tury, that there has never been a greater need for the work of the Department of Commerce.

Keeping America strong in the new global economy is a noble and challenging mission. If you repose your trust in me, I am prepared to devote every ounce of my energies in my commitment to justify that decision.

I look forward to your questions and to an open, productive partnership with you on behalf of the American people. Thank you very much, Mr. Chairman.

[The prepared statement and information of Mr. Daley follows:]

STATEMENT OF MR. DALEY

Mr. Chairman, I am honored to be here today. In the weeks since the President nominated me to become Secretary of Commerce, I have reflected on this opportunity and have taken great pride in knowing that my appointment affords me the chance to continue my family's long-held embrace of public service. I am grateful for the chance to serve the nation-workers, entrepreneurs, businesses large and small, diverse communities-as well as the President.

As we move into the last Administration of the 20th Century, we are in the midst of a still-to-be-completed journey. We are remaking the world we do business in even as we are redefining our place in it. And I see my nomination to the Commerce Department this way: in a new world, governed by new rules, America has made giant strides to maintain our competitiveness and prosperity; but our work is not done and the Commerce Department has much to do to keep us on the global economy's cutting edge.

To make sure the Commerce Department fulfills its vital mission, I intend to give you and your colleagues, to give business leaders, and to give our trading partners around the world every confidence in the Department-to guarantee our role is indispensable and our credibility is beyond question. As eager as I am to get to work, I am equally humbled by the possibilities for this Department to do honorable, meaningful work for America.

The assumptions that governed our growth and place in the post-war world no longer apply. There was a time when we could sustain our growth and improved standards of living with our domestic economy, but today our fortunes rise and fall with economic and trade decisions far afield. It is no longer just the stock market that is affected by economic news and decisions from around the world; American businesses from Fortune 500 companies to the smallest start-ups face competition from economies in Europe and Asia as well as emerging powers in Latin America, Africa, and the Middle East at the same time they are finding new opportunities there.

Nearly one-fourth of our GDP is now export-dependent. More than eleven million workers owe their jobs to the business their employers do beyond our shores. My predecessor, Mickey Kantor, was fond of pointing out that a market study of the United States today would show we account for four percent of the world population, and we have a fairly low birth rate. That means our future standard of living will be built on the ties we have with the other 96 percent of the world and the opportunities we create there.

The President clearly laid out a plan for America's success in the global economy. In the first weeks of his Administration, he explained the United States would welcome our competitors to do business here on fair and open terms but would expect the same access to their markets. The Administration has signed over 200 trade agreements with partners around the world-invested in developing cutting-edge technology-worked to manage our natural resources smartly-boosted exportsproduced better and more useful economic information-and made rural and urban communities players in our economic expansion.

Because of these decisions, and thanks to commitments made by business leaders and policy makers-because we have embraced this global economy-America is leading the global economy. We have returned to the top of the World Economic Forum's list of the world's most productive economies for three years in a row. Today we are the world's greatest economic power-the greatest exporter, the finest innovator, the engine that drives the world's prosperity.

A few years ago America seemed to be stagnating. Our competitors in industries as diverse as autos, steel, high-tech, banking, and aerospace were on the worldwide field fighting for business, contracts, and opportunities while we were on the sidelines arguing whether to get into the fight. Industries in Japan, Taiwan, Germany,

and elsewhere were investing in new technology while we lamented the loss of American manufacturing and wondered how others were making better use of the technology we invented. Foreign economies boomed while we were stuck debating whether or not growing budget deficits even mattered. Conventional wisdom said our Asian and European competitors were eating our economic lunch and an important book, The Rise and Fall of the Great Powers, speculated that America was on the decline. We were rich in foreclosures and bankruptcies, poor in confidence. But those days are now gone.

Today, the American economy is healthy, vigorous, and growing. Our unemployment rate is as low as it's been in a quarter century. New business creation and home ownership are as high as they've been since the early '80s. A budget deficit that was exhausting our savings and growth has been cut in half in the past four years. And our economy's productive capacity has grown at its fastest rate in 25 years. Now we see R&D, technology, and education as investments in our future with the payoff being entrepreneurship, jobs, and paychecks. And we set the pace the rest of the world follows in everything from traditional industries like automaking and agriculture to aerospace, telecommunications, and high-tech.

The coming Century-which the President has called the "Age of Possibilities”will be built on the things Commerce does best. I know some people see no place for the Department in a modern economy. I simply do not agree. In a more and more competitive world, our nation needs coherent and unified economic, technology, trade, and development policies.

We have two choices as we face the realities of an interdependent global economy: we can sit on the sidelines and argue about government's role or we can be aggressive, pro-active, and ambitious. Realize though that while we debate, our competitors will be busy building business and commercial ties around us. German Chancellor Helmut Kohl recently traveled to Russia while Canadian Prime Minister Chretien last week led a trade mission to Korea, reminders that others will be actively seeking export opportunities regardless of our decisions.

The Commerce Department is where America's potential and promise come_together, where our future jobs are created and our economic growth is nurtured. The disparate elements of Commerce come together for one mission: to enhance and maintain America's competitive posture.

Commerce helps open new markets and insures our partners comply with the promises for open and fair trade we've agreed to. And as more players seek a place on the international trade stage we also advocate, through the Department's Advocacy Center and trade missions, on behalf of American firms and workers to make sure they gain footholds in the most dynamic markets and projects. Our competitors do not let their businesses go it alone in the world and neither should we. At the same time, we shouldn't leave our workers at risk from unfair trade practices. Inscribed over a Commerce Building door is Benjamin Franklin's counsel that, "Commerce among nations should be fair and equitable." That is a standard I will adhere

to.

Our exports have grown by 34 percent since 1993, creating 1.4 million new jobs. The Commerce Department, through the activities of the International Trade Administration, puts $250 million into export promotion resulting in over $40 billion in overseas sales. Let me repeat that: a $250 million Commerce Department export promotion investment delivered a more than $40 billion overseas sales return. Additionally, we freed tens of billions of dollars in high-tech exports from obsolete regulations without jeopardizing our national security. Building on these achievements, I want to insure the high-wage jobs promised by open markets and global competition become a reality.

As the transition from manufacturing to information and technology keeps driving economic growth in the world, Commerce places a premium on the competitive advantage our nation has built with cutting-edge technologies. We must continue developing new technologies and encouraging business and industry to adopt them for commercial applications. To do anything less-especially considering Japan plans to double its science and technology budget by the year 2000; China to triple its own R&D investments in that time; and joint E.U. technology spending will double our own in five years-is to back-track on much of the competitiveness and productivity gains that did so much to get our economic house in order in the last decade. Commerce programs like Manufacturing Extension Partnerships, the Advanced Technology Program, and the Baldrige Award for Quality Management all support and foster the private sector's technology ambitions.

In an information age, reliable and accurate analysis is as valuable as any commodity. The varied and detailed economic analyses provided by Commerce's Economics & Statistics Administration are a true market study of America. And given that the business decisions that create economic growth-investments, expansion,

entrepreneurship-all depend on good, reliable information, this is yet another essential tool for a thriving US. economy. I want the 2000 census to be the best in our nation's history and I want to keep what one French industrial leader recently said "Good economic data is one of the reasons North American firms are beating us..."—as an ongoing competitive advantage.

Managing resources and weather data falls to the National Oceanic & Atmospheric Administration at Commerce. At first glance this may be an area that doesn't fit into the Department's mission. But fisheries, which NOAA has a big role in managing, are a $20 billion-business; and a half-trillion-dollars in U.S. trade moves by sea, requiring weather and tidal information. Consider multi-billion dollar industries in agriculture and air travel, which also rely on NOAA services, and it is clear yet more jobs and paychecks depend on Commerce through NOAA. I want to enhance resource management and environmental stewardship so that diverse segments of our economy-from farming and fishing to shipping and air travel-can be sustained and expanded.

Today, while the fifty largest U.S. exporters account for thirty percent of our nation's merchandise exports just twelve percent of our small businesses export at all. At the same time, forty percent of American workers are enrolled in schooling or training and we now have a record number of kids in college. To me, this combination is not unrealized potential, it is opportunity for economic growth. We should double small business exporting in the coming years with these skilled and educated Americans supplying the ambition and reaping the rewards.

But this promise can only be fulfilled if the benefits of a prosperous America accrue to every American. If some segments get ahead while others stagnate, we will squander our strength and surrender our competitive advantages. Education, job training, economic development, even access to the Information Superhighway are the keys to expanding opportunity for all Americans so more of our nation has a productive role in our economy. Through EDA and MBDA we are strengthening local economies with Empowerment Zones, defense conversion, and university partnerships. Knit these together with Export Assistance Centers and Manufacturing Extension Partnerships around the country to expand exports and make technology more accessible, and the global economy has a place in every community, rural and urban. I want to match economic development efforts with exporting and technology to create real opportunity for every person, family, neighborhood, and business in the country.

Collectively, these threads of American economic security-technology, trade, and information are woven into the very fabric of our prosperous future by spurring development, entrepreneurship, and growth in every community across the country. That is how I view Commerce's mission: keep America prosperous at home by keeping us innovative, vigilant, and strong around the world.

In the end, the result of this global competition for exports and openings will decide where jobs will be in the next Century and which nations will thrive. So deciding the function or vitality of the Commerce Department is not an academic exercise or a policy debate taking place in a vacuum. Yes, we can and should consider how Commerce does its job. And I am happy to discuss how the Department can be most effective and efficient as both a resource in the global economy and an asset to balancing the federal budget. I know that balancing the budget is a top priority shared by you and the President, and the Department of Commerce has done its part by cutting 5,000 employees and eliminating hundreds of needless regulations while saving an estimated $2 billion over the next ten years by eliminating the NOAA Commissioned Corps and the Travel & Tourism Administration, and consolidating some projects with NASA and the Pentagon. But there is more at stake here than budget priorities, and let us not lose sight of the fact that while we argue others will aggressively fill the void we will leave in the global marketplace.

My management style is very clear-cut: I place a priority on return on investment, on prize need for savings,

for

for strategic thinking. I believe Commerce should be a model for the way government should work and a model for how American firms should act-managing resources and employees to do more with less. My management philosophy is built on accountability, pragmatism and results. I am committed to continued improvement and I expect Commerce to pay very real dividends for the American economy while being an asset in our drive for a balanced budget. In the end, I believe every program at Commerce has to justify itself every day.

The men and women who previously held this position-my friends Ron Brown and Mickey Kantor, and people like Pete Peterson, Malcolm Baldrige, and Elliot Richardson-have set the bar high for an active, aggressive, accomplished Commerce Department. I worked with both Ron and Mickey on NAFTA, I know their

skills and the contributions they have made to America's economic resurgence, and I am flattered to be considered as their successor.

I am eager to get to work as the 32nd Secretary of Commerce because the success of the Department has never been more important to this country. I truly believe the Secretary of Commerce must never forget he serves the President, the Congress, and ultimately the American people as a catalyst so that our nation's security and prosperity carry us into the 21st Century with every reason for confidence and hope. am eager to take your questions and to work closely with you so that the Department of Commerce continues to help America stay strong as we stay at the lead of the global economy. Thank you.

The CHAIRMAN. Thank you very much, Mr. Daley, and if it is agreeable to the members of the committee we will have a 7minute questioning period, and we will have additional rounds as necessary for questioning.

Let me first, Mr. Daley, applaud your two steps that you have just outlined to the committee concerning the trips, the trade missions, and the reduction in political appointees.

Those are concerns that many of us have had, especially the first step.

I believe you have outlined, and others have outlined your qualifications and fitness to serve, and you have in broad but excellent terms outlined your plans for the Department and your policies, and we look forward to a long and productive working relationship with you as we face some of the issues that are of the utmost importance to the future of this Nation.

Many are concerned about the politicization of the Commerce Department, allegations that are well-known to you and me and members of the committee concerning the activities of one of the employees of the Commerce Department will be the subject of investigation not by this committee but by another, but I am sure that you and I and every Member of the Congress do not want to see a repetition of that, nor allegations of this nature to arise again. It not only harms the credibility of the Department of Commerce, but it harms the reputation of all of us who indulge in public service, so I am pleased to hear of the measures that you are taking. There have been allegations concerning many of these activities which, as I said, will be handled by other committees, but clearly Mr. Daley you have an additional responsibility to make sure that any taint of politicization or illegal behavior is eradicated as quickly as possible within your Department. You have shared your commitment to me to do that, and I certainly take you at your word and have every confidence that you will do so.

Let me just follow up just a second with a couple of additional questions. In the past, the Department of Census was forced to conduct a post census correction process in order to rectify miscounts. Results of that correction showed that some States would have been qualified for additional representation in the House of Representatives. Can we look forward to working with you in shaping legislation so that every State has the proper representation in the House of Representatives which is our obligation under the census? Mr. DALEY. Well, Mr. Chairman, obviously the 2000 census is most important to the Nation. We have begun a program in the Department of Commerce. I think it addresses the key concerns. We must account for every American who is in our country in the year 2000, every citizen, and we must be concerned about the cost of this census. We have laid out a program, the Department of Com

merce, and we are most sensitive to both of those concerns. I met with Charles Shultze of the National Academy of Sciences Blue Roobod Advisory Panel. He is really helping us put together our

gram. We look forward to working with you and the other membeca of the committee. This is most important, obviously, to the Nasion, and we think we have a program that will correct the prob'es that develop after the 1990 census.

The CHAIRMAN. Thank you.

According to the Cato Institute the Department of Commerce alwa.ca approximately $2.373 billion in business subsidies in nine Arama that engage in corporate welfare. At the same time, we 44king average citizens to do more with less. I do not believe what we should subsidize businesses that do not need such subedition. I would like, Mr. Daley, for you to submit to the commitve within 90 days a list of all business subsidies allocated by the Nurement and your suggestion for what subsidies and programs vai be eliminated. Could we have that assurance?

A PAURY. Mr. Chairman, we will submit to you the list of proscheme and actions. We view our programs, Mr. Chairman, as inVements in the future and not corporate welfare, but I would be hy to subunit that to you within 90 days.

The information referred to follows:]