Difference under ( - )/
1962 96,803,292,1 15
1979 388,31 1,676,432
Source: House Committee on Appropriations.
11,521,432,604,188 - 188,769,229,364
REGULAR ANNUAL, SUPPLEMENTAL, AND DEFICIENCY APPROPRIATION ACTS COMPARISON OF
BUDGET REQUESTS AND ENACTED APPROPRIATIONS
Administration requested Enacted appropriations Diflerence under(-)/over
1977 364,867,240,174 354,025,780,783 -10,841,459,391
1978 348,506,124,701 337,859,466,730 - 10,646,657,971
1979 388,311,676,432 379,244,865,439 -9,066,810,993
REGULAR ANNUAL. SUPPLEMENTAL, AND DEFICIENCY APPROPRIATION ACTS COMPARISON OF
BUDGET REQUESTS AND ENACTED APPROPRIATIONS— Continued
Administration requested Enacted appropriations Oiflerence under( - )/over
1980 446,690,302.845 441.290.587,343 -5,399.715,502
Total 1,548.375,344,152 1,512,420,700,295 -35,954.643.857
1981 541,827,827,909 544,457,423,541 2,629,595.632
1982 507,740,133,484 514,832,375,371 7,092,241,887
1983 542,956,052,209 551,620.505.328 8.664,453,119
1984 576,343,258.980 559,151,835,986 -17,191,422,994
1985 588.698.503,939 583.446,885,087 -5,251,618,852
1986 590,345,199,494 577,279.102.494 -13,066,097,000
1987 618,268.048.956 614,526,518.150 -3.741,530,806
1988 621,250,663,756 625,967,372,769 4,716.709,013
Total 4,587,429,688.727 4,571,282,018,726 -16,147,670,001
Mr. BYRD. Mr. President, I am not needlessly taking up the
time of the Senate. It is my understanding that efforts are being
made to work out an agreement on the pending bill, and it is hoped
that such agreement might be reached shortly.
So I am trying to accommodate the leadership in that respect. At
the same time, I am trying to accommodate Senators, now and in
the future by having separate speeches in the Record which I hope
will be of assistance to those Senators who might read those
speeches in the years to come when I am no longer here. Somebody
else can defend the Congress and its powers.
I ask unanimous consent now that each of the speeches I have
made appear separately, in separate places in the debate.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. LIEBERMAN. Mr. President, I rise in support of S. 479, the
National Cooperative Research Act Extension of 1991. This bill
takes the important step forward of extending to benefits of the
National Cooperative Research Act of 1984 to manufacturing and
production joint ventures. It will make it easier for American com-
panies to make the leap from the laboratory — where we have led
the world — ^to the marketplace, where new product introduction has
too often lagged. For these reasons, I had included a very similar
title in S. 940, my economic growth bill.
The 1984 National Cooperative Research Act clarified that a re-
search and development joint venture would not be per se illegal
under the antitrust laws, but would be tested under the rule of rea-
son. This was not a novel standard. The rule of reason simply
means that a court must look to see whether the challenged con-
duct is an unreasonable restraint of trade. It is the standard used
to judge virtually all conduct that has legitimate, procompetitive
justifications. The 1984 act also declared that research and devel-
opment joint ventures that properly disclosed their existence to the
Attorney General and the Federal Trade Commission could only be
liable for actual, rather than treble, damages for antitrust claims
resulting from such ventures.
This bill extends these protections to production joint ventures.
It makes clear that courts should apply the rule of reason standard
to production joint ventures, and allows those joint ventures to
take advantage of the same protections against treble damages.
What this bill does not do is undermine the antitrust laws. This
bill does not create any antitrust immunity for joint venturers. The
rule of reason remains the basic antitrust standard. The bill merely
prevents a court from erroneously declaring a joint venture to be
a per se violation. A year and a half ago, Senators Danforth, Jef-
fords, BiNGAMAN, Bryan and I, all former State attorneys general
with antitrust enforcement responsibility, wrote to Senators BiDEN
and Metzenbaum urging passage of this bill and discussing the
bill's antitrust implications. I ask that a copy of that letter be
printed in the RECORD following my statement.
This bill, S. 479, will in a very important way, help our compa-
nies compete. Too many American firms are deterred from making
strategic investments because of cost. One way for companies to cut
costs is by forming strategic joint ventures. Such ventures encour-
age companies to pool resources, sharing the risk of those projects
that are beyond their individual means.
A recent article in the New York Times science section stated
that Japan has now passed the United States as the leading nation
supporting industrial R&D. This is a clear indication of our in-
creasing inability to keep up with Japan on key competitive issues.
By passing this legislation, we are aiding American companies
with this process of pooling resources and sharing costs. The global
marketplace is more competitive and more expensive than the tra-
ditional domestic-only market in which most American firms have
competed. We need to change our way of thinking when it comes
to assisting American companies. We can no longer afford to apply
outdated norms to the modem marketplace. S. 479 helps to address
some fundamental issues confronting American companies as they
attempt to compete. I urge my colleagues to support the passage
of this most important legislation.
I also ask unanimous consent that the New York Times article
on Japan passing the United States in support for industrial re-
search be included in the RECORD as part of my statement.
There being no objection, the article was ordered to be printed
in the RECORD, as follows:
[From the New York Times, Feb. 25, 1992]
Japan Seen Passing United States in Research by Industry
(By William J. Broad)
Japan has equaled or surpassed the United States as the world's
top patron of industrial research and development, according to a
growing number of science analysts. If so, Japan has a powerful
weapon in the trade wars of the 1990's and beyond as it uses re-
search discoveries to launch a new wave of innovative goods and
The analysts take issue with the Federal Grovemment's Japan-
watchers, who calculate that the United States still leads in re-
search spending by business, while acknowledging that America's
edge in this area is eroding fast. Last week a Federal agency re-
ported that American spending on research and development, in-
cluding money from government, business and other sources, has
begun to decline for the first time since the 1970's.
An increasing number of private analysts, as well as Japanese
economists and American officials, say the picture is far gloomier
than Federal estimates suggest. Japan, they say, has in fact ex-
panded its industrial research so rapidly in the past decade that
it now rivals the United States, and perhaps has already pulled
The dispute comes even as the Japanese have seized the leader-
ship role in related fields. Japan, with half the population of Amer-
ica and an economy two-thirds the size, is already known to invest
more in new factories and equipment. In 1990, it spent $586 billion
on capital investment, compared with the $524 billion spent by the
United States. And experts agree that certain of Japsin's high-tech-
nology industries, including semiconductor fabrication, heavily out-
spend American rivals in advanced research as well.
What is emerging now is the radical idea that Japan as a whole,
for the first time, is challenging America's traditional role as world
leader in the overall support of industrial research. That role is
seen as vital since private industry is increasingly the source of the
innovations so important in the international race for commercial
advantage that it is pouring vast amounts of money into industrial
research and say it will eventually overtake the United States if
the pace of investment is sustained.
A leader of the school that says Japan has already attained supe-
riority is Senator Jeff Bingaman, Democrat of New Mexico, who re-
cently told his Congressional colleagues that Japan had quietly
scaled the summit of industrial research and development. "It is
close to certain that the Japanese are, or will soon be, outspending
us on civilian R.&D., especially in industry," Mr. Bingaman said.
In an interview, Bruce R. Scott, a professor at the Harvard Busi-
ness School, agreed and said the way the Federal Government com-
pares international industrial research spending gave a false pic-
ture of foreign spending.
Significantly, a Federal panel has adopted that view. The Com-
petitiveness Policy Council, recently created by Congress, is an ad-
visory body whose 12 members are appointed by the White House
and Congress. Mr. Scott of Harvard is a member, and the council's
chairman is C. Fred Bergsten, director of the Washington-based In-
stitute for International Economics.
The council is circulating a draft report that says Japan has
surged ahead of America in business spending on research. The
final report is to be made public on March 4.
Federal officials in charge of comparing research among nations
insist that the United States is still far ahead of Japan. But they
concede that their methods, which center on adjusting exchange
rates between the dollar and the yen, need an overhaul.
John E. Jankowski Jr., a senior financial analyst at the National
Science Foundation, a Federal agency that supports research and
monitors spending on scientific research, said the agency's current
method was nowhere "near the ideal of what we'd like" but de-
fended it as the best available. Its overhaul, he said, would require
a major effort that was unlikely soon in a period of tight budgets.
The issue of who leads the world in industrial research has taken
on new significance in recent years because such research has
quietly become a prime engine of discovery and innovation.
For decades, in America and elsewhere, it was governments that
financed the lion's share of scientific research and development,
putting money into universities, defense industries and state lab-
oratories. In the United States, the Government did so with a
vengeance during the cold war and pioneered a host of innovations,
including rockets, jet engines, computer chips, communication sat-
ellites and photovoltaic cells.
By 1980, American industry had grown so large and had become
so dedicated to its own pursuit of scientific advancement that for
the first time it surpassed the Federal Government as the nation's
top patron of science research. It has maintained that position ever
In 1989, for instance, the most recent year for which foundation
figures are available, American industry spent $71.77 billion on re-
search and development, compared with the $68.72 billion from all
other sources in the United States, including the Federal Grovem-
ment. As a result of this and other factors, American industry has
become a hotbed of innovation.
The trend of spending more on industrial research is global. Yet
measuring exactly how much nations spend is extremely difficult,
experts agree. A crucial problem is exchange rates, which can
swing wildly and are often seen as poor indicators of a currency's
As a result, economists have developed conversion tables that try
to equalize price levels among countries. These are known as Pur-
chasing Power Parities, or P.P.P.'s. Their aim is to make the clout
of differing currencies roughly equal in terms of goods that are
traded internationally. For instance, American P.P.P.'s for 1989
show a dollar on average being worth 204 yen. That is much
stronger than the dollar's actual market value that year of 138 yen.
What that means is that a Japanese camera was cheaper for an
American buyer and more expensive for a Japanese buyer than is
suggested solely by market exchange rates.
The National Science Foundation routinely uses the parity tech-
nique, rather than exchange rates, to compare research among na-
tions. It thus finds Japanese industrial research to be relatively
paltry. The foundation says Japanese industry spent 8.54 trillion
yen on research in 1989, which by the parity teclmique is equal to
$41.90 billion, or a little more than half the comparable American
sum. But if calculated at market exchange rates, the figure jumps
to $61.83 billion.
The Japanese see their investment as even greater. The July
1991 issue of The Japan Economic Survey, published in Washing-
ton by the Japan Economic Institute, cited a Japanese Government
study that said Japanese business in 1989 spent 9.60 trillion yen
on research. Using a market exchange rate of 135 yen to the dollar,
the survey said that figure equaled $71.10 billion dollars, or rough-
ly what i^erican business spent that year.
The fields where Japan's industrial research investment is ex-
panding rapidly include publishing, printing, petroleum, plastics,
fabricated metal products, machinery, communications, textiles,
chemicals and transportation. Areas where it is down include agri-
culture and mining.
Changes in Investment — Shifts in Japan's research and development expenditures in
selected industries between 1988 and 1989
Mining - 12.5
Food products +13.5
Publishing and printing +33.0
Plastic products +32.8
Nonmetallic mineral products +11.5
Fabricated metal products +22.0
Non-electric machinery +23.9
Electric machinery +14.5
Transportation equipment +14.6
Motor vehicles +16.6
Precision machinery +11.5
Transportation, communications and utilities +12.0
Source: Japanese Management and Coordination Agency.
Senator Bingaman, who heads the technology and national secu-
rity subcommittee of the Congressional Joint Economic Committee,
saw the Japan Economic Survey article, became worried that the
science foundation's estimates were faulty and ever since has tried,
with minor success, to stir debate on the subject. An early review
of the dispute was published in New Technology Week, a trade
publication based in Washington that first explored the topic in its
Jan. 13 issue.
In its current issue, dated Feb. 24, New Technology Week moved
the issue forward by citing new evidence of Japan's supremacy. The
Dublication said the American Embassy in Tokyo is citing a pre-
iminary 1990 figure for Japanese industrial research of 10.72 tril-
ion yen, or, at an exchange rate of 135 yen to the dollar, nearly
$80 billion. That figure, the publication said, is far greater than
comparable American spending and "should send shock waves
through the U.S. Industrial community."
Some experts say the problem is overstated. They note that the
United States Government supports a vast amount of research, un-
like Japan, and that this Federal research is a quiet aid to Amer-
ican industry. For instance, the billions of dollars spent annually
on scientific research by the National Institutes of Health is clearly
a boon to the pharmaceutical industry. But the results from much
of this Federal research, unlike business research, are openly pub-
lished in scientific journals and are available to the Japanese as
Some experts say the status of American industrial research may
be far worse than the debate over exchange rates so far suggests.
Mr. Scott of the Harvard Business School said current methods of
comparison are likely to vastly understate Japanese prowess since
they focus on consumption rather than production, which in Japan
is often remarkably efficient.
Using the parity technique to analyze research spending, he said,
is crazy, "That's a way to measure Japanese incomes and say what
they can purchase," he said. "If you adjust instead for the produc-
tive power of the manufacturing sector, you get an exchange rate
closer to 100" yen to the dollar.
That figure, if applied to Japan's 1989 investment in industrial
research, as measured by the National Science Foundation, leads
to a dollar equivalent of $85.4 billion. And that, of course, is far
ahead of Americsin industry's $71.77 billion investment that year.
While not endorsing the accuracy of such calculations, Mr.
Jankowski of the foundation said that any overhaul of America's
system for gauging the financial strength of foreign industrial re-
search would have to take such productivity issues into account.
Washington, DC, September 21, 1990.
Senator Joseph R. Biden, Jr.,
Chairman, Committee on the Judiciary, Dirksen Senate Building,
Senator Howard M. Metzenbaum,
Chairman, Subcommittee on Antitrust, Monopolies and Business
Rights, Committee on the Judiciary, Hart Senate Building,
Dear Joe and Howard: We are writing to you, as former state
Attorneys Greneral, concerning various proposals to extend the Na-
tional Cooperative Research Act of 1984 to include manufacturing
or production joint ventures, in addition to research and develop-
ment joint ventures. There are presently four bills introduced in
the Senate which address this issue: S. 1006, introduced by Sen-
ators Thurmond and Leahy; S. 2692, introduced by Senator Thur-
mond on behalf of the administration; Title IV of S. 2765, intro-
duced by Senator Lieberman; and H.R. 4611, which has already
passed the House of Representatives. First and foremost, we want
to encourage you to move this legislation so that it can be consid-
ered by the full Senate.
With respect to the substance of this bill, we believe that those
of us who served as state attorneys general have a unique perspec-
tive with respect to this legislation which might be helpful to our
colleagues as they consider this bill. We hope that our observations
will be of assistance to you as your committee deliberates.
There can be no doubt about the need to improve America's com-
petitiveness in international trade. Too often in recent years, Amer-
ican business and industry have been left in the dust by overseas
competitors. One of our problems is that, while we continue to
make breakthroughs in basic science and research and to invent
new products, we often drop the ball when it comes to bringing new
products to market.
S. 1006, and related legislation, will encourage and facilitate ef-
forts to bring these products to markets by clarifying the antitrust
principles governing manufacturing joint ventures. It is important
to note that these bills do not change the existing standard for
evaluating the antitrust consequences of these joint ventures: joint
ventures will continue to be judged under the rule of reason. A
joint venture will still violate the antitrust laws if it constitutes an
unreasonable restraint of trade. These bills will, however, help to
alleviate some companies' fears that their joint venture would con-
stitute a per se violation of the antitrust laws.
S. 1006 and related bills, will also extend to manufacturing joint
ventures limited protection against trebled damage awards, just as
currently afforded to research and development joint ventures.
Joint venturers who violate the antitrust laws will continue to be
liable for actual damages, prejudgment interest and the prevailing
plaintiffs costs and attorney's fee.
As former antitrust law enforcers, we are the first to concede
that detrebling damages for qualified manufacturing joint ventur-
ers reduces a measure of deterrence against anticompetitive activ-
ity. These bills, however, contain specific provisions that make it
unlikely that an unscrupulous manufacturer could attempt to use
the provisions of this bill as a means to reduce the risks of engag-
ing in anticompetitive conduct. They require, as a condition of
deterbling damages, that joint venturers notify the Department of
Justice and the Federal Trade Commission of the venture, its na-
ture and objectives, and that the Department or the Commission
publish a notice of the joint venture in the Federal Register. These
notice provisions will strengthen public and private prospective
antitrust enforcement by enabling the Department of Justice, Fed-
eral Trade Commission, or other private parties to sue to enjoin
any joint venture prior to its consumation.
Furthermore, we believe that any loss of deterrence against man-
ufacturing joint venturers must be weighed against the procom-
petitive and competitiveness benefits. Manufacturing joint ventures
are essential for firms to meet successfully the challenge of foreign
competition. They can allow companies to share the risks of bring-
ing new products to market, spread the start-up costs thereby re-
ducing barriers to new product entry, and allow companies to con-
tribute and share production and technical expertise and know-
how. A manufacturing joint venture may also be a necessary ad-
junct to a research and development joint venture since, especially
for high-tech products, research and development activities must be
closely coordinated with production investment, processes and tech-
niques. Since our firms already face an extremely high cost of cap-
ital relative to the rest of the world, we need these manufacturing
joint ventures to help us stay competitive. ^ Moreover, as compared
with mergers driven by the need to share risks, acquire sufficient
capital or share knowledge, manufacturing joint ventures present
a less permanent, and therefore an inherently less anticompetitive,
In terms of developing new manufacturing products or processes,
it is also often difficult to assess the potential antitrust risk at the
outset of a venture. An effective manufacturing joint venture, espe-