THE PRESIDENT NEEDS ADVICE ON SOVIET AID — BUT FROM OTHER THAN LIKE-MINDED CONGRESSMEN

(Washington, D.C.): Even as President
Bush was announcing his decision to grant
yet another $1.5 billion in
taxpayer-underwritten aid to the Soviet
central authorities, two senior
legislators were calling on him to
institute at once a consultative
mechanism with congressional leaders to
determine future U.S. assistance policies
and priorities toward the former USSR.

The Center for Security Policy
believes that it is obvious from this
most recent presidential decision — to
say nothing of those that preceded it
whereby Moscow center received $2.8
billion in credits over the previous
eleven months — that President
Bush desperately needs sound advice on
the conduct of U.S. relations with key
republics of the erstwhile Soviet Union.
In the absence of such advice, he seems
determined to continue to pursue an
approach that is certain to estrange the
Soviet people insofar as it helps to prop
up the reconfigured residue of their
oppressors.

The needed course correction should
not be confused, however, with the effort
apparently envisioned in the most recent
aid allotment, one aimed at producing the
appearance of a less exclusive
relationship with Moscow center and more
direct ties with the republics. After
all, according to Secretary of
Agriculture Edward Madigan, none
of the credits being supplied under this
arrangement will be provided directly to
individual republics. Instead,
they will all be made to through a
mechanism — the Inter-Republic Committee
— which even Secretary Madigan
acknowledges is a “creature of the
central government” and
Vneshekonombank (V-Bank), the center’s
foreign trade bank.

If the President were properly
advised, he would, instead, be explicitly
directing that economic and foreign
policy ties be established forthwith with
those republics making real
strides toward democracy and free
enterprise — i.e., Russia and Ukraine.
These two republics alone comprise the
vast preponderance of the former Soviet
Union’s GNP, population, natural
resources and other assets.

Unfortunately, there appears very
little likelihood that President Bush
will receive such advice from the sorts
of people Senators David Boren (D-OK) and
Richard Lugar (R-IN) presumably have in
mind for their bipartisan consultative
mechanism. Indeed, the advocates for
parochial special interests who generally
hold ranking positions on relevant
congressional committees can safely be
expected to tell the President what he
wants to hear: It is okay to expose U.S.
taxpayers to multi-billion dollar losses
in order to subsidize a handful of
politically influential agribusiness,
banking, energy and other interests
anxious to obtain risk-free profits from
business done with a bankrupt Moscow
center.

Instead, the Center for Security
Policy believes that the President must
take counsel from others, more
representative of the American people and
their collective interests. He should,
for example, make Sens. Bill Bradley
(D-NJ), Dennis DeConcini (D-NM), Pat
Leahy (D-VT), Malcolm Wallop (R-WY), Bill
Cohen (R-ME) and Thad Cochran (R-MS) and
Reps. Charles Schumer (D-NY), Steny Hoyer
(D-MD), Chris Cox (R-CA), Jon Kyl (R-AZ),
Bob McEwen (R-OH) — among others — part
of any consultations in which he may
engage with Congress.

The Center also believes that the
first orders of business for such
consultations should include the
following:

• Assessing the legality of
  the Bush Administration’s
  decision to extend billions in
  taxpayer-underwritten credit
  guarantees to an obviously
  uncreditworthy sovereign borrower
  — like Moscow center — when the
  Farm Act of 1990 explicitly
  prohibits such transactions.
• An investigation of the
  Administration’s assessment that it
  is sufficient to meet the
  statutory test of
  creditworthiness by merely
  identifying an obligor
  (i.e., the reconfigured center’s
  Inter-Republic Committee and
  V-Bank) rather than determining
  that there is a reasonable
  assurance of repayment.
• The advisability of
  maintaining a legislative ceiling
  of $300 million on allowable
  Eximbank credit exposure
  to the former USSR at least
  until such time as modalities are
  established for direct financial
  flows to “qualifying”
  republics that can meet
  stand-alone creditworthiness
  tests.
• The need for congressional
  hearings on the wisdom and
  modalities of any further attempt
  to raid the defense budget for
  the purpose of providing
  ill-defined Soviet defense
  conversion and similar schemes
  prior to any renewed
  consideration of this issue by
  the Congress.