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his indicates that it is time to take a step back and see how the commission is able to absorb and put to good use the big increase we provided for this current year. I wish them well. We
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The offsets the gentleman proposes are totally unacceptable to this Member. The amendment would cut $4.6 million from one of the top priorities of this country, and that is providing security for our personnel in the embassies overseas. This would require cutbacks in security measures undertaken in the wake of the East Africa bombings, I will not tolerate that, Mr. Chairman.
We pressed the administration to come forward with a request in their budget to address the security in the embassies. They have done so. We have made sacrifices in other parts of the bill to provide that money, the full amount requested to ensure that our personnel overseas are protected to the best we can from terrorist attacks.
This is a critical requirement with life and death consequences as we saw so tragically last fall. In addition, the amendment takes an additional $21 million from the base operating costs of the State Department that are already funded at a level that is minimally adequate to allow the Department to continue to function near current levels. This cut would effectively freeze the Department at current levels and raise the possibility of post closings and reduction in personnel at the State Department.
The amendment would take an additional $1.5 million from the educational and cultural exchange programs at a cap that is already reduced 14 percent from current levels.
For these reasons, I urge a rejection of the gentleman's amendment. I wish we had more funding to provide increases in a number of agencies in the bill. But I believe it would be a serious mistake to cut State Department security funds and operating funds to provide a huge increase for the EEOC.
Mr. WYNN. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, I would like to respond to the comments that were just made on several fronts.
First, with respect to the funding that was provided last year, I would thank the gentleman. But my colleagues will note in his comments, the chairman said this funding will allow us to have a backlog of only 28,000 cases, only 28,000 cases.
My point is this: those are the cases of American citizens who believe they have been denied fundamental opportunities and are trying to pursue their appropriate redress through the vehicle, the EEOC, which we provided to solve these problems. The fact that this backlog continues even with the funding which was provided last year suggests, as I indicated, that justice is being denied.
We believe that additional funding will help alleviate this problem, not just in the private sector, but in the public sector where we have even more complaints of discrimination among our own Federal workers.
So I think this is a question of priorities. Should we not take the time and should we not expend the funds to provide the true rights of all American citizens to those who are being discriminated against? I think we should.
But I am not unmindful of the gentleman's comments, and I certainly respect his efforts in this regard. The State Department cut would be serious with respect to embassy security. I think that is certainly a consideration that we cannot overlook.
In light of that fact and in consideration of conversations I have had with our own ranking member, it would be my desire and intention to withdraw the amendment at this time with the hope that, during the conference committee process, we can work to provide additional funds for EEOC.
Mr. Chairman, I ask unanimous consent to withdraw the amendment.
The CHAIRMAN. Is there objection to the request of the gentleman from Maryland?
There was no objection.
AMENDMENT OFFERED BY MR. TAUZIN
Mr. TAUZIN. Mr. Chairman, I offer an amendment.
The Clerk read as follows:
Amendment offered by Mr. TAUZIN:
At the end of the bill, insert after the last section (preceding the short title) the following:
TITLE VIII--ADDITIONAL GENERAL PROVISIONS
SEC. 801. None of the funds made available in this Act may be used to administer or enforce the Uniform System of Accounts for Telecommunications Companies of the Federal Communications Commission (47 C.F.R. part 32) with respect to any common carrier that--
(1) was determined to be subject to price cap regulation by the Commission's order in CC Docket No. 87-313, In the Matter of Policy and Rules Concerning Rates for Dominant Carriers (9-19-90), at paragraph 262; or
(2) has elected to be subject to price cap regulation pursuant to section 61.41(a)(3) of the Commission's regulations (47 C.F.R. 61.41(a)(3)).
The CHAIRMAN. Under the previous order, the gentleman from Louisiana (Mr. TAUZIN) is recognized for 5 minutes.
Mr. TAUZIN. Mr. Chairman, I ask unanimous consent to yield half of my time to the gentleman from Michigan (Mr. DINGELL), the cosponsor of the amendment.
The CHAIRMAN. Is there objection to the request of the gentleman from Louisiana?
There was no objection.
Mr. TAUZIN. Mr. Chairman, I yield myself such time as I may consume.
Incredibly, all of the businesses in this great country who file accounting papers, documents with the SEC, the IRS, all our Federal agencies file under one set of accounting, the generally accepted principles adopted by the Federal Accounting Standards Board.
[Time: 19:00]
One set of companies only, one set of telephone companies only, your local telephone companies, have to file two sets of books. They have to do it because in 1935 our FCC adopted its own system of accounting and has required the local telephone companies to file under that system ever since.
Now, they have tried, to some degree, to adopt the general accounting standards, but they have not yet gotten there. The Senate just recently adopted a similar amendment saying to the FCC one set of books, one set of accounting for all the companies who file.
Incredibly, the local telephone companies' competitors file under the general accounting standards. All of the other companies in America do, but the local phone companies have to file two books. Arthur Andersen says it costs the government, the phone companies and American consumers $270 million, wasted dollars, to have this double book accounting.
Now, maybe we could make an argument for it when we used to regulate telephone companies on cost-base rates. Today, since 1991, we regulate telephone companies entirely differently, on price caps. With the new changes and modernization, it is time to deregulate this terribly regulatory burdensome double-book accounting system of the Federal Communications Commission. I urge my colleagues to adopt this amendment.
Mr. Chairman, I reserve the balance of my time.
Mr. MARKEY. Mr. Chairman, I yield myself such time as I may consume, and I rise in opposition to this amendment.
Mr. Chairman, we are in a telecommunications crisis out here on the floor. We are legislating on an appropriations bill. An emergency. A telecommunications emergency. And who is declaring the emergency? The chairman of the authorizing subcommittee. It is an emergency.
We do not have time to introduce a bill, we do not have time to have any hearings, we do not have time to give any consumer groups an audience so they can complain about this bill. By the way, the Consumer Federation of America opposes the bill, as does the Consumer Union, as does the National Retail Federation. Every business in America opposes it, as do the States, by the way, my colleagues. This is quite a coalition.
But we do not have time because we are in a telecommunications emergency. And I can tell my colleagues why. Because Senator ENZI from Wyoming attached this amendment over on the floor of the Senate. He is not a member of the Committee on Appropriations over there, he is not a member of the telecommunications committee over there. He attached this to a Senate appropriations bill, so we have to debate it with no time and no hearings. Thank God Senator ENZI has not gotten his own tax proposal. He would wrap this chamber in knots for weeks. We would have to consider what
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I can tell my colleagues what the emergency is. Under the existing accounting standards the FCC found that the telephone companies, the monopolies in America, were hiding $5 billion worth of assets that they could not find, that they had on their books and were telling regulators were there for purposes of billing consumers across the country. That is their emergency. And this accounting standard that we are going to take off the books found that $5 billion.
We are concerned about tax breaks out here? Multiply that out by 10 years, my colleagues. We are talking chump change compared to most of the things we are talking about here. So that is the emergency, my colleagues. I look forward to the rest of the debate.
Mr. Chairman, I reserve the balance of my time.
Mr. TAUZIN. Mr. Chairman, I yield myself 30 seconds.
Mr. Chairman, we did hold hearings. Every time the FCC has come up for authorization, we have discussed with them this topic. In 1985, the FCC agreed to go to the general accounting standards so that everybody had the same reporting requirements. The FCC agreed to do this in 1985 and still has not done it today. Instead, one set of telephone companies have to spend $270 million extra a year.
And what does that mean for the competitors? It means they can charge higher rates. The competitors do not want this to happen, because if it does, they suddenly have to charge lower rates for their services in competition with those local companies.
Mr. DINGELL. Mr. Chairman, I yield myself 45 seconds.
(Mr. DINGELL asked and was given permission to revise and extend his remarks.)
Mr. DINGELL. Mr. Chairman, the gentleman has demonstrated extraordinary outrage, but it does not have anything to do with the facts before us. Today, the local government requires local telephone service companies to keep two sets of books. The requirement no longer serves to protect consumers because the companies have been subject to price caps since 1991.
This amendment will leave the telephone companies responsible for general accounting principles and they will be required to function under that way. The law as it now is is simply obsolete, burdensome, and discriminatory, and costs consumers $270 million a year. None of the competitors to local phone companies, including industry giants such as AT&T, TCI and MCI WorldCom is required to keep two sets of books, nor should they have to.
What we are talking about here is a fair and even situation, one in which universal service and the benefits thereof could be made available more easily to American consumers by the $270 million that this will make available to them.
By this amendment, we will do away with so-called Uniform System of Accounts for companies that are not subject to traditional rate of return regulation. This system of accounting no longer serve to protect consumers. It is antiquated, obsolete, yet it costs over $300 million per year to maintain. Unfortunately, these unnecessary costs are borne by the public and they must be eliminated.
The Uniform System of Accounts date back to 1935. They certainly made sense when Ma Bell was subject to a different regulatory scheme--that is, traditional rate of return regulation. But rate of return regulation was done away with in 1991 for the Nation's largest telephone companies who serve over 90% of the public. This amendment simply repeals these highly burdensome accounting rules for companies that are no longer subject to this regulatory regime.
The amendment makes consummate sense. It will save Government, industry, and, most importantly, the American public, a tremendous amount of money. It will enable companies to use just one set of books--those which follow Generally Accepted Accounting Principles, or GAAP. After all, GAAP accounting systems are what Certified Public Accountants are trained to audit, and are required of all companies by the Internal Revenue Service and the Securities and Exchanges Commission. If it's good enough for the IRS, the SEC, Wall Street and the public at large, it certainly should be good enough for the FCC.
In fact, it is good enough for the FCC The FCC moved toward adopting GAAP in 1988. At that time, the FCC conformed about 90% of the Uniform System of Accounts to GAAP standards. The reason the FCC didn't go all the way in 1988 is because local telephone companies were still subject to rate of return regulation. But that is no longer the case. In 1991, the FCC permitted these companies to migrate from traditional rate of return to price cap regulation. Unfortunately, the FCC never finished the job of completely adopting GAAP accounting, even though they've had 8 years to do it.
There is no mystery about this amendment and its effect on consumers. Since these companies are now subject to price cap regulation, consumers are protected by a ceiling on what telephone companies can charge. Costs are no longer relevant, and so the minute cost detail that is maintained in a second set of books is no longer necessary. It's that simple. This amendment simply finishes the job the FCC set out to do in the first place.
Who opposes this amendment? Companies that for competitive reasons want to keep incumbent local telephone companies tied up in red tape. The companies who oppose are not required to keep two sets of books. But they certainly want the competition to suffer that burden. They resort to rhetoric about the need to keep these obsolete rules in place, such as ``local telephone rates will go up,'' or ``universal service will be jeopardized.
None of this is true. Local rates are set by the States and will not be affected by this amendment at all. The FCC can continue to collect all the data it needs for universal service calculations. However, the truth is the FCC doesn't even use actual costs, GAAP or otherwise, for calculating universal service requirements. It uses a theoretical costing model that has been the subject of much dispute for four years now, and should be the subject of another debate on another day.
Who benefits from the amendment? The Government, industry, and consumers alike. All will share in costs savings that result. The goal of the Telecommunications A ct o f 1996 w as to create more competition and consumer choice. We must unburden the players in the market and create a level playing field if that is to occur. I cannot think of a more irrelevant, burdensome, and discriminatory regulation than the Uniform System of Accounts.
When we passed the Telecommunications A ct o f 1996, the vast majority of us, on both sides of the aisle, praised it as being ``deregulatory.'' As many of you know, I don't believe it has worked out quite that way, largely due to misplaced priorities at the FCC. But this amendment is in keeping with the spirit of the act, and it is a small, but important, step in the right direction. I urge my colleagues to join me in voting yes on the Tauzin-Dingell amendment.
Mr. Chairman, I reserve the balance of my time.
Mr. MARKEY. Mr. Chairman, can you tell me how much time is remaining?
The CHAIRMAN. The gentleman from Massachusetts (Mr. MARKEY) has 2 1/2 minutes remaining, the gentleman from Louisiana (Mr. TAUZIN) has 30 seconds remaining, and the gentleman from Michigan (Mr. DINGELL) has 1 3/4 minutes remaining, and the gentleman from Louisiana (Mr. TAUZIN) has the right to close.
Mr. MARKEY. Mr. Chairman, I yield myself such time as I may consume, and hope they are consumed at the same rate of duration as the gentleman from Michigan's minutes.
Mr. Chairman, let me say that there has been no process here. There has been no opportunity to be heard. If I could, I would like to request from the subcommittee chairman that he engage in a colloquy with me, and I would request that the gentleman from Louisiana, the chairman of the subcommittee, over the next 6 weeks, call a subcommittee hearing on this issue so that witnesses of all sides could be heard on this subject.
Mr. TAUZIN. Mr. Chairman, will the gentleman yield?
Mr. MARKEY. I yield to the gentleman from Louisiana for a response to that request.
Mr. TAUZIN. Well, Mr. Chairman, let me say to my friend that this issue has already been engaged in. We have had discussions at authorization hearings with the FCC.
Mr. MARKEY. Reclaiming my time, Mr. Chairman, I would like to pose the question again. We have never had a hearing where consumer groups and the States have been able to testify on this issue. So I ask for a hearing not where the telephone monopolies are allowed to testify with their unhappiness with this accounting system that caught them bilking the public but rather with the consumer groups and the others who are also allowed to testify.
Mr. TAUZIN. If the gentleman will continue to yield, Mr. Chairman, I can answer with a statement. This amendment does not change the auditing by
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Mr. MARKEY. Well, Mr. Chairman, I asked the gentleman if he would grant a hearing before the conference is completed.
Mr. TAUZIN. The gentleman prefaced his request with statements I disagree with. I would like to correct the record, if I could, if the gentleman will allow me.
Mr. MARKEY. I will reclaim my time requesting one more time if the gentleman would grant us a hearing.
Mr. TAUZIN. The answer is that the hearings, as the gentleman knows, are set by the chairman of the Committee on Commerce. I cannot commit to any dates nor time for that hearing. The gentleman knows that at this time.
More importantly, this issue is now enjoined. This will be in the conference committee and this is our chance to strike a single blow at deregulation at a commission with a 1930s attitude.
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