Date: 1983-03-01
Speaker: ST GERMAIN (democrat)
Chamber: H

Mr. Speaker. high interest ratesdespite some welcome downward trends in selected areascontinue to hold back economic recovery. Belatedly. the Reagan administration is recognizing that something must be done about interest rates if we are to have any hope of putting people back to work in this Nation. Inflation is down. but interest rates remain at double digit levels even for big business borrowers. For small businessmen and consumers. Interest rates have not budged or. at best. have moved only a fraction off historically high levels. Last week. President Reagan suggested that commercial banks were keeping interest rates at artificially high levels. "It is up to the banks." he said. "And there is no reasonI do not thinkwhy the banks could not bring those interest rates down another notch or two." Only a few days before. Secretary of the Treasury Donald Regan. bluntly stated: "Banks are doing their utmost to keep Interest rates up." And President Reagans chief economic adviser. Martin Feldstein. chimed in with a prediction that longterm rates will not move much over "the next few months." Mr. Speaker. we are happy to have the Reagan administration. at long last. recognize the destruction that high interest rates have brought to the economy over the past several years. The landscape is littered with the remains of businesses. farms. and jobs destroyed by runaway interest rates. Mr. Speaker. clearly the economy needs a real reduction in interest ratesa reduction across the board that will give American families a chance to buy a home. that will allow small businessmen to reopen their doors. and that will give jobproducing industries new life. And we need more than just a shortterm reduction. We need some assurances that we will never again allow people and businesses to be destroyed by the unconscionably high interest rates and the scorchedearth monetary policies of 1981 and 1982. The American people need longrange protection. They need assurance that someone will step in before the economy is crushed. Mr. Speaker. I am happy that the President and his economic advisers are speaking out about the problem. even at this late date. But. we need more than hand wringing statements In times of ecomomic crisis. Economic jawboning means a lot morecarries a lot more weightwhen there is a club in the corner in the event the lenders do not get the word. I am today introducing the Credit Control Act of 1983 which would give the President standby authority to control high interest rates and to make certain that credit. needed for productive purposes. Is not siphoned away for highflying speculative endeavors. With this act in place. the Presidents efforts to jawbone will have true impact. The lending community will know. and the Federal Reserve will know. that the President does. indeed. have the statutory power to put words into action. The credit control legislation I am introducing today is identical with that reported from the Banking. Finance and Urban Affairs Committee last year. This bill did not reach the floor in the closing days. but I am confident the Members of this Congress. who have seen the utter destruction caused by high interest rates in their districts. will give strong support to doing something more than talking about high interest rates. Mr. Speaker. the legislation would reinstate the Credit Control Act of 1969 with several strengthening amendments. The 1969 act unfortunately was allowed to fall under a "sunset" provision which became effective last June 30. The bill would give the President the power to institute credit controls "to reduce high levels of unemployment in any sector of lie economy or to prevent or control inflation or recession." The act. once triggered by the President. would be administered by the Federal Reserve Board. All aspects of credit could be controlled. including interest rates. maturities. downpayments and other terms. The President could authorize use of the powers across the full spectrum of credit or could pinpoint the controls to specific areas. Mr. Speaker. I hope will have early action of this legislation. Its passage will be a clear signal to the banks and other lenders and to the Federal Reserve that the Congress intends to see lower interest rates and lasting protections for the American public in the area of monetary policy.e