Ron Paul

Mr. PAUL

Mr. PAUL. Mr. Speaker, Lake Texana (The Palmetto Bend Project), is located in my congressional district near Edna in the Texas Gulf Coast area about midway between Corpus Christi and Houston. Lake Texana supplies roughly 75,000 acre/feet per year of municipal and industrial water to a large multicounty area of Texas. The Lake Texana water is directly responsible for creating over 3,000 jobs in the cities of Edna and Victoria, Texas and water sales from the project make it financially self-sufficient. S. 1474 merely facilitates the early payment of the project's construction costs (discounted, of course, by the amount of interest no longer due as a consequence of early payment) and transfers title of the Palmetto Bend Project to the Texas state authorities. Both the Lavaca Navidad River Authority and Texas Water Development Board concur that an early buy-out and title transfer is extremely beneficial to the economic and operational well-being of the project as well as the Lake Texana water users. The Texas Legislature and Governor George W. Bush have both formally supported the early payment and title transfer. This bill will save Lake Texana water users as much as $1 million per year as well as provide an immediate infusion of millions of dollars to the national treasury. Additionally, all liability associated with this water project are, under my legislation, assumed by the state of Texas thus further relieving the financial burden of the federal government. Texas has already demonstrated sound management of this resource. Recreational use of the lake has been well-provided under Texas state management to include provision of a marina, pavilion, playground, and boating docks, all funded without federal money. A woodland bird sanctuary and wildlife viewing area will also be established upon transfer with the assistance of the Texas Parks and Wildlife Department and several environmental organizations. My thanks go to members and staff of both the Resources committee and the subcommittee on Energy and Water for their continued assistance with this bill as well as Senator Hutchison and her staff for working with me to move our bill in the Senate. Mr. Speaker, I respectfully request my colleague's support for S. 1474 as passed by the Senate.

Mr. PAUL

Mr. PAUL. Mr. Speaker, I am pleased to take this opportunity to express my opinion on the Older Americans Act Reauthorization (H.R. 782) and explain why I must vote against this bill. Of course, I support efforts to ensure America's senior citizens have access to employment, nutritional and other services; however the federal government is neither constitutionally authorized nor competent to provide such services. Under the tenth amendment, the federal government is forbidden from interfering in areas such as providing employment and nutritional services to any group of citizens. Thus, when the federal government uses taxpayer funds to support these services, it is violating the constitution. In a constitutional republic, good intentions are no excuse for constitutional carelessness. Furthermore, Mr. Speaker, by involving itself in these areas, the federal government has politicized the offering of these services as well as assured inefficiencies in their delivery--inefficiencies that would not be present if the federal government respected its constitutional limits and allowed states, local communities and private citizens to provide these vital services to seniors. For example, one of the most contentious areas of this bill is the funding that goes to private organization to provide employment services. Many of these organizations are involved in partisan politics, and, because money is fungible, the federal grants to these organizations make taxpayers de facto underwriters of their political activities. As Thomas Jefferson said: ``To compel a man to furnish funds for the propagation of ideas he disbelieves and abhors is both sinful and tyrannical.'' This ``sinful and tyrannical'' action is inevitable whenever Congress exceeds its constitutional limitations and abuses the taxing power by forcing citizens to support the charitable activities of congressionally-favored organizations. One reason for this is that federal funding encourages these organizations to become involved in lobbying in order to gain more federal support. These organizations may even form alliances with other advocacy groups in order to build greater support for their cause. When social services are nationalized, there is inevitably waste and inefficiency in the distribution of the services. This is because when the government administers social services the lion's share of those services are provided to those with the most effective lobby or those whose Congressional representative is able to exercise the most clout at appropriations time. While I applaud the efforts of certain of my colleagues on the Education and Workforce Committee to direct resources to where they are truly needed, particularly Mr. Barrett's efforts to bring more resources to rural areas, the politicization of social services will inevitably result in some areas receiving inadequate funding to meet their demand for those services. I have little doubt that if these programs were restored to the private sector those areas with the greatest concentration of needy seniors would receive priority over those areas with the most powerful lobby. There are ways to ensure that seniors have opportunities for productive lives without violating the constitution and politicizing charity. One way is to repeal the social security earnings limit, which punishes seniors who continue to work in the private sector. Another way is through generous tax credits and deductions for taxpayers who support charitable organization designed to provide services to individuals. Finally, the best way to aide the nation's seniors, and those who are about to be seniors, is to stop raiding the nation's social security system to finance other unconstitutional programs. This is why the first piece of legislation I introduced this year was The Social Security Preservation Act (H.R. 219), which would ensure that social security monies would be spent on social security. I was also a cosponsor of the legislation to end the earnings limit, which passed the House of Representatives this year. I am also cosponsoring several pieces of legislation to allow people to use more of their own resources to help the needy by expanding the charitable tax deduction. Mr. Speaker, several years ago, when people still recognized their moral duty to voluntarily help their fellow humans rather than expect the government to coerce their fellow citizens to provide assistance through the welfare state, my parents were involved in a local Meals- on-Wheels program run by their church. I remember how upset they were when their local program was forced to conform to federal standards or close its program because Congress had decided to take control of delivering hot food to the elderly. It is time that this Congress return to the wisdom of the drafters of the Constitution and return responsibility for providing services to the nation's seniors to states, communities, churches, and other private organizations who can provide those services much more effectively and efficiently than the federal government.

Mr. PAUL

Mr. PAUL. Madam Speaker, I am pleased to support HR 3218, the Social Security Number Confidentiality Act. This bill takes a step toward protecting the integrity and security of the Social Security number by ensuring that window envelopes used by the Federal Government do not display an individual's Social Security number. HR 3218 will help protect millions of Americans from the devastating crime of identity theft, which is a growing problem in my district and throughout the country. This bill will be partially helpful to senior citizens who rely on Social Security. These seniors could lose a lifetime's worth of savings if a criminal obtained their Social Security number. We owe it to America's senior citizens to make sure that they are not exposed to the risk of identity theft as a price of receiving their Social Security benefits. While this bill does represent a good step toward protecting privacy, I would remind my colleagues that much more needs to be done to ensure the Social Security number is not used as means of facilitating identity crimes. The increasing prevalence of identity theft is directly related to the use of the Social Security number as a uniform identifier. For all intents and purposes, the Social Security number is already a national identification number. Today, in the majority of states, no American can get a job, open a bank account, get a drivers' license, or receive a birth certificate for one's child without presenting their Social Security number. So widespread has the use of the Social Security number become that a member of my staff had to produce a Social Security number in order to get a fishing license! Unscrupulous people have found ways to exploit this system and steal another's identity--the ubiquity of the Social Security number paved the way for these very predictable abuses and crimes. Congress must undo the tremendous injury done to the people's privacy and security by the federal government's various mandates which transformed the Social Security number into a universal identifier. In order to stop the disturbing trend toward the use of the Social Security number as a uniform ID I have introduced the Freedom and Privacy Restoration Act (HR 220), which forbids the use of the Social Security number for purposes not related to Social Security. The Freedom and Privacy Restoration Act also contains a blanket prohibition on the use of identifiers to ``investigate, monitor, oversee, or otherwise regulate'' American citizens. Mr. Speaker, prohibiting the Federal Government from using standard identifiers will help protect Americans from both private and public sector criminals. While much of the discussion of identity theft and related threats to privacy has concerned private sector criminals, the major threat to privacy lies in the power uniform identifiers give to government officials. I am sure I need not remind my colleagues of the sad history of government officials of both parties using personal information contained in IRS or FBI files against their political enemies, or of the cases of government officials rummaging through the confidential files of celebrities and/or their personal acquaintances, or of the Medicare clerk who sold confidential data about Medicare patients to a Health Maintenance Organization. After considering these cases, one cannot help but shudder at the potential for abuse if an unscrupulous government official is able to access one's complete medical, credit, and employment history by simply typing the citizens' ``uniform identifier'' into a database. In conclusion, Madam Speaker, I enthusiastically join in supporting HR 3218 which will help protect millions of senior citizens and other Americans from identity theft by strengthening the confidentiality of the Social Security number. I also urge my colleagues to protect all Americans from the threat of national identifiers by supporting my Freedom and Privacy Restoration Act.

Mr. PAUL

Mr. PAUL. Mr. Speaker, I recently had the pleasure of hearing remarks made by our former House colleague, Bob Bauman of Maryland, at a meeting of the Eris Society in Colorado. Since his talk centered on banking, financial and related privacy issues pending before the Congress, I want to share his view with the House as an informed statement of the threats to financial freedom posed by the Clinton administration's policies. Mr. Bauman, the author of several books on offshore financial topics, serves as legal counsel to The Sovereign Society (http:// www.sovereignsaociety.com), an international group of citizens concerned with the government encroachment on financial freedom. Remarks of Robert E. Bauman, Eris Conference, Durango, Colorado, August 12, 2000. The New Imperialism: The Attack on World Tax Havens I take as my theme two quotations, one from the Gospel of St. Matthew, 20:15--``Do not I have the right to do what I want with my own money?'' The second is from Mayer Amschel Rothchild (1743-1812), founder of the famous banking dynasty, the House of Rothchild, who said: ``Give me control over a nation's currency and I care not who makes its laws.'' Both quotes have relevance to what I have to say. Wealth Is Suspect If you are fortunate enough to fall into the estimated group of six million millionaires worldwide now in existence, a number noted in a study by Merrill Lynch last year, you automatically may be a criminal suspect. I say ``suspect'' because Citibank views these wealthy people, who control approximately 21 trillion-six hundred billion dollars, as potential financial criminals simply because of their wealth. Citibank announced last year that their 40,000 private banking clients, each of whom had to prove a personal net worth of $3 million in order to qualify for the bank's services, are watched every minute of every day to see if they may be engaged in money laundering or other financial crimes. I am certain other banks do as well. The constant surveillance is accomplished, as is most privacy invasion these days, by a special banking computer software program called ``America's Software'' which allows every transaction in any account to be watched constantly. It produces a daily record for bank officials, who now have certain obligations imposed by US law that require the reporting of ``suspicious activities'' to federal agents. Transfers of large amounts of cash or other unusual account activity rings alarm bells and results in an investigation not revealed to the ``suspect'' banking client under penalty of law. We can conclude from this Draconian arrangement, for one thing, that a person of great wealth who establishes a private banking relationship with a major bank now is presumed to be a It's Official: Offshore Means Crime I was at a conference on April 22, 1999 in Miami sponsored by the respected publication, Money Laundering Alert. Lester Joseph, Assistant Chief of Asset Forfeiture and Money Laundering for the Criminal Division of the U.S. Department of Justice, said that the U.S. Government officially views any offshore financial activity by US persons--any offshore financial activity--especially the use of tax havens, as potential criminal money laundering activity. Now, it's quite obvious that financial activities in which a person engages when wealth is moved offshore for asset protection, for broader investment potential, for any number of legitimate reasons, for possible tax savings, any of these moves, are innocent in themselves. Former Secretary of the US Treasury, Robert Rubin, admitted in congressional testimony last year, it is the intention behind these innocent financial moves that government agents want to police for possible criminal investigation and prosecution. So now we have the government money police targeting normal financial activities that until recently have been perfectly legal, simply because a person decides in his own best interests, to go offshore. We all know that in the US, African-American, Latino, Asian-American and other racial minorities have been unfairly subject to police ``profiling.'' Add to that list of ``presumed guilty,'' Americans who engaged in offshore financial activity. I'm not a defender of wealth per se. I wish I had wealth to defend, but I am a defender of freedom. There can be no freedom, personal or otherwise, without wealth, without the right to own and use one's own property as one see fit. Remove property rights and you have no means to sustain life for yourself or your family. But now the acquisition and accumulation of productive wealth has become officially suspect in America. War of Drugs=War on Wealth For the last 20 years the policies adopted by the United States and allied governments have constituted a stealth war against wealth and against financial privacy. While the free flow of capital is extolled as appropriate and essential, the governments of major nations have turned upside down the traditional role of banks and banking. As a child I was made to believe that the people you dealt with at your bank and other financial institutions were fiduciaries to whom you could entrust your money. Now we have what I call the ``Nazification'' of the financial system, not only in America but worldwide. I don't use that term lightly. As a matter of historic fact, the civil forfeiture laws in this country mirror in many major respects the Nazi forfeiture laws that were used to confiscate the property of the Jews. I am a member of the board of directors of Forfeiture Endangers American The genesis of this ``wealth=crime'' policy can be found in that infamous political and moral failure, the so-called ``war on drugs.'' One of the primary weapons of this ill- begotten war has been civil forfeiture, where police seize cash and property based on rumor or hearsay. In 80% of the cases, the owner is never charged with any crime, but usually the police keep the loot. Many police have long since turned their attention away from drugs, and instead pursue the cash and property they use to lard their budgets. Thankfully, my former colleague, Henry Hyde of Illinois, led the successful legislative battle for some much needed civil forfeiture reform which recently became law. An All-Purposes New ``Crime'' As part of the drug war that progressed and expanded (but is never victorious), the catch all crime of ``money laundering'' was invented: an all purpose federal prosecutors' dream. The anti-money laundering statutes that have grown like a malignancy. Charges of money laundering now routinely are shown in with almost every possible criminal indictment, often as a bargaining chip and/or a means to confiscate the wealth of the accused even before trial. Try hiring a good defense attorney when your bank account has been frozen. Laws enacted under the banner of the war on drugs intentionally have forced bankers to become spies for the federal financial police. The bankers' primary allegiance now is not to customers or clients, but to the government. At the Miami conference, scores of bank officials were instructed how to question clients, watch account activity, and report any ``suspicious activity''. Suspicious activity reports (SARs) are filed by the tens of thousands every month, produce voluminous computer records, encourage potential criminal investigations, allow prosecutors to bully citizens, but in the end very few SARs put criminals in jail. What this success process has produced is the mushrooming of federal prosecutorial staffs, US attorneys budgets, the power and costs of the US Department of Justice and the welfare of the bureaucrats and lawyers who feast at the taxpayers' trough. Offshore As Scape Goat That great economist, Wilhelm Roepke, once wrote: ``It is very easy to awaken resentment against people who not only have money, but also the boldness to send that money abroad in order to protect it against all manner of domestic insecurity. It's vital that people in their means of existence, that is, capital, still have the chance to move about internationally, and when absolutely necessary, to escape the arbitrariness of government policy by means of secret back doors.'' Consider that expressed view in the context of what is known as ``expatriation,'' the human right to acquire a new nationality and renounce one's old citizenship. We, as a nation of immigrants, should cherish that right. In November 1994 Forbes magazine published an infamous article which identified a handful Needed Offshore Asset Protection In truth, there are very legitimate financial reasons for an American citizen to ``go offshore''. These include avoiding exposure to costly domestic litigation and excessive court damage judgements and jury awards, protection of assets, unreasonable SEC restrictions on foreign investments, the availability of more attractive and private offshore bank accounts, life insurance policies and annuities, avoidance of probate and reduction of estate taxes. But Americans who have followed this prudent course now find themselves lumped together with drug lords, tax cheats, dirty money launderers, disease carriers and assorted criminals. What is legal and legitimate is made to look sinister and evil. OECD--FATF World Intimidation Campaign There is a decided international dimension to this domestic U.S. campaign against wealth. Beginning last June, the news media took belated notice of offshore tax havens and their thriving financial centers as a newly discovered international threat. A frenzy of publicity surrounded the serial publication of spurious ``blacklists'' by previously unnoticed international organizations. None of these self- appointed, self-important groups enjoy any legal standing, but they proceeded to announce exactly how the international financial world should conduct its affairs. Those nations in disagreement with the OECD world view were threatened with financial boycotts and unexplained ``sanctions'' to be imposed by June 2001. These organizations include the Paris-based organization for Economic Cooperation and Development (OECD), which loudly denounces what it calls ``harmful tax competition'' is composed of representatives from major high tax nations. An OECD subsidiary is the Financial Action Task Force (FATF), a sort of financial Gestapo that pronounces who is legal and who is not legal in terms of money laundering activity. Yet a third group without no basis in international law calls itself the ``Financial Stability Forum.'' This is a subgroup of the G-7 nations and has taken it upon itself to decide which nations are good or bad in cooperation for capital flows. All of these organizations are self-anointed and don't have any more standing than the International Tennis Association as far as legal capacity to impose their decisions. They are little more than public relations mouthpieces of an international cartel of rich nations trying to suppress tax havens and other nations that have profited from fully legal tax competition. In an obviously co-ordinated effort starting last May, these organizations each issued its own ``blacklist'' of nations it found deficient in various ways. The FSF attached those it claimed were disruptive to international financial activity. FATF issued a list of countries allegedly lax on money laundering. The OECD came out with list of nations engaged in ``unfair tax competition''. It was no coincidence that most of the world's no-tax financial haven nations were on all these phony lists. A small coterie of statist bureaucrats in the financial ministries of the major nations had coordinated their propaganda work well: an uneducated, gullible global news media swallowed this phony story whole. Every one of the wealthy nations that are pushing this attack on tax havens are controlled by high-tax, socialist governments who see a tax and wealth hemorrhage occurring among their citizens. Yes, millions, billions of dollars, pounds and francs are pouring out of high tax nations flowing to offshore tax havens--and for very good reasons. Why would anyone in his right mind continue to pay confiscatory taxes when you can move your financial activity to another nation where you pay no personal or corporate income tax, no estate tax, no capital gains tax? Ignored in this concerted attack on small tax haven nations is the simple fact that under current U.S. and UK tax laws the biggest tax savings for foreigners can be found in Britain and in the United States. The United States is one of the biggest tax havens in the world--but only for non-U.S. persons. And in spite of the known fact that most of the dirty money laundering in the world takes place in London and New York, neither nation is on the FATF money laundering blacklist. All this is really a smoke screen for increased tax collection. Feeling the tax drain, the rich nations want an end to all those factors that make tax haven attractive: They demand that taxes be imposed where there are none, want an end to financial and banking privacy and ``free exchange'' of information, want complete ``transparency'', and want these small nations to become tax collectors for the rich, welfare state nations. In other words, they want tax havens to become just like the profligate major nations. This new cartel of high-tax nations, limping along with their huge, unsustainable welfare state budgets, are engaged in a grotesque rebirth of colonialism and imperialism of a financial nature. They are willing to trample the sovereignty of small nations. In fact, the United Nations last year said national sovereignty must be compromised in order to impose a world financial order of high taxes and no financial privacy. Such a radical demand mocks international law. It makes vassal states out of sovereign nations. This wrong headed approach flies in the face of every development that is producing the new prosperity: the Internet, e-commerce, globalization, cross border investment worldwide. For that reason alone, this effort will fail. Just as the legendary King Canute could not hold back the ocean tides, the rich nations will be swept away in their effort to impose their will on the world.

Mr. PAUL

Mr. PAUL. Mr. Speaker, over the last 3 years to 4 years, I have come to the floor on numerous occasions trying to sound a warning about both our foreign policy and our monetary policy. Today our monetary policy and our foreign policy have clashed. We see now that we face serious problems, not only in the Middle East, but on our financial markets. Yesterday, I talked a bit about what I see as a financial bubble that has developed over the past decade and made the point that a financial bubble can be financed through borrowing money, as well as inflation. A financial bubble is essentially a consequence of inflation. A lot of people talk about inflation being the mere rising of some prices, but that is not the case. Most good economists recognize that inflation is a consequence of monetary policy; as one increases the supply of money, it inflates the currency. This distorts interest rates, and it distorts the markets. Sometimes this goes into goods and services, and other times these excessive funds will go into marketplaces and distort the value of stocks and bonds. I believe this is what has happened for the past 10 years. Mr. Speaker, so in spite of the grand prosperity that we have had for this past decade, I believe it is an illusion in many ways, because we have not paid for it. In a true capitalist society, true wealth comes from hard work and savings. Today, the American people have a negative savings rate, which means that we get our so-called capital from a printing press, because there are no savings and no funds to invest. The Federal Reserve creates these funds to be invested. On a short-term, this seems to benefit everyone. The poor like it because they seem to get welfare benefits from it; and certainly the rich like it, because it motivates and stimulates their businesses; and politicians like it, because it takes care of deficits and it stimulates the economy. The only problem with this is it always ends, and it always ends badly. And this is the reason that we have to meet up with a policy that seems ridiculous. The economy seems to be doing quite well, but the Federal Reserve comes along and says there is a problem with economic growth. Economic growth might cause prices to go up; so, therefore, what we have to do is cut off the economic growth. If you have slower growth, the prices will not go up any longer. They are talking about a symptom and not the cause. The cause is the Federal Reserve. The problem is that the Federal Reserve has been granted authority that is unconstitutional to go and counterfeit money, and until we recognize that and deal with that, we will continue to have financial problems. We have heard that the 1990s was a different decade, it was a new era, economy, exactly what we heard throughout the decade prior to the collapse of the markets in Japan. The markets have now been down more than 50 percent in Japan for more than 10 years, and there is no sign of significant recovery there. Also there were other times in our history when they talked about a new era economy. Let me read a quote: ``With growing optimism, they gave birth to a foolish idea called the New Economic Era. That notion spread over the whole country. We were assured that we were in a new period where the old laws of economics no longer applied.'' Herbert Hoover in his memoirs. It is an illusion to believe that the new paradigm exists. Actually, the computer industry involves 5 percent of the economy; 95 percent is what they called the old economy. I ascribe to old economic laws, because the truth is, we cannot change economic laws. And if inflating a currency distorts the market and the boom leads to the bust, that cannot be repelled. If we are looking towards bad times, it is not because of current policy, it is because of previous policy, the previous policy of the 10 years, the time when we live beyond our means. We say how did we live beyond our means? Where did the money come from? Are we not spending less than Washington? No, we are not spending less in Washington. Are not the deficits a lot less? They are less, but they are not gone. Where did we borrow from? We borrowed from overseas. We have a current account deficit that requires over a billion dollars a day that we borrow from foreigners just to finance our current account deficit. We are now the greatest debtor in the world, and that is a problem. This is why the markets are shaky, and this is why the markets have been going down for 6 months, and this is why in a foreign policy crisis such as we are facing in the Middle East, we will accentuate these problems. Therefore, the foreign policy of military interventionism overseas is something that we should seriously question.

Mr. PAUL

Mr. PAUL. Mr. Speaker, I ask unanimous consent to claim the special order time of the gentleman from Indiana (Mr. Burton).

Mr. PAUL

Mr. PAUL. Mr. Speaker, at a frantic pace we anxiously rush to close down this Congress with excessive legislation while totally ignoring the all-important issue of monetary policy. Congress has certainly reneged on its responsibility in this area. We continue to grant authority to a central bank that designs monetary policy in complete secrecy, inflating the currency at will, thus stealing value from the already existing currency through a dilution effect. The Federal Reserve clings to the silly notion that economic growth causes inflation, thus trying to avoid the blame it deserves. The Federal Reserve then concludes that an economic slowdown is the solution to the problem it created. Those who argue to continue the inflationary process are equally in error. As if the economy were an airplane, the monetary authorities talk about a soft landing with the false hope of painlessly paying for the excesses enjoyed for a decade. It should surprise no one that our financial markets are getting more volatile every day. Inflating a currency and causing artificially low interest rates always leads to malinvestment, overcapacity, excessive debt, speculation, and dangerous trade imbalances. We now live in a world awash in a sea of fiat currencies, with the dollar, the yen, and the Euro leading the way. The inevitable unwinding of the wild speculation, as reflected in the derivatives market, is now beginning. And what do we do here in the Congress? We continue to ignore our constitutional responsibility to maintain a sound dollar. Our monetary policy of the last 10 years has produced the largest financial bubble in all of history, with the good times paid for by borrowing and an illusion of wealth created in a speculative stock market. Our current account deficit, now running over $400 billion per year, and our $1.5 trillion foreign debt, has been instrumental in financing our extravagance. Be assured, the piper will be paid. The markets are clearly reflecting the excesses of the 1990s. Already we hear the pundits arguing over who is to be blamed if the markets crash or a recession hits. Some have given the current President credit for the good times we have enjoyed. If the crash comes, some will place the blame on him as well. If problems hit later, the next President will get the blame. But the truth is our Presidents deserve neither the credit for the good times nor the blame for the bad times. The Federal Reserve, which maintains a monopoly control over the money supply, credit and interest rates, is indeed the culprit and should be held accountable. But the real responsibility falls on the Congress, for it is Congress' neglect that permits the central bank to debase the dollar at will. Destroying the value of a currency is immoral and remains unconstitutional. It should be illegal. And only a responsible Congress can accomplish that. In preparation for the time when we are forced to reform the monetary system, we must immediately begin to consider the problems that befall a nation that permits systematic currency depreciation as a tool to gain short-term economic benefits while ignoring the very dangerous long-term consequences to our liberty and prosperity.

Mr. PAUL

Mr. PAUL. Mr. Speaker, I thank the gentleman from Michigan and the gentleman from Colorado for allowing me the opportunity to express my thoughts on the education reform debate that is sure to consume much of our time in the remaining days of the 106th Congress. For all the sound and fury generated by the argument over education, the truth is that the differences between the congressional leadership and the administration are not significant; both wish to strengthen the unconstitutional system of centralized education. I trust I need not go into the flaws with President Clinton's command-and-control approach to education. However, this Congress has failed to present a true, constitutional alternative to President Clinton's proposal to further nationalize education. It is becoming increasingly clear that the experiment in centralized control of education has failed, and that the best means of improving education is to put parents back in charge. According to a recent Manhattan Institute study of the effects of state policies promoting parental control over education, a minimal increase in parental control boosts students' average SAT verbal score by 21 points and students' SAT math score by 22 points! The Manhattan Institute study also found that increasing parental control of education is the best way to improve student performance on the National Assessment of Education Progress (NAEP) tests. Clearly, the drafters of the Constitution knew what they were doing when they forbade the Federal Government from meddling in education. American children deserve nothing less than the best educational opportunities, not warmed-over versions of the disastrous educational policies of the past. That is why I introduced H.R. 935, the Family Education Freedom Act. This bill would give parents an inflation- adjusted $3,000 per annum tax credit, per child for educational expenses. The credit applies to those in public, private, parochial, or home schooling. This bill creates the largest tax credit for K-12 education in the history of our great Republic and it returns the fundamental principle of a truly free economy to America's education system: what the great economist Ludwig von Mises called ``consumer sovereignty.'' Consumer sovereignty simply means consumers decide who succeeds or fails in the market. Businesses that best satisfy consumer demand will be the most successful. Consumer sovereignty is the means by which the free market maximizes human happiness. Currently, consumers are less than sovereign in the education ``market.'' Funding decisions are increasingly controlled by the federal government. Because ``he who pays the piper calls the tune,'' public, and even private schools, are paying greater attention to the dictates of federal ``educrats'' while ignoring the wishes of the parents to an ever-greater degree. As such, the lack of consumer sovereignty in education is destroying parental control of education and replacing it with state control. Restoring parental control is the key to improving education. Of course, I applaud all efforts which move in the right direction such as the Education Savings Accounts legislation (H.R. 7). President Clinton's college tax credits are also good first steps in the right direction. However, Congress must act boldly--we can ill afford to waste another year without a revolutionary change in our policy. I believe my bill sparks this revolution and I am disappointed that the leadership of this Congress chose to ignore this fundamental reform and instead focused on reauthorizing great society programs and promoting the pseudo-federalism of block grants. One area where this Congress has so far been successful in fighting for a constitutional education policy was in resisting President Clinton's drive for national testing. I do wish to express my support for the provisions banning the development of national testing contained in the Education Appropriations bill, and thank Mr. Goodling for his leadership in this struggle. Certain of my colleagues champion proposals to relieve schools of certain mandates so long as states and localities agree to be held ``accountable'' to the federal government for the quality of their schools. I have supported certain of these proposals because they do provide states and localities the option of escaping certain federal mandates. However, there are a number of both practical and philosophical concerns regarding these proposals. The primary objection to this approach, from a constitutional viewpoint, is embedded in the very mantra of ``accountability'' stressed by the plans' proponents. Talk of accountability begs the question: accountable to whom? Under these type of plans, schools remain accountable to federal bureaucrats and those who develop the state tests upon which a schools' performance is judged. Should the schools not live up to their bureaucratically- determined ``performance goals,'' they will lose their limited freedom from federal mandates. So federal and state bureaucrats will determine if the schools are to be allowed to participate in these programs and bureaucrats will judge whether the states are living up to the standards set in the state's education plan--yet this is supposed to debureaucratize and decentralize education! Even absent the ``accountability'' provisions spending billions of taxpayer dollars on block grants is a poor way of restoring control over education to local educators and parents. Some members claim that the expenditure levels for not matter, it is the way the money is spent which is important. Contrary to the view of the well-meaning but misguided members who promote block grants, the amount of taxpayer dollars spent on federal education does matter. First of all, the federal government lacks constitutional authority to redistribute monies between states and taxpayers for the purpose of education, regardless of whether the monies are redistributed through federal programs or through grants. There is no ``block grant exception'' to the principles of federalism embodied in the U.S. Constitution. Furthermore, the federal government's power to treat state governments as their administrative subordinates stems from an abuse of Congress' taxing-and-spending power. Submitting to federal control is the only way state and local officials can recapture any part of the monies of the federal government has illegitimately taken from a state's citizens. Of course, this is also the only way state officials can tax citizens of other states to support their education programs. It is the rare official who can afford not to bow to federal dictates in exchange for federal funding! As long as the federal government controls education dollars, states and local schools will obey Federal mandates; the core program is not that federal monies are given with the inevitable strings attached, the real problem is the existence of federal taxation and funding. Since federal spending is the root of federal control, by increasing federal spending this Congress is laying the groundwork for future Congresses to fasten more and more mandates on the states. Because state and even local officials, not federal bureaucrats, will be carrying out these mandates, this system could complete the transformation of the state governments into mere agents of the federal government. While it is true that lower levels of intervention are not as bad as micro-management at the federal level, Congress' constitutional and moral responsibility is not to make the federal education bureaucracy ``less bad.'' Rather, we must act now to put parents back in charge of education and thus make American education once again the envy of the world. Hopefully the next Congress will be more reverent toward their duty to the U.S. Constitution and America's children. The price of Congress's failure to return to the Constitution in the area of education will be paid by the next generation of American children. In short, we cannot afford to continue on the policy read we have been going down. The cost of inaction to our future generations is simply too great.

Mr. PAUL

Mr. PAUL. Mr. Speaker, I rise in opposition to H.R. 4205, the Defense Authorization Act for Fiscal Year 2001 Conference Report. While Federal constitutional authority clearly exists to provide for the national defense, global militarism was never contemplated by the founders. Misnamed like most everything else in Washington, the ``Defense'' Authorization Act thus funds U.N.-directed peacekeeping in Kosovo and Bosnia to the tune of $3.1 billion dollars, $443 million in aid to the former Soviet Union, $172 million for NATO infrastructure (the formerly defensive alliance which recently initiated force against Kosovo), and $869 million for drug interdiction efforts by the U.S. military in an attempt to take our failed 1920's prohibition experiment worldwide. Certainly a bill authorizing use of resources for the national defense which also properly compensates those military personnel necessary to maintain it would be not only constitutional but most appropriate. Contrarily, a bill which continues our elitist and failed policy of policing the world all the while creating additional enemies of the United States is neither constitutional, justifiable, supportable, nor prudent. By avoiding such a police-the-world approach, which destroys troop morale by isolating them from their families and spreading them dangerously thin, considerably less money could be authorized with seriously improved security results. Meanwhile, H.R. 3769, my bill to prohibit the destruction during fiscal year 2001 of missile silos in the United States, fails to even receive so much as a hearing. While I understand that to comply with questionable, but ratified, disarmament treaties, certain missiles may need to be deactivated, it seems ill-advised to spend money to also destroy the missile silos which may be strategically vital to our national defense at some date in the not-so-distant future. I encourage my colleagues to rethink the United States' 20th century role of global policeman and restore instead, a policy of true national defense which will better protect their constituents, keep their constituent's children safer and out of endless global conflicts, and reassume for taxpayers some semblance of fiscal sanity.

Mr. PAUL

Mr. PAUL. Mr. Speaker, in the town of Gonzales, Texas, on October 2, 1835, the first shot for Texas Independence was fired from a cannon by colonists waving a flag which proclaimed ``Come and Take It.'' Gonzales became known as the ``Lexington of Texas. '' The Little Cannon has been recognized by many as a true and proper memento of our glorious past and has appeared in no less historic sites as the Alamo and the rotunda of the Texas Capitol, and is forever enshrined in The Great Seal of Texas. Exactly 165 years after the shot was fired, on the afternoon of October 2, 2000, the City of Gonzales will accept the ``Come and Take It Cannon'' from the estate of Dr. Patrick J. Wagner. The Little Cannon will be an ever-present reminder to the citizens of Gonzales of the courage of those who stood at the ``Lexington of Texas'' and first cried, ``Come and Take It!''

Mr. PAUL

Mr. PAUL. Mr. Speaker, I am pleased to support H. Res. 578, which celebrates the accomplishments of parents across the nation who have chosen to educate their children at home by designating the first week of October as ``National Home Schooling Week.'' While serving in Congress, I have had the opportunity to get to know many of the home- schooling parents in my district. I am very impressed by the job these parents are doing in providing their children with a quality education. I have also found that home schooling parents are among the most committed activists in the cause of advancing individual liberty, constitutional government, and traditional values. I am sure my colleagues on the Education Committee would agree that the support of home schoolers was crucial in defeating the scheme to implement a national student test. Home schooling is becoming a popular option for parents across the country. In Texas alone, there are approximately 75,000 home schooling families educating an average of three children per household. Home schooling is producing some outstanding results. For example, according to a 1997 study the average home schooled student scores near the 19th percentile on standardized academic achievement tests in reading, mathematics, social studies, and science. Further proof of the success of home schooling is the fact that in recent years, self-identified home schoolers have scored well above the national average on both the Scholastic Aptitude Test (SAT) and the American College Test (ACT). All home schooled children, regardless of race, income-level, or gender achieve these high scores. Contrary to media-generated stereotypes portraying home schooled children as isolated from their peers, home schooled children participate in a wide variety of social, athletic, and extra-curricular activities. Home schooling parents have formed numerous organizations designed to provide their children ample opportunity to interact with other children. In fact, recent data indicates that almost 50 percent of home schooled children engage in extra-curricular activities such as group sports and music classes, while a third of home schooled children perform volunteer work in their communities. Mr. Speaker, to be a home schooling parent takes a unique dedication to family and education. In many cases, home school families must forgo the second income of one parent, as well as incurring the costs of paying for textbooks, computers, and other school supplies. Home schooling parents must pay these expenses while, like All-American families, struggling to pay state, local, and federal taxes. In order to help home schoolers, and all parents, devote more of their resources to their children's education, I have introduced the Family Education Freedom Act (H.R. 935). This bill provides all parents a $3,000 per child tax credit for K-12 education expenses. This bill will help home school parents to provide their children a first-class education in a loving home environment. The Family Education Freedom Act will also benefit those parents who choose to send their children to public or private schools. Parents who choose to send their children to private school may use their tax credit to help cover the cost of tuition. Parents who choose to send their children to public schools may use their tax credit to help finance the purchase of educational tools such as computers or extracurricular activities like music programs. Parents may also use the credit to pay for tutoring and other special services for their children. Mr. Speaker, the best way to improve education is to return control over education resources to the people who best know their children's unique needs: those children's parents. Congress should empower all parents, whether they choose to home school or send their child to a public or private school, with the means to control their child's education. That is why I believe the most important education bill introduced in this Congress is the Family Education Freedom Act. In conclusion, I once again wish to express my strong support for H. Res. 578 and urge all my colleagues to support this resolution and acknowledge the accomplishments of those parents who have avoided the problems associated with an education controlled by federal ``educrats'' by choosing to educate their children at home. I also urge my colleagues to help home schoolers, and all parents, ensure their children get a quality education by cosponsoring the Family Education Freedom Act.

Mr. PAUL

Mr. PAUL. Mr. Speaker, I appreciate the opportunity to explain why I must oppose H. Con. Res. 399, which celebrates the 25th Anniversary of the Individuals with Disabilities Education Act (IDEA). My opposition to H. Con. Res. 399 is based on the simple fact that there is a better way to achieve the laudable goal of educating children with disabilities than through an unconstitutional program and thrusts children, parents, and schools into an administrative quagmire. Under the IDEA law celebrated by this resolution, parents and schools often become advisories and important decisions regarding a child's future are made via litigation. I have received complaints from a special education administrator in my district that unscrupulous trial lawyers are manipulating the IDEA process to line their pockets at the expenses of local school districts. Of course, every dollar a local school district has to spend on litigation is a dollar the district cannot spend educating children. IDEA may also force local schools to deny children access to the education that best suits their unique needs in order to fulfill the federal command that disabled children be educated ``in the least restrictive setting,'' which in practice means mainstreaming. Many children may thrive in a mainstream classroom environment, however, some children may be mainstreamed solely because school officials believe it is required by federal law, even though the mainstream environment is not the most appropriate for that child. On May 10, 1994, Dr. Mary Wagner testified before the Education Committee that disabled children who are not placed in a mainstream classroom graduate from high school at a much higher rate than disabled children who are mainstreamed. Dr. Wagner quite properly accused Congress of sacrificing children to ideology. IDEA also provides school personal with incentives to over-identify children as learning disabled, thus unfairly stigmatizing many children and, in a vicious cycle, leading to more demands for increased federal spending on IDEA also IDEA encourages the use of the dangerous drug Retalin for the purpose of getting education subsidies. Instead of celebrating and increasing spending on a federal program that may actually damage the children it claims to help, Congress should return control over education to those who best know the child's needs: parents. In order to restore parental control to education, I have introduced the Family Education Freedom Act (HR 935), which provides parents with a $3,000 per child tax credit to pay for K-12 education expenses. My tax credit would be of greatest benefit to parents of children with learning disabilities because it would allow them to devote more of their resources to ensure their children get an education that meets the child's unique needs. In conclusion, I would remind my colleagues that parents and local communities know their children so much better than any federal bureaucrat, and they can do a better job of meeting a child's needs than we in Washington. There is no way that my grandchildren, and some young boy or girl in Los Angeles, CA or New York City can be educated by some sort of ``Cookie Cutter'' approach. Thus, the best means of helping disabled children is to empower their parents with the resources to make sure their children receives an education suited to that child's special needs, instead of an education that scarifies that child's best interest on the altar of the ``Washington-knows-best'' ideology. I therefore urge my colleagues to join with me in helping parents of special needs children provide their children with a quality education that meets the child's needs by repealing federal mandates that divert resources away from helping children and, instead, embrace my Family Education Freedom Act.

Mr. PAUL

Mr. PAUL. Mr. Speaker, because September is Childhood Cancer Awareness Month this is an excellent time to reflect on the problems faced by working parents struggling to meet the needs of a child stricken with cancer. I am sure that all would agree that there are few Americans more in need of tax relief than families forced to devote every available resource to caring for a child with a terminal illness such as cancer. This is why I have introduced the Family Health Tax Cut Act (H.R. 4799). This legislation provides a $3,000 tax credit to parents caring for a child with cancer, another terminal disease, or any other serious health condition requiring long-term care. H.R. 4799 also helps all working parents provide routine health care for their children by providing them with a $500 per child tax credit. The bill will be particularly helpful to those parents whose employers cannot afford to provide their employees' health insurance. Often-times those employees work in low-income jobs and thus must struggle to provide adequate health care for their children. This burden is magnified when the child needs special care to cope with cancer or a physical disability. Yet, thanks to Congress' refusal to grant individuals the same tax breaks for health-care expenses it grants businesses, these hard-working parents receive little or no tax relief to help them cope with the tremendous expenses of caring for a child requiring for a child requiring long-term or specialized care. According to research on the effects of this bill done by my staff and legislative counsel, the benefit of these tax credits would begin to be felt by joint filers with incomes slightly above 18,000 dollars a year or single income filers with incomes slightly above 15,000 dollars per year. Clearly this bill will be of the most benefit to working families balancing the demands of taxation with the needs of their children. Under the Family Health Tax Cut Act, a struggling single mother with an asthmatic child would at last be able to provide for her child's needs; while a working-class family will have less worry about how they will pay the bills if one of their children requires lengthy hospitalization or some other form of specialized care. Mr. Speaker, it is tough enough for working families to cope with a child with a serious illness without having to sacrifice resources that should be used for the care of that child to the federal government. It is hard to think of a more compassionate action this Congress can take than to reduce taxes on America's parents in order to allow them to help provide quality health care to their children. I therefore call on my colleagues to join me in helping working parents provide health care to their children by cosponsoring H.R. 4799, the Family Health Tax Cut Act.

Mr. PAUL

Mr. PAUL. Mr. Speaker, I rise to introduce the Essential Rural Hospital Preservation Act. This legislation provides a cost-effective means of providing assistance to those small rural hospitals who are struggling with the unintended consequences of the Balanced Budget Act of 1997. As those of us who represent rural areas can attest to, rural hospitals are desperately in need of such assistance. According to a survey conducted by Texas CPAs in April of 2000, the operating margin for hospitals outside a Standard Metropolitan Area with under 50 licensed beds pre-BBA was $26,000,000 while the operating margin post- BBA was negative $7,900,000. Reimbursement has been reduced by over $34 million since the BBA, while at the time the average rural hospital has incurred uncompensated and charity charges of $1.1 million since the changes contained in the Balanced Budget Act went into effect. Unless action is taken this year to provide assistance for these hospitals, many of them will be forced to close their doors, leaving many rural areas without access to hospital services. I believe I can speak for all of my colleagues when I say that while none of us want to endanger the Medicare trust fund, we also want to ensure that Medicare reforms do not drive valuable health care providers into bankruptcy. After all, denying Medicare recipients in rural areas access to quality health care breaks the promise the government makes to the American people when it requires them to pay taxes to finance the Medicare trust fund that they will receive quality health care in their golden years. Therefore, I am pleased to advance this proposal, which was developed by experts in rural health care in my district, which provides help for rural health care without endangering the soundness of the Medicare trust fund. The proposal consists of four simple changes in current Medicare laws for ``Essential Service Hospitals.'' An Essential Service Hospital is defined as a hospital located in a non-Metropolitan Statistical Area with 50 state-licensed beds or less. The specifics of the legislation are: 1. A wage index for Essential Service Hospitals set at 1.0--Essential Service Hospitals receive 26 percent less Medicare Reimbursement than hospitals in MSA area. This places rural areas at disadvantage in competing for high-quality employees with hospitals in urban areas. Setting the wage index at 1.0 will enhance the ability of rural hospitals to attract the best personal and thus ensure residents of rural areas can continue to receive quality health care. 2. Allow Essential Service Hospitals to treat 100 percent of Medicare copay and deductions which become hospital bad debts as an allowable cost--The BBA of 1997 reduced the amount of bad debts incurred because of uncollected Medicare copayments and deductions that hospitals can submit to Medicare for reimbursement as an allowable cost. This places an especially tough burden on Essential Service Hospitals which often have a high percentage of bad debts because they tend to have a high percentage of low-income populations among their clientele. 3. Exempt Essential Service Hospitals from the Outpatient Payment System (PPS)--Since rural hospitals lack the volume necessary to achieve a fair reimbursement rate under PPS, it makes no sense to apply PPS to these hospitals. Exempting Essential Service Hospitals from PPS assures that they will have their reimbursement rate determined by a formula that matches their unique situation. 4. Provides a 20 percent Medicare Disproportionate Share (DSH) payment to Essential Service Hospitals--Since small rural hospitals tend to serve a larger number of low-income persons than the average hospital, they have a particular need for Medicare DSH payments. However, many of these hospitals are not benefiting from the DSH program, this legislation will help ensure these hospitals received the support from Medicare they need to continue providing vital health care to low-income residents of rural areas. Considering that the BBA of 1997 has resulted in Medicare savings of over $50 billion more than projected by Congress surely it is not to much to ask that Congress ensure Medicare patients in rural areas are not denied access to quality health care services because of the unintended consequences of the Balanced Budget Amendment. I therefore call on my colleagues to stand up for rural hospitals by cosponsoring the Essential Rural Hospital Preservation Act.

Mr. PAUL

Mr. PAUL. Mr. Speaker, over a half a century has transpired since the United States of America became a member of the United Nations. Purporting to act pursuant to the treaty powers of the Constitution, the President of the United States signed, and the United States Senate ratified, the charter of the United Nations. Yet, the debate in government circles over the United Nations' charter scarcely has touched on the question of the constitutional power of the United States to enter such an agreement. Instead, the only questions addressed concerned the respective roles that the President and Congress would assume upon the implementation of that charter. On the one hand, some proposed that once the charter of the United States was ratified, the President of the United States would act independently of Congress pursuant to his executive prerogatives to conduct the foreign affairs of the Nation. Others insisted, however, that the Congress played a major role of defining foreign policy, especially because that policy implicated the power to declare war, a subject reserved strictly to Congress by Article I, Section 8 of the U.S. Constitution. At first, it appeared that Congress would take control of America's participation in the United Nations. But in the enactment of the United Nations' participation act on December 20, 1945, Congress laid down several rules by which America's participation would be governed. Among those rules was the requirement that before the President of the United States could deploy United States Armed Forces in service of the United Nations, he was required to submit to Congress for its specific approval the numbers and types of Armed Forces, their degree of readiness and general location, and the nature of the facilities and assistance including rights of passage to be made available to the United Nations Security Council on its call for the purpose of maintaining international peace and security. Since the passage of the United Nations Participation Act, however, congressional control of presidential foreign policy initiatives, in cooperation with the United Nations, has been more theoretical than real. Presidents from Truman to the current President have again and again presented Congress with already-begun military actions, thus forcing Congress's hand to support United States troops or risk the accusation of having put the Nation's servicemen and service women in unnecessary danger. Instead of seeking congressional approval of the use of the United States Armed Forces in service of the United Nations, presidents from Truman to Clinton have used the United Nations Security Council as a substitute for congressional authorization of the deployment of United States Armed Forces in that service. This transfer of power from Congress to the United Nations has not, however, been limited to the power to make war. Increasingly, Presidents are using the U.N. not only to implement foreign policy in pursuit of international peace, but also domestic policy in pursuit of international, environmental, economic, education, social welfare and human rights policy, both in derogation of the legislative prerogatives of Congress and of the 50 State legislatures, and further in derogation of the rights of the American people to constitute their own civil order. As Cornell University government professor Jeremy Rabkin has observed, although the U.N. charter specifies that none of its provisions ``shall authorize the United Nations to intervene in matters which are essentially within the domestic jurisdiction of any State,'' nothing has ever been found so ``essentially domestic'' as to exclude U.N. intrusions. The release in July 2000 of the U.N. Human Development Report provides unmistakable evidence of the universality of the United Nations' jurisdictional claims. Boldly proclaiming that global integration is eroding national borders, the report calls for the implementation and, if necessary, the imposition of global standards of economic and social justice by international agencies and tribunals. In a special contribution endorsing this call for the globalization of domestic policymaking, United Nations Secretary General Kofi Annan wrote, ``Above all, we have committed ourselves to the idea that no individual shall have his or her human rights abused or ignored. The idea is enshrined in the charter of the United Nations. The United Nations' achievements in the area of human rights over the last 50 years are rooted in the universal acceptance of those rights enumerated in the Universal Declaration of Rights. Emerging slowly, but I believe, surely, is an international norm,'' and this is Annan's words, ``that must and will take precedence over concerns of State sovereignty.'' Although such a wholesale transfer of United States sovereignty to the United Nations as envisioned by Secretary General Annan has not yet come to pass, it will, unless Congress takes action. Mr. Speaker, H.R. 1146, the American Sovereignty Restoration Act is my answer to this problem. To date, Congress has attempted to curb the abuse of power of the United Nations by urging the United Nations to reform itself, threatening the nonpayment of assessments and dues allegedly owed by the United States and thereby cutting off the United Nations' major source of funds. America's problems with the United Nations will not, however, be solved by such reform measures. The threat posed by the United Nations to the sovereignty of the United States and independence is not that the United Nations is currently plagued by a bloated and irresponsible international bureaucracy. Rather, the threat arises from the United Nation's Charter which--from the beginning--was a threat to sovereignty protections in the U.S. Constitution. The American people have not, however, approved of the Charter of the United Nations which, by its nature, cannot be the supreme law of the land for it was never ``made under the Authority of the U.S.,'' as required by Article VI. H.R. 1146--The American Sovereignty Restoration Act of 1999 is my solution to the continued abuses of the United Nations. The U.S. Congress can remedy its earlier unconstitutional action of embracing the Charter of the United Nations by enacting H.R. 1146. The U.S. Congress, by passing H.R. 1146, and the U.S. president, by signing H.R. 1146, will heed the wise counsel of our first president, George Washington, when he advised his countrymen to ``steer clear of permanent alliances with any portion of the foreign world,'' lest the nation's security and liberties be compromised by endless and overriding international commitments. An excerpt from Herbert W. Titus' Constitutional Analysis of the United Nations In considering the recent United Nations meetings and the United States' relation to that organization and its affront to U.S. sovereignty, we would all do well to read carefully Professor Herbert W. Titus' paper on the United Nations of which I have provided this excerpt: It is commonly assumed that the Charter of the United Nations is a treaty. It is not. Instead, the Charter of the United Nations is a constitution. As such, it is illegitimate, having created a supranational government, deriving its powers not from the consent of the governed (the people of the United States of America and peoples of other member nations) but from the consent of the peoples' government officials who have no authority to bind either the American people nor any other nation's people to any terms of the Charter of the United Nations. By definition, a treaty is a contract between or among independent and sovereign nations, obligatory on the signatories only when made by competent governing authorities in accordance with the powers constitutionally conferred upon them. I Kent, Commentaries on American Law 163 (1826); Burdick, The Law of the American Constitution section 34 (1922) Even the United Nations Treaty Collection states that a treaty is (1) a binding instrument creating legal rights and duties (2) concluded by states or international organizations with treaty-making power (3) governed by international law. By contrast, a charter is a constitution creating a civil government for a unified nation or nations and establishing the authority of that government. Although the United Nations Treaty Collection defines a ``charter'' as a ``constituent treaty,'' leading international political authorities state that ``[t]he use of the word `Charter' [in reference to the founding document of the United Nations] . . . emphasizes the constitutional nature of this instrument.'' Thus, the preamble to the Charter of the United Nations declares ``that the Peoples of the United Nations have resolved to combine their efforts to accomplish certain aims by certain means.'' The Charter of the United Nations: A Commentary 46 (B. Simma, ed.) (Oxford Univ. Press, NY: 1995) (Hereinafter U.N. Charter Commentary). Consistent with this view, leading international legal authorities declare that the law of the Charter of the United Nations which governs the authority of the United Nations General Assembly and the United Nations Security Council is ``similar . . . to national constitutional law,'' proclaiming that ``because of its status as a constitution for the world community,'' the Charter of the United Nations must be construed broadly, making way for ``implied powers'' to carry out the United Nations' ``comprehensive scope of duties, especially the maintenance of international peace and security and its orientation towards international public welfare.'' Id. at 27 The United Nations Treaty Collection confirms the appropriateness of this ``constitutional interpretive'' approach to the Charter of the United Nations with its statement that the charter may be traced ``back to the Magna Carta (the Great Charter) of 1215,'' a national constitutional document. As a constitutional document, the Magna Carta not only bound the original signatories, the English barons and the king, but all subsequent English rulers, including Parliament, conferring upon all Englishmen certain rights that five hundred years later were claimed and exercised by the English people who had colonized America. A charter, then, is a covenant of the people and the civil rulers of a nation in perpetuity. Sources of Our Liberties 1- 10 (R. Perry, ed.) (American Bar Foundation: 1978) As Article 1 of Magna Carta, puts it: We have granted moreover to all free men of our kingdom for us and our heirs forever all liberties written below, to be had and holden by themselves and their heirs from us and our heirs. In like manner, the Charter of the United Nations is considered to be a permanent ``constitution for the universal society,'' and consequently, to be construed in accordance with its broad and unchanging ends but in such a way as to meet changing times and changing relations among the nations and peoples of the world. U.N. Charter Commentary at 28-44. According to the American political and legal tradition and the universal principles of constitution making, a perpetual civil covenant or constitution, obligatory on the people and their rulers throughout the generations, must, first, be proposed in the name of the people and, thereafter, ratified by the people's representatives elected and assembled for the sole purpose of passing on the terms of a proposed covenant. See 4 The Founders' Constitution 647-58 (P. Kurland and R. Lerner, eds.) (Univ. Chicago. Press: 1985). Thus, the preamble of the Constitution of the United States of America begins with ``We the People of the United States'' and Article VII provides for ratification by state conventions composed of representatives of the people elected solely for that purpose. Sources of Our Liberties 408, 416, 418-21 (R. Perry, ed.) (ABA Foundation, Chicago: 1978) Taking advantage of the universal appeal of the American constitutional tradition, the preamble of the Charter of the United Nations opens with ``We the peoples of the United Nations.'' But, unlike the Constitution of the United States of America, the Charter of the United Nations does not call for ratification by conventions of the elected representatives of the people of the signatory nations. Rather, Article 110 of the Charter of the United Nations provides for ratification ``by the signatory states in accordance with their respective constitutional processes.'' Such a ratification process would have been politically and legally appropriate if the charter were a mere treaty. But the Charter of the United Nations is not a treaty; it is a constitution. First of all, Charter of the United Nations, executed as an agreement in the name of the people, legally and politically displaced previously binding agreements upon the signatory nations. Article 103 provides that ``[i]n the event of a conflict between the obligations of the Members of the United Nations under the present Charter and their obligations under any other international agreement, their obligations under the present Charter shall prevail.'' Because the 1787 Constitution of the United States of America would displace the previously adopted Articles of Confederation under which the United States was being governed, the drafters recognized that only if the elected representatives of the people at a constitutional convention ratified the proposed constitution, could it be lawfully adopted as a constitution. Otherwise, the Constitution of the United States of America would be, legally and politically, a treaty which could be altered by any state's legislature as it saw fit. The Founders' Constitution, supra, at 648-52. Second, an agreement made in the name of the people creates a perpetual union, subject to dissolution only upon proof of breach of covenant by the governing authorities whereupon the people are entitled to reconstitute a new government on such terms and for such duration as the people see fit. By contrast, an agreement made in the name of nations creates only a contractual obligation, subject to change when any signatory nation decides that the obligation is no longer advantageous or suitable. Thus, a treaty may be altered by valid statute enacted by a signatory nation, but a constitution may be altered only by a special amendatory process provided for in that document. Id. at 652. Article V of the Constitution of the United States of America spells out that amendment process, providing two methods for adopting constitutional changes, neither of which requires unanimous consent of the states of the Union. Had the Constitution of the United States of America been a treaty, such unanimous consent would have been required. Similarly, the Charter of the United Nations may be amended without the unanimous consent of its member states. According to Article 108 of the Charter of the United Nations, amendments may be proposed by a vote of two-thirds of the United Nations General Assembly and may become effective upon ratification by a vote of two-thirds of the members of the United Nations, including all the permanent members of the United Nations Security Council. According to Article 109 of the Charter of the United Nations, a special conference of members of the United Nations may be called ``for the purpose of reviewing the present Charter'' and any changes proposed by the conference may ``take effect when ratified by two- thirds of the Members of the United Nations including all the permanent members of the Security Council.'' Once an amendment to the Charter of the United Nations is adopted then that amendment ``shall come into force for all Members of the United Nations,'' even those nations who did not ratify the amendment, just as an amendment to the Constitution of the United States of America is effective in all of the states, even though the legislature of a state or a convention of a state refused to ratify. Such an amendment process is totally foreign to a treaty. See Id., at 575-84. Third, the authority to enter into an agreement made in the name of the people cannot be politically or legally limited by any preexisting constitution, treaty, alliance, or instructions. An agreement made in the name of a nation, however, may not contradict the authority granted to the governing powers and, thus, is so limited. For example, the people ratified the Constitution of the United States of America notwithstanding the fact that the constitutional proposal had been made in disregard to specific instructions to amend the Articles of Confederation, not to displace them. See Sources of Our Liberties 399-403 (R. Perry ed.) (American Bar Foundation: 1972). As George Mason observed at the Constitutional Convention in 1787, ``Legislatures have no power to ratify'' a plan changing the form of government, only ``the people'' have such power. 4 The Founders' Constitution, supra, at 651. As a direct consequence of this original power of the people to constitute a new government, the Congress under the new constitution was authorized to admit new states to join the original 13 states without submitting the admission of each state to the 13 original states. In like manner, the Charter of the United Nations, forged in the name of the ``peoples'' of those nations, established a new international government with independent powers to admit to membership whichever nations the United Nations governing authorities chose without submitting such admissions to each individual member nation for ratification. See Charter of the United Nations, Article 4, Section 2. No treaty could legitimately confer upon the United Nations General Assembly such powers and remain within the legal and political definition of a treaty. By invoking the name of the ``peoples of the United Nations,'' then, the Charter of the United Nations envisioned a new constitution creating a new civil order capable of not only imposing obligations upon the subscribing nations, but also imposing obligations directly upon the peoples of those nations. In his special contribution to the United Nations Human Development Report 2000, United Nations Secretary- General Annan made this claim crystal clear: Even though we are an organization of Member States, the rights and ideals the United Nations exists to protect are those of the peoples. No government has the right to hide behind national sovereignty in order to violate the human rights or fundamental freedoms of its peoples. Human Development Report 2000 31 (July 2000) [Emphasis added.] While no previous United Nations' secretary general has been so bold, Annan's proclamation of universal jurisdiction over ``human rights and fundamental freedoms'' simply reflects the preamble of the Charter of the United Nations which contemplated a future in which the United Nations operates in perpetuity ``to save succeeding generations from the scourge of ware . . . to reaffirm faith in fundamental human rights . . . to establish conditions under which justice . . . can be maintained, and to promote social progress and between standards of life in larger freedom.'' Such lofty goals and objectives are comparable to those found in the preamble to the Constitution of the United States of America: ``to . . . establish Justice, insure domestic tranquility, provide for the common defense, promote the general welfare and secure the Blessings of liberty to ourselves and our posterity . . .'' There is, however, one difference that must not be overlooked. The Constitution of the United States of America is a legitimate constitution, having been submitted directly to the people for ratification by their representatives elected and assembled solely for the purpose of passing on the terms of that document. The Charter of the United Nations, on the other hand, is an illegitimate constitution, having only been submitted to the Untied States Senate for ratification as a treaty. Thus, the Charter of the United Nations, not being a treaty, cannot be made the supreme law of our land by compliance with Article II, Section 2 of Constitution of the United States of America. Therefore, the Charter of the United Nations is neither politically nor legally binding upon the United States of America or upon its people. Even considering the Charter of the United Nations as a treaty does not save it. The Charter of the United Nations would still be constitutionally illegitimate and void, because it transgresses the Constitution of the United States of America in three major respects: (1) It unconstitutionally delegates the legislative power of Congress to initiate war and the executive power of the president to conduct war to the United Nation, a foreign entity; (2) It unconstitutionally transfers the exclusive power to originate revenue-raising measures from the United States House of Representatives to the United Nations General Assembly; and (3) It unconstitutionally robs the states of powers reserved to them by the Tenth Amendment of the Constitution of the United States of America. It is time for this Congress to return to these time- honored American principles of liberty; not to put their hope in the promise of some international organization like the United Nations which would replace the Constitution of the United States of America with its Universal Declaration of Human Rights, thereby compromising American liberties in favor of government-imposed programs designed to enhance the economic and social well-being of peoples all around the world.

Mr. PAUL

Mr. PAUL. Mr. Speaker, I am pleased to rise in support of the Social Security Tax Relief Act (H.R. 4865). By repealing the 1993 tax increase on Social Security benefits, Congress will take a good first step toward eliminating one of the most unfair taxes imposed on seniors: the tax on Social Security benefits. Eliminating the 1993 tax on Social Security benefits has long been one of my goals in Congress. In fact, I introduced legislation to repeal this tax increase in 1997, and I am pleased to see Congress acting on this issue. I would remind my colleagues that the justification for increasing this tax in 1993 was to reduce the budget deficit. Now, President Clinton, who first proposed the tax increase, and most members of Congress say the deficit is gone. So, by the President's own reasoning, there is no need to keep this tax hike in place. Because Social Security benefits are financed with tax dollars, taxing these benefits is yet another incidence of ``double taxation.'' Furthermore, ``taxing'' benefits paid by the government is merely an accounting trick, a ``shell game'' which allows members of Congress to reduce benefits by subterfuge. This allows Congress to continue using the Social Security trust fund as a means of financing other government programs and mask the true size of the federal deficit. Mr. Speaker, the Social Security Tax Relief Act, combined with our action earlier this year to repeal the earnings limitation, goes a long way toward reducing the burden imposed by the Federal Government on senior citizens. However, I hope my colleagues will not stop at repealing the 1993 tax increase, but will work to repeal all taxes on Social Security benefits. I am cosponsoring legislation to achieve this goal, H.R. 761. Congress should also act on my Social Security Preservation Act (H.R. 219), which ensures that all money in the Social Security Trust Fund is spent solely on Social Security. When the government takes money for the Social Security Trust Fund, it promises the American people that the money will be there for them when they retire. Congress has a moral obligation to keep that promise. In conclusion, Mr. Speaker, I urge my colleagues to help free senior citizens from oppressive taxation by supporting the Social Security Benefits Tax Relief Act (H.R. 4865). 1 also urge my colleagues to join me in working to repeal all taxes on Social Security benefits and ensuring that moneys from the Social Security trust fund are used solely for Social Security and not wasted on frivolous government programs.

Mr. PAUL

Mr. PAUL. Mr. Speaker, I appreciate the opportunity to explain why Congress should reject the Literacy Involves Families Together (LIFT) Act (House Resolution 3222), which aims to increase ``family literacy'' by directing money from the American taxpayer to Washington and funneling a small percentage of it back to the states and localities to spend on education programs that meet the specifications of DC-based bureaucrats. While all support the goal of promoting adult literacy, especially among parents with young children, Congress should not endorse supporting the unconstitutional and ineffective means included in this bill. If Congress were serious about meaningful education reform, we would not even be debating bills like H.R. 3222. Rather, we would be discussing the best way to return control over the education dollar to the people so they can develop the education programs that best suit their needs. Several of my colleagues on the Education and Workforce Committee have expressed opposition to the LIFT Act's dramatic increase in authorized expenditures for the Even Start family literacy programs. Of course, I share their opposition to the increased expenditure, however, my opposition to this bill is based not as much on the authorized amount but on the bill's underlaying premise: that the American people either cannot or will not provide educational services to those who need them unless they are forced to do so by the federal government. In contrast to the drafters of the LIFT bill, I do not trust the Congress to develop an education program that can match the needs of every community in the United States. Instead, I trust the American people to provide the type of education system that best suits their needs, and the needs of their fellow citizens, provided Congress gives them back control over the education dollar. The drafters of the United States Constitution understood that the federal government was incapable of effectively providing services such as education. This is why they carefully limited the federal government's powers to a few narrowly defined areas. This understanding of the proper role of the federal government was reinforced by the tenth amendment which forbids the Federal Government from controlling education, instead leaving authority over education in the hands of states, local communities and parents. Reinforcing that the scariest words in the English language are ``I'm from the federal government and I am here to help you,'' the American education system has deteriorated in the years since Congress disregarded the constitutional limitations on centralizing education in order to ``improve the schools.'' One could argue that if the federally-controlled schools did a better job of educating children to read, perhaps there would not be a great demand for ``adult literacy programs!'' Of course, family literacy programs do serve a vital purpose in society, but I would suggest that not only would family literacy programs exist, they would better serve those families in need of assistance if they were not controlled by the federal government. Because of the generosity of the American people, the issue is not whether family literacy programs will be funded but who should control the education dollars; the American people or the federal government? Mr. Speaker, rather than give more control over education to the people, H.R. 3222 actually further centralizes education by attaching new requirements to those communities receiving taxpayer dollars for adult literacy programs. For example, under this bill, federally-funded Even Start programs must use instruction methods based on ``scientific research.'' While none question the value of research into various educational methodologies, it is doubtful that the best way to teach reading can be totally determined through laboratory experiments. Learning to read is a complex process, involving many variables, not the least of which are the skills and abilities of the individual. Many effective techniques may not be readily supported by ``scientific research.'' Therefore, this program may end up preventing the use of many effective means of reading instruction. The requirement that recipients of federal funds use only those reading techniques based on ``scientific research,'' (which in practice means those methods approved by the federally-funded ``experts'') ensures that a limited number of reading methodologies will, in essence, be ``stamped with federal approval.'' In addition to violating the United States Constitution, the LIFT bill raises some serious questions regarding the relationship between the state and the family. Promoting family literacy is a noble goal but programs such as these may promote undue governmental interference in family life. Many people around the country have expressed concern that ``parenting improvement'' programs have become excuses for the government bureaucrats to intimidate parents into ceding effective control over child-rearing to the government. While none of these complaints are directly related to the Even Start program Even Start does rest on the premise that it is legitimate for the federal government to interfere with the parent-child relationship to ``improve'' parenting. Once one accepts that premise, it is a short jump to interfering in all aspects of family life in order to promote the federal government's vision of ``quality parenting.'' In order to give control over education back to the American people, I have introduced several pieces of legislation that improve education by giving the American people control over their education dollar. For instance my Family Education Freedom Act (H.R. 935), provides parents with a $3,000 per child tax credit for K-12 education expenses incurred in sending their children to public, private, or home school. I have also introduced the Education Improvement Tax Cut Act (H.R. 936), which provides a tax donation of up to $3,000 for cash or in-kind donations to public or private schools as well as for donations to elementary and secondary scholarships. I am also cosponsoring legislation (H.R. 969) to increase the tax donations for charitable contributions, as well as several bills to provide tax credits for adult job training and education. Unleashing the charitable impulses of the American people is the most effective means of ensuring that all Americans have access to the quality education programs they need, and to make sure that those programs are tailored to meet the particular needs of the local communities and the individuals they serve. In conclusion, Mr. Speaker, I call on my colleagues to reject the LIFT Act and instead embrace a program of education and charitable tax credits that will give the American people the ability to provide for the education needs of their children and families in the way that best suits the unique circumstances of their own communities.

Mr. PAUL

Mr. PAUL. Mr. Speaker, today, we find ourselves debating an intolerance-laden bill advanced by those who will claim to be the ``tolerant'' ones. What the bill's proponents are really saying is that they are intolerant of an individual's freedom to associate with those whom they, as individuals, see fit. Two vital issues are raised by this bill's ascendancy to the House floor. The first is that of our constitutional right to freedom of association. The second being the notion of ``federal charters.'' On June 28, the U.S. Supreme Court ruled that the Boy Scouts of America was within its rights when the private organization expelled an adult scout leader because he was gay. In its five-to-four opinion, the court found that requiring the Boy Scouts to admit homosexuals violated the group's free association rights. Nevertheless, this Congress has decided to bring to the floor a bill attempting to penalize this private group of citizens for exercising their first amendment ``freedom of association'' rights. This is very close to denying the very right itself. To the extent the Boy Scouts should be penalized for their exercise of free association (or exclusion in this case), that penalty should only manifest itself through other private citizens exercising their freedom not to associate with individuals or groups whose associations (or lack therof) they find offensive. As to the ``federal charter'', where do we find authority for the federal government to charter organizations it deems ``honorable''? To the extent the ``charter'' is an honorary title awarded by Congress to organizations which is then ultimately used to threaten exercise of the right to freedom of association, I suggest we repeal not only the Boy Scout's charter but all federal charters such that they won't be used as tools of federal meddling. While I hesitate to further propagate this system of federal charters by which the federal government manipulates private groups, I despise more so this congressional attempt to penalize the Boy Scouts for merely exercising their constitutional rights--or as syndicated columnist Charley Reese recently put it in the Orlando Sentinel: I think that it's time for all patriotic organizations that have these federal charters to surrender those documents. It is impossible for a dishonorable organization to honor anyone. And these charters are, practically speaking, worthless. If the federal government believes that mindless non-discrimination trumps morality, then it's time to disassociate from such bad company.

Mr. PAUL

Mr. PAUL. Mr. Speaker, H.R. 4986, brought up under suspension, deserves serious consideration by all Members. There are three reasons to consider voting against this bill. First, it perpetuates an international trade war. Second, this bill is brought to the floor as a consequence of a WTO ruling against the United States. Number three, this bill gives more authority to the President to issue Executive Orders. Although this legislation deals with taxes and technically actually lower taxes, the reason the bill has been brought up has little to do with taxes per se. To the best of my knowledge there has been no American citizen making any request that this legislation be brought to the floor. It was requested by the President to keep us in good standing with the WTO. We are now witnessing trade war protectionism being administered by the World (Government) Trade Organization--the WTO. For two years now we have been involved in an ongoing trade war with Europe and this is just one more step in that fight. With this legislation the U.S. Congress capitulates to the demands of the WTO. The actual reason for this legislation is to answer back to the retaliation of the Europeans for having had a ruling against them in favor of the United States on meat and banana products. The WTO obviously spends more time managing trade wars than it does promoting free trade. This type of legislation demonstrates clearly the WTO is in charge of our trade policy. The Wall Street Journal reported on 9/5/00, ``After a breakdown of talks last week, a multi billion-dollar trade war is now about certain to erupt between the European union and the U.S. over export tax breaks for U.S. companies, and the first shot will likely be fired just weeks before the U.S. election.'' Already, the European Trade Commissioner, Pascal Lamy, has rejected what we're attempting to do here today. What is expected is that the Europeans will quickly file a new suit with the WTO as soon as this legislation is passed. They will seek to retaliate against United States companies and they have already started to draw up a list of those products on which they plan to place punitive tariffs. The Europeans are expected to file suit against the United States in the WTO within 30 days of this legislation going in to effect. This legislation will perpetuate the trade war and certainly support the policies that have created the chaos of the international trade negotiations as was witnessed in Seattle, Washington. The trade war started two years ago when the United States obtained a favorable WTO ruling and complained that the Europeans refused to import American beef and bananas from American owned companies. The WTO then, in its administration of the trade war, permitted the United States to put on punitive tariffs on over $300 million worth of products coming in to the United States from Europe. This only generated more European anger who then objected by filing against the United States claiming the Foreign Sales Corporation tax benefit of four billion dollars to our corporations was ``a subsidy''. On this issue the WTO ruled against the United States both initially and on appeal. We have been given till October 1st to accommodate our laws to the demands of the WTO. That's the sole reason by this legislation is on the floor today. H.R. 4986 will only anger the European Union and accelerate the trade war. Most likely within two months the WTO will give permission for the Europeans to place punitive tariffs on hundreds of millions of dollars of U.S. exports. These trade problems will only worsen if the world slips into a recession when protectionist sentiments are strongest. Also, since currency fluctuations by their very nature stimulate trade wars, this problem will continue with the very significant weakness of the EURO. The United States is now rotating the goods that are to receive the 100 to 200 percent tariff in order to spread the pain throughout the various corporations in Europe in an effort to get them to put pressure on their governments to capitulate to allow American beef and bananas to enter their markets. So far the products that we have placed high tariffs on have not caused Europeans to cave in. The threat of putting high tariffs on cashmere wool is something that the British now are certainly unhappy with. The Europeans are already well on their way to getting their own list ready to ``scare'' the American exporters once they get their permission in November. In addition to the danger of a recession and a continual problem with currency fluctuation, there are also other problems that will surely aggravate this growing trade war. The Europeans have already complained and have threatened to file suit in the WTO against the Americans for selling software products over the Internet. Europeans tax their Internet sales and are able to get their products much cheaper when bought from the United States thus penalizing European countries. Since the goal is to manage things in a so-called equitable manner the WTO very likely could rule against the United States and force a tax on our international Internet sales. Congress has also been anxious to block the Voice Stream Communications planned purchase by Deutch Telekom, a German government- owned phone monopoly. We have not yet heard the last of this international trade fight. The British also have refused to allow any additional American flights into London. In the old days the British decided these problems, under the WTO the United States will surely file suit and try to get a favorable ruling in this area thus ratchening up the trade war. Americans are especially unhappy with the French who have refused to eliminate their farm subsidies--like we don't have any in this country. The one group of Americans that seem to get little attention are those importers whose businesses depend on imports and thus get hit by huge tariffs. When 100 to 200 percent tariffs are placed on an imported product, this virtually puts these corporations out of business. The one thing for certain is this process is not free trade; this is international managed trade by an international governmental body. The odds of coming up with fair trade or free trade under WTO are zero. Unfortunately, even in the language most commonly used in the Congress in promoting ``free trade'' it usually involves not only international government managed trade but subsidies as well, such as those obtained through the Import/Export Bank and the Overseas Private Investment Corporation and various other methods such as the Foreign Aid and our military budget. Free trade should be our goal. We should trade with as many nations as possible. We should keep our tariffs as low as possible since tariffs are taxes and it is true that the people we trade with we are less likely to fight with. There are many good sound, economic and moral reasons why we should be engaged in free trade. But managed trade by the WTO does not qualify for that definition. U.S., EU Risk Trade War Over Export Tax Shelters--Europe Is Likely To Seek the WTO's Permission To Levy Punitive Tariffs (By Geoff Winestock of the Wall Street Journal) Brussels.--After a breakdown of talks last week, a multibillion-dollar trade war is now almost certain to erupt between the European Union and the U.S. over export tax breaks for U.S. companies, and the first shot will likely be fired just weeks before the U.S. elections. European Trade Commissioner Pascal Lamy rejected on Thursday the latest U.S. proposal for resolving a dispute over a $4 billion-a-year tax shelter for U.S. exporters that the World Trade Organization ruled illegal in February. With chances now slim for an agreement on how to bring the U.S. tax code into line with WTO rules, the EU will likely file a new suit with the WTO in October. And this time, the EU will seek permission to retaliate against U.S. companies with trade sanctions. At a minimum, EU officials say, they will ask for punitive tariffs on $4 billion of U.S. goods. The U.S. Congress is considering a bill designed to bring U.S. tax law into line with WTO rules. But hopes that this would yield a quick solution disappeared last week when Mr. Lamy sent a letter criticizing the bill to Deputy Treasury Secretary Stuart Eizenstat. Mr. Lamy said the proposal for amending the U.S. tax code ``failed to render it compatible with international trade rules,'' according to an EU briefing note. Indeed, EU officials say, the bill was marginally worse than a White House proposal that the EU rejected in May. Describing the EU letter as ``disappointing'' and ``unconstructive,'' a senior U.S. official says the EU's attitude could sour trans-Atlantic trade ties. ``What we're trying to do is avert a trade war,'' the official says. ``We're doing everything we can to avoid it. If there's to be one, it will be in their hands, not in ours.'' The official says that the White House would continue to support the bill, which he says would be fully WTO-compliant. Unless the U.S. makes some change to the tax program by the WTO's Oct. 1 deadline, the official says, the U.S. will have no chance of avoiding a confrontation with the EU or winning its case in the WTO. The EU will have 30 days after Oct. 1 to lodge a complaint with the WTO, which will then take a few months to rule on what, if any, retaliation can be taken. At the core of the dispute is a tax-law provision that allows U.S. companies to channel overseas sales of domestically produced goods through so-called foreign sales corporations--offshore subsidiaries, usually in tax havens, whose profits on those exports are subject to lower federal income taxes than are other profits. The FSC shelter saved U.S. companies about $4 billion last year. Boeing Corp., which used the shelter to save $230 million last year, included a warning about the trade dispute in its annual financial reports. The U.S. says the congressional bill would replace the WTO- illegal tax breaks with a much broader exemption for all foreign-source income, both from exports and from goods manufactured abroad. The U.S. official says this is comparable with tax exemptions offered by EU countries, including the Netherlands and France. But EU officials and some U.S. analysts say the analogy is inaccurate and that the proposed revision simply repackages the FSC program, retaining its preference for exports over domestic sales. ``U.S. industries which are benefiting from FSCs are being very stubborn,'' says Peter Morici, a senior fellow at the Economic Strategy Institute, a Washington, D.C. think tank. ``They do not want to make a real fundamental change in the law.''

Mr. PAUL

Mr. PAUL. Mr. Speaker, I appreciate the opportunity to explain why I must oppose H.R. 4678, the Child Support Distribution Act. While I applaud the sections of the bill providing increased flexibility to states to ensure that child support payments go to benefit children, rather than government bureaucrats, other provisions of H.R. 4678 present grave dangers to individual liberty, privacy, constitutional government and the sanctity of the American family. I am particularly disturbed by the language expanding the use of the National Directory of New Hires, popularly known as the ``new hires database'', in order to more effectively administer the unemployment compensation system and deny visas and residency to non-citizens who are delinquent in child support payments. Identifying persons who are failing to fulfill their legal obligation to pay child support is a worthy goal, as an OB-GYN who has delivered over four thousand babies in my over thirty year medical career, words cannot express the contempt I hold for those who would refuse to support their children. Similarly, preventing fraud in the unemployment program is obviously important to the nation's employers and employees whose taxes finance the unemployment insurance system. However much I share the goals meant to be accomplished by the expanded uses of the database, I must remind my colleagues that the road to serfdom, like the road to hell, is paved with noble purposes and good intentions. Expanding the use of the new hires database brings us closer to the day when the database is a universal tracking system allowing government officials easy access to every individual's employment and credit history. Providing the government with that level of power to track citizens is to invite abuse of individual liberties. The threat of the expansion of the new hires database is magnified by the fact that it uses on the social security number, which has become for all intents and purposes a de facto national ID number. In addition to threatening liberty, forcing Americans to divulge their uniform identifier for inclusion in a database also facilitates the horrendous crime of identity theft. In order to protect American citizens from both private and public criminals I have introduced legislation, H.R. 220, restricting the use of the social security number to purposes related to social security administration so that the government cannot establish databases linked by a common identifier. I would also remind my colleagues that the federal government has no constitutional authority to be involved in the collection of child support, much less invade the privacy of every citizen in order to ferret out a few wrongdoers. Constitutionally, there are only three federal crimes: treason, counterfeiting, and piracy on the high seas. For Congress to authorize federal involvement in any other law enforcement issue is a violation on the limits on Congressional power contained in Article 1, section 8 and the 10th Amendment of the United States Constitution. No less an authority than Chief Justice William Renhquist has stated that Congress is creating too many federal laws and infringing on the proper police powers of the states. In a free society, constitutional limits on government power and the liberty of citizens must never be sacrificed to increase the efficiency of any government program, no matter how noble the program's goal. Again I ask my colleagues to keep in mind that the dangerous road toward the loss of liberty begins when members of Congress put other goals ahead of our oath to preserve the Constitution and protect the liberty of our constituents. While the expanded use of the new hires database provides sufficient justification for constitutionalists to oppose this bill, H.R. 4678 also must be opposed as it furthers the intrusion of the federal government into family life through the use of federal funds to support ``fatherhood programs.'' Mr. Speaker, the federal government is neither constitutionally authorized nor institutionally competent to promote responsible fatherhood. In fact, by leveling taxes on responsible parents to provide special programs for irresponsible parents the federal government is punishing responsible fathers! Federal programs promoting responsible fatherhood are another example of how the unintended consequences of government interventions are used to justify further expansions of state power. After all, it was the federal welfare state which undermined the traditional family as well as the ethic of self-responsibility so vital to maintaining a free society. In particular, the welfare state has promoted the belief that the government (re: taxpayer) has the primary responsibility for child- rearing, not the parents. When a large number of citizens view parenting as proper function of the central state it is inevitable that there will be an increase in those who fail to fulfill their obligations as parents. Without the destructive effects of the welfare state, there would be little need for federal programs to promote responsible fatherhood. Instead of furthering federal involvement in the family, Congress should stop pumping the narcotic of welfare into America's communities by defunding federal bureaucracies and returning responsibility for providing assistance to those institutions best able to provide help without fostering an ethic of irresponsibility and dependancy: private charities and churches. Certain of my colleagues will say that this bill does promote effective charity through expansion of the ``charitable choice'' program where taxpayer funds are provided to ``faith-based'' institutions in order to administer certain welfare programs. While I have no doubt that churches are better able to foster strong families than federal bureaucrats, I am concerned that providing taxpayer funding for religious institutions will force the institutions to water-down their message--thus weakening the very feature that makes these institutions effective in the first place! Furthermore, providing taxpayers dollars to secular institutions violates the rights of taxpayers not to be forced to subsidize beliefs that may offend them. As Thomas Jefferson said ``To compel a man to furnish contributions of money for the propagation of opinions which he disbelieves and abhors is sinful and tyrannical.'' In conclusion, H.R. 4678, the Child Support Distribution Act, violates the Constitution by expanding the use of the new hires database, thus threatening the liberty and privacy of all Americans, as well as by expanding the federal role in family in the misguided belief that the state can somehow promote responsible fatherhood. By expanding the so-called ``charitable choice'' program this bill also violates the conscience of millions of taxpayers and runs the risk of turning effective religious charities into agents of the welfare state. It also furthers the federalization of crime control by increasing the federal role in child support despite the fact that the federal government has no constitutional authority in this area. I therefore urge my colleagues to reject this bill and return responsibility for America's children to states, local communities and, most importantly, parents.

Mr. PAUL

Mr. PAUL. Mr. Speaker, I am pleased to rise in support of the Social Security Tax Relief Act (H.R. 4865). By repealing the 1993 tax increase on Social Security benefits, Congress will take a good first step toward eliminating one of the most unfair taxes imposed on seniors: the tax on Social Security benefits. Eliminating the 1993 tax on Social Security benefits has long been one of my goals in Congress. In fact, I introduced legislation to repeal this tax increase in 1997, and I am pleased to see Congress acting on this issue. I would remind my colleagues that the justification for increasing this tax in 1993 was to reduce the budget deficit. Now, President Clinton, who first proposed the tax increase, and most members of Congress say the deficit is gone. So, by the President's own reasoning, there is no need to keep this tax hike in place. Because Social Security benefits are financed with tax dollars, taxing these benefits is yet another incidence of ``double taxation.'' Furthermore, ``taxing'' benefits paid by the government is merely an accounting trick, a ``shell game'' which allows members of Congress to reduce benefits by subterfuge. This allows Congress to continue using the Social Security trust fund as a means of financing other government programs and mask the true size of the federal deficit. Mr. Speaker, the Social Security Tax Relief Act, combined with our action earlier this year to repeal the earnings limitation, goes a long way toward reducing the burden imposed by the Federal Government on senior citizens. However, I hope my colleagues will not stop at repealing the 1993 tax increase, but will work to repeal all taxes on Social Security benefits. I am cosponsoring legislation to achieve this goal, H.R. 761. Congress should also act on my Social Security Preservation Act (H.R. 219), which ensures that all money in the Social Security Trust Fund is spent solely on Social Security. When the government takes money for the Social Security Trust Fund, it promises the American people that the money will be there for them when they retire. Congress has a moral obligation to keep that promise. In conclusion, Mr. Speaker, I urge my colleagues to help free senior citizens from oppressive taxation by supporting the Social Security Benefits Tax Relief Act (H.R. 4865). I also urge my colleagues to join me in working to repeal all taxes on Social Security benefits and ensuring that moneys from the Social Security trust fund are used solely for Social Security and not wasted on frivolous government programs.

Mr. PAUL

Mr. PAUL. Mr. Chairman, I rise today in hesitant opposition to H.R. 4115, the U.S. Holocaust Memorial Museum Authorization Act. We as vigilant Americans must never forget the horrific lessons of the past and those attendant consequences of corporatism, fascism, and tyrannical government; that is, governmental deprivation of individual rights. A government which operates beyond its proper limits of preserving liberty never bodes well for individual rights to life, liberty and property. Particularly, Adolph Hitler's tyrannical regime is most indicative of the necessary consequences of a government dominated by so-called ``government-business'' partnerships, gun- confiscation schemes, protectionism, and abandonment of speech and religious freedom in the name of ``compelling government interests.'' Ironically, this measure's language permanently authorizes the appropriation of such sums as may be necessary for the United States Holocaust Memorial Museum; a purpose which propels our very own federal government beyond its constitutionally enumerated limits. This nation's founders were careful to limit the scope of our federal government to those enumerated powers within Article One, Section 8 of the U.S. Constitution. These limits were further instilled within the bill of rights' tenth amendment which reserves to States and private parties those powers not specifically given to the federal government. Evidence that such private contributions can properly memorialize this most important historical abhorration can be found given that this museum receives approximately $20 million in private donations annually. Mr. Chairman, while I agree it is most important to remember and memorialize with a heavy heart the consequences of tyrannical governments operating beyond their proper limits, ignoring our own government's limits of power and, thus, choosing a means incompatible with its ends to do so must not be tolerated. Hence, I must oppose H.R. 4115.

Mr. PAUL

Mr. PAUL. Mr. Speaker, I am pleased to rise in support of the Social Security Tax Relief Act (H.R. 4865). By repealing the 1993 tax increase on Social Security benefits, Congress will take a good first step toward eliminating one of the most unfair taxes imposed on seniors: the tax on Social Security benefits. Eliminating the 1993 tax on Social Security benefits has long been one of my goals in Congress. In fact, I introduced legislation to repeal this tax increase in 1997, and I am pleased to see Congress acting on this issue. I would remind my colleagues that the justification for increasing this tax in 1993 was to reduce the budget deficit. Now, President Clinton, who first proposed the tax increase, and most members of Congress say the deficit is gone. So, by the President's own reasoning, there is no need to keep this tax hike in place. Because Social Security benefits are financed with tax dollars, taxing these benefits is yet another incidence of ``double taxation.'' Furthermore, ``taxing'' benefits paid by the government is merely an accounting trick, a ``shell game'' which allows members of Congress to reduce benefits by subterfuge. This allows Congress to continue using the Social Security trust fund as a means of financing other government programs and mask the true size of the federal deficit. Mr. Speaker, the Social Security Tax Relief Act, combined with our action earlier this year to repeal the earnings limitation, goes a long way toward reducing the burden imposed by the Federal Government on senior citizens. However, I hope my colleagues will not stop at repealing the 1993 tax increase, but will work to repeal all taxes on Social Security benefits. I am cosponsoring legislation to achieve this goal, H.R. 761. Congress should also act on my Social Security Preservation Act (H.R. 219), which ensures that all money in the Social Security Trust Fund is spent solely on Social Security. When the government takes money for the Social Security Trust Fund, it promises the American people that the money will be there for them when they retire. Congress has a moral obligation to keep that promise. In conclusion, Mr. Speaker, I urge my colleagues to help free senior citizens from oppressive taxation by supporting the Social Security Benefits Tax Relief Act (H.R. 4865). I also urge my colleagues to join me in working to repeal all taxes on Social Security benefits and ensuring that moneys from the Social Security trust fund are used solely for Social Security and not wasted on frivolous government programs.

Mr. PAUL

Mr. PAUL. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks on the subject of the special order today of the gentleman from North Carolina (Mr. Coble).

Mr. PAUL

Mr. PAUL. Mr. Speaker, those of us who warned of the shortcomings of expanding our military presence in Colombia were ignored when funds were appropriated for this purpose earlier this year. We argued at that time that clearly no national security interests were involved; that the Civil War was more than 30 years old, complex with three factions fighting, and no assurance as to who the good guys were; that the drug war was a subterfuge, only an excuse, not a reason, to needlessly expand our involvement in Colombia; and that special interests were really driving our policy: Colombia Oil Reserves owned by American interests, American weapons manufacturers, and American corporations anxious to build infrastructure in Colombia. Already our foolish expanded pressure in Colombia has had a perverse effect. The stated purpose of promoting peace and stability has been undermined. Violence has worsened as factions are now fighting more fiercely than ever before for territory as they anticipate the full force of U.S. weapons arriving. The already weak peace process has been essentially abandoned. Hatred toward Americans by many Colombians has grown. The Presidents of 12 South American countries rejected outright the American-backed military operation amendment aimed at the revolutionary groups in Colombia. This foolhardy effort to settle the Colombian civil war has clearly turned out to be a diplomatic failure. The best evidence of a seriously flawed policy is the departure of capital. Watching money flows gives us a market assessment of policy; and by all indication, our policy spells trouble. There is evidence of a recent large-scale exodus of wealthy Colombians to Miami. Tens of thousands of Colombians are leaving for the U.S., Canada, Costa Rica, Spain, Australia. These are the middle- class and upper-class citizens, taking their money with them. Our enhanced presence in Colombia has accelerated this exodus. Our policy, unless quickly and thoroughly reversed, will surely force an escalation of the civil war and a dangerous increase in our involvement with both dollars and troops. All this will further heighten the need for drug sales to finance all factions of the civil war. So much for stopping the drug war. Our policy is doomed to fail. There is no national security interest involved; therefore, no goals can be set and no victory achievable. A foreign policy of non-intervention designed only to protect our sovereignty with an eagerness to trade with all nations willing to be friends is the traditional American foreign policy and would give us the guaranteed hope of peace, the greatest hope of peace and prosperity. Let us think seriously about our foreign policy, and hopefully someday we will pursue a policy in the best interest of America by minding our own business.