Mr. Chairman:

 Thank you for holding this important hearing on the Federal Government’s procurement policies and “FPI” – the Federal Prison Industries – which does business with government agencies under the trade name of “UNICOR.”

 I approach this difficult issue as a former businessman as well as a Senator from New Jersey.

 American businesses large and small are hurting.  This is especially true in manufacturing.  It is tempting to believe that one of the problems American businesses face is trying to compete with prison labor.

 As someone who started a successful business with two childhood friends in Paterson, New Jersey, I know that an efficient marketplace requires an “even playing field” and all businesses should have an opportunity to compete on price, product quality, customer service, and product delivery.

 That has been the hallmark of our economic system.
 As a result, Americans enjoy one of the highest standards of living in the world.

 As a Senator from New Jersey, I also know that manufacturing jobs are disappearing from my home State at an alarming rate.

 But I don’t think we can blame this trend on prison industries.  Rather, it is happening because of our increasing trade deficit, which reached a record level of 549 billion dollars in 2003.  Our trade deficit with one country – China – increased by 20 percent to 124 billion dollars in just one year (2002 to 2003).
 Manufacturers have borne the brunt of our trade deficit.  Our manufacturing trade deficit rose from 430 billion dollars in 2002 to 471 billion dollars in 2003.  Not surprisingly, the sector lost 582,000 jobs during that period.

 I know that this hearing is not about trade policy but I mention these figures only to underscore an important point: our trade deficit, along with the recent recession and productivity increases, account for the job losses in manufacturing.

 We need to weigh the costs and benefits of the FPI program very carefully before we consider making any changes to it.  At a minimum, we should wait until we hear from the General Accounting Office (GAO) on the subject.

 There is great value to society in having federal prisoners occupy their time constructively, develop a work ethic, and acquire job skills that will ease their transition back into civil society upon their release.

 As former Deputy Attorney General Larry D. Thompson said, “although the FPI program produces products and performs services, the real output is inmates who are more likely to return to society as law-abiding taxpayers because of the job-skills training and work experience they received in the FPI program.”

 I agree with Mr. Thompson.  Our federal prisons house 176,000 people – mostly young men, mostly minorities, mostly poorly educated – many of whom will eventually be released into our communities, so it is imperative that we provide them with useful skills.  

I think that restricting the FPI program will provide little relief for the private sector businesses that would compete with FPI for government contracts.

 I am concerned that reducing the scope of and participation in the FPI program will make it much harder for inmates to acquire the work and social skills necessary for reentering society.  Without such skills, they are more likely to become recidivists and harm the people in the communities they are attempting to rejoin.

 This is a subject that requires careful deliberation so I look forward to hearing from our witnesses today since each one has expertise and an important perspective to share.

 Thank you, Mr. Chairman.