Industry Lends Hand To Save Commerce

Previously absent in the debate, companies are starting up a low-level campaign to save important elements of the Commerce Department

With quiet visits, back-room discussions and mass letter-mailings, some industry officials have begun a campaign to save the Commerce Department from dismemberment by Republicans.

The effort stands in contrast to recent Hill rumblings about killing off the cabinet-level agency, which under the Clinton administration developed a technology-friendly reputation via seed programs for research and development and other initiatives.

But the new effort to save the department must overcome two of the more powerful forces on the Hill -- Senate Majority Leader Bob Dole, R-Kan., and the 73 Republican freshmen in the House -- who are urging an end to the $4.2 billion, 36,000-person agency.

"Most [industry] people are lying low... no one wants to... publicly take on freshman Republicans and a possible future president, Bob Dole," said an industry official.

The lobbying efforts are focused on preserving the department's export-boosting offices, such as the International Trade Administration, and on preserving a large cabinet office to represent industry in White House debates over welfare, health or regulatory policy, say industry officials.

However, these priorities leave many of the department's offices out in the cold. For example, there is little or no industry opposition to the privatization or transfer to other departments of the Commerce Department's offices such as the Patent and Trademark Office, the National Oceanographic and Atmospheric Administration or the Census Bureau.

Similarly, industry has not mobilized to save the Advanced Technology Program, a $500 million annual initiative to subsidize promising commercial technologies. Also, much of industry cares less about the fate of the department than about tax breaks and relaxed regulations promised by the Republican Congress.

Among the more significant lobbying efforts was a visit by Michael Armstrong, chairman of L.A.-based Hughes Electronics Corp., to Rep. Dick Chrysler, R-Mich., author of the draft House legislation that would break up the department to save $7.8 billion over five years. Armstrong was "concerned about the trade issues... [and] to make sure we maintain the positive offices at the Commerce Department," said Scott Gast, Chrysler's chief of staff.

Hughes spokesman Dave Shea said Armstrong talked with Chrysler about several issues, including the Commerce Department's fate. Armstrong argued that industry needs a voice in the cabinet, support for trade finance programs, and a central agency to oversee export rules -- as long as it is not the State Department, said Shea.

Also, three industry-backed groups have prepared letter campaigns intended to sway the Senate and House.

For example, officials at the Washington-based National Association of Manufacturers are preparing a letter campaign, as are several electronics industry associations. "Our point is that we are not necessarily out to save the Commerce Department, but we are out to save the key functions," such as trade policy, said Bill Morin, a lobbyist at NAM. Proposals to privatize the department's National Institute of Standards and Technology are foolish, he said, adding that "there is a whole host of things that they have not considered." It is needed by the government to regulate standards used for everything from software to manufacturing, he added.

"We need someone to be the advocate for business.... We really want a technology policy and a telecommunications policy to be promoted" in cabinet meetings, said Marc Pearl, a lobbyist with the Washington-based Information Technology Association of America. The association has signed the letter along with other industry groups, such as the American Electronics Association and the Computer and Communications Industries Association.

Also, 11 top industry executives serving on the president's export advisory council wrote in mid-May to the chairmen of the House and Senate budget committees, saying "proposals to eliminate the Department of Commerce can only appear to be inherently anti-business." Among the signers were George David, CEO of United Technologies Corp., Hartford, Conn.; Dennis Picard, CEO of Raytheon Co., Lexington, Mass.; Bernard Schwartz, CEO of New York-based Loral Corp. and an outspoken supporter of President Bill Clinton.

The lobbying has had little effect so far. Chrysler's office is working in an ad-hoc staff group in the House to reshuffle the dismemberment plan, said Gast. For example, the Patent and Trademark Office might not be moved into the Treasury Department, but could be converted into a semi-independent government corporation, he said.

Also, Sen. Christopher Bond, R-Mo., took to the Senate floor June 19 to defend the agency's export-promotion office, including the International Trade Administration and the Bureau of Export Administration. Both offices would be united in a new Department of International Trade under a amendment that Bond said he would offer once the Senate debates the Dole-backed bill that would eliminate the Commerce Department. Without the continued support from these offices, "we would have our head handed to us in... international trade negotiations," he said.

Agency officials have also argued that the dismemberment of the department would hurt U.S. exports. It would be "tantamount to unilateral disarmament in the global marketplace," said Commerce Secretary Ron Brown.

But according to Gast, only 5 percent of the department's employees work on international trade, and they could easily be shifted to other offices, such as the office of the U.S. Trade Representative, Mickey Kantor. "It makes no sense to have the Census Bureau, the weather service and trade functions under one roof," he said.

Brown's focus on the export issue reflects his focus in top-level issues, not the boiler rooms of the department where useful changes can be made, said Pearl. When it comes to saving the department from the worst of the Republican cuts, "there isn't a lot of leadership from the secretary... It has been a 'we need it all' attitude," he said.

Brown's leadership contrasts with the secretaries of the Energy and Agriculture departments, who cut their budgets, offices and employees to fend off even deeper cuts proposed by some in Congress, Pearl said.

Others defended Brown; Armstrong told Chrysler that Brown is doing a terrific job, said Shea.

Everett Ehrlich, the agency's undersecretary for economic affairs, says the decision to maintain everything is a reflection of the agency's importance to the economy. The various offices are "all service organizations to the business sector," he said. For example, the Census Bureau should remain in the department because its effectiveness in collecting data from businesses is dependent upon its independence from tax officials or regulatory agencies, he said.

And the department is cutting back on people and costs, he said. For example, the Census Bureau has cut about 700 jobs and is working to reduce the cost of the once-a-decade national census, which costs roughly $5 billion, he said.

The end result of this debate will remain unclear until the end of the year. But at least one industry official working to save the department is confident: "This time next year, there will still be a Commerce Department... but there will be a voluntary reduction of the number of people," he said.

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