25904 EXTENSIONS OF REMARKS September 30, 1987 EXTENSIONS OF REMARKS A MODEST PROPOSAL ON THIRD result of their overwhelming debt burden, then national trading system, thus increasing in­ WORLD DEBT their democratic governments will surely fall. stability within the international financial The same is true for the Philippines. This system. HON. ROBERT GARCIA should not be allowed to happen. Confronting (6) In order for the trade the debt crisis is one way of preventing it. deficit to decline, substantial growth must OF occur on an international scale, particularly IN THE HOUSE OF REPRESENTATIVES The debt commission, which is patterned in the developing countries. after the highly successful Greenspan Com­ Wednesday, September 30, 1987 (7) Current policies and existing mecha­ mission on Social Security, would make a nisms for resolving the debt crisis have Mr. GARCIA. Mr. Speaker, I am introducing thorough study of this problem, as well as pro­ failed to produce adequate new capital flow legislation today that will, hopefully, help to re­ posed solutions, by drawing on the expertise in part because of the constraints imposed solve the Third World debt crisis. The bill, of persons from the public and private sector. by the old debt. The heavily indebted coun­ which I am introducing along with my col­ It would consist of 17 Members from both tries of Latin America, Africa, and Asia are league, WALTER FAUNTROY, would establish a parties: Seven to be chosen by the President, not recovering economically and the pros­ bipartisan commission to study the debt crisis. five by the Speaker of the House, and five by pects are small for improvements in coming Identical legislation is being introduced in the the majority leader in the other body. The years. other body by the gentleman from Massachu­ (8) Negotiations between debtor nations President would designate the chair of the and banks have become protracted and setts, Mr. KERRY. commission, and the commission would issue almost every day brings new announce­ When I first became aware of the gentle­ a report to the President 1 year after its for­ ments of threats of default by debtor na­ man from Massachusetts' proposal to estab­ mation. tions or establishment of loss reserves by lish such a commission, I jumped at the idea. I This is not a dramatic approach, but it is an banks. see it as a complement to the fine work that important step in helping to resolve the Third <9> A resolution of the current interna­ has already been done on this issue, particu­ World debt crisis. It would force all the major tional debt problem will require- larly the provisions in the trade bill dealing players working on this issue to come togeth­ an increase in the flow of private cap­ with Third World debt. er to try and find a solution. Finally, I hope ital, in both debt and equity form, to the de­ Individuals such as our colleagues CHUCK that this is only a first step, and that we will veloping countries; and SCHUMER, JOHN LAFALCE, and BRUCE MORRI­ an increase in the role played by the eventually begin to work more closely with our public sector and the commercial financial SON, have worked on innovative proposals European and Asian allies on this issue. It is institutions in providing assistance to the that can only help to alleviate the problem. In only by working together that we can· move developing countries in managing the inter­ the other body, BILL BRADLEY, PAUL SAR­ forward. national debt situation. BANES, and WILLIAM PROXMIRE have also con­ Text of the bill follows: (10) The longer the debt crisis lingers on, tributed considerably to the effort to resolve H.J. RES. 366 the greater the danger to the economic and this crisis. I see the commission as another Resolved by the Senate and House of Rep­ political stability of the developing nations track in the process of moving debate on resentatives of the United States of America and the financial stability of international Third World debt forward. in Congress assembled, financial markets. Debt is not merely a fi­ nancial or technical problem; it is at the As chairman of the Banking Committee's SECTION 1. FINDINGS. heart of politics in much of Latin America, Subcommittee on International Finance, The Congress hereby finds the following: (1) The international debt crisis threatens Asia, and Africa. Trade, and Monetary Policy I have conducted <11) It is now time to develop a sound pro­ a number of hearings on this issue. I know the safety and soundness of the internation­ al financial system, the international trad­ gram of international cooperation that can that WALTER, as chairman of the Committee's ing system, and the economic development effectively bring the debt crisis to an end, Subcommittee on International Development of the debtor countries. restore economic growth and vitality to Institutions and Finance, has also looked at (2) Over the past 5 years, the debt service Third World nations, and alleviate current this issue very closely. I think the time for requirements and the virtual cessation of threats to international financial and trad­ action is now. new voluntary commercial bank lending to ing arrangements. It is estimated that as many as 1 million heavily indebted developing countries have SEC. 2. PURPOSE. jobs may have been lost as a result of the resulted in massive net transfers of capital It is the purpose of this joint resolution to debt crisis. Certainly the U.S. trade deficit has from such countries to creditor banks. establish a National Bipartisan Commission grown because of this problem. While it may (3) While heavily indebted developing on International Debt to develop recommen­ countries have enacted austerity programs, dations for resolving the Third World debt not be reasonable to assume that the level for substantially reducing their consumption, crisis. trade between the United States and Latin these programs have contributed to nega­ America that existed before the crisis could tive economic growth, declining standards of SEC. 3. ESTABLISHMENT. have been maintained, it is clear that Latin living, and increased political instability in There is hereby established a commission many emerging democracies. to be known as the National Bipartisan America does offer an important market for Commission on International Debt The austerity policies enacted by the leader of the Senate, not more than 3 of easy process. If the economies of nations like debtor countries have resulted in commodi­ whom shall be from the same political Argentina, Brazil, and Peru collapse as a ty gluts and price deflation within the inter- party.

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. September 30, 1987 EXTENSIONS OF REMARKS 25905

September 30, 1987 EXTENSIONS OF REMARKS 25907 nary administrative challenge for the entire scribed in section 401(m)), so long as it during that same period. In Westchester, the federal establishment. meets the requirements of this section." number of homeless children has jumped from It is difficult to justify adding to this (b) Section 8440 of Title 5, United States 714 in July 1985 to 1,373 in November 1986. burden by imposing complex and costly non­ Code, is amended as follows: At a time when Federal programs should be discrimination requirements which will re­ (3) By deleting from paragraph (a)(3) the quire federal agencies to develop new com­ words "the provisions of subsection (b) and" expending to meet the rising tide of homeless puter programs and income data for all fed­ following the words "subject to." suffering, it is an absurdity for the Department eral employees, including those who do not <4> By deleting subsection (b) in its entire­ of Health and Human Services [HHS] to pro­ participate in the Plan. Some organizations ty and by substituting in lieu thereof, the pose curtailing the use of funds under Federal are still unable to comply with the initial following language: shelter programs. These funds have apparent­ statutory requirements to develop new pay­ ''NONDISCRIMINATION REQUIREMENTS.- ly been used by several States in violation of roll system capabilities to support routine Notwithstanding any other provision of law, a 30-day statutory aid limitation. This money contributions to the Plan by April1, 1987. the Thrift Savings Fund is not subject to the non-discrimination requirements appli­ goes to provide temporary emergency housing Exempting the Plan from the nondiscrim­ for thousands of homeless families across the ination tests of the Tax Code will not result cable to arrangements described in section in inappropriate or excessive tax avoidance. 401(k) of Title 26, United States Code, or to country. Unfortunately, the problem of home­ Only about 5 percent of federal employees matching contributions of Title 26, United States Code) 30-day solution, and the HHS has now pro­ tax deferred contributions are limited to 10 so long as it meets the requirements of this posed to cut off this vital source of funds percent of salaries <5 percent for CSRS em­ section." once the limitation is reached. This proposal, ployees> as well as to the $7,000 maximum which is currently being evaluated by the annual limit. SUMMARY OF PROPOSED LEGISLATION Office of Management and Budget, will come TSP exemption from the nondiscrimina­ AMENDMENT TO SECTION 770(J) OF TITLE 26, at great cost to State and local governments. tion requirements is unanimously endorsed UNITED STATES CODE In Westchester County alone, the revenue by the Employee Thrift Advisory Council, Section 7701{j) of Title 26, United States loss is estimated to be $10 million per year. which was established by FERSA to advise Code, requires that the Thrift Savings Fund the Board and is comprised of 14 union and comply with non-discrimination tests appli­ Accordingly, our proposal will make a correc­ association leaders representing federal and cable to cash or deferred arrangements tion to existing law by exempting emergency Postal employees at all pay levels. under section 401 of the same title and to shelter programs from the 30-day limitation on In summary, the application of the non­ matching contributions under section aid. discrimination tests of the Tax Reform Act 40Hm> of that title. These tests limit aver­ Mr. Speaker, during this period of crisis, it is of 1986 to the Thrift Savings Plan achieves age contributions for higher paid employees more important than ever to redouble our ef­ no apparent tax policy purpose, frustrates based on average contributions for lower forts to eradicate homelessness. Rather than the achievement of important FERSA ob­ paid employees. abandoning the problem after 30 days of as­ jectives, and creates demoralizing uncertain­ The purposes of the tests are to prevent ties throughout the Federal Government as highly paid employees from sheltering sistance, we must furnish homeless families to long-term retirement planning and the unduly large amounts of current income and individuals with the help they need to help commitment of Congress to the Thrift Sav- from current taxation and to encourage em­ themselves. The most obvious solution we ings Plan. ' ployers to make their retirement programs can offer to a victim of homelessness is tem­ We have already initiated instructions to available to larger numbers of workers. porary emergency shelter. My distinguished agencies as to the application of the nondis­ The amendment exempts the Thrift Sav­ colleague, Mr. DIOGUARDI, and I intend to see crimination tests-we had no choice but to ings Fund from these nondiscrimination that homeless citizens receive the temporary do so under present law. We urge the Con­ tests. gress to act promptly to repeal this require­ relief they so urgently need, while we in the ment, so agencies will not have to undertake AMENDMENT TO SECTION 8440 OF TITLE 5, Government develop an alternative, more per­ this burden and employees will be able to UNITED STATES CODE manent solution to our Nation's homeless proceed during the remainder of this year Section 8440 of Title 5, United States crisis. to make important lifetime retirement deci­ Code, also requires the Thrift Savings Fund sions on the basis of a clear understanding to be subject to nondiscrimination tests con­ of their entitlements. tained in the section of Title 26, United IRAN-IRAQ WAR AND THE I am sending a similar letter to the Presi­ States Code, described above. UNITED NATIONS dent of the Senate. Copies have been sent to The amendment exempts the Fund from the Director of the Office of Management these nondiscrimination tests. and Budget. HON. GERALD B.H. SOLOMON OF NEW YORK Sincerely, RELIEF FOR HOMELESS FRANCIS X. CAVANAUGH, IN THE HOUSE OF REPRESENTATIVES CITIZENS Executive Director. Wednesday, September 30, 1987 Enclosure.. Mr. SOLOMON. Mr. Speaker, the suspicions A BILL To amend title 5 and title 26, United HON. BENJAMIN A. GILMAN States Code, to provide that the Thrift OF NEW YORK that many of us have about the United Na­ Savings Fund is not subject to non-dis­ IN THE HOUSE OF REPRESENTATIVES tions have been confirmed in recent days and crimination requirements applicable to ar­ weeks as we have watched that organiza­ rangements described in section 40l of Wednesday, September 30, 1987 tion's floundering attempts to arrange a Title 26, United States Code, or to match­ Mr. GILMAN. Mr. Speaker, I commend my cease-fire in the Iran-Iraq war. The United Na­ ing contributions described in section distinguished colleague, the gentleman from tions is handicapped not so much by a lack of 401{m) of Title 26, United States Code. New York [Mr. DIOGUARDI], for demonstrating good intentions as it is by the contradictions Be it enacted by the Senate and the House exceptional leadership and foresight in the es­ within its own organizational structure. of Representatives of the United States of sential homeless housing legislation which we Once envisioned as a concert of nations, America in Congress assembled, that (a) Section 770l{j) of Title 26, United are introducing. It is a pleasure to work with a the United Nations has, in fact, become a States Code, is amended as follows: legislator of such outstanding caliber as we gaggle of governments-and those countries (1) By deleting from paragraph O> the join in a mutual effort to preserve the funding who truly do uphold the ideals enshrined in words "the provisions of paragraph (2) and" for emergency homeless shelters. the U.N. Charter are in a distinct minority. The following the words "subject to." The problem of homelessness has grown to supposed equality of all nations, regardless of (2) By deleting paragraph <2> in its entire­ epidemic proportions throughout our Nation, their political system, has led to a moral and ty and substituting in lieu thereof, the fol­ and the effects have been keenly felt in my ethical relativity that renders the United Na­ lowing language: own 22d Congressional District. Rockland tions helpless in the face of a shooting war. "NONDISCRIMINATION REQUIREMENTS.- Notwithstanding any other provision of law, County, for instance, has experienced an esti­ Iran and Iraq had been fighting each other the Thrift Savings Fund is not subject to mated 14 percent rise in homeless persons for nearly 7 years before the U.N. Security the non-discrimination requirements appli­ between 1985 and 1986. In Orange County, Council was able even . to take up the case, cable to arrangements described in section spending for the treatment of homeless per­ and what looked like a historic resolution last 40l or to matching contributions and faces Soviet military power di­ The U.S. and several European countries rectly to the east. West Germany is the have been trying to get West Germany to tempted to cloud the issues and the differ­ most populous European member of NATO ences between their bill and the substitute by stimulate its economy. Greater German and has the fourth largest economy in the demand for goods and services would help arguing that the Jeffords-Henry substitute world. Although it possesses no nuclear reduce the U.S.-West German trade imbal­ would preempt State worker right-to-know weapons, West Germany fields the strong­ ance and aid world economic growth. The laws. Let me address that specific concern. est and best equipped conventional force in West Germans say that they do not want to Section 18 of the Federal Occupational Europe. Ties ..vith the U.S. are close: West fuel domestic inflation . and argue that they are already States may enforce their own occupational cy, human rights, and free trade. Yet there­ implementing stimulative tax cuts. There is lationship may face several challenges in little indication that West Germany will re­ safety and health laws despite the Federal law coming years because of disagreements on in this area-under either of two conditions­ spond to allied pressure for additional steps. defense spending, arms control, economic Agricultural subsidies are another area of first, that there is no Federal OSHA standard issues and relations with the Soviet bloc. trade dispute. Both the U.S. and the EC are with regard to that specific issue or, second, BURDEN SHARING paying enormous subsidies , should do is another sign of change. There is talk empted broader State programs. Two Federal more to support western interests outside of court decisions have gone in different direc­ among some Germans of reunification, but Europe. The U.S. may need to prod West it remains a distant hope. The Soviets are tions, and the Supreme Court has been asked Germany to play a political role equal to its wary of the problems a united Germany to rule. However, in the meantime, the USDOL economic stature. could pose for them. In addition, the Soviets has now promulgated standards which apply NUCLEAR ARMS REDUCTIONS gain technology and trade benefits from beyond manufacturers to all employers. Given Because of its location and recent history, East Germany's current access to the EC the basis of the courts' rulings, the broader West Germany has been a strong supporter through its special trade relationship with September 30, 1987 EXTENSIONS OF REMARKS 25909 West Germany. Many in West Germany be­ to cries of "the Russians are ahead!" from be accomplished with higher technical qual­ lieve that trade with the Soviet bloc can aerospace lobbyists. ity, and far more cheaply, by satellites. One help expand western influence and reduce But the most inconvenient thing about lesson of Skylab was that men caused the East-West tensions. On the other hand, the Skylab was that, after just three crew visits, station to jiggle in ways that threw off the U.S. is concerned that such trade ties may NASA stopped sending astronauts there. fine calibrations of instruments. In the mi­ help the Soviets gain access to sensitive Skylab floated vacant for five years before crogravity environment of orbit, one person technologies. U.S. export controls on the it fell. Budget constraints were a factor, but pushing his feet against the floor can make transfer of high technology to the Soviet the real reason was that NASA had trouble the building shake. bloc are likely to be a source of continuing dreaming up things for space-station astro­ -Space manufacturing: Space manufac­ friction with West Germany. nauts to do. turing has been a field of flowering prom­ GERMAN YOUTH But don't let reality get you down. The ises and no payoffs. Someday commercial Recent polls indicate that 31% of West new NASA demand is for a "continuously space manufacturing will come, but a space Germans with post-secondary school educa­ occupied" space station that will have men station may actually stand in the way. Be­ tion support West German neutrality. abroad, whether or not there is anything to cause human bouncing around disrupts the Young people do not remember the U.S. do. pristine conditions that space manufactur­ role in the reconstruction of postwar The new NASA project represents, in ing is all about, NASA plans to include man­ Europe, and moral distinctions between the many respects, a greater national extrava­ ufacturing "platforms" in the station com­ U.S. and the Soviet Union are no longer as gance than the Apollo moon program. plex-unmanned craft that fly alongside but clear cut. A new generation needs to acquire Apollo was expensive, but returned many do not touch it. That's right. In tandem an awareness of the ideals our two countries benefits-scientific knowledge, a triumph of with our $60-billion astronaut luxury hotel share. Youth exchanges, including the Con­ American technical prestige, a testament to we will have devices to simulate unmanned gress-Bundestag exchange, are an important human courage. The space station will conditions. means of addressing this need. merely make work for NASA and its con­ -Repair and refueling of satellites: Possi­ The United States has excellent relations tractors. Apollo had clear goals and, after ble, but not cost-effective. Most satellites with West Germany. Yet we must find accomplishing them, ended. The space sta­ have little value by the time they wear out. common approaches to sensitive issues, in­ tion project has no clear goals but the space station that appeared in the Los first phase of construction. No guess for the not pay for, since the bulk of costs would entire project. fall on future Presidents. Angeles Times. It's right on target. I'd like to Do we have the real price tag? Probably share it with you. Biological studies on the extended effects not. To calculate the cost of placing the sta­ of weightlessness have been the focus of the [From the Los Angeles Times, Sept. 27, tion in orbit, the academy relied on NASA's Soviet manned-space program, with mini­ 19871 operating price for the space shuttle, a low­ space stations in orbit for 16 years. Results SPACE STATION: NASA PLANS ITS LATEST ball figure that Joe Isuzu could not recite have been discouraging. Soviet scientists VAST VENTURE FOR U.S. AEROSPACE FuNDS with a straight face. NASA claims a space­ . have found no antidotes for the muscle at­ (By Gregg Easterbrook) shuttle launch costs $78 million. But if rophy, motion sickness and bone decay that NASA's budget for manned flight is divided accompany prolonged stays in space. WASHINGTON.-One of the best things that by the number of space-shuttle launches in ever happened to the National Aeronautics Do we need to duplicate that unsuccessful and Space Administration was that Skylab, 1985-the last year of normal operations research? The whole concept is a circularity: before Challenger-the price was $550 mil­ putting astronauts in space to find out how launched in 1973, fell back into the earth's lion per launch. Talk about adding dealer atmosphere and burned in 1979. If it still ex­ to counter the damaging effect on astro­ isted, it would be a huge embarrassment to prep. At true shuttle costs, the complete fa­ nauts in space. the agency's current request for a space sta­ cility will cost about $60 billion. -Military: NASA doesn't list military tion. USES space-station applications. Could there be One reason Skylab would embarrass NASA cites these potential uses for the any? Yes, but hardly of the cost-effective NASA is that it was cheap: about $5 billion space station: observatory, space manufac­ variety. in current dollars. NASA's proposed space turing site, repair and refueling station for The best evidence of this shortage of mili­ station may cost $60 billion to build, let satellites, staging base for assembly of moon tary space-station applications is Mir. alone operate. or Mars ships and laboratory. Surely the Soviets would love to use their Another awkward aspect of Skylab is that -Observatory: Telescopes and other de­ new facility for military advantage, but ap­ it was considerably larger than the new vices mounted aboard the station could per­ parently they aren't. A good guess is that Soviet Mir space station, launched last year form important observations. But these can they cannot think of any military applica- 25910 EXTENSIONS OF REMARKS September 30, 1987 tions other than reconnaissance, already Representatives with valuable and needed in­ create complex and rigorous pressures for done by satellites. formation about the status of children. Now it American families, institutions, and for govern­ POLITICS is time to build on the product of our commit­ ment at every level: In the wake of Challenger, logical think­ tee. One out of every two children under 6, and ing about space policy seems to have been For this reason, today I am introducing leg­ more than 60 percent of 6- to 17-year-olds, suspended. NASA is insisting that all space­ islation to establish a bipartisan National Com­ have mothers who work full- or part-time out­ station components be launched via shuttle, mission on Children. This proposal offers the rather than by cheaper expendable boost­ side the home. ers, and assembled in orbit by astronauts. At opportunity to bring national attention, and to One in 5 children-12.5 million-lives in least 32 missions would be required, more devise national solutions, to the profoundly poverty. than the entire shuttle fleet has flown. troubling problems confronting America's chil­ One in four children live in a single-parent In addition to being more expensive, orbit­ dren and families. I am joined in this endeavor family. al assembly of multiple shuttle-launched by my colleague Mr. Russo of Illinois. The United States ranks behind most other space station components will be riskier Mr. Speaker, America's children are growing than building a few big pieces on the ground industrialized nations in its infant mortality up in circumstances far different than we an­ rate. and launching them with what the U.S. ticipated and in many instances, we are space program most desperately needs-a More than one-fifth of all babies are born to new large throwaway rocket employing paying a great price. Unprecedented changes unmarried mothers. basic technology to keep costs low. NASA in the work place and in family life, have cre­ More than a quarter of all youngsters drop officials maintain that although such a ated a myriad of problems and challenges for out of high school before graduation-a phe­ "big, dumb booster" would save money once the Nation's children and for their families­ nomena which has not changed in more than developed, now is not the time to invest in a regardless of the community they live in, their 25 years-preparing them only for a long life new vehicle-development program. Yet the income, their race or their family composition. of poverty and joblessness. agency will invest at least $1 billion develop­ Yet, children, who hold the Nation's future Families with children are the fastest grow­ ing a "life-boat" spacecraft for bringing the in their hands, continue to be disenfranchised space station crew back to earth quickly in ing segment of the Nation's homeless popula­ at the highest levels of Government when an emergency. This is more than would be tion. required for a big, dumb booster. public policy about their well-being is at stake. Unless we elevate the needs of children to This Commission will be broadly representa­ It's safe to say that nearly all U.S. scien­ tive of groups who serve children, academics tists not employed or funded by NASA the top of the national agenda, their future oppose the space station, fearing that to fi­ health, education, and economic status will who have conducted research about their nance it, money for cost-effective space sci­ remain precarious at best, stunting their op­ needs, public officials, and parents. ence will be starved out. portunities for productive adulthood and jeop­ The House of Representatives, through the Now, in a delightful reversal, Sen. William ardizing the economic competitiveness and work of its Select Committee on Children Proxmire

91-059 0-89-46 (Pt. 18) 25914 EXTENSIONS OF REMARKS September 30, 1987 of this important legislation in time for Vet­ corporate tax rates, high rates of return and of living. As in the case of a household, we erans Day 1987. our long-term political stability. Because of will have to hold spending below income to Sincerely, the recent sharp decline in the value of the cover our debt payments. Paying just the in­ R. JACK POWELL, dollar, overseas investors find many bar­ terest on this foreign debt will likely cost Executive Director. gains in the U.S. each U.S. household $500 per year in the Foreign investment in the U.S. brings early 1990s; trying to pay off part of the mixed results. It can provide communities debt will cause greater hardship. For the THANKS FOR NOTHING, SOUTH with the capital needed to create new jobs. first time in generations, we could be pass­ KOREA! Foreign investment in U.S. plant and equip­ ing on a lower standard of living to our chil­ ment can improve company efficiency, and dren. provide quality products for consumers. But The U.S. dependence on foreign capital HON. PAUL B. HENRY foreign investment also means that the divi­ also restricts our freedom to make economic OF MICHIGAN dends go overseas, and that we can lose policy. If foreign investors reduce their IN THE HOUSE OF REPRESENTATIVES some control over our means of production. lending to us, the tighter supply of credit Wednesday, September 30, 1987 Also, as economic power grows, so does the would force up interest rates, and perhaps political influence of foreign interests precipitate a recession. The Federal Re­ Mr. HENRY. Mr. Speaker, recently South within the U.S. serve's recent hike in interest rates, to the Korea announced that it was lifting arbitrary Despite the spate of recent purchases, the possible detriment of domestic economic import restrictions on the importation of for­ percentage of U.S. assets under foreign con­ growth, may have been to attract foreign eign manufactured automobiles. There was a trol is still very small. Moreover, the federal funds to finance our national debt. Foreign brief moment of elation in Detroit as American government restricts foreign ownership in investors and governments will increasingly industries considered essential or sensitive, call the tune for our monetary policy. automakers thought that there would be a re­ such as telecommunications, shipping, or The burgeoning debt also undermines our prieve from the unfair trading competition be­ aviation. It is important to keep in mind status as a world leader. We will find it diffi­ tween the United States and South Korea in that the U.S. continues to have more direct cult to insist that others follow our econom­ the automotive market. investment overseas than foreigners have ic or political leadership as our indebtedness That moment of joy was shortlived. Accord­ here. If we place sharp limits on their in­ to them mounts. Our failure at the Venice ing to Paul Lienert, columnist for the Detroit vestment, they will limit ours. My sense is Economic Summit to convince our allies to Free Press, imports of American manufac­ that it is too early to tell whether new limits adopt policies to stimulate world growth tured automobiles may amount to only 200 to are needed on foreign direct investment. We and our reduced influence in Third-World should, however, develop a better system of debt negotiations exemplify the difficulties 300 units this year. Why are the numbers so reporting requirements to monitor foreign encountered by a nation attempting to in­ meagre? inroads into the U.S. economy. struct others without having its own house Quoting Lienert: Less visible, but potentially more worri­ in order. • • • Imported cars are subject to a laun­ some than the purchase of companies or No country has ever managed to remain dry list of taxes, including a 50 percent real estate is the rapid borrowing of the U.S. both a great power and a great debtor. tariff, a 40 percent special excise, a defense from foreign interests. Last year only 16% Americans need to adopt healthier economic tax (equal to 10 percent of the special of foreign assets in the U.S. was in the form habits which reduce our need to borrow and excise> and value-added tax. Thus, a new of direct investment (such as factory owner­ increase our production and exports. That Cadillac DeVille, which costs about $21,000 ship), and 12% was in corporate stock, while means curbing our appetite for expensive in the United States, retails for the equiva­ 72% was in debt instruments, such as U.S. foreign goods, selling more exports, cutting lent of an eye-poping $87,000 after all the Treasury bonds and corporate bonds. In our federal budget deficit, and saving and taxes and tariffs are added. A 4-cylinder 1986 foreigners held $995 billion of U.S. investing more. America must once again Ford Taurus, which lists in the States for public and private debt. In just a few short become a nation that produces more than it around $10,000, costs a breathtaking years, the U.S. has gone from being the consumes. $76,000. world's largest creditor to being its largest Thank you, South Korea, for nothing! debtor. The net international investment position of the U.S. in 1982 was $137 billion DIPLOMATIC DOUBLE in the black. This year it will be some $400 STANDARD FOREIGN INVESTMENT IN THE billion in the red. By the early 1990s net UNITED STATES U.S. international debt could reach $1 tril­ lion. HON. GEORGE MILLER There are several reasons for the rapid ac­ HON. LEE H. HAMILTON cumulation of U.S debt. Much of the debt OF CALIFORNIA OF INDIANA owed to foreigners has gone to finance our IN THE HOUSE OF REPRESENTATIVES IN THE HOUSE OF REPRESENTATIVES huge federal budget deficits. U.S. consumers have also been on a buying spree, especially Wednesday, ·September 30, 1987 Wednesday, September 30, 1987 of foreign products, and have piled up Mr. MILLER of California. Mr. Speaker, Mr. HAMILTON. Mr. Speaker, I would like to heavy personal debts. In addition, the Fed­ since the Arias peace initiative was an­ insert my Washington Report for Wednesday, eral Reserve's tight money policy in the nounced in Guatemala earlier this month, the September 30, 1987 into the CONGRESSIONAL early 1980s drove up U.S. interest rates, of­ fering foreigners high rates of return. At Reagan administration has let no opportunity RECORD: the same time, a variety of problems-such slip to demean this historic effort. FOREIGN INVESTMENT IN THE U.S. as the declining competitivenes of American Each and every step toward compliance Hoosiers are increasingly concerned about industry, foreign import barriers, and the with the Arias accord by the Government of the growing foreign involvement in our high value of the U :s. dollar raising the Nicaragua has been denounced as ~osmatic economy. They hear about foreign interests price of our exports-led to our current and insincere: the lifting of restrictions on buying U.S. companies, and about the U.S. trade deficit. As long as our imports exceed Radio Catholica, the reopening of La Prensa owing huge sums of money to foreign inves­ our exports, we must finance the difference uncensored, the creation of a national recon­ tors. They fear that we are starting to lose by increasing our indebtedness to foreigners ciliation commission, the limited cease-fire. control over America's future. These fears or by selling off U.S. assets. can be overstated, but to some extent they The inflow of foreign capital is not all Most of the world, and those in Central Amer­ are justified. Increasingly our economic and bad. It can be beneficial if it finances pro­ ica who are sparing no effort to make this foreign policy decisions may be influenced ductive investments that create jobs and peace process succeed, are encouraged, as by our indebtedness to foreigners. generate the future earnings needed to are many in this body who have opposed the Increased direct investment by foreigners repay our creditors. Unfortunately, our administration's policy of subverting the Nica­ in the United States has prompted wide­ growing indebtedness reflects private con­ raguan Government-a policy many believe spread publicity. Their purchase of U.S. sumption and military spending more than contributed to the antidemocratic restrictions companies ranging from Standard of Ohio investment. U.S. investment as a proportion in Managua. to Smith & Wesson generates feelings of un­ of gross national product during this decade easiness. Foreign investors now own 46% of differed only slightly from earlier years. The administration sees no hope in the the commercial real estate in downtown Los If we do not generate economic growth to movements toward peace. Apparently, the Angeles. Foreigners flush with cash are at­ pay the interest on our debt, we will have to President continues to believe that the plan, tracted to American technology, low U.S. pay for it by a reduced American standard which has the unanimous support of the four --~ .... ---- ...... --~ --- •• - :::J• ----~-~~~

September 30, 1987 EXTENSIONS OF REMARKS 25915 Central American Presidents with most to fear Water is a scarce resource. Giving it away DEFENSE REFORM BIG FLOP from Nicaragua, is fatally flawed. just encourages waste. The Interior Depart­ The administration also continues to refuse ment puts the taxpayer subsidy on most HON. CURT WELDON any bilateral negotiations with President Bureau of Reclamation water at a whopping OF PENNSYLVANIA Ortega or other leaders of the Nicaraguan 85 percent. The lucky recipients of this wind­ IN THE HOUSE OF REPRESENTATIVES Government. The President tells us that he fall have little or no incentive to conserve will not negotiate with a government which is water. Wednesday, September 30, 1987 militarily and politically allied with the Soviet My bill gives them that incentive. While agri­ Mr. WELDON. Mr. Speaker, in the continu­ Union, restricts freedom of the press, cracks business still won't be paying the full cost of ing effort to get the budget under control, down on antigovernment radio broadcasts, the water, it's a step toward ending water wel­ many have looked to the defense budget for outlaws trade unions, intimidates the church, fare. reductions. As with most areas of the budget, or employs other antidemocratic policies. Finally, there is the question of fairness. we can save money in defense by increasing So it was with a certain sense of confusion program efficiency and management. But we that I read over the weekend of Vice Presi­ Other water users pay the full price. While cities and suburbs look for new-and costly­ will not achieve these savings without the co­ dent BUSH's official visit to Poland, where he operation of those who administer defense engaged in discussions with an antidemocra~ic water supplies, the Federal Government is giving water away to agribusiness. This isn't programs. Soviet puppet Wojciech Jaruzelski who, w1th Not long ago, Congress adopted some of right. Soviet military might, overthrew the Polish the Packard Commission reforms to increase My bill allows the taxpayers to recapture Government, abolished trade unions and jailed efficiency of defense procurement and ulti­ some of the subsidy agribusiness gets from their leaders, prohibits dissident press and mately, to get more for our defense dollars. media activities, and confronts the Catholic them. It's fair, it's fiscally responsible, and it But as the attached editorial points out, this church. will encourage greater conservation of water. effort has gone astray. Unfortunately, the This is not the first time that I have been This reform is long overdue. I hope my col­ need for savings has not disappeared. As we struck by the administration's apparent willing­ leagues will support it. seek ways to implement policies aimed at ness to get off its high horse and engage in H.R. 3384 budget reduction, this commentary may be in­ normal political relations with countries whose structive. I think most of my colleagues on the antidemocratic nature is repugnant to this Be it enacted by the Senate and House of Armed Services Committee share these con­ Member of Congress, and presumably to Representatives of the United States of cerns. I hope other Members will take the many others as well; Marcos' Philippines, America in Congress assembled, That part II of subchapter B of chapter 1 of the time to review this editorial. I include the edi­ Botha's South Africa, Pinochet's Chile, Internal Revenue Code of 1986 ." lishment mobilized against him and his rela­ water subsidy is nearing $3 billion. (b) The table of sections for part II of sub­ tions with Under Secretary William Howard Cinco Farms gets subsidized water worth chapter B of chapter 1 of such Code is Taft IV none too good, his frustrations got well over $1 million a year. In 1983, Cinco re­ amended by adding at the end thereof the the better of him. In his judgment, the job ceived more than $1 million in the Cotton Sur­ following new item: was not "doable under conditions of status quo." Mr. Taft, in contrast, contends the job plus-Reduction Program. How do we explain "Sec. 90. Federal irrigation subsidies." is doable, provided the right man is tabbed that to the taxpayers? (c) The amendments made by this section to replace Mr. Godwin. We doubt it. Mr. The consequences of this giveaway go shall apply to water delivered to the taxpay­ Godwin, a man of extensive government and beyond budget busting. Subsidizing water is ir­ er in months beginning after the date of the business experience, was Mr. Weinberger's responsible water policy. enactment of this Act. handpicked candidate a year ago. His resig- 25916 EXTENSIONS OF REMARKS September 30, 1987 nation has alerted Capitol Hill to the very "We're very pleased and proud," Virginia In addition, I believe that we need to know real prospect that the latest Pentagon re­ Leach said. "We're very proud of this what the financial implications are of the nu­ forms are being "reinterpreted or ignored" honor." , from a famous porcelain-manufac­ "Virginia N. and Philip F. Leach's commu­ so-called notch years. turer family. In the upper left part one can nity pride and concern for others are re­ Notch-year constituents have their benefits see the American and Hungarian coat-of­ flected in the countless hours of service as arms. Under them is visable the outline of well as the many acts of kindness and sup­ formulated under either the new formula or a the historical Roman-style cathedral of port they give toward the betterment of the transition formula, whichever gives them a Pees. On the right side of the medal there is Attleboro area," the committee said in a higher dollar figure. Is this method of calculat­ a remarkable protrait of Zolnay, full of prepared statement. ing benefits fair to those born during the notch brightness and intellectual power that en­ The annual award usually goes to one years and those born after 1921? Is it true abled him to become such an extraordinari­ person, but the selection committee decided that retirees born during the notch have been ly successful artist. to give it to both Philip and Virginia Leach singled out to get benefits lower than other re­ On the reverse of the medal there appears this year. tirees? I have also heard and read many con­ a reproduction of one of the most successful The Person of the Year Award is present­ flicting explanations about whether those born of Zolnay's artistic creations, Sequoya ed to an individual who has, by his or her <1770-1843), inventor of the Cherokee Al­ efforts, made a positive impact on their during the notch years are better off than phabet. Zolnay did this brilliant relief for community, the Attleboro area, society and those born after 1921 as a result of their ben­ the "Hall of Fame" in the U.S. Capitol, their fellow man, according to the commit­ efits being calculated under the transition for­ Washington, D.C. With this work the Hun­ tee. mula. garian artist immortalized Oklahoma's September 30, 1987 EXTENSIONS OF REMARKS 25917 famous son and the native Indian culture. Gate with the famous lions. Through this medal. At least one more step should be The circular script emphasizes Zolnay's work he gained a great reputation in the St. taken: we have published an Arthistorical 125th Anniversary. In the background you Louis art community. He taught drawing in Zolnay-essay with photos. This we are pre­ can see the noble outline of the Capitol and the Art Academy and became an artist-in­ pared to do, if we can collect enough money the Supreme Court. This American commis­ residence at Washington University. He ac­ for the purpose. sion was perhaps the greatest honor a cumulated so many orders that, after the Sources: nation can give to an immigrant artist. fair, he stayed in St. Louis for a decade. His Leslie Konnyu: Magyarok St. Louisban A legitimate question arises: Who was this main works executed there are: "The La­ in 1914; grave memorials; and de­ sippi Valley. Ligoneer: Bethlen Press, 1976. father, Ignatius Zolnay was the first manag­ velopment decorations. He was greatly dis­ Leslie Konnyu: Hungarian Artists Outside er of the Zolnay's porcelain factory, found­ appointed in 1913, when he did not get the Hungary. St. L. Am. Hungarian Review, ed in 1851 in Pees, Hungary. He was a very commission for the German "Naked Truth" 1977. private man and an amateur artist with statue. For this reason he left St. Louis for Kunz-Zolnay: fllustrations of Selected strong convictions. In 1862 he fell in love Washington, D.C .. He later came back for Works in the Various Nat. Sections. StLouis with an actress of German origin and, lectures, exhibitions and for execution of University Exposition, 1904 . against the opposition of the Zsolnays, he other commissions: such as "The Golfer" . Lyka, Charles: nz. Catalog of Hungarian married her. Of course there was a big fight (Missouri Historical Society); "Governor Fine Arts Exhibit. St. L.: Expo, 1904. in the family: and, as a result, the hasty and Mrs. Davis Francis' Memorial" ; "Education", friezes on Story of the Zsolnay Factory and Family). new country. Bucuresti grew rapidly and Central High School (1916), "Mrs. W. Budapest, 1975. looked like a great location for a prosperous Hoxie's Memorials at Arlington Cemetery Author: Leslie Konnyu is a Hungarian porcelain store. Zolnay decided to settle and "The Sequoya Relief", we mentioned al­ born poet, writer, lecturer and publisher there with his wife and newborn son, ready, at the U.S. Capitol. From Washing­ who resides in St. Louis, MO. George Julian. Furthermore, against the ton, D.C., he traveled to different Southern advice of his Hungarian relatives, he decid­ cities ·where he left dozens of beautiful pa­ ed to accept Rumanian citizenship. After an triotic monuments. Nashville, Tennessee is a SOCIAL SECURITY NOTCH initial success, the business slowed down. real depository of this great artist: "Sam After graduating from the Rumanian ele­ Davis Statue"