Phil Crane

Mr. CRANE

Mr. CRANE. Mr. Speaker, we as a body are called upon to perform one of the most significant duties we have as sworn defenders of the Constitution--to consider whether to impeach the President of the United States. I, for one, do not entertain this task lightly or with any joy despite my many political disagreements with Mr. Clinton. However, based on the investigation of the Independent Counsel, Mr. Starr, and the yeoman's work performed by Chairman Hyde and my colleagues on the Judiciary Committee, I have concluded that the four articles of impeachment are warranted. Mr. Clinton lied to the American people, lied to the courts, obstructed justice and abused the power of his office. During the discovery of these offenses committed by Mr. Clinton, I urged him to do the honorable thing and resign. Instead, he continued to deny his misdeeds and, in so doing, tarnished the office of the President. It is our duty to restore the luster to that office. Some have argued that this process is neither appropriate, because of partisanship, nor timely, because of the military situation with Iraq. The wise Framers of our Constitution, in seeking to diffuse power in the government, created the process by which the Chief Executive could be held accountable for violating his oath of office. Should the House vote to impeach the President, he will remain in office and in charge of the Armed Forces. The act of impeachment is to indict Mr. Clinton on the above charges and it is the duty of the U.S. Senate to determine the guilt or innocence of the President. Two-thirds of the Senate must agree before the President can be removed from office. This deliberate process is far from what our Democrat friends have described today as a Republican ``coup d'etat.'' Furthermore, we are not judging the moral character of Mr. Clinton, we are holding him accountable for violating the laws the American people have entrusted him to enforce. History will judge us for what we do with these impeachment charges. The House must vote to approve these articles to maintain the integrity of our laws, indeed to preserve the integrity of our great nation. I urge my colleagues to look past their party affiliation to their conscience and vote for these articles of impeachment.

Mr. CRANE

Mr. CRANE. Mr. Speaker, before we adjourn I would like to address an issue that I regret we have been unable to resolve in this Congress. I am speaking about the plight of the Conservation Trust Fund of Puerto Rico. The Conservation Trust was created in 1968 through a memorandum of understanding between the Department of the Interior and the Government of Puerto Rico. The people of Puerto Rico are the sole beneficiary of the Trust which was created to carry out a conservation plan for the protection and enhancement of the natural resources and beauties of Puerto Rico. In this area the Trust has been highly successful, blending both environmental and historical sites in a manner that preserves them for generations to come. The Trust Fund has accomplished this at a time when the natural resources of Puerto Rico are shrinking rapidly under pressure from urban development and population growth. Even mountains, once inaccessible, are now impacted by new construction. A survey of the Island reveals dramatic contrasts in both its landscape and wildlife. Formed by volcanic eruptions more than 120 million years ago, Puerto Rico is small in land area--3,500 square miles. Yet it supports diverse biological communities including more than 3,000 plant species, 232 species of birds and numerous reptiles and amphibians. Many of these plants and animals are unique to the Island. A large percentage are included on the endangered species list, among them the Puerto Rican Parrot, one of the most endangered birds in the world. Puerto Rico's small land surface currently sustains 3.7 million inhabitants, a population density of 1,000 per square mile, the second largest in the hemisphere. This is translated into approximately one million dwellings. There are 1.8 million automobiles and four times more roads per square mile than on the United States mainland. It has been said that you can fit the entire population of Puerto Rico in the front seat of the cars on the Island. Moreover, in the metro area of San Juan, the constructed acreage has increased from 10,000 acres in 1950 to more than 60,000 acres by 1994. In Puerto Rico, the history of land conservation in the last century is scant. All major land reserves, such as the United States Forest Service Caribbean National Forest and other forests under government jurisdiction originate from Spanish colonial times. During the past 25 years the only significant efforts to preserve critical land resources has been conducted by the Conservation Trust. Even with this active role, only 5% of the Island of Puerto Rico is under some protection by either federal or local conservation agencies or by the Trust. This number is half the percentage of the United States and less than 25% that of Costa Rica. The Trust is the only real entity involved in land acquisition projects for conservation in Puerto Rico. In the original plan, the Trust was funded by a fee imposed by the Secretary of the Interior on the petroleum industry operating on the Island. This financial arrangement existed for approximately 10 years but, as the industry left the Island, a new source of funding became necessary. In the mid-1980s to mid-1990s that source became Section 936 of the Internal Revenue Code and the so-called QPSII (Qualified Possession Source Investment Income) provision of that law. This allowed the Trust to ultimately generate an income that reached a peak of $10 million annually. In 1993, the Trust realized that Section 936 might have a finite life span and halted all major property acquisitions and capital improvements. The Trust started saving money to build an endowment to fund the Trust in future years. It was estimated that approximately $80 million would need to be accumulated to achieve this goal. To this day roughly $30 million has been saved. Unfortunately, Section 936, which did much to raise the standard of living in Puerto Rico and expand employment opportunities throughout the Island, was phased out, over my objections, by Congress in 1996. With the elimination of Section 936, the Trust was left without a source of income to continue the savings program. Several alternatives were explored and, after a great deal of consideration, a consensus developed among the Trust supporters here in Congress. A legislative proposal was developed, in conjunction with the Governor of Puerto Rico, the Secretary of the Interior and my office to accomplish this task with the proposal's funding mechanism being tied to the rum tax that is collected on rum tax entering the U.S. from the Virgin Islands and Puerto Rico. A portion of this rum is returned (covered over) to Puerto Rico and the Virgin Islands and it was with a portion of this covered over amount that the Trust would receive funding for a five year period. It was the hope of me and many of my colleagues to implement a solution in this year's tax bill. Unfortunately, this did not happen. Under the excellent leadership of its Executive Director, Javier Blanco and its Deputy Executive Director, Jose Barreto, the Trust has done a superb job with limited resources in fulfilling its mission. With this statement, I want to assure my colleagues that, should I be reelected, I plan to continue to find an equitable solution to the plight faced by the Trust so that Javier and Jose can continue to do their good work.

Mr. CRANE

Mr. CRANE. Mr. Speaker, I wanted to take this opportunity before we adjourn to recognize the longest serving member of my staff, Thelma Hummel, for all the excellent work she has done over the years on behalf of thousands of Illinois citizens residing in Chicago's Northwest suburbs. Thelma has been a case worker with my office since 1988, and never will you find a more dedicated hardworking public servant. She has had to contend with the often frustrating task of trying to help constituents work with the many various agencies and departments which comprise our all too massive federal bureaucracy. While Members of Congress often receive credit for the good deeds our offices may accomplish in helping individual constituents, it is our staffs which deserve much of the recognition. My reputation, with respect to my constituents, has benefited greatly from all the excellent work Thelma has done for my office. Indeed, just the other day I received a letter from a constituent and veteran, Walter McCostlin, which served as another reminder of how much good Thelma has done over the years. Walter wrote that ``We are only as good as those with whom we associate and/or surround ourselves.'' Walter went on to say that ``Mrs. Hummel's dedication to seek truth and justice, devotion to uphold traits expected of government officials, and perseverance to safeguard [our] rights . . . cannot be surpassed. Her attention to duty and perseverance while supporting and assisting constituents . . . characterizes her as an example to be followed by all legislative employees.'' I could not have said it better, Mr. McCostlin. Mr. Speaker, the constituents of the 8th Congressional District of Illinois should be grateful and proud to have Thelma Hummel working for them.

Mr. CRANE

Mr. CRANE. Mr. Speaker, I yield back the balance of my time.

Mr. CRANE. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 4856) to make miscellaneous and technical changes to various trade laws, and for other purposes.

Mr. CRANE. Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days in which to revise and extend their remarks and include extraneous material on H.R. 4856.

Mr. CRANE. Mr. Speaker, I yield myself such time as I may consume. I rise in strong support of H.R. 4856. This legislation consists of a number of noncontroversial provisions which have been under review by the Committee on Ways and Means for the past 2 years. Each of these items enjoys bipartisan support, and many have been passed by the House in other pieces of legislation. The first section of the bill contains several technical corrections and miscellaneous amendments to trade laws, each of which have been reviewed by the administration as well as interested parties in the private sector. In addition to clerical corrections to trade statutes, these provisions contain various tariff suspensions and reductions, many of which apply to anti-HIV/AIDS and anti-cancer drugs as well as environmentally friendly chemical substitutes. The second category of provisions in the bill enables the U.S. Customs Service to provide enhanced service to air and sea passengers entering the United States. Specifically, the bill provides the necessary resources to allow Customs to continue to dedicate inspectors at airports in Canada, Bermuda and the Bahamas to facilitate the transit of U.S. bound air passengers before they reach the United States. The bill also provides the necessary resources to allow Customs to continue to dedicate inspectors to facilitate the transit of vessel passengers arriving at our seaports. These enhanced services will be provided out of the surplus in a specifically dedicated Customs user fee account. In addition, the bill assesses a $1.75 user fee on affected cruise ship passengers who currently pay nothing to the user fee account to offset the cost of providing dedicated cruise ship passenger service. The third section of the bill authorizes the President to determine that title IV of the Trade Act of 1974, commonly known as the Jackson- Vanik Amendment, should no longer apply to Mongolia and to extend unconditional normal trade relations to that country. The committee requested public comment on this proposal and received no negative comments. The United States first extended normal trade relations to Mongolia in 1991 under a presidential waiver from the Jackson-Vanik Freedom of Immigration criteria. In 1996, the President found Mongolia to be in full compliance with the Jackson-Vanik requirements. Two years ago Mongolia became a member of the World Trade Organization. Authorizing the President to determine that Jackson-Vanik should no longer apply to Mongolia is necessary for the United States to benefit from our rights under the WTO with respect to Mongolia. I would also like to note that the substance of the provision on Mongolia is identical to a bill, H.R. 36, that our colleague the gentleman from Nebraska (Mr. Bereuter) introduced on this issue earlier this year. I commend the gentleman from Nebraska for his contribution and leadership in raising this as an important matter in the 105th Congress. Finally, the legislation before us contains a revenue offset introduced yesterday by the gentleman from Texas (Mr. Archer) in coordination with the Treasury Department. It clarifies the tax treatment of certain transfers of assets and liabilities to corporations. The tax treatment of these transfers is unclear in situations involving the transfer of liabilities, and some taxpayers are structuring transactions to take advantage of the uncertainty. The provision in the bill before us is intended to eliminate this uncertainty and to focus on the underlying economics of these corporate transfers. This provision has already passed both the House and the Senate in substantially identical form earlier this year. It enjoys bipartisan support, and it is strongly supported by the administration. Mr. Speaker, overall I believe that the provisions in this bill represent our ongoing efforts to make government work better and be more responsive to the public, and I encourage my colleagues to support this bipartisan package. Mr. Speaker, I reserve the balance of my time.

Mr. CRANE. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, before yielding back the balance of my time, I would like to thank Jim Terpstra, Legislative Fellow, who has worked with us on the Subcommittee on Trade and who will be departing. We appreciate all of his efforts.

Mr. CRANE

Mr. CRANE. Mr. Speaker, thanks to White House scandals and an impeachment inquiry preoccupying the attention of Americans, the poor performance of this administration on the affairs of state has been overshadowed. This incompetence has proven costly--in terms of human life in Bosnia and in terms of financial capital in places like Russia. While the Clinton Administration and their allies at the International Monetary Fund, the IMF, would have you believe that Russia is merely experiencing the growing pains of a new market economy, nothing could be further from the truth. Instead, Russia has become a country run by thieves who respect none of the fundamental principles necessary for the establishment of a market economy. So money being poured into Russia by the IMF, courtesy of American taxpayers, is being heisted by criminals who buy, for example, chic real estate in France and a gambling casino in American Samoa. To get the real story on Russia, I commend to the attention of my colleagues an article by Arnaud de Borchgrave from the September 28, 1998 edition of the Washington Times, entitled ``Subsidizing the Kleptocracy.'' Mr. de Borchgrave points out that, contrary to the Clinton Administration and the IMF, Russia is not an emerging market economy and we deserve to know where all that foreign aid and IMF money is going. Subsidizing the Kleptocracy The handwriting has been on the Kremlin's walls for the past seven years. The late great reporter Claire Sterling's best seller ``Thieves World,'' published in 1994, documented the emergency of a criminally controlled Russian state--from top to bottom. But the U.S. national security establishment's Russian experts--Pied Pippered by Vice President Al Gore and Deputy Defense Secretary Strobe Talbott--not only walked by the wall looking the other way, but derided as ``loose cannons'' those who read the handwriting and took it seriously. Four years ago, President Boris Yeltsin, in what sounded like a cry of despair, said Russia had become the world's ``biggest mafia state . . . the superpower of crime.'' He felt overwhelmed by the lethal mix of oligarchs, former intelligence and security officers, organized crime gangs, and corrupt Soviet-era bureaucrats who had hijacked Russia's transition from a communist command economy. Mr. Yeltsin has launched seven major crackdowns against organized crime in seven years--all to no avail. And a year ago, he told the upper house of parliament that ``criminals have entered the political arena and are dictating our laws with the help of corrupt officials.'' Russia began its post-communist history as a kleptocracy, which has consolidated its power ever since, but still the Clinton administration's apologists and their IMF counterparts, all frequent travelers to Moscow where they chose to believe three sets of phony government books, insisted that Russia's looters were the latter-day equivalent of America's 19th century ``robber barons.'' A crucial difference was overlooked. The J.P. Morgans, Goulds, Vanderbilts and Villards made their fortunes by building railroads and new industries and creating jobs. They also reinvested their profits in the future of America, such as Thomas Edison's quest for electric light. By contrast, Russia's oligarchs and their corrupt allies in government took over state-owned industries at giveaway prices, bled them white by stripping their assets, and then stashed their loot in tax havens abroad. The IMF's Inspector Javert took a page out of Clouseau's notebook and failed to notice that privatization was camouflage for piracy. Garry Gasparov, the world chess champion, wrote in the Wall Street Journal on Sept. 1 that ``the mentality of Al Capone runs rampant among the highest circles in Russia today; Lucky Luciano's clones are filling vacancies at state and municipal levels.'' Yet what Western creditors were doing, in effect, was to subsidize the plunder. So it is hardly surprising that Russians who have not been paid in months are venting their anger at the U.S. administration and the International Monetary Fund. Anatoly Chubais, a tacit ally of the criminal class in reformer's clothing, has now conceded that Russia's negotiators had pulled thick wool over the not-too- inquisitive eyes of IMF's Russian ``experts.'' Russians know their government is now the world's most corrupt, forging ahead of Nigeria and Indonesia in those sleazy sweepstakes, but they blame the United States and IMF for not blowing the whistle on the scandal of the century. It was a gigantic Ponzi racket. What was funneled into Russia by the United States, Germany and international institutions was siphoned out through global money laundering schemes. ``Liability'' was not in a Russian banker's lexicon. All Western credits were treated as free money to be moved around as the oligarchs saw fit. For a two-year study for the Center for Strategic and International Studies on ``Russian Organized Crime,'' this journalist discovered the same spending pattern from Buenos Aires to Berlin, from Hamburg to Hong Kong, and from Tunisia to Thailand, and including London, Paris, Rome, New York and Los Angeles. Choice properties in the $5 million to $15 million range were purchased by Russia's oligarchs and their executives, and assorted crooks, the world over, even a gambling casino in American Samoa, always paid cash--in $100 bills carried in large suitcases. The record for private property is still held by Boris Berezovsky, who parlayed a car dealership into a $3 billion empire in five years and served as Mr. Yeltsin's deputy national security adviser. He bought the Chateau de la Garoupe and an adjoining property, and 50 well-manicured acres at Cap d'Antibes, France's most expensive real estate, for $70 million. For several years, Russians were laundering about $1 billion a month through Cyprus (where some 4,000 Russian shell companies hang their shingles) and another $1 billion through Israel. Before he was ousted last March as Interior Minister, Gen. Anatoly Kulikov estimated that some $200 billion had been spirited abroad since the implosion of the Soviet Union--perhaps not coincidentally the same amount of foreign debt Russia may default on in the next few years. When Gen. Kulikov visited Washington last June, he said he now believed the amount was at least $300 billion in six years. It was the age of greed run amok. But apologists in the United States, from left to right, continued to insist the hemorrhaging was no more than a nosebleed--at most $50 billion--and that it was a healthy manifestation of the growing pains of democracy and market economics. That powerful Russian opposition voices called what was happening a parody of democracy and an economic kleptocracy didn't seem to faze them. Even after Grigory Yavlinsky wrote in July 1997 that the longer ``the path which Russia is traveling is concealed, the higher the price will be for everyone,'' the conspiracy of silence continued in Washington. Russia's oligarchs had hired top-flight legal talent in Washington and New York soon established themselves as the opposite numbers of America's captains of industry. With a straight face, one shady Russian tycoon told a foreign policy group. ``There is much more crime in America than in Russia.'' Hearing after congressional hearing was held on Russian organized crime, only to be ignored by top U.S. policy- makers. The CIA was even discouraged by the White House from reporting on Russia's covert financial shenanigans around the world. And until recently, George Soros, the international financier who once broke the Bank of England, taking home a cool $1 billion, sided with the apologists. Now Mr. Soros says, belatedly, the Russia situation is ``cataclysmic'' and that ``we should have done more to prevent the crisis.'' This was the same Mr. Soros who concealed the truth about the great Russian robbery throughout the 1990s and even assured us that democracy was flourishing. Vice President Al Gore went out of his way not to embarrass his good friend Viktor Chernomyrdin, the godfather of the oligarchs who was finally ousted as prime minister last March after five years in office--only to be resuscitated by his friend Mr. Berezovsky and foisted on Mr. Yeltsin for a few days before the Duma sent him packing again. Messrs. Yeltsin and Chernomyrdin convinced Messrs. Clinton, Gore and Talbott and anyone else they spoke to that American aid and IMF loans had to continue because Russia still possessed 24,000 nuclear weapons and warheads and hundreds of tons of weapons-grade nuclear materials that could all become vulnerable to theft if Russia were cut adrift. But they were just as vulnerable while Western assistance was being ripped off and scores of millions were pushed below the poverty line. It was this kind of nuclear blackmail that prodded the apologists to silence FBI Director Louis Freeh. He had testified before Congress in 1996 and 97, explaining that from one year to the next Russia's organized crime syndicates had increased the number of countries where they had established relations with criminal counterparts from 29 to 50. When CSIS' report on Russian Organized Crime was released a year ago, Mr. Freeh was quick to endorse it. But as he left for Moscow a month later, senior U.S. officials persuaded Mr. Freeh to backtrack and at a joint news conference with Mr. Kulikov he said his congressional testimony had been misunderstood. The CSIS report found that ``Russian organized crime had extended its tentacles throughout Russia's economy,'' which confers an aura of legitimacy to myriad illicit activities, including the manipulation of Russia's banking system and financial markets.'' It concluded that ``if the forces of organized crime are not stymied Russia will complete its devolution into a criminal-syndicalist state. The U.S. would then be faced with an agonizing reappraisal of its diplomatic and commercial relations with Russia.'' The reappraisal is now at hand. In the debate about ``Who lost Russia,'' congressional hearings should focus on the big coverup. And as a condition for further aid, why shouldn't Congress insist on a full accounting of every dollar of U.S. aid and IMF bailouts?

Mr. CRANE

Mr. CRANE. Mr. Speaker, I yield as much time as he may consume to the gentleman from California (Mr. Dreier), our distinguished colleague from the Committee on Rules.

Mr. CRANE. Mr. Speaker, I yield myself the balance of my time. Mr. Speaker, I again rise in strong opposition to House Resolution 598. I do this not because I dispute the seriousness of the issue at hand, but because I believe that the methods being used are significantly misguided, and will lead to a downward spiral of protectionism. The proponents of this resolution argue that the Asian financial crisis has led countries to dump their products on the U.S. market at below fair market prices. In response, the proponents of House Resolution 598 call upon the President to impose a 1-year ban on imports of steel products from the countries listed in the resolution, many of whom are suffering from severe financial and economic difficulties. I believe that this response would send a very bad signal to the governments of the targeted countries, at a time when the United States is encouraging them to adopt market-opening policies which will bring long-term stability to their economies. Moreover, terminating U.S. purchases of steel from these countries through an import ban would likely worsen the economic crisis faced by these countries and create more turmoil in the region. I believe it is in our interest to maintain a more constructive approach to this problem by working with our friends and allies in this critical region of the world. On this basis, the gentleman from Texas (Chairman Archer) introduced a resolution, House Concurrent Resolution 350, which was brought to the House floor for a vote on October 12. This resolution called upon the President to pursue vigorous enforcement of U.S. trade laws with respect to steel; to negotiate with Japan, Korea, and the European Union to eliminate barriers and open their markets to the glut of steel on the market; to closely monitor import levels; and to report to Congress by January 5 on the impact the significant increase in steel imports is having on employment, prices, and investment in the United States. Passage of House Concurrent Resolution 350 would have sent a strong, clear, and united message to the President and to the world that Congress is deeply concerned about this issue. Unfortunately, many of the proponents of the resolution before us today chose to politicize this matter by voting against House Concurrent Resolution 350, and they defeated the resolution. Mr. Speaker, I have no disagreement with the proponents of House Resolution 598 about the seriousness of the impact that the increase in steel imports is having on the U.S. industry and on its workers. However, I believe that their approach is not only the wrong solution, but that it may lead to more severe problems in Asia that could have far more serious repercussions for the world. I urge my colleagues to oppose House Resolution 598.

Mr. CRANE. Mr. Speaker, I yield 2 minutes to the gentleman from New York (Mr. Houghton). (Mr. HOUGHTON asked and was given permission to revise and extend his remarks.)

Mr. CRANE. Mr. Speaker, I yield myself such time as I may consume. I rise in opposition to H. Res. 598 which calls upon the President to impose an import ban on steel products from 11 steel producing countries. While I support using our trade laws to address the question of whether steel is being traded unfairly resulting in injury to the U.S. industry and its workers, I oppose H. Res. 598 because it would circumvent this established process in violation of our obligations in the World Trade Organization. The normal procedure provided under law for U.S. industries to seek relief from dumped imports begins with the domestic industry filing an antidumping petition with the Commerce Department. The law in this area has been developed in compliance with U.S. obligations in the Antidumping Code under the WTO. H. Res. 598 not only violates the procedures established under U.S. law for making dumping determinations, it calls for action, specifically an outright import ban, that is well beyond the remedy prescribed in this situation. The action proposed by H. Res. 598 would make us vulnerable to challenge in the WTO and possible retaliation by our trading partners against U.S. exports in their own markets, a completely counterproductive result. Moreover, noncompliance with our own antidumping procedures makes it more difficult for us to convince our trading partners not to erect arbitrary barriers to U.S. exports that they consider undesirable. As Ben Franklin rightly pointed out, ``A good example is the best sermon.'' Recently I understand that the U.S. steel industry filed a number of antidumping petitions with the Commerce Department in compliance with U.S. law. I would encourage them to continue to pursue relief consistent with U.S. law. Passage of H. Res. 598, however, undermines U.S. interests and objectives in the WTO and puts at risk U.S. exports in other sectors. I urge my colleagues to oppose H. Res. 598. Mr. Speaker, I reserve the balance of my time.

Mr. CRANE

Mr. CRANE. Mr. Speaker, I rise to raise a question of the privileges of the House, and I offer a privileged resolution (H. Res. 601) returning to the Senate the bill S. 361, and ask for its immediate consideration.

Mr. CRANE. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, this resolution is necessary to return to the Senate the bill S. 361, because it contravenes the constitutional requirement that revenue measures shall originate in the House of Representatives. S. 361 would create a new basis for applying import restrictions and therefore violates this constitutional requirement. S. 361 proposes amending the Rhinoceros and Tiger Conservation Act of 1994 to prohibit the sale, import and export of products intended for human consumption or application that contain, or are labeled as containing, any substance derived from rhinoceroses or tigers. The legislation passed by the other body would have the effect of creating a new basis and mechanism for applying import restrictions. The provision would have a direct effect on tariff revenues. The proposed change in our import laws is a ``revenue affecting'' infringement on the prerogatives of the House which constitutes a revenue measure in the constitutional sense. Therefore, I am asking that the House insist on its constitutional prerogatives. There are numerous precedents for the action I am requesting. For example, on April 16, 1996, the House returned to the Senate S. 1463, amending the definition of industry under the Safeguard Law with respect to investigations involving imports of perishable agricultural products. On February 25, 1992, the House returned to the Senate S. 884, requiring the President to impose sanctions, including import restrictions, against countries that fail to eliminate large-scale driftnet fishing. I want to emphasize that this action does not constitute a rejection of the Senate bill on its merits. In fact, the House passed H.R. 2807 on April 28, 1998, which contains an import ban on the same products covered by the Senate bill. S. 361, however, was passed by the other body as a freestanding bill in contravention to the constitutional requirement that revenue measures originate in the House of Representatives. Since the passage of S. 361, the Senate amended the House-passed bill, H.R. 2807, on October 13, 1998, and on the following day the House agreed to the Senate amendments. By amending a House- passed bill which already contained a revenue provision, the Senate acted on this matter in compliance with the Constitution and the House has responded by concurring in the Senate language. Accordingly, the proposed action today is purely procedural in nature and is necessary to preserve the prerogatives of the House to originate all revenue matters. It makes clear to the Senate that the appropriate procedure for dealing with revenue measures is for the House to act first on a revenue bill and for the Senate to accept it or amend it as it sees fit. Mr. Speaker, I have no requests for time, I yield back the balance of my time, and I move the previous question on the resolution. The previous question was ordered.

Mr. CRANE

Mr. CRANE. Mr. Speaker, because I was not able to come to the floor at the time our colleagues offered their special testimony honoring my good friend, Harris Fawell, I wish to add my tribute to their words of admiration and praise. During his fourteen industrious years of dedicated effort in solving some of the most complex and challenging problems one can find on this Hill, Harris has been the acknowledged mentor of many of us in our attempt to understand some of the more difficult problems we face in the Congress. In matters such as labor law, labor relations, health insurance, retirement savings, education, waste in government, and other issues fraught with complicated technical questions, many of us turned to Harris for his wise counsel. His legendary ability to explain and interpret the most intricate details with great clarity was the result of his commitment to working hard to master the difficult and the abstruse. Mr. Speaker, one measure of a man's ability to make a difference in this Congress--or anywhere in this world--is how he is looked upon by his own staff. One of our fellow Illinoisians, John Shimkus, read a testimony on the floor the other day which was written by the members of Harris' staff. Here is just part of that expression of respect and love which the Fawell staffers displayed in the tribute: In these cynical times, it is easy for staffers to become disillusioned with government service. Working with you has shown us how an honest and caring man of integrity can still make a difference here in Washington. Our time with you has maintained our faith in leadership. The staff referred to Harris' kindness, humility and quiet leadership, and said further, Harris, they say that the ship reflects the captain. We count ourselves lucky to have been on the Fawell ship. We can only hope that we have been a reflection of you and that we will be, even as you sail on other seas. This is remarkably touching testimonial to the quiet strength and goodness which his colleagues have long since found in the representative from the Thirteenth District of Illinois. Many of us hope that we might be worthy of such a tribute from our staffs when we, too, find it is time to sail on other seas. After the retirement of our old friend, John Erlenborn, Harris took over his place on what is now the Committee on Education and the Work Force, and in tandem with Chairman Bill Goodling, has made the Committee the source of many strong legislative initiatives for the good of the American citizens, particularly in the area of education. Mr. Jerry Solomon, our very good friend who is also going to be missed so much in the future, has said that he always knew that he could do no wrong in voting the same way Harris did, because Harris ``never came to this floor without being prepared.'' Such is the kind of trust his colleagues continuously felt in Harris' judgment. Through his no-nonsense early concern about federal waste, and with his invention of the ``Pork Busters'' program, Harris started the beginning initiatives leading to today's balanced budget success. His colleagues know how hard he has worked to make this a more frugal government, and the constituents in his district will surely miss this kind of leadership on their behalf. Mr. Speaker, there are endless additional reasons why this Congress will have a hard time filling the void which will be left when this good man sails on to other seas. His will surely be the greater enjoyment during retirement because he will have the satisfaction of knowing that he has served his country, his colleagues, and his constituents so very well. We send him on his way with favorable winds at his back, and bid him a heart-felt God bless, Harris, and Godspeed!

Mr. CRANE

Mr. CRANE. Mr. Speaker, I particularly regret that I was not able to be on the floor when our colleagues offered their fine tributes to my very good friend, Lee Hamilton, the Representative from the Ninth District in the historic southeastern part of Indiana. I wish to add my voice to the strong chorus of admiration and praise with which so many members on both sides of the aisle saluted this very special legislator who has spent a third of a century in the service of his country. Not too many of our colleagues know that as fellow Hoosiers, Lee and I were college students for awhile at DePauw University in Indiana, that we each spent some time studying in German universities, and both later got higher degrees at Indiana University. Few members also realize that Lee was inducted into the Indiana Basketball Hall of Fame for his prowess in the sport at Evansville Central High School as well as at DePauw University, where he also starred. In those early days he was the tall, rangy player on a basketball court. Since his arrival in Congress in 1964 he has been a towering figure in this body, where the absence of his sage counsel, his good common sense and immense expertise will surely be felt by all of us for many years to come. Unfortunately, we are not likely to see the likes of the Honorable Lee Hamilton very soon again in these halls. During our concomitant tours in Congress, Lee and I have often had common interests and similar concerns about issues vital to the United States. When it came to what was best for the citizens of this country, no one has shown more determination than he has in putting the interests of the nation first. Indeed, in pursuit of proper solutions he has not hesitated to criticize his own party when he felt it necessary. More often than not I have shared his views in matters of importance to the country. I especially appreciated his long support for free trade as the engine which drives international commerce and brings so many jobs to Indiana and Illinois. His fellow Members look with admiration at the formidable array of accomplishments of this dedicated statesman. Seldom has one man had so many responsible positions during a career in this Congress. Lee was at one time or other Chairman of the Intelligence Committee, Chairman of the Joint Economic Committee, Chairman of International Relations, Co- Chairman of the Joint Committee on the Organization of Congress, and Co-Chairman of the Task Force on Foreign Assistance--to say nothing at all of his subcommittee chairmanships. Few members have ever had so comprehensive a grasp of so many issues of national importance. As an historian I have shared Lee's great concern with the long-term consequences of important foreign policy decisions. I have applauded his extensive experience and especially his responsible efforts to create a bipartisan foreign policy. Often enough in the search for solutions to problems involving other nations, fellow members have sought his advice, knowing that his judgment would be even-handed and based on a wealth of knowledge of world affairs that few members have attained. Indeed, word has it that because of his stature in this body, Lee has been urged more than once to consider various higher positions such as governor or senator, but has preferred to remain loyal to his commitments to the House. It is also common knowledge that he has been considered for the post of Secretary of State by past presidential candidates and by the present administration--a position for which no one could be more qualified. Indeed so preeminent are his qualifications in a great variety of disciplines that he has already been chosen as the Director of the Woodrow Wilson International Center for Scholars and will take up his duties in January. He has also agreed to establish a center at Indiana University--his old alma mater and mine--to develop a better understanding of this Congress, with the hope that American citizens might better appreciate the complexities of the legislative process and what their representatives are doing on their behalf. So it is with mixed emotions that I salute my fellow Member from Indiana who has come so far and achieved so much since we both attended the same great Hoosier schools so long ago. He will not be far away at the Wilson Center here in Washington, and we hope he will be able to walk over to the Floor as often as he can so that his presence will serve as a continuing role model for younger Members, and as a reminder that his legacy of comity and bipartisanship should continue to permeate our efforts here in House. Lee, your departure will create an enormous need in this House to replace the kind of civility, wise balance, and professionalism with which your presence here has always been marked. We send you on your way with every special blessing, and in continuing gratitude for your new work in the cause of humanity. God Bless, Lee, and Godspeed!

Mr. CRANE

Mr. CRANE. Mr. Speaker, one of the biggest issues being negotiated between our Congressional Leadership and the White House is funding for the International Monetary Fund, the IMF. Indeed, debate over how best to address the various international financial crisis de jour is taking place all over the world. I urge the Leadership to consider the thoughts of monetary policy experts like the Nobel Prize winning economist Milton Friedman. Specifically, I commend to my colleagues' attention an article from the Tuesday, October 13, 1998 edition of the Wall Street Journal by Mr. Friedman entitled: ``Markets to the Rescue''. Among other ideas, Mr. Friedman suggests that the IMF's interventions in markets around the world has caused or exacerbated the various economic crises which, in turn, are having a significant impact on the otherwise healthy U.S. economy. I urge my colleagues to consider what Mr. Friedman has to say about the IMF before we give one more dime of our taxpayers' money to that international agency. [From the Wall Street Journal, Oct. 13, 1988] Markets to the Rescue (By Milton Friedman) The air is rife with proposals to reform the International Monetary Fund, increase its funds and create new international agencies to help guide global financial markets. Indeed, Congress and the Clinton administration spent much of the last week's budget negotiations find-tuning the details of the U.S.'s latest $18 billion IMF subvention package. Such talk is on a par with the advice to the inebriate that the cure for a hangover is the hair of the dog that bit him. As George Shultz, William Simon and Walter Wriston wrote on this page in February: ``The IMF is ineffective, unnecessary, and obsolete. We do not need another IMF. . . . Once the Asian crisis is over, we should abolish the one we have.'' Centralized planning works no better on the global than on the national level. The IMF was established at Bretton Woods in 1944 to serve one purpose and one purpose only: to supervise the operation of the system of fixed exchange rates also established at Bretton Woods. That system collapsed on Aug. 15, 1971, when President Nixon, as part of a package of economic changes including wage and price ceilings, ``closed the gold window''--that is, refused to continue the commitment the U.S. had undertaken at Bretton Woods to buy and sell gold at $35 an ounce. The IMF lost its only function and should have closed shop. international Agencies But few things are so permanent as government agencies, including international agencies. The IMF, sitting on a pile of funds, sought and found a new function: serving as an economic consulting agency to countries in trouble--an agency that was unusual in that it offered money instead of charging fees. It found plenty of clients, even though its advice was not always good and, even when good, was not always followed. However, its availability, and the funds it brought, encouraged country after country to continue with unwise and unsustainable policies longer than they otherwise would have or could have. Russia is the latest example. The end result has been more rather than less financial instability. The Mexican crisis in 1994-95 produced a quantum jump in the scale of the IMF's activity. Mexico, it is said, was ``bailed out'' by a $50 billion financial aid package from a consortium including the IMF, the U.S., other countries and other international agencies. In reality Mexico was not bailed out. Foreign entities--banks and other financial institutions--that had made dollar loans to Mexico that Mexico could not repay were bailed out. The internal recession that followed the bailout was deep and long; it left the ordinary Mexican citzen facing higher prices for goods and services with a sharply reduce income. That remains true today. The Mexican bailout helped fuel the East Asian crisis that erupted two years later. It encouraged individuals and financial institutions to lend to and invest in the East Asian countries, drawn by high domestic interest rates and returns on investment, and reassured about currency risk by the belief that the IMF would bail them out if the unexpected happened and the exchange pegs broke. This effect has come to be called ``moral hazard,'' though I regard that as something of a libel. If someone offers you a gift, is it immoral for you to accept it? Similarly, it's hard to blame private lenders of accepting the IMF's implicit offer of insurance against currency risk. However, I do blame the IMF for offering the gift. And I blame the U.S. and other countries that are members of the IMF for allowing taxpayer money to be used to subsidize private banks and other financial institutions. Seventy-five years ago, John Maynard Keynes pointed out that ``if the external price level is unstable, we cannot keep both our own price level and our exchanges stable. And we are compelled to choose.'' When Keynes wrote, he could take free capital movement for granted. The introduction of exchange controls by Hjalmar Schacht in the 1930's converted Keynes's dilemma into a trilemma. Of the three objectives-- free capital movement, a fixed exchange rate, independent domestic monetary--free capital movement, a fixed exchange rate, independent domestic monetary policy--any two, but not all three, are viable. We are compelled to choose. The attempt by South Korea, Thailand, Malaysia and Indonesia to have all three--with the encouragement of the IMF--has produced the external financial crisis that has pummeled those countries and spread concern around the world, just as similar attempts produced financial crisis in Britian in 1967, in Chile in the early 1980's, in Mexico in 1995 and in many other cases. Some economists, notably Paul Krugman and Joseph Stiglitz, have suggested resolving the trilemma by abandoning free capital movement, and Malaysia has followed that course. In my view, that is the worst possible choice. Emerging countries need external capital, and particularly the discipline and knowledge that comes with it, to name the best use of their capacities. Moreover, there is a long history demonstrating that exchange controls are porus and that the attempt to enforce them invariably leads to corruption and an extension of government controls, hardly the way to generate healthy growth. Either of the other alternatives seems to me far superior. One is to fix the exchange rate, by adopting a common or unified currency, as the states of the U.S. and Panama (whose economy is dollarized) have done and as the participants in the Euro propose to do, or by establishing a currency board, as Hong Kong and Argentina have done. The key element of this alternative is that there is only one central bank for the countries using the same currency: the European Central Bank for the Euro countries; the Federal Reserve for the other countries. Hong Kong and Argentina have retained the option of terminating their currency boards, changing the fixed rate, or introducing central bank features, as the Hong Kong Monetary Authority has done in a limited way. As a result, they are not immune to infection from foreign-exchange crises originating elsewhere. Nonetheless, currency boards have a good record of surviving such crises intact. Those options have not been retained by California or Panama, and will not be retained by the countries that adopt the Euro as their sole currency. Proponents of fixed exchange rates often fail to recognize that a truly fixed rate is fundamentally different from a pegged one. If Argentina has a balance of payments deficit-- if dollar receipts from abroad are less than payments due abroad--the quantity of currency (high-powered or base money) automatically goes down. That brings pressure on the economy to reduce foreign payments and increase foreign receipts. The economy cannot evade the discipline of external transactions; it must adjust. Under the pegged system, by contrast, when Thailand had a balance of payments deficit, the Bank of Thailand did not have to reduce the quantity of high-powered money. It could evade the discipline of external transactions, at least for a time, by drawing on its dollar reserves or borrowing dollars from abroad to finance the deficit. Such a pegged exchange rate regime is a ticking bomb. It is never easy to know whether a deficit it transitory and will soon be reversed or is a precursor to further deficits. The temptation is always to hope for the best, and avoid any action that would tend to depress the domestic economy. Such a policy can smooth over minor and temporary problems, but it lets minor problems that are not transitory accumulate. When that happens, the minor adjustments in exchange rates that would have cleared up the initial problem will no longer suffice. It now takes a major change. Moreover, at this stage, the direction of any likely change is clear to everyone--in the case of Thailand, a devaluation. A speculator who sold the Thai baht short could at worst lose commissions and interest on his capital since the peg meant that he could cover his short at the same price at which he sold it if the baht was not devalued. On the other hand, a devaluation would bring large profits. Many of those responsible for the East Asia crisis have been unable to resist the temptation to blame speculators for their problems. In fact, their policies gave speculators a nearly one-way bet, and by taking that bet, the speculators conferred not harm but benefits. Would Thailand have benefited from being able to continue its unsustainable policies longer? Capital controls and unified currencies are two ways out of the trilemma. The remaining option is to let exchange rates be determined in the market predominantly on the basis of private transactions. In a pure form, clean floating, the central bank does not intervene in the market to affect the exchange rate, though it or the government may engage in exchange transactions in the course of its other activities. In practice, dirty floating is more common: The central bank intervenes from time to time to affect the exchange rate but does not announce in advance any specific value that it will seek to maintain. That is the regime currently followed by the U.S., Britain, Japan and many other countries. Floating Rate Under a floating rate, there cannot be and never has been a foreign exchange crisis, though there may well be internal crises, as in Japan. The reason is simple: Changes in exchange rates absorb the pressures that would otherwise lead to crises in a regime that tried to peg the exchange rate while maintaining domestic monetary independence. The foreign exchange crisis that affected South Korea, Thailand, Malaysia and Indonesia did not spill over to New Zealand or Australia, because those countries had floating exchange rates. As between the alternatives of a truly fixed exchange rate and a floating exchange rate, which one is preferable depends on the specific characteristics of the country involved. In particular, much depends on whether a given country has a major trading partner with a good record for stable monetary policy, thus providing a desirable currency with which to be linked. However, so long as a country chooses and adheres to one of the two regimes, it will be spared foreign-exchange crises and there will be no role for an international agency to supplement the market. Perhaps that is the reason why the IMF has implicitly favored pegged exchange rates. The present crisis is not the result of market failure. Rather, it is the result of governments intervening to or seeking to supersede the market, both internally via loans, subsidies, or taxes and other handicaps, and externally via the IMF, the World Bank and other international agencies. We do not need more powerful government agencies spending still more of the taxpayers' money, with limited of nonexistent accountability. That would simply be throwing good money after bad. We need government, both within the nations and internationally, to get out of the way and let the market work. The more that people spend or lend their own money, and the less they spend or lend taxpayer money, the better.

Mr. CRANE

Mr. CRANE. Madam Speaker, I yield myself such time as I may consume. Madam Speaker, House Concurrent Resolution 350 recognizes that the U.S. steel industry is experiencing difficulties as a result of a significant increase in imports of steel into the United States, and calls on the President to take all measures under existing law to respond to this increase. The financial crisis or crises in Asia and Russia have made a number of industries, including steel, vulnerable to increased imports from countries seeking to bolster their currencies and improve the current account balances. This resolution is tough but fair, and I urge my colleagues to support it. I support using our existing trade laws to address the question of whether steel is being traded unfairly and injuring our industry and workers. In fact, I understand that the steel industry has brought a number of antidumping petitions within the last 2 weeks. I urge the industry to continue to pursue this track, and the Commerce Department and the International Trade Commission to consider these petitions promptly. Some say that we should change our trade laws in advance to accommodate these cases before they have been decided. Much as I sympathize with the plight of the U.S. steel industry and its workers, I believe it would be premature to make such changes. First, we must not prejudge or interfere with the outcome of pending litigation. Second, we must resist the urge to unilaterally close our markets at this delicate time. Shutting our doors through protection would set a bad example for Asia and Russia, and for the rest of the world, that closed trade is an acceptable policy in difficult economic times. History shows us that it clearly is not. We should not tolerate policies that limit imports of our goods and services, and we should not permit Asia and Russia to increase U.S.-bound exports excessively, to the detriment of our companies and workers. Instead, we must pursue trade liberalization abroad by action to increase our access to other markets. We should be on the lookout for increased Asian and Russian trade barriers. We must also encourage Japan to open its markets to absorb excess capacity from its neighbors. In short, we have to do everything we can to get the Asian region and Russia back to health so their consumers may continue to purchase our goods and services and create opportunities for our companies and workers. The financial crisis is an opportunity to foster trade liberalization in these markets, make systematic changes that will open markets, increase transparency, and bolster confidence. Accordingly, the resolution calls upon the President to pursue vigorous enforcement of U.S. trade laws relating to unfair trade practices using all remedies available under all those laws, pursue consultations with our trading partners to eliminate barriers and increase access to those markets, closely monitor U.S. imports of steel, make that data available to the public, and report to Congress by January 5 on the impact the significant increase in steel imports is having on employment, prices, and investment in the industry. I would like to congratulate several of my colleagues for their role in bringing this resolution to the floor today, including the gentleman from Pennsylvania (Mr. English), the gentleman from Ohio (Mr. Regula), and the gentleman from Illinois (Mr. Weller). I would particularly like to thank the gentleman from Alabama (Mr. Aderholt), who, while not a member of the Committee on Ways and Means, has worked hard on this issue. Madam Speaker, I urge my colleagues to vote for this resolution, which sends a strong warning to our trading partners that we are on the lookout for our steel industry and its workers. Madam Speaker, I reserve the balance of my time.

Mr. CRANE

Mr. CRANE. Mr. Speaker, on behalf of myself, as chairman of the Ways and Means Trade Subcommittee, and my distinguished colleague and ranking member of the Subcommittee, Robert Matsui, I rise today to inform my colleagues of a critically important telecommunications trade issue. While companies from around the world are busy developing innovative new wireless telecommunications devices, potentially serious roadblocks to the free trade of these products are being erected in the form of exclusionary standards. The European Union (EU) is on the verge of adopting legislation that would mandate the use of exclusionary third generation wireless standards incompatible with existing American-developed telecommunications equipment and systems. If this measure were adopted, all other technologies, specifically American-developed technology, would be blocked from competing in Europe as a matter of law. In addition, the European Telecommunications Standards Institute (ETSI) recently adopted a single third generation wireless standard, Wideband CDMA (W-CDMA), and has submitted this one standard to the International Telecommunications Union (ITU) for approval. This is an inappropriate role for Europe's regulators: picking winners by administrative fiat. That is the role of the marketplace. These regulations will harm the United States in numerous ways. American jobs will be lost, American-developed telecommunications products and services will quickly become obsolete, and billions of dollars of American investment that built telecommunications networks will be kept out of Europe's vast marketplace. It should be noted that no such arbitrary rules prevent European developed technologies from competing for customers in the American market. Further, the EU's actions in this regard run directly counter to the laudable trade liberalization goals contained in the Transatlantic Economic Partnership (TEP)--a recently announced initiative between the EU and the United States. In response to a recent inquiry made by Mr. Matsui regarding this issue, U.S. Trade Representative Charlene Barshefsky stated that the administration would actively monitor the EU's commitment to transparent and non-trade distorting standards, including the possible use of the World Trade Organization dispute settlement procedures. Congressman Matsui and I are concerned that the same problem may emerge in Japan. Japan is also considering a new wireless telecommunications standard and could adopt an identical exclusionary standard as Europe, which could have the same effect in disadvantaging U.S. suppliers. Such actions by Japan and Europe threaten to disrupt the fair and objective evaluation of telecommunications standards currently underway at the International Telecommunications Union (ITU). If countries prematurely adopt standards and make them mandatory before the ITU has fully evaluated different proposals and had a chance to encourage harmonization, then a valuable opportunity to ensure fairness and consideration of global needs will have been lost. In the Americas, we have tried to build a consensus on how to approach the development of wireless standards through the Inter- American Telecommunication Commission (CITEL). On September 18, a CITEL resolution was adopted to guide member states participating in the ITU standards process. The guidelines were designed to ensure that the standards selection process does not adversely affect users and suppliers of existing wireless networks based on U.S. technology, which must incorporate a new standard to provide advanced services. The United States strongly endorsed these principles and on September 30, formally asked Japan to adopt similar principles as it considers its new wireless standards. As the representatives of the Ways and Means Trade Subcommittee, Mr. Matsui and I urge our colleagues to insist that the telecommunication markets in Europe and Japan open themselves to American innovation, in the same manner that American markets are open to foreign competition. We anticipate that this issue will be an important one for the 106th Congress. The Congress, together with Office of the United States Trade Representative, will vigorously monitor this important trade issue, ensuring that the worldwide market in this rapidly emerging technology is open for American-developed technologies and standards.

Mr. CRANE

Mr. CRANE. Mr. Speaker, today, I am introducing, along with Representatives Nancy Johnson, Barbara Kennelly, Jim Ramstad and Jerry Weller, legislation which would repeal a number of limitations contained in the consolidated return provisions of the Internal Revenue Code. These limitations, which were enacted in 1976, are a relic from a time when the financial services world, and the taxation of financial institutions, particularly insurance companies, was far different from today. The limitations serve no purpose today other than to make the application of the tax laws more complicated for both the taxpayers who have to follow them and for the Internal Revenue Service which must devote an inordinate amount of resources to review the tax returns when they are filed. Needless to say, these restrictions also place affiliated groups of corporations which include life insurance companies at an economic disadvantage compared with other corporate groups. I had hoped that we would have been able to consider tax simplification in the consolidated return provisions this year, as part of our ongoing efforts to make the tax laws easier to understand and administer. Unfortunately, that did not happen. It is my hope that introduction of this bill now will serve as a vehicle to focus attention on this problem and lead to repeal of these limitations when we consider tax legislation next year. Background With that introduction, I would like to give a short explanation of the issues that this legislation addresses. The consolidated return provisions in the tax laws were enacted so that the members of an affiliated group of corporations could file a single tax return. The right to file a ``consolidated'' return is available regardless of the nature or variety of the businesses conducted by the affiliated corporations. The thinking behind this is easy to understand. We should be taxing a complete business entity, not separate parts. It should not matter whether an enterprise's businesses are operated as divisions within one corporation or as subsidiary corporation with a common parent company. If the group is one economic unit, it should have to file only one tax return each year. The tax return should reflect the taxable income of the entire enterprise. Corporate groups which include life insurance companies, however, are denied the ability to file a single consolidated return until they have been affiliated for at least five years. Even after groups with life insurance companies are permitted to file on a consolidated basis, they are subject to two additional limitations that do not apply to any other type of affiliated group. First, non-life insurance companies must be members of an affiliated group for five years before their losses may be used to offset life insurance company taxable income. Second, non-life insurance affiliate losses (including current year losses and any carryover losses) that may offset life insurance company taxable income are limited to the lesser of 35 percent of life insurance company taxable income or 35 percent of the non-life insurance company's losses. Prior to 1976, life insurance companies could not file consolidated returns with other affiliated companies. The inability to file consolidated returns was of little consequence until the 1960s and early 1970s when states first began to change the laws to allow life insurance companies to have subsidiaries. Thus, the rules in present law were considered a modest step in the right direction. The historical argument against allowing life insurance companies to file consolidated returns with other, non-life companies was that life insurance companies were not taxed on the same tax base as non-life companies. This argument is unfounded today. Prior to 1958, life insurance companies were taxed under special formulas that did not take their underwriting income or loss into account. Legislation enacted in 1959 took a major step toward taxing life insurance companies on both their investment and underwriting income. In fact, at the time the present law rules were under consideration in 1976, the Treasury Department took the position that full consolidation was consistent with sound tax policy. In 1984 and 1986, Congress reviewed the taxation of life insurance companies and made a number of substantial changes that have resulted in these companies being subject to tax on their total income at the regular corporate tax rates. Today, life insurance companies are as fully taxed on their income as are other corporations. There is no reason to treat them differently today. The Problem The current restrictions placed affiliated groups of corporations which include life insurance companies at an economic disadvantage compared with other corporate groups and also create substantial administrative complexities for taxpayers and the Internal Revenue Service. The five-year limitations, in particular, create irrational disparities between groups containing life insurance companies and other consolidated groups. Let me provide three examples: 1. When a consolidated group acquires a target consolidated group with a life insurance company member, the target group is deconsolidated. This means that, unlike other groups, intercompany gains in the target group would be triggered into income while losses would continue to be deferred. 2. For the five year period following a consolidated group's acquisition of a life insurance company, gains on any intercompany transaction cannot be deferred. Gains of other groups, which are allowed to file a consolidated return, are allowed to be deferred. 3. Section 355 spin off transactions raise questions concerning the five year ineligibility period for the spun-off company even if the group had existed and been filing a consolidated return for many years. The ability to file consolidated returns is particularly important for affiliated groups containing life insurance companies. Many corporations in other industries can, in effect, consolidate the returns of affiliates by establishing divisions within one corporation, rather than operating as separate corporations. Unfortunately, state law and other, non-tax, business considerations generally require a life insurance company to conduct its non-life business through subsidiaries. The inability to file consolidated returns thus operates as an economic barrier inhibiting the expansion of life insurance companies into related areas. Solution There are no sound reasons to deny affiliated groups of corporations including life insurance companies the same unrestricted ability to file consolidated returns that is available to other financial intermediaries (and corporations in general). Allowing the members of an affiliated group of corporations to file a consolidated return prevents the business enterprise's structure, i.e., multiple legal entities, from obscuring the fact that the true gain (or loss) of the business enterprise is the aggregate of the gain (or loss) of each of the members of the affiliated group. The limitations contained in present law are so clearly without policy justification that they should be repealed. The legislation we are introducing today will repeal the two five- year limitations for taxable years beginning after this year. For revenue reasons, the legislation will phase out the 35% limitation over seven years. This bill should be a part of any simplification or taxpayer relief legislation that may be enacted next year, and I hope my colleagues will join me in this worthwhile effort.

Mr. CRANE

Mr. CRANE. Mr. Speaker, I rise to support the Senate amendments to the International Religious Freedom Act, H.R. 2431. I abhor the persecution of anyone because of their faith, whether they are Buddhists, Muslims, Jews, fellow Christians, or people of other faiths. Unfortunately, I was forced to oppose this bill when the House last considered it because I did not believe that it would achieve the desired result of curbing religious oppression by governments around the world. Indeed, my concern was that the proposed sanctions in the bill would do nothing to influence countries who do not share our ideas of religious liberty and only put at risk the jobs of innocent American workers. While the goal of the bill in seeking to use the influence of the United States to prevent or halt international religious persecution is commendable, the mechanisms of the House bill did not allow for enough flexibility for a U.S. response tailored to confront a particular foreign government engaged in religious persecution. Instead, a ``one size fits all'' approach including trade sanctions, denial of foreign aid and multinational assistance was mandated, leaving the President very narrow authority to craft appropriate responses. Instead, I urged my colleagues to modify the bill to allow the executive branch more flexibility to change the behavior of governments in order to stop religious persecution. I feared that, in certain instances, some of the proposed sanctions would only anger foreign governments and could have the perverse effect of inciting more religious persecution instead of less. I am grateful that my concerns and suggestions for improvements to this bill have been heeded and adopted by our colleagues in the other body. The Senate amendments give the Administration the flexibility it needs to appropriately respond to incidents of religious persecution. Furthermore, the sanctity of contracts is protected by the bill which will prevent incidents where, for example, American farmers are prevented from fulfilling binding agreements with targeted countries. In today's global economy, where there are a variety of sources for products and commodities, sanctions that do not allow existing contracts to be honored only injure American producers. It is my hope that this bill, as it is now drafted, will allow the United States to respond appropriately to international religious persecution. I certainly believe that we have an obligation to promote our values of religious freedom and democracy. However, our foreign policy must be crafted to achieve these goals, not to be a visceral and importent reaction to reprehensible persecution. I urge my colleagues to join me in supporting the Senate changes to H.R. 2431.

Mr. CRANE

Mr. CRANE. Mr. Speaker, I am especially pleased to join with my colleagues in honoring the renowned dean of the Texas delegation, the Honorable Henry B. Gonzalez of the Twentieth District of that great state. My colleagues, as the long-time Chairman of the Banking Committee, Henry was well known for his tough stance during the savings and loan investment scandals, and for his many attempts to consolidate banking regulations. His wide-ranging and perceptive special orders on international banking practices and malpractices could well constitute in themselves an indispensable textbook on the history of modern financial structures, consortia, monopolies, trusts, etc. Surely Henry ought to be welcomed back to the University of Texas or to St. Mary's University in a special chair as professor of economics. Our present loss in his departure, then, would be a real gain for young Texas students. The people of Texas can attest to Henry's strong record in support of civil rights and especially in developing housing programs for the poor. His colleagues in Congress know that whatever this hard-working Texan was determined to do, it was done with dedication and a kind of dogged perseverance which could well be emulated by many of those of us who will remain in the House. In many ways Henry has been a kind of grand institution on this Hill, a genial father figure for many younger members; and those of us on the other side of the aisle have long come to respect him as a man of determined principle and especially as one whom we know to have served his district constituents admirably well. Obviously San Antonio will be glad to see more of Henry in his retirement, but we hope that we, too, will be able once in a while see him on the House floor renewing friendships and giving wise counsel to those of us still struggling with the complexities of legislation, and worrying, as he so often did, about what is best for all Americans. Henry, we wish you the very best in your sell-deserved retirement in that exciting city of San Antonio--your town--and we have to say that it has been more than a privilege to have been your colleague during all these interesting and important years, when your judgment and dedication contributed so much to what we all have accomplished. God bless, Henry Gonzalez, and Godspeed.

Mr. CRANE

Mr. CRANE. Mr. Speaker, today I am introducing two bills to provide tax reform in order to encourage economic growth of employee-owned companies in my State of Illinois and around the country. I have been a strong advocate of employee stock ownership plans (ESOP's). I also have the privilege of representing a significant number of employee-owners of the Nation's largest publicly-owned ESOP, United Airlines. After taking over the ownership of the company, the United employees effected a dramatic economic turnaround of the company's fortunes--making United Airlines a financial success story. In the summer of 1997, Gerald Greenwald, Chairman and CEO of United Airlines, came to me with ideas to amend the tax rules to allow employees to better utilize their ESOP Investments. When the ESOP tax laws were written, they did not account for companies like United taking ESOP's to such a grand scale. So, as in so many cases it is time for the law to catch up to the realities of the marketplace. I have been working on these proposals since then to prepare for an opportunity to include them in an appropriate tax vehicle. Such an opportunity has not yet presented itself. Therefore, I am introducing these proposals as stand-alone bills and to bring more attention to the need for updating the ESOP laws. While ESOP's give the employees a stake in the company and provide a great opportunity to invest for retirement, the current tax rules restrict the ability of employees to use their investments for other important events in their life. The first bill will expand the ability of employee owners to make qualified distributions from their ESOP's, without incurring a 10- percent penalty on early withdrawals. Similar to the expanded uses for individual retirement accounts Congress has passed, this proposal will allow ESOP distributions for first time home purchases or for college expenses. This will especially benefit middle-income level employees who find it more difficult to save the money to buy their own home or send their children to college. The second proposal would address a conflict between 401(k) plans and ESOP's. Under current law, employer contributions to 401(k) retirement plans are limited when contributions are also being made to an ESOP. My bill will allow employers to contribute to their employees' 401(k) plans without taking into account their ESOP contributions. I commend these bills to the attention of my colleagues and urge them to support the employee-owners at United and other ESOP's around the country by cosponsoring these measures.

Mr. CRANE

Mr. CRANE. Mr. Speaker, I rise with my many colleagues on both sides of the aisle to offer a many-gun salute to one of the clearly most vigorous, admired, and truly respected leaders ever to come to these Halls of Congress. My colleagues, this courageous and dynamic Marine veteran who arrived on the Hill twenty years ago has not only been a credit to the Marine Corps in terms of the vitality and drive with which he discharged his duties, but also to this House to which he has for so long given so much of his energy and good judgment. These Halls will remain desolate for a long time after our very good friend Gerald Solomon has departed. As the Chairman of the Rules Committee, one of the most important and difficult tasks on Capitol Hill, Jerry attacked his work with a spirited dedication rarely seen on the Hill. Involved in every serious piece of legislation, his ability to control the flow of business and determine which alternatives should be brought up for a vote has been close to legendary. The 22nd District of New York, which includes much of Hudson Valley, has been a Republican area since the birth of the Republican Party, and Jerry Solomon has aggressively supported most of the conservative programs of the Party, reflecting his own convictions and those of his loyal constituents. Year after year the voters have returned him to office by wide margins because they could see that Gerald Solomon was no sleeping Rip van Winkle, the legendary figure which Washington Irving placed historically in Jerry's district high up on the Hudson River. According to the story, Rip van Winkle slept for twenty years. No one can accuse Jerry Solomon of sleeping during the twenty years he has been the two-fisted Representative of the 22nd District of New York. My colleagues, we will not soon again see the likes of this genial and industrious Marine veteran who has easily earned the warm friendship of so many of his colleagues in this maelstrom of legislative activity. May he find real solace in retirement on the quiet banks of the Hudson and in the hollows and the hills of upper New York area of his youth. We are sure that Jerry will not be satisfied with just an occasional short emulation of Rip van Winkle, because we really expect that he will father a memoir or two, giving his perspective on his many years of generous and cheerful jousting on the Floor of this House. We will sorely miss this good man, a friend of so many and a model for every new member to emulate. We would be most unhappy if Jerry did not come back to the Floor often to reacquaint us all with the cordiality and enthusiasm with which he so often greeted us these many years. God bless, Jerry, and Godspeed!