Floor Statements

Mr. Speaker, a few weeks ago I took this floor to talk about the very serious problem we have in our country today regarding jobs.

Last year, as the economy began finally to recover from the recession in a somewhat robust fashion, we expected to see a significant increase in jobs. As I noted previously, Secretary of the Treasury Snow in October said he thought we would get 200,000 jobs a month, because we had seen such vigorous growth. He said everything he knew about the way the American economy worked, meant with that level of growth, we were going to get 200,000 jobs a month.

A couple of months later, when he was drafting the President's economic report, the Chairman of the Council of Economic Advisers, Mr. Mankiw, said something similarly. In fact, he went him a little better. He said about 215,000 jobs a month. By February of this year they both had retracted those predictions.

Unfortunately, we clearly now are in a situation in which the old rules, by which we mean over the last 20 or 30 years, by which we could calculate the given number of jobs we would get for a given level of increase in our gross domestic product, do not seem to be working.

For a variety of reasons, we are not producing at a given level of economic activity the jobs we used to have. That is a serious problem. It is, first of all, of course, a terrible social problem. The people who do not get jobs are often the most vulnerable in our society, and joblessness is a terrible plight for anyone who suffers from it. The joblessness has been prolonged.

In addition to joblessness, of course, by the working of supply and demand, when you have a larger number of people unemployed, wages do not rise at the normal level, so that we had last year a drop in real wages. Inflation outstripped real wages for people who work for pay from others.

We have seen the erosion in health benefits. There was some debate late last year and early this year about that. As I said, the President's economic report came out in January, and it was still under the old rules. Well, facts are stubborn things, as a number of people have said. I forget who said it first, but a lot of us have liked it and repeated it, and it is now undeniable that we have a serious lag in job creation.

We are debating the reasons. I think they are multiple. One is productivity; and that is, of course, the great paradox. The good news of increased productivity becomes the bad news because it is one of the major explanations for the lag in job creation. There is the globalization factor, outsourcing. There is the debate about how many jobs this is costing, but it is costing jobs, undeniably.

There are other factors that are involved. I think the health care system of the United States is a problem. We have one of the few societies, the only one I can think of right offhand, where your health care is so tied to your job, so that when an American company has to hire, they have to think about health care. We have a situation where the American automobile manufacturers are burdened in their competition with others because they have to factor into the cost of every Ford and every Chevrolet and every car that is built here, the health care that is not a marginal cost for their competitors.

But leave aside for a while the reasons. We have to deal with the fact. And the fact is, as I said, it is now clear that we are in a period where we are producing fewer jobs per element of gross domestic product than previously. Then the question is, well, how long is this going to be with us?

Last year, the optimists were the people who said, well, we are going to just get a lot of jobs, a couple of million jobs a year, more than that, 2\1/2\. The Bush administration said from 2.4 to 2.6 million jobs a year. No one thinks that anymore. I hope tomorrow we are going to see a very robust job figure. There are some reasons to hope that it will finally begin to show something, probably because a major strike was settled in California, other seasonable factors, weather changes, but no one thinks we are going to get to those predictions of 2.4 to 2.6 million jobs.

So there has been a kind of down-scaling of expectations by the administration and others. We still have pessimists and optimists, but, sadly, the pessimists and the optimists agree that we are in a period of slow job growth, and they differ as to how permanent this is.

Now, there are really three levels here.

There are always, of course, job losses of a cyclical nature in a recession. The optimists last year said basically, look, these are cyclical job losses and as we come out of this recession, we are going to restore them. That has not happened. Clearly, there is a structural element here. So we now have this understanding that increased productivity, foreign outsourcing, and

globalization are costing jobs in the near term.

But the optimists say, okay, that is true, but that is temporary. In other words, they concede, we have not just the cyclical problem of a recession, we have something of a structural problem as our workforce gets reorganized. But, they say, that is temporary, because, given the dynamism of the American economy and the inherent workings of the market, new jobs will be created. So they concede, as the facts require them to, that we are now in a position where we do not have the jobs we had expected to have but, they say, have hope. The jobs are just around the corner. The jobs are coming.

I wish I could be as optimistic. I do not think it is possible at this time to conclude for sure how deeply embedded in our economy this structural problem is. I fear that to a great extent we are going to have to cope with this on into the future. It is not simply that productivity means, I believe, a qualitative change going forward in the wealth-to-job mix, but it is also not clear that foreign trade will do what people say.

We have some of those who are the strongest proponents of trade, I think, overselling it. Foreign trade clearly has been a reason why inflation has been low. Foreign trade clearly holds down the cost of products we buy. But the notion that it will automatically produce as many jobs as it costs simply has not been borne out.

I was struck by a very interesting panel held on the question of outsourcing. One of those who spoke on the panel, a former member of the Board of Governors and Federal Reserve, a very distinguished economist, Lawrence Meyer, talking about this general subject quoted another very distinguished economist, Robert Lawrence, and he said that he had recently read a quote of Mr. Lawrence which really troubled him, and here is the quote. As he notes, Robert Lawrence has studied international competitiveness his entire career, and here is what Mr. Lawrence said, as quoted by Mr. Meyer:

``If foreign countries specialized in high-skilled areas where we have an advantage, we could be worse off. I still have faith in globalization, but it is no more than faith.''

In other words, there is no guarantee that the factors that are causing this slowdown in job creation now are going to fade away.

I will talk in a further speech, however, let me reassure the Speaker, I do not plan to try to cover everything tonight and keep everyone here, about whether the optimists or the pessimists are right and what we do about it. Today I want to take the optimists at their word and hope that they are right and hope that what we are in is just a period of transition. That is the optimistic view.

The optimists concede that, as I said, it is not just a cyclical problem. What they now say is, well, it is a transitional problem. We are in a transition at this point. Of course, the economy is always undergoing transition, but there does appear to be a more significant transition now: the outsourcing of computer jobs and service jobs, that is relatively new. We have had outsourcing in effect not of jobs but of whole operations in the manufacturing area. This is new. The productivity, the integration of information technology, that seems new.

But they say, look, it is true we are in a transition, but do not worry, because the dynamism of the American economy will soon produce new jobs to replace those that are lost.

Here is what President Bush said. Now, again, President Bush was, of course, last year one of the great optimists of the old sort. President Bush was having his administration officials predict 2.5 million jobs this year. That is gone. Now here is what the President has to say. According to the New York Times of March 31, the President was in Wisconsin; and the Times says he acknowledged the economic anxiety felt by many voters, saying that the intense pressure on business and workers to produce more for less, while good for the economy in the long run, has held down the creation of jobs.

It then goes on to quote Mr. Bush directly, and here is Mr. Bush's quote: ``This is called a period of transition,'' Mr. Bush said. ``That is an economist's word for things aren't going too well for you, and I understand that. I understand people are worried about the job they have.''

In other words, this is the new optimist view, which is a less optimistic view than the old optimist view, and the President says, transition means ``things aren't going well for you.'' Well, now lexicography was never one of his claimed strengths, so we will let that pass, but it is an acknowledgment that this transition is hurting people, but, he says, in the long run, you will be better off.

That is what I want to address. I want to take those optimists at their word, and President Bush is in that camp.

The leader of the optimistic camp, because of his stature, his justifiable stature, the respect for which people have for him as an economist and a thoughtful maker of policy, is Alan Greenspan. And I commend people who want to see the optimistic view, the new down-scaled optimistic view, to read his testimony given on March 11 before the Committee on Education and the Workforce.

As an aside, Mr. Speaker, as some Members know, that used to be called the Committee on Education and Labor, but in a display of political correctness, when the Republican Party took over the House, ``labor'' being a word with unpleasant implications for the Republican party, I think perhaps too much social concern for people who earn their living by being paid by others, the word ``labor'' was banished from the official roster of committees and we now have the Committee on Education and the Workforce.

Mr. Greenspan's testimony before the Committee on Education and the Workforce is the optimist view. He says in here, as he has said before, that the stress that significant parts of our workforce are enduring reflect, and here I quote him, it is what ``Joseph Schumpeter, the renowned Harvard professor, called the process of `creative destruction,' the continuous scrapping of old technologies to make way for the new. This is the process by which wealth is created, incremental step by incremental step.''

In other words, as the President said, you are suffering in the short run. Transition means things are not going well for you. But, in the long run, you will be better off. It is the process of creative destruction.

The very fact that you are losing your job is, in a perverse way, good news, because the job you are losing is a job that we no longer really find that useful, and we are going to create, out of that job loss, a freedom for you to take a new job.

Well, as I said, I hope that is the case. It has been the case historically in America that we have produced new jobs as we have lost old ones. There is a very real question in my mind about the extent to which that is still true. Of course we will produce new jobs. Certainly we will. But whether or not the rate of new job production will equal the rate of job loss, that is not to be taken for granted, and that is why Professor Meyer quoted Mr. Lawrence. He is saying, look, I have faith in globalization, but it is only faith.

It is clear that trade will help with the inflation issue. Trade helps bring us products cheaply, but there is no guarantee whatsoever to assume that it will allow us to replace the jobs that have been lost, and there is no mechanism under productivity that says that, either.

But I will take the optimists, for now, at their word. They acknowledge that, however, there is a problem. In other words, the optimist view is, okay, this is a transitional period, and in this transitional period a lot of you are losing your jobs and some of you are keeping your jobs, but you are losing your health care and you are getting cut back.

An example of that, we just saw the settlement of a strike here or a dispute in Washington, D.C., fortunately, it did not lead to a strike, I guess, of grocery workers. Grocery workers have a new contract, and here is the headline from the Washington Post yesterday: ``New Workers Bear Brunt of Concessions. New people hired to work in the grocery stores in Giant and Safeway will get less in the way of compensation than the people who have been working there.''

Well, that is the creative destruction, but it does seem to me in this case, for

the new people, a little more destruction than creativity, because they are going to get less.

By the way, we are talking about grocery workers. We are not talking about people whose compensation will go from $150,000 to $140,000. We are talking about people working very hard for not an enormous amount of money, and they will get less of it, and their health care will cost them more.

Mr. Meyer makes that clear, by the way. Mr. Meyer, former governor of the Federal Reserve who cares about employment, here is what he said about the transition:

``We have got to keep in mind here that the costs associated with globalization and even productivity in terms of the skill bias, some of them are transitional. People will generally get jobs back, but they won't get the same jobs back. They may get jobs back with lower wages, with less benefits. There may be permanent costs. So we have to make sure this is not just transitional. There are winners and losers, and it is more than short run. It can be sort of permanent.''

In other words, even for those who have some optimism, there is a recognition that the transition will be damaging to a lot of people.

So then the question is, what do we do about the transition? Again, I will deal later with the more pessimistic view in another speech. But today I am taking the optimists at their word. Mr. Greenspan, the President, they say, okay, yes, integrating into information technology, expanding foreign trade, it is a two-way street. Ultimately, you will be better off, and we recognize there is some short-term pain. Bear with us.

Well, as Mr. Meyer points out, it is not at all the case that the losers of today will be the winners. There are different losers and winners. So even if we take this optimistic view that this is just a transition, it does seem to me that society has an obligation to make the transition a lot less painful.

The President says, remember, this is George Bush's definition of transition: ``things aren't going well for you,'' he says. ``That is an economist's word for things aren't going too well for you, and I understand that.''

Well, Mr. President, we need more than understanding. We need a response.

That response has to involve a more active public sector than we have. By definition, the transition is a private sector transition. It is in the private sector that people are losing jobs and getting new jobs, as Mr. Meyer points out, that will pay less and that will have fewer benefits as the grocery workers have found out now, the new grocery workers.

Now I believe there is a very important reason to try to ease the pain of the transition and that is a matter of equity. Productivity outsourcing, cheaper products, better products, those benefit society as a whole. There is a particular benefit for those us who are fortunate enough to be earning well, above the median income, and those benefits are widely distributed. But while the benefits are widely distributed, the costs of achieving those benefits is very narrowly borne.

It seems to me morally a decent society will try to take some of the increased benefit and use that to alleviate the pain of the few who are bearing the cost that made it possible.

Mr. Greenspan acknowledges that. ``Creative destruction'' is the phrase he borrows from Professor Schumpeter. That means that all of us are benefiting, but some are getting hurt. The President says, transition, things are not going well for you. Okay, but do we not have some obligation to have things go better? Is it reasonable?

I guess, because of outsourcing and other things, some of the things I buy I will buy more cheaply. Because am I, then, free of any moral obligation to worry about the fact that the people who are selling me these things more cheaply are getting paid less and having trouble meeting their family's needs and do not get the health care they ought to get, have to pay too much for it and sacrifice elsewhere?

So I think there is a moral reason why we should be trying to improve things. That, of course, requires some public policies. But even for those who do not believe in the moral argument, their own self-interest ought to convince them to do more about the transition.

Given Mr. Greenspan's recognition of the pain of the transition, given Mr. Bush's recognition of the pain of the transition, they are making a great mistake in failing to alleviate the pain of the transition, if only because the people who are suffering that pain are beginning to be in sufficient numbers and have sufficient sympathy so their response to transition is going to be to block it.

Now, remember in the view of the people I am quoting, the transition is a good thing. It is the way in which we grow. It is the way in which we improve. What you have is a paradox. Given our political situation, the victims of the transition do not have the political power in some situations to get some of those benefits to alleviate their pain, but they do have the political power to stop things from going forward.

Mr. Meyers says in an economist's ideal world that these trends are producing increased globalization, productivity, they are producing winners and losers. And he said the economists believe that the total gains of the winners significantly outweigh the total loss of the losers. So what you do is you take some of the gains from the winners and you compensate the losers and then the society as a whole is better off. The winners still win; the losers break even.

But as he points out politically, and Mr. Meyer was credited, he points out, yeah, but in our current politics the winners do not do anything for the losers. While the losers do not have the political power to force the winners to share, paradoxically they have the political power to stop the whole transition process and have there be many fewer winners. We know that.

Recently in Congress Daily there was a note that the lobbyists in town who work on trade are very disappointed because they do not believe the Central American Free Trade Agreement can go through the House. I certainly do not think it can or should in its current form. I think it is very lagging, although I would like to see a better version of that come forward.

Outsourcing, we know now in this great outcry, outsourcing, we are being told, do you not understand how good the outsourcing is? Well, the people who are being outsourced do not understand that. They understand that it is good, but they know it is not good for them. As long as all the benefits of outsourcing are going to some people and none of the gains, they are not going to be too happy about this.

In other words, I say to the optimists who believe that this is simply a matter of a transition which in the end will leave all of us better off, if you do not do something to alleviate the pain that transition inflicts on the lower economic sectors of this society and into the middle economic sectors of this society, they are not going to let the transition go forward.

Now, unfortunately, under the current administration and with the current congressional leadership, not only are we not doing anything to alleviate the pain of the transition, we are making it worse through public policy. Let me give you one example where I say we are making it worse.

I talked about the grocery workers. Now, some American workers are put at risk because the things that they do can be done overseas. And they are told, listen, if you do not adopt some lower benefits we will send this work overseas. We know that that threat is made often.

People in the computer industry are being told you are going to lose your job, you are going to be outsourced. Well, yes, there are some things where there is international competition. But how does that explain the erosion in the relative position of grocery workers? We know that that is there because the new grocery workers are going to get less than the existing ones. Very few Americans will go to India to buy their groceries. There is not a problem of outsourcing of your frozen food. What we have got are public policies that are eroding their position, in particular, the assault on the role of unions.

What has happened has been a systematic dismantling of the Federal law passed under Franklin Roosevelt and generally supported by presidents

since, which allow men and women to bargain collectively for their jobs. So you have a Wal-Mart which, in part because of the law and the way it is now being interpreted, is able to block collective bargaining because you have people hostile to unions administering the law that is supposed to protect people's rights to join them. So Wal-Mart then becomes the standard down to which others must repair. That is a public policy problem.

The tax system over the past few years has been made more favorable to the wealthy and less favorable to working people in relative terms. The payroll tax continues to go forward. That is another example of public policy making things worse rather than better.

And we have a number of very specific areas where the people in power in Washington are either making things worse or refusing to make things better. That is, there are some things that can be done to ease the transition.

And, again, I want to reiterate, I am not here debating whether or not these changes in job creation are going to be with us for a while or whether they are short term. Everybody admits that we now have this transition. Everyone acknowledges it, the President, Mr. Greenspan, and others, that it causes pain to people.

Let us assume they are right and within a few years the dynamism of the American economy will make this a time that we will all look back on and say, oh, were not we worried too much? Well, at least those of us who have had jobs throughout this and health care and other things. But what about the people who are not in a position to maybe even make it through there with any kind of economic integrity?

Well, there are things you can do to ease the transition. This Republican administration and Congress, sadly, are doing the reverse. Nothing could be clearer on this than the question of unemployment compensation.

Now, here Mr. Greenspan, who is the leading optimist in this, has, when pressed, agreed that we should extend unemployment benefits. I stress Mr. Greenspan, because I think he is the leading articulator of the more optimistic view. And when pressed, as he does not volunteer, he says, well, yes, you should extend unemployment. How do you, Mr. President, acknowledge that this is a time of transition in which, to use your words, things are not going well for the people who are at work and you do not use your power to get extended unemployment compensation?

Now, historically, when the recession ended we would do extended unemployment in a recession, extended unemployment benefits. When the recession ends, jobs came back, you did not need extended unemployment benefits. In this case, we have the recovery without the jobs, so you still needed unemployment compensation. The administration opposes it.

Part of the problem, we agree, is foreign trade related. That is not the whole problem. Productivity may be a bigger part of it. I think it probably is. But part of it is foreign trade related. Well, we are told we have something called trade adjustment assistance. It helps you if you lose your job to an international operation. But when it was passed it dealt only with manufacturing. We were not thinking then about computer-type jobs being outsourced indeed. The jobs now being outsourced are the jobs we used to retrain people for. We just forget to give them airplane tickets when we gave them retraining.

Where are we now? We are now in a situation in which the Republican administration and Congress is blocking efforts to extend trade adjustment assistance to service workers. So if you lose your job in a factory, you can get some trade adjustment assistance. It is not the best thing, but it is some help. But if you lose your job in a call center or in a computer programming operation, you get nothing. The administration has said no, no, we cannot help, because it says manufacturing products. It does not cover services.

Senators have said and others have said, the House of Representatives Members have said, okay, we will change the law so what this covers services; and the administration and the Republicans are blocking that.

So no to extended unemployment compensation, no to expanding trade adjustment assistance to people who need it.

Well, one of the things we could do would be to provide some public sector jobs for some of these people. Because, again, some of the people who are losing their jobs are not going to be the one who get the new ones.

And I go back to Mr. Greenspan. Mr. Greenspan's testimony is really the articulation of this view, and what it shows is the inadequacy of the conservative optimistic approach to this problem. Mr. Greenspan is their intellectual leader, and his answer essentially is community colleges and some more training.

One reads Mr. Greenspan, he says the whole problem is education. We do not have a good skill fit. We need more skilled workers, and we do not have them, and, therefore, the answer is to educate them more. That is shockingly inadequate. And Mr. Greenspan intellectually, I think, is not thinking this through.

I think that the problem is that in this case Mr. Greenspan's deeply conservative ideology, to which, obviously, he is fully entitled, his view that less government is almost always better, which is a view he has held for a very long time, is winning out over his intellectual understanding of what is going on in the world.

He grants that there is this insecurity. He did not always, but he now acknowledges it. He understands that the pain of the transition going unabated causes problems in resistance to the programs he would like to see go forward, but he cannot bring himself to let us help alleviate them.

Now, one more minute on the Bush administration. One thing we could do that would be very helpful with jobs would be highway and transit construction programs. People always said, well, public works is not a good way to respond to a job crisis in a recession because by the time you get geared up the recession is over. Yeah, but we are in a situation now where, while the recession may be over, but the joblessness is not; and this is an ideal time with slack recesses in the economy to improve our transportation system, our highways, our trains, our public transit.

A month or so ago the chairman of the Public Works and Transportation Committee here and his ranking member, bipartisan effort, correctly said we could spend usefully $375 billion over the next 6 years, not a huge amount in this whole country, improving transportation, and it would both be better for the society and it would provide jobs. And the President used his political muscle to cut that back and back and back to the point where he is now threatening to veto a bill that is $100 billion less than the original one.

Well, Mr. President, if you recognize that things are not going well in the transition, why should there be resistance to a piece of legislation that is one of the best answers we have to these problems? Because, again, to go back to Mr. Greenspan and the others, the problem with his argument about creative destruction is that, frankly, the people whose jobs are getting destroyed are not the people for whom the jobs will be created.

Even if you do job retraining, there are people in their 40s and 50s who are losing their jobs, people who had a high school education. The likelihood that they can be retrained for jobs, anything comparable to what they had, is quite slight in large numbers.

That is what Mr. Meyer correctly pointed out. Yes, some people get new jobs. They will be worse jobs than they had. They will not pay as much. They will not have the benefits, particularly since there is now a trend among American employers to cut back on health care and to cut back on defined pensions.

So, in any case, everything else being equal, you are likely to get a job paying less, and it is not going to be equal for all these people.

Let me say, the President's mistakes are very clearcut. No to extended unemployment benefits, no to trade adjustment assistance to the people whose jobs are being outsourced, no to a good highway program that would put people to work and also create, in some local areas, better economic conditions. So the President betrays his own recognition that this transition

means things are not going well for people by denying them this kind of short-term help.

Mr. Greenspan's error is articulated more clearly, but I think it is equally grave. I have heard his and I have talked to him about this and his answer to the problem frankly is, well, let us do more with the community colleges, let us retrain people. There are a couple of problems with Mr. Greenspan's approach.

First of all, I must say, as much as I respect him in general, as much as I admire what he did when during the 1990s he refused to raise interest rates and cut back the economy, some people argued that too little unemployment was bad for the economy, Mr. Greenspan resisted that. He said, no, he was not going to inflate interest rates just because unemployment was dropping. He was going to see if we could have low inflation and low unemployment. He was right and we did.

But here again, I have to say his philosophical opposition to government is, I think, crowding out, to use a good financial term, his commitment to dealing with the problem he identifies. He understands that the transition is causing political problems, and he says in his testimony and he acknowledges that it is leading to problems, that it is leading to people being opposed to some of the policies he thinks are necessary.

He understands that outsourcing and free trade, things he like, are at risk because of the resistance, but he cannot bring himself to overcome his philosophical objection to government to the point where he will really respond to those needs.

Yes, grudgingly, when we asked him, he said, yeah, extend unemployment but it is not high on his agenda. In fact, the central tenet recently of what he has been arguing, well, there are two tenets and they are in disagreement. One, he says we have to greatly increase the skill-sets of American workers. We have to educate people more; let us have more community colleges; let us have more education. Well, Mr. Greenspan's too good an economist to think that people at community colleges will work for nothing, but some of them would have to if we are going to carry out what he wants.

Mr. Greenspan has, after all, unlike the Bush administration, argued that the serious deficits we are now encountering and the enormous debt that they are building up, that that is bad for the economy, but sadly, he tells us that the only way that we can responsibly reduce that deficit is by cutting spending.

He is generally in favor of continuing the very significant level of tax cuts, weighted towards wealthier people, and I think he agrees with that philosophically, and he says, therefore, we have to make all these reductions on the spending side. Well, I have two problems with his approach.

First of all, he puts too much of a burden on education. I am all in favor of increasing the skills of American workers, but that does not mean that you do not have to, during the transition, alleviate the economic pain being felt by people who probably are not going to be able to acquire those new skills and who are going to take some time in arguably earning while they are trying to get them. Yes, community colleges are very important, but it is too heavy a lift to put on them the burden he puts on them basically of dealing with these job problems. I do not caricature. I urge people to read this. When we asked him what should we do about it, he said it is education, community colleges, improve the skills.

One, as I said, he puts too heavy a burden on them, but two, at the same time as he urges us to do more in education to improve people's skill level, he actively argues against the revenues being made available to the public sector that would be necessary to do that. No one thinks you can significantly increase the skill levels of workers without the public sector having a major role, and Mr. Greenspan's philosophical objection to the public sector having an expanded role comes head-on against his recognition that something ought to be done in this area.

As I said, Mr. Speaker, I have been talking about what I consider to be the optimistic view. The optimistic view is that, yes, productivity increases, outsourcing, increased trade, they represent more than the cyclical loss of jobs which you get in a recession that is overcome when the cycle turns. They acknowledge, the President acknowledges, Mr. Greenspan and others, a transition which has painful effects on many workers.

I will leave to a later speech, as I said, whether or not we may be in a period of a kind of permanent transition like this. That is, I fear that unless we do more than we are doing in public policy, even more than I have now been talking about, we are going to continue to have this problem.

Increased productivity is a wonderful thing. It is what civilization strives for in the economic sphere. Productivity means we have more recreation and more leisure. We can make more with less. That is what we are trying for. The tragedy is that we have a set of bad social arrangements that take that wonderful thing, increased productivity, and make it into a source of pain and deprivation for so many of our citizens.

But as I said, leave that one aside. Assume that Mr. Greenspan is right, the President is right, that cutting taxes and continued outsourcing and continued foreign trade, a continued $500 billion a year American trade deficit, continued increases in productivity without labor unions getting in the way, more freedom for employers to cut back on benefits and health care, let us suppose they are right and that while that is difficult for some people in the short-term, and we do not know whether the short-term is a year, two, three or four, at some point the dynamism in the American economy, as I said, will make us look back fondly on these days.

Even if you believe that, and I am, as my tone probably indicated, skeptical, it is self-defeating unless you respond to that pain which you understand is, in fact, a current reality.

So, the President, Mr. Greenspan and others are not understanding the implications of their own optimism. The increased wealth we are now creating, the benefit society as a whole is getting, the particular benefits that the very wealthy are getting, unless some of that is shared with the people whose jobs are being destroyed in the process of creative destruction, or the people who are losing jobs, or the people who are losing health care, with the new hires at the grocery stores here in Washington will be getting less than their colleagues doing exactly the same job, unless we do a better job at alleviating that pain, then the transition is going to be stopped. Arguing that free trade and outsourcing and the freedom of employers to hire and fire at- will and not be hindered by unions, the objections to any restrictions on various productivity practice, those who take this position are doing their cause some harm, some very real harm.

To go back to the phrasing of Mr. Meyer, and I think this is the best way to put it and I borrow from him and I adapt him a little. Given the political situation in our society today, given the Republican control and the view that the market will take care of things, and I believe in the market. I just do not believe in it as an absolute. I think it is clearly very valuable. I think it does not, however, do everything and there is a need for the public sector.

But the view that says the market will take it, has a lot of power today, the market will take it all by itself. What this means is that in the current situation the losers cannot politically force the winners to treat them more fairly, but because of the nature of politics, while the losers cannot make the winners treat them more fairly, they can stop the winners from winning as much as they otherwise might.

If you believe that all these things, unhindered scope for increased productivity, no restrictions on the Wal-Marts and the comparable institutions, more free trade without any restrictions, without worrying about labor rights and environmental rights, and I must say Mr. Greenspan erred. I was very sorry to see a quote from him in which he said that people were using a concern for labor and environmental rights as a shield for protectionism. That troubled me that Mr. Greenspan would not understand the sincerity of those of us who believe this. I fear he literally adds insult to injury when he impugns the motives of those who say that.

The fact is that they face a situation in which their failure to alleviate the

pain has built up such opposition to what they want to see happen that it will stop happening, and they cannot believe that this is good. So they really face a choice, because the electorate faces a choice later, but we deal today with public policy choices.

Continue to block an extension of unemployment compensation, continue to deny trade adjustment assistance to people who are losing their jobs to outsourcing in the services area, continue to block the ability of organized labor to help people band together to defend themselves, continue to allow the erosion of pensions and health care, refuse to allow this Congress to pass by threatening to veto a highway bill that could put some people to work, and you will reap, unfortunately from your standpoint, and from mine, too, a degree of resistance to economic progress that may make us all worse off.

So I say, in closing, Mr. Speaker, that we have had some advance. The President in particular, his aides they are not talking about 2.5 million jobs a year or more. They are acknowledging that we are in a period of painful transition, but they stop short of helping us alleviate that pain. The transition does not have to be painful, and if the transition continues to be painful, at some point there may not be nearly as much transition as they want.

I close by saying, as I said in my previous speech and will say again, a large part of the problem is the instinctive, intense, absolutist dislike of the public sector. The notion that when civilized people come together to do some things jointly because the market does a lot but it cannot do everything, the notion that that is something that is always bad gets in their way, because unemployment compensation and the highway bill, the trade adjustment assistance and improved community colleges, et cetera, that takes a public sector that is well- funded and able to meet its responsibilities.

As long as we have the President and a Congress that regard the public sector as something to be ridiculed and diminished and hindered at every turn, who do not have any confidence in our ability to come together as a people and achieve important social purposes, as long as Mr. Greenspan, the leader of intellectual conservatism, continues to argue out of his philosophical opposition to government that, yes, we must reduce the deficit but we must do it all by reducing spending and not at all by undoing some of these tax cuts, then things will get worse and not better. The political trends Mr. Greenspan laments, the opposition to free trade, the opposition to outsourcing, it is going to get worse, and we will see this year blocking outsourcing. In the short-term I am for that because I think the way it is being done is wrong.

I would like us to be able to come together and say, let us, to go back to Mr. Meyer one last time, try to follow the pareto optimal motto he talked about in which some of what the winners get will be to alleviate the losers' loss, to the point where we will be able to go forward as a society, and there will always be some losers and some people will be hurt. We are talking about a very complex society of hundreds of millions, but we can substantially diminish the perceived, I believe, unfairness of the way in which the current increases in wealth are distributed.

Until we do that, people should not be surprised when they encounter increasing resistance to things that they will tell the American people are in their long-term best interests because, unfortunately, the people who are losing their jobs and feeling the pain and losing their health care and having their pensions jeopardized do not, in this case, feel as persuaded by Joseph Schumpeter's argument about creative destruction as they instinctively tend to understand what John Maynard Keynes said when he argued to people who said do not worry about what is happening now, it will be better in the long run. In the long run, we shall all be dead, and in the long run these people understand they will have encountered so much pain and so much difficulty in their lives that the promise of these future benefits, which may not even accrue to them but to society as a whole, do not account for much.

Mr. Speaker, in a future speech, I will talk about the pessimistic view because, unfortunately, bleak as I sounded today in some ways, I was talking about what the optimists say. I am afraid that I think things may even be worse than that, but at the very least, I just want to say in closing, maybe repetition will get me some somewhere, extend unemployment benefits, extend trade adjustment assistance to service workers. Let us do a highway bill that meets America's highway needs and puts people back to work. Stop the union busting and the resistance to working men and women being able to come together, and I can promise you that we will be able at that point to consider some of the economic policies you are talking about in what you will find to be a better atmosphere.

Mr. Speaker, I do want to talk about the pending legislation, so I do not have time to comment on all the odd things that the previous speaker talked about, but a couple must be mentioned.

This assertion that we in the minority are blocking legislation has to be one of the most bizarre misrepresentations of the actual situation I have ever heard. We have no control over the agenda. We are not blocking anything. I wish we could block some of the stuff that has happened.

But this challenge to us to stop blocking Head Start, I have looked all over. I could not find Head Start laying anywhere here. We have not hidden it under our chairs. We are not blocking Head Start.

Job training, stop blocking job training. Job training is not being held hostage in the Democratic cloakroom. All of the scheduling is up to the majority.

So this arm-waving about stop blocking things when the majority is entirely in control does not make a great deal of sense.

I, on the other hand, did appreciate the honesty of the gentleman when he sneeringly referred to unemployment compensation as a handout. He said, if people are in business, they understand that that is not the way to go.

I had thought Secretary Snow, the Secretary of Treasury appointed by the President, former head of CSX, had some business experience. I was pleased last week when he supported the extension of unemployment benefits. Yes, we should do more about job creation, but there are people who are not going to get those jobs over the next few months who have been on extended unemployment. The refusal to extend unemployment compensation, and it is not the administration we are criticizing here, it is the majority in this House, because they are the ones who will not do it, over the objection of us, the refusal to extend unemployment compensation causes real injury to working families. And then when the gentleman says that is just a handout, he literally adds insult to injury.

But now I want to talk about this pending legislation. It is not aimed at providing more people for the military. There is not an argument that they do not have enough people in the Officers Club. There is not an argument that there are not enough ROTCs around to service the military. That is not this legislation's purpose.

This legislation is to punish those institutions which have said, as a matter of principle, we do not want them recruiting on their campus unless everybody is eligible. We do not want them restricting on irrelevant grounds people because of their race or their religion or their gender or their sexual orientation.

As long as the military says that gay and lesbian people are not suitable to serve, although, as we have seen now, during wartime they stopped throwing people out quite as much because it turns out gay and lesbian military people, as we know, are quite capable of doing the job and when they are needed, they are kept on. But the purpose of this is to penalize those principled institutions that say we dislike this discrimination.

Indeed, this legislation helps restrict the number of people who join the military. We have a shortage of people who speak Arabic working for the United States in the military and elsewhere. About 1\1/2\ or 2 years ago, seven members of the military who were doing very well learning Arabic were kicked out because they were discovered to be gay or lesbian.

So with your policy of ``don't ask, don't tell and, by God, don't translate'' because somehow they will undermine the security of this country, you are restricting the entry into the military of qualified people. And this legislation does not expand the pool of people. It is in the service of a policy that unduly and unwisely and unnecessarily restricts the access, and it does it in a punitive way.

It could be changed. For example, it says, well, wait a minute, if we are going to take money for national security, then they cannot stand up for their principle of nondiscrimination. When did the Department of Transportation get involved there? I am all for public transportation. I had not thought it was a matter of national security.

This legislation also says, the gentleman from California alluded to, a situation where students at Harvard have to go to MIT, and he said that is inappropriate. On Page 6 of the bill, it says that if the Secretary of the Military Department refuses to allow an ROTC in a particular school, he can authorize or she can authorize those students to go elsewhere. Why is that compromise not good enough for the school? This bill calls for the use of a system the gentleman from California said was discriminatory.

I want to just repeat the main point, because no one really believes and the military has not said, oh, we are being so hindered by these recruitment restrictions that we cannot get enough people. This is to penalize those institutions that are just standing up particularly for the principle of nondiscrimination and particularly for the principle that qualified members of their university communities ought not to be discriminated against and punishing them to reinforce an unfair policy hurts the military. It does not help it.

Mr. Speaker, I agree that being able to serve in the military is an important opportunity. I am here opposing this bill because I want to expand that opportunity.

This is not a bill brought forward because the military is having trouble recruiting on campuses. It is brought forward to penalize those universities which have said, look, as a matter of principle we do not want you recruiting among our students if they are not all equally able to take advantage of the opportunity offered. Obviously, there are some things for which you recruit, some people are physically or otherwise ineligible, but universities have said we do not believe that ruling out gay and lesbian young people who would like to join the military is fair to them, and we certainly do not think you should come to our campus and use our facilities and discriminate in a way that we think is unfair among our students.

I agree very much that we should be doing all we can to get people into the military. I will repeat what I said a little while ago, repetition being one of the privileges of our profession.

We have fewer Arabic-speaking translators in the military today because of the policy which kicked out a number of people at the Army language school because they were discovered to be gay. These were people who would, if they had not been kicked out some time ago, been available today to do that important job of translation. I am talking about seven people who were learning Arabic who would today be available in a greatly needed theater.

So, no, there is nothing antimilitary about people saying, look, this is a wonderful institution; yes, the ability to serve your country and its uniform is a very important one; please do not deny it to us on an irrelevant basis. Do not say because of the way we were born and because of our inherent natures we cannot participate in this.

I cite that because I have heard all the leaders in the military from Colin Powell on since this has been discussed say, look, it is not that the gay and lesbian members of the military do a bad job. There is prejudice in this society. There are people who are uncomfortable in their presence, and we have to honor that argument as well. It is bad for morale.

Of course, the Israeli Defense Force is not being able to afford the luxury of discrimination. They have mobilized all of their people, including gays and lesbian people, and no one has suggested that they are an ineffective fighting force or have inappropriate morale.

So I would very much like to agree with the principle that we should expand opportunities for young people, that we should increase our ability to recruit. The way to do that is to change the policy, and we should not be penalizing those institutions which, as a matter of principle, are working for a change in that policy.

Mr. Speaker, the Administration proposal for a drastic reduction in the ability of the Section 8 program to help people in need has caused a great deal of dismay, especially among those organizations that exist to provide services to the most vulnerable in our society. On March 22, a broad and inclusive coalition of people concerned with people with disabilities, people with low incomes, and others who have legitimate need for assistance sent a very thoughtful letter to the Chairman of the House Committee on Appropriations, expressing their strong disagreement with this proposal. As the coalition notes, the funding level proposed by the Administration would mean that ``approximately 250,000 low income families with children, senior citizens, and people with disabilities could lose their vouchers.''

Mr. Speaker, this will be one of the most important issues on which this House will vote this year, and I ask that this very thoughtful letter by this broad range of groups be printed here for the benefit of the Members who will have to vote on this.

March 22, 2004.

Hon. C. W. Bill Young,

Chairman, Committee on Appropriations, Washington, DC.

Dear Chairman Young: The undersigned groups are writing to

express our strong opposition to the severe cut to the

Section 8 voucher program in the HUD Fiscal Year 2005 budget.

The President's request for the voucher program is more than

$1.6 billion short of fully funding all vouchers in use. At

this funding level, approximately 250,000 low income families

with children, senior citizens, and people with disabilities

could lose their vouchers.

This shortfall comes at a time when a recent analysis of

the American Housing Survey reveals 31 percent of all

households had housing problems in 2001. Now is not the time

to cut the funding for a housing program that has served as

the ``linchpin'' of our federal housing policy for the last

two decades.

We also urge you to oppose the proposed Flexible Voucher

Program that would make significant changes in the program's

structure. The proposed changes would create a block grant

program and eliminate many of the long-standing rules that

benefit low income families. Under the proposed block grant,

PHAs would receive a lump sum that would not be adequate to

serve all current voucher holders. The elimination of

statutory requirements including targeting the program to the

lowest income families and ending the requirement that

tenants pay no more than 30 percent of their income for their

rent could have a devastating effect on families across the

nation.

The Administration has expressed concern about the growth

in costs of the voucher program. This increase was largely

the result of rising utilization rates, expansion of the

voucher program by Congress, and the widening gap between

rental housing costs and family incomes in recent years.

However, a recent study by CBO projects that the growth rate

of Section 8 expenditures will slow to 1.8 percent in fiscal

year 2005. They also project the costs to continue to level

off because of the cooling of the housing market as well as

increases in wages as the economy recovers.

The Section 8 voucher program is an effective and critical

resource. Housing assistance is needed by the many low income

families with children, elderly, people with disabilities,

and victims of domestic violence who would not have safe,

decent, and affordable housing without it. Housing

authorities cannot be expected to do more with inadequate

resources. We respectfully urge you to provide the necessary

funding for all existing vouchers and reject HUD's plan to

dismantle the housing voucher program.

Sincerely,

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

This is a perfectly reasonable bill, and I support it. However, I do want to comment on what seems to me the poignancy that this great House of Representatives, this Chamber that represents the American people, in the middle of the week, in the middle of what will be a short session because it is an election year, cannot find anything more important to do with its time.

Actually, there is one interesting thing about this law. We will get to see some foreign money. We will get to see it only when we print it for them, and then we will send it right back. Unfortunately, our economic policies and our approach to trade and globalization mean that we do not see much other foreign money. We have not been very diligent about trying to promote other ways in which we could get something from globalization for the people here, but at least we will get to wave at the money as we send it overseas.

I did want to, though, particularly join in one sentiment expressed by the gentleman from Delaware. I very much agree with him: This is an example of where the public sector can do the job better than the private sector. Now, that is not usually the case. We have a private sector economy and we depend, for the creation of wealth, of goods, and services, primarily on the private sector. But it ought to be underlined that there are some things important to our society that can only be done by the public sector. This is an example.

When another country is asking us to print their money for them, the question of security becomes very important; and this is something, security, which is particularly appropriate for the public sector to do. This will mean some work for the public sector, but not enough, because we are in an unusual situation now with our economy.

Because of a set of technological factors, public policy choices, the nature of globalization, we have the odd situation in which something which is a very good thing in the abstract, increased productivity, has sadly some negative consequences in reality. We are in a situation in which we are able, through productivity, significantly to increase wealth. An example here today is America's superiority in the printing of money over many others. We do that in a very productive way. But because of retrograde public policies, as well as the inherent nature of much of what happens, that wealth is not nearly as well-shared as it should be. We are in an odd situation in which, as wealth is created, too little goes to the people who work for others and are compensated for that work through a living. We have unemployment not dropping; we have real wages dropping. We have health care being eroded because employers no longer want to pay for it. And while public policy has not been the major cause of these trends, we have had public policies recently, the weakening of labor unions, unfair tax policies, one-sided trade policy, which asks nothing of those with whom we trade so that this redounds the disadvantage of workers here when we try to maintain standards. We have exacerbated that situation, and that we ought to change.

So I am pleased to join in reaffirming the importance of the American Government as the superior way for foreign countries to get their currency printed. I am glad to affirm that. I regret only, Mr. Speaker, the narrowness with which that principle is now being affirmed and the fact that on a prime

day in the middle of the legislative week, in the middle of the legislative session, this is all the leadership of this House can find to ask us to do. There are issues involving the extension of unemployment benefits, and there are other important questions that we should be dealing with. Unfortunately, we do not.

So I do not mean to blame this nice little bill for not being what it is not. This bill deserves to be passed. But this country deserves a chance for this House of Representatives to deal with much more substantive legislation addressing the economic distress that so many of our fellow citizens now encounter.

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

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

My attention was first drawn to this bill by the gentlewoman from the District of Columbia, who has been a very strong advocate for the District of Columbia in this and in other matters. In recognition of her leadership role on this legislation, I yield such time as she may consume to the gentlewoman from the District of Columbia (Ms. Norton).

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

Mr. Speaker, I did want to say that the gentleman from Delaware (Mr. Castle) deserves credit not simply for his advocacy here, but for being the main proponent of the whole program, which he correctly points out has been very successful, the State quarter program, the gentleman from Delaware (Mr. Castle) is the legislative author of that and is entitled to take all the credit for it.

Mr. Speaker, I yield such time as she may consume to the gentlewoman from Guam (Mr. Bordallo).

Mr. Speaker, I yield such time as he may consume to the gentleman from American Samoa (Mr. Faleomavaega), another able advocate for one of the territories.

Mr. Speaker, I yield such time as she may consume to the gentlewoman from the Virgin Islands (Mrs. Christensen), another of the able delegates who has been working for this on behalf of her territory.

Mr. Speaker, with renewed appreciation of the gentleman from Delaware and the gentleman from Ohio, the chairman of the full committee, for allowing this measure, so important to so many of our colleagues, to come forward, I yield back the balance of my time.

Mr. Speaker, I deeply appreciate my colleague and neighbor's generous remarks and I am abashed that I bring nothing bold to this debate. I apologize, but sometimes boldness is not appropriate. I think this legislation is a very well balanced one and I will be, when we get into the substantive debate, arguing for it. There are a couple of amendments that will be offered. The gentlewoman from California has a good one that I believe will prove noncontroversial. The gentleman from New York has one that I think is a good consumer protection amendment that we will have some controversy about.

What this bill tries to do is to continue what I believe has been the pattern in the committee which we dealt with last year with regard to the extension of the rules governing credit. That is, recognize the importance of market forces while at the same time providing those consumer protections and those public interest protections that the market is not designed to do. That is, I think our posture ought to be that the market works, the market is a great mechanism for creating wealth and providing services and creating goods but that you cannot leave it entirely alone, and our job is to try and do such regulation as vindicates important public interests but not to the point where you might become a burden on the market. This is a bill that tries to fine- tune that sum, that cuts back in some areas in regulation in ways that I do not think cause trouble.

Let me just address the gentleman from Iowa for whom everyone in this House has a great deal of respect both for his own commitment to the legislative process as a very serious effort and from his own expertise on the committee. I differ with him substantively on this and we will get into it more when we get into the manager's amendment. I did, as my friend from Massachusetts said, agree that the amendment ought to be offered. I would have voted against it. We debated it fully in the committee.

I do want to just respond briefly. One of our differences, I think, between myself and the gentleman from Iowa is that I think he equates not regulation by the Federal Reserve to not regulation by anybody else. There is, after all, under the existing law regulation, for example, by the Federal Deposit Insurance Corporation. It is not simply in this area, but there have been other areas where I think the notion of the Federal Reserve being the only regulator is a problem.

I yield to the gentleman from Iowa.

I understand that. But I believe that in this case, the entity that has a claim on the deposit insurance, that gets into the payment system, will be the entity that is regulated by the FDIC. Let us be clear in this bill, we are not creating ILCs. ILCs have been in existence for a considerable period of time. They are especially important in the States of California and Utah. I believe we will hear from some of our colleagues from California and Utah who think we are being unduly restrictive toward institutions which they say, experience has shown, play a useful role and do not interfere.

Yes, I understand that. But I would differ that they were disempowered. I must tell the gentleman, here we may have some difference. I do not think our function here ought to be to worry about institutions. Our job is to worry about the economic function that institutions perform and what they offer consumers.

I understand that institutions will say this puts them at a disadvantage. I have been dealing with businesses in America for my 24 years here, in the Committee on the Judiciary with one set of businesses, in the Committee on Financial Services with another. Economists have downward sloping curves and upward sloping curves. We have a downward sloping metaphor. I am convinced from listening to testimony all this time that every single business in America is at a competitive disadvantage versus every other business. It is like in Lake Wobegon where everybody is above average. Here everybody is below in competitive advantage. Everyone argues that they have got a competitive disadvantage.

We are not here to protect institutions or to listen, I believe, to complaints that, gee, this one is a little unfair compared to the other in the way it ought to function. We also should note that in this bill which would allow them to extend to other States, there is a new restriction and that is the one that the gentleman referred to with the grandfathering, the institutions, any new ones would have to meet a certain test, others will have been in existence.

The other thing I would mention, though, is this. To the extent that we are talking about institutions that are not regulated by the Federal Reserve but have access to various advantages that we give banks, there is nothing unique about the ILCs in that regard. There are other banks in this country of various sorts that are regulated. As the gentleman knows, we have the Office of the Comptroller of the Currency, we have the FDIC, we have the Office of Thrift Supervision, we have State bankers. There are other banks that do not have Federal Reserve supervision. There is a difference between us. I understand there is a view, and the gentleman from his own long years of study and I differ, for example, with regard to the Basle Accords internationally. Many of us found an overreach by the Federal Reserve. There is a view that says the Federal Reserve is the kind of lead regulator and the others are relegated. I disagree with that.

Mr. Speaker, reclaiming my time, I would differ with the gentleman. There is this problem we have here, which is, certainly, the notion of grandfathering is not unique. If one is doing something that might pollute the air in California, they are subject to different laws than if they are doing it in Iowa. We do not have this absolute uniformity. And part of the problem we have is this: when we decide to change laws in any area, banking, pollution, other cases, we sometimes find that there are existing patterns in particular States, and we have this dilemma. We do not want to necessarily nationalize them, but we do not want to disrupt existing arrangements. So the notion in this very diverse country that we will sometimes have a lack of uniformity is inevitable if we are going to be able to legislate sensibly; otherwise every time we try to do something new, we will be faced with the notion that we have to uproot what exists. I do not think that is a problem, but I do want to stress again the fact that there will be financial institutions that are not regulated by the Federal Reserve, which is nothing new; and leaving aside ILCs, there are other financial institutions not regulated by the Federal Reserve. I know we will debate this later because my understanding is when we get to the manager's amendment, which is to restrict ILCs to vis-a-vis the bill, we will have some opposition from people who think we are being too restrictive.

But I just wanted to get back to my central theme, and I just would add one other thing to my friend from Iowa. As my friend from Massachusetts said, when I was asked, I said I thought his amendment ought to be in order, and the gentleman from the Committee on Rules said that I defer to the Committee on Rules. That is the wrong verb. Being a man of some awareness of my surroundings, I often find that I submit to the Committee on Rules. There is not anything voluntary about it. That is a fact of life. But I would say to my friend from Iowa I appreciate the feeling he has now. I hope the next time a rule comes up in which significant Democratic amendments are restricted that his indignation might carry over a little bit and that he will not necessarily vote for such rules.

What this bill does in summary is to say that we understand the need both to have regulation and to keep it updated so that it meets its public interest requirements and does not become excessive.

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

Mr. Chairman, I want to express my appreciation to the chairman of the committee and the chairman of the subcommittee, because this is another example of where we have been able to work in a cooperative way. We do not agree on everything, but our method of operation allows us to refine our disagreements and to present to the House some legitimate policy disagreements, but in a form and in a context that does not interfere with our ability to go forward where there is consensus.

There will be two amendments that we will be debating. The gentleman from Alabama will offer one, which I plan to oppose, that would reject a request from the FDIC to make it easier for them to proceed against people in the banking area that they think have been negligent. The gentleman from New York (Mr. Weiner) will be offering an amendment that I think protects consumers. I feel strongly in favor of that one. Other than that, I believe we have agreement at the committee level. I want to emphasize, and I must say I am very hopeful that the Weiner amendment will be adopted, but we will have to see what happens.

I just want to reiterate my view that this reflects what I think ought to be our approach; namely, we start with respect for the market and an understanding that the free market is the best way to make our economy prosper. Particularly in the financial area that our committee has jurisdiction over, the role of the institutions as intermediaries in garnering the financial resources that are then made available to the people who do the production of goods and services, that is very important; and it is our obligation to make sure that that can be done with the maximum efficiency.

At the same time we recognize, many of us, that the market is not perfect. It does well what it is supposed to do, but there are areas of importance in our life that the market does not deal with. There are also inevitable tendencies in any institution, government, the private sector, the nonprofit sector, to do things that if there were constraints, it should not do. That does not mean that they are evil or that they are dysfunctional; it just means that human nature being what it is, no entity ought to be able to function without some restraints.

So our job is to provide for consumer protection in particular, which the market itself would not automatically do. Let me check that. In some areas I think we can rely on the market in the consumer area. There is a major merger, or a major sale in New England going on now where Fleet Boston is being bought by Bank of America. I have worked very closely with a number of entities that are advocates for low- and moderate-income people in the area of housing and in the area of small business and community development, because I do not think the market itself will take care of those. In other areas, in customer service, I think you can rely more on the market. There are competing institutions that will try to steal customers away. That is a good thing because, in the area of customer service, there will be competition. In areas where we are talking about lower-income people, competition does not do it, and we have to try to intervene.

What we need to do is to recognize the importance of regulation but, at the same time, make sure that we do not regulate unnecessarily, because there are regulatory costs. I do not object to regulatory costs if they are essential to achieving an important public purpose. Where they can be shown not to have that relationship, they ought to be removed. We ought to also try to pick among various regulatory approaches until we get the one that gives us the most benefit for the least cost. This bill is, on the whole, an effort to do that.

The chairman mentioned that in the controversial area of industrial loan corporations, we heard the forceful statements of the gentleman from Iowa who thinks that we should be more restrictive. We have Members who represent particularly States where the ILCs have played a major role, California and Utah in particular, who are represented in our committee, who think we have been too restrictive. The gentleman from Iowa (Mr. Gillmor) took the lead, and I was glad to work with him, in using a formula we had previously adopted in the Congress; namely, that to be a financial institution you should be 85 percent financial in your revenues, and we have used that as a screen for the additional entities that might be entering the ILC field. I think that is a reasonable compromise. I think that will protect the public interests, while continuing to allow consumer choice, and I congratulate the chairman and others for creating the context in which we could work that out.

I know we will be proceeding to debate on a couple of controversial issues and, as I said, I think this is a good overall bill, but Members may be waiting to see what happens on some of the amendments to make their final judgment.

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

Mr. Chairman, I yield such time as he may consume to the gentleman from New York (Mr. Meeks), a very hard working member of this committee.

Mr. Chairman, I yield 5 minutes to the gentlewoman from New York (Mrs. Maloney), a very able member of our subcommittee, the ranking member of the Subcommittee on International and Domestic Monetary Policy.

Mr. Chairman, I yield 5 minutes to the gentleman from Vermont (Mr. Sanders), a member of the committee, who is the ranking member of the subcommittee which has jurisdiction over this bill.

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

Before yielding time to one of the coauthors of the bill, the gentleman from Arkansas, who has done a lot of work on this, I did want to respond to the gentleman from Vermont.

Frankly, I was somewhat surprised to hear him raise some of those issues because he is, as I noted, the ranking member on the minority side of the subcommittee of jurisdiction; and I must say that had he raised some of them when we were considering this bill, he might not now feel they were being ignored.

One of them, of course, is not germane to this bill, the credit card question. That was debated and voted on in the committee last year, but some of the other issues he raised now, I just have to say that it is a little late to come to the floor, when the bill is already before us, and raise issues, particularly when you are the ranking member of the subcommittee and you have hearings and you have markup in subcommittee and you have markup in full committee.

In one case I would note he objected to the fact that this bill reduces the period during which the Federal Government can wait and study a merger for antitrust. Yes, I agree that that is a problem. We debated that one, in fact, in committee. It was the gentlewoman from California (Ms. Waters) who raised that; and I appreciate the fact that because she, having raised it, stuck with it, she has worked with the majority, and an amendment that will put that back up to 15 days, instead of 5, I believe, is going to be accepted.

So I would like to inform the gentleman, he has left the floor, that there was, in fact, an agreement to address one of those issues that he raised.

He also raised the question of executive compensation, and I have been working with the very good staff that we have on our side of the committee to deal particularly with the aspect of executive compensation, top-level executive compensation, that is, the perverse incentive that stock options give to the top people.

So that one I assure him is going to be dealt with. But I do not think it makes sense to deal with it only for financial institutions. I think it should be dealt with across the board.

The committee is going to remain in business, and I have to say to my now absent colleague from Vermont that, as ranking member, he is fully positioned to raise these, and many of the other members would be glad to work with him, as we were able to work with the gentlewoman from California when she took a very serious look at this and accomplished something.

Mr. Chairman, I yield such time as he may consume to the gentleman from Arkansas (Mr. Ross), who is a cosponsor of this bill.

Mr. Chairman, I have a parliamentary inquiry.

I do not see anyone on the floor who is opposed to this amendment. Is it then permissible under the rules for me to request the rest of the time?

Mr. Chairman, if it is appropriate, I will, although I am not in opposition.

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

I just want to address one important issue on this question of the industrial loan companies that the gentleman from Iowa had raised previously. It is clear, as we all agree, that the ILCs are in fact regulated. They are regulated by a Federal bank regulator, the FDIC. The element of unregulation goes with holding companies. Bank holding companies are regulated by the Federal Reserve. Heretofore, these holding companies have not had, in my experience, much independent existence and so the regulation by the FDIC has done it.

I will say to the gentleman from Iowa, while he is not here right now, he has been very conscientious on this bill and is probably following this, that I would be prepared to work with him on the question of whether or not an appropriate form of regulation for the holding companies ought to exist. Perhaps the FDIC or some other entity should have it. I do not think we have a regulatory hole. We have not had one historically. I do not think we are creating one. But I would note the only potential argument is there would not be a regulation of the holding company. All of the bank activities of the ILCs would be regulated by the FDIC.

Having said that, I just would repeat what the gentleman from Ohio essentially said. This is, I think, an effort to fine-tune regulation. I do not believe in any regard it cuts back excessively. I did disagree with the proposal to cut the review time for antitrust to 5 days. We have an amendment that will be coming soon from the gentlewoman from California that will push it back up to 15, not exactly where I would like it. We then will have a couple of other amendments to deal with. But I would note that we are going to correct what I think is one of the flaws in this bill.

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

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

Mr. Chairman, I rise in opposition. Mr. Chairman, I yield myself 3 minutes.

This is one of the two disagreements here. I should note that the section that is in the bill that the gentleman from Alabama seeks to strike was requested by the Federal Deposit Insurance Corporation. What they said was they want to be able to issue their orders. They do not have criminal procedures here. This does not take away one's right to a jury trial for any criminal trial. The FDIC has administrative powers. They can order one to cease and desist from a certain practice; they can debar one from working.

What they are saying is they do not want to be unable to bar people or to order a stop to people who are being grossly negligent. The language that will be governing the FDIC's regulating authority with regard to lawyers and others who work on banking matters, these are people that are hired by banks as professionals; and let me say there was some argument before that, well, these people should not be held to knowing banking law. We are not talking about the guys who install the drywall. We are not talking about the people who do the valet parking at the big soirees. We are talking about lawyers and other professionals. And, yes, I do believe it is reasonable to hold lawyers to a standard of knowing bank law when they do lawyering for banks. And what the FDIC said is we do not want to have to prove that they were reckless or deliberate. If they are grossly negligent, we want to be able to step in.

It is not a criminal proceeding. It is the FDIC. The FDIC wants to be able to hold professionals who are offering their professional services voluntarily to banks and working on bank matters to a knowledge of banking law to the extent if they are negligent, or even grossly negligent, if this amendment said the standard was gross negligence, it would be less of a problem for me, but this says for the FDIC to be able to discipline an attorney or any other professional servicing a bank, it must be a standard of either knowledge or recklessness of the conduct, and I think that is a mistake.

We know that there is not always a great difference between the people who work full-time for the bank and the people who are working as professionals for the bank. There are people who specialize, lawyers who specialize, in serving banks, other professionals who would specialize in serving banks. It seems to me entirely reasonable for them to be held to that standard.

So I do agree that we want to be deregulatory here, and a few minutes ago some of us were saying it was a good thing we have the FDIC. They are the regulators of the ILCs. They are an important regulator. This is a case where the regulators have asked us to keep a standard for them which they use when they are dealing with the banks themselves, and they want to be able to apply it to the independent contractors. I think it would be a mistake to give the FDIC significantly less power to act in enforcement proceedings against lawyers and other professionals than they now have.

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

Parliamentary Inquiry

Mr. Chairman, I have a parliamentary inquiry.

Mr. Chairman, do I have the right to close on this amendment?

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

Mr. Chairman, this is a very proconsumer effort. I do think people ought to be penalized when they can control it. But as the gentleman from New York as pointed out, bank practices today blame the victim. If one is a recipient of a bad check and they in good faith deposit it in their bank, they are penalized. Indeed, I would contrast this with the previous amendment. If one is an attorney now under this bill and they behave with gross negligence, the FDIC cannot do anything about it; but if they are the consumer who gets a bad check, they get whacked. I do not think it is anticapitalist to say that people who are the victims of bad checks once should not be victimized by bad checks twice. People have said, well, we should give them an incentive. As the gentleman from New York had said, I do not know many people who say I do not mind getting a bad check as long as my bank does not hurt me. I think there is already every incentive they have got to say no to it. We are not talking about someone who takes eight bad checks from the same person. The first time someone victimizes someone with a check that has insufficient funds, they are victimized.

This amendment is a good amendment.

Mr. Chairman, in the apparent absence of anyone in opposition, I would ask for the time.

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

Mr. Chairman, this is, as I think has been made clear, a bill that has already passed the House. Clearly the former reasons for the prohibition on interest on business checking accounts no longer make sense in light of the current economy.

I appreciate the gentlewoman from New York (Mrs. Kelly) alluding to the issue of the ILCs. When we had originally dealt with this, it had been my hope as this bill went forward in the other body, the compromise we had adopted could be considered there. For a variety of reasons this did not go forward in the other body. And the rules prohibit me from commenting on whether or not anyone ought to be surprised by the absence of that progress, so I shall not.

But this, once again, we hope will go forward; because it is, I think, an important thing especially, as has been clear, for the small businesses. Interest on their checking accounts, if you are a smaller business and you have to maintain a large percentage of your funds in checking accounts for a variety of reasons, then the lack of interest could become a significant factor.

So I hope that this will ultimately pass, but I do hope that the ILC issue will get some further attention.

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

Mr. Chairman, I ask unanimous consent to reclaim my time, and I also yield 1 minute to the gentleman from Pennsylvania (Mr. Toomey).

Mr. Speaker, I ask unanimous consent to take my Special Order out of order.

Mr. Speaker, it is once again the sad duty of a Member of the House, myself in this case, to talk about the ravages of terrorism and the damage it does. I was struck last week, as we all were, by the terrible depth of the tragedy in Spain when hundreds were killed by brutal thugs. But I must say I was also struck at the relative lack of attention to the deaths of 10 people in Israel who were also killed by terrorists.

Taking into account the very small size of Israel's population, the loss of 10 in that country is equivalent to hundreds in many other places, thousands in some others. The sad fact is that Israel has so frequently been the victim of brutal murderist terrorism, aimed wholly at people who are by no stretch of the imagination combatants, that the world has become a little numb to it. And that is a very sad fact.

Obviously victims of terrorism are, in the first instance, those who are killed, those who are maimed, those who love and care for them. And that is where our focus should be. But there is a second victim of terrorism and it makes this a self-perpetuating problem, and that is any serious effort to negotiate peace.

I have been one of those in this House who strongly supported the efforts of former President Clinton and former Israel President Barak to reach peace. It was a terrible, terrible moment in Israel's history when Yitzhak Rabin, a great fighter for peace in the most literal sense of the word, was murdered, in this case by right-wing terrorists within Israel.

And I continue to believe that Israel should be seeking peace based on the two-state solution because, among other reasons, it is very much in Israel's interest. But those of us who hold that position must acknowledge that the continued pattern of terrorism, which the Palestinian authorities do little or nothing to oppose, makes the accomplishment of that goal extremely difficult.

I have been critical of some aspects of what the Israeli Government does. People say you cannot criticize another government. That, of course, is not true. People in this body spend most of our time criticizing other governments. It is perfectly legitimate to express points of view. Indeed, the more closely one feels allied to a nation, it seems to me the more your obligation is to speak out, if there are some differences, in a constructive and helpful way.

But those who are urging Israel to do more have to take due account of the steady, relentless pattern of terrorism of which it is the victim. Look what happened in Spain. Two hundred people were brutally murdered and a government fell, because they think it was an inappropriate reaction in terms of trying to blame people. But would anyone now be pressing the Spanish Government to enter into negotiations with al Qaeda which appears to be the author of this?

When the U.S. was the victim of thousands of murders and, given the population, Israel has seen a comparable number, if not more, murdered by terrorists, none of us here felt that the answer was to go further with negotiations.

I am not opposed to peace negotiations. I think it is very much in Israel's interest. I think the ability to get out of the settlements so that Israel can be a Jewish democratic state, setting an example for the world of how to achieve democratic values in the Middle East, that is very important. So I don't think the peace process ought to be abandoned. But I do believe it is important to take due note of what we are asking a democratic Nation to do: negotiate peace under difficult circumstances with an entity from which murderist terrorists come, and an entity which does too little to deal with it.

There have been some in the Palestinian Authority who want to show that they will make peace. But the role of Yassar Arafat has been so negative, so absent when it comes to any serious effort to preventing the terrorism, that it poisons the atmosphere.

So, Mr. Speaker, as we mourn the victims of terrorism in Spain, we

mourn the victims of terrorism everywhere. We should note that the victims of terrorism in the Middle East are not simply those who were murdered, as terrible as that is, but it is an effort to achieve peace.

I continue to believe that Israel should make every reasonable effort to achieve peace. I don't think we can fairly say to the Israeli Government peace must be achieved, because that is not entirely in their control. I remain, unfortunately, skeptical that they have a true partner for peace on the Palestinian side, although I think they should continue to see if they do.

But no one who understands democracy, no one who has seen the way we have reacted, the way Spain has reacted, the way other democracies have reacted, should feel that you can put pressure on Israel without taking into account the context of repeated murder in which they are asked to operate.

Mr. Speaker, I do not find myself critical of the intelligence community. The criticism I and many others have is of the political leadership which I think misused the intelligence and made faulty decisions.

The gentleman talked about people who work in dark places. I did not talk about the Vice President. I do not know how he got into this debate.

The point about what we are saying is this. We now, without weapons of mass destruction, without a tie to al Qaeda, have been told that the rationale for this was essentially to extend democracy. I am in favor of extending democracy; although extending it by military invasion is a difficult policy. There are plenty of undemocratic, tyrannical governments in the world, and I want to oppose them, but I am not

generally for invading them. But what troubles me is that in the name of advancing democracy internationally, the majority is debasing it at home.

No one can think, who understands the tenets of democracy, that this procedure today comes close to it. There is no justification whatsoever for this legislation to have been drawn up and then brought to us without amendment. Will someone explain to me why this could not be amendmentable? Were we too busy? That would not pass the laugh test. The reason is that the majority is afraid that if amendments were available, it would bring into discussion things they do not want to talk about.

Of course, we support the troops. Voting for or against this resolution is wholly uncorrelated to supporting the troops. A resolution that simply congratulated the troops would have been passed unanimously. What we have here, frankly, is an effort to use the troops for political purposes. It is an effort to say that because Americans are proud of our fighting people, we will put into a resolution some phrase for them which contains a number of other politically more controversial items; we will bring it forward in a way that does not allow the democratic process to go forward.

I hope the Iraqis will not be watching this and think that this is the way a democracy should work, that it should be up or down, that the Constitution should not be amendable, resolutions should not be amendable. We do not advance democracy by debasing it as we do in this procedure.

Mr. Speaker, last week I released a statement expressing my disappointment with the use by Venezuela's National Electoral Council (CNE) of hyper-technical points and controversial procedural rulings to repress what appears to be the clear will of a sufficient number of Venezuelan citizens to move the country to a constitutional referendum on President Chavez.

The Organization of American States and the Carter Center observed first hand the democratic spirit shown by Venezuelans during the signature collection process, and they have publicly stated that they saw no significant problems with the collection of signatures.

Both organizations have also said they disagree with the Chavez- dominated electoral board's decision to set aside 876,000 signatures unless citizens come forward to validate them because the large numbers involved here, and the short time period allowed in which to appeal these signatures, could frustrate the will of the Venezuelan people to have a referendum on their president.

Because the decision of the CNE seems to me likely to obstruct the constitutional referendum process, I am submitting into the Congressional Record a recent editorial from The Washington Post entitled ``Coup by Technicality'' which provides specific details on the decision.

I think it is also important that President Chavez understand that if the will of the Venezuelan people is disregarded, the international community will appropriately blame him, as the country's leader, for contributing, through his rhetoric and actions, to such a profoundly anti-democratic outcome.

[From the Washington Post, March 5, 2004]

Coup by Technicality

LATE LAST YEAR 3,448,747 of Venezuela's 24 million citizens

turned out in just four days to sign petitions calling for a

recall referendum on President Hugo Chavez. This

extraordinary civic exercise, monitored by observers from the

Organization of American States and the Carter Center,

offered a democratic solution to years of political conflict

in that important oil-producing nation--trouble that

threatened to push Venezuela into dictatorship or civil war.

Now Mr. Chavez, whose crackpot populism and authoritarian

methods provoked the crisis, blatantly seeks to stop the

vote, in violation of his commitment to both the OAS and his

own constitution. His actions have already prompted a new

wave of unrest across the country, including demonstrations

in which at least seven people have been killed. Unless he

can be restrained, Mr. Chavez may complete his destruction of

one of Latin America's most enduring democracies.

Though the constitution, drawn up under Mr. Chavez's own

administration, requires 20 percent of all voters to back a

referendum, opposition groups collected 1 million signatures

more than should have been needed for the recall vote. These

signatures were rigorously audited by a nonpartisan civic

group before being forwarded to the electoral commission.

Yet, after delaying its response for weeks, the commission,

dominated by Mr. Chavez's supporters, rejected 1.6 million of

them, or nearly half the total. To do so, it invented

requirements that didn't previously exist. Most notably, it

threw out 876,000 signatures, each accompanied by a

thumbprint, because someone other than the voter had entered

registration details on the petition.

Mr. Chavez's functionaries subsequently announced that they

would give about a million of those stricken from the list a

chance to restore their names--but only if they appear in a

limited number of registration centers during one two-day

period. In practice, that poses a next-to-impossible

logistical challenge to the opposition, even if there were no

harassment from Mr. Chavez's police and civilian goon squads.

But attempts by the foreign mediators to reverse this

Kafkaesque coup have so far been unsuccessful.

Mr. Chavez, who has built a strong alliance with Cuba's

Fidel Castro and imported thousands of Cuban personnel,

appears eager for a domestic and international confrontation.

Last weekend he called President Bush an ``illegitimate''

president, referred to him with a vulgar epithet and

threatened to cut off oil supplies to the United States.

Opposition leaders say that more than 300 people have been

arrested in recent days, and that some have been tortured.

Given the Bush administration's weak position in the region,

hope for a peaceful or democratic solution rests mostly with

Venezuela's Latin American neighbors, starting with Brazil.

If Mr. Chavez continues to deny his people a democratic vote,

leaders from those nations must be prepared to invoke the

Democracy Charter of the OAS and threaten him with the

isolation reserved for autocrats.

Mr. Speaker, I was unhappy--although not surprised--to see the President's most recent assault on programs that provide housing for people in great need. The administration's 2005 budget proposal calling for deep cuts in the section 8 program will have many harmful effects if it is enacted, and among those who will be most damaged by it are people with disabilities.

Recently, the Consortium for Citizens with Disabilities Housing Task Force documented the great social harm that will result if we adopt the President's approach. This coalition, as Members can see by looking at the list of signatories of the document I am here inserting into the Record, broadly represents the major organizations in this country representing the needs of people with disabilities.

To quote from this Consortium's conclusion,

The CCD Housing Task Force strongly believes that the

Administration's Flexible Voucher Program proposal would

significantly erode housing assistance for the poorest people

with disabilities. We believe this proposal actually

undermines stated Administration disability policy goals

designed to promote community integration under the New

Freedom Initiative an end chronic homelessness.

Mr. Speaker, the deeply flawed proposal the President has made to restrict section 8 housing vouchers will be one of the most important issues we will be debating in this Congress. No group has more to tell us about it than the Consortium for Citizens with Disabilities and I ask that the very important position paper of the Consortium's Housing Task Force be printed here so that Members will have the benefit of it during this debate.

Position Paper On the Administration's FY 2005 HUD Budget Proposal,

Section 8 Housing Choice Voucher Program

Administration Proposal Would Cut Housing Lifeline for People with

Disabilities

The Bush Administration's FY 2005 HUD Budget proposal calls

for deep cuts in the Section 8 Housing Choice Voucher

Program. The budget also would radically alter the

fundamental design of the program by converting it to a block

grant administered by Public Housing Agencies (PHAs) for the

benefit of higher income households. The Consortium for

Citizens with Disabilities Housing Task Force (CCD Housing

Task Force) is strongly opposed to the Administrations budget

proposal which would cut more than $1 billion from current

funding levels. We are also strongly opposed to the

Administration's ill-conceived proposal to convert the

program to the Flexible Voucher Program--a block-grant type

approach which would eliminate many of the critical

protections people with disabilities have under the current

Section 8 program.

The CCD Housing Task Force is a coalition of national

disability organizations working to promote access to

affordable and accessible housing opportunities and community

supports for people with disabilities. People with

disabilities have the highest level unmet need for housing

assistance of any group eligible for federally subsidized

housing. In 2002, approximately 3.7 million non-elderly

people with disabilities relied solely on federal

Supplemental Security Income (SSI) benefits worth $545 per

month. Priced

Out in 2002 (published by the CCD Housing Task Force and the

Technical Assistance Collaborative) found that SSI recipients

on average would need to pay 105 percent of their monthly SSI

income to rent a modest one bedroom unit. The individuals

whom we represent, many of whom depend solely on SSI or other

disability benefits, are current participants in the Section

8 Housing Choice Voucher program or on Section 8 waiting

lists. The Section 8 voucher program is central to their

ability to have an opportunity to find affordable and

accessible housing in the community.

Administration Proposal Would Seriously Harm People with Disabilities

The CCD Housing Task Force strongly believes that the

Administration's Flexible Voucher Program proposal would

significantly erode housing assistance for the poorest people

with disabilities. We believe this proposal actually

undermines stated Administration disability policy goals

designed to promote community integration under the New

Freedom Initiative and end chronic homelessness.

The Administration's proposal would cause serious harm to

people with disabilities in the following ways:

Proposed reductions in funding of over $1 billion for FY

2005 would mean that at least 250,000 households, including

at least 50,000 households with disabilities, would lose

their Section 8 assistance within the next year;

The Administration's Flexible Voucher Program proposal

would eliminate targeting to the lowest income households.

The federal targeting is a current Section 8 program

requirement that has helped people with disabilities to live

in the community. The new program could be used for

households up to 80 percent of median income and dedicated

exclusively to homeownership--closing the doors on many

people with disabilities.

Under the Administration's Flexible Voucher Program, people

with disabilities could be required to pay much higher rents

than they can afford. Current rules limiting tenant rents to

30-40 percent of income would be eliminated.

PHAs would be given incentives to assist higher income

households, a policy that would result in fewer people with

disabilities receiving vouchers.

PHAs could establish time limits on voucher holders. When a

person's disability is permanent, their housing assistance

should not be time limited. A time limited voucher could

force people with disabilities back into nursing homes,

institutions and other restrictive settings, and homeless

shelters.

Congress would no longer have the authority--as it has for

the past seven years--to target Section 8 vouchers for people

with disabilities who have lost housing due to elderly-only

policies. Over 50,000 people with currently funded disability

vouchers would be at-risk.

Over the long term, the Administration's budget projections

for 2005-2009 clearly show further erosion in voucher

funding--putting more people with disabilities at-risk of

losing their Section 8 assistance. By 2009, Section 8

expenditures would be more than $4.6 billion below what the

Congressional Budget Office estimates would be needed to

maintain the program's current level of funding. The Center

for Budget and Policy Priorities (CBPP) projects that cuts of

this magnitude would mean that 600,000 vouchers--or 30

percent of the vouchers currently authorized--would be

eliminated.

people with disabilities need section 8 vouchers

People with disabilities have the highest level of unmet

need for housing assistance of any group eligible for

federally subsidized housing. The CCD Housing Task Force

estimates that more than 3 million people with disabilities

receiving SSI do not currently receive any housing assistance

from HUD. The current Section 8 program is literally a

``lifeline'' for people with disabilities who rely on SSI, as

well as other low income people with disabilities who simply

cannot afford the cost of rental housing. Section 8 Vouchers

are needed by people with disabilities who have been

negatively affected by the loss of housing opportunities

because of federal ``elderly only'' housing policies. Over

500,000 units of HUD public and assisted housing have

``elderly only'' policies, and more units are being

designated ``elderly only'' every day.

the administration's flawed rationale

The Administration's proposal and their statements

defending it are seriously flawed. The CCD Housing Task Force

urges Members of Congress to treat this proposal with the

same degree of skepticism and concern as it treated last

year's Housing Assistance for Needy Families (HANF) proposal.

One senior HUD official's public statement, that the current

program's income-targeting requirements should be eliminated

because they are not needed, can be rebutted by the fact that

over 3 million people with disabilities below 30 percent of

median income still do not receive federal housing assistance

.

HUD officials state that converting the current voucher

program to a block grant is needed to control the programs

``upward spiral in costs over the past two years''. This

statement is also misleading. HUD's failure to produce

accurate data and projections on Section 8 program costs

cannot be used to imply that Section 8 program spending is

``out of control''. The rising costs in the Section 8 program

during the past few years are due in part to improved PHA

voucher utilization--as urged by the Congress--and leasing of

new vouchers authorized from 1999-2002. Other cost factors

include the escalating rental market of the late 1990s (which

has now stabilized) and higher subsidy levels needed by

households who have recently lost employment. CBPP's analysis

projects that spending for the voucher program for FY 2005

will grow by only 1.6 percent, which is lower than the rate

of inflation.

conclusion

The current Section 8 Housing Choice Voucher program is the

most important federal housing resource to address the

housing needs of those with low incomes. We believe that

Congress should maintain its responsibility to protect people

with disabilities who receive or need Section 8 assistance.

The CCD Housing Task Force urges Congress to fully fund the

Section 8 voucher program in FY 2005, which means a $600

million increase over FY 2004 appropriation levels.

We also urge Congress to reject the Administration's

Flexible Voucher Program proposal. This proposal is nothing

more than another attempt by the Administration to achieve

what they could not achieve in Congress last year, when

bipartisan opposition to the HANF block grant proposal

ensured its failure. We believe that Congress should continue

to have the direct authority to ensure adequate funding for

the program and to make decisions on how the Section 8

program is utilized.

HUD's role in administering the Section 8 program and

monitoring the use of vouchers by PHAs is critically

important. HUD should be held responsible for devoting the

necessary resources to carry out these responsibilities

successfully. Many of the current problems with the Section 8

program can be attributed to HUD's mismanagement--including

long-standing mismanagement of over 50,000 vouchers targeted

to people with disabilities. Most importantly, the Section 8

program should continue to be targeted to addressing the most

critical housing needs in our country today--those of

extremely low-income people including people with

disabilities.

CCD Housing Task Force

American Association of People with Disabilities

American Association on Mental Retardation

American Network of Community Options and Resources

Association of University Centers on Disabilities

Bazelon Center for Mental Health Law

Brain Injury Association of America

Easter Seals

Epilepsy Foundation

International Association of Psychosocial Rehabilitation

Services

National Alliance for the Mentally Ill

National Alliance to End Homelessness

National Association of Protection and Advocacy Systems

National Mental Health Association

Paralyzed Veterans of America

Spina Bifida Association of America

The Arc of the United States

United Cerebral Palsy

United Spinal Association (formerly Eastern Paralyzed

Veterans Association)

Mr. Speaker, two weeks ago I was privileged to be able to speak to the Jewish Council for Public Affairs, at a national convention held in Boston, representing organized Jewish communities across the country. The various Jewish communal organizations are active on a variety of fronts, including efforts to alleviate poverty and social distress. The participants in the organizations that make up the JCPA are themselves individuals who give freely to charity, and understand in part because of this that while private charity is extremely important, it is no substitute for well-funded government programs that meet social needs.

Drawing on their experiences in this regard across the country, the attendees at the Plenum of the Jewish Council for Public Affairs adopted a resolution, which called on the Congress ``to reject efforts to make permanent the 2003 tax cuts.''

As the resolution notes, ``to feed the hungry, clothe the poor, heal the sick, and educate our children, our Federal Government requires the resources that come from tax revenue.''

This does not mean that the council opposes all of the tax cuts previously enacted, but this strong statement against the proposal to make permanent all of the 2003 tax cuts deserves very serious attention, given the moral credentials of those who enacted it.

Mr. Speaker, because this is one of the most important questions that will be facing us in this Congress, I ask that the very compelling resolution against making all of the 2003 tax cuts permanent be printed here.

JCPA Resolut1on in Opposition To Making Permanent the 2003 Federal Tax

Cuts

As Jews and Americans, we are committed to aiding members

of our community in need through the work of our synagogues,

CRCs and other private organizations, while relying on our

Federal Government to ensure that it has the fiscal means to

meet the needs of all its citizens. To feed the hungry,

clothe the poor, heal the sick, and educate our children, our

Federal Government requires the resources that come from tax

revenue.

The Bush Administration's proposed Fiscal Year 2005 budget

seeks to make permanent the Federal tax cuts passed in 2003.

To do so would increase deficits by $2 trillion between 2005-

2014, inhibiting Federal investment in both existing and new

programs. These tax cuts will affect the lives and well-being

of our children, and our children's children, who will

struggle in a society weakened by the fiscal decisions our

government is now making. The JCPA calls on the

Administration and Congress to enact legislation that will

allow the Federal Government to meet its responsibilities to

its citizens and to reject efforts to make permanent the 2003

tax cuts.

Mr. Speaker, will the gentleman yield?

If I could ask the gentleman from Texas, I like to keep up with new trends in the House. I was struck when the gentleman from Texas, the majority leader, said he could not speak for the Rules Committee.

Is that a new development we had not previously known about?