Gephardt Speaks to IT Priorities; GOP Says Talk Is Cheap

By Anne Gallagher, Contributing WriterHouse Minority Leader Richard Gephardt has made some big promises on high-technology policy that will only turn to legislation if Democrats and Republicans cooperate in the remaining months of the 106th Congress.But judging by one GOP leader's tepid reaction, Gephardt has his work cut out for him.Congress can take several steps in the upcoming months to ensure the tax and regulatory system allows the technology industry to continue to expand and prosper, fostering innovation and new productivity enhancing technology, Gephardt said. The government also can help by promoting education and training to take advantage of the millions of new jobs being created by the industry, he added. "Many people in the technology industry have the attitude that Washington is completely irrelevant to what is happening in the tech revolution," Gephardt, D-Mo., told IT professionals at a conference in Northern Virginia last month. "But being in the Washington area, you probably understand better than many others in the high-tech industry around the country how government policy intersects with the interests and the future of the industry."The government, he said, should not be the leader in this high-tech revolution, but it does have a role by pursuing "wise, prudent policies" to keep the technology revolution on track. On some specific legislative initiatives, Gephardt noted that lawmakers are in the midst of a critical debate on the taxation of e-commerce and are beginning to see progress on "something resembling a national consensus on key points surrounding the issue." All parties agree there should be no new tariffs or taxes on Internet services, he said. But the more difficult question is whether a state government should be allowed to collect sales taxes on e-commerce transactions made between residents and companies residing in other states."It is clear there is not consensus on this issue right now. The commission created by Congress to review this issue is currently unable to reach a required two-thirds majority to issue a binding recommendation on the issue to Congress," Gephardt said. "Therefore, it is critical to extend the soon-to-expire moratorium in order to allow a consensus to develop."Congress must extend the no-tax moratorium beyond fall 2001, he said. "I would support extending the moratorium until October 2003 to allow the forces on both sides of the issue to reach consensus," Gephardt said. "And I am ready and willing to facilitate discussions with both sides of this issue to reach a solution in their mutual best interest." Congress also must do more than institute a "quick fix" by raising the existing ceiling on H-1B visas to fill technology jobs and focus in addition on educational programs within the United States, Gephardt said. The House Minority Leader's platform drew skeptical reviews from Republicans. GOP House Conference Chairman J.C. Watts Jr. of Oklahoma said Gephardt and the Democratic leadership has presented, rather than solved, many of the IT community's problems."I sincerely hope House Democrats will work with Republicans to promote the continued growth of the high-tech industry," Watts said in a statement responding to Gephardt's speech. "However, if history is any guide, the Democrat leadership will spend more time blocking important legislation and playing political games than doing the heavy lifting to enact top high-tech priorities."Republican leaders have supported policies to help industry, while Democrats have been absent on those policies, Watts said. For example, Democrats could be doing more to support the high-tech industry's top priority of the year: granting permanent normal trading relations status to China, he said."House Minority Whip David Bonior [of Michigan] is fighting to defeat [permanent normal trading relations] for China, and Rep. Gephardt is nowhere to be found on the issue," Watts said. "But [his] silence will speak volumes to American high-tech companies and workers about the Democrats' lack of support for top priorities of the new economy."Gephardt said he understands industry's concerns about granting permanent trade status to China."Not only is China a massive potential market for U.S. technology firms, but increased trade in technology also holds the promise of bringing democratic change to China," Gephardt said. "Unfortunately, introduction of the Internet in China has coincided with backsliding on human rights and continued problems with protection of intellectual property rights by the Chinese government. The same forces that ignore software piracy tolerate and perpetrate human rights abuses. "We must make sure [that permanent normal trading relations] provides the right incentives for China to move toward the rule of law, to protect both personal and property rights," he said.Gephardt also stressed that lawmakers must work with the Clinton administration to reduce export controls on supercomputers and shorten the congressional approval period from 180 to 30 days."For the long term, I believe the whole export control regime must be overhauled to reflect our era of rapid technological change," Gephardt said.