Peter DeFazio

Mr. DeFAZIO

Mr. DeFAZIO. Mr. Chairman, during the Traficant amendment, the issue was raised that we should not ask the Coast Guard to go back to the well; they could not find the few million dollars necessary to keep those 23 small boat lifesaving stations open. As I pointed out, it is one-tenth of 1 percent of the budget. But since we did not want to mandate that the Coast Guard return to their budget and apply a magnifying glass, I decided, if the Traficant amendment failed, to offer one of my own and help them out. I referred to a report of the Government, of the Department of Transportation and the Office of the Inspector General, and in regard tot he transportation activities of the U.S. Coast Guard, in particular, my amendment goes to one part of those transportation activities; that is, the private jet of the Commandant of the Coast Guard of the United States. For the last year for which they have figures, the private jet utilized by the Commandant of the Coast Guard of the United States and others cost the Coast Guard $3,363,263, more money than is necessary to keep those 23 small boat life-saving stations open. So the decision before this Congress is: Should we maintain a private jet which has been utilized by the Secretary of the Department of Transportation? He also has private jets in other parts of his budget and can also utilize the private jets at Andrews Air Force Base, and the Commandant of the Coast Guard, who used it about half the time, vice commandant, area commanders, other Coast Guard personnel, and surprise, surprise, Members of the U.S. Congress utilized the private jet of the Commandant, of the Coast Guard for an estimated $323,385 last year. So is it better that we spend $323,385 ferrying Members of Congress around in the Commandant's private jet, or we save people who are drowing off the coast of Michigan and the Great Lakes and off the coast of Massachusetts and New Jersey? I think that in these days where we are asking people to cut to the bone, and in these days when Congress is cutting back on its privileges, how can it justify a private jet which is used for Members of Congress, other people, and about half the time for the Commandant of the Coast Guard? I, as one Member of Congress, would be quite willing to pony up a bunch of my frequent flier miles so the commandant would never have to fly in coach. He could always fly first class. Now, I am sure it is not going to be the same as a private jet. If there was an emergency and he needed a private jet, he could go to Andrews Air Force Base, where they maintain about 40 private jets for bigwigs in the military, and I am certain they would let him use one. So why do we have private jets in the Coast Guard, private jets in the Highway Department, private jets in other agencies of the Federal Government, and then a whole bunch of private jets in the military? If we are going to keep private jets to ferry around Members of Congress and other bigwigs, let us get more efficient, put them all in one place. Let us operate them all out of Andrews Air Force Base. This amendment is very simple. It would say the Secretary of Transportation would have to decide what is more important to the lifesaving mission of the Coast Guard: a private jet for the Commandant of the Coast Guard of the United States, others, including Members of Congress, or the 23 small boat lifesaving stations? I think that many Members would join me in determining that in times where we have to cut back, we should make the cuts in the areas where it hurts least, and I think cutting private jets for Members of Congress and the Commandant of the Coast Guard would be, in this case, by most Americans considered to be a better cut than cutting 23 small boat lifesaving stations. I do not believe that a person treading cold water off Nantucket Island or in the northern part of the Great Lakes or off the Oregon coast should have to wait 40 minutes to an hour for a Coast Guard rescue. I would rather the brass in the Coast Guard and Members of Congress waited 40 minutes for a commercial jet at National Airport. Again I would be happy to contribute some of my mileage upgrades so none of those people will have to fly in coach.

Mr. DeFAZIO. Mr. Chairman, I offer an amendment.

Mr. DeFAZIO. Mr. chairman, I had risen previously and I am a member of the committee. What is the procedure here. I have an amendment at the desk.

Mr. DeFAZIO. Mr. Chairman, I move to strike the requisite number of words. Mr. Chairman, we just heard that people with the green eyeshades downtown here in Washington, DC, reviewed the Coast Guard process and they found that it was meritorious. People with the green eyeshades in downtown Washington, DC, have never tried to cross a bar entrance in Oregon with an outgoing tide and a strong wind. It is pretty tough. In fact, the Commandant of the Coast Guard, in this bulletin of January of this year said, and I quote, this is the Commandant of the Coast Guard, the same gentleman recommending these cuts referring to the Pacific Northwest: This area has always challenged mariners with its isolated, storm-battered coastline, strenuous harbor entrance. From seasoned fishermen to unwary vacationers, thousands of people annually learn hard lessons due to suddenly changing tides and weather. This is the same Commandant who wants to close two lifesaving stations in my district. The last Commandant closed those two lifesaving stations in my district, and within 2 months five people drowned, five people who could have been saved. The GAO and the people with the green eyeshades think you can tread water for 40 minutes. Well, you cannot tread water for 40 minutes, as the gentleman from Massachusetts pointed out, when it is cold in the Atlantic, not in the summertime but in other months of the year. You cannot tread water for 40 minutes while you are waiting for the helicopter in the bar entrances in my district either, not at the Coquille River, not at the Rogue River, not at the other areas scheduled for cuts. We are talking about one-tenth of 1 percent of the operating budget of the U.S. Coast Guard. If this is an agency that does not have one- tenth of 1 percent of cuts that it can make somewhere else except in lifesaving, then this agency should be running the entire Government of the United States of America, because I cannot say that about any other agency of the U.S. Government. And I do not believe that anybody in this House, particularly Members from that side of the aisle, would make that assertion about any other agency of the Federal Government, one-tenth of 1 percent. Is that too much to save lives? By the Coast Guard's own estimates, two people will drown this year to save one-tenth of 1 percent of their operating budget. You might say that is a reasonable cost, about $1 million per person. What if it is your father, your mother, your kid, just a friend, a neighbor? Do you think it was worth that cut? Do you think it was worth abandoning the principal historic mission of the U.S. Coast Guard on 120 miles of the Oregon coast in the Northern Michigan Peninsula, in New Jersey, in Massachusetts, in other areas? Is it worth abandoning to save one-tenth of 1 percent, or so the admiral will not have to find one-tenth of 1 percent somewhere else in his budget to cut? I do not believe so, and I do not believe it should be the judgment of this body, because if that is the judgment of this body, then the blood of the people who will drown, and they will drown, the Coast Guard says two will drown, I think maybe 10 or 20 will drown, given the experience in my district 7 years ago, people will die because of this vote. This is a little more serious than a lot of the other votes cast here. The green eyeshades downtown do not know anything when it comes to this. The Commandant of the Coast Guard does. He says these are treacherous entrances, but he is going to abandon them and serve them from 120 miles away with a helicopter. As the distinguished ranking member of the committee worked out, that is a pretty tough thing to do in high winds and low visibility, let alone talking about the water temperatures and survival times, none of which was factored into this great equation that the GAO said was okay. What the GAO said is they did their math right. They did not say that this makes sense for people on the ground or in the water around the United States of America. This is an ill-intentioned cut, and this body should not let this cut be made, and we should vote for the Traficant amendment.

Mr. DeFAZIO. Mr. Chairman, I am a bit puzzled as to how we can rule that the Coast Guard, in levying a confiscatory tax--that is, a boat operator in the southern part of my district last year was assessed one fee for five boats, and this year was assessed, because the Coast Guard person had to travel there, he did not think that was unreasonable, this year he was assessed five fees for the five boats as though five separate trips had been made and those were done in one trip. I am a bit puzzled how it can be that we are confronted with a confiscatory tax, which has been unilaterally imposed by the Coast Guard, and yet in this case when we are attempting--but it is being justified as a user fee--when we are attempting to adjust the user fee under the gentleman's amendment, we are determining it is a tax and we are out of order.

Mr. DeFAZIO. Mr. Chairman, the amendment does not mandate that the Secretary of Transportation delete the private jet for the Commandant of the Coast Guard and Members of Congress. It merely says that the Secretary of Transportation must determine what is more important to the maritime safety of this Nation, private jet for the Commandant of the Coast Guard, Members of Congress and others, or 23 small boat lifesaving stations. I think that we are just sending the issue back to Secretary Pena for another look, because I think perhaps, hopefully, his mind was not clouded by his two private jet trips the Commandant provided last year for $55,000, and hopefully he would look at this objectively and determine we do not need that private jet. It is a luxury jet. It is a personal aircraft. It is not a member of the fleet. It is not used for strategic or military purposes.

Mr. DeFAZIO

Mr. DeFAZIO. Mr. Speaker, suddenly the Republican leadership has discovered a crisis in the funding of Medicare, and they want to fix it. Well, they are not sure they want to fix it. They want the President to make a proposal to cut Medicare spending over the next decade. They want the Democrats in Congress to make a proposal to cut Medicare spending over the next decade. Maybe they want a bipartisan commission to make proposals to cut Medicare spending over the next decade. The bottom line is they want someone to come out and get ahead of them and propose cuts in Medicare spending over the next decade, under the guise of saving Medicare from bankruptcy, a new crisis that no one could have anticipated a year ago during the health care debate. A year ago during the health care debate, we heard from Republican leaders on both sides of the Hill that there is no crisis in health care in America, none at all. We need no congressional action regarding health care. That was only 12 months ago. More recently, we had the much vaunted Contract on America, which laid out the 10 most important issues confronting the United States of America, the 10 must-do pieces of legislation to bring our country into the next century. And you know what? Medicare was not on the list. I guess there was not a crisis in Medicare, or at least they did not know about it, when they were writing the contract. Then we brought the contract to the floor again. Still, no mention of Medicare. We brought a dire emergency supplemental spending bill to the floor of the House; $2.3 billion additional for the Pentagon, because you cannot ask the Pentagon to do anything without giving them more money. We add a few billions of dollars for the crisis in California, for the earthquakes and the floods and various and assorted sundry other things that Congress always throws in when we do a dire emergency supplemental spending bill, but not a penny for Medicare. I guess 2 months ago there was not a crisis in Medicare. What has happened since is the Republican leadership in this House pushed through a bill cutting revenues, cutting taxes, by $340 billion over the next 5 years. And guess what? Now they think we need to cut Medicare somewhere in the vicinity of $300 billion. But there is no linkage. There is no linkage between the massive tax cuts which they shoved through this Chamber for the largest, most profitable corporations, for foreign and multinational corporations, for people earning $200,000 a year, under the guise of some scant relief for middle income families and people with children. No, there was no crisis in Medicare then. But now there is. Suddenly there is a crisis in Medicare that just happens to come close to the amount of money that is proposed in the massive tax cuts. The crisis has come now because they have sat down and tried to write their budget, and they found out you cannot hold the Pentagon harmless and in fact increase their spending, you cannot hold all of that massive part of the Federal budget harmless. You cannot deal with the existing debt and the interest payments, and you cannot cut taxes and So suddenly we have a crisis in Medicare that cries out for immediate action, for immediate cuts totaling 80 percent of the money they need to fund their tax cuts. No, the crisis is not so much in Medicare, and it is not a new crisis. In fact, Medicare, according to the trustees, is in better condition today than it was a year ago. They have put off its potential insolvency for 12 months into the next century. No, the crisis is in the corporate board rooms. The crisis is in the country club cocktail lounges. The crisis is that the Republicans in their contract promised the most powerful and the most wealthy and the most well off Americans a nice, big, fat, juicy tax cut, and they promised everybody else in America they would balance the budget. And now they want to balance the budget on the backs of the seniors by cutting Medicare to fund their tax cuts. Congress is going to say no to this outrage, this new abomination worse than the worst aspects of the first 100 days of this Congress.

Mr. DeFAZIO

Mr. DeFAZIO. I thank the gentleman. I think what you brought up in your introductory remarks here brings you to three major issues, and I would like to frame the debate that way as we continue the discussion. You pointed out the decline of incomes and the standard of living for middle-income families and the disproportionate accrual of wealth to the top 1 percent, generally those earning over $250,000 a year. And what I think people would be interested in is what is the majority, the Republican majority's response to that growing disparity of income. Do they have a plan to deal with it. And of course the plan is their tax bill. And the tables on the tax bill are pretty interesting. If we look at the tax bill which passed the House of Representatives by a fairly narrow margin, but with virtual unanimity on the Republican side of the aisle, 71.4 percent of the benefits of the capital gains tax break are going to go to people who earn over $200,000 a year. And if you go to the corporate tables, you find similar distributions. That is the largest corporations in America, and the multinational corporations will do well. Small businesses will get scant or no tax relief, and even smaller incorporated firms. In fact, we are repealing the corporate alternative minimum tax, something that was put in place in 1986 with agreement between President Reagan and a Democratic Congress that it was embarrassing that the largest, most profitable corporations in America, AT&T, $24.898 billion in profits 1982 to 1985, paid negative $635 million in taxes. So we had to put in place a corporate alternative minimum tax. But now we are being told the solution to the growing disparity and the unemployment in America is to go back to those tax policies of the 1980's.

Mr. DeFAZIO. I would like to introduce another element. What I think angered people, when I went around to pointed out, when they heard the idea of tax reform and tax relief, a lot of middle-income families had a little bit of hope. When I pointed out where the benefits are going to go, to the largest, most profitable corporations, we were in fact opening new loopholes for them, we were not going to close loopholes on multinational corporations which could bring in $60 billion a year to U.S. taxpayers, that we were going to provide the most benefits, 75 percent of the benefits in the individual tax breaks for capital gains to people who earn over $200,000 a year, there was not anybody who earned over $200,000 a year in my audiences in any of my town halls. They were a little bit distraught, but what we did not know then and what we know now is that not only is this an outrageous return to trickle-down economics, which nearly bankrupted the country and began to bankrupt the country in the 1980's, did not provide more jobs, provided a flurry of leveraged buyouts which actually were job- destroying, but now the Republicans are planning to pay for these tax breaks by cutting Medicare. Now, is that not extraordinary? They are trying to back pedal as quickly as they can. But the numbers just happen to add up. When you look at their proposed reductions in Medicare in their budget, which they will unveil today at their special retreat at IBM's or Xerox's posh retreat center, and I wonder what kind of benefit that is being provided to the Republican Party and how that relates to the tax loophole, but in any case, when they go out to this corporate retreat center today and unveil their budget there, they are going to show they are going to pay for their tax break by reducing Medicare for average Americans and retired Americans. It is an absolutely outrageous attempt to pilfer the pockets of those least able to pay, senior citizens and people in the lower economic bracket, to give tax breaks to people at the top. But the sham is, well, we will all benefit because they will invest this money wisely. We already went through that once before. We found that trickle-down did not benefit the majority of the American people, but created the extraordinary disparities the gentleman is talking about. We also, I think, are going to have to, a little bit later, get into trade here, because trade plays into this is a very large part.

Mr. DeFAZIO. If the gentleman will yield on that one, that is excellent. The issue again, the response of the Republican majority in this Chamber is that they will not even allow hearings or legislative consideration; far be it from a Democratic vote on this floor, on the issue of an increase in the minimum wage. They are so afraid of that issue; they know that a large majority of the American people do not believe it is fair that a person who works hard, 40 hours a week faithfully, 50 weeks a year or 52 weeks a year, is below the poverty level. And if that person has children, it is far below the poverty level in this country and not able to have any kind of a decent standard of living. Why cannot we have that discussion? It seems like everything is slanted the other way. The tax policy, again, we have just passed huge tax breaks which will accrue to a very small percentage of the people, and they are going to be paid for by cutting Medicare and cutting welfare and other programs. They will not allow us to have a debate and a vote on the issue of increasing the minimum wage and trade policy. They want to pin the failures of the trade policy on the Clinton administration, who certainly pushed through the NAFTA Agreement and the GATT Agreement, but they pushed them through with a majority of Republican votes and a minority of votes on the Democratic side of the aisle, because many of us knew they were wrong. And one other point, lest people think that somehow through NAFTA and through shipping our jobs to Mexico, we have somehow at least improved the lot of the Mexican people, the standard of living has dropped 50 percent for average workers in Mexico in the last 6 months. They are threatened with 50 percent inflation, and their wage increases by law will be limited to 10 percent this year. Interest rates are 80 to 90 percent in Mexico for people who can get credit cards. That is not very many. Bank failures, business failures are up. On May Day they had the largest demonstration in the history of the country. We have pushed Mexico to the brink with exploitative trade policies, and we are losing American jobs. Where is this all headed? When will we wake up? When will we come up with a trade policy that is set up to increase the standard of living in this country and in the countries of our trading partners? When will we have a tax policy that is set up for fairness, that helps to bring the disparities down? And when will we increase the minimum wage? With this majority, never.

Mr. DeFAZIO. $163 billion?

Mr. DeFAZIO. Mr. Speaker, will the gentleman yield?

Mr. DeFAZIO. I thank the gentleman for yielding. Well, this was, of course, before the massive collapse and massive bailout by the U.S. Government adding insult to industry. Not only had our predictions come true; that is, that we began to enter into trade deficits with Mexico, therefore exporting U.S. jobs and capital to that country, that the Mexican peso has been devalued, that in fact the government had stolen another election and was continuing to oppress its own people, but we added insult to injury shortly after I introduced the bill, and we are now paying $20 billion for that privilege. Why? Because a few United States corporations want to go down there to take advantage of that cheap labor, a fact, you know the average Mexican wage has dropped 50 percent in the last 6 months. This looks great to a number of large multinational corporations, foreign corporations flooding into Mexico to use it as an export platform, but with the $863 million dollars trade deficit that we ran with Mexico in one month in February, that means that we exported, according to our own Commerce Department, 20,000 jobs in 1 month, 20,000 United States manufacturing wage jobs exported to Mexico in 1 month, and now we are paying $20 billion of taxpayers' money to bail out their government in order to keep this sinking agreement afloat. It is a failure, and I would like the authors of that to admit that it is a failure, the Republican majority in this House, and the Democratic administration downtown, and the people on Wall Street who shoved it through. Admit, just admit, it is a failure, or admit that it is working the way you want it, which I think is the real truth, which is it is helping a few corporations, but it is hurting American workers, it is hurting Mexican workers, it is lowering standards of living on both sides of the border. That, perhaps, was the real intent. Then I would at least say they are honest, they got what they wanted. One other quick point on trade. I cannot let what is going on with Japan go by. Here we are locked once again in negotiations with Japan to get them to allow our auto parts, which now a comparable quality American auto part costs about half of a Japanese replacement part. We are trying to break into their market, and the Japanese are saying, as usual, no, and in fact they are telling us that, if we use our sovereignty, if we, in fact, retaliate against them because they are unfairly keeping out comparable quality parts at half the price from their market, that they will go to the World Trade Organization and get sanctions against us, and guess what? All the analysts say they will win because that is the way GATT and the World Trade Organizations were set up. There is nothing in there to go at the unfair trade practices of Japan or other countries that hide them in secret, but only countries like the United States, which have public laws, will be penalized. So, you know, we are going in the wrong direction, and we are driving down standards of living in this country to benefit a few corporations and our unfair trading partners abroad.

Mr. DeFAZIO

Mr. DeFAZIO. Do not forget that, of course, President Salinas said his brother was innocent and went back and staged I think it was a 12- hour hunger strike and then fled the country for the United States he was so convinced of his brother's innocence. He is of course somewhere at large in the United States living off of his Swiss back accounts and his investments in New York City and his many residences there.

Mr. DeFAZIO. A reasonable guess. But guess what? This is sort of a miracle. This is a miracle of supply side economics, which we brought back to America last night. They did not pay any taxes. In fact, they not only did not pay any taxes, with 26,898,000,000 in profits. Guess what? Working stiffs in this country gave them a $635.5 million tax credit. They did not pay any taxes, and they got a credit for the taxes they did not pay. So their tax rate was minus 2.6 percent. Not bad.

Mr. DeFAZIO. If I can interject again. Another interesting historical note, in 1960 the corporations in America paid about 20 percent of the tax bill. This year, before the Republicans repealed the corporate alternative minimum tax, the corporations will pay about 10 percent of the tax bill in this country. So someone else has had to pick up the slack. And guess what? It is not the people who earn over $200,000 a year who just got also some very generous tax breaks last night; it is average working families. There was some move on the part of the Republican Party, and I have got to give credit to the 106 Republicans who signed a letter to the Speaker saying they could not go home with a tax relief when it went up to $200,000 a year, and they asked to take it down to $100,000 a year. Well, I cannot go home with a straight face to Oregon and talk about $100,000 as middle income, but if we were talking $30,000, $40,000 a year, that would be in the ball park. And those people are being asked to pick up the additional share of the burden or finding that the programs on which they depend, that is people who have incomes at that level and who are retired now, Medicare, are being cut back, seniors with even lower incomes, Medicaid is being cut back, younger people with kids who are growing up are finding that Pell grants and other things are going to be cut back, both in the rescission bill earlier passed in this House by Mr. Gingrich and in the budget which Mr. Kasich will put forward shortly. So not only are we asking the middle-income people to pay more, the few programs from which they and their families have been able to benefit and the few sorts of things they had to depend upon are being gutted. I mean, it is a very bitter reality. So I can understand why a lot of these people are turned off to politics and not voting. But I mean my solution is they should all get out and vote. Because the people who earned over $200,000 a year who got these very generous tax breaks last night probably voted at a rate of 90 percent, and the people in the $30,000 tax bracket who are going to end up picking up the tab probably voted at the rate of 37 percent.

Mr. DeFAZIO. Well, not only what happened in the tax bill yesterday, certainly. More than 50 percent of the individual benefits in this tax bill will go to people earning over $100,000 a year. And, of course, the corporate benefits will not go to small businesses. They are going to go to these largest corporations, again those who are subject to the alternative minimum tax. I do not know any small businesses in my district who have to pay the alternative minimum tax, but the large corporations, multinational corporations certainly do. So that is one thing. But there was something else going on yesterday, and I don't want to get too far afield, but we were marking up over about a 30-hour period in the Committee on Transportation and Infrastructure a revision of the Clean Water Act, and I will say also that the corporate payoff was going on there, too. Because we saw amendment after amendment offered on the Republican side to remove restrictions from industry to allow direct discharge of toxics into the Great Lakes and other bodies of water in this country, to reduce the list of chemicals restricted from direct discharge into our drinking water from 70,000 to 5. That was an amendment. These amendments, I saw after the Great Lakes were removed from Federal control, the Great Lakes bordering some 10 States and a foreign nation have been removed from Federal control for toxic discharge because that was an undue burden. It has now become a voluntary program. I saw some paper company and other lobbyists hugging and jumping up and down outside. They had just won this tremendous victory. You can bet that they have been writing checks. Then we saw, one of the most outrageous things I have seen, I have been around a while, this is my ninth year in Congress, but I have never seen anything so blatant as what I saw a couple of weeks ago when a number of new Republican freshmen members were quoted as saying they are telling lobbyists if they did not contribute to their campaigns or contributed to their opponents, they had better make up for that. I mean, this is the most blatant squeezing of corporate America I have ever seen. It is unbelievable.

Mr. DeFAZIO. Well, there were amendments in the Committee on Transportation and Infrastructure yesterday being presented which favored polluters over public interests which could not be satisfactorily explained by the Republicans offering them on the other side. And at one point I was tempted to say why don't we just bring the lobbyist up to the dais, they can at least explain it, and then we will go forward with the vote. You know, clean water. I mean, there were things like allowing industries to discharge whatever they wanted into municipal sewers and requiring the local taxpayers to pick up the tab. No more pretreatment requirements for toxics or extraordinarily difficult things that are difficult to deal with. I am not saying the Clean Water Act is perfect the way it is, but a reading by an impartial person of what went through that committee yesterday will say, whoa, are we going back to 1955 when the Cuyahoga River was flammable? Are we going back to the days in Oregon when the Willamette River was an open sewer? And the unfunded mandates, we offered an amendment to say that, you know, the bill should identify unfunded mandates because what this does substantially is move burdens from industry to public taxpayers and people who pay sewer bills and people who pay property taxes and bonds for municipal sewer systems. Of course, the Republicans would not let an unfunded mandate provision through that related to private interests. It is okay that these large corporations who are also contributing to the Republican party can now just dump their stuff in the river and then it is up to the people in the local city to try and clean it up.

Mr. DeFAZIO. If I could interject a story at that point. I, in my first term went to stand with some men and women who were on strike at a lumber mill in my district. I stood there with them and caused some disruption and dismay by the management and ownership of this very large company, and I was asked by a reporter how can you do corporations in America, privately held, one of the 500 richest men in America. I said, you know, on election day he gets one vote and all these people get one vote each, and that is the thing. People have to come back to the ballot box. They do not have to be a Democrat or a Republican. They can be an Independent, I mean nonaffiliated. They can form a third party. It does not matter. This country is not going to be healed until we get turnouts in the 70s, 80s, 90s. I do not think I will ever live to see the day when we get close to 100 percent.

Mr. DeFAZIO. If the gentleman would yield, I am going to have to leave shortly, I would just like to change the subject for a moment but it bears on the whole discussion, again, why people are so cynical about what is going on in Washington. It goes to the subject that we have spent some time on, on the floor earlier this year, which is the bailout of Mexico. There is an article, a very interesting article from yesterday's Los Angeles Times. It says it more succinctly than I could. Thus far, the United States has put up $20 billion of our taxpayer dollars through a rather secretive fund controlled by the Federal Reserve and the Treasury and Mexico has spent slightly more than $4 billion of the funds. There is some discussion, we heard certainly from Speaker Gingrich and Majority Leader Dole in the Senate who were avid supporters of the Mexico bailout who are not trying to sort of cover that up, but they were there, they signed on with the administration, the President and Robert Rubin. They were all together. This is again why people are cynical because they saw a Democratic President and a newly elected House Speaker and a newly elected majority leader, both Republicans, in the House and the Senate signing on to the same $40 billion bailout of Mexico. Here is what the Los Angeles Times says about the first $4 billion of our money that has gone to this bailout: Much of the money never left New York. It was paid out by the Federal Reserve in New York, where it was used to redeem the high profit bonds held primarily by major U.S. institutions, Wall Street speculators, and wealthy Mexicans who bought the securities largely through non-taxable offshore corporations according to investment sources and market analysts. So here it is. We are supposedly saving our neighbors to the south in a gesture of good will and the money changes hands from our tax deposits with the Treasury and the Federal Reserve in New York directly into the bank vaults of the speculators and the wealthy investment banks in New York City. This kind of outrage is again part of what brings people to cynicism. At the same time as that is going on, we see in yesterday's Washington Post a little headline saying power to boost dollar doubted. Dollar hits a record low 3 days in row against the Japanese yen. We are basically heading to one dollar and one yen the way we are going here and the United States cannot do anything about it. Why? In great part because we are too involved in attempting to prop up the failing government of Mexico and the crashing peso and as soon as we became associated dollar with peso like a Eurocurrency, the dollar started plummeting. This is a good part of the problem.

Mr. DeFAZIO. We attempted to bring a privileged resolution to the floor of the House about 2 months ago on this issue, the secretive rendering of funds from the Federal Reserve and from the Treasury accounts that are supposed to be there to prop up the dollar, and obviously they are not there to prop up the dollar anymore. My recollection is we were able to get 14 Republican votes who were all threatened with punishment the next day if they ever would vote that way again, and obviously we got more votes on the Democratic side. I do not recall the total number.

Mr. DeFAZIO. That was on an extraordinary attempt to bring the issue to the floor.

Mr. DeFAZIO. It is kind of extraordinary, actually. What we are doing now with the Mexico bailout is we are paying billions of dollars to speculators to attempt to prop up the Mexico peso and the Mexican economy because we are linked to them through the NAFTA agreement. We are losing jobs to Mexico, where wages and the standard of living have been reduced by 35 percent because of the devaluation of the peso. The situation is the workers of Mexico, everyone outside of Mexico's 24 billionaires and a few hundred millionaires, have seen their standard of living go down by 35 percent in direct relation to NAFTA. Thousands at this point, over 20,000 American workers have been approved for unemployment benefits because their job loss was linked directly to the movement of their plant to Mexico. We ran in January the first trade deficit with Mexico in 12 years, $863 million, 1-month trade deficit with Mexico, and it is predicted by next year we will run a $20 billion trade deficit with Mexico, which means, according to the Commerce Department, for every billion dollars of net on our trade balance, we create 20,000 jobs in America. So if we run a $20 billion trade deficit with Mexico, we are ceding $400,000 to Mexico and we are paying $40 billion to do it. Absurdity on absurdity on mistake.

Mr. DeFAZIO. He is in jail, that is right.

Mr. DeFAZIO. According to the Los Angeles Times, many of those folks are high stakes American investors who had invested the money through nontaxable offshore corporations, so we cannot even say that they have made a gain or they are going to recoup their funds and pay taxes on it. These are Americans who are not paying taxes on 50 percent interest earnings on failed Mexican bonds which have been propped up by working people's tax dollars, which brings up one other outrageous thing that went on this week. The issue of the billionaires, people amassing huge fortunes in the United States which if they were to dispose of it they would have to pay a capital gains tax on, 28 percent, that is about what your average working person pays or, under the new Republican proposal, 19 percent. But in any case, a number of those people, and again this is a collusion between the Republicans and Democrats, unfortunately, from my own party between the administration. The Treasury has a list of how many of these billionaires and cente-millionaires have in the last year renounced their United States citizenship which means that they can expatriate all of their holdings and profits to Ireland or Costa Rica and not pay any United States taxes. On the floor of the House we attempted several times to pass a simple piece of legislation that would have said before these people can expatriate the money, since they enjoyed the fruits of American citizenship, since they made that money as American citizens, since they made that money by employing Americans and selling things to Americans in this country, that they should pay a fair rate of taxes, at least the capital gains rate of 28 percent, before they expatriated and before they renounced their American citizenship. Amazingly, somehow the Republican party stood up and defended that practice. It is alleged two former members of Congress have been hired by an investment firm out of New York to lobby this issue. How is it that you cannot get 435 people elected to represent citizens of the United States of America and the interests of the citizens of the United States of America to vote to say that people who want to renounce their citizenship, traitors to the United States of America, should not pay some minimum tax before they expatriate the hundreds of millions or billions they made operating businesses in this country? That was one of the most outrageous and one of the lowest points, there are many low points in the first hundred days, but that has to be the lowest because that kind of goes to the heart of everything. Who do we really work for here? Do we work for the American people? Apparently a majority, since we were voted down by a large majority of Republicans and a few Democrats several times on this issue feel that multi-millionaires and billionaires no matter what their citizenship have a stronger call on their vote than the people who elected them. I think if people who elected the new majority knew about that vote they would be outraged.