ing below typical levels. Whereas employ­ encouraging, since entrepreneurs are less of the Federal Reserve System, says, "Mo­ ment in the previous post-war recoveries able to entice investors to risk their money nopoly regulation is a bad idea. [It] will averaged 9.2 percent 33 months after the end on new business ventures. Because taxes cre­ greatly harm both the banking industry and of the recession, the current recovery has ate disincentives to invest in businesses, cap­ the economy, and lead to an unfortunate only seen approximately 2.5 percent growth ital for future job creation is being produced politicization of bank regulatory policy." 26 over a similar period of time. One factor that at a lower rate. Principle #4: Increasing the regulatory aided recoveries during the early 1960s and Principle #3: Excessive financial and bank­ burden and mandating numerous employee early 1980s was a reduction in tax rates. ing regulations, which restrict the amount of benefits is a recipe for job destruction. Unfortunately, the most recent recession, capital firms can obtain, greatly limit busi­ The number of regulations and mandated which followed the 1900 tax hikes, has been ness and job expansion. benefit requirements that employers are followed by tax rate increases. The Clinton In recent years, the term "credit crunch" forced to comply with has grown steadily in tax plan adopted by Congress last year in­ has been coined to refer to how difficult it recent years. Estimates of the total cost creased taxes on business and investment. has been for many businesses to obtain that regulations impose on the economy The corporate tax rate on business, for ex­ loans. One reason this crunch has occurred range from a low of $615 billion to a high of ample, was raised from 34 percent to 36 per­ has been the sharp rise in banking regulation $1.7 trillion.27 This burden translates into cent. Likewise, top individual rates moved in recent years. In addition to $10.7 billion in millions of foregone job opportunities.2B For up from 31 percent to as high as 42.5 percent. general regulatory compliance costs in 1992, example, Michael Hazilla and Raymond Kopp This is important since approximately 80 bankers face costs from lost interest pay­ have estimated that environmental regula­ percent of small businesses pay taxes under ments on reserves they are required hold at tions reduced aggregate employment by 1.18 the personal income tax code. The excessive the Federal Reserve, and deposit insurance percent as of 1990,29 which means over one taxation of capital gains also continues. The premiums.20 million jobs would have existed without the capital gains tax on individuals currently The Effects of the Credit Barrier. How do regulations. 30 stands at 28 percent, up from 20 percent in these trends affect job creation? This regu­ · Regulation and mandated benefits take 1986. As the chart on the following page latory burden has had a restrictive effect on their toll indirectly. When the government shows, before this rate jump, new business credit growth in recent years. The American increases this burden on the private sector incorporations had risen steadily throughout Bankers Association observes that over this by promulgating new rules, firms must ad­ the 1980s. After the increase, start-ups fell same period, more than 40 major federal reg­ just their behavior accordingly. This adjust­ immediately and sharply. The aggregate ef­ ulations affecting bank operations were pro­ ment process may require an increase in fect of these taxes is a huge barrier to job mulgated.21 Although estimates of the regu­ worker training, paperwork requirements, or creation, as capital shifts from the hands of latory burden on banks are not available for even retooling. Regardless of the adjustment investors to the government. previous recessionary periods, there is no method, costs will be incurred. The costs of The Effects of the Tax Barrier. High taxes doubt that the number of regulatory restric­ adjustment directly affect the firm's profits reduce investment in businesses and slow job tions and burdens the banking industry faces since a greater than expected amount of growth by encouraging individuals and firms have increased significantly over the past 20 earnings will be exhausted in compliance to seek alternative investments with a more years. Declares the American Bankers Asso­ measures. In addition there may be extra profitable return on their dollar. It should be ciation: "Hog-tying the banking system witli costs associated with hiring new workers. As no surprise that America's current savings regulatory red tape means two things-more a result, firms will try to pass the costs of and investment rates are lower than those expensive bank credit and less of it." 22 adjustment on to their consumers, or, if that required for robust, long-run economic Just as higher taxes restricted job creation is not possible due to competitive market growth. This is due directly to the trade-off by holding back entrepreneurs, so too has conditions, scale back future production, in­ investors face when contemplating increas­ the credit crunch. Without easy access to vestment, or new hiring. If the new compli­ ing consumption versus saving or investing. credit, American firms are forced to post­ ance and adjustment costs are sufficiently Increasing consumption carries little pen­ pone plans for job expansion. A 1993 survey of high, firms may scale back existing produc­ alty; few taxes or other disincentives exist small and mid-size businesses by the Arthur tion and lay off workers. July 11, 1994 CONGRESSIONAL RECORD-SENATE 15799 The Effects of the Regulatory and Man­ Act, Ruth Stafford, president of the Kiva Step #6: Reform America's archaic finan­ dated Benefits Barrier. Several studies point Container Corporation, says, "Fifty is the cial and banking laws. Financial restrictions to the job-destroying effect of the regulation magic number." 35 Her firm, like many oth­ such as the McFadden Act of 1927, the Bank and mandated benefits explosion that has ers, plans to hold employment stable just Holding Act of 1956, and the Glass-Steagall taken place in recent years.31 With the pas­ under the 50 employee barrier using more Act of 1933 retard bank stability and expan­ sage of mandates included in the Clean Air temporary or part-time workers. This phe­ sion and, therefore, limit the credit opportu­ Act Amendments of 1990, the Americans nomenon is already being seen: according to nities they can offer to businesses. Eliminat­ With Disabilities Act of 1990, and the Civil the Bureau of Labor Statistics, temporary ing these impediments to financial efficiency Rights Act of 1991, and the increases in the employment grew by 20 percent · in 1993, up would allow businesses to take advantage of minimum wage in 1990 and 1991, the burdens from 6 percent in 1990. expansionary opportunities by borrowing on employers have ballooned. Principle #5: Sustained job growth results needed capital. The dramatic rise in the minimum wage from competitive, efficient industries that Step #7: Overhaul antiquated antitrust alone, from $3.35 in 1989 to $3.80 in 1990 and are free of excessive government inter­ laws. America's outdated antitrust laws, $4.25 in 1991, helped push teenage unemploy­ ference. such as the Sherman Antitrust Act of 1890 ment to the highest rate in a decade. If the Steering America onto a path of greater and the Clayton Antitrust Act of 1914, make Clinton Administration proceeds with plans job creation, low unemployment, and a high­ it difficult for firms to enter into joint pro­ for a 50 cent hike in the minimum wage, and er standard of living will require a shift of duction alliances that could raise industrial the labor market adjusts as it has in the current American economic policy. The efficiency and create new job opportunities. past, there is likely to be an increase in the three primary governmental barriers to job Step #8: Pass product liability reform and teenage unemployment rate of between 0.5 expansion-high taxes, limited credit other tort reform legislation. Currently, percent and 3 percent. through irrational financial regulations, and America's tort system saps private sector Another burdensome employer mandate excessive regulations and added mandated entrepreneurialism, hinders product innova­ will be the "employer trip reduction" re­ benefits---all must be corrected. Adopting the tion, and threatens the continuation of nu­ quirement of the Clean Air Act. Starting European system would be a mistake. Amer­ merous businesses. Without reforms limiting this year, this will require employers in nine ica should instead learn from history that punitive damages and streamlining costly metropolitan areas to reduce the number of where goods, services, labor, and wages have cost procedures, an increasing number of employees driving to work. Although no em­ been allowed to move or fluctuate freely, jobs will be placed at risk. ployment loss estimates are available, over prosperity, entrepreneurship, and high em­ Step #9: Continue to push for trade liberal­ 12 million employees will be covered by the ployment have been the result. ization globally while eliminating domestic act, making a difficult to believe that some To put American back on the high-employ­ barriers to free trade. While the job gains jobs will not be affected.32 ment, high-wage track, President Clinton will result from the wise actions already Whatever this intentions, civil rights em­ should take several specific and immediate taken of passing the North American Free ployment mandates also take their toll. steps to ensure American industries remain Trade Agreement (NAFTA) and General Peter Brimelow and Leslie Spencer of Forbes strong and competitive: Agreement on Tariffs and Trade (GATT) recently estimated the total cost of civil Step #1: Lower tax rates on businesses and agreements, further efforts should be made rights regulation to be $236 billion, which capital. The effects of high tax rates on em­ to expand free trade agreements while lower­ translates into a loss of 4 percent of GNP.33 ployers and capital are direct and damaging. ing the domestic barriers to imports. The Family and Medical Leave Act of 1993, Lowering both corporate tax rates and the Step #10: Encourage the use of privatiza­ which grants employees as much as 12 weeks capital gains tax rate (while indexing it for tion and contracting out whenever possible. unpaid leave each year, discourages job cre­ inflation) would provide an immediate and Privatization and contracting out not only ation. Because many employers will not be strong job stimulus by reducing the cost of insure that services are delivered more effi­ able to absorb the high costs and lost output hiring workers and unlocking the capital ciently for less money, they also allow pri­ resulting from mandatory worker leave, the needed for business expansion. vate firms to raise capital and re-invest in policy will have the unintended consequence Step #2: Reject all attempts to establish a more productive, long-term private sector of encouraging struggling businesses not to European-style employment policy, espe­ jobs. Vice President Gore's National Per­ hire individuals who might take advantage cially expensive job training programs. High formance Review failed to tap such methods of the leave policy. The SBA has found the wages, sustained employment, and increased of real government reform.37 Undertaking overall costs of this act to total as much as business activity should be guiding goals of such measures would encourage increased $1.2 billion.34 public policy. Mandating them should not. private sector employment while dem­ Other employer mandates that currently Costly and ineffective job training programs onstrating that the Administration is seri­ burden the labor market include the health should be ruled out as job-creating options. ous about changing the way Washington care requirements found in the Consolidated Americans need only look at the failure of works. Omnibus Budget Reconciliation Act of 1985 European programs to understand why such CONCLUSION (COBRA), the prevailing wage requirements an approach is a mistake. Such programs re­ The Jobs Summit affords President Clin­ of the Davis-Bacon Act, and workers and un­ quire massive amounts of public spending for ton the opportunity to outline the fun­ employment compensation payments. These the small number of jobs which are created. damental principles of job creation to the in­ factors create added disincentives to job ex­ Step #3: Cap federal spending. This will aid dustrial nations of the world. Unfortunately, pansion since taking on an additional worker job creation by increasing the amount of pri­ many nations, specifically in Europe and means steadily higher employer payroll bur­ vate savings available for business invest­ more recently the United States, have for­ dens. ment. gotten that low taxes, easy access to credit, Employment Thresholds. In recent years, Step #4: Enact comprehensive regulatory rational regulations, and vigorous exposure many legislators have come to realize that reform. The "hidden tax" of regulation and to competition, are the foundation for a added regulation and mandates have a de­ increased mandated benefits directly in­ healthy, job-creating economy. structive effect on job growth, particularly crease the cost of employing workers. The The most important lesson that President in the small business sector. But, instead of President and Congress should establish a Clinton can bring back from Detroit is that attempting to craft more sensible policies or federal regulatory budget and estimate the government policies that increase the cost of deregulate where possible, they tend to re­ employment impact of regulations before hiring people mean that fewer people will be spond to small business concerns by adopting they take effect. The regulatory budget hired. employment thresholds. Employment would place a limit on the total cost that is ADAM D . THIERER, thresholds exempt smaller-sized businesses imposed on the economy each year by new Policy Analyst. from certain regulations. For example, the federal regulations. When the budget had FOOTNOTES Americans With Disabilities Act currently been passed, no new regulations could be im­ exempts all firms with fewer than 25 employ­ posed-unless other rules were withdrawn. 1 David R. Sands, " Clinton Announces Plans for Jobs Summit," The Washington Times, January 11, ees from the regulation; this will be lowered Step #5: Adopt rational health care reform 1994, p. B7. to cover firms with fewer than 15 employees based upon consumer choice and not new em­ 2 Daniel J. Mitchell, "The Budget and the Econ­ after July 26, 1994. Other examples include ployer mandates. No new policy action omy: A First Year Assessment of the Clinton Presi­ the Family and Medical Leave Act, which threatens to do as much damage to the labor dency," Heritage Foundation Backgrounder Update exempts business with fewer than 50 employ­ market in the immediate future as does em­ No. 213, February 7, 1994, p. 2. ees and the Plant Closing Law, which ex­ ployer-based health care mandates. While re­ 3Lewin-VHI, The Financial Impact of the Health Se­ empts businesses below 100 employees. form is needed, it should not simply push the curity Act (Fairfax, VA: Lewin-VHI, 1993). 4 David R. Sands, "Hill Republicans Criticize Clin­ These thresholds have the unfortunate cost of comprehensive health coverage onto ton's Jobless Measure," The Washington Times, Feb­ side-effect of discouraging employers near employers through expensive new payroll ruary 23, 1994, p. B8. the threshold from hiring new employees. taxes. Accomplishing reform in this manner s Federal Register pages, a rough estimate of the Pointing to the Family and Medical Leave will result in the loss of millions of jobs.36 overall amount of regulatory activity, ran 60,950 for 15800 CONGRESSIONAL RECORD-SENATE July 11, 1994 1993, the highest level since the Carter Administra­ age Foundation Backgrounder No. 974, January 13, may already be covered under some other tion left office in 1980. 1994. policy. In addition, employers may not be ssee Daniel J. Mitchell, " Tax Rates, Fairness, and 37 See Scott A. Hodge and Adam D. Thierer, " The able to substitute lower wages for health in­ Economic Growth: Lessons from the 1980's," Herit­ National Performance Review: Falling Short of Real age Foundation Backgrounder No. 860, October 15, Government Reform," Heritage Foundation surance for some employees because of the 1991, p. 2. Backgrounder No. 962, October 7, 1993. minimum wage law and other legal barriers. 7 Sands, " Clinton Announces Plans . .., " op. cit. NOTE.-Nothing written here is to be construed as In that case, workers would simply lose their &Ferdinand Protzman, " Rewriting the Contract necessarily reflecting the views of The Heritage jobs. for Germany's Vaunted Workers," The New York Foundation or as an attempt to aid or hinder the Moreover, to the extent that the cost of Times, February 13, 1994, p. F5. passage of any bill before Congress. mandated health insurance is not paid for by 9Stella Dawson, " Global Jobs Summit Delayed U.S. Citizens Still Top World in Purchasing lower wages, it is a tax on capital. Taxes on Amid NAFTA Battle," The Reuters European Business capital reduce the amount of capital, which Report, November 4, 1993. Power in turn reduces the demand for labor 10 Quoted in Protzman, op. cit. [Per capital gross domestic product] 11 Peter Gumbel, " Western Europe Finds That It's Mandates Under the Clinton Plan. The Pricing Itself Out of the Job Market," The Wall United States ...... $22,130 Clinton plan's mandates would be especially Street Journal, December 9, 1993, p. Al. , Switzerland ...... 21,780 onerous because: 12David R. Henderson, " Eurosclerosis Spreads to Germany ...... 19,770 Workers such as teenagers, part-time Our Shores," The Wall Street Journal, October 14, Japan ...... 19,390 workers, two-worker families and elderly 1993, p. Al6. France ...... 18,430 workers on Medicare would have to pay 13 Protzman, op. cit. again for coverage they already have; 14 Kenneth A. Couch, " Germans and Job Training, United Kingdom...... 16,340 Education and Us," The American Enterprise, Novem­ NoTE.-Data are for 1990. Figures represent Pur­ The Clinton plan's requirement of commu­ ber/December 1W3, p. 18. chasing Power Parities, which take into account ex­ nity rating would double the cost of health 15 Ibid. , p . 13. change rates, inflation, and other currency dif­ insurance for younger workers, who tend to 16 See Edward L. Hudgins, Ph.D., " Why Infrastruc­ ferences. place the lowest value on health insurance; ture Spending Won't Jump Start the Economy," Source: United Nations World Development Re­ The plan would impose a disguised 7.9 per­ Heritage Foundation Memo to President-Elect Clinton port, 1993. cent tax on labor income; No. 9, January 15, 1993. Although there are subsidies for small 7 LEGALLY REQUIRED BURDENS EMPLOYERS FACE 1 John Semmens, " Government Investments Yield businesses with low-income employees, the Poor Results," Heartland Institute, A Heartland Per­ Payroll Taxes: taxes needed to fund these subsidies also spective, October 18, 1993, p. 2. [X] Social Security (FICA) would cost jobs. 1BJohn Semmens, " Federal Transit Subsidies: How [X] Unemployment Government Investment Harms the Economy," The Freeman, F ebruary 1994, p. 71-75. Other Taxes: ESTIMATED JOB LOSS FROM THE CLINTON HEALTH PLAN 19Mark Bloomfield and Margo Thorning, Ph.D., [X] Corporate Income Tax " The Impact of President Clinton's Tax Proposals [X] Sales Taxes Study Probable Job loss Potential Job loss on Capital Formation," American Council for Cap­ ital Formation, Testimony to the House Ways and Mandated Benefits: AlEC ...... 1.0 million . [X] Minimum Wage Act of 1938 State of California 2.6 million . 3.7 million. Means Committee, March 16, 1993, p. 5. ORI/McGraw-Hill ...... 659,000 ...... 908 ,000. 20Not included in the $10.7 billion figure are the [X] Worker's Compensation Employment Policies Institute .... 780,000-890,000 2.3 million. potential costs from the FDIC Improvement Act of [X] Davis-Bacon Act of 1931 (Prevailing JEC/GOP 710,000 ...... 807 ,000-1.2 mil- 1991 , which could push regulatory costs even higher . wage requirements) lion . 21 American Bankers Association, " The Banking [X] Family and Medical Leave Act of 1993 NCPA/Fiscal Associates .. .. 738,000* ...... Industry: The Key to Jobs and Economic Growth," NFIB/CONSAO ...... 850,000 ...... 3.8 million. February 1, 1993, p. 8. [X] Americans With Disabilities Act of 1990 RAND ...... 600,000 ...... Average 1.0 million ...... 2.1 million. 22 American Bankers Association, " Cutting the [X] Consolidated Omnibus Budget Rec- Red Tape: Let Banks Get Back to Business," Novem­ onciliation Act of 1985 (health benefits) *The NCPA study also includes an "Optimistic" foreca st of 677 ,000 jobs ber 1992. [X] Equal Pay Act of 1963 lost. 23 Arthur Anderson Enterprise Group, Survey of Various Regulations: Small and Mid-Sized Businesses: Trends tor 1993, June The Clinton Administration's Estimates of 1993, p. 11. [X] Various environmental regulations Lost Jobs. The Clinton administration esti­ 24 Michael Selz, " Many Small Businesses Are Sold (e.g. Clean Air Act) mates that its health reform plan would cost on Leasing Equipment," The Wall Street Journal, Oc­ [X] Occupational Safety and Health Act of 600,000 jobs, but says that most of these tober 2:7 , 1993, p. B2. 1970 losses would be offset by job gains elsewhere 25 Tbe National P erformance Review, Creating a [X] Equal Employment Opportunity Act of in the economy. The administration has Government That Works Better & Costs Less, Sep­ t ember 7, 1993, p. 148. 1972 modest support among outside analysts. 26Lawrence Lindsey, " How to Corrupt Banking," [X] Age Discrimination Act of 1967 Economist Alan Kruger of Princeton Univer­ Forbes, January 31, 1994, p. 100. [X) Fair Labor Standards Act of 1935 (over­ sity believes that only about 200,000 jobs 27 See " Ma nhandled by Mandates," Forbes, October time regulations) would be lost. The Congressional Budget Of­ 25, 1993, p. 39; William G. Laffer III and Nancy A. fice claims that the administration's pro­ Bord, " George Bush's Hidden Tax: The Explosion in [From the National Center for Policy Analy­ posal would " probably have only a small ef­ Regulation," Heritage Foundation Backgrounder No. sis Brief, Analysis No. llO, June 27, 1994] fect on low-wage employment." These ad­ 905, July 10, 1992. ministration-friendly analysts believe job 28 William G. Laffer III, " How Regulation is De­ WHY EMPLOYER MANDATES HURT WORKERS stroying American Jobs," Heritage Foundation loss would be minimal because the addi­ Are employer mandates the best way to tional cost of health insurance premiums Backgrounder No. 926, February 16, 1993. pay for health care reform? Virtually all 29 Michael Hazilla and Raymond J . Kopp, " Social would be largely absorbed by lower wages Cost of Environmental Quality Regulations: A Gen­ studies of mandates conclude that they kill and slower wage growth, thereby leaving eral Equilibrium Analyis," Journal of Political Econ­ jobs. Even the Clinton administration labor costs essentially unchanged. omy, Vol 98, No. 4, (1990) p. 867. agrees. More Realistic Estimates of Lost Jobs. 30 Laffer and Bord, op. cit. , p. 6. An Employer Mandate is Really an Em­ 1 Eight major independent studies of the im­ 3 See Laffer, op. ci t., p. 7; Gary Anderson and Low­ ployee Mandate. Economists generally agree pact of employer mandates estimate job ell Gallaway, " Derailing the Small Business Job Ex­ that fringe benefits are earned by workers press," (Washington, D.C.: Joint Economic Commit­ losses ranging from a low of 600 ,000 (the Rand t ee, November 7, 1992); Lowell Gallaway and Richard and that they substitute for wages. Employ­ Corporation) to a high of 3.8 million Vedder, " Why Johnny Can't Work: The Causes of ers cannot afford to pay more in total com­ (CONSAD Research Corporation). The aver­ Unemployment," Policy Review , Fall 1992; Alan pensation than the value of a worker's out­ age predicted loss is 1 million jobs. [See the Reynolds, " Cruel Costs of the 1991 Minimum Wage," put. So if labor costs go up because of man­ table.] The Wall Street Journal, July 7, 1992, p. A14. dates, the employer usually is forced to re­ The range reflects the uncertainty about 32 See David Andrew Price, " Newest Mandate-Ev­ duce wages by an offsetting amount. how an employer mandate would affect em­ eryone Into the Carpool," The Wall Street Journal, Thus, reqmnng employers to provide ployers and workers. An employer insurance November 8, 1993, p. A14. health insurance is simply a disguised at­ 33 Peter Brimelow and Leslie Spencer, " When mandate would raise labor costs to employ­ Quotas Replace Merit, Everybody Suffers," Forbes, tempt to force workers to take health insur­ ers, but they would pass much of those costs February 15, 1993, p. 82. ance rather than wages. Nominally, the pro­ on to workers by lowering wages. The more 34 Eileen Trzcinski and William T. Alpert, " Leave posed mandates apply to employers. Actu­ employers are able to shift their increased Policies in Small Business: Findings From the U.S. ally. they force workers to purchase health labor costs to employees, the fewer jobs Small Business Administration Employee Leave insurance, whether they want to or not. would be destroyed. For example: Survey," Small Business Administration Office of Why Mandates Would Cost Jobs. When the The Rand study, which forecast the small­ Advocacy Research Summary Number 99, March 1991. government forces people to earn less and to 35 Jeanne Saddler, " Small Firms Try To Curb Im­ est job loss, assumes that 85 percent of the pact of Leave Law," The Wall Street Journal, August pay for health insurance they may not want, increased labor cost would be shifted back to 5, 1993, p. Bl. working becomes less attractive. This is es­ workers in the form of reduced wages; 36See Daniel J . Mitchell, " The Economic and pecially true for marginal workers-teen­ The Employment Policies Institute study Budget Impact of the Clinton Health Plan," Herit- agers, working wives and the elderly-who assumes that 70 percent of the increased July 11, 1994 CONGRESSIONAL RECORD-SENATE 15801 labor cost · would be shifted back to lower Estimates of the Economic Impact. Four of ily while not destroying jobs, according to a wages; the major studies also consider the impact of recent study conducted for the National Fed­ The American Legislative Exchange Coun­ an employer mandate on the economy as a eration of Independent Business (NFIB), the cil study assumes wage shifting of both 62 whole. Their predictions: nation's largest association of small business percent and 85 percent. DRI!McGraw-Hill: gross domestic product owners. That reform proposal is The Herit­ Estimates of Lost Wages. The wages of (GDP) will be down by $53 million in the year age Foundation's Consumer Choice Health highly-paid workers who already receive 2000; Plan.1 health benefits would be little affected by The National Center for Policy Analysis: CONSAD Research Corporation, which con­ employer mandates. Because the wages of GDP will be down by $90 billion in 1998; ducted the study, is a major health care re­ the lowest-paid workers cannot be cut very American Legislative Exchange Council: search firm based in Pittsburgh.2 Its calcula­ much, jobs then would be at great risk. The personal income will be down $112 billion by tions are based on labor impact models de­ large in-between group would face signifi­ 1998; veloped for the U.S. Department of Health cant wage reductions. State of California: GDP will cumulatively and Human Services. In the NFIB study, Five of the eight studies examine the wage decrease $224 billion from 1995 through 1998. CONSAD concludes: "The Heritage Founda­ effects of an employer mandate, using dif­ Other Studies. The Joint Economic Com­ tion's proposal is estimated to have no ef­ ferent approaches. The studies forecast these mittee of Congress has cataloged 40 studies fect, severe or moderate, on employment." aggregate wage losses in 1998: of employer mandates. Only the eight stud­ The other universal health care proposals Employment Policies Institute: $27 billion; ies examined here used econometric models analyzed by CONSAD were the "managed State of California: $68 billion; to produce specific numbers on job loss. How­ competition" plan developed by the so-called American Legislative Exchange Council: ever, all 40 came to the same general conclu­ Jackson Hole Group, the employer mandate $93 billion; sion: employer mandates destroy jobs and re­ plan designed by California Insurance Com­ National Center for Policy Analysis: $69 duce wages. missioner John Garamendi, and the "play or billion; pay" bill introduced in 1991 by the Demo­ CONSAD Research Corporation: $28 billion. [From the Heritage Foundation F.Y.I., July cratic leadership in Congress. Each of these Only the CONSAD study estimates the 6, 1993] would lead to heavy job losses, because of number of employees affected. It sets the THE JOBS IMPACT OF HEALTH CARE REFORMS the extra labor costs they would impose on number at 23 million, making the average (By Peter J. Ferrara, Senior Fellow) firms. Another proposal examined by wage loss $1,200 per worker in the in-between CONSAD, the Conservative Democratic group. The Joint Economic Committee of INTRODUCTION Forum plan, would not cost jobs. But unlike Congress estimates that as many as 41 mil­ Only one major health care reform pro­ the other plans modelled, including the Her­ lion workers would be affected, with the loss posal guarantees secure and portable health itage proposal, it would not lead to universal per affected worker ranging up to $2,300. insurance coverage for every American fam- coverage. HOW JOBSWOULD BE AFFECTED BY MAJOR HEALTH REFORM PROPOSALS

Proposal Jobs lost Jobs at risk 1

Heritage ...... No jobs lost ...... No jobs at risk. Jackson Hole ...... 900,000 to 1.5 million ... . 16.3 million. Garamendi ...... 390,000 to 650,000 ...... 6.6 million . Play or Pay ...... 650,000 to L1 million . 11.5 million. 1 CDF •••• • None2 ...... None.2 1 "At risk" means workers have a high probability of layoff or job elimination , and stand the greatest chance of substantial losses in wages and benefits. 2Jhe CDF Plan, unlike the other proposals, would not achieve universal coverage.

THE HERITAGE PLAN from having to pay for the cost of care for 900,000 and 1.5 million small business jobs Under the Heritage Consumer Choice the uninsured. Through the refundable cred­ would be lost once the proposal was imple­ Health Plan, each worker would have the it, low-income Americans would be given mented. These negative effects would occur right to use the money currently paid by his government assistance to pay the premiums. because the mandated employer payments or her employer for health coverage to pur­ The Heritage Plan thus provides for uni­ for health insurance would raise the cost of chase any other health insurance plan of the versal coverage without imposing extra costs labor and, consequently, encourage many worker's choice, from any source. Any re­ on employers-and so would not reduce em­ employers to reduce compensation or to cut sulting savings would go directly to the fam­ ployment. jobs. ily. In addition, the worker could direct CONSAD Estimate of Job Losses: No jobs CONSAD Estimate of Job Losses: 900,000 to these and other funds into a medical savings lost or put at risk. 1.5 million jobs directly lost; 16.3 million jobs put at risk. account to pay for future health expenses. THE JACKSON HOLE PLAN These workers, as well as workers currently The ability of the Heritage Plan to achieve THE GARAMENDI PLAN without employer-provided insurance, would universal coverage while protecting jobs con­ Another proposal analyzed in the CONSAD receive a substantial tax credit for the pay­ study is advanced most prominently by the ments made for family health insurance pre­ trasts sharply with the managed competition proposal advanced by the Jackson Hole Insurance Commissioner of California, John miums, medical savings account contribu­ Garamendi. This proposal would be similar tions, or out-of-pocket health expenses. The group of policy experts, including Professor Alain Enthoven of Stanford University, phy­ to the managed competition proposal, but credit would be "refundable," meaning that would finance the health insurance package sician Paul Ellwood, and others.4 This pro­ families near or below the tax threshold through a payroll tax. Under the proposal, would receive the equivalent of the tax cred­ posal would require all employers to pur­ employers and employees would pay a com­ it in the form of a voucher. chase at least a set of standards federally de­ bined 9 percent payroll tax to regional co­ Through this market-oriented plan, con­ signed health insurance plans for their em­ operatives, which would make available to sumers are given broad, powerful market in­ ployees and their families, through regional families a range of plans meeting minimum centives to consider the costs and benefits of insurance cooperatives-or directly from in­ specifications. different health insurance plans, and the surers in the case of larger employers. The This proposal bears the closest similarities medical services they buy directly. They proposal seeks to steer workers into Health to the plan being developed by the Clinton would tend to avoid unnecessary health care. Maintenance Organizations (HMOs) or simi­ Administration. The CONSAD study esti­ And since consumers would be far more di­ lar managed care networks in which the con­ mates that this proposal would put about 6.6 rectly concerned with costs, doctors, hos­ sumer's choice of doctors and services is lim­ million small business jobs, or about 10 per­ pitals, and insurers would compete far more ited. This proposal is typically called "man­ cent of all small business employment, at vigorously to reduce costs. Such market in­ aged competition," or the "Jackson Hole risk of reduced work or benefits, with from centives and competition, not government Plan." 390,000 to 650,000 jobs eliminated altogether. price controls, are the most effective means The CONSAD study concludes that because This loss again occurs because the payroll for reducing cost. 3 of the cost of the mandate to employers, the tax on employers raises the cost of labor. At the same time, the Heritage Plan would managed competition proposal would put 16.3 The study notes, incidently, that the pro­ require each individual to purchase a basic million small business jobs, or almost 25 per­ posed 9 percent payroll tax probably would catastrophic health plan, just as in most cent of all small business employment, "at be insufficient to finance the expected bene­ states automobile drivers are required to risk." This means that workers would be fits, which would include workmen's com­ purchase at least a minimum liability insur­ subjected to prolonged layoffs, reduced com­ pensation and health care for auto injuries. ance policy. This health insurance require­ pensation, or future job cutbacks and plant If a higher payroll tax were necessary, as is ment is to protect other members of society closings. The study estimates that between likely, it would cause larger job losses. 15802 CONGRESSIONAL RECORD-SENATE July 11,-1994 CONSAD Estimate of Job Losses: 390,000 to losses. That is the Heritage Foundation on the goal of reducing costs, and is untrue 650,000 jobs directly lost; 6.6 million jobs put Consumer Choice Health Plan. to the six principles: a risk. FOOTNOTES Security: We believe the plan trades job se­ THE PLAY OR PAY PLAN curity for health security. I See Stuart M. Butler, "A Policy Maker's Guide to Simplicity: The plan is extraordinary com­ Another major proposal examined in the the Health Care Crisis, Part II: The Heritage Consumer Choice Health Plan," Heritage Founda­ plex for the business owner and in overall CONSAD study is the " play or pay" plan ad­ structure. vanced in recent years by leading congres­ tion "Talking Points," February 28, 1992; Stuart M. Butler, "Using Tax Credits to Create an Affordable Responsibility: Small business owners will sional Democrats.s This is the primary pro­ Health System," Heritage Foundation bear a disproportionate share of the respon­ posal for employer-mandated health insur­ "Backgrounder," No. 777, July 26, 1990; Stuart Butler sibility. ance being considered in Congress. Under and Edmund F. Haislmaier, eds., "A National Health Choice: For the business owner, choice and this proposal, employers have a choice: Ei­ System for America" (Washington, D.C.: The Herit­ flexibility are eliminated. ther they must purchase health insurance age Foundation, 1989). Quality: Caps on spending and excessive providing at least certain specified benefits 2 CONSAD Research Corporation, "The Employ­ government control could reduce quality and to their employees and their dependents, or ment Impact of Proposed Health Care Reform on Small Business," May 6, 1993. Available from the innovation. pay a tax for similar coverage to be provided NFIB Foundation, Suite 700, 600 Maryland Avenue, Savings: With a huge new bureaucracy in by the government. S.W., Washington, D.C. 20024. place, realization of savings is dubious. The CONSAD study concludes that the ad­ JEdmund F. Haislmaier, "Why Global Budgets and In the beginning a requirement for employ­ ditional labor costs imposed on many firms Price Controls Will Not Curb Health Costs, Heritage ers to provide coverage for their employees by this requirement would put 11.5 million Foundation Backgrounder No. 929, March 8, 1993. and dependents seemed to some to be the small business jobs, or about 17 percent of all 4Peter J. Ferrara, "Managed Competition: Less simplest solution. However, the real life im­ small business employments, at risk of re­ Choice and Competition, More Costs and Govern­ plications are fast becoming known. The at­ ment in Health Care," Heritage Foundation duced work or compensation. CONSAD esti­ "Backgrounder" No . 948, June 29, 1993; Robert E. tached sheet on public opinion about the em­ mates that from 650,000 to 1.1 million Ameri­ Moffit, "Overdosing on Management: Reforming the ployer mandate shows that the American cans would lose their jobs. Health Care System through Managed Competi­ public is not in favor of these types of re­ CONSAD Estimate of Job Losses: 650,000 to tion," Heritage Lecture No. 441, April15, 1993. strictive requirements on businesses. 1.1 million jobs directly lost; 11.5 million sstuart M. Butler, "Why 'Play or Pay' National While nearly all provisions of the plan af­ jobs put at risk Health Care Is Doomed to Fail," Heritage Lecture fect small business, the most critical can be THE CDF PLAN No . 329, August 14, 1991; Edmund F. Haislmaier, "The broken down into five general categories: Mitchell Health AmericaAct: A Bait and Switch for Financing: NFIB does not believe that the The final major proposal studied is a ver­ American Workers," Heritage Foundation Issue Bul­ sion of managed competition included in a letin No. 170, January 17, 1992. funding for this plan is sound, nor do we find the estimates on target. The country cannot bill (H.R. 5836) introduced by Representative THE HEALTH SECURITY ACT-AN NFIB WHITE Jim Cooper, the Tennessee Democrat, and afford for the small business community to PAPER be the primary financing mechanism for a other members of the Conservative Demo­ EXECUTIVE SUMMARY cratic Forum, a caucus of conservative vast new entitlement program. In the event Democrats in the House of Representatives. NFIB and its small business owners have of a funding shortfall, every financial safety While similar to the Jackson Hole Group's been crying out for health care reform louder valve· is connected to the business commu­ proposal, this bill differs in a crucial respect: and longer than most. In 1986, NFIB members nity and therefore to jobs. Given the choice It would not require employers to pay for declared health care reform their number of cutting the benefit package, raising taxes one priority. Since that time, we have been employees health insurance. It would require or passing on the cost to employers, the gov­ employers only to make such insurance polling small business owners on various ele­ ernment's predictable choice will be the lat­ available through regional cooperatives for ments of reform schemes and we now have a ter. fairly solid conception of what the small Subsidies: Small business owners, even purchase by workers if the employer did not those who believe they may be better off in choose to pay for it. business community wants-and doesn't Since the CDF bill would not require any want-from health care reform. the short term as a result of the proposed increase in labor costs, the CONSAD study - Small business does not want the system subsidies, do not find these promises credi­ envisioned by the Health Security Act. ble. First, the subsidy levels have shifted found it would have no significant negative Small business owners are in a unique posi­ effect on employment or jobs. The bill, how­ several times since first announced and an tion within the health care reform debate. overall cap has been imposed. Second, Ad­ ever. does not achieve universal coverage, On one hand, they are a primary "victim" of unlike any of the others plans analyzed, ministration officials have declared them the current cost crisis and, on the other temporary. Third, they may be practically since the uninsured likely would remain hand, they are being asked to fund the lion's without insurance. The reason: Neither em­ meaningless. In the case of a shortfall by the share of the reform bill. According to HHS state or an alliance, employers may be "as­ ployee nor employer would have any new re­ Secretary Shalala, the business community quirement or assistance to purchase cov­ sessed" again to make up the difference. will fund approximately 60 percent of the Mandate: While economists may not agree erage. new plan. Small firms will have to fund in­ on everything, one thing they do agree on is CONCLUSION surance coverage for their employees and de­ the impact of payroll taxes on job creation. Most of the leading health care reform pro­ pendents, a new cost for 51'H>O percent of the Payroll taxes are without a doubt the small posals, including the emerging Clinton plan, American business community. According to business owner's biggest financial burden. In seek to finance expanded health insurance at Lewin!VHI, the proposed plan will cost fact, most small firms now pay more in pay­ least in part by imposing new financial obli­ American small business nearly $29 billion in roll taxes than they do in income taxes. Pay­ gations on employers. This method of fi­ new expenditures for the 80 percent mandate roll taxes must be paid whether the firm is nance has a political advantage. It hides alone. NFIB estimates that at least two of profitable or not, and they raise the cost of must of the cost of coverage from those who every three employers would have increased hiring and keeping employees. The 80 per­ will ultimately pay the cost-American health insurance costs if the Health Security cent employer mandate is by definition a workers. This cost is not just financial. By Act were enacted, almost all of which would new broad-based payroll tax. The result: increasing the cost of labor in many firms, it be small employers. higher price reduction in benefits, fewer jobs would mean fewer jobs and reduced wages NFIB's contacts with small business own­ created, potentially widespread layoffs and paid to those with jobs. ers-the people who create the jobs, meet fewer business start ups. This effect is well understood by econo­ payroll and make their business run every Simplicity: Small business owners believe mists and business owners, if not, unfortu­ day-show significant fear of a huge new pro­ they will need an entire new employer bene­ nately, by the workers not affected. The gram affecting millions of businesses and fits department to comply with the Health CONSAD study actually quantifies these ef­ hundreds of millions of Americans, supported Security Act. Obviously, for most of the na­ fects. The study indicates that three of the by an unprecedented bureaucracy. The more tion's small firms that is impossible. Con­ five major proposals examined-and by im­ details of the plan they see, the more con­ trary to what many lawmakers believe, the plication the emerging Clinton plan-would cerned small business owners become. administrative burden for small firms under mean heavy job losses and put millions more In the beginning of the debate, President the President's proposal will expand mark­ jobs at risk. Clinton laid out two main goals with which edly. Rather than spending productive time There are only two plans that would not nearly everyone agreed: providing coverage building and improving the business, busi­ cost jobs. One is the proposal advanced by to the nation's uninsured and mitigating the ness owners will be transformed into the the Conservative Democratic Forum. But cost crisis in health care. NFIB strongly sup­ government's administrative enforcer under while it avoids jobs losses by not imposing a ports these two critical goals, along with the the reform plan. mandate on employers, it does not achieve President's six essential principles against Expansion of Government: The Health Se­ universal coverage. There is only one plan which any reform plan should be measured. curity Act proposes an unprecedented expan­ that leads to universal coverage with no job However, we believe the plan falls far short sion of government bureaucracy to support July 11, 1994 CONGRESSIONAL RECORD-SENATE 15803 the new system. While small business owners FUTA and the health plan premi urn. This ents, business owners must comply with far believe government has a role to play in substantial new power allows the IRS to reaching and complex information reporting. health care reform, they see the proposed override anything in current law except for Although the plan removes the responsibil­ structure as far too expensive because it the new safe harbor created by the plan. ity for "shopping" for coverage, it has multi­ leaves virtually nothing in the health care Since the regional alliances will be respon­ plied the employer's administrative burden. sector outside of government control. Ex­ sible for collecting premiums from employ­ Following is a list of employer administra­ panding government involvement in a pro­ ers, they will have to make a determination tive requirements: gram has never improved a program, nor as to which workers are independent con­ Reporting: Prior to enrollment, the busi­ brought down its overall costs. tractors and which are employees. Problems ness owner must provide to the alliance iden­ NFIB believes the plan to be overpromised, may develop in cases where the regional alli­ tification and employment information for underfunded, and a tremendous burden for ance classifies a worker as an employee, but each employee. business owners. the IRS considers that worker to be an inde­ Once a year the employer must furnish the NFIB and its over 600,000 members across pendent contractor. following data to the alliance: number of the country have been advocating com­ States are permitted to opt out of the sys­ months of full time equivalent employment prehensive health care reform since 1986. Our tem and choose single payer for all or part of for each employee and each class of enroll­ positions on various aspects of reform plans the state. ment, amount deducted from wages for the have been established by our members Employers may be required to pay addi­ family share of premiums, total employer through seven years of polling on the subject tional amounts if a state or alliance fails to premium payment for the year for all em­ of health reform. In the 103rd Congress, re­ meet its budget target or collect the pre­ ployees in each alliance area, the number of form plans supported by NFIB include the miums it is owed. full time equivalent employees for each class Managed Competition Act of 1993 (Senators The Administration's proposal establishes of enrollment (i.e. the number of single em­ Breaux and Durenberger), the Health Equity a standard benefits package that has been ployees or employees with dependents) bro­ Access Reform Today Act of 1993 (Sen. compared to those provided by "Fortune 500" ken down by month, the amount of wages Chafee, et. al) and plans introduced by Rep. companies. In addition, the National Board covered for each employee, any employer Michel, Sen. Nickles and others. that will administer the system can add ben­ collection shortfall payments and any addi­ THE CLINTON HEALTH REFORM PLAN efits to the package, as can individual states. tional information specified by the Depart­ Alliances have the potential to become ment of Labor. PROVISIONS CONCERNING SMALL BUSINESS huge, government-run entities with signifi­ Employers are required to pay for 80 per­ Each month, the employer must apprise cant regulatory powers. the alliance of any information on a change cent of coverage for employees and depend­ The alliances will have strictly set bound­ ents. in an employee's employment status (such as aries, may not cross state lines and may not a firing or hiring, wage increase, change for The requirement that employers pay 80 split MSAs. Since so many businesses oper­ percent of the health insurance costs for all part time to full time, etc.), and any change ate across state lines or across MSAs, the in employee's family status (such as a di­ employees and their dependents is no dif­ employer may have to pay multiple alliances ferent than a new payroll tax. This is espe­ vorce, marriage, new dependent). compounding the administrative complexity. For a new employee, the employer must cially true for the 55-60 percent of the busi­ Employers would lose all control over their ness community that does not provide health provide identification information, home ad­ health insurance costs. Self insurance for dress, alliance area of residence, class of insurance. In fact, is the single largest pay­ forms under 5000 employees will not be al­ roll tax increase in history. family enrollment (divorced, single, depend­ lowed, and all ability to control benefits and ents), health plan employee is currently en­ Employers must cover part time and sea­ premium costs will be low. sonal workers, in addition to picking up rolled in, whether employee has moved from The national board is given extraordinary one area to another and any additional infor­ Medicare costs for employees over age 65. power, including determining per capita pre­ Payments made for two worker families mation the Board or the Department of mium targets and alliance budgets, approv­ Labor may specify. are calculated so that both employers must ing state systems, interpretation and up­ pay, based on a complicated and bureau­ Employers must provide to each employee grade of standard benefit package, and gen­ information on the number of months of full cratic formula (payment-SO percent of aver­ eral oversight and enforcement. age weighted premium divided by the aver­ time equivalent employment for each class The Administration's proposal is a massive of enrollment, the amount of wages attrib­ age number of workers per family type for top-down reorganization of the nation's that region). utable to qualified employment, the amount health care system with an unprecedented of covered wages, the total family share de­ Employers may be required to send pay­ level of government involvement and control ments to multiple alliances. ducted from wages and any other informa­ over health care. With such a powerful Na­ tion that the Department of Labor may Alliances may require employers to pay by tional Health Board, potentially hundreds of electronic transfer. specify. [If the employer paid premiums for Health Alliances, and dozens of new agencies employees to more than one alliance, infor­ Recordkeeping and t::alculations to deter­ proposed to run the system, the Administra­ mine eligibility for the subsidy are com­ mation must be reported separately for each tion's plan is government-intensive. alliance.] plicated and cumbersome. For most small The plan sets up an infrastructure that firms, fluctuating wages will make this a could easily be used as a launching pad for a Payment Calculation: In order to calculate nightmare to determine. Canadian style, single payer health care sys­ his or her contribution, the business owner Employers must provide alliance with all tem. must determine which "family status" cat­ relevant identification and employment in­ A 7.9 percent cap for large corporations egory each employee fits into, track that formation for each employee, forward all rel­ with fewer than 5000 employees is a huge throughout the year and pay 80 percent of evant health plan and alliance information windfall for many big corporations that have the· alliance's average weighted premium. to their employees, report any and all allowed their health care costs to skyrocket. Payments made for two worker families changes in personnel to the purchasing alli­ General Motors and Ford, for example, cur­ are calculated so that both employers must ance and track workers• family status. rently pay close to 20 percent of payroll in pay, based on a complicated and bureau­ Extensive records must be kept and made health costs. For the majority of larger cratic formula (payment=80 percent of aver­ available to the alliance. At year end, busi­ firms with over 100 employees, overall costs age weighted premium divided by the aver­ nesses must reconcile their payments with will go down by about $14.5 billion. In addi­ age number of workers per family type for the alliance to ensure compliance and must tion, the Administration has recommended that region). report information on wages and number of that the government pick up 80 percent of Payments for part time workers are cal­ employees to ensure eligibility for subsidies. the health insurance costs of early retirees, culated pro-rata based on a 30 hour baseline. Alliances can audit employers to ensure another boon for large corporations. For example, for an employee working 10 compliance. The bill's malpractice language is weak, hours a week, the employer must pay one­ The Clinton plan changes the tax treat­ providing only for some alternative dispute third of 80 percent of the average weighted ment of certain earnings of an S corporation, resolution, a collateral source rule and a premium for the employee's chosen plan. significantly increasing the Medicare tax on nominal limit on attorney's fees. In order to determine whether they qualify many S corporation shareholders. Also, for a subsidy, an employer must calculate shareholder earnings will now be included in THE HEALTH SECURITY ACT the company's average wages (total wages of the calculation of payroll, reducing the WHERE'S THE SIMPLICITY? qualified employees divided by the number of small business subsidy for many. One of President Clinton's principles for full time equivalent employees). This figure The plan is likely to significantly narrow health care reform is "simplicity." However, must be calculated each month, then pay­ the definition of "independent contractor." as we've seen it laid out, the plan seems any­ ments must be reconciled at year end. The plan grants the Treasury Department thing but simple for the small business Monthly fluctuations, common in small the authority to issue new rules defining owner. In addition to the requirement to firms, make this an administrative night­ who is an employee for purposes of FICA, fund coverage for all employees and depend- mare. 15804 CONGRESSIONAL RECORD-SENATE July 11, 1994 Recordkeeping: Employers must keep ex­ asked how they would be affected by a 3.5 history, In 1965, Medicare was estimated to tensive records of all these transactions and percent increase in payroll costs (the best cost $9 billion by 1990. It actually cost $116 calculations and make them available to the deal many firms could get under the Clinton billion. When cost estimates of the subsidy alliance. At year end, all payments and plan), one third of respondents said they prove to be low, the payroll caps will prove wages must be reconciled and reported to the would let employees go and nearly one half meaningless. alliance. said they would be forced to raise prices. (3) The Health Security Act allows the Employers may be audited by the alliance. Every public study and survey of economists state and the National Health Board or Con­ A true understanding of the small business done on the employer mandate forecasts job gress to adjust the already generous stand­ community would reveal that many of the loss (up to 3.1 million). Even the Clinton Ad­ ard benefits package. Recent experience has smallest firms, subsidy or no, could crumble ministration has acknowledged that approxi­ clearly shown that a federal government fis­ under the combined weight of the new ad­ mately 600,000 jobs could be lost. Europe is cally restrained by huge deficits is inclined ministrative requirements and the 80 percent suffering chronic unemployment in part as a to pass and take credit for benefits for which mandate. The administrative burdens of the result of mandated benefits. Many advocates it does not have to pay. If this should happen proposal are just as much a tax as the re­ of universal coverage in both political par­ with the standard benefits package, the quirement to pay 80 percent. The average ties have rejected the employer mandate to small business subsidy would cover less and small firm does not have a "green eye­ pay as an inefficient, risky way to achieve the employer mandate would cost more. shades" benefit administrator in its back­ that goal. In short, health security need not (4) Fifty-five percent to 60 percent of U.S. room and did not get into business to serve come at the expense of job security. employers do not currently offer health in­ surance to their employees. To them even a as a partner, or administrator, for the fed­ SUBSIDIES AND PAYROLL CAPS: UNRELIABLE eral government. Where's the simplicity? subsidized employer mandate will raise the AND UNDESIRABLE cost of each employee by 3.5 percent to 7.9 THE EMPLOYER MANDATE IS A TAX ON JOBS Ira Magaziner, the President's health care percent. "A majority of House members and the advisor, once declared that concerns about (5) Small businesses do not want and have House parliamentarian view the employer the job loss impact of the employer mandate never asked for a government subsidy. They mandate in the Clinton health reform plan to pay were "crazy." But on page 1051 of the want a reformed, competitive health care as a form of tax revenue."-BNA Daily Re­ Health Security Act comes the clearest ad­ market that reduces costs and offers them port for Executives, November 1993. mission to date that job loss concerns are and their employees affordable insurance. The Health Security Act requires all em­ not only not crazy, they are well founded. VOODOO ECONOMICS: FINANCING THE HEALTH ployers to pay 80 percent of the health insur­ On that page, Section 6123 of the bill out­ SECURITY ACT ance costs for all current and future employ­ lines the small business subsidy scheme HHS Secretary Donna Shalala recently ees and their dependents and a pro-rated por­ through which the required health premium tion of this 80 percent requirement for part­ testified that business will fund about 60 per­ costs for small firms (under 75 employees) cent of the Health Security Act, with the time employees and their families. After re­ would be limited to 3.5 percent to 7.9 percent federal government and individuals picking viewing the Health Security Act, NFIB re­ of payroll. The federal government would up the rest. This makes the business commu­ asserts what it has argued all along; the pick up the rest. While NFIB appreciates this nity, more than 95 percent of which are mandate-to-pay is a payroll tax increase recognition that some small firms simply small employers, the biggest stakeholder in that will result in job loss in the smallest cannot afford to pay 80 percent of a govern­ the fiscal soundness of the proposal. Small weakest, newest businesses in the U.S. econ­ ment mandated "Fortune 500" health plan, business owners cannot afford to be the omy. We also assert the following: to main­ these subsidies and payroll caps have so major financer for a litany of new open­ tain its reputation for honesty in federal many weaknesses that small business owners ended entitlements. If the numbers do not budgeting, the Congressional Budget Office view them as unreliable, undesirable and add up, small business will be asked to pay must determine that the 80 percent premium under-financed: more. Given the choice of cutting benefits, requirement is a tax. (1) The percentages of payroll at which raising taxes or passing the cost on the em­ How can the mandate be anything else? mandated health care costs are capped would ployers, the latter is likely to be the choice. Title I of the bill places into the law the idea always be subject to change. In fact, just Is the plan small business owners will be that the federal government will guarantee since the first unveiling of the President's asked the pay for fiscally responsible? The that all Americans have a certain set of plan, they already have. answer is no. health benefits. Title VI finances this legal Example: Mr. Smith owns a landscaping Entitlements and obligations. The Health guarantee by telling employers how much company and employs 26 people who on aver­ Security Act provides: (1) A "Fortune 500" they must pay for health insurance. where age make $15,000 a year. When the first draft health plan to 37 million uninsured Ameri­ they are to send the money and subjects of the President's plan was released on Sep­ cans; (2) more generous health care benefits them to audit and federal penalties if they tember 7th, his health care costs were capped for the millions of Americans who have in­ do not comply. All of this makes the man­ at 3.8 percent of payroll. But what happened surance but do not have a Fortune 500 plan; date no different than a tax. It must be when concerns were raised that the health (3) new long term benefits for the elderly; (4) called what it is and treated as such by Con­ bill was not paid for? On October 4th, a new prescription drug benefits for the elderly; (5) gress. subsidy table came out which would have subsidies to low income families and small A payroll tax is the most onerous tax for a raised Mr. Smith's cap to 4.4 percent of pay­ firms to reduce the cost of mandates; (6) small business. It must be paid regardless of roll (BNA's Daily Health Care Report). When early retiree benefits; (7) deficit reduction; a firm's financial health. It raises the cost of the Health Security Act was finally submit­ (8) 100 percent tax deduction for the self em­ hiring and/or keeping each employee. In the ted to Congress in November, Mr. Smith's ployed; and more. case of the health care employer mandate, it payroll cap rose again to 5.3 percent of pay­ Financing. These obligations are financed is not difficult to see which firms will be hit roll. In these two changes, Mr. Smith's al­ by: the employer mandate; a corporate alli- hardest. Three million firms employ four or ready considerable mandated health care . ance payroll tax; Medicare and Medicaid fewer employees. These Main Street firms costs rose $5,850 per year. This process would cuts; new tax revenues that result from post make up 60 percent of all American employ­ only be magnified if the employer mandate health care reform profits and a tobacco tax ers. Of these three million, 76 percent do were law and political and fiscal pressures increase. NFIB believes that each of these fi­ NOT currently offer health insurance to mounted. Because of financing problems, the nancing mechanisms as well as the estimates their employees (HIAA data). Most of these payroll caps are made of swiss cheese. of the costs of what they pay for are alarm­ firms do not provide insurance simply be­ (2) While the bill "entitles" certain firms ingly off target. cause they cannot afford it. They will be hit to payroll caps based on their size and aver­ For example, the plan forecasts with at­ the hardest by the mandate, as will new age wage, it places a cap on the amount of tempted precision a $71 billion windfall for businesses. Of all American employers, 55 funds that would be available for this enti­ business that would result from lower health percent to 60 percent do not provide health tlement. This means that if estimates for the care costs. But the employer mandate makes insurance. The 80 percent mandate will force cost of this entitlement are off, the "caps" of this impossible. As previously mentioned, 55 the owners of the smallest businesses in the 3.5 percent to 7.9 percent are meaningless. percent to 60 percent of employers do not economy to pay for an untested system with There is every reason to believe that the currently offer health insurance to their em­ no certainty of future costs. Administration estimates will be off. Neither ployees. For this majority of American em­ NFIB estimates that at least two of every the Bureau of Labor Statistics nor the Small ployers, health care costs will automatically three employers would have increased health Business Administration have current statis­ rise, not go down. It is simply not credible to insurance costs if the Health Security Act tics of average wages by firm size, making it say that the health care program will were enacted, almost all of which would be very difficult to know how many firms will produce a $71 billion revenue windfall when small employers. be eligible for the subsidies. Lewin!VHI's re­ it imposes an economically damaging tax on In a September Gallup Poll of NFIB mem­ cent financial analysis of the plan found the a majority of employers. bers, 84 percent of small business owners op­ Administration's cost estimate for the sub­ A recent study by Lewin!VHI, considered posed the employer mandate-to-pay. When sidy to be off by $36 billion. Then there is the most definitive financial analysis of the July 11, 1994 CONGRESSIONAL RECORD-SENATE 15805 President's plan to date, finds that the costs They will have the right to refuse health stay in business. This is not an exaggeration. will be significantly higher than the Admin­ plans whose premiums are more than 20 per­ What options does a small business owner istration projected. Lewin estimates the plan cent higher than the average premium in the like myself have? We've considered cutting will cost the government $364 billion; the Ad­ area. They will have the authority to reduce our staff, freezing all wage increases indefi­ ministration estimated $286 billion. Simi­ payments to health plans and providers when nitely and raising our prices. Also, we could larly, Lewin finds the Administration's net the alliance is over budget. They will have not invest in new equipment, store upgrades deficit reduction figure to be overblown by the responsibility of including failed cor­ and the hope of ever expanding our busi­ 300 percent. porate alliances, which would create an in­ ness--there would be no money left for these There are other problems. The plan de­ flux of thousands of employees at a time. things. I haven't even mentioned the desire pends on cuts in Medicare and Medicaid that The alliance will monitor (through audits) to eventually begin receiving an income experts both conservative and liberal, Repub­ employer compliance with the employer from all of our hard work."- Diane M. lican and Democrat, believe are not achiev­ mandate, average wage formulation and pay­ Weidrick, Tipndi, Inc., DBA Tallmadge Dairy able. The 1 percent corporate alliance pay­ roll caps. The alliance will preside over the Queen, Cuyahoga Falls, OH. roll tax will produce less revenue than ex­ individual and small business subsidy pro­ " We employ approximately 100 people. pected when big corporations find it more gram. The alliance will have the authority Should this health care program be approved advantageous to simply join regional alli­ to increase employer and individual pay­ we have two alternatives. One, raise prices. ances. ments when it anticipates a premium short­ Two, reduce our staff. Because we can't raise But let us make the dubious assumption fall. prices enough to make up $135,000 a year, we that all of the revenue and savings proposals There are numerous other examples of the will be forced to install automatic dishwash­ produce exactly the amount of money they vast expansion of government's reach in the ers and lay off about 12 people who now wash are supposed to generate. There is no reason Health Security Act. Suffice it to say that dishes. Based on the Clinton's plan, we esti­ to believe it will pay for all of the spending small business owners do not accept the idea mate our insurance increase would be items listed above. Remember, in 1965, gov­ that health care reform can only come with $135,000. ernment actuaries who were projecting the government control of a health care budget "I wish the 'experts' in Washington could 1900 cost of Medicare were off by more than that would be more than three times the size get their figures first hand. Come run our 1,000 percent. The projection for Medicaid in of the annual defense budget. restaurant. Tell me where to get $135,000 that same year was off by nearly 8,000 per­ extra to pay for health care."-Lynn PUBLIC OPINION ON EMPLOYER MANDATES AND McGarvey, Charco Broiler, Bellvue, CO . cent. JOB LOSS What if the government's ability to predict "Our existing insurance costs are now 9.87 cost has radically improved? What if the cost USA Today/CNN Gallup poll-11/1193. 64 per­ percent of our gross sales. If you take our projections of all the listed entitlements and cent believe employers should be encouraged present insurance costs and add the proposed commitments for which the federal govern­ by tax breaks not required to pay health new cost of a mandated health plan, it will ment must pay are off by only 50 percent? costs for their workers. increase our insurance costs to approxi­ There would be at least a $190 billion short­ USA Today/CNBC survey of 55 econo­ mately 30.63 percent of our existing gross fall. Small business owners cannot afford to mists--10/1193. 78 percent say that enactment sales. There is no way this business can be the major financing mechanism for this of President Clinton's health care plan would produce enough revenue to cover all insur­ risky fiscal gambit. Small business employ­ slow employment growth. ance costs, pay all state, federal and local ees won't be able to afford it either. CBS/New York Times poll of 1136 adults--9/ taxes and remain in business. If required to 19/93. 41 percent believe the decision to pro­ close, it will add nine more people to the un­ THE HEALTH SECURITY ACT AND THE EXPANSION vide health insurance to employees should be employed group, having a small direct effect OF GOVERNMENT left up to the individual company. on our local economy."-Troy Elliott, Troy's A majority of NFIB members have said in 47 percent believe that a proposal requiring Welding Inc., Albuquerque, NM. surveys that government has a role to play all employers to provide coverage to all em­ " As a small business owner, I am greatly in the health care sector of our economy. ployees would kill jobs. opposed to the mandatory insurance pro­ And NFIB members have also stated that Wall Street Journal/NBC poll-9/21193. 55 gram. If this is enacted, I will have to cut health care reform is their most important percent agree that the President's health my employee hourly wages to compensate priority. But in terms of government in­ care reform plan will force many small busi­ for the higher insurance premiums I will be val vemen t, the Health Security Act goes nesses to close. forced to pay. way too far. The Health Security Act, if en­ Marttila & Kiley poll of 800 adults--10/18/93. "I will have to eliminate all part-time em­ acted, would be the largest single expansion 59 percent are concerned that President Clin­ ployees and to severely cut back on the full­ of government authority in the country's ton's plan will cause small business to elimi­ time employees that I have in my employ. In history. nate jobs or hire fewer workers. our business at the present time, we are at a The nearly $2 billion new bureaucracy that Mason-Dixon Political/Media Research poll point that we need to add additional employ­ is included in the plan is alarming to small of 818 registered voters-9/93. 49 percent op­ ees to our payroll. But so far we have re­ business owners but is only a small portion pose employer mandates for health insur­ frained because of the threat of mandatory of the shadow that the Administration plan ance. increases in employer contributions to insur­ will cast over the private sector. A close Washington Post poll of 1015 adults--10/121 ance and also the threat of increased taxes. look at the bill shows that there is no aspect 93. 64 percent are concerned that the Clinton If these become enacted they will increase of the nearly $1 trillion health care industry plan will cause employers to eliminate exist­ expenses for business which will further de­ that is outside of government control. ing jobs. crease the business base. And my business Among other things, the National Health 73 percent believe the plan will hurt small may be one of those that will have to be sac­ Board will set a health care budget for both business. rificed for these mandates."-James K. the public and private sector, a budget equal­ American Viewpoint survey of 1000 Grieser, Grieser & Son, Inc., Wauseon, OH. ing one seventh of the economy. It will set adults--11112193. 58 percent agree that em­ ''Everyone of you [politicians] run for re­ similar health care budgets for individual ployer mandates will cause job loss, fewer election on the premises of keeping Mon­ states and regional alliances. It can order re­ jobs created and lower pay. tanans employed. We do keep 70 Montana ductions in payments by health alliances to National Association of Self-Employed sur­ people employed year in and year out. If health plans and, as a result, to doctors and vey of 500 members--11/19/93 . 24 percent said [honorable sirs] vote in a mandate on a hospitals. It can tell the Department of an employer mandate would have a signifi­ health care system you are automatically Health and Human Services to take over a cant effect on wages and profits. adding a minimum of 10 people to the unem­ noncomplying health alliance. It will deter­ 29 percent said an employer mandate would ployment rolls."- Howard B. Hanger, mine how much insurance premiums can go cause them to sharply cut wages and jobs. Thriftway Family Market, Missoula, MT. up. It will interpret and adjust the standard 25 percent said an employer mandate would " Our business, employing 23 people, is a benefits package. It will have a role in the cause them to close their doors. service business which provides meals to the pricing of breakthrough drugs. It will estab­ elderly in North Louisiana parishes. Man­ lish advisory commissions. And it will have SMALL BUSINESS OWNERS SPEAK OUT ON dated health insurance, or an employer man­ broad rulemaking authority to carry out any EMPLOYER MANDATED HEALTH INSURANCE dated tax plan to pay for health reform, will aspect of the bill. "I am a small-business owner (25 employ­ simply LOCK THE DOOR to this business. What about the regional alliances? They ees) working very hard along side my hus­ This cost cannot be passed on. "-Gail Elkin, will not only negotiate health care prices on band to build a future for ourselves. Bountiful Foods, Monroe, LA. behalf of small business owners and individ­ "We do not have a profit margin to support " I am close to having to close my doors uals, as was the original purchasing coopera­ the President's proposed 80 percent burden of now because of taxes. That means it could be tive concept. They will require alliance par­ health insurance costs. Even with the pro­ the end of employment for 6 people if I am ticipation by every employer with fewer posed subsidies, a 3.5 percent rise in payroll forced to pay out any more."-Violet K. Hin­ than 5,000 employs along with individuals. costs will seriously challenge our ability to ton, Attorney at Law, Battle Creek, MI. 15806 CONGRESSIONAL RECORD-SENATE July 11, 1994 "According to the premium amounts pub­ local governments. However, regardless of three main objectives without placing an lished under Clinton's proposals (assuming who determines what is in a "basic standard undue burden on small business, creating a we pay 80 percent of $4200 family premiums benefits package," care must be taken to en­ huge new bureaucracy or damaging our econ­ for all 43 of our married employees), our sure that the plan is at a level necessary to omy. medical premiums would increase $77,360/ assure adequate coverage and care, but re­ year. This represents an 84 percent increase! mains affordable. As such, we should con­ [From the Wall Street Journal, Apr. 19, 1994) If our premium requirement is capped at 7.9 sider the packages developed by the most ef­ ENRAGING SPECIES ACT percent of payroll, our annual premium ficient and cost-effective health mainte­ The Third Amendment to the Bill of would increase $44,300. This would be a 48 nance organizations. Developing "Fortune Rights states that no soldier can "be quar­ percent increase!"-Jack Miner, Timber By­ 500" type packages that are too generous tered in any home, without the consent of Products, Inc., Albany, OR. will price them out of the reach of individ­ the owner." Somehow, though, it apparently "I am afraid for myself, my 240 employees, uals and small business owners. never occurred to the Founding Fathers that and the viability of my business. We have Attempts to control costs by imposing we might someday need an amendment quite a few employees, but the average wage spending restraints or "global budgets" fail against the arbitrary "quartering'' of endan­ is under $20,000 a year. We are a small busi­ to address the root causes of the problem and gered species on private land. Good thing the ness, and our expansion and jobs will die should be avoided. Many have suggested the Founders didn't live to see the day, ours, from lack of profit. If we are put at a com­ imposition of "global budgets"-caps on when property owners all over America petitive disadvantage because we are over 75 overall health care spending-in order to would be told to idle their land and effec­ employees, . the business itself could be in bring health expenditures under control. tively use it only as a wildlife refuge. peril."-David Evans, CRIC Ltd., Cedar Rap­ However, NFIB believes that global budgets Ambitious government "ecosystem man­ ids, IA. are fundamentally unworkable and will lead agement" plans are locking up millions of "Bridge Builders, Inc. is struggling to con­ to increased rationing of health care. Cur­ acres of private land-without compensation. tinue furnishing health care insurance for rently, most experts agree that we do not Take the spotted owl, which has effectively employees and families-with employees possess the relevant data on which to base halted most timber production in the Pacific sharing one-half of the cost. Today, if we such allocations. Further, global budgets do Northwest. The Anderson & Middleton Log­ were required to do much more than we're not address the root causes of health care in­ ging Co. has been enjoined from harvesting already doing, then. we may as well close the flation, nor do they provide any incentives any timber on 72 acres of its land in Wash­ doors and let the government take care of to increase efficiency in delivery of care. ington state. No spotted owls live on its us. "-Dean I. Gillespie, Bridge Builders, Inc., Changing our medical malpractice laws. land, but two have been seen nesting on gov­ McMinnville, TN. The current malpractice crisis only adds to ernment land 1.6 miles away. A SMALL BUSINESS HEALTH REFORM AGENDA the already astronomical cost of treatments, Residential owners are also affected: Marj Following is a list of guiding principles services, medical devices and pharma­ and Roger Krueger spent $53,000 on a lot for which NFIB believes any comprehensive re­ ceuticals, and inhibits research and develop­ their dream house in the Texas Hill Country. form plan should follow. Taken together, we ment of new products. We believe that seri­ But they and other owners have been barred believe these measures will increase access ous reform of the medical liability system from building because the golden-cheeked to affordable health coverage and help to can reduce the overuse of excessive and cost­ warbler has been found in "the canyons adja­ contain cost increases. While the list is not ly defensive medicine and save about $30 bil­ cent" to their land. all-inclusive, it does represent the result of lion a year. The government justifies these restrictions numerous surveys of small business owners Implementing administrative and paper­ by noting that the Endangered Species Act over the last several years. work reforms. As much as one quarter of bars actions that "harm" critters protected Health insurance purchasing groups should every health care dollar in U.S. goes to pa­ under it. The U.S. Fish and Wildlife Service be formed. By joining together to purchase perwork and administrative costs. Econo­ interprets that to include any action that re­ health insurance, small businesses and indi­ mies of scale for small firms mean that more sults in "significant habitat modification" viduals can reduce costs through administra­ of their health care dollar-usually more that could affect the "breeding, feeding or tive savings and risk-sharing. than twice as much as large businesses-goes sheltering" patterns of a species. It has is­ Self-employed business owners should be to cover paperwork and administrative costs. sued countless edicts barring even such ordi­ allowed a permanent 100 percent tax deduc­ As such, simplifying paperwork require­ nary uses of property as clearing brush or tion for health insurance premiums. Self-em­ ments and reducing administrative costs harvesting trees because they might "mod­ ployed business owners such as sole propri­ must be a part of any health care reform. ify" nearby habitat. etors, partnerships and S-corporations are Consumer information and education is es­ Even some environmentalists have ques­ allowed only a 25 percent deduction; that de­ sential. NFIB strongly believes that in­ tioned if Congress intended such restrictions. duction is temporary. Expanding and making formed consumers make more cost-conscious Michael Bean, chairman of the Environ­ permanent the tax deductibility of premiums decisions relating to their health care. Cur­ mental Defense Fund's Wildlife Program, has would enable many of the nearly five million rently, part of the reason that health care noted "there are forceful arguments that uninsured self-employed to buy coverage for costs are going up so rapidly is due to the such a broad interpretation" is "improper." themselves and the millions they employ. fact that consumers have lost their buying Last month, the U.S. Court of Appeals for Insurance company practices should be re­ power in the health care market. Most the District of Columbia agreed. It invali­ formed to make health insurance coverage Americans are shielded from the true cost of dated the U.S. Fish and Wildlife regulation easier and less expensive to buy. Being able their insurance coverage and the cost of that prevented habitat modification on pri­ to count on obtaining insurance with fairly medical care, largely because the premiums vate land. The court ruled that the regula­ stable premiums would enable more small are borne by employers. As a result, there is tion "was neither clearly authorized by Con­ business owners to purchase coverage for little or no incentive to search out the high­ gress nor a 'reasonable interpretation' of the themselves and their employees. Specifi­ est quality health product at the lowest cost, statute." cally, any reforms in this arena should in­ a theory fundamental in the purchasing of The court's decision enraged radical envi­ clude elimination of the preexisting condi­ most other goods. ronmentalists. They support a provision to tion limitation, guaranteed access to poli­ While no health reform bill will be a per­ the Marine Mammal Protection Act now be­ cies regardless of medical condition, guaran­ fect one, NFIB strongly believes that we fore Congress that would explicitly allow the teed renewable and portability. need to enact a reform package that achieves regulation of private land use and would bol­ Costly state benefits mandates and anti­ three main objectives: (1), bring down the ster the Clinton Administration in its at­ managed care laws should be preempted. En­ cost of health insurance; (2), stabilize the tempt, which it announced yesterday, to actment of certain state laws have signifi­ often unpredictable/fluctuating health insur­ overturn the D.C. Court of Appeals decision. cantly limited the availability of affordable ance system for small firms and individuals; The Senate refused to include such lan­ health plans and discourage the growth of and (3), expand insurance coverage to more guage in its version of the bill, but it may managed care systems. State mandates alone Americans. wind up adding it in conference if the House can raise the cost of insurance 30 percent. NFIB members support the President's re­ insists. Today, Rep. Gerry Studds will de- · Pre-empting these mandates and repealing form goals. They believe, however, that the mand a House vote to insist the regulatory many restrictive state anti-managed care plan proposes too much, too soon, through language be retained. Environmental groups, laws would allow small business owners easi­ questionable and untested economic means. agitated by recent property rights victories er access to affordable plans and greater ac­ The Health Security Act will affect each and in Congress, are determined to prevail this cess to cost-saving managed care arrange­ every business differently. A broad brush ap­ time. ments. proach on an issue this critical to individ­ The dispute over endangered species isn't A uniform, affordable standard benefits uals and employers is unwise. Instead, Con­ over whether or not society should protect package should be developed in consultation gress should consider the several comprehen­ them. It's between a policy that refuses to with business, consumers, and state and sive, viable alternatives that accomplish our set priorities and insists on preservation no July 11, 1994 CONGRESSIONAL RECORD~SENATE 15807 matter what the costs to the human species they broke the law-that this has tween labor and management. That is or, alternatively, a more balanced approach. opened the door, and now employers going to be the result of this legisla­ We are hard put to see how the species act are routinely referring to the practice tion. Basically we are going to be tell­ can itself survive politically operating as an ing the employer you cannot hire a re­ environmentalist land grab of other people's of hiring permanent replacement work­ property. The seriousness of the claims for ers. placement worker during a strike. So these various species might be better tested That is not the case. Studies by GAO, organized leaders of organized labor are if the government had to compensate land­ both in 1985 and in 1989, said that only going to be saying, "Wait a minute. owners for their losses. That approach isn't 3 to 4 percent of striking workers were You can join our union, you can strike, just our idea; it is the "takings" clause of permanently replaced. and they cannot replace you. So we the Fifth Amendment to the Bill of Rights. I think it is important that we stick have tremendous clout. We have tre­ Mr. CRAIG. Mr. President, once to facts. And the facts are that workers mendous clout, if necessary, to bring again let me close by saying today we have the right to organize. They have this company to their knees in order to have proven law in this country, law the right to bargain. They also have achieve our objectives through this that has maintained the kind of bal­ the right to strike. Currently, employ­ labor battle or through this confronta­ ance that has historically brought the ers have the right to hire permanent tion." So there will be more strikes. employee and the employer to the bar­ replacement workers during an eco­ More people will lose their jobs. gaining table with a sense that there nomic strike. We should keep that What about the people that are de­ was equality in the negotiating envi­ right. If we do not, we are basically pending on that company for parts for ronment. That is what we ought to be telling organized labor this is no longer supplies? A lot of companies need that promoting in policies for economic a level playing field; they have not supplier to be able to provide jobs. And growth and development in this coun­ only the right to strike, but are guar­ so, not only would there be a loss of try, and this is why I stand strongly in anteed the right to win the strike. For jobs in the company that has a strike, opposition to S. 55. over 50 years, that has not been the there would be a loss of jobs in other Several Senators addressed the law, and it should not be the law. companies which depend on the strik­ Chair. Unions should have the right to go on ing company for its business. I think The PRESIDING OFFICER (Mr. strike and withhold their services. But that is the most devastating aspect of DECONCINI). The Senator from Okla­ likewise the employer has to have the this bill. homa. right to hire permanent replacement So this bill, as I see it, is not a bill to Mr. NICKLES. Mr. President, I know workers and keep their doors open. protect strikers. This is a bill, if we are my colleague from Iowa is here, and I I heard my friend and colleague, Sen­ not careful, that will encourage inquire of him how long he is planning ator METZENBAUM from Ohio, state strikes, cost jobs, put people out of on speaking. that Republicans are antiworker, that work, and make us less competitive. Mr. HARKIN. I am glad the Senator they opposed increases in the minimum I might say, Mr. President, I read was recognized. I have quite a speech. wage, that they opposed the family and Labor Secretary Reich's letter to the It will be a long time. medical leave bill, and some were op­ Senate encouraging people to vote for Mr. NICKLES. I thank my friend and posing the health care bill. I would dis­ this bill. I could not help but almost colleague. I will not be quite that long. agree. I would disagree very strongly. laugh to myself. In his letter he says: Mr. President, I wish to congratulate To compete effectively in the international But I look at some of the agenda that economy, America needs a framework for and compliment Senator KASSEBAUM the Senator from Ohio was referring to, labor relations that stimulates productivity and Senator COHEN as well as Senator and I see some of that agenda with and enables management to tap the maxi­ CRAIG for their speeches. I think they good titles being very antiworker, in­ mum of employees' skills, talents and ef­ made some excellent points in defining cluding the legislation that we have be­ forts. and outlining this debate on S. 55, the fore us. I agree with that statement. But this so-called striker replacement bill. I think if we pass this bill that says bill does not do it. The Labor Sec­ Mr. President, first let me just make you cannot hire permanent replace­ retary's letter continues. He says: a couple comments concerning some of ment workers during a strike, it is We can turn our attention towards a more the arguments made in favor of this very antiworker because the net result cooperative labor management future. legislation. I have heard my friend and of it would be we are going to have This bill does not do it. It does just colleague, Senator METZENBAUM, say more strikes. A lot of people are going the opposite. This bill should be enti­ that we needed to pass this legislation to lose jobs. Strikes costs jobs. Some tled "A Bill to Encourage Labor Strife in order to restore the right to strike. people cannot survive during a strike. and Strikes." This legislation is going This legislation does not do that. The I worked for a company during a to tell one side, "Hey, you cannot lose. right to strike already exists in cur­ strike. I can tell you that strikes are You can go on strike and you cannot rent law. I have heard Senator not pleasant. They are not fun. They lose your job, so you can withhold your WELLSTONE say we need to pass this are not fun for the ~mployers, and they services without risk. You have the legislation in order to have the right to are not fun for the employees. We right to bargain. You have the right to organize and to bargain collectively. should be doing what we can to dis­ organize. You have the right to strike. You do not need to pass this legislation courage strikes. So you can withhold services but they to do that. Employees have the right to I hate to tell my friends, particularly cannot replace you." organize; they have the right to bar­ the sponsors of this legislation, that So the net result is a lot of compa­ gain collectively, and they also have this is a bill to encourage strikes. We nies will lose. Maybe they will give in the right to strike. have very few strikes percentagewise to organized labor, if they can afford it. Passage of this legislation would in the United States today. I think But if they cannot, they may cut jobs. undo over 50 years of labor manage­ that is good. I hope we have less. But I They may lose competitiveness, they ment law, and would basically tell em­ can almost guarantee you that if this may lose future contracts, or they may ployers that they could not keep the legislation passes, we are going to have close the doors. A recent Teamsters' doors open. They could not hire perma­ more. We are going to have more labor strike-! remember reading that a nent replacement workers. unrest. We are going to have greater truck firm closed down and thousands I might mention that some people tensions. We are going to have greater of jobs were lost. Why? Because they have implied during the course of this battles between labor and manage­ were involved in a strike, and they debate that this is so imperative, so ment. There is going to be greater were not survivors in that strike. important because of the P A TCO strife and less cooperation in the work­ Strikes, in my opinion, Mr. Presi­ strike-because Ronald Reagan proved place. dent, are a lose-lose situation. I do not that workers were striking against the I hate to see that happen. I hate to see them as healthy. I want to discour­ law and he fired those workers because see that kind of conflict evolve be- age strikes, and I am afraid that ·this 15808 CONGRESSIONAL RECORD-SENATE July 11, 1994 legislation before us will encourage it takes away the right to collectively past, we had people in the United strikes. It will encourage labor strife. bargain. States-African-Americans, for exam­ Mr. President, I think it would be a se­ Again, I think if you ask any Amer­ ple, in many parts of the South-and, rious mistake. ican-and we have heard some polls, oh, sure, the Constitution guaranteed I also heard some of our colleagues data, proffered by the Senator from them the right to vote. They had the say that, well, we are trying to restore Idaho earlier-! think if you ask any right to vote. But because of poll taxes balance between labor and manage­ American whether or not individual and tests they had to take, to pass, in ment. Frankly, labor and management workers ought to have the right to bar­ order to vote, they really did not have have been working off the National gain collectively for wages, hours, and the right to vote. So it became a hol­ Labor Relations Board going all the conditions of employment, the vast low right. We recognized that, and that way back to 1935, and have been under majority of Americans would say yes. is why we had to pass the Voting a ruling under a Supreme Court case They probably never heard of the Wag­ Rights Act, to make sure that the right going all the way back to 1938 that al­ ner Act or the National Labor Rela­ to vote was not indeed just a hollow lows employers to hire replacement tions Act. They have never heard of right. · workers for an economic strike. So these. But I think inherently they So today in America the right to bar­ things have not changed. would feel that free people working to­ gain collectively is really a hollow It is the proponents of this legisla­ gether ought to be able to join together right. Sure, you can go through the tion that are trying to change the bal­ in an association or union and to bar­ motions, and unions do it. They can sit ance. This balance in the United States gain with their employer for wages, down and bargain. Take the recent ex­ has worked fairly well for over 50 hours, and conditions of employment. perience with UAW and Caterpillar. years. We have strikes less often than I think the vast majority of Ameri­ They were going through a negotiation most other countries. Why should we cans would support that, and I think process on a new contract. Well, I am want to have more? There is an equi­ the polls show that. But that right to not going to interfere and say who was bargain collectively becomes a hollow right or wrong, that type of thing. But librium between labor and manage­ all I know is that it broke down. The ment. This bill would greatly distort right when there is no right to strike, union went out on strike. The first that. or when a laboring person comes to the thing the Caterpillar management said Again, I think it would be a serious bargaining table to bargain with man­ was that they were going to hire per­ mistake, and ultimately will hurt agement. There is only one thing that manent replacement workers-holding workers. I do not see this legislation as worker has to bring to that table, and that as a threat over the union employ­ being worker friendly. I think it is just that is the sweat of his or her brow, ees. So, again, there really is no right the opposite. This bill is strike friend­ their expertise, their knowledge, their to strike. ly. It is not worker friendly, and experience, but basically their labor. I guess there is a right to strike; I strikes are not friendly to workers. They have no money to bring, no eco­ should correct that. There is a right for So I urge my colleagues to vote nomic clout. They only bring what you to quit your job, because that is against the motion to proceed to S. 55. they can do, and that is their labor. really what it amounts to. Labor only Mr. President, I yield the floor. So, therefore, the only chip they really has one right today in the bar­ Mr. HARKIN addressed the Chair. have to put on that table is their labor gaining field-the right to quit their The PRESIDING OFFICER. The Sen- and the threat to withhold that labor if jobs and walk away. So what has hap­ ator from Iowa. in fact management does not bargain pened is that we have had a breakdown Mr. HARKIN. Mr. President, I am in good faith and negotiate a binding in this structure in America. going to have quite a bit to say about contract. Mr. President, I was intrigued by an this legislation, S. 55. I will take a lit­ Well, that right to withhold that article that came out in the May 23, tle bit of time today and I hope to take labor is what is called the right to 1994, issue of Business Week. Business some more time tomorrow, because I strike. The right to strike has been Week is not known for being a real ad­ believe that the whole story on this upheld many times by our courts. It is vocate of unions and union labor. It is, bill and what it seeks to correct is real­ a thing I think most people would rec­ as it says, a business magazine which ly not being told. I hope to take, as I ognize that working people have. caters to the business community. But said, some time today and some time I must ask, Mr. President, what kind it had a very interesting article in tomorrow to lay out the case both his­ of a right is it when, if you exercise there. When I get through reading it, I torically and in terms of what is hap­ that legal right, your employer can say will ask that it be printed in the pening economically and productivity­ goodbye; you are gone; we have re­ RECORD. But first let me read some ex­ wise in this country as to why this leg­ placed you with permanent replace­ cerpts from it. It is entitled "Why islation is sorely needed at this time. ment workers? America Needs Unions But Not The Just sitting here listening to the last So, by definition, today in the United Kind It Has Now." two speakers-both of them good States of America, there is no legal I see my good friend from Utah here, friends of mine, both of them well­ right to strike. And because there is and there is a quote in the beginning of meaning individuals-talk about this really no legal right to strike, there is the article that says: legislation and the need for a level no legal right to bargain collectively. There are always going to be people who playing field, everything it seems has And since there is no legal right to bar­ take advantage of workers. Unions even that to be level between management and gain collectively, there is no level out, to their credit. We need them to level labor. Well, we all agree with that. playing field. In fact, there is really no the field between labor and management. If That is what it ought to be. But I must playing field, let alone a level or un­ you didn't have unions, it would be very dif­ fi cult for even enlightened employers to not ask how can you have a level playing even one. There is no playing field. take advantage of workers on wages and field, or how can you form an equal Management says you bargain on our working conditions, because of [competition partnership, so to speak, when you terms; you agree with what we want; or from] rivals. I'm among the first to say I be­ hold the gun at the head of one of the you can just go strike. And, by the lieve in unions. so-called partners? That can never lead way, if you strike, we will permanently It went on to say this quote is not to a level playing field nor any kind of replace you. If you are permanently re­ from Senator KENNEDY or Labor Sec­ equal type of footing or relationship. In placed, that means you are out of work retary Reich; it is Senator ORRIN fact, with the ability that the manage­ forever; you lose all your pension HATCH of Utah. I do not know if it is an ment has today, in order to fire or to rights; you lose your seniority; you accurate quote or not. I am just get rid of their striking workers and lose your job forever. quoting from the Business Week maga­ have them permanently replaced, real- In fact, Mr. President, the right to zine. . ly takes away the right to strike. Not strike today is, by any measure, a hol­ But what the article goes on to say is only does it take away that right, but low right. It is a hollow right. In the that: July 11, 1994 CONGRESSIONAL RECORD-SENATE 15809 * * * when pressed, even he concedes a This Workplace Fairness Act, S. 55, UA W members replaced at Colt Fire­ point that's of growing concern to econo­ restores a fundamental principle of arms; 6,000 TWA flight attendants lost mists, administration officials, and some ex­ labor-management relations, the right their job to permanent replacements; ecutives: Free-market economies need healthy unions. They offer "a system of of workers to strike without having to 2,500 paper workers disposed of at checks and balances," as former Labor Sec­ fear the loss of their jobs. International Paper mills; 35,000 pilots retary George P. Shultz has put it, by mak­ Too often in today's workplace, and machinists fired from their jobs. ing managers focus on employees as well as workers are forced to choose between Thousands more working men and on profits and shareholders. their jobs and their legal right to women who dared to try and exercise Now, we have heard all this talk strike for better wages, benefits, and their legal rights have lost their jobs about leveling the playing field, have working conditions. That has not al­ to permanent replacements. we not? Listen again to this, regarding ways been the case. Mr. President, where is the incentive George Shultz, a well-known Repub­ Again, in response to widespread for employers to bargain in good faith lican: abuses, union busting, in 1935 we passed if they can displace those who disagree The concern of Shultz and others is that the National Labor Relations Act, as I with them? Some employers go so far the balance has shifted significantly. Since mentioned earlier the Wagner Act, to advertise permanent replacements 1983, union membership has fallen 6 percent, signed into law by President Roosevelt. before they begin negotiations. In to 16.6 million, or 15.8 percent of the The Wagner Act guarantees workers other words, it had always been a prac­ workforce-the lowest since the Great De­ the right to organize and bargain col­ pression. Subtract Government employees, tice by companies in the past to per­ and unions represent a mere 11 percent of lectively and strike if necessary. It haps stockpile raw materials, and private-industry workers, a figure that by makes it illegal for companies to inter­ things like that, in anticipation of a 2000 could plunge to 4 or 5 percent, some ex­ fere with these rights. In fact, it spe­ strike, and this has been a well-accept­ perts say. cifically specifies the right to strike ed practice. Unions recognize that. But Labor's fabled bargaining and political and states: "Nothing in this act-ex­ clout largely has vanished, too. now what they do is they stockpile cept as specifically provided herein­ scabs, just like they stockpile raw ma­ The article says, if Senator HATCH is shall be construed so as to interfere terials, and go out and advertise for right: "* * * the drawbacks of with or impede or diminish in any way permanent replacements, build up the deunionization should be appearing." the right to strike." New research from respected econo­ rosters and dare the union to go out on Or affect limits or qualifications on strike. mists at such schools as Harvard and that right. Princeton shows that blue-collar wages These management actions over the If that is part of the law, what has past decade have undermined the legal trailed inflation in the 1980's partly be­ happened? Well, historically what hap­ cause unions represented fewer work­ right to strike. When you deny the pened is that in 1938 the Supreme Court right to strike, you deny the right to ers. The resulting drag on pay for mil­ dealt the Wagner Act a mortal blow. lions of people accounts for at least 20 bargain for better wages, and when you We all know the case, the famous case destroy that, you destroy the very fun­ percent of the widening gap between of NLRB versus Mackay Radio and rich and poor, which has reached De­ damental basis for organized labor in Telegraph Co. In that case the Supreme America. And in doing so, you destroy pression-era dimensions. Court-and basically this was not even The article goes on: motivation, incentive, productivity, the ruling of the Supreme Court; the and competitiveness. The President's annual economic report, ruling had to do with something else­ released earlier this year, cited these find­ but in dicta, in sort of its discussion of You destroy our best opportunity to ings and called the new income disparities "a move forward as a Nation into an era threat to the social fabric that has long the case, the Supreme Court said that of high wage, high skilled, highly pro­ bound Americans together." Mackay Radio and Telegraph Co. could Experts cite weakening unions as a key hire permanent replacement workers ductive jobs that serve us well in the reason for the 6-percentage-point slide in the for those engaged in an economic global marketplace. 1980's in the share of employees with com­ strike. Mr. President, I have more to say pany pension plans, for the 7-point decline in And this has been taken sort of as about this bill. But suffice it to say, those with employer health plans, and for a law ever since then. But as speakers this bill, more than anything else, is a 125-fold explosion in unlawful-discharge suits bill that will once again get America now that fewer employees have a union to before me have pointed out, enlight­ ened management at that time saw started on the path of being competi­ stick up for them. tive in the world market. The Business Week article goes on to that it was in their best interests to not use that dicta, that reasoning of I recommend to my colleagues to say: read the Business Week article of May The surprising implication, in fact, is that the Supreme Court in that case, which, the U.S. might be better off, socially and by the way, the ruling in that case in 23, 1994, to read it and to see what it perhaps even economically, with a healthier fact found for the workers in terms of says in there about the need for unions union movement. their rights to be reinstituted and the and what unions can do to help get us Mr. President, that is pretty inter­ fact that the company itself had acted on the path toward higher productiv­ esting coming from Business Week illegally in not permitting certain ity. magazine. ·union activists to come back to work. But with what we have in front of us What does that have to do with the But, as I said, this was in the discus­ now, with the permanent replacement bill in front of us? It has everything to sion of it, and the Court went on a lit­ to strikers, with the destruction of or­ do with this bill. I argue, as economists tle bit further to give them the right to ganized labor, I fear that we are on the are arguing now, and some of them hire permanent replacements. But ever path toward less competitiveness and very conservative economists, that we since then, companies have not done less productivity, less motivation, and must halt this slide into unionization that because they recognized that it less incentives for workers in this in America; that we really need unions would upset this level playing field. country. for higher productivity and wages and For almost 40 years, nothing was done So that is a sad day. When we hear better skills. by management in any case to hire per­ all this talk about level playing field, And in order to stop that slide, we manent replacements. But then it let us remember there is not even a have to stop the practice of permanent started happening in the 1980's. playing field out there now. That field replacing those workers who have gone Permanent replacement became a is gone. If we really want to truly have out on strike. regular tool to break unions and shift a level playing field, then we should This bill is a proworker, pro­ the balance between workers and man­ pass this legislation and, Mr. Presi­ productivity, procompeti tiveness bill agement. dent, it is clear that the votes are here that we have before us and we should More than 3,500 Continental Airline in the Senate to pass this bill. We have have passed it long ago. pilots replaced by Frank Lorenzo; 1,100 a majority to pass it. But those who 15810 CONGRESSIONAL RECORD-SENATE July 11, 1994 are so opposed to this bill are filibus­ SCARY GAP nominate a board member in return for tering it and, therefore, we will prob­ They are. New research from respected backing teams and other efficiency meas­ ably not get to whether we vote on this economists at such schools as Harvard and ures. Declares Ernest J. Savoie, who heads bill or even amend it. There may be Princeton shows that blue-collar wages Ford Motor Co.'s cooperative labor pro­ some amendments offered to this bill trailed inflation in the 1980s partly because grams: "If unions were to disappear, the unions represented fewer workers (charts). country would be in serious trouble." that might improve it. I do not.know. The resulting drag on pay for millions of Most employers couldn't agree less. Few But we probably will never get to that people accounts for at least 20% of the wid­ American managers have ever accepted the point because of the filibuster. It takes ening gap between rich and poor, which has right of unions to exist, even though that's 60 votes to break the filibuster, and ob­ reached Depression-era dimensions. The guaranteed by the 1935 Wagner Act. Over the viously it does not appear right now President's annual economic report, released past dozen years, in fact, U.S. industry has that we have those 60 votes. But I am earlier this year, cited these findings and conducted one of the most successful hopeful that we do. I hope that those called the new income disparities "a threat antiunion wars ever, illegally firing thou­ who are opposed to the bill will at least to the social fabric that has long bound sands of workers for exercising their rights Americans together." The full scope of that to organize. The chilling effect: Elections to give us the right to bring it up, to de­ threat remains to be seen, but the early form a union are running at half the 7,000-a­ bate it, to vote on it to amend it if nec­ signs are disturbing: Experts cite weakening year pace of the 1970's. And major strikes­ essary, and pass it. The House has unions as a key reason for the six-percent­ involving 1,000 or more workers-have fallen passed the bill. It is clear that a clear age-point slide in the 1980s in the share of from 200-plus a year to 35 in 1993. To ease up majority in the House voted for it and employees with company pension plans, for now, many executives feel, would be to passed it. the seven-point decline in those with em­ snatch defeat from the jaws of victory. I think it is clear that a majority of ployer health plans, and for a 125-fold explo­ Most managements detest unions out of a the Senate would vote for it, too, if we sion in unlawful-discharge suits now that belief that they impede productivity and only had the ability to get past the fili­ fewer employees have a union to stick up for raise wage costs. That's partly true. Numer­ them. ous studies have confirmed that unions re­ buster. The surprising implication, in fact, is that duce profits, especially in such industries as Mr. President, I ask unanimous con­ the U.S. might be better off, socially and steel and autos, where workers got a healthy sent to print, at the end of my re­ perhaps even economically, with a healthier share of outsized, oligopolistic earnings in marks, the article from Business Week union movement. That could be true espe­ the '50s and '60s. Now that the oligopolies are magazine of May 23, 1994. cially if the 86 unions of the AFL-CIO follow being undercut by global competition and There being no objection, the article through on a February report that urges deregulation, "large employers no longer was ordered to be printed in the labor to become partners with management have oligopoly profits to share with unions," RECORD, as follows: in boosting efficiency. This is an unprece­ says Samuelson. WHY AMERICA NEEDS UNIONS dented endorsement of alternative systems­ Still, unions are often blamed for more including self-managed workplace teams­ (By Aaron Bernstein) trouble than they've caused. In the 1970s, for that already have fed big efficiency gains at instance, many executives believed that "There are always going to be people who such companies as Ford, Xerox, and Scott unions inflated prices by lifting wages above take advantage of workers. Unions even that Paper. "If unions help improve productivity some presumed market level. Since then, out, to their credit. We need them to level with ideas like teams, they can justify high­ however, more than 50 quantitative studies the field between labor and management. If er wages and their existence," say Paul A. have concluded that the higher productivity you didn't have unions, it would be very dif­ Samuelson, the father of neoclassical eco­ of unionized companies offsets most of their ficult for even enlightened employers to not nomics and professor emeritus at Massachu­ higher costs. "It's a misreading of economic take advantage of workers on wages and setts Institute of Technology. working conditions, because of [competition analysis to conclude that unions inherently The AFL-CIO's action, in fact, may help cause inflation or unemployment," says from) rivals. I'm among the first to say I be­ legitimize the most important development lieve in unions." Nobel laureate Gary S. Becker, a conserv­ in U.S. labor relations in generations. Here ative economist at the University of Chi­ Ted Kennedy spouting tired liberal dogma? and there, traditional adversarial bargain­ Labor Secretary Robert B. Reich pandering cago. "Some kind of union behavior is bad, ing, which evolved 60 years ago in response but unions that help workers bargain collec­ to President Clinton's union backers? Nope. to Frederick W. Taylor's ''scientific manage­ The speaker is Senator Orrin G. Hatch (R­ tively instead of individually perform a le­ ment" methods of dividing work into its gitimate role that's not counter to social ef­ Utah), labor's archrival on Capitol Hill for simplest tasks, is being replaced by a more nearly two decades. Don't misunderstand: ficiency." Hatch still opposes organized labor at nearly flexible, participative approach as companies George Shultz, now a fellow at Stanford every turn. But when pressed, even he con­ flatten hierarchies. "Unions helped make University's Hoover Institution, goes fur­ cedes a point that's of growing concern to Taylorism work in the '30s and '40s by insti­ ther. "As a management person, if I don't economists, Administration officials, and tutionalizing its principles" in labor con­ have a union, I don't want one," he said in a some executives: Free-market economies tracts, says MIT management professor 1991 speech to the National Planning Assn., a need healthy unions. They offer "a system of Thomas A. Kochan. "We need to [do) that labor management group. "But ... look at checks and balances," as former Labor Sec­ today through cooperative labor mecha­ this more broadly. Free societies and free retary George P. Shultz has put it, by mak­ nisms." trade unions go together. Societies are miss­ ing managers focus on employees as well as PARTNERS ing something important if they do not have on profits and shareholders. Xerox Corp. and its 6,200 U.S. copier assem­ an organization in the private sector, such as The concern of Shultz and others is that blers, who belong to the Amalgamated Cloth­ a trade union movement" that gives workers the balance has shifted significantly. Since ing & Textile Workers Union (ACTWU), are the clout labor has exerted to help pass safe­ 1983, union membership has fallen 6%, to 16.6 proving that this works. Three tries at team­ ty and pension laws. million, or 15.8% of the workforce-the low­ work since 1982 have fared so well that Xerox Shultz's notion is taken for granted in est since the Great Depression. Subtract gov­ is bringing 300 jobs from abroad to a new most of the industrialized world. True, Eu­ ernment employees, and unions represent a plant in Utica, N.Y., where it expects higher rope's recession has set off nasty clashes be­ mere 11% of private-industry workers, a fig­ quality and savings of $2 million a year. tween unions and companies bent on cost­ ure that by 2000 could plunge to 4% or 5%, Xerox gives union officials internal financial cutting. Still, say European labor experts, some experts say. documents and teaches them statistics in most companies there continue to see unions Labor's fabled bargaining and political the same classes managers take. "I don't as social partners, not enemies. What's more, clout largely has vanished, too. Pay in­ want to say we need unions if that means the every Western European country except creases for union members lagged those for old, adversarial kind," says Xerox CEO Paul Britain and Ireland has a legally mandated nonunion ones from 1983 until the recession A. Allaire. "But if we have a cooperative second channel, such as works councils, for pummeled everyone in 1990. And as labor's model, the union movement will be sus­ advancing worker interests. These groups, 1993 defeat on the North American Free tained and the industries it's in will be more usually elected by employees, provide input Trade Agreement shows, it delivers a competitive." into many managerial decisions. lightweight's political punch compared with This view is spreading among the few The Clinton Administration would make the days when "Clear it with Sidney" re­ dozen major companies developing partner­ this the model for U.S. labor-management ferred to the veto Franklin Delano Roosevelt ships with labor. "There's definitely a place cooperation. A year ago, the Labor and Com­ supposedly gave clothing-union leader Sid­ in American society for unions," says David merce Depts. appointed a 10-member com­ ney Hillman over FDR's 1944 running mate. H. Hoag, chief executive of LTV Corp. In mission composed primarily of academics. In short, if Hatch is right, the drawbacks of 1993, he signed a labor pact with the United Headed by former Labor Secretary John T. deunionization should be appearing. Steelworkers (USW) that lets the union Dunlop, it may ultimately suggest revising July 11, 1994 CONGRESSIONAL RECORD-SENATE 15811 the Wagner Act to ease roadblocks to orga­ $83,400 a year-would have received 61% of ator Hatch agrees: "We need unions to make nizing. In return, some commission members the nation's income, according to a 1993 sure that working people have a legitimate want to amend the act to legalize teams in study by economist Rudy Fichtenbaum at and consistent voice." nonunion companies, which risk violating a Wright State University in Dayton, Ohio. In­ If unions are so important, why are they prohibition against sham unions-groups stead, they got 56% . " White-collar workers going the way ofT. Rex? Certainly, labor it­ that workers seem to run but actually are think unions don't matter, but they're not self hasn't helped. When global competition controlled by management. on a separate boat from blue-collar ones," hit, most unions dismissed employers' de­ AFL-CIO President Lane Kirkland will says Research Director Lawrence Mishel of mands for change as the same old take this trade-off, leaving a divided busi­ the Economic Policy Institute (EPI), a Wash­ handwringing by fat-cat bosses. And as their ness community to decide if teams are worth ington think tank partly funded by unions. ranks thinned, unions were slow to tackle the risk of more union organizing. It isn't There's no way to tell whether the com­ the costly and iffy job of aggressively orga­ clear if it will take the chance. But even the bined income of all U.S. workers would have nizing new industries. National Association of Manufacturers­ been higher had unions not lost ground: No In fact, the 1980s spotlighted the lackluster founder of the Council on a Union-Free Envi­ one has yet proved whether unions push up leadership that has plagued unions for years. ronment-may consider the idea. "Can you overall income or merely redistribute it. But They ·never developed an antidote to union­ fix the management abuses without tilting it's clear who prospered in the '80s. The rent, fighting tactics. And they found no rejoinder the field too much back to labor?" asks NAM dividends, and interest that owners of cap­ when President Reagan labeled labor's mil­ Industrial Relations Vice-President Ran­ ital earned jumped 65%, according to an EPI lions of middle-class constituents a special­ dolph M. Hale. "I'm not sure, but I'm open to interest group. The dour, cerebral Kirkland analysis of Commerce Dept. figures. Wages instead found soulmates among Reaganites listening to the arguments." and salaries, including white-collar ones, who shared his hatred of communism. His ' 'THREAT EFFECT' ' grew only 23%. failure to devise a domestic strategy left While those issues are thrashed out, the ef­ FRAYED FRINGES labor rudderless at its most crucial moment fects of labor's decline pile up. Take infla­ As wages have gone, so have fringe bene­ in half a century. tion-adjusted pay. Historically, it has fits: Most workers have them largely because Still, even a brilliant leader would have tracked productivity. But in the 1980s, out­ of unions, and they're disappearing partly struggled. The shift from factories to serv­ put per worker jumped 12%, while real wages because unions are weaker. Company-paid ices spurred new jobs in industries that tra­ and benefits for all workers rose only 4%, ac­ retirement plans, for instance, caught on ditionally have been hard to unionize. The cording to the Bureau of Labor Statistics. after World War II, when federal wage and effects were compounded by industry's Falling union;sm was a major factor, several price controls prompted unions to demand antiunion fervor in the face of global com­ studies have found. Private-sector unicn pensions in lieu of pay. To keep unions at petition. Other industrialized countries have workers on average earn 39% more in pay bay, nonunion employers followed suit, and shifted to services, yet their unions haven't and benefits than nonunionized ones, accord­ pension plans multiplied. The trend reversed collapsed, Harvard's Freeman says. The dif­ ing to the BLS. And as unions shrank, a ris­ as the union threat shrank. The share of ference, he adds, is the extraordinary opposi­ ing share of workers had to settle for lower­ workers aged 25 to 64 with an employer-paid tion of U.S. managers. paying nonunion jobs. pension plan slid 6 points, to 57%, from 1979 For instance, employers illegally fired 1 of That particularly hurt the least educated. to 1988, according to a 1992 study by Freeman every 36 union supporters during organizing For instance, deunionization accounts for and David E. Bloom, a Columbia University drives in the late 1980s, vs. 1 in 110 in the late one-third of the 15% decline in real earnings economist. "The single biggest reason for '70s and 1 in 209 in the late '60s, according to of white male high school dropouts between an analysis of National Labor Relations the decline," says Freeman- roughly 25%­ Board figures by University of Chicago pro­ 1979 and 1988, according to a 1991 study led by " is deunionization." McKinley L. Blackburn of the University of fessors Robert J . LaLonde and Bernard D. The same goes for health insurance, which Meltzer. Unlawful firings occurred in one­ South Carolina. Weaker unions account for also became a standard benefit after unions third of all representation elections in the half the 10% pay slump of black male high pushed it during the war. Since 1980, the late '80s, vs. 8% in the late '60s, they found. school grads in that period and two-thirds of share of workers under 65 with employer­ " Even more significant than the numbers is the 3% decline for white female dropouts. paid health care has plunged from 63% to the perception of risk among workers, who And the study didn't measure smaller pay 56%, according to the Employee Benefit Re­ think they'll be fired in an organizing cam­ hikes nonunion workers got as the threat of search Institute (EBRI), a Washington re­ paign," says Harvard law professor Paul C. unions subsided. " We ignored the threat ef­ search group. Rising costs are a factor, but Weiler. Indeed, when managements obey the fect, which would make the impact bigger," " coverage would not have dropped as much if law, they don't defeat unions nearly as often. says Blackburn. unions had stayed strong," says EBRI re­ Union membership in the public sector, These figures portray the partial disman­ search director William S. Custer. where federal, state, and local officials don't tling of the middle class. By pushing up blue­ Similarly, fewer workers now have griev­ try so desperately to break or avoid unions, collar pay, unions helped narrow the gap be­ ance systems to protect against mistreat­ has risen by 23% since 1983, to 7 million last tween rich and poor after World War II. But ment. Forced to fend for themselves, they're year. now the trend has reversed. In 1988, white­ filing unjust-dismissal suits, which have ex­ The excuse on which industry based its as­ collar men aged 25 to 64 earned 48% more ploded from about 200 a year in the late 1970s sault-that U.S. labor costs were out of line than blue-collar men of the same age, up to more than 25,000 a year now, experts esti­ internationally-was largely a bogus issue: from 35% more in 1979, according to a 1991 mate. "There's no question that protections Such comparisons sprang mostly from the study by Harvard University economist for workers have gone down with the decline ultrastrong dollar. Now that it's lower again, Richard B. Freeman. Nearly half the in­ of unions," says Theodore J. St. Antoine, a U.S. wages are below Europe's and Japan's. crease reflected falling unionization, Free­ University of Michigan professor who's an BLUNDERBUSSES man found. And for all men aged 25 to 64 , in­ authority on such cases. Companies had a point, though, on produc­ cluding service workers, deunionization Of course, employers don't respond just to tivity. Across the economy, it rose only 1% caused at least 20% of the spike in male wage unions. They react as well to social trends a year in the '70s and '80s, down from 3% in inequality in the '80s. Freeman's findings and market forces, such as the women's the '50s and '60s, meaning that it failed to have been confirmed by recent studies by movement or competition for skilled work­ offset wage growth. Bad management was a Princeton University economist David Card ers. For instance, the share of workers in major culprit. But labor blundered, too: Its and George J . Borjas of the University of midsize and large companies with unpaid contracts made it hard for unionized employ­ California at San Diego. "It's clear that maternity leave-for which unions haven't ers to cut costs as quickly as nonunion com­ deunionizing had an important impact," says pushed hard-rose from 33% to 37% between panies when global competition undercut the Borjas, a political conservative who's no fan 1988 and 1991, says the BLS. And some bene­ pricing power of U.S. industry. As a result, of unions. fits, such as pensions and Social Security, the premium union members earn over non­ Labor's decline has even hurt profes­ have developed their own constituencies. union workers rose from 10% to 15% in the sionals. Traditionally, companies have Unions are the guardians of others, how­ 1960s, economists have found, to about 21% pegged white-collar pay hikes to those won ever. Take safety regulations. The Occupa­ today. That's partly why corporate animos­ by their unionized workers. Nonunion em­ tional Safety & Health Administration under ity toward unions continued even as annual ployers did so indirectly, with salary surveys Reagan and Bush was hands-off agency-and factory productivity growth returned to 3% that cover unionized companies. In the '80s, workdays lost to injuries jumped from 58 to in the '80s and union pay lagged behind infla­ professionals got fatter raises than union 100 workers in 1983 to 86 in 1991. Now, Presi­ tion. members. But they got a bigger share of a dent Clinton is beefing up the agency, partly This attitude may change only if labor em­ smaller pie. because of the support unions gave him. braces cooperation with unprecedented en­ If unions had represented one-third of the That's typical of interest-group politics, thusiasm. Doing so will require unions tore­ workforce in 1990, as they did in 1950, the which experts say works best if all major in­ invent themselves as extensively as execu­ bottom 80% of families-those earning up to terests in society are represented. Even Sen- tives are reinventing the corporation. The 79-059 0 - 97 Vol. 140 (Pt. 11) 28 15812 CONGRESSIONAL RECORD-SENATE July 11, 1994 unions of tomorrow will need to balance bet­ sity of California at Berkeley economist wondered which Supreme Court Justice ter wages with efforts to help employers win David I. Levine and Laura D'Andrea Tyson, had written the offending decision. competitive battles. And in place of adver­ who now heads the Council of Economic Ad­ Naturally, given the sense and level of sarial skills, labor leaders will need expertise visers. These include productivity bonuses, outrage expressed by some in this body in everything from management techniques job security, steps to build group cohesive­ to technology. ness (such as limiting pay differences be­ one would assume that the misguided More fundamentally, unions will need to tween workers and managers), and employee jurist was an appointee of President adopt a "we're-in-this-together" mentality rights (such as protection from arbitrary Reagan or President Bush, perhaps instead of the "us-vs.-them" one that has firings). "A union is one way to do [all] Justice Scalia or even Chief Justice characterized both sides of the industrial di­ that," says Levine, "although it's [not] the Rehnquist. But in fact the judicial of­ vide for decades. "We want a whole new ap­ only way." fender in this instance was Justice proach to how labor and industry can work FUTURISTS Owen Roberts. That is correct. Justice together," says Lynn Williams, a leading ad­ Still, employers that pull all this off, such Owen Roberts. The Supreme Court de­ vocate of labor cooperation who retired in as Motorola Inc. and Procter & Gamble Co., March as USW president. Such views re­ cision we are being asked to overturn have formal mechanisms that protect em­ was written in 1938. Today we are asked ceived an important boost from the AFL­ ployees much as unions do. These include no­ CIO's remarkably self-critical February re­ layoff practices, grievance procedures, and to overturn a decision that was issued port, titled. The New American Workplace: A profit sharing. Moreover, unions can be very more than 56 years ago, a decision that Labor Perspective. It declares that new coop­ helpful when they're willing. In fact, surveys has stood without a challenge for more erative work methods "increase worker op- by the General Accounting Office show that than a half century, a decision that has portunities ... bring greater democracy to alternative work schemes are spreading at been endorsed by successive Congresses the workplace ... and improve the quality, least as rapidly in unionized companies as in since that time. and reduce the cost, of the goods and serv­ nonunion ones. ices." It is interesting to note-in fact it is National Steel Corp., for example, began remarkable-that with all the prob­ This attitude already has begun to filter cooperation two years after Japan's NKK into industries as diverse as farm equipment, Corp. bought 70% of the No. 4 U.S. lems facing our Nation today, the eco­ autos, electrical equipment, garments, min­ steelmaker in 1986. To build trust, the com­ nomic challenges, the budgetary crisis, ing, paper, steel, and telecommunications. pany adopted a no-layoff policy for all 9,500 health care, crime, despite all of these Companies such as Deere, AT&T, and Na­ union members with a year's seniority. problems, some of my colleagues be­ tional Steel are creating completely new Hourly workers act as foremen. And USW of­ lieve that it is more important for the roles for both managers and union officials, ficers get data on everything from earnings Senate to correct what they perceive who collaborate daily on everything from to market conditions-to help them see what work assignments to marketing strategies. to be the mistakes of the pre-World it takes to compete. The payoff: Despite re­ War ll era. The proponents of this bill One early example of this new unionism is cent operational problems that have hurt General Motors Corp.'s Saturn Corp., where profits, the number of hours needed to make have summarized the thrust of their teams of workers largely govern themselves a ton of steel at National's main plant in legislation in the following manner: and union officials are involved at every Ecorse, Mich., has fallen by 33% since 1988, Employees cannot be disciplined or dis­ level of management. to 295-among the industry's best numbers. charged for engaging in a strike but PAPER COPIES National has run ads proclaiming: "We're they can be permanently replaced. The Another is Scott Paper Co., which four partners with labor because we can't imagine proponents assert that because employ­ years ago took a startlingly different tack a future without them." ers can hire permanent replacements than the frontal assault International Paper Even AT&T and the CWA are starting over. Co. had mounted on the United Paper­ In December, 1992, they set up elaborate for striking workers, employees are workers Union in an effort to cut costs. joint structures, such as councils of company discouraged from going on strike. It is Scott and the union formed a committee of and union officials at the local, regional, and harder for ·unions to win strikes. It is 10 top officials from each side who pledged to national level. Now those are paying off. For more difficult for organized labor to "work together to meet the needs of employ­ instance, AT&T's long-distance unit wanted shut down employers, and it causes ees, customers, shareholders, the union, and to evaluate technicians in Virginia for traits greater economic destabilization. the community." They set up teams that that make employees good at customer rela­ Alarmed by these facts, the pro­ give workers more decision-making power, a tions. Technicians feared that those who did ponents have introduced S. 55. Its pur­ move so successful in reducing costs and poorly might be moved or fired. But instead pose is rather straightforward: Change boosting quality that other paper companies, of fighting the effort, the CWA won a guar­ such as Champion International Corp., are antee of no forced layoffs or relocations. The the rules that have governed Federal copying it. "The union can play a key role in profiling has helped to speed up AT&T's labor law for the last 55 years so that our business," says Philip E. Lippincott, who maintenance times, officials say, and now is unions will be able to win almost every retired as Scott's chief executive officer on being expanded to 1,600 technicians nation­ time they go out on strike; change the Apr. 1. wide. "If we had tried to do that absent the rules so that unions can shut down any It isn't easy for unions to make the transi­ union's involvement, we wouldn't have got­ employer whenever they want, for how tion. The days of sitdown strikes and com­ ten as much cooperation from our techni­ long they want, and as often as they pany goons stamped generations of labor cians," says Stan Kabala, the unit's head. want. leaders with a profound suspicion of manage­ The lesson: If organized labor can offer it­ ment. And recent antiunion battles exacer­ self as a partner, it may win at least grudg­ Union leaders understand that cur­ bated this. For instance, the United Auto ing acceptance and carve out a place in the rent law places risks on both manage­ Workers (UAW) advocated cooperation in global economy. If not, its slow fade will ment and labor during labor disputes. 1973 at GM. But a dissident group sprang up continue. And many employees, union and If employers act unreasonably, their to resist in the '80s, when GM shut some nonunion alike, will suffer, whether they employees can go on strike. And, plants that didn't accept teams. And some know it or not. unions understand that if their de­ unions fear that managers use teams to abol­ The PRESIDING OFFICER. The Sen­ mands are unreasonable and they still ish hard-won work rules or dupe employees ator from Utah. go on strike, employers may hire per­ into working harder for no extra pay. Be­ yond that, some experiments in cooperation Mr. HATCH. Mr. President, I listened manent replacements. have left a bitter taste: An early-1980s effort to a number of these remarks here, and Current law is based on the tried and between AT&T Co. and the Communications I have a few things to say. This is a true concept that, by making a strike Workers of America (CWA) failed when very, very important issue. risky for both sides in a collective bar­ lower-level officials weren't included and Mr. President, S. 55 is mistitled the gaining dispute, both sides have a vest­ AT&T cut jobs. Workplace Fairness Act. It is the latest ed interest in finding reasonable solu­ Perhaps the hardest question for unions to attempt by some of my colleagues who tions to their labor disputes. deal with is why they're necessary for a have dedicated their life to overturning Consequently, it is not difficult to high-performance workplace. What really makes empowerment succeed, after all, isn't Supreme Court decisions they find ob­ understand the purpose of the legisla­ unions per se, but employee trust and com­ jectionable. tion. Eliminate the risk for unions mitment. Teams lift productivity most in When I first heard of this particular when they go on strike. companies with four features, according to a bill, which would overturn what has be­ Eliminate the need for economic re­ 1990 review of two dozen studies by Univer- come known as the Mackay doctrine, I sponsibility. You will inevitably make July 11, 1994 CONGRESSIONAL RECORD-SENATE 15813 it easier for unions to go on strike and Today, employees have the right to tions as a method of fixing terms and to win their strikes. By legislative fiat, strike-the ultimate collective bar­ conditions of employment only because S. 55 will provide unions with what gaining weapon that unions can bring the risk of loss to both parties is so they do not enjoy today-unrivaled to bear on an employer's business. great that compromise is cheaper than economic power and control of the But, how an employer responds to economic strife." Charles J. Morris, labor market. That is what they want. that strike depends on what kind of "The Development Labor Law," second Many of us in this Chamber recognize strike it is. ed., at 996. that the role of unions in the work­ If a strike is caused or prolonged by Under current law, employers' de­ place has greatly diminished. Part of an employer's unfair labor practice, mands at the bargaining table are this has been due to economic realities. such as a failure to bargain in good checked by the knowledge that their Part has been due to misguided leader­ faith, striking employees cannot be employees have a most powerful weap­ ship in the union movement. Part has permanently replaced. Let me repeat on-the strike-a weapon that could been due to the passage of legislation myself. If a strike is caused or pro­ cause loss of profits and market share that enhances employee benefits and lop.ged by an employer's unfair labor and could ultimately put them out of protections. And, part of this diminu­ practice, such as a failure to bargain in business. tion is due to a growing sophistication good faith, striking employees cannot Employee's demands, at the same among employers and employees. be permanently replaced. time, are likewise checked by the The relationships between labor and In these instances, under the Na­ knowledge that a call for a strike may management have improved dramati­ tional Labor Relations Act, the em­ be met · by the hiring of so-called cally during this century, as employers ployer is required to reinstate the Mackay replacements. have begun to understand the impor­ strikers to their former positions and The inherent uncertainty about what tance o~ maintaining positive relation­ may be liable for substantial amounts will happen when both sides resort to ships with their workers. ofbackpay. their ultimate weapons is an essential For all of these reasons, the AFL--CIO If, on the other hand, the strike has element in the dynamics of collective is no longer the economic power it was nothing to do with any wrongdoing by bargaining. Most importantly, it pro­ 50 years ago, 20 years ago, or even 10 the employer and is purely over eco­ vides the strongest possible induce­ years ago. But it is still a most for­ nomic terms, such as an increase in ment for both groups to negotiate in midable political power, if not the wages, an employer may take a variety good faith and to resolve their dif­ most formidable political power in this of steps to withstand the strike, in­ ferences without resorting to such area. cluding hiring permanent replace­ measures at all. No observer of Congress can deny ments. S. 55 proposes to change this level that the AFL--CIO still wields much In these cases, strikers who have playing field on which labor and man­ power in the Halls of the House and been replaced and seek to return to agement have long operated. Senate. work retain their status as employees A level playing field does not guaran­ In the past, the AFL--CIO liked to and must be reinstated as positions be­ tee that parties bring either equivalent boast that they controlled the agenda come available. strength or wisdom to any particular of the U.S. Congress. While that may If the employer has done nothing labor dispute. be a bit of an overstatement today, it more than resist a union's economic Nor does it guarantee that the re­ is true that they still have the ability demands at the bargaining table, the sults of any labor dispute, or the spe­ to demand that the bills they want law has always permitted employers to cific terms of any particular labor con­ Congress to vote on, will be voted on. keep operating by hiring permanent re­ tract, are what any of us individually This is a perfect illustration. placements. In fact, as the Supreme would think were either the most fair, Consequently, the unions have de­ Court has stated in Belknap versus most reasonable, or most prudent for cided that they will force Congress to Hale, the "very purpose of enabling an either side. change the rules that have governed employer to offer permanent employ­ Congress has never established itself, Federal labor law for the last 55 years. ment to strike replacements is to per­ or the courts, as an arbitrator to deter­ If they cannot win at the bargaining mit the employer to keep his business mine the terms of collective bargaining table like they did in the past, then running during the strike." agreements. Rather, the true level they will just demand that Congress S. 55, however, would say that an em­ playing field that is part of our na­ change the rules until they can win ployer has no such right. No matter tional labor policy was designed to fos­ again. how outrageous or irresponsible the de­ ter a balance in the legal rights of the The AFL--CIO is demanding that we mands of the union, if the union goes parties. Since the protection of the tilt the balance so far in their favor out on strike, the employer has no right to strike gave unions an ex­ that they can once again force employ­ right to hire permanent replacements. tremely potent offensive weapon, the ers to accept their demands, reasonable The employer's only right under S. 55 law also gives employers the defensive or unreasonable, without any need for is to capitulate to the union's demands weapon of continuing to operate during economic responsibility on their part. or hope the union returns to work be­ a strike. Does anyone in this body really be­ fore the business closes down for good. As described by former Solicitor of lieve that by making strikes risk-free Recognizing the absurdity of this sce­ Labor and NLRB general counsel the for unions that there will not be more nario, for more than half a century, late Peter Nash, strikes? Does anyone really believe American labor law has provided both The hiring of permanent replacements has that the solution to our current eco­ labor and management with a balanced long been recognized as constituting part of nomic problem&-problems com­ set of rights. the legitimate self-help available to employ­ ers in a strike situation and allows the dis­ pounded by the internationalization of Economic weapons and risk are criti­ pute between the employer and its employ­ markets and skill shortages in the cal elements of our national labor pol­ ees "to be controlled by the free play of eco­ labor force-is to encourage the small icy. As the Supreme Court has ex­ nomic forces." Machinists v. Wisconsin Em­ percentage of American workers rep­ plained: "The presence of economic ployment Relations Comm., 427 U.S. 132, 140 resented by unions to go on strike? weapons in reserve, and their actual (1976) (quoting NLRB v. Nash-Finch, 404 U.S. Do we as a body really want to tell exercise on occasion by the parties, is 138, 144 (1971). the American people that we have fi­ part and parcel of the system that the If S. 55 became law, it would insulate nally found the answer to our economic Wagner and Taft-Hartley Acts have striking employees from the risks that woes, and it is to gci on strike? recognized." NLRB v. Insurance Agents, traditionally have acted as a check on The proponents of S. 55 have also 361 U.S. 477, 489 (1960). And, as a leading the voluntary decision to strike over been a little loose with their expla­ labor law expert has noted, economic issues, and would free orga­ nation of current law. "[c]ollective bargaining evidently func- nized workers to command a price for 15814 CONGRESSIONAL RECORD-SENATE July 11, 1994 their labor without regard to the mar­ other cities to take the places of the that the authors of the majority report ket forces of supply and demand. strikers. Subsequently, all but five of have concluded that a statement by The Mackay doctrine, in contrast, the strikers were taken back by the Senator Wagner, the author of the Fed­ serves as an important market check company. eral statute, made a year after the Su­ on opportunistic high demands of The union filed charges with the Na­ preme Court's decision, has no merit. unions as well as on opportunistic low tional Labor Relations Board, charging Perhaps they feel that the statement offers by employers who are prohibited that by failing to reinstate the five re­ by Senator Wagner is also dicta. under this existing doctrine from offer­ maining strikers, the company was dis­ In fact, Senator Wagner's assessment ing replacements a better deal than the criminating against them on account is relevant, because it underscores the one rejected by strikers. of their union activities. The Board, fact that instead of being an aberra­ As one expert has noted in this re­ among other things, ordered the com­ tion, the Mackay doctrine was consist­ gard, "the willingness of workers to pany to reinstate the five with back ent with the legislative history of the cross picket lines and offer their serv­ pay. Wagner Act. · ices on the basis of the employer's final The Supreme Court was asked to re­ A memorandum prepared by the Sen­ offer tells something about the eco­ view the Board's decision, which it ate Education and Labor Committee on nomic reasonableness of the union's de­ upheld. One of the issues before the S. 1958, Senator Wagner's bill, clarified mands." Estreicher, "Strikers and Re­ court was whether the Board lacked ju­ the ability of employers to hire re­ placements," 3 Labor Law 897, 902 risdiction because the company was at placements. It states: (1987). no time guilty of any unfair labor prac­ S. 1958 provides that the labor dispute shall The result of overturning the long­ tice. The Court noted that there was no be current, and the employer is free to has­ standing Mackay doctrine would be an evidence that the company was guilty ten its end by hiring a new, permanent crew increase in the number of strikes, and of any unfair labor practice. of workers and running the plant on a nor­ an increase in the risk of anticompeti­ To explain its conclusion, the Court mal basis. tive collective-bargaining agreements. noted that the company was negotiat­ And, there is more. During the floor Moreover, S. 55 would injure many ing with the authorized representatives debate on the House version of the nonstriking workers and their families, of the union. Then the Court addressed Wagner Act, Representative Fletcher whose livelihoods depend on a function­ the issue of whether its use of replace­ asked whether anything in this legisla­ ing, economically viable employer. ments was an unfair labor practice. In tion would prevent employers from Customers, suppliers, and consumers responding to this issue, the Court out­ bringing in strikebreakers. The bill's would all suffer the burdens of the in­ lined what thereafter became known as floor manager, Representative Connery creased strike activity and the harmful the Mackay doctrine: of Massachusetts replied, economic impact that would be gen­ Nor was it an unfair practice to replace the I do not think there is. The employers' erated by this bill. striking employees with others in an effort rights under the law will be just as stropg Let me talk a little bit about myths to carry on the business. Although Section 13 and secure after passage of this act as they provides, " Nothing in this Act shall be con­ were before. and realities. strued so as to interfere with or impede or The proponents of this legislation diminish in any way the right to strike," it Consequently, instead of being dicta, have attempted to justify their attack does not follow that an employer, guilty of representing some unnecessary, extra­ on the Mackay doctrine by promoting no act denounced by the statute, has lost the neous viewpoint that was repudiated several myths about Federal labor law right to protect and continue his business by from the moment it was offered, the and strikes. supplying places left vacant by strikers. And Mackay doctrine was an accurate ar­ The first myth is a whopper. The pro­ he is not bound to discharge those hired to ticulation of congressional understand­ ponents claim that the Mackay doc­ fill the place of strikers, upon the election of ing of employer rights under the Wag­ trine-a Supreme Court precedent of the latter to resume their employment, in ner Act. The Supreme Court's opinion order to create places for them. NLRB v. was not at odds with congressional in­ more than half a century-should be ig­ Mackay Radio & Telegraph Co ., 304 U.S. 333, nored, because it is only dicta. 345-346 (1938). tent. The two were consistent. As my colleagues know, dicta refers Now I realize that one person's dicta But, let us assume for a moment that to opinions of a judge which do not em­ is another's doctrine, but the Supreme the proponents' revisionist version of body the resolution or determination Court was rather clear in its holding. history is accurate. of the Court. In other words, something Nothing in the Wagner Act, the Na­ If the Mackay doctrine was an aber­ that is dicta is an opinion offered by tional Labor Relations Act, prohibited ration, something far removed from the Court which is unnecessary or ex­ an employer from hiring replacements the intent of Congress and the body of traneous to the decision itself. Its for employees who have gone out on judicial thought, then it is logical to elimination from a judicial decision strike, and the employer is not re­ assume that Congress would take im­ would not alter the holding of the quired to fire those replacements once mediate steps to correct this flawed court. the strikers decide they wish to return doctrine at the appropriate time. In other words, the proponents are to work. In 1959, Congress passed the arguing that by overturning the What was Congress' reaction to the Landrum-Griffin Act, which dealt di­ Mackay doctrine they are not really decision? The following year, Senator rectly with the issue of picketing, overturning a Supreme Court decision Wagner appeared before the Senate strikes, and voting rights for economic but rather only taking issue with one Education and Labor Committee and strikers. justice's extraneous comment. made the following statement: Obviously, it would be hard to imag­ The Mackay doctrine, which has Every step that the Supreme Court has ine a time more appropriate to correct some of my colleagues in such high taken toward clarifying the meaning and de­ something as abhorent as the Mackay dudgeon, stems from a Supreme Court fining the scope of the act has made it easier doctrine, if the proponents are correct decision issued on May 16, 1938. for workers and employers to deal success­ in. their assertion that the doctrine was The case, National Labor Relations fully under its provisions. incompatible with basic rights and val­ Board v. Mackay Radio & Telegraph Co., "This is hardly a statement one would ues of Federal labor law. But, it was 304 U.S. 333 (1938), grew out of a labor expect from Senator Wagner if the Su­ not changed, and everybody knows dispute between Mackay Radio and preme Court's opinion in the Mackay that. Telegraph and local No.3, of the Amer­ decision had been viewed from its in­ Instead, the Landrum-Griffin Act in­ ican Radio Telegraphists Association. ception as incompatible with the basic cluded a provision giving economic Negotiations between the company and rights and values of Federal labor law. strikers the right to vote in an election the union broke down, and the employ­ This mistaken assertion was made by held within 1 year after commence­ ees went out on strike. The company the committee majority in the report ment of an economic strike if they brought employees from its offices in accompanying S. 55. I can only surmise have been replaced. July 11, 1994 CONGRESSIONAL RECORD-SENATE 15815 Congress gave those strikers the "freeze-outs," Justice William Brennan It was not until the Reagan adminis­ right to vote to prevent employers wrote for the Court: tration that employers began racing from getting rid of the union by hiring Although the [National Labor Relations] out and hiring permanent replacements permanent replacements, and then Act protects the right of employees to strike the first moment an employee went out holding an election immediately there­ in support of their demands, this protection on strike. after in which the permanent replace­ is not so absolute as to deny self-help by em­ President Reagan, according to pro­ ployers when legitimate interests of employ­ ponents, made it fashionable to use re­ ments but not the strikers could vote. ees and employers collide. Labor Board v. Even the most rabid proponent of Truck Drivers Union, 353 U.S. 87, 96 (1957). placements when the members of this legislation would have to agree Likewise, it was Justice Brennan, PATCo, the air traffic controllers, that there would have been no need for who in a subsequent case involving broke the law that prohibits Federal this provision in the Landrum-Griffin union strike tactics, again reaffirmed employees from striking against the Act if Congress believed that an em­ the Court's affirmation of the prin­ Federal Government. When these employees went out on ployer could not hire permanent re­ ciples behind Mackay. In Labor Board placements for economic strikers. v. Insurance Agents, 361 U.S. 477, 489--490 strike, they were permanently replaced In sum, Mr. President, the Mackay (1960), he wrote: by the President. According to the pro­ doctrine was not "dicta." It did not The presence of economic weapons in re­ ponents, President Reagan's actions thwart the will of Congress. On the serve, and their actual exercise on occasion gave employers around the Nation the contrary, it is obvious that Congress by the parties, is part and parcel of the sys­ green light, and employers ever since clearly believed that the Mackay doc­ tem * * * two factors-necessity for good­ have been replacing thousands upon trine was the correct expression of the faith bargaining between parties, and the thousands of employees. law-that employers could hire perma­ availability of economic pressure devices to I suppose it was only a matter of nent replacements for economic strik­ each to make the other party incline to time until we got around to blaming ers. agree on one's terms-exist side by side * * * Ronald Reagan. In fact, contrary to the assertion and, at the same time, negotiation positions are apt to be weak or strong in accordance I find it ironic that some of my col­ that the Mackay rule is an aberration, with the degree of economic power the par­ leagues routinely criticize President the Supreme Court has affirmed it on ties possess * * *. And if [the government] Reagan for doing so little, and then im­ numerous occasions over the past 50 could regulate the choice of economic weap­ mediately turn around and blame him years, at times by Justices not known ons that may be used as part of collective for everything they believe is wrong for harboring an antiunion bias. bargaining, it would be in a position to exer­ with the United States today. And they In 1963, in NLRB v. Erie Resistor Corp., cise considerable influence upon the sub­ certainly find a lot that is wrong. For 373 U.S. 221, 232 (1963), against a chal­ stantive terms upon which the parties con­ tract. someone who is constantly criticized lenge to Mackay, the Court stated, for being so inactive, President Reagan "We have no intention of questioning As one can readily see, it is clear certainly seems to have accomplished a the vitality of the Mackay rule * * *" that S. 55 demands that we overturn a lot. In 1967, in NLRB v. Fleetwood Trailer well-established precedent of labor law. The only problem with the argument Co., 389 U.S. 375, 379 (1967), the Court Far from being dicta, the Mackay that the use of permanent replace­ stated that employers have, doctrine is a clear expression of the law. It has been left unchanged by Con­ ments is a recent phenomenon is that "legitimate and substantial business jus­ it is wrong. tifications" for refusing to reinstate employ­ gress for more than half a century. It According to a study released by the ees who engaged in an economic strike * * * has been upheld by the Supreme Court Employment Policy Foundation, there when the jobs claimed by the strikers are oc­ on a number of occasions. are 251 National Labor Relations Board cupied by workers hired as permanent re­ In sum, the attempted minimization placements during the strike.in order to con­ of the Mackay doctrine by the pro­ cases since 1938 where the Supreme tinue operations. ponents of S. 55 will not stand the light Court's decision in Mackay was cited In 1983, the Court reaffirmed Mackay of review. and permanent replacements were in Belknap, Inc. v. Hale, 463 U.S. 491, Myth No.2: hired. All but 22 of these cases involved 504, n. 8 (1983), when it held, Well, the proponents of this bill are strikes that occurred before 1981. Over the next several days, this body The refusal to fire permanent replace­ nothing if not advocates, and they are ments because of commitments made to nothing if not resourceful. Faced with is likely to hear about a General Ac­ them in the course of an economic strike the rather obvious probability that counting Office report commissioned satisfies the requirement that the employer they could not discredit the Mackay by the proponents of the legislation en­ have a "legitimate and substantial justifica­ doctrine through a tortured legal anal­ titled, "Report to Congressional Re­ tion" for its refusal to reinstate strikers. ysis, they propagated yet another questers: Strikes and the Use of Per­ As recently as 1989, Justice O'Connor, myth, a myth that brings this issue up manent Strike Replacements in the writing for the Court, applied Mackay to the present. 1970's and 1980's." GAOIHRD--91-2 (1991). to affirm the validity of TWA's perma­ I suppose this myth was inevitable­ This report is purported to be the de­ nent replacement of striking flight at­ namely, the idea that it is all Presi­ finitive proof of how widespread the tendants. She wrote, "On various occa­ dent Reagan's fault. problem of permanent replacements sions [over the years] we have re­ The proponents argue that the hiring has become. According to the report, affirmed the holding of Mackay of permanent replacements was just the GAO found that, in 1985, 4 percent Radio." not done before 1980. In other words, of striking employees were replaced by The fundamental principles behind the Mackay doctrine was not a problem Mackay replacements---4 percent. The Mackay rest in the proposition that for more than 40 years because employ­ report went on to conclude that this unions and employers are entitled to a ers never exercised this legal right. figure fell to 3 percent in 1989. And, level negotiating field in which each There was no reason for the unions these figures count as permanently re­ party is free to use the economic weap­ and their friends in Congress to com­ placed those strikers who returned or ons available to it. There is a delicate plain about the hiring of permanent re­ will return to their jobs as a result of balance in labor law that must be placements, because no permanent re­ vacancies, a strike settlement, or a Na­ maintained, and Mackay Radio is part placements were ever hired. It just was tional Labor Relations Board order in of the maintenance of that delicate not done. case of an unfair labor practice strike. balance. For those listening closely, they will According to the report requested by On occasions, these principles are re­ not miss the significance of the date proponents, 96 percent of all employees affirmed by the most unlikely mem­ used by the bill's supporters. The pro­ who went on strike in 1985 were notre­ bers of the Court. ponents claim that it was not until the placed by permanent replacements. In In a case involving a union challeng­ 1980's that the use of permanent re­ 1989, 97 percent of workers who went on ing an employers' association's use of placements became so commonplace. strike were not permanently replaced. 15816 CONGRESSIONAL RECORD-SENATE July 11, 1994 This is the proponents' evidence of an that most other countries do not sim­ agement personnel to maintain oper­ employer community run amok. The ply reject the Mackay doctrine-they ations adequately during a strike for ·fact is that the problem they are com­ reject our entire industrial relations an indefinite period of time. There is plaining about has decreased. system. an inevitable loss of organizational ef­ I might note that the number of af­ In fact, a quick trip around the world ficiency and control. fected strikers is less than .one one­ reveals that American unions already Apparently we have to state the obvi­ thousandth of 1 percent of all Ameri­ enjoy several advantages over their ous. If companies could operate with­ cans in the civilian labor force. in terna tiona! counterparts. aut the .striking employees, they would So much for that myth. Would the proponents like to buy employ fewer people in the first place. Myth No.3: into the entire German labor relations What the proponents apparently do Another myth associated with S. 55 is system? not know is that many plants cannot the implication that the legislation In Germany, more than one union just be shut down. You don't just turn would restore balance and fairness to can represent employees performing off the lights in a chemical plant and our labor laws. the same work. A strike in Germany lock the door behind you. In such in­ While the legislation clearly limits becomes illegal whenever picketers use stances, the shutdown must be per­ the actions an employer can take dur­ intimidation as a tactic. Strikes are formed in a very careful, orderly man­ ing a strike, it should be remembered forbidden in Germany if they would ner, using highly trained workers over that there is nothing in S. 55 which grievously wound a company, and all a 2- to 3-week period. This is true even would impose a similar limitation on strikers are ineligible for unemploy­ when the shutdown occurs not because the rights of unions. ment benefits. of a strike but because of routine main­ There is nothing in the bill that in­ How would you like to have the Ger­ tenance. creases the economic risk of union man laws? So ours are far more fair to What the proponents apparently do members, nor are they forced under the workers than the German labor laws. not know is that the pool of unem­ bill to relinquish an equivalent right. In France, the law permits individual ployed workers who might temporarily Economic strikers in some States bargaining or unilateral employer ac­ assist employers during a strike do not have the right to collect unemploy­ tion to supersede collective-bargaining possess the same skills as the striking ment compensation. They are not pre­ agreement provisions. Moreover, union members. As the Society for vented from finding other employment French labor law eliminates any re­ Human Resource Management ex­ during the strike. They are entitled to quirement that unions and manage­ plained during the hearings on S. 55, receive union strike benefits which ment try to reach an agreement. In the An employer's challenge of recruiting tem­ might not be insignificant in some in­ Netherlands, courts are given broad ju­ porary workers would be difficult enough if stances. Further, in some States strik­ dicial authority to enjoin strikes. the pool of available workers was literate ers may be eligible for welfare benefits. As to Canada, it is noteworthy that and possessed general skills. However that is Nothing in the legislation would according to a recent study in the not the case. Employers are confronted with Journal of Labor Economics, after a a less educated and less skilled workforce change these rights. and must frequently educate employees be­ Moreover, nothing in the bill would ban on hiring striker replacements was fore they can even begin to train them for prohibit unions from engaging in de­ passed in three Canadian provinces, specific jobs. structive corporate campaigns or from more and longer strikes resulted. What the proponents of the legisla­ running a company out of business. S. Interestingly, the one policy that has tion apparently do not know is that 55 would make no changes in the rights a significant effect on reducing the in­ there is not a pool of available skilled afforded to strikers, only in the rights cidence of strikes and the duration of workers waiting to run the gauntlet of afforded to employers. strikes was a mandatory strike vote, a a picket line in order to work for what So much for myth No.3. requirement which is not contained in could be only a handful of days. Let me go to myth No.4. our Federal labor laws. This is especially true for industries Another myth disseminated by the So myth No. 5--"0ther countries do such as the airline industry. As the Air proponents is that the Mackay doc­ it"-really does not apply here. Transport Association of America em­ trine corrupts the collective bargain­ Let me go to myth No. &-"employers phasized in its hearing statement: don't need this right," they say. ing process. Ready pools of skilled pilots and FAA cer­ In fact, S. 55 would itself corrupt the The final justification for S. 55 is tified mechanics simply do not exist for the bargaining process because it would that employers have other options they airline industry. The training and skills provide that the right to strike may be can use to continue to operate a facil­ needed to serve the public safety constitute asserted free of any economic dis­ ity during a strike. such high standards that there is actually a advantage. According to the proponents, these labor scarcity. In this context, the long­ The right to strike was never in­ options include the hiring of temporary standing Mackay rule is a fundamental pro­ tended to make strikers the owners of replacements, using supervisory or tection that the employer needs in order to their jobs. management personnel to run the balance the unlimited power of the strike. As Justice Stewart explained in writ­ plant, transferring or subcontracting What the proponents of the legisla­ ing for the majority in the Supreme work, or stockpiling in advance of the tion apparently do not know is that Court's opinion in 1965 in American Ship strike. many small businesses cannot operate Building Company v. NLRB, 380 U.S. 300: In 1991, the majority of the Senate simply by using management and su­ [T]he right to bargain collectively does not Labor Committee observed that: pervisory personnel. entail any " right" to insist on one's position * * * in light of** * our recent chronically Small businesses tend to be tightly free from the sort of economic disadvantage high unemployment rates, it is undoubtedly run companies that are extremely effi­ which frequently attends bargaining disputes easier today to find temporary replacement cient. If their employees go on strike, * * *. The right to strike as commonly un­ workers for even skilled jobs than it was they shut down. There is no alter­ derstood is the right to cease work- nothing even 10 years ago, let alone 50 years ago. native. more. What the proponents apparently do Perhaps the most honest assessment Myth 5--other countries do it, they not believe is their own rhetoric-that of the fallacy of the proponents' asser­ say. many union workers are highly skilled tion that there is a ready pool of quali­ Another argument trotted out by the employees, who provide the companies fied skilled labor ready and willing to proponents is that other industrialized for which they work with ii valuable be hired for an indefinite period of time countries like Japan, Germany, and service. and to run a gauntlet of harassment Canada do not permit the hiring of per­ You cannot replace a skilled every day is the AFL-CIO. Listen to manent replacements. What the pro­ workforce overnight, nor can you ex­ the statement of Walter Kamiat, asso­ ponents like to skip over is the fact pect a handful of supervisory and man- ciate general counsel of the AFL-CIO: July 11, 1994 CONGRESSIONAL RECORD-SENATE 15817 Nothing we have said thus far is to deny The economic impact on affected in­ ested in preserving, fostering, and nur­ that some particular employers may "need" dividuals will be devastating. The eco­ turing small business in this country. to hire permanent replacements in order to nomic impact on consumers will be I can think of no other single bill prevail in a particular strike. This may be devastating. The economic impact on that is a better test of who is inter­ the case, for example, where striking work­ ested in preventing one special interest ers are particularly skilled and the labor businesses will be devastating. market is particularly tight. And, some in this body still wonder group from dictating the laws of our why the American people feel that Con­ Nation. Mr. Kamiat apparently is willing to Mr. DOMENICI addressed the Chair. admit a simple fact that has escaped gress has lost touch with reality. How can one honestly argue that by making The PRESIDING OFFICER (Mr. the proponents of the legislation. FORD). The Senator from New Mexico. Namely, some employers have to be strikes risk free for hospital unions, or for unions in any industry, costs will Mr. DOMENICI. Parliamentary in­ able to hire permanent replacements or quiry. Is there any limits on speaking they will always lose. The unions will not go up? Perusal of S. 55 will also find another at this point? always win when they go out on strike. The PRESIDING OFFICER. There is There will be no economic restraint on issue not covered. For most Americans, mention the word "strike" and the none. The Chair might have some feel­ these unions to modify their demands. ing about it. Their limit will only be their imagina­ word "violence" comes to mind. Mr. DOMENICI. I understand the tion. Since it is inevitable that S. 55 will · Chair might not want to stay here all The fact is, it is virtually impossible result in more strikes, what does the evening, and I do not intend to burden to replace a highly skilled workforce bill have to say about violence? Abso­ him with that either. I think I will with competent people for an indefinite lutely nothing. What does S. 55 do to prevent random speak about 10 minutes. I ask to be no­ period of time, unless the employer can tified when I have used 10 minutes. make an offer of permanent employ­ shootings like those that occurred dur­ The PRESIDING OFFICER. We will ment. ing the Greyhound strike? Absolutely be glad to do that. But, of course, that is why this bill nothing. Mr. DOMENICI. Mr. President, I have makes every union decision to strike a What does S. 55 do to prevent the not indicated that will be the extent, no-lose decision. bombings and knifings that were such but I would like to be reminded. I Consequently, without any real an integral part of the New York Daily thank the Chair. check on the demands that can be News strike? Absolutely nothing. made by organized labor, employers What does S. 55 do about the pattern will have no viable alternative but to of unrestrained violence that breaks EMPLOYMENT GROWTH cave in and agree to every demand out every time the United Mine Work­ Mr. DOMENICI. Mr. President, first I made by striking employees. ers goes on strike? wish to talk about this employment S. 55 is perhaps most condemnable What does it do about the killing of growth comparison chart that I have for what it does not address. The pro­ Eddie York, an employee of an inde­ here displayed. I know for many this ponents claim that they want to re­ pendent contractor, shot as he tried to will seem incredible, but it happens to store fairness to strikes. They want to leave a mine in West Virginia in July, be true. It is a comparison of North correct the perceived flaws in our cur­ 1993? America and the European Community rent labor laws. So, Mr. President, this is the so­ of countrie&-from 1974 through 1991, What they have concocted is perhaps called Workplace Fairness Act of 1994- and from what I understand things the most lopsided, special-interest ori­ a bill that would overturn more than 55 have not changed much since then. ented pieces of legislation that has years of Federal labor law, a bill that Since 1991 employment trends have been rammed through Congress in re­ encourages employees to go on strike, been moving in exactly the same direc­ cent memory. a bill that ignores union violence, a bill tion. In fact, we know they are in 1992. There is nothing in S. 55 about public that pretends that it will have no eco­ safety, about the impact of prolonged We are not quite sure exactly where nomic impact, and a bill that in the these lines would be for 1993 and 1994, strikes that place the public welfare name of fairness would benefit only one and safety at risk. but we think the trend is pretty obvi­ special interest group. It would benefit ous. What happens when employees at a this group at the expenses of the rest of nursing home go out on strike? What So let us look at what is happening America's working men and women, at to the jobs in North America in terms happens when workers at acute care the expense of the free enterprise sys­ hospitals go out on strike? Do the pro­ of the public and private sector. ponents really believe that by giving tem, and at the expense of public Along the bottom of the graph we unions in the health care industry the health and safety. have the years 1974 up through 1991. On ability to call strikes without eco­ We all know that our Nation faces se­ the side we have the number of new nomic risk that there will not be an in­ rious social and economic problems. jobs created, measured in millions of crease in the disruption of health care We all know that the Federal budget is jobs. Looking at that solid green line services? a nightmare, and that the deficit is from 1974 to 1991, the level of new jobs Do the proponents, who have ex­ slowly choking the lifeblood from our in North America rises straight up. In pressed such great concern over the Nation. We all know that there is a cri­ all, a total of 30 million new jobs were skyrocketing cost of health care in this sis of confidence in our Government, created in the private sector: little Nation, believe that this legislation particularly with this Congress. And companies, big companies, unionized will have no impact on health care the proponents of S. 55 have unveiled companies, nonunionized companies, costs? their solution- go on strike. all private sector employment. The committee report accompanying Mr. President, I can think of no other Public sector employment is the hash S. 55 actually had a section entitled, bill before this body that is a better marked green line on the graph. During "Cost Estimate." It contains the fol­ test of who is interested in preserving that entire period of time, jobs in the lowing statement: our free enterprise system and generat­ public sector rise by less than 5 million The Committee is unable to determine the ing jobs and economic growth. job&-a very, very slow rate of rise precise economic impact the legislation I can think of no other, single bill compared to the private sector. So that would have on affected individuals, consum­ that is a better test of who is inter­ the ratio of new private jobs to public ers, and businesses, but the Committee be­ ested in preserving a balance in our jobs is enormous. lieves that any such impact will be minimal. Federal labor laws to ensure that the Thirty million new private sector The authors of the committee report rights of employers and employees are jobs from 1974 to 1991-versus 5 million must be the only people in the United equivalent. in the public sector, is a 6-to-1 ratio for States that cannot figure out the an­ I can think of no other single bill North America. And the overwhelming swer to that question. that is a better test of who is inter- proportion of these are in the U.S.A. 15818 CONGRESSIONAL RECORD-SENATE July 11, 1994 Let us look at the European Commu­ things for the social benefit of their ages, and many other items that cost nity, same period, 1974 to 1991. The workers and their country. Con­ money. solid green line shows about 2 million sequently, there is less and less flexi­ The PRESIDING OFFICER. The Sen­ new private sector jobs. And in a num­ bility on the part of the people who op­ ator wished to be advised when 10 min­ ber of years there are less jobs than the erate a business, large or small, to do utes had expired. year before. what they must in order to be competi­ Mr. DOMENICI. I thank the Chair. I In fact, there are less private sector tive and sell their products in the yield myself 5 more minutes, if the jobs in the European communities in world market. Chair will advise me when 5 minutes 1984 than there were in 1974. There were We have on the floor of the Senate an are up, please. even less private sector jobs in Europe issue that is not about today or tomor­ This legislation says the balance is in 1988 than in 1974. After that net jobs row, but about the long term. Does the changed. Under no circumstances will showed a slight increase. While Amer­ United States want to engage in a an employer be in a position where he ican private sector jobs experience long-term commitment that labor could not settle because of economic were going up dramatically, European unions ought to be able to strike, and terms. Otherwise, to get his business jobs went up slightly. if wages cannot be agreed to, then if going, he has to hire everybody back Now let us look at the whole spec­ the plant ever opens again, strikers are that was there before. I think that this trum in 1974 to 1991. As I indicated, the entitled to get all of their jobs back. swing in the balance goes a little bit net result' of it is in millions of jobs. In Business cannot employ anybody to too far. total, there are few if any new private take their place? Proponents claim this is about em­ jobs in 1991 in the European Commu­ Frankly, it is not the kind of issue ployee and union rights. This would be nity over nearly a 2-decade period. that some think of. But clearly this true if the disagreement were indeed Think what America would be like if legislation takes great economic flexi­ about unfair labor practices. But it is we had no new private sector jobs for bility out of the American private sec­ not. It is about economic interests in that length of time. tor, and in the long run moves us one bargaining situations. This bill would Mr. President, there may be some step closer to the ailment that engulfs change the bargaining balance in favor that would say, "So what? The jobs Europe. Soon we will have "sclerosis­ of unions and against employers, and, that we have would all be worth $38 an Americana" or "U.S.A.-sclerosis," and as I see it, against workers in general, hour." That might be the case. There we will say, "How come business can­ and against consumers. would be a lot of people unemployed not make it?" It will be because we A recent study shows that the length though, and there would be no growth tied their hands. When we do that, we and number of strikes would increase, in the economy. end up hurting all workers. hurting nonstriking workers and their Now let us look at what happened to In the United States, only 12 percent families, and those in other firms and the public sector jobs in Europe. From of the work force is unionized. But if industries that depend on businesses 1974 until 1991, while there is really no you put this into existence and it be­ remaining economically viable. If em­ increase in private sector jobs-in fact gins to deny flexibility in terms of try­ ployment costs end up becoming higher the sum private sector total is almost ing to succeed as a business, then obvi­ than can be competitively justified, ob­ a wash, the public sector went up about ously you hurt all who hope to prosper viously we will be moving in the direc­ 5 million. in the future. Ultimately the result is tion that I have just described as being So, we see about 5 million new jobs in plain and simple: This legislation is festered with "Euro-sclerosis." the public sector, no new jobs in the antijobs, and antigrowth. In a very real Many do not realize it, but, if we pass private sector. In the United States-in sense, it moves us in the direction this legislation, we will be moving Canada and the United States, essen­ where, if we do this and a few more more businesses offshore rather than tially 30 million new private sector things recommended today-such as less. We will be making ourselves less jobs versus about 5 or less in terms of more OSHA regulations-we will estab­ competitive rather than more. Ulti­ the public sector; 6-to-1 ratio. Impor­ lish the pattern that every time we mately, there will be less jobs rather tantly, these ratios are about real find a social problem, we put the bur­ than more for American workers. numbers, real jobs, and real people. den on the business community. Clearly, the chart I have described is Mr. President, the European Commu­ Another example is the business a clear indication of a less flexible nity-if anybody has been reading eco­ mandates associ a ted with some health labor market and what will happen. nomic literature about what is going care plans. If we do that, it represents The OECD [the Organization of Eco­ on in Germany, Italy, and France, I another giant step in the direction of nomic Cooperation and Development] think it is fair to say that a bright imposing the same kinds of economic which encompasses the major free-mar­ economist here in the United States sclerosis on America that is bringing ket nations of the world, has docu­ came up with a good ·name for what is the relationship between private sector mented the European problem. Net new going on. He says that the European and public sector jobs to the European jobs in the private sector from 1980 to economy has "Euro-sclerosis". That is community. They are stuck with high 1988: None, zero. A decade-long rising a very nice descriptive word for a very, unemployment, much higher than in trend of unemployment culminated in very sick economy-"Euro-sclerosis." the United States. They do not know a current 10.5 percent unemployment The principal ingredient of "Euro-scle­ what to do about it and their compa­ right within the European Community. rosis" is no new private-sector jobs. nies cannot grow. Unemployment is chronic with nearly Costs of their products are skyrocket­ Let me describe this bill as I see it. 50 percent of the unemployed in the ing, unemployment is very, very high, Currently, there are limitations on em­ European Community out of work 12 and their products, except for some ployers in unfair labor practice dis­ months or more in 1991 compared to very exceptional ones, are getting less putes with unions. We are not talking roughly 6 percent in the United States. competitive, not more. · about taking away any of the union OECD cites as a cause poorly function­ America used to look at West Ger­ powers there. Employers cannot hire ing labor markets. Wages that are set many and shiver. With their economy's permanent replacements in disputes higher than is consistent with the pro­ competitiveness, they were going to over workers' job rights and contract ductivity of workers has led to rising beat us in every market. Interesting, conditions. That remains unchanged. unemployment. It hurts· more than it now they are moving their automobile This legislation has nothing to do with helps. plants to America to make cars here that. This legislation will limit em­ OECD says more jobs could be cre­ because ''Euro-sclerosis" has set in. ployers' options in disputes over eco­ ated if there were fewer barriers to hir­ The balance between management and nomic issues, issues such as what wage ing, to layoffs, to arranging for termi­ labor has been such that government rates a company ultimately can afford nations. Quoting from them, "What is asks business to do more and more to pay, or about expanded benefit pack- needed is to mitigate the unintended July 11, 1994 CONGRESSIONAL RECORD~SENATE 15819 side effects of policies that were de­ The House has twice passed this bill which ensures that a fair economic bar­ signed to achieve equity objectives. In by substantial margins. President Clin­ gain is reached between employers and some cases, this may mean a more fun­ ton campaigned in support of this bill. workers. damental radical design of policies, to­ It is time to get on with the public's The labor laws give workers the right gether with considerable changes in at­ business and bring this bill to a vote. to join together to combine their titudes and practices, especially in the Repeatedly, when we are debating strength, and the union movement has fields of taxation, social policy, and economic legislation and U.S. competi­ been responsible for many of the gains collective bargaining." tiveness in the world economy, Sen­ that workers have achieved in the past I think we can all heed what is going ators from both sides of the aisle praise half century. The process of collective on in other countries and is not work­ the high productivity of American bargaining works. It prevents workers ing well. We can try at least in our po­ workers, their excellent skills, and from being exploited, and it has cre­ sitions of leadership not to repeat the their pride in their work. ated a productive balance of power be­ mistakes that are so well known in Yet, much of the legislation we pass tween management and labor. other countries. In the name of doing ignores the importance of treating The cornerstone of collective bar­ something good we do not want to do American workers fairly. gaining is the right to strike. If that something that will make things worse This legislation is for the American right is nullified by the practice of per­ over the long run and for more people. worker. It will restore the balance of manently replacing workers who go on The Secretary General of the OECD power intended between management strike, the entire process of collective bargaini:Q.g is undermined. summarizes the situation this way: and labor intended under the National Both the National Labor Relations The only way to achieve long-term success Labor Relations Act. Act and the Railway Labor Act explic­ is to embrace change. Trying to slow the That far-sighted act, signed into law itly prohibit employers from firing em­ pace of change and artificially to protect un­ by President Franklin D. Roosevelt in competitive activities would only make de­ ployees who exercise their right to 1935 as a cornerstone of the New Deal, strike. layed adjustment more painful. All policies recognized the inherent inquality be­ should be harnessed to promote adjustments But as a result of a loophole created to change while taking care to reinforce so­ tween the bargaining power of a lone by the Supreme Court half a century cial cohesion. worker seeking to improve wages and ago-but seldom used until recent I could not agree more. This legisla­ working conditions, and the bargaining years-the practice of permanently re­ tion does not do that. It is not a job power of the employer. placing striking workers allow employ­ gainer. Ultimately, it is a job loser. As part of comprehensive legislation ers to achieve the same result. While we have had this legislation be­ enacting the fundamental goals of na­ The ability to hire permanent re­ fore us on previous occasions, it has tiqnal labor policy, the act guaranteed placement tilts the balance unfairly in failed. Obviously, we are going to vote the rights of workers to form and join favor of business in labor-management again, perhaps once, perhaps twice. I labor organizations and to engage in relations. am hopeful that we will defeat it again. collective bargaining with their em­ It is no surprise that business is lob­ Mr. President, I thank the Chair and ployers. bying hard to block this legislation. I yield the floor. As the Supreme Court stated in 1935, Hiring permanent replacements en­ Mr. President, I suggest the absence in a landmark opinion upholding the courages intransigence by management of a quorum. constitutionality of the National Labor in negotiations with labor. It encour­ The PRESIDING OFFICER. The Relations Act: ages employers to replace current clerk will call the roll. Long ago we stated the reason for labor or­ workers with new workers willing to The assistant legislative clerk pro­ ganizations. We said they were organized out settle for less-and to accept smaller ceeded to call the roll. of the necessities of the situation; that a sin­ paychecks and other benefits. gle employee was helpless in dealing with an S. 55 will restore the balance that has Mr. KENNEDY. Mr. President, I ask employer; that he was dependent ordinarily unanimous consent that the order for been distorted in recent years. It on his daily wage for the maintenance of amends the National Labor Relations the quorum call be rescinded. himself and his family; that if the employer The PRESIDING OFFICER. Without Act and the Railway Labor Act to pro­ refused to pay him the wages that he hibit employers from permanently re­ objection, it is so ordered. thought fair, he was nevertheless unable to The Senator is recognized. leave the employer's employ and resist arbi­ placing employees who exercise . their Mr. KENNEDY. Mr. President, for trary and unfair treatment; that union was statutory right to strike. the third time in 2 years Senate will essential to give laborers opportunity to deal By enacting this legislation, Con­ vote tomorrow on whether to end the on an equal basis with the employer. gress can restore the original promise filibuster by which a minority of the Today, as much as ever, employees of these statutes that give workers the need the right to organize collectively right to bargain collectively and par­ Members of this body are blocking ac­ ticipate in peaceful activity in further­ tion on the Workplace Fairness Act. I to improve their wages and working conditions, and to enter into negotia­ ance of their goals, without fear of urge my colleagues to invoke cloture being fired. and allow us to vote on this important tions with their employers about how The Supreme Court's decision in the measure. work should be arranged, so that the Mackay Radio case in 1938 is the source The basic principle behind the bill firm can achieve its productivity and of the current problem, even though has strong public support. In the latest profitability goals, while at the same the issue was not squarely raised in the poll from Fingerhut Associates, 64 per­ time ensuring fair treatment for work­ case itself. cent of respondents said that once a ers. But the right to organize and bar­ In Mackay, the Court ruled that it majority of workers have voted to gain collectively is only a hollow was unlawful for an employer to refuse strike, companies should not be al­ promise if management is allowed to to reinstate striking union leaders, lowed to hire permanent replacements use the tactic of permanently replacing when the employer had reinstated to take their jobs. workers who go on strike. other striking union members. The The American people understand No one likes strikes-least of all the Court refused to allow the employer to that this is a question of simple justice strikers, who lose their wages during discriminate between strike leaders for workers. any strike and risk the loss of health and other strikers. It ordered the em­ If it's illegal for an employer to fire coverage and other benefits. ployer to put the permanently replaced a worker for exercising the right to Because both workers and employers striking union leaders back to work. strike, it should be equally unlawful have a mutual interest in avoiding eco­ In fact, the Supreme Court did not for an employer to be able to deprive a nomic losses, the overwhelming major­ even have before it the issue of the le­ striking worker of his job by perma­ ity of collective bargaining disputes gality of permanently replacing strik­ nently replacing that worker. It's as are settled without a strike. But the ing workers. But language in the deci­ simple as that. right to strike provides a balance sion condoning the employer's hiring of 15820 CONGRESSIONAL RECORD-SENATE July 11, 1994 permanent replacements has been in­ having supervisors perform the work, have graduated from high school or terpreted as permitting the practice, as by hiring temporary replacements, or from a community college or have gone long as the employer does not use it in by shutting operations down. to a vocational school are going to be a discriminatory way. Employers acted on the basis that able to find a good job. And I know my This aspect of the Mackay decision their work force was valuable and not neighbor down the road, who has had no significant impact on labor re­ easily replaced, and that once the tem­ worked a long time, had been displaced lations for nearly half a century. Few porary labor dispute was over, the two because of downsizing, but, look, we employers resorted to permanent re­ sides would resume the collective bar­ know that the total number of jobs placements, or even threatened to use gaining relationship that brought bene­ available out there is going to be larg­ the tactic. fits and stability to each. er, there will be a new opportunity and In Mackay Radio, the Supreme Court What we have seen, Mr. President, a new era; things are going to get bet­ Justices performed gymnastic feats. over the recent times, as has been ter." The Court set common sense and ra­ pointed out during the debate earlier And when the unemployment rate tional judgment right on its head. this afternoon, is that the playing field has gone down three points, as it re­ The issue before the Court was the has been changed. Those that want to cently has, in the past, people have discrimination between two different continue the filibuster effectively say, generally been euphoric. types of striking workers. The Court "Well, it has really not been changed." But not now, not in my State of Mas­ said that strike leaders should not be But, of course, it has been changed in a sachusetts, and not in most places in discriminated against. But the Court very dramatic way. our country. And why? Why? I well tell mused in dicta that the law permitted One cannot just examine theories of you why. the permanent replacement of striking labor-management relationships. We It is because the American people un­ workers. Rational or sensible interpre­ must listen to those real people who derstand that the jobs that are not tation of the National Labor Relations have testified before our committees. there now are not the kind of jobs that Act would not have come to that con­ They are proud American individuals, were there 20, 30, 40, years ago. They clusion. But certainly, the Supreme hard-working Americans who were are not the jobs that mean good oppor­ Court has, in other instances, provided willing to go out and provide for their tunities for families to work and to erroneous interpretations of laws the families, work 40 hours a week, and provide for their children and their· Congress has passed. work overtime for 52 weeks of the year. parents, to pay the mortgage, put the Much later in the mid-1980's after Nonetheless, these workers felt com­ bread on the table and send their chil­ Congress thought it well established pelled to go out on strike because there dren on to higher education if those that we were not going to permit tax­ was either an economic right or advan­ young people want that opportunity. payer funds to be used to discriminate tage that was being taken away or a People understand that the good jobs against women and minorities in the health care benefit that was being cut of a generation ago are frequently not area of higher education. back that would have affected their available. They have been replaced by That principle was well understood children and their own lives. In some part-time jobs. And these jobs do not throughout the country. Congress had instances, these workers went out on provide the decent kinds of incomes so determined that, as a country, we will strike because they recognized that that Americans can work and still stay not permit taxpayers' money to be uti­ they were entitled to share in some of out of poverty. lized to support and to expand dis­ the extraordinary profits that their We had a social compact in the pe­ employers were making. crimination in education. And then the Having exercised their right to riod of the 1930's, 1940's, 1950's, 1960's, Supreme Court ruled in its Grove City strike, these workers were then effec­ 1970's, and into the 1980's, supported by decision. The Supreme Court said, well, tively thrown out of a job and fre­ Republicans and Democrats alike, that as long as there was not discrimination quently blackballed from the oppor­ people who are willing to work are in financial aid for university students, tunity to work in their own commu­ going to get paid and not have to be in it did not make any difference if there nities after having worked in those poverty. That is going. It is going. It is was discrimination in other areas of communities for their lifetimes. Many going. It is going and gone. the university. This was a most bizarre of the workers who have been perma­ People are receiving minimum wages interpretation of what the Congress nently replaced had worked at their today and in too many instances, de­ had in tended. jobs for years, from their teens on into spite working, they are also eligible to And from that particular holding, we their twenties and thirties. Those jobs receive welfare benefits. That is wrong. found that there was a whole series of permitted them to have and support We are seeing that workers are at conduct that was developing in our so­ their families and they remained loyal risk of losing their health benefits. ciety which was moving completely workers to their companies-only to They are frequently unable to upgrade contrary to what the American people find that doors of the company nailed their skills. And they know they will and the Congress, had said. And that is, shut when they exercised their legal have to probably change their employ­ we were not going to permit taxpayers' right to strike and tried to achieve eco­ ment down the road and leave what money to be used to further discrimi­ nomic justice for themselves and their they thought was a long-term job. nation in our society. families. They do not ask for a handout, but a We have the aberration in the Grove Mr. President, a phenomenon that we helping hand up. City case, which Congress eventually have recently seen has been a decline And it is those individuals who have overturned. Likewise we have this kind in unemployment over the last year. the courage in the workplace to be able of aberration in the Court's treatment Yet, if you were to take a reading to stand up and say that this kind of of the practice of permanently replac­ about the future from working families treatment of workers is wrong who are ing striking workers. We are attempt­ in my State of Massachusetts, they responsible for bringing these issues to ing to overturn that decision. Our de­ still have rather an ominous sense and the public debate. It is workers who sire to overturn Mackay Radio has the feeling about the future. stand up for their rights who force us support of the majority of the Members Usually, if you had unemployment to confront these changes in our soci­ of this body, Republican and Democrat, going down one point, people would ety. as well as the support of the majority say, ''Things had begun to turn around. Well, by not taking this action, it is in the other body. There was some hope for the future. only a period of time before those who Employers and workers had a mutual Maybe my child, who has just grad­ are in the board rooms are able to iso­ understanding that strikes are only uated from high school, was going to be late and target those individuals who temporary disruptions in ongoing sat­ able to get a good job." are the leaders for advancing economic isfactory relationships. Businesses re­ Then, if it goes down two points, peo­ and social justice, progress, and stabil­ sponded to strikes in various ways-by ple would say, "Well, my children who ity in our society. July 11, 1994 CONGRESSIONAL RECORD-SENATE 15821 We do not have the great unrest that among the American people and that Mr. FORD. Mr. President, I ask unan­ has existed in many other parts of the was the issue of fairness: fairness to imous consent that the order for the world. And I dare say a principal-not working men and women in this coun­ quorum can be rescinded. the only, but a principal reason is be­ try. The PRESIDING OFFICER. Without cause of the existence of economic jus­ Fairness is part of our whole value objection, it is so ordered. tice in our society. And this I must system. We hear a lot of about our Mr. COATS. Mr. President, S. 55 pro­ say, Mr. President, the prohibition of value system and we listen to many poses sweeping changes in our Nation's permanent replacements for striking speeches made on that system. We have labor law, overturning more than 50 workers is a fundamental tenet in made clear that part of the value sys­ years of experience and case law, and terms of society's commitment to eco­ tem of fairness for ·workers is to re­ upsetting the fundamental economic nomic justice. quire notice if the employers are going balance Congress struck between labor Finally, Mr. President, I am always to leave. Another part of our value sys­ and management when it passed the interested in seeing what is happening tem is that we believe that employers National Labor Relations Act-Wagner in other parts of the world. Certainly should not expose their workers to dan­ Act-in 1935. we hear a great deal on this floor about gers in the workplace. Since the Mackay decision in 1938, how we have to have a level playing Where I come from, in Massachu­ the threat of business shutdowns has field with other countries; that other­ setts, we used to go through those been tempered by the fact that strikers wise, we will not be competitive inter­ plants and factories. You try to shake may be replaced. The National Labor nationally. hands with someone who had worked Relations Act puts the players on equal If you just go down the various lists on a shoe machine. More often than playing field, guaranteeing employees down the various lists of our principal not, three or four of their fingers were that right to strike to enforce their competitors-France, Germany and gone but they are still back there bargaining demands while ensuring Italy, Belgium, Japan, the Nether­ working. Or they had slogged around in employers the ability to operate their lands, Sweden, and our closest neigh­ the toxic substance on the floor of businesses as best they can during a bor, Canada-all these countries have those plants. The acid would eat the strike. Current law exposes both sides variations in the kinds of protection sole off your shoe that night. That to risk. they provide for workers' rights. But would make us think of what was hap­ The shared risk helps to drive the virtually none of them, none of them, pening to these workers breathing collective bargaining process which give the kind of advantage to the em­ those poisonous gases. should be a shared goal in labor nego­ ployer to effectively discharge and dis­ We say we ought to be able to com­ tiations. miss those workers who are trying to pete and still have a safe workplace Proponents of this legislation argue advance their economic futures. free, to the extent we can, from indus­ that permanent replacements inhibit And the basic reason is because, in trial accidents and toxic substances. strikes and the effectiveness of strikes, this particular instance, those societies We say that people ought to work at a and thus interfere fundamentally with understand the importance of a real decent wage if they are prepared to the right to strike. It therefore seems balance, not an alleged balance-but a work, to work hard. They ought to be to reason that if permanent replace­ real balance, between the management free from the toxins of subsistence ments are banned We will be eliminat­ and workers. Those societies under­ wages. That is economic justice. We ing the only disincentive to strike, and stand how important collective bar­ say people ought to be notified if their may actually cause labor to look to gaining and a real right to strike is in employer is going to shut down so at strikes as the weapon of first choice order to advance the economic status least they are able to look for some rather than of last resort. Clearly this of those countries. other work opportunities. They should does not serve to foster meaningful ne­ And so, Mr. President, I will look for­ be notified of a plant closing becuase gotiations or mutual compromise. If ward to further debate on this issue to­ they have loyally worked for that par­ the outcome of a strike is guaranteed­ morrow. ticular plant over those many years. Meaningful bargaining is virtually I think this is one of the very impor­ This issue is a fundamental issue of eliminated. tant issues of fairness and equity. I can economic justice, as important as The problem facing labor and man­ remember going back to 1988, when we many of those matters-in many in­ agement today is not the level playing had the plant closing legislation. stances even more so. It is because the field in the collective bargaining proc­ We heard the voices out here on the workers have the right to engage in ess. It is the level playing field that floor say, "Well, we cannot have that collective ·bargaining and in strikes will permit U.S. businesses to survive kind of plant closing legislation bill. that they are able to bring the issues of and to meet the challengers of global That is going to interfere with the pre­ economic justice to the fore. competition. If an employer cannot rogative of the employer." There was Mr. President, I look forward to the meet those challenges, then the ques­ the belief that it was all right for cloture vote tomorrow. I am convinced tion of where the balance of power is in someone to work for 30 years in a plant that if the American people truly un­ an economic labor dispute is a moot and then come down to that plant on a derstood the importance of this ques­ point. If a business cannot compete, it Friday afternoon and find out that tion with regards to economic justice, does not pay wages or provide benefits they could not come back on Monday this would be an overwhelming vote. A or offer any semblance of employment because the plant is going to close majority of the American people do security. down. For 30 years that individual and support this legislation as does a ma­ Employment security should be at that family may have been dependent jority of this body. the heart of this debate. What the bill's on that plant. In other countries, work­ This issue, as others, has been dis­ proponents fail to recognize is that ers were provided notification. But in torted and misrepresented. But I still most companies are far beyond the ob­ America, employers did not have to am very hopeful that when the final jectives of this bill in looking at the provide notification to workers of a toll is taken, this institution will fol­ same issue. Talk to the most successful plant closing. low that path when it has been at its businesses in your State, and you will Well-we had a great debate here. best, and it will vote for economic jus­ find that the hierarchical, authoritar­ I remember when we tried to get clo­ tice for the American worker. ian systems of the past are being aban­ ture on it. We failed the first time, 58, Mr. President, I suggest the absence doned and are being replaced by team I think, to 35 or 36. Interesting enough, of a quorum. concepts and total quality manage­ after people cast that vote, 6 days later The PRESIDING OFFICER (Mr. BAU­ ment. it was 88 to 5 in favor of it. cus). The clerk will call the roll. There is a growing recognition that Why? Because finally as an institu­ The assistant legislative clerk pro­ being a world class organization in to­ tion we understood what was out there ceeded to call the roll. day's economy requires every employee 15822 CONGRESSIONAL RECORD-SENATE July 11, 1994 of a company to take responsibility for must be held open for them. Manage­ MEASURES PLACED ON THE the quality of the product which ulti­ ment would have no choice but to give CALENDAR mately reaches the customer. It re­ in to employee demands. The following measure was read the quires that every employee understand Mr. Chairman, not only does this bill second time by unanimous consent and that high productivity and high qual­ threaten American competitiveness, placed on the calendar: the legislation would effectively punish ity at the lowest possible cost is essen­ S. 2205. A bill to amend the Social Security tial to competitive success. those who fail to join a union or honor Act and the Internal Revenue Code of 1986 to To accomplish this overriding goal, a picket line. Workers in this Nation provide improved access to quality long­ businesses-managers and workers­ are guaranteed the right to strike and term care services, to obtain cost savings are coming to grips with the fact that the right not to strike. If those who through provider incentives and removal of the job security of any individual choose to honor the right not to strike regulatory and legislative barriers, to en­ worker is not tied to the right to or the right to refrain from union courage greater private sector participation strike, but to the ability of his or her membership are penalized by being dis­ and personal responsibility in financing such employer to adapt to an environment placed by those who choose to strike, services, and for other purposes. characterized by constant change. And the right not to strike is invalidated. the ability of an employer to adapt is, This bill is a solution in search of a in turn, dependent in large measure on problem. There is no evidence that the MEASURES HELD AT THE DESK how well trained and skilled its work use of permanent replacements has be­ The following resolution was read force is. come widespread in the 1980's. Between and ordered held at the desk: S. 55 is not a job security bill, al­ 1985 and 1990 only 3 out of 20 strikes in­ S. Res. 240. Resolution honoring the United though its sponsors may want to char­ volved the use of permanent replace­ States 1994 World Cup soccer team. acterize it as such. Its passage would ments, and in these cases only a small destroy, rather than enhance, job secu­ number of workers were actually re­ rity. It would enable labor to shutdown placed. The hiring of permanent re­ REPORTS OF COMMITTEES permanently many small companies. placements is not widespread and thus Under the authority of the order of Such companies are financially unable does not need to be addressed by any the Senate of June 27, 1994, the follow­ to cease production for a long period of bill. ing reports of committees were submit- time and are rendered especially vul­ Rather than create greater rifts be­ ted on July 7, 1994: · tween labor and management, ways nerable by S. 55. Most press accounts By Mr. JOHNSTON, from the Committee portray · this situation as involving a must be developed to increase the part­ on Energy and Natural Resources, with large, impersonal, powerful company nership between the two. Each needs amendments: and a small, weak union. However, the the other. The well-being of our Nation S. 1170: A bill to amend the Mineral Leas­ reverse is often reality. The company depends on their working as a team. ing Act to provide for leasing of certain is small and struggling for economic In 1965, the Warren Court stated: lands for oil and gas purposes (Rept. No. 103- survival, and the union is large and The right to bargain collectively does not 303). powerful with many resources at their entail any right to insist on one's position By Mr. JOHNSTON, from the Committee command. The loss of small companies free from economic disadvantage. * * * The on Energy and Natural Resources, with an right to strike as commonly understood is amendment in the nature of a substitute: would severely damage our national the right to cease work-nothing more. S. 1897: A bill to expand the boundary of economy and add to our unemploy­ the Santa Fe National Forest, and for other ment. The pain created would touch S. 55 works against the development purposes (Rept. No. 103-304). numerous individuals, families, and of the needed cooperation and team By Mr. JOHNSTON, from the Committee whole communities and would under­ work by destroying the incentives to on Energy and Natural Resources, with an cut companies' ability to compete in create an environment where bargain­ amendment in the nature of a substitute: the international marketplace. ing to meet both sets of needs is con­ H.R. 1348: A bill to establish the Quinebaug ducted. and Shetucket Rivers Valley National Herit­ But even if we focus on the larger in­ age Corridor in the State of Connecticut, and dustries in the United States, I fail to S. 55 depends the divisions between these two groups who must learn to for other purposes (Rept. No. 103-305). see how passage of this legislation is in By Mr. JOHNSTON, from the Committee the interest of labor or management. If work in tandem in order to meet the on Energy and Natural Resources, with we look at two industries-steel and new set of demands created by the amendments: automotive-what we see are major re­ global economy. S. 1919: A bill to improve water quality structuring efforts that seek to create within the Rio Puerco watershed and to help restore the ecological health of the Rio cost controls that are vital for their CLOTURE MOTION long term viability. Grande through the cooperative identifica­ We need legislation to keep Ameri­ Mr. FORD. Mr. President, I send a tion and implementation of best manage­ cloture motion to the desk. ment practices which are consistent with the cans working. However, this bill would ecological, geological, cultural, sociological, result in making American products The PRESIDING OFFICER. The clo­ ture motion having been presented and economic conditions in the region (Rept. far too expensive to compete against No. 103-306). Europe and Japan-countries that re­ under rule XXII, the Chair directs the clerk to read the motion. The following reports of committees ject our entire collective bargaining The assistant legislative clerk read were submitted on today, July 11, 1994: system-or anywhere else in the world. as follows: By Mr. PELL, from the Committee on For­ S. 55 would literally destroy this new eign Relations, without amendment: spirit of efficiency in American busi­ CLOTURE MOTION We, the undersigned Senators, in accord­ S. Res. 239. An original resolution express­ ness and put us at a competitive dis­ ance with the provisions of Rule XXII of the ing the sense of the Senate regarding condi­ advantage that would be impossible to Standing Rules of the Senate, hereby move tions for continued United States participa­ overcome. to bring to a close the debate on the motion tion under the Convention on Biological Di­ Current law maintains the parity to proceed to Calendar No. 162, S. 55, a bill to versity. necessary to provide incentives for amend the National Labor Relations Act to both labor and management to nego­ prevent discrimination based on participa­ tiate a settlement helpful to both par­ tion in labor disputes. EXECUTIVE REPORTS OF ties and to the national economy. S. 55 Edward Kennedy, John Glenn, Barbara COMMITTEE Boxer, Carl Levin, Russell D. Feingold, disrupts this needed balance.· Labor's Ben Nighthorse Campbell, Carol The following executive reports of incentive to negotiate is lessened by Moseley-Braun, Jay Rockefeller, Pat committees were submitted: the awareness that they can remain on Leahy, Don Riegle, Paul Simon, Daniel By Mr. PELL, from the Foreign Relations: strike indefinitely and at some time in K. Akaka, Bob Graham, Howard Treaty Doc. 103-20 Convention on Biologi­ the future return to a job that by law Metzenbaum, Paul Wellstone, C. Pell. cal Diversity (Exec. Rept. 103-30). July 11, 1994 CONGRESSIONAL RECORD-SENATE 15823 TEXT OF COMMITTEE-RECOMMENDED RESOLU­ ation capabilities of such vessels or aircraft [Mr. CHAFEE] was added as a cosponsor TION OF ADVICE AND CONSENT TO RATIFICA­ owned or operated by it, that such vessels or of S. 2120, a bill to amend and extend TION aircraft act in a manner consistent, so far as the authorization of appropriations for Resolved, (two-thirds of the Senators present is reasonable and practicable, with this Con­ vention. public broadcasting, and for other pur­ concurring therein), That the Senate advise poses. and consent to the ratification of the Con­ vention on Biological Diversity, with An­ s. 2183 nexes, Done at Rio de Janeiro June 5, 1992, SUBMISSION OF CONCURRENT AND At the request of Mrs. HUTCIDSON, the and Signed by the United States in New SENATE RESOLUTIONS names of the Senator from Mississippi York on June 4, 1993, subject to the following The following concurrent resolutions [Mr. LOTT], the Senator from South understandings: and Senate resolutions were read, and Carolina [Mr. THuRMOND], the Senator (1) The Government of the United States of referred (or acted upon), as indicated: from Florida [Mr. MACK], the Senator America understands that Article 3 ref­ erences a principle to be taken into account By Mr. PELL: from Alabama [Mr. SHELBY], the Sen­ in the implementation of the Convention. S. Res. 239. An original resolution express­ ator from Michigan [Mr. LEVIN], the (2) It is the understanding of the Govern­ ing the sense of the Senate regarding condi­ Senator from South Dakota [Mr. ment of the United States of America with tions for continued United States participa­ DASCHLE], the Senator from Alabama respect to provisions addressing access to tion under the Convention on Biological Di­ [Mr. HEFLIN], and the Senator from Il­ and transfer of technology that: versity; from the Committee on Foreign Re­ linois [Mr. SIMON] were added as co­ (a) "fair and most favorable terms" in Ar­ lations; placed on the calendar. sponsors of S. 2183, a bill to require the ticle 16(2) means terms that are voluntarily By Mr. THURMOND (for himself, Mr. agreed to by all parties to the transaction; GRASSLEY, Mr. HELMS, Mr. LAUTEN­ Secretary of the Treasury to mint (b) with respect to technology subject to BERG, Mr. DECONCINI, Mr. JOHNSTON, coins in commemoration of the 50th patents and other intellectual property Mr. MATHEWS, Mr. BAUCUS, Mr. anniversary of the signing of the World rights, Parties must ensure that any access COVERDELL, and Mr. WOFFORD): War II peace accords on September 2, to or transfer of technology that occurs rec­ S. Res. 240. A resolution honoring the Unit­ 1945. ognizes and is consistent with the adequate ed States 1994 World Cup soccer team; or­ dered held at the desk. s. 2265 and effective protection of intellectual prop­ At the request of Mr. JOHNSTON, the erty rights, and that Article 16(5) does not alter this obligation. name of the Senator from Pennsylva­ (3) It is the understanding of the Govern­ ADDITIONAL COSPONSORS nia [Mr. SPECTER] was added as a co­ ment of the United States of America with s. ~7 sponsor of S. 2265, a bill for the relief of respect to provisions addressing the conduct At the request of Mr. SIMON, the Nguyen Quy An and his daughter, and location of research based on genetic re­ name of the Senator from Maryland Nguyen Ngoc Kim Quy. sources that: SENATE JOINT RESOLUTION 182 (a) Article 15(6) applies only to scientific [Ms. MIKULSKI] was added as a cospon­ research conducted by a Party, while Article sor of S. 277, a bill to authorize the es­ At the request of Mr. JOHNSTON, the 19(1) addresses measures taken by Parties re­ tablishment of the National African­ names of the Senator from Virginia garding scientific research conducted by ei­ American Museum within the Smithso­ [Mr. WARNER] and the Senator from ther public or private entities; nian Institution. South Carolina [Mr. THuRMOND] were 19(1) (b) Article cannot serve as a basis for s. 1208 added as cosponsors of Senate Joint any Party to unilaterally change the terms At the request of Mr. WOFFORD, the Resolution 182, a joint resolution to of existing agreements involving public or designate the year 1995 as "Jazz Cen­ private U.S. entities. name of the Senator from Arkansas (4) It is the understanding of the Govern­ [Mr. BUMPERS] was added as a cospon­ tennial Year.'' ment of the United States of America that, sor of S. 1208, a bill to authorize the SENATE JOINT RESOLUTION 206 with respect to Article 20(2), the financial re­ minting of coins to commemorate the At the request of Mr. WOFFORD, the sources provided by developed country Par­ historic buildings in which the Con­ name of the Senator from Tennessee ties are to enable developing country Parties stitution of the United States was [Mr. MATHEWS] was added as a cospon­ to meet the agreed full incremental costs to sor of Senate Joint Resolution 206, a them of implementing rr1easures that fulfill written. the obligations of the Convention and to ben­ s. 1408 joint resolution designating September efit from its provisions and that are agreed At the request of Mr. LOTT, the name 17, 1994, as "Constitution Day." between a developing country Party and the of the Senator from Indiana [Mr. institutional structure referred to in Article COATS] was added as a cosponsor of S . SENATE RESOLUTION 239-0RIGI­ 21. 1408, a bill to repeal the increase in tax NAL RESOLUTION REPORTED EX­ (5) It is the understanding of the Govern­ on Social Security benefits. ment of the United States of America that, PRESSING THE SENSE OF THE with respect to Article 21(1), the "authority" S.2007 SENATE REGARDING CONDITIONS of the Conference of the Parties· with respect At the request of Mr. WOFFORD, the FOR CONTINUED U.S. PARTICIPA­ to the financial mechanism relates to deter­ name of the Senator from Idaho [Mr. TION UNDER THE CONVENTION mining, for the purposes of the Convention, KEMPTHORNE] was added as a cosponsor ON BIOLOGICAL DIVERSITY the policy, strategy, program priorities and of S. 2007, a bill to require the Sec­ eligibility criteria relating to the access to retary of the Treasury to mint coins in Mr. PELL, from the Committee on and utilization of such resources. commemoration of the 50th anniver­ Foreign Relations, Reported the fol­ (6) The Government of the United States of sary of the end of World War II and lowing original resolution; which was America understands that the decision to be placed on the calendar: taken by the Conference of the Parties under General George C. Marshall's service Article 21, Paragraph 1, concerns " the therein. S. RES. 239 amount of resources needed" by the financial s. 2012 Resolved, mechanism, and that nothing in Article 20 or At the request of Mr. FEINGOLD, the SECTION. 1. UNITED STATES PARTICIPATION 21 authorizes the Conference of the Parties UNDER THE CONVENTIO,Tony Meola, Mike Lapper, Mike pending before the subcommittee: It is the sense of the Senate that the Presi­ Burns, Ole Kooiman, Thomas Dooley, John S. 2253, to modify the Mountain Park dent should provide a report one year after Harkes, Hugo Perez, Ernie Stewart, Tab Project in Oklahoma, and for other the date of entry into force of the Conven­ Ramos, Roy Wegerle, Eric Wynalda, Juergen purposes; tion, and every year thereafter, to the Sommer, Cobi Jones, Frank Klopas, Joe-Max S. 2262, to amend the Elwha River Speaker of the House of Representatives and Moore, Mike Sorber, Marcelo Balboa, Brad Ecosystem and Fisheries Restoration to the Chairman of the Committee on For­ Friedel, Claudio Reyna, Paul Caligiuri, Fer­ Act; and eign Relations of the Senate outlining the nando Clavijo, and Alexi Lalas are members S. 2266, to amend the Recreation status of United States participation under of the United States 1994 World Cup soccer team; Management Act of 1992. the Convention and specifically explaining The hearing will take place on the status of the following: Whereas Bora Milutinovic is the head (1) The costs of United States participation coach of the United States 1994 World Cup Wednesday, July 27, 1994, at 2 p.m. in under the Convention during the preceding soccer team; room SD-366 of the Dirksen Senate Of­ one year period, and the total amount of pro­ Whereas the United States 1994 World Cup fice Building, First and C Streets, NE., jected expenditures under the Convention for soccer team staff consists of general man­ Washington, DC. the subsequent five year period. ager Bill Nuttall, assistant coach Timo Because of the limited time available (2) The financing mechanism and whether Liekoski, assistant coach Steve Sampson, for the hearing, witnesses may testify it includes a restructured Global Environ­ assistant coach Sigi Schmid, goalkeeping by invitation only. However, anyone ment Facility. coach Milutin Soskic, team administrator wishing to submit a written statement Renato Capobianco, press officer Dean (3) Whether decisions under the Convention for the printed hearing record is wel­ provide adequate and effective protections Linke, trainer Ander Rudawsky, assistant for intellectual property and, specifically, trainer Hughie O'Malley, equipment man­ come to do so. Please send your com­ whether those protections provided under ager Brian Fleming, assistant press officer ments to the Committee on Energy and the Convention are weaker than those pro­ Aaron Heifetz, press liaison Lisa Higgins, Natural Resources, U.S. Senate, Wash­ tections- and team doctor Bert Mandelbaum, M.D.; ington, DC, 20510, Attention: Leslie (A) provided under United States laws, and Palmer. (B) provided in other developed countries, Whereas the United States 1994 World Cup For further information, please con­ or soccer team has represented America honor­ tact Dana Sebren Cooper, counsel for (C) provided under the Uruguay Round of ably and in the best spirit of America: Now, the subcommittee at (202) 224-4531 or the General Agreement on Tariffs and Trade. therefore, be it Leslie Palmer at (202) 224-6836. (4) Whether the United States has received Resolved, That the United States Senate a vote in all aspects of the furtherance of commends the United States 1994 World Cup goals under the Convention that is commen­ soccer team for its participation and out­ ORDER TO RECESS surate with the level of United States as­ standing efforts in the 1994 World Cup soccer sessed contributions under the Convention. tournament. Mr. FORD. Mr. President, I ask unan­ (5) The biological safety protocol and imous consent that at the conclusion whether it was adopted in consultation with of the remarks of Senators THURMOND the United States Senate and the United NOTICE OF HEARING and SPECTER, the Senate stand in re­ States biotechnology industry. COMMITTEE ON ENERGY AND NATURAL cess as ordered. SEC. 3. DEFINITION. RESOURCES The PRESIDING OFFICER. Without As used in this resolution, the term "Con­ Mr. JOHNSTON. Mr. President, I objection, it is so ordered. vention" means the Convention on Biologi­ Mr. FORD. Mr. President, I suggest cal Diversity, signed in New York on June 4, would like to announce for my col­ leagues and the public that a hearing the absence of a quorum. 1993. The PRESIDING OFFICER. The has been scheduled before the Commit­ clerk will call the roll. tee on Energy and Natural Resources. The assistant legislative clerk pro­ SENATE RESOLUTION 24~HONOR­ The purpose of the hearing is to re­ ING THE U.S. 1994 WORLD CUP ceeded to call the roll. ceive testimony on S. 2151, a bill to di­ Mr. THURMOND. Mr. President, I SOCCER TEAM rect the Secretary of the Interior to ask unanimous consent that the order Mr. THURMOND (for himself, Mr. convey certain lands to the State of for the quorum call be rescinded. GRASSLEY, Mr. HELMS, Mr. WOFFORD, California, and for other purposes. The PRESIDING OFFICER. Without Mr. LAUTENBERG, Mr. DECONCINI, Mr. The hearing will take place on Tues­ objection, it is so ordered. JOHNSTON, Mr. MATHEWS, Mr. BAUCUS, day, July 19, 1994, at 9:30a.m. in room and Mr. COVERDELL) submitted a reso­ SD-366 of the Dirksen Senate Office NATIONAL LABOR RELATIONS ACT lution, which was read and ordered Building, First and C Streets, NE., AND RAILWAY LABOR ACT held at the desk: Washington, DC. AMENDMENTS S. RES. 240 Because of the limited time available Whereas soccer is the faster growing team for the hearing, witnesses may testify MOTION TO PROCEED sport in the United States; by invitation only. However, those Mr. THURMOND. Mr. President, I Whereas approximately 15,000,000 Ameri­ wishing to submit written testimony rise today to strongly oppose S. 55, the cans participate in organized soccer; for the printed hearing record should Striker Replacement Act. July 11, 1994 CONGRESSIONAL RECORD-SENATE 15825 This legislation could paralyze one of Now you have before you The Strike Bill unreasonable union demands or face finan­ the very fundamental cornerstones of (S. 55) which will promote more labor/man­ cial ruin. our country-the free market. S. 55 agement conflicts and give you unions unfair Another letter from International fun dam en tally alters over 50 years of bargaining leverage. This legislation will Paper: give unions unfair advantages in organizing labor law by shifting the existing and collective bargaining. There will be in­ At our paper mill in Georgetown­ labor-management balance of power to creased strike activity if this legislation is That is Georgetown, SC- favor big labor and unions. It would enacted and this will lead to disruption of all we are the largest private employer in the guarantee workers that they cannot chains of distribution dependent on the county and we have a strong, positive work­ lose their jobs during a strike, and other. ing relationship with our employees. would prohibit employers from hiring I urge you to vote NO on cloture. NO on The passage of this bill would lead to more permanent replacement workers in cer­ the Strike Bill and vote NO on any amend­ strikes and a decline in U.S. productivity. By tain circumstances. In short, it takes ment or compromise. forcing an employer to shut down during a Now, this next letter is from Jim strike, it creates greater potential for a com­ the risk out of striking. pany never to go back into business. The S. 55 runs directly counter to the McDonald, Director of Human Re­ paper industry is a global market and this underpinnings of current law, which sources, BI-LO. He said: bill will give the advantage to our foreign encourages negotiations and concilia­ S. 55 would * * * force employers to accept competitors. tion. Employers come to the bargain­ unreasonable union contract demands be­ That is signed by George E. Payton, ing table with the knowledge that their cause they have no other way to continue operations. the manager of human resources, Inter­ employees have the right to strike national Paper. which could cause them losses in prof­ That is just an excerpt from his let­ I also wish to point out that over 100 its and market share and could ulti­ ter. associations and organization&-rep­ mately put them out of business. At Another letter from the American resenting a wide variety of interest&­ the same time, employees come to the Furniture Manufacturers Association oppose this bill. Some of these include: bargaining table knowing that if they from Joseph G. Gerard. An excerpt is: the U.S. Chamber of Commerce, the do strike they may be replaced. These It is also important to note that the legis­ Business Roundtable, the National weapons available to both sides provide lation is counterproductive to economic sta­ Federation of Independent Businesses, a strong incentive for both parties to bility and job creation. It is ironic that at a time when Congress and the Administration the American Small Businesses Asso­ negotiate in good faith and resolve ciation, the Associated Builders & Con­ their differences without resorting to are exploring ways to cut the budget deficit and create more jobs. a bill is being consid­ tractors, the American Feed Industry strikes or replacements. ered that would breed strikes, destroy busi­ Association, the National Association Unfortunately, the proponents of this ness operations and create economic uncer­ of Horne Builders, Citizens for a Sound bill want to change this level playing tainty. Economy, and many, many more. field. They would have us believe that An excerpt from another letter. And Mr. President, in the Mackay Radio the mere threat of replacement com­ this is from Lockheed Aeronautical case in 1938, the Supreme Court ruled pletely nullifies the power of a strike. Systems Co.: that when faced with an economic They would also have us believe that strike, an employer may carry on its union employees are helpless victims As you know. S. 55 would destroy the em­ ployer/employee balance, which has well business with replacement workers. of oppressive management with no served the collective bargaining process for The Court made clear that at the end power to negotiate wages or benefits. decades, by removing all risk for unions in a of the strike, the employer is not re­ Mr. President, I seriously doubt the strike situation. Current labor law prohibits quired to displace any working em­ AFL-CIO, the United Auto Workers' the hiring of permanent replacement work­ ployee that had attained permanent Union, or the National Education Asso­ ers in strikes over unfair labor practices­ status. ciation feel powerless when they are at but S. 55 would extend that prohibition to The Supreme Court reaffirmed this the bargaining table. strikes arising out of economic issues. Such an extension would remove the major incen­ decision in 1990 in the Curtis Matheson Mr. President, I have heard from nu­ case. Once again, the Court stated that merous constituents in my horne State tive for unions to negotiate and settle eco­ nomic disputes, increasing the likelihood of an employer is not required to dis­ on the striker bill, and they are very more frequent and/or lengthy strikes with charge permanent replacement work­ concerned about its detrimental im­ the attendant costs to business. Government ers, to make room for returning strik­ pact. I want to take a few minutes to and society in terms of competitiveness, lost ers. Rather, the employer must only read from portions of some of these let­ jobs, and business failures/relocations. reinstate strikers as vacancies arise. ters. This letter is from Nils W. In over 50 years of collective bargaining with the International Association of Ma­ Furthermore, the employer may not Lindbloom III, President of The Tool discriminate on the basis of union ac­ Shed, Inc. of Greenville, SC. He says: chinists and Aerospace Workers Lockheed has never used replacement workers. How­ tivity in determining which returning DEAR MR. THURMOND. I own a tool store in strikers to reinstate. The employer Greenville, SO and though I've lived here ever, passage of this measure could severely since 1977, I grew up in the steel mill towns jeopardize future negotiations both by Lock­ must base all reinstatement decisions of the Midwest (Gary, Cleveland, Pitts­ heed and other employees, threatening the upon nondiscriminatory factors such as burgh). I know personally how unions can overall stability, competitiveness. strength, skill or ability. As is evident, there are negatively affect business as I was threat­ and productivity of business in the United reasonable protections for strikers ened by fellow union workers to slow down States. under existing law, and there are provi­ my rate of work, because I was exceeding the Another letter from the National sions for reinstatement as vacancies expected production. Council of Agricultural Employers: occur. Unions were originally established to pro­ Although many agricultural employees are I will not repeat the entire history of tect employees from employer abuses such not covered by the National Labor Relations as child labor. sweat shops, etc .. but now the the Mackay doctrine, except to point Act, the bill would have a serious impact on out that since that decision in 1938, unions run industry and in the long run will our ability to bring our products to market. continue to hurt the U.S. in the global econ­ A strike against a grain handling and mill­ neither the Supreme Court nor Con­ omy. Let's face it, millions of unemployed ing company, a trucking company. a food gress has attempted to upset the bal­ people in this land who want to work would processing or packaging company, a grocery ance of powers established-until now. love to drive a truck from point A to point concern or restaurant ultimately injures Mr. President, this legislation has B and do so safely for far less than $20 per those who provide the food itself. If we can't been renamed the "Workplace Fairness hour. If I can find someone who can do it for get that food or agriculture commodity to Act." Fairness for whom? Obviously it less, I should be allowed to hire whom I the consumer, we may as well not produce it. choose (isn't that free enterprise)? is not fair for American business and Let the strikers start their own businesses, Another except from the same letter. those who support it. It is not fair to risk capital. work 70 hour weeks and educate Without the right to hire permanent re­ those workers who continue to operate themselves in their spare time if they want placement workers, a harvest time strike during a strike. It is not fair to the to a make a greater income. leaves no option but to accept economically American consumer. 15826 CONGRESSIONAL RECORD-SENATE July 11, 1994 This selected title is not only mis­ hire permanent replacements. In Ger­ nomic weapon." Again, it is already leading it is downright deceptive. It many, unions may not make unreason­ unlawful for an employer to perma­ implies that the employer is engaged able bargaining demands that would nently replace a worker who is striking in some form of unfair labor practice. grievously wound an employer. I doubt due to unfair labor practices. The effec­ If that is the case, then there is no rea­ the proponents of this bill would sup­ tive economic weapon the chairman re­ son to proceed further with this legis­ port such a provision in American fers to is the ability of organized labor lation. It is already unlawful for an labor law. The merits of our system far to drive our entrepreneurs to their employer to permanently replace a exceed that of other foreign countries. knees during a strike which has no worker who is striking due to unfair I wish those who cite other nations consequences to the employee. labor practices. as such great states would stop bashing The existing collective bargaining Under present law, the employer who our workers. That is exactly what they climate represents an appropriate and chooses to use permanent replacements are doing. It has been proven time and acceptable balance between labor and during an economic strike operates again that our employees produce more management. It has generally resulted under a heavy obligation to insure full than any other in the world. in equitable contracts and relative compliance with the provisions of the The proponents say they are only labor peace. Any change in this current National Labor Relations Act or else doing it to help our workers. However, structure, in the absence of compelling an economic strike will be declared an I fail to see our workers leaving in need, is unwarranted. The proposed leg­ unfair labor strike. Therefore, the em­ droves to go to these utopian work islation would guarantee workers that ployer must insure that it takes no places. Instead, I see our immigration they cannot lose their jobs during a steps or engages in no activity which services having to go to . a lottery to strike, and would prohibit employers could convert the economic strike into allow others willing to work in our from hiring permanent replacement an unfair labor practice strike. great Nation. workers. This bill will have very nega­ We must keep in mind that employ­ Are those who support this bill so tive effects on the general public and ing replacements is simply not an at­ shortsighted that they fail to see that on all of the parties engaged in collec­ tractive tool for anything other than an increase in strikes actually harms tive bargaining-not only on the picket to keep the business in operation while the business that cannot continue to line, but also at the bargaining table. I the parties put their proposals to the efficiently produce and it harms the strongly urge my colleagues to oppose test of a strike. In making judgments overall economy? s. 55. on how or whether to continue oper­ Finally, proponents of this bill would · Mr. President, I ask unanimous con­ ations during a strike, management have us believe that the use of perma­ sent that copies of the letters I pre­ factors into the equation the very real nent replacements became a standard viously referenced appear in the economic costs of replacements in re­ practice during the 1980's, and that RECORD immediately following my re­ cruiting, hiring, and training, It fac­ Ronald Reagan was the first to ever marks. tors in morale costs such as the pos­ contemplate the use of permanent There being no objection, the letters sible damage to the collective bargain­ striker replacements. This simply is were ordered to be printed in the ing relationship that will result from not supported by the data. In a recent RECORD, as follows: THE TOOL SHED, INC., the determination to use replacement report by the General Accounting Of­ Greenville, SC, April 26, 1994. workers. Current law puts very signifi­ fice [GAO] requested by the bill's spon­ Hon. STROM THURMOND, cant restrictions on the recruitment of sors, the GAO found that, in 1985, only U.S. Senate, Washington, DC. replacements and on what management 4 percent of striking employees were DEAR MR. THURMOND: I own a tool store in can offer to replacements. Current law replaced by Mackay case replacements. Greenville, SC and though I've lived here also imposes significant penalties, such This decreased to 3 percent in 1989. The since 1977 I grew up in the steel mill towns of the Midwest (Gary, Cleveland, Pittsburgh). as back pay liability, on employers GAO data even includes as permanent I know personally how unions can nega­ who violate these restrictions. replacements those strikers who re­ tively affect business as I was threatened by I would like to address a few argu­ turned or will return to their jobs ei­ fellow union workers to slow down my rate ments that the proponents of this leg­ ther as a result of vacancies, a strike of work, because I was exceeding the ex­ islation have raised surrounding this settlement, or a National Labor Rela­ pected production. issue. tion Board order in the case of an un­ Unions were originally established to pro­ First, the proponents maintain that tect employees from employer abuses such fair labor practice skike. The GAO as child labor, sweat shops, etc., but now the "a strike is evidence that everything study clearly demonstrates that this unions run industry and in the long run will has gone awry, that management has practice is not widespread. continue to hurt the U.S. in the global econ­ failed." They place the entire respon­ Proponents of this bill would also omy. Let's face it, millions of unemployed sibility of a strike on the back of man­ have us condemn President Reagan for people in this land who want to work would agement. I wonder if the proponents of using permanent replacements in 1981 love to drive a truck from point A to point S. 55 ever think unions make unreason­ during the air traffic controllers B and would do so safely for far less than $20 able bargaining demands. I wonder if strike. I would remind my colleagues per hour. If I can find someone who can do it for less I should be allowed to hire whom I they have ever seen a strike they did that the PATCO strike which we have choose (isn't that free enterprise)? not like. heard so much about in this debate was Let the strikers start their own businesses, Second, proponents gleefully argue an illegal strike. Those PATCO em­ risk capital, work 70 hour weeks and educate that no other industrialized Nation en­ ployees decided to strike. Thereby put­ themselves in their spare time if they want gaging in rapid productivity growth al­ ting American lives at risk. This was to make a greater income. lows permanent replacements. This in direct violation of the law, and those Now you have before you The Strike Bill simply is not true. Many industrialized (S. 55) which will promote more labor/man­ who would make their actions heroic agement conflicts and give unions unfair countries permit employers to hire per­ are simply condoning criminal ·activ­ bargaining leverage. This legislation will manent replacements, including Aus­ ity. give unions unfair advantages in organizing tralia, Austria, Hong Kong, Ireland, Mr. President, the whole point of this and collective bargaining. There will be in­ Norway, and the United Kingdom. legislation is to prop up the unions. creased strike activity if this legislation is These proponents also frequently cite The proponents see the decline in orga­ enacted and this will lead to disruption of all Germany and Canada as exemplary nized labor-their political support­ chains of distribution dependent on the countries that do not permit perma­ ers-and they want to keep it alive. other. nent replacements. In fact, a majority The chairman of the Subcommittee I urge you to vote NO on cloture. NO on the Strike Bill and vote NO on any amend­ of Canadian provinces, including Al­ on Labor admits this fact when he stat­ ment or compromise. berta, New Brunswick, Newfoundland, ed that "the future of the American Sincerely, Nova Scotia, Prince Edward Island, and labor movement depends on restoring NILS W. LINDBLOOM III, Saskatchewan, permit employers to the right to strike as an effective eco- President. July 11, 1994 CONGRESSIONAL RECORD-SENATE 15827 DIXIE-NARCO, the risk to Unions for their failure to reach LOCKHEED AERONAUTICAL SYSTEMS CO., Williston, SC, April 26, 1994. an agreement. Charleston, SC, May 2, 1994. Ron. STROM THURMOND, S. 55 would also harm innocent employees Ron. STROM THURMOND, U.S. Senate, Russell Senate Office Building, within the affected companies who have no U.S. Senate, Russell Senate Office Bldg, Wash- Washington, DC. dispute with the employer. They may perma­ ington, DC. · DEAR SENATOR THURMOND: I understand nently lose their jobs when employers are DEAR SENATOR THURMOND: I am writing on that a vote on S. 55, the " Workplace Fair­ forced to shut down in the face of unreason­ behalf of Lockheed to express our strong op­ ness Act," may come up soon in the Senate. able demands for increased wages and bene­ position to S. 55, the Striker Replacement We at Dixie-Narco again urge you to oppose fits. bill. Your past opposition is appreciated, and this bill in any form. I urge you to maintain this position as the By prohibiting employers from granting The true impact of S. 55 is contrary to the issue comes before the Senate again in the permanent replacement status to individuals goal of the President's economic plan to re­ next few weeks, where it faces a likely fili­ who work during a strike, this bill upsets the store and strengthen the nation's economy. I buster. delicate balance in labor law that has pre­ urge you to VOTE AGAINST S. 55, to sup­ As you know, S. 55 would destroy the em­ vailed for five decades. It does this by remov­ port a filibuster of the bill and to accept no ployer/employee balance, which has well ing the main risk striker&-the possibility compromise. No compromise would be ac­ served the collective bargaining process for that their employer could operate with per­ ceptable on this issue, because any changes decades, by removing all risks for unions in manent replacements. If this bill becomes made in the Senate version would no doubt a strike situation. Current labor law pro­ law, it would greatly encourage strikes and be lost when House and Senate representa­ hibits the hiring of permanent replacement would fundamentally alter labor-manage­ tives meet to finalize the legislation. workers in strikes over unfair labor prac­ ment relations. If these long-established Sincerely, tices - but S. 55 would extend that prohibi­ principles of fairness are overturned, Dixie­ JIM MCDONALD , tion to strikes arising out of economic is­ Narco will be faced with higher costs and a Director of Human Resources. sues. Such an extension would remove the diminished ability to compete in inter­ major incentive for unions to negotiate and national markets. AMERICAN FURNITURE settle economic disputes, increasing the You should be aware that this bill would MANUFACTURERS ASSOCIATION, likelihood of more frequent and/or lengthy allow unions to call risk-free strikes over al­ Washington, DC, May 2, 1994. strikes with the attendant costs to business, most any issue. In addition, companies like government, and society in terms of com­ Dixie-Narco and our 850 union-free South MEMORANDUM petitiveness, lost jobs, and business failures/ Carolina employees will be affected by this To: All Members of the U.S. Senate. relocations. bill in two ways: first, the resulting strikes From: Joseph G. Gerard. In over 50 years of collective bargaining against our unionized suppliers will eventu­ Subject: AFMA Key Vote-S. 55, Striker re­ with the International Association of Ma­ ally affect our ability to run our business; placement legislation. chinists and Aerospace Workers, Lockheed and second, this bill can only support the il­ The American Furniture Manufacturers has never used replacement workers. How­ lusion fabricated by union organizers that Association (AFMA) is the largest furniture ever, passage of this measure could severely unionization equals job security-raising the industry trade association in the United jeopardize future negotiations both by Lock­ odds of a successful union organizing cam­ States. Over eighteen billion dollars in sales heed and other employers, threatening the paign in our Williston facility. are produced annually by domestic furniture overall stability, competitiveness, strength, The favorable labor climate in South Caro­ manufacturers, and sales by AFMA member and productivity of businesses in the United lina was a big factor in Dixie-Narco's 1989 de­ companies make up the vast majority of that States. cision to relocate to Williston, and we have I respectfully urge you to vote "NO" on figure. Also, the AFMA members have home any compromise, "NO" on cloture, and " NO" been proud to be among the Governor's offices or facilities in almost every state and Award winners as a top job creator ever employ approximately 500,000 workers. on S. 55. Thank you for your consideration. since. S. 55 represents a direct threat to the Sincerely, position from a Federal level. Labor organiz­ I am writing to express my strong opposi­ BLAIR MADDOCK , ers already operate on bushels of false 'prom­ tion to any supposed "compromise" on S. 55, Charleston Plant Manager. ise&-always promising to get more-even the striker replacement legislation. The vote though they know they can't deliver any­ on S. 55 will be an AFMA key vote for this NATIONAL COUNCIL thing that a company won't agree to give. election cycle. OF AGRICULTURAL EMPLOYERS , Why give them yet another means of creat­ The AFL-CIO is pushing for provision that Washington, DC, May 3, 1994. ing false hopes? Why tip the balance to such would ban the use of replacement workers Ron. STROM THURMOND, an absurd degree? for four to 10 weeks following the start of a U.S. Senate, Russell Senate Office Building, strike. Calling such a moratorium a "cooling Washington, DC. BI-LO, INC., off period" is preposterou&-the only side DEAR SENATOR THURMOND: We the under­ Mauldin, SC, April 29, 1994. doing the "cooling" is the business forced to signed agricultural organizations are writing Ron. STROM THURMOND, shut down! The "compromise" would avoid a in strong opposition to S. 55, the Cesar Cha­ U.S. Senate, Washington, DC. few strikes since most strikes last less than vez Workplace Fairness Act, which would DEAR SENATOR THURMOND: I am the Direc­ 10 weeks. And short strikes for highly com­ prevent employers from operating during a tor of Human Resources at BI-LO, Inc., petitive businesses like the American fur­ strike by hiring permanent strike replace­ which employs over 17,000. I am writing you niture manufacturing industry are devastat­ ments. We would also oppose any so-called to urge you to vote against S. 55 anti-striker ing because most of the industry is com­ "compromise" that may be offered to this replacement legislation. prised of small companies with very narrow bill, since any change in current law would Over the past fifty years, federal labor law profit margins. alter the necessary balance between labor has crafted a delicate balance between em­ Even with the supposed "compromise" S. and management. ployers and employees in labor negotiations 55 would play havoc with industry by over­ Although many agricultural employees are which encourages both parties to settle their turning 50 years of labor law precedent that not covered by the National Labor Relations disputes at the bargaining table, not through permits employers to replace economic Act, the bill would have a serious impact on disruptive tactics. S. 55 would effectively strikers. By removing the risk that they our ability to bring our products to market. eliminate this balance and force employers may be replaced, even for shorter strikes, A strike against a grain handling and mill­ to accept unreasonable union contract de­ workers would have little incentive to bar­ ing company, a trucking company, a food mands because they have no other way to gain in good faith. processing or packaging company, a grocery continue operations. concern or a restaurant ultimately injures Because S. 55 eliminates risk for both sides It is also important to note that the legis­ those who provide the food itself. If we can't to find an accord in labor disputes the bill lation is counterproductive to economic sta­ get that food or agricultural commodity to would substantially increase the number of bility and job creation. It is ironic that at a the consumer, we may as well not produce it. strikes, adversely affecting the overall eco­ time when Congress and the Administration Those of us involved in the production and nomic performance of the nation. Current are exploring ways to cut the budget deficit processing of food are especially susceptible labor law places a risk on both employers and create more jobs, that a bill is being con­ to strikes. History has shown that a well and employees for failing to reach an accord sidered that would breed strikes, destroy placed strike at a food processor/canner dur­ in a labor dispute. Employers risk the cost of business operations and create economic un­ ing the peak of ha.::-vest places both the grow­ losing valuable, skilled workers and incur­ certainty. er and processor in a disastrous position. Be­ ring excessive costs during a strike to hire I strongly urge you to oppose striker re­ cause of the perishability of many agricul­ replacements. Unions risk the loss of jobs for placement legislation and any sham com­ tural commodities, a strike at a packing or their members. This bill, S. 55, would remove promise!! processing facility places the en tire crop and 15828 CONGRESSIONAL RECORD-SENATE July 11, 1994 livelihood of the grower and packer/proc­ fice and International Labor Organization demands. The basic structure of labor-man­ essor at risk. Without the right to hire per­ concede there is no data to support the con­ agement relate as has worked well for more manent replacement workers, a harvest-time clusion that replacement workers are fre­ than 50 years. The baking industry's reasons strike leaves no option but to accept eco­ quently being used to resolve labor disputes. for vehemently opposing a dramatic shift in nomically unreasonable union demands or We believe in fairness but feel that S. 55 that structure are clear, employer rights, face financial ruin. would only benefit the less than 12 percent of like employee rights MUST be protected. As We urge the Senate to forego any further workers represented by unions at the ex­ the Supreme Court said in 1938, " The right to consideration of this damaging legislation. pense of the majority of employees and em­ strike is not unconditional. It must be bal­ National Council of Agricultural Employ- ployers. A Congressional mandate that anced with the employer's right to stay in ers. unions win every strike will unfairly advan­ business." American Farm Bureau Federation. tage union organizing efforts. Accordingly, Pepperidge Farm urges you to think care­ Agricultural Affiliates. we respectfully urge you to vote " NO " on fully about the long-term ramifications of Agricultural Producers. cloture, " NO " on any compromise, and " NO " this legislation by opposing S. 55 in any form Agricultural Retailers Association. on S . 55. and voting NO on cloture. Sincerely, Sincerely, INTERNATIONAL PAPER, R. G. ROCAMORA, ERNEST R. ALLEN, Georgetown, SC, June 14, 1994. Hon. STROM THURMOND, General Manager, Capacitor Products. Plant Manager. 217 Russell Building, Washington, DC. DEAR SENATOR THURMOND, the striker re­ WINN DIXIE, PYA/MONARCH, INC., placement bill, to be di.scussed on Thursday, Greenville, SC, April 28, 1994. April 21, 1994. is an important issue to International Paper. Hon. STROM THURMOND, Hon. STROM THURMOND, I request that you continue to oppose this U.S. Senate, Washington, DC. U.S. Senate, Washington, DC. bill and do what is possible to keep this bill DEAR SENATOR THURMOND: As you are DEAR SENATOR THURMOND: I am writing on from passing. aware, Senate Bill 55 has been introduced in behalf of PYA/Monarch, Inc. to express our At our paper mill in Georgetown, we are the Senate which will lead to more strikes, strongest opposition to the Striker Replace­ the largest private employer in the county resulting in increased unemployment and ment Bill, S.55. If enacted this legislation and we have a strong, positive working rela­ community disruption. This legislation is will have a devastating effect no only on my tionship with our employees. designed to make the strike a lethal weapon, company, but on the food distribution indus­ The passage of this bill would lead to more tilting the balance at the bargaining table. try as a whole. strikes and a decline in U.S. productivity. By At a time when job creation and economic Our labor laws recognize two equal rights: forcing an employer to shut down during a growth are our nation's top priorities, it my workers' unconditional right to strike strike, it creates greater potential for a com­ makes no sense to adopt a policy that will and my company's right to stay open during pany never to go back into business. The cost jobs and stifle growth. a strike by hiring permanent replacement paper industry is a global market and this As an employer in South Carolina, I urge workers. The Striker Replacement Bill bill would give the advantage to our foreign you to work toward the defeat of Senate Bill would destroy that balance by removing all competitors. 55. risks for workers in a strike situation. My Vote against the striker replacement bill. (1) Vote no on the Striker Replacement c ..Jmpany, on the other hand, would no longer GEORGE E. PAYTON, Bill-This is a crucial issue that will affect have any effective recourse to strikes other Manager Human Resources. the business environment and economy for than to give in to workers' demands or shut years to come. down operations. COOPER INDUSTRIES, (2) Vote No on Cloture-The cloture votes A "risk-free" strike bill would encourage Greenwood, SC, April 25, 1994. will be the key votes on this bill. If you op­ employees to strike first and negotiate later, Senator STROM THURMOND, pose the bill, you must vote No on Cloture. resulting in more strikes and more busi­ U.S. Senate, Russell Senate Office Building, (3) Vote No on any political compromises­ nesses closing their doors. The bill is a seri­ Washington, DC. Phony Compromises suffer from the same ous threat to my company. It would make us DEAR SENATOR THURMOND: As an employer faults as the bill itself. The House has al­ less competitive and would have a ripple ef­ of 200 employees of Cooper Power Systems' ready passed the bill, and it is doubtful any fect on my non-striking customers, suppli­ Greenwood Capacitor Products plant, I am compromise would survive the House-Senate ers, workers, and also consumers. writing to express strong opposition of S. 55, Conference. I strongly urge you to oppose the Striker the striker replacement bill. In our view, We appreciate your help in defeating Sen­ Replacement Bill. Please contact me if you this measure is unwarranted and will fun­ ate Bill 55. have any questions. damentally change core principles of U.S. Sincerely, Sincerely, labor law. It will overturn more than 55 D.L. WHITFORD. JAMES R. CARLSON, years of well-settled legal precedent and, in President and CEO. the end, lead to more strikes. PEPPERIDGE FARM INC. , National labor policy, beginning with the Aiken, SC, April 7, 1994. BURLINGTON MENSWEAR, Wagner Act of 1935, balances the rights of Hon. STROM THURMOND, Bishopville, SC, April 26, 1994. employers and employees. Unlike many of U.S. Senate, Washington, DC. Re Opposition to S.55, striker replacement legis­ our international competitors, American DEAR SENATOR THURMOND: Once again, lation. workers have the unconditional right to Pepperidge Farm, Inc. urges that you vote Hon. STROM THURMOND, strike. The Wagner Act also contemplated NO on cloture and NO on final passage of S. U.S. Senate, Washington, DC. that employers could continue operations 55, the Striker Replacement Bill. Pepperidge DEAR SENATOR THURMOND: It is my under­ during economic strikers using permanent Farm is well aware the Senate is preparing standing that the so-called Striker Replace­ replacements, which was affirmed by the Su­ to vote on this legislation, whether as a ment Bill (S.55) could be considered by the preme Court in 1938. This balance has en­ stand-alone measure or as an amendment to Senate at any time. I am very much opposed couraged successful negotiations and served other legislation awaiting Senate approval. to this legislation because it removes the the interests of employers, employees and Pepperidge Farm, which manufactures Pre­ current balance that exists in collective bar­ the nation for more than half a century. mium Baked Goods, has strongly opposed gaining and provides unions with virtual im­ As written, S. 55 removes all risks to this legislation in the past and will continue munity to job loss should they strike. Em­ unions in a strike situation. Employers, on to do so in any form! ployers would be left with the choice of giv­ the other hand, would no longer have any ef­ For the wholesale baking industry, the ing in to a union's demands or going out of fective recourse to strikes other than to ac­ issue is abundantly clear-if union employ­ business. cede to a union's demands or cease oper­ ees have the right to leave their jobs over Further, there is ample evidence from ations. Looking to the experience of Canada, unresolved economic issues, then the em­ studies of countries where such laws exists where some provinces ban the use of perma­ ployer has every right to protect the eco­ that they contribute to more and longer nent replacement workers, we believe S. 55 nomic interests of the company and its . strikes. How can a law which would cause would lead to longer, more frequent strikes shareholders by hiring permanent replace­ this to happen be good for our country's in the United States. A University of To­ ment employees. The option of using perma­ economy? Clearly, it wouldn't . ronto study in 1989 found that in provinces nent replacements is every bit as essential to Please do not support the above bill or that prohibited striker replacement, the the nation's labor policy as the right of em­ allow any " compromise" bill to reach a con­ strikes were of greater frequency and dura­ ployees to strike. This change in the current ference committee where it can then be revi­ tion than in other provinces. "balance of power" between labor and man­ talized. This is bad law in any form. The use of replacement workers has been agement would render employers virtually Very truly yours, relatively rare. The General Accounting Of- helpless in the face of unreasonable union WILLIAM R. HILL. July 11, 1994 CONGRESSIONAL RECORD-SENATE 15829 Mr. SPECTER addressed the Chair. stitutes public policymaking by the fourth, fifth, and sixth. Again, he de­ The PRESIDING OFFICER. The Sen­ Supreme Court. clined to answer. ator from Pennsylvania [Mr. SPECTER], In the United States today, the· crime Judge Souter, now Justice Souter, is recognized. problem is of overwhelming impor­ appeared before the Judiciary Commit­ tance. That proposition needs no am­ tee and was asked questions relating to plification or embellishment. The the critical constitutional questions of THE NOMINATION OF JUDGE STE­ death penalty is a very important de­ the authority of Congress to declare PHEN BREYER TO BE AN ASSOCI­ terrent to crime. More than 70 percent war contrasted with the President's au­ ATE JUSTICE OF THE SUPREME of the American people favor the death thority as Commander in Chief, and I COURT penalty. When the issue comes before asked whether the Korean conflict was Mr. SPECTER. Mr. President, I have this body, characteristically, 70-plus a war within the meaning of the Con­ sought recognition to comment briefly Senators vote in favor of it. But in case stitution, and Judge Souter declined to on the nomination of Judge Stephen after case, there is engrafted by the Su­ answer. The general rule is that a Sen­ Breyer for the Supreme Court of the preme Court new constitutional rules ator can ask any question he or she United States. I am advised that we which are not found on the face of the chooses, and the nominee has the will not have opening statements to­ document, and are not d~rived from the standing to decline to answer any ques­ morrow, so I thought it worthwhile to Founding Fathers' intentions, but are tion, but the one line which is out of make a few comments this evening on really matters of public policy. bounds, perhaps, is to ask a question on that subject. We have vital interests, vital con­ a case which may come before the I have awaited a quorum call most of cerns on war powers. The Constitution Court. the afternoon, and the Senate was vir­ vests the sole authority in the Con­ The Korean conflict case could not tually in continuous business. I under­ gress of the United States to declare possibly come before the Court. In stand the hour is late and I shall be rel­ war. Yet, we see where there are con­ order to get some idea as to the think­ atively brief, but I think these are im­ flicts which amount to wars, and it is ing of Judge Souter on a very critical portant remarks. very hard to get answers from the question that the Supreme Court of the In my view, the Senate has no duty nominees when their confirmation is United States may have to arbitrate which is more important than the con­ virtually assured on the appropriate between the Congress' authority to de­ firmation of Supreme Court justices, meaning of the constitutional power to clare war versus the President's au­ and that is true because with so many declare war or on any other question thority as Commander in Chief, that is 5 to 4 decisions, that fifth vote has put to nominees. a question which this Senator thought enormous impact on every man, It has been apparent in the 14 years ought to be answered. But Judge woman, 1.nd child in the United States that I have been present-and tomor­ Souter did not think so. and, very frequently, it has great im­ row will mark the ninth Supreme Last year, when Judge Ginsburg, now pact on people around the world. Court confirmation since my election Justice Ginsburg, appeared before the That fifth swing, deciding justice, for in 1980, that nominees for the Supreme Judiciary Committee, a number of Sen­ that· case has much greater power than Court of the United States answer as ators commented on how few questions the President of the United States, many questions as they really feel she answered. When I asked her about where there are many checks and bal­ compelled to in order to be confirmed. the death penalty and whether she had ances on what the President does. The any conscientious scruples against it, When the nomination or confirmation she in effect told me it was none of my President serves for 4 years, or perhaps of a nominee is virtually assured, it is business and none of the Senate's busi­ 8, but the Supreme Court justices serve very hard to get answers from the ness. The issue of whether a juror has much longer-several decades, in nominees. When Judge Scalia, now Jus­ conscientious scruples against the many, many instances. So their con­ tice Scalia, appeared before the Judici­ death penalty is traditionally recog­ firmation is of great importance. ary Committee, he would not answer nized as a very relevant question. In a When the Constitution was drafted, even basic questions as to whether the death penalty case, if the prospective the first article was devoted to the decision in Marbury versus Madison juror answers in the affirmative that Congress; the second article was de­ was established constitutional law and he or she has conscientious scruples voted to the executive branch, the not subject to challenge. When Justice against the imposition of the death President; and the third article was de­ Rehnquist, now Chief Justice penalty, that is grounds for disqualify­ voted to the judiciary. Since Marbury Rehnquist, appeared before the Judici­ ing the juror for cause, not a peremp­ versus Madison was decided by the Su­ ary Committee, he would not respond tory challenge where the prosecutor preme Court of the United States in to questions as to whether the Con­ and the defendant have substantial 1803, the judiciary has been supreme. gress could take away jurisdiction of latitude on striking jurors without any The judiciary has the final word, on a the Supreme Court on constitutional specific cause. constitutional issue, that is it, in the issues. I make these references because they absence of a constitutional amend­ A staff member on the Judiciary are illustrative of the difficulties of ment, which is very hard to enact. Committee acquainted me with an ar­ getting answers from nominees in a Even on nonconstitutional issues, the ticle written by William Rehnquist in context where so many Senators com­ word of the Supreme Court is virtually the Harvard Law Record in 1958, long ment in advance that the nominee is the last word, although Congress may, before William Rehnquist became a Su­ fine and the media reports, and accu­ but frequently does not, act. preme Court justice, in which he wrote rately reports I think, that the con­ The power of the Supreme Court has that nominees should answer questions firmation of Judge Breyer is a foregone become even more important in an era put to them by the Senate. When con­ conclusion, which very dramatically of much judicial legislation, far beyond fronted with that article, he answered limits the scope of the meaningfulness the traditional concept of the judicial a few questions. He finally would an­ of the Judiciary Committee in the first role of interpreting the law. In many swer a question saying that the Con­ instance and the Senate in the final in­ ways, the Supreme Court of the United gress could not take away the jurisdic­ stance performing this constitutional States has become a super legislature. tion of the Supreme Court on first duty of confirmation, advice and con­ This is of enormous importance in an amendment issues. And then he was sent, and this is the consent function era in which many cases come before asked about the fourth amendment and in the face of a virtual coronation in the court where new concepts of con­ declined to answer; the fifth amend­ advance. stitutional law are engrafted that have ment, declined to answer; the sixth We have seen instances, Mr. Presi­ not been provided for either by the amendment, declined to answer. Then dent, and I shall mention only two in­ Founding Fathers in intent or on the he was asked why he had answers to stances briefly, of the super-legislature face of the document. This really con- the first amendment and none on the in action. 15830 CONGRESSIONAL RECORD-SENATE July 11, 1994 The Civil Rights Act was enacted in memo contrasting the pedigree of the MEASURE HELD AT THE DESK­ 1964. Seven years later in the Griggs Supreme Court justices, including the SENATE RESOLUTION 240 case the issue of business necessity on current nominee, Judge Breyer, made I Mr. THURMOND. Mr. President, I employment practices was decided by a thought a very telling analogy to the send a resolution to the desk and ask unanimous Court with the opinion silk-stocking nominees who were char­ unanimous consent that the resolution written by Chief Justice Burger. That acteristically approved by the Amer­ be held at the desk until the close of decision stood for 18 years, ratified by ican Bar Association and sit on the business tomorrow. congressional acquiescence without Federal courts with Mr. Alexander Wil­ The PRESIDING OFFICER. Without any action made to amend the Civil liams who may have woolen socks, as objection, it is so ordered. Rights Act of 1964. Then in 1989 the Charity Wilson, my staffer, put it, Wards Cove decision came down, and "woolen socks with a hole in them." the Supreme Court of the United I think there ought to be emphasis COMMENDING PARTICIPATION OF States in what really constituted by this body, Mr. President, and that is U.S. SOCCER TEAM IN 1994 super-legislative action changed the why I take a moment or two now and WORLD CUP SOCCER TOUR­ definition of business necessity requir­ will take a few moments during the NAMENT ing congressional action with the Civil confirmation hearings to comment Rights Act of 1991 to reinstate the law about the context of the Court where Mr. THURMOND. Mr. President, I to what Congress had intended. we do not have Justices. who have had rise today to submit a Senate resolu­ The Court interpreted that on public experience as trial lawyers, as assist­ tion commending the participation of policy grounds. The Supreme Court in ant district attorneys, or as public de­ the U.S. soccer team in the 1994 World a matter of superlegislation changed fenders, people who have litigated ex­ Cup soccer tournament. the law. tensively or have extensive pro bono I ask unanimous consent that Sen­ The family planning provisions were work with a real feel for what goes on ator GRASSLEY, Senator HELMS, Sen­ enacted in the 1970 legislation, and a in America. ator WOFFORD, Senator LAUTENBERG, regulation interpreting that law was It is true that the President has sole Senator DECONCINI, Senator JOHNSTON, issued in 1971 by the Federal agency discretion in his nominating function, and Senator MATHEWS be added as co­ that had helped draft the law the pre­ but it was equally true that the Senate sponsors. vious year making it clear that doctors has sole discretion in deciding what the The PRESIDING OFFICER. Without could counsel women on planned par­ confirmation standards should be. objection, it is so ordered. enthood on the abortion option. Then There are learned scholars, among The Chair in his capacity as a Sen­ in 1988 the regulation was changed and them Justice Ginsburg, who com­ ator from Montana asks unanimous the Supreme Court of the United mented about the equal standing of the consent that he also be added as co­ States in the Rust decision decided Senate in making evaluations of the sponsor. that that change was appropriate be­ qualifications of judicial nominees. Without objection, it is so ordered. cause there had been a change in public I raise these questions, Mr. Presi­ Mr. THURMOND. Mr. President, cur­ opinion notwithstanding the fact that dent, not thinking that they are likely rently, the United States is hosting the by 17 years of acquiescence the Con­ to have any telling effect on the pro­ world's most celebrated sports event, gress had in effect given its imprima­ ceedings as to Judge Breyer tomorrow the 1994 World Cup. This honor was tur that the earlier regulation was the but to try to at least have one Senator awarded on July 4, 1988, by the Federa­ appropriate interpretation of the law. express a view as to the importance of tion Internationale de Football Asso­ There is one other matter I want to the position of the Supreme Court of ciation, otherwise known as FIFA, comment on very briefly, Mr. Presi­ the United States where that fifth vote which is headquartered in Zurich, dent, and that is the trend on the Su­ has more power than the President and Switzerland. This is the first time in preme Court to consist virtually exclu­ the practice of coronating in advance the 64-year history of the World Cup sively of ex-judges. Eight of the cur­ so that the nomination proceedings that America has been the host of this rent nine Supreme Court Justices came themselves do not have the impact or prestigious event. from appellate courts, seven from U.S. the meaning they ought to have by vir­ I believe this tournament will stimu­ courts of appeal and one from a State tue of ruling out so many of the ques­ late interest in organized soccer in the appellate court, and Judge Breyer tions which nominees ought to answer. United States. It is estimated that soc­ comes right in the same mold from a When I say ought to answer it is their cer ranks third in team sport popu­ U.S. court of appeals. decision and it is a balance, and the larity for youngsters under the age of Many of us were disappointed and eight nomination proceedings from 1981 18, preceded only by basketball and said so publicly, and I publicly ex­ through 1993 show I think a pattern volleyball. pressed my disappointment, in not hav­ that the nominees answered as many My home State of South Carolina has ing Secretary of the Interior Babbitt questions that they feel they have to benefited from the popularity of this nominated to provide some diversity to answer. sport. According to Fortune magazine, the court--someone who had been a I would hope in the future that we Umbro, a soccer apparel manufacturer, Governor, a Secretary of the Interior, would have some greater diversity on is owned by Stone Manufacturing Co. and a Presidential candidate, to give the Court. I would hope in the future of Greenville, SC. Umbro's global sales some broader diversity of experience. that there will be greater diversity on exceed $300 million and are growing at The need for diversity in experience nominations. I would hope in the fu­ an estimated ·rate of 70 percent per was brought to the fore again recently ture that Sen a tors refrain from giving year. Also, according to Fortune maga­ when the Judiciary Committee held a approval in advance or coronating zine, the 1994 World Cup final series is confirmation hearing for Mr. Alexander nominees in advance so that we can do expected to create approximately $4 Williams, who was nominated for the our duty, that we can really find out billion in revenues from all sources. U.S. district court for the District of about these nominees and improve the Twenty-four teams from around the Maryland. He was opposed by the caliber of the Supreme Court of the world have gathered in Boston, Chi­ American Bar Association, which found United States, as our fuunction is a cago, Washington, Los Angeles, De­ him not qualified. This opposition very, very important one because the troit, Dallas, New York, San Francisco, raises the issue as to whether you have justices of that court do have the last and Orlando to participate in this 52- to be from a prominent law school and word on the meaning of the Constitu­ game tournament. The final game will from a prominent law firm, a silk tion. be played on July 17 at the Rose Bowl stocking lawyer, in effect, in order to I thank the Chair and yield the floor. in Pasadena, CA. Thousands of foreign become a Federal judge. And Charity The PRESIDING OFFICER. The Sen­ visitors have come to America to sup­ Wilson, my staffer who wrote me a ator from South Carolina. port their teams and experience the July 11, 1994 CONGRESSIONAL RECORD-SENATE 15831 1994 World Cup. The number of spec­ sport in America where boys and girls U.S. WORLD CUP TEAM ROSTER-Continued tators at each game is shattering all play on the same team through their previous attendance records. elementary years and often in coed Number, name, and position Hometown In 1990, approximately 1.3 billion peo­ adult leagues. 22. Alexi Lalas, Defender ... Detroit, Mi. ple watched the 1990 World Cup final on Team sports promote understanding, television. This is three times the num­ tolerance, and appreciation of others. Mr. THURMOND. Mr. President, I ber of people that watched the 1969 A person's appearance, size, skin color, also ask unanimous consent that Sen­ landing on the Moon. It is projected personal beliefs, socio-economic status, ator COVERDELL be added as a cospon­ that approximately 31 billion people and nationality are not indicative of sor. will watch this distinguished tour­ his or her on-the-field talents. You The PRESIDING OFFICER. Without nament, with an estimated 2 billion often see people of very different back­ objection, it is so ordered. people watching the championship grounds working together on the same Mr. THURMOND. I yield the floor. game. team to accomplish a common goal. This year marks only the second Soccer promotes sportsmanship and time in tournament history that the mutual admiration based on the tal­ BILL DEEMED READ THE SECOND United States has advanced to the sec­ ents, skills, and determination of the TIME-S. 2205 ond round of play. The last time the players. The PRESIDING OFFICER. If there United States accomplished this feat The U.S. soccer team represents is no objection, S. 2205 is deemed read was at the inaugural tournament in more than just a soccer team, it rep­ a second time and objection is made to 1930. The current team, led by goal resents America. The players come further proceedings on the bill. scorers Eric Wynalda and Ernie Stew­ from California, Florida, Illinois, New art, has tied Switzerland 1 to 1, de­ Jersey, Missouri, Massachusetts, feated a heavily favored Colombian Michigan, and Ohio. They include such ORDERS FOR TOMORROW team 2 to 1, and narrowly lost to Ro­ colorful players as goalkeeper/captain Tony Meola, defender Alexi Lalas, and Mr. FORD. Mr. President, on behalf mania 1 to 0. By accumulating four of the majority leader, I ask unani­ tournament points, the team qualified midfielder Cobi Jones. They are a di­ verse group of young men who have mous consent that when the Senate for the second round. I would also like completes its business today, it stand to add that 260,488 spectators attended banded together and produced a win­ these 3 games, and millions more fol­ ning team. I would like to commend in recess until 10 a.m., Tuesday, July them for representing the best in 12; that following the prayer, the Jour­ lowed the games by radio and tele­ nal of proceedings be deemed approved vision. America. Mr. President, on July 4, Team We should applaud their efforts-both to date and the time for the two lead­ America played Brazil. Some experts in striving to be the best and in captur­ ers reserved for their use later in the think Brazil is the best soccer team in ing the hearts of Americans. They have day; that immediately thereafter, the the world. The United States soccer exhibited the utmost in sportsmanship Senate resume debate on the motion to team fought valiantly until the 79th and have carried the American spirit proceed to S. 55; that on Tuesday, the minute of play when Brazil's Bebeto forward with honor and dignity. Senate stand in recess from 12:30 p.m. scored the game's only goal. At the end I urge my colleagues to join me in to 2:15 p.m. for the respective party of the hard fought game, the Brazilian commending these fine young athletes, conferences; and that the time from team paid a high honor and tribute to and to support this worthy measure. 2:15 p.m. to 2:30 p.m. be equally divided the American players, fans, tour­ EXHIBIT 1 and controlled between the opponents nament sponsors, and support staff. and proponents of the motion to pro­ The Brazilian players gathered in the U.S. WORLD CUP TEAM ROSTER ceed to S. 55; that as previously or­ dered, at 2:30p.m., without intervening center of the field to celebrate victory Number, name, and position Hometown and carried with them the flag of the action, the Senate vote on the motion I. Tony Meola , Goalkeeper Kearny, NJ. to invoke cloture on the motion to pro­ United States. Although the United 2. Mike Lapper, Defender ...... Huntington Beach, CA. States lost the game, I believe the 3. Mike Burns, Defender ...... Marlboro, MA. ceed to S. 55. 4. Cle Kooiman, Defender ...... Ontario, CA. The PRESIDING OFFICER. Without team and the tournament is a success. 5. Thomas Dooley, Defender ...... Mission Viejo, CA. At this time, I ask unanimous con­ 6. John Harkes, Midfielder Kearny, NJ. objection, it is so ordered. 7. Hugo Perez, Midfielder .. Mission Viejo, CA. sent that a list of the United States 8. Ernie Stewart, Foward .. Point Arena , CA. 1994 World Cup soccer team be printed 9. Tab Ramos, Midfielder . Kearny, NJ. in the RECORD at the conclusion of my 10. Roy Wegerle, Midfielder Tampa, FL. RECESS UNTIL TOMORROW AT 10 II. Eric Wynalda, Midfielder ..... Westlake Viii., CA. A.M. remarks. 12. Juergen Sommer, Goalkeeper ...... --··· ········· Naples, FL. 13. Cobi Jones, Midfielder ...... Westlake Viii., CA. The PRESIDING OFFICER. Without 14. Frank Klopas, Midfielder ..... Chicago, ll. The PRESIDING OFFICER. Under objection, it is so ordered. 15. Joe-Max Moore, Midfielder ..... Irvine, CA. the previous order, the Senate stands 16. Mike Sorber, Midfielder ...... St. Louis, MO. (See exhibit 1.) 17. Marcelo Balboa, Defender ...... Cerritos, CA. in recess. Mr. THURMOND. Mr. President, soc­ 18. Brad Friedel, Goalkeeper ...... Bay Village, OH . Thereupon, the Senate, at 6:54 p.m., 19. Claudio Reyna, Midfielder . Springfield , NJ. cer is played by men and women of all 20. Paul Carligiuri, Defender Diamond Bar, CA. recessed until Tuesday, July 12, 1994, at ages. It is the first truly integrated 21. Fernando Clavijo, Defender ...... San Diego, CA. 10a.m.