[Congressional Record Volume 151, Number 161 (Thursday, December 15, 2005)]
[House]
[Pages H11872-H11873]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           FOREIGN-HELD DEBT

  Ms. KAPTUR. Madam Speaker, I ask unanimous consent to take my Special 
Order at this time.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentlewoman from Ohio?
  There was no objection.
  The SPEAKER pro tempore. Under a previous order of the House, the 
gentlewoman from Ohio (Ms. Kaptur) is recognized for 5 minutes.
  Ms. KAPTUR. Madam Speaker, there are some things that Congress and 
the President can really do something about. And one of those is the 
management of our Federal accounts.
  The news today reports in USA Today, Oil imports help push the trade 
gap to record highs. Every time I see the fact that we are importing 
more oil than finding ways to become more energy independent here at 
home, I say to myself, there is something that America really can do 
but is not doing.
  The New York Times reported, and I include this in the Record, today 
that the U.S. trade deficit indeed has hit record highs, threatening 
U.S. growth. We are going deeper and deeper into debt every day with 
imports climbing much faster than exports. The American people know 
this. One can hardly find anything made in this country anymore. In 
fact, the trade deficit is so huge, it is now three-quarters of $1 
trillion and rising and, with it, our foreign indebtedness. This 
widening gap is likely to reduce our overall growth as a country.
  Now, our thirst for imported petroleum as a part of this increase 
rose 13 percent. And the Secretary of Treasury is living in another 
world when he says the reason that we are going into hock is because 
other nations are not growing fast enough, when, in fact, other nations 
are the very countries that are lending us money to make up this gap.
  The New York Times says a growing number of economists worry that the 
United States has become locked into

[[Page H11873]]

becoming the world's consumer of last resort, a role that is leading to 
ever higher levels of foreign indebtedness financed in large part by 
central banks of China, Japan and other Asian countries.
  And not just Asian. As this chart illustrates, the amount of debt 
being held by foreigners is going up. Japan, over $100 billion over 
last year to a level of $681 billion. They are literally owning us, 
owning our debt.
  Europe, $471.8 billion. And a lot of that, I think, comes through the 
London markets, particularly the oil markets. So this masks some of the 
buying that actually is occurring through the Middle East.
  China, Hong Kong, at a level now of over $295 billion. And those 
kinds of ownership of our assets and debt means we owe them interest. 
And that level of interest is what I want to discuss tonight.
  The proportion of our foreign-held debt is now nearly half of what we 
owe as a country. Nearly half. It has grown exponentially, and the 
interest we pay on that debt is one of the largest components of the 
Federal budget. In fact, in this coming fiscal year, the interest alone 
that Americans will pay to foreigners for their borrowings to us will 
be nearly $100 billion. Take the amount that we have to pay Hong Kong 
and China for what they have lent to us. We will pay them over $13 
billion. How much is $13 billion? $13 billion is nearly equal to all of 
the money we spend as a Federal Government financing student loans in 
the Pell grant program to make post-secondary study a reality for 
thousands of students.

                              {time}  2345

  How about the $30 billion in interest that we will owe Japan, when 
you think that that amount is $6 billion more than we devote to funding 
the No Child Left Behind Act. And it is twice as much as we spend on 
funding employment training and unemployment services combined.
  In Ohio, for example, this past week only one school in the 
northeastern part of Ohio got funds in order to do additional job 
training, though President Bush campaigned very hard on that issue in 
Ohio. Ohio did not get 15 grants or 20 grants, we got one.
  Our money is going to pay interest to foreigners who are lending us 
money. We are cutting money for Head Start by more than $11 billion, 
and yet we are paying over $100 billion to foreign interests who are 
lending us money. We cannot afford to pay TRICARE for the needs of 
those in the Guard and Reserve, many of whom are returning home and 
finding their benefits are cut, and we have a shortfall in the veterans 
affairs budget. All of those accounts put together are a pittance 
compared to the interest that we are paying on our foreign-owned debt.
  I have introduced, along with several of my colleagues on both sides 
of the aisle, H.R. 4405, The Trade Balancing Act of 2005, which will 
require that in cases in which the annual trade deficit, that is the 
trade gap, the difference between imports and exports, between the 
United States and another country is $10 billion a year for three 
consecutive years, the President must take the necessary steps to 
create a more balanced trading relationship with that country.
  I am asking my colleagues to help communicate this message to the 
President, to our colleagues, before a foreclosure sign is posted on 
our Treasury building. There could be nothing more important that this 
Congress could do than to turn a sound economy over to the future.
  Madam Speaker, I will place these additional articles in the Record. 
Let us put America back on an even keel.

           Trade Deficit Hits Record, Threatening U.S. Growth

                         (By Edmund L. Andrews)

       Washington, Dec. 14.--The United States' trade deficit 
     ballooned to a record in October, the government said 
     Wednesday, with imports climbing much faster than exports 
     even though prices for imported oil declined.
       The trade deficit widened by $3 billion, to $68.9 billion, 
     confounding forecasts on Wall Street that the gap would 
     narrow and signaling that the nation's huge trade imbalance 
     has not begun to stabilize.
       The nation's deficit is on track to top $700 billion this 
     year, up from last year's record of $618 billion, and its 
     foreign indebtedness is rising at least as rapidly.
       Because imports are about 50 percent higher than exports, 
     the United States would need to increase exports twice as 
     fast as imports simply to keep its imbalances from growing 
     even more.
       The widening gap is likely to reduce the nation's overall 
     growth in the final quarter of this year. Morgan Stanley 
     reduced its forecast for growth this quarter to 3 percent, 
     from 3.4 percent on Wednesday, and Merrill Lynch shaved its 
     already pessimistic forecast to just 2.3 percent.
       News of the deficit also ignited a fresh round of political 
     accusations in Washington over trade and globalization, with 
     Democrats accusing President Bush of being soft on countries 
     like China.
       The United States stepped up its purchases from every part 
     of the world and in most categories of goods, even as global 
     demand softened, the Commerce Department reported.
       The trade deficit with China through October hit $166.8 
     billion, exceeding the $162 billion deficit with China for 
     all of last year.
       Over all, the Commerce Department estimated that American 
     exports grew by 1.7 percent in October, while imports climbed 
     2.7 percent.
       But exports were weaker than the headline numbers implied, 
     because virtually all of the increase stemmed from a big 
     increase in aircraft sales after the end of a strike at 
     Boeing.
       Excluding aircraft, exports of capital goods and industrial 
     goods were essentially flat. Exports of consumer goods 
     declined 5.6 percent, to $9.37 billion.
       Many analysts had expected the trade deficit to narrow 
     slightly, partly because of the increase in airplane exports 
     and partly because oil prices declined slightly during the 
     month.
       But American thirst for imported petroleum shot up 13 
     percent, largely to make up for the loss of production in the 
     Gulf of Mexico cause by Hurricane Katrina.
       The United States' trade deficit with the Organization of 
     the Petroleum Exporting Countries totaled $77 billion for the 
     first 10 months of this year, up from $59.1 billion for the 
     same period last year. The higher deficit is the result of 
     both higher oil prices over the last year and higher volumes 
     of imports. But that was only part of the reason that the 
     trade balance deteriorated. The trade balance for 
     nonpetroleum products for the first 10 months of this year 
     has widened to $447 billion, up from $400 billion last year.
       Representative Benjamin L. Cardin of Maryland, a top 
     Democrat point man on trade issues, accused the Bush 
     administration of failing to create an effective strategy for 
     dealing with unfair trade practices.
       Representative Marcy Kaptur, an Ohio Democrat, stepped up 
     her call for legislation to force the administration to take 
     action against countries that consistently run trade 
     surpluses with the United States of more than $10 billion a 
     year.
       Even some Republicans expressed dismay at the size of the 
     deficit.
       ``Small business owners in Maine and across the nation are 
     fighting to remain competitive with countries such as China 
     that flagrantly disregard fair trade practices,'' said 
     Senator Olympia J. Snowe, Republican of Maine.
       The Treasury secretary, John W. Snow, said the 
     administration was pushing countries like China, but added 
     the trade deficit was largely a result of slow growth in 
     other countries.
       ``If our major industrialized trading partners were growing 
     faster, the U.S. wouldn't have such a large trade gap,'' Mr. 
     Snow said at a briefing on the economy with Commerce 
     Secretary Carlos M. Gutierrez and Labor Secretary Elaine L. 
     Chao.
       The American economy grew at an annual rate of 3.8 percent 
     in the first three quarters of this year, far faster than 
     either the European Union or Japan.
       A growing number of economists worry that the United States 
     has become locked into being the world's consumer of last 
     resort, a role that is leading to ever higher levels of 
     foreign indebtedness financed in a large part by central 
     banks of China, Japan and other Asian countries.
       Robert Sinche, a currency strategist at Bank of America, 
     predicted on Wednesday that foreigners would own about $4 
     trillion in American assets, about 30 percent of its gross 
     domestic product, by the end of 2006.

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