1997 Ron Paul 73:5
The Clerk read as follows:
Amendment No. 36 offered by Mr. PAUL: At the end of title I (page 5, after line 14), insert the following new paragraph:
REDUCTION IN AMOUNTS
Each amount otherwise provided in this title is hereby reduced to $0.
1997 Ron Paul 73:6
Mr. PAUL.
Mr. Chairman, earlier in the debate on the previous amendment, the gentleman from California [Mr. Rohrabacher] suggested that there was one problem with the Mr. Royce’s amendment. And he said it just did not go far enough.
1997 Ron Paul 73:7
I have an amendment that will go far enough to deal with this entire problem of corporate welfare. My amendment strikes all the funding from title I. This means that the $632 million that goes to the Export-Import Bank, the $32 million that goes to OPIC and the $40 million that goes to the Trade and Development Agency would be struck. This would not close these agencies down. We have heard on numerous occasions already today that OPIC and other agencies like OPIC are obviously self-supporting. If they’re self-supporting, they need no more appropriations. They can use the current funding, they can be privatized. This whole idea that they come with the argument that they’re self-supporting and self-sustaining and that they make a profit, there is no purpose in being here. Why do they come to the American people and ask in this particular bill for export subsidies of $704 million? My amendment would strike the $704 million. These three agencies have liabilities of well over $100 billion and this would be eliminated.
1997 Ron Paul 73:8
One of the reasons the argument is made that these agencies are self-sustaining is that they hold Treasury bills, which means that they receive huge sums of money through the back door through interest payments. This money is not appropriated for the specific purpose, but as long as they hold Treasury bills they get the interest payments. For instance, I mentioned earlier that OPIC in 1996 received $166 million in this manner. So, self-sustaining, it is not.
1997 Ron Paul 73:9
We should really ask if this is good economic policy. Quite frankly, it isn’t good economic policy. It encourages businesspeople to do the wrong things at the taxpayers’ risk.
1997 Ron Paul 73:10
It is mentioned that these programs are available in the private sector but they won’t go into the risky areas. Obviously not. OPIC, for instance, goes into countries, and what the American people have to assume is the risk against political risk and economic risk. So if these companies go bust, the American taxpayers have to stand behind them. So we have a misdirection of the economy and the misdirection of investment because we get companies to do things more risky than they would have otherwise. If they want to go into a more risky area, the private insurance would obviously be higher, so therefore this is a subsidy to corporations.
1997 Ron Paul 73:11
There is no reason why we should support this type of welfare. There are several kinds of welfare. We have welfare for the poor, we have welfare for the foreigners and we have welfare for the corporations. I don’t think the correct place to try to solve our problem on welfare is to go after the poor man’s welfare, but we can go after foreign welfare and we can go after corporate welfare, and this is an example of corporate and foreign welfare.
1997 Ron Paul 73:12
It is said that these programs there is never any loss to the taxpayers. That is a bit of a fallacy, because the loss to the taxpayers is when you take the money from the taxpayer, so they are losing all the time. And most little people never get benefits from this. It’s the large corporations that lobby us so heavily to endorse these programs. So there are not that many loans that default.
1997 Ron Paul 73:13
But there is another reason why we do not have that many loan defaults, because they quickly renew these loans at different terms. There is a lot of generous renewing of loans and therefore the default level is very, very low, if you see it at all. But the risk is there. The real risk to the American taxpayer is when we tax the Americans to go and encourage programs like this. The assumption is made that if we don’t do it, it will not happen. Maybe not, maybe it will. If it doesn’t happen, maybe it is too risky. But most of it still would happen; it would be insured in the private sector and many of these programs would occur.
1997 Ron Paul 73:14
To get up and say A, B, and C company would not have existed and could not have done this is not correct because we don’t know. The other thing we do not know is who suffered from this credit allocation. When the Government gets involved in credit allocation, in saying this credit is guaranteed and should go in this direction, every time there is $10 billion going in that direction, it comes out of the private sector and some little guy lost his credit. So obviously the banks are going to loan to the people that have a guarantee.
1997 Ron Paul 73:15
Another area that we should address here is the subject of who gets these loans. For instance, one of the biggest beneficiaries is China. Red China gets over $4 billion. That in itself is enough reason to vote for this amendment and reject corporate welfare on principle.
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