[Congressional Record Volume 141, Number 135 (Friday, August 11, 1995)]
[Senate]
[Pages S12323-S12325]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  NOMINATION OF LAWRENCE H. SUMMERS, OF MASSACHUSETTS, TO BE A DEPUTY 
                       SECRETARY OF THE TREASURY

  The legislative clerk read the nomination of Lawrence H. Summers of 
Massachusetts to be Deputy Secretary of the Treasury.
  The PRESIDING OFFICER. There will now be 10 minutes of debate, 
equally divided, on the nomination.
  Who yields time?
  
[[Page S 12324]]

  Mr. MOYNIHAN. Mr. President, I thank the Chair.
  Mr. President, I rise in support of the nomination of Lawrence H. 
Summers to be Deputy Secretary of the Treasury. Dr. Summers is now 
Under Secretary and has been for more than 2 years. He has carried out 
complex and important negotiations in international finance and 
international trade.
  He was very instrumental in the recent World Trade Organization 
negotiations concerning financial services. He has a long and 
distinguished career for a person still relatively young. He was Vice 
President of the World Bank from 1991 to 1993.
  From 1983 until 1993 he was the Nathaniel Ropes Professor of 
Political Economy at Harvard and his credentials also include a stint 
as domestic policy economist at the Council of Economic Advisers 
serving President Reagan.
  There is so much else that might be said, but I believe it is well 
known. I yield back the balance of my time, noting that the Finance 
Committee voted this out by voice vote with three Senators asking to be 
recorded in the negative and 17 affirmed.
  I yield the floor.
  Mr. DOLE. Mr. President, I yield back the time.
  Mr. D'AMATO. Mr. President, I stand in opposition to the confirmation 
of Lawrence Summers to the Office of Deputy Secretary of the Treasury.
  It is fair to say that most people are aware of my strong feelings in 
opposition to the Mexican bailout. We should not be using $20 billion 
in American taxpayer money to bail out a mismanaged Mexican Government 
and global speculators, and it was wrong for the administration to 
bypass Congress. Mr. Summers is the chief architect of the 
administration's bailout of Mexico.
  Mr. President, several weeks ago I released a chronology as well as 
internal Treasury Department documents revealing that key 
administration officials, including Under Secretary Summers, were not 
candid and forthcoming about the true condition of Mexico's economy 
during 1994.
  These documents make clear that Mr. Summers knew about Mexico's 
deteriorating economic condition as early as February 1994. But Mr. 
Summers did not warn Congress or the American public. Instead, he and 
other key administration officials repeatedly painted a rosy public 
picture of the Mexican economy.
  Mr. Summers has had a distinguished career, and he is a decent man. 
But I have a difficult time reconciling the private and public 
statements by Mr. Summers and other top administration officials--who 
were advised by Mr. Summers--regarding Mexico during 1994.
  Let me cite a few highlights from my chronology.
  As early as February 15, 1994, an internal Treasury Department report 
warned that ``Mexico's balance of payments situation may be fragile 
because of its large dependence on portfolio investments which are 
potentially volatile.'' However, on February 17, 1994--2 days later--
Secretary Bentsen stated that Mexico ``has become an example for all of 
Latin America'' because of its economic policies.
  On March 24, 1994, Mr. Summers was informed that the Mexican 
Government ``is looking for some comforting Treasury words to soothe 
the press.'' Then, despite Mexico's falling international reserves and 
growing current account deficit, Secretary Bentsen issued a statement 
saying: ``We have every confidence that Mexico is on the right economic 
path.''
  On April 26, 1994, Mr. Summers sent Secretary Bentsen a memo stating: 
``Mexico's dependency on the financing of its large current account 
deficit from largely volatile foreign portfolio investments remains a 
serious problem.'' Once again, however, on that very same day Mr. 
Summers told CNBC that ``Mexico is fundamentally sound and has a 
fundamentally sound currency. We are very encouraged about the 
situation in Mexico.''
  Finally, on November 21, 1994--despite the administration's growing 
concerns about Mexico's economy--Mr. Summers informed Secretary Bentsen 
that ``the Mexicans would very much like for you to make a statement 
today.'' Mr. Summers informed the Secretary that he had worked out a 
statement with the Mexican Government which not only failed to disclose 
any of the administration's concerns, but instead hailed ``Mexico's 
strong economic fundamentals.'' Less than a month later, Mr. President, 
Mexico was forced to devalue its currency.
  Mr. President, I agree with A.M. Rosenthal of the New York Times, who 
wrote on April 4, 1995, in a column entitled ``Cover-Up Chronology'': 
``Real concern for Mexico would have meant public warnings from 
Washington as soon as trouble was discovered. Legitimate 
confidentiality does not include deceiving the world.''
  Mr. President, at his confirmation hearing before the Finance 
Committee, Mr. Summers conceded that mistakes had been made in the 
handling of the Mexican crisis. He admitted that he and other officials 
should have used more care in choosing the words for their public 
statements. He agreed to improve communications between Congress and 
the administration and endorsed my recommendation for private 
consultations with key congressional committees when future financial 
threats begin to emerge.
  Nevertheless, Mr. President, these admissions cannot erase the 
serious errors made by Mr. Summers in his handling of the Mexican 
economic crisis. Therefore, I must vote against his confirmation.
  Mr. PACKWOOD. Mr. President, Lawrence Summers has been nominated by 
President Clinton to be the Deputy Secretary of the Treasury. On July 
21, 1995, the Senate Finance Committee approved Larry Summers 
nomination on a voice vote. I am pleased that the Senate is able to 
consider Mr. Summers nomination today. Frank Newman, who is the current 
Deputy Secretary of the Treasury, is leaving at the end of this month. 
The Deputy Secretary's slot is a very important position and needs to 
be filled quickly.
  Larry Summers is a qualified individual who has held numerous 
important government and academic positions. Mr. Summers is currently 
the Treasury Under Secretary for International Affairs. Before coming 
to the Treasury Department he served as Vice President of the World 
Bank for 2 years--1991-93. Before that, Summers taught economics at 
Harvard University for over 10 years and also worked for almost a year 
for the Council of Economic Advisors during the Reagan Presidency.
  I am aware that some Members of the Senate have concern over Mr. 
Summers role during the Mexican currency crisis. While I understand 
their concern, I also believe that the President of the United States 
should be able to choose the key members of his administration if the 
nominee is qualified for the position. I believe that Larry Summers is 
qualified for the Deputy Secretary of the Treasury position. I support 
his nomination and urge the Senate to approve his nomination.
  Mr. ABRAHAM. Mr. President, I would like to explain briefly the 
reasons behind my vote against the nomination of Lawrence Summers to be 
Deputy Secretary of the Treasury. As I have stated before, I generally 
will oppose a nominee only if there are serious questions as to the 
nominee's character, activities, or credibility.
  In Mr. Summer's case, troubling questions of credibility persist. 
Specifically, Senator D'Amato's investigation of the Treasury 
Department's role in the collapse of the Mexican peso has yielded 
reason to suspect that Mr. Summers has not been entirely forthcoming 
about his actions with respect to the origins of that crisis. We still 
do not know, for example, the degree to which Mr. Summers encouraged 
the Mexican Government to devalue their peso as a means, albeit 
misguided, of reducing Mexico's trade deficit. Thus, given the serious 
questions that still exist as to Mr. Summer's advocacy of a fatal and 
plainly misguided policy for Mexico, I cannot support his nomination at 
this time.
  Mr. DOLE. I know many Members would like to relocate. This would be 
the last vote. We have not reached the agreement on the DOD 
authorization. We are not certain whether any other nominees will be 
cleared. There is no need holding Members here. It will not require 
votes. It will either agree or not agree.
  This will be the last vote until September 5 at 5 p.m.
  
[[Page S 12325]]

  Mr. PRYOR. Mr. President, may I ask a question of the distinguished 
majority leader?
  Are we going to do the judges today? Are they going to come before 
the Senate?
  Mr. DOLE. It is my hope that all the nominees--I am not certain about 
all the Ambassadors--but we will do all the nominees.
  It depends on whether we get an agreement on the DOD authorization 
bill. We are not there yet. We are working on it. There is no reason to 
hold Members here for votes. This will be the last vote.
  Mr. PRYOR. Mr. President, I thank the leader.
  The PRESIDING OFFICER. The question is, Will the Senate advise and 
consent to the nomination of Lawrence H. Summers, of Massachusetts, to 
be Deputy Secretary of the Treasury? On this question the yeas and nays 
have been ordered, and the clerk will call the roll.
  The legislative clerk called the roll.
  Mr. LOTT. I announce that the Senator from New Mexico [Mr. Domenici] 
is necessarily absent.
  Mr. FORD. I announce that the Senator from California [Mrs. Boxer], 
the Senator from Georgia [Mr. Nunn], and the Senator from Illinois [Mr. 
Simon] are necessarily absent.
  I also announce that the Senator from New Jersey [Mr. Bradley] is 
absent because of illness in the family.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 74, nays 21, as follows:

                      [Rollcall Vote No. 396 Ex.]

                                YEAS--74

     Akaka
     Ashcroft
     Baucus
     Bennett
     Biden
     Bingaman
     Bond
     Breaux
     Bryan
     Bumpers
     Byrd
     Chafee
     Coats
     Cochran
     Cohen
     Conrad
     Coverdell
     Daschle
     DeWine
     Dodd
     Dorgan
     Exon
     Feingold
     Feinstein
     Ford
     Frist
     Glenn
     Gorton
     Graham
     Gramm
     Grassley
     Gregg
     Harkin
     Hatch
     Hatfield
     Heflin
     Hutchison
     Inhofe
     Inouye
     Jeffords
     Johnston
     Kassebaum
     Kennedy
     Kerrey
     Kerry
     Kohl
     Lautenberg
     Leahy
     Lieberman
     Lugar
     Mack
     McCain
     Mikulski
     Moseley-Braun
     Moynihan
     Murray
     Nickles
     Packwood
     Pell
     Pryor
     Reid
     Robb
     Rockefeller
     Roth
     Santorum
     Sarbanes
     Shelby
     Simpson
     Snowe
     Specter
     Stevens
     Thompson
     Thurmond
     Wellstone

                                NAYS--21

     Abraham
     Brown
     Burns
     Campbell
     Craig
     D'Amato
     Dole
     Faircloth
     Grams
     Helms
     Hollings
     Kempthorne
     Kyl
     Levin
     Lott
     McConnell
     Murkowski
     Pressler
     Smith
     Thomas
     Warner

                             NOT VOTING--5

     Boxer
     Bradley
     Domenici
     Nunn
     Simon
  So the nomination was confirmed.
  Mr. MOYNIHAN. Mr. President, I move to reconsider the vote by which 
the nomination was confirmed.
  Mr. FORD. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. MOYNIHAN. Mr. President, I ask unanimous consent that the 
President be immediately notified of the Senate's action.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. MOYNIHAN. I thank the Chair.

                          ____________________