[Congressional Record Volume 142, Number 102 (Thursday, July 11, 1996)]
[Extensions of Remarks]
[Pages E1247-E1249]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  IMPLEMENTATION OF THE CUBAN LIBERTY AND DEMOCRATIC SOLIDARITY ACT, 
                           PUBLIC LAW 104-114

                                 ______
                                 

                          HON. LEE H. HAMILTON

                               of indiana

                    in the house of representatives

                        Wednesday, July 10, 1996

  Mr. HAMILTON. Mr. Speaker, unless the President decides by July 16, 
1996, to exercise his authority to suspend its implementation, title 
III of Public Law 104-114, the Cuban Liberty and Democratic Solidarity 
Act, will take effect on August 1. Title III of Public Law 104-114 
grants U.S. citizens the right to sue foreign companies that may be 
using or otherwise benefiting from properties seized by the Castro 
government following the Cuban revolution in 1959. A key objective of 
this title is to encourage foreign firms to abandon existing 
investments in Cuba, and to discourage future investment.
  I believe implementation of title III of Public Law 104-114 would be 
contrary to U.S. national interests in two ways. First, by escalating 
pressure on the Cuban economy, title III will increase, rather than 
decrease the chances for a peaceful transition to democracy in Cuba. 
Second, by penalizing foreign companies for commercial conduct toward a 
third country, title III will provoke trade conflict with many close 
friends of the United States, countries with which we cooperate on a 
range of issues. Several foreign governments have already warned that 
they may take retaliatory steps, and that could cost U.S. jobs.
  I commend to the attention of Members two valuable statements on the 
implementation of Public Law 104-114. The first is a briefing paper 
written by Jorge I. Dominguez, coordinator of the Task Force on Cuba of 
the Inter-American Dialogue and Professor of Government at Harvard 
University. The second is a letter to the President from five major 
business groups: the U.S. Chamber of Commerce, the National Foreign 
Trade Council, the Organization for International Investment, the 
European-American Chamber of Commerce, and the U.S. Council for 
International Business.

[[Page E1248]]

Both statements make a persuasive case for a waiver of title III of 
Public Law 104-114, and the business letter demonstrates the broad 
support for a waiver in the U.S. business community.

       The implementation of the Helms-Burton legislation raises 
     two key questions for US policy. Does Helms-Burton serve U.S. 
     interests? And will the legislation help promote democratic 
     change in Cuba? The immediate policy issue that President 
     Clinton faces with regard to the Helms-Burton legislation is 
     whether to waive application of its Title III. This title, 
     the most controversial in the legislation, would permit U.S. 
     citizens and firms to sue in U.S. courts to obtain 
     compensation from non-U.S. firms that, through investment or 
     trade, ``traffic'' in the properties or enterprises seized 
     decades ago by the Cuban government.


                          international trade

       The major trading partners of the United States in Canada, 
     Europe, Latin America, and East Asia have expressed concern 
     and anger over the Helms-Burton legislation. They consider 
     the law a violation of international trade agreements 
     establishing the World Trade Organization and the North 
     American Free Trade Area. Title III of the legislation is 
     viewed by every major country as detrimental to its relations 
     with the United States.
       U.S. interests will suffer even if none of the governments 
     retaliate against the United States for violations of 
     international conventions. Other countries might more readily 
     violate the international trade regime because of the U.S. 
     violation. This U.S. policy is eroding that regime that the 
     United States has worked so hard to construct. Moreover, the 
     United States has long opposed ``secondary boycotts'', and 
     U.S. legislation prohibits U.S. firms from participating in 
     such boycotts. Yet the Helms-Burton legislation mandates a 
     secondary boycott on other nations.


                      the economic effects in cuba

       The long-standing U.S. embargo on the Cuban economy has had 
     several economic effects. It has caused a rise in the costs 
     to Cuba and the Cuban government of engaging in any 
     international economic activities and it has raised the 
     profits of those firms that are active in the Cuban market. 
     Foreign investors are well aware of the political risks posed 
     by investments or trade with Cuba, so they demand and receive 
     from the Cuban government ``sweeter deals'' than those 
     offered elsewhere in Latin America or the world. And because 
     Cuba must offer more attractive concessions to international 
     traders and investors, Cuba pays a higher cost to participate 
     in international economic activity than it otherwise would. 
     Moreover, firms that invest in Cuba face no competition from 
     U.S. businesses.
       The Helms-Burton legislation magnifies each of these 
     effects, and adds one more. It sorts out firms that trade 
     with Cuba by size. Large international firms--because they 
     are likely to do business with the United States--will be 
     discouraged from trading or investing in Cuba. But smaller 
     firms that do not operate in the U.S. market are not exposed 
     to Helms-Burton retaliation. These will find it extremely 
     attractive to invest in Cuba. These economic effects, 
     however, do not advance democratic change in Cuba.


                      significance for u.s. policy

       From the perspective of U.S. policy, the achievements of 
     Helms-Burton are: (1) increased economic costs have been 
     imposed on Cuba, punishing its government for shooting down 
     the two Cessna planes on February 24, and (2) the legislation 
     communicates clearly to all governments and firms the serious 
     U.S. government disapproval of their economic relations with 
     Cuba. Neither of these accomplishments, however, helps to 
     foster democracy in Cuba.


                           democracy in cuba

       The political consequences within Cuba of Helms-Burton have 
     been either irrelevant or counterproductive in terms of 
     promoting liberty and democracy. For example:
       The Cuban government has persevered in its policy of 
     economic opening as though the legislation did not exist.
       The legislation has provided the Castro government--
     appearing as the defender of the homeland under attack from a 
     powerful neighbor--with an opportunity to rally nationalist 
     support, even from many Cubans who otherwise oppose their 
     government's policies.
       The Helms-Burton legislation, in effect, told the Cuban 
     government that it could repress as it pleased because there 
     is no change left of improving its relations with the United 
     States. The Cuban government has reversed none of the 
     repressive acts that preceded the passage of Helms-Burton.
       Within ten days of President Clinton signing the Helms-
     Burton Act, General Raul Castro launched attacks on various 
     Cuban academic institutions and intellectuals, further 
     chilling public expression and curtailing academic freedom.
       There are some positive political developments in Cuba, but 
     these are the result of the longer-term economic opening and 
     the continuing engagement with Cuba of the governments of 
     Canada, the European Union, and Latin America. They include, 
     for example, the recent authorization of free trade zones, 
     which may enable some firms to contract their own labor 
     rather than relying on the Cuban government to supply it; the 
     loss of full state control over the economy and the 
     flourishing illegal markets; and the government's authorizing 
     some self-employment and farmers' markets. Castro has, in 
     short, felt compelled to allow an economic policy shift 
     despite his distaste for capitalism. Citizens have begun to 
     take control of their economic lives, and the private economy 
     has begun to finance a re-birth of civil society. Former 
     state farms, newly turned into cooperatives, have begun to 
     display greater autonomy, some even dismissing long-time 
     bosses. Some poor Cubans have gained political independence. 
     These democratizing political effects from economic changes 
     are not surprising. The surprise is that U.S. policy toward 
     Cuba is at odds with a long-standing U.S. belief in open 
     markets as a mechanism to open politics.


                       costs to the united states

       President Clinton needs to recognize the costs associated 
     with the Helms-Burton Act. The legislation has already cause 
     friction for the United States in its diplomatic and trade 
     relations with its principal trading partners; these costs 
     would rise if Title III of the act is fully implemented. 
     Liberty and democracy in Cuba have not been advanced by this 
     legislation, and, in some cases, the Castro government has 
     been strengthened and political repression has become more 
     intense. Were Title III to be enacted, U.S. courts would be 
     flooded with lawsuits.
       Waiving Title III would reduce these costs somewhat, and 
     would also give the U.S. government leverage it would 
     otherwise lack--leverage to continue to pressure Cuba in the 
     near future. Uncertainty over the application of title III 
     for another six months would serve as a deterrent to trade 
     with and investment in Cuba. By waiving now the 
     implementation of Title III, the United States would reserve 
     full implementation for a later date, thereby retaining an 
     instrument to pressure the Cuban government on an ongoing 
     basis, an a means to retaliate should the government break 
     international law once again. A waiver would also be 
     consistent with the design of the Helms-Burton Act, which 
     contemplates a calibrated and protracted process of 
     implementation capable of imposing costs on Cuba over a 
     sustained period of time.
       Signing the waiver would reduce the damage to general U.S. 
     interests; may reduce the adverse effects that Helms-Burton 
     has had on Cuba's prospects for political change; and will 
     create leverage for future use consistent with the logic of 
     coercion that underlies the legislation.
                                                                    ____

                                                     July 1, 1996.
     The President,
     The White House,
     Washington, DC.
       Dear Mr. President: As representatives of a broad cross-
     section of the U.S. business community, we urge you to 
     suspend for six months the effective date of Title III of the 
     Cuban Liberty and Democratic Solidarity (LIBERTAD) Act.
       As you have frequently explained to the American people, 
     the United States' ability to benefit from the global economy 
     is dependent on strong, stable, and reliable rules. We 
     believe that these benefits are jeopardized by the enormous 
     friction that will result if Title III is allowed to take 
     effect. Some of our closest allies and most important trading 
     partners are contemplating or have legislated 
     countermeasures. U.S. firms will bear the brunt of these 
     countermeasures. We believe that suspending the effective 
     date would permit you to accomplish the purposes of the law 
     without needlessly jeopardizing U.S. interests.
       Many of our member companies had property in Cuba that was 
     expropriated by the Castro regime. Yet, many of these 
     companies, constituting some of the largest certified 
     claimants, do not believe that Title III brings them closer 
     to a resolution of these claims. To the contrary, Title III 
     complicates the prospect of recovery and threatens to deluge 
     the federal judiciary with hundreds of thousands of lawsuits. 
     These companies, Title III's intended beneficiaries, support 
     our view that Title III should be suspended at this time.
       We would also note that Section 207 of the law requires the 
     Administration to prepare a report giving its estimate of the 
     number and value of such claims. That report is not due until 
     September. A six month suspension from August 1 would give 
     the Administration time to fully assess the impact of Title 
     III and consult further with our allies.
       Finally, we believe that if Title III were to become 
     effective, it would drive a wedge between the United States 
     and our democratic allies that would significantly hinder any 
     future multilateral efforts to encourage democracy in Cuba. 
     For this, and the reasons stated above, we urge you to act in 
     the interest of the United States by suspending the effective 
     date of Title III of the LIBERTAD Act.
           Sincerely,
         The National Foreign Trade Council.
         Organization for International Investment.
         U.S. Chamber of Commerce.
         European-American Chamber of Commerce.
         U.S. Council for International Business.

[[Page E1249]]



          INTRODUCTION OF THE ISTEA INTEGRITY RESTORATION ACT

                                 ______
                                 

                             HON. TOM DeLAY

                                of texas

                    in the house of representatives

                        Wednesday, July 10, 1996

  Mr. DeLAY. Mr. Speaker, today I am introducing a bill that will 
dramatically improve the current system of allocating Federal highway 
funds. But first I would like to pay tribute to my colleague and fellow 
sponsor, Gary Condit, for his leadership on the Democrat side on this 
vital issue. I would also like to recognize the tremendous efforts made 
by my good friend and colleague, John Hostettler, who as cochair of the 
I-69 Mid-Continent Highway Caucus has demonstrated an unparalleled 
commitment to reforming the Highway Fund Program. We would not have 
built up the support that currently exists for this bill without his 
help.
  Although I shared in the excitement of celebrating the 40-year 
anniversary of our Interstate System last month, it saddens me to think 
about how the formulas we use today to distribute Federal highway funds 
to the States have broken down alongside the road. As our Nation speeds 
into the 21st century, those formulas force State departments of 
transportation to steer the development of our Nation's transportation 
system with both hands firmly grasping the rear view mirror.
  To try to remedy this situation, Mr. Condit and I, along with 37 of 
our colleagues on both sides of the aisle, are introducing The ISTEA 
Integrity Restoration Act. It is our hope that this legislation will 
serve as a basis for discussion during the reauthorization process. Our 
bill accomplishes four primary objectives:
  Funds the National Highway System as the key Federal responsibility:
  Simplifies and makes more flexible the Federal Highway Program;
  Updates the antiquated Federal funding distribution formulas; and
  Equitably balances the amount of Federal gas tax dollars collected 
from each State with the amount of funding each State receives back 
from the Federal highway trust fund.
  When enacted, our proposal will at least focus our Nation's surface 
transportation programs on the 21st century. State DOT's can finally 
let go to the rear view mirror and get their hands firmly on the 
steering wheel.


                    focusing federal responsibility

  By maintaining a strong National Highway System program that includes 
the interstate, the ISTEA Integrity Restoration Act recognizes that the 
purposes of the NHS--national defense, interstate and international 
commerce, and the safety and mobility of our people--are the basic 
responsibilities of the Federal Government and should shape the Federal 
role in transportation.


                       simplicity and flexibility

  As America enters the 21st century, and encounters the many 
challenges and opportunities that it will offer, our Nation needs a 
streamlined Federal surface transportation program that will position 
its citizens and economy to respond well to this dynamic new era.
  The ISTEA Integrity Restoration Act consolidates various existing 
Federal highway programs into two simple and focused programs:
  The National Highway System Program [NHS] consolidates the Interstate 
Maintenance Program and the NHS portion of the Bridge Reconstruction 
and Rehabilitation Program.
  The Streamlined Surface Transportation Program [SSTP] blends the 
Congestion Mitigation and Air Quality Improvement Program, 
enhancements, the non-NHS Bridge Program and others into the existing 
Surface Transportation Program to create a new, broader category.
  Our bill continues the eligibility of all current ISTEA activities, 
but gives State and local transportation officials the responsibility 
and authority to decide on what, when, where, and how much to spend to 
meet their diverse transportation needs. Too often State DOT's have a 
surplus in one category and inadequate funding in another because the 
Federal Government has decided it knows better than the State what its 
needs are.
  The ISTEA Integrity Restoration Act will ensure that States--working 
together with their local partners--can respond to their own needs with 
individual solutions, instead of being limited by the current array of 
one-size-fits-all Federal requirements.


                           updating formulas

  Since ISTEA went into effect, with the exception of the Interstate 
Maintenance Program neither a State's population, the size of the 
system of highways and bridges, nor the number of people or tons of 
freight moving across a State's highway has made any difference in the 
share of Federal-aid highway funds it receives.
  Instead, each State's share of these funds today is determined by the 
share of all highway funds that State received between 1987 and 1991. 
And the share of all highway funds a State received between 1987 and 
1991 was determined in part by that State's population in 1980, nearly 
20 years ago. Other factors in determining the 1987-to-1991 share 
include the size of the State's highway system during that period and 
the traffic that system carried.
  Perhaps the most irrelevant factor is the number of rural postal 
delivery miles in the State--a measure the post office quit using more 
than 40 years ago. These formulas penalize States that are home to 
increasing numbers of Americans and dramatically increasing traffic.
  The ISTEA Integrity Restoration Act's system of apportionment is 
simple, free from the obsolete characteristics of the current Federal 
funding system, and is related the real world. It is based on relevant 
factors such as the size of the public highway system in each State, 
the wear and tear on highways caused by the intensity with which a 
State's highway system is used, and the greater transportation needs of 
urban areas.


                          fairness and equity

  The ISTEA Integrity Restoration Act also creates an objective, simple 
methods of distributing highway funds among the States that strikes a 
more equitable balance between the contributions each State's motorists 
and motor carriers pay in the Federal highway trust fund and the funds 
returned to the State from that fund. Our bill establishes the 
following two programs:
  An Equity Program which ensures that all States receive at least a 
95-percent return--including attributable interest and other assets--on 
the payments made to the Federal highway trust fund. Ideally, the NHS 
Program and SSTP would provide more than a 95-percent return for all 
States. If not, the Equity Program would ensure this 95-percent return 
level.
  An Access Program which ensures an adequate level of resources for 
highways in large land area, low-population density States, and in 
States with small land area and low-population density. This would help 
provide the road systems that are urgently needed for national 
mobility, economic connectivity, and national defense.


                               conclusion

  The DeLay/Condit ISTEA Integrity Restoration Act is not a radical 
departure from ISTEA. It builds on traditional partnerships while 
modernizing Federal aid formulas that are inadequate to meet the 
mobility and economic development needs of the next century. This act 
strikes the appropriate balance between the national interests in 
highways, and the rights and responsibilities of each State. I hope 
this Congress will look favorably upon it in the months to come.

                          ____________________