Statement of Administration Policy: S. 1639 - Gold Bullion Coin Act of 1985

(House)
(Exon (D) Nebraska and 16 others)

The Administration supports enactment of legislation that would authorize the Department of the Treasury to mint and issue gold coins; however, the Administration strongly recommends that S. 1639 be amended in several respects. Accordingly, the bill should be amended before it is brought up on suspension, or, if it is not, it should be removed from the suspension calendar altogether. The Administration would have no objection to House passage of S. 1639, if amended as discussed below.

Two especially important amendments would permit the Secretary of the Treasury to (1) use gold from non-United States sources in the production of gold coins, to the extent required by international agreements to which the United States is a party and (2) use gold held in the United States' reserves in production of the coins, without regard to whether gold from other sources is available. With respect to the first amendment, United States trading partners will consider that section 2(c) of S. 1639 is in direct contravention of the United States' obligations under the Agreement on Government Procurement, negotiated under the auspices of the General Agreement on Tariffs and Trade, which was implemented by the Trade Agreements Act of 1979. The Administration's amendment would allow firms from countries signatory to the Agreement, such as Canada, to bid on contracts to provide gold for coins; it would not permit firms from non-signatory countries, such as South Africa and the Soviet Union, to bid on these contracts. Regarding the second amendment, section 2(c) of the bill does not give the Secretary of the Treasury sufficient discretion to use gold held in the United States' reserves in producing gold coins. The Treasury Department estimates that the use of gold in the reserves could, over the next ten years, increase revenues to the Federal Government by up to $5 billion, while saving between $400 million and $500 million in interest payments over the same period.