Providing for consideration of the bill (H.R. 1664) to amend the executive compensation provisions of the Emergency Economic Stabilization Act of 2008 to prohibit unreasonable and excessive compensation and compensation not based on performance standards.

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.

Madam Speaker, I yield myself such time as I may consume. I appreciate my colleague from Colorado yielding time.

This is another very deceptively named bill by our colleagues on the other side. It is a fairly short bill, only four pages long, so everyone should have a chance to read it, and that is an important thing to do.

It is titled ``to amend the executive compensation provisions of the Emergency Economic Stabilization Act of 2008 to prohibit unreasonable and excessive compensation and compensation not based on performance standards.''

Now, again, that sounds great. However, when you get inside the bill and you read it, it says, ``any executive or employee,'' and it says that four times, so the deception is that this is only for executives. It is not just for executives. It allows the Treasury Department to set the salaries and compensation for all employees in a private organization. This is wrong to do.

We have had so many statements that have been made that have been misleading, I think, on the floor. This is not the worst economic crisis since the Depression. Our situation in the country was much worse in the eighties after a Democratically controlled Congress and a Democratic Presidency. So we are in a situation that has been created, again, by Democrats. Yet they want to say over and over again that this is the problem of a Republican administration. We have to constantly point out the fact that the Congress has been controlled for the past 2 years and is now controlled by Democrats.

So I think this rule is bad; I think the underlying bill is bad, and I think that our colleagues should vote against both of them.

What the Democrats are doing now is, again, providing political cover for Democrat Members of the House who voted for a bad bill a couple of weeks ago, and they are trying to change the subject from the administration's failure to exercise adequate oversight of the taxpayer dollars which have been extended to prop up AIG, American International Group. So I expect most of my colleagues, if not all, to vote against this rule and to vote against the underlying bill.

We also have a situation where this is not an open rule. The majority continues its practice of limiting debate and of limiting opportunities for Republicans to offer amendments and to do whatever we can do to make a bad bill somewhat better or to make a bad rule somewhat better. So we have a situation where these things continue.

You know, when I have thought about this, I have thought about just a commonsense way to describe this to people. The Democrats have a tar baby on their hands, and they simply cannot get away from it. They are stuck on this problem. They have created a bad situation, and every time they try to get away from it, they keep getting stuck on it, and I think that this is just the latest iteration and bad policy that they are recommending, and I am going to recommend to my colleagues to vote against it.

I reserve the balance of my time.

Madam Speaker, I am intrigued at my colleagues being outraged. Well, my goodness. If you were so outraged, why did you vote for these things to begin with? You know, your hands are not clean. I'm sorry, but your hands are not clean when you say that you are outraged.

Point of Order

Thank you, Madam Speaker.

Madam Speaker, I wonder why my colleagues are so outraged when they voted for these bills. This is covering up their previous action. They are trying to make something better. As I said, they've got a tar baby on their hands and they don't know what to do with it.

Well, it's easy to say that you could criticize the AIG executives for taking the money and criticize people for having voted for these things and be against this bill because it is taking our government in the wrong direction.

I am also very puzzled at my colleagues saying they are so concerned about their children and their grandchildren. But I will bet most of them are going to vote for this budget a little later on today, and they are quite willing to put the debt of this country on the backs of their children and grandchildren.

I think those are crocodile tears that they're crying when they say they want to preserve this country for their children and grandchildren. Give me a break.

In the headlines today in one of the rags here on the Hill--``Senator Levin Considers Defense Executive Pay Cuts.'' Where is this going to end? Our colleagues in this administration think

they have all the answers. They're going to run this country from the government down to every single business in the country: ``Let's just cut their pay. They're getting money from the government.'' Where is it going to end?

Are we going to have a President--he's already running GM. He's now the executive in chief of GM. And so our colleagues want to take on every single entity in this country and say, We know best. The government knows best. We're from Washington and we're here to help you. The American people have heard that before. They are not going to be fooled again by this kind of comment.

And, I'm sorry, but, again, I think it's crocodile tears when they say they are concerned about their children and grandchildren. If they are, they'll all vote ``no'' on the budget a little later on today and show their true concern. Saying that this upholds the rule of law for their children and grandchildren? Again, give me a break.

I reserve the balance of my time.

Would the gentleman yield?

Madam Speaker, I have said on the floor several times in the last few weeks that the public needs to be reading or rereading the book ``1984'' because we're here in a period where the Democrats continue to rewrite history.

I would like to, just again, say to my colleague from Virginia that he wants to say we have the largest deficit we've ever had. Absolutely. Because the Democrats have been in control of Congress for the past 2 years. The President does not pass a budget, does not pass appropriations bills. The President can either sign or reject appropriations. The appropriations bills were not passed last year because they knew that President Bush would reject them, he would veto them, and so they didn't pass them. We did them this spring. That's what caused the largest deficit.

We have a Democratic President and a Democratically controlled Congress, and you cannot rewrite history in that way. We had a very small deficit when we had a Republican Congress and a Republican President.

With that, I yield 5 minutes to my colleague from Missouri (Mr. Blunt).

Madam Speaker, our colleagues on the other side keep bringing up Secretary Paulson, but they leave out the fact that the current Secretary of the Treasury was the head of the New York Fed at the same time and was standing right beside Secretary Paulson when those recommendations were made.

It also was under his watch that the amendment to allow the bonuses to AIG was done, and we know from statements that Senator Dodd has made that he was directed to do that by the Treasury Department. So, again, we're not going to be saddled with the problems they created. They've got a tar baby. They're not going to shift it off to the Republicans.

I'd now like to yield 4 minutes to the gentleman from Georgia (Mr. Kingston), my colleague.

Madam Speaker, I would be happy to give the gentleman 2 more minutes.

Madam Speaker, I think that my colleagues who have spoken have been very eloquent in pointing out again what is wrong with this bill. I want to reiterate that this is simply to provide political cover for Democratic Members of the House and to change the subject away from the administration's failure to exercise adequate oversight of taxpayer dollars extended to prop up AIG and other organizations.

Most Republicans voted against the bailout last fall. All Republicans and 11 Democrats voted against the stimulus bill. So, again, we can't be blamed for the things that the Democrats have carried out in this session of Congress.

We are for accountability, and we want to see the administration and the Democratically controlled House get these things under control. But they keep doing things that make it worse and worse and worse.

I believe, as do many of my colleagues, that we need to be focusing on holding all programs that get Federal dollars accountable. However, there is absolutely no effort going on in this Congress to scrutinize programs that are controlled by the Federal Government.

As my colleague from Georgia pointed out, we have such great examples of the wonderful way that the Federal Government spends money, such as FEMA and other areas where the public knows a big disaster has been made.

But I want to point out again that this is the wrong way to go. We've said this from the beginning--again, with the bailouts last year. And we're asking now: What is the exit strategy from all of the sweeping government involvement in the private sector? What is the exit strategy?

Is it going to be week after week after week that we're going to see another bill that tries to cover up the mistakes that the Democrats have brought to us over and over again?

This moves in the wrong direction from an exit strategy. It makes the Treasury Secretary, with approval of the members of the Federal Financial Institutions Examination Council, in consultation with the chairperson of the TARP Congressional Oversight Panel, the arbiters of what is reasonable or excessive compensation for covered institutions. They don't even define that in this bill. They leave it up to the Treasury regulators, the bank regulators, who created this problem to begin with. What kind of a system is that?

It's a little crazy to say that we're going to give the people who created this problem more authority, more responsibility. They're going to define what is unreasonable or excessive.

I asked yesterday, ``Can we define those things?'' No. We leave that up to the Treasury Department. But it was the Treasury Department who decided that the AIG bonuses were just fine. In fact, they promoted them. So are they going to say that they are going to give big bonuses under this? That doesn't make any sense.

The best approach to protecting the taxpayers' investment in private businesses is through stronger oversight and accountability, not by further entrenching government in the operations and management of hundreds of businesses across America.

I say again, Senator Levin says he wants to consider defense executive pay cuts. Are we going to go into every single business in this country and decide? Is the Congress going to do that, is the Treasury Department going to do that?

We know that the bill a week ago to tax bonuses 90 percent--those at AIG--was clearly unconstitutional. My guess is that this bill is going to be decided that way also.

We also know there was this big hue and cry and, again, outrage, outrage, outrage, expressed on the floor of this House about that bill, and the bill is going nowhere. After all the outrage, then the President says, Oh, maybe we went too far. The Senate buried the bill. Nobody's going to do anything about it. I'm wondering if that's going to happen to this too. And that's what

should happen to this bill--the same thing that happened to the bill last week.

But is it going to be a bill a week where we deal with this? Again, we try to make Republicans look bad because they are standing up for the Constitution, they're standing up for the people of this country. They are trying to rein in the government. Again, we don't say, We're here from Washington, and we're here to save you.

The Congressional Oversight Panel that they want to put in charge of this, along with the Treasury Department, was never intended, nor is it authorized, to set policy.

So here we have, again, a situation where we're going to mix the executive with the legislative. We know the Supreme Court has ruled in the past that that is unconstitutional. But this majority doesn't seem to care about the Constitution. They don't mind that they took an oath to uphold the Constitution. Day after day after day we see violations of the Constitution. This happens to be the latest one.

I want to point out again what one of my colleagues said earlier. There's a rush to judgment here. This bill was introduced on March 23. So, here we are, continuing to rush in. Fools rush in where angels fear to tread is something my mother taught me a long time ago. I'm wondering if we need to think a little bit before we rush into areas where we might be treading on thin ice.

I reserve the balance of my time.

Mr. Speaker, I don't have any other speakers, but I do have a closing statement.

The other side of the aisle, I think, is trying to demonize this issue. It's constantly trying to say that Republicans favor the rich and that they favor the poor and are looking after the taxpayers.

Their vote later today on the budget is going to prove they're not looking after the taxpayers. They're not concerned about our children and grandchildren. They're simply concerned with politicizing every issue they can possibly politicize. And I think that I have a perfect example of that stated by one of their own.

Yesterday, the D.C. Examiner published an article on the underlying measure that this rule deals with, and I will place it in the Record at this point.

[From the Washington Examiner, Mar. 31, 2009]

Beyond AIG: A Bill To Let Big Government Set Your Salary

(By Byron York)

It was nearly two weeks ago that the House of

Representatives, acting in a near-frenzy after the disclosure

of bonuses paid to executives of AIG, passed a bill that

would impose a 90 percent retroactive tax on those bonuses.

Despite the overwhelming 328-93 vote, support for the measure

began to collapse almost immediately. Within days, the Obama

White House backed away from it, as did the Senate Democratic

leadership. The bill stalled, and the populist storm that

spawned it seemed to pass.

But now, in a little-noticed move, the House Financial

Services Committee, led by chairman Barney Frank, has

approved a measure that would, in some key ways, go beyond

the most draconian features of the original AIG bill. The new

legislation, the ``Pay for Performance Act of 2009,'' would

impose government controls on the pay of all employees--not

just top executives--of companies that have received a

capital investment from the U.S. government. It would, like

the tax measure, be retroactive, changing the terms of

compensation agreements already in place. And it would give

Treasury Secretary Timothy Geithner extraordinary power to

determine the pay of thousands of employees of American

companies.

The purpose of the legislation is to ``prohibit

unreasonable and excessive compensation and compensation not

based on performance standards,'' according to the bill's

language. That includes regular pay, bonuses--everything--

paid to employees of companies in whom the government has a

capital stake, including those that have received funds

through the Troubled Assets Relief Program, or TARP, as well

as Fannie Mae and Freddie Mac.

The measure is not limited just to those firms that

received the largest sums of money, or just to the top 25 or

50 executives of those companies. It applies to all employees

of all companies involved, for as long as the government is

invested. And it would not only apply going forward, but also

retroactively to existing contracts and pay arrangements of

institutions that have already received funds.

In addition, the bill gives Geithner the authority to

decide what pay is ``unreasonable'' or ``excessive.'' And it

directs the Treasury Department to come up with a method to

evaluate ``the performance of the individual executive or

employee to whom the payment relates.''

The bill passed the Financial Services Committee last week,

38 to 22, on a nearly party-line vote. (All Democrats voted

for it, and all Republicans, with the exception of Reps. Ed

Royce of California and Walter Jones of North Carolina, voted

against it.)

The legislation is expected to come before the full House

for a vote this week, and, just like the AIG bill, its scope

and retroactivity trouble a number of Republicans. ``It's

just a bad reaction to what has been going on with AIG,''

Rep. Scott Garrett of New Jersey, a committee member, told

me. Garrett is particularly concerned with the new powers

that would be given to the Treasury Secretary, who just last

week proposed giving the government extensive new regulatory

authority. ``This is a growing concern, that the powers of

the Treasury in this area, along with what Geithner was

looking for last week, are mind boggling,'' Garrett said.

Rep. Alan Grayson, the Florida Democrat who wrote the bill,

told me its basic message is ``you should not get rich off

public money, and you should not get rich off of abject

failure.'' Grayson expects the bill to pass the House, and as

we talked, he framed the issue in a way to suggest that

virtuous lawmakers will vote for it, while corrupt lawmakers

will vote against it.

``This bill will show which Republicans are so much on the

take from the financial services industry that they're

willing to actually bless compensation that has no bearing on

performance and is excessive and unreasonable,'' Grayson

said. ``We'll find out who are the people who understand that

the public's money needs to be protected, and who are the

people who simply want to suck up to their patrons on Wall

Street.''

After the AIG bonus tax bill was passed, some members of

the House privately expressed regret for having supported it

and were quietly relieved when the White House and Senate

leadership sent it to an unceremonious death. But populist

rage did not die with it, and now the House is preparing to

do it all again.

I will quote briefly from the article. This is a quote--and I probably will say that more than once because I think it's very important to continue to make sure this is a quote:

``Representative Alan Grayson, the Florida Democrat who wrote the bill, told me its basic message is, 'you should not get rich off public money, and you should not get rich off of abject failure.'

``Grayson expects the bill to pass the House and, as we talked, he framed the issue in a way to suggest that virtuous lawmakers will vote for it, while corrupt lawmakers will vote against it.

``This bill will show which Republicans are so much on the take from the financial services industry that they're willing to actually bless compensation that has no bearing on performance and is excessive and unreasonable,'' Grayson said. ``We'll find out who are the people who understand that the public's money needs to be protected, and who are the people who simply want to suck up to their patrons on Wall Street.'' That's the end of the quote from the D.C. Examiner.

I certainly hope that the gentleman from Florida wasn't inferring that I, a Republican who opposes this bill, am a ``corrupt lawmaker.''

None other than Thomas Jefferson in his manual, which is our guide here--Mr. Speaker, I know you are familiar with Mr. Jefferson's manual. It is what we use to guide us--not just day by day, but minute by minute on this floor.

Mr. Jefferson said: ``The consequences of a measure may be condemned in the strongest terms; but to arraign the motives of those who propose to advocate it is not in order.'' Just because a Member chooses to oppose legislation, whether it be for reasons of policy or principle, they should not be disparaged by their colleagues, who wrestle with the very same voting decisions every day.

We're seeing things which are unprecedented in our history. Just yesterday, the President of the United States fired the CEO of what was once the largest corporation in the world. Some of us are concerned about where this is going. Some of us think this is simply the wrong thing to do.

It's easy to demonize the high-flying Wall Street fat cats who contributed mightily to our current situation. It's politically expedient to criticize corporate CEOs who seem tone deaf to the problems experienced daily by our constituents. But just because we're elected every 2 years doesn't mean that we

leave our principles at the door when we enter this Chamber.

Ambition is a good thing, but not when you impugn the motives of those who disagree. Those of us who have some experience understand that such words quoted from the D.C. Examiner, if they had been spoken on the floor, would have been considered inappropriate. They are just as inappropriate off the floor as they are on the floor.

Mr. Speaker, this rule is wrong. The underlying bill is wrong. The efforts to continue to involve our government in places it has no business in is wrong.

We need to do everything we can at this time--and we know we have people in this country hurting. Republicans are very, very sensitive to that. But the last thing in the world we need to do is to cut out the basis of this country--to weaken the very things that have made us the greatest country in the world. And involving ourselves more and more in controlling private enterprise will do nothing but to weaken this country more, to get our government involved.

It's the wrong way to go. I urge my colleagues to vote against this rule and to vote against the underlying bill.

With that, I yield back the balance of my time.

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

Madam Speaker, by direction of the Committee on Rules, I call up House Resolution 306 and ask for its immediate consideration.

Madam Speaker, for purposes of debate only, I yield the customary 30 minutes to the gentlewoman from North Carolina, Dr. Foxx. All time yielded during consideration of the rule is for debate only.

I yield myself such time as I may consume.

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 306.

Madam Speaker, House Resolution 306 provides for consideration of H.R. 1664 to amend the executive compensation provisions of the Emergency Economic Stabilization Act of 2008 to prohibit unreasonable and excessive compensation and compensation not based on performance standards.

This is under a structured rule. The rule provides for 1 hour of general debate controlled by the Committee on Financial Services. The rule makes in order seven amendments which are listed in the Rules Committee report accompanying the resolution. Each amendment is debatable for 10 minutes except the manager's amendment, which is debatable for 20 minutes. The rule also provides for one motion to recommit with or without instructions.

Madam Speaker, the American people rightfully demand that the taxpayer dollars they put in to help stabilize the banking system be spent wisely by the banks and by the institutions that borrow under what is called the Troubled Asset Relief Program, or TARP.

Recently, when information came to light showing AIG gave, roughly, $165 million in retention bonuses to senior executives, hardworking Americans all across the country quickly asked, How as a Nation can we recover this money? Now the House considers a similar question: How do we reasonably prevent this from happening again?

The grounds for this action are simple. As the lender to AIG and to a number of other institutions, the United States has the authority to define the terms by which we are lending money. This is a standard in business practice, as lenders from time to time put limits on executive compensation, as do their shareholders.

The gentleman from Georgia (Mr. Marshall) recently related to me that you have to be just before you are generous, that you have to take care of your creditors before you can pass out gifts. In this case, generosity, or generous, is taken to a whole new level with the retention bonuses that we saw recently. We as Members of Congress must assert our rights to protect our constituents and the people of this country from any further losses. I want to make clear several things about this bill:

First, it only applies to financial institutions that have received a capital infusion under the TARP program. An amendment by Representative Bilirakis will clarify this point, and an amendment by Representative Cardoza would exempt smaller community banks which receive TARP funds.

Second, it only prohibits compensation that is unreasonable or excessive or prohibits any bonus or other supplemental payment that is not performance-based. Guidelines are established by the Treasury Department within which to determine what is unreasonable or excessive.

Third, the bill only applies while the TARP capital remains outstanding. Once the institution has paid the taxpayers back, they may meet any contractual obligations allowed by their board of directors and shareholders regarding bonuses.

I support the private sector, and I believe in rewarding employees for doing a good job. This bill does allow for performance compensation, but if you have received a capital investment of American tax dollars through TARP to make it through these extraordinary times, there should be commonsense limits on bonuses. My constituents in Colorado do not want their hard-earned dollars going to inflate the senior executives' life rafts as the ship steers close to the rocks.

We are going through this economic downturn, but we need to make sure that middle-class America can trust the money that has been placed into the banking system to keep that system functioning properly. If an institution has an outstanding debt to the Federal Government, it has to pay it back before it gets bonuses that are excessive or unrealistic.

I urge my colleagues to vote in favor of the rule and the underlying bill.

With that, I reserve the balance of my time.

I yield myself such time as I may consume.

Madam Speaker, I would like to respond to my friend from North Carolina. I just have to remind her that it was President Bush's Secretary of the Treasury who came to the Congress, hat in hand, because of a potential collapse of the financial system, asking for immediate assistance from this Congress to right the financial system, to put it back on some sort of stable footing. Since then, we have seen a variety of financial institutions take advantage of the assistance that was given. This is designed to restrict the way companies can take advantage of taxpayer dollars until they have repaid the loans and capital that have been advanced to these companies.

With that, I would like to yield 2 minutes to my friend from New York (Mr. Arcuri).

Madam Speaker, point of order.

I would ask my friend to address the Speaker.

Madam Speaker, I would like to respond to my good friend from North Carolina just to remind her that when Secretary Paulson came to the Congress asking for $700 billion, he brought us a three-page document. The first page said, I need $700 billion. The second page said, I can do anything with it I want. And the third page said, You can't sue me.

Well, we took that in a crunch time based on his--not his demands, his pleas, his pleas to the Congress to act quickly to preserve our banking system because so many things were going wrong all at one time. We took that three pages, which was completely ridiculous----

Let me finish.

Which was completely ridiculous. We expanded it to a hundred pages, and acted promptly at the request of President Bush and his administration to try to get our financial system stabilized. And it is still rocky, but it's going. But we've seen certain companies take advantage of the assistance of the people of America, and we've got to prevent that. This bill is about compensation where it's excessive or not based upon performance.

What I would like to do now, though, is turn it over to my friend from Virginia (Mr. Moran), and I would yield him 3 minutes.

I yield the gentleman an additional 1 minute.

Madam Speaker, I will use so much time as I might consume, and I'd like to remind my friend from Missouri, first of all, the first time any kind of regulation over Fannie Mae and Freddie Mac was proposed was in this Congress, was by the House of Representatives, as early as March of 2007 to provide some regulation to those two entities.

The second thing I would remind my friend--and I appreciate his comments about, you know, the shot across the bow of the AIG executives and the fact that they are returning some of the money--but I would also remind him that in the business world, a lender in making a loan to a company may, as part of that loan agreement, put limits on compensation to the executives until that loan is repaid. That's a standard operating procedure in the business world, and shareholders do that, too.

So a board of directors of a company may be restricted by an outside influence like a lender or by its own shareholders. In this instance, we are placing a lot of money into many institutions across this country, and I believe the people of this country have some say as to what the compensation should be of those institutions until those loans or that capital is repaid.

Now, there may be something that might make the gentleman from Missouri a little happier, and that is, there is an amendment that will be proposed, I believe it's an amendment by Mr. Cardoza, that will exempt, in effect, institutions that have received less than, I think it's $250 million, which is still a lot of money. But small community banks, smaller financial institutions will not be part of the program, if that amendment is accepted.

Certainly.

Thank you. And I would just respond to my friend from Missouri by saying that we, at least in this House, passed the GSE reform bills twice, once in 2007 and again in 2008, at which time the President signed it in the summer of 2008.

Secondly, I would just say that the financial sector has been in a heap of trouble, and without the assistance of the people and this government, they would be in worse trouble today. That is my belief, and I think that would be the record reflected by many experts across the country.

With that, I reserve the balance of my time.

Madam Speaker, I yield myself such time as I might consume.

I would just advise my friend, Mr. Kingston, that take a look at the bill. It's a very simple bill. My friend from North Carolina was correct, and it just basically says no financial institution, while it has money that's taxpayer money through TARP or otherwise, can pay excessive compensation or anything other than performance bonuses. An executive cannot hold the company hostage, as was done in the AIG instance.

And if and when that money's paid back, then fine, the board of directors, and the shareholders will determine what appropriate salaries their management deserves, and that is all this does. Lender has a chance in this instance to put some restrictions on salaries, and if the borrower, being the financial institution, doesn't like those restrictions, feels it's in a solid position and can return the moneys, then so be it. That's the way it is.

But the private sector, and particularly the financial system, was on shaky ground until this loan was made to them, and the purpose of this is to make sure that the institutions don't take advantage of the good graces of the American people.

It brought kind of a chuckle when my friend Mr. Kingston talked about FEMA and the way the government ran FEMA. Well, FEMA under the Clinton administration, I would say, was run in a very good fashion. FEMA, on the other hand, under the Bush administration was at best a troubled organization.

With that, I reserve the balance of my time.

Mr. Speaker, I would inquire of my friend from North Carolina whether she has any other speakers.

I would reserve the balance of my time.

I yield myself such time as I may consume.

I would urge an ``aye'' vote on this rule. So we will begin with that. The rule is designed and provides for seven amendments to a bill that limits executive compensation that is excessive, unreasonable, and not performance-based.

If an executive of an institution that's been loaned money or in which it has had capital advanced by the United States of America, by the people of America, and pays $5 million, $10 million, $20 million for no reason, in an excessive manner, then that kind of bonus is restricted.

The people's money as we've advanced it is to get the institutions back on track and not to pay executives exorbitant salaries. The people across the country expect that, number one. So I support the rule and I support the underlying bill.

Now there are a lot of reasons we got into this position where the government and the people of this country have had to assist the financial system--not the least of which was something like the Gramm- Leach-Bliley, which dropped regulations; or an inattention by the Bush administration to regulations within the financial system. But we are where we are.

President Bush and Secretary Paulson asked for a huge advance to the financial system to keep it upright. We did that. As a Democrat and as a Democratic Congress, advancing $700 billion to a Republican President and his Treasury Secretary to put the financial system back on track was not the first thing I wanted to do. But they made a good case. Their pleas were heard. And we did that.

Now we've got to make sure that people within that system don't take advantage of the good graces of the American people. And that's the purpose of this bill.

It provides for guidelines and regulations. There will be amendments, Mr. Speaker, that will potentially limit this to bigger banks--not to smaller community banks.

I would agree with my friend from North Carolina that whether it's on this floor or out in public, hyperbole and rhetoric can impugn somebody's character. She's concerned about Mr. Grayson. I would say there are others on her side who call people un-American because of the way they vote here.

I would just say to you, Mr. Speaker, and to the Members of this Chamber, that our words do really matter, and we do need to keep an eye on what we say. We really do have to watch ourselves and not get caught up in the heat of debate.

This bill is appropriate at this time to manage the lending that this country has done. As companies pay back their TARP advances, they're no longer subject to this. The management payments and salaries are subject to the board of directors and their shareholders.

But at this point in time, with those particular institutions, we are both lenders and shareholders, and we certainly have a say over the compensation of the management.

I urge an ``aye'' vote on the rule and on the underlying bill.

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

The previous question was ordered.

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, 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.