[Congressional Record Volume 141, Number 29 (Tuesday, February 14, 1995)]
[Senate]
[Page S2663]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


          SENATE CONCURRENT RESOLU- TION 6--RELATIVE TO MEXICO

  Mr. MACK (for himself, Mr. D'Amato, Mr. Shelby, Mr. Bond, Mr. 
Faircloth, Mr. Grams, Mr. Frist, Mr. Brown, Mr. Murkowski, Mr. Bennett, 
and Mr. Gramm) submitted the following concurrent resolution; which was 
referred to the Committee on Foreign Relations:

                             S. Con. Res. 6

       Whereas Mexico is an important neighbor and trading partner 
     of the United States;
       Whereas on January 31, 1995, the President announced a 
     program of assistance to Mexico, that includes swap 
     facilities and securities guarantees in the amount of 
     $20,000,000,000, using the exchange stabilization fund 
     established pursuant to section 5302 of title 31, United 
     States Code and the Federal Reserve System;
       Whereas the program of assistance also involves the 
     participation of the Federal Reserve System, the 
     International Monetary Fund, the Bank for International 
     Settlements, the International Bank for Reconstruction and 
     Development, the Inter-American Development Bank, the Bank of 
     Canada, and several Latin American countries;
       Whereas the involvement of the exchange stabilization fund 
     and the Federal Reserve System means that United States 
     taxpayer funds will be used in the assistance effort to 
     Mexico;
       Whereas assistance provided by the International Monetary 
     Fund, the International Bank for Reconstruction and 
     Development, and the Inter-American Development Bank may 
     require additional United States contributions of taxpayer 
     funds to those entities;
       Whereas the immediate use of taxpayer funds and the 
     potential requirement for additional future United States 
     contributions of taxpayer funds necessitates congressional 
     oversight of the disbursement of funds from the exchange 
     stabilization fund, the Federal Reserve System, and the 
     International Monetary Fund; and
       Whereas the efficacy of the assistance to Mexico is 
     contingent on the pursuit of sound economic policy by the 
     Government of Mexico: Now, therefore, be it
       Resolved, That it is the sense of the Congress that--
       (1) the Secretary of the Treasury should, in conjunction 
     with reports required under section 5302 of title 31, United 
     States Code, by te 30th day after the end of each month, 
     submit a detailed report to the Committee on Banking, 
     Housing, and Urban Affairs of the Senate and the Committee on 
     Banking and Financial Services of the House of 
     Representatives describing, with respect to such month--
       (A) the condition of the Mexican economy;
       (B) any consultations between the Government of Mexico and 
     the Department of the Treasury or the International Monetary 
     Fund; and
       (C) any funds disbursed from the exchange stabilization 
     fund, including any swap facilities or securities guarantees, 
     pursuant to the approval of the President issued on January 
     31, 1995;
       (2) each report submitted under paragraph (1) should 
     include, with respect to the month for which the report is 
     submitted--
       (A) a full description of the activities of the Mexican 
     Central Bank and Mexican exchange rate policy, including the 
     reserve positions of the Mexican Central Bank and data 
     relating to the functioning of Mexican monetary policy;
       (B) information regarding the implementation and the extent 
     of wage, price, and credit controls in the Mexican economy;
       (C) a complete documentation of Mexican tax policy and any 
     proposed changes to such policy;
       (D) a list of planned or pending Mexican Government 
     regulations affecting the Mexican private sector;
       (E) any efforts to privatize public sector entities in 
     Mexico; and
       (F) a full disclosure of all financial transactions, both 
     inside and outside of Mexico, directly involving funds 
     disbursed from the exchange stabilization fund and the 
     International Monetary Fund, including transactions with--
       (i) individuals;
       (ii) partnerships;
       (iii) joint ventures; and
       (iv) corporations; and
       (3) the Secretary of the Treasury should continue to submit 
     reports under paragraph (1) until the Secretary determines 
     that no further risk exists to United States taxpayers of 
     default by the Government of Mexico on funds provided from 
     the exchange stabilization fund, the Federal Reserve System, 
     or the International Monetary Fund pursuant to the program of 
     assistance approved by the President on January 31, 1995.

 Mr. MACK. Mr. President, a few weeks ago, President Clinton 
arranged a financial package for Mexico. The package involves the 
exchange stabilization fund, the International Monetary Fund, the 
Federal Reserve, and other international organizations and governments 
to help Mexico get through its liquidity crisis. There is no doubt that 
the United States has a great interest in the health of Mexico's 
economy. We are concerned about Mexico, not only as a trading partner 
but as a good neighbor. This particular financial package expands that 
relationship. Indeed, it puts U.S. tax dollars at risk, and Congress 
needs to play an oversight role.
  I am concerned that Mexico's problems leading to this financial 
arrangement were rooted in bad economic policies. Mexico's central bank 
violated sound money principles. Excessive money supply growth was the 
root cause of the devaluation of the peso. Followup policies of wage 
and price controls will drive away private investors and hurt Mexican 
citizens.
  My understanding is that Treasury Secretary Rubin has promised the 
House and Senate Banking Committees a ``detailed picture of 
developments in Mexico'' so that Congress can be fully informed of 
Mexican economic policies and therefore its ability to repay loan 
obligations. The Treasury is currently required to report to Congress 
on any disbursements from the exchange stabilization fund. Because of 
the magnitude of the current commitment, I feel it is necessary for 
Treasury to provide additional information to the Banking Committee 
regarding the condition of the Mexican economy and consultations 
between the Government of Mexico and the International Monetary Fund or 
the United States Treasury Department. That is why I, with several 
other Senators, am introducing the Mexican Loan Compliance Resolution.
  This resolution will make sure that the information Congress needs to 
evaluate the Mexican loan is the same information that will be provided 
by Treasury. The resolution asks for Treasury to provide: Information 
on monetary policy in Mexico, including potential devaluation plans and 
information on the Mexican money supply; information on the institution 
of wage and price controls, changes in tax policy, and privatization 
efforts; a list of planned or pending Mexican Government regulations 
affecting the Mexican private sector; and a full disclosure of all 
financial transactions directly involving funds disbursed from the 
exchange stabilization fund and the International Monetary Fund.
  Just as American voters made clear to our government in November that 
they wanted change, Mexican voters rallied for change in their election 
last Sunday. The Institutional Revolutionary Party [PRI], the party of 
President Zedillo, that delivered the devaluation of the Mexican peso, 
suffered a bruising defeat. The people in the Mexican state of Jalisco 
voted overwhelmingly for candidates from the National Action Party 
[PAN], electing a new governor, achieving a majority in the state 
legislature, and winning 90 of 124 municipal offices. While only the 
Mexican people can determine whether the PAN party will fully reflect 
their desire for change, the Mexican people recognized who was 
responsible for 40 percent of their purchasing power vanishing with the 
devaluation, and they held their leaders accountable. The new Congress 
elected in November recognizes that it's accountable too. By ensuring 
that Mexico follows policies that will help the Mexican people and 
strengthen its economy, we will fulfill our obligation to protect 
United States taxpayers whose dollars are on the line.


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