[Congressional Record Volume 141, Number 59 (Thursday, March 30, 1995)]
[Senate]
[Pages S4844-S4868]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               EMERGENCY SUPPLEMENTAL APPROPRIATIONS ACT

  The PRESIDING OFFICER. The clerk will report the pending business.
  The bill clerk read as follows:

       A bill (H.R. 1158) making emergency supplemental 
     appropriations for additional disaster assistance and making 
     rescissions for the fiscal year ending September 30, 1995, 
     and for other purposes.

  The Senate resumed consideration of the bill.

       Pending:
       Hatfield amendment No. 420, in the nature of a substitute.

  The PRESIDING OFFICER. The Senator from Oregon is recognized.
  Mr. HATFIELD. Mr. President, I believe we were proceeding under a 
unanimous-consent agreement reached yesterday relating to the Daschle 
amendment being laid down at this time. Has that been vitiated?
  The PRESIDING OFFICER. It has not.
  Mr. HATFIELD. Mr. President, I ask unanimous consent that be vitiated 
at this moment, on the basis that Senator Daschle would like to take 
another opportunity to present his amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. HATFIELD. Mr. President, let me just briefly outline the status 
of this bill, where we are.
  I need not say that there are many amendments that we are aware of 
that have been indicated that many wish us to consider. I will say to 
the authors of each of those amendments that we are ready to consider 
those amendments and will be happy to do so.
  I have checked with the Republican leader and the Republican leader 
has indicated support for the matter of pushing this bill to completion 
today. I say today, and possibly tomorrow--but tomorrow will be 12:01 
a.m. onward, not beginning at 10 o'clock tomorrow, if we have to push 
it over. We are going to continue this bill through the night, if 
necessary into the a.m., in order to complete this bill.
  So, consequently I think everyone ought to be on notice that the time 
agreements that everyone has been so cooperative on thus far, in 
reaching time agreements--we would like to be able to consider every 
amendment and we will consider every amendment, hopefully with some 
time agreement for each one.
  I just make that comment because we must complete this bill tonight. 
We are, at the same time, I say to my colleagues, functioning on about 
eight subcommittees in conference on the first appropriations bill. We 
are doing that right now.
  So we will accommodate each Member if we can have a little ``heads 
up'' as to the content of your amendments, so we may have the 
subcommittee chairmen present on the floor when you offer your 
amendment in order to engage in discourse. Those subcommittee chairmen 
are now with the House committee chairmen, working out the first 
supplemental appropriations bill. So give us a few moments in order to 
secure their presence on the floor to take up and discuss your 
particular amendment.
  If it would be possible, I would like to have the listing, so we can 
get a little ``heads up'' ourselves, of what to expect 
[[Page S4845]] in terms of amendments. So I ask Members to give us that 
opportunity to know the content and therefore identify the 
subcommittee. We have our staff of these subcommittees here to assist, 
to expedite the whole process. We are happy to work with them.
  So with that, I yield the floor.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. BINGAMAN. Mr. President, I ask the manager of the bill, the 
Senator from Oregon, if it is appropriate to send an amendment to the 
desk. He indicates it is.


                 Amendment No. 426 to Amendment No. 420

(Purpose: To restore funding for programs under the Community Services 
                            Block Grant Act)

  Mr. BINGAMAN. Mr. President, I send an amendment to the desk and ask 
for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The bill clerk read as follows:

       The Senator from New Mexico [Mr. Bingaman], for himself, 
     Mr. Daschle, and Mr. Simon, proposes an amendment numbered 
     426 to amendment No. 420.

  Mr. BINGAMAN. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       On page 14, line 19, strike ``$100,000,000'' and insert 
     ``$113,000,000''.
       On page 31, line 9, strike ``$26,988,000'' and insert 
     ``$13,988,000''.

  Mr. BINGAMAN. Mr. President, I offer this amendment on behalf of 
myself and Senators Daschle and Simon. It is an amendment to restore 
the funding for the Community Services Block Grant for homeless 
assistance. This funding, which flows through the States to community 
action agencies, accomplishes many badly needed services throughout the 
Nation. It is my understanding it is particularly important in 
addressing the problem of homelessness because it is one of the few 
sources of funds that can be used to prevent homelessness before it 
occurs. It can and is, however, used in a variety of ways by the 
different States.
  In my home State of New Mexico, for example, this funding was used to 
help over 260 families and individuals last year in cases in which at 
least one family member had a job but could not yet obtain housing 
without assistance.
  Grants were made to help these families make one-time deposits for 
utilities or for rent. The assistance helped provide the stability of a 
permanent home and thus helped to ensure that the persons assisted 
would be able to keep their jobs and stay out of homelessness.
  This sort of help is especially important in States--like New 
Mexico--which have a shortage of transitional housing because most 
shelters have time limits on the time that one could stay there. 
Families could face constant relocation while they save for the 
necessary deposits to move into a permanent living situation.
  In New Mexico this use has proven to be cost effective. The average 
one-time grant under this program has been about $500. While the cost 
to house and feed a single individual has been at least $600 a month in 
my State, a family would be more expensive, of course, to house and to 
feed.
  Other States do equally good things with this homeless assistance 
funding. Massachusetts, for example, in addition to paying for rent 
deposits, also used funding of this type last year to prevent 
evictions, to prevent utility shutoff, to purchase blankets and 
heaters, provide counseling to children in domestic violence situations 
involved with the homeless. The other States have accomplished other 
worthy purposes with this relatively small amount of funding.
  Mr. President, it appears to me that this block grant program which 
benefits the neediest in our society is exactly the sort of program 
that many of our colleagues, particularly on the House side but here in 
the Senate as well, have been arguing for. It flows the money through 
to the States, and allows the States to dedicate it as they think it 
should be dedicated within the larger framework of homeless assistance.
  It is particularly surprising to me that it is one of the programs 
that has fallen victim to the present budget-cutting efforts under the 
pretense that we need to make this cut in order to meet the emergency 
needs in California from the last earthquake or the last flood. I 
believe that we need to restore this funding. Many States such as mine 
have not yet completed the fiscal year 1995 funding application 
procedure.
  Let me go through the list of States that will be hurt if this 
rescission is allowed to stand. These are the States that have not yet 
filed their application for funding in this fiscal year. They are still 
working on that application. They still hope to access these funds for 
their homeless populations. The States that stand to gain from the 
restoration of these funds and from the adoption of my amendment are 
Arkansas, California, Connecticut, Delaware, the District of Columbia, 
Georgia, Iowa, Kansas, Maryland, Massachusetts, Mississippi, New 
Jersey, my home State of New Mexico, North Dakota, Ohio, Oregon, Puerto 
Rico, Rhode Island, Virginia, Washington, and Wyoming.
  Mr. President, other States, in addition to this list, may also face 
funding cuts as a result of the rescission that is proposed in the bill 
if we do not adopt my amendment. There is no doubt in my mind that the 
rescission is likely to result in increased human suffering that can 
easily be prevented or reduced through programs like the one we have in 
New Mexico if we just continue the funding for the program.
  I would like to briefly mention the offset because I know there is a 
great concern which I share that we find offsets in these various 
areas. I have offered to restore this funding, this $13 million that is 
involved here. The Defense environmental restoration and waste 
management fund, as noted by the committee itself in its report on this 
legislation, has a very large amount of unobligated funding in a total 
program of $5 billion. Furthermore, a special commission, the Galvin 
Commission, has found that this money is not accomplishing its mission 
in an efficient manner and that we as a country, and the Department of 
Energy more specifically, should delay or modify this planned 
expenditure of funds.
  I will read a very short excerpt from the so-called Galvin Report on 
Alternative Futures for the Department of Energy National Laboratories. 
On page 30 of that report in talking about various environmental 
cleanup activities funded under this pot of money that I am going to 
get the $13 million from, the Galvin Commission said:

       Other activities should be delayed or modified so as to 
     await more effective and less costly technologies.

  Mr. President, what we are proposing here in this offset is taking 
$13 million out of a combined fund of approximately $5 billion, or 
essentially one-third of 1 percent. It is a mere drop in the bucket 
compared to the total funding flow. The committee itself has recognized 
that $100 million should be taken out of that. This amendment would 
simply increase that rescission from $100 million to $113 million so 
that we could go ahead and use the funds for homeless assistance, as we 
had planned to do when we authorized and appropriated funds last year. 
Although that $13 million will be a mere drop in the bucket of the 
Defense environmental restoration and waste management fund, it is two-
thirds of the total 1995 funding for the CSBG homeless assistance 
program.
  Mr. President, I think that fairly accurately describes what my 
amendment does. I think it is an excellent amendment. I urge my 
colleagues to support it. I think that the shift of funds to this 
purpose and the maintenance of effort in this purpose is essential.
  I conclude my remarks at this point and reserve any time. I believe 
there is a time limit. Mr. President, let me ask if we are operating 
under a time limit at this time.
  The PRESIDING OFFICER (Mr. Inhofe). I advise the Senator from New 
Mexico that there is no time limitation.
  Mr. BINGAMAN. In view of that, Mr. President, I yield the floor. I 
urge my colleagues to adopt the amendment.
  Mr. HATFIELD addressed the Chair.
  The PRESIDING OFFICER. The Senator from Oregon.
  Mr. HATFIELD. Mr. President, I am very happy to accept the amendment.
  [[Page S4846]] Mr. BINGAMAN. Mr. President, could I address a 
question to the Chair for information from the chairman of the 
committee?
  I would just want to know. My main concern--and I appreciate the 
offer and willingness to accept the amendment very much--I am anxious 
that the Senate prevail in the conference with the House. And for that 
reason, it has been my intention to go ahead and have a rollcall vote 
on this matter so as to make clear that the Senate feels strongly about 
this. I ask the Senator from Oregon if he thinks that is the 
appropriate course to follow.
  Mr. HATFIELD. Mr. President, in response to the question, I urge the 
Senator not to follow that procedure on the basis that we can expedite 
these amendments, especially ones like Senator Wellstone's amendment 
yesterday on his priority for children. We reached an agreement on 
that. I think I can base that on the fact that this bill we have before 
us has made some major changes as to what we received from the House of 
Representatives. We have spent less dollars in this bill, and we have 
rescinded fewer dollars. But we have moved those rescissions from some 
programs of less personal need of character to programs of need. We 
demonstrated that as a part of our creation of this bill--everything 
from children's needs to homeless needs to low-income energy assistance 
to student aid.
  So I say to the Senator that the amendment fits compatibly to the 
basic structure of this particular bill. Any Senator can ask for a 
rollcall. I am not suggesting that I can prevent that. I could not if I 
wanted to. But nevertheless I urge the Senator let us accept this 
amendment as a part of a Senate version of a rescission and 
supplemental for FEMA.
  Mr. BINGAMAN. Mr. President, I have great respect for the Senator 
from Oregon. If he is confident with the Senate position with regard to 
this, I know that the $13 million rescission in this homeless 
assistance was also adopted by the House. Since we would not be 
adopting the rescission, I think it is very important that we would go 
to conference intending to prevail on that issue. If I have the 
assurance of the Senator from Oregon that he believes that will happen 
without a rollcall vote, then I will defer to him.
  Mr. HATFIELD. I say to the Senator that there is a pattern in 
handling a bill of this kind that you have seen operate on the floor; 
that is, to move to table amendments. I do not know how that vote will 
turn out. But that is sort of our option. I would much rather see this 
amendment merged with the bill giving us further leverage with the 
House in terms of our conference and trading and what have you that has 
to go on to find a consensus, and I do not want to make a motion to 
table such an amendment because I think it has validity.
  Mr. BINGAMAN. Based on that assurance, Mr. President, I will not ask 
for a rollcall vote at this time and allow the amendment to be voice 
voted. I urge all my colleagues to support it. I think it is a major 
improvement in the legislation, and hope it will be adopted.
  The PRESIDING OFFICER. The question is on agreeing to amendment of 
the Senator from New Mexico.
  The amendment (No. 426) was agreed to.
  Mr. HATFIELD. Mr. President, I move to reconsider the vote by which 
the amendment was agreed to.
  Mr. BINGAMAN. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. HATFIELD. Mr. President, I thank the Senator from New Mexico.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from New York.


                 Amendment No. 427 to Amendment No. 420

    (Purpose: To require congressional approval of aggregate annual 
assistance to any foreign entity using the exchange stabilization fund 
 established under section 5302 of title 31, United States Code, in an 
                    amount that exceeds $5 billion)

  Mr. D'AMATO. Mr. President, I send an amendment to the desk and ask 
for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The bill clerk read as follows:

       The Senator from New York [Mr. D'Amato], for himself, Mr. 
     Domenici, Mr. Stevens, Mr. Helms, Mr. Brown, Mr. Shelby, Mr. 
     Faircloth, Mr. Murkowski, Mr. Grams, and Mr. Pressler, 
     proposes an amendment numbered 427 to amendment No. 420:

       At the appropriate place, insert the following new section:

     SEC.   . CONGRESSIONAL APPROVAL OF CERTAIN FOREIGN 
                   ASSISTANCE.

       (a) In General.--Section 5302(b) of title 31, United States 
     Code, is amended by adding at the end the following: ``Except 
     as authorized by an Act of Congress, the Secretary may not 
     take any action under this subsection with respect to a 
     single foreign government (including agencies or other 
     entities of that government) or with respect to the currency 
     of a single foreign country that would result in expenditures 
     and obligations, including contingent obligations, 
     aggregating more than $5,000,000,000 with respect to that 
     foreign country during any 12-month period, beginning on the 
     date on which the first such action is or has been taken.''.
       (b) Effective Date.--Notwithstanding any other provision of 
     this Act, the amendment made by subsection (a) shall apply to 
     any action taken under section 5302(b) of title 31, United 
     States Code, on or after January 1, 1995.

  The PRESIDING OFFICER. The Senator from New York.
  Mr. D'AMATO. Mr. President, I have proposed hundreds of amendments. 
On very few occasions have I not asked that the clerk dispense with the 
reading of the amendment. But this time I wanted the clerk to read the 
entire amendment because it is rather concise. It says that we shall 
not permit more than $5 billion of our taxpayers' funds to be utilized 
for a loan program or to be given or made available to any foreign 
country without the approval of the Congress of the United States, 
without the approval of the people of the United States.
  What we have taking place is one of the most incredible, most 
dismaying abdications of our constitutional responsibility as Members 
of the Congress. As well-intentioned as the Mexican bailout may be--and 
I do not question the motivations of those in the administration--as 
much as we might want to help a neighbor, we have a system of laws in 
this country that requires the authorization and the appropriation and 
the expenditure of money be approved by the Congress of the United 
States.
  Now we have a fiction. A fiction has been created as it relates to 
the establishment of the Exchange Stabilization Fund which came into 
being when the United States moved from the gold standard. So as to be 
able to protect our currency against currency fluctuations, this fund 
was established and great authority was given to the Secretary of the 
Treasury. As a matter of fact, he could not be second-guessed as it 
related to the utilization of this fund to protect the American dollar. 
Congress could not intrude. Congress could not second-guess. He was 
given that authority, and that is as it should be.
  However, even in the Treasury Department, its memorandum as it 
relates to the utilization of these funds states quite clearly that 
these funds cannot be used for loan or aid programs--page 6. And I will 
ask permission to be able to submit that letter from the general 
counsel of the Treasury to the Secretary of the Treasury and call 
particular attention to page 6, the paragraph which says it cannot be 
used for a loan or foreign aid.
  Let me tell you, Mr. President, when you send $5 billion and have 
plans to send up to $15 additional billion to a country and that 
country can utilize these dollars for up to 7 to 10 years, that is a 
foreign aid program. That is not currency stabilization. The fact is, 
if they did not get the foreign aid, maybe their currency would 
devalue. But by any stretch of the imagination, I defy any Member to 
really buy into this fiction and say that this is not foreign aid or 
this is not an emergency loan program, an emergency loan program that 
will take anywhere from 1 to 7 to 10 years to repay.
  It has been difficult to get adequate information from the 
administration as it relates to the administration of this program, the 
conditions of repayment, for what these dollars are being used. I think 
it is rather ironic that at this point in time when we have a 
rescission bill and we are talking about rescinding anywhere from $14 
to $17 billion--and let me tell you some of the programs we are looking 
at, nobody can argue as to their merit. It is not a question whether we 
can afford it. It is a question of whether or not we are 
[[Page S4847]] going to get our house in order. I think it is rather 
ironic that when we have the Nation's Capital, right here, with a $1 
billion deficit, we are sending $20 billion to Mexico--taxpayers' 
money. Incredible. What about an aid program here in the District of 
Columbia?
  I find it ironic when my State of New York is at a $4 billion 
deficit, when the Governor and the legislature are facing hard choices, 
cutting back on Medicaid programs, cutting back on other worthy 
programs because we just do not have the money and you cannot continue 
to tax and tax and spend and spend, and we are cutting back, State 
after State, making the tough choices, here we are talking about a 
balanced budget 7 years out. My State has a $4 billion deficit. Why not 
a loan guarantee program to help bail them out? What about Orange 
County, $2.2 billion, laying off people--policemen, firemen, teachers.
  How about some foreign aid right here at home?
  Twenty billion dollars, to where? To a democracy? No way. To a 
corrupt government, narco dealers, an agricultural Secretary who served 
for 25 years as a billionaire, whose sons are involved in narco 
trafficking. We are bailing out currency speculators.
  How much of the $5 billion that we have already sent down there went 
to pay off currency speculators? And they got every single dollar back 
and, in some cases, 20 percent.
  Mr. President, I have had colleagues say to me, ``Well, you know 
something, if you don't go forward with this and the Mexican market 
collapses, they are going to blame you.''
  Well, let me tell you, we have a constitutional responsibility. And 
if we are going to make aid available to them, then let us make the aid 
available to them under conditions necessary, let us understand where 
the money is going. Let us control, not one of the these secret back-
room things with the administration, secrecy we do not know, giving it 
to them in tranches.
  Now I understand a very significant amount, up to $5 billion, is 
going to go out within the next couple of weeks. We are told, ``Don't 
worry. You don't have to worry. There will be repayment.''
  When they first told us about this program, the administration came 
forward and they said, ``If we have to use any money, any money 
whatsoever, then the program is a failure. Don't worry, because when 
they see the guarantees that are there, it is just like the United 
States, we are banking this, the world community is banking this. You 
don't have to worry.''
  Well, we have already sent $5 billion down. And, by the way, some of 
that money, they say they are going to repay us over the next 5 to 7 
years. Do you believe a government down in Mexico can guarantee we are 
going to get the money back? They say, ``Don't worry. We are funding 
with the oil revenues.''
  Well, I see my friend, Senator Murkowski, here. Maybe he will talk to 
you about the possibility of a repayment as it relates to the oil 
revenues; very, very, tenuous.
  How are you going to get the money? Are we going to send troops in to 
seize the collateral, the oil?
  Let me tell you something, if they wanted to do something, if they 
wanted to really have privatization, that is one thing. Let the free 
market determine. Why is the United States attempting to do what the 
free market should be doing? If they collapse because they were 
overspending, if they collapse because there was no value there, then 
let the market determine. Why should we rush in artificially to, so-
called, prop up their dollar, to pay their foreign debts, to pay off 
their obligations? It does not make sense.
  Mr. President, the Mexican bailout is a failure. What this 
legislation says is, before you send down more money, you come to the 
Congress the way you should. You get the authority from the Congress of 
the United States.
  And for my friends in the Congress to say, ``Oh, no, don't do 
anything; don't do anything,'' is wrong.
  If you think that the program is a good program, being administered 
the right way, then we should say ``Fine, vote against my amendment. 
Vote against it.'' But let me tell you something. If you think you know 
all of the facts and you are comfortable, you know all the facts, you 
know how that money is being administered, who is getting it, how we 
will be repaid, then I have respect for people who would then say, 
``Alfonse, this is a bad amendment. I can't support it.''
  But, if, on the other hand, we do not know how the money is being 
spent, we have doubts as to its being used in this manner, we have 
doubts as to the ability of the Mexican Government to deal with the 
problem, we have doubts that the free market system should be employed 
in this system, we have doubts about prepaying speculators who make 
vast fortunes, billions of dollars as we are bailing them out--they are 
getting their money, by the way, they are not putting their money 
back--I say this has been a failure.
  Yesterday, the Mexican market went down. It has already collapsed. 
Now they are talking about it went up 10 percent. Ten percent from 
what, when some of the stocks in the fund had a value of $5-plus and 
they are down now to 38 cents. And they say it went up 10 percent, 10 
percent on 38 cents. I think the administration is being a little bit 
disingenuous with us when they give us those kind of numbers.
  Look behind the numbers. Look to see whether revenue is coming back 
into Mexico.
  Do you really think the private sector is going to invest in there? 
The only time they are going to invest is if they are going to buy 
securities that are backed up by our money, because we say that we are 
going to see to it that we will pay off those debts and obligations. 
That is what has been taking place. It has collapsed.
  Mr. MURKOWSKI. Mr. President, will my friend from New York yield for 
a question?
  Mr. D'AMATO. Absolutely.
  The PRESIDING OFFICER. The Senator from Alaska.
  Mr. MURKOWSKI. I thank the Chair.
  The reference was made by the Senator from New York relative to 
bailing out speculators. We have never really had any acknowledgement 
from the administration as to just who held the debt, the Mexican 
bonds. We were told sometime ago, in an earlier discussion that the 
Senator from New York and I participated in, that these were bearer 
instruments. In other words, they were not issued in the name of a John 
Doe or a Sally Smith, but if you bought one you were a holder and, as a 
consequence of becoming a holder, there was no identification as to 
whom the holder is.
  This loan and guarantee program started out at $6 billion. It 
escalated to $40 billion and when the administration end-runned the 
Congress, the total package exceeded $50 billion--at least $20 billion 
of which comes from the United States.
  But my question specifically to the Senator from New York is, Why can 
we not find out who the holders of this debt are, the so-called 
speculators out there? And what is the difference between investing in 
a Mexican bearer bond and investing in the stock market?
  If you buy IBM shares today at 82 and then next week it goes down to 
62, do we expect the Federal Government to bail out that sophisticated 
investor who, with his or her eyes wide open, went in and bought that 
IBM stock? What is the difference between that and a Mexican bearer 
bond?
  Mr. D'AMATO. There is very little difference. Except that in this 
case, we, the U.S. Government, participated in repurchasing billions of 
dollars' worth of these instruments that people invested in and we have 
literally guaranteed that they would suffer no loss. Indeed, not only 
did they suffer no loss but, to add insult to injury, instead of--by 
the way, if, in the free market, you had the free market working, they 
would have gone down, just like the IBM stock and, in most of those 
cases, that Government could have repurchased them when they came in 
for 20 cents on the dollar, 30 cents on the dollar.
  No, we did not allow the free market to work. We went in and said, 
``Don't worry. The United States, Big Brother, the working middle-class 
families of America, we are going to provide you with $20 billion.''
  So those currency speculators, sophisticated investors, they got 
every dollar back they put in and, in some cases, a 20-percent 
increase. So instead 
[[Page S4848]]  of allowing the free market to work, the stock, IBM 
goes down--Lou Gerstner would not like to hear that--but if you bought 
the stock and it went down, you would think you lost. Can you imagine? 
Why should not the American people have us guaranteeing, whenever 
they--and I think that is the Senator's point--whenever they make an 
investment, whether it is in bond market or whether it is in the stock 
market, that if it goes down enough, we will come in and guarantee that 
they will be paid, plus get whatever the interest that they were 
promised on that bond, in this case 20 percent.
  It is the most fallacious--by the way, how did that help the Mexican 
economy? It did make some very sophisticated investors whole, made them 
happy. And I am sure that prior to this agreement being worked out, 
they understood they were going to take really substantial losses.
  So we took American taxpayers' money to bail out investors and 
speculators in this situation.
  I have to tell you, we are preparing to do more. That is right. In 
the next several weeks, if we do not do something like adopt this 
legislation, we will be shipping down to Mexico billions of dollars 
more. It is not enough that we gave them $5 billion. We are ready to 
give them more. Now I find that incredible. And we do not even know who 
these people are.
  Mr. MURKOWSKI. Let me again ask my friend from New York, you say we 
do not know who those people are. I find that very curious, and 
basically unacceptable. We are committing $20 billion from the economic 
stabilization fund as the Secretary of the Treasury see fit without any 
congressional oversight. The proposal of the Senator from New York that 
is before us would curtail any further utilization of that fund, and $5 
billion has already been committed, I gather.
  Mr. D'AMATO. It has already been sent down there.
  Mr. MURKOWSKI. We do not know how much has been expended, but the 
holders of these instruments, as they become due, are cashing in. They 
are not rolling over their investment. I assume that they have decided 
the best thing to do is get their cash. They got their 20-percent 
interest, and now they are pulling their funds out of Mexico.
  Mr. D'AMATO. They are taking the ``dough,'' as they say, and running. 
And if anybody thinks that they are going to reinvest, the only time 
they are going to reinvest is if they know we are going to guarantee 
repayment.
  Mr. MURKOWSKI. I wonder where that investment would be going. Would 
it be going into marks or yen outside the country, possibly?
  Mr. D'AMATO. There is no doubt that those dollars are being taken 
out. We have seen huge outflows of money by the currency speculators, 
by the people who are reclaiming their bonds. Not all of this $20 
billion is being used for bonds. But a substantial portion is even 
going to refinance Mexico's public debt.
  Now, if that is not a loan or foreign aid in contravention to what 
the Treasury Department's own general counsel said--if I might, in an 
opinion by Robert Rubin, the general counsel, in a letter which I would 
like to have my staff get so I can put it in the Record, said:

       Although loans and credits are clearly permitted under the 
     ESF, their purpose must be to maintain orderly exchange 
     arrangements and a stable system of exchange rates, and not 
     to serve as foreign aid.

  Mr. MURKOWSKI. I wonder if my friend will yield for another question.
  Mr. D'AMATO. Yes.
  Mr. MURKOWSKI. In view of this commitment--and I was just given 
figures relative to the total of $52 billion as the extent of the 
funding--some $17 billion from the IMF, $20 billion from the United 
States, which we have identified, and $10 billion from the Bank of 
International Settlements, and from about five other sources, totaling 
$52 billion. The American taxpayer has a right to know who are the 
general beneficiaries of this fortunate commitment by the Treasury 
Department, because the average American that invests, if he loses, 
tough; he has lost.
  Mr. D'AMATO. Mr. President, my friend is so right. If you ask, are we 
second guessing; sure we are. Our duty is to have oversight, not just 
to ship $20 billion and say we cannot micromanage. I am not looking to 
micromanage, but when you are reclaiming billions of dollars in 
securities, why would we not want to know who the people were? Why 
would we not send a representative down, as we do where you have 
financial collapses, and arrange to stretch out the repayment and to 
say to some of these people: Here is my million dollars; I want my 
million-dollar bond honored. I want you to pay a million dollars plus 
20-percent interest.
  You say: Wait a minute, Mr. Smith or Mr. Jones or Mr. Chou, because 
some of these come from abroad, we cannot. But I will tell you what we 
will do. We will pay you over a 10-year period. We are not going to pay 
you 20 percent interest. We will pay 3 percent interest, or maybe we 
will give you 60 cents on the dollar or 30 cents. To simply allow 
them--them being the Mexican Government and authorities--to repurchase, 
not even knowing who the people are, and how many are American citizens 
and how many are the investing bank houses of Germany, Japan, and other 
nations? We are told everything is going to collapse.
  I tell you that the only thing collapsing is our dollar. By the way, 
why should we not use some of that money to reduce the deficit here in 
the United States? We can do away with the rescission bill. Why do we 
not take the money right here and say that we are going to use this 
money for deficit reduction? We do not need a rescission bill. That is 
rather absurd, but it makes more sense than sending it down to a group 
of people who have demonstrated to the Mexican Government that they do 
not have the capacity to be entrusted with billions of dollars, 
particularly when it is not even their money.
  Mr. MURKOWSKI. Mr. President, why is this deal different than any 
other deal that basically turns out to be unsatisfactory, and when it 
comes down to a point where the Government cannot meet its obligation, 
or the financial house that has issued an instrument cannot meet the 
demand, the parties sit down and work something out relative to how the 
creditor is going to get paid. As the Senator from New York said, maybe 
50 cents, 20 cents, 30 cents on the dollar. And it addresses itself in 
a business fashion, and there is a winner and a loser. In most cases, 
both sides lose if the investment is not successful. But it has been 
pointed out here in this instance that the Federal Government has seen 
fit to step in.
  Why, I ask the Senator from New York, is it not more appropriate that 
we bail out, say, the investors in the Orange County debt?
  Mr. D'AMATO. I agree.
  Mr. MURKOWSKI. Somebody says charity begins at home once in a while. 
Is there a difference here between the Federal Government's obligation 
to step in and bail out the investors that hold the Mexican tesobonos? 
Why not those that hold the Orange County debt?
  Mr. D'AMATO. I agree. It seems to me that if we were going to use 
taxpayer dollars, a much better case could be made as it relates to 
guaranteeing and giving a loan guarantee, for example, to Orange 
County, so they could repay these dollars over a period of time. They 
have taxpayers. These are the citizens of Orange County that are being 
hurt. These are our constituents, U.S. citizens. That, to me, would be 
much more understandable.
  Mr. MURKOWSKI. Why do we know who those holders of the debt are, and 
we do not know who the holders of the tesobonos are?
  Mr. D'AMATO. Because our administration did not take the time to say, 
in negotiating in this agreement--and again we are rushing down to make 
this money available--look, we are not going to pay back dollar for 
dollar, and we want to identify who these people are, have them come 
in, and we will negotiate with them. I would like to know how much 
further the market would have collapsed. It went from 10 to 2 on a 
relative scale. I mean, would it have gone down to 1\1/2\?
  All this business about the damage being done--the Americans are 
hated there in Mexico now because interest rates have gone up. Home 
interest mortgages have gone from 20 to 80 percent. The Mexican people 
are blaming us, the bad Yankee. We are looked upon with disdain. We are 
not getting any credit for making American taxpayer dollars available. 
Meantime, 
[[Page S4849]] working men and women are scrimping and scraping to 
provide a better way of life for their families, and we just willy-
nilly turn the other way and send this money down to Mexico and we pay 
off speculators. I think maybe some would have been embarrassed.
  I do not know how many large institutions who invested money there 
were bailed out and made substantial profits. But I think the American 
people have a right to know whether they are American, whether they are 
Japanese, or whether they are German. But who were they, and who are we 
bailing out?
  Mr. MURKOWSKI. Mr. President, let me ask the Senator from New York a 
question relating to the obligation of a holder of an investment. If, 
through a mutual fund or a broker, an individual American acquired some 
of these bearer bonds--tesobonos--now, what obligation does that person 
have to report the gain or loss to the Federal Government on his or her 
income tax?
  Is that not a way of identifying who these holders are? Would not the 
Internal Revenue Service have a record of who held these bonds and have 
to report that information?
  Mr. D'AMATO. At some point in time, that is absolutely right, when 
the reported year for that transaction takes place they will be able to 
assert.
  Having said that, the IRS will--that will take some time, probably 
run into the next calendar year--but the IRS will be able to get an 
idea.
  It seems to me, though, that the Treasury people themselves have an 
obligation, before allowing these dollars to be used, to say we want to 
identify with specificity exactly ``who,'' when people come in and get 
paid off on the institutions.
  We have an obligation to know that. They never do this.
  Mr. MURKOWSKI. Mr. President, one of the explanations given in an 
earlier meeting that I think the Senator from New York was at when the 
question was asked: ``Who holds this debt?'' The explanation was ``They 
are bearer instruments.'' Like a check payable to cash, whoever holds 
it, owns it and can basically turn it into cash.
  I think there was a comment suggested, if this thing settles down and 
we try to work it out, then those that hold the debt will be known 
because they will be represented by themselves as they come in with 
their pile of tesobono and say we want to work something out with the 
Mexican Government to get paid.
  Why did the Treasury Department not see fit to try and address 
identification? Who are the beneficiaries of this $52 billion bailout?
  Mr. D'AMATO. Senator, an interesting point is raised. I will digress, 
as I do very often.
  We rightfully come under great criticism related to the savings and 
loan collapse and the bailout. In that case, people still think that we 
bailed out wealthy bankers, et cetera. They were the people--we can 
identify every one of them--and the average amount of money was in the 
nature, and I am hazarding a guess, of under $20,000. They were the 
small, middle-class depositors. They were the people who held harmless 
because the Federal Government made a guarantee.
  Our different case here, we are talking about sophisticated 
investors. We are talking about large brokerage houses. We are talking 
about mutual fund situations where we came in and did not even ask.
  In the case of the failed banks we obviously asked to see--these are 
our own citizens. We had to identify the banks, every single citizen, 
before he or she got back his money.
  Let me say, if some of them had over $100,000, they had multiple 
checking accounts. And we had a case of a charity in New York who did 
not know. They thought because they had multiple checking accounts and 
each was under $100,000, they are covered. They would be wiped out.
  We had to get special legislation by the Congress to see that our own 
citizens got back their money. Forget about interest--just got back 
their money.
  Here we are paying off foreign speculators who invested in foreign 
obligations 100 percent on the dollar, plus their interest on top of 
that, and we are told, ``We couldn't find out who they were.''
  Can you imagine? Of course we could have. We should have insisted on 
it. We should have insisted that they negotiate. Maybe we would want to 
make certain rules if some of the institutions that invested were 
people, pensioners, et cetera.
  We might say, ``Let's give them a break.'' If some of them were not, 
we would say we have no legitimate claim and maybe we will pay them 20 
cents on the dollar, 30 cents on the dollar.
  No, we ship this money around like it does not belong to us. Well, it 
does more than belong to us.
  Mr. MURKOWSKI. I wonder if the Senator from New York would yield for 
a minute for an examination of how risk works?
  Many of the bearer bonds were sold with the promise they would return 
20 percent interest or thereabouts. Very much, much higher than we can 
get in the United States on bonds.
  Of course, the investor has to look at that 20 percent and say, ``Why 
are they willing to pay so much more than the going rate that is 
prevailing in the United States?''
  Unlike what the investor would get if he or she went to his bank, 
their deposit would be basically guaranteed by the Federal Government--
$100,000 through the insurance that the Federal Government mandates 
that banks must carry.
  So, clearly, we have a case here where there was a consideration of a 
handsome return, 20 percent, by the issuance of these bonds. These 
investors had to make a decision whether to invest their money and run 
the risk associated with having to offer 20 percent to get the 
investment, or not invest at all.
  They had to be fairly sophisticated, because a person looking for an 
investment for his or her old age would be foolish to invest and try 
and generate 20 percent return because he or she would know that is 
very, very risky. If investors knew the Federal Government would bail 
them out, why, then, they are home free.
  Now, how in the world could we have made this transition? What were 
high-return, high-risk, investments have now been converted into an 
obligation of the U.S. Government.
  Now, as the Senator from New York knows, as the Senator from Alaska 
knows, if we can get the guarantee or if we can get the kind of bailout 
that this has developed, why, a person will take it. In the meantime, 
the American taxpayer is taking it in the pants.
  Mr. D'AMATO. There is no doubt, Mr. President, that this is one that 
goes down in history as one of the most misguided operations to rescue 
the Mexican economy. It is not working. It is not working.
  Again, if we read the reports now, it is stabilized. The peso, at 
6.7, approximately, to $1, where it used to be 3.5. It really has not 
recaptured any ground. It hit a high of 7.
  The fact of whether it is 6.7 or 8 or 9 is not in the final analysis 
going to rescue the economy. I will say, all the drums are already 
beating.
  My legislation, oh, horrible things--the Mexican economy has 
collapsed. The Mexican people have been injured as a result of what we 
have done. They hold us in disdain. We are in complicity with the group 
of corrupt politicians who have--we were sold a bill of goods about how 
great and decent and wonderful Mr. Salinas--how his administration was 
different, how free markets were working.
  I will say, the megaspeculator did well. The people in that 
government who sold out early in terms of the currency in the billions 
of dollars of currency transactions, they made out.
  I will say, that this administration, the President, the Secretary of 
the Treasury, withheld vital information and seduced the world and the 
American people into believing that everything was hunky-dory last 
year.
  Do not believe me, read the Washington Post. I will quote them. 
``Despite warnings, U.S. failed to see magnitude of Mexico's 
problems.'' We not only failed to see, we covered it up. Now, it is one 
thing not to reveal the problems and the failings of an ally, 
particularly when so important, and it is another thing to be totally 
disingenuous and untruthful with the American people.
  Here we have, back in April, May, August, September, people in the 
administration, when they knew that there were serious problems, when 
the intelligence agencies of this country said, ``You got real problems 
there.'' 
[[Page S4850]] September, Treasury Secretary expresses support for the 
policies of the Zedillo government, after he is elected--September, 
last year.
  In July and August, we had serious misgivings and warned--warned--the 
Mexican Government and officials that there were real problems. We knew 
what was taking place. We knew that there was a drain on the foreign 
exchange. But we did nothing. Yet, the Secretary of the Treasury, when 
he met with President Zedillo, said he supported his policies.
  In November, President Zedillo met with President Clinton and 
Secretary Bentsen in Washington. Nothing was said. In December, he is 
sworn in; December 9, the President of the United States touts Mexico.
  Listen to this. December 9--we knew that they were a basket case. The 
administration knew it. Do you mean to tell me the Secretary of 
Treasury did not tell the President of the United States what was going 
on? And they said--this is an article, not me, the Washington Post:

       President Clinton touts Mexico as a case study in 
     successful economic development at the Summit of the 
     Americas.

  This article was February 13, 1995. It is quite comprehensive. By the 
way, that was just less than 2 weeks before the Mexican Government then 
went through the devaluation, on December 20.
  So here we are, all during that period--August, September, October, 
November, December--our administration knowing, and we are telling 
everybody everything is wonderful, a case study in success.
  Let us talk about complicity. This is absolutely something that was 
horrendous. Now, to compound it by sending $20 billion down to people 
who do not have the ability--and not even ask who are we bailing out? 
Who are the people who are reaping the dividends? That is immoral.
  I have to tell you something else. If we in the Congress of the 
United States, for whatever political reasons, are seeking political 
cover, look the other way--we are absolutely deviating from what we 
should be doing. We are in dereliction of our duty and 
responsibilities.
  Mr. MURKOWSKI. Would the Senator yield. I would just like to explore 
a theory.
  I think the Senator from New York will recall at a meeting that was 
held in the leader's office in January, the Secretary of the President 
of Mexico was there, and at that time we were under the illusion that 
the current debt was somewhere in the area of $40-some-odd billion. I 
believe the Secretary indicated that the current debt, that is the debt 
that is due within the current year, was somewhere in the area of 70--
it was substantially more than we were led to believe by the Department 
of the Treasury.
  Let us assume for a moment that most of this debt was held by 
American investors who held these tesobonos; the debt is due, and the 
Mexican Government cannot meet the debt. What happens to the investment 
that went into Mexico? Mexico issued these bearer bonds and they got 
dollars. They did things with those dollars, things that we would 
assume would increase the economic vitality in Mexico. In any event, 
the Mexican Government could not meet the obligations. Is Mexico going 
to be any worse or better off if the American taxpayer reimburses 
Americans who hold that debt? Americans are going to be better off.
  Mr. D'AMATO. And other foreign investors.
  Mr. MURKOWSKI. Any foreign investor. But it makes, really, no 
difference to Mexico, does it?
  Mr. D'AMATO. Not to its people.
  Mr. MURKOWSKI. No.
  Mr. D'AMATO. As a matter of fact, tied to the repayment schedule, 
which they will never be able to carry out, has come the most austere 
measures placed upon the Mexican people. The Mexican middle class has 
collapsed. We are now viewed as truly the ``Ugly American'' in the eyes 
of the Mexican people. They are aghast at our intervention in their 
national sovereignty. And they happen to be right. It is one thing to 
help a neighbor in need. It is another thing to just simply take 
dollars, throw them down, and then tie their people, without the 
permission of their people, to the most incredible tax increases and 
interest rate increases, and create the business failures and collapses 
that will be blamed upon the United States of America.
  Mr. MURKOWSKI. The obligation falls to the Mexican Government, 
really, to pay back the $52 billion. But we are being told that we have 
to do this to stabilize the Mexican Government, to prevent an economic 
collapse. But really the beneficiaries are the holders of the debt and 
not the Mexican people.
  Mr. D'AMATO. Who have taken their money out. They are not going to be 
reinvesting. I think the Senator raised the point before. If you were a 
pension fund and you had invested $10 million or $1 million in these 
securities in Mexico, and now you got your money out, as a fiduciary--
or if you were a bank or, again, an investment advisor--under no 
circumstances would you be permitted, without exposing yourself to 
tremendous liability in terms of investing the dollars in that 
situation. That would not be the act of a prudent investment manager.
  So to hope you are now going to stimulate a recapitalization of 
Mexico with foreign dollars coming in is ridiculous. It is just not 
going to happen.
  However, Senator Murkowski is absolutely correct, people throughout 
the world are getting paid back on the moneys that they invested. We 
are paying them back, the American taxpayers. Look around: Working 
middle-class families, our farmers, our plant operators, our small 
businessmen--we are seeing to it that the people who invested in high 
risks, we are bailing them out. Terrific.
  Are the Mexican people saying thank you? They are not. I would not, 
if I were them. If my house mortgage went from 20 percent to 80 
percent, who do you think I would hate? The banks that are collapsing 
down there? We are going to bail them out. You want to talk about a 
bailout--sure. So the German speculators, they were there; the Japanese 
speculators, they were there; the Wall Street interests, they were 
there--they got bailed out. Not the Mexican people.
  The economy is worse, much worse. Now they talk about, ``Don't worry, 
they are going to come across the borders.'' They are coming across the 
borders now. Every time we offer a bill on legislation or we fail to 
send money down, we are going to be threatened that we are going to be 
invaded? We are.
  Let us do a job. We have a job to do. Because the immigration people 
are not doing a job--this administration or the past one--adequately, 
do not come to the American taxpayer and add to it, compound it, hit 
them now with $20 billion. And this is just the beginning, and it is 
not going to work.
  Mr. MURKOWSKI. So to walk through this very briefly, so we all 
understand the transfer of the obligation here, it has been transferred 
to the American taxpayer and the Mexican taxpayer by this action. The 
holders of the tesobonos are being taken care of by this action by the 
United States Treasury, the guarantee, the $5 billion that has already 
been extended. You would stop that with this action?
  Mr. D'AMATO. Absolutely.
  Mr. MURKOWSKI. The Senator's bill would say, ``No more.''
  Mr. D'AMATO. No more, unless you come to the Congress. And then let 
the Congress have the courage, let them tell the American people why 
they are sending money, where they are sending it, and under what 
conditions they are sending it.
  Mr. MURKOWSKI. And who would benefit from that.
  Mr. D'AMATO. And who would benefit.
  I say to Senator Murkowski, you never really did a finer job than 
bringing us right to the essence of this. What kind of free market are 
we talking about when the people who invested in the free market system 
had the Mexican people in Government, and the U.S. people in 
Government, guaranteeing their investment? That is not a free market 
system. You invest; you take a chance. You win or you lose. You do not 
have the Government coming to say we are going to bail you out. And 
that is what we are doing.
  By the way, to get the facts is incredible. Do you think it is easy 
to try to get the facts from the administration as to what they are 
doing? ``Oh, we cannot tell you because if we tell you, they will have 
a thing and they will 
[[Page S4851]] not know and speculators--the speculators will clean 
up.'' Or the tesobono will go down or the dollar will go even higher; 
the peso will go to even 7 or 8 or 9.
  The damage has been done. Let us wake up. You can just keep the 
charade up for so long. And after we pay off all the obligations and 
all the speculators, and all the people who invested get their money, 
what do you think is going to happen?
  Mr. MURKOWSKI. Then, theoretically, at least, the poor Mexican 
taxpayer is expected to come forward, regenerate the Mexican economy, 
and pay back the IMF, the United States--$20 billion, the $10 billion 
from the Bank of International Settlements--so the Mexican taxpayer has 
the obligation in the end, but his country at that time is in terrible 
shape.
  What we have done is--Mexico issued these bonds. They could not pay 
them. When they become due, Uncle Sam comes along and puts together a 
deal under the charade that we have to save Mexico from collapse. But 
what we are doing is: We are paying the holders, most of which are 
Americans who have seen fit to take a handsome return--the brokerage 
firms and various others--while we are paying foreign investors with 
U.S. taxpayer dollars. And then we look to the Mexican taxpayer and the 
Mexican economy to come back and pay these obligations.
  I wonder if the Senator from New York really believes, as the 
administration tells us, that our so-called loans are safe because we 
will have access to Mexican oil, if there is a default? Does the 
Senator believe for one moment that we have access to Mexico's oil or 
that we are going to have?
  (Mr. SHELBY assumed the chair.)
  Mr. D'AMATO. Absolutely not, notwithstanding every dollar that is 
supposed to go through the New York Fed as it relates to foreign 
imports. The fact is they are using these dollars. They desperately 
need these dollars now for their economy to support their social 
programs, and to support their other programs. The fact of the matter 
is that their exports are going down.
  Mr. MURKOWSKI. Production is in decline.
  Mr. D'AMATO. Production is in decline, and no one is going to give 
them the capital to get their production up because it is run by who?--
a bunch of robber barons, a corrupt government.
  Mr. INHOFE. Mr. President, will the Senator yield for a couple of 
questions?
  First of all, let me applaud the Senator from New York for bringing 
this to the attention of the American people. I have been presiding and 
listening, and join the Senator in offering this amendment. I applaud 
him for it. But I would like to back up a little ways and recall 
something to see if the Senator from New York agrees with this; that 
when Carlos Salinas first went in the perception was that his policies 
were stabilizing the economy, the peso was stable, and all of a sudden 
we had investors from Europe and other places who had never theretofore 
bought Mexican debt. So they came in.
  Then we had a meeting on the 6th of January--the Senator from New 
York I believe was attending that meeting of both the House and the 
Senate with the administration--with many officials, including Alan 
Greenspan, Robert Rubin, and others, at which time I asked the 
question: Since we are obviously protecting new investors who have 
bought Mexican debt, who are buying debt and being paid somewhere in 
the neighborhood of 20 to 25 percent, which implies to me that there 
are some risks involved, where are the European countries in joining us 
behind the guarantees of this debt?
  The answer was yes, they would be behind us.
  The question I have for the Senator from New York is that has been 2 
or 3 months ago now. Has he heard of any of the European countries who 
have now joined us in underwriting the guarantees?
  Mr. D'AMATO. To a very limited extent there has been some 
participation in this area. One country I believe joined with $3 
billion as it relates to short-term--very short-term--credit swaps. 
They have not been engaged in a massive kind of relief effort that we 
are involved in for loans up to 7 or 10 years. Then, of course, through 
their participation through the International Monetary Fund, which in 
the final analysis we will be called upon to help replenish--this is 
not just a $20 billion bailout. This is $20 billion plus the 
participation we owe the IMF, plus whatever it might be from the World 
Bank.
  So with the exception of some limited credit swaps, there has been no 
kind of coming forth on the scale of the magnitude which have been 
expected.
  Mr. INHOFE. That was leading to the second question I have for the 
Senator from New York; that is, another meeting took place on the 13th 
of January 1 week later with somewhat the same participants. At that 
time they were asked again. Where are the guarantors that are going to 
join us? At that point, it was not $20 billion, it was $40 billion. I 
have been fearful, since they had started to come for concurrence from 
both Houses of Congress and then went ahead and did it by Executive 
order that perhaps this $20 billion we keep hearing about is in fact 
closer to $40 billion, part one of the question; part two, I picked up 
a paper going through Dallas--I believe it was a newspaper in Mexico--
characterizing this amount of money as not loan guarantees but foreign 
aid.
  Mr. D'AMATO. I believe the Senator is absolutely correct. It is 
foreign aid when we become involved in not short-term propping up of 
the currency for 3 months or 6 months, which was traditionally used, 
and it is questionable whether or not it was ever intended to prop up 
foreign currencies. But if you want the argument that it helps us and 
that it helps our own currency fund, never before have we made a loan 
under a situation which has gone beyond a year, and in that one case we 
went the year. That was Mexico; in no other case. Once again, back in 
1982 we participated to the extent of $1 billion. We are now talking 
about $20 billion.
  I think the Senator from Oklahoma is absolutely correct. We are not 
talking about $20 billion. We are talking about $20 billion from the 
ESF fund, we are talking another $20 billion from the IMF fund, another 
unsubstantiated participation in the World Bank. We are talking about 
other economic swaps. We are talking about closer to $40 billion of 
taxpayers' money to maybe drawn down on.
  Mr. MURKOWSKI. The Senator from Alaska unfortunately has to leave the 
discussion. I wonder if the Senator from Oklahoma would carry on.
  I want to pledge to my friend from New York that I will work with him 
to stop this hemorrhage of the American taxpayer. In fact, we were able 
to hold a meeting, the Senator from New York as chairman of the Banking 
Committee, myself as chairman of the Energy and Natural Resources 
Committee, I think is an appropriate utilization of our oversight 
responsibilities. I think it behooves us collectively to work with the 
Finance Committee to develop a methodology so that we can tell the 
American taxpayers specifically who the recipients of this $52 billion 
bailout are because clearly it is not the Mexican people. It is the 
holders of high-risk debt that is generating a very handsome rate of 
return at the expense and the exposure of the American taxpayer.
  I can tell the Senator from New York and the Senator from Oklahoma 
that, if this $52 billion flows out, the people of Mexico are expected 
to pick up and pay that back. They are not going to be able to do it. 
And we know that. We should not kid ourselves. As a consequence, the 
American taxpayer will end up as the fall guy, and the sophisticated 
investment community in this country and abroad will be the 
beneficiaries. I think the American public is entitled to know who 
those beneficiaries are. I intend to work with my colleagues toward 
that end in appropriate identification of just where this handsome 
return is being funneled.
  I thank my friend from New York. I am pleased to join with him in 
cosponsoring this amendment.
  Mr. D'AMATO. I thank my friend and colleague from Alaska for really I 
think focusing in on the central theme. We talk about free markets. We 
are not allowing them to work. Then we come in and we pledge United 
States taxpayers and Mexican taxpayers to bail out unknown speculators, 
unknown investors. I would like to know who they are. And in 
contravention of the statute of the Constitution which says that 
elected representatives of the people of 
[[Page S4852]] Congress must approve the appropriations of taxpayers 
funds, it is our constitutional duty. It is spelled out in article I, 
section 9 of the U.S. Constitution. It says no money shall be drawn 
from the Treasury but in consequence of appropriations made by law. 
That exactly is not what is taking place.
  Mr. President, I see my colleague from North Carolina is here. I know 
he has a statement. He is a cosponsor of this legislation. So I am 
going to yield the floor.
  Mr. FAIRCLOTH addressed the Chair.
  The PRESIDING OFFICER. The Senator from North Carolina.
  Mr. FAIRCLOTH. Thank you, Mr. President. A perfect example of what we 
are talking about in the conflict and the lack of direction we have 
seen in this entire process has been that, according to the President's 
fiscal year budget of 1996, the net position of the exchange 
stabilization fund is only $18.3 billion. Now he is committing $20 
billion out of an $18.3 billion fund. That is by his own figures, not 
anyone else.
  But I think the most distressing thing about the entire thing is 
nearly 6 weeks ago I asked Alan Greenspan how Mexico got into this 
situation.
 His answer was over-domestic spending, over-borrowing and an out-of-
control trade deficit. I asked him which one of those we were doing at 
a greater rate than Mexico. And his answer? None, that we were doing 
them all.

  The real question is this: Who is going to bail us out? That is the 
difference. There is not anyone to bail us out. When the time comes, 
there is no bailout. And a perfect example of what is happening--and we 
have all seen it--is the decline in the dollar. The dollar went into a 
straight decline after we refused to balance the budget and when we 
became entangled with Mexico.
  President Clinton plans to give Mexico $20 billion. ``Give'' is the 
right word. Do not call it a loan. There is no chance of it being paid 
back under any conditions. It is an absolute giveaway.
  This type of thing is not new to Mexico. They have been through five 
or six of these so-called crises before. We simply do not have the 
money to bail them out. This $20 billion we talk about is supposed to 
be used to stabilize the currency of this country, and at the rate we 
are going there is no doubt we are going to need it to stabilize the 
currency of this country, and quickly.
  I think the President's plan is a bad idea from the beginning when 
you look at the fact that Mexico's foreign debt is $160 billion. It is 
higher than it was in 1982, when Mexico simply took a walk on the 
world, suspended interest payments, and precipitated the Latin American 
debt crisis bailout.
  Unfortunately, in the face of this crisis, President Clinton chose a 
flawed strategy that he has followed before. He followed it with health 
care. And that is a massive Government intervention. The last thing we 
need in Mexico is a massive intervention of this Government. And like 
before, the plan is being resisted from ordinary Americans who know 
they are going to wind up paying it back. The working taxpayers of this 
country do not understand how we can afford to send Mexico $20 billion 
when the United States is going into debt every day at $700 million or 
more.
  The thing about it that has been so confusing--and I have talked to 
the Senator from New York and everybody else about it--is that when we 
first heard of this crisis $12 billion was supposed to correct it. 
Later on, they told us it might take $25 billion. Then we went to a 
meeting and they said $40 billion would absolutely be such an overkill, 
so much extra money that we would not even have to use the $40 billion.
  Now it would appear now they are talking about $52 billion. We have 
no idea how much is involved. But there is one thing for sure. It is 
going to take a lot more money than a country going in debt at $1 
billion every working day ought to be spending. This is a problem for 
the Mexican economy and the Mexican people to address themselves. It is 
not a problem for the U.S. Government. We simply cannot afford it.
  The plan thus far has done nothing to stabilize the Mexican currency. 
It has gone down against the dollar since the announcement of the plan.
  Now, to add bad news to bad news, as the peso has been dropping 
against the dollar, the dollar has been dropping against practically 
every industrialized country's currency in the world. So we are trying 
to bail out a weak peso with a weakening dollar. It simply does not 
make sense.
  As I think Senator Brown from Colorado said, nobody ever falls in 
love with their banker, and we have seen it clearly in this situation. 
Mexico will soon resent our interference in their economy and in their 
political affairs. There will be ``Yankee go home'' signs up before we 
ever finish the bailout. In fact, the evidence is already there. During 
the deliberation on the President's first plan, the Mexican Legislature 
took a vote in which they said, yes they, have to approve the bailout. 
In other words, they have to decide whether they want us to give them 
money or not.
  Finally, with an administration and a Congress that cannot control 
their own spending, the ludicrous part of it all is that we are talking 
about imposing financial constraints on Mexico, what they could spend, 
domestic spending, telling them to get the trade deficit in line--we, 
the United States Congress, imposing trade constraints and fiscal 
constraints on someone when for 35 years we have been totally out of 
control, spending and wrecking our own dollar against the world's 
economy.
  So if we cannot control our own, why should we think we are going to 
be able to control the economy of Mexico? What we need to do is exactly 
what this bill does. I assume we have committed the $5 billion, but 
when that is up, we should stop until it comes back before the entire 
Congress to make a decision as to whether we go any further or not. 
Maybe we could afford the $5 billion but we cannot afford an open-ended 
check.
  Mr. President, I thank you. I yield the floor.
  Mr. D'AMATO addressed the Chair.
  The PRESIDING OFFICER. The Senator from New York.
  Mr. D'AMATO. Mr. President, I thank Senator Faircloth not only for 
his support and cosponsorship of this legislation but for his 
persistence in asking for the facts.
  Mr. President, I prepared a statement and I am going to stick to it 
and read it at this point.
  The Mexican bailout is a failure. The rights of the American people 
have been ignored and disregarded. Might I add, I also believe the 
rights of the Mexican people, who we claim we are interested in, have 
been injured as well.
  People of this Nation clearly do not want to send $20 billion to 
Mexico even when there are the implied threats that there will be huge 
immigration masses illegally coming across our borders.
  The administration and the President have arrogantly disregarded the 
men and women of America. They have gone around Congress. The President 
took money that was supposed to be used to stabilize the American 
dollar, and we are giving it to Mexico, make no mistake about it. We 
are never going to get this money back. And the question as to the use 
of this money is a very real and legitimate question that should be 
answered. Who are we bailing out?
  The President has rewarded a corrupt dictatorial Mexican regime and 
saved global speculators from massive losses. Already, $5 billion--$5 
billion--of American taxpayers' money is gone. Yesterday, the Mexican 
market still fell. The collapse of the Mexican stock market continues 
unabated. It was a terrible mistake for the President to use $20 
billion of the exchange stabilization fund. That fund was intended to 
stabilize and to protect the American dollar, not the peso. This is an 
outrage. It is shocking. It is wrong.
  The President has made conditions in Mexico worse for the Mexican 
people. Just think of it. The $5 billion already sent to Mexico has 
been used to repay the Mexican public debt to bail out currency 
speculators and Mexican banks.
  American taxpayers should not have to repay Mexico's public debt and 
prop up Mexican banks. And that is exactly what is happening.
  Never before has an administration or an American President taken 
such large amounts--$20 billion--from our economic stabilization fund 
to bail out 
[[Page S4853]] a foreign country. It is totally unprecedented. Never 
before has an administration sent more than $1 billion or used more 
than $1 billion from the ESF fund for a foreign country.
  Never before has a President given a loan to a foreign country for 
more than 1 year from this fund. He should not give a loan at all. That 
is illegal.
  But the administration has ignored precedent and did an end-run 
around the Congress. He has given the Mexican regime a line of credit 
from the ESF for 5 years, and in some cases up to 7 years. That has 
never been done before. It is totally unprecedented. It is wrong.
  Even the Treasury Department recognized that the ESF may not be used 
for foreign aid. In an opinion to Treasury Secretary Robert Rubin, the 
general counsel of Treasury advised, and I quote from page 6:

       Although loans and credits are clearly permitted under the 
     ESF, their purpose must be to maintain orderly exchange 
     arrangements and a stable system of exchange rates, and not 
     to serve as foreign aid.

  This is clear. ESF money cannot be used as foreign aid. And that is 
exactly what is taking place.
  Treasury also admits that ESF may not be used if American taxpayers' 
money is at risk.
  I want one person to tell me that the American taxpayers' money is 
not at risk. No one can say that. Treasury officials cannot say that. 
They cannot say that privately, they cannot say that publicly, that the 
American taxpayers' money is not at risk. Now that is the law. That 
comes from their interpretation.
  Treasury admits that ESF may not be used if American taxpayers' money 
is at risk.
  Now, Mr. President, we have to be kidding ourselves if we are going 
to be saying that that is not the case. We have been told that Mexico 
has pledged its oil reserves as collateral for repayment. But Mexico 
can shut off the oil. And, the Mexicans can sell it elsewhere. The 
bottom line is that we have no real assurance that America will be 
repaid. What will we do? Will we send in the 82d Airborne to collect 
our money if they default?
  Are we going to seize the oil wells? Are we going to prohibit them, 
somehow, from an agreement that is made with one administration today 
with another administration down there tomorrow if they decide, when 
interest rates at 80 to 100 percent are forcing a revolution, that they 
can no longer continue this austerity program?
  Imagine what the middle class is doing and saying right now. How long 
do you think they can maintain this austerity program? And this is the 
only chance they have to make it. So what happens when they say, ``We 
cannot meet these onerous repayment schedules''? Are we going to cut 
off all their foreign aid? Are we going to seize all the money that 
comes through the Federal bank in New York? For how long? How long 
before they make a new arrangements for the sale and disregard the fact 
that money was supposed to go through the Federal bank? Are we going to 
sue them? Are we going to get judgments against them?
  If you are going to do that, they will sell their oil abroad. If you 
take a man's life away from him, you take away his ability to make a 
living, he will stop working, and that is what they will do. You do not 
think that they are just going to pump oil for the sake of paying this 
debt if they need the money? It is preposterous.
  Mr. President, given the unprecedented size and scope of the 
President's bailout, it is clear to this Senator, and to a dozen others 
who have cosponsored this legislation, that it is foreign aid for 
Mexico; that it is making a loan and, indeed, a loan which is not 
sufficiently collateralized, and that there is a good chance American 
taxpayers will suffer.
  And, giving Mexico $20 billion of American foreign aid without 
congressional approval is wrong. Giving them $5 billion without 
congressional approval is wrong. Giving them $1 billion is wrong.
  But this Senator said, ``All right. You have given them $5 billion. 
Let us hold it. And if, indeed, you can make a case to the American 
people, to the Congress, that they should continue to get aid, they 
should continue to get support, then let us have that legislation, let 
us have the ability to review how those dollars will be used, for what 
purposes, who will benefit.''
  And that is the reason this Congress should be brought into this 
process. It happens to be the law.
  As elected representatives of the people, the Congress must approve 
the appropriation of taxpayers' funds. It is our constitutional duty.
  Instead of allowing the free market to decide Mexico's fate, the 
politicians in Mexico City and in Washington misled the markets. All 
during 1994, the administration told us that the Mexican economy was a 
model for the free world. We supported Mexican President Salinas' 
candidacy to head the World Trade Organization. President Clinton 
praised Mexico at the Summit of the America's, just days before the 
devaluation of the peso in December.
  This administration has made the situation in Mexico far worse than 
it needed to become. The peso will rise and fall because of market 
forces--free market forces--and not because $5, $10, or $20 billion in 
American taxpayers' dollars goes south of the border.
  What is going on in Mexico rivals any soap opera. There were reports 
of rampant Mexican corruption and collusion with drug traffickers. The 
former President of Mexico has left the country; his brother is under 
arrest for masterminding a political assassination. The Mexican Army is 
fighting rebellion in the southern region.
  The peso printing press is still continuing--as we talk, they are 
printing pesos--and the peso continues to fall against other 
currencies, taking the dollar with it. The inflation rate in Mexico is 
almost 70 percent, and bank interest rates in some cases are close to 
100 percent.
  Mr. President, where is the voice of the people? Do the people want 
us to make a loan in this situation? We have an obligation--a duty--to 
bring this issue into the light. This Senator will not just stand by 
and allow this obligation to be buried under political considerations.
  Maybe President Clinton does not understand that hard-working 
American people do not want their money being used in this manner, but 
I do. I was sent here to fight for them--not the international 
speculators, not corrupt foreign governments, as nice as we want to 
paint a coat of fresh paint on them to dress them up.
  If this administration truly wants to help Mexico, we should do so by 
demanding fundamental free-market reforms.
  The first thing the Mexican Government can do, if it wants to pay off 
all its debts, is privatize PEMEX, the Mexican national oil monopoly 
that has been used as a Mexican piggy bank for corrupt officials year 
after year after year after year.
  You have a former agricultural administrator, the Secretary, just 
retired there. He is a billionaire. He earned $50,000 a year, yet he is 
a billionaire. And his sons are tied to drug dealings. Sixty percent of 
all the drugs that come into this country in terms of cocaine are from 
Mexico as a transshipment place, from top to bottom filled with 
corruption. Do you think they are going to treat our money like it is 
their own? They will take their cut. They will treat it like their own. 
They will make it their own. Incredible.
  Let the Mexican Government eliminate wage and price controls. Let 
them see to it that they do not impose false and arbitrary standards. 
Let them clean up the corruption that is destroying their country and 
the ability of their people to believe in it.
  We should not make ourselves the international welfare house, 
certainly not on this scale. Welfare has failed dismally in those 
countries in which we have made it the cornerstone of our policy. When 
will we learn? The road to economic growth is less government, not more 
government. Let us do the people of Mexico a favor. Let us demand free 
market reforms.
  Let us not get into the business of international welfare. Now, when 
Congress must cut domestic programs to balance our Federal budget, is 
not the time to send $20-plus billion to Mexico. We cannot afford to be 
Mexico's banker. The ESF is not the President's personal piggy bank, 
and it is our duty to protect American taxpayers.
  Who will bail us out if the dollar continues to fall? The Japanese? 
The Germans? The Mexicans? I doubt it.
  [[Page S4854]] The time has come for Congress to stand up for the 
American taxpayers. So today, on behalf of the hard-working men and 
women of America, I have offered this legislation. This legislation 
reasserts Congress' rights and responsibilities with regard to this 
matter.
  Some of my colleagues may not be happy with this, but I think it is 
their obligation. They have an obligation to vote ``yes.'' If you 
believe that Congress is ultimately responsible for the appropriation 
of funds, you have an obligation to vote ``yes'' if you think these 
funds are not being used appropriately. On the other hand, if you think 
that the administration is correct under the law; that these funds can 
be used for this purpose; that these funds are not being made as 
foreign aid; that these funds are not being made as a loan which may 
not be repaid, or is in jeopardy of not being repaid, then vote against 
this.
  My bill would amend the ESF statute to provide--I think it is far too 
generous, but to deal with this situation, I have limited it to $5 
billion. I think it should be much lower than that, a lower floor; but 
the President cannot give a foreign country in excess of $5 billion 
without congressional approval. I think that is reasonable.
  Some have said that I should not introduce this amendment. But I say 
let us look at the facts. Mexico is in a quagmire. And American 
taxpayers have been drawn into the quicksand without any authorization 
by their elected representatives. The only long-term financial 
commitments being made in Mexico right now are being made by the United 
States of America, using American taxpayer money without their consent. 
We have dragged in an unwilling IMF and an unwilling World Bank. That 
is not right. If my colleagues think this bailout is appropriate, then 
let us vote on the record.
  It is Congress' constitutional responsibility to determine whether to 
send American tax dollars to a foreign country. We should use the $20 
billion that the President has sent Mexico, or intends to send Mexico, 
to help balance the Federal budget. I would rather spend the money to 
help New York, Orange County, or the District of Columbia, and whatever 
is left over, use it to reduce the budget, which is far more 
appropriate.
  Congress could approve more than $5 billion in aid to Mexico. But if 
so, let us do it the right way, in the open, on the record. It is not 
good enough to say, well, we have congressional leaders who have 
approved. That may be, but that is not the full House, and that is not 
the full Senate. I am tired of hearing that. I am tired of hearing, oh, 
well, the leadership agreed. Yes, they agreed in good faith. I do not 
think good faith was kept with them. They were not told how these 
dollars were going to be used or about the implications in terms of the 
interest rates that would be imposed on the Mexican people. They were 
not told about the ability to repay. I was there at the last of the 
briefings when the Chief of Staff came in from Mexico to the President. 
He was honest. I have to tell you, he shocked me. I was skeptical up to 
that time. After he finished briefing us, I said, there is no way this 
works. I felt sorry for him because at least he was honest and told us 
the problem: 70 billion dollars' worth of short-term debt coming 
through within 12 months.
  Let me tell you something. You do not stop $70 billion with all of 
the financing that we have talked about; it is insufficient. They can 
roll it over and roll it over, but you have to pay it back. The 
interest rates are going to be higher, and there is going to be less 
investment in there. You are going to have more money flowing out. Oh, 
for the short term you will keep it and make this mirage and things 
will sound better. But that is not right.
  Mr. President, I submit that Congress must have the final say on 
spending of taxpayer dollars on foreign aid or foreign loans. We owe it 
to the hard-working men and women of this country we represent to stand 
up and do what is right. Sometimes it may take some political courage. 
We are the Senate of the United States. We have a responsibility to the 
people of the United States. We cannot be cowards. Now is the time for 
action. I urge approval of this amendment.
  I yield the floor.
  Mr. FAIRCLOTH. Mr. President, just another thought or two.
  The Senator from New York mentioned the ESF has never been used in 
this magnitude before. I think if we face reality and cut out the 
gossamer facade of calling this thing a loan, we will get to the facts 
quicker. It is not a loan. A loan is a euphemism for a total bailout 
grant that we are never going to be repaid.
  Usually, money that has been borrowed from the ESF has been repaid 
within 90 days. But with this giveaway, we have no assurance that it 
will ever be repaid at all.
  Can you imagine if a Senator came to this floor and proposed a $20 
billion appropriation for a domestic project? The first thing he or she 
would be asked is, ``Where will the spending cut come from to pay for 
it?'' Why should it be different when we send $20 billion as a gift to 
Mexico without any idea who is going to pay for it--well, we know who 
is going to pay for it: the American taxpayer.
  I do not think you need a better barometer of what is going on in 
Mexico than the trends of the market themselves, with the lowest 
interest rate in Mexico at 50 percent and running to 70, 80, and 100 
percent. What does it tell you about the value of the Mexico's debt 
when that kind of interest rate is offered? We have asked repeatedly 
who this debt is owed to. And never once have we been told. Not once 
did we find out. But we are taking hard-earned American dollars to bail 
out financial investors and speculators around the world who are 
getting from 18 to 25 to 30 percent, whatever, on these Mexican bonds, 
and we are bailing them out with American money.
  One further thought. The immigration problem. This was used of 
course, to excite us--and I think I would call it the excitement plan 
used by the administration--to encourage us to support this, at first 
$40 billion, and now as the President took the ESF of $20 billion. But 
some have estimated that illegal immigration may be as low as 40,000 
more immigrants if we do not do the bailout. Well, if you look at $20 
billion and 40,000 immigrants, we are putting a half million dollars 
into every potential illegal immigrant. It simply does not make sense. 
It is a bad idea whose time has not come and will not come.
  I encourage my colleagues to vote for Senator D'Amato's amendment. We 
are hooked with the $5 billion, but let us not send any more good money 
after bad.
  Mr. President, I yield the floor.
  Mr. D'AMATO. Mr. President, I see that a number of my colleagues who 
may share a difference of opinion on this are on the floor and if they 
wish to speak, I would be happy to yield the floor.
  I ask unanimous consent that an article from the Wall Street Journal, 
entitled ``Americans Grow Ugly in Mexicans' Eyes,'' dated March 21, 
1995, be printed in the Record.
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

             [From the Wall Street Journal, Mar. 21, 1995]

    Americans Grow Ugly in Mexicans' Eyes--Rescue Plan Revives Long-
                         Simmering Resentments

                           (By Dianne Solis)

       Xochimilco, Mexico.--In this postcard perfect town of 
     canals and floating gardens, a favorite of American tourists, 
     Teresa Garcia fumes that her country is becoming a colony of 
     the U.S.
       Even though the U.S. helped save Mexico from a financial 
     crash by organizing a $52 billion bailout package, many 
     Mexicans such as Mrs. Garcia view the rescue program as a 
     lead parachute.
       They worry that the rescue plan calls for such severe 
     austerity measures that Mexico will plunge into a serious 
     recession. They fret about soaring interest rates, which now 
     top 100%. And, perhaps most viscerally, they stew about 
     provisions that make exports by the state oil monopoly, 
     Petroleos Mexicanos, collateral for the rescue package. Many 
     fear the move betrays U.S. designs on Mexico's sacrosanct 
     petroleum operations.


                         oil is national symbol

       ``Those jerks want our oil,'' snaps Mrs. Garcia. ``Oil is a 
     great symbol for the middle class and those below. You take 
     it away, you steal our national identity.''
       As her comments suggest, Mexico's historic anti-
     Americanism, seemingly vanquished in recent years, is 
     creeping into view again.
       Signs of the mood shift are cropping up all over. ``We will 
     never agree to the privatization of Pemex,'' the acronym for 
     Petroleos Mexicanos, reads graffiti on a wall across from the 
     Camino Real hotel in Oaxaca, a 
     [[Page S4855]] southern tourist site frequented by Americans. 
     On the Texas border in Ciudad Juarez, workers at a U.S.-owned 
     furniture factory grouse about gringos who won't grant them 
     pay raises, even though labor costs were sliced in half after 
     a Mexican peso devaluation that began last December. ``The 
     only ones who benefit are the American bosses,'' says Carlos 
     Lopez, a 21-year-old worker. Fully 80% of Mexicans polled in 
     a recent survey by the Civic Alliance, a citizens watchdog 
     group, opposed the terms of the U.S. package.
       Just a year or two ago, such feelings seemed virtually 
     forgotten, Mexico's economy was humming, and more and more 
     citizens were reaching middle-class status, giving them the 
     chance to travel to the U.S. and partake of its material 
     pleasures. Last year's historic North American Free Trade 
     Agreement, which created a giant free-trade zone out of the 
     U.S., Mexico and Canada, seemed to seal the close ties.
       But the peso devaluation in December, and the prospects of 
     deep economic hardship that followed, have soured the mood. 
     In particular, many Mexicans are distraught that Pemex must 
     now pass all receipts from crude oil exports through the 
     Federal Reserve Bank of New York. This money will only be 
     remitted to Mexico if it remains current on payments it owes 
     on the bailout package.
       Although both governments insist the arrangement is just a 
     bookkeeping matter and say Mexico has used it in the past, 
     it's harsh medicine for many.


                             anger and fear

       Indeed, when Mexican President Lazaro Cardenas nationalized 
     foreign oil companies to resolve a union dispute in 1938, it 
     became one of the country's proudest moments. On Saturday, 
     the 57th anniversary of the nationalization was marked by 
     angry speeches, and overshadowed by rampant-speculation that 
     the government plans to allow foreigners to drill in Mexico's 
     oil fields once again.
       At a ceremony held by the party of the Democratic 
     Revolution, Mexico's chief leftist opposition party, 
     organizers drew fiery applause when they read a letter from 
     Amalia Solorzano, President Cardenas's widow, warning against 
     giving foreigners any more involvement in Pemex's affairs. 
     ``They won't be satisfied with just draining the veins [of 
     Pemex],'' the letter said. ``They'll keep asking for the head 
     and the docile government will be happy to satisfy them.''
       But Mexico's complex, love-hate relationship goes beyond 
     oil. Although Mexico occupies only modest space in U.S. 
     history books, Mexican children are drilled by teachers on 
     how the 1848 Treaty of Guadalupe Hidalgo forced the sale of 
     Mexico's northern half to the U.S., and on how the U.S. 
     invaded Mexico in 1914 and 1916. In times like these, many a 
     Mexican can be heard to repeat dictator Porfirio Diaz's line 
     from around the turn of the century: ``Poor Mexico. So far 
     from God and so close to the United States.''
       Although old wounds had healed substantially as the U.S.-
     Mexico commercial relationship strengthened, memories of 
     domination are being dredged up again. One editorial cartoon 
     has a poor Mexican selling oil under a sign that reads, ``Pay 
     at the booth.'' Collecting the money at the booth behind him 
     is Uncle Sam. Another cartoon shows Mexico as a hungry dog 
     begging at the table of President Clinton, who is holding a 
     plate full of money just out of reach while musing, ``Mmm . . 
     . Let me see if I've forgotten any condition.''
       A visit to Xochimilco with Mrs. Garcia illustrates some of 
     the frustrations people here are feeling.


                             business shut

       A business owner in debt to foreign banks, Mrs. Garcia has 
     suffered such severe credit problems that she shuttered her 
     meat-preservatives and condiments business a month ago and is 
     trying to sell her inventory at a $40,000 loss.
       Angrily touring her neighborhood, she points out spots 
     where she says people are at least as disillusioned as she 
     is. In front of a tiny restaurant with hand-lettered signs, 
     she says with a sigh. ``The owners are three college 
     professors with masters degrees. They couldn't make ends 
     meet. Look, they had to open this little place to sell 
     [pozole],'' a garbanzo-bean stew popular with the working 
     class.
       Well past midnight, Mrs. Garcia broods at the home of a 
     neighbor over coffee. The neighbor, an academic from a well-
     to-do family with servants and nannies, complains her salary 
     has effectively been sliced in half by the devaluation and 
     barely covers her living expenses now.
       The neighbors direct some of the blame at the Mexican 
     government. But Mrs. Garcia continually returns to the theme 
     of Pemex, and the U.S. threat to its independence.
       ``What does the U.S. want us to be?'' she sneers. ``A 
     Puerto Rico?''

  Mr. D'AMATO. Mr. President, the fact of the matter is the article 
goes on to talk about how the Mexican people are feeling toward 
Americans, and the great pain.
  There are other articles that in graphic detail talk about the 
incredible burdens as it relates to the interest rates that now have 
gone up on small business owners, on the homeowners, on the savage 
price they are paying.
  While we may be attempting to help our neighbors to the south, we 
have enraged their citizens. While we may be well-intentioned, what we 
have done is seen to it that a select group of investors have been 
bailed out. They have been bailed out by the American taxpayers, by the 
Mexican people, who resent our intrusion.
  They have every right to resent that intrusion, given the sorry, 
dismal performance of their Government in giving out laudatory 
expressions over the past years, going back to past administrations, 
that had the United States believe that Mr. Salinas and his people were 
the answer to all their problems, and represented, truly, free markets 
and democracy, when that was, obviously, now, a myth.
  Mr. President, I see my colleague on the floor who wishes to make his 
statement. I yield the floor.
  Mr. SARBANES addressed the Chair.
  The PRESIDING OFFICER. The Senator from Maryland.
  Mr. SARBANES. Mr. President, I have been listening to this exchange 
with some interest and some bemusement--if one can use that term--with 
respect to a matter that has such potential serious consequences. This 
ought to be underscored: A matter of the utmost gravity.
  The New York Times on the 25th had an article headlined ``Mexico's 
Recovery Plan Shows Signs It Is Working.'' Two weeks after it was 
introduced, Mexico's tough new recovery plan is showing the first signs 
that it may be working.
  The floundering peso has started to stabilize while the economy is 
being squeezed even more tightly. The article ends up with a quote from 
the director of analysis in a brokerage firm in Mexico City, saying 
``There is a little bit more confidence in Mexico. Things are getting 
better. But there is still a long way to go.''
  Now, if there was any doubt about whether what we do here or what we 
say here--let alone what we do--may have significant consequences, this 
Mexican crisis may prove the point.
  Let me go back with a little history. On the 11th of January, one of 
my colleagues took the floor and this is what he said:

       Mr. President, while American diplomats and foreign policy 
     pundits handwring over various crises in Eurasia, and the 
     American military is hand-holding the doomed in a number of 
     Third World quagmires, an economic crisis of alarming 
     proportions is threatening to engulf our nearest neighbor to 
     the south. Could there be a better example of the failure of 
     our foreign policy than the potential collapse of Mexico?

  Continuing with this statement:

       I believe that charity begins at home. Mexico and Canada 
     are part of the American family. Yes, we bicker, we snipe, we 
     engage in the kind of heated battles only family members 
     could get away with, but in the end it is the family ties 
     that bind. We can no longer take our good neighbors for 
     granted. Our national security and our economic well-being 
     are inextricably linked to the health and stability of 
     Mexican society and the Mexican economy.

  Let me repeat that colleagues' statement here.

       We can no longer take our good neighbors for granted. Our 
     national security and our economic well-being, are 
     inextricably linked to the health and stability of Mexican 
     society and the Mexican economy.
       We face a far greater threat from instability in Mexico 
     than we will ever face from open conflict or economic chaos 
     in most of the places American diplomatic attention and 
     foreign aid are currently focused. We must help the Mexicans 
     stabilize the peso to renegotiate their debt, and to develop 
     an economic strategy of long-term investment and growth that 
     will improve the quality of life of all Mexicans and, by 
     extension, the quality of life of all Americans.
      To do as we have been doing, to focus on the problems of 
     other continents while ignoring our own, is asking us to 
     worry over a distant storm as wolves gather in our own 
     backyard.

  That is a very strong statement about the Mexican problem and a very 
strong statement about the United States responsibility to respond to 
the Mexican problem. That statement was made by my colleague, the 
distinguished Senator from New York, Senator D'Amato, who has just 
spoken at great length here on the floor.
  This was on January 11. Of course, the administration, I assume in 
part influenced by Senator D'Amato's statement about responding to the 
Mexican situation, influenced by this strong, forceful declaration in 
the Senate as to what needed to be done with respect to Mexico, and the 
responsibility of the 
[[Page S4856]] United States to respond--I am sure the administration 
was impacted by that statement. And of course they began to try to 
construct some package that would enable the United States to play a 
role in addressing the economic crisis confronting Mexico.
  The Treasury and the Federal Reserve came to the Congress to seek 
congressional authorization for a loan package to provide assistance to 
Mexico. That loan package in fact was in the amount of $40 billion. 
What we are now talking about is the use of the Exchange Stabilization 
Fund for $20 billion, with the international community coming in for 
other amounts to create a larger package which is judged as necessary 
if Mexico is going to be able to move out of this crisis.
  But the administration came to the Congress to seek approval from the 
Congress of a loan guarantee package of $40 billion. That loan 
guarantee package, the administration's request, was endorsed by the 
Republican and Democratic leadership of the Congress.
  We want to be very clear here about where the responsibilities are, 
and clear about this amendment in its historical context. It needs to 
be made clear that there is a recovery program now underway in Mexico, 
and if the rug is pulled out from under that recovery program the 
responsibility for that also needs to be made clear.
  The recovery program has risks connected with it. No one has denied 
that. There has to be some evaluation of those risks, and weighing 
them, but on the 12th of January, President Clinton and the 
congressional leaders issued a joint statement on Mexico's currency 
crisis after meeting at the White House. I will quote from that 
statement. This was the statement of the Republican and Democratic 
leadership of the Congress, both Houses.

       We agree that the United States has an important economic 
     and strategic interest in a stable and prosperous Mexico. 
     Ultimately the solution to Mexico's economic problems must 
     come from the people of Mexico. But we are pursuing ways to 
     increase financial confidence and to encourage further reform 
     in Mexico. We agree to do what is necessary to restore 
     financial confidence in Mexico without affecting the current 
     budget at home.

  Mr. President, I ask unanimous consent that that statement be printed 
in the Record at the end of my remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  Mr. SARBANES. The submission of that proposal was followed by 
extensive consultations between the Treasury, the Federal Reserve, and 
Members of the House and Senate to craft a package that could win 
congressional approval. A January 14 article in the Washington Post 
reported:

       Treasury Secretary Robert E. Rubin and Federal Reserve 
     Chairman Alan Greenspan canvassed Capitol Hill, briefing 
     legislators on the details of the plan and lobbying for 
     support. At a question and answer session attended by more 
     than 100 legislators yesterday morning, many Members of 
     Congress questioned Rubin, Under Secretary Lawrence Summers, 
     about whether the proposed rescue package would put U.S. tax 
     dollars at risk. And some demanded assurances that the United 
     States would extract broad promises of economic reform from 
     the Mexican Government before the Treasury extended any 
     financial support. But at the close of the 2-hour meeting, 
     House Speaker Newt Gingrich told the gathering that the 
     Republican leadership in the House stood firmly behind the 
     administration's rescue plan, ``We have zero choice on 
     this,'' he said, according to those who attended the meeting. 
     ``Republican leadership,'' he added, ``is committed to doing 
     everything we can to make it work.''
       ``There is generally a consensus that as the leadership 
     agreed last night, we need to do what is necessary to make 
     this work,'' Senate majority leader Robert J. Dole said after 
     the morning meeting. ``We do not have the luxury of waiting 
     very long,'' he added.

  Mr. President, I ask unanimous consent that that article be printed 
in the Record at the conclusion of my remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 2.)
  Mr. SARBANES. Mr. President, there then followed 2 weeks of extensive 
efforts by the Federal Reserve, the Treasury, and congressional leaders 
to craft the package. A January 19 article in Roll Call reported, ``Not 
only did House Speaker Newt Gingrich and Senate majority leader Bob 
Dole immediately back President Clinton in offering a $40 billion''--
and I emphasize that $40 billion--``loan guarantee to Mexico, but House 
and Senate task forces have been working tirelessly with the 
administration and Mexican officials to craft legislation to put the 
guarantee into effect. This period ensued with these discussions with 
the Congress, with the Federal Reserve and the administration.''
  And an article in the Financial Times recounts what transpired. I 
quote it:

       It was around 8 p.m. on Monday, January 30, that Leon 
     Panetta, White House Chief of Staff, finally accepted that 
     the administration's plan to rescue Mexico with up to $40 
     billion of loan guarantees was not going to work. Two phone 
     calls in the space of a few minutes had virtually made up his 
     mind.
      One was Newt Gingrich, the new Speaker of the House of 
     Representatives, the other from Mexico, Guillermo Martinez 
     Ortiz, the Mexican Finance Minister. The message from 
     Gingrich was simple and pessimistic. Congress was 
     objecting to the loan guarantee package, and the chances 
     of its rapid and successful passage were slim and 
     worsening. The conversation with Ortiz was also deeply 
     worrying. Money was flowing out of Mexico so rapidly that 
     without U.S. help they would soon have to abandon the 
     convertibility of the peso. According to the article, 
     Speaker Gingrich told Panetta it would take at least 
     another 2 weeks to line up support for the package. If the 
     President acted on his own, Congress would breathe a huge 
     sigh of relief.

  Let me repeat that:

       According to the article, Speaker Gingrich told Panetta it 
     would take at least another 2 weeks to line up support for 
     the package. If the President acted on his own, Congress 
     would breathe a huge sigh of relief.

  Let me just recount what has transpired up to this point and where we 
are. The administration, confronted with an economic crisis in Mexico, 
sought to devise a package to respond to the situation. It in effect 
was urged to do so by Members of the Congress and many other 
commentators on public policy issues. Some of my colleagues in this 
Chamber took the floor to underscore the seriousness of the Mexican 
crisis, and the interrelationship between our two countries. ``Our 
national security and our economic well-being are inextricably linked 
to the health and stability of the Mexican society and the Mexican 
economy.''
  Statements of that sort, which urged that we must help the Mexicans 
stabilize the peso and renegotiate their debt, were being heard from 
various Members of the Congress. The administration came to the 
Congress proposing a loan guarantee program for $40 billion and seeking 
the approval of the Congress for that loan guarantee package. The 
administration's proposal was supported by leadership of the Congress, 
and I quoted statements from both Speaker Gingrich and Majority Leader 
Dole supporting the administration's effort. As Senator Dole said--this 
is after the administration submitted at a briefing the loan guarantee 
package--``There is generally a consensus that, as the leadership 
agreed last night, we need to do what is necessary to make this work.''
  As we all well know, the efforts to muster congressional approval for 
the loan guarantee package of $40 billion ran into difficulty. And it 
was then that there was indication from some of the leadership. Speaker 
Gingrich stated, ``If the President acted on his own, Congress would 
breathe a huge sigh of relief.''
  That Financial Times article, from which I was quoting, then went on 
to say that the decision was then made to abandon the loan guarantee 
package which leadership had endorsed but for which there was 
difficulty commanding approval in the Congress. To abandon the loan 
guarantee proposal and develop a new support package centering on $20 
billion of finance from the Exchange Stabilization Fund. So a new 
approach was taken.
  On January 31, a joint statement was issued by President Clinton, 
Speaker Gingrich, House Minority Leader Gephardt, Senate Majority 
Leader Dole, and Senate Minority Leader Daschle. That statement said, 
and I quote, this is now quoting the statement of the President, 
congressional leadership, Speaker Gingrich, Majority Leader Dole and 
leaders Gephardt and Daschle.

       We agree, that in order to ensure orderly exchange 
     arrangements and a stable system of exchange rates, the 
     United States should immediately use the Exchange 
     Stabilization Fund to provide appropriate financial 
     assistance for Mexico. We further agree that, under title 31 
     of the United States Code, section 5302, the President has 
     full authority to 
     [[Page S4857]] provide this assistance. Because the situation 
     in Mexico raises unique and emergency circumstances, the 
     required assistance to be extended will be available for a 
     period of more than 6 months in any 12-month period.

  The statement then goes on to indicate that the support that is 
coming from other nations, from the IMF, through the Bank for 
International Settlement, and then it goes on to say, and I quote:

       We must act now in order to protect American jobs, prevent 
     an increased flow of illegal immigrants across our borders, 
     ensure stability in this hemisphere, and encourage reform in 
     emerging markets around the world. This is an important 
     undertaking, and we believe that the risk of inaction vastly 
     exceed any risk associated with this action. We fully support 
     this effort, and we will work to ensure that its purposes are 
     met. We have agreed to act today.

  That is the end of the statement.
  Mr. President, I ask unanimous consent that the full statement of the 
President and the congressional leadership be printed in the Record at 
the conclusion of my remarks.
  The PRESIDING OFFICER (Mr. Kempthorne). Without objection, it is so 
ordered.
  (See exhibit 3).
  Mr. SARBANES. Mr. President, on that day, the IMF announced that the 
IMF was prepared to provide just under $18 billion standby credit to 
Mexico. The central banks of a number of industrial countries also said 
that they would consider providing $10 billion in short-term support 
through the Bank for International Settlement. So the second approach 
drew in greater support out of the international community than had 
been provided for in the first approach.
  A Reuter's report of January 31 stated, and I quote:

       Senate Republican leader Bob Dole said Congress' Republican 
     and Democratic leaders would write President Clinton a letter 
     backing his new Mexican aid plan. ``He won't be out there by 
     himself,'' Dole told reporters. Dole said he, House 
     Republican Speaker Newt Gingrich, Senate Democratic leader 
     Daschle, and House Democratic leader Gephardt would send 
     Clinton the letter of support. Dole said he had checked with 
     other Senators, including some who had opposed Clinton's 
     request for $40 billion in loan guarantee for Mexico, before 
     deciding to write the letter. ``In my opinion, most everybody 
     is on board supporting Clinton's new plan to commit $20 
     billion from the U.S. Currency Exchange Stabilization Fund'', 
     Dole said.

  A New York Times article of February 2 quoted Speaker Gingrich as 
follows:

       ``The President exercised his authority,'' Mr. Gingrich 
     said today. He took a tremendous burden on his shoulders. He 
     did what key leaders felt was necessary.
       I think people at a minimum should recognize the President 
     had the courage to do what he was being told by the very 
     sophisticated experts was vital to reinforce international 
     markets.

  Mr. President, I ask unanimous consent that those two articles be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                [From the New York Times, Feb. 2, 1995]

                       Rescue: Durable or Brief?

                          (By David E. Sanger)

       Washington.--President Clinton's move to sidestep Congress 
     and order emergency credits to Mexico halted a monthlong run 
     on the peso, but it left Congressional critics and reluctant 
     American supporters worrying that the bailout's success would 
     prove temporary.
       A debate over the solidity of the plan arose today as the 
     International Monetary Fund prepared to approve an emergency 
     $17.8 billion in medium-term loans.
       Officials said the money would be available immediately to 
     help the Mexican Government keep from defaulting on $40 
     billion in bonds and other liabilities that come due for 
     payment this year. But the deliberations came as Germany and 
     France bitterly complained that they had not been consulted 
     by the White House and that the money might come out of aid 
     to Eastern Europe and Russia.
       On Capitol Hill, opponents of any American involvement in 
     Mexico's bailout threatened hearings, focusing on what the 
     Administration knew about Mexico's distress last year and how 
     President Clinton diverted $20 billion in Treasury Department 
     funds--intended to stabilize the dollar on world markets--to 
     provide Mexico with emergency loans.
       Not surprisingly, some of the harshest criticism came from 
     Patrick J. Buchanan, the leader of the effort to kill any aid 
     to Mexico.
       ``The looting of America, on behalf of the new world order, 
     has begun,'' said Mr. Buchanan. ``Never again should a 
     President be allowed to disregard the will of Congress to 
     raid the U.S. Treasury to bail out Wall Street banks or a 
     foreign regime.''
       Senator Phil Gramm, the Texas Republican and an expected 
     contender for his party's nomination for President in 1996, 
     said Mr. Clinton was ``filling a bucket that is full of 
     holes.''
       But the President's action was defended by an unlikely 
     ally: Newt Gingrich, the Speaker of the Republican-controlled 
     House of Representatives.
       ``The President exercised his authority,'' Mr. Gingrich 
     said today. ``He took a tremendous burden on his shoulders. 
     He did what key leaders felt was necessary.
       ``I think people at a minimum should recognize the 
     President had the courage to do what he was being told by the 
     very sophisticated experts was vital to reinforce 
     international markets.''
       To sell the President's action, Treasury Secretary Robert 
     E. Rubin assured skeptical Republicans and Democrats on 
     Capitol Hill that Mexico had agreed to fundamental economic 
     reforms and would be held to those commitments.
       The reforms, spelled out in a letter from Mexican officials 
     to the I.M.F. last week, include a more independent central 
     bank, controls on credit expansion, continued privatization 
     of Government-owned industry and relaxation of many of 
     economic controls, including prohibitions on foreign 
     investment in Mexican banks.
       But Treasury officials acknowledged today that while they 
     had talked about the loan conditions in general terms with 
     Mexico, there was nothing on paper. Already the conditions 
     are being described in Mexico in far more lenient terms than 
     they are in Washington.
       For the American economy, the most important question is 
     whether the bailout strengthens the peso. Its current level 
     makes American goods 35 percent more expensive in Mexico than 
     they were in December, and Mexican goods that much cheaper in 
     the United States.
       The current rate also seems to many economists to be likely 
     to encourage far more illegal immigration across the border 
     as Mexicans seek jobs that pay in dollars.
       Mr. Clinton offered one of his most impassioned defenses of 
     his action on Tuesday night in Boston.
       ``I know the surveys say that by 80 to 15, or whatever they 
     said, the American people either didn't agree or didn't 
     understand what in the world I'm up to in Mexico,'' he 
     declared. ``But I want to say to you, it might be unpopular, 
     but in a time of transition it's the right thing to do.''
       Some of the harshest criticism of the Administration's 
     action today came from European capitals, which were taken by 
     surprise by the International Monetary Fund's decision--under 
     strong pressure from the White House--to add $10 billion in 
     aid to Mexico. That is in addition the $7.8 billion that the 
     I.M.F. approved last week.
       An I.M.F. official in Washington said some European 
     governments were concerned that the fund's remaining 
     resources might not be enough to deal with crises in other 
     parts of the world.
                                                                    ____

       Copyright 1995 Reuters, Limited.
       January 31, 1995, Tuesday, BC cycle.
       Section: Money Report; Bonds Capital Market; Domestic 
     Money; Financial Report.
       Length: 151 words.
       Headline: Dole says Congress's Leaders Back Mexico Plan.
       Dateline: Washington, Jan. 31.
       Body: Senate Republican Leader Bob Dole said Congress's 
     Republican and Democratic leaders would write President 
     Clinton a letter backing his new Mexico aid plan.
       ``He won't be out there by himself,'' Dole told reporters.
       Dole said he, House Republican Speaker Newt Gingrich, 
     Senate Democratic Leader Thomas Daschle and House Democratic 
     Leader Richard Gephardt would send Clinton the letter of 
     support.
       Dole said he had checked with other senators, including 
     some who had opposed Clinton's request for $40 billion in 
     loan guarantees for Mexico, before deciding to write the 
     letter.
       ``In my opinion, most everybody's on board'' supporting 
     Clinton's new plan to instead commit $20 billion from the 
     U.S. currency exchange stabilization fund, Dole said.
       The new plan does not need Congress's approval. Dole said 
     the $40 billion in loan guarantees would not have been 
     approved by Congress this week or next.

  Mr. SARBANES. Now, these are the steps that transpired that led us to 
this point. And pursuant to this support of the leadership, the backing 
of the congressional leaders, the very explicit statements of Speaker 
Gingrich and Majority Leader Dole, the administration proceeded to use 
the Exchange Stabilization Fund on the basis of the package that had 
been outlined. Now, in effect, that approach would be negated by this 
amendment. That is what this amendment would do. And obviously, such a 
negation has very broad consequences, conceivably even immediately as 
the markets would react to this proposal that is before us.
  Now, make no mistake about it, an effort was made to provide 
assistance to Mexico. Many Members of this body 
[[Page S4858]] urged that that be done. The administration submitted a 
loan guarantee proposal to the Congress and sought the approval of the 
Congress. Time passed. That approval was not immediately forthcoming. 
The crisis worsened. The administration then responded, in effect, to a 
signal from the leadership in which they indicated that they would 
welcome the President acting.
  So the President moved to use the Exchange Stabilization Fund, a 
provision under existing law. That use was strongly supported in a 
joint statement by the leadership, and a package was put into place 
which gives some signs of working. No one can guarantee it. And there 
are risks associated with it. One would be clearly imprudent to pass 
over the risks. But the risks connected with not doing anything were 
very clearly made earlier by majority leader Dole in one of his 
statements as we were proceeding to consider this matter.
  So, Mr. President, this is an interesting exercise that is going on 
on the floor today, but I think it very important to place it in the 
context of what has transpired and to make very clear, first, the 
administration coming to the Congress, the response of the 
congressional leaders, and then the support of the congressional 
leaders for using the Exchange Stabilization Fund.
                               Exhibit 1


            white house, congress joint statement on mexico

       Washington, Jan. 12 (Reuter).--President Clinton and 
     Congressional leaders issued the following joint statement on 
     Mexico's currency crisis after a meeting at the White House.
       ``We agree that the United States has an important economic 
     and strategic interest in a stable and prosperous Mexico. 
     Ultimately, the solution to Mexico's economic problems must 
     come from the people of Mexico. But we are pursuing ways to 
     increase financial confidence and to encourage further reform 
     in Mexico. We agree to do what is necessary to restore 
     financial confidence in Mexico without affecting the current 
     budget at home.''
                                                                    ____


                               Exhibit 2

               [From the Washington Post, Jan. 14, 1995]

 U.S. Plan To Aid Mexico Calms Financial Markets; Loan Guarantees Get 
                         Cautious Hill Backing

               (By Clay Chandler and Martha M. Hamilton)

       The Clinton administration's plan for bailing out Mexico's 
     economy calmed investors yesterday and buoyed the peso. It 
     also drew cautious, but generally favorable reviews from 
     members of the new Congress.
       The Mexico rescue plan--a package of $40 billion in loan 
     guarantees outlined Thursday night after a White House 
     meeting between President Clinton and congressional leaders--
     boosted stock prices and currencies throughout the hemisphere 
     yesterday. Analysts said the size of the package--at the high 
     end of the range described Thursday night--appeared to be big 
     enough to sustain investor confidence.
       The peso rallied sharply to close at 5.25 to the dollar, a 
     strong gain from Thursday's 5.5 rate. When the crisis began 
     Dec. 20, the peso was trading at about 3.4 to the dollar. 
     Stock prices surged 4.6 percent on the Mexico City market, 
     with the main index up 97.7 points to close at 2,216.55.
       ``There is definitely a floor under the market that wasn't 
     there before the announcement,'' said Thomas Trebat, Chemical 
     Banking Corp.'s managing director responsible for emerging 
     markets research.''
       John Daly, senior vice president-global fixed income of 
     John Hancock Mutual Funds, declared: ``The worst of it is 
     behind us.''
       Yesterday morning, as markets took the measure of Thursday 
     night's announcement, Treasury Secretary Robert E. Rubin and 
     Federal Reserve Chairman Alan Greenspan canvassed Capitol 
     Hill, briefing legislators on the details of the plan and 
     lobbying for support.
       At a question-and-answer session attended by more than 100 
     legislators yesterday morning, many members of Congress 
     questioned Rubin and Treasury Undersecretary Lawrence H. 
     Summers about whether the proposed rescue package would put 
     U.S. tax dollars at risk. And some demanded assurances that 
     the United States would extract broad promises of economic 
     reform from the Mexican government before the Treasury 
     extended any financial support.
       ``I'm going to need a lot more information before I sign on 
     the dotted line,'' said Sen. Tom Harkin (D-Iowa).
       But at the close of the two-hour meeting, House Speaker 
     Newt Gingrich (R-Ga.) told the gathering that the Republican 
     leadership in the House stood firmly behind the 
     administration's rescue plan. ``We have zero choice on 
     this.'' he said, according to those who attended the meeting. 
     The Republican leadership, he added, is committed to doing 
     ``everything we can to make it work.''
       ``There's generally a consensus that, as the leadership 
     agreed last night, we need to do what's necessary to make 
     this work,'' Senate Majority Leader Robert J. Dole (R-Kan.) 
     said after the morning meeting. ``We don't have the luxury of 
     waiting very long,'' he added.
       To succeed, the plan needs speedy endorsement on the Hill. 
     Delays and protracted bickering over budget issues or 
     conditions of the loan guarantees could trigger another slide 
     for the peso, Treasury officials and investors said 
     yesterday. But timing for congressional action on the plan 
     remains unclear.
       ``I think the timetable will start to gel early next 
     week,'' said Sen. Robert F. Bennett (R-Utah), a member of a 
     task force of Senate Republicans who met in Dole's office 
     yesterday afternoon to discuss handling of the measure.
       Without the approval of Congress, the administration will 
     not be able to translate the financial support proposal--
     which closely resembles a similar formula devised to extend 
     loan guarantees to Israel in 1992--into action. Under budget 
     law, the government must set aside money to cover any 
     potential losses from loan guarantees, a move requiring 
     congressional consent.
       In some ways, congressional reaction to the 
     administration's proposal yesterday mirrored the divisions 
     that arose during the 1993 battle over the North American 
     Free Trade Agreement, with pro-labor Democrats and some 
     conservation Republicans raising doubts about the plan.
       ``What I want to know is: `How much is it going to cost us 
     really?''' said Sen. Ernest Hollings (D-S.C.) one of NAFTA's 
     most strident critics, of the Mexican assistance plan.
       Lawmakers from both parties said they would feel a lot more 
     comfortable about voting to back up the peso if other wealthy 
     nations would be persuaded to share the financial burden. 
     ``If the Mexican default is a major risk to the global 
     economy, it sure seems to me that the Japanese and the 
     Europeans should be involved,'' said Sen. Joseph I. Lieberman 
     (D-Conn). Rubin and Summers argued yesterday that there 
     simply wasn't enough time to line up international 
     cooperation.
       ``I think something has to be done'' to shore up the 
     Mexican economy, said Sen. Bill Bradley (D-N.J.). Without 
     prompt U.S. action, the peso's collapse threatens to ``ripple 
     through the whole world economy,'' he said. But Bradley, too, 
     insisted that the loan guarantees be conditioned on stringent 
     economic reforms in Mexico and stressed that the United 
     States should not attempt to manage the peso crisis alone.
       Administration officials proposed to members of Congress 
     yesterday that the loan guarantees might be secured by rights 
     to profits from the sale of Mexican oil reserves--a notion 
     that is sure to elicit controversy within Mexico. And Dole 
     suggested loan guarantees to Mexico might carry a much 
     steeper risk than the assurance extended to Israel. ``I 
     assume you'd charge Mexico as high as 10 percent because they 
     are a greater risk,'' he told reporters following the 
     meeting.
       In the eyes of financial traders, final details of the 
     package appeared to matter less than the solid signal of 
     commitment from the United States.
       ``There was a major panic this week, and I think that was a 
     bit of a climatic sell-off, where people threw up their hands 
     and said maybe Mexico is going to disappear,'' said John 
     Ford, vice president of the T. Rowe Price Latin American Fund 
     in London.
       The price of Mexican par bonds, which had gone from 56 
     cents on the dollar to about 45 cents on the dollar, was back 
     to 53 cents yesterday, said John Hancock's John Daly.
       The news of the loan guarantees also benefitted markets in 
     other Latin American countries such as Argentina, Brazil, 
     Chile and Peru, where stock markets suffered through one of 
     their worst days in years on Tuesday. Jose A. Estenssoro, 
     president of the privatized Argentine oil company YPF S.A. 
     said the United States had no choice but to support Mexico 
     through the crisis.
       ``It's not something that will have an effect on Argentina 
     directly, but it probably will indirectly because it will 
     give Mexico a chance of solving the very, very serious 
     problems they have caused for everybody,'' he said.
       If the Mexican government takes advantage of the guarantees 
     offered by the Treasury Department on Thursday, it would draw 
     U.S. commercial banks back into a loan market they have shied 
     away from for more than a decade--Latin American public debt.
       Public sector loans badly burned industry giants such as 
     Citicorp and BankAmerica Corp., when the Mexican government 
     renegotiated loan terms in 1982. Several bankers said that 
     while the Treasury Department's guarantees were reassuring, 
     they hoped not to have to make the loans--even though, they 
     said, Mexico in 1995 is a fundamentally different country 
     than Mexico in 1992.
       Then the government was much more closely involved in a 
     closed Mexican economy that depended heavily on oil exports--
     just when oil prices plummeted, depriving the government of a 
     primary means of paying debts. Now, the Mexican government 
     sports a balanced budget, a smaller debt burden and a more 
     open economy with diverse sources of income.
                                                                    ____

                               Exhibit 3


   STATEMENT BY PRESIDENT CLINTON, SPEAKER GINGRICH, MINORITY LEADER 
        GEPHARDT, MAJORITY LEADER DOLE, MINORITY LEADER DASCHLE

       We agree that, in order to ensure orderly exchange 
     arrangements and stable system of 
     [[Page S4859]] exchange rates, the United States should 
     immediately use the Exchange Stabilization Fund (ESF) to 
     provide appropriate financial assistance for Mexico. We 
     further agree that under Title 31 of the United States Code, 
     Section 5302, the President has full authority to provide 
     this assistance. Because the situation in Mexico raises 
     unique and emergency circumstances, the required assistance 
     to be extended will be available for a period of more than 
     six months in any 12 month period.
       The U.S. will impose strict conditions on the assistance it 
     provides with the goal of ensuring that this package imposes 
     no cost on U.S. taxpayers. We are pleased that other nations 
     have agreed to increase their support. Specifically, the 
     International Monetary Fund today agreed to increase its 
     participation by $10 billion for a total of $17.8 billion. In 
     addition, central banks of a number of industrial countries 
     through the Bank for International Settlements have increased 
     their participation by $5 billion for a total of $10 billion.
       We must act now in order to protect American jobs, prevent 
     an increased flow of illegal immigrants across our borders, 
     ensure stability in this hemisphere, and encourage reform in 
     emerging markets around the world.
       This is an important undertaking, and we believe that the 
     risks of inaction vastly exceed any risks associated with 
     this action. We fully support this effort, and we will work 
     to ensure that its purposes are met.
       We have agreed to act today.

  Mr. DODD. Will my colleague yield?
  Mr. SARBANES. Certainly.
  Mr. DODD. I wish to thank my colleague from Maryland for his 
statement, for laying out what I think is critically important, Mr. 
President, the historical background that brings us to this moment in 
the matter before the Senate, the pending amendment offered by our 
colleague from New York.
  I think it is important for people to point out the timeframe in 
which we are talking about here. We are talking about a little more 
than 60 days now, as I look at the calendar of events, of the matter 
first coming to our attention, as the Senator from Maryland has pointed 
out, roughly on January 11 or thereabouts. It may have been a few days 
earlier than that that the matter actually was raised. But in terms of 
the statements, it was January 11, and then there were a series of 
statements made over those days, roughly 60 days ago, 70 days ago, as I 
understand it, Mr. President.
  It seems to me that when you have a matter of this import, the 
implications of which, as the Senator from Maryland has pointed out, 
are as profound as they are, then we ought to be very conscious of the 
implications should this amendment be adopted.
  I know the Senator from Maryland has asked unanimous consent that 
various statements be included in the Record at the end of his remarks. 
I would like to ask as well, Mr. President, that some additional 
remarks by Brent Scowcroft at the Treasury Department briefing on 
January 30, about 60 days ago, be printed in the Record, along with a 
statement of declaration of support for the President's actions which 
was signed by former Presidents George Bush, Jimmy Carter, and Gerald 
Ford; former Secretaries of State James Baker, Lawrence Eagleburger, 
Alexander Haig, Henry Kissinger, Ed Muskie, and Cyrus Vance; former 
Secretaries of the Treasury Joseph Barr, Lloyd Bentsen, Michael 
Blumenthal, Henry Fowler, and David Kennedy; former Secretaries of 
Commerce Frederick Dent, Juanita Kreps, Robert Mosbacher, Elliot 
Richardson, Maurice Stans, Alexander Trowbridge; former U.S. Trade 
Representatives William Brock, William Epert, Carla Hills, Robert 
Strauss, Clayton Yeutter, along with statements from senior 
administration officials going back several administrations and a 
series of distinguished scholars as well, indicating the broad-based 
nature, Mr. President, of those who are knowledgeable about these 
issues as to the action taken by the President.
  I commended at the time Speaker Gingrich and Majority Leader Dole for 
their statements. It was highly responsible for them as the leadership 
now in the Congress of the United States on a matter of this import, 
recognizing that it would take far too much time and it was likely to 
be very complicated here in the Congress, to make their recommendation 
that the President go forward and do what he did 60 days ago. We are 
hardly into this at all.
  And so I commend my colleague from Maryland for his statement on the 
matter. I would further point out, Mr. President, I think it is 
important to note that just in the last day or so we have seen some 
very positive signs, by the way, occurring within Mexico.
  The stabilization package as adopted is a strong one, as our 
colleague from New York has pointed out, and he is correct in stating 
that. It is very strong.
  We had, of course, statements--because there is an exposure here, 
potential exposure, no doubt about that, but if we had not insisted 
upon a tough economic package in Mexico, I am just as certain we would 
have heard we were not tough enough on insisting that there be strong 
economic conditions imposed on Mexico to try to get its economic house 
in order, and had we not done that, the exposure to U.S. taxpayers 
might have been greater.
  Let me just highlight, if I can, the positive news in the last few 
days. And, again, we all hope it works. I cannot imagine anyone not 
wanting to see this work. Of course, we are not in on it alone. There 
are a number of other major financial institutions which have made 
significant commitments to try to resolve this issue internally. They 
have upheld the tight money policy, and we are seeing results.
  The nominal money supply has shrunk by 13 percent since the beginning 
of the year, and the real numbers by 23 percent through March 15. They 
have tightened their fiscal policy. Most recently, the congress 
approved a 50-percent increase in the value-added tax. Imagine trying 
to do here any tax increase. That is their congress adopting that. 
Electric and energy prices were raised significantly in real terms.
  These are all over the last few days. Labor and wages seem to be 
under control. Market conditions have so far kept wage awards 
significantly below inflation despite the Government's decision to 
dispense with the PACTO.
  Already economic adjustments are starting to work as seen by the 
swing in Mexico's trade balance to a surplus of $453 million in 
February, the first surplus, I might point out, since November 1990.
  The markets are also responding, which is a critical element here. 
How is the rest of the world reacting to what Mexico is doing?
  The bolsa in Mexico City is up 15 percent since last week, 
representing a 21-percent gain in dollar terms.
  Prices on par Brady bonds have risen 11 percent from their recent low 
on March 16, and if the collateral is stripped away so that only Mexico 
risk is measured, the increase in value has been 17 percent.
  Signs of declining volatility in peso trading have emerged, with the 
peso closing below 7 since March 23, and now trading within a narrower 
range.
  The demand for Government securities rose in this week's primary 
auctions to 2.4 times the amount offered. Interest rates dropped 7.7 
percent, to 75 percent on the benchmark issue.
  According to March 24 diplomatic reporting, ``analysts are optimistic 
that the buying strength today of peso was not just bargain hunters but 
rather represents the beginning of a consolidation which will lead to 
restored growth.''
  Wall street investment houses, while still more cautious, have also 
seen an upturn in sentiment. For example, last week Merrill Lynch 
increased its Mexico weighting on its global equity portfolio from 17 
to 22 percent.
  If these are in fact early signs that financial market sentiment is 
turning, an important factor has been the much greater transparency now 
maintained by Mexican economic and financial institutions, and the 
central bank in particular.
  Of particular importance was one of the conditions of our agreements 
with Mexico, the weekly publication of the central bank's balance 
sheet. The Bank of Mexico transmitted the first of these publications 
last week.
  Now, not only us, but all market participants can monitor Mexico's 
progress in rebuilding international reserves and maintaining tight 
control over the money supply.
  Reserves are low--the Bank of Mexico announced $7.854 billion as of 
March 17. But with this new transparency, nobody in the market has to 
guess how low, and that has provided some reassurance.
  One can find many pessimistic things to say about Mexico right now--
the shattered confidence of foreign investors, the sharp recession 
ahead, and the political uncertainties. In particular, 
[[Page S4860]] concerns are focused on: the fragility of the banking 
sector and whether or not the program the Mexicans have put in place 
can work without the need to print money to bail out the banks.
  The banks have a serious problem of high levels of loan delinquencies 
and an increasing level of bad loans which may result in the need for 
recapitalization for many banks;
  Mexico recognizes this is a crucial problem and is implementing 
measures to shore up the banking system. Also, the World Bank and the 
IDB will make over $2 billion in resources available to assist banks 
suffering from liquidity shortages and to restructure problem banks.
  The point is that we are beginning to see or hear some very positive 
indications that this proposal that enjoyed such broad support only a 
few weeks ago is beginning to produce some results.
  Now I think all of us know here that when we use our remarks here on 
the floor of the Congress, we can have a profound effect on markets. 
Certainly, my colleague and my friend from New York knows, in his new 
capacity as chairman of the Senate Banking Committee, that it is not 
just another Member talking, it is the chairman of the Banking 
Committee. He knows full well the significance of his role, and he 
cares about the issue, obviously, very deeply and dearly.
  But at the very hour that we are trying here to build some 
confidence, because as Chairman Greenspan pointed out and Jack Kemp, to 
his credit, testified about how important it was to be involved here--
he has a disagreement over what we ought to be doing but, nonetheless, 
he feels very strongly we ought to be weighing in here--that the word 
``confidence'' is critical.
  If there is an erosion in confidence, if those who make the decisions 
and make the investments and sit around that table believe that we do 
not have confidence here that this plan that we have worked out with so 
many others is about the best we can do and has a chance of succeeding, 
if that confidence erodes within Mexico and the global markets, you 
have a self-fulfilling prophecy and you will get exactly the 
predictable result.
  So here, within 60 days or so of having made a decision to go forward 
with the kind of bilateral support that is critical at moments like 
this, if we undermine and erode that, if this amendment is adopted--and 
there will be a vote on it--if this amendment is adopted, then you will 
see, I believe, the kind of reactions that will not serve anyone's 
interests well.
  So I urge my colleagues to reject the amendment. I say that with all 
due respect to the author of the amendment. He and I have talked about 
this. We have been in forums elsewhere on it.
  He is not incorrect to say this is risky. Of course, it has some risk 
involved in it. There is no question about that. But the risk of doing 
nothing at all, Mr. President, of allowing the situation to deteriorate 
further, certainly, in my view, is a far riskier path to follow.
  The President of the United States did what a leader is supposed to 
do in these matters. He does not have the luxury of just making 
speeches or offering amendments on the subject. Ultimately, his 
decisions on these matters are critical. It took strength and 
independence, but also the support of the majority leader of this body 
and the Speaker of the other body to stand with him and say, ``You are 
doing the right thing. Mr. President, you are doing the right thing.'' 
And, as result, him taking that action. And now 60 days later, to come 
in and have this body undo all of that before it has even had a chance 
to prove whether or not it is going to work--and, in fact, signs are 
that it is beginning to produce the results--I think is the wrong step 
for us to be taking.
  But, obviously, each and every one of us here will have to make up 
their mind as they come to vote on this matter shortly and decide 
whether or not to limit the amount of exposure here to the $5 billion, 
which will obviously cause people to draw the conclusion we are pulling 
out of this. I cannot imagine how other markets and other places are 
going to react if that result occurs. But, if it does, then I think 
very clearly--very, very clearly--it is this moment on this amendment 
that will bear a sizable degree of the responsibility for that result, 
in my opinion.
  We all have to make decisions around here. Some of them are tough. 
This is not an easy one because, obviously, the potential for exposure 
is there. No question about it. But if this goes south on us, I think 
we should also be aware of what the implications may be.
  My colleagues should also be aware that what may happen is not 
limited, of course, to Mexico. It limits the President's flexibility to 
help any country without congressional approval. We have seen Argentina 
recently going through a very difficult situation. I think they are 
doing pretty well now and coming out of it. But they will tell you, as 
the Foreign Minister did to those who met with him a week or so ago, 
that their economic problems were directly related to the situation in 
Mexico. And if we move away here, we could be looking at a situation 
elsewhere in this hemisphere that I think we could come to regret.
  So, again, I appreciate the good debating points and scoring 
particular marks here and there. But this is one that, as the Senator 
from Maryland has pointed out, has monumental and profound 
significance. If this amendment is adopted, as I suspect it is apt to 
be, again, given the mood here, if it is, I think clearly those who 
have offered it and those who support it will have to answer ultimately 
if, in fact, the markets react as I think they are apt to.
  That should have had a question mark at the end of it, Mr. President. 
I apologize to the Chair and my colleagues for that.
  I thank the Senator from Maryland and I thank my colleague from New 
York.
  Mr. President, I yield the floor.
  Mr. D'AMATO addressed the Chair.
  The PRESIDING OFFICER. The Senator from New York is recognized.
  Mr. D'AMATO. Mr. President, I in no way dispute the fact that there 
were negotiations held by the administration, I think in good faith, 
with the leadership of the Congress and indeed with the Congress. The 
fact is, they could not build a consensus. The fact is that the 
congressional leaders, notwithstanding their readiness to help--and, 
indeed, on January 11, I did indicate that we must help Mexico 
stabilize the peso, the peso, to renegotiate their debt.
  And I say to renegotiate their debt. I have never believed that we 
were going to pay off everybody dollar for dollar, speculators, 
investors, without knowing who they were, just to turn it over to them 
and say, ``Here, come on in to renegotiate this debt.''
  A guy has a bond that is coming due, and we come in and give him 
everything, dollar for dollar? That is not renegotiating a debt. Is 
that the way we manage the money of the people?
  I daresay, the impressive list of names who said yes, we have to 
help, all of them that were read--impressive. Is that what they would 
have done if they were representing their interests, their economic 
interests? Is that how they would renegotiate a debt? I do not think 
so.
  My colleague, Senator Faircloth, has pointed out to me that not one 
of them would sign a note. Would they sign a note under these terms? I 
do not think so.
  It is wonderful to say we want to help our neighbors. And, yes, I did 
send this--and I support it--January 11. And I said, because it is a 
long-term investment in growth that will improve the quality of life of 
all Mexicans and, by extension, the quality of life here in America, 
this Senator went into this with an open view, as did Senator Dole.
  Let us talk about what Senator Dole did a month ago, because he was 
concerned. He was concerned in terms of how his initial readiness to 
come to the support of his country, in doing what was right, and his 
President--and it is our President.
  In a letter dated March 10, he said: ``My good-faith effort in 
January''--and I am reading parts of it; I will put the whole letter in 
the Record.

       My good-faith effort in January to cooperate with the 
     administration in no way should be interpreted as any 
     protection from legitimate and responsible congressional 
     oversight. Congress and its committees have every right, and 
     the constitutional duty, to examine it thoroughly.


[[Page S4861]]

  He said very specifically on January 31:

       In an effort to avoid the complete financial collapse, I 
     participated with other leaders in a statement supporting the 
     President's use of ESF. However, this expression was not 
     intended and should not be construed, to convey my blanket 
     support for the underlying policies of the administration or 
     for the economic and legal agreements that the administration 
     will enter into. To the contrary, I reserve these judgments, 
     and I have since cautioned the administration to be careful 
     in its use of ESF. I have expressed deep reservations about 
     the shortcomings of the agreement.

  That was March 10.
  This is from February 24. I will read into the Record what Senator 
Dole said from part of the Congressional Record:

       The primary focus of the stabilization plan is not aimed at 
     reversing the fundamental mistakes of devaluation--not now 
     and not over time. The measures described in the agreement to 
     firm up the price of the peso seems almost an afterthought.

  He is being critical of what the administration was now telling him.

       It is one thing to say we want to strengthen the peso, give 
     them an opportunity, give them a term to convert their short-
     term debt, to restructure.

  And then to hear they are just paying off this debt. They are paying 
this off.

       They do not address the problems of extinguishing--

  This is Dole--

       The excess pesos that have been coming off the Mexican 
     printing presses even as recently as last week.

  The heart of the problem is the Mexican Government was printing up 
pesos. Sure, you are going to devalue it. Those printing presses are 
continuing today. Who is benefiting? The Mexican people are not 
benefiting. I would not brag that we have increased the consumption tax 
on working people, poor people in Mexico, by 50 percent and increased 
the energy tax on the Mexican people. They hold us responsible.
  I want to know how that helps us. Let us not take the fact that the 
congressional leaders were willing to undertake and say, yes, Mr. 
President, go forward. Now 60 days have followed and what have we found 
out? We know that $5 billion has been spent. We were told initially 
that this plan would not necessitate our putting out any money. And 
indeed, Alan Greenspan said, ``If you have to draw down our money, the 
plan is not working.'' I am suggesting to you now that the plan is not 
working. They are drawing down on U.S. money.
  Let us look at what this bill does. This bill does not say you cannot 
help anybody else to stabilize their dollar. I think, by the way, that 
goes beyond what was intended. I am not going to debate that. It says 
you can only do it to the extent of $5 billion. I hope that, later on, 
we will reexamine that, because I think $5 billion gives far too much 
authority to the administration, to the President, utilizing it as he 
has as a foreign aid package or as a loan package in contravention of 
the law.
  Again, we have an obligation. Let me say, whether or not the leaders 
have agreed and said, ``Yes, we support you,'' they do not bind us. 
Congress has to vote, with all due respect. Senator Dole is a colleague 
and a friend whose opinion I value. But he went on the record and said, 
listen, you are not doing what you told us. You are not doing it. You 
are not extinguishing those pesos. The printing presses are still 
rolling on.
  Let us not abdicate our responsibility. In the next several weeks, 
another 30 days, there will be x number of dollars committed--another 
$3, $4, $5 billion--and we have reason to believe it is in that nature 
and it is going to be invested. I have to tell you that I did not put 
my vote into a blind trust based upon good will. And when we examine 
the good will, we find absent the facts that would have any prudent 
person making this kind of investment.
  I daresay it is pretty good for some people as respected economists, 
former officials, to say they would advise that the United States do 
this. But it is not their money. It is easy to be frivolous with other 
people's moneys--taxpayers' moneys. That is what is taking place here.
  So, the fact of the matter is, I could not care a whit if, at some 
point in time, the leaders of the Congress said, ``We will let the 
President handle this; he will sink or swim on it.'' I think it is more 
important, and I think the Constitution of the United States is 
important, I think the delegation of our authority--everybody here 
knows what is happening. Do we want to delegate our authority? Are we 
saying that, for all times, whoever is the President, he or she does 
not have to come to the Congress with this kind of appropriation that 
will mean $20 billion? In a rescission bill, we are looking to cut $13 
or $14 billion. Here is $20-plus billion with no congressional 
approval. Oh, yes, the leaders came together and said, ``We think it is 
a good idea, and, by the way, we do not want our people to have to vote 
on it, so you go ahead and do it.''
  Does that absolve us of our responsibilities? Is this weighty? Sure. 
I know I am going to be savaged and pilloried. The investment houses 
are going to be up there beating me up, saying, ``It is the Senator's 
fault.'' I did not create the corruption in Mexico or the devaluation 
in Mexico. I did not make the megabillionaires down there. I did not 
create that aristocracy that has robbed from the people for years and 
years. I did not create the myth that Salinas was a tremendous leader. 
We were told that for years by administration after administration. 
They said he is terrific. What terrific? His brother is involved in a 
killing. His Deputy Attorney General is running away with $24 million 
in the bank. Drugs are coming in here at unprecedented rates. Sixty 
percent of the narcotraffic is coming in from Mexico. The son of the 
former Agriculture Minister, a billionaire, is dealing in drugs.
  What is going on? They say, if it collapses, they will blame you. It 
has collapsed. It has collapsed. When you talk about a rescue of the 
market that goes up 10 percent--10 percent from what? From the bottom, 
from the floor? It should go up. The dummies up north are sending the 
money in. Do we know who we are helping to restructure the debt? No. 
What kind of restructuring is this? Did you take Senator Dole as saying 
we want to help and we understand the importance of Mexico 
strategically as an ally in our political hemisphere with the borders 
we share and the commonality of interest, our desire for freedom, and 
you do whatever you want? Oh, no, nobody assigned that. Senator Dole or 
Congressman Gingrich did not assign that.
  Ultimately, we have a responsibility, whether we like it or not. We 
better well vote on this, one way or the other. If you say that you are 
happy with the administration, with what they are doing in committee 
and you want to delegate your authority, then, by gosh, vote against 
this. If you say, I do not want to be responsible because they will 
blame me for the collapse, that is up to you. The fact of the matter is 
they have collapsed.
  The people of Mexico are angry at the United States and at their 
corrupt government. If Zedillo is as good as people say, let us work 
with him. Let us not give a blank check, as we have and as we are. 
Those conditions do not meet what is merely necessary. Can you imagine 
we take pride in the fact that Mexico, as a result of the loan we made 
to them, increased their tax by 50 percent on consumption? They 
increased their prices for energy to the poor. They brought in wage and 
price controls in certain sectors. Terrific. That we should be happy 
for? The people already have taken billions of dollars, in terms of 
those notes, the tesobonos, and European notes; they have come in and 
gotten all of the taxpayers' money, plus 20 percent--in some cases, 25 
percent--and we do not even know who they are. How did that benefit the 
Mexican people? I want to know. How did that benefit the workers when 
these foreign speculators came in, took their money, and left? How did 
that keep Mexico and its economy from collapsing? There is some report 
that says the congressional leadership breathed a sigh of relief.
  Is that why we are sent here? Is that why we were sent here? To duck 
our responsibilities? When we know darn well that the carrying out of 
this loan promise, as it is being done, violates the law, that it is 
being done in circumvention of what we, the Congress of the United 
States--not the leaders of the Congress, plus the administration plus 
the President, but the Congress of the United States has the 
responsibility as it relates to the authorization and appropriation of 
money.
  [[Page S4862]] From the Constitution, article I, section 9: ``No 
money shall be drawn from the Treasury but in consequence of 
appropriations made by law.''
  I yield the floor.
  Mr. SARBANES. Mr. President, first of all, I think it is very 
important to set the record straight in view of the comments by my 
colleague from New York that any action was taken in violation of law 
or in contravention of law. He may differ with a policy. That is what 
serving here is all about. But to charge people with illegalities is a 
different matter.
  The Department of Justice, the Assistant Attorney General, issued an 
opinion that found the use of the Exchange Stabilization Fund to 
provide loans and credits to Mexico was legal, and that opinion 
supported an opinion of the general counsel of the Department of the 
Treasury which reached the same conclusion.
  In a memorandum from the Assistant Attorney General to the general 
counsel of the Treasury Department, a cover memorandum to his opinion, 
he said:

       Prior to the execution of the agreements--these are the 
     agreements with Mexico--we orally advised your office that in 
     our view the President and the Secretary could use the ESF in 
     the manner contemplated by the President when he proposed a 
     support package. We also provided comments on drafts of a 
     legal opinion prepared by your office for the Secretary 
     regarding such use of the ESF. This memorandum confirms the 
     oral advice we provided to your office. It also confirms that 
     we have reviewed the final version of your legal opinion and 
     that we concur in your conclusion that the President and the 
     Secretary have the authority to use the ESF in connection 
     with the support package.

  Now, if the Senator from New York wants to attack the policy, that is 
one matter. But he ought not to accuse people of contravening the law 
unless he can lay out a case to support that. There are two strong 
legal opinions here, one by the general counsel of the Treasury 
Department and one by the Assistant Attorney General, that support the 
authority of the President and the Secretary to use the ESF in 
connection with this support package.
  I want to be very clear about that. There was a saying in World War 
II, ``Loose lips sink ships.'' I do not see why people who are trying 
to do the best they can to deal with a problem and to establish a 
policy ought to come under attack as having contravened the law when, 
obviously, they had strong legal opinions both from the Department of 
Justice and from the general counsel of the Treasury Department that 
the action they proposed to take was within the authority of the 
President and of the Secretary of the Treasury and when, in fact, the 
congressional leadership agreed, as well.
  In fact, they said in the statement of January 31 by the President 
and Speaker Gingrich and Majority Leader Dole and leaders Gephardt and 
Daschle, ``We further agree that under title 31 of the United States 
Code, section 5302, the President has full authority to provide this 
assistance.'' That is, assistance that was going to be provided under 
the Exchange Stabilization Fund.
  So let Members quarrel if we choose to do so about the policy, but 
let Members not levy charges of illegal action when clearly there was 
none.
  Let me make one final point about the policy. When the Congress 
indicated difficulty in arriving at support for the $40 billion loan 
guarantee, which was the initial proposal--the use of the Exchange 
Stabilization Fund was going to be half of that amount--but when they 
had difficulty, the leadership then indicated to the President, ``We 
think you should use the Exchange Stabilization Fund.''
  Now, that is what happened. They went ahead with that package about 6 
or 7 weeks ago. That was the plan that was put into affect in order to 
try to address the crisis in the Mexican economy.
  Now, if people had said, ``Do not use the Exchange Stabilization 
Fund,'' I assume the administration would have pursued its efforts to 
try to gain congressional approval, which it may or may not have 
gained. In that debate, many of the points that are being raised here 
on the floor would have been relevant to reaching a judgment.
  The use of the fund was a judgment the President made. The 
congressional leadership supported him. There was general acquiescence 
by the Congress. Here we are, 7 weeks later, after this plan has been 
put into effect, after this package has been devised, after the 
agreements have been reached with the Mexicans, after we have tried to 
get a package working, and now we are going to pull the rug out from 
under this package.
  Now, make no mistake about it, that is in effect what is being done 
here. People need to clearly understand that that is the case. The fact 
is that we had executive-legislative cooperation to try to find a 
common approach to resolve this problem. It was achieved. Now we have 
some Members coming and seeking to undo it.
  The fact is we have a program that is under way. This, in effect, 
would negate that program. Be very clear about that. It would negate 
the program. It does not have an alternative connected with it. It is 
not as though someone was saying, ``Well, look, I am not so sure about 
your program, and I have a better program. Here is my program, and it 
is part of this amendment. It is part of this amendment that I have 
before you now, right here.'' That is not the case. There is not an 
alternative program connected with this. This is a negation of the 
existing program, with all the consequences that will flow from that. 
And there are severe and serious consequences.
  So, if the bottom line of the supporters of this program is not that 
Mexico can simply collapse--if that is the bottom line, I understand 
this amendment. Because this amendment would negate the existing 
program designed to avoid that collapse.
 It does not substitute a different program to avoid the collapse. So, 
if your bottom line is: Fine, it ought to collapse, then that is 
consistent with the amendment that is before us. That is the degree and 
the extent of the serious ramifications and consequences of the 
proposal that is before this body.

  Several Senators addressed the Chair.
  The PRESIDING OFFICER (Mr. Gregg). The Senator from New York is 
recognized.
  Mr. D'AMATO. Mr. President, first of all, I do not recall having used 
the word ``illegality.'' I used the word ``circumvention.'' I certainly 
think that is appropriate, and I certainly think that is exactly what 
has taken place. I have used language in terms of the abdication of our 
responsibility, and I believe that to be the case.
  The fact of the matter is we are talking about spending $20 billion 
plus. The fact of the matter is this is foreign aid, and it is a loan, 
and there is a real question as to whether or not those loans can be 
repaid. If careful reading of those memoranda of law that have been 
submitted justify and give to the administration its ability to go 
forward and is the basis, it really talks about that on page 6. It 
says:

       Although loans and credit are clearly permitted under ESF, 
     their purpose must be to maintain orderly exchange 
     arrangements and a stable system of exchange rates and not to 
     serve as foreign aid.

  We may begin splitting hairs, but let me tell you something. When you 
are paying off the obligations of banks, when you are paying off the 
obligations of a government, you are going far beyond just maintaining 
exchange stabilization rates.
  If anybody wants to say they know we are going to get paid back, that 
is wrong. Indeed, that is why they set up the collateral system. 
Indeed, when one begins to examine and look at the nature of that 
collateral system, there is no lien on that oil. And if there is a 
default, those revenues that are in the bank at the time can be 
utilized, but let me suggest they are not going to be nearly sufficient 
to cover the kinds of defaults as we get deeper and deeper into this 
with loan repayments not scheduled in some areas for 7 years out.
  Look, it may very well be there is no better option. I doubt that. 
When the question is raised, ``Do you have a plan?'' we put forth an 
idea. The administration rejected it. We had hearings. We had hearings 
where Mr. Perl testified, where Bill Seidman testified. We said we will 
get involved in some workout. You just do not pay people dollar for 
dollar. You come in, here they are.
  Let me read what Tom Friedman, New York Times, March 8, 1995, wrote. 
It is very, very interesting:

       [[Page S4863]] Mexican malfunction. Mexico City. So far all 
     that has happened is that the foreign bondholders are cashing 
     in their bonds.

  That is what they are doing. They cashed them in. And where do you 
think the money came from to guarantee the repayment, to get them the 
repayment? Plus they got all their interest. Nothing renegotiated; 
nobody said to them, ``Listen, we will roll this over for 10 years.'' 
That is how you do it. You want to say I am micromanaging? We brought 
this to the attention of the administration, the Banking Committee, and 
asked them why, long before this. It is not just 7 weeks have gone by 
and there is a wonderful plan. It is 7 weeks and $5 billion of American 
taxpayers' dollars.
  Now Congress has an obligation to look and see what is taking place 
down there--everybody. You are happy with what is going on? Then go 
ahead and vote no. If you believe that we are engaged in a plan that 
will achieve economic stability for Mexico, that is being administered 
correctly, that will bring about the desired results for the United 
States as well, then fine.
  I have not seen it. I know the printing presses are still turning out 
pesos. I know the political stability necessary to carry out that kind 
of plan never can work.
  Do you think people are really going to continue to sit back and 
allow interest rates at 80 percent? Cannot pay their mortgages? Banks 
being run out of capital? Do you think this is going to work?
  What kind of idea is this? And the printing presses turn it out. The 
pesos are still coming off the mill. But we are not supposed to raise 
anything because, you see, then you will be accused of being the person 
who blew up the economy of Mexico.
  I did not do it. This Congress did not do it. The American people did 
not do it. And by sending $20 billion plus down there we are not going 
to rescue them, save them.
  It was like the fable about the king who had no clothes, no suit. It 
took a kid saying, ``You have no suit.'' Everybody was around saying, 
``Hurray, hurray.'' They were all afraid to say the king had no suit.
  We are all afraid to say this program is not working. You have not 
demonstrated it and we have an obligation to see it, to know how these 
dollars are being spent. We do. We have an obligation to see whether or 
not this plan is going to work. I have not seen that proof to date.
  I do not insert myself in here lightly. I waited and I waited. I 
wanted to offer legislation prior.
  I have not seen anything, but I have learned things that are very 
distressing. I learned that the so-called underlying collateral may not 
be there in sufficiency to see to it that we can assure this revenue 
stream. I have seen that the people of Mexico have said, ``Over our 
dead body are you going to take our oil.'' I have seen the public 
relations and the polls, as it relates to the people of Mexico, blaming 
us for their catastrophe.
  Look, this is a tough problem, but I do not think we are going about 
it the right way and I do not think we have the right to delegate our 
authority. That is what we have done. We put our votes, as it relates 
to appropriations, in a blind trust and have given it to the 
administration. If we want to do that, let us vote to do it. That is 
really what it comes down to.
  I am not accusing people of illegality in the sense that we normally 
use that word. But I am saying it is an abrogation of our authority, 
and I am saying we have an obligation to either vote for or against the 
methodology in which we are proceeding in Mexico.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Connecticut is recognized.
  Mr. DODD. Mr. President, there are a couple of points I would like to 
make, if I could, about this.
  First of all, I urge my colleagues--I know it is something we do not 
do with great regularity around here--but I urge you to read the 
amendment. It is only a page and a half long, but I think it is 
important that Members read every word of it. The word ``Mexico'' does 
not appear in this amendment anyplace. So it is not just about Mexico. 
If this amendment is adopted, as I suspect it is apt to be, it will be 
effective to any country, any place. So when you are talking about a 
crisis in NATO or Israel or some other place--understand here what we 
are doing with this. By adopting this amendment here we are saying 
Mexico, if it were included here--you would say because you were 
unhappy about this plan, this would prohibit, through a program that 
has been in existence since 1934, the Exchange Rate Stabilization 
Program, for the President to respond and react.
  I hope my colleagues, as they assess this amendment, would appreciate 
and understand the implications of this. Talking about $5 billion in 
Mexico is one thing. Talking about larger economies where the 
implications can be far more significant is another matter indeed.
  President Clinton did not invent the Exchange Rate Stabilization 
Program at all. This has been around, as I said, for a long time. It 
has been used. It is designed to be used for these kinds of situations 
to provide some stability because it is in our interests to do so.
  This is not a Christmastime, some gift we are giving away here. This 
is directly in our interests. Those Members of this body who represent 
States along the border areas are the ones who will feel it first and 
the hardest.
  So when you send a message out here that we are walking away from 
this, after we encourage the IMF, the Inter-American Development Bank, 
and a variety of other organizations to step forward, here is our 
commitment on the table, what we will do, would you please join us in 
this effort? They say, fine, we will agree. And then 6 weeks later we 
say, sorry, we are going the other way.
  I mean that is wonderful leadership. That is wonderful leadership, 
global leadership in the wake of the end of the cold war, where we run 
around here and our agreements only last about 60 days.
  So, Mr. President, I urge my colleagues to appreciate what this 
amendment does. It goes far beyond Mexico. It goes to the very ability 
of any administration to respond to a crisis that could have 
significant implications on our own economy in this country.
  Again, I think the points----
  Mr. SARBANES. Will the Senator yield on that point?
  Mr. DODD. I will be glad to yield.
  Mr. SARBANES. What is an administration to do? They come to the 
Congress with a package. Then the leadership said we are having some 
difficulty with that package, why do you not use the stabilization 
fund?
  They get legal opinions saying they have the authority to use the 
stabilization fund. They get strong support from the leadership and a 
general acquiescence from the Congress. Let us be honest about it, that 
is what it amounted to. Most Members of the Congress said, ``If the 
President wants to take the risk and the burden, you know, let it fall 
on his shoulders and in that way we will deal with the Mexican problem 
but I will not be directly implicated, as it were.'' So they move ahead 
with it and there is a rescue package in place.
  Now people come along with an amendment which will destroy that 
rescue package. Make no bones about it, that is exactly what it will 
do. They do not have an alternative rescue package. They are negating 
the existing one, unconnected to a replacement package. So, in effect 
the consequences of a collapse run directly with this amendment, in my 
judgment.
  This is serious business we are talking about here. This is not 
simply making sort of political points. This is not simply doing 
oversight, where you put them on the griddle but, you know, the policy 
continues. This is ending the package and taking the consequences. Is 
that not correct?
  Is that correct?
  Mr. DODD. The Senator from Maryland is absolutely correct. It 
deserves being reiterated. Just consider, and for most people it is not 
difficult to connect all the dots. Everyone agrees we should do 
something. The administration was told by the leadership you cannot get 
something through Congress. They come up and say, ``Why don't you use 
the ESF fund?'' The leadership says, ``That is a great idea. We support 
you. We back you. Go out and get other people to support it around the 
globe.''
  So we have an international response. It is not just the United 
States stepping forward. The President says, ``Thank you. All right. I 
will try that. 
[[Page S4864]] I will assume all the responsibility.'' No one has cast 
a vote on this because they were told by the new leadership that you 
cannot get the votes up here. ``We cannot produce the votes for you. We 
agree with you. We cannot produce the votes. You take a dive into the 
pool.''
  Now, 6 weeks later, to turn around and say, sorry, we want to 
absolutely destroy the very idea at the very hour, I reiterate, when 
there are clear indications that it is beginning to work. If the 
economic indicators and market responses are accurate in the last 6 
days, this is beginning to produce the desired results that we all 
sought. And right at the very moment that we are getting those kinds of 
results, we walk in and say, ``Sorry. We do not like it anymore up 
here.'' What kind of leadership is that?
  What kind of leadership is that to devastate, not just here, I tell 
you, but as pointed out by knowledgeable people, capital is cautious. 
It is very, very cautious. When the markets see and investors see a 
schizophrenic Congress, when it comes down to making decisions about 
whether or not it is going to stick up and stay with something they 
recommend, that capital does not just depart the target country that is 
the subject of this debate; it gets skittish all over the world.
  There is enough ample evidence to support exactly that. We have seen 
just in the last few weeks reactions in Argentina, Chile, Brazil, Hong 
Kong, in Singapore, and South Africa--all of which have reacted to the 
Mexican situation. That is now beginning to stabilize because it is 
beginning to work.
  The adoption of this amendment--and my view is that it will be 
adopted because it is the popular thing to do, I suppose, to go along. 
If that is the case, then the implications in these other markets, I 
think, will be felt. Who gets hurt by this? Certainly, these countries 
do. But do you know who gets hurt most of all? We do. It is a self-
inflicted wound on American business, on jobs in this country, if this 
is adopted.
  So, Mr. President, I again respect people disagreeing with various 
aspects of proposals. We had a good hearing a few weeks ago. The 
Senator from Maryland is absolutely correct. We had excellent testimony 
from Jack Kemp, who came. He would have preferred that the exchange of 
funds be used to buy pesos. But he prefaced his remarks by saying you 
have to stay involved here. This is the right course to be followed. He 
disagrees with the specifics of a program.
  We heard from Alan Greenspan. Every responsible individual who has 
looked at this issue, regardless of ideology or politics, has said this 
is the right course to be following. It is in our interest to be 
following it, and particularly when this institution's knees buckled 60 
days ago, and we said we cannot face up to this issue. But leadership 
said to go ahead and do it; we back you.
  Then, once they go off a course recommended by the leadership, and 
then to turn around and say we are now going to pull the rug out from 
underneath you, that is the height of irresponsibility. The 
implications of it which we will have to bear are those who vote for 
this support it, when you get the kind of market reaction we may have 
seen already just as a result of the debate that goes on. There is a 
place for raising these issues and discussing them, and trying to look 
at it differently. I do not think this is the proper way to be going 
about it.
  Mr. KENNEDY. Mr. President, will the Senator yield for a question?
  Mr. DODD. I am glad to yield to my colleague.
  Mr. KENNEDY. I think many of us believe that the issue which was 
going to be before the Senate was the rescission issue. I know Senator 
Daschle had an amendment which many of us were interested in that 
involved children, involved education, involved whether we are going to 
see continued reduction in children's programs and support for 
education, funds that may very well be used in terms of reducing taxes. 
The real debate and discussion on the whole question of the Nation's 
priorities was going to take place.
  I am just wondering about this measure here. What exactly does this 
measure have to do with the broader issue of rescissions and the issue 
that I thought we were debating and which been scheduled by the leaders 
and which many of us thought we were going to have an opportunity to 
exchange views on here this afternoon?
  Mr. DODD. Mr. President, I say to my colleague, this has absolutely 
nothing to do with it. The Senator from Massachusetts is absolutely 
correct. The Senator from Oregon is with us, the chairman of the 
Appropriations Committee. The matter before the body was the 
rescissions package. Frankly, like probably most of my colleagues, I 
was prepared to come over and give a speech on the rescissions package. 
I have the speech. I will be delighted to give it at some point.
  This matter came up. Frankly, I say to my colleague from 
Massachusetts, were this an amendment not necessarily of great import, 
I would say we move on. But I have to say to my colleague from 
Massachusetts, now that the matter has been raised, it is significant. 
This is not an insignificant amendment.
  So I regret that we are in the middle of it. The Senator from New 
York is exercising his right as a Member of this body, of course, to 
raise an amendment. That is his right, and I certainly would fight to 
protect his right to do it. He is doing exactly what he has a right to 
do. I do not disagree with him exercising that right. I have done it 
myself on other matters in the past. But the fact of the matter is the 
Senator from Massachusetts is correct. This has nothing to do with the 
rescission package.
  Mr. KENNEDY. Mr. President, the reason I raise this is because there 
has been a good deal of at least talk about how we are going to finish 
this particular measure, and what period of time, and that we hope we 
will have a good debate and discuss some of these matters, but that we 
are not going to have prolonged debate and discussion on some of these 
measures.
  Here we are now, well into the afternoon. The schedule is complicated 
by Members having at least made appointments in other parts of the 
country, and the rest. But I am just wondering, on a measure of this 
importance--I see a member of the Foreign Relations Committee, the 
Senator from Connecticut, as well as the Senator from Maryland. This 
was a measure which was reported out of the Foreign Relations 
Committee.
  Mr. DODD. I say to my colleague from Massachusetts that this is a 
matter which has obviously foreign policy implications. But the 
jurisdiction of this particular approach comes out of the Banking 
Committee.
  Mr. KENNEDY. Both Members are on the Banking Committee.
  Mr. SARBANES. Will the Senator yield for a moment?
  Mr. D'AMATO. Senator Dodd had the floor.
  Mr. DODD. I am glad to yield to my colleague from Maryland.
  Mr. SARBANES. This amendment is not related----
  Mr. D'AMATO. Is that for a question, Mr. President? If it is not, I 
will object.
  The PRESIDING OFFICER. Does the Senator from Connecticut yield for a 
question?
  Mr. DODD. I yield for a question, certainly.
  Mr. SARBANES. This matter that has been offered by the Senator from 
New York is not relative to the rescission bill; is that correct?
  Mr. DODD. The Senator from Maryland is absolutely correct. It has no 
relationship whatsoever to the rescission.
  Mr. SARBANES. Is it not true that the Senator has the right to offer 
the amendment, since under the rules of the Senate, you may offer an 
amendment to a measure that is not relevant to the measure? Generally, 
there is a certain amount of self-restraint practiced around here, so 
that you do not completely exercise your rights to the fullest. But the 
Senator has the right to offer it, if he chooses to do so, even though 
it is not relevant to the measure; is that correct?
  Mr. DODD. The Senator from Maryland is absolutely correct. The 
Senator from New York has the right. As I said a moment ago, I would 
certainly defend very strongly his right to offer this amendment.
 I disagree totally, completely with the substance of it. But 
normally----

  Mr. SARBANES. One could also raise a question whether even if you 
have the right, you ought to exercise it. You do not always exercise 
every right to 
[[Page S4865]] the fullest, and there should be some restraint.
  Is it not the case that this amendment, in effect, raises the whole 
basic question about responding to the Mexican economic crisis, and 
that a proposal of this sort, if it is to be considered, ought to have 
extensive consideration? This is not a minor matter that should simply 
be dealt with in an hour or two in this Chamber. This is a major 
proposition that ought to be carefully examined. Does the Senator agree 
with that?
  Mr. DODD. I completely agree with my colleague from Maryland. You 
would have thought--and again, the Senator from Maryland and I are in 
the minority. The amendment is being offered by the chairman of the 
committee of jurisdiction. The chairman of the committee of 
jurisdiction certainly has it within his power to set a markup. It 
would be one thing--if you are the minority, you do not always have the 
rights, but when you are the chairman of the committee and in the 
majority, certainly setting a markup, scheduling a debate, proceeding 
through the normal course in which we do business around here would be 
an appropriate way at least to proceed.
  I still have a strong disagreement, but to have the majority, the 
chairman of the very committee with jurisdiction bring an amendment to 
the floor without even going through his own committee is, I point out 
to my colleague from Maryland, a little out of the ordinary.
  Mr. SARBANES. Will the Senator yield for a further question?
  Mr. DODD. I will be delighted to yield.
  Mr. SARBANES. Is it not reasonable to assume that if we had followed 
the normal process and come through the committee and a measure of this 
sort had been brought to the floor, the debate and the examination of 
that measure might well take days? That would then be a major item on 
the calendar of the Senate, would it not, since this is a major issue? 
It is not as though it is the kind of proposition that the Senate would 
dispose of, if it was dealing with this freestanding, in an hour or 
two. The Senate, in effect, would recognize it as the major item to be 
considered in the particular week in which it was going to be brought 
up, would it not?
  Mr. DODD. I say to my colleague from Maryland, not only is he correct 
in that, but there is ample evidence to support it. The Speaker of the 
other body, when asked whether or not he could bring the matter up, 60 
days ago said it would take at least 2 weeks, 2 weeks to even raise the 
issue and discuss it with the Members of that body, to determine 
whether or not they could bring it forward.
  So the Senator from Maryland is absolutely correct. This would be a 
significant, lengthy debate in this body that would probably go on for 
a number of days, not a couple of hours, on a floor amendment offered 
to a rescission package.
  Mrs. BOXER. Will the Senator yield to me for a question?
  Mr. DODD. I will be glad to yield to my colleague from California.
  Mrs. BOXER. I wish to thank the Senator for coming over. We served 
together in the Banking Committee. I do have a question. And, of 
course, to my chairman, who has long been concerned about this issue, I 
want to say that I share a lot of his concerns.
  I think the question is, Is this the appropriate way to handle this 
matter? I say to my colleague and friend from Connecticut, a long time 
ago I used to be a stockbroker, and the one thing that just set the 
markets off was indecision, change, of course, instability, and the 
need that America stick with its decisions. I just feel that doing this 
in this fashion without, as the Senator from Maryland has stated, ample 
debate and bipartisan discussion, could set the markets off, the 
markets all over the world. And it is something that I fear, frankly.
  I share my chairman's problems with this whole issue. I think that he 
is right to raise them, but I am very concerned that if we do this 
today, the message will go out that America's word is no good, that 
there is a division here, and I am concerned about the financial and 
economic impact all over in the world markets.
  I ask my colleague if he shares that concern.
  Mr. DODD. I say to my colleague from California, the point she raises 
is an important one. When we had the hearing a few weeks ago--and a 
good hearing, I would point out--on this issue with the testimony of a 
former colleague, Jack Kemp; the Chairman of the Federal Reserve Board, 
Alan Greenspan; former Chairman of the Federal Reserve, Paul Volcker; 
along with Bob Rubin, the Secretary of the Treasury, and others, I 
asked the question about what was the most significant, important 
element in all of this, regardless of the particular plans.
  And the word they all agreed on was ``confidence,'' the point having 
been raised by others who understand economic issues that there is 
nothing more cautious than capital, and when there is a lack of 
confidence, that capital lacks confidence. Whether it is domestic 
capital in Mexico or foreign capital that Mexico is trying to attract 
or investors are trying to bring in, if there is a lack of confidence 
in those who should be acting with responsibility in a leadership 
capacity to try to avoid the kind of crisis that could be devastating 
for us, then it seems to me you are going to have the predictable 
results.
  Paul Volcker may have said it best in response to a question of my 
colleague from California.

       Surely this committee is justified in carefully reviewing 
     the approaches taken in this crisis and achieving full 
     understanding of the precipitating events and the responses 
     to them.

  I do not have any disagreement with my colleague from New York 
raising those issues.

       What would be inappropriate, as I see it, would be to 
     either attempt micromanagement of the use of the ESF or to so 
     constrict its future use as to render it ineffective in the 
     face of future crises which, if history tells me anything, 
     are sure to reoccur.

  I point out to my colleague from California that the amendment 
offered by the distinguished Senator from New York does not mention 
Mexico. It applies to all situations globally. And so here we are 
saying, regardless of the crisis, wherever it may occur, that the 
President cannot react with the stabilization fund that has existed for 
60 years, since 1934, that every President has used. So even if you 
agree with the point of our colleague from New York on Mexico, which I 
hope a majority does not, but if you did, the adoption of this 
amendment applies to everybody on the globe.
  Mrs. BOXER. Will my friend yield then for a further question? In 
other words, what the Senator from Connecticut is saying is that the 
amendment deals with each and every country in the world?
  Mr. DODD. There is no country specific in here. In fact, the 
amendment specifically says, I say to my colleague, that:
     . . . the Secretary may not take any action under this 
     subsection with respect to a single foreign government 
     (including agencies or other entities of that government) or 
     with respect to the currency of any single foreign country 
     that would result in expenditures and obligations including 
     contingent obligations [of] $5 billion.

  It is global in effect.
  Mrs. BOXER. So, as I understand it, if a crisis were to develop, let 
us just say in Israel, as an example, or Ireland----
  Mr. D'AMATO. Italy.
  Mr. DODD. Italy.
  Mrs. BOXER. We will take Italy as an example.
  Mr. D'AMATO. Greece.
  Mrs. BOXER. I think this is an important point. We are legislators 
here. We ought to know what we are doing. If a crisis were to develop 
in a country, and the world leaders got together and said we must act 
quickly--and let us say it was when Congress was not in session, and 
these things do occur; I have seen wars break out when Congress is 
away--then our President would really be there in form only, because in 
reality he could not act along with other world leaders if there was 
such a monetary crisis. Is that correct?
  Mr. DODD. As I read the amendment, that is the case, because it is 
not country specific. It does not address Mexico. It says a single 
foreign country. That is pretty broad, to put it mildly.
  Mrs. BOXER. I thank my colleague.
  Mr. HATFIELD. Will the Senator yield for a question?
   [[Page S4866]] Mr. DODD. I will be happy to yield to my colleague.
  Mr. HATFIELD. My question is to the Senator from Connecticut as to 
this colloquy that is being engaged. Could I get some idea about how 
much longer the Senator will hold the floor? I ask the question in 
order to move this bill. I would like to be able to ask for unanimous 
consent, and receive unanimous consent when I do have that chance, to 
temporarily set this amendment aside, that other amendments may be 
taken up.
  I only want to put that in the total context. The Senator from 
Connecticut was here a few years ago when I chaired this committee and 
we had a humongous continuing resolution. We started at 10 a.m. one 
day, and I stood here until 2:30 the next afternoon, but we finished 
it. And I have now the backing of the Republican leader that we are 
going to stay here today and tomorrow, for however long, to finish this 
bill.
  We have been over 3 hours on this issue, and I think we have had 
aired an awful lot of the parts of this very complex issue. I would 
like to be able to temporarily lay it aside in order to get Senator 
Murray of Washington State into the next amendment in preparation for 
an amendment of the minority leader, Mr. Daschle, that deals with more 
precisely the details of this particular bill.
  So I am asking for this kind of cooperation. By the same token, I 
must add, I think if I get that opportunity for unanimous consent, I 
will ask for 3 minutes on Senator D'Amato's behalf to respond to these 
most recent comments made by the Senator from Connecticut and others on 
that side, and then get this set aside, if the Senator will yield for 
that purpose.
  Mr. DODD. Let me say to my colleague from Oregon, the chairman of the 
Appropriations Committee, I hold him in tremendously high regard. I 
have enjoyed immensely my association with him.
  I did not initiate this debate. I say to my distinguished colleague 
from Oregon, I was prepared to come over and address with a floor 
speech the rescission package.
  I have been put in this situation because our good friend from New 
York has raised this amendment on the Senator from Oregon's bill. It is 
not an insignificant matter. I wish it were. I would have no difficulty 
whatsoever.
  But I, as a Senator, have a responsibility on something that I think 
has tremendous implications if left in the present status and adopted, 
as I am fearful it is apt to be, in terms of what happens after that.
  Now the rescission package is important. It is critically important. 
If we adopt this amendment, and the implications occur, it dwarfs the 
implications of the rescission package.
  Mr. HATFIELD. I understand the Senator's position. I am not 
suggesting we dispose of this amendment at this moment.
  If we could set it aside temporarily, it means it comes back at a 
certain time, too, for final disposition. I am not suggesting to the 
Senator that we have final disposition at this moment.
  Give us a breather, is what I am asking, so that we can take up these 
other amendments. Because we are going to be here. We have probably 30, 
40 amendments. Again, I cannot be more forceful than to say we are 
going to stay here. And when it comes to be 1 a.m. tomorrow morning, 
everybody is going to be wondering why we are here.
  I am just saying that, this morning I made the comment and I am 
making it again at 2:20, no one has to question at 1:30 tomorrow 
morning, if we are here: Why are we here? We are here because we have 
been stalled on this particular amendment at this time.
  We have had time agreements on every other amendment we have had on 
this floor. We are going to be paying the price at 1:30 tomorrow 
morning. I merely want to make that clear.
  I am not asking the Senator to just to set this aside to dispose of 
it, but to set it aside temporarily. Maybe at 2 a.m. tomorrow morning 
we will dispose of it faster, if we are here.
  But I do say that we have to get on with the business. I am trying to 
now chair a conference committee with the House on the first 
appropriations bill. We are trying to manipulate our chairmen, who are 
meeting with their chairmen, back here on the floor to take care of 
these particular amendments. It is no easy task. But, nevertheless, we 
have to have the cooperation of all the Members of the body to dispose 
of the business.
  Mr. SIMON. Will my colleague from Connecticut yield?
  Mr. DODD. Yes.
  Mr. SIMON. I thank the Senator for yielding.
  In response to my friend from Oregon, before I would agree to 
unanimous consent to set it aside, I would like to speak for 10 
minutes.
  I would also suggest to my friend from Connecticut not to set it 
aside until we get word from the President. I think just setting this 
aside leaves it in limbo and is going to cause great problems in Mexico 
right now. I think we ought to get word from the President of the 
United States that if this in here, this is going to be vetoed. So that 
we can assure the markets in around the world that we are not about to 
destabilize the situation in Mexico through irresponsible action on the 
floor of the United States Senate.
  Mr. SARBANES. Will the Senator yield?
  Mr. DODD. I am glad to yield to the Senator.
  Mr. SARBANES. I think there is a great deal of force in what the 
chairman of the committee has just stated, and I obviously recognize 
that.
  I think it is very important to underscore a point made by my 
colleague from Connecticut. We did not bring this amendment here. I 
mean, this amendment has enormous consequences associated with it, as 
my good friend from Illinois has pointed out. It was not placed before 
the body by those of us who have been speaking now for----
  Mr. HATFIELD. Three hours and 15 minutes.
  Mr. SARBANES. No, no, no.
  Mr. HATFIELD. Since this amendment came to the floor.
  Mr. SARBANES. Yes. But we have been speaking for about an hour. We 
are very much on the down side of that time with respect to addressing 
this amendment.
  Mr. HATFIELD. Will the Senator agree to a time agreement?
  Mr. SARBANES. That is the point I wanted develop further, because the 
Senator is asking to set it aside. It seems clear to me, as I said 
earlier, this is the kind of proposal which, if it were here on its own 
as a bill reported from the committee, would be debated for a number of 
days, because its consequences are that momentous.
  The Senator from Connecticut is absolutely right when he said the 
bill, the rescission bill, is important, but its importance is dwarfed 
by the potential consequences of this measure.
  I think that needs to be understood. One way to make it 
understandable, of course, is, when we come to grips with a measure, to 
have the kind of debate that is required with an issue of this 
importance. Now that can happen now or it can happen later.
  I understand the concerns of the chairman of the committee, but I do 
not think there should be any laboring under some misapprehension that 
by setting it down the road you are somehow going to change the dynamic 
of the concern about the consequence of the amendment if it came at 
that time.
  Mr. HATFIELD. Will the Senator yield?
  Mr. SARBANES. And the 1 o'clock in the morning can be 1 o'clock, it 
can be 3 o'clock and so forth. This is a tremendously consequential 
amendment that is before us.
  Mr. HATFIELD. Will the Senator yield a moment?
  Mr. SARBANES. Yes.
  Mr. HATFIELD. I understand the Senator's position. Perhaps we could 
work out a matter whereby we set it aside and then let this 
minifilibuster, if that is what I hear being stated, continue on. I 
will remain and let it happen, say, from 12:01 a.m. tonight until 5:30 
a.m., or whatever hour tomorrow afternoon, and then we will come back 
and have a vote.
  Why keep everybody here on the floor of the Senate throughout the 
night while a few engage in a minifilibuster? That is all I am asking, 
to be considerate of our colleagues, and then move this bill on 
through.
  The PRESIDING OFFICER. The Senator from Connecticut has the floor.
   [[Page S4867]] Mr. DODD. Let me say to my colleague from Oregon, it 
is not lack of consideration on the part of the Senator from Maryland 
and myself. It a because of an amendment that has nothing do with the 
substance of the legislation brought to the floor by our wonderful 
colleague from Oregon.
  Mr. HATFIELD. If the Senator will yield, I have the assurance from 
the author of the amendment to temporarily lay it aside.
  So one can say, sure, it takes a joining of two groups or two 
adversaries to an issue to make a filibuster. He is willing to stop 
this matter and get on with the other business of this bill, and to 
return to it at whatever hour is necessary to return to it.
  I am only getting a resistance to cooperating with getting this bill 
underway and getting to other amendments before us from the speakers at 
the moment.
  Mr. SARBANES. If the Senator would yield.
  The PRESIDING OFFICER. Is the Senator yielding for a question?
  Mr. DODD. Yes.
  Mr. SARBANES. Yes, for a question.
  I listened carefully to the chairman of the Appropriations Committee. 
As I listened to him, my concern increased, it did not decrease, I have 
to say to my good friend from Oregon. If, in effect, what you are 
saying to me is, by setting it aside, we will then structure this thing 
so we will go back to it at 1 o'clock in the morning, or whatever time 
when we will not discombobulate all of our colleagues and inconvenience 
them. And then those who are supposedly engaged in a minifilibuster, 
which I would not view it as such--we did not offer this amendment. I 
think it is irresponsible that this amendment is before us. It is not 
related to this bill.
  Mr. HATFIELD. But, Senator, you have now joined the issue, so you are 
a part of this problem we face.
  Mr. SARBANES. That is right, we have joined the issue. But the 
irresponsibility of this situation rests upon the offerer of the 
amendment, not by those that are responding to the amendment. And I am 
not going to have that responsibility shifted in the course of this 
discussion.
  Mr. HATFIELD. It is not to shift that responsibility. Will you agree 
to some kind of a time to set this matter aside when we have one side, 
the author, willing to do so?
  Mr. SARBANES. Why does the author not withdraw the amendment? Why 
does the author not withdraw the amendment and the consideration of the 
rescission bill can proceed?
  Mr. HATFIELD. Because the author has a right to bring this up, as 
other amendments have been brought up that may not be relevant.
  Mr. SARBANES. Let him withdraw it. He can offer it later, if he 
chooses to do so.
  The PRESIDING OFFICER. The Senator from Connecticut has the floor.
  Does the Senator wish to yield for a question? He may ask unanimous 
consent to do that. But at the time, however, he has not yielded the 
floor.
  Mr. DODD. Mr. President, I will underscore the point made by our 
colleague from Maryland. This is a situation that the chairman finds 
himself in, and it is not one created at all. This is significant. I 
know that every chairman who brings every bill to the floor thinks that 
the matter they are handling is the single most important issue facing 
mankind. I have certainly been in that situation in a subcommittee 
capacity.
  With all due respect, I must say that this amendment before us now is 
of far greater importance, in many ways, than the rescission package, 
as important as that is. To relegate this debate to some wee hours of 
the morning when we may bring it up again--I appreciate the dynamic in 
order to try to move the process.
  There is a simple way in which this can be addressed. Withdraw this 
amendment and schedule time for this to be raised on the floor as a 
freestanding proposition. We can allocate a day or so to fully explore 
whether or not this body wants to undercut and absolutely destroy an 
economic proposal and package that has enjoyed wide-based support--
which can do significant economic damage to our country and to others. 
I do not think that is insignificant. That is the way to handle this, 
not to insist that those of us who have been put in a position of 
defending a proposal we think makes sense for our country and this 
hemisphere all of a sudden relegate our debate time to the wee hours of 
the day to satisfy amendments to a rescission bill that is of marginal 
importance by comparison.
  I hope that our colleague will say, look, I will withdraw that 
amendment now. The yeas and nays have not been asked for. It does not 
take unanimous consent. I could have asked for the yeas and nays 
earlier. We can get back to the rescission bill and the chairman will 
not have the problem.
  I am not going to give up the floor on this particular amendment with 
the idea that some time at 2, 3, or 4 o'clock in the morning we are 
going to have a debate around here on a critical matter that could face 
this country. I did not put you in this situation. That can be easily 
resolved by the author of the amendment withdrawing it and scheduling 
it for another time. That is the only way I see of resolving this.
  Mr. HATFIELD. If the Senator will yield, we are going to be 
finalizing this bill at, perhaps, the wee hours of the morning. I am 
not relegating this amendment to any particular time. I am saying we 
are going to finish this bill if it takes all night.
  All I am asking now is to temporarily lay it aside, and at any time 
after the next amendment is adopted, this is still the pending 
business, so it would return. We will have to get unanimous consent to 
set it aside again. So the Senator is not losing any kind of advantage 
or parliamentary position by yielding for this purpose and to 
temporarily lay it aside.
  Mr. DODD. I would be happy to yield to my colleague, if he wants to 
raise the question with the author of the amendment. I would like to 
know publicly whether or not my colleague from New York is willing to 
withdraw the amendment at this point.
  Mr. HATFIELD. I have found that under circumstances of this kind, if 
we can shift gears, shift the subject for a little while, an hour or 
two, that sometimes we cool down, in a way, in our devotion to the 
issue and we are more amenable to making some kind of an arrangement.
  I am asking for a timeout to try to talk to the parties and see if we 
can reach some kind of a solution. As long as we keep this rhetoric 
from both sides going, we dig ourselves into a deeper pit. I do not 
want to start saying at 3 o'clock in the morning we have finally 
exhausted ourselves and we are now going to sit down and talk about it. 
I would rather see us talk about how to resolve it now and set it aside 
in order to do that, so we can get the parties together. That is all I 
am asking.
  Mr. DODD. I thank my colleague. I say again, and it deserves 
repeating, that we are only in this situation because our colleague 
from New York raised this matter on a bill that has nothing to do with 
Mexico. The amendment has nothing to do with the rescission package. We 
can resolve it by withdrawing the amendment and then moving on to a 
lengthy discussion on the rescission package, given all of the 
amendments that are pending.
  The rhetoric has not been terribly heated. We disagree about this, 
but this has not been an acrimonious debate. There is a legitimate 
difference of opinion as to whether or not we ought to go forward with 
the economic stabilization approach that was broadly supported, 
ironically, by everybody around here. This was not done in the dark of 
night. This is a proposal that enjoyed the endorsement of the majority 
leader of the Senate and the Speaker of the House, who urged the 
President to step forward and do it. Now we are turning around and 
watching an effort to undo it 60 days later. So it is not 
insignificant. I make that point as forcefully as I possibly can.
  I do not desire to filibuster on this issue, but rather to have an 
important debate and discussion because of the implications of it. So 
it is not my desire here to take up time unnecessarily, but so that our 
colleagues fully understand the implications that if the D'Amato 
amendment is supported here and becomes the law--in fact, just the mere 
adoption of it, I think, will probably produce the kind of predictable 
results that I think it is important we have that full debate and 
discussion on. Maybe I am in a minority on that particular point of 
view. I feel very strongly that any savings we may get out of 
 [[Page S4868]] the rescission package could be absolutely wiped out, 
in effect, by the actions we take on this amendment. So in terms of the 
implications of the American taxpayer, this single debate, as short as 
this amendment is--a page and a half--it can have very profound 
implications on this.
  I am happy to possibly impose a quorum call here so we can have a 
minidiscussion, as my colleague has suggested, on the matter. But I 
must tell him in advance that I think postponing and delaying this for 
another 2, 3, 4, 5 hours--I am worried about what that itself does in 
terms of how markets are apt to react. I have such respect for my 
colleague from Oregon that I am more than willing to listen to his 
advice and thoughts on the matter.
  Unless others want to talk on the amendment, I am prepared to suggest 
the absence of a quorum. I see people standing, so I do not want to do 
that at this juncture. But I will when the remarks are completed on 
this matter and we can have an opportunity to talk about it.
  Mr. D'AMATO. Mr. President, I am going to keep my remarks, as I have 
indicated to the chairman, to a minimum. I am compelled to respond.
  No. 1, the question in terms of relevance. I think it is absolutely, 
totally relevant. Here we are talking about--as the Senator from 
Massachusetts raised--the issue of cutting programs for women, 
children, and others. And I am saying, what about the American 
taxpayers? What about the hard-working middle class? We are sending 
money to programs of dubious value, reclaiming tesobonos for 
speculators, for people who made investments, which does not seem to me 
to be the right way to go.
  As it relates to the question of $5 billion, I deliberately kept it 
that high. Let me tell you, in the history of this fund, never once has 
it gone over $550 million for any other country other than Mexico. Not 
Israel. Not Italy. Not Ireland. Let us bring in Greece and every ethnic 
community there is, including Russia. Not once. Mexico, one time, $1 
billion. Only Mexico. So we went to $5 billion. Now if we want to make 
it Mexico specifically, I have no problem with doing that. The 
principle is whether or not this is a delegation of our constitutional 
authority. That is what we are down to.
  I am more than willing to put the matter over. But in terms of 
relevance, I think it is very relevant. Here we are cutting 12, 14, 17 
billion dollars' worth of programs, and some of them arguably are good 
programs. Yet, we are shipping off at the same time, watching it take 
place--by the way, in several weeks, maybe another $5, $6, $7, $8 
billion will go down to Mexico. So I am saying, hey, fellows, let us 
look at this. Members of the Congress, let us look at this and see 
whether we want to continue the delegation of our authority in this 
matter.
  I yield the floor.
  Mr. SIMON. Mr. President, I rise in strong opposition to this 
amendment. We are dealing with economic dynamite here. And the very 
discussion has to be disquieting to a lot of people in the financial 
markets around the world. Senator Boxer made a very good point just a 
few minutes ago when she asked about the stability of the United 
States. People wonder, can we stay the course on things?
  It is no accident that just a few days ago, we saw the worst trade 
figures we have had for a long, long time. And those trade figures were 
caused, to a great extent, by the peso crisis in Mexico.
  Mexico has been a country where we have sold more goods than we have 
imported. The future of Mexico is tied in with the jobs.
  Senator D'Amato talks about working men and women in the United 
States. We want to protect those jobs and help Mexico protects those 
jobs.
  I will add a couple of other points, Mr. President. It is easy in 
this kind of climate to find scapegoats, when people are having a tough 
time making a living. What has happened in our society is happening in 
every society: As the demand for unskilled labor is going down, the 
demand for skilled labor goes up.
  As that happens and people lose their jobs, they look around: Whom 
can we blame? Part of it is translated, I regret to say, in terms of 
race in our society. There are people down on affirmative action, 
saying, ``We are losing our jobs because of African-Americans,'' or 
because of others. Mexico becomes an easy scapegoat for a lot of people 
who do not understand the realities.
  The drop in the dollar that we experienced here a few weeks ago, to 
the extent that Mexico was involved, is because of our debt and our 
deficit. Ordinarily, a $20 billion loan guarantee would not mean 
anything for a country with a $6 trillion economy. Mexico is not the 
primary problem.
  I will underscore a point that Senator Dodd made. This does not refer 
to Mexico. It says, ``We can't make loan guarantees except as 
authorized by an act of Congress.'' Say on November 1 of this year, we 
recess until January. Say on November 10, there is a crisis in the 
British pound sterling. The United States is frozen. The most powerful 
economic Nation in the world, which will have so much at stake, could 
not do a thing. That just does not make sense.
  Finally, I say to my colleagues, this is not the kind of an issue 
where we ought to be pandering to public opinion. There are issues in 
which all Members in politics pander to public opinion, but with this 
one we are dealing with something that really goes to the heart of the 
economic survival of this country and other countries.
  I urge my colleagues to look back to something that happened some 
years ago--Senator Byrd was here; I do not think Senator Hatfield was--
when General Marshall, in a Harvard commencement, announced the 
Marshall plan. Harry Truman was President of the United States. The 
first Gallup Poll that was taken after that showed 14 percent of the 
American public supported the Marshall plan. It was extremely 
unpopular.
  We look back on it now and boast about how we saved Western Europe 
from communism with the Marshall plan. It is something we can be proud 
of. But it took the U.S. Senators, who had the courage to do what was 
not temporarily popular, to do that.
  Particularly because Harry Truman at that point was dealing with a 
Republican Congress, it took Senator Arthur Vandenberg from Michigan to 
stand up and say this issue is more important than temporary public 
opinion or the Republican Party or winning a Presidential race.
  Arthur Vandenburg did the right thing. The country moved ahead. It is 
one of the great acts of our country in the history of our country.
  On an issue that is this volatile, we had better do the right thing 
and not ask ourselves what will the polls say back home. This is an 
amendment that ought to be resoundingly defeated.
  Mr. HATFIELD. 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. HATFIELD. 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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