[Congressional Record Volume 141, Number 18 (Monday, January 30, 1995)]
[Senate]
[Pages S1732-S1733]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                         MEXICAN LOAN GUARANTEE

  Mr. DASCHLE. Mr. President, the New York Times report this morning 
about the American job losses that may result from Mexico's currency 
crisis is sobering.
  The loss of jobs as the economy of Mexico responds to the peso 
devaluation is a price that will be paid by American workers and their 
families. The past 2 years of strong export sales to Mexico have helped 
create about 770,000 American jobs directly tied to that export market. 
When that market 
[[Page S1733]] collapses, those jobs are placed in jeopardy.
  That is why we should recognize that the proposed loan guarantee to 
address Mexico's economic situation is in our national interest. The 
loan guarantee has been called a bailout and worse, but those who like 
to throw such terms around don't take into account that real working 
people's jobs are also at stake.
  The loan guarantee is not a foreign aid package.
  It is structured to avoid placing Government funds at risk. Mexico 
would be required to pay loan guarantee fees up front--before the 
guarantee took effect and before loans would be extended. Those fees 
would indemnify American taxpayers in exchange for Mexico's right to 
use our guarantee.
  In addition, Mexico would provide security in the form of proceeds 
from the state-owned petroleum company, guaranteeing that America would 
be repaid if the loan guarantees were ever activated.
  As a result, the extension of loan guarantees would not implicate any 
Treasury costs in taxpayer dollars. And the risk of exposing tax 
dollars to possible future loss would be protected by our access to 
Mexico's export oil earnings.
  Even today, the Mexican economy is fundamentally sound. It will 
rebound and grow. The question for Americans to consider is how long 
the rebound will take and what potential depths of turmoil the country 
is likely to encounter in the meantime.
  Both those questions matter to Americans because turmoil and 
joblessness in Mexico will inevitably lead to even greater pressures on 
our southern border, as people search for a way to earn a living and 
feed their families.
  How long it will take for a Mexican economic recovery matters very 
much to workers whose products are sold in the Mexican market. They are 
the Americans whose jobs are at risk today, particularly in the 
southern border States.
  Not only are States like Texas, Arizona, and California the ones to 
which illegal entrants are first drawn, these are also the States with 
some of the highest export sales to Mexico.
  California sells $5 billion worth of products to Mexico each year. 
Nearly 20 percent of Arizona's export sales are made in Mexico. Texas 
relies on the Mexican market for more than one-third of all its 
overseas sales--$13 billion per year.
  So, while the jobs of American workers will be placed at risk because 
of the collapse of the Mexican market for their goods, those border 
States will also face the pressures of increased illegal entrants.
  But the job and income losses will not be limited to the southern 
border States. States all over the country sell products to Mexico, and 
residents of practically every State are employed in the process. Even 
South Dakota, which is one of the Nation's smaller States in terms of 
population, had sales of $4 million per year to the Mexican market.
  I know $4 million doesn't sound like much compared to $13 billion 
from Texas, but, in a small State, we take our millions very seriously.
  Changes in traditional export relationships are occurring very 
quickly in today's new global marketplace. Our premier trading partners 
are Canada and Japan. However, last year our sales to Mexico 
practically equalled our sales to Japan.
  More American exports mean more American jobs. Export-related jobs 
are relatively high-wage jobs, typically paying between 10 and 20 
percent more than the average American job. So, export jobs are among 
the most desirable in the economy. When they're placed at risk, more 
income is jeopardized, and a replacement job at a similar income is 
harder to find.
  The growth of our Mexican exports to a total of $41 billion in 1993 
is estimated to have reached more than 10 percent in 1994. In all, 
since 1987, American sales to Mexico have almost doubled. It's not 
surprising that private economic forecasters are predicting the 
potential for significantly large American job losses if this market is 
allowed to crumble.
  We cannot change what has already happened. The peso devaluation that 
caused the temporary economic reaction in Mexico is a fact of history. 
But we can help determine how severe its fallout will be for Americans 
by the speed and firmness with which we act now.
  This should not be an opportunity for partisan posturing. We are not 
talking about the loss of Republican jobs or Democratic jobs. We are 
talking about the loss of American jobs. Those workers ought to be able 
to rely on their Congress to set partisanship aside when their 
livelihood is at stake.
  The former President of the United States, President Bush, on January 
19, agreed that it is vital for Congress to move promptly on the loan 
guarantee package.
  President Bush stated,

       The plan is not a giveaway. * * * In my view, the 
     guarantees will never have to be called.

  On January 18, President Clinton said,

       The guarantees we will provide are not foreign aid. They 
     are not a gift. They are not a bailout. They are not U.S. 
     Government loans. And they will not affect our current budget 
     deficit. * * * no guarantees will be issued unless we are 
     satisfied that Mexico can provide assured means of repayment.

  Both Presidents are right. The plan is not a giveaway. It is the loan 
of a hose to a neighbor whose house is on fire. We're not proposing to 
build a fire station and equip it. We're just passing the hose across 
the fence.
  I hope the Congress can agree to set aside partisan bickering and do 
the right thing now. It's never easy to stand up and vote for something 
when the polls indicate that people may not understand it, or might 
draw the wrong conclusions.
  But it is the task of leaders to lead. This is the right thing to 
do--not just for our neighbor and trading partner to the south, but for 
America. I hope my colleagues in the Senate--on both sides of the 
aisle--will work with the administration to approve the proposed loan 
guarantee legislation as quickly as possible.

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