[Congressional Record Volume 142, Number 54 (Wednesday, April 24, 1996)]
[House]
[Pages H3810-H3817]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
ON THE BUDGET
The SPEAKER pro tempore (Mr. Lucas of Oklahoma). Under the Speaker's
announced policy of May 12, 1995, the gentleman from New York [Mr.
Owens] is recognized for 60 minutes as the designee of the minority
leader.
Mr. OWENS. Mr. Speaker, I am sorry that the gentlemen of the Budget
and the Appropriations Committees ended so abruptly. I was about to ask
a few questions and have them address those questions. They are still
in the Chamber so I will go ahead and ask the questions. Maybe they
will give me the answers later.
In the process of revamping the budget, do they realize that--they
realize above all that money comes into Washington and then flows out.
Why does Louisiana, why does Louisiana get so much more money from the
Federal Government than it pays into the Federal Government? The
gentleman who heads the Committee on Appropriations is from the State
of Louisiana, and Louisiana gets $6.4 billion more from the Federal
Government than it pays into the Federal Government.
You can downgrade Washington and talk about Washington spending
money, but Washington does not spend money in Washington. The Federal
Government is merely a transit, an exchange. They pull in the money and
they appropriate it out as it is needed for various functions, and it
flows into the States across the union. There have been studies done
that I have quoted here on this floor on several occasions about how
much each State pays into the Federal Government and how much each
State gets back.
Among the high roller States, the States that get more back from the
Federal Government than they pay into the Federal Government, is
Louisiana. Louisiana gets $6.4 billion more from the Federal
Government. These are the 1994 figures, the only year the complete
figures are available for. And these figures come from a study done by
the Kennedy School of Government, a very thorough study which looks at
all of the Federal expenditures for military installations, the
salaries of servicemen, the various military related functions that are
carried out by the States, as well as programs like food stamps and
Medicaid. It is all totaled up.
Louisana is a big gainer. After this great revamping of the budget
and revamping of the appropriations process, where they have saved so
much money, will Louisiana be paying more of its fair share. Will
Louisiana shoulder its own burden? New York, on the other hand, my
State, pays $18.9 billion more into the Federal Government than it gets
back from the Government. New York, New York.
I heard Mr. Kasich, the head of the Committee on the Budget, say that
we do not need Government telling us what to do. Our neighborhoods
should decide; our neighborhoods should be left alone. The
neighborhoods of New York would like to have that $18.9 billion back
and we could divide it up and take care of our own problems, but we are
paying it into the Federal Government and not getting back an equal
value.
In fact, we are the State of the Union at the very top of the list of
the States that pay more than they get back. California is the largest
State in the union. But whereas New York, in 1994, paid $18.9 billion
into the Federal Government more than it got back, California only paid
$2 billion more to the Federal Government than it got back.
California has had earthquakes and mud slides and large amounts of
Federal money have gone to California in order to relieve those
problems, but over the past 4 or 5 years, California has steadily paid
less into the Federal Government than New York, although California is
the largest State.
Mr. Kasich comes from Ohio, and Mr. Shays, who joined them at the
last minute, he is from Connecticut. Ohio and Connecticut, like New
York, are donor States. We pay more into the Federal Government than we
get back from the Federal Government.
My great question is, after all of these changes are made, after they
have cut the school lunch programs, after they have downsized and cut
the housing programs, after they have gone after the Medicaid program,
the Aid to Families with Dependent Children program, after food stamps
have been cut, after they have made all these cuts of relatively small
programs, they have not cut defense very much. In fact, these same
gentlemen who stood here before us and talked abut a revolution in the
budget and appropriations making process did not cut defense. They
increased defense by $6 billion. At a time when the Soviet Union no
longer exists and the threat to America is less than ever before, we
have an increase of $6 billion.
The President did not want 46 billion more for defense. The President
did not want a B-2 bomber. The President did not want extra money for
certain kinds of programs that were beneficial to members of the
Committee on Appropriations and members of the Committee on the Budget
for their States.
We have a lot of waste in the defense budget, and these gentleman did
not attack that at all. So I think it is very important to what I have
to say today to recognize the fact that there is an America, this is a
particular era in America where we have 2 basic approaches being taken,
maybe 2 mentalities being shown. One is a big shot mentality which says
that the rich and powerful can do no wrong, the rich and powerful
should be allowed to waste money on a wholesale basis, because when you
increase the defense budget by $6 billion, it is already above $200
billion, what are you doing? You are increasing the amount of money
available to go into the payment for manufactured weapons and for
supplies and for various items that are bought from huge corporations.
And the corporations are owned by people who have stock on Wall Street.
So you are feeding the richest people in America. They have their hooks
into the defense, the military industrial complex.
So every dollar that goes for defense is a dollar you know is going
to help rich people get richer, to help powerful people get more
powerful, because there is a relationship between dollars and power.
Those programs are not being cut, only the cuts for the people at the
very bottom.
There was a hearing today in the Committee on Economic and
Educational Opportunities, a markup at the subcommittee level dealing
with a program for people with disabilities, the IDEA, Individuals with
Disabilities Education Act. This is providing education for children in
America who have probably the greatest needs. Extra money has to be
spent to educate these children because of the fact that they have
great needs. They have problems, learning disabilities, physical
disabilities. And the amount of money that the Federal Government
contributes to this program is very small. It is 7 percent of the
total. States and local governments contribute more, most of the money.
[[Page H3811]]
Nevertheless, the committee is chipping away at the small amount of
money being spend on children with disabilities all across America.
They are chipping away at the programs. A great deal of time and energy
has gone into nitpicking about this costs too much for attorney's fees,
it costs too much to run a parents program where the parents have an
opportunity to get educated about what the program is all about and
they can, they are empowered to work with the schools in order to get a
better education for their children, all these things suddenly cost too
much.
These are programs for little people. These are programs for ordinary
Americans, we the people. We the people do not seem to count very much.
We the people are always the object of intense scrutiny. The microscope
of the Committee on Appropriations, the microscope of the Committee on
the Budget is focused on these little programs that have very small
amounts of money, and they are trimming away at these little programs
in order to save America from going bankrupt.
{time} 2115
It is rank hypocrisy, rank hypocrisy. These same committees, the
great Committee on Appropriations, the great Committee on the Budget,
are not concerned at all about facts that are introduced by other
entities. You know we do not find out here in Congress; other people
have to tell us.
The General Accounting Office tells us the CIA has $2 billion, at
least, in money that it did not spend over the years and it had lying
around in the petty cash fund. The CIA has that kind of money lying
around.
An audit revealed that they had $2 billion, $2 billion that the
director of the CIA did not know about, $2 billion that the President
did not know about.
Two billion dollars is a lot of money; ask these gentleman here. You
know, $2 billion, we can stop the cuts in the school lunch programs
with $2 billion for more than a year. Two billion dollars would mean
that we could fund the title I programs for schools, provide money, the
only money we provide, to elementary secondary education school,
education. I mean most of the money comes out of the title I program. A
$7 billion program, and they were proposing earlier in the year to cut
it by $1.1 billion.
But $2 billion for the CIA could have ended that cut for 2 years.
They were going to cut it by $1.1 billion per year. So that meant that
in 2 years it would have been $2.2 billion. Take the money that the CIA
has laying around, waste it, and you could end the cut, most of the
cut, on title I.
The Federal Reserve Board, another big-shot agency, an agency where
big shots, the rich and the powerful, run the agency. The rich and the
powerful have money lying around to the tune of $3.7 billion. The
General Accounting Office found that the Federal Reserve has $3.7
billion lying around that it has not used. They call it their Rainy Day
Fund.
In 79 years, in the last 79 years, the Federal Reserve has never
needed to use that Rainy Day Fund. They have never had any losses,
never had any crisis or problems in 79 years. So why do they need to
have $3.7 billion lying around? How much interests would you get on
$3.7 billion to offset the payments on the deficit? If that $3.7
billion had been given to the Treasury, where it belongs, we would not
have a situation where you pay interest on $3.7 billion worth of debt.
You would have that much less to pay.
Combine the $3.7 billion in the Federal Reserve slush fund with the
$2 billion in the CIA slush fund, and they have large amounts of money
that could be appropriated for education.
Gentleman stood there and they talked about how proud they were that
they made cuts in the education program. They were not just talking
about cuts. But one of them said we, we, want the parents of America to
know that we have stopped the Federal Government from telling them what
to do by cutting out the Goals 2000 program.
Well, there are several things wrong with that statement. The
gentleman is assuming that the Committee on Appropriations and the
Committee on the Budget have all knowledge. The Committee on Economic
and Educational Opportunities, of course, authorized the legislation
which contains Goals 2000. The Committee on Economic and Educational
Opportunities authorized the legislation which contains Opportunity To
Learn standards.
I serve on the Education Committee. I know the process. We debated
for 6 months the Opportunity To Learn standards. We debated for 3
months the Goals 2000 general program. We debated for another 2 months
with the Senate. And the back and forth in the Senate conference and
the House conference went on for 2 months on the Opportunity To Learn
standards alone.
With all this deliberation and all of this marshaling of facts,
hearing testimony that the authorizing committees went through in the
Senate and the House, along come the lords of the appropriation
committee, and they are in the appropriation process going to tell us
it is no good. They have all the knowledge, they have all the wisdom,
it is no good. The implication is that we should just abolish all of
the other committees of Congress. You know, we do not need a Committee
on Economic and Educational Opportunities. We do not need that. We do
not need other committees if the Committee on Appropriations, after its
large-scale deliberation on numerous topics and numerous programs, is
going to come to the conclusion that they can wipe out a program in the
appropriations process.
We all know that that is against the rules. We all know that the
Committee on Appropriations has no authority to wipe out a program like
Goals 2000, like Opportunity To Learn standards, and yet we have
seen again and again on the floor of the House when we challenge the
Appropriations Committee, we say you have violated the rules. They
said, yes, we violated the rules; you do not like it, appeal to the
Chair. And, of course, they have the numbers to vote down every appeal
of the ruling of the Chair.
You know, every attempt to get the Chair to enforce the rules is
frustrated by the fact that they have the numbers and they use those
numbers. You know if we were in another arena, it would be illegal to
use the numbers to do illegal things. Of course, the House rules are
the House rules. You violate the House rules, and there is no
punishment. We cannot put a committee in the little jail cells we have
down in the Capitol. In this Capitol we still have from the old days,
had some jail cells that they used to keep to put rowdy staff members
and Congressmen. We do not use that any more. So when the Committee on
Appropriations violates the rules, there is no enforcement mechanism,
and the majority vote can always back up the Committee on
Appropriations.
So what we are talking about tonight is America, does America exist
for the rich and the powerful only, is there an America where we the
people are still in charge, is there an America where we the people
matter?
We the people have a little program helping children with
disabilities. You know, does it cost $2 billion? No, it does not even
cost $200 million. Tiny program, helping children with disabilities, a
program that was supposed to deal with rural communities where children
with disabilities were totally out of touch with the program, urban
communities where poor people were out of touch and they were not being
served, they were not participating. That tiny program was singled out
today in the process of the markup of the subcommittee and wiped out,
does not exist any more if that markup goes through.
They also cut other provisions.
They also implied that the commitment of the Federal Government for
children with disabilities is too great. You know, in this great, rich
country where we can afford to have a Federal Reserve keep a slush fund
of $3.7 billion an the CIA have $2 billion lying around, we cannot
afford to take care of the needs of children with serious disabilities.
Is America for the rich and powerful only? Are we a Nation of big
shots versus ordinary, everyday people where the big shots walk away
with everything, nothing is too good for them, anything is too much for
ordinary people?
That is the way the Republican majority in this Congress has
proceeded. The omnibus bill that they are bragging about and crowing
about is a bill which has gone after little people, a bill that is
focused on the small programs.
[[Page H3812]]
They also implied the big shots can never waste too much, big shots
should never be chastised. They do not make speeches about the Federal
Reserve Board having $3.67 billion lying around. They do not make
speeches about the CIA having $2 billion lying around.
It is worse than that, of course. There is a much worse problem that
we have to deal with.
A friend of mine, my colleague from New York State, Carolyn Maloney,
has done a study of all the debt that is owed to various Federal
agencies, debt that is owed that is uncollected.
Now, here we are cutting school lunch programs, here we are going
after the Medicaid Program, a program for health care for poor
children, a program that takes care of nursing home people, poor and
cannot afford to pay for nursing homes. Here we are going after
programs that are vitally needed by people who are in great, and we are
not paying attention to the fact that $55 billion, according to the
study done by my colleague, Carolyn Maloney, Congresswoman Maloney, on
the Government Oversight Committee has done, a study which is
fantastic, and she really should be commended for the great work she
has done in this area. She has pinpointed, and she has documented, and
I have the charts here. She goes agency by agency and shows, according
to the last data that was available, and things might have gotten worse
since then, the last data that is available, what is owed in the
Farmers' Home Loan Mortgage and other programs in the Department of
Agriculture, one of the major offenders. Large amounts of money are
owed in the farm programs. The Farmers' Home Loan Mortgage Program is
the worst offender. Large amounts of money, debts have been forgiven,
forgiven in the Farmers' Home Loan Mortgage Program.
I cannot find out yet what is the criteria for forgiving someone who
owes a debt to the Federal Government. Who makes those decisions? From
my poor constituents in Brownsville, and East New York, Crown Heights,
back in Brooklyn, I am sure they would like to know who is the person
you see that forgives debts when they are owed to the Federal
Government.
There are people out there who owe a few thousand dollars to the IRS,
and they are being continually pursued. There some people, a head of
small programs, programs that have funds, and they did not quite know
how to handle the bookkeeping. So they were in a situation where the
grant funding came late from the State, and they needed supplies, and
they needed various things, and they spent the money that they should
have been each quarter sending to the IRS. IRS now wants its money. So
it is some of the programs have gone out of business, so they are going
after the homes of the members of the board of directors, these little
people who came out to help make these programs work. They did not get
paid; they were just members on the board. They must now have their
homes jeopardized because the IRS wants to let unpaid taxes from that
agency.
And yet talking about a few thousand dollars here. You know, you are
not talking $1 million, not talking about a $100,000. Talking about a
few thousand dollars that they are being pursued for. But in the
Farmers' Home Loan Mortgage forgave over a 5-year period $11 billion,
$11 billion they forgave.
How does that happen? I have asked questions for the last 2 years and
tried to get answers as how do you go about forgiving that kind of
debt? But in the Department of Agriculture somebody has the power to
forgive.
On occasion we had the Department of Agriculture representatives
before us in the Committee on Government Oversight, and we asked basic
questions like how does it happen that people get so delinquent in the
payment of there mortgage loans? You know. My mortgate is not paid in 1
month, you know I get a big penalty, and I get a notice second month
that they are ready to start foreclosing procedures. How do millions of
dollars accumulate for farmers home loan mortgage situation?
I was told by the man standing there who was a high ranking official
that, you know, sometimes the addresses change, people move, and you
just cannot find them when their addresses change. Now I do not know
how anybody with a mortgage on a piece of property can have his address
change so radically that you cannot find him. The property is still
there, they still own it. How can you sit before a committee of
Congress and give an answer like that, that we have a hard time finding
people because their addresses change?
But it was done, you know, and I am not one of these guys who bashes
the Federal Government and the bureaucracy, but that was a low point in
the Federal bureaucracy when they give that kind of answer. Of course
State bureaucracies, city bureaucracies, are just as bad. We heard all
the discussion here about how terrible it is that money flows into
Washington and it is not spend properly. Washington, you know is not
alone. Probably Washington does a better job. Its bureaus and
bureaucracy does a better job than most State governments and most
municipal governments.
The spotlight of course is on Washington. One of the greatest things
about the Federal Government is that it is always a gold fish bowl
because there is the national media, and there are all kinds of people
who are watching critically, but at the State and city level there are
terrible things that happen in silence. Nobody says anything. A lot of
terrible things happen, and it is not hidden, but everybody seems to be
paralyzed.
In New York City, the mayor of New York City who prides himself on
reestablishing efficient government, who has a deputy mayor who comes
out of business, and he is always pounding away at expenditures by
little people and little agencies driving the welfare rolls down by
making a long application and requiring people who are hungry to wait 2
or 3 months before they can ever be interviewed.
{time} 2130
There are all kinds of ways they use to oppress the little people at
the bottom. On the other hand, they let out a contract to an agency for
$43 million. The City of New York, the Giuliani administration, they
put out a contract for $43 million to an agency and the board of
directors of the agency never saw the contract. The chairman of the
board said he never saw the contract. A staff member of the agency
negotiated the contract and signed the contract.
Of course it was later discovered that people in the agency that let
the contract, negotiated the contract at the city level, they had some
of them go and get jobs. They got jobs at the agency with which they
had negotiated, so it is obvious that something more than mismanagement
was going on here. We had mismanagement and corruption.
We have not heard of a single person being arrested as a result of
this $43 million contract. Oh, yes, they took back the contract, they
canceled the contract, closed down the agency, a lot of furor about
``This cannot be,'' but no real answer as to why or how does an agency
have a staff member negotiate a contract for $43 million.
I do not think you would have that happen in the Federal Government.
Whatever things that you might find wrong, you will not have that kind
of blatant violation of ordinary sophomoric rules of contracting, but
it happens often at the level of municipal government. It happens often
at the level of State government.
In our State, we have a governor who openly is saying he is going to
move the functions of government around the State and place those
agencies that employ large numbers of people in the areas where he got
the most votes. It is no secret. It is all out there. How can a State
allow the functions of government or the agencies of government, the
resources of government, to be used for partisan purposes? But big
shots seem to be able to do this.
In America now where the big shots can walk away, do anything they
want, they owe the Federal Government millions of dollars. When the
Farmers Home Loan Mortgage story was first broken, the Washington Post
had a front page story and they talked about 5 millionaires who were
perpetrators, who were guilty, 5 millionaires. One of them was sitting
on a board appointed by President Reagan that made decisions about who
got to keep and who got additional loans.
Five millionaires. I do not know of a single millionaire that was
arrested, has been tried or convicted of anything, among those
millionaires who
[[Page H3813]]
were cited. They were named. The Washington Post named them. Four or
five. At least four, who were named. Yet the rich and powerful were not
worthy of a hearing. I do not know of any hearings that were held to
deal with that story.
The chairman of the committee, one of the members of the committee I
saw shortly after the story, the Committee on Agriculture here in
Congress, I saw him shortly after the story broke. I asked him what he
was going to do about it. He said, ``You better believe we're going to
hold some hearings and get to the bottom of this.'' I do not see any
record of any hearings being held which got to the bottom of it.
Even now when I call and have my staff try to get information about
where we are now with the Farmers Home Loan Administration program, you
get vague answers. The figures are right now that at least $10 billion
is outstanding, delinquent, at this point right now, $10 billion. How
much of that will they forgive? They still will not tell us the rules
of forgiveness. They still will not tell us how you get that.
We can go after children with disabilities, we can try to wipe those
programs out because America cannot afford them. We imply that children
with disabilities would bankrupt America. There is a smear campaign
going now on all the special education programs.
There is a lot of furor being generated about children with
disabilities not being held to the same standard as other children in
the school. Yes, they are protected by law. You cannot suspend them or
expel them in the same way you do children who do not have
disabilities, so they have used that as pretext to smear the programs.
There is a great problem, they say. What if the kid brings a gun to
school, a child with a disability brings a gun to school? That is a
major problem, it has been played up now. We have got to get rid of
guns in the hands of children with disabilities. Ask the question, the
simple question, how big is the problem? How many instances of children
with disabilities having guns do we have?
The answer is that we do not have any studies, nobody has collected
any information. We just have one or two incidents that they can cite.
You can cite one or two incidents to show or prove anything. You can
cite some incidents but the problem when you probe a little further,
the problem is minuscule. There is no great problem of children with
disabilities bringing guns and weapons to school.
But a crisis has been manufactured because this is one more way to
smear the programs of children with disabilities. It is one more way to
play into a situation where local superintendents and administrators
are upset because they have to spend more on the education of children
with disabilities than they spend on other children. So they would like
to be able to get their hands on that money, and they would do anything
to discredit the program for children with disabilities.
I am not saying that the program for children with disabilities does
not have some problems. I have been a major critic of certain kinds of
excesses. The way they are administered, the way they are handled in
New York City has resulted in large numbers of children with a
delinquency problem, a discipline problem. They should not be in the
program for children with disabilities.
It is a dumping ground for teachers who want to get rid of children
who are a problem, but they are discipline problems. There ought to be
some way to deal with it. We ought to provide them with some way to
better deal with discipline problems, but there are not problems with
disabilities. That has been an ongoing criticism that I have of the
program. It is a valid criticism that most of them cannot answer.
So we need to deal with that. We need to deal with each problem as it
arises. But to smear all of the programs for children with
disabilities, and to set the children who do not have disabilities and
their education against the smaller percentage of children who do have
disabilities, and to try to take the money away from the disability
programs in order to solve budget problems in the larger school budget,
is unworthy of Americans.
Really we have a problem with funding for schools. These gentlemen
here who pride themselves on having cut the budget have cut education
funding. Oh, yes, they are gong to put back the $1.1 billion they cut
for Title I. I applaud that. I congratulate them. They will put back
the $1.1 billion. But they have cut training programs, teacher
education programs, a number of programs that still will not get the
money back, and we should have been increasing the amount of money
available for education. We should have been increasing it.
We should not be standing here proud of the fact that we made
dramatic cuts in education. Instead of the citizens out there, teachers
and children and administrators, all uniting to demand of their
governments at every level, whether it is the city governments or the
State governments or the Federal Government, instead of demanding at
every level that they fund education programs consistent with 20th
century demands before we go off into the 21st century, they fund money
to bring the school buildings up to date so they can be wired properly
and have high-tech equipment like computers and science equipment that
is needed. Instead of making the demand on the government, instead of
waging the war on the people who make decisions in our government, too
many of them are willing to engage in cannibalism. Too many are willing
to try to eat what exists. They are going to eat up, devour the special
education programs in order to satisfy the needs of the rest of the
budget.
I think that is a harsh way to put it, but I can think of no other
way except to say that that is happening. Right now the programs for
children with disabilities are in great trouble because that is being
used as an excuse by certain decisionmakers here in Congress for
chipping away at these tiny programs that are already too small, that
serve children with disabilities.
Big shots, nobody wants to talk about that. We have not had a single
hearing on the Federal Reserve slush fund. If the CIA oversight
committee has had a hearing, then I have not heard about it. The
Intelligence Committee probably is dealing with that but they do not
tell us, so I cannot say a hearing did not take place.
Some people, however, have challenged me. Some people who have heard
me talk about this before have called and said, ``You know, you make
these charges against the CIA. How do you know? On what basis do you
make these charges?''
I want you to know that I am not a member of the Intelligence
Committee, so I have no oversight responsibilities there. I do not get
a chance to see the actual figures, and I am like any other American, I
read the New York Times and I read the Washington Post, and I read
other newspapers who have their sources.
On several occasions, in several of these papers, I have read that at
least $2 billion was found in an audit of the CIA, and going beyond
just stating that $2 billion was found in an audit, there was an
article which appeared in the New York Times on Tuesday, February 27,
1996 which talked in great detail about actions taken to remedy the
situation: ``Spy Satellite Agency Heads Are Ousted For Lost Money.''
That is the headline for this article.
``The top two managers of the National Reconnaissance Office, the
secret agency that builds spy satellites, were dismissed today after
losing track of more than $2 billion in classified money.'' That is the
first paragraph of this article by Tim Weiner. It does not say it is
alleged. It does not say ``sources say.'' It states it as a fact.
``The Director of Central Intelligence, John Deutsch, and Defense
Secretary William Perry announced''--oh, there was an announcement--
``that they had asked the director of the Reconnaissance Office,
Jeffrey K. Harris, and the Deputy Director, Jimmie D. Hall, to step
down.'' Then it goes on and explains how $2 billion got lost and the
President did not know about it and the director of the agency did not
know about it.
Mr. Speaker, I include this article that appeared on February 27 in
the New York Times in its entirety in the Record because I do not want
people to continue to question my accuracy. Here is an article which I
think names names, talks about announcements, and it clearly
establishes that $2 billion was lost.
[[Page H3814]]
[The New York Times National, Tuesday, Feb. 27, 1996]
Spy Satellite Agency Heads Are Ousted For Lost Money
(By Tim Weiner)
WASHINGTON, Feb. 26--The top two managers of the National
Reconnaissance Office, the secret agency that builds spy
satellites, were dismissed today after losing track of more
than $2 billion in classified money.
The Director of Central Intelligence, John Deutch, and
Defense Secretary William J. Perry announced that they had
asked the director of the reconnaissance office, Jeffrey K.
Harris, and the deputy director, Jimmie D. Hall, to step
down.
``This action is dictated by our belief that N.R.O.'s
management practices must be improved and the credibility of
this excellent organization must be restored,'' Mr. Deutch
and Mr. Perry wrote in a statement. A Government official
close to Mr. Deutch said the intelligence chief had lost
confidence in the officials' ability to manage the
reconnaissance office's secret funds.
Keith Hall, a senior intelligence official who has managed
satellite programs for the Pentagon, was named today as
deputy director and acting director of the reconnaissance
office.
The reconnaissance office is a secret Government
contracting agency that spends $5 billion to $6 billion a
year--the exact budget is a secret--running the nation's spy
satellite program. The satellites take highly detailed
pictures from deep space and eavesdrop on telecommunications;
everything about them including their cost, is classified.
The secret agency is hidden within the Air Force and is
overseen jointly by Mr. Deutch and Mr. Perry.
But overseeing intelligence agencies, especially an agency
as secretive as the reconnaissance office, whose very
existence was an official secret until 1992, is no easy
matter. Well-run intelligence services deceive outsiders;
poorly run ones fool themselves. This apparently was the case
with the reconnaissance office.
Its managers lost track of more than $2 billion that had
accrued in several separate classified accounts over the past
few years, according to the Senate Select Committee on
Intelligence. The committee had thought the sum was a mere
$1.2 billion until auditors called in by Mr. Deutch found at
least $800 million more in the reconnaissance office's secret
books this winter.
The auditors told Mr. Deutch that the way the
reconnaissance office handled its accounts was so arcane, so
obscured by secrecy and complexity and so poorly managed that
a $2 billion bulge in its ledgers had gone unreported.
``Deutch did not know, Perry did not know and Congress did
not know'' about the surplus, an intelligence official said.
``There was a lack of clarity as to how much money was there
and how much was needed.'' The audit is continuing and is
expected to be completed by April.
The reconnaissance office also spent more than $300 million
on a new headquarters outside Washington in the early 1990's.
The Senate intelligence committee, which appropriates
classified money for intelligence agencies, said it was
unaware of the cost. In the only public hearing ever held on
the subject of the National Reconnaissance Office, Mr. Hill
testified in 1994 that the construction of the building was a
covert operation and the money for it had been broken into
separate classified accounts to conceal its existence.
The reconnaissance office is one of 13 intelligence
agencies under Mr. Deutch. All will be covered in a report to
be issued on Friday by a Presidential commission on the
future of intelligence. The report will address the question
of whether government spending for intelligence--an estimated
$26 billion to $28 billion a year--should continue to be
officially secret.
Of course the Federal Reserve Board has not denied the fact that $3.7
billion or more, it may be close to $4 billion that the Federal Reserve
Board had on hand, unused, as part of its rainy day fund. That has not
been denied. I will not quote articles. There are plenty of documents
around which validate that.
Why do I go on like this? What does it have to do with the 11th
Congressional District in Brooklyn? The 11th Congressional District in
Brooklyn is made up of people, a large percentage of which are poor. We
are 1 of the 25 poorest congressional districts in the country.
It varies, of course. There are some areas where we have middle class
homes and people who have a little more substance, but in a community
like Brownsville, for instance, or in a community like East Flatbush,
for instance, there are large numbers of poor people. Then there are
also middle-class people who have enough money to try to buy a co-op in
a large building.
There is a building that I was in last Saturday which has more than
100 units. We have some pretty big buildings in my district. In fact, I
have the smallest congressional district in the country. My
congressional district covers only 10 square miles, 581,000 people in
10 square miles, so you can imagine how many tall buildings I must have
in my district.
Here is a building that I went into at the request of lieutenants
where, of the 100 units, a process was begun several years ago to co-op
the building, so the owner of the building started selling co-ops.
Twenty people paid down their down payments and they got their loans
and they owned their apartments.
Along comes the savings and loan debacle. Remember that one? That, I
have talked about so often, is this big shots again. I have talked
about the savings and loan swindle, the biggest swindle in the history
of mankind, where the total might become as high as a half a trillion
dollars, $500 billion, before it is all over.
Savings and loans will be in front of us again soon. I understand we
have to vote on a thrift fund package. The thrift fund package is a
package established to help bail out savings and loan units. They sold
bonds, and now the bonds will come due and there is no money to pay. It
is very complicated.
I talk about it because I am not concerned with high finances and I
am not concerned with trying to do the job of the Banking Committee. I
am only concerned about the little people in my district in this
building who are the victims of the ultimate slime, the ultimate feces
that goes down as a result of failure of big banks that were loosely
regulated, badly regulated, and they were allowed to give these loans
without proper collateral. They were allowed to let landlords and
owners do very tricky financing, so that in addition to a mortgage
being on each apartment in this building that was sold, the landlord
had a wraparound mortgage for the whole building.
{time} 2145
When the collapse came as a result of there not being the kind of
value there that he had been allowed to assert was there, it was a
savings and loan institution that had to suffer the collapse. It was a
large organization like Freddie Mac here in Washington that ended up
buying the building, and Freddie Mac is now the owner of the building.
The 20 people who had equity, money invested, have lost all of their
money, because through the complicated maneuverings of the high finance
and the real estate financing, which I do not pretend to understand,
the building reverted back to a rental building totally. So it is a
rental building now, and the people who thought they owned their
apartments who owe $90,000, $60,000 to $90,000 on their apartments, now
own nothing, unless something drastic is done.
In addition to that, Freddie Mac, and Freddie Mac is a Washington-
based institution, a national institution, and I am citing Freddie Mac
because Freddie Mac, I intend to come after you. I want you to help
resolve this problem. The little people in my district, little people,
in this case who are working people, who have enough assets to be able
to have started the process of trying to own their own apartment, they
are out there in the cold. And Freddie Mac and its cohorts have hired
rental agents and managing companies and they are trying to get their
money by neglecting the building. The plumbing in the building is
outrageous.
I was carried on a tour through the building, and I saw the building
which is 10 stories high, it means the plumbing is bad, it is bad all
the way down that line. And the people on the bottom, I guess they get
the worst of it. And one lady talked about having to use boots in her
apartment for a long period of time before they did some repairs. But
the repairs have by no means been completed. The ceilings are open, the
drips are still there.
What does this have to do with savings and loans swindles, what does
it have to do with the failure of the Congress to properly regulate
savings and loans? What does it have to do with the fact that most
savings and loan crooks got off without going to prison, paying the
money back? What does it have to do with the fact that we cannot get a
decent clear report as to the status of the savings and loan bailout
now? What does it have to do with the fact we are going to be voting
very soon again on another appropriation for the savings and loan
bailout, while we are cutting programs for children with disabilities,
cutting programs for opportunities to learn education? How does it
[[Page H3815]]
all tie together? How does it all tie together with my assertion that
the rich and famous and powerful seem to get away with everything,
while we scrutinize and oppress the people at the very bottom?
The people who are the tenants in this building, the people who
thought they were owners of those co-ops, they are the people at the
very bottom. They are in my district. I will not waste my time here on
these high financial matters trying to reform government or expose the
fact that there is no reform, that big government is as big as it ever
was when it comes to the rich and powerful, and nobody is seeking to
really bring the rich and powerful to heel. Nobody is dealing with the
uncollected debts that amount to $55 billion. Nobody is dealing with
the savings and loan scandal that keeps going, quietly. We are taking
care of that. But every time the savings and loan debacle says to
Congress we need more money, we appropriate more money. We get a
message, it has to happen. The financial markets are going to collapse
if we do not appropriate more money.
A very interesting matter arose in Japan. Here I am going across the
water. You think I am rambling? No. In Japan they have a savings and
loan scandal. They have a banking scandal similar to the American
savings and loan scandal, a huge situation where large numbers of banks
are collapsing, real estate markets are collapsing. The government is
called upon to bail out the situation.
I thought it was very interesting the reaction of some Japanese
legislators. You know, we sweethearted the process here in America.
Both parties, together, became mum and they never had hearings to
expose the criminality of the savings and loan banks and the other
banks that were also more regular banks collapsed. Savings and loan, we
called it the savings and loan debacle because they started it. There
were other banks, larger amounts of money, and they were also regular
banks under the jurisdiction of the FDIC and Federal Reserve Board. We
had all these controls and regulations, and still there was so much
collusion from one level to another, the decision makers in bed with
the regulators, and the regulators in bed with the banks.
It was a once-in-the-history-of-mankind situation. No swindle has
ever been pulled off as great as that, and no swindle has ever taken
place where so many people got away with it.
So much crime that did pay. It paid billions of dollars. But in
Japan, you have a very unusual thing that happened. The story in the
New York Times says that one Japanese party staged a sit-in in the
legislature. They blocked the chambers where the debate was taking
place on the bailout for the banks. Very interesting. If you want to
know what the possibilities are, what more we could have done, then I
will quote this article a little bit and you will see what the Japanese
did, faced with the same situation.
The savings and loans collapsed, real estate market collapsed, it
resulted in little people at the very bottom suffering greatly, like
the people in my district who were suffering in this one building. All
their money gone down the drain, now they have to fight a landlord and
a management company that will not even repair the pipes. A group of
tenants were taken to court on Monday, and I went down to the court.
They postponed the case. Those people had all taken off from work to
go. Now the case is postponed and they have to come back. The little
people are harassed even by the court system.
How does it all relate back to Japan and the politicians in Japan
becoming so militant and so angry that they staged a sit-in? Some of
Japan's leading politicians are spending their time in a sit-in. This
was reported in the New York Times on March 16, 1996.
``It is a battleground, said Kojimoro Moto,'' quoting from the
article:
a member of the House of Representatives who is also an
organizer of the sit-in which at the time of this report was
in its second week. When they said it is a battleground, that
is a bit of an exaggeration perhaps, but there is no
mistaking the seriousness of the conflict. Those protesting
are the main opposition group, the New Frontier Party, and
they have succeeded in paralyzing the Japanese budget
process. The New Frontier Party's aim is to block the passage
of the budget bill for next year. The party objects to an
unpopular provision in the bill to use about $6.8 billion in
taxpayer money to absorb losses in the liquidation of seven
of the nation's bankrupt mortgage lenders.
Let me just repeat that:
The New Frontier Party was sitting in in the legislature of
Japan blocking the budget process from going forward, and
their aim is to block the passage of the budget bill for next
year.
The party objects to an unpopular provision to use about
$6.8 billion in taxpayer money to absorb losses in the
liquidation of seven of the nation's bankrupt mortgage
lenders.
This is a bailout for the banks similar to the savings & loan bailout
in this country.
Now, I was in Congress when the bailout began here for the savings &
loans in this country. We never had a figure as low as $6.8 billion. I
think the first bailout money was $7 billion, and it got higher. It got
to $50 billion, $75 billion, and we kept being told ``it is off budget,
so don't worry about it.''
Off budget does not mean the taxpayers do not still pay. That means
in the calculations for the budget that year, you do not have to figure
it. It becomes part of the deficit.
We appropriated never as little as $6.8 billion. But the Japanese
members of the legislature, the equivalent of Congresspersons, were
sitting in to block that from going forward.
We are going to have on this floor within a few days a bill to
continue the bailout of the savings & loans called the Thrift Fund.
While we are cutting programs for children, programs for the elderly,
while we are going after Medicaid, Medicaid is on the agenda, Medicaid
will be cut, the bargaining process that goes on between the white
House and the Republican majority here is such that the Republican
majority always wins something, and every step of the way they have won
some cuts, so we can expect Medicaid will be cut. That is the least
that we can expect.
The most that we can expect is that Medicaid will be given to the
States. All the Governors, both Democrat and Republican, have decided,
voted, they wanted Medicaid to be made a block grant. Take away the
entitlement and give it to the States.
So those cuts are going to go forward at the same time we have voted
for a $6 billion increase in defense, and we are now going to be voting
to bail out more of the banks. It is going to be billions of dollars.
They will not come with a few hundred million, I assure you.
Let me go back to the Japanese. To quote from the article about the
Japanese sit-in,
``Critics of the bill say that $6.8 billion is just the
beginning of the bailout, for the banks are saddled with at
least $400 billion in bad debt. The provision has prompted a
public outcry against bankers and bureaucrats, who many
believe are responsible not only for the nation's bad debt,
but also for the stagnant economy.
I will not read any more at this time. I just want to draw the
parallel. Nobody on this floor has ever mentioned the fact that the
Japanese have a swindle, a scandal, of the same dimensions, did you
hear what I just said, the $6.8 billion is just the beginning. They
think they have a problem of at least $400 billion.
In this country, we never got a figure, but it always kept growing.
Stanford University at one point, who had more of the figures that
anybody else, estimated that the savings & loan bailout in America, the
greatest swindle in the history of mankind, would cost the American
taxpayers $500 billion, half a trillion dollars, before it was over.
We cannot yet clear reports. We do not know how close we are to the
$500 billion yet. But it is affecting everybody at the lower levels in
this country, the ordinary Americans. You are being made to suffer for
what the rich and powerful have walked off with.
Even the $5.15 per hour minimum wage now is being seen as a threat.
We are told that the American economy will suffer. Industry is
trembling because we have a proposal to raise the minimum wage by 45
cents per hour per year, 45 cents per hour in one year and 45 cents an
hour in another year, which means after 2 years the minimum wage
increases would go from $4.25 to $5.15 per hour. $5.15 per hour is
called a threat to the American economy.
The little guys on the bottom, every-thing is too much for them. The
guys on the top can get away with billion dollar slush funds, they can
wreck the banking economy and the taxpayers
[[Page H3816]]
are forced to bail them out through the Federal Deposit Insurance
Corporation. But the little guys on the bottom asking for $5.15 per
hours for their labor, it does not even come out of the Treasury. The
American Government does not have to pay the $5.15 per hour. The
Government does not subsidize wages paid by industry. It does not come
out of the taxpayers' money. It comes out of the industries that hire
the people.
But there are some here in the leadership of the recommend and
majority who have indicated that they will not have any hearings or
discussions on a minimum wage. They indicated that earlier in the year.
And that if we pass the minimum wage increase this year, it will be
``over their dead body.'' That strong statement was made by a leader of
the Republican majority.
Fortunately, public opinion in America is galloping forward.
Fortunately, public opinion understands that this is ridiculous. Public
opinion is comparing the prosperity on Wall Street and the large
amounts of money being paid to stockholders and the large amounts of
money being paid to corporate executives, my colleague here before from
Chicago was talking about the gap between the corporate pay of
executives and the amount of money people are earning at the very
bottom, and Americans are not dumb. Fortunately, public opinion, by
more that 76 percent, says that we ought to have an increase in the
minimum wage in America.
{time} 2200
Fortunately, the hearts of the American people are still not so hard
and so corrupted that they cannot understand the arithmetic of $5.15
per hour, which comes out to a little more than $9,000 per year. Right
now people are making about $8,000 a year on minimum wage. They would
be making about $9,000.
Another thousand dollars would make a big difference in the lives of
people in terms of groceries on the table, shoes for the kids, the
payment of a light bill, the phone bill. It is not a small amount for
poor people, for those at the very bottom, and most people cannot
sympathize here in this Congress. We can forgive billions of dollars in
loans for farmers' home loan mortgages, but we cannot see the need to
give $5.15 as a wage, hourly wage, for people who are working.
We have had many attacks on welfare mothers, which is a misnomer,
because the Federal Government does not pay money to mothers. The
mothers of children who are considered dependent children receive the
checks on behalf of the children. Aid to Families with Dependent
Children has been under one steady stream of attack. It is all over
just about now. They are going to take away the entitlement. They have
made the cuts. But it is a small program. It is a tiny program compared
to the farm subsidy program, for example.
The farm subsidy program, which allows Louisiana, part of the reason
Louisiana gets so much money, and I am going to tie this together now,
part of the reason Louisiana gets so much money from the Federal
Government is because not only does it have military installations
there, but it also has farm subsidies it gets from Washington.
The State that gets the highest amount of money from the Federal
Government per capita is New Mexico. In terms of what it pays in, New
Mexico gets back more per person than any other State. Why? Because New
Mexico has the largest, a large number of farm subsidies, programs that
receive subsidies from the Federal Government. New Mexico is at the top
per capita, $3,255 more per person they get from the Federal Government
than they pay into the Federal Government.
What did the gentleman who was speaking here before from the
Committee on the Budget and the Committee on Appropriations, what do
they do about the fact that New Mexico is at the top of the list?
Farm subsidies for the rich and the powerful, because farmers do not
have to prove they are poor in order the get subsidies. Farmers do not
have to prove anything except that they are farmers and they have land.
They get paid for not plowing the land or not planting grain and nobody
asks them how poor are you or how many in your family. Farmers just get
it. They are rich and they are powerful or they are hooked into
organizations that are powerful. So in America the rich and the
powerful are definitely not subjected to the kinds of budget cuts and
the scrutiny that the children in the lunchroom are.
We are going to force teachers to walk around the lunchroom and pick
out immigrant children and make sure no immigrant child gets a free
lunch paid for partially by the Federal Government.
I want to make a correction here on my statement on minimum wage. The
Republican majority said they would not have any hearings, no
discussion on minimum wage at the beginning of this Congress. But
because the pressure has been applied steadily by the American people,
because common sense has said you ought to discuss it and you ought to
pass and increase the minimum wage, we now have a situation where the
Republicans are willing to discuss minimum wage and a proposal is being
made.
Some Republicans, I think about 20, have introduced a bill which says
they want to raise the minimum wage by not 90 cents over 2 years but a
dollar over 2 years. That is a small group of the Republican majority,
about 20 people. The leadership of the Republican majority has
introduced a proposal. They do not want to increase the minimum wage.
You will do that over their dead bodies, they say. But they have a
proposal called the Minimum Wage for Families Act. I have a copy of the
outline in my hand. And this proposal, which is going to sidestep
making industry pay more than $4.25 per hour, will have the Federal
Government step in to subsidize the wages.
Let the industries keep hiring people at $4.25 an hour, the Federal
Government will then step in and give people additional money who are
working. You talk about a farm subsidy; now we are going to have a
subsidy for industry, corporations and businesses. You will get a
subsidy, and every person who has one child will not get $4.25 hour,
the Federal Government will give them an additional $3.75, so that they
will get $7 an hour. And if they have two or more children, the Federal
Government will give them enough money to make their pay come out to $8
an hour.
Now, can you see millions of workers across America having the
Federal Government involved in their pay? This is an intrusion by
Government that we have never had before. It will be on a scale greater
than telling the farmers what to plant and telling the farmers how to
grow their crops because they are getting money from the Government. We
are going to have millions of workers involved in a program where the
Government is going to help industry bring people's wages up.
How is it going to do this? The Government is going to take the money
from the earned income tax credit. They want to raid the earned income
tax credit and use it for working people in these industries and have
the Internal Revenue Service, on a regular basis, every 2 weeks, the
Internal Revenue Service will now have the job of paying the difference
between the $4.25 per hour and the amount due to each person in
accordance with what has been decided by the Government.
Can you imagine what kind of bureaucracy we are talking about there,
in a Congress that prides itself on downsizing the Federal Government?
The Federal Government will be intruding like it never has before in
the lives of working people. Why do not we just give the $4.25 to each
worker out there who is working? Why do not we just give it to the
little people? Why are we going to put the people on the bottom?
Because if you are making $4.25 an hour, economically you are on the
very bottom. Why are we going to put them through that when we do not
put farmers who receive subsidies?
In Kansas they say the subsidy averages about $40,000 a year per
family. That is the average. Many get much more than that. Forty
thousand dollars a year per family. They do not get through a process
of scrutiny by the Federal Government to determine whether you have one
child or two children or whatever.
Let me summarize. What I am saying is that we have allowed a
situation to arise, generated by the majority in this Congress, where
there are two sets of Americans, the 80 percent who are ordinary people
struggling to make a living, the 80 percent are a part of what my
colleague, Mr. Lipinski, was talking about, from Chicago, he was
talking before I got here, 80 percent who are struggling to make ends
meet are
[[Page H3817]]
being given a hard time in every way by their government.
I think this 80 percent constitutes a caring majority and all
together they have enough common sense to see what is happening. I
think the caring majority all together will rise to take matters into
their own hands at the polling places. I think the caring majority have
had enough. I think the people with disabilities are not beggars. They
are not people that we have to treat with charity. They have votes.
There are almost 40 million people in this country with disabilities,
so when we treat them in a cavalier way in legislation, we are going to
reap what we sow. I am confident that the average American on the
bottom out there, we the people, will rise and at the ballot box
demonstrate that this is a country still for the people and not for the
rich and powerful. We are going to have justice and those who ignore
this will have to suffer the consequences.
____________________