Date: 1982-08-18
Speaker: ST GERMAIN (democrat)
Chamber: H

Mr. Chairman. today the House is scheduled to consider. among other legislative matters. passage of H.R. 5540. a bill offering a series of amendments to the Defense Production Act of 1950 specifically aimed at upgrading the national defense industrial base. Throughout earlier Banking Committee consideration of these amendments. the question uppermost in our minds has been: If the United States has to expand its productive capacities rapidly in order to accelerate national defense buildup. can our industrial system deliver for usin quantity. in quality. and most important. in time. Considerable time and effort was devoted by your committee to seeking answers to these questions. Our findings are contained in the report accompanying this measure. but can be summed up in a very few words: Our safety net of defenserelated production is old. somewhat threadbare. and definitely in need of rehabilitation. We face very serious prospective shortages of skilled manpower in certain key sectors of our economy. and unless we begin now to refurbish this segment of our population. we could end up in the very embarrassing position of having mountains of new equipment. but lacking properly trained and skilled manpower for its operation. I Instead of stockpiling certain very critical. minerals and materials. we have been selling them off to the point that any disruption of their supply (much of which comes from not necessarily friendly regions of the world) could bring Americas industrial effort dangerously close to a shutdown situation. Mr. Chairman. I would call attention to the fact that your committee was required to file a supplemental report on this legislation because important administration comment on the legislations essential purposes was not revealed until after the committees formal report had been made and was adopted. By memorandum dated March 6. Deputy Secretary of DOD Frank Carlucci directed the DOD. the Chief of the Joint Chiefs of Staff. the Service Departments of the Army. Navy. and Air Force and other DOD personnel to work with the Congress on the matter of providing a realistic statutory basis for the revitalization of the Nations defense industrial base. That is what H.R. 5540 Is intended to do and that is what it can do. if enacted. By the same token. Mr. Chairman. I must also note for you and my fellow Members. that Mr. Carlucci repudiates his March 6 stance. by unsolicited letter to me. under date of July 20. in which he felt compelled to restate the administrations opposition to this legislation. due to projected budgetary effects. It is in this special regard that I want to commend my colleague from Michigan. Jim BLANCHARD. and the ranking minority member of his Subcommittee on Economic Stabilization. Svu McKINNEY. for acting in a positive and courageous manner in preparing this legislation for House consideration today. The legislation proposes a $5 billion Investment program in Americas industrial future. Here. the key word is investment. for the historical record of the use of the Defense Production Act for such purposes is replete with example. but. and I stress this point very clearly. the return on investment has been one of its most exciting rewards. In the context of past experience. the niultiplier effect has been extraordinary. and in this instance we are debating today. the anticipated return on investment conceivably can be 91. That means that for every $1 invested. America stands to receive a return of $9. Beyond this most immediate benefit. the amounts to be allocated to manpower training ($250 million per year) and to our universities and colleges for modernization and upgrading of training equipment and material ($100 million). can hardly be dismissed as nonbeneficial in effect. The truth of the matter iswe are. quite literally. "eating up our seed corn" through the recruitment of faculty and staff from our universities by industry. This has left many of our higher learning institutions in a precarious state not of their making. By providing for access to more modern equipment and for better campusbased working conditions. we hope to persuade many of those talented people to remain in their university positionsthus to halt their unfortunate migration from campus to corporate research and development. The DPA. as we refer to it. has been used from time to time to attack all manner of national problems. More recently. it was used to get the Alaska pipeline underwaycutting at least 1 year from the pipelines schedule at a saving of hundreds of millions of dollars to the American taxpayer. These new amendments would empower the President to get the modernization of our defense industrial base underway. mainly through the offering of financial incentives to industry. but with the target of the more than 50.000 defenserelated contractors and suppliersby and large. small- and mediumsized businesses. uppermost in mind. Mr. Chairman. the Reagan recession. which is now in its 13thmonth. gives every sign of being one of the most serious and most dangerous in postwar history. Unemployment has exceeded the 40year record of 9 percent and there are few who doubt that it will not go even higher. In excess of 30 percent of our industrial capacity stands idle. You can almost hear the grass grow in unused factory parking lots. Our autoour housingour savings and loan industries are on their knees. if not on their backs. The empty pockets of millions of our people. turned inside out. have become a new nation al flag and sign of distress. Farm income is the lowest it has been since the Great Depression of the 1930s. and bankruptcies continue to set new records on monthtomonth basis. The DPA amendments offered today through H.R. 5540 cannot halt this de. cline completely. but if adopted. they could effectively begin its reversal. for in truth. Mr. Speaker. the United States cannot regain its status as a firstrate industrial power with a secondrate industrial base. nor can it be expected to accomplish any meaningful degree of economic recovery without the long postponed modernization of that base. For these reasons alone. the probable effect of the legislation now before the House cannot be overlooked. The current status of Americas industrial base is a matter of national debate and national doubt. Its revitalization. however. is absolutely impera tive if the process of general revival for the Nation is to occur. I urge my fellow Members to support the purposes of this legislation and send a message to those who would doubt our determination. or question our ability. to again perform as a major industrial power.