Page images
PDF
EPUB

powerplant down in their system, and they would like to have the control of that.

Then, Mr. President, let us notice how careful Representative HINSHAW was, as Representative HINSHAW. Of course, but reported at pages 36 and 37 of the hear

then you have a total estimated AEC cancellation cost in here of $139,630,000.

ings. I ask unanimous consent that the excerpt from the hearings be printed in Representative HINSHAW. And it is nearly the RECORD at this point as a part of my

Mr. BOYER. That is right.

all the cost of the plant.

Mr. BOYER. No, the cost of the plant-
Representative HINSHAW. Half of it any-

way.

Mr. BOYER. The investment here is roughly about $400 million.

Mr. ANDERSON. Mr. President, we have been hearing a great deal about windfall profits on housing deals. The senior Senator from Colorado [Mr. JOHNSON] sensed that there might be some windfall profits in this private enterprise deal, and from page 16 of the hearings, I quote his question, and Mr. Boyer's answer:

Senator JOHNSON. Suppose Du Pont goes in there the day after you cancel the contract and they sell all their power to Du Pont. They have received the money from you that they were supposed to have lost, which they have not lost, and they are getting from Du Pont the cost of the operation. So they have a windfall, have they not? Mr. BOYER. Right.

Mr. President, in other words, they could sell every kilowatt of power at exactly the same price at which the Government had intended to buy it, and they would still get $57 million from the Government, and still sell the power and still get all that money. If that is not a windfall of substantial size, I do not know what it is. In the case of the two plants already built it could run to $400 million.

I say that before authority is given for the plan of the Dixon-Yates group, if such authority is to be given, we ought to find out what they are going to do in this matter. If they are going to sell this power, in case there is a cancellation by the Government, at the same rate the Government expected to pay for it, they are not financially damaged because of the Government cancellation, and they should not be able to receive the $40 million of their $100 million. It is not their $100 million, because they put up only $5 million. The rest of the money would be obtained because of the Government guarantee. They could sell every kilowatt of the energy at prices at which they expected to sell it to the Government, and get all the money from the new purchaser, and $40 million besides, on their $5 million investment, on which they received a return of 9 percent, with the taxes paid to the Government. If that would not be a windfall, I do not

know what it would be.

Let us consider this statement by the General Manager of the Atomic Energy Commission at the time this legislation was being considered, which appears at page 22 of the hearing:

Mr. BOYER. If you notice the language we are proposing: "The Atomic Energy Commission is authorized in connection with the construction and operation of the Oak Ridge, Paducah, and Portsmouth installations of the Commission, without regard to section 3679 of the Revised Statutes."

In other words, it is limited to the power requirements for those three installations. It is not a wide-open authority.

remarks.

There being no objection, the excerpt from the hearings was ordered to be printed in the RECORD, as follows:

Representative HINSHAW. Mr. Chairman, this appears to be an authorization to the Atomic Energy Commission existing in law from now on to enter into new contracts and revise contracts, and so forth, in connection with supplying of power for any activity the Commission undertakes.

I do not think that the committee is ready to go that far, that they have been considering the power situation in the vicinity of Portsmouth, and also in the Tennessee Valley, but I doubt that the committee is ready to give a carte blanche over the entire system as being presently operated by the Atomic Energy Commission, and to be unlimited as to the dates, the times in which such contracts can be entered into, and their termination, the cancellation costs or anything else.

That is all I have to say. I personally would object to such legislation on that ground.

Chairman COLE. I take it that your point is that you object to the omission of specific reference which was contained in the bill as originally introduced to the granting of this authority in connection with Oak Ridge, Paducah, and Portsmouth.

Representative HINSHAW. Certainly. And also a time limit.

Chairman COLE. Let us get through with one thing at a time. Would your objection be met if those specific installations were again enumerated?

Representative HINSHAW. I think the legislation ought to contain a limitation that it applies to these particular contracts that are to be issued and which have been brought before the committee and the committee has

had a chance to look at and criticize. That

is not saying anything about any future con-
tracts that may be entered into.

The committee has, or will, I presume,
by this action given approval to these con-

tracts that have been entered into. As to
future contracts and termination costs, I
think we would be under very great criticism
on the part of the Congress if we should
enter into them in blank.

Mr. ANDERSON. Representative VAN
ZANDT, who, with Representative HIN-
SHAW, was one of the early members of
the Joint Committee on Atomic Energy,

was not satisfied. He wanted to tie down

Mr. BOYER. The idea is to have language here which would satisfy the contractor and the insurance companies, and not have to tie up the large sums that might be required to cover the cancellation.

Representative VAN ZANDT. Is there anything in the basic Atomic Energy Act that provides that you bring these contracts here to Capitol Hill for review by this committee?

Mr. BOYER. Well, we have always been faced with the problem of getting the money for these contracts that we execute.

Representative VAN ZANDT. That would be reviewed by the Appropriations Committee? Mr. BOYER. That is right.

Representative VAN ZANDT. This committee would also make a review of it in the preliminary study we make of the appropriation tions Committee? requests before they go to the Appropria

Mr. BOYER. Yes, sir. The record will show that we pointed out the last time we were up here that we are here at the suggestion of Senator SALTONSTALL and Congressman PHILLIPS, and we introduced this language before. Mr. PHILLIPS' committee, and both he and Mr. SALTONSTALL felt that it should be referred to this committee since it was essentially legislation and not appropriation of funds.

Representative VAN ZANDT. The reason I asked the question was in connection with Mr. HINSHAW's statement on the bill, that we have actually reviewed every contract that you make.

Mr. BOYER. No; you do not review every contract we make, because that would keep the committee rather busy.

Representative VAN ZANDT. I mean contracts of this size, because if my memory serves me correctly, you did come up here and discuss these contracts with us.

Mr. BOYER. We came up and discussed with you the need for the power and this 25-year contract to avoid the investment of large sums of Federal money for powerplants.

Representative VAN ZANDT. Would not you do that in the future?

Mr. BOYER. I think this type of contract we have to come up and get the funds appropriated or language.

Representative VAN ZANDT. When Mr. HINSHAW made his point, I thought probably his point would be taken care of by the fact that we do have a chance to review these contracts because you are bringing them to us and you ask our opinion of them.

Senator PASTORE. Does this review take place before the contract is consummated or after it is consummated?

Mr. BOYER. What Mr. VAN ZANDT is saying is that, in effect, you are reviewing it now, because the last time we appeared before the committee, we went into considerable detail as to the nature of the cancellation portions of the contract.

Representative HINSHAW. If this bill is passed, it is the last time we will review it, and there will never be any other review or

the promise that the law would be used
for providing power for Oak Ridge,
Portsmouth, and Paducah only. There- requirement for review in 100 years.
fore he tried to obtain answers to his
questions and to develop a legislative
history. I ask unanimous consent that
his questions and the answers be included
in the RECORD at this point.

was ordered to be printed in the RECORD,
There being no objection, the excerpt
as follows:

Representative VAN ZANDT. Mr. Chairman,
I wonder if a member of the staff could tell
us in a few words what section 3679 of the
revised statutes provides?

Chairman COLE. Mr. Boyer can answer that.

Mr. BOYER. That is the antideficiency act, which says you shall not enter into an obligation without the funds to pay for the obligations you assume.

Representative VAN ZANDT. This bill would set those limitations aside?

Chairman COLE. Not necessarily. Representative HINSHAW. There is no limitation on that act.

Chairman COLE. You are forgetting the provision of the law which says the Commission shall keep the committee informed on everything it does.

Representative VAN ZANDT. Why not write it in here, "subject to review of the committee"? We write it in in other bills, in the Armed Forces Committee.

Chairman COLE. I am sure the Commission does not have any objection to reinserting specific reference to Oak Ridge, Paducah, and Portsmouth.

Mr. BOYER. None whatever.

Mr. ANDERSON. I also ask unanimous consent that a further excerpt from page 41 of the hearings, be printed in the RECORD at this point.

There being no objection, the excerpt was ordered to be printed in the RECORD, as follows:

Representative VAN ZANDT. Mr. Chairman, could we insert language in this bill that would make this particular type of a contract subject to review by this committee?

Dr. SMYTH. Mr. VAN ZANDT, you have written in Oak Ridge, Paducah, and Portsmouth, and any further extension of those plants would certainly presumably come to this committee for general discussion and approval. It does not appear to me to be necessary or desirable to try to get the specific contracts into the bill.

Representative VAN ZANDT. In the future we may have other installations, or another Paducah.

Dr. SMYTH. Yes, but as I understand it, the way the bill is now modified, Oak Ridge, Paducah, and Portsmouth are to be inserted; is that not right?

Chairman COLE. Yes.

Representative VAN ZANDT. Then the bill as written will restrict it to Paducah, Oak Ridge, and Portsmouth.

Mr. ANDERSON. Mr. President, I have included this material only for the purpose of making it available in somewhat easier form for Members of the Senate when they start the discussion of this project in the debate tomorrow.

I think it is extremely important that a great deal of care be utilized in the consideration of the bill. Of course, there are many other matters which will require careful consideration, but surely we must be careful not to set up any cancellation rights which will permit people who have invested $5 million to recover $40 million in damages from the Government, when they have not been financially damaged. I believe it is an extremely important point to which Congress, I am sure, will wish to devote a great deal of attention.

[blocks in formation]

Brig. Gen. Millard Lewis, 561A (colonel, Regular Air Force), United States Air Force. Brig. Gen. Joe William Kelly, 612A (colonel, Regular Air Force), United States Air Force.

To be brigadier generals

Col. James Keller DeArmond, 257A, Regular Air Force.

Col. John Gordon Fowler, 477A, Regular Air Force.

Col. Norman Delbert Sillin, 501A, Regular Air Force.

Col. James Presnall Newberry, 530A Regular Air Force.

Col. Donald Linwood Hardy, 618A, Regular Air Force.

Col. Laurence Browning Kelley, 651A, Regular Air Force.

Col. Harley Sanford Jones, 828A, Regular Air Force.

Col. Lester William Light, 887A, Regular Air Force.

Col. Jermain Ferdinand Rodenhauser, 933A, Regular Air Force.

Col. Jack Roberts, 1134A, Regular Air Force. Col. Noel Francis Parrish, 1143A, Regular Air Force.

Col. Charles Milton McCorkle, 1224A, Regular Air Force.

Col. Bertram Cowgill Harrison, 1425A, Regular Air Force.

Col. Edwin Shepard Chickering, 1474A, Regular Air Force.

Col. Harold Ernest Watson, 1520A, Regular Air Force.

Col. Kenneth Hodder Gibson, 1775A, Regular Air Force.

Col. Keith Karl Compton, 1849A, Regular Air Force.

CONFIRMATIONS

Executive nominations confirmed by the Senate July 13 (legislative day of July 2), 1954:

FOREIGN OPERATIONS ADMINISTRATION To be members of the Public Advisory Board, Foreign Operations Administration Clement D. Johnston, of Virginia. Mrs. Helen Chapman, of Illinois. Harold C. McClellan, of California. Mrs. Percy Maxim Lee, of Connecticut. ATOMIC ENERGY COMMISSION Herbert Bernard Loper, of Nebraska, to be Chairman, Military Liaison Committee to the Atomic Energy Commission.

COLLECTOR OF CUSTOMS

Merrill D. White, of Florida, to be collector of customs for customs collection district No. 18, with headquarters at Tampa, Fla.

HOUSE OF REPRESENTATIVES

TUESDAY, JULY 13, 1954

The House met at 12 o'clock noon. The Chaplain, Rev. Bernard Braskamp, D. D., offered the following prayer:

Eternal and ever-blessed God, may our life in the hours of this new day be radiant with the realization of Thy presence and power which we so greatly need.

Grant that we may have the leading of Thy wise and gracious spirit in all our plans and labors to solve the difficult and perplexing problems of human relationships.

May we never go forth in our own wisdom and strength, but make us eager to seek divine counsel and guidance.

Inspire us with a confidence and courage, which knows no defeat, as we daily dedicate ourselves to the task of en

throning the spirit of peace and good will among the nations of the earth. Hear us in Christ's name. Amen. The Journal of the proceedings of yesterday was read and approved.

MESSAGE FROM THE SENATE

A message from the Senate, by Mr. Ast, one of its clerks, announced that the Senate has passed, with amendments in which the concurrence of the House is requested, a bill of the House of the following title:

H. R. 7664. An act to provide for the development of the Priest Rapids site on the Columbia River, Wash., under a license issued pursuant to the Federal Power Act.

The message also announced that the Senate had passed bills of the following titles, in which the concurrence of the House is requested:

S. 190. An act to establish a basic administrative workweek and pay periods of two administrative workweeks for postmasters, officers, and employees of the postal field service, and for other purposes;

S. 3028. An act to require the Postmaster General to reimburse postmasters of discontinued post offices for equipment owned by the postmaster; and

S. 3655. An act to provide that the Metropolitan Police force shall keep arrest books which are open to public inspection.

The message also announced that the Senate insists upon its amendments to the bill (H. R. 6725) entitled "An act to reenact the authority for the appointment of certain officers of the Regular Navy and Marine Corps," disagreed to by the House; agrees to the conference asked by the House on the disagreeing votes of the two Houses thereon, and appoints Mr. SALTONSTALL, Mr. CASE, Mr. DUFF, Mr. BYRD, and Mr. STENNIS to be the conferees on the part of the Senate.

The message also announced that the Senate insists upon its amendments to the bill (H. R. 9242) entitled "An act to authorize certain construction at military and naval installations and for the Alaska Communications System, and for other purposes," disagreed to by the House; agrees to the conference asked by the House on the disagreeing votes of the two Houses thereon, and appoints Mr. SALTONSTALL, Mr. CASE, Mr. DUFF, Mr. BYRD, and Mr. STENNIS to be the conferees on the part of the Senate.

The message also announced that the Senate agrees to the report of the committee of conference on the disagreeing ment of the House to the bill (S. 3378) votes of the two Houses on the amendentitled "An act to revise the Organic Act of the Virgin Islands of the United States."

SPECIAL ORDERS GRANTED

Mr. ABERNETHY asked and was given permission to address the House tomorrow for 45 minutes, at the conclusion of the legislative program and any special orders heretofore entered.

Mr. BYRD asked and was given permission to address the House tomorrow for 20 minutes, at the conclusion of the legislative program and any special orders heretofore entered.

TAKING THE GOVERNMENT

OUT OF BUSINESS

Mr. OSMERS. Mr. Speaker, I ask unanimous consent to extend my remarks at this point in the RECORD.

The SPEAKER, Is there objection to the request of the gentleman from New Jersey?

There was no objection.

Mr. OSMERS. Mr. Speaker, the House Committee on Government Operations will hold 4 days of hearings, beginning on Wednesday of this week, on bills which have been introduced by the chairman [Mr. HOFFMAN of Michigan] and by me for the express purposes of establishing a policy against Government being in competitive business and of providing a method under which the Federal Government's encroachment into the fields of private enterprise may be terminated, or at least held within reasonable and sensible bounds and proportions.

Mr. HOFFMAN's bills are H. R. 9834 and 9835. My bill is H. R. 8832. The aim and intent of all three is the same; the mechanics of operation differ in slight

degrees.

Mr. Speaker, the preservation of our free economy is dependent, to a very considerable degree, upon the elimination of the tax-free competition that has been established over the years by the Federal bureaucracy, and that continues to grow and expand because bureaucracy itself never sleeps and never dies.

We

The Subcommittee on Intergovernmental Relations of the House Committee on Government Operations has spent years in studying this situation. have uncovered astonishing and abominable invasions of business by Government financed and operated enterprises-and yet we have only scratched the surface and we know it. You might think, Mr. Speaker, that the mammoth Federal budget would disclose these business investments and expenditures. It does nothing of the sort-and I doubt if we in Congress will ever know the extent of the Federal commercial and financial operations unless a bill is passed requiring the various agencies to report fully each year.

Nor shall we be able, in my opinion, Mr. Speaker, to put a halt to the constant expansion of Government in business until a reviewing board, such as I have suggested, is established with powers to watch and to veto.

with

The chief reason for taking government out of business is to protect and encourage the taxpaying businessmenbig and little-who make the Federal Government possible through tax payments. Second, if we sell all of Government's businesses, as we have sold the Mississippi Barge Lines and the Muscatine alcohol plant, we shall get a great sum of money which can be used to reduce the national debt and cut, by half a billion dollars a year or more, the interest payments that the taxpayers now make on the debt. Third, we shall collect over a billion dollars a year in additional income taxes from the companies that take over these Government-owned and Government-supported affairs. And fourth, we shall save hundreds of mil

lions of dollars in annual appropriations to these nontaxpaying, tax-eating activities.

Mr. Speaker, I commend your attention and that of the Members, press and public to the testimony that will be given by representatives of labor and business at the Government Operations Committee's hearings beginning on Wednesday. You will hear the great American free enterprise system speaking, the system ot which this administration has pledged its support.

DUTIES AND FUNCTIONS OF SMALL

BUSINESS ADMINISTRATION

Mr. HILL. Mr. Speaker, I ask unanimous consent to extend my remarks at this point in the RECORD.

The SPEAKER.

Is there objection to the request of the gentleman from Colorado?

There was no objection.

Mr. HILL. Mr. Speaker, when the House on yesterday, with its deep concern for the interests of small business, passed and sent to the Senate H. R. 9144

to amend section 24 of the Federal Reserve Act, as amended, it was quite apparent to me that many members of this body were not fully informed of the functions and activities of the Small Business Administration. Statements were made, no doubt in good faith, and I do not question any one's sincerity, which were at variance with the facts and, in the interest of keeping the record straight, I have overnight obtained official figures and facts which I would now like to present to the House very briefly. While there is great interest in the financial assistance function of the Small Business Administration, it should be remembered that this agency, as required by law, has other duties which it is performing and, I believe, performing very well within the limitations of the appropriations. In addition to financial assistance, the Small Business Administration maintains a nationwide service in obtaining for small business a fair share of Government orders for materials and supplies for the Department of Defense and the so-called civilian agencies of the Government. The Small Business Administration, pursuant to the mandate carried in the law, provides a nationwide service in management and technical aid to business firms. Both of these functions-Government procure ment and management assistance-are, as every Member of this body knows, very important toward keeping our national economy on an even keel and distributing prosperity. Of course it is an accepted function of the Federal Government to disseminate knowledge and that is what the Small Business Administration is doing.

Now, regarding the financial-assistance function of the Small Business Administration: I have here the latest figures, and may I say, parenthetically, that in a discussion of this kind it is not uncommon for important figures to be overlooked and sometimes aggregate figures are lost in the great array of figures. The figures I am going to give this body came to me this morning directly from Mr. Wendell B. Barnes, the Administra

tor of the Small Business Administration.

The figures he has furnished me show that the Small Business Administration as of July 8, 1954, had taken action on more than 1,800 loan applications.

The figures show further that the Small Business Administration as of July 8 had approved 515 business loans for $30,145,000.

Of the loans approved, 340 loans, totaling $20,923,000, are bank-participation loans, and 175 loans, totaling $9,222,000, are direct loans.

In addition, the Small Business Administration had taken action on 195 disaster-loan applications, and as of June 30 the agency had made disbursements on 93 disaster loans, totaling $386,011.

The Small Business Administration has been active in making disbursements on the small-business loans it has approved. The figures through July 8 show that disbursement has been made on 126 loans for a total of $6,506,415.

Of these, 45 were direct loans, for a total of $2,751,803; and 68 were bankparticipation loans for a total of $3,754,

612.

So much for the figures themselves. Now, I should like to say just a few words about the meaning of them.

In the first place it should be said that the Small Business Administration did not begin receiving loan applications until last October, and it was not until the first of this year that its loan program was in full operation.

There has been some criticism of the

Small Business Administration because of the time that has elapsed between the approval of a loan application and the final closing and disbursing of the funds.

With regard to this criticism, I should like to say that anyone familiar with banking and business operations knows that no prudent businessman is going to draw down the money he has made arrangements to borrow until he actually needs it.

It would be wasteful for him to incur

interest charges on borrowed funds until he is ready to use those funds. Therefore it is obvious that there is not necessarily any significance in the time that may elapse between tentative approval and actual closing.

You will note from the figures on loan approvals that I quoted a moment ago, that two-thirds of the loans approved by the Small Business Administration are bank-participation loans.

With regard to these loans, the banks themselves, and not the Small Business Administration, close the loans and make the disbursement. In many instances, the banks advance the needed funds on a short-term basis after tentative approval and before closing of the SBA loan, and neither the bank or its customer is then in any particular hurry for the loan closing which is under the bank's control.

So you see that the time it takes to close a loan after it has been approved by the Small Business Administration is not always under the control of the agency.

The truly significant thing with regard to the Small Business Administration's

loan program, to my way of thinking, is this:

The Agency is stepping up its action on its lending program and has made a creditable record in acting on more than 1,800 applications.

Of course, not all loan applications can be approved. The law itself requires that only sound loans shall be made, in cases where there is good chance of repayment.

It takes just about as much work for the Small Business Administration and its small but efficient staff to process an application that is declined, as it does one that is approved.

Finally, I want to make note of one more fact that to me shows that the Small Business Administration is doing a good job.

Recently the Small Business Administration delegated authority to its Regional Directors to make loans up to $50,000 on their own authority in cases where there is at least 25 percent bank participation and where at least half of this bank participation represents new money.

Within 24 hours after this delegation of authority was approved by the Small Business Administrator, the Agency's Philadelphia Regional Office had approved a loan for $50,000 to a small firm, in which a bank had agreed to take 50 percent participation.

Mr. Speaker, in conclusion, from the brief summary of activities of the Small Business Administration which I have given, I believe it will be agreed by fairminded persons that the Small Business Administration, with the funds and personnel provided by the Congress, has done and is doing an excellent job.

SPECIAL ORDER GRANTED

Mr. EBERHARTER asked and was given permission to address the House for 15 minutes today, following the legislative program of the day and the conclusion of special orders heretofore granted.

HEALTH SERVICE PREPAYMENT

PLAN REINSURANCE ACT

Mr. ALLEN of Illinois. Mr. Speaker, by direction of the Committee on Rules, I call up House Resolution 623 and ask for its immediate consideration.

The Clerk read the resolution, as follows:

Resolved, That upon the adoption of this resolution it shall be in order to move that the House resolve itself into the Committee of the Whole House on the State of the Union for the consideration of the bill (H. R. 8356) to improve the public health by encouraging more extensive use of the voluntary prepayment method in the provision of personal health services, and all points of order against said bill are hereby waived. After general debate, which shall be confined to the bill, and shall continue not to exceed 2 hours, to be equally divided and controlled by the chairman and ranking minority member of the Committee on Interstate and Foreign Commerce, the bill shall be read for amendment under the 5-minute rule. It shall be in order to consider without the intervention of any point of order the substitute amendment recommended by the Committee on Interstate and Foreign Commerce now in the bill, and such substitute

for the purpose of amendment shall be considered under the 5-minute rule as an original bill. At the conclusion of such consideration the Committee shall rise and report the bill to the House with such amendments as may have been adopted, and any Member may demand a separate vote in the House on any of the amendments adopted in the Committee of the Whole to the bill or committee substitute. The previous question shall be

considered as ordered on the bill and amendments thereto to final passage without intervening motion except one motion to recommit with or without instruction.

Mr. ALLEN of Illinois. Mr. Speaker, I yield myself such time as I may require. Mr. Speaker, I rise to urge the adoption of House Resolution 623, which will make in order the consideration of the bill (H. R. 8356) to improve the public health by encouraging more extensive use of the voluntary prepayment method in the provision of personal health services.

House Resolution 623 provides for an open rule, waiving points of order, and allows for the consideration of the committee substitute amendment as an original bill. Two hours of general debate on the bill itself are provided.

Mr. Speaker, H. R. 8356 would provide for the establishment of a health reinsurance program in the Department of Health, Education, and Welfare. The bill would also provide for the creation of a reinsurance fund and would authorize a repayable appropriation of not to exceed $25 million to provide advances of working capital for the fund. This $25 million would be available for the first 5 years of the program.

According to the report, Mr. Speaker, the fund would be built up over a period of time from reinsurance premiums and from earnings of the fund. Reinsurance would be available, on a strictly voluntary basis and upon payment of a reinsurance premium, to private insurance companies or voluntary nonprofit health associations.

This whole proposal is designed to encourage private insurance organizations to experiment in providing broader voluntary health insurance protection to more people. The bill would also provide for technical advisory and informational services to health service prepayment plans.

Mr. Speaker, this bill has had its principal provisions approved by the Department of Health, Education, and Welfare, the Department of Agriculture, the Department of Labor, the Federal Trade Commission, and by the President himself. Outside of the field of Government, it has also been approved by such wellknown insurance companies as Mutual Life Insurance Co. and the Connecticut General Life Insurance Co., of Hartford.

The Bureau of the Budget has stated that the bill, if passed, would be in line with the program of the President.

Mr. Speaker, H. R. 8356 represents a new idea in the field of improving the health of the American people. It is a bill that should be adequately discussed by the Congress in order that we all may have a clear idea of just what is entailed in the full development of a program such as is contained in this bill. I hope I hope that the rule will be adopted so that we may fully discuss this bill.

Mr. Speaker, I yield 30 minutes to the gentleman from Texas [Mr. RAYBURN]. Mr. RAYBURN. Mr. Speaker, I yield such time as he may require to the gentleman from Virginia [Mr. SMITH].

Mr. SMITH of Virginia. Mr. Speaker, this seems to be quite a hurry-up kind of measure here this morning. It proposes to launch the Federal Government into the insurance business. I had expected to make some remarks about it because I think it is premature to consider it at this time. I think the House ought to give it very careful consideration. What this bill undertakes to do is to set up a fund of $25 million, which is to be used in connection with the health insurance business. Whether this is a forerunner of socialized medicine, I am unable to predict, but I never saw one of these new agencies set up which did not spread its wings just as far as possible and go from one thing to another. This is the beginning of putting the Federal Government into the insurance business. I do not think it ought to be done. I do not think the House would do it if it were brought up here with mature consideration and if we had time to consider it. But it came before the Rules Committee yesterday afternoon, and here we are, at the end of the session. We have had a year and a half to consider whether you want to put the Federal Government into the insurance business. You have had a year and a half to consider whether you wanted to set up this kind of a bureau and launch the Government into this kind of a new program. I do not call it a New Deal program or a Fair Deal program. I might call it a Republican program. I remember the time when that side of the aisle would hold up their hands in holy horror at any such suggestion that we put the Federal Government into the health insurance business. That is exactly what you are doing. have not had time to consider this bill. I will warrant there is not 1 Member in 10 in this House who knows a single solitary thing about this bill or what it provides.

We

Here is a bill that establishes a new bureau, an expensive bureau, which is estimated I understand will cost a million and a quarter dollars a year for its administration alone, and it sets up a reinsurance fund of $25 million of the taxpayers' money and launches you fullfledged into the insurance business. Is that what you want to do? If that is what you want to do, of course you have the votes over here to do it, but I think you ought to stop, look, and listen a little bit.

This bill is opposed by the American Medical Association. They do not think the Government ought to go into the business of insuring the health of the people. It is a reinsurance reinsurance bill. It looks to me like what it really is, is a subsidy to the insurance companies, in order to induce them to insure bad risks, because they expect them to insure against things that they would not ordinarily insure under the circumstances. If you need any more reinsurance-and that is what this is-a reinsurance bill, just remember this, that you have got private companies, you have got private capital to the extent of something like

$2 billion in private insurance companies that are engaged in just the business that you are proposing to place the Federal Government in competition with. If that is what you want to do, all right, go ahead.

Mr. EBERHARTER. Mr. Speaker, will the gentleman yield?

Mr. SMITH of Virginia. I yield. Mr. EBERHARTER. I just want to add this comment that there are very many differences in rates on insurance,

Mr. EBERHARTER. Mr. Speaker, some companies perhaps charging but will the gentleman yield?

In

Mr. SMITH of Virginia. I yield to the gentleman from Pennsylvania. Mr. EBERHARTER. The gentleman The gentleman just said something that I would like to comment on. The gentleman said we would put the Federal Government in competition with private insurance. sofar as this bill is concerned, and to emphasize the need for studying it, I have heard just the opposite of that. I have heard that this bill is just to bail out a lot of insurance companies, and insure some insurance companies against any loss. There are so many conflicting the country impressions throughout the country concerning this bill that it seems to me it is being pushed upon us without proper consideration and study. I have also been informed, whether the information is reliable or not-I do not know whether the committee has studied it-that the rates that will be charged will be of such high nature that the employees who are reinsured under this bill will pay just as much as they would to private insurance companies, and the excess premiums will be for the benefit of the insurance companies. I am not making those charges, but just bearing out what the gentleman said. I do not think the committee has given enough study to this subject to pass a bill of this nature.

Mr. SMITH of Virginia. The gentleman's statement, for which I am grateful, is enlightening. Here is the Government launching upon a new program, launching upon a new bureau, when we do not know what we are doing, and the House does not know what it is all about. The gentleman says this may be to bail out some insurance companies. I say it is to put the Government in competition with insurance companies. The answer to that question, I think, is this, that there are all kinds of insurance companies. There are good sound solvent reinsurance companies who are amply able to reinsure every risk that is insurable or that ought to be insured. On the other hand, you have fly-by-night insurance companies-and I may say there are many of them-that would welcome this opportunity to unload their burden on the taxpayers of the United States.

Mr. MASON. Mr. Speaker, will the gentleman yield?

Mr. SMITH of Virginia. I yield. Mr. MASON. Is the kernel of this bill a proposition for the Federal Government to underwrite the insurance

companies in proposed experiments they may carry on which are risky, which they ordinarily would not carry on unless the Federal Government backed them up and guaranteed them?

Mr. SMITH of Virginia. That is exactly what it is; and I think the gentleman has pretty well expressed the language that is contained in the preamble of the bill itself.

half of what other companies charge. This matter of rates has been studied for many years, yet in the short time the Committee on Interstate and Foreign Commerce has had this matter under consideration. It seems to me that it would be impossible that they could arrive at a rate that would be fair to both the insurance company, the reinsured, and the individuals.

Mr. SMITH of Virginia. May I say to the gentleman in response to his comment I think that is taken care of in the bill, because the bill provides and authorizes the Secretary of Health, Labor, and whatever you have to employ 10 very high-priced experts on insurance, and they are going to tell the country what to do about it and they are going to tell the Government what to do about it. You are going to spend about $25 million setting up a new bureaucracy.

Mr. EBERHARTER. Let me ask the gentleman if these so-called experts will set the rates, or will Congress have the right to set the rates?

Mr. SMITH of Virginia. They are not only going to set the rates but they are going to advise the insurance business what is good for them and what is not good for them.

Mr. EBERHARTER. It seems to me that we are always getting more experts to handle legislation rather than the Congress.

Mr. SMITH of Virginia. Absolutely, yes; all they want us to do is to pass the enabling act, give them millions of dollars, and the bureaucrats will handle it from there on.

Mr. DONDERO. Mr. Speaker, will the gentleman yield? Mr. SMITH of

Virginia. I yield.

Mr. DONDERO. I have listened with great interest to what the gentleman has had to say. I have always admired him for his forthrightness. Will the gentleman tell the House, if he knows, what is the necessity for this bill?

Mr. SMITH of Virginia. I think you will have to talk with the gentlemen who are proposing the bill. From my standpoint I do not see any necessity for it at all. It is a thing that ought not to be done.

Mr. DONDERO. Is it not another case of injecting the Federal Government into a new field of private industry?

Mr. SMITH of Virginia. Absolutely; there is no doubt about that.

Mr. MULTER. Mr. Speaker, will the gentleman yield?

Mr. SMITH of Virginia. I yield to the gentleman from New York.

Mr. MULTER. Is it not a fact that the insurance business is one of the biggest free enterprise businesses of the country with billions and billions of dollars of assets? If this is such a good plan why cannot the insurance companies carry it out, invest their own $25 million, rather than have the Federal Government get into it?

Mr. SMITH of Virginia. They have plenty of money to do it with. It is just another case of injecting the Federal Government into private business with the bill to be footed by the taxpayers.

Mr. Speaker, I include in my remarks at this point a telegram from the American Medical Association regarding this bill:

JUNE 29, 1954.

Hon. CHARLES A. WOLVERTON,
Chairman, House Interstate and Foreign
Commerce Committee,

House of Representatives,

Washington, D. C.:

This is to make certain that the position of the American Medical Association on H. R. 7700 and H. R. 8356 is understood. We opposed the original H. R. 7700 and we oppose the amended version. On April 26 the association presented its views to the committee on the original H. R. 7700. Again on May 11 we informed you of our views on the amendments you suggested.

First, H. R. 7700 is absolutely unnecessary; private financing is meeting the need. Second, this legislation would put medical practical and medical policies under the domination of lay boards of labor and management. Congress and the public have long been aware that the practice of medicine cannot be allowed to become a political football. It is just as important that the practice of medicine not be relegated to the labor-management bargaining table.

We want to take this opportunity also to tell you that our association's opposition to H. R. 8356, the reinsurance proposal, was reaffirmed by the House of Delegates last week at our convention in San Francisco. Our reasons were presented to your committee in testimony on April 5.

FRANK E. WILSON, M. D., Director, Washington Office, American Medical Association.

Mr. ALLEN of Illinois. Mr. Speaker, I move the previous question on the resolution.

The previous question was ordered. The SPEAKER. The question is on the resolution.

The question was taken, and the Chair announced that the ayes appeared to have it.

Mr. SMITH of Virginia. Mr. Speaker, I object to the vote on the ground that a quorum is not present and make the point of order that a quorum is not present.

The SPEAKER. Evidently a quorum is not present. The Doorkeeper will close the doors, the Sergeant at Arms will notify absent Members, and the Clerk will call the roll.

The question was taken; and there were-yeas 274, nays 88, answering "present" 1, not voting 71, as follows: [Roll No. 102]

[blocks in formation]
« PreviousContinue »