[Congressional Record Volume 141, Number 177 (Thursday, November 9, 1995)]
[Senate]
[Pages S16844-S16845]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      THE PESO CONTINUES TO SLIDE

  Mr. MURKOWSKI. Mr. President, I also want to add and take a brief 
moment to make a statement in regard to the peso, which continues to 
slide rather dramatically today. I would like to bring to the attention 
of this body that the economic crisis continues in Mexico. As we 
recalled yesterday, the Mexican peso fell to a record low against the 
dollar--7.8 pesos to the dollar. That peso evaluation is even lower 
than last January and February when the administration told us that the 
Mexican economy was in crisis and the American taxpayer had to bail out 
Mexico. There was a good deal of debate in this body at that time.
  One of the reasons that Mexico's economy is in such deep trouble is 
the Government's PACTO with labor, agriculture, and business leaders. 
The Bank of Mexico announced some 2 weeks ago it will raise its minimum 
wages 10 percent by December and another 10 percent in April 1996. It 
will raise the price of gasoline, diesel fuel, electricity by 7 percent 
in December and another 6 percent next April. And there will be 
increases of 1.2 percent in all other months.
  Think about that. These price increases follow the 35-percent oil 
price increase and 20 percent electricity price increase set last 
March. Investors Business Daily called the PACTO ``centralized economic 
planning at its worst--more reminiscent of Soviet style 5 year plans 
than of the free market.'' Still, Treasury Secretary Rubin said that 
``structural reform continues to improve the long-term prospects for 
the--Mexican--economy, attracting both domestic and foreign 
investment.''
  Well, I suggest, Mr. President, that the Secretary of the Treasury 
has it all wrong. The Mexican economy is in a free-fall. Just this 
Thursday interest rates on 28-day Treasury bills soared to 54 percent. 
Inflation is currently running at 40 percent.
  Mr. President, this administration earlier this year told the 
Congress that by the second half of 1995 Mexico's economy would 
stabilize, it would stabilize only if we bailed out the speculators 
with American taxpayer dollars. The only thing that has happened is 
that the speculators in tesobonos have all been paid off 100 cents on 
the dollar, courtesy of the United States taxpayer, and the Mexican 
economy today is in shambles.
  The $20 billion bailout and the economic conditions we forced on 
Mexico have produced, in the opinion of this Senator from Alaska, an 
economic disaster. I doubt that we will see Mexico pay back the 
American taxpayer. I fear that the economic austerity that we have 
forced on Mexico will lead to a political disaster south of the border.
  I hope that prediction is not true. But I think it is time to go back 
and reassess--reassess, Mr. President--what we did earlier this year in 
bailing out those investors in tesobonos, most 

[[Page S 16845]]
of which were sophisticated U.S. investors. The American taxpayers 
bailed them out. Here today we are seeing that that effort to try to 
stabilize the Mexican Government apparently has failed.
  Mr. President, I have concluded my remarks. I wish the President a 
good day, and I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. GRAHAM. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GRAHAM. Mr. President, pursuant to a previous order, I believe I 
have 20 minutes during morning business.
  The PRESIDING OFFICER. The Senator is correct.

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