National Defense Authorization Act for Fiscal Year 2006 - Resumed
NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2006--Resumed -- (Senate - July 21, 2005)
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Ms. COLLINS. Mr. President, I rise today in strong support of the National Defense Authorization Act of 2006. This legislation authorizes critical programs for our soldiers, sailors, airmen, and marines serving our country around the world--programs such as those that provide vital protective gear, military pay raises, and increased bonuses and benefits, and the advanced weapons systems on which our troops rely.
Let me thank and recognize the extraordinary efforts of our chairman of the committee and the ranking member for putting together an excellent bill. I commend Senator Warner and Senator Levin also for their strong commitment to our Armed Forces, to making sure that our military's needs are met.
This legislation authorizes $9.1 billion for essential shipbuilding priorities, and it includes a provision to prohibit the use of funds by the Navy to conduct a ``one shipyard winner-take-all'' acquisition strategy to procure the next generation of destroyers, the DD(X). Not only does this legislation fully fund the President's request for the DD(X) program, but it also provides an additional $50 million for advanced procurement of the second ship in the DD(X) class at General Dynamic's Bath Iron Works in my home State of Maine. I am, understandably, very proud of the fine work and the many contributions of the skilled shipbuilders at Bath Iron Works to our Nation's defense.
The high priorities placed on shipbuilding in the Senate version of the Defense authorization bill stand in stark contrast to the House version of the Defense authorization. The House bill, unwisely and regrettably, slashes funding for the DD(X) program, in contrast to the President's budget. Moreover, it actually rescinds funding for the DD(X) that was provided last year.
Just this week, in testimony before a House Armed Services Subcommittee, the Chief of Naval Operations testified that the Navy must have the next generation destroyer, the DD(X). Admiral Clark, in what is undoubtedly one of his final, if not the final, appearances as Chief of Naval Operations before his retirement, stated before the subcommittee:
For the record, I am unequivocally in full support of the DD(X) program. ..... The failure to build a next-generation capability comes at the peril of the sons and daughters of America's future Navy.
In response to the House addition of $2.5 billion to the shipbuilding budget to buy two additional DDG Arleigh Burke-class destroyers in fiscal year 2006, the CNO clearly stated, ``I have enough DDGs.'' It is essential that we proceed with the DD(X) destroyer program.
The DD(X) will have high-tech capabilities that do not currently exist on the Navy's surface combatant ships. These capabilities include far greater offensive and precise firepower; advanced stealth technologies, numerous engineering and technological innovations that allow for a reduced crew size; and sophisticated, advanced weapons systems, such as a new electromagnetic rail gun.
Unfortunately, instability and dramatic changes have held back the progress on the DD(X) program. Initially, the Pentagon planned to build 12 DD(X)s over 7 years. To meet budget constraints, the Department slashed funding and now
proposes to build only five DD(X)s over 7 years, even though the Chief of Naval Operations has repeatedly stated on the record before the Armed Services Committee, in both Chambers, that the warfighting requirements remain unchanged and dictate the need for the greater number--12 DD(X)s.
We have heard a lot about the cost growth in the DD(X) program and, indeed, the increase in the anticipated cost of constructing these vital destroyers is troubling to us all. But, ironically, one of the primary drivers of cost growth in shipbuilding is instability. This lack of predictability in shipbuilding funding only increases the cost to our Nation's shipbuilders because they cannot effectively and efficiently plan their workload. And, of course, ultimately, it increases the cost to the American taxpayer.
The Congress and the administration should be trying to minimize shipbuilding costs by ensuring a predictable, steadier, year-to-year level of funding. Regrettably, that has not been done.
Mr. President, the key to controlling the price of ships is to minimize fluctuations in the shipbuilding account. It is crucial that we not only have the most capable fleet but also a sufficient number of ships--and I add, shipbuilders--to meet our national security requirements. Avoiding budget spikes affords more than ships; it provides stability in Naval ship procurement planning and offers a steady workload at our shipyards.
When budget requests change so dramatically from year to year, even when the military requirement stays the same, shipbuilders cannot plan effectively, and the cost of individual ships is driven upward. The national security of our country is best served by a competitive shipbuilding industrial base, and this legislation before us today fully supports our Nation's highly skilled shipbuilding employees.
This important legislation also provides much-needed funds for other national priorities. It includes an important provision that builds upon my work and the work of other committee members last year and this year to authorize an increase in the death gratuity payable to the survivors of our military who have paid the ultimate price. It also authorizes an increase in the Service members' Group Life Insurance benefit. Surely, that is the least we can do for our brave service men and women.
This bill also improves care of our military by recommending a provision that would strengthen and extend health care coverage under TRICARE Prime for the children of an Active-Duty service member who dies while on active duty.
This authorization bill is good for our Navy, good for our men and women in uniform who are serving our country all around the world, and I am pleased to offer my full support.
I yield the floor.
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Ms. COLLINS. Mr. President, I rise to offer a second-degree amendment to the amendment offered by the distinguished Senator from New Jersey, Mr. Lautenberg. While I take a slightly different approach than my colleague from New Jersey, I wish to be clear that my intent is very similar to his; that is, to close loopholes in current U.S. law that allow U.S. firms to do business in terrorist nations or nations that are known to sponsor terrorism and are under U.S. sanctions.
Denying business investment to states that finance or otherwise support terrorist activities, such as Syria, Iran, or Sudan, is critical to the war on terrorism. The United States has had sanctions in place on the Iranian Government for a long time and for good reasons. These sanctions prohibit U.S. citizens and U.S. corporations from doing business in Iran, a nation known as a state sponsor of terrorism. I fully support the use of these sanctions to deny terrorist states funding and investment from American companies.
Currently, U.S. sanctions provisions in the International Emergency Economic Powers Act prohibit U.S. companies from conducting business with nations that are listed on the terrorist sponsor list. The law does not specifically bar foreign subsidiaries of American companies from doing business with terrorist-supporting nations, as long as these subsidiaries are considered truly independent of the parent company.
There have, however, been reports that some U.S. companies have exploited this exception in the law by creating foreign subsidiaries of U.S. companies in order to do business with such nations. The allegations are that these foreign subsidiaries are formed and incorporated overseas for the specific purpose of bypassing U.S. sanctions laws that prohibit American corporations from doing business with terrorist-sponsoring nations such as Syria and Iran. There is no doubt that this practice cannot be allowed to continue.
I supported Senator Lautenberg's amendment last year because it was the only proposal before us to deal with this very real problem. The Senator from New Jersey has been very eloquent in speaking about this exploitation of the exceptions in the current sanctions laws. The examples that we have heard, where American firms simply create new shell corporations to execute transactions that they themselves are prohibited from engaging in, are truly outrageous. Clearly, the law does need to be tightened. But we need to be careful about how we go about addressing this problem. I have long felt that while the Senator from New Jersey is correct in his intentions, the specific language of his amendment needs improvement.
We have worked very closely--my staff and I--during the past 6 months, with the administration to draft a proposal that closes the loophole without overreaching. We must draft this measure in a manner that gets at these egregious cases that are so outrageous without overstepping the traditional legal notions of jurisdiction. Otherwise, we may find ourselves harming the war on terror rather than helping.
Some truly independent foreign subsidiaries are incorporated under the laws of the country in which they do business and are subject to that country's laws, to that legal jurisdiction. There is a great deal of difference between a corporation set up in a day, without any real employees or assets, and one that has been in existence for many years and that gets purchased, in part, by a U.S. firm. That foreign company may even be an American firm with a controlling interest in that foreign company, but under the law, it is still considered to be a foreign corporation.
Senator Lautenberg's proposal requires foreign subsidiaries and their parents to obey both U.S. and applicable foreign law at the same time, even if they are in conflict. Not only does this complicate our relations with other countries, it also puts U.S. subsidiaries of foreign parent companies in danger of being subjected to other nations' laws in retaliation. It also raises all sorts of questions when there are conflicts in the two sets of laws. At a time when we are seeking the maximum active foreign cooperation possible in the global war against terrorism, exerting U.S. law over all foreign companies owned or controlled by U.S. firms and their foreign operations seems to be an imprudent and excessive move. The administration agrees.
Rather than simply declaring many foreign entities subject to U.S. law regardless of their particular situation, my amendment would take four strong steps to improve U.S. sanctions laws--specifically, the International Emergency Economic Powers Act--without raising the concerns that come forth if we take the approach recommended by Senator Lautenberg.
First, my amendment would prohibit any action by a U.S. firm that would avoid or evade U.S. sanctions. This would clearly prohibit the creation of a new shell company for the purposes of evading U.S. sanctions, a situation that has
occurred and that we need to prevent.
Second, my amendment would prohibit American firms from ``approving, facilitating or financing'' actions that would violate U.S. sanctions laws if undertaken by a U.S. firm. This would prohibit any involvement by a U.S. parent firm with an existing subsidiary that was engaged in a transaction that violated the International Emergency Economic Powers Act. In order to comply with the law, the U.S. parent firm would need to be totally passive in any transaction. But if the American firm is, in fact, approving the actions of that foreign subsidiary that is doing business in a prohibited country or facilitating it in any way--that is a pretty broad word--or financing those prohibited actions, that would be a violation of our law.
Third, my amendment would increase the maximum penalties per violation under the act from $10,000 to $250,000 for a civil violation and from $50,000 to $500,000. For companies who think that the risk of getting caught is worth it, they will need to think again because now the penalties are sufficient that they have real bite.
Finally, our amendment would provide explicit subpoena authority to obtain records related to transactions covered by the act. Right now, there has been a difficulty in enforcing the sanctions in terms of getting the information that is needed. This would provide subpoena power.
Specifically, by increasing penalties and providing for explicit subpoena authority, I believe my amendment results in a much stronger sanctions regime but without invoking many of the concerns that have been voiced with regard to Senator Lautenberg's amendment.
Again, I want to make clear that I think the goals of the Senator from New Jersey and myself are very similar. The question is how to craft a solution that addresses the problem without overreaching and without causing the possibility of a foreign country retaliating against the American subsidiaries of that country's firm.
I believe that my amendment is the right approach to this critical problem. It will make clear that U.S. corporations cannot circumvent U.S. law. They cannot set up phony shell corporations for the purpose of evading the law. They can't direct a foreign subsidiary to do what they are prohibited from doing under our laws. It will also greatly strengthen and improve the enforcement of the law through the increase in penalties and by vesting subpoena power. At the same time, my approach is carefully crafted to avoid unintended consequences that will harm our relations with our international allies.
I encourage my colleagues to support this balanced approach.
I ask for the yeas and nays on the Collins amendment.
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