Floor Statements

Mr. Speaker, first, any suggestion that this is any way disrespectful of the sacrifice of our troops is nonsense. Saying that we do not want brave Americans to continue in a very difficult situation in which they are at a great disadvantage and that in fact we would like to bring them home is no criticism of them at all, and nothing undermines their ability to be there. There is a policy decision as to whether they should be there.

Now my friend from Washington and my friend from California have said, well, this isn't the right forum parliamentarily, and my friend from Washington said, yes, we should have a change in strategy but not this way. But this is all we've got.

Right now, the Members have a choice, and that's the way this place is now being run: Either you vote for this resolution or you vote it down and you give an implicit and, in some cases, explicit approval to the administration to stay there indefinitely. General Petraeus said the other day he sees us jointly there with the Afghans well after 2014.

Now, yes, there is some gain we could get in deterring terrorism there, although the notion that if we stop terrorism in Afghanistan, that's going to be the end of it when there are unfortunately other places in the world--Somalia, Sudan, Yemen, elsewhere. We can't plug every hole in the world. And in fact this is an effort that, having been tried for 10 years, has not, unfortunately, looked to me like it's going to succeed.

We're told, well, but this was important because we deterred an attack on Europe. But where are the Europeans? The thing that most astounded me today was when my friend from Ohio (Mr. Chabot) said, well, what about our 47 coalition partners? What about them? They're sitting this one out. They're pulling out. This is a virtually unilateral American action with a couple of flags that we fly for a few other countries. Some of them did have people there and they've suffered casualties, but they're all withdrawing, leaving us alone.

And then let's talk about the cost of this war. The gentleman from Ohio said it's not a fiscal issue. Of course it is. This war costs us well over $100 billion a year. You will see Americans die from a lack of police and fire and public safety here if you continue to fund this futile war.

Mr. Chairman, I yield 3 minutes to a member of the committee, the gentleman from Massachusetts (Mr. Lynch).

Mr. Chairman, I yield myself 30 seconds to say that the gentleman has just explained why this is bad for the cities.

Every organization representing cities and counties and local governments and local economic development agencies disagree with him. They have written to us and asked us to support this program because he is simply wrong about the tax implications.

Will the gentleman yield?

Does the gentleman not want to mention that Chicanos por la Causa----

I yield myself the 30 seconds the gentleman wouldn't allow me to mention--Chicanos Por la Causa, which he keeps invoking, in what I must say is an inflammatory way, yes, it has $137 million in eight States. It is a consortium of several groups. Comparing it to one county is quite misleading. It is $137 million to an organization that has eight States in which it works and which has produced affordable housing units. And as to his argument that it is not for the poor people, almost all of the groups in this country that advocate for housing for low-income groups have sent us a letter urging that this go forward, Habitat for Humanity and others. I take them as more credible on this than my friend.

I yield 1 minute to the gentleman from Indiana (Mr. Carson).

I yield myself 15 seconds.

The gentleman from California says he is not singling out Chicanos Por la Causa, that there are other private organizations, but he never mentions them. And he says, well, they are not a government entity. That is right. We don't think it all has to go through the government. We think places like Habitat for Humanity and others have a role to play.

I yield 3 minutes to the former mayor of the city of Somerville, Massachusetts (Mr. Capuano).

I yield myself 2 minutes to say I am struck by the incongruity of Members who have voted for the war in Iraq, a trillion-dollar huge mistake, ongoing, who vote to continue what seems to me a futile effort now in Afghanistan.

The gentleman from Alabama, and we've talked about this before, he said that because the Obama administration told him he had to, he voted to send $150 million a year last year, next year, for the next 2 years to the cotton farmers of Brazil. The gentleman opposed a $250,000 limit on subsidies to any individual farmer. In the budget, the gentleman voted, as did most on his side, to send $1.2 billion to beef up Iraqi security forces. What about American security forces? What about giving some money to the cities so when they have to deal with abandoned property, they don't have to take that out of the hides of their police departments and fire departments?

Yes, we should reduce the deficit. But to be for the enormous waste in the Pentagon--and, by the way, Members cite Mike Mullen. I wish, in addition to citing the Chairman of the Joint Chiefs of Staff, they would make a simple commitment not to vote for the Pentagon money he doesn't want. Because Members on that side cite his warning about the defense budget, about the deficit, and then force money on him that he thinks is useless.

So let's talk about the disparity between people who vote enormous amounts of money; $400 million goes to Afghan infrastructure, we're told. Well, let's have it be done efficiently. I cannot think that in any program in America we are going to be spending the money less efficiently than the $400 million my friends over there have voted to send to Afghanistan.

So let's look at this in a reasonable way. And we also believe that this billion dollars, in fact, helps our cities. And there's one fundamental error they make: the assumption is that for every piece of property--by the way, it is not simply foreclosed property; it is abandoned property--for every piece of property that's out there, there is a responsible financial institution whom you can sue and get the money from. That simply isn't true.

I yield myself 30 more seconds.

For many of these pieces of property, the cities are left with no recourse. There is no one to do it. One of the Members said the other day in committee, Well, they can send out their bulldozer. Yeah, they can pull a firefighter off and hire a bulldozer operator.

The fact is that it is not simply for foreclosed property. It's for foreclosed and abandoned property, and the notion that there are no buildings out there in the cities where there is no responsible financial entity is nonsense. And so what we're telling the cities is, It's tough. You've had these foreclosure problems. You've had this abandonment problem. You could sell it to the private sector, and the private sector will buy some, but they won't buy it all.

I now yield 3 minutes to the gentlewoman from California (Ms. Waters).

I yield the gentlewoman 1 additional minute.

Will the gentleman yield?

No, I don't think any private entity would--I'm sorry. May I answer the question?

That's why we want to give money to the cities so they can tear it down, because otherwise they'll be stuck with it. I don't think any private investor would put money in that. There's no other way to deal with it, and the way to deal with it is to give them the money so they can tear it down.

I yield myself 3 minutes.

First of all, the gentleman says why are you talking about other programs, why don't you just talk about this program, but he talks about hundreds of billions of dollars of deficit, and this is a billion dollar program. So he hardly, Mr. Chairman, follows his own rules. He talks about hundreds of billions of dollars about a billion dollar program. I am joining him in saying, yes, we have a large deficit, of which this program is an infinitesimal part.

Secondly, I am puzzled that my Republican friends, who generally tell us that the President is not very good at his job, hide behind him when it's politically convenient. Yes, this is an Obama deal. The President was wrong. And unlike the gentleman from Alabama, if I think the President has made a foolish decision, I'm going to vote against it, not to send the money to Brazil. It wasn't the President who told you to vote not to limit the subsidies to $250,000 per person.

And as to bringing people home from Afghanistan, we will have a chance tomorrow to bring people home from Afghanistan. I will vote for that. Sending $400 million for corrupt infrastructure expenditures isn't bringing anybody home. So let's bring them home. The gentleman will have a chance to do that tomorrow.

But then I want to go back to his thing about do you want to invest? No. He just ignored the facts. This is not just about foreclosed properties. It's about abandoned properties. He says do I want to invest? He said do I want to buy it? Does he know who owns that? Could he give me the address? And what the gentleman said, he said of course you can find out who owns it; it's not hard.

We believe that there are properties where you can't find the owner. Now, the gentleman got the picture. He must know about the property.

Would you give us the address and the name of the responsible owner so we can tell the city not to use public money?

I yield to the gentleman from Alabama.

No. I will yield for the purpose of asking the gentleman a question.

He said it's possible to find the address and the owner. I am asking him to live up to what he said. Can he tell us who the owner is? He's got the picture of the property. He says, no, you don't have to spend public money to tear it down. Go after the responsible owner.

I ask the gentleman, can he tell us who is the responsible owner?

I yield to the gentleman.

The gentleman is wrong.

I reclaim my time.

Please instruct the gentleman as to the rules. He is blatantly wrong. It is not simply purchasing property. This gives the city money, and maybe that's why they are so wrong on this. They don't understand the program. It includes giving the city money to go in----

I yield myself another minute, because these people take a lot of work to get them to explain it.

The fact is that it isn't simply to buy it from a responsible owner. It includes money, as we have tried to explain to them, to demolish property. In fact, in the cities of Detroit and Cleveland, they specifically asked us--the gentlewoman from Los Angeles amended it--you can use city money to demolish property when there is no owner. So, no, there is no--you don't write a check to someone who has abandoned the property.

I yield to the gentleman.

I reclaim my time to point out the evasion.

I yield myself another 30 seconds.

The gentleman made a big point of saying, buy the property from this person. He doesn't know who owns the property. No one knows who owns the property because no one owns the property. They walked away from it.

And what we're saying is part of this is not to pay off the bank. And I will say, last point, and as you know, the taxpayers shouldn't do it. In the bill that passed the conference committee which authorized this billion dollars, we said that the money should come not from the taxpayers but from large financial institutions that have more than $50 billion in assets and hedge funds with more than $10 billion. Republican opposition killed it. I'm going to refile that bill today.

So I invite my Republican colleagues to join me and we will sponsor this bill, and it's in the committee that the gentleman chairs. Let's pass a bill that says the money that will go to cities to knock down property where they can't find the owner will get it from the large banks and from the large hedge funds. And if the gentleman will agree with that, then this whole argument about the deficit will disappear.

But I will predict, Mr. Chairman, that they will find that that's not so persuasive, and they will put up with the deficit when it means saving money for the large banks.

Mr. Chairman, I yield myself 30 seconds.

First of all, this program has been going on for some time. If there were any of the horror stories to match those hypotheticals, we would have

heard from them. But I will say this to the gentleman from California. He admits under public safety, the city might have to go in and tear it down with no recompense. Here is my proposal, and I invite my Republican colleagues again to do this. Come back with us to when we had a bill that said, This program will be paid for not by the taxpayers but by an assessment on financial institutions with more than $50 billion in assets and hedge funds with more than $10 billion in assets. I will introduce this bill tomorrow. They can give us a hearing on it, mark it up, and it won't cost the taxpayers a cent. And it will save the cities money.

I now yield 3 minutes to the gentlewoman from New York (Ms. Velazquez).

(Ms. VELAZQUEZ asked and was given permission to revise and extend her remarks.)

How much time remains on both sides, Mr. Chairman?

I reserve the balance of my time.

I yield myself the balance of my time.

I appreciate the gentleman's acknowledgement. With all of their efforts, they are out finding pictures of abandoned houses, they couldn't find one example of where that abuse took place. In fact, there are a set of rules and restrictions that HUD has that I will submit under general leave. But again, let's review some of their errors. The fundamental error is the argument that this is a program which buys money from banks that have foreclosed and own the property. In fact, it is foreclosed and abandoned property. There are also entities that foreclose that weren't banks, that are not in existence anymore. Yes, it does not deal with all the properties. Where there is a responsible bank that you can go after, the cities go after them. But the suggestion that in Detroit, in Cleveland, in Boston, in Chicago, in all of our cities and in our rural areas there are no abandoned properties that lack someone you can sue is unreality. This is a triumph of ideological reflex over empirical observation. What this says to cities is, where you cannot find a responsible owner to go after, and the property is festering, if it's too far gone, you can tear it down. If it's not too far gone, you can take it and resell it for an affordable unit. Yes, it's got to be a limited income situation.

So that just disputes the whole notion that there's always somebody else you can get. But I still believe it's true that we shouldn't let this come from the taxpayer.

But I want to reiterate, and I'll make this offer. In the conference committee on Financial Reform, when this bill was passed--that's true also, by the way, of the emergency homeowners' relief--we said, let's not have it come from the taxpayer. Let's have it come from financial institutions with $50 billion or more in assets, except for hedge funds, where it's $10 billion or more in assets.

If that had passed, it would have cost the taxpayers, the general revenue nothing. It would not have added to the deficit. And to the extent that some financial institutions were benefiting,

they would have had to contribute. In fact, it would have had the larger financial institutions help the smaller financial institutions.

The Republicans killed that before, but I believe in repentance, Mr. Chairman. I believe in second chances for miscreants. I'm going to give, Mr. Chairman, my Republican colleagues a second chance. So for all their rhetoric about the deficit, here's the response. Here are the choices:

You can tell Detroit and Cleveland and other cities, you tear down that property when there's nobody else to go to and you pay for it and lay off some teachers and cops and firefighters, or you leave the property up there to fester. Or you do it our way. You join in assessing the large financial institutions. And I don't mean to demonize Citicorp or Bank of America, Goldman Sachs, Blackstone. These are decent people. They are trying to make a profit. I don't always agree with them. Why don't we let them pay the billion dollars?

So if there is a genuine concern about the deficit--I'm skeptical when people want to send the money to Afghanistan and Iraq and to Brazilian cotton farmers. Obama made them do that. Whenever they have a tough political decision, Mr. Chairman, Obama did it. Why can't they solve the problems of Fannie and Freddie? Well, Obama won't tell them how to do it. So they always hide behind the President when it's convenient.

But here's the deal. It is undeniable. Let's go back to the gentleman from Alabama. He found a building that was so decrepit he had a picture, and he said to us, You can go to the owner of that building and get the money. Well, he could find the building to take a picture, but he couldn't find the owner. Because I asked him, If that's the case, if we can go to the owner, tell me who the owner is and let's try and go after him. And he left the floor because he doesn't know who the owner is because in some cases nobody knows who the owner is because the property has been abandoned or it was foreclosed upon by an entity that's no longer in existence.

So join with us, make the large financial institutions and the hedge funds pay for this, and save the cities money that they do not have.

March 3, 2011.

Oppose Bills That Shut Out Homeowners and Abandon Communities

House Financial Services Committee, House of Representatives,

Washington, DC.

Dear Representative: The following civil rights and

consumer organizations are writing to urge you to vote

AGAINST the four bills coming before the House Financial

Services Committee tomorrow that would eliminate the primary

foreclosure prevention lifelines available to homeowners and

communities struggling to make it out of our economic

recession. For the reasons stated below, now is precisely the

wrong time to end these programs.

It is in the nation's interest to prevent foreclosures.

Everyone benefits when we can help families stay in their

homes. Preventable foreclosures cripple the overall economy

by adding vacant houses to the already flooded housing

market, further depressing housing prices and adding harmful

uncertainty to this critical market sector. An estimated

11.57 million borrowers--1 in 5--are currently in danger of

losing their homes. And unemployment and foreclosure now go

hand-in-hand. Despite the average length of unemployment now

at eight months, so many families who have lost their jobs or

seen a drop in income as a result of the recession are now

also losing their homes. We need to do more, not less, to

help these families and stabilize the economy.

It is in the nation's interest to bring communities back.

When families fail, communities fail. Families who have

suffered foreclosure will feel the impact of foreclosure for

years to come. Among many destabilizing consequences, they

must confront their lives' disruption, the loss of their

credit standing, and the higher cost and limited availability

of future credit. But the impact of the foreclosure crisis is

being felt far beyond the immediate home and neighborhood.

This crisis has devastated entire communities, which suffer

from a loss of community members, the disruption of community

institutions, a decline in property values, and an increase

in vacant and abandoned properties. Virtually every community

across the country is feeling the fallout in the form of

falling tax revenues and growing budget crises. Now is not

the time to cut the programs created to prevent the

foreclosures that fuel these broader problems.

Foreclosures continue to proceed at record levels, with

disproportionately heavy impacts on communities and families

of color, who are facing foreclosure at twice the rate of

other families because of discrimination. Foreclosure

prevention is a civil rights issue, and communities of color

are suffering a disproportionate loss of wealth. Several

studies have documented pervasive racial discrimination in

the distribution of subprime loans. One such study found that

borrowers of color are more than 30 percent more likely to

receive a higher-rate loan than white borrowers even after

accounting for differences in creditworthiness.\1\ Another

study found that high-income African Americans in

predominantly Black neighborhoods were three times more

likely to receive a subprime purchase loan than low-income

white borrowers.\2\ An analysis of loan, credit, and census

data has shown that even after controlling for percent

minority, low credit scores, poverty, and median home value,

``racial segregation is clearly linked with the proportion of

subprime loans originated at the metropolitan level.'' \3\

This research supports the conclusion that racial segregation

is itself an important determinant of subprime lending. The

resulting flood of high cost loans in communities of color

has artificially elevated the costs of homeownership for

residents of those neighborhoods.\4\

Homeowners need more help, not less, and the mortgage and

servicing industry has proven to be particularly ill-equipped

in providing it. A massive body of recent evidence exists

which shows pervasive lender foreclosure processing problems

and problems with mortgage transfers and assignments within

the securitization process. These shortcomings show a deep

disregard for legal requirements among lenders and servicers,

and also demonstrate that they are badly understaffed,

perform poorly, and lack accountability. Problems uncovered

in the foreclosure process mirror the problems that

homeowners seeking loan modifications have experienced:

borrowers frequently report an inability to reach bank staff,

loss of paperwork that they have sent in, and little

oversight or enforcement.

We cannot leave the important job of foreclosure mitigation

solely to an industry that has repeatedly refused to do the

job correctly. Just two days ago, HSBC suspended all

foreclosures after an investigation by federal regulators

uncovered ``problems in the company's processing,

preparation, and signing off of affidavits and other

documents supporting foreclosures, and in HSBC's management

of third-party law firms retained to carry out

foreclosures.'' \5\ Rather than eliminating the only

lifelines that help people from losing their homes, we should

be increasing that help. It is irresponsible to eliminate

these programs at a time when our nation needs them most.

Thank you for your consideration.

Sincerely,

Mr. Chairman, I don't think there's anybody exactly in opposition to the amendment because it doesn't do anything, but there is some opposition to the rhetoric; so I will claim the time in opposition to the gentleman's speech.

In the first place, there is a consistent misunderstanding on the Republican side manifested by their talking about this as a program that there was foreclosed property. That, of course, allows them conveniently to pretend that, for every piece of property that a city is stuck with, there is an entity that stood behind it that foreclosed and can be sued. But that's not true.

This is not only about foreclosed property. It is about foreclosed and abandoned property, and there is property that has been abandoned. It has been abandoned by the owner who's walked away. It has been abandoned by some financial institutions that did not have the substance of banks. There is demonstrably property in the cities which cannot be traced.

The chairman of the committee displayed a picture before of a beat-up piece of property and said, Look at this piece of property. It's so far gone, who would want to buy it?

We said, No one would. It should be demolished. Tell us who owns it.

He said, You can always find out who owns it--except for that piece of property.

So it's not just about foreclosed property. Somebody has to demolish property where there is no owner. Somebody has to demolish property where there is no responsible party standing behind it. I just left the Chamber to meet with three firefighters from the city of Fall River in my district. They were appalled at the notion that they would be left in the city of Fall River to deal with abandoned property, which is a set of fire traps, and not have any help. So for that reason, I believe that we ought to be clear that this is not about only foreclosed property. And some property, by the way, has been foreclosed upon by entities that are bankrupt, by entities that have no funds.

The other point I would make, though, is this. I do agree with my colleagues that we should do something about the deficit. Now, I wish that they listened to that when we subsidized agriculture or when we sent money to Afghanistan and Iraq for their social purposes. But I have an alternative. I will repeat again, and they'll ignore it all day, I know. In the bill that originally authorized this billion dollars, we required that it be funded not by the general revenues but by a special assessment on financial institutions that have $50 billion or more in assets and hedge funds at $10 billion.

Now let's be clear, Mr. Chairman. Members on the other side know this bill is unlikely to become law. Indeed, some have even said they understand the money will be spent before it can move. So the billion dollars is almost certainly going to be spent. My colleagues now have a choice. They can allow it to be spent by the taxpayers, or they can reconsider their opposition to our proposal of last summer and assess this on the large financial institutions and hedge funds. By the way, some of it, it is true, was caused by banks and some of it will go to banks.

But here's the answer. Instead of complaining that some of this will go to banks, join us and have it all come from banks and from hedge funds. But please, Mr. Chairman, let's not perpetuate the myth that, for every piece of property with which our poorer cities and rural areas are burdened, there is somebody they can go and sue and get it down. In fact, the gentleman from California himself has said, well, they can get a bulldozer and tear it down. Those bulldozers cost money. The people driving the bulldozers cost money.

So we believe that the approach should be to take money from the large financial institutions and from the hedge funds and take the billion dollars from them and provide it to municipalities and groups like Habitat for Humanity and others who will use it either to tear down the property, in some cases, or rehabilitate the property and make it affordable housing.

That, Mr. Chairman, is the choice between us. Again, I want to stress, this notion that it is only foreclosed property is a misstatement with a purpose, because it means that you ignore the fact that much of the property existing in the cities is abandoned and will only be dealt with by the city spending its own money or, by our preferred mode, having the large financial institutions and the hedge funds join us.

So I hope at some point today, one member of the majority will tell us whether or not they agree, Mr. Chairman, that if this program survives, we should get it not from the taxpayer and not from the property taxpayers of our cities or rural areas but from the large financial institutions. That's what I hope will happen.

Will the gentleman yield?

What if it is abandoned and it is of not much value and has to be torn down, so people buy it and tear it down?

Will the gentleman yield?

We were told, for instance, by Detroit and Cleveland, they have abandoned property. There is no owner they can find. Who's going to pay to knock it down?

Mr. Chairman, I ask unanimous consent that the voice vote by which amendment No. 1 was rejected be vacated to the end that the Chair put the question de novo.

Will the gentleman yield?

The gentleman is listing those numbers. Would the gentleman tell us what the maximum number is he thinks people should be eligible to get a house through the FHA and Fannie Mae and Freddie Mac.

Will the gentleman yield?

From my recollection, I was struck by the gentleman talking about those figures, that they were too high, because the last I heard, the gentleman and I were together in trying to establish--

Will the gentlewoman yield?

I just would say that the gentleman from California previously had agreed with some of us that you could be able to get a house in the FHA for up to $729,000.

Will the gentleman yield to me briefly?

I yield myself such time as I may consume.

I hope Members will be careful walking on the floor right now, especially on the Republican side of the aisle, because I wouldn't want anyone to fall into the enormous gap that has just been created between the gentleman's comments and his voting record.

Mr. Chairman, we heard a great argument about the need to cut the budget deficit and stop spending. During the recent debate on the budget, an amendment was offered to limit entitlement spending to farmers to $250,000 per entity. The amendment said no agricultural entity, no individual, could get more than $250,000 per year. It was defeated by the Republican Party. The majority of Democrats voted for it. It will cost $1 billion over 10 years--at least.

We had the Brazilian cotton farmers, but my friends on the other side hate for me to mention that because unpleasant reality is always bothersome. You know, over a 4-year period, we're going to spend more money subsidizing American and Brazilian cotton farmers than we are on this program.

The gentleman from Alabama said yesterday that it was Obama who made him do it. Rather implausibly, he argued that he was compelled to follow this recommendation of the Obama administration to send $150 million a year to Brazilian cotton farmers for 4 years because the President told him to do it. Well, that's a very selective invocation of the President, I must say--no more persuasive than Flip Wilson having invoked the devil as having made him do it, and of course there are sometimes analogies in the way in which they refer to the President.

One hundred fifty million dollars. Now, the argument, by the way, was that we have to send $150 million to Brazilian cotton farmers. The gentleman voted for it because otherwise we would be in trouble with the World Trade Organization. But we could have saved that $150 million to the Brazilians by not sending $150 million to the American cotton farmers. By the way, that would include American cotton farmers who could get more than $250,000 a year.

So we're not debating whether or not we should reduce the deficit. It is how. Do you exempt agriculture, as many of my friends do, because they represent agricultural districts? As for conservatism and the free market, it has got no application to the growth of cotton or grain or of many of these other programs that receive so much money.

Beyond that, we have the military. Now, we're talking here about trying to stop a serious economic problem in American cities. Well, we can't afford that, but $400 million was voted to be spent on infrastructure in Afghanistan. I do not think that that $400 million will be very well spent. I understand there are some national security needs, but I think that that war has gone on too long. And the notion of sending $400 million to build up the cities in Afghanistan and to deny helping America makes no sense.

We are also being told that we can send $1.2 billion for Iraqi security forces over and above what we spend on the American military. We are sending $1.2 billion. I voted against that. Members on the other side voted for it. The whole war in Iraq has been an enormous waste, in my judgment, of American money at the cost of American lives. Brave, young Americans went to war when they were asked to by their country, but it was a mistake for them to be sent there. The war in Iraq has so dwarfed any domestic expenditures in this area that I do not understand how Members can, on the one hand, talk seriously about cutting the deficit and then have voted for more and more and hundreds and hundreds and hundreds of billions of dollars for that war in Iraq.

Now we have another point that should be made. It is true this $1 billion that we are asking for--and by the way, according to the CBO, it will cost $840 million, not 98 percent in total expenditure, but 84 percent. It's still a high number, but $140 million is still $140 million. So this will cost $840 million, according to the CBO, if it is fully run. It is going to come out of the Treasury right now, but let's be clear: The reason it will come out of the Treasury as we try to deal with this--by the way, here is what the program is:

It says to Americans who took out mortgages and became unemployed that we will help them pay their mortgages because you can't afford mortgage payments out of unemployment compensation.

That's the lavishness of this program. We're taking people who are in trouble and facing losing their homes and having more foreclosures, which have negative effects not just on the individual foreclosed, but on the neighborhood, on the city, on the whole economy. So this has a macroeconomic impact, but we are going to come to their assistance.

In the financial reform bill passed last summer, we, in the conference committee, voted to take this money from an assessment on the largest financial institutions. We voted that financial institutions with $50 billion or more in assets and hedge funds with $10 billion or more in assets would have to pay for this. And our logic was that it was the activity of these institutions that caused the crisis that led to the unemployment and led to the foreclosures. Many of them profited from it.

And we then had the TARP--and this is money that we voted in the TARP in another set of programs--and we said, you benefited from intervention. We didn't do it because we loved you. We did it because we had to save the economy from going upside down. I know Members like to rail about bailouts, but let's be very clear: every activity in the United States--known as a bailout recently--was at the initiative of the George Bush administration or Mr. Paulsen and Mr. Bernanke. And they were bipartisanly supported, and I agree that we had to do them. We had to do them because of failures in past regulatory policy.

But the fact is that in the bill we passed last summer, this money wouldn't have come from the Treasury. It wouldn't have added to the deficit. It would have been recouped from an assessment on large financial institutions. The Republican Party blocked it--not here, they didn't have the votes here, as we don't often have the votes today, but in the Senate.

So I will make this announcement: I plan to reintroduce next week the provision of the financial reform bill that would have taken the money for this program and other programs to alleviate the impact of foreclosure--the Neighborhood Stabilization Program that helps get foreclosed property back into productive use, aid to the homeowners who are unemployed--and pay for it, as we tried to do last July but Republican opposition stopped us, not from the taxpayer, but from the large institutions. And I don't mean to demonize, but I think Goldman Sachs and Wells Fargo and the Bank of America and Citicorp and Morgan Stanley and the large hedge funds, I think they can pay for this. That's what we would have done. So I agree, this should not come from the taxpayer.

By the way, with regard to the bill we debated yesterday--and I regret not pointing this out, but, you know, you can only correct so much error in a limited amount of time. I talk fast, but error outpaces me when we get into these debates.

We were talking yesterday about money that was going to be spent in another program, the FHA refi. And people talked about $8 billion. Yes, $8 billion--it won't cost $8 billion--but $8 billion that was set aside, if necessary, from the TARP. And people said that TARP money was promised to go back to the taxpayers. It was, and here's how--Members may have forgotten this, having voted for it; but in the TARP legislation we added a provision that said in 2013, when the TARP is concluded, the President at that time is mandated to send to the Congress a bill that would recoup the funds that had not been returned to the Treasury from those large financial institutions. And we reiterated that in the financial reform bill over the Republicans' objections.

So the point is this: the TARP money that will be spent--if it is on the refinancing--and the TARP money that will be spent on the HAMP program will not come out of the Treasury. It will be reimbursed to the Treasury--if my colleagues on the other side go along with what we voted for--from the large financial institutions. So let's be very clear, whether we are talking about the programs in the financial reform bill or the programs in the TARP, they are a package of programs to deal with the consequences of foreclosure.

I must say, I saw a draft of my Republican colleagues' budget views, and they said--astonishingly--that spending TARP money to deal with foreclosures was inappropriate because those were unrelated to the financial crisis. Foreclosures unrelated to the financial crisis? That is an illogic that I am surprised at. Ideology drives you to certain ridiculous conclusions, but that one goes further into that than I would have thought.

So let's again be very clear. Our proposals are that the large financial institutions--assets of $50 billion or more, hedge funds of $10 billion or more, most of which would direct beneficiaries of our activity in dealing with the financial crisis that many of them helped cause--that's how we will fund these programs.

So with regard to the HAMP, with regard to the FHA refinance, no, that will not come out of the Treasury. That will be reimbursed ultimately, yes. The TARP money goes back and the law calls for that to be assessed. And so, yes, I understand my Republican colleagues, they don't want Goldman Sachs or Citicorp or any of the large financial institutions or any of the large hedge funds to have to pay the cost. But that's what the debate is, not the Treasury and the average taxpayer versus alleviation of foreclosure, the large financial institutions.

And, yes, they did succeed, temporarily, I hope, in changing that. They knocked out of our bill a requirement that the large financial institutions would help us mitigate foreclosures and help us have cities buy up property that is rotting and causing trouble; and, unfortunately, temporarily, that's not the case.

But I will file the bill next week. And given their concern for the taxpayer and the deficit, they will have a choice: do you add the cost of these programs to the deficit, because they're not going to become law, these repealers. The President is going to veto them. The Senate won't pass them even for him to do that. Are you then going to say that it will come out of the deficit, or will you join us in taking it from Goldman Sachs and Morgan Stanley and the Bank of America and those unreasonable institutions that do a lot of good work, but they can afford this $1 billion. Their bonuses alone would pay for these programs.

So let's be clear what the choice is. First of all, we have people who are prepared to send money to Brazilian cotton farmers so they can send money to American cotton farmers. They will not limit entitlements to agricultural individuals to $250,000 a year. They'll send billions to Afghanistan and Iraq that will be wasted, not for our defense, but to build up their infrastructure and their security. And then, when it does come to the relatively small amount that we will be spending on some of these programs, like $840 million here--and that's small compared to what they spend elsewhere, for instance, in their wars-- they would rather have it come out of the taxpayer. They would rather not spend it at all; but if they have a second choice, it comes out of the taxpayer and not out of the large financial institutions.

So let's frame the debate appropriately. The large financial institutions, because of inappropriate regulation and improper regulation during the Bush years--fairly, the Clinton years as well, but mostly the Bush years--provoked a financial crisis. We began to deal with it in 2008 in the last months of the Bush administration in a bipartisan way. We did it. We provided some funding in the first instance to those very financial institutions, not out of love for them, but because we thought that was needed to stabilize.

The requirement is that any money spent under the TARP will ultimately be recouped by an assessment on the large financial institutions. Apparently, the Republicans want to forget that one. They want to act as if it's the Treasury, apparently because they can't bear the thought of telling the large financial institutions, who were a large part of the cause of the financial crisis and benefited from our efforts to correct it, that they should have to pay.

And we do know that when we said this program and programs to give money to municipalities--which they very much want--to buy up property that would otherwise fester because there would be nobody to make them take care of it, that they prefer that to be paid for by the taxpayer than by the large financial institutions. We'll give them a chance to correct that mistake.

So I hope this bill is defeated. And next week we will have legislation that I hope our committee will be having hearings on and act on which will reinstate the provision that says all of the four programs we're dealing with this week and next week will be dealt with in one of two ways: it will be financed by the TARP, and that money will be recovered when the program is over by an assessment on the large financial institutions; and the smaller amounts that will go to this program, that money will also be recouped from the large financial institutions. And those institutions which received hundreds of billions--they have repaid it and it has been useful--but they were great beneficiaries of it. They caused some of the problem in general. They will be the ones that will bear the cost.

So that's the choice. We have a choice of doing nothing to alleviate the impact of foreclosures on the overall economy, on municipalities, and on families, or of doing something and recouping that money from the large financial institutions.

I hope that we will, in the end, decide that we were right to say that the large financial institutions can appropriately be asked to bear part of that burden.

I reserve the balance of my time.

I yield 4 minutes to the gentleman from North Carolina (Mr. Watt).

I yield the gentleman 1 additional minute.

I reserve the balance of my time.

I reserve the balance of my time.

I yield myself 15 seconds to note that I am not surprised at that, because there are people on the other side who think it's unfair to pay the unemployed anything, like unemployment compensation. So, no, I don't think it's unfair to say to people who are unemployed in this economy that they will get some economic help. And that's what this is about.

I yield 3\3/4\ minutes to the gentlewoman from New York (Mrs. Maloney).

I yield 3 minutes to the gentleman from Texas (Mr. Al Green).

Will the gentleman yield?

There were two ways we could have dealt with it, yes. The gentleman and the Obama administration on one side. I disagree with the President. We could have avoided that by reducing American cotton subsidies to the same amount as we did with Brazil. So we could have either saved 300 million or not.

How much time remains, Madam Chair?

May I inquire, do we have general leave?

I yield myself the balance of my time.

First of all, the last statement is, of course, totally contradictory from the gentleman from Texas. But when you just want to bash things, you will say anything.

You cannot simultaneously say this program is too generous because of its forgiveness and is a predatory loan. The fact is it has very generous forgiveness provisions, which is why it is scored at 84 percent, not 98 percent. So that argument the gentleman just made is, of course, entirely self-contradictory because it can't be both.

Secondly, as to agriculture, I did vote for an amendment that would change it, but the gentleman, the spectacle of my Republican colleagues hiding behind Obama is bizarre. You could have done what we have offered, which was to cut the $150 million from going to Brazil and then cut it out of America. But it's not the only item I mentioned.

I mentioned the $1.2 billion the gentleman wanted to send to Iraqi security forces, the 400 million to build infrastructure in Kandahar and Kabul, the $250,000 limit the Republicans rejected on individual entities. So, no, there are billions in agriculture and the military. I didn't just mention one item.

The gentlemen do understand that they are vulnerable, so they blame Obama. They and Obama are both wrong about sending money to Brazil. But the most important point is this, and I hope in his final time the gentleman from Alabama will address it.

In the first place, on two of these programs--the HAMP Program, which we will deal with next week on the floor, and the FHA refi--the money doesn't come from the Treasury. They keep saying it, but they are wrong, and ignoring a fact doesn't make it go away. Those are funds that come from TARP.

In the financial reform bill, we reinforced an earlier provision. It says, the FDIC ``is authorized to conduct risk-based assessments on financial companies'' to pay for this, the money that's left in the TARP. We have a mandate to the FDIC so that when the TARP is finished, large financial companies will have to pay this, not the Treasury.

So I know that troubles people on the other side. They are solicitous of these large financial companies. But when they talk about it adding to the deficit, they are wrong. It is statutorily required that this will come, over their objection, from the large financial institutions.

As to the other two programs, including the one today, we had similar language in our bill to do that. It was rejected by the Republicans because we needed to get 60 votes in the Senate. So, yes, for now, that 840 million will come out of the taxpayer. If we had our way and the Republicans had not been successful in frustrating us, it would have also come from Goldman Sachs and from Morgan Stanley and the other large institutions, and I will give them another chance.

So the fact is that the bulk of this money does not come from the Treasury. It is mandated that it will be repaid back to the TARP, and I hope the gentleman from Alabama will address that in his final remarks.

Is he for repealing that? Does he believe we should not as we have said we would twice legislatively, including on one bill he voted for, assess the large financial institutions and hedge funds? Does he want to take it off? But of course if he doesn't, it doesn't come from the Treasury. It doesn't add to the deficit. It may reduce the bonuses at some of the large financial firms, it may reduce the dividends at some of the large financial firms, but that's not adding to the deficit in a way that we care about.

And as to the other money, the money for the Neighborhood Stabilization Program and for this program, if they will come back with us and join, that also will come from the large financial institutions.

So let's drop the phony arguments about the deficit. If you want to protect the large financial institutions, be honest about saying so.

Will the gentleman yield?

Would the gentleman tell us from what party the Governors of Pennsylvania have come during this period?

I move to strike the last word.

First, let me address the wholly contradictory argument of the gentleman from Texas (Mr. Neugebauer).

We have heard on the other side, through the eagerness to just say negative things, two entirely contradictory things: one, that this is too lavish a subsidy to the homeowner and, two, that it will further indebt the homeowner.

Members do understand that they cannot possibly both be true. In fact, there is a significant element of subsidy here, and those who take this money and who pay off their mortgages will get a subsidy so they will not be further in debt.

The argument just made by the gentleman from Texas (Mr. Neugebauer) is wholly without basis. The argument that it is a more generous subsidy is a more accurate one. By the way, even if they were to pay it back, avoiding late fees and interest helps them out.

I yield to the gentleman from Texas.

Reclaiming my time, no, that's not what the gentleman is saying. The gentleman is completely contradicting himself.

He says it's a grant program. First, he was contradicting the other gentleman from Texas. Now he's contradicting himself. He said it's a grant program. Well, if it's a grant program, why did the gentleman say it was getting people further in debt?

The gentleman has been caught in a totally contradictory argument. He did not say it was a grant program. He said it was getting people further in debt.

I yield to the gentleman from Texas.

I'm sorry, I reclaim my time. I will yield if you want to clarify what you said. You had your 5 minutes. I'm not going to yield for general philosophy. I'm sorry, but it's my time. I was yielding if the gentleman thought I was misinterpreting him. For him to simply repeat what he already said takes time that I don't want to give him.

He did contradict himself completely. First, it was a program that was going to put people further in debt. Now it's a grant program. He can decide which it is.

I now want to go back and make my central point, which is that the only reason this has any impact on the taxpayer is that the Republicans insisted on protecting the large institutions. The gentleman from Alabama said all this money is going to the large institutions. Well, that's not true, because it does go to pay off loans to keep people from being foreclosed. Some will go to smaller institutions. Some will go to credit unions. Some will go to community banks.

But here is the point: under our proposal, which the Republicans temporarily blocked--and I hope they'll repent--all of the funding would have come from the large institutions, but the Members don't want to address that. Under our proposal in the bill that passed--and we had to amend it, and we're going to try and come back and change it again-- every single penny that will be expended here will come from institutions of more than $50 billion in assets and hedge funds of more than $10 billion in assets.

So, if you do it our way, not a penny will come from the taxpayer. It will come from the large financial institutions. And, yes, it will be a help to these individuals. Some of them will pay some of it back, but they won't have late fees. And, yes, the gentleman was correct when he said the second time around that it could become a grant program.

I will now yield to the gentleman from Texas if he can explain to me how it can both be a grant program and something that gets people further in debt.

I understand it's going to be primarily-- --

I'm sorry. It's my time. You asked me a question. I'm going to answer it. I will note you don't want to answer the question.

I am being consistent. Yes, I think it will work out for most people as primarily a grant program, 84 percent. I am pointing out that the gentleman is trying to cover his own embarrassment because he made the argument without any basis that it was going to put people further in debt. He then acknowledges that it's a grant program. People do not become further indebted when they receive grants.

So, yes, it will work out for people who are responsible, to a great extent, as a grant program. That's why the CBO says 84 percent will be spent. That 84 percent in our bill, as we did it, would come from the large financial institutions. I don't want it to come from the taxpayers. While temporarily it now does, we will be offering a bill--I hope the committee of which the gentleman is an active member will give us consideration--so we can amend the law under which this program is authorized so that every penny, whether it's loans or grants or some combination--it will be primarily grants--will

come from the large financial institutions and not a penny from the taxpayer.

I yield to the gentleman from Texas.

It will work out as a grant.

Again, I am struck by the gentleman from Texas. He is the one who said it was an excessive loan program and a grant program. He has made two entirely inconsistent statements in a very short period of time. Even for a politician, that's a record for self-contradiction.

The point is that it is both a grant and a loan. It will be primarily a grant.

Madam Chair, I move to strike the last word.

The gentleman from Texas who consecutively denounced this program for putting people in debt and for being a giveaway grant asked me whether it was designated as a loan or a grant. The answer is neither. The program is called the Emergency Mortgage Relief Program, meaning it leaves open what kind it would be. So that's the answer to his question, and that's why some of us were less confused than others of us.

I yield to the gentleman from Texas.

Reclaiming my time, the gentleman gets himself further and further in the hole when trying to explain his contradictory statements.

The facts are very clear. He began by saying it was going to put them further and further in debt. That, of course, contradicted his colleagues who had said it was going to be too much of a subsidy. In fact, it does not say ``loan'' or ``grant'' in the title. It says ``emergency relief,'' and it does provide for a loan and forgiveness.

So I am sorry the gentleman got himself tongue-tied, but don't blame the bill.

I yield back the balance of my time.

Madam Chair, I move to strike the last word.

Madam Chair, I have to respond to what I just heard because it simply isn't true. The notion that the government directed people to make these loans is not true. I don't understand what directive the gentleman is referring to. I would be glad to yield to him.

What policy of the Federal Government, what law directed people to make loans of 120 percent loan-to-value?

I yield to the gentleman.

I reclaim my time.

Understand the difference, ``directed'' and ``allowed.'' Fannie Mae and Freddie Mac never originated a loan. They could not have directed anybody to do anything. They were the secondary market. Fannie Mae and Freddie Mac could only get into action if some private entity made the loan in the first place. Beyond that, during the period when we had the increased subprime loans, which some of us were trying to ban, Fannie and Freddie were in a declining percentage.

But I will yield again to the gentleman to tell me who directed the private sector to make these loans.

I reclaim my time.

I want to say to the gentleman, we are here in the House of Representatives making policy. You have got to be precise. I would say to Members about what you say, ``directing'' and ``allowed'' are two very different things. It is one thing to allow it.

By the way, when you were talking from the perspective of the private sector, it's a very big difference. And there are many things that the government allows that I wouldn't direct. There are things it allows that I wish people wouldn't do. But the gentleman didn't say ``allowed''; he said ``directed.'' That's simply wrong. I asked because--and he didn't say this, and I acknowledge that, but there were some who tried to blame the Community Reinvestment Act.

I should note that in the Financial Crisis Inquiry Commission, three of the four Republican appointees, including Bill Thomas, our former colleague here, chair of the Ways and Means Committee, and Douglas Holtz-Eakin, who was the chief economic adviser to Mr. McCain, specifically repudiated the notion that the CRA had caused this. So we ought to be very clear.

I yield to the gentleman.

I was not talking about Republicans making mistakes. I have no idea what that's

supposed to contribute to the debate. I was citing two responsible and thoughtful Republicans, the former chair of the Ways and Means Committee and Mr. McCain's chief budget adviser, plus all of the financial regulators under both Bush administrations who said CRA wasn't the problem.

Now, the gentleman didn't say that it was. Some people have said that, because CRA did have some kind of more mandatory position, but it wasn't for those subprime loans. In fact, with regard to the loans the gentleman is legitimately complaining about, it was those of us on the Democratic side who tried to ban them. Beginning in 2004, the gentleman from North Carolina (Mr. Miller), the gentleman from North Carolina (Mr. Watt), I joined them a little bit later, tried to outlaw those loans. And we were blocked by people who said, No, that's a mistake.

In fact, in 2007, when this House, when we became the majority, finally did make illegal many of those loans in a bill, The Wall Street Journal denounced us and said we had created a Sarbanes-Oxley restriction for housing.

So I just want to make it clear that there was no direction by any entity of the Federal Government. The gentleman appears to acknowledge that when he said, well, Fannie and Freddie allowed it. That's a long way from saying that it was directed.

I yield to the gentleman from Michigan.

You've got to move quickly. I have only got 5 minutes here.

I am reclaiming my time. The gentleman is using it up with the papers.

Here's the deal: 1975 is when it happened in Pennsylvania, not in America, if he had been listening carefully. Secondly, in 1995 we didn't have this foreclosure crisis. Third, as to was this just a new program, in fact, this program for the 32 States where it will operate is based on the program which operated in 18 other States, so we have had experience with it.

By the way, the gentleman from Alabama's Governor praised this program in his State where it operated. The Governor of New Jersey, Mr. Christie, praised this program.

So this is a new program for these 32 States, but it is modeled on a program that has worked successfully in these other 18 States. In 1975, it was Pennsylvania, not the United States.

I yield back the balance of my time.

I yield myself such time as I may consume.

First, for people trying to follow this, the gentleman from Alabama has confused several programs in this conversation, most of which aren't up today. We are dealing with one at a time. He talked about money that went to Los Angeles and went to a group instead of the county. That has zero to do with today's program. Zero. And in fact, it doesn't have to do with individual homeowners. It's a program that gives aid to municipalities, which we will be debating later, probably next week, which gives aid to municipalities to deal with property that they have been stuck with. So it has nothing to do with today.

But the gentleman does make a good point about the deficit. Unfortunately, he does not put his votes where his rhetoric is. The CBO says that this program is going to cost not $8 billion, but if it's fully operational over a 2-year period, which is its life span, will cost $175 million.

Now, that's money. But do you know what it is? It's much less--and the gentleman from Alabama voted during that same period to send money to the cotton farmers of Brazil. We do have a debate about the deficit here, but it's not about whether to reduce it. It's how.

The gentleman from Alabama, along with the majority of Republicans voting, defeated an amendment--with some Democrats, although the majority of us voted for the amendment--to stop sending American tax dollars to subsidize the cotton farmers of Brazil. In the 2-year period during which we will be dealing with this program: Brazilian cotton farmers--$300 million. Americans facing foreclosure--$175 million. The gentleman from Alabama has a very odd way of saving money on the deficit.

Then he says we have winners and losers. Well, among the big winners under the Republican budget and with the majority of their votes are the farmers who receive more than $250,000 per year in subsidy. Whatever happened to free enterprise? Whatever happened to standing on your own? An amendment was offered to limit to a measly $250,000 the subsidy any one entity could get. The gentleman from Alabama voted ``no.'' That was too harsh. The gentleman from Alabama is for unlimited amounts of subsidy to go to a handful of farmers--but no--we can't spare much less than that over the time period because, in the time period of this bill, that would have cost $200 million, or $100 million a year.

Then the gentleman quoted the Secretary of Defense, that we should pay more attention to the Secretary of Defense because he, along with many Republicans, voted to force money on the Secretary of Defense that he didn't want. He voted to fund the programs the Secretary of Defense didn't want. He's trying to get some reprogramming now, but the Republican Appropriations Committee won't allow it. By the way, I don't agree with the Secretary of Defense fully on this either.

I disagree with the gentleman from Alabama and the Secretary of Defense because they don't want to spend $175 million in 2 years trying to deal with foreclosures in American cities. Instead, they want to send more than twice that amount to Afghanistan for its infrastructure. You talk about inefficiency. Does anyone think that President Karzai and his administration are going to spend the $400 million my friend from Alabama has voted to send toward Afghan infrastructure projects better than we would spend it here?

How about $1.2 billion for the Iraqi security forces at a time when American municipalities are having to lay off police officers and firefighters and other essential employees? The gentleman from Alabama voted to send $1.2 billion to the Iraqi security forces. Does anyone here have a great deal of confidence in how efficiently they'll spend it?

Now let me address a couple of mistakes the gentleman made specifically about this program:

The $50 million is not being spent on 40 people; $50 million hasn't, in fact, been spent at all. Not a penny has been spent. The $50 million was reserved out of TARP money to cover losses if they were to occur. The CBO does say, yes, if this program is fully funded and if it gets the participation they expect, the total amount of losses will be $175 million, not $8 billion. The $8 billion was a resurrection on the TARP for technical reasons. The CBO says, full scale, this will cost $175 million--again, less than the gentleman of Alabama wants to send during that period to Brazilian cotton farmers.

Now, as to the people who vote consistently, as some do, to cut money for Afghan infrastructure or for Iraqi security forces or for Brazilian cotton farmers or for American cotton farmers or for other recipients of subsidy who then are opposed to this program, I honor their integrity. I disagree with them in some ways, but I honor it. Yet I cannot accept the lecture on fiscal responsibility from someone who votes to lavish money in wasteful ways on Afghan cities but begrudges it in American cities; who would send it for Iraqi police officers but not for American police officers; who would send it to cotton farmers and to other farmers in America but not to struggling homeowners.

This program has started slowly. By the way, there's a great contradiction between saying it has only helped 40 people and that it's going to cost $8 billion. If the pay starts to increase, it won't cost the full $175 million, but here's what we hope:

There are negotiations going on now to allow people the benefit of a refinancing. The gentleman says it's not going to take care of everybody. Of course not. There is not one program that is fit for everybody. There are a series of programs for people in different circumstances, and this is one for people who could benefit from a lower interest rate and a refinancing but who are under water and can't do it. It induces the financial institutions to do it. It's voluntary. If financial institutions find this is unreasonable, they won't do it.

There is an effort going on now to achieve a negotiated settlement involving the services of financial institutions, many of which are quite culpable and have misbehaved in this process, so these are not innocent victims being shaken down. The Attorneys General of every State, Republican and Democrat, and the regulators are trying to come up with a solution.

This is the other point that gets lost in the rhetoric when the gentleman who was so eager to send money to Brazilian cotton farmers begrudges a small amount going to Americans facing foreclosure, which is that the foreclosure crisis is not just a crisis of individual families. It's a national economic problem. It's a macroeconomic

problem. To the extent that we do not do something to retard the rate of foreclosure, then we make it harder to get out of the economic bind in which we have found ourselves, which, as the gentleman correctly said, started from the meltdown of 2008, and we have been getting out of that at too slow a pace. Dealing with foreclosures is a part of it.

This program has not yet become fully operational--and it may never be--but it is here to be used as a tool, especially if we are ever to get the agreement among the Attorneys General from both parties, the regulators and the financial institutions. It is a responsible way to deal with this. It will cost less than many of the unnecessary agricultural subsidy programs.

I've got to say, Mr. Chairman, that I've got to go reread. Maybe I missed a footnote. I know there are these great free market economic texts by Ludwig von Mises and Friedrich Hayek and others. They talk about free enterprise, about keeping the government out of business, and about letting the free market work. Apparently, there is a footnote that says, oh, except agriculture. Overwhelmingly, my Republican colleagues preach this to working people, to people in urban areas and to people in other jobs, but it doesn't apply to cotton farmers or to wheat farmers or to corn farmers or to grain farmers. Billions of dollars go to them.

As a matter of fact, as the gentleman from Alabama said with his vote: How dare you limit some farmer to a mere $250,000 in entitlement subsidies? Because agriculture is an entitlement, but they don't talk about that. They want to talk about Social Security for the elderly, but they don't want to talk about entitlements for agriculture.

I do believe we need to cut the deficit. I think we can cut back substantially in what we're doing in Afghanistan and Iraq. We can cut back substantially in agriculture. We can put limits elsewhere, which I would like to do. I would throw in that I did not think it was a good idea to reduce the estate tax that the heirs of William Gates and Warren Buffett are going to have to pay. Although, to the credit of Mr. Gates and Mr. Buffett, they didn't think so either. They weren't for substantially reducing the estate tax on people who were going to be inheriting--not earning--tens of hundreds of millions of dollars.

My colleagues over there, and some here, have supported all of that, and then have said we cannot put a program out there that will help Americans facing foreclosure--and not simply to help them but to help the cities and to help the whole economy. There is a great consensus among economists that dealing responsibly with foreclosures is the way to deal with this.

So, no, please don't believe in $8 billion. It's not that. The CBO says it's $175 million. And $175 million is considerable, but I will repeat that it's less than my friends want to send to Brazil. It's less than they want to send to build infrastructure in Kabul and Kandahar. It's less than they want to spend to police Fallujah. You know, if I thought that latter set of funds were going to be well used, I might feel better about it, but we know how corrupt it is.

There is a double standard, let me say finally. Expenditures within the United States are held to a very, very strict accountability, but as to expenditures in Iraq and in Afghanistan and elsewhere in the world, we know how much more wastefully and corruptly spent they are, and that doesn't seem to bother other people.

I reserve the balance of my time.

I yield myself such time as I may consume.

Two points: First, you have just heard a fantasy that $50 million has been spent for 42 loans. That is not even remotely close to being true. Fifty million has been set aside in a reserve for defaults if and when they come. Not a penny of it has been given to anybody. It is simply sitting in that account, in case, and the 42 loans have nothing to do with that.

Yes, the gentleman from Alabama said I didn't talk about it. I did talk about it. I corrected the misuse of the 50 million from last week. He didn't misuse it today. And I mentioned that it started slow and it may not get beyond where it is now. I mentioned that it is in reserve to use it more. So, yes, we have only got 42. I talked about that.

The 8 billion is a fantasy. The CBO says at it's best, this is going to cost $175 million. The 8 billion is a purely bookkeeping account.

But I want to get back to the fascinating explanation by the gentleman from Alabama as to why he and the majority of Republicans voted to send $150 million per year last year, this year, and for the next couple of years to Brazil: Obama made him do it. Listen carefully. The explanation for this expenditure to go to Brazil, that the poor gentleman from Alabama voted for, is Barack Obama made him do it.

The President is a very convenient place for them to hide. In fact, if he is asking me if I am critical of the President in that, yes, I am critical of the President many times. I agree with him overall. But I did not agree with him that we should send 1.2 billion for Iraq security forces. The gentleman from Alabama did. I didn't agree we should send $400 million for Afghan infrastructure.

The gentleman seems to think it's some major debating point because the President takes the position that I disagree? Perhaps his view is you always agree with the President of your party. It's not mine. It's not a responsible way to legislate.

Secondly, there was an alternative to sending $150 million to Brazil. We could have sent $150 million less to Americans. The finding was that we were putting Brazilian cotton farmers at a $150 million disadvantage per year because of the subsidy we gave to Americans. We could have come in with legislation that would have reduced the Americans'.

So, in fact, I underestimated the waste of money that the gentleman from Alabama is indulging because Barack Obama made him do it and he was powerless to resist, apparently, because it's $300 million a year.

We had two options: We could keep the level of subsidy for American cotton farmers and match that to the Brazilians, or we could reduce it by $150 million in America and reduce it to Brazil over a 4-year period when this will be in effect. That's over a billion dollars, a considerable amount of money.

So, yes, it is true, the President sometimes makes unwise recommendations, in my judgment. But the argument for the gentleman from Alabama that he is to be absolved from responsibility for his vote, and the majority of Republicans--the majority of us on our

side repudiated the President's position in this case. But the gentleman from Alabama has claimed, Don't blame me; Obama made me do it is no more credible than his invocation of some fantasy figures.

I reserve the balance of my time.

I yield 5 minutes to the gentleman from Massachusetts (Mr. Lynch).

I yield myself 30 seconds simply to say the gentleman has simply repeated an absolute fantasy. This is not a $50 million expenditure for 40 loans. The $50 million has not been given to anybody, not

a penny of it. It has been put in a reserve account. Fifty million has been set aside in a reserve account. It was disbursed from the TARP to a reserve account. The CBO, as I've submitted if this goes forward, it will be about $12,000 per loan.

Last week, the gentleman from Illinois was claiming that if you participate in this program, you would have a tax liability. He learned that that was totally wrong. He is perpetuating error.

I now yield 2 minutes to the gentleman from California (Mr. McNerney)

I yield myself 15 seconds to further elucidate matters to the gentleman from Illinois. It has been disbursed in a letter of credit, none of which has been drawn down. It sits there as a reserve in case of losses.

I now yield 3 minutes to the gentlewoman from New York (Mrs. Maloney).

I yield 4 minutes to the gentleman from North Carolina (Mr. Miller), one of the leading House experts on this matter.

I yield the gentleman 1 additional minute.

How much time is remaining on both sides, Mr. Chairman?

I have only one remaining speaker. I will defer until the gentleman has his last speaker.

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

A week ago when we debated this in committee, the author of the bill, the gentleman from Illinois (Mr. Dold), was telling people that if they joined this program they would have a tax liability. He was wrong. It wasn't his fault. He was told that that was the case. He dutifully read what he was told. You haven't heard that again because he found out that was wrong.

He was also told that it was going to be $50 million disbursed. They don't seem to be clear on what that means. No, $50 million has not been spent on any individual. Fifty million has been set aside in a letter of credit if necessary in the future to pay for defaults. So this million dollars per loan is, of course, a fantasy.

Now, it is true, the program has not yet had a major impact. And if it does not prove itself out, it never will. It cannot be both wildly expensive and nonexistent. It is there. If we get an agreement involving all the attorneys general of both parties, involving the regulators and the financial institutions, this will be one of the tools that will accommodate people. CBO does think there could be a loss. Their prediction is, their best guess--and they're the best objective element we have--you could get an amount of $12,000 or so per loan lost here. Not a million dollars; 12,000. It is part of a panoply of projects to try and reduce foreclosures and help the economy deal with this crisis.

And for people who, and I repeat it--they don't like it--they'll send money to Brazil, they'll send money to Afghan cities, they'll send money to Iraqi security, they'll subsidize farmers at more than $250,000 a year, but $12,000 per homeowner at most is too much for them. And it isn't just for the homeowners; it is a necessary part of getting out of our economic crisis.

So I hope that this is defeated. I appreciated what the gentleman from Nevada said. Yes, it can be improved. The fact that only 44 people have been involved so far means they are proceeding, appropriately, cautiously. This is a program with great promise. It may not turn out, but if a promise doesn't turn out, then it doesn't cost anything. And if it does turn out to be a workable part of an overall solution, it will be money much better spent than many of the billions my colleagues on the other side are prepared to subsidize some of their favored sacred cows as opposed to doing something that will help the whole economy.

I yield back the balance of my time.

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

First, I would repeat that I am glad to hear the support for Admiral Mullen--earlier we heard of Secretary Gates--in their warning about the deficit. I just wish that all of those who were accepting their warning on the deficit would refrain from forcing money on them that they don't want. We have people citing the military leadership and then voting for weapons systems, swelling an already swollen military budget, that they don't want.

As to this amendment, I am tempted to come to the defense of the drafters of the bill, because if you read the bill, the bill purports to do what the amendment purports to do. Apparently the author of the amendment didn't think the bill did a good enough job, or somebody thought the author of the amendment, being a nice fellow, ought to get in on the credit. So this is an amendment that is either editorial refinement or political redundancy. In either case, it does not have much effect; so I urge the Members to adopt it.

Madam Chair, I move to strike the last word.

Madam Chair, I regret the fact that my colleague from Massachusetts, who is a good lawyer and a careful student of what we do, has drafted a very specific amendment aimed at a particular point. He has been answered with a lot of general rhetoric, and I don't think his point was understood. The gentlewoman simply repeated general rhetoric about the bill.

He is not trying by the back door to reestablish this program. He has talked to thoughtful people, and is worried about an overreach. I think the only thing we're seeing now is pride of authorship by whoever drafted this bill for them. The gentlewoman from Illinois is, as I said, using a lot of general rhetoric, which is totally unresponsive to the very specific point my friend from Massachusetts made.

With that, in the hope that if he says it again he might get them to pay attention to the specifics, I yield to my friend, the gentleman from Massachusetts (Mr. Lynch).

Reclaiming my time, the problem is the ambiguity is substantially similar. It kills this program, but it bans things that would be substantially similar so that innovator private sector entities trying to do something would be deterred because no one could tell them what substantially similar is.

I yield to the gentleman from Massachusetts.

I yield at this point to the gentlewoman from Illinois (Mrs. Biggert) to respond.

Reclaiming my time, because the gentlewoman is simply not responding, we have the same general rhetoric.

The point, as my friend has pointed out, is you were introducing an ambiguity which is substantially similar so that people will be deterred from further innovator activities.

I yield again to my friend from Massachusetts.

Madam Chair, I demand a recorded vote.

Madam Chair, I move to strike the last word.

Madam Chair, the gentleman from Texas (Mr. Al Green) in the committee offered amendments that would have provided some substantive protection to veterans.

My Republican colleagues neither wanted to provide help to the veterans nor be caught not providing the help. So they came up with some study amendments that would give them the appearance of being concerned, but no reality. That was, unfortunately, adopted over Mr. Green's objections and mine, but it's part of the bill.

This is in addition to what is largely a cosmetic amendment, and I see no reason to object to it or prolong the debate, so I urge everybody to vote for it.

I yield back the balance of my time.

Mr. Speaker, in a very thoughtful editorial on February 24th, the Financial Times, a widely-respected voice of a responsible free market approach to the economy, expressed strong criticism of the reductions in the budget requests that were made for the Securities Exchange Commission and the Commodities Futures Trading Commission. These two agencies were given significantly enhanced responsibilities in the recently passed financial reform bill, and the Republican budget means that, most glaringly but not exclusively, derivatives will continue to lurk in the shadows of the financial system with their great potential for harm when improperly governed.

The Financial Times, not given to radical thought, closed this editorial by noting that ``If the Republicans want another financial crisis, they are going about it the right way.''

Mr. Speaker, few public policy issues are as important to us as avoiding the disaster of another financial crisis and its consequent plunging of the economy as a whole into deep recession and so I ask that his important editorial from the Financial Times be printed here.

[From the Financial Times, Feb. 24, 2011]

Editorial: Funding Regulators

The Dodd-Frank financial regulation law passed in July 2010

was a far-reaching effort to promote financial stability.

Whether the legislation can achieve that goal, though,

depends on how it is implemented. On this, there are some

worrying signs. The House of Representatives has voted to cut

funding by a third to the Commodity Futures Trading

Commission. It also stripped $25m from the Securities and

Exchange Commission. Squeezing two of the most important

regulators jeopardises the progress made in creating a safer

financial system.

Too much regulation did not cause the financial crisis. In

the last decade, the SEC and CFTC have anyway been stretched.

Over that time, the industry's complexity and size have

grown. Technology has also changed the way markets operate,

and regulators are as yet inadequately equipped with tools to

monitor that change.

Even if the remit of these two bodies had not expanded,

therefor; to cut their budgets would be ill-advised. To do so

when Dodd-Frank has added to their tasks, is irresponsible.

The White House understands this: the proposed 2012 budget

would nearly double the CFTC's funds and increase the SEC

financing by a fifth.

It is imperative that the SEC and CFTC are properly

resourced. They are already behind schedule in writing the

regulatory detail. This strain is particularly acute for the

CFTC, which is taking on a proportionately greater burden

under Dodd-Frank: previously unregulated derivatives fall

largely under the CFTC's purview.

The current funding model is not the only option. User fees

could be a viable alternative to congressional financing.

Some other financial regulators already self-fund; the SEC

partly does so. The futures industry has lobbied against this

model for the CFTC. What matters most, however, is that

regulators receive enough funding without strings attached.

The pressure to cut the SEC and CFTC budgets is part of the

Republican war on the White House. Dodd-Frank is not perfect,

but it improves on what came before. It cannot work, however,

if politicians do not support regulators' efforts. If the

Republicans want another financial crisis, they are going

about it the right way.

Madam Chair, I think if we were to have a contest on your YouCut for the single stupidest thing the Federal Government could do, it would be to take $120 million more of American tax dollars and send it to subsidize Brazilian cotton farmers so we can continue to subsidize American cotton farmers. That's what we're talking about.

I find it somewhat ironic that my friends who are the great believers in free enterprise and the free market think somehow there's an exception for agriculture. But whether you do or you don't, sending money to Brazilian cotton farmers at a time when we are making fundamental cuts here is problematic.

It also illustrates my problem with the structure of this bill. I was hard-pressed to find offsets so we could continue to fund enforcement of securities fraud or consumer protection. Where could we have gotten the money? Well, we could have gotten it from Brazil. Instead of sending it to Brazilian cotton farmers, we could have used it for our own law enforcement. But the bill is structured to protect this. At least we cannot waste it.

So let's be very clear. To protect our right to continue to subsidize American cotton farmers, we are going to subsidize Brazilian cotton farmers. Lunacy.

As I understand the arguments of the chairman and the ranking member, it is we are going to get rid of these eventually, but let's not do it too quickly because we might save money prematurely. I have never heard a weaker defense for continuing to spend money, that at some point we are going to stop. So why not stop now? So I think the gentleman from Wisconsin ought to be supported.

Will the gentleman yield?

I gather unanimous consent may be propounded to reduce debate time. I just want to stress we were told yesterday we were debating the whole government. We were then going to debate important public policy questions for 10 minutes. We're now going to get the privilege of debating important public policy questions for 6 minutes.

If this is open government, I think I'm going to have to look for something else because, I think it is, as I said yesterday, a travesty. I do think we ought to make clear what we are talking about. Important public policy questions being debated for 3 minutes on each side. That, as I said, is a travesty.

Will the gentleman yield?

Well, I didn't know how long it was going to take my Republican friends to going from talking about their superior virtue to saying they were just like us. It took less time than I thought.

But I would also say that, in the bills that came out of the committee that I chaired, we always had debate, and we always had open rules. But if the gentleman is saying that he now understands why the people on our side did what we did--and I often disagreed, as I said-- he got there more quickly than I thought he would, and that may be the only thing about the way they're running the House that has happened more quickly than we thought it would.

Mr. Chairman, in the Magnuson Act renewal of 2006, we set up a procedure whereby there can be a referendum in each fishery to do the equivalent of catch shares. NOAA's getting around that. There are some places I'm told where people like that.

The procedure under the Magnuson Act whereby they can, by referendum, impose that remains available but it would require the approval of the men and women in the fishery. In much of the east coast, people don't like that. And what NOAA is doing is going around that referendum requirement by a new thing which they call catch shares. They can do the equivalent in another way.

I am particularly puzzled to have in the Obama administration people tell us, Well, it's okay. What it does, of course, is to lead to consolidation. They say it's the same amount of income, but it goes to a small number of larger entities, and the smaller individuals are frozen out. And in the area that I represent, the fishing industry doesn't want it.

So what I hope we would do is--and the gentleman's amendment does not affect that part of the Magnuson Act that would allow referenda, so that when the fishery, where the fishermen like it, they can get a system of quotas, and they can get a system of the transferable quotas. And that's what's in the Magnuson Act, transferable quotas with a referendum because they couldn't--NOAA was insisting on imposing that over the objection of fishermen. They've come up with a new system called catch shares. That's what we're banning. We leave the referendum process in place.

Will the gentleman yield?

When you get from Alaska to Florida, don't you have to pass Massachusetts, New Jersey, and North Carolina? Because the three of us think it's a terrible idea.

I thank the gentleman from Virginia for giving me the chance to go early. I particularly want to speak now because when we voted the second time on the Patriot Act, the first time I did vote against the extension, but the second time I missed the vote--my fault--but

I want to make clear my opposition not to an extension of the basis of self-defense that we have here but of passing it unchanged and of failure of the legislative process.

We knew this date was coming. To extend this now--and the gentleman from Texas laments the fact that we were unable to do it indefinitely without a chance to amend it. When the bill came up twice before, there was in neither case a chance to offer amendments. There isn't today; twice on suspension, once in a closed rule. To be presented with either/or on this is a bad idea. There are things that could be improved. There are areas where there are excesses.

We have gone through a lot of symbolic activity in the legislative process this year--the vote to repeal the health care bill, a vote reaffirming that we would do oversight, which we have been doing and which is our duty--time that could have been spent in committee, working on a process, offering people a chance to amend so we could-- would not, for the third time, be confronted by the majority with up- or-down, an unchanged Patriot Act.

Of course we are supportive of continuing our ability to defend ourselves but not without some refinement, not without some look and say, yes, there are ways we could do this that are more respectful of the liberties of the average American but would not endanger in any way our national security. For the third time, we are being denied a chance to do this; and I, therefore, will join my colleagues in opposing this, not because we don't want to see any extension at all but because we want a chance to work on it so we can do an extension of much of this act but with some improvements.

I move to strike the requisite number of words.

Mr. Chairman, being of an optimistic nature, I look for silver linings. So I welcome the fact that my colleagues on the other side have decided to adopt gender-neutral language, because a lot of the czars would have been called czarinas in the old days.

So I appreciate the fact that we've gotten beyond sex stereotyping of people.

Also, I guess they were in a little bit of a hurry. The gentlewoman from Missouri has spoken, the gentleman from Louisiana, and they listed the czars they didn't like. They overlooked one. Maybe it was hard to read. Here's one of the ones they want to eliminate. By the way, you notice that many of the ones they want to eliminate have already been eliminated. They're not there. So they are denying funding for nonexistent positions--climate change, healthcare.

I yield to the gentlewoman from Missouri.

Then rather than deal with it this way, I would have thought in the CR, you're telling me that the Republican Appropriations Committee majority funded some nonexistent positions.

I would have some advice, Mr. Chairman, for the gentlewoman. Next time, don't do that and we won't have this problem.

But there are some positions that they did fund that they would defund that still exist. And I understand they were in a hurry; so they forgot to mention all of them. They talked about climate change and they talked about health care.

Here's the one they forgot to mention: The special master for TARP Executive Compensation, Department of the Treasury, that is the special master, whose job it is to monitor excessive compensation of those TARP recipients who got special assistance and still owe the Federal Government money.

So what they want to do is knock out the person whose job it is to monitor compensation at AIG and at General Motors and at Chrysler and at Ally.

I yield to the gentlewoman from Missouri.

I have an amendment which says special master for TARP Executive Compensation, Department of the Treasury. So the amendment I have defunds and says you can't pay--I want to make it clear. This is the amendment offered by the gentleman from Louisiana. The one I got says, lines 18 and 19, Special Master for TARP Executive Compensation, Department of the Treasury.

Is the gentlewoman telling me I was given a defective copy?

I yield to the gentlewoman.

I reclaim my time.

Parliamentary Inquiry

I have a parliamentary inquiry, Mr. Chairman.

What's the text of the amendment? This is the one we were given. Could I get a reading of the text of the amendment, or could I get a copy of the amendment?

I yield to the gentleman from Texas.

Excuse me. Does this have anything to do with cement? If you mention cement, I'm not yielding.

Then I yield. Because where I come from, cement was not good news for the people who were put into it.

I yield to the gentleman.

Well, then reclaiming my time, and I ask unanimous consent that special debate time be allotted so the gentleman from Texas can debate the gentlewoman from Missouri because they seem to be undecided between them about it.

So the question I have is, this amendment, as it was presented, says you can't pay the person whose job it is to stop excessive compensation at TARP recipients. Now, the gentlewoman from Missouri says it's not in there, that I've got a bad copy.

Okay, so it is in here.

So this amendment would say to AIG and General Motors and Chrysler and Ally, the financial company, no one will now be supervising what you do. And even though you haven't yet paid back the Federal Government, there will be no enforcement of restrictions on your bonuses, no enforcement of restrictions on your compensation.

I should note, by the way, in the condemnation of these czar positions, one of the ones that's now vacant that they'd bravely get rid of is the senior advisor on the auto industry. That's one of the great successes of the Bush-Obama administration and transition.

I would tell the gentlewoman that she should work it out with the gentleman from Texas and then come up with a joint answer. But I want to make my other point.

One of the czars they are complaining about presided over a Bush- Obama transition policy that kept General Motors and Chrysler alive. We have auto industries flourishing in America and suppliers today. That was partly because of this position that's now vacant that they want to get rid of retroactively.

Please explain to me what it means when you say you were going to deny the funds for the special master for TARP. I will yield to whoever wants me to yield. The gentleman from Kentucky. The gentlewoman from Missouri.

I yield to the gentlewoman from Missouri.

Reclaiming my time, so now the third answer I get is, yes, they do get rid of the special master. There's an office there with nobody heading it.

I would ask for an additional 2 minutes, having yielded so much of my time.

Well, I just asked for 2 minutes, having yielded so much of my time.

I appreciate that.

I yield to the gentleman.

Well, I will leave to the gentleman to work out his Lenin fantasy, but I want to reiterate what this amendment now does.

There is a special master, a high visibility individual whose job it is to prevent excessive compensation from those TARP recipients that are still out there: AIG, General Motors and Chrysler and Ally. This amendment strikes it. This amendment leaves us without a person of great responsibility, and I think that--and, by the way, it's only the top hundred employees, and there are two levels, 25 and 75.

I cannot understand why Members would want to send this signal, because many of these positions are already vacant, that one of the positions that is not vacant is our effort to put limits on compensation bonuses and other excessive compensation for those entities that still owe the Federal Government money. And why our colleagues decide that that position should be abolished and a high- level individual charged with that responsibility should not be there is baffling to me. I cannot believe that that's what people think the American people want; namely, a restriction on the restriction, a relaxation on the restriction of bonuses and other compensation paid to large recipients who have not yet paid back their TARP money.

And I thank the gentleman from Kentucky for his consideration.

Will the gentlewoman yield?

I thank the gentlewoman for yielding.

I want to stress again, I have not heard a defense of the proposal that we remove from the Federal Government the highest profile individual charged with controlling compensation excesses at four companies which continue to be the recipients of special assistance. I do not understand this desire to free AIG from restrictions and General Motors and Chrysler. They have been successful, and I'm glad, but they owe the Federal Government money. Allied, the financial company, owes the Federal Government money.

I do not understand, you can go one by one and I haven't heard a defense of it. Why would we say that the individual most responsible for limiting excessive compensation to TARP recipients should no longer be able to work for the Federal Government and no one should be able to fill that position?

I thank the gentlewoman.

Parliamentary inquiry. Hasn't the gentleman already spoken?

Mr. Chairman, I offer an amendment.

Mr. Chairman, this is a deficit-neutral amendment. It provides more money for the Securities and Exchange Commission than the resolution. It takes it from other agencies.

I should say that I regret some of the choices I had to make here. Particularly I have spoken with the ranking member of the subcommittee. I was not happy to have to ask that the General Services Administration be diminished, although by small amounts; and I would hope that this could be amended later in the Senate when there was more flexibility.

But the key issue here is therefore not a deficit issue, but a policy issue: Should the Securities and Exchange Commission, which was given increased responsibilities in the financial reform bill, be given less money in this fiscal year than it had in the previous one?

The current budget of the Securities and Exchange Commission is $1.118 billion, or the last year's budget. Under the CR, that would be reduced by nearly $50 billion--$50 million. I shouldn't say ``billion.'' This is a relatively small agency. The Republican resolution would reduce the amount given to the SEC for this fiscal year by $48 million from the last fiscal year.

Now, one of the things we did in the financial reform bill was tell the SEC that we want hedge funds to register. We want them to begin to regulate derivatives, not by putting margins on end users as they just made clear they are not planning to do, but by requiring that the price be made public.

There has been a lot of talk about the shadow banking system. Well, in the financial reform bill, with regard to a variety of these entities not regulated now by the bank regulators, we are asking them to show some information. Hedge funds aren't being told what to do; they are being asked to register. We have tried to, frankly, bring some light to the shadow banking system; but as a result of the CR, the shadows will remain unpierced.

The SEC is given new responsibilities for investor protection. We have asked the SEC to enforce a new fiduciary responsibility for people who are telling other people how to invest their money in various ways. They won't be able to carry it out. Technologically, they are not yet up to the point where they can deal with things like the flash crash.

Now, people will point to mistakes by the SEC in the past. Of course there were. They were partly ideological by people who didn't believe in regulation, but they were partly a matter of competence; but it was also partly inadequate resources.

What we do in this amendment, frankly, is not even reach the proposal that the administration wanted. I would have liked to have done that, but there were constraints here because we had to take money from the IRS and the General Services Administration and from the Treasury Department. So what we have done is to give them part of what was asked. We do give them an increase over fiscal 2010. We do not reach the amount the administration says they need to carry out the new responsibilities given.

So let's be very clear: this is not about the deficit. This is deficit neutral. The question is, Do you want to fund increased responsibilities for the SEC, or do you not? Do you want them to be able to hire the kind of people they need? Do you want them to improve their technology?

The issue here is that in fiscal 2010 this agency spent $1.118 billion. The administration asked for $1.258 billion. We would get them to $1.2 billion. We would undo the reduction and get them part of the way there. We don't get them all the way there because we are under constraints; but the notion that you should give the SEC less in the current fiscal year than they had last year and ask them to monitor hedge funds, to ask them to improve investor protection, to ask them to look at derivatives, makes no sense.

Now, if you don't believe we should increase transparency of hedge funds and derivatives, then don't vote for this amendment. If you think we are at a perfect solution here, don't vote for this. But it is hard for me to believe

that people think the SEC is adequately funded.

By the way, what the CR will do is to make the SEC not so much a regulator as a profit center, because the SEC brings in more money than this budget will give them. They bring in money with transaction fees, and then they distribute money to investors.

So here we have, and I know there were many on the other side that didn't like the bill we passed, but I thought there were some parts they liked more than others. I didn't know we had a view that derivatives should remain totally unregulated.

By the way, when I talk about derivative regulation at the SEC, we are not talking about imposing margin requirements. We are talking about making things transparent.

So I hope the amendment is agreed to and we begin to get the SEC back into the position of being a responsible regulator.

Will the gentlewoman yield?

In the first place, our additional cuts are a small percentage of your cuts to the IRS and the GSA, and I hope they are restored when we get a broader sets of things. But the basic point is, yes, there were problems with 2004 and before. I believe we have a better-run SEC now, better people who care about it. And to punish the investors, to punish the American public because of past mistakes by the SEC by reducing from one year to the next is a very grave error.

I thank the gentleman.

First of all, she wants to punish the American public and the American economy because some people were not up to it in the past. As to Madoff, we have a new set of commissioners. It broke in the end of 2008. We have a new Director of Enforcement.

Yes, I want the SEC to get better, but the notion that they can take on complex new responsibilities regarding derivatives and hedge funds with less money this year than they had last year is laughable.

For the gentlewoman's sake, she's for regulation, but she voted against the bill. It was her right to do that. And if we're going to relitigate that bill, let's do it.

By the way, many in the financial industry do not want to see these cuts because, while some of them didn't want to see the rules, for them the worst situation is to have the rules and no capacity to have them promulgated and enforced.

Yes, the SEC has made mistakes.

By the way, if the standard was that if you'd wasted money in the past you would lose the budget, we would be saving hundreds of billions in the Pentagon budget. That logic never appears to apply to the Defense Department.

Will the gentleman yield?

Thank you.

Yes, I think it is unfortunate. Of course our cuts are much smaller by multiples than the cuts inflicted by the subcommittee majority.

I spoke to the people at the subcommittee who worked at them and I think the cuts are too deep.

I apologize. I thought the gentleman wanted an answer.

I thank the gentleman.

The gentleman from New Jersey asked me a question. I foolishly thought he wanted an answer, and I apologize for my false assumption. The answer is that I know that the proposals we have made to reduce at the GSA and the IRS go too far. I will point out again that they are a small percentage of the very deep reductions made by the subcommittee.

The problem we had is under the very restrictive rules, we had to choose among certain agencies. My hope is that the House will demonstrate its support for increased funding for the SEC and when it gets to the Senate, they will have more flexibility and can take it from elsewhere. And we will see fiscal discipline imposed in some other places.

I did not call those agencies because I knew what their answer was. I knew it from the ranking member of the subcommittee, that the chairwoman in my judgment of the subcommittee had already cut them too deeply. We had no options. What we are doing here is simply trying to make the point that the SEC should be funded.

I want to now respond to the notion that we always think it's more money. No. We have talked also about reforms. And, by the way, they talked about 2004. They talked about 2008. A prior administration. I believe that there has been a real change in this administration in the seriousness of the appointments to the SEC, in the understanding of what they should do. There is a new SEC director of enforcement, Mr. Khuzami. By the way, disciplinary proceedings, the new chair, Mary Schapiro, has announced are now under way over the people who didn't do what they should have done in the Madoff, which of course is from prior years.

So, yes, the SEC has been less than perfect, but it has a very new set of responsibilities. And the notion that they can deal with that new set of responsibilities with less money than they had last year comes only from people who are not in favor of the new responsibility. I understand that. But becoming more efficient doesn't allow you to get into monitoring all the hedge funds that have to register and to monitoring derivatives.

What we have here is an ideological opposition to reform of the financial system, a preference for keeping the shadow banking system in the shadows, masking as a fiscal argument. Because we can do this in a deficit neutral way and the SEC will continue to be a profit center.

So this notion that we think the answer is always more money, no, we don't. And if the majority has some improvements to make to the SEC, let's see them. I don't remember any being offered by them as amendments when we were doing the financial reform bill. We have worked with Mary Schapiro. We do believe she's making significant improvements in a lot of ways. But the notion that you can give them significant new responsibilities and give them less money than they had in the year before when they're supposed to now be looking into derivatives and hedge funds makes no sense.

The gentlewoman from Missouri acknowledged she had misspoken when she said we had cut it by $600 million. She cut it by $600 million. I wish she

hadn't done that. I wish they hadn't done other things.

Within those constraints, what we are trying to do is to send a message that we believe the SEC should get some of the funding, not all that it asked for and not all that the administration asked for. What we have here is a test about whether or not people want to support the re-deregulation of the financial system, whether they want to keep the shadow banking system in the shadows. I believe the answer is that we shouldn't.

I thank the gentleman from Pennsylvania.

Will the gentleman yield?

And when we saw that CBO did that, we decided to offset that, so we did, as the gentlewoman indicated, go to the IRS. And I do want to say the gentlewoman is, I guess, is being very responsible, the chair of the subcommittee, she is defending the Internal Revenue Service against the Consumer Bureau and the SEC. And the gentlewoman is entitled to due credit for her staunch support of the IRS as we try to divert funds to protect consumers and police Wall Street. And I am sure there are many in the Tea Party who will be very grateful for her staunch support for the IRS funding.

I thank the gentleman.

I would just like to make this point: My colleague from Texas said, well, because the old regulation wasn't working, we wanted just an additional regulator. That's simply untrue.

What we said was this: Consumer regulation, before the passage of the financial reform bill, was entrusted to the bank regulators, and their primary mission and their primary focus was on bank protection.

We do not create new powers so much here as take the powers that were vested in the Federal Reserve. Great defense of the Federal Reserve. I am struck by my Republican colleagues trying to defend the integrity of the Federal Reserve and the IRS. That's a new Republican Party. But we took it from the control of the currency, from the FDIC, and put them in a new agency whose only responsibility is consumers. It is not additional money and it's not any new regulation.

Now, we do add a set of previously unregulated entities: payday lenders and check cashers and others in the shadow banking system. So there is some increase in consumer protection. But, fundamentally, we didn't say we want one additional regulator. We have taken regulatory authority from the pro-bank regulators who haven't exercised it well and put it in the new agency.

Mr. Speaker, reserving the right to object, I guess I am a dissenter in this orgy of self-congratulation, and I want to explain why. And I may not object if I have a chance to explain why, but if I can't explain, I have to object. So that is the choice. I either explain or object.

I object not to the UC at this point, but to the self-congratulation that the majority is engaging in because they said they had such an ``open process.'' In fact, the refutation of that was best stated by the gentleman from Kentucky. He just said we have debated the whole government. Yes, we have--and very inappropriately.

To debate the whole government and to debate fundamental policy issues under the guise of a budget, under the constraints of a budget debate and not three, not a whole week, 2\1/2\ days so far. Maybe we will get a third day. We have dealt with the most fundamental questions. In the jurisdiction of the committee on which I serve, issues came up under great constraint. The reform bill of last year has been damaged by what was done here. Fortunately, it will never become law. And we were constrained because we had to choose between the SEC and the IRS. That is not the way to legislate.

This was not an open process. Yes, you could offer amendments. You could offer amendments in a very narrow compass. You could offer amendments according to the jurisdiction of subcommittees. The jurisdiction of subcommittees is somewhat accidental. It doesn't determine public policy.

And, yes, we are talking about it now. We are boasting about debating the whole government. Did my colleagues listen to the UC? You will get to debate whole aspects of the government tomorrow for 10 minutes. We are the model of democracy. The next thing you know, they will be rioting in parts of the world so they can have 10 minutes per issue to debate fundamental issues.

This is a travesty. I very much objected to this procedure. My leadership, for which I have great respect, had asked me if they could go forward. I am prepared to allow that because of some conditions. One is that I am confident that this awful, distorted, ill-thought-out process has produced a bill that will never see the light of day. And by the way, no one should be surprised. We are now going to recess after we finish with all of these other parts of the government in 10 minutes per issue, or up to an hour for a couple of important ones, 20 minutes for some only moderately important ones.

The Senate will then get this with 4 days left before it expires. No one realistically thinks this is going to happen. So perhaps some of the constituencies were mollified by this show; but I want to stress again, this has been awful procedure.

The gentleman from Kentucky is right: we have debated the whole government, fundamental issues that go far beyond budgetary issues in 3\1/2\ days. We will have debated fundamental issues in 10 minutes. This is openness? This is a travesty of the democratic process.

So, Mr. Speaker, because I have been given a chance to explain why I think this is a terrible process, why I am going to say now I don't expect the Senate to accept this. We will have to come back and do it again. There will have to be, I assume, a short-term extension.

I want to give notice now to all parties, I will object strenuously at every procedural opportunity to any effort to repeat this travesty.

So with respect to the ranking member and to the minority whip and the minority leader and to others and to people who have worked so hard and to the poor long-suffering staff, yes, I will remove my reservation, and I will not object. Having made it clear, once the Senate gives this awful product an appropriate burial, I will not be a party to its resuscitation.

Mr. Speaker, I withdraw my reservation of objection.

Madam Chair, I move to strike the last word.

I welcome this amendment.

I am struck when I hear some of my colleagues on the more conservative side, although this is not uniformly them, some on the conservative side are offering this amendment. We have this interesting dichotomy about whether or not the Federal Government can ever create jobs. In general, the conservative view is the Federal Government never creates jobs. In the military area, somehow there's an exception.

We are told here that there is a constructive relationship that can exist between small businesses and the military that we are told doesn't exist elsewhere; but the major reason for cutting this is we are, at this point, overextended militarily.

Of course, there is unanimity here that we want Americans to be the strongest Nation in the world. We are of course the strongest Nation in the world, and no one is second. We are overcommitted in a number of areas.

The military has become not the instrument of self-defense by the United States, but the instrument to protecting political influence, and protecting influence militarily is often inefficient so that reducing this spending, as reducing other forms of military spending, is essential if we are to begin to hold down the deficit.

Now, I am going to be talking tomorrow, and we're only talking in military terms of half a billion dollars. In terms of the defense budget, that appears to be relatively small, but it is more than enough than would be needed to fund the Security and Exchange Commission and the Commodities Futures Trading Commission at the full level they need to regulate derivatives and hedge funds.

We have a massive disproportion in which we overspend militarily far beyond what is needed to protect ourselves. Our military budget is the largest foreign aid program in the history of the world. It exists to provide subsidies to our wealthier allies who face no threat. And to the extent that we can reduce that, particularly in an area where the Defense Department itself did not even ask for the funds, we curb unnecessary spending.

As I said, tomorrow I will be offering an amendment to try to give the Securities and Exchange Commission the ability to regulate hedge funds, or at least to keep track of them. We will be trying to offer funding to protect consumers from credit card abuse and trying to provide funding to regulate derivatives.

Taken together, those three agencies are being cut by an amount smaller than one-half billion, and we will be told that we can't afford that. So I welcome the gentleman pointing out the inconsistency between those who say that the private sector should be left to its own and the public sector does not become the job creator here in this way, and I welcome also the chance to begin, as I will be supporting the amendment of the gentleman of Arizona, this massive disproportion in which we overspend militarily. And I say ``overspend,'' because it is far beyond what is needed for the legitimate defense of the United States. It has become a form of staking our political interests, and it comes at very great cost to virtually everything else we want to do, as well as constraining the deficit reduction.

I yield back the balance of my time.

Offered By: Mr. Frank of Massachusetts

Amendment No. 458: At the end of the bill (before the short

title), insert the following new section:

Mr. Speaker, I am proud to be the Representative in this House of the Myrtle Baptist Church, an extraordinarily important congregation which has served predominately, but not exclusively, the African-American community in the City of Newton, Massachusetts since the 19th century. Myrtle Baptist has played an important role in the racial progress we have made from those post- slavery days to the present, and while that fight has not yet been won permanently, the leadership that Myrtle Baptist has provided in the City of Newton and the Greater Boston area has contributed significantly to the progress that has occurred.

Ninety years ago, under the pastorate of the Reverend Wade Ryan, the Church saw the establishment of the Daughters of Myrtle, which was formed with the mandate ``to serve the Church and community spiritually and financially.''

Mr. Speaker, they have done that extraordinarily well. From a group of committed churchwomen who were picked by the Reverend Ryan to help with the preparation of the service for Northern Baptist Convention Annual Meeting, DOM rapidly evolved into a vital part of a vital church.

Today, ninety years after its founding, DOM in their words continues ``to sponsor events at the Church and have broadened our service to include helping those in need throughout our community via outreach efforts such as supporting local women's shelters, conducting annual pamper drives, and contributing to book

drives for children's wards in various metropolitan Boston hospitals.''

Mr. Speaker, I recently had the great honor of being invited to attend an inspirational worship service at which the torch was passed from Pastor Howard M. Haywood, who has for years been a pillar of the Newton community, to a new, vigorous pastor, whose presence has been greatly welcomed, Pastor Brandon T. Crowley.

Mr. Speaker, I believe that the work of the Daughters of Myrtle is an inspiration from which many in our country can learn, and I ask that the 90th Anniversary of this important organization be noted here.