WASHINGTON — House Republican leaders easily put down a revolt within the ranks Thursday, turning back a campaign to shut off the Clinton Administration's $20-billion aid package for Mexico.
Rebel Republicans who oppose using American tax dollars to bolster the Mexican economy could not get the votes among the GOP rank and file to force the issue to a debate on the House floor.
The rebels had sought the support of the 230-member House Republican Caucus for an attempt to pry the proposal from the grasp of the House Banking and Financial Services Committee, where it has been bottled up because Rep. Jim Leach (R-Iowa), the chairman, favors the U.S. assistance.
The outcome of the vote and later debate in the Senate suggested that passions about financial aid to Mexico are beginning to cool since President Clinton established the program two months ago.
The Senate on Thursday debated but was eventually expected to turn down a proposal to require congressional approval of any foreign assistance program or currency bailout that would cost more than $5 billion a year--the worth of aid already sent to Mexico.
The White House and Treasury are to send Congress by April 6 documents demanded by the Banking Committee tracing development of the Mexican peso crisis and the Administration's response to it.
Failure to deliver the papers, once promised by March 15, has caused repeated delays in the congressional inquiry. Now there is little likelihood that opponents will be able to reverse the program because Republicans clearly are stepping back from the idea, and aid from the U.S. Treasury is already flowing to Mexico.
Under the Clinton plan, endorsed by leaders of both parties in Congress, the United States is giving Mexico a $20-billion package of U.S. loans and loan guarantees--federal assurance to private lenders that they will be repaid by the U.S. Treasury if Mexico defaults. That action was taken on presidential authority. No congressional approval was required.
Contributions from the International Monetary Fund, other international institutions and other countries bring the total value of the program to almost $50 billion.
In another development, the deputy governor of Banco de Mexico said the central bank would slash its loans to commercial banks by more than 80% this year as part of efforts to curb inflation.
Ariel Buira Seira, the bank official told Associated Press that Mexico's inflation rate, running higher than 30% this year, can be expected to reach its peak in April. "Given a strong fiscal position and tight monetary policy, inflation can be expected to decline very quickly," he said.
Mexico last year ran up a $28-billion trade deficit that contributed to the peso's collapse. Yet because of the weak peso that deficit has been largely eliminated--mostly at the expense of U.S. exports to Mexico. In addition, the tight money policy is causing high inflation that is dampening consumer spending.
Meanwhile, Mexico announced a 12% increase in its minimum wage, effective Saturday. A 10% hike had been expected. The wage floor was raised by 7% in January, but the increases still leave the least paid Mexican worker earning less than $3 a day.