[Congressional Record Volume 141, Number 19 (Tuesday, January 31, 1995)]
[Senate]
[Page S1842]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


[[Page S1842]]
                      THE MEXICAN FINANCIAL CRISIS

  Mr. BENNETT. Mr. President, today the President of the United States 
announced his intention to use his executive authority to intervene in 
the matters relating to the Mexican financial crisis.
  Like other Members of the Senate, I have followed this crisis with 
great interest over the last few weeks. As a member of the Banking 
Committee, I participated in this morning's hearings on this issue, 
which were interrupted by the announcement of the President's action. 
Perhaps because of my interest in economic matters and my background in 
business, I have paid close attention to this and found that it has 
managed to consume some of my time in areas that I might have preferred 
to spend talking about other things. But it has become a very important 
part of my life for the last few weeks, and I thought it appropriate 
that I make a comment at this time.
  Mr. President, I have likened the crisis in Mexico to an analogy that 
I hope will help people understand the position that I have taken. 
Suppose, Mr. President, that your neighbor suddenly came pounding on 
your door with the news that his house was on fire. You go out, look at 
his house and, sure enough, there are flames and smoke coming out of 
the attic. And your neighbor says, ``My house is on fire; the fire is 
in the attic; my children are down in the basement. If we do not get 
the fire put out, my children will die. You must help me. Lend me your 
garden hose.'' And you say to the neighbor, ``Well, there is no 
question that your house is on fire and you need help, but I do not 
think the garden hose will reach. I do not think it has enough water 
pressure to get up to the attic. I think there must be another 
solution.'' ``No, you do not understand,'' says the neighbor. ``There 
are combustible materials on the top floor. When the fire gets down 
through the attic, they will catch fire and my children will die. Let 
me give you more information.'' You say, ``I do not need any more 
information about the fire. The information I need has to do with the 
ability of the garden hose to reach the problem.''
  That, in my view, has been part of the difficulty with the debate we 
have had around here about this issue. People keep coming to us and 
telling us ``the Mexican house is on fire.'' My response is that I know 
that, I accept that. I do not argue with you, A, that it is on fire 
and, B, we need to help. My concern is whether or not the proposed 
solutions will help. And if they will not, I urge us to look someplace 
else to try to find something that will.
  So it is in that spirit that I have been carrying on conversations 
with people from the Federal Reserve and the United States Treasury and 
met with officials from Mexico on several occasions to try to be sure 
that we are coming up with some kind of fire extinguisher that will do 
the job.
  The more I worked on this, the more concerned I became that maybe we 
would not be able to do that. Today, the President has taken that 
decision out of our hands--I think very wisely and competently. The 
President has recognized that further delay, which would be an 
automatic result of leaving the thing before the Congress, would result 
in serious and perhaps irreparable harm. The fire had now gotten down 
from the attic, if you will, into the top floor, and it was necessary 
for the President to act and act quickly. I had suggested to members of 
the administration that they start thinking of a solution that did not 
require congressional action. They were reluctant to do that for 
reasons that I can fully understand, saying a matter as serious as this 
is something that should be brought to the Congress, and we should have 
an opportunity to debate and examine it before it is put into play.
  But events overtook that process and the President used the authority 
that was available to him under the exchange stabilization fund to move 
ahead. As I say, I urged officials at the Treasury to look at this 
possibility as much as a week or 10 days ago. As I say, they were 
reluctant because of their desire for congressional approval. Now they 
are in a circumstance where, in effect, all Congress can do is 
disapprove after the fact. I hope we will not do that. I hope we will 
recognize that the President did about the only thing he could do under 
the circumstances. I hope the program that he has put in place will 
work; that we will indeed ``see our neighbor's fire extinguished,'' 
because this is a matter of great concern to all Americans, with the 
number of jobs that could be lost, the number of exports that could be 
affected. All of those statistics are on the public record.
  There are a number of things that I think the Mexicans need to do. We 
have talked about them on this floor from time to time. I believe that 
this deal, as put in place by the President, is a better deal for the 
American taxpayer than the one that was first proposed, for several 
reasons. The first deal called for $40 billion, all of it charged to 
the American taxpayer.
  This deal calls for, up front, $20 billion charged to the American 
taxpayer with the balance, another $27 billion, spread over a variety 
of agencies and countries. True, some of that which is spread over 
these other agencies might end up being American taxpayers' money, but 
at least, on the front end, the exposure to the American taxpayer is 
reduced.
  Second, this deal produces burdensharing; that is, other countries 
are now going to be involved, whereas before it was strictly an 
American deal. Now we have gotten the attention of the other 
``householders'' in the neighborhood, if you will, and they are 
bringing their ``garden hoses'' to the fire along with ours. I think 
that is a good thing, and that was not present in the first proposal 
the President made.
  Third, this proposal involves the Federal Reserve System. The people 
at the Federal Reserve will be involved in enforcing the conditions 
that the Mexicans agree to. I think that is a good thing. It was not 
present in the previous deal. In the previous deal, any enforcement 
that took place would be under the direction of the Treasury and 
whatever allies they could gather from the IMF. I am not one who has a 
great deal of confidence in the ability of the IMF to solve this kind 
of a problem. I think it builds the confidence of the financial 
community to know that the people at the Federal Reserve System, whose 
principal activity in life is to defend the American economy and the 
American dollar, will be involved in overseeing the activities of the 
Mexicans. So inserting the Federal Reserve into the package improves 
the package for me considerably.
  For these reasons then, Mr. President, I offer my congratulations to 
the President, and to the two leaders, Senator Dole and Senator 
Daschle, for their willingness to give expressions of approval to the 
President for this action. He did not need those expressions of 
approval. Under the law, he could have proceeded without them. But it 
demonstrates the fact that the Congress is not unmindful of the ``fire 
next door,'' that the two leaders, in a bipartisan fashion, have 
stepped forward to indicate their approval. The same thing is true in 
the House. Speaker Gingrich and Leader Gephardt have both indicated 
their approval, as well.
  So now all we can do is watch and wait. We have no assurance that 
this package will solve the Mexican problem. But at least there is now 
someone on the ground with a ``fire hose'' that presumably will be able 
to put out the fire. It is a hose that is more suited to the task than 
the garden hose that was originally asked for, and I add my voice to 
those that are being raised, saying to the President: You have my best 
wishes that this will work, and I will do whatever I can to cooperate 
with you and the administration to see that it does work.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. BENNETT. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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