[Congressional Record Volume 141, Number 162 (Thursday, October 19, 1995)]
[Senate]
[Page S15358]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  SENATE RESOLUTION 185--TO EXPRESS THE SENSE OF THE SENATE REGARDING 
                      REPAYMENT OF LOANS TO MEXICO

  Mr. FAIRCLOTH submitted the following resolution; which was referred 
to the Committee on Foreign Relations:

                              S. Res. 185

       Whereas the United States has provided Mexico with 
     approximately $12,500,000,000 in loans to Mexico;
       Whereas these loans were not authorized by the United 
     States Congress;
       Whereas the taxpayers of the United States should not be 
     responsible for any losses incurred from these loans; and
       Whereas certain loans to Mexico will become due and payable 
     on October 30, 1995: Now, therefore, be it
       Resolved, That, it is the sense of the Senate that no 
     further loans should be made to Mexico without specific 
     authorization from the United States Congress, and that, all 
     loans made to Mexico should be repaid in full and on time, 
     and that such debts should not be extended, rescheduled, or 
     reduced in any manner.

  Mr. FAIRCLOTH. Mr. President, today I am submitting a sense of the 
Senate regarding Mexico.
  From day 1, I have been opposed to the Mexican bailout. It was never 
the sole responsibility of the United States to help Mexico pay its 
debtors.
  These economic problems were of Mexico's own making, driven by 
politics, corruption, and poor economic policy.
  Nevertheless, the President, without the approval of the Congress, 
went ahead and loaned $12.5 billion to Mexico.
  This was a terrible mistake. We cannot continue to be the world's 
banker. We cannot continue to loan money to countries that have no 
intention of repaying it.
  I might add that the Clinton administration has proposed the creation 
of an international bailout fund to deal with future problems like 
Mexico. I cannot think of a worse idea. Once the Congress establishes a 
fund--any fund--it will be used. Has money ever been appropriated by 
the Congress and not used? The answer is no. That is why I have 
introduced a bill, S. 1222, to stop the creation of this new 
international bailout fund.
  Mr. President, returning to the Mexico issue, I would suggest that 
the first priority of this Congress and administration should be 
getting our own economic house in order before we can afford to engage 
in international bailouts, like Mexico.
  This means getting Federal spending under control. I have to wonder 
if we keep putting ourselves deeper and deeper in debt--who will bail 
us out.
  Mr. President, I firmly believe that the loans to Mexico will never 
be repaid. The American taxpayer will bear the burden of the Mexico 
bailout.
  I think this is very wrong--and I intended to do everything I can to 
stop it--starting today.
  Mr. President, last week, Mexico repaid $700 million of the nearly 
$12.5 billion in loans that they owe to the United States. This was a 
great public relations move for Mexico--but for those that read between 
the headlines there was something very troubling.
  Mexico owes the United States $2 billion on October 30, 1995. Mexico 
was making payment of $700 million towards that loan.
  Instead of paying that loan off in full, however, Mexico apparently 
intends to have the balance of what is owed by October 30--$1.3 
billion--rolled over past that deadline.
  This short term swap of $2 billion was extended to Mexico on February 
2, 1995. It came due in May, but was rolled over in May for 90 days. It 
was rolled over in August for another 90 days. Now, its falling due 
again for a third time.
  I think it is time that Mexico pays up--and on time.
  Mr. President, for this reason, I am introducing a sense of the 
Senate that loans to Mexico be paid on time and in full.
  The principle needs to be established early on in this relationship 
that these loans should be repaid in full and repaid on time.
  If not, these so called loans will quickly become foreign aid. The 
Congress did not vote for foreign aid. The American taxpayer cannot 
afford more foreign aid. And the loans to Mexico shouldn't become 
foreign aid.
  Further, if Mexico can't make this small repayment in full and on 
time--only $2 billion of the $12.5 billion--how will it ever repay the 
remaining balance.
  The bulk of the United States loans to Mexico don't come due until 
1997. They won't be fully repaid until the year 2000. But if Mexico 
can't repay its short term loans on time--then I do not have any hope 
that the loans coming due in 1997 through 2000 will ever be repaid.
  Mr. President, in conclusion, Mexico made a great public relations 
move by repaying some of its loans last week. But the real story may be 
that they will never pay anymore. The real test will come shortly, by 
October 30 when Mexico should pay the United States $1.3 billion.
  We need to be firm. We need to stand our ground now. Mexico must pay 
the United States back. This is what this sense of the Senate calls 
for.

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