Frank Murkowski

Mr. MURKOWSKI

Mr. MURKOWSKI. Then, theoretically, at least, the poor Mexican taxpayer is expected to come forward, regenerate the Mexican economy, and pay back the IMF, the United States--$20 billion, the $10 billion from the Bank of International Settlements--so the Mexican taxpayer has the obligation in the end, but his country at that time is in terrible shape. What we have done is--Mexico issued these bonds. They could not pay them. When they become due, Uncle Sam comes along and puts together a deal under the charade that we have to save Mexico from collapse. But what we are doing is: We are paying the holders, most of which are Americans who have seen fit to take a handsome return--the brokerage firms and various others--while we are paying foreign investors with U.S. taxpayer dollars. And then we look to the Mexican taxpayer and the Mexican economy to come back and pay these obligations. I wonder if the Senator from New York really believes, as the administration tells us, that our so-called loans are safe because we will have access to Mexican oil, if there is a default? Does the Senator believe for one moment that we have access to Mexico's oil or that we are going to have? (Mr. SHELBY assumed the chair.)

Mr. MURKOWSKI. And who would benefit from that.

Mr. MURKOWSKI. The Senator's bill would say, ``No more.''

Mr. MURKOWSKI. So to walk through this very briefly, so we all understand the transfer of the obligation here, it has been transferred to the American taxpayer and the Mexican taxpayer by this action. The holders of the tesobonos are being taken care of by this action by the United States Treasury, the guarantee, the $5 billion that has already been extended. You would stop that with this action?

Mr. MURKOWSKI. The obligation falls to the Mexican Government, really, to pay back the $52 billion. But we are being told that we have to do this to stabilize the Mexican Government, to prevent an economic collapse. But really the beneficiaries are the holders of the debt and not the Mexican people.

Mr. MURKOWSKI. No.

Mr. MURKOWSKI. Any foreign investor. But it makes, really, no difference to Mexico, does it?

Mr. MURKOWSKI. Would the Senator yield. I would just like to explore a theory. I think the Senator from New York will recall at a meeting that was held in the leader's office in January, the Secretary of the President of Mexico was there, and at that time we were under the illusion that the current debt was somewhere in the area of $40-some-odd billion. I believe the Secretary indicated that the current debt, that is the debt that is due within the current year, was somewhere in the area of 70-- it was substantially more than we were led to believe by the Department of the Treasury. Let us assume for a moment that most of this debt was held by American investors who held these tesobonos; the debt is due, and the Mexican Government cannot meet the debt. What happens to the investment that went into Mexico? Mexico issued these bearer bonds and they got dollars. They did things with those dollars, things that we would assume would increase the economic vitality in Mexico. In any event, the Mexican Government could not meet the obligations. Is Mexico going to be any worse or better off if the American taxpayer reimburses Americans who hold that debt? Americans are going to be better off.

Mr. MURKOWSKI. I wonder if the Senator from New York would yield for a minute for an examination of how risk works? Many of the bearer bonds were sold with the promise they would return 20 percent interest or thereabouts. Very much, much higher than we can get in the United States on bonds. Of course, the investor has to look at that 20 percent and say, ``Why are they willing to pay so much more than the going rate that is prevailing in the United States?'' Unlike what the investor would get if he or she went to his bank, their deposit would be basically guaranteed by the Federal Government-- $100,000 through the insurance that the Federal Government mandates that banks must carry. So, clearly, we have a case here where there was a consideration of a handsome return, 20 percent, by the issuance of these bonds. These investors had to make a decision whether to invest their money and run the risk associated with having to offer 20 percent to get the investment, or not invest at all. They had to be fairly sophisticated, because a person looking for an investment for his or her old age would be foolish to invest and try and generate 20 percent return because he or she would know that is very, very risky. If investors knew the Federal Government would bail them out, why, then, they are home free. Now, how in the world could we have made this transition? What were high-return, high-risk, investments have now been converted into an obligation of the U.S. Government. Now, as the Senator from New York knows, as the Senator from Alaska knows, if we can get the guarantee or if we can get the kind of bailout that this has developed, why, a person will take it. In the meantime, the American taxpayer is taking it in the pants.

Mr. MURKOWSKI

Mr. MURKOWSKI. I thank the Chair.

Mr. MURKOWSKI. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with.

Mr. MURKOWSKI. If there is no objection, I would like to send a second-degree amendment in behalf of myself, Senator D'Amato, to amend amendment No. 427 and ask it be taken up at the appropriate time.

Mr. MURKOWSKI. Mr. President, may I make an inquiry? What is the pending business? Are we on D'Amato?

Mr. MURKOWSKI. Senator D'Amato is joining me.

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President. At the request of the administration, I am today introducing legislation ``to authorize appropriations for United States insular areas, and for other purposes''. The legislation was transmitted by the Assistant Secretary of the Interior for Territorial and International Affairs to implement the funding recommendations contained in the President's proposed budget for fiscal year 1996. The legislation, if enacted, would replace the current annual guaranteed funding for the Commonwealth of the Northern Mariana Islands with a new program. The new program would complete the infrastructure funding contemplated under the agreement negotiated by the administration with the Commonwealth and redirect the balance of the funds to other territorial needs. For the current fiscal year, Congress redirected a portion of the Commonwealth funding to support of efforts by the Departments of Justice, Labor, and the Treasury to work with the Commonwealth government to address a variety of concerns that have arisen in the Commonwealth. A report on that effort is due from the Department of the Interior shortly, and we will want to consider the findings and recommendations in that report to determine whether some of these funds might be better spent in support of those activities. I am also concerned with that provision of the proposed legislation that would provide operational grants to Guam and the Commonwealth for compact impact assistance. I do not have any particular objections to providing that assistance if it is justified, if the budget limitations allow funding, and if that assistance is a higher priority than other needs. My concern is providing that assistance through an entitlement rather than through discretionary appropriations. The central objective of the current 7 year agreement with the Commonwealth is to eliminate operational assistance and focus on necessary infrastructure needs. Replacing one type of operational assistance with another seems to me to be a step back.

Mr. MURKOWSKI

Mr. MURKOWSKI. It is in the amendment as offered by the Senator from Michigan and myself, specifically stating that ``conditions on an item of appropriation not involving a positive allocation of funds by explicitly prohibiting the use of any funds.'' That is the amendment.

Mr. MURKOWSKI. I wonder if the Senator from Arizona will allow me to answer that question as a cosponsor of this amendment. I have a specific example that will hopefully enlighten and address that question. On a defense appropriations bill, say we have a provision that provides funding for the Department of Defense for military personnel, $75 billion, provided that none of the funds appropriated will be available to deploy United States Armed Forces to participate in the implementation of a peace settlement in Bosnia unless previously authorized by Congress. Under the Dole substitute, the President basically gets two bills. The first would be a bill to appropriate $75 billion for military personnel. The second would bar United States troops in Bosnia peacekeeping. The President can sign bill 1 and veto bill 2. He, thus, will be able to receive the $75 billion without restriction and can send troops to Bosnia without congressional approval. Under the amendment of the Senator from Michigan and myself, the President gets one bill. Since the restriction in the appropriations bill completely bars the use of any funds in Bosnia peacekeeping, the President gets only one bill which contains the appropriation of $75 billion and the Bosnia restriction. So that is the intent and an example specifically. The President must either sign the bill and accept the Bosnia restriction, or he must veto the bill and not have the $75 billion available.

Mr. MURKOWSKI. If I may respond, my example given on the Department of Defense of $75 billion provided that none of the funds appropriated be available to deploy Armed Forces to participate in implementation. None of the funds.

Mr. MURKOWSKI. If I may respond, it is the implied purpose that no money can be spent. It says ``not involving a positive allocation of funds and explicitly prohibiting the use of any funds.'' Does that answer the question?

Mr. MURKOWSKI. Madam President, I have worked with the distinguished senior Senator from Michigan, Senator Levin, in developing some examples of the implications of amendment No. 406. I think these examples provide our colleagues with a clearer picture of the limitations that will be imposed on enrolling line items.

Mr. MURKOWSKI

Mr. MURKOWSKI. Madam President, I am pleased to join Senator Levin in offering this amendment that would clarify the extent and scope of the President's ability to veto items in appropriations bills. This amendments ensures that when Congress imposes a condition that prevents spending in a particular area, or imposes conditions on such spending, such a restriction will not be considered an item that can be separately vetoed. All of us recognize that approval of the Dole substitute line-item veto amendment or any other line-item veto proposal including S. 4, represents an historic shift of authority from Congress to the President. We are providing the President with very broad authority to pick and choose which individual items in appropriations bills he deems an improper use of taxpayer funds. He will have the authority to veto those items of spending that he disapproves of. The substitute also gives the President authority to item veto authority in spending authorization bills and in tax bills. However, the only tax items that the President can item veto are a narrow range of provisions that affect only a limited group of taxpayers. More importantly, the tax-item veto can only be used if the provision loses revenue. A tax increase that targets a narrow class of taxpayers cannot be item vetoed. I believe the tax item veto represents an appropriate restrictions on the President's ability to item veto because it is restricted to measures that lose revenue. The reason that I support the whole concept of the item-veto is that Congress has demonstrated an inability to control spending both through the Tax Code and the appropriations process. Today we are more than $4.8 trillion in debt. Unless we take drastic action, our national debt will double in the next 10 years. Part of the reason our debt is nearly $5 trillion is because appropriators in both the House and Senate have devised ingenious ways to bury wasteful pork barrel spending in legislation designed to maintain the operations of Government. Weeks and months after the President has signed an appropriations bill we learn that buried in the bill are tens of millions of dollars of wasteful spending programs. My colleague from Arizona has already identified many of these wasteful spending programs. And under the current Presidential veto power, the President must approve these wasteful programs if he is to keep the Government running. So the predicate, Madam President, for the line-item veto is to give the President the authority to veto spending programs that waste the taxpayers' money. However, just as the President only should be able to veto tax provisions be permitted to item-veto congressional prohibitions on appropriations spending. As all Senators know, Congress routinely includes prohibitions on particular spending as a check on unrestricted and arbitrary spending by the President. Most often, such prohibitions represent a conscious policy choice by Congress explicitly restricting the President's discretion. For example, last year's foreign operations appropriations bill contains more than a dozen such restrictions. These restrictions prevent the President from providing money to an international organization that supports programs for ``coercive abortion or involuntary sterilization.'' Another provision prevents funds from being used for assistance to a country that is not in compliance with the U.N. Security Council sanctions against Iraq. These are just two of hundreds of examples of the legitimate power of the Congress to prevent the President from spending money on programs and policies that the Congress disapproves of. These restrictions do not increase the deficit. They do not represent pork barrel politics. They are legitimate congressional checks on the President that are consistent with the intent of the Founding Fathers when they created our constitutional system of separated powers and checks and balances. Madam President, our amendment is intended to make clear that when Congress imposes a condition that prevents spending in a particular area, or conditions spending, that restriction will not be considered an item that can be separately vetoed. It ensures that a condition restricting or prohibiting the use of funds must be enrolled with the item of appropriation to which the condition applies. Madam President, this amendment preserves congressional power to restrict the President from acting contrary to the wishes of the majority of Congress on important policy issues. I believe it is fundamentally necessary that we retain this authority and I hope my colleagues will vote for this amendment.

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, I would like to announce for the information of the Senate and the public that an oversight hearing has been scheduled before the full Committee on Energy and Natural Resources to consider the nomination of Daniel R. Glickman to be Secretary of Agriculture. The hearing will take place Tuesday, March 28, 1995, at 9:30 a.m. in room SD-366 of the Dirksen Senate Office Building in Washington, DC. Those who wish to submit written statements should write to the Committee on Energy and Natural Resources, U.S. Senate, Washington DC. 20510. For further information, please call Mark Rey at (202) 224-2878 or Camille Heninger at (202) 224-5070. subcommittee on oversight of government management and the district of columbia

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, I would like to announce for the public that a hearing has been scheduled before the full Committee on Energy and Natural Resources. The hearing will take place Thursday, March 23, 1995, at 9:30 a.m. in room SD-366 of the Dirksen Senate Office Building in Washington, DC. The purpose of this hearing is to consider S. 575, a bill to provide Outer Continental Shelf [OCS] impact assistance to State and local governments, and S. 158, a bill to encourage production of domestic oil and gas resources in deep water on the OCS. Those wishing to testify or who wish to submit written statements should write to the Committee on Energy and Natural Resources, U.S. Senate, Washington, DC 20510. For further information, please call Mike Poling at (202) 224-8276 or Jo Meuse, (202) 224-6730.

Mr. MURKOWSKI

Mr. MURKOWSKI. I welcome the chairman's comment on this point.

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, I rise today to co-sponsor legislation to provide Outer Continental Shelf [OCS] impact assistance to State and local governments. I am pleased to be joining my colleague from Alaska, Senator Stevens, the ranking minority member of the Energy and Natural Resources Committee, Senator Johnston, and Senator Breaux in the introduction of this important legislation. Mr. President, there are two important aspects of the legislation we offer today. First, it is intended to stimulate oil and gas exploration and production on the Outer Continental Shelf, create jobs, protect our national energy security, and reduce our trade deficit. Second, it is intended to provide funds from revenues generated by oil and gas production on the OCS to States and eligible counties who shoulder the responsibility for energy development activity off their coastlines. A recent report by the Commerce Department suggests that our national security is at risk because we now import more than 50 percent of our domestic petroleum requirements. The Clinton administration's response to that report seems to be to not respond. I am aware of no specific proposals offered by the Clinton Administration to increase domestic production and reduce foreign imports of crude oil. As chairman of the Committee on Energy and Natural Resources and a member of the Finance Committee, I intend to hold hearings on this legislation and other measures to stimulate oil and gas production, create jobs in the energy and support industries, and generate badly needed revenues. Over the last 10 years there have been 500,000 jobs lost in the oil and gas industry, and billions of dollars in investment capital are fleeing the country because domestic energy companies are not being given access to public lands to drill for new oil and gas reserves, are being frustrated by government rules and regulations, and are being hounded by activists who do not want the public lands utilized for natural resource development. I don't think that is right, and I intend to do something about it. The bill we are introducing today is a small step, but a step in the right direction. Over the coming months I will hold hearings and introduce legislation to provide additional stimulus to our energy industry and our economy. On the matter of impact assistance, Mr. President, our bill recognizes that there are burdens associated with offshore oil and gas activities--from environmental planning and analysis, to public safety and health considerations, to new infrastructure requirements. This legislation would, for the first time, share the benefits of economic revenues generated by OCS oil and gas activities with those governmental entities who assume those burdens. Under this legislation, Mr. President, counties, parishes and boroughs--the local governmental entities most directly affected--and State governments will share in revenues derived from OCS oil and gas production. A total of 27 percent of all new revenues resulting from production royalties from leases lying seaward of the so-called 8(g) zone, the area 3 to 6 miles offshore and extending out to 200 miles, would be shared on a 50-50 basis by States and counties. In other words, States would get half of the 27 percent share and the coastal counties would get the other half. The impact assistance provided under this legislation would be distributed to counties located no more than 60 miles from a State's coastline, based on a fraction that is inversely proportional to the distance between the nearest point on the eligible county's coastline and the geographic center of a leased tract. The legislation provides a formula for sharing with affected States as well. Recognizing that local governmental entities differ from State to State, the legislation defines county as including parishes, villages, and, in Alaska, borough governments. Impact assistance payments must be used for mitigation of effects relating to OCS-related activities, such as air and water quality, fish and wildlife, wetlands, or other coastal resources. In addition, such funds could be used for public safety and health activities, zoning, infrastructure construction, or other similar measures. To ensure that impact assistance monies are properly used, the bill requires counties to submit a description of the purposes for which such funds will be disbursed, and governors to submit an annual report accounting for the use of impact monies during the prior year. To ensure that the funds are used for the purposes intended by this legislation, coastal counties are required to submit a list of proposed projects for approval of the Governor of the State in which the county is located. Counties must certify each year the amount of funds spent on particular projects or activities and the status of each. The bill also requires the Governor of each State receiving funds to account for monies received each year in a report to Congress. Finally, Mr. President, the legislation allows for refunds where, because of litigation, an arbitration award, or administrative review, there has been an overpayment. In such cases, the responsible State and county governments would be required to refund monies overpaid in direct proportion to the amount that they shared such funds. Mr. President, this legislation is long overdue. It has been passed twice on previous occasions only to be opposed by the Executive Branch. This legislation is needed to ensure that State and local governments have the funds necessary to address onshore activities and effects relating to production occurring off their shorelines, activities which generate jobs and taxes, as well as the very funds from which OCS impact assistance will be paid. Historically, oil and gas leasing on the Outer Continental Shelf has generated more than $100 billion in Federal revenues. The OCS accounts for 23 percent of our Nation's natural gas and 14 percent of the country's oil production. We need to assure that the OCS continues to play an important role in contributing to our domestic energy needs, and to take steps to facilitate exploration and production activities the program among those who share the burdens. I urge my colleagues to move swiftly in enacting this legislation.