Ron Paul

Mr. PAUL

Mr. PAUL. Mr. Chairman will the gentleman yield?

Mr. PAUL. Mr. Chairman, I thank the gentleman for yielding. I am pleased that the amendment will be approved because I am a cosponsor of this amendment. I compliment the gentleman for bringing this to the floor.

Mr. PAUL

Mr. PAUL. Mr. Speaker, I rise to introduce the Air Piracy Reprisal and Capture Act of 2001 and the September 11 Marque and Reprisal Act of 2001. The Air Piracy Reprisal and Capture Act of 2001 updates the federal definition of ``piracy'' to include acts committed in the skies. The September 11 Marque and Reprisal Act of 2001 provides Congressional authorization for the President to issue letters of marque and reprisal to appropriate parties to seize the person and property of Osama bin Laden and any other individual responsible for the terrorist attacks of September 11. Authority to grant letters of marque and reprisal are provided for in the Constitution as a means of allowing Congress to deal with aggressive actions where a formal declaration of war against a foreign power is problematic, Originally intended to deal with piracy, letters of marque and reprisal represent an appropriate response to the piracy of the twentieth century: hijacking terrorism. All of America stood horrified at the brutal attacks of September 11 and all of us stand united in our determination to exact just retribution on the perpetrators of this evil deed. This is why I supported giving the President broad authority to use military power to respond to these attacks. When Congress authorized the use of force to respond to the attacks of September 11 we recognized these attacks were not merely criminal acts but an ``unusual and extraordinary threat to the national security.'' Congress must use every means available to fight the terrorists behind this attack if we are to fulfil our constitutional obligations to provide for the common defense of our sovereign nation. Issuance of letters of marque and reprisal are a valuable tool in the struggle to exact just retribution on the perpetrators of the attacks on the World Trade Center and the Pentagon. In fact, they may be among the most effective response available to Congress. Since the bombing there has been much discussion of how to respond to warlike acts carried out by private parties. The drafters of the Constitution also had to wrestle with the problem of how to respond to sporadic attacks on American soil and citizens organized by groups not formally affiliated with a government. In order to deal with this situation, the Constitution authorized Congress to issue letters of marque and reprisal. In the early days of the Republic, marque and reprisal were usually used against pirates who, while they may have enjoyed the protection and partnership of governments, where not official representatives of a government. Although modern America does not face the threat of piracy on the high seas, we do face the threat of international terrorism, Terrorism has much in common with the piracy of days gone by. Like the pirates of old, today's terrorists are private groups operating to assault the United States government as well as threaten the lives, liberty and property of United States citizens. The only difference is that while pirates sought financial gains, terrorists seek to advance ideological and political agendas through terroristic violence. Like the pirates who once terrorized the high seas, terrorists today are also difficult to punish using military means. While bombs and missiles may be sufficient to knock out the military capability and the economic and technological infrastructure of an enemy nation that harbors those who committed the September 11 attacks, traditional military force may not be suitable to destroy the lawless terrorists who are operating in the nations targeted for military force. Instead, those terrorists may simply move to another base before our troops can locate them. It is for these reasons that I believe that, were the drafters of the Constitution with us today, they would counsel in favor of issuing letters of marque and reprisal against the terrorists responsible for this outrageous act. Specifically, my legislation authorizes the President to issue letters of marque and reprisal to all appropriate parties to capture Osama bin Laden and other members of al Qaeda or any other persons involved in the September 11 terrorist attacks. The President is also authorized to use part of the $40 billion appropriated by this Congress to respond to the attack, to establish a bounty for the capture of Osama bin Laden. My legislation singles out Osama bin Laden and al Qaeda because the information available to Congress and the American people indicates bin Laden and his organization were responsible for this action. By vesting authority in the President to issue the letters, my legislation ensures that letters of marque and reprisal can be coordinated with the administration's overall strategy to bring the perpetrators of this outrageous act to justice. Letters of marque and reprisal resolve one of the most vexing problems facing the country: how do we obtain retribution against the perpetrators of the attacks without inflicting massive damage on the Middle East which could drive moderate Arabs into an allegiance with bin Laden and other terrorists. This is because using letters of marque and reprisal shows the people of the region that we are serious when we say our quarrel is not with them but with Osama bin Laden and all others who would dare commit terrorist acts against the United States. Mr, Speaker, I ask that my colleagues join with me in providing the additional ``necessary weapon of war'' and to help defend our fellow citizens, our sovereign nation, and our liberty by cosponsoring the September 11 Marque and Reprisal Act of 2001 and the Air Piracy Reprisal and Capture Act of 2001.

Mr. PAUL

Mr. PAUL. Mr. Speaker, I rise to introduce the Securing American Families Effectively (SAFE) Act. The SAFE Act makes common-sense changes to federal law that will enhance the government's ability to prevent terrorist incidents. Unlike other proposals, my legislation in no way threatens the constitutional liberties of the American people. In fact, the only people threatened under the SAFE Act are terrorists. The SAFE Act repeals regulations preventing agencies who deal with terrorism from sharing information among themselves. Currently, there are limits on sharing data with policy makers and there is a nearly unanimous agreement on lifting these restrictions. Removing the restrictions on data sharing is a good step which provides more--not less--openness and governmnent transparency. Hard as it may be to believe, there are actually existing directives in the law enforcement and intelligence communities which grant suspects ``extra-legal'' rights. These ``special'' rights could, and should, be clarified without changing existing law. This is why the SAFE Act adopts several of the administration's proposals to change the procedures regarding prosecutions of terrorism, such as eliminating the statute of limitations for terrorist offenses. Perhaps the most significant change made to procedures is codifying that probable cause is the maximum standard for an investigation of terrorism. According to information received by my office some federal agencies actually have to meet a higher standard than the constitutional standard of probable cause in order to launch an investigation of suspected terrorists. It is absurd to make the FBI meet a higher standard to initiate an investigation of a terrorist than to initiate an investigation of an insider trader! Finally, the SAFE Act drastically reduces immigration from countries on the State Department's terrorist list and countries which refuse to provide assistance in the battle against terrorists. Whatever one's feelings on other questions connected with immigration, I would hope we all could agree that the United States has an obligation to keep those who may be threats to the security of United States citizens outside the country. This is especially true considering that the programs I proposed limiting allow immigrants to take advance of taxpayer-funded educational programs and provide other special privileges for immigrants from terrorist countries. It is the height of absurdity to allow immigrants from countries involved in terrorist activities against American citizens special preferences denied to immigrants from America's closest allies. I would also hope that we could all agree that this is far preferable to systems of nationwide ``surveillance,'' which could threaten the liberty of all immigrants and eventually all citizens. This is an instance where the interests of liberty and security coincide entirely. In conclusion, Mr. Speaker, I ask my colleagues to join me in taking these common-sense steps to protecting the liberty and the security of the American people from terrorists by cosponsoring the Securing American Families Effectively (SAFE) Act.

Mr. PAUL

Mr. PAUL. Mr. Speaker, the CIA has a budget of over $30 billion. The FBI has a budget of over $3 billion. In addition, $10 to $12 billion are specifically designated to fighting terrorism. Yet, with all this money and power, we were not warned of the events that befell us on September 11. Since the tragic attacks, our officials have located and arrested hundreds of suspects, frozen millions of dollars of assets and gotten authority to launch a military attack against the ring leaders in Afghanistan. It seems the war against terrorists or guerillas, if one really believes we are in an actual war, has so far been carried out satisfactorily and under current law. But the question is do we really need a war against the civil liberties of the American people? We should never casually sacrifice any of our freedoms for the sake of a perceived security. Most security, especially in a free society, is best carried out by individuals protecting their own property and their own lives. The founders certainly understood this and is the main reason we have the second amendment. We cannot have a policeman stationed in each of our homes to prevent burglaries, but owners with property with possession of a gun can easily do it. A new giant agency for homeland security cannot provide security, but it can severely undermine our liberties. This approach may well, in the long run, make many Americans feel less secure. The principle of private property ownership did not work to prevent the tragedies of September 11, and there is a reason for that. The cries have gone out that due to the failure of the airlines to protect us, we must nationalize every aspect of aviation security. This reflects a serious error in judgment and will lead us further away from the principle of private property ownership and toward increasing government dependency and control with further sacrifice of our freedoms. More dollars and more Federal control over the airline industries are not likely to give us the security we all seek. All industrial plants in the United States enjoy reasonably good security. They are protected not by the local police but by owners putting up barbed wire fences, hiring guards with guns, and requiring identification cards to enter. All this, without any violation of anyone's civil liberties. And in a free society private owners have a right, if not an obligation, to profile if it enhances security. This technique of providing security through private property ownership is about to be rejected in its entirety for the airline industry. The problem was that the principle of private property was already undermined for the airlines by partial federalization of security by FAA regulations. Airports are owned by various government entities. The system that failed us prior to 9-11 not only was strictly controlled by government regulations, it specifically denied the right of owners to defend their property with a gun. At one time, guns were permitted on airlines to protect the U.S. mail. But for more than 40 years, airlines have not been allowed to protect human life with firearms. Some argue that pilots have enough to worry about flying the airplane and have no time to be concerned about a gun. How come drivers of armored vehicles can handle both? Why do we permit more protection for money being hauled around the country in a truck than we do for passengers on an airline? If government management of airline security has already failed us, why should we expect expanding the role of government in this area to be successful? One thing for sure, we can expect it to get very expensive and the lines to get a lot longer. The Government's idea of security is asking ``who packed your bag''; ``has the bag been with you since you packed it''; and requiring plastic knives to be used on all flights while taking fingernail clippers away from pilots. Pilots overwhelmingly support their right to be armed, some even threatening not to fly if they are not permitted to do so. This could be done quickly and cheaply by merely removing the prohibition against it, as my bill, H.R. 2896, would do. We must not forget four well- placed guns could have prevented the entire tragedy of 9-11. This is a crucial time in our history. Our policy of foreign interventionism has contributed to this international crisis. How we define our enemies will determine how long we fight and when the war is over. The expense will be worth it if we make the right decisions. Targeting the forces of bin Laden makes sense, but invading eight to 10 countries without a precise goal will prove to be a policy of folly, lasting indefinitely, growing in size and cost in terms of dollars and lives, and something for which most Americans will eventually grow weary. Our prayers and hopes are with our President that he continues to use wise judgment in accomplishing this difficult task, something he has been doing remarkably well under the very difficult circumstances. But here at home it is surely a prime responsibility of all Members to remain vigilant and not, out of fear and panic, sacrifice the rights of Americans in our effort to maximize security. Since the President has already done a good job in locating, apprehending, and de-funding those associated with the 9/11 attacks while using current existing laws we should not further sacrifice our liberties with a vague promise of providing more security. We do not need a giant new national agency in order to impose a concept of Homeland Security that challenges our civil liberties. This is an idea whose time has not yet come.

Mr. PAUL

Mr. PAUL. Mr. Speaker, the last 2 weeks have been tough for all Americans. The best we can say is that the events have rallied the American spirit of shared love and generosity. Partisanship was put on hold as it well should have been. We now, as a free people, must deal with this tragedy in the best way possible. Punishment and prevention is mandatory. We must not, however, sacrifice our liberties at the hand of an irrational urgency. Calm deliberation in our effort to restore normalcy is crucial. Cries for dropping nuclear bombs on an enemy not yet identified cannot possibly help in achieving this goal. Mr. Speaker, I returned to Congress 5 years ago out of deep concern about our foreign policy of international interventionism and a monetary and fiscal policy, I believe, would lead to a financial and dollar crisis. Over the past 5 years, I have frequently expressed my views on these issues and why I believe our policies should be changed. This deep concern prompted me to seek and receive seats on the Committee on Financial Services and the Committee on International Relations. I sought to thwart some of the dangers I saw coming, but as the horrific attacks shows, these efforts were to no avail. As concerned as I was, the enormity of the two-pronged crisis that we now face came with a ferocity no one ever wanted to imagine. Now we must deal with what we have and do our best to restore our country to a more normal status. I do not believe this can happen if we ignore the truth. We cannot close our eyes to the recent history that has brought us to this international crisis. We should guard against emotionally driven demands to kill many bystanders in an effort to liquidate our enemy. These efforts could well fail to punish the perpetrators while only expanding the war and making things worse by killing innocent noncombatants and further radicalizing Muslim people. It is obviously no easy task to destroy an almost invisible ubiquitous enemy spread throughout the world without expanding the war or infringing on our liberties here at home. Above all else that is our mandate and our key constitutional responsibility, protecting liberty and providing for national security. My strong belief is that in the past efforts in the U.S. Congress to do much more than this has diverted our attention and, hence, led to our neglect of these responsibilities. Following the September 11 disasters, a militant Islamic group in Pakistan held up a sign for all the world to see. It said: ``Americans, think! Why you are hated all over the world.'' We abhor the messenger, but we should not ignore the message. Here at home we are told that the only reason for the suicidal mass killing we experienced on September 11 is that we are hated because we are free and prosperous. If these two conflicting views are not reconciled we cannot wisely fight nor win the war in which we now find ourselves. We must understand why the hatred is directed toward Americans and not any other Western country. In studying history, I, as many others, have come to the conclusion that war is most often fought for economic reasons, but economic wars are driven by moral and emotional overtones. Our own revolution was fought to escape from the excessive taxation but was inspired and driven by our desire to protect our God-given right to liberty. The War Between the States, fought primarily over tariffs, was nonetheless inspired by the abhorrence of slavery. It is this moral inspiration that drives people to suicidally fight to the death as so many Americans did between 1861 and 1865. Both economic and moral causes of war must be understood. Ignoring the importance of each is dangerous. We should not casually ignore the root causes of our current fight nor pursue this fight by merely accepting the explanation that they terrorize us out of jealousy. It has already been written that Islamic militants are fighting a holy war, a jihad. This drives them to commit acts that to us are beyond comprehension. It seems that they have no concern for economic issues since they have no regard even for their own lives, but an economic issue does exist in this war. It is oil. When the conflict broke out between Iraq and Iran in the early 1980s, we helped to finance and arm Iraq and Saddam Hussein. At that time, Anwar Sadat of Egypt profoundly stated, ``This is the beginning of the war for oil.'' Our crisis today is part of this long-lasting war over oil. Osama bin Laden, a wealthy man, left Saudi Arabia in 1979 to join American-sponsored so-called freedom fighters in Afghanistan. He received financial assistance, weapons and training from our CIA, just as his allies in Kosovo continue to receive the same from us today. Unbelievably, to this day our foreign aid continues to flow into Afghanistan, even as we prepare to go to war against her. My suggestion is, not only should we stop this aid immediately, but we should never have started it in the first place. It is during this time, bin Laden learned to practice terror tragically with money from the U.S. taxpayer, but it was not until 1991 during what we referred to as the Persian Gulf War that he turned fully against the United States. It was this war, said to protect our oil, that brought out the worst in him. Of course, it is not our oil. The oil, in fact, belongs to the Arabs and other Muslim Nations on the Persian gulf. Our military presence in Saudi Arabia is what most Muslims believe to be a sacred violation of holy land. The continuous bombing and embargo of Iraq has intensified the hatred and contributed to more than a million deaths in Iraq. It is clear that protecting certain oil interests and our presence in the Persian Gulf helps drive this holy war. Muslims see this as an invasion and domination by a foreign enemy which inspires radicalism. This is not new. This war, from their viewpoint, has been going on since the Crusades 1,000 years ago. We ignore this history at our own peril. The radicals react as some Americans might react if China dominated the Gulf of Mexico and had air bases in Texas and Florida. Dominating the Persian Gulf is not a benign activity. It has consequences. The attack on the U.S.S. Cole was a warning we ignored. Furthermore, our support for secular governments in the moderate Arab country is interpreted by the radicals as more American control over their region that they want. There is no doubt that our policies that are seen by the radicals as favoring one faction over another in the long-lasting Middle East conflict adds to the distrust and hatred of America. The hatred has been suppressed because we are a powerful economic and military force and wield a lot of influence. But this suppressed hatred is now becoming more visible. And we, as Americans, for the most part, are not even aware of how this could be. Americans have no animosity toward a people they hardly even know. Instead, our policies have been driven by the commercial interests of a few, and now the innocent suffer. I am hopeful that shedding a light on the truth will be helpful in resolving this conflict in the very dangerous period that lies ahead. Without some understanding of the recent and past history of the Middle East and the Persian Gulf, we cannot expect to punish the evildoers without expanding the nightmare of hatred that is now sweeping the world. Punishing the evildoers is crucial. Restoring safety and security to our country is critical. Providing for a strong defense is essential. But extricating ourselves from a holy war that we do not understand is also necessary if we expect to achieve the above- mentioned goals. Let us all hope and pray for guidance in our effort to restore the peace and tranquility we all desire. We did a poor job in providing the security that all Americans should expect, and this is our foremost responsibility. Some Members have been quick to point out the shortcomings of the FBI, the CIA, and the FAA, and to claim more money will rectify the situation. I am not so sure. Bureaucracies, by nature, are inefficient. The FBI and CIA records come up short. The FBI loses computers and guns and is careless with records. The CIA rarely provides timely intelligence. The FAA's idea of security against hijackers is asking all passengers who packed their bags. The clamor now is to give more authority and money to these agencies. But remember, important industries like our chemical plants and refineries do not depend on government agencies for security. They build fences and hire guards with guns. The airlines have not been allowed to do the same thing. There was a time when airline pilots were allowed and did carry guns, and yet this has been prohibited by government regulations. If this responsibility had been left with the airlines to provide safety, they may well have had armed guards and pilots on the planes, just as our industrial sites have. Privatizing the FAA, as other countries have, would also give airlines more leeway in providing security. My bill, H.R. 2896, should be passed immediately to clarify that the Federal Government will never place a prohibition on pilots being armed. We do not need more laws restricting our civil liberties, we need more freedom to defend ourselves. We face an enormous task to restore the sense of security we have taken for granted for so long, but it can be done. Destroying the evildoers while extricating ourselves from this unholiest of wars is no small challenge. The job is somewhat like getting out of a pit filled with venomous snakes. The sooner we shoot the snakes that immediately threaten us, the sooner we can get safely away. If we are not careful, though, we will breed more snakes; and they will come out of every nook and cranny from around the world and little will be resolved. It is no easy task, but before we fight, we had better be precise about whom we are fighting and how many there are and where they are hiding; or we will never know when the war is over and our goals are achieved. Without this knowledge, the war can go on for a long, long time. And the war for oil has already been going on for more than 20 years. To this point, our President and his administration has displayed the necessary deliberation. This is a positive change from unauthorized and ineffective retaliatory bombings in past years that only worsened various conflicts. If we cannot or will not define the enemy, the cost to fight such a war will be endless. How many American troops are we prepared to lose? How much money are we prepared to spend? How many innocent civilians in our Nation and others are we willing to see killed? How many American civilians will be jeopardized? How much of our civil liberties are we prepared to give up? How much prosperity will we sacrifice? The founders and authors of our Constitution provided an answer for the difficult task that we now face. When a precise declaration of war was impossible due to the vagueness of our enemy, the Congress was expected to take it upon themselves to direct the reprisal against an enemy not recognized as a government. In the early days, the concern was piracy on the high seas. Piracy was one of only three Federal crimes named in the original Constitution. Today, we have a new type of deadly piracy in the high sky over our country. The solution the founders came up with under these circumstances was for Congress to grant letters of marque and reprisal. This puts the responsibility in the hands of Congress to direct the President to perform the task, with permission to use and reward private sources to carry out the task, such as the elimination of Osama bin Laden and his key supporters. This narrows targeting the enemy. This effort would not preclude the President's other efforts to resolve the crisis but, if successful, would preclude a foolish invasion of a remote country with a forbidding terrain like Afghanistan, a country that no foreign power has ever successfully conquered throughout all of history. Lives could be saved, billions of dollars could be saved, and escalation due to needless and senseless killing could be prevented. Mr. Speaker, we must seriously consider this option. This answer is a world apart from the potential disaster of launching nuclear weapons or endless bombing of an unseen enemy. Marque and reprisal demands the enemy be seen and precisely targeted with minimal danger to others. It should be considered, and for various reasons, is far superior to any effort that could be carried out by the CIA. We must not sacrifice the civil liberties that generations of Americans have enjoyed and fought for over the past 225 years. Unwise decisions in response to the terror inflicted on us may well fail to destroy our enemy, while undermining our liberties here at home. That will not be a victory worth celebrating. The wise use of marque and reprisal could negate the need to undermine the privacy and rights of our citizens. As we work through this civil task, let us resist the temptation to invoke the most authoritarian of all notions that not too many years ago tore this Nation apart, the military draft. The country is now unified against the enemy. The military draft does nothing to contribute to unity, nor as the Pentagon again has confirmed, does it promote an efficient military. Precise identification of all travelers on our air flights is a desired goal. A national ID issued by the Federal Government would prove to be disastrous to our civil liberties and should not be considered. This type of surveillance power should never be given to an intrusive, overbearing government no matter how well intentioned the motives. The same result can be better achieved by the marketplace. Passenger IDs voluntarily issued by the airlines could be counterfeit-proof, and loss or theft of an ID could be immediately reported to the proper authorities. An ID, fingerprints, birth certificates, or any other information can be required without any violations of anyone's personal liberty. This delicate information would not be placed in the hands of the Government agents, but could be made available to law enforcement officers, like any other information obtained with probable cause in a search warrant. The heat of the moment has prompted calls by some of our officials for great sacrifice of our liberties and privacy. This poses great danger to our way of life and will provide little help in dealing with our enemies. Efforts of this sort will only punish the innocent and have no effect on a would-be terrorist. We should be careful not to do something just to do something, even something harmful. Mr. Speaker, I fear that some big mistakes could be made in pursuit of our enemies if we do not proceed with great caution, wisdom, and deliberation. Action is necessary. Inaction is unacceptable. No doubt others recognize the difficulties in targeting such an elusive enemy. This is why the principle behind the marque and reprisal must be given serious consideration. In retaliation, an unintended consequence of a policy of wanton destruction without benefit to our cause could result in the overthrow of moderate Arab nations by the radicals that support bin Laden. This will not serve our interests and will surely exacerbate the threat to all Americans. As we search for a solution to the mess we are in, it behooves us to look at how John F. Kennedy handled the Cuban crisis in 1962. Personally, that crisis led to a 5-year tour in the U.S. Air Force for me. As horrible and dangerous as the present crisis is, those of us that held our breath during some very tense moments that October realized we were on the brink of a worldwide nuclear holocaust. That crisis represented the greatest potential danger to the world in all of human history. President Kennedy held firm and stood up to the Soviets as he should have and the confrontation was resolved. What was not known at the time was the reassessment of our foreign policy that placed nuclear missiles in the Soviet's back yard in Turkey. These missiles were quietly removed a few months later, and the world became a safer place in which to live. Eventually we won the Cold War without starting World War III. Our enemy today, as formidable as he is, cannot compare to the armed might of the Soviet Union in the fall of 1962. Wisdom and caution on Kennedy's part in dealing with the crisis was indeed a profile in courage. But his courage was not only in his standing up to the Soviets, but his willingness to reexamine our nuclear missile presence in Turkey which, if it had been known at the time, would have been condemned as an act of cowardice. President Bush now has the challenge to do something equally courageous and wise. This is necessary if we expect to avert a catastrophic World War III. When the President asks for patience as he and his advisors deliberate seek a course of action, all Americans should surely heed this request. Mr. Speaker, I support President Bush and voted for the authority and the money to carry out his responsibilities to defend this country. But the degree of death and destruction and chances of escalation must be carefully taken into consideration. It is, though, only with sadness that I reflect on the support, the dollars, the troops, the weapons and training provided by U.S. taxpayers that are now being used against us. Logic should tell us that intervening in all the wars of the world has been detrimental to our own self-interest and should be reconsidered. The efforts of a small minority in Congress to avoid this confrontation by voting for the foreign policy of George Washington, John Adams, and Thomas Jefferson and all the 19th century Presidents went unheeded. The unwise policy of supporting so many militants who later became our armed enemies makes little sense, whether it is bin Laden or Saddam Hussein. A policy designed to protect America is wise and frugal, and hopefully it will once again be considered. George Washington, as we all know, advised strongly, as he departed his Presidency, that we should avoid all entangling alliances with foreign nations. The call for a noninterventionist policy over the past year has fallen on deaf ears. My suggestions made here today will probably meet the same fate. Yet, if truth is spoken, ignoring it will not negate it. In that case, something will be lost. But if something is said to be true and it is not and it is ignored, nothing is lost. My goal is to contribute to the truth and to the security of this Nation. What I have said today is different from what is said and accepted in Washington as conventional wisdom, but it is not in conflict with our history and our Constitution. It is a policy that has, whenever tried, generated more peace and prosperity than any other policy for dealing with foreign affairs. The authors of the Constitution clearly understood this. Since the light of truth shines brightest in the darkness of evil and ignorance, we should all strive to shine that light.

Mr. PAUL

Mr. PAUL. Mr. Speaker, I thank the chairman for yielding me this time. Mr. Speaker, I rise in support of this resolution. Sadly, we find ourselves today dealing with a responsibility to provide national security under the most difficult of circumstances. To declare war against a group that is not a country makes the clear declaration of war more complex. The best tool the framers of the Constitution provided under these circumstances was the power of Congress to grant letters of mark and reprisal in order to narrow the retaliation to only the guilty parties. The complexity of the issue, the vagueness of the enemy, and the political pressure to respond immediately limits our choices. The proposed resolution is the only option we are offered, and doing nothing is unthinkable. There are a couple of serious points I would like to make. For the critics of our policy of foreign intervention in the affairs of others, the attack on New York and Washington was not a surprise, and many have warned of its inevitability. It so far has been inappropriate to ask why the U.S. was the target and not some other Western country. But for us to pursue a war against our enemies, it is crucial to understand why we were attacked, which will then tell us by whom we were attacked. Without this knowledge, striking out at six or eight or 10 countries will not help. Without this knowledge, striking out at six or eight or even ten different countries could well expand this war of which we wanted no part. Without defining the enemy there is no way to know our precise goal nor to know when the war is over. Inadvertent or casual acceptance of civilian deaths as part of this war I'm certain will prolong the agony and increase the chances of even more American casualties. We must guard against this if at all possible. Too often over the last several decades we have supported both sides of many wars only to find ourselves needlessly entrenched in conflicts unrelated to our national security. It is not unheard of that the weapons and support we send to foreign nations have ended up being used against us. The current crisis may well be another example of such a mishap. Although we now must fight to preserve our national security, we should not forget that the founders of this great nation advised that for our own sake we should stay out of entangling alliances and the affairs of other nations. We are placing tremendous trust in our President to pursue our enemies as our commander-in-chief but Congress must remain vigilant as to not allow our civil liberties here at home to be eroded. The temptation will be great to sacrifice our freedoms for what may seem to be more security. We must resist this temptation. Mr. Speaker we must rally behind our President, pray for him to make wise decisions, and hope that this crisis is resolved a lot sooner than is now anticipated.

Mr. PAUL

Mr. PAUL. Mr. Speaker, I thank the gentleman for yielding me time. Mr. Speaker, yesterday Americans were awakened to find ourselves in a war, attacked by barbarians who targeted innocent civilians. This despicable act reveals how deep-seated is the hatred that has driven this war. Though many Americans have just become aware of how deeply we are involved in this war, it has been going on for decades. We are obviously seen by the terrorists as an enemy. In war there is no more reprehensible act than for combatants to slaughter innocent civilians who are bystanders. That is what happened yesterday. If there is such a thing, a moral war is one that is only pursued in self-defense. Those who initiate aggression against others for the purpose of occupation or merely to invoke death and destruction are unforgivable and serve only to spread wanton killing. In our grief, we must remember our responsibilities. The Congress' foremost obligation in a constitutional republic is to preserve freedom and provide for national security. Yesterday our efforts to protect our homeland came up short. Our policies that led to that shortcoming must be reevaluated and changed if found to be deficient. When we retaliate for this horror we have suffered, we must be certain that only the guilty be punished. More killing of innocent civilians will only serve to flame the fires of war and further jeopardize our security. Congress should consider using its constitutional authority to grant letters of marque and reprisals to meet our responsibilities. Demanding domestic security in times of war invites carelessness in preserving civil liberties and the right of privacy. Frequently the people are only too anxious for their freedoms to be sacrificed on the alter of authoritarianism thought to be necessary to remain safe and secure. Nothing would please the terrorists more than if we willingly gave up some of our cherished liberties while defending ourselves from their threat. It is our job to wisely choose our policies and work hard to understand the root causes of war in which we find ourselves. We must all pray for peace and ask for God's guidance for our President, our congressional leaders, and all America, and for the wisdom and determination required to resolve this devastating crisis.

Mr. PAUL

Mr. PAUL. Mr. Speaker, when the Defense Production Act was enacted in 1950, considerable damage was done. Some of the worst damage occurred as a result of wage and price controls and the improper delegation of economic powers to the President (much of which economic power even Congress itself didn't have). This bill's entire existence rests on the presumption that its supporters have absolutely no confidence whatsoever in either freedom or the market process. In a time of crisis, you don't need an ``industrial policy'' and you don't need some fascist or corporatist variety of socialism. What one needs more than ever in a time of crisis is the market--deviation from the market process is the worst thing an economy can do. Oftentimes, it's the ``industrial policy'' which is the very cause of the economic crisis one hopes to remedy with yet another round of ``industrial policy'' intervention. We have an energy crisis in California created by the bureaucrats and the politicians. As prices skyrocket and a crisis is declared, it is later said that prices are now down and there's less of a shortage or crisis. But it's the market process that worked because the prices skyrocketed rather than skyrocketing prices becoming the justification for abandoning the market process. Of course, if one likes socialism and rejects the notion that freedom works, this type of an Act and improper of delegating and centralizing such powers is ideal. But why accept the notions of socialism when you really need an economy to provide products and services in the nation's time of most dire need? This whole notion that the powers in this bill should be illegitimately granted to a President and then turned over to the head of FEMA is potentially one of the most dangerous things this body will ever do (or continue doing). Mr. Speaker, I encourage the members of this body to begin thinking about the amount of false hope they place in the centralization of power in the hands of a central-planners and reconsider their apparent lack of confidence in the market process and a free society. I encourage a strict adherence to market principles and strongly oppose H.R. 2510.

Mr. PAUL

Mr. PAUL. Mr. Speaker, I encourage each and every one of my colleagues to read and heed the insights contained in James Grant's Sunday New York Times article entitled ``Sometimes the Economy Needs a Setback.'' Mr. Grant explores the relationship of technology to the business cycle and identifies the real culprit in business cycles, namely ``easy money.'' Grant explains: Booms not only precede busts; they also cause them. When capital is so cheap that it might as well be free, entrepreneurs make marginal investments. They build and hire expecting the good times to continue to roll. Optimistic bankers and steadily rising stock prices shield new businesses from having to show profits any sooner than ``eventually.'' Those genuinely interested in understanding the most recent economic downturn will do well to read and contemplate Mr. Grant's article. [From the New York Times, Sept. 9, 2001] Sometimes the Economy Needs a Setback (By James Grant) The weak economy and the multi-trillion-dollar drop in the value of stocks have raised a rash of recrimination. Never a people to suffer the loss of money in silence, Americans are demanding to know what happened to them. The truth is simple: There was a boom. A boom is a phase of accelerated prosperity. For ignition, it requires easy money. For inspiration, it draws on new technology. A decade ago, farsighted investors saw a glorious future for the personal computer in the context of the more peaceful world after the cold war. Stock prices began to rise--and rose and rose. The cost of financing new investment fell correspondingly, until by about the middle of the decade the money became too cheap to pass up. Business investment soared, employment rose, reported profits climbed. Booms begin in reality and rise to fantasy. Stock investors seemed to forget that more capital spending means more competition, not less; that more competition implies lower profit margins, not higher ones; and that lower profit margins do not point to rising stock prices. It seemed to slip their minds that high-technology companies work ceaselessly to make their own products obsolete, not just those of their competitors--that they are inherently self- destructive. At the 2000 peak of the titanic bull market, as shares in companies with no visible means of support commanded high prices, the value of all stocks as a percentage of the American gross domestic product reached 183 percent, more than twice the level before the crash in 1929. Were investors out of their minds? Wall Street analysts were happy to reassure them on this point: No, they were the privileged financiers of the new economy. Digital communications were like the wheel or gunpowder or the internal combustion engine, only better. The Internet would revolutionize the conveyance of human thought. To quibble about the valuation of companies as potentially transforming as any listed on the Nasdaq stock market was seen almost as an act of ingratitude. The same went for questioning the integrity of the companies' reports of lush profits. In markets all things are cyclical, even the idea that markets are not cyclical. The notion that the millennial economy was in some way ``new'' was an early portent of confusion. Since the dawn of the industrial age, technology has been lightening the burden of work and In 1932 an eminent German analyst of business cycles, Wilhelm Ropke, looked back from amid the debris of the Depression. Citing a series of inventions and innovations-- railroads, steelmaking, electricity, chemical production, the automobile--he wrote: ``The jumpy increases in investment characterizing every boom are usually connected with some technological advance. * * * Our economic system reacts to the stimulus. * * * with the prompt and complete mobilization of all its inner forces in order to carry it out everywhere in the shortest possible time. But this acceleration and concentration has evidently to be bought at the expense of a disturbance of equilibrium which is slowly overcome in time of depression.'' Ropke, wrote before the 1946 Employment Act, which directed the United States government to cut recessions short--using tax breaks, for example, or cuts in interest rates--even if these actions stymie a salutary process of economic adjustment. No one doubts the humanity of this law. Yet equally, no one can doubt the inhumanity of a decade-long string a palliatives in Japan, intended to insulate the Japanese people from the consequences of their bubble economy of the 1980's. Rather than suppressing the bust, the government has only managed to prolong it, for a decade and counting. Booms not only precede busts; they also cause them. When capital is so cheap that it might as well be free, entrepreneurs make marginal investments. They build and hire expecting the good times to continue to roll. Optimistic bankers and steadily rising stock prices shield new businesses from having to show profits any sooner than ``eventually.'' Then, when the stars change alignment and investors decide to withhold new financing, many companies are cash-poor and must retrench or shut down. It is the work of a bear market to reduce the prices of the white elephants until they are cheap enough to interest a new class of buyers. The boom-and-bust pattern has characterized the United States economy since before the railroads. Growth has been two steps forward and one step back, cycle by cycle. Headlong building has been followed by necessary tearing down, which has been followed by another lusty round of building. Observing this sequence from across the seas, foreigners just shake their heads. Less and less, however, are we bold and irrepressible Americans willing to suffer the tearing-down phase of the cycle. After all, it has seemed increasingly unnecessary. With a rising incidence of federal intervention in financial markets, expansions have become longer and contractions shorter. And year in and year out, the United States is allowed to consume more of the world's goods than it produces (the difference being approximately defined as the trade deficit, running in We have listened respectfully as our financial elder statesmen have speculated on the likelihood that digital technology has permanently reduced the level of uncertainty in our commercial life--never mind that last year the information technology industries had no inkling that the demand for their products was beginning to undergo a very old-fashioned collapse. Even moderate expansions produce their share of misconceived investments, and the 90's boom, the gaudiest on record, was no exception. In the upswing, faith in the American financial leaders bordered on idolatry. Now there is disillusionment. Investors are right to resent Wall Street for its conflicts of interest and to upbraid Alan Greenspan for his wide-eyed embrace of the so-called productivity miracle. But the underlying source of recurring cycles in any economy is the average human being. The financial historian Max Winkler concluded his tale of the fantastic career of the swindler-financier Ivar Kreguer, the ``Swedish match king,'' with the ancient epigram ``Mundus vult decipi; ergo decipiatur'': The world wants to be deceived; let it therefore be deceived. The Romans might have added, for financial context, that the world is most credulous during bull markets. Prosperity makes it gullible. James Grant is the editor of Grant's Interest Rate Observer.

Mr. PAUL

Mr. PAUL. Mr. Speaker, I have taken a Special Order today to address the subject of the U.S. dollar and the world economy, and in the words of James Madison, the pestilent effects of paper money. Mr. Speaker, Congress has a constitutional responsibility to maintain the value of the dollar by making only gold and legal silver tender and not to emit bills of credit, that is, paper money. This responsibility was performed relatively well in the 19th century despite the abuse of the dollar suffered during the Civil War and despite repeated efforts to form a Central Bank. This policy served to maintain relatively stable prices, and the shortcomings came only when the rules of the gold standard were ignored or abused. In the 20th century, however, we saw the systematic undermining of sound money with the establishment of the Federal Reserve System in 1913 and the outright rejection of gold with the collapse of the Bretton Woods agreement in 1971. We are now witnessing the effects of the accumulated problems of 30 years of fiat money, not only the dollar but also all the world currencies, something the world has never before experienced. Exactly how it plays out is yet unknown. Its severity will be determined by future monetary management, especially by the Federal Reserve. The likelihood of quickly resolving the deeply ingrained and worldwide imbalances built up over 30 years is remote. Yielding to the addiction of credit creation, as has been the case with every market correction over the past 30 years, remains irresistible to the central bankers of the world. Central planners who occupy the seats of power in every central bank around the world refuse to accept the fact that markets are more powerful and smarter than they are. The people of the United States, including the U.S. Congress, are far too complacent about the seriousness of the current economic crisis. They remain oblivious to the significance of the U.S. dollar's fiat status. Discussions about the dollar are usually limited to the question of whether the dollar is now too strong or too weak. When money is defined as a precise weight of a precious metal, this type of discussion does not exist. The only thing that matters under that circumstance is whether an honest government will maintain convertibility. Exporters always want a weak dollar; importers, a strong one. But no one demands a stable, sound dollar, as they should. Manipulation of foreign trade through competitive currency devaluations has become commonplace and is used as a form of protectionism. This has been going on ever since the worldwide acceptance of fiat money 30 years ago. Although some short-term advantage may be gained for certain manufacturers and some countries by such currency manipulation, it only adds fuel to the economic and financial instability inherent in a system of paper money. Paper money helps the strong and hurts the weak before it self- destructs and undermines international trade. The U.S. dollar, with its reserve currency status, provides a much greater benefit to American citizens than that which occurs in other countries that follow a very similar monetary policy. It allows us to export our inflation by buying cheap goods from overseas while our dollars are then lent back to us to finance our current account deficit. We further benefit from the confidence bestowed on the dollar by our being the economic and military powerhouse of the world, thus postponing the day of reckoning. This permits our extravagant living to last longer than would have otherwise occurred under a gold standard. Some may argue that a good deal like that should not be denied, but unfortunately the piper must eventually be paid. Inevitably the distortions such as our current account deficit and foreign debt will come to an end with more suffering than anyone has anticipated. The monetary inflation of the 1990s produced welcomed profits of $145 billion for the NASDAQ companies over the 5 years between 1996 and 2000. Astoundingly, this entire amount was lost in the past year. This does not even address the trillions of dollars of paper losses in stock values from its peak in early 2000. Congress has expressed concern about the staggering stock market losses but fails to see the connection between the bubble economy and the monetary inflation generated by the Federal Reserve. Instead, Congress chooses to blame the analysts for misleading investors. The analysts may not be entirely blameless, but their role in creating the bubble is minimal compared to the misleading information that the Federal Reserve has provided with artificially low interest rates and a financial market made flush with generous new credit at every sign of correction over the past 10 years. By preventing the liquidation of bad debt and the elimination of malinvestment and overcapacity, the Federal Reserve's actions have kept the financial bubble inflated. Of course, it is an easy choice in the short run. Who would deliberately allow the market tendency to deflate back to stability? That would be politically unacceptable. Talk of sound money and balanced budgets is just that. When the economy sinks, the rhetoric for sound policy and a strong dollar may continue, but all actions by the Congress and the Fed will be directed toward reinflation and a congressional spending policy oblivious to all the promises regarding a balanced budget and the preservation of the Social Security and Medicare Trust Funds. But if the Fed and its chairman, Alan Greenspan, have been able to guide us out of every potential crisis all the way back to the stock market crash of 1987, why should we not expect the same to happen once again? Mainly because there is a limit to how long the monetary charade can be perpetuated. Now it looks like the international financial system built on paper money is coming to an end. Modern day globalism since gold's demise 30 years ago has been based on a purely fiat U.S. dollar with all other currencies tied to the dollar. International redistribution and management of wealth through the IMF, the World Bank, and the WTO have promoted this new version of globalism. This type of globalism depends on trusting central bankers to maintain currency values and the international institutions to manage trade equitably, while bailing out weak economies with dollar inflation. This, of course, has only been possible because the dollar's strength is perceived to be greater than it really is. Modern day globalists would like us to believe they invented globalism. Yet all they are offering is an unprecedented plan for global power to be placed in the hands of a few powerful special interests. Globalism has existed ever since international trade started thousands of years ago. Whether it was during the Byzantine Empire or the more recent British Empire, it worked rather well when the goal was honest trade and the currency was gold. Today, however, world government is the goal. Its tools are fiat money and the international agencies that believe they can plan globally, just as many others over the centuries believed they could plan domestically, ignoring the fact that all efforts at socialism have failed. The day of reckoning for all this mischief is now at hand. The dollar is weakening in spite of all the arguments for its continued strength. Economic law is overruling political edicts. Just how long will the U.S. dollar and the U.S. taxpayers be able to bail out every failed third-world economy and pay the bills for policing the world? U.S. troops are now in 140 nations around the world. The answer is certainly not forever and probably not much longer, since the world economies are readjusting to the dislocations of the past 30 years of mismanagement and misallocation of capital characteristic of fiat money. Fiat money has been around for a long time off and on throughout history, but never has the world been so enthralled with the world economy being artificially structured with paper money and with a total rejection of the anchor that gold provided for thousands of years. Let there be no doubt, we live in unprecedented times and we are just beginning to reap what has been sown the past 30 years. Our government and the Federal Reserve officials have grossly underestimated the danger. Current concerns are expressed by worries about meeting the criteria for a government-declared recession and whether a weaker dollar would help. The first is merely academic, because if you are one of the many thousands who have been laid off, you are already in a recession. The second does not make a lot of sense unless one asks, compared to what? The dollar has been on a steady course of devaluation for 30 years against most major currencies and against gold. Its purchasing power in general has been steadily eroded. The fact that the dollar has been strong against Third World currencies and against most major currencies for the past decade does not cancel out the fact that the Federal Reserve has systematically eroded the dollar's value by steadily expanding the money supply. Recent reports of a weakening dollar on international exchange markets have investment implications, but do not reflect a new policy designed to weaken the dollar. This is merely the market adjusting to 30 years of systematic monetary inflation. Regardless of whether the experts demand a weak dollar or a strong dollar, each inevitably demands lower interest rates, hoping to spur the economy and save the stock market from crashing. But one must remember that the only way the Federal Reserve can lower interest rates is to inflate the currency by increasing the money supply and by further debasing the currency. In the long term, the dollar is always weakened even if the economy is occasionally stimulated on a short-run basis. Economic growth can hide the ill effects of monetary inflation by holding some prices in check, but it cannot prevent the overcapacity, the malinvestment which causes the economic downturn. Of course, the central bankers cling to the belief that they somehow can prevent the ugly corrections known as ``recessions.'' Economic growth, when artificially stimulated by money growth and low interest rates, generates the speculation we have seen in the stock, bond and real estate markets, along with the accumulation of excessive debt. Once the need for rectifying the overcapacity is recognized by the market, these imbalances are destined to be wiped out. Prolonging the correction phase with the Fed's effort to reinflate by diligently working for a soft landing, or even to prevent a recession, only postpones the day the economy can return to sustained growth. This is a problem the United States had in the 1930s and one that Japan has experienced for more than a decade with no end in sight. The next recession, from which I am sure we are already suffering, will be even more pervasive worldwide than the one in the 1930s due to the artificial nature of modern globalism with world paper money and international agencies deeply involved in the economy of every nation. We have witnessed the current and recent bailouts of Mexico, Argentina, Brazil, Turkey, and countries in the Far East. While resisting the market's tendency for correction, faith in government deficits and belief in paper money inflation will surely prolong the coming worldwide crisis. Alan Greenspan made a concerted effort to stave off the 1991-1992 recession with numerous reductions in the Fed funds rate, to no avail. The recession hit, and most people believe it led to George Bush's defeat in the 1992 election. It was not that Greenspan did not try. In many ways, the Bush people's criticism of Greenspan's effort is not justified. Greenspan, the politician, would have liked to please the elder Bush, but was unable to control events as he had wished. This time around, however, he has been much more aggressive, with half-point cuts, along with seven cuts in just the last 8 months, for a total of 3 points cut in the Fed funds rate. But, guess what? So far, it has not helped; stocks continue to slide and the economy is still in the doldrums. It is now safe to say that Greenspan is pushing on a string. In the year 2000, bank loans and commercial paper were growing at an annualized rate of 23 percent. In less than a year, in spite of this massive influx of new credit, these loans have crashed to a rate of minus 5 percent. Where is the money going? Some of it probably has helped to prop up the staggering stock market, but that cannot last forever. Plenty went into consumption and to finance extravagant living. The special nature of the dollar as the reserve currency of the world has permitted the bubble to last longer. That would be especially beneficial to American consumers. But in the meantime, understandably, market and political forces have steadily eroded our industrial base, while our service sector has thrived. Consumers enjoyed having even more funds to spend as the dollars left manufacturing. In a little over a year, 1 million industrial jobs were lost, while saving rates sank to zero and capital investments plummeted. Foreigners continue to grab our dollars, permitting us to raise our standard of living, but unfortunately, it is built on endless printing of fiat money and self-limiting personal debt. The Federal Reserve credit created during the last 8 months has not stimulated economic growth in the technology or the industrial sector, but a lot of it ended up in the expanding real estate bubble, churned by the $3.2 trillion of debt maintained by the GSEs, the Government Sponsored Enterprises. The GSEs, made up of Fannie Mae, Freddie Mac and the Federal Home Loan Bank, have managed to keep the housing market afloat, in contrast to the more logical slowdown in hotel and office construction. This spending through the GSEs has also served as a vehicle for consumption spending. This should be no surprise, considering the special status that the GSEs enjoy, since their implied line of credit to the U.S. Treasury keeps their interest rates artificially low. The Clinton administration encouraged growth in housing loans that were financed through this system. In addition, the Federal Reserve treats GSE securities with special consideration. Ever since the fall of 1999, the Fed has monetized GSE securities just as if they were U.S. Treasury bills. This message has not been lost by foreign central banks, which took their cue from the Fed and now hold over $130 billion worth of United States GSE securities. The Fed holds only $20 billion worth, but the implication is clear: Not only will the Treasury loan to the GSEs, if necessary, since the line of credit is already in place, but if necessary, Congress will surely accommodate with appropriations as well, just as they did during the savings and loan crisis of the 1970s. But the Fed has indicated to the world that the GSEs are equivalent to U.S. Treasury bills, and foreign central bankers have enthusiastically accommodated, sometimes by purchasing more than $10 billion worth of these securities in 1 week alone. They are merely recycling the dollars we so generously print and spend overseas. After the NASDAQ collapsed last year, the flow of funds into real estate accelerated. The GSEs accommodated by borrowing without restraint to subsidize new mortgages, record sales and refinancing. It is no wonder the price of houses are rising to record levels. Refinancing especially helped consumers to continue spending, even in a slowing economy. It is not surprising for high credit card debt to be frequently rolled into second mortgages, since interest on mortgage debt has the additional advantage of being tax deductible. When financial conditions warrant, leaving financial instruments such as paper assets and looking for hard assets such as houses is commonplace and is not a new phenomenon. Instead of the newly inflated money being directed toward the stock market, it now finds its way into the rapidly expanding real estate bubble. This, too, will burst, as all bubbles do. The Fed, the Congress or even foreign investors cannot prevent the collapse of this bubble, any more than the Japanese banks were able to keep the Japanese miracle of the 1980s going forever. Concerned Federal Reserve economists are struggling to understand how the wealth effect of the stock market and real estate bubbles affect economic activity and consumer spending. It should be no mystery, but it would be too much to expect the Fed to look to itself and its monetary policy for an explanation and assume responsibility for engineering the entire financial mess we are in. A major problem still remains. Ultimately, the market determines all values, including all currencies. With the current direction of the dollar, certainly downward, the day of reckoning is fast approaching. A weak dollar will prompt dumping of GSE securities before Treasuries, despite the Treasury's and the Fed's attempt to equate them with government securities. This will threaten the whole GSE system of finance, because the challenge to the dollar and the GSEs will hit just when the housing market turns down and defaults rise. Also a major accident can occur in the derivatives market, where Fannie Mae and Freddie Mac are deeply involved in hedging their interest rate bets. Rising interest rates that are inherent with a weak currency will worsen the crisis. The weakening dollar will usher in an age of challenge to the whole worldwide financial system. The dollar has been the linchpin of economic activity, and a severe downturn in its value will not go unnoticed and will compound the already weakening economies of the world. More monetary inflation, even if it is a concerted worldwide effort, cannot solve the approaching crisis. The coming crisis will result from fiat money and the monetary inflation. More of the same cannot be the solution. Pseudo free trade, managed poorly and driven by fiat money, is no substitute for true free trade in a world with a stable commodity currency, such as gold. Managed trade and fiat money historically have led to trade wars, which the international planners pretend to abhor. Yet the trade war is already gearing up, and the WTO, purported to exist to lower tariffs, is actually the agency that grants permission for tariffs to be applied when complaints of dumping are levied. We are in the midst of a banana, textile, steel, lumber and tax war, all managed by the WTO. When cheap imports hit our market, it is a good deal for our consumer, but our manufacturers are the first to demand permission to place protective tariffs on imports. If this is already occurring in an economy that has been doing quite well, one can imagine how strong the protectionist sentiments will be in a worldwide slowdown. Congress is starting to realize that the budget forecast based on an overly optimistic growth rate of 3 percent is way off target, and even the pseudo surpluses are soon to be eliminated. Remember, the national debt never went down with the so-called surpluses. The national debt is currently rising at more than $120 billion on an annualized rate, and is destined to get worse. Our dollar problem, which affects our financial and budgetary decisions, originated at the Fed with our country's acceptance of paper money 30 years ago. Federal Reserve officials and other government leaders purposely continued to mislead the people by spouting the nonsense that there is no evidence of inflation as measured by government rigged price indices. Even though significant price increases need not exist for monetary inflation to place a hardship on the economy, stock prices, housing prices, costs of medical care and education and the cost of government have all been rising at very rapid rates. But the true inflation, measured by the money supply, is rising at a rate greater than 20 percent as measured by MZM. This fact is ignored. The deception regarding price increases is supported to reassure us, and may do so for a while. The Fed never admits it, and the Congress disregards it out of ignorance, but the serious harm done by artificially low interest rates leading to malinvestment, overcapacity, excessive debt and speculation are the distortions that always guarantee the next recession. Serious problems lie ahead. If the Fed continues with the same monetary policy of perpetual inflation and the Congress responds with more spending and regulations, real solutions will be indefinitely delayed. The current problems hopefully will cause us as a nation and, in particular, Congress to reassess the policies that have allowed the imbalances to develop over these last 30 years. Some day, stable money, based on the gold standard, must be reconsidered. Stable money is a constitutional responsibility of Congress. The Federal Reserve Board's goal of stable prices, economic growth and interest rates, through centralized economic planning, by manipulating money and credit, is a concoction of the 20th century Keynesian economics. These efforts are not authorized by the Constitution and are economically detrimental. Economic adjustments would not be so bad, as many mild recessions have proven, except that wealth is inexorably and unfairly transferred from the middle class and the poor to the rich. Job losses and the rising cost of living hurt some more than others. If our course does not change, the entire middle class prosperity can be endangered, as has happened all too often in other societies that pursued a false belief that paper money could be satisfactorily managed. Even the serious economic problems generated by a flawed monetary system could be tolerated, except for the inevitable loss of personal liberty that accompanies government's effort to centrally plan the economy through a paper monetary system and ever-growing welfare state. Likewise, an imperialistic foreign policy can only be supported by inflation and high taxation. This policy compounds the threat to liberty because, all too often, our leaders get us involved in overseas military adventurism in which we should have no part. Today, that danger is greater than ever as we send our dollars and our troops hither and yon to areas of the world most Americans have no knowledge or interest in. But the driving force behind our foreign policy comes from our oil corporations, international banking interests, and the military industrial complex which have high-stake interests in the places our troops and foreign aid are sent. If, heaven forbid, the economy sinks as low and for as long as many free market economists believe, what policy changes must we consider? Certainly, the number one change ought to be to reject the ideas that created the crisis, but rejecting old ways that Congress and the people are addicted to is not easy. Many people believe that government programs are free. The clamor for low interest rates and, therefore, more monetary inflation, by virtually all public officials and prominent business and banking leaders is endless. And, the expectation for government to do something for every economic malady, even if ill- advised government policy had created the problem in the first place, drives this seductive system of centralized planning that ultimately undermines prosperity. A realization that we cannot continue our old ways may well be upon us, and the inflating, taxing, regulating, and the centralized planning programs of the last 30 years must come to an end. Only reigning in the welfare-warfare state will suffice. This eliminates the need for the Fed to monetize the debt that politicians depend on to please their constituents and secure their reelection. We must reject our obsession with policing the world by our endless foreign commitments and entanglements. This would reduce the need for greater expenditures, while enhancing our national security. It would also remove pressure on the Federal Reserve to continue a flawed monetary policy of monetizing endless government debt. But we must also reject the notion that one man, Alan Greenspan, or any other chairman of the Federal Reserve, can know what the proper money supply and the proper interest rates ought to be. Only the market can determine that. This must happen if we ever expect to avoid continuous and deeper recessions and to get the economy growing in a healthy and sustainable fashion. It also must happen if we want to preserve free market capitalism and personal liberty. The longer the delay in establishing a free market and commodity currency, even with interrupted blips of growth, the more unstable the economy and the more difficult the task becomes. Instead, it will result in what no one wants: more poverty and political turmoil. There are no other options if we hope to remain a free and prosperous Nation. Economic and monetary meddling undermines its principles of a free society. A free society and sound money maximize production and minimize poverty. The responsibility of Congress is clear: avoid the meddling so ingrained in our system and assume the responsibility all but forgotten, to maintain a free society, while making the dollar, once again, as good as gold. Now, I want to close with a quote from James Madison from The Federalist Papers, because the founders of this country faced the dilemma of runaway inflation with the continental currency and that is where our slogan comes from: ``It is not worth a continental.'' This was a major reason why we had the constitutional convention because they knew and understood the evils and the disastrous effects of what paper money could do to a society. These are the words of James Madison. He says, ``The extension of the prohibition to bills of credit must give pleasure to every citizen in proportion to his love of justice and his knowledge of the true springs of public prosperity. The loss which America has sustained since the peace, from the pestilent effects of paper money on the necessary confidence between man and man, on the necessary confidence in the public councils, on the industries and morals of the people, and on the character of republican government, constitutes an enormous debt against the States chargeable with this ill-advised measure.''

Mr. PAUL

Mr. PAUL. Mr. Speaker, I rise to introduce the Prescription Drug Affordability Act. This legislation ensures that millions of Americans, including seniors, have access to affordable pharmaceutical products. My bill makes pharmaceuticals more affordable to seniors by reducing their taxes. It also removes needless goverment barriers to importing pharmaceuticals and it protects Internet pharmacies, which are making affordable prescription drugs available to millions of Americans, from being strangled by federal regulation. The first provision of my legislation provides seniors a tax credit equal to 80 percent of their prescription drug costs. As many of my colleagues have pointed out, our nation's seniors are struggling to afford the prescription drugs they need in order to maintain an active and healthy lifestyle. Yet, the federal government continues to impose taxes on Social Security benefits. Meanwhile, Congress continually raids the Social Security trust fund to finance unconstitutional programs! It is long past time for Congress to choose between helping seniors afford medicine or using the Social Security trust fund as a slush fund for big government and pork-barrel spending. Mr. Speaker, I do wish to clarify that this tax credit is intended to supplement the efforts to reform and strengthen the Medicare system to ensure seniors have the ability to use Medicare funds to purchase prescription drugs. I am a strong supporter of strengthening the Medicare system to allow for more choice and consumer control, including structural reforms that will allow seniors to use Medicare funds to cover the costs of prescription drugs. In addition to making prescription medications more affordable for seniors, my bill lowers the price for prescription medicines by reducing barriers to the importation of FDA-approved pharmaceuticals. Under my bill, anyone wishing to import a drug simply submits an application to the FDA, which then must approve the drug unless the FDA finds the drug is either not approved for use in the US or is adulterated or misbranded. This process will make safe and affordable imported medicines affordable to millions of Americans. Mr. Speaker, letting the free market work is the best means of lowering the cost of prescription drugs. I need not remind my colleagues that many senior citizens and other Americans impacted by the high costs of prescription medicine have demanded Congress reduce the barriers which prevent American consumers from purchasing imported pharmaceuticals. Just a few weeks ago, Congress responded to these demands by overwhelmingly passing legislation liberalizing the rules governing the importation of pharmaceuticals. While this provision took a good first step toward allowing free trade in pharmaceuticals, and I hope it remains in the final bill, the American people will not be satisfied until all unnecessary regulations on importing pharmaceuticals are removed. The Prescription Drug Affordability Act also protects consumers' access to affordable prescription drugs by forbidding the federal government from regulating any Internet sales of FDA-approved pharmaceuticals by state-licensed pharmacists. As I am sure my colleagues are aware, the Internet makes pharmaceuticals and other products more affordable and accessible for millions of Americans. One gentleman in my district has used the Internet to lower his prescription drugs costs from $700 to $100 a month! However, the federal government has threatened to destroy this option by imposing unnecessary and unconstitutional regulations on web sites which sell pharmaceuticals. Any federal regulations would inevitably drive up prices of pharmaceuticals, thus depriving many consumers of access to affordable prescription medications. In conclusion, Mr. Speaker, I urge my colleagues to make pharmaceuticals more affordable and accessible by lowering taxes on senior citizens, removing barriers to the importation of pharmaceuticals and protecting legitimate Internet pharmacies from needless regulation by cosponsoring the Prescription Drug Affordability Act.

Mr. PAUL

Mr. PAUL. Mr. Speaker, I rise to introduce the Truth in Employment Act which protects small businesses and independent-minded workers from the destructive and coercive ``top-down'' organizing tactic known as salting. Salting is a technique designed by unscrupulous union officials for the purpose of harassing small businesses until the businesses compel their employees to pay union dues as a condition of employment. ``Salts'' are professional union organizers who apply for jobs solely in order to compel employers into consenting to union monopoly bargaining and forced-dues contract clauses. They do this by disrupting the workplace and drumming up so-called ``unfair labor practice'' charges which are designed to harass and tie up the small business person in constant and costly litigation. Thanks to unconstitutional interference in the nation's labor markets by Congress, small businesses targeted by union salts often must acquiesce to union bosses' demands that they force their workers to accept union ``representation'' and pay union dues. If an employer challenges a salt, the salt may file (and win) an unfair labor practice charge against the employer! Passing the Truth in Employment Act is a good first step toward restoring the constitution rights of property and contract to employers and employees. I therefore urge my colleagues to stand up for those workers who do not wish to be forced to pay union dues as a condition of employment by cosponsoring the Truth in Employment Act.

Mr. PAUL

Mr. PAUL. Mr. Speaker, I rise to introduce legislation which enhances senior citizens' ability to control their health care and use Medicare money to pay for prescription drugs. This legislation accomplishes these important goals by removing the numerical limitations and sunset provisions in the Medicare Medical Savings Account (MSAS) program so that all seniors can take advantage of the Medicare MSA option. Medicare MSAs consist of a special savings account containing Medicare funds for seniors to use for their routine medical expenses, including prescription drug costs. Seniors in a Medicare MSA program are also provided with a catastrophic insurance policy to cover non- routine expenses such as major surgery. Under an MSA plan, the choice of whether to use Medicare funds for prescription drug costs, or other services not available under traditional Medicare such as mamograms, are made by the senior, not by bureaucrats and politicians. One of the major weaknesses of the Medicare program is that seniors do not have the ability to use Medicare dollars to cover the costs of prescription medicines, even though prescription drugs represent the major health care expenditure for many seniors. Medicare MSAs give those seniors who need to use Medicare funds for prescription drugs the ability to do so without expanding the power of the federal bureaucracy or forcing those seniors who currently have prescription drug coverage into a federal one-size-fits-all program. Medicare MSAs will also ensure seniors access to a wide variety of health care services by minimizing the role of the federal bureaucracy. As many of my colleagues know, an increasing number of health care providers have withdrawn from the Medicare program because of the paperwork burden and constant interference with their practice by bureaucrats from the Center for Medicare and Medicaid Services (previously known as the Health Care Financing Administration). The MSA program frees seniors and providers from the this burden thus making it more likely that quality providers will remain in the Medicare program! Mr. Speaker, the most important reason to enact this legislation is seniors should not be treated like children and told what health care services they can and cannot have by the federal government. We in Congress have a duty to preserve and protect the Medicare trust fund and keep the promise to America's seniors and working Americans, whose taxes finance Medicare, that they will have quality health care in their golden years. However, we also have a duty to make sure that seniors can get the health care that suits their needs, instead of being forced into a cookie cutter program designed by Washington-DC- based bureaucrats! Medicare MSAs are a good first step toward allowing seniors the freedom to control their own health care. In conclusion, Mr. Speaker, I urge my colleagues to provide our senior citizens greater control of their health care, including the ability to use Medicare money to purchase prescription drugs by cosponsoring my legislation to expand the Medicare MSA program.

Mr. PAUL

Mr. PAUL. Mr. Speaker, I would like to draw the attention of my colleagues to the Op Ed article ``Crazy for Kazakhstan--Asian nation of vital interest'' by former Secretary of Energy Bill Richardson published in ``The Washington Times'' on July 30, 2001. Mr. Richardson has been working with countries of Central Asia, particularly with oil rich Kazakhstan, for a long time and has an extensive expertise in the region. I think we can rely on his assessments. In the article he outlines achievements of Kazakhstan and defines this country one of the promising ``of all the countries rising from the ashes of the Soviet Union''. Indeed, Kazakhstan, despite the difficulties of its transition period, has carried out large scale economic and political reforms, especially when compared to the rest of the newly independent states. Kazakhstan is a young country located in a critically strategic region with ``rough'' neighbors and it is crucial for the U.S. to work with this country both politically and economically to ensure their security, independence and progressive development. This year is the 10th anniversary of Kazakhstan's independence and during this period Kazakhstan has shown its commitment to work with the U.S. in many areas, including sensitive ones, and has proven to be our reliable partner. Mr. Speaker, I agree with Mr. Richardson that this key Central Asian country is of great importance to U.S. interests. Kazakhstan in many ways should be seen as our natural ally in the region. The time has come for the U.S. to pay closer attention to this country and be more engaged with it. For this reason I cosponsored the legislation (H.R. 1318) that would grant permanent trade relations to Kazakhstan. I submit the full text of this article from ``The Washington Times'' to be placed in the Record. [From the Washington Times, July 30, 2001] Crazy for Kazakhstan (By Bill Richardson) As secretary of energy and ambassador to the United Nations during the Clinton administration, I traveled three times to Kazakhstan to underscore the importance of this key Central Asian country to U.S. interests. Of all the countries rising from the ashes of the Soviet Union, few offer the promise of Kazakhstan. In terms of both economic potential and political stability, Kazakhstan is critical to the long-term success of the Central Asian nations. The Bush administration should continue our policy of engaging Kazakhstan to ensure that this key country moves towards the Western orbit and adopts continued market and political reforms. From its independence from the Soviet Union in 1991 to the Present, Kazak leaders have made the difficult and controversial decisions necessary to bring their country into the 21st century. In May 1992, President Nursultan Nazarbayev announced that Kazakhstan would unilaterally disarm all of its nuclear weapons. In the aftermath of the Soviet Union's collapse, Kazakhstan was left with the fourth-largest nuclear arsenal in the world, a tempting target for terrorists and other extremists. Mr. Nazarbayev's courageous decision to disarm in the face of opposition from Islamic nationalists and potential regional instability was one of the fundamental building blocks that have allowed Kazakhstan to emerge as a strong, stable nation and a leader in Central Asia. Then- President George Bush hailed the decision as ``a momentous stride toward peace and stability.'' Since that time, Central Asia has become an increasingly complex region. Russia is reemerging from its post-Soviet economic crises and is actively looking for both economic opportunities in Central Asia as well as to secure its political influence over the region. China is rapidly expanding its economic power and political influence in the region. Iran, despite recent progress made by moderate elements in the government, is still a state sponsor of terrorism and is actively working to develop weapons of mass destruction. Many of the other former Soviet republics have become havens for religious extremists, terrorists, drug cartels and transit points for smugglers of all kind. In the center of this conflict and instability Kasakhstan has begun to prosper by working to build a modern economy, developing its vast natural resources and providing a base of stability in a very uncertain part of the world. With the discovery of the massive Kashagan oil field in the Kazak portion of the Caspian Sea, Kazakhstan is poised to become a major supplier of petroleum to the Western World and a competitor to Organization of Petroleum Exporting Countries (OPEC). It is critical that we continue to facilitate western companies' investment in Kazakhstan and the establishment of secure, east-west pipeline routes for Kazak oil. This is the only way for Kazakhstan to loosen its dependence on Russia for transit rights for its oil and gas and secure additional, much needed, oil for the world market. American policy in the region must be based on the complex geopolitics of Central Asia and provide the support required to enable these countries to reach their economic potential. We must continue to give top priority to the development of Kazakhstan's oil and gas industries and to the establishment of east-west transportation corridors for Caspian oil and gas. We must also remain committed to real support for local political leadership, fostering rule of law and economic reforms and to helping mitigate and solve the lingering ethnic and nationalistic conflicts in the region. Only through meaningful and substantial cooperation with Kazakhstan, will we be able to realize these goals. There are many challenges ahead for Kazakhstan, but there are enormous opportunities for economic and political progress. Mr. Nazarbayev has taken advantage of Kazakhstan's stability to begin transforming its economy from the old Soviet form giant, state-owned industries and collective grain farms into a modern, market-based economy. We have much at stake in this development. Will Kazakhstan become a true market-oriented democracy, or will it slip into economic stagnation and ethnic violence like so many of its neighbor? The stability of Central Asia and the Caucasus depends on how Kazakhstan chooses to move forward. The United States must do its part to enhance U.S.-Kazakhstancooperation and encourage prosperity and stability for the entire region.

Mr. PAUL

Mr. PAUL. Mr. Speaker, I thank the gentleman for yielding me time. Mr. Speaker, as you know, I am a physician. I practiced medicine for more than 30 years, and I can certainly vouch for the fact that medicine is a mess, managed care is not working very well; and, hopefully, we do something good to improve it. Unfortunately, I am not all that optimistic. I support this rule because it is dealing with a very difficult subject and it brings the Democratic base bill to the floor. I do not see why we should not be able to amend that bill, so I do support the rule. But the IRS code has 17,000 pages of regulation. The regulations that we as physicians have to put up with are 132,000 pages. Most everything I see that is happening today is we are going to increase those pages by many more thousands. So I am not optimistic that is going to do a whole lot of good. I think we went astray about 30-some years ago in the direction of medical care when the government, the Federal Government, got involved. The first thing is we changed our attitude and our definition of what ``rights'' are. We call this a Patients' Bill of Rights. It has very little to do with rights, because most of what we do in medicine, we undermine individual rights. We have a right in society, in a free society, to our life and our liberty, and we have a right to use that liberty to pursue our happiness and provide for our own well-being. We do not have a right to medical care. One has no more right to a service than one has a right to go into someone else's garage and steal an automobile. So the definition of ``rights'' has been abused for 30 years, but the current understanding is that people have a right to services. So I think that is a serious flaw and it has contributed to our problem today. The other serious flaw that we have engaged in now for 30 years is the dictation of contract. For 30 years now under ERISA and tax laws, we have forced upon the American people a medical system where we dictate all the rules and regulations on the contracts; and it causes nothing but harm and confusion. Today's effort is trying to clear this up; and, unfortunately, it is not going to do much good.

Mr. PAUL

Mr. PAUL. Mr. Chairman, I appreciate the opportunity to explain why I oppose all versions of the Patients' Bill of Rights. Once again Congress is staging a phony debate over which form of statism to embrace, instead of asking the fundamental question over whether Congress should be interfering in this area at all, much less examine how previous interferences in the health care market created the problems which these proposals claim to address. The proper way to examine health care issues is to apply the same economic and constitutional principles that one would apply to every other issue. As an M.D., I know that when I advise on medical legislation that I may be tempted to allow my emotional experience as a physician to influence my views. But, nevertheless, I am acting in the role as legislator and politician. The M.D. degree grants no wisdom as to the correct solution to our managed-care mess. The most efficient manner to deliver medical services, as it is with all goods and services, is through the free market. Economic principles determine efficiencies of markets, even the health care market, not our emotional experiences dealing with managed care. The fundamental economic principle is that true competition assures that the consumer gets the best deal at the best price possible by putting pressure on the providers. This principle applies equally to health care as it does to other goods and services. However, over the past fifty years, Congress has systematically destroyed the market in health care. HMOs themselves are the result of conscious government policy aimed at correcting distortions in the health care market caused by Congress. The story behind the creation of the HMOs is a classic illustration of how the unintended consequences of government policies provide a justification for further expansions of government power. During the early seventies, Congress embraced HMOs in order to address concerns about rapidly escalating health care costs. However, it was previous Congressional action which caused health care costs to spiral by removing control over the health care dollar from consumers and thus eliminating any incentive for consumers to pay attention to prices when selecting health care. Because the consumer had the incentive to monitor health care prices stripped away and because politicians were unwilling to either give up power by giving individuals control over their health care or take responsibility for rationing care, a third way to control costs had to be created. Thus, the Nixon Administration, working with advocates of nationalized medicine, crafted legislation providing federal subsidies to HMOs and preempting state laws forbidding physicians to sign contracts to deny care to their patients. This legislation also mandated that health plans offer an HMO option in addition to traditional fee-for-service coverage. Federal subsidies, preemption of state law, and mandates on private business hardly sound like the workings of the free market. Instead, HMOs are the result of the same Nixon-era corporatist, big government mindset that produced wage-and-price controls. I am sure many of my colleagues will think it ironic that many of the supporters of Nixon's plan to foist HMOs on the American public are today among the biggest supporters of the ``patients' rights'' legislation. However, this is not really surprising because both the legislation creating HMOs and the Patients' Bill of Rights reflect the belief that individuals are incapable of providing for their own health care needs and therefore government must control health care. The only real difference between our system of medicine and the Canadian ``single payer'' system is that in America, Congress contracted out the job of rationing health care resources to the HMOs. No one can take a back seat to me regarding the disdain I hold for the HMO's role in managed care. This entire unnecessary level of corporatism that rakes off profits and undermines care is a creature of government interference in health care. These non-market institutions and government could have only gained control over medical care through a collusion of organized medicine, politicians, and the HMO profiteers in an effort to provide universal health care. No one suggests that we should have universal food, housing, TV, computer and automobile programs; and yet, many of the poor to much better getting these services through the marketplace as prices are driven down through competition. We all should become suspicious when it is declared we need a new Bill of Rights, such as a Taxpayers' Bill of Rights, or now a Patients' Bill of Rights. Why do more Members not ask why the original Bill of Rights is not adequate in protecting all rights and enabling the market to provide all services? In fact, if Congress respected the Constitution we would not even be debating this bill, and we would have never passed any of the special-interest legislation that created and empowered the HMOs in the first place! Mr. Chairman, the legislation before us is flawed not only in its effect but in the very premise that individuals have a federally- enforceable ``right'' to health care. Mixing the concept of rights with the delivery of services is dangerous. The whole notion that patient's ``rights'' can be enhanced by more edicts by the federal government is preposterous. Disregard for constitutional limitations on government, ignorance of the basic principles of economics combined with the power of special interests influencing government policy has brought us this managed- care monster. If we pursue a course of more government management in an effort to balance things, we are destined to make the system much worse. If government mismanagement in an area that the government should not be managing at all is the problem, another level of bureaucracy, no matter how well intended, will not be helpful. The law of unintended consequences will prevail and the principle of government control over providing a service will be further entrenched in the Nation's psyche. The choice in actually is government-provided medical care and its inevitable mismanagement or medical care provided by a market economy. Many members of Congress have convinced themselves that they can support a ``watered-down'' Patients' Bill of Rights which will allow them to appease the supporters of nationalized medicine without creating the negative consequences of the unmodified Patients' Bill of Rights, while even some supporters of the most extreme versions of this legislation say they will oppose any further steps to increase the power of government over health care. These well-intentioned members ignore the economic fact that partial government involvement is not possible. It inevitably leads to total government control. A vote for any version of a Patients' Bill of Rights is a 100 percent endorsement of the principle of government management of the health care system. Those who doubt they are endorsing government control of medicine by voting for a modified Patients' Bill of Rights should consider that even after this legislation is ``watered-down'' it will still give the federal government the power to control the procedures for resolving disputes for every health plan in the country, as well as mandating a laundry list of services that health plans must offer to their patients. The new and improved Patients' Bill of Rights will still drive up the costs of health care, causing many to lose their insurance and lead to yet more cries for government control of health care to address the unintended consequences of this legislation. Of course, the real power over health care will lie with the unelected bureaucrats who will implement and interpret these broad and vague mandates. Federal bureaucrats already have too much power over health care. Today, physicians struggle with over 132,000 pages of Medicare regulations. To put that in perspective, I ask my colleagues to consider that the IRS code is ``mere'' 17,000 pages. Many physicians pay attorneys as much as $7,000 for a compliance plan to guard against mistakes in filing government forms, a wise investment considering even an innocent mistake can result in fines of up to $25,000. In case doctors are not terrorized enough by the federal bureaucracy, HCFA has requested authority to carry guns on their audits! In addition to the Medicare regulations, doctors must contend with FDA regulations (which delay the arrival and raise the costs of new drugs), insurance company paperwork, and the increasing criminalization of medicine through legislation such as the Health Insurance Portability Act (HIPPA) and the medical privacy regulations which could criminalize conversations between doctors and nurses. Instead of this phony argument between those who believe their form of nationalized medicine is best for patients and those whose only objection to nationalized medicine is its effect on entrenched corporate interests, we ought to consider getting rid of the laws that created this medical management crisis. The ERISA law requiring businesses to provide particular programs for their employees should be repealed. The tax codes should give equal tax treatment to everyone whether working for a large corporation, small business, or self employed. Standards should be set by insurance companies, doctors, patients, and HMOs working out differences through voluntary contracts. For years it was known that some insurance policies excluded certain care. This was known up front and was considered an acceptable practice since it allowed certain patients to receive discounts. The federal government should defer to state governments to deal with the litigation crisis and the need for contract legislation between patients and medical providers. Health care providers should be free to combine their efforts to negotiate effectively with HMOs and insurance companies without running afoul of federal anti-trust laws--or being subject to regulation by the National Labor Relations Board (NLRB). Of course, in a truly free market, HMOs and pre-paid care could and would exist--there would be no prohibition against it. The Kaiser system was not exactly a creature of the government as it the current unnatural HMO-government-created chaos we have today. Congress should also remove all federally-imposed roadblocks to making pharmaceuticals available to physicians and patients. Government regulations are a major reason why many Americans find it difficult to afford prescription medicines. It is time to end the days when Americans suffer because the Food and Drug Administration (FDA) prevented them from getting access to medicines that where available and affordable in other parts of the world! While none of the proposed ``Patients' Bill of Rights'' addresses the root cause of the problems in our nation's health care system, the amendment offered by the gentleman from Kentucky does expend individual control over health care by making Medical Savings Accounts (MSAs) available to everyone. This is the most important thing Congress can do to get market forces operating immediately and improve health care. When MSAs make patient motivation to save and shop a major force to reduce cost, physicians would once again negotiate fees downward with patients--unlike today where the reimbursement is never too high and hospital and MD bills are always at the maximum levels allowed. MSAs would help satisfy the American's people's desire to control their own health care and provide incentives for consumers to take more responsibility for their care. There is nothing wrong with charity hospitals and possibly the churches once again providing care for the needy rather than through government paid programs which only maximizes costs. States can continue to introduce competition by allowing various trained individuals to provide the services that once were only provided by licensed MDs. We don't have to continue down the path of socialized medical care, especially in America where free markets have provided so much for so many. In conclusion, Mr. Chairman, I urge my colleagues to reject the phony Patients' Bill of Rights which will only increase the power of the federal government, cause more Americans to lose their health care or receive substandard care, and thus set the groundwork for the next round of federal intervention. Instead. I ask my colleagues to embrace an agenda of returning control over health care to the American people by putting control over the health care dollar back into the hands of the individual and repealing those laws and regulations which distort the health care market. We should have more faith in freedom and more fear of the politicians and bureaucrats who think all can be made well by simply passing a Patients' Bill of Rights.

Mr. PAUL

Mr. PAUL. Mr. Speaker, today we're being asked to choose between two options dealing with the controversies surrounding cloning and stem cell research. As an obstetrician gynecologist with 30 years of experience with strong pro-life convictions I find this debate regarding stem cell research and human cloning off-track, dangerous, and missing some very important points. This debate is one of the most profound ethical issues of all times. It has moral, religious, legal, and ethical overtones. However, this debate is as much about process as it is the problem we are trying to solve. This dilemma demonstrates so clearly why difficult problems like this are made much more complex when we accept the notion that a powerful centralized state should provide the solution, while assuming it can be done precisely and without offending either side, which is a virtual impossibility. Centralized governments' solutions inevitably compound the problem we're trying to solve. The solution is always found to be offensive to those on the losing side of the debate. It requires that the loser contribute through tax payments to implement the particular program and ignores the unintended consequences that arise. Mistakes are nationalized when we depend on Presidential orders or a new federal law. The assumption that either one is capable of quickly resolving complex issues is unfounded. We are now obsessed with finding a quick fix for this difficult problem. Since federal funding has already been used to promote much of the research that has inspired cloning technology, no one can be sure that voluntary funds would have been spent in the same manner. There are many shortcomings of cloning and I predict there are more to come. Private funds may well have flowed much more slowly into this research than when the government/taxpayer does the funding. The notion that one person, i.e., the President, by issuing a Presidential order can instantly stop or start major research is frightening. Likewise, the U.S. Congress is no more likely to do the right thing than the President by rushing to pass a new federal law. Political wisdom in dealing with highly charged and emotional issues is not likely to be found. The idea that the taxpayer must fund controversial decisions, whether it be stem cell research, or performing abortion overseas, I find repugnant. The original concept of the republic was much more suited to sort out the pros and cons of such a difficult issue. It did so with the issue of capital punishment. It did so, until 1973, with the issue of abortion. As with many other issues it has done the same but now unfortunately, most difficult problems are nationalized. Decentralized decision making and privatized funding would have gone a long way in preventing the highly charged emotional debate going on today regarding cloning and stem cell research. There is danger in a blanket national prohibition of some questionable research in an effort to protect what is perceived as legitimate research. Too often there are unintended consequences. National legalization of cloning and financing discredits life and insults those who are forced to pay. Even a national law prohibiting cloning legitimizes a national approach that can later be used to undermine this original intent. This national approach rules out states from passing any meaningful legislation and regulation on these issues. There are some medical questions not yet resolved and careless legislation may impede legitimate research and use of fetal tissue. For instance, should a spontaneously aborted fetus, non-viable, not be used for stem cell research or organ transplant? Should a live fetus from an ectopic pregnancy removed and generally discarded not be used in research? How is a spontaneous abortion of an embryo or fetus different from an embryo conceived in a dish? Being pro-life and pro-research makes the question profound and I might say best not answered by political demagogues, executive orders or emotional hype. How do problems like this get resolved in a free society where government power is strictly limited and kept local? Not easily, and not perfectly, but I am confident it would be much better than through centralized and arbitrary authority initiated by politicians responding to emotional arguments. For a free society to function, the moral standards of the people are crucial. Personal morality, local laws, and medical ethics should prevail in dealing with a subject such as this. This law, the government, the bureaucrats, the politicians can't make the people more moral in making these judgments. Laws inevitably reflect the morality or immorality of the people. The Supreme Court did not usher in the 60s revolution that undermined the respect for all human life and liberty. Instead, the people's attitude of the 60s led to the Supreme Court Roe vs. Wade ruling in 1973 and contributed to a steady erosion of personal liberty. If a centralized government is incapable of doing the right thing, what happens when the people embrace immorality and offer no voluntary ethical approach to difficult questions such as cloning? The government then takes over and predictably makes things much worse. The government cannot instill morality in the people. An apathetic and immoral society inspires centralized, rigid answers while the many consequences to come are ignored. Unfortunately, once centralized government takes charge, the real victim becomes personal liberty. What can be done? The first step Congress should take is to stop all funding of research for cloning and other controversial issues. Obviously all research in a free society should be done privately, thus preventing this type of problem. If this policy were to be followed, instead of less funding being available for research, there would actually be more. Second, the President should issue no Executive Order because under the Constitution he does not have the authority either to promote or stop any particular research nor does the Congress. And third, there should be no sacrifice of life. Local law officials are responsible for protecting life or should not participate in its destruction. We should continue the ethical debate and hope that the medical leaders would voluntarily do the self-policing that is required in a moral society. Local laws, under the Constitution, could be written and the reasonable ones could then set the standard for the rest of the nation. This problem regarding cloning and stem cell research has been made much worse by the federal government involved, both by the pro and con forces in dealing with the federal government's involvement in embryonic research. The problem may be that a moral society does not exist, rather than a lack of federal laws or federal police. We need no more federal mandates to deal with difficult issues that for the most part were made worse by previous government mandates. If the problem is that our society lacks moral standards and governments can't impose moral standards, hardly will this effort to write more laws solve this perplexing and intriguing question regarding the cloning of a human being and stem cell research. Neither option offered today regarding cloning provides a satisfactory solution. Unfortunately, the real issue is being ignored.

Mr. PAUL

Mr. PAUL. Mr. Speaker, I commend to the attention of members an editorial appearing in the Wall Street Journal which is headlined ``In Praise of an Economic Revolutionary.'' The column is authored by Mr. Bob McTeer, president and CEO of the Federal Reserve Bank of Dallas. In his article, Mr. McTeer highlights the life of Frederic Bastiat, a member of the French Chamber of Deputies during the 19th century who made great contributions to both individual liberty and free markets with clear, simple and humorous observations and arguments. Bastiat was a pioneer in the field of economics who fought against the protectionist fallacies and absurdities that persisted in his day and indeed continue to haunt us today. Bastiat understood well what few in Congress have come to grasp--that it is absurd to favor producers over consumers and sellers over buyers. This is because producers and sellers benefit from scarcity and high prices while consumers benefit from abundance and low prices. As a consequence, when government policies favor producers, the citizens of the United States are faced with scarcity and unnecessarily high prices. In essence, the economic pie is made smaller for all. As members of Congress we should note, as Bastiat did, that because we have limited resources and unlimited wants, it is unwise to create inefficiencies for the purpose of creating or protecting jobs. As Mr. McTeer writes, ``Progress comes from reducing the work needed to produce, not increasing it.'' By supporting protectionist policies that tend to create stagnation and hurt consumers, some members stand in the way of economic progress that would benefit all. Yet we should reject these policies and in the tradition of Bastiat do away with the absurd notice that inefficiencies are good for this country and its people. Mr. Speaker, again I commend Mr. McTeer's column and encourage the recognition of the economic revolutionary, Frederic Bastiat. In Praise of an Economic Revolutionary (By Bob McTeer) ``The state is the great fictitious entity by which everyone seeks to live at the expense of everyone else,''-- Frederic Bastiat (1801-1850) Claude Frederic Bastiat was born in Bayonne, in the southwest of France, 200 years ago last Friday. This week, I kicked off a conference in nearby Dax, France, celebrating Bastiat's contributions to individual liberty and free markets. The whole world should be celebrating the birthday of this pioneer of free-market capitalism. Bastiat's output was prodigious, especially in the last five years of his life. Through his writing and speeches, and as a member of the French Chamber of Deputies, Bastiat fought valiantly against the protectionism and socialism of his time. He proselytized for free trade, free markets and individual liberty. His weapons were wit and satire; his method was the reductio ad absurdum. More than any other person before or since, he exposed economic fallacies with a clarity, simplicity and humor that left opponents with no place to hide. The most famous example of Bastiat's satire was his petition to the French parliament on behalf of candlemakers and related industries. He was seeking relief from ``ruinous competition of a foreign rival who works under conditions so far superior to our own for the production of light that he is flooding the domestic market with it at an incredibly low price.'' The foreign rival was the sun. The relief sought was a law requiring the closing of all blinds to shut out the sunlight and stimulate the domestic candle industry. Despite the publication of Adam Smith's ``The Wealth of Nations'' decades earlier, Bastiat was still fighting the mercantilist view of exports as good and imports as bad. He pointed out that under this view, the ideal situation would be for a ship loaded with exports to sink at sea. One nation gets the benefit of exporting and no nation has to bear the burden of importing. Bastiat once saw an editorial proposing a Bordeaux stop on the railroad from Paris to Spain to stimulate local business. He wondered, why only Bordeaux? Why not have a stop in every single town along the way--a never-ending series of breaks-- so the prosperity could be enjoyed by all? They could call it a ``negative railroad.'' This point is true even today. Trade with Mexico has boomed since the passage of the North American Free Trade Agreement and so has truck traffic across the Rio Grande. Luckily we have bridges to facilitate the crossing. But while the bridges were made for crossing, the hundreds of warehouses near the border were not. They're for storing and waiting-- where Mexican truckers are required to hand over their cargo to domestic carriers. Bastiat had his ``negative railroads.'' We have ``negative bridges.'' Then there's Bastiat's broken-window fallacy. It seems someone broke a window. It's unfortunate, but there's a silver lining. Money spent to repair the window will being new business to the repairman. He, in turn, will spend his higher income and generate more business for others. The broken window could ultimately create a boom. Wait a minute, Bastiat cautioned. That's based only on what is seen. You must also consider what is not seen--what does not happen. What is not seen is how the money would have been spent if the window had not been broken. The broken window didn't increase spending; it diverted spending. Obvious? Sure, but we fall for a version of the broken- window fallacy every time we evaluate the impact of a government program without considering what taxpayers would have done with the money instead. Some people even judge monetary policy by what happens, without considering what might have happened. Most economic myths give way to Bastiat's distinction between the seen and the unseen. Related concepts include half truths and whole truths, intended and unintended consequences, the short run and long run and partial effects and total effects. Henry Hazlitt expanded on these themes in his wonderful book, ``Economics in One Lesson.'' If you don't have time to read Bastiat's collected works, try Hazlitt's book. Bastiat called attention to the absurdities that come from favoring producers over consumers and sellers over buyers. Producers benefit from scarcity and high prices while consumers benefit from abundance and low prices. Government policies favoring producers, therefore, tend to favor scarcity over abundance. They shrink the pie. Bastiat stressed that because we have limited resources and unlimited wants, it's foolish to contrive inefficiencies just to create jobs. Progress comes from reducing the work needed to produce, not increasing it. Yet, a day doesn't pass that we don't hear of some proposal to ``create jobs,'' as if there's no work to be done otherwise. If it's jobs we want, let's just replace all the bulldozers with shovels. If we want even more work, replace shovels with spoons. Bastiat suggested working with only our left hands. I was cautioned that most of the participants in the Bastiat conference would probably be from other countries, since Bastiat's free-market views aren't highly regarded in France. That reminded me of my visit to Adam Smith's grave in Scotland a couple of years ago. I went into a souvenir shop about a block away and asked what kind of Adam Smith souvenirs they had. They not only didn't have any, they'd never even had a request for one before. What a shame!

Mr. PAUL

Mr. PAUL. Mr. Speaker, encouraged in part by a recent resolution passed by the Texas State Legislature, I rise again this Congress to introduce my bill to lift the United States Embargo on Cuba. On June 29, 2001, the Texas state legislature adopted a resolution calling for an end to U.S. economic sanctions against Cuba. Lawmakers emphasized the failure of sanctions to remove Castro from power, and the unwillingness of other nations to respect the embargo. One Texas Representative stated: ``We have a lot of rice and agricultural products, as well as high- tech products, that would be much cheaper for Cuba to purchase from Texas. All that could come through the ports of Houston and Corpus Christi.'' I wholeheartedly support this resolution, and I have introduced similar federal legislation in past years to lift all trade, travel, and telecommunications restrictions with Cuba. I only wish Congress understood the simple wisdom expressed in Austin, so that we could end the harmful and ineffective trade sanctions that serve no national purpose. I oppose economic sanctions for two very simple reasons. First, they don't work as effective foreign policy. Time after time, from Cuba to China to Iraq, we have failed to unseat despotic leaders by refusing to trade with the people of those nations. If anything, the anti-American sentiment aroused by sanctions often strengthens the popularity of such leaders, who use America as a convenient scapegoat to divert attention from their own tyranny. History clearly shows that free and open trade does far more to liberalize oppressive governments than trade wars. Economic freedom and political freedom are inextricably linked--when people get a taste of goods and information from abroad, they are less likely to tolerate a closed society at home. So while sanctions may serve our patriotic fervor, they mostly harm innocent citizens and do nothing to displace the governments we claim as enemies. Second, sanctions simply hurt American industries, particularly agriculture. Every market we close to our nation's farmers is a market exploited by foreign farmers. China, Russia, the middle east, North Korea, and Cuba all represent huge markets for our farm products, yet many in Congress favor current or proposed trade restrictions that prevent our farmers from selling to the billions of people in these ares. The department of Agriculture estimates that Iraq alone represents a $1 billion market for American farm goods. Given our status as one of the world's largest agricultural producers, why would we ever choose to restrict our exports? The only beneficiaries of our sanctions policies are our foreign competitors. Still, support for sanctions continues in Congress. The House International Relations committee last week considered legislation that will extend existing economic sanctions against Iran and Libya for another 5 years. While I certainly oppose this legislation, I did agree with the I certainly understand the emotional feelings many Americans have toward nations such as Iran, Iraq, Libya, and Cuba. Yet we must not let our emotions overwhelm our judgment in foreign policy matters, because ultimately human lives are at stake. For example, 10 years of trade sanctions against Iraq, not to mention aggressive air patrols and even bombings, have not ended Saddam Hussein's rule. If anything, the political situation has worsened, while the threat to Kuwait remains. The sanctions have, however, created suffering due to critical shortages of food and medicine among the mostly poor inhabitants of Iraq. So while the economic benefits of trade are an important argument against sanctions, we must also consider the humanitarian argument. Our sanctions policies undermine America's position as a humane nation, bolstering the common criticism that we are a bully with no respect for people outside our borders. Economic common sense, self-interested foreign policy goals, and humanitarian ideals all point to the same conclusion: Congress should work to end economic sanctions against all nations immediately. The legislation I introduce today is representative of true free trade in that while it opens trade, it prohibits the U.S. Taxpayer from being compelled to subsidize the United States government, the Cuban government or individuals or entities that choose to trade with Cuban citizens. I submit for inclusion in the record, a copy of the Sense of Congress Resolution passed in Austin in late June. Senate Concurrent Resolution No. 54 Whereas, The relationship between the United States and Cuba has long been marked by tension and confrontation; further heightening this hostility is the 40-year-old United States trade embargo against the island nation that remains the longest-standing embargo in modern history; and Whereas, Cuba imports nearly a billion dollars' worth of food every year, including approximately 1,100,000 tons of wheat, 420,000 tons of rice, 37,000 tons of poultry, and 60,000 tons of dairy products; these amounts are expected to grow significantly in coming years as Cuba slowly recovers from the severe economic recession it has endured following the withdrawal of subsidies from the former Soviet Union in the last decade; and Whereas, Agriculture is the second-largest industry in Texas, and this state ranks among the top five states in overall value of agricultural exports at more than $3 billion annually; thus, Texas is ideally positioned to benefit from the market opportunities that free trade with Cuba would provide; rather than depriving Cuba of agricultural products, the United States embargo succeeds only in driving sales to competitors in other countries that have no such restrictions; and Whereas, In recent years, Cuba has developed important pharmaceutical products, namely, a new meningitis B vaccine that has virtually eliminated the disease in Cuba; such products have the potential to protect Americans against diseases that continue to threaten large populations around the world; and Whereas, Cuba's potential oil reserves have attracted the interest of numerous other countries who have been helping Cuba develop its existing wells and search for new reserves; Cuba's oil output has increased more than 400 percent over the last decade; and Whereas, The United States' trade, financial, and travel restrictions against Cuba hinder Texas' export of agricultural and food products, its ability to import critical energy products, the treatment of illnesses experienced by Texans, and the right of Texans to travel freely; now, therefore, be it Resolved, That the 77th Legislature of the State of Texas hereby respectfully urge the Congress of the United States to consider the removal of trade, financial, and travel restrictions relating to Cuba; and, be it further Resolved, That the Texas secretary of state forward official copies of this resolution to the president of the United States, to the speaker of the house of representatives and the president of the senate of the United States Congress, and to all the members of the Texas delegation to the congress with the request that this resolution be officially entered in the Congressional Record as a memorial to the congress of the United States of America.

Mr. PAUL

Mr. PAUL. The gentleman argues for an increase. But is it not true that the United States has had a healthier economy in the last 10 years than most of our competitors, indicating that it probably has not done us that much harm by not doing the same things that other countries do by penalizing their people with high taxation and making these subsidies?

Mr. PAUL. Mr. Chairman, I demand a recorded vote.

Mr. PAUL. If the gentleman will continue to yield, Mr. Chairman, why is it assumed that there would be no export funds available to export goods if we did not subsidize the exports?

Mr. PAUL. I thank the gentleman for yielding, Mr. Chairman. The gentleman makes the point that we fund in our Export-Import Bank less compared to other nations. That possibly is true.

Mr. PAUL

Mr. PAUL. Mr. Speaker, there are a number of problems with this move to extend the Iran/Libya Sanctions Act. First, the underlying Act places way too much authority both to make determinations and to grant waivers, in the hands of the President and the Executive Branch. As such, it is yet another unconstitutional delegation of authority which we ought not extend. Moreover, as the Act applies to Libya, the authority upon which the bill depends is a resolution of the United Nations. So, any member who is concerned with UN power should vote against this extension. Furthermore, the sanctions are being extended from a period of five years to ten years. If the original five year sanction period has not been effective in allaying the fears about these governments why do we believe an extra five years will be effective? In fact, few companies have actually been sanctioned under this Act, and to the best of my knowledge no oil companies have been so sanctioned. Still, the sanctions in the Act are not against these nations but are actually directed at ``persons'' engaged in certain business and investments in these countries. There are already Executive Orders making it illegal for US companies to undertake these activities in these sanctioned countries, so this Act applies to companies in other countries, mostly our allied countries, almost all of whom oppose and resent this legislation and have threatened to take the kinds of retaliatory action that could lead to an all out trade war. In fact, the former National Security Advisor Brent Scrowcroft recently pointed out how these sanctions have had a significant adverse impact upon our Turkish allies. Mr. Speaker, I support those portions of this bill designated to prohibit US financing through government vehicles such as the Export- Import Bank. I also have no problem with guarding against sales of military technology which could compromise our national security. Still, on a whole, this bill is just another plank in the failed sanctions regime from which we ought to loosen ourselves. The Bush Administration would prefer this legislation to expire and, failing that, they prefer taking a first step by making the extension last for a shorter period. In this I believe the Administration has taken the correct position. For one thing, there have been moves, particularly in Iran, to liberalize. We harm these attempts by maintaining a sanctions regime. I also have to point out the inconsistency in our policy. Why would we sanction Iran but not Sudan, and why would we sanction Libya but not Syria? I hear claims related to our national security but surely these are made in jest. We subsidize business with the People's Republic of China but sanction Europeans from helping to build oil refineries in Iran. There has been a real concern in our country regarding the price of gasoline. Since these sanctions are directly aimed at preventing the development of petroleum resources in these countries, this bill will DIRECTLY RESULT IN AMERICANS HAVING TO PAY A HIGHER PRICE AT THE GASOLINE PUMP. These sanctions HURT AMERICANS. British Petroleum and others have refused to provide significant investment for petroleum extraction in Iran because of the uncertainty this legislation helps to produce. The tiny nation of Qatar has as much petroleum related investment as does Iran since this legislation went into effect. Again, this reduces supply and raises prices at the gas pump. Will the members of this body return to their district and tell voters ``I just voted to further restrict petroleum supply and keep gas prices high''? I doubt that. Mr. Speaker, I am fully aware of the legislative realities as regards this legislation and the powerful interests that want it extended. However, it is not just myself and the Bush Administration suggesting this policy is flawed. The Atlantic Council is a prestigious group co- chaired by Lee Hamilton, James Schlesinger and Brent Scowcroft that has suggested in a recent study that we ought to end sanctions upon Iran. Mr. Speaker, I believe the time has come for us to consider the U.S. interest and the benefits of friendly commerce with all nations. We are particularly ill-advised in passing this legislation and hamstringing the new Administration at this time. I must oppose any attempt to extend this Act and support any amendment that would reduce the sanction period it contemplates.