Floor Statements

Thank you, Mr. Speaker.

I want to address what is one of the major issues that is now confronting the country. We have the problem of digging out from under the great economic hole in which we find ourselves, not just here but worldwide, but as we do that, it is important that we take steps to make it much less likely that we'll be in such a difficult spot again. It's a hard thing to do simultaneously--to recover from a serious problem and also to prevent its occurrence.

I want to talk today about what we have to do to prevent its recurrence. Now, obviously, to prevent its recurrence, you need to have some sense of what caused the problems. There are two competing theories. The one that I believe, that the President believes, that he is in Europe today discussing--and which a wide variety of European thinkers somewhat inaccurately said today on the floor from the other side, It was the socialists in Europe who were pushing the President. Well, those socialists were primarily the conservative Christian democratic Chancellor of Germany and the conservative Gaullist President of France. They are the ones who were saying we have to come together and improve financial regulation.

In England, when I became the chairman-in-waiting in 2006 after that election, I was told that we in America should emulate Great Britain. I was told this by conservatives, by people in the financial industry. Great Britain, we were told, had the financial services authority that used the light touch when they regulated.

The head of the financial services authority recently announced the era of light touch, of soft touch regulation is over. That bastion of regulatory flexibility now says we erred with too little regulation. Unregulated credit default

swaps. Cauterized debt obligations. Financial entities largely unregulated taking on far more debt than they could pay is a major cause of the problem.

Now, how do we get there? There is to some extent agreement on one particular aspect of this. And that is that it was the proliferation of subprime mortgages to people who could not repay them that was at the root of the problem. The mortgage loans were made to people who couldn't repay them by people who did not expect to be repaid because they were selling that right. They were securitizing them.

And other sophisticated financial institutions then took these badly made loans and rocketed them around the world through sophisticated financial investments. And there is a great agreement that that is the root cause of the problem.

But what caused the cause is disputed.

Now, there is a conservative view that says, You know what happened? It was the liberals, the Democrats. There they went again trying to help poor people, and they forced these poor institutions, these vulnerable lenders, into making bad loans.

Now, we have seen a proliferation, a coordinated proliferation of that argument. It was trying to help poor people that did it. Some of the poor people were black and Hispanic, others--a majority of them, this being the United States with our ethnic composition--were white. But that's what's getting blamed, and it's in a coordinated way.

The talk show hosts, Vice President Cheney said that in his last interview, Mr. Rove has been arguing that. It is fairly coordinated.

Now, I do not argue that we are facing a vast right-wing conspiracy. What we are dealing with is something, however, equally troubling. It is crass right-wing mendacity. It is systematic dishonesty, lying, distortions, misrepresentations, bad history being promulgated.

Now, I speak as one of the Democrats who's learned our lesson. For too long we acted as if inherent implausibility was self-refuting. A man I admire greatly, John Kerry, a war hero, was victimized in 2004 because for too long he delayed fighting back the inherently implausible charge that he had not distinguished himself in battle. The Swift-boating of John Kerry was a terrible moment in American history, and his decency, his belief in fairness, held him back for a bit. He fought back, but it was later than it should have been.

We've had earlier examples of that. We're seeing it now. We are seeing a concerted right-wing effort to misrepresent the facts to avoid a result they don't want. The result is regulation. The result is that this country will do what it has done at least twice before.

We have a situation in which significant financial innovation in this country, beginning about 20 years ago or so, transformed mortgage lending. Mortgage lending used to be a matter of you going into your community bank--and by the way, among the victims of this whole operation have been the community banks. The community banks who have been no part of the problem but get the criticisms on an undifferentiated way and some of the burden. And we on the Financial Services Committee are determined to do everything we can to shelter them from that kind of unfair denunciation and excessive regulatory burden.

But what we had was a proliferation of lending now outside of the banks. Non-banks were able to lend because of liquidity in the world. You didn't have to go to depositors. If you get money from depositors, you're regulators. If you get money from pools of liquidity from Asia, from oil people in the Middle East, from elsewhere, you do not have to face that regulation.

The other thing, of course, that happened was securitization. Thirty years ago people who got a mortgage were getting it from someone who expected it to be repaid by the borrower, and they were careful about the borrower. Increasingly, loans were made by people who did not expect to be repaid by that borrower but who were going to package the loans and sell them to other people. And the discipline of a direct lender-borrower relationship eroded.

Then the sophisticated collateralized debt obligation derivatives and credit default swaps came in and took loans that should never have been made in the first place and sent them around.

The problem is that there were no regulations, insufficient regulation. In the lending process, virtually no regulation in the process by which the bad loans were packaged and sent around the world.

So our job today is to do what Theodore Roosevelt and Woodrow Wilson did: address innovations in the private sector. And we are a private sector country fortunately, and it is the private sector that creates wealth. But in periods of great innovation by definition there are no rules, no regulations. So you get a great deal of productive activity and you get some abuses. And the job of a sensible public policy is try to restrain the abuses while getting the benefit of the innovation.

Theodore Roosevelt and Woodrow Wilson did that. They did antitrust laws, they did the Federal Trade Commission. And the contemporary version of today's right-wing ideology said, Oh, my God. You're going to ruin everything. They were bitterly opposed to Theodore Roosevelt and his trust busting.

And when the stock market became important as a consequence of the large industrial enterprises becoming the basis of the economy to a great extent, Franklin Roosevelt did the same thing with the stock market. And if you want to read complaints similar to today's laments that regulation will ruin the economy and throttle competitiveness, go to the Congressional Record of the 1930s and read what they had to say about the Securities and Exchange Commission. That's our job today. That's what we want to do. We want to put rules in place that allow us to get the benefit of innovations, the benefit of securitization, but without the abuses.

The economic fundamentalists feel threatened by this. The consequences of their deregulatory policy--which had been successful in America for far too long--are devastating, and they understand that the American people are unhappy with that and plan to impose regulation. And they are as opposed today as they were against Theodore Roosevelt and Woodrow Wilson and against Franklin Roosevelt who said, ``The economic royalists hate me, and I welcome their hate because they know I am a threat to them.''

We are a threat to the abusers, and by the way, Mr. Speaker, good rules are pro-market. Franklin Roosevelt made it possible for people to invest with confidence when he created the SEC. He created a situation in which you could have mutual funds with the Investment Company Act. We suffer today from people who will not invest because of their fears of abuse, and creating a set of rules that give comfort to investors will get this economy functioning again, get the credit markets functioning again.

All right, what do the conservatives say? First of all, you made us lend money to poor people. It was the Community Reinvestment Act. I will insert in the Record the article from October 12 from the McCarthy newspapers, Messrs. Goldstein and Hall about that myth. And we will do a Special Order later on it.

[From McClatchy Newspapers, Oct. 12, 2008]

Private Sector Loans, Not Fannie or Freddie, Triggered Crisis

(By David Goldstein and Kevin G. Hall)

Washington.--As the economy worsens and Election Day

approaches, a conservative campaign that blames the global

financial crisis on a government push to make housing more

affordable to lower-class Americans has taken off on talk

radio and e-mail.

Commentators say that's what triggered the stock market

meltdown and the freeze on credit. They've specifically

targeted the mortgage finance giants Fannie Mae and Freddie

Mac, which the federal government seized on Sept. 6,

contending that lending to poor and minority Americans caused

Fannie's and Freddie's financial problems.

Federal housing data reveal that the charges aren't true,

and that the private sector, not the government or

government-backed companies, was behind the soaring subprime

lending at the core of the crisis.

Subprime lending offered high-cost loans to the weakest

borrowers during the housing boom that lasted from 2001 to

2007. Subprime lending was at its height from 2004 to 2006.

Federal Reserve Board data show that: More than 84 percent

of the subprime mortgages in 2006 were issued by private

lending institutions; private firms made nearly 83 percent of

the subprime loans to low- and moderate-income borrowers that

year; Only

one of the top 25 subprime lenders in 2006 was directly

subject to the housing law that's being lambasted by

conservative critics.

The ``turmoil in financial markets clearly was triggered by

a dramatic weakening of underwriting standards for U.S.

subprime mortgages, beginning in late 2004 and extending into

2007,'' the President's Working Group on Financial Markets

reported Friday.

Conservative critics claim that the Clinton administration

pushed Fannie Mae and Freddie Mac to make home ownership more

available to riskier borrowers with little concern for their

ability to pay the mortgages.

``I don't remember a clarion call that said Fannie and

Freddie are a disaster. Loaning to minorities and risky folks

is a disaster,'' said Neil Cavuto of Fox News.

Fannie, the Federal National Mortgage Association, and

Freddie, the Federal Home Loan Mortgage Corp., don't lend

money, to minorities or anyone else, however. They purchase

loans from the private lenders who actually underwrite the

loans.

It's a process called securitization, and by passing on the

loans, banks have more capital on hand so they can lend even

more.

This much is true. In an effort to promote affordable home

ownership for minorities and rural whites, the Department of

Housing and Urban Development set targets for Fannie and

Freddie in 1992 to purchase low-income loans for sale into

the secondary market that eventually reached this number: 52

percent of loans given to low-to moderate-income families.

To be sure, encouraging lower-income Americans to become

homeowners gave unsophisticated borrowers and unscrupulous

lenders and mortgage brokers more chances to turn dreams of

homeownership into nightmares.

But these loans, and those to low- and moderate-income

families represent a small portion of overall lending. And at

the height of the housing boom in 2005 and 2006, Republicans

and their party's standard bearer, President Bush, didn't

criticize any sort of lending, frequently boasting that they

were presiding over the highest-ever rates of U.S.

homeownership.

Between 2004 and 2006, when subprime lending was exploding,

Fannie and Freddie went from holding a high of 48 percent of

the subprime loans that were sold into the secondary market

to holding about 24 percent, according to data from Inside

Mortgage Finance, a specialty publication. One reason is that

Fannie and Freddie were subject to tougher standards than

many of the unregulated players in the private sector who

weakened lending standards, most of whom have gone bankrupt

or are now in deep trouble.

During those same explosive three years, private investment

banks--not Fannie and Freddie--dominated the mortgage loans

that were packaged and sold into the secondary mortgage

market. In 2005 and 2006, the private sector securitized

almost two thirds of all U.S. mortgages, supplanting Fannie

and Freddie, according to a number of specialty publications

that track this data.

In 1999, the year many critics charge that the Clinton

administration pressured Fannie and Freddie, the private

sector sold into the secondary market just 18 percent of all

mortgages.

Fueled by low interest rates and cheap credit, home prices

between 2001 and 2007 galloped beyond anything ever seen, and

that fueled demand for mortgage-backed securities, the

technical term for mortgages that are sold to a company,

usually an investment bank, which then pools and sells them

into the secondary mortgage market.

About 70 percent of all U.S. mortgages are in this

secondary mortgage market, according to the Federal Reserve.

Conservative critics also blame the subprime lending mess

on the Community Reinvestment Act, a 31-year-old law aimed at

freeing credit for underserved neighborhoods.

Congress created the CRA in 1977 to reverse years of

redlining and other restrictive banking practices that locked

the poor, and especially minorities, out of homeownership and

the tax breaks and wealth creation it affords. The CRA

requires federally regulated and insured financial

institutions to show that they're lending and investing in

their communities.

Conservative columnist Charles Krauthammer wrote recently

that while the goal of the CRA was admirable, ``it led to

tremendous pressure on Fannie Mae and Freddie Mac--who in

turn pressured banks and other lenders--to extend mortgages

to people who were borrowing over their heads. That's called

subprime lending. It lies at the root of our current

calamity.''

Fannie and Freddie, however, didn't pressure lenders to

sell them more loans; they struggled to keep pace with their

private sector competitors. In fact, their regulator, the

Office of Federal Housing Enterprise Oversight, imposed new

restrictions in 2006 that led to Fannie and Freddie losing

even more market share in the booming subprime market.

What's more, only commercial banks and thrifts must follow

CRA rules. The investment banks don't, nor did the now-

bankrupt non-bank lenders such as New Century Financial Corp.

and Ameriquest that underwrote most of the subprime loans.

These private non-bank lenders enjoyed a regulatory gap,

allowing them to be regulated by 5o different state banking

supervisors instead of the federal government. And mortgage

brokers, who also weren't subject to federal regulation or

the CRA, originated most of the subprime loans.

In a speech last March, Janet Yellen, the president of the

Federal Reserve Bank of San Francisco, debunked the notion

that the push for affordable housing created today's

problems.

``Most of the loans made by depository institutions

examined under the CRA have not been higher-priced loans,''

she said. ``The CRA has increased the volume of responsible

lending to low- and moderate-income households.''

In a book on the sub-prime lending collapse published in

June 2007, the late Federal Reserve Governor Ed Gramlich

wrote that only one-third of all CRA loans had interest rates

high enough to be considered sub-prime and that to the

pleasant surprise of commercial banks there were low default

rates. Banks that participated in CRA lending had found, he

wrote, ``that this new lending is good business.''

Will someone tell the gentleman from Iowa I will begin yielding after a certain amount of time. I want to get the complete argument out. I will yield some time and I will say more than that.

I look forward to when we return to debate--these things get too one- sided. Let's each take out an hour and we will share the hours and go back and forth in debates.

But that's irrefutable. Zero. Republicans in control of Congress, no legislation adopted to ban subprime lending or to regulate Fannie Mae and Freddie Mac. Now why is that the case? Well, one argument is that I wouldn't let them do that. Newt Gingrich and Tom DeLay apparently had a secret passion to regulate Fannie Mae and Freddie Mac, but my secret hold kept them from doing it.

Mr. Speaker, I wish I knew that. If I knew I could have stopped them from doing things, I wouldn't have let them impeach Bill Clinton.

I told the gentleman that I would not yield.

Mr. Speaker, will you please instruct the gentleman from Iowa, who I thought would have known better, that he has to be yielded to.

Mr. Speaker, regular order.

Please instruct the gentleman from Iowa if he asks me to yield and I say ``no,'' he's not allowed further to speak. Those are the basic rules of the House.

I said to the gentleman after a certain amount of time, I will yield. I am sorry he is upset by the fact that the Republican Party, of which he is a member, had a zero record of accomplishment during those 12 years in which they controlled it. I will allow debate and yielding later. People have spoken for hours on this without any interruption. I am going to speak for at least 40 minutes without interruption and I will then yield.

So I will instruct the gentleman the rules of the House do not allow him to interrupt without permission. I do not interrupt people without permission, neither may he.

Mr. Speaker, will you please instruct the gentleman of the rules of the House.

As I said before the gentleman from Iowa tried to divert attention from it, zero legislation adopted by the Republican.

The argument again is Newt Gingrich and Tom DeLay wanted to do it. They overcame my objection to have a war in Iraq--that I thought was a terrible mistake--to cut taxes to very wealthy people, to intervene in the Terry Shiavo case, to do other things that I thought were unwise.

But I kept them from regulating Fannie Mae and Freddie Mac. Well, I wish I did have that power. I was the minority member of the Committee on Financial Services who had jurisdiction. It was then called the Committee on Banking. In 2003, I did become the senior member, the minority leader.

In the Republican House, the minority leader did not have a great deal of power. The Republicans had the power.

And so here's what happened. It is true that in 2003, the chairman of the committee, Mr. Oxley, decided to try to regulate Fannie Mae and Freddie Mac. He scheduled a vote on the bill, the Republican chairman on the committee, Mr. Oxley. Let me read from a CBS report October 7, 2003.

Strong opposition by the Bush administration forced a top Republican Congressman to delay a vote on the bill that would create a new regulation for Fannie Mae and Freddie Mac.

Let me quote from the Washington Post on October 8. The Bush administration is at odds with the Republican-controlled House Financial Services Committee over legislation to impose tougher oversight over Fannie Mae and Freddie Mac. The dispute dims prospects for quick passage of the bill.

So, Mr. Speaker, apparently I not only had the power to stop the Republican Party; I had a secret power over the minds of men, as the old radio serial used to say, and I managed to get Bush and the Republicans in the Congress to fight with each other. Boy, I wish I'd have known that at the time. There was a lot of damage I could have avoided. So the bill did not pass that year because the Bush administration stopped it because Assistant Secretary of the Treasury Abernathy denounced the Republican bill.

Now, it is true in 2003 I did say at a hearing that I did not think Fannie Mae and Freddie Mac faced a crisis. I did not think they did at the time. I didn't think Wachovia did at the time. I didn't think Merrill Lynch faced one at the time, or AIG or a number of other financial institutions that have failed even more spectacularly than Fannie Mae and Freddie Mac. That didn't mean I wasn't for some regulation. I didn't think they faced a crisis.

But I changed my mind a year later because, in 2004, as is made clear in an excellent book by Mark Zandi--Mr. Zandi is one of our best economists. He's level-headed. He's advised President Obama. He's advised John McCain. He wrote a book called ``Financial Shock: A Look at the Sub-Prime Mortgage Implosion.''

And here's what he said happened. He said, Clinton started on homeownership for low-income people. President Bush readily took up the baton at the start of his administration. Owning a home became one pillar of his ownership society. To reinforce this effort, the Bush administration--once again, it's my secret power at work--put substantial pressure on Fannie Mae and Freddie Mac to increase their funding of mortgage loans to lower income groups.

So, yes, I didn't think they were in crisis in 2003. In 2004, the Bush administration, according to Mr. Zandi's book, put pressure on them to increase this.

OFHEO, the Bush-controlled regulator, set aggressive goals for the two giant institutions. By the time of the subprime financial shock, both had become sizeable buyers of these securities.

Now, I didn't think that was a good idea. Let me quote from the Bloomberg News Service, Mr. James Tyson. He used to cover financial news. This is from 2004, June 17. As Mr. Zandi noted, it was the Bush administration that pushed Fannie and Freddie, a year after I said they weren't in crisis.

Fannie Mae and Freddie Mac would suffer financially under a Bush administration requirement that they channel more mortgage financing to people with low incomes, said the senior Democrat on the congressional panel that sets regulations. That was me. I was by then the senior Democrat, still in the minority. The rule compelled the companies to put 57 percent of their financing towards homes for people with incomes no greater than the median income. The White House could do some harm if you don't refine the goals, said Representative Barney Frank. Frank's comments echo concerns that the new goals will undermine profits and put new homeowners into dwellings they can't afford.

Yes, I thought this was a bad idea. I didn't think giving people loans that they couldn't pay back was a good idea. It wasn't we, Democrats and liberals, who were pushing loans to low-income people. It was, as Mr. Zandi said, as Bloomberg said, the Bush administration because they wanted homeownership. By the way, that was part of an overall policy in which they cut funding for affordable rental housing.

And throughout, my difference with them has been I wanted affordable rental housing. Yes, in that 2003 quote I said I was worried that Fannie Mae and Freddie Mac would cut back on affordable housing, and in our language that we use in the housing area, affordable housing is rental housing. I tried

to get Fannie Mae and Freddie Mac not to buy bad subprime mortgages but, if they had profits, to put some of them into affordable rental housing.

So, yes, in 2004, I got worried that they were, as Mr. Zandi said, as the Bloomberg News said, putting people into low-income housing. Around that time, I had a discussion with Alphonso Jackson, the Bush Secretary of HUD. He said he wanted to cut people off the rental housing assistance program after 5 years, the section 8 program whereby you help people rent housing. He said, What do you think? I said, Well, if you can stop them from being poor after 5 years that would be perfectly sensible. He said, No, no, be serious. Why aren't you for it? I said, Mr. Secretary, what will happen to some of these people who can't afford to rent if you cut off their rent supplement after 5 years? He said, I will help them become homeowners.

This was the Bush social policy. This was their compassionate conservatism. They were the ones pushing this, not CRA because it wasn't the banks doing it. Fannie Mae and Freddie Mac were doing it at the orders of the Bush administration.

So, in 2005, I did agree now, given this, that it was time to regulate Fannie Mae and Freddie Mac, and I joined Mr. Oxley, the chairman of the committee who tried to do it in 2003 and was stopped by the Bush administration, and in 2005, Mr. Oxley began again a bill to regulate Fannie Mae and Freddie Mac.

It passed the Committee on Financial Services, of which I was the senior Democrat still, by 65-5. That was the bill Mr. Oxley put out. Five Republicans voted against it. They were on the Bush side; it didn't go far enough. But 28 Republicans voted for it, with all the Democrats. So 65-5. The bill passed the House in 2005 to regulate Fannie Mae and Freddie Mac. It's been argued that, oh, yeah, but the bill was too weak because at the markup session, the committee vote, Democrats blocked good amendments.

Let me be very clear. Let me check the record. I have the record here. I'm going to put it into the Congressional Record. No amendment at that session on the committee vote which received a majority of Republican votes was defeated. Some Republicans were defeated, but they had a minority of Republican votes. A majority of Republicans carried the day on every vote.

There were two efforts to try and tighten it. They were both defeated against the chairman's wishes, with a majority of Republicans against them on both sides.

I'll yield later on. I will put that in there. I will yield to the gentleman to clarify that.

The gentleman may--I will yield briefly.

I have the amendments. I'll read them. I'm sorry, I'm not going to waste time. I'm sorry, we don't have time, but I'm not going to give up my scarce time while the gentleman wanders through memory lane. I am sorry, I take back my time. I'll read the amendment. I'll look for the amendment offered by Mr. Garrett.

An amendment to the amendment in the nature of a substitute offered by Mr. Garrett, number 1R, was withdrawn. We go down. An amendment was offered by Mr. Paul. It was defeated 14-56. There were 37 Republicans on the committee. An amendment was offered by Mr. Royce. It was defeated, 17-53, 20 beat 17. Then we have the only one I see by Mr. Garrett, who's asked me to yield, it was withdrawn. So Mr. Garrett offered one amendment at that markup, and it was withdrawn.

I will put the record in there. I don't have further time to yield. If the gentleman wants to see if the record was incorrect, and at one point I quoted something about the gentleman that was incorrect and I apologize, but this one I have double-checked. So Mr. Garrett offered one amendment, and it was withdrawn.

Amendments to strengthen the bill, to put some spine in Mr. Oxley, who the Republican administration thought too weak, the author of Sarbanes-Oxley, the coauthor, two Republican amendments taken a roll call, both defeated. A majority of Republicans defeated them, and then we went to the floor of the House on this--and I voted for the bill.

We went to floor of the House. We came to the Rules Committee, and Republicans then in the Rules Committee did something outrageously procedurally. We had in there a provision that said some of the money from Fannie Mae and Freddie Mac profits would go, if they had the profits, to rental housing, not subprime mortgages, to rental housing, and it would go through organizations. Conservative Republicans said, oh, no, some of these organizations are nefarious, you can't be giving money to some of these organizations; you better give only to housing groups; if you give it to a multipurpose organization, bad things will happen.

So they put an amendment in that had not been offered in committee and did not allow a vote on it on the floor. It was a self-executing rule as they call it. A self-executing rule is what you call it when you jam it in and don't let people vote on it. This was the Republicans in the Rules Committee. Mr. Oxley was not in favor of it, but he had to be a good soldier.

It said no organization could get any money to build this rental housing if housing wasn't their prime goal, and we heard from some of those radical organizations who were upset. I remember particularly the Catholic Church, which does a very good job of building affordable housing. I work very closely with the Catholic Church and they do excellent work in the Archdiocese of Boston, the Diocese of Fall River, Arlene McMame and Lisa Alberghini, two wonderful women working under our cardinal and our bishop in this regard.

And the Catholic Church said, you know, it says we can't get any money unless housing is our main purpose. Now, we care a lot about housing, but God has to be our main purpose. So the Catholic Church apologized for the fact that they could not claim for the purpose of getting money that their main purpose was to build housing. They would have been excluded. I was angry about that, and so when the bill passed the House I voted against it. I still wanted the bill to be passed without that.

But the point is this. 2003, Republicans in power, no bill is offered. So it's apparently my fault that the Republicans, since they were fighting each other, wouldn't offer the bill.

In 2005, it is offered, and unlike the gentleman from New Jersey, I joined the chairman of the committee and a great majority of the Republicans, 32 of the 37 Republicans, to bring the bill to the floor. I didn't vote for it on the floor because I didn't like the housing piece, but it got 300 votes on the floor of the House, and it was about to go to the Senate.

At that point, according to Mr. Oxley, once again the Bush administration intervened to kill it. And Mr. Oxley said--I hope it's late enough in some parts of the country for me to quote Mr. Oxley--in his interview in the Financial Times, he said the ideologues at the White House blocked this regulatory bill that would have improved regulation that was voted on by 300 Members of the House, by a 10:1 ratio in the committee, by an overwhelming majority of Republicans in both bodies. He said the administration ideologues gave him the one- finger salute, which I will not illustrate on the floor of the House given propriety.

So, once again, it was blocked by them. I was supportive of Oxley in committee. I wanted a bill that created the housing thing. It got 300 votes on the floor. Did I stop it?

What happened was, it went to the Senate, and then the Republican free-for-all multiplied. It went to the Senate, and the Republican Senate voted the bill out by one vote, but it never went to the floor, and you had a three-way dispute: the Senate Republican chairman, Mr. Shelby; the House Republican chairman, Mr. Oxley; the President of the United States. The Secretary of the Treasury actually sided with Mr. Oxley, he said.

That's why we got no Fannie Mae bill. That's the history. By now the clock runs out on them. We passed the bill in 2005 in the House. I voted ``no,'' but I was prepared to vote for it with an amendment that did not affect the regulatory structure. Goes to the Senate and dies. The Republicans killed it.

I certainly don't think I had the power to stop anything from happening in a Republican House, but the notion that I have a secret power over the Republican Senate is bizarre even by the standards of the myth-makers who have gotten into this effort.

2007 comes, and I'm told, oh, I'm responsible. In fact, the gentleman from Missouri (Mr. Akin)--and I checked the record by the way, and Mr. Akin, there is zero record of Mr. Akin showing any interest in Fannie Mae or Freddie Mac, filing a bill, making a statement, until the Democrats took power. So my Republican friends, it's kind of like in the bar, the guy who's all ready for the fight as long as the other guy isn't there. When the other guy was there, they were very meek and mild.

Mr. Akin said, Well, I was chairman of the committee when the collapse came; do I take any responsibility? No, not for that, because I tried to work with Mr. Oxley in 2005 to pass a bill over what he called the Bush ideologues who blocked him. And in 2007, I became chairman of the committee on January 31.

On March 28, the committee passed a bill that improved the regulation of Fannie Mae and Freddie Mac in a way that was tougher than the Oxley bill of 2005. In fact, the Bush administration that thought that the Oxley bill was too weak approved our bill. They said it was the right way to do it. It was the right form of regulation.

In fact, Richard Baker, who unlike many of the Republicans who now are full of fight, was a leader in an effort to restrain Fannie Mae and Freddie Mac, was quoted at the time as saying Mr. Baker had been the leader in this and here's what he had to say, talking about the bill. Here's a quote from Politico: Barney Frank had witnessed Baker's battles as ranking member of the House Financial Services Committee. When he became chairman this year, he moved swiftly and pushed the bill through the Chamber in May with a 314-104 vote. The Frank legislation is significantly tougher than the one Fannie and Freddie fought so bitterly in 2000, an irony that pleases Baker. And the gentleman, our former colleague says, With every iteration--it, the bill I sponsored-- it got stronger. It's to the point where I didn't know what else there was to put in it.

And then there's a group called FM Focus. They were formed to be a critical block that sought regulation of Fannie Mae and Freddie Mac. Here's what they said in Congressional Quarterly. The chief lobbyist was asked, were any other Democrats helpful? Here it is.

Here's what the chief lobbyist for the Fannie Mae and Freddie Mac group said: ``The Senate Banking Committee passed a very good bill in 2004.'' It never got to the Senate floor. That was under the Republicans. There I go again stopping the Senate Republicans from bringing their own bill to the floor.

The Senate Republicans had a bill. Never came to the floor of the Senate when I was in the Democratic minority in the House. Then the House introduced a bill, which it passed, but we couldn't get it to the floor of the Senate.

``Then, after the 2006 election, when everyone thought FM policy focus issues would be tough sledding with Democrats in the majority, Barney Frank as the new chairman of the House Financial Services Committee stepped up and said, `I'm convinced we need to do something. He sat down with Treasury Secretary Hank Paulson and, frankly, upset people in the Senate and Republicans in the House.'' Because they wanted an issue to complain about. They didn't want to see a solution.

``They came up with a bill that was excellent--and it was the bill that largely becomes law, and they were able to be phased out.''

So let me just summarize on Fannie Mae and Freddie Mac. The Republicans do nothing to pass a bill in their 12 years in power. 2003, Mike Oxley tries to pass one. The Bush administration called it off by pressuring him.

2005, he gets one passed in the House. The Bush administration denounces, he denounces them, and the Senate doesn't pass it. 2007, when I became chairman, we passed it. So I don't think I apologize for this.

Unfortunately, Senate deadlock again occurred this time with the Democrats in a 2-vote majority, but it has a happier ending because the Democrats in the Senate ultimately did pass the bill.

In January of 2008, worried that the Bush policy of pushing them into too many subprime loans, which I document starting in 2004, I appealed to Secretary Paulson, who will acknowledge this, when we did the economic stimulus bill, and said, please, would you put the Fannie Mae and Freddie Mac regulatory bill which you like into the stimulus. It also had an affordable housing trust fund.

So the right wing didn't like it. They didn't like the idea of helping build affordable rental housing. But building affordable rental housing avoided the problem of bad subprime mortgages. That was the solution I always worked for. And Mr. Paulson basically said, I'd like to do it, but I've got conservatives here who won't let me.

So we could have had that in the stimulus in 2008. It didn't finally pass until July of 2008. By that time, it was too late to avoid the disaster with Fannie Mae and Freddie Mac. But if I had been successful, we would have passed it in 2005, myself, working as a junior member of a coalition with Mike Oxley. We would have passed it in 2007 if the Senate had been able to do it. So that's the story of Fannie Mae and Freddie Mac.

So it is the Republicans' fault because they ran the House and the Senate and the Presidency that we didn't get passage of a Fannie Mae- Freddie Mac bill until the Democrats came back to power. It's indisputable. Republican President, Republican House, Republican Senate. No bill.

Democrats take over. We get a bill through the House in 1 year. Unfortunately, a year later we have to wait before we get it through the Senate.

But when my Republican friends think about it, I don't want them to feel too bad--on this issue--because while they were clearly the ones who were responsible for no regulation of Fannie Mae and Freddie Mac, I don't think it had as much negative impact as they think. I think the Fannie Mae and Freddie Mac collapse was as much an effect as a cause of the subprime crisis. Fannie Mae and Freddie Mac did not originate mortgages. That's not their goal. They bought mortgages made by other people. If people hadn't made those bad mortgages in the first place, there wouldn't have been any. So were a lot of others in the private sector.

And that's where the real blame lies. Blame lies with Republican policies that resisted our efforts to restrict inappropriate subprime loans. This is the crux of it. Bad subprime loans were the root of this--and there could not be a clear partisan divide on the issue. Again, I would urge people to read Mark Zandi's book.

In 1994, the last time the Democrats had a majority before 2007, my predecessor, an excellent consumer fighter from the State of New York, helped pass a bill called HOEPA, Home Ownership Equity Protection Act. It said to the Federal Reserve: Regulate subprime loans. Remember, the problem I mentioned before is that we got a new form of lending that went outside the banks and went to the mortgage finance companies and they weren't regulated.

So the Democratic Congress said: Mr. Greenspan, regulate them. Mr. Greenspan said explicitly: No. In fact, Mr. Zandi, a man who's been an advisor to John McCain, headlines on page 152 of his book on the Financial Shock, a subchapter headlined: Greenspan's Regulatory Failure.

Mr. Greenspan acknowledges much before the Government Reform Committee this year. By the way, another one of those who has said that we were secretly behind this, who was a member of the Republican Party and did nothing in the House to stop this was the gentleman from California, Mr. Issa. He was a member of the Government Reform Committee for many of these years. They did nothing about

Fannie Mae and Freddie Mac until Mr. Waxman took over and got into it during the first Congress among Democrats.

But Mr. Greenspan refused to do that in 1994. Many pressed him to do it. He refused. In 2004, when the Bush administration began pushing harder for subprime loans, many of us became concerned.

Here's what Mr. Zandi says again. ``A group in North Carolina was particularly concerned about that,'' the Committee for Responsible Lending, ``working with two of their very effective and thoughtful members''--members of our Financial Services Committee, Mr. Watt and Mr. Miller--``they sought to get legislation enacted that would prevent this sort of abuse.''

We began conversations. I was then the senior Democrat still on the committee. The Republican chair of the committee that had jurisdiction on Housing was the gentleman from Alabama, Mr. Bachus, now the ranking member, the minority member.

And I will do him a favor--I will not impute to him the secret powers imputed to me. I don't blame Mr. Bachus for what we do or don't do. We're the majority and we will take the responsibility. It's the Republicans who won't take the responsibility for their zero batting average for 12 years when we were in the minority.

But we sought, as Mr. Zandi documents, to pass legislation to restrict subprime lending. Alan Greenspan would use his authority, so we tried to do it. And the problem is that the Republican philosophy that ruled of no regulation knocked it out of the box.

I think Mr. Bachus was serious. Mr. DeLay was even more serious. He didn't want it. We were in negotiations. Now the gentleman from Alabama was chair of the subcommittee. He could have, any time, called a markup, brought a bill out. We thought his bill would have been strong enough. He could have outvoted us. Republicans often did that when they were in the majority, as we often do today.

But here is what Mr. Zandi said: ``Democrats in Congress were worried about increasing evidence of predatory lending. The Bush administration and most Democrats wanted a Federal equivalent to the North Carolina law to cover all lenders, not just the banks. The Bush administration and most Republicans in Congress,'' who were in the majority, ``were opposed, believing legislation would overly restrict lending and thus slow the march of home ownership.

``The last attempt to pass antipredatory lending legislation occurred in 2005, but it was also stymied by the Republican leadership.''

So here's where the Republicans failure is. They pushed for greater home ownership among low-income people--not CRA, the Republicans, because this was their philosophy. This was their social program as opposed to rental housing, much more appropriate for low-income people. And then they blocked our efforts to regulate it.

Once again, we had to wait until 2007. In 2007, when the Democrats became the majority, we did pass legislation to block inappropriate subprime lending, predator lending. We got the bill through the House. This time, we weren't able to get it through the Senate but we did have some success because the Federal Reserve under Mr. Bernanke has been a much more responsive institution to these kind of problems than Mr. Greenspan. I thought Mr. Greenspan did a good job in macroeconomic policy. But he was lousy because of his ideological opposition to any kind of regulation.

Mr. Bernanke used the authority in 2007--after we even moved on our legislation--he used the authority Mr. Greenspan wouldn't use and promulgated rules to ban subprime lending. I don't think they go quite far enough, and they should be statutory.

So we will get a test, Mr. Speaker, because when we return from the break, the Committee on Financial Services will bring out a tough bill to put rules on all subprime lending. Essentially, we're going to use our community banks as a model--these well-run institutions. We're going to take the rules they have long used and apply them to all loans to prevent the bad subprime loans.

The last time we did that, two-thirds of the Republicans voted against it. In fact, we were opposed by the Wall Street Journal.

I do think the Wall Street Journal's role here deserves some coverage. The Wall Street Journal has been one of those in this dishonest, anti-historical efforts to blame the Democrats. In particular, they had an editorial recently which said I was pushing for people to get subprime loans. Exactly the opposite is the case. And I wrote a letter, by the way, documenting that, and it could not be printed.

I have to say this. I respect the press, but the people who write the Wall Street Journal editorials in this, Mr. Paul Gigot and Mr. Stephen Moore, are cowards and liars. They print stuff that they know is wrong and will not give me the access to reprint. Fortunately, I have this access, and I'm going to put into the Record the letter I sent refuting it.

Letter to the Editor of the Wall Street Journal

House of Representatives,

Financial Services Committee,

Washington, DC, December 5, 2008.

Editor: I am used to having my views severely distorted by

the Wall Street Journal Editorial Board--in contrast to the

accurate representation that its reporters present. But the

opening of the editorial on December 3rd doesn't distort--it

gets the truth absolutely backwards. In short, the Journal's

assertion that I have ``spent [my] career encouraging

mortgage loans to people who can't repay them,'' is not only

entirely inaccurate; it blames me for policies that the

Journal has itself defended.

I have consistently argued that the push for homeownership

that existed in the Clinton administration, but was

significantly upgraded in the Bush administration, made the

mistake of assuming that virtually all people could be

homeowners. In contrast, I argued that the majority of low-

income people should be aided by policies that promoted

affordable rental housing.

For example, on February 18, 2002, at a hearing on the

budget I said ``I am in favor of trying to help lower-income

people get the advantages of homeownership . . . but almost

by definition, the large majority of poor people are going to

need rental housing.'' On March 6, 2004, the National Journal

reported that ``When the FHA's plan to insure subprime loans

was included in a Senate-passed appropriations bill, Frank .

. . a staunch supporter of low-income housing, wrote a highly

critical letter urging that the measure not be included . . .

Not only had the House committee not examined . . . the

proposal he said then, but the measure also offered no

protection against lenders inappropriately steering people

towards these high-cost loans. Nor did it offer safeguards to

ensure that participants `were fully suitable for

homeownership.'

That same year, when the Bush administration insisted that

Fannie Mae and Freddie Mac raise the percentage of below-

median income homeowner mortgages they bought, I was

correctly quoted in a Bloomberg article on June 17th as

saying that this would ``do some harm,'' and the writer noted

that ``Frank's comments echo concerns . . . that the new

goals will undermine profits and put new homeowners into

dwellings they can't afford.''

It was a consistent series of statements like that on my

part, and efforts to act on them--although these were often

unsuccessful when I was in the minority--that led frequent

Republican economic appointee and Wall Street Journal

contributor Larry Lindsey to write in April of this year that

``Barney Frank is the only politician I know who has argued

that we needed tighter rules that intentionally produce fewer

homeowners and more renters. Politicians usually believe that

homeownership rates should--must--go ever higher.''

In fact, I was one of the supporters in 1994 of the

legislation that directed the Federal Reserve to restrict

inappropriate mortgages at the subprime level, and I also

lamented Alan Greenspan's refusal to implement this--a

refusal which he in a forthright manner acknowledged

recently was a grave error. When he refused to do this, I

and others in Congress, mostly but not only Democrats,

pushed for legislation to restrict subprime mortgages.

As Mark Zandi notes in his recent excellent study of the

financial crisis, when ``the Bush administration put

substantial pressure on Fannie Mae and Freddie Mac to

increase their funding of mortgage loans to lower-income

groups,'' I and other Democrats stepped up our efforts to

pass legislation that banned the inappropriate loans that

have led to the current crisis. In Zandi's words, ``Democrats

in Congress worried about increasing evidence of predatory

lending . . . and the Democrats wanted a federal (law) that

would cover all lenders nationwide. The Bush administration

and most Republicans in Congress were opposed, believing

legislation would overly restrict lending and thus slow the

march of homeownership . . . the last attempt to pass any

predatory lending legislation occurred in 2005 but it was

also stymied.''

In other words, I was consistently arguing against efforts

to extend homeownership to people who could not afford it,

and instead sought to increase rental housing. Indeed, as the

Journal knows, one of their criticisms of my attitude towards

Fannie and Freddie has

been my ultimately successful effort to create an affordable

housing trust fund that takes money from Fannie and Freddie

and puts it into rental housing.

In fact, Zandi's comment that the last effort to pass any

predatory lending legislation was 2005 is correct as it

applies to those years from 1995 until 2006 when the

Republicans controlled Congress. However, when the Democrats

achieved a majority in 2007, and I became Chairman of the

Financial Services Committee, the first major piece of

legislation the committee approved was a bill adopting the

regulatory upgrade for Fannie and Freddie that had been

strongly advocated by the Bush administration, but which it

had been unable to get the Republican Congress to pass. Next,

we moved on to anti-predatory lending legislation and

succeeded later in 2007 in passing a bill that, had it been

law earlier--when we were in the minority and unable to enact

it--would have prevented most of the bad loans.

But, while the predatory lending bill passed by a large

majority in the House, there were staunchly conservative

advocates of unlimited homeownership who were critical. One

prominent conservative voice lamented in November 2007 that I

planned ``to hold a committee vote on the Mortgage Reform and

Anti-predatory Lending Act that would impose new rules and

financial penalties on subprime lenders while providing new

lawsuit opportunities for distressed borrowers.'' In

objecting to this legislation, this commentator defended the

record of subprime lending, although conceding that there had

been some ``lending excesses.'' Decrying the attacks on

subprime lending, this statement said that ``For all the

demonizing, about eighty percent of even subprime loans are

being repaid on time and another ten percent are only thirty

days behind. Most of these new homeowners are low-income

families, often minorities, who would otherwise not have

qualified for a mortgage. In the name of consumer protection,

Mr. Frank's legislation will ensure that far fewer of these

loans are issued in the future.''

Exactly. That was my intention then, and it was my

intention years earlier when Republicans blocked it and

carried out the spirit of these comments to allow fairly

unregulated subprime lending. And of course the statement I

have been quoting here is the Wall Street Journal Editorial

of November 6, 2007.

Barney Frank,

Chairman.

By the way, one response to their argument--this is my letter--that I was pushing for subprime loans--they said that I was the one who was always trying to push subprime loans. Here's a quote from Larry Lindsey. Mr. Lindsey was an advisor to Ronald Reagan and to both Presidents Bush. He was fired by the most recent President Bush because he predicted that the war in Iraq would cost $100 billion, and he was told that was wrong. He was wrong. It was way too low. That's not why they fired him.

Here's what Larry Lindsey wrote in the Wall Street Journal, all places, on April 2, 2008, talking about regulation. ``In fact, Representative Barney Frank is the only politician I know who has argued that we need tighter rules that intentionally produce fewer homeowners and more renters. Politicians usually believe that homeownership rates should--must--go even higher. The rarity of Mr. Frank's thinking is a reminder that when markets are committing excesses, we should not except Washington actors to check on them.''

The Wall Street Journal, as I said, lies about this. In fact, in 2007, when we passed a bill over the objection of most Republicans, although we had the support of the then ranking member of the Financial Services Committee, although I understand he got in a lot of trouble with his right wing over this and promised maybe never to do it again. We'll see when this comes up.

But here's what the Wall Street Journal editorial said when we passed a bill to stop abusive subprime lending. ``For all the demonizing of subprime lending''--2007, they said we were demonizing subprime lending, the Wall Street Journal editorial--``about 80 percent of even subprime loans are being repaid on time, and another 10 percent are only 30 days behind.''

Isn't that wonderful? Only 10 percent are more than a month behind. Ten percent default and 30 days another 10 percent? Only the Wall Street Journal in this ideological fantasy world would think an 80 percent repayment rate of mortgages to low-income people is a good thing.

But here's what they said. ``Most of these new homeowners and low- income families are often minorities''--so apparently it the Wall Street Journal who's pushing to get minority loans which are going to get a default at a rate up to 20 percent--``who would not otherwise qualify for a mortgage. In the name of consumer protection, Mr. Frank's legislation will ensure that far fewer of these loans are issued in the future. I hope so, exactly.

It was our goal, our intention, our mission to have far fewer of those loans. And if we had gotten the bill passed in 2007, we still would have had a crisis. It wouldn't have been as bad today. It was stopped by Republican opposition in the Senate.

So that's where we are. Republicans are in power. They do nothing to regulate Fannie Mae and Freddie Mac. They do not only nothing to regulate, they push more subprime loans through the Bush administration and they block our efforts to legislate about them.

We now have an agenda to go forward, and I am going to outline that briefly. But I will at this point--I have about 17 minutes left--I will yield 4 of my 17 minutes to the gentleman from Iowa.

What poster mentions Frank Paulson?

I thank the gentleman for that profound correction. I will see that the typist is severely chastised.

The gentleman is correct. Does the gentleman remember how many votes that got on the floor of the House in a Republican House?

Thirty-six. The gentleman has a very good memory, 36; 30 were Republicans, 6 were Democrats.

So it is true, the former chairman of the committee offered an amendment to tighten this up, and then the House, with about 230 Republicans, 30 voted with him and 200 Republicans voted against him. Was that my fault?

No.

I will take back my time and say it is exactly the opposite. Throughout the debate, I said to people that they should not consider that there was a guarantee, that they should not consider there was an implicit guarantee. I consistently said that. They benefited from people's perception when in fact, the share holders--I'm sorry, I haven't yielded again. I have consistently said that.

When there was an intervention that Mr. Hank Paulson asked for, it did refer to the bondholders, as we often do. The shareholders were wiped out, including the preferred shareholders.

So, in fact, when I was chairman of the committee and we responded to Mr. Paulson, we wiped out the Fannie Mae and Freddie Mac shareholders, as I had always warned that they could be. I did think at the time we passed the bill, at Mr. Paulson's urging, or that we were about to, that it would be helpful. It turned out things were worse than I thought. But he did mention Mr. Leach, so let me give the voting record. And I was neglectful of this.

The bill came to the floor of the House, the bill the Bush administration thought was too weak. Now, the Republican Rules Committee allowed nine amendments. By the way, when the bill came to the floor when I was the chairman, we had 24 amendments, because I do believe, I think, in a more open process. We had the manager's amendment was one of them, a couple by voice vote. Mr. Leach sought to put in minimum capital levels. He lost 378-36. This is in the Republican House.

Again, the argument is, who did it? This is part of your zero. I should have had a footnote. The one time you did try, Mr. Leach, who thought Mr. Oxley was being too weak, he got 30 Republicans with him and 200 against him. Now, Mr. Royce also had an amendment; Mr. Royce, another critic. He did better than Mr. Leach. He got 73 votes versus 346. So in both cases, the two amendments that were allowed--oh, I take it back. Mr. Paul had an amendment, too. And I guess this is a sign of the state of the Republican Party.

I am sorry, the gentleman has raised a point and I am going to respond to it.

The point is this: Mr. Paul also--there were three amendments offered to toughen the bill in 2005. Mr. Paul got 47 votes. Well, that is the Republican Party; Mr. Paul gets more votes than Mr. Leach.

But here are three amendments offered to toughen it, all three defeated by an overwhelming majority of Republicans.

The point is, I supported Mr. Oxley. I thought we had a good bill.

I would also note that by 2007--and, by the way, in 2005, I was hoping that we would regulate Fannie Mae and Freddie Mac but also restrict subprime loans. As it became clear to me that Republican opposition would prevent us from blocking subprime loans, I did become convinced of a need for tougher regulation. That is why Mr. Baker, your former colleague, said the bill we brought out in 2007 was as tough as it could be.

Now I will yield again.

Yes. I will----

Yes. I am taking back my time to say yes.

My point is that it was not my fault that 200 Republicans voted against it. I did vote with the overwhelming majority of Republicans. The question is, who is responsible?

But I would also say this. You know, when you are in the minority you can't always shape things. Sometimes you have to make unpleasant choices. When I became the chairman of the committee on January 31, 2007, I was able then to combine tough regulation, knowing that we were going to be able to restrict subprime, and with help for rental housing.

So the fact is that when I was in power, not forced to choose among Republican alternatives but in the majority, I helped pass a bill that was tough enough, tougher than the bill in 2005, that was acceptable to the Bush administration, acceptable to the leading critical group, acceptable to Mr. Baker.

So, yes, I voted with the great majority of Republicans. So I guess that is what I am responsible for: I voted with the overwhelming majority of House Republicans to report out a bill that the Republicans thought would work.

I will yield to the gentleman from New Jersey.

Well, I yielded to the gentleman from New Jersey.

Well, I agree--the gentleman says my persuasive powers. That is the joke of it all. That is, frankly, the gap between the propaganda and the reality.

The Republicans are in control; they pass the bill. In fact, they cut out the affordable housing part I wanted. I did at the time hope that we could combine moderate regulation of the sort Mr. Oxley wanted and the overwhelming majority of Republicans wanted with an affordable housing program and with restrictions on subprime. When we were not able to get the subprime bill through and things had deteriorated, I then said, okay, and I was for tougher regulation.

So, by the way, at that point the gentleman from Iowa I believe voted against it. I know the gentleman from New Jersey did. Do you know why? I will tell people, Mr. Speaker. Because I, in the chairmanship that I had, was able to get a bill that toughened the regulation of Fannie Mae and Freddie Mac.

But what about the Catholic Church getting money to build rental housing, and allowing nonhousing groups like the Catholic Church, and others, to build rental housing? They opposed it.

So, yes, a majority of Republicans voted for the bill in 2005 that the Bush administration was too weak, and a majority of the Republicans opposed the bill in 2007 that the Bush administration was strong enough, because their opposition to rental housing for low-income people overcame that. But that is the story.

Now I yield to the gentleman from New Jersey.

And ``no'' in committee.

I yielded to the gentleman. He may do what he wishes.

I will take back my time to say a majority of the Republicans at every turn. Don't say--not some Republicans. A majority of Republicans in the committee, a majority of Republicans on the floor. Not some Republicans. But every time the

issue arose, a majority of Republicans were on the side of Mr. Oxley and myself.

I take back my time. Now I guess I am guilty. Yes, I was the senior Democrat, and I spoke out. I wish that I had that effect elsewhere. You would not have been able to kill the affordable housing trust fund.

While I was the ranking minority member, when I was the senior Democrat of the Housing Subcommittee and then on the full committee, the Republican majority killed virtually every affordable rental housing production program we had. They beat up public housing unmercifully, to the great distress of lower-income people.

I wish I was as persuasive as the gentleman now, I must say, less than convincingly tries to argue. And in fact, no, I do not think I charmed the majority of Republicans. And, by the way, it was Mr. Baker whom the gentleman correctly identified as the leading opponent of Fannie Mae and Freddie Mac, who said in 2007, when I became chairman and was able to put together the right ingredients in the bill, quote, ``With every iteration, it got stronger. It is to the point where I didn't know what else there was to put in there.'' So I appreciate Mr. Baker's endorsement of the bill which I helped pass.

Now, I do want to address one issue as he closes, and I may expand on this. There was one other point--and we have had a legitimate debate.

But in an article in a publication called Investors Business Daily, to my great dismay circulated by the Republican staff of the Financial Services Committee, I was accused of betraying my oath and my obligation because of a relationship I had with a man who worked at Fannie Mae. And I want to address that scurrilous piece of defamation right now and express my disappointment that people I have worked with on the Financial Services Committee, that their staff, presumably with the approval of somebody, would have circulated such a scurrilous lie.

As we know, there are members in this body who have spouses and partners who are variously employed, and it has never been the rule that you couldn't do anything because your partner is employed. We have a Member of the Republican Party who very conscientiously has been voting ``present'' recently on some measures because of his wife's position. And the article falsely said that I was having a relationship with a senior executive at Fannie Mae, and that is why I did it.

Now, obviously the fact that it is a gay relationship adds to a certain piquancy with the right wing when they circulate this sort of vicious defamation.

The fact is that the man with whom I had a relationship graduated from business school in 1990. He was a new MBA. He then went to work in an entry-level position at Fannie Mae and Freddie Mac. He was never a senior executive. He had a working position at Fannie Mae and Freddie Mac.

After eight years, we ended the relationship. He left town. I was by that time a lower ranking member of the committee. The events we are talking about happened many years later after we had separated, when he had, to my knowledge, no financial interest, and he was 3,000 miles away.

No, I have to say to the gentleman from New Jersey, I reject the suggestion that I was so persuasive that the only one issue on which I could prevent a right-wing rampage on the part of his party on the Financial Services Committee, in which I was unable to get decent regulation, in which I was unable to get good subprime lending, or I was unable to protect affordable housing--the only thing I was able to do was to stop them from regulating Fannie Mae and Freddie Mac. And that is why a majority of them never took that position and we never got a good bill until I became chairman. No, I think it is something else.

I think it is the fear of the right wing that regulation is coming; that unregulated credit default swaps are going to be no longer the case; that we will have rules that will prevent irresponsible subprime lending. As Mr. Zandi, a great thinker on this, notes in his closing passage: Regulators didn't create the subprime financial shock, but they did nothing to prevent it.

In other words, no, it wasn't the CRA that did it; it was the lack of regulation that did it. This was the result of first policymakers' distrust of regulation in general, their enduring belief that markets and financial institutions could effectively police themselves; and, second, of the Nation's antiquated regulatory framework. The institutions guiding the Nation's financial system were fashioned during the Great Depression; and, as finance evolved rapidly, they remained largely unchanged, and overhaul was indisputably overdue.

I happen to be chairman of the committee that is going to have a major play in this overhaul, and there are right-wing forces that don't want that to happen. So I accept the fact that I am the target. I don't think it is me, personally. I am not that paranoid. It is that if they can go after me and blame me, and, unfairly, Senator Dodd--who wasn't even the senior Democrat when this was happening. It is particularly far-fetched to blame Senator Dodd. He wasn't even the senior Democrat. The notion that he was as the second ranking Democrat he was running the Senate I would have thought was too implausible. But, again, we have learned from Swift Boating and elsewhere that vicious right-wing propaganda cannot be allowed to go unrebutted.

The fact is that, yes, there is this concerted effort, there is this fear that we won't have unregulated subprime mortgages. And we will see this when we bring the bill up, that we won't have any more unlimited credit default swaps and collateralized debt obligations.

It is the fear of regulation that Franklin Roosevelt confronted, that Theodore Roosevelt confronted. It is the fear that the disastrous results of the policy of deregulation have led the American people to understand that the time has come, once again, in our history to adopt a good set of regulations.

I believe that is why there are these lies, distortions, and smears about my record, why I am being held accountable for the 0-12 record of the Republican Party. And the time has come to have that debate, because we have learned, I think, that if we wait too long, the lies will stick. And not only will that be bad for reputations; even worse, it will be bad for the public policy we need to prevent a retention.

I yield back the balance of my time.

Would the gentleman yield? Yes, I think it would be a very good idea if instead of--and I thought it was catch- up time for me. But when we come back, I would like to have, and we can do 2 hours, we can have one D and one R, and have 5 minutes each. We can have a fair debate thing. I look forward to debating these. So I thank the gentleman for that. And when we return, I'm going to ask my staff to start getting some hours and we can work with Members on the other side. Let's have some genuine debates on these issues.

And I thank the gentleman for the spirit in which he said that.

Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days, on H.R. 1664, to revise and extend their remarks and insert into the Record extraneous material thereon.

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.

Regular order.

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 will yield.

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

Will the gentleman yield?

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.

Will the gentleman yield?

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

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

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

Parliamentary inquiry, Mr. Chairman.

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

I am an opponent of the amendment.

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

Mr. Chairman, parliamentary inquiry.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

I reserve the balance of my time.

Who has the right to close?

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

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

Will the gentleman yield?

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

I thank the gentleman for yielding.

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

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

Will the gentleman yield?

In fairness to the gentlewoman, she's amending into the base of the bill. There had been a notion that you just did the top executives. AIG made it clear there could be hundreds of people covered.

Yes, I trust no Secretary of the Treasury that I've ever seen would say that a cost of living or even salary increase--but it does cover all employees because, as I said, the AIG and other experiences show hundreds of employees could be involved.

Will the gentlewoman yield to me?

Let me respond to the gentleman from Alabama. It does close loopholes. Golden parachutes are a form of retirement. We have cases where executives after retirement get the use of airplanes, get the use of other things. And it is true that it has only been executives. We have no contemplation that anybody would use this for lower level, average employees. But if you limit it to 5 executives, 10 executives in some of these large companies, yes, you do invite problems. And it would be a very easy thing to do to say, Okay, we're only going to give you this now, but once you retire, we'll give you all the extra money we couldn't give you in the first place. It is certainly the case that outsized retirement packages to a handful of favored employees has been a part of the problem.

I ask the gentlewoman to yield me back the time.

Stock of that sort would not count. If it is stock that goes up in time, that is not a problem. Stock that is going to simply be regular stock, and it goes up, that's not covered.

Would the gentlewoman yield further?

The other problem is this. The gentleman from Alabama, my good friend, is apparently assuming that the TARP will live forever, because by the time a lot of these people have been retired, we hope they have paid back the TARP funds.

Reserving the right to object, how many minutes?

One is the outer limit of everybody's patience, but I won't object.

Will the gentlelady yield?

I thank the gentlewoman.

I will take the 1 minute that was yielded to say, once again, this only applies while they have got TARP money. The notion that TARP is going to live forever is a fantasy--or, that people won't pay it back. This only applies during the duration of TARP.

Secondly, there is a scare tactic here that I think is belied by the facts. I do not think any Secretary of the Treasury I have seen, served with, or read about, would decide that the health benefits of a thousand workers could be excessive or unreasonable.

I will tell the gentleman this. I wish we lived in a society in which we had to worry about excessive and unreasonable pension benefit for retirees who are simply rank and file workers. That's not a problem that has ever arisen.

So I think this is, frankly, an objection in search of a reason. Yes, you want to avoid what we know has been used--putting it into the back end or the front end or trying to do it in tricky ways. And that's what the gentlewoman correctly wants to stop.

Would the gentlewoman yield?

The gentlewoman was not a Member of the Congress when those events transpired.

Mr. Chairman, I demand a recorded vote.

Mr. Speaker, I demand a recorded vote.

Mr. Speaker, I move to suspend the rules and agree to the concurrent resolution (H. Con. Res. 76) expressing the sense of the Congress regarding executive and employee bonuses paid by AIG and other companies assisted with taxpayer funds provided under the Troubled Assets Relief Program of the Secretary of the Treasury.

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

Mr. Speaker, there is a great deal of anger in the Nation, and it is reflected in this House, which is representative of the Nation, about retention bonuses given to people who worked at AIG. Retention bonuses in this situation, Mr. Speaker, strike me as a form of legalized extortion. These are not performance bonuses. I was unclear about that and misspoke about it to some extent. These are bonuses paid solely so that people who had been employed at AIG would not leave AIG as it became clear the company was in trouble.

Specifically, we were told that these retention bonuses go to employees who were engaged in complex financial transactions. Now it is, in sum, these complex financial transactions that caused the company the problem. The insurance entities, regulated by State insurance regulators, caused no problem. In fact, they generated the resources and the revenues that allowed these other people to get themselves in trouble.

According to Mr. Liddy, who was appointed to head AIG after the failure, a decision was initiated by the Federal Reserve last September to lend them money and then make a change in the company's management. Mr. Liddy said he was afraid--and he is genuinely sincere about this-- he was afraid that some of these people who had been working at the company and who had intimate knowledge of these complex transactions would leave the company and might, in fact, even use their knowledge in ways that would be adverse to the company.

That is a very sad commentary on them. These are people who were engaged in these transactions, the effect of which was to put the company in trouble. And we are told that they have to be bribed not to abandon the company in their time of trouble.

Now, I am skeptical that the best way to get out of the hole that those

people dug was to let them get extra pay for wielding the shovel. I believe there could have been other people hired. My colleague, Mr. Capuano, did some good questioning in this. We were told AIG felt, no, they had to pay the bonus. I think that is a very grave error.

My own preference is, and I have urged this on the administration, my preference is that they bring a lawsuit on behalf of the U.S. as the major shareholder so that we can recover here; that is, it is not a case of us as a regulator intruding on a contract by others. This is a case where we are the major owners of this company. And I believe that it is a grave error to enrich people who have apparently threatened to leave the company, abandon it and not help them get out of the problems they created unless they are given these bribes called ``retention bonuses.'' We have a resolution here which talks about several things.

First, it does express our determination to prevent these from happening in the future. We have already done some of that. We should note, this provision here, this decision was made unilaterally by the Federal Reserve system under a 1932 statute. There was no congressional input whatsoever into the decision last September to do this. The Secretary of the Treasury, Mr. Paulson, accompanied me, the chairman of the Federal Reserve, Mr. Bernanke, and they came to Congress, and they said that Mr. Bernanke had decided to give a loan of $85 billion to this company. No restrictions were put on the company. Two days later, the same two gentlemen asked us to enact legislation providing for $700 billion in authority.

At that point, we said, among other things, there has to be some restrictions on the compensation paid. Now we didn't get all the restrictions we wanted because we were in the negotiation process. But it was instructive that when the Fed did it on its own with the Secretary of the Treasury's support, there were no restrictions on compensation. Two days later, we immediately raised that, had a debate and got some of them. Now, we have gone further.

I would make this contrast. We have AIG without any restrictions. Under the TARP program, which Congress voted and which is now being administered by the current administration, we have not only imposed restrictions, we are now being criticized in the press and by some of the recipients for being too tough on them. In the New York Times last week, there was a front page article that said the banks are going to have to give the money back because we are too tough on compensation, lavish entertaining and too much pressure to make loans. There was an article in the Washington Post business section 3 days ago making the same point. I welcome that kind of criticism. I welcome the recognition that we have now become very tough. The problem is that these bonuses were granted under an authority that the Federal Reserve gave before Congress got into the situation and were able to put on the restrictions. This resolution is a beginning of what we will be doing.

There is also, I hope, going to be a lawsuit. I have been pressing the administration for a shareholders' lawsuit to recover the bonuses that have already been paid. And there will be other legislative vehicles. I hope that the Committee on Financial Services will mark up a bill next week which will embody much of what is in this resolution. We will have a markup in committee. I hope we will be able to bring a bill to the floor that will deal with this both prospectively and retroactively. At this point, this is a statement of intention which I think is appropriate because people in this country want to know what we are doing. It will be followed up by a markup in committee.

We have had several hearings on the subject of compensation and a big one on AIG, obviously, yesterday. And we will have another AIG hearing next week with the Secretary of the Treasury and the Chairman of the Federal Reserve. But we will be marking up legislation next week in committee and voting on it the final week before the recess so that what we state here as our intention I hope will become law.

I reserve the balance of my time.

I yield myself such time as I may consume to say I learn a lot in this job. Now, I have learned about a theory called creationism which in some cases holds that the world was created 4,000 years ago or 7,000 years ago by calculating what the Bible said. But I now am astounded to see a new and more compressed theory of when the world was created. It apparently was created at noon on January 20, 2009.

You just heard someone say, ``it is Obama's fault.'' In September of 2008--and I regret that we are getting into this kind of political discussion--but the gentleman from Alabama raised it. In September of 2008, two appointees of George Bush came to the Congress and said, Mr. Bernanke, the Chairman of the Federal Reserve, who had previously been on the Bush economic advisory staff, and Mr. Paulson, the Secretary of the Treasury, and they said, ``we are going to lend $85 billion through the Federal Reserve to AIG.'' They didn't ask us.

Yes.

No, I'm sorry. I will yield to talk about what I am talking about. I take back my time.

Mr. Speaker, please instruct someone who should know better about the rules. I took back my time. The point is this: He had the chance to make his argument. He wanted to make it political. Yeah, there was something in the stimulus package. Before the stimulus package, there was September of 2008. It does exist. Your revisionism doesn't work.

I would say to my friends on the other side, Mr. Speaker, in September--I note, Mr. Speaker, how sensitive the subject is that I raised. I got one sentence into describing the role of the Bush administration, and up comes my colleague from Alabama, because they don't want this to be discussed.

In September of 2008, George Bush's two top economic appointees came, and Mr. Bernanke informed us that he was going to lend $85 billion to AIG. I said, at the time, because he said ``we have obligations all over the world here, and we have to make our foreign partners know that this is not going to be a default on them.'' I said, ``well, are they contributing?'' I asked them at the time, ``will there be any contribution from foreign banks to make up what AIG owes?'' The answer was ``no.'' So from September of 2008 until January 20, 2009, the Bush administration was in charge of this.

I will yield again to your sensitivity.

January 20, yes.

Yes. I will reclaim my time to say that the gentleman has just reaffirmed what I said. I said it was the during the Bush administration.

I just reclaimed my time. Do Members not understand the rules on the other side? I yielded twice. I reclaimed my time, Mr. Speaker.

I got briefly into my response. Two of my colleagues have now jumped up because they don't want the story to be told. I said that it was under the Bush administration.

The gentleman from New Jersey got up, and, frankly, I thought he was going to say, ``Oh, no, that was the Federal Reserve, they are not technically the Bush administration.''

Instead, what he wanted to do was to drive home my point and say it wasn't just the Federal Reserve, it was the Department of Treasury in November 2008. Who was running the Department of Treasury? Bush appointees. So I accept the gentleman's correction. I should have been more clear that it wasn't just the Federal Reserve, it was also the Secretary of the Treasury and there was a restructuring.

The Bush administration was in control from September of 2008 until January. The decision to lend the money with no restrictions on compensation was a Bush administration decision.

Now, when we had to vote on the rescue plan, we did insist on some compensation restrictions. They were grudgingly applied. Under the current administration, we have greatly expanded these. If, in fact, we had covered the restrictions--well, the restrictions, let's just put it this way, that are now in place on the rescue plan are so tough that people want to give us the money back. The recovery plan, we said they could give the money back.

But the point is that yes, in November of 2008 it became even more of a Bush administration situation because Treasury had a larger role.

I would yield again to the gentleman.

The answer is the gentleman appears to have forgotten. How did it go through? Yes, the TARP legislation, requested by the Bush administration, did pass the House with the support of a majority of Democrats and a minority of Republicans, but supported by the Republican leadership.

Excuse me.

Mr. Speaker, let me explain to the gentleman, when you are recognized, you can speak. If you are not the one who is recognized, you ask someone to yield. If he yields, as I have done to you twice, you can speak. If he doesn't yield, you wait until someone does. It is an orderly process.

Now, again, I understand that this is an unusual degree to which I am being asked to yield because the Members on the other side want to make a partisan attack and not have the facts. The facts are--no, I will not yield to a continued kind of pattern of interruption because Members don't want the story told. I listened to the gentleman. He asked about how the TARP bill was passed. The Bush administration lobbied for it strongly. The Republican leadership of the House supported it, although a slight majority of the Members voted against it. A heavy majority of Republicans in the Senate passed it. So the TARP bill did pass with a majority of Republicans in the Senate, the Republican leadership in the House, and Democratic majorities in both Houses, and the Bush administration. It was genuinely bipartisan.

It included some restrictions on compensation, less than I would have liked because Republicans in the Senate, working with the Bush administration, resisted them.

We have since increased both the types of restrictions and the levels. So the answer to the gentleman's question: yes, the TARP bill did pass at the request of the Bush administration with support from the House Republican leadership, which I notice is conspicuously off the floor now to avoid embarrassment, and the majority of Republicans in the Senate. But that's the point, Mr. Speaker, this was initiated by the Bush administration, and the decision to give the TARP money without any restrictions came from the Bush administration.

I reserve the balance of my time.

Mr. Speaker, I yield 2 minutes to a member of the Financial Services Committee, the gentlewoman from Ohio (Ms. Kilroy).

I reserve the balance of my time.

I will continue to reserve.

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

Mr. Speaker, I yield myself 30 seconds to correct the gentleman from New Jersey.

I have long thought that I pay closer attention to our colleague from Texas (Mr. Paul) than his Republican colleagues. He talked about legislation, but he was talking about, in part, the legislation that gives the Federal Reserve the ability to do this.

The gentleman from New Jersey is incorrect. This was not created by the TARP legislation which the Congress passed at the request of President Bush, it was under legislation passed in 1932 which gave the Federal Reserve the authority. Mr. Bernanke was acting under that authority. So it is true that the actual loan was made under the administration of George Bush, but he was acting under authority signed by another great Republican President, Herbert Hoover.

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

I will confess, Mr. Speaker, I was not paying as close attention to the gentleman from New Jersey.

Would he rephrase the question?

Mr. Speaker, I yield myself 15 seconds to say that if the gentleman wants to ask me a question--I had said I hadn't heard it--if he would rephrase it, I will try to answer it.

I will continue to reserve.

Mr. Speaker, I guess I will never get to answer that question, so I will yield, instead, 1 minute to the Speaker of the House.

Well, Mr. Speaker, I would say to my friend from Ohio that last remark was kind of bewildering. It wasn't my time. He was out of time. He seemed to be annoyed that I hadn't answered his question, but how I don't know how I could have done that except by sign language, in which I am not proficient. In my time I will address the question. For him to ask me a question as his time expires and then express indignation at my failure to answer it puzzles me.

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

Reserving the right to object, I'm not

going to be told I have only 15 seconds to answer a question.

I thank the gentleman. I will use it and then reserve the balance of my time.

I was not a member of the conference committee. The Financial Services Committee was not directly involved in this. We were more constrained by what we thought was the germaneness to the recovery bill. So the answer is I am not familiar with whatever the reasons were as to why this was put in.

I will say this: If there had been no language whatsoever, we still wouldn't have had the authority. In other words, what did survive was additional authority. Now, if there had been no bill whatsoever, we wouldn't have come even this close. But as to the specific question, the answer is I was not involved.

I would also just say, as chairman of the Financial Services Committee, I monitor pretty closely what goes on. I am not aware of any Republican member of the Financial Services Committee who has approached us and asked us to toughen up compensation restrictions. This interest in compensation restrictions is a fairly new interest. I commend people. I think later in life, it's good to take up new things so you don't get stale. But I do want to note that it is a fairly newfound hobby of my colleagues on the other side. In fact, in September when the Bush administration said they were going to make the loan with no restrictions and we pushed for it----

I yield to the gentleman from Alabama.

Reclaiming my time, we now have the nub of it. How dare I mention September of 2008. We're talking about February. I thought the world began on January 20. Apparently it started on February 1.

The fact is that you cannot look at this out of context. It was under the Bush administration that they initiated this loan to AIG. It was under the Bush administration that they asked for TARP and for our efforts to try to restrict compensation.

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

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

Mr. Speaker, we have passed from creationism to fantasy. It's interesting.

The gentleman from Texas (Mr. Gohmert) was very critical, in fact, of the actions of the Republican leader. He said we begged people not to vote for the TARP. The Republican leader in the House last fall worked very hard to get it passed. So did the other members of his leadership.

So did the other Members of his leadership, and now he is being denounced for that. So I guess he broke even on his side, which these days, if you are in the minority, may be a pretty good day.

But the fact is this, the gentleman from New Jersey says, well, the Democrats were in the majority--though he said Democrat majority. Pardon me, for not getting his inflection absolute. Yes, the President of the United States, George Bush, came and asked us to do this, and his two top economic advisers said if you don't do it, there will be a crisis.

But, in fact, that's not directly relevant to the AIG issue. AIG was granted money.

And, by the way, the gentleman from New Jersey again misstates the relevant statute. The statute that we are referring to, that the gentleman from Texas referred to, is not the original one creating the Federal Reserve, it's the 1932 statute that gave them the power to lend money as they wish, signed by another great Republican President, Herbert Hoover.

But the point is that it was the Republican administration that said we had to do this. Yes, there was cooperation, the Republican leadership in the

House, the majority in the Senate, believing that there would have been a terrible problem if it wasn't there.

I do want to reiterate that I am now pleased, as Chairman of the Financial Services Committee, that there is this interest on the Republican side in restricting compensation. It has not previously been a strong part of their argument.

However, we will return to the subject of this resolution. The resolution isn't binding, but it is a forerunner of what will be binding.

The Committee on Financial Services will vote next week on binding legislation, and it will bring it to the floor the week after, which will embody much of this, and it will include an effort to deal with this retroactively. There will be legal questions raised, but the fact is that we will have binding legislation to embody this.

This is an important statement. I would say this in closing, Mr. Speaker. We have people now at AIG deciding whether or not they are going to give their money back. The more they give back to us, the better we will be. It won't be totally conclusive.

But to defeat this resolution because it says nice things about President Obama would be a grave error.

Madam Speaker, on Sunday, March 8th, I had the privilege of addressing one of the most worthwhile organizations in the district that I am privileged to represent--CAN- DO. Led by Josephine McNeil, CAN-DO does extraordinarily important work in trying to get affordable housing of various sorts--rental, ownership, group homes--placed in the City of Newton, where I live. This requires a great deal of work, both in compiling together the finances at a time when money was not adequate for these purposes, and in dealing with neighborhood resistance which generally turns out to have been unjustified, but which was nonetheless strong in some cases.

In addition to being able at that event to praise the work of Josephine McNeil, I had the chance to share the evening's speaking program with Steven Gartrell, who is just retiring as Director of the Housing and Community Development program in the City of Newton. He won the YIMBY Award from the organization: the ``Yes, In My Back Yard!'' honor. As the Community Development Director for the City of Newton for many years, Steve Gartrell exemplified public service that was compassionate and responsible. Under his leadership, serving several mayors, the city spent its community development block grant money wisely and well. Steve Gartrell did the most good that it was possible to do with the funds made available to him from the federal government. I am glad to be able to point to the expenditure of community development funds under Mr. Gartrell as an example of how government at the federal level can best enable good work at the local level, and I congratulate Steve Gartrell for this well-deserved award, and Josephine McNeil for recognizing him by granting it.

Madam Speaker, after 25 years of extraordinary service in the WIC Program, Mary Kelligrew Kassler is retiring. I know literally no one who has worked harder to make this the kind of country that we all want to live in. Her dedication to providing needed assistance at the critical time in their lives to lower-income women and their children is unsurpassed.

I will personally miss her as a source of absolutely reliable advice in this area. She combined a zeal for the important work she was doing with a balanced outlook and a realistic understanding of how to get things done that made her an advisor on whom I could always rely without any question.

For 25 years Mary Kelligrew Kassler has exemplified public service in a critical area. Madam Speaker, I hope that young people contemplating careers will learn about the extraordinary work she did and that she will be, at least for some, a role model.

I thank the gentlewoman for yielding.

Mr. Chair, I think her amendment is a very important one. I would ask her if we could withhold further action to do a little work on it because the notion that we should put a requirement on these servicers to get funding is a valid one. There are some interconnections here, and I think we could actually make it apply to more people. But, also, if a servicer is only doing two or three of these, the requirement that they notify everybody might become a deterrent to doing some. So I would like to sharpen it and broaden it at the same time. And if the gentlewoman would agree, we could work on this, and I think by the time this gets through the Senate, never known for breakneck speed, we would have a version that would improve it. So I would suggest that to the gentlewoman.

Mr. Chairman, it was not our intention to shut off the gentlewoman from West Virginia. Is it in order to ask unanimous consent that she be allowed the remaining time as if it had not been withdrawn?

Then I would make a unanimous consent request that the gentlewoman from West Virginia be able to conclude her remarks as if the amendment had not been withdrawn.

Mr. Speaker, I rise to oppose the motion to recommit.

Mr. Speaker, before turning to this motion to recommit, I have a serious subject I want to address.

A number of Members have been concerned about the increased assessment that's hit community banks from the FDIC, in part because of failures to which they did not contribute. Today, the Chair of the FDIC, Sheila Bair, has written to our Senate counterparts to say that in effect, if we go ahead with the increase in FDIC borrowing authority--some of that is in this bill; it would be improved on in the Senate in ways that we agree with--but if she gets the increased borrowing authority, a process that begins in this bill, she will substantially reduce that assessment on the community banks.

So voting for this bill will be an important step towards reducing the assessment of the community banks.

I insert this letter into the Record at this point.

Federal Deposit

Insurance Corporation,

Washington, DC, March 5, 2009.

Hon. Christopher J. Dodd,

Chairman, Committee on Banking, Housing, and Urban Affairs

U.S. Senate, Washington, DC.

Dear Mr. Chairman: I am writing to express my support for

the Depositor Protection Act of 2009, legislation to increase

the Federal Deposit Insurance Corporation's borrowing

authority with the Treasury Department if losses from failed

financial institutions exceed the industry funded resources

of the Deposit Insurance Fund (DIF).

As you know, the FDIC's borrowing authority was set in 1991

at $30 billion and has not been raised since that date.

Assets in the banking industry have tripled since 1991, from

$4.5 trillion to $13.6 trillion. As I indicated in my

previous letter of January 26, 2009, the FDIC believes it is

prudent to adjust the statutory line of credit

proportionately to leave no doubt that the FDIC can

immediately access the necessary resources to resolve failing

banks and provide timely protection to insured depositors.

The legislation would include important additional

authority for the FDIC and would rationalize the FDIC's

current borrowing authority. Under current law, the FDIC has

the authority to borrow up to $30 billion from Treasury to

cover losses incurred in insuring deposits up to $100,000. In

addition, when Congress temporarily increased deposit

insurance coverage to $250,000, it temporarily lifted all

limits on the FDIC's borrowing authority to implement the new

deposit insurance obligation.

The bill would permanently increase the FDIC's authority to

borrow from Treasury from $30 billion to $100 billion. In

addition the bill also would temporarily authorize an

increase in that borrowing authority above $100 billion (but

not to exceed $500 billion) based on a process that would

require the concurrence of the FDIC, the Federal Reserve

Board, and the Treasury Department, in consultation with the

President.

Because the existing borrowing authority for losses from

bank failures provides a thin margin of error, it was

necessary for the FDIC recently to impose increased

assessments on the banking industry. These assessments will

have a significant impact on insured financial institutions,

particularly during a financial crisis and recession when

banks must be a critical source of credit to the economy.

The size of the special assessment reflected the FDIC's

responsibility to maintain adequate resources to cover

unforeseen losses. Increased borrowing authority, however,

would give the FDIC flexibility to reduce the size of the

recent special assessment, while still maintaining

assessments at a level that supports the DIF with industry

funding. While the industry would still pay assessments to

the DIF to cover projected losses and rebuild the Fund over

time, a lower special assessment would mitigate the impact on

banks at a time when they need to serve their communities and

revitalize the economy.

In conclusion, the Depositor Protection Act would leave no

doubt that the FDIC will have the resources necessary to

address future contingencies and seamlessly fulfill the

government's commitment to protect insured depositors against

loss. I strongly support this legislation and look forward to

working with you to enact it into law.

Sincerely,

Sheila C. Bair.

Now, as to the motion to recommit, the gentleman from Georgia slightly under-described his amendment. Understatement is not his usual metier, but he alluded to it today. He said it would prevent, as I recall page 3, section C, help for any irresponsible borrower. No. It prevents mortgage assistance to any borrower, responsible or not, no matter what the cause. This proposal simply makes it impossible to carry out any mortgage relief.

One of the things that the President said was we would go to the servicers who now can get a payment for foreclosure. And we would say under this bill, we would authorize a payment if they did a modification instead of a foreclosure. This amendment says no, that can't happen.

We say here that we will work with the borrowers to reduce the amount that they are entitled to receive under the contract on the grounds that they would be better off avoiding foreclosure. It would have the Federal Government work with them in this. This would make it impossible.

The gentleman from Georgia kind of made clear his general position when he began by denouncing the part of this bill that deals with bankruptcy. Now, of course, this amendment, as he's offered it, doesn't deal with bankruptcy. That's why I'm here instead of my colleague from Michigan. But the purpose is clear. His view is that there should not be a Federal program to try to diminish mortgage foreclosures.

Here is the point. Diminution of mortgage foreclosures currently has a compassionate aspect. Not surprisingly, that has less appeal in some parts of this House than others. But there is also an enlightened self- interest to it. Irresponsible subprime mortgage lending and borrowing and underwriting and securitizing a whole lot of guilty parties was the biggest single cause of the financial crisis we are in. The continued cascade of foreclosures and consequent deterioration of asset prices is the major reason why we have continued economic deterioration.

There is broad agreement that until we begin to stem the tide of foreclosures--we can't stop it all, and we're not trying to stop it all; not everybody who's being foreclosed upon can be helped or should be helped--but until we do a great deal to reduce this, you will not get an end to the current crisis.

So this is a direct shot. Now, I know I do not attribute this to the gentleman from Georgia, but there is, for instance, a noted commentator on public affairs, Mr. Limbaugh, who has a certain number of fans on that side--and if they aren't fans, they're afraid to say so. He has asked that the President fail. Well, the effect of this amendment would be giving Mr. Limbaugh his wish because if you cripple the effort to reduce mortgage foreclosure, you cripple the effort to get out of the economic slump we are in.

So I understand what some people would like to see happen. They do not want President Obama and a Democratic Congress to get any credit for helping to reduce our economic situation. I understand that, but they're taking a lot of innocent people hostage. They have a right to be very partisan and go after us. But don't do it at the expense of an awful lot of Americans who would lose their homes and of an economic situation that is deteriorating.

So I reiterate that defeating this motion and passing this bill will be an important step towards, among other things, reducing those FDIC assessments--and we have the word of Sheila Bair--and it will be a responsible way

of trying to reduce mortgage foreclosure. It's to the benefit of the individual, to the benefit of the communities that are suffering from this, it's to the benefit of other homeowners whose property values have deteriorated by foreclosure; and at last, I must concede to my Republican friends, it might help the President in his effort to improve the economy. I apologize for that, but I hope you can put up with it.

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

Mr. Chairman, this bill is a joint product of two committees: the Committee on the Judiciary and the Committee on Financial Services. I very much appreciate the fully cooperative relationship that the gentleman from Michigan and I and the members of the committee staffs have had. Working with him has been a pleasure as he has taken the lead in the more controversial parts of this bill. I say controversial not in denigration but in support.

I think the bankruptcy provisions--which are the product of the Judiciary Committee, not the committee I chair--are essential. I was particularly struck--and I will enter into the Record letters from the National Council of Life Insurers specifically approving the bankruptcy provision, and from the National Association of Realtors also approving the bill.

Obviously, there are people entitled to a variety of opinions, but I think it's relevant to note that two important groups, one involved in housing--the Realtors--and another very, very much involved in finance--the Life Insurance Council--support the bill including the bankruptcy provision.

There is another reason why bankruptcy is relevant to some of the things in the jurisdiction of our committee. Even where there are people willing to modify mortgages, there are some legal tangles. We have this form of a servicer. A servicer is an entity which has been given control or authority over packages of mortgage securities. Even in cases where the servicer has been willing, in some cases, to do a modification, that entity is facing lawsuits from investors who say you can't do it.

There are also second mortgages, that is, even in cases where there are a lot of willing parties to this on both the lender and the borrower's side, the fact that there is such a tangle of legal rights has been an obstacle. Bankruptcy is the only way to cut through that. And given the moderate way in which bankruptcy has been put into this bill, that adds to--let me put it this way, people are saying let's have voluntary modification. But some modifications that are supported by almost everybody cannot go forward because of this.

Beyond that, this bill has some things that are widely supported. For instance, the increase in the insurance deposit limits is supported by the community banks and the National Federation of Independent Business and almost every other group. It does provide to the servicers to whom I just alluded a protection that was a bipartisan production of the gentleman from Delaware (Mr. Castle) and the gentleman from Pennsylvania (Mr. Kanjorski) to say that if you as the servicer modify a loan that you hold on behalf of an investor in ways that will minimize the loss to the investor, you could not be successfully sued because you will have carried out your obligation. It authorizes the payment of a fee of up to a thousand dollars to servicers for modifications because this is a job that many of them did not expect.

It also improves the HOPE for Homeowners program which, when we passed it in July, had some hopes and they weren't realized; and I will acknowledge that we didn't do that well. We were at the time responding to pressures that said don't be too generous. As a result, particularly after the Senate got through with it, it became unworkable.

The impetus for change came in part from the Bush administration. The FHA, under the Bush administration, Secretary Preston and Commissioner Montgomery, said you've made this unworkable. So we have amendments that would make it workable. And what we hope coming together is this: no one ought to be encouraged to go bankrupt or think bankruptcy is an easy path. We do prefer voluntary modifications.

What we have is a package, along with the very good proposals enunciated last week by the President, worked on by Secretary Geithner and Secretary Donovan, who did an excellent job on it, we have a menu of ways using all the powers of the Federal Government, including authority, by the way, that we first gave the administration, the Bush administration, in the TARP bill, which they sadly refused to use. But this administration is using authorities that were given to the Bush administration through Fannie Mae and Freddie Mac, through the TARP, through other ways, through the FDIC and other bank regulators. This enhances the authority to do modifications.

So the result--and this is why it's a package. We strengthen the community banks, in particular, with this increase in the deposit insurance; we provide a set of options other than bankruptcy to modify; and we remove legal obstacles, to the extent we can constitutionally do so, to such voluntary modifications. But we then believe that in some cases, you will still need to go to bankruptcy to deal with these tangles that I mentioned, and we also believe that the fact that there is a bankruptcy looming will be an encouragement to negotiations.

On both the lender's and the borrower's side, we've heard complaints that they have tried to communicate with the other. Some people say, ``I wrote to my lender. He didn't answer.'' Some lenders say, ``I wrote to the borrower. She didn't respond.''

One of the things that the Judiciary Committee did very well--and I think they did an excellent drafting job on this bill--is to say that if you want to go bankrupt, you have to notify your lender and then there is a waiting period.

So this will promote exactly the kind of communication between lenders and borrowers that we hoped would go forward.

National Association of Realtors,

Washington, DC, February 24, 2009.

Dear Representative: When people lose homes to foreclosure,

our communities, the housing market and our economy all

suffer. The National Association of REALTORS'

believes H.R. 1106, the ``Helping Families Save Their Homes

Act,'' includes provisions to minimize foreclosures,

stabilize home values and move the country closer to an

economic recovery.

The bill provides a safe harbor for mortgage servicers who

conduct loan modifications in good faith. Currently few loan

modifications are occurring because servicers face the threat

of investor lawsuits. This provision will relieve servicers

from liability, and allow more loans to be modified.

The bill also reforms the Hope for Homeowners program,

allowing more borrowers to refinance into safe, affordable

mortgages. Despite being well-intentioned, the Hope for

Homeowners program has enjoyed very limited success. The

program's constraints have made it very difficult for lenders

and servicers to participate. H.R. 1106 eases current

restrictions and makes the program more useable, while still

preserving the benefits to homeowners and limiting risks to

the FHA fund and the American taxpayer.

The bill strengthens oversight of FHA-approved lenders. FHA

is experiencing unprecedented volume during this mortgage

liquidity crisis. More and more lenders want to become

involved with FHA. To ensure that predatory lenders are

unable to participate, the bill provides a number of

safeguards to protect the FHA fund and taxpayers from fraud

and abuse.

As progress continues on the bankruptcy provisions within

this bill, NAR would support reasonable and equitable

requirements for judicial review of loan terms for homeowners

who are forced into bankruptcy because they are unable to

qualify for or obtain foreclosure prevention assistance.

The National Association of REALTORS' believes

H.R. 1106 will help millions of homeowners who are at risk of

losing their homes. It will also help neighborhoods avoid the

ramifications of foreclosures and will help our economy on

the road to recovery. We ask you to support this important

bill.

Sincerely,

Charles McMillan,

2009 President.

I yield 1\1/2\ minutes to the gentleman from Oregon (Mr. Blumenauer).

I will yield myself such time as I may consume because the gentleman from California wants to talk about the history and who pressured people into doing this.

Yes, it's true, there is a governmental role here: it is a refusal to regulate subprime loans. In 1994--and party is relevant--the last time before the previous Congress that the Democrats were in the majority, this Congress passed a law directing the Federal Reserve to regulate home loans in the subprime category that were issued by everybody. Bank loans were regulated, nonbanks were not. Alan Greenspan, the Chairman of the Federal Reserve, refused to use the authority and acknowledged in testimony before the Committee on Government Reform late last year that he had refused to use it and that he was mistaken.

So, part of the problem was, yes, there was a lowering of standards because the Federal Reserve refused to impose them. And then, let me quote Mark Zandi, who had been an adviser to John McCain, is now an economist of great repute--he was then, too, obviously--who notes in his book on this crisis that in 2004, the Bush administration decided, as part of its strategy of expanding homeownership, to push for an increase here, including, in 2004, the Bush administration ordered Fannie Mae and Freddie Mac to increase the number of loans they gave to people below the median income. And I will put into the Record my quotation at the time from an article put out by Bloomberg in which I objected to that. Secretary Jackson made them increase by 10 percent the number of loans they had to give to people below the median. And I said I thought that would be bad for Fannie and Freddie and bad for the borrowers because helping people borrow money they can't repay does them no good. And there was then an effort to try to get legislation passed to do what the Federal Reserve refused to do under Mr. Greenspan, regulate subprime loans. But the Republican leadership of the House at the time said we don't want to do this.

There was also concern about Fannie Mae and Freddie Mac. And in 2005, I, as the ranking minority member of the Committee on Financial Services, joined the chairman, a former colleague, Mr. Oxley, in supporting a bill out of our committee to tighten the regulation of Fannie Mae and Freddie Mac. I later was opposed to what was done in the Rules Committee to weaken a housing provision, but I wanted the bill to go forward. And, in fact, that bill went to the Senate with a large majority. I opposed it on the housing ground, but I was for the regulatory part. The Bush administration rejected it. Then Secretary of the

Treasury Snow said he thought the President was wrong. Mr. Oxley said he was very disappointed that the administration wouldn't go forward.

In any case, the Republican-controlled Senate refused to take the bill up. So from 1995 until 2006, under Republican control of the Congress, no bill was passed to regulate Fannie Mae and Freddie Mac better, and nothing was done to restrain inappropriate subprime mortgages.

In 2007, the Democrats returned to the majority. Within 4 months, the Committee on Financial Services had reported on exactly the bill that the Bush administration wanted under Secretary Paulson to tight the regulation of Fannie Mae and Freddie Mac. There was an organization called FM Watch that existed to try to tighten regulation of Fannie Mae and Freddie Mac, and they have been quoted as saying, after the House acted, ``Well, we finally got what we wanted.'' That was in 2007.

So, yes, I regret the fact that in 2005 there was an intra-Republican split between Mr. Oxley and the President, with the Secretary of Treasury on Mr. Oxley's side and Senator Shelby on the President's side, and we got no bill. We got it through the House in 2007. It was then delayed in the Senate, unfortunately. In 2008, I asked the Secretary of the Treasury to put it into the stimulus, the tough regulation of Fannie Mae and Freddie Mac. He couldn't do that at the time. We got it, but we got it too late. But we got it too late because 12 years of Republican rule went by and no bill became law.

Then we had subprime. When we were unable to pass a subprime bill in 2005 because the Republican leadership said no, we, in 2007, brought out a subprime bill. It passed this House. It was a bill to restrict inappropriate subprime loans. It was attacked by the Wall Street Journal--I'll put the editorial in there--it said it was ``Sarbanes- Oxley for housing,'' that we would be depriving people of the chance to buy homes--yeah, people who shouldn't have had that chance. Once again, that was held up in the Senate. But to his credit, Chairman Bernanke, a Bush appointee, used precisely the authority that Alan Greenspan refused to use from 1994, from that statute, and imposed strict restrictions on bad subprime loans.

I think we will go further. And I expect the Committee on Financial Services once again to bring out the bill to restrict inappropriate subprime loans. And I will look for that energy that I've heard from time to time expressed by some of my Republican colleagues about keeping people from being put into homes they shouldn't have. Because last time it was a more partisan fight than it should have been, although the ranking member, who has a very good history of being concerned about this, did join us in voting for the bill.

The only other thing I would say is this--and I would agree that voluntary modification is a good thing. But with the servicer-investor conundrum and with second mortgages, even almost entirely voluntary agreements to modify cannot go forward without bankruptcy.

Fannie, Freddie To Suffer Under New Rule, Frank Says

(By James Tyson)

June 17 (Bloomberg)--Fannie Mae and Freddie Mac would

suffer financially under a Bush administration requirement

that they channel more mortgage financing to people with low

incomes, said the senior Democrat on a congressional panel

that sets regulations for the companies.

The new rule compels the companies to put 57 percent of

their mortgage financing by 2008 toward homes for people with

incomes no greater than area median income. Fannie Mae and

Freddie, the two largest U.S. mortgage finance companies,

must currently meet a 50 percent threshold.

The White House ``could do some harm if you don't refine

the goals,'' said Representative Barney Frank, a member from

Massachusetts on the House Financial Services Committee.

Frank's comments echo concerns of executives at the

government-chartered companies that the new goals will

undermine profits and put new homeowners into dwellings they

can't afford. ``At their outer edges they become

counterproductive--there are not loans to make that will get

repaid,'' Freddie Mac Chief Executive Richard Syron said

Monday in an interview, referring to the new financing rule.

Frank said the administration is aiming to reduce the role

of the two companies in mortgage financing, and has seized on

the higher goals ``as a useful stick by which to beat Fannie

arid Freddie.''

HUD Defends Rule

Alphonso Jackson, secretary of Housing and Urban

Development, said the Bush administration has no hidden

motives in seeking to raise the percentage of financing for

low-income homeowners.

``There is no administration more supportive of Fannie and

Freddie than we are,'' Jackson said today in interview. ``We

are just actualizing what should have been done years ago.''

An agency within HUD, the Office of Federal Housing

Enterprise Oversight, regulates Fannie Mae and Freddie Mac,

which own or guarantee about half the $7.3 trillion U.S.

mortgage market.

The housing guidelines, subject to a public comment period

that ends on July 2, would become law Jan. 1. Referring to

both the White House plans and the coming presidential

election, Frank said, ``nothing can stop them except a change

in November.'' He spoke at a news conference sponsored by the

presidential campaign of Senator John Kerry of Massachusetts.

Frank and housing industry representatives such as Jerry

Howard, chief executive of the National Association of

Homebuilders, say the White House rules fail to focus

financing on multifamily housing and other market segments.

The regulations also don't address a decline in refinancing

and other market changes, they said.

``We don't see how these goals in any way put Fannie Mae

and Freddie Mac into specific types of affordable housing,''

Howard said.

The association, which represents Centex Corp., Toll

Brothers Inc. and about 215,000 other companies in the

housing industry, plans to ask for a 60-day extension of the

public comment period, Howard said.

Referring to the housing goals and the two companies, Frank

said, we want to push them further, but it doesn't make sense

to push them in an undifferentiated way.''

Jackson said his critics should withhold judgment until

after Jan. 1. ``I don't see how people can say something is

not going to work when we have not had a chance to implement

it.''

Mr. Chairman, I will now yield 1 minute to the gentleman from Pennsylvania (Mr. Kanjorski).

Mr. Chairman, in the absence of any correction, I have only one speaker left; so I will reserve the balance of my time.

Mr. Chairman, I yield myself 10 seconds.

The gentleman from Georgia asked about what other contracts. This is precisely the bill to make this like other contracts. Everything else can be declared void in bankruptcy. So the gentleman has it absolutely backwards. This doesn't create an exception to general contract law. It amends one and makes this on the same footing as, quoting the gentleman, all other contracts.

Mr. Chairman, I yield the balance of my time to one of the leaders in the effort to preserve homeownership for deserving people in America and the fight against abuses, the gentlewoman from California (Ms. Waters).

Mr. Chairman, I move that the Committee do now rise.

Madam Speaker, while I very much enjoyed attending the Democratic Retreat and found it very valuable, it did have one downside for me: It meant that I had to miss the ceremony held at the Public Library in New Bedford on Saturday, February 7th, recognizing Lee V. Charlton for the great work he has performed on behalf of equality for all in Southeastern Massachusetts, and indeed for all that he has done in a wide variety of ways to improve the quality of life in the Greater New Bedford area.

In recognition of his leadership role, including his longtime presidency of the New Bedford branch of the NAACP, his work in the YMCA, his efforts on behalf of United Front Housing, the leadership he has shown in our community action agency, People Acting in Community Endeavors, and many other areas, he was presented with the Martin Luther King Jr. Distinguished Service Award by Bridgewater State College at this year's Martin Luther King Breakfast. I very much regret the fact that the Inauguration of our new President also kept me from attending that event, because I would very much have liked to have been there to pay a very well-deserved tribute to Lee Charlton. As a Member of Congress representing New Bedford since 1993, I have benefitted enormously from Lee Charlton's commitment, wisdom and thoughtful approach to public policy.

Madam Speaker, as a dedicated public servant, serving as plant engineer at New Bedford High School and the Greater New Bedford Regional Vocational Technical High School, and as a citizen activist, Lee Charlton has been a source of strength on whom others have relied.

It is entirely fitting that he was given the Martin Luther King Award, and that the people of his home city of New Bedford honored him on February 7th. Lee Charlton is an example of the kind of citizenship we should be promoting and I ask that the information about Mr. Charlton and the award he won be printed here.

The Martin Luther King Jr. Distinguished Service Award

Mr. Lee V. Charlton

Mr. Charlton has been president of the New Bedford branch

of the National Association for the Advancement of Colored

People (NAACP) since 1983, He has also held office on the

regional level, representing 20 NAACP branches in

Massachusetts, New Hampshire, Maine, Rhode Island and

Vermont.

His affiliations are numerous as he has served on boards of

directors for the Greater New Bedford YMCA, the Salvation

Army of New Bedford, United Front Housing, South Shore

Minority Business Circle, People Acting in Community

Endeavors, New Bedford Historical Society, South Center

Community Development Corp. and New Bedford Economic

Development Council, among many others.

Prior to his retirement, he was plant engineer at both New

Bedford High School and later at Greater New Bedford Regional

Vocational Technical High School. Previously, he was employed

with IBM and at the Job Corps Center of New Bedford. He

served for eight years in the United States Air Force in

civil engineering in the field of steam engineering, HVAC and

plumbing.

He has earned numerous professional and community awards in

recognition and appreciation of his service and

contributions, especially in the arena of social justice.

A native of West Virginia, he is the husband of Francisca

(Britto) Charlton. They have two children, Kenneth L.

Charlton, and Karen L. Charlton, and a great-grandchild, Lee

V. Charlton II. Mr. Charlton is a graduate of Huntington High

School in Huntington, WVa, the Steam Engineering/Utilitiesman

School of the United States Air Force and the United States

Navy in Oxnard, CA; Customer Engineering School at IBM in

Boston; and the Refrigeration/Air Conditioning Services

Engineers in Boston.

Madam Speaker, I rise today to recognize the 75th anniversary of the United States Export-Import Bank, chartered by Congress in 1934 with the mission of financing U.S. exports in support of U.S. jobs. The Ex-Im Bank has been an important tool in our effort to preserve and expand American jobs in an era of international competition. In an ideal world, there wouldn't be an Ex-Im Bank. But given the fact that other countries aggressively provide public financing to make their exports more competitive, it would amount to unilateral disarmament not to have a strong and active U.S. Export- Import Bank.

Ex-Im Bank has played an important role in trade finance as a lender of last resort, allowing exports to go forward for projects that would otherwise not get support from private lenders. In support of this mission in recent years, the Bank has launched efforts to support small business exporters, women and minority-owned exporters, and exports in support of development projects in Sub-Saharan Africa.

In the midst of the credit and economic crisis we are now working so hard to resolve, it's particularly important that we have the Ex-Im Bank in place. With consumers in the U.S. pulling back, exports will need to play a leading role in economic recovery. Unfortunately, as in all other areas of private credit, trade financing coming from the private sector has fallen, and as a result, otherwise viable U.S. exports are not able to proceed due to the lack of credit. Ex-Im Bank can and should step in to address this financing gap, just as it did at the time of its Depression-era founding, during the Mexican debt crisis of the early 1980s, and during the Asian crisis of the 1990s. I look forward to working with the Bank to ensure that exporters are adequately financed during this current crisis.

Ex-Im Bank has been able to serve its public mission during times of crisis and in support of underserved areas of trade finance while remaining a good steward of taxpayers' dollars. In its 75 years, the Bank has financed over $400 billion in U.S. exports with a loss rate of under 2 percent. This is a track record that should be noted and I am pleased to do so today.

Madam Speaker, pursuant to clause 2 of rule XI of the Rules of the House of Representatives, the Committee on Financial Services in open session on January 27, 2009, adopted the following rules by voice vote, a quorum being present:

Madam Speaker, on Sunday, January 18th, the Foxborough, Massachusetts High School Jazz Ensemble was given the great--and fully deserved--honor of playing at the Kennedy Center as part of the event that was entitled ``Swing Into Freedom.'' The ensemble accompanied Wynton Marsalis and I am very proud that high school students in the district I am privileged to represent were selected for this important part of the Inauguration festivities and performed in a manner that fully justified the invitation to them.

Madam Speaker, I want to congratulate the members of the Foxborough High School Jazz Ensemble and also those planning this program who had the foresight to include this excellent group of young musicians in this important set of events in the nation's history.

Mr. Speaker, pursuant to section 2 of House Resolution 62 and as the designee of the majority leader, I have a motion at the desk.

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

I will be discussing the substance of this later, but I want to explain what is a somewhat complicated legal and parliamentary situation. First, I do want to note that it is a refutation of the skeptics that this process is going forward.

In September, we were asked by the Bush administration's top economic appointees to pass a bill giving them the authority to deploy $700 billion to repair the credit markets, without any hindrance. I agreed with them that action had to be taken, and, in fact, even if you did not think the action was necessary, when at a time of economic trouble the two chief economic advisers to the President of the United States tell us that if you don't do something there will be problems, there are going to be problems. I don't think they self-created this. I don't think it was a self-fulfilling prophecy. But it was a self-reinforcing one. So we felt we had to act.

But we were able in the negotiations to get one major concession, namely, to say that we would vote the ultimate authority for $700 billion but that after the first $350 billion had been deployed, and I don't want to say ``spent'' because most of it has been lent or invested in ways that it will come back, but we said that at that point if the administration wanted to spend the second 350, and I just misspoke when I said ``spent''--deploy it--they would have to notify Congress. Fifteen days would then be a waiting period during which the money was not available and during which time Congress would get to vote on resolutions to cancel the program. And to reassure Members that they would have a chance for those votes, procedures were drafted by the appropriate Rules Committees in both branches so that neither the House Rules Committee nor the Senate-extended debate could have interfered with this.

Now, we did have one drafting error because for this to work, it would have had to have been passed by both Houses and either signed by the President or have a veto overridden.

The two Chambers that drafted this, the leadership, the rules groups, did a very good job of protecting Members to make sure the bills could come to the floor. That's why we're here. But they did them in isolation. So there's a certain futility to what we are doing today because the Senate has already defeated the Senate version of this; so no matter what happens in the House today, the program goes forward.

People should understand President Bush, at the request of President Obama, asked for the second $350 billion a week ago Monday. That means, I believe, next Tuesday this will be available to the Obama administration because the Senate voted down the resolution of disapproval. The House will still vote, and there will be some indication of what Members think about going forward, but it will not have binding effect. And I think that was a drafting error. It should have been that if one House defeated it, it didn't come up in the other House. But here we are.

There is one other distinction to be drawn. Yesterday, the House passed a bill by a fairly large vote that said that if the second $350 billion is deployed, it should be done with the following conditions: significant money for foreclosure relief; restrictions on the money being used for acquisitions by a receiving bank of another bank; a requirement that there would be an agreement in which banks would specify what they were going to do with the money before they got it; greater restrictions on compensation; a request that the administration do some things to come to the relief of cities, other entities, small businesses; a requirement that this funding be distributed in a way that was equitable to smaller banks. We voted on that yesterday.

Now, my Republican colleagues in particular had a dilemma there. A number of the things that we had in the bill yesterday are popular and indeed many of them agree with. They, I think, were reluctant to have to vote on this because on the other side, you had some of the leading conservative journals of opinion, the Wall Street Journal editorialist, a major paper from the Heritage Foundation, denouncing the notion of helping reduce foreclosures, criticizing the effort to put in community banks. And so my Republican colleagues offered a recommittal motion yesterday which would have, if it had succeeded, in essence wiped out the conditions we are seeking to impose and made yesterday's

vote simply on whether or not to repeal the 350. The problem with that is that they did it in a way that really meant to avoid taking a stand on these conditions.

Now, the recommittal motion was defeated. And my conviction that the recommittal motion had, as one of its goals, avoiding a vote on whether or not to be for foreclosure relief and community banks is reinforcement of the fact that unusually in a bill that many of them had criticized, when the voice vote was called in favor, they did not ask for a roll call. We had a roll call yesterday because I asked for one because I wanted to have a large majority of Members on record so that when we talk to the Obama administration, we have a large majority of Members saying do foreclosure relief, lend to community banks, go to the aid of municipalities. The Republicans wanted to avoid that vote. They didn't want to take it because they didn't want to choose between foreclosure and the Wall Street Journal or foreclosure mitigation and the Heritage Foundation.

That's why they offered the recommit. I say that for this reason. There were people who voted against the recommittal motion yesterday because they did not want to dilute the impact of our insistence that this be used for foreclosure relief, for aid for smaller banks and for other important purposes, and that there be a restriction on the ability of banks to take the money and then do whatever they wanted with it.

That recommittal motion was defeated, so the House did go on record by a large majority in favor of those conditions, and that will be very important as we make the Obama administration understand that. Today is a separate vote. Today we have a vote in which Members will express their opinion on whether or not the $350 billion should go forward. It is simply an expression of opinion. It's kind of a big public opinion poll for the House, because the Senate has already defeated the bill.

But they are two separate issues. The vote on yesterday's recommittal motion was, in my judgment, a rejection of an effort to keep the House from speaking out strongly on the question of foreclosure relief and smaller banks. We have now spoken, as the House of Representatives, by a significant majority and said to this administration, since this is going forward now that the Senate has voted against a disapproval motion, here is what we want. Today Members simply express their opinion on whether or not they want to disapprove it.

I will close by saying for me, the argument that because the Bush administration misused this means that the Obama administration should not be given the chance to do it better, proves too much. If I believed that every instrumentality of government misused by the Bush administration should be denied to the Obama administration, we would have a lot of empty, vacant office space in Washington. We could rent out the Justice Department, the State Department, EPA, HUD and a number of other agencies, because I believe that they misused many of them.

TARP has no independent will. It is a set of policy choices. George Bush used them, in my judgment unwisely, although I think we were better off having even that than nothing, but that has zero to do with whether or not the Obama administration ought to have the right to do it going forward.

I reserve the balance of my time.

Well, I yield myself 30 seconds to say I agree with the gentlewoman that this was appropriate to restrain the Bush administration. My objection is visiting the sins of the Bush administration, or the errors, on the Obama administration.

I now yield 1 minute to the gentleman from Maryland, the majority leader.

If the gentleman would yield, the question that the majority leader asked was, if you take the position that unless we know the Senate is going to do something, we shouldn't do it, then we wouldn't be debating this.

Now, I agree with him, it's important for us to have a chance to express our opinion. In this case, though, unlike yesterday, we passed a bill yesterday that is still pending in the Senate and, if events change, could be brought up. Under the procedures, this bill is dead. It cannot be reconsidered because the Senate killed it.

The gentlewoman points out that it is the law we passed last year that allows us to do it, but it permits us to do it. It doesn't mandate it. What we are trying to do is say to the gentlewoman we agree that it's reasonable to have this on the floor, but the logic that says we shouldn't have acted yesterday because the Senate said they're not going to do it would apply with even greater force when you're talking about doing something the Senate has already killed.

I would just say this. I certainly want them to take it up. Realistically, I don't think they will, unless the Obama administration fails to live up to the things in the bill. I believe that if the Obama administration surprises me, because I don't expect this, it doesn't go ahead with foreclosure diminution, it doesn't lend to community banks, it doesn't do better restrictions on compensation, then you will see pressure in the Senate to take it up.

So there is one difference with regard to Senate action between the resolution the gentlewoman offers, as authorized, although not mandated by the bill, and where we are today. The bill we passed yesterday is pending in the Senate. They don't now intend to take it up. But, if things change, pressure would build to do it.

The resolution we will be voting on today is already dead, the Senate has already killed it, and it does not allow for reconsideration. In both cases, I think it's reasonable for us to go forward. But to argue that it makes sense for us to pass a bill the Senate has already killed but not to pass a bill that will be pending in the Senate, subject to pressure, baffles me.

I yield myself 3 minutes.

First, I want to respond to the gentlewoman from North Carolina's estimate of the Senate parliamentary situation. She is wrong. If this resolution passes, it will not be pending in the Senate. The Senate will always have the right to bring up a new and different bill to repeal the $350 billion. But this resolution is dead, not on arrival, but before arrival. And the difference is this:

This resolution comes to the House floor, as its counterpart came to the Senate floor, under expedited procedures; that is, the filibuster extended debate was not available. The Rules Committee was not available to stop this. The Senate, having defeated the one resolution that they were allowed under expedited procedures, cannot revive it. In fact, it said in the bill as a protection, frankly, for those who are likely to be opposed to the TARP, that it couldn't be reconsidered; that is, it was a protection against pressures being applied by a combination of leaderships on either or both sides and the administration. So this bill is dead. The Senate killed it. This is an exercise.

It is true that the Senate could start all over again with a new bill subject to extended debate, et cetera; and that, of course, nobody could take away from them. But to be very specific, this resolution's counterpart cannot come up in the Senate under the rules, and the Senate Parliamentarian has so ruled, appropriately, if you read the legislation.

So what is available now here is exactly what we have with the bill we passed yesterday, if the Senate wants to take it up under nonexpedited procedures. And when it comes to nonexpedited procedures, the United States Senate has no equal. Nobody can nonexpedite procedures like the Senate. So both of these bills could come up in the Senate under those rules.

Now, the other thing I would say is this, and to the gentleman from California, yeah, there is a philosophical difference here. I do think the gentleman from California was a little harsh in his criticism of the Bush administration in denouncing this, because this is, after all, the Bush administration's creation.

We also have, by the way, and let me address this, under the appointees of President Bush at the Federal Reserve a massive expansion of authority that was granted during the Depression and has rarely been used since for the Federal Reserve to make loans. And I want to be clear, Mr. Speaker, to people that much of what they have read about, for instance, the intervention with AIG primarily and some others, did not come under the TARP primarily; they came from the Federal Reserve using a statutory power from the thirties. It had not been used very much. The Federal Reserve used it somewhat earlier in 2008, and then in September of 2008 began to use it in large numbers. People are understandably concerned about this and what is being done. The Financial Services Committee will be having a hearing within a couple of weeks in which we will begin examining what the Federal Reserve is doing.

I yield myself an additional 1 minute.

I do want to make clear the policies that the gentleman from California describes as failed and as doomed are George Bush's. Now you may think that Obama will do no better. But I do want to be clear. It was the Bush administration officials that asked us to do this. We did modify it some.

The only other point I would make is this about oversight. We did write

oversight into the bill. The gentlewoman says, well, oversight was after the fact. But oversight is always after the fact. The oversight function is to see what has been done and report on it. That is what the Oversight Committee does.

In this case, we put in good oversight. The Government Accountability Office reported early on that they weren't monitoring how the loan money was being spent. And we had a hearing to talk about that. And then the Elizabeth Warren panel talked about it. So our decision to tell the Bush administration to stop and not even ask for the $350 billion until we got a new shot at it came based on information we got from the oversight panels that we put into the bill.

I reserve the balance of my time.

Will the gentlewoman yield on my time?

On my time.

I yield myself 30 seconds.

Will the gentlewoman let me yield 30 seconds?

I will yield myself 30 seconds to point out that the gentlewoman from North Carolina was incorrect. She said this bill would be alive in the Senate. That is wrong. This bill is the expedited procedures proposal. Its Senate counterpart has been killed. If this bill passes or fails, it makes no difference. Now it is true, the Senate has the right under the Constitution to pass a brand new bill. But if it did, it would have to come over here to be passed. This expedited procedure resolution would not meet the bicameral test. So the point is that when she talks about this bill, it has no effect. If the Senate passes a bill, as they would have a right to do under the normal rules subject to filibuster, it would then come over here and be subject to normal rules----

I yield myself 15 seconds to say to the gentlewoman, just as she wouldn't yield to me, I will now yield to the gentlewoman from Illinois. The gentlewoman from Illinois is recognized for 2 minutes.

I yield the gentlewoman 1 additional minute.

Mr. Speaker, how much time remains on each side?

Mr. Speaker, I now yield 3 minutes to the gentlelady from Texas (Ms. Jackson-Lee).

(Ms. JACKSON-LEE of Texas asked and was given permission to revise and extend her remarks.)

I yield the gentlewoman 1 additional minute.

I yield 3 minutes to the gentleman from Georgia (Mr. Scott).

Mr. Speaker, I yield 3 minutes to the gentleman from Oregon (Mr. Blumenauer).

Mr. Speaker, I yield myself 2 minutes to respond, in part.

One, I got more credit than I deserve for writing the legislation; we had the Senate participating. I did succeed in getting some constraints written in. The problem, however, was not with the legislation, it was the way in which it was administered.

By the way, I do want to make one point. There were complaints yesterday--and I have heard complaints from the Republicans--that they had no chance for input into this legislation. That is, of course, patently untrue. If Members will remember, a large number of Republicans voted against this Bush request the first time. A number switched, still less than a majority, but a large number of Republicans switched because they achieved a major amendment.

The fact is that there was added to the President's proposal a plan for an insurance operation which was written by the Republican leadership and put into the bill at the request of the Republicans. Now, the problem was that the Secretary of the Treasury under George Bush thought it was silly and had no intention of using it. And I think the Republicans knew that, and maybe there was a little self-delusion there, but the fact is that there was a major amendment of that bill entirely generated in the Republican Party. They had a chance to put other things in there.

Now, I will concede I was disappointed. The gentleman said we wrote the bill. I tell you what I take some pride in; we wrote in there specific instructions to them to use some of the money to reduce foreclosure. They refused to use it. And under the American system of government, it is virtually impossible to force an executive branch to carry out the legal authority they are given, just as Alan Greenspan refused years ago, until fairly recently, to use the authority Congress had given him to stop bad subprime mortgages.

So, yes, there was that flaw. And if, in fact, we still had the Bush administration, no legislation, in my judgment, would succeed. But given the commitment of the Obama administration--the gentleman said there is no plan. In fact, there are very specific plans, including some from Sheila Bair, the head of the FDIC, and some approved by the outgoing Secretary of HUD, Mr. Preston, to reduce foreclosure.

Now, the gentleman has said leave it to the Fed.

I yield myself an additional minute.

I understand that was the argument I read also arrived at by the Heritage Foundation. The notion that we should leave it to the Federal Reserve to do it and not try to do it here means that any effort by us to put some conditions on there, we should give up. And, in fact, the difference between simply allowing the Federal Reserve to do these things and having this is--and this is a certainty, given the Obama administration's commitment--we will get, under this $350 billion, a substantial amount of money for diminishing foreclosures. There are Members who don't think we should try to do that, I understand that philosophical difference, but it's a factual difference. Under the Federal Reserve authority, which we have to examine, nothing is done to deal with foreclosures. This specific instruction here is to use a substantial part of the money--$100 billion, we hope, of the $350--for foreclosure diminution that will not happen if the $350 billion is not released.

Speaking of foreclosure, there are two Members of this House who have done the most to keep before us the need to diminish foreclosures, one of them is the gentlewoman from Ohio (Ms. Kaptur). I yield the gentlewoman 4 minutes.

Mr. Speaker, I think I may be my final speaker, so I will reserve the balance of my time.

Mr. Speaker, I yield myself 2 minutes to respond to the very disappointing remarks from the gentlewoman from Illinois.

In fact, we have had several oversight hearings on this issue. We called Mr. Kashkari before us when the Government Accountability Office reported that they had not done the lending. The gentlewoman talked about Mr. Kashkari. We had a hearing last fall on specifically that subject. We had Mr. Paulson before us on the question of oversight. We have had Ms. Warren. So we have had a number of oversight hearings.

The gentlewoman then specifically, I believe, may have forgotten something. She said that we haven't yet had a hearing with the executives. She knows that it's scheduled. I am disappointed that she would do that without referring to the fact that it's scheduled. And, in fact, it would have been this week. We decided after the election that we would do this in the new Congress. That's what I was asked for by the ranking member: Let's do this in the new Congress.

We had a hearing set when it was pointed out to us by the chief executives that they were in a quiet period under SEC rules because they were about to report profits, and they pointed out that if we were to ask them publicly some of these questions, they would be in conflict with SEC rules. So we postponed the hearing and set a date. So we were asked by the minority to have this hearing with the executives, and we had several other oversight hearings. Maybe the gentlewoman couldn't make them. Maybe she forgot we had them. But we had several oversight hearings. In fact, what people know about the failures of this program came from the oversight we wrote into the bill and the hearings we then had with the overseers.

Then we were asked, let's in the new Congress schedule a hearing with the chief executives. We said yes. We had it scheduled when it was called to our attention that there would be a conflict with SEC rules; so we postponed it.

And I'm glad to be able to give a fuller picture of what has happened here than the gentlewoman from Illinois unfortunately gave.

I would yield myself 30 seconds to say that the decision that triggered TARP came from the Bush administration at the request of the Obama administration. So that was simply not something within our control.

And I would point out the gentlewoman had said that we hadn't had the oversight hearings, that we've had them. It's true. The Bush administration in those hearings didn't give us the answers we wanted. But oversight doesn't mean you can make people say things they don't want to say. You can expose their failure to say them and act accordingly.

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

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

I am sure, to the approbation of Members, I am prepared to announce that I am our last speaker. So I will withhold, and when the other side is through, we can get out of here.

How much time do I have remaining?

I yield myself the balance of my time.

Mr. Speaker, first, I want to address this basic issue again about what the Senate is likely to do. Technically, there is no likelihood that this bill will be taken up in the Senate because it is the expedited procedure of resolution that has been killed in the Senate.

The Senate could pass a bill rescinding the TARP. Having voted by 52- 42 not to pass the disapproval resolution, it seems unlikely that 42 will become 60 in the near term, but there is that possibility.

But I would say this to the gentlewoman. When she said that both bills, the one we passed yesterday and this one, are as likely to be taken up, in some sense, that is true. But that makes our point. I didn't say don't do the bill yesterday. When I talked about this bill being already killed in the Senate, I wasn't saying don't do it. I welcome this debate. I was refuting the arguments from my Republican colleagues that yesterday was a waste of time. I agree that it is a good thing for us to give our views today and yesterday.

I did notice in today's Washington Post that they note that the passage by a large majority in the House yesterday, we got a larger majority for this bill than the partisan breakdown. It was largely a partisan vote, but not entirely. And more Republicans supported the bill than Democrats opposed it, I think because of the power of the desire to help minimize foreclosure and get money to community banks. But my argument, she's now embracing. The fact that the Senate may or may not be able to pass a bill is no reason for us not to do something.

Now I want to address an important aspect of this, and I am talking now to people in the Obama administration, to the people in the Bush administration, to the people in the financial community. We have in this country, obviously, as you have in any country, a certain degree of stratification along various lines. There are people who are at the top of the ladder in terms of economic power, in terms of influence.

There's an element that would think of themselves as elite opinion. It's not a value term here, but opinion of a fairly small number of people with a great deal of power. Then there is the opinion of the great majority of Americans.

I want to address now the people at the top of the economic ladder, the people in the financial institutions, and I think here I am speaking, to some extent, for almost every Member of this House. There is a dangerous and deeper split between the views of the economic elite on what should be done in the current crisis and those of the average American than I have ever seen.

We heard some Members there say--the gentleman from South Carolina (Mr. Barrett) say, and I appreciated his saying it--that the passage of the TARP last fall helped. The Republican leader said that. I think it did. My criticism is that I don't think it helped nearly as much.

But I have two criticisms. I think it helped avoid something worse. And one of the things we know as elected officials is this. Some of the hardest jobs we do are to prevent bad things from happening, and we can expect to get no credit for it. Disaster averted is nobody's political platform. That helps in economic analysis, but you can't go before your voters with what economists call the counterfactual and explain to them how things would have been worse if you hadn't acted and expect cheers if they're still pretty bad. And that is appropriate. The public should have that high demand to make of us.

But while I and, I think, most people who are at that higher level of the economic ladder, economists, while most of them think it was a good thing that we passed the bill last year and that $350 billion was deployed, the American people overwhelmingly think it wasn't. And that is one of my criticisms of the Bush administration and of Secretary Paulson, a man whom I admire, with whom I am proud to have worked, with whom we accomplished a great deal in the areas of financial regulation and housing, et cetera. But here was the mistake:

By not listening to public concern about the $350 billion, by refusing to follow the congressional mandate to do something about foreclosures, by indulging the arrogance of some of the banks who said, ``We will take that money and we won't tell you what we do,'' they have discredited the notion of intervention of that sort. And I think that is a mistake, because I think we are at a point where some of that intervention is still needed.

Now, there are philosophical views that say the other, but there is a division. And, again, the gentleman from South Carolina (Mr. Barrett) very thoughtfully said, ``We averted a greater disaster by passing this.'' The Republican leader said he is glad he voted for it. I think they are both right, and I think it is important that we acknowledge that.

I have two criticisms to make of the way in which the administration carried it out. One, they didn't do some of the good they could have done. And I do think they made a fundamental macro-economic mistake by not diminishing foreclosure. I believe, until you begin to diminish foreclosure, you not only deny some people some relief, but probably, more importantly, you don't get the country out of the bind that it is in, because the continued rapid deterioration in those assets is at the root of a large part of the problem.

But what we also had was a degree of alienation on the part of the average American who saw banks getting money, in one case apparently using them for an acquisition of a smaller bank that was very important to the community where it existed, in Ohio. We saw bankers saying, ``I got the money. It's none of your business what we do with it.'' We saw bonuses given that shouldn't be given. I am confident that the Obama administration has learned from that. But I go beyond that.

There is in this country today a very sharp divide on a number of issues, not just whether or not you intervene. Here

is the problem with intervention. When you have a financial system that is in such difficulty, I think it is important to try to keep these institutions from collapsing en masse, not that we are at that point, but from not collapsing. But remember, as an institution's assets deteriorate, its capacity legally to lend, if it is a bank, deteriorates. We want to reverse that cycle. Let's not overstate it. But I think we need to intervene in this way. The public says no, because the immediate beneficiary of these interventions are people they don't like, are people who in fact made some mistakes.

Now, it turns out that you can't help the whole economy in some cases without some help--you know, we talk about sort of incidental victims. These are incidental beneficiaries. This is kind of, not casualties, civilian casualties, but civilian beneficiaries. You can't get from here to there without helping some of these people. But it ought to be done in a way that reassures the average American. Part of it has to do, I believe, with the weakness of the social safety net. People who lose their health care because they lose their jobs will react particularly angrily when a financial institution is benefited.

So I make this plea now to the people in the financial institutions, to people at the upper levels of economic decision-making, and they should understand that this Congress representing the people is under enormous pressure to deny them some of the things they think are necessary. By the way, not just here; in trade, in international trade. This is not a Congress that is ready to go forward with that.

We had an amendment yesterday offered by the gentlewoman from North Carolina (Mrs. Myrick) that said none of the recipients of TARP funds can do customer service outsourcing. I believe that most people who are CEOs of corporations, most economists, or many economists, many of the people at the top levels of the administrations, Bush and Obama, and go on back now, probably think that is unwise economic policy, but we didn't have a roll call on it, because that is a totally irresistible impulse here. It may put us in some trouble with the WTO. We will have to deal with that.

People who don't like the Myrick amendment--and I supported it. People who don't like the Myrick amendment had better understand that amendments like that will proliferate until they join us in giving the average American a better sense that he or she will benefit from this prosperity. Now, that is part of where we are today.

Look, the Senate has already killed this resolution. Why are we still voting on it? Because there is a degree of anger in the American public at what they think is a very unfair system that gives benefits, unduly and disproportionately, to some of those who caused the problem, while denying health care and unemployment compensation and decent higher education for working class people.

I mean, Mr. Speaker, to caution the people who are deeply involved in running this financial system in this country, work with us to alleviate this. As long as the average American thinks that a small group is getting help when they are not getting anything, then that small group pretty soon won't be getting the help. And there may be some cases when, as I said, benefiting that group is the only way to get broader benefits. That is why we did the bill yesterday, because we think it is a very important way of getting the Obama administration-- and I believe, by the way, many in the Obama administration do agree with that understanding. They will be running into pressures from the other side of the people they are dealing with in the financial community. But it is a broader political point.

For those of us who think, and there are some who philosophically don't want any government intervention in the market whatsoever. They don't want a minimum wage and they don't want an injection of capital to a failing financial institution. I disagree with that as a matter of economic philosophy. I respect its intellectual integrity. That makes sense. What I disagree with is the view that says it is okay to help AIG and not worry about their wages, but criticize the wages of auto workers. It is the view of too many in the financial community that they need some direct help because that is the only way to help the economy, and I think that is often the case, but, no, you don't have unions; no, you don't have health care. As I said, there is a consistent and honorable philosophical view that says ``no'' to all of that.

What I am addressing now are those in the sector that would be designated as the elite, who understand the need for an intervention of which they are the direct beneficiaries because that is the only way to help the whole economy, but then resist some of these other things.

One of the things that gives me optimism about the next 2 years, Mr. Speaker, is that I believe we have in place a President and majorities in the House and the Senate who understand that there has got to be some consistency in this approach. And let me just say in closing, and I hope this resolution is defeated, because I do not think that the Obama administration should be denied the right to use tools simply because the Bush administration misused them. And that is the only issue here today, if this were to have binding effect. But we are here today because of that anger that must be alleviated, because it must be recognized as based in reality.