Floor Statements

Well, the $700 billion bankers' bailout bill is back. Many of my colleagues didn't enjoy voting on it twice last year, but it is back. It is back with two votes--one vote this week, one vote next week. This week, we will vote on Chairman Frank's bill (H.R. 384) to improve the TARP legislation, the $700 billion bill. I believe that Chairman Frank's bill is a step in the right direction but insufficient. Then on Friday, the Senate is expected to take up a resolution of disapproval. As you remember, the bill we passed last year, TARP, says that the executive branch gets the last $350 billion as soon as they ask for it, or 15 days after they ask for it, unless both the House and Senate pass a resolution of disapproval, and it provides for expedited consideration of such a resolution.

So next Friday, January 16th, the Senate is expected to vote on a resolution of disapproval. Then on the following Wednesday, January 21, we will vote on a resolution of disapproval. Such a resolution would be effective only in the unusual circumstance that it passes both Houses of Congress, and even then it is subject to a possible Presidential veto. Still, this House must carry out its responsibilities.

This week, hopefully the Rules Committee will allow us to consider amendments to strengthen Chairman Frank's bill. And next week we have to vote on releasing the second $350 billion. When we vote next week, we will at that point have before us just the existing statute passed last year, because even if Chairman Frank's bill passes, even if it is made much stronger than it is now, it will be languishing in the Senate next week, and we in the House will have no idea whether it will ever become law. So when we vote to release the second $350 billion, we're basically voting again for the TARP bill, except for three differences.

First, we know a lot more now than we knew then. Second, the unprecedented transfer of money and power to the administration will be to the new administration in which many of us have far greater faith. And, finally, we will hopefully have before us a letter from the incoming administration indicating how they will use the enormous power and discretion conveyed by the existing TARP statute.

It is my hope that such a letter be explicit, be unequivocal, and be comprehensive. Explicit, so that we know exactly what they're going to do and what rules they're going to live by. Unequivocal, hopefully signed by the President, and a clear statement of the rules the administration will live by, not just a statement of principles or present intentions. And, finally, comprehensive. It should deal with the concerns that we all have, or that so many of us have, about the existing TARP legislation.

Chairman Frank's bill will deal with transparency and deal with home foreclosures. And my hope is that since

Chairman Frank's bill won't be law next week, that the President- elect's letter will address those issues explicitly and unequivocally. Chairman Frank's bill calls for us to get 15 percent warrants when we make investments in banks. I am pleased to report that after discussions with the Chairman and his staff, he is going to make it clear in his bill, and I hope it is clear in any letter we get from the Obama administration, that 15 percent is a floor, not a ceiling, and that the Treasury should be obligated to work to get us all the warrants that we deserve as taxpayers for the risks that we are taking. The taxpayers should be fully compensated for the enormous risks we take when we invest in troubled Wall Street firms.

Now I am going to offer an amendment to Chairman Frank's bill to state that while a company is holding our TARP money, they should not pay a penny in dividends and they should not purchase any of their own stock back from their existing shareholders. If the company has extra money, give the taxpayers our money back. Don't give it to your shareholders.

We do have a letter from Larry Summers, who will be playing a key role in the White House, saying, and I don't know if this is intended to be binding on the incoming administration, that they would favor strict limits on dividends and modest limits on stock repurchases, but we need stronger protections for the taxpayers.

I hope very much that we are able to work on this issue and other taxpayer protections.

Madam Speaker, I plan to use the first two-thirds of my time to focus on events in the Middle East and then the final third to focus on our economy. I would invite my colleagues who wish to address these subjects to come to the floor. I can yield them a few minutes, but if I don't have any company, I'm capable of speaking for a full hour, as some of my more bored colleagues have already seen proven.

Now, even in an hour-long presentation, I am not going to be able to present all of the facts to support my position, and so I invite my colleagues to visit [email protected].

Now, focusing on the Middle East, we all want peace, we all want a sustainable cease-fire. But, instead, our televisions show us blood and carnage. Who is to blame? What do we do to cause it to stop?

Now, as to the issue of who is to blame, the press has a remarkably silly approach. They take pictures of casualties, and they decide whatever side has suffered the most casualties must be in the right. I would point out that if this is the standard we use, America has been in the wrong in every war we have fought since 1812. It is absolutely preposterous to say that whichever side suffers the greater casualties has morality on their side.

Part of this is a misreading of the just war theory that so many modern philosophers have put together, and one of its key elements is proportionality. The press, skimming rather than reading these philosophical texts, comes up with the idea that there must be proportionality of one side's casualties to the other side's casualties. A true reading of just war theory indicates that the proportionality doctrine is that there must be proportionality between the objective that the just side is seeking and the casualties which are unfortunately borne by both sides.

Well, what is the objective that Israel is seeking? First and foremost, the objective is to end a situation where 1 million Israelis every day and every night face daily attempts to kill and maim as many of them as possible. By this standard, this is a just effort by the Israeli Government to safeguard its people.

Now, Hamas has sent, since 2005, well over 6,000 rockets and mortars into southern Israel. Now, I want to clarify one issue as to the number, because often you will hear a figure roughly half of 6,000. That is the correct figure for the number of rockets or for the number of mortars. But if you add together the rockets and the mortars since the year 2005, the number stands well over 6,000.

Why do we pick 2005? That is because that is the time when Israel withdrew completely, unilaterally, without concession, without compensation, from the Gaza Strip, leaving behind valuable assets, which were trampled on rather than used by Hamas extremists.

So we see some 6,000 rockets and mortars from a territory that is hardly under Israeli occupation. We are told that, well, Hamas should be regarded as morally virtuous because so few of these rockets hit their target. It is true that the vast majority of these 6,000 projectiles have failed in their attempts to kill Israeli women and children and civilians, but that doesn't mean that Hamas has good morality. It simply indicates that Hamas has bad aim or, more specifically, that they are using ordnance, which is very difficult for them to aim.

Every one of those rockets and mortars had a single objective, kill as many Israeli civilians as possible. Not a single one of them was targeted at the Israeli military. So we are told, well, let us count only the casualties. Let us ignore the over 6,000 attempts at murder from Hamas. We cannot ignore those missiles. From a moral standpoint, it is just as wrong to fire a missile that fails to hit its civilian target as one that does hit its civilian target.

Now, earlier today, the House passed H. Res. 34. The vote was 95 percent in favor, 1 percent against, the remaining percent either voted present or wasn't present, 95 percent to 1 percent. Let us review some of the provisions of that resolution. I will read some, and then I will comment.

``Whereas Hamas was founded with the stated goal of destroying the State of Israel;

``Whereas Hamas has been designated by the United States as a Foreign Terrorist Organization;

``Whereas Hamas has refused to comply with the Quartet's,'' and here we are referring to the United States, European Union, Russia and the United Nations, that Quartet's ``requirements that Hamas recognize Israel's right to exist.''

Then it goes on to say that Hamas has launched thousands of rockets against Israel's population centers since 2001 and has launched more than 6,000 such rockets and mortars into Israel since Israel withdrew both its military and civilians from Gaza in 2005.

The resolution also states that in June, 2006, after that withdrawal, Hamas illegally crossed into Israel, attacked Israeli forces, and kidnapped Corporal Gilad Shalit, whom they continue to hold today. The resolution then points out that Hamas is getting some very substantial support from Iran, and I will address that later, and is using innocent civilians as human shields.

Let me give one illustration of that, and that is Nizar Rayyan, perhaps one of Hamas' top 5 leaders.

He stored weapons at his home, sophisticated communications designed to act as a communications center for Hamas. So what did Israel do? They called him at his home. They told him that in order to avoid civilian casualties, they were giving him 10 or 15 minutes notice, that's enough time for people to leave the area, but that it was important to Israel to destroy those weapons, to destroy that communications equipment.

What did Mr. Rayyan do? Having boasted that he wanted to die as a martyr, he not only stayed in the house, but he kept with him several of his wives and children. That is the use of innocent human shields at its worst, a man doing everything possible to lead to the death or cause the death of his four wives, of many of his children, all so he could claim that Israel was responsible for the deaths of those civilians.

Let us continue to look at key provisions of the resolution that passed the House.

``Whereas Israel has facilitated humanitarian aid to Gaza with hundreds of trucks carrying humanitarian assistance . . . ''

Let me provide the specifics. Just today some 89 humanitarian shipments went from Israel to Gaza, including 2,227 tons of food, medicine, plus 315,000

liters of heavy-duty diesel so that Gaza can operate its power generation station and 143 tons of gas for domestic use. That is what Israel made sure, at risk to its own people, would reach Gaza just today.

Well, how does that compare with combatants in other wars? Look at World War I and World War II.

In each of those wars, the British Navy used its total mastery of the surface of the oceans to blockade Germany. Not a single ship of medicine was allowed to pass across the Atlantic to Germany, not a single ship of food, and, of course, prior to both World War I and World War II, Germany was a major food importer from the western hemisphere.

What did Germany do? They deployed their submarines with the stated purpose of starving the British in both World War I and World War II by sinking as many ships as possible, laden with food, purchased in the new world. So in World War I and in World War II, both combatants from the first day of the war did everything possible to stop a single ship of humanitarian assistance, to use modern nomenclature, to stop a single ship with food or medicine from reaching its destination. Compare Israel to both sides in World War II, risking its own soldiers and civilians in order to help those trucks get through.

The resolution continues with a quotation from Secretary Rice where she said, on January, 2009, January 6, hundreds of thousands of Israelis lived under daily threat of rocket attack and, frankly, no country would be willing to tolerate such a circumstance. Moreover, the people of Gaza watched as insecurity and lawlessness increased and their living conditions grew more dire because of Hamas' actions, which began with the illegal coup against the Palestinian Authority in Gaza. A cease-fire that returns to those circumstances is unacceptable and will not last, will not last.

The U.N. Security Council, passed a resolution last night calling for a sustainable cease-fire. But a cease-fire that returns Hamas to the situation that existed in December is, in the words of our own Secretary of State, unacceptable, because it will not last. The U.N. has called not for a temporary cease-fire, but for a sustainable cease- fire.

Now, the resolution goes on in its resolved clauses to make a number of points. For example, the resolution, in subparagraph 3, ``encourages the Administration to work actively to support a durable and sustainable cease-fire in Gaza, as soon as possible, that prevents Hamas from retaining or rebuilding its terrorist infrastructure, including the capability to launch rockets and mortars against Israel.''

Paragraph 5 ``calls on all nations--

``(A) to condemn Hamas for deliberately embedding its fighters, leaders, and weapons in private homes, schools, mosques, hospitals, and otherwise using Palestinian civilians as human shields, while simultaneously targeting Israeli civilians.''

In paragraph 8, the resolution ``calls for the immediate release of the kidnapped Israeli soldier Gilad Shalit, who has been illegally held in Gaza since June 2006.'' I would point out that I, at least, believe that no cease-fire can be regarded as adequate unless it includes the return of Gilad Shalit.

So these are the provisions, and I haven't had a chance to quote them all, but these are what I think are the most important provisions of the resolution passed by this House by a vote of 95 percent to 1 percent. I want to commend Chairman Berman and Speaker Pelosi for introducing and writing this resolution, and I was proud to be one of its original cosponsors.

So let us try to review some of the elements that we see on the ground in the Middle East.

Hamas claims to be beleaguered, but it has rejected the U.N. Security Council cease-fire resolution passed last night. Hamas has done everything to increase civilian casualties, including the actions of Mr. Rayyan and including the use of human shields.

Yet in spite of all of Hamas' efforts to increase civilian casualties on both sides, U.N. estimates state that over two-thirds of the Palestinian casualties have been gun-toting militant terrorists, and other estimates put that number at well over three-quarters. It is a testament to everything Israel has done, risking the lives of its own soldiers in order to minimize Palestinian civilian casualties, that well over half, well over two-thirds of the Palestinian casualties, are indeed the militants, not the civilians.

When Hamas launches rockets from a neighborhood, an Israeli sergeant has seconds to decide whether to return fire. Now, there is always a comfortable pundit talking head on television in an air-conditioned studio ready to vilify that decision. But the decision has to be made in seconds by an Israeli sergeant under fire. The moral culpability for civilian casualties cannot be put at the feet of any sergeant. Moral culpability for the horrors of war lies with politicians who seek extreme and unjust ends through violent means.

While Israel seeks to live in peace alongside a Palestinian state, Hamas and its political leaders have as their clearly stated objective to kill or expel every Jew from the Middle East. Hamas proudly waives the banner of genocide and ethnic cleansing. So where do we lay the blame for the casualties that continue? I believe it is not at the feet of the sergeant who is under fire, but rather it is at the feet of the political leaders who insist upon continuing to seek such unjust and extreme ends through violent means.

Now, I have discussed this conflict as if it is a conflict between just Israel and Hamas. It is in fact a conflict of wider significance, a conflict between the government of Iran and the people and allies of the United States.

The fighting in Gaza has demonstrated Iran's ability and desire to wage war on America and its allies. Hamas is a terrorist organization seeking the destruction of Israel in favor of an Islamic Palestinian state, but it is also a proxy for the Iranian Government. As such, what we see in the Middle East is part of a regional war being waged by the Iranian regime against the United States and its allies.

Many of Hamas' weapons are made in Iran. Many top Hamas military leaders and experts who launched the missiles into Israel were trained in Iran. Iran provides the lion's share of Hamas' funding. It is unlikely that Hamas would be able to achieve its status as the premier Palestinian terrorist organization without backing from Iran.

Iran backed Hamas like Iran backed Hezbollah. It shoots rockets at Israel's civilians from deep inside their own densely populated civilian areas, knowing that any Israeli attempt to defend itself will kill or at least endanger Palestinian civilians. Through Hamas and Hezbollah and through its operatives in Iraq, Iran and its government are able to stir up crises in the Middle East, thus injuring American prestige while helping to achieve Iran's own aims.

We know that Iran is working hard to possess a nuclear bomb. With all that Iran is doing now, with all that it has done as far from its own country as blowing up the Jewish center in the city of Buenos Aires, what will Iran be like if it has nuclear weapons? It will act with impunity. We will go from crisis to crisis between the U.S. and its allies and Iran, and each time we will be staring at a hostile nuclear power.

Now, it is true that the last time we went eyeball-to-eyeball with a hostile nuclear power, namely the Soviet Union, best exemplified by the Cuban missile crisis, we lived to tell about it. But imagine going eyeball-to-eyeball with a regime that is considerably less sane than Mr. Khrushchev, and not having one Cuban missile crisis, but a crisis every time Iran decides to test us, every time it engages in international terrorism? This is a risk Americans should not take.

Finally, what happens if, as so many of us pray, this regime in Tehran feels that it is going to be swept out of power? They may decide to nuke Tel Aviv in an effort to regain popularity among those on the street in Iran, or they may decide to smuggle a weapon into the United States, feeling that if they are going to go out, they would just as soon go out with a bang. So it is unacceptable for America to sleep while the centrifuges spin at Natanz.

Now, preventing an Iranian nuclear weapon is still possible if the new administration reorients our foreign policy to make that its chief objective. The good news is that the tools we have available, the diplomatic tools, the economic tools to isolate the government in Tehran, have only been

used to the extent of 1 or 2 percent. We still have a lot of tools in the tool box. The bad news is for this entire administration, even after 9/11, even after it was revealed by an Iranian dissident group all the details proving that Iran was making considerable progress to a nuclear bomb, even after all that, this administration has left most of the tools in the tool box.

I will detail some of those tools in the time that remains to me, and the rest, of course, are available for my colleagues to view at Bradsherman.house.gov.

First, we can begin the effort at economic isolation. I think incoming President-elect Obama has a strong record. He voted for the Lautenberg amendment in 2005, which unfortunately didn't pass because a majority of Senators voted against it. That amendment would simply have prevented U.S. oil companies from doing business with Iran through their foreign subsidiaries. Furthermore, then Senator Obama authored the bill in the last Congress which would have encouraged divestment from firms doing business with Iran. I hope very much that in its first days, the Obama administration comes to Congress and urges us to pass these two pieces of legislation that were so strongly supported by Senator Obama.

We then need to ask the administration, and it is an odd constitutional circumstance where we have to ask that laws be enforced, but we should ask the administration to begin enforcing the Iran Sanctions Act as the current administration and even the prior administration refused to do.

We need at the diplomatic level to demand that the World Bank stop disbursing funds to Iran in the form of concessionary loans. We basically acquiesced in the decisions of the World Bank to make those loans. Fortunately, only half the funds have been disbursed, and we must make it clear to the World Bank that our continued participation in that organization requires the immediate cessation of disbursements from the World Bank to the government of Iran.

We need to deny Nuclear Cooperation Agreements to countries that provide technologies to Iran, and by ``technologies'' I mean those technologies that help Iran develop nuclear weapons.

And we need to organize the world to hit one of Iran's Achilles heels, and that is the fact that it needs to import gasoline, because although Iran is oil rich, it does not have refinery capacity. Almost half of its gasoline needs to be imported.

As to this effort, I have the opportunity to report to the House that we have had some success. It has been reported that a major Indian refinery, RIL, has agreed to stop sending refined petroleum products to Iran. This is a success for the U.S. Government, and particularly for the Congress of the United States. Why? Because this very refinery in India was seeking funding from the U.S. Export-Import Bank, one of our major funding institutions, to fund the construction of infrastructure around the world, and we do that chiefly because it is U.S. products being used in that infrastructure. So RIL was seeking a U.S. Export- Import Bank loan or loan guarantee, and several Members of Congress joined with me in sending a letter to that institution saying that Ex- Im Bank should not provide such financing unless the refinery stopped shipping gasoline to Iran.

So I look forward to using these and other tools to convince the Iranian people and Iranian elites that their policy, the policy of their government in supporting terrorism and building nuclear weapons, is going to lead to their economic and diplomatic isolation.

I think we also owe a special debt of gratitude to the mullahs who run the Iranian Government, because their incredible corruption and inefficiency has left the Iranian economy very susceptible to these pressures, very fragile. This economy in Iran was fragile even when oil was selling for roughly $150 a barrel, and they are far more fragile now that oil is selling between $40 and $50 a barrel.

Let me review just a few of the other things that this government and this Congress can do in order to get the message across to Iranian elites and the Iranian people that they face economic and diplomatic isolation if they continue to support terrorism and develop nuclear weapons.

The first of these is to urge Americans to divest from ownership of stock in companies that are investing in the Iranian oil sector. How can we do this?

First, we need to make it clear, and this is legislation that passed the House, unfortunately, I believe it did not--I know it did not make it through the Senate, to simply tell pension plans and other trustees that they are free to divest without the risk of lawsuits from some crazy investor or beneficiary who somehow would claim that the fund could make more money if it did invest in companies doing business in Iran. We've got to make it plain that no one has a fiduciary duty to invest in terrorism.

Second, we would want to change our tax laws so that those selling stock in a company, usually a foreign oil company that is investing in the Iranian oil sector and investing in the stock of a different company, that those who engage in such a transaction are not immediately taxed. Rather, they should get to what tax professionals call a carry-over basis, and then, when they divest, when they sell the stock of the new company, the company that's doing good things, that would be the time when they would recognize their capital gain, because divestiture of companies doing business with Iran in a way so as to bolster its energy sector, divestment should not result in lawsuits. It should not result in taxation. It should result in accolades and thanks from this Congress to see that American pension plans, both public and private, and American individuals, are willing to step forward and put some economic pressure on the Iranian government.

In addition, I think that we have to examine our relationship with Russia and China with a lens of looking at how Russia and China deal with Iran. Too often these two super powers or former super powers, or future super powers, whatever term you would use for Russia and China, these two powerful countries use their seat at the U.N. Security Council to defend Iran from any meaningful sanctions.

Why do they do this?

First and foremost, they do it because they can, knowing full well that our policy toward China or Russia on the issues they care about will not be affected by what they choose to do on Iran. This failure of linkage needs to end with the end of this administration. We need a State Department and a President and a foreign policy that makes it plain to Russia that when we look at Georgia, when we look at Trans- Dniester Moldova, when we look at disputes involving the pricing of natural gas, when we look at whether we're putting missile defense in Poland and the Czech Republic, when we're looking at any issue important to Moscow, our first question will be what has Russia done to hinder or help the Iranian nuclear program.

Nothing illustrates this better than our plan to put missile defense in the Czech Republic and Poland, justified by the current administration on the theory that we need that because Iran may have nuclear ICBMs.

Now, how crazy is this?

We anger Russia by putting the missile defense in the Czech Republic and Poland. What instead we should do is agree not to build that missile defense if Russia will help us prevent Iran from having nuclear weapons, which was the theoretical reason we needed the missile defense.

Keep in mind that missile defense is not going to safeguard Poland or the Czech Republic from Iranian nuclear weapons. First, it probably won't work. But even if it did, Iranian missiles are not aimed at Krakow or Prague. Iranian missiles would probably not be the mechanism that Iran would use to deliver nuclear weapons. You see, to develop an ICBM you have to be a damn good rocket scientist or actually have a bunch of damn good rocket scientists. But you do not have to be a rocket scientist to get a nuclear weapon into an American city.

A nuclear weapon is about the size of a person, and of course those sizes vary, as do nuclear weapons. But it is not that hard to smuggle something the size of a person into the United States. In fact, our efforts along the U.S./Mexican border have raised the price that smugglers charge for that

very activity from $1,000 dollars up to $1,500. That may deter some who would cross the border illegally for economic reasons. That may deter poor people from Latin America, but it obviously isn't going to deter any country with nuclear weapons.

Likewise, I could point out that we do not have a single border officer on the entire Alaska/Canadian border, not one. So if you think that oh, well, we're going to defend Los Angeles and Chicago because we have this incredible border effort, we have zero on that border. And so Iran could easily, could smuggle a weapon into Anchorage, even more easily than to smuggle one into Los Angeles or Washington or New York.

So why are we building missile defense in the Czech Republic and Poland and by doing so, angering Moscow and making it more difficult for us to pass appropriate resolutions sanctioning Iran through the United Nations Security Council?

First, myopia has marked so much of the foreign policy of the current administration.

And second, a peculiar belief that by building missile defense in the Czech Republic and Poland, we are somehow tying those two countries to us and continuing the Cold War against Russia.

We should be building missile defense only if we think it will work. It will not work against Iran.

And there's a second reason. Iran will choose to smuggle nuclear weapons, rather than use Intercontinental Ballistic Missiles because they will have more confidence in their ability to smuggle. Even if they have an ICBM, they're not sure it works. They're certainly not sure that it hits the target within 5 miles or within half a mile of what they're trying to achieve. They know they can smuggle a nuclear weapon to precisely the location they want right outside the security perimeter of this Capitol, right outside the front gate of the White House.

And, in addition, Iran would prefer to have plausible deniability. Why should they make it so clear that the bomb came from the Iranian government? If, instead, it is delivered by a terrorist they can always say, oh, you dare not retaliate; it wasn't our fault. So Iran would prefer plausible deniability, just as bin Ladin denied then admitted then denied responsibility for 9/11.

So we are building missile defense in the Czech Republic and Poland for no reason that enhances American security and at great cost to our effort to prevent Iran from developing nuclear weapons.

Likewise, we have made it all too clear to Beijing that our attitudes toward their currency manipulation will not be affected in the slightest by what they do with regard to Iran, particularly at the United Nations. Why would we take the Number 1 threat to our national security and tell the Chinese, we won't link it to anything you care about?

Again, this has been an ineffective foreign policy of the outgoing administration. So I look forward to a diplomatic policy that gives the highest priority to putting U.N. sanctions on Iran as long as it develops nuclear weapons and supports terror. I look forward to using all of the economic sanctions available to us. And I look forward to being able to use our broadcasting resources to inform the Iranian government and people that they face true isolation, economically and diplomatically, if they continue down the same path.

At this point, I want to move from foreign policy to our economic situation. Next week, this Congress will consider a bill amending the TARP program. TARP is the program that is known as the $700 billion bailout bill. $350 billion has been spent by this administration. The other $350 billion remains available to the next administration.

Now, that second $350 billion will not be available to the new administration until the administration makes a request and until we have a chance in a privileged resolution to vote on a resolution of disapproval. But I should point out that it would be virtually impossible for this Congress to prevent any administration making such a formal request from getting the second $350 billion. That is because any resolution of disapproval would have to pass both Houses of Congress, then sustain a presidential veto, and both Houses would have to override that veto. So the second $350 billion is likely to become available to the Executive Branch.

Before that we should strengthen the requirements for expenditure of the second $350 billion. Now, there are a variety of ways to strengthen the requirements. There are three that I have focused on most directly. Chairman Frank has focused on quite a number of other ways to strengthen the TARP program, and I agree with most of what he will be trying to do.

I should point out that I'm speaking on the basis of the outline posted on the Speaker's web page and I believe on the web page of the Financial Services Committee as well.

We do not yet have the bill's text. But from that outline, we see one major improvement focusing on one of the three issues that I have focused on, and that is a requirement that when we invest in a financial institution, we receive at least a minimum number of warrants. Now, frankly, we should be getting a lot more warrants than the minimum that would be established by Chairman Frank's legislation. But the current TARP bill has no minimum at all. So if we can raise that to a 15 percent minimum and make it plain to the Department of the Treasury that the minimum is a floor, not a ceiling, and that the taxpayers of this country deserve warrants commensurate with the risk that we are taking, then we will be in a much stronger position, because, let's face it, we're investing in the preferred stock of quite a number of these banks of different sizes, and some of those investments will fail. So if we don't make a profit on the good ones, our kids are going to be paying for an enormous increase in the Federal deficit as a result of the bad investments we have made.

The way to do this is to set 15 percent as the floor, but to expect that where substantial risks are taken, that we get warrants worth 20, 30, 40, 50, or 80 percent of the amount that the Federal Government is investing.

There is a second area that I have focused on in all of the TARP discussions, and that is my concern that we will be bailing out foreign entities, not just American entities; that this would take the form of buying bad bonds that were invested in and owned, not by U.S. entities, but by big banks in Shanghai and Riyadh and London.

Now, up until now, contrary to the plan that Secretary Paulson presented to this House, he has not spent a single penny buying bad bonds from anybody.

Of course, he told us that was the only thing he was going to use the money for. He changed his mind by the moment he passed the bill, but the new administration may, indeed, decide to buy troubled assets/bad bonds from those who invested in them. If this is the case, they should only buy such bonds if they were held by an American entity on September 20, 2008, which is the day that all of this bubbled up to the surface, the day of Secretary Paulson's original proposal.

When I say an ``American investor,'' I include as American investors those entities incorporated in the United States, or doing business in the United States, even if they are owned by foreign entities. So, if Fireman's Fund happens to be owned by an entity outside the United States, they are still very much a part of the business activity here in the United States, and if the bond was actually owned by the U.S. entity, it should be eligible for purchase under TARP. But it is a very different thing to allow what I call the China two-step.

The China two-step works like this: The Bank of Shanghai made some bad investments. You know, everybody around the world bought our bad bonds or mortgage-backed securities, whatever you want to call them. They bought some really bad bonds. Shanghai transfers those to some U.S. entity on Monday, and then the Treasury buys them on Tuesday. The China two-step.

We need to put into the statute that, before any bond is purchased, before any troubled asset is purchased, we know that it was owned by a U.S. investor, including those entities that may have foreign parents, but was owned by a U.S. investor on September 20.

The third issue that I'm concerned about and that now, I think, all of my

colleagues or our colleagues are concerned about is the issue of executive compensation and perks. Now, the outline--and I'm only working from the outline that's posted on the Web page--does say that those who receive bailout moneys cannot own or lease private jets, but it leaves it clear that they can charter the private jets. Better we should take the private jet provision out of the law entirely than we commit a fraud on the American people and say that the executives at companies which needed a bailout are not going to have private jets, and lo and behold, instead of owning jets, they charter them.

We should make it clear that chartered luxury aircraft cannot be used by those who receive bailouts, and we should provide an exception. We should provide an exception where the destination is a place very far from scheduled air service. We should focus not only on perks, but on the total compensation package.

Now, the automobile bailout bill that passed this House, but did not pass the Senate, did provide limits on bonuses paid to the executives of the bailed-out firm. What we need to make clear is that any grant of a stock option is covered whether or not called a ``bonus,'' because the creativity of the corporate world is enormous.

AIG said, when they paid millions of dollars to executives just last month, those weren't bonuses; those were retention payments. So, given the ability of some in the corporate world to say it's not a bonus just because it quacks like a bonus or walks like a bonus, you can be sure that there are those in the corporate world who think that granting a stock option is not a bonus.

Why are stock options so important? Because the stock prices of the bailed-out entities are currently trading very low. That's why they need a bailout. So, if you give an executive the right to buy thousands and thousands of shares of his company and to buy each share for today's $1 or $2 price, you are, perhaps, providing that executive with tens of millions or with hundreds of millions of dollars worth of options. It is, therefore, important that we not allow stock options to be granted or allow stock to be granted--either one--to executives at firms that receive a bailout.

Some will ask: What about those companies that took money from Paulson and didn't know that there would be tough restrictions? The answer is simple: Give us back the money. No firm should be required to live under these tough provisions if it no longer wants to hold taxpayers' money, but if they've got taxpayer money, they ought to either live under the restrictions or return it to us.

In addition to bonuses and stock options, in addition to chartered aircraft, I should point out that Goldman Sachs, one of the companies that is holding our bailout money, paid a quarter of a million dollars last year for a luxury limo for just one executive. So there are some other perks for us to limit. But in addition to perks and bonuses, we ought to look at salaries because some of these executives are getting $1 million-a-month salaries.

I think, if a company is receiving TARP funds, they should limit the total compensation package of every executive to a mere $1 million, and when I say total compensation package, that has got to count everything. That counts the salary, the bonus, the pension plan contributions, and the stock options.

Now, I'm not certain that everything I'm suggesting here will be in the bill we consider next week. My fear is that the bill will prohibit bonuses but will be a little unclear about stock options, that it will prohibit leasing the corporate jets, but will allow the companies to charter the corporate jets, and that it will put limits on bonuses but no limits on salaries.

The question then is a difficult one for those of us who were skeptical about the initial bill. Do we vote to put in some additional restrictions knowing that they are insufficient or do we vote against it? I will be analyzing that issue carefully, but I will say this:

If we pass a bill next week that imposes additional restrictions, I hope we do so to a bill that is considered under regular order. Let us mark up the bill in the Financial Services Committee, and if the amendments that I've alluded to here fail to pass the committee or the House, I'll be happy to vote for the bill knowing that these issues have at least been discussed, but if we are confronted with a bill that is a step forward but is not considered in regular order, as to which there is no markup in committee, and we are not allowed to consider amendments, substantive amendments on this floor, then it will be more difficult to support a bill even if that bill is a step forward.

If we pass a bill that strengthens the TARP program but insufficiently, I will then introduce legislation to deal with the issues that I've brought up in this speech, and we will hopefully, one way or another, pass even stronger restrictions than those that are currently outlined on the Web page of the Financial Services Committee, hopefully as part of the one bill we will consider next week, possibly as part of other legislation that will be considered before the day when we authorize or when we vote on whether to disapprove the disbursement of the second $350 billion. So I look forward to improving the TARP bill.

I think, of course, the greatest improvement is that I am far less skeptical of the incoming administration than I am of the outgoing administration, and that high skepticism of the current administration is justified by the fact that not one penny has been spent yet by Paulson to do anything that he told us that he would spend all of the money on. So a certain degree of skepticism of the current Treasury Secretary has been borne out by his remarkable departure from that which he was very clear was his promise to this House, right up until the minute when we passed the bill that he wanted.

Finally, let's take a look at the stimulus bill. I just want to comment on a few of the tax provisions. One of those that is being put forward by the administration that, I think, a number of those, including Senator Kerry, have some concerns with is the idea of providing employers with a $3,000-per-hire tax credit for each new person they hire. Let me illustrate the concern I have with this proposal.

Imagine two restaurants. One has been there for years and is desperately trying to hold on, is desperately trying to keep its 25 staff members employed. Then somebody else opens a new restaurant right across the street. It's going to hire 25 new people. Well, under the provision as I understand it--and there is no legislative language yet available; although the bill will probably be voted on within a few weeks--the new restaurant gets a huge credit. It receives $3,000 for every one of its 25 employees, thereby putting it in a position to put out of business the existing restaurant across the street.

Now, there are some tax provisions being suggested by the Transition Team that, I think, make a lot of sense. These involve giving businesses tax deductions in 2009 that they were otherwise going to reap in 2011 or in 2012 or in 2013 anyway.

The chief reason I support these provisions is they give us a lot of bang for the buck. They put a lot of money in the hands of businesses today, but when you look at the Federal deficit over the next 10 years, they increase that Federal deficit only a little bit. Why is that? Because the money we're giving these businesses today is money they're going to owe us in future years. So we're not giving them new tax deductions. We're simply letting them take the tax deductions sooner. Two provisions particularly meet this standard.

One is allowing operating loss carry-backs for 5 years rather than for 2 years by allowing those with operating loss deductions to be used now. We give money to the companies now, but we deprive the companies of those deductions in future years.

Second, what is called ``accelerated,'' sometimes called ``bonus depreciation'' where we allow small companies to write off up to $250,000 of new investment immediately rather than taking depreciation deductions over a number of years.

Another element that ought to be part of the stimulus package is aid to States and localities. There is nothing worse to do in the middle of a deep recession than to fire a bunch of police officers and a bunch of teachers.

First, that means their work is not being done; our kids aren't being educated, and at the worst possible time, our neighborhoods are less safe. Second, it has an immediate negative effect on employment and on the cash

available to consumers. So we ought to be providing enough aid to all of the States to make sure that they can, if anything, increase employment on those areas of public employment that are truly useful to their citizens.

What we may need to do also is provide some formula by which we can provide the money to local governments rather than just to the State governments. I would suggest payments to each school district based on the number of full-time students and payments to whichever entity of local government provides police protection based on the number of residents they are protecting.

I want to thank this House for giving me an hour of time to express these views. Even with all of this time, as I've said, I have not presented all of the evidence in support of these positions. That's why I hope my colleagues will visit Bradsherman.house.gov to look at the additional arguments in favor of these positions.

I yield back to the Chair.

Hamas claims to be beleaguered, but it has rejected the U.N. Security Council cease-fire resolution passed last night. Hamas has done everything it can to increase civilian casualties, including the use of human shields. Yet even U.N. estimates say that over two- thirds of the Palestinian casualties have been gun-toting militants, and, other estimates put that number at over three-quarters.

When Hamas launches rockets from a neighborhood, an Israeli sergeant has seconds to decide whether to return fire, and there's always a pundit to vilify that decision. But moral culpability for civilian casualties does not lie at the feet of sergeants. Moral culpability for the horrors of war lies with politicians who seek extreme and unjust ends, through violent means.

While Israel seeks to live in peace alongside a Palestinian state, Hamas seeks to kill or expel every Jew from the Middle East. Hamas proudly waves the banner of genocide and ethnic cleansing.

Vote for the Resolution.

I will take much but not all of this hour to speak. Roughly, the first half of the presentation will be on our economic situation. The second half will focus on foreign policy.

I know that I have a number of colleagues that may have important things to say to this House, and if they come to the floor, I'll be happy to yield them a few minutes at a time that is convenient for them.

Even with this long speech, I will not be able to cover all the details that I'd like to provide to my colleagues. Therefore, I invite all my colleagues to visit the relevant portion of my web page, bradsherman.house.gov for more of the details of the matters I'll be discussing here.

In talking about our economy, I will divide my speech first to talking about matters relevant to the Financial Services Committee, on which I've served for 12 years, and particularly the bill known as TARP, or EESA, the Emergency Economic Stabilization Act, best known to the public as the $700 billion bailout bill.

The second part of my economic presentation will deal with the stimulus package now being put together, particularly by the Committees on Appropriations and Ways and Means.

Now, I was a critic and twice voted against the $700 billion bailout bill, the so-called TARP. The supporters of that bill will have to admit that it has not restored our economy as the proponents had advertised, and, in fact, some of the worst times for the economy were the 2 to 3 weeks following its passage.

On the other hand, those of us who were critics should admit that the bill has, frankly, cost the government far less than I had anticipated. When I say cost, I don't mean just how much is spent, but from that must be subtracted the value of the securities, the bonds and the stock certificates received by the Federal Government.

In this case, Secretary Paulson misled this House and the other body by testifying that he would use the $700 billion to buy toxic assets, bad bonds. Had he done that, and all of us voting on the bill had every reason to believe that he was telling us the truth, had he carried out that policy, then he would have bought, for the money he had spent, whether it's the 350 billion he has spent so far or the 700 billion that I feared he would spend, he would have spent that money in return for assets of dubious value. That's why they're called toxic assets.

In contrast, having misled the House and the other body, Secretary Paulson bought preferred stock in the various financial institutions. In doing so, he was overly generous to Wall Street as to the terms, but, nevertheless, he did secure assets for the Treasury that are of substantial value.

Paulson's shift, frankly, was right along the lines that many of us who are critics of the bill had urged him to adopt. And so those who supported the bill, those who are critics of it, must both recognize that what the Treasury has done so far is far different from what all of us believed would, in fact, be the policy.

Now, we see that $350 billion has been expended by the Treasury, and another $350 billion remains unspent. I am pleased that the Secretary of the Treasury has not yet taken the procedural actions to release and give himself control of the remaining $350 billion.

It is my understanding that leadership will bring to this House a bill that will release the $350 billion to the Treasury and will impose additional conditions. And I'd like to take a few minutes to address what I think ought to be in that bill.

First, is the issue of whether any of the funds to be released, any of that second $350 billion, will be available to the Bush administration. Last month I wrote the chairman of the Financial Services Committee saying that we should have limits on the amount that could be spent by the Bush administration out of the second $350 billion. In fact, I proposed that only $10 billion or less be available to the Bush administration to deal with whatever exigencies it dealt with in its waning days. It is my understanding that the bill that will be brought before this House will provide the Bush administration with $0 to deal with whatever comes up in its last week or so in office.

In any case, I think, having seen Paulson in action, the vast majority of this House would believe that somewhere between 95 percent and 100 percent of the second $350 billion, if it is made available to anyone in the executive branch should be made available only to the Obama administration.

I should point out something about process. It would be best if any bill dealing with the second $350 billion was actually dealt with in regular order.

Now, I'm not saying necessarily that every committee of possible jurisdiction should do a full markup, but as we deal with this economic crisis, at least the primary committee as to each bill should have a markup so that Members can be heard, and the House can work its will.

In addition, I would hope that the Rules Committee would allow a reasonable number of amendments to be considered on the floor.

In addition, I would hope that the Financial Services Committee would give the same scrutiny to the financial institutions who have received and are likely to receive additional bailout monies as we gave to the executives of the three automobile makers.

We need extensive hearings. We need to bring the titans of Wall Street down, and we need to have these hearings at both the full committee and the subcommittee level.

We do not want to give further credence to the accusation that Congress and the administration have two standards for scrutinizing bailout requests, one for those who shower before work and a more severe standard for those who must shower after work. We should have at least the same amount of scrutiny to an industry that has already received the bulk of $350 billion as we provided to an automobile industry that is requesting amounts less than 5 percent of that amount.

Now, what should we provide in the way of restrictions to those who obtain bailout funds or retain the bailout funds they have already received?

Federal dollars should be expended to bail out private interests only on the toughest terms. Taxpayers should demand the highest yield, the largest equity upside, the strictest limits on executive compensation and perks. Even when we bail out individual homeowners rather than big time executives and shareholders of major companies, the Treasury should get a large share of the profit that they earn when they sell their homes.

Why is it so important that we are tough on those who seek bailout funds? There are three important reasons. First, being tough will increase support for the program. The public is currently focused on executive compensation and perks. I think it will soon focus on the value of the securities the

Treasury is receiving, including warrants that represent the upside, the potential profits of a company that is receiving bailed out funds.

We need public support for the enactment, and there is considerable public skepticism. In talking to my colleagues, I find very few who are enthusiastic about releasing the second $350 billion to the executive branch, and I find, while most of my colleagues believe that we need a stimulus package, there is real reluctance to adopt one as large as that being recommended by so many prominent economists. We can achieve that support in this House and in the public by being tough on those who receive bailout funds.

Second, being tough on those obtaining bailout funds will help to limit the number of people seeking to be bailed out. Not even the Federal Government can afford to fund all of the bailouts that will be demanded if executives see the Federal Government as a source of easy and cheap money.

Third, getting a good deal by tough negotiations with anyone receiving a bailout will reduce the amount by which we are increasing the Federal deficit. We will be expending hundreds of billions of dollars now. I'm just addressing the $700 billion piece that is half completed. There will be other expenditures. We need to reassure our children, and we need to reassure the international markets that we are acting responsibly to minimize the increase in the Federal deficit.

Now, some of the expenditures being made out of the TARP funds are going to be money lost forever. It's going to be buying assets that turn out to be worthless or investing in companies that go bankrupt. That is why we need a very large upside on those of our investments that are successful. Typically, the Federal Government obtains an upside by obtaining warrants from the companies it provides bailout funds to. These allow the taxpayers to reap the benefits of a company's success when it returns to profitability and when that profitability is reflected in its stock price.

I believe that, in the negotiations with Wall Street, Secretary Paulson has been far too generous to his friends in the financial services industry. Given the tremendous risks the Federal Government is assuming, taxpayers should be receiving far more of the upside in return for their investments.

For example, in the recent bailout of Goldman Sachs, the taxpayer received half the rate of return and one-sixth the warrants that investor Warren Buffett was able to receive on a similar investment that he made in Goldman Sachs for his fund.

The Emergency Economic Stabilization Act gives the Treasury too much discretion as to what to demand in the way of warrants. While the Treasury is required to obtain warrants when it injects capital into financial institutions, it can accept as few warrants as it likes.

The Treasury has adopted a one-size-fits-all approach, which provides the Federal Government with warrants equal to 20 percent of its investment when it buys preferred stock in a financial institution. Not even this 20 percent is required by the statute, and this 20 percent is often way too low because those healthiest banks on Wall Street were willing to give us 20 percent. Clearly, the riskier banks on Wall Street that got bailout funds were not adequately compensating the American taxpayer for the risk we are taking because they only provided 20 percent warrants, a figure that might be appropriate for those financial institutions that are low risk.

The question is: What can we do in a statute? Clearly, we hope that the next Secretary of the Treasury will drive a tough bargain whenever investing our taxpayer dollars in private firms, but we can do something in the statute.

At a minimum, we should include language that was in an early version of the House bill dealing with the automobile relief that requires warrants of at least 20 percent, and we should make it clear that this 20 percent is a floor, not a ceiling. We should direct the Secretary of the Treasury to demand warrants that fully compensate the taxpayer for the risks being taken in any particular deal.

Then we turn to the issue of executive compensation and perks. These are very important to taxpayers and are important in deterring those companies that don't need a bailout from coming to Washington in their private jets, hats in hand.

Now, the bill, as interpreted by the Bush administration, has allowed multimillion dollar salaries to continue to be paid to the very executives who drove their companies into the ditch, and the Bush administration has chosen to impose no limits on perks. In particular, the Bush administration has ignored section 111(b) of the EESA, also known as the TARP bill.

That section states: Where the Secretary determines that the purposes of the act are best met through direct purchases of troubled assets, the Secretary shall require that the financial institution meet appropriate standards for executive compensation and corporate governance.

Virtually all of the $350 billion that the Secretary of the Treasury has expended has been pursuant to his determination that we could best be served through direct purchases of troubled assets. He has not done an auction, which was the main part of the bill he was trying to sell to us. Instead, he has simply made direct purchases of assets from companies, negotiated one at a time. In those circumstances, the law requires that he shall require that the financial institution meet appropriate standards for executive compensation and corporate governance.

What has Secretary Paulson done?

He has allowed multimillion dollar bonuses to be paid to the executives of AIG. He has allowed million-dollar-a-month salaries to continue to be paid to executives of bailed-out Wall Street firms. He has allowed all of those entities to continue to operate fleets of private jets. Despite getting our money, Goldman Sachs spent almost a quarter million dollars a year to provide a limo for one executive. This does not constitute appropriate standards for executive compensation and corporate governance, nor should Congress simply punt to the executive branch what those appropriate standards should be.

Instead, we should provide by law that, if a company gets a Federal bailout, the firm must limit its total compensation package to any executive to no more than $1 million per year for as long as the firm is holding our money. The limits should apply to the whole package of compensation--salaries, bonuses, pension plan contributions, and stock options. In particular, a huge grant of stock options to an executive at this time could be a bonanza--and an unjustified one--because right now all the stock prices of Wall Street firms are at depressed levels, and an option given to an executive to buy shares of stock for $1 or $2 a share could turn out to be more valuable than a ton of winning lottery tickets.

To the extent any existing contract provides for executive compensation in excess of that which is allowed under statute, I suggest that the bill provide that that contract is void as against public policy.

Now, let us turn to perks. We should limit luxury perks like corporate jets and chauffeured limousines. We should prevent these while any firm is holding taxpayers' money. I'll point out there are firms on Wall Street that got money from Paulson that said, ``Hey, we signed up for the money. We never knew you were going to get tough with us.'' Fine. You don't like the new rules? Give us back our money; but if you retain taxpayer money, then you should not, as Goldman Sachs has done, be paying a quarter million dollars in a year for a chauffeured limousine service for one executive. If the firm's executives don't want to take off their belts and their shoes and go through airport security like the public does, then that firm should not receive and should not retain a bailout, and it probably doesn't need one.

For as long as those bailout funds are outstanding, we should prohibit firms from owning, leasing or chartering luxury jets or from maintaining a fleet of chauffeured limousines. We should provide exceptions for chartering planes to travel to remote areas, areas remote from scheduled air service, and we should allow some sort of driver and auto to be provided to those executives who face severe physical challenges.

We may also want to provide limits on how much the company reimburses its executives per night for any hotel

room--a maximum amount of $500 comes to mind--or per meal for any meal. Perhaps it should be $100 per meal. I hate to get down to this level of specificity, but Wall Street has proven that they will squander the money taxpayers provide their firms on lavish parties and fancy travel if we are not specific.

It is possible that the auto bailout bill that passed this House will be used as a model for limiting executive compensation and perks. If that's the case, we had better strengthen it first. We had better make clear that the limits on bonuses apply not just to cash bonuses but also to grants of stock options. We should limit the total compensation to $1 million a year, and we should limit the use not just of leased or of purchased luxury aircraft but also of chartered luxury aircraft. Finally, we should have appropriate limits on limousines.

Let me point out that some of my colleagues have noticed that I was tough on the auto executives who used their private jets to come to us the first time.

One of those companies has told me very explicitly: ``Sherman, the law may say that we can't own the jets; the law may say we can't lease the jets, but the law, as passed by the House, says we can still charter the jets, and our CEO is never going to fly commercial.''

That's fine unless that firm receives bailout money. Once it does, we have to limit it. We can't play a shell game with the American people. Oh, we'll limit the luxury travel, and then just have the company charter the jet instead of lease the jet. That would be a fraud on the American people.

There is one other important improvement that we need to make to the TARP bill. You see, after that bill passed, the Treasury adopted, as I mentioned before, a plan to buy preferred stock, in particular, of financial institutions. The next administration will probably use a good chunk of the money to go back to the original plan, which was to buy bad bonds--toxic assets--from the financial institutions. Then we have to be worried. If we're buying bad bonds, at least we should buy bad bonds owned by American investors. It is not the purpose of this bill to bail out banks in London and in Riyadh and in Shanghai.

I want to make a technical distinction. I have no objection to our treating as American companies such firms as Hancock Insurance and Fireman's Fund that happen to be owned by a foreign parent. We should look at what company is on American soil, and we should provide appropriate bailouts to the companies on American soil, but what we should not do is start bailing out banks in Shanghai, London and Riyadh.

Under the bill as we passed it from this House, the Bank of China can sell a portfolio of toxic assets to any U.S.-headquartered entity whether it owns that entity or not. It could be a small branch that it owns in my State of California or it could be some big bank on Wall Street that it does not own, but the Bank of China can sell a portfolio of bad bonds to a U.S.-headquartered entity on Monday, and under the bill we passed, that entity can sell those same bonds to the Treasury on Tuesday. I call this the China two-step. It is a mechanism by which we will end up bailing out the bad business investments, not of U.S.- based companies, but bad bonds which are held in safes in Shanghai and in London.

Our new legislation should provide that the Treasury can only buy assets--bad bonds, mortgages--proven to be held by a U.S. entity-- whether it's a foreign-owned entity or not, an on-the-ground, in-the- United States entity--on September 20, 2008.

We should only be buying the bad bonds that were in safes located in America on September 20, which is the day that Paulson went public with the need for a bailout bill.

Now, I look forward not only to reforming the TARP bill but also using that reform as an opportunity to pass other legislation within the jurisdiction of the Financial Services Committee that can help deal with this economic crisis. And I want to point out, first, things that we can do that won't cost the treasury a penny, because before we start spending trillions of dollars, we should say, ``What can we do to get out of this mess that doesn't cost us anything?''

There are a couple of opportunities.

First, we can increase the amount of business lending that can be made by credit unions. Right now, we limit credit unions severely as to how much business lending they can do. We could, for the duration of this crisis, allow those credit unions to make those business loans to small business: $100,000 loans, $150,000 loans. I'm only talking here about smaller loans to small businesses that need them. We need to allow businesses in all of our districts to get that $100,000 loan that they need to expand or even to stay in business. And it is just folly for us to take one of the healthy groups of financial institutions in this country namely, the credit unions, and tell them they can't make the $100,000 loan that is desperately needed by the small businesses in our respective districts.

Second, we need to increase the conforming loan limit. The conforming loan limit is the size of the loan that can be purchased by Fannie Mae and Freddie Mac. Those are basically the only loans that are being made today. And the cost of housing differs tremendously from one region of the country to another, even in these tough times when of course in most regions prices have gone down.

Last year, we raised the conforming loan limit to $729,750 for high cost areas, but we allowed that increase to expire effective on the first day of this year. We need to restore that at 730, perhaps raise it to 750. Now, this will not cause the Federal Government to lose a penny because Fannie and Freddie actually make a profit on the larger loans. They suffer losses or have suffered losses on the smaller loans.

One way we can help replenish the money that Fannie and Freddie have lost is to allow them in high cost areas to do loans at the $750,000 level. That can be so critical for some of our big cities where declines in house prices have so badly affected local economies.

Now let me turn my attention to the stimulus bill, the bill that will basically be crafted by the Appropriations and Ways and Means Committees.

First, I want to approach the general principles that should be covered under that bill, and then I want to comment on specific ideas that are being put forward in light of those principles.

Mr. Speaker, this country faces the specter of depression. A deflationary cycle threatens a long period of economic contraction. We need an enormous immediate economic stimulus. But unless that stimulus is well designed, it may not pass Congress. Unless it is well designed, it may not achieve its objectives. And unless it is well designed, it may sow the seeds of a future disastrous decline in the value of the dollar.

So we have to make sure that the stimulus bill is big and fast but also tough, temporary, and self-reversing.

What do I mean by ``tough''? As I have said, Federal dollars should be extended to private interests only on the toughest terms. And I have indicated there are three reasons for that.

First, we've got to discourage everyone from seeking a bailout or from believing that they're suckers for not seeking a bailout.

Second, we need to increase public support for what will be a highly contentious and difficult-to-pass stimulus bill. It will be much easier for Members to vote for such a bill if it provides the toughest terms to those who are receiving extraordinary Federal largess.

And finally, as I pointed out, by getting warrants, by getting other securities that give us a share of the upside, we will be in a position to decrease the increase in the deficit occasioned by the stimulus package.

Now let's talk about why the bill must contain provisions so that the stimulus is temporary and reversible. Self-reversing, in fact.

Keynesian economics offers a simple prescription for the difficult times we're facing now. That is to say, easy money now and fiscal and monetary austerity after the economy improves.

How in good conscience can we vote for a massive economic stimulus now if we believe that it is unlikely that Congress will adopt austerity later? We in Congress love handing out money. We know that. We love tax cuts, and tax rebates, and tax holidays, and tax fiestas, and benefit expansions, and subsidies, and bailouts, and infrastructure

projects, and aid to States, and aid to cities and Rite Aid, Kool-Aid. We like spending money.

Can we count on future Congresses to discontinue and then reverse the fiscal expansion that is necessary today? What I fear is going to happen is that the advocates of fiscal responsibility--and I count myself among them--may prevent Congress from giving us the full level of economic stimulus that we need now. I fear that the stimulus will not be as big and fast as we need now. And simultaneously, I fear that the advocates of tax cuts and the advocates of free spending will prevent us from turning off the spigot later.

To avoid this outcome, the stimulus package should be both temporary and self-reversing. The same statute which provides a huge amount of stimulus should also provide particular identified tax increases and expenditure cuts that will go into effect automatically in the year 2013. The statute could and should provide that those automatic provisions would be delayed if we failed to achieve 3 percent economic growth in the year 2012.

Now, of course I can't know today what is the best budgetary policy for this country in 2013. We would have to fine tune or change anything that we write today as 2013 approaches. But we need to give the upper hand to those who would advocate fiscal responsibility after economic growth has resumed.

If austerity in 2013 is mandated by a statute that goes into effect, then the advocates of fiscal responsibility will have that upper hand and can negotiate with our colleagues to make sure that we get the kind of austerity that should follow the fiscal expansion that we need now. Only if an economic stimulus proposal is tough, temporary, and self- reversing can we generate the political will necessary to adopt a proposal that's big enough and fast enough. Only if stimulus measures are temporary and self-reversing can we make sure that the actions we take this month do not eventually lead to inflation, higher interest rates, a declining dollar, and an enormous and permanent increase in the Federal debt.

So these are the principles that I think should guide us with regard to particular elements of the stimulus bill.

Now let us look at particular proposals. Are they efficient? Do they get money into circulation quickly? Does every dollar we spend or forego get into the economy and get in quickly?

Second, is the money spent for a good purpose?

Third, does the money stay in the United States, or are we going to be spending money at the Federal level that goes to simply finance our trade deficit?

And finally, are the provisions temporary and self-reversing?

First, let us talk about aid to States. This is, I think, the most important element of the program because what could be worse for an economy facing contraction than to see our police officers and teachers being laid off by State and local governments just when we need to keep people employed.

If we provide aid to States, what about the efficiency? I think every State government is going to spend that money effectively. Those States that don't need it may choose to save it for the future, but there are very few of those. Will the money be put to good use? Yes, to keep teachers and firefighters and police officers on the payroll and all on the job. Will the money stay in the United States? One hundred percent of it stays in the United States.

And, of course, this would be temporary. If we wanted, we could even make it self-reversing. Most States are not allowed to borrow money from the Federal Government by their own constitutions, but what we could do is change the reimbursement formulas so that we take a bigger share of the Medicaid budget than we do now and let the States save money on that with the understanding that come 2013, not only does that formula go back to where it was, but it may even swing in the other direction and be adverse to the States.

They could plan for this. This would be a way to make the proposal of State aid even self-reversing. But if it's not self-reversing, it will be temporary. It will be efficient. It will be a good use of money, and the dollars will stay in the United States.

Second is the possibility of tax rebates to consumers. This is money that will be well spent by America's families who need it. But we cannot be sure that they will spend it. It may be saved, and we have to expect that of the portion of it that will be spent, much of it will be spent on foreign-made goods. So it may be important to provide these rebates to consumers in our society. It will help keep the retail economy going, keep our shopping centers from going bankrupt, et cetera. But let us remember that a chunk of that money is going to go overseas.

A third element is business tax breaks, and here we have to draw a distinction between those business tax breaks, which we in the tax world call ``timing differences,'' and those that are permanent tax reductions.

What are the timing differences? Timing difference is when you give somebody a deduction today that they would otherwise get tomorrow anyway. You have simply changed the year in which they get the tax reduction.

There are two proposals on the table from the Obama transition team that fit this bill. One of those is changing the rules with regard to investments up to, I believe it's a quarter million dollars, to let smaller businesses write this money off in the year in which they spend the money. In the absence of a special provision, they would have to capitalize that money and write it off as the asset they purchased is used up, as the machinery wears out.

Well, we want to encourage businesses to invest now, and ultimately it costs us little or nothing. Yes, we give them the deduction right now this year, otherwise they would take it over a period usually of 5 years. Why not give them the deduction now? The ultimate increase in the deficit over 5 years is very small.

Now, it is true that there's a time value of money. Not getting tax dollars today and getting them instead several years from now, that used to be thought of as a cost to the Treasury because you have to pay interest on the money the Federal Government borrows. But today the Federal Government is borrowing money for amazingly low interest rates, some at the rate of zero, and so the fact that we will get the tax dollars collected from businesses 2 or 3 years from right now, rather than immediately, scarcely increases the Federal deficit.

Another issue is net operating loss carryforwards and carrybacks. These are companies that made money during the last 5 years. Now they're losing money in 2008 or they're going to lose money in 2009. Current tax law allows them to write off those losses chiefly against money they make in 2011, 2012, future years. We should allow these companies to carry it back, to use these net operating loss deductions now to offset the taxes they paid in prior years.

First, I regard this as fair. Any accounting theorist will tell you that the use of the 1-year accounting period is arbitrary, that companies make and lose money in cycles. Business cycles often last many years, and so you cannot say that it is anything but artificial to say, well, you made money in 2007, you lost money in 2008. No, you made and lost money over a period of years that we have artificially divided into 12-month periods. So saying that you have to pay money on the taxes you made in 2007 but cannot get an immediate refund of those taxes when you discover that really over the 2-year period you've lost money is not consistent with good accounting theory. We should allow net operating loss carryback.

The other thing is these net operating loss deductions. They're going to be taken at some point. We might as well let them be taken now, and the ultimate increase in the deficit is very small.

So those are two provisions that I think will encourage business and will provide a lot more money in expenditures today than an ultimate increase in the deficit over a 5-year period.

So I look forward to working with my colleagues on economic policy. I will have more details of what I've talked about on the Web page, bradsherman.house.gov. This is the beginning of a dialogue on how to deal with the greatest economic crisis that we have faced in the lifetimes of all but the oldest Members of this body.

foreign policy

At this point, Mr. Chairman, I'd like to focus on foreign policy and particularly the Middle East. Again, I would point out that if there are colleagues that would like me to yield them a few minutes and they happen to be on the floor, they need only get my attention.

Now, I want to commend the Bush administration for its support of Israel during this difficult period. Now, the press, as is often the case, is beating up Israel due to its lack of understanding of what is happening and how to interpret it.

First, let us remember that over the last several years Hamas has sent nearly 7,000 rockets into Israel. That's 7,000 times they have attempted murder. But the press would have you believe that those attempts at murder don't count because most of them were unsuccessful. This is absurd. The malice is demonstrated by the attempted murder, and I use the term ``murder'' explicitly here because every one of those rockets was fired with only one intention: kill Israeli civilians. Not a single one of those rockets was targeted at anything military. The fact that they haven't killed 7,000 Israelis does not reflect well on their morality. It may reflect poorly on their aim.

Second, and this is under-covered by the press, the United Nations has stated that roughly three-quarters of the casualties in Gaza are of terrorists-military, gun-toting, Hamas terrorists. This is a true tribute to the tactics used by Israel because Israel has done everything possible to avoid civilian casualties. Hamas has done everything possible to increase civilian casualties. Again and again, they fire rockets from the middle of schools, from the middle of hospitals, from the middle of residential neighborhoods.

I mean, these people live very close to each other. Israel actually has the Gaza phonebook. They will call a house and say, We know military supplies are being stored there, we're going to hit this house, you've got 10, 20 minutes to leave. And what happens? Hamas forces civilians up to the rooftops.

Perhaps one of the best-known examples is the highest level Hamas individual to be killed by Israel. At his home he stored rockets and Israel knew it. He announced publicly that he wanted to be a martyr and that he, himself, would be at his home. And Israel called that home and said we want to avoid civilian casualties. We have to hit that home because we know that rockets are being stored there, you have time to leave. What did this Hamas leader do? He forced and brought together his four wives and their many children and insisted that he be allowed to die as a martyr and that as many of his family members would die as possible in order to increase civilian casualties.

Now, it is well-known that Israel is allowing trucks of supplies to get into Gaza. This is usually known by press critics who say Israel didn't allow a resupply truck in at this particular hour; they made the truck wait a couple of hours. Let us compare this to the wars we are most familiar with: World War I and World War II.

During each of those wars, Britain used its entire navy to cut off every German civilian from food imports and any other kind of import. And Germany deployed its submarines with the sole effort of depriving the British of the food imports they needed from chiefly the New World.

So, in the wars we're most familiar with, both the good and the bad side did everything possible to stop civilian supplies from getting into Germany or Britain. Compare that to an Israel that protects the trucks as they go in.

With that, I'd like to yield to the gentleman from Georgia (Mr. Broun).

I look forward to working with the gentleman from Georgia and thank him for his remarks.

Any discussion of the morality of war sometimes gets off on what I think is a sidelight. People always want to criticize this or that sergeant, this or that gunner; oh, you shouldn't have responded this way to rocks being thrown; oh, your attempt to return fire to a Hamas rocket site was off by 10 yards or 20 yards in the direction of a civilian location.

We have to remember, the moral responsibility for war and for the deaths of war cannot be placed at the feet of this or that sergeant making this or that decision under life-threatening conditions. The moral responsibility for war and for its casualties must be placed on politicians who seek extreme and unjust objectives through violent means.

Here's a case where Hamas has earned its designation as a terrorist organization. Not only does it use terrorist means, but what are its objectives? They are stated very clearly. They are for the death or expulsion of every Jew from the Middle East. They refuse any change in that policy. So whether it is genocide or ethnic cleansing or more likely a combination of the two, these are the objectives of Hamas, being pursued by violent means. It is obviously the fault of the politicians of Hamas who seek these objectives that must be held responsible for the resulting carnage.

We need a sustainable, permanent cease-fire, not a 2-day resupply truce to allow Hamas to bring in more rockets.

Now, I think it's clear that this is not just a conflict between Israel and Hamas. It is a conflict between the Government of Iran and the people of the United States. The fighting in Gaza has demonstrated again that the ultimate adversary of the United States and its allies in the Middle East is the Government of Iran. Hamas is a terrorist organization seeking the destruction of Israel in favor of an Islamic Palestinian State, but it is also an Iranian proxy. As such, it is part of a regional war waged by the Iranian regime against the United States and its allies.

Many Hamas weapons are made in Iran, and many top Hamas military leaders and the experts who launch the missiles into Israel were trained in Iran. Iran also provides the group with significant funding. It is unlikely that Hamas would have been able to achieve its status as the premier Palestinian terrorist organization and thus provoke this crisis without Iranian backing.

Iran-backed Hamas, like Iran-backed Hezbollah, shoots rockets at Israeli civilians from deep inside their own densely populated civilian population, knowing that when Israel acts to defend itself innocent Palestinians will be among the victims.

Through Hamas, Hezbollah and its operatives in Iraq, Iran and its government are able to stir up crises in the Middle East, thus injuring American prestige while helping to achieve that government's own aims.

We know that Iran is working hard toward the possession of a nuclear bomb. This would allow Iran to act with impunity in the future. A nuclear Iran would go from provoking this crisis to that crisis, and we would have to go face-to-face with a nuclear power, each time hoping, hoping for the same results we saw in the Cuban missile crisis--that is to say, going eyeball-to-eyeball with a hostile nuclear power hoping we always have the same result, namely, some peaceful resolution.

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It only takes one crisis with a nuclear power that goes in the wrong direction to destroy an entire city or an entire country.

Furthermore, we should recognize that if the regime in Tehran ever finds itself on the verge of collapse--and many of us pray for that day--its leaders may decide to go out with a bang.

Preventing Iranian nuclear possession is critical to world peace, and we can still succeed in accomplishing that goal, but we have to act quickly. The good news is we have used only 1 percent of the tools that are available to us, and therefore we can do a lot more. The bad news is we've used only about 1 percent of the tools available to us. We have demonstrated a lack of political will to use the methods that we have to use to put pressure on the Iranian regime.

Now, President-elect Obama has a strong record of working to put pressure on the Iranian regime. He voted for the Lautenberg amendment, which would have prevented U.S. oil companies from doing business with Iran through their foreign subsidiaries. And he authored a bill that would have encouraged divestment from firms--chiefly oil companies-- doing business with Iran.

He will have the ability, when he takes office, to go a long way toward increasing the price the Iranian Government pays for its stance on the nuclear issue and its support for terrorism. First, he can stop U.S. oil companies from using their overseas subsidiaries from doing business with Iran. We should also do that by legislation.

The administration can start enforcing the Iran Sanctions Act. We can demand that the World Bank stop dispersing funds to Iran in the form of concessionary loans which have not been effectively opposed by the current administration. We can deny nuclear cooperation agreements to countries that provide technologies to Iran. We can deny insurance to ships that carry cargo to Iran. And we can put economic pressure on American foreign companies seeking to build liquefied natural gas plants in Iran and those that sell refined petroleum--chiefly gasoline--to Iran.

Now, while Iran is oil rich, it needs to import nearly half its gasoline because it lacks refinery capacity. I'm here to bring to the House's attention one recent success. The Indian press is reporting that as a result of pressure that was initiated in the Congress, a major Indian petroleum refinery is halting its business dealings with Iran. I want to thank the several of my colleagues who joined with me in sending a letter to the U.S. Import-Export Bank to demand that EX-IM not provide loans to this particular Indian refinery as long as the Indian refinery was supporting Iran and providing it with the gasoline it needs.

I look forward to being able to convince Iranian elites that they face other economic and diplomatic isolation if they continue their nuclear program and continue their support for terror, and there are many other ways that we can achieve that objective. I invite my colleagues again to see more details at bradsherman.house.gov.

Mr. Speaker, I'd like to take this opportunity to clarify two provisions in the bill through a colloquy with its author, the distinguished chairman of the Financial Services Committee.

First is section 11(e)(2)(B), which provides certain powers to the so-called Car Czar. And I'd like to clarify that that would include the power to prohibit a plant closure. Is that correct, Mr. Chairman?

I know, as a matter of legislative history, it's Congress that writes bills, and I hope that any signing statement----

The second provision I'd like to clarify is section 12(b)(3). It's my understanding that this prohibits the granting of stock options and prohibits a bonus, even if that bonus is referred to as a retention payment.

I thank the distinguished chairman.

We have seen the Fed and the Treasury provide $7 trillion in expenditures and in risk assumption as part of the economic bailout. In contrast, we can keep the automobile industry alive until the next administration through an expenditure of somewhat over $14 billion, a risk of only $14 billion.

So a $14 billion bridge loan seems rather small in light that all this administration, the Fed and the Treasury have done. Keep in mind that Germany, Japan, Korea, China, France, every nation with an automobile industry is doing far more to protect their automobile industry than we are by providing 14 to $15 billion of bridge financing. That is why I will vote for the rule and for the bill. But this is far from a perfect bill.

Due to the efforts of the administration, we are now limited to receiving warrants worth only 20 percent of what we are investing. The original text of the bill mandated that Treasury could seek more than 20 percent. Given the risks that we are taking in lending money to General Motors and Chrysler, we should be getting far more than 20 percent warrants, and certainly the bill should not limit us to that. But the administration, in its generosity to the automakers, limits this to 20 percent warrants.

Second, this bill should prevent the auto companies from suing against the California tougher standards for air emissions and for global warming and higher standards for fuel economy. These companies should be trying to meet those higher standards, not suing to prevent them.

Finally, the bill does prevent the companies from owning luxury planes, but allows them to charter luxury jet aircraft. So I know the auto companies will be back, and I hope they fly commercial. We'll fine-tune this bill in the spring. Let's vote for it now.

Mr. Speaker, let me commend you on your years of service to this House, to your district, and to the Nation, and I look forward to working with you and serving the people of this Nation in whatever capacity your future takes you.

I'd like to address the kind of economic stimulus that we should write next month. I hope that the economic stimulus is big, fast, tough, temporary, and self-reversing.

We face the specter, not just of a recession, but of a depression. A deflationary cycle threatens a long period of economic contraction. We need an enormous, immediate economic stimulus. But unless that stimulus is well-designed, it may not pass Congress, and we may not achieve its objectives or it may sow the seeds of future, disastrous declines in the value of the dollar.

Now, it is important that this stimulus be fast and be very large, but it also needs to be tough because Federal dollars should not be extended to private interests except on the toughest terms. Taxpayers should demand the highest yields, the largest equity upside, and the strictest limits on executive compensation and perks.

Being tough on those who get bailouts will give us three advantages. First, it will increase public support for the bailout, and we are going to need a lot of public support to enact the size of stimulus that is necessary.

Second, by being tough on those obtaining bailouts, we can limit the number of companies that seek bailouts. Not even the Federal Government can afford to provide a bailout to everyone who will ask for it if executives see the Federal Government as a source of easy and cheap money.

Third, by getting a good deal on each investment we make, we minimize the eventual increase in the Federal deficit and the eventual burden to succeeding generations. Many of the companies that we make investments in will still not make it. So we had better make a good profit on our winning investments. We need to look at not only the rate of return that we get on preferred stock but on the value of the warrants because the warrants are our share, as taxpayers, of the upside of those companies that are successful.

It, therefore, concerns me that on a recent bailout of Goldman Sachs by the Treasury Department, we taxpayers got half the rate of return and one-sixth the warrants that Mr. Warren Buffett was able to receive on a very similar investment in the same firm.

So we must be tough. But we also must make sure that the stimulus we adopt is temporary and reversible. Keynesian economics offers a simple prescription for the difficult economic times ahead. Easy money now, and austerity when the economy improves.

But how in good conscience can I vote for a massive economic stimulus now if I believe that Congress will not be able to adopt fiscal restraint later? I know we in Congress love handing out money in the form of tax cuts or infrastructure projects or subsidies or aid. Can we count on a future Congress to discontinue expansionary policies and adopt austerity when times demand?

If we adopt a huge fiscal stimulus economy now, then both our tendencies toward profligacy and toward inertia may cause us to leave the spigot on too long, perhaps permanently.

What is likely to happen I fear is that the advocates of fiscal responsibility will prevent us today from getting the full measure of economic stimulus that we need now, and that advocates of tax cuts and free spending tomorrow will prevent us from turning off the spigot when that is what we should be doing. We will get inadequate stimulus in 2009, and we will continue the stimulus long after it is necessary and even when it is harmful.

To avoid this outcome, the stimulus package should be both temporary and self-reversing. The same statutes which

provide for a huge stimulus now should also provide for particular and identified tax increases and expenditure cuts to go into effect in 2013 automatically. The statute, of course, could provide that those automatic actions will be delayed temporarily if we fail to achieve 3 percent economic growth in 2012.

Now, sure, we're going to need to fine-tune this program later, but we need to give the upper hand to those Members of Congress who will advocate for fiscal responsibility in the early part of the next decade. If austerity in 2013 is mandated by statute that we adopt in 2009, then the advocates of fiscal responsibility will have a fighting chance when the budgets are negotiated early next decade.

Only if the economic stimulus proposal is tough, temporary, and self- reversing can we be confident that Congress will adopt a proposal that is big enough and fast enough to meet today's needs. And only if the stimulus measures are temporary and self-reversing can we make sure that the actions we take today do not lead to inflation, higher interest rates, a declining dollar and an enormous permanent increase in our Federal deficit in the years to come.

Wall Street wants the $700 billion so bad they can taste it. To get it they need two things. First, you create panic; then you block alternatives, and then you herd the stampeding cattle toward passing a bad bill.

We are told that we must act in hours. The fact is, we have taken 2 weeks and we can take another week, not a week of trying to jam us with a bad bill, but a week of writing a good bill. As over hundreds of economists have told us, including three Nobel Laureates, we ask Congress not to rush, to hold appropriate hearings and to carefully consider the course of action.

What have they done to the bill?

They've added earmark pork to the bill that they think will finally get us to buy it.

Don't fall for it. If we're going to deal with this crisis, we need to deal with it with other alternatives. Defeating this bill today is not the last step, it's the first step in passing a good bill.

Madam Speaker, I thank the gentleman for 1 minute. I can't possibly in that minute describe the problems with this bill. I hope people will pick up the blue paper that I'm distributing.

But what they have done to the bill is they have added special tax breaks for those who import bows and arrows, and those who import wool, thus displacing American products as part of the economic recovery package. That's why it's not the economic recovery package. It's the pork-laden, earmark-laden Wall Street bailout bill. It is a bill that will send hundreds of billions of dollars not for bad investment decisions made in America but to buy toxic assets currently in the safes in London and Riyadh, Saudi Arabia, and Beijing. It is a bill that will allow million-dollar-a-month salaries, and $5 million-a-month salaries, to be paid to executives who have driven their firms into the ground and now need a taxpayer bailout. It is a bill that provides for an oversight board that critiques, but cannot stop anything.

Vote ``no'' now. We will stay in town and write a good bill.

I thank the Chair. I have got 30 minutes, and I will share some with the gentlewoman from Ohio in just a second to describe the flaws with this bill. Believe it or not, 30 minutes is not long enough. But first I want to mention about the calls that are coming into our office.

The calls used to be from people around the country. Now Wall Street firms have their employees unplugging those headsets to call investors and instead calling Members of Congress. So now the calls coming in to at least my office have shifted from 20-1 against this bailout package for Wall Street, down to about 3-1 or 4-1 against this bailout.

I ask my colleagues not to be confused. Edit out some of those calls that are coming to you from folks who are being paid to make the call, and you will realize the country remains absolutely overwhelmingly opposed to this Wall Street bailout bill.

I thank again the gentleman from Ohio, and I will make a few more points.

We had a meeting of the Skeptics Caucus, which is now a bipartisan Skeptics Caucus, where we heard from Bill Isaac. Mr. Isaac was Chair of the FDIC, having first been appointed to that board by President Carter and then appointed by Reagan. You don't find very many people who have support on both sides of the aisle like that.

Bill Isaac led the FDIC in solving the 1981 crisis, which was probably worse than the crisis that we have now. He used the emergency powers of the FDIC. He was able to solve that credit crisis without significant cost to the taxpayer.

We ought to hear from Bill Isaac. And I look forward to us defeating this bill tomorrow so we can have hearings and all my colleagues, not just those who came to the Skeptics Caucus, can hear from Mr. Isaac and so many others, because the starting point is this testimony that we didn't hear before any hearing, because there have been no hearings on this bill, but rather a letter sent to Members of Congress by hundreds of eminent economists, including three Nobel Laureates. And they said, we ask Congress not to rush, to hold appropriate hearings, and to carefully consider the right course of action.

So, Nobel Laureates, economists eminent in their field, say the sky will not fall if we take some time. The only way to pass this bill is to keep up the panic. The panic has to be calmed down. We have got a few days. We have got a week. We have got 10 days, and that is more than enough time to write a much better bill.

But let me summarize some of the other things that Bill Isaac told our Skeptics Caucus. A vote ``no'' on tomorrow's bill is not a vote to do nothing. It is a vote to defeat that bill and to start writing a much better bill.

Under the bill that comes before us tomorrow, in Mr. Isaac's belief, half of all the money is going to be used to bail out foreign investors who made dumb business decisions. Now, I am not real sure that I want to use taxpayers' money to bail out American investors who made bad business decisions. But why are we bailing out the Bank of China? Why are we bailing out the Saudi royal family? We are doing so because they demand it. They communicate those demands at the highest level to our administration.

After I yield to the gentlewoman from Ohio, I will describe how the bill clearly provides that we can send as much money as Treasury wants not to bail out American investors, but to bail out foreign investors. And when I say foreign investors, I don't just mean companies here in the United States that happen to have foreign owners.

I have sought at the Rules Committee to simply put an amendment in this bill to say that we are not going to buy any toxic asset that wasn't demonstrably owned by an American on September 20. That amendment will not be allowed. It was not allowed last time; it won't be allowed this time.

Why? Because they think they can hide from this Congress and from the

American people the fact that hundreds of billions of dollars are going to overseas investors. And there are transparency provisions in the bill on a lot of things, but the one thing that will never be revealed, when Goldman Sachs sells a bond on December 1 to Treasury, what will not be revealed is whether Goldman Sachs bought it from the Bank of China two or three days earlier with intention to sell to Treasury. We are going to be buying bonds that are currently in vaults in Beijing and London.

What Mr. Isaac also pointed out is that this bill is not going to solve the problem. People think that if you act in a panic and you throw $700 billion at something, you are going to solve it. Hardly. In his estimation, the credit markets will not be appreciably working any better than they are today. They may loosen things up for a week or two, but you are looking at a December that is no better than it would be if we did not pass this bill.

The FDIC could solve this problem under their existing powers. If they are a little shy to use those powers to the hilt, we can and should pass a bill that outlines that, yes, indeed, we do want them to use their powers. What should they do? They should provide for a temporary time a total guarantee on all of the general credit debt of banks, so the regulated commercial banks would be places where people know their money is safe.

They are subject to regulation, and the main part of this crisis is that the banks are unwilling to lend to each other as they traditionally do because no one bank is sure that the other bank is safe. We have got to say the commercial banks of America are safe and tell investors around the world that is where they can put their money with total safety.

Now, this leaves out some Wall Street entities that are desperate for that $700 billion. They can just taste it. But it allows us to solve this problem without appreciable cost to U.S. taxpayers. And the FDIC collects an insurance premium from the banks so it would be the financial system, not the American taxpayer, paying the cost of taking care of this risk.

Now, I would hope that every Member of Congress has received my blue paper. I have sent it out today via e-mail, I have handed it out on the floor, but I know there are a few that haven't received it. Please contact my office and read these seven pages. Learn how this bill will send half the money to foreign investors. Learn how this bill bails out firms that will continue to pay $1 million a month salaries, and could raise those executives to $1.5 million a month, should they choose to do so.

Please, read the paper. Read about the key provisions of the bill. Then you will be armed with the information necessary to deal with the fearmongers that tell you, well, you had to pass that bill. You had to dump $700 billion from a helicopter onto Wall Street, because somehow that was going to take a terrible economy and turn it into a great economy.

Such an action will indeed, will indeed, make things better for a few Wall Street executives, and they are very determined, and their employees on company time are calling our office.

With that, I yield to the gentlewoman from Ohio.

Thank you. I thank the gentlelady from Ohio.

The only way they can pass this bill is by creating and by sustaining a panic atmosphere. That atmosphere is not justified. Many of us were told in private conversations, if we voted against this bill, that, on Monday, the sky would fall and that the market would drop 2,000 or 3,000 points the first day and another 2,000 the second day. A few Members were even told that there would be martial law in America if we voted ``no.'' That's what I call fear mongering--unjustified, proven wrong.

We've got a week; we've got 2 weeks to write a good bill. The only way to pass a bad bill: Keep the panic pressure on.

Now, what has the Senate done to this bill? First, they've added pork to it in the hope that that would buy off some votes. Second, they've created a double hostage situation. Now, we already know that the first bill was a hostage situation. When Paulson announced this crisis, he basically sent a ransom note, and that ransom note read, ``We've got your 401(k), and you'll never see it alive again unless you send us $700 billion in unmarked bills.'' So we had one hostage situation.

There's the AMT patch, a necessary tax provision that Congress passes every year. Without this patch, the AMT tax, which is designed to fall only on the wealthy, will hit another 20 million American households. Everyone knows we have to pass this. We sent it to the Senate for them to pass. Instead of passing it, they created a hostage situation. They refused to pass it. They put it on this bill. So now we're being told, if you don't send $700 billion to Wall Street, we're going to tax 20 million American families in a way no one in Congress wants to do. That's totally phony. If we vote down this bill, the Senate will pass the AMT patch bill that we sent them just like they do every year.

There has been some attempt to tell the American people that this bill isn't going to cost anything permanently because, in 2013, we're going to get the money back from the financial services industry. Nothing could be further from the truth. All the bill says is that the President has to send us a proposal to tax the financial services industry. Now, keep in mind, if the President has any good ideas in 2013, he'll send them to us or she'll send them to us. If the President is only sending us revenue ideas because they have to send them and they don't want to send that proposal, well then, they're going to send it with a note, saying, ``I'm required to give you this proposal, but I think it's a bad idea.'' What do you think we're going to do with a Presidential proposal that is disparaged by the President?

Furthermore, it would be absolutely impossible and contrary to the intent of the bill, contrary to the logic of the bill and contrary to the statutory provisions of the bill to construct a tax that hit only those companies that got bailed out. Instead, the tax is going to hit the entire financial services industry, and a proposal like that is highly unlikely to pass the House. If it passed the House and if it got over to the Senate, 41 Senators could block it, and Wall Street could have enough money to hire 4,100 lobbyists.

Now, why is it that we can't tax the individual companies that are bailed out on some sort of proportional basis?

Well, first, many of those firms aren't going to exist in 2013. Second, we're not even keeping track of how much money we lost on the assets we're buying from Goldman Sachs versus how much money we're losing on the assets we're buying from Citibank. We'll know how much we bought from each of them, but we might buy really toxic assets from one and only mildly troublesome assets from the other. We'll mix them together. Then we'll sell them off and we'll suffer a loss, and we won't know how to attribute that loss. How much are we going to tax Goldman Sachs? How much are we going to tax Citibank? We'll never know how to tax those we'll have bailed out.

Some of these companies we're bailing out are just going to be shell companies, so you know they're going to disappear before 2013, and you know that a tax bill is going to hit similarly sized banks with the same rate of tax: the banks that got a big bailout, the banks that got a small bailout, the banks that didn't get a bailout, the banks that sold us kind of bad assets, the banks that sold us assets that turned out to be worthless.

Such a controversial tax bill submitted under duress by a President is not going to pass this House, let alone pass the Senate, which can stop it with 41 votes. Wall Street gets their money now, and we get it back: never.

Now, as I said, hundreds of billions of dollars are going to be used to bail out foreign investors. That is why my amendment, which easily fixes that problem, has been rejected, because the White House demands that we bail out these foreign investors. That's what they want to do. That's what they promised the Saudi royal family. That's what they promised the Bank of China. Those promises will be honored with the tax money squeezed out of the American people.

They talk about executive compensation being controlled in this bill. They do put some controls on some bonuses being given to some departing executives--great--but they allow $1-million-a-month salaries. If some executive says, ``well, you know, you wanted to pay me a good bonus on top of my $1-million-a-month salary and now the bonus formula is being changed a little bit,'' the company can say, ``You know,

you're right. We wanted to give you more money. We'll raise your $1- million-a-month salary to $2 million a month.''

Now, if that qualifies as limits on the executive compensation of companies that need and get a bailout under this bill, please explain to me how that is. Look, Bill Gates is running a great company. He doesn't need a bailout. I hope he gets paid a whole lot. But if your company has been run into the ground, if you need a bailout, if you're part of the reason for this panic situation, why do you need to pay over $1 million a year to any executive? That ought to be the limit. Frankly, it strikes me as a generous limit.

We're told that there's going to be oversight under this bill. There is a good, Democratic-dominated board that is created. It is a critique board, not a control board. It is a board that will issue press releases and reports, but it will not halt and it will not reverse and it will not delay any decision that will be made by the Secretary of the Treasury, which brings up another thing:

Why are we having Paulson run this thing? I thought he already had a job. The Secretary of the Treasury ought to be a full-time job if we're in a period of an unparalleled, sky-is-falling economic crisis. Furthermore, he is temporary. He is leaving Washington in January. Why doesn't this bill provide for an administrator selected in a bipartisan way and with bipartisan support who is willing to stick around for 2 or 3 years? Because this is a Paulson-Bush power grab. Paulson doesn't want somebody else to do it. He wants to be up on Wall Street, handing out the money to the companies he likes and ignoring the phone calls from the firms he doesn't like.

I want to point out that, if another Member comes to the floor in the next couple of minutes, he can claim the next hour. Otherwise, for better or for worse, this speech and all of the pontificating on this floor will be over soon. So I hope Members will come to the floor. We've got a lot to discuss.

The board is just a critique board. Paulson's power is undiminished, and we're having a part-time, temporary employee run this because that's what Paulson really wants. Homeowners are not going to get any relief under this bill. All $700 billion can easily be spent.

I see the gentlelady from Ohio (Ms. Sutton), and I hope that she claims the next hour of time. I thank her for coming here and for being here so quickly. I will use the remaining 3 minutes of my time, and I will look forward to being part of her Special Order, right up until the Vice Presidential debate starts.

We are told in 2009 we are going to pass really good legislation to make sure that this never happens again--corporate governance reform, regulatory reform, we are going to get it done. What is really going to happen? We may write a really good bill in the House, something Wall Street really hates. Then it goes over to the Senate where 41 Senators out of 100 is all it takes to block it. I don't think they will defeat reform legislation in the Senate. They will delay it and then they will dilute it. And by the time it passes, it will be so diluted, Wall Street will drink it down with a smile on its face knowing that no effective reform is really being imposed upon them.

So we are not going to see meaningful regulatory reform; although we will pass something and Wall Street will tell you it is a big deal. We will see million-dollar-a-month salaries, or one-and-a-half million or $2 million a month salaries paid to the executives of these firms while they are getting a bailout with our taxpayer money.

We are going to see a very large percentage of this money going to buy securities, bad paper, and toxic assets currently in safes in Shanghai, Beijing, London and Riyadh, Saudi Arabia.

We will see all of the power in the hands of the Bush administration and in the hands of a part-time temporary administrator, namely the Secretary of the Treasury.

Under this bill, if it passes, we don't really know what is going to happen to the economy. No one knows. The only thing that is certain, two things: Wall Street executives are going to get huge amounts of money and our children and grandchildren are going to get stuck with hundreds of billions of dollars of additional Federal debt. And we as a country, having just done a bad $700 billion program, will not be able to do anything to help homeowners because we won't have the money. We won't be able to bail out local governments because we won't have the money. We won't be able to deal effectively with the real banking- lending crisis because we will have shot our entire wad on a bill that is guaranteed only to do one thing, and that is to help the truly wealthy on Wall Street.

My time has expired, and I look forward to the Speaker giving unanimous consent to the gentlelady from Ohio controlling the next hour.

Madam Speaker, I am placing in the record today the summary of an exceptionally important study on improving the global and regional economic immigration of the Maghreb.

This study was a collaborative effort of Ambassador Start Eizenstat and Dr. Cary Clyde Hufbauer. It highlights the critical importance of U.S. involvement in building a prosperous and stable Maghreb.

A draft of the full report is posted on-line by the Peterson Institute for International Economics at www.iie.com.

Prospects for Greater Global and Regional Integration in the Maghreb:

Recommendations from the Peterson Institute, IFPRI, and IEMED

On May 29, 2008, the Peterson Institute for International

Economics held an event to announce the results of a number

of studies that examine, from both a macroeconomic and

sectoral perspective, the barriers to and potential benefits

of economic integration among the countries of the Maghreb,

as well as between the region and the broader world economy.

The two macroeconomic studies were performed by the Peterson

Institute and the International Food Policy Research

Institute (``IFPRI''). The sectoral studies were performed by

the European Institute for the Mediterranean (``IEMED''). A

final Report will be published in October 2008.

The studies generally show that integration among the

countries of the region would yield increased trade and

investment. Greater increases in trade and investment,

however, would come from such regional integration combined

with stronger links between the region and the global

economy. The studies also demonstrate the importance of

reducing non-tariff barriers to trade and investment, as well

as the pursuit of regulatory harmonization to create a more

positive investment climate. Finally, the experts from the

three institutes who presented their findings offered

specific policy recommendations for the United States and

European Union, as well as sector-specific recommendations

for the regional economy.

Recommendations for the United States and the European Union

The core objective of closer ties between the United

States, European Union, and the Maghreb is to transform the

Maghreb economies, including by encouraging new industries

and services, new jobs, and increased rates of growth. The

United States and European Union should work with the Maghreb

countries to enhance integration through bilateral trade or

investment agreements or in companion agreements.

Aid for Technical Assistance and Capacity Building: The

United States and European Union can help improve the

business climate in the Maghreb by assisting with the

acceleration of reforms. Such aid could encourage the

harmonization of investment and regulatory regimes throughout

the region to the highest standards provided for in bilateral

trade agreements, promote sector-specific investment and

regulatory reforms, assist in the development of

transnational networks for transportation and energy

infrastructure, and provide the best technology for ensuring

that cross-border shipments can be processed efficiently and

securely.

Tariffs: The United States and European Union could work

with their Maghreb partners to negotiate lower tariffs, or no

tariffs, on selected products imported from other Maghreb

countries.

Rules of Origin: In the European Union's Euro-Med

Partnership, Algeria, Morocco, and Tunisia apply full

cumulation between themselves and diagonal cumulation with

the other pan-European countries. This approach could be

extended to Libya and Mauritania. The United States and its

Maghreb partners, building on the U.S.-Morocco free trade

agreement, could negotiate agreements similar to the

Qualified Industrial Zone (``QIZ'') program with Jordan and

Egypt or allow for the cumulation of inputs across the

Maghreb.

Encouraging Sectoral Cooperation: The United States and the

European Union could focus on how they can best stimulate

regional cooperation at the sectoral level. Possible areas

for collaboration with the countries of the Maghreb are

highlighted below.

Sectoral Recommendations

The countries of the region, with the support of the United

States and European Union, should work together to increase

intraregional integration in the major sectors of the

regional economy, which include energy, banking,

transportation, and agriculture and food.

Energy: It is not clear whether each Maghreb country will

be able to mobilize, on its own, the necessary means to meet

increased energy demands that will accompany increased

regional population and economic growth. Consequently, a

regional response is necessary. First, the flow of energy

through

the region is critical. For example, electricity constraints

could be dealt with by optimizing the exploitation of

electric interconnections that already exist between

countries. Second, sustainable development should be favored

to limit environmental constraints and to strengthen energy

supply, for example by implementing renewable energy

industries such as wind and solar. Finally, a global action

plan could seek collaborative efforts on power generation,

refining, transportation and distribution, and chemical

manufacturing by creating global companies to gain access to

European, U.S., and other markets.

Banking: The regional banking sector presents notable

contrasts, with some countries possessing modern banking

systems, while those of others have regressed since the

1960s. Regional banks are not necessarily relied upon to

properly manage assets, which results in a loss of capital

from the region. Banks are over-liquid, and credit is not

readily available. In short, capital is not mobilized for

development. A regional financial institution could transform

unused liquidity into long-term financial instruments for

saving and investment. Such an institution could build upon

the future privatization of the Algerian banking system to

create two regional banks with shareholding in all countries

of the region, a mandate to encourage intraregional

transactions, and a mandate to ensure currency

convertibility.

Transportation: The countries of the region inherited an

institutional framework that regulated transportation

infrastructure based on the French model that de-emphasized

competition. The failures of that model became apparent in

the 1980s. Although Maghreb countries were slow to treat

logistics as a strategic means of competitive leverage,

monopolies have now been dismantled, and competition

prevails. Morocco has an open skies agreement with Europe,

and Royal Air Moroc has a strong network in West Africa. The

first harbor ready to receive ultra-large carriers opened in

Tangiers in 2007. Because the value of transportation

infrastructure, including these projects, depends on the

extent of the network, the Morocco-Algeria border desperately

needs to be reopened. National networks currently end in cul

de sacs, and duplicate infrastructure--for example the ports

of Nador and Ghazaouet on either side of the border Morocco-

Algeria border--has been developed. Both are examples of

substantial inefficiency.

Agriculture and Food: The countries of the Maghreb are

close in distance, are close in agricultural production,

share similar patterns of consumption, and share problems

including aridity, water scarcity, and volatility in

agricultural GDP. Despite these similarities, there are

substantial differences among the countries in agricultural

and food policies, in terms of subsidies, norms, and

enforcement.. Regional similarities in this sector allow for

economies of scale, the potential for vertical integration,

risk-sharing for ``discovering'' new markets and new

products, regulatory harmonization to increase quality and

decrease smuggling, and collective responses to the need for

resource conservation.

Just because your constituents hate this bill--and will hate it more when they learn the details--does not mean that voting for it is an act of courageous patriotism. Just because this bill is unpopular doesn't mean we have to pass it immediately. Some 400 eminent economists, including three Noble Laureates, are asking us to come back and do our job and write a good bill in the next week or so.

They state--and their chart is here so you might want to read along-- ``We ask Congress not to rush, to hold appropriate hearings and to carefully consider the right course of action.'' Four hundred economists, three Noble Laureates.

Now, we know that this bill will allow million-dollar-a-month salaries to executives at bailed out firms, and it allows hundreds of billions of dollars to be used to buy the toxic assets currently held by foreign investors. But we're told not to worry because this $700 billion bill isn't going to cost us anything. We're going to recoup all of the costs from some future revenue bill that we will enact.

Now, the bill does not automatically enact any revenue increase, nor does it protect a revenue bill from filibuster or veto. Congress is highly unlikely to pass a multi-hundred billion dollar tax increase in 2013 or any other year. Tax increase bills are anathema to many. Forty- one Senators can block the plan, and we're giving Wall Street enough money to hire 4,100 lobbyists.

In recent years, Wall Street has effectively defeated every attempt to close every loophole they currently exploit, no matter how pernicious, including those involving Cayman Island tax havens used by hedge fund managers to pay zero tax.

Section 134 of the bill says the tax will be on the entire ``financial services industry''--good banks who don't need a bail out; bad banks who used a bailout; community banks, maybe even credit unions.

It is absolutely impossible to draft a tax that will hit only those firms who receive bailout payments and even more impossible to draft one that taxes each bank in proportion to how much money we lose on the toxic assets we happen to buy from them. In fact, there are no provisions in this bill that even keep track of the losses on the assets we acquire from an individual bank as we manage them, combine them, put them together in pools with assets we acquire from other banks and then sell them off.

Now, these bailed-out firms, many of them won't exist in 2013. Some are going to go under. Some of the bailed-out firms are just shell companies anyway. For example, if the Bank of Shanghai currently owes $30 billion of toxic assets to its tiny subsidiary it has already incorporated in California, the subsidiary will sell those toxic assets to the Treasury; the bailout went to that tiny subsidiary in 2009; it's not even going to exist in 2013.

Many of the bailed-out firms are going to be unprofitable in 2013. And therefore you're not going to be able to put an income tax on them. Some of the bailed-out firms are going to move offshore before 2013. Wall Street gets their money now, and we get it back never.

The New York Times reports that the administration has finally agreed to two of the tiniest fig leaves designed to help Members vote for this bad bill. The first is that the bill will include a provision to require some future President to propose a revenue bill to pay for the hundreds of billions of dollars we're going to lose.

Now, how meaningless is this?

If a President likes and wants to give us a revenue bill, he'll do it without a statutory directive. If he sends us a tax-raising bill with a note saying that he hates it but that he's submitting it only to comply with the statutory provision, certainly, such a proposal is dead on arrival.

If this is what it means to say you've paid for a bill, then will this same ``pay-for'' definition apply when we are discussing bills not giving money to Wall Street, but future bills that would provide for transportation, health care and tax cuts for the middle class?

The second fig leaf is the insurance provision. It simply authorizes the Treasury to set up such an insurance plan without directing that they actually use it. They [Treasury] hate it. They won't use it. If they did use it, it would send, perhaps, even more money to Wall Street.

This bill involves hundreds of billions of dollars that are going to bail out foreign investors, and million-dollar-a-month salaries will continue to go to Wall Street executives.

That's why 400 eminent economics professors, including three Nobel Laureates, have written to us to say, ``We ask Congress not to rush, to hold appropriate hearings and to carefully consider the right course of action.'' These are 400 professors of economics. Three Nobel Laureates say, ``Do not panic. Hold hearings. Let's write this bill well.''

I must respectfully disagree with the characterization and description of this bill put forward by my good friend, Mr. Dreier, from California.

This bill does not really limit executive compensation. It does limit a few types of golden parachutes. But it doesn't have any limits on regular salaries. Million-dollar-a-month salaries will continue, and they can be raised to $1.5 million a month once the companies get those bailout dollars and feel they can afford to be that generous to their favorite executives.

Foreign banks are going to get hundreds of billions of dollars out of this bill. Now, the bill says that the Treasury only buys securities from U.S. entities. But how does this work then? Well, let's say the Bank of Shanghai is holding $30 billion of toxic assets, business mistakes they made in China. They simply have to sell those $30 billion of bad assets to their subsidiary in the United States. They all have small subsidiaries here. That subsidiary can

then, the next day, sell them to the U.S. Treasury. Or alternatively they can sell that $30 billion package of toxic assets to Goldman Sachs, and then Goldman Sachs can sell them to the Treasury the next day.

But keep in mind, if they choose to use their own subsidiary, they sell $30 billion of assets to the Treasury. By 2010, 2011 they can dissolve that subsidiary and leave this country. And how are you going to impose any recoupment tax on them? The concept that there is a guarantee that we're going to recoup our money is absolutely wrong. We would have to pass a $200 billion or $300 billion tax increase bill in 2013. And under section 134 of this bill, that tax is not just on those who are bailed out. It is on the entire financial services industry. How else could you construct a tax if you have one bank that got bailed out to the tune of $1 million and another bank that got bailed out to the tune of $1 billion? What tax rate would you apply to banks of that size? The only way to do it is to impose a tax on a whole segment of or the entire financial services industry.

That means you're going to have the unfairness of taxing community banks and credit unions to pay for the money we give to Wall Street. It also means the bill isn't going to pass at all. Imagine the unfairness argument that that creates. But also any bill to tax Wall Street needs to get through a Senate where 41 Senators can block the bill. And Wall Street will now have enough money, our money, to hire 4,100 lobbyists. All they need is a good argument. And that good argument is that there is no fair way to recoup the money from the individual companies that got it. Many of the companies getting this money in 2009 aren't going to be around in 2013. Many of them are going to be shell companies that are deliberately dissolved in 2013.

We do not have to panic. Four hundred eminent professors of economics, including three Nobel laureates, tell us Congress should not rush. Let's not rush. Let's pass a good bill next week.

Under this bill, it is guaranteed we will get a proposal from the President. But to say that guarantees we're going to pass it is absolutely wrong. We don't pass 200 or $300 billion tax increase bills on the entire financial services industry over the objection of Wall Street and with the really credible argument that we will be taxing the good banks to pay for the sins of the bad banks and taxing the small local banks to pay for the sins of Wall Street--4,100 lobbyists to stop with 41 Senators a bill that will be highly controversial.

Let me quickly respond to the comments of the gentleman from Ohio. He can attack this bill as he will, except he cannot say that it is related to George Bush. Bush stalled and weakened this legislation throughout the 110th Congress. It would be law today without the opposition of the Bush administration.

He also tells us, he quotes from the NIE, that Iran seems to have suspended its weaponization program. Weaponization is the small, easy and delayable part of developing a nuclear weapon. The tough part is getting enough highly enriched uranium, and Iran is working full bore and proudly unveiled 3,000 and more centrifuges to do that. They can wait a couple of years, and then work on the engineering of how to take that enriched uranium and turn it into an atomic weapon, without delaying for a day the day they have become a nuclear power state.

I also want to agree with the ranking member when she states that this bill does not waive or make waivable any sanction in existing law. The sole purpose of this law is to increase and apply new sanctions to Iran, not to waive or make waivable any sanction under existing law.

The goal of this bill is to drive home to the people and elites of Iran that they face economic isolation if they do not abandon their nuclear program. But let's not exaggerate its impact. It is long overdue, modest steps in that direction.

The bill includes concepts from two important Iran sanctions bills that passed the House overwhelmingly in 2007. Within 6 months of our taking office, with the strong support of Speaker Pelosi and Majority Leader Hoyer, under the leadership of Chairman Lantos and Chairman Frank, the House passed the two Iran sanctions bills that have become the centerpiece legislation of efforts on Iran in the 110th Congress: H.R. 1400, the Iran Counter-Proliferation Act, authored by the late Tom Lantos; and H.R. 2347, the Iran Sanctions Enabling Act, authored by Chairman Frank and introduced in the Senate by Senator Obama.

We have worked over the opposition of the Bush administration to pass these bills through the House. Then they got bogged down in the Senate. Now the Senate, with Senators Dodd and Shelby, have reached consensus on an Iran package that encompasses the concepts in the House bills, though weakens them. This bill would already be in the Senate DOD authorization bill had a bipartisan consensus not broken down.

So now we have this imperfect bill which we need to enact, and hopefully the Senate will act on it in the next few days.

The bill takes important steps like reinforcing the embargo on Iranian goods. We don't import oil

from Iran. We only import the stuff that we don't need and they couldn't sell elsewhere. Unfortunately, this provision is waivable.

If it clarifies that a U.S. company, and I take some pride in authoring this provision, may not use its overseas subsidiaries to do business with Iran that it could not do on its own. Unfortunately, this provision is also waivable.

I would hope that people would understand, you get overwhelming rhetoric from the administration about how much they hate Ahmadinejad. The little secret is they have a love for the total independence of multinational oil corporations that exceeds their hatred of Ahmadinejad, and that is something the country does not understand. That is why the Bush administration has bottled up this legislation. We need to pass it now.

Last weekend, the establishment told us that if we did not give the administration and Wall Street $700 billion in unmarked bills within 48 hours, the sky would fall. The sky is still in the heavens.

Last night, Washington Mutual failed in the largest bank failure of our history. This illustrates that we do have a serious problem and we ought to come up with the right solution.

Last night, there was an enormous, precipitous drop in the likelihood that this House would rubber-stamp the establishment's program by this weekend. The markets are stable in spite of

Washington Mutual and in spite of the fact that their $700 billion is now not likely to be disbursed exactly this weekend.

We have a few days to craft a good solution, one that limits the power of the administration, limits the amount of money we spend, and limits the pay of Wall Street executives receiving bailouts. Let's get it right this time.