[Congressional Record Volume 149, Number 107 (Friday, July 18, 2003)]
[Extensions of Remarks]
[Pages E1513-E1514]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     THE FOREIGN AID LIMITATION ACT

                                 ______
                                 

                             HON. RON PAUL

                                of texas

                    in the house of representatives

                        Thursday, July 17, 2003

  Mr. PAUL. Mr. Speaker, today I introduce the Foreign Aid Limitation 
Act. This bill limits the ability of the Executive Branch to use the 
Exchange Stabilization Fund (ESF) to distribute largesse to foreign 
countries without the approval of Congress.
  The Foreign Aid Limitation Act prohibits the Secretary of the 
Treasury from using the ESF to make a loan or extend credit to any 
foreign government or entity for an amount exceeding $250,000,000. The 
bill also forbids the ESF from being used to finance a loan or to 
extend credit, to any foreign government or entity for a period 
exceeding 60 days. The 60-day limitation can be waived if the President 
certifies in writing to the Chair and ranking members of the relevant 
House and Senate Committees that the United States obtained an assured 
source of repayment before making the loan or extending the credit. 
Finally, the bill prohibits the use of the ESF to make loans or extend 
credit in an amount exceeding $1,000,000,000 to a foreign government or 
entity without express statutory authorization. This provision can also 
be waived if the President certifies in writing to the heads of the 
relevant committees that the loan is necessary to

[[Page E1514]]

address a financial crisis threatening the United States and Congress 
does not pass a joint resolution disapproving the loan or credit.
  Mr. Speaker, these provisions all passed Congress as ``riders'' on 
appropriations bills in the 1990s. However, they have not been included 
in the appropriations bills for the past several years. It is long past 
time for Congress to make these provisions permanent. Over the past 
several years there has been great controversy over the use of the 
Exchange Stabilization Fund. This fund was created in the 1930s to help 
stabilize the exchange value of the dollar, yet it has mutated into a 
``slush fund'' used by the executive branch to funnel money to foreign 
governments and even foreign companies free of congressional oversight.
  In particular, there was great controversy over the Clinton 
administration's use of the ESF to finance the Mexican bailout without 
Congressional approval in 1995. Today, there is a similar controversy 
over the use of the ESF in the Iraq rebuilding process. Ensuring the 
fund is only used for narrow purposes will help end the controversy by 
bringing greater transparency to the disbursement of foreign aid. Even 
supporters of a vigorous foreign aid program should support restoring 
Congress' rightful role as appropriator and overseer of foreign aid 
funds.
  Mr. Speaker, it long past time for Congress to begin reasserting its 
constitutional role in the appropriation of funds for foreign aid 
programs. For too long, the Exchange Stabilization Fund has allowed the 
executive branch to commit the American taxpayer to supporting foreign 
governments without even consulting with Congress. I hope all my 
colleagues will join my efforts to end this practice by cosponsoring my 
Foreign Aid Limitation Act.

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