[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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