Ron Paul

Mr. PAUL

Mr. PAUL. Mr. Speaker, it has recently come to my attention that William E. Simon has publicly called for the Congress to reject the Clinton proposal to approve $3.5 billion in new funding for the International Monetary Fund (IMF). He points out that the IMF was established over 50 years ago as an institution to maintain the Bretton Woods system of stable exchange rates that the world rejected in the early 1970's. The IMF has a poor track record. ``All of the major currency and banking crises of the last five years have occurred under conditions of heightened surveillance by the IMF,'' according to Gregory Fossedal, a leading expert on the subject. George Schultz, the former Secretary of State and of the Treasury, has also called for the IMF's elimination. Wisely, the House of Representatives did not include any new appropriation for the IMF. It is hoped that the conference committee will act as prudently. Mr. Simon, the former Secretary of the Treasury and the current president of the Olin Foundation, authored in today's issue of the Wall Street Journal an incisive article on the subject that I would like to include in the Record. This article clearly explains why the IMF ``may actually promote crises, because governments often resist sound economic and financial policies * * * because they know that the IMF will be there to bail them out in the event of a crisis.'' We should add that the IMF will be bailing them out with U.S. taxpayers' money if the conference committee fails to follow the sound judgment of the House and reject any additional IMF funding. [From the Wall Street Journal, Oct. 23, 1997] Abolish the IMF (By William E. Simon) The Clinton administration is asking Congress to approve $3.5 billion in additional funding this year for the International Monetary Fund. Congress should not only reject this proposal, but also take the long overdue step of ending all future funding for the IMF. As a practical matter, the institution cannot continue to exist without the participation of the most powerful nation in the world. By withdrawing its funding, then, the U.S. can take a leadership role in putting this outdated organization out of business. The IMF is ineffective, unnecessary and obsolete. It was established after World War II, together with the World Bank, to promote trade and development in an international economy that had been torn apart by two decades of depression and war. In the system of fixed exchange rates established by the Bretton Woods agreements, the IMF's purpose was to provide short-term loans to countries experiencing temporary problems with their balances of payments. This was an important function during the period following the war, and the IMF generally performed it quite well. But this function became obsolete in the early 1970's when the world abandoned the Bretton Woods system in favor of the current system, in which currency values are set by the market. Instead of going out of business as that new system matured, the bureaucrats at the IMF invented a new function for themselves--namely, to provide so-called structural adjustment loans to countries that are, for various reasons, deeply in debt. These loans are granted on the condition that the recipient countries take steps to reduce their debt, often by increasing taxes and reducing government spending. This mission, of course, was never contemplated in the IMF's original charter; indeed, these structural adjustment loans look very much like the development loans that are supposedly under the purview of the World Bank. Many critics of the IMF point out that these loans have been quite ineffective in preventing currency crises and in promoting stable economic growth in developing countries. Quite the contrary, as these critics say, the IMF may actually promote crises, because governments often resist sound economic and financial policies (which may be unpopular) because they know that the IMF will be there to bail them out in the event of a crisis. As Gregory Fossedal, a leading expert on the IMF, has pointed out, ``All of the major currency and banking crises of the last five years have occurred under conditions of heightened surveillance by the IMF.'' These include the crises in Mexico in 1994, in Africa in 1995 and in Thailand, Korea and Malaysia in 1997. The IMF, with the help of the U.S., has now bailed Mexico out four times since 1976, and it will no doubt do so again and again unless the IMF is put out of business once and for all. Because the IMF has no legitimate function in our present system of floating exchange rates, we can eliminate it, and safely rely on private institutions, operating in the context of a free market, to provide liquidity and capital for developing nations, just as they do for the industrial nations. As a former secretary of the Treasury, I do not lightly call for the elimination of a financial institution that has been in operation for more than 50 years, and that served a pivotal role in the international economy in the period following World War II. It is obvious, however, that the IMF no longer serves a constructive role in the world economy, and has not done so since the 1970s. We should therefore have the courage to close it down--and the most effective way to accomplish this goal would be to withdraw U.S. funding. A few years ago, such a call to end the IMF would have been attacked on all sides as an extreme and highly controversial recommendation. But today a growing number of respected observers agree that the organization is no longer needed. George Shultz, the esteemed former secretary of state and of the Treasury, has recently called for the elimination of the IMF. In a 1995 lecture before members of the American Economic Association, Mr. Shultz observed that ``the IMF has more money than mission.'' As a consequence, he said, we should ``merge this outmoded institution with the World Bank, and create a charter for the new organization that encourages emphasis on private contributions to economic development.'' This would make a great deal of practical sense. The House and Senate now have a golden opportunity to force the long overdue elimination of the IMF. There is no longer any reason to burden taxpayers with the expenses of this outdated institution.

Mr. PAUL

Mr. PAUL. Mr. Speaker, I rise today to introduce the Davis-Bacon Repeal Act of 1997. The Davis-Bacon Act of 1931 forces contractors on all federally-funded construction projects to pay the local prevailing wage, defined as ``the wage paid to the majority of the laborers or mechanics in the classification on similar projects in the area.'' In practice, this usually means the wages paid by unionized contractors. For more than 60 years, this congressionally-created monstrosity has penalized taxpayers and the most efficient companies while crushing the dreams of the most willing workers. Mr. Speaker, Congress must act now to repeal this 61-year-old relic of the era during which people actually believed Congress could legislate prosperity. Americans pay a huge price is lost jobs, lost opporuntities and tax-boosting cost overruns on Federal construction projects every day Congress allows Davis-Bacon to remain on the books. Davis-Bacon artificially inflates construction costs through a series of costly work rules and requirements. For instances, under Davis- Bacon, workers who perform a variety of tasks must be paid at the highest applicable skilled journeyman rate. Thus, a general laborer who hammers a nail must now be classified as a carpenter, and paid as much as three times the company's regular rate. As a result of this, unskilled workers can be employed only if the company can afford to pay the Government-determined prevailing wages and training can be provided only through a highly regulated apprenticeship program. Some experts have estimated the costs of complying with Davis-Bacon regulations at nearly $200 million a year. Of course, this doesn't measure the costs in lost jobs opportunities because firms could not afford to hire an inexperienced worker. Most small construction firms cannot afford to operate under Davis- Bacon's rigid job classifications or hire the staff of lawyers and accountants needed to fill out the extensive paperwork required to bid on a Federal contract. Therefore, Davis-Bacon prevents small firms from bidding on Federal construction projects, which, unfortunately, constitute 20 percent of all construction projects in the United States. Because most minority-owned construction firms are small companies, Davis-Bacon keeps minority-owned firms from competing for Federal construction contracts. The resulting disparities in employment create a demand for affirmative action, another ill-suited and ill-advised Big Government program. The racist effects of Davis-Bacon are no mere coincidence. In fact, many original supporters of Davis-Bacon, such as Representative Clayton Allgood, bragged about supporting Davis-Bacon as a means of keeping cheap colored labor out of the construction industry. In addition to opening up new opportunities in the construction industry for small construction firms and their employees, repeal of Davis-Bacon would also return common sense and sound budgeting to Federal contracting, which is now rife with political favoritism and cronyism. An audit conducted earlier this year by the Labor Department's Office of the Inspector General found that an inaccurate data were frequently used in Davis-Bacon wage determination. Although the inspector general's report found no evidence of deliberate fraud, it did uncover material errors in five States' wage determinations, causing wages or fringe benefits for certain crafts to be overstated by as much as $1.08 per hour. The most compelling reason to repeal Davis-Bacon is to benefit the American taxpayer. the Davis-Bacon Act drives up the cost of Federal construction costs by as much as 50 percent. In fact, the Congressional Budget Office has reported that repealing Davis-Bacon would save the American taxpayer almost $3 billion in 4 years. Mr. Speaker, it is time to finally end this patently unfair, wildly inefficient and grossly discriminatory system of bidding on Federal construction contracts. Repealing the Davis-Bacon Act will save taxpayers billions of dollars on Federal construction costs, return common sense and sound budgeting to Federal contracting, and open up opportunities in the construction industry to those independent contractors, and their employees, who currently cannot bid on Federal projects because they cannot afford the paperwork requirements imposed by this Act. I therefore urge all my colleagues to join me in supporting the Davis-Bacon Repeal Act of 1997.

Mr. PAUL

Mr. PAUL. Mr. Speaker, I was the original cosponsor of 2373, the Education Savings Act. That bill has changed. It is now 2646. I can support with reluctance this rule coming to the floor, but because of the changes that have occurred, I can no longer support this bill. There is nobody in this House that is a stronger supporter of credits and benefits and return of funds to parents to raise their children and give them a choice. There will be Members on this floor today who will oppose this bill because they cannot stand the idea of returning funds to parents and giving them a choice, but I am opposing it because this is a net tax increase. This is costing, and for that reason I can no longer support this bill. Mr. Speaker, I think the best way to give individuals and families a true choice is to give them tax credit. Unfortunately, this is a small step in the right direction, which I could have supported if we would not have had to raise taxes. We are closing a so-called loophole, a benefit provided to the businessmen and the individuals who benefit from the way their vacation time is deducted. The courts ruled in favor of the taxpayer and here we are undermining it. According to the Joint Committee on Taxation, our own committee here in the Congress has estimated that what we do here today will raise taxes $1.8 billion over the next 2 years. With the most optimistic projections on how many people will use these savings accounts, they are claiming there will only be a return of $600 million. So in the next 2 years, if this goes through, we will raise taxes three times as much as we are so-called returning. This is a net tax increase. It is not the way to go. We should do one thing to provide for these tax credits, one and only, and that is cut spending. Do my colleagues realize that if we would cut the National Endowment for the Arts by less than 3 percent we would have enough funds for this? That is all that we would need to do. But instead we go and we reverse the procedure of the courts which finally ruled in favor of the taxpayers, and now we are going to force them to reassess and revamp and make sure that those individuals on how they are handling their vacation time that more taxes will be paid. Mr. Speaker, it is estimated the most optimistic estimates on this bill in order to project what might happen is that 12 million people would use these accounts, the maximum amount of $2,500 for 5 years. It means $120 billion would be stashed away. That is very unlikely, but I do predict that the taxes will go up, unfortunately.

Mr. PAUL

Mr. PAUL. Mr. Speaker, I appreciate the opportunity to explain why I oppose the Education Savings Act for Public and Private Schools--H.R. 2646--despite having been an original cosponsor of the Parents and Student Savings Account Act--PLUS A+--bill and having been quite active in seeking support for the original bill. I remain a strong supporter of education IRA's, which are a good first step toward restoring parental control of education by ensuring parents can devote more of their resources to their children's education. However, this bill also raises taxes on businesses and I cannot vote for a bill that raises taxes, no matter what other salutary provisions are in the legislation. I certainly support the provisions allowing parents to contribute up to $2,500 a year to education savings accounts without having to pay taxes on the interest earned by that account. This provision expands parental control of education, the key to true education reform as well as one of the hallmarks of a free society. Today the right of parents to educate their children as they see fit is increasingly eroded by the excessive tax burden imposed on America's families by Congress. Congress then rubs salt in the wounds of America's hardworking, taxpaying parents by using their tax dollars to fund an unconstitutional education bureaucracy that all too often uses its illegitimate authority over education to undermine the values of these same parents. In fact, one of my objections to this bill is that it does not go nearly far enough in returning education authority to the parents. This is largely because the deposit to an education IRA must consist of after-tax dollars. Mr. Speaker, education IRA's would be so much more beneficial if parents could make their deposits with pretax dollars. Furthermore, allowing contributions to be made from pretax dollars would provide a greater incentive for citizens to contribute to education IRA's for other underprivileged children. Furthermore, education IRA's are not the most effective means of returning education resources to the American people. A much more effective way of promoting parental choice in education is through education tax credits, such as those contained in H.R. 1816, the Family Education Freedom Act, which provides a tax credit of up to $3,000 for elementary and secondary expenses incurred in educating a child at private, parochial, or home schools. Tax credits allow parents to get back the money they spent on education, in fact, large tax credits will remove large numbers of families from the tax roles. I would still support this bill as a good first--albeit small--step toward restoring parental control of education if it did not offset the so-called cost to Government--revenue loss--by alterning the rules by which businesses are taxed on employee vacation benefits. While I support efforts to ensure that tax cuts do not increase the budget deficit, the offset should come from cuts in wasteful, unconstitutional Government programs, such as foreign aid and corporate welfare. Congress should give serious consideration to cutting unconstitutional programs such as Goals 2000 which run roughshod over the rights of parents to control their children's education, as a means of offsetting the revenue loss to the Treasury from this bill. A less than 3-percent cut in the NEA budget would provide more funds than needed for this return of tax dollars to families who seek choice in their children's educational needs. Mr. Speaker, we in Congress have no moral nor scientific means by which to determine which Americans are most deserving of tax cuts. Yet, this is precisely what Congress does when it raises taxes on some Americans to offset tax cuts for others. Rather than selecting some arbitrary means of choosing which Americans are more deserving of tax cuts, Congress should cut taxes for all Americans. Moreover, becasue we have no practical way of knowing how many Americans will take advantage of the education IRA's relative to those who will have their taxes raised by the offset in this bill, it is quite possible that H.R. 2646 is actually a backdoor tax increase. In fact, the Joint Committee on Taxation has estimated that this legislation will increase revenues to the Treasury by $1.8 billion over the next 2 years. It is a well-established fact that any increase in taxes on small businesses discourages job creation and, thus, increases unemployment. It is hard too see how discouraging job creation by raising taxes is consistent with the stated goal of H.R. 2646--helping America's families. Mr. Speaker, I would suggest that is this type of legislation--a backdoor tax increase masquerading as a tax cut--that is, in part, responsible for the widespread and ever growing disgust with this body. In conclusion, although the Education Savings Act for Public and Private Schools does take a small step toward restoring parental control of education, it also raises job-destroying taxes on business. Therefore, I cannot in good conscience support this bill. I urge my colleagues to join me in opposing this bill and instead support legislation that returns education resources to American parents by returning to them moneys saved by deep cuts in the Federal bureaucracy, nor by raising taxes on other Americans.

Mr. PAUL

Mr. PAUL. Madam Speaker, tobacco industry leaders are under attack by nearly everyone. A tobacco-friendly tax provision that was hidden in the settlement was quickly removed by the Senate and the House once the public became aware of it. But without a tax benefit or higher cigarette prices, or both, there is no way the industry can afford the astronomical $368.5 billion settlement they have agreed to pay over the next 25 years. The industry makes only $8.4 billion annual pretax profit. The tobacco companies deserve every bit of grief they are receiving, but for reasons other than commonly assumed. It is true they profit from selling a dangerous product, but so do automobile, airplane, and gun manufacturers as well as food producers, drug companies, and coffee farmers. When we boil it down, any product used incorrectly or excessively is dangerous. Even oxygen used incorrectly can be dangerous. And most people know tobacco is dangerous without the benefit of the nanny-state inspectors and the bureaucrats' warning label. Tobacco company executives symbolize much of what is wrong with corporate America and our corrupt system of special interests, favoritism, and interventionism. For decades, Big Tobacco lobbied for and gladly accepted subsidies and trade benefits, while anyone with a grain of common sense knew smoking was a bad habit that adversely affected some people's health. It is no secret that young people could easily become addicted to nicotine. There were specific gains to be realized from the charade that surrounded tobacco sales. Pretending that smoking was a benign habit made it easier to collect benefits from the nonsmoking taxpayers. And the alternative, arguing for personal responsibility, was hardly in vogue. Over the past 50-plus years, responsibility for risk incrementally has been shifted from the individual to the State. As we moved further from a free society toward a managed welfare state, responsibility for nearly everything began to be systematically delivered to someone else through the State and its growing army of bureaucrats. The tobacco industry was a willing accomplice to this betrayal of individual responsibility. The failure of Big Tobacco to fight Government's requirement to put warning labels on cigarettes while accepting agricultural subsidies allowed the entire smoking industry to be invaded by the Federal Government. Tobacco put the welcome mat out for big Government. Now it is only a matter of time before nicotine will be declared a drug and more FDA regulation will inundate us. Unfortunately, this will only compound our many problems with nicotine. Madam Speaker, smoking should be treated no differently than compulsive eating, chocolate addiction, or driving too fast. But the way the tobacco corporate leaders are acting in cahoots with big Government, one would think they are conspiring to prevent this. Madam Speaker, the question is who has responsibility for our well- being? Who should make decisions regarding risk-taking and personal habits, the Government or the individual? During the Clinton health care debate, tobacco, and nearly every other industry took the easy way out. They conceded that it was Government's responsibility, Federal and State, to provide medical care for everyone, as if it were in itself a constitutional right. When the free market works, medical insurance premiums adjust to reflect the cost of habits like smoking, sky diving, overweight, and medical preconditions. When Government pays, the concept of insurance goes out the window and everybody gets everything paid for and no one can be discriminated against. Persons who have harmed their health by smoking have learned they can coerce those with good health into paying for the consequence of their bad habit. In fact, many who harm themselves through their chosen lifestyles, not just a single bad habit, religiously believe they have a right to be taken care of by someone else. This group of individuals, not only those who smoke, but those who drink too much or perform sexual acts which increase their chance of acquiring AIDS or hepatitis, or who will not diet to take care of diabetes or heart conditions. It is this abdication of personal responsibility, this misconceived notion that the State is responsible for us, that drives counterintelligent drug laws, which inspires the use of dirty needles, which serves to further spread AIDS and hepatitis. And instead of legalizing the right to buy a clean needle for a few pennies, the bureaucrats insist on making it the Government's responsibility to coerce nondrug users into paying for free needles so the addicts can keep using their illegal drugs. Nothing could be more bizarre. This lack of understanding responsibility, rights and subsidies has led the tobacco industry leaders to further compound the problem by not fighting the trumped up obligation to pay for any health care that may have arisen from smoking. Not once have we heard a tobacco industry leader defend his right to sell something that is risky to someone but not others, which is the case with tobacco and most other products. Tobacco industry leaders are under attack by nearly everyone. A tobacco-friendly tax provision that was hidden in the settlement was quickly removed by the Senate and House once the public became aware of it. But without a direct tax benefit or higher cigarette prices, or both, there's no way the industry can afford the astronomical $368.5 billion settlement they have agreed to pay over the next 25 years--the industry makes only $8.4 billion annual pretax profit. The tobacco companies deserve every bit of grief they are receiving-- but for reasons other than commonly assumed. It's true they profit from selling a dangerous product. But so do automobile, airplane, and gun manufacturers, as well as food producers, drug companies, and coffee farmers. When you boil it down, any produce used incorrectly or excessively is dangerous. Even oxygen used incorrectly can be dangerous. And most people know tobacco is dangerous without the benefit of the nanny-state inspectors and the bureaucrats' warning label. Tobacco company executives symbolize much of what is wrong with corporate America and our corrupt system of special interests, favoritism, and interventionism, For decades, big tobacco lobbied for, and gladly accepted, subsidies and trade benefits while anyone with a grain of common sense knew smoking was a bad habit that adversely affected some people's health. It was no secret that young people could easily become addicted to nicotine. There were specific gains to be realized from the charade that surrounded tobacco sales. Pretending that smoking was a benign habit made it easier to collect benefits from nonsmoking taxpayers. And the alternative--arguing for personal responsibility--was hardly in vogue. Over the past 50-plus years, responsibility for risk has incrementally been shifted from the individual to the State. As we moved further from a free society toward a managed welfare state, responsibility for nearly everything began to be systematically delivered to somebody else through the State and its growing army of bureaucrats. The tobacco industry was a willing accomplice to this betrayal of individual responsibility. The failure of big tobacco to fight Government's requirement to place warning labels on cigarettes, Government intervention into distribution, while accepting agricultural subsidies, Government involvement in production, allowed the entire smoking industry, from production to distribution, to be invaded by the Federal Government. Tobacco put out the welcome mat for big government. Now, it's only a matter of time before nicotine will be declared a drug and more FDA regulations will inundate us. Unfortunately this will only compound our many problems with nicotine. Smoking should be treated no differently than compulsive eating, chocolate addiction, or driving too fast. But the way the tobacco corporate leaders are acting in cahoots with big government, you would think they are conspiring to prevent this. The question is: Who has responsibility for our well-being? Who should make decisions regarding risk taking and personal habits--the government or the individual? During the Clinton health-care debate, tobacco and nearly every other industry took the easy way out. They conceded that it was the Government's responsibility--Federal and state--to provide medical care for everyone as if it were, in itself, a constitutional right. When the free market works, medical insurance premiums adjust to reflect the costs of habits like smoking, sky diving, overweight, and medical preconditions. When Government pays, the concept of insurance goes out the window, everybody gets everything paid for, and no one can be discriminated against. Persons who have harmed their heath by smoking have learned they can coerce those with good health into paying for the consequences of their bad habit. In fact, many who harm themselves through their chosen lifestyles, not just a single bad habit, religiously believe they have a right to be taken care of by someone else. This group includes not only those who smoke, but those who drink too much, or perform sexual acts which increase their chances of acquiring AIDS or hepatitis, or those who won't diet to take care of their diabetes or heart conditions. It's this abdication of personal responsibility--this misconceived notion that the State is responsible for us--that drives counter- intelligent drug laws, which inspires the use of dirty needles, which serves to further spread AIDS and hepatitis. And instead of legalizing the right to buy a clean needle for a few pennies, the bureaucrats insist on making it Government's responsibility to coerce nondrug users into paying for free needles so the addicts can keep using their illegal drugs. Nothing could be more bizarre. This lack of understanding responsibility, rights, and subsidies has led tobacco industry leaders to further compound the problem by not fighting the trumped-up obligation to pay for any health care that may have arisen from smoking. Not once have we heard a tobacco industry leader defend his right to sell something that is risky to some but not others--which is the case with tobacco and most other products. One pack of cigarettes a year never hurt anyone. Everyone who smokes doesn't become addicted. Ninety percent of smokers never get a smoking-related illness. Absent fraud, the user is responsible for the risk he assumes, not the seller of any given product. It has been suggested by some that smoking cigarettes provides certain immunity from some diseases. I personally cannot stand smoking, and even as a child I knew it was dangerous. It was a time when parents had a lot more to do with assuming the responsibility for teaching children about all dangers--like fire, chemicals, heights, crossing highways, sharp objects, guns, and smoking. We still don't hear a principled challenge to the demands of the various states to be reimbursed by the tobacco industry for the costs of smoking-related illnesses. States should not be in the medical business in the first place, let alone be extorting funds from the producers of tobacco products. Yes, the business leaders in the tobacco industry deserve sharp criticism. Once this precedent of paying medical bills is set, the manufacturers of automobiles will then be liable for all accidents even if the drivers are speeding and intoxicated. Chocolate addicts can then sue Hershey, fat people can sue cattle ranchers. The whole notion that tobacco companies should pay for tobacco-related illnesses is absurd. The tobacco deal does great harm, because it further undermines the principle of self-responsibility. The spread of this concept will not only push up the costs of medical treatment and the products involved, it could actually encourage the use of dangerous products. The response of potential users will be, ``If I'm unfortunate and become ill or injured, the seller or the Government will be made to take care of me''--a very common reaction in a welfare state. To the extent one can lower the cost of one's own risky habit by socializing it, one is less likely to worry about consequences and more likely to engage in that dangerous behavior. If this attitude toward consumer risk is not changed, the free society that we once had cannot be restored. I'd like to see a spokesman for tobacco come forward and insist on recognition of the moral principle that individuals have responsibility for themselves and a duty to make choices and assume the consequences of the risks they take. My advice to him would be to give up the subsidies, demand freedom, and fight the social misfits who argue for collective guilt and collective responsibility. Any other course of action will lead to more evils.

Mr. PAUL

Mr. PAUL. Mr. Speaker, frequently I am asked, when I am in my district, if Congress is making any progress in solving the problems that this country faces. I wish I could be more optimistic in my answer, yet I am optimistic about the people in the district and the people in the country, because I think they are beginning to see the problems correctly and they are beginning to sense that we should be doing more to solve the problems. Truthfully, I cannot give them an optimistic answer about the progress we are making here within the House of Representatives and in the Senate. For instance, yesterday we had a piece of legislation come up rather quickly. It was the FDA legislation. There was no announcement the day before. There was no announcement last week. It came up suddenly, under suspension, with only minutes to prepare. Actually, I came to the floor hoping that I could at least make a statement, asking for 1 minute, but because it was managed by both majority and minority that supported the bill, there just happened not to be any time available to discuss anything in the FDA legislation. This legislation involved 177 pages. It was not available to me on the Internet. It is a complex piece of legislation, and something that I think is a very important piece of legislation. I had received numerous pieces of correspondence critical of this legislation and urging caution on its passage. The bill was rushed through rather quickly. There was no vote taken on this and, actually, not one single thing said in a negative manner about this particular legislation. The pretense of the legislation is to speed up the process, to get drugs approved more quickly, to avoid the bureaucracy of the Food and Drug Administration and, quite frankly, there probably is plenty of bureaucracy over there that slows up the process. But if they are not doing a good job, why would speeding up the process necessarily be helpful? If they speeded up the process to get drugs out, like Dexfenfluramine, which is a drug now known to cause heart valve disease, I cannot see the purpose of trying to speed up a process that guarantees very little to the consumer. Quite frankly, the Good Housekeeping seal of approval that the FDA puts on it I question. I favor the original Good Housekeeping seal of approval, something done more privately. But the serious parts of this legislation, which I believe will come back to haunt many in this Congress, and I am predicting they will hear from the constituents and from many groups interested in this issue, in the first way the bill itself internationalized regulations for the first time. The regulations are to conform with all other nations when possible. I do not see this as a positive step in any way. Unfortunately, it diminishes the State's role in regulation and in food labeling and it allows more Federal regulation rather than less. This, to me, is not going in the right direction. We talk a lot about reducing the Federal control, but here is a piece of legislation that comes up rather quickly, no debate, no chance to really debate the issue at all and, at the same time, it enhances and empowers the Federal Government over the States and, at the same time, it introduces this notion that some of these regulations may well become internationalized. In another area that I think we have done a poor job has to do with the budget. If the American people would go by what is said from here, so much optimism, that we are on the verge of having surpluses and we are running around arguing about how to spend the surpluses, I have to take a different side to that argument. I do not see the surpluses. For instance, this past year they say the national debt is down to $30 billion, approximately. Well, $30 billion to a lot of people is still a significant amount of money. So a $30 billion deficit should not be ignored and, quite frankly, I think it is lower than was anticipated more by accident than by what we have done, especially if we look at the budget resolution, which actually introduced more welfare programs, not less. So the fact that we have a smaller deficit is not too reassuring to me. If we look at the increase in the national debt, it suggests another story. The national debt has actually gone up nearly $200 billion in this past year. The national debt went from $5.22 trillion to $5.41 trillion. So why the discrepancy? Why is the deficit so small and yet the national debt is increasing rapidly? There is a very specific reason for this. More money is being borrowed from the trust funds, such as Social Security. That is not the solution. That is a problem.

Mr. PAUL

Mr. PAUL. Mr. Speaker, H.R. 1370, reauthorizing the Export-Import Bank, should be rejected for several reasons. The claim to constitutionality is dubious. The Bank rewards special interest groups with political favors. Reallocating money from the job-producing, productive sectors of the economy to the less efficient sectors distorts credit allocation. Reauthorization of the Bank is both bad economics and bad politics. Article I section 8 of the U.S. Constitution enumerates areas over which Congress has authority. The ninth and tenth amendments further reinforce that powers not vested in the U.S. Congress are reserved to the States or to the people. The fifth amendment of the Constitution forbids the taking from the people in order to subsidize the business of the politically well-connected. It is not through free trade that the Government subsidizes the politically well-connected. Rather, it is through such organizations as the Eximbank. The justification of H.R. 1370 under the general welfare clause of the Constitution stretches the imagination of the intent of the Founding Fathers. Nowhere in the authors' dreams could the general welfare clause be used to tax all American individuals in order to give corporate welfare to a few, specific, large political donors. The supporters of the bill have not satisfactorily explained how the authorization of the Eximbank could be justified as regulating commerce. To construe Congress' power to coin money so broadly as to include the Federal regulation of the provision of credit by creating and perpetuating the Eximbank threatens the intrinsic value of American money itself. As former Federal Reserve Chairman Paul Volcker pointed out, ``The truly unique power of a central bank, after all, is the power to create money, and ultimately the power to create is the power to destroy.'' Even if Congress has the constitutional authority to destroy money incident to its enumerated authority to coin, this is not to say it should do so through the reauthorization of the credit- misallocating Eximbank. The U.S. Government takes money from its citizens through taxes to subsidize other nations' purchases. Very often, our Government subsidizes the purchases by foreign governments, such as the People's Republic of China or other brutal regimes, whose practices many Americans find objectionable. In fact, according to the Export-Import Bank's 1996 Annual Report, the People's Republic of China was the second largest recipient country of U.S. Eximbank loans or loan guarantees; American taxpayers subsidized $4.1 billion of mainland China's purchases. It is one thing to permit voluntary exchanges between citizens of different countries but quite another to coerce the American taxpayer to subsidize the purchases of a country whose practices offend many. Such practices can best be explained by considering the way in which the Eximbank operates. Maria L. Haley, one of the five Bank directors, is a long-time friend of Bill from Arkansas who ran then-Gov. Clinton's program to attract foreign investment in the state. She advocated approval of loans to Pauline Kanchanalak (a Thai native living in Virginia) to set up Blockbuster video stores in Bangkok, Thailand. The Eximbank has never approved financing for franchise rights; retail stores abroad do not create U.S. jobs. Ms. Kanchanalak contributed $85,000 on June 18, 1996, the same day DNC fundraiser John Huang arranged for her to be invited to a White House coffee. Mr. Huang called her that day and twice more in August. The DNC eventually returned $250,000 of Ms. Kanchanalak's donations because of questionable foreign origin. It is clear that the Bank sometimes acts as a slush fund to repay political favors--it is, however, not their money to lend. It is the taxpayers' money. The act of the government taking from its people to return only part of it--and that part with strings attached--is another sign of the so- called Nanny State. The strings are meant to induce the welfare or subsidy recipients to act in a manner that another group of individuals, through the coercive power of the State, subjectively consider desirable. A ``Bully State'' might be a better characterization of such a government. The Frank amendment rightfully acknowledges this fact and attempts to maintain some form of equality of discrimination. The section added by Rep. Bernard Sanders makes an effort to address the charge that the Bank uses taxpayer dollars from both individuals and job-producing small businesses to fund large corporations that export American jobs or downsize their workforce here. If money is to be taken from the paychecks of our citizens, then it should at least be spent on companies showing a commitment to reinvestment and job creation in the United States. That the Eximbank works at cross-purposes with our stated foreign policy objectives is clear. The bank supports state-owned and military- controlled companies in foreign nations at the same time that our foreign policy calls for the privatization of the same companies and limitations on the activities of many foreign military companies. Amendments correcting these problems should be favorably considered by the House. The supporters of the Export-Import Bank will point to the few examples of claimed jobs created through subsidized exports of the beneficiaries of their programs. They will be conspicuously silent on the greater number of jobs lost or forgone, dispersed throughout the country, due to the increased tax burden levied on the productive companies to support the less efficient companies living on government subsidies. The few beneficiaries of government largesse are easier to identify than the no less real, but harder to identify, losers of the government's misguided policies. The funding for the Export-Import Bank affords politicians the opportunity to pay back their contributors with other people's money. By voting for reauthorization of the Bank, those individual politicians that depend on the political support of the few large companies subsidized at taxpayer expense can return the favor. This Congress should put a stop to this special interest favoritism. The Congressional Research Service, in a recent report, noted that the Bank's ``subsidized export financing raises financing costs for all borrowers by drawing on financial resources that otherwise would be available for other uses.'' Small businesses that are the engine of export growth and job creation in this country subsidize the larger corporations that are shedding jobs in America. This misallocation of credit occurs because the larger corporations have the resources to lobby politicians in order to seek special favors that are out of reach of the smaller businesses. These lobbyists will claim that these special interest subsidies are important to the country. Yet with over $600 million funding for the Bank, only $20 billion of our total U.S. exports of $700 billion are subsidized. Arguments that we must reauthorize the Bank because it creates jobs, generates economic growth, and counterbalances the subsidies of our major trading partners is not supported by objective economic data: ---------------------------------------------------------------------------------------------------------------- Percent of Percent country's rate of Percent rate of Country exports real GDP unemployment subsidized growth \2\ \2\ --------------------------------------------------------------------------\1\----------------------------------- Japan.............................................................. 32 0.7 3.1 France............................................................. 18 2.2 11.6 Canada............................................................. 7 2.2 9.5 Germany............................................................ 5 2.1 9.4 Italy.............................................................. 4 3.0 12 U.K................................................................ 3 2.4 8.2 U.S.A.............................................................. 2 2.0 5.6 ---------------------------------------------------------------------------------------------------------------- \1\ Export-Import Bank, 1995 figures. \2\ Bureau of Economic and Business Affairs, 1995 figures. It would be difficult for anyone but the most committed statists to argue that the dirigiste wonders of government bureaucrats could be demonstrated by macroeconomic statistics. However, if there is a broad relationship, it is directly inverse to the relationship the central planners envision. In 1995, according to Export-Import Bank data, Japan subsidized 32 percent of its exports and France subsidized 18 percent while the United States only aided 2 percent of total exports. However in the same year, according to figures from the Bureau of Economic and Business Affairs, Japan's real growth in Gross Domestic Product registered a paltry 0.7 percent against a solid 2.0 percent here in the U.S., and France had an unemployment rate of 11.6 percent, more than double the American rate of only 5.6 percent. Perhaps, following the logic of the Bank's supporters, we should increase the portion of our subsidized exports to nine times the current level (with the accompanying tax increases) to double our unemployment rate, and, if that isn't desirable, we could double that rate of subsidy (again with the increased tax burden) to cut our economic growth rate to one-third its current level. We should not jump off the bridge of special interest corporativism just because our competitors do. ``Corporate welfare does not work anywhere in the world. It does not work because it penalizes a country's winners with excess taxes in order to fund that country's losers with inefficiently run government programs,'' testified Dr. T.J. Rodgers, President and C.E.O. of Cypress Semiconductor Corporation, before Congress in 1995. `` `They've got subsidies; we need subsidies,' is exactly wrong. America will be much more competitive on a relative basis if we allow the nations with whom we compete to squander their taxpayer's money, while we encourage our companies to win without subsidies. It's like the Olympics: there comes the day when an athlete must walk alone into the arena of competition. The government cannot lift the weights and run the miles that are required to be a champion--only an individual can.''

Mr. PAUL

Mr. PAUL. Mr. Speaker, I thank the gentleman for yielding me this time, and I appreciate the characterization of the benefits from the Export-Import Bank as being export subsidies because we are talking about subsidies. Generally speaking, we on this side of the aisle are against subsidies, especially if the subsidies are for the poor people. I just suggest we should question whether we should oppose subsidies for the rich people as well. So I rise in support of the rule. There could be a better rule but, under the circumstance, I support the rule but I do not support the legislation. There are very good economic and there are very good moral reasons why programs like this should not even exist. I do want to take a moment to talk about something else I think is very important. Sometimes I think if one takes themselves too seriously around here one would become depressed, and I try very hard not to be depressed. But I found something in the committee report that I think is very, very interesting. We have a House rule that says that in the committee report on legislation, when it comes up, we have to explain which part of the Constitution justifies what we do here. Of course, there is legislation that is proposed that if we pass the legislation it would be the law and we would have to answer to that antiquated document, the Constitution. I happen to be so old-fashioned as to believe that if we were all as serious about the Constitution, all we would have to do is vote the Constitution and those convictions each day and we would not need rules or laws. But nevertheless I think it is interesting to note exactly where the constitutional authority comes from for the Export-Import Bank. Of course, the old standby is the general welfare clause. We do this for the general welfare of the people. But if we think about it, we are using taxpayers' money, we are using subsidized interest rates, we are benefiting certain companies, and we do benefit the foreign recipients and many times these are foreign governments, so they are not the general welfare. If it is a cost to the taxpayer, we are doing this at a penalty of the general welfare, not to the benefit of the general welfare. This is a wastebasket used especially in the 20th century as a justification for doing almost anything in the Congress. But then the justification goes on, and I find this even more fascinating. Of course, the other justification is the power to regulate commerce. Well, regulating commerce between the States, actually the commerce clause was written to deregulate and make sure there were no impediments against trade, so we cannot under the Constitution regulate trade. But that does not say subsidize certain people at the expense of others. So that was a giant leap in the 20th century where the regulation of commerce permits us to do almost anything. It certainly rejects the whole notion and challenges the whole concept of the doctrine of enumerated powers. So we either have a Constitution where there is a doctrine of enumerated powers or we do not. The document is very clear. It delegates powers. The powers are very limited and they are numbered. They are enumerated. But today, if we casually look at the welfare clause, and if we casually look at the regulatory clause on commerce, we here in the Congress, under that understanding, we can do just about anything. And what happens? We do just about anything. And that is why our Government is so big and our regulatory bodies are so huge and we have tens of thousands of pages of regulations, because we have so little respect for the document that we should be guided by. But there is another justification, according to the committee report, as to why we should and are permitted to pass legislation like the Export-Import Bank. Now, this one has to catch somebody's interest and it has to be slightly humorous to somebody other than myself. In addition, the power to coin money and regulate its value gives us the justification to give subsidies to big corporations, to benefit companies overseas, to take credit from one group and give it to another, and to steal the money from the people through an oppressive tax system in order to provide these subsidies. And yet the justification is to coin money? The Constitution still says that all we can do is use gold and silver as legal tender. Since we do not do that, we should have changed the Constitution. We should do one or the other. But to use the coinage clause to extend credit is a stretch beyond belief. It says, though, that the courts have broadly construed this to allow Federal regulation, the provision of credit, to provide credit. Well, this is exactly opposite of what the founders said and exactly opposite of one of the major reasons why we had the Constitutional Convention. This power that they take through the coinage clause in order to extend credit is exactly opposite of the provision in the 1792 Coinage Act, which says we have to protect against counterfeiting, and anybody who would be so bold as to debase the currency and ruin the value of the money, there was a death penalty mandated. But here we casually give to our agencies of government this authority under the coinage clause to provide credit. Credit is nothing more than the dilution of the value of money. And believe me, long term, this is detrimental. Later on in the general debate, I would like to address the economic issues as well.

Mr. PAUL

Mr. PAUL. I thank the gentleman for yielding time to me, Mr. Chairman, and for the disclaimer. Mr. Chairman, it is correct, I am going to vote no on this bill, for various reasons. I stated some of those earlier on. One is constitutional. There is a strong moral argument against a bill like this. But I am going to talk a little bit about the economics. Also, one other reason why I am going to vote against this bill has to do with campaign finance reform. If we vote no against this, I think we would be working in the direction of campaign finance reform. I myself get essentially no business PAC money. I do not have any philosophic reasons not to take it. I would take the money on my conditions, but that sort of excludes me. But not infrequently when I would visit with large corporations they would ask me, what is my position on the Export-Import Bank. And when they would find out, of course they would not give me any money. So I would say that the incentive to get people to do certain things for subsidies gives this incentive for big corporations to subsidize and to donate money to certain politicians. If we did not have so much economic power here, there would not be the incentive for big business to come and buy our influence. Mr. Chairman, I do not happen to believe that campaign finance reform will ever be accomplished by merely taking away the right of an individual or company to spend money the way they see fit. Regulating finances of a company, once a company can come in here and put pressure on us to pass the Export-Import Bank, I think is an impossible task. There have been certain economic arguments, so-called, in favor of this bill, but I think there are some shortcomings on the economics. One thing for sure, I think even the supporters of this bill admit that this is not free trade, this is an infraction that we have to go through because the other countries do this. But we might compare this. It is true, we subsidize our companies less than Japan, but would Members like to have Japan's economy right now? Japan has been in the doldrums for 8 years. They subsidize it 30, 40, 50 percent of the time. Maybe it is not a good idea. Yes, ours are small in number, but why should we expand it and be like Japan? So I would suggest that the benefits, the apparent benefits, are not nearly as great as one might think. The other thing that is not very often mentioned is that when we allocate credit, whether we expand credit, which was mentioned earlier, that we do expand credit, we extend credit, we allocate it, we subsidize it, so we direct certain funds in a certain direction, but we never talk about at the expense of what and whom. When a giant corporation or even a small business gets a government- guaranteed loan, it excludes somebody else. That is the person we never can hear from, so it is the unseen that is bothersome to me. Those who get the loans, sure, they will say yes, we benefited by it. Therefore, it was an advantage to us. But we should always consider those individuals who are being punished and penalized, that they do not have the clout nor the PAC to come up here and promote a certain piece of legislation. Another good reason to vote against this piece of legislation, it is through this legislation that we do support countries like China and Russia. This is not supporting free markets. They are having a terrible time privatizing their markets. Yet, our taxpayers are being required to insure and subsidize loans to state-owned corporations. China receives the largest amount of money under Eximbank. I do believe in free trade. I voted for low tariffs for China. I support that. But this is not free trade. This is subsidized trade. It is the vehicle that we subsidize so much of what we criticize around here. Some people voted against low tariffs for China because they said, we do not endorse some of the policies of China. They certainly should not vote for the subsidies to China nor the subsidies to the corporations that are still owned by the state in Russia, because it is at the expense of the American taxpayer. It is said that the companies that benefit will increase their jobs, and that is not true. There are good statistics to show that the jobs are actually going down over the last 5 or 6 years. Jobs leave this country from those companies that benefit the most. It is also said quite frequently here on the floor that this is a tremendous benefit to the small companies. Eighty-some percent, 81 percent of all the loans made go to small companies. There is some truth to that. That is true, but what they do not tell us is only 15 percent of the money. Eighty-five percent of the money goes to a few giant corporations, the ones who lobby the heaviest, the ones who come here because they want to support high union wages and corporate profits for sales to socialist nations and socialist-owned companies. For these reasons, I urge a no vote on this bill.

Mr. PAUL

Mr. PAUL. Mr. Speaker, just a short while ago we had a vote to cut $54 million out of the U.N. appropriation. The vote tally was 242 to 165, 165 in favor of cutting this $54 million of so-called past dues. I want to compliment the gentleman from Maryland [Mr. Bartlett] for bringing to this our attention, because I think it is a very important point, because we are never reimbursed for all of the peacekeeping missions throughout the world. Therefore, they actually owe us, we do not owe them. So it is rather sad to see that we, as a Congress, cannot rectify this; instead, we vote more funds for the United Nations. Of course, I do not hide the fact that I do not think a lot about the United Nations. I think ultimately it is very detrimental to America's policy and very detrimental to our sovereignty, so I have a specific agenda in that regard. Actually, the problems we face with the United Nations can be solved, because there has been a compromise offered. Instead of abolishing the United Nations like I would like to do, I think Ted Turner has offered us a real solution. Ted Turner is a very wealthy man, has made a lot of money in the capital system, and he is voluntarily willing to submit $1 billion to continue with the United Nations, and I think that is fine. I think the United Nations ought to be funded by donations such as from Ted Turner. An additional advantage of having Ted Turner send his money to the United Nations, we can be assured that with the next war started by the United Nations, we can send Jane Fonda to do the fighting for us. On another subject, I want to just mention something about the recent discussions we have had here on the floor here in the last week on the pay raise. I am not in favor of the pay raise. I voted against the pay raise. As a matter of fact, I think our pension fund is outrageously obscene, and I do not participate in it. But in comparison to some other matters, I think the amount of attention that we gave to the pay raise is probably a little bit more than needed to be done. For instance, the pay raise, after taxes, would come to $40 a week, but nevertheless, I think the point was well taken that we should not be taking a pay raise when so many people in this country are actually suffering the consequence of a decreasing standard of living. Until we solve that, I do not believe we should be taking a pay raise. That so- called pay raise would have been a 2.3-percent COLA increase. But in comparison to what we were doing in the particular bill that that was attached to, the Treasury-Postal Service appropriation, informed many Members of the Congress that were not aware of it, but in this bill, we actually increase the budget for the IRS by more than a half a billion dollars. At the same time we hold these grand hearings, make grand speeches against the IRS, and at the very same time we are expanding the role and the power and the authority of the IRS by expanding their budget by more than a half a billion dollars. Then there is another agency of government that is probably the second least favorite of mine to the IRS, and that is the BATF. The BATF budget was increased 14 percent. It went up $66 million. So at the time we were talking about a small cost-of-living increase for Congress, which again I oppose, we at the same time were pretending that we were fighting this IRS and the abuse of the IRS, but expanding the role of the IRS. I think what we need to do is get things in perspective. I think that first off, we should exist here for the liberty, protection of liberties of American citizens; we should be protecting the sovereignty of the United States; we should not be paying the dues out of proportion to what everybody else pays throughout the world at the same time we sacrifice much of our liberties and we live in a nation today where our troops are actually serving under the commanders of foreign generals. Everybody I talk to, everybody in my district I talk to, they do not like this. They would like to see this change. So once again, I would like to express the sadness about the recent vote that we could not even cut the $54 million away from what is called overdue back dues for the United Nations. I think it is so important that we put all of this in perspective. Yes, we do not need pay raises, but we certainly do not need to raise the amount of money we give the IRS and the BATF.

Mr. PAUL

Mr. PAUL. Mr. Speaker, earlier this year, another Member severely criticized me on the House floor for declaring on C-SPAN that indeed many Americans justifiably feared their own government. This fear has come from the police state mentality that prompted Ruby Ridge, Waco and many other episodes of an errant Federal Government. Under the constitution, there was never meant to be a Federal police force. Even an FBI limited only to investigations was not accepted until this century. Yet today, fueled by the Federal Government's misdirected war on drugs, radical environmentalism, and the aggressive behavior of the nanny state, we have witnessed the massive buildup of a virtual army of armed regulators prowling the States where they have no legal authority. The sacrifice of individual responsibility and the concept of local government by the majority of American citizens has permitted the army of bureaucrats to thrive. We have depended on government for so much for so long that we as people have become less vigilant of our liberties. As long as the government provides largesse for the majority, the special interest lobbyists will succeed in continuing the redistribution of welfare programs that occupies most of Congress's legislative time. Wealth is limited, yet demands are unlimited. A welfare system inevitably diminishes production and shrinks the economic pie. As this occurs, anger among the competing special interests grows. While Congress and the people concentrate on material welfare and its equal redistribution, the principals of liberty are ignored, and freedom is undermined. More immediate, the enforcement of the interventionist state requires a growing army of bureaucrats. Since groups demanding special favors from the Federal Government must abuse the rights and property of those who produce wealth and cherish liberty, real resentment is directed at the agents who come to eat out our substance. The natural consequence is for the intruders to arm themselves to protect against angry victims of government intrusion. Thanks to a recent article by Joseph Farah, director of the Western Journalism Center of Sacramento, CA, appearing in the Houston Chronicle, the surge in the number of armed Federal bureaucrats has been brought to our attention. Farah points out that in 1996 alone, at least 2,439 new Federal cops were authorized to carry firearms. That takes the total up to nearly 60,000. Farah points out that these cops were not only in agencies like the FBI, but include the EPA, U.S. Fish and Wildlife, and the Army Corps of Engineers. Even Bruce Babbitt, according to Farah, wants to arm the Bureau of Land Management. Farah logically asks, ``When will the NEA have its armed art cops?'' This is a dangerous trend. It is ironic that the proliferation of guns in the hands of the bureaucrats is pushed by the antigun fanatics who hate the second amendment and would disarm every law-abiding American citizen. Yes, we need gun control. We need to disarm our bureaucrats, then abolish the agencies. If government bureaucrats like guns that much, let them seek work with the NRA. Force and intimidation are the tools of tyrants. Intimidation with government guns, the threat of imprisonment, and the fear of harassment by government agents puts fear into the hearts of millions of Americans. Four days after Paula Jones refused a settlement in her celebrated suit, she received notice that she and her husband would be audited for 1995 taxes. Since 1994 is the current audit year for the IRS, the administration's denial that the audit is related to the suit is suspect, to say the least. Even if it is coincidental, do not try to convince the American people. Most Americans, justifiably cynical and untrusting toward the Federal Government, know the evidence exists that since the 1970's both Republican and Democratic administrations have not hesitated to intimidate their political enemies with IRS audits and regulatory harassment. Even though the average IRS agent does not carry a gun, the threat of incarceration and seizure of property is backed up by many guns. All government power is ultimately gun power and serves the interests of those who despise or do not comprehend the principles of liberty. The gun in the hands of law-abiding citizens serves to hold in check arrogant and aggressive government. Guns in the hands of the bureaucrats do the opposite. The founders of this country fully understood this fact.

Mr. PAUL

Mr. PAUL. Mr. Speaker, I ask unanimous consent that the name of the gentleman from Florida [Mr. Hastings] be removed as cosponsor of my bill, H.R. 2029, the Selective Service Registration Privacy Act of 1997. His name was placed on this legislation in error.

Mr. PAUL

Mr. PAUL. Mr. Chairman, I move to strike the requisite number of words. (Mr. PAUL asked and was given permission to revise and extend his remarks.)

Mr. PAUL. Mr. Chairman, I rise in support of the amendment offered by the gentleman from Pennsylvania [Mr. Goodling] to prohibit the expenditure of Federal funds for President Clinton's national testing scheme. The amendment of the gentleman from Pennsylvania would prevent the Department of Education from developing a national test unless authorized to do so by Congress. While I share the concerns of the gentleman from Pennsylvania [Mr. Goodling] that the administration should not take such a drastic step as developing national testing without congressional authorization, and I thank the gentleman for all his leadership in fighting for this amendment, the fact is the Federal Government has no constitutional authority to develop national testing even with congressional approval. National testing is another significant step toward total nationalization of education. National testing will ultimately lead to fulfillment of the dream of the enemies of the constitutional system of local and parental control of education, the de facto creation of a national curriculum. Mr. Chairman, the administration claims that the testing program would be voluntary. However, I remind my colleagues that this is the same administration that considers the Goals 2000 a voluntary program, despite the numerous times Goals 2000 uses the terms ``shall'' and ``must'' in describing State functions. Furthermore, whether or not schools are directly ordered to administer the tests, schools will face pressure to do so as colleagues and employers inevitably begin to use national tests as the standard by which students are measured for college entrance exams and entry-level jobs. At the very least, schools would soon find Federal and perhaps even State funding dependent on their voluntary participation in the national testing programs. When all or at least the majority of the schools are administering national tests, the tests will then be the standard against which all schools will be measured. Those schools whose students did poorly on the national test would be labeled as doing a poor job of educating children. Educators would react to this pressure to ensure that students scored highly on the national test by teaching the test; that is, structure the curriculum so students can learn those subjects and only those subjects covered by the national tests. As University of Kansas professor John Poggio remarked in February, ``What gets tested is what will be taught.'' Government bureaucrats would control the curriculum of every school in the Nation, and they would be able to alter the curriculum at will by altering the national test. Private schools and home schools will be affected as well, as performance on the national tests become the standard by which student performance is judged. Those in private and home schools will face increasing pressure to participate in national testing and to shape what is taught to the criteria of the test itself. The Department of Education has already admitted its ultimate aim is for a national curriculum. According to a United Press International story on the national assessment of educational progress reprinted in the Santa Rosa Press Democrat in May, ``The Education Department * * * hopes the kinds of questions involved in the voluntary test will shape the way science is taught.'' Mr. Chairman, under the United States Constitution, the enumerated powers of the Federal Government simply do not include education. Yet the Clinton administration's national test proposal will inevitably result in Federal bureaucrats dictating what every child in America will be taught. National testing represents another giant step in the centralizing of American education and a giant step away from America's constitutional republic. I therefore urge my colleagues to join me in opposing all moves to implement a national testing scheme, starting by supporting the amendment offered by the gentleman from Pennsylvania [Mr. Goodling] to prohibit the expenditures of Federal funds to develop and administer a national testing program without explicit authorization from Congress.

Mr. PAUL

Mr. PAUL. Mr. Speaker, today we are asked to support a bill which has the Federal Government engaged in the unconstitutional business of further regulating mortgage brokers, extending Federal housing programs--some of which would be extended permanently by this bill--and offering flood insurance programs. This bill will add new regulations by Government and impose new restrictions on the private sector which provides most of the safe and affordable housing in this country. Such regulations and restrictions raise costs and limit availability of housing for our citizens insofar as such additional costs may ultimately be passed along to the consumer. This bill will further add to the Federal Government's intrusion in the housing market by limiting private sector initiatives to help consumers obtain mortgage loans, and eventually, their own homes. Second, this bill would make authorization of some programs permanent so that future representatives of the people will not be able to judge the wisdom of these specific programs. To the extent Congress has any constitutional right to legislate in this sphere at all, certainly, Representatives must have the legal ability to weigh the specific needs of their constituents and make appropriate decisions. Some of these multi-housing programs are mere demonstration projects which have not proved their worthiness. They have, however, proved their cost to the taxpayer with ever-rising tax bills without the corresponding benefits. Government-run housing schemes are less efficient, more costly and limit the private sector's ability to provide the services that the public wants at a price that properly takes into account true economic costs. Even such misnamed ``good government'' housekeeping provisions merely perpetuate and extend the Government's reach into the private sector and, ultimately, into the wallets of taxpaying Americans. With respect to Federal flood insurance programs, the constitutional separation of powers strictly limited the role of the Federal Government and, at the same time, anticipated that maintaining the balance between cost, risk, and the benefits of insuring one's property was best reserved--via the ninth and tenth amendments--to State and local governments, or individuals respectively. One can insure oneself against virtually every natural disaster at some policy premium. Determination of whether the peace of mind and other benefits of insurance outweigh the premium for any particular property is not amongst the constitutionally enumerated Federal powers. The private market provision and resulting cost internalization of such insurance premiums will accomplish much toward enhancing macroeconomic efficiency and, at the same time, eliminate the necessity for the national government to overstep its constitutional bounds with governmental ``pseudo-insurance.'' In addition, this bill did not go through the proper committee process. I am a member of the House Committee on Banking and Financial Services and have not had the opportunity to vote on, amend, improve, or block this piece of legislation. It is in the committee process, where respective Members make it their responsibility to be better versed in that committee's respective issues, amend and hopefully improve bills as they move through the legislative process. Members of the Banking Committee should have had the opportunity to review relevant legislation before it is voted on by the entire House of Representatives. As a U.S. Congressman, I remain committed to the Constitution which I, only months ago, swore to uphold. This country's founders recognized the genius of separating power amongst Federal, State and local governments as a means to maximize individual liberty and make Government most responsive to those persons who might most responsibly influence it. For each of these reasons, I must rise in opposition to S. 562, the Senior Citizen Home Equity Protection Act.

Mr. PAUL

Mr. PAUL. Mr. Speaker, I ask unanimous consent that when the House adjourns today, it adjourn to meet at 12:30 p.m. on Monday next for morning hour debates.

Mr. PAUL

Mr. PAUL. Mr. Speaker, I have asked for this time today to express my deep concern for the recent military buildup in Bosnia. I think this is a dangerous situation and I would like to call it to the attention of my colleagues here in the Congress. This is something that has been going on for a long time. Many of us have tried to get our troops out of Bosnia and out of harm's way, but so far that has not been the case. Yesterday, the U.S. Defense Department announced that they would be adding more aircraft in this region. There will be 6 more F-16's sent to this region, taking the total number up to 24. They will be flying out of Ariano, Italy, and the purpose is to patrol the Bosnian skies. The purpose that is stated is to provide deterrence and to provide a peaceful situation to a very difficult problem that has existed not for a few months or for a few years but for decades, if not hundreds of years in this region. Instead of providing deterrence and a peaceful effort being made here, I believe our contribution is going to do nothing more than escalate the problems of that region. The recent buildup has also been said to be necessary because it is supposed to guarantee an election process. During the last year there were two attempts to hold elections in this region but, due to the political turmoil there, the elections have had to be canceled. Again, they are trying to have another election. Our presence there is supposed to provide the stability to a region that is inherently unstable, and I challenge this notion whether or not this can even be achieved. In addition to the troops and the aircraft that have gone in, we are sending, the international bodies have sent in 2,600 election monitors. The odds of this providing stability to an election are very, very slim. Last month there were some additional troops sent into Bosnia. Not much was said about this. There were not very many reports in the media regarding this, certainly no discussion here in the Congress. But we have had 8,000 troops stationed in Bosnia. We have added 1,600 more. So we are now in the process of adding aircraft and adding personnel in a situation which puts our troops in jeopardy. It was not too long ago that our troops were stoned and homemade weapons were used against them. The NATO forces just recently took control of a television transmitter and said that the information over this transmitter was not acceptable. Just recently that transmitter was returned in hopes that the return of the transmitter to the Serbs would calm the personnel there, the people there, so that the elections could be carried out. But just the thought of taking over the transmitter is one thing. But the conditions that were placed on the Serbs in the return of the transmitter is something else again. Our Pentagon official threatened the Serbs that if they violated the instructions that were given the television station, it would be a clear cut justification for NATO forces to retaliate. In the best of diplomatic jingoism, our Pentagon official, as quoted in the Washington Post, said, if they do not comply, we will whack them. Hardly do I think this policy will lead to peace and a wonderful election. I really challenge the Congress here for us, in the continuation of the funding of a military operation that is doomed to fail. It is a real tragedy that we get promises made by the administration. The troops were supposed to be in there until December 1996 and here they are, another year, supposedly, they are supposed to come out next July, but the way things are going there and by the way we comply, we are complicit in this operation and provide the funds, the odds of our troops being out of there next July are very, very slim. This raises the question about overall policy. Traditionally, the American foreign policy, up until the latter part of this century, has been that we should have a policy of noninterference, nonintervention in the affairs of other nations and also that of neutrality with all nations. This is proper under the Constitution. This has been traditional. Instead, we should be concentrating on national security issues. We should be concerned about what the American position is, and we should not pretend that we know what is best for everybody because we do not.

Mr. PAUL

Mr. PAUL. Mr. Speaker, I ask unanimous consent that the business in order under the Calendar Wednesday rule be dispensed with on Wednesday next.

Mr. PAUL

Mr. PAUL. Mr. Speaker, NATO has announced it will now use lethal force in Bosnia. NATO, of course, means the United States, both our dollars and our troops. Little concern is shown here in Congress as we appropriate billions of dollars more for Bosnia with no end in sight. Policing this area is an impossible task as NATO interferes with TV broadcasts and arresting and trying so-called war criminals. Current policy is only leading to an escalation of the conflict. Ethnic hatred and border fights have been going on in this region for centuries. Mr. Speaker, the United States will not solve these problems. It is impossible for us to do so. We are already being blamed by the Bosnians as our troops are being attacked with stones and homemade weapons. Congress must bear some of the responsibility for the coming policy disaster. The President cannot act without funds, funds which only Congress can appropriate. Our efforts in Bosnia have nothing to do with national security. We have a responsibility to our troops and our current policy exposes them to unwarranted danger. Congress must defund the Bosnian conflict. The sooner we get out of Bosnia, the better.

Mr. PAUL

Mr. PAUL. Mr. Chairman, that is true directly, but indirectly the fungibility argument is very important. If you use funds for other things, you say the governments and agencies can use them for abortion. So you do it indirectly. Yes, it might be a little harder to comprehend the fungibility argument, but it is there. If we support a country or a government or an agency that does permit and endorse abortion and they can use these funds for birth control pills, they can use their other funds to do the abortion. So, yes, the gentleman is correct that directly there are no funds in this bill that will provide for abortion. But indirectly it opens up some funds and makes them available for abortion.

Mr. PAUL. Mr. Chairman, if the gentleman would yield further, the efficiency of the programs are to be questioned. If you look at the Norplant program, they put this Norplant in hundreds of thousands of women. It is not a good medication. I have personal experience from it. Then they use that as an example of the reason to promote it in the United States.

Mr. PAUL. Mr. Chairman, I am addressing the fungibility argument.

Mr. PAUL. Mr. Chairman, I offer an amendment.

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

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