ON THE BUDGET (House of Representatives - April 24, 1996)

[Page: H3810]

The SPEAKER pro tempore (Mr. Lucas of Oklahoma). Under the Speaker's announced policy of May 12, 1995, the gentleman from New York [Mr. Owens] is recognized for 60 minutes as the designee of the minority leader.

Mr. OWENS. Mr. Speaker, I am sorry that the gentlemen of the Budget and the Appropriations Committees ended so abruptly. I was about to ask a few questions and have them address those questions. They are still in the Chamber so I will go ahead and ask the questions. Maybe they will give me the answers later.

In the process of revamping the budget, do they realize that--they realize above all that money comes into Washington and then flows out. Why does Louisiana get so much more money from the Federal Government than it pays into the Federal Government? The gentleman who heads the Committee on Appropriations is from the State of Louisiana, and Louisiana gets $6.4 billion more from the Federal Government than it pays into the Federal Government.

You can downgrade Washington and talk about Washington spending money, but Washington does not spend money in Washington. The Federal Government is merely a transit, an exchange. They pull in the money and they appropriate it out as it is needed for various functions, and it flows into the States across the union. There have been studies done that I have quoted here on this floor on several occasions about how much each State pays into the Federal Government and how much each State gets back.

Among the high roller States, the States that get more back from the Federal Government than they pay into the Federal Government, is Louisiana. Louisiana gets $6.4 billion more from the Federal Government. These are the 1994 figures, the only year the complete figures are available for. And these figures come from a study done by the Kennedy School of Government, a very thorough study which looks at all of the Federal expenditures for military installations, the salaries of servicemen, the various military related functions that are carried out by the States, as well as programs like food stamps and Medicaid. It is all totaled up.

Louisana is a big gainer. After this great revamping of the budget and revamping of the appropriations process, where they have saved so much money, will Louisiana be paying more of its fair share. Will Louisiana shoulder its own burden? New York, on the other hand, my State, pays $18.9 billion more into the Federal Government than it gets back from the Government. New York, New York.

I heard Mr. Kasich, the head of the Committee on the Budget, say that we do not need Government telling us what to do. Our neighborhoods should decide; our neighborhoods should be left alone. The neighborhoods of New York would like to have that $18.9 billion back and we could divide it up and take care of our own problems, but we are paying it into the Federal Government and not getting back an equal value.

In fact, we are the State of the Union at the very top of the list of the States that pay more than they get back. California is the largest State in the union. But whereas New York, in 1994, paid $18.9 billion into the Federal Government more than it got back, California only paid $2 billion more to the Federal Government than it got back.

California has had earthquakes and mud slides and large amounts of Federal money have gone to California in order to relieve those problems, but over the past 4 or 5 years, California has steadily paid less into the Federal Government than New York, although California is the largest State.

Mr. Kasich comes from Ohio, and Mr. Shays, who joined them at the last minute, he is from Connecticut. Ohio and Connecticut, like New York, are donor States. We pay more into the Federal Government than we get back from the Federal Government.

My great question is, after all of these changes are made, after they have cut the school lunch programs, after they have downsized and cut the housing programs, after they have gone after the Medicaid program, the Aid to Families with Dependent Children program, after food stamps have been cut, after they have made all these cuts of relatively small programs, they have not cut defense very much.

In fact, these same gentlemen who stood here before us and talked about a revolution in the budget and appropriations making process did not cut defense. They increased defense by $6 billion. At a time when the Soviet Union no longer exists and the threat to America is less than ever before, we have an increase of $6 billion.

The President did not want 46 billion more for defense. The President did not want a B-2 bomber. The President did not want extra money for certain kinds of programs that were beneficial to members of the Committee on Appropriations and members of the Committee on the Budget for their States.

We have a lot of waste in the defense budget, and these gentleman did not attack that at all. So I think it is very important to what I have to say today to recognize the fact that there is an America, this is a particular era in America where we have 2 basic approaches being taken, maybe 2 mentalities being shown. One is a big shot mentality which says that the rich and powerful can do no wrong, the rich and powerful should be allowed to waste money on a wholesale basis, because when you increase the defense budget by $6 billion, it is already above $200 billion, what are you doing? You are increasing the amount of money available to go into the payment for manufactured weapons and for supplies and for various items that are bought from huge corporations. And the corporations are owned by people who have stock on Wall Street. So you are feeding the richest people in America. They have their hooks into the defense, the military industrial complex.

So every dollar that goes for defense is a dollar you know is going to help rich people get richer, to help powerful people get more powerful, because there is a relationship between dollars and power. Those programs are not being cut, only the programs for the people at the very bottom.

There was a hearing today in the Committee on Economic and Educational Opportunities, a markup at the subcommittee level dealing with a program for people with disabilities, the IDEA, Individuals with Disabilities Education Act. This is providing education for children in America who have probably the greatest needs. Extra money has to be spent to educate these children because of the fact that they have great needs. They have problems, learning disabilities, physical disabilities. And the amount of money that the Federal Government contributes to this program is very small. It is 7 percent of the total. States and local governments contribute more, most of the money.

Nevertheless, the committee is chipping away at the small amount of money being spend on children with disabilities all across America. They are chipping away at the programs. A great deal of time and energy has gone into nitpicking about this costs too much for attorney's fees, it costs too much to run a parents program where the parents have an opportunity to get educated about what the program is all about and they can, they are empowered to work with the schools in order to get a better education for their children, all these things suddenly cost too much.

These are programs for little people. These are programs for ordinary Americans, we the people. We the people do not seem to count very much. We the people are always the object of intense scrutiny. The microscope of the Committee on Appropriations, the microscope of the Committee on the Budget is focused on these little programs that have very small amounts of money, and they are trimming away at these little programs in order to save America from going bankrupt.

[Page: H3811]

[TIME: 2115]

It is rank hypocrisy, rank hypocrisy. These same committees, the great Committee on Appropriations, the great Committee on the Budget, are not concerned at all about facts that are introduced by other entities. You know we do not find out here in Congress; other people have to tell us.

The General Accounting Office tells us the CIA has $2 billion, at least, in money that it did not spend over the years and it had lying around in the petty cash fund. The CIA has that kind of money lying around.

An audit revealed that they had $2 billion, $2 billion that the director of the CIA did not know about, $2 billion that the President did not know about.

Two billion dollars is a lot of money; ask these gentleman here. You know, $2 billion, we can stop the cuts in the school lunch programs with $2 billion for more than a year. Two billion dollars would mean that we could fund the title I programs for schools, provide money, the only money we provide, to elementary secondary education school, education. I mean most of the money comes out of the title I program. A $7 billion program, and they were proposing earlier in the year to cut it by $1.1 billion.

But $2 billion for the CIA could have ended that cut for 2 years. They were going to cut it by $1.1 billion per year. So that meant that in 2 years it would have been $2.2 billion. Take the money that the CIA has laying around, waste it, and you could end the cut, most of the cut, on title I.

The Federal Reserve Board, another big-shot agency, an agency where big shots, the rich and the powerful, run the agency. The rich and the powerful have money lying around to the tune of $3.7 billion. The General Accounting Office found that the Federal Reserve has $3.7 billion lying around that it has not used. They call it their Rainy Day Fund.

In 79 years, in the last 79 years, the Federal Reserve has never needed to use that Rainy Day Fund. They have never had any losses, never had any crisis or problems in 79 years. So why do they need to have $3.7 billion lying around? How much interests would you get on $3.7 billion to offset the payments on the deficit? If that $3.7 billion had been given to the Treasury, where it belongs, we would not have a situation where you pay interest on $3.7 billion worth of debt. You would have that much less to pay.

Combine the $3.7 billion in the Federal Reserve slush fund with the $2 billion in the CIA slush fund, and they have large amounts of money that could be appropriated for education.

Gentleman stood there and they talked about how proud they were that they made cuts in the education program. They were not just talking about cuts. But one of them said we want the parents of America to know that we have stopped the Federal Government from telling them what to do by cutting out the Goals 2000 program.

Well, there are several things wrong with that statement. The gentleman is assuming that the Committee on Appropriations and the Committee on the Budget have all knowledge. The Committee on Economic and Educational Opportunities, of course, authorized the legislation which contains Goals 2000. The Committee on Economic and Educational Opportunities authorized the legislation which contains Opportunity To Learn standards.

I serve on the Education Committee. I know the process. We debated for 6 months the Opportunity To Learn standards. We debated for 3 months the Goals 2000 general program. We debated for another 2 months with the Senate. And the back and forth in the Senate conference and the House conference went on for 2 months on the Opportunity To Learn standards alone.

With all this deliberation and all of this marshaling of facts, hearing testimony that the authorizing committees went through in the Senate and the House, along come the lords of the appropriation committee, and they are in the appropriation process going to tell us it is no good. They have all the knowledge, they have all the wisdom, it is no good. The implication is that we should just abolish all of the other committees of Congress. You know, we do not need a Committee on Economic and Educational Opportunities. We do not need that. We do not need other committees if the Committee on Appropriations, after its large-scale deliberation on numerous topics and numerous programs, is going to come to the conclusion that they can wipe out a program in the appropriations process.

We all know that that is against the rules. We all know that the Committee on Appropriations has no authority to wipe out a program like Goals 2000, like Opportunity To Learn standards, and yet we have seen again and again on the floor of the House when we challenge the Appropriations Committee, we say you have violated the rules. They said, yes, we violated the rules; you do not like it, appeal to the Chair. And, of course, they have the numbers to vote down every appeal of the ruling of the Chair.

You know, every attempt to get the Chair to enforce the rules is frustrated by the fact that they have the numbers and they use those numbers. You know if we were in another arena, it would be illegal to use the numbers to do illegal things. Of course, the House rules are the House rules. You violate the House rules, and there is no punishment. We cannot put a committee in the little jail cells we have down in the Capitol. In this Capitol we still have from the old days, had some jail cells that they used to keep to put rowdy staff members and Congressmen. We do not use that any more. So when the Committee on Appropriations violates the rules, there is no enforcement mechanism, and the majority vote can always back up the Committee on Appropriations.

So what we are talking about tonight is America, does America exist for the rich and the powerful only, is there an America where we the people are still in charge, is there an America where we the people matter?

We the people have a little program helping children with disabilities. You know, does it cost $2 billion? No, it does not even cost $200 million. Tiny program, helping children with disabilities, a program that was supposed to deal with rural communities where children with disabilities were totally out of touch with the program, urban communities where poor people were out of touch and they were not being served, they were not participating. That tiny program was singled out today in the process of the markup of the subcommittee and wiped out, does not exist any more if that markup goes through.

They also cut other provisions.

They also implied that the commitment of the Federal Government for children with disabilities is too great. You know, in this great, rich country where we can afford to have a Federal Reserve keep a slush fund of $3.7 billion an the CIA have $2 billion lying around, we cannot afford to take care of the needs of children with serious disabilities.

Is America for the rich and powerful only? Are we a Nation of big shots versus ordinary, everyday people where the big shots walk away with everything, nothing is too good for them, anything is too much for ordinary people?

That is the way the Republican majority in this Congress has proceeded. The omnibus bill that they are bragging about and crowing about is a bill which has gone after little people, a bill that is focused on the small programs.

They also implied the big shots can never waste too much, big shots should never be chastised. They do not make speeches about the Federal Reserve Board having $3.7 billion lying around. They do not make speeches about the CIA having $2 billion lying around.

It is worse than that, of course. There is a much worse problem that we have to deal with.

A friend of mine, my colleague from New York State, Carolyn Maloney, has done a study of all the debt that is owed to various Federal agencies, debt that is owed that is uncollected.

Now, here we are cutting school lunch programs, here we are going after the Medicaid Program, a program for health care for poor children, a program that takes care of nursing home people, poor and cannot afford to pay for nursing homes. Here we are going after programs that are vitally needed by people who are in great, and we are not paying attention to the fact that $55 billion, according to the study done by my colleague, Carolyn Maloney, Congresswoman Maloney, on the Government Oversight Committee has done, a study which is fantastic, and she really should be commended for the great work she has done in this area. She has pinpointed, and she has documented, and I have the charts here.

She goes agency by agency and shows, according to the last data that was available, and things might have gotten worse since then, the last data that is available, what is owed in the Farmers' Home Loan Mortgage and other programs in the Department of Agriculture, one of the major offenders. Large amounts of money are owed in the farm programs. The Farmers' Home Loan Mortgage Program is the worst offender. Large amounts of money, debts have been forgiven, forgiven in the Farmers' Home Loan Mortgage Program.

I cannot find out yet what is the criteria for forgiving someone who owes a debt to the Federal Government. Who makes those decisions? From my poor constituents in Brownsville, and East New York, Crown Heights, back in Brooklyn, I am sure they would like to know who is the person you see that forgives debts when they are owed to the Federal Government.

There are people out there who owe a few thousand dollars to the IRS, and they are being continually pursued. There some people, a head of small programs, programs that have funds, and they did not quite know how to handle the bookkeeping. So they were in a situation where the grant funding came late from the State, and they needed supplies, and they needed various things, and they spent the money that they should have been each quarter sending to the IRS. IRS now wants its money. So it is some of the programs have gone out of business, so they are going after the homes of the members of the board of directors, these little people who came out to help make these programs work. They did not get paid; they were just members on the board. They must now have their homes jeopardized because the IRS wants to let unpaid taxes from that agency.

And yet talking about a few thousand dollars here. You know, you are not talking $1 million, not talking about a $100,000. Talking about a few thousand dollars that they are being pursued for. But in the Farmers' Home Loan Mortgage forgave over a 5-year period $11 billion, $11 billion they forgave.

How does that happen? I have asked questions for the last 2 years and tried to get answers as how do you go about forgiving that kind of debt? But in the Department of Agriculture somebody has the power to forgive.

On occasion we had the Department of Agriculture representatives before us in the Committee on Government Oversight, and we asked basic questions like how does it happen that people get so delinquent in the payment of there mortgage loans? You know. My mortgate is not paid in 1 month, you know I get a big penalty, and I get a notice in the second month that they are ready to start foreclosing procedures. How do millions of dollars accumulate for farmers home loan mortgage situation?

I was told by the man standing there who was a high ranking official that, you know, sometimes the addresses change, people move, and you just cannot find them when their addresses change. Now I do not know how anybody with a mortgage on a piece of property can have his address change so radically that you cannot find him. The property is still there, they still own it. How can you sit before a committee of Congress and give an answer like that, that we have a hard time finding people because their addresses change?

But it was done, you know, and I am not one of these guys who bashes the Federal Government and the bureaucracy, but that was a low point in the Federal bureaucracy when they give that kind of answer. Of course State bureaucracies, city bureaucracies, are just as bad. We heard all the discussion here about how terrible it is that money flows into Washington and it is not spent properly. Washington, you know is not alone. Probably Washington does a better job. Its bureaus and bureaucracy does a better job than most State governments and most municipal governments.

The spotlight of course is on Washington. One of the greatest things about the Federal Government is that it is always a gold fish bowl because there is the national media, and there are all kinds of people who are watching critically, but at the State and city level there are terrible things that happen in silence. Nobody says anything. A lot of terrible things happen, and it is not hidden, but everybody seems to be paralyzed.

In New York City, the mayor of New York City who prides himself on reestablishing efficient government, who has a deputy mayor who comes out of business, and he is always pounding away at expenditures by little people and little agencies driving the welfare rolls down by making a long application and requiring people who are hungry to wait 2 or 3 months before they can even be interviewed.

[Page: H3812]

[TIME: 2130]

There are all kinds of ways they use to oppress the little people at the bottom. On the other hand, they let out a contract to an agency for $43 million. The City of New York, the Giuliani administration, they put out a contract for $43 million to an agency and the board of directors of the agency never saw the contract. The chairman of the board said he never saw the contract. A staff member of the agency negotiated the contract and signed the contract.

Of course it was later discovered that people in the agency that let the contract, negotiated the contract at the city level, they had some of them go and get jobs. They got jobs at the agency with which they had negotiated, so it is obvious that something more than mismanagement was going on here. We had mismanagement and corruption.

We have not heard of a single person being arrested as a result of this $43 million contract. Oh, yes, they took back the contract, they canceled the contract, closed down the agency, a lot of furor about `This cannot be,' but no real answer as to why or how does an agency have a staff member negotiate a contract for $43 million.

I do not think you would have that happen in the Federal Government. Whatever things that you might find wrong, you will not have that kind of blatant violation of ordinary sophomoric rules of contracting, but it happens often at the level of municipal government. It happens often at the level of State government.

In our State, we have a governor who openly is saying he is going to move the functions of government around the State and place those agencies that employ large numbers of people in the areas where he got the most votes. It is no secret. It is all out there. How can a State allow the functions of government or the agencies of government, the resources of government, to be used for partisan purposes? But big shots seem to be able to do this.

In America now where the big shots can walk away, do anything they want, they owe the Federal Government millions of dollars. When the Farmers Home Loan Mortgage story was first broken, the Washington Post had a front page story and they talked about 5 millionaires who were perpetrators, who were guilty, 5 millionaires. One of them was sitting on a board appointed by President Reagan that made decisions about who got to keep and who got additional loans.

Five millionaires. I do not know of a single millionaire that was arrested, has been tried or convicted of anything, among those millionaires who were cited. They were named. The Washington Post named them. Four or five. At least four, who were named. Yet the rich and powerful were not worthy of a hearing. I do not know of any hearings that were held to deal with that story.

The chairman of the committee, one of the members of the committee I saw shortly after the story, the Committee on Agriculture here in Congress, I saw him shortly after the story broke. I asked him what he was going to do about it. He said, `You better believe we're going to hold some hearings and get to the bottom of this.' I do not see any record of any hearings being held which got to the bottom of it.

Even now when I call and have my staff try to get information about where we are now with the Farmers Home Loan Administration program, you get vague answers. The figures are right now that at least $10 billion is outstanding, delinquent, at this point right now, $10 billion. How much of that will they forgive? They still will not tell us the rules of forgiveness.

They still will not tell us how you get that.

We can go after children with disabilities, we can try to wipe those programs out because America cannot afford them. We imply that children with disabilities would bankrupt America. There is a smear campaign going now on all the special education programs.

There is a lot of furor being generated about children with disabilities not being held to the same standard as other children in the school. Yes, they are protected by law. You cannot suspend them or expel them in the same way you do children who do not have disabilities, so they have used that as pretext to smear the programs.

There is a great problem, they say. What if the kid brings a gun to school, a child with a disability brings a gun to school? That is a major problem, it has been played up now. We have got to get rid of guns in the hands of children with disabilities. Ask the question, the simple question, how big is the problem? How many instances of children with disabilities having guns do we have?

The answer is that we do not have any studies, nobody has collected any information. We just have one or two incidents that they can cite. You can cite one or two incidents to show or prove anything. You can cite some incidents but the problem when you probe a little further, the problem is minuscule. There is no great problem of children with disabilities bringing guns and weapons to school.

But a crisis has been manufactured because this is one more way to smear the programs of children with disabilities. It is one more way to play into a situation where local superintendents and administrators are upset because they have to spend more on the education of children with disabilities than they spend on other children. So they would like to be able to get their hands on that money, and they would do anything to discredit the program for children with disabilities.

I am not saying that the program for children with disabilities does not have some problems. I have been a major critic of certain kinds of excesses. The way they are administered, the way they are handled in New York City has resulted in large numbers of children with a delinquency problem, a discipline problem. They should not be in the program for children with disabilities.

It is a dumping ground for teachers who want to get rid of children who are a problem, but they are discipline problems. There ought to be some way to deal with it. We ought to provide them with some way to better deal with discipline problems, but there are not problems with disabilities. That has been an ongoing criticism that I have of the program. It is a valid criticism that most of them cannot answer.

So we need to deal with that. We need to deal with each problem as it arises. But to smear all of the programs for children with disabilities, and to set the children who do not have disabilities and their education against the smaller percentage of children who do have disabilities, and to try to take the money away from the disability programs in order to solve budget problems in the larger school budget, is unworthy of Americans.

Really we have a problem with funding for schools. These gentlemen here who pride themselves on having cut the budget have cut education funding. Oh, yes, they are gong to put back the $1.1 billion they cut for Title I. I applaud that. I congratulate them. They will put back the $1.1 billion. But they have cut training programs, teacher education programs, a number of programs that still will not get the money back, and we should have been increasing the amount of money available for education. We should have been increasing it.

We should not be standing here proud of the fact that we made dramatic cuts in education. Instead of the citizens out there, teachers and children and administrators, all uniting to demand of their governments at every level, whether it is the city governments or the State governments or the Federal Government, instead of demanding at every level that they fund education programs consistent with 20th century demands before we go off into the 21st century, they fund money to bring the school buildings up to date so they can be wired properly and have high-tech equipment like computers and science equipment that is needed.

Instead of making the demand on the government, instead of waging the war on the people who make decisions in our government, too many of them are willing to engage in cannibalism. Too many are willing to try to eat what exists. They are going to eat up, devour the special education programs in order to satisfy the needs of the rest of the budget.

I think that is a harsh way to put it, but I can think of no other way except to say that that is happening. Right now the programs for children with disabilities are in great trouble because that is being used as an excuse by certain decisionmakers here in Congress for chipping away at these tiny programs that are already too small, that serve children with disabilities.

Big shots, nobody wants to talk about that. We have not had a single hearing on the Federal Reserve slush fund. If the CIA oversight committee has had a hearing, then I have not heard about it. The Intelligence Committee probably is dealing with that but they do not tell us, so I cannot say a hearing did not take place.

Some people, however, have challenged me. Some people who have heard me talk about this before have called and said, `You know, you make these charges against the CIA. How do you know? On what basis do you make these charges?'

I want you to know that I am not a member of the Intelligence Committee, so I have no oversight responsibilities there. I do not get a chance to see the actual figures, and I am like any other American, I read the New York Times and I read the Washington Post, and I read other newspapers who have their sources.

On several occasions, in several of these papers, I have read that at least $2 billion was found in an audit of the CIA, and going beyond just stating that $2 billion was found in an audit, there was an article which appeared in the New York Times on Tuesday, February 27, 1996 which talked in great detail about actions taken to remedy the situation: `Spy Satellite Agency Heads Are Ousted For Lost Money.' That is the headline for this article.

`The top two managers of the National Reconnaissance Office, the secret agency that builds spy satellites, were dismissed today after losing track of more than $2 billion in classified money.' That is the first paragraph of this article by Tim Weiner. It does not say it is alleged. It does not say `sources say.' It states it as a fact.

`The Director of Central Intelligence , John Deutsch, and Defense Secretary William Perry announced'--oh, there was an announcement--`that they had asked the director of the Reconnaissance Office, Jeffrey K. Harris, and the Deputy Director, Jimmie D. Hall, to step down.' Then it goes on and explains how $2 billion got lost and the President did not know about it and the director of the agency did not know about it.

Mr. Speaker, I include this article that appeared on February 27 in the New York Times in its entirety in the Record because I do not want people to continue to question my accuracy. Here is an article which I think names names, talks about announcements, and it clearly establishes that $2 billion was lost.

[Page: H3813]

The New York Times National, Tuesday, Feb. 27, 1996


[Page: H3814]

Spy Satellite Agency Heads Are Ousted For Lost Money


WASHINGTON, Feb. 26--The top two managers of the National Reconnaissance Office, the secret agency that builds spy satellites, were dismissed today after losing track of more than $2 billion in classified money.

The Director of Central Intelligence , John Deutch, and Defense Secretary William J. Perry announced that they had asked the director of the reconnaissance office, Jeffrey K. Harris, and the deputy director, Jimmie D. Hall, to step down.

`This action is dictated by our belief that N.R.O.'s management practices must be improved and the credibility of this excellent organization must be restored,' Mr. Deutch and Mr. Perry wrote in a statement. A Government official close to Mr. Deutch said the intelligence chief had lost confidence in the officials' ability to manage the reconnaissance office's secret funds.

Keith Hall, a senior intelligence official who has managed satellite programs for the Pentagon, was named today as deputy director and acting director of the reconnaissance office.

The reconnaissance office is a secret Government contracting agency that spends $5 billion to $6 billion a year--the exact budget is a secret--running the nation's spy satellite program. The satellites take highly detailed pictures from deep space and eavesdrop on telecommunications; everything about them including their cost, is classified. The secret agency is hidden within the Air Force and is overseen jointly by Mr. Deutch and Mr. Perry.

But overseeing intelligence agencies, especially an agency as secretive as the reconnaissance office, whose very existence was an official secret until 1992, is no easy matter. Well-run intelligence services deceive outsiders; poorly run ones fool themselves. This apparently was the case with the reconnaissance office.

Its managers lost track of more than $2 billion that had accrued in several separate classified accounts over the past few years, according to the Senate Select Committee on Intelligence . The committee had thought the sum was a mere $1.2 billion until auditors called in by Mr. Deutch found at least $800 million more in the reconnaissance office's secret books this winter.

The auditors told Mr. Deutch that the way the reconnaissance office handled its accounts was so arcane, so obscured by secrecy and complexity and so poorly managed that a $2 billion bulge in its ledgers had gone unreported.

`Deutch did not know, Perry did not know and Congress did not know' about the surplus, an intelligence official said. `There was a lack of clarity as to how much money was there and how much was needed.' The audit is continuing and is expected to be completed by April.

The reconnaissance office also spent more than $300 million on a new headquarters outside Washington in the early 1990's. The Senate intelligence committee, which appropriates classified money for intelligence agencies, said it was unaware of the cost. In the only public hearing ever held on the subject of the National Reconnaissance Office, Mr. Hill testified in 1994 that the construction of the building was a covert operation and the money for it had been broken into separate classified accounts to conceal its existence.

The reconnaissance office is one of 13 intelligence agencies under Mr. Deutch. All will be covered in a report to be issued on Friday by a Presidential commission on the future of intelligence . The report will address the question of whether government spending for intelligence --an estimated $26 billion to $28 billion a year--should continue to be officially secret.

Of course the Federal Reserve Board has not denied the fact that $3.7 billion or more, it may be close to $4 billion that the Federal Reserve Board had on hand, unused, as part of its rainy day fund. That has not been denied. I will not quote articles. There are plenty of documents around which validate that.

Why do I go on like this? What does it have to do with the 11th Congressional District in Brooklyn? The 11th Congressional District in Brooklyn is made up of people, a large percentage of which are poor. We are 1 of the 25 poorest congressional districts in the country.

It varies, of course. There are some areas where we have middle class homes and people who have a little more substance, but in a community like Brownsville, for instance, or in a community like East Flatbush, for instance, there are large numbers of poor people. Then there are also middle-class people who have enough money to try to buy a co-op in a large building.

There is a building that I was in last Saturday which has more than 100 units. We have some pretty big buildings in my district. In fact, I have the smallest congressional district in the country. My congressional district covers only 10 square miles, 581,000 people in 10 square miles, so you can imagine how many tall buildings I must have in my district.

Here is a building that I went into at the request of lieutenants where, of the 100 units, a process was begun several years ago to co-op the building, so the owner of the building started selling co-ops. Twenty people paid down their down payments and they got their loans and they owned their apartments.

Along comes the savings and loan debacle. Remember that one? That, I have talked about so often, is this big shots again. I have talked about the savings and loan swindle, the biggest swindle in the history of mankind, where the total might become as high as a half a trillion dollars, $500 billion, before it is all over.

Savings and loans will be in front of us again soon. I understand we have to vote on a thrift fund package. The thrift fund package is a package established to help bail out savings and loan units. They sold bonds, and now the bonds will come due and there is no money to pay. It is very complicated.

I talk about it because I am not concerned with high finances and I am not concerned with trying to do the job of the Banking Committee. I am only concerned about the little people in my district in this building who are the victims of the ultimate slime, the ultimate feces that goes down as a result of failure of big banks that were loosely regulated, badly regulated, and they were allowed to give these loans without proper collateral. They were allowed to let landlords and owners do very tricky financing, so that in addition to a mortgage being on each apartment in this building that was sold, the landlord had a wraparound mortgage for the whole building.

[TIME: 2145]

When the collapse came as a result of there not being the kind of value there that he had been allowed to assert was there, it was a savings and loan institution that had to suffer the collapse. It was a large organization like Freddie Mac here in Washington that ended up buying the building, and Freddie Mac is now the owner of the building. The 20 people who had equity, money invested, have lost all of their money, because through the complicated maneuverings of the high finance and the real estate financing, which I do not pretend to understand, the building reverted back to a rental building totally. So it is a rental building now, and the people who thought they owned their apartments who owe $90,000, $60,000 to $90,000 on their apartments, now own nothing, unless something drastic is done.

In addition to that, Freddie Mac, and Freddie Mac is a Washington-based institution, a national institution, and I am citing Freddie Mac because Freddie Mac, I intend to come after you. I want you to help resolve this problem. The little people in my district, little people, in this case who are working people, who have enough assets to be able to have started the process of trying to own their own apartment, they are out there in the cold. And Freddie Mac and its cohorts have hired rental agents and managing companies and they are trying to get their money by neglecting the building. The plumbing in the building is outrageous.

I was carried on a tour through the building, and I saw the building which is 10 stories high, it means the plumbing is bad, it is bad all the way down that line. And the people on the bottom, I guess they get the worst of it. And one lady talked about having to use boots in her apartment for a long period of time before they did some repairs. But the repairs have by no means been completed. The ceilings are open, the drips are still there.

What does this have to do with savings and loans swindles, what does it have to do with the failure of the Congress to properly regulate savings and loans? What does it have to do with the fact that most savings and loan crooks got off without going to prison, paying the money back? What does it have to do with the fact that we cannot get a decent clear report as to the status of the savings and loan bailout now? What does it have to do with the fact we are going to be voting very soon again on another appropriation for the savings and loan bailout, while we are cutting programs for children with disabilities, cutting programs for opportunities to learn education? How does it all tie together? How does it all tie together with my assertion that the rich and famous and powerful seem to get away with everything, while we scrutinize and oppress the people at the very bottom?

The people who are the tenants in this building, the people who thought they were owners of those co-ops, they are the people at the very bottom. They are in my district. I will not waste my time here on these high financial matters trying to reform government or expose the fact that there is no reform, that big government is as big as it ever was when it comes to the rich and powerful, and nobody is seeking to really bring the rich and powerful to heel. Nobody is dealing with the uncollected debts that amount to $55 billion. Nobody is dealing with the savings and loan scandal that keeps going, quietly. We are taking care of that. But every time the savings and loan debacle says to Congress we need more money, we appropriate more money. We get a message, it has to happen. The financial markets are going to collapse if we do not appropriate more money.

A very interesting matter arose in Japan. Here I am going across the water. You think I am rambling? No. In Japan they have a savings and loan scandal. They have a banking scandal similar to the American savings and loan scandal, a huge situation where large numbers of banks are collapsing, real estate markets are collapsing. The government is called upon to bail out the situation.

I thought it was very interesting the reaction of some Japanese legislators. You know, we sweethearted the process here in America. Both parties, together, became mum and they never had hearings to expose the criminality of the savings and loan banks and the other banks that were also more regular banks collapsed. Savings and loan, we called it the savings and loan debacle because they started it. There were other banks, larger amounts of money, and they were also regular banks under the jurisdiction of the FDIC and Federal Reserve Board. We had all these controls and regulations, and still there was so much collusion from one level to another, the decision makers in bed with the regulators, and the regulators in bed with the banks.

It was a once-in-the-history-of-mankind situation. No swindle has ever been pulled off as great as that, and no swindle has ever taken place where so many people got away with it.

So much crime that did pay. It paid billions of dollars. But in Japan, you have a very unusual thing that happened. The story in the New York Times says that one Japanese party staged a sit-in in the legislature. They blocked the chambers where the debate was taking place on the bailout for the banks. Very interesting. If you want to know what the possibilities are, what more we could have done, then I will quote this article a little bit and you will see what the Japanese did, faced with the same situation.

The savings and loans collapsed, real estate market collapsed, it resulted in little people at the very bottom suffering greatly, like the people in my district who were suffering in this one building. All their money gone down the drain, now they have to fight a landlord and a management company that will not even repair the pipes. A group of tenants were taken to court on Monday, and I went down to the court. They postponed the case. Those people had all taken off from work to go. Now the case is postponed and they have to come back. The little people are harassed even by the court system.

How does it all relate back to Japan and the politicians in Japan becoming so militant and so angry that they staged a sit-in? Some of Japan's leading politicians are spending their time in a sit-in. This was reported in the New York Times on March 16, 1996.

`It is a battleground, said Kojimoro Moto,' quoting from the article:

[Page: H3815]

a member of the House of Representatives who is also an organizer of the sit-in which at the time of this report was in its second week. When they said it is a battleground, that is a bit of an exaggeration perhaps, but there is no mistaking the seriousness of the conflict. Those protesting are the main opposition group, the New Frontier Party, and they have succeeded in paralyzing the Japanese budget process. The New Frontier Party's aim is to block the passage of the budget bill for next year. The party objects to an unpopular provision in the bill to use about $6.8 billion in taxpayer money to absorb losses in the liquidation of seven of the nation's bankrupt mortgage lenders.

Let me just repeat that:

The New Frontier Party was sitting in in the legislature of Japan blocking the budget process from going forward, and their aim is to block the passage of the budget bill for next year.

The party objects to an unpopular provision to use about $6.8 billion in taxpayer money to absorb losses in the liquidation of seven of the nation's bankrupt mortgage lenders.

This is a bailout for the banks similar to the savings & loan bailout in this country.

Now, I was in Congress when the bailout began here for the savings & loans in this country. We never had a figure as low as $6.8 billion. I think the first bailout money was $7 billion, and it got higher. It got to $50 billion, $75 billion, and we kept being told `it is off budget, so don't worry about it.'

Off budget does not mean the taxpayers do not still pay. That means in the calculations for the budget that year, you do not have to figure it. It becomes part of the deficit.

We never appropriated as little as $6.8 billion. But the Japanese members of the legislature, the equivalent of Congresspersons, were sitting in to block that from going forward.

We are going to have on this floor within a few days a bill to continue the bailout of the savings & loans called the Thrift Fund. While we are cutting programs for children, programs for the elderly, while we are going after Medicaid, Medicaid is on the agenda, Medicaid will be cut, the bargaining process that goes on between the white House and the Republican majority here is such that the Republican majority always wins something, and every step of the way they have won some cuts, so we can expect Medicaid will be cut. That is the least that we can expect.

The most that we can expect is that Medicaid will be given to the States. All the Governors, both Democrat and Republican, have decided, voted, they wanted Medicaid to be made a block grant. Take away the entitlement and give it to the States.

So those cuts are going to go forward at the same time we have voted for a $6 billion increase in defense, and we are now going to be voting to bail out more of the banks. It is going to be billions of dollars. They will not come with a few hundred million, I assure you.

Let me go back to the Japanese. To quote from the article about the Japanese sit-in,

`Critics of the bill say that $6.8 billion is just the beginning of the bailout, for the banks are saddled with at least $400 billion in bad debt. The provision has prompted a public outcry against bankers and bureaucrats, who many believe are responsible not only for the nation's bad debt, but also for the stagnant economy.

I will not read any more at this time. I just want to draw the parallel. Nobody on this floor has ever mentioned the fact that the Japanese have a swindle, a scandal, of the same dimensions, did you hear what I just said, the $6.8 billion is just the beginning. They think they have a problem of at least $400 billion.

In this country, we never got a figure, but it always kept growing. Stanford University at one point, who had more of the figures that anybody else, estimated that the savings & loan bailout in America, the greatest swindle in the history of mankind, would cost the American taxpayers $500 billion, half a trillion dollars, before it was over.

We cannot yet clear reports. We do not know how close we are to the $500 billion yet. But it is affecting everybody at the lower levels in this country, the ordinary Americans. You are being made to suffer for what the rich and powerful have walked off with.

Even the $5.15 per hour minimum wage now is being seen as a threat. We are told that the American economy will suffer. Industry is trembling because we have a proposal to raise the minimum wage by 45 cents per hour per year, 45 cents per hour in one year and 45 cents an hour in another year, which means after 2 years the minimum wage increases would go from $4.25 to $5.15 per hour. $5.15 per hour is called a threat to the American economy.

The little guys on the bottom, every-thing is too much for them. The guys on the top can get away with billion dollar slush funds, they can wreck the banking economy and the taxpayers are forced to bail them out through the Federal Deposit Insurance Corporation. But the little guys on the bottom asking for $5.15 per hour for their labor, it does not even come out of the Treasury. The American Government does not have to pay the $5.15 per hour. The Government does not subsidize wages paid by industry. It does not come out of the taxpayers' money. It comes out of the industries that hire the people.

But there are some here in the leadership of the recommend and majority who have indicated that they will not have any hearings or discussions on a minimum wage. They indicated that earlier in the year. And that if we pass the minimum wage increase this year, it will be `over their dead body.' That strong statement was made by a leader of the Republican majority.

Fortunately, public opinion in America is galloping forward. Fortunately, public opinion understands that this is ridiculous. Public opinion is comparing the prosperity on Wall Street and the large amounts of money being paid to stockholders and the large amounts of money being paid to corporate executives, my colleague here before from Chicago was talking about the gap between the corporate pay of executives and the amount of money people are earning at the very bottom, and Americans are not dumb. Fortunately, public opinion, by more that 76 percent, says that we ought to have an increase in the minimum wage in America.

[Page: H3816]

[TIME: 2200]

Fortunately, the hearts of the American people are still not so hard and so corrupted that they cannot understand the arithmetic of $5.15 per hour, which comes out to a little more than $9,000 per year. Right now people are making about $8,000 a year on minimum wage. They would be making about $9,000.

Another thousand dollars would make a big difference in the lives of people in terms of groceries on the table, shoes for the kids, the payment of a light bill, the phone bill. It is not a small amount for poor people, for those at the very bottom, and most people cannot sympathize here in this Congress. We can forgive billions of dollars in loans for farmers' home loan mortgages, but we cannot see the need to give $5.15 as a wage, hourly wage, for people who are working.

We have had many attacks on welfare mothers, which is a misnomer, because the Federal Government does not pay money to mothers. The mothers of children who are considered dependent children receive the checks on behalf of the children. Aid to Families with Dependent Children has been under one steady stream of attack. It is all over just about now. They are going to take away the entitlement. They have made the cuts. But it is a small program. It is a tiny program compared to the farm subsidy program, for example.

The farm subsidy program, which allows Louisiana, part of the reason Louisiana gets so much money, and I am going to tie this together now, part of the reason Louisiana gets so much money from the Federal Government is because not only does it have military installations there, but it also has farm subsidies it gets from Washington.

The State that gets the highest amount of money from the Federal Government per capita is New Mexico. In terms of what it pays in, New Mexico gets back more per person than any other State. Why? Because New Mexico has the largest, a large number of farm subsidies, programs that receive subsidies from the Federal Government. New Mexico is at the top per capita, $3,255 more per person they get from the Federal Government than they pay into the Federal Government.

What did the gentleman who was speaking here before from the Committee on the Budget and the Committee on Appropriations, what do they do about the fact that New Mexico is at the top of the list? Farm subsidies for the rich and the powerful, because farmers do not have to prove they are poor in order the get subsidies. Farmers do not have to prove anything except that they are farmers and they have land. They get paid for not plowing the land or not planting grain and nobody asks them how poor are you or how many in your family. Farmers just get it. They are rich and they are powerful or they are hooked into organizations that are powerful. So in America the rich and the powerful are definitely not subjected to the kinds of budget cuts and the scrutiny that the children in the lunchroom are.

We are going to force teachers to walk around the lunchroom and pick out immigrant children and make sure no immigrant child gets a free lunch paid for partially by the Federal Government.

I want to make a correction here on my statement on minimum wage. The Republican majority said they would not have any hearings, no discussion on minimum wage at the beginning of this Congress. But because the pressure has been applied steadily by the American people, because common sense has said you ought to discuss it and you ought to pass and increase the minimum wage, we now have a situation where the Republicans are willing to discuss minimum wage and a proposal is being made.

Some Republicans, I think about 20, have introduced a bill which says they want to raise the minimum wage by not 90 cents over 2 years but a dollar over 2 years. That is a small group of the Republican majority, about 20 people. The leadership of the Republican majority has introduced a proposal. They do not want to increase the minimum wage. You will do that over their dead bodies, they say. But they have a proposal called the Minimum Wage for Families Act. I have a copy of the outline in my hand. And this proposal, which is going to sidestep making industry pay more than $4.25 per hour, will have the Federal Government step in to subsidize the wages.

Let the industries keep hiring people at $4.25 an hour, the Federal Government will then step in and give people additional money who are working. You talk about a farm subsidy; now we are going to have a subsidy for industry, corporations and businesses. You will get a subsidy, and every person who has one child will not get $4.25 hour, the Federal Government will give them an additional $3.75, so that they will get $7 an hour. And if they have two or more children, the Federal Government will give them enough money to make their pay come out to $8 an hour.

Now, can you see millions of workers across America having the Federal Government involved in their pay? This is an intrusion by Government that we have never had before. It will be on a scale greater than telling the farmers what to plant and telling the farmers how to grow their crops because they are getting money from the Government. We are going to have millions of workers involved in a program where the Government is going to help industry bring people's wages up.

How is it going to do this? The Government is going to take the money from the earned income tax credit. They want to raid the earned income tax credit and use it for working people in these industries and have the Internal Revenue Service, on a regular basis, every 2 weeks, the Internal Revenue Service will now have the job of paying the difference between the $4.25 per hour and the amount due to each person in accordance with what has been decided by the Government.

Can you imagine what kind of bureaucracy we are talking about there, in a Congress that prides itself on downsizing the Federal Government? The Federal Government will be intruding like it never has before in the lives of working people. Why do we not just give the $4.25 to each worker out there who is working? Why do we not just give it to the little people? Why are we going to put the people on the bottom? Because if you are making $4.25 an hour, economically you are on the very bottom. Why are we going to put them through that when we do not put farmers who receive subsidies?

In Kansas they say the subsidy averages about $40,000 a year per family. That is the average. Many get much more than that. Forty thousand dollars a year per family. They do not get through a process of scrutiny by the Federal Government to determine whether you have one child or two children or whatever.

Let me summarize. What I am saying is that we have allowed a situation to arise, generated by the majority in this Congress, where there are two sets of Americans, the 80 percent who are ordinary people struggling to make a living, the 80 percent are a part of what my colleague, Mr. Lipinski, was talking about, from Chicago, he was talking before I got here, 80 percent who are struggling to make ends meet are being given a hard time in every way by their government.

I think this 80 percent constitutes a caring majority and all together they have enough common sense to see what is happening. I think the caring majority all together will rise to take matters into their own hands at the polling places. I think the caring majority have had enough. I think the people with disabilities are not beggars. They are not people that we have to treat with charity. They have votes.

There are almost 40 million people in this country with disabilities, so when we treat them in a cavalier way in legislation, we are going to reap what we sow. I am confident that the average American on the bottom out there, we the people, will rise and at the ballot box demonstrate that this is a country still for the people and not for the rich and powerful. We are going to have justice and those who ignore this will have to suffer the consequences.

[Page: H3817]