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National Defense Authorization Act for Fiscal Year 2005

Location: Washington DC


Mr. DAYTON. Mr. President, I thank the distinguished chairman of the committee and others for setting aside their amendments, and I call up amendment No. 3197.

The PRESIDING OFFICER. The clerk will report.

The assistant legislative clerk read as follows:

The Senator from Minnesota [Mr. DAYTON], for himself and Mr. Feingold, proposes an amendment numbered 3197.

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

The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
(Purpose: To strike sections 842 and 843)
Beginning on page 172, strike line 11 and all that follows through page 176, line 21.

Mr. DAYTON. Mr. President, my amendment strikes two sections of the bill, sections 842 and 843, which relate to "Buy America" and the Berry amendment, which are features that have been in existing law for quite a number of years to strengthen our national defense and our national economy.

This bill authorizes $422 billion for national defense programs for fiscal year 2005, a sum that doesn't even include the funding for ongoing operations in Iraq and Afghanistan. If you include those additional amounts, our national defense spending for the next fiscal year will be almost $500 billion.

Mr. WARNER. Mr. President, will the Senator yield for the purpose of allowing me to put a second-degree amendment at the desk so our colleagues can then begin to examine both as this very important debate is underway?

Mr. DAYTON. I yield to the chairman.

Mr. WARNER. Mr. President, I send to the desk, on behalf of Senator McCain, an amendment in the second degree.

The PRESIDING OFFICER. The clerk will report.

The assistant legislative clerk read as follows:

The Senator from Virginia [Mr. WARNER], for Mr. McCain, for himself and Mr. Warner, proposes an amendment numbered 3461 to amendment No. 3197.

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

The PRESIDING OFFICER. Without objection, it is so ordered.

The amendment is as follows:

(Purpose: To perfect the matter proposed to be stricken)

In lieu of the matter proposed to be stricken, insert the following:


(a) AUTHORITY.-Subchapter V of chapter 148 of title 10, United States Code, is amended by adding at the end the following new section:

"A? 2539c. Waiver of domestic source or content requirements

"(a) AUTHORITY.-Except as provided in subsection (f), the Secretary of Defense may waive the application of any domestic source requirement or domestic content requirement referred to in subsection (b) and thereby authorize the procurement of items that are grown, reprocessed, reused, produced, or manufactured-
"(1) in a foreign country that has a Declaration of Principles with the United States;

"(2) in a foreign country that has a Declaration of Principles with the United States substantially from components and materials grown, reprocessed, reused, produced, or manufactured in the United States or any foreign country that has a Declaration of Principles with the United States; or

"(3) in the United States substantially from components and materials grown, reprocessed, reused, produced, or manufactured in the United States or any foreign country that has a Declaration of Principles with the United States.
"(b) COVERED REQUIREMENTS.-For purposes of this section:
"(1) A domestic source requirement is any requirement under law that the Department of Defense satisfy its requirements for an item by procuring an item that is grown, reprocessed, reused, produced, or manufactured in the United States or by a manufacturer that is a part of the national technology and industrial base (as defined in section 2500(1) of this title).

"(2) A domestic content requirement is any requirement under law that the Department of Defense satisfy its requirements for an item by procuring an item produced or manufactured partly or wholly from components and materials grown, reprocessed, reused, produced, or manufactured in the United States.
"© APPLICABILITY.-The authority of the Secretary to waive the application of a domestic source or content requirements under subsection (a) applies to the procurement of items for which the Secretary of Defense determines that-
"(1) application of the requirement would impede the reciprocal procurement of defense items under a Declaration of Principles with the United States; and

"(2) such country does not discriminate against defense items produced in the United States to a greater degree than the United States discriminates against defense items produced in that country.

"(d) LIMITATION ON DELEGATION.-The authority of the Secretary to waive the application of domestic source or content requirements under subsection (a) may not be delegated to any officer or employee other than the Under Secretary of Defense for Acquisition, Technology and Logistics.

"(e) CONSULTATIONS.-The Secretary may grant a waiver of the application of a domestic source or content requirement under subsection (a) only after consultation with the United States Trade Representative, the Secretary of Commerce, and the Secretary of State.

"(f) LAWS NOT WAIVABLE.-The Secretary of Defense may not exercise the authority under subsection (a) to waive any domestic source or content requirement contained in any of the following laws:

"(1) The Small Business Act (15 U.S.C. 631 et seq.).

"(2) The Javits-Wagner-O'Day Act (41 U.S.C. 46 et seq.).

"(3) Sections 7309 and 7310 of this title.

"(4) Section 2533a of this title.

"(g) RELATIONSHIP TO OTHER WAIVER AUTHORITY.-The authority under subsection (a) to waive a domestic source requirement or domestic content requirement is in addition to any other authority to waive such requirement.

"(h) CONSTRUCTION WITH RESPECT TO LATER ENACTED LAWS.-This section may not be construed as being inapplicable to a domestic source requirement or domestic content requirement that is set forth in a law enacted after the enactment of this section solely on the basis of the later enactment.

"(i) DECLARATION OF PRINCIPLES.-(1) In this section, the term 'Declaration of Principles' means a written understanding (including any Statement of Principles) between the Department of Defense and its counterpart in a foreign country signifying a cooperative relationship between the Department and its counterpart to standardize or make interoperable defense equipment used by the armed forces and the armed forces of the foreign country across a broad spectrum of defense activities, including-

"(A) harmonization of military requirements and acquisition processes;

"(B) security of supply;

"© export procedures;

"(D) security of information;

"(E) ownership and corporate governance;

"(F) research and development;

"(G) flow of technical information; and

"(H) defense trade.

"(2) A Declaration of Principles is underpinned by a memorandum of understanding or other agreement providing for the reciprocal procurement of defense items between the United States and the foreign country concerned without unfair discrimination in accordance with section 2531 of this title.".
(b) CLERICAL AMENDMENT.-The table of sections at the beginning of such subchapter is amended by inserting after the item relating to section 2539b the following new item:
"2539c. Waiver of domestic source or content requirements.".

No provision of this Act or any amendment made by this Act shall apply to a procurement by or for the Department of Defense to the extent that the Secretary of Defense, in consultation with the Secretary of Commerce, the United States Trade Representative, and the Secretary of State, determines that it is inconsistent with United States obligations under a trade agreement.

Mr. WARNER. I thank my colleague for his courtesy. We now undertake a very important debate on this subject.

The PRESIDING OFFICER. The Senator from Minnesota.

Mr. DAYTON. Mr. President, we are going to spend, in the next fiscal year, some $500 billion. That is a half trillion dollars, a huge amount of the taxpayers' money; in fact, about one-fourth of all the money the Federal Government will spend for everything next year, including Social Security, Medicare, health care, and education.

The purpose of these expenditures is to strengthen our national security for now and the future. The six priorities that were approved by the Senate Armed Services Committee, of which I am proudly a member, along with the Presiding Officer and others, reported in the bill before us unanimously by the committee, include such measures as combating terrorism and winning the global war against terrorism, supporting our military operations in Iraq and Afghanistan, to sustaining the readiness of our Armed Forces to conduct the full range of military operations against all current and anticipated threats.

It goes on to state: Another object is modernizing and transforming our Armed Forces to successfully counter future threats. So we need to spend this money on the immediate needs and missions of our military and support the phenomenal job they have been doing on our behalf around the globe, but we also need to try to anticipate the future. That is difficult, but it is also important. It requires us to look at the big picture, at the global picture, and into the years and even, if possible, the decades that lie ahead. It means we don't want to do something now that is expedient or briefly beneficial that will have negative consequences for us in the future.

Ideally, we want policies that strengthen our country now and in the future. That has been the compelling reason for the so-called "Buy American" requirements of the Department of Defense, the military branches, and all other Federal agencies for the past 70 years.

"Buy America" came out of the depths of the Great Depression. Buy America to strengthen America is really what it should be called. Buy America to strengthen America-that was the reason, the purpose, and it has been the result for seven decades. However, the law has always provided for exceptions, exceptions that essentially give, as they should, the full authority to the Secretary of Defense to waive domestic purchase requirements whenever necessary to provide our Armed Forces with equipment, weapons, clothing, food, or anything else that is not available in the United States, that could not be produced or provided in this country when it is needed, that lacks the quality or features or advantages, or that is not priced competitively with non-U.S.-made products.

So the law has essentially said: Try to buy American, but if you can't or you shouldn't, then don't. It has worked for almost 70 years, through 11 different administrations-six Democratic, five Republican-until last year this administration and this Senate shredded that bill. That shredding was reduced to a few slices by the strong opposition of the House conferees, led by the House Armed Services Committee chairman.

We in this body are exceedingly fortunate to have the chairman of the Senate Armed Services, who is unparalleled as a leader and public servant. Last July, I traveled to Iraq with the distinguished chairman of the Armed Services Committee, the senior Senator from Virginia, Mr. Warner. We went through the country with 115-degree temperatures. I struggled to keep up with him as he charged fearlessly into every perilous situation. He is in every respect-leading that committee, here on the floor, or out in the field around the world-one of the most outstanding leaders and pubic servants I have ever met anywhere in my walk of life.

I also greatly admire my colleague and friend, the senior Senator from Arizona, Mr. McCain, whose military experience and expertise and whose devotion to his country and his service to it are all remarkable.

However, on that occasion last year regarding "Buy America," I thanked our Founding Fathers for the wisdom of bicameralism. And I must respectfully but strongly again disagree this year with the Senate bill's provisions that would effectively destroy "Buy America" by its exceptions to it.

If we pass the legislation that is before us now with the language in it, the second degree to my amendment that has been put down today, we might as well eliminate the entire "Buy America" statute as it applies to the Department of Defense and the armed services and others that are funded by this bill because that will be the result if this current Senate language if we pass it.

I challenge those in the Bush administration and those in the Senate and those lobbying for the big multinational corporations and for the foreign governments they represent, who truly believe that we will be better off without any "Buy America" requirements, or certainly, in the case of the paid lobbyists, who know that they and their clients will be better off without them, and those who believe that for whatever reason, they should just say so and put the repeal before us in black and white and have us vote on that rather than just creating more exceptions and more loopholes that give more foreign countries and the corporations that operate in them more and more of the money from this bill in the products that they buy and the jobs for which they pay, because under this language that exists in the bill now, those tax dollars, those products, those jobs will go to people in other countries but not to Americans.

There will be no more "Buy America" to strengthen America. It will be buy abroad, because of what? Because it is cheaper? Because it is better? Because it doesn't matter?

Let's have that debate in the Senate. Is it cheaper to buy overseas? After counting all the costs of not only the product prices but also the wages that are gained or lost, the taxes paid by those wage earners in this country or somewhere else, the unemployment costs in this country, the welfare cost, the food stamp cost, not to mention the human cost of people who lose their jobs, is it better to buy these products overseas? Better for whom? Who gains, who loses, when American dollars are spent abroad to buy foreign goods made by foreign workers instead of American goods made by American workers? Does it matter? Evidently not to this President or to this Pentagon leadership. But it sure matters to the American people, who will lose their jobs or won't get new jobs or better jobs. Do they have a say in where their tax dollars are spent? Does it matter to this Senate that there are now 2A? million fewer manufacturing jobs in this country than there were when President Bush took office? Yes, 2A? million manufacturing jobs have been lost in this country in the last 3A? years, despite the so-called recovery and recent job gains in some other sectors of our economy. There are still 2A? million less manufacturing jobs today than there were in January 2001.

Many of those American jobs have been sent overseas and were replaced in other countries by low-wage jobs. Importing all those foreign-manufactured products has now produced a U.S. trade deficit that last month was $48.2 billion. That is another all-time worst trade deficit-$48.2 billion for a single month, and it will probably be broken again next month or soon thereafter. Over the next year, if that continues, it will produce an annual trade deficit of $578 billion-almost $100 billion more than last year's record trade deficit.

We are told we cannot do anything about this massive bleeding of jobs and wages, capital investments, profits, and tax payments out of our country. We are told we should not even try; it is free trade, globalization, and it is good for America. Is 2.5 million lost manufacturing jobs good for America? Over $100 billion in lost wages and benefits every year is good for America? Over $30 billion of lost tax revenues each year for Federal, State, local governments, and school districts is good for America? Our Federal budget deficits, our State and local government deficits, U.S. trade deficit, national debt increasing, all of which are going higher and higher-is that all good for America? Jobs and wages, production of goods and services, capital investment by businesses, allowing people-as consumers buy goods and services, producing tax revenues, individual and corporate, they are the lifeblood of any economy. They are its vitality. Corporate profits, stock prices, dividends, and capital gains are all vitally important as well, but they are not enough.

This country's economic vitality is bleeding away. Our economic strength is weakening. Our economic strength is essential to our military strength. Our economic security is essential to our national security. This legislation, this authorization to spend $500 billion on our national security, had better strengthen, not weaken, our economic security as well.

I am aware of the letter to the chairman from a group calling itself the National Defense Industrial Association. It claims to represent over 1,300 member companies and purports to be the "voice of the industrial base." Who are these companies? Whose industrial base are they speaking for? Many are companies that have moved their production overseas, that are making better profits from paying low wages to foreigners instead of good wages to Americans. We cannot stop them from doing so. But why should we reward them with American tax dollars going to support their foreign production? They can certainly continue that foreign production, and they will. But if they want these U.S. military contracts, they should fill them with American workers, not with foreigners.

They should make those products or provide those services in American communities, not foreign cities. They should pay taxes from those profits to our school districts and local governments, not someone else's. These are American tax dollars that are paying for our national defense, not from their corporate profits from foreign operations-profits on which they will pay taxes to foreign governments, not our own.

Someone has to look out for the best interests of this country, and it sure is not the National Defense Industrial Association. Maybe that is not their responsibility. But the best interests of this country are our responsibility here in the Senate. So they should not tell us or try to make us or the American people believe their interests are America's interests. In their letter, they claim it would negatively impact the ability of the U.S. industrial base to compete in the international marketplace and would therefore negatively impact the Warfighter, and the bill's amendment gutting "Buy American" will represent important steps in the Department of Defense's transformation plans and send positive signs to our allies that the United States is supportive of existing trade agreements. I am deeply offended that American companies, most of which are headed by American citizens, would try to hide their financial self-interests behind pretenses like these. They want defense contracts they can fulfill with their existing foreign operations that provide them with greater profits. They don't want to have to shift that production back to the U.S. and employ fellow American citizens. They want only what is good for themselves, not what is best for America's military strength or our Nation's economic vitality.

In some cases, as the letter discloses, they coddle foreign governments that want to buy American military hardware and then want us to buy the same amount of their foreign-made military products from their countries. We signed, evidently-somebody in the Department of Defense signed these agreements. There are countries where our trade deficits last year totalled over $120 billion for all goods and services. But in this one sector of military goods and services, where we run a trade surplus, we agree to give up our surplus by buying more foreign products, some of which, of course, are made in those countries by-surprise-some of the companies in the National Defense Industrial Association. Those companies win both ways, but the rest of America loses.

These memoranda of understanding are not free trade; they are certainly not fair trade. They are dumb trade. It is amazing to me that somebody would sign them. It is like something out of the movie "Dumb and Dumber," where I give you $20. You are going to give me $10 back, but you say, wait a minute, I am losing my $10. You have a responsibility to make up for my $10 with your $10. So we do that. We agree to that in this memorandum. We are going to match their $10 with ours and even up that part of the deal and leave the $20 that goes to them-leave it out and let it go. That is dumb trade.

We spend more on our defense products, goods, and services than the next 10 countries in the world combined. They need our markets; we don't need theirs. They are cutting back on their military production, so they want these agreements to prop up their industries and provide jobs for their workers at our expense. They are smart enough to look for it, and we are dumb enough to give it to them. It is also dangerous trade. This month's Jane's Intelligence Review, a widely regarded international publication, reports that "Europe Considers Ending Chinese Arms Embargo." The Chinese premier was in some European Union countries last month and he concluded, saying, "I have great confidence that there will be a solution to this problem."

I ask unanimous consent that this article be printed in the RECORD following my remarks.
The PRESIDING OFFICER. Without objection, it is so ordered.
(See exhibit 1.)
Mr. DAYTON. It reads:

On the European side, the attractions of tapping China's defense market are significant: China is the world's largest importer of defense equipment ($3.6 billion worth in 2002), and . . . France and Germany in particular are pushing to lift the arms embargo; France because the government is under pressure from its defense industry to resume arms sales; and Germany because it wants to maintain its currently good and close relationship with Beijing.

Opponents to lifting the ban include, most vociferously, the USA. . . .
Richard Fisher, from the Jamestown Foundation, told [Janes Intelligence Review]: "The real impact of a deep and wide EU-PLA [People's Liberation Army]-

The army of China, the People's Republic of China-

military alliance will fall on the USA, in terms of accelerating a military-technical arms race that will burden U.S. taxpayers and place ever greater pressure on the U.S. political/military alliance system in Asia."

Who are these countries protecting or helping in this language I want to strike out of this bill that have these offsetting reciprocal agreements with the United States? They include Belgium, Denmark, Germany, Netherlands, Portugal, Spain, Switzerland-all European Union countries. Others that are also exempt by other features include France, Italy, and Luxembourg-all European Union countries.

We are going to contribute to their building up their defense industries, and then they are going to turn around, most likely, soon and sell those products, that technology, those military advantages to a country in opposition to our foreign policy and against our own military interests, against our own national security interests.

That is just one example of how this kind of expediency and also the corporate pressures that drive some of it are a danger to our national security and to our future economic strength.

In conclusion, for the last 70 years, "Buy America" has worked for America, and it has helped Americans work in America to build a strong national defense, to build a strong national economy, and to build a strong American industrial base until this administration arrived. The Bush administration believes evidently we can have a strong national defense and a strong national economy without a strong American industrial base, without Americans making American products in American communities. They are so indifferent to that need that at a time when the United States has lost over 2.5 million manufacturing jobs held by 2.5 million American workers in the last 3A? years, they support this bill and its language to send more American taxpayers' dollars to pay for foreign products made by foreign workers.

Maybe those who do not care about other Americans' jobs should offer to give up their own job. Practice what they preach and find out for themselves what unemployment is really like. But it is our responsibility, exercising our collective wisdom, to act in the best interests of the United States of America.

I know my colleagues share that desire. We may have our honest differences and disagreements, but I beseech my colleagues in this instance to review this measure and this language and consider the consequences of it for our military strength, for our economic strength, as well as for the jobs of Americans and the quality of products and the security of products provided to the men and women serving courageously around the globe.

I yield the floor.

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