gingrich on imf

[Robert Weissman <rob@essential.org>]

APPOINTMENT OF CONFEREES ON H.R. 3579, 1998 EMERGENCY SUPPLEMENTAL 
APPROPRIATIONS ACT (House of Representatives - April 23, 1998)

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Mr. GINGRICH. Mr. Speaker, I thank very much my friend, the gentleman from 
Louisiana, for yielding time to me.

Mr. Speaker, let me say that I rise first to point out that the bill which 
we are actually going to conference on is, in fact, an important, urgent 
bill. In my State, for example, where we have had significant tornado 
damage, and my friends from Alabama, who can report on their tornado damage, 
Tennessee, other places around the country, where there are real problems, 
we are trying to get the aid to the Federal Emergency Management 
Administration. That is urgent.

The Secretary of Defense has indicated if we do not get this bill finished 
and to the President before May 1, that he will have to begin to initiate 
laying off personnel, laying off contracts, cutting off training. That is 
urgent. So this is an important supplemental bill that is urgent.

The Committee on Appropriations reported out a second bill, a bill which is 
not quite on as fast a track, but which will in fact be considered by the 
House. But I cannot help but draw to the House's attention who has been 
lecturing us today on international trade: Members who voted against NAFTA, 
Members who were prepared to vote against fast track, Members who have made 
a career out of protectionism, Members who are dedicated to not being part 
of the world market.

They now get up to lecture us, those of us who voted for NAFTA, those of us 
who supported fast track, those of us who actually believe in the world 
market, and we are to be told, rush this thing through; make sure that you 
get $24 billion or $18 billion down to the International Monetary Fund, or 
whatever number the Secretary of the Treasury sends up. Do not look at it. 
Do not ask questions about it. Do not explore it. Send the money. Because 
after all, it is only money.

Now, I believe we have an obligation to the people of America to look 
critically at the International Monetary Fund. Former Secretary of the 
Treasury Bill Simon has said, abolish it, it is obsolete. He happens to be a 
man who has made a great deal of money in international trade. But ignore 
him for a moment.

Former Secretary of State, former Secretary of the Treasury, former 
Secretary of Commerce, former Secretary of Labor, this is all the same 
person, George Schultz at Stanford University, one of the most respected 
international figures in American government history, has said, abolish it, 
it is obsolete, it no longer serves a function. When Bretton Woods died, it 
died. It is a large, expensive bureaucracy finding a new excuse to mess 
things up.

But we are not suggesting that we abolish it. We are suggesting we ask some 
questions. For example, the International Monetary Fund is consistently 
wrong. There is a very significant report that says it is the IMF which 
caused the bank crisis in Indonesia. There is a significant study which says 
it is the IMF which caused Thailand first to quit fixing its money, then to 
float its money, and then to suffer from an economic disaster. We know from 
Latin America it is routine for the International Monetary Fund to go in and 
say, raise taxes; take care of the international banks, but raise taxes.

Let us talk about the crisis in banking. Two major U.S. banks reported 
yesterday that they had had record profits. None of the big banks are 
suffering out of Indonesia. They have made their money. They are not 
suffering out of South Korea. But what does the International Monetary Fund 
answer? Raise taxes on the working poor.

I hear people come to this floor who claim they represent the workers, who 
say they are for an international bank institution that is totally secret, 
that is run by a bureaucrat whose major policy is to raise taxes on workers 
in the Third World to pay off New York banks.. That does not sound like 
populism to me.

But let me go a step further. We were told at Thanksgiving, I got the phone 
calls, big crisis in Asia, everything is going to collapse by Christmas. We 
were told at Christmas, big crisis in Asia, everything is going to collapse 
by mid January. We were told in January, big crisis, might even lead to a 
war in Korea. We were told in February, big crisis, could be bad by March.

But do Members know what we were told, over and over? Japan is not the 
problem, because all of Japan's debt is denominated in yen, and the Japanese 
can cope with it, and they have $270 billion in reserve. Do Members know 
what the statement was this week? We have to have this money for Japan; 
which is, by the way, intellectually nonsense, because the IMF does not have 
enough money to deal with Japan.

So what is really at stake here? We believe, on behalf of the taxpayers, 
that we have the right as the Congress to ask some very tough questions of a 
multi-billion dollar bureaucratic institution that is totally secret.

I will start with question number one: If they think tax increases are so 
good, how come no staff member of the IMF pays any taxes anywhere in the 
world? They do not pay taxes in the U.S., and they do not pay taxes in their 
home country. So the French leader of the IMF pays no taxes in socialist 
France while advocating tax increases. Maybe if the IMF staff paid taxes, 
they would not be as excited about tax increases.

Let me give just one quick example of how out of touch with reality the IMF 
is. This is their annual report for 1997 in which they recommend that we not 
have tax cuts because they are worried that the budget will not be balanced. 
This is their annual report leading into this year.

Now, we are the most transparent Nation in the world. There is more 
information available about us than any other country. We are going to have 
a surplus this year of somewhere between $18 billion, the inaccurate low and 
defensive Congressional Budget Office number, because they are like the IMF, 
they are bureaucrats, and the free market estimate of $50 to $80 billion.

If the IMF is wrong about the surplus of the United States of America, when 
it is headquartered in Washington, could it be possible that their 
bureaucrats do not have a clue about how the modern, instantaneous real-time 
worldwide money markets work, and could it be possible that their advice is 
consistently wrong?

They said as late as July 28, 1997, that, `Many directors also indicated 
that a faster pace of fiscal consolidation by bringing forward spending cuts 
and delaying tax cuts than that envisioned in the balanced budget agreement 
would help to contain demand pressures and enhance the plan's credibility, 
as well as increase the latitude for countercyclical fiscal policy.'

What does that mean? It means as late as July last year, when we were 
bringing the budget agreement to the floor, they were against tax cuts, they 
were for deeper spending cuts. They did not have a clue about the politics 
of the country their headquarters is in, and their policy was exactly 
backwards.

It was a big tax increase, big government, socialized policy.

So here is my proposition. We have several hearings coming up. The Joint 
Economic Committee under Chairman Saxton will be holding hearings. Former 
Secretary George Schultz has agreed to come and testify. Others will be 
asked to testify. I am certain our friends on the left who would like to 
have more taxes and bigger bureaucracy will have a chance to come and 
testify.

When we have finished the hearings and we are prepared to have appropriate 
requirements to get transparency and accountability out of the International 
Monetary Fund, we will bring an appropriate bill to the floor this year in 
the appropriate way.

But for my friends who are protectionists, who opposed NAFTA and who opposed 
Fast Track, to come to the floor and lecture the rest of us on the world 
market and demand that we move in ignorance now, before we can learn 
anything, I think is highly inappropriate.

I hope every Member will vote this down on behalf of defending the American 
taxpayer, so we can get an effective IMF program that in fact truly helps 
American agriculture and truly helps American exporters.