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Extensions of Remarks 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 United States trade the debt crisis is one way of preventing it. deficit to decline, substantial growth must OF NEW YORK 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 <A> 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 <B> 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 <herein­ U.S. goods and services. The debt crisis has (4) The United States has a major stake in Third World recovery. Renewed economic after in this joint resolution referred to as severely inhibited the growth potential of that the "Commission"). market. growth in Africa, Asia, and Latin America would mean expanded markets for United SEC. 4. MEMBERSHIP. The developing world is over $1 trillion in States products and new employment op­ (a) NUMBER AND APPOINTMENT.-The com­ debt. U.S. commercial banks alone are said to portunities for United States workers. It mission shall be composed of 17 members have 85 million dollars' worth in loans to the would bring higher demand for United appointed as follows: Banker 15 nations. The consequences of a States agricultural exports. A revived Third (1) 7 members appointed by the President, default by the major debtors could be severe. World market would help reduce the United not more than 4 of whom shall be from the The situation not only threatens the stability States trade deficit, would provide new in­ same political party; of the world's economy, it is a threat to the vestment opportunities for United States (2) 5 members appointed by the Speaker security of all democratic nations. Latin Amer­ corporations, and would greatly strengthen of the House, not more than 3 of whom the financial situation of United States shall be from the same political party; and ica has several nations which are struggling to banks. (3) 5 members appointed by the majority build a democratic tradition. This is not an <5> 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 <b) TERMs.-Members shall be appointed General Schedule pay rates, except that no SALUTE TO W. ROBERT for the life of the Commission. individual so appointed may receive pay in MORGAN <c) VACANCY.-A vacancy in the Commis­ excess of the maximum annual rate of basic sion shall be filled in the manner in which pay payable for GS-18 of the General the original appointment was made. Schedule. HON. NORMAN Y. MINETA (d) CHAIRPERSON.-The President shall (d) EXPERTS AND CONSULTANTS.-With the OF CALIFORNIA designate a Chairperson from among the approval of the Commission, the Executive members of the Commission. IN THE HOUSE OF REPRESENTATIVES (e) COMPENSATION.- Director may procure temporary and inter­ mittent services under section 3109(b) of Wednesday, September 30, 1987 (!) BASIC PAY.-Members of the Commis­ sion shall not be entitled to pay for service title 5, United States Code, but at rates for Mr. MINETA. Mr. Speaker, it is a pleasure to on the Commission. individuals not to exceed the daily equiva­ take this opportunity to salute Mr. W. Robert (2) TRAVEL EXPENSES.-Members may be al­ lent of the maximum annual rate of basic pay payable for GS-18 of the General Morgan-a good friend and an avid patron of lowed travel and subsistence expenses (in­ the arts.
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