Paul Sarbanes

Mr. SARBANES

Mr. SARBANES. Will the Senator yield for a moment?

Mr. SARBANES. Now, these are the steps that transpired that led us to this point. And pursuant to this support of the leadership, the backing of the congressional leaders, the very explicit statements of Speaker Gingrich and Majority Leader Dole, the administration proceeded to use the Exchange Stabilization Fund on the basis of the package that had been outlined. Now, in effect, that approach would be negated by this amendment. That is what this amendment would do. And obviously, such a negation has very broad consequences, conceivably even immediately as the markets would react to this proposal that is before us. Now, make no mistake about it, an effort was made to provide assistance to Mexico. Many Members of this body loan guarantee proposal to the Congress and sought the approval of the Congress. Time passed. That approval was not immediately forthcoming. The crisis worsened. The administration then responded, in effect, to a signal from the leadership in which they indicated that they would welcome the President acting. So the President moved to use the Exchange Stabilization Fund, a provision under existing law. That use was strongly supported in a joint statement by the leadership, and a package was put into place which gives some signs of working. No one can guarantee it. And there are risks associated with it. One would be clearly imprudent to pass over the risks. But the risks connected with not doing anything were very clearly made earlier by majority leader Dole in one of his statements as we were proceeding to consider this matter. So, Mr. President, this is an interesting exercise that is going on on the floor today, but I think it very important to place it in the context of what has transpired and to make very clear, first, the administration coming to the Congress, the response of the congressional leaders, and then the support of the congressional leaders for using the Exchange Stabilization Fund. Exhibit 1 white house, congress joint statement on mexico Washington, Jan. 12 (Reuter).--President Clinton and Congressional leaders issued the following joint statement on Mexico's currency crisis after a meeting at the White House. ``We agree that the United States has an important economic and strategic interest in a stable and prosperous Mexico. Ultimately, the solution to Mexico's economic problems must come from the people of Mexico. But we are pursuing ways to increase financial confidence and to encourage further reform in Mexico. We agree to do what is necessary to restore financial confidence in Mexico without affecting the current budget at home.''

Mr. SARBANES. Certainly.

Mr. SARBANES. Mr. President, first of all, I think it is very important to set the record straight in view of the comments by my colleague from New York that any action was taken in violation of law or in contravention of law. He may differ with a policy. That is what serving here is all about. But to charge people with illegalities is a different matter. The Department of Justice, the Assistant Attorney General, issued an opinion that found the use of the Exchange Stabilization Fund to provide loans and credits to Mexico was legal, and that opinion supported an opinion of the general counsel of the Department of the Treasury which reached the same conclusion. In a memorandum from the Assistant Attorney General to the general counsel of the Treasury Department, a cover memorandum to his opinion, he said: Prior to the execution of the agreements--these are the agreements with Mexico--we orally advised your office that in our view the President and the Secretary could use the ESF in the manner contemplated by the President when he proposed a support package. We also provided comments on drafts of a legal opinion prepared by your office for the Secretary regarding such use of the ESF. This memorandum confirms the oral advice we provided to your office. It also confirms that we have reviewed the final version of your legal opinion and that we concur in your conclusion that the President and the Secretary have the authority to use the ESF in connection with the support package. Now, if the Senator from New York wants to attack the policy, that is one matter. But he ought not to accuse people of contravening the law unless he can lay out a case to support that. There are two strong legal opinions here, one by the general counsel of the Treasury Department and one by the Assistant Attorney General, that support the authority of the President and the Secretary to use the ESF in connection with this support package. I want to be very clear about that. There was a saying in World War II, ``Loose lips sink ships.'' I do not see why people who are trying to do the best they can to deal with a problem and to establish a policy ought to come under attack as having contravened the law when, obviously, they had strong legal opinions both from the Department of Justice and from the general counsel of the Treasury Department that the action they proposed to take was within the authority of the President and of the Secretary of the Treasury and when, in fact, the congressional leadership agreed, as well. In fact, they said in the statement of January 31 by the President and Speaker Gingrich and Majority Leader Dole and leaders Gephardt and Daschle, ``We further agree that under title 31 of the United States Code, section 5302, the President has full authority to provide this assistance.'' That is, assistance that was going to be provided under the Exchange Stabilization Fund. So let Members quarrel if we choose to do so about the policy, but let Members not levy charges of illegal action when clearly there was none. Let me make one final point about the policy. When the Congress indicated difficulty in arriving at support for the $40 billion loan guarantee, which was the initial proposal--the use of the Exchange Stabilization Fund was going to be half of that amount--but when they had difficulty, the leadership then indicated to the President, ``We think you should use the Exchange Stabilization Fund.'' Now, that is what happened. They went ahead with that package about 6 or 7 weeks ago. That was the plan that was put into affect in order to try to address the crisis in the Mexican economy. Now, if people had said, ``Do not use the Exchange Stabilization Fund,'' I assume the administration would have pursued its efforts to try to gain congressional approval, which it may or may not have gained. In that debate, many of the points that are being raised here on the floor would have been relevant to reaching a judgment. The use of the fund was a judgment the President made. The congressional leadership supported him. There was general acquiescence by the Congress. Here we are, 7 weeks later, after this plan has been put into effect, after this package has been devised, after the agreements have been reached with the Mexicans, after we have tried to get a package working, and now we are going to pull the rug out from under this package. Now, make no mistake about it, that is in effect what is being done here. People need to clearly understand that that is the case. The fact is that we had executive-legislative cooperation to try to find a common approach to resolve this problem. It was achieved. Now we have some Members coming and seeking to undo it. The fact is we have a program that is under way. This, in effect, would negate that program. Be very clear about that. It would negate the program. It does not have an alternative connected with it. It is not as though someone was saying, ``Well, look, I am not so sure about your program, and I have a better program. Here is my program, and it is part of this amendment. It is part of this amendment that I have before you now, right here.'' That is not the case. There is not an alternative program connected with this. This is a negation of the existing program, with all the consequences that will flow from that. And there are severe and serious consequences. So, if the bottom line of the supporters of this program is not that Mexico can simply collapse--if that is the bottom line, I understand this amendment. Because this amendment would negate the existing program designed to avoid that collapse. It does not substitute a different program to avoid the collapse. So, if your bottom line is: Fine, it ought to collapse, then that is consistent with the amendment that is before us. That is the degree and the extent of the serious ramifications and consequences of the proposal that is before this body. Several Senators addressed the Chair.

Mr. SARBANES. Will the Senator yield on that point?

Mr. SARBANES. What is an administration to do? They come to the Congress with a package. Then the leadership said we are having some difficulty with that package, why do you not use the stabilization fund? They get legal opinions saying they have the authority to use the stabilization fund. They get strong support from the leadership and a general acquiescence from the Congress. Let us be honest about it, that is what it amounted to. Most Members of the Congress said, ``If the President wants to take the risk and the burden, you know, let it fall on his shoulders and in that way we will deal with the Mexican problem but I will not be directly implicated, as it were.'' So they move ahead with it and there is a rescue package in place. Now people come along with an amendment which will destroy that rescue package. Make no bones about it, that is exactly what it will do. They do not have an alternative rescue package. They are negating the existing one, unconnected to a replacement package. So, in effect the consequences of a collapse run directly with this amendment, in my judgment. This is serious business we are talking about here. This is not simply making sort of political points. This is not simply doing oversight, where you put them on the griddle but, you know, the policy continues. This is ending the package and taking the consequences. Is that not correct? Is that correct?

Mr. SARBANES. Mr. President, on that day, the IMF announced that the IMF was prepared to provide just under $18 billion standby credit to Mexico. The central banks of a number of industrial countries also said that they would consider providing $10 billion in short-term support through the Bank for International Settlement. So the second approach drew in greater support out of the international community than had been provided for in the first approach. A Reuter's report of January 31 stated, and I quote: Senate Republican leader Bob Dole said Congress' Republican and Democratic leaders would write President Clinton a letter backing his new Mexican aid plan. ``He won't be out there by himself,'' Dole told reporters. Dole said he, House Republican Speaker Newt Gingrich, Senate Democratic leader Daschle, and House Democratic leader Gephardt would send Clinton the letter of support. Dole said he had checked with other Senators, including some who had opposed Clinton's request for $40 billion in loan guarantee for Mexico, before deciding to write the letter. ``In my opinion, most everybody is on board supporting Clinton's new plan to commit $20 billion from the U.S. Currency Exchange Stabilization Fund'', Dole said. A New York Times article of February 2 quoted Speaker Gingrich as follows: ``The President exercised his authority,'' Mr. Gingrich said today. He took a tremendous burden on his shoulders. He did what key leaders felt was necessary. I think people at a minimum should recognize the President had the courage to do what he was being told by the very sophisticated experts was vital to reinforce international markets. Mr. President, I ask unanimous consent that those two articles be printed in the Record.

Mr. SARBANES. This amendment is not related----

Mr. SARBANES. This matter that has been offered by the Senator from New York is not relative to the rescission bill; is that correct?

Mr. SARBANES. Is it not true that the Senator has the right to offer the amendment, since under the rules of the Senate, you may offer an amendment to a measure that is not relevant to the measure? Generally, there is a certain amount of self-restraint practiced around here, so that you do not completely exercise your rights to the fullest. But the Senator has the right to offer it, if he chooses to do so, even though it is not relevant to the measure; is that correct?

Mr. SARBANES. One could also raise a question whether even if you have the right, you ought to exercise it. You do not always exercise every right to Is it not the case that this amendment, in effect, raises the whole basic question about responding to the Mexican economic crisis, and that a proposal of this sort, if it is to be considered, ought to have extensive consideration? This is not a minor matter that should simply be dealt with in an hour or two in this Chamber. This is a major proposition that ought to be carefully examined. Does the Senator agree with that?

Mr. SARBANES. Will the Senator yield for a further question?

Mr. SARBANES. Is it not reasonable to assume that if we had followed the normal process and come through the committee and a measure of this sort had been brought to the floor, the debate and the examination of that measure might well take days? That would then be a major item on the calendar of the Senate, would it not, since this is a major issue? It is not as though it is the kind of proposition that the Senate would dispose of, if it was dealing with this freestanding, in an hour or two. The Senate, in effect, would recognize it as the major item to be considered in the particular week in which it was going to be brought up, would it not?

Mr. SARBANES. Will the Senator yield?

Mr. SARBANES. I think there is a great deal of force in what the chairman of the committee has just stated, and I obviously recognize that. I think it is very important to underscore a point made by my colleague from Connecticut. We did not bring this amendment here. I mean, this amendment has enormous consequences associated with it, as my good friend from Illinois has pointed out. It was not placed before the body by those of us who have been speaking now for----

Mr. SARBANES. No, no, no.

Mr. SARBANES. Yes. But we have been speaking for about an hour. We are very much on the down side of that time with respect to addressing this amendment.

Mr. SARBANES. That is the point I wanted develop further, because the Senator is asking to set it aside. It seems clear to me, as I said earlier, this is the kind of proposal which, if it were here on its own as a bill reported from the committee, would be debated for a number of days, because its consequences are that momentous. The Senator from Connecticut is absolutely right when he said the bill, the rescission bill, is important, but its importance is dwarfed by the potential consequences of this measure. I think that needs to be understood. One way to make it understandable, of course, is, when we come to grips with a measure, to have the kind of debate that is required with an issue of this importance. Now that can happen now or it can happen later. I understand the concerns of the chairman of the committee, but I do not think there should be any laboring under some misapprehension that by setting it down the road you are somehow going to change the dynamic of the concern about the consequence of the amendment if it came at that time.

Mr. SARBANES. And the 1 o'clock in the morning can be 1 o'clock, it can be 3 o'clock and so forth. This is a tremendously consequential amendment that is before us.

Mr. SARBANES. Yes.

Mr. SARBANES. If the Senator would yield.

Mr. SARBANES. Yes, for a question. I listened carefully to the chairman of the Appropriations Committee. As I listened to him, my concern increased, it did not decrease, I have to say to my good friend from Oregon. If, in effect, what you are saying to me is, by setting it aside, we will then structure this thing so we will go back to it at 1 o'clock in the morning, or whatever time when we will not discombobulate all of our colleagues and inconvenience them. And then those who are supposedly engaged in a minifilibuster, which I would not view it as such--we did not offer this amendment. I think it is irresponsible that this amendment is before us. It is not related to this bill.

Mr. SARBANES. That is right, we have joined the issue. But the irresponsibility of this situation rests upon the offerer of the amendment, not by those that are responding to the amendment. And I am not going to have that responsibility shifted in the course of this discussion.

Mr. SARBANES. Why does the author not withdraw the amendment? Why does the author not withdraw the amendment and the consideration of the rescission bill can proceed?

Mr. SARBANES. Let him withdraw it. He can offer it later, if he chooses to do so.