[Congressional Record Volume 143, Number 156 (Saturday, November 8, 1997)]
[Senate]
[Page S12121]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. FAIRCLOTH:
  S. 1458. A bill to restrict the use of the exchange stabilization 
fund; to the Committee on Banking, Housing, and Urban Affairs.


       THE ACCOUNTABILITY FOR INTERNATIONAL BAILOUTS ACT OF 1997

  Mr. FAIRCLOTH. Mr. President, last week, the Treasury Department 
announced that it planned to use $3 billion from the exchange 
stabilization fund for a bailout of Indonesia. This fund was 
established in the 1930's to protect the U.S. dollar. It was not 
designed to be the personal piggy bank of the Secretary of the Treasury 
to bail out other countries whenever he desires.
  The legislation I am introducing would require that, when this fund 
is used to be part of an international bailout in excess of $250 
million, such use would require congressional approval.
  Using this fund for Indonesia is the same procedure that was used to 
bypass the Congress for the bailout of Mexico. At the time we were told 
that the emergency bailout of Mexico was needed because they were our 
neighbor, friend, and that economic instability would spill thousands 
of immigrants into the United States.
  I find no such rationale for Indonesia. In fact, what is occurring is 
that we are seeing a tidal wave of bailouts coming our way from Asia.
  Apparently, the need for the bailouts is greater than the resources 
of the IMF. This is the reason the United States has had to resort to 
taking money from our own reserves to bail out Indonesia.
  In fact, the tidal wave has already started. The Philippines in July 
for $1 billion. Thailand for $16 billion in September. Now comes 
Indonesia for $23 billion in November. The price tag keeps getting 
bigger and we don't know where it is going to stop. The Treasury 
Secretary tried to keep us out of the first two bailouts--but the price 
tag is getting too big--now direct United States dollars are being 
called upon for the Asian bailouts.
  This week Business Week is suggesting the price tag is as high as 
$100 billion. Who is next? South Korea, Malaysia? Perhaps China and 
Japan--whose banks are holding billions in bad loans?
  What is really outrageous about this situation is that these are the 
very same countries that we have been running massive trade deficits 
for years.
  With Thailand we have a $4.6 billion trade deficit. Indonesia a $4 
billion deficit. Philippines a $2 billion deficit. South Korea a $1 
billion trade deficit--and China and Japan are off the charts.
  These are the same countries that have kept out U.S. imports with 
phony trade rules and insider deals. These are the same countries that 
have closed banking systems.
  Indonesia, in particular, was so flush with cash apparently, that 
they could afford to funnel millions in campaign contributions to 
influence U.S. elections--and here we are, the United States, bailing 
them out. Is it any wonder that the average American worker has no 
faith that the Federal Government in Washington cares about him or her.
  We have got people living paycheck to paycheck in this country. We 
don't need to bail out foreign ministers, foreign banks and securities 
firms, and rich Wall Street bankers that lent too much money to 
developing nations.
  The average American has to tell half his life story just to get a 
mortgage loan--and yet Wall Street is loaning billions to these Asian 
countries on the nod of some foreign finance minister.
  Now the bill for the bailout is being handed to the U.S. taxpayer. I 
find it deplorable. The auto plant worker, the secretary, the small 
town banker--all are being asked to turn over their tax dollars so we 
can ship them to Asia.
  I think President Clinton and Robert Rubin need to realize that Wall 
Street and Indonesia did not elect them--the people of the United 
States did, and that is who they own their loyalties to. They need to 
remember that.
  Mr. President, I can promise you that in the next session of 
Congress--this will not continue. I plan to subject every foreign 
bailout dollar to congressional approval. This legislation is the first 
step in that process.
                                 ______