Statement of Administration Policy: H.R. 5231 - National Competitiveness Act of 1992

(House Rules)
(Valentine (D) North Carolina and 44 others)

The President's economic growth agenda, contains numerous proposals to promote American competitiveness in world markets. Among the President's proposals are improvements in tax law and comprehensive reforms of the Nation's legal, health care, education, and job training systems. None of the President's proposals are contained in H.R. 5231, but several are contained in the substitute to be offered by Rep. Walker, which is addressed below.

The Secretaries of Commerce and Energy, the Administrator of the Small Business Administration (SBA), the Chairman of the Council of Economic Advisers, and the Director of the Office of Science and Technology Policy will recommend a veto of H.R. 5231 unless Subtitles D and E of Title III are deleted.

These subtitles would establish within the Commerce Department a technology development loan program and a high technology analogue to SBA's Small Business Investment Company (SBIC) Program. These programs would:

—   Be inappropriate for Commerce's Technology Administration, which does not have the financial expertise needed to administer such programs.

—   Duplicate SBA's loan and equity finance programs, which Congress has expanded significantly this year. The SBIC program has a significant high technology component.

—   Possibly preempt State corporate law that would otherwise govern the structure and organization of the proposed critical technology development companies.

SBA will continue to work with the Manufacturing Technology Centers sponsored by Commerce to help ensure that promising high technology firms receive the financing they require.

Other significant objections to H.R. 5231 are described in the Attachment.

Walker Substitute

The Administration strongly supports Title I of the Walker substitute for H.R. 5231. Title I would implement the President's proposal for a checkoff of up to 10 percent of an individual's income tax liability to be used to reduce federal spending and eliminate the national debt.

The Administration supports other provisions in the substitute which would make the Research and Experimentation Tax Credit permanent, extend the National Cooperative Research Act to joint manufacturing ventures, extend copyright protection to certain federally-developed software, it would reduce the tax rate on long term capital gains, and address the problem of excessive litigation.

The Administration will work with Congress to address its concerns with the substitute.

Attachment

Additional Objections to H.R. 5231

The Administration strongly opposes provisions of H.R. 5231 that would:

—   Establish a Council on Technology and Competitiveness within the Executive Office of the President. A Federal interagency group should not develop the central plan for major sectors of the economy that the bill prescribes.

—   Designate a single "lead" agency for enhancing manufacturing capabilities. This could complicate the interagency cooperation that now exists in Federal programs for manufacturing and other technologies.

—   Authorize appropriations levels that are excessive and highly unlikely to be funded.

—   Alter the initial intent of the Manufacturing Technology Centers program by allowing continued direct support of the centers beyond 6 years.

—   Establish an unnecessary and undesirable set-aside for consortia within the Advanced Technology Program.

—   Micromanage the National Technical Information Service by pressuring it to enter into a long term lease with organizations that may not meet its long-term needs in the most effective way.

—   Extend the Baldrige Award by statute to educational institutions prior to the completion of relevant studies and discussions with the educational community.

—   Raise constitutional concerns by requiring: (l) a report on U.S. positions in certain international negotiations; (2) legislative recommendations from Executive officers; and (3) submission to Congress by the Secretary of Commerce or her subordinates of plans to implement portions of the bill.

—   Express the sense of the Congress that the programs authorized in the bill should be funded through reductions in defense spending. This would violate the 1990 budget agreement.