Peter DeFazio

Mr. DeFAZIO

Mr. DeFAZIO. Crime and punishment, it is all the rage here in Washington. But if we are going to build a strong foundation to defeat crime in America and turn back this tide, it is going to take a little site prep like any other building of a foundation. This grand new monument to the Republican crime control effort will be a tower of concrete on a foundation of sand if we pass this section of the crime bill. It is a single-minded rush. It ignores other needs. Drugs in the schools? Build prisons. At-risk and abused kids? Build prisons. Slow response time? Not enough cops? Build prisons. Let us not rush to build symbolic monuments. It will take more to turn back the tide of crime in America.

Mr. DeFAZIO

Mr. DeFAZIO. Mr. Speaker, yesterday the House of Representatives concluded a long and heated debate on the exclusionary rule. It was not on the evening news. I mean who knows or cares about obscure legal arguments? There was more important news: The OJ trial, 10 minutes on the pitiful howls of the dog, the baseball strike. Well, after all, the actions taken here on the floor only shredded the fourth amendment to the Constitution: The right of the people to be secure in their persons, houses, papers and effects against unreasonable searches and seizures shall not be violated, and no warrants shall issue but upon probable cause supported by oath or affirmation particularly describing the place to be searched and the persons or things to be seized. America, bar your doors, they do not need warrants anymore.

Mr. DeFAZIO

Mr. DeFAZIO. Mr. Chairman, I move to strike the last word. Mr. Chairman, I rise in support of the amendment and would respond to the previous speaker before me on the floor. The gentleman finds that somehow by substituting the exact wording of the fourth amendment to the Constitution, wording which the Supreme Court in its wisdom has interpreted and finds allows exceptions in cases of good faith with searches which involve warrants, the gentleman feels that by restating the fourth amendment that somehow we would overturn that judgment of the Supreme Court. That is an absurd argument. The Supreme Court has rendered an opinion on these words previously and the Supreme Court has found a limited good faith exception in cases where warrants exist. But what the other side would do here today is trash the fourth amendment to the Constitution by saying, no, even though the courts have not found exceptions in cases where there are warrantless searches, we feel that should happen. Or one gentleman mentioned some lower courts have found in some limited cases that warrantless searches might be acceptable. We have already talked at great length on this floor about where exceptions exist and have great precedent, and apparently there are perhaps some others coming up through the court. Let the Supreme Court render that judgment on the fourth amendment which has stood for more than 200 years. Now, I perhaps suffer a disadvantage in this debate. I am not one of the many attorneys in the House of Representatives, but then again, nonattorneys outnumber attorneys still in this country, perhaps for a little while longer. Many of us are attached to the Bill of Rights in the Constitution, particularly the fourth amendment. And I believe that this goes to the issue of us being secure in our homes. This is not about a drug deal on the street. It is not about two people hugging with a gun sticking out of their pocket or drugs in the park. It is not about that at all. It is whether or not someone, an officer of the law, has to spend 2 to 3 minutes on the telephone convincing a magistrate that they have probable cause before they kick down someone's door. I do not think that 2 or 3 minutes is an inconvenience. They already have many exceptions, when there is imminent threat, many exceptions when there is a crime in progress, many exceptions when they have a warrant. But warrantless searches, broadly construed, are a threat to the security of the people of this country. And they certainly are a threat to the continued sanctity of the fourth amendment to the Constitution. So restating that amendment here in this law does not threaten the precedents and the exceptions that have been taken previously. Mr. Chairman, I yield to the gentleman from Michigan [Mr. Conyers].

Mr. DeFAZIO. That is correct.

Mr. DeFAZIO. And it would certainly reinforce the exceptions, the seven exceptions already created by the Supreme Court and allow any other exceptions to be heard upon their merits, particularly these lower cases we heard vaguely referred to earlier. What we would not do is sanctify warrantless searches. I do not believe, as a layperson, in a body and before these many esteemed lawyers, that my constituents want to see this country move toward a system of warrantless searches. That is what this legislation before us would do. I urge my colleagues to support this amendment. And if this amendment fails, to vote against 666.

Mr. DeFAZIO

Mr. DeFAZIO. Mr. Speaker, it states, ``Questions of privilege shall arise whenever the rights of the House collectively are affected,'' and, further to the point, ``No money shall be drawn from the Treasury but in consequence of appropriations made by law.'' The issue is whether or not the authority previously extended by the House in a 1933 statute has been exceeded, and if it has been exceeded, then certainly the House is collectively affected, and most certainly we see a violation of section 9, article I of the Constitution. Further, as the Speaker knows, appropriations are to originate in the House. In this instance we are dealing with large sums of money to be drawn on the U.S. Treasury which have not been appropriated by this House. So we feel that it is essential that the House assert its prerogative. To tell the truth, Mr. Speaker, I do not believe we can come to a final and dispositive determination whether or not there is a violation of the constitutional prerogatives of the House unless we have these questions answered, and unless the resolution goes forward they will not be answered.

Mr. DeFAZIO

Mr. DeFAZIO. Mr. Speaker, Members who do not want to be treated like mushrooms will come to the floor now to speak and vote in favor of House Resolution 57. This is a critical question: What are the terms, the amounts, the conditions and, more to point, the constitutional authority to extend unlimited full faith and credit of the United States Treasury--that is, the funds of the taxpayers of this country--to a foreign power, Mexico? Do the elected Representatives of the people have a right to disclosure? A vote for this resolution is a vote to carry out our constitutional responsibilities, our fiduciary responsibilities as caretakers of the public purse; a vote ``no'' is a vote to be treated like a mushroom kept in the dark and fed unsavory substances.

Mr. DeFAZIO

Mr. DeFAZIO. I think this was a question I asked very early on when I was contacted, when I filed my legislation to withdraw from NAFTA. They brought up all of these concerns about how it would further destabilize the economic situation. They said we are only cosigning, and I said, well, I understood if someone had impeccable credit they would not need a cosigner. Usually you get a cosignor because no one else wants to extend you credit, and they think maybe you would not be good for it. If Mexico's credit is so great, I suggest they go to the same Wall Street financiers who have made 20- to 50-percent interest, nice rate of return, and perhaps say, ``Look, you have been making a lot of money down in Mexico, how about extending some loans on favorable terms, maybe only 15-20 percent interest per year as opposed to what we have been paying you, still better than you can get generally in the United States stock market, S&P index, United States Treasury, better than you can get anywhere else.'' I would assume the Wall Street financiers, thinking there is no problem, if they want the Government to cosign, why do they not just do it directly. Why do not they do it themselves? They are telling us we will make money on this. The taxpayers might make money on it. Might lose $40 billion on it, but, this is a river boat gamble. We are river boat gamblers with $40 billion of assets of the United States of America that belong to the people of this country. I do not think so. That is not our role here. Let the people on Wall Street be the river boat gamblers, not the people on Main Street.

Mr. DeFAZIO. I guess to bring it down to something smaller than billions, I think I heard very early on in my life and the old saw, you know, ``If you owe the bank $1,000 and you cannot pay, you have got a problem. If you owe the bank $100,000 and you cannot pay, the bank has got a problem.'' That is where we are at here. It is not only ultimately an obligation of the economic stabilization fund, and it does admit in here that losses can be incurred, and those losses would have to be made up, but also the interest earnings, gains or losses of the economic stabilization fund are reflected in the budget of the United States of America. So if the economic stabilization fund loans to Mexico, $20 billion or so to Mexico go bad, then suddenly we are told that not only do we have to come up with the money but that counts as $20 billion more deficit for the United States of America.

Mr. DeFAZIO. If the gentlewoman will yield, that, I believe, was because of the drop in the value of the peso.

Mr. DeFAZIO. That is absolutely extraordinary. So perhaps a rational person could have anticipated that the peso was overvalued, that there were problems with political manipulations of the currency values in Mexico and, in fact, that inextricably tying the fate of our economy to Mexico, which seems to be what our administration is telling us, was a mistake. I would ask the gentlewoman if she noticed the statement in the Washington Post last weekend where the Speaker said there was a relationship between the minimum wage and the value of the peso in Mexico and Mexican workers, and said he was hesitant to support an increase in the minimum wage in the United States of America for people who work in this country because that would probably drive more jobs across the border. So we have just seen the value of the wages in Mexico, which were pitiful to begin with compared to U.S. wages, dropped by 50 percent, and now we have to withhold any increase in the standard of living for the people of the United States because be might lose yet more manufacturing jobs to Mexico. What happened to the promise of hundreds of thousands of jobs in America as we sold goods to the Mexican people? I am puzzled.

Mr. DeFAZIO. If the gentlewoman will yield, it is interesting to hear those statements from 2 years ago, because we have heard most recently from the proponents of NAFTA, the apologists for NAFTA, the Secretary of the Treasury and others, that no one gentlewoman is saying that letter from the chairman of the Banking Committee, a neighbor to Mexico who lives just over the border, who understands that country well and is sympathetic to the needs of that country, he discerned these problems. What was the date on that letter?

Mr. DeFAZIO. If the gentleman will continue to yield, Mr. Speaker, in an answer to the gentleman's earlier inquiry, there has not been a vote on an appropriation for the Economic Stabilization Fund since 1934, 60 years since an appropriation has been voted for, yet the fund has continued to garner money through Treasury withdrawals, through having money printed, and they exchange some sort of bizarre notes which they obtain from the International Monetary Fund. They give them to our Treasury in exchange for dollars which the Treasury orders printed at the Mint. If you want to talk about creating something out of nothing but obligating the American people, and if Alan Greenspan is concerned about inflation, how about the inflation that is caused when you just run the presses overnight, running out whatever the largest denomination of bills is, I don't know, a thousand $10,000 bills, so we can shovel that money over to the Economic Stabilization Fund, so we can send it to Mexico, or so that we can secure the loans of Mexico? Also, Mr. Speaker, the gentlewoman put together an excellent list in response to your query here. I have heard a little bit about this ``We will guarantee these funds with the oil revenues.'' There is a list here put together by the gentlewoman from Ohio [Ms. Kaptur]. The gentleman is right, those funds are already 100 percent committed. In fact, they are so committed that the Mexican oil company has not been able to invest any money in exploration or maintenance, because their funds are so over committed already. You go through the list: Pemex bonds, 7.75 percent; French francs, $750 million; Euro notes, Pemex, 8.375; $400 million, Austrian bond, dated July 23, 1993, due 1998. The list goes on and on and on. They are already well in hock for any oil they can pump until their supplies are exhausted, and we are going to take security out of this? You can't get blood out of a turnip.

Mr. DeFAZIO. If the gentlewoman would yield further, I was talking to a freshman Republican Member today, and that freshman stated unequivocally that they had done a whip of their own group and there were 3 Members of the 73-Member Republican freshman class who were prepared or leaning toward voting for the bailout of Mexico. So I think what has happened here is the leaders on both sides can count, and they did count. When they counted, they found probably out of this entire institution, the representatives of the people of the United States of America, duly elected and all equal under the Constitution, that probably less than 100 were willing to vote for this bailout. Now I guess what we are being told is we just do not know, we just do not know the facts. Well, then, give us the facts. That is what we are asking here. If there are facts that would change my mind, bring them forward. But there is an absence of fact and we are being treated as though we, as elected representatives of the people, well, we just do not know better. This is something that the big folks on Wall Street, the Federal Reserve decided in secret, Robin Rubin, managing director of Goldman, Sachs and the President behind closed doors, and public discussion is foreclosed and votes of the people are prohibited.

Mr. DeFAZIO. After hours.

Mr. DeFAZIO. So, if the gentlewoman would yield further, it is not exactly like we are sandbagging them with this resolution of inquiry. We have been waiting 3 weeks on issues of national concern involving tens of billions of taxpayers dollars, and we have had no response to a group of Members of Congress who have asked these questions.

Mr. DeFAZIO. To the Treasury and the Secretary of the Treasury and asked many of these same questions in a just straightforward and friendly manner. We thought it was things it was essential we know before any sort of bailout go forward. Have we had any response?

Mr. DeFAZIO. I bet, if the gentlewoman would yield further, I would imagine, if the city were to engage, perhaps, Goldman Sachs as their financial adviser, perhaps they could do very well on this matter because, if I could go back to the questions the gentlewoman is asking, as I recall, the gentlewoman from Ohio and a number of us signed a letter with a series of questions probably 3 weeks ago----

Mr. DeFAZIO. Perhaps, if the gentlewoman would yield, I like that idea, and perhaps what the Government of the District of Columbia could do would be similar to what Wall Street has been doing. They can go down to Mexico, get a bunch of pesos, which are declining rapidly in value, and then they can take and exchange them to the Federal Reserve Board for United States dollars at a preferred rate, and by arbitraging this they can probably earn up to a billion quite readily, and they can pay off their debts. I mean, if we can do this for the Government of Mexico and the Wall Street speculators, why would we not do it for the District of Columbia?

Mr. DeFAZIO. So, the situation we are confronted with is the Treasury, in concert with the Federal Reserve Board, agencies of the Federal Government of the United States, have extended, as far as we know, in excess of $40 billion of credits, loan guarantees, currency swaps and other instruments to Mexico, that our questions regarding the source of these funds, the exact amount and the terms of these funds, whether or not these funds are somehow secured--you know, what authorization exists for extending these funds without coming to Congress for appropriations; the gentlewoman saying that there is a possibility that this House will not ask to have those questions answered, that we could just be shut down here on the floor by ruling of the chair, and we will have no opportunity for debate, no opportunity to go forward and ask these questions. I, for one, as a Representative of a district from the Far West United States, feel that my constituents--this is not the greatest issue before them, but they would certainly like to know what authority the President, the Secretary of the Treasury, and the Federal Reserve, have, if it was extended to them by Congress, what amounts of money are controlled, what risk are involved, what collateral are involved. I mean all sorts of things we would like to know about even a small business transaction let alone one of this magnitude. have any opportunity to discuss that?

Mr. DeFAZIO

Mr. DeFAZIO. Mr. Chairman, I think the question in the debate is: Is this about illusion or reality, substance or not? This is a tough amendment. It is fair, and it is constitutional. I think there are significant constitutional problems with H.R. 2, and it is likely it may be rescinded by the legislation so you have a backup, if you believe in line-item authority for the President. Remember this is not a panacea. I know we are going to honor Ronald Reagan on his 84th birthday, but he did send a message to Congress on March 10, 1988, saying, ``These are the items I would delete if I had the line-item veto,'' and out of a budget deficit of $150 billion, Ronald Reagan could only find $1.5. This is not a panacea for the deficit. We are going to make some tough choices and decisions right here in this body if we want to get the deficit under control.

Mr. DeFAZIO

Mr. DeFAZIO. Mr. Speaker, today we have before the House the issue of the line-time veto, or did we really have a viable form of the line- item veto pending before this House? This could be a useful tool in the armamentarium of a President who is truly concerned about reducing the budget, a President who just does not want to use it in a political or punitive manner to go after a few programs, that he or she in the future could not convince the Congress to otherwise not fund. But the question is, is this a viable form, or is it a grandly symbolic gesture, a gesture intended for the 84th birthday of ex- President Ronald Well, let us just recount a few of the Reagan years so we can get this in perspective. Remember, President Reagan promised the people of the United States of America that he would balance the budget by 1984. Instead, his administration worked hand in glove with Congress to pile up the greatest amount of debt ever seen for this Nation. It took us 200 years to amass the first $900 billion of debt, but in a mere 8 years, President Reagan's administration more than tripled the national debt to over $3 trillion. Yes, they talked a great game about reducing the deficit and balancing the budget, but they never ever submitted a balanced budget. They never ever even submitted a budget within $100 billion of balance. And then finally in the twilight years, in the last year of the Reagan administration, Budget Director Miller submitted a list of what he said Ronald Reagan would have used the line-item veto on if only he had that power. The deficit in 1988 was $150 billion. After tremendous efforts downtown at the White House, President Reagan and Mr. Miller came up with a list of $1 billion in cuts that they would have made had they had the line-item veto. So instead of $150 billion deficit, it would have been $149 billion, and, of course, not a penny would have come from the Pentagon, the largest single source of general fund spending. Last year we passed a constitutional version of a line-item veto called an enhanced rescission. This year we have before us an empty gesture. Clearly, the bill that will be voted on finally today, the Stenholm amendment, the bill we passed last year having been defeated in a vote last Friday on the floor of this House, is unconstitutional, and will be thrown out by the courts. So if what we want is a grandly symbolic empty gesture, then vote ``yes'' on final passage today. Happy birthday, of course, to the ex-President. His legacy of a $3 trillion will stand as a monument for generations of Americans to come. I would hope this House would begin to take real steps toward cutting the Federal deficit and the Federal debt and no more gestures. Do not vote today for this empty gesture.

Mr. DeFAZIO

Mr. DeFAZIO. Mr. Speaker, a new Federal policy brokered in secret, adopted without a single hearing, a single open public meeting and no vote. A policy that will: Increase this year's deficit by $2.5 billion? Increase the cost of a mortgage on a $100,000 house by more than $500 a year--that makes a mockery of the puny income tax cuts we are talking about here. Drive up the cost of everything bought on credit--from automobiles to winter clothes for the kids. This is a policy specifically intended to drive up the rate of unemployment toward a target of 6 percent--that means 3\1/2\ million more Americans out of work than under the old target of 4 percent. Is this a new abuse heaped upon the American people by an insulated and arrogant Congress? No, this policy will be foisted on the American public by the secretive, arrogant, and insulated Federal Reserve Board, a small group of powerful bankers and economists who believe their control over our money supply is to be used to serve their friends and masters from Wall Street, not Main Street America. Mr. Speaker, it is time to stop Alan Greenspan and his cronies before they kill the economy again.

Mr. DeFAZIO

Mr. DeFAZIO. If I could interject at that point. There is an excellent quote which plays off that in the business section today of the Washington Post, page D1, where the vice-chairman of Goldman, Sachs, Robert Hormats, says the prestige of the President, the Fed Chairman, and the leadership of both Houses in Congress has been committed. If Congress were to kill the aid package, the feeling in the rest of the world would be that we are a nation in disarray, a country incapable of addressing a crisis. The psychological blow would be enormous. I wonder if Mr. Hormats is really talking about the blow to the United States of America and the people whom I represent who have not been speculating in Mexico, or is he talking about the blow to Goldman, Sachs, who has done 5.2 billion dollars' worth of business in Mexico for the last 3 years. If we are taking about that, I am really concerned what is being proposed now by the ex-director of Goldman, Sachs, the Secretary of the Treasury, is to bail out Mexico now through an Executive order, not through coming to the United States Congress. They found the Congress exerted, in this case, uncommon good sense; they said ``Wait a minute, we don't see the collateral or the national security interests. Why are we looking at this $40 billion bailout?'' I see the gentleman from California [Mr. Hunter] has arrived. Mr. Speaker, I yield to the gentleman from California.

Mr. DeFAZIO. I thank the gentleman. I think these are an extraordinary couple of days in the history of this republic. The House of Representatives and the Senate did stop the bailout of Mexico or at least indicated that they were not willing to go along readily. That was great. But now we have seen an end run around the Congress of the United States with the creative interpretation of a statute and another way to send $40 billion out the back door that Congress would not let go out the front door. Yet again the Federal Reserve is going to meet tomorrow to try and visit another catastrophe on the American people, to raise interest rates, to banish the threat of inflation that does not exist. There is a 30 year low in terms of inflation statistics to drive up unemployment. That is the policy of the Federal Reserve. Did this Congress authorize the Federal Reserve to drive up unemployment? Are those the underlying laws and statutes in the United States, and is that the authority which extended to the Federal Reserve: You are charged with driving up unemployment because we do not want to see wages go up, we don't want people to make a better standard of living? That is not what I got elected to do. I believe there are some extraordinary questions here, and they all seem to come back to the same very small influential group, the Federal Reserve, a few people on Wall Street and some people in the administration, some of whom used to work on Wall Street very recently, earning up to $26 million a year advising their company to invest $5.2 billion in Mexico, and now want to bail out Mexico. These are extraordinary times, and the people should be very attentive to what is going on here.