Education Debate

October 16th, 1998

Mr. PAUL. Mr. Speaker, I appreciate the opportunity to express my thoughts on the education debate that has consumed much of this Congress in recent days. For all the sound and fury generated by the argument over education, the truth is that the difference between the congressional leadership and the administration are not that significant; both wish to strengthen the unconstitutional system of centralized education. I trust I need not go into the flaws with President Clinton’s command-and-control approach to education. However, this Congress has failed to present a true, constitutional alternative to President Clinton’s proposals to further nationalize education.

It is becoming increasingly clear that the experiment in centralized control of education has failed. Even data from the National Assessment of Education Progress [NAEP] shows that students in States where control over education is decentralized score approximately 10 percentage points higher on NAEP’s tests in math and reading than students from States with highly-centralized education systems. Clearly, the drafters of the Constitution knew what they were doing when they forbade the Federal Government from meddling in education.

American children deserve nothing less than the best educational opportunities, not warmed-over versions of the disastrous educational policies of the past. That is why I introduced HR1816, the Family Education Freedom Act. This bill would give parents an inflation-adjusted $3,000 per annum tax credit, per child for educational expenses. The credit applies to those in public, private, parochial, or home schooling.

This bill is the largest tax credit for education in the history of our great Republic and it returns the fundamental principal of a truly free economy to America’s education system: what the great economist Ludwig von Mises called “consumer sovereignty.” Consumer sovereignty simply means consumers decide who succeeds or fails in the market. Businesses that best satisfy consumer demand will be the most successful. Consumer sovereignty is the means by which the free market maximizes human happiness.

Currently, consumers are less than sovereign in the education “market.” Funding decisions are increasingly controlled by the Federal Government. Because “he who pays the piper calls the tune,” public, and even private schools, are paying greater attention to the dictates of Federal “educrats” while ignoring the wishes of the parents to an ever-greater degree. As such, the lack of consumer sovereignty in education is destroying parental control of education and replacing it with State control. Restoring parental control is the key to improving education.

Of course I applaud all efforts which move in this direction. the Gingrich/Coverdell education tax cut, The Granger/Dunn bill, and, yes, President Clinton’s college tax credits are good first steps in the direction I advocate. However, Congress must act boldly, we can ill afford to waste another year without a revolutionary change in our policy. I believe my bill sparks this revolution and I am disappointed that the leadership of this Congress chose to ignore this fundamental reform and instead focused on reauthorizing great society programs, creating new Federal education programs (such as those contained in the Reading Excellence Act and the four new Federal programs created by the Higher Education Act), and promoting the pseudo-federalism of block grants.

One area where this Congress was successful in fighting for a constitutional education policy was in resisting President Clinton’s drive for national testing. I do wish to express my support for the provisions banning the development of national testing and thank Mr. GOODLING for his leadership in this struggle. However, I wish this provision did no come at the price of $1.1 billion in new Federal spending. In addition, I note that this Congress is taking several steps toward creating a national curriculum, particularly through the Reading Excellence Act, which dictates teaching methodologies to every classroom in the Nation and creates a Federal definition of reading, thus making compliance with Federal standards the goal of education.

So, even when Congress resists one proposal to further nationalize education, it supports another form of nationalization. Some Members will claim they are resisting nationalization and even standing up for the 10th amendment by fighting to spend billions of taxpayer dollars on block grants. These Members say that the expenditure levels do not matter, it is the way the money that is spent which is important. Contrary to the view of these well-meaning but misguided members, the amount of taxpayer dollars spent on Federal education programs do matter.

First of all, the Federal Government lacks constitutional authority to redistribute monies between States and taxpayers for the purpose of education, regardless of whether the monies are redistributed through Federal programs or through grants. There is no “block grant exception” to the principles of federalism embodied in the U.S. Constitution.

Furthermore, the Federal Government’s power to treat State governments as their administrative subordinates stems from an abuse of Congress’ taxing-and-spending power. Submitting to Federal control is the only way State and local officials can recapture any part of the monies of the Federal Government has illegitimately taken from a State’s citizens. Of course, this is also the only way State officials can tax citizens of other States to support their education programs. It is the rare official who can afford not to bow to Federal dictates in exchange for Federal funding!

As long as the Federal Government controls education dollars, States and local schools will obey Federal mandates; the core problem is not that Federal monies are given with the inevitable strings attached, the real problem is the existence of Federal taxation and funding.

Since Federal spending is the root of Federal control, by increasing Federal spending this Congress is laying the groundwork for future Congresses to fasten more and more mandates on the States. Because State and even local officials, not Federal bureaucrats, will be carrying out these mandates, this system could complete the transformation of the State governments into mere agents of the Federal Government.

Congress has used block grants to avoid addressing philosophical and constitutional questions of the role of the Federal and State governments by means of adjustments in management in the name of devolution. Devolution is said to return to State’s rights by decentralizing the management of Federal programs. This is a new 1990′s definition of the original concept of federalism and is a poor substitute for the original, constitutional definition of federalism.

While it is true that lower levels of intervention are not as bad as micro-management at the Federal level, Congress’ constitutional and moral responsibility is not to make the Federal education bureaucracy “less bad.” Rather, we must act now to put parents back in charge of education and thus make American education once again the envy of the world.

Hopefully the next Congress will be more reverent toward their duty to the U.S. Constitution and America’s children. The price of Congress’ failure to return to the Constitution in the area of education will be paid by the next generation of American children. In short, we cannot afford to continue on the policy road we have been going down. The cost of inaction to our future generations is simply too great.

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Similar posts:

• 2000: End of Session Issues
• 2003: Education Improvement Tax Cut Act
• 2001: Introduction of the Education Improvement Tax Cut Act
• 2001: Paul Introduces Bold Education Initiatives
• 1997: Introduction of the Family Education Freedom Act

Hate Crimes and Individual Rights

October 16th, 1998

Mr. PAUL. Mr. Speaker, I commend to my colleagues in Congress as well as citizens everywhere an article authored by Richard Sincere, Jr., President of Gays and Lesbians for Individual Liberty. Mr. Sincere aptly describes how the very essence of hate crimes undermines a pillar of a free and just society; that is, equal treatment under the law irrespective of which particular group or groups with whom an individual associates. Ours is a republic based upon the rights of the individual.

[From the Houston Chronicle, Oct. 14, 1998]

GAY STUDENT’S MURDER IS NO REASON TO MAKE BAD LAW

(By Richard E. Sincere, Jr.)

The wicked murder of Matthew Shepard by two thugs, assisted by two equally contemptible accomplices, has resurrected a debate about the need for hate-crime laws.

Shepard, an openly gay University of Wyoming student who had been widely praised for his talents, ambitions and personality, last week was beaten senseless and left for dead, tied up like a scarecrow along a fence on a little-traveled country road. Miraculously, he was found by passers-by many hours after the attack, still struggling for life when he was rushed to a hospital in Fort Collins, CO, where he died Monday while on life support.

Local law enforcement officials in Laramie, WY, where the crime took place, quickly arrested the alleged perpetrators-two men who performed the assault and two women who helped them hide their deed-and it looks like they will be punished to the full extent the law allows if they are convicted. With Shepard’s death, they face a possible death sentence.

Laramie, a university community of 27,000 people, is feeling both shame and outrage, a sentiment shared by all right-minded people throughout the country, indeed around the world. News of this brutal assault has appeared everywhere in print and broadcast media.

The crime against Shepard has renewed calls for passing hate-crime legislation, both in Wyoming and nationwide. Wyoming Gov. Jim Geringer and President Bill Clinton have said that this attack shows the need for such laws.

This would be a mistake. It would be a mistake because hate-crime laws, however well intentioned, are feel-good laws whose primary result is thought control, violating our constitutional guarantees of freedom of speech and of conscience. It would be a mistake because it suggests that crimes against some people are worse than crimes against others. And it would be a mistake because it uses a personal tragedy, deeply felt by Shepard’s family and friends, to advance a political agenda.

Hunter College Professor Wayne Dynes, editor of the Encyclopedia of Homosexuality, notes that hate-crime laws, if they are to be applied in a constitutional manner, must be content-neutral. He notes this example: “Countless numbers of people, aware of the unspeakable atrocities under his leadership, hated Pol Pot. This hate was surely well warranted. If one of the Pol Pot haters had killed him, would this be a hate crime? Why not?”

Dynes adds: “In seeking to exculpate the killer, we would get into the question of whether some hate is ‘justified’ and some is not.” He concludes that hate-crime prosecutions “will be used to sanction certain belief systems-systems which the enforcer would like, in some Orwellian fashion, to make unthinkable. This is not a proper use of law.”

Under our system of justice, everyone is equal before the law. Those accused of crimes are entitled to certain constitutional protection, which we must cherish, and the victims of a crime-whether a Bill Gates or the poorest street-sweeper in a slum-are entitled to the same respect. (In the Middle Ages, the law required a greater punishment for killing a rich man or noble than it did for killing a peasant or a laborer. Our law recognizes no such distinctions.)

So, too, with class- or group-based distinctions. Is it worse to kill a man because he is foreign-born than it is to kill him to steal his car? Is it worse to kill a woman because she is black than because she cut you off in traffic? Is it worse to beat up a fat sissy boy if the bullies think their victim is gay, or if they dislike him because he is fat? Crime is crime; assault is assault. All deserve punishment.

Hateful thoughts may be disagreeable, but they are not crimes in themselves. The crimes that result from hateful thoughts-whether vandalism, assault or murder-are already punishable by existing statutes.

In a speech at the University of Texas last year, libertarian activist Gene Cisewski said: “We should be anti-violence, period. Any act of violence has to be punished swiftly and severely and it shouldn’t matter who the victim is. The initiation of force is wrong and it doesn’t matter why-the mere fact you had a motive is enough.”

Cisewski acknowledged the good intentions of those who propose hate-crime laws. He noted that “the reason for the call for (such laws) comes from bad enforcement of the laws.” Police and prosecutors have been willing to look the other way when victims came from unfavored groups. Luckily, in the Shepard case, the authorities seem unwavering in their prosecution. This is, unfortunately, not always the case.

The answer, Cisewski suggested, and I agree, is that “we hold every law enforcement official and every court official who administers justice to the standard that every American is guaranteed equal protection under the law.”

Hate-crime laws set up certain privileged categories of people, defined by the groups to which they belong, and offers them unequal protection under the law. This is wrong. It is sad to see a young man’s personal misfortune used by various special-interest groups to advance such an agenda.

We are all shocked and dismayed by the assault on Shepard. Such brutality cannot, should not be countenanced. Let us not multiply the crimes of his attackers by writing bad law in response.

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Similar posts:

• 1998: Rights of the Individual
• 1998: During Debate on HR 424
• 1999: Good Time for Congress to Reassess Antitrust Laws
• 1997: Juvenile Crime Control Anddelinquency Prevention Act of 1997
• 1999: We Must Not Fund This Senseless Bombing

Monetary Policy

October 16th, 1998

Mr. PAUL. Mr. Speaker, a world-wide financial crisis is now upon us.

For 2 years, I have called attention to this predictable event hoping the Congress would deal with it in a serious manner.

Although many countries are now suffering more than the United States, in time, I am sure our problems will become much greater

A world-wide system of fiat money is the root of the crisis. The post-World War II Bretton Woods gold-exchange system was seriously flawed, and free market economists from the start predicted its demise. Twenty-seven years later, on August 15, 1971, it ended with a bang ushering in its turbulent and commodity-driven inflation of the 1970′s.

Now, after another 27 years, we are seeing the end of the post-Bretton Woods floating rate system with another bang as the financial asset inflation of the 1980′s and 1990′s collapses. A new system is now required.

Just as the Bretton Woods system was never repaired due to its flaws, so too will it be impossible to rebuild the floating rate system of the past 27 years. The sooner we admit to its total failure, and start planning for sound money, the better.

We must understand the serious flaw in the current system that is playing havoc with world markets. When license is given to central banks to inflate (debase) a currency, they eventually do so. Politicians love the central bank’s role as lender of last resort and their power to monetize the steady stream of public debt generated by the largesse that guarantees the politician’s reelection.

The constitutional or credit restraint of a commodity standard of money offers stability and non-inflationary growth but does not accommodate the special interests that demand benefits bigger and faster than normal markets permit. The only problem is the financial havoc that results when the unsound system is forced into a major correction which are inherent to all fiat systems.

That is what we are witnessing today. The world-wide fragile financial system is now collapsing and tragically the only cry is for more credit inflation because the cause of our dilemma is not understood. Attempts at credit stimulation with interest rates below 1 percent is doing nothing for Japan’s economy and for good reasons. it is the wrong treatment for the wrong diagnosis.

If the problem were merely that there were not enough money, then money creation alone could make us all millionaires and no one would have to work. But increasing the money supply does not increase wealth. Only work and savings do that. The deception comes because, for a while for the luck few, benefits are received when government inflate the currency and pass it out for political reasons.

But in time-and that time is now-it comes to an end. Even the beneficiaries suffer the inevitable consequences of a philosophy that teaches wealth comes from money creation and that central banks are acceptable central economic planners-even in countries such as the United States where many pay lip service to free markets and free trade.

The tragedy in the end is far more damaging to the innocent than any benefit that was supposed to be delivered to the people as a whole. There is no justifiable trade-off. The costs far exceed the benefits. In addition, the economic chaos leads too frequently to a loss of personal liberty.

A program to prevent this from happening is necessary.

First, the Federal Reserve should be denied the power to fix interest rates and buy government debt. It should not be central economic planner through manipulation of money and credit.

Second, Congress should legalize the Constitutional principle that gold and silver be legal tender by prohibiting sales and capital gains taxes from being placed on all American legal tender coins.

Third, we must abandon the tradition of bailing out bad debtors, foreign and domestic. No International Monetary Fund and related institution funding to prop up bankrupt countries, and no Federal Reserve-orchestrated bailouts such as Long Term Capital Management LP. Liquidation of bad debt and investments must be permitted.

Fourth, policy elsewhere must conform to free markets and free trade. Taxes, as well as government spending, should be lowered. Regulations should be greatly reduced, and all voluntary economic transactions in hiring practices should be permitted. No control on wages and prices should be imposed.

Following a policy of this sort could quickly restore growth and stability to any filing economy and soften the blow for all those about to experience the connections that have been put in place by previous years of mischief, mismanagement and monetary inflation.

Short of a free market, sound money approach will guarantee a sustained attack on personal liberty as governments grow more authoritarian and militaristic.

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Similar posts:

• 1998: Worldwide Financial Crisis
• 2000: Congress Ignores its Constitutional Responsibility Regarding Monetary Policy
• 2000: Warning About Foreign Policy and Monetary Policy
• 2007: Statement for Hearing on “Monetary Policy and the State of the Economy”
• 2004: The Folly of Fed Interest Rates

Rights of the Individual

October 14th, 1998

Mr. PAUL. Mr. Speaker, I commend to my colleagues in Congress as well as citizens everywhere an article authored by Michael Kelly, National Journal editor. Mr. Kelly aptly describes how the notion of hate crimes undermines a pillar of a free and just society; that is, equal treatment under the law irrespective of which particular group or groups with whom an individual associates. Ours is a republic based upon the rights of the individual.

PUNISHING ‘HATE CRIMES’

(By Michael Kelly)

As one who wholeheartedly supports capital punishment, I have what seems to me a cleareyed vision of what justice demands in the murder of Matthew Shepard, the 21-year-old Wyoming college student who was, one night last week, robbed, pistol-whipped, tied to a fence and left to die. Bring in the monsters who did this, try ‘em, verdict ‘em and string ‘em up, preferably before an applauding crowd of thousands.

And justice does appear on the way to being served. Two young men-Russell A. Henderson and Aaron J. McKinney-have been arrested and charged with first-degree murder; their girlfriends have been charged as accessories. There does not seem to be a lot of doubt that Henderson and McKinney did commit the acts that caused Shepard’s death, nor does it seem at all likely that they will escape punishment.

But this, it is said, is not enough. Because Shepard was gay, and because his killers appear to have been motivated in part by an anti-gay animus (though police say robbery was the primary motive), justice is said to demand more. Specifically, it demands more bad law.

“Hate-crime” laws mandate increased penalties for defendants found guilty of committing crimes inspired by certain categories of prejudice. In 21 states and the District of Columbia, the categories are: race, religion, color, national origin and sexual orientation. Nineteen additional states have hate-crime laws that do not cover sexual orientation. Ten states, including Wyoming, have not passed categorical hate-crime laws. There is also a federal law, which covers race, religion, color and national origin but not sex or sexual orientation.

For Shepard’s sake, the cry arises, Wyoming must pass a hate-crime law, and Congress must pass a new, more sweeping, Federal Hate Crimes Protection Act, which would add to the roster of crimes made federal offenses those inspired by bigotry based on sex, disability and sexual orientation. “There is something we can do about this. Congress needs to pass our tough hate crimes legislation,” President Clinton declared Monday, the day Shepard died of his injuries.

At least he is consistent. No president has ever been more willing to assault liberty in the pursuit of political happiness than has this one. Clinton is always willing to embrace any new erosion of rights, as long as there is a group of voters or political contributors out there who wish it so. This is one area in which Clinton has been thoroughly bipartisan. In his five years in office, he has joined Republicans in Congress on quite a spree of liberty-bashing. He has signed laws that have stripped habeas corpus to its bones, vastly increased the number of crimes deemed federal offenses, established mindless mandatory sentencing and targeted certain classes of defendants-terrorists, drug pushers-for the special evisceration of rights.

And playing to the other side of the political spectrum, Clinton has consistently and strongly supported the expansion of harassment and discrimination law, an expansion that has in recent years increasingly worked to criminalize behavior that government once regarded as private. Well, at least he supported such law until the case of Jones v. Clinton arose.

Of all the violence that has been done in this great expansion of state authority over, and criminalization of, the private behavior and thoughts of citizens, none is more serious than that perpetuated by the hate-crime laws. Here, we are truly in the realm of thought crimes. Hate-crime laws require the state to treat one physical assault differently from the way it would treat another-solely because the state has decided that one motive for assaulting a person is more heinous than another.

What Henderson and McKinney allegedly did was a terrible, evil thing. But would it have been less terrible if Shepard had not been gay? If Henderson and McKinney beat Shepard to death because they hated him personally, not as a member of a group, should the law treat them more lightly? Yes, say hate-crime laws.

In 1996 the FBI recorded 1,281 “crimes against persons” for reasons of sexual-orientation bias. Two of these were murders and 222 were aggravated assaults. Four hundred and seventy-two of what the government termed hate crimes were not assaults but “acts of intimidation.” These latter would not be crimes except for the determination that expressions of certain prejudices and hatreds were in themselves criminal offenses.

There is a long history of police and prosecutors slighting assaults against gays and lesbians. Justice demands that the cops and the courts treat the perpetrators of assaults against citizens who happen to be homosexual as harshly as they do the perpetrators of assaults against anyone else. But not more so.

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Similar posts:

• 1998: Hate Crimes and Individual Rights
• 1999: During Debate on Providing for Consideration of H.R. 1501, Consequences for Juvenile Offenders Act of 1999, and H.R. 2122, Mandatory Gun Show Background Check Act
• 1999: Consequences of Gun Control
• 1998: Child Protection and Sexual Predator Punishment Act of 1998
• 1998: During Debate on HR 424

During Debate on the Medicare Home Health and Veterans Health Care Improvement Act

October 13th, 1998

Mr. PAUL. Mr. Speaker, I appreciate the opportunity to explain why I must oppose HR4567 even though I support reforming the Interim Payment System (IPS) and I certainly support expanding the health care options available to American veterans. However, I cannot support this bill because this solution to home care is inadequate and it raises taxes on Americans instead of cutting wasteful, unconstitutional spending to offset the bill’s increases in expenditures.

I am pleased that Congress is at last taking action to address the problems created by the IPS. Unless the IPS is reformed, efficient home care agencies across the country may be forced to close. This would raise Medicare costs, as more seniors would be forced to enter nursing homes or forced to seek care from a limited number of home health care agencies. In fact, those agencies that survive the IPS will have been granted a virtual monopoly over the home care market. Only in Washington could punishing efficient businesses and creating a monopoly be sold as a cost-cutting measure!

Congress does need to act to ensure that affordable home care remains available to the millions of senior citizens who rely on home care. However, the proposal before us today does not address the concerns of small providers in states such as Texas. Instead, it increases the reimbursement rate of home care agencies in other states. I am also concerned that the reimbursement formula in this bill continues to saddle younger home health agencies with lower rates of reimbursement than similarly situated agencies who have been in operation longer. Any IPS reform worthy of support should place all health care agencies on a level playing field for reimbursements.

A member of my staff has been informed by a small home health care operator in my district that passage of this bill would allow them only to provide an additional eight visits per year. This will not keep home health patients with complex medical conditions out of nursing homes and hospitals. Congress should implement a real, budget-neutral home health care reform rather than waste our time and the taxpayers’ money with the phony reform before us today.

Mr. Speaker, I also support the language of the bill expanding the health care options available to veterans’ benefits. Ensuring the nation’s veterans have a quality health care system should be one of the governments’ top priorities. In fact, I am currently working on a plan to improve veterans’ health care by allowing them greater access to Medical Savings Accounts (MSAs). However, I cannot, in good conscience, support the proposals before us today because, for all their good intentions, it is fatally flawed in implementation for it attempts to offset its new spending with a tax increase.

Now I know many of the bill’s supporters will claim that this is not a tax increase just an adjustment in the qualifications for a tax benefit or tightening a tax loophole. However, the fact is that by raising the threshold before a taxpayer can rollover their traditional IRA into a Roth IRA the federal government is forcing some people to pay higher taxes than they otherwise would, thus they are raising taxes. It is morally wrong for Congress to raise taxes on one group of Americans in order to provide benefits for another group of Americans.

Instead of raising taxes Congress should “offset” these programs by cutting spending in other areas. In particular, Congress should finance veterans health care by reducing expenditures wasted on global adventurism, such as the Bosnia mission. Congress should stop spending Americans blood and treasure to intervene in quarrels that do not concern the American people.

Similarly, Congress should seek funds for an increased expenditure on home care by ending federal support for institutions such as the International Monetary Fund (IMF), which benefit wealthy bankers and powerful interests but not the American people. At a time when the federal government continues to grow to historic heights and meddles in every facet of American life I cannot believe that Congress cannot find expenditure cuts to finance the programs in this bill!

Mr. Speaker, I must also note that the only time this Congress seems concerned with offsets is when we are either cutting taxes or increasing benefits to groups like veterans or senior citizens. The problem is not a lack of funds but a refusal of this Congress to set proper priorities and put the needs of the American people first.

In conclusion, Mr. Speaker, I call upon this Congress to reject this bill and instead support an IPS reform that is fair to all home care providers and does not finance worthwhile changes in Medicare by raising taxes. Instead, Congress should offset the cost to these worthy programs by cutting programs that do not benefit the American people.

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Similar posts:

• 1999: Conference Report on H.R. 3194, Consolidated Appropriations and District of Columbia Appropriations Act, 2000
• 2008: Statement on HR 6445, on Veterans Healthcare
• 2003: Comprehensive Health Care Reform without Socialized Medicine
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• 2007: Statement of Ron Paul on Introducing the Cancer and Terminal Illness Patient Health Care Act

New Global Economic Plan

October 11th, 1998

Mr. PAUL. Global leaders are scurrying around to put together, as quickly as possible, a new plan to solve the international financial crisis.

The world economies have been built on generous credit expansion with each country inflating their currencies at different rates. Additionally, each country has had different political, tax, and regulatory policies leading to various degrees of trust and stability. Economies that have “enjoyed” inflationary booms, by their very nature, must undergo a market correction. The market demands deflation of all excesses, while the politicians and special interests agitate for continued credit inflation. Under these circumstances, financial assets may deflate in price but monetary inflation continues and the currency is further depreciated thus putting serious pressure on the dollar; as in the case of the United States.

Fluctuating fiat currencies, no matter how inefficient as compared to a world commodity monetary standard, function solely because exchange rates are allowed to fluctuate and currency movements across borders are freely permitted as capital seeks the most efficient market. This process provides an indication when host countries need to improve monetary and fiscal policy.

A gold standard solves capital flow problems automatically and avoids all currency speculation. Gold prevents excesses from developing to any dangerous level.

Decades ago, the gold standard was abandoned and now our global planners want to take another step to regulate all capital flows throughout the world thus removing the only good indicator left to warn of dangers ahead and the need for sound reform. The rapid transfer of capital around the world is the messenger and not the cause. Killing the messenger will only hide and increase distortions while prolonging the economic pain.

The proposal of the Group of 22 to regulate capital flows through a new “World Central Bank” prevents any effort to restore efficient market mechanisms and prevents any serious discussion for using gold as the money of choice.

All money managers in major countries decry currency controls by any individual country yet are now about to embark on a new world-wide approach to regulating all capital flows-a global economic plan to socialize all world credit. But, it won’t work because the plan is deeply and inherently flawed.

First, the plan demands additional appropriations to transfer wealth from the richer to the poorer nations through increased funding of the International Monetary Fund, World Bank, Development Bank, and direct foreign aid programs.

Second, it calls for more credit expansion by the richer nations, more loan guarantees, and export-import bank credits and, indirectly, by providing credit to the Exchange Stabilization Fund and possibly to the Bank International Settlements.

Third this plan calls for an international government agreement to strictly control capital flows and mandate debt forgiveness in contrast to allowing countries to default. Controlling swift movements of capital is impossible and any attempt only encourages world government through planning by a world fiat monetary system. Any temporary “benefit” can only be achieved through an authoritarian approach to managing the world economy, all done with the pretense of preserving financial stability at the expense of national sovereignty and personal liberty.

Let there be no doubt, the current chaos is being used to promote a new world fiat monetary system while giving political powers to its managers.

Instead, we should be talking about abandoning the paper money system we have lived with for 27 years. It has, after all, brought us the current world-wide financial mess.

Free markets and stable money should be our goal, not further institutionalizing of world economic planning and fiat money at the sacrifice of personal liberty. Indeed, we need a serious discussion of the current crisis but so far no one should be encouraged by the direction in which the Group of 22 is going. Our responsibility here in the Congress is to protect the dollar, not to sit idly by as it’s being deliberately devalued.

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Similar posts:

• 2002: Paul Introduces Legislation Requiring Congressional Approval of Treasury Gold Dealings
• 1998: World Financial Markets
• 1999: Paul named to vice-chairmanship
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• 1998: Monetary Policy

Rep. Paul will vote for impeachment hearings

October 8th, 1998

WASHINGTON, DC – The United States House of Representatives will later this week consider legislation opening a formal inquiry into impeachment of the President.

Rep. Paul said he will vote to begin impeachment hearings.

“I was an original cosponsor of legislation more than a year ago to begin the impeachment process based on credible evidence that the President violated the constitutionally-protected privacy rights of hundreds of Americans by illegally possessing and using confidential FBI files,” said Rep. Paul. “In addition, allegations that he traded away advanced, secret missile technology in exchange for campaign donations from the communist Chinese government are extremely troubling.”

While allegations of obstruction of justice and lying under oath are “serious and merit investigation,” Rep. Paul said he is most concerned by the allegations of the sale of defense secrets, and violations of people’s privacy rights.

The U.S. Constitution requires that Congress, and Congress alone, investigate allegations of wrong-doing by a sitting president. The Constitution states that a president may be impeached for treason, bribery or other “high crimes or misdemeanors.”

“Allegations of crimes against our Constitution – selling out our national defense and violations of privacy – are indeed serious and Congress has a solemn responsibility to investigate these matters fully and completely.” Added Rep. Paul, “This is a serious issue, and one I do not take lightly. I swore an Oath to uphold the Constitution and our laws, and so I will cast a vote in favor of beginning impeachment hearings.”

(30)

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• 1998: The Articles of Impeachment
• 1999: Paul says entire Cox Report must be examined
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Paul, Congress pass important Ag legislation

October 7th, 1998

WASHINGTON, DC – A measure to give American farmers and ranchers greater access to world markets easily passed the Congress late Monday night, with the strong support of US Rep. Ron Paul (R-Texas).

The measure is HR4647, which requires congressional approval before embargoes on agricultural exports can take effect. Under current law, the president is able to impose agricultural export embargoes without oversight or input from farmers and ranchers. Under HR4647, farmers – through their Representatives and Senators – would have a voice in whether or not those embargoes go into place.

“American farmers need to have more access to foreign markets, not less,” said Rep. Paul. “This is a small, first step in ensuring that American agricultural producers can compete in new markets.”

Rep. Paul said Congress needs to have oversight because often embargoes have been used as economic weapons which hurt not the leaders of countries being targeted, but rather the people in those countries as well as American farmers and ranchers. With congressional oversight, it becomes less likely that embargoes will be placed on US agricultural products because now the voices of farmers and ranchers will be heard on the issue.

“Free and open trade is our national heritage,” said Rep. Paul. “In my travels around the 14 ^th District, I’ve never once had a farmer come up and ask me to limit his access to a particular market. Instead, they want to be able to compete in the global market.”

Rep. Paul said he is going to continue fighting to see currently closed markets opened to American agricultural products. When presidents have closed markets to American farmers, it has often then served as an excuse for Congress to pay subsidies to farmers as a form of pay-back for limiting their right to sell.

“Farmers in the 14 ^th District tell me that they would much rather be allowed to compete in the marketplace than have the federal government offering string-attached cash and loans,” said Rep. Paul.

Posted in Press Releases | Comments Off

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• 1998: Paul praises Farm Bureau for pinpointing fault with trade policy
• 2002: Paul Works to Open Cuban Market to Texas Farmers
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• 1999: FARRM provides tax relief to ag community
• 2002: Paul Votes to Ease Trade Restrictions on Farm Sales to Cuba

During Debate on the Iraq Liberation Act of 1998

October 5th, 1998

Mr. GILMAN. Mr. Speaker, I move to suspend the rules and pass the bill (HR4655) to establish a program to support a transition to democracy in Iraq , as amended.

The SPEAKER pro tempore. Pursuant to the rule, the gentleman from New York (Mr. GILMAN) and the gentleman from Indiana (Mr. HAMILTON) each will control 20 minutes.

Mr. PAUL. Mr. Speaker, I would like to inquire whether or not either gentleman is opposed to the bill.

The SPEAKER pro tempore. Is the gentleman from Indiana opposed to the bill?

Mr. HAMILTON. I support the bill, Mr. Speaker.

Mr. PAUL. Mr. Speaker, I request the time in opposition.

The SPEAKER pro tempore. Under the rule, the gentleman from Texas (Mr. PAUL) will control 20 minutes in opposition and the gentleman from New York (Mr. GILMAN) will control 20 minutes in support of the bill.

The Chair recognizes the gentleman from New York (Mr. GILMAN).

GENERAL LEAVE

Mr. GILMAN. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks on this measure.

The SPEAKER pro tempore. Is there objection to the request of the gentleman from New York?

There was no objection.

Mr. GILMAN. Mr. Speaker, I yield myself such time as I may consume.

(Mr. GILMAN asked and was given permission to revise and extend his remarks.)

Mr. GILMAN. Mr. Speaker, I introduced HR4655, the Iraq Liberation Act of 1998, in late September in order to give our President additional tools with which to confront the continuing threat to international peace and security posed by Saddam Hussein.

For almost 8 years, since the end of Operation Desert Storm, we have waited for Saddam Hussein’s regime to live up to its international obligations. After dozens of U.N. Security Council resolutions and compromise after compromise, we have too little to show.

The dilemma of current U.S. policy is dramatically illustrated by the events we have witnessed this past year. In January and February, our Nation was on the verge of launching massive military strikes against Iraq in order to compel Saddam to afford U.N. weapons inspectors access to certain sites that he had declared off-limits. Our Nation stood down after U.N. Secretary-General Kofi Anan brokered a deal in which Saddam promised to behave better in the future. But, our leaders said, if Saddam violates his agreement with Kofi Anan, we will retaliate swiftly and massively.

After spending over $1 billion to build up U.S. forces in the Persian Gulf earlier this year, those additional forces were slowly drawn down and brought home. And then, of course, Saddam reneged on his commitments once again.

Today is the 61st day without U.N. weapons inspections in Iraq . The situation as regards weapons inspections is far worse today than it was back in January and February when our Nation was threatening military action.

One of the reasons our Nation did not undertake military action in February, and one of the reasons our leaders are not today delivering on their threats of swift and massive retaliation, is that the kind of military action they have in mind just might not work. Certainly we can inflict massive damage on Saddam with air strikes. But what if he simply absorbs the damage and continues to defy the U.N.?

As things stand today, we would have only three alternatives in such a situation. First, we could forge ahead with our air strikes, bouncing the rubble in Baghdad, but increasingly making it appear to the world that we are the aggressor, not Saddam. Second, we could mount a second invasion of Iraq by U.S. ground forces. Or, third, we could admit failure and give up.

Of course, none of these alternatives have been considered acceptable. And so today we find our Nation paralyzed by indecision. Saddam has never before been in such clear violation of his international obligations. Our government has never before been so obviously unwilling to do anything about it.

The purpose of the Iraq Liberation Act is to try to break this logjam. It creates a fourth alternative, an alternative that meets both our short-term and our longer-term requirements with regard to Iraq . In the short term, we need to be able to bring more effective pressure to bear on Saddam in order to force him to comply with his international obligations. In the longer term, we need to remove his regime from power.

Let there be no mistake about it. Saddam is the problem, and there will be no permanent solution as long as his regime remains. The Iraq Liberation Act gives the President tools that he should find useful in designing a comprehensive strategy to deal with Saddam both in the short term and over the longer term. The legislation does not require the President to equip a rebel army in Iraq , but it gives him all the authority he needs to do so. If he uses that authority, it will cost money, perhaps as much as $99 million that the bill authorizes, perhaps ultimately more, but whatever the cost, it will be far less than the $1.4 billion supplemental appropriation we provided this year alone for unbudgeted U.S. military operations against Saddam Hussein.

Since this bill was introduced, Mr. Speaker, we have been working with the administration to try to refine it in order to make it most useful to the President. At their suggestion we have incorporated a number of changes at our committee markup last week to improve the legislation, and as a result of our work with the administration I have been informed the administration does not oppose enactment of the bill.

With regard to one technical matter, I note that the criterion in Section 5 (c)(1) for designation of Iraqi opposition organizations is intended to ensure that only broad based organizations are designated. They may be broad based by having a broad spectrum of groups cooperating within one organization. In the case of organizations composed primarily of one ethnic sector such organizations may also be designated if they include a broad spectrum of individuals within the sector. In any event, I would expect the designation issue to be the subject of dialogue and accommodation between the Executive Branch and Congress as required by the notification provision contained in section 5(d).

Mr. Speaker, this bill will give our government additional tools with which to confront the threat to international peace and security posed by Saddam Hussein, and for this reason I believe it deserves the support of our Members. Accordingly, I urge our colleagues to vote in favor of HR4655.

Mr. Speaker, I reserve the balance of my time.

Mr. PAUL. Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, understand this legislation came before the committee on Friday, one legislative day prior to today. There has been no committee report filed, and it was brought up under suspension. And I believe this legislation is very serious legislation. It is not a casual piece of legislation condemning a leader in another country that is doing less than honorable things.

I see this piece of legislation as essentially being a declaration of virtual war. It is giving the President tremendous powers to pursue war efforts against a sovereign Nation. It should not be done casually. I think it is another example of a flawed foreign policy that we have followed for a good many decades.

For instance, at the beginning of this legislation it is cited as one of the reasons why we must do something. It says on September 22, 1980, Iraq invaded Iran starting an 8-year war in which Iraq employed chemical weapons against Iranian troops, very serious problems. We should condemn that. But the whole problem is we were Iraq ‘s ally at that time, giving him military assistance, giving him funds and giving him technology for chemical weapons.

So here we are now deciding that we have to virtually declare war against this individual. It is not like he is the only hoodlum out there. I could give my colleagues a list of 15 or 20. I do not like the leadership of China. Why do we not do something about China? I do not like the leadership of Sudan. But all of a sudden we have to decide what we are going to give this President to pursue getting rid of Saddam Hussein.

Just a few months ago, or last November, we passed a resolution, and the resolution was HR137. It sounded very general and very benign, and it talked about the atrocities caused by Saddam Hussein, and we asked to condemn and also to set up a U.N. commission to study this and give the U.N. authority to pursue arrests and convict and try Saddam Hussein. So this is not something we are doing for the interests of the United States. We are doing this under the interests of the United Nations, but we are the spokesperson for them.

Not too long ago, a few years back, in 1980s, in our efforts to bring peace and democracy to the world we assisted the freedom fighters of Afghanistan, and in our infinite wisdom we gave money, technology and training to Bin Laden, and now, this very year, we have declared that Bin Laden was responsible for the bombing in Africa. So what is our response, because we allow our President to pursue war too easily? What was the President’s response? Some even say that it might have been for other reasons than for national security reasons. So he goes off and bombs Afghanistan, and he goes off and bombs Sudan, and now the record shows that very likely the pharmaceutical plant in Sudan was precisely that, a pharmaceutical plant.

So I say we should stop and think for a minute before we pursue and give the President more authority to follow a policy that to me is quite dangerous. This to me is equivalent to declaring war and allowing the President to pursue this.

Another complaint listed on this legislation: in February 1988 Iraq forcibly relocated Kurdish civilians from their homes. Terrible thing to do, and they probably did; there is no doubt about it. But what did we do after the Persian Gulf war? We encouraged the Kurdish people to stand up and fight against Saddam Hussein, and they did, and we forgot about them, and they were killed by the tens of thousands. There is no reason for them to trust us. There is no reason for the Sudanese people to believe and trust in us, in what we do when we rain bombs on their country and they have done nothing to the United States. The people of Iraq certainly have not done anything to the United States, and we certainly can find leaders around the world that have not done equally bad things. I think we should stop and think about this.

Just today it was announced that the Turks are lined up on the Syrian border. What for? To go in there and kill the Kurds because they do not like the Kurds. I think that is terrible. But what are we doing about it? Who are the Turks? They are our allies, they are our friends. They get military assistance. The American people are paying the Turks to keep their military up. So we are responsible for that.

This policy makes no sense. Some day we have to think about the security of United States. We spend this money. We spent nearly $100 million bombing nobody and everybody for who knows what reason last week. At the same time our military forces are under trained and lack equipment, and we are wasting money all around the world trying to get more people, see how many people we can get to hate us. Some day we have to stop and say why are we pursuing this. Why do we not have a policy that says that we should, as a Congress, defend the United States, protect us, have a strong military, but not to police the world in this endless adventure of trying to be everything to everybody. We have been on both sides of every conflict since World War II. Even not too long ago they were talking about bombing in Kosovo. As a matter of fact, that is still a serious discussion. But a few months ago they said, well, we are not quite sure who the good guys are, maybe we ought to bomb both sides. It makes no sense. Why do we not become friends to both sides?

There are people around the world that we deal with that are equally repulsive to Saddam Hussein, and I believe very sincerely that the founders of this country were on the right track when they said stay out of entangling alliances. And we should trade with people; we would get along with them better. We have pursued this type of policy in Cuba for 40 years, and it has served Castro well. Why do we not go down and get rid of Castro? Where do we get this authority to kill a dictator? We do not have that authority, and to do it under one day of hearings, mark it up, bring it up the next day under suspension; I do not understand why anybody could vote for this just on the nature of it.

We should not be doing this. We should stop and think about it and try to figure out a much better way.

I, for instance, am on a bill to trade with Cuba. Oh, how horrible, we should not trade with Cuba, they are a bunch of Commies down there. But we should be selling them rice and we should be selling them our crops. We should not be bombing these people.

As my colleagues know, at the end of this bill I think we get a hint as to why we do not go to Rwanda for humanitarian reasons. Now there is some atrocities. Why do we not clean that mess up? Because I believe very sincerely that there is another element tied into this, and I think it has something to do with money, and I think it has something to do with oil. The oil interests need the oil in Iraq , and he does not, Saddam Hussein does not, comply with the people of the west. So he has to go.

But also at the end of this legislation it tells us something about what might be going on. It is they are asking to set up and check into the funds that Saddam Hussein owes to the west. Who is owed? They do not owe me any money. But I will bet my colleagues there is a lot of banks in New York who are owed a lot of money, and this is one of the goals, to set up and make sure Saddam Hussein pays his bills.

All I do is ask my colleagues to think about it, urge them to go slowly. Nothing is so pressing that we should give the President this much authority to go to war.

Under the appropriations it is endless, it is open, endless, and here we are concerned about saving Social Security. Any amount of money spent on this bill comes out of Social Security. Yes, there was yelling and screaming about a tax cut. Oh, it is coming out of Social Security. Well, this money is not appropriated, and it is such sums as necessary for military and economic benefits. After we get rid of one thug, we are going to have it in. I hope we make a better choice than we did with Bin Laden. I mean he was our close ally.

Please think twice, slow up, vote against this bill. We do not need this.

Mr. Speaker, I reserve the balance of my time.

Mr. GILMAN. Mr. Speaker, I yield 8 minutes to the gentleman from Indiana (Mr. HAMILTON), and I ask unanimous consent that he be permitted to control this time.

The SPEAKER pro tempore (Mr. MILLER of Florida). Is there objection to the request of the gentleman from New York?

There was no objection.

Mr. HAMILTON. Mr. Speaker, I thank the gentleman for this generous grant of time, and I yield myself such time as I may consume.

Mr. Speaker, I rise in support of the bill, but I do have some concerns about it. The bill appears to be simple. It authorizes U.S. assistance for Iraqi opposition to Saddam Hussein. There are very good intentions behind it. Almost all of us oppose Saddam Hussein, and we would like to see him out of power. We all want to support a viable Iraqi opposition.

Having said that, the bill does have some serious implications for United States efforts to retain the sanctions on Iraq and maintain strong international support for our policies toward Iraq .

My understanding is that U.S. policy toward Iraq since the Gulf War has been a policy of containment. We have pursued that policy now for over 2 administrations. That policy has been reasonably successful at a price that we are willing to pay. We have protected fundamental American national interests in the region, stability, the free flow of oil, the security of friends and allies. We have specifically rejected an invasion of Iraq to overthrow Saddam Hussein. Such an invasion would take several hundred thousand troops. There is no guarantee that we would get Saddam Hussein or that his successor would be any better.

Having rejected an invasion of Iraq , but still seeking to get rid of Saddam, we now come to this bill. The policy message that Congress sends with this bill is different than the stated policy of the United States.

This bill states that it should be the policy of the United States to seek to remove the regime headed by Saddam Hussein. What is striking about the bill is the United States, the most powerful nation in the world, would depend on third parties, not even third countries, to carry out its policy objectives.

Let me state several concerns about the bill even though I support the bill. First no one should underestimate the difficulties of uniting the Iraqi opposition. It includes some 70 groups and at least three or four major groups.

We have tried over many years to unite the Iraqi opposition, and it has not happened. There is, however, modest reason for encouragement. The two main Kurdish groups have a fragile agreement with each other, but they don’t want to work with Ahmed Chalabi.

We have aided some of these opposition leaders since the early 1970s. We have worked hard since 1991 to bring them together. Success has been limited. Any program for unifying the opposition and turning it into a viable alternative through the current Iraqi regime is a long-term proposition.

Second, I am concerned about creating false expectations. Iraqi opposition leaders may misinterpret this bill as an open-ended U.S. commitment to their cause.

When the Kurdish leaders were in town last week, they talked about security assurances from the United States. It is apparent from their comments that they expect very substantial support from the United States, including air power.

We have to spell out very carefully and in writing what the United States is prepared and not prepared to do. On at least three occasions, Iraqi opposition leaders felt that the United States broke its commitments, and we should not contribute to false expectations again.

Third, there is a wide gap here between means and objectives in this bill. When we declare that our policy is to remove Saddam Hussein from power, we raise the objectives of our policy very high. Yet we provide modest means to achieve what has proven to be a very difficult objective. When you have a gap between goals and means, that often leads to trouble in the conduct of American foreign policy.

Fourth, I wonder whether the bill is at all workable, whether it is possible for the administration to implement a program of military assistance. For example, can we identify any country that is prepared to accept military equipment in the presence of armed Iraqi opposition groups on its territory? I am not able to do that as of now.

Finally, the bill could harm the ability of the United States to keep U.N. sanctions in place against Iraq . If it becomes the public policy of the United States to remove Saddam Hussein, as this bill seeks to do, then there will be less unity in confronting Baghdad, more criticism of the United States, and probably more difficulty in getting support for sanctions and for U.N. weapons inspections among Arab States and among Security Council members.

Under present circumstances, it is hard to name one Arab country or one Security Council member that would support a U.S. program to remove Saddam Hussein from power.

I understand that some Members question how well the sanctions are working, but we should not throw out one of the key elements of our strategy.

No Member should think that by supporting this bill, we are strengthening sanctions against Iraq . We risk the opposite.

To conclude, this is a very serious piece of legislation the committee has produced. I will not oppose the bill, because I, like most of us, feel the opposition should be supported, and Iraq and the world would be better off without Saddam Hussein.

But we should have a clear idea of what we are doing. We are making a down payment on support for the opposition. We should have no illusions about the bill.

Uniting the opposition will take a long time. The bill could create false expectations. There is a wide gap between means and objectives in this bill. There is plenty of doubt whether the bill is workable. The bill does risk the weakening of sanctions against Iraq .

Let us be very clear about what the bill does and does not do. The bill states the sense of Congress. It does not change U.S. policy. The bill does not compel the provision of military assistance to Iraqi opposition groups. The bill leaves the administration flexibility in carrying out U.S. policy toward Iraqi opposition groups. I understand that the administration does not oppose the bill.

So despite some of my concerns, I support the bill. As the legislative process moves along, I hope improvements can be made in the bill.

Mr. PAUL. Mr. Speaker, how much time do I have remaining?

The SPEAKER pro tempore (Mr. MILLER of Florida). The gentleman from Texas (Mr. PAUL) has 10 minutes remaining. The gentleman from New York (Mr. GILMAN) has 6-1/2- minutes remaining. The gentleman from Indiana (Mr. HAMILTON) has 2 minutes remaining.

Mr. PAUL. Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, the gentleman from Indiana makes some very good points indicating that he is not convinced that this is workable. So back to the practicality of the bill. Even though one might argue there is a lot of good intentions here, even a Member that is supporting the bill is very uncertain whether it is workable.

In some ways, even if it is workable, it is going to be working against us and working against the United States and working against the taxpayers of this country.

But I would also like to challenge the statement that this does not change policy, because on section 3, it says it should be the policy of the United States to seek to remove the regime headed by Saddam Hussein from power in Iraq and promote the emergence of a democratic government to replace that regime.

That sounds pretty clear to me. As a matter of fact, I think it sounds so clear that it contradicts U.S. law. How do you remove somebody without killing them? Is it just because we do not use our own CIA to bump them off that we are not morally and legally responsible? We will be.

So we are talking about killing Saddam Hussein, a ruthless dictator. But how many ruthless dictators do we have? We have plenty. So how many more should we go after?

So the real question is, why at this particular time, why would we give our President more authority to wage war? He has way too much authority already if the President can drop bombs when he pleases. This of course has occurred not only in this administration but in the administrations of the 1980s as well where bombs were dropped to make some points. But generally speaking, the points are not well made. They usually come back to haunt us.

This is more or less what has happened. This is part of a policy that we have been following for quite a few decades. Yet, the problems continue to emerge.

We can hardly be sympathetic to the Kurds who are being punished by the Iraqis at the same time we are paying the Turks to do the same thing to the Kurds. So there is something awful inconsistent about this.

There is nothing wrong with a policy of trying to maintain friendship with people, trying to trade with people and influence them that way rather than saying, if you do not do exactly as we tell you, we are going to bomb you.

This is a policy we have been following for way too long. It costs a lot of money. It costs a lot of respect for law because, technically, it is not legal. Waging war should only occur when the Congress and the people decide this. But to casually give more and more authority to the President to do this and encourage him to bump off dictators is a dangerous precedent to set.

I think there is no doubt in my mind what is best for the United States. We should not pass this resolution. If there need to be more efforts made, do it some other way. But, obviously, this is not a good way to do it. It is sacrificing the principle of law. It is sacrificing the Constitution. It is sacrificing the practicalities of even the people who are supporting it are not quite sure it is going to work.

So I would say give serious consideration to not supporting this bill. We need a “no” vote on this.

Mr. Speaker, I reserve the balance of my time.

Mr. GILMAN. Mr. Speaker, I am pleased to yield 5 minutes to the gentleman from California (Mr. ROHRABACHER) a member of our committee.

Mr. ROHRABACHER. Mr. Speaker, I rise in strong support of HR4655, and I would like to applaud the gentleman from New York (Mr. GILMAN), chairman of the committee, and the gentleman from California (Mr. COX) for what I consider to be a well thought out, both philosophically and practically, plan that will get our country out of a situation in which we are now in jeopardy unless we do something.

The only thing coming back to haunt us now is that, when the Gulf War was going on, we did not dispatch Saddam Hussein from this planet. We did not finish the job. We should not have gotten involved in that war unless we intended to finish it. Unfortunately, we did not do so, and now we will live with that decision not to finish that job.

There is a symmetry to the affairs of State. There can be no peace without freedom, and there can be no prosperity without peace. Our failure in the Gulf War was in not supporting those who oppose Saddam Hussein’s tyranny and not to finish the job on Saddam Hussein himself back when we had the power to determine the course of events in the Persian Gulf.

Our willingness not to finish the job, our unwillingness, I should say, to finish the job and to stand for our ideals, which are to support those elements in their area who believed in freedom or at least some degree of freedom and were not aggressing upon their neighbors, were opposed to aggression, that is the decision that haunts us today.

Saddam Hussein now has a blood feud with us, and he will murder if we give him the opportunity to do so with weapons of mass destruction. He will murder millions of Americans. So like it or not, America’s safety is now tied to events in Iraq and in the Persian Gulf. We cannot turn our backs on that region, or we will risk the death of millions of Americans, not to speak of just those people in the Persian Gulf itself.

But it is not too late to get ourselves out of this dilemma by supporting the people in the region and in Iraq itself who oppose Saddam Hussein’s aggression and his dictatorship.

This resolution is exactly the right formula, and we should have used it long ago. If we would have used it while we were there in the Gulf during the Gulf War, we would not have the problems and the threat to our well-being that we face today.

Support democracy. Oppose tyranny. Oppose aggression and repression. That is what America’s policy should be based on. We should strengthen the victims so they can defend themselves. These things are totally consistent with America’s philosophy, and it is a pragmatic approach as well.

Furthermore, this resolution calls to hold Saddam Hussein himself accountable. The man is a murderer. The man has murdered large numbers of his own people. The man has invaded his neighbors. It is the dictatorship in Iraq , not the people of Iraq , who are the enemies of the United States and threaten our well-being.

That is what this resolution is all about. It is not a declaration of war. It is a declaration that we are on the side of the Iraqi people and the other people of that region who believe in freedom to some degree, whatever degree that is, more than what they have today, and oppose aggression.

Let us stand up and stand by our ideals, because we did not do that before, and we left the practical planners to say do not eliminate Saddam Hussein, and now we face this threat.

Our support for the Mujahedin collapsed the Soviet Union. Yes, there was a price to pay, because after the Soviet Union collapsed, we walked away, and we did not support those elements in the Mujahedin who were somewhat in favor of the freedom and western values.

With those people who oppose this effort of pro democracy foreign policy, a pro freedom foreign policy rather than isolation foreign policy, they would have had us stay out of that war in Afghanistan. They would never have had us confronting Soviet aggression in different parts of the world.

Would the world be a better place today? No. But our problem, again, was not in supporting the Mujahedin, not supporting those people who oppose Soviet tyranny, but our failure was not supporting those people who believed in democracy and following through with them to see that the pro freedom elements were supported.

That is what this resolution is all about, making sure that we support those people in that region, in the Gulf region, and in Iraq itself who are our natural allies. Let us hold Saddam Hussein accountable rather than putting ourselves in a place where we let the situation go to such a degree that we end up having to kill hundreds of thousands of people in the regions, Iraqis who are not even our enemies.

So let us support those people in Iraq who are our friends and in the region who are our friends, and let us push for democracy.

Even in Kuwait today, we can be proud that there has been some democratic reform as compared to what the system was before when we were there. So I stand in support of this resolution.

Mr. PAUL. Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, the gentleman from California makes a very good point, that sometimes we get involved in these battles and we never fight to complete victory. He argues the case for pursuing it and always winning and take out the dictator that we are opposing.

There is some merit to that argument, but there is also a very good reason why that does not happen and will not happen. It is because when we fight a war for non-national security reasons, when it is limited to protecting oil or some other interest, then there is a limitation, there is no wanting to expand it.

When we fight a war for national security reasons, we declare the war, the people join, they are willing to support it financially, they volunteer to go into the military, and they fight to win. But we have not done that since World War II, precisely because we have this namby-pamby foreign policy of being everything to everybody and we do not even defend our national security adequately enough.

The gentleman from California makes a good point also. He is concerned that somebody like Saddam Hussein may attack us with weapons of mass destruction. He is precisely right. I am concerned about that too. But I would say that our exposure is about 100 times greater because of our policy. Why is it that the terrorists want to go after Americans? Because we are always dropping bombs on people and telling people what to do; because we are the policemen. We pretend to be the arbitrator of every argument in the world, even those that have existed for 1,000 years. It is a failed, flawed policy.

So I would say I have exactly the same concerns, but I think the policy that we follow has generated this problem, and it will continue.

Mr. Speaker, let me just close by talking a little bit about this authorization. It says, there are to be authorized appropriations, such sums as may be necessary to reimburse the applicable appropriation funds. This is what the money is to go for: Defense articles, defense services, military education, and training. Sounds like getting ready for the Bay of Pigs. That is exactly what we did. And then we backed off, we were not doing it for the right reason, and of course we have solidified for 40 years the dictatorship in Cuba.

So do my colleagues think our policy over the last 10 years has actually helped to weaken Saddam Hussein? Every time he comes out of it stronger. And then those who say, “Well, we should march in,” we should all question. Those of us here in the Congress who are so anxious to take out this dictator, they should be willing to march themselves, or send their children and send their grandchildren. Is it worth that? No, no, we would not want to do that, we have to keep our troops safe, safe from harm, but we will just pay somebody to do it. We will pay somebody to do it and we will make wild promises. Promise the Kurds something. They will take care of Saddam Hussein. And sure enough, the promises never come through.

Mr. ROHRABACHER. Mr. Speaker, will the gentleman yield?

Mr. PAUL. I yield to the gentleman from California.

Mr. ROHRABACHER. Mr. Speaker, the gentleman does not think it is proper for us to offer those people who are struggling for freedoms in Iraq against their dictatorship a helping hand?

Mr. PAUL. Mr. Speaker, reclaiming my time, I think it would be absolutely proper to do that, as long as it came out of the gentleman’s wallet and we did not extract it from somebody in this country, a taxpayer at the point of a gun and say, look, bin Laden is a great guy. I want more of your money.

That is what we did in the 1980s. That is what the Congress did. They went to the taxpayers, they put a gun to their head, and said, you pay up, because we think bin Laden is a freedom fighter.

Mr. ROHRABACHER. Well, if the gentleman will further yield, it was just not handled correctly.

Mr. PAUL. Mr. Speaker, again reclaiming my time, the policy is flawed. The policy is flawed.

I think the conclusions we have today are logical. I do not think they lack logic. I think that if one decides that we are fighting for our national security reasons, we never stop short of victory. So this would go along with the gentleman’s argument that we stopped too soon in Iraq. But we were not there for national security reasons. They were not about to invade us, and they are not about to invade us. The only way we should fear an invasion by these hoodlums is if we incite them to terrorism.

We should consider this a very serious piece of legislation. This is a vote for virtual war and giving more power to the President. It has an open-ended appropriation, and if we spend one nickel on it, we are going to take it out of Social Security, the way the budget works around here.

Mr. Speaker, I yield back the balance of my time.

Mr. GILMAN. Mr. Speaker, I yield such time as he may consume to the gentleman from Indiana (Mr. HAMILTON).

Mr. HAMILTON. Mr. Speaker, I have 2 minutes remaining under my time as yielded by the chairman.

Let me just make this observation, if I may. I think the gentleman from Texas questioned my statement a moment ago in which I said that the bill states the sense of Congress, it does not change U.S. policy. I believe my statement is correct for a couple of reasons. The language in the bill is only sense of Congress language. It does not say what the policy is; it says what the policy should be.

More importantly, perhaps, is that we in this body cannot set policy without the approval of the executive branch. The President is the chief foreign policymaker, of course, and it is my understanding that the policy of the United States Government is and will remain, after passage of this resolution, a policy of containment.

Mr. Speaker, I yield back the balance of my time.

Mr. GILMAN. Mr. Speaker, I yield myself such time as I may consume.

In closing this debate I want to respond to a few of the points that have been made by other speakers. First, the bill does not make an open-ended financial commitment. It does not authorize an unlimited expenditure of funds; it authorizes such sums as may be necessary, subject to a cap of $97 million.

On the contrary, the purpose of the bill is to save money. We had to pass a $1.4 billion supplemental appropriation earlier this year to pay for U.S. military deployments to confront Saddam Hussein. We are going to have to spend that kind of money over and over again, unless we try something new, because today Saddam is far from complying with his international commitments than he was 9 months ago.

Second, this bill does not force the President to do anything that he might deem unwise. Rather, it gives him additional options for defending our national interests in the Persian Gulf region. Accordingly, I urge support for this measure and I urge my colleagues to vote “yes” on HR4655.

Mr. Speaker, I yield back the balance of my time.

The SPEAKER pro tempore (Mr. MILLER of Florida). The question is on the motion offered by the gentleman from New York (Mr. GILMAN) that the House suspend the rules and pass the bill, HR4655, as amended.

The question was taken.

Mr. PAUL. Mr. Speaker, on that I demand the yeas and nays.

The yeas and nays were ordered.

The SPEAKER pro tempore. Pursuant to clause 5 of rule I, and the Chair’s prior announcement, further proceedings on this motion will be postponed.

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Hedge Fund Bailout

October 2nd, 1998

Mr. PAUL. Mr. Speaker, the Federal Reserve orchestrated bailout of the hedge fund Long-Term Capital Management LP raises serious policy questions. At one point, the notional value of the Cayman Island-registered fund’s derivatives totalled about $1.2 trillion. We should look seriously at this issue because of the taxpayer-backed liability concerns raised by the involvement of an agency with the full faith and credit of the U.S. government. The state of Michigan has taken a constructive first step regarding the public policy concerns of derivatives. I urge us to consider the wisdom of the State Representative Greg Kaza as we debate this issue.

STATEMENT OF HON. GREG KAZA, MICHIGAN STATE REPRESENTATIVE, ADJUNCT PROFESSOR OF FINANCE, WALSH COLLEGE

Derivatives are financial instruments broadly defined as any contract or convertible security that changes in value in concert with a related or underlying security, fixed-income instrument, future or other instrument, currency or index; or that obtains much of its value from price movements in a related or underlying instrument; or an option, swap, warrant, or debt instrument with one or more options embedded in or attached to it, the value of which contract or security is determined in whole or in part by the price of one or more underlying instruments or markets.

Although derivatives are a relatively recent development in financial markets, their use by corporations, pension and mutual funds, financial institutions, governments and those involved in money management are clearly ascendant, according to the Federal Reserve and other federal agencies. The issue is not whether the government should ban or in some way restrict the prudent use of derivatives to hedge risk. Rather, the issue is one of disclosure, i.e., how best to provide increased transparency as our complex international financial system enters the 21st Century.

Three years ago I addressed the very same issue in Michigan by authoring state legislation that provided increased transparency by requiring units of government to disclose their derivative holdings to the public. Government units have to make investment decisions regarding the money they receive or retain; unfortunately, investment practices and decisions can sometimes lead to significant losses when taxdollars are unwisely invested in derivatives. Orange County in California and Independence Township in Oakland County, Michigan are both examples of government units that experienced significant losses as a result of the imprudent use of derivatives.

Initially, some of my colleagues wondered whether a ban or restriction on the use of derivatives would be preferable. But committee testimony soon convinced them that derivatives, although complex, are used by many institutions, including government pension funds, to prudently hedge risk. Our five-bill package required public disclosure of derivative holdings by government units. The legislation garnered bi-partisan sponsorship and support, and ultimately became state law.

A related issue that we discussed privately at the time was whether the potential for moral hazard created by federal deposit insurance means private financial institutions should be required to disclose their derivative holdings in the interest of transparency. You are now likely to contemplate this issue yourselves given events surrounding the hedge fund in question, Long-Term Capital Management; and the potential for systemic risk posed by any future episode that might involve the imprudent use of derivatives and excessive amounts of leverage.

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