Floor Statements

Mr. Chairman, I move to strike the requisite number of words.

Mr. Chairman, I agree we should be debating substantively whether or not we have reached perfection in the amount of resources we have put to homeland security, and if Members on the other side think that no additional funding for homeland security is necessary, no additional border guards, no additional funding for immigration, that's their right.

If they have so little confidence in Secretary Chertoff and the other appointees of the Bush administration to decide what they need to administer their responsibilities, that's their right. In the Senate, they call it ``a vote of no confidence'' formally. Here the vote of no confidence in Secretary Chertoff will be the constantly repeated phrase, ``those bureaucrats,'' and apparently Members do not have any confidence in the appointees of the Bush administration. That's their right.

What they don't have a right to do, it seems to me, is to totally forget history. Now, we are told, and I guess I should express my admiration for so many Republicans who are fighting for the rights of others. In our society, people fight for their own rights, but we genuinely honor people who fight for the rights of others, people who are not themselves victims, but fight to protect others who have been victimized.

Well, a number of the Republicans are in that category. They are fighting very hard for the right to vote against earmarks. What's interesting is that many of the Republicans who over these past couple of days have been fighting for the right to vote against earmarks always vote for earmarks, and I don't just mean in overall bills.

The gentleman from Arizona (Mr. Flake) took the floor and acknowledged that he had offered 39 amendments in the last Congress to cut out earmarks and he lost 39 times. The overwhelming majority of Republicans voted 39 times against the gentleman from Arizona. So we have Republicans yesterday, and I will have the Record and we'll have the rollcall, we will have people who said you must give me the right to vote against these earmarks who then never voted against a single earmark. And that is admirable.

It is admirable when you, yourself, have no intention of voting against earmarks when, in fact, you are 39 for 39 in voting to keep earmarks in the bill. And by the way, one might think the gentleman from Arizona is irrational. I do not. I voted with him on a number of occasions, not the majority, but I voted with him on some.

The gentleman from Arizona is a careful Member. He selected the most, to him, outrageous earmarks, and we have Republicans who voted for all 39 outrageous earmarks, according to the gentleman from Arizona. The great majority of the Republican Party voted overwhelmingly to reject the earmarks that, of course, their appropriations colleagues had put in the bill.

So, Mr. Chairman, is that not admirable, Members who got up here and said, How dare you not let us vote against earmarks, when they themselves had no intention of doing that? This is the vegetarians rushing forward to defend the slaughter of beef cattle. This is atheists insisting that people be given a religious day of worship.

This is a very, very impressive display of concern for the others. These are people who themselves apparently intend to vote for every earmark that comes down the pike. They never met an earmark they didn't like, because if the gentleman from Arizona has done all of his careful research, and he's presented 39 earmarks that he thinks are particularly egregious and Members have voted against him on every one and have voted to keep all 39 earmarks, they've never met an earmark they didn't like.

So their insistence on delaying this bill and repeating arguments. I must say I was here all night last night. I walked in and I don't object to dilatory tactics. I object to excruciatingly boring dilatory tactics. I must say, Mr. Chairman, the Members on the other side are the least imaginative filibusterers I've ever seen. They just repeat themselves and repeat themselves, and stuff that was uninteresting and flat in the first place does not improve with age.

But whatever their tactics, understand they are employing them on behalf of the right of the others to vote against earmarks because it is clear that the overwhelming majority of Republicans have no intention of voting against earmarks, at least not based on the record. They not only voted for bills with earmarks, the gentlewoman from North Carolina acknowledged that earmarks had increased from 1,500 to 15,000 under Republicans, but then, of the 15,000 earmarks, when one of our most diligent Members, the gentleman from Arizona, proposes to kill 39 of the earmarks, the overwhelming majority of Republicans voted against him 39 times.

So, for that dedication to preserving a right that they themselves have no interest in exercising, I give them credit, for very little else, Mr. Chairman.

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

Madam Speaker, I ask unanimous consent that the business in order under the Calendar Wednesday rule be dispensed with on Wednesday next.

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

Mr. Speaker, I congratulate the minority for its persistence and tenacity, if nothing else. This will be the 11th time the House has been asked to vote to kill the Affordable Housing Fund since last Thursday. They have, as I have said, taken as their model apparently the TV pitchmen of yore. They have got a machine that slices and dices and cuts and shreds and chops and whatever. They have offered 10 amendments to kill the Affordable Housing Fund. This is number 11.

No, I will not yield, and I will explain why.

We had an open rule. Any amendment that they wanted to offer could have been offered as long as it met the deadline, which was a very long deadline. Now we have ambush legislation again. There have been 10 tries at this.

Mr. Speaker, if they really wanted this to be debated thoughtfully, it would have been an amendment. It wouldn't have been held back for 5 and 5 with us having only a chance to read it now. It is just one more attempt to kill the bill.

No, I will not yield, Mr. Speaker. I will not be part of self-ambush. I will say to the gentleman from Virginia, offer an amendment when you have the right to offer an amendment, and we will debate the amendment at length as we debated many of these amendments.

But to play this kind of ambush game, do not expect cooperation.

The gentleman may say, well, it is unfair. We got the last word. That was his choice. The gentleman could have offered the amendment in a fashion that would have allowed a broad debate on it. But they chose to have the benefit of the ambush, but not pay the price of it.

This kills the affordable housing fund. What it says is none of this money goes for rental housing.

By the way, they list a lot of the States. They say ``including.'' It can go to any State; so does the bill as it now stands. The bill as it now stands allows the money to be spent in any State. And the key is this: This amendment, if you take it at face value, I would advise that, but if you do, it kills rental housing.

Now, homeownership is a good thing, but as we have seen from the subprime problem, if you ignore people who should be renting, if you try to shoehorn everybody into homeownership and don't build a single unit of affordable rental housing, and that is what this amendment says, this amendment says none of the funds go to build rental housing, it is all homeownership. Homeownership is useful, but it is not the exclusive answer and we have a problem of people being pushed into it.

Then this says ``promptly.'' Promptly means maybe not, as we know in parliamentary language. We got some explanation why it couldn't be ``forthwith.''

There are some people who don't like this bill. They don't have the votes to kill it. They have tried every which way to do that.

Mr. Speaker, will you instruct the gentleman? When it becomes clear that I am not going to yield, this becomes, it seems to me, somewhat unparliamentary.

Thank you, Mr. Speaker.

Mr. Speaker, we debated a long time on Thursday. I had to have my cast rewrapped because I was waving my arm so much. I did become unwrapped, I will tell the House.

But the point is this: We had ample opportunity to debate this with give-and-take. But you cannot, Mr. Speaker, it seems to me, expect to come in at the last minute with a very tough amendment that kills the housing fund

that we have already voted on 10 times because it says no rental housing can be built at all under this, says ``promptly'' rather than ``forthwith'' for no good reason except they don't like the bill and don't have the votes to kill it, and then says you wouldn't give me a chance to go back and forth.

Yes, the rule did. The rule said that this amendment, if it was a thoughtful attempt to amend the bill, could have been offered as an amendment. Instead, it is held back. No one gets to see it until literally a minute before the debate starts. It is a 3-page amendment. It kills the affordable housing in a very limited debate.

To put this forward under a procedure which Members know limits debate to 5 minutes and 5 minutes, and then to complain that there isn't enough back and forth, Mr. Speaker, that is the equivalent of accusing the Three Stooges of being silly, and I hope the recommital is defeated.

Mr. Speaker, I demand a recorded vote.

Madam Speaker, yesterday, May 20, marked the 41st anniversary of the date on which Jose F. & Valentina C. Giesta emigrated from the Azores to Massachusetts, landing, fortunately for me, in New Bedford. I say fortunately for me because while I believe in general that hardworking immigrants like the Giestas have been a great boon to this country in so many ways, and have particularly added significantly to the economic and cultural richness of Southeastern Massachusetts, I've been a particular beneficiary of this immigration decision because their daughter, Maria, is my very capable Deputy Chief of Staff.

The Giestas are an excellent example of why so many of us continue to support an immigration policy that welcomes people from elsewhere in the world who want to come to America both to share in the life we have and to help it flourish. Next week, on June 1, the Giestas will mark another very important anniversary--that of their wedding. They were married in Faja de Baixo in the Azores on June 1, 1957--several weeks, I will note, with a politicians penchant for getting himself into the act, before I graduated from high school.

As the Giestas celebrate their 50th Anniversary with their family and friends in New Bedford, they will be with their five children, who are in addition to Maria Eugenia, Gualter, Jose Augusto, Aires, and Stephanie. Stephanie, incidentally, has become a very accomplished hairstylist of whose talents I regularly avail myself. Their five children have produced eight grandchildren, Melissa, Mark, Matthew, Jacob, Tyler, Austin, Quentin, and Daulton. As the family gathers in New Bedford next Saturday on this wonderful occasion, I take this opportunity to acknowledge this event here, not simply out of my personal feelings of gratitude and affection to the Giestas, as strong as they are, but because at a time when people have been hearing a lot of the negative arguments about immigration, the story of the Giestas-- a representative one for my district and many other districts across the country--shows how in fact immigration has been of overwhelming benefit to this Nation of immigrants. I am delighted to send my best wishes to Jose and Valentina and to tell them that I regularly cite them as an example of why an open and welcoming immigration policy continues to be in our Nation's best interest.

Madam Speaker, I rise today with Ranking Member Bachus to recognize L. Carter Cornick III for his dedicated service at the United States Department of Housing and Urban Development.

After serving nearly 5 years, an era of sorts, Mr. Cornick, the General Deputy Assistant Secretary for Congressional and Intergovernmental Relations, will return to the United States Senate as Chief of Staff to Senator John Warner. In his new role, he will once again be working for the people of the Commonwealth of Virginia, the state he loves and ever-so-proudly calls home.

During his tenure, we have had the pleasure of working closely with Mr. Cornick on many issues involving housing policy. We have relied on him to help turn some of the Committee's ideas into realities at HUD. Mr. Cornick has been helpful on several issues where it was important for us to work together.

In addition to his work as the Department's primary advocate before Congress, Mr. Cornick should also be recognized for the deep admiration he has earned within the halls of HUD. He has taken the time to learn and understand HUD's many complex programs, and has worked with and relied upon the career experts for their advice and historical knowledge of the issues.

We commend Carter Cornick for all of his tireless efforts in representing HUD before Congress, and congratulate him on his latest endeavor in public service. He will be missed.

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 698) to amend the Federal Deposit Insurance Act to establish industrial bank holding company regulation, and for other purposes, as amended.

Mr. Speaker, at the outset, I ask that all Members have 5 legislative days to revise and extend their remarks on this legislation and to include in the Record extraneous material thereon.

Mr. Speaker, the House today revisits the subject of the industrial loan corporation.

Industrial loan corporations were created early in the last century as a kind of a niche at a time when it was felt that banks did not adequately serve working people, people of lower incomes.

When Congress dealt with the situation of banking reform in the 1980s, Congress decided to limit this form to six States, which now have the right to issue industrial loan charters, and recognize that the general business of banking was now being carried out in a way that did not require these niche banks, which Congress did not want to at that time wipe out banks that had been appropriately established under existing law.

But it's clear that they were regarded as a somewhat nonconforming use. There are people today who talk about what a good thing the industrial loan corporations are. None of them, however, seem to me to have shown the courage of their convictions, because those who believe that the industrial loan corporation should continue to flourish and grow, as will happen if we don't pass the bill, ought to be abolishing that restriction that says only six States can issue those charters.

I cannot think of any other financial instrument of which we have general approval where only six States are allowed to charter them. People who genuinely believe in the ILCs are the ones who ought to be pushing legislation. They do not. They implicitly accept the fact that they are an exception to a general principle.

The particular general principle to which they are an exception is the one which we have affirmed recently when we did the Gramm-Leach- Bliley bill, namely that banking and commerce should be separate.

Now, let me be very clear. If an entity that is in the manufacturing business or the retail business or any other business wants to get into financing its purchases, or even wants to lend money to people, they wouldn't be affected by this as long as they were willing to forgo deposit insurance.

We are here because if you become an official bank, as ILCs can be to this extent, you get various benefits from the Federal Government, including deposit insurance. So this is not the Federal

Government intruding on purely private business decisions, it is the Federal Government saying, look, we have set up the system of deposit insurance. We have set up other things that apply to banks. We want to restrict those services to entities which are only in the banking business. We do not want people who have as their primary business a manufacturer or wholesale or retail sales also dealing with banking. We think that is an unwise mixture. We think that the decisions that are made that we want to insure through the depository insurance system ought to be made purely on the banking aspects of this and not because the bank will make money on the side from where the purchase goes.

Now, people have asked, why this legislation now? The answer is that for a variety of reasons, I am not fully aware of why, this situation changed drastically in the last few years.

ILCs, as they exist today, are not a problem. No one is talking about abolishing them. In the State of Utah, where they are most important, and where there continues to be strong support for them, there is opposition to them even in some of the other States that have the right to charter them, the estimate we received from the Utah bank supervisor was that 93 percent of the assets of ILCs meet the test that we would apply here in this bill to everybody.

That test, by the way, is the one that we took out of Gramm-Leach- Bliley; namely, that to be in the banking business, you have to be at least 85 percent a financial institution, though we do recognize there will be some incidentals. Ninety-three percent of the Utah ILCs meet this.

The problem is over the last few years, a number of large manufacturing and commercial entities have decided that they would like to get into the ILC business. So people have said to us, why are you upsetting the status quo? We are not. Here, to be honest, we are preserving, we think, the status quo, which is the principle of the separation of banking, commerce, a banking system which exists under that rubric and a small niche for some banks which, for historical reasons, were allowed not necessarily to follow this.

What's changing the status quo is the application from a number of large entities, Wal-Mart, Home Depot, many others, to get into the ILC business. We believe that does not really reflect what Congress intended in the 1980s. It's not illegal under current law, but we think that Congress did not anticipate then that large commercial and manufacturing entities would seek substantially to broaden the ILC approach.

There were people who disagreed with us that we should preserve the distinction between banking and commerce. I asked them, where is that bill?

Again, those who would support by not changing the law a broad expansion of the ILCs are the ones who are seeking drastic change in our banking laws. They are, in effect, saying, you know, this distinction between banking and commerce you make is arbitrary, it has been outdated, let's get rid of it.

Well, the way to get rid of that is for people to bring forward a bill. I can promise them as chairman of the Financial Services Committee, we will have a hearing, we will consider it. But let them bring forward a bill, and let's do that as a conscious decision of the Congress of the United States.

I will oppose it, I think most Members will, which is probably why they don't want to bring it forward. But let's not do it in a kind of a back-door way by the expansion of what had been intended to be a residual niche kind of banking. This bill today would say that going forward, it doesn't wipe out existing entities, but going forward, ILC charters will only be granted to those that are at least 85 percent financial.

I want to give my thanks to the Chair of the Federal Deposit Insurance Commission, Chairman Bair. They have been put in a tough situation, because the law theoretically allows them to create an infinite number of new ILCs with no respect whatsoever for the banking and commerce distinction. Once this House passed a bill on the subject, although it did not pass the Senate, a phrase one often hears, the FDIC at our request has imposed a moratorium on new ILC charters.

But the FDIC is a law-abiding organization. Chairwoman Bair has an appropriate understanding of the role of the regulatory body in a democratic system. She will not forever maintain a moratorium, nor should she. What she did was, quite appropriately, give Congress the chance to legislate. We are beginning that process today.

I hope that we will pass the bill, that it will go to the Senate and they will pass something, and we will be able to work out legislation which will essentially preserve the distinction between banking and commerce. The necessity for us to act now is that if we do not act, the status quo will be greatly transformed, and the distinction we have long maintained in our law between banking and commerce, instead of admitting a fairly small exception where six States can do it, and where even in the State where it is most prominent only 7 percent of the assets under this form are the exception, we will then see a general erosion. Erosion may understate it; a general abolition of the line between banking and commerce. We do not think that is appropriate, and passing this bill is the way to stop it.

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

Mr. Speaker, I now yield as much time as he may consume to the gentleman from Utah (Mr. Matheson), a former member of our committee with whom many of us disagree but who, representing the State of Utah, has been a very staunch and articulate defender of a form of banking which is very important in his State.

If the gentleman would yield to me, let me say, and I want to pay tribute to members of the staffs on both sides, Mr. Paese and Mr. Yi on my side here, who did a lot of negotiating. There are a lot of regulators involved here, the FDIC as the primary regulator, but the Federal Reserve and the Securities and Exchange Commission, the Comptroller, and we did the best we could to try and not have this be a means of changing existing relationships.

So I can assure the gentleman from Alabama that he has precisely stated our intent. When we grandfathered these firms in this bill, it was our purpose and is our purpose to let them continue to operate the existing industrial banks under the limitations of the bill and under the supervision of each grandfathered firm's appropriate supervisory agency.

So I hope that would respond to the question. It is our intention essentially to ratify the existing arrangements by law, which would, of course, preclude the need for a waiver if the law is clear about what it does.

If the gentleman would yield. With some encouragement.

I just want to respond to my good friend from Utah. He made an interesting point which is, well, if these are terrible, why don't you abolish them? That, of course, becomes a Catch- 22. I guarantee you that if we had proposed in fact to abolish or severely restrict existing ones, he would have been justifiably a lot less happy than he is today.

Congress made a decision. We don't always make the best decisions when we look back; we often make good decisions, but not perfect ones. We believe it would be unfair to undo what was originally done by law.

I would note again that even in the State of Utah, which has become the primary focal point for the industrial loan corporations, 93 percent of the entities functioning as industrial loan corporations in Utah would be unaffected by this bill. They would be able to expand because they meet the 85 percent financial test.

As to the others, we believe that it is those who have finally figured out the potential of the industrial loan corporation going forward who are trying to change things. People have said to us, well, there's been no problem. Why are you doing this? Well, for once, maybe not once, let's not be too self-denigratory, we're doing this to get ahead of the problem. Yes, that's precisely the case. The ILCs have not caused problems. It is the, I believe, overwhelming view of people here and people who have watched the banking business and who believe in the separation of banking and commerce that if we don't act, we will see some problems. So that is what we are doing here. And I hope that this bill passes with a large margin, and we can pretty soon engage with our colleagues in the Senate about putting a final product on the desk of the President.

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

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

Mr. Speaker, first I ask the indulgence of the House for the fact that I am dressed a little less spiffily than is my norm, but I have a cast on my arm and this is all that would go over it.

Mr. Speaker, I have rarely heard anyone repudiate as much of his party's past as I just heard from the gentleman from Texas. First he said this is a restrictive rule. Why, because we said anyone who wanted to file an amendment could file an amendment. There would be no rejection of any amendments by the Rules Committee, and the deadline for that was the day before the bill was to come to the floor. Now we didn't know when that was. And, in fact, what happened was there was a possibility that there would have been an extra day. So the gentleman apparently objects to the possibility of an extra day.

I was also struck that he had two objections to deadlines. One was the fact that a rule had a deadline; and one was the fact that a rule didn't have a deadline. He objected to the fact that there was a deadline on the defense bill. He objects to the fact that there isn't a deadline on this bill.

Mr. Speaker, let's be very clear: The gentleman objects to the being in the minority. When you object to a deadline and the absence of a deadline, you have pretty much exhausted the logical possibilities of argument, and the gentleman has done that.

Then we talk about this being restrictive. This bill, a very similar bill, was reported out of the committee under Republican rule in the previous Congress. Nine amendments were allowed by the Rules Committee; 36 amendments are pending to this bill. So because we only had four times as many amendments to this bill as when they were in power, we have become restrictive.

The gentleman says we have upset a long-standing tradition. He is right. During their rule, the long-standing tradition was amendments they didn't like and were afraid might pass couldn't be offered. We have upset that.

Every amendment that anyone wanted to offer is before us. In fact, the last time this bill came before us, and apparently the gentleman voted for the rule, the bill came out of committee. In the Rules Committee, a self-executing rule was adopted that was very controversial limiting much of what could be done with housing funds, and the Rules Committee then refused to allow a vote on that self- executing rule.

So here are the comparisons as the gentleman from Texas laments: Our lack of openness. When he was in power, the Rules Committee took a bill that came out of the committee by a bipartisan majority, inserted its own amendment and insulated that amendment from being voted on. We instead said here is the bill, offer any amendment you want. This is pretty topsy-turvy. I understand the demands of partisanship, but shouldn't logic put some limits on what people would say just to make a partisan point?

The fact is this bill came out of committee in the last Congress with an amendment that the Rules Committee put in and wouldn't allow us to vote on, and we have done exactly the opposite. Then he talks about the housing funds, and once again, we have the zeal of a convert. He finds this housing fund a terrible thing, Mr. Speaker. It is a tax on people. It was in the bill that the Republicans brought to the floor. It was in the bill that received more than 300 votes, many of the ``no'' votes, my own included, were from Democrats who objected to the unfair restrictions on the fund that the self-executing rule imposed.

So when the Republicans were in power, this housing fund was not so bad. This housing fund came out of committee by a bipartisan majority, came to the floor, and was voted on in a final bill by over 300 Members. This same housing fund, exactly the same principle, it is financed a little differently, but with all of the same effects, when did it become so terrible? What turns a fund to build affordable housing for lower-income people from a thing to be proud of into a terrible tax? An election.

When the Republicans were in the majority, this was apparently a good thing. It was overwhelmingly passed. But now that the Democrats are in the majority, this same housing fund becomes something that is awful. It is a housing fund that is supported by the realtors, by the home builders, by everybody in the housing business because it does not have the effects the gentleman talks about.

Here is the inconsistency which lies at the root of many of my colleague's arguments. The purpose of this bill is to put some checks on Fannie Mae and Freddie Mac. People have said Fannie Mae and Freddie Mac get certain assistance from the Federal Government that allows them to borrow money more cheaply from the market, and too little of that goes to public benefit and too much goes to the stockholders.

So this bill, as did the last bill from the Republicans, headed by Chairman Oxley, and poor Chairman Oxley, he did Sarbanes-Oxley, he did this bill. I always thought well of Mike Oxley. I guess I have to defend him against his former colleagues who now are apparently ready to tear down everything the poor man did. Mike Oxley deserves better of you than for you to repudiate all of the good work that he did, and I speak out. I know you are not supposed to address people who are not here, Mr. Speaker, so let me say that I want Mike Oxley to know that there are many of us, and I think a few on his own side, too, who do respect his work on the housing fund and who respect his work on other things.

But what we said to Fannie Mae and Freddie Mac was we are going to have you make a contribution. You should not keep all of the money for yourself and for your shareholders. We are going to take some of it for affordable housing.

By the way, this is an affordable housing fund that a great majority of Republicans voted for 2 years ago. It became terrible because we won the election. Well, wisdom comes in various ways, and I suppose it came late to some of my colleagues over there, but better late than never by their standards.

But the fact is this: In this bill, there will be amendments proposed that would impose far greater restrictions on Fannie Mae and Freddie Mac than the housing fund. There is an amendment that I assume many of them are going to vote for, that would severely restrict what they could put in the portfolio. Now they make a lot of money off their portfolio, Fannie Mae and Freddie Mac, and that is part of the money that goes to help them keep down housing costs. An amendment will be offered that would severely restrict, that would say only low-income- type mortgages can go in the portfolio. That would have a far greater financial impact in reducing funds available to Fannie Mae and Freddie Mac than the housing fund. The problem is that the housing fund would help State governments and others build affordable housing, and apparently there is this ideological opposition to doing that.

By the way, where is this housing fund going to go in the first year, this terrible tax? It is going to go to Mississippi and Louisiana. It is going to go to a place where there was terrible devastation of affordable housing in Louisiana and Mississippi, 75 percent to Louisiana and 25 percent to Mississippi.

In future years, the money won't be spent until this House and the Senate and the President pass a subsequent bill deciding how to spend it. This bill sets it aside, but it leaves to a later bill the collective decision about how to spend it.

So we have a rule that allows 36 amendments. Last year they did nine. We have a rule where the Rules Committee does not add substance. Last year they did and wouldn't allow us to vote on it.

We do have one thing in common in the bill last Congress and this Congress: An affordable housing fund. The difference is that the affordable housing fund which my Republican friends took credit for 2 years ago has transmogrified into a terrible beast solely because the Democrats are now in power. That doesn't make any sense.

Well, I again would repeat that the gentleman said last year I supported this Housing trust fund. So did almost all the Republicans, but the basic point here is that he misstated the nature of the hurricane bill.

In the hurricane bill, and the gentlewoman from California who was its main author is here and will speak shortly, we did not provide any additional funds for the construction of affordable housing to replace what was lost. That was mostly with vouchers. We did have some project- based vouchers in the amount of a couple of thousand, but if the gentleman will go back to that bill, he will note frequently in the debate we alluded in that debate to this bill. That is, much of the rental housing in New Orleans was destroyed. The rental housing was destroyed in much of the gulf.

This was always a two-bill approach, and the gentleman is simply wrong to state that in the hurricane bill we provided funds for additional affordable housing. We stated at the time, we set some rules about vouchers. We talked about public housing, but we were always clear it would be this bill that would provide the funds.

So the point that we already did this could not be more incorrect.

Mr. Speaker, on October 26, 2005, the House passed the GSE bill that came out of the committee chaired by Mr. Oxley that had a housing trust fund virtually identical to this one. This one is financed a little differently at the request of the Treasury Department, but it's essentially the same thing.

The vote was 331-90. Republicans voted in favor of this bill containing this housing tax 209-15, and among those who joined in the majority, the gentleman from Texas (Mr. Sessions). So I appreciate his concern for this. It did not appear to be evident in October of 2005 when he joined 208 of his Republican colleagues in voting for essentially this same fund.

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. 1427 and to insert extraneous material thereon.

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

Mr. Chairman, I want to begin by again asking the indulgence of the House for my less than usual sartorial splendor, but the cast on my left arm would misalign my jacket, and I wouldn't want to wear a suit unless I could do it full justice. So I am wearing a sweater that Mr. Rogers no longer needs.

The bill before us today is a version of a bill that came before this House in October of 2005 after a lot of work by the former chairman, the gentleman from Ohio (Mr. Oxley), and many of us now on the committee. That bill passed the House by a vote of 331-90. Many of those who voted in opposition, myself included, were motivated to it by a specific provision regarding the affordable housing fund that is no longer in the bill.

Mr. Chairman, the bill has two major components. First, it significantly increases the strength of the regulator of the two major Federal housing government-sponsored enterprises, Fannie Mae and Freddie Mac. It also deals with the Federal Home Loan System. That was seen as less in need of drastic change. There is, in fact, less change there. There will be an amendment regarding that offered by the gentleman from Pennsylvania (Mr. Kanjorski), which I strongly support, to increase public participation in that system. But this is a bill fundamentally about Fannie Mae and Freddie Mac.

There is general agreement among a wide range of parties that this bill, building on the bill that Mr. Oxley brought to the floor, does do what needs to be done in creating a strong regulator. There are some controversial elements here, but very few deal with the powers of the regulator that we have set up. And I am pleased that the Treasury Department, Under Secretary Paulson and Under Secretary Steel, has agreed. In fact, this is a bill which, with regard to regulation and the regulator, is a little bit stronger than the one we passed a few years ago. We had some negotiations. They were useful, and we have a fully empowered regulator here, independently funded and empowered to do whatever needs to be done to deal with any safety and soundness issues that arise from Fannie Mae and Freddie Mac.

The most controversial areas of the bill involve a provision that was also in the bill when it last passed, and that is an affordable housing fund. A number of people have argued over the years that Fannie Mae and Freddie Mac receive from the Federal Government advantages which help them borrow money cheaply in the market, and that is true. There is a connection between Fannie Mae and Freddie Mac and the Federal Government. Those who borrow that money thinking that the Federal Government guarantees it are wrong. There is no Federal guarantee implicit, explicit, or any other way. But it is the case that the market does see these entities in a very favorable light and lends them money at a somewhat lower rate than other entities can borrow. The reason for its having been set up that way was to try to help housing, especially home ownership because these entities buy the mortgages and help bring down the cost of mortgages, but they have also been given for years goals by the law where they are particularly to help lower income housing.

Now, a number of people have argued over the years that Fannie Mae and Freddie Mac's shareholders, and in the past some of their executives, received too large a share of those benefits. The argument was, with some accuracy, that Fannie Mae and Freddie Mac benefited very much and not enough of that reached the public.

There are two ways you could deal with that. You could reduce the benefits that Fannie Mae and Freddie Mac get. Some people have advocated that. Alternatively, you could do what this bill does: leave the existing situation which provides some benefits to them but increase the share of those benefits that go for public purposes. We do that in two ways in this bill: First of all, and this does not appear to be terribly controversial, Fannie Mae and Freddie Mac have statutorily imposed goals. Some people have said these are private corporations and you shouldn't tell them what to do. Well, we have been doing that for a very long time. They are told that they must, in purchasing mortgages in the secondary market, make certain purchases that

help certain goals, low income housing, et cetera. We increase those goals. Secretary Jackson at HUD had been critical of them for not doing enough. We increase both the mechanism by which they held to those goals and the goals themselves.

But the newly controversial element to this is the Affordable Housing Fund. I say newly controversial because an affordable housing fund virtually identical to this one, financed through a different formula, but essentially the same in the amount of money and in the function, was in the bill that passed the House in October of 2005. At that time, the Republicans in the House voted for it 209-15. Now Members having once had an opinion are not required to hold it forever. But I do note that in October of 2005, 209 Republicans voted for the bill that had an affordable housing fund. Now that the fund has been, in the minds of some, transmogrified into all kinds of things which it is not. In economic terms, it very likely reduces the return, not by a huge amount, to Fannie and Freddie shareholders. Some have argued that it is going to raise the cost of mortgages. But ironically, many of those who argued that this will raise the cost of mortgages have supported even greater restrictions on Fannie Mae and Freddie Mac, particularly by limiting their portfolios, which would have many, many times greater impact on Fannie Mae and Freddie Mac's profitability, and therefore, their ability to help mortgages, than the Affordable Housing Fund.

The affordable housing fund takes some of the profit that Fannie and Freddie make, arguably a part of what they get from their Federal benefits, and said that it will be used for the construction of affordable housing. We have a serious crisis in America and a lack of affordable housing. We have been dealing with this for years by vouchers. Vouchers add to the demand for housing, but an annual voucher cannot create new housing, it does not add to the supply. We have a mechanism here where, without impinging on the Federal budget, without adding a penny to the deficit, in an entirely self-paid way, we take some money from Fannie and Freddie which reflects some of the benefit they get from their Federal arrangements and we recycle it into affordable housing. In the first year, all of that money, maybe $500 million, will go to Louisiana and Mississippi under this bill to replace the severe destruction of housing that has not yet been replaced a year and a half after the terrible hurricanes there.

For the future, the bill says it should be used for affordable housing annually, but leads to a later decision by this House and the Senate, I say optimistically, hoping we can get a decision from the Senate, and then to be signed by the President as to how to further distribute it. It creates the concept of an affordable housing fund. But we had in our committee various arguments. Some people wanted it to go through HUD, some through the State housing agencies. I believe that is a decision that we should make collectively, first in our committee, and then on the floor.

But we are not here doing anything other than saying the money will be available for a subsequent decision by the House that it will be spent. We do say that it has to be spent for housing, for bricks and mortar.

And there are going to be amendments that are going to be offered, let me say we tried to put safeguards in here against abuse. There are several amendments being offered, the minority whip has one, the gentleman from Texas, Mr. McCaul, has one, and some others have amendments, that will further tighten the constraints on this fund. I intend to argue for the acceptance of several of those amendments, at least three, that further tighten up the use of the fund. And I believe we will have accomplished that.

The question then will be, given that Fannie and Freddie get great benefits from the Federal Government, given that we have a housing shortage and a budget crunch in this country, does it make sense to take several hundred million dollars of the profits of Fannie and Freddie, which are enhanced by their Federal regulations and rules, and make them available for affordable housing? I believe the answer should be yes.

Virtually every entity involved with housing in America, from low- income housing advocates to the nonprofit and religious groups that help build housing, to the home builders and the realtors and the mortgage bankers, all support the notion of beginning to get the Federal Government back in the business of trying to do some affordable housing.

I hope that we can go forward with the bill. I do note we had 36 amendments; a couple I believe will be ruled nongermane. Nine or 10 I hope will be accepted without any controversy, including about five from each party. I did note that many of the others, about 18 of the others, are various ways of accomplishing three essential goals, making sure that illegal immigrants don't get the housing, either abolishing the fund altogether or restricting it.

I would hope that we could work out among ourselves some kind of representational thing so that we don't have to vote on all 18 amendments, many of which are duplicative of the others. And if we are able to work that out, I believe we will be able to get the bill through.

There is an important decision to be made about affordable housing. I believe many of the other issues the House previously voted on, I don't think there's a lot of controversy. We do have an important, legitimate, philosophic discussion about affordable housing. I am hoping that between us, we can structure things so we will have a couple of strong votes on that and we can send the bill forward.

Mr. Chairman, I submit the following correspondence:

House of Representatives,

Committee on Ways and Means,

Washington, DC, April 25, 2007.

Hon. Barney Frank,

Chairman, Financial Services Committee, Rayburn House Office

Building, Washington, DC.

Dear Barney, I am writing regarding H.R. 1427, the Federal

Housing Reform Act of 2007, which was reported to the House

by the Committee on Financial Services on Wednesday, March

28, 2007.

As you know, a provision within section 144 of H.R. 1427

would provide an exemption for a limited-life enterprise from

Federal taxes, an authority which falls within the

jurisdiction of the Committee on Ways and Means. The Ways and

Means Committee has jurisdiction over all matters concerning

taxes and the Internal Revenue Code of 1986.

In order to expedite this legislation for floor

consideration, the Committee will forgo action on this bill,

and will not oppose the inclusion of tax provisions within

H.R. 1427. This is being done with the understanding that it

does not in any way prejudice the Committee or its

jurisdictional prerogatives on this or similar legislation in

the future.

I would appreciate your response to this letter, confirming

this understanding with respect to H.R. 1427, and would ask

that a copy of our exchange of letters on this matter be

included in the Record.

Sincerely,

Charles B. Rangel,

Chairman.

Mr. Chairman, I yield myself 1 minute.

Mr. Chairman, I am disappointed frankly at a number of inaccuracies in my colleague's statement. In the first place, with regard to Katrina, the bill that we passed had zero money for new construction, and if he will go back, he apparently forgot, he will see we constantly said during the Katrina bill that we intended to provide the new housing construction money through this bill.

His assertion that there is some duplication could not be more wrong. We were very clear then. The Katrina bill dealt with vouchers. It had one 4,500-unit section with regard to some project vouchers. But throughout the Katrina bill, it was clear that it was a two-step process. This was the second step. There is zero duplication. Nothing in that Katrina bill did any significant increase in housing construction.

Secondly, he notes that I and the gentleman from California and the others voted against the bill last time, as I said earlier today, for one specific reason. The Rules Committee, over the objection of the Committee on Financial Services at that time, injected into the housing fund amendments that would have kept the Catholic Church and the Methodists and all the other religious organizations that were interested in building housing from participating.

We had one very specific objection. At that time the fund was going to be administered directly by Fannie and Freddie. There was a fear that they would use it politically. So one specific amendment was put in by the Rules Committee, we weren't even allowed to vote on it on the floor, and it would have restricted religious groups from participating. For that reason only, we voted against the bill. Since this does not allow Fannie and Freddie to spend the funds, that is out there. That is why we are being perfectly consistent in now voting for it.

The gentleman from Alabama, everything he said about the housing fund was in the bill he and 208 other Republicans voted for in 2005. Every single thing.

The gentleman has told me that he is philosophically opposed to the Housing Trust Fund. Then why did they all vote for it, those who share that opposition, 2 years ago?

The final thing, the gentleman from Illinois is here. The gentleman from Alabama inaccurately said we were raising FHA fees. In fact, the FHA under the Bush administration asked us to raise fees. Last year, the House passed a bill that would have allowed them to raise fees. The gentleman from California and I objected to some of those increases. Our bill restricts the FHA's ability to raise fees above what they wanted. In fact, what we got was an amendment at that markup from the gentleman from Illinois substituting last year's bill that most of the Republicans voted for. That would have allowed the FHA to raise fees far more than us.

So I don't understand how the gentleman from Alabama, who voted with the gentleman from Illinois to allow the FHA to raise fees further now blames us when we passed a bill that would have restricted their ability to raise fees above what they wanted. Maybe people got to go back and look at what they voted for and look at what they offered. The staff will have time. We have time to do that.

Mr. Chairman, I yield 3 minutes to the gentlewoman from California.

Mr. Chairman, I yield 3 minutes to the chairman of the Subcommittee on Capital Markets, the gentleman from Pennsylvania (Mr. Kanjorski).

Mr. Speaker, I will yield an additional 2 minutes to the gentleman from California.

Well, it will be if you vote with him.

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

Mr. Chairman, may I inquire how much time remains on my side?

Mr. Chairman, I yield 2 minutes to the gentleman from North Carolina (Mr. Watt), the Chair of the Oversight and Investigations Subcommittee.

Mr. Chairman, I yield 1\1/2\ minutes to the gentleman from New Jersey (Mr. Sires), a member of the committee.

Mr. Chairman, I yield 1\1/2\ minutes to the gentleman from New Hampshire (Mr. Hodes), another very able freshman member of the committee.

Mr. Chairman, I yield 2 minutes to the gentlewoman from California (Ms. Lee), an alumni of our committee who despite having left us still thinks of us from time to time, and she's one of the originators of the notion of an Affordable Housing Trust Fund.

Mr. Chairman, I yield 1\1/2\ minutes to the gentlewoman from Ohio (Ms. Kaptur), another dedicated advocate for housing in many capacities.

All the people of Ohio are welcome. How much time do I have remaining, Mr. Chairman?

Mr. Chairman, I would take it to say that we often focus on what we disagree on. Let's be clear.

We agree on the strongest regulator that you could possibly have and still be workable. The gentleman from Louisiana is here, he was one of those who started on it; the gentleman from Ohio who has left, Mr. Oxley. Many of us worked on this. We will be arguing about the housing fund.

But let's be clear that what this House will be doing overwhelmingly is create a strong regulator. As to the affordable housing fund, I would just say this, the notion that all of this comes out of the mortgages and not out of the shareholders is bad economics. Fannie and Freddie do not have monopoly power such that they can pass on every cost to the customer and absorb none of it themselves.

Mr. Chairman, I ask unanimous consent that the bill be printed in the Record and open to amendment at any point.

I thank the gentleman. First of all, let me say, given that our staffs have worked this out, it would be a good thing for neither one of us to mess it up. I have read it over. It does correctly reinforce the point this is not creating any new governmental involvement. We don't want anyone to misinterpret this.

This is not to increase regulation, not to increase any kind of entitlement or entanglement. I thank the gentleman for this initiative. I very much agree this ought to go on the Record as something that is universally agreed to in the Congress.

Mr. Chairman, I move to strike the requisite number of words.

I appreciate the gentleman for offering this. This is the central question we will be debating today, and I realize we are going to be debating it in a number of forums, I hope not all 17 that are offered, but several.

There was a legitimate question here. I have to say I do want to defend my friend, the gentleman from Alabama, from my friend, the gentleman from California, who said that anybody who would support such an idea is advocating socialism. I do not think the gentleman from Alabama was advocating socialism when he joined 208 other Republicans in voting for the Housing Trust Fund 2 years ago. I think that's a little bit excessive.

We have, I think, some economic disputes here. First of all, the notion that all of this money, $500 million, roughly 5 percent of the profits of the two institutions together, the notion that all of it will be passed along to the people who take out the mortgages, the banks and everybody else, incorrectly assumes that Fannie Mae and Freddie Mac have a degree of pricing power that virtually allows them to set prices however they wish.

In fact, there was a time when they had a very large share of the market, and might have had such monopoly power. They no longer do. There is economic competition. Fannie Mae and Freddie Mac are not the only games in town. The notion that this will all get passed along and none of it go to the shareholders is faulty economics.

In fact, this will come out of the profits of these institutions, and it will, I believe, reduce the return of the shareholders. Now, I think that's legitimate. These are institutions that receive significant benefits because of various Federal laws and the way those laws are interpreted by the market.

We say that they shouldn't keep all of the benefits. By the way, those who believe this ought not just to be opposing the Affordable Housing Fund. We have long had goals of, affordable housing goals, which dictate to Fannie Mae and Freddie Mac that they must buy certain kinds of loans rather than others. We have got that to the point where they have to give preference to people whose incomes are at 80 percent and medium and below. That also impinges upon the profitability of Fannie Mae.

In other words, the argument is that anything that impinges on the argument of Fannie and Freddie will automatically be passed along to the home buyers. I think that's faulty economics. But if you think that's true, then why are you supporting, I would ask the Members on the other side, the housing goals.

Why would Members be voting for the amendment offered by the gentleman from New Jersey, which would severely restrict the portfolio? Eighty-five percent of the profits of Fannie Mae are being made on the portfolio. Now many on the administration and many on the other side want to severely restrict the portfolio, reduce it or say they can only be used for the lowest income mortgages.

That amendment, which many on the other side apparently plan to vote for, would have a far more serious impact on the profitability of Fannie Mae and Freddie Mac than on this housing fund by 8, 10 times as much. It is simply inconsistent to argue that you cannot impinge on the profitability of Fannie Mae and Freddie Mac without hurting the average mortgage buyer, and then

be for this much more significant impact on the profitability, and the economics are the same.

The argument is no direct pass-through here. The argument is that if you impinge on that profitability, they will raise their prices. First of all, the answer is, of course, they wish. They wish they had that kind of pricing power. I don't think they do.

To the extent that there is some impact, it will be far more greatly achieved if the amendment were to be adopted by the gentleman from New Jersey and other efforts to restrict the portfolio.

The gentleman from Alabama also said we have all these other housing programs. No. We do not have enough programs currently being funded that build affordable housing for families. We have 202 for the elderly. We have 811 for the disabled, both of which the administration has tried to cut back.

We are not building public housing. We have the voucher program. The voucher program, on an annual basis, adds to the demand for housing in a way that does not increase supply. There is not now a generally funded affordable housing construction program for families, for working people.

So the notion, and I would challenge Members who say there is duplication, show me which program this duplicates. It doesn't restrict it to the elderly and the disabled. It is a general family affordable housing program. That's what we think we should get into. It does it without taking money from the general Treasury. It pays for itself.

Finally, people have said, well, how is it going to be spent? We made this point very clear.

In the first year, it will go to Mississippi and Louisiana State authorities. Subsequently, none of it will be spent until a second bill passes this House and the Senate, and we will collectively decide how to spend it. I know there are people who think the Federal Government should provide affordable housing. That's the only argument for this amendment.

Would the gentleman yield?

I said it would come from the shareholders. I didn't say it wouldn't come from Fannie Mae or Freddie Mac.

Yes.

Mr. Chairman, parliamentary inquiry.

Do we not go back and forth between the parties in recognition?

Without regard to party? The gentleman from Colorado is a member of the committee.

I unfortunately have to again correct the ranking member. There was no money for affordable housing construction of any significance for Katrina affected areas.

The gentleman from Alabama incorrectly stated that we already voted $3 billion for Katrina. In the bill that we passed for the hurricane, there was one proposal for project-based section 8 that could help build 4,500 units. There was no other money in that bill for housing construction. Members will go back and read the debate, and they will see it was always contemplated by those of us for the bill that would be accompanied by this bill.

The assertion that this duplicates money voted for housing construction in Katrina has zero accuracy. This was always contemplated to be the second bill.

Additionally, the gentleman said I said the money wouldn't come from anywhere. No, quite to the contrary. I said several times in this hearing that it would come from the shareholders. I do not believe that Fannie and Freddie have monopoly pricing power that allows them simply to pass along every cost. Beyond that, I did note know that there were other positions being taken that would reduce the portfolio of Fannie and Freddie that would have far more impact on the profitability than the housing fund.

So those who believe that when you impact Fannie and Freddie's profitability you raise the cost of mortgages, they should not be for any other reductions in the housing fund.

I thank the gentleman from Colorado and I return his time to him.

Mr. Chairman, will the gentleman yield?

I wouldn't accept such an amendment because it would be impossible to enforce the economics of what's involved, to the extent that an entity has pricing power, monopoly pricing power or duopoly that can pass along the costs.

I would just note that the gentleman from New Jersey has an amendment that would have a far more significant negative impact on the profitability of these institutions than this bill.

Mr. Chairman, will the gentleman yield?

I am disappointed in the gentleman's naive economics. No, you cannot by statute affect this economic question.

My point is that is a measure of where the pricing power is, and it is impossible to sort out where it comes from when you are talking about profits. A corporation will maximize profit. One of the restraints on that will be competition.

My belief is that there is sufficient competition in this field so their ability to put all the costs on the customers and not have much on the company shareholders is far less than the gentleman from New Jersey thinks. That is not something you do by statute, as in every other context he would recognize.

Mr. Chairman, will the gentleman yield?

Mr. Chairman, I thank the gentleman for yielding.

I want to express my support for this. We have talked to Members on the other side. My understanding, this is one of nine that was going to be agreed to.

The gentleman from Pennsylvania has been one of the leading Members of the House in insisting on the public functioning of this board and the members, and this is another chapter in the book he is writing about how to protect the input here from citizens. So I strongly hope that the amendment is adopted. It is my understanding that it was acceptable on the Republican side as well.

Mr. Chairman, I move to strike the last word.

Mr. Chairman, this is another effort to try to kill the fund, this time by obfuscation.

We have tried to work out some agreement. There are about 11 different amendments that try to do the same thing. Members should just be ready to be here all night and maybe until Tuesday or come back on Tuesday.

I understand the objections to the fund. What I don't understand is why Members wouldn't be willing to accept two, maybe three chances to defeat it.

Now, with regard to the economics, first of all, there is this myth that we have said it's not coming from anywhere. We do believe that it will come primarily from the shareholders.

By the way, in earlier debates on this, some of the opponents of the bill said the same thing. If you go back and look at the transcripts of our committee, although I can't understand why anybody would want to do that, you will find people saying we were unfairly levying on the shareholders. That didn't work.

There are people who do not believe that the Federal Government should be encouraging the construction of affordable housing, and understand that however we propose to do it, they will object to it. If we try to do it through appropriations, that will be a problem because of the deficit. Here we try to do it by taking, we believe, essentially from the profits of Fannie Mae and Freddie Mac.

Now, as to the legitimacy of their concern, I will repeat, and the gentleman from New Jersey seemed annoyed when I mentioned it, he has an amendment that, by making restrictions on the portfolio of Fannie Mae and Freddie Mac, their main profit generators, would hit their profits far more than anything you could conceivably attribute to this amendment. So it would have, if you believe that this is going to hurt the borrowers, a much more negative effect.

I heard the gentleman from Texas say this is a government-sanctioned duopoly. At one point it might have been. In fact, today, the securitization

market is far more competitive. It's not atomistic, but there are states, economic states, between duopoly and atomic, and this is where we are here. There are significant private competitors to Fannie Mae and Freddie Mac. You will know that because some Members, Mr. Chairman, have heard from them who don't like what we are doing here. And we believe that the primary burden here will come from the shareholders. The notion that Fannie Mae and Freddie Mac can raise prices at will does not seem to me to reflect economic reality.

Now, the gentleman from New Jersey said why don't you pass a statute saying that? That is the naivete of economics. You can't pass a law that says economic reality shall be X or Y or Z. There is an interplay among various forces. We do believe that the great bulk of this will come from the shareholders.

By the way, it amounts to 5 percent of the profit. Other amendments would restrict the profit by far more. And if people legitimately believe that any restriction on the profit was going to hurt the mortgage borrowers, then they wouldn't be offering those other amendments.

There is a common thread here. They don't think the Federal Government should help build affordable housing. We strongly disagree with that. We believe that the Federal Government should. The calculation that is being asked to be made here is a very difficult one to make.

The gentleman prides himself on his economic expertise that he learned some time ago. I don't know where he learned that you could easily make this kind of calculation. There will be legitimate debate.

And by the way, what he does say here is that if at any point it turns out that there is an impact, you know, things can happen slow, the competitive situation can be more or less, a lot of factors will affect this. If at any point it happens, then the fund is permanently shut down. You will note that he strikes the word ``temporarily.'' This is an effort, once again, to kill the fund.

Not yet.

I understand people who don't like it. And by the way, I would note again, not the gentleman from Texas, but 209 Republicans in October 2005 voted for legislation that included exactly this sort of fund. Some of us voted against it because of a provision that is not now in this bill that would have kept the Catholic Church and others in the religious field from building housing. But I don't understand why, if it's so terrible today, it wasn't then.

Mr. Chairman, now I will yield to the gentleman.

I'm sorry, I didn't hear what you said.

I thank the gentleman, and I understand that. And that's clearly what's involved here. And we will hear four or five different ways to do it.

Let me just say this; this has now become a late night TV commercial, it might be a late night debate. It will slice, it will dice, it will cut. We are going to see the magic nine cut knife as a way to kill the Affordable Housing Program. And we will have everybody but a TV pitchman demonstrating it. And maybe he will throw in a few Ginsu knives as well to knock off a couple other programs, but this is simply one more assault out of many that we will hear today on affordable housing.

Well, in the first place, the universe is not exhausted by the borrowers and the shareholders. There are banks involved. There are many other people in the transaction. And yes, I think there will be various distributions, of course, and it will differ at different times and different economic circumstances, depending on the competitive situation.

I believe that it is possible in some circumstances a very small percentage of the 5 percent might go on to the mortgages. It is likely to be de minimis. And the answer is it doesn't come just from the shareholders, it comes from the banks, from the mortgage brokers----

I'm sorry for trying to answer the question.

Mr. Chairman, I am impressed with the precision and exactitude of my friend from Texas. I am actually used to Texans talking slower. I appreciate my friend getting to the point so quickly, and I apologize for my not being there.

It is a very good amendment and I think has been agreed to by both sides.

The gentleman from Texas has been a strong proponent of housing counseling. We all agree that if we had had more of that earlier, we might have less of a problem than we have today. He has been very strong on the questions of literacy. So I very much appreciate this amendment and hope it is adopted.

Thank you, Mr. Chairman. Not elegant, but effective. I hope the amendment is adopted.

The gentleman from Louisiana has consistently been one of the most constructive Members in this regard. Some of us were not as tuned in as we should have been earlier, and I appreciate that.

I differ with him somewhat in emphasis here because I do think if there were to be any of the threats that he very lucidly and cogently outlines, they would have to involve a threat to the safety and soundness of Freddie and Fannie. That is, I have a metaphor problem. I don't see Freddie and Fannie as pulling down the temple without getting a couple of rocks in their own head. But I do understand it is a matter of concern.

Let me also add, I have some uneasiness because I have worked very closely, and all of us here have been the beneficiary of the very thoughtful approach of Secretary of the Treasury Paulson and Under Secretary Steel. We have come to some agreements.

Mr. Chairman, I move to strike the last word.

As I was saying, Secretary Paulson and Under Secretary Steel made it possible for us to come to agreement.

I would like to say to Mr. Baker, as he looks and as I look at who has come there, and I think some statements were made that shouldn't have been made that made people nervous. I want to give my friend from Louisiana and others the assurance, Mr. Chairman, that assuming this wins, and it looks likely to, I don't consider it to be the last word on the subject. I think the concerns he has talked about are legitimate.

We are going to have a bill from the other body, and we will get to a conference. I want to promise that I plan to continue to work with the gentleman from Louisiana, as well as the ranking members on the other side, the Secretary of the Treasury. We win here and we are going there. Maybe we have to move back a little bit. I understand where this comes from.

I agree with him that I don't think there is a point now in trying to fight it here, but I do want to acknowledge that I don't consider it a solely settled issue, and I am hoping that we will find some way to accommodate the very legitimate concerns that he has as we go further.

I yield to the gentleman from Louisiana.

Let me say, I appreciate that. The Treasury has chosen well in having you do it. I just want to give you my commitment that we will continue to work on this issue.

Mr. Chairman, as the designee of the Members I am about to name, I ask unanimous consent that the following amendments be considered en bloc: No. 2 from Ms. Eddie Bernice Johnson of Texas with a modification which is at the desk; No. 3 from Mr. Boozman; No. 6 from Mr. Terry; No. 7 from Mr. Donnelly; No. 11 from Mr. Blunt; No. 20 from Mr. McCaul of Texas; and No. 31 from Mr. Baker.

I ask further that the debate on the amendment en bloc and any amendment thereto be limited to 20 minutes, equally divided and controlled by the majority and minority.

I am proud to report that I am the designee of all these people. I have rarely been so popular.

Mr. Chairman, I yield 2 minutes to one of the authors, the gentlewoman from Texas (Ms. Eddie Bernice Johnson).

Mr. Chairman, first I yield myself 30 seconds to thank the gentleman from Arkansas.

There are actually four amendments trying to achieve the same purpose. I must say I thought his did it in the best possible way, leaving flexibility. There may be legislation adopted. I am hoping this may save us some time later, but I do want to say we completely agree.

Let's be clear now, with the adoption of this amendment, no one will be able to benefit from the Affordable Housing Fund who cannot demonstrate that he or she is legally in this country. I think that was very helpful. I'm glad that it's going to go through unanimously, and I thank the gentleman from Arkansas for the straightforward way in which he did it.

Mr. Chairman, I believe there are no Members left on our side who need to be recognized, so I reserve the balance of my time.

Mr. Chairman, will the gentleman yield?

I thank the gentleman. I really appreciate his offering this amendment. As I said, I understand there will be some philosophical differences over the existence of the fund, but it certainly is incumbent upon us to make sure that that's all we're debating, not whether it would be misused or abused.

We tried to deal with that. You never anticipate everything, and the gentleman's amendment is a very good addition of the kind of safeguards we want so that we can be debating the real issue and not other things, and so I am grateful that you're offering it.

Mr. Chairman, I yield 2 minutes to the gentleman from Indiana (Mr. Donnelly).

Mr. Chairman, I yield 1\1/2\ minutes to the gentleman from Florida (Mr. Feeney).

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

Mr. Chairman, I yield myself 2 minutes. I don't see other sponsors.

Just to say, in the absence of the minority, I don't mean to be presumptuous and others may want to speak as well, but one of the amendments we're adopting was offered by the gentleman from Missouri, the minority whip, to require that any assistance provided in the fund from the National Affordable Housing Trust Fund be considered a Federal award for the purposes of the Federal Funding Accountability and Transparency Act, full disclosure, et cetera.

I appreciate, once again, the gentleman from Missouri offering this. I have heard the gentleman from Texas' amendment. These are two safeguards that we neglected to put in.

What it makes clear is that while this is not going to be Federal funding, it will be treated, since it comes from this Federal enactment, with all of the safeguards that would apply if it were Federal funds. And I think the whip has done a very good job in doing this. He's picked up an existing set of rules, and this is one more example I think of the extent to which, and I know this doesn't do away with all the controversies, but it does allow us to argue, as I said, on a philosophical basis.

So I just want to acknowledge my appreciation to the whip for coming up with this, and I'm glad we're able to adopt it.

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

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

Mr. Chairman, I fully agree with my friend from North Carolina.

I rise only on one specific factual point. The gentleman from North Carolina said this would levy 1.2 basis points on the mortgages. That's in lieu of a profit. The Treasury asked us to change it.

The gentleman from North Carolina said 1.2 basis points. That's equivalent to a 1.2 percent tax. No, that's 100 times wrong. A basis point is one one-hundredth of 1 percent. So 1.2 basis points is not 1.2 percent as the gentleman said, but .012 percent.

Mr. Chairman, I rise to oppose the amendment.

Sometimes I am more impressed with the gentleman's work product than others. He just made a misstatement of his own amendment, if I have the right amendment. He says, instead of putting it in the Affordable Housing Fund, put it into Social Security.

Nothing in this amendment does that. This amendment says that if there is a deficit in the Federal budget, then you don't put the money from Fannie Mae and Freddie Mac into the Affordable Housing Fund. It does not say you put it anywhere else. It is unrelated. It simply says that if you don't have enough money to meet the deficit, then you don't take money that would not otherwise go to the deficit.

There is no connection between the money being spent from Fannie Mae and Freddie Mac. This one is scored at zero by CBO; so, not spending the Affordable Housing Fund would in no way reduce the deficit.

I would yield to the gentleman if he would show me where in his amendment it says that, if we don't spend on affordable housing, we would put it into reducing the deficit. I am reading the amendment. There is nothing like that in here. I yield to the gentleman.

No. I am yielding for the purpose of a question. Answer the question. The gentleman said, the choice is to either put it into affordable housing or put it into the deficit. It doesn't go into the deficit now. It is Fannie Mae and Freddie Mac profit. Nothing in his amendment that I read would put it into the deficit.

Would he please explain to me what his statement meant and how it is accurate, and I will yield for that purpose.

I understand that. That is a definition of the deficit. Good for the gentleman. But it does not put any money into the deficit. The gentleman said that if we passed his amendment, we would be choosing to put the money, instead of into affordable housing, into helping Social Security. The amendment doesn't say that.

I will yield if the gentleman will give me an answer to the question. Reading his amendment doesn't get to the question. How does your amendment transfer money into Social Security?

No.

I will yield, it is a two-step dance. Is the gentleman asking me to dance?

I take back my time. The gentleman has now acknowledged that his statement was not accurate. The gentleman has now acknowledged that nothing in his amendment does anything about the deficit. He says it is a two-step dance. It is a Kabuki dance. It is a Dance of Seven Veils. It has got an unrepresentative argument here.

Nothing in this puts the money into Social Security. There is nothing in here that would do that. What it says is, let's not put any money into affordable housing from Fannie Mae and Freddie Mac if there is a deficit.

Frankly, the gentleman did not, it seems to me, clearly represent his amendment. He says it is a two-step dance. Is he proposing that we would then take the money from Fannie Mae and Freddie Mac, the 1.2 basis points, not 1.2 percent, and put that into the Social Security Trust Fund? He has now acknowledged that nothing in his amendment would help Social Security. I guess we will learn later what is the second step of the dance.

I am kind of older; I used to watch Arthur and Kathryn Murray teach dance, but I don't think even they could have taught us how this is going to spin into putting money into Social Security. So this amendment is a perfect definition of a non sequitur.

I yield to the gentleman from North Carolina.

That is a far more plausible explanation than we have got.

Does the gentleman want me to yield?

I take back my time. That is absolutely untrue. I have never asked people to trust me. If he is talking about spending affordable housing later, what I have said is it will be spent in accordance with a bill to be passed by the Congress. That is not trusting me.

And I have never said that one thing was going to accomplish the other. We have said we would set some money aside and later decide how to spend it. It doesn't do that here. It leaves the money with Fannie Mae and Freddie Mac. This isn't public money. It is a non sequitur. I repeat.

It says we have a deficit in Social Security. That is too bad. Let's keep fighting the war in Iraq for hundreds of billions of dollars, let's keep doing all these other things, but let's not take money from Fannie Mae and Freddie Mac that would not otherwise contribute a penny to Social Security and spend it on affordable housing.

Mr. Chairman, will the gentleman yield?

I decline to take up the time of the House at this late date.

Mr. Chairman, I'm disappointed in the gentleman from Illinois, having yielded to him, refused the same courtesy. It's my time, the gentleman from Georgia's time.

I never asked anyone to trust me. He repeats that. It is simply inaccurate.

I've said that I thought we should set some money aside for low income housing, a specific purpose, low income housing, and then in a later bill, not me personally, but the Congress, decide how best to disburse it. That is hardly saying trust me and I'm disappointed. The gentleman generally it seems to me is fairer than that.

Secondly, he says higher priority. Again, this is fantasyland. Nothing in his amendment does a penny for Social Security. And he says temporarily suspend. Hit the pause button until the deficit is over.

Let's be very straightforward. That means kill it forever. There's no pause here. No one is assuming that the deficit is going to be ended within the next 7 or 8 years, so the argument that the gentleman makes that it is more important to do Social Security trust fund than the housing fund is irrelevant because nothing, nothing in the gentleman's amendment puts a penny into the Social Security. It's one more way to kill the affordable housing fund reflecting an ideological opposition to the existence of the Federal Government helping build affordable housing.

Will the gentleman yield?

I thank the gentleman. Will he explain to me what in the world that has to do with an amendment that does not provide a penny for Social Security?

Mr. Chairman, will the gentleman yield?

Mr. Chairman, that, I must say, totally disappoints me. For the third time the gentleman has tried to put words in my mouth. The words ``trust in me,'' the gentleman read that, and the gentleman's distortion, systematic distortion, has gone beyond what I can deal with in a brief intervention. But I will say this: I continually said we should address that in separate legislation. If the gentleman doesn't know the difference between passing legislation which sets guidelines and saying ``trust me,'' then the gentleman understands less in this place than I had hoped he did.

Mr. Chairman, the gentleman from Illinois apparently misremembered something. He looked diligently to try to find what he said, and he couldn't find what he imputed to me. I never said ``trust in me.'' I didn't imply it. His subtext notion makes as little sense as his argument that we are going to somehow help Social Security in an amendment that doesn't touch Social Security.

What I said repeatedly was I want to reserve this now because I think this bill will not be vetoed and we will get the reservation, and for budgetary purposes, CBO scoring, it is a better way to do it, and we will then pass a separate piece of legislation. And his equation of my calling for a separate piece of legislation with my saying ``trust in me'' falls below the level that I had thought we would debate here.

I would again repeat, the gentleman from Alabama eloquently said let's start now. Let's do this. I want to be very clear, Mr. Chairman. I have never stopped him. The gentleman from Alabama had a new-found passion to help Social Security. Where is his amendment doing that? Where is his legislation doing that? This notion of let's get to Social Security, the central point is: The gentleman from Illinois' amendment does not put one penny into Social Security. Passing it would not help it. It would kill this fund forever.

What we have had is a variety of amendments. This is the fifth one tonight that finds a different way to kill affordable housing. The gentleman from Alabama was straightforward. He said he just wanted to kill it. So this has nothing to do with Social Security. It has to do with killing the Affordable Housing Trust Fund.

And I would just add this, and I thank the gentleman from Colorado for yielding, I find it somewhat ironic that Members who continue to support spending hundreds of billions of dollars on that terrible war in Iraq, which does America more harm than good, lecture me because we are going to spend half a billion dollars a year on Affordable Housing Fund out of nontax funds. Yes, let's do something about Social Security. Let's do something about the war in Iraq. Let's do something about other wasteful programs. But to take $500 million, I didn't see this concern for Social Security when we were doing the defense budget. I didn't see it when we did the authorization earlier today. I didn't see it when we were adding money.

I must be very clear, Mr. Chairman, within the rules, I am unpersuaded that the real motive of Members here is to do anything about Social Security. It is clear if you look at this pattern, they don't like the notion of the Federal Government's helping to build affordable housing, even if we do it, as we have succeeded in finding a way to do it in this bill, in a way that has no impact on the taxpayer, no impact on Social Security, and no negative consequences on the other government programs.

Mr. Chairman, I move to strike the last word.

Mr. Chairman, I do not think we are ready to put this into a nationwide operation at this point. It has a great deal to commend it, and the gentleman is right to talk about pilot projects.

In the Committee on Financial Services we have created a task force, headed by the gentleman from Colorado (Mr. Perlmutter), to look at all housing programs to promote energy efficiency. This is something that we should have looked at a while ago. We have been late. There are some various programs. There are some in public housing. We tried to put some into the FHA. The chairman of the Appropriations subcommittee, my colleague from Massachusetts (Mr. Olver), is interested in doing this, along with the gentleman from California in HOPE VI.

What I think would be best would be if we could defer this now and give it some study. There are some implications for how you carry it. There are some fairly specific calculations. It is one thing when you do it in a pilot project; it is another for Fannie and Freddie to do this nationally. And, of course, they don't do it directly. They do it through their various lenders.

So while I think in concept this is something we should be moving towards, I would hope we could do some further work on it. It is our expectation to bring out an overall housing energy promotion bill sometime this fall, and this would be an ideal candidate for inclusion in that.

I yield to my friend.

I move to strike the last word.

I will yield briefly to my friend from Georgia.

I am going to take back my time.

I will yield to the gentleman at the end.

First, let me say to the gentleman from Louisiana, I agree with him in many ways. Yes, they haven't done enough. I do find a great inconsistency, not on the part of the gentleman from Louisiana, who has been completely consistent on this issue for years, but first, we were being told that we should not interfere with the profitability of Fannie Mae and Freddie Mac because we would be driving up the cost for middle-income homeowners. We heard that in several of the arguments in trying to get rid of the Affordable Housing Fund.

Now we have a much more serious attack on the ability of Fannie Mae and Freddie Mac to help middle-income homeowners. This says no more middle-income homeowners, only people below the median. We were told before that if we took $500 million from Fannie Mae and Freddie Mac's profits each year, we would inevitably be driving up the cost for middle-income borrowers. This would reduce Fannie Mae and Freddie Mac's profits by 7, 8, 10 times that amount. They get most of their profit from things held in the portfolio.

Yes, I will yield.

Mr. Chairman, taking back my time, the gentleman has completely misstated for about the fourth time my arguments.

Regular order, Mr. Chairman. I yielded to the gentleman.

I have said that I do not think it is my intent or anybody else's intent that will override the economics of the situation. I do not think we can legislate that it comes either out of this or out of that. The money is fungible. My view is that in the competitive situation in which they find themselves, much of this will come out of shareholders' profits. Some may come out of the banks and others they deal with.

The point I am making is this: The gentleman and others on the Republican side argue, they were arguing before about a mortgage tax increase. They kept saying we are going to raise the cost of mortgages, not by anything we did directly. Their argument was that when you reduce the profitability of these entities, they will be driven to raise their prices and that will cost other people more.

I believe they are far more constrained in their ability to raise prices. I don't think they are holding prices down now out of love. I think they are getting them up as high as they can now in the competitive situation.

But if you believe that reducing their profits will cause them to increase their prices and thus hurt other people, in this amendment that has a much greater impact of that kind than the housing fund, because this restriction on the portfolio will cause a far greater reduction in the profit than 1.2 basis points. And it again emphasizes to me that what we have are people who don't like the Affordable Housing Fund, because they have had various contradictory ways of trying to get rid of it. Now, the gentleman from Louisiana is correct, they haven't done enough to help low income people.

One of the things we do in this bill is to greatly increase the goals. We impose goals on Fannie Mae and Freddie Mac which also reduce their profitability. We tell them to do more of this kind of thing and we increase the enforcement mechanism for doing it. So we do try to increase the goals in the enforcement mechanism and we create the Affordable Housing Fund.

I would say this: Maybe they shouldn't have created these hybrids in the first place. They are part profit making and part with the public enterprise. It is hard to run them that way, I understand that. That is why many of us decided that we will try to get them in the direction of helping low income people, but given the pull of profit, some of what we should do is to take a piece of the profit and put it directly into affordable housing.

That is why we have a hybrid solution dealing with a hybrid. That is why I hope the amendment is defeated.

Mr. Chairman, I thank the gentlewoman, and I will yield to my friend from New Jersey after I have propounded a question.

My position consistently today has been that it is not possible with absolute specificity to say an enterprise is paying for this out of this pot or that pot or the other pot. I do believe most of this will come from the shareholders.

But people on the other side argue no, reducing the profitability by $500 million a year for both enterprises, levying 1.2 basis points on the portfolio, was going to raise the mortgage rates for the middle class. For people who believe that, I want them to explain to me how reducing the portfolio so substantially would not cost even more to the middle class?

Again, Members said taking $500 million in profit, 1.2 basis points on the portfolio, would raise the rates on the middle class. I assume it doesn't do it specifically. It does it by reducing the profitability and inducing them to raise prices.

Since it would reduce profitability by many multiples of the housing fund, why would it not have a much greater effect?

I yield to the gentleman.

Excuse me, I am taking back my time to apologize for apparently not being clear in my question. I wasn't talking about cross-subsidization. Here is the point. I would have thought it was clearer, and I apologize for my inarticulateness.

The argument was that by taking $500 million from profits, 1.2 basis points on the portfolio, we would be reducing profitability and inducing the enterprises to raise prices and therefore that would be a mortgage tax.

The gentleman's amendment would reduce the profitability by far more than $500 million a year. It would be a far greater levy on them than 1.2 basis points. Now, the mechanism by which they claim that the fund is a mortgage tax is that as you reduce their profitability, they are driven to raise prices and that will cost more.

Now, it has nothing to do with cross-subsidy. Why does an amendment which would substantially reduce the profitability not have an even greater effect in terms of the middle class, who would not be benefiting from the portfolio, in raising what they have to pay?

I just yielded. I said I yield.

I apologize. I would ask the gentlelady to yield.

Please yield.

I do. I hope the Chair is happy.

I apologize. The gentlelady has yielded.

I thank the gentlewoman.

That is not what I said. I said reducing the profitability. I would ask the gentlewoman not to yield any further. We are not going to get an answer. I apologize for starting the whole thing.

Mr. Chairman, will the gentleman yield?

People keep talking about $3 billion for Katrina. There was no housing construction fund in the hurricane bill. If that is meant to be construction, it is simply not the case. We put vouchers into the hurricane bill, but there was not $3 billion in any housing construction in the Katrina bill.

I thank the gentleman for yielding.

There has literally been no Member of the House who has been more dedicated to helping those who are in trouble than the gentleman from Texas. He represents a community that is a model community: Houston.

We don't always show neighborliness in reaching out to others. The city of Houston, its mayor, its congressional delegation, its citizens, its police department, has known an extraordinary degree of compassion for fellow human beings in trouble. There are few examples in this country's history of one community reaching out as generously as the people of Houston have to the people who were forced to evacuate the gulf, particularly Louisiana.

The gentlewoman from California and I listened to the gentleman from Texas, and we put some language into the bill that we did last time on the hurricane.

On this one, at this point I would ask the gentleman to withdraw his amendment. We appreciate what has gone on. The destruction was greater in Mississippi and Louisiana. There are still unmet needs in Texas. We appreciate that. We have done something, and I acknowledge we have not done enough.

I promise the gentleman, we will continue to work with him to that end, but we have commitments in terms of the physical reconstruction to go to these two States.

There will be further years in this bill. Texas continues, particularly Houston, to have a big claim on us, and we will continue to try to work with the gentleman to try to resolve it, but we hope not to do it in a kind of zero-sum situation.

Mr. Chairman, I move to strike the last word just to acknowledge the graciousness of the gentleman from Texas.

We will continue to work with him. Houston is entitled to more help and it will get it. The only thing, I want to be partially modest. He said I have the least, the last and the lost. I have tried hard tonight to help the least and the last. But in my debates with the other side, I haven't been able to make much of an impression on the lost.

Announcement by the Acting Chairman

Parliamentary inquiry, Mr. Chairman.

The subsequent votes, do I understand correctly, will be 2-minute votes, Mr. Chairman?

Will the gentleman yield?

I wish the gentleman would have said that last sentence a little less assertively.

Mr. Chairman, I move to strike the last word.

Mr. Chairman, the author of the amendment clearly indicates he would like to kill the housing fund altogether. He voted to do that in several

ways. We had several votes to do that. We're going to have about 10 votes on the same issue on this bill. I don't know, there's seven different ways to kill your lover. We have about 11 different ways to try to kill the affordable housing fund. Some of them contradict each other because they are joined only by the common opposition to the Federal Government constructing affordable housing. This bill continues that, this amendment, because the key change it makes is to strike the provision that says it will be used for the construction of affordable rental housing and says only vouchers. Now, the vouchers are useful as part of a balanced program. But the vouchers now have been, under the Republicans policy, annual vouchers. We haven't been able to change that yet. Maybe we will.

Yes.

I will be glad to read to the gentleman his amendment, or at least the one that I have. Is this No. 16?

When did we get unanimous consent to modify? I don't remember hearing that request. Parliamentary inquiry.

Well, I will then take back my time. The gentleman chides me apparently for telling the truth. I have the amendment as printed. I am reading the amendment. He says where in it is the voucher program? Here on page 2 on lines 2, 3 and 4. And it's not very arcane. Let me read it. Affordable housing fund grant amounts of a grantee for any year after 2007 shall be eligible for use or for commitment for use only for rental housing voucher assistance in accordance with paragraph 19.

Now, I apologize to the gentleman for reading his amendment. I had previously to apologize to the gentleman from Illinois for reading his amendment. The gentleman corrected me incorrectly. I would like to go on and correct his incorrect correction before I again yield. The gentleman's purpose may be confusing to people, but I just want to be clear.

I do not yield for the purposes of a parliamentary inquiry. Parliamentary inquiries are only done after the holder of the floor yields. And the fact is that I do want to make it clear I am reading the gentleman's amendment. It says only for vouchers, and that's why I said that. Now I will be glad to yield to him.

I object.

Yes.

I take back my time. I've yielded to the gentleman for varying explanations of his varying amendments. But I want to talk about the one we have. First of all, I do not give consent because we had a pre-filing deadline precisely so that we can study these things. They are somewhat complicated. I think having them come right off the top of people's heads, particularly at 10 o'clock at night, after we've debated the same issue about seven times, it's not a good idea to come up with something brand new.

Here's the amendment. It says only vouchers, and it says it in several places, that it's for vouchers. And here's the problem with vouchers. He says it's still better than constructing housing. No, it is not, because a voucher program helps you compete for existing rental housing. But an annual voucher program, which is referenced in this bill, in this amendment, does not give you the ability to build new housing.

In parts of this country there is a housing shortage, that's a problem. In the gulf it's a problem because the housing was destroyed. So when you only do vouchers and do not help build affordable housing, you run into that problem.

Now, under our proposal, communities would have the ability to make choices. But what the gentleman says is in parts of the country where there is already a shortage of physical affordable housing, all his amendment would do would be to drive up the price by increasing the demand for it without in any way adding to the supply.

Now the gentleman's apparently acknowledged the flaws in the amendment by trying to modify it after he had previously submitted it. I don't believe this kind of last minute changes ought to be made at this point. And so we are left with the flawed amendment.

I understand the gentleman's desire to kind of disown it. But the fact is, it is what it is. And a voucher-only program does not add to affordable housing supply and that's what we need.

Yes, it is. And here's the point. And if the gentleman would yield to me. I do not think, and it says, disabled homeless veterans. I would agree between now and when we get to conference to give a first preference to disabled homeless veterans. I have two problems with this amendment. First of all, it is not clear that there are that many disabled homeless veterans to absorb 800 million a year. If there are you could deal with it.

But secondly, I do not think in many parts of the country, including my own, that if you only did vouchers you would be doing enough for them. I'd like to build some housing, some with supportive services. But I will give the gentleman my commitment that in the final bill we should be giving a very high preference to disabled homeless veterans.

And the localities will have the ability to do it by voucher or by construction, including, as the gentleman well understands from his work, maybe places that have supportive housing as part of it. That would be an eligible use.

Mr. Chairman, I move to strike the last word.

I also want to strike a few misconceptions. First, the gentleman quite inaccurately said that the money here is authorized with no direction about how it is spent. The only money that will be spent if the bill becomes law, unless there is further action by the Congress of the United States, is the money that will go to Mississippi and Alabama, and the bill is quite clear that that will go to the States of Mississippi and Alabama. No further expenditures will be authorized until a second bill goes forward describing how they will be done. So the bill does describe how they will be done for Mississippi and Alabama. And, yes, there will be a second bill that will, we believe, describe how this money will be spent.

Secondly, he said we are reaching down to corporations like Exxon and taking their money. Well, Fannie Mae and Freddie Mac are very different than other corporations. They are federally chartered and have very specific Federal advantages. So, no, there is not an analogy between directing them and, in fact, other corporations, as was recognized, for instance, by Secretary Jackson of HUD as he began to criticize them for not doing enough in their affordable housing goals.

But the more important issue I have to say, Mr. Chairman, is I am somewhat puzzled by the, I don't know if it's a clash of egos or what, the inability of people on the other side to coordinate.

There were four separate amendments that seek to do exactly the same thing. Yes, we agree; people who are in the country illegally should not be the beneficiaries of this program. In fact, we accepted the amendment offered by the gentleman from Arkansas (Mr. Boozman) who says that very clearly. It does say that you can't be here unless you are here legally, and says that the director shall issue requirements calling for sufficient evidence to show that. Now, one difference between that amendment and this one is this one gets people back into the controversy over the REAL ID Act. That was controversial when passed. A number of States, governors and legislatures have expressed disagreement.

Now, we already have accepted into the bill the amendment of the gentleman from Arkansas to deal with the question of keeping out people who are here illegally. Three other amendments, I guess people all want to get credit for the same thing, but one of the things they do is to get into the REAL ID Act.

So Members should understand that in voting for this amendment, you will be going beyond simply keeping people out of this program who are here illegally; we've already accepted an amendment directing that that be done. Instead, you will be getting the privilege of getting back into the controversy of the REAL ID Act. If you come from a State where that's not popular, then you get a chance to vote for it unnecessarily, since we already have the restriction.

Mr. Chairman, I will now yield to the gentleman from New Mexico.

Mr. Chairman, I will take back my time to say yes, that's true. That is why the gentleman from Arkansas' amendment, which was adopted, sets forward the requirements.

This does mention the REAL ID Act. It is an affirmation of the REAL ID Act. It doesn't say it's the only way. But Members should understand, in adding this to what we have already accepted from the gentleman from Arkansas, what Members will be doing will be getting a chance to, once again, tell their State they may have a problem. Yes, we like the REAL ID Act and you've got to stick with the REAL ID Act. I don't understand why Members would want to reintroduce that controversy when we already have accepted an amendment that says there shall not be anybody in here who is not here legally. And it says, ``Regulations, as the director shall issue, setting forth requirements for sufficient evidence that they are lawfully present in the United States.''

So we have an amendment that has been accepted that will be part of the bill if it becomes law that says you must, according to the director, be able to show, the gentleman said there are various ways to do it. Now, this bill gets more specific and it gives some examples, including, they said, the REAL ID Act. And I don't think all the Members are eager once again to take a position about the REAL ID Act in the face of a lot of opposition from governors and legislatures when exactly the same purpose has been identified here.

You know, people used a cliche before, everybody's entitled to his own opinion, but everybody's not entitled to his own facts. But I guess on the Republican side, the rule is everybody is entitled to his own amendment on a popular issue, because we have four identically on this. We had 11 on the fund. We have six on something else.

Now, far be it from me to try to get them to coordinate, but we're going to be here for a couple more hours mostly debating amendments that were offered by people on the same subject of a previous amendment, some of which were offered because somebody didn't get the credit for it. So maybe this isn't the REAL ID Act, it's the ``Real- Credit-For-Me Act.'' And we already have in the bill, as I said, an amendment that accomplishes this purpose.

Will the gentleman yield for 30 seconds?

Will the gentleman from Texas yield to me?

Yes, I do agree that it should only be-- the gentleman didn't mean citizens, because it means citizens or lawful immigrants. Yes, I agree. That is why I supported the amendment from the gentleman from Arkansas.

I would say the other language that the gentleman from Georgia was talking about does not have this direction. It directs the director to require sufficient evidence that they are lawfully present in the United States. Yes, I do think some flexibility is there.

And while the gentleman from Georgia wants to back away from the REAL ID Act, if you vote for his amendment, you are once again reaffirming the REAL ID Act and saying only drivers licenses from those States are good, and it specifically gives very great prominence to the REAL ID Act, as opposed to telling the director, with some flexibility as things change, to accomplish the same goal.

Will the gentleman yield?

No. I did not say that, never have. But I have said that there are a number of links, and everybody except the gentleman from New Mexico, apparently agrees that government-sponsored, enterprises, we do many things to them that we wouldn't do to a purely private corporation. They have a line of credit, they have a supervisory board. There is no OFEHO for private corporations. So, no; we treat them very differently, because they continue to be linked to the government, than other corporations in a variety of ways, including giving them housing goals, having OFEHO set up, giving them a line of credit and doing other things. They are subject to many more restrictions than a purely private corporation.

Mr. Chairman, I move of to strike the last word.

I have heard the pejorative ``anti-American'' used in some ludicrous contexts, and I think I have seen now the champion application of that inappropriately.

If you are not for a complicated amendment, adding some language to a disclosure that is somewhat controversial, you are anti-American. I hope the debate bounces up from here.

I would then also say to the gentleman from Georgia, my colleague from Georgia quite correctly pointed out that his amendment would call on people to reaffirm the value of the REAL ID Act. And it is true that the REAL ID Act is only one of four things, but some Americans don't have passports. In fact, the majority of American citizens don't have passports.

A Social Security card with a photo ID issued by the Federal Government, some people don't have that.

And a certificate from the Department of Homeland Security Immigration, if you are a regular American citizen, you don't have that. So of the things people would have of those four, that would be the most common. We don't prescribe it in the amendment adopted by the gentleman from Arkansas. We leave it up to the director because things may change. Things may evolve. There may be new documents. Prescribing this now for 4 and 5 years from now seems to be an error. But it is true, the gentleman from Georgia does give Members a chance to vote once again in favor of the REAL ID Act, as a major, not as an exclusive, but a major premise here.

As to the gentleman from Texas' amendment, I note that he makes a point of saying that the cost of the disclosure will be paid for by the housing fund. He also believes that the housing fund comes at the cost of the mortgage borrowers. I don't understand why with this great flourish he says, hey, we'll make the housing fund pay for this because by his reasoning, that is an additional amount for the mortgage borrowers.

If the existence of the housing fund costs them money, adding to the housing fund simply would add to their costs.

My objection to it is this. It is a complicated, additional calculation of a sum that is de minimus. Even if all of

the cost of the housing fund went to individual mortgages, we are talking about a very small, 1.2 basis points of the portfolio. In fact, I believe most of it won't come from the mortgage holder, it will come from the shareholders. It is a complicated calculation. People will differ about how to make it.

So this notion that if it is going to be a real calculation, and if it is just plucked out of the air it is some pro rata thing and it doesn't mean anything, but to impose additional bureaucracy for a cost that is de minimus is a mistake.

That is why my friend from North Carolina said this is part of the ``we don't like the housing trust fund.''

And by the way, when the gentleman said a housing trust fund created by the Democrats, we were being given too much credit; 43 Republicans joined us in voting against the amendment of the gentleman from Alabama to kill the housing trust fund. So it wasn't just Democrats; 43 Republicans is a pretty significant chunk. It was somewhat bipartisan.

But the point is only if you believe the housing trust fund is going to be some significant cost does it make sense to go through all of this trouble to add this line.

We who believe it is will be de minimus in terms of how it affects each mortgagor, think it will probably cost them more to do this calculation and charge them for it than they would otherwise have to pay.

I yield to the gentleman from Texas (Mr. Sessions).

Reclaiming my time, reclaiming my time, first of all, to say that is the most baffling thing I have ever had said. It is going to take me a while to figure out what it could possibly mean, if anything.

But secondly, with regard to executive compensation, of course the shareholders would bear the cost if there was one. Our point there was since the SEC has mandated the disclosure and mandated the disclosure be printed in the proxy, there will be no cost to voting on it.

Mr. Chairman, I move to strike the requisite number of words.

My problem with the answer the gentleman from Texas gave my friend from North Carolina is he voted for the amendment from the gentleman from Alabama to kill this fund before he knew whether his amendment would be accepted or not.

The gentleman says he doesn't know anybody in this body who would turn his back on communities. He has a far more limited circle of acquaintances than I would have thought for someone who had been here this long.

The fact, though, is that the amendment from the gentleman from Alabama would have, if it passed, killed the fund. The gentleman from Texas voted for it. Had he been successful in that vote, there would be no fund for him now to ask for.

Now, I thought my friend from Mississippi who has been an eloquent and passionate defender of the interests of all the people in the gulf made a very good point. As I said to the gentleman from Houston, Mr. Green, yes, I think we should look at the needs of Texas. We did some in the hurricane bill in terms of vouchers.

I'm prepared, if this bill gets to conference, to accommodate. We may have underestimated the physical destruction in parts of Texas. I don't think we should now pick a number, but no one had approached me. Mr. Green from Texas had approached me, and I said I would work with him. I would be glad to work on it.

I do think when the gentleman says we couldn't expect him to vote for a housing fund that ignored his community, he voted to abolish that fund before he knew what would happen to his amendment. Maybe he just thought the die was cast, but I'm perfectly prepared to work on this.

I hope the amendment is defeated. I don't expect the gentleman to withdraw it, and I would be glad to then look at the arguments about how much destruction there was in Texas, and I would undertake to find some way to try to help in Texas. Of course, the gentleman will probably vote against the whole bill, and if he succeeds, I won't be able to help him, but you can't help everybody all the time. All you can do is offer.

So I hope that we do get a bill through, that it has the housing fund. I hope this amendment is defeated, but I do think that when we look at the concentrated destruction in the part of Texas, something not statewide, and the reason we did Mississippi and Louisiana was we felt the destruction there was more statewide, not the whole State, but it was fairly widely distributed. It would appear there was a more narrow geographic impact in Texas, and I would think that is worth looking at.

And if the housing fund survives the four or five more Republican efforts to kill it, chop it, dice it and slice it, which are probably coming in their infinite list of amendments, and we do get it to conference, I will be glad to work with the gentleman.

Mr. Chairman, I reserve a point of order.

Will the gentleman yield?

I will cede to Mr. Walden. If only the gentleman will yield to somebody.

Mr. Chairman, I move to strike the last word.

Point of Order

Mr. Chairman, I am going to insist on my point of order.

I am moved, and I mean this, by the eloquence of these arguments for adequately funded public service. I hope all Members will listen to this.

But unfortunately, this is beyond the scope of this bill, which is housing related. I, therefore, must insist on the point of order, not out of lack of sympathy for my two colleagues, but because if we open the floodgates, we would get swamped. So I do insist on the point of order. It is not germane.

Yes, the point of order. This is beyond the scope of this bill.

Mr. Chairman, if I might say in response, it is all within the context of housing. This is a very narrowly specifically defined housing bill.

Yes.

Mr. Chairman, will the gentleman yield?

I thank the gentleman, and he and I have been working together on a lot of this. I am glad he is going to withdraw it and we won't be proceeding further, but I would note that a number of recent developments in the mortgage field have made it clear that securitization is not the absolute unmixed blessing that people once thought it was. There are advantages to portfolio and there are some disadvantages. There are obviously advantages in terms of liquidity being created through securitization, but there are some problems. So I thank the gentleman for raising this issue, and it is one we will continue to work.

Mr. Chairman, I move to strike the requisite number of words.

Mr. Chairman, this is another version of the effort to kill the fund. It is very similar to amendments we have had before. I will ask Members to draw on their memories. I think at this point they would try to remember than stay up an extra 10 minutes listening to the debate very similar to what they have had before.

It is subject to the frailty which the gentleman from North Carolina (Mr. Watt) pointed out before, since we have had a similar amendment before; namely, that it would give to the Director the right to cancel this. It doesn't ask just for information from

the Director for us to take into account when we do this after the sunset; it empowers the Director to end it.

And it also says: Will not result in increased costs to borrowers on their residential mortgages.

There may be a de minimis cost increase. The way this is worded, a director would have to find that there would be no cost increase at all, not 10 cents, not $1 a mortgage.

I do not think it is intended mainly to deal with the soundness of the enterprise; I think it is dealing, once again, with an effort to try to kill the fund, which we have had five or six votes on already and a couple of more pending amendments.

The other factors, other than it might raise the cost of the mortgage, are already in the text of the bill and they are already factors that the Director is required to study.

So since we have talked about this before, I do not think at this hour anybody is going to bring any new knowledge.

Mr. Chairman, I move to strike the requisite number of words.

And I do want to congratulate the gentleman from California for a very nonduplicative amendment. It is an amendment that is different from all the other amendments, and I am glad to see it. I almost feel like it was Passover; we finally have an amendment that is different from all the other amendments.

The question I have for the gentleman that was raised here, and he may have explained it as I was going over this. He did submit it in a timely fashion, so we should have checked it earlier. What about a foreign visitor who is in the country legally, say on a student visa. Would you be able to purchase a home on this?

I would yield to the gentleman.

Not an investor, but someone who is here under a student visa that might not have a Social Security number, is not working, is here under a student visa and maybe can't work. Could that individual buy a home?

But we do have people here, for instance, who are here as students. There are wealthy people who come here to study. In fact, if you find someone paying full tuition in a college, she is probably from another country. And if that parent wanted to buy a home for that student, I don't believe they would have to get a Social Security number; I believe under a student visa you might not be able to work.

I understand that. But does every student here under student visa have to get a Social Security number? I am told in some cases under a student visa you can't work. If you are here as a student with wealthy parents, the parents want to buy you a home, you might not have a Social Security number and this would keep you from buying a home.

No, excuse me. The gentleman first said it wasn't the parents. The parents live in another country. The student is here under a student visa, not working, for a 4-year course of study. Could the parents from another country buy that student a home under this bill if the student didn't have a Social Security number?

How could they if the students don't have a Social Security number, how could you buy them a home?

No. The gentleman is obfuscating now. The parents live in another country. The parents give the student the money so that the student can buy the home. What about a student lawfully in the U.S., under a student visa, whose parents in another country want to finance the purchase of that home? The student doesn't have a Social Security number, maybe under the visa can't work. I think that is the case. The student wouldn't be able to buy a home.

And I do agree that we should tighten up the rules on people here illegally, but as I read this I think it may sweep too far, impose too broad a mandate on Fannie and Freddie over things they can't control. And there may be other categories, but somebody here under a student visa whose family lives in another country, is prepared to finance the purchase of a home, it would appear to me that would make that impossible.

I yield to the gentleman.

Again, the gentleman is simply misrepresenting the question. The parents live in another country. People in Saudi Arabia don't have to have Social Security numbers. So the parents are in another country; the student is here without a Social Security number. How does the student buy the home?

The gentleman's interpretation in foreign investment is the parents buy the home for the student. Well, if the student had enough money on his or her own, then the student couldn't buy it.

Well, I don't understand why we would say that. There might be students who have the money to buy it. And this fiction that students who buy a home, parents who buy a home for their own child to live in are foreign investors seems to me to import a fiction to get around an excessively rigid bill. And there may be other categories of people who are lawfully in this country who don't have Social Security numbers and could have the money to buy a home, and I am unpersuaded that we should prohibit that.

Will the gentleman yield?

We might be able to work this out. I am really concerned about the students and others. I am prepared to say that I would be willing to see that this bill is in conference. The gentleman obviously can press ahead. I going to vote against it at this point because it does seem to me that there are categories of people who can lawfully be in the country who have money who could buy a house, and I don't think we want to stop it.

There will be some enforcement issues that we could work out, but I would hope we could more clearly define it; that is, I do think it's important that we say that this be confined to people who are illegally here. But relying on the Social Security number as the exclusive validator of someone's legal presence in the U.S. seems to me not good policy.

Mr. Chairman, I move to strike the last word. The gentleman overstated what I said. I do agree as to B. I would say this, and B, I think is perfectly reasonable. I think it might be hard to administer, but I would certainly, I would want to agree to B.

I have a problem with A for this reason. We got CBO to score this. CBO scored it based on a tax reduction, and then there's a repayment in the REFCORP bonds. There's a fairly complicated proposal that we accepted from CBO to keep it revenue neutral, and it includes a tax deduction at one end, but a payment back at the other end. If the gentleman would be willing to ask unanimous consent to strike A, I would be prepared to be in favor of B. We could go back into the whole House, we could get unanimous consent. The problem is that if we strike A, I'm afraid it could unravel or scoring from CBO which assumes that they could deduct it and they would get the deduction, but CBO then said the government will lose money because you deducted it and we make up for another way with payments for the REFCORP bonds. I don't always understand what CBO says, but I can say that it's revenue neutral, recognizing the tax deduction, but making a payment that offsets that.

So if the gentleman would agree, I would certainly agree, because I think B is a reasonable effort to do this. I'm not sure how effective it will be, but I agree we should try. We are not sure about the pricing. I know procedurally we could do this, so if the gentleman would be agreeable, I would hope we could do that. If you would ask unanimous consent to modify the amendment by dropping A. If not, I will oppose this amendment, but I will move to, if I am successful in opposing it move to incorporate B when we get to conference. But I think a better way to do it would be to get unanimous consent to modify the amendment.

I will yield to the gentleman.

No, I do not. I can tell the gentleman that what CBO, we asked them about the scoring, they said there would be a cost because it would be a tax deduction. But they then made up for that by requiring some of the funds to go to help pay off the REFCORP bonds which are left over from the S&L bailout. And I do know that's what was done.

I yield to the gentleman.

I will just talk for a while, Mr. Chairman.

Yes, I was just going to kill time while you were looking so that, you know, we look like even though it's midnight, we're not all comatose. And as I said, alternatively, because it does cause us problems in the scoring and technical ways. It does seem to me the key is section B, and I would be agreeable to accepting section B now. Alternatively, I would hope that it would be defeated and we would put section B in conference.

I'll yield to the gentleman.

Parliamentary inquiry, Mr. Chairman.

What steps would be needed for us to have the gentleman get unanimous consent to modify his amendment by striking section A?

If it's only one paragraph, we probably don't have to call it A. It can just be the paragraph.

Mr. Chairman, I move to strike the last word.

Mr. Chairman, this is not an entitlement. It isn't close to one. It cannot get out of control. The only money that can come from this is very clearly limited to 1.2 basis points on the mortgage portfolio of Fannie Mae and Freddie Mac.

The gentleman misstates the problem of entitlements if he thinks this is a problem. An entitlement is when the Federal Government, without necessarily a funding source, says if you are X, if you have these characteristics, you are entitled to this amount of money. That is Social Security and that is Medicare. That is not this bill. This bill does not entitle anybody to an affordable housing fund. It does not say if the population grows at a certain rate, then there is the demand for spending. It defines the spending source, a nontax spending source. It says 1.2 basis points of the mortgage portfolio. It doesn't entitle anyone to housing.

Social Security and Medicare, he mentioned. Those are entitlements. That means if you are a certain age and have a certain characteristic, you are entitled to receive the funding.

No one is entitled under this bill to receive housing funding. This is an authorization of spending, but it is not an entitlement to receive it.

Secondly, there is nothing secret here. It says it will be transferred if there is enacted a provision of Federal law establishing the Affordable Housing Trust Fund. That means it only becomes operational if this Congress decides in open session, with another 47 duplicate amendments from the Republican side, to deal with it. We will have a dozen roll calls to make sure that it happens.

I should also point this out. Why do we do it this way? To make sure we meet the PAYGO issue. This bill creates a fund out of Fannie Mae and Freddie Mac profits. We have not yet got any consensus on how best to spend it after the first year when it goes to Louisiana and Mississippi. So we say to meet budgetary requirements, we don't want to be in a situation where we create a pot of money in one bill and then in the second bill decide how to spend it. This means that when we get to the collective decision in open session about how to spend it, whether it goes through the States, whether it is goes through HUD, whatever method we choose, we will not be charged with a source of funding. We will simply take the source of funding and hold it in limbo after Mississippi and Alabama and it will catch up if this Congress decides to do it with the method of distribution. That is not an entitlement. An entitlement is when you as an individual are legally entitled to receive money from the Federal Government because of your status. No one is entitled under this bill. No one gets the right to say I'm such and such, build me a house, rent me an apartment. This says a fixed sum will go at a limited rate, a percentage of the mortgage portfolio, and Congress will decide how it will be distributed.

Mr. Chairman, I very much resent the gentleman from Texas simply doubting my words so blatantly. You do not create an entitlement by accident. Secondly, of course, he misstates the word ``entitlement.'' An entitlement means that you as an individual are entitled to receive the money. That has never been contemplated here. Nothing I ever suggested says it. I repudiated the notion. The gentleman says, yeah, but who knows what he is thinking? I really do not believe the gentleman has any basis for impugning these kinds of motives to me. I am simply repeating what the gentleman said. Well, he says it is not an entitlement but how can we be sure?

Because the committee which I chair where I have talked frequently with all the members, including certainly the majority, I know what we intend. It is not to create anything remotely like an entitlement. An entitlement means that individuals will be able to say give me housing, I am entitled to it legally. What we are saying is we will set up a housing fund. We will debate how it is distributed, but it will never be close to an entitlement. No one has ever suggested that any individual would have the right to demand, as you do on Social Security and Medicare, which makes then entitlements, the funding.

I said no to PAYGO because I rejected the assumption that it was necessary. This meets PAYGO. It totally meets PAYGO. Has scored this as revenue neutral. We asked them from the standpoint of the Federal Government, and it is revenue neutral. You don't need PAYGO with something that is revenue neutral. What it says is that the Congress, not me personally or a small cabal, will decide that we are going to create an entitlement when no one is looking. It says that having reserved this money in a revenue-neutral way, we will then decide as a Congress how best to distribute it but to distribute it as a housing fund, not as an entitlement. There has never been any suggestion that it would be an entitlement. It is not remotely going to be like Social Security and Medicare, and it cannot be a runaway fund. It is limited to 1.2 basis points of the mortgage portfolio of Fannie Mae. That is an entirely different funding mechanism than an entitlement funding mechanism.

I thank the gentleman for yielding.

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

Madam Speaker, I ask unanimous consent that the business in order under the Calendar Wednesday rule be dispensed with on Wednesday next.

Madam Speaker, I ask unanimous consent that when the House adjourns today, it adjourn to meet at 10:30 a.m. on Monday next for morning-hour debate.

Madam Speaker, I move that the House do now adjourn.

The motion was agreed to; accordingly (at 12 o'clock and 36 minutes a.m.), under its previous order, the House adjourned until Monday, May 21, 2007, at 10:30 a.m., for morning-hour debate.