[Congressional Record Volume 148, Number 81 (Tuesday, June 18, 2002)]
[House]
[Pages H3659-H3666]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
TRADE, TRADE POLICY IN THE UNITED STATES, AND AMERICA'S RECORD TRADE
DEFICITS
The SPEAKER pro tempore. Under the Speaker's announced policy of
January 3, 2001, the gentleman from Oregon (Mr. DeFazio) is recognized
for 60 minutes.
Mr. DeFAZIO. Mr. Speaker, I scheduled this time to come to the floor
tonight and talk about the issue of trade, trade policy in the United
States, and our record trade deficits, the impact on the economy, and
in the future.
Before I engage in that, I could not resist. I had to sit through a
good part of the previous hour, and I would like to comment upon a
number of the points made by the gentlemen before me on the issue of
prescription drug coverage.
First off, they said it has a fiscally huge cost, the Democratic
alternative. It would cost $800 billion. Guess what: That is the cost
of the estate tax which they tried to permanently repeal last week over
10 years, $800 billion. So we could have a trade-off. We could have a
very meaningful, substantial prescription drug benefit for every
American eligible for Medicare, or we could give back $800 billion to
the wealthiest of the wealthy in this country.
Even if we adopted the alternative, which I supported, which would
have given a $6 million exemption, I think $6 million is quite enough
tax free, we could have saved half that money, $400 billion. So if we
matched it to the $350 billion, we could again have had a more generous
plan.
Mr. Speaker, also, there is a glaring deficiency. In fact, I am a bit
critical of the Democrat proposal, also, because neither bill takes on
the immensely powerful and wealthy pharmaceutical industry head on.
Americans are paying 40 to 80 percent more than citizens of other
highly industrialized, developed nations. Our neighbors in Canada pay
about half what we do for drugs manufactured in the U.S. by U.S. firms;
Mexico even less. The European countries all pay less.
{time} 1815
The Republican bill would do nothing to control these outrageous
costs, which means we are not going to get much of a benefit. If we do
not crank down the obvious costs of pharmaceuticals, we are not going
to get much of a benefit. We could spend the entire Federal budget
within a few years, and we would not get much of a benefit. We have got
to do something about the runaway pharmaceutical costs, but I do not
think there is a lot of will on that side. Tomorrow night's $25 million
Washington, D.C. fundraiser for the Republicans in the House and the
Senate, the lead fundraiser is the head of GlaxoSmithKline, a large
pharmaceutical company, one of the largest in the world, J.P. Garnier
would not want to upset him too much when he is out raising money.
Now they say, well, the rising costs are because of advances in new
drugs. Actually, if one lifts up the covers and looks underneath where
they are spending their money, the pharmaceutical companies are
spending more money on their CEO salaries, administration, and
advertising than they are on research. In fact, all their blockbuster
drugs for profits are makeovers of drugs they invented 20 years ago.
Clarinex, that is Claritin with a tiny molecular change so they can
continue it under patent, so they can continue to charge 10 times as
much per dose as the one that finally, after fighting in court, after
trying to buy up other pharmaceutical companies that are going to
provide a generic, after trying to get legislation through Congress,
knock through a number of bills to continue their monopoly on Claritin,
[[Page H3660]]
they finally developed another dodge which is get the doctors to
prescribe this new drug which is not any different but has a different
name and they can charge ten times as much for it. So if we do not deal
with the costs, we cannot have a meaningful prescription drug benefit.
But I see no will on that side of the aisle to deal with that issue.
Back to trade, let us talk a bit about trade. Later this week perhaps
or next week, the House will take up at least perhaps an extraordinary
proposal by the gentleman from California (Mr. Thomas) of the Committee
on Ways and Means to adopt an arcane procedure called a self-executing
rule on a motion to go to conference. Why is that? Because they are
trying to help push through this fast track bill for President Bush. I
opposed fast track authority for President Bush the First. I opposed
fast track authority for President Clinton, and I oppose fast track
authority for President Bush today. This is a bad idea. The United
States Congress gives up all of its authority to amend, modify, or
meaningfully review these trade agreements and instead says they will
be adopted with an up or down vote only, no amendments allowed. Why
would we do that? We would do that because these are really bad deals
for the American people. That is why we would do that.
The WTO, which I opposed, the GATT, that was a really bad deal for
the American people, done through a fast track process. The NAFTA,
total disaster. We are running over a $40 billion trade deficit with
Mexico. That was done on one of these fast track deals. But what they
said was, oh, Congressman, you cannot mean you want to vote to amend
that. Well, in fact, first of all, you cannot vote to amend it, and,
why, if you voted to amend it, the other countries who are agreeing to
this might get upset.
Come on. They want access to our markets. Reasonable amendments to
deal with labor and the environment, consumers, those things would not
be a problem in these trade agreements, but they want to keep those
things out because the real people who dictate the trade agreements are
multinational corporations who have had a direct pipeline to the last
four Presidents of the United States, Reagan, Bush I, Clinton, and Bush
II. They are virtually identical in their position on trade.
Is our trade policy working so well that we should rubber-stamp it
yet one more time? That is what this House of Representatives will be
asked to do, rubber-stamp one more round of fast track for the free
trade of the Americas. Let us bring in all of the nations into the
western hemisphere, into this wonderful construct that we have under
NAFTA. Would that not be peachy? Maybe we can get cheaper labor in
Bolivia than we can in Mexico because some people are demanding as much
as a dollar an hour down there in Mexico now, Bolivia and Argentina.
They might be more desperate. Maybe they could take more American jobs
at a lower price than the Mexicans.
I am about to be interrupted again, but I will certainly be happy to
yield or suspend for the purposes of a unanimous consent request on the
part of the gentleman from Louisiana (Mr. Tauzin).
Auction Reform Act of 2002
Mr. TAUZIN. Mr. Speaker, I ask unanimous consent to take from the
Speaker's table the bill (H.R. 4560) to eliminate the deadlines for
spectrum auctions of spectrum previously allocated to television
broadcasting, with a Senate amendment thereto, and concur in the Senate
amendment.
The Clerk read the title of the bill.
The Clerk read the Senate amendment, as follows:
Senate amendment:
Strike out all after the enacting clause and insert:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Auction Reform Act of
2002''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) Circumstances in the telecommunications market have
changed dramatically since the auctioning of spectrum in the
700 megahertz band was originally mandated by Congress in
1997, raising serious questions as to whether the original
deadlines, or the subsequent revision of the deadlines, are
consistent with sound telecommunications policy and spectrum
management principles.
(2) No comprehensive plan yet exists for allocating
additional spectrum for third-generation wireless and other
advanced communications services. The Federal Communications
Commission should have the flexibility to auction frequencies
in the 700 megahertz band for such purposes.
(3) The study being conducted by the National
Telecommunications and Information Administration in
consultation with the Department of Defense to determine
whether the Department of Defense can share or relinquish
additional spectrum for third generation wireless and other
advanced communications services will not be completed until
after the June 19th auction date for the upper 700 megahertz
band, and long after the applications must be filed to
participate in the auction, thereby creating further
uncertainty as to whether the frequencies in the 700
megahertz band will be put to their highest and best use for
the benefit of consumers.
(4) The Federal Communications Commission is also in the
process of determining how to resolve the interference
problems that exist in the 800 megahertz band, especially for
public safety. One option being considered for the 800
megahertz band would involve the 700 megahertz band. The
Commission should not hold the 700 megahertz auction before
the 800 megahertz interference issues are resolved or a
tenable plan has been conceived.
(5) The 700 megahertz band is currently occupied by
television broadcasters, and will be so until the transfer to
digital television is completed. This situation creates a
tremendous amount of uncertainty concerning when the spectrum
will be available and reduces the value placed on the
spectrum by potential bidders. The encumbrance of the 700
megahertz band reduces both the amount of money that the
auction would be likely to produce and the probability that
the spectrum would be purchased by the entities that valued
the spectrum the most and would put the spectrum to its most
productive use.
(6) The Commission's rules governing voluntary mechanisms
for vacating the 700 megahertz band by broadcast stations--
(A) produced no certainty that the band would be available
for advanced mobile communications services, public safety
operations, or other wireless services any earlier than the
existing statutory framework provides; and
(B) should advance the transition of digital television and
must not result in the unjust enrichment of any incumbent
licensee.
SEC. 3. ELIMINATION OF STATUTORY DEADLINES FOR SPECTRUM
AUCTIONS.
(a) FCC To Determine Timing of Auctions.--Section 309(j) of
the Communications Act of 1934 (47 U.S.C. 309(j)) is amended
by adding at the end the following new paragraph:
``(15) Commission to determine timing of auctions.--
``(A) Commission authority.--Subject to the provisions of
this subsection (including paragraph (11)), but
notwithstanding any other provision of law, the Commission
shall determine the timing of and deadlines for the conduct
of competitive bidding under this subsection, including the
timing of and deadlines for qualifying for bidding;
conducting auctions; collecting, depositing, and reporting
revenues; and completing licensing processes and assigning
licenses.
``(B) Termination of portions of auctions 31 and 44.--
Except as provided in subparagraph (C), the Commission shall
not commence or conduct auctions 31 and 44 on June 19, 2002,
as specified in the public notices of March 19, 2002, and
March 20, 2002 (DA 02-659 and DA 02-563).
``(C) Exception.--
``(i) Blocks excepted.--Subparagraph (B) shall not apply to
the auction of--
``(I) the C-block of licenses on the bands of frequencies
located at 710-716 megahertz, and 740-746 megahertz; or
``(II) the D-block of licenses on the bands of frequencies
located at 716-722 megahertz.
``(ii) Eligible bidders.--The entities that shall be
eligible to bid in the auction of the C-block and D-block
licenses described in clause (i) shall be those entities that
were qualified entities, and that submitted applications to
participate in auction 44, by May 8, 2002, as part of the
original auction 44 short form filing deadline.
``(iii) Auction deadlines for excepted blocks.--
Notwithstanding subparagraph (B), the auction of the C-block
and D-block licenses described in clause (i) shall be
commenced no earlier than August 19, 2002, and no later than
September 19, 2002, and the proceeds of such auction shall be
deposited in accordance with paragraph (8) not later than
December 31, 2002.
``(iv) Report.--Within one year after the date of enactment
of this paragraph, the Commission shall submit a report to
Congress--
``(I) specifying when the Commission intends to reschedule
auctions 31 and 44 (other than the blocks excepted by clause
(i)); and
``(II) describing the progress made by the Commission in
the digital television transition and in the assignment and
allocation of additional spectrum for advanced mobile
communications services that warrants the scheduling of such
auctions.
``(D) Return of payments.--Within one month after the date
of enactment of this paragraph, the Commission shall return
to the bidders for licenses in the A-block, B-block, and E-
block of auction 44 the full amount of all upfront payments
made by such bidders for such licenses.''.
(b) Conforming Amendments.--
(1) Communications act of 1934.--Section 309(j)(14)(C)(ii)
of the Communications Act of 1934 (47 U.S.C.
309(j)(14)(C)(ii)) is amended by striking the second
sentence.
(2) Balanced budget act of 1997.--Section 3007 of the
Balanced Budget Act of 1997 (111 Stat. 269) is repealed.
(3) Consolidated appropriations act.--Paragraphs (2) and
(3) of section 213(a) of H.R.
[[Page H3661]]
3425 of the 106th Congress, as enacted into law by section
1000(a)(5) of an Act making consolidated appropriations for
the fiscal year ending September 30, 2000, and for other
purposes (Public Law 106-113; 113 Stat. 1501A-295), are
repealed.
SEC. 4. COMPLIANCE WITH AUCTION AUTHORITY.
The Federal Communications Commission shall conduct
rescheduled auctions 31 and 44 prior to the expiration of the
auction authority under section 309(j)(11) of the
Communications Act of 1934 (47 U.S.C. 309(j)(11)).
SEC. 5. PRESERVATION OF BROADCASTER OBLIGATIONS.
Nothing in this Act shall be construed to relieve
television broadcast station licensees of the obligation to
complete the digital television service conversion as
required by section 309(j)(14) of the Communications Act of
1934 (47 U.S.C. 309(j)(14)).
SEC. 6. INTERFERENCE PROTECTION.
(a) Interference Waivers.--In granting a request by a
television broadcast station licensee assigned to any of
channels 52-69 to utilize any channel of channels 2-51 that
is assigned for digital broadcasting in order to continue
analog broadcasting during the transition to digital
broadcasting, the Federal Communications Commission may not,
either at the time of the grant or thereafter, waive or
otherwise reduce--
(1) the spacing requirements provided for analog
broadcasting licensees within channels 2-51 as required by
section 73.610 of the Commission's rules (and the table
contained therein) (47 CFR 73.610), or
(2) the interference standards provided for digital
broadcasting licensees within channels 2-51 as required by
sections 73.622 and 73.623 of such rules (47 CFR 73.622,
73.623),
if such waiver or reduction will result in any degradation in
or loss of service, or an increased level of interference, to
any television household except as the Commission's rules
would otherwise expressly permit, exclusive of any waivers
previously granted.
(b) Exception for Public Safety Channel Clearing.--The
restrictions in subsection (a) shall not apply to a station
licensee that is seeking authority (either by waiver or
otherwise) to vacate the frequencies that constitute
television channel 63, 64, 68, or 69 in order to make such
frequencies available for public safety purposes pursuant to
the provisions of section 337 of the Communications Act of
1934 (47 U.S.C. 337).
Mr. TAUZIN (during the reading). Mr. Speaker, I ask unanimous consent
that the Senate amendment be considered as read and printed in the
Record.
The SPEAKER pro tempore (Mr. Issa). Is there objection to the request
of the gentleman from Louisiana?
There was no objection.
Mr. DINGELL. Mr. Speaker, back in 1997, and again in 2000, over the
Committee on Energy and Commerce's objections, the budget committees of
the Congress commandeered the management of the Nation's airwaves. They
set auction deadlines that were asinine, constituting a gross
mismanagement of spectrum. Today we take back the reins and restore
rationality to the process.
Without question, moving forward with these auctions now would impose
a heavy price on the American public. The Nation's airwaves are a
scarce natural resource, and we are entrusted to manage these assets on
the public's behalf. The bill before us is the first step to reclaiming
that duty.
In addition, I would note that the anti-interference provision
contained in this bill is of particular importance to the American
viewing public. It preserves the integrity of broadcast channels,
making sure that consumers will be able to continue viewing both
traditional and digital broadcasts without risk of harmful interference
to their television sets.
I congratulate Chairman Tauzin and others for their perseverance in
getting this bill through both Houses, and look forward to the Federal
Communications Commission establishing a sound spectrum management
policy now that we have freed the agency to do so.
The SPEAKER pro tempore. Is there objection to the original request
of the gentleman from Louisiana?
There was no objection.
A motion to reconsider was laid on the table.
General Leave
Mr. TAUZIN. Mr. Speaker, I ask unanimous consent that all Members may
have 5 legislative days within which to revise and extend their remarks
on the bill just passed.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Louisiana?
There was no objection.
Mr. TAUZIN. Mr. Speaker, I want to thank the gentleman from Oregon
(Mr. DeFazio) for his courtesies this evening and hope he will excuse
my interrupting him.
Mr. DeFAZIO. Mr. Speaker, whenever I can help the powerful chairman
of the Committee on Energy and Commerce. I may have something small to
ask in return.
If I could continue here, this is a very serious subject. So the
question before the House soon will be will we rubber-stamp existing
trade policy? Is it so good, is it working so well for the American
people that we should say, hey, let us just keep doing more of the
same, let us give President Bush total authority to negotiate these
agreements in secret, then bring it back here for an up or down vote,
no amendments allowed? Let us look at the result of our existing trade
policy.
Our trade deficit is the largest in the history of the world. It has
gone from $66 billion in 1991, 1.7 percent of our gross domestic
product, to $417 billion last year, 4.1 percent of our gross domestic
product. That is pretty extraordinary. People say, well, wait a minute,
our exports are expanding. They are right. Our exports over the last
decade have gone up 17 percent; but guess what, the imports went up 44
percent because of this misbegotten trade policy.
Current estimates say that our trade deficit could reach $460 billion
by the end of this year, $536 billion by 2003, and their prediction, it
could reach 7 percent of gross domestic product, $800 billion by the
year 2005. That means the loss of tens of thousands, hundreds of
thousands more jobs in this country; and in fact, it means a trade
deficit that is not sustainable.
Essentially, if we move toward those numbers, the United States of
America becomes the next Argentina; and the World Bank and the IMF will
be in here dictating to us about our budget priorities and how we are
going to clean up our house and how we are going to meet our obligation
of our $2 trillion overseas debt. Yes, we will owe $2 trillion overseas
in the very near future because of these persistent trade deficits.
It is not sustainable. In fact, when Indonesia imploded, their trade
deficit was only 4.5 percent of their gross domestic product.
Similarly, in South Korea, and economists everywhere said, well, that
is understandable. My God, no one can have trade deficits that large a
percentage. We are talking the United States of America may go to 7
percent in the near future if we maintain the current trade policies.
The question becomes, who would want to maintain this failing trade
policy? Well, not too many of the American workers who have lost their
jobs, seen their wages depress. They are probably not real enthusiastic
about it. In fact, I come from a State where when I first raised
questions about trade, they said, oh, no, you are from Oregon, you are
going to be a free trader. You are right there on the Pacific Rim; your
people are going to benefit from this free trade policy of the United
States, as I was told by President Bush first, President Clinton and
others in opposing their successful attempts, unfortunately, to jam
through NAFTA and GATT and the WTO. My State has lost 41,000 jobs; and
other States have lost a lot more than that, millions of jobs across
the country.
Three million jobs in the United States according to the Economic
Policy Institute were lost between 1994 and the year 2000 because of
our trade policies.
What else did trade deficits do? Well, they shift the composition of
the workforce. They say, do not worry, everybody is going to wash
dishes; we are going to become a service economy. We do not need to
manufacture things. I do not believe that. I do not believe we cannot
manufacture things and continue to be a great Nation. In fact, during
the Gulf War, officials down at the Pentagon were in a panic because
they needed some high-tech stuff. They could only get it from Japan,
and Japan was not delivering on the schedule that our national security
demanded. Imagine that. Do my colleagues think China, who is now
producing some of those same critical components, is going to be real
helpful in the future? They have been so friendly and helpful so far. I
do not think so, particularly if we are in a conflict with them, which
I think is very possible within the next 25 years.
Manufacturing has lost 1.5 million jobs in the last 18 months. So we
are having a huge change in the composition of our workforce from high-
wage, high-benefit manufacturing jobs, to low-wage jobs or lower-wage
jobs on much lower-benefit jobs in the service sector or other
components of manufacturing.
What else is impacted? Stagnant wages. Average U.S. wages adjusted
for inflation are about the same as they
[[Page H3662]]
were when Jimmy Carter was President of the United States, and one of
the biggest factors in dragging that down is U.S. workers are being
asked to compete with people in Mexico who are preferably willing to
work for a dollar a day; and if President Bush is successful, they will
be asked to compete with the people of Argentina who are totally
desperate or the people of Bolivia or other nations.
The idea is to search around the world for the most exploitable, most
desperate workforce. Sometimes skills are required so they will have to
go to countries like Argentina. Other times they can go overseas to
Indonesia, Pakistan, countries like that when they are not real high
skilled and get cheaper wages.
So that is another result. I do have a few more points, and then I
will yield to the gentlewoman from Ohio (Ms. Kaptur), who is a
tremendous leader on these issues.
It is a drag on economic growth, this $400 billion-a-year trade
deficit. Our export output falls. Domestic demand that could be met by
domestic output is instead satisfied by higher imports. As I said
earlier, our exports are up by 17 percent, but our imports are up by 44
percent. We are losing the jobs that could create that.
We are increasingly reliant on foreign investors. We have to import
nearly $2 billion a day from foreign investors, and perhaps later I
will get into a list of who those foreign investors are. I think it
will shock some of the Members of this caucus in terms of national
security and economic security, but 40 percent of our U.S. Treasury
debt, 40 percent of the debt of the United States of America, the
collective debt of all of us, is owned by foreigners. That is an
extraordinary number. It erodes our defense manufacturing base. We are
going to saddle our children with future debt and interest payments,
and it hurts our long-term spending on research and development.
These are some of the grand successes of the current trade policy
that this Congress is going to be asked to rubber-stamp by once again
giving up all its authority to shape trade and trade policy and rubber-
stamp a fast track bill to give the President the authority to secretly
negotiate this agreement and bring it back here for a hurried up or
down vote.
I yield to the gentlewoman from Ohio (Ms. Kaptur), who has been a
tremendous leader in the House in opposing these failing trade
policies.
Ms. KAPTUR. Mr. Speaker, I wanted to express deepest appreciation for
the yielding of my esteemed colleague, the gentleman from Oregon (Mr.
DeFazio); and though I am not for human cloning, I just wish that
somehow we could clone more of him to serve in this Chamber, and the
people of Oregon are extraordinarily fortunate to have an honest and
very, very able Member serving their interests and indeed America's
interests.
I was listening to the gentleman's comments on fast track, which I
always call the wrong track, and felt compelled to come here to the
floor to at least try to attempt to gain just a few moments to discuss
these issues with the gentleman. My colleague mentioned how much
America is in hock to other countries and foreign interests borrowing
those dollars in order to fuel this economy. The flip side of the fact
is that 40 percent, over 40 percent now of our public debt is owned by
foreign interests, is the interest that we have to pay them, and this
year that number will total close to $400 billion. It is between $300
and $400 billion, which is almost as much as we will spend on the
defense of the United States of America to pay on our borrowings and
the interest that is owed on those.
So I think that the underside of this trade equation is the fact that
piece by piece we are selling ourselves off, the public interest and
the private interest.
{time} 1830
I think the American people really have a sense of this when they go
to the store and they look on the bottom of a cup or they look on the
label on a piece of clothing and they sort of ask themselves, well, is
anything made in America anymore? Everything from hedge trimmers to
automobiles to clothing. We import over half of the oil, which we
should totally displace by domestically produced new fuels. We are not
independent. This was a Nation formed with the great ideal of
independence and self-sufficiency, and piece by piece, at the end of
this past century and now into the new one, we are frittering away that
national endowment.
Now, the bill that was supposed to have come before us today for the
second time in 2 weeks has not made it to the floor. And the reason the
fast track bill is not here today and was not here last week is because
the motion lacks the votes necessary for passage. The problems with the
fast track proposal are so numerous that the rule that they have
adopted is self-executing. In other words, we cannot really change
anything in the bill.
And what are some of the things that are bad about it, in addition to
its fundamental architecture, which is only going to increase more
imports into this country? Well, first of all, the displaced workers
that will occur in this country. And we know it is going to happen. It
happened with NAFTA, it happened with PNTR with China. Every time we
sign one of these agreements, more companies close in our country. It
does not take a mental giant to figure out what is going on with
displaced production. The money that was supposed to be in the bill to
help the U.S. workers thrown out of their work was lowered, and there
were lower levels of trade adjustment assistance in this fast track
measure.
In addition to that, there were several provisions embedded in this
fast track bill to try to protect the seats of certain Members of this
institution in a very tough election year.
In addition to that, there were provisions that had been put in by
the other body that would have protected industries in this country
from illegal dumping of foreign goods, such as steel, and those were
taken out.
In addition, worker health provisions, those people who lose their
job and then lose their health benefits, there were provisions in the
Senate bill to protect the health benefits of our workers at least for
a period of time. Those were taken out.
And so those are just some of the few irresponsible ploys that were
included by my colleagues from the other side of the aisle. And I would
have to say to the gentleman, and I appreciate his yielding to me,
really one of the issues that we have to consider is how, when we add
up everything that has happened at this time of Enduring Freedom, or
any time when we should be considering the independence of this
country, are we either strengthening or destroying our national
defense?
We can look at job security, border security, industrial security,
economic security, all of those together comprise what we take an oath
to defend: the Constitution of the United States against all enemies,
foreign and domestic, and to assure the defense of the United States of
America. The end result is we become less able to make the bolts that
go into the airplanes, we become less able to make the airframes. The
gentleman knows a whole lot about that in the Northwestern part of our
country with what has happened to some of the outsourced Boeing
production. We become less able to make steel. We become less able to
make electronics.
If we look at what is happening with the defense base of this
country, in my district we have just had a major nuclear incident.
Guess what? In order to try to repair the facilities that can be
repaired, if we need a new head on the reactor, it has to be done by
Japan and then sent to France for finishing, and then comes back to the
United States, and then the company is absolved of liability under
exemptions in the Price-Anderson Act. What is going on? What is going
on in this country?
The last foundries have closed. I have machine tool companies in my
district going bankrupt one after the other. That is happening all over
this country. We have lost almost 1.5 million manufacturing jobs over
the last 2 years. So I want to compliment the gentleman and say that I
would like to stay for a while longer, as I listen to what he is saying
to the people of our country and to the Record.
This is an extraordinarily important issue. Fast track should not be
brought up on this floor until its flaws are repaired. And why should
we be allowing 31 more countries special access to our
[[Page H3663]]
market when we are hemorrhaging, when, in fact, we are hemorrhaging
jobs all over the world, and our trade deficit will be over $360
billion more this year?
So I want to thank the gentleman very much for the opportunity to
join him this evening and again compliment the very wise voters of the
State of Oregon for sending the gentleman here. I have long admired his
independence and his innovativeness as a Member of Congress.
Mr. DeFAZIO. Mr. Speaker, I thank the gentlewoman, and, of course,
the people of Ohio also have shown extraordinary wisdom in returning
her, for more years than I have been here, to the House of
Representatives. The gentlewoman has been tremendous on this fight.
Although we have been losing, the margin is getting closer and closer.
The gentlewoman will certainly remember that last fall, after an
extraordinary effort by the Republican leadership in this House, the
President and all his Cabinet and others, they only prevailed by a one-
vote margin in getting through the fast track trade bill. A number of
Members on that side had to change their vote, and voted reluctantly
against interests of their district, particularly people from the South
and textile States, and they got what are thus far some pretty hollow
promises in return. Certainly the voters in those States are going to
have to look to see what it is that their elected Representatives have
wrought by proposing to do more and more and more of the same.
Under this legislation, Free Trade of the Americas Act would be one
of the things negotiated, and we would go to a few of the very few
countries in the Western Hemisphere, where the United States is
currently running a trade deficit, where we do not have this kind of a
perverted free trade agreement in place, and we would give them the
opportunity to join most other nations on Earth who are running huge
trade surpluses with the United States, notably Uruguay, Argentina, and
Brazil. A very large economy in Brazil would fall under this new free
trade authority, and Brazil is a major manufacturer of automobiles,
certainly something close to the gentlewoman's heart, and other very
sophisticated goods.
So we can fully expect that under this sort of an agreement that we
would find those products coming from Brazil where labor is indeed
much, much cheaper than it is in the United States.
Ms. KAPTUR. Mr. Speaker, if the gentleman will continue to yield, I
would just want to point out that Argentina and Brazil, we are already
in deficit with them. And if we look at what has happened with Canada
and Mexico post-NAFTA, we used to have surpluses with those countries.
Then, when NAFTA kicked in, we have moved into gigantic deficits with
both countries, where they are sending us more goods than we are
sending them.
We already have growing deficits with Argentina and Brazil and
Venezuela. If this is passed, it will only grow worse because that has
been what the pattern is. If we look at a country like Argentina, I
found it very ironic that our Governor went down to Argentina in order
to try to move Ohio product down there. But if we look at what is
happening, Ohio's beef producers are being wiped off the map. They
cannot get access to market. We are importing Argentinian beef into the
United States. We have a deficit with Argentina. They are sending us
more than we are sending them, and they were not about to buy any more
of our beef. They want to sell us their beef.
And in terms of Brazil and Venezuela, if we look at the steel
industry, if we look at agriculture in those countries, the numbers are
not moving in our direction already. And many of the people in those
countries do not earn enough to buy what we have to sell, so we end up
shooting ourselves in the foot.
I thank the gentleman.
Mr. DeFAZIO. Exactly on that point, the passage of NAFTA was really
the big lie strategy. We were told it was to produce hundreds of
thousands of new jobs in the United States, and we were going to ship
all these goods to Mexico. Of course, what they did not look at was the
total buying power. If every peso earned by every person in Mexico was
only spent on U.S.-produced goods, not on bare necessities, not on
rent, locally, or anything else, it would have almost equaled the
buying power of the State of New Jersey. This was theoretic. And, of
course, obviously, that cannot happen. And, in fact, what has happened
is our trade deficit with Mexico is up 1,861 percent. We have lost
hundreds of thousands of jobs. We are running a $40-billion-a-year
trade deficit to Mexico. U.S. corporations are moving their capital to
Mexico.
This was never intended to be an agreement for U.S. firms to produce
in the United States and ship to Mexico. That was a joke. It was a lie,
plain and simple. Unfortunately, a majority of our colleagues bought
it. What it was always about was a cheap export platform in Mexico for
U.S. manufacturers to move their capital and foreign manufacturers to
move closer to the U.S. market so they would not have to ship things so
far; big, heavy things.
Ms. KAPTUR. Again, if the gentleman would be kind enough to yield, I
would just place on the record that the State of Ohio is one of the top
five losers under NAFTA. We have already lost over 100,000 jobs to
Mexico directly. That does not even count the supplier jobs and the
service jobs that are associated with those corporate relocations.
The impact is staggering. Income growth in our region and our State
has not gone up. In fact, it has been stagnant, and in many cases has
been going down. People do not have the purchasing power. And the jobs
that are replacing them are part-time jobs with no health and
retirement benefits.
If we look at, and I will just give one example and then yield the
gentleman back his time, but one of the major corporations, and I hate
to pick on a West European company, but Daimler-Benz-Chrysler, for
example, they are one of the many automotive manufacturers that have
moved production to Mexico, and they manufacture the PT Cruiser in
Toluca, Mexico. Now, that is a very popular vehicle in our country. All
the PT Cruisers are sent back here. There is not a single PT Cruiser
manufactured in the United States of America.
Now, in our district we make the Jeep Liberty. We are the home of the
jeep in Toledo, Ohio, and there are so many orders backed up for the PT
Cruiser, our workers contacted the company and said, look, why do you
not bring some of the excess production from Toluca up to Toledo? We
will put on an extra line, we will meet the backlog, and we will be
able to share in this rising market. No deal. No deal, because they can
pay workers in Mexico so little, they can literally make $10,000 more a
car. They do not have to pay environmental costs. They do you not have
to pay decent wages.
The people that work in Toluca cannot afford to buy the cars they
make. Go to the places where they live and ask yourself, is this what
we want for the world, people who have to use batteries to have any
electricity in their home because they live at such a low wage?
So if we peel the veneer off, and I must say I am not just picking on
Daimler-Chrysler, because it is the same with the Japanese auto
manufacturers, the Koreans, it really does not matter with these
multinational corporations which country they are from, but their
behavior where they locate. And, unfortunately, those jobs, if all the
PT Cruisers are sold in the United States, why should they not be made
here? There is a real disjuncture between production and consumption,
and, therefore, our plant in Toledo has not increased in employment.
Years ago we had 10,000 workers. We are down to 4,000. There are
several hundred workers, several thousand workers actually, down in
Mexico around that Toluca plant, but they are working at, I cannot say
starvation wages, but close to it. They really do not have a living
wage. That is what is going on with production. We are really hurting
those people. We can say we are keeping them busy, but they are not
really able to improve their lives. And our people, with the loss of
over 1.2 million manufacturing jobs in just the last 2 years, they are
being cashed out.
Mr. DeFAZIO. If the gentlewoman would yield back, in fact, she is
making an excellent point. Henry Ford sort of figured out the formula
for success in this country back early in the last century. He said, I
want to produce a
[[Page H3664]]
product on an assembly line with a large number of workers, and I want
my workers to be able to buy it.
And we did phenomenally well as a country. The managers, the owners
of capital, and the workers all kind of came up together. Sure, the
managers always did better, and the owners even did better yet, but
there was some proportionality. The workers could afford to buy the
products, and it created tremendous wealth for our Nation. It created
an industrial base that won World War II and was the envy of the world.
We rebuilt the world after World War II, led the race to space, and
everything else, all those things. That was American technology based
on sort of this formula of equality.
{time} 1845
But now greed has taken over as we have seen in so many ways in
corporate America, and if they can get the labor, desperate labor
somewhere else a little cheaper, and avoid environmental restrictions,
that is where they want to manufacture. And their vehicle is these free
trade agreements. They cannot do it without the imprint and the
approval of the President of the United States secretly negotiating
deals that favor the export of their capital and their manufacturing
jobs to these other countries.
The problem is ultimately it is going to collapse; but they will not
care, like the managers of Enron who had already looted the company and
are living in their six, seven or eight mansions, and they may have to
sell one of their mansions.
Ms. KAPTUR. If the gentleman would yield, many of those mansions are
not in the United States of America, nor are their major funds. They
are offshore.
Mr. DeFAZIO. Mr. Speaker, this long-term trade deficit is not
sustainable. With depressed wages in this country, ultimately we are
buying all of this on credit, and the credit is overseas. We are
getting close to $2 trillion of debt. Forty percent of the Treasury
debt of the United States is owned by foreigners. Our number one trade
deficit is with China, not the country with the best interests of the
United States in mind, in my opinion, anyway. I do not consider China
to be a great ally or friend of the United States. Number two is Japan.
Number three is Canada, obviously a close relationship with the United
States. Then Mexico, Germany, Taiwan, Italy, South Korea, Malaysia, and
Ireland. Those are the countries with whom we are accumulating this
huge and growing debt. This is of tremendous concern.
As we undermine the buying capacity of the American people and the
industrial might of the United States, and ultimately when they one day
ask for their money, their $2 trillion that they are owed, we are going
to have the IMF and the World Bank dictating terms because this is not
a sustainable system. We cannot borrow money year after year after
year.
Ms. KAPTUR. Mr. Speaker, Alan Greenspan has said fundamentally to the
Congress, this is unsustainable. We cannot keep displacing production
and bringing it in from elsewhere without ultimately having an impact
on your ability to produce and create not just money for a country, but
wealth. We can print a lot of money, but what is standing behind it is
the productive wealth of a society. That is what we are displacing.
Mr. DeFAZIO. Mr. Speaker, Alan Greenspan said in an article in
Business Week that over the past 6 years, 40 percent of the increase in
the U.S. capital stock was financed by foreign investment, a pattern
that will require an ever-larger flow of interest payments going out to
foreigners. He said, ``Countries that have gone down this path
invariably have run into trouble.''
Ms. KAPTUR. Mr. Speaker, I was thinking about this today and reading
the headlines about Afghanistan, and that country now trying to pull
together a government and it is not very easy to do. But assuming they
could pull the government together, through Afghanistan will come an
oil pipeline from the Caspian Sea. Then we see the President's comments
about Iraq and whether or not certain forces will be used to
destabilize the government of Iraq, and we recall the Persian Gulf War
and that oil field that lies between Iraq and Kuwait.
Then we saw the Bush administration a few weeks ago give mixed
messages to this Congress and the world about Venezuela and which
government the administration was supporting or not supporting in
Venezuela. What do Iraq, Venezuela and Afghanistan all have in common?
They have in common the oil imperative. So many times when you see the
United States become dependent, as we are in this oil arena, very bad
things can happen. Indeed, wars can happen when our country is not
independent. I think it is important what the gentleman is presenting
in terms of the financial condition of our country and who we owe.
The first phone call I made after 9-11 was to Alan Greenspan, and I
wanted to know from an economical standpoint who can pull our bonds
internationally. I said, I want you to assure me that we can hold it
together because 40 percent of the debt of this country is now owned by
foreign interests. He said, We can track that back to the London
markets. And I said, What does that tell me? He said, I do not think
you need to worry, but he could not actually tell me who holds our
debt.
I think he might know, I am not sure, but he was not able to tell me.
But when we owe $400 billion a year to interests that we do not even
have a list of, we know that it is traded in the London markets, if we
could theorize, China is now the largest holder of our dollar reserves.
The trade deficit is a reciprocal for that. Japan is number two. So our
fate lies in their hands. Saudi Arabia and the OPEC countries, number
three. So behind the scenes, they have enormous leverage when
the United States is frittering away its economic independence.
Mr. DeFAZIO. Mr. Speaker, we ran a trade deficit last year of $40
billion with the OPEC countries, the same countries that are fixing oil
prices to stick it to American consumers and the remaining industry
that we have in this country with extortionately high prices for fuel;
and the Bush administration, they are all for free trade. They love the
WTO, the secret tribunals. They want to get hormone-laced beef in from
Europe, and other things that are in favor of corporate America; but
guess what, they will not file a complaint with the WTO against OPEC
for price fixing which is prohibited by the World Trade Organization
and by GATT. Why not?
Well, maybe there is something to do with the oil industry that I am
not quite aware of, but we are running a $40 billion trade deficit.
These people are making no secret of the fact that they are restraining
production to drive up the price, and that violates the WTO. It is an
open and shut case. All the U.S. has to do is file it on behalf of its
consumers. Consumers of the United States cannot file a case. Even
those industries that are still left in this country cannot file a
case. Only the Bush administration can file the case, and they are
refusing to take on the OPEC countries and to file against them for
price gouging of the American people.
Also on that list, kind of interestingly enough, we ran a $5.754
billion trade deficit with Iraq. The President is talking about
invading Iraq, and we are running a $5.750 billion trade deficit with
them. There is something weird about that.
Ms. KAPTUR. If the gentleman would yield, I was speaking to my local
press in my district, and they asked what did the President mean about
Iraq. I said would it surprise you, in spite of what the headlines are
saying in Washington, today we are importing 8 percent of our petroleum
from Iraq. They were stunned. How could this be happening at the same
time the no-fly zone is maintained over Iraq?
The relationships that have made us more and more dependent on
petroleum imports than we were 25 years ago is really a sad tale for
our country, and I thank the gentleman for helping us bring this out
into the light so those who are recording remarks and those who are
listening, particularly the younger generation will understand, we have
to unwind, we have to get ourselves out of these relationships because
too often oil has been serving as a proxy for our foreign policy, and
our trade deficit is a sign of our growing lack of independence.
Mr. DeFAZIO. Again, returning to that, we ran also a $7.4 billion
trade deficit with Saudi Arabia, and now we find out that some of the
most wealthy Saudis are the biggest backers of al
[[Page H3665]]
Qaeda and other terrorist groups and have been funding this network of
schools training Islamic fundamentalist radicals around the world, and
we are helping to finance that. It is U.S. consumers who are being
extorted at the gas pump by price fixing and production fixing by OPEC,
who are sending almost $13 billion a year to Saudi Arabia and Iraq.
This is extraordinary to me; and what is the Bush administration
response to this: we should do more of the same. These trade policies
are working so well, price gouging the American consumers, undermining
our industrial base, lower wages and productivity in the United States,
we should do more of exactly the same, despite the fact that we are
headed toward a $2 trillion debt overseas within the next 2 years.
Mr. Speaker, $2 trillion of U.S. dollars are outstanding around the
world, and the gentlewoman is right. What if the Chinese decide they
are in a dispute over Taiwan or something else with the U.S. and they
want to slow us down or hurt us, and they demand payment for, say,
their $700 billion worth. Suddenly the U.S. is in a big credit crunch.
We cannot afford to make those sorts of payments.
Of course, there is one other point that is interesting. I befuddled
an economist the other evening. It was Paul Krugman from the New York
Times. He is an interesting man, but blind on trade issues. He is a big
believer in free trade. We asked him if a $400 billion-a-year trade
deficit is sustainable.
He said, oh, no, that is close to what Indonesia had before they
collapsed. It is not sustainable.
We asked, How is that going to rectify itself?
He said the dollar will collapse.
And so I said the idea is that the dollar collapses, we pay more for
goods, U.S. goods are cheaper. Right?
Yes.
But I said, guess what, if we do not manufacture anything anymore, it
just means everything you are importing to run your economy has become
a lot more expensive, like oil, critical high-tech components,
everything that we are buying, all of the shoes and clothes, all
becomes more expensive here in the United States; and our trade deficit
might even go up.
With that he turned away from me and did not want to continue the
conversation. We are defying conventional wisdom here. The conventional
wisdom is if our dollar tanks, yes, it hurts a little bit; but we will
turn our sights inward and buy from our own manufacturers. But guess
what, our own manufacturers have been sold out by these trade
agreements.
Try and buy some running shoes made in America. There is apparently
one company that makes men's shoes in the United States. Try to buy a
suit made in the United States of America.
Ms. KAPTUR. Mr. Speaker, if the gentleman would yield, do not try to
buy slab specialty steel made by domestic manufacturers in the
heartland of America that I represent because the last one just closed.
If you are an independent machine toolmaker, you cannot find that
product. It is a very, very serious situation.
I just want to put two words on the record to add to this discussion:
one is ``recession'' and another is ``repression.''
In terms of recession, if we think about the recession that we are
crawling our way out of, and some parts of America are still in, what
triggered it? Rising oil prices for imported fuel. People have
forgotten that.
Before September 11, we were already struggling with a hammerlock on
this economy; and then after September 11 when the OPEC countries and
some of the other oil exporting countries got worried, they lowered
prices. Then they are coming back up again. This is a very manipulated
price scheme, and that was proven by the Federal Trade Commission in
some of the initial investigations done as we entered this recession.
The American people should remember that rising petroleum costs and
imports, the rising costs of imports, can really kick this economy in
the shins. If we think back to the 1970s and what happened in those
decades with the Arab oil embargoes and the severe depression that this
country was thrown into because of the costs of rising imports, we are
now importing more than we did back then. Yes, we are conserving more
at the same time, but we have not created the new fuels here at home.
What we need to do on the public and private sides, we have been
bunting rather than hitting three-base hits.
{time} 1900
It has made a huge difference in our ability to handle our economy in
a way that preserves our independence and does not do as much harm here
at home.
The other word I wanted to just say a word about, if I could, and
that is repression, because some of the very countries that receive the
dollars when our people go to the gas pump, for example, and they buy
petroleum that is refined into gasoline from other countries, those
dollars go to them. What do they use them for? The gentleman from
Oregon mentioned Saudi Arabia. Most of the terrorists were born or
spent time in Saudi Arabia. That is a very repressive regime. And our
dollars support it. What did Osama bin Laden say? He said that he
wanted U.S. troops out of Saudi Arabia. What are U.S. troops doing in
Saudi Arabia? Thousands and thousands and thousands of troops, what are
they doing there? And what happened to the USS Cole about a year and a
half ago in Yemen harbor when a suicide bomber hit our destroyer, what
was that ship doing there in the Middle East? Could it be anything to
do with watching the oil lanes and the movement of tankers out of that
region of the world? I think it had a whole lot to do with that and I
think it is important for us to think about who we are supporting when
we spend our dollars.
It is very hard for the American people to do anything on the
petroleum issue because when they go to the gas pump, they do not know
that Citgo gets its gasoline from Venezuela, they do not know that
Occidental has fields in Colombia, they do not really think about Exxon
in Saudi Arabia, they do not associate a company name with a country.
Yet that is exactly what is going on. And so if you buy that product,
you support through the transaction the regimes of those countries and
there is not a single democracy among them. And in the end the people
living in those countries translate our behavior as a society into what
they experience in their own homelands and they want a better way of
life, but the regimes there do not permit it. And so some of the anger
directed against the United States is a direct result of the economic
relationships that keep them down.
I would just maybe brag a little bit here about an organization in
northwest Ohio called Northwest Ohio Ethanol, because at the same time
as our Marines and Special Forces are defending the edge of freedom
globally, there are things people can do here at home. And in terms of
our energy trade deficit, one of the most important actions we can take
is to become fuel self-sufficient. We have a new private company,
Northwest Ohio Ethanol, that has been incorporated, that is selling
shares on the private market so that Ohio's farmers can come together
and provide a new fuel for the future.
We only have two biofuel pumps in the entire State of Ohio, a State
of 11 million people. I want to buy an E-85 car. I want to buy a
biodiesel vehicle. I would be a fool to do it in Ohio because I cannot
get the fuel to put in it. And so this deficit is really a very wicked
thing, because the average American cannot alone dig out of it. The
actions that one could take as a consumer are precluded because of the
very large interests that control the refining and the supply of fuel
to the marketplace. It is important to think about the words recession
at home and repression abroad and what kind of a political endowment we
are bequeathing to the future.
Mr. DeFAZIO. I thank the gentlewoman from Ohio for assisting in this
special order this evening. We will have opportunities to discuss this
again. You have certainly opened up the door to discuss energy self-
sufficiency and energy policy which I think is one of the strongest
steps we could take to make this country secure for the next century,
both militarily and economically. I would love to engage in a special
order on that subject some evening.
[[Page H3666]]
Ms. KAPTUR. I would enjoy that opportunity as you are such a leader
in all those areas.
Mr. DeFAZIO. I thank the gentlewoman. I realize she has to leave and
I am almost done myself.
I want to go back and reiterate a couple of points. In my own State,
41,000 jobs lost to trade in the last decade, a number in wood
products, some in textiles, others in other industries. This is a loss
that did not need to happen. We did not need to lose these industrial
wage jobs with good benefits to unfair trade. But unfortunately it was
done under auspices of United States law. That is, agreements that were
pushed through, started in the Reagan administration, continued in the
first Bush administration, brought to fruition by the Clinton
administration and now the next Bush administration, the current Bush
administration wants to expand on those failing policies.
Think of that. How much bigger do they want the trade deficit to be?
How many more millions of U.S. manufacturing jobs do they want to
export? There are not many left. We already know that the deficit is
not sustainable. The growth of our merchandise trade deficits over the
last 10 years, 1990 to 2001, with our free trade partners, Mexico,
1,861 percent growth; China 713 percent growth; the WTO membership
generally that is from the Uruguay Round, 300 percent; the Caribbean
Basin Parity Act, 131 percent; and sub-Saharan Africa, 64 percent.
Those are numbers from our own international trade commission. That is
an outline of the success of these trade policies. They are a success
for multinational corporations or corporations that were formerly U.S.
corporations but now do not want to think of themselves or act in that
manner anymore, who are exporting our wealth and our jobs.
I have a couple of more quotes. This one is from one of my favorite
groups, the International Monetary Fund, and that was said
sarcastically. I think they have done more damage to the world economy
than virtually any other organization, but they are now saying:
``The sustainability of the large U.S. current account deficit hinges
on the ability of the United States to continue to attract sizable
capital inflows. Up to now these inflows in large part have reflected
the perceived attractiveness of the U.S. investment environment but
such perceptions are subject to continuous reappraisal.''
And with the questions about the bookkeeping and the real
profitability of many firms on Wall Street, with the rapid decline of
the U.S. dollar, those perceptions are changing very quickly. In fact,
the United States of America, not one of these corrupt companies like
Enron, the United States of America has been put on the Standard &
Poor's watch list for 20 countries that are vulnerable to a credit
bust. Why is that? Because Americans are not working hard? No. Because
we are a resource poor country? No. Because we have a totally failed
trade policy and the current President and the majority in the House of
Representatives, the Republicans, want more of the same as medicine to
cure that ill. We are talking about the potential to bankrupt the
United States of America, to turn us into a yet larger Argentina. They
were the miracle of South America, the highest standard of living, a
European country in South America is what they were called for many
years and now they are a basket case, because of the dictates of the
IMF, because of policies that are similar to the ones we are engaging
in here in the United States with trade.
This is not sustainable. These policies must be changed. It will be
unconscionable. And the fact that we are not working here tonight, we
are just chattering and in fact the House got out of here at 3 o'clock
today and are rumored to be out at 2 o'clock tomorrow and maybe 1
o'clock on Thursday and noon on Friday, because the Republicans cannot
quite get together the votes to jam through one more time a bill to
rubber stamp this totally discredited and failed trade policy. The
President is probably on the horn right now to some reluctant Members
saying, ``Oh, I know it's going to hurt you at home. I know it's going
to put people in your district out of work. I know this is a real
problem for you, but I'll do something to make it up.'' Those are the
kind of phone calls that are going on on that side of the aisle. They
want their Members to vote against the interests of the people living
and working in their districts and in the United States of America in
the interest of a few very powerful multinational corporations, the oil
industry and others who are essentially dictating trade policies
through this administration, and, sadly, as they did through the
Clinton administration and the predecessor Presidents for the last 25
years, ever since we started running huge and growing trade deficits,
our trade policy has been run by corporate America and intellectual
elite that do not see reality and do not want to regard reality and do
not want to look at sustainability.
I am hoping that a majority of my colleagues here in the House of
Representatives will see that issue for what it is, the lies for what
they are, and vote to adopt a new trade policy for this country, one
that will serve us better and turn our deficits and our hemorrhaging of
industrial jobs around.
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