Marcy Kaptur

Ms. KAPTUR

Ms. KAPTUR. Last week, we had the swearing in of Members of Congress, and there was a performance in the afternoon by a group called the Power Rangers, which is a very popular toy where they have these animated shows that they take around the country and around the world. And most Americans do not realize that that particular toy, which sold over 300 million dollars' worth in our marketplace last year, there is not a single one made in this country. In fact, the Power Rangers is owned by Bandai Corp., which is a Tokyo-based company. They employ about 700 people in Tokyo only in marketing. They employ all of their workers in Asia, especially in China and Thailand, and they pay them nothing. They then take those low wage produced goods and they sell them over here from $29 all the way up, there are some $5.95 figurines. But if you go into your local toy store, which I did and I turned over every toy that was there, they were all produced in China, they were produced in Thailand. And somebody is making the money off of the out sourcing of production by these big multinationals, whether it is Bandai or Mattel, which is located in our country. And most young girls do not know that there is not a single Barbie doll made in America. Mattel has out sourced all of its production, and yet the children, these companies look upon our children not as children, but as a market, as a market. And they buy time on all these television shows and all of the rest. And none of our workers are working, yet parents and grandparents go to the store, they want to buy that for their child or their grandchild, and they pay top dollar, $29 all the way up to $200.

Ms. KAPTUR. I believe that our time has expired. I just wanted to thank the gentleman here, the gentleman from Vermont [Mr. Sanders], the gentleman from Pennsylvania [Mr. Klink], and the gentleman from Oregon [Mr. DeFazio], for their leadership in speaking for up for the people of the United States, the people of the continent, and the people of the world, not just those investors in large multinational corporations who have access to the media and to our own financial centers.

Ms. KAPTUR. When we are sending this letter, and I am glad you led me in to it here, the second question in our letter to the administration is to what specific banking and corporate interests does Mexico's first $26 billion in outstanding obligations that come due this year, in fact $10 billion of that comes due in the first quarter of this year, go? Specifically we want to know names of institutions and bond holders largely in this country that Mexico owes money to. It would be very interesting to see who they are.

Ms. KAPTUR. Today, Mr. Speaker, we are going to spend some time focusing on a very important issue that came before the Congress about a year ago called NAFTA, the North American Free Trade Agreement, or as some of us would like to say, the agreement that some would call ``no more taking American jobs away someplace else, especially south of our border.'' If you have been reading the newspapers, though it is sometimes buried on page 17 or 25, you will note that in Mexico there is a severe financial crisis currently going on in that nation. the purpose of today's colloquy will be to discuss with my good friend, the gentleman from Oregon [Mr. DeFazio] and others who will join us, what this means for the American worker and what it means for the American taxpayer, as well as the citizens of Mexico, because this week we are introducing legislation which the gentleman from Oregon [Mr. DeFazio] will talk about in just a second. For those of us who opposed NAFTA, it is difficult to get up here and say ``I told you so,'' but if the pain were not so great for thousands of people in our country and thousands of people in Mexico, we would not be so compelled as we are today. There is a new kind for foreign aid afoot in our land. It is called NAFTA. Because of the instability in Mexico, our taxpayers, with no vote occurring here in the Congress of the United States, our taxpayers are being asked to foot a multibillion dollar bail-out of the Mexican peso. We do not even get a seat at the table. Congress has no vote. The taxpayers in my district have no vote. The players who are at the table are giving the whole set of transactions a very fancy name. They are calling it debt swaps. They are calling them peso bail-outs. They are calling it teso bonos. The average person that lives on my street in Ohio doesn't know what all this is. Only people connected with Wall Street and the Federal Reserve are supposed to understand this. So today we are going to try to clear the air a bit, because what this deal is actually doing is asking our taxpayers to back up a minimum of $9 billion of loans to Mexico, and through the Federal Reserve an additional $5 billion plus, we don't know quite how much. But of course it is the deposits of our people in our banks, that then make payments into the Federal Reserve, that creates Federal Reserve, so we are all connected to that system. And then there are additional funds coming from some of the commercial banks in this country that are having a whole lot to worry about at the moment. Over this past year, if you think about it, our Federal Reserve has raised interest rates on the American people seven times. All of the press has been wondering why are they doing that, because wages aren't going up in America. There is no inflation. What is going on over at the Fed? In fact, some group of citizens demonstrated against a Fed a couple of weeks ago. We understand what the Fed is up to. When you have got to discount losses that you are going to be taking on loans that went bad through the commercial banking system to countries like Mexico, and when you have to monetize $150 billion of trade deficit, you have a problem on your hands. They are taking it out in higher interest rates on the American people. As my colleagues and I predicted, just 1 year after NAFTA, NAFTA has meant a worsening of America's trade position with Mexico. In fact, it has been cut in half. We were told, for example, in the auto industry that we would sell 60,000 more cars to Mexico, but if you look at this charter, this is the truth about what has been happening since NAFTA passed. Prior to NAFTA passing, this red arrow represents how many cars and trucks Mexico was sending to the United States. Over the years we have only been sending a trickle into Mexico, represented by this little arrow. But after NAFTA, which was supposed to make this arrow look better for our people and this arrow look worse, what do we have? We have more vehicles coming up from Mexico into the United States, and the trickle from the United States down to Mexico continues, largely automobiles going down to rental car agencies in Cancun and Yucatan and Mexico City where our people vacation. There has been no real growth of the middle class in Mexico. With what has been happening in Mexico, what have we seen? Their currency, called the peso, has been nearly cut in half. It has been devalued by nearly 40 percent since the end of December. What does this mean? That means that their goods will be cheaper on export, which means this number, whether it is cars or whether it is electrical wiring harnesses, whatever, it will be cheaper for them to send more into our marketplace and it will be much harder for the United States to send goods down there because our goods will become more expensive in their market.

Ms. KAPTUR. I appreciate the gentleman's courage in doing so as well, and I find your statistic on art very interesting. Because at the same time as we are losing jobs to Mexico, and our people's wages are not going up, art would be one of the major exports from the United States to Mexico. In 1991 there were only two billionaires in Mexico. Today there are over two dozen. At the same time as the average Mexican citizen has lost buying power, if they were lucky enough to have $100 in savings in a local institution there, it has just been cut to $60. but somebody down there, and I have a hunch who it is, has been purchasing very expensive items, and I would guess it is those families that traditionally have owned everything in that country and command the wealth and the real political power inside that nation One of the questions we are asking, in fact, we are sending a letter today to the U.S. Treasury Department in the Clinton administration asking them about this $18 billion bailout of Mexico. Some of the questions I would just like to read, because I think the American people should be thinking about these as well: The first one is that in view of the fact that our banks in this country are earning historic profits, and they have been for several months now, why is our Government's intervention in the form of this currency swap and special Government loans necessary? If the private sector gambles and loses in a country like Mexico, why should those losses not be borne by the private sector? Why do we allow these people who are buying art to get off scot-free and then run right up to the door of our treasury and ask the American taxpayers to back up loans to bail them out? Back years ago this happened again when the Brady bonds were created, if people have long memories back in the late 1980's. That debt that was accrued by Latin American nations in those days, what happened to it? Well, folks, it is still out there. It is now in the form of Brady bonds, and in 1990 Mexico had to convert $33 billion of its debt to Brady bonds, and guess that the interest rate is on those bonds? Forty percent. When Mexico pays or is supposed to be paying off all of these debts, who is earning the 40 percent? One of the questions we are asking the Treasury is we would like to know does anybody on my street have a right to buy those 40 percent bonds? interest earnings, extended with the backing of the U.S. Government, went to help defray our own deficit here in the United States? Would it not be refreshing if for once the American taxpayers did not just extend guarantees and send taxpayers' dollars but in effect they were getting a return? I know that is not the case. The 40 percent interest is going to private investors, the largest banks in the country who are now desperately knocking at the doors; actually they are inside. We are not allowed in, but they are inside saying we would like another $10 billion for Mexico. Please send it now because we are worried out our investments and our payments. They are not worried about the American taxpayers.

Ms. KAPTUR. I yield to the gentleman from Oregon.

Ms. KAPTUR. I want to compliment the gentleman for his leadership on this and for his introduction this week, along with several cosponsors including myself, of legislation to revoke NAFTA, until we can fix all the major missing pieces that are causing the continual job loss in our country and the tremendous instability in Mexico. In a few weeks, we here in the Congress are going to be asked to vote on a balanced budget amendment. What is going to be very interesting about this whole debate is an issue like this one, when our taxpayers can be held hostage through our own U.S. Treasury Department and the Federal Reserve. When the private sector gets in trouble they receive special treatment at the doors of the Federal Reserve and at the doors of the U.S. Treasury. None of that is voted on here. It happens through a private set of relationships, but ultimately they get our taxpayers on the hook. I have felt for a long time that if we are going to have requirements for certain types of budget balancing here in the Congress, we ought to put some additional restraints on the Federal Reserve and on our own U.S. Treasury Department which has all these sets of special relationships which in the end hold our taxpayers hostage and they cannot do anything about it. It is the same thing as the savings and loan crisis. It is amazing how that stealth bomber got through here. We hardly had any debate. It came through at 2 in the morning. When the private sector's big financial interests really want something done here, they can certainly achieve it without any amendments to the Constitution. It just happens through sleight of hand.

Ms. KAPTUR. Would it not be great if every American who owned a home mortgage could do the same thing? In other words, rather than paying their mortgage payment next month, all they have to do is call the Federal Reserve, sit around the table, and rather than paying the mortgage payment they give them a loan to pay it off. Great concept.

Ms. KAPTUR. That is right. And one of the issues here, the third question we are going to ask of those business entities incorporated in the United States to which Mexico is indebted, we would like to know which ones of these business entities hold voting rights at the district Federal Reserve offices and in which regions of the country. I would sure like to know how the Midwest compares to the Northeast and to the Northwest and to the South of this country. It would really be nice to know who has special favors at the Fed.

Ms. KAPTUR. Thank you very much, Congressman DeFazio. I think it is important for the audience to know this is a bipartisan effort. In fact, conservative Republicans, conservative Democrats and moderate Democrats, mainline Democrats are all supporting this particular effort. Today in the Washington Post on page A-13 there is a story that talks about what is happening in the Mexican stock market as a result of the rippling effects of this devaluation of the peso, and one of the Mexican bankers said, ``This is really a meltdown of catastrophic proportions. So we have the United States offering us loans. Eventually you get yourself another $20 billion in debt, and how are you going to pay for it?'' And that is really the reason we are very concerned and why we have asked for NAFTA to be revoked because we would like to know, and we have asked this question in letters we are sending to the Treasury, if Mexico defaults, as nations have had trouble paying their debts in the past, is it the intention of our Treasury Department to enlarge the assistance? And what about the Federal Reserve? We are very concerned that the commercial banks that are involved in these lines of credit, that in the peso bailout their lines of credit are uncollateralized. That is how we got into trouble back during the last Latin American debt bailout, they were uncollateralized loans. Why are our commercial banks, from what we have read in the paper, since the Fed will not talk to us directly on this, why are they being allowed to have uncollateralized loans? I know the gentleman from Vermont, who has been such a leader on this, is on the floor, and it is a pleasure to welcome him on our side.

Ms. KAPTUR. I appreciate the gentleman joining us today, and your leadership on this throughout our country has just been tremendous, I say to the gentleman from Vermont [Mr. Sanders], and your people are very lucky to have you as their Representative, for sure. I am sure you are as distraught as I am that people like ourselves receive phone calls from the administration, whether it is this administration or the prior administration, anytime we try to question when the big interests are able to get special access at the U.S. Treasury Department or at the Federal Reserve, it is amazing to me how quickly the administration responds. So, for example, if it Mattel Corp. or the Big Three or some of the big investment houses stand to lose anything, right away they get invited over to the Fed. They get welcomed. In fact, we were called by the Treasury Department very concerned about our saying anything about this whole question of the peso bailout here in Congress today. Yet when we tried to call them over a year ago and tried to get them interested and get the administration interested in workers across this country who would lose their jobs, they would not even come over and meet with us. We wanted to put provisions in NAFTA to pay the kind of attention that is being paid to the investment community to the workers of our country, and we were given short shrift. In fact, we were not even welcomed into 1600 Pennsylvania Avenue, those of us concerned about what is happening to workers across this country. Yet we know there has been one factory a day closed in this country as a result of NAFTA. We have a list in our office of thousands and thousands of U.S. workers losing their jobs, 50 jobs here, and in Horsham, PA, 40-some workers who used to make bridal and bridesmaids gowns, at Alfred Angelo Co., in Bennington, VT, your home State.

Ms. KAPTUR. The gentleman from Pennsylvania [Mr. Klink] has joined us here today, such a strong voice for industrial and manufacturing America. We are thrilled to have you as a cosponsor and welcome you here this afternoon. I yield to the gentleman from Pennsylvania.

Ms. KAPTUR. Just for a second, it interested me at what point the Government of Mexico decided to devalue the peso. You know, they have their Presidential elections in August, so everything was quiet up until August. Then we had a GATT vote here, and that was right after elections. We delayed it. Nothing was said. Nobody wanted to upset the applecart. Then we had the vote on GATT here late in November, and, boom, right after that, when everything was set and secure, then the decision was made to devalue the peso, and our Government knew for a long time this was coming, the officials over at Treasury and the Fed. So it was all orchestrated at the highest levels, no debate down here, no discussion, and now, as you say, our people have to foot the bill.

Ms. KAPTUR. It is a $9 billion figure. They had a few millions of dollars to accommodate American workers. Here now we have a $9 billion bailout that we are not even aware of. I am sure it is more than that when you count the $5 billion that the Federal Reserve is putting into that. It is amazing how quickly, how quickly our Government jumps to the tune of those who have a lot of money, investors and bankers, but when it comes to workers who need attention, he and she got no attention in the body of the agreement.

Ms. KAPTUR. I yield to the gentleman from Vermont.

Ms. KAPTUR. Would it not be interesting to have a meeting, and I would challenge our U.S. Treasury Department and the Federal reserve. If you have ever been over to the Federal Reserve, they have the largest board room meeting table you have ever seen in your life. I do not know where they of the table we would have all the claimants who want our taxpayers' money, right? Would that not be great? And then on the other side we would have the representatives of every single company that has shut down in this country, and the workers that worked in those plants on the other side of the table; would that not be a great meeting over there? They would have more fun. We would finally get the American people inside that board room and take them up to the Treasury Department, with the big room that they have over there with all the chandeliers. Would it not be an interesting meeting of all the bankers, Wall Street investors, the multinationals, the big banks who want loans and money from our taxpayers, putting our taxpayers at risk, and then the very people they put out of work in the same room? I think it would be one of the most exciting meetings in Washington.

Ms. KAPTUR. I want to say something on that to the gentleman. As my colleague knows, this talk about job training for American workers? I support all kinds of skilling up of the American work force and our kids in school, and vocational programs, and after-school programs, and college programs. But the point is, if we have got companies taking those jobs someplace else, why care how much training we give people? When they are finished with their education, there is not going to be a good-wage job with benefits there for them, and I yield to the gentleman.

Ms. KAPTUR. The gentleman raises such an important point because those interests in our country, those monied interests, only want us to focus on one part of the equation, this part, the products going from America to Mexico which are----

Ms. KAPTUR. If the gentleman will yield, I think that is why the Federal Reserve has been hiking interest rates in this country and taking it out of the hides of our people, not because inflation is a major issue in this country, not because our people's wages are going up, because in fact they are not except for those at the very, very top. But I think that is why the Fed is raising interest rates, because they are having to monetize the traded goods sector, and we have held these huge deficits with the rest of the world. I think with China it will be over $40 billion more of Chinese goods coming into this country than United States goods going over there this year. With Japan it will be a similar number. For the last 15 years we have not had any kind of trade balance with Japan. I do not think we have ever had one in fact. Now with Mexico the advantage we had is just disappearing overnight. So I think that is why interest rates are really going up in this country.

Ms. KAPTUR. If the gentleman will yield, I read that Nike, it costs them $8 to make a pair of sneakers in China. They have some white collar workers up there in Oregon that are marketing people, just like the Bandai Corp., in Tokyo with Power Rangers. It costs them $8 because they pay their workers 10 cents an hour in places that you and see it. They ship the shoes over here, and we are charged $66.99 all the way up to $150, but they pay Charles Barkley $20 million to make us all feel good through advertising when we buy those shoes. And there are very few shoe manufacturing companies, most of those were located in Congressman Sanders' region of the country, very few shoe manufacturing companies left in this country. So our people are really being put over a barrel. And you are right, prices do not go down, but corporate profits go up. Prices go up and our wages are coming down. And there are some pretty significant reasons for it.

Ms. KAPTUR

Ms. KAPTUR. Mr. Speaker, it is my pleasure to rise today in honor of the 175th anniversary of the First Presbyterian Church located in Ohio's 9th district. Beginning on January 9, 1820, with the settlement of 11 pioneers as charter members, the contributions of the First Presbyterian Church have stretched through a rich and diverse history. Built on a site that was once used to house a British battery, the founders of Maumee, Ohio's First Presbyterian Church began a mission to provide spiritual guidance and sustenance that continues today. Like all churches, First Presbyterian's greatest asset and resource is her congregation. Even as Maumee's prosperity began to shift to the neighboring city of Toledo and membership was declining rapidly, the church members continued their mission. In 1870, when it became impossible to meet the pastor's salary of $900 and he was subsequently transferred to a larger parish, First Presbyterian's congregation pulled together and raised the resources necessary to maintain and continue the church's ministry. As everyone in this historic Chamber knows, America's greatest strength is her communities and their willingness to contribute in times of national need and emergency. In keeping with this tradition and beginning with the Civil War, and continuing with World War I, World War II, the Korean conflict and Vietnam, the church made innumerable and immeasurable contributions from her congregation and her ministry. Now, this proud history and tradition has become the wellspring of the church's continuing efforts to respond to today's challenges with a new era of service and devotion. As the congregation of the First Presbyterian Church of Maumee begins to respond to new challenges and create tomorrow's history, let us remember the contributions of its first 175 years--and congratulate them on their willingness to serve their community, their country, and their fellow man.