Peter DeFazio

Mr. DeFAZIO

Mr. DeFAZIO. I yield again to the gentleman from Virginia.

Mr. DeFAZIO. If I can reclaim my time, I think what this leads to is full employment for psychologists, because we are going to have an awful lot of amnesia on Wall Street. It was not that they knew or recklessly disregarded or consciously omitted, but it is just they forgot at the moment that they were drafting it, or when the print of the prospectus came back from the printer, the proof, and it left out the section on risky derivatives, well, they forgot. They forgot that that should have been there.

Mr. DeFAZIO. If I can reclaim my time, I understand this is not the reckless disregard section, so we already have reckless disregard, and this is a further definition of reckless disregard. That is, a defense for reckless disregard is ``I forgot.'' Is that not correct? It is a definition of reckless disregard.

Mr. DeFAZIO

Mr. DeFAZIO. Madam Speaker, the gentleman who proceeded me talked about a looming crisis, and I am in agreement with him regarding the implications of our continuing deficit and mounting debt, but there is a more immediate economic crisis confronting this country and we are hearing little of it, little discussion of it here on the floor of the House of Representatives or in the other body or downtown at the White House. Why might that be? Because too many people are implicated in the policies that led up to that crisis and they don't want to talk about it. The dollar today for the third day in a row hit a postwar low. Here is what the dollar's decline looks like over the last 10 years. The dollar has fallen to just about a third of its value compared to the Japanese yen in a mere 10 years. A few days ago, we announced that we had the largest trade deficit in the history of the United States: $160 billion. We borrow $160 billion from foreign nations so that we could buy their goods when they were not buying ours. And when Mickey Kantor, or the Special Trade Representative, was discussing this he said, You might ask if your trade policy is working, and he said, Yes, it is right on track. A $160 billion trade deficit, 3.2 million lost jobs in manufacturing to overseas competition, and it is working just fine? That underlies to a tremendous extent this crash in the dollar. And the other part is our linkage to Mexico. The peso has reached a new low today, and despite our promise of a $50 billion bailout, Mexico is in a tailspin like you would not believe. About a month ago an analyst, a financial analyst named Christopher Whalen sat in my office and he said, If the United States is going to put up $40 billion to bail out Mexico, they better be willing to put up $150 to bail out Mexico because it will trigger a run on the United States dollar. And that has come to pass. The people downtown and the apologists on that side of the aisle for these trade policies and for the Mexico bailout, and the Speaker who would not lift a hand and would not allow us to bring a bill to the floor to stop the Mexico bailout, those people have nothing to say. They would say there is no linkage. Read today's New York Times. The administration's biggest problem may be that the world is believing the rhetoric it employed to win support for its $20 billion aid package for Mexico's troubled economy. Especially Mr. Clinton's insistence that the Mexican and American economies are intertwined. Today with the Mexican Government racing to take over failing banks, stabilize a tumultuous political situation, the peso dropped to a new low. And despite the bailout, the peso is now weaker than it was when we announced the $50 billion package. The speculation in the markets is now that the package may not be enough to do the job. $50 billion to export jobs to Mexico to run a $12 billion trade deficit with Mexico next year and it is not enough? How much is enough for these apologists, for a failed trade policy? Some people are going to have to admit that they were wrong. NAFTA is not working the way they told us it would. It has put the United States into an international tailspin. We have linked ourselves to a collapsing Third World economy and there is no end in sight. And what are we doing on the floor of the House of Representatives? Are we considering legislation that would address this? Are there emergency hearings going on here in the Congress to deal with the crashing dollar and our alliance with Mexico and the $50 billion trade bailout? No, in fact, ironically today and tomorrow on the floor of the House we are considering special legislation to give special privileges to poor beleaguered Wall Street stockholders who have lost their money or people who have lost their pension funds. We are giving Wall Street a special little gift. They have done such a great job in leading us into these trade policies and forcing us into these trade policies. Not me--I didn't vote for it--but forcing others who felt they must follow the lead of Wall Street. Those people are now being given special privileges by the House of Representatives so they will be immune from stockholder lawsuits and they will be immune from forgetting to tell you something. That is their reward. It is time to get serious about trade and turn these issues and say no to Wall Street and get America back on track.

Mr. DeFAZIO

Mr. DeFAZIO. Mr. Speaker, let me start by saying I am not an attorney. I am one of probably a minority in this Congress who is not an attorney. But I have taken recourse to the courts. I live in the Pacific Northwest. When a scam was run on the Northwest called WPPSS, Washington Public Power Supply System, that promised us five nuclear powerplants to produce power without cost for only $4 billion, and it ultimately cost $10 billion, and all but one was never completed. I launched a ratepayer lawsuit in court. On the other side of the courtroom were a couple of hundred lawyers. Now, under this bill, ratepayers will not be suing anymore because they will have to pay for those 200 high-priced corporate lawyers on the other side of the room. I have 1 lawyer, a local guy, pro bono, me, and 26 other citizens. That will not happen anymore under the Republican view of what is wrong with the legal system in America. There are problems, and the American people are frustrated, but they have perverted that frustration into a bill that is an abomination. The Republican spinmeisters have worked overtime for this week's production, and it is a production. They pretend this is a relief for Main Street America, for people who are overburdened by litigation. But with breathtaking bait-and-switch, they produced a bill beyond the dreams of the most corrupt corporate swindlers in this country. It is payback and payoff time, America. First we have the Corporate Intimidation Act. I have already explained that. It is called loser pays. If the ratepayer wants to go to court and sue a multi-billion-dollar corporation: ``Hey, check your checkbook. If you can afford to pay for all the lawyers they trot into the court, go right ahead.'' I do not think there will be too many lawsuits filed by ratepayers anymore, but maybe that is the objective of this proposed bill. It is also a blank check for bunco artists. We know that Wall Street is suffering. They are suffering because of litigation, those poor people on Wall Street, those poor thousand-dollar-an-hour poor lawyers. You know, it is tough. Well, they have a new defense now, and it is called, ``I forget.'' And under this bill, the one coming up on Wednesday, they can say, ``Well, gee, we would have disclosed those defects in our prospectus for you, but I forget.'' So, hire a thousand-dollar lawyer; he forgot. That is now a defense. But this is for Main Street America, remember that, this is for Main Street America. Sure, it is for Main Street America. Who buys those securities, who gets defrauded? There will not be another Charles Keating under this bill, thank God there will not be another Charles Keating defrauding the taxpayers of millions of dollars. It will not prevent the fraud, but it will prevent the litigation against Charles Keating. That is great. That resolves the problem with the legal system in America. This is just what main street needs at a time of the bankruptcy of Orange County, the Barings Bank, speculation going on wildly. When your IRA disappears or your little pension plan, because of a bunco artist, don't worry, you will not be able to go to court anymore. That is what this bill is all about. Finally, we have the tort reform. We have heard a lot of States rights from that side of the aisle. This will take States rights and rip it into shreds; 200 years of State precedents in tort reform will be overruled by the Federal Government only when it protects corporate interests. You know, there will be a 15-year ban on litigation to get any product, any product, unless a business is harmed, so they will be able to go in and sue for commercial losses. Your wife, husband, mother, son, is killed by a defective product? After 15 years, tough luck. Your company loses some money with the defective product, after 15 years? Welcome to court. This is for Main Street America? No, it is not for Main Street America. This has one very simple thing underlying it. It used to be that all men and women were equal before the law. Under the new Republican proposal, all dollars are equal before the law, and the corporations have a lot more of them than we do. That is what this is all about, in, many, many ways that are yet to be told. Watch the debate this week, listen, pick up the covers, look underneath. This is not for main street. It is for Wall Street.

Mr. DeFAZIO

Mr. DeFAZIO. Mr. Speaker, the Republican image meisters and spin artists worked overtime for this week's production in Congress. They tapped a concern of average Americans over the growing litigiousness of our society, but with a breathtaking bait and switch. They have produced a bill beyond the dreams of the most corrupt financial swindler or the most irresponsible corporation. They call it the Common Sense Legal Reform Act. In reality, it is the corporate dollar liability and litigation shield act. No. 1, the loser pays. What does that mean? It means if you are an average citizen and you have been aggrieved by an exploding Pinto, if you wanted to sue Ford, you have to be ready to pay for all of Ford Motor Co.'s legal costs. Better think twice before you go to court to sue about an injury with products. A blank check for bunko artists and new defenses for Wall Street. They forgot to inform you when you invest your pension in a bad deal. The new defense is, I forgot. It is actually written in the bill. It is almost a joke. I forgot. Thousand-dollar-an-hour lawyers and Wall Street forgot. This is not for main street. It is for Wall Street.

Mr. DeFAZIO

Mr. DeFAZIO. Reclaiming my time, in this case what you are defining as beneficial use is for one person. There were quite a few people downstream who saw it as a detrimental use because it had a negative impact on their property.

Mr. DeFAZIO. I yield to the gentleman from Texas. I am trying to get an understanding.

Mr. DeFAZIO. If I could reclaim my time, the case I am talking about was an individual who was attempting to develop his island and he was restricted by Federal law, by the Clean Water Act, from doing that, and it was the downstream property owners who wanted the action stopped, and the only way they could get him stopped was an action by the Federal Government. Under this bill, as I understand it, if the Federal Government took that action to restrict those activities which harmed everybody downstream, that gentleman would have to be compensated. It certainly diminished his development value more than 10 percent.

Mr. DeFAZIO. I yield to my colleague the gentleman from Oregon.

Mr. DeFAZIO. I am just trying to get to what was a real-life example. It was a county commissioner, we did use the Clean Water Act to get an enforcement action against this individual, and he obviously felt very aggrieved. He gave lots of money to my opponent. But the fact is that as I understood the gentleman, my downstream property owners now would have a civil right of action and this gentleman would get compensated by the taxpayers for not doing the egregious development that was going to harm the downstream people.

Mr. DeFAZIO. Mr. Chairman, I move to strike the requisite number of words. an absolute right with 10 percent diminishment of any part, tiny fraction of his property under Federal regulation if it goes to the Wetlands Act, Clean Water Act, Endangered Species Act or others. But that the adjoining or downstream property owner has a right of civil action. So what we are saying here is we are creating two categories. If you are a major developer, you have an absolute right to reimbursement by Federal taxpayers if there is a tiny diminishment of the optimal development value of your land, but if you are an adjoining or downstream property owner, you can go to court. That is what I just heard the gentleman say, civil right of action. I was a county commissioner. We had a gentleman who had an island in the river. He drove a giant belly scraper out there, a D-9 Cat, and he was just terra-firming the land, and this was not allowed under our State land use law but the State land use law had trouble prosecuting him. We had to bring in the Feds to put a stop to that development. The people who wanted that development stopped were the adjoining farm downstream, because he said, ``You know what happens when he builds those berms and he does that? My land floods, I get all these road seeds and pollution and sediment on my land and it ruins my land.'' But you are saying to my farmer downstream and where we use the Clean Water Act for an enforcement, my farmer downstream is now going to have to go to court as opposed to getting the Federal Government to enforce this.

Mr. DeFAZIO. Reclaiming my time, again we are back to the point where in this case, Mr. McNutt was his name, and his island in the McKenzie River, I can be very specific, would have a right to be compensated by the Federal Government because he did not engage in development that was detrimental to his neighbors under Federal regulation. If that is the case, this is creating an extraordinary problem.

Mr. DeFAZIO. Reclaiming my time, Mr. Chairman, I want to go to an actual example, the bald eagle, one of the few successes we can point to under the Endangered Species Act. The requirements in my part of the country were practical and simple. You had to leave one tree. You had to leave the nest tree. You could have 100 acres of land, but you had to leave one tree to recover the bald eagle. It has now recovered. That is a live and living symbol of the United States of America. I think it was worth saving the bald eagle. The gentleman wants to save the textile symbol of the United States from desecration. That is the American flag. I want to save a living symbol, and that is the bald eagle. Under this legislation, we would have had to compensate every single person who saved one tree, one tree. Is that too much to ask? I do not believe that is an unwarranted intrusion. Ten percent is an absurd threshold. Ten percent of any portion of your land, that is 1 tree out of 10, you get compensated. That is not right. This is something that is taking the relief that is needed too far to hamstring and follow another agenda. This is the big developers' agenda. This is not going to help the little people of my district who have been having problems with the Federal Government. This is going to take the developer who has a 10,000-acre development and is required to leave a little riparian strip, which in my State we have all agreed to do, but if he is required to do that under Federal aegis, it will be compensable action, even if the State law would have required and the Federal law would have required it. Mr. Chairman, let me talk about the realities of appraisals. How do we get to 10 percent? We hire an appraiser. I tried to purchase a piece of property in my district with a willing seller. I got an appropriation to do it. The willing seller came up with an appraisal of $2.2 million. a price of $750. They were at loggerheads. Even though I could have saved this, I had an appropriation, I could not get an agreement. I said ``How about we agree that the Forest Service and the owner choose another appraiser, and they will do that.'' They did that. Now we got a third appraisal. Do Members know what it was? $1.5 million. I had the owner with an appraiser at $2.2 million, I got the Forest Service with an appraiser at $600,000, and then we got the neutral appraiser at $1.5 million. How are we going to say, under this bill, 10 percent variance in the value is compensable? All you have to do is hire two appraisers and the Federal Government has done nothing, and you are going to find a 10- or 20- or 30-percent variation. Therefore, I could just say because the Federal Government exists that I am compensated, because I have two appraisers that say ``Well, the Clean Air Act,'' no, that is not right, we have eliminated it from the Clean Air Act, but any other acts covered here make this a compensable action. This goes too far. What this situation cries out for is reauthorization of the Clean Air Act, a reauthorization of the Endangered Species Act, with needed reforms and amendments. It requires a rifle shot, not a 10-gauge shotgun filled with 00 buck. That is what we are doing here, blowing a hole through these laws so we will not even be able to save the bald eagle next time it is endangered, or some other bird. That I think is a worthy thing. If we are going to save that symbol, let us save a living symbol.

Mr. DeFAZIO. There is an amendment pending to ban the desecration. Does the gentleman support that?

Mr. DeFAZIO. I am going to get to an actual example, if I could. One other example, and then I will explain. This is a little off track, so bide me here. I am curious, does the gentleman support the constitutional amendment to ban the desecration of the American flag?

Mr. DeFAZIO. Mr. Chairman, I am going by the four statutes referenced by the gentleman from Louisiana [Mr. Tauzin]. If it was one tree on the 1 acre, on the 100 acres, and I could not harvest that tree because of Federal restriction, if I lost, if by being required to have that tree stand, I would lose 10 percent or more of the value, I would be compensated for that one tree?

Mr. DeFAZIO. Mr. Chairman, if I could ask a couple of hypothetical questions, if I had a 100-acre tree farm and the restrictions apply to 1 acre, that would be, if it took more than 10 percent of that 1 acre, that would be mandatorily compensable?

Mr. DeFAZIO. I yield to the gentleman from Florida.

Mr. DeFAZIO. Mr. Chairman, I move to strike the requisite number of words. I would like to engage the author of the primary amendment in a few questions here, if I could. As I understand it, the Tauzin amendment does not change the portion of the gentleman's substitute, which would require when a specified regulatory law diminishes the fair market value of that portion or any portion of a property by 10 percent or more; is that correct?

Mr. DeFAZIO

Mr. DeFAZIO. Mr. Speaker, I thank the gentleman for yielding me this time. No relationship to NAFTA? I heard it early on the floor. The United States has entered into an agreement to ship $20 billion to Mexico. We are propping them up through the Bank for International Stabilization, the International Monetary Fund. How much taxpayer money is at risk? No relationship to NAFTA? This is all about the failed NAFTA, and a bunch of people trying to cover their derrieres because the things we predicted would come about if we entered into this agreement have come about. What authority was used to enter into this agreement? Never before in the history of the Economic Stabilization Fund, 60 years, has this kind of credit been extended to a foreign power. In fact, when it was first suggested by the Republican leadership to the administration that they use the Economic Stabilization Fund they said it was impossible. It was only later that the administration switched its position. What terms? Twenty billion dollars. How much of the BIS money is our money? How much of the IMF money is our money? How much are the U.S. taxpayers on the line in this backdoor bailout? What security? The oil security, the oil funds that are already totally pledged by the company that has no money even to make capital investments because they are so oversubscribed to meet other obligations in Mexico? That is security? Who benefits? We need the names of each and every business and individual who receives a disbursement that is related to these bailout funds. The American taxpayers have that right. We will begin to answer some of those questions, only begin with this resolution of inquiry. We must go further. We need to restrict the use of this fund in the future to supporting the U.S. currency and the interests of the United States of America, not foreign authoritarian regimes that are creating billionaires and disasters south of our border.

Mr. DeFAZIO

Mr. DeFAZIO. Mr. Speaker, I thank the gentleman for yielding me this time. Mr. Speaker, we are going to have to live with these laws for a very long time, as are all of the American people. Is it too much to ask that any duly elected representative from any of the 435 districts in this country be given, say, 5 minutes on the floor to express their concerns and enter into a colloquy to get questions answered regarding the intents of this legislation or offer an amendment? I do not think that is too much. You may say well, this is the law required by Speaker Gingrich's contract, and it must prevail. What will prevail here today is the law of unintended consequences. Is it the intention of the majority to allow the factory fleet, the trawlers out of Seattle, WA, to take all of the whiting off the Oregon coast and put local processors and small boats out of business? I do not believe the Republican majority wants to do that, but that is what this bill will do if we do not have a rule setting the allocations for that season, and this bill will prohibit that. Is it the intention of the majority to overrule and suspend part of the crime bill that was just passed, part of the contract? What about compensation for crime victims? It cannot happen if we do not have an administrative rule, and what you are doing here today will prevent your part of the contract to give overdue compensation to crime victims, their just due. Is it your intention? I do not believe so. If it is not your intention, then, to do these unintended consequences, you must give us more time to discuss this. You must give us more time to offer amendments for these things because I cannot say that the majority whip or others really intended to do these things. But that is what will happen if we pass this bill today as written in the contract. The law of unintended consequences will prevail and we will have to live with it for an awfully long time. Parliamentary Inquiry

Mr. DeFAZIO

Mr. DeFAZIO. Mr. Speaker, is this a replay of the first 100 days of FDR? That is what the Republican leadership would have the American people believe. Or is it more like a really bad remake of ``Invasion of the Body Snatchers,'' some alien force has taken over the other side as they march lockstep and they will not consider any problems that they are creating with their contract. No matter how problematic, no matter how contradictory, no matter how poorly drafted their proposals, the contract must go forward, the alien force says. Today $3 billion more for a needy Pentagon. They cannot make ends meet on a $271 billion budget. The American people know that. And next week we eliminate the School Lunch Program and the Program for Women, Infants, and Children because we cannot afford it. Is there a little contradiction here? Is this 100 days to address the real needs of the American people akin to FDR, or is it a nightmarish remake of ``Invasion of the Body Snatchers''? Make up your own mind.

Mr. DeFAZIO

Mr. DeFAZIO. Madam Speaker, a lot of news is about trade today and it is all bad or it is bad if you care about the economic future in the United States and you care about the conditions of working people and wages in the United States. Might be good if you are a multinational corporation and looking for cheap labor elsewhere and looking for ways to profit. But not to further the future and the economic prosperity of our own Nation. The administration is very proud they finally struck a deal on the Mexico bailout. Great deal: $20 billion, $20 billion up front from the United States of America. Mr. Kantor, the special trade representative, is downright proud that we were able to get this deal. And it is a really bad deal for people on both sides of the border, it is an incredibly bad deal for the people of Mexico. It is expected that it will cause a recession in Mexico, it will drive interest rates up to 50 percent in Mexico, it will cause businesses to fold in Mexico because most of them have adjustable loans so their rates are going up dramatically and quickly. Banks will fold in Mexico. And wages are now at 40 percent of the level of 1980, despite the increases in productivity. Well, maybe it is a good deal on our side of the border and that is why he is so happy. Well, maybe not. First off, $20 billion at least. We do not know how much money the Federal Reserve has secretly shipped to Mexico, how much we are involved in the funds coming from the international institutions. But it is a lot of money. And money that could have been spent productively here at home. But beyond that we have some analysis now, analysis by DRI McGraw Hill, a private consulting firm in Lexington, Massachusetts. It says that U.S. exports to Mexico will drop by $10 billion this year, leading to a loss of 350,000 U.S. jobs. So we are going to pay $20 billion of our taxpayers' money to ship 350,000 family-wage jobs to Mexico. Now that is a great policy. But they tell us do not worry, it is all short term, it all will get better. In fact, Chase Manhattan has a memo and it says quite frankly they can fix the problems down there in Mexico, they just have to do a couple of things. The government will need to eliminate the zapatistas to demonstrate their effective control of the national territory and of security policy, if they want to encourage further investment in Mexico. It seems Chase Manhattan is pretty upset that they wagered--and that is what this is about--wagered a huge amount of money in Mexico trying to get obscene rates of return. Now they are upset that the junk bonds they bought have turned truly to junk and are worthless. These are policies that are not in the long-term interests of the United States of America, nor the people of Mexico. It is time that we began to get straight about our trade policy in this country. I introduced legislation earlier this year to repeal the benighted NAFTA Agreement, and at the time people thought, ``Well, that is a pretty far-out thing.'' I would say, given the events since then, given the massive bailout, given the huge loss of jobs we now admit we are going to suffer into the indefinite future, is it not time to revisit that agreement? It is not good for people on either side of the border. It causes tremendous harm. Let us rip it up and start over again.

Mr. DeFAZIO

Mr. DeFAZIO. Mr. Chairman, I appreciate the granting of time. Mr. Chairman, we should be a bit consistent in our positions in this organization, and I would like to quote from last year's debate on the crime bill: If they say to me in the name of fighting crime ``Will I stand a $2 billion check to cities, many of which have destructive bureaucracies, to let the local politicians build a bigger machine with more patronage?'' My answer is no. That was then the gentleman from Georgia [Mr. Gingrich], now Speaker Gingrich, on the issue of broad grants of authority without effective controls from the Federal Government. The point is, Mr. Chairman, we need more police, and, if we do not specify that the money will be spent on police, it will be spent as it was under LEAA, on armored tank carriers, on dual-engine planes for local bureaucrats. I trust my communities, and they have done darn well under the President's plan. Twenty-four police officers are coming to work in my district that would not have been there without President Clinton's plan. I did not support the crime bill last year, but I said the 100,000 police I do, and I say to my colleagues, If you want to preserve that promise, if we want to enhance that promise, we have to defeat this move by the Republicans to gut the 100,000 new police officers for America.