Peter DeFazio

Mr. DeFAZIO

Mr. DeFAZIO. Mr. Speaker, this evening we would like to address two subjects having to do with the health of the economy of the United States, and the financial stability of our Government. And they go to the proposed or pending interest rate increase before the Federal Reserve Board, and the announcements today made by the administration regarding the Mexican bailout which apparently now will be done by administrative order. I would like first to start, since it has not happened yet, perhaps we can prevent a disaster, start with the proposed interest rate increase by the Federal Reserve. Six times in the last year, a record, the Federal Reserve Board has seen inflation somewhere over the horizon and raised interest rates. Those six increases have hit hard at anybody in America who has to borrow money, families who want to borrow money to buy a house, individuals who want to borrow money to buy a car, people who want to start or continue with a small business, homebuilders and others. They have been hit time and time again by the Federal Reserve raising interest rates, this latest pending increase estimated to be one-half of a percent. Now, just think about it, this is a group that will meet in secret. The Federal Reserve meets in secret. They are accountable to no one. Calls were recently placed down there by my staff regarding the Mexican peso bailout, and we were told there was no business of the Congressman what involvement the Federal Reserve might have with our tax dollars and reserve money that underlies our bank accounts. They will meet in secret, and they will consider a policy change that is likely to raise this year's deficit by $2.5 billion. It is likely, according to the homebuilders, to drive a medium-priced home beyond the reach of 1 million families in America. That is after they have already driven up prices of mortgages by more than $200 a month on a $100,000 home in the last year. This single increase will drive up the mortgage on a $100,000 house by about $1,600. Now, here we are squabbling over these proposals to reduce taxes by a pizza a week for every American family, and the Federal Reserve in secret with no accountability to the U.S. Congress or the elected representatives of the people is going to unilaterally impose a policy that will increase the deficit by $2.5 billion, will increase the price of a home for a modest family, a $100,000 home, by $1,600 per year with no public scrutiny, no hearings, and no accountability. It is absolutely outrageous. Furthermore, they have adopted a policy now, they think that any rate of unemployment less than 6 percent is inflationary. God forbid that wages should go up a little bit in this country. They have not gone up for your average family in the last 20 years, and the Federal Reserve has a concerted policy to make sure that does not happen. They consider a wage increase for working Americans to be inflationary. Yet we had a wire story today that said we had the least pressure on employment costs since those statistics have been kept. Yet again, the Federal Reserve is going to preemptively raise interest rates with a concerted policy to put tens of thousands more Americans out of work. Remember, it used to be 4 percent was considered full employment in this country. Now they say 6-percent unemployment is full employment. That is 3\1/2\ million Americans who are going to be deprived of their jobs by the Federal Reserve because the Federal Reserve sees inflation that does not exist. Furthermore, Alan Greenspan, the Chairman of the Federal Reserve, appointed by the last Republican President, has said that we overstate inflation in this country. He testified just last week before the Banking Committee and said, ``Well, you know, the CPI overstates inflation by 1 to 1\1/2\ percent.'' That means, according to Alan Greenspan's own numbers, inflation is at more than a 30-year low in this country. Yet they are going to go back to the well one more time. They are going to raise interest rates again. They are going to raise the price of houses again, refrigerators, anything you buy on time will be increased. Why? Not because there is a real threat of inflation, but because it is being demanded by Wall Street. Now, it is an interesting question who makes monetary policy in this country, who controls the currency of the United States. And are we running this Nation for a few select bankers on Wall Street, or are we running this Nation for the American taxpayers? That brings up the Mexico bailout. The gentlewoman from Ohio [Ms. Kaptur] found a very interesting quote in the Wall Street Journal, and I thought you might want to present that.

Mr. DeFAZIO. The interesting problem is that we have been somewhat successful. I think when we first started to speak out against the Mexican bailout it was pretty lonely. The Republican Speaker and the Republican majority leader in the Senate went down to the White House to meet with the President, Alan Greenspan, Secretary of the Treasury, Democrat President. We had a bipartisan agreement that it was in the national security interest of the United States to bail out Mexico and rush something through the Congress. But then a few of us started standing up and asking embarrassing questions about why this was necessary, why the haste, what was the collateral, what exactly was the national security interest. These are questions of cost that have never been answered, and in fact that is why they will not try to have to move that legislation through the House. They do not want answers to those questions, the list that the gentlewoman from Ohio provided about exactly who holds these securities that are at risk. They are trying to come in and tell us it is pension funds. Well, we made some calls in my district, and I know other people have, and we have yet to find anybody managing a pension fund that will admit that they were speculating in junk bonds in Mexico, bonds that paid between 20 and 50 percent interest. Now I do not think there are very many prudent pension managers around the Nation who are engaged in such speculation, but apparently Goldman Sachs was into Mexico very big time, $5.2 billion over 4 years, and who knows how many of their clients were at risk here, as opposed to Goldman Sachs itself as a firm, and how much liability they might have for having provided poor advice to their clients talking about the emerging markets of Mexico, but in our success it appears we are about to be short-circuited. Where we could not get $40 billion out the front door, it appears that the President is going to attempt to take $40 billion out the back door, still working hand in glove with the Federal Reserve with secret amounts of money under terms not to be disclosed to the people's Representatives in the Congress, working through the International Stabilization Bank. How much of the money being channeled through the International Stabilization Bank is flowing out of our Federal Reserve, working through the International Monetary Fund? How much of the money coming through the International Monetary Fund is money being channeled by the Federal Reserve of the United States of America? I have not heard the outcry in Europe that we must stabilize Mexico in order to stabilize the world economy. I have not heard those cries, but we certainly heard the cries coming from the people running Goldman Sachs in Wall Street. So, now it turns out that the President, even though he came to the Congress in a bipartisan way to propose this bailout, has decided, well, actually he did not need the authority anyway, that there is another way to structure 5302, of the U.S. Code stabilizing exchange rates and arrangements. The gentleman from Vermont [Mr. Sanders] is on the Committee on Banking and Financial Services, and I know the gentlewoman from Ohio [Ms. Kaptur] is more versed than me, but the way I read this, Mr. Speaker, it allows us to engage in short-term swaps or exchanges of funds to defend the U.S. dollar, not 10-year loans to bail out a failing government in a collapsing economy. I ask, ``Would you want to address that for a moment?''

Mr. DeFAZIO. Mr. Speaker, I yield to the gentleman from Vermont for a moment.

Mr. DeFAZIO. Well, I appreciate the gentleman's comments there. I think it is certainly time to review this statute. It is obviously time to get some clarification from the administration on exactly what authority they believe they do have. Are there no limits? We are now pledging $20 billion to Mexico. Is there no limit? What if the $20 billion is not enough? Credible analysts came before our hearing, unlike the playacting hearing put on by the Committee on Banking and Financial Services, but a hearing where we invited people who had differing views from the administration and the bailout artists, and said ``No. $40 billion will not be enough. Mexico is such a basket case, if you are going to tie the U.S. dollar to the Mexican peso, you better be prepared to defend the U.S. dollar against a run by the Japanese and the Germans and others, because they do not think this is a very smart thing to do.'' They said, ``You can expect to be talking about $150 billion, not $40 billion dollars.'' So this stabilization fund, will the President next week announce that well, the $20 billion was not enough, and now we are going to go for another $50 billion or $100 billion? Where does this money come from? As you said, we have a $200 billion deficit, where does this money come from?

Mr. DeFAZIO. Well, actually what they do is they say, ``We never could have anticipated this.'' Of course we talked about the fact the peso was overvalued, would be devalued. I mean they can go back and review the debate, and actually we told them, as did credible economists. But the gentlewoman from Idaho [Mrs. Chenoweth] I believe has a question she would like to direct to the gentlewoman from Ohio [Ms. Kaptur] and I yield to her for that purpose.

Mr. DeFAZIO. Mr. Speaker, I thank the gentlewoman. I thank her for her leadership, and I can assure our colleagues that this is not the last they have heard from us on this issue, either on the Mexican bailout and the new attempts by the President to end run the Congress, or the Federal Reserve and their incessant increases in interest rates driving thousands of Americans out of work.

Mr. DeFAZIO. I think the gentlewoman for answering questions as best we can at this time. I think the gentlewoman from Idaho has raised an excellent question. The Bank for International Settlements, what is the United States' obligation to that bank at this point in time? How is it we came so recently to be represented on the board of directors by Alan Greenspan and the chairman of the New York Fed? What commitments has the United States made of either funds that are be channeled through the Federal Reserve Board in secret, or more overt agreements or obligations of the Federal treasury? How much do we have at risk here? I think these are excellent questions that need to be answered. You know, there is this wisdom that somehow we have to allow the Federal Reserve to operate in secret because it is the only way to give them political independence. The Bundesbank in Germany is I think the most highly regarded central bank in the world, and they are required to conduct all their deliberations, negotiations, discussions and votes in public. But yet our Federal Reserve somehow is the only agency of the Federal Government, more powerful than the Congress and the President combined in terms of the economic future of this country today, in terms of whether or not we bail out Mexico or raise interest rates again to fight inflation that no one else sees except for Alan Greenspan and a few other inflation warriors at the Federal Reserve, they do all this in secrecy. They change the policies to say they think 4 percent unemployment is too low and they would rather have 6 percent, because otherwise wages might go up a little bit and working people might earn more in this country and that might start an inflationary trend. At the same time they are tying us to international agreements and institutions which are diminishing the role of U.S. labor. So on the face of it their arguments are not even consistent. But they do not have to account to anyone. They do not have to answer questions if we call down there. My staff called down today to ask about conflicts of interest by members of the Federal Reserve Board. Do any members of the Federal Reserve Board represent regional banks which are heavily invested in Mexico, and have they disclosed that fact, have they recused themselves from voting as they apportion funds to bail out Mexico? No, we are not allowed to know the answer to that question. So what is this body we have created, that is so much beyond the public and the elected representatives of the people? Its role in this bailout is just extraordinary.

Mr. DeFAZIO. Did not the gentleman identify an article yesterday that said that because of the economic straits that our country is in that we are going to have to lower the loan guarantees made available to small businesses in this country?

Mr. DeFAZIO. I thank the gentleman. Mr. Speaker, I see the gentleman from Vermont [Mr. Sanders]. I say to the gentleman we are discussing both the Mexican bailout proposal and also Reserve Board that is obviously hand in glove involved with the bailout of Mexico. Mr. Speaker, I yield to the gentleman from Vermont.

Mr. DeFAZIO. In my State the thriving growth of the last 20 years has come from small businesses. We have had a few big corporations move in, but generally we can identify most of the growth that is coming in. Now we will have to cut back on loan guarantees for small businesses in America while we, for example, extend $40 billion to Mexico.

Mr. DeFAZIO. That is extraordinary. So somehow, I guess small businesses in the United States are not a good risk or we just cannot afford them, even if they are a good risk. And so we are going to have to cut back on that extension of credit. But a regime in Mexico, which has had three major financial crises, essentially two previous defaults in the last 12 years, which is an authoritarian regime which has lowered the standard of living of its own people by 25 percent in the last decade, which has, however, created 24 billionaires in a mere 7 years, is somehow a great credit risk. And there is nothing to worry about. But American businesses, well, I am sorry, we cannot afford to extend that kind of credit to American businesses. We are just going to have to cut that program back, and we are also going to cut our loans, rural electrification loans and other things. We do have a budget crisis. I agree. It is time to get it under control. But how is it that suddenly, when we have to bail out the savings and loans, we can do it off budget; when we have to bail out Mexico, we can do it off budget. But if it goes to average American people and their concerns, their small businesses, their livelihoods, their education, we are broke. This is a strange parallel to me.

Mr. DeFAZIO. I think a lot of our colleagues are not aware of the fact that a lot of these short-term tesobonos that the Mexican Government cannot turn over are paying rates of interest between 21 and 50 percent. Now, I do not know, but if someone offered me a 21 percent rate of return on my modest savings, I might say, is there not a risk. That seems like an awful high rate of return. If they said, no, Congressman, do not worry about it, there is no risk at all, I think maybe I would make a few phone calls. But the Wall Street people, the Goldman Sachs firm, which is into Mexico for $25.2 billion over the last 3 years, and others, said, oh, no, this is an emerging economy. There is no risk. This is just sort of like the United States except the people speak Spanish. There is no risk down there. Do not worry about the government. They just had an election. Well, they had an election 6 years ago. The party that lost won, and they were the one we liked the most. And this last time the party that we liked the most, well, they won again. They may have fixed the election, but they always win, so there is no risk. They do not allow people to organize, labor unions. And if they do organize the labor unions, do not worry, we also control the judiciary because we do not have an independent judiciary in this country. And the judiciary will take care of those pesky people trying to drive up wages there in Mexico. So we will keep wages down there even lower than we can drive wages in the United States so your investment in Mexico is totally safe. This is what is extraordinary to me, that we have allowed this thing to spin so far out of control, that we get sold such a bill of goods. Not you and I, since we voted against the NAFTA agreement, but so many of our colleagues. And now we are going to go to this extent to cover some very prestigious fannies around here and extend $40 billion of our taxpayers' money to bail them out. They could not get it through the Congress, to the credit of this institution. But now they are going to find another way to do it.

Mr. DeFAZIO. I yield to the gentlewoman from Ohio.

Mr. DeFAZIO. Mr. Speaker, I yield to the gentlewoman from Ohio.

Mr. DeFAZIO

Mr. DeFAZIO. Mr. Speaker, at this very moment the President of the United States is announcing yet another plan to bail out the Government of Mexico. He says it is an issue of national security. The President is wrong. Meanwhile on the other side of town, Mr. Speaker, a secret meeting of the Federal Reserve Board to consider a policy change that will affect the security of every American family is going on with little notice. They may propose the seventh increase in 1 year to fight imaginary inflation. This act could raise the deficit by $2.5 billion, drive up the costs of a hundred-thousand-dollar house by $1600 a year, close down home building, close small businesses, and it is designed to increase unemployment to 6 percent. The misguided policies of the Federal Reserve are a real national security issue, and I would advise the President to drop the Mexican bailout and go after the no-growth policies of the Federal Reserve Board.

Mr. DeFAZIO

Mr. DeFAZIO. Mr. Chairman, I thank the gentleman for yielding time to me. Mr. Chairman, Harry Truman used to say, in an earlier and perhaps better era here in D.C., ``The buck stops here.'' In today's Washington, D.C. your buck barely gets a chance to wipe its feet before it is back out the door in the form of some new Federal spending. Without the fiscal discipline of a balanced budget amendment, I doubt this Congress will be able to make the tough choices that are required, no matter what party is in charge. It is time to quit passing the buck, or in this case, the debt, to future generations and put our fiscal house in order. The national debt is nearly 5 times higher today than it was when Ronald Reagan became President in 1981. That is a disgraceful bipartisan legacy of irresponsible spending and tax giveaways. The total debt of the Federal Government totals more than $4.6 trillion, $16,000 for every man, woman and child in America. Interest alone will total more than $225 billion this year. That is 10 times more than all the funds spent by the Federal Government on all education programs and assistance this year. Some oppose the balanced budget amendment over genuine concern for the fate of Social Security, child nutrition, education funding, or other meritorious programs. An honest assessment of those programs shows us they have not done well during this decade of spend and debt. We accumulated $4 trillion of debt, but there is not a penny in the Social Security Trust Fund. It is full of IOUs. How are we going to cash those IOUs in when we need them? Twenty percent of Oregon's children live in poverty. Many go to bed hungry every night. We know of the shortfall in education funding. It is time to get our priorities straight, make some tough decisions. As we make those tough choices, I am confident these programs, the programs I care about, will do better than they did during the spendthrift decade. My home State of Oregon has a balanced budget amendment, as do most other States. Every local government in Oregon is required to balance its books every year, as does every responsible family. The Federal Government can do the same.

Mr. DeFAZIO

Mr. DeFAZIO. Madam Speaker, we cannot go on as a nation piling debt on debt year after year. The national debt is nearly five times higher today than it was when Ronald Reagan became President in 1981. That is a disgraceful, bipartisan legacy of irresponsible spending and tax giveaways. The total debt of the Federal Government totals more than $4.6 trillion, more than $16,000 for every man, woman, and child in America. Interest alone will total more than $225 billion, more than 10 times all the Federal funds spent on all education programs and assistance by the Federal Government. Some oppose the balanced budget amendment over genuine concern for the fate of Social Security, child nutrition, education funding, or other meritorious programs. An honest assessment of these programs shows us they have not done well while we accumulated $4 trillion in debt these last 12 years. There is not a penny in the Social Security trust fund. It has all been borrowed and spent, replaced by a pile of IOU's. Twenty percent of my State's children live in poverty and go to bed hungry every night. We all know the shortfall in education funding. It is time to balance the Federal budget.

Mr. DeFAZIO

Mr. DeFAZIO. Mr. Speaker, I rise in this hiatus in the debate for the Balanced Budget Amendment and the unfunded mandates to discuss something that I think is most appropriate. That is the reform of the welfare programs and the hunger programs in our Nation. Mr. Speaker, I certainly do not rise to say that the current system is perfect. There is a lot of need for improvement and reform. However, the question is, if we look at the Republican Contract for America and we look at their provisions regarding welfare reform and hunger programs, I am afraid that in a rush to enact that contract, that the Republican leadership has targeted a powerless, pretty much nonvoting population: America's hunger, their children, their families. What they are proposing is not a solution to hunger and poverty, or a better way to do it, but block grants that may ultimately expand hunger problems in America, and in fact shift costs to the States. This is not reform, this is denial. This is shifting responsibilities from the Federal Government to the State government, something I thought we were going to stop doing around here. I challenge our new leadership to end hunger and poverty, not the programs that feed hungry families and their children. Republicans are passing the burden of responsibility and the price tag to the States. My State alone, Oregon, under their proposal would be handed the programs for poverty and hunger, currently federally assisted programs, with $64 million less than in 1996 to solve the problem. How is that going to help the State of Oregon? However, the Republicans have a solution for that, too. Their unfunded mandates legislation has an effective date of next October. You know why the effective date is next October? Because they know they have hidden bombs in the Contract for America, huge new unfunded mandates for the States, cuts in successful State programs. However, they don't want to apply the unfunded mandates legislation before or during the adoption of the Contract on America, particularly those provisions that go to welfare and hunger, because they know this is their intention, to shift costs to the States, not to look at a way of improving these programs so we can better combat this problem. In a nation number one in the industrialized nations in defense spending, national wealth, and the number of billionaires, I think it is a pretty sad commentary on our priorities that we are also number one in child and elderly poverty and hunger. Many of our anti-hunger programs were enacted in the 1960's and 1970's in response to a documented wide range of problems of malnutrition. These programs have in good part worked. We have decreased the incidence of infant mortality and low birth weight babies. We have improved necessary nutrition food intake, both for our children and elderly, by 20 to 40 percent. Mr. Chairman, if we want to take, say, the hardest-hearted green eyeshade view of this issue, there is another way to look at it. These programs save the American taxpayers money. They not only improve the quality of life for the next generation, but they save money. Every dollar that is invested in the WIC program saves up to $4 in Medicaid savings, and a whole lot of other funds for the States in terms of special education programs dealing with a new epidemic of low birth weight babies. If we are really talking about investments that make sense, if we are talking about reforms that make sense, then we should be putting more money into this program, not less. However, that is not in the contract. We often have these academic debates around here, and it sometimes helps to put a little bit of a face on it. My background is in gerontology. I have worked with senior citizens. I have seen seniors-- people who have given their whole lives, raised a couple of generations, their kids, their grandkids, and worked and worked and worked, and are living on a small Social Security--I have seen them cry when I brought them a hot meal, because it was the only hot meal that they had had in days. Are we going to end these programs? Are we going to turn back the clock? The Contract would, or it will say, ``Well, we are going to give a block grant to the States, but we are going to cut the funding.'' How are the States going to pick up that additional burden? If the Contract is honest, then the Contract will adopt the unfunded mandates legislation tomorrow so we know what costs we are shifting to the States next year.

Mr. DeFAZIO

Mr. DeFAZIO. Mr. Speaker, there are those on the other side of the aisle who make light of the pending investigation on ethics of Speaker Gingrich. I believe they do so at their own peril, and in contradiction of the position taken by Representative Gingrich in July 1988. In July 1988, Speaker Gingrich, or at that time Representative Gingrich, waxed very eloquent in a press release regarding the duties and the burdens of the Speaker and the duties and burdens of the House in investigating the Speaker of the House, and the fact that it should not be done by peers in the House of Representatives but in fact by an outside counsel, because it is so important to assure the integrity of that office. Now, Mr. Speaker, we are confronted with a situation where several Members, several Republican Members of the Ethics Committee, have past associations with GOPAC, the secret and multi-million-dollar slush fund which is the subject of the ethics complaint. Here we are, we have members of the committee who have a conflict of interest, who should recuse themselves, but if they recuse themselves, only new members could be appointed by the Speaker, so the Speaker in effect would be appointing his own judge and jury. There is only one way out of this for Speaker Gingrich. That is for Speaker Gingrich to take the advice of Representative Newt Gingrich in 1988 and appoint an outside counsel, so the American people can be assured that the integrity of this office is upheld and the integrity of the U.S. Congress is upheld without any possible assertion of undue influence.

Mr. DeFAZIO

Mr. DeFAZIO. Mr. Speaker, unlike the allegations of the earlier speaker, the gentleman from Indiana, I do not want to slow down the contract. I am eager to debate the contract on the floor. I would even like to debate it in the committee. I would even like to have an open process, as has been promised in committee and on the floor, and let the sunshine in. But we are going to have to remove some of the gag rules being imposed by the new Republican majority before we can do that. But there is one thing I do want to stop dead. I want to stop dead the misbegotten bailout of the Mexican economy and those who have been speculating so lucratively in Mexico. It was proposed by President Clinton, but now it is being quietly manipulated through Congress behind closed doors by Speaker Gingrich and Majority Leader Dole. Here is the headline in the Washington Times: ``Gingrich Sees Hill Approval of Mexican Bailout.'' If this bailout passes this body, it will be Speaker Gingrich's version of a bailout, not President Clinton's. I ask the Members to defeat the bailout, no matter whose it is.

Mr. DeFAZIO

Mr. DeFAZIO. Mr. Chairman, I move to strike the requisite number of words. Mr. Chairman, if it is the objective of the gentleman from Connecticut [Mr. Shays] to know the cost of the legislation, and not have any unintended effects, I believe he will have an opportunity later during the consideration of this bill to vote on the Moran bill which passed out of committee in the last Congress, which in fact does that without complications. It will be offered as a substitute. Another gentleman rose earlier, Mr. Chairman, to talk about his experience in local government. I was a county commissioner in the early 1980's. There are a couple of ways to put burdens on local government. One is unfunded mandates, and I believe we should address that problem. The second is to jerk funds out from underneath counties and local governments, which was done by President Reagan and the Congress when they killed revenue sharing and used the money for Star Wars. We have to look out for both of those things. We have to get our priorities straight around here. Where is the money better spent? Mr. Chairman, beyond that, during this last week I have heard a lot said about book deals here on the floor. However, if we fail to pass this amendment, Mr. Chairman, we are taking a page out of another book, a book by Dickens. We will be turning back the clock to an earlier and dark time when children were exploited and oppressed for their labor. I know it is certainly not and could not be the objective of the authors of this bill to turn back the laws to the days of abuse of child labor or the days of Sinclair Lewis and The Jungle, with unsafe and unsanitary workplaces, or finally to prevent the imposition of a Federal minimum wage, where the various States, if we saw this new vision, could perhaps engage in a bidding war. Perhaps we could drive down wages to the level of Mexico, and then we would no longer have to fear the loss of our jobs under the NAFTA agreement. Child labor, unsafe and unsantiary workplaces, sweatshops, subpoverty authors of this bill. I would urge them, Mr. Chairman, since that is not their objective, to adopt this amendment.

Mr. DeFAZIO

Mr. DeFAZIO. Wall Street, the influential lobbyists in Washington, DC, and Republicans in Congress prattle on about free markets and free trade until it is their speculative investments and profits on the line. If NAFTA were really about free trade, and free markets, then it would mean a free fall for both the Mexican tax market and a free fall for the peso. Heaven forbid that we should let the free market work when Wall Street's major financiers, Mexico's 24 billionaires, multinational corporations, big brokerage houses, and international investment bankers have gambled and lost. Fred Bergsten, director, Institute for International Economics, says of Members of Congress such as myself who oppose the bailout Mexico, ``They don't realize they could cause what might be like an accidental nuclear war.'' Out of such outrageous hyperbole is born the idea that the bailout of Mexico's billionaires and international speculators is an issue of national security which requires the United States to put its full faith and credit, that is read exactly, more specifically, United States taxpayers at risk. In the spirit of openness and sunshine, demanded by the new Republican majority in Congress and adopted in their rules, let us have some hearings on this issue. Let us have hearings before the Republican leaders jam the Mexican bailout through in the dark of the night, without any deliberation by this House.

Mr. DeFAZIO

Mr. DeFAZIO. Mr. Speaker, many seem to think that the $40 billion bailout of Mexico has gone from the business page to the obituary page. If only that were true. We need very much to be on our guard and watch out. As I speak here on the floor, all across this Capitol and around Washington backroom deals are being cut to put American taxpayers on the line to bail out investment houses on Wall Street, banks, and other speculators that were very lucratively involved in the Mexican market. They were getting 20 percent and more interest. Don't you think maybe if someone is paying you 20 percent interest or 25 or 30 percent interest, there is a little bit of risk that flows with that investment? Wall Street doesn't think so, nor do other speculators. They think the American taxpayers should bail them out. Of course, they are not going to give us any of the 20 or 25 percent interest that they collected, thank you very much. They want it all. Whose money is at risk? Whose money is at risk? A very, very senior administration official yesterday, in a closed door meeting of the Democratic income people's money at risk. Their pension funds are invested in Mexico, he said. Pension funds? Any pension administrator who is investing in junk bonds in Mexico--and that is what these things are, junk bonds that pay 20 to 40 percent interest, from a country that defaulted on all of its loans just 12 years ago, no one thinks they are a good risk. Any pension administrator who has any substantial amount of money down there, there is a cause of action against him by the holders of that pension fund. I don't believe that is true. If it is true, let's disclose it. We have sent a letter to the Secretary of the Treasury asking ``Whose money is at risk here? Who are we bailing out?'' There has been no response. I don't know that we will ever know who we are bailing out, because apparently no hearings will ever be held on this bailout legislation. The largest bailout since the savings and loan crisis, and no hearings are to be allowed. Mr. Speaker, I have heard my Republican colleagues around here chortling a little bit because Bill Clinton is so closely identified with this issue. At least, although I disagree with him, President Clinton has the guts to go out and say he thinks this needs to be done. However, remember, the Republicans have an absolute stranglehold on both the House and Senate. Any bill that moves through here has to have their permission, has to have their votes. It is not a Democratic Congress or a Democratic Senate, so they do not want to hold hearings. No, they do not want to hold hearings. They do not want to be identified with it. They do not want people to really know what is going on. They do not want possibly to upset some of those people on Wall Street who so handsomely provided for their elections. It is business as usual here in Washington, DC, folks, despite all the hoopla about the contract, despite all the hoopla about the new majority, business as usual, back room deals, $40 billion, U.S. taxpayers on the line, and no hearings. That is even worse than the worst abuse I can think of of my own party in the last Congress. Now we have even drug in the book deal. Today or yesterday the chairman of the House Committee on Banking and Financial Services, the gentleman from Iowa [Mr. Leach], sent a note to White House Chief of Staff Leon Panetta tying Republican support of the Mexican $40 billion bailout to the need to get guarantees, guarantees, of kinder treatment by Democrats of House Speaker Newt Gingrich of Georgia, so there you have it, folks. If you think this isn't business as usual, in fact it is even worse than business as usual, a $40 billion bailout, for whom, putting the American taxpayers on the line, and the Republican- controlled Congress is going to refuse to hold a single hearing on this, and will try and jam this thing through in the dark of the night some night next week or the week after.

Mr. DeFAZIO

Mr. DeFAZIO. Mr. Speaker, I do not believe that we can have two standards for speech, I do not believe that we can change the precedents and the rules of the House arbitrarily, and certainly in this Chamber we should not abridge the first amendment. I just want to comment that I am not sure that most of our Members and most of the public can appreciate how serious a violation we think the Speaker has engaged in and how deeply we take this issue. There are, I think, two different areas we have to look at to understand why we would charge this as a total betrayal of trust. Whether it is a total betrayal of trust because of his lack of judgment, or whether it is a total betrayal of trust because of deliberate actions I do not think we know yet. Those are the words of now-Speaker Gingrich regarding Speaker Wright on the floor of the House. He went on further to call Speaker Wright a collaborator and a quizzling, and all of these words were spoken after the ruling quoted by the Chair of June 15, 1988.

Mr. DeFAZIO

Mr. DeFAZIO. Mr. Speaker, referring to a couple of speakers before us, they somehow claim that we are delaying the activities of the House. The House is in pro forma session today. That means those of us who flew across the United States to attend this session, there will be no recorded votes or there should be only procedural matters. There is no substantive legislation before us. The unfunded mandates bill is not before us, because it has been delayed by the majority. The majority told us all bills will come before the House with open rules. Well, if you want to bring your unfunded mandate bill up with a open rule, what is the problem? We could be in session right now doing unfunded mandates, but you have us waiting for the Rules Committee because they want to restrict debate on unfunded mandates. Where is the balanced budget amendment, the balanced budget amendment we were promised you would come forward with? I am a cosponsor of a bipartisan version. Where is it? It is hung up by the majority because they want to insist on a super majority for taxes in that proposal. It is your holdup, not ours.