[Congressional Record Volume 141, Number 27 (Friday, February 10, 1995)]
[House]
[Pages H1604-H1608]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
THE MEXICAN BAILOUT
The SPEAKER pro tempore (Mr. Zeliff). Under the Speaker's announced
policy of January 4, 1995, the Chair recognizes the gentleman from
Mississippi [Mr. Taylor] for 60 minutes.
Mr. TAYLOR of Mississippi. Mr. Speaker, I yield to the gentleman from
California [Mr. Brown], my distinguished colleague.
remembering congressman chet holifield
Mr. BROWN of California. Mr. Speaker, I appreciate the gentleman
yielding to me.
[[Page H1605]] Mr. Speaker, I would like to draw the attention of the
Congress and the Nation for a few moments to the memory of former
Congressman Chet Holifield of California, who passed away on February 6
from pneumonia at the age of 91.
Mr. Speaker, Chet Holifield devoted 32 years of his working life to
this institution and to serving the American people. To review his
accomplishments in Congress is to review some of the key developments
in American Government and public policy in the years after World War
II.
Chet Holifield was deeply involved in congressional policymaking
about the peaceful and military applications of atomic power after the
Second World War. He was a vigorous advocate for the peaceful use of
atomic power and pushed hard to have the U.S. atomic energy program
placed under civilian, rather than military, control.
In 1957, he headed the first full-scale congressional hearings on the
implication of radioactive fallout from nuclear testing. At the same
time, Chet believed strongly in--and was a strong advocate for--the
development of the hydrogen bomb and he was a strong supporter of Adm.
Hyman Rickover in his program to build a nuclear navy and submarine
fleet. Congressman Holifield's decades of experience and detailed
involvement in nuclear policymaking gained him the respect of
colleagues in both political parties, the scientific and professional
communities, and environmental groups.
During the last 4 years of his congressional service, from 1967 to
1971, Chet Holifield was the chairman of the House Government
Operations Committee, the House committee primarily involved in
promoting the efficient operation of Federal Government agencies. Chet
authored the legislation establishing the General Services
Administration, which does most of the purchasing for the civil
departments of the Government and manages most Federal buildings. And,
during the growth of the Federal Government in the 1960's, Chet
Holifield was personally involved in managing legislation that created
two Cabinet-level departments: The Department of Housing and Urban
Development and the Department of Transportation.
Chet was born in Mayfield, KY, grew up in Arkansas, and spent some of
his teen years working in the wheat fields of Kansas and the oil fields
of Oklahoma. He later hitchhiked to California where he found a job in
a Pasadena cleaning and dyeing shop.
Ultimately, he worked his way up to his own small business: A men's
clothing store. Chet was first elected to Congress in 1942 and was
reelected 15 times by the people of eastern Los Angeles County, CA,
finally becoming the dean of the California congressional delegation.
He voluntarily retired in 1971, and returned to California to run his
clothing store in Montebello. After finally retiring from his business
work, Chet moved to the beachside community of Balboa, CA.
Through his efforts in Congress and his involvement in the public
affairs of our Nation, Chet Holifield's work helped shape modern
America, and his life's accomplishments will live on for a long time.
Mr. TAYLOR of Mississippi. Mr. Speaker, I want to begin by
apologizing to the approximately 80 House employees who will be kept a
little bit late this afternoon as a result of this. What the people in
the gallery and many of the folks back home do not realize is that
under present system these employees have to stick around as long as we
have special orders. There is a room right up there that has a
television camera.
I have asked the previous Speaker, and I'm going to ask that the
Speaker try to change that policy. There is really no reason to keep
these people around late, but I would not keep them here if it was not
worthwhile.
What we have to talk about today is of the utmost importance to our
Nation. We are talking about $20 billion for the single largest
expenditure on the part of this country that has ever been made without
the consent of Congress, and the potential for an additional $15
billion to be spent at any moment by the President of the United
States, again without the consent of Congress.
It is particularly frustrating as a Member of Congress that earlier
in this week, when the gentlewoman from Ohio [Ms. Kaptur], seven
Republicans, an equal number of Democrats, and the body's only
Independent Member offered a resolution to demand of the Comptroller
General the information as to whether or not what President Clinton did
last week, when he guaranteed the loan to bail out Wall Street, to bail
out the Mexican peso, whether or not that was even legal.
Second, we wanted to know how often this fund has been used, and what
amounts of money have been appropriated over the past. We also wanted
to know who knew that the bailout was going to take place. We know that
Speaker Gingrich knew; we know that President of the Senate, Senator
Dole, knew. We know that the President knew. Who else knew that this
was going to take place?
The reason that this is so important is, they knew before the
announcement that the value of the peso was going to jump dramatically.
It has now been shown that it jumped 20 percent in less than 48 hours.
For those who have a small savings account, for those who might own a
stock, can they imagine having a guaranteed 20-percent return on their
investment in only 48 hours?
That is why it is important, and that is why it was so wrong, that
this deal was cut with the Speaker, with the President, with the
President of the Senate, in secret, without the approval of Congress to
bail out the peso, but most importantly, to bail out Wall Street, the
same people who just 15 months ago said ``We have to have NAFTA, even
if it means that the garment workers down in rural communities like
south Mississippi will be thrown out of work, even if it means that the
fishermen and the shrimpers down in the Gulf Coast States will be put
at a severe disadvantage,'' because they have to live by all of our
laws, our minimum wage laws, our OSHA laws, the pollution laws. They
have to pay our taxes.
{time} 1630
And they will be competing with shrimp brought in from Communist
China, for which there is no import fee at all. They said it was
economic Darwinism and that we had to have NAFTA because the chips are
just going to fall where they are.
It is kind of strange, then, that 15 months later when Wall Street is
hurting, when Wall Street is losing a few bucks on their investments
down in Mexico that they run to this body, that they run to the
President and demand to be bailed out. It is not right. It is not fair.
And it is your money.
I think the people of America need to realize that these are
unsecured loans. Now, the President will tell you and Speaker Gingrich
will tell you that the Mexicans have pledged the oil revenues to pay
these loans back. Who's kidding whom? If those oil revenues had not
already been pledged in a dozen different places, do you think they
would be having to borrow $20 billion? That oil revenue has been
pledged long ago and will not be available to repay those loans and $20
billion of your tax dollars have already gone down the rathole.
Some of the older Members of this body tell me that this is much like
the S&L crisis where they came to Congress and said, ``You know, for $5
billion we can solve the problem,'' only a few months later to come
back and say, ``Well, you've now invested $5 billion, you have to
invest some more to get your money back.'' There is not a doubt in my
mind that within a certain period of time, the President of the United
States will be asking for the remaining $15 billion. And it is your
money. And it is the only money spent without the approval of Congress.
It is the only money spent without the approval of the Senate. And if
you take the time to read our Nation's Constitution, it is very clear
in article I, section 9 which says the Congress shall have the power to
coin money. No money shall be spent from the Treasury without an
appropriation by the Congress. And yet what the President did was
completely contrary to that.
He will point to an old law from 1934 that was meant to get us out of
the depression, that was meant to prop up our currency, that has never
been used for more than $1 billion at a time and say that that $20
billion somehow benefits us. Who's kidding whom?
[[Page H1606]] Who is to bail out Wall Street? And again no one will
ever really know if some phone calls were made to
some people who happen to be Wall Street buddies and said, ``Go out
and buy a bunch of pesos because the value's going to go up very
quickly and very soon,'' and your money was used to guarantee that.
It is wrong, and that is why what the gentlewoman from Ohio [Ms.
Kaptur], the gentleman from Vermont [Mr. Sanders], a number of
Republicans including the gentleman from California [Mr. Rohrabacher],
the gentleman from California [Mr. Hunter], the gentleman from Kentucky
[Mr. Bunning], that is why we are trying to find out what happened and
that is why equally importantly we have a bill in the Banking Committee
to say that this cannot happen again, that from now on these moneys
have to be appropriated by Congress.
At this time I would like to yield to my distinguished colleague, the
gentlewoman from Ohio [Ms. Kaptur], who has been most instrumental in
doing the research on this matter.
Ms. KAPTUR. I want to thank Congressman Taylor for his extraordinary
leadership on this effort and for gaining the special order time this
evening. It is my privilege to join him and to thank him so very much
for cosponsoring the special resolution of inquiry that was filed today
here in the House of Representatives asking the President of the United
States to submit information to this House within the next 2 weeks
answering questions that we cannot answer for the American people
simply because the executive branch chose to take a unilateral action
without a vote of the Congress of the United States. Congressman Taylor
has outlined the amount of money that is on the line initially, money
that is flowing out of our Treasury, not just in the form of loan
guarantees, although we cannot get specifics on this, but we understand
direct loans as well. We do not know for what duration, we do not know
what the terms are. We do not know exactly what the purpose is. But we
know that part of the money is being used to help Mexico refinance what
are called pesobonos, the bonds that she holds, that creditors hold
against her that she has to refinance. Approximately 10 billion to 16
billion dollars' worth of those are owed to U.S. investors.
I would just ask our colleagues and people around the country to be
aware that this resolution of inquiry asks very specific questions of
the administration asking them to give us the assured source of
repayment to our country for any of the short, intermediate or long-
term credit facilities that were designed by the administration and
made available to Mexico, to give us any documents--we are just asking
for facts here--concerning the net worth of Pemex, the state-owned oil
company, the historical annual revenues of Pemex and as Congressman
Taylor mentioned, to what other purposes those revenues have already
been dedicated, which means that the collateral really is not worth
anything.
As one of our colleagues over in the other body said, we may have to
send in the 82d Airborne to collect on the oil collateral because it
has been so overpledged.
We are asking for other information concerning what criteria the
administration used in deciding to make loans from this fund to Mexico
when in fact it has refused so many other countries around the world
access to funds through that particular credit facility. So why should
this situation be different and why should the Executive go around the
Congress of the United States?
We are also very interested in knowing what additional replenishment
of funds will be required in the International Monetary Fund and Bank
of International Settlements, because they have now been drawn into
this agreement and the United States does provide some of their working
capital. What are the nature of those arrangements and what additional
amounts of taxpayer dollars will be required to replenish those funds?
In any case, there are over seven pages of questions here, and this
particular resolution was today referred to the Banking Committee. The
Banking Committee under the rules of the House has 14 days in which to
respond.
If I just might take 2 extra minutes here, I want to say something
very important tonight that we did not talk about during the day today.
That is, as a result of press clips today in the Washington Post, the
New York Times, and other newspapers, the President of Mexico evidently
yesterday effectively declared an end to that Government's peace
efforts in that country to try to keep the lid on the uprisings that
are occurring, particularly in the southern part of Mexico, and I want
to say something about this, because it cuts to the quick of what is
happening in relations between our two nations.
It is not enough for just the President of the United States to be
friends with the President of Mexico or the biggest banks in America to
be friends with the biggest banks in Mexico. Good relations between our
countries depend on the people of the United States being friends with
the people of Mexico. As we watch the people of Mexico stream across
our borders, stream across our borders because they are hungry, our
response as a nation is, well, we have to close the borders, because
the exodus is so huge.
But let me say this: That all the interests on Wall Street that are
watching what we do here, and I will call some of them by name,
Citibank, Chase Manhattan Bank, the Fidelity mutual funds. Over there
in Illinois, Archer-Daniel-Midland, you sell a lot of grain down in
Mexico, but I will say this tonight: There is not one share of your
stock that is worth the life of one Mexican peasant fighting for enough
to eat off their land that they are being divested of. And we have to
speak out for those people here in the Congress of the United States.
It is not reported in the press, it is not reported on television, it
is hardly reported in the newspapers. In fact one of the newspapers
says today, many investors in America here have said that continuing
political instability in Mexico is the main reason that they are
withdrawing their money from Mexico. They have been withdrawing their
money from Mexico in recent months.
It is very interesting that they are worried about the political
instability. Yet you do not hear one call for democracy building in
Mexico.
{time} 1640
We do not hear one call out of Wall Street for human rights. We do
not hear one call of sympathy for the farmers in Chiapas who literally
plant coffee with their hands on the hillsides, and as a result of this
NAFTA agreement are being thrown off of their land, and they call it in
the paper, they call them rebels, and call them insurrectionists, and
make them seem like they are traitors. Well, they are not traitors to
the ordinary people of that land, and frankly, I think they had the
real true belief in democracy in their hearts.
I would hope that our country would listen to the Catholic prelates
who spoke out this morning in the New York Times, Bishop Samuel Ruiz
Garcia, who said that this is a very, very serious situation. It is
pointing to a solution of war, and it breaks the process of dialog.
This is not a situation that will be solved with guns or with the
President of Mexico sending in the federal police. We can take a lot
more lives, and I would hate to see the biggest financial interests in
this country part and party to killing the common people of Mexico.
That will not build friendships over the years.
But the biggest interests in this country, political and economic,
ought to be for democracy-building south of our border, because only
when the people there have a right to have a decent wage and to own a
piece of property and have enough to eat will there be political
stability and economic stability in that country and four our own
country.
I felt compelled to speak out. I am very worried about what could
happen over this weekend when Congress goes home with that cease-fire
having been lifted, and at least I wanted to put something on record
about my deep concerns, and also that those who have their monied
interests at heart would also put to heart the interests of the people
of Mexico and be a voice for them.
The SPEAKER pro tempore (Mr. Zeliff). The Chair would remind Members
to address the Chair and not those outside the Chamber.
[[Page H1607]] Mr. TAYLOR of Mississippi. Mr. Speaker, reclaiming my
time, I want to thank the gentlewoman from Ohio [Ms. Kaptur] for her
remarks. It is strange that she used the word ``rebel.'' It reminded me
of some other people who really need to be commended for what happened
earlier here in the week. There was a vote on Tuesday, or at least we
had hoped to get a vote on whether or not we could investigate this. If
you happen to have been following the House proceedings you would know
the majority leader, Mr. Armey, stood up and called for tabling of that
motion, and what that means is that it cannot even be debated, that the
American people would not even have 1 hour to hear what was the
information we were looking for, why we were looking for it, and what
we hope to do with it and how we hoped to change things. It is
interesting that there were 14 Republicans who went out on a limb and
opposed their leadership because they knew that what was going on was
so wrong that they would not give their blessing to it. I really think
those Members, there were about 150 Democrats, and I thank all of them
for their help, but in particular I want to thank Congressman Bilbray,
Congressman Coble, Congressman Duncan, Congressman English, Congressman
Hunter, Congressman Istook, Congressman Klug, Congressman Largent,
Congressman Myers, Congressman Rohrabacher, Congressman Stearns, and my
friend but not relative, Charlie Taylor from North Carolina,
Congressman Weldon, and Congressman Whitfield.
It was my understanding, as reported today in the Washington Times,
that rather than being applauded by their colleagues in the Republican
Conference for their brave stand in putting the American people before
party politics, and I quote, ``they were castigated by House Majority
Whip Tom DeLay for opposing Mr. Gingrich on the vote to bring this
before the public.''
I want to make it very clear to the Speaker, I want to make it very
clear to the American public, this issue will not go away. They hope it
will be forgotten. How can you forget $20 billion and how can you
forget the potential for this Nation to lose another $15 billion? That
is $35 billion, and for those who want to know what that is the
equivalent of, that is the equivalent of what this Nation spends on the
entire budget for the Veterans' Administration for a whole year, and it
is gone, and it is wrong.
Mr. SANDERS. Mr. Speaker, will the gentleman yield?
Mr. TAYLOR of Mississippi. I yield to my colleague, the gentleman
from Vermont, the only independent Member of this body, and the
gentleman who has introduced legislation to make this fund subject to
an annual appropriation process like every other dollar that is in the
Treasury.
Mr. SANDERS. Mr. Speaker, I thank the gentleman very much for
yielding and congratulate him on his leadership, as well as that of the
gentlewoman from Ohio [Ms. Kaptur]. It is nice to be here this evening
with them. I share the concerns they have articulated.
It seems to me to be rather incredible that at a time when we spend
huge amounts of time right here on the floor of the House debating the
appropriation for the National Council for the Humanities and the
National Council for the Arts, and $100 million here and $100 million
there, that this institution presumably which represents the American
people has not been able to debate and vote on a $20 billion-plus
package which puts taxpayers' money at risk. Maybe people agree with
what the President and Mr. Gingrich are doing, maybe they do not. But I
cannot believe that many Americans think it proper that the U.S.
Congress does not debate that issue and vote it up or vote it down
right here on the floor of the House.
As the gentleman from Mississippi [Mr. Taylor] indicated, I have
introduced H.R. 867. What H.R. 867 does is it says that the world has
changed markedly since 1934 when the legislation that the President
authorized was first enacted. A lot has changed. Under H.R. 867 loans
from the Exchange Stabilization Fund would only be allowed, as the
gentleman from Mississippi indicated, to the extent that Congress has
previously authorized it in an annual appropriation bill. In other
words, like all of the other appropriations in this Congress that come
through this Congress, this fund also would have to be appropriated by
Congress.
I would point out to my colleagues that this would mean that the fund
would be treated in the exact same manner that we treat the funds held
by the Export-Import Bank. Both funds are self-sufficient and do not
require annual contributions in appropriation bills. However, loans
made by the Export-Import Bank are subject to congressional approval
given under authorization and appropriation bills. This bill would
simply subject the Exchange Stabilization Fund to congressional
approval.
We have just introduced this bill on Wednesday, and I am delighted
that we have already received significant support for it of both the
gentlewoman from Ohio [Ms. Kaptur] and the gentleman from Mississippi
[Mr. Taylor], but also on board are the gentleman from Oregon [Mr.
DeFazio], the gentlewoman from Missouri [Ms. Danner], the gentleman
from Pennsylvania [Mr. Klink], the gentleman from Ohio [Mr. Traficant],
the gentleman from California [Mr. Rohrabacher], the gentleman from
Illinois [Mr. Evans], the gentleman from Indiana [Mr. Visclosky], the
gentlewoman from New York [Mrs. Maloney], the gentleman from Illinois
[Mr. Lipinski], and the gentleman from Washington [Mr. Metcalf].
Included in those Members are some who consider themselves pretty
conservative and some who consider themselves pretty progressive. But I
think the bottom line for all of us and for the American people is that
at a time when this country has a $200 billion deficit, at a time in
which Members of this Congress are talking about cuts in Medicare,
Medicaid, veterans' programs, nutrition programs for hungry children,
that before $20 billion-plus of taxpayers' money is put at risk, that
issue must be discussed and must be debated and must be voted upon on
the floor of the House, or else we as Members of Congress are not doing
our job.
I thank the gentleman for inviting me. I have to run, but I thank
him.
Mr. TAYLOR of Mississippi. Mr. Speaker, I want to thank the gentleman
for being here today, and I want to again remind everyone that this was
never brought before Congress. The reason it was not brought before
Congress is because both sides, the Democrats and the Republicans, knew
that had it been brought before Congress, Congress would have voted it
down, and that is the greatest outrage of all, that the will of the
majority as expressed through their elected representatives was never
heard. The gentleman from Vermont [Mr. Sanders] is trying to correct
that. It is a shame that a little-known provision of a law had to be
used to thwart the will of the majority.
But I really do want to thank the gentleman for trying to correct
that.
Mr. SANDERS. If the gentleman will yield, and not only are a majority
of Republicans against this bailout and a majority of Democrats, polls
indicate that the vast majority of the American people are in
opposition, and as the gentlewoman form Ohio [Ms. Kaptur] has pointed
out on many occasions, a majority of the people in Mexico are in
opposition to this bailout.
So who is for it? I think we know who is for it, and that is the
people who have the money, and that is the people who have the power in
this country, our friends in the large commercial banks and in the
investment houses on Wall Street. But we all and many of our colleagues
are going to demand that this issue be debated and voted upon here on
the floor of the House. We do not intend to abdicate our
responsibility.
Again I thank the gentleman for yielding.
Ms. KAPTUR. If the gentleman will yield, I just wanted to say it is
rather interesting when you look at who will get the $20 billion as it
is drawn down from the Treasury, it will not be the people in the
United States who have lost their jobs to Mexico. We have had over
18,000 Americans since January 1, 1994, lose their jobs to Mexico
already because the wages down there are so cheap. Our plants, several
thousand of them, have been relocating down there over the years, and
after NAFTA that exodus accelerated. So our people will not be getting
the money. In fact the
[[Page H1608]] money is being taken from our taxpayers to bail out the
big financial institutions.
{time} 1650
We know the money will not go to feed the people of Mexico. The
people of Mexico understand that their government will not help them,
because it is in fact a one-party government and an authoritarian state
that has been in power since before my grandmother was born. So they
know that they will not get assistance from there. So it is interesting
to think about who the money is really going to and at the same time as
those dollars flow between the central bank of Mexico and its public
treasury and Wall Street here in the United States and the central bank
of Germany and Japan, when you think about that movement of money, and
then you think about the fact that some of those very same
institutions, especially the private creditors, have said very quietly
to our government it is all right, let Mexico clean up its problems in
Chiapas, clean up its problems in Tabasco state, in other words, kill
the people of Mexico who are fighting because they basically do not
have enough money to survive for life, enough to eat.
I remember one woman said to me when I visited down there, ``Well,
Ms. Kaptur, you do not understand. We work for hunger wages.'' I said,
``I beg your pardon? I never heard that term.'' She said, ``People get
about 80 percent of the calories that it takes to keep a person's
weight in balance,'' so in the part of the countryside that we were in,
the people were very thin, and they were very hungry, and it was very
hard to even get tortillas. The children were eating tortillas. They
did not have fresh water. It is hard for Americans to imagine if they
have not visited the inland area how people are actually living in that
nation of nearly 100 million people, yet the dollars will not go to
help those people. In fact, the people that are suffering most, the
ones who are crying out for their own government, for their own
government to help them, are being felled by the federal police.
And so we ask ourselves, what are we doing as a country; what are the
major institutions of this country doing, political and economic? Are
we standing up for the best ideals that are in the Constitution?
I think not.
And so it is my pleasure to join with the gentleman from Mississippi
[Mr. Taylor] this evening and to be a voice for people on both sides of
the border who feel that this money is being incorrectly used to
support a government that does not represent the majority of people in
that nation.
Mr. TAYLOR of Mississippi. I say to the gentlewoman from Ohio [Ms.
Kaptur], it has really become apparent to me in phone calls I have had,
letters, faxes from around the country that the American people feel
powerless against Wall Street. They feel powerless against the people
who benefited from this.
You pointed out very well that is not the Mexican people. It is Wall
Street. It is the people who reaped tremendous profits down there last
year, because they took risky investments. When those risky investments
went sour, then they called upon the taxpayers to bail them out, and
that is wrong, that is not free enterprise.
Ms. KAPTUR. USA Today last week had a big page in the business
section that showed all the different funds, the stock and bond funds,
the mutual funds in the United States and what their earnings had been
since 1991, and the emerging market fund under which this would fall,
investments in Mexico had yielded a 66 percent return over the last
four years.
So the companies that we are talking about are not poor little lambs.
These institutions have made incredible profits, and as they made those
profits, why should they not eat their losses? And for the big banks,
this has been a great time to be in banking in America. They put a fee
on everything, right, if we go down here to the little checking machine
and I try to get some money from my bank in Ohio, they charge $2.50 or
$3.50 for the transfer. You pay for your checks. You pay for
everything. You practically pay to go into the bank. They are making
lots of money off of customers.
So this is true. Banking has been very profitable over the last 5
years. Why should they not eat their losses? Why have they come to the
taxpayers?
Mr. TAYLOR of Mississippi. Reclaiming my time, I want to thank the
gentlewoman for her help.
I would like to encourage those who are listening to get in touch
with their elected Representatives. I think a few questions are fair to
ask: Who agreed to the bailout? What were the names of the
congressional leaders who met with the President and agreed to the
bailout? When did they know? Who did they tell prior to the bailout so
that people could call and buy millions of pesos and get a 20-percent
return on their investment with your money that they get the profits?
And above all, what can we do as a Nation to keep this from happening
again?
And I hope that the American people will not let this slide. There
are still $15 billion in that account that could be spent, and we have
already seen the President use it once. It should not be used again.
But until we can pass legislation which is going to take awhile and
will only take place if the people of America demand it, then they have
to be held accountable by the voice of the American people.
I again want to thank the approximately 80 House employees that we
have kept late. It is almost 5 o'clock, Friday afternoon. I would like
to let them go home. I thank the gentlewoman from Ohio [Ms. Kaptur]
very much.
Ms. KAPTUR. Mr. Speaker, I thank the gentleman from Mississippi [Mr.
Taylor] for this special order.
____________________