Mr. Speaker, I yield myself such time as I may consume. Last week I did offer a motion to recommit that would have required Treasury to certify that every transaction made from the $30 billion TARP…
Mr. Speaker, I yield myself such time as I may consume.
Last week I did offer a motion to recommit that would have required Treasury to certify that every transaction made from the $30 billion TARP Jr lending fun be made on the basis of economics and not politics. As we pointed out during our debate last week, there are several examples of lending to banks out of the first TARP fund that raise questions of whether political considerations were involved in deciding which banks received this money.
When we voted on the issue last week, 237 Members of the other side of the aisle voted against having Treasury certify that each transaction using the taxpayers' $30 billion is based on economics and not politics. Those same Members all voted against putting an experienced and effective regulator over the new program, simply because the regulator has TARP in his title. When the Treasury Department lends $30 billion more of taxpayers' money out to banks, the taxpayers deserve better protection than they are getting.
The majority last week exposed the taxpayers to greater likelihood of waste, fraud, and abuse and added to the cost of setting up a new regulator when we already had one. Today, the majority is back on the floor trying to make amends for their vote against the taxpayers.
During the debate last week, Chairman Frank said, We'll go you one better in this effort. Let me repeat that. We'll go you one better. If the bill on the floor today is ``one better'' than our proposal, I would hate to see what happened if the majority tried to go ``one less.''
The bill today does not require a certificate for each investment transaction, as our motion to recommit would have required. Instead, this bill only asks Treasury to certify that the purchase decision process has been designed to ensure decisions are made because of political considerations. Let me repeat that: Certifying that the purchase decision process is designed so that decisions are made based on economics and not political is not going one better than certifying that each actual purchase with the taxpayers' money was made based on economics and not politics.
I'm sure the purchase decision process for the original TARP was not intended to bring any politics into play. While I may not have supported TARP, the purchase decision process was aimed at investing capital in healthy banks to support banks in lending. However, when the individual investment decisions were made with the first TARP, legitimate questions have come up whether political and considerations involving certain banks receiving funds were in fact taken into consideration.
As we recreate this second TARP for smaller banks, we need to make sure that our past problems are not repeated. This bill falls short of a motion to recommit that we offered last week. Last week, Chairman Frank said, We'll come forward with further reinforcement of the oath- taking--we'll even make it oath-taking. Having Treasury certify under oath that the decision process for this new TARP fund for small banks is based on economics and not political is not further reinforcement. It is not even the same as requiring Treasury to certify that each specific investment decision is based on economics or not politics, and I think the taxpayers are smart enough to see the difference.
Mr. Speaker, let me just make an example here. What this process that our colleagues on the other side have brought is the same promise that every 16-year-old young woman or young man makes to their parents when they get their driver's license and borrow the car: promise me you won't ever get any tickets. And they promise. And so basically what we're going to have is the Treasury is going to take an oath that we promise we won't let politics be involved in this process. But we'll have no certification on whether politics, as these transactions play out, whether politics or influence was used to influence how these investments were made. And so we're going to take an oath up front, but no certification during the process. I don't think that's good policy.
With that, I reserve the balance of my time.
Mr. Speaker, I appreciate the Democrats wanting to bring a little bit of additional oversight into this. So I would ask unanimous consent, then, that we take the language from the motion to recommit that says the Secretary shall have to certify every transaction and make that a part of the text of this bill.
So I guess my colleagues are not really serious about making this oversight stronger. We're going to go with the watered-down language, which basically says the Secretary is going to certify that we're going to put together a little process here and we think that, one, it will not be based on politics or influence from outside, but we're not going to make him accountable for each billion-dollar investment or millions of dollars of investment of the taxpayers' money into these banks. And so I wish my colleagues on the other side were actually serious about what we're doing here.
I appreciate the majority's trying to address these shortcomings. However, I've already covered that today's bill falls short of the protections for taxpayers offered in the motion last week. At the same time, the majority said those protections were just another bureaucratic layer in the process. I don't think the taxpayers see it that way. Just like the Capital Purchase Program within TARP, this new $30 billion lending fund will make capital investment in banks with taxpayers' dollars. Unlike the TARP program, however, this new program will lack the strong oversight provided by the Inspector General for TARP or SIGTARP. That same SIGTARP last week announced a $2 billion fraud indictment involving an attempt by a bank to obtain TARP money. The regulator put in charge of this new TARP-like fund, the Treasury Inspector, was not even involved in this fraud case.
According to GAO and the Treasury Inspector General's report, the Treasury Inspector General is currently focused on material loss reviews required for failed banks due to the large number of bank failures. Adding oversight of the $30 billion lending fund will require more resources, creating more bureaucracy when we already have in place an agency that can do this job.
SIGTARP has considerable experience overseeing a program in which government purchases preferred stocks in banks--TARP and TARP 2, both the same program. If we create a new TARP program that will also purchase shares in banks, we should use the same oversight agency that has a proven track record and expertise. Doing less is a disservice to the taxpayers. Merely requiring certification that the process the Treasury intends to use will prevent politics from coming into play is not the same as requiring Treasury to certify that each transaction made was based on economics and not politics.
The majority can't have it both ways. You can't say you are going to go ``one better'' than the protections in our motion to recommit that you called another ``bureaucratic layer'' and then do less, which basically is the bill that they brought before us today.
I reserve the balance of my time.
I will remind the gentleman that the original TARP program was the Federal Government investing taxpayer dollars into the preferred stock of banks. I would encourage the gentleman to read the text of this bill that we passed last Friday. And what does that say? It says the Federal Government will tax the taxpayers' money and provide preferred stock. Now you can try to call it something else, but it's a TARP program.
I want to go back to something that happened last week. During that debate, the gentlewoman from New York (Ms. Velazquez) said that those of us on this side of the aisle wanted to keep TARP going. Let's go back to the record here. I didn't get a chance to respond then, so I want to set the record straight.
TARP was supposed to expire on December 31, 2009, and there was strong support for allowing TARP to expire. In fact, more than 100 of us on this side of the aisle sent a letter to Treasury Secretary Geithner that urged him to let TARP expire. In fact, we introduced legislation to force the expiration of TARP. We voted against the majority's legislation to divert TARP funds for other spending. But the Treasury Secretary extended TARP through this October, and the majority did nothing to stop it.
Just as we are, again, getting close to having TARP expire, the majority brings up a bill that creates what is essentially a second TARP program, and it will last for years. So who wants to keep TARP going? Rather than doing something that creates more certainty
for small businesses to grow and add jobs to this economy, the majority is repeating the same failed initiatives that have helped grow our national debt to over $13 trillion in the past 2 years.
We've had record bank failures, including four banks that were TARP recipients. When those TARP recipient banks failed, the taxpayers' investment of $2.6 billion was essentially wiped out. More than 100 banks that have received TARP funds have missed their dividend payments. These missed dividend payments have cost the American taxpayers more than $200 million. The sad thing is that there are things Congress could do that actually help small businesses. Instead, the majority has chosen to pass a bill that will cost taxpayers billions of dollars and do nothing, really, to help small businesses. And today the majority has chosen to provide fewer taxpayer protections than we offered last week.
Mr. Speaker, I appreciate the fact that the majority thought we had a good idea. I just wish they would have used our idea. So the vote today is, Do you want to make sure that the taxpayers have a strong oversight, or do you want a watered-down version?
I yield back the balance of my time.
