("Quid coniuratio est?")
THE MEXICAN RESCUE PACKAGE
[From The Congressional Record -- House, H1271-H1278, Feb. 6, 1995]
[...continued...]
MR. BROWN of Ohio:
You know, as bad as we thought, as bad an idea as we thought the
bailout was 3 weeks ago, in the last few days, with Alan
Greenspan and the Federal Reserve raising interest rates in this
country, it only exacerbates the problem in Mexico. If you
remember 2 weeks ago, 3 weeks ago, Mr. Greenspan was all over the
Congress, lobbying, talking to Republicans, talking to Democrats,
meeting with Speaker Gingrich, talking to the President,
everybody he could, about this Mexican bailout on the one hand.
Then on the other hand we began to hear stories that he was
leaking out that the Federal Reserve is about to increase
interest rates.
When that happens, when interest rates are increased in this country, which happened last week, in addition to what it does to home buying, homebuilding, the cost of credit, the costs to borrowed money for small businesses, all the hurt that puts on the economy, what it does with the Mexico situation is simply pull the rug out from under this whole bailout situation whereas the price, the cost, as the dollar gets stronger, the peso by definition gets weaker, which means that the $16 billion or so that Mexico already owes back to western investors gets more expensive so that it decreases the chance of pay back. It means those loan guarantees and direct loans may in fact not be paid back, but increases the chances there, and at the same time it undercuts the whole ability of the Mexican Government to get back on its feet in the Mexican society.
It simply does not make sense that the Federal Reserve did both of those things, or the Federal Reserve Chairman did both of those things the same month.
MS. KAPTUR:
If I might reclaim my time just for a second, does it not
interest you that over the last year the Federal Reserve of our
country raised interest rates six times, and during that period
of time, of course, it became more lucrative for funds to be
drawn into the United States and away from Mexico? This was all
going on at the same time. We were asking ourselves why are
interest rates going up in the United States when there is no
inflation.
MR. BROWN of Ohio:
American investors were benefiting. There were incentive for
American investors to pull their money out, and that is what
accelerated the whole downward plunge of the peso. You couple the
politics of NAFTA, that the Mexican Government and the American
Government did not want any peso devaluation during NAFTA, the
Mexican government did not want any peso devaluation, although it
could have been done in small increments during their own
Presidential elections. So the politics of Mexico and the easy
availability of money sent to Mexico, and the American bankers
and American investors sending their money down there, the
Mexicans glad to receive it, certainly with the NAFTA stamp of
approval, yes, our Government was saying it is O.K. to invest
there, all played into this.
MS. KAPTUR:
If I might yield time to the gentleman from Vermont [Mr.
Sanders].
MR. SANDERS:
I thank the gentlewoman from Ohio. We are back together again,
right.
MR. DeFAZIO:
After hours.
MR. SANDERS:
Fourteen months ago many of us, all of us, and many other of our
colleagues told the American people that we thought the NAFTA
agreement was going to be a disaster. On the other side we had
the President, we had the Republican leadership, we had virtually
every major corporate newspaper in America, who were telling us
what a wonderful deal NAFTA was going to be for American workers,
for Mexican workers, and for the people in general.
Fourteen months have come and gone, and sadly, sadly, virtually every concern that we had at that time has proven to be true. And after the 14 months, instead of our friends who supported NAFTA coming forward and saying, "O.K., we admit it, we made a mistake, we were wrong, everybody is wrong, they were wrong"; but instead of coming forward and saying they were wrong, what they now come forward and say is, "Hey, we need a $40-plus billion loan guarantee to Mexico, because NAFTA has been such a success that the Mexican economy is disintegrating, their Government is extremely unstable, and therefore, at a time when small business in America is in trouble and we do not offer them loan guarantees, family farmers in America, we do not offer them loan guarantees, we have a $200 billion deficit."
And what irritates me very much is every single day on the floor of this House, Members of Congress say, "Hey, we have to cut back on Social Security, on Medicare, on Medicaid, on nutrition programs for hungry children and hungry senior citizens. We have got to do that." We do not have enough money. And yet apparently there is not quite that concern for putting $40 billion of taxpayers' money at risk for this bailout.
The first point I would like to make this evening in terms of this bailout is it is very interesting who is for it and who is against it. Polls indicate, I think the latest poll I saw is that some 80 percent of the American people are against this bailout. Maybe some of the viewers would say, well, obviously all the Mexican people are for this bailout.
Wrong. Polls indicate, as I understand it, that a healthy majority of Mexicans are against the bailout because they are concerned about the sovereignty of their nation.
MR. BROWN of Ohio:
If the gentleman will yield, including one of the major
presidential candidates in Mexico who has come out against and
spoken at a rally of literally tens of thousands of Mexicans, I
would add.
MR. SANDERS:
So you have the American people against the bailout, you have the
Mexican people against the bailout. And one of the frustrations
that all of us share is that we know that, if that vote had come
to the floor of the House, the U.S. Congress, House and Senate,
Republicans and Democrats, and the only independent, were all
against the bailout.
MR. TAYLOR of Mississippi:
How did the gentleman vote on this issue?
MR. SANDERS:
Well, that is a very interesting question. I was about to vote no
for the bailout. Unfortunately, it never came to the floor of the
House. I have not yet voted on it.
MR. TAYLOR of Mississippi:
How did Ms. Kaptur vote on the issue?
MS. KAPTUR:
On this bailout issue, we have not had a chance to vote on it.
MR. TAYLOR of Mississippi:
How did the Speaker of the House vote on the issue?
MS. KAPTUR:
The Speaker of the House has not had a chance to vote on this
matter.
MR. TAYLOR of Mississippi:
The chairman of the Committee on Ways and Means, the chairman of
the Committee on Appropriations?
MS. KAPTUR:
The chairman of the Committee on Appropriations I spoke with the
other day. There has been no bill referred to his committee.
There is not a bill that has been brought up here to the
Congress.
MR. TAYLOR of Mississippi:
Twenty billion dollars of American tax dollars, and there was not
a vote in the Congress of the United States. Is that what you are
telling me?
MS. KAPTUR:
There has not been a vote here in the Congress of the United
States.
MR. TAYLOR of Mississippi:
When will Congress get a chance to vote on this?
MS. KAPTUR:
We were trying very hard to get a vote, hopefully tomorrow. We
introduced a bill on Friday. Because the Speaker will not bring
up the bill, we have to use very unusual procedures to force a
bill on the floor, which we expect will come up tomorrow sometime
after 11 o'clock, under very prescribed rules where we will have
very little opportunity to debate. But we have not been able to
get any hearings in the committees of any significance. We have
not been able to get a bill. The executive branch did this
completely on their own, without the Congress being involved.
MR. TAYLOR of Mississippi:
Ms. Kaptur, is it really fair to say the executive branch did
this entirely on their own? Let us go back the 13 months that my
friend Mr. Sanders made reference to. What was then minority
whip, now Speaker of the House Gingrich's position on NAFTA?
MS. KAPTUR:
Mr. Gingrich was a very strong supporter of NAFTA, and in fact
when NAFTA got in trouble, he ended up rounding up the votes to
ultimately pass it. There were I think 43 votes that were
switched at the end.
MR. TAYLOR of Mississippi:
So again going back to what Mr. Sanders had to say, what
incentive then does Speaker of the House Gingrich have to bring
this to a vote? After all, his folks got their $20 billion. The
American people are left holding the bag. Four hundred and
thirty-five Congressmen never voted on it. Folks back home do not
know if they were for it or against it. What recourse is there
for a Member of Congress who feels like his constituents have
gotten the short end of this stick and that his constituents'
children have gotten the short end of the stick? After all, they
have already lent $20 billion. But it is my understanding, please
correct me if I am wrong, there is $35 billion in this fund. That
means there is $15 billion still to be left at the whim of the
President. To put that as a reference to the citizens of this
country, $35 billion is roughly what this Nation will spend on
its veterans this year. Yet, you are telling me, without a vote
in this body, up to $35 billion can be pledged by the United
States, with little or no guarantee that it will ever be repaid.
As a matter of fact, I have heard the Mexicans have made only one
debt payment one time in the past dozen years or so.
[...to be continued...]
+ + + + + + + + + + + + + + + + + + + + + +
[Copies of The Congressional Record are normally available for viewing at your local library.]
I encourage distribution of "Conspiracy Nation."
Coming to you from Illinois -- "The Land of Skolnick"