[Congressional Record Volume 141, Number 64 (Thursday, April 6, 1995)]
[House]
[Pages H4407-H4412]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


              ON THE EFFECTS OF THE CONTRACT WITH AMERICA

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 4, 1995, the gentleman from Vermont [Mr. Sanders] is recognized 
for 60 minutes as the designee of the minority leader.
  Mr. SANDERS. Mr. Speaker, let me begin by quoting from an article 
that appeared on the front page of the New York Times today and what 
the article does is analyzes a poll that was done by the New York Times 
and CBS News. Let me read, if I might, the second paragraph on the 
front page. It goes as follows:

       ``Despite the best efforts of the Republicans to publicize 
     and promote what they call their legislative revolution, the 
     survey,'' i.e., the poll that CBS and the New York Times did, 
     ``suggested that much of the public remains largely 
     disengaged. Only 38 percent said they had read or heard 
     anything about the Contract With America, the Republican 
     policy agenda that has driven the House in these first three 
     months. Forty-seven percent said they were `mostly 
     disappointed' with the first 100 days compared with 39 
     percent who said they were pleased, and Mr. Gingrich's 
     personal ratings remain remarkably negative.''

  What I find disturbing about the results of the poll is not really 
whether people cared about Mr. Gingrich or how much they liked or 
disliked the Contract With America, what I find absolutely incredible 
is that only 38 percent of the people contacted said they had read or 
heard anything about the Contract With America.
  Now, how can that be? Every single day on the front pages of 
newspapers there are discussions about the Contract With America. Turn 
on the television tonight, every news program will be discussing the 
Contract With America, and only 38 percent of the people had heard 
anything about the Contract With America. What is that about?
  It suggests to me a very serious problem in America. And that is, by 
the tens of millions of people, ordinary Americans are tuning out and 
not paying attention, ignoring the politics that goes on in this 
country. This phenomenon was certainly reflected in the November 8 
election that brought the Republicans power in both the House and the 
Senate. In that ``mandate,'' 38 percent of the American people voted; 
62 percent of the people did not vote at all.
  The question, therefore, is, what is going on with American 
democracy? And the deeper question that I think we must ask ourselves 
is, to what degree are we, in fact, today a democracy, when the vast 
majority of the people do not vote and when tens of millions of people 
are not aware of what is going on in our society and within our 
political system?
  Mr. Speaker, I would argue that perhaps, and I am not quite sure of 
the full reasons as to why so many people have given up on the 
political process. I do not really know why when Sweden holds an 
election, 90 percent of the people come out to vote. France is now in 
the middle of a major campaign. The guess is that over 70 percent of 
the people will vote there. And in Canada, our neighbor, over 70 
percent of the people vote. I cannot tell you why it is that so few 
people in America have faith in the political system and no longer 
participate, no longer vote, no longer care about what goes on here in 
Washington.
  Here every day people are yelling and screaming, but it does not mean 
much to the folks out there. I would argue that perhaps the major 
reason is that the average American today is hurting very, very badly. 
The average American family is in a lot of pain. We are becoming a 
poorer nation. Our standard of living
 is in decline. The gap between the rich and the poor is growing wider. 
Millions of Americans are fearful that their jobs are going to go to 
Mexico. They are going to go to China. Millions of Americans are 
working longer hours. They are afraid to stand up on the job and 
protect their rights and fight for their rights because they are going 
to get fired.

  And I think with people in pain they look to Washington, they turn on 
the television and they do not see the reality of their lives reflected 
in the debate that takes place here in Congress. They listen to 
corporate America on the media. They do not see that reality reflected. 
And they say, Hey, I am in trouble. I am in pain. My standard of living 
is going down. My kids are going to have a lower standard of living 
than I am. I cannot afford health care. My job is going to Mexico. Who 
is talking for me? Certainly not the politicians. Why should I pay any 
attention?
  Mr. DeFAZIO. Mr. Speaker, will the gentleman yield?
  Mr. SANDERS. I yield to the gentleman from Oregon.
  Mr. DeFAZIO. In response to that, I think that part of what breeds 
the disenfranchisement, the fact that people are turned off, is things 
like the bill that was passed here in the wee hours last night.
  Funny thing, when Mr. Gingrich had things in his contract and he 
wanted to trump it, we always stopped about the middle of the evening 
and then brought them up the next day so they could play it prime time. 
But two bills, term limits and now tax breaks, were voted on very, very 
late at night.
  They are very cynically named. This was a bill to provide middle 
income tax relief. The gentleman touched on this very well. The only 
group of people who are consistently paying higher taxes in 1995 than 
in 1980 are middle-income wage earners, small business owners and 
people who work for hourly wages or a salary. They are paying more, 
because Congress jacked up the FICA tax, Social Security, dramatically, 
a regressive flat tax which is capped at $64,000 a year of income, and 
also what has happened with bracket creep and other things.
  The wealthy, those who earn over 200,000 a year, they were yelling 
and screaming like stuck pigs over the Clinton budget which put them in 
the normal 39 percent tax bracket, which is down from the 70 percent 
tax bracket that they were in in 1979. And, of course, they only paid 
the 7 percent FICA tax on the first $60,000 of their earnings.
  But then what people see, they tune in. And some of them would have 
voted for the new majority who were disenchanted with what had happened 
to them. They saw their standard of living declined, and they asked for 
help and reached out for change and help. And they brought in a group 
of people who turned back the clock to the point 
[[Page H4408]] where there is not going to be middle-class tax relief 
from the bill that was passed last evening, but what there will be is 
tremendous court relief.
  They did not talk much about those parts of the bill on the floor. 
They talked about some of the smaller portions.
  Just the repeal of the corporate alternative minimum tax, your eyes 
glaze over when you hear that. But it is so significant.
  Mr. SANDERS. Let me jump in, if I might. Some Americans, Mr. Speaker, 
will remember, as I am sure my colleague from Oregon will remember, 
that in the early 1980s, after Reagan was elected president, there was 
an enormous scandal that many people were discussing in America.
  What they were discussing is that at the time when middle-income 
people were paying more and more in Federal, State and local taxes, lo 
and behold, as a result of a variety of loopholes, it appeared that 
some of the largest and most profitable corporations in America, 
primarily owned by the wealthiest people in America, were paying what 
in taxes, Mr. DeFazio?
  Mr. DeFAZIO. I brought the list, just so we could review a few. 1982 
to 1985, 42 major corporations paying zero or less.
  Mr. SANDERS. These must be small businesses with marginal profits, I 
would suspect. Is that the case?
  Mr. DeFAZIO. Sure. Let us start at the top. American Telephone and 
Telegraph, profit, $24,898,000,000 from 1982 to 1985 in profits. And 
guess how much they paid in taxes?
  Mr. SANDERS. Six billion dollars? I would guess that would be a 
fair----
  Mr. DeFAZIO. They had 24 billion in profits. Would you think, if they 
were working for wages, they would have paid even a little more than 6 
billion? They would have paid 28 percent? No, try one more time.
  Mr. SANDERS. Well, 4 billion maybe 4. Am I wrong again?
  Mr. DeFAZIO. A reasonable guess. But guess what? This is sort of a 
miracle. This is a miracle of supply side economics, which we brought 
back to America last night.
  They did not pay any taxes. In fact, they not only did not pay any 
taxes, with 26,898,000,000 in profits. Guess what? Working stiffs in 
this country gave them a $635.5 million tax credit. They did not pay 
any taxes, and they got a credit for the taxes they did not pay. So 
their tax rate was minus 2.6 percent. Not bad.
  Mr. SANDERS. We have been a little bit facetious about this. I think 
this deserves analysis and serious look.
  What we are talking about is some of the largest corporations in 
America, owned by the wealthiest people in America, making huge profits 
and paying less in taxes, zero, than the average working stiff who 
makes $20,000 or $30,000 a year.
  You mentioned AT&T. What other corporations were involved?
  Mr. DeFAZIO. Let me list a couple of others.
   This is serious. And we do not want to be facetious. I will jump 
down to, say, the middle of the list. Xerox Corporation, over that 
three-year period, $670,300,000 in profits. And they received a tax 
credit of $42.8 million. So their tax rate was minus 6.5 percent.

  Mr. SANDERS. That means----
  Mr. DeFAZIO. One more. Let us pick a high tech company, Tectronics--
they have not been doing so well lately but back then they did better--
$163,300,000 profits over three years, and they got a $13,800,000 tax 
rebate for a negative 8.5 percent rate of taxation.
  Just last night we repealed the law that did away with this scandal. 
That was part of the contract on America, to do away with the corporate 
alternative minimum tax. That means that an American who works in a 
factory job for 10 bucks an hour, if Mr. Gingrich's dream bill here 
goes through, the crown jewel, will pay absolutely, not in rates, but 
will pay absolutely more in taxes than some of these largest 
corporations in the world.
  Mr. SANDERS. Let us back up a little bit.
  What Mr. DeFazio is talking about is that in the early 1980s, if my 
memory is correct, a majority of the major corporations in America paid 
zero, not a penny in taxes, and, as Mr. DeFazio indicates, some of them 
actually got a credit. That is how absurd and corrupt the tax system 
was.
  Well, both the Democrats and the Republicans became a little bit 
embarassed by this scandalous situation where we have working people 
making $20- or $30,000 a year paying more in taxes than all of AT&T and 
General Electric and the other large corporations.
                              {time}  2030

  So what they passed in 1986 was called the minimum corporate tax. 
Basically, what that said, it said large multinational corporations 
with all of your fancy lawyers and your tax accountants and everybody 
else, after you go through all of the tax loopholes and after you avoid 
paying taxes on this, that and the other thing and you end up with 
zero, well, guess what, we think you should at least pay a minimal tax, 
a minimal tax. And that is what was passed in 1986, mandating the 
corporations at least paid something.
  What Mr. DeFazio is describing is that yesterday, as part of the 
Republican tax bill, that minimal corporate tax was repealed, and we 
are rapidly moving back to the time when the largest corporations in 
America will pay zero in taxes.
  Now, some people will say, well, so what? So what does it matter that 
AT&T and General Electric and duPont and all these corporations do not 
pay anything in taxes? What does it have to do with me?
  Mr. DeFazio, what does it have to do with the average working person?
  Mr. DeFazio. Well, if it gets as bad as it did in the 1980', working 
people will pay taxes in order to give tax credits to corporations that 
did not pay any taxes at all, which they then passed through to their 
shareholders who are also hiring the same accountants to avoid taxes 
and now will be allowed with the new 14-percent tax bracket for capital 
gains or 18 percent established by the Republican bill, will be able to 
pay a lower rate of taxes than someone earning $25,000 or $30,000 a 
year through the capital gains loophole.
  So what we are doing is asking people who are struggling to make ends 
meet, people who are struggling to figure out desperately some way to 
save a few bucks for their kids' education or just for their clothes 
are going to be asked to send money to the Federal Government so it can 
be handed back to large, profitable corporations so they can distribute 
it to shareholders who will not pay very much tax on it.
  Mr. SANDERS. What it also means, it seems to me, is that if the major 
corporations in America are paying nothing in taxes there will be less 
money available for Federal aid to education, Federal aid for 
environmental protection, Federal aid for the handicapped, Federal aid 
for Head Start, and so forth and so on. So, in essence, what will 
happen is the tax burden will be passed on back to the State and local 
level.
  Now, I do not know about Oregon. I am not familiar with Oregon's 
local tax situation. But in my State of Vermont we are highly dependent 
for education and municipal services on the property tax, which is an 
extremely regressive tax.
  To the degree that the Federal Government cuts back on Federal aid to 
education because corporations are not paying any taxes, who is going 
to make up the difference? In the State of Vermont it will be family 
farmers, it will be senior citizens, it will be working people who are 
not making a lot of money who will have to pay higher and higher 
property taxes, higher and higher State taxes because the AT&T's and 
the GE's primarily owned by wealthy people are not paying their fair 
share of taxes.
  Mr. DeFAZIO. If I can interject again. Another interesting historical 
note, in 1960 the corporations in America paid about 20 percent of the 
tax bill. This year, before the Republicans repealed the corporate 
alternative minimum tax, the corporations will pay about 10 percent of 
the tax bill in this country.
  So someone else has had to pick up the slack. And guess what? It is 
not the people who earn over $200,000 a year who just got also some 
very generous tax breaks last night; it is average working families.
  There was some move on the part of the Republican Party, and I have 
got to give credit to the 106 Republicans who signed a letter to the 
Speaker saying they could not go home with a 
[[Page H4409]] straight face and say they were providing middle-income 
tax relief when it went up to $200,000 a year, and they asked to take 
it down to $100,000 a year.
  Well, I cannot go home with a straight face to Oregon and talk about 
$100,000 as middle income, but if we were talking $30,000, $40,000 a 
year, that would be in the ball park. And those people are being asked 
to pick up the additional share of the burden or finding that the 
programs on which they depend, that is people who have incomes at that 
level and who are retired now, Medicare, are being cut back, seniors 
with even lower incomes, Medicaid is being cut back, younger people 
with kids who are growing up are finding that Pell grants and other 
things are going to be cut back, both in the rescission bill earlier 
passed in this House by Mr. Gingrich and in the budget which Mr. Kasich 
will put forward shortly.
  So not only are we asking the middle-income people to pay more, the 
few programs from which they and their families have been able to 
benefit and the few sorts of things they had to depend upon are being 
gutted. I mean, it is a very bitter reality.
  So I can understand why a lot of these people are turned off to 
politics and not voting. But I mean my solution is they should all get 
out and vote. Because the people who earned over $200,000 a year who 
got these very generous tax breaks last night probably voted at a rate 
of 90 percent, and the people in the $30,000 tax bracket who are going 
to end up picking up the tab probably voted at the rate of 37 percent.
  Mr. SANDERS. Let me jump in and just pick up on that point. Let's 
talk for a moment about something which, amazingly enough, I do not 
know how it happened, but the Contract With America just ignored or I 
missed it, it must have been by accident, and that is the role of money 
in politics and campaign finance reform.
  Now, I find it extremely interesting that within the last several 
months, and, by the way, as the only independent in the Congress I will 
say the same things about the Democratic Party here, but within the 
last couple of months after the Republican victory huge amounts of 
corporate money has been flowing into the Republican National 
Committee, campaign contributions.
  Several months ago, as you will recall, the Republicans had a 
fundraiser, and on one night, one night, they raised $11 million from 
some of the wealthiest people in America and large corporations.
  Furthermore, at about the same time, Speaker Gingrich attended a 
fundraiser in order to raise money for a conservative television 
network. And the deductions to that fundraiser, by the way, were tax 
deductible. Interestingly enough, that fundraiser cost a mere $50,000 a 
plate, $50,000 a plate. My understanding is that extra coffee was 
served free of charge, and that included gratuities. In fact, I would 
have loved to have been the waiter getting a 15 percent tip on that. 
But $50,000 a plate. Huge amount of money.
  Mr. DeFazio, it would seem to me that there is a direct correlation 
between this huge amount of corporate money and money from the wealthy 
flowing
 into the Republican party and what happened yesterday. Do you see that 
relationship?

  Mr. DeFAZIO. Well, not only what happened in the tax bill yesterday, 
certainly. More than 50 percent of the individual benefits in this tax 
bill will go to people earning over $100,000 a year. And, of course, 
the corporate benefits will not go to small businesses. They are going 
to go to these largest corporations, again those who are subject to the 
alternative minimum tax.
  I do not know any small businesses in my district who have to pay the 
alternative minimum tax, but the large corporations, multinational 
corporations certainly do. So that is one thing.
  But there was something else going on yesterday, and I don't want to 
get too far afield, but we were marking up over about a 30-hour period 
in the Committee on Transportation and Infrastructure a revision of the 
Clean Water Act, and I will say also that the corporate payoff was 
going on there, too. Because we saw amendment after amendment offered 
on the Republican side to remove restrictions from industry to allow 
direct discharge of toxics into the Great Lakes and other bodies of 
water in this country, to reduce the list of chemicals restricted from 
direct discharge into our drinking water from 70,000 to 5. That was an 
amendment.
  These amendments, I saw after the Great Lakes were removed from 
Federal control, the Great Lakes bordering some 10 States and a foreign 
nation have been removed from Federal control for toxic discharge 
because that was an undue burden. It has now become a voluntary 
program.
  I saw some paper company and other lobbyists hugging and jumping up 
and down outside. They had just won this tremendous victory. You can 
bet that they have been writing checks.
  Then we saw, one of the most outrageous things I have seen, I have 
been around a while, this is my ninth year in Congress, but I have 
never seen anything so blatant as what I saw a couple of weeks ago when 
a number of new Republican freshmen members were quoted as saying they 
are telling lobbyists if they did not contribute to their campaigns or 
contributed to their opponents, they had better make up for that. I 
mean, this is the most blatant squeezing of corporate America I have 
ever seen. It is unbelievable.
  Mr. SANDERS. Now, I have not witnessed this with my own eyes, but I 
have read and I have heard from other Members that the lobbyists 
themselves are now writing the legislation and giving it to Members to 
present. Have you heard that?
  Mr. DeFAZIO. Well, there were amendments in the Committee on 
Transportation and Infrastructure yesterday being presented which 
favored polluters over public interests which could not be 
satisfactorily explained by the Republicans offering them on the other 
side. And at one point I was tempted to say why don't we just bring the 
lobbyist up to the dais, they can at least explain it, and then we will 
go forward with the vote.
  You know, clean water. I mean, there were things like allowing 
industries to discharge whatever they wanted into municipal sewers and 
requiring the local taxpayers to pick up the tab. No more pretreatment 
requirements for toxics or extraordinarily difficult things that are 
difficult to deal with.
  I am not saying the Clean Water Act is perfect the way it is, but a 
reading by an impartial person of what went through that committee 
yesterday will say, whoa, are we going back to 1955 when the Cuyahoga 
River was flammable? Are we going back to the days in
 Oregon when the Willamette River was an open sewer?

  And the unfunded mandates, we offered an amendment to say that, you 
know, the bill should identify unfunded mandates because what this does 
substantially is move burdens from industry to public taxpayers and 
people who pay sewer bills and people who pay property taxes and bonds 
for municipal sewer systems.
  Of course, the Republicans would not let an unfunded mandate 
provision through that related to private interests. It is okay that 
these large corporations who are also contributing to the Republican 
party can now just dump their stuff in the river and then it is up to 
the people in the local city to try and clean it up.
  Mr. SANDERS. We have been trying to understand in this discussion not 
just the outrageous nature of the recent Republican tax plan in which 
half of the benefits go to people earning $100,000, 25 percent of the 
benefits go to those people earning $200,000 a year or more, where the 
largest, the wealthiest 1 percent of earners get more benefits than the 
bottom 60 percent.
  All of that is important, but it takes place within the context and I 
think helps us understand why so many people out there shrug their 
shoulders and say why should I vote, why should I participate. It does 
not really matter, the game is rigged, the people who have the money 
call the shots. Nobody cares about me. I am just a plain working 
person.
  Mr. DeFAZIO. If I could interject a story at that point. I, in my 
first term went to stand with some men and women who were on strike at 
a lumber mill in my district. I stood there with them and caused some 
disruption and dismay by the management and ownership of this very 
large company, and I was asked by a reporter how can you do 
[[Page H4410]] this? You are dealing with one of the most powerful 
corporations in America, privately held, one of the 500 richest men in 
America.
  I said, you know, on election day he gets one vote and all these 
people get one vote each, and that is the thing. People have to come 
back to the ballot box. They do not have to be a Democrat or a 
Republican. They can be an Independent, I mean nonaffiliated. They can 
form a third party. It does not matter. This country is not going to be 
healed until we get turnouts in the 70s, 80s, 90s. I do not think I 
will ever live to see the day when we get close to 100 percent.
  Mr. SANDERS. We should ask ourselves why it is in the Scandinavian 
countries, many of the European countries turnouts are 70, 80, 90 
percent; and we just had an election in which 38 percent of the people 
came out to vote. That turnout is directly related to what we have been 
talking about in terms of huge tax breaks for large corporations and 
wealthy people and cutbacks that will be coming in Medicaid, Medicare, 
student loans for those young people who today are having a hard time 
getting into college, WIC, Head Start, you name it. Every program that 
every working person, elderly person and kid in this country needs is 
on the chopping block.
  What is going on, and Mr. DeFazio stated it well, if you have only 38 
percent of the people who are voting and if the vast majority of low 
income and working people do not vote, those people are invisible.
                              {time}  2045

  You don't have any health insurance, so what? Who cares? Your pain is 
not reflected on the floor of this House.
  You can't afford to send your kid to college? So what? No one is 
going to pay attention to you unless you make your concerns known by 
getting involved politically.
  What goes on is that the vast majority of poor people and working 
people don't vote. Therefore, they are politically invisible. But there 
are some people who understand the political system very well. It is 
not just that the upper income people vote in very high percentages, 
but they contribute huge amounts of money to political campaigns. If a 
corporation like Amway or some other large corporation contributes 
hundreds and hundreds of thousands of dollars to the Republican Party, 
don't you think that maybe the leadership of the Republican Party is 
going to sit down and listen to their concerns? If wealthy people 
contribute thousands and thousands of dollars to the party of their 
choice, they have enormous power in shaping the agenda.
  The gentleman from Oregon [Mr. DeFazio] was suggesting that on his 
subcommittee, lobbyists paid a major role in writing the legislation. 
That is what is going on. The only way to change that situation is when 
working people and low-income people say, ``Wait a minute. This country 
belongs to all of us, not just the wealthy and the powerful.'' One 
person-one vote. It is not how much you contribute. It is not a $10,000 
contribution gives me power. That is not what it is supposed to be 
about. One person-one vote.
  I absolutely agree with the gentleman from Oregon [Mr. DeFazio] that 
we are not going to change the priorities and the agenda of the 
Congress so that it begins to pay attention to ordinary Americans, 
working people, unless we make radical changes in who participates, who 
votes.
  If you are not happy with what is going on, you can ignore everything 
and not vote. The people who own America are delighted. That is exactly 
what they want. They want you to think that politics is a joke, that it 
is irrelevant. They don't think it is irrelevant. They contribute huge 
amounts of money. They help determine the agenda. So if you want to 
have some input, you have got to participate politically, you have got 
to vote, you have got to get involved.
  Mr. DeFAZIO. If the gentleman would yield, I am going to have to 
leave shortly, I would just like to change the subject for a moment but 
it bears on the whole discussion, again, why people are so cynical 
about what is going on in Washington. It goes to the subject that we 
have spent some time on, on the floor earlier this year, which is the 
bailout of Mexico.
  There is an article, a very interesting article from yesterday's Los 
Angeles Times. It says it more succinctly than I could.
  Thus far, the United States has put up $20 billion of our taxpayer 
dollars through a rather secretive fund controlled by the Federal 
Reserve and the Treasury and Mexico has spent slightly more than $4 
billion of the funds. There is some discussion, we heard certainly from 
Speaker Gingrich and Majority Leader Dole in the Senate who were avid 
supporters of the Mexico bailout who are not trying to sort of cover 
that up, but they were there, they signed on with the administration, 
the President and Robert Rubin. They were all together. This is again 
why people are cynical because they saw a Democratic President and a 
newly elected House Speaker and a newly elected majority leader, both 
Republicans, in the House and the Senate signing on to the same $40 
billion bailout of Mexico.
  Here is what the Los Angeles Times says about the first $4 billion of 
our money that has gone to this bailout:

       Much of the money never left New York. It was paid out by 
     the Federal Reserve in New York, where it was used to redeem 
     the high profit bonds held primarily by major U.S. 
     institutions, Wall Street speculators, and wealthy Mexicans 
     who bought the securities largely through non-taxable 
     offshore corporations according to investment sources and 
     market analysts.

  So here it is. We are supposedly saving our neighbors to the south in 
a gesture of good will and the money changes hands from our tax 
deposits with the Treasury and the Federal Reserve in New York directly 
into the bank vaults of the speculators and the wealthy investment 
banks in New York City. This kind of outrage is again part of what 
brings people to cynicism. At the same time as that is going on, we see 
in yesterday's Washington Post a little headline saying power to boost 
dollar doubted. Dollar hits a
 record low 3 days in row against the Japanese yen. We are basically 
heading to one dollar and one yen the way we are going here and the 
United States cannot do anything about it.

  Why? In great part because we are too involved in attempting to prop 
up the failing government of Mexico and the crashing peso and as soon 
as we became associated dollar with peso like a Eurocurrency, the 
dollar started plummeting. This is a good part of the problem.
  Mr. SANDERS. If the gentleman will yield, I am very glad he raised 
this issue because that in fact is the issue I wanted to get to next. 
When we talk about why people are cynical about the political process, 
the gentleman is absolutely right in suggesting that this multi, 
multibillion-dollar bailout of Mexico is precisely the reason why 
people shrug their shoulders and they say, ``Government doesn't 
represent me.''
  Let's start off with a couple of facts. You made the right point. Who 
is supporting the bailout? We have presumably 2 political parties, 
right? And theoretically they are supposed to be really different, big 
basic philosophical differences.
  Well, you have President Clinton and some of the leadership of the 
Democratic Party are supporting the bailout. One would therefore expect 
that the opposition in terms of the Republican Party would obviously be 
strongly opposed, right? That is what one might expect. But lo and 
behold, surprise of all surprises, there is the gentleman from Georgia 
[Mr. Gingrich] and the leadership of the Republican Party supporting 
the bailout. The truth of the matter is there are a number of people in 
the Democratic party, the gentleman from Oregon [Mr. DeFazio], the 
gentlewoman from Ohio [Ms. Kaptur], some of the leaders there, a number 
of people in the Republican Party, the gentleman from Texas [Mr. 
Stockman], the gentleman from California [Mr. Rohrabacher], and others 
in strong opposition as well.
  When we talk about cynicism, this really gets to me. We are talking 
about a bailout which puts at risk the possibility of losing over $20 
billion of American taxpayers' money at the same time as we have a $200 
billion deficit and at the same time we are cutting back on a wide 
variety of programs for the most vulnerable people in this country.
  I ask the gentleman from Oregon [Mr. DeFazio], help me out, what was 
the vote on the floor of the House after that vigorous debate on this 
bailout? 
[[Page H4411]] Do you recall what the vote was after we discussed that 
issue thoroughly on the House?
  Mr. DeFAZIO. We attempted to bring a privileged resolution to the 
floor of the House about 2 months ago on this issue, the secretive 
rendering of funds from the Federal Reserve and from the Treasury 
accounts that are supposed to be there to prop up the dollar, and 
obviously they are not there to prop up the dollar anymore. My 
recollection is we were able to get 14 Republican votes who were all 
threatened with punishment the next day if they ever would vote that 
way again, and obviously we got more votes on the Democratic side. I do 
not recall the total number.
  Mr. SANDERS. I was being a little facetious. There has never been a 
vote of course on the floor of the House.
  Mr. DeFAZIO. That was on an extraordinary attempt to bring the issue 
to the floor.
  Mr. SANDERS. Right.
  Mr. DeFAZIO. No, we have not been allowed to directly bring the issue 
to the floor, although there was some language attached to today's 
Department of Defense conference report.
  Mr. SANDERS. In other words, the point is that with over $20 billion 
of taxpayers' money at risk, Speaker Gingrich and the Republican 
leadership in conjunction with a number of Democrats are prepared not 
to allow that debate on the floor of the House, not to allow that vote.
  Mr. DeFAZIO. The gentleman is on the Banking Committee. Has there 
been a vote in the Banking Committee on this issue?
  Mr. SANDERS. There certainly has not. I have introduced legislation 
which would not allow any more funding from the Exchange Stabilization 
Fund to go to the bailout of Mexico without the appropriation and the 
authority of a vote from the Congress. But we have not been able to get 
that legislation on the floor of the House.
  When we talk about cynicism, let's talk a little bit about Mexico, 
let's talk a little bit about NAFTA, and I know that my friend from 
Oregon has introduced legislation to repeal NAFTA.
  What really gets to me is that a year and a half ago when there was a 
vigorous debate on the floor of the House, we had the Clinton 
administration fighting terribly hard for the NAFTA agreement, we had 
the leadership of the Republican Party fighting very, very hard for the 
NAFTA agreement, we had virtually every multinational corporation in 
America telling us just what a wonderful thing NAFTA would be for 
American workers and Mexican workers. We had the corporate media, 
every, underlined, every major newspaper in the America editorialized 
in favor of NAFTA. That is the Wall Street Journal, the New York Times, 
the Boston Globe, the L.A. Times, you name it. All of the establishment 
and the money interests said, ``Boy, NAFTA is just what we need.''
  I ask the gentleman from Oregon [Mr. DeFazio] why he introduced 
legislation to repeal NAFTA. Has it not been quite the success that 
these corporate giants and pundits told us it would be?
  Mr. DeFAZIO. It is kind of extraordinary, actually. What we are doing 
now with the Mexico bailout is we are paying billions of dollars to 
speculators to attempt to prop up the Mexico peso and the Mexican 
economy because we are linked to them through the NAFTA agreement. We 
are losing jobs to Mexico, where wages and the standard of living have 
been reduced by 35 percent because of the devaluation of the peso.
  The situation is the workers of Mexico, everyone outside of Mexico's 
24 billionaires and a few hundred millionaires, have seen their 
standard of living go down by 35 percent in direct relation to NAFTA. 
Thousands at this point, over 20,000 American workers have been 
approved for unemployment benefits because their job loss was linked 
directly to the movement of their plant to Mexico.
  We ran in January the first trade deficit with Mexico in 12 years, 
$863 million, 1-month trade deficit with Mexico, and it is predicted by 
next year we will run a $20 billion trade deficit with Mexico, which 
means, according to the Commerce Department, for every billion dollars 
of net on our trade balance, we create 20,000 jobs in America.
  So if we run a $20 billion trade deficit with Mexico, we are ceding 
$400,000 to Mexico and we are paying $40 billion to do it. Absurdity on 
absurdity on mistake.
  Mr. SANDERS. If the gentleman will yield, a year and a half ago we 
were told by every major corporate newspaper in America that NAFTA was 
a good deal. The multinational corporations put big ads in the 
newspapers saying, NAFTA is a good deal. Working people and their 
unions fought back against NAFTA. Environmentalists understood the 
terrible environmental impact that NAFTA would have. Consumer groups 
fought against NAFTA. But we could not defeat the enormous amount of 
power and money that was arrayed against us.
  Since NAFTA has gone into effect, the figures that I have seen 
indicate that we have lost some 50,000 American jobs.
  As the gentleman from Oregon [Mr. DeFazio] just indicated, at a time 
that historically we have always had a trade surplus with Mexico, we 
have a terrible trade deficit internationally, but we have always had a 
surplus with Mexico, for the first time now, we are running a 
significant trade deficit.
  The gentleman is right, in January the deficit was $800 million in 1 
month, and it is predicted that the trade deficit will mushroom and 
grow. The standard of living of Mexican workers is plummeting with the 
devaluation of the peso.
  And now, atop of all of that, American workers who have lost their 
jobs because of NAFTA are being asked to bail out American speculators 
and billionaires in Mexico because the peso was devalued and the L.A. 
Times appropriately I think correctly indicates that most of our 
bailout money is going back to Wall Street and to wealthy Mexicans.
                              {time}  2100

  Mr. SANDERS. Now, on top of all of that, if that is not enough for 
you, during the debate over NAFTA, some of us were concerned that we 
were merging our economies with an authoritarian and corrupt 
government.
  Mr. DeFazio,Dmaybe you want to share with the public, and I have some 
of the information here, what has recently taken place in Mexico that I 
have a feeling some people may have known before the NAFTA debate. What 
about Mr. Salinas' brother? Where is that gentleman sitting right now? 
Former President Salinas' brother is now in jail.
  Mr. DeFAZIO. He is in jail, that is right.
  Mr. SANDERS. Now, this gentleman, Mr. Salinas, was President of that 
country. His brother is in jail under arrest for masterminding a 
political assassination. Furthermore, the former Deputy Attorney 
General of their country who had the responsibility for cracking down 
on the very serious drug problem in Mexico and the exporting of drugs 
from Mexico to the United States. Surprise, surprise. Where is that 
Deputy Attorney General today, who was their drug czar? My goodness, he 
is also in jail. He is in jail under charge that he has taken millions 
and millions of dollars from the Mexican drug cartel.
  Mr. DeFAZIO. Do not forget that, of course, President Salinas said 
his brother was innocent and went back and staged I think it was a 12-
hour hunger strike and then fled the country for the United States he 
was so convinced of his brother's innocence. He is of course somewhere 
at large in the United States living off of his Swiss back accounts and 
his investments in New York City and his many residences there.
  Mr. SANDERS. So at a time when we continue to have a large deficit, 
when the government is cutting back in my State, in your State, Oregon, 
cold weather up there, not as cold as Vermont but it gets cold. We are 
talking about in the House cutting back and completely eliminating the 
fuel assistance program by which 5 million low income people get help 
in the wintertime to heat their homes, including 2 million senior 
citizens. We cannot afford to do that.
  We are cutting back on student loans and grants upon which millions 
of working class kids depend in order to get their college education. 
We are cutting back on the WIC program, wonderful program for pregnant 
women, low income children. We are cutting back, now the debate will 
begin on the new 
[[Page H4412]] budget, major cutbacks in medicare, major cutbacks in 
medicaid. There are those who seriously want to dismantle the social 
security system. We just don't have enough money for all of that, but 
lo and behold, isn't it amazing, just amazing that we have $20 billion 
to put at risk bailing out another country, in this case Mexico. Much 
of that money will accrue and go back to investors who originally made 
a whole lot of money in Mexico lost money and now they want Uncle Same 
to bail them out.
  Mr. DeFAZIO. According to the Los Angeles Times, many of those folks 
are high stakes American investors who had invested the money through 
nontaxable offshore corporations, so we cannot even say that they have 
made a gain or they are going to recoup their funds and pay taxes on 
it. These are Americans who are not paying taxes on 50 percent interest 
earnings on failed Mexican bonds which have been propped up by working 
people's tax dollars, which brings up one other outrageous thing that 
went on this week. The issue of the billionaires, people amassing huge 
fortunes in the United States which if they were to dispose of it they 
would have to pay a capital gains tax on, 28 percent, that is about 
what your average working person pays or, under the new Republican 
proposal, 19 percent.
  But in any case, a number of those people, and again this is a 
collusion between the Republicans and Democrats, unfortunately, from my 
own party between the administration. The Treasury has a list of how 
many of these billionaires and cente-millionaires have in the last year 
renounced their United States citizenship which means that they can 
expatriate all of their holdings and profits to Ireland or Costa Rica 
and not pay any United States taxes.
  On the floor of the House we attempted several times to pass a simple 
piece of legislation that would have said before these people can 
expatriate the money, since they enjoyed the fruits of American 
citizenship, since they made that money as American citizens, since 
they made that money by employing Americans and selling things to 
Americans in this country, that they should pay a fair rate of taxes, 
at least the capital gains rate of 28 percent, before they expatriated 
and before they renounced their American citizenship. Amazingly, 
somehow the
 Republican party stood up and defended that practice.

  It is alleged two former members of Congress have been hired by an 
investment firm out of New York to lobby this issue. How is it that you 
cannot get 435 people elected to represent citizens of the United 
States of America and the interests of the citizens of the United 
States of America to vote to say that people who want to renounce their 
citizenship, traitors to the United States of America, should not pay 
some minimum tax before they expatriate the hundreds of millions or 
billions they made operating businesses in this country? That was one 
of the most outrageous and one of the lowest points, there are many low 
points in the first hundred days, but that has to be the lowest because 
that kind of goes to the heart of everything.
  Who do we really work for here? Do we work for the American people? 
Apparently a majority, since we were voted down by a large majority of 
Republicans and a few Democrats several times on this issue feel that 
multi-millionaires and billionaires no matter what their citizenship 
have a stronger call on their vote than the people who elected them. I 
think if people who elected the new majority knew about that vote they 
would be outraged.
  Mr. SANDERS. We are running out of time and I just want to conclude 
by saying this. This is a great country and we are great people, but I 
think as Mr. DeFazio just demonstrated, time after time what ends up 
happening in Congress is that the decisions that are made here are not 
made in the best interests of ordinary Americans. They are made in the 
best interests of the wealthy and the powerful, very often the same 
people who contribute heavily to the political parties, who hire 
lobbyists and lawyers to get things done for those people.
  In this country, we can, if we put our minds to it and we work 
together, develop a new trade policy which stops corporate America from 
taking our jobs to Third World countries. We can have those 
corporations reinvest in America and create decent paying jobs for our 
people. That is not utopian.
  In this country, we can raise the minimum wage. We do not need to 
continue a minimum wage of $4.25 an hour in which people work long, 
hard hours and they end up deeper in poverty. We can raise the minimum 
wage to $5.50 an hour. We have legislation in to do that.
  In this country, if you had a Congress that represented ordinary 
people rather than the big money interests, we could joint he rest of 
the industrialized world and pass a national health care system that 
guarantees health care to all people. We do not need to continue the 
most expensive, wasteful bureaucratic system in the world in which 40 
million Americans today have no health insurance.
  We can do better. we can have a tax system which is fair, which asks 
those people who have the money to pay their fair share of taxes so we 
can lower taxes for middle income and working people.
  We can put more money into education so that we do not have so many 
of our kids dropping out of high school and have a situation where so 
many of our kids cannot afford to go to college. Throughout Europe, in 
Canada, in Scandinavia, their governments put more money into higher 
education, enabling their working people to be better able to send 
their kids to college.
  Those things are not magical. They are not utopian. They can happen, 
but they will not happen until the American people wake up and reclaim 
this government from the millionaires and the billionaires who today 
control it.
  Mr. DeFAZIO. In conclusion, I could say we can do all those things 
and, in my opinion, with the proper priorities, we can balance the 
Federal budget.
  Mr. SANDERS. I would certainly agree. Let me conclude by thanking my 
friend, Mr. DeFazio from Oregon, for joining me.
  I think we depart by saying to the American people, please stand up, 
fight back and take back your country.


                          ____________________