[Congressional Record Volume 141, Number 19 (Tuesday, January 31, 1995)]
[House]
[Pages H955-H956]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                   CIRCUMVENTING THE WILL OF CONGRESS

  Mr. LIPINSKI. Mr. Speaker, today the Clinton administration abandoned 
its effort to pass a $40 billion loan guarantee to Mexico. The 
President came to the conclusion that his bailout proposal would have 
failed in Congress, and he was right.
  So what does the administration turn around and do? Instead of really 
responding to the opposition of Congress, the administration decides to 
devise a new plan, a new plan which effectively circumvents the will of 
the Congress. While this new plan includes more international financial 
support, it also calls for dipping into our country's exchange 
equalization fund for as much as $20 billion to prop up the peso. This 
fund, which only holds $25 billion, I might add, is usually only used 
to help stabilize the U.S. dollar.
  Mr. Speaker, this marks the fist time that the fund has ever been 
used to support any kind of currency other than the U.S. dollar.
  Mr. Speaker, I must take exception. I must take exception to how this 
administration wants to put the Mexican peso before the American 
people. I must take exception to how this administration chooses to 
sidestep the authority of Congress in this matter.
  Even with International Monetary Fund support, U.S. tax dollars are 
still at risk. By avoiding the authority of the U.S. Congress the 
administration does not have to answer to the elected Representatives 
of the American people on this rescue plan for Mexico.
  How did we come to where we are today? Well Mr. Speaker, it all began 
with something called NAFTA. Over a year ago, the media hailed it as 
the right thing to do.

                              {time}  1950

  Meanwhile, the Clinton administration cut deals with various Members 
in exchange for their vote in favor of the agreement. I and others, 
however, stood our ground and said ``no'' to NAFTA. We did so knowing 
full well the devastating effects such an agreement would have on the 
U.S. work force and our country's trade position.
  Unfortunately, our warnings went unheeded, and today the 
administration wants to bail out Mexico.
  The Clinton administration promised that 100,000 new jobs would be 
created in the first year of NAFTA. These jobs we have yet to see. Let 
us take a look at the statistics. Since NAFTA was enacted, United 
States net imports with Mexico fell more than half. Our trade deficit 
in electronics has doubled, and we have a $12 billion trade deficit in 
automobiles and parts. In fact, the overall automotive trade deficit 
with Mexico has only worsened under NAFTA.
  The Department of Commerce estimated that $1 billion in exports 
supports approximately 20,000 jobs. This means our automotive trade 
deficit alone has cost our country 32,000 jobs. So how are U.S. workers 
expected to deal with this? NAFTA's trade adjustment assistance program 
certainly is not helping, because eligibility requirements are 
extremely strict and the actual benefits are limited. Many firms have 
actually consulted their employees and told them not to bother 
applying.
  Labor and environmental side agreements negotiated under NAFTA have 
proven to be abused.
  Now after a year of NAFTA, Mexico has experienced a financial crisis, 
and Americans, thousands of whom lost their jobs to Mexico, are being 
asked to foot the bill. Americans are being forced to prop up the peso 
through a 
[[Page H956]] government fund that was set up specifically to help the 
U.S. dollar.
  To me, this is incredible.
  Many questions have yet to be answered about the nature of the peso 
crisis. Reports that the administration knew long beforehand about the 
situation of the peso also cause the urgency of the situation to come 
into serious question. During debate on NAFTA, opponents pointed out 
that Mexico was highly overvaluing the peso and that provisions must be 
included in the agreement to stabilize the currency relationship. No 
such provisions were included in the agreement, and look where were are 
today.
  We just passed a balanced budget amendment to the Constitution, and 
we are being asked to swallow this bailout, and we must ask, will U.S. 
and international loans really help anyone?
  In the Washington Post, Jim Glassman argues that the bailout may only 
make Mexico's long-term economic problems worse. By being too lenient 
on the Mexican Government, we are encouraging misbehavior in the 
future.
  Mr. Speaker, the teamsters and united electrical workers unions filed 
unfair labor complaints against Honeywell and GE companies in Mexico--
the National Administrative Office dismissed these cases with no 
penalties for the companies--a blatant disregard for workers' rights.
  Likewise, the environment and public health have suffered a great 
deal. Are NAFTA supporters aware that a GM plant near the border in 
Mexico bumped a toxic chemical at 215,000 times the acceptable level? 
It is no wonder that children's cancer rates have increased 
dramatically be 230 percent in Brownsville TX--230 percent!
  In July 1994, a 13-year-old boy from Texas died from a brain 
infection after swimming in the Rio Grande.
  American health officials traced the infection back to the 24 million 
gallons of raw sewage from Mexico which is pumped into the river each 
day.
  Mr. Speaker, NAFTA is literally poisoning our children and 
grandchildren.
  William Seidman, former Chairman of the FDIC, who was in favor of 
NAFTA, opposed the administration's original loan guarantee package. 
Mr. Seidman said that it bore striking similarities to the S&L bailout 
of the 80's--and he should know. Mr. Speaker, under this new 
administration plan, taxpayers' dollars are still on the line.
  Mr. Speaker, at best, efforts to prop up the peso are simply a 
political rescue for the new Mexican Government and a bailout for Wall 
Street. The Mexican and American middle class will see little direct 
benefit.
  At the very least, the peso crisis gives us reason to step back and 
take a good long look at what's wrong with NAFTA.
  In Mexico where the disparity between rich and poor is so great, we 
need to slow down, reevaluate the integrity of our trading partner and 
ask ourselves--who really is going to benefit from the loan guarantee.
  We must recognize that the peso instability is not a quick fix 
situation--the loan package will not alter the underlying structural 
weaknesses of the Mexican economy. A year or so from now, Mexico may be 
back wanting more financial aid.
  When will it end?
  We just passed a balanced budget amendment to the Constitution and 
we're being asked to swallow this bailout?
  And, we must ask, will U.S. and international loan efforts really 
help anyone? In the Washington Post, Jim Glassman argues that the 
bailout may only make Mexico's long-term economic problems worse. By 
being too lenient on the Mexican Government, we are encouraging 
misbehavior in the future.
  Why not just let the Mexican market fix itself? This admittedly may 
cause investors to lose money, but they assumed this risk, they deserve 
little sympathy from American taxpayers.
  A major issue in last November's election was the fear, the concern, 
and the insecurity that the American middle class has about their 
shrinking standard of living. Now, with NAFTA and this billion dollar 
bailout, we are not only shipping out middle class jobs, but putting an 
additional burden on the middle class to subsidize another country.
  Since 1979, the United States has lost 16 percent of its 
manufacturing job base--that is 3.2 million jobs lost. The United 
States has lost these jobs to Mexico. Not to Mexican companies, but to 
over 1,600 American-owned plants, plants that employ low paid Mexican 
workers.
  I have already heard from a large number of my constituents urging me 
to reject the peso bailout. These are the same people who knew that 
NAFTA was not good for this Country. These are also the same people who 
go to work everyday, live within their means, and are responsible for 
their own finances.
  Mexico and Wall Street could learn a lot from my constituents.
  I have cosponsored legislation to repeal NAFTA and legislation which 
says that no loan guarantee shall be provided which could result in any 
direct or indirect financial obligations on the part of the American 
taxpayer. I urge my colleagues to do the same. The American people 
deserve nothing less.
  Mr. Speaker, how can we in good conscience rush to bailout Mexico 
when we have thousands of people here at home who desperately need our 
help--many of whom lost their jobs to Mexico?
  I am very disappointed that Congress has been denied this say on this 
issue.
  Mr. Speaker, instead of rescuing Mexico and Wall Street, we need to 
be helping our own citizens achieve a better way of life.


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