National Guard And Reservists Debt Relief Act Of 2008
Mr. Speaker, I yield myself such time as I may consume. I'm happy that the House is able to complete today the Congress' consideration of this bipartisan legislation. As we have stated at every turn, Republicans strongly support the…
Mr. Speaker, I yield myself such time as I may consume.
I'm happy that the House is able to complete today the Congress' consideration of this bipartisan legislation. As we have stated at every turn, Republicans strongly support the mission and appreciate the sacrifice of our dedicated Reservists and Guardsmen. We continue to agree that Reservists and Guardsmen who are plunged into bankruptcy by the demands of their service should be given a helping hand under the Bankruptcy Code.
Earlier this session, Judiciary Committee Republicans labored long and hard to achieve a workable compromise that would help these willing warriors. The merger issue for us was simple--that the bill respond to bankruptcies attributable to a Reservist's or Guardsman's service. The Senate has returned a bill to us that preserves the balance that we struck. The Senate has added one amendment, but it is technical in nature and was sought by the Administrative Office of the United States courts.
I urge all Members to support the passage of this legislation, and I look forward to the bill's implementation as law. I also look forward to the results 2 years from now of the GAO study contained in the bill. This study will tell us for sure whether Reservists and Guardsmen are using the relief granted by the bill when it is their service that leads to bankruptcy--not other factors. With this study in hand, when the bill reaches its 3-year sunset, we will know for sure whether it's being abused in cases lacking the necessary link to service. If it is being abused, we will be able to address that abuse at the time that reauthorization is considered.
In light of these considerations, I'm pleased to support passage of the bill.
I would also like to thank others who have worked on this bill, in particular Congressman Rohrabacher from California. I made, as the chairman of the Subcommittee on Commercial and Administrative Law that has oversight of the Bankruptcy Act, a promise that we would reconsider this bill that was done some years ago. Mr. Rohrabacher has done an amazing job, given leadership and determination to bring this bill to where it is today and, by doing so, has redeemed my promise and his and that of many other people.
I reserve the balance of my time.
I thank the gentlelady.
The American people are enraged by this bailout, or rescue as we're now calling it, and I think justifiably so. And they ought to be enraged that the real cause here--or the real cause of what I think should be the rage is that this has been done in a way that has been mandated, directed, expected that we would respond without much involvement. The rage of the American people reminds me of a bull often goes after the cape rather than goring the toreador. And what we need to do here, I think--I hope the American people recognize the opportunity to demand a transparent government.
There was no reason why the administration couldn't have made its three-page proposal available not as a legislative demand but as an outline of what the discussions should have been. There is no reason why we here in Congress have not done an open rule and had a debate on this. We could easily have taken this measure, debated it openly, amended it, adjusted it, and done things that make some sense.
Now the problem as I see the bailout--and the gentlelady and I have talked about this at some length--is that it pumps liquidity into banks and takes paper. That paper we hope is good. We hope it will be more valuable than what we have spent on it.
I thank the gentlelady. We have plenty of time on my side. If the gentlelady would like to yield back temporarily, I would be happy to use my time to talk about that point.
I thank the gentlelady, and if she wishes to remain, perhaps we can have a colloquy at some point.
Let me make a couple of points. We have had a long and intense discussion about what we can do to help solve, not the problem of the banks with their toxic loans which we hope we will buy at a reasonable price in a reverse auction, but what we do on the other side of this problem, which is homeowners who can't afford the loans that they got on property that was often misappraised or appraised fraudulently and therefore left in a box without being able to pay, with mortgages that are resetting at higher interest rates, sometimes with higher balances because of the way the mortgages were arranged.
So how do we help Americans stay in their homes in a reasonable fashion? And we've talked about bankruptcy as one way to do that.
Now in the bill that we did not pass here in the House recently, the Secretary had wide authority. I'm expecting that authority to be continued; and what I would hope is that the Secretary will not just put $700 billion into paper which may or may not be useful, but also something like $50 billion or $100 billion into funds that are intended to help people stay in their homes by creating the opportunity to buy mortgages at a discount, then renegotiate those mortgages with the people who are in those homes or others, and thereby avoid the downward spiral of housing costs.
I don't know that we're going to be able to do much with bankruptcy if this bill that passed the Senate passes the House today, I don't know that we're going to be able to deal with it. But I think that we ought to demand as the House that the Secretary recognize that this is not just a matter of buying paper and saving banks, but it's rather a matter of keeping a downward spiral on housing prices from continuing so that Americans can maintain the value on their homes, can keep their homes, and we can get this economic crisis behind us and perhaps even save some money.
I recognize the gentlelady is standing there. I would be happy to yield to her.
Reclaiming my time, I thank the gentlelady. The nice thing about being clear in your principles is that it's possible to negotiate and come up with compromises that work. It's been a pleasure to work with the gentlelady and also the chairman of the full committee who is also here with us, Mr. Conyers. It's not possible to be farther apart on the political spectrum than I think Mr. Conyers and I are, but we have had a very pleasant, and I think profitable, working relationship on many issues where because of his clear principles, and I hope my clear principles, we've been able to reach compromise.
Going back to what the gentlelady was saying, I fervently hope that I will not be part of any further negotiations on bankruptcy. I hope that we solve this problem today or tomorrow, I suppose, and then make the American people more safe by us being out of town and then letting the next year's crop of people come back and deal with the issue.
Let me just reiterate a couple of things the gentlelady has said. $2.1 trillion of subprime and Alt-A loans are in trouble. If we don't do something about that, those loans, as they fail--to the degree that they fail, and many are likely to fail--are likely to draw down to create a suction that will pull down the prices of all the other houses in America, creating chaos in our market.
It's imperative that the Secretary recognize his authority under, I think, the current language, and make it clear that he intends to do something not just about the paper because, as the gentlelady has pointed out, we don't own all of the fractions of the interests in these mortgages, and therefore we don't have the ability, by pumping money into paper, to solve the underlying problem. You have to do that in another way. And certainly where you have a second or a third, there is no ability by the Treasury, under the current program, to deal with that suction on prices.
So I am hoping that the Secretary of the Treasury will today make it clear that he intends to use part of this bailout money for which he has I think the discretion. I think it is important that he be clear that he has that discretion, that he intends to use the money that way so we can create a floor not just under the banks but also under the prices of our homes.
With that, I reserve the balance of my time.
Mr. Speaker, I noted earlier that the gentleman from California (Mr. Rohrabacher) had worked diligently on this bill, and I talked about his intelligence and determination and the fact that he has redeemed his promise and mine by bringing this bill to the floor today. I would like to yield as much time to him as he may consume.
Will the gentleman yield?
Thank you.
We're now at a point where we're going to be voting very quickly on this bill. I think you heard the colloquy between the gentlelady from California and myself. I'm wondering if the gentleman can be satisfied if the Secretary takes a position publicly that he is going to use some of this bailout money under the discretion that he's given in the bill to do what I suggested earlier, which is, to put money into funds that would buy mortgages and keep people in their homes. Is that the kind of thing that we can do--
Recognizing the gentleman's limited time, we have I think more time on our side, and I would be happy to yield some to Mr. Conyers if he would like more.
Would the gentleman yield for a colloquy on this issue?
Mr. Speaker, I would yield 2 minutes to the gentleman at this point.
The problem we're facing, or course, is the urgency of what's going on. And the gentleman has heard my concern with the failure of the administration to have this aired transparently; but that said, we do have some urgency. If the Secretary is very clear in what he says, can we move forward, as opposed to, say, amending the Senate's bill--which will come over to us--and then sending it back to the Senate for further votes. Personally, I don't think that that is likely to happen; it's your leadership that will control the Rules Committee. But I suspect that we're not going to get the perfect here with the good, that is, a commitment by the Secretary that is clear and open and patent.
Would that serve to resolve the gentleman's concerns?
Mr. Kucinich, if you would like to continue, we don't disagree, and I think by having a further colloquy, I think we actually can come to an understanding.
As I understand your concern, the Secretary does not have the ability--or it would be difficult for him to buy up all the fractionated interests in any given mortgage, and therefore, he is incapable, in his current position--unless he does something remarkable and spends more money than we intend him to spend, he can't provide relief on individual mortgages.
What I'm suggesting the Secretary has the authority to do is to put money into private funds that can then go to the servicing agent of a nonperforming loan, where the person is in an anti-deficiency State, or otherwise can walk away from that loan without recourse to the bank. At that point, the servicing agent has the ability to sell a mortgage, or a package of mortgages. In that event, what I suggest is that if the Secretary will pump some significant resources into the private sector to buy mortgages from servicing agents, and from banks and others, in a market where we are having deterioration of prices, that would tend, dramatically, to solve the problem. It goes a long way toward, I think, the gentleman's concerns.
Reclaiming my time, let me just say the gentlelady is absolutely accurate in her portrayal of the problem. Let me just clarify one thing, because a lot of people listening to us today don't understand what a reset is.
You have mortgages that are at a fixed rate which will then pop up to a market rate in the future. It is that pop up that is a problem. If you have a mortgagee who is behind in his payments, he may be able to stay in the mortgage when it goes up, but he may not be able to afford it. If he's behind, he can't refinance. He's stuck in a world where he can't get out of that mortgage, and the market will drive him. And the bank that wants him to renegotiate can't do it because of the fractionated ownership of that mortgage.
Reclaiming my time, I thank the gentlelady because she has made exactly the point. What we're trying to do here is avoid the collapsing values of houses.
Mr. Speaker, on that I demand the yeas and nays.