September 22, 1998
The Honorable Newt Gingrich
U.S. House of Representatives
H232 The Capitol Building
Washington, DC 20515Dear Mr. Speaker:
The American economy has been booming for the past several years, creating jobs, boosting wages, and raising our standard of living. But now we find that the nation's economic health is seriously threatened by a number of developments around the world:
- The Asian financial crisis has defied predictions and continues to worsen and spread. The impact on the United States is becoming clearer by the day. In the first half of 1998, U.S. exports to key markets in the region were down more than 20 percent from the same period of 1997. Partly as a result of the crisis, U.S. economic growth dropped from 5.5 percent in the first quarter of this year to 1.6 percent in the second quarter. And the resulting weakness and volatility in securities markets, both here and in other countries, is eroding the savings and retirement funds of millions of American workers and families.
- The Japanese economy, the world's second largest, is mired in recession, and there appears to be a lack of will to take the necessary actions to revive the economy.
- The Russian economy is crumbling precipitously, with grave implications not just for U.S. economic interests, but for our national security and foreign policy interests as well
- The turmoil in Asia and Russia is threatening the economies of Latin American countries, as demonstrated by the recent problems faced by Brazil and Venezuela. Latin America is a key market for U.S. exports (our exports to the region reached $134 billion in 1997); collapse of these economics would pose a grave threat to our own economy.
Over the past several years, the United States has made great strides in advancing its interests, to the benefit not only of Americans, but of people around the world. However, the decade's stunning positive developments, including the end of the Cold War, the reduced threat of nuclear war, the spread of democracy and respect for human rights, and the move toward market liberalization and economic freedom, are threatened if recent economic trends continue.
It is only through strong leadership by the United States, from both the Administration and Congress, that these threats can be averted. However, there are troubling signs of a lack of will to assert this leadership, and even signs that America is turning protectionist and isolationist. We recognize that there are important differences between the parties on a number of issues, but in the current serious situation, the overall national interest must come first.
Therefore, we call upon members of both parties to work together in a bipartisan fashion to reassert strong U.S. leadership in the world and to make a serious commitment to help stabilize the world economy. In particular, there are four important actions that need to be taken now to help stabilize the world economy and to demonstrate that the United States will not abdicate its leadership role.
- First, Congress and the Administration must provide the full $18 billion of U.S. funding for the International Monetary Fund, which is integral to containing the international financial crisis. Because the IMF is a multilateral institution, it alone has the ability and authority to provide prompt, substantial, apolitical assistance, containing damage from financial shocks, while imposing strong conditions regarding domestic economic and governance reforms to help prevent future crises. Important reforms are needed both in the IMF and, more broadly, in the international financial system. However, we should not abandon the IMF; rather, we must seek to support the fundamentally sound mission of the IMF while concurrently seeking needed reforms in its operations.
- Second, the Administration should support congressional efforts to renew the President's fast track trade negotiating authority. The United States has been the world's strongest advocate of economic liberalization; passage of fast track will demonstrate our continued commitment to that goal. The Asian crisis raises a strong risk that affected countries will backslide on their open market reforms, including by raising barriers to U.S. exports. Failure to pass fast track will increase this risk by demonstrating that the United States has itself lost its commitment to open markets.
- Third, Congress and the Administration must reform the use of unilateral economic sanctions as a foreign policy tool. Unilateral sanctions almost never work and in fact are usually counterproductive. In effect, they hold U.S. exporters and workers hostage in a vain attempt to coerce changes on other countries. U.S. sanctions policy needs a serious reengineering to ensure that unilateral sanctions are used only in appropriate circumstances and in an appropriate manner. Prompt passage and implementation of the Sanctions Reform Act currently under consideration would be a big step in the right direction.
- Fourth, we strongly encourage the Federal Reserve to lower interest rates. In addition, the President, Congress and the Federal Reserve should work with our international trading partners to stimulate their domestic economies.
These four actions alone will not bring the world back to economic health; however, they will help significantly both through their direct effect and, just as importantly, the indirect effect of indicating that our nation intends to remain the world's economic leader. The American people are depending on their leaders to put aside partisanship and to work together, now, before it is too late, to further our rational interests.
Sincerely,
F. Duane Ackerman
President & CEO
BellSouth Corporation
Roger G. Ackerman
Chairman & CEO
Corning Incorporated
William F. Aldinger
Chairman & CEO
Household International, Inc.
Hans W. Becherer
Chairman & CEO
Deere & Company
Riley P. Bechtel
Chairman & CEO
Bechtel Group, Inc.
Peter I. Bijur
Chairman & CEO
Texaco Inc.
Robert H. Bohannon
Chairman, President & CEO
Viad Corp
Lawrence A. Bossidy
Chairman & CEO
AlliedSignal Inc.
Crandall C. Bowles
Chairman, President & CEO
Springs Industries, Inc.
M. Anthony Burns
Chairman, President & CEO
Ryder System, Inc.
Robert N. Burt
Chairman & CEO
FMC Corporation
Lewis B. Campbell
President & CEO
Textron Incorporated
Philip J. Carroll
Chairman & CEO
Fluor Corporation
Donald J. Carty
Chairman, President & CEO
AMR Corporation
Paul W. Chellgren
President & CEO
Ashland Inc.
David A. Coulter
President & CEO
BankAmerica Corporation
A.W. Dahlberg
Chairman, President & CEO
The Southern Company
Michael T. Dan
President & CEO
The Pittson Company
George David
Chairman, President & CEO
United Technologies Corporation
Richard K. Davidson
Chairman & CEO
Union Pacific Corporation
D.H. Davis, Jr.
Chairman & CEO
Rockwell International Corporation
Robert J. Eaton
Chairman, President & CEO
Chrysler Corporation
D.T. Engen
Chairman, President & CEO
ITT Industries, Inc.
Thomas J. Engibous
President & CEO
Texas Instruments Incorporated
William T. Esrey
Chairman & CEO
Sprint Corporation
Melvyn J. Estrin
Chairman & CEO
Avatex Corporation
Melvin R. Goodes
Chairman & CEO
Warner-Lambert Company
Joseph T. Gorman
Chairman & CEO
TRW Inc.
Maurice R. Greenberg
Chairman & CEO
American International Group, Inc.
Donald W. Griffin
Chairman, President & CEO
Olin Corporation
Thomas C. Hays
Chairman & CEO
Fortune Brands, Inc.
Charles L. Henry
Chairman, President & CEO
Johns Manvilee Corporation
Richard Korpan
President & CEO
Florida Progress Corporation
L. Dennis Kozlowski
Chairman & CEO
Tyco International Ltd.
Ralph S. Larsen
Chairman & CEO
Johnson & Johnson
Raymond W LeBoeuf
Chairman, President & CEO
PPG Industries, Inc.
Charles R. Lee
Chairman & CEO
GTE Corporation
H. William Lichtenberger
Chairman & CEO
Praxair, Inc.
Harold McGraw, III
President & CEO
The McGraw-Hill Companies
W. Craig McClelland
Chairman & CEO
Union Camp Corporation
Dana G. Mead
Chairman & CEO
Tenneco
Jack L. Messman
Chairman & CEO
Union Pacific Resources
Ernest S. Micek
Chairman, President & CEO
Cargill, Inc.
Paul M. Montrone
President & CEO
Fisher Scientific Int'l, Inc.
Robert J. O'Toole
Chairman, President & CEO
A.O. Smith Corporation
Richard E. Olson
Chairman & CEO
Champion International, Corporation
James L. Pate
Chairman, President & CEO
Pennzoil Company
John E. Pepper
Chairman & CEO
The Proctor and Gamble Company
Lawrence Perlman
Chairman & CEO
Ceridian Corporation
James E. Perrella
Chairman, President & CEO
Ingersoll-Rand Company
Paul A. Allaire
Chairman & CEO
Xerox Corporation
W. Wayne Allen
Chairman & CEO
Phillips Petroleum Company
C. Michael Armstrong
Chairman & CEO
AT&T
Keith E. Bailey
Chairman, President & CEO
The Williams Companies, Inc.
William E. Bradford
Chairman & CEO Dresser Industries, Inc.
John S. Brinzo
President & CEO
Cleveland-Cliffs, Inc.
John H. Bryan
Chairman & CEO
Sara Lee Corporation
David L. Burner
President & CEO
The BFGoodrich Company
Duane L. Burnham
Chairman & CEO
Abbott Laboratories
Jerry D. Choate
Chairman & CEO
Allstate
Vance D. Coffman
Chairman & CEO
Lockheed Martin Corporation
Philip M. Condit
Chairman & CEO
The Boeing Company
E. Gary Cook
Chairman, President & CEO
Witco Corporation
A.D. Correll
Chairman & CEO
Georgia Pacific Corporation
William L. Davis
Chairman & CEO
R.R Donnelley & Sons Company
Earnest W. Deavenport, Jr.
Chairman & CEO
Eastman Chemical Company
Kenneth T. Derr
Chairman & CEO
Chevron Corporation
Livio D. DeSimone
Chairman & CEO
3M
John T. Dillon
Chairman & CEO
International Paper Company
E. Linn Draper, Jr.
Chairman, President & CEO
American Electric Power Company, Inc.
George M.C. Fisher
Chairman & CEO
Eastman Kodak Company
Donald V. Fites
Chairman & CEO
Caterpillar Inc.
H. Laurance Fuller
Chairman & CEO
Amoco Corporation
Christopher P. Galvin
CEO
Motorola Inc.
Samir G. Gibara
Chairman, President & CEO
The Goodyear Tire & Rubber Company
Harvey Golub
Chairman & CEO
American Express Company
Charles O. Holliday
President & CEO
DuPont Company
Peter S. Janson
President & CEO
ABB Inc.
Michael H. Jordan
Chairman & CEO
CBS Corporation
James P. Kelley
Chairman & CEO
United Parcel Service of America
Charles F. Knight
Chairman & CEO
Emerson Electric Company
Lester B. Knight
Chairman & CEO
Allegiance Corporation
George A. Lorch
Chairman & CEO
Armstrong World Industries, Inc.
Vernon R. Loucks, Jr.
Chairman & CEO
Baxter International, Inc.
Robert V.D. Luft
Chairman & Acting CEO
Entergy Corporation
John A. Luke, Jr.
Chairman & CEO
Westvaco
John B. McCoy
Chairman & CEO
Banc One Corporation
Richard A. McGinn
Chairman & CEO
Lucent Technologies
Robert S. Morrison
Chairman, President & CEO
The Quaker Oats Company
Leo F. Mullin
President & CEO
Delta Air Lines, Inc.
Terrence Murray
Chairman & CEO
Fleet Financial Group, Inc.
Frank N. Newman
Chairman & CEO
Bankers Trust New York Corporation
Lucio A. Noto
Chairman & CEO
Mobil Corporation
Richard B. Priory
Chairman & CEO
Duke Energy Corporation
Philip J. Purcell
Chairman & CEO
Morgan Stanley, Dean Witter, Discover & Company
Lee R. Raymond
Chairman & CEO
Exxon Corporation
H. John Riley, Jr.
Chairman, President & CEO
Cooper Industries, Inc.
Robert Ripp
Chairman & CEO
AMP Incorporated
Jean-Pierre Rosso
Chairman & CEO
Case Corporation
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