Floor Statements

Mr. Speaker, I will address much of the substance of the bill in the general debate. I do want to say we are here dealing with an issue, subprime mortgages, that is the single biggest contributor to the greatest financial crisis the world has seen since the Asian crisis of the late nineties.

We are in a very difficult situation now in the financial markets; and wholly unregulated subprime mortgages, unregulated by the originator and then unregulated in the secondary market, has given rise to this.

The previous speaker talked about the danger we could do with our liability for the securitizers. I would note that one of those who volunteered to our committee that we should do something, he wasn't specific about what, but something to put some liability there was the Chairman of the Federal Reserve, Mr. Bernanke, who has talked about what he called the originate-to-distribute model, i.e., people who give mortgages who are not themselves subject to regulation who then in turn sell into a secondary market, and what has been lost in that is the responsibility to worry about repayment. Now, we will talk more about this.

There is a delicate balance here. I am not in favor and this bill does not in general preempt the rights of States to do what they think is necessary in the consumer protection area. But in the matter I just talked about, when we are talking about a national secondary market, we did believe some preemption is necessary. We have tried to define it precisely and hold it to a minimum necessary to have a functioning market. As I said, I will address some of those more.

The bill, I believe, does strike a balance that can be a difficult one to achieve, particularly in that area of some preemption so that you have a functioning secondary market, but not to the point where you intrude on the rights of States to make these decisions.

I do want to address the rule. At my request this rule does make in order a number of amendments from both parties. Several of the amendments offered by Republicans will be, I hope, accepted. The manager's amendment itself is a genuinely bipartisan amendment. Much of the manager's amendment, in fact, came from the minority; and, indeed, in our committee the ranking member had a major input into this. This bill did pass committee by a vote of 45-19, which was the Democrats and, not a majority, but a significant number of Republicans.

We have, I believe, a rule that allows most of the issues that are at stake to be voted on. There are amendments that would strike major parts of the bill. The gentleman from North Carolina has one. The gentleman from Georgia has one. There is a third, the gentleman from New Jersey. Three amendments that would strike very much at the heart of the bill. I believe they should be debated and I would hope defeated, but they are made in order.

I did consult very much with the ranking member, and I believe we have a procedure today that doesn't cover everything, but will have the major issues before us.

At the end of today, I hope we will have passed a bill and it will be a bill which I must say will probably leave all parties at interest a little bit unhappy. I'm not pleased with that, but I think given the competing interests here, that is the best we can do, particularly on this issue of whether or not we preempt.

I would note that while some of the groups that I work with in the consumer area are disappointed because they wanted no preemption at all, passage of this bill is supported by the Conference of State Bank Supervisors. They think there are some things they would like to see changed further on. It's supported by the NAACP and La Raza. And it has, we believe, the essential elements.

The core is this: loans made by banks as originators subject to bank regulation have not been the problem. The problem has come when loans were originated by unregulated people, not that they were morally deficient, but there was no regulation. Here is the core of this bill: we have tried talking to the bank regulators and others to take the principles that the bank regulators have applied to loans originated by regulated depository institutions and apply them to the unregulated originators, the brokers. And it is not the case that the brokers were morally deficient. In all of these professions, we have an overwhelming majority of honest people. But the problem is, in the absence of any regulation and the availability of a secondary market with no rules, that minority that was not scrupulous caused us problems. This bill fixes that.

Mr. Speaker, will the gentleman yield?

I thank the gentleman. I appreciate his comments, and I think he's right.

The gentleman from Texas' amendment not made in order was a substantive amendment. I do believe, as I looked at the amendments, every other amendment from either side that presented a substantive issue was made in order, and, frankly, I assumed that this could be the recommit, if the minority cared about it.

We did in the rule, as we should have, provide for every substantive issue to be debated, except that one. There is the motion to recommit, and that would be available for the motion to recommit.

Mr. Speaker, will the gentleman yield?

I appreciate it. I don't contest anything he said. But I would say it did seem to me, as I looked at it in a neutral way, that the minority did need some help on dealing with recommits.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks on H.R. 3915 and to insert extraneous material.

Mr. Speaker, I ask unanimous consent that, during consideration of H.R. 3915 pursuant to House Resolution 825, the Chair may reduce to 2 minutes the minimum time for electronic voting under clause 6 of rule XVIII and clauses 8 and 9 of rule XX.

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

We are dealing with legislation today that seeks to prevent a repetition of events that caused one of the most serious financial crises in recent times.

We understand today that we are in a worldwide problem economically, with a terrible shortage of credit, with some institutions threatened. There is no debate about what is the largest single cause of that.

Innovations in the mortgage industry, in themselves good and useful, but conducted in such a completely unregulated manner as to have led to this crisis, I know people have said, well, we may be exaggerating it. Here's what we recently heard from the head of the Blackstone operation:

``The mortgage black hole is, I think, worse than anyone saw. Deeper, darker, scarier. The banks are now looking at new reserves and my sense . . . is they don't have a clear picture of how this will play out.'' That's from one of the leading private sector entities.

What we have today is a bill that cannot undo what happened but makes it much less likely that it will happen in the future.

The fundamental principle of the bill, and many people have lost sight of this, is not to put remedies into place to deal with these problems when they recur, but to stop them from occurring in the first place.

We have had two groups of mortgage originators recently. We have had banks subject to the regulation of the bank regulators, and they've made mortgage loans. And then we have had mortgage loans made by brokers who were subject to no regulation, who had access to pools of money that were not regulated and could sell it to an unregulated secondary market. It is not the case that the brokers are morally inferior to the bankers. In both cases we are talking about people overwhelmingly who are decent and well-intentioned. The difference is the absence of regulation so that pressures to do things that were irresponsible were checked by regulation in the banking area and were left unchecked elsewhere.

Essentially what this bill does in its most important form is to try to conceptualize the rules that bank regulators used to prevent loans from being made that should not have been made and apply them to all loan originators. Again, the goal is not to give more remedies when people face foreclosure when there have been abuses, but to prevent the abuses in the first place.

One question has been raised from some in the Attorney General field and elsewhere who say, what about our current efforts to deal with the people who were abused? Thanks to a very explicit amendment by the gentleman from North Carolina (Mr. Watt) who, along with the gentleman from North Carolina (Mr. Miller), is one of the main authors of this bill, this bill will be entirely prospective in its effect, and people should understand no cause of action, no legal complaint, no remedy sought against anybody who up until now and until this bill is signed many months in the future, none of those causes of action will be abrogated. Every remedy being pursued against past abuses and even abuses that may yet to have occurred, although we hope they won't, until this bill becomes law will not be stopped.

There is some controversy about preemption. The bill takes a balanced position which has made a lot of people on all sides a little bit unhappy. We do not preempt the right of States to decide how to deal with mortgage originators, with lenders, with any of those. We do say that with regard to the secondary market, we are going to put some liability on those who are the active packagers, and that's in some ways controversial; but we believe the unregulated secondary market was a large part of this problem.

We do believe that you need to have some uniform rules if you are going to have a functioning secondary market. And we believe the secondary market has been on the whole useful but, having been unregulated, has caused some problems. So there is a limited preemption to that extent.

We are continuing to talk with people about ways to, frankly, improve this bill. There will be some amendments adopted today that will do this. It is a subject of great complexity with a lot of interlocking parts and some legitimate competing interests. We have arrived today, we think, at a reasonable balance. We do not believe that this is the way the bill absolutely will look in the end, but it is clear progress. And I want to stress the key point here is not in remedying past abuses. This bill allows all existing remedies for past abuses to stay in effect. This bill tries hard to prevent this pattern of loans being made that should not have been made for a variety of reasons from recurring and causing that great damage.

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

Mr. Chairman, I am very pleased to be able to yield to a member of the committee, who is not only one of the authors of this amendment, but has been a real source of strength to us in dealing with these issues throughout.

I yield the gentleman from North Carolina (Mr. Watt) 4\1/2\ minutes.

I yield 3 minutes to another Member who had a great input into this, the Chair of the Housing Subcommittee of our committee, the gentlewoman from California (Ms. Waters).

Mr. Chairman, I yield 2 minutes to another member of the committee, the gentleman from Georgia (Mr. Scott).

Mr. Chairman, I yield 2 minutes to another member of the committee who has been very active in this issue, the gentleman from Minnesota (Mr. Ellison).

Mr. Chairman, I yield 2 minutes to the gentlewoman from New York (Mrs. Maloney), chairman of the Subcommittee on Financial Institutions of the Committee on Financial Services.

(Mrs. MALONEY of New York asked and was given permission to revise and extend her remarks.)

Mr. Chairman, I yield 2 minutes to the gentlewoman from Illinois (Ms. Bean), another hardworking member of the committee.

Mr. Chairman, will the gentleman yield?

I thank the gentleman for yielding.

The gentleman from California and the gentleman from North Carolina, who is a prime sponsor of this, have been in conversations.

And I believe it is possible to achieve both objectives, that is, flexibility as to mode but the full substantive protection. And so going forward, as this bill moves on and ultimately we get to conference, I do think we can provide flexibility as to method while preserving the full substantive protections. And there will be conversations between the Miller brothers on that subject.

I now yield to another member of the subcommittee who has been very much involved, particularly in the area of manufactured housing, as well as others, the gentleman from Indiana (Mr. Donnelly).

Mr. Chairman, I now yield to another member of the committee who has been active on this issue, the gentleman from Connecticut (Mr. Murphy), for 2 minutes.

Mr. Chairman, will the gentleman yield?

The gentleman has been very tough on this issue, appropriately, and he is right.

Some people can read ambiguity into 2 plus 2, and we will deal with that. We are lawyers. We are into redundancy. So in the colloquy I will be having with the gentleman from North Carolina (Mr. Miller) we will reaffirm the point that the gentleman from Connecticut is making. I guarantee that by the time this bill comes out of conference, no one will be able to raise any doubt about the prohibition on anybody being compensated for costing the consumer more.

Mr. Chairman, I now yield to a man who is going to have a lot of free time after today because much of his life in the last year has been helping put this bill together in a very masterful way, the gentleman from North Carolina (Mr. Miller), for 4 minutes.

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

I yield myself my remaining time to enter into a colloquy with my colleague from Alabama.

Mr. Chairman, the gentleman from Alabama, this has been a collaborative effort in many ways. We have had some disagreements, but there has been a lot of agreement. And the gentleman from Alabama in particular took the lead in the language that went into the bill in committee and is being refined here dealing with nationwide registration requirements, a prerequisite for any kind of enforcement. Now, I appreciated the work he did and the committee benefited from it.

Community banks are obviously very important in this. And, indeed, if only community banks had made loans for mortgages, we wouldn't have a crisis. But we don't want to interfere with their ability to help going forward.

I would just yield to the gentleman in a minute to have him give his interpretation. My view is, and I defer to him as the spokesperson for the committee on this, because we are here talking about language which he developed and which we incorporated. We do have some regulatory requirements here that would affect not just the brokers but community banks. And I assume my colleague from Alabama, in drafting this, certainly intended and we meant to do this in the language, that the regulatory agencies would be able to show some flexibility in terms of the impact of these requirements on our community banks.

I would yield to my friend from Alabama on that point.

I thank the gentleman. In my closing seconds, let me just reiterate an important point.

Attorneys General have been concerned about their ability to prosecute and defend against certain abuses. Thanks to the gentleman from North Carolina (Mr. Watt), the effective date of this bill and all of its provisions will be the date of enactment. What that means is that any transaction that occurred before the bill becomes law, any loan that was made, will not be subject to the preemption. So we do want to reassure any law enforcement official out there that their rights to go against people who have been abusive will in no way, up until new loans are made, be in any way diminished.

Mr. Chairman, I offer an amendment.

Mr. Chairman, first, this bill makes some substantive changes, including one of the things we came across was the problem of people who were renting who lost their right to live there when there was a foreclosure.

We have compromised in this. I have had some conversations; I will have some further ones with the gentleman from Colorado. But we do try to preserve some protection for the renters in the bill. As passed by committee, we had 12 months. This reduces it some to 6 months as the maximum. We will talk more about it.

Beyond that, there are two things that the manager's amendment clarifies, and I have found from some on the consumer side two objections in this bill, and we deal with these in the manager's amendment and we will deal with them further. One is the issue of preemption.

I think a certain amount of preemption is essential if we are going to have a secondary market, but it is possible to read the language previously as preempting more than we meant to. What this amendment does is to make very clear that, no matter what the issue is, if the problem was based on fraud or misrepresentation, deception, or false advertising, there is no preemption. The ability of people to go after anything that was based on misrepresentation or fraud is fully preserved, whether or not it affected their ability to pay.

Secondly, we have--and I am pleased to note that La Raza and the NAACP support this bill--we included at the insistence of the gentleman from North Carolina and the gentleman from California specific language about civil rights violations. No civil rights violation that a State may have would be preempted.

So we have narrowed the preemption. We have made it clear it does not preempt anything growing out of fraud.

The second issue that has led to some concern, and I am about to yield to my friend from North Carolina (Mr. Miller) has to do with compensation. It was our intention to say that no one who was originating a loan should be given an incentive to put the consumer in a loan that would charge that consumer more than he or she could otherwise get, and we dealt with that.

The question then came about the way in which brokers are compensated, and we tried to provide two things: One, an absolute prohibition on any incentive to charge people more, but, two, not an interference with the way in which people chose to make those payments.

We thought we had the language clear. Some people think it isn't clear enough. One of the things we will do is to make that clearer.

And I would yield on this point to the gentleman from North Carolina.

Yes. That is absolutely what I believe the language says, and it is certainly our intent.

Yes. I would say, and let me just read the language at the bottom of page 4 of the manager's amendment. Those payments ``do not vary based on the terms of the loan or the consumer's decision about whether to finance.''

So we have tried to make it very explicit: Flexibility in method does not in any way reduce the prohibitions that have been stated against an incentive to charge more. And if it is necessary for us to say that again more clearly, as some people may think it is, we will find new ways to say it.

Will the gentleman yield me 15 seconds out of his time?

Yes. And also, the total cost of the loan has to be the same.

Yes, yes, yes. I feel like I am in Ulysses here.

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

Madam Speaker, I ask unanimous consent that during further consideration of H.R. 3915 in the Committee of the Whole pursuant to House Resolution 825, amendment No. 16 may be considered out of sequence.

Mr. Speaker, I send to the desk a privileged concurrent resolution (H. Con. Res. 259) and ask for its immediate consideration.

Madam Speaker, I ask unanimous consent that during further consideration of H.R. 3915 in the Committee of the Whole, pursuant to House Resolution 825, amendment No. 10 be permitted to be offered at any time.

Madam Chairman, on the question of this GAO report, I believe it is a reasonable request because I am confident it will come back in support of our bill. And I think it is entirely reasonable to ask them to start, without waiting for passage of the whole bill in both Houses.

Yes. Well, actually, final passage of the bill is going to, I hope, happen in a couple of hours in the House; but before it gets to the Senate, without waiting for the Senate, yes.

Madam Chairman, I rise in opposition.

And I will yield 2 minutes to the gentlewoman from California (Ms. Lee).

I yield myself 1 minute to comment on what the gentlewoman has said because we've agreed to the gentleman's amendment, so we're on some other subjects now.

What I would say is this: I would want to stress with regard, for instance, to ability to pay and jeopardizing the right of the homeowner, nothing in this bill in any way diminishes State remedies regarding ability to pay on prime loans. That's the argument, that we do not deal with the ability to pay on prime loans, et cetera. But the effect of that is that any remedy a State wants to pursue against the originator of the loan or the lender remains unimpeded. So we did want to make that point.

And just to say also, with regard to the incentive to charge more, the gentleman from North Carolina (Mr. Miller) and I discussed that. It will be very clear to anybody by the time this bill becomes law that there is no possibility of anyone being given higher compensation in return for getting people into a more expensive loan.

As to preemption, there will be some. There are people who want none at all. I do not think you could have a secondary market if there were no preemption. But we have already, in the manager's amendment, defined it, and I think reassured people that, for instance, fraud, deception, et cetera, that causes arising out of that will not be preempted.

I now yield the remaining time to the gentlewoman from Texas (Ms. Jackson-Lee).

I will say on this, as on a number of other issues, I will say very sincerely that the gentleman from North Carolina has persuaded me. I think he has clearly identified an issue that needs some further work. And as we go forward, ultimately to get this bill done, I would hope that we can work together on this.

Madam Chairman, I claim the time in opposition, not in opposition although there is going to be a secondary amendment.

Madam Chairman, will the gentleman yield?

I would be glad, Madam Chairman, to give the gentleman my assurance. And we can't all, when we see these things, know it's exactly right. If as we go forward, assuming the secondary amendment and the primary amendment are adopted, if the gentleman needs some further clarification of questions that we can deal with between now and the time of the final bill, we are open to continue those discussions.

Mr. Chairman, I claim the time that is set aside for someone in opposition since no one is.

I appreciate the gentlewoman coming forward. She has on this and other occasions played a very constructive role in helping us work things out. We have already done this for the Veterans Administration, Department of Veterans Affairs. Yes, in fact, it is our hope to get more people into the FHA program as an alternative to subprime. One of the things we've done, and the Senate is now doing it, is to extend the FHA's reach to people with subprime; although I do want to remind my friends in the Senate, I feel very strongly that when we do that, it would be terrible social policy to make people with weaker credit who are faithfully making their payments pay more than other people, and we will deal with that as we work out the two bills.

But for purposes of this bill, the gentlewoman is absolutely correct. So I intend to support her amendment.

And that leaves me with some extra time, so I would now yield 2 minutes to the gentleman from California, a member of the committee.

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

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

Will the gentleman yield to me?

As I said to my friend from Louisiana, I know everybody can't hear everything. He defends against an accusation that was not made when he said, Don't say they are all up to no good. Several of us on this side have explicitly said that we believe the majority are well-intentioned. The problem, I think, is that where there are people who are not well-intentioned, there are no rules to stop them. But we did on several occasions quite say the opposite of what the gentleman said we shouldn't have said.

Mr. Chairman, I offer an amendment.

Yes, I am.

Mr. Chairman, I offer this amendment, but I do not intend to push it today. I will be withdrawing it with the consent of the body. I was not as careful as I should have been in supervising or making clear my intentions in what I wanted. I do believe one of the two most controversial items in this is preemption. Very few people think we have done preemption just right. Fortunately, a lot of us are here. A lot of other people think we have done too much or too little.

The question of preemption is really twofold: one, should you preempt; and, secondly, having preempted, having prevented the State from acting, have you put sufficient rules in there to defer bad behavior. I think we probably didn't, as I read this over. That is, I think we have preempted, as we have clarified it, the right amount: not too much and not too little. But we have not put into the preemption enough in terms of deterrence.

We do have the policies and procedures in the safe harbor exemption. But what I think we should have and what this amendment was meant to embody is the ability of aggrieved parties or representatives, Attorneys General of the States, others, to go to the regulator of the entity in question and say, Look, there's been this pattern of abuse. When we have a pattern of abuse, you act.

We did not want to make the liability for any one violation too heavy. We didn't want to overkill. But we then would run into the problem the gentleman from North Carolina talked about, where violations at a moderate level of penalty could be simply a cost of doing business. So having a pattern and practice approach in here prevents people from treating a moderate penalty from simply being a cost of doing business.

It was drafted more than I had intended. That is my fault. I should have been paying more attention. I do not think originators ought to be covered in this, certainly not with a $1 million limitation.

So for that reason I am going to offer this and say that I hope to withdraw it now and work on it further.

I would yield to my friend from Colorado who is one of those who brought some of the problems here to my attention.

Let me take back my time. The gentleman raised that issue.

The gentleman from Texas (Mr. Marchant) raised an issue on renter protection. So you cannot be the homeowner being foreclosed upon and then get the rights of a tenant. The gentleman from Colorado had a further point, which is in those cases where there was a very specific prohibition in the loan against rental, that should not be overcome by what we do.

I would yield the remainder of my time to the gentleman from North Carolina.

Let me take back the time. The gentleman has underlined an important point. We are going to see this back again in somewhat buffed-up form. It goes to the regulators, so this isn't going to lead to court. It is not an explosion of litigation. It would allow a range of people to bring it, including State Attorneys General, but it would be brought to the regulator, someone familiar with that business model and an entity able to discriminate between good and bad practices.

I ask unanimous consent to withdraw the amendment.

I thank the gentleman from Maryland.

This is a very complicated subject. It involves a number of moving parts.

At every stage, and we said this from the beginning, at every stage in this bill, from the bill's introduction to the hearing to the markup to now, it has been improved. No one really knew enough. We are in a somewhat unknown area.

I would also say ultimately, I think, if we're going to get any legislation here, as I said before, we are going to get a bill that no single Member of this House likes in every particular because we are going to have to work together.

The gentleman from Maryland has identified one more area where we believe improvement can go forward. It is a subject that has to be refined some. This is the end of the session. We are getting legislation drafted. It can't always be done as carefully as we would like.

I appreciate the gentleman calling this to our attention; and in the bipartisanship spirit we have had, I believe we can continue to work on this, and by the time this bill is finally ready to be signed, we can include the thrust of what the gentleman is trying to accomplish.

Mr. Chairman, will the gentlewoman yield?

I want to thank the gentlewoman. She has been very diligent and called to the attention of the committee some of the concerns of the Attorney General of Ohio, with whom she has been working, as have her other Ohio colleagues. I appreciate this particular amendment and also the willingness of the gentlewoman to work with us as we continue to make this a better bill. I hope her amendment is adopted.

Mr. Speaker, I rise in opposition to the motion to recommit.

We have, from time to time, debated the issue as to whether or not we could make sure that no one who is not a legal resident or a citizen could qualify, but that's not what we're debating today. Let me read from page 2.

There are four kinds of identification that you must show. By the way, the mortgage industry and the real estate industry will not like the further paperwork here, but listen to this, lines 14 and 15, ``You must show a passport issued by the United States or a foreign government.'' Now, what makes anyone think that people who are in the United States with a foreign passport are here legally? They have foreign passports from other countries.

I think the problem is some on the other side have taken the word ``alien'' too literally, that is, they think an alien is someone who's not from the Earth. Because someone who is in America illegally who is from the Earth might have an Iranian passport or a Venezuelan passport or a Burmese passport.

So understand, what I think is happening is this. I've been seeing these a lot. I do a lot of recommits; it's a heck of a way to spend your life, but that's my job. This foreign government passport is new. I think what happened was this. I think the real estate industry, this is literally my speculation, the real estate industry said to the Republicans, Hey, wait a minute, we make a lot of money selling houses to foreigners. Don't cut out the foreigners.

But you forgot to say legal foreigners. This is what this bill says. So you may have some Americans who don't have all this ID, who don't have a passport, who don't live in a REAL ID State. They may not have this. They may have a driver's license that they can use and it's not a REAL ID State.

An American in a REAL ID State who doesn't have a passport can't make it. But an Iranian with an Iranian passport, Welcome to my home. Here's your mortgage.

Now, I understand the impulse to prevent illegal aliens from getting predatory mortgages. That's a very kind thing that the Republicans want to do for them. But they don't do it competently. Read the bill. It says if you have a foreign passport, you qualify. You vote for this and you will be favoring people from other countries who are here illegally over Americans who don't have a passport and don't live in a REAL ID State. Now, that's irrefutable.

In your desire to further the profitability of the real estate industry, and a lot of them are my friends and I have nothing against their profitability, but why would we want to vote for a recommit that elevates a foreigner who has no legal right to be in the United States and say they can qualify under this recommit, but an American who doesn't have a passport and doesn't live in a REAL ID State, has a driver's license and therefore didn't think they needed something, they wouldn't qualify. So we say to Americans, if you happen to be American, you had better get a passport and, now, it could be a Venezuelan passport, could be a Canadian passport, we don't care where it's from, just get a passport. I am baffled by this and I just think somebody didn't think this one through.

The point is that this recommit says nothing about restricting the mortgage process to people who are here only legally, because if you really think that people who are here illegally don't have a foreign passport, then you don't understand the situation.

So I say let's reject this effort to elevate foreign passports from people who may be here illegally over Americans who happen to not live in a REAL ID State and reject this recommit.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I ask unanimous consent that the Clerk be authorized to make technical corrections in the engrossment of H.R. 3915, to include corrections in spelling, punctuation, references to line numbers, section numbering, and cross- referencing, and the insertion of appropriate headings.

Mr. Speaker, parliamentary inquiry.

Mr. Speaker, would adoption of the motion to recommit promptly have the effect of suspending any of the committee or House rules which require certain numbers of days before action can be taken?

Prior to my speaking, Mr. Speaker, I have a parliamentary inquiry.

Are we debating the Defense appropriations bill here?

Is the subject matter of that HUD or Defense?

Yes.

I thank you, Mr. Speaker.

I was confused, Mr. Speaker, because I had to go up to the Rules Committee and I came back and I heard the gentleman from California saying stop throwing money at the problem, that's not the way to solve the problem. And when I think about what we're throwing money at, I assumed we were talking about the Defense bill and Iraq and reconstruction, because so much money has been thrown at that, none of us can keep track of it. Then it turns out he's talking about a relatively small increase in CDBG. I certainly agree we should not solve problems by throwing money at them. That, however, led me to think we must be talking about the bill that spends so much more money than anything else and that has had more documented waste and abuse and fraud, the Defense bill and the Iraq spending, than all the other appropriations bills put together.

As to this bill, now that I know what we're talking about, not to be taken for granted on the floor of this House, I want to be congratulate the gentleman from Massachusetts for doing an excellent job with the limited resources he was given, far too limited.

There is an increase in here for the Community Development Block Grant program. The President apparently wanted to continue his path of reducing Community Development Block Grants, having them be lower than they were years ago when he came into office. In fact, that is a very important program for our municipalities, and I am very pleased to see that it is not being reduced.

As to section 8, every year when the Republicans were in power, we would approach the point when we were running out of section 8s. And as a member of the committee that has the authorization role here, we would hear from Members, Democratic and Republican, about the importance of keeping this going. Now, I agree it should be improved. And what we have done here in this House, we began something last year but we finished it this year and sent it to the Senate. We passed a bill we called SEVRA, the Section 8 Voucher Reform Act. So, yes, we think there should be reform. This House has passed on a bipartisan basis, support from everybody in the authorizing committee, a bill to improve it. So we are trying to make things better. And I guarantee you that you will not find anywhere under HUD, and I know a lot about that department, anything like the wanton expenditure waste that we have seen in Iraq and elsewhere.

What the gentleman from Massachusetts has done in the housing area is sensibly to respond to important needs. I particularly want to say earlier this year, the Secretary of HUD, Secretary Jackson, asked me to meet with a group called ADAPT. These are people who represent people with disabilities. They were concerned about the availability of section 8 vouchers for people with disabilities, particularly those who may have been turned away from public housing projects. In response to that, in collaboration, the bill we have today increases that pool of vouchers. Now, they're not earmarked for that group, and we will have further conversations about how to deal with that, but there are additional vouchers here that the Secretary of HUD came to me and said, look, will you listen to this group and try to respond? And these are vouchers that respond to their needs.

I thank the gentleman from Massachusetts. I wish he was able to throw money at the problem. I wish we had a set of priorities in this country that were more respectful of genuine human needs. But given the limited resources he has, he and his subcommittee have done an excellent job.

Madam Speaker, during the debate on the Employment Non-Discrimination Act, critics of the bill--both those who objected that it did too little and those who claimed that it did too much--made a number of arguments about the bill that were flatly wrong. Fortunately, under the leadership of the chairman of the committee, the gentleman from California Mr. Miller, and the Chairman of the subcommittee, the gentleman from New Jersey Mr. Andrews, the staff of that committee did a first-rate report rebutting those inaccurate criticisms. Often, reports of this sort, while reflecting a great deal of work, are ignored. In this case, Professor Dale Carpenter, a law professor who has been an excellent source of accurate information about the true meaning of the legislation, called attention to the committee staffs work in a recent internet posting.

Madam Speaker, as Professor Carpenter points out, ``This sort of legislative history does not dispose of controversies over the meaning of ENDA. But it does offer a reasonable and persuasive interpretation of the bill that will likely play a role in future litigation. The committee legal counsel who worked on this report anticipated many of the objections to ENDA from President Bush's advisors and from transgender and gay activists . . . They did an extraordinary job walking the fine line between an interpretation of ENDA that is unduly crabbed and one that is objectionably expansive.''

Madam Speaker, in the interest of disseminating in the widest possible way the accurate interpretation of ENDA that is reflected in this report, the importance of which is underlined by Professor Carpenter, I ask that the part of Professor Carpenter's posting dealing with the report be printed here.

Excerpt from Professor Dale Carpenter's internet posting:

Little noticed in the run-up to the House vote was the

Labor Committee report that accompanied the bill. The report

was prepared by attorneys who work for the committee. Much of

the report is devoted to recounting the history of the

numerous attempts over the past 33 years--beginning with the

first bill introduced by Bella Abzug in 1974--to get Congress

to deal with anti-gay employment discrimination. That history

tells a story of painfully slow political progress made in

each session of Congress, with more co-sponsors backing an

anti-discrimination bill in every session. Other parts of the

report document the prevalence of anti-gay job

discrimination, as well as the economic and psychological

impact of such discrimination.

In the section-by-section analysis of the committee report,

I noticed a couple of passages relevant to the recent

controversy over adding ``gender identity'' to the bill. On

p. 31, the report notes that ENDA forbids discrimination

based on ``actual or perceived sexual orientation.'' Thus,

``ENDA creates a cause of action for any individual--whether

actually homosexual or heterosexual--who is discriminated

against because that individual is `perceived' as homosexual

due to the fact that the individual does not conform to the

sex or gender stereotypes associated with the individual's

sex.'' Obviously, this interpretation of ENDA offers some

protection to those employees whose gender nonconformity

leads others to assume they're gay or lesbian and then suffer

discrimination on that basis. It doesn't protect transsexuals

or crossdressers as fully as adding ``gender identity'' to

the bill would have, but the bill moves in that direction.

Additionally, on p. 33, the report puts to rest any fears

that stripping ``gender identity'' from the bill would lead

federal courts to conclude that Congress meant to impliedly

reverse Price Waterhouse v. Hopkins, a 1989 case in which the

Supreme Court held that sex stereotyping violates Title VII.

The report concludes that Section 15 of ENDA, entitled

``Relationship to Other Laws'':

Preserves provisions in other Federal, state, or local laws

that currently provide protection from discrimination. For

example, Congress does not intend to overrule, displace, or

in any other way affect any U.S. Supreme Court or other

federal court opinion that has interpreted Title VII in such

a way that protects individuals who are discriminated against

because they do not conform to sex or gender stereotypes.

See, e.g., Price Waterhouse v. Hopkins, 490 U.S. 228 (1989)

(female plaintiff brought successful Title VII claim after

she was denied partnership in an accounting firm because she

did not conform to female sex stereotype); Nichols v. Azteca

Rest. Enters., 256 F.3d 864 (9th Cir. 2001) (male plaintiff

brought successful Title VII claim after he was subjected to

a hostile work environment because he failed to conform to a

male stereotype).''

This sort of legislative history does not dispose of

controversies over the meaning of ENDA. But it does offer a

reasonable and persuasive interpretation of the bill that

will likely play a role in future litigation. The committee

legal counsel who worked on this report anticipated many of

the objections to ENDA from President Bush's advisors and

from transgender and gay activists disappointed that the bill

isn't more comprehensive. They did an extraordinary job

walking the fine line between an interpretation of ENDA that

is unduly crabbed and one that is objectionably expansive.

ENDA is the product of decades of work by gay advocates

whose efforts once seemed quixotic. In 1974, Abzug's bill had

only four co-sponsors and was completely ignored by the House

Judiciary Committee. Yesterday 235 members of the House

backed the same basic idea.

Mr. Speaker, everybody wants to deal with the problem of the AMT, but only some of us are prepared to deal with it responsibly and realistically, namely, by an alternative revenue source.

You look at the taxes that are being reduced here and the offsetting taxes that are being raised, and it is the most extraordinary piece of tax fairness I have ever seen.

The one argument is that we can't afford that fairness because if we raise taxes to the normal level that people pay on income on the wealthiest people in the history of the world that they will stop doing what they do. Now, I do not criticize these people. I think they perform a useful economic function. But they are the wealthiest people in the country and in the history of the world on the whole. The notion that they have to pay somewhat more tax up to the level that most of us pay on income, they will somehow go on an economic strike and stop doing these things is badly flawed.

They are not engaging in this activity as a favor to us so that they can quit if we offend them. They are doing it because it's a way for them to make money, as they have a right to do. They'll still be making enough money to keep doing it.

I appreciate it and I appreciate the gentleman's cooperation.

I would just say, to move this along, as the gentleman from Florida responds, he will be speaking for the committee leadership. These are matters on which we have some general agreement that work needs to be done. I won't have to say this every time, but when the gentleman from Florida gives you that assurance, it comes from the committee leadership as well.

I want to express my appreciation to the gentleman, both for the cogency of the points he raised, because we want this to work well, and he has helped us both previously and today in refining this. I also appreciate his courtesy in helping us move this. I thank the gentleman from Illinois.

Mr. Chairman, will the gentlewoman yield?

I thank the gentlewoman. I appreciate the initiative, and she's clearly right in concept.

We would say that this bill, we hope, will pass today, but it's not going to pass the Senate until we come back early next year. We do obviously hope to get this bill in place before the next hurricane season so we could get started. But that would give us time to work on this before our final passage was done.

And as the gentlewoman understands, because she's been involved herself, the State-Federal issue can become complicated. So while we very much agree on the substance, we don't want to engender a kind of State-Federal issue which could go beyond Florida. This is obviously something for all the States.

So with that in mind, it's a common objective, indeed. We think the gentleman from Connecticut's amendment goes in that general direction. But we really want to be very careful about the State-Federal-local interactions here.

So if the gentlewoman is agreeable, we would be working with her between now and some time in March or April when we finally hope to get this bill done so we can improve these kinds of requirements, but in a way that isn't going to jeopardize the whole thing by a big Federal- State dispute.

I appreciate that. I also appreciate the fact that today no Republicans object to you withdrawing the amendment.

I rise in opposition to the motion to recommit.

I yield to the gentlewoman from Florida (Ms. Brown-Waite).

Mr. Speaker, first my friend from West Virginia said, well, we would be displacing the private insurance market. We have fellow citizens represented here who are trying desperately to find that private insurance market. This is hardly a case of our intruding in a perfectly functioning market.

And then the amendment bans cross-subsidies; it bans cross-subsidies that do not exist. The CBO report: ``Assuming the appropriation of the specified amount CBO estimated in implementing this provision would cost $75 million over the next 5 years.'' That's the total on one provision. On the other provision: ``CBO estimates that loans made under the bill would have an insignificant cost over the next 5 years. Enacting H.R. 3355 would not affect direct spending or revenue.'' So there is no taxpayer expenditure; so there is no subsidy.

Then as to cross-subsidy, it is very carefully worded. It says: ``No cross-subsidizing in any geographic region.'' It doesn't say across State lines because that could not happen. No State is in this program unless it volunteers to get in. So now, apparently, the worry is that north Florida will subsidize south Florida. I think we leave that to Florida.

One last point. Many of my colleagues have had this button, article I. This does not attempt to change the program substantively. It does not try to deal with the subsidies because they're nonexistent. It says: ``The Secretary of the Treasury has to certify.'' It is a very disturbing provision. It gives to a Secretary of the Treasury, who might be ideologically opposed to this, the power to kill the program voted by both Houses of Congress. If it said the Secretary could make a report and we would consider it, that would be one thing. But there is no taxpayer subsidy, according to CBO. There is no interstate involvement unless the States have volunteered to get in.

And then it says that these nonexistent hazards will stop the program. And it doesn't say, by the way, that the Secretary stops it if he certifies it's causing a problem. He has to certify the negative. He has to certify that it's not causing the problem. To give that kind of power to the Secretary on a carefully drafted bill that already says no subsidy, that bans any interstate involvement unless the States want to, is just a way to kill the bill. I do not think that it's fair to our colleagues from Florida on both sides of the aisle who have brought this forward and colleagues from other States who may want to join.

The worst thing about this is the title: ``Prohibiting Cross- Subsidization from Middle America.'' Well, the gentlewoman left out apple pie and the flag, but all of them are irrelevant to this bill. If Middle America doesn't want to be in this bill, it simply stays out of it. There is nothing here that would coerce any State to be involved. So Members can safely vote against this recommittal and know that Middle America will sleep soundly tonight without having to subsidize the State of Florida.

Mr. Speaker, I yield back the balance of my time.