[Congressional Record (Bound Edition), Volume 146 (2000), Part 9]
[Extensions of Remarks]
[Page 12898]
[From the U.S. Government Publishing Office, www.gpo.gov]



                        INTEREST RATE RESOLUTION

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                        HON. JOHN ELIAS BALDACCI

                                of maine

                    in the house of representatives

                         Tuesday, June 27, 2000

  Mr. BALDACCI. Mr. Speaker, I rise this evening to introduce a sense 
of the House resolution with respect to interest rates.
  As we all know, the Federal Reserve Board met today, and will meet 
again tomorrow, after which we will find out if interest rates will 
rise yet again, or remain at the current level. With six increases over 
the last year, we have seen a significant rise in rates. I recognize 
the Federal Reserve is doing the best job it can to maintain the 
longest economic expansion in U.S. history by keeping any signs of 
inflation in check. However, at this point I am convinced that any 
further increases could seriously impact ordinary working Americans 
without providing any sort of benefit.
  Recent economic reports suggest that the economy is slowing in 
response to prior rate increases. Retail sales dropped in April and 
May, unemployment increased in May, and new home starts have decreased 
by 10% since December.
  Just a few weeks ago, a number of our colleagues sent a letter to the 
Federal Reserve urging the board not to raise interest rates at their 
next meeting. They maintained that it could ``lead to an unnecessary 
and socially damaging increase in unemployment without any significant 
offsetting advantage.''
  I agree with that sentiment. In addition to increased unemployment, 
it would raise borrowing costs yet again for working people and make it 
more difficult to purchase a home. While I understand the Fed's intent 
to engineer a ``soft landing,'' do we really need additional actions to 
slow the economy when it is clear that is already occurring? As a 
follow up to the letter our colleagues sent to the Federal Reserve, I 
am introducing a resolution expressing the sense of the House that the 
Board of Governors should take action to decrease, or at a minimum not 
raise interest rates further at this time. I think it's important that 
we send the Fed a message about the impact continued increases will 
have on working families back in our districts. I hope you will join me 
in supporting this resolution.

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