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May 6, 1987 EXTENSIONS OF REMARKS 11569 EXTENSIONS OF REMARKS PRESIDENT REAGAN'S SPEECH strength from the other and that together tions of millions for freedom still hang in we hold the sacred trust of democratic gov­ the balance. ernment and freedom. The life and hope of The elected leaders of neighboring Cen­ HON. ROBERT J. LAGOMARSINO in an all-too-often threatening tral American countries understand this; OF CALIFORNIA world-that is our solemn responsibility. they have personally told me this. They IN THE HOUSE OF REPRESENTATIVES Mr. Jefferson also wrote that the truth of know the Nicaraguan regime threatens human liberty is "self evident," but he knew their own future and the stability of this Wednesday, May 6, 1987 its success was anything but so. It was only hemisphere. They know that the establish­ Mr. LAGOMARSINO. Mr. Speaker, during the courage and the will of free men that ment of a genuinely democratic system in today's 1-minute speeches I called to the at­ gave freedom a chance, and once estab­ Nicaragua-with the full guaranteed liber­ tention of my colleagues the speech by Presi­ lished, it was only their continuing dedica­ ties of free assembly, free speech, and free tion that kept freedom alive and allowed it press-offers the only real hope for the dent Reagan last Sunday in support of the to prosper. democratic countries of Central America. The long-term peace and security of the region. That dream of freedom has a special They know such a system provides a check President, in that speech, emphasized the im­ meaning to us today as we gather here on and balance on any government, discourages portance of negotiations and economic assist­ , beneath the gaze of Miss Liber­ militarism, and ensures the people's right to ance to help achieve peace in the region. The ty. It would be easy to come here and tell choose their own destiny. And that's why text of the President's remarks follows: once more the story of those who have the views of our Central American friends passed through these gates, to simply cele­ and the aspirations of the Nicaraguan REMARKS BY THE PRESIDENT TO THE .AMERICAN brate once again the freedom NEWSPAPER PuBLISHER'S ASSOCIATION enjoy. But my job today is more difficult. people are one and the same-the establish­ THE PRESIDENT. Thank you. (Applause.) It's not about those who came to this land, ment of full, popularly-elected, legitimate Thank you all very much. Thank you, Dr. but it's about the dream that brought them democratic rule in Nicaragua. So what we Graham, for being here, Mr. Chairman, here. Today, another people are in search of seek for Nicaragua is simple enough: self-de­ Mayor Koch, ladies and gentlemen-there that dream, and theirs, too, is an inspiring termination for the Nicaraguan people-the she is-1 was just looking for the other story-one that must speak to the heart of right to select their own leaders in free, fair, woman in my life. all who came to this island and cherish the contested, and regularly-scheduled elec­ It's a great honor to be here with you on great lady of this harbor. tions. this, the 100th anniversary of your conven­ I speak of the people of Central America. The majority of Central Americans have tion. The truth is, it's always a great pleas­ And let me begin in 1981. I wonder how made this choice. And I have come here ure to be addressing anything that's-some­ many remember that when we first drew at­ today to say to you that the freedom fight­ thing older than I am. (Laughter.) I'm be­ tention to the crisis in El Salvador, we were ers of Nicaragua are fighting for the same ginning to feel right at home here in New met with an almost fatalistic acceptance of thing that the brave woman in El Salvador York Harbor. Last year, of course, we cele­ communist victory in that country-if not risked her life for-democracy. Real democ­ brated another centenary-that of the the whole region. Democracy, it was said, racy, rooted in sound, stable, democratic in­ of Liberty-the generous lady who, couldn't work in El Salvador: the people stitutions and ensuring the full range of po­ for 100 years now, has stood watch over this were too poor; they had no democratic tra­ litical and human rights. And, I gateway to freedom. It couldn't be more ap­ dition; they didn't want the chance for de­ have come here to say that the United propriate that, a year later, we gather here mocracy that we offered; in fact, their sym­ States government pledges to the American on Ellis Island to celebrate with all of you, pathies lay with the communist guerrillas people what the freedom fighters have the ladies and gentlemen of the fourth we were told. pledged to their own people-that our objec­ estate, who also have stood watch over our But then one day the silent, suffering tive in Nicaragua is clear: free elections. freedoms, and who have been the guardians people of El Salvador were offered a chance On the other hand, the Soviets and the of our liberty. to choose for themselvs-a national election. Sandinistas have also made a choice, not for You all know what Thomas Jefferson said And despite the bullets, the bombs and the democracy, not for a free press, and not for of the press-that given the choice of a gov­ death threats of the communists, the people free elections, but for control through force. ernment without newpapers, or newspapers of El Salvador turned out in record num­ In 1986 alone, overall Soviet bloc assistance without a government, he wouldn't hesitate bers, standing in line for hours waiting to to the Sandinistas exceeded $1 billion. for a second to choose the latter. Of course vote-to vote for democracy. These Soviets shipments have made the Jefferson said that before he became Presi­ Congressional observers in that national small country of Nicaragua an aggressor dent. election told me of a woman who was nation with the largest military machine in You know, it reminds me of a particular wounded by rifle fire on the way to the polls Central America, threatening the security editor who just wouldn't admit to any mis­ because the guerrillas tried to keep the of the entire region. takes over in his paper. Everything in this people from getting there. She refused to Make no mistake: the Soviets are chal­ paper had the weight of scripture. And then leave the line and have her wound treated lenging the to a test of wills early one morning he received a call from until after she had voted. And the wait in over the future of this hemisphere. The an outraged subscriber who protested that the line was hours long. One grandmother, future they offer is one of ever-growing his name was listed in that morning's obitu­ as she started to the polls, had been warned communist expansion and control. And this ary section as having died the previous day. by the guerrillas that if she voted she would is the choice before Congress and our And the editor said, "And where did you say be killed when she returned from the polls. people; a basic choice, really: between de­ you were calling from?" The fact is, if those 'Of us elected civilian governments in El Salvador, al diplomatic negotiator, Philip Habib. But in government and the press sometimes Guatemala, and Honduras-only Nicaragua since those first negotiations back in 1979, think of ourselves as antagonists, it's only in remains a dictatorship. But while the trend in which the Sandinistas promised a demo­ the context of transitory events. The rush toward democracy unmistakable, the threat cratic, pluralistic society, we've seen that of daily business that can obscure for us a to freedom and democracy in Central Amer­ these Marxists-Leninists never intended to deeper truth- that we're two complimenta­ ica remains powerful because of Sandinista honor those promises; we've seen them use ry institutions, each drawing life and totalitarianism in Nicaragua. The aspira- negotiations time and again simply to delay,

e This "bullet" symbol identifies statements or insertions which are not spoken by a Member of the Senate on the floor. Matter set in this typeface indicates words inserted or appended, rather than spoken, by a Member of the House on the floor. 11570 EXTENSIONS OF REMARKS May 6, 1987 to manipulate world opinion. And that's Congress has expressed its support for the We've come a long way in these last seven why the choice remains the same: democra­ efforts of the Central American democracies years toward understanding the true nature cy or communism, elections or dictatorship, to achieve a diplomatic settlement to the re­ of the Sandinista regime and its aggressive freedom or tyranny. gional conflict. They've asked for an in­ aims against its own people and its demo­ The debate in this country over Central creased effort by the United States to exam­ cratic neighbors in Central and South American policy has been direct and ine ways for a peaceful conclusion to the America. A new bipartisan consensus is tough-and, yes, even heated at times. civil strife in Nicaragua. This administration forming, one that rejects all the old excuses. While such debate is healthy, we all know has always supported regional diplomatic Last year, in an editorial entitled "The that a divided America cannot offer the initiatives aimed at peace and democracy, Road to Stalinism," the Times leadership necessary to provide support and whether it be through Contadora, through charged that the "pluralistic revolution" confidence to the emerging democracies in face-to-face meetings with the ruling party the Sandinistas promised is "hopelessly be­ Central America. in Nicaragua, or through current Central trayed." Stated the Times: "Only the credu­ I do not think there's anyone in Congress American initiatives. Let me say right now lous can fail to see the roots of the police who wants to see another base for Soviet that I will lend my full support to any nego­ state now emerging." subversion, another Cuba, established on tiations that can build democracy through­ And then my old friend, Tip O'Neill, in American shores. And yet that is what is out Central America without further blood­ the wake of one of the Sandinistas' most happening right now. It's now an issue on shed. blatant acts of aggression, declared that which all Americans must unite; it's simply You know, I recently received a letter Daniel Ortega was what he had always said too important to become a partisan fire­ signed by 111 members of the House of Rep­ he was, nothing less than a "Marxist-Lenin­ fight in the next election. If we cut off the resentatives calling for a major diplomatic ist Communist," intent on provoking a "rev­ freedom fighters, we will be giving the Sovi­ effort, "designed"-their words-" designed olution without borders." ets a free hand in Central America, handing to achieve peace, security guarantees for all Well, now the question before the Ameri­ them one of their greatest foreign policy Central American nations, the promotion of can people and the victories since World War II. Without the democratic institutions, and the removal of is, "What do we do about it?" Well, despite pressure of the Central American democra­ Soviet and Cuban military personnel from almost universal acknowledgment of the cies and the freedom fighters, the Soviets Nicaragua." While I do not endorse every­ brutal, totalitarian, and subversive inten­ would soon solidify their base in Nicaragua, thing in the letter, I certainly join these tions of the Sandinista regime, the renewal and the subversion in El Salvador would Congressmen in calling for the restoration of aid to the freedom fighters is still a de­ reignite, The Nicaraguans have already in­ of freedom of the press, freedom of religion, bated question. But I think there's increas­ filtrated operatives even into Costa Rica­ freedom to assemble, freedom of speech and ing recognition that the freedom fighters and they're simply waiting for the signal. free elections, all of which are now denied are the only ones who stand between the Soon the communists' prediction of a "revo­ by the government of Nicaragua. Sandinistas and their expansionistic aims; lutionary fire" -their words-sweeping Our Senate passed, by a 97-1 vote, a reso­ that they are the major obstacle to prevent­ across all of Central America could come lution stating that a "durable peace is only ing all of Central America from being en­ true. Let us not delude ourselves about the possible within the context of democratic gulfed in the communists' "revolutionary ultimate objective of the Soviets' billion­ regimes committed to eradicating extreme fire;" that the freedom fighters are the only dollar war in Nicaragua. poverty, to establishing an effective means ones who offer the hope of freedom to the There is a line attributed to Nikolai Lenin: for equal opportunity for all elements of so­ people of Nicaragua and a chance for a "The road to America leads through ciety, and free and periodic elections." stable and long-lasting peace in Latin Amer­ Mexico." I do not intend to leave such a So, while Congress gets no argument from ica. They're worthy of our support. crisis for the next American President. For me in seeking a peaceful, diplomatic solu­ almost 40 years, America has maintained a tion in Nicaragua, you can see the key is de­ So that's why the upcoming vote in Con­ bipartisan consensus on foreign policy. The mocracy and that a majority in Congress gress on whether to continue providing sup­ Democratic Party-and the party of Frank­ clearly recognized this. That's why I strong-. port to the freedom fighters in Nicaragua lin Roosevelt, Harry Truman, and John ly believe there is a solid basis upon which may well be the most important vote our Kennedy-has stood in firm support of de­ to build a common effort with Congress to representatives cast in 1987; and possibly mocracy and our national security. This is resolve this conflict in Central America. I one of the most important cast in their ca­ no time for either party to turn its back on plan to make every effort to work toward reers in public office. that tradition or the cause of freedom-es­ these goals, and I hope Congress will join It's an important question for the press pecially when the threat to both is so close with me. and media, as well. I can't help but note to home. And that brings me to the third element that in the new democracy of El Salvador, The survival of democracy in our hemi­ in our policy-our commitment, our support communist-supported guerrillas continue to sphere requires a U.S. policy consistent with for the freedom fighters who have pledged try to bring down democratic rule. There's that bipartisan tradition. So I want to de­ their lives and honor to a free Nicaragua. little or no media attention. Yet, just across scribe the framework of that policy, a policy This administration's support of the Nicara­ a border in Nicaragua, the freedom fighters that begins with support for the stable, guan freedom fighters, in their struggle for battle against a totalitarian communist long-lasting democracy in Costa Rica, and peace and democratic government, will not regime and are assailed far and wide as law­ the democracies taking root in El Salvador, change unless the regime in Nicaragua ac­ less terrorists or worse. Forgive me, but the Guatemala, and Honduras. Many in Con­ cedes to the democratic aspirations of the story needs perspective. And that perspec­ gress have stressed the importance of main­ Nicaraguan people. Every day the Nicara­ tive is provided by the aggressive nature of taining sufficient levels of economic aid to guan people are becoming more outraged by Sandinista communism. assist those democracies. I couldn't agree the repression of their communist rulers. Today, the people of Nicaragua know more. That's why additional economic as­ The democratic Nicaraguan resistance, in­ from experience the reality of Sandinista sistance must be approved for the four Cen­ cluding the freedom fighters, today offers communism: the brutality, the poverty, the tral American democracies. the only political alternative to the dictator­ oppression; and for that reason they know Second, close cooperation with our demo­ ship of the past and the communism of what we too often forget, that freedom is cratic friends in Central America is also es­ today; that alternative is democracy, and it's worth fighting for. sential, and our policy is to continue now, as winning increasing support from the people It's the same first-hand knowledge of op­ in the past, diplomatic efforts to achieve a of Nicaragua. pression and yearning for liberty that steels lasting peace. Earlier this year, President For as long as I'm President, I have no in­ the brave Afghan resistance and gives them Arias of Costa Rica put forward a proposal tention of withdrawing our support of these the courage to take up arms against the aimed at achieving a peaceful settlement of efforts by the Nicaraguan people to gain overwhelming might of the Soviet military the conflict in Nicaragua. At the center of their freedom and their right to choose machine; the same knowledge that inspires his proposal is an insistence on democracy their own national future. In the next few the brave Angolans and Cambodians, fight­ in Nicaragua. The United States welcomes months, I will be asking Congress to renew ing long wars of liberation against their this initiative and supports its general objec­ funding for the freedom fighters. Again, I Soviet-backed oppressors; the same knowl­ tive. At the same time we have some con­ stress the danger of the course argued by edge that drove the Grenadian people to cerns which need to be resolved particularly some in the Congress: that the most expedi­ embrace the American servicemen liberat­ on the sequence of implementation. It's es­ tious route to peace in Central America is ing their country and throw flowers in their sential that any cease-fire be negotiated abandoning our commitment to the Nicara­ path. And wasn't it something to see graffiti with the full range of the opposition. It is guan freedom fighters. Delays and indeci­ on the walls saying, not " Go our profound hope that a Central American sion here at home can only cause unneces­ Home," but when I was there, every place I consensus can be reached soon, and that a sary suffering in Nicaragua, shake the confi­ looked, it was saying, "." process leading toward freedom in Nicara­ dence of the emerging democracies in the They were all responding to the call to gua can go forward. region, and endanger our own security. freedom-a call that was a-has a particular May 6, 1987 EXTENSIONS OF REMARKS 11571 eloquence among these buildings, on this the massive depreciation of the dollar. nominated in dollars that are worth less island where so many of our ancestors greet­ Through this depreciation, the U.S. Treas­ when converted into the bank's own curren­ ed the sight of Liberty with tears of joy. We ury is effectively bailing the European and cy. While U.S. banks are still earning a hear the call of freedom in the work to Japanese banks out of the debt crisis. healthy return on their loans to problem which you've dedicated your lives, sounding Very little attention has been paid to the debtors, non-U.S. banks are watching these clearly, proudly, every morning and evening link between the dollar and Third World returns slow to a trickle. Alternative oppor­ in the pages· of a free press. Tragically si­ debt. Yet its implications are substantial. tunities are much more attractive to these lenced in Nicaragua by the closing of La The dollar-debt link has simplified the debt banks. Prensa, we still hear that call in the brave crisis for the U.S. government. With fewer In short, Brazil represents a smaller risk voice of its publisher, Violeta Chamorro, actors in the game, U.S. policy-makers are and a smaller return to a Japanese bank who makes it clear that on the subject of now more capable of taking steps that will than it did two years ago, while for a U.S. freedom, the press can never be agnostic. alleviate the debt crisis. But before policy­ bank, risk and return have not fallen nearly She said, "without liberty of the press, makers move forward to act, it may be as much. Therefore, a Japanese bank is less there is no representative democracy, nor useful to take a closer look at the implica­ apt to be motivated by fear to find a resolu­ individual liberty, nor social justice ... only tions of Americanization. I believe that the tion for the Brazilian problem, and is more darkness, impunity, abuse, mediocrity and most profound meaning of these changes is eager to shed its Brazil assets to move into repression." that if they are allowed to run their full more profitable assets. The same can be said Well, that's the choice we face: between course, we will all have a better set of mech­ of European banks. the light of liberty or the darkness of re­ anisms to cope with the next Brazil crisis. There are several additional factors con­ pression. When, after terrible voyages of Brazil tributing to the Americanization of the debt sickness and hardship, our ancestors first A few comments about the current Brazil crisis. European banks operate in a regula­ spied Liberty's torch, they knew that light crisis will help set the stage for my broader tory context that makes it easier to rid shone for them-"those huddled masses themselves of problem loans. Advantages yearning to breathe free." For those who've argument. such as hidden reserves, lenient tax treat­ It would be a mistake to claim that the known only the bitterness of want and op­ Brazil problem was caused by its interna­ ment of loan loss reserves, and accounting pression, that torch burns especially bright. tional debt burden. In fact, Brazil's debt has standards that allow for the capitalization Today, the light of freedom is our sacred lightened over the last couple of years. The of interest, all enable European banks to keepsake, the promise of America to all fall in the price of petroleum was a great take a more flexible approach to the re­ mankind. We must forever hold its flame savings for Brazil. Interest rates have also structuring of debt. high, a light unto the world, a beacon of fallen, and Brazilian exports have not yet It should come as no surprise, therefore, hope that extends beyond this harbor, all met the protectionist barriers that many an­ that Japanese and European banks have the way to the jungled hills of Nicaragua, ticipated. made a more concerted effort to clean their where young men are fighting and dying Domestic political problems caused Brazil portfolios of unwanted Third World debt. today for the same liberties we hold dear; to run out of money and stop interest pay­ The factoring company established by all the way into the hearts of people every­ Japan's 28 largest banks is a prime example. where who fight for freedom. ments; the size of Brazil's external debt has The company's purpose is to buy Third Thank you all. God bless you. little to do with the moratorium. The trou­ World debt from the Japanese banks, at a ble began when President Barney's cabinet discount. In exchange, the banks will re­ discovered an effective strategy for increas­ ceive equity shares in the factoring compa­ THE BRAZILIAN DEBT CRISIS ing its popularity: it froze prices but allowed ny. The Japanese banks will improve their wages to take a quantum leap. A flood of capital-asset ratios without suffering from HON. ROBERT GARCIA spending ensured, consuming everything the unhappy tax and accounting problems that was produced for the domestic market of holding Third World debt. OF NEW YORK as well as many goods that should have European banks have not been quite as IN THE HOUSE OF REPRESENTATIVES been exported. The sharp rise in spending also elevated the level of imports. Fewer ex­ visible, but they too have been ridding Wednesday, May 6, 1987 ports and more imports sent the trade bal­ themselves of Third World debt. Their exit vehicle has been the secondary market for Mr. GARCIA. Mr. Speaker, I am submitting ance through the floor, leaving Brazil with no money to pay its debt. these loans. More lenient regulatory and ac­ for the RECORD testimony presented to the counting treatment has allowed them to Subcommittee on International Finance, Why did President Sarney persevere with a policy that was driving his balance of pay­ write down much of their problem loans Trade, and Monetary Policy by Dr. Paul Sacks ments into the ground? Because he was over the last five years. Hence they are of Multinational Strategies Inc., on the Brazil­ building up a very important commodity: more amenable to selling these loans on the ian debt crisis. votes. He proved this by leading his party to secondary market. They have already taken Dr. Sacks presents an interesting case for victory in the November elections. Shortly the losses. thereafter Brazil ran out of money. European banks have been joined by the "Americanization of the debt crisis." He smaller U.S. regional banks, who are also believes that this problem is becoming for a New rules of the game selling off their problem loans. Even though number of reasons a North and South Ameri­ As a result, banks, governments, and mul­ U.S. regionals do not enjoy the regulatory can problem. His arguments are compelling. I, tilateral agencies around the world are once and accounting leniency that European therefore, hope my colleagues will take a more engaged in an effort to resolve this banks enjoy, these small banks are extreme­ moment to read Dr. Sacks excellent testimo­ Brazilian problem. But the resolution will ly eager to withdraw from what they view as ny: take place in a much changed environment, a debt quagmire. They repent for ever an environment that has watched the dollar having gotten involved in Third World lend­ TESTIMONY OF DR. PAUL M. SACKS depreciate dramatically. This depreciation ing, and are willing to suffer their losses and BRAZIL AND THE DEBT CRISIS has altered the way in which important retire to the domestic market. The Brazil moratorium has been touted actors view the Brazilian problem. As Japanese, European, and U.S. regional by many as a watershed in the debt crisis. In The main consequence of a depreciated banks leave the scene, one group of banks is my opinion, the moratorium is only second­ dollar is that non-U.S. banks are far less vul­ left behind: the U.S. money center banks. ary to the real watershed. I hope the Brazil nerable to large debtor countries. Since These banks do not have the luxury of le­ ·moratorium focuses our attention on the most of this debt is denominated in dollars, nient regulation and accounting practices, debt situation in general, but I also hope the size of a loan by a Japanese bank to nor can they afford to suffer the losses in­ that it does not distract our attention from Brazil has shrunk by almost 50% over the volved in selling large portions of Third the more important change that is taking last couple of years, if measured in terms of World debt. Gradually, the debt crisis is be­ place. yen. The Japanese bank's exposure to Brazil coming a crisis exclusive to North American The new watershed is the Americanization represents a far smaller portion of the money-center banks. of the debt crisis. By this I mean that the bank's capital base. The same can be said And what if the depreciation of the debt crisis is fast becoming a South Ameri­ for European banks, since the dollar has de­ dollar-the main force behind the Ameri­ can and North American problem, rather preciated against the pound and European canization of the debt crisis-does not ac­ than a global problem. As other debtors and Currency Unit as well. complish its goal? What if a cheaper dollar creditors slowly make their exit, only U.S. In other words, the risk posed by Brazil makes little or no progress towards revers­ money center banks and large debtors, pri­ for a Japanese bank is being reduced far ing the U.S. trade deficit? marily in Latin America, remain behind. more rapidly than it is for a U.S. bank. If the depreciation does not succeed, the And the primary cause of the Americaniza­ The return on these loans is also diminish­ debt situation will suffer two additional tion of the debt crisis is close to home. It is ing for non-U.S. banks, since returns are de- shocks. On top of a weakened dollar, we 11572 EXTENSIONS OF REMARKS May 6, 1987 may find ourselves before long with greater write down these loans. This, in turn, en­ this problem, the Canadians have already protectionism and higher interest rates. courages banks to sell them on the second­ put into effect plans to reduce the level of Protectionism is gaining partisans. And if ary market. their pollutants by 50 percent by 1994. The the dollar depreciation continues much Policy-makers should do whatever they Canadian government will contribute $150 longer, the Bank may re­ can to enhance the evolution of the second­ million to modernize the smelting industry, spond by increasing interest rates. Debtor ary market for Third World loans. This and has imposed more stringent auto emis­ countries will fall victim of a scissors effect. market, now in its infancy, has been a sion standards effective September, 1987. On one hand, higher U.S. tariff barriers will useful exit for European banks and U.S. re­ The U.S. also has adopted a tough auto limit exports from these countries to the gional banks. A larger market with fewer emissions plan, but has failed to enact an U.S. Debtor countries will be less able to pitfalls will extend this option to the U.S. acid rain reduction plan for industry, caus­ earn the dollars necessary to service their money center banks. ing intense concern in Canada. Instead, we debt. On the other hand, higher interest There should also be a concerted effort to have concentrated our efforts on research rates will increase the amount that these devise instruments such as the exit bonds into clean coal technology. At his 1987 countries have to pay each year. As the scis­ that are currently being negotiated in the summit with Canadian Prime Minister sor blades come together, debtor countries Argentine debt negotiations. These instru­ Brian Mulroney, President Reagan took an will run out of money. ments give banks the option to convert part important step by committing the U.S. to This is the stage on which the Brazilian of their exposure into bonds, freeing them consider a bilateral accord on acid rain. We problem-and future debtor problems-will of future obligations to lend new money. By need to develop a decisive policy on acid be resolved. On the creditor side, fewer giving smaller creditors an exit from future rain quickly. Until we do, acid rain will con­ banks are motivated by the fear that they obligations, these instruments make future tinue to strain U.S.-Canadian relations. can be wiped out by a single default. In­ rounds of debt restructuring far more Trade is a second important issue between stead, they are finding ways of exiting the simple and effective. the U.S. and Canada. Each has long been debt crisis, leaving the U.S. money center There are losses to be borne as debtors the largest trading partner of the other. banks behind to deal with the problem. On and creditors extricate themselves from the Canada buys 22 percent of U.S. exports, and the debtor side, there are ominous signs debt crisis. This is clear. What is less clear is the U.S. buys 75 percent of Canada's. 80 that point to a severe payments crunch if how to distribute these losses equitably be­ percent of the trade between our countries U.S. protectionism and high interest rate tween shareholders and taxpayers. In my is free of any tariffs. This trading relation­ cannot be averted. opinion, both should bear part of the losses. ship, however, has become a source of ten­ Simplification The Americanization of the debt crisis will sion with protectionist tendencies on both From the point of view of the United accelerate the pace at which banks pass on sides. First, the U.S. trade deficit with States policy-makers, the Americanization losses to their shareholders. The Congress Canada is second only to our deficit with of the debt crisis simplifies matters. But should not get in the way of this by devising Japan. In 1986, we purchased $23.3 billion what are the implications of this simplifica­ far-reaching plans that will transfer the more in Canadian products than we sold to tion for U.S. policy making? losses to the taxpayer. Where necessary, the that nation. Second, because some U.S. in­ Since the problem is less complex, it is Congress should help the banks enhance dustries are being hurt by the rise in Cana­ easier to devise policies to deal with it. With their exit options. But proceed cautiously; dian imports, several unilateral measures fewer actors, policy instruments can be used let the market work. This approach gives were taken. The United States imposed a with greater precision. But should we rush ample room for optimism. tariff on cedar shingles, threatened to to devise legislation and policy instruments impose tariffs on all Canadian softwood that we hope will resolve the crisis once and products, and registered a ·variety of com­ for all? CURRENT ISSUES IN UNITED plaints on other imports such as steel, Probably not, in my opinion. STATES-CANADIAN RELATIONS sugar, and fish. Canada retaliated by impos­ My reasoning is quite simple. The Ameri­ ing a preliminary tariff on corn imports canization of the debt crisis may be a dark HON. LEE H. HAMILTON from the U.S.-the first time a countervail­ cloud on the not-to-distant horizon, but, like OF INDIANA ing duty was applied. all other dark clouds, it has its silver lining. To improve trade relations, Canada pro­ A central component of Americanization IN THE HOUSE OF REPRESENTATIVES posed negotiations for a Free Trade Agree­ is the loss of competitiveness suffered by Wednesday, May 6, 1987 ment

!H -059 0 - !!9 - IM tPt. !J I 11580 EXTENSIONS OF REMARKS May 6, 19871 years. In 1948, his patriotism took on an activ­ ceived extensive training at Elgin Air Force A TALE OF TWO DEFICITS ist form when he cofounded the Association Base, FL, before being sent to Udorn, Thai­ of Silesian Refugees, of which he remained a land, in December 1965. HON. WILLIAM E. DANNEMEYER faithful member all his life, and which he As we look back to the fall of Saigon 12 OF CALIFORNIA chaired after 1968. years ago, we remember the honor of those IN THE HOUSE OF REPRESENTATIVES In 1957, he became the program director who served, and the tragedy of those still of Radio Bremen, and in 1959 the press offi­ missing. All Americans owe a special debt to Wednesday, May 6, 1987 cer of the Committee for an Undivided Germa­ our fellow countrymen who serve this Nation Mr. DANNEMEYER. Mr. Speaker, I insert a ny in . After 1964, he became a free­ in the Armed Forces. The families and loved paper by Prof. Antal E. Fekete of the Memori­ lance journalist and writer, writing many books ones of the 2,400 Americans still unaccounted al University of Newfoundland, which analyses on Silesia and the German motherland, and for in , who have held onto their faith our twin deficits and their correlation. I believe also political books on inter-German relations. and determination never to let any of us ever the paper merits the attention of my col­ After becoming a member of the Bundes­ forget, are truly American heroes. In western leagues for it focuses on the highly dangerous tag, the German Parliament, in 1969, he kept chain-reaction effect involved in the process New York, our community continues to re­ up the same interests, focusing his work on creating these deficits. Unless we can arrest member the bravery and sacrifices of the men intra-German relations and on broadcasting to this chain reaction soon, we may lose all con­ and women who have served their country, Eastern Europe. Having been elected first as trol. thanks to the courage of people like Mrs. Ma­ a mem~er of the SPD, he disagreed so The article follows: falda DiTommaso, who has not celebrated a strongly with Chancellor Brandt's A TALE OF Two DEFICITS holiday since her son Robert was shot down that he crossed benches in February 1972, in 1966. Their extraordinary sacrifice and spirit becoming a member of the Christian Demo­ There is probably no topic in economics cratic Union [CDU]. He thought Germany command our admiration, and demand our un­ today which is more hotly debated than the should not accept the reducing of its territory relenting commitment to a full accounting of genesis of the two deficits: the U.S. budget which limited the two Germanys to the west our missing countrymen. That national com­ deficit and the U.S. trade deficit. The table side of the Oder-Neisse line. mitment is more than a promise; it is a solemn below strongly suggests that something has His activities also centered on broadcasting. responsibility we owe not only to those 2,400 gone terribly wrong, and something unprec­ He is a longstanding member of the Interna­ and their families, but to future generations edented and very ominous is happening. tional Advisory Board of the Free-Europe­ The two deficits appear to be running out of who will serve their country, that they may be control. And the "Big Bang", marking the Radio Liberty, and he is alternative chairman secure in the knowledge of our unfailing sup­ beginning of their present course, appears of the international German broadcasting serv­ port for them in combat and commitment to to have taken place in 1971. ice the "Deutsche Welle." their safe return home. Although Dr. Hupka is now going to retire, This important legislation naming the veter­ ANNUAL BUDGET AND TRADE DEFICITS IN THE UNITED he will doubtlessly continue to serve his coun­ ans hospital in Buffalo after Maj. Robert J. Di­ STATES try during his retirement. Tommaso is a memorial to all of our fellow [Figures rounded to the nearest $1 ,000,000,000; minus sign indicates deficit, Americans listed as POW's and MIA's. The otherwise surplus] CONGRESSMAN JACK KEMP IN­ veterans hospital will serve as a to Budget Trade TRODUCES LEGISLATION NAM­ the courage and sacrifice of our missing coun­ deficit deficit ING THE BUFFALO VETERANS trymen. ADMINISTRATION MEDICAL I call on my colleagues in the House today 1950 ...... - 3 I CENTER AFTER MAJ. ROBERT J. to join me in paying tribute to Robert J. Di­ 1951...... 6 3 1952 ...... ············································ - 2 3 DITOMMASO Tommaso, and all our missing servicemen, 1953 ...... - 7 1 1954 ...... -1 3 and their families who continue to speak out, 1955 ...... -3 3 to never give up, to never forget. 1956 ...... 4 5 HON. JACK F. KEMP 1957 ...... 3 6 OF NEW YORK LIST OF BUFFALO AREA VETERANS AND VETER­ 1958 ...... -3 3 ANS ORGANIZATIONS SUPPORTING THIS LEG­ 1959 ...... ··························· -13 1 IN THE HOUSE OF REPRESENTATIVES 1960 .... ··· ·········································································· 0 5 ISLATION TO NAME THE VETERANS' ADMINIS­ 1961.. - 3 6 Wednesday, May 6, 1987 TRATION MEDICAL CENTER IN BUFFALO 1962 -7 5 1963 ... -5 5 Mr. KEMP. Mr. Speaker, I am introducing AFTER MAJ. ROBERT J. DITOMMASO 1964 ...... ························ - 6 7 legislation, today, to name the Veterans' Ad­ Frank Falkowski, Executive Director, 1965...... - 1 5 1966 ...... - 4 4 ministration Medical Center, in Buffalo, NY, Vietnam Veterans Leadership Program of 1967 ...... - 9 4 after the first western New Yorker listed as the Niagara Frontier, Inc. 1968...... -25 1 1969. 3 I "Missing in Action" in Vietnam, Maj. Robert J. Pete Linkowski, Amvets National Service 1970 ... -3 3 DiTommaso. Officer. 1971...... - 23 -2 Steve Banko, decorated vet­ 1972. ... . - 23 - 6 On July 29, 1966, Robert DiTommaso was 1973 -15 1 flying in a C-47 with seven other crew mem­ eran, and Executive Assistant to New York 1974 ... . - 6 -6 State Senator Anthony Masiello. 1975 ...... -53 9 bers on a classified mission when their aircraft Roy Barley, President, Chapter 164, Viet­ 1976 .. - 74 - 9 was attacked by fighters 10 to 20 miles south 1977 ... - 54 - 31 nam Veterans of America, Secretary of Viet­ 1978 - 59 - 34 of Xam Nua, Laos. Radio contact was blocked nam Veterans Leadership Program, Second 1979 .. - 40 - 28 and nothing has been heard about Robert or Vice Commander, American Legion Post 431 1980 .. - 74 - 25 1981 .. ································· ··········· -79 -28 the crew since. and Charter Member of Amvets Post 66 1982 ...... -128 -36 Robert J. DiTommaso was born in Lacka­