California Institute Capitol Hill Bulletin, Thursday, October 9, 1997 Page 1 [--- Unable To Translate Box ---] THE CALIFORNIA INSTITUTE For Federal Policy Research 419 New Jersey Avenue, SE, Washington, D.C. 20003 202-546-3700 fax:202-546-2390 ransdell@calinst.org www.calinst.org California Capitol Hill Bulletin Volume 4, Bulletin 32 -- September 25, 1997 To expand communications between Washington and California, the California Institute provides periodic faxed bulletins regarding current activity on Capitol Hill which directly impacts our state. Bulletins are published weekly during sessions of Congress, and occasionally during other periods. The e-mail edition is made possible in part by a computer server donation from Sun Microsystems. House Commerce Beats Back Effort to Restrict Encryption Use The House Commerce Committee favorably reported H.R. 695, the Security and Freedom Through Encryption Act (SAFE), by a vote of 44-6, after defeating an amendment that would have required all encryption devices and products sold or used in the United States to contain features that would allow law enforcement authorities to immediately decrypt stored data. Current law places no restrictions on the use of encryption by U.S. citizens. The amendment, authored by Reps. Michael Oxley (OH) and Thomas Manton (PA), was defeated by a vote of 16-35. The Committee then approved, 40-11, an amendment by Reps. Edward Markey (MA) and Rick White (WA) that restored the provisions contained in the original bill to ease restrictions on the export of encryption products and banned domestic encryption controls. Finally, The Committee approved by voice vote a substitute amendment authored by Rep. Billy Tauzin (LA) containing the Markey/White language, as well as establishing a joint government-industry commission to study ways of responding to the need of law enforcement authorities to access encrypted data without stifling the growth of the industry and its dominance by U.S. companies. All five Californians on the Committee -- Reps. Chris Cox, Brian Bilbray, James Rogan, Henry Waxman, and Anna Eshoo -- voted against the Oxley/Manton amendment and for the Markey/White amendment. In addition, Reps. Bilbray and Eshoo were co-sponsors of the Markey/White amendment. The bill has now been reported out by five House committees -- Judiciary, International Relations, National Security, Intelligence, and Commerce -- with substantial changes made by the National Security and Intelligence Committees that watered down the bill (see Bulletin, Vol. 4, Nos. 17 (5/15/97), 22 (6/26/97), 26 (7/24/97), 27 (7/31/97), 29 (9/4/97), & 30 (9/11/97). House action on the bill is expected in October. Rep. Zoe Lofgren (San Jose) co-authored H.R. 695 with Rep. Robert Goodlatte (VA) and has championed the original bill during consideration by the House committees. The high technology industry strongly supports H.R. 695 as it was reported by the House Judiciary and International Relations Committees and opposes the action taken by the National Security Committee and the Intelligence Committee. 43 Members Urge Greater Access to Pacific Air Routes Forty-three members of the California congressional delegation, including both partyıs delegation deans, have co-signed a letter to Secretary of State Albright and Transportation Secretary Slater supporting any effort in the ongoing bilateral negotiations with Japan that would broaden and open air services between the two countries. Current carrier restrictions on passenger flights between the United States and Japan have had a dramatic effect on Californiaıs tourism and trade industry as well as, many believe, lingering side-effects on the aerospace industry in California. U.S.-based airline industries are currently subjected to restricted routes and schedules in the Asian market which have resulted in an uncompetitive market and inflated fares. ³In your ongoing negotiations with the Japanese,² the letter states, ³we believe that the ultimate goal should be an ŒOpen Skiesı agreement. However, if that is not feasible, we believe that the United States should move quickly to secure an interim agreement to provide greater competition in the international marketplace.² Senate Passes FDA Reform; House Commerce Takes Up Bills After several weeks of debate and two votes to invoke cloture, the Senate on Wednesday overwhelmingly approved by a vote of 98-2 sweeping legislation to streamline the Food and Drug Administration and expedite FDA approval of drugs and medical devices (see Bulletin Vol. 4, Nos. 30 ( 9/11/97), & 31 (9/18/97). S. 830, in addition to reforming the FDA, also reauthorizes the Prescription Drug User Fee Act, set to expire on October 1. PDUFA authorizes the FDA to collect fees from manufacturers in order to defray the costs of expediting the review process. It is widely supported by the biomedical and pharmaceutical industry. On the House side, the Commerce Committee spent all day Thursday marking up its three-bill package on FDA reform. Because of the number of amendments offered, the Committee did not complete action, and will continue considering the bills on Friday. The three bills are: H.R. 1411, reauthorizing PDUFA; H.R. 1710, streamlining the medical device review process; and, H.R. 2469, amending food labeling procedures (see Bulletin Vol. 4, Nos. 29 (9/4/97), 30 (9/11/97), & 31 (9/18/97). FEMA Delegation Letter Garners 35 Signatures A September 15, congressional delegation letter circulated on behalf of California's state and local governments urging Federal Emergency Management Agency (FEMA) Director James Lee Witt to consider the significant role that the state and local governments fulfill when disasters strike California garnered 35 signatures last week. Specifically, the letter recommended that in order for FEMA to best meet the needs of local governments, the agency: invoke due process prior to adoption of any new or modified policies; ensure that compliance with environmental regulations does not lead to delays in local disaster response and recovery efforts; delegate decision-making of FEMA's Public Assistance Program eligibility to informed individuals closest to the source of damage; and expand on-line reporting availability to allow applicants to have a "read-only" access to the status of their appeals. House Agriculture Subcommittee Holds Hearing on the Renewal of Presidentıs Fast Track Authority This week, the House Agriculture Subcommittee on General Farm Commodities and the House International Relations Subcommittee on International Economic Policy and Trade met to discuss President Clinton's request for fast track trade agreement reauthorization (see Bulletin Vol. 4, No. 30, 9/18/97). Testifying before the House Subcommittee, the Administration and agricultural interests voiced their support for fast track reauthorization and the industry's increasing reliance on international trade. Deputy United States Trade Rep. Jeffrey Lang said that "America's farmers and ranchers are twice as reliant on foreign trade as the U.S. economy as a whole" and cited last year's $60 billion in agricultural exports as reasons for reauthorization. Committee members, however, raised concerns about the Administration's ability to enforce provisions of already negotiated trade agreements, like NAFTA, and the use of farm subsidies by trade partners to lower prices of foreign producer's commodities. Both Committees discussed the role of environmental and labor standards in negotiating trade agreements. Though the Agriculture Subcommittee limited its discussion to specific commodities, Undersecretary of State for Economic, Business, and Agricultural Affairs, Stuart E. Eizenstat, testified before the International Economic Policy and Trade Subcommittee that the U.S. could not presume to negotiate another countryıs labor and environmental standards. Acting Undersecretary of Commerce for International Trade Timothy J. Hauser highlighted the proposal's extended consultations with the Congress and its ability to suspend fast track authority if the President fails to adequately consult. However, Subcommittee chairwoman Ileana Ros-Lehtinen (FL) set the tone in her opening remarks by saying that a decision on fast track reauthorization would not be made in haste despite the President plans to travel to Latin American and Asia to discuss free trade this fall. Many members of Congress have indicated that they will oppose reauthorizing the Presidentıs fast-track authority. Boxer Secures $3.5 Billion In Mass Transit Funds For California; House Transportation Committee Approves Six Month Extension Of ISTEA With the expiration of the federal fiscal year this coming Tuesday, Congress took steps toward reauthorization of the nation's main transportation law, the Intermodal Surface Transportation Efficiency Act (ISTEA). The Senate Banking, Housing and Urban Affairs Committee approved and reported out the transit portion of the Senate's reauthorization bill (ISTEA II). Senator Barbara Boxer added several provisions that will benefit Californians resulting in an increase of $1.3 billion in formula grants over the last transit funding bill. "Mass transit improves the environment, creates jobs and is great news for California commuters," noted the Senator. Before taking action on the bill, the Committee also agreed, on a 11-7 vote, to an amendment offered by Senator Carol Moseley-Braun (IL) that provides $100 million annually for transit assistance programs designed to help welfare recipients get to work. On Tuesday, the House Transportation and Infrastructure Committee held Chairman Bud Shuster's (PA) bill, known as the Building Efficient Surface Transportation and Equity Act (BESTEA), in Committee and instead reported out a six-month reauthorization of the current ISTEA law (H.R. 2516). Explaining the Committee's actions, Chairman Shuster said that a short-term bill is necessary to prevent upsetting this yearıs balanced budget agreement. Before voting to hold Shuster's bill in Committee, the Committee extended BESTEA's funding period from three to six years raising its total price tag to $218.4 billion. Chairman Shuster said that this amendment will allow the Committee to take advantage of projected increased tax revenues when they emerge, but if there is not an increase in revenues, then the funding scales will be adjusted to not break the budget deal over the next six years. The Chairmanıs BESTEA bill will act as the starting point for consideration of the long-term reauthorization next year. UC Conducts Salton Sea Briefing on Hill On Thursday, the University of Californiaıs Washington D.C. office and experts from the University of California, Riverside, conducted a congressional briefing on the future of the massive and increasingly salinized Salton Sea that spans both Riverside and Imperial counties just east of San Diego County. In attendance were delegates from the offices of each of the five-member Salton Sea Taskforce ­ Rep. Ken Calvert (Riverside), Rep. Sonny Bono (Palm Springs), Rep. George Brown (San Bernardino), Rep. Duncan Hunter (El Cajon), and Rep. Jerry Lewis (Redlands). Also in attendance were delegates for Senator Feinstein, Governor Wilson, Rep. George Miller (Richmond), and Rep. George Radanovich (Mariposa). Of particular concern is the fact that the Salton Sea ­ the water source for much of the inland empireıs vast agricultural lands ­ has become increasingly salinized to unusable levels and is currently at a critical point as far as sustaining riparian and aquatic wildlife. The shallow 380 square-mile water bed, which sits 227 feet below sea level, is almost 25 percent saltier than the ocean. If left unchecked, the Salton Sea, which has no outlet, will continue to increase in saline level and eventually become unusable. University of California scientists have been very active in providing solutions to stabilize the health of the lake. Proposals for stabilization include: the construction of a lake-internal dike system in which saline can be separated and concentrated away from the water; construction of a pipeline system that would remove salts by pumping water from the Salton Sea (or highly saline water from the diked impoundment) to the Sea of Cortez; and finally, a more elaborate proposal would include a pipeline from the Salton Sea to the Sea of Cortez coupled with another pipeline returning less saline ocean water from the Sea of Cortez back to the Salton Sea. If you would like to learn more about this issue or receive materials and handouts from the briefing, contact John Hamilton of the University of California at (202) 588-0002. State Continues to Make Employment Gains On Friday, Governor Pete Wilson released employment figures for the month of August that revealed California experienced its 22nd consecutive month of record high employment. According to Wilson, the state added 9,400 jobs in the last month which elevates the total number of jobs gained since the stateıs lowest recession point in May 1993, to 1.1 million. [--- Unable To Translate Box ---] The Los Angeles Economic Development Corporation (LAEDC) noted that the stateıs seasonally adjusted unemployment figures held steady at 6.2% in August. Both the Governor and the LAEDC note that the incongruity between job growth and the unemployment rate is a result of the United Parcel Service strike last month. The San Francisco Bay area continued to lead the way in economic vitality with San Jose posting a scant 3% unemployment rate and San Francisco a modest 3.6% rate. Los Angeles dropped nominally to 6.6%, well below the regions 8.1% just one year ago. As was the case in 1996 (see chart), the biggest employment gains were in the services sector which produced more than 40,000 jobs in Los Angeles County last year alone. For a free copy of the California Instituteıs 1997 Economic Fact Book, a 24-page desk reference highlighting key components of Californiaıs economy, contact the Institute at (202) 546-3700 or by e-mail at emyoung@calinst.org. IBM Announces New Technology To Boost Chip Capability IBM announced this week that it has developed a new semiconductor manufacturing process that uses copper instead of aluminum for the electronic circuitry on silicon wafers. The new process will allow faster and more powerful microprocessors to be built for computer systems. Touted as a critical new technology by industry analysts, IBM expects to have chips incorporating the new process on the market by early next year. Conference Funds Bay-Delta At $85 Million On Wednesday, the conference committee on the Energy and Water Appropriations bill reached agreement on funding the Bay-Delta restoration program at $85 million for FY98. The House version had called for $120 million, while the Senate bill was set at only $50 million. Although the full Bay-Delta authorization is for $143 million annually for three years, the conference committee funding level will keep the project on track for the next year. Last November, California voters approved a $995 million bond issue for the program (see Bulletin, Vol. 4, Nos. 21 (6/19/97), 22 (6/26/97, 24 (7/10/97), 25 (7/17/97), & 29 (9/4/97)). Immigration Subcommittee Examines Temporary Farm Worker Program The House Judiciary's Immigration and Claims Subcommittee held a hearing on Wednesday to examine the H-2A temporary agricultural worker program. One witness the subcommittee heard from was the President of the California Farm Bureau Federation, Bob Vice, representing the National Council of Agricultural Employers and the American Farm Bureau Federation. Mr. Vice testified that western growers are facing an increasing shortage of available farm workers because of increased border control efforts and employer sanctions enforcement. He urged the Subcommittee to support H.R. 2237, introduced by Rep. Bob Smith (OR), who chairs the House Agriculture Committee. Rep. Smith's bill would establish a two-year pilot program to admit temporarily about 25,000 foreign agricultural workers annually. Mr. Vice also testified that the California Farm Bureau is working with several San Joaquin Valley counties to coordinate efforts to provide agricultural jobs for welfare recipients. Rep. Howard Berman (North Hollywood), a long-time expert on the H-2A visa program and temporary agriculture workers and a member of the subcommittee, stated, however, that there is double digit unemployment among farm workers, and the solution is for employers to attract more workers by offering better wages and living conditions, and to work with Congress to improve the worker employment service and training and recruitment programs. The testimony of all the witnesses is available from the Subcommittee at 202-225-5727. Boxer and Feinstein Call on Senate Finance to Eliminate Tax Benefit Delay for Proposed Los Angeles Empowerment Zone In a letter dated September 12, 1997, Senators Boxer and Feinstein asked Senator William V. Roth, Chairman of the Senate Finance Committee, to adopt legislation that would clarify the terms of creation of two new empowerment zones. According to the letter, Los Angeles' current Supplemental Empowerment Zone narrowly failed to become a full empowerment zone in 1994. This year, the Department of Housing and Urban Development will designate two new empowerment zones, providing the City of Los Angeles another chance to upgrade its current zone. However, under current law an empowerment zone must wait two years before receiving any tax benefits. Senators Boxer and Feinstein have urged the Finance Committee to adopt legislation that would allow for the tax breaks and, thus, economic revitalization immediately after designation as an empowerment zone. Institute Announces New Congressional Fellow The California Institute is pleased to welcome Ms. Katherine B. Mannen as the 1997-98 Center for California Studies Congressional Fellow. Ms. Mannenıs fellowship is sponsored by a generous contribution from the Center for California Studies at the California State University, Sacramento. Fellows are selected from a pool of applicants comprised of the Centerıs prior yearıs class of 51 Assembly, Senate, and Executive Fellows. A native of Del Mar, California, Ms. Mannen studied comparative politics in Glasgow, Scotland and received her B.A. in Political Science from Boston College in May, 1996. During her term as a Senate Associate, Ms. Mannen worked for the Senate Local Government Committee where she specialized in Californiaıs charter cities and counties, powers and finances of special districts, and local boundary change laws.