Date: 1983-11-18
Speaker: ST GERMAIN (democrat)
Chamber: H

Mr. Speaker. the legislation before us represents the work product of so many Members that it would take too much time to mention them all and thank them for their contributions. However. I would like to state for the record that the proposal before us would not be here without the efforts of the House leadership on both sides of the aisle. my good friend and associate. CHALMERS P. WYLIE. ranking minority member of the committee. HENRY B: GONZALEZ. chairman. and STEWART B. MCKINNEY. ranking minority member of our Housing and Community Development SubCommittee.. JERRY M. PATTERSON. chairman. and DOUG BEREUTER. ranking minority member of our Subcommittee on International Development Institutions. and STEPHEN L. NEAL. chairman:. and Jim LEACH. ranking minority member of our Subcommittee on International Trade. In addition. I want to commend the efforts of all of my colleagues on the committee for their intense interest. valuable contributions. and total support. The process and procedure in which we are engaged in bringing this legislation to the floor is somewhat unique. For those who feel oppressed by this unique procedure. I apologize. I feel. however. that the importance of the items contained "in the legislation. such as. new housing authorization programs for 2 years. new authorization for U.S. participation in the International Monetary Fund. new authorization for the ExportImport Bank. new authorization for the InterAmnerican Development Bank. the Asian Development Bank and Asian Development Fund. and the African Developnient Fund. newv bank regulatory provisions to be used by the regulatory agencies concerning U.S. bank lending to lesser developed countries. and other important matters justify the process. As most. if not all. of the Members know. thc authorizing legislation before us today has traveled a circuitous and tortuous route. This House initially passed a Housing and Community Development bill. H.R. 1. on July 13. 1983. by a vote of 263 to 158. The Senate called up their housing authorization legislation on June 21. 1983. r id debated for approximately I hour and then withdrew the legislation. It was understood the other body would subsequently return to consideration of the housing and community development legislation. It never happened. On August 4. 1983. the House passed H-.R. 2957 which provided new authorizat ions for the IMF. ExportImport Bank. and the multilateral developnrient banks. The Senate has passed authorizing legislation for the IMF and ExportImport Bank but has not yet considered authorizing legislation for the multilateral development banks. Mr. Speaker. I relate a little bit of thle history concerning these 1l2gisiative matters. in part. to justify the unique procedure in which we are engaged today. Without the authorization and appropriation of funds for the IMF there would be no housing and urban development bill. Also. I am convinced that the housing component of this package will help obtain the necessary votes. We are faced with the necessity of both authorizing and appropriating funds for the International Monetary Fund in a single piece of legislation. To my colleagues who may feel that their jurisdiction has been violated. I apologize. The lateness of the hour. the insistence of the administration. left me no alternative. On balance. the substance of the legislation before us as regards Its domestic importance and the provisions for our necessary continued U.S. participation in the international arena overwhelmingly justify the procedure we have before us. Mr. Speaker. 1 would now like to describe some of the major provisions contained in the various titles of this legislation. The first five titles of this legislation are the housing and community development provisions that were resolved based on agreements between both the House and Senate and the administration. Title I contains the $3.4 billion reauthorization of the community development block grant and $440 million for the urban development action grant program. As part of the reauthorization of these two important programs. this legislation makes a number of policy changes with regard to both the CDBG and UDAG programs. The principal policy change deals with the socalled "principally benefit" Issue. This legislation states that not less than 51 percent of CDBG funds are to be used for activities to benefit low and moderate income persons for a period of not more than 3 years. There are a number of other changes in this title including grandfathering provisions that would keep entitlement cities and urban counties that have fallen below the population threshold as entitlement communities for an additional 2 fiscal years. The section 312 rehabilitation loan program. of whichi I was one of the principal authors back in 1964. was extended for 1 additional fiscal year. In title II we have authorized $9.9 billion for the assisted housing prograins at levels set forth In appropriations acts for fiscal year 1984. and have authorized such sums as may be necessary for fiscal year 1985. We have retained the assisted housing delivery system after a lengthy struggle with the administration who wvanted to replace such programs as section 8 and public housing with a housing voucher program. The very difficult Issue of the tenant rental rollback is resolved not entirely satisfactorily to the House provision. but provides for Increased deductions of $480 per child. childcare expenses. $400 for elderly or handicapped households. and medical CXpenses in excess of 3 percent of Income for elderly aind handicapped personis. By providing for these additional deductions we will substantially reduce tenant rents for people living in assisted housing. I regret that In our negotiations with the administration. we were unable to maintain the changes made in the public housing comprehensive moderinzation program and the Performance Funding System of the public housing operating subsidies program. Simply put. the administration wanted no statutory changes in these programs. but OMB Director Stockman has sent me a letter stating that the administration will make no fundamental changes or structural program reforms absent seeking authorizing legislation. Title III provides a $350 million program for rental housing rehabilitation and production. It is modeled along the lines developed by our distinguished colleague from New York. CHmUCK S(:mmUME.. This program will provide $615 million to be made available over the next 2 fiscal years. This new rental program provides for upfront grants rather than longtermi subsidies as our previous assisted housing programs had been carried out. Title IV extends all of the FHA insurance programs through fiscal year 1985. including the section 235 homeownership assistance program. A demonstration of the FHA insurance for alternative mortgage Instruments is provided for with various limits as to the total amount of its activities. The flood insurance program is extended for the next 2 fiscal years. The crime insurance program Is extended for 1 additional year and the riot reinsurance program will be terminated. The secondary mortgage market provisions were deleted from this legislative package. since the Senate insisted that without Its securities legislation they could not consider the other secondary market provisions that were contained In H.R. 1. but the Housing Banking Committees Housing Subcommittee will be conducting hearings on the secondary market issues early in the next session and. hopefully. we can get this legislation moving early next year. Title V retains the essential structure of the $3.2 billion Farmers Home Administrations rural housing programs for both fiscal years 1984 and 1985. A new rural housing preservation program targeted at the low and very low income population is established in this title. and I would like to commend our distinguished colleague from New York (STAN LUNDINEI who is the principal proponent of this program. Mr. Speaker. I am pleased to report that the International Monetary Fund provisions in title VIII and the International Lending Supervision Act of 1983 in title IX. are virtually indentical to the major provisions of H.R. 2957 which passed the House on August 3. 1983. While this final result. like thle rest of this legislation. is a compromise between House and Senate positions. it is a compromise that retains essentially all the tough international finance reforms adopted by the House. It is a compromise that will insure that thle foreign loan activities of our money center banks will be monitored by Congress. the public. the F"ederal bank regulators and thle General Accounting Office. more closely than ever before. Thorough audit and accountability is provided for by specific statutory i nst ruct ins to thle Secretary of the Treasury. thle U.S. IMF representative. and to thle Federal banking agencies In furtherance of the Declaration of Policy contained in the International Lending Supervision Act. That declaration states. and I quote. "It is policy of the Congress to assure that the economic health and stability of the United States and the other nations of thle world shiall not be adversely affected or threatened in the future by Imprudent lending practices or inadequate supervision." Thle provisions of title VII will reqire the U.S. representative to thle IMP to vote against IMF loans which would bailout banks for their imprudent loans. Congressional control over the IMF has been increased by consultation requirements before they increase SDR allocations and directives to work for greater monitoring and disclosure by the IMF of foreign loan trends and increases in the maturity and lower interest rates on the debts owed by developing nations. Specific Instructions to the U.S. representative to the IMF will result In comprehiensive reports that will enable the appropriate committees of the Congress to discharge satisfactorily their oversight responsibilities. In the future. the IMF will be a greater participant in the effort of preventing financial crises. Title IX mandates far more intensive supervision by the regulatory agencies than has been the case in the past. Several provisions. each of which reflect the House position. should be emp~hasized. The provision on capital adequacysection 908is of utmost Importance. Thle Senate receded to the tough House language requiring for the first time that regulators establish fixed standards of adequate capital for "multinational" banks. Failure to maintain established capital levels is explicitly made an "unsafe and unsound practice" within the meaning of Section 8 of the Federal Deposit Insurance Act. A penalty of $1.000 a day for violation of regulations promulgated tinder this authority is provided. In addition. thle banking agencies are required to impose loanloss reserves on bank loans in which countries are facing protracted repayment difficulties. This sectionsec. 905--a. merger of Senate and House provisions also requires the banking agencies to analbze eachi foreign loan rescheduling. assess the loanloss risk reflected In rescheduling agreements. and insure that bank capital and reserve positions are adequate to accommodate potential losses of foreign loans. To address the deeply troublesome problem of banks charging excessive fees for rescheduling Imprudent and unjustifiably shortterm loans. the Senate has accepted the House provision which will prevent excessive fees by requiring agency regulation of such fees and prohibiting baniks from charging any fees over the administrative costs of the rescheduling unless they are paid by the borrowing counitry In equal installments over the life of the loan. rather than In one bur(ie11sulle. 111p front. lump sum payment. The Senate and the House also agreed on the need for more bank disclosure. The International Lending Supervision Act mandates an unprecedented increase in the distribution of international lending information. and will assure that we will never again be kept in the dark by the International banks regarding the true size and growth of international lending. In addition to disclosure. the House and Senate agreed that there Is a need for banks to analyze much more carefully the repayment capacity of the recipients of foreign loans. To address this problem. the Senate has accepted. with only slight modification. the tough House requirement that commercial banks conduct a thorough repayment analysis of every foreign loan above $20 million in size. To clearly demonstrate congressional intention to monitor closely thle international lending supervision activities of our banking agencies. the Senate agreed to the House provision clarifying and providing the authority the GAO needs to fully audit international lending activities. To assure that the agency with ultimate insurance responsibilitythe FDICis a full participant in International supervision. the Senate accepted the House provision directing that the Federal Deposit Insurance Corporation will be given equal representation on the International Committee on Banking Regulations and Supervisory Practices. Over time. the FDIC perspective will strengthen internlational regulation and supervision. Of great importance is the fact that both titles VIII and IX require significant reports which will assure public disclosure and continued congressional participation. Both are essential if we are to improve the existing system of IMF funding and regulatory supervision. Both House and Senate versions contained reporting requirements with appropriate public disclosure. Mr. Speaker. this legislation would also extend the Eximbank. so vital to U.S. exports. until September 30. 1986. improve Eximis support of small business exports. expand Exims programs to include exports of services as will as goods. and restructure the terms of the Exim. board members to make them more responsive to Congress. To offset thle effects of unfair foreign subsidies. it would authorize Exim to grant lump sum assistance to injured companies. To increase U.S. exports. the Eximbank. and the Agency for International Development would be required to establish tied aid credit programs for U.S. exports. .Mr. Speaker. title X of this legislation would provide U.S. funding for the InterAmerican Development Bank. the Asian Development Bank and Development Fund. and African Development Fund. Mr. Speaker. the "apartheid" and "Communist dictatorship" amendment before us does contain an amendment to the Housepassed language onl apartheid and Communist dictatorship language. While some of our Members might not approve of the Senate amendment. I believe when the amendment Is looked at as a whole. the Senate amendment in this instance is acceptable. The Senate amendment provides. In the instance of apartheid. that the Secretary of the Treasury must appear before the committees of Congress having made certain findings. before the Executive Director to thle IMF can vote for a resolution providIng credits to a country which engages In apartheid. These findings must state that the credits are made available only if the majority of the people In the nation will be benefited. There are other criteria which must be met before a positive vote can be made concerning thle granting of credits to a country which practices apartheid. all equally stringent as the one just mentioned. It is my intention at the beginning of every congressional session to ask for a blanket requestthe Secretary of the Treasury will have to appear before our committee in each and every instance where an IMP credit is being considered to a country wvhich practices apartheid. The Secretary of the Treasury will have to notify us and certify to the criteria in this amendment. I shall make sure hie does It In each and every instance. Mr. Speaker. this is a good amendment which will evidence to the world our commitment to do wvhatever we can to stamip out this repugnant form of economic. social and racial prejuidice. The Senate amendment concerning Communist dictatorships as insisted on by the Senate would allow our Executive Director to the IMP to vote in favor of the granting of a credit to such nations. again after the Secretary of the Treasury appears before thle committees of thle Congress. In tho..ncases where. among other things. it can be shown the majority of the People in tlaat country would benefit from an IMP credit. we can vote in thle affirmative. 1110522 November 18. 1983 COPh For Hungary and Yugoslavia and other countries which we are trying to assist in -breaking away from their Communist leanirgs this is. in my opinion. a good amendment. Therefore. Mr. Speaker. I believe the "apartheid" and "Communist dictatorship" amendment Is a good amcndment and should be supported by the Members of the House. Mr. Speaker and Members of ths House. I repeat. In the spirit of compromise and in order to get thle best result possible. there are some iterms contained in this rather weighty package that may not totally satisfy all Members. By the same token. It seems clear to me for anyone interested in housing and community development as well as the plight of our lowincome people. for those who are concerned about the present and future economic wellbeing of this Nation. for those who are interested in a continued commitment. to our multilateral development banks. for those who subscribe to the philosophy that the ExIm Bank is needed to create Jobs. and that the amendments contained herein will create even more jobs. particularly in the small business sectorI say that we have brought a legislative package that is worthy of your support. Mr. Speaker. I include in thle RECORD at this point a letter from the Director of the Office of Management and Budget. David Stockman. which states the administration will make no fundamental or structural program changes to the public housing operatIng subsidy and modernization programs in 1985 without first seeking authorizing legislation: OFFICE OF MANAGEME.NT AND) Bui(.Fr. Washington. D.C.. November 6. 1983. flon. FERNAND ST GEHMAIN. Chairmian. Banking. Finance and Urban Affairs Committee. House of Representatives. Washington. D.C DEAR MR. CHAIRMAN: This letter Is intcnded to clarify the Administrations position concerning fundamental structural program reforms for the Public Housing Operating Subsidy and Modernization Programs in 1984 and 1985. As you know. the Department of Hlousing and Urban Development has developed. through published regulations and other administrative procedures. a complex. techniCai system for allocating operating subsidies and modernization funds among more than 2.600 local public housing authorities. The Department will administer these programs In 1984 with thle funding provided In the HUDIndependent Agencies Appropriations Act of 19834 (P.L. 9845) pursuant to reguiations and policies in effect as of November 15. 1983. except prescient to the pending authorization bill. The Administration has agreed that it would seek authorizing iegislation for any fundamental chnges or structural program reforms It might wish to make for these programs In 1985. I hope these clarifications will remove any concerns Members of Congress may have concerning the Administrations position on this matter. Sincerely.