Message To Moscow: The Jig Is Up; Bipartisan Leaders Warn Against Unsound Loans

(Washington, D.C.): In an ironic
twist, a resolution passed yesterday by
the U.S. Senate — which was intended to
encourage the Bush Administration to
provide another $1.5 billion in
taxpayer-subsidized credits to an
unreformed, repressive Soviet Union —
sent an altogether different message to
both the White House and the Kremlin.
While the resolution offered by Minority
Leader Robert Dole (R-KS) was ultimately
approved, it was obliged to undergo
radical revamping to reflect the
widespread misgivings of senators on both
sides of the aisle.

More importantly, the debate
signalled that the mood of the Senate —
and of the country — is moving sharply
away from the “blank-check”
support for the Gorbachev
regime that has characterized recent U.S.
foreign policy and aid decisions toward
the USSR. Importantly, the
chairman of the Senate Agriculture
Committee (Sen. Patrick Leahy of
Vermont), the co-chairman of the Helsinki
Commission (Sen. Dennis DeConcini of
Arizona) and the chairman of the Senate
Finance Committee’s Subcommittee on
Deficits, Debt Management and
International Debt (Sen. Bill Bradley of
New Jersey) all raised serious questions
in their arguments opposing this
proposal. The reservations expressed in
the course of the debate included the
following:

• the poor prospects for
  Soviet repayment of these loans
  which would, in turn, result in
  substantial U.S. taxpayer losses;
• the fact that, under present
  circumstances, such
  assistance to the central
  authorities would be more likely
  to retard than catalyze
  reform in the USSR;
• concerns that such aid
  would not comply with existing
  U.S. laws barring the
  extension of agricultural credits
  to countries unlikely to repay
  them or for foreign policy,
  foreign aid or debt-rescheduling
  purposes.

In light of such concerns, two
leading members of Congress, Sen.
Bradley and Rep. Christopher Cox
(R-CA), have written President
Bush urging that the delegation
he is dispatching to the Soviet
Union tomorrow be charged with
providing a comprehensive
assessment of various issues
relating to the proposed
extension of additional credits.
(Copies of the href=”index.jsp?section=papers&code=91-P_38at1″>Bradley
and href=”index.jsp?section=papers&code=91-P_38at2″>Cox
letters are attached.)

“Given Moscow’s plummeting
creditworthiness, it would be
unconscionable for the Administration to
proceed with other than fully
collateralized taxpayer credit guarantees
for grain or other U.S. exports to the
Soviet Union,” said Roger W.
Robinson, Jr., Center Board member and
former chief economist of the National
Security Council. “Yesterday’s
debate on the Senate floor established
historically important milestones against
which Soviet economic, financial, and
political performance will henceforth be
judged.”