[Congressional Record Volume 141, Number 43 (Wednesday, March 8, 1995)]
[Senate]
[Pages S3664-S3667]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
MEXICAN PESO CRISIS AND BAILOUT
Mr. D'AMATO. Mr. President, it does not take a great economic wizard
or professor to know that some deeply troubling things are taking place
with the American economy. So I am going to address myself to a couple
of points, because when we see a 10-percent drop in the value of the
dollar against some foreign currencies, the dollar going from close to
100 yen per dollar to below 90, and now so-called stabilizing at or
about 90, this should be very, very troubling to people.
Mr. President, the time has come for Congress to stand up and fight
for the American taxpayers--the men and women who must work harder and
harder just to make ends meet.
Last month, President Clinton ignored the will of the American people
to bail out a mismanaged Mexican Government and global currency
speculators. That was wrong.
[[Page S3665]] Now that the dollar is in a free fall, Congress must
closely examine the administration's raid on our Exchange Stabilization
Fund to bail out Mexico. That fund, known as ESF, is supposed to be
used to strengthen the dollar. It was never intended to prop up either
the Mexican peso or foreign currency.
The American taxpayers and the American dollar have taken a double
hit. First, the failure of the balanced budget amendment has sent a
clear signal to the economic markets that we do not have the courage to
cut the deficit and strengthen our economy.
And then, add to that, the President of the United States out
campaigning against the balanced budget amendment, telling the world's
economic markets that we are not serious about reducing our deficit. If
we do not get the Federal deficits under control, we are going to be
Mexico II.
It is ironic, Mr. President, that here we are fighting to stabilize
Mexico's peso and our dollar is just in free fall. Oh, we have propped
it up for a while. But what the marketplace is telling us is, if you
continue this, if you do not have the courage to get your house in
order, you will be Mexico II.
It is ironic that we spend as much time as we have with Mexico, the
President lobbying Members of this Congress to support loan guarantees,
first $40 billion, now we have $20 billion, and campaigning against a
balanced budget amendment that would do something that would have an
impact to strengthen the American dollar, to cut the deficits, to bring
interest rates down. And now we are faced with just the opposite.
The second tough hit we took was the administration's blatant
disregard of the will of the governed when they opened up our Treasury
to $20 billion of our taxpayers' money.
Now, who does that money go to? Where is it being spent? There is not
one Member of this Congress who can tell us how that money is being
spent. There is not one Member of this Congress who can say that the
Mexican Government is not still continuing to print pesos.
Why are we doing this? Who is getting paid off? Who is getting the
money down there?
We just read where we have the man who was murdered, the No. 2 man in
the Mexican Government, his brother-in-law ran away and they found he
has $6.5 million in the bank, American dollars.
Is that what we are doing? We are not talking about a democracy. That
is a corrupt, dictatorial government. Those elections are a farce. It
is about time we ponied up and told the people the truth.
Never before has a President sent $20 billion from our Exchange
Stabilization Fund to bail out a foreign country. This is not the
President's personal piggy bank.
Mr. President, Congress must not stand on the sidelines while the
administration allows the dollar to fall in a failed attempt to save
the peso and a failed administration policy toward Mexico. Congress has
an obligation to insist that the administration account for its
actions.
The Banking Committee will hold hearings tomorrow and Friday on
Mexico and on the administration's use of the funds to bail out Mexico
and the impact of Mexico on the dollar. We have an obligation to
determine what the administration knew about Mexico and when did the
administration know it. We have an obligation to investigate whether
the administration's inaction or silence caused the crisis or
exacerbated it. We have an obligation to find out if this
administration advised Mexico to devalue the peso.
The vast majority of Mexicans, Mr. President, deeply resent the
Clinton administration's meddling in their affairs. There is a grave
risk that the Mexican people will blame the United States for Mexico's
economic meltdown.
Could you imagine if your interest rates on your home went from 20
percent on the mortgage to 85 percent and you were told that is because
the Americans have insisted on these new austere measures? Is that
designed to gain us respect and confidence from the Mexican people?
The Mexican economic policy should be set in Mexico and not in
Washington, DC.
The President has set a terrible precedent. What happens next time
the peso collapses? What happens when some other country hits an
economic currency collapse? Does the American taxpayer come forward and
bail them out? What happens if our neighbors to the north have serious
economic problems? We gave $20 billion or made it available to Mexico.
Certainly Canada is every bit as important, and historically has been
very close to this country.
Can we afford to bail out the global currency speculators every time
a foreign currency collapses? Who will bail out the United States if we
collapse under a mountain of debt? The Japanese? The Germans? I doubt
it.
Make no mistake about it. The time for Congress to act has come. I
understand that, as of March 3, the Mexican Government has already
drawn down $3 billion of the first $20 billion and it will draw down
another $7 billion by the end of June.
Before Mexico draws down further funds, and particularly in view of
the deteriorating situation in Mexico, I think Congress must reassert
its right and its prerogatives with regard to this matter.
Congress must consider whether or not we should amend the ESF statute.
The President was wrong to go around Congress to bail out Mexico, and
although I recognize that the Secretary of the Treasury must have some
discretion in administering these funds, Congress must have the final
say on the spending of $20 billion of taxpayers' money on what amounts
to foreign aid.
The Constitution says we have to appropriate. This was just a
mechanism and a vehicle to get around this, a loophole. Never intended
for these purposes. Now that the dollar is under assault, the American
people have a right to know the full facts. More of our money is being
shipped to Mexico, and before it is being shipped, what is going to be
taking place with that money? Mr. President, we must fight for the
American taxpayers, not for mismanaged foreign governments and global
currency speculators.
Mr. President, to conclude, let me say again that what we have seen
is a misuse of this fund. Mr. President, that fund was never set up to
be a guarantor or guarantee for foreign currencies. There was no
prohibition, but it certainly was not set up for that purpose.
It seems to me that Congress has an absolute obligation, at the very
least, to see how those moneys are being utilized and that the
administration cannot hide behind a shield of some kind of executive
immunity; that certainly at the very least we should know what
conditions are being imposed as it relates to the money being drawn
down, whether or not Mexico is complying, whether or not it was
practical for those conditions that are being set out to be
implemented.
Is it practical to raise interest rates to a height where we may have
a revolution in the country? What about the stability of the Mexican
Government? All of these are questions that are absolutely mandatory.
We have a responsibility. The Government may have used this loophole--
the President and the administration--but we have an absolute
obligation to see how these funds are spent, at the very least, if not
amend the statute, to see that this kind of invasion of the Treasury
without congressional authority is never undertaken again. We intend to
pursue that.
Mr. President, I think this should be very disturbing to all Members
of Congress--Democrats and Republicans. There is no accountability. We
are fighting to cut the budget. Yet here is $20 billion, and I daresay,
$3 billion at least has been spent. We have not been notified how it
has been utilized, nor whether this is just more money going to more
corrupt officials, to more speculators.
Whether or not the American people have had a say in this, seems to
me to be of some consequence and some importance. We, as their
representatives, have had little if anything to say. We have little in
the way of ability to give an accounting of how these taxpayers'
dollars are being utilized.
Mr. President, I yield the floor.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
[[Page S3666]] Mr. HELMS. Mr. President, I ask unanimous consent
that the order for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. HELMS. Mr. President, Senator Dole and myself, and I estimate
about 30 to 35 Senators who met at lunch today, had a purpose yesterday
in my offering the pending amendment. We wanted to send a clear and
unmistakable message to the administration that any proposal to make
life easier for Fidel Castro will be vigorously opposed on a bipartisan
basis by a majority of the U.S. Senators. The presence of Senator Dodd
on the floor illustrates that.
I believe that the point has been made. I believe it has been heard
on Pennsylvania Avenue. If it has not, perhaps they should order some
hearing aids.
Let me make a confession or two. First of all, I do not like to break
the Senate rules, or bend them. When I offered the amendment yesterday,
I knew that it was legislation on an appropriations bill.
The distinguished Senator from Hawaii and I have a little joke about
sanctimony, about when an amendment is legislation on an appropriations
bill. This is done all the time. But that does not make it right,
really.
So my intent yesterday was just to make a point--and I had discussed
with Senator Dole my intention to make a few remarks, which I did, and
then to withdraw the amendment. But there was so much excitement about
the amendment and so much support for it that I had to back up and see
what I had to do.
The pending amendment, the Helms amendment, as the television is
referring to it, is in fact the exact text of S. 381, ``The Cuban
Liberty and Democratic Solidarity Act,'' which I introduced on February
9, with 21 cosponsors. There is a companion bill in the House with a
number of cosponsors--I do not know the exact number.
Let me say this: As chairman of the Senate Foreign Relations
Committee, and the distinguished Senator from Connecticut is an able
member of that committee, I guarantee--and I think Senator Dodd will
help me--that S. 381 will be the subject of a hearing, as early as
about the 1st of May, before we get to it because of various schedules
in the Senate.
I say again that the pending amendment is legislation on an
appropriations bill. While every appropriations bill does have
legislation in it, at least everyone which I have seen, I do not enjoy
testing the working rules of the Senate.
Mr. President, I ask unanimous consent to vitiate the yeas and nays
on the pending amendment.
The PRESIDING OFFICER (Mr. Gorton). Is there objection?
Mr. DODD. Mr. President, reserving the right to object, and I will
not object, first, I thank my colleague from North Carolina for his
courtesy.
Also, something that should come as no great surprise to people who
have been around here any length of time, the Senator from North
Carolina, I suppose next to our distinguished colleague from West
Virginia--I think he would agree with that--is about as good a master
of rules as there is in the U.S. Senate, but also one who respects the
rules. He knows how to use them effectively, but also respects them. I
am not surprised in any way that he would take the position he has on
the procedural issue here at all. I commend him for that.
This is a complicated piece of legislation. There are a lot of
sections to it. I am delighted that there will be a hearing. I look
forward to it and will participate in it.
Let me also say, Mr. President, if I can, that I picked up
yesterday's morning paper and read the headline of the paper and had no
prior awareness or knowledge that something was changing with regard to
our policy in Cuba. Whether or not I agreed with the sanctions being in
place, the fact they were there, the fact that something may be done,
came as somewhat of a surprise.
I have suggested to my colleague, Mr. President, the Senator from
North Carolina, that we might request in the next few days a meeting
with the appropriate personnel from the State Department or the White
House to have a private briefing with Members as to exactly what is
being considered, what actions may be taken.
I think that may be an appropriate way to find out whether this is
exactly just a news story or there is something more to it. We can find
that out. I certainly support the Senator in that request that we get a
briefing.
Again, I look forward to the hearing. I appreciate immensely the
decision of the Senator from North Carolina, the chairman of the
committee, not to proceed with this particular amendment at this time.
The PRESIDING OFFICER. The Senator from North Carolina has asked
unanimous consent to withdraw the yeas and nays.
Without objection, it is so ordered.
Mr. HELMS. Mr. President, I now withdraw the amendment.
The PRESIDING OFFICER. The Senator has the right.
The amendment (No. 326), as modified, was withdrawn.
Mr. HELMS. Mr. President, I thank the Chair. I thank my friend from
Connecticut. It is always a pleasure to work with him.
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. MURKOWSKI. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. MURKOWSKI. Mr. President, I ask unanimous consent that I may
speak for up to 10 minutes, as if in morning business.
The PRESIDING OFFICER. The first committee amendment is pending.
Mr. MURKOWSKI. Mr. President, I ask that the pending amendment be set
aside until I complete my speech.
The PRESIDING OFFICER. Is there objection?
Mr. BUMPERS. Mr. President, reserving the right to object, and I
shall not object, I would like the unanimous-consent order to also
agree that upon the completion of the remarks of the Senator from
Alaska, I be recognized for the purpose of offering an amendment.
The PRESIDING OFFICER. The Senator from Alaska need not ask that the
committee amendment be set aside. He has asked unanimous consent to
speak as if in morning business.
Does the Senator from Alaska modify his request, to be followed by
the Senator from Arkansas?
Mr. MURKOWSKI. The Senator from Alaska is pleased to modify.
The PRESIDING OFFICER. Is there objection to the request as modified?
Without objection, it is so ordered.
The Senator from Alaska is recognized.
Mr. MURKOWSKI. Mr. President, yesterday, Senator Craig and I, and a
number of our colleagues introduced the 1995 mining law reform bill.
Mr. President, during the last several years, members and staff of
the Committee on Energy and Natural Resources have spent thousands of
hours debating, staffing, and pontificating reform of the 1872 mining
law.
During the 101st, 102d, and 103d Congresses, legislation to reform
the 1872 mining law has been introduced, debated, and actively pursued.
Last year, Congress came within striking distance of enacting
comprehensive legislation. Unfortunately, negotiations on a final bill
broke down during conference consideration and Senate and House
leadership made the decision to pull the plug on reform in the 103d.
Mr. President, I rise today to join with Senator Craig and others to
begin the debate on mining law reform in the 104th Congress. I've
thought long and hard about reforming the 1872 mining law. What effect
will reform have on the mining industry? Will the legislation cost
jobs? What impact will reform have on exploration and development in
the United States? Will the environmental community support mining law
reform? The bottom line is this: The voters sent a clear message to
Congress in the November elections. No more delay, no more gridlock;
get on with the Nation's business.
The debate over mining law reform has been around longer than many of
us in the Senate. Everyone agrees there should be reform, the question
is what kind of reform?
We need to protect the environment, but we also have a responsibility
to
[[Page S3667]] protect and create jobs in the United States. We should
encourage exploration and development in the United States, not only
for the hardrock mining industry, but for all of our natural resource
based industries. We should not drive these industries off shore.
During the last 12 years we've seen the oil and gas industry lose
approximately 500,000 jobs in the United States. I do not want to see
this happen to the hardrock mining industry.
The legislation we are introducing today is real reform. It is
comprehensive reform that addresses every substantive issue raised
during the past several years of debate.
patents
Critics argue that patenting must be eliminated because individuals
can patent/purchase land for $2.50 per acre and that some of these
patented lands can be used for nonmining uses--ski cabins or fishing
lodges.
The Craig-Murkowski bill specifically requires miners to pay fair
market value for the surface of mineral-bearing lands and includes a
provision requiring all patented land to be used for good faith mining
purposes.
If the Secretary of the Interior discovers patented land being used
for any purpose other than conducting good faith mineral activities,
the Secretary is required to serve notice to the owner of the patent to
stop nonmining activities. If the owner does not comply with the
Secretary's notice, the State in which the patented land is located
will have the opportunity to take title to the patented estate. If the
State does not want the land, title and interest in the estate will
revert to the Federal Government.
royalty
Critics argue that individuals are allowed to extract minerals from
the Federal estate without paying a royalty to the Federal Government.
The Craig-Murkowski bill requires miners to pay a 3-percent net
proceeds royalty. The royalty is modeled on the Nevada net proceeds on
mines tax, a well-established program which--like the mining taxes of
many of the western States--collects substantial revenues at a very
modest administrative cost.
In 1993 Nevada collected $34 million in net proceeds taxes at an
administrative cost of less than two-tenths of 1 percent.
The bill shares royalty revenues with the States. One-third of the
royalties will be distributed to the States from which production
comes, one-third to individual State abandoned mine funds, and one-
third to the U.S. Treasury.
Why a net royalty for hardrock mining and a gross royalty for oil and
gas?
It's simple, oil and gas come out of the ground in a condition almost
ready for market.
Impurities are then extracted from the oil and gas.
Gold, silver, copper, and other hardrock minerals come out of the
ground as raw ore in the form of rock-like material.
Before a gold bar can be produced, several steps must be taken that
add value to the product.
Crushing; separating rock from the mineral; beneficiating to remove
foreign materials;
producing a concentrate; and smelting.
In short, an operator must take several steps to get hardrock
minerals ready for the market. The theory that the oil and gas industry
is similar to the hardrock mining industry is just not true.
reclamation
Critics argue that the hardrock mining industry needs Federal
reclamation standards.
In 1979, in a study authorized by the Surface Mine Control and
Reclamation Act [SMCRA]--the COSMAR study--the National Academy of
Sciences concluded that uniform Federal reclamation standards--like
those in SMCRA--were not appropriate for hardrock mining.
Furthermore, in January 1995, the Western Governors' Association
[WGA] released a position paper on mining law reform in the 104th
Congress. The WGA specifically requested that ``Reclamation on federal
and non-federal lands should be conducted at the state level, through
existing state abandoned mine programs where possible, rather than
creating new duplicative federal reclamation programs.''
In other words, please don't create uniform Federal reclamation
standards.
In 1995, every State with substantial areas of Federal lands open to
mineral location under the general mining laws has adopted substantive
reclamation standards for hardrock mining. State standards are tailored
to the environment of the States where the mining will occur.
Disturbances created by mining on Federal lands must be reclaimed, but
the standards found in State reclamation law should provide the
substantive requirements of every reclamation program. The Craig-
Murkowski bill recognizes that State reclamation standards, along with
applicable Federal and State environmental requirements, are adequate
to prevent unnecessary and undue degradation.
reclamation
During last year's House-Senate conference, over my objection,
language was included in the chairman's mark which gave the Secretary
of the Interior authority to regulate control over western water
resources.
The Craig-Murkowski bill does not. I repeat, this bill does not
include any provisions which threaten to upset the historical vesting
control over western water resources in the Western States.
The Western Governors' Association has made it clear that they don't
want the Federal Government involved in the regulation of western water
rights.
suitability
Critics argue that the Secretary of the Interior should be allowed to
make a suitability determination related to each mining proposal on
Federal lands.
The Craig-Murkowski bill does not include a suitability provision
because the provision is unnecessary and redundant.
Federal lands are already required to go through a suitability test.
Lands open to mineral entry have gone or will go through the Department
of the Interior resource management process. If people are not
satisfied with the Bureau of Land Management's Land Management Program,
Congress should change BLM, not insert suitability language in a mining
law bill.
In addition, all mining plans of operation on Federal land undergo
analysis under the National Environmental Policy Act [NEPA] either in
the form of an environmental assessment or a full environmental impact
statement.
Finally, any lands with special characteristics can be withdrawn from
entry under the mining law pursuant to section 204 of the Federal Land
Policy and Management Act of 1976 [FLPMA].
Mr. President, again, as I stated earlier, this legislation is
comprehensive reform.
I say to the environmental community and the mining industry, if you
truly want reform, this is the year.
If we fail to enact reform this year it will not be through lack of
effort. I will pursue comprehensive reform starting with a hearing this
month to consider the legislation we introduce today.
I urge my colleagues to support the bill.
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