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STATEMENT REGARDING THE DASCHLE-LIEBERMAN AMENDMENT TO THE HOMELAND SECURITY BILL
November 19, 2002
Washington, DC - U.S. Senator John McCain spoke on the Senate floor today regarding the Daschle-Lieberman Amendment to the Homeland Security bill and made the following remarks:"Mr. President, I strongly support the creation of the Department of Homeland Security. I am a cosponsor of the Gramm-Miller substitute and the President's proposal, and have consistently voted to overcome Democratic roadblocks to create a Homeland Security Department. I want this legislation to be enacted, but the House-passed bill includes a number of egregious special interest riders that should not be part of this landmark measure.
"If the legislative process had allowed us an opportunity to vote on many of the provisions Senators Daschle and Lieberman are now seeking to strike, I believe most of them would have been rejected. Unfortunately, we now find ourselves in a 'take it or leave it' situation.. This is an artificial and unnecessary construct. The Homeland Security legislation effectuates the most dramatic restructuring of the federal government in half a century. With the goal of safeguarding our citizens, it creates a 170,000 person cabinet-level department that encompasses almost every governmental function that contributes to protecting Americans against terrorism in the United States. That the Senate is being told that the House will effectively kill the entire bill if this body dare remove politically motivated riders signals to me that the other chamber's priorities have become grossly confused.
"I do not approach this vote lightly, but I must vote my conscience, just as each of my colleagues must do. I sincerely hope that upon resolution of the vote, we can move forward expeditiously with the House to resolve the differences and still send a bill to the President by the end of the week.
"Mr. President, the Daschle-Lieberman amendment would strike seven special interest provisions that were included in this 484-page bill by the House.
"Among them, the amendment proposes to strike a provision that many believe is designed to provide an earmark for Texas A&M University. Specifically, the House-passed bill requires the Secretary to designate a university-based center or centers for homeland security. However, the bill further stipulates 15 specific criteria to be used in making this designation, criteria that many suspect are tailored to describe only one university-- Texas A&M. While the provision allows the Secretary to expand the criteria, it doesn't permit the Secretary to eliminate or alter the 15 criteria set forth in the bill.
"How many colleges have 'strong affiliations with animal and plant diagnostic laboratories, expertise in water and wastewater operations, and demonstrated expertise in port and waterway security,' not to mention 12 other requirements?
"I have long opposed attempts in Congress to by-pass competitive, merit-based selection processes. There is absolutely no justification for attempting to do so in the Homeland Security bill for a function as important as the one to be fulfilled by the university-based centers.
"The Daschle-Lieberman amendment strikes a provision in the House-passed bill titled 'The SAFETY ACT', which purports to provide reasonable liability protections for antiterrorism technologies that would not be deployed in the absence of these protections.
"I believe that real harm has been inflicted on our economy by trial attorneys' abuse of our tort system. I have seen the unfathomable greed of certain attorneys who use "consumer protection" as an excuse to extort billions of dollars from corporations, and ultimately, the same consumers they claim to protect. Outrageous awards that may benefit only the lawyers have stifled innovation, kept products off the market, and hurt consumers.
"As Chairman of the Commerce Committee, I have advanced legislation to reform products liability litigation, and overseen the enactment of a law to limit litigation and damages that might have arisen from the Y2K bug. Despite its potential to kill the bill because of opposition from trial lawyers, I voted to cap attorneys' fees on the comprehensive tobacco legislation that I sponsored. I am appalled that the demise of that bill opened the door for a private settlement under which a handful of lawyers have received literally billions of dollars, and I intend to ensure that these fees are closely examined in the Commerce Committee next year. In addition, I have repeatedly voted for limitations on damages for medical malpractice.
"In short, I appreciate the need for legal reform and have long supported it. Despite this, I cannot support 'The SAFETY ACT', which never received a hearing in either chamber, and which was inserted into the House Homeland Security bill late in that chamber's process when Members decided that the government indemnification provisions previously considered would be too costly.
"This ill-considered 'SAFETY ACT', which I understand is supported by defense contractors and others seeking liability protection, does not provide reasonable limitations on liability. Intentionally or not, it appears to eliminate all liability in tort claims against Sellers for the failure of any "antiterrorism technology." Whereas previous tort reform measures have sought to limit the abuse of our system by avaricious lawyers, while protecting plaintiffs' rights to obtain a quick and reasonable award, no such balance is reflected in the 'SAFETY ACT.'
"While many of my Democratic colleagues object instinctively to liability limitations such as those in 'The SAFETY ACT', including the creation of a federal cause of action, the prohibition on punitive damages, and the requirement for proportional liability for non-economic damages, I have supported these concepts in the past, and continue to support them in this context. What I find objectionable, however, fatally so, is that 'The SAFETY ACT' was never the subject of any hearing, was never considered by a Committee in either chamber, and, perhaps as a consequence, is to confused in its wording and concepts as to be almost incomprehensible.
"While the need for liability protection for manufacturers and sellers of antiterrorism technologies may be very real, this is an issue of significant import that deserves more careful consideration. At a minimum, the 'SAFETY ACT' must be rewritten to ensure that its language is consistent with what I understand to be its intent. At present, it is not.
"One particularly troublesome provision in the 'SAFETY ACT' appears to transform a common law doctrine known as the "government contractor's defense," into an absolute defense to immunize the Seller of an antiterrorism technology of all liability. This is a dramatic departure from current law and one that does not seem to have been well thought-out.
"Currently, the 'government contractor's defense' provides immunity from liability when the federal government has issued the specifications for a product; the product meets those specifications; and the manufacturer does not have any knowledge of problems with the product that it does not share.
"While I am told that the House advocates of the 'SAFETY ACT' did not intend to provide protections for products whose specifications are not issued by the government, or which do not meet these specifications, the bill language indicates otherwise. It says 'Should a product liability or other lawsuit be filed for claims . . and such claims result or may result in loss to the Seller, there shall be a rebuttable presumption that the government contractor defense applies to such lawsuit. This presumption shall only be overcome by evidence showing that the Seller acted fraudulently or with willful misconduct in submitting information to the Secretary during the course of the Secretary's consideration of such technology under this subsection.'
"What happens if the Seller submits proper information to the Secretary, and the Secretary certifies a technology, such as a vaccine or chemical detection device, but a year later there is a gross defect in the manufacturing process, and as a result, the product doesn't work and Americans are injured or killed in a terrorist attack. The language in the bill suggests that the Seller still is not liable. But who is? Can the injured victim seek compensation under the Federal Tort Claims Act? 'The SAFETY ACT' does not say. Should they be able to? This is one of many questions affecting plaintiffs that does not seem to have been contemplated or considered when the 'SAFETY ACT' was included on the House bill.
"Clearly, Congress as a whole should work to address the legitimate liability concerns that may be keeping protective technology off the market. We should do this, however, thoughtfully, if swiftly, and ensure that the language reflects our considered intent.
"The Homeland Security bill prohibits the Secretary from contracting with any 'inverted domestic corporation', which is an American corporation that has reincorporated overseas. More and more U.S. companies are using this highly profitable accounting scheme that allows a company to move its legal residence to offshore tax havens such as Bermuda, where there is no corporate income tax, and shield its profits from taxes.
"I applaud efforts to discourage this practice. Already, at least 25 major corporations have reincorporated or established themselves in Bermuda or the Cayman Islands in the past decade. Although I understand that American tax policy has encouraged them to do so, corporations that have moved their legal headquarters offshore to avoid taxes give the appearance of ingratitude to the country whose sons and daughters are risking their lives today to defend them.
"This provision, however, has not escaped untouched by special interests. Although the Senate adopted an amendment offered by the late Senator Wellstone that flatly barred the Secretary of Homeland Security from contracting with inverted domestic corporations unless doing so was in the interest of national security, the measure being offered to us on a 'take it or leave it' basis contains loopholes you could drive a truck through -- or an entire fleet of trucks to be supplied by a relocated corporation. Although it generally prohibits the Secretary from entering into contracts with inverted domestic corporations, the House-passed measure allows the Secretary to waive this prohibition in the interest of homeland security, or to 'to prevent the loss of any jobs in the United States or prevent the Government from incurring any additional costs that otherwise would not occur.'
"The Daschle-Lieberman amendment tightens this loophole by permitting the Secretary to waive the contracting limitation only in the interest of homeland security. That is what this bill is about, it is not a jobs bill, or a fiscal belt tightening bill. The Senate determined, in adopting the Wellstone amendment, that it was important to stop more corporations from adopting corporate 'flags of convenience.' We should honor this.
"Among the most inappropriate provisions that the Daschle-Lieberman amendment strikes is a modification to the Childhood Vaccine Injury Act of 1986. The language included in the House- passed bill has far-reaching consequences and is wholly unrelated to the stated goals of this legislation. Inserted without debate in either chamber, this language will primarily benefit large brand name pharmaceutical companies which produce additives to children's vaccines -- with substantial benefit to one company in particular. It has no bearing whatsoever on domestic security.
"The National Vaccine Injury Compensation (VIC) Program, established under the Childhood Vaccine Injury Act of 1986, set up a no-fault compensation program as an alternative to legal action to compensate children injured or killed by a vaccine. The VIC Program was adopted in response to a flood of plaintiffs' suits in the early 1980s which ravaged the vaccine industry. Incentives, such as limitations on damages, were established to encourage manufacturers to continue to produce safer vaccines, while education programs and an adverse reaction reporting system were established to ensure prevention of future vaccine injuries.
"The 1986 law did not define 'vaccine,' and suits emerged between families and manufacturers of vaccine additives -- many of which are still ongoing. The language contained within the House- passed Homeland Security Act would modify the definition of a 'vaccine' to include additives. Originally contained within a well-rounded bill written by my friend, Senator Frist, this language served a sound purpose. However, I am concerned that the passage of these select provisions which benefit pharmaceutical manufacturers will eliminate the incentive to continue negotiations on the important reforms within Senator Frist's bill which has been negotiated in the HELP Committee for close to a year. Additionally, unlike the bill in Committee, this language would intervene in ongoing litigation without modifying the statute of limitations for bringing a claim under the Vaccine Act, and in so doing, would leave families of some injured children with no available recourse.
"As I stated earlier, Mr. President, I am not opposed to reasonable legal reform. I support a comprehensive reform package such as the bill sponsored by Senator Frist, and hope that such a measure will pass early in the next Congress. It is wrong, however, to cherry pick provisions beneficial to industry and insert them in a Homeland Security bill and to leave for another day those provisions that protect children.
"Special interests have no place in any congressional action, least of all one of this magnitude. For this reason, I am compelled to support the Daschle-Lieberman amendment. This Administration has worked tirelessly with the House and Senate to produce an extraordinary restructuring of government to better protect the American people. They have accomplished an amazing feat. Legislation of this gravity should not be sullied by a few special interest riders. I urge my colleagues to join me in striking them."
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