To amend the Emergency Economic Stabilization Act of 2008 with respect to bonus payments.

Mr. Chairman, I want to begin by recognizing the two Members who are the main authors of this bill, and I will begin with 2 minutes for the gentleman from Florida (Mr. Grayson).

I yield the gentleman an additional 30 seconds.

Regular order.

Mr. Chairman, I will yield myself as much time as I may consume.

This is really extraordinary. What you have just heard is a denunciation of something that was done by the Congress a few weeks ago and a refusal to undo it. I have never seen people, Mr. Chairman, so attached to something they hate. This is presumably a psychological disorder which I am not equipped to diagnose.

The objection of the gentleman from Texas was that, when the recovery bill was passed, it was passed too quickly. We signed it that night. It included a provision that should not have been in there. This bill takes it out. It takes it out in a way that makes sure it will have had no effect, because it dealt with something in the past, and it is undone by this.

Speaking about being undone, my Republican colleagues were being undone by the loss of their whipping boy.

I will yield.

I will take back my time.

The bill under consideration is 5\1/2\ pages. I believe even the gentleman from Texas could have read it by now, and if the gentleman from Texas has not been able to read this 5\1/2\-page bill, I will talk long. Even if you read slow, you'll get it done.

The point is that this bill undoes what he is complaining about. Note the refusal to address the subject. The complaint was that the amendment in the recovery package said that bonuses in the past given by AIG or by anybody else would not be covered by the restrictions in that bill. This undoes it. This takes it away. My colleagues on the other side are kind of like kids who have had a toy bear or a blanket, and this security blanket means a lot to them. Their security blanket is being able to complain about something that happened before the break. This bill undoes what happened before the break and makes it a nullity. They at some point, Mr. Chairman, have to outgrow the security blanket.

Now, of course, here is the real problem. They do not want to vote for a bill that restricts excessive pay and unreasonable bonuses. The gentleman from Texas has now had a chance to read the bill and has a question for me about this bill.

Yes.

I will take back my time to say that this is the bill that came out of the Financial Services Committee, and this was not out for 72 hours. It was out for much more than 72 hours. We, in fact, marked up the bill, with amendments, in an open markup last Wednesday. We voted on it on Thursday.

No. I'm sorry. The gentleman wants to debate a bill that was passed in February. He can have all of the Special Orders he wants in order to beat that dead horse, because it is a dead horse, Mr. Chairman. This bill that he does not want to debate the merits of, that he is probably prepared to vote against and is looking for some reason to, undoes what was done back then for the recipients of TARP funds. So that is the issue. This bill was marked up in committee. It was fully debated in committee.

I'm sorry. The gentleman has twice asked me to yield for questions.

I have twice yielded to the gentleman for questions, which I must say, in all parliamentary decorum, to me, did not seem to substantially add to the quality of the debate, because we are on this bill that he does not want to talk about. This bill was out. It was debated. It has been laid forth. We have amendments that will be considered to be adopted that were also made public for some time. Here is the point:

This bill addresses what Members on the other side complained about. Apparently, they regret that fact. They would rather complain than have us undo the source of their complaints, so that is why they are dealing so unhappily with this legislation.

Now let me get back to the merits of this bill. It says, if you have received capital contributions under the TARP, like AIG--AIG, by the way, was originally, of course, given money under the Bush administration, by the Bush-appointed head of the Federal Reserve and with the approval of the Bush-appointed Secretary of the Treasury. It later got TARP funds.

From the Senate, from the Senator of Connecticut, we then saw restrictions. He deserves credit for adding restrictions when no one else had pushed for them. He did not get all of the restrictions that he should have gotten, which was because of other people objecting. There was a requirement that the restrictions not be retroactive. Members complained about that. This bill fixes it. Let me emphasize again: This bill undoes the exemption of retroactive bonuses from the darned language. I don't understand why people are opposed.

No. Let me explain this to the gentleman from Texas. I yielded to him twice. I am not going to continue to let the gentleman from Texas evade the issue by not debating this bill. He has his own time. I am not going to waste the limited time we have to explain this bill with this kind of continued lament for the passage of a complaint.

What the bill says--and what I want to stress--is that it is only for people who get capital funds under the TARP. This does not interfere with small business lending. It does not interfere with people participating in the impaired asset program, and I can guarantee that it will not be so extended.

It says, if you get a capital contribution under the TARP bill, as long as you have that contribution, you cannot make payments that are excessive and unreasonable. You can give bonuses if they are performance-based, and it repeals what the Republicans have been complaining about.

Mr. Chairman, in closing, let me say I condole them on their loss. Their attachment to what they hated is truly impressive, but they are going to have to live with the fact that we are going to undo that and that they are now going to have to talk about what this bill does.

I reserve the balance of my time.

I thank you, Mr. Chairman.

I now recognize for 2 minutes----

Regular order, Mr. Chairman.

Mr. Chairman, I am going to yield myself 30 seconds to say:

Apparently, there are two alternative strategies that the minority has in discussing this bill: one, discuss a bill that was passed 6 weeks ago; two, ignore the rules of the House and just talk whenever they feel like it. Neither one seems, to me, to advance debate.

I now yield 2 minutes for serious conversation to the gentleman from Connecticut (Mr. Himes).

Mr. Chairman, I yield 2 minutes to the gentlewoman from Nevada (Ms. Berkley).

Yes.

This bill deals only with compensation, not with travel. The gentlewoman referred to incentive travel. Any incentives that were performance-based would be fully allowed. If by selling a certain number of things you earned a trip, that would be allowed. So it specifically does not deal with travel for the business. It would allow performance-based incentives for this or for any other purpose.

Mr. Chairman, I yield myself such time as I may consume.

This is really an interesting debate we're having within the Republican Party.

The first speakers were critical of the bill which passed in the recovery bill because it limited Senator Dodd's restrictions on compensation and said they wouldn't apply retroactively. As I said, it was Senator Dodd who initiated the notion of further restrictions. And many of the Republicans were upset that it didn't go far enough.

But now we have the deputy leader of the Republican side objecting that we're going too far, directly contrary to the complaints that we didn't apply these retroactively, he's upset that we applied them at all. And he says it's an interference with free enterprise.

Let's stress again. And I do know, he did say this is a revolt against King George in effect. And it is. King George Bush. Because we are dealing here with a program initiated under the Bush administration. We are dealing here when we talk about AIG with a grant of funds that came without any congressional input with the approval of the Bush administration.

We did, some of us, raise the compensation issue last fall. Yes, we did. We said that if you're going to take government money, you accept some compensation restrictions. The gentleman from Texas--and I do note that he's left the floor. I think the gentleman from Texas is entitled to leave the floor. I don't think having made a speech you have to sit here and listen to some of the other speeches. I have to because I am the manager of the bill. I wish I didn't have to listen to some of these speeches, particularly the repetitive ones about the bill 6 weeks ago. But since commenting on people leaving the floor is in vogue, I thought I would become fashionable at least in this regard.

But here's the point. We say if you receive TARP funds capital infusion, you accept some restrictions. That is no more an interference with free enterprise than any other contracting rule the Federal Government has. And as to the gentleman from Texas's suggestion, he said, Oh, but this isn't the problem. The problem is where it will go.

Now, Mr. Chairman, I have observed that when people are opposed to something but don't have confidence in the persuasive quality of the arguments on the particular issue, they migrate to what would happen if it was applied in a wholly different context. It will not be applied in a wholly different context.

I speak for myself and the majority leader, Mr. Hoyer. This bill is confined to people who take a capital infusion under the TARP. It will not be extended to any other participant in the impaired asset program, in the small business lending program, in the higher education lending program. I would not, as chairman, convene a meeting for such a bill. The majority leader would not bring one to the floor. Again, there is zero chance of that happening.

But when Members complain about something that might happen that won't happen, it is because they are against what is happening but don't have the confidence that if they said it, people would believe it.

Let's go back to what this bill does. It undoes the restriction on retroactivity that had been a cause of such outrage among the Republicans, and I repeat again. They appear to have become so attached to their outrage that they are even more outraged that they won't be able to be outraged any more.

Secondly, we say that if you receive a capital infusion under the TARP program and only a capital infusion, you may not make salary payments that are excessive or unreasonable and you can give bonuses as long as they are performance-based, such as in restricted stock or in other ways.

I await Members on the other side--because a number of them have spoken, but not one of them has objected to the bill on its merits. The gentleman from Texas said, Well, if you took this principle and went further, it would be a problem. The other Members said, Isn't it too bad we did something 6 weeks ago that we're now undoing? I have yet to hear an argument against this bill.

I reserve the balance of my time.

How much time remains on each side?

I yield myself such time as I may consume.

I heard the gentleman from Alabama say that we should not get into this business of fixing compensation. Someone claiming to be the gentleman from Alabama last year voted for legislation which included the following. It was the rescue plan. The gentleman voted for it when it passed.

On page 12 of that bill, there's a heading, section 111, ``Executive Compensation and Corporate Governance.'' The gentleman from Alabama voted for this. So did the rest of the Republican leadership. They did it at the request of President Bush and of Secretary Paulson and of Chairman Bernanke, not heretofore known for their socialism. But the gentleman from Alabama voted for exactly what he now decries.

It is a grant of authority to the Secretary of the Treasury to require--I'm now quoting. He shall require that the financial institution meet appropriate standards for executive compensation and corporate governance. It goes beyond much of this bill, corporate governance. The standard shall be effective for the duration of the period that the Secretary holds an equity or debt position in the financial institution. So the gentleman voted for this when the Republicans were in power. Circumstances apparently change opinions.

In fact, there's also this great inconsistency. For a month now, the Republicans have been complaining that in the recovery bill we adopted a provision as the Congress which limited the reach of the government's intervention into compensation. That was the part about retroactivity. This undoes that limitation. So, in the name of limiting government, the gentleman denounces the bill that would undue the limitation that his party has been denouncing. There is a fundamental gap that can only be explained, it seems to me, by something other than the merits.

Given what the gentleman from Alabama said--we've got to get the government out of this--why was he then opposed, if he was, to the language that limited its retroactive application? In fact, if you believe that one of the big arguments is that we changed the rules after the fact, he should have been for that limitation.

The arguments about free enterprise and not understanding the principles are just nonsense, Mr. Chairman. We're not debating free enterprise. We're debating how best to make it work.

I think Franklin Roosevelt helped save free enterprise. I think rules help save free enterprise. I think when Secretary Paulson in the Bush administration called for more regulation of credit default swaps and collateralized debt obligations, we'll probably be getting an announcement that they will be opposed to that, because that's what we are going to be going forward trying to do.

Yes, the government does have a role in this, but to return to this bill, which the gentleman only briefly discussed, it does do what the gentleman voted for last fall, and by the way, the argument that the government was responsible--the gentleman said in 1999 this started. I was not going to refer to the history, but from 1995 through 2006, Members of the Republican Party controlled this Chamber, and they controlled it tightly. If, in 1999, the gentleman from Alabama, as a member of the Republican majority on the Financial Services Committee thought there was a problem, they should have done something about it.

The gentleman from Alabama was, for a time later on, the chairman of the Financial Institutions Subcommittee, which had jurisdiction over lending standards. Some of us wanted to pass a bill to limit abuse of subprime lending. Yes, that happened, Mr. Chairman, in the House. It happened in 2007, after we became the majority, and let me say now I think we still have the potential for the bad loans to be made.

When this House returns after the April break, we will have in committee arguments on the floor legislation that will stop precisely the kind of loans that the gentleman from Alabama decried, and I await with interest what the votes will be.

I reserve the balance of my time.

I yield 4 minutes to the gentleman from California (Mr. Sherman).

How much time do I have remaining, Mr. Chairman?

I will be the closing speaker so the gentleman may proceed.

I yield myself the remaining time, first to say that this dangerous step was of course taken--if you think it's a dangerous step--last fall, when, with the support of the Republican leader and the Republican whip and the ranking Republican on the committee, Congress passed a bill which had a section on executive compensation and corporate governance.

This one called on the Secretary to set appropriate standards. Frankly, excessive and unreasonable is a tighter limitation. Unlike this one, it isn't just the Secretary of the Treasury--it is the Secretary of the Treasury, in accordance with, and has to get the approval of the head of the FDIC, Ms. Bair, the Comptroller of the Currency. Yes, there's a consultation with the head of the oversight board. She has no vote on it. The votes are from the regulators.

Let's stress again--this only applies, this bill, to people who voluntarily keep capital infusions from the Federal Government. If they don't like it, they can return the money. That's what an assault on free enterprise is.

The ranking Republican said before that anybody who does business with the Federal Government might be subjected to that. No, that's not remotely true. It certainly isn't true in the bill.

The bill explicitly says that if you do business with one of the covered entities, you're not covered by this. It explicitly says that.

Not being able to argue against this bill on the merits, they then say, Well, what happened if it was applied 16 different other ways? I don't think it should be. I didn't know it won't be.

Again, when people argue against what is not in the bill, but what might come, it's because they have no confidence in their arguments against the bill.

We did adopt, with a majority of Senate Republicans, the leadership-- not quite a majority--but the leadership of House Republicans on these issues, President George Bush--we've already adopted rules that say, quite sensibly, if you take the Federal money, there are some restrictions. And if you don't like it, give the money back.

Now the gentleman from Georgia said, Oh, but the bill goes too far because it doesn't just repeal what we did. And he talked about the Lungren bill. I hadn't heard about the Lungren bill. The reason is that the Lungren Republican bill was introduced after we had made clear what we were going to do on Monday, 2 days before we marked up the bill. It was not called to my attention. No member of the Republicans

on the Financial Services Committee said, Let's just do it this way.

We had an open markup. The Lungren bill could have been offered as an amendment by any Republican member of the committee. They did not do it. If they forgot, Mr. Lungren himself could have come to the Rules Committee and asked that it be made in order as amendment. They did not do it.

They quietly introduced a bill, made sure that no one noticed it; called it to no one's attention; deliberately refrained from offering it as an amendment at an open markup, when they could have; deliberately refrained from going to Rules Committee and asking that it be made in order; and now they're complaining that it wasn't adopted.

The fact is this: The Republicans regret losing the provision that was added mistakenly, in my judgment, in the hurried deliberations, hurried conclusion on the recovery bill.

The gentleman from California mentioned this. The Senator from Connecticut offered restrictions. The Members on the other side baffle me sometimes--sometimes more than others. They are critical of restrictions. The gentleman from Connecticut offered restrictions on compensation. Presumably, they would denounce him for that. But as the gentleman from California pointed out, they are objecting to offering restrictions, and then they're objecting because somebody persuaded him the restriction shouldn't be so restrictive.

Now we also have in here a provision that this will lead people to give back TARP money. At an earlier stage, before I think they reconsidered the total inconsistency of it, some of the Republicans said, Oh, this is a problem because it will give back TARP money. Of course, these are the same people who said they wished there was no

I rise to offer that amendment.

Mr. Chairman, this is an amendment that reflects the debate that we had to some extent in the committee. Some Members on both sides raised questions about ambiguity. That is why you have markups.

For example, we want to make it very clear that this applies only to institutions that have received and voluntarily retained capital infusions.

So, as a later amendment offered by one of our Republican colleagues does, that I hope is adopted, it reinforces that you don't become subject to these limitations on compensation just because you do business with an institution that gets the investment. One Republican Member said, well, what about people who buy or sell mortgages from Fannie Mae and Freddie Mac? We make it very clear that they would not be covered.

We did make it clear that where people have earned severance pay and their salary was $250,000 or less, that the severance pay is not greater than $250,000, or the annual salary, that earned severance pay could be paid under previous contracts. We always intended that. We wanted to make sure. And it does create a commission on executive compensation to study a system, because some people thought, well, we haven't done it well enough.

Now, I have one other point, Mr. Chairman. Would it be in order for me to make a unanimous consent request for a modification of the amendment?

The gentlewoman from North Carolina said that she thought it was a mistake to refer to both executive or employee, because executives are employees. And in the interest of that grammatical position, I ask unanimous consent to amend the manager's amendment to incorporate the point made by the gentlewoman from North Carolina, and strike the words ``executive or.''

If the gentleman would yield, yes, that was the point raised by the gentlewoman from North Carolina. I think that effectuates her point.

Mr. Chairman, I withdraw my unanimous consent request.

Mr. Chairman, I guess we get a sense of what is happening here. The gentlewoman from North Carolina raised the point that, frankly, didn't seem to me one of the most important ever to be raised. It said we had some redundancy in the bill. Lawyers, of course, hate redundancy, as we all know. They are belt and suspenders opposed to it.

I tried to accommodate the gentlewoman from North Carolina. It touched off an entirely unnecessary debate eating up the time. If the Members are prepared to accept this at some point, in the spirit of conciliation I will offer it again, but not to be the subject for extra debate time which intrudes on the Members' time.

The manager's amendment, as I said, clarifies points that were raised, as I just tried to do with the gentlewoman from North Carolina, tried to give some assurance. Sometimes the atmosphere gets so partisan that that effort of conciliation becomes too difficult, so I will leave it where it is.

I reserve the balance of my time.

I yield myself 2\1/2\ minutes to comment on the most extraordinary display of illogic ever inflicted on this Chamber.

The gentleman complains that the restriction was adopted, but now complains that we are going to undo it.

And the gentleman is leaving the Chamber. Let me say to him, I understand differences of opinion, but I do resent the suggestion that I am trying to cover anything up. As chairman of the committee, I----

No. I brought a bill to the committee for a markup. We had an open markup. People could have offered any amendment they wanted. We then brought the bill to the floor. We went to the Rules Committee. I urged some----

I reclaim my time. The answer is obvious. No, the stimulus bill did not come to a committee which had no jurisdiction over it, as the Member well knew. I am talking about the accusation that a bill to correct a mistake is a coverup.

The illogic of that is overwhelming. The lack, I think, of commitment here to public policy is striking. The gentleman is complaining about a mistake, and he calls an attempt to correct a mistake a coverup. What is the coverup? This is a bill that was debated openly in a markup, it was debated openly in the Rules Committee. It is being debated openly on the floor.

This accusation of coverup is not, it seems to me, a serious contribution to a debate on the merits. But there is also the fundamental inconsistency on the Republican side. They were opposed, and the gentleman said this bill is going to get us deeper into the affairs of corporations. How? By repealing something the gentleman was opposed to.

If in fact the provision he didn't like hadn't been put in there in the first place, we wouldn't have been so deeply into it. This is simply, let's find something to complain about. Let's ignore logic.

The gentleman says he doesn't want us more deeply into corporations. Well, then he should have been for that restriction. Indeed, his quarrel with Senator Dodd is not that he only got part of what he wanted, but that he moved it at all. Because, remember, it was Senator Dodd who initiated the further restriction.

I reserve the balance of my time.

Mr. Chairman, I have only one speaker remaining.

Mr. Chairman, first, I appreciate the generosity of the gentleman from New Jersey when he accepts the fact that I intend to do this through the committee that I chair. He then suggested, however, that we might lose control of this. I'm talking now about the ability to restrict the recipients of the capital infusion. And he talked about a tax bill that didn't come out of the Committee on Financial Services and a bill just voted on today, defeated, out of Judiciary.

But I will assure him, given the support of the leadership on the Democratic side, of the importance of restricting this to recipients of capital infusions. Both of those bills included that same restriction. The Committee on Financial Services had no great input into the tax bill. But the writers of that bill accepted our language that applied only to recipients of a capital infusion. Similarly, the Judiciary bill applies only to recipients of the capital infusion. And I have now put every other chairman on notice about assurances that will be there.

The other thing the gentleman from New Jersey said indicates the split on the Republican side. He denounced retroactivity. There is a good argument against retroactivity, and the courts may have to decide it. But remember that unlike the gentleman from New Jersey with his consistency to principle, a large number of Republicans, including the gentleman from Nebraska, have been denouncing the administration and the Senate precisely for accepting the principle that you don't go retroactive. The gentleman from New Jersey said, ``Don't be retroactive.'' But most of the other Republicans have been saying, ``How dare you not go retroactive?''

The provision that kindled all the anger that was put into the recovery bill was a provision that says, ``Don't apply these rules retroactively.'' The gentleman from New Jersey says, ``Don't apply the rules retroactively''?

I guess he is lucky that his colleagues have decided not to denounce him. He is a very nice guy. That is probably what has charmed them. But he has just articulated precisely the principle that has led to that firestorm of attack.

Now again, this bill undoes that. Members said, Oh, but it does more than that. And there is an implicit suggestion that if only, if we had only done that, it would have been okay. But I repeat, the bill that only does that was introduced 2 days before the markup. I don't read every bill that is introduced. No Member of the Republican's minority on the committee offered an amendment to reduce this only to that repeal. No Republican in the House came to the Rules Committee and said, You know, that provision, that is a terrible provision. Let's get rid of it.

They don't want to get rid of it, Mr. Chairman, because they want to be able to attack it. Some of them want to attack retroactivity, and some of them want to attack a bar on retroactivity.

As to the standards, in the first place, members of the minority have consistently--I guess it scares people more--misstated the authority here. It is to the Secretary of the Treasury and the Federal Financial Institutions Examination Council, a five-member body, three of whom are George Bush appointees; the Comptroller of the Currency, Mr. Duggan; the head of the FDIC, Ms. Bair, and the chairman of the Federal Reserve, Mr. Bernanke. They are three of the five members of this committee, and they are not advisory. The oversight panel is an advisory role.

The five members of the Federal Financial Institutions Examination Council, people with long experience in regulating financial institutions, are the ones that have to sign off on any regulations. So why is it simply the Secretary of the Treasury? The gentleman from Georgia read off the biography of the Secretary of the Treasury. He went to Dartmouth. Apparently that is a prerequisite today for Secretaries of the Treasury, as Mr. Paulson did. But what about Ms. Bair's experience? What about Mr. Duggan's experience? What about others who are in that position who have had long experience both in the private sector, as they have, and as bank regulators?

This is an effort to caricature the bill. By the way, last year, the Republican majority of the Senate, President Bush, the Republican leadership of the Financial Services Committee and the Republican leadership of the House voted for a bill that gave more discretion to the Secretary of the Treasury alone. I understand that times change. But a change in political control should not lead to such a rapid change in political opinion. And if retroactivity is a terrible thing, then retroactivity shouldn't have been the cause of all that argument.

I repeat again. This says if you take Federal money under the capital infusion program, you cannot issue excessive or unreasonable payments, which is what AIG did. And they didn't just do the top executives. Why do we cover everybody? Because AIG and others could cover everybody. And it says, ``Let's undo the mistake that was made during the recovery.''

Obviously, the manager's amendment is not controversial. It has just been the forum for more extended debate. I hope the manager's amendment is adopted.

Will the gentleman yield?

I thank the gentleman because this is important not just for what it does but for what it says. Community banks have not been the source of this problem. They didn't make bad subprime loans. They didn't get into CDOs. They have been unfairly blamed and to some extent burdened. And it should be our commitment, and we are, we are trying to do this in other ways, with the FDIC assessment. The gentleman from California has been a leader in this. This is a chance for us, in effect, to apologize to community banks for criticism that was undeserved and to assure them that we will try to insulate them from actions that should not occur that would penalize them for things that they didn't do wrong.

I thank the gentleman for his leadership.

If the gentleman would yield further, I would note that I'm going to introduce a letter from Camden Fine, the president and CEO of the Independent Community Bank Association.

March 31, 2009.

Re Support Cardoza Amendment to H.R. 1664.

Dear Representative: On behalf of the Independent Community

Bankers of America, and its 5,000 members, I strongly urge

you to support the Cardoza Amendment to H.R. 1664, the

executive compensation legislation applicable to TARP

recipients. The Cardoza Amendment recognizes that community

banks do not engage in the unreasonable and excessive

compensation practices that are at the heart of the TARP

bonus scandals.

As a result of prudent lending practices and common-sense

compensation policies, the majority of community banks remain

strongly capitalized and ready to do their part to aid

economic recovery through lending to households and small

businesses. Recognizing the important role community banks

play in our recovery, both the Obama and Bush Administrations

have encouraged community banks to participate in the TARP

Capital Purchase Program. The Program provides additional

resources to participating community banks to enhance their

role as catalysts for economic recovery in their local

communities.

Unfortunately, efforts to rein in excessive and

unreasonable compensation practices of MG and others have

also reached the community banks. The broad-brush approach to

addressing compensation abuses needlessly and unfairly adds

to the regulatory burden of community banks participating in

the Capital Purchase Program. It would be a shame if well-

intended, but misdirected, regulation of bank employee

compensation forces community banks to withdraw from the

program or not sign up in the first place.

The Cardoza Amendment takes a targeted approach to the

regulation of executive and employee compensation by allowing

the Secretary of the Treasury to concentrate his efforts

where the problems existed in the first place--the largest

financial institutions. The amendment allows the Secretary to

exempt community financial institutions from the compensation

standards established under H.R. 1664, if the Secretary finds

that an exemption is consistent with the purposes of the new

legislation. For purposes of the exemption, a community

financial institution is an institution that receives or has

received not more than $250 million under the Capital

Purchase Program.

The Cardoza amendment will encourage the participation of

community banks in the Capital Purchase Program and enhance

the community bank industry's role as leaders in our economic

recovery. Thank you for considering our views.

Sincerely,

Camden R. Fine,

President and CEO.

Capital infusions from TARP. There are other forms of TARP money, but accept capital infusions of TARP money.

Only the capital infusions, the gentleman from Alabama's idea, as I give him credit for.

Yes, because AIG did get a TARP capital infusion.

They didn't originally, as the gentleman knows, but there was subsequently a TARP addition to.

If the gentleman would yield, I never used that language. That's not my language

Well, the President and I agree a lot, but not all the time. I'd like people to return the money. It's good for the taxpayers. It's a sign that they are stable, and we specifically amended the law to allow them to return it, and I encourage them to return it.

If it's going to reduce their lending, then they probably shouldn't return it. But there are other things that people do with it. And I understand. But if the gentleman is asking me do I understand that I'm disagreeing to some extent with the President and the Secretary of the Treasury, yes, sometimes that happens.

If the gentleman would yield, the Secretary of the Treasury apparently sponsored the restriction against retroactivity. He is on the side of the gentleman from New Jersey (Mr. Garrett) against retroactivity. I am here with a bill that undoes something the Secretary of the Treasury did.

If the gentleman will yield. Yes, because in AIG we had hundreds of people--yes, it does.

Parliamentary inquiry, Mr. Chairman.

I am in opposition to the amendment. Does that give me priority in claiming the time?

I am an opponent of the amendment.

Mr. Chairman, I would respond this way. I think fairness on an important issue requires that there be a balanced debate. The gentleman previously said he was not in opposition. Neither was I. I did not try to claim the time. But I believe the spirit of parliamentary debate is vitiated if there are two proponents and no opponent. The rule calls for an opponent and a proponent. I claimed the time. The gentleman has said he was not in opposition to it, and I am. I do believe in fairness, and I believe fairness requires that it be a balanced debate.

Mr. Chairman, parliamentary inquiry.

The gentleman has said he is not in opposition, so how could he get the time in opposition preferred over someone who is in opposition?

Point of order, Mr. Chairman. The gentleman from Georgia, 2 minutes ago, said he was not opposed. I don't think the conversion was that rapid. He said he was rising in opposition even though he was not in opposition. He clearly stated that.

How much time is remaining that has been yielded to me?

I thank the gentleman from Alabama for a sense of fairness that I wish had been more present in the House.

We are here, talking about retroactivity. Again, this raises the central issue. People on the Republican side have been objecting to a provision added in the recovery bill that says ``no retroactivity.'' This does that again, so I don't understand. If people are genuinely opposed to the amendment added to the recovery bill, they cannot consistently be supportive of this amendment. The principle is the same.

Is the principle of no retroactivity a terrible abuse of the taxpayer or is it a matter of fairness? It cannot be both.

So Members who vote for this amendment are voting to ratify what was done in the recovery bill. If it passes, then people will not be able to argue that the recovery bill, without giving Members a chance to vote, took away an important part of the restriction, because that is the question. It is more than retroactivity in that sense. Although, the gentleman did want to modify the amendment, and I didn't think, at this late date, that that was appropriate. It even would allow some restriction on what you could do going forward depending on when people took the TARP money.

It says this would only apply as written--and I know the gentleman wanted to modify it. If you now have TARP money and do not refuse it, you are not covered by this. The amendment says, if you now have TARP money and decide to keep it, you are not covered by this. It is far too broad. It is broader even than the retroactivity. It says only those companies that now decide to take an infusion under TARP will be restricted. I know the gentleman wanted to change it at the last minute. I didn't think that was appropriate at the last minute.

The other part of it is this: The gentleman says he wants to protect anything already done. He wants to ban retroactivity. That is precisely what has gotten everybody excited about what the Senate put into the recovery bill.

I appreciate that, and I would emphasize the point made by the gentleman from California, which is, as drafted, the amendment would say that people who have had billions of dollars in TARP money are not covered by this amendment. Billions of dollars.

The question of the average worker is a bit of a straw employee. No one is talking about getting to that level, and that has not been the problem, but if you talk only about the top executives, AIG gave bonuses to hundreds of people. I don't believe anyone thinks secretaries are getting excessive and unreasonable amounts of money or huge bonuses.

Again, if you vote for this amendment, you are removing the debate about the part of the recovery bill that says no retroactivity.

Mr. Chairman, I rise to claim the time in opposition.

Mr. Chairman, I would say by explanation I have consulted and I appreciate the cooperation of the members of the minority. The minority is not opposed to this bill. I am not opposed to the next amendment that's going to be offered. So we've agreed to take 5 minutes each, and I think we then have worked everything out so that on the next one, we will get an equality of time and there will be real opposition. And I appreciate the accommodation that the members showed in reaching this.

I understand the principle because it's one we have in the bill, but the question is on which end do you wait? The gentlewoman has suggested that people would want to pay it and they can't get it all paid at once, and that's true, and therefore, they should immediately be removed from the restrictions. But the alternative is this: They announced they are going to pay it, they plan to make the compensation adjustments, and they pay them--they simply defer them for a couple of months. In other words, it seems to me there are two possible arguments.

One is that the repayment period would be a very long period, in which case I wouldn't want there to be a tolling of the provision. The other is that the repayment period will be a fairly short period, in which case it's only a short period to have to wait until they pay the bonuses.

So I think that is a better way to deal with it. It is not an unreasonable position. The question is where do you do the risk.

This way they say we're going to repay, they do a repayment schedule, and as soon as they repay, they can make those payments. In other words, the entity that determines how long it will be is the repaying entity.

I think the good legal principle is it's the entity that controls the timing that bears the burden of a delay. If they delay too much, then they have a problem. If they do it promptly, then they don't have a problem because they can make the payments. And I do think with all the other burdens that you put on the secretary--and then I guess the other question is well what if people say they are going to repay, and for some reason they aren't able to make the scheduled payments. Do they have to rescind the bonuses? Do we get into that again?

So I would prefer to leave it as we have now. People can announce they're going to repay and the more quickly they repay, the more quickly they can make those payments, and there is nothing that stops them from telling people, By the way, we plan to repay, and as soon as we do, you'll get this raise, you'll get this bonus. I think that is a better way to go.

I reserve the balance of my time.

Who has the right to close?

I have one remaining speaker, so I will reserve my right to close.

Mr. Chairman, I yield my remaining time to the gentleman from California, Mr. Sherman.

I understand the gentleman from Georgia is going to take the time in non-opposition. I want to thank the gentleman from Florida for bringing this forward. It is important that we have this totally nailed down. Ambiguity is to be avoided at all costs, and he's performed a useful service with this amendment.

I thank the gentleman for yielding.

He's raised a very important issue. My attitude on this amendment is almost certainly yes but not yet. He's raised some of the questions. There's a little bit too much to give to the SEC. They will ultimately have to administer it. I would give him my word--he remembers he voted for it in 2007, the say-on-pay bill, when we first brought it in the House. It was then advisory. I believe it is time to consider going further and as part of the whole corporate governance, because an alternative is to simply empower the shareholders more to have real control of the board.

So I intend to vote ``no'' now with the commitment to the gentleman from Oregon that this will be seriously studied in our committee later this year.

Mr. Chairman, I am pleased to yield 1 minute to my friend from Texas (Mr. Culberson).

I yield the gentleman an additional minute.

Mr. Chairman, I yield 1 minute to the gentlewoman from North Carolina (Ms. Foxx).

Mr. Chairman, I am pleased to yield 5 minutes to the deputy ranking member of the Financial Services Committee, the gentleman from Texas (Mr. Neugebauer).

Mr. Chairman, I am pleased to yield to the gentleman from Alabama (Mr. Bachus) such time as he may consume.

Mr. Chairman, we have no more speakers on this side, so until the chairman is ready to close, I will reserve.

Thank you, Mr. Chairman.

It's been an interesting discussion, there's no doubt about it. We've talked about executive compensation, we've talked about a problem that arose--a specific problem that arose when Senator Dodd put that language in the bill in the middle of the night--in the spending bill.

The interesting thing about it, Mr. Chairman, is that the bill to remove that language is 11 lines long. It's just 11 lines long. It's not 6 pages long.

So if we were to do what some in this body on the other side say--the only thing we're here to do, which is to remove that language--it would be H.R. 1673 from Mr. Lungren. That's the bill that would remove the 11 lines that make it so that that backroom deal for AIG executives would be stricken.

So I think it's important that we appreciate what's going on. I appreciate the comments from the gentleman from California, who did indeed, I think appropriately, describe what was in the bill. It's important that our colleagues look at this bill. It's not too long. Six pages. We can indeed read it. I hope some of my colleagues will read it.

The title of the bill: To amend executive compensation and to prohibit unreasonable and excessive compensation and compensation not based on performance standards.

When you read the bill and get to who's going to define all that, which is really the question, Mr. Chairman--who's going to define that. Usually, we think that in a market economy, in the United States economy, in the economy that has allowed more success and more opportunity for more individuals than any nation in the history of mankind, that the way that we define compensation and performance in the market is in the private market, not in the government.

So on page 3 it says that no payment would be able to provide for compensation that is unreasonable or excessive as defined in standards established by the Secretary. The Secretary of the Treasury is going to tell us what is unreasonable and what is quality performance.

Well, the Secretary of the Treasury, let's look at his biography, Mr. Chairman. Oh, my goodness. He's the ninth president and chief executive officer of the Federal Reserve Bank of New York, which began when he began his service there in 2003. It's a wonderful job. But what experience does he have in setting compensation? In fact, what experience does the government have in setting compensation?

He first joined the Department of the Treasury in 1988. Let me think a moment, Mr. Chairman. That means 21 years of service for the Department of the Treasury or in the Federal Government. Well, that's wonderful, and he's to be commended for it, but what experience does he have and why would the Nation want him to be deciding what compensation and performance standards are for this Nation?

Maybe it was in his education. He went to Dartmouth College, bachelor's degree in government and Asian studies in 1983. Wonderful institution. Great study. Master's in international economics and East Asian studies in 1985.

Mr. Chairman, not to slight the Secretary of the Treasury, but the American people do not believe that the Secretary of the Treasury ought to be setting compensation limits for anybody.

Why? Why does all this feel so strange? It's because we're in a political economy. We're no longer in the market economy that the American people know and love and embrace.

What does a political economy look like? Well, the gentleman from California described it. He said, Because of the disclosure provisions, the American people, who are putting up the money, have a right to know. Well, sure they have a right to know. But that's not what a market economy is.

He says that the people have a right to know and set the limits because this is capitalism. No. Capitalism was bastardized a year or more ago when we started down this road that, Mr. Chairman, I opposed every step of the way. Because we pointed out then this is where we'd get. We would get to be debating on the floor of this House what kind of compensation members in the private sector ought to have.

Well, Mr. Chairman, that's a dangerous place to be. It's a dangerous place to be because it leads Presidents to thinking that they can remove CEOs from private companies. That's where it leads to. It leads Members of Congress to believe that they can call on the Treasury Department to get money out of previous bills that have been passed in Congress even though the institution in their district doesn't qualify under the rules that have been provided.

Mr. Chairman, it's a dangerous place to be. And it violates the Constitution. I know it's a quaint document, Mr. Chairman. We don't think about it much anymore. But article I, section 9 says, ``No bill of attainder or ex post facto law shall be passed.'' Mr. Chairman, this bill is each. It is each.

Mr. Chairman, this is a bad step. It's a bad and a dangerous step for this Congress. It adds to the dangerous and reckless--and reckless-- policies of this administration that the American people recognize as not being consistent with American fundamental principles--the market principles that have made this Nation the greatest Nation in the history of mankind.

Mr. Chairman, I urge my colleagues to recognize this bill for what it is, and that is a bill that this Congress ought not adopt.

I yield back the balance of my time.

Mr. Chairman, reserving the right to object, I just received this.

My understanding is that this is removing the words ``executive or'' among those individuals who would come under the jurisdiction of determining what compensation ought to be or performance ought to be, so that it would read that ``any employee.'' Is my understanding correct?

And I appreciate that. Continuing to reserve the right to object, my sense is that what this is, is actually a clarifying amendment to a greater intent by the Members on the majority side who----

Mr. Chairman, I am pleased to yield 2 minutes to the gentleman from Nebraska (Mr. Terry).

I claim the time in opposition to the amendment.

And I yield 2 minutes to the gentleman from Nebraska (Mr. Terry).

I yield the gentleman an additional 1 minute.

Mr. Chairman, I am pleased to yield to the gentleman from New Jersey (Mr. Garrett) for 5 minutes.

I yield the gentleman 1 additional minute.

I have no speakers remaining, and I will consume the rest of our time when the gentleman is ready to close.

Mr. Chairman, may I ask how much time remains?

Mr. Chairman, I think it is important to appreciate that this bill is very far-reaching. It is not just a simple little exclusion of an amendment that was inserted in the middle of the night on the previous $1 trillion spending bill that the majority passed.

It includes compensation arrangements and includes compensation limitation potential by the Secretary of the Treasury. It also includes performance-based standards that are also defined by the Secretary of the Treasury. Now what does that mean? The performance in the bill or the performance of an individual executive or employee to whom the payment relates? The adherence by executives or employees to appropriate risk management requirements? And ``other standards which provide greater accountability to shareholders and taxpayers.''

What is all that?

Well, Mr. Chairman, I would suggest that we don't know what all that is. And that is why the American people are so concerned about these issues. Because they know that the faith that they have in the American system of government and the American marketplace does not rest in the Secretary of the Treasury. It does not rest in the government. It rests in the ingenuity and the vitality of the American people. And that is where they want it to remain.

Mr. Chairman, I claim the time in opposition, though I am not opposed.

Mr. Chairman, I want to commend my friend from California for introducing this amendment. I think that it's a good idea, but in my view, doesn't go far enough. I would also point out that it is purely arbitrary, and that gets to the heart of the challenge that we have here, the arbitrary nature of what we're deciding.

Small financial institutions should be automatically exempt from this legislation. The best approach to protecting the taxpayers' investment in private business is through stronger oversight and accountability, not by further entrenching government in the operations and management of hundreds of businesses across America, many of which are community and regional banks that did nothing, as my friends have commented, to create the current financial challenge.

Indeed, given the government's track record in piling up huge deficits and mismanaging a wide range of Federal programs, there is little reason to believe that it will have any more success in running private enterprises.

The amendment leaves the discretion to the Secretary of the Treasury to exempt community financial institutions from the legislation's compensation prohibitions.

I would suggest, Mr. Chairman, that rather than leaving this responsibility to the Treasury Secretary who, I might add, failed to block the AIG bonuses and who, by his own admission, has a very full plate these days. Why not simply exempt smaller TARP recipients entirely from the government micromanagement of compensation levels for all employees that this bill imposes?

I would reserve the balance of my time.

Mr. Chairman, how much time remains?

Mr. Chairman, I yield the balance of our time to Mr. Bachus from Alabama.

Mr. Chairman, I claim the time in opposition, though I am not opposed to the amendment.

Parliamentary Inquiries

Mr. Chairman, parliamentary inquiry.

If I claim the time in opposition, does the minority have the right to claim that time?

Parliamentary inquiry.

Does the chairman of the committee not have time available to him on general leave?

Mr. Chairman, I claim the time in opposition.

Parliamentary Inquiry

Mr. Chairman, I would point out that the amendment is a curious one. It points out the challenge that we have when we march down this path of a political economy--where Members of Congress are deciding specific items for private enterprises and where the Secretary of the Treasury is about to be given remarkable authority, whether it is retroactive or prospective. That is why many of us on our side of the aisle oppose this kind of launch into a political economy where the government controls winners and losers from the very beginning.

If, in fact, the challenge were to protect taxpayers, as our friends on the other side of the aisle say, if Democrats were so eager to protect taxpayers, then why would they not commit to ending taxpayer- subsidized bailouts? That is the simple solution to all of this, Mr. Chairman.

The reason we are here in this circuitous logic of Washington is that the taxpayers are benefiting private industry. The solution to this, Mr. Chairman, is to make it so we are not putting taxpayer liability, hard-earned taxpayer money, on the table for private industry.

Why don't they guarantee that they will not provide the Treasury with any more TARP funds for the future?

Point of Order

Why don't they encourage the Treasury to produce----

Point of order, Mr. Chairman.

As a matter of fact, had the gentleman been listening to my debate, I pointed out, whether it was prospective or retrospective, that it was a bad idea for this Congress to adopt because it further launches us down the road of a political economy.

May I inquire as to the time remaining?

Mr. Chairman, as I was saying, if our friends on the other side of the aisle were so enamored with wanting to protect the taxpayer, why wouldn't they encourage the Secretary of the Treasury and the Treasury Department to produce an exit strategy to this launch into a political economy that stifles creativity,

that stifles entrepreneurship, that stifles vision, that stifles the very vitality of the American system, a system that has created more opportunity and more success for more individuals than any Nation in the history of mankind?

Mr. Chairman, I would suggest that this amendment and others to this bill, to the underlying bill, are a launch in the wrong direction whether we are talking about prospective or retrospective activity on this amendment.

I am pleased to yield to my friend from Alabama for the remainder of our time.

Mr. Chairman, I understand I have 30 seconds.

I am pleased to yield my 30 seconds to the chairman of the committee.

Mr. Chairman, through a previous understanding, I claim the time in opposition, though I am not opposed.

Mr. Chairman, I want to commend my friend from Florida for his appropriate reading of the bill and appropriate correction through this amendment in clarifying that TARP recipients will not be subject to the requirements as a result of doing business with a TARP recipient.

I would suggest, however, Mr. Chairman, that the reason that it feels so peculiar, this whole debate feels so peculiar is because the American people know that the reason we're standing here today is because we went beyond the bounds of what government ought to be doing. And so my friend from Florida recognizes an appropriate flaw in the underlying bill and has appropriately corrected it by his amendment.

But, Mr. Chairman, the real flaw is the action that this Congress has taken and this administration, and Mr. Chairman, the previous administration in moving our Nation into an economy that is no longer market-based but is politically based. That is a very dangerous place to be.

So I want to commend my friend from Florida for what he has done for his amendment.

I urge my colleagues to support this amendment.

I yield back the balance of my time.

Mr. Chairman, as one amendment after another continues to show, this is a very dangerous road we're on, and I would underscore that for this amendment.

This amendment fundamentally undermines the purpose of a board of directors. This says that the shareholders, the owners of the company, will set the compensation for individuals not at the board of directors level but on down in the company.

Now, why should we stop there, Mr. Chairman? Why should the shareholders not decide where the corporate headquarters is? Why should the shareholders not decide, in a binding way, what type of business endeavor the company goes into, whether it expands into this area or that area? Why should the shareholders not decide on any employment decision?

Well, Mr. Chairman, the answer is very clear, and that is because that's not the way to retain whatever remnant we have left of a vital American economic system.

My friend cites the nation of the Netherlands, the European companies. Mr. Chairman, there's a reason that the American economy has been the greatest economy in the world, and that's because of the structure that we have that allows shareholders to participate in appropriate, nonbinding decisions.

What are their options as shareholders if they don't like the way a company is running? Well, they have two, and you know what they are, Mr. Chairman. They could vote ``no'' or vote for a different board of directors, which is their direct input into the running of the company, which gives it that vitality and that vibrancy. Mr. Chairman, they can sell their shares. That's the beauty of the system.

My friend from Oregon wants to have the shareholders be not just the owners but the managers of the company. You talk about dampening the vitality and the spirit of the American entrepreneur. You talk about inserting into the board of directors' room a situation where you can't begin to expand in a way that you ought to expand. You can't begin to grow your business in the way that you want because the next step from here, Mr. Chairman, is to move it on to further discussions and debates and decisions within the board of directors.

Mr. Chairman, this is truly a very poor idea. It's an idea that this Congress should not embrace. It's an idea that, again, further gets us down to the Congress deciding in a very political way who ought to be winners and losers. You can just imagine the logical extension of the waywardness of this kind of amendment.

So I urge my colleagues to vote ``no'' on the amendment.

I reserve the balance of my time.

Mr. Chairman, what time remains?

The gentleman, the author of the amendment says that it's difficult to vote on board of director elections. Well, it may be a little challenge to fill out a form that comes in the mail. It may be a bit of a challenge to get to headquarters to vote, but in fact, that's the way that shareholders have their input, and it's an appropriate way.

And the real response to his dilemma, his concern, is that if 50 percent, plus one, of the shareholders vote a member of the board of directors out, that member of the board of directors is gone, and therefore, there's the accountability. And that's imperative that we retain that.

What does this amendment mean? This amendment means, again, that the shareholders become not just the owners of the company but the managers of the company. And that's, again, Mr. Chairman, not the way that you allow and create a vibrant and incisive and wonderful entrepreneurial spirit across this land that has resulted in the remarkable success of the American economy.

What this amendment means is that pension plans and retirement plans are put at risk because if we allow shareholders to become not just owners of companies but managers of companies, then the result will be that companies will not be able to institute the kind of wonderful opportunities for their businesses and, hence, their shareholders.

So I urge my colleagues not to march further down this road. This is a road upon which we should not be; but, Mr. Chairman, we find ourselves moving headlong in the direction of greater governmental intervention into the private industry in a very dangerous way.

I urge my colleagues to oppose this amendment.

I yield back the balance of my time.

Mr. Chairman, every day brings news of a new government program, a new government intervention, a new government mandate, or a new government tax. Most of them share the same thing: they are large.

This bill claims to be about executive compensation. But what it really is is just another step expanding the size, the involvement--and more importantly--the control of the Federal Government into not only the private sector but into all aspects of our lives.

That's our concern. Yes, it's about this bill. But, yes, Mr. Chairman, it is about much more than this bill. You're right about that.

Sometimes the expansion is subtle, as in the case of this bill. Sometimes it's more direct, more obvious, like the budget that we will vote on as soon as tomorrow. We are witnessing in light speed in just the past few months--and then the budget will pass in the next few years as it goes into effect--a relentless and massive expansion of the

Federal Government. And I, for one, Mr. Chairman, am concerned. Outraged? I would say ``fear'' and ``concern'' are better. But I do believe that as the years go by and we look back on what we've done and what we will do in this next year, I believe the American people will be outraged.

As a Member, I took an oath to uphold the principles of the Constitution which intentionally and specifically limited the power of the central government. Would our forefathers have ever considered giving the government a say on how much a private citizen earned, the so-called say-on-pay? In reading both the Constitution and the Federalist Papers, it clearly appears they would not.

I think most Americans believe our Founding Fathers had it right. I applaud the chairman's honesty. For years, he has advocated a government role in limiting the amount of salaries.

Later tonight, we will consider a budget. As we have said repeatedly--and we are going to say again today--it spends too much, it taxes too much, and it borrows too much. It expands the government control on a scale that we've not seen before, not even in the New Deal. It spends more money in this administration than was spent from the time of George Washington to George Bush. The majority criticized Bush for the deficits, and now they will double and triple them in the next 10 years under their proposal.

The scope and reach of this legislation is breathtaking. If you had told me a month ago--and I will recognize the chairman. I will yield to him in a minute when I get to the particulars on this bill.

If you had told me a month ago that Congress wanted to increase the tax burden on charitable contributions, I would have said it's an April Fool's joke. But the fact is that if donations to charities go down, the government will say it has to step in. But there will be a big difference. The government will be choosing what it wants to support and how. It can support groups like ACORN instead of my local church or local charity. Instead of allowing people to support their own causes and make their own choices about their charitable contributions, the government will expand into what will obviously and clearly be a restriction on private charities as their funds are restricted.

Unfortunately, it wasn't an April Fool's Day joke, and that's what is being proposed this very week, restricting private contribution, and there's a pattern developing here.

Just this week, we saw a government mandate to change the management of General Motors. Regardless of what you think about the performance of the CEO--and I don't think it was good. I, for one, do not defend his stewardship. But do we want the Federal Government making such far- ranging decisions on hiring and firing and setting salaries and job descriptions for everyone from the manager to the receptionist?

This is all about government control, government command and control, running an economy, not according to free enterprise principles, which many of my Democratic colleagues admittedly and honestly don't agree with. It is about making business decisions based not on competitiveness but based on social goals.

Does anyone really believe that a government that is about to add $10 trillion to our debt, to our children and our grandchildren, has any expertise at all in telling the private sector how to turn a profit?

During the campaign, President Obama said, ``So if somebody wants to build a coal-powered plant, they can. It's just that it will bankrupt them because they're going to be charged such a huge sum for all the greenhouse gas that's being emitted.''

Later today, we will take a step down that road with cap-and-trade. We're going to raise every American's utility bill if that utility is fired by coal.

We hear the government will require the automobile makers to produce green cars. No one argues with the idea of cleaner-burning cars, but maybe someone should ask consumers whether they can afford to spend several thousand dollars more to buy them or whether such a policy will end the need for taxpayer support. I think not. I think it will make General Motors less profitable, and the taxpayer investment will certainly be at risk.

This is the problem with government getting involved in the management of business. Decisions will be based on the government's political agenda and not sound economics. There will be no limits to how far this can go and will go.

Will the government start telling companies we'd like to review your advertising to see if you're sending the right message or spending too much? Will the government tell drug companies, who market similar products, we think there's too much competition, maybe you should combine products or merge to make prices cheaper? Now, you don't have to do that, but if you do business with the government, you do. Some believe less competition leads to lower prices. I don't think this is the case at all.

Now, the legislation before us today, it gives the Treasury Secretary and a board, all unelected, headed by a Harvard professor, wide discretion to formulate performance-based compensation standards for hundreds of banks across America. Who does the legislation apply to? Let me read the legislation: Compensation payment to any executive or employee under any existing compensation arrangement.

Any executive or employee? Line 23 on page 2, Mr. Chairman. Every employee. There is nothing in this legislation to prevent the Secretary from deciding that one measure of performance is where the loan officers are approving loans to favored constituencies that the administration may believe are entitled to a loan or to credit. That was precisely the type of government allocation of capital and decisions that helped lead us into the housing bubble and the collapse of Freddie and Fannie, at a cost of hundreds of billions of taxpayer money.

In 1999, I introduced into the Record on this House floor the article from the New York Times, not a friend of the minority, which said, first, the government directed that you would make home loans to people with poor credit, and then it went further and said not only with poor credit but without a down payment. Part of the reason we're here today is because the government did that. There's no question that we need more performance-based pay decisions, but the government deciding and judging the performance of employees and private companies? The Secretary of the Treasury deciding whether an employee is performing? I think not.

The answer is not a dramatic expansion of government control. That hasn't worked in any country. It didn't work in Russia. It didn't work in China. It's not working in North Korea, and it's not working in Cuba.

The American economy has always attracted entrepreneurs and business investment because it has been free of the political risk present in developing and socialist countries. We have attracted investment and have maintained a strong currency because of the belief in foreign investors, whom we depend on and must have to support not only this economy but the spending that is proposed. In fact, more than half the borrowing going forward for this new budget will have to be borrowed from citizens in just three foreign countries. Without those assumptions, the budget doesn't work. Without the assumptions, there's more deficits. Without those assumptions, without that foreign investment, we default on our obligation.

As I say, we have attracted investment and a belief that we in America are productive, specifically because of the belief that our government does not take arbitrary and punitive actions to negatively affect business operations. It doesn't break contracts, it doesn't confiscate property, and it doesn't set salaries.

Let me close by saying I honestly fear, Mr. Chairman, that this bill and the overall thrust of what we are hearing from this administration is tilting that delicate balance. The implications for our competitiveness as a country, our economy, and the prosperity of our citizens and their freedoms are disturbing.

In the end, America has succeeded by putting its faith not in government but in the people. That's what the Constitution is all about, and I, for one, will always trust the people and always distrust the government. I make no

apology for that. The solution is not this bill. What we need is a strategy to get the government out of the bailout business, out of the taxpayer bailout business, with no further intrusions into what should have been and needs to be and will need to be in the future, private decisions.

Mr. Chairman, you and I can come to an agreement, and that agreement can be no further government bailout. That is the only way to avoid more government interference, more government control, and ultimately, the loss of not only our freedom but our prosperity. I appreciate the honest differences here, but I accept fully your statement that we on this side are outraged. We're fearful, we're concerned, and we become more so every day.

Mr. Chairman, I just want to ask the sponsor a question. You have included in the original, in the legislation before us, it includes all financial institutions who accepted TARP money; is that correct?

I ask the chairman of the full committee.

This only involves capital infusions.

What about AIG? Would they be included?

So it's all TARP.

And I'm sincerely trying to--and I think amendment is an improvement. And I think the basis for it, as you both said, we don't want to limit the salaries of people who were not at fault.

I think what this bill, Mr. Frank, what, Chairman Frank, you're attacking is what you've called a, and I know the sponsor of the bill said last night that the people who have been ripping off the American taxpayer by stealing money and sucking it into their own pockets.

That was his. But I guess what I'm saying, I think the philosophy behind this bill is we, the taxpayers, are going to come into people who caused this problem and limit their salaries; at least that's what he has said on two or three occasions.

But I guess my question to you, what about the institutions that have not caused any of the problem and were urged to take the money by the Secretary of the Treasury, and even those last week, you know, again, the President, last week, urged these companies to keep the money and not to return it. And I guess----

Yes.

But now do you realize, and I believe the chairman is sincere, do you realize that while you're urging them to return it, the President and the Secretary of the Treasury are saying, please don't return it because when you do, it will restrict or reduce lending?

But my question to you, Chairman Frank, is, this bill applies to all employees of all these institutions, does it not?

Yes, it does. It covers every employee and every financial institution, the several hundred who were actually urged last week by this President to keep the money and which we're getting a 5 percent dividend.

Mr. Chairman, would the gentleman who is controlling the time yield to the ranking member?

Mr. Chairman, the gentleman who offered this amendment expressed some reservations about the underlying bill in that it would affect employees and executives who were not at fault and who, in some cases, did not ask for the money.

In the interest of fairness, I would like to hear from the chairman of the full committee as to whether or not he shares the gentleman's reservations and my reservations also. I would yield to the chairman.

Chairman Frank, a member of the majority on your committee expressed strong reservations about this bill and about it affecting all employees.

At this time, I would like to yield the remaining amount of time to the gentleman from Massachusetts.

Mr. Chairman, I rise to claim the time in opposition.

I yield myself 4 minutes and also ask the sponsor of the amendment if she would remain on the floor because I have a question for her, and also the gentleman from New Jersey has a question.

Mr. Chairman, the underlying bill applies to any executive

or employee of these companies. The amendment by Mrs. Dahlkemper defines payment as payment before employment, during employment, or after termination of employment, which almost appears to be almost a cradle-to-grave period of time.

Having said that, I have got specific concerns. I'd like to engage in a colloquy with the gentlelady from Pennsylvania about her amendment.

Would your amendment enable the Treasury Secretary to establish compensation standards for employees after they retire?

I thank the gentleman from Georgia. And I also thank the gentleman from Massachusetts, for I agree with him, as most Americans do, with regard to the underlying bill here as far as the apparent excesses, as far as the salaries that some people made when they were underperforming companies. And I share the concern that taxpayers have, and I share the chairman's concern with regard to his overall amendment that he makes to the bill. But the underlying bill here, however, has three or four fundamental problems.

One, it is unconstitutional, as some have said; secondly, it has an uncalled for retroactive effect; thirdly, there is this unfairness as we treat disparate individuals within the same company; and, fourthly, there is certainly a harmful impact upon the very programs that our now Secretary of the Treasury wishes to implement.

On the unconstitutionality portion, I am unclear, as are outside experts who have looked over this legislation, to see exactly how it is within the powers of the U.S. Congress, as much as we may like to do so sometimes, to simply go in and abrogate contracts that were voluntarily made by willing parties on either side. Regardless of whether the fact is that those companies or those individuals may be receiving Federal dollars or not, whether there is a constitutional ability to do so is a question I think that this body should be addressing and how that can be answered.

The second aspect is the retroactivity effect. Some of the provisions in this bill I could probably come to agreement with. But to step in here, after the fact, and say that we are now going to go back, backwards in time and look at those very same corporations who had entered into contracts, had activity prior to their receiving TARP funds or other Federal dollars or investments, capital investments, and now saying, we are going backwards and we will basically open up agreements and open up terms of deals over there and look back on them, seems to be an activity that Congress should not engage in.

Prospective is another matter. For companies or banks or other financial institutions that want to engage and receive Federal dollars, absolutely. They should be knowing what the terms of the deal are on the table. And if they accept them today, then those are the deals going forward. But to go backwards in time really raises, as I said before, an unconstitutional aspect.

Finally, the unfairness as far as the disparate treatment that you may receive within the same company. I think the basic outrage that most Americans have on this situation is when we read in the paper the multimillion dollar deals or bonuses that people received, especially in those failing companies, and say, How do they receive millions and millions of dollars? Well, this bill addresses that. Fine. But it also addresses that secretary who may be just working there on weekends or part-time or even full-time making slightly over $10 an hour or more. That secretary comes within the confines of this bill too. The custodian or other worker in the business would also fall within the purviews of this legislation.

Now the answer might be, well, we are still going to look to see whether their payment is reasonable or excessive. But why we would pick on those individuals who did absolutely no wrong and to say that now Congress is going to be scrutinizing your salaries and see whether or not you were paid far too much for the activities that you did in the company is beyond me.

Finally, the fourth portion, harmful. Secretary Geithner comes out, finally, after several failed attempts with his plan on how we are going to get out of this global morass that we are in right now, and how does he want to do it? He and the White House have opened their doors to the free enterprise system, the capitalist markets, and the banking and the financial institutions, as they did this past week and said, Come on board. Work with us as teammates in this. We want to make you partners. Partners? What partner wants to hook up with somebody that if you are successful, there may be other legislation like this that will go in and claw back the money that you made? If you're successful it may be clawed back. And I have heard some people say, If you're unsuccessful, maybe you will be penalized.

And I appreciate the fact that the chairman in Rules Committee yesterday said, to paraphrase, he said, Fear not. If it goes through my committee, I would not permit such language to go forward. And I appreciate that. But as the chairman knows, the bill we did, I think it was last Thursday, the 90 percent tax, to the best of my knowledge, did not go through your committee. You and I may have liked it to. But it did not.

So we have seen the way this House operates. When the mood drives the Speaker or the majority leader, they can pass a bill through. A 90 percent tax that basically makes the Tax Code the penal code and punishes people for activity that they never realized was unlawful or inappropriate before, did not go through his committee. So to all of the best wishes of the chairman, he unfortunately, may not have that ability to block that provision going forward as much as he and I might wish that he did. So the legislation that is before us still puts that harmful impact upon him.

And finally, if I still have some time, we have to ask the larger question, what actually does this do at the end of the day? Is it window dressing? Maybe.

What did we actually do? Well, it puts language in here which says that there cannot be excessive or unreasonable compensation. Yesterday, again, at Rules Committee, somebody from our side of the aisle and someone from the other side of the aisle asked, What is excessive or unreasonable compensation? And quite candidly, they said they couldn't answer the question. They will leave it to someone else.

I'm not sure if that is the right answer to that question. If you're going to have legislation like this, and I don't support the legislation, but if you're going to have legislation like this, you should be doing it the way we dealt with Fannie and Freddie when we had that situation and say, We don't want anybody making more than X, and take the responsibility as Congress and say, We are going to put the dollar amounts in it. This doesn't. This abrogates that to a Secretary of the Treasury who can come up with who knows what? It could be $1 million. It could be

$10 million. It could be $100,000. It could be $50,000.

We should not be putting this ambiguity in here. It doesn't answer the question. It is just one more way to say that this is a potentially harmful, unconstitutional, retroactive legislation to the overall global climate that we are in today.

This bill does three things. First, it requires the issuance of regulations defining excessive and unreasonable compensation and applies them only to those who are holding our capital. As the Chairman pointed out, similar legislation is already law and was voted in favor of by the Republican leadership.

The bill we passed in October of last year specifically required the Treasury to issue appropriate standards for executive compensation--not for every company in America, but for those that are holding our money. Clearly, this new language will provide additional impetus for Treasury to issue appropriate regulations.

There are other things the bill does. First, it deals with excessive bonuses and the provision that Senator Dodd is now famous for having added to the recovery legislation.

As I think every Member of this House knows, Senator Dodd had a provision that he added--and he was prevailed upon to cause his provision not to apply to preexisting contracts.

Since then, those on the other side of the aisle have done two things that strike me as inconsistent. They have denounced Senator Dodd's amendment and the philosophy behind it, and they have denounced the fact that it doesn't apply retroactively to preexisting contracts. This is like announcing that you detest the taste of broccoli and complaining that you didn't get a double helping. It makes no sense except for those who simply want to find something to denounce.

This bill eliminates the exception that Senator Dodd has been so viciously criticized for by the other party. If you vote against this bill, then you are embracing the very exception that many of you have been vilifying.

Third, this bill has a disclosure provision that I authored. It says that companies that are holding our TARP money must disclose how many of their employees are getting a total compensation package of over $5 million; how many have a total compensation package of over $3 million; how many over $1 million. Why? Because if the American people are putting up the money, they have a right to know.

Now the self-styled ``defenders of capitalism'' say that we've got to protect these companies from the influence of the taxpayer. How is capitalism actually supposed to work? Those who provide the capital and take the risk are supposed to have some control. That's real capitalism. The taxpayers are taking the risk with these companies. We hope to get our money back. As soon as we do, the companies can operate as they will.

Instead, we're told that we need a kind of cancerous capitalism--a system that works like this: Socialism for the risks, capitalism for the rewards.

I don't think Adam Smith would have voted for the TARP bill. The gentleman from Alabama did. I voted against it. But I do think that economist Adam Smith--not our colleague from Washington--would vote ``yes'' on this bill because those who provide the capital should control--or have at least some control--of the enterprise. And that includes some control over compensation.

To say instead that firms should take our money but not listen to our ideas on how it should be used, that isn't

capitalism. That is socialism for the rich.

Mr. Chairman, I ask unanimous consent that the time on the amendment be extended on both sides by 30 seconds.

I thank the gentleman.

Mr. Chairman, I would point out that the amendment, as written, means that the bill does not apply to any company that has already received a TARP infusion of capital. It applies only to those who receive infusions of capital in the future. The Treasury Secretary has announced that he is not going to make any infusions of capital in the future. He is going to use the TARP money for a completely different program. So the effect of the amendment is to gut the bill.

I thank the Chairman.

I think a lot of us would like companies to repay the TARP money as quickly as possible. I think that's true of those who voted against the bill, and I think it's true of many of those who voted in favor of it. And I might support this amendment if it was one that required companies to repay in a 6-month schedule, or a 1-year schedule.

But this amendment allows companies to escape all the provisions of the bill just by entering into a schedule of repayment that could be a 10-year schedule or a 15-year schedule. And I don't think that a company should be able to escape the bill just by repaying us the money over the next 10 or 15 years. After all, all of the companies who got the TARP money are supposed to be repaying it; many of them in a shorter period than over the next 10 or 15 years.

Fairness would say that we should not treat a company that's repaying us over a 15-year schedule differently than a company that has not entered into a particular repayment schedule.

So I would hope that we would defeat this amendment because the amendment, as written, would allow a large number of companies to escape the effect of the bill without doing much more than making a few monthly payments, potentially of a very small amount.

As to the issue of retroactivity, there is much discussion over what happened in the Senate, but here in the House, we didn't vote for this version of the Dodd amendment or that version of the Dodd amendment. We just had the conference report before us.

Those of us who voted ``yes'' on the conference report at least voted for a provision that would prevent crazy bonuses in the future. And there are many Members--in fact, the entire Republican side of the House who voted against the stimulus bill. That means they voted against a provision that would prevent huge $6 million AIG bonuses in the future. And their only excuse is, well, they would have hoped for an amendment that would have prevented the bonuses in the past.

When a bill comes before us that would prevent $6 million bonuses from being paid to AIG executives in the future, and you vote against the bill, it is a very small fig leaf to say that you are nonetheless opposed to excessive bonuses.