Floor Statements

Mr. Speaker, I am honored to present to my colleagues a succinct academic analysis written by Dr. Michael Czinkota of the McDonough School of Business at Georgetown University, and his fellow professors, Gary Knight and Gabriele Suder, regarding their analysis of the impact of 9/11 on the international business climate and the trends in globalizations. In light of the 10th anniversary of the terrorist attacks on the United States, I commend to you their observations.

Terrorism and International Business--Looking Back and Striving Forward

(By Michael R. Czinkota, Gary Knight, and Gabriele Suder)

The airplanes of 9/11 forced countless multinational

corporations (MNCs) to update their strategic planning. Our

work with executives at more than 150 MNCs shows that ten

years later, companies are still grappling with how best to

manage the terrorist threat.

In the two decades before 2001, the rate at which firms

launched international ventures was growing rapidly. After 9/

11, foreign direct investment fell dramatically as firms

withdrew to their home markets. The popularity of

international-sounding company and brand names decreased

appreciably as managers now emphasize domestic and local

affiliations.

The tendency to reverse course on globalization has been

accompanied by declining international education in the

United States, as revealed by falling enrollments in foreign

language and international business courses. In the past

decade, managers shifted much of their focus from proactive

exploration of international opportunities to a defensive

posture emphasizing threats and vulnerable foreign

operations.

In Europe, the radicalization of individuals and groups,

motivated by ideology, religion or economic concerns,

threatens local cooperation and social harmony. European

business schools have benefited from tighter restrictions on

international student enrollments in the U.S., but the focus

of teaching has shifted from global to regional trade.

Another outcome of the terrorism threat has been a rise of

public-private partnerships, in which governments and firms

collaborate to counter them. For example, global police

agencies now partner regularly with private firms to combat

cyber crime and attacks on critical computer infrastructure.

Governments and activist groups now use social media to

organize campaigns fighting against threats ranging from

dictators to disease. But nations also have begun to curtail

social media when they are contrary to government interests.

The cost of protecting against terrorism is many billions,

while terrorist spend millions or less on their actions.

There are abundant opportunities for small groups to employ

nonweapon technologies, such as aircraft, to cause massive

harm. Though our capacity to protect key facilities has

improved over time, the security focus on high-value assets

encourages terrorists to redirect their violence at ``soft

targets'' such as transportation systems and business

facilities. Greater security at home means attacks will

increasingly take aim on firms' foreign operations.

Companies have placed more emphasis on terrorism risk

considerations when choosing how to enter foreign markets. In

the last century, foreign direct investment (FDI) was the

preferred approach. But terrorism has shifted the balance.

Now many more firms favor entry through exporting, which

permits broad and rapid coverage of world markets, reduces

dependence on highly visible physical facilities, and offers

much flexibility for making rapid adjustments. In terms of

economies of scale and transaction costs, FDI is generally

superior, but the risks of exporting are judged to be lower.

Markets tend to punish failure more harshly than they reward

success, which makes risk-minimizing strategies more

effective.

Skillful management of global logistics and supply chains

cuts the risk and cost of downtime. Firms seek closer

relations with suppliers and clients in order to develop more

trust and commitment. Some have increased ``on-shoring'' by

bringing suppliers

back into the country when their remoteness constitutes risk.

Terrorism causes an organizational crisis whose ultimate

effects may be unknown, and poses a significant threat to the

performance of the firm. Corporate preparedness for the

unexpected is a vital task. Innovative managers develop back-

up resources, and plan for dislocations and sudden shocks

with a flexible corporate response.

Terrorism is a public threat, and some managers believe

government should bear the cost of protecting against it.

Others argue that a public-private partnership is the most

effective approach, with firms taking the lead. There is also

the issue whether corporate headquarters or the locally

exposed subsidiary should fund prevention and preparation

expenditures. Regardless of who pays, everyone can agree on

the need to guard against terrorism.

Every world region is vulnerable, and most attacks are

directed at businesses and business-related infrastructure.

Terrorism requires decision-making and behaviors that support

vigilance and development of appropriate strategies. Managers

who fail to prepare run the risk of weaker performance or

even loss of the firm. While we can no longer choose the

lowest cost option, ten years after 9/11 companies are more

aware, less exposed, and less vulnerable to the risk of

terrorism. But in the next ten years comes the really big

task: What can and should we do collectively and individually

to reduce the causes of terrorism.

Thank you, Judge Carter, for the opportunity to be with you this evening.

I spend, as you know, most of my time working on manufacturing issues. Our congressional district in the northern part of Illinois is home to over 2,000 factories, and McHenry County, in particular, is home to some of the most high-tech plastic companies in the world.

The President, last week, spoke before Congress and talked about regulations, and he said that every rule should meet the so-called commonsense test.

Regulations should protect people from environmental health hazards and unsafe workplace practices. There's no disagreement on that. We all agree on that. But overregulation has a tendency to destroy jobs.

For example, the Department of Health and Human Services, under the directive of the National Toxicology Program, has labeled, recently, styrene as a human carcinogen that causes cancer. Now, styrene is the basic ingredient that is used in plastic composites. About 90 percent of the composites contain that and about 50 percent of other plastic resins for other uses.

And some of the uses for products with styrenes, they're used in packaging and disposables under polystyrene plastic resins, food trays, egg cartons, furniture, office fixtures, equipment covers, mail trays. In fact, the plastic that is oftentimes used on electronic equipment, refrigerator components, liners, air-conditioning parts in housing, toys, high-tech products, consumer electronics, major appliances, insulation, floor backing, pipe and siding, computer monitors, IV connectors, syringes, stereo covers. You can see that it's almost anything that is used in manufacturing. And the fiberglass tubs, showers.

It could very well be.

So that just demonstrates, Judge, the fact that styrene is so pervasive in all of our consumer products.

Now, what has happened is the National Toxicology Program said that styrene is a carcinogen. They looked at a couple of studies, did a very, very poor job in looking at the history and the other studies available. In fact, the European Union and Canada came to the opposite conclusion and said that there's nothing wrong with styrenes, that it does not cause cancer.

What we're trying to do is get the National Academy of Sciences, which is widely regarded as the final word in these scientific matters, to conduct an independent study on styrene.

Now, if nothing happens and styrene remains on this list of something that's ``likely to cause cancer,'' it could end up destroying hundreds of thousands of jobs in America. Let me give you an example.

The company that makes all the plastic utensils for McDonald's, that company uses styrenes. And what we see developing here are insurance companies that are taking a look at the plastic companies that use styrene, and they're becoming very nervous over the fact that the government is taking a position that, without good case study, styrene is a carcinogen. So insurance companies are starting to balk at insuring the companies that use styrene.

Lawyers have already met examining the best way that they could bring the class action lawsuits for all of these products that contain styrenes. And what could end up happening is, because of the regulations that will come down from the Federal Government, the government will say, well, in its finished product, there's nothing wrong with a product involving styrenes, but in the manufacturing of it, that's where the problem is. We could lose hundreds of thousands of jobs. Our plastics industry could be destroyed.

Now, these are the types of things that absolutely do not make sense, where, because of the jungle of rules that the Federal Government has that makes it very difficult to get in a counterargument, where people make decisions not based upon a cost analysis but based upon a couple of studies here and there as opposed to volumes of studies that have gone on examining whether or not styrenes are a carcinogen, we could lose the plastics industry in America. Those jobs could easily go overseas all because of poor science on the part of the regulators.

Regulation in America is out of control. And I work not only with the styrene industry but the people that are involved in foundries, where regulations are underway that if they're not done correctly--you could take a look at the silicas and say even though silicas are a problem, we know that if the regulations are done improperly, we could lose the foundry industry in this country.

America is great because of our manufacturing background. America will only recover from this economic crisis when the manufacturing jobs are secure and come back. That's why we've been pleading with HHS, saying, You don't understand, the Department of Health and Human Services, the impact of the poor decision that you have made with regard to these styrenes.

We could go on to other products from other manufacturers, and it's a slew. You have, up there on the chart, the scissors cutting the red tape. The red tape is so thick it would take a blowtorch to go through it, or some kind of a chopper or buzz saw, besides the scissors on it.

So I share with you the deep concern over the people who are losing jobs in America today because of overregulation by the Federal Government.

Will the gentleman yield?

Look at the Keystone pipeline coming down from Canada to Texas, which branches, really, into central Illinois. It's been tied up by the EPA and other regulators for 3 years. We're looking at 20,000 new jobs. I think it's a $5 billion to $8 billion project. That doesn't count the people that make the pizzas, the people that make the shoes.

I was talking to a shoe salesman, Red Wing shoes that are mostly made in America, and those are the industrial shoes. And I said, How's business?

He said, Don, when manufacturing is down and construction is down, my sales of shoes are down.

And so it continues. It's not just the actual cost of the impact to that particular entity, the particular construction site, the particular regulation, but all of the peripherals that come as a result of it. Those are the things that destroy our economy.

And it's not just oil; it's natural gas.

Plus we would end up losing the people that made the machine tools, the actual molds, the dyes for the injection systems and other types of systems and molding systems that are used in the manufacture of these plastics.

I appreciate Congressman Carter's yielding to me to explain this styrene issue, and I look forward to the rest of his presentation.

Mr. Speaker, I am pleased to introduce today, with my good friend and Co-Chair of the House Manufacturing Caucus, Tim Ryan of Ohio, the Mechanical Insulation Incentive Act of 2011, MIA 2011. Mechanical insulation is the insulation placed around mechanical equipment, such as large boilers, heating and air conditioning units, duct work, and hot and cold water piping, to prevent energy loss, control condensation, regulate temperature, help reduce pollutants, and protect employees from hot or cold surfaces. Commercial buildings and industrial facilities consume 2.5 times more energy than homes, according to the Energy Information Administration. Energy efficiency in mechanical insulation is critical in reducing energy cost and consumption, and it is an essential industry for job creation.

MIA 2011 will help the commercial and industrial sectors invest in mechanical insulation and create much-needed jobs in one of the hardest-hit industries. The National Insulation Association, NIA, estimates that this bill alone could create or sustain more than 89,000 jobs annually. Specifically, this legislation would create up to a 30 percent tax deduction to encourage commercial and industrial entities, such as manufacturing facilities, office buildings, schools, hospitals, power plants, hotels, and universities, to go beyond minimum mechanical insulation requirements in new construction and retrofit projects and increase their maintenance activities. The NIA also estimates this bill could save up to $35 billion in energy costs and reduce as much as 170 million metric tons of carbon emissions over the next five years.

Mechanical insulation systems are a vital component in creating and maintaining high-performance, energy-efficient buildings and increasing manufacturing efficiency. MIA 2011 cuts energy costs, reduces carbon emissions, and puts Americans back to work through a tax incentive encouraging the use of mechanical insulation.

Mr. Speaker, it is with great honor that I rise on behalf of the following colleagues, Robert Aderholt, Todd Akin, Spencer Bachus, Kevin Brady, Dan Burton, John Carter, John Culberson, Elton Gallegly, Scott Garrett, Louie Gohmert, Jeb Hensarling, Ruben Hinojosa, Sam Johnson, Timothy Johnson, Jim Jordan, Steve King, Jack Kingston, Doug Lamborn, Daniel Lungren, Mike McIntyre, Cathy McMorris Rodgers, Randy Neugebauer, Mike Pence, Joseph Pitts, Bill Posey, Peter Roskam, Adam Smith, Cliff Stearns, Glenn Thompson, Tim Walberg, Ed Whitfield, Joe Wilson, Frank Wolf, and Don Young, to pay tribute to the extraordinary life and service of Sam McCullough. Sam served this body faithfully for over three decades as a spiritual mentor and good friend to hundreds of Members, Congressional staff, Presidential appointees, and other government officials. Sam entered the presence of the Lord on July 2, 2011, after a brave, year-long battle with cancer.

Sam began his earthly journey in New Jersey where his missionary parents were in ministry at the Hydewood Park Baptist Church. At the age of four Sam accepted Christ as his personal Lord and Savior at a Child Evangelism Good News Club led by his mother. From that point on Sam always had a keen interest in spiritual things. At the age of ten, Sam, his parents and his sister, Ann, returned to the mission field in Bolivia. His faith grew even more as a student at a small missionary children's boarding school.

Sam returned to the States to join his sister at the Ben Lippen School boarding school in Asheville, NC. Under the influence of godly teachers, he rededicated his life to the Lord. Upon graduation he attended Columbia International University for two years of intensive Bible training. He then transferred to Houghton College in New York graduating with a degree in Business Administration and minors in Spanish and music. Campus Crusade for Christ staff visited the Houghton campus during Sam's senior year. Sam and his future wife Nan were impressed with the young people and their passion to share Christ.

Upon graduation in 1967 Sam worked for Art DeMoss' National Liberty Insurance Company. He also attended the Reformed Episcopal Seminary in Philadelphia. Art DeMoss, a personal friend of Campus Crusade founder Dr. Bill Bright, challenged Sam to join Campus Crusade to ``help change the world'' by reaching the future leaders on university campuses.

Sam and Nan were married after Nan's graduation from Houghton and joined the Campus Crusade ministry as staff. They had planned on a two year term to learn how to effectively share their faith, then to return to the business world. But as God used them in the lives of college students, they found themselves compelled to stay in full time ministry.

The McCulloughs were assigned to ministry on the campuses of the University of Maryland, University of Rochester, Monroe Community College, and Rochester Institute of Technology, after which they moved to the University of Buffalo where they ministered for four years. Over 20 of their University of Buffalo students went into some form of Christian ministry.

In 1973, Sam was appointed as Area Director for all of Pennsylvania and Delaware. He carried this responsibility for six years. He worked on all the campuses in those states where Campus Crusade had a presence.

In 1979 Sam felt the Lord leading him to leave his work with future leaders and to start reaching out to the present leaders in Washington. Sam and Nan joined the Christian Embassy (CE), a Washington, DC ministry of Campus Crusade and have faithfully served national and international leaders in Washington for 31 years. In addition to numerous administrative responsibilities at the CE, Sam led Bible studies and other men's groups. He was responsible for planning many of the CE retreats and fund raising events. Towards the end of his ministry on this Earth, Sam defied the cancer to continue modeling the Christian life and teaching the Word of God to presidential appointees, Members of Congress and their Chiefs of Staff.

Sam is survived by his precious wife, Nan, his three children and their spouses: Kristi & Darrin Kruft, Kevin & Sarah McCullough, Scotty & Kelly McCullough, and three grandchildren: Lily Kruft age 9, Jazlyn McCullough age 5, & Damien Atkins age 13.

Sam had an amazing ministry of presence to us on Capitol Hill. Whether it was praying with Members or Ambassadors distraught over national tragedies, helping defeated Members transition out of public service, or following up on the health episodes of family members, Sam was always there. In a town known for asking, ``What have you done for me lately?'' Sam was one of the few who would stop by simply to say, ``Hi, do you have any needs?'' He spent his lifetime pouring himself into the lives of others, driven only by the call of following the will of the Lord.

Sam was a truly special man who humbly touched the lives of all who encountered him. We will miss his presence with all our hearts and are so grateful that he chose to share the love of Christ with us. We also extend our appreciation to Nan and the children for sharing Sam with us. We have no doubt that when Sam entered the presence of the King, he was welcomed with ``Well done, thou good and faithful servant!''

Mr. Speaker, on Monday, July 18, 2011, I unfortunately missed a series of votes. If I had been here, I would have voted ``yea'' on rollcall No. 601 and ``yea'' on rollcall No. 602.

Madam Chair, I have an amendment at the desk.

Madam Chair, there are a lot of problems with this bill as we have heard about already. In fact, on the wall of my office here in Washington, I have two pictures, among many. One is a picture of W. Edwards Deming and myself, taken just before he passed away in 1993-- the real inventor of Lee Manufacturing. The other is of Dr. Ray Damadian, the inventor of the MRI who, when examining this legislation, said if the new changes had taken place in the patent law, had they been part of the patent system when he invented the MRI, the MRI never would have been invented. He knows more than anybody how flawed this bill is.

I want to focus in particular on section 10 of the bill, which allows the Director of the Patent Office to set fees. I'm very concerned about this because, in the last patent fight, in 2004, when I chaired the House Small Business Committee, in return for supporting higher fees with a reduced rate structure for small businesses, the provision in that bill allowing the PTO Director to set fees was removed.

This new bill abrogates that hard-won compromise and allows the director of the PTO to set the fees. It is not wise for the legislative branch to give up more power and authority to the executive branch. I know it's inconvenient to have Congress set fees, but that's the job of Congress, not the job of an unelected bureaucrat.

When I chaired the House Small Business Committee, I continued the tradition of preventing the SBA from unilaterally being able to set fees to whatever level they sought. I don't see why we have to do this with the PTO. Now in the present bill, section 11 actually lowers fees for small business people and has a good patent fee structure. However, section 10 would allow the PTO Director to proceed with the administrative process to eviscerate that section and impose its own fees.

To compound the problem, the Patent Office has been saying for years that if they had the authority to raise fees, they would. In 2002, the PTO strategic plan said they needed to have a fee based upon a progressive system aimed at limiting applications. In 2010, in the white paper on patent reform, they said the same thing.

The Patent Office's idea of cutting back on the backlog is to raise fees. That doesn't make sense. But let's eliminate that authority from the Patent Office. Let's leave that authority with the United States Congress.

I reserve the balance of my time.

I yield myself the balance of my time.

Madam Chair, you don't strike the right balance between an inventor's constitutional right to file for an invention and giving a patent czar the authority to keep him out of the box by allowing him to raise the fees. Mr. Smith from Texas said it himself; he coupled patent backlog with the ability of the patent director to set the fees. That can only lead to one conclusion: They're going to raise the fees in order to cut down on the patent backlog. It doesn't make sense.

This is the people's House. The Patent Office is the people's house for the little inventor. He must have every opportunity to exercise his constitutional right and file that patent. But if Congress cedes the authority to set those fees to a new authority of the patent director-- or we can call him now the patent czar--that patent czar will control for 7 years, at the minimum, the flow of traffic coming through his office. And you know who gets slowed? Do you know who gets hurt? It's the little guy. And the purpose of my amendment is to protect the little guy to make sure those fees are not raised, and also to make sure that the people in this country elect representatives in Congress because it's our job to set the fees, not the job of an unelected person, the person in charge of the Patent Office.

I would therefore urge my colleagues to vote for the Manzullo amendment, to support the little inventor, to support the spirit of entrepreneurship in this country.

Madam Chair, I yield back the balance of my time.

Madam Chair, I demand a recorded vote.

Madam Chair, in my office there are two photographs, one with me and Edwards Deming and the other of Dr. Ray Damadian, who is the inventor of the MRI. Dr. Damadian visited our office, and I said, What's wrong with this bill? He said, Everything. He said, If this bill were law when I invented the MRI, today we would not have the

Mr. Speaker, I missed a series of votes yesterday because of a family medical issue. If I had been here, I would have voted ``yea'' on rollcall No. 381; ``yea'' on rollcall No. 382; ``yea'' on rollcall No. 383; ``yea'' on rollcall No. 384; ``no'' on rollcall No. 385; ``yea'' on rollcall No. 386; ``yea'' on rollcall No. 387; and ``no'' on rollcall No. 388.

Mr. Chair, I missed a series of votes today because of a family medical issue. If I had been here, I would have voted ``yea'' on rollcall No. 389; ``yea'' on rollcall No. 390; ``yea'' on rollcall No. 391; ``yea'' on rollcall No. 392; ``no'' on rollcall No. 393; ``no'' on rollcall No. 394; ``yea'' on rollcall No. 395; ``yea'' on rollcall No. 396; ``yea'' on rollcall No. 397; ``yea'' on rollcall No. 398; ``no'' on rollcall No. 399; ``no'' on rollcall No. 400; ``yea'' on rollcall No. 401; ``yea'' on rollcall No. 402; ``yea'' on rollcall No. 403; ``yea'' on rollcall No. 404; ``yea'' on rollcall No. 405; ``no'' on rollcall No. 406; ``no'' on rollcall No. 407; ``no'' on rollcall No. 408; and ``yea'' on rollcall No. 409.

Mr. Speaker, on Monday, May 10, 2011, I unfortunately missed a series of votes. If I was here, I would have voted ``no'' on rollcall No. 299, ``no'' on rollcall No. 300, and ``no'' on rollcall No. 301.

Mr. Speaker, I missed a vote earlier today because I was inadvertently detained. If I had been here, I would have voted ``yea'' on rollcall No. 213.

Stated against:

Mr. Speaker, on Thursday, March 10, 2011, and on Monday, March 14, 2011, I missed a series of votes because I was ill. If I was here, I would have voted ``no'' on rollcall No. 168, ``no'' on rollcall No. 169, ``no'' on rollcall No. 170, ``yea'' on rollcall No. 171; ``yea'' on rollcall No. 175; and ``yea'' on rollcall No. 176.

Mr. Speaker, we have a unique opportunity today to begin the long process of addressing the hidden tax of burdensome regulations. These are the regulations that choke small businesses, hinder U.S. manufacturers, and obstruct job creation.

Last year alone, the Federal Government created 43 major new rules that cost our economy approximately $28 billion, and my friends on the other side of the aisle wonder why jobs are going overseas.

By directing committees to review and purge outdated and unproductive regulations from the books, this resolution provides much-needed oversight to a regulatory system that is spiraling out of control.

As the co-chair of the House Manufacturing Caucus, I hear almost every day from manufacturers and other small businesses that are being crushed by unnecessary regulations which constrict job growth and yet don't make us any safer, any healthier, or any more secure.

Our country needs a sensible and economically competitive regulatory policy. We need to give the Office of Advocacy of the Small Business Administration a stronger voice within the executive branch to stop or amend bad regulations before they become finalized. We also need to pass the REINS Act that will require Congress to have the final say on major regulations before they take effect to ensure that they are following congressional intent.

I urge my colleagues to support H. Res. 72.

Mr. Speaker, I missed two votes today because of weather-related conditions. If I had been here, I would have voted ``no'' on rollcall No. 24 and ``yea'' on rollcall No. 25.

Madam Speaker, two weeks ago, the Treasury Department released the details of the Federal budget deficit for Fiscal Year 2010. While many of the numbers were grim, at least one federal agency--the Overseas Private Investment Corporation, OPIC--reported a net income of nearly $260 million and contributed a net positive balance to the Federal budget deficit of $352 million in FY 10. In fact, this represents the 33rd consecutive year that OPIC has made a positive contribution to the Federal budget. These numbers were also confirmed by an independent external auditor, KPMG.

OPIC's earnings are generated through fees charged to users of their financing and insurance programs, as well as interest earned on its growing reserves, which now total about $5 billion. Because OPIC charges market-based fees for its products, it operates on a self- sustaining basis at no net cost to the taxpayers. This is not counting the tax revenue generated by the more than 274,000 U.S. jobs that OPIC projects have supported over the past 39 years. In FY 10, OPIC- supported projects are estimated to generate $624 million in U.S. exports and to support nearly 1,000 American jobs. Eighty of the 97 projects supported by OPIC in FY 10 involved U.S. small businesses.

Thus, it would be counterproductive to close down OPIC because that action would actually reduce an incoming revenue stream to the Federal government and exasperate our budget deficit problem. In addition, if OPIC were terminated, many current users of OPIC would simply switch to investment insurance and financing programs of foreign governments, which would result in the shifting of U.S. jobs and tax revenue overseas, because there is no private company that provides long-term political risk insurance. That is why I encourage Congress to pass a multi-year reauthorization bill for OPIC, S. 705/H.R. 5975.