Federal Employee Accountability Act of 2009

Mr. Speaker, by direction of the Committee on Rules, I call up House Resolution 1487 and ask for its immediate consideration.

Mr. Speaker, for the purposes of debate only, I 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 also ask unanimous consent that all Members be given 5 legislative days in which to revise and extend their remarks on House Resolution 1487.

I yield myself such time as I may consume.

Mr. Speaker, H. Res. 1487 provides for consideration of a rule that allows for the same-day consideration of a conference report to accompany H.R. 4173 and a measure that includes the subject matter addressed by H.R. 4213. Additionally, this rule allows for legislation to be considered under suspension of the rules through July 3, 2010, and allows for the consideration of concurrent resolutions providing for adjournment during the month of July.

Mr. Speaker, this is a simple and straightforward rule. It allows the rules for the Wall Street reform conference report in either the tax extenders jobs bill or subject matters related to the jobs bill, such as unemployment insurance, to be considered on the same legislative day that they report it out of the Rules Committee. This is an important step that must be taken if we are to pass these bills before the Senate adjourns for the funeral of Senator Byrd.

This bill allows for clear actions, up-or-down votes on the conference report to prevent Wall Street from melting down like it did 2 years ago and a bill to provide unemployment compensation to people who have lost their jobs who cannot find work in this economy.

Mr. Speaker, these are clear-cut choices. Either you support fixing Wall Street or you don't. Do you believe unemployed Americans looking for work should receive unemployment benefits to help them pay for their mortgages,

utilities, and food for their families or do you not?

So far my Republican friends have been on the wrong side of these issues. I can only hope that they change their minds and decide to put everyday Americans first instead of continuing to play politics with these issues.

I urge my colleagues to vote ``yes'' on the rule, and I reserve the balance of my time.

Mr. Speaker, my Republican friends have consistently been against reining in the excesses of Wall Street. I'm not shocked that they have that view because they've always had that view. I am dismayed.

But the American people want us to pass a regulatory reform bill. They also want us to extend unemployment benefits to those who are out of work. Unfortunately, my Republican colleagues have been blocking that. So that's what this rule does, allows us to actually do something, and do many things, quite frankly, that the American people want us to do.

I yield 3 minutes to the gentleman from Texas (Mr. Doggett).

Mr. Speaker, I find it interesting that the previous speaker didn't talk about the Wall Street regulatory reform bill that my friends on the Republican side of the aisle have been trying to block.

The minority leader in a recent interview said that the bill that we are bringing forth in Congress, this is killing an ant with a nuclear weapon. I find it disturbing that anyone would characterize this financial crisis that was brought on by Wall Street as an ant. I mean it impacted millions and millions of our citizens.

I will ask to put this interview that appeared in the Pittsburgh Tribune-Review in the Record.

In that same interview, and I think it's important for my colleagues to know, the minority leader talked about his belief that we should raise the retirement age for Social Security to 70. Clearly, we need to talk about how we keep Social Security solvent. But he then went further to say that we should take that money and not put it into Social Security but pay for the war. So our senior citizens should pay for this war, the rest of us don't, but the burden once again falls on our senior citizens.

We know what they're about. We know what their beliefs are. And given an opportunity to take back control of the House, we know that they will try to undo Wall Street regulatory reform and try to undercut Social Security.

Mr. Speaker, I would appreciate it if I were not interrupted while I am speaking. And we know what they believe. And it is in this interview which we will put in the Record.

[From the Pittsburgh Tribune-Review, June 29, 2010]

Obama's Good for GOP, Boehner Says

(By Mike Wereschagin and Salena Zito)

House Republican Leader John Boehner, the Ohio Republican

with his eye on Speaker Nancy Pelosi's gavel, said the tide

is turning the GOP's way.

``The American people have written off the Democrats,''

Boehner said Monday in an interview with Tribune-Review

editors and reporters. ``They're willing to look at us

again.''

Boehner stopped short of predicting Republicans would gain

the 39 seats they need to retake control of Congress, but he

said a backlash against President Obama's policies has

energized Republican voters more than Democrats. Boehner said

voters are angry at a government they believe is overreaching

and indifferent.

University of Virginia political scientist Isaac Wood said

excitement among tea party protesters might not carry over to

the electorate as a whole.

``While the enthusiasm of tea party types may drive them to

the polls and boost Republicans, it does not yet seem that

huge waves of new voters will be flocking to the polls,''

Wood said.

Boehner said the protests are emblematic of deep voter

anger against Washington's leaders.

``They're snuffing out the America that I grew up in,''

Boehner said. ``Right now, we've got more Americans engaged

in their government than at any time in our history. There's

a political rebellion brewing, and I don't think we've seen

anything like it since 1776.''

The health care law passed in March ``pushed most Americans

over the edge,'' Boehner said.

If Republicans retake control of the House, Boehner

promised a vote on a bill repealing the health care law and

replacing it with a scaled-down package of tax breaks and

court reforms. Democrats likely would maintain control of the

Senate, and Obama could veto the proposal, all but

eliminating its chances of succeeding.

``We are going to do everything we can to make sure that

this law and this program never really takes effect,''

Boehner said. One option would be to repeal the $534 billion

in Medicare cuts, which pay for more than half of the law's

provisions. ``They're going to need money from the Congress

to hire these 20,000-plus bureaucrats they need to hire to

make this program work. They're not going to get one dime

from us.''

Boehner criticized the financial regulatory overhaul

compromise reached last week between House and Senate

negotiators as an overreaction to the financial crisis that

triggered the recession. The bill would tighten restrictions

on lending, create a consumer protection agency with broad

oversight power and give the government an orderly way to

dissolve the largest financial institutions if they run out

of money.

``This is killing an ant with a nuclear weapon,'' Boehner

said. What's most needed is more transparency and better

enforcement by regulators, he said.

Allan H. Meltzer, a political economy professor at Carnegie

Mellon University, said the financial bill ``does nothing to

restore integrity to the mortgage market by correcting Fannie

Mae and Freddie Mac, and the bill does not eliminate `too big

to fail.' ''

Boehner said Obama overreacted to the BP oil spill in the

Gulf of Mexico. The spill might warrant a ``pause'' in

deepwater drilling, but Obama's blanket ban on drilling in

the gulf--which a judge overturned last week--could devastate

the region's economy, he said. Louisiana State University

scientists estimate the ban could have affected more than

10,000 jobs.

Boehner had praise, however, for Obama's troop surge in

Afghanistan and stepped-up drone attacks in Pakistan. He

declined to list any benchmarks he has for measuring progress

in the nine-year war, at a time of increasing violence and

Obama's replacement of Gen. Stanley McChrystal with Gen.

David Petraeus.

Ensuring there's enough money to pay for the war will

require reforming the country's entitlement system, Boehner

said. He said he'd favor increasing the Social Security

retirement age to 70 for people who have at least 20 years

until retirement, tying cost-of-living increases to the

consumer price index rather than wage inflation and limiting

payments to those who need them.

``We need to look at the American people and explain to

them that we're broke,'' Boehner said. ``If you have

substantial non-Social Security income while you're retired,

why are we paying you at a time when we're broke? We just

need to be honest with people.''

At this point I yield 3 minutes to the gentlewoman from Florida (Ms. Castor).

Mr. Speaker, my objection about Mr. Boehner's statements with regard to Social Security was that he wanted to take the money from Social Security and pay for the war. Not put it into a Social Security trust fund, not to shore-up Social Security. That's what bothers me, is their continued determination to undermine the Social Security system.

Mr. Boehner said in his interview that we should raise the retirement age to 70, take their money, and put it towards the war. For 8 years, they abdicated their responsibility to pay for the war. Now they want to pay for it on the backs of senior citizens. That's what I object to. That's what I object to.

And the other thing, Mr. Speaker, is that we hear time and time again, Well, we all want to deal with the excesses in Wall Street. We all want to do this; we all want to do that. But when it comes time to do anything meaningful, they are missing in action.

So this is an opportunity for us to get something done, and I urge my colleague to support the bill.

At this time I yield 2 minutes to the gentlewoman from California (Ms. Linda T. Sanchez).

Madam Speaker, my friend from Georgia's proposal represents less than one-tenth of 1 percent of what was borrowed to pay for the Iraq and Afghanistan war. Let's get serious here. And when I see that poster that says ``YouCut,'' what they don't

show you is what they're cutting and what they want to cut is Social Security, and the minority leader made that very clear in his interview, that they're going to basically take money out of Social Security to pay for the wars. Our senior citizens who have fought in wars, who have worked in our factories, who have raised our families are being told to pay for the wars.

I yield 2 minutes to the gentlewoman from Texas (Ms. Jackson Lee.)

Madam Speaker, I hope we all can agree that we shouldn't be cutting Social Security. I hope the minority leader will get on the floor and will retract his statement that we should be cutting Social Security to pay for this war. They have abdicated their responsibility for 8 years, and now they want the senior citizens of this country to pay for this war. I think that's wrong.

I yield 2 minutes to the gentleman from Indiana (Mr. Carson).

If the gentleman wants to know why I think you want to cut Social Security, I am referring to the article in which the minority leader is quoted quite extensively on that issue.

I yield 2 minutes to the gentleman from Kansas (Mr. Moore).

Madam Speaker, again, the proposal that the Republicans are talking about today represents less than one-tenth of 1 percent of the Bush tax cuts that weren't paid for. I mean, where was the fiscal responsibility then?

At this point, I yield 2 minutes to the gentleman from Massachusetts (Mr. Lynch).

Madam Speaker, I yield 30 seconds to the gentleman from Massachusetts (Mr. Frank).

Madam Speaker, I yield 2 minutes to the gentleman from Illinois (Mr. Gutierrez).

I yield 1 minute to the gentleman from Massachusetts (Mr. Frank).

I yield the gentleman an additional 15 seconds.

Madam Speaker, just in response to the last speaker, this gimmick that the Republicans have brought to the floor is really just that--a gimmick. $120 million a year they're going to save. Let me just put that in perspective. Just two policies dating from the Bush administration--tax cuts and the wars in Iraq and Afghanistan-- accounted for over $500 billion of the deficit in 2009, and will account for almost $7 trillion of deficits in 2009 through 2019, including the associated debt services cost.

We need to get serious about dealing with the debt and dealing with our deficit. But let's make one thing clear: When Mr. Bush came to power, President Clinton left him a budget surplus. No deficit. We're paying down the debt. When Mr. Bush left office, he left Barack Obama with a record deficit that he is now trying to dig us out of in the midst of one of the worst economies since the Great Depression. So when they get on the floor with these gimmicks, let's understand what they are--they are gimmicks. If you want to get serious about reducing the debt, then let's get serious about it.

I will tell you one thing I do disagree with him on very strongly. Again, I'll go back to the article I referred to before when Minority Leader Boehner talked about raising the retirement age of Social Security to 70 and taking that money and not putting it in Social Security to keep that program solvent, but then moving it to pay for the wars. I think that is wrong. I think our seniors deserve better than that.

I yield 1 minute to the gentlewoman from Illinois (Ms. Bean).

I yield the gentlewoman 30 additional seconds.

I reserve the balance of my time.

Madam Speaker, how much time do I have remaining?

Madam Speaker, the American people are frustrated. They're frustrated that we haven't passed a Wall Street regulatory reform bill sooner. I think my friends on the other side of the aisle just don't get it. I don't think they understand that an unregulated Wall Street with no checks and balances will produce another economic crisis like the one we are trying to dig ourselves out of right now. The Republican minority leader, Mr. Boehner, said, This is killing an ant with a nuclear weapon. An ant? It was the worst financial crisis since the Great Depression.

America has lost 8 million jobs and $17 trillion of retirement savings and net worth. The irresponsible fiscal policies of the previous administration--and a lot of my friends on the other side-- were much more than an ant to the American workers and their families and small businesses. They have suffered greatly because of Wall Street's excesses. And this notion that somehow we should just let Wall Street continue unregulated I think demonstrates that my friends on the other side of the aisle just don't get it.

Madam Speaker, this rule would also allow for the same-day consideration of an extension of unemployment benefits to millions of Americans who have lost their jobs. Americans are frustrated because they can't understand why Congress can't just approve this. What is the big deal? My friends on the other side of the aisle say, Well, we can't afford it. Yet when it comes to war or when it comes to tax cuts for wealthy people, we are a bottomless pit. But the fact of the matter is, we have an obligation to help those who are suffering because of this bad economy, and hopefully we will do that.

Madam Speaker, let me finally say that when we enact this bill today, this will be tough legislation that will end an era without accountability for Wall Street and big banks that cost us 8 million jobs. It will rein in big banks and their big bonuses. It will put an end to taxpayer bailouts and the idea of too big to fail and protect and empower consumers to make the best decisions on homes, credit cards, and our own financial future. The American people want us to pass this bill. They want us to pass an extension of unemployment benefits, and hopefully by the end of today, we will do both.

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

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

Mr. Speaker, I want to thank the gentleman from Massachusetts (Mr. McGovern) for yielding me time, and I yield myself such time as I may consume.

Mr. Speaker, the rule we are discussing today allows for martial law authority for any bill pertaining to the extenders package as well as what is called the Dodd-Frank bill, which is a 2,300-page government takeover of the financial sector.

Mr. Speaker, this is as much about saving the financial industry as the health care bill was about health care, and it's as much about jobs as the jobs bill supposedly was. It was about the diminishment of jobs, and this is about the diminishment of the financial sector of this country.

Additionally, this rule gives suspension authority through the end of the week for the fifth straight legislative week. Mr. Speaker, it seems like every time I come to the House floor that I point out that my Democratic colleagues are using an unprecedented restrictive and closed process. I think the American people want and need transparency, accountability, and solutions.

I remember just a few short years ago when our Speaker said that she would run a House that was the most honest, open, and ethical Congress. I have yet to see evidence of that these last few years. As a matter of fact, week after week after week I see closed rules, unprecedented shenanigans related to bringing legislation to the floor, and a closed process. I know where it is. Democrats left it out on the campaign trail. It was an empty promise when they made it, and the emptiness of this promise has been fulfilled the past few years by an unprecedented amount of restrictive rules.

Since this Congress has managed to rack up a record $1.4 trillion deficit since 2009, more than three times the size of the deficit in 2008, and are on target to once again hit a $1.3 trillion deficit again this year, my Republican colleagues and I are going to use this time to talk about excessive borrowing, excessive spending, and excessive taxation that seems to be the Democrat majority's agenda.

Mr. Speaker, in an effort to address some of this wasteful government spending that's happening here in Washington, Republicans created something called YouCut. This is an online voting tool for Americans to vote on what wasteful government spending programs they would review, and they can make the decision on what to eliminate.

Today, I have the opportunity to call for a vote on the previous question for this week's YouCut winner, which, of course, I am proud to cosponsor. Hundreds of thousands of Americans have voted this week alone.

Mr. Speaker, I believe the American people are looking for people who can come to Washington, D.C., to make tough choices, and this Democrat majority is not even bringing a budget to the floor of the House of Representatives for the 2011 budget.

Mr. Speaker, I've worked in business, small business, been around lots of people who, every single organization I've ever been a part of, started their year with a budget. I'm shocked and dismayed that this Democrat majority will not bring a budget to the floor, so Republicans will spend their time talking about how we believe we can better the circumstance we're in, talking about YouCut and the American people being engaged in helping to move this country forward.

Mr. Speaker, I encourage all my colleagues to eliminate this wasteful spending by voting against the rule and previous question.

I reserve the balance of my time.

Mr. Speaker, I yield 3 minutes to the Republican whip, the gentleman from Virginia, the favorite son (Mr. Cantor).

Mr. Speaker, to balance out this argument just a little bit, I know we have those that want to characterize what Republicans stand for, but I would like to also address the statements that have been made here on the floor and balance out the attacks against Republicans.

The gentleman Mr. Hoyer on June 22 said this in regards to what our leader Mr. Boehner said, and I quote: ``On the spending side, we could and should consider a higher retirement age, or one pegged to lifespan; more progressive Social Security and Medicare benefits . . . ''

Mr. Speaker, you know, just the unrelenting liberal attacks on this country that have diminished this country's

ability to have a free enterprise system have brought us higher taxes, incredible debt, and a future that diminishes our ability for our children and grandchildren.

I yield 2 minutes to the gentleman from California (Mr. Dreier).

Madam Speaker, at this time I yield 3 minutes to the gentleman from Marietta, Georgia, Dr. Phil Gingrey.

Madam Speaker, I yield 1 minute to the gentlewoman from Topeka, Kansas, Congresswoman Jenkins.

Madam Speaker, I yield 1 minute to the gentleman from Nebraska (Mr. Terry).

Madam Speaker, at this time, I yield 2 minutes to one of the newest Members of this body, the gentleman from Hawaii, Charles Djou.

Madam Speaker, at this time, I yield 4 minutes to the distinguished gentleman from California (Mr. Royce).

Madam Speaker, in order to allow the gentleman from California (Mr. Royce) time to rebut, I yield the gentleman 1 minute.

Madam, Speaker, we're sitting here arguing on the floor about who gets credit for what. I think we ought to give credit. We ought to give credit to the Democrats for taxing, spending, record unemployment, higher debt. And what we're talking about today, this bill, the financial services sector of this country will not be healthy if we do not turn around our economy. And that too, Madam Speaker, is pin-the-tail-on-the-donkey.

At this time I would like to yield 2 minutes to the gentleman from Roanoke, Virginia (Mr. Goodlatte).

(Mr. GOODLATTE asked and was given permission to revise and extend his remarks.)

Madam Speaker, I yield 4 minutes to the ranking member of the Financial Services Committee, the gentleman from Alabama (Mr. Bachus).

Madam Speaker, I yield myself the balance of my time.

I think it's pretty obvious that Republicans today have come down and debated the substance of this rule and the bill. The rule, as it relates to the conference report, is straightforward.

It puts in order on the floor of the House of Representatives today a bill which will be a monstrous spending bill for financial institutions, $18 billion that will be passed on to consumers. It's all done for bigger government. This bill empowers the Federal Government not only to get larger, but it gives them raw power. It gives them the opportunity to be the decision-maker in literally all parts of financial services. I think that's a mistake. I think that the balances and the opportunities that we had had as we have spoken in the last few years, we should aim for safety and soundness, not for overbearing government rules and regulations.

This bill, once again, is as much about the financial services industry as the health care bill was about health care. It's about diminishing the free enterprise system. It's about diminishing people who really should take the role and the responsibility for that which they do. And it's about creating a larger government that will encroach upon every single one of us and ultimately crush us. The Republican Party disagrees with this bill because we think that the time should be spent on this floor to encourage job creation, not to diminish job creation. And that's what this bill does today also: it diminishes job creation. Taxing, spending, bigger government. Of course, I guess it depends whether you are working for the government; you want the government to win or the free enterprise system.

We've looked at the numbers over the last 4 years since Speaker Pelosi's come into office, and we know what that agenda is--taxing, spending, more debt, bigger government, rules, regulations and using every single excuse they can to say, Well, you guys could have done this when you were in. Well, we don't want to do that. We don't want to do this. We don't want the taxing. We don't want the spending. To say that we could have done this, that now we're opposed to it, that's crazy. We don't like this.

We want to be about the free enterprise system, job creation, and the opportunity for people back home to have confidence in this body. We're at the lowest level ever that people have confidence in this body. And no wonder. Taxing, spending, rules, regulations, blaming things on former Presidents. My gosh, grow up. Madam Speaker, no wonder the American people are worried about our country, because the Mickey Mouse still goes on and is going on even today.

Madam Speaker, I ask unanimous consent to insert the text of the amendment and extraneous material immediately prior to the vote on the previous question.

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

Madam Speaker, I demand a recorded vote.

I thank the gentleman, and I commend him for paying attention to a very specific but very important point.

He is absolutely right. We have no intention here of disturbing the well-run State insurance regime. We respect and honor that form of the mutual insurance holding company. The gentleman's interpretation is entirely correct. They will remain subject to resolution under their existing State insurance liquidity and insolvency regimes.

If the gentleman would yield to me, I agree.

As the gentleman knows, our bill does give the SEC the power we expect them to use to impose greater fiduciary responsibilities on these people. The consumer protection bureau will be a very powerful one. It will be dealing with financial products in the lending area and elsewhere. It was not intended to duplicate existing regulation. So, in fact, as the gentleman knows, we enhance the regulatory authority of those entities he mentioned,

and there is no intention whatsoever, nor is there language, I believe, that would lead to duplicate supervision by the consumer protection bureau.

If the gentleman would yield to me, he has been a leader in this important area, and he is a careful lawyer and understands that just saving a principle isn't enough. You've got to make sure it is carried out. Dealing with a conflict of interest that he has been a leader in identifying is essential if this is going to work. So I completely agree with him. Yes, we mean both of those subsections, and it is a mandatory rulemaking.

I will say to my neighbor from Massachusetts that we will be monitoring this carefully. They can expect oversight hearings because, yes, this is definitely a mandate to them to adopt rules to deal with what would be a blatant conflict of interest in the efficacy rules, and we intend to follow that closely.

I just want to correct the wholly- inaccurate-because-of-being-incomplete history of the gentleman from California. He blames the Senate Democrats for not passing a bill. I didn't hear him infer, maybe I missed it, that the House was then in control of the Republicans, and the House didn't pass that bill either.

The gentleman from California had an amendment that he liked. He was repudiated by his own party, overwhelmingly. Now, I am sorry he wasn't more persuasive with the Republicans. I am sorry that the chairman of the committee and the current leadership of the House and the then leadership of the House voted against him, but you can't blame that on the Democrats. And, in fact, what the Senate Republicans offered was the House Republican bill.

If the gentleman will yield to me, yes, I absolutely can. Let me say this is consistent with the leadership the gentleman from Illinois has shown in dealing with risk factors. Up until now, and until this bill passes, we have been automatically assessing institutions solely on the basis of their assets or their amounts. We want to discourage excessive risk and make those who take the risk bear a fair share.

Here the gentleman is clearly correct that to the extent you have got a tax exemption because you engage in charitable activity, in effect you shouldn't get assessed on that basis.

The gentleman has gone further. Smaller banks in this country will be the beneficiaries of an important piece of this legislation, thanks to his leadership. The riskier the bank's activity, the higher their FDI assessment will be in general. That is an important piece of it, and this particular application of it for these charitable institutions is essential.

Madam Speaker, the gentleman from California still won't be forthright about this.

The Republican-controlled House, chaired by Mr. Oxley in the committee, passed the bill that he objected to. He said I was successful in defeating it. No, I played a fairly minor role under Mr. DeLay and the Republican leadership. Mr. DeLay did not take advice from me. If Mr. DeLay took advice from me, he wouldn't have gone on the dance show. I would have advised him against it.

The fact is that it was a Republican House that passed the bill the gentleman is denouncing, and I don't know why he keeps mentioning history and leaving that out until he has to be reminded.

He did offer an amendment. He was overwhelmingly defeated. More than two-thirds of the Republicans voted against him.

By the way, as to my own view, yes, in 2003 I said there was no problem. In 2004, after President Bush, while the Republicans controlled Congress and didn't hinder him, ordered Fannie Mae and Freddie Mac to increase their purchase of loans from people below the median, I changed my position. So I joined the Republican leadership of the House as a fairly minor player in supporting legislation.

He was against it, and I would just make that point again.

I don't understand the purpose of giving such a partial history. He neglects to mention in 2007 when the Democrats took the majority and I became chairman, we passed the bill that he couldn't get passed in 2005, because we worked with Secretary Paulson, who acknowledges this in his book.

So, yes, in 2003 I was not concerned, but by 2005 I was.

I thank the gentleman for yielding.

I rise in opposition to this rule and to the underlying legislation. I rise because reform is desperately needed, but the reforms needed most are not in this bill.

For example, this legislation fails to reform the government- sponsored enterprises, and when you think about it, the housing crisis and the meltdown that we saw in that sector, and most of the losses, were in the government-sponsored enterprises.

That was not caused by a lack of government intervention. Each of those failed institutions had a regulator overseeing it, but it was Congress, especially with the GSE Act, actively tying the hands of those regulators in what amounted to a failed attempt, maybe for a good social end, the idea was to get everybody into a home. But to do that by putting these mandates on the GSEs that 50 percent of the portfolios that they held, 50 percent of that $1.7 trillion in portfolios that they held be in subprime and Alt-A, obviously, obviously created very real problems.

The political intervention to get the 20 percent down payment down to 3 percent and then down to zero obviously had an effect. These institutions, Fannie Mae and Freddie Mac, were at the center of the housing market, and they were largely responsible for some 70 percent of subprime and Alt-A mortgages throughout our financial system.

In order to reach the affordable housing mandates that Congress enacted in 1992, Fannie and Freddie became the largest purchasers of these junk loans, ending up with $1.8 trillion. In essence, they made the junk loan market.

Knowing of the systemic threat posed by these institutions, the Federal Reserve actually came to Congress, came to us a number of times, over a dozen times, and asked us to rein in their excessive risk taking. And when you hear the arguments back and forth about, well, at one point or another we tried to have legislation to address this, ask yourself this. I will remind you of this. What the Fed wanted was the ability to deleverage these portfolios. What the Fed wanted was the ability to control Fannie and Freddie for systemic risk, and that is a responsibility that Congress would not give them.

In 2005, that debate came to a head, and under the leadership of Chuck Hagel and Richard Shelby, Senate Republicans moved a bill, supported by the Fed, through the Banking Committee that attacked the heart of the problem, the excessive buildup of leverage and risk within the mortgage portfolios. And, as the Wall Street Journal said, the White House, Treasury Department and Federal Reserve lined up behind Mr. Shelby. But he was never able to bring his bill to the floor because of opposition from Democrats. Both in the House and Senate, Democrats were aggressively trying to defeat our efforts under the guise of protecting affordable housing. Mr. Dodd and Mr. Sarbanes blocked those reforms in the Senate.

Luckily, some Members from the other side have noted this failure. In

2008, President Clinton said, ``I think the responsibility that the Democrats have may rest more in resisting any efforts by Republicans in the Congress, or by me when I was President, to put some standards and tighten up a little on Fannie Mae and Freddie Mac.''

It is unfortunate that we lost that battle. Our housing market, our financial sector and the broader economy are dealing with the consequences of that very systemic shock that the Fed had anticipated and warned us about.

Today, despite what some may claim, we are not advocating for the elimination of the GSEs tomorrow, but we want them addressed in this legislation.

I thank the gentleman for yielding.

I am ready to recognize, Chairman Frank, that you were successful in defeating that amendment. You were successful, and certainly a majority of this body, including many Republicans, joined you, and I think in 2003 you stated it well in terms of this perspective. You said, ``I do think I do not want the same kind of focus on safety and soundness that we have in OCC and OTS. I want to roll the dice a little bit more in this situation towards subsidized housing.''

This was an argument that gained ground on both of sides of the aisle, there is no doubt about it, but at the same time, it was the Fed that supported my amendment that I brought before this body in order to try to give the Federal Reserve the ability to deleverage these portfolios in the interest of safety and soundness.

This is a debate we have had many times. We had a different perspective. But today going forward, we are expanding systemic risk in many ways in this legislation.

This bill has good in it. It really does. It has enhanced consumer protection similar to what the Federal Reserve has enacted. It has greater transparency and disclosure. In the field of derivatives, it has provisions to prevent companies like British Petroleum from manipulating the market, as they did last year. But there's a lot of bad in this bill, and there's a lot of ugly. I'm going to talk about the bad when I address the bill. And the bad is some capital requirements on companies that could cost a trillion dollars. And that's a greater amount than the two stimuluses put together. That could cost hundreds of thousands of jobs.

But right now I want to talk about the ugly. And the ugly is the bailout of creditors and counterparties. This is a Wall Street bailout bill, make no mistake about it. This bill says that the FDIC can lend to a failing company. Now this is a company that is failing. They can't meet their obligations. You loan a failing company money. You can purchase the assets. This is the government purchasing the assets of the largest financial companies in America. They can take a security interest in the assets. They can guarantee the obligations of the firm. We did that with Fannie and Freddie. We told the Chinese bondholders, We'll pay you a hundred cents on the dollar. And with AIG we did the same thing. We told the European banks, we told Goldman and Morgan, We'll pay these credit swaps off at a hundred percent. They can do that under this bill. They can bail out creditors and counterparties. And they can even sell and transfer to the FDIC the assets of a failing firm.

Now how do they do that? Well, they have to borrow money. You can't buy something for free. You can't guarantee things without money. Under the House bill, you can borrow 90 percent of the fair value of the failed firm's total consolidated assets. You're going to borrow. In other words, the government, the taxpayers, are going to borrow 90 percent of that amount. What are we talking about? Potentially, with just the largest six companies in America--Bank of America, Morgan Chase, Citi, Wells Fargo, Goldman Sachs, Morgan Stanley, the so-called Wall Street banks, most of which, including Goldman Sachs, have said, We like this provision. It's a great provision. The Federal Government can borrow for those six firms $8.5 trillion. Yet we've not asked, Where are you going to borrow this money from? Are you going to go back to the Chinese?

What will it cost? How will it affect the FDIC when the taxpayers borrow this kind of money? How will it affect our ability to pay the depositors that we have guaranteed those obligations? How will it affect our ability to meet our commitments today, Medicare, Medicaid, Social Security? How will it impact the deficit? What will it do to interest rates? Is there an exit strategy?

The largest bailout which is not addressed in this bill, the largest bailout in the history of this country was of Fannie and Freddie. We still haven't gotten out of that. In August of 2008, every Republican in this body said, Reform them before you bail them out. We've bailed them out. We guaranteed $400 billion of their assets over our protest. And then last December 31, the President guaranteed all their obligations; and just this week, we hear that that could amount to $1 trillion.

A trillions dollars there, $2 trillion here, $2 trillion here, $2 trillion here, $1 trillion here, almost $1 trillion there. How do we do it? How do the taxpayers get paid back?