Floor Statements

Mr. Chairman, I thank the chairman of the full committee for yielding time, and I thank the ranking member of the full committee who has worked with us and recognized that there is a serious problem that is going on in the real estate area, in the lending area, that must be addressed, and I want to applaud the efforts of the chairman for trying to address this issue in a comprehensive and fair way. And perhaps the greatest testament to the chair of our committee is that we have come up with a bill that perhaps not any single person I know is completely happy with, including me.

This bill started 4 years ago with an initiative by Congressman Miller from North Carolina and myself, and this was in advance of the escalating foreclosures, the kind of irrational exuberance that was taking place in the real estate market. We saw that this was coming down the road because lending was becoming more available, but it was also becoming more irresponsible because it was viewed as a no-lose proposition. So lenders were making riskier and riskier loans to people who had more and more marginal credit and on terms that were not beneficial to the borrower but were financially beneficial, at least until the foreclosures started, to the lenders.

So the predatory lending part of this bill, which is title III, started out as the base bill to address those concerns that were taking place that were predatory practices, taking advantage of vulnerable borrowers so that lenders could make money. Then the onset of the foreclosures started, and the crisis in the marketplace in general reflected itself, and that has resulted in the addition of titles I and II of this bill, which put a framework around brokers, which creates a framework for responsible secondary market participation around lenders who dealt in prime loans.

Interestingly enough, over time, it is actually titles I and II that have become more controversial than title III, which was the predatory lending part of the bill. We think that the predatory lending part of the bill certainly has struck the best balance, because it is clear that with predatory loans there will be a national standard, but we are not preempting State laws and the States' ability to continue to innovate.

In titles I and II, where we have created a framework for the secondary market, we have preempted some State laws, and we have had trouble finding the right language to do that. We want to do it to create a national secondary market, but we don't want to do it outside the specific requirements that are needed to control the secondary market and make credit available. So there is some angst among a number of us about the preemption language.

As I said at the beginning, maybe the best tribute to all of us is that we have a bill that nobody really is completely comfortable with, and all we can say to all of those people is that we will continue to work on this bill not only after it passes the House today, but throughout the process to reach the more delicate balance and a satisfactory balance that at the end of the day will solve the problems in the marketplace and be satisfactory to all concerned.

Mr. Chairman, I offer an amendment.

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

The bill, as currently constructed, caps damages at the amount of three times the broker or lender fees for steering. It's crucial to increase the remedies for steering so that a limited remedy does not simply get figured into the cost of doing business. A more effective way of changing broker behavior would be to provide a remedy that provides for the greater of actual damages, or three times the broker or lender fees, because it is unlikely that we will incentivize people not to steer unless we make the penalties sufficiently onerous.

We want to eliminate the possibility that a lender will simply treat the remedy in the bill as a cost of doing business, and we believe that making the damages alternatively three times the broker's fees or actual damages will have more impact on reducing this bad kind of conduct. That's what the amendment does.

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

Mr. Chairman, I yield 1 minute to the gentleman from North Carolina (Mr. Miller).

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

I have listened to and acknowledged the concerns that are raised by the

other side and by Mr. Perlmutter from our side about this provision.

It is clear that certainty has value. But certainty when certainty is unfair and when you are trying to discourage a particular act such as steering a borrower to a higher priced loan, if you don't put in the bill the ability of people to get the actual damages that they incur as a result of being steered to a higher priced loan, then you are not going to deter the activity. Many unsavory people will treat this just as a cost of doing business because the reward for steering is so high that they can incur that risk for nine transactions and get rewarded and pay the cost of the risk on the one transaction that they might get caught on.

So if you really want to deter people from steering to the highest cost loan, you've got to provide an effective remedy that deters them from doing that. That's all I am trying to do. If people don't engage in this activity, there are no remedies. We don't even need any remedies. But where they engage in an activity that we have acknowledged under the bill is an undesirable activity, we have outlawed it. We have said thou shalt not steer to a higher cost loan. If you don't provide a remedy that is commensurate with that, then what you are saying to the market is you don't really care.

So I think this amendment is good, and I encourage my colleagues to support it.

Madam Chairman, I offer an amendment.

Madam Chairman, this amendment, on its face, is very, very simple, although I expect there will be some controversy about it. The amendment simply changes one word. The word is ``or.'' We change the word to ``and'' in the bill instead. You would think that would be noncontroversial, but let me get into the effect of that.

Currently, if an assignee of a mortgage has policies and procedures not to buy subprime loans that do not meet safe harbor provisions that are in this bill, or if the assignee is willing to cure such loans, the assignee has no liability until you get to a foreclosure situation. That's very complicated, I understand; but that's what the bill provides.

The effect of the amendment would be to require the assignee to have policies and procedures in place and do certain things and be willing to cure the loan to avoid being liable for rescission.

That's important because if you give the option to an assignee of either curing or having policies and practices that are responsible in place, an assignee can then just treat the cure as a cost of doing business, and it becomes an ineffective choice. But if they are obligated to both have the policies and procedures and protections in place, and be willing to cure the loan, then they are not going to exercise the option to do the least onerous one of those things.

It is a simple provision, a simple change, although I understand the arguments against it.

And I will, having created the framework and explained what we are trying to do, reserve the balance of my time.

Madam Chairman, I reserve the balance of my time.

Madam Chairman, I reserve the balance of my time.

I yield myself the balance of the time, and I assure you, I won't use it.

The arguments that have been made are absolutely correct with respect to 99 \44/100\ percent of the people operating in the market. These are not bad people. But this bill was drawn to get at that small percentage of the market that is out of control. And if you give that small percentage of the market the option of either doing some paperwork or curing, as opposed to having to do both of those things, I guarantee you they will take the option that is most cost beneficial to them. And

that's what we've been trying to stop, those people in the marketplace who are out of control. And that's what this amendment is designed to do.

For the rest of the market, it really won't have any impact at all because they're going to put procedures in place and they are going to be willing to cure, if that's the last resort.

So, I think, unfortunately, there are players in this market that have been out of control. This bill is designed to deal with them, and this amendment would help disincentivize them being out of control without harming anybody else. I would encourage my colleagues to support it.

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

Madam Chairman, I offer an amendment.

Madam Chair, you may not have to recognize anybody in opposition to this amendment because I plan to offer it and then withdraw it. But I think I would be remiss not to discuss the issue because of two reasons: Number one, it needs to be discussed because of the very difficult, delicate balance that the Chair has been able to walk to get us to this point; and number two, to illustrate once again that when you allow good things to happen in the marketplace, some people in the marketplace will abuse them. And trying to get the right balance to encourage good things to happen in the marketplace and not discourage that from happening opens up, sometimes, the possibility that people who are not well intentioned will engage in activities that need to be prevented. And this is the classic case of that.

Basically, the bill now presumes that we meet the ability to repay a loan and provide net tangible benefit to a borrower if it is not a subprime loan. If it is a prime loan in the marketplace right now, that interest rate is 8.25 percent, so anything below that we presume to be a good loan.

The market now has done this. They've made available in the market a loan that defers interest and principal. And that is a good thing for about 90 percent of the people, maybe even more than that, who have the ability to do that. I'm the classic example of that. I have a loan in which I can defer for a period of time both the interest and the principal on the loan. But if you make that kind of loan available to somebody who doesn't have the income level that is sufficient

to pay it, under this bill, they can't even go back and offer proof that you shouldn't have done that, because we presumed, irrefutably presumed, that this is a good loan. And so the amendment that I was trying to craft and offer would have tried to close that. The problem is, if I close it for the bad people, then I also close it for the good people.

And so, as an alternative to proceeding with the amendment, I have convinced the Chair, I hope, that we will continue to work on this issue and find a way to stop the bad people from making these kinds of loans or abusing the process without penalizing the people who really deserve and should have these kinds of loans, which I acknowledged from the very beginning serve a useful place in the marketplace.

I yield to the chairman of the committee.

And that's all I wish to have acknowledged, and to demonstrate to everybody who is listening, really, that this has been a difficult issue, because just about any kind of loan that can be made in the marketplace, somebody can benefit from.

But when you have a loan that is particularly subject to being abused, you have to have rules to constrain it.

Madam Chairman, I ask unanimous consent to withdraw my amendment.

Madam Chairman, I have a secondary amendment to the Hensarling amendment at the desk which has been made in order under the rule.

Madam Chairman, my good friend Mr. Hensarling may be surprised to know that we actually agree very much with the spirit of what he is trying to do. And I am not sure that my amendment will absolutely cure all of the concerns we have with it, but it will certainly make it better, and we will continue to work on trying to really address the issue.

We don't want anybody to walk in and give false information on an application for a loan. One of the reasons we fought so hard to protect State laws

and not to preempt all State laws is because that would be fraud and we think it would be outrageous, it would be shyster. But as everything, there is another side to this, and I will illustrate it with a loan that I just recently closed myself, a loan that was made to me.

I submitted the application. I submitted the financial information. And what happened after that was that because the lender wanted their own form, they took my information that I had submitted to them and put it on their own form. They handed it back to me in a stack of forms that I needed to sign, and I signed them.

Now, what has happened in the marketplace much, much more than the gentleman would like to know is that when that second block of papers came back, somebody had put false information on that application because they knew this borrower was not going to qualify for the loan if they didn't fudge the borrower's income, if they didn't fudge the borrower's credit in some way. So it was not the borrower who gave the false information; it was somebody else in the chain. And that is what we have got to guard against. And that's what the basic bill is all about.

Now, we don't have any problem holding people personally accountable for the information that they knowingly provide; but if somebody just sticks some documents in front of me after I have given them the right information and they go back and change the information or put it on another form and I just happened to sign it because I presumed that the lender I am dealing with or the broker I am dealing with is honorable, I shouldn't be held accountable for that. And my second-degree amendment helps to make that clearer. And I hope by the time this bill gets passed, we can make it absolutely clear that what Mr. Hensarling is trying to accomplish and what I am trying to accomplish get taken into account.

Madam Chairman, I reserve the balance of my time.

Madam Chairman, will the gentleman yield?

I will give him the same assurance. And I said it in my statement because I just got the gentleman's amendment yesterday or the day before, and I confess that my amendment to his amendment may not accomplish everything that both of us are trying to accomplish either, which is why I said we are going to have to continue to work on this, and I am certainly willing to continue to work with him.

I understand exactly what the gentleman is trying to achieve. We share that objective. But we want to make sure that the concerns I raise don't get washed up in the ``knowingly'' term that the gentleman used.

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

Mr. Chairman, I claim time in opposition to the amendment.

Mr. Chairman, once again, Mr. Garrett has focused on an issue that we talked about earlier in the debate. I offered an amendment and withdrew it, and it related to this general section. Basically, what we have done is allowed the lenders to presume, if they meet certain conditions, that their loan will be considered a safe harbor loan and go into the secondary market without any complications.

In certain kinds of loans, we have made that presumption rebuttable because there is still tremendous opportunity for abuse even if they meet all of the safe harbor requirements. In other instances, we have made the presumption irrebuttable, and it was on the irrebuttable part of that that I offered the amendment and withdrew it. This is on the rebuttable part.

Now, the problem with Mr. Garrett's amendment is that if you take out this rebuttable presumption, then the presumption becomes irrebuttable for all kinds of loans, those that have risks, and those that don't have risks.

So what does that mean to the average lay person when you create a rebuttable or irrebuttable presumption? An irrebuttable presumption makes it impossible for you ever to rebut it. Because it is irrebuttable, you can't even raise it anymore. A rebuttable presumption makes it possible, even though it is presumed, that you can still go and offer evidence that what is generally a fair loan turned out to be, in your particular case, an unfair loan.

So the effect of Mr. Garrett's amendment would be to make it impossible ever for anybody to get into court and contest any of these loans. Because if you take out the rebuttable presumption, it becomes an irrebuttable presumption. We don't want that. I mean, that is where the marketplace is now. It is out of control. It has been out of control.

While we are setting up a construct to make the market better, we don't want to pass a law that then sanctions going right back to where we are now. That is how we got here in the first place, the market was out of control. And the construct that we have set up allows people to buy mortgages in the secondary market and presume that they will be okay.

But we don't want to set up a situation where it is impossible for anybody to go into the secondary market or against anybody and say under no circumstances will you be able to get liability. That is what Mr. Garrett would have you do. I think it would be very, very, very bad public policy.

With that, I encourage opposition.

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

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

I yield to the chairman.

I would just add to that, on the floor today time after time after time, I have said that the great, great, great majority of the lenders are abiding by the rules. It's not those lenders who created this crisis. It is those people who are operating outside the rules, and that is what we are trying to put a construct around that is workable to protect those who abide by the rules of the road without shielding those who will abuse the process. This amendment would allow that to happen.

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

Mr. Speaker, I rise in strong support of H.R. 3996, which will address one of the most unfair provisions in the tax code that imposes an alternative minimum tax on so many of my constituents to whom it was never intended to apply. To some of my constituents, including the retired couple that lives across the street from me, this is among the most critical issues they face.

There is one specific tax provision being extended in this bill that I want to address specifically, the extension of the New Markets Tax Credit, NMTC, program. This tax program is critical to the revitalization of struggling communities and census tracts in our country that are in critical need of help.

There is one critical problem with the NMTC program that needs to be addressed. The Financial Services Committee's Oversight and Investigations Subcommittee, which I chair, held a hearing on October 30 entitled ``Preserving and Expanding Minority Banks,'' to review unique challenges facing minority- and women-owned financial institutions. A real concern revealed at this hearing was that minority-owned financial institutions have not been receiving allocations of credits under the NMTC program. Over the life of the program, only six minority banks have received allocations under the NMTC program and in the last round of allocations, of 61 recipients, only one minority bank was awarded new markets tax credits. This represented just $120 million of a total of $3.9 billion in tax credits awarded.

I believe that facilitating greater access to the NMTC program for minority and women-owned financial institutions will improve the program and help ensure the revitalization of low-income urban and rural areas. I appreciate the agreement of Chairman Rangel and Subcommittee Chairman Neal to work with me, and perhaps to have a joint hearing with our Financial Services Subcommittee, to explore effective ways to increase participation in the NMTC program for minority- and women-owned financial institutions.

Madam Speaker, Representative Brad Miller of North Carolina and I are pleased to join in this tribute to the Honorable Keith Holliday, who will soon be retiring as Mayor of Greensboro, NC.

Mayor Holliday is a model public servant who served as a member of the Greensboro City Council from 1995 to 1999 and has served as Mayor since 2000. He has distinguished himself nationally, effectively leading Greensboro through major economic and political challenges, through economic redevelopment and through a renaissance of Greensboro's downtown. He has helped position greenways, parks, public art projects and other beautification initiatives on Greensboro's priority agenda and has focused on servicing an ever-expanding, diverse and multi-cultural population.

Mayor Holliday has also been a committed and persuasive advocate for the International Civil Rights Center and Museum. Throughout the world, North Carolina is recognized as the birthplace of the sit-in movement and the International Civil Rights Center and Museum, the site of the original sit-ins, is being renovated and will be opening soon as a lasting tribute to the ``Greensboro Four.'' These four courageous students from North Carolina A&T State University led thousands of students and others who sat down at the F.W. Woolworth lunch counter in Greensboro, NC, to protest segregation and ultimately changed the human condition and struck a blow for human dignity, equality and justice for all.

We applaud Mayor Holliday as he continues to raise his voice in support of the completion of the International Civil Rights Center and Museum so the city of Greensboro and the citizens of North Carolina and this Nation will always remember this great chapter in American history. We join in thanking Mayor Keith Holliday for his many years of exceptional public service.

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 3678) to amend the Internet Tax Freedom Act to extend the moratorium on certain taxes relating to the Internet and to electronic commerce, as amended.

Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days to revise and extend their remarks and include extraneous material on the bill under consideration.

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

H.R. 3678 is an excellent example of what can occur when we work together on both sides of the aisle to deal with highly complex issues, and I am evidently not alone in this observation.

This bipartisan legislation is supported by industry groups such as the Don't Tax Our Web Coalition, government organizations such as the National Governors Association, the Federal Tax Administration, the National Conference of Mayors and the National Conference of State Legislatures, and supported by a wide range of labor and union groups.

In sum, H.R. 3678 temporarily bans State and local taxes on Internet access, while minimizing the effect on State and local government ability to raise needed revenue and treat businesses fairly. The bill is pro-consumer, pro-innovation and pro-technology. It amends the Internet Tax Freedom Act in four key respects.

First, it extends the moratorium on State and local taxes on Internet access for 4 years until November 1, 2011. The 4-year time frame will allow Congress to make any adjustments to the moratorium, if necessary, in light of development in the States or in technology, as Congress has done each time it has extended the original moratorium in 2001, in 2004, and in this bill. It will also allow sufficient time for business planning, while ensuring that everyone continues to have the benefit of access to the Internet tax free.

Second, the bill extends for 4 years the grandfather provisions to preserve the legality of taxes imposed prior to the 1998 act, consistent with passed extensions. The bill also phases out new grandfathers that some States claim were created in the 2004 extension, while allowing States that issued public rulings before July 1, 2007, that are inconsistent with the foregoing rules to be held harmless until November 1, 2007.

Third, the bill clarifies the treatment of gross receipts taxes which certain States have enacted in recent years in lieu of or as a supplement to general corporate income taxes. Like the general corporate income tax, these gross receipt taxes apply to nearly all large businesses, not just to Internet access providers. The bill clarifies that this form of general business tax is treated in the same fashion as a corporate income tax and is not covered by the moratorium as long as it is broadly imposed on businesses and is not discriminatory in its application to providers of communication services, Internet access, or telecommunications.

Finally, in response to a number of concerns regarding the definition of Internet access in the current law, the bill clarifies the term to mean a service that enables a user to connect to the Internet. This new definition will not only prevent all tax-exempt content bundling but will also include closely related Internet communication services, such as e-mail and instant messaging. In addition, the bill amends the definition of ``telecommunications'' to include unregulated, nonutility telecommunications, such as cable service.

I want to particularly thank Judiciary Committee Chairman Conyers, Ranking Member Smith, as well as Subcommittee Chairperson Sanchez and Ranking Member Cannon for their cooperative efforts in helping us get to this point in the process.

H.R. 3678 is a good, strong bill that provides much-needed clarity to the communications and Internet industries, and strikes the right balance in addressing the needs of States and local governments, while helping keep Internet access affordable.

I urge my colleagues on both sides of the aisle to join me in supporting this bill.

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

Mr. Speaker, I am pleased to yield such time as she may consume to the gentlewoman from California (Ms. Zoe Lofgren) who is the Chair of the Subcommittee on Immigration, Citizenship, Refugees, Border Security, and International Law, but has been an invaluable participant in the discussions that have led to this bill.

I reserve the balance of my time.

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

Mr. Speaker, I yield the gentlewoman from California 2 minutes.

Mr. Speaker, I yield myself such time as I may consume to close the debate and to address some of the issues that have been raised. I hope my colleagues will stay around, since they want to know the rationale for the 4-year extension versus the permanent extension, and listen to the rationale, because there is both ``practical rationale'' and there is ``substantive rationale.''

Let me deal with the practical reasons first. This moratorium that currently exists will expire the last day of this month if we do not act. The Senate has not done anything yet, and in many ways has made it clear that a permanent moratorium would be ``dead on arrival'' in the Senate. If the Senate is not going to act on a permanent moratorium, for the House to pass a permanent moratorium, send it to the Senate, have the Senate reject that permanent moratorium, runs the risk that time will run out before the month's end and the moratorium will run out before the month's end.

Mr. Speaker, I have heard the argument that we ought to make this permanent because this is stifling innovation. That strikes me as being like the argument that we ought to not tax anything because people are going to quit making money because there are taxes on the money that they make. I don't know anybody who, over all these years of threats that people have said to me people are going to quit making money if you don't quit taxing their money, I don't know anybody who has fallen prey to that kind of shortsighted attitude. I don't know anybody in the technology industry or in the innovation industry who has fallen prey to this notion that we are going to stop innovating just because there is a temporary moratorium on Internet access taxation as opposed to a permanent moratorium.

The last time I checked, the definition of ``politics'' was that politics is the art of compromise. We are doing what is necessary to move a bill. We can stand here and rail against the idea of a good bill on the idea that we want a perfect bill, or we can pass this bill, which I presume all these people who are railing against it not being permanent are planning to vote against the temporary extension when we get to a vote on it.

Mr. Speaker, I have heard this referred to as partisan politics. This is not partisan politics. We heard two Democrats get up and say they support a permanent moratorium. You have heard a number of Republicans say they support a permanent moratorium. There are people who don't support a permanent moratorium. A bunch of them are over there on the Senate side, and they have already made it clear if we deliver a bill over there, it's not coming back over here. So this is not partisan politics; it is practical politics. Understand the difference between partisan politics and practical politics.

Now, I have told you the political reasons why this is a temporary moratorium. Let me tell you the substantive reasons that this is a temporary moratorium. I just want to go back and read what I said in my opening statement. Every time we have extended this moratorium, we have revised this moratorium. The last time we did it, we had left out a whole bunch of people in the telecommunications world who thought that they should have been included in the definition of the moratorium. If we had made it permanent, perhaps we would have just left it as faulty, not corrected it. The fact that this is not a permanent moratorium doesn't mean that we can't go back 2 years from now, 4 years from now, 1 year from now, next month, and do something different.

Mr. Speaker, this is really not the end of the world that this is a temporary moratorium. This is the beginning of the world. We changed the moratorium in 2001, in 2004, and we will probably change it again, because every time we think we know the outer limits of the Internet, somebody comes along with something else that they can do on the Internet.

If we made this permanent, as if we had all the answers about what the moratorium, what the Internet's capacity is going to be, presumably that would be the end of the discussion, because we would have made this permanent, gone on to other issues, and not

been thinking about revisiting this and addressing whatever shortcomings we might have 4 years from now, as opposed to sometime in infinity out in the future.

Mr. Speaker, I, for one, am not on the permanent moratorium bill. I stand here with integrity telling you that I think it would be a serious mistake to make this a permanent moratorium on Internet taxation, because we don't have a clue standing here today what the capacity of the Internet is. Four years from now everything in life may be being done on the Internet. We might have a virtual world out there and then we may not be able to tax anything under the moratorium. So we need to continue to look at this on a regular, systematic basis.

This is not a cavalier decision that we have made. It is a practical, substantive, smart decision that we have made. I would request that my colleagues get off of this kind of ``letting the perfect be the enemy of the good'' notion, support this bill, and let's move on and extend this moratorium for 4 additional years. It is a good bill.

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

Thank you, Madam Speaker, and I thank my colleague, Stephanie Tubbs Jones from Ohio, for yielding time. I don't think it will take me 5 minutes to do this, but I did want to spend a little bit of time talking about the annual legislative conference that was conducted by the Congressional Black Caucus Foundation this past weekend.

I heard the comments of my colleague from California, Ms. Diane Watson, and I was fortunate to be able to sit in on one of her issues forums related to the Cherokee Freedmen, and I thought it was a very balanced and productive session, and very informative.

I've been privileged to be a part of the Congressional Black Caucus Foundation's annual legislative weekend for all 15 years that I have served in Congress. And I would have to say that the first 13 of those years I did my piece of the conference by conducting a discussion and issues forum on the Voting Rights Act, access to the vote, and I participated in various issues related to the Judiciary Committee. But last year and the year before last, I was honored to serve as the Chair of the Congressional Black Caucus, and I took a different perspective during those 2 years because it gave me an opportunity, as Chair of the caucus, not only to do my own issues forum, but it was part of, I viewed it as part of my responsibility to drop in on all of the issues forums and brain trust discussions that were going on.

And I can tell you firsthand that there was nowhere in the world that there were more thoughtful provocative discussions going on about the state of black America, our role in the United States, our role in education, justice, our role internationally, than take place at the Congressional Black Caucus Foundation's annual legislative conference.

That is the place to be to discuss the issues that impact our community, and I saw it firsthand, from issues related to the hip hop generation to the confidence of our African American youth, to the prison pipeline that, unfortunately, has been created, to the disparities that exist in health care and education and even in our international foreign policy.

So I'm honored to have been able to have viewed the weekend from a different perspective for the last 2 years.

But I will tell you, Madam Speaker, and my colleague, Representative Tubbs Jones, that I was honored to get back to being able to do just my thing again this year. And we had a delightful discussion about the Voting Rights Act in my issues forum.

Last year we had just passed the 25-year reauthorization of the Voting Rights Act, and so we took that year to kind of pat ourselves on the back and talk about what we had just accomplished. But we knew the onslaught would be coming immediately. And within that 1-year period, there has been a concerted effort, litigation has been filed, which is a direct frontal attack on the Voting Rights Act and its reauthorization.

So the first part of my issues related to that legal attack, which had just been argued in a court of appeals about 2 weeks ago, and I had the lawyer from the NAACP Legal Defense Fund there at my brain trust to talk about that attack and its likelihood for success. And I'm happy to report that we do not believe it is a serious attack, although there will certainly be others to come.

That presentation was followed by a presentation by Donna Brazile on the various methods that have been used throughout the country to discourage minority participation in the voting process and what we plan to do about it in the 2007 election and, more importantly perhaps, in the 2008 Presidential election cycle, some of the strategies that we plan to follow to combat those efforts to diminish and reduce minority participation in the voting process.

And then our third panelist was a director of a board of elections in Florida who talked about the desirability of creating a paper trail so that people who do show up and vote at the polls can reliably be certain that their vote will be counted and properly assessed.

So we just had three panelists. They did outstanding jobs. We had ample time for discussion and participation by the attendees at the conference and at our issues forum. It was a delightful experience and one that I look forward to being around next year at this time to replicate.

I again applaud you for convening this Special Order tonight to allow us the opportunity to talk about not only the fun things that happened at the foundation's annual legislative conference but, more importantly, the wonderful substantive discussions that take place around every issue that impact our community.

With that I will thank our convener this evening.

We did talk about that, and we are watching that case very carefully, as well as another case out of North Carolina, which is an attack on whether the Voting Rights Act protects congressional districts that are not majority minority, such as the one I represent, which is only 40 percent or so African American, and the ones that are represented by most of the members of the Congressional Black Caucus today.

I am actually walking into the floor at a good time to pick up on the point that the Chair of the committee is making.

This has kind of turned out to be the kind of debate that you hear in politics: Democrats believe in government and government can do everything; and Republicans believe in the private sector, and the private sector can do everything. The truth of the matter is neither one of those things is correct. There are some things that government can do and there are some things, a lot of things, that the private sector can do. One thing I think the private sector cannot do effectively is to insure against the kind of things that are really governmental responsibilities, protection of ourselves, our national defense. When that fails, it becomes a responsibility of government to accept and provide a safety net for our business community, or for our people.

It is unfortunate that this debate has deteriorated into that kind of dichotomy. You have to either have all of government or all of the private sector.

We think this is an ideal time for the government to be providing this kind of insurance protection so that business and the private sector and real estate development can continue to operate without fear of intervention by foreign powers or terrorists.

And I rise in support of the amendment

I thank the gentleman for yielding.

Mr. Chairman, when you practice law for 22 years, as I have before coming to Congress, and served on the Judiciary Committee for 15 years and never even in all that time dealt with patents, you are tempted to think of patent lawyers and the law of patents as a bunch of technocrats and elevate constitutional considerations and criminal law and other civil rights matters to a higher position. It has been an eye-opening experience for me, the first time to serve on this subcommittee and to see how important patent law is to stimulating, encouraging innovation, and to see how difficult and precise the law needs to be and how far behind the patent law has become in adapting to changes.

One of the changes that I think hasn't gotten much attention in this bill that I was surprised at as a member of the Financial Services Committee that has so many regulators of the various parts of our financial system which can promulgate rules, it seemed to me when I found out that the Patent and Trade Office really didn't have the authority to promulgate any meaningful rules, that that was contributing to the problem, because innovations and ideas and inventions and communications are traveling so fast that the law can't always keep up with them. It is in that context that meaningful regulation is important. So I wanted to point to that particular aspect.

Mr. Chairman, I offer an amendment.

Mr. Chairman, I am offering this amendment not proudly, unfortunately, but because of circumstances that have arisen that I will describe briefly and create the context for the amendment.

In 1866, after the Cherokee Nation, which at that time also owned slaves, had gone through tremendous imposition by the United States and forced off of their land, including the people that they owned as slaves, the Cherokee Nation of Oklahoma entered into a treaty with the United States under which it agreed to make not only the Indians who were Cherokees, but their slaves, members of the Cherokee Nation. Unfortunately, in March of 2007, the Cherokee Nation decided that it would, in violation of the 1866 treaty, take action to, in effect, rescind the citizenship of the descendants of the African Americans who had been their slaves, the so-called ``Cherokee Freedmen.'' That has created a tension between the African American community and the Cherokee Nation, which can best be described as unfortunate because there is so much common heritage there between the Cherokee Nation and African Americans, and common experience. And this has created a divide which we hope will soon be repaired and restored.

I'm in the unique position of understanding both sides of this because I understand when the Cherokee Nation says that in order to be a Cherokee, one has to have some Cherokee blood. And that is a position that is not a racist position. It is a position of establishing their ancestry, their blood lineage; and I have respect for that.

And I'm in the unique position of having a great-great-grandmother who was a Cherokee. I'm also in the unique position of being an African American and understanding that the fact of what the Cherokee Nation has done would be exactly the same as if the United States of America, having imported black people from Africa and enslaved them, once slavery had ended, had taken the position that slaves could not be citizens of the United States.

So I understand both sides of this argument. And I have tried to walk down the middle of it, but there is no way to reconcile those two positions. And so I reluctantly offer this amendment that would have the effect of denying funds that may be appropriated pursuant to the provisions of this bill, to the authority that is given under this bill, it would deny those funds from the Cherokee Nation of Oklahoma until such time that they recognize the Freedmen as citizens of the Cherokee Nation.

With that, that's the essence of the amendment, and I will yield back the balance of my time.

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

Mr. Chairman, I am not going to oppose the amendment to the amendment that I have offered. I do want to make a couple of points. First of all, some question has been raised about the timing of my offering of the underlying amendment. I did not choose the timing of this. This bill is on the floor today. And if my amendment is not on the bill, who knows when there will be another opportunity to deliver this message and to create an impediment pending the outcome of the litigation.

So I am perfectly content with the current status of the events in the sense that the court has said to the Cherokee Nation in a temporary injunction that you cannot exclude the Freedmen from the Cherokee Nation. As long as that court order stays in effect, I consider that we are at the result, which is the appropriate result. But if by chance 6 months down the road, 3 months down the road, 2 months down the road, a contrary set of circumstances exist, either the court withdraws its temporary restraining order or rules in a way that I don't think with any kind of justification it can rule against the Cherokee Freedmen, then this language will be in the bill and would appropriately have been put in the bill today. I can't come back 6 months from now and put it in the bill that is passed today.

So I didn't choose the timing of this. I am having to do this in the time frame that this bill is moving. So in a sense, the gentleman from Oklahoma (Mr. Boren) has served a very useful purpose here to basically codify everyone's agreement that as long as the court retains the status quo, allows Cherokee Freedmen to be citizens of the Cherokee Nation, that is an appropriate outcome for the case. And if that ceases to be the case, then this language would then take effect in the bill.

Mr. Chairman, for that I think we are indebted to Mr. Boren for clarifying that. I appreciate him and will not oppose the amendment.

Offered By: Mr. Watt

Amendment No. 6: Page 3, line 9, strike the quotation marks

and the last period.

Page 3, after line 9, insert the following:

``(l) Limitation on Use for Cherokee Nation.--No funds

authorized under this Act, or the amendments made by this

Act, or appropriated pursuant to an authorization under this

Act or such amendments, shall be expended for the benefit of

the Cherokee Nation of Oklahoma until the Cherokee Nation of

Oklahoma is in full compliance with the Treaty of 1866 and

fully recognizes all Cherokee Freedmen and their descendants

as citizens of the Cherokee Nation.''.

Mr. Speaker, in North Carolina at 9:35 on a Saturday night, I doubt that there are any people who are worried about what this Congress is doing to their constitutional rights, and probably that is so for people throughout America. I doubt that many of them understand what a FISA court is. But what they do understand is they don't want to entrust their constitutional rights to the Attorney General Alberto Gonzales. They don't trust him, and rightfully so.

So when Mr. Issa says that we worry about what the terrorists might be thinking tomorrow, I worry about what they might be thinking tonight, because they must be thinking: You know, we might have won the battle, because we have the United States reacting and giving up its constitutional rights.

Vote against this bill.

Mr. Chairman, I rise in opposition to the amendment and move to strike the last word.

Mr. Chairman, I think we come to the floor not because we feel like Mr. Flake's amendment is likely to pass, but he provides a unique opportunity for us to talk to each other and the American people about some of the problems and stresses that are taking place in our country. There are three points that I want to make.

First of all, this is not a local issue for me. The appropriation, the consortium, is of eight leading textile research universities in Alabama, California, Georgia, Massachusetts, New York, North Carolina, Pennsylvania and South Carolina. Not one of those universities is located in my congressional district. This is not a local pork barrel request for those of us who are rising.

Second, I want to make the point that Mr. Coble and I, on a bipartisan basis, have been the co-Chairs of the furnishings caucus, which the textile industry provides a major base for in North Carolina and in other parts of the country. This is not something that's just about textiles. It is about a broader-based loss of jobs and employment opportunities and a severe impact on our economy and various economies in multiple States that goes well beyond just the textile industry. I hope Mr. Flake recognizes that.

The third point I want to make is a broader point, because it is raised by the gentleman from Arizona in a sequence of amendments. He has made the argument that somehow we are better off to let the Federal Government be making these decisions rather than trying to direct these appropriations through this process to local communities.

Now, that's an interesting argument for a person to be making who in most cases makes the counterargument that States rights are more important than Federal rights. If anybody knows what the priorities ought to be in North Carolina, Massachusetts, Alabama, South Carolina, it should be the people who are representing those areas, and I would have to say Presidents, administrations, Democrat and Republican, have not paid sufficient attention to the plight of the textile industry, the furnishings industry, the loss of manufacturing jobs that we pay in our local communities.

So for somebody to make the argument that we shouldn't be involved in the process when the decisions that are being made are impacting our local communities, I don't understand, especially a gentleman who has consistently and long term supported the notion of States rights.

So I think this is an appropriate thing for us to be doing, not only in this amendment context, but in most of the contexts, in essentially all of the contexts. I even supported his Republican colleague's Christmas tree amendment because I thought he knew more about the Christmas tree industry in his local community than anybody was ever going to know on a national basis about the importance of Christmas trees to his local economy. These are things that we are uniquely situated to understand and advocate for, and I would hope that our colleagues would strongly and resoundingly defeat this amendment, for those three purposes and others.

I thank the gentleman for yielding.

I wanted to make the point too that when I am in Washington, I live just across the line between Northeast and Southeast. On a number of occasions on Friday evenings, I have had the occasion to be just on the Southeast side of that line down in the area where these maneuvers are taking place.

I doubt that the gentleman could imagine the number of visitors that come into Washington for these events, for these maneuvers, along with the families of these service people. We regularly, as Members of Congress, get invited, though we are seldom here on Friday evenings to take advantage.

But if you look at the benefit that is probably coming out of these maneuvers and the participation of the public and the support it builds up for our military and for the economy in this area, it is just a dramatic illustration. I just wanted to make that point.

Mr. Chairman, this is not my earmark. I wouldn't even be the stereotypical supporter of this. But it is an illustration of the national value that this earmark would play.

I thank the gentleman for yielding.

I'm going to make it more convoluted, because I've actually read the book that this earmark is titled after. It is a wonderful, wonderful children's book, and I say that with all sincerity. It's unfortunate that the earmark was named after the Perfect Christmas Tree, but the book itself, written by a local author, has produced a substantial amount of employment and funds for this area of North Carolina.

And for us to demean the notion of a perfect Christmas tree, which is the title to the book, a children's book, further convolutes this. I find myself kind of defending the Perfect Christmas Tree.

Mr. Chairman, I thank the chairman of the committee for yielding time.

I rise in support of the bill. The bill deserves our support for two important reasons. First of all, it establishes a strong regulator in an area that has cried out for greater regulation, and I think we understand that looking back on what has happened at Fannie Mae and Freddie Mac over the last several years.

Second of all, the bill establishes a trust fund that is very similar to the housing trust fund for which over 200 of the Republicans voted last year. So I really am surprised to find that this year all of the sudden there is all of this opposition to the trust fund.

So I want to spend a minute talking about the trust fund. First of all, it is a housing trust fund, and Fannie Mae and Freddie Mac are designed to incentivize more housing for middle income and low income people. So it's absolutely consistent with the purposes for which they were founded.

Second, the ranking member of our committee made it sound like this is going to increase the cost of housing for middle income people and low income people. In fact, what we need to focus on is that this money will either go to the stockholders of Fannie and Freddie or it will go to the purpose for which Fannie and Freddie was originally formed.

So this is not a choice between raising taxes or not. This is fulfilling the purpose of these two entities.