To amend the Internal Revenue Code of 1986 to make permanent the residential energy efficient property credit.

With a heavy heart, I rise in opposition to this rule and the Wall Street rescue bill. Why? The key provision added over the weekend amounts to a huge elephant galloping over the American people with its blank check to Wall Street. In exchange, the American people get to cling to fool's gold--a few billion dollars to cities and States which are facing hundreds of billions of dollars of loss. Ohio alone needs the total amount of meager funds allocated to workouts. Sadly, less than one percent of the assistance in this bill is targeted to those local communities! We need a bill that strengthens each community's real estate values through Federal bond guarantees to them, not to the big investment banks and uninsured housing enterprises that caused this problem in the first place. I thank the gentleman very much for yielding.

Introduction

President Franklin Roosevelt aptly gave a name to the Wall Street financial manipulators who, time and again, put our nation in enormous financial peril. He called them ``malefactors of wealth''-- ``malefactors,'' from the Latin ``mal'' meaning ``bad,'' and ``factor,'' meaning ``makers'' . . . makers of bad. That is, people who do great harm with the use of wealth.

As a scion of old wealth himself, Roosevelt knew them well. He knew the lengths to which

they would go to satisfy their cravings for more, and more, and more-- as if reason and prudence didn't apply. And they did not care who they ran over in their quest. Their deeds have placed our nation at risk, time and again. Now, with the mortgage foreclosure crisis, they have done it again--this time, the damage is so huge it dwarfs the savings and loan fiasco of the 1980's when they ponzi-schemed up housing markets, saw them crash, and then ran to Congress to bail them out. Back then, the perpetrators centered their attention on California, Texas, Arizona, and the hot housing markets. Yet all Americans, from all states--like Ohio which was not one of the epicenters of their gluttony--were forced to pay the bills for their bad deeds.

Today, Congress will vote to burden the American people with another blank check, totaling hundreds of billions of dollars lasting three generations, to Wall Street brokerages and the shareholders of Freddie Mac and Fannie Mae. It is times like this that my heart feels very heavy for my fellow countrymen and women, as I cannot save us from this wrongful debt being imposed. This bailout of Wall Street giants never had a hearing in Committee.

Why should our people be made to pay for them? What will our communities get for this added, massive debt obligation?

The Legislation

The Foreclosure ``Rescue'' bill we're being asked to vote on today won't live up to its name. I challenge any Member to tell me how much help your district will receive from this trickle down to turn around local housing markets. This bill does not measure up to the challenge

The Congressional Budget Office under estimates that the bailout package will cost the American public $25 billion. This estimate isn't a good indication of the potential cost since $25 billion is just an estimate based on many faulty assumptions. The potential cost to the public actually is several hundred billion dollars. Fannie Mae and Freddie's current debts total $5.2 trillion, which equals our national debt of $5 trillion.

The fig leaf offered--and that our communities are clinging to is the promise of a mere $4 billion in community aid plus $10 billion for state housing authorities to counteract the nearly $356 billion loss in property values and property taxes in 2007 and 2008. $4 billion doesn't even meet the City of Cleveland's needs; Ohio alone is estimated to need $164.2 billion, just the gap for the state housing authority is $20 billion. With blocks of abandoned, vandalized, and stripped homes to contend with, along with an onslaught of displaced families, our communities are being asked to do more than ever, with fewer and fewer resources.

This bill asks taxpayers to issue a blank check with the words ``stand by authority''--to Wall Street--for the first time to federally uninsured investment houses and secondary market housing agencies. This critical provision never went through Committee, there were no hearings. This was a Boardroom deal.

The former head of Goldman Sachs is now the Secretary of Treasury under a Republican administration; under the former Democratic administration, the Secretary of Treasury was from Goldman Sachs. Just this week, Goldman Sachs' top banker, Ken Wilson, will take a leave from his job there to join his former boss at Treasury, Secretary Paulson. Who's running whose show here? Is Treasury serving the American people or simply Goldman Sachs, IndyMac Bank, and Bears Stearns?

Further, under this bill the Department of Treasury that failed to regulate, examine, and audit is now going to be given even more power to create another bureaucracy to regulate the Department that didn't regulate. This house of cards only gets more topsy.

Last year, Freddie Mac Chairman and Chief Executive Richard Syron received $19.8 million in compensation--even though the company's stock lost half its value. During the same period, Fannie Mae President and Chief Executive Daniel Mudd was paid $12.2 million, including a $2.2 million bonus. But curbing their excess doesn't even come close to offsetting the huge debt this bill anticipates for the American people.

Our cities are left holding the bag, yet the greedy corporations that blew through town are being made whole. Meanwhile, homeowners have lost decades of savings and equity. Once tight-knit communities are left shattered, shuttered, and dangerous. In order to make things even worse, big banks like Citigroup are now plundering our local communities even more by offering land contracts. How much lower can these banks sink? And yet Congress rewards them?

Savings and Loan Crisis Background

Even worse than the proposed no strings attached bailout is the fact that this is deja vu all over again. The Savings and Loan bailout of the 1980s cost the American taxpayers upwards of half a trillion dollars. The American people were asked to grin and bear it for the good of the Nation. States like Ohio were not among the worst abusers, yet our taxpayers were forced to bear this debt load too.

The savings and loan scandal destroyed an entire class of community banks, moved more power to Wall Street and money center banks, and exploded our public debt. Back then, they told Americans that if they were bailed out, such catastrophes would never happen again. They claimed a new money instrument was being developed by Wall Street called the mortgage backed security. Through its magic, the public would never have to worry again about greedy bankers in the housing market. Your mortgage would be safer, as it would be packaged with others and sold through securities Wall Street would invent, like an anonymous piece of paper.

Meanwhile, face to face community banking, and necessary underwriting and regulation first enacted for home lending in the Great Depression, were destroyed. Financing became more and more hot wired, more absentee, even over the phone and internet. A deluge of promotional materials from the banks arrived at our doorsteps, almost daily, urging mortgagees to borrow more and more against their shrinking home equity, to borrow for almost anything--a vacation, a car, to put on a roof. Few cautioned against it, and the debt pushers pushed on.

Home values inflated beyond their worth. But the regulators, like FNMA and Freddie, the OTS and FDIC stood frozen in place. The mortgage itself--which is a debt that must be repaid--was rolled up and packaged with thousands of other mortgages and, as America itself is in debt, sold into the international market for the first time to foreign buyers. Try to work out a loan when your financier is located in China.

Sadly, their entire modus operandi is an old trick--create a house of cards with money by pushing risk beyond what can be considered prudent, leverage the money pyramids where the underlying asset is purposely poorly appraised, and voila--the perpetrators make billions until the market they have created busts. Then blame the American people and run to Congress to close the gap by borrowing, borrowing, and borrowing from the very people they thought so little of. Oh yes, and then, blame the whole washout on ``them,'' the public.

Wall Street's money grabbers are back, this time stretching their long arms even deeper into your pockets to cover their latest craze-- draining out our home equity and home values. Americans have built their equity over decades in their mortgages. Yet Wall Street set its sights on families' home equity, and went after it with a vengeance. It was the only major savings pool America had left other than our public assets like roads, water systems, and public works. Millions of families succumbed to the snake oil.

Overall, home equity in our nation, our largest source of savings-- has now dipped below fifty percent for the first time in modern history. Millions of Americans have negative equity in their homes, they own more on their homes than their homes are worth.

So, to fill the gap, Wall Street wants the American taxpayer--the people they bilked--to bail them out, again. Bear Stearns succeeded to the tune of $30 billion. So now there is a longer line of bankers lined up to prop up their profligacy. This bill legitimizes their behavior and gets crumbs in return for the American people. The malefactors wealth manipulated and created panic in the market. They got the Bush Administration to propose an ``emergency'' bailout plan. And then they got Congress to ``limit'' executive pay as a fig leaf to cover over their real motherload in this bill. Not a bad bit of insider dealing.

But what about the American people? What about their interests?

Meeting the Needs and Strengthening of Our Communities

Let's get something real for the taxpayer. And let's get it now. As the Economist proposed this week, Fannie Mae and Freddie Mac could issue their own debt and exchange it for loans from the government-- this way, our taxpayers who are on the hook at least get something if markets recover. Otherwise, all this bill does is hand over the U.S. Mint to Wall Street.

I ask any Member: how much of this bill is going to your district relative to what it is going to cost to turn your local real estate market around?

If you don't know the details, you shouldn't vote for the bill.

And how do you know when the help will arrive? This bill is a trickle down from Wall Street; communities across this nation will be left holding an empty bag.

Our communities need expanded bonding power at the grass roots, not more rewards for Wall Street brokers who got us into this sorry situation in the first place.

We need trickle up, not trickle down.

Our communities need expanded bonding power at the grassroots level to raise the funds to combat this crisis, not more rewards to the very institutions and people who created this mess.

I have a better idea. Rather than Congress vowing to borrow more money--plus interest--from the American taxpayer for three generations to come, to make Wall Street whole, why not instead design a refinancing approach that benefits the taxpayer, and the communities they live in? Rescue local real estate markets. Give the bulk of assistance there. Let any refinancing medium reach deep into every affected community across this country. Stop the hemorrhage. Accelerate workouts now to save real estate values from plummeting even further-- including on families who own properties that had nothing to do with this ponzi scheme.

Strengthen each community's real estate values through federal bond guarantees to local countries and cities, not Wall Street. Empower local people. Empower local housing authorities' ability to respond. Democratize this bond offering. The largesse of the American people should not trickle down from the big bond houses on Wall Street who caused the problem, traffic in debt, and operate far from home. The bill being proposed in Congress is weighted WAY too heavily in their favor. For affected localities, less than 1 percent of this proposed aid is targeted to them; Wall Street gets the lion's share. Imagine a bill that strengthens local real estate markets NOW, and into the future through additional federal bond guarantee authority to those same communities. The ability of hundreds of affected jurisdictions to do refinancing and workouts will be direct, local and not just through Wall Street. Direct support to localities should be at a level commensurate with the scale of the foreclosure crisis--not just one percent of the largesse while Wall Street cleans up.

Conclusion

This approach makes sense as real estate markets are local. There is a greater likelihood that units will be turned around more responsibly and expeditiously at the local level. Wall Street is too far away. And they are already hawking their disgusting ``land contracts'' to move foreclosed units which are further blighting troubled neighborhoods.

Let's democratize this bond offering in community after community. Let's not give it away to the same Wall Street crowd that bleeds us time and again, but pays us no respect. Franklin Roosevelt understood the difference between money and wealth. He was about creating wealth in community after community, household after household, not letting Wall Street raid us dry. This Congress should remember how his policies built a middle class. We should champion that democratic vision of capitalism. It's long overdue. As this bill moves to the Senate, perhaps someone there will remember what representative democracy is all about and make this a much better bill. My vote is cast for the American people and against the malefactors of wealth.

Addendum

Fannie Mae and Freddie Mac

A Better Approach: Based upon Treasury Secretary Paulson's

emergency announcement and proposal on July 13, 2008, ``The

two companies could issue their own debt and exchange it for

loans from the government--at least the American people might

yield something rather than giving wall street the equivalent

of having access to the printing press.'' (Source: The

Economist, July 19th-25th, 2008)

Additional Facts: According to a Federal Reserve economist,

because the U.S. government has essentially guaranteed Fannie

Mae and Freddie Mac's debt, the ability of home buyers to

borrow has remained difficult, while the savings Fannie and

Freddie have realized--about $79 billion--instead went

straight to their shareholders. (Source: The Economist, July

19th-25th, 2008)

Current regulation, ``allowed Fannie and Freddie to operate

with tiny amounts of capital. Their capital reserves (as

defined by the regulator, Office of Federal Housing

Enterprise Oversight [OFHEO]) of $83.2 billion at the end of

2007 supported $5.2 trillion of debt and guarantees, a ratio

of 65 to one.'' Imagine if a household earned $83,000 a year

and was able to borrow $5.2 billion on that salary.

In 1998 Freddie Mac owned $25 billion of other securities,

according to OFHEO and by the end of 2007 it had $267

billion. Fannie Mae's outside portfolio grew from $18.5

billion in 1997 to $127.8 billion at the end of 2007. This

shift in investing in outside securities does not meet Fannie

and Freddie's core mission of increasing home ownership.

OFHEO as recently as July 10th said that both Fannie Mae

and Freddie Mac had enough capital.

Freddie Mac lost $3.5 billion in 2007; Fannie Mae reported

a $2.2 billion loss in the first quarter, having lost $2.05

billion in 2007. Each had credit-related write-downs of

between $5 billion and $5 billion last year.

Currently, Freddie Mac only has a market value of $5.3

billion.

On a fair-value basis, Freddie Mac had a negative net worth

of $5.2 billion at the end of the first quarter.

fannie mae and freddie mac's debt and foreign ownership

``Paulson said the Fannie and Freddie have issued $5

trillion in debt and mortgage backed securities. Of that

amount more than $3 trillion is held by U.S. financial

institutions and over $1.5 trillion is held by foreign

institutions.'' (AP; Crutsinger, July 22, 2008)

Fannie Mae and Freddie Mac's foreign debt has tripled from

$504 billion in 2001 to $1.5 trillion in 2007. Fannie Mae and

Freddie Mac's $1.5 trillion foreign debt is owned by China

$376 billion, Japan $228 billion, Russia $75 billion, South

Korea $63 billion, and Middle Eastern Oil-Exporters $29

billion. Now, both interest and principal is owed to foreign

bondholders.

The current proposal will allow Bank of America to purchase

Countrywide's portfolio. Then if Bank of America works out a

refinancing, FHA stands ready to insure it. If the owner

fails to make payments, FHA assumes the unit. This is a great

bonanza for Bank of America.

what the legislation needs

A better solution would be to let Fannie Mae and Freddie

Mac issue debt and then exchange that for a government loan.

At least our people would get something back on the upside--

just as America did when Chrysler Corporation was refinanced

through redeemable warrants.

Democratize the bond offerings by diverting some of the

securitized debt that is intended to prop up Wall Street,

Fannie Mae, and Freddie Mac. Direct it to Main Street--our

counties, our cities, our housing agencies and authorities.

Make the approach more equitable to the taxpayer. This

approach allows communities, not only corporations, mega-

banks, and investment houses, to actually own something.

Isn't that a value worth fighting for?

Madam Speaker, by direction of the Committee on Rules, I call up House Resolution 1363 and ask for its immediate consideration.

Madam Speaker, I rise today in strong support. For the purpose of debate only, I will yield the customary 30 minutes to the gentleman from Texas (Mr. Sessions). All time yielded during consideration of the rule is for debate only.

General Leave

I ask unanimous consent that all Members be given 5 legislative days in which to revise and extend their remarks on House Resolution 1363.

I yield myself such time as I might consume.

Madam Speaker, House Resolution 1363 provides for consideration of the Senate amendment to H.R. 3221, the American Housing Rescue and Foreclosure Prevention Act of 2008. The rule makes in order a motion by the chairman of the Committee on Financial Services to concur in the Senate amendment, with the text of the House amendment printed in the Rules Committee report.

The rule provides 2 hours of debate on the motion, with 80 minutes controlled by the Committee on Financial Services, and 40 minutes controlled by the Committee on Ways and Means.

Madam Speaker, I rise today in strong support of the American Housing Rescue and Foreclosure Prevention Act and this rule. Our landmark legislation today throws a lifeline to families who are struggling to maintain the American dream of home ownership during this housing crisis and the economic downturn.

Families across America are being forced to make heart-wrenching decisions in order to stay in their homes. What will they pay for in this day and age, with rising gas prices, property insurance rates escalating, the cost of health care rising? But nothing is more fundamental than having a safe and clean home for your family.

The good news is that many of us in the Congress understand, and we are going to stand up for families and ensure that if you work hard and you play by the rules, the tools and resources will be made available to you to help you stay in your home.

The American people have a number of champions here in Congress that understand the importance of a safe, clean and affordable home. Chairman Barney Frank has spent countless hours in providing the tools necessary for families across this country to have a safe, affordable place to live.

Chairwoman Maxine Waters of California has spent a great part of her career dedicated to affordable housing for American families.

Speaker Pelosi and the Chairwoman of the Rules Committee, Louise Slaughter, are champions of American families and affordable housing as well.

Madam Speaker, today three million to four million families are expected to lose their homes to foreclosure. And when a home in your neighborhood ends up in foreclosure it affects everyone. It is usually sold at a reduced rate, and the values of homes throughout the neighborhood are affected. We have all seen these eyesores with overgrown grass, broken windows and in disrepair.

Well, that is why we are all in this together. It is vital that we fight to maintain the property values of our communities.

Madam Speaker, just a few weeks ago I had my first foreclosure workshop to get families together with lenders to try to get to a point where they could work out their loans. We were very surprised. We had over 600 individuals show up who were either in foreclosure, had fallen a month or two behind, or could see on the horizon, because of an adjustable rate loan or some family circumstance like the loss of a job or the kids going off to college, that they needed a little bit of help.

Well, we have been very active in this Congress because while this is a problem that, yes, critically affects a State like Florida, in the Tampa Bay area that I have the privilege to represent, and it affects California desperately, Ohio, Nevada, no part of the country has been immune from the sub prime lending crisis.

Fortunately, this American Housing Rescue and Foreclosure Prevention Act comes at an important time. But, you know, this Congress has been working on this for over a year and a half. So many of the initiatives contained in this package have been passed by the House of Representatives. This ``New Direction Congress'' has worked, in a bipartisan way, to pass most of the initiatives that are contained in the act today.

Families should know that H.R. 3648, the Mortgage Forgiveness Debt Relief Act, was passed and did become law at the end of last year; passed by a margin of 386-27 here in the House. It provides that over the next 3 years, families who have had to sell their homes in foreclosure will be spared from getting hit by a larger tax bill, in addition to the pain of losing their homes.

There are a number of other critical components in the Housing Rescue Package that were previously passed by the House. And I would like everyone to note, because we will probably hear a great deal of debate here today on the housing package. Everyone should note that almost all the initiatives contained in the bill today were passed over the last year and a half by wide, bipartisan margins.

First, the Neighborhood Stabilization Act. That was approved in May by a vote of 239-188. It provides grants to the States and local governments to purchase and rehabilitate foreclosed properties and turn them into safe, affordable places for folks to live.

And I would like to recognize and thank the White House for removing its veto threat. It had threatened to veto this entire package that had been negotiated with the White House over this small section that provides important tools to our State and local governments to tackle those properties that are up for foreclosure, the ones that are overgrown, that have the broken windows, allows them to go in and purchase those properties and turn them into affordable housing for families who are in need.

The package also includes the important provisions of the Federal Housing Finance Reform Act that we passed in May of 2007 by a vote of 313-104. This is vital legislation today because it establishes new and extensive oversight and regulatory authority over the Federal National Mortgage Association, Fannie Mae, and the Federal Home Loan Mortgage Corporation, Freddie Mac.

To protect the taxpayers, we are instituting new requirements for the safety and soundness of the portfolio operations of these regulated entities. We need to make sure that we have oversight on the effects of the financial and housing finance markets of all these alternatives and provide an alternative to the current secondary market system for housing finance.

Madam Speaker, last September we also passed an important part of this package, the Expanding Home Ownership Act of 2007, by a margin of 348-72 here in the House. This is a critical piece because it expands access to the middle class to the low interest, low fee loans provided by the Federal Housing Administration. These FHA loans are a much better option to the sub prime loans. We are going to take a proactive step here to allow families facing foreclosure to qualify for the

low interest, no fee loans offered by the FHA.

The housing package today also includes the National Affordable Housing Trust Fund Act of 2007. That was passed here in the House last October by a vote of 264-148. This creates a new, innovative fund that will be used to build more affordable housing for hard working families and families who have lost their homes due to foreclosure. The new trust fund will focus on construction, rehabilitation and preservation of affordable housing in our hometowns. It will pool monies to target housing for families with the greatest economic need.

And our efforts come at a critical time if we can get this trust fund up and running. See, the Federal money for affordable housing has largely disappeared under the current administration over the past 7 years.

In many communities like mine, housing agencies have thousands on the waiting list. In my hometown of Tampa, Florida, during a 1-week open enrollment session, more than 10,000 seniors, veterans and families indicated a need for housing. But instead of receiving housing, they are placed on a waiting list, and the waiting list takes up to 4 years, and it is so long that the Tampa Housing Authority is unable to help others that need it.

Madam Speaker, another important part of this housing package is the Mortgage Reform and Anti-Predatory Lending Act of 2007. Yes, we passed this here in the House last November by a vote of 291-127. It requires States to license all mortgage professionals and mandate criminal background checks, requires exams and a ban on felons participating in the mortgage loan industry.

We all know that the predatory lending was rampant during the sub prime loan run up. And I would like to draw your attention to anyone that would like to examine in depth the details of predatory lenders and how they worked. Go to the MiamiHerald.com Web site and review their series on predatory lending that they have run over the past couple of days. It is outstanding.

They reviewed thousands of pages of court documents, State industry reports, internal e-mails, and police reports from 2000 to 2007 and they discovered that over 5,000 people with criminal histories during that time became loan originators, a rate of nearly two a day. Worse, those include over 2,000 who had committed financial crimes such as fraud, money laundering, and grand theft. Too many of our neighbors were outright lied to and steered into unaffordable, exploding adjustable-rate mortgages without being given an option for a fixed rate and are now facing foreclosure which harms their families and all of us in their community.

To accompany this extensive package, what has been added that really has not been voted on by the House today is a request by the Treasury Secretary for new standby authority to buy stock or debt in the GSEs if it is determined that an emergency exists. This is something of an insurance policy against broader losses in the housing market that could bubble up.

Mr. Speaker, our efforts here today are absolutely necessary. Families across this country are depending on us. It's unfortunate that while the House and the new-direction Congress has been focused on affordable housing over the past year and a half and has passed terrific, substantive legislation, that it's taken a few months to get it enacted and passed in the end.

Thanks again to Chairman Barney Frank for headlining our negotiations with the other body and with the White House. And I feel secure that a large bipartisan vote here today will prove that we can stand up and address this housing crisis across this country.

I reserve the balance of my time.

Mr. Speaker, I am privileged to yield 5 minutes to the distinguished chairwoman of the Rules Committee, Ms. Slaughter of New York.

I yield the gentlewoman an additional 1 minute.

Mr. Speaker, I'm very pleased to yield 2 minutes to the gentlewoman from California (Ms. Waters), a champion for affordable housing and America's families.

Mr. Speaker, I'd like to correct the record here because this House of Representatives has been working in a bipartisan way for almost 2 years now on housing legislation. In fact, in my opening statement, I chronicled the number of bills starting last year that have been passed in this House by substantial bipartisan margins and sent over to the Senate where they waited. To say that there's been no opportunity for amendment or debate, that's wholly inaccurate.

Out of this package, it contains at least five or six bills that had committee hearings, extensive hearings, the opportunity for amendment in committee, the opportunity for debate, previous debate, debate on the floor, amendments here on the floor, debate in the Rules Committee.

So I think it's important that the record reflect that reality.

And at this time, I'd like to yield 5 minutes to the chairman of the Financial Services Committee, the gentleman from Massachusetts (Mr. Frank).

I yield the gentleman 30 additional seconds.

Mr. Speaker, we reserve the balance of our time.

Mr. Speaker, at this time I yield 1 minute to the gentlewoman from California (Ms. Lee).

I will have to object to that. I will note that the rule does provide for an extended amount of debate on the legislation, itself.

Mr. Speaker, I yield 1 minute to the gentlewoman from Texas (Ms. Jackson-Lee).

Mr. Speaker, I have the right to close, so I will reserve the balance of my time until the gentleman from Texas has made his closing statement.

Mr. Speaker, I urge adoption of the American Housing Rescue and Foreclosure Prevention Act and this rule, as families across America are in the grips of a housing crisis and it demands expeditious action.

The President of the United States says it's necessary. The Governors in this great Nation say it's necessary, and I will submit their statements into the Record.

Foreclosures are way up, and the options for safe, clean, and affordable housing are down. In my home town of Tampa, Florida, one in 280 homes is in foreclosure. Now, as Rules Committee Chairwoman Slaughter said, we're going to clean up this mess because America's hardworking families are depending on us, but we will also need to follow up and hold those accountable who have created this mess.

Now, the House of Representatives over the past 1\1/2\ years have passed bills to help homeowners avoid foreclosure, provide resources to local communities to build new, safe and affordable housing, and crack down on predatory lenders. It has all come to fruition here today.

Our efforts will keep the American dream of homeownership available to more American families, thanks to the efforts of Speaker Nancy Pelosi, Chairman Barney Frank and Chairwoman Maxine Waters, and the other champions for America's families who are going to continue to side with them, and our commitment to affordable housing and safe and healthy communities.

Mr. Speaker, I urge a ``yes'' vote on the previous question and the rule.

Executive Office of the President, Office of Management

and Budget,

Washington, DC., July 23, 2008.

Statement of Administration Policy

H.R. 3221--Housing and Economic Recovery Act of 2008, (Rep. Frank (D)

Mr. Speaker, I yield back the balance of my time and I move the previous question on the resolution.

Mr. Speaker, I rise in strong opposition to this rule and to the underlying legislation, which is proof of not only the Democrat majority's careless disregard for the American taxpayer but also their complete disregard for the energy crisis facing Americans today. Mr. Speaker, today you will hear the other side of the story.

This legislation--submitted late last night after the House had already finished its business for the day--is proof that when the Democrats want to bring legislation to the floor in a hurry, they're very capable of that. It's just too bad that we aren't seeing some energy legislation which would make a difference to consumers all across America.

Mr. Speaker, despite the pleas of working families and small businesses across the country, Democrats have failed on every occasion to treat the serious issue of high energy costs with the same level of urgency that they're bringing to this debate over this massive bailout of two private companies.

This is not to say that there are not good parts to this hastily negotiated legislation. While I believe that Congressman Lee Terry, myself, and other Republicans had a better, more effective proposal, the inclusion of the first-time home buyer credit is wise and has the potential to help reinvigorate our slumping housing and homebuilding markets.

Additionally, I support the establishment of a more robust and competent regulator of the GSEs which will restore competence to the marketplace and ensure that these entities operate in a safe, sound, effective manner maintaining adequate capital and internal controls and ``contribute to the liquid, efficient, competitive, and resilient national housing financial markets that minimize the cost of housing finance.''

If this were all that the bill did, I'm confident that the bill would pass this House unanimously. Unfortunately, there are a number of extraneous provisions--cynically added by the Democrat majority to an emergency bill that they are bringing to the floor today under a rushed and closed process--that either weaken the financial position of the GSEs that they claim to be helping, provide a taxpayer bailout of reckless financial behavior, or simply don't make logical sense.

Most perplexing of all is the logical inconsistency underlying the entire bill. On the one hand, this Congress is being asked to declare an emergency and authorize the use of unlimited taxpayer funds to become a part of the Fannie Mae and Freddie Mac problem while also raising the debt limit by $800 billion to lend these companies as much money as they may need. On the other hand, this bill creates an affordable housing trust fund that taxes the GSEs to support questionably effective low-income housing activities and to cover the losses that the FHA will surely incur after the Federal Government accepts financial responsibility for the most toxic loans in the marketplace.

So, Mr. Speaker, I will ask my Democrat colleagues that drafted this legislation, which is it? Are Fannie and Freddie private companies teetering on the brink of financial disaster thereby justifying this unprecedented taxpayer exposure and government intervention into the marketplace? Or are they cash cows that can and should be forever milked to provide financial support to every low-income housing whim that this Congress can dream of? I ask this because the answer simply cannot be both.

Mr. Speaker, because this lockdown rule provides the minority with only 60 minutes to debate this 694-page bill, I'm going to use the little time that I have to let my Republican colleagues come to the floor and use this limited opportunity to discuss all of the shortcomings associated with this bailout of mortgage lenders, investors, and speculators. I will leave it to my Republican colleagues to talk about all of their problems associated with the creation of this permanent housing slush fund, this $800 billion debt-ceiling increase, and this new $4 billion liability that will allow local governments to expose themselves to the up-and-down risks of the real estate market. And perhaps most of all, I will leave it to my colleagues to let them explain why the multibillion-dollar tax increase included in this bill to fund all of the bad ideas I've just described and certainly many more is a bad idea.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, there are lots of reasons to oppose this bill. We've talked about the things that we have in common with the bill. But I think it's important that we talk about what this bill actually does.

First of all, the GSE bailout. The 18-month term of authority for the Treasury to extend Fannie Mae and Freddie Mac's line of credit and purchase their equity is too long, we believe. Six months should be the limit. Not 18 months. The conditions under which a bailout is allowed should be clearly stated and should restrict the unlimited authority of the Treasury Secretary to act. The amount of Federal investment authorized should not be unlimited.

We've just given two great ideas, ideas that, because of a closed rule, you will not see on this floor of the House of Representatives. The conditions under which a bailout is allowed should be clearly stated and should restrict the unlimited authority of the Treasury Secretary to act.

Mr. Speaker, we believe the amount of Federal investment authorized should not be unlimited, and perhaps most importantly, we see that what Congress is doing is abdicating completely our authority and our role to the executive branch.

That's bad policy, and we should not be doing that on this floor of the House of Representatives today.

Secondly, the Affordable Housing Trust Fund, this legislation would place a permanent Affordable Housing Trust Fund mandate on the GSEs. In light of their current liquidity and capital conditions, taking money from Fannie or Freddie is a bad policy. Taking money from two of these instruments should not be done.

Moreover, the Affordable Housing Trust Fund could be used as a slush fund for political activity purposes. We see one of the housing groups that actively engages in open partisanship on a regular basis, and yet, they quite likely will qualify for a lot of taxpayer money. For what purpose? More politics.

Mr. Speaker, once again, the Republican Party is on the floor offering alternatives to this bad piece of legislation. We are not just saying ``no.''

What we're saying is this is an open slush fund and should not be allowed.

Mr. Speaker, we reserve our time.

Mr. Speaker, at this time, I'd like to yield 4 minutes to the distinguished gentleman from Georgia, Dr. Price.

(Mr. PRICE of Georgia asked and was given permission to revise and extend his remarks.)

I would like to give the gentleman an additional 30 seconds.

Mr. Speaker, at this time I would like to yield 4 minutes to the gentleman from Dallas, Texas (Mr. Hensarling).

I yield the gentleman 30 additional seconds.

Mr. Speaker, at this time I would like to yield 2 minutes to the distinguished gentleman from Arizona (Mr. Flake).

Mr. Speaker, if I could inquire upon the time remaining on both sides.

Mr. Speaker, I would like to inquire of the gentlewoman from Florida if we could ask unanimous consent to extend on both sides, 15 additional minutes. We have a lot of speakers that are here on the floor, and it seems like a reasonable thing to do.

Well, Mr. Speaker, we tried to get additional debate on this issue, but I know the closed rule we have got is intended entirely to squeeze down time and the amount of debate that would take place, confirming that again.

Mr. Speaker, at this time I would like to yield 2 minutes to the gentleman from California (Mr. Campbell).

Mr. Speaker, at this time, I yield 2 minutes to the gentleman from Connecticut (Mr. Shays).

Mr. Speaker, at this time, I yield 2 minutes to the gentlewoman from Minnesota (Mrs. Bachmann).

Mr. Speaker, at this time, I yield 1 minute and 45 seconds to the gentleman from New Jersey (Mr. Garrett).

I give the gentleman an additional 15 seconds.

Mr. Speaker, I will go ahead and close with the understanding that the gentlewoman is at that point in her presentation, also. Seeing an affirmation, I will go ahead and close.

Mr. Speaker, since taking control of this House, this Democrat Congress has totally neglected its responsibilities to address the domestic supply issues that have created the skyrocketing gas, diesel and energy costs that American families today are facing.

Today, they are proving that they can move a bill--like this housing bill--quickly when they choose to do so. However, they do not believe that the energy crisis facing American families and businesses is important enough to treat it with the same level of seriousness.

So today I urge my colleagues to vote with me to defeat the previous question so this House can finally consider real solutions to the rising energy costs in addition to this housing and GSE legislation.

If the previous question is defeated, I will move to amend the rule to allow for additional consideration of H.R. 6566, the American Energy Act. This bill would increase the supply of American-made energy, improve conservation and efficiency, and promote new and expanded energy technologies to help lower the price at the pump and help reduce America's increasing costly and dangerous dependence on foreign sources of energy.

I encourage everyone that believes that a comprehensive solution to solving this energy crisis and achieving energy independence includes increasing the supply of American energy should vote to defeat this rule and the previous question.

I ask unanimous consent to have the text of this amendment and extraneous material inserted in the Record prior to the vote on the previous question.

Mr. Speaker, we have given lots of reasons about ways we can make this bill better. The ways we can make it better is to make sure that what we do today is carefully understood, that we do not pass on to future taxpayers billions of dollars, and to any administration the opportunity simply to hand out money without an understanding and an expectation of performance.

Mr. Speaker, we've outlined our reasons today. We need to make sure that the Members of Congress who will vote today understand that opposing this bill and sending it back and making it better is the right thing to do. We also need to make sure that we take care of the American consumer who is having

increasing problems paying their bills, not just their housing bills, but also at the gas pump.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, on that I demand the yeas and nays.

I certainly thank the gentlelady for yielding and for her exemplary service on the Rules Committee.

Mr. Speaker, we know today that we are in a crisis without question. Families all across this great Nation are wondering if they're going to lose their house, what they're going to do next, burdened by a mortgage crisis that we have not seen in a generation, and it makes me angry.

As America's families call out for relief, we have this bipartisan bill before us today to try to address it. As we consider this legislation, we have to ask ourselves why are we in this position and how did we get into this situation in the first place? If we don't know the answer to that, we're not going to be sure that the next generation is not going to be asked to bail out the wealthy.

Mr. Speaker, the past 7 years brought some of the most egregious financial blunders this country has ever seen. On a daily basis we discover new evidence of incompetence. Americans have been blindsided by the mortgage crisis just as they were blinded by the savings and loan crisis. Due to the lack of oversight by this administration and the previous Congresses believing that most businesses and agencies should simply police themselves, American families are paying the price at the same time as the cost of gasoline and groceries skyrocket and foreclosure rates continue to climb.

We're seeing the evidence of this administration's failed policies play out in neighborhoods across the country. From California to New York, from Texas to Michigan, millions of hardworking families, mothers, fathers, daughters, sons, grandmothers, and grandfathers have had their homes foreclosed, their dreams shattered, and many of them find themselves homeless.

Mr. Speaker, recent reports estimate that 1.4 million homes will enter into foreclosure this year alone. It was reported in May that there were 157 new mortgage foreclosures filed every day in New York City. In my district in New York, the housing vacancy rate in Buffalo has risen 46 percent over the past 6 years, and soon the city will own one out of every 12 or 13 homes. That is 7,000 to 8,000 homes.

Despite these staggering numbers, our President, the optimist, continues to insist that our financial systems are ``basically sound.'' I have to wonder if the Americans who poured their lives and savings into their homes feel the same way.

Make no mistake about it, this crisis didn't jump out of the woodwork yesterday. It has been years in the making. But instead of taking meaningful action to protect Americans, their investments, their livelihood, and the American economy, the administration and the previous Congress has insisted the problem didn't exist. They told Americans a story of a healthy robust economy while the reality they were living told them something quite different.

Pervasive greed has replaced the public good. This is the administration that led us into war in Iraq, that won't address global warming, and built an energy policy based on the Enron loophole. Insisting upon living in a dreamworld, this administration failed to take any meaningful action to rein in the housing crisis until it was spiraling completely out of control. The failure to accept the reality of the situation has led us to this problem we're in today.

Crucial opportunities were missed to investigate the risky lending practices that Americans are suffering the consequences of today. Opportunities to instill safeguards to ensure that Americans are able to afford their mortgages were lost.

Mr. Speaker, the mortgage crisis is complex, and there is enough blame to go around. But it is clear that the lack of oversight allowed, if not encouraged, this crisis, and at the same time, the heads of the GSEs were paid millions of dollars in salary and millions of dollars in bonuses every year for not overseeing the work they were hired to do.

At the very least, thorough oversight would have uncovered how risky the lending and investment practices at the root of this crisis actually are--serving as a warning sign to the likely participants. Instead of oversight, they encouraged deregulation. Instead of holding hearings, they allowed big business to run rampant over protecting the most vulnerable Americans. Instead of strengthening our critical safeguards, they looked the other way while our Nation entered into a mortgage meltdown. For the past 7 years, this administration has ignored the needs and security of the American people.

Should Americans working every day pay the price for this recklessness? Should retired Americans who depend on their homes for their retirement pay the price for their troubling risks? Should future generations lose their shot at the American dream because of this incompetence?

Mr. Speaker, the Congress is not going to stand for it. Like President Franklin Roosevelt, who led this Nation out of our last great economic crisis, this Democrat-led Congress is committed to helping families out of this crisis and ensuring the situation never happens again.

Sadly after 1929, all the safeguards that President Roosevelt put on to have no more bank failures in the United States have almost all been removed. He recognized, President Roosevelt did, the strength of a great nation depends on the strength of its working families, and our strength is about exhausted.

Everything that he did, as I say, has been done away in the past 7 years, and I think that restoring some of the safeguards that he put on financial institutions would be a start.

The legislation we are considering today was forged by bipartisan consensus, and it will take bipartisan consensus to focus on future legislation to address the issues. This is a short-term solution today to a large and long-term problem. In these troubled times, righting the housing crisis is an important first step to getting our country back on track.

Quite simply, ladies and gentlemen, we need stronger regulations, we need real teeth, we need oversight, and we have to clean up the mess. I'm happy that Members on both sides are dedicated to doing that. I implore my colleagues to commit to increased oversight. Together we have to make sure this does not happen again.

I thank the gentlewoman.

Mr. Speaker, we confront here one of those moments in which there is a certain degree of confusion, and we are here, in substantial part, today at the urgent request of the Bush administration.

This package has several pieces. Three of them, in fact, are urgent requests of the Bush administration, and indeed, the Bush administration does have a criticism to make of the pace with which we are doing this. They think it is too slow.

Well, Members on the other side, some of them have complained that we're moving too rapidly. The Secretary of the Treasury has been a little frustrated that we were moving so

slowly. Clearly, we have here an example of the classic situation in which the right hand does not know what the far right hand is doing.

We are dealing today with legislation that has, with one exception, already passed this House. As to the ability to amend and debate, one of the high priorities of this administration has been significantly increasing the regulatory structure for Fannie Mae, Freddie Mac, and the Federal home loan banks. This House passed it last April of 2007. It was very much debated in committee, and it came to the floor of the House with many amendments. Well, that piece has already been debated on the floor of the House and amended, subject to a fairly open rule, not totally open.

We have the modernization of the Federal Housing Administration, another high priority of the Bush administration. Several months ago, the head of the FHA, the Bush appointee, Mr. Montgomery, the head of the FHA lamented the fact that we hadn't acted. Despite that, the senior Republican on the Financial Services Committee sent me a letter last week saying don't act on it. So we have the head of the FHA a couple of months ago complaining that we had not acted on this urgent administration priority, and then I get a letter from the senior Republican of this committee saying don't do that piece, leave that piece out. He talks about doing only 1 piece, that one's left out.

So we have the administration's request for GSE reform, already voted on and debated last year; FHA modernization, already voted on and debated by the House. This is a re-passage to accommodate, frankly, some of the problems we've had with the Senate.

We did have the FHA rescue plan that was voted on on the floor of the House, and that one was not amendable, and I acknowledge that.

All of the things I've talked about, by the way, these three pieces that have already been voted on, all passed the House by very large majorities. All had significant Republican support. All were fully debated in committee and amendments offered. This is a repackaging.

Now, the gentleman who preceded me said what are we afraid of. I guess I do have a certain fear of being caught in this Republican crossfire, with the administration telling us move more quickly and the Republican members of the committee saying how dare you move so quickly; and the Secretary of the Treasury saying we'll have confidence undermined in the market, and the Republicans saying we didn't have enough time to read the bill.

Again, almost everything in here has previously been debated in committee and voted on on the floor of the House. There's one new element, and I agree that did not go to committee. We didn't have a public hearing on it. The Secretary of the Treasury asked us not to have a public hearing, said he thought it would be damaging to the market if we had a public hearing. We have had a week and a half to talk about it, to discuss it, including in informal ways, and I've been open to discuss it with anyone who wanted to. But the Secretary of the Treasury did say that he thought the hearing would be a problem.

So what are we afraid of? Well, I had a certain fear of rebuffing the Secretary of the Treasury, President Bush's appointee, on the matter that he thought was so important as to how we handled it. So that's why we are here.

This is a balanced bill that includes a significant increase in the reform of Fannie Mae and Freddie Mac. It does give to the administration the ability to make some loans to them or maybe buy shares with an instruction that they protect the taxpayer with various mechanisms and with a requirement that the compensation of the CEOs and the top officials of those agencies be strictly regulated.

But it doesn't do that in isolation. It does it only as part of a bill which significantly tightens the increase, that tightens and increases the regulatory structure.

So just to summarize, this bill again responds to an urgent request by the Bush administration that we enacted in April, we passed it in the House in April. We tried to put it in the stimulus. The administration said not yet. That's already been voted on and debated.

It has the FHA modernization that's been voted on and debated. It has the FHA rescue plan, voted on and debated. All of those have already been in the bill, and three of these pieces in this bill are urgent requests of the Bush administration.

It does do some things for affordable housing, and I understand that many on the other side are ideologically opposed to that. But they were ideologically opposed to it when we debated it on the floor. And on the affordable housing trust fund, we have already voted about 10 times on the floor of the House.