[Congressional Record Volume 144, Number 24 (Tuesday, March 10, 1998)]
[House]
[Pages H949-H956]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          BUDGETARY PRIORITIES

  The SPEAKER pro tempore (Mr. Redmond). Under the Speaker's announced 
policy of January 7, 1997, the gentleman from New York (Mr. Owens) is 
recognized for 60 minutes as the designee of the minority leader.
  Mr. OWENS. Mr. Speaker, I want to talk today about the most important 
subject we have to deal with here, and that is finances, budget and 
appropriations. I want to talk about it in the context of financing two 
societies and the way we deal with two different groups.
  One society I would say is the international banking and investment 
community, which when they approach us for help it seems always to get 
an immediate response of billions of dollars to go into the 
International Monetary Fund or to bail out Mexico. Now we are talking 
about bailing out South Korea, Indonesia, Malaysia, and the immediate 
response of billions and billions of dollars.
  In the other society I would lump all of us together and start with 
my most important concern, and that is schools, financing for schools, 
assistance for schools. School construction at the top of that list, 
but everything related to education.
  There is a double standard with respect to the International Monetary 
Fund and the way it comes to the relief of the international investment 
community, versus the funding that we receive and the kinds of debate 
and deliberation that we have when we are funding education or when we 
are funding other vital domestic programs, or when we are funding 
certain African and Caribbean countries, Caribbean aid and Caribbean 
trade always have a second class status. They are in the same category 
as funding for domestic programs that help poor people.
  We are committed, we say, both parties say that we are really 
concerned about using Federal resources to help people who are 
disadvantaged. Low-income people should be helped as opposed to special 
groups, affirmative action is condemned as helping special groups, and 
the justification for that is condemned.
  I do not agree with that approach where affirmative action is tossed 
aside as not being legitimate, but let us suspend that argument for a 
while and say that opportunity programs which help all poor people are 
certainly desirable, and if both parties, Democrats and Republicans, 
want to join in doing that, let us do that. But as we debate the 
process, let us understand that if we are going to help people who need 
help, the poorest people in our society, if we are going to help the 
children in inner cities' education systems, the schools that need 
repair most, the schools that need new classrooms, the schools that 
need to be wired for the Internet, if we are going to help them, it 
costs money.
  So whenever we have a discussion of money, let us not retreat from 
the necessary resources to provide the opportunities for people who do 
not have opportunities. That is going to be our modus operandi. We are 
going to focus on providing opportunity versus providing corrections 
and adjustments for people who have been discriminated against. Then 
let us really provide the funding.
  Let us deal with the funding for the schools in the inner city 
communities. Let us deal with the funding necessary for school 
construction, necessary for increasing classrooms, so that as we 
increase the number of teachers and we decrease the ratio of children 
to teachers, we have the space to do it. As we pursue those objectives 
that have been outlined by the President for education, let us deal 
with the funding the same way we deal with funding for the 
international investment community.
  We have on the agenda in a few weeks a bill which will call for at 
least $18 billion to be added to the International Monetary Fund. The 
American taxpayers are going to be called upon to add $18 billion to 
the International Monetary Fund.
  Now, there are some complications about one portion of it is $3 
billion and the other portion is $15 billion; it is not really going to 
affect the budget, and it is not really an aid program, it is a loan 
program, and we only contribute to it and other nations contribute; 
there is a whole lot of malarkey which seems to hide the fact that it 
is money out of the Treasury, out of the coffers, which could be going 
to some other purpose, and it goes into the International Monetary 
Fund.
  We are the biggest contributor there. Some people say we are 
approaching a point where almost 50 percent of the funds in the 
International Monetary Fund will be funds from the taxpayers of this 
country.

                              {time}  2045

  So we are going to have that bill on the floor. We have a bill 
tomorrow on the floor related to Africa, the African Growth and 
Opportunity bill, which I think is related to the discussion, too.
  We are going to have, I hope, later on a bill related to the 
Caribbean Basin Initiative NAFTA Parity, how we deal with trade with 
the poor, sparsely populated countries of the Caribbean: These are all 
related.

[[Page H950]]

  I apologize if I do not proceed in a way where you have a simple 
topic, and I move from A to B, and it is an easy straight line, and you 
do not strain your brain to follow me. I think it is necessary for us 
to understand that this is a very complex world, and that a very 
complex process is undertaken when we spend your taxpayers' money.
  I think it is also important to understand every voter, every 
American citizen has a stake in this process. Do not go to sleep. Do 
not let your eyes glaze over when I mention matters like the 
International Monetary Fund. It is your money.
  Do not make the mistake of thinking you have no stake here, and you 
also have no power to help make the decision. Every American voter has 
a great deal of power. As recent elections show, which have been very 
close, the election for the House of Representatives, the election for 
the other body, they are close enough to let you know that every vote 
counts, and what you think and how you vote, how you react to what we 
do here is very important. Your input matters a great deal.
  Democracy plays itself out in a very complex way nowadays, and you 
ought to understand that. You ought to understand that, beyond your 
single vote at the poll, you have another role. Every citizen has a 
role in shaping public opinion, because public opinion drives the 
decision making in this House of Representatives.
  Both parties have very elaborate, very well-structured processes for 
measuring public opinion. It leads to some amazing results because we 
do measure public opinion.
  I never get tired of using the example of the 1996 turnaround on 
education, how the Republicans took over the House of Representatives. 
They had the majority, and they began to wage war on education, and the 
Federal involvement in matters related to education. There was a war 
which was almost like, you know, take no prisoners, you know, a 
scorched earth policy.
  They called for the elimination of the Department of Education. They 
called for cuts in Head Start. They called for dramatic cuts across the 
board in education programs. At one point, the cuts that were being 
proposed added up to about $4 billion.
  Because we had a process whereby we came to the floor, the House of 
Representatives was meeting on a regular basis. In fact, in that first 
year, I think we made history in terms of the hours that were put in on 
this floor where the new majority pressed their Contract with America.
  But the fact that they were pressing their Contract with America gave 
the minority an opportunity to answer. In the process of the minority 
answering, we got a message out to the people, our message on 
education.
  We did not succeed on all matters. They did cut housing programs 
dramatically. They made $22 billion in cuts across the board. So they 
got a whole lot of their program of cuts in; some needed, and many not 
needed, many devastating.
  But on education, our ability to bring the message to the floor, to 
talk to the American people about the proposed cuts in Head Start, the 
proposed cuts in the school lunch program, our ability to make our 
case, shape public opinion, and win the Republicans without the 
measure, the public opinion in their poll and in their focus groups, 
they found that the public definitely was not happy with their program 
to move the Federal Government out of its programs of aid to education.
  Instead of a $4 billion cut, which we resisted and avoided in 1995, 
in 1996, the same majority Republicans proposed a $4 billion increase. 
I use this example because it is one example of the power of public 
opinion and how dramatically things can turn around, ideology 
notwithstanding, ceremony notwithstanding.
  People have their agendas, and they want to cling to them, but 
because this is a democracy, and in the end, the people at the polls 
will determine who has power, the majority parties saw that their power 
was threatened if they continued on their policies and their dogma 
related to Federal aid to education. They turned around. They are out 
now trying to sell themselves, the majority Republicans, as a party for 
education.
  We are in a situation where both parties have strong rhetoric 
programs about education. I say rhetoric, because I do not think either 
party is delivering as it should. But certainly, if we were to follow 
the leadership of President Clinton and the kind of program elaborated 
in the State of the Union address, the Democrats and the people who 
have good common sense would have a program for education that was far 
beyond rhetoric. It would be a reality. Certainly, in the area of 
construction, we need that reality.
  So I am saying it pays for the people with the power. Every American 
out there who votes has power. It pays for you to understand what is 
going on here. I wish that you would join us in spreading the word so 
that other people will understand what is going on here. In order for 
you to do that, you need to go in some processes of circular reasoning, 
and not just follow the simple A to B to C to D approach.
  We need to talk about the coming vote on IMF, which will pull out of 
the Treasury $18 billion; the vote on the Africa Trade bill, which is a 
different kind of situation from what is going to happen with the 
bailouts; money that the IMF will give to Indonesia or to South Korea, 
or to some of the other more developed economies that have had 
tremendous investments made there.
  What does it mean that we are willing to spend so much money in these 
highly developed societies when they go bankrupt as a result of 
corruption usually? Talking about school construction over a 10-year 
period, we may spend 20 to $21 billion. But we are going to rush to 
bail out these corrupt economies of Indonesia and South Korea, et 
cetera, and we are going to pay billions.
  They are talking about $50 billion in Indonesia, which means that 
about half of that will somehow come out of the American taxpayers' 
coffers. South Korea, there is about 40 or $30 billion there. A 
majority of that is going to come out of the American taxpayers' 
coffers.
  So what is it? Will Indonesia's corrupt or bankrupt system now get 
more benefits from the American taxpayers than the school children of 
America who need classroom space? They need safe schools. They need 
wiring for computers. They need computers.
  What does it mean to have those kinds of amounts of money flowing out 
of the American Treasury to these countries?

  I am not against IMF, the International Monetary Fund, the World 
Bank, United Nations. These are all international institutions which I 
support wholeheartedly. I am enthusiastically in favor of using these 
various international institutions to maintain peace and harmony and 
prosperity in the world as far as you can. We should support them.
  But we should not allow them to be used as instruments for swindling 
the taxpayers of this country and for oppressing the people of the 
other nations like Indonesia, oppressing them through billions of 
dollars that are poured in by American banks and investors. Will 
Indonesia get better terms than we get?
  We are talking about a school construction bill now that does not 
have any grant in it. Listen closely. There was a time when we were 
talking about school construction aid from the Federal Government which 
had grants. You give the money to the areas with the greatest need. You 
give some portion of it. Other portions were going to be loans.
  Now we are talking about a school construction initiative which are 
strictly loans, strictly loans. There are no grants. Now we are going 
to have a program for school construction. It is being finalized now, 
the Rangel/Lowey bill, which is the President's bill, also. It is his 
initiative.
  I am grateful for that initiative, because it is far better than 
anything else we have, but it is loans. It is forgiving the interest on 
bonds, I mean for giving a tax credit. Let me just go back. This is 
complicated. I am not sure I have it all straight. But you can follow 
up and investigate, because I think we need to begin to unravel some of 
these financing mechanisms and understand what is going on.
  We are going to have money go to schools through their States and 
their localities as loans. The loans will come from the private sector. 
The private sector will be given a tax credit in lieu

[[Page H951]]

of the interest. Instead of the schools, the local education agencies, 
the States, localities, instead of them having to pay the principal and 
the interest, they will only pay back the principal.
  That is a pretty good deal; no interest loans. But the Federal 
Government will finance that by giving the lenders a tax credit, which 
would equal the amount of interest that they would have charged. That 
sounds like a good deal.
  Over a long period of time, if the payment required of the 
localities, schools, school boards, if that repayment is spread over a 
long period of time, it is an even better deal. I do not know exactly 
how long a period of time it will be spread over.
  I do not know exactly how much of a tax credit the private sector 
will get in terms of the interest rate and what is going to be the 
going rate. You need to know that in order to compare the deal we are 
giving our children, our school systems to the deal that the IMF will 
give to Indonesia and Malaysia and these other countries. What kind of 
deal are they getting?
  In the international marketplace, what kind of interest rates will be 
charged on the loans that they will be given in order to bail them out, 
and over what period of time? Will they really be getting a better 
deal? They may be getting a better deal automatically because their 
deal is going to move fast.
  The schools are required and the education agencies and the State 
education departments are required to do a great deal of preparation 
and show that they have a plan to revamp their schools and to construct 
new schools, and that they are going to come forward with some 
contribution of their own.
  There are a lot of things that are required. Some of the States would 
have the greatest needs; they have the greatest low-income population 
that is suffering; are least concerned about their low-income 
population.
  So if they are required to make any match, any effort, they may 
reject it. If they are required to do this over a period of time, they 
may never get around to submitting the necessary paperwork. They may 
never get around to meeting the necessary conditions.
  So we may have a far worse deal being offered by the Federal 
Government of the United States to our school children of America than 
we are offering to the corrupt bankers and manufacturers and 
politicians of Indonesia.
  Let me just read for a moment what this school constructed initiative 
proposes to do and give you a better idea of how you should be talking 
to other people about the proposal.
  The modernized schools for the 21st Century follows what you heard 
President Clinton propose in the State of the Union address. In order 
for students to learn and to compete in the global economy, schools 
must be well-equipped, and they must be able to accommodate smaller 
class sizes.
  To address these and other critical needs, the President's fiscal 
year 1999 budget will propose Federal tax credits to pay interest on 
nearly $22 billion in bonds to build and renovate public schools. This 
is more than double the assistance proposed last year which covered 
half the interest of an estimated $20 million in bonds.
  The new proposal provides tax credits in lieu of interest payments 
for investors in two types of bonds, school modernization bonds, and 
the expansion of the qualified zone academy bonds created last year.
  These tax credits will cost the Treasury $5 billion over 5 years and 
more than $10 billion over 10 years. In other words, the tax credits 
that will be given to the private investors will amount to $5 billion 
over 5 years and $10 billion over 10 years.
  Over a 10-year period, the private investors are going to loan the 
schools $22 billion, according to this scheme, if it follows through in 
detail. They are going to make $10 billion back on their money. They 
are going to receive $10 billion of tax. It is going to cost the 
Treasury in tax credits. That is a pretty good deal for the private 
sector. How good a deal is it to the school system?

                              {time}  2100

  I am not sure. I serve on the Committee on Economic and Educational 
Opportunities. I have been there for 16 years.
  There was a time when I would not even undertake this kind of 
discussion because I trusted our colleagues on the Committee on Ways 
and Means and the Committee on Appropriations to deal with these 
issues. But the longer I stayed on Education, the more I realized that 
our problems, the way we deal with the funding for schools, the 
resources that schools need, the way we deal with opportunities to 
learn, you cannot complete the process, you cannot get what you need 
unless you focus on where the money is going from the Federal Treasury, 
unless you confront the people on the Committee on Appropriations who 
continually say there is not enough money, unless you confront the 
administration, unless you confront the leadership of the House. They 
insist there is not enough money.
  So in order to deal with the basic concern that I have of improving 
education in America, funding education in America adequately, I have 
to challenge all of the assumptions that are being made about where the 
priorities are, where the money is going.
  I think the American people, the voter out there, have to use his or 
her common sense in the same way. You have to look at the total picture 
so that when your Congressman tells you, we would like to fund schools 
and I am all in favor of education, but we do not have the money for 
school construction, we want to use the surplus that we are about to 
get, use that for Social Security. We are going to use it for some 
other purpose.
  We do not want to begin to go back into deficit financing; if you 
propose to build new schools or to renovate old schools, the problem is 
that you are going to get into big spending. Well, if you are going to 
give the International Monetary Fund $18 billion over a short period of 
time, right away, then is that not big spending also? How can we do 
that big spending, investing in the bailout of corrupt enterprises 
across the ocean, when we cannot deal with a faster and a more thorough 
response to the financing of school construction.
  Let us ask the question and let the experts answer it. At least we 
must be intelligent enough to keep asking the right question.
  School modernization bonds, 19.4 billion and zero interest bonds, 
that is 9.7 billion in 1999 and 9.7 billion in the year 2000, are 
proposed for construction and renovation of public school facilities. 
The Department of the Treasury will allocate the rights to offer these 
special 15-year bonds.
  I asked before, how long a period would they have to pay. Now we 
hear, they will be 15 years, 15-year bonds to States, territories and 
certain school districts that have submitted school construction plans 
to the Secretary of Education. I will not read all of this.
  I will include this document entitled Modernized Schools for the 21st 
Century. It is just a one-page explanation of the school modernization 
program. I think it is a good summary. Instead of reading it, I would 
like to submit it.
  School construction plans would not be accepted unless they meet 
certain requirements. In order to receive a bond allocation, States, 
territories and the eligible 100 school districts will be required to 
submit a plan to the Secretary of Education.
  As I said before, there are two types of plans. One is for 
construction and one is for qualified zone academy bonds, a kind of 
bond that has been created for certain districts where you have high 
poverty rates.
  I think the basic here is that you have 15 years to pay back the 
principal and the Federal Government will pay, will be responsible for 
the interest by giving tax credits to the private sector which issues 
those bonds to the States, territories and certain school districts.
  It may be a better deal than Indonesia will get, but I am not sure. I 
suspect that because Indonesia will get their money so much faster and 
because they are in a situation where the private market has a higher 
interest rate, they will be placed at a great advantage. Those corrupt 
people who have now gone bankrupt will get money at a far lower 
interest rate than they would have, than they would get

[[Page H952]]

if they had to deal in the private sector. It is rewarding corruption 
and incompetence and rewarding it quite rapidly, using American 
taxpayer money to do that.
  My question is, why do we deal with that set of people with such 
generosity? What have they done to earn such generosity while we are so 
slow?
  Here we are in the fourth year of our discussion of an initiative to 
aid school construction. It has been a no-no for so long. In the 
meantime, we have bailed out the savings and loan associations; $500 
billion it cost the taxpayers. And we bailed out Mexico; Mexico was 
nearly bankrupt. And we are now about to bail out certain Asian 
countries, including Indonesia.
  I keep referring to Indonesia because it is a particularly difficult 
situation to swallow. It is hard to accept what is going on in 
Indonesia. Indonesia has an authoritarian regime headed by a man who 
used to be a general, General Suharto. Now President Suharto, who has 
been in office, I think he is going into his fifth term, five-year 
terms, like he has been there 25 years, he runs the country with an 
authoritarian hand. He is in the same category as Saddam Hussein.
  I called Saddam Hussein a sovereign predator. Saddam Hussein has all 
the power, all the authority, there is no democracy. There are no 
institutions free to criticize him or challenge him. He has all the 
power. There is no likelihood that anybody is ever going to be able to 
internally overthrow Saddam Hussein. He uses the power to create a 
military machine, manufacture massive numbers of military weapons and 
maintain a massive army which can be used only for destruction to keep 
the people under control within the country, and to also lead to 
promote ventures like the invasion of Kuwait. If he was not stopped, 
had not been stopped by the U.S., he would be probably invading Saudi 
Arabia and everybody around him who is weak enough to be swallowed up 
by the monster Iraq. So Saddam Hussein is a sovereign predator of a 
certain type.
  General Suharto in Indonesia is not a military threat. He is a 
different kind of sovereign predator. He has all power, too, the 
military, everything under his control. But he is only interested in 
making money for his family and himself and his cronies, and he has 
used his power to enhance his money.
  There was an article in the New York Times this past Sunday, March 8, 
in the Week in Review. It was called Indonesian face off, drawing blood 
without bombs. I was very impressed that the reporter, David Sanger, 
used the same comparison that I had begun to think of when I attended a 
meeting last week.
  I sat in on a meeting of the Congressional Black Caucus leadership 
and the head of the IMF to discuss some of the same issues we are 
talking about here. Why is there a double standard? I am going to talk 
in a few minutes about that double standard, how not only it applies to 
our own concerns domestically, but when the U.S. starts giving aid to 
countries in Africa or aid to countries in the Caribbean region, we do 
not behave the same way we behave with these big sovereign predators 
who have these big economies that require billions and billions of 
dollars.

  I came out of that meeting thinking that, hey, Suharto is very much 
like Saddam Hussein. He is an economic sovereign predator. He sucks in 
investments from all over the world and uses them to enrich his family 
and his cronies and pours them into phony enterprises.
  They have an aircraft manufacturing enterprise where, the whole world 
knows, they are never going to produce decent planes. Nobody is going 
to want to fly the kinds of planes they produce, if they ever get 
around to producing any at all.
  They have an automobile concern headed by one of his sons which is 
supposed to manufacture the international automobile for Indonesia, and 
the automobile is really made in South Korea. They bring it out of the 
factory in Indonesia and they give it a subsidy. If you buy one of 
those automobiles, you do not have to pay the same taxes you pay if you 
buy other automobiles because that is supposed to be the national 
automobile made in that nation.
  The owner of that factory is one of his Suharto's sons. So on and on 
it goes.
  Let us just take a minute, do not let your eyes glaze over, look at 
the Asian bailout through the eyes of my good friend, the gentleman 
from Vermont (Mr. Sanders). He wrote an article for The Hill, which I 
think gives a very good summary of what we are dealing with here. I 
quote from the article that appeared in The Hill newspaper, Wednesday, 
January 28, 1998.
  Again, Mr. Speaker, I will ask that this article be entered in its 
entirety in the Record. I will not have to read it all. I think it is 
pertinent. It is short and to the point. I would like to have it in the 
Record.
  Just quoting parts of the Sanders article, which is entitled ``Asian 
Bailout Is Unfair,'' it is counterproductive, and he goes so far as to 
say it is illegal.

       It is amazing to me that even as President Clinton and 
     Speaker Gingrich tell us we have to cut back on Medicare, 
     Medicaid, veterans' programs, affordable housing and 
     children's needs, and perhaps even Social Security in the 
     near future, that we can provide some $15 to $20 billion in 
     loans to Indonesia, Thailand, the Philippines and South 
     Korea. This action will only increase public cynicism.
       American workers have seen a substantial decline in their 
     standard of living over the last 20 years even as they are 
     working longer hours for lower wages. Twenty-two percent of 
     the children in this country live in poverty. Millions of 
     elderly people cannot afford prescription drugs. Forty 
     million Americans lack health insurance. And there has 
     recently been a significant increase in homelessness and 
     hunger. For those people there is apparently no government 
     assistance available, only the virtues of personal 
     responsibility.

  That is the name of the Welfare Reform Act that plunged so many 
people into a new level of desperation in our society.
  But to continue quoting the gentleman from Vermont (Mr. Sanders) from 
his article that appeared in The Hill on January 28:

       But when foreign governments, some led by corrupt 
     authoritarian billionaires, need assistance, the United 
     States is there in rapid-response fashion to help them out. 
     Where are the risks for the poorly managed governments which 
     have run their economies into bankruptcy? Where is the self-
     regulation of the free enterprise system for the wealthy 
     special interests of Asia that have borrowed more money than 
     they can repay? Where is the magic of the marketplace for the 
     reckless investors and speculators that have made huge 
     profits by investing and lending money in Asia, but now want 
     U.S. taxpayers to bail them out; or corrupt dictators, like 
     President Suharto of Indonesia, whose family is worth $30 to 
     $40 billion and who has invested much of his money abroad in 
     foreign currencies?
       Should the taxpayers of this country really be providing 
     19.3 billion as part of the bailout of these huge profitable 
     banks and their overpaid executives? Is that really the way 
     the system is supposed to work? I do not think so. That is 
     socialism for the rich and the powerful and Darwinian 
     capitalism for the middle class and the poor.
       The International Monetary Fund bailout, as currently 
     designed, is illegal and in violation of the Sanders-Frank 
     amendment of 1994 which requires U.S. representatives to 
     international financial institutions to urge borrowing 
     countries to guarantee internationally recognized workers' 
     rights and to include the status of such rights as an 
     integral part of the institution's policy dialogue with each 
     borrowing country. This has not been done.
       In Indonesia, for example, Muchtar Pakpahan, the head of 
     the Independent Indonesia Labor Welfare Union, is still in 
     jail because of his belief that workers have the right to 
     freely organize and join unions. No one believes that 
     Indonesia guarantees international recognized workers' 
     rights.

  I will conclude my reading of sections from this article at this 
point.
  The point is being made here that we have in Indonesia not only a 
corrupt, bankrupt system, but they are also violating the requirements 
that we have placed on our international monetary institutions. They 
are in violation of the principle that held us together, the majority 
of the Members of Congress, held us together against the free trade 
fast track.
  We had the fast track process being proposed last fall, and in 
November of last year we defeated, we did not defeat it, we let it be 
known that there would not be enough votes for it on the floor. So fast 
track trade processes did not get okayed or approved by this Congress. 
It never got to first base in this House of Representatives. It was not 
put on the floor because they knew it would be defeated.
  One reason we had solidarity there was that so many of us agreed that 
the effort that we had been waging to get standards placed into the 
international trade agreements, which require governments to recognize 
unions and to permit union organizing, were not

[[Page H953]]

going to go forward, that we would not have a chance to do that on the 
fast track.

                              {time}  2115

  We also had concerns about environmental standards, and that is not 
going to be done. I hope that negotiation process is going on and that 
we will not have a replay of the fast track drama; that whatever new 
trade bills come back to this floor will have that requirement in them.
  We have a bill that is coming to the floor tomorrow, the Africa 
Growth and Trade Act, which has provisions in it to deal with the 
problem of the right of unions to organize. No nation like Nigeria in 
Africa would be allowed to participate in this Africa Growth and Trade 
bill since it does not have that kind of freedom for labor unions. We 
have written it into the bill.
  So we have a situation here where the kind of violations and the kind 
of abuses that have been permitted in Indonesia and some other Asian 
countries while they enjoy the benefits of the International Monetary 
Fund, will not be allowed in this process of trying to help Africa.
  Here again I want to talk about the double standard. Africa has not 
received any substantial aid from the United States. I think if you add 
all of the aid of all kinds that flow into Africa from the United 
States we have about a billion dollars. A billion dollars in aid the 
last year we have records for flowed from the United States to Africa. 
The huge continent of Africa got a billion dollars in aid. The 
Caribbean countries, the little islands, got far less than that. When 
we lump them all together they got far less than that.
  So there is an issue of a standard of operation with these needy 
countries, disadvantaged countries, countries that are just getting 
started. And by the way, these are nations that will provide far 
greater markets for our products than our Asian corrupted partners. The 
balance of trade with some of these countries that we are going to be 
bailing out is already skewed so that we are importing far more from 
them than they are buying from us.
  So we are not only helping corrupt investors and corrupt institutions 
in these Asian countries, certainly like in Indonesia, but we are also 
financing our competitors. American workers are being jeopardized and 
displaced by the cheap labor markets in the same countries we are now 
going to bail out.
  The African nations are not among these competitors. We have a very 
tiny trade with Africa. And by the way, the trade with Africa is in 
surplus in the other direction: $6 billion in the last period that is 
recorded. That is small compared to what we do with Japan and China and 
Indonesia, et cetera. Six billion dollars. But it is on our side. We 
sold them products worth $6 billion. The amount of trade coming the 
other way is minuscule, the amount that they have sold to us.
  So the Africa Growth and Trade bill will be opening up a great new 
market. It will be establishing a dialogue, and mostly it is about 
dialogue. There is very little money in that bill that is going to be 
on the floor tomorrow, and it is important that people understand that. 
At a time when we are considering International Monetary Fund bailouts 
for these overheated developing economies in Asia, we should not mix it 
up and get confused and say we do not want any trade bills.
  The Africa trade bill is an example of a great need that will benefit 
this country ultimately, because it opens and builds new markets. It is 
a great process of trade that has not gone forward which is to our 
advantage, and that will be opened up by the Africa Growth and Trade 
bill.
  But I hear complaints. There is tiny amounts of money that may be 
involved there in terms of trade in textiles, so we have a lot of 
problems with people saying we do not want any more competition for our 
textile industry. And certainly I have friends in the labor movement I 
have worked with for years on this problem of competition with our 
industries, textile or otherwise. The amount of textiles imported from 
Africa at this point is .6 percent. Less than 1 percent. All of the 
countries of Africa combined, less than .6 percent.
  I have a chart here that shows that on the other hand the amount that 
is exported from places like China, which by the way has no 
environmental standards and they do not allow free organization of 
labor unions, here is a chart called ``Comparison of U.S. Textile 
Imports From Major Suppliers and from Sub-Saharan Africa.'' Total 
imports, $19 billion.
  And they give some of the break-out from the various countries that 
enjoy a percentage of that support. At the top, of course, is Mexico. 
Mexico has 11.5 percent of the imports of textiles. We import from 
Mexico, out of our total, and they get a big share, 11.5 percent. They 
are right across the border, and of course NAFTA has made it possible 
for them to enjoy great advantages. So they are the biggest importer.
  Second to Mexico is the faraway country of China. The faraway country 
of China that does not allow its unions to organize, is not involved 
with environmental standards, and they get 8.6 percent, 8.6 percent of 
the total in our textile imports.
  Taiwan, 6.3 percent. Hong Kong, 4.7 percent almost. India, South 
Korea, Thailand. The standard of living in countries like Hong Kong, 
Taiwan, and South Korea is quite high versus the standard of living in 
sub-Saharan Africa, where the per capita income is $383 per year. I am 
sorry, the per capita income of Taiwan, for example, is $12,000 a year. 
Per capita income in Hong Kong is $21,000. Per capita income. That may 
be pretty close to our per capita income here when we break it out in 
terms of wage earners. South Korea is $8,000; Taiwan $2,400. But 
Africa's per capita income, I said $383. No, it is $460.
  So I am saying, again, two societies, two approaches. When we come to 
approaching Africa, we have been very mean, very stingy. We do not have 
any real trade going. Only .6 percent in textiles. And I assure my 
colleagues that overall imports from Africa are not much better, but we 
want to apply very stringent standards to Africa now. But we did not 
apply those to China. China is getting already a big share, and we did 
not apply those standards to China. We did not apply those standards to 
Mexico.
  People have approached me and said, ``I am concerned. If we let 
Africa have a greater percentage, and we import more textiles from 
Africa, will that not throw American workers out of jobs?'' And my 
answer is I doubt it seriously. I think if there are any people thrown 
out of jobs, they will be in Hong Kong or China or Taiwan, because they 
have the lion's share. They got that way because they had cheaper labor 
and they could undercut the labor cost in the United States. They do 
not have cheaper labor than Africa.
  So if we want the market processes to continue to work, Africa will 
take some of the textile business away from these countries that have 
now prospered. They have higher labor costs and they will be the ones 
who lose. We have already lost it. We have already lost these 
tremendous percentages to China, to Mexico, to Taiwan, to Hong Kong and 
to South Korea. They are doing very well. Now, if we allow 
international monetary forces to work without any interference, Africa 
would take some of the textile business away from these countries and 
not from the United States.
  Mr. Speaker, I wish to include for the Record at this point the chart 
labeled ``Comparison of U.S. Textile Imports From Major Suppliers and 
From Sub-Saharan Africa.''

  COMPARISON OF U.S. TEXTILE IMPORTS FROM MAJOR SUPPLIERS AND FROM SUB-
                             SAHARAN AFRICA
------------------------------------------------------------------------
                                                       Total
                                1996 MFA    Percent  1996 U.S.  1994 GNP
                               Fibers (in   of 1996   textile      per
                              millions of    total    imports    capita
                                 square     imports     (in      income
                                meters)              millions)
------------------------------------------------------------------------
Total Imports...............   19,070.766    100.00    $45,932    $4,470
Mexico......................    2,207.063     11.57      4,232     4,180
China.......................    1,644.861      8.63      4,892       530
Taiwan......................    1,203.465      6.31      2,733    12,100
Hong Kong...................      891.950      4.68      4,031    21,650
India.......................      869.682      4.56      1,737       320
S. Korea....................      729.189      3.82      2,049     8,260
Thailand....................      631.137      3.31      1,402     2,410
Sub-Saharan Africa..........      127.413      0.67        383       460
------------------------------------------------------------------------
Source: 1997 Major Shippers Report and World Bank.

  Mr. Speaker, I want to conclude by making some comparisons here. A 
billion dollars is a lot of money, and we should never minimize the 
fact that a billion dollars from the taxpayers is to be treasured and a 
great value should be placed upon it. And when we talk about $18 
billion going into the International Monetary Fund, we already

[[Page H954]]

have a lot of money going into the International Monetary Fund. We have 
been pouring a lot of money in.
  So the big question to ask is: If it is not a giveaway, if it is not 
aid but loans, after it has existed for so long, why do we continually 
have to put money in? Why does the return of the principal and the 
return of interest on the principal not keep the fund at a point where 
we do not need to keep pouring money in? We have been pouring money 
into the International Monetary Fund in ever greater amendments.
  A billion dollars. What does a billion dollars do? Let us take my 
concern about schools in New York City, my concerns about school 
construction there, and narrow it down to just one part of the school 
construction problem. We have 300 schools that burn coal in their 
furnaces in 1998, in America, in the big City of New York, which has 
all kinds of pollution problems.
  And the Daily News, the second biggest newspaper in the city, has 
recently completed a series of articles on asthma and the high asthma 
rate in our city. We have the highest in the country. Asthma is the 
number one killer of children in our city, and yet we have 300 coal-
burning furnaces. And these coal-burning furnaces, it is said to 
convert them would cost us $1.3 million. Like everything in New York, I 
fear the cost is rather inflated. But to take one coal-burning furnace 
and change it into an oil-burning or gas-burning furnace they say will 
cost $1.3 million.
  Well, if we take $1 billion out of the $18 billion we are going to 
give away to Indonesia, what could we do with it in this situation? 
Simple arithmetic would say that we could take care of the problem of 
all the coal-burning furnaces, and that will cost us a little more than 
$300 million, probably about $330 million. For $330 million we could 
take care of all the coal-burning furnaces in New York City, have the 
kids in a situation where they are not officially being victimized by 
their own city, by their own school system, where the asthma problem is 
not being aggravated by public negligence. Wipe it out. $330 million 
will do it.
  So we still have $670 million left over from that billion. With that 
we could buy a large number of computers and we could wire schools, and 
we could go on to begin the process of building and repairing our 
schools.
  A billion dollars is a great deal of money. When we look at the 
appropriations for the International Monetary Fund, we say, oh, it is 
no problem. Eighteen billion dollars more into the International 
Monetary Fund is no problem. But when we look at appropriations for our 
own domestic concerns, like coal-burning furnaces and school 
construction, it becomes a lot of money. Big spenders, we are called.
  Right now we have a program called the empowerment zones. We have 10 
empowerment zones that are going now; six urban, three rural, and one 
Indian reservation; and 100 enterprise communities. I asked my staff to 
just check how much have we spent. These programs have been going now 
for 2 years. How much have we spent on all these enterprise zones and 
the empowerment zones? And the estimate is that in 2 years these zones 
that are spread across several cities and rural areas, and these 
enterprise communities, we have spent a billion dollars in social 
services grants from the Health and Human Services.
  These programs are comprehensive, and all the departments of 
government contribute, so it is estimated that we have spent about a 
billion dollars in 2 years. A billion. And we have $2.5 billion in 
anticipated tax expenditures of revenue to the Federal Government 
because of the tax breaks.
  The other part of the enterprise zone and empowerment program is we 
give tax breaks to industries that invest in these communities. A 
combination of $3.5 billion for our number one economic recovery 
program for cities and our rural areas.

                              {time}  2130

  $3.5 billion over a 2-year period. And we are going to drop $18 
billion into the International Monetary Fund in one action. Just 
compare what a billion dollars is worth, and you will see that there 
are two sets of standards. When we are dealing with domestic concerns, 
like school construction, enterprise zones or any other activity of our 
Federal Government designed to help poor people, we are nickel and 
diming, relatively speaking, we are nickel and diming the process.
  As I conclude on schools, the New York City report on the performance 
of the public schools in reading and math, the elementary schools, came 
out in the Sunday New York Times. And I want to congratulate the New 
York Times for not only in its Sunday paper giving a spread which 
included every school that was involved and every local school 
district, they had a big spread that covered two pages and is quite 
informative.
  They went even further, and they put into this process a new 
calculation of their own, a new way of analyzing the statistics. They 
did something called reading performance, where they took the reading 
scores of the children in each school; and I will read what they did 
here.
  Under the category called, ``Reading Performance,'' they list the 
scores, they list the schools, they list the student-teacher ratio, and 
they list the income of that school. Income is measured in terms of the 
number of children who qualify for the Federal School Lunch Program. 
The percentage of children who qualify for the Federal School Lunch 
Program, well, they do it in terms of children who do not qualify. They 
get a figure based on the number of children who do not qualify.
  If 6.6 percent of the children in the school do not qualify for the 
school lunch program, they know that 93 percent do qualify. So the low-
income population they can calculate by looking at the fact that the 
high-income, those who are above the level where they qualify for 
school lunch programs, are low. So they give the math score and they 
give the reading score, and they give the percent of changes in reading 
and they rank the whole city, and they give you the reading performance 
indication.
  The reading performance is a measure calculated by the New York Times 
comparing schools to similar schools after taking into account student 
family income and English speaking ability as reported by the State. A 
score of 5 is the highest, and 1 is the lowest. And they show you that, 
and very informative things happen.
  There are those of us who say that there is a relationship between 
the income of a family and the performance of students at school, and 
we have said that for years. But the New York Times reading performance 
index shows it quite clearly. We can just look and we will see clearly 
that there is a pattern where the incomes were lowest.
  Where the incomes were lowest, we had the greatest problems in 
reading except for a few exceptions. And I think where there are 
exceptions, the chancellor of the school system, Rudy Crew, and of the 
other school authorities, as well as other school boards, everybody 
ought to take a look at the fact that are some low-income schools, a 
few, which perform very well. The income was not an indicator of their 
reading performance. You know, they read very well. Something is 
happening at that school which is unusual. But, by and large, 90 
percent of the schools follow the pattern of the lowest incomes and the 
lowest scores. And in the overall districts, we have the same pattern.
  Except, I think the people of Staten Island better take a hard look 
at their schools. Because it was very interesting that Staten Island, 
that section of New York City which has strived to secede from the city 
recently, they voted they wanted to get out of the city and secede, 
mostly middle-income homeowners' favorite place to live, their overall 
average in terms of income is very interesting. They are highest in the 
city. They have 58.9 percent of the children who do not qualify for 
school lunches. That is the highest in the city. And yet their reading 
level is nothing impressive.
  And when you compare their reading levels with their income, they are 
the lowest in the State. The City of Staten Island is taking a hard 
look at the fact that they have a relatively prosperous population, 
people with decent incomes and yet they are not performing well at all. 
That is the only exception to the rule in terms of district.
  Other districts follow the pattern. If the overall district had a 
very low income level, the percentage of students with low incomes, the 
district's reading levels were also quite low except

[[Page H955]]

for a few exceptions here and there. And I say this in closing because 
I want to reemphasize the fact that opportunity programs that we have 
talked about in the poorest parts of our population deserving help from 
the government, our neglect of following our rhetoric with principle 
leads to situations where these concentrations of poor students are not 
getting the kind of help that they need.
  In an area like District 23 in Brownsville, one of the lowest income 
levels on these charts, you have the highest number of teachers who are 
not certified teachers. It is a place where a great deal of effort is 
required to maintain certified teachers. It is a place where you will 
find other kinds of problems related to lack of resources that are 
needed. There is a correlation in that which should be taken into 
consideration, and it is not enough for the State to make tours of 
schools, do evaluations and ratings and decide to take low-performance 
schools and put them into special programs.
  The problem is poverty, and the problem has to be addressed. We 
cannot address the problem of poverty if we are going to continue with 
this two-society system. One approach to any kind of activity which 
relates to international financing where bankers have invested money, 
we will jump in with billions of dollars to bail it out starting with 
the situation in this country, the Mexican bailout, and now the bailout 
of Asian countries. We rush with our resources and money to put it into 
situations which is going to make the investments of bankers good, 
people who have loaned money to these enterprises in these countries at 
high interest rates. They got high interest rates. That is why they 
made the loans.
  So they profited from high interest rates, and now the taxpayers are 
going to bail out the country so they get their principal back also. So 
it is international socialism, giving away large amounts of money in 
situations which promote people who are rich already, and corrupt, and 
have created a situation in the free market that they ought to be 
allowed with free market resources.
  On the other hand, we apply to Africa and to Caribbean nations a 
different standard, and we give them nickels and dimes and not much 
help. Just as we approach situations in our own domestic economy, and 
when we deal with vital domestic programs, we take a nickel-and-dime 
approach. This was an approach taken by a reporter I mentioned last 
week. The Eisenhower Foundation came out with a report which updated 
the current commission record, and they had in their report a list of 
investments that ought to be made by the Federal Government.

  And I will leave my colleagues with this, investments in school 
reform should be $15 billion a year. They said we should be investing 
$15 billion a year just in school reform, not construction, just reform 
and other kinds of activities in schools. We should be investing $7 
billion a year in Head Start. And they had many other programs that 
support poor communities, job training, economic development et cetera, 
and they come out with a figure of $56 billion a year that they think 
we should be spending. That would be on the order of an operation 
bailout. We would be doing for ourselves the kind of things we are so 
readily willing to do in our own Nation if we would spend in our own 
economy and own schools, invest in our own institutions to the degree 
it is needed.
  Modern, complicated societies require great investments in order to 
be able to survive and to be productive and for this Nation to continue 
to lead the world as it does. We are making a great mistake when we 
pour our resources into foreign enterprises blindly in order to bail 
out the private sector while we are not willing to make comparable 
investments in our own institutions.
  Mr. Speaker, I include for the Record the following:

                [The Hill, Wednesday, January 28, 1998]

         Asian Bailout is Unfair, Counterproductive and Illegal

                       (By Rep. Bernard Sanders)

       President Clinton's proposal for the Asian bailout, which 
     is supported by Speaker Newt Gingrich (R-Ga.) and a number of 
     Republicans, is an insult to American taxpayers, 
     counterproductive for movement toward a stable world economy, 
     and illegal.
       It is amazing to me that even as President Clinton and 
     Speaker Gingrich tell us we have to cut back on Medicare, 
     Medicaid, veterans' programs, affordable housing and 
     children's needs--and perhaps even Social Security in the 
     near future--that we can provide some $15-to-$20 billion in 
     loans to Indonesia, Thailand, the Philippines and South 
     Korea. This action will only increase public cynicism.
       American workers have seen a substantial decline in their 
     standard of living over the last 20 years, even as they are 
     working longer hours for lower wages. Twenty-two percent of 
     the children in this country live in poverty, millions of 
     elderly people cannot afford prescription drugs, 40 million 
     Americans lack health insurance, and there has recently been 
     a significant increase in homelessness and hunger. For these 
     people, apparently, there is no government assistance 
     available, only the virtues of ``personal responsibility.''
       But when foreign governments, some led by corrupt 
     authoritarian billionaires, need assistance, the United 
     States is there in rapid response fashion to help them out. 
     Where are the ``risks'' for the poorly managed governments 
     which have run their economies into bankruptcy? Where is the 
     ``self-regulation'' of the free enterprise system for the 
     wealthy special-interests in Asia that have borrowed more 
     money than they can repay?
       And where is the ``magic of the marketplace'' for the 
     reckless investors and speculators that have made huge 
     profits by investing and lending money in Asia, but now want 
     U.S. taxpayers to bail them out? Or the corrupt dictators 
     like President Suharto of Indonesia, whose family is worth 
     $30-to-$40 billion and who has invested much of his money 
     abroad in foreign currencies?
       Should the taxpayers of this country really be providing 
     $19.3 billion as part of the bailout to these huge, 
     profitable banks and their overpaid executives? Is that 
     really the way the system is supposed to work? I don't think 
     so. That's socialism for the rich and the powerful, and 
     Darwinian capitalism for the middle-class and the poor.
       The International Monetary Fund (IMF) bailouts, as 
     currently designed, are illegal and in violation of the 
     Sanders-Frank Amendment of 1994, which requires U.S. 
     representatives to international financial institutions to 
     urge borrowing countries to guarantee internationally 
     recognized workers' rights, and to include the status of such 
     rights as an integral part of the institution's policy 
     dialogue with each borrowing country.
       This has not been done. In Indonesia, for example, Muchtar 
     Pakpahan, the head of the independent Indonesia Labor Welfare 
     Union, is still in jail because of his belief that workers 
     have the right to freely organize and join unions. No one 
     believes that Indonesia guarantees internationally recognized 
     worker rights.
       Will the IMF bailout improve the lives of people who are 
     affected? Experts as diverse as former Republican Secretary 
     of the Treasury George Shultz, Jim Sheehan of the 
     conservative Competitive Enterprise Institute, Ralph Nader 
     and the Friends of the Earth agree that it won't.
       Finally, what does this bailout say about our position in 
     the international economy? How does this crisis relate to our 
     absurd trade policies which, this year, will run up a record-
     breaking $200 billion trade deficit as American corporations 
     continue to invest billions in low-wage Third World 
     countries, while laying off workers here?
       The president and Congress must move to resolve this crisis 
     and make certain that similar crises do not arise again. Let 
     me suggest a few steps that should be taken as soon as 
     possible:
       We must not repeat the errors of the past, learning nothing 
     from the savings and loan fiasco and the Mexican bailout. 
     Instead, we must use this crisis to fully debate the proper 
     role for the United States in the global economy, and all 
     aspects of IMF policy;
       Enforce the law and not support any IMF bailout which does 
     not guarantee internationally recognized worker rights;
       Make certain that the financial institutions responsible 
     for the crisis pay for the bailout, and not the taxpayers of 
     the United States or the workers of Asia;
       Implement a tax in the U.S. on international transactions 
     on capital that creates an insurance fund for bailouts; and
       Make certain that the IMF does not implement a one-size-
     fits-all ``austerity program,'' which further impoverishes 
     the workers of Asia, and makes their exports into the United 
     States even cheaper, potentially costing us millions of jobs.
       Finally, we must pass legislation prohibiting the president 
     from expending any more than $250 million from the Exchange 
     Stabilization Fund without the approval of Congress.
                                  ____


                 Modernize Schools for the 21st Century

       In order for students to learn and to compete in the global 
     economy, schools must be well-equipped and they must be able 
     to accommodate smaller class sizes. To address these and 
     other critical needs, the President's FY 99 Budget will 
     propose Federal tax credits to pay interest on nearly $22 
     billion in bonds to build and renovate public schools. This 
     is more than double the assistance proposed last year, which 
     covered half the interest on an estimated $20 billion in 
     bonds. The new proposal provides tax credits in lieu of 
     interest payments for investors in two types of bonds: School 
     Modernization

[[Page H956]]

     Bonds (a new proposal), and expansion of the Qualified Zone 
     Academy Bonds (created last year). These tax credits will 
     cost the Treasury $5 billion over 5 years, and more than $10 
     billion over ten years.


                       school modernization bonds

       $19.4 billion in zero-interst bonds ($9.7 billion in 1999 
     and $9.7 billion in 2000) is proposed for construction and 
     renovation of public school facilities. The Department of the 
     Treasury would allocate the rights to offer these special 15-
     year bonds to States, territories, and certain school 
     districts that have submitted school construction plans to 
     the Secretary of Education.
       Half of the bond authority would be allocated to the 100 
     school districts with the largest number of low-income 
     children, in proportion to the number of such children served 
     (the Title I Basic Grant formula), to provide assistance in 
     accordance with each school district's plan.
       The other half would be allocated to States and territories 
     to provide to school districts in need of assistance in 
     accordance with each State's plan. The bond authority would 
     be allocated according to the State's proportion of low-
     income children (Title I Basic Grant formula), except that 
     children in the 100 school districts (above) would not be 
     included in the count.
       School Construction Plans: In order to receive a bond 
     allocation, States, territories, and the eligible 100 school 
     districts would be required to submit a plan to the Secretary 
     of Education. The plans would (1) demonstrate that a 
     comprehensive survey has been undertaken of the construction 
     and renovation needs in the jurisdiction, including meeting 
     requirements for access by persons with disabilities, and (2) 
     describe how the jurisdiction will ensure that the bond funds 
     are used for the purposes intended by this proposal, 
     including the requirement that they will supplement, not 
     supplant, amounts that would have been spent on construction 
     and renovation in the absence of these bonds. State plans 
     would also describe how they will ensure that localities with 
     the greatest need--as demonstrated by inadequate facilities 
     coupled with a low level of resources to meet the needs--
     would be served.


                      qualified zone academy bonds

       This program, created by the Taxpayer Relief Act of 1997, 
     provides a tax credit to pay interest on bonds for a variety 
     of expenses (including building renovation) related to 
     certain public school-business partnerships. The FY 99 Budget 
     would expand these bonds to cover school construction and 
     would increase and extend the bond authority by $2.4 billion 
     (an additional $1 billion, to $1.4 billion, in 1999, and $1.4 
     billion in 2000). This bond authority is allocated to States 
     on the basis of their respective populations of individuals 
     with incomes below the poverty line.

                          ____________________