Barney Frank

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. The gentleman seems to have forgotten that his side forgot to do a budget this year. He not only forgot about NASA, he forgot to do a budget. There has been no 602(b) allocation, so his whole argument is nonsensical. What the gentleman from Massachusetts talked about is more money from HUD. The gentleman from New York said that must come from one of these other agencies, but there has not yet been the basic decision that allocates that money. In fact, if the gentleman's amendment were to pass, we could then have the appropriators or the Committee on the Budget give more money for the whole 602(b) issue. I have never seen an issue of less substance brought forward. I yield to the gentleman from New York.

Mr. FRANK of Massachusetts. I would have to say to the gentleman that I only have 5 minutes.

Mr. FRANK of Massachusetts. I have to say to the gentleman I only have 5 minutes. I do not have enough time for the gentleman to correct all his remarks.

Mr. FRANK of Massachusetts. I object, Mr. Chairman.

Mr. FRANK of Massachusetts. Mr. Chairman, I do not want to set the precedent because I do not have enough time to entertain all the corrections that would be entailed. The point is this, however. Money is denigrated whenever poor people are the recipients. The gentleman from New York just correctly said that it would be very unfortunate for the veterans if they lost money. I agree. One reason I am skeptical about this budget deal is that among the items that will be capped in the budget deal will be the discretionary money for veterans' health, and I am unhappy with that, and I have been in a few veterans' hospitals lately. When we talk about the military, the gentleman says we need more money. By the way, the gentleman from Massachusetts talked about cutting the B-2 bomber. I do not think that is a big recruiting item. We are told that we need more money for the Veterans Administration if we want to do better for veterans' health, and I agree. We are told we need more money for the military, if we think they are underfunded. I do not. How come it is only when we talk about benefiting the poor that money somehow becomes irrelevant? Money is not some objectified thing in itself. It is a claim on resources. What we are saying is a substantial part of the problem with public housing has been a lack of resources. The gentleman from New York said and the gentleman from Louisiana said there are housing authorities that are rotting; they have holes in the windows. Are we going to talk those holes away? Are we going to just give people counseling so that we fix heating systems? Yes, for a lot of reasons there are serious physical deterioration problems. We are saying to you that all of your self-sufficiency contracts and your 8-hour-a-month work requirements, like them or not, do nothing, nothing to deal with these ongoing serious physical structural problems. The gentleman from Massachusetts is talking seriously about them. To argue that you are going to transform, in fact, people on the majority side talk about public housing as this terrible, physically rotting sinkhole full of social problems, but somehow more money is irrelevant to dealing with them. It is the only context where poor people are the potential recipients where people on the other side are inclined to denigrate the value of money. When it comes to getting wealthy people to work hard, they need more money. When it comes to defending the country, we need more money. When it comes to health for veterans, we need more money. When it comes to fixing up the admittedly terrible conditions in much of public housing, money somehow becomes irrelevant.

Mr. FRANK of Massachusetts. Mr. Chairman, will the gentleman yield?

Mr. FRANK of Massachusetts. Mr. Chairman, I have to say to my friend with all sincerity, invoking the President is not an argument. Invoking the President, with whom you are free to disagree and disagree frequently, the fact that the gentleman coincide on this one, as the gentleman understands, is not an argument. It does not go to the merits. Second, I have to say I am sorry to hear the gentleman talk about, oh, it is going to be money down a rathole. In some few places, yes. Nobody here is contesting the strengthening of HUD's ability to take over housing projects. We are all for that. But I will tell the gentleman that I have been to many of the housing authorities in my district and elsewhere, and they are well run; they are not ratholes, and giving them more money is not pouring money down a rathole. The gentleman knows that.

Mr. FRANK of Massachusetts. Mr. Chairman, will the gentleman further yield?

Mr. FRANK of Massachusetts. But many of us have also talked about substantial reductions, the space station, the B-2 bomber, areas that we consider----

Mr. FRANK of Massachusetts. Mr. Chairman, I assume the gentleman intends for the time to be equally divided.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Mr. Speaker, as budget negotiations go forward, it is clear that the insistence on the part of many in both Congress and the executive branch on maintaining a military budget far beyond what is genuinely needed for American security threatens severe social hardship within the United States, and elsewhere in the world. The price of exempting the Pentagon from the budget discipline that is necessary to reach a balanced budget in the year 2002 is devastating cuts in the whole range of civilian programs--from health care and environmental protection within the United States through aid for local law enforcement in our communities onto economic assistance to fight poverty disease and nuclear proliferation overseas. The New York Times editorial on April 30 addresses this issue in a forceful, lucid and persuasive fashion. I am inserting this editorial here: [From the New York Times, Apr. 30, 1997] A Chance to Shrink the Pentagon With foreign military threats receding and pressure to balance the budget building, the Clinton Administration and Congress have a rare opportunity to reduce Pentagon spending to more reasonable levels. Maintaining American military superiority is vital, but it does not require an annual Pentagon budget of $250 billion. Making reductions must begin with recognition that cold-war benchmarks are misleading. Arguing that a 1998 Pentagon budget of $250 billion is dangerously diminished because it falls 40 percent below the 1985 level is tomfoolery. It dodges the essential point that most defense spending from 1947 to 1992 was devoted to dealing with the Soviet Union and its allies, a threat that no longer exists. Politicians should also recognize that Pentagon spending is a significant force only in communities with large defense manufacturers or military bases. Pentagon spending is not the flywheel of prosperity in a $7 trillion national economy. Certainly, the United States cannot be complacent about its security. Iraq remains a threat to American interests in the Persian Gulf region. North Korea, strained by famine and heavily armed, could seek relief by renewing hostilities on the Korean Peninsula. China aims to be a military power in the decades ahead. Terrorism is a constant danger, and the need to send American troops abroad in peacekeeping roles is likely to grow. But no current or near-term peril comes anywhere close to the former Soviet threat. The Pentagon is examining military requirements as part of its Quadrennial Defense Review, but do not expect much creative thinking from this exercise. The generals should be redesigning the American military to meet the threats of a new era, an exercise that might well slash budgets and discard the principle that America be able to fight two regional wars simultaneously. That principle has justified an Army of 495,000 active-duty troops and a Navy with 12 aircraft carriers, just one less than the cold-war fleet. Scaling back to a more realistic one-war doctrine, plus sufficient air power to pin down an enemy elsewhere, would save $10 billion to $20 billion a year, even with more spending on stealth aircraft. Closing and consolidating bases and other support operations would produce additional savings. Instead of looking seriously at these options, the generals are trying to determine how little they can cut within the Administration's five-year budget plan for the Pentagon. Under that plan, the budget would grow steadily, reaching $278 billion in 2002. It includes a whopping 40 percent increase in spending for new weapons. It would be interesting to see where planning would lead if it were not governed by the Clinton Administration's escalating Pentagon budgets and the military's exaggerated threat assessments. It is not unreasonable to believe that American security can be adequately protected for considerably less than $240 billion a year.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. I yield to the gentleman from Illinois.

Mr. FRANK of Massachusetts. Mr. Chairman, the gentleman has clearly not followed this. Yes, we believe in this body that women with their children or fathers with their children should be there and there is some evidence that that is important, but if they are poor enough, then they lose that right to do it all the time, and 8 hours a month in principle may not be that much, but if one does not have child care available to them, 8 hours a month could be a problem, particularly if they have to schedule the 8 hours. There may be some unscheduled problems with the children, and I have to say imposing this restriction on every housing authority, whether they want to do it or not, on everyone in the country, yes, it does to us mean that our colleagues are singling out the poorest of the poor for a harsh treatment. And I will concede one thing to the gentleman from Iowa. He says this is philosophically in tune with the people. I recognize, given the distorted view of things it comes across, it will be popular, but it is mean, it is not right, and I would hope we would at least make this exemption.

Mr. FRANK of Massachusetts. To give the gentleman from Iowa his due, he has an alternative argument, which is once there is a vote of Federal funds to a local government, then the unfunded mandate issue disappears. His argument is that because the local governments have the theoretical right to refuse all public housing funds, any condition we impose on them which increases their cost is not an unfunded mandate. As I said, that is the great gotcha. What it means is that you can give money to a local government, they incur ongoing operations, and the way they can get around it, the gentleman from Iowa says, is, ``It's not an unfunded mandate, you can abandon public housing altogether, and if you don't, we gotcha.''

Mr. FRANK of Massachusetts. Mr. Chairman, will the gentleman yield?

Mr. FRANK of Massachusetts. Mr. Chairman, when the Republican chairman of the committee gets up and his basic argument is ``The President made me do it,'' we understand the weakness of his substantive arguments. The gentleman even said we should be for this because this is the same principle as the AmeriCorps. I understood there was on the other side no great love for AmeriCorps, so I assume all those who are against AmeriCorps would agree with the gentleman from North Carolina [Mr. Watt]. But most damaging is the argument the gentleman is making, and people should understand here how he is narrowing the unfunded mandate piece. What he says is this: An unfunded mandate should be considered only if de novo, out of the blue, we impose a restriction. He acknowledges this will cost the local communities more money, but he says it is a condition and therefore we can impose greater costs on them as a condition of funds. But understand, these are funds they are now getting and have been getting for a long time. Theoretically, his logical argument is, well, if they do not like the mandate, they can say no to the funds; therefore, it is not an unfunded mandate. But is it realistic to tell local communities that, having built this public housing, having people live in it, having the obligation to maintain it, they can now say no to the funds? What the gentleman from Iowa is doing is turning the unfunded mandate point into a great ``gotcha'' for the communities. We give them grants, we establish some programs, and under his interpretation, years later, 20 and 30 years later, having provided for a program where they are locked in, where they are committed, where they have ongoing obligations, we then add a condition, and under the gentleman from Iowa's ruling, any expense, and it is a ``gotcha'' because we say, hey, if you do not like the condition, give up the money. But of course this is wholly unrealistic, to expect local communities which have now got this ongoing responsibility to residents to give up the money. So if we reject the point of order, we accept the gentleman from Iowa's interpretation, it is yes, we cannot do a mandate out of the blue. But where there has been an ongoing, long-continuing program, where local communities have been given money to do something, we can ratchet up the conditions, we can impose new conditions, and if they complain it will cost them money, we say, well, they can always give it up. I do not think that is the spirit of the unfunded mandate.

Mr. FRANK of Massachusetts. Mr. Chairman, I move to strike the requisite number of words. Let me begin with that point and assure the gentleman from Texas and others that when the Export-Import Bank reauthorization comes up, and I am for the Export-Import Bank, I think it performs an important function, but I think we will offer an amendment to require some community service. Colin Powell has been invoked. One of the things that my friend the chairman is very good at is the principle of selective invocation. The President alternatively is someone to be scorned and someone whose word is not to be questioned when there is an unpopular issue he wants to hide behind. Colin Powell specifically criticized the corporate sector. My colleagues may have read he asked to be invited to speak to the boards of directors, where the corporate executives have said voluntary work and contributions are not in the shareholders' interest. We will offer an amendment, I guarantee to the gentleman, applying this principle, if it is to be mandatory, to the Export-Import Bank. We will not evict them from their homes, their homes are generally too large to find them, the people who live in them, but we will make it a condition. We should also do it with Farmers Home. We have in this committee jurisdiction over the Farmers Home Program, a very justified and sometimes very comfortable level of subsidy. The gentleman says, no, how can you say we are doing this because of some animus against poor people? How can that be? I should have said, no, it is about urban poor people. When has anyone ever suggested doing this for the Farmers Home Program? A direct benefit. We are not talking now about a tax subsidy, we are not talking about a tax thing. This committee has jurisdiction over a lot of benefits. One group, the poorest among us, are being singled out. I would also say, people have said, well, they should have jobs. Frankly, one thing that is going to happen, more people in public housing will be unemployed if the Federal Reserve has its way. I wish the chairman would join us in having a hearing on the Federal Reserve System. The gentleman who just spoke talked about the monetary system. The Federal Reserve Open Market Committee just decided that we have about 450,000 too many jobs in America. It is very clear if you look at them that they thought when unemployment went from 5.5 down to 5.2 that that had exceeded what they thought was the level of jobs and they are moving to increase it. By the way, when you talk about the very wealthy, they are solicitous there. Mr. Meyer in his speech said that the Fed had to act to ``validate the bond market.'' God forbid there should be low self- esteem on Wall Street. We will step in there. But the cost of validating the bond market is about .3 percent, we can estimate, of unemployment, another 436,000 people thrown out of work, more than that. I would say to the chairman, let us have a hearing. Many of us, every single Democrat, the Independent member of the Committee on Banking and Financial Services have asked for a hearing. The chairman is refusing to allow us to have a hearing until after two more meetings of the Open Market Committee. These are tied in, these are relevant, I would say to the Parliamentarian anticipatorily, because the more we let the Federal Reserve, without debate, increase unemployment in America, the greater we will exacerbate these conditions. The fact is that there is one other great example of selective principle on the Republican side here. This is not a mandate, but it is mandatory imposition on every public housing authority in America. Public housing authorities may say, well, you know in our case it would not make sense. The general principle of requiring people to work may be a good one, but in this particular circumstance given the nature of our buildings, given the neighborhood we are in, given the population we have, it would not make sense. What is the Republican answer to a housing authority that says in our special local conditions that would not make sense. The answer is: The Federal Government knows best, shut up and do it. This is an example of as binding a centrally imposed detailed requirement as you will see. Maybe in my housing authority it should be 6 hours. Maybe it should be 12. No, 8 hours. We are going to tell every housing authority everywhere in the country exactly what they have to do. When it comes in fact to roughing up the poor a little bit, and the gentleman from Iowa is correct, he says he feels in tune philosophically with the American people. Unfortunately I think that is correct. I think public housing has been so mischaracterized and the misunderstanding of what drives people into poverty is so widespread that he may well be philosophically in tune with the American people, but I would rather be philosophically in tune with the fundamental moral principle of decency and compassion and social justice. And to say to the people who get a lot of money through the Export-Import Bank, or housing through the Farmers Home, Godspeed, not a nickel in return. But to the poorest of the poor, you will do 8 hours of work a month whether your housing authority makes sense or not. I do not think that is a very good idea. I am not sure what the President of the United States thinks about that. If it gives comfort to the chairman of the committee, that instead of having to defend it on the merit he can invoke the President, he is welcome to invoke the President. But I do not think that selective invocation of an administration with which he is often in disagreement helps when we are talking about the violation of fundamental principles of States rights and fairness. I hope the amendment is adopted.

Mr. FRANK of Massachusetts. If the gentleman from North Carolina will yield, maybe it is because he is representing the President on this issue.

Mr. FRANK of Massachusetts. I yield to the gentleman from Illinois.

Mr. FRANK of Massachusetts. The gentleman objects. The gentleman has a right to object, but what he cannot do is object to the insertion of the President's language and continue to cite it. I know lawyers sometimes get criticized but they have a very useful term called estoppel. If in fact the gentleman objects as he has just done to using the President's language on this as the legislation, he is estopped from using the President as the justification. So I trust the Republican side having objected to my effort to amend it with the President's language, we will not hear the President again invoked. The President I suppose in this bill as far as you are concerned will be here in spirit even though he cannot be here in language, but I do not think that is an appropriate parliamentary thing. Let us now get that stalking horse out of here. We are prepared to accept the President's language. Your side apparently is not. If you want to, and it is only one objective, maybe we can work this out. Second, let us now talk about the substance. The fact is, and here is why I subscribe to the language of my friends from North Carolina, Illinois, and Massachusetts, why I believe this does bespeak a meanness toward people in low income. Let me give an analogy. We had a very similar debate about this during the welfare bill. Some of us felt that the language as it applied to legal immigrants, with regard to the exclusion of legal immigrants from a whole variety of programs was mean. We were told, oh, no, that is just soft. The American people want it. The gentleman from Iowa said we are in tune with the American people. You may have been in tune with the American people last year and what have you got, a situation which almost everybody admits is intolerable. We did exactly that last year. We listened to the people who said let us get tough and let us not fool around and we now have 80-year-olds desperate, 80-year-olds committing suicide in some cases. You are going to have to try to fix it. Do not make the mistake again. Impose on every housing authority, everywhere in America, this obligation. By the way, let us note that using this kind of labor in some cases will cost you more than it will bring in in dollars. We are not talking about something that has any cash value. It is going to be expensive for some housing authorities to administer this. What did CBO say it is going to cost? About $30 million, $35 million. For the larger housing authorities, they can probably absorb it. For the smaller ones, it does not. My colleagues underfund the housing authorities and simultaneously impose this requirement on them, and they impose it only on the very poor, only on the unemployed poor. We can say, ``Well, we'll think about it,'' but nobody has done this for recipients of direct subsidy from the Export-Import Bank, nobody has done this for the people who get farm subsidies, no one has done it for a whole range of other things, and to single out the lowest income group and impose this restriction bespeaks the sense that they are therefore really people of low moral fiber. Why do my colleagues have to force them to do this? Why do they pick out the poorest of the poor and say, if they are not working, we are going to make them do this, because the underlying assumption is these are not people of great moral worth, these are not people who will do it, and please, as I say again, do not, basic principle, do not invoke the President if my colleagues are not prepared to invoke the President. If my colleagues want to accept the President's language, invoke the President for support, but if they object to the President's language, let us not have the President being thrown in that way. This is a very clear-cut singling out of the poorest of the poor in public housing.

Mr. FRANK of Massachusetts. Mr. Chairman, I move to strike the requisite number of words. Let me begin in a spirit of conciliation. The chairman has several times cited the position of the President. I would ask unanimous consent that we substitute the language submitted in this regard by the administration for the language in the bill.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Mr. Speaker, with the budget negotiations going forward, many of us are disturbed by the apparent assumption that military spending should be continued at its current level while significant reductions are imposed on a wide range of important nonmilitary programs. Health care, environmental cleanup, education, job training, community development, transportation, international economic assistance--all of these are put seriously at risk by a decision to exempt military spending from any significant budget discipline. While Democratic Members are naturally interested in supporting the President at this critical time, significantly more than half of the Democratic Caucus recently agreed to a letter which we sent to the President last Friday voicing our strong objections to important aspects of the budget negotiations as they have been reported. To date, 111 of the Democratic Members of the House, along with our Independent colleague, have signed on to the letter in which we have told the President that ``we strongly believe that a budget compromise must begin seriously the process of moving funds from the Pentagon and related agencies to the civilian side if we are to balance the budget while avoiding devastating cuts over the next 5 years in important nonmilitary programs.'' The goal of reducing the deficit to zero by the year 2002 is very widely shared. The debate is not over whether or not to balance the budget, but whether to do so in a socially responsible way, which meets our obligation to deal with important social and economic problems to the extend that we can, or whether to do it in a way that will exacerbate these problems. Members of the House do not casually write to the President to voice strong objections to efforts to resolve our budget difficulty, and I believe that the fact that so many of us have felt compelled to do so at this time is a point that should be noted here. It is precisely because many of us hope to see a budget compromise reached that we can support that we are making clear what we believe to be the essential elements of such a compromise in this way. Mr. Speaker, I ask that the text of the letter and the list of signers as of noon on Monday be printed here. Congress of the United States, House of Representatives, Washington, DC, April 25, 1997. Hon. William J. Clinton, President, The White House, Washington, DC. Dear Mr. President: We wish to make clear our strong objections to any budget proposal which would maintain the current high level of military spending while reducing severely in real terms both discretionary spending on all non-military functions, and funding for Medicare and Medicaid. You have correctly noted the importance of adequate funding support for education, the environment and job training. We believe that there are other important priorities that must receive adequate funding support in the years ahead as well. Unfortunately, the action of the Republican majority in adding $17 billion to the Pentagon's budget over the past two years has already greatly exacerbated the difficulties we face in providing adequate funds for many of these programs, within the context of a balanced budget by the year 2002. And we are concerned that current proposals from the Republican leadership seek to make this bad situation even worse. Many of us have been active in past years in seeking significantly greater contributions from our wealthy European, Asian and Middle Eastern allies in contributing to common defense concerns. We have also opposed the development or procurement of extremely expensive weapons which had originally been designed for use in the context of the military competition with a heavily armed Soviet Union. And we believe that there has been an unwillingness on the part of the congressional majority to hold the military and intelligence agencies to the same level of scrutiny as is applied to domestic agencies when it comes to insisting on efficiency and accurate accounting. We therefore strongly urge you to resist efforts to continue to the pattern of a higher than necessary level of military spending at the expense of the non-military functions of the federal government, including those aspects of foreign policy which have also suffered from inadequate funding in past years. It is our responsibility to inform you that we strongly believe that a budget compromise must begin seriously the process of moving funds from the Pentagon and related agencies to the civilian side if we are to balance the budget while avoiding devastating cuts over the next five years in important non-military programs. We of course share your view that America must remain the strongest nation in the world, and be well able within a significant margin of safety to meet genuine national security needs. But we believe that the current military budget significantly exceeds what is required in this regard, while important health, public safety, environmental, educational and other functions of the federal government will suffer greatly if Republican priorities are followed. And of course the suffering in this case does not fall abstractly on ``programs'', but rather on the American people who are the intended beneficiaries of this programmatic activity. The following Members have signed onto the letter to the President. Gary Ackerman, Tom Barrett, Xavier Becerra, Howard Berman, Rod Blagojevich, Earl Blumenauer, David Bonior, George Brown, Sherrod Brown, Walter Capps, Julia Carson, Donna Christian-Green, William Clay, Eva Clayton, John Conyers, Elijah Cummings, Danny Davis, Jim Davis, Peter DeFazio, Diana DeGette, William Delahunt, Ronald Dellums, Peter Deutsch, Julian Dixon, Lloyd Doggett. Eliot Engel, Anna Eshoo, Lane Evans, Sam Farr, Chakah Fattah, Bob Filner, Floyd Flake, Thomas Foglietta, Harold Ford, Jr., Barney Frank, Elizabeth Furse, Gene Green, Luis Gutierrez, Maurice Hinchey, Darlene Hooley, Jesse Jackson, Jr., Sheila Jackson-Lee, Marcy Kaptur, Joseph P. Kennedy, II, Dale Kildee, Carolyn Kilpatrick, Ron Kind, Dennis Kucinich. John LaFalce, Nick Lampson, Tom Lantos, Sander Levin, John Lewis, William Lipinski, Zoe Lofgren, Nita Lowey, Bill Luther, Carolyn Maloney, Thomas Manton, Edward Markey, Matthew Martinez, Carolyn McCarthy, Karen McCarthy, Jim McDermott, James P. McGovern, Cynthia McKinney, Martin Meehan, Juanita Millender-McDonald. George Miller, David Minge, Patsy Mink, John Joseph Moakley, Jim Moran, Jerrold Nadler, Richard Neal, Eleanor Holmes Norton, James Oberstar, David Obey, John Olver, Major Owens, Frank Pallone, Bill Pascrell, Jr., Ed Pastor, Donald Payne, Nancy Pelosi, Charles Rangel, Lynn Rivers, Steven Rothman. Lucille Roybal-Allard, Bobby L. Rush, Loretta Sanchez, Bernard Sanders, Charles Schumer, Jose Serrano, David Skaggs, Louise Slaughter, Deborah Stabenow, Fortney ``Pete'' Stark, Louis Stokes, Ted Strickland, Bart Stupak, John Tierney, Esteban Torres, Edolphus Towns, Nydia Velazquez, Bruce Vento, Maxine Waters, Melvin Watt, Henry Waxman, Robert Wexler, Bob Wise, Lynn Woolsey, Albert Wynn, Sidney Yates.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Mr. Speaker, one thing that we do not do often enough is to go back to predictions that are made about legislation by both supporters and opponents and see whether these predictions have been born out. One somewhat controversial bill we passed recently was the General Aviation Revitalization Act of 1994, which altered liability law regarding aircraft. That legislation was strongly resisted by many who do not think we should not make any change in the product liability system in this country. I joined with the leading House proponent of the bill, the then Representative from Kansas who is now the Secretary of Agriculture. With his leadership role, despite opposition from some within the Judiciary Committee, we eventually passed the bill which became the General Aviation Revitalization Act, which the President signed into law in August 1994. I think it is reasonable to note that the consequences of that bill as of now have been entirely favorable. Thousands of new jobs have been created in the aircraft manufacturing industry, including a renewal of manufacturing of single engine aircraft. I am also not aware of any danger to aircraft safety that anyone can point to as a consequence of that act. While obviously we will continue to monitor the results of this, I think it is important to note that to date, 2\1/2\ years after its passage, the results of the enactment to this bill has been no decrease in safety, while we have seen a significant increase in economic activity of a productive sort. The General Aviation Revitalization Act of 1994 has to date vindicated the views of those of us who pressed for it and I think it is important to note that.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Mr. Speaker, I am about to engage in an exercise which is clearly second best. The Federal Reserve Open Market Committee a couple of weeks ago decided that we were creating too many jobs too rapidly in America and, fearing that this would be destabilizing, they raised interest rates. The Federal Reserve Open Market Committee will meet again in May and July, and there is a very real prospect that they may do this again. No single set of specific decisions taken, I believe, by anybody in the government so far this year or for the next few months, will have the impact on our economy that these decisions have had. Yet, they will be going largely undebated in this Congress because the Committee on Banking and Financial Services, which has under our rules jurisdiction over this matter, has refused to have a hearing. Specifically, the gentleman from Iowa [Mr. Leach], the chairman of the committee, has refused a request from all but one of the non- Republican members. Twenty-four of the Democrats and the one Independent have written to him and said, please, this is an essential issue, let us have a hearing. The chairman says to have a hearing, to have a hearing on whether or not they should continue to raise interest rates to choke off growth would be second-guessing the Fed and tampering with its independence. I wish we could have that hearing, and I hope that the chairman will reconsider, and maybe some of the majority Members will join us. But until that time, we have no other option but this. I say that because I am about to engage in a one-sided debate with Mr. Laurance Meyer, who is a member of the Board of Governors of the Federal Reserve. I would much prefer to have Mr. Meyer in before us in a hearing room so we can engage in a two-sided debate. The chairman of the Committee on Banking and Financial Services has denied us that opportunity. What I want to point out, however, is what now appears to me frankly the equivalent of a smoking gun in our understanding of why the Federal Reserve System decided consciously and deliberately to increase unemployment in America. Remember, that was their view. Unemployment, they said, at 5.2 percent was too low. They believed they needed to get it back up. I think 5.5 is their target. But here is what Mr. Meyer says; he acknowledges that there was no evidence yet of inflation. He acknowledges that there was no excess utilization, there was nothing that led him now to see inflation. He thinks that it may appear in 6 months to a year, and that is why he wanted to cut it off. But acknowledging that he may have acted unnecessarily, he gives this justification; and this I think is central to this debate, and it is why so many of us want a hearing. He says: This involved comparing the relative costs of two potential policy mistakes, tightening when such a move turned out to be inappropriate or failing to tighten when a tightening would have been appropriate. In other words, he says the better mistake to make, if you had to make a mistake, obviously you do not want to, but we all recognize uncertainty, better we should tighten when it is inappropriate. Why? And here is what bothers so many of us about this decision. We are not talking hard economics here. We are talking values. We are talking social policy, and it is not a decision the Federal Reserve ought to be allowed to make without full debate. He says: If the Fed tightens and it turns out to have been unnecessary, the result would be utilization rates turn out lower than desired and inflation lower than what otherwise would have been the case. In the context of the prevailing 7-year low of the unemployment rate, that translates into a higher, but still modest, unemployment rate, and further progress toward price stability, a central legislative mandate. He then says: This may not be the best solution. I would prefer trend growth and full employment. But then he says: But the alternative outcome just described is not a bad result. Indeed, it would be a preferred result for those who favor a more rapid convergence of price stability. Think about what Mr. Meyer has said. An increase in the unemployment rate is not a bad result, he says. It is not his preferred result, but it is not a bad result. That is hundreds of thousands or more unemployed Americans. That is a step that makes it much harder to absorb welfare recipients. When a Federal agency says that an increase in unemployment is not the preferred, but it is not a bad result, that is a serious problem. He then goes on to acknowledge that this would be a preferred result for those who favor a more rapid convergence to price stability. In other words, he is acknowledging that some of his fellow members of the Open Market Committee, unlike him, not only do not think this is a bad result, they think this is a good result. We have here an acknowledgment from one of the Federal Reserve Board governors in a speech that really was meant, I think, as the official explanation that he does not think an increase in unemployment is a bad result, and that he acknowledges that many of his colleagues in fact think this is the preferred result. They have decided that a little bit of inflation is too much and, if we can get to zero inflation with higher unemployment, that is not a bad result. Congress must debate this policy.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Mr. Speaker, earlier this month the Massachusetts State Senate passed a resolution urging us to reverse the cruel and unwise policy adopted last year in the welfare bill of cutting off basic income support to legal residents of this country who are unable to support themselves. I thought this was a grave error when it was proposed and worked hard against it. I regretted its passage and signature by the President. And since that time, our worst fears have come true. I've heard from people throughout my district about the terrible social harm that will result from this unjust policy. Russian Jews in the northern part of my district who came to the United States as refugees from Communist anti- Semitism; hard-working elderly Portuguese immigrants who came to this country and worked hard for some time before illness struck them; Indo- Chinese residents who came to the United States because they had been supportive of our efforts during the Vietnam war--these are examples of the decent, hard-working, wholly innocent people who are victims of last year's grave error. The Massachusetts Legislature is trying to address this, but it is an outrage for this Congress to impose on the States the financial responsibility that ought to rest at the Federal level. States have enough financial problems without being forced to serve as a backup for Federal callousness. Mr. Speaker, the Massachusetts Senate, composed of elected officials who live day to day with this problem and fully understand it, expresses the point very well and I congratulate Senator Linda Melconian for taking the lead on this issue and I ask that the resolution adopted by the Massachusetts Senate be printed here. Resolutions Urging the President of the United States and the United States Congress to Restore Federally Funded Benefits to Legal Immigrants Residing in the United States Whereas, in August of Nineteen Hundred and Ninety-six, the United States Congress enacted the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, so-called; and Whereas, Congress in said Act forbade use of Federal funds to provide benefits for financially needy immigrants lawfully residing in the United States; and Whereas, legal immigrants pay taxes and contribute in many ways to the productivity and vitality of our communities; and Whereas, the United States was founded and built by immigrants; and Whereas, because Congress has abdicated its financial responsibility, the financial burden of the action by Congress falls unfairly on the States and needy residents of the States; now therefore be it Resolved, That the Massachusetts Senate respectfully requests that the President and the Congress of the United States restore to the States the authority to provide Federally funded benefits to needy, lawful residents of the United States; and be it further Resolved, That the Massachusetts Senate respectfully requests that the United States Congress and the President restore to the Commonwealth adequate Federal funding to allow for the provision of benefits for financially needy immigrants lawfully residing in this Commonwealth; and be it further Resolved, That a copy of these resolutions be transmitted forthwith by the Clerk of the Senate to the President of the United States of America, the Presiding Officer of each branch of the United States Congress, and each member of the Massachusetts Congressional Delegation.