New Braunfels Herald Zeitung (Newspaper) - January 13, 1983, New Braunfels, Texas
Hold the pesos...
El Paso McDonald's now 'dollars only'
EL PASO (AP) — With Mexico mired in its worst economic crisis since World War I, McDonald’s restaurant off El Paso’s San Jacinto Plaza has quit taking pesos from patrons buying burgers and fries.
“Until the time the peso stabilizes, we’re just not going to accept them,” says McDonald’s area supervisor Al Weber.
About half of McDonald’s business in this far West Texas city has come from peso-carrying patrons, but three devaluations last year forced the fast-food restaurant to stop accepting pesos at the counter, he said.
“Too risky. We’d take a loss (when the peso fell against the dollar),” Weber said.
Since December, the peso has temporarily settled at about 149 to the dollar, making it worth 16 percent of what it was a year ago when 26 pesos bought a dollar.
With inflation in Mexico averaging 14 percent last month — an average of 168 percent annually — many businesses whose clientele can pay in pesos or dollars take only dollars.
In I^aredo, another Texas border town.
banks haven’t taken pesos since last summer.
“It’s still hard to get rid of pesos," said Laredo National Bank clerk Sandra Lewis. “It’s not worth it.”
What had been worth the effort was currency traders who plied the streets of El Paso last year offering black market rates up to 50 percent better than those found across the border in Juarez.
But since December's devaluation, when the peso sank to 149 per dollar, black market trading in El Paso and along the 1,760-mile U.S.-Mexico border has nearly vanished.
Valuta Corp., a currency trading store open around-the-clock in two locations on the El Paso side of the border, still attracts tourists who want pesos before they venture into Mexico.
But in Juarez, whose banks, restaurants and curio shops offer the same exchange rates as in El Paso, there’s no need to worry about carrying different currencies, locals say.
“You can pay us in dollars or pesos It
makes no difference- it’s the same rate,” says Alonzo Flores, manager of the Florida Restaurant.
Dollars are preferred by Juarez businessmen who predict the peso may fall to 200 to the dollar because of softness in the world’s oil prices. Any drop in the price per barrel hastens the decline in Mexico’s oil revenues and hampers their recovery efforts, officials say.
With at least a month's worth of stable peso prices, though, some peso-carrying patrons are eyeing goods in El Paso again.
I Kist year, seven South El Paso businesses who depended on cross-border trade for most of their sales closed.
Wednesday, CfUillermo Aragon Montes eyed a ring in Sheldon’s Jewelry store, which has resumed accepting payments in both currencies.
At S125 or the equivalent in pesos, Montes said the gold ring was still out of reach, but added: “At least I know my pesos can start buying something here again.’’
Reagan looking at $2.50 wage for teenage worker
WASHINGTON (AP) - President Reagan, seeking to make a dent in unemployment, will propose legislation allowing employers to pay teen-agers less than minimum wage for summer jobs, administration sources say.
Reagan embraced the “sub-minimum wage” option at a meeting of his Cabinet Council on Economic Affairs Wednesday, and will propose the change in his Jan. 25 State of the Union address, said these sources, who declined to be named publicly.
Administration sources said the “youth differential” — which would permit payment of $2.50 an hour instead of the current $3.35 minimum wage rate — could provide summer work for as many as 600,000 youngsters between the ages of 16 and 20.
Teen-age unemployment hit a record 24.5 percent in December with more than 2 million young people officially listed as jobless. Overall, more than 12 million
people were out of work as the unemployment rate hit 10.8 percent.
Meanwhile, Treasury Secretary Donald T. Regan said Wednesday he had proposed an income tax surcharge to the president as part of a list of tax increases that would be triggered into effect after Oct. 1,1985, if the government’s deficits continued to run too high.
Regan would not divulge the other items on the list, but administration sources said an energy tax package was another leading option.
The sources, who did not want to be identified by name, said they expect the president to include the contingency tax plan in his fiscal 1984 budget due out Jan. 31. But which specific tax Reagan would choose was still up in the air Wednesday, they said.
The president continues to oppose any major new taxes in 1983 and 1984 to narrow record deficits expected in the $200 billion-a-year range, contending it is bad
economic policy to raise taxes during a recession or at the start of a recovery.
For several weeks, the administration had been considering a host of options for dealing with unemployment evidently to counter a push by congressional Democrats and organized labor for massive public works programs.
The sources did not divulge what other employment proposals Reagan may have endorsed. The administration, however, already has supported extension of the Federal Supplemental Compensation Act. an emergency unemployment compensation program allowing up to 16 w eeks of additional jobless benefits for eligible recipients.
Among the other options that have been under consideration are granting tax credits to businesses that hire unemployed workers who have exhausted jobless benefits and slowing the phase-out of unemployment benefits for people who accept part-time w ork
Only handful protest House rule changes
Gib Lewis gains power
AUSTIN (API- Rep. Carlyle Smith says the East Coast has preppies, the West Coast has groupies and the Texas House has “teamies.”
And Smith, leader of a tiny group of House dissidents, found out Wednesday he is far outnumbered by those teamies, loyal to new Speaker Gib Lewis, D-Fort Worth.
Lewis won House approval — by a vote of 142-1 — for a rules package that gives him new powers, including the right to make all appointments to the powerful House Appropriations Committee and to fire committee chairmen.
“I question whether this is any type of omen for anything,” l^wis said after the House demolished Smith’s attempts to shoot down the speaker’s proposed rules.
Smith, D-Grand Prairie, and Milton Fox, R-Houston, found little support on the House floor Wednesday for
their anti-l^ewis efforts Smith and Fox were the only two members who voted against l^ewis for speaker on Tuesday.
Smith told the House’s 45 new members to steer clear of being a teamie, bound to voting according to Lewis’ wishes. Smith demonstrated the “teamie salute.”
“You’ve got to hold your nose and you got to put your hands on your eyes," he said, adding the salute is not perfect because “you just got two hands.”
“That’s what the (speaker’s) lieutenants are for. They can come plug up your ears,” he said.
Rep. Paul Moreno, D-El Paso, also argued against lewis’ proposal giving the speaker the right to appoint all appropriations committee members. For the past IO years, half the committee was picked by seniority and half was selected by the speaker.
Moreno said the
change was made in 1973 to end th** “corruption era in the House.”
“Now I am seeing these things eroded.” he said. “Gib Lewis and I are friends ... but (Jib Ia?wis did not serve during the corruption era. What you are doing today is you are going back and giving the speaker all sorts of power, power that you will not be able to eliminate.
“I^et me tell you that corruption was easy and you’re getting right back to it without knowing about it." he said.
Moreno, one of the four who voted against lewis’ rules package, said the seniority system is the only way for him to retain his seat on the committee.
“You and I know that the chances of my getting on the appropriations committee is like me climbing a telephone post,” said Moreno, a wheelchair-bound cripple who was
present but did not vote in the speaker election Tuesday.
Rep. Charles Evans, D-Hurst. said the Lewis' system would provide for more “continuity'' in the budgeting process by filling the appropriations committee with representatives from other important committees.
The House voted lM-8 iii favor of the Lewis plan for the appropriations committee. Smith was unable to draw more than 26 votes for any of his amendments to lewis’ plan, and more often got only seven or eight members to vote w ith him.
Lewis said the seniority system for the appropriations committee “just wasn’t
He said the rule allowing him to fire committee chairmen is “no big deal," adding that the speaker should have the right to fire chairmen who don’t do their jobs. I a*w is said he did not “envision” ever removing a chairman, and would not use the power as a weapon to punish opposition.
Fox is anticipating some punishment for his anti-I awls efforts.
“I’m reasonably sure I won’t be a chairman or a vice-chairman or a member of the appropriations committee,” lie said “On the other hand, he might want to demonstrate how fair he is. You never know ."
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Here, in capsule form, is what happened in the Texas Legislature on Wednesday:
— Speaker Gib Lewis successfully pushed through a new set of House rules that give him more power than former Speaker Bill Clayton had, including the authority to appoint all members of the House Appropriations Committee and to fire committee chairmen.
— House members voted to
invite Republican Gov. Bill Clements to speak to the legislature on Thursday, but not without some frisky “boos” and shouts of objection from the mostly Democratic group, which were ignored by the speaker. Clements will deliver his “state of the state” speech Thursday at ll a.m. to a joint session, and the House invitation was a formality.
— The Senate did not meet Wednesday.
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