Floor Statements

Madam Speaker, I yield 3 minutes to the gentlelady from Illinois.

Madam Speaker, I yield 2 minutes to the gentleman from California (Mr. Issa).

(Mr. ISSA asked and was given permission to revise and extend his remarks.)

Madam Speaker, I came to the floor this week, and, America, I said, you should be concerned about what Washington is about to do. Last night I came to the floor and I said you should be alarmed about what Washington is doing because of the lack of deliberation. Today I come and say, America, you should be outraged about what Washington is about to do because Washington is not listening to you.

Whether you are Republican or Democrat, our offices have been hearing phone calls, 10-1, 100-1 against this proposal. But Washington is not listening. They are going ahead with the proposal as well.

There is a problem. We recognize the problem. We must work on it now. But we should not go for the solutions to that problem to the same people who have brought that problem to us. We should not go to the administration, who has brought this problem to us through their actions in the past; the Federal Reserve with their roller coaster interest rates from 2001 to 2004, 6 percent to 1 percent down; and then 2004 to 2007, 1 to 5 percent up; bubbles and bursts from the Fed and their false promises with Bear Stearns and AIG and GSEs.

Nor should we turn to the Democrat leadership that has signed on to this bill; that Democrat leadership who has given us CRAs in the past that has led to the meltdown in the subprime market. Nor should we turn to the Democrat leadership who has blocked reform in the past to these GSEs and unbelievably say they will block any reform in the future to the GSEs.

No. The stakes are too high to turn back to those who have brought us the problem in the first place. We should look for new solutions. And there are solutions.

But I will close on this, Madam Speaker. The noted University of Chicago economist, Robert Schimer, tells us that the U.S. has long been a beacon of free markets in the world. When economic conditions turn sour in Argentina or Indonesia, we give very clear instructions on what to do: Balance the budget. Cut government employment. Maintain free trade and the rule of law. And don't prop up failing enterprises. Those approaches by the U.S. are correct.

But when the U.S. ignores its own advice in this situation, it reduces our credibility in the future. Rewriting the rules of the game at this stage will therefore have serious ramifications not only for the people in this country but for the future of the globe. The social cost is far, far greater than any $700 billion.

Madam Speaker, I rise today in recognition of the Statewide Hispanic Chamber of Commerce of New Jersey (SHCC). To honor this organization, the State of New Jersey has designated October 13 through October 19 Hispanic Business Week.

The health of the Hispanic business community is vital to maintaining the strength of the New Jersey economy. This year, the Statewide Hispanic Chamber of New Jersey is celebrating 19 years of service and commitment on behalf of the growing small business community. They have positioned themselves as number one out of the top 50 Chambers of Commerce of the State of New Jersey.

I also want to recognize Daniel H. Jara, founding president and CEO of the Statewide Hispanic Chamber of Commerce of New Jersey. Daniel has been listed in the elite group of the State's 2006 Movers and Shakers Most Influential Business Leaders by NJBiz.

The Hispanic market represents the fastest growing sector in the United States. In the Garden State, this segment of the population has experienced an 87-percent growth in less than 10 years. This year, it is estimated that there are over 70,000 Hispanic-owned businesses, which support approximately 190,000 jobs and generate $10.5 billion in sales. According to the last economic census, New Jersey has the fifth largest concentration of Hispanic-owned businesses in the Nation.

The Statewide Hispanic Chamber of Commerce of New Jersey will hold it 18th Annual Convention and Expo on October 17, 2008. I wish the Chamber success as they continue striving to grow New Jersey's economy.

Mr. Speaker, I come to the floor, realizing that we are in a severe financial situation in this country on Wall Street that will have a negative effect on Main Street as well. It must be addressed, and it must be addressed quickly.

You know, I came to this floor last night, and I spoke to the American public. I said last night that you should be concerned this morning, that you should be very much alarmed by what is going on here. Obviously, Washington is not hearing from you and is not abiding by your wishes. Yes, there is a problem, and yes, also there are solutions, and yes, there is a way to deal with this problem but not by putting the American taxpayer on the hook.

In order to get those solutions, we should not go to those very same people who brought us this problem in the first place--those people who tried to block reform in the past.

I hear in the news today that there was a deal, that Speaker Pelosi has basically adopted the Paulson plan. Well, I don't know what all of the ramifications of the deal are and who is involved, but I can say this:

Those who support and those who used to work for Goldman Sachs will support this deal. Those who have gotten contributions from Countrywide will support this deal. Those who have gotten substantial contributions will support this deal. Most importantly, those who have blocked reform in the past will support this deal.

I will not support this deal as it has been laid out so far. If you want to know how to find out more about how we got here, just simply go to YouTube, and put in ``burning down the house,'' and you will get a better understanding of exactly how we got here and why we should not be going back to the very same parties who brought us here with this solution.

Mr. Speaker, we come to the floor tonight to speak about an issue that has eclipsed all other issues, that has been in the media and on the public's minds of recent date, and that, of course, is the financial situation that the United States currently finds itself in.

As we go through this evening, we will talk about deals or no deals, the underlying fundamental problems that the situation has brought us to this point, who and how we got here, what was the makeup of the market and the Fed and the Treasury that may have helped to facilitate the problems that we face today.

And, finally, what are some of the solutions that are potentially out there that can move us from where we are today to a more stronger and safe economy?

I'll just start for a moment, before I yield to some of my colleagues who have joined me, to suggest to the American public that tonight they should be concerned, not just about what is occurring on Wall Street, but what is occurring right here in Washington, D.C. as well.

With regard to the situation on Wall Street, although as difficult as it may be, I have, deep down inside of me, the utmost faith in the American people and the American worker and the America businessman that, when faced with this challenge, that they will be able to overcome it and to strive and make a stronger economy tomorrow that will be beneficial for our farmers, for our families, for our manufacturers, for our economy throughout the United States.

And yes, there may be some need, as we will discuss, for the intervention by Washington, but the reason why I say that the American citizen should be concerned tonight--not so much about Wall Street, but about Washington--is what may come out in the form of legislation tonight--or in the next day or the day after that. Because, you see, we are being asked to sort of rush through this process, where as normally we would come to this body and maybe spend hours upon hours debating whether we should spend a million dollars on this bridge over in this State or a million dollars in this program in that State.

And we will go through committee hearings and markups and subcommittees and the like and then finally get to the floor of the House and pass it here. And then it will go over to the Senate, and it will go through the same arduous process of subcommittees and full committees and markups, and then to the Senate floor, where they will have debate on it infinitum. And maybe even then we'll go to conference committee and come back here to the House where we will have to discuss the issue all over again. And that may be only for a matter of only a million dollars or two.

But what we are talking about here is potentially spending $700 billion, and we're being asked to basically decide that issue in a matter of hours. Mind you, we may, hopefully--as the optimist as I always am--get just the right answer. But the reason I say the American citizen should be warned is that history does not indicate that. And many times, in the rush to judgment, when we are pushed to make a decision at the end of the day, at the end of the week, at the end of a session when a crisis is looming over our heads, we are sometimes pushed in the wrong direction.

And I would also ask the American citizen to consider this; you know, the overwhelming calls to our offices I think across the board, across both Democrats and Republicans as well, would say that they have been opposed to spending $700 billion of the American taxpayers' dollars to bail out, if you will, Wall Street. I would just advise the American public, as a plan finally does come through the process and is passed through this House and the Senate, I would advise them to look over it very, very carefully when they are told that this is not the same Paulson proposal, that the American taxpayer is not going to be on the hook. I don't know what that proposal will be--as negotiations are going on literally as we speak--but look at it very carefully to see that the proverbial wool is not being pulled over all of our eyes, and that we ultimately, and our future generations, our children and our grandchildren, will be held responsible for paying the debt. I hope that's not the case.

I remain optimistic that we can work out a solution. And the House Republicans have actually proposed such a solution that would not put the American taxpayer on the hook. And we are willing to work with our Democrat colleagues across the aisle to make any changes or additions or alterations to that so that it can be palatable to all parties in both Houses to get through the process, but let's see how the final end result is.

And with that, I yield as much time as he may consume to the gentleman from Texas (Mr. Gohmert).

I thank the gentleman. And hopefully, Members on both sides of the aisle will be keeping their heads as we go through the debate and the seeking of a deal on this, and a deal that, at the end of the day, is a benefit to the taxpayers of this country.

While we try to seek out that debate and try to seek out the solution, one axiom that we should probably go by is ``Do not go back to the same people who brought you this problem in the first place.'' And I will speak on that in a little more detail to take a look at who it was actually that brought us to this problem. I know some people are pointing their fingers exclusively at Wall Street on this, and clearly they have some blame to lay there because, for various reasons, executives and otherwise made truly imprudent decision making, maybe it's in part because they really did not have the information on hand, maybe it's because of lawsuits in the pasts when analysts were pushed out of the Wall Street, out of the cell side of the equation, or maybe it's because with all the Ph.D.s and what have you brought in and brought in all the new modeling on Wall Street and what have you, that made it almost impossible for the CEOs

of these investment firms and otherwise to really know what it was exactly that they were buying down below.

Whatever the excuse, whatever the reason, there is some blame to be laid at Wall Street, to be clear, but we also have to look to see where some of that blame lays here in Washington, D.C. And that's why I said, do not return to those who brought us here.

And if you want to look to a place where you can get a little bit of information about how we got here, as we're all done here listening to this program right now, our speakers here on the floor, I went to a place earlier today--or somebody sent this to me as an e-mail, and it was an e-mail for a YouTube site, and it's called ``Burning Down the House.'' And it's a 9\1/2\ minute YouTube presentation done with music and what have you that gives you a nutshell explanation of exactly how did we get to where we are in the first place.

So I recommend people to go to YouTube's ``Burning Down the House'' and they will be educated on it.

But right now we're going to be additionally educated by the young lady from Minnesota.

I yield such time as she may consume to Mrs. Bachmann.

I thank the gentlelady for your comments. And your opening comments were quite instructive.

You say we have a problem today. That we all agree on. But we should not be moving forward expeditiously without all the evidence before us so we can make the right decision. It was just the other day that during the course of this week I was in contact with a notable economist who made that point to me as well, that we should have all the data before us so that we can make a correct determination as to what is the right reform in Washington to address the problem on Wall Street. And he referred me to some data. And the data is not mine. It is not his. It is published data from the Federal Reserve. I will just spend 30 seconds on it to put it in perspective. We do know we have a problem. If you talk to most people on Wall Street, they will tell you there is a problem in the credit markets.

You have to put things in perspective with respect to where we stood before. If you look at commercial and industrial loans, seasonally adjusted, it goes from July of last year to September of this year, and you will see that leading into this week, actually commercial and industrial loans were at historic highs. And yes, on the other end of the chart it just begins to tip down, the chart shows it goes down just a little bit. And the latest data we have is from I think just 1 week ago. The next data for this week will be coming out.

It's probably telling that we can't get this information, quite honestly. I believe maybe only the Federal Reserve may have this information. But for Congress really to act intelligently, it needs information like this. This is why I threw the chart up, because the gentlelady from Minnesota said we should have information.

Here is another chart. And I will end on this because charts are hard to follow here. This is commercial paper here of nonfinancial companies, again seasonally adjusted, again from the same time frame, July of last year to September of this year. And you will see where we are, on average at the 190 level, we were peaking just going into this. Now it went down. But you see those spikes going down all the time.

On the very end of the chart, pointing over here, there is a little bit of an uptick. I can't tell you what the actual data is conclusively, whether that little uptick then goes up. I doubt it. It probably begins to spike downwards again. It is that sort of information that we would like to have specifically before us so we are not relying on anecdotal evidence. And I don't discount that, or the phone calls we receive from the street or the articles that we receive as well. We do know there is a problem out there.

I'm just pointing out, as the gentlelady from Minnesota has said, it would be a lot more beneficial before we start spending $700 billion, or for that matter even $100 billion. Because we may see a so-called ``compromise'' piece of legislation come out that says, American taxpayer, don't worry. We're not going to spend $700 billion to bail out Wall Street. We are only going to spend $100 billion. And now you should thank Washington for only spending $100 billion. So come on board with that. Some of us still have a problem with spending $100 billion on a problem that is part Wall Street's but also part Washington's.

If it were ever to again regain credibility with the American people, Congress really has to address a fundamental problem and a fundamental question, and that is to answer to the American public how come it was that for so many years, when the evidence, true evidence, data evidence, coming into Congress was showing us that this housing growth model could not sustain itself, why Congress did not pass legislation to rein it in, to reform the system, and to put into checks and balances in the past?

Well again we can go into the details why Congress didn't do that. But to get the credibility back before we move forward on new legislation involving tens or hundreds of billions of dollars, we need to answer that question.

With that, I would like to yield the floor to the gentleman from Michigan.

I thank the gentleman. We hopefully will learn from our history that there are no necessary evils in government. And it may well be if the unfortunate compromise comes about, that that is the arguments that will be made by those who propose that, that you just have to suffer a little bit in government expenditures on that; that is a necessary evil.

That is when the actual question will come about probably, is when is $700 billion not $700 billion. And the answer that may well be given, well, it is not $700 billion when we pay it out over time; $100 billion this month, $150 billion a couple months from now, $150 billion in January, $200 billion after that; and as the numbers go up, eventually to $700 billion, and maybe even more. Because that is where we stand right now with the administration and the Democrat majority essentially having originally said that there was a deal, and that means the Democrats having signed on to or basically accepted the outline of the original Paulson plan, the Bush administration plan, saying we should spend $700 billion. Anything less than that from their perspective, which we don't just do it at one time but do it over time, to the American taxpayer should be seen as the exact same thing.

That is why I said in my opening comments, don't let anyone pull the proverbial wool over your eyes by saying we have ratcheted this down somehow by making a compromise that they are going to spend it in a different manner, because to you and I it is the same thing. Also to our children and our children's children, it will be the same thing, inasmuch as the devastating impact it will have on future economies with regard to inflation, inflation, one of the most onerous taxes of all, as it steals from us without us even seeing it, as the value of our dollar goes down and down and down as the American government prints more and more money to do a bailout.

With that, once again I am pleased to be joined now by another leader on this issue, the gentlewoman from North Carolina (Ms. Foxx).

I thank the gentlelady from North Carolina for joining us and also for your leadership on this crucial issue, perhaps as others have said, one of the most crucial issues we in Congress will ever vote on.

As the lady as said, as the speakers before have as well, we recognize the severity of the problem on the U.S. economy, and the global economy as well. We recognize that some action by Congress is necessary, but we suggest that the proposal that has been proposed by Secretary Paulson and ostensibly supported by the Democrat majority is the wrong proposal. Therefore, we have stepped up to the plate and suggested a House Republican proposal.

It is not simply us, we here in the House Republicans that suggest that the Paulson-Pelosi proposal is not the way to go. In my hand here is a list of, I think, several hundred economists, 192 economists from around the country, who reviewed it and expressed their view and, very briefly, they say

we want to express to Congress our great concern for the plan proposed by Treasury Secretary Paulson to deal with the financial crisis.

``We see three fatal pitfalls in the current proposed plan. One, its fairness, the plan is a subsidy to investors at taxpayer expense. Two, its ambiguity, neither the mission of the new agency, nor its oversight are clear; and, three, perhaps most important, it's long-term effects, if the plan is enacted, its effects will be with us for a generation.''

I know the President heard those remarks, it was reported on ABC. When he saw this, he said, ``I don't care what someone on some college campus says,'' ABC reports. Instead he says he trusts his Treasury secretary.

Well, quite candidly, as a representative of Congress, I trust what my constituents are saying about this situation. They realize it's an important matter. They realize it's a tightening of the credit markets. They realize that something must be done, but they also realize, as the economists do, that we should not be putting this on the backs of the taxpayers, but, rather takes gentlelady from North Carolina suggests, come up with an alternative proposal where the Wall Street players would actually be underwriting the cost of the proposal.

As the gentlelady has put into the record and outlined it, in essence what we are doing there is setting up a guaranteed fund, if you will, or backing for those mortgage-backed securities.

I will just digress on how that would work for 30 seconds, think of it this way. If you are confident in the way that Washington handles your tax dollars today, if you are confident that the way the American government, Washington, handled your tax dollars when it came to Katrina, if you are confident with the way that Congress handles your tax dollars when, year after year, we can't balance our budget like the American family has to balance their budget. If you are confident in the way that the American government in Washington handles your tax dollars when we run deficits of $100 billion, $150 billion, then $200 billion and $300 billion, now over $400 billion. With this, of course, on top of it, would be over a trillion dollars.

If you were confident with the management of the assets of the American government over the past years, then you should be absolutely confident that we would be able to set up an agency, either external to the Treasury or within the Treasury, to be able to handle $700 billion of mortgage-backed security, and that would mean, on the back side of those, all the assets of those foreclosed properties that would possibly come from that as well.

Somebody on a TV show earlier said well we did it with the RTC, and Secretary of the Treasury Paulson said, well, this is not like the RTC. But in a the way it is. We were handling those assets. At some point along the line I had to remind the commentator on the program with the RTC, it ended up costing the taxpayer around 127 to 147 billion dollars, which in today's dollars is around $220 billion. Here we are talking about $700 billion.

If you are confident the American government can do this better than anyone else, then support either the initial Paulson-Pelosi proposal or any hybrid or compromise from that that still involves that.

But if you are not so confident, if you have a question of the ability of Washington adequately handling those dollars, and if you have a question on how this may impact upon the economy and the monetization of that debt and the rise in inflation that may have followed it this year. But next year, if the production in this country does not increase, then you should be looking for an alternative, and that alternative is just what the lady from North Carolina has raised.

As I started my comment, I said, let us therefore not look to those who have brought us to this point in the first place, whether it be the Federal Reserve, with the loose lending policies that they have had for years, or the Congress who refused to step in, as I said, when evidence indicated that had there was a problem in the housing market, that a bubble was coming, that there was a problem with the GSEs, that's Fannie Mae and Freddie Mac but Congress refused to act.

Let's not go back to those individuals who brought us to that particular point for a solution, let's maybe think out of the box and look for a solution.

Another economist recently was published on this matter, to address more of the global issue, the larger issue. I will read from this, he is Chicago economist Robert Schimer from the University of Chicago. He States, as follows, ``Let me mention one other issue that I take very seriously. I recognize that this might not matter much to my Congressman, but in my view it may be the most important issue for global welfare. The U.S. has long been a beacon of free markets. When economic conditions turn sour in Argentina or Indonesia, we give very clear instructions on what to do: balance the budget, cut government employment, maintain free trade and the rule of law, and do not prop up failing enterprises. Opponents of free markets argue that this advice benefits international financiers, not the domestic market. I have always believed (at least since I began to understand economics) that the U.S. approach was correct. But when the U.S. ignores its own advice in this situation, it reduces the credibility of this stance. Rewriting the rules of the game at this stage will therefore have serious ramifications not only for people in this country but for future of global capitalism. The social cost of that is far, far greater than $700 billion.

So I end where I began, the social cost of our adopting a program, on this country, and our children and our future generation will be far, far greater than anything we can imagine if we do not do it right.

Mr. Speaker, I come to the floor to follow the gentlewoman from North Carolina (Ms. Foxx) and address the issue of the bailout. She started her talk with deal or no deal. There was talk in the media that there was a deal. We heard from Senator Dodd and the chairman of our committee and other leaders on the other side of the aisle yesterday that there was a deal. Unfortunately, the fact of the matter was that there may have been a deal between themselves and the White House, there was no deal obviously to bring the bill to the floor, or at 8 or 9 at night, we would have seen the Speaker of the House bring the bill to the floor. That is evidence of the fact that there never was a deal.

We do know the fact is we have a serious problem in this country, a problem that must be addressed now, a problem which requires both sides coming together to try to find the solution to the problem.

As the previous speaker said, there are alternative solutions on the table, solutions that economists and business schools across the country have come behind and said can be the credible solution and one which would not put the taxpayers of the country on the hook.

I would suggest that one way of coming to a solution is to decide that we are not going to go back to those same people who helped bring us to this problem in the first place.

One of the underlying problems that brought us to this situation is the fact that there was easy money in the economy for too long a period of time. From 2001 to 2004, interest rates slid from 6 percent all of the way down to 1 percent of the Fed's fund rate. There was an expression used of the Greenspan put, if you will, as far as trying to boost the economy and Wall Street all during that time.

Then that was followed from a switch turnaround from 2004 to 2007 where the interest rates shot up from 1 percent up to 5\1/2\ percent. Let me suggest to you that those higher interest rates have been reflected in the housing market today, and will be potentially affected due to a lag time to other sections of the economy later. And that is another reason why we should not engage and support a measure as has been proposed by the White House and the other side of the aisle of spending $700 billion or anywhere near that amount of money that would put the taxpayers on hook because we can anticipate future problems due to that tightening up of the credit market by the Fed.

Now, another area where we should not go back to the same people who helped bring us to this problem are those very same people who helped exacerbate the problem by their misregulation of the GSEs. The GSEs, what are they? They are your Fannie Mae and Freddie Mac.

Those entities that supply the credit for about half of the mortgages in this country were allowed to grow out of control and to grow too large to fail and to grow to such an extent that there was systemic risk in this country

and in the marketplaces that brought us to where we are today with the crisis we are facing.

Now, this is something that was not unpredicted and not unforeseen. Our own administration came to this Congress in 2002, 2003, 2004, and 2005, in their budget requests and elsewhere, making pleas to this Congress to try to put in some regulation. ``World-class regulators'' is what they called them. Secretary Snow came to the Financial Services Committee and made that request and said we should have regulation. However, we were thwarted on every front. The current chairman of the Financial Services Committee was one who stood and said we should not do so.

I went back and looked into what the record of this was in 2005 to see what my position was on it and to read what I said on it. At that time in 2005, the gentleman from California (Mr. Royce) suggested that we could begin the process of reining in the GSEs so as to avoid systemic risk in this country with regard to them and avoid a future crisis. He put in an amendment to the bill to provide and to prevent systemic risk.

I came down to the floor to support the gentleman from California (Mr. Royce) in his amendment. At that time, I said that I rise in support of this legislation which strengthens the language with regard to portfolios and GSEs. I indicated that GSEs claimed that they are shock absorbers. This line is somewhat ironic today. The GSEs claimed back in 2005 that they were shock absorbers to the system and that one of the main reasons that Fannie and Freddie claimed they should not have portfolio limits was that they provided a stable means of support for the residential financial market in times of crisis. How ironic that they were claiming that they could be of help in a time of crisis when, in fact, they are what have now brought us to this time of crisis.

Back in 2005, Fannie's CEO, Dan Mudd, testified: ``Our mortgage portfolios allow us to play a shock-absorbing function for the finance system during times of potential difficulty.'' Well, there is no function that they're serving now except that they are causing the difficulty.

This week, they said Freddie's president, Eugene McQuade, was quoted as saying: ``The enterprises provide a source of stability to the market, mortgage, finance system.''

With that, Mr. Speaker, I would just like to conclude by saying that the problems that the GSEs have brought us to today--although we were warned by the administration and although many saw it and many people from this side of the aisle--were because of the failure to implement those regulations on a timely basis. We'll discuss this further at a later date.

Madam Speaker, pursuant to the Republican Conference guidelines, I am submitting the following information for publication in the Congressional Record regarding projects in my district that received funding per my request as part of the amendment to the Senate amendment to H.R. 2638.

1. Project Name--Landing Craft Composite Lift Fan.

Requesting Member--Scott Garrett.

Bill Number--Amendment to H.R. 2638 (FY09 Defense Appropriations Bill)

Account--Department of Defense Appropriations, RDT&E, Navy, Line 35, Shipboard System Component Development, PE#0603513N.

Requesting Entity--Curtiss Wright Flow Control/Engineered Pump Division.

Entity Address--222 Cameron Drive, Suite 200, Phillipsburg, NJ 08865.

Description of the Project--Project supports design, development and manufacture of prototype composite material lift fans for application on current and next generation Navy landing craft vessels. This initiative addresses a persistent problem the Navy has been having with current generation metal lift fans, which are now replaced on average about every 2-4 months due to corrosion, wear and tear. Utilization of this composite material technology in current and future generation landing craft lift fans would result in maintenance savings and will increase the ship availability, critical in an ever-decreasing fleet budget.

Description of the Spending Plan--($1,000,000).

As the gentleman just explained, the dilemma that we are in and where the proper recourse or result should go to at this point and what the solution that has been presented us is not the correct solution, and that alternatives such as allowing the free market to develop, lowering taxes on capital gains and the like, allowing the private sector to develop an alternative, which has already occurred through the RSC and other forms here in the Republican Conference, is perhaps the better avenue to pursue.

Let me, though, take the next 3 or 4 minutes to answer the question that many in the American public are asking tonight, how in the world did we ever get here?

Well, many financial analysts will tell you that the underpinnings of the problems that we are facing today in the credit markets on Wall Street that are affecting the homeowners on Main Street go back a number of years and apply to the situation with the GSEs, that is Fannie Mae and Freddie Mac. And the suggestion is that had they been appropriately regulated over the years, we would not be in this severe financial crisis that we are in today.

So who was raising those red flags years ago to say what should have been done? Well if we go back, let's see, 1, 2, 3, 4, 5, 6 years to 2001, in fact it was the Bush administration that began raising some red flags. In 2002 in their budget request they declared that the size of Fannie and Freddie is ``a potential problem'' and could cause financial trouble and either one of them could cause strong repercussions in the financial markets. That was back in 2002.

2003 is when I joined Congress and served on the Financial Services Committee. I immediately began to call for a step-up in regulations of Fannie and Freddie. The White House was at the same time doing the same thing. They said in 2003, the White House was warning about Fannie Mae and Freddie Mac that they needed an upgrade in what we call world-class regulation to address something called systemic risk, a risk that could spread beyond just the housing sector. In the fall of 2003 the administration was pushing Congress hard to create a new Federal agency to regulate and to supervise both Fannie and Freddie, these government- sponsored entities. They and I and other Members from our side of the aisle said that we need a strong world-class regulator to oversee their operations of their safety and soundness.

As a matter of fact, I recall a hearing when the then-Secretary of the Treasury, Secretary Snow, came in. And he made that point as well. But I also remember him getting a lot of pushback from both sides of the aisle, but also from the gentleman who is now the chairman of the Financial Services Committee. It was back on September 25, 2003, when he was in the minority at that time, but he is now the chairman of the Financial Services Committee today, Barney Frank said ``there are people in the country who are prepared to lend money to Fannie Mae and Freddie Mac at less interest rates than they might get elsewhere. I thank those people for doing that. I must tell them that I hope that they are not doing that on the assumption that if things go bad, I or my colleagues will bail them out. We will not.''

Well the legislation that has come through in July did exactly that, bailed them out to the tune of over $200 billion. The legislation that the gentleman who just came before me just spoke about will be bailing out the financial industry to the tune of $700 billion.

Mr. Frank goes on to say, ``I think it is clear that Fannie Mae and Freddie Mac are sufficiently secure so they are in no great danger.''

Well of course we see what has happened to them. We just had a hearing on them today. And they are now in conservatorship. They were in great danger. They were in danger of systemic risk, which has eventually brought them down.

He also said on that day, ``I don't think we face a crisis. I don't think we have an impending disaster.'' We all just heard the President of the United States on TV last night. He described the crisis that the United States is in right now. Whether you call that an impending disaster, whether we take action or not, I don't know whether Mr. Frank would say or those who pushed back to Mr. Snow, who pushed back to the administration, who pushed back to those of us on this side of the aisle that said we need to move forward and try to address the issue of systemic risk.

Unfortunately those efforts did not come about. We never got the world-class regulator in over the GSEs until it was too late. And now we are left with the situation at hand.

The gentleman who came before spoke of the dilemma that we are faced with, a Hobbesian choice of sorts is the way it was presented last night: Either you do this or everything will fall apart. Well we suggest that there is an alternative to the proposal that the administration has proposed. We humbly suggest that alternative should be considered in a thoughtful and thought-out process, not one that is a rush to judgment, not one that would put the American taxpayer on the hook, one that would ask the private sector to take their lead and take their step in the process as well.

We would ask for the time in order to engage in the process.

Madam Speaker, when the United Nations General Assembly met earlier today, the Secretariat considered a request by several of Taiwan's diplomatic allies. These countries asked the United Nations to allow the Republic of China (Taiwan) and its 23 million citizens to have meaningful participation in the activities of the specialized agencies of the United Nations.

By excluding 23 million people from participation in UN-sponsored activities, the UN is effectively treating the people of Taiwan as less than equals when compared to citizens of other countries. The people of Taiwan enjoy the benefits of living in a country that has free elections, yet it is certainly unfair for them to be denied access to agencies such as the International Civil Aviation Organization.

In this global economy, no country and no people are an island. Information travels fast, epidemics spread equally fast. For instance, without membership in the World Health Organization, Taiwan is an overlooked area in the global epidemic surveillance network. Continued exclusion will only harm the international community.

Furthermore, Taiwan has the world's tenth largest shipping capacity, but it has no access to the meetings of the International Maritime Organization and can't acquire first-hand information. There are many other instances of the impracticalities of banning Taiwan's membership in the international society.

I am disappointed that the People's Republic of China again blocked Taiwan's request. Taiwan President Ma Ying-jeou has taken a number of steps to improve the relationship with Beijing, including permission of direct weekend charter flights between the mainland and the island. It is time for the People's Republic to reciprocate by granting Taiwan the ability to join certain UN agencies.

I thank the gentlelady for her shepherding this through. She should get a gold star for all of her work on the floor today. I also thank the Chair and the ranking members for helping facilitate this bill going through committee and now coming to the floor today.

As was already indicated, today, September 17, marks a very important anniversary, the signing of our Constitution 221 years ago. Our Founding Fathers in this country came together in an attempt to form something, form a more perfect union, to establish justice and secure the blessings of liberty to ourselves and to our posterity.

I'm honored to be the sponsor of this resolution, which recognizes those 39 extremely brave men who gave all they had in signing our Nation's founding document. Too often, we forget not only the names of these men but the challenges that they faced and what they put at risk when they came together to do this.

For example, our Founding Fathers originally met in Philadelphia to rework the Articles of Confederation. That was the document, you see, which had governed the country after the time of the War of Independence, and really, no one was expecting them to draft an entirely new system of government. And yet, that's what they did, and none of them were certain at that time that this new document would be ratified at all, and I doubt they even recognized the ingenuity of their final product.

Yet today, here we are over 200 years later. I think we really take our system for granted and I hope this resolution in some small way will help remind us that the Constitution is a profound document. Our prosperity today and over the 200-some-odd years is built upon the stability of the Constitution. And our posterity to the future has to thank the liberties and freedoms that are set forth and guaranteed in this document.

We see other nations around the world have followed in our footsteps by promoting the principles found in our U.S. Constitution, and although it's already been pointed out the U.S. Constitution is a relatively short document, the Founders really get too little credit for their clear and clever direction in it. They intended to set up a Republic of essentially sovereign, self-governing States, with a very small and central but limited government, operating under clearly defined, and as they say, limited powers.

It was James Madison who wrote in the Federalist Papers at No. 45 that: ``The powers delegated by the proposed Constitution to the Federal Government are few and defined. Those which are to remain in the State governments are numerous and indefinite.''

Every time any Member of Congress comes to the floor and they take out their card, about to vote on a particular piece of legislation, they should do what we're doing right now, and that is to reflect upon the U.S. Constitution. And they should be asking themselves is what they're about to vote on constitutional.

The gentleman from New Jersey--I'm pleased to see him on the floor with me tonight--raised some of those very same questions. And in light of his comments, I guess we should all have raised those questions last night, as well, as we dealt with the energy package in legislation that came through this House, because, as I indicated a moment before and as, actually, the gentleman from New Jersey already indicated, we were breaking away from Britain at that time to provide the liberties and the freedoms here for the respective States in this country through the War of Independence and then established here in the Constitution. So, too, did our Founding Fathers intend those rights would, as they indicated with Federalist No. 45, remain with those States.

What we did last night was abrogated those rights, took away those rights from them, from the respective States, to a very basic source of income and power to those States, to direct what should become of their futures with regard to an important issue such as energy. Legislation that we did last night put on severe restrictions as to the 50 States, at least our coastal States, as to what they can do and what remuneration they might see if they did take particular action with the developing resources, in this case, energy resources, within their States.

And so although a lot of the discussion yesterday was on the political ramifications and some of the discussion was on the environmental ramifications, I'm not sure that there was any discussion on the constitutional implications of what was done yesterday and whether we, as Members of Congress, as we took our card and put it in there voting ``yes'' or ``no,'' were considering whether we had the constitutional authority actually to take those rights away from the people that we represent back at home in our respective States, whether we had the constitutional authority to say to those States, no, we're prescribing, no, we're placing limits on your ability to have freedom and prosperity for this generation and future generations, as well, by the limits Congress is placing on them.

As the founder and chairman of the Constitution Caucus, I urge my fellow Members here in Congress today going forward then to renew our dedication to faithfully fulfilling our responsibility to the U.S. Constitution. Likewise, I encourage all Americans to take the time today and throughout the rest of the year to reflect upon this important doctrine, to reflect upon the U.S. Constitution, to ensure that freedoms set forth in it, the rights that are set forth in it, are preserved today and for our posterity.

I thank the gentleman.

I rise to oppose this legislation which is really unfair and unjust to the people of the State of New Jersey. I say so because it perpetuates an unfair system to our State, our State made up of commuters, because it does not change a system where in fact we do not get back a dollar on a dollar. Our commuters only get back pennies, 87 cents on a dollar in the current system, and this perpetuates that system.

See, New Jersey is a commuter State. Whether you work or play, you

have to rely on your car or truck to get around, and you're being attacked both from our State capital and in Washington, D.C.

You're being attacked by our State capital by perpetual toll increases from High Point to Cape May, from Alpha to LBI, there are always threats of higher taxes there. And in D.C., we're under attack as well for the failure of this Congress and this Democrat leadership of passing an energy package.

With gasoline at $3.50 a gallon and diesel at $4 a gallon, where it costs over $1,000 to fill up your truck to get to work or to get to school or elsewhere, New Jersey commuters are consistently being attacked by a system out of control in our State capital and our national capital as well, and that is why I stand here opposed to this legislation until we change the existing system of funding for tax administration.

Mr. Chairman, I have an amendment at the desk.

Mr. Chairman, I often come to the floor, and I often preface my remarks when I have an amendment, saying that I come to the floor tonight with a commonsense amendment. Quite candidly, I think that is more than apropos when I speak about what I'm here to speak about tonight.

My amendment simply does this: It seeks to increase the funds for State veterans homes, and it does so in the amount of $18 million. From where does it get the money? Well, it does so by reducing the administrative expenses by a mere less than 1 percent, and that's a critical number, less than 1 percent. We believe that within that over billion dollar line that there is more than enough aptitude for going in and for finding less than 1 percent of additional funds that we could take out and put to a worthy cause such as toward our State veterans homes.

Today, there are 126 State extended care facilities. They're extended across all 50 States and in Puerto Rico as well. These veterans homes care for nearly 30,000 of our Nation's heroes. The number of veterans requiring care will continue to increase as servicemembers return from Iraq and Afghanistan.

Currently, there is a backlog, a huge, extensive backlog of projects waiting for funds. Now, many of these projects on this waiting list are critical for providing veterans with a healthy and secure environment. In fact, of the almost 200 projects waiting for Federal funds, nearly half of them are classified as priority 1.

I believe it is our duty to see that these facilities are able to provide the highest quality of care for the lives of those who have made the sacrifices for our Nation. After all, you can't really just call these things ``institutions'' anymore. These really are the homes where our veterans will spend out the days of their lives.

The staffs of these homes work hard to honor our veterans and to ensure that their last years are spent in comfort. I've had the pleasure now of working with folks back at the Paramus Veterans Home in my district in Bergen County, New Jersey. I've frequently visited with them and with their relatives who would come and visit, and local veterans organizations around the area would also come in, and they would work with them. These service organizations have worked hard to raise matching funds for these types of essential projects at these facilities. Likewise, they do across the Nation and, I'm sure, in each of your districts as well.

I would also like to make one other point. That is, in the Senate bill, in the Senate MilCon-VA Appropriations bill, they designate $1.779 billion for general operating expenses while the House version designates $1.801 billion. So we appropriate a little bit more than the Senate does. So that 1 percent cut from the appropriations line for the general operating expenses would still leave more money in the final version of the bill than the Senate version currently has. We know we have different numbers here so that, when it gets to conference, those numbers have to come into an equilibrium of some sense. We're up here. The Senate is over here. This will bring us closer to that equilibrium.

In addition, our colleagues over on the Senate Appropriations Committee have approved $250 million for the State veterans homes while the House budget only puts in $165 million. So my amendment would simply reduce this discrepancy by increasing the funding for State veterans homes by $18 million. In other words, we're in the House at $165 million. The Senate is at $250 million. We're just trying to bring the House number up a little bit closer to where the Senate is, which probably will happen once it gets into conference committee, because those numbers have to work together.

So I'm just suggesting that a tiny, less than 1 percent cut in the administrative operations would allow us to provide our country's heroes with a better quality of life, and I think that's what we owe all of them. I hope that we can find a way to work together across the aisle to honor our vets and to make sure that they receive excellent care in all of their facilities.

I yield back the balance of my time.

Would the gentleman yield at this point?

I thank the gentleman for yielding.

It appears that we're on the same page on this, but let me just make this one suggestion:

While the 250 positions are out there and while there's a waiting list out there for that group, there's also, as I've suggested, around 200-some-odd projects or more, actually, over half of which are on a critical category 1 list. So we have two important lists that have long waiting lists that have to be addressed.

My suggestion is that, if this were to pass and if we were to reduce the funds by $18 million, there's nothing in the amendment that says to the administration take the $18 million out of this over $1.4 billion line and take it from the 250. You and I would have to agree that they must be able to find some other area to take it from than these 250.

Mr. Chairman, I demand a recorded vote.

Offered By: Mr. Garrett of New Jersey

Amendment No. 11: Page 36, line 5, after the dollar amount,

insert ``(reduced by $18,018,000)''.

Page 41, line 22, after the dollar amount, insert

``(increased by $18,018,000)''.

I thank the gentleman.

I rise to the floor to oppose this rule and to also oppose the underlying bill, a bill that would, as the hurricanes that are going across this country, devastate this country financially and put the American taxpayer on the hook, not for $10 billion, not for $20 million, we're upwards to $5 trillion.

I commend the hearing that we had last night on this bill, which was over 1 hour. That's an hour more than we've had any discussion whatsoever on this potential of putting the American taxpayer on the hook for $5 trillion. Chairman Frank did not hold one single hearing to discuss how this would impact the American public nor the American financial system; hearing after hearing that we held on all sorts of other things, but never could we get to this topic.

In fact, the chairman last night called ``nonsensical'' the idea that the American public could be put on the hook for upwards to $300 billion. Well, remember this; that was the same chairman, unfortunately, who told us 5 years ago and 3 years ago and 1 year ago, nonsensical was the idea that Fannie Mae and Freddie Mac could ever fail. In fact, that's the same chairman who told us that he would never support the bailing out of the GSEs. In fact, if I looked into the transcripts of our past hearings where the gentleman from Massachusetts spoke, he said repeatedly, ``I would never support the bailout of Fannie Mae or Freddie Mac or the GSEs.'' Well, sir, here we are today, upwards to a $5 trillion bailout for the GSEs. In fact, this will make the savings and loan scandals of a few years ago pale by comparison.

And I remind the American public, how did that unfold? First, it was a $10 billion request to the American taxpayer that they used to bail out the savings and loan. Then it was $50, $70--finally, $200 billion plus was asked for the American taxpayer to bail out the American savings and loans in this country. That's the exact same thing that's potentially going to occur here today as we bail out Fannie Mae and Freddie Mac for their exclusively bad decisionmaking.

I appreciate the additional 15 seconds, and I would yield those 15 seconds to the gentlelady from Ohio (Ms. Kaptur).

I thank the gentlelady from Ohio for supporting this measure to make sure that this rule does not pass and that the American taxpayer is not put on the hook for $5 trillion.

Mr. Speaker, the American taxpayer today should be alarmed. No, he should be outraged. The taxpayer is being asked to be put on the hook for $5 trillion, the largest increase ever in U.S. history.

A blank check is being given to be written by this administration. $800 billion is being asked for an increase in our debt limit. The CBO even says $25 billion potentially on the hook just to the year 2009.

Experts have pointed out what this all means to you and I, the taxpayer, higher costs, higher inflation, and, of course, the prospects of ever higher taxes as well. We here today are crossing the Rubicon. Just as Caesar crossed into Rome, so too are Secretary Paulson and Chairman Frank, locked arms together, to cross the Rubicon and into that uncharted morass of socializing the loss and privatizing the profits. As the people yelled back then in those days, there is no turning back. So here we are today.

Are we to stand here today and listen to those same people who brought us to this precipice and now ask us to join with them as we jump off? Yes, that's what we are being asked to do.

I would note today in the Wall Street Journal, Paul Gigot writes that back in 2003 that the head of Countrywide was yelling at him and others as well, saying that we don't understand the markets and mortgages and whatnot, and there is no systemic risk with the GSEs.

Well, Chairman Frank and others said the same thing, that we just don't understand and not to worry. There are only a few people in those years that stood up, people like former Congressman Richard Baker who said that there would be a problem down the road.

I joined Richard Baker and others saying we must be doing something back then, sever the link to the Federal Government, end the $2.5 billion credit line, end the influence of buying, $200 million by lobbyists, by these entities, using their influence to make sure

that no reform could get done. We tried to pass legislation that would give us just basic reform, but all those initiatives were stopped at the very brink.

Also during that time, Chairman Frank told us that this would not happen.

He said, ``I'm not going to bail them out.''

Will the gentleman yield on that point?

Will the gentleman yield on that point?

I rise today in recognition of an organization that is influential in the lives of millions across this Nation and around the world. Since 1968, the Special Olympics has celebrated those who triumph in the face of adversity and achieve victory despite insurmountable odds. This organization recognizes the ineffable beauty of human life and emphasizes the dignity of people with intellectual disabilities.

In 1968, Eunice Kennedy Shriver founded the Special Olympics in honor of her sister, Rosemary. The first games were hosted at Soldier Field in Chicago, and featured over 1,000 participants from the United States and Canada. Since that time, the Special Olympics has become one of our Nation's greatest exports, serving 2.5 million athletes in over 180 nations and offering year-round training and competition in 30 Olympic- type winter and summer sports.

The Fifth District of New Jersey holds two major venues of our Winter Games each year: Campqaw in Mahwah features cross country skiing and snowshoeing, while Mountain Creek in Vernon holds alpine skiing and snowboarding.

Earlier this year, I was honored to have John Rosati, a Special Olympics participant from Mercer County, visit my office. In addition, I would like to recognize one of my own constituents, Kelley Sue Martin of Closter. Not only does she compete in alpine skiing, bowling, and track and field, but she also serves as a spokesperson for Special Olympics New Jersey and speaks at community and fundraising events throughout the state.

As the Special Olympics celebrates its 40th birthday on July 20, I join my colleagues in recognizing the indelible impact left by this exceptional organization. Over the past four decades, the Special Olympics has been an effective catalyst for social change. Special Olympians develop improved physical fitness and motor skills, greater self-confidence, and a more positive self-image. Participants grow mentally, socially and spiritually. They exhibit boundless courage and enthusiasm while enjoying the rewards of friendship and discovering new abilities and talents.

Few creeds sum up the American Spirit better than the oath of the Special Olympics: ``Let me win. But if I cannot win, let me be brave in the attempt.'' I applaud the Special Olympics for providing an arena for athletes to follow this creed.