9:28 AM EDT

Barney Frank, D-MA 4th

Mr. FRANK of Massachusetts. Madam Speaker, I yield myself such time as I may consume.

Madam Speaker, rarely have the Members had so many reasons for wishing we weren't here.

First, it's a couple of days into what was supposed to be the time when Members can return to their districts to engage in campaigning. Members had a number of important events scheduled with their constituents, with their families, with others that have already had to be cancelled, and we are into the third day of that.

Secondly, Members would rather not be here because this is a tough vote. This is a vote where many of us feel that the national interest requires us to do something which is in many ways unpopular because what we are talking about, to many of us, is the need to act to avoid something worse from happening than is already happening.

[Time: 09:30]

It is hard to get political credit for avoiding something that hasn't yet happened but you think is going to happen.

Most of all, though, we regret being here because we all deeply regret the economic conditions which have made this decision day necessary. No one is happy that we have seen the failures that we have seen in our economic system. We differ as to whether or not those failures, as they have had a cumulative effect, require us to act. I believe it is possible to debate whether or not 2 weeks ago it was necessary to act quickly. I believe that it was. The bad news continues. There has been a lack

of confidence in the financial system that is pervasive. Unfortunately, a lack of sensible regulation allowed the financial system to get itself into a position where so many people owe other people so much more money than they have or can reasonably be expected to get, that as confidence ebbs and people are called upon to make good on promises they should never have made, we face a declining cycle of activity.

People have said, well, you're bailing out Wall Street. The people in the financial industry who made a lot of money still have it. Their institutions may not have it, but they do. No high executive of a failed institution will be showing up soon at the unemployment office. None of them will be hurting. They will be fine personally. The people who will be hurt, in our judgment, are those who are trying to buy or sell cars, because there won't be credit for the automobile industry. There won't

be ability to refinance your house or buy a house because there won't be any money there for any purchase that requires credit of any size, people will get hurt and it will have a cumulative effect.

Now you might have argued that the tremendous lack of confidence that is causing this over-leveraging to be a problem would not have had to be addressed a week ago. But let's remember what happened. Ten days ago, on Thursday, not far from here, in the office of the Speaker, the bipartisan congressional leadership and those of us who have leadership roles in the Financial Services and the Banking Committees were asked to meet with the Secretary of the Treasury and the Chairman of the Federal Reserve.

In our country, under our system, the executive has a lot of the initiative. We have an ability to shape. We have an ability to respond. But in emergency situations--let's be clear--the initiative is inevitably with the executive. And the two leading appointees of President Bush concerned with economic activities, the people the financial community looks to, came to us and said, you need to give us this authority, and if you don't give it to us very quickly, there will be a disaster.

We have not given it to them as quickly as they asked because we felt that we needed, even if we agreed with the premise of the need for action, that we had to make some improvements. And we have made many of them, not as many as I would like, but we have made many of them. But we were able to do that, I believe, because we have been able to show progress.

At all times from the time they came on Thursday night, this body has been engaged. I have been here 27, 28 years. I have never seen a piece of legislation which was so open to Member participation in which there has been so much discussion. People have said, not enough time is being spent. Well, let me say this. The hours spent on this bill exceed the hours spent on most bills. And the staffs of the committee I chair, of other committees of Members, have done extraordinary work. What we have

done is substantially change what they have done, but we have been able to say at all points that we're making progress.

Today is decision day. I wish it weren't the case. But I am convinced that if we defeat this bill today, it will be a very bad day for the financial sector of the American economy. And the people who will feel the pain are not the top bankers and the top corporate executives, but average Americans. They don't see it yet. And pain averted is not a basis on which you get a lot of gratitude. But that is what is coming if we do not do something today, in my judgment, positive. If this bill dies,

I think we get negative.

And again part of the reason is this--and I disagree with Secretary Paulson and Chairman Bernanke on some policy issues. I regard them both as men of high integrity and total commitment to the national interest. And I believe they are absolutely and legitimately convinced about this. And by the way, they cannot, in my judgment, be accused of excessive pessimism. If anything, they can be accused of being too optimistic. Because you will recall that beginning with the Bear Stearns intervention,

they have tried a series of interventions much less intrusive than this and they haven't worked. These are not men whose first impulse was to do something this broad. These are men whose experience was that something systemic was required because, again, of the depths of the problem.

Let's not forget the cause as we debate the consequence. The cause was too little regulation and the financial market getting itself into serious trouble. And now we have to, through government action, work with them to clean this up. And by the way, we have committed, I think almost everybody in this Chamber, certainly a large majority, that next year we will put in place the kind of regulations that we wish we had had before so this won't recur. So nobody needs to worry that we do this once

and we will have to do it again another time and another time. We know how, I believe, to prevent this from recurring. But that doesn't help us as we deal with it today.

And the point is this: No matter what you thought about the crisis 10 days ago, when these two internationally respected highest officials of the Bush administration of the greatest economic power in the world come up and say, if you don't do this, we will have a crisis, then even if that hadn't been true before, they have made it more true. And I don't accuse them of doing it for that reason. That is just the reality.

If we repudiate George Bush's Secretary of the Treasury and Chairman of the Federal Reserve, joined as they were by previous Secretaries of the Treasury, if we repudiate them and say, nah, calm down, we'll get over it, I believe the consequences will be severe.

So I hope that this bill is passed. It is a first step. We have a task next year to do with regulation. We have oversight that must be done about how we got here. But here is the choice: George Bush's two chief economic officials have said to us, if you do not act, there will be terrible, negative consequences for the financial sector, and they will very soon exacerbate an economy that is already troubled, that already has 6 percent unemployment and is on track already to lose more than 1 million

private sector jobs in the year. If we add to this weakened economy, and this is the headline, ``The House Repudiates Top Economic Advisers,'' there is nothing, I believe, that will then stand between us and--it's not the end of the world, this is a strong country, people will still get

up the next morning and still send their kids to school, but fewer of them will be going to work. And fewer of them will be buying cars. And fewer of them will be able to refinance their homes. And the consequences will be a much more dismal near economic future for the United States.

So I hope the bill passes.

I reserve the balance of my time.

9:37 AM EDT

Gary G. Miller, R-CA 42nd

Mr. GARY G. MILLER of California. Madam Speaker, as Chairman Frank said, I have yet to talk to a Member who wants to have to vote on this today. This is probably the toughest vote any of us have taken since we have been in Congress. And if you just solely rely on the telephone calls we are getting from home and listen to people who really don't understand the complexity of our marketplace and what we are trying to deal with here, the easiest vote for you to make would be a ``no'' vote

today. But you have to go beyond that. You have to say what happens to the family next week who wants to buy a house and they can't get a loan? What happens to the family next week who wants to get a car loan and they can't get a car loan? Or they want to send their kids to the university and they go to get a student loan, and there are no loans available?

And right now when the marketplace is running as it is, people say, well, [Page: H10361]

that is not likely to happen. But if you look at the systemic problem we have in the marketplace, there is a probability that it could happen.

Now we can roll dice today. We can say, let's not vote, and let's hope everything goes okay. And for Members, it's a very difficult situation. They say, if I vote for this bill and the bill passes and the marketplace does not crash and it continues and it improves, people are going to be mad at me because I voted to continue the process they think is bad. If you vote ``no'' on this bill and we have a crash in the marketplace and illiquidity occurs and people go to get loans, the businessman who

normally relies on his loans to make payroll, he goes to the bank and the bank says, like the bank said to McDonald's, we will no longer fund expansion of McDonald's, which is the largest fast-food chain in the United States, when that occurs, then the Member has to say, what is the consequence to voting ``no'' for this bill? So it's almost a catch-22. You're darned if you do, and you're darned if you don't.

There are some things in this bill that I think should have happened earlier. We are having mark-to-market that deals specifically with assets banks have to hold that are devalued. Chairman Bernanke said last week, accounting rules require banks to value many assets at something close to very low fire-sale prices rather than at hold-to-maturity prices, which is not unreasonable in its given face of illiquidity. Banks are forced today to write down the value of the assets they have and set huge

reserves aside for losses they have already taken.

The bad thing about this, I put language into the housing bill in April as an amendment. It came out of this House and went to the Senate. When the bill came back from the Senate, that language mysteriously disappeared. We could have done that then and perhaps not be quite in the situation we're in today.

The subprime marketplace that people are angry about today, the subprime marketplace is a good marketplace. But when you mix predatory lending in the market, it's bad. When you make loans to people when a trigger kicks in in the interest rate that they cannot make, you have committed a predatory loan. We should have defined that in law 4 or 5 years ago. But we did not.

If you look at the rates of interest today, they have been held down so low that the euro in recent years has increased in value dramatically, and the result of commodity prices in the U.S. is that oil, grain, coal, metal, and currency premiums are basically suffering a 20 to 30 percent hit.

If you look at the marketplace today, the declining home prices we've had out there today, and the subprime loans that they're going to be buying, they are going to be buying them at 40 percent of market value. And if you look at what is happening on the prime loans, which are good loans, they are only worth 90 percent of market value.

Members today need to look at what we're doing. Are we going to change the market or are we going to let the market continue to decline and roll dice and say perhaps nothing will happen? I think there is something we need to do in the coming months that really bothers me that is not in this bill. I think we need to look at public-private partnerships involving local communities, investors, in these assets we buy and basically maximizing the benefit and the value of these assets. If we involve

the local people in what we're doing here, they will put their assets with the assets of the Federal Government, increasing the benefit to the marketplace and ensuring that the yield to these investments will produce a profit. What we don't want to have happen is like

what happened during the savings and loan debacle where assets were bought by the Federal Government, dumped on the marketplace at low prices, calling the market to continually decline farther than it had currently done, and end up with a worse problem than we face.

Members need to look at what we're doing today. Some Members have worked very, very hard to come up with a compromise package that we believe is not pleasing either side. The Democrats are not happy. The Republicans are not happy. But it is something that is going to work. We need to look at that. We need to weigh our conscience for what is best for our community and what is best for our country. And we need to vote what is right for this Nation.

9:42 AM EDT

Mel Watt, D-NC 12th

Mr. WATT. I thank the gentleman for yielding time.

There is probably no worse instance to be doing legislation than having to do it in response to a crisis. Legislating to clean up a mess is just not as fun as it is if you do something thoughtfully looking forward to try to prevent a mess from occurring.

And we've been, for the last several years, trying to legislate. We had predatory lending legislation. We've been on the forefront of that. But we've been having difficulty getting people to recognize that a crisis was coming if we didn't respond to cut back on irresponsibility in the market.

There are two problems here. The first is, is there a real crisis that needs to be responded to? And that is really the question that I have gotten a lot more calls from my constituents about. The second issue of course is what do you do about it if there is a crisis? So let me talk about the first of those first. Is there a crisis? And that question I really don't have an answer for other than the answer that we were given by the Secretary of the Treasury and the Chairman of the Federal Reserve

1 week ago Thursday which was that we are in a real crisis situation that could mushroom into something worse than the Great Depression.

It's not my responsibility as an individual Member of Congress to go and prove that. But when the Secretary of the Treasury and the Chairman of the Federal Reserve tell me that there is a real problem, the stakes become too high for me not to take it seriously. It's not my responsibility to go and convince the American people, and I wish we had a President that had enough communication skills and enough credibility with the American people to convince them that there is a real problem. Unfortunately,

that burden hadn't been carried sufficiently by the administration.

[Time: 09:45]

But I am convinced that the odds are bad enough that if we don't do something today, we will regret it for a long, long time to come. Having jumped across that threshold, we have shaped this package as responsibly as we can shape it, and I encourage my colleagues to support the bill.

9:45 AM EDT

Barney Frank, D-MA 4th

Mr. FRANK of Massachusetts. Madam Speaker, while I believe the gentleman is a little bit too harsh on the Bush administration, I understand his point of view.

Madam Speaker, I now yield to the gentleman from Michigan, the dean of the House, for purposes of a colloquy.

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

9:46 AM EDT

Adam Putnam, R-FL 12th

Mr. PUTNAM. Madam Speaker, I thank the gentleman from Alabama for yielding.

There is an old Chinese proverb, ``may you live in interesting times,'' and these are interesting and remarkable times.

In the past 2 weeks, we have seen the five largest investment banks in the United States be reduced to two. Last week, the largest bank in the United States failed. Over 2,000 branches spread out across this country, retail outlets where ordinary Americans, downtown merchants, farmers, students, seniors, savers relied on that bank to meet their needs, it failed last week. This morning, another major bank on the brink of collapse was purchased for $1 a share.

Last week a money market fund announced that, for the first time, they had ``broken the buck,'' that they could not guarantee that every dollar you put into that money market account would be retrievable on your request, and a second major money market account announced that they were closing and not accepting any new deposits for fear of the same thing happening to them.

Now, when you get beyond credit swaps and derivatives and all these complicated things that obviously not even the Wall Street traders who are engaging in them understood and start talking about the bank on the corner failing and the money market funds where every small business holds their payroll, where every saver is trying to wring out an extra half a point of interest, you have reached Main Street. You are now standing at the brink of a financial collapse that is well beyond the financial

capitals of the world.

I also failed to mention, since we are not just talking about an American problem, that this weekend alone, three of the largest banks in Europe either failed or were nationalized.

So we live in interesting times, and we are watching one domino after another fall that are the pillars of our financial system here in the United States.

Now, I tried to think of the right analogy, and it dawned on me that, being from Florida, we get a lot of hurricanes, and in 2004 we had three hurricanes come across Central Florida, my home, in nine weeks, bam, bam, bam. Then a year later we watched a storm come across Florida and build in the Gulf, and it got bigger and bigger and moved faster and faster and had a bull's eye on New Orleans, and I, like a lot of Americans, wondered why more people weren't leaving, why more people weren't heeding

the warnings that were so obvious from the weather map of what was building into a monster in the Gulf of Mexico.

If you have ever wondered why people don't get out of the way of an oncoming storm, a hurricane that is barreling down on top of you, despite days of notice, despite satellite imagery, despite all of the best advancements in communications, then you have to apply that same analogy to what we are seeing now; one bank after another failing, rolling out of New York, rolling out of Brussels, out of London, out of these places that seem so foreign, into our Main Streets, into our merchants' associations,

into our farmer cooperatives.

You are watching this happen. So how could you as a Member of Congress in seeing that roll across the countryside not do everything in your power to prevent it?

The previous speaker made an outstanding reference to the fact that Congress is known for producing fairly bad legislation in the aftermath of a crisis. What we have before us today is an attempt to avert that crisis and all of the rushed legislation that would follow a collapse, the likes of which we have not seen in this country since the 1930s.

This bill is a substantially different bill than what Secretary Paulson and the President sent up here a week ago. It is a better bill than what they sent up here, and it is a bipartisan bill.

We talked about how remarkable these times are. Last week, two candidates who have spent 2 years, two difficult, hard-fought years looking for a way to beat the other one to become the next President of the United States, both hit the pause button and released a joint statement of principles in agreement that Congress needs to act to avert a financial collapse.

This body has come together to produce a bill that is distasteful to most, that required both sides to give up many of the individual items that they thought would be helpful--pro-growth capital gains policies that Republicans thought would be helpful, affordable housing trust funds issues that the Democrats thought would be helpful, both gone from the draft of this bill--and instead focusing on the central goal, which is to avert the financial collapse that all of the experts and all of the

evidence and all of the bank failures and all of the money market closings indicate is very possible if Congress doesn't act.

So, by virtue of Congress coming together and improving the Paulson plan, by virtue of the people's elected representatives having the opportunity to weigh in on this issue and to hash out these problems and to work around the clock on the weekends to make this a better bill, it will not cost $700 billion, as has been widely reported in the original draft, for a variety of reasons; the potential upside of the assets that the government is buying, the insurance program. [Page: H10363]

The most recent intervention that this Congress passed in the GSEs was estimated at $300 billion in costs. It was actually scored at $25 billion in costs.

So it is important that the taxpayers understand that because the Congress has moved forward on this issue, it will be a smaller tab for the taxpayer. But it will be an effective intervention to restore the confidence necessary to avoid the kind of panic that we haven't seen in generations in this country.

This is no longer the Paulson-President's plan. Because of the work that Chairman Frank and the Republican negotiators have done, this is a better bill; better for the taxpayer, no golden parachutes for CEO's who drive their companies into the ground and walk away with millions, none of the special interest projects that concerned so many people on our side.

But, most importantly, the evidence is overwhelming that we must act. It is always difficult to compile legislation this complex under such a short timeframe, and we are up against a short timeframe because of the markets, because of the holidays, because of the natural calendar in our political cycle. The only thing worse than that is the kind of legislation that will result in the aftermath of the debris that remains after a financial collapse.

So I stand here today willing to support this bipartisan compromise that has been hashed out over these last several days that is such an improvement over what we began with a week ago, but is so important to the financial architecture, not just of investment firms and speculators and people who got too cute by half with someone else's money, but someone who is willing to support this bill because it is so important to the seniors, the savers, the merchants and the farmers who need to understand

that the confidence will be there in their banking system; that they don't have to withdraw their funds and stick them under the mattress; that our country's free market system is still the greatest in the world; and that this intervention will allow those credit markets to unlock and we will be able to unwind and deleverage this marketplace and move forward together.

So I compliment my chairman, I compliment our Republican negotiators, Mr. Blunt and Mr. Cantor, and I urge my colleagues to support this bill.

9:56 AM EDT

Lynn Woolsey, D-CA 6th

Ms. WOOLSEY. Thank you, Mr. Chairman, for allowing time for the opposition.

There are some major questions, Madam Speaker, to be answered by a bailout package that fails to address the root cause of the financial crisis facing our Nation, one that does little or nothing to secure the underlying problem of mortgage foreclosure and economic suffering that hardworking Americans are facing every single day.

Question one: Where is the comprehensive economic stimulus package that will assist 95 percent of the taxpayers, a package that includes unemployment benefits, food stamps, infrastructure investment, and, of course, foreclosure relief? Stability should come from the bottom up; an economic stimulus package that will allow those in foreclosure to pay their mortgages and stay in their homes, bringing value back to the mortgage-backed securities that are clogging the financial system.

Question two: Why isn't Wall Street paying for the mess they created? By reinstating a one quarter of 1 percent surcharge on stock trades, we can raise nearly $150 billion a year from those who have actually caused this mess and profited from it also.

Finally, question three: With only 3 months left of this current administration, why are we willing to even make available $700 billion to this administration? President Bush and Secretary Paulson have been wrong from the start on just about everything. If you think they will be responsible with this money, think again.

I, for one, will be in opposition of this bailout with these major questions unanswered.

9:58 AM EDT

Barney Frank, D-MA 4th

Mr. FRANK of Massachusetts. Madam Speaker, while I believe the gentleman is a little bit too harsh on the Bush administration, I understand his point of view.

Madam Speaker, I now yield to the gentleman from Michigan, the dean of the House, for purposes of a colloquy.

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

9:58 AM EDT

Thad McCotter, R-MI 11th

Mr. McCOTTER. I rise today not to change anyone's mind, but to express to my constituents my reasons for opposing this bill.

There will always be time and pretext enough for people to compromise their principles and put forward poor public policy that may in the short run be popular, but in the wrong run will be detrimental to the long-term interests of the American people. We learn this through history.

In the 1832 bank panics, Andrew Jackson had the question of whether he would remove the Bank of the United States' charter. The people in the bank did not like that. They threatened the prosperity of the American people. In the middle of the panic, Andrew Jackson looked at these bankers and he said, ``There are no necessary evils in government. The Treasury to you, gentlemen, is closed.''

This was an act of courage on the part of President Jackson, because he understood what was at stake was not merely an ephemeral prosperity or a panic caused by the very people with their handout. Andrew Jackson understood this was about majoritarian rule; it was about the faith in the people's representative institutions and those who inhabit the seats in which they are entrusted.

Today we are in a global financial bank panic. It is the first of our global economy. We are seeing a leveraged bailout of the United States Treasury. In the end, these interests that want your money are threatening your prosperity, and the choice you face is this: You will lose potentially your prosperity for a short period of time at the expense of your long-term liberty. Once the Federal Government has got you to take that risk and pass it on to you as a ``moral hazard,'' they will be in the

marketplace. And as the free market is diminished, your freedom itself is diminished, and as your Congress does not stand up to these and put forward a better plan that truly protects the taxpayers, that truly has the long-term interests of the United States at heart, you will be in jeopardy of losing both your prosperity and your liberty.

The choice is stark, and it was put forward in the book by Dostoevsky. In ``The Brothers Karamazov,'' the grand inquisitor came to Jesus and he said, ``If you wish to subject the people, give them miracle, mystery and authority; but above all, give them bread.''

It has always been the temptation in a crisis especially to sacrifice liberty for short-term promises of prosperity, and it was no mistake that during the 1917 Bolshevik Revolution the slogan was ``peace, land and bread.''

[Time: 10:00]

Today you are being asked to choose between bread and freedom. I suggest that the people on Main Street have said that they prefer their freedom, and I am with them.

10:01 AM EDT

Jim Moran, D-VA 8th

Mr. MORAN of Virginia. Chairman Frank, thank you for trying to save America's economy. I don't know anyone who could have understood the intricacies of this bill, held your own with the Bush-Cheney administration on behalf of the taxpayer and navigated Congress' political waters as skillfully as you have. If this bill passes and the markets have stabilized, it will be to your credit and perhaps, more importantly, when the taxpayer reaps the benefit of this bill, they will look back to

your leadership and your legacy.

I want to say a word about that latter point. This is a good deal for the taxpayer, and let me explain why with the help of a current analysis from the staff of Barron's magazine. This is the time to be buying--when everyone else wants to sell. But the government is the only agency that can do so because we can borrow at 3 percent with no collateral requirement. There is such a gap today between today's panic prices and tomorrow's inherent value that the taxpayer is in an enviable position. But

the Treasury must act as a proxy for the taxpayer. There's no alternative to that.

Now, once we start buying tranches of securities, even with a third of the money authorized by this bill, the securities markets will bounce back and, more importantly, so will the value of residential real estate. Treasury is likely to be buying mortgage debt at [Page: H10364]

an average of 65 cents on the dollar. Since Treasury borrowing is about 3 percent with no collateral requirement, we will get about $35 billion in annual interest on $250 billion or $70 billion

on $500 billion from these mortgage securities because they will yield a net of about 7 to 8 percent return. I know those are just numbers but this is about numbers.

More importantly, Treasury has the luxury of time. With proper oversight and regulatory discipline, markets will be back on their feet within a year and at that time the taxpayer is likely to recoup a 25 to 30 percent nontaxable capital gain on many of these security packages, on top of the underlying maturity value.

10:05 AM EDT

Jeb Hensarling, R-TX 5th

Mr. HENSARLING. I thank the gentleman for yielding.

Madam Speaker, this is clearly one of the most important votes that many of us will cast in our congressional careers. We are all concerned about the state of our economy. We are all concerned about the state of our capital markets. What has infected Wall Street may soon reach Main Street. Inaction has never been an option. But, again, the Paulson plan should never have been our only option. I fear other options, Madam Speaker, have never been considered seriously in the body. Although I certainly

want to congratulate our ranking member, Spencer Bachus; our Republican leadership--Eric Cantor of Virginia, Paul Ryan of Wisconsin--for the work they've done to improve this bill, this is clearly a better bill, Madam Speaker, than it was a week ago,

but that's not the relevant test. The relevant test is when you look at the good in the bill, when you look at the bad in the bill, does it take America in a direction that you believe America should go? By that test, Madam Speaker, I will vote ``no'' on this legislation.

I fear this legislation before us is fraught with unintended consequences. I fear that ultimately it may not work. I fear that it is too much bailout and not enough workout. I fear that taxpayers may end up inheriting the mother of all debts. Now, some have come to the House floor and said, well, the taxpayer's going to make money on this. You know what, Madam Speaker: They may be right. I can tell you this much, Madam Speaker: as history as our guide, the taxpayer lost $200 billion on the S&L

bailout. I can raid my neighbor's college fund for his children, go put it on a roulette table in Las Vegas, maybe I'll triple his money for him, but you know what, Madam Speaker, it's not a risk my neighbor voluntarily assumed.

I fear that under this plan, ultimately the Federal Government will become the guarantor of last resort and, Madam Speaker, that does put us on the slippery slope to socialism. If you lose your ability to fail, soon you will lose your ability to succeed. That's why, Madam Speaker, House conservatives have put forth an alternative plan, and we are happy to work on it today and all next week. As important as it is to act quickly, it is more important to act rightly. We would hope this plan would

get serious consideration.

And, Madam Speaker, once it does, we hope that we can go on--that we can address the taxpayer crisis, as our fellow citizens are looking at the largest tax increase in American history; the spending crisis of an out-of-control Congress; the energy crisis where we see too many of our fellow citizens struggling to pay their bills.

Madam Speaker, as we look at this legislation, and I respect all regardless of what side they come down on, if in doubt, err on the side of freedom.

10:09 AM EDT

Ike Skelton, D-MO 4th

Mr. SKELTON. Madam Speaker, article 1, section 8, of the Constitution grants Congress the responsibility of raising and maintaining the military of our country. Our Founding Fathers were wise to put this power in the hands of Congress, the branch of our national government most closely connected to the American people. As chairman of the House Armed Services Committee, I take seriously Congress' role with respect to national security policy. In a series of recent committee hearings designed to

study the need for a new comprehensive strategy for advancing American interests, it was evident that America must use all elements of national power--military, diplomatic, and economic--to remain the indispensable nation, acting as a consistent and ever-present global force.

If our economy were to falter, it would undercut America's global military and diplomatic strength. And it would be far more difficult for Congress, working with the President, to properly address our international challenges. It is through the lens of national security that I have examined the economic rescue bill before the Congress today.

The economic crisis is real. Cash flow in the market has slowed, and some of America's top financial firms have failed. If action is not taken immediately, experts warn that the average American, including those in rural Missouri, will find it difficult or impossible to obtain credit for a mortgage, a car loan, a farm loan, a college loan or a small business loan, bringing economic activity to a standstill.

At the request of the President of the United States, Congress has worked over the last week to build consensus around a bipartisan plan to stabilize the financial markets. Luckily, the bill being considered today bears little resemblance to the $700 billion blank check that the President initially requested back on September 20. That approach was totally unacceptable. So Congress improved it in a way that better protects the American taxpayers.

Like many of the Fourth District residents from whom I have heard in the last week, I am angry that we find ourselves considering an economic rescue bill. But as I have studied the specifics of the crisis, I am convinced the consequences of inaction would be dire for America's economic and national security and for our country's overall standing in the world community.

While I support this particular bill, I urge Congress to continue studying the economic turmoil we are facing and to consider additional legislative solutions to it. We must get to the bottom of what caused this crisis so that it does not happen again.

Madam Speaker, I intend to vote in favor of this bill.

10:12 AM EDT

Barney Frank, D-MA 4th

Mr. FRANK of Massachusetts. Madam Speaker, while I believe the gentleman is a little bit too harsh on the Bush administration, I understand his point of view.

Madam Speaker, I now yield to the gentleman from Michigan, the dean of the House, for purposes of a colloquy.

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

10:12 AM EDT

John Culberson, R-TX 7th

Mr. CULBERSON. I thank the gentleman for yielding, and I want to point out that this legislation is giving us the choice between bankrupting our children or bankrupting a few of these big financial institutions on Wall Street that made bad decisions. Now, my daughter didn't do anything to deserve this. I know what the banks on Wall Street did.

Look at the bill itself. Let me just point to a couple of sections in the brief 2 minutes that I've got to see that the Secretary of the Treasury is being given authority absolutely unprecedented in the history of this Nation. We're essentially creating a King Henry here who is going to be able to buy any type of financial instrument he wants from any financial institution anywhere in the world, anywhere in the world owned by anybody, the Secretary can step in using his authority to buy any troubled

asset he wishes--not just limited to residential mortgage-backed securities--any financial [Page: H10365]

instrument owned by any foreign entity, any American entity anywhere in the world and, quote, the Secretary is authorized to take such actions as the Secretary deems necessary to carry out this act.

It is also unprecedented that you can't sue him to stop him. The judicial review section of this bill says that if you attempt to sue the Secretary, you can only overturn his decision if he does something that's arbitrary, capricious or an abuse of discretion, essentially something that's completely irrational. That's an absolutely unbelievable standard that gives the Secretary unbridled discretion, and you'll never be able to overturn or go after what he's doing in court.

It also allows the Federal Government for the first time, quoting from the bill here, page 28, the Federal property manager who holds, owns or controls mortgages even has the authority to get into negotiating and changing the terms of individual mortgages. It is an unprecedented, unaffordable and unacceptable expansion of Federal power that our kids cannot afford, that we have never seen in the history of this country, and I urge the Members to remember that there's a better alternative.

We, fiscal conservatives in the House, laid out sound alternatives that we need to take time to breathe and think about this and consider thoughtfully in committee. For example, just changing the mark-to-market accounting rule would make a tremendous difference. We could go in and examine, for example, why don't we repeal the capital gains tax and take it to zero as they do in so many other successful economies?

Don't vote to bankrupt our kids at the expense of saving some of the big Wall Street banks.

10:16 AM EDT

Mike Pence, R-IN 6th

Mr. PENCE. Madam Speaker, I thank the gentleman for yielding.

I rise in opposition to the Emergency Economic Stabilization Act and urge my colleagues respectfully to oppose it.

Our Nation has been confronted by a crisis in our financial markets. The President and this Congress are right to act with all deliberate speed in addressing this crisis. We now have a bill that promises to bring near-term stability to our financial turmoil, but at what price?

Benjamin Franklin in 1759 said, ``They that can give up liberty to purchase a little temporary safety, deserve neither liberty nor safety.''

Economic freedom means the freedom to succeed and the freedom to fail. The decision to give the Federal Government the ability to nationalize almost every bad mortgage in America interrupts this basic truth of our free market economy.

It must be said that Republicans in this Congress improved this bill. But it remains, in my judgment, the largest corporate bailout in American history, forever changes the relationship between government and the financial sector, and passes the cost along to the American people. And I cannot support it.

There are no easy answers, but the American people deserve to know there are alternatives to massive Federal spending. The Bush administration and this Congress have acted quickly, but ignored free market solutions to this crisis. The House Republican plan, as a solid alternative, would have set up an FDIC-style mandatory insurance program in which Wall Street firms would have paid to insure their mortgage-backed securities. Doing so would have made Wall Street pay the cost of this rescue instead

of Main Street. And while there is an option for an insurance plan in this bill, it falls far short of the substitute that Republicans desired.

The House Republican plan would have injected liquidity into our markets through fast-acting tax strategies, releasing the economic power inherent in the American economy. Temporarily reducing the repatriation tax, as we did in 2005, would have brought hundreds of millions of dollars back into this economy. And there were other business deductions that would help the financial sector get back on its feet. There were alternatives.

So I say to my colleagues: before you vote, ask yourselves why you came here, and vote with courage and integrity to those principles. If, like me, you came here because you believe in limited government and the freedom of the American marketplace, I urge you vote in accordance with your convictions.

Duty is ours; outcomes belong to God. The American people and our posterity deserve to know that there were men and women in this Congress who opposed the leviathan state in this hour. If you do this, I promise you, I will stand with you. And I believe with all my heart, the American people will stand with you as well. Stand up for limited government and economic freedom. Stand up for the American taxpayer. Reject this bailout and vote [Page: H10366]

``no'' on the

Emergency Economic Stabilization Act.

10:20 AM EDT

Jim Costa, D-CA 20th

Mr. COSTA. Madam Speaker, to the chairman of the Financial Services Committee, it is my understanding that section 132 of the bill authorizes the Securities and Exchange Commission to suspend by rule, regulation or order, statement 157 of FASB if the commission determines it is necessary and appropriate and in the public interest and that this discretionary authority would grant banks flexibility in meeting their accounting requirements; is this correct?

10:21 AM EDT

Barney Frank, D-MA 4th

Mr. FRANK of Massachusetts. Yes, this reaffirms existing law, but we did it explicitly to underline its importance. There is very legitimate concern in this body on both sides of the aisle for the community banks. They are, in many cases, victims of practices from which they, themselves, abstained.

There is language in here that tries to give them some relief that they would get from the preferred tax situation with Fannie Mae and Freddie Mac. Other Members have raised the question of increasing the FDIC insurance limit next year, and this one in particular on the accounting, obviously none of us want the legislative accounting. But the gentleman has raised a very important point, and yes, we agree absolutely with how he has framed it.

10:21 AM EDT

Jim Costa, D-CA 20th

Mr. COSTA. And I understand, Mr. Chairman, the section does not require the SEC to grant such discretion. Is it the intent of the gentleman and the chairman of the SEC to ensure that banks are granted accounting discretion, to the extent that such discretion is consistent with the intent of the language in section 132, including but not limited to in reports that will be required at the end of this month?

10:22 AM EDT

Jim Costa, D-CA 20th

Mr. COSTA. And the legislation doesn't speak to it, but it is my understanding that the chairman of the committee will work on all regulatory agencies, including the banking regulatory agencies, to ensure that banks have the necessary and appropriate flexibility to address the changing market environment regarding capital requirements, accounting, audits and reports, and to do so in a timely manner for reports as of September 30, the end of the next reporting period, and would include but not

be limited to the section 132 discretion?

10:22 AM EDT

Jim Costa, D-CA 20th

Mr. COSTA. And the legislation doesn't speak to it, but it is my understanding that the chairman of the committee will work on all regulatory agencies, including the banking regulatory agencies, to ensure that banks have the necessary and appropriate flexibility to address the changing market environment regarding capital requirements, accounting, audits and reports, and to do so in a timely manner for reports as of September 30, the end of the next reporting period, and would include but not

be limited to the section 132 discretion?

10:22 AM EDT

Barney Frank, D-MA 4th

Mr. FRANK of Massachusetts. I yield an additional 30 seconds.

One thing we talk about as you study what the appropriate accounting ought to be, not legislative but as they study it, there is room for flexibility in how quickly various consequences attach to that, and we are discussing that with the regulators.

10:23 AM EDT

Jim Costa, D-CA 20th

Mr. COSTA. Finally, Mr. Chairman, I would like to commend you and the staff for the hard work that has been done on assimilating this very important package.

While it is unfortunate that we are in this position here today, the economic security of our Nation is at risk. We are talking about Main Street here. To do nothing is not an option. I look forward to supporting this effort and your efforts in the next Congress to do the reforms that are necessary to bring back economic sanity to our country. I would urge an ``aye'' vote.

10:23 AM EDT

Dan Lungren, R-CA 3rd

Mr. DANIEL E. LUNGREN of California. Madam Speaker, I rise in support of the Emergency Economic Stabilization Act of 2008.

Years ago when I was much younger, I was a lifeguard. And I recall one of the first lessons you learn as a lifeguard is that if you know there is a dangerous undertow, you get the people back on the beach and out of the water.

Maybe we can reflect and say we didn't see the undertows coming and we didn't get the people out of the water and onto the beach. But the other thing that I learned when I was a lifeguard was that if you found someone that was in the undertow, you attempted to rescue them. You didn't stand there and curse Mother Nature. You didn't say, Why didn't they do something yesterday? Or, Why didn't we do something an hour ago? Or, Why didn't we blow the alarm 10 minutes ago? You went and you tried to

rescue the individual or individuals who were in distress.

That's where we find ourselves today. We are in distress. I am not an expert on the international financial markets, but when bank after bank after bank appears to be going down in Europe, when we have bank failures here, when it appears to be a consensus of this House and the Senate and the executive branch that we have a difficult time, someone called it crisis, some would say that we are on the verge of a cataclysmic event, that we ought to take note and do something about it.

So I would say to my conservative friends, if we want to protect the taxpayer, we ought to try to get the best deal we possibly can under the circumstances. Under these circumstances, as we stand here today, I believe this is the best possible solution we can get.

Would I prefer something else, yes. I voted against the previous question because I wanted the Republican alternative, but we don't have the votes for that. So we need to do something to protect the taxpayer. But more importantly, let's bring this down to the very basic level. This is a question of jobs. It is a question about whether people in our districts are going to have jobs supplied by small businesses, medium-sized businesses. Can they go to the bank to get the credit so they can put

out the payroll.

Now, here is the problem. The chairman of the committee mentioned this awhile ago. We don't have the catastrophe right yet. If we prevent the catastrophe, will anybody notice? But it again reminds me of the time when I was a lifeguard. There were a lot of people who didn't get in trouble because I ran a pretty good pool.

10:27 AM EDT

Dan Lungren, R-CA 3rd

Mr. DANIEL E. LUNGREN of California. I didn't allow small children who didn't know how to swim to jump into the pool. I didn't allow people to dive into the pool where I knew it was too shallow and they could break their necks. I didn't get credit for saving them after they dove in the pool and broke their necks. I didn't get credit for saving a little child from jumping in the water and nobody noticing that child and having that child drown. But I know. I did my job, and I prevented some possible

tragedies.

So I would ask Members on my side of the aisle, think about it. If you truly believe we have the possibility of this economic breakdown, at least attempt to save the people in the pool. It isn't what I would desire. It is not what I would have brought to the floor had I had the unique chance to do it, but it is the best opportunity we have. Let's not miss it.

10:28 AM EDT

Barney Frank, D-MA 4th

Mr. FRANK of Massachusetts. Madam Speaker, I yield 2 minutes to the Chair of the Financial Institutions Subcommittee, a very creative legislator, the gentlewoman from New York (Mrs. Maloney).

10:29 AM EDT

Carolyn Maloney, D-NY 14th

Mrs. MALONEY of New York. Madam Speaker, this is a difficult vote. This bill is not popular, but it is necessary. A wholesale failure of the banking system would be the financial equivalent of an economic heart attack, the consequences of which could severely affect the lives and livelihoods of millions of ordinary American citizens.

The bill before us endeavors to prevent such a calamity. I do not pretend that it is a perfect bill, and taxpayers are rightfully outraged at the prospect of bailing out irresponsible banks and those that lead them.

Speaker Pelosi and Chairman Frank have made improvements in this bill. We have imposed stronger oversight, allowed judicial review, and mandated transparency through the publication of asset purchase prices. We have directed the Treasury to safeguard taxpayer interest while reducing foreclosure, allowed the government to obtain equity warrants so taxpayers may participate in the upside of rescued banks. We have created a system under which the banks themselves will pay to insure

each other's assets.

Perhaps most importantly, half the funds, $350 billion, will not be made available until after a 4-month cooling off period, during which time we in Congress can use that transparent reporting to examine the prices paid for the assets, the warrants obtained, and the program's effectiveness in stabilizing the financial system and aiding American taxpayers and homeowners.

[Time: 10:30]

We will continue our work on October 6 in hearings before the Government Reform and Oversight Committee in ways to reform the financial system and stabilize our economy.

I urge a ``yes'' vote.

10:31 AM EDT

Paul C. Broun Jr., M.D., R-GA 10th

Mr. BROUN of Georgia. I thank the gentleman for yielding.

This is probably the most important vote that Members of Congress are going to take this year and for many, many years. Unfortunately, this bill is not going to solve the problem. This bill is going to bail out foreign banks. It's going to bail out Wall Street. But it's not going to bail out banks, and it's going to hurt the taxpayer.

During the negotiations, we've had some changes to the Paulson bill, but this essentially is Mr. Paulson's bill to help his friends, and I can't buy it.

Frankly, Madam Speaker, I see this bill as just a stopgap that's going to push us a little further down the road. We're still going to have the economic collapse, we're still going to have the stock market crash, we're still going to have all of the problems that this is supposed to fix. We heard the same argument with the Fannie Mae bailout and Freddie Mac. We've heard it in the discussion about Bear Stearns and AIG. It's the same old story. We're just going further down the road. We're getting

deeper and deeper. The cliff is getting steeper and steeper.

We need to slow this down. We need to stop this process. We need to vote against this bill and find something that really makes sense economically that's going to secure the bank situation.

We have a capital problem, not a liquidity problem in our banks, Madam [Page: H10368]

Speaker, and we've got to find a solution. And there are solutions. This is not the only one. This one is the only one to bail out Wall Street, but it's going to cost our taxpayers dearly.

Madam Speaker, this is a huge cow patty with a piece of marshmallow stuck in the middle of it, and I'm not going to eat that cow patty.

I would encourage all of the Members of my conference and your conference to vote against this bill so we can find something that makes sense.

10:34 AM EDT

Brad Sherman, D-CA 27th

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

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

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

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

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

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

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

off.

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

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

10:37 AM EDT

J. Gresham Barrett, R-SC 3rd

Mr. BARRETT of South Carolina. First off, I want to commend my colleagues, especially Minority Leader John Boehner, Roy Blunt, Eric Cantor, and certainly Ranking Member Spencer Bachus, for their hard work in improving this bill. However, Madam Speaker, after careful and agonizing consideration, I cannot support H.R. 3997 and will be voting ``no.''

I understand the need to act, and I understand the urge to act quickly. We must restore the flow of credit. I firmly subscribe to the belief that Main Street and Wall Street are inextricably linked. Instability in the financial markets leads to instability in taxpayers' personal accounts and their personal funds.

Meanwhile, that capital that flows through our financial markets is vital to the continued success of our businesses, large and small. We should all agree that a failure of our credit markets would be an enormous catastrophe, and the government does have a role in ensuring that the financial markets function soundly.

At the same time, we cannot allow the American taxpayer to become the insurance policy for financial decisions that didn't quite turn out as planned. Whether you're talking about someone from South Carolina who took a mortgage they couldn't afford or a Wall Street banker who gave that mortgage, we see just how important personal responsibility must be to the American society. And I fear that this legislation erodes this accountability and the freedom that comes with it.

Unfortunately, Madam Speaker, our government is in debt, and we're in a lot of it. In fact, this whole crisis is built around debt, where much bad debts has caused an inability to get new credit--otherwise known as debt. My daddy always told me that you can't borrow your way out of debt. And he was right.

There are other reasonable options that we should explore to help the markets heal themselves and that would not burden our country under even greater mounds of debt. I was pushing for a plan that would use more free market principles, such as suspension of capital gains, a repatriation of earnings to help spur economic growth by helping all Americans whose retirement accounts are invested in the stock market or own a house or business so they can jump start the flow of funds back in the system.

There is no doubt we find ourselves in a precarious situation, and the people are angry, and rightfully so. I'm angry. But we must not allow this anger to cloud our judgment and make choices that will divide this country. This is not a matter of Main Street versus Wall Street.

But when it comes time to vote on this bill, Madam Speaker, I will be voting ``no.'' I understand my colleagues for their reasoning, and I'm confident that we all want to do the best for this country. But I believe so strongly in the principles of the free market and the belief in the word ``freedom.'' That's why I'm opposing this bill.

My fear is that today the government will forever change the face of the American free market.

10:40 AM EDT

Jim Marshall, D-GA 8th

Mr. MARSHALL. Thank you, Mr. Chairman.

I want to begin by complimenting the negotiators on addressing an issue that's very important to small community banks generally, and that is authorizing the deduction of the Fannie Mae losses against ordinary income as soon as possible. That will help all community banks.

Many of my banks, Mr. Chairman, are suffering from loans on their books from typically builders and developers who are now unable to complete their projects. And these banks feel strongly that they would be assisted greatly if there were an opportunity for them to borrow from the Fed window at 1, maybe 2 percent--but a very low interest rate--the funds to cover these loans on their books that currently they're illiquid.

10:41 AM EDT

Barney Frank, D-MA 4th

Mr. FRANK of Massachusetts. I think the gentleman makes a very good point. It's not anything obviously that we would legislate. I know he knows better than most, and he's not asking for that. But it is something I will join him in urging on the Federal Reserve.

The community banks are the innocent victims overwhelmingly of this. They were regulated. They didn't make subprime loans. By the way, they were [Page: H10369]

the ones covered by CRA. The bad loans were made by the institutions not covered by the Community Reinvestment Act.

But the gentleman is right. These banks play a vital function that will be even more vital as other sources dry up, and I will work with him to try to get that kind of relief.

10:42 AM EDT

Lynn A. Westmoreland, R-GA 3rd

Mr. WESTMORELAND. I want to thank my friend from Alabama for yielding the time.

Madam Speaker, I've often said as I have stood up that when the process is broken, the product is flawed. And I appreciate all of the meetings that the chairman and ranking member and others have attended and the time that they have spent. There was only one hearing that I know of in the Financial Services Committee that was held before this bill, and that was to have Secretary Paulson and Chairman Bernanke come and testify. Those were the only two witnesses. And I'm not sure what alternatives

are out there, what the plans are for a free market, for capital infusion and not just buying these toxic assets.

And I think that's going to be the key to any plan working is the infusion of capital. But the process is broken because there was no markup on the bill. The bill was introduced about 24 hours ago. It's 106 pages. And as we saw earlier in the week with some of the tax extender bills and some of the other bills that were introduced early in the morning, brought to the floor early afternoon, had problems in it, having to recommit, redo the rules.

You cannot do this type of bailout of $700 billion without adequate hearings, without adequate testimony, without hearing other alternatives that can be injected into this that we could do some of the things as the net operating loss, how that can help a business. Doing away with the capital gains tax, the repatriation of money to come back into this country. The last time we did that, $350 billion came in.

These banks need cash. They need capital. They do not need somebody buying these assets when they still have mark-to-market. They still have accounting rules that don't allow them to have the amount of money they need to loan to small businesses and individuals to keep our economy going.

This is a rush. We need to defeat this bill.

10:45 AM EDT

Barney Frank, D-MA 4th

Mr. FRANK of Massachusetts. Madam Speaker, there's been reference in this debate to very good provisions that help community banks and others that are tax provisions.

I now want to recognize for 3 minutes the author of those, the chairman of the Committee on Ways and Means, the gentleman from New York (Mr. Rangel).

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

10:45 AM EDT

Charles B. Rangel, D-NY 15th

Mr. RANGEL. Madam Speaker, this is a serious issue for those of us in government. I don't know where the advocates of reduced government really are today.

[Time: 10:45]

The marketplace should work as well, and now we're asking the government to come in with close to $1 trillion in order to bail out the private sector.

The administration has come up with a proposal that, to me, reminds me of roulette, and they're challenging us to just take the bullets. As Chairman Frank has said so often, this is a no-win proposition because, in support of this--and I will be supporting it--no one is going to thank us for what they don't know and how serious it is, but I do know one thing, that those who have caused the problem somehow have managed to get away without any blame, without any penalty, and the crisis

now falls on the American people.

Well, for some people, it will be just an inconvenience. They'll sell a couple of houses; they'll get rid of some of their stocks, and they'll continue to game the system, but for the poor, they won't have these options since we live in a country and, indeed, in a world that is dependent on credit. So the poor will not be inconvenienced, but irreparable harm could be done to the dreams that it took so long for the middle income to achieve to be able to own a home, to be able to send their kids

to college, to be able to put food on the table, to clothe them, and to have the respect that the middle class in America has stood for for so long.

We have seen in recent months that this class of people has had their dreams dampened by the increase in gasoline prices, in health costs, in education to such an extent that the government just gave them a handout with $1,000 here and there to try to restore their dignity. Obviously, that didn't work. How is it that we couldn't find money to give them jobs? to create a fair and equitable tax system? to increase education? to increase health? to make certain that our infrastructure was conducive

of America's being competitive? No, it costs too much money.

Somehow, the conservatives in the other party can find an exposure to American taxpayers for close to $1 trillion, and not too long ago it was just another $300 billion. For war and for these types of things, we can always find the money, but to make certain that the underclass--the poor folks--and the middle class are able to get an investment in America and into their lives so that they can become more prosperous and can enjoy the dreams of America, we can't seem to find it.

So now we have the Secretary of the Treasury. We don't know where he goes after December, and we will forever have to staple him to whatever excuses we give for being frightened to death that he just might be right. It is wrong to do this to a country. It is wrong to do this to the Congress, but it just seems to me that I can't afford to take the risk.

I support the work of Barney Frank and of all those who work diligently to try to make certain that we don't allow the sky to fall on American's middle class and poor folks.

10:45 AM EDT

Charles B. Rangel, D-NY 15th

Mr. RANGEL. Madam Speaker, this is a serious issue for those of us in government. I don't know where the advocates of reduced government really are today.

[Time: 10:45]

The marketplace should work as well, and now we're asking the government to come in with close to $1 trillion in order to bail out the private sector.

The administration has come up with a proposal that, to me, reminds me of roulette, and they're challenging us to just take the bullets. As Chairman Frank has said so often, this is a no-win proposition because, in support of this--and I will be supporting it--no one is going to thank us for what they don't know and how serious it is, but I do know one thing, that those who have caused the problem somehow have managed to get away without any blame, without any penalty, and the crisis

now falls on the American people.

Well, for some people, it will be just an inconvenience. They'll sell a couple of houses; they'll get rid of some of their stocks, and they'll continue to game the system, but for the poor, they won't have these options since we live in a country and, indeed, in a world that is dependent on credit. So the poor will not be inconvenienced, but irreparable harm could be done to the dreams that it took so long for the middle income to achieve to be able to own a home, to be able to send their kids

to college, to be able to put food on the table, to clothe them, and to have the respect that the middle class in America has stood for for so long.

We have seen in recent months that this class of people has had their dreams dampened by the increase in gasoline prices, in health costs, in education to such an extent that the government just gave them a handout with $1,000 here and there to try to restore their dignity. Obviously, that didn't work. How is it that we couldn't find money to give them jobs? to create a fair and equitable tax system? to increase education? to increase health? to make certain that our infrastructure was conducive

of America's being competitive? No, it costs too much money.

Somehow, the conservatives in the other party can find an exposure to American taxpayers for close to $1 trillion, and not too long ago it was just another $300 billion. For war and for these types of things, we can always find the money, but to make certain that the underclass--the poor folks--and the middle class are able to get an investment in America and into their lives so that they can become more prosperous and can enjoy the dreams of America, we can't seem to find it.

So now we have the Secretary of the Treasury. We don't know where he goes after December, and we will forever have to staple him to whatever excuses we give for being frightened to death that he just might be right. It is wrong to do this to a country. It is wrong to do this to the Congress, but it just seems to me that I can't afford to take the risk.

I support the work of Barney Frank and of all those who work diligently to try to make certain that we don't allow the sky to fall on American's middle class and poor folks.

10:49 AM EDT

Ron Paul M.D., R-TX 14th

Mr. PAUL. Madam Speaker, I rise in strong opposition to this bill. This is only going to make the problem that much worse. The problem came about because we spent too much; we borrowed too much, and we printed too much money; we inflated too much, and we overregulated. This is all that this bill is about is more of the same.

So you can't solve the problem. We are looking at a symptom. We are looking at the collapsing of a market that was unstable. It was unstable because of the way it came about. It came about because of a monopoly control of money and credit by the Federal Reserve System, and that is a natural consequence of what happens when a Federal Reserve System creates too much credit.

Now, there have been a fair number of free market economists around who have predicted this would happen. Yet do we look to them for advice? No. We totally exclude them. We don't listen to them. We don't look at them. We look to the people who created the problem, and then we perpetuate the problem.

The most serious mistake that could be made here today is to blame free market capitalism for this problem. This has nothing to do with free market capitalism. This has to do with a managed economy, with an inflationary system, with corporatism, and with a special interest system. It has nothing to do with the failure of free markets and capitalism. Yet we're resorting now, once again, to promoting more and more government.

Long term, this is disastrous because of everything we're doing here and because of everything we've done for 6 months. We've already pumped in $700 billion. Here is another $700 billion. This is going to destroy the dollar. That's what you should be concerned about. Yes, Wall Street is in trouble. There are a lot of problems, and if we don't vote for this, there are going to be problems. Believe me: If you destroy the dollar, you're going to destroy a worldwide economy, and that's what we're

on the verge of doing, and it is inevitable, if we continue this, that that's what's going to happen. It's [Page: H10370]

going to be a lot more serious than what we're dealing with today.

We need to get our house in order. We need more oversight--that is a certainty--but we need oversight of the Federal Reserve System, of the Exchange Stabilization Fund and of the President's Working Group on Financial Markets. Find out what they're doing. How much have they been meddling in the market?

What we're doing today is going to make things much worse.

10:51 AM EDT

Barbara Lee, D-CA 9th

Ms. LEE. Let me thank Chairman Frank for your efforts to improve this administration's $700 billion blank check bill.

Madam Speaker, as a former member of the House Financial Services Committee for 8 years, I can tell you that the situation that we find ourselves in today is the direct result of the deregulation-happy, turn-a-blind-eye approach of this administration and its allies in Congress.

Now we see the horrific price of these reckless deregulation policies. More than 600,000 Americans have lost their jobs since January. People need jobs to obtain credit, to pay their rent, to pay their house notes, to buy a 401(k) or to really have a retirement account. Millions of people are living paycheck to paycheck if they really have a paycheck. Home foreclosures are skyrocketing; home values are plunging; banks are failing, and we are still spending more than $10 billion every month on

a war in Iraq that did not have to be waged.

So I'm convinced that this bailout is not the solution to this mess. It does little to address the underlying problem--the foreclosure crisis. We need a moratorium on foreclosures, and we need bankruptcy reform to help people stay in their homes. This bill should be paid for by the high-flying industry that created this problem. $700 billion should not be given to Wall Street and to the Bush administration unless those who caused this mess pay for it.

As my bill indicates, the Income Equity Act, we should also prohibit the tax deductibility of executive compensation in any company where the highest paid corporate officer's compensation exceeds by 25-1 that of a worker's of the lowest wage.

Third, we need an economic stimulus package to deal with the crushing reality of the recession that is hitting people hard each and every day. I cannot vote to reward those predatory and subprime lenders who are really creating havoc in the lives of millions of Americans. There has got to be a better way.

10:54 AM EDT

Tom Davis, R-VA 11th

Mr. DAVIS of Virginia. Madam Speaker, I wish there were a better way, but I haven't seen it yet, and I think this is a good bipartisan work product. It is a difficult vote for all of us. Either we're promoting unprecedented Federal interference in the marketplace or we're bailing out Wall Street millionaires and are rewarding bad business decisions. There's a grain of truth in all of this, but it's also true that this doesn't address some of the fundamental problems with our current economic

slowdown.

This helps, on the margin, the housing situation. It will allow some people to renegotiate in a better posture, but it doesn't solve the rising unemployment and the rising deficits and the falling dollar, but it's also true that with credit drying up and with the failure of the mortgage banks and banks that the failure to act would bring even greater economic devastation.

We saw the future a couple of weeks ago: Markets plunged. Lehman Brothers failed. AIG, Freddie and Fannie needed bailouts. Credit virtually disappeared across the spectrum. We have to take economic recovery one step at a time. If there is no credit, nothing else matters. Failure to take this step today will almost certainly worsen the situation, perhaps beyond repair.

This is a compromise. There is a lot not to like. We could pick this bill to death on both sides of the aisle. We could play the blame game forever, but politics is the art of the possible, not the art of the perfect. If this bill goes down, I don't think most of my colleagues want ownership of what's going to follow. I'm hopeful that some of the money that we're putting forward will be returned to taxpayers eventually, but there are no guarantees, but doing nothing or delaying this indefinitely

is not a viable option. [Page: H10371]

I urge my colleagues to show leadership and to take the tough vote and vote ``yes.''

10:55 AM EDT

Barney Frank, D-MA 4th

Mr. FRANK of Massachusetts. Madam Speaker, I now yield 4 minutes to the very able Chair of our Capital Markets Subcommittee, a man who has played a very important role in our trying to stabilize this situation, the gentleman from Pennsylvania (Mr. Kanjorski).

10:55 AM EDT

Barney Frank, D-MA 4th

Mr. FRANK of Massachusetts. Madam Speaker, I now yield 4 minutes to the very able Chair of our Capital Markets Subcommittee, a man who has played a very important role in our trying to stabilize this situation, the gentleman from Pennsylvania (Mr. Kanjorski).

10:56 AM EDT

Paul E. Kanjorski, D-PA 11th

Mr. KANJORSKI. Mr. Chairman, if I may just make a comment in the beginning here and ask you the question:

Is it correct to say that nothing in this act is meant to distract from any rights of recovery against private parties to redress wrongdoing that exists under Federal or State law?

10:56 AM EDT

Paul E. Kanjorski, D-PA 11th

Mr. KANJORSKI. Mr. Chairman, if I may just make a comment in the beginning here and ask you the question:

Is it correct to say that nothing in this act is meant to distract from any rights of recovery against private parties to redress wrongdoing that exists under Federal or State law?

10:56 AM EDT

Paul E. Kanjorski, D-PA 11th

Mr. KANJORSKI. Thank you, Mr. Chairman.

Madam Speaker, I rise today with a heavy heart. The reality is, as my friend from Virginia (Mr. Davis) said, we don't have a perfect bill here. We do have a perfect storm, however, and we have a bad situation. The inaction, or the failure to act, could be exacerbating to this situation to the extent that most of us can't even imagine how bad it could get.

I'm not here in defense of Wall Street fat cats nor am I here in defense of those who perpetrated this greed and this expansion over the last 5 to 7 years that has caused this problem. I'm not here as a faultfinder of who is responsible politically, economically, socially or otherwise.

I am here because I recognize that there is going to be hurt, extreme hurt, if we do nothing, and I want to make sure that my constituents and that the rest of the public watching this understand that we're not bailing someone out in a far-off place called Wall Street. We're making sure that next week and that next month a worker in my hometown of Nanticoke, Pennsylvania will be able to go to his ATM machine and draw out money, that he will be able to be paid by a check or by a cash transfer

that will give money to his account so that he can spend it on his family. I'm here so that he can continue to negotiate to buy a new home or a used home or so that he can provide for his family goods or services that are necessary and that may disappear.

So often, many of us get so far removed from history and from circumstances of the past that we hardly remember or recall what people told us could be. I think it would be a good thing for all of us to refer back to some of the movies that depicted the Great Depression and for all of us to just look at what can happen when there is the total collapse and failure of an economic system. I don't want to see that happen again in America.

In order to see that that does not happen, it is necessary that we take action on this bill. This is not an easy vote for any Member in this Chamber, and I will be the last one who will cast dispersions as to what the motivations for voting ``yes'' or ``no'' will be by my fellow Members. However, I will tell you this:

It is time for all good men to come to the defense of their country and to the times. In my opinion, that means we must put aside our own personal careers and our own personal thoughts and even our own ideas of what would be the right thing and vote to save this country's economic system. If we fail to do this in this 11th hour, we are already starting to see around the world, through the window of television, just what can happen to the markets of this world and, eventually, to all of the small

towns across this world.

[Time: 11:00]

I think that we've done a hard job in trying to put into this bill the safeguards for the taxpayers, the modifications that are necessary. It was an extreme bill, three and a half pages, giving total dictatorial power to the Secretary Treasurer.

11:00 AM EDT

Paul E. Kanjorski, D-PA 11th

Mr. KANJORSKI. We have modified it over these last 7 to 10 days to make it more livable, but not perfect. What I urge my colleagues to do is put aside partisanship, put aside fear, and realize why we're here. Only a couple of times in a decade are we asked to stand up and be counted; this is one of those historic moments. I urge my colleagues to show the fortitude to vote ``yes.''

11:01 AM EDT

Virgil H. Goode Jr., R-VA 5th

Mr. GOODE. Madam Speaker, first, I want to thank all who have worked on this measure; but I do regret that Ranking Member Bachus did not have greater opportunity for more input.

I will be voting ``no'' on this measure because this is a Band-aid approach that will not save America. We need to infuse capital into our banking system and not more Federal debt. Federal debt is not the way to go.

We also must look at the fundamental cause of encouraging those who have little chance to repay to get loans. Over-encouragement was a fundamental cause, and it is not addressed in this bill.

I hope we will vote ``no'' for a better day and a better bill.

11:02 AM EDT

Carolyn McCarthy, D-NY 4th

Mrs. McCARTHY of New York. Madam Speaker, I rise today in support of the Emergency Economic Stabilization Act of 2008.

In the past couple of weeks we have seen many Americans wondering what's going on; what's going on with our economy; what is going on down in Washington. People have watched anxiously as the markets and the banks have stumbled and many of us have seen investments that we spent years building up now disappearing within days.

Within only a couple of days, some of the world's largest financial institutions shut their doors and the U.S. Treasury Secretary had begun talks with Congress in an effort to avoid a potential collapse of our economy.

In recent days, we have seen and heard a variety of proposals to address the financial crisis. Americans have rightly been disturbed by the idea that Congress would bail out Wall Street and CEOs, but we also know that we could not just stand by and watch our economy crumble.

People needed to know that Congress was acting in their best interests and that their hard-earned money is going to be safer. We needed to make sure that not only was Wall Street going to remain solvent, but so was all our small towns and villages across this country.

We also needed to make sure that every proposal we put forward would protect those Americans who were hoping to retire within this year or next year so they don't lose their savings they need to live on.

I am pleased that we have been able to come up with a comprehensive package that strikes a fair balance and can potentially offer the relief we need to restore confidence in the markets. Both sides certainly don't like what's been put in front of us to have us in this position, but both sides, both leaders of our political parties have worked together--BARNEY FRANK, Mr. Bachus, Mr. Boehner, Roy Blunt, Nancy Pelosi.

This is a crisis that is facing our country. And I know it's a tough vote, especially right before an election. This might cost some of us our election, but that's why we're here, we're here to certainly protect the American people. I'm here to protect my constituents back home, making sure that they have jobs in the next coming months.

We have to make sure this bill passes.

11:05 AM EDT

Christopher Shays, R-CT 4th

Mr. SHAYS. Most of my constituents consider this a bailout. Some of them, in fact, are willing to walk bread lines in order to see wealthy Wall Street tycoons pay for their greed. The fact is, that would be irresponsible.

While this is not 1929 all over again, it could be if we step aside and let the wonders of the market work its will in this environment. We can't let the foolishness and greed on Wall Street bring down Main Street; at least I don't intend to.

We are witnessing the economy coming to a grinding halt. Money is simply not being lent to individuals who need it. For businesses, this has meant an inability to borrow, to expand, invest in new equipment, stock shelves, or even meet short-term cash needs, such as payroll. For individuals, it has [Page: H10374]

threatened the assets of everyone who has an IRA or 401(k), college savings, pension plans, or owns a home.

It has been difficult for me to hear so many Members act like they were not responsible for this credit crisis when they had the opportunity to advocate reform or at least support it, but chose not to.

We will have plenty of time to determine what went wrong and what individuals and institutions are responsible, but this is not the day or time to focus on who is at fault and what systemic changes need to be made.

I recognize today's liquidity injection is a short-term solution to a long-term systemic problem. Those of us who return--and I make no assumptions about my own election--have our work cut out for us in the next Congress.

I will vote for the Emergency Economic Stabilization Act and thank my colleagues in both Chambers, and on both sides of the aisle, for their bipartisan effort to avert a more serious economic crisis.

I believe the negotiators have worked in good faith, but we all have lingering questions. My own continue to be whether $700 billion is actually enough; why we aren't increasing FDIC insurance above $100,000 so deposits don't withdraw their funds, and why we aren't addressing directly the capital markets problem like we did in the early 1980s.

I believe this legislation will address the short-term liquidity problem. And in the end, I believe taxpayers, at a minimum, will be held harmless, or even see a positive return on this expenditure.

If this bill passes and puts liquidity in the market like we hope, we should be given the time we need to make some long-term changes.

I urge my colleagues to carefully weigh the effects of action, or inaction, and allow this solution not only to pass, but to work.

11:07 AM EDT

Barney Frank, D-MA 4th

Mr. FRANK of Massachusetts. Madam Speaker, I yield 2 minutes to the Representative from one of our great urban quarters, the gentleman from Philadelphia, Mr. Fattah.

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

11:08 AM EDT

Chaka Fattah, D-PA 2nd

Mr. FATTAH. Madam Speaker, I rise in support of this bill. Now, I know that we're tempted to see this just as another train wreck of the Bush administration, but we have to look past that to protecting the jobs of our constituents, their 401ks, their pension funds, their ability to own and run and borrow to establish small businesses. We have to see this as a responsibility to protect community banking institutions.

Now, there is a lot at stake in this vote, and there are Members who have varying positions, but I just look at the facts. We have some 9,800 people who are being foreclosed on every day. We have seen 600,000 people lose their jobs since the beginning of this year. We have an economic catastrophe that has taken place on Wall Street and is now showing up in other financial capitals around the world.

We have a responsibility to defend this country and to stand on behalf of our constituents. And I do that reluctantly in some respects, but on this day, I think all of us should rise to the occasion and support this bill. And with those who can't, we understand that you think that there should be a better way. There is a bill in front of us today to stand in the breach, and I stand in favor of it. And I commend BARNEY FRANK for his leadership on it. Thank you.

11:10 AM EDT

Ted Poe, R-TX 2nd

Mr. POE. I thank the gentleman for yielding.

Madam Speaker, because Wall Street money grabbers have made bad judgment calls, the American taxpayer is being forced to bail them out at $700 billion. Why is it, Madam Speaker, that the bigger the business, the more the Federal Government thinks it should swoop in and save incompetent businesses? Small businesses, mom and pop grocery stores, don't get this break. When they make bad financial decisions, they go out of business. But the rich and famous Wall Street New York City fat cats expect

Joe Six-Pack to buck it up and pay for all this nonsense.

Reward people for being irresponsible and expect responsible people to pay for the sins of the financial industry? I think not. Putting a financial gun to the head of each American is not the answer.

Madam Speaker, I have this bill; it's over 100 pages long. That means it's seven billion dollars a page. The New York City fat cats expect us to pay for it. I think not.

This year alone, Madam Speaker, it's a sad time to be an American taxpayer. Here's Uncle Sam, all beat up because he's broke, and the reason is we have paid out Bear Stearns, a bailout, $28 billion, Fannie Mae and Freddie Mac, $200 billion, AIG bailout, $85 billion. Last week, the automobile industry got $26 billion. And today, lo and behold, $700 billion.

The American taxpayer is tired of paying for the sins of other people. It's time for them to pay and be responsible for their own misconduct.

And that's just the way it is.

11:11 AM EDT

Barney Frank, D-MA 4th

Mr. FRANK of Massachusetts. Madam Speaker, while I believe the gentleman is a little bit too harsh on the Bush administration, I understand his point of view.

Madam Speaker, I now yield to the gentleman from Michigan, the dean of the House, for purposes of a colloquy.

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

11:12 AM EDT

John D. Dingell Jr., D-MI 15th

Mr. DINGELL. Madam Speaker, I want to commend the distinguished gentleman from Massachusetts for the outstanding job he and the leadership have done on crafting this legislation. They took a bad piece of legislation and they have significantly improved it to make it much better.

I rise to support the legislation. And I would like to engage in a colloquy with my dear friend, Mr. Frank. I would note that the colloquy is an important one.

Madam Speaker, the automobile manufacturers face the most difficult conditions they've faced in decades. We need to do something to help unfreeze the credit markets that are hurting our industry.

As I read the legislation, the Secretary has the authority to purchase from a motor vehicle finance company traditional car loans and mortgage-related paper, such as a home equity loan used to purchase cars or trucks. Is my interpretation correct?

I yield to my good friend.

11:13 AM EDT

Barney Frank, D-MA 4th

Mr. FRANK of Massachusetts. I thank the gentleman, who comes to us with great authority here because of having chaired the committee for years and had some of this jurisdiction, and having been right when other people were resistant, he speaks with a great deal of credibility. And the answer to his question is, yes, it does require that there be consultation with the Chairman of the Federal Reserve, but the Treasury Secretary is empowered to do exactly that.

And I would add, as the gentleman knows, in my judgment, one of the major areas of damage we will see if this bill fails is that we will start to see a real contraction in credit for automobiles. So the automobile makers and the people who sell automobiles will all be hurt. And the answer is yes to the gentleman's question.

11:13 AM EDT

John D. Dingell Jr., D-MI 15th

Mr. DINGELL. I have an additional question to my dear friend. If the Federal Reserve Board were to use the authority it has to address extraordinary circumstances in the credit market, motor vehicle companies would have access to capital that would help them to finance dealer floor plans and to make consumer loans. Am I correct in this? And would my good friend support such a decision by the Federal Reserve Bank to make funds available as long as these companies face unusual and extraordinary

market conditions?

11:14 AM EDT

Barney Frank, D-MA 4th

Mr. FRANK of Massachusetts. If the gentleman would yield, yes. Again, that is well within the legal authority that this Federal Reserve Chair has described to us that he has under the statute from the Depression.

And given the centrality of the automobile industry--and we're talking, I want to again stress, not just making cars, but selling them and servicing them and repairing them, and of course providing great mobility to the American people. Clearly, this a worthy subject for the Federal Reserve to intervene with, when appropriate.

11:14 AM EDT

John D. Dingell Jr., D-MI 15th

Mr. DINGELL. Madam Speaker, I want to thank my good friend, the [Page: H10375]

chairman of the subcommittee. He has worked very hard on an extremely difficult subject, and has perfected a very difficult piece of legislation in a remarkable way. The House and the country owe the gentleman a great debt.

11:14 AM EDT

Barney Frank, D-MA 4th

Mr. FRANK of Massachusetts. If the gentleman would yield, that would mean a great deal to me coming from anyone, but from the gentleman from Michigan, with his long record here in these areas, it means a particularly great deal.

11:15 AM EDT

Judy Biggert, R-IL 13th

Mrs. BIGGERT. I thank the gentleman for yielding.

Madam Speaker, I rise today in reluctant opposition to this massive bailout of Wall Street. I understand why many of my colleagues are inclined to support it; the urge to act now and do something--anything--to restore investor confidence is very compelling.

[Time: 11:15]

Our economy faces great risks, and I agree wholeheartedly that the government must intervene in some way to restore stability. But the plan that we are considering today is not what my constituents want, it's not what's best for the average American taxpayer, and it's not what's best for this economy.

As a member of the working group assigned by GOP Leader BOEHNER to explore alternatives to a massive taxpayer-funded bailout, I was very pleased this weekend when we were able to develop a very realistic, workable alternative option to shore up these mortgage-backed securities. We took a long, hard look at the market and saw that a government-backed insurance plan could go a long way toward returning market value to many of these assets. It would address the market's aversion to these

investments, and it would be entirely funded by risk-based premiums leveled on the holders of the assets, not taxpayers.

Our premise for this plan was and remains that Wall Street should pay for Wall Street's mistake. [Page: H10376]

In addition, we outlined a tax proposal that would have injected billions into the private market, restoring liquidity and credit available on Main Street America. By temporarily removing the disincentive to repatriate, or bring back to America, profits made by American companies overseas, we could open the floodgates of capital into our marketplace.

These are ideas that can work. But instead leaders have only agreed to attach a watered-down version of the insurance proposal to the same $700 billion bailout that the administration originally proposed. It creates an insurance purchase option for financial firms but then offers them the alternative of free taxpayer money. I wonder which one they will take?

I'm very pleased that this plan has been improved over the past few days, especially the provisions limiting golden parachutes and allowing the public to share in the profits that may be made. But I am not convinced that we have taken the time to really come up with a strategy that truly protects the taxpayers.

Let's take another look. Maybe we should start over. We discussed looking at the S and L crisis. The administration discounted that. Let's go back and look at the FDIC and doing away with mark to marketing. Instead of banks using fair value accounting, the SEC should use true value, giving immediate positive impact on the financial industry.

Madam Speaker, we can and should do better. Main Street Americans deserve no less.

11:18 AM EDT

Peter A. DeFazio, D-OR 4th

Mr. DeFAZIO. I thank the gentleman for yielding.

Madam Speaker, we started here a week ago with the Paulson plan. It was simple: Give him the keys to the Treasury and suspend all the laws. What we are doing, or proposing here today, is infinitely better, and the Democrats have labored hard to put in taxpayer protections and provide consequences for Wall Street executives.

But what we consider today is still built on the Paulson-Bush premise; that is, President Bush and his Treasury Secretary, Mr. Paulson, say that dumping $700 billion of taxpayer-financed debt--we'll borrow the money--on top of Wall Street and buying up Wall Street's bad debts will solve the liquidity problem. It will trickle down through the economy to benefit small business. It will solve the underlying problem with the housing market, and it will stem job loss.

I don't buy it. There are less expensive, less risky, targeted regulatory reforms and programs that could work better.

But bottom line, President George Bush and his Treasury Secretary, Henry Paulson, insisted on a top-down Wall Street bailout solution. It's sort of like the financial surge strategy. And just like the surge in Iraq, as we go into it at the outset, we know it's not sustainable and we know it won't solve the underlying problems.

Even worse, President Bush and Secretary Paulson and the Republicans insisted upon watering down the most critical portions of the bill. There is no mandatory way to pay for this bailout, no fee, no tax, just a proposal from a future President to a Congress that a Congress might think about to help take taxpayers off the hook. That's not protection. The golden parachutes, yes, they were exchanged for camouflaged parachutes. The execs on Wall Street are still going to get millions. Look at the

loopholes there. We have added back in, at the insistence of the Secretary, credit card debt, auto loans.

We can do better. We should start again on a new package, come back next week.

11:21 AM EDT

Darrell Issa, R-CA 49th

Mr. ISSA. Madam Speaker, I rise in opposition to this bill.

I am resolute in my opposition, not because it was easy to vote against your President, but our President and his administration are wrong. And if we vote here today for this bill, it is truly the end of the Reagan era.

It's the end of the Reagan era because, in fact, under Ronald Reagan's time, we dealt with similar problems, a huge financial problem, and we worked our way out of it without unnecessarily buying assets. We closed institutions but we also saved institutions.

Madam Speaker, my Governor often says, ``I'll be back.'' Madam Speaker, I have no doubt I'll be back, and I have no doubt that we will be trying to fix the problems next year that we don't fix here today. The mark-to-market problem, which Secretary Paulson has refused to deal with, in fact, in his own bill is very clearly being denounced. He is raising the price of the assets we buy above mark-to-market while refusing to have the other assets allowed to be flowed to their true value. By definition

today we are picking winners and losers in assets rather than going to creditworthy companies and helping them get the capital they need so they can make loans to men and women and companies and entrepreneurs out there who desperately need it to grow our economy.

Madam Speaker, we are deleveraging the very capital and the very enterprises we need to date. GE Capital has said they are openly deleveraging. Why? Because that's the signal we're sending. We are collapsing this country into, in fact, a recession at a time in which the Ronald Reagan policy would be to expand opportunity, to find ways to give people who have great ideas an opportunity to reinvent America.

So today we are ending the Reagan era if we vote for this, and if we can't come back and fix it next year, we will have permanently put a coffin on top of the coffin of Ronald Reagan.

11:23 AM EDT

Barney Frank, D-MA 4th

Mr. FRANK of Massachusetts. Madam Speaker, no one in this House has done more to fight for affordable housing and to prevent foreclosures and no one has had more of an impact and is trying within this bill to do the maximum that political constraints allow. So I now recognize for 3 minutes the Chair of the Housing Subcommittee, the gentlewoman from California (Ms. Waters).

11:23 AM EDT

Maxine Waters, D-CA 35th

Ms. WATERS. First, I would like to thank BARNEY FRANK for his extraordinary work, accepting the impossible task of making sense of the economic crisis we are facing.

Madam Speaker, $700 billion is a lot of money. Bailout for Wall Street? I don't think so. I could care less about Wall Street and the high-priced schemers and their tricky products: hedge funds, short selling, and insider trading. I care about Main Street and Martin Luther King, Jr. Drive.

I am voting ``yes'' on this bill because this $700 billion will purchase the nonperforming loans, the bad debt, and the toxic paper which, if left to the market, could cause the greatest financial crisis our country has ever seen. These nonperforming loans represent people, real Americans in trouble. Yes, some got in over their heads. They contracted for mortgages they could not afford. But many Americans are the victims of predatory lending, suckered into adjustable rate mortgages that lured

them with a low interest rate, no down payment, or no documentation loans that adjusted or reset within 6 months, 1 year, 2 years, or 3 years. Homeowners were not always told the truth. Upon reset, homeowners were then faced with mortgages that doubled, tripled, or quadrupled with the new interest rates and the margins that were added to the existing interest rates.

There's enough blame to go around. Greed, a regulatory system that turned a blind eye to these exotic schemes and products, brokers and banks who peddled these products, and investment banks who invested in these products all share some of the blame. We must correct the problems caused by these loans. We must modify these loans and stop the foreclosures and help American families keep their homes. We must reform our Federal regulatory agencies and never allow this subprime exploitation to occur

again.

Today we have financial institutions that will fail if we do not act. Credit will dry up for home mortgages, auto purchases, student loans, and small businesses. More jobs will be lost and the economy will crash.

I would have preferred to have a strong bankruptcy provision in this bill, giving Americans a real option to work themselves out of debt. I would have also liked to have seen a provision [Page: H10377]

providing a substantial fee to Wall Street firms that participate in this program. But, unfortunately, there was not the support or political will to get these things done.

I have worked on this bill to strengthen the ability for the servicers who collect those mortgage payments and fees to modify these loans. I have worked to assist small regional and minority banks. I have included language to open up the ability for women and minorities to participate in asset management and all the other business opportunities, including opportunities for the newspapers, ad agencies, consulting firms, real estate professionals, legal services, financial managers, and information

systems consulting services that will be created as we use these funds to clean up this mess.

11:27 AM EDT

Maxine Waters, D-CA 35th

Ms. WATERS. Madam Speaker, I am also pleased that the bill creates a Financial Stability Oversight Board to oversee the work that is to be done in this Emergency Economic Stabilization Act of 2008.

Finally, I cannot take the chance that people who have worked all of their lives to save for their retirement will lose their pension funds and 401(k) savings nor can I take the chance that the stock market will be weakened and Americans will lose their investments. There will be many who will say ``I don't believe the average person will be hurt if we do not act.'' I refuse to take that chance. Today we do what we truly believe must be done. But believe me, we must and we will tighten the screws

on Wall Street. This bill will support the idea that we must get rid of these outrageous compensation packages for CEOs and executives. We must prosecute those who violate the law and ignore their responsibilities.

Today I vote ``yes,'' but there is much more to be done. We must never again allow the risk to our economy that's been created by greed to ever occur again.

11:28 AM EDT

Scott Garrett, R-NJ 5th

Mr. GARRETT of New Jersey. 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.

[Time: 11:30]

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.

11:30 AM EDT

Barney Frank, D-MA 4th

Mr. FRANK of Massachusetts. Madam Speaker, I yield myself 30 seconds to correct an egregious misrepresentation of history.

The gentleman just said that the Democratic leadership, I'm sorry, he said the Democrat leadership, I wouldn't want to misquote his adjective. He said the Democrat leadership, a point of great rhetorical significance to the large-minded on the other side, says that the Democrats fought GSE reform.

The Republicans controlled this Congress from 1995 to 2006. No bill passing GSE reform went through. The Democrats took over in 2007. Within a couple of months this House, 4 months, this House passed----

11:32 AM EDT

John Tanner, D-TN 8th

Mr. TANNER. I thank the chairman for yielding. And I know if anybody has been keeping up with this weekend, I know that they realize and understand that this is not an ordinary time. I believe personally we are here because in this decade we have witnessed financial mismanagement and regulatory neglect which leads us to this morning.

Unfortunately, when the Secretary of the Treasury came over and we looked at the proposal, or the bare bones of the proposal, it appeared to some of us that it was all about private gain and public risk. And that was unacceptable for the taxpayers to take the risk to help those referred to as Wall Street.

So I have been asked to talk about this recoupment clause, section 134 of the bill, that was finally accepted in negotiations. It says the following: ``Upon the expiration of the 5-year period beginning upon the date of enactment of this Act, the Director of the Office of Management and Budget, in consultation with the Director of the Congressional Budget Office, shall submit a report to the Congress on the net amount within the Troubled Asset Relief Program''--this bill. ``In any case there

is a shortfall, the President shall submit a legislative proposal that recoups from the financial industry an amount equal to the shortfall in order to ensure that the Troubled Asset Relief Program does not add to the deficit or national debt.''

What this means is we have taken away the private gain-public risk aspects of this act and made sure that the people who are eligible to participate in it will pay back to the Treasury any shortfall that may occur at the end of the program.

With this section 134, it is my opinion that this is no longer about Wall Street. This is about the IRAs, the 401(k)s, the pension plans that all American citizens have and that all State governments have at stake in their pension programs. This is no longer, then, about bailing out anyone. It is about trying to put together a plan that will do less harm than we would do otherwise by our inaction to every American citizen's financial security, IRA, 401(k) pension programs.

If we have, as Chairman Bernanke, Secretary Paulson, the President and others has said, a colossal or a catastrophic situation happen because of our inaction, it's not going to be Wall Street; it's going to be the 401(k)s, the IRAs and the pension plans that all of us share.

11:35 AM EDT

Jeff Miller, R-FL 1st

Mr. MILLER of Florida. Madam Speaker, almost 2 weeks ago, Secretary Henry Paulson came to this Congress requesting $700 billion of taxpayer money for his friends and former colleagues on Wall Street. The former chairman of the investment bank of Goldman Sachs also asked this Congress to pass a law ensuring that his actions ``are nonreviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.''

The Founders of this great Nation set up an ingenious system of government to ensure that power was not disproportionately given to any one individual. The goal was to avoid tyranny, to avoid tyranny at all costs. But Secretary Paulson most likely skipped class that day and was hoping that we had as well. Many wonder how such a poorly constructed piece of legislation could even come to the Congress in the first place. And I wonder how our President approved this as well.

By demanding this bailout money, the administration attempted to circumvent the legislative process. Moreover, the administration continues to insist that their way is the only way to avoid an imminent crisis.

And perhaps most stunning is that the administration officials that are responsible for protecting American taxpayers and our free-market system were asleep at the switch. Securities and Exchange Commission Chairman Chris Cox recently admitted his culpability in this matter and amazingly, the Secretary of the Treasury recently admitted he had seen this crisis coming for almost a year and just now has come to our Congress.

Such large-scale government interference in our government ensures that the correction process will take much longer. And what would help toward long-term stability is an injection of private capital, private capital into our economy. We need to lower tax rates on capital gains and corporate income, allowing people to invest more of their money and relieving American companies from one of the highest corporate tax rates in the world.

The Democrats didn't care to address the capital gains tax issue. And in fact their response to the administration's bailout plan was just as bad.

11:37 AM EDT

Jeff Miller, R-FL 1st

Mr. MILLER of Florida. The plan was just as bad.

I can tell you that an overwhelming majority of my constituents have called, e-mailed and written to my office stating their outright opposition to any sort of bailout. The American taxpayer deserves better than what we are getting here today. And we must not sacrifice long-term freedom for short-term financial gain.

11:37 AM EDT

Barney Frank, D-MA 4th

Mr. FRANK of Massachusetts. Madam Speaker, I yield myself 15 seconds. On page 58 the gentleman was right to object to the provision in the original bill sent to us by the Secretary exempting him from judicial review. We have disexempted him. If Members will look at page 58, he is now subject to appropriate judicial review.

I now yield 2 minutes to the gentleman from Minnesota.

11:38 AM EDT

James L. Oberstar, D-MN 8th

Mr. OBERSTAR. Madam Speaker, I thank the chairman for the time. We've been here before at this precipice, looking into the abyss of uncertainty--of Lockheed, of New York City's financial crisis, of Chrysler and of post-9/11 airlines, perhaps not all of us personally, but we, this body. And in each of those cases where great uncertainty shadowed over this body, we found a way to make the right decision. And in each of those cases, the government was called upon, the Federal Government, to help

the private sector, or in the case of New York City, the city, and through it, the private sector.

And in each case, our good judgment was rewarded. Lockheed paid off its loan. Chrysler paid off its securitized loan from the Federal Government with interest. The New York City financial crisis was not limited to New York. It spread into every State of this country. And we saved each hometown bank by coming to the rescue of New York City.

And I stood here in the well of this House with the gentleman from Alaska (Mr. Young), then the chairman of the Committee on Transportation and Infrastructure, to ask this body to look over the horizon to what would happen on Monday if on Friday we didn't propose to rescue the airlines who had been shut down by the Federal Government in a national security interest and provide loan guarantees.

And while it stumbled, the proposal stumbled and faltered that evening, it was a commitment to come back the following week and to do it and to do the right thing. And in those negotiations, I remember very well Speaker Hastert.

11:40 AM EDT

James L. Oberstar, D-MN 8th

Mr. OBERSTAR. I remember Speaker Hastert saying, no, this is the right thing. We have to do it.

We are again at that point. Chairman Frank has crafted an extraordinarily talented proposal that protects the public interest. And once again, we have to do it.

11:41 AM EDT

Jeff Flake, R-AZ 6th

Mr. FLAKE. Mr. Speaker, I rise today in opposition to this bailout not because I don't believe we face financial crisis in this country. I rise in opposition to this bailout because I know we are in a financial crisis, one that will be prolonged with this legislation.

The premise of this unprecedented government intervention is that the free market has failed and that government must come to its rescue.

In reality, the crisis we now face is a result of government intervention in the market. We are in this predicament largely because implicit, and eventually explicit, Federal guarantees in Fannie Mae and Freddie Mac shielded the financial services sector from market discipline.

Madam Speaker, those who believe that they can control and direct the market's invisible hand will eventually be slapped by it. That is the painful and embarrassing situation we find ourselves in today. We don't have enough money in the Federal Treasury, nor can we responsibly borrow enough money, to keep the market from finding its natural bottom.

Now is the time to act on the free market principles we profess to believe in. Let's vote down this bill and instead pass legislation that is consistent with those principles.

11:42 AM EDT

Earl Blumenauer, D-OR 3rd

Mr. BLUMENAUER. I appreciate the gentleman's courtesy as I credit his mastery for bringing this bill before us today. Thanks to his leadership, the leadership of Speaker Pelosi, and the cooperation of the Republicans, it is a far better bill.

But, unfortunately, this is not likely to be the end of the bubbles. We must with our actions be extraordinarily careful if we don't want to compromise the next rescue. Remember Long-Term Capital Management, the hedge fund? What happens if the hedge fund industry is next? The article in today's New York Times wasn't very comforting. Any real rescue must include bankruptcy equality for homeowners. This is not just a moral issue. Fairness to our Nation's homeowners is the key to stabilizing home

values currently in free fall.

We cannot continue to bail out failing industries with borrowed money. No bill should be enacted without a payback from the financial services sector to be rescued, not merely a hint of a promise to pay back in 5 years. At the core, we are ignoring the fundamental question about the size and scale of the financial services industry in trouble not just because of a lack of regulation, but because we had too many people pursuing unsustainable business practices.

We have seen change from an irresponsible White House proposal into a responsible bill. But it's not as good as it should be. And sadly, may be besides the point if more bubbles explode.

I will vote ``no,'' reluctantly hoping I am wrong, but fearing that I am right.

11:44 AM EDT

Louie Gohmert Jr., R-TX 1st

Mr. GOHMERT. Madam Speaker, we've heard a number of comments about we've just got to bite the bullet [Page: H10379]

and do this. We heard the same things about let's bail out Fannie Mae and Freddie Mac. We've got to take this one step. And then we heard from the former chairman of the FDIC, guys, you don't realize, if you do this, you are going to start the dominoes falling.

People have talked about this precipice.

Making this vote, passing this bill is jumping into the precipice because next we have got to come bail out the community banks that are doing just fine. If we would allow the banks to value these mortgage-based securities at the very value Paulson wants to take taxpayer money and buy them, they would be okay. Washington Mutual wouldn't have failed. We hear about we did the right thing with Chrysler and New York. Those were loans. This is putting the government in the position of buying all these

things.

And as the FDIC former Chair said, when the Federal Government buys them, they immediately become worth less. That is the way it is. That is the way it will be.

And nobody seems to ask, who is it that is going to manage these assets? I have been asking. And finally the answer I got was, well, of course, we're going to have to outsource that.

You're going to outsource it to the very people that caused the problem. We're going to give them billions for assets they have mismanaged. And then we're going to hire them to manage those assets.

Please, please don't betray this Nation's great history. The committees used to do good work and ferret this stuff out.

[Time: 11:45]

They haven't been allowed to do their work, or they would have done a better job. Let the committees do the work. Let's get a better bill, and save America from Congress hurting it by jumping off this precipice.

11:46 AM EDT

Carolyn Cheeks Kilpatrick, D-MI 13th

Ms. KILPATRICK. Madam Speaker, I have the highest respect for my chairman, BARNEY FRANK, and your genius, thank you very much, as well as Speaker Pelosi for her leadership.

A week ago today we were sent a three-page bill, $700 billion, send it back to us and never ask us any questions. I am proud that the chairman and Speaker and leadership on both sides of the aisle have come to some agreement.

Contrary to popular belief, our financial crisis was not due to just people who couldn't afford the loans. It was Wall Street's problem, the people who managed this process over the years, with a lack of regulation from this administration. It was also predatory lending, lending from predators, banks in many instances, the very people we are going to give the money to, who took the loans, who made the loans, and didn't require the proper oversight. It is not the little people.

It is the loss of jobs. In America we have lost over 600,000 jobs over the last 8 years, good jobs, manufacturing jobs. The American Dream has slipped away, speculation from Wall Street, from developers. All of us have been affected by this crisis, and all of us believe there ought to be some end to this.

We must work as elected representatives of the people. Over 400 economists, as has been said earlier and we have the documentation, are opposed to the process and the way we are going about it. Three of them are Nobel Laureates who have come to this conclusion, and economists, professionals extraordinaire.

Unfortunately, there is no judicial review in this to protect the average citizen. We talk about the mortgages, but this helps the banks in their book of mortgages. It does not help the little person who needs it. There is no judicial review to come to her aid or his aid.

It is unfortunate that we are here today talking about $700 billion, and, as an appropriator, $1 trillion is probably what it will be and more. We do not yet know how much it will be.

We need to take our time on this. We have been talking about it now 7 days nonstop. We can do better. There is a better process. I hope that we can slow down this train.

We will probably vote in a few hours, less than an hour now. The Senate is not going to vote until later this week. We can do better, the American people deserve more, and I urge a ``no'' vote on this legislation.

11:46 AM EDT

Carolyn Cheeks Kilpatrick, D-MI 13th

Ms. KILPATRICK. Madam Speaker, I have the highest respect for my chairman, BARNEY FRANK, and your genius, thank you very much, as well as Speaker Pelosi for her leadership.

A week ago today we were sent a three-page bill, $700 billion, send it back to us and never ask us any questions. I am proud that the chairman and Speaker and leadership on both sides of the aisle have come to some agreement.

Contrary to popular belief, our financial crisis was not due to just people who couldn't afford the loans. It was Wall Street's problem, the people who managed this process over the years, with a lack of regulation from this administration. It was also predatory lending, lending from predators, banks in many instances, the very people we are going to give the money to, who took the loans, who made the loans, and didn't require the proper oversight. It is not the little people.

It is the loss of jobs. In America we have lost over 600,000 jobs over the last 8 years, good jobs, manufacturing jobs. The American Dream has slipped away, speculation from Wall Street, from developers. All of us have been affected by this crisis, and all of us believe there ought to be some end to this.

We must work as elected representatives of the people. Over 400 economists, as has been said earlier and we have the documentation, are opposed to the process and the way we are going about it. Three of them are Nobel Laureates who have come to this conclusion, and economists, professionals extraordinaire.

Unfortunately, there is no judicial review in this to protect the average citizen. We talk about the mortgages, but this helps the banks in their book of mortgages. It does not help the little person who needs it. There is no judicial review to come to her aid or his aid.

It is unfortunate that we are here today talking about $700 billion, and, as an appropriator, $1 trillion is probably what it will be and more. We do not yet know how much it will be.

We need to take our time on this. We have been talking about it now 7 days nonstop. We can do better. There is a better process. I hope that we can slow down this train.

We will probably vote in a few hours, less than an hour now. The Senate is not going to vote until later this week. We can do better, the American people deserve more, and I urge a ``no'' vote on this legislation.

11:53 AM EDT

Sheila Jackson Lee, D-TX 18th

Ms. JACKSON-LEE of Texas. Madam Speaker, the Constitution of the United States is present to protect Main Street. The full faith and credit of this constitutional document will protect the men and women of America.

I will not stand here today and suggest that we do not have some challenges. I frankly believe that the bill we have before us is a miracle, and I thank the leadership for their strength in recharacterizing the two-page bill that anointed the Secretary of the Treasury that came from the White House.

But my question is, where was the Securities and Exchange Commission? Where was the FDIC, the Federal Reserve? Under the control and domination of this administration. So when we ask the question why, we need to look back at those who controlled the policies of America for the last 8 years. Where was the Secretary of the Treasury?

But I don't stand here to cast aspersions. I will say to you that this has been diagnosed, but America needs a second opinion. There is no enforcement in this legislation. The Financial Stability Oversight Board, no enforcement provisions; the Congressional Board, no enforcement provisions; the Inspector General, no enforcement provision. There are no criminal penalties for those who have been charged with malfeasance and criminal activities, no barring of individuals who are convicted of malfeasance

and criminal activities from doing business with the United States.

So, in essence we give this money, and who does it go to? No listing by the Secretary of the Treasury where the first dollar will go. No separating a certain amount to help those in foreclosure in America in the small towns, hamlets and villages, when in fact we know that we could establish a Homeowners Loan Corporation and help those on Main Street.

Yes, I do believe we are challenged. But I believe we can come back, watch the markets, and work forward. This is a bill that hands out; it doesn't hand up. I ask my colleagues to consider the fact that we are protecting Main Street, not Wall Street.

11:55 AM EDT

Jeff Fortenberry, R-NE 1st

Mr. FORTENBERRY. Madam Speaker, undoubtedly America is facing a very serious financial challenge. There is a threat of systemic failure. Yet the central issue before us is twofold: First, is this situation as dire as predicted? And, second, is this construct, this bill, this type of government intervention, with its huge expenditure and taxpayer exposure, the correct approach?

While I recognize the economic dangers this Nation faces, I deeply regret that we have accepted artificial deadlines in a rush to do something.

The bill before us today, while much improved from the original administration proposal, relieves bad assets from the market which have no defined market value. But it overlooks more fundamental issues, such as accounting rules called mark to market, that are forcing banks to artificially write down assets, many of which have real economic value but technically no or little book value. This in turn erodes the ability to leverage these assets to meet capital requirements, resulting in shrinking

credit and an inability to make loans.

Simple measures to change this problem are not even being considered. Should we also increase the Federal Deposit Insurance Corporation guarantees to restore depositor confidence? Could we give banks some breathing room to work out these problems, rather than a taxpayer assumption of these underlying assets?

The taxpayer exposure of this bill started at $700 billion. It remains $700 billion. Nebraskans and most other Americans have made responsible financial decisions. Now we are forcing them to foot the bill for the financial industrialists of Wall Street who created this mess for Main Street, and perhaps we have not addressed the underlying fundamental problems.

We are falling into a trap of sequential decisionmaking. Once we adopt this construct, we shut the door on alternatives that may be less costly, easier to implement, and may provide a way through this crisis.

The choice between action or inaction today is a false one. In good conscience, I cannot support this legislation.

11:58 AM EDT

Barney Frank, D-MA 4th

Mr. FRANK of Massachusetts. Madam Speaker, our committee was joined this year by an extremely thoughtful Member who brings a wide range of relevant experience, the gentleman from Illinois (Mr. Foster). I yield him 2 minutes.

11:58 AM EDT

Bill Foster, D-IL 14th

Mr. FOSTER. Thank you, Chairman Frank. I rise this morning in support of this legislation.

As a scientist and a businessman, I accept the need for speed and overpowering force in this situation. With the credit system locked, small and large businesses are being told to prepare contingency plans for what to do if their operating lines of credit are not extended. Banks are refusing to lend to each other at normal rates or not at all. Banks are failing every day. If nothing is done and the situation persists for even a few weeks, both experts and common sense say that we are facing the

real prospect of entering a depression.

This morning's Wall Street Journal describes how the credit crisis is now extending on to franchises, the McDonald's, the Paneras, the Dunkin' Donuts, and threatening the jobs of thousands of their employees. So my vote in favor of this legislation will in fact be a vote to protect the interests of hardworking Americans, and don't let anyone ever tell you otherwise.

I am going to support this bill because it is not a three-page blank check to dispense 700 billion taxpayer dollars. It contains many important protections for taxpayers. It limits CEO compensation, no golden parachutes, and restructures that compensation to discourage the risk-taking behavior that got us into this mess in the first place.

It provides three useful paths out of this crisis: an auction mechanism favored by the administration to buy up troubled assets at market prices; an insurance program with support on both sides of the aisle that could well be the most useful method for reestablishing markets in the least risky of the bad securities out there; and my favorite, the possibility of an AIG-style rescue, where we can go back to the taxpayers and say, yeah, we saved their butts, but guess what? We own 80 percent of

the profits when they recover, as was the case for AIG. This is exactly why Warren Buffett supports this plan.

12:01 PM EDT

Todd Akin, R-MO 2nd

Mr. AKIN. My colleagues, a week ago we were approached by Secretary Paulson, and he told us that there was a crisis and that he had a solution. He gave us the horns of a dilemma, two sharp, shiny points that we could impale ourselves on. One, that the financial system was going to collapse and [Page: H10383]

implode, and the sky was going to fall. Certainly we wouldn't want to choose that. The other, we could write a $700 billion blank check. Those were our two choices.

Reasonable people started to ask there has got to be a better alternative than this, and at every turn, we saw a resistance to a clear definition of the problem and an ability to talk about the different alternatives or possibilities.

Now, one of the things that is very dangerous in problem solving is not being careful in defining what the real problem is. What we find when we look back and start to talk to other authorities is that this is not the first time this kind of thing has happened, and that it did not need $700 billion. It needed very little public money to solve the problem back in the Reagan days in the savings and loan crisis.

So what we have before us, and our leadership has led us into, first into the Pelosi Congress not allowing the committee process to operate properly; and, second, by some Republican leadership also trying to force us onto one of these two alternatives, is a solution that doesn't fix the problem. Mark my words, that if we pass this bill, in another couple of months we will be back here with a lot of failed banks and say, oh, my goodness, something is wrong. The banks are failing.

The problem is, this doesn't solve the problem. It's nice to take a bullet for the team if it's going to do some good, but this isn't going to solve the problem. All the people I hear in favor of this say we have got to give up some principal in order to save principal. You never save principal by giving it up.

12:03 PM EDT

Barney Frank, D-MA 4th

Mr. FRANK of Massachusetts. Madam Speaker, I yield for a unanimous consent request to the gentleman from New York (Mr. Engel).

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

12:03 PM EDT

Barney Frank, D-MA 4th

Mr. FRANK of Massachusetts. Madam Speaker, there has been a great deal of discussion about the budgetary implications. No one in my experience here has had a better mastery of that process and had a more responsible approach to it than the current chairman of the Budget Committee, and I recognize for 4 minutes the gentleman from South Carolina (Mr. Spratt).

12:04 PM EDT

John M Spratt Jr., D-SC 5th

Mr. SPRATT. Madam Speaker, no one comes to the well of this House today with any relish or enthusiasm. This bill is as unappealing to those of us who will vote for it as it is to those of us who will vote against it. The President has sent us an unprecedented request for $700 billion and asked for its immediate consideration.

The request came to us--all three pages--much like two bookends with contents to follow. When we read it, we found that the President sought a massive grant of money accompanied by a sweeping grant of authority. The President asked for speedy action. The people asked for diligence and deliberation, and that's what we have given them over the past 8 days. The result is a vastly improved bill.

If you think that $700 billion in one fell swoop is too much, as I do, the bill before you addresses that concern. It splits the funds into three stages and makes the third tranche of $350 billion subject to a vote of disapproval by Congress. In any event, everyone should understand that the cost of this bill is not $700 billion, as CBO has told us in testimony. The bill's cost would be substantially smaller than $700 billion. The cost would be the difference between the amount spent by the government

and the amount received in earnings and proceeds when all the assets are finally sold. The CBO expects that ``since the acquired assets will have value, the net impact will be substantially less than $700 billion.''

If you think, nevertheless, that the financial industry that benefits from this bill should ultimately pay for the losses it causes, as I do, then this bill offers a mechanism to accomplish that. And though the recoupment is not as ironclad as I would like, the principle is there embodied in the bill.

If you think that a grant of this amount calls for extraordinary oversight internally and externally, this bill is replete with oversight. If you think that the whole regulatory system needs to be overhauled, this bill initiates the process.

If you think that executive compensation should be capped, as I did, then this bill has limits and controls, and though they are not nearly as strict as I would like, they are present, they will be enacted and they can be built upon. If you want equity sweeteners for risks the government is taking, to cushion the downside losses and to give us a piece of the upside gains, this bill provides for warrants to go along with the notes, bonds and mortgages that we will be taking.

There is a lot that's better about this bill after almost 100 pages of substantive changes. But the question remains, is this bill necessary? Is this the best way to inject credit liquidity into our markets? Should we even shore up insolvent firms?

I can't answer that question definitively, but I have to listen when Ben Bernanke, the chairman of the Fed, answers it by saying: ``This is the most significant financial crisis of the post-war period. I see the financial markets as quite fragile ..... Credit will be restricted further. It will affect spending; it will affect economic activity; it will affect the unemployment rate; it will affect real income; it will affect everybody's standard of living ..... Despite the efforts of the Federal

Reserve, the Treasury, and other agencies, global financial markets remain under extraordinary stress. Action by Congress is urgently required to avert what could otherwise be grave consequences for financial markets and for our economy.''

Ben Bernanke is an accomplished economist who has made a life-long study of economic crises. He has no axes to grind, and he is not given to exaggeration. When he warns that the situation is dire and that the cost of doing nothing could be catastrophic, we have to listen. Indeed, we ignore his advice at our peril--the peril that this crisis will become a wider economic debacle.

Many Members like me come from districts that are rural and made up of small towns. We tend to think that we are far removed from the ripple effects of a crisis like this. But when we get up on a Monday morning and find right in our yard that Wachovia has been acquired at the instigation of the FDIC, we know that the crisis can reach us all sooner or later unless we act now and act decisively.

I urge support for the bill.

12:08 PM EDT

John Campbell, R-CA 48th

Mr. CAMPBELL of California. Madam Speaker, I have heard it said that this bill is a $700 billion bailout for Wall Street. It is none of those things.

The $700 billion is not being spent. It will be used to buy assets. Those assets will have value. And there are three mechanisms built into the bill that are very likely to recover all of that $700 billion for the taxpayer and, perhaps, even earn a profit over time. It's said to be a bailout, but the people whose assets will be bought will probably get 30 cents or 20 cents or 40 or 50 cents on the dollar that they paid maybe just a year or so ago.

I don't think anybody here would consider getting 30 cents on the dollar for something you invested in a year ago or 2 years ago as a bailout. I think that's taking a bath, as well they should.

They made an investment. They took a risk. It didn't turn out well.

They say it's for Wall Street. Let there be no denying this. The impact of this financial crisis will extend to every American with a job, with a bank account and with a pension plan. We cannot allow that to happen.

I have come down to this floor many times talking about the benefits of Republican ideas and the problems with Democratic ideas. This is not a time for that. We cannot and should not be Republicans or Democrats or liberals or conservatives today. This issue is too grave. The consequences are too dire.

We have two choices in front of us. One is to do nothing. If there is consensus amongst everyone who has spoken today, it is that to do nothing will result in unconscionable consequences to this economy that will cause people to lose their jobs, lose their retirement, lose their savings. We do not want that to happen.

The other option is to take the bill that is before us, which has been working for 9 days, which has things in it which, it's not everything any of us want, but it is the product of extensive negotiations from all concerned parties. We can take that bill today, and we can give it a chance to work and save this economy.

I desperately hope and pray that we as a body, Republicans and Democrats alike, have the courage today to do the right thing and pass this bill.

12:11 PM EDT

Melissa Bean, D-IL 8th

Ms. BEAN. I thank Chairman Frank for yielding and for his hard work and extraordinary bipartisan leadership this week.

Madam Speaker, I rise in support of the Emergency Economic Stabilization Act of 2008, recognizing how unhappy we all are as Americans to be in this situation.

As co-chair of the New Dems Working Group on Regulatory Modernization, I am committed to ensuring that this body fast-tracks regulatory reform of our markets, particularly oversight for the innovative, complex new instruments that have enabled so much high-risk leverage of so many of our financial institutions so this never happens again.

Tomorrow we can discuss the state of our broader economy, our struggling middle class, and the consequences of an anti-regulation ideology taken to such an extreme that it threatens the very fabric of our Nation's economic security. But today the question before the House is the cost of action versus inaction. This is a time that our Nation's economy is at a precipice of potential collapse, the likes of which we have not seen in our lifetime.

Chairman Bernanke has likened the consequences of inaction to those of the Great Depression. Will we lead our country out of this crisis and avert such consequences, or stand aside and let the chips fall? Americans in the world markets are watching. Our decisions today speak to them.

This bill is an imperfect solution, but in times of crisis, our Members have put politics aside and pulled together to mandate vast improvements from what was originally proposed by the administration. It now includes oversight and accountability on a bipartisan basis with a judicial review of this unprecedented level of authority; it limits compensation for failed executives who contributed to this crisis; and it protects taxpayers by providing profits, both on the assets that we buy and sell,

but also by sharing in the profits from those institutions that we help; and a recruitment plan to ensure that, over 5 years, the financial industry, not taxpayers, picks up the tab.

The cost of inaction is real for American families and businesses, business closings, and jobs loss, and the wiping out of savings and pensions.

12:11 PM EDT

Melissa Bean, D-IL 8th

Ms. BEAN. I thank Chairman Frank for yielding and for his hard work and extraordinary bipartisan leadership this week.

Madam Speaker, I rise in support of the Emergency Economic Stabilization Act of 2008, recognizing how unhappy we all are as Americans to be in this situation.

As co-chair of the New Dems Working Group on Regulatory Modernization, I am committed to ensuring that this body fast-tracks regulatory reform of our markets, particularly oversight for the innovative, complex new instruments that have enabled so much high-risk leverage of so many of our financial institutions so this never happens again.

Tomorrow we can discuss the state of our broader economy, our struggling middle class, and the consequences of an anti-regulation ideology taken to such an extreme that it threatens the very fabric of our Nation's economic security. But today the question before the House is the cost of action versus inaction. This is a time that our Nation's economy is at a precipice of potential collapse, the likes of which we have not seen in our lifetime.

Chairman Bernanke has likened the consequences of inaction to those of the Great Depression. Will we lead our country out of this crisis and avert such consequences, or stand aside and let the chips fall? Americans in the world markets are watching. Our decisions today speak to them.

This bill is an imperfect solution, but in times of crisis, our Members have put politics aside and pulled together to mandate vast improvements from what was originally proposed by the administration. It now includes oversight and accountability on a bipartisan basis with a judicial review of this unprecedented level of authority; it limits compensation for failed executives who contributed to this crisis; and it protects taxpayers by providing profits, both on the assets that we buy and sell,

but also by sharing in the profits from those institutions that we help; and a recruitment plan to ensure that, over 5 years, the financial industry, not taxpayers, picks up the tab.

The cost of inaction is real for American families and businesses, business closings, and jobs loss, and the wiping out of savings and pensions.

12:14 PM EDT

Ginny Brown-Waite, R-FL 5th

Ms. GINNY BROWN-WAITE of Florida. Madam Speaker, I rise today because of my grave concern over what is surely one of the biggest bailouts in American history. Make no mistake: A vote for this bailout is a vote to ratify business as usual in Washington. The compromise was crafted with some of the same people who brought us this mess, except this time we have a gun to our head. This isn't legislation; this is extortion. We could actually call it the in-out plan. As the FBI is going in, we are bailing

out. That's not what the taxpayers want.

Do you like $10 trillion in debt? In one stroke of the pen, Congress will have expanded this debt by another trillion to $11.3 trillion.

What happens if this money is repaid, as some are claiming? Certainly there will be all sorts of expenditures, and we will continue to grow that debt. This brings me to another financial mess buried in the pages of this bill. Any premium paid by companies will be put into a fund, kind of like that of the Social Security trust fund, and Americans know that was never, ever, a good idea.

If you aren't angry enough about this bailout, foreign banks get special treatment right there in section 112. The Treasury Secretary has the discretion to bail out foreign banks at the expense of the American taxpayer, no restrictions and no guarantees.

[Time: 12:15]

Certainly another point is that it makes two categories of homeowners, those who make every mortgage payment and pay every bill and struggle to meet their commitments, and those homeowners who didn't meet their obligation, skipped out on the bill and now want taxpayers to bail them out.

This is so embarrassing, it turns the stomach of most Americans. Make no mistake, a vote for this bailout is a vote to ratify business as usual in Washington.

12:16 PM EDT

Marcy Kaptur, D-OH 9th

Ms. KAPTUR. I thank the able Chairman BARNEY FRANK for yielding me this time, and say America needs the right deal, not a fast deal.

This Congress must step up to its constitutional responsibilities as a deliberative body to craft that right deal, not an insider trade. Actually, this bill is the wrong medicine. It concentrates financial power even more in the hands of Wall Street's mega banks and its buddies at the U.S. Treasury.

It bails out their bad behavior with no reform to prevent further abuse, and it ignores Main Street's real housing challenges. There is a much better way. The Bush administration says we are facing the worst financial crisis in modern history. That is not true.

The market problems of the 1980s were much worse than today. Then, over 3,000 banks failed, interest rates were 21 percent, and all the banks in Texas went down. The economic instability was resolved by the financial system in a much more disciplined and rigorous way than taxpayers printing money for Wall Street.

In those days the FDIC, not through a taxpayer bailout, but through careful use of FDIC's considerable power, resolved thousands of problem situations. No cash changed hands. The FDIC used its powers, its regular powers to regulate transactions with banks through a system of subordinated debentures and promissory notes. Even curbs on executive salaries and controlled dividends were exacted through that process. The cost of the entire enterprise was $1.8 billion, resolving over $100 billion in

problem institutions from the FDIC insurance fund, paid for by the banks, not the taxpayers.

Today's economic challenge is a credit and housing crisis, not a liquidity crisis, precipitated by SEC accounting rules that are rewarding high-risk speculators and penalizing sound banks.

Mr. Chairman, I say we go back to the drawing board. This bill does not do it for the American people. Draft the right deal, not the fast deal. Draft the best deal.

12:19 PM EDT

Steven C. LaTourette, R-OH 14th

Mr. LaTOURETTE. Madam Speaker, I want to congratulate the chairman of the Financial Services Committee, Chairman Frank, for noble work in being handed really a pile of garbage and trying to make it better. Sadly, I cannot endorse the legislation he has worked so hard to bring today; and say this mess is not of his making.

Our leader, Mr. Boehner, appointed about 14 of us to do a working group to find an alternative to $700 billion, thinking that $700 billion is a lot of money. [Page: H10387]

And our recommendations had a number of principles. One is that the people that made the mess should clean up the mess. Thankfully, that was the insurance program which Chairman Frank and the Democrats have acceded to. And it also dealt with CEO compensation in the bill, which I am happy to see.

But there were three market reforms that could have taken this bill from $700 billion to maybe $100 billion, and it is what the folks that have been calling me asked for. Some have already been talked about on the floor, and that is the mark to market. And basically, to give an example, if you are a bank and you have a million dollar building in your portfolio but because the real estate market isn't doing so well, the bank examiners have come in and they have said your building is only worth

$400,000 today. You haven't sold it. Nothing has happened to it. You are still collecting rent on it, but you have taken a $600,000 hit on your balance sheet. That has a doubled-edged effect in that now that you have a reduced balance sheet, you have to squirrel more cash so you can't make loans to people wanting to engage in business, people wanting to buy homes. It is fake.

The latest figures that I have seen indicate that this mark down by the bank examiners has taken $500 billion of assets down, with the multiplier effect of about $5 trillion that is not available.

We could double the FDIC reform and do the FDIC reform which I believe the chairman supports. And not one American has lost one penny in an FDIC-insured account of $100,000 or less. We could make it $200,000.

Lastly, the principle was that the taxpayer shouldn't pay for this. Private money should pay for this. Repatriate offshore funds from American corporations, and we could fix this problem.

12:21 PM EDT

Barney Frank, D-MA 4th

Mr. FRANK of Massachusetts. Madam Acting Speaker, the leadership that we have been given throughout this crisis by the permanent Speaker of this House has been extraordinary, and I am honored to yield her 1 minute.

12:21 PM EDT

Barney Frank, D-MA 4th

Mr. FRANK of Massachusetts. Madam Acting Speaker, the leadership that we have been given throughout this crisis by the permanent Speaker of this House has been extraordinary, and I am honored to yield her 1 minute.

12:21 PM EDT

Nancy Pelosi, D-CA 8th

Ms. PELOSI. Thank you very much, Madam Speaker, for recognizing me, and also to the distinguished chairman for his extraordinary leadership which I will address in a moment.

Madam Speaker, when was the last time anyone ever asked you for $700 billion? It is a staggering figure. And many questions have arisen from that request, and we have been hearing I think a very informed debate on all sides of this issue today. I am very proud of the debate. Seven hundred billion dollars, a staggering number, but only a part of the cost of the failed Bush economic policies to our country, policies that were built on budget recklessness.

When President Bush took office, he inherited President Clinton's surpluses; 4 years in a row budget surpluses on a trajectory of $5.6 trillion in surplus. And with his reckless economic policies, within 2 years he had turned that around. And now 8 years later, the foundation of that fiscal irresponsibility, combined with an anything-goes economic policy, has taken us to where we are today.

They claim to be free market advocates when it is really an anything-goes mentality. No regulation, no supervision, no discipline. And if you fail, you will have a golden parachute and the taxpayer will bail you out. Those days are over. The party is over in that respect.

Democrats believe in a free market. We know that it can create jobs, it can create wealth and many things in our economy. But in this case, in its unbridled form, as encouraged, supported by the Republicans, some in the Republican Party, not all, it has created not jobs, not capital, it has created chaos. And it is about that chaos that the Secretary of the Treasury and the chairman of the Fed came to see us just about a week and a half ago. It seems like an eternity, doesn't it. So much has

happened, the news was so bad.

They described a very, very dismal situation, a dismal situation describing the state of our economy, the fragility of our financial institutions, and the instability of our markets--our equity markets, our credit markets, our bond markets. And here we were, listening to people who know of what they spoke. The Secretary of the Treasury brings long credentials and knowledge of the markets. More fearful, though, to me, more scary, were the statements of Chairman Bernanke because Chairman Bernanke

is probably one of the foremost authorities in America on the subject of the Great Depression. I don't know what was so great about the depression, but that's the name they give it.

And we heard the Secretary and the Chairman tell us that this was a once in a hundred-year phenomenon, this fiscal crisis was so drastic. Certainly once in 50 years, probably once in 100 years. And how did it sneak up on us so silently, almost on little cat's feet, that they would come in on that day. And they didn't actually ask for that much money that night. It took 2 days until we saw the legislation that they were proposing to help calm the markets. It was on that day that we learned of

a $700 billion request.

But it wasn't just the money that was alarming, it was the nature of the legislation. It gave the Secretary of the Treasury czar-like powers, unlimited powers, latitude to do all kinds of things; and specifically prohibited judicial review or review of any other Federal administrative agency to review their actions.

Another aspect that was alarming, it gave the Secretary the power to use any money that came back from these infusions of cash to be used at the discretion of the Secretary, not to reduce the deficit, not to go into the general fund so we could afford other priorities, to be used at the discretion of the Secretary. It was shocking.

Working together in a bipartisan way, we were able to make major improvements on that proposal even though its fundamental basis was almost arrogant and insulting.

The American people responded almost immediately. Overwhelmingly they said that they know something needs to be done. Seventy-eight percent of the American people said: Congress must act. Fifty-eight percent said: but not to accept the Bush proposal.

And so here we are today, a week and a couple of days later, coming to the floor with a product, not a bill that I would have written, one that has major disappointments for me beginning with the fact that it does not have bankruptcy in this bill, and we will continue to persist and work to achieve that.

It is interesting to me, though, when they described the magnitude of the challenge and the precipice that we were on and how we had to act quickly and we had to act boldly and we had to act now, that it never occurred to them that the consequences of this market were being felt well in advance by the American people. That unemployment is up; and, therefore, we need unemployment insurance. That jobs are lacking; and, therefore, we need a stimulus package.

So how on the one hand could this be so urgent at the moment, and yet so unnecessary for us to address the effects of this poor economy in the households of America across our country? We will come back to that in a moment.

Working together, we put together some standards. I am really proud of what Barney Frank did in this regard.

That first night, Thursday night when we got the very, very dismal news he immediately said: If we are going to do this--and Spencer Bachus was part of this as well--if we are going to do this, we must have equity for the American people. We are putting $700 billion; we want the American people to get some of the upside. So fairness for the American people.

Secondly, as they described the root of the problem as the mortgage-backed securities, Barney insisted that we would have forbearance on foreclosure. If we are now going to own that paper, that we would have forbearance to help responsible homeowners stay in their homes.

In addition to that, we had to have strong, strong oversight. We didn't even have to see the $700 billion or the full extent of their bill to know that we needed equity and upside for the taxpayer, forbearance for the homeowner, oversight by the government on what they were doing, and something that [Page: H10388]

the American people understand full well, an end to the golden parachutes and a review and reform of the compensation for CEOs.

Let's get this straight. We have a situation where on Wall Street, people are flying high. They are making unconscionable amounts of money. They make a lot of money. They privatize the gain. The minute things go tough, they nationalize the risk. They get a golden parachute as they drive their firm into the ground, and the American people have to pick up the tab.

[Time: 12:30]

Something is very, very wrong with this picture.

So just on first blush that Thursday night, we made it clear--meeting much resistance on the part of the administration--those four things, equity, forbearance, oversight, and reform of compensation.

Overriding all of this is the protection of the taxpayer. We need to stabilize the markets, and in doing so, we need to protect the taxpayers. And that's why I'm so glad that this bill contains suggestions made by Mr. Tanner that if at the end of the day, say, in 5 years when we can take a review of the success or whatever of this initiative, that if there is a shortfall and we don't get our whole $700 billion back that we have invested, that there will be an initiative to have the financial

institutions that benefited from this program to make up that shortfall. But not one penny of this should be carried by the American people.

People ask--and Mr. Spratt spoke with great knowledge and eloquence on the budget and aspects of the budget--$700 billion; what is the impact, what is the opportunity cost for our country of the investments that we would want to make?

Okay. Now we have it at a place where the taxpayer is going to be made whole, and that was very important for us. But why on the drop of a hat can they ask us for $700 billion and we couldn't get any support from the administration on a stimulus package that would also help grow the economy?

People tell me all over the world that the biggest emerging economic market in the world is rebuilding the infrastructure of America: roads, bridges, waterways, water systems in addition to waterways, the grid, broadband, schools, housing. We're trillions of dollars in deficit there. We know what we need to do to do it in a fiscally sound way, in a fiscally sound way that creates good paying jobs in America immediately, brings money into the Treasury by doing so and, again, does all of this in

an all-American way: good paying jobs here in America. We can't get the time of day for $25, $35 billion for that which we know guarantees jobs, et cetera, but $700 billion.

So make no mistake: When this Congress adjourns today to observe Rosh Hashanah and have Members go home for a bit, we are doing so at the call of the Chair because this subject is not over, this discussion about how we save our economy. And we must insulate Main Street from Wall Street.

As Congresswoman Waters said, Martin Luther King Drive, and in my district Martin Luther King Drive and Cesar Chavez Road, and all of the manifestations of community and small businesses in our community, we must insulate them from that.

So we have difficult choices, and so many of the things that were said on both sides of this issue in terms of its criticisms of the bill we have and the bill that we had at first and the very size of this, I share. You want to go home, so I'm not going to list all of my concerns that I have with it.

But it just comes down to one simple thing. They have described a precipice. We are on the brink of doing something that might pull us back from that precipice. I think we have a responsibility. We have worked in a bipartisan way. I want to acknowledge Mr. Blunt and Mr. Boehner of the work that we've done together in trying to find as much common ground as possible on this.

But we insisted the taxpayer be covered. We all insisted that we have a party-is-over message to Wall Street, and we insisted that the taxpayers at risk must recover; any risks must be recovered. I have told you that already.

So, my colleagues, let's recognize that this legislation is not the end of the line. Mr. Waxman will be having vigorous oversight this week, hearings this week, on regulatory reform and other aspects of it. I hope you will pursue fraud and mismanagement and the rest.

Mr. Frank and his committee will continue to pursue other avenues that we can stabilize the markets and protect the taxpayer.

For too long this government in 8 years has followed a right-wing ideology of anything goes: no supervision, no discipline, no regulation. Again, all of us are believers in free markets, but we have to do it right.

Now let me again acknowledge the extraordinary leadership of Mr. Frank. He's been an exceptional leader in the Congress, but never has his knowledge and his experience and his judgment been more needed than now. And I thank you, Mr. Frank, for your exceptional leadership, Mr. Chairman.

So many people worked on this, but I also want to acknowledge the distinguished Chair of our caucus, Mr. Emanuel. His knowledge of the markets, the respect he commands on those subjects, and his boundless energy on the subject served us well in these negotiations.

But this is a bipartisan initiative that we are bringing to the floor. We have to have a bipartisan vote on this. That is the only message that will send a message of confidence to the markets.

I know that we will be able to live up to our side of the bargain. I hope the Republicans will, too.

But my colleagues, as you go home and see your families and observe the holiday and the rest, don't get settled in too far because as long as this challenge is there for the American people--the threat of losing their jobs, their credit, their savings, their retirement, the opportunity for them to send their children to college--as long as in the households of America this crisis is being felt very immediately and being addressed at a different level, we must come back. And we will come back

as soon and as often as necessary to make the change that is necessary.

And before long, we will have a new Congress, a new President of the United States, and we will be able to take our country in a new direction.

Thank you.

12:38 PM EDT

Michele M. Bachmann, R-MN 6th

Mrs. BACHMANN. I thank the gentleman for yielding.

I also want to thank the Speaker of the House for making the case why so many Republicans are unwilling at this point to sign on to this legislation that's before us. However, I do believe also, Madam Speaker, that Democrats and Republicans are both committed to finding a way out of this financial challenge, and we think we have one. But the answer we believe needn't cost taxpayers $700 billion.

The problem is a lack of credit for creditworthy people, people who are fully capable of paying that credit back. Why is there a lack of credit? It's because the SEC has mandated accounting rules that have forced banks to value assets well below their actual economic value.

So what does this mean? It means that if a bank has $1 worth of deposits, they can make $10 in loans. But if accounting rules are forcing banks to devalue assets, $500 billion, then that means that banks are prohibited from making $5 trillion worth of loans. And that's why we have a credit crunch.

Unfortunately, the bill that we have before us today doesn't even address this credit crisis.

Let's first direct the SEC to suspend mark-to-market accounting rules for assets for which there is no market. That only makes sense. Second, stop naked short selling. Then the FDIC can issue net asset certificates that saved banks during the S&L crisis and the FDIC can write a letter to United States banks telling them in the absence of fraud that the FDIC will fully back all deposits for first-tier creditors.

Let's try these practical solutions before we pull the trigger on a $700 billion bailout that doesn't even address the underlying program.

Today, Madam Speaker, Republicans and Democrats agree. It's time for a rest. It's time for a break. Let's embrace a practical solution before we tie a $700 billion bailout around the neck of the American people.

12:40 PM EDT

Rahm Emanuel, D-IL 5th

Mr. EMANUEL. There have been a number of important lessons learned in this last year. One, you cannot have a strong economy on a foundation of a weakened middle class. For the last 7 years, the middle class has seen median household incomes decline by $1,200 and costs go up by $4,800. They are working harder, making less, and paying more to maintain their standard of living.

And, second, that this problem is not an earthquake, it's not a natural disaster. It's a manmade disaster, and one in which a philosophy of unregulation created that type of damage. You can come to the conclusion that capitalism is too important to be left to capitalists alone, that the banks that are surviving are the ones that are regulated. The unregulated are the ones that are going under.

People have figured out this problem. The financial industry created things that they don't, themselves, know what the value are. People were buying homes that were being flipped as if they were pancakes. And the regulators that were supposed to be policing this were asleep at the switch; and they're angry at all three, and they have every right to be.

The substance of this legislation has been improved because last Saturday the Treasury Department sent a bill to calm the markets down. And what Congress did in the remaining 7 days is put in there protections for the taxpayers. It had nothing to start with as it related to the taxpayers. The last 7 days was to make sure that the public markets were as protected as the financial markets were calmed. And we have made dramatic improvements in this legislation.

But make no doubts about it: While this may try to avert the recession in the financial sector, our job is not done until we avert the recession on Main Street, that we once again get a growth in jobs, we once again get a growth in median household incomes.

12:42 PM EDT

Rahm Emanuel, D-IL 5th

Mr. EMANUEL. Until we deal with the standard of living of the middle class and return the foundations of this economy to a middle class that is strong, we will never have a healthy economy.

We are doing what is responsible putting out this fire. But make no doubts about it: The remaining days are to also figure out who created the fire and make sure that that arsonist is put in jail.

12:43 PM EDT

Bob Inglis, R-SC 4th

Mr. INGLIS of South Carolina. I thank the gentleman for yielding.

The question before us, I think, is this: Is the risk of doing nothing greater than the risk of buying $700 billion of illiquid securities? The argument for it, of course, is that illiquid securities may turn out to be an okay investment. The best argument against it is it's basically socializing losses after Wall Street-types have pocketed profits. But, you know, when knowledgeable people tell us that there is a substantial chance of a depression, it's time to act.

Our financial markets have overdosed on credit. Truth be known, we have all overdosed on credit. The Federal Government, businesses large and small, families wealthy and poor. Working that overdose out of our system is going to take some time. But by buying up some of the securities that have fallen to a price below their value, the government might be able to stabilize the market and later sell off some of those securities at a profit. Some will be found to be worthless because they are so far

removed from the original collateral, but some will have value, and we may just come out of this okay.

12:44 PM EDT

Dennis Kucinich, D-OH 10th

Mr. KUCINICH. I thank the gentleman.

Today we're being told that what is good for Wall Street is good for Main Street, yet this bailout plan will fail to keep families in their homes. Treasury will own troubled assets without any control. Terms of bad mortgages cannot be changed absent controlling share of underlying securities.

If you support this legislation because you think it will keep people in their homes, think again. In fact, Treasury will not be able to change the terms of bad mortgages because the act does not require Treasury to purchase a controlling share in the underlying mortgage-backed securities and collateralized debt obligations.

[Time: 12:45]

The Secretary will be powerless to make any real and substantive change in the terms of mortgages. The Secretary will have no power to avoid foreclosures and keep families in their homes.

Last night, I received a letter from Frank Alexander, a professor of law at Emory University. He has testified before my subcommittee on domestic policy, on targeting Federal assistance to help neighborhoods affected by the foreclosure crisis. He is an expert on housing law.

I would like to put his letter in the Record.

Professor Alexander clearly demonstrates that the Emergency Economic Stabilization Act will not fulfill its stated goal of preserving homeownership. Unless the Secretary of the Treasury is required to prioritize assets that will give the Treasury a controlling share in the underlying home mortgage, the Secretary will hold bad assets with no power to make them solid again. So much for the homeowners.

If we had a plan which focused on saving families' homes, it would actually do more for the economy than this bill. Economist Nouriel Roubini has written that the lack of debt relief to distressed households is behind the financial crisis and the deepening recession. With $700 billion directed towards helping or towards trying to save homes, we could really stimulate the economy and could give real economic security to millions on Main Street, but that's not what this bill is about. It's about

Wall Street. What is good for Wall Street is good for Main Street? Not today.

EMORY SCHOOL OF LAW,

Atlanta, Georgia, September 28, 2008.

Re Emergency Economic Stabilization Act of 2008.

Hon. DENNIS J. KUCINICH,

Chairman, Domestic Policy Subcommittee, Committee on Governmental Oversight and Reform, House of Representatives, Rayburn House Office Building, Washington, DC.

DEAR REPRESENTATIVE KUCINICH: As the text of the Emergency Economic Stabilization Act of 2008 approaches final negotiations and a possible vote in Congress, I want to share my concern over the lack of any clear connection between the Troubled Asset Relief Program, and the provisions of this legislation that appear to relate to Homeownership Preservation.

This legislation, in its most recent form as of Sunday evening, September 28, has many provisions that make it far superior to the bill that was submitted on behalf of Secretary Paulson eight days ago. The two dominant purposes of the current draft of this legislation appear to be first the desire to enhance financial market liquidity through the acquisition (or insurance) of Troubled Assets, and second the desire to facilitate home preservation through loan modifications. The problem is that

there is, quite simply, no clear or necessary connection between the Troubled Assets that may be purchased by the Secretary, and the capacity of the Secretary to engage in or facilitate loan modification or foreclosure avoidance strategies.

As presently drafted, the Secretary will engage in a program of acquisition (or insurance) of Troubled Assets, the purchase of which ``promotes financial market stability''. The liquidity crisis primarily stems from mortgage backed securities, or derivatives of mortgage backed securities, which contain or are perceived to contain mortgages with high rates of delinquencies or defaults. Mortgage related securities that are composed of a single class of prime mortgages are not illiquid, and are

not likely to be the target of acquisition by the Secretary. Instead, the illiquid securities are most frequently those that are highly subdivided and fractured into separate classes or tranches, and often further securitized by derivatives.

The problem is that when and if the Secretary elects to acquire the mortgage related asset of any single financial institution, the Secretary will not be acquiring a portfolio of whole loans, or even a controlling interest in a securitization of loans.

If the Secretary acquires a partial interest or whole interest in a given tranche of mortgage backed securities, or in a derivative of a mortgage back security, the Secretary will lack the authority to authorize, require or even permit a program designed to encourage or facilitate homeownership preservation or foreclosure avoidance actions. As an [Page: H10390]

owner of a minority interest in a securitization or security derivative, there is little if anything that

the Secretary will be able to do to accomplish the professed goals of Homeownership Preservation in this legislation.

If in fact this legislation is to have as one of its goals that of homeownership preservation, then the Troubled Asset Relief Program should have, at a minimum, as one of its goals the acquisition by the Secretary of Troubled Assets which will provide the Secretary will a controlling or majority interest in the underlying pool of whole mortgage loans. In such a context the Secretary will be in a position to implement the Homeownership Preservation goals of this legislation.

The most direct way to modify the current text of the Emergency Economic Recovery Act of 2008 to create the necessary tie between market liquidity and homeownership preservation is to modify Section 101(d)(5) to add the following:

``(5) Priority acquisition of troubled assets when such acquisition provides the Secretary with a controlling or majority interest in the underlying pool of whole mortgage loans.''

In the absence of any functional tie between Troubled Asset acquisition and control with respect to modifications of the underlying residential mortgages, there is likely to be very little significance to the homeownership preservations provisions of this legislation.

Sincerely,

Frank S. Alexander,

Professor of Law, Director, Project on Affordable Housing and Community Development.

12:47 PM EDT

Todd Tiahrt, R-KS 4th

Mr. TIAHRT. Madam Speaker, fundamentally, there is something wrong with the way we are proceeding. The arguments use fear to build confidence. We are on an artificial deadline, rushing to judgment, fearful we can't get there in time. No one has addressed the fundamental reason that has brought us to this state of fear. No one has talked about it because this bill does not fix the underlying problems. Your fear drives you away from reasoning.

So now the worm turns. Those of you who complained the rich are getting richer want to take money away from those who can't afford it and give it to those who live the life style of the rich and famous. Those of you who curse corporate welfare pursue the biggest corporate welfare bill in history. Why? Because of fear. Taxpayers don't want to throw good money--their money--after bad behavior.

Vote against this. Fix the underlying problem. Don't let fear drive you to a bad decision. Vote ``no.''

12:48 PM EDT

Gregory Meeks, D-NY 6th

Mr. MEEKS of New York. Thank you, Mr. Chairman. I thank you for your hard work.

Madam Speaker, I think what we are subjected to here today is similar to what the drunk driver syndrome is. We have a situation where none of us likes it, where none of us cares what's taking place here--the drunk driver, the one who is intoxicated. Well, the drunk drivers here are these markets that now have had a crash on a thoroughfare, the same thoroughfare that many individuals drive on, and that thoroughfare is blocked. Unfortunately, with the drunk driver, we have to come in and rescue

that drunk driver and open up that thoroughfare so that traffic can flow through it. Well, that is what we have right here.

We have individuals who were drunk. The regulators are the bartenders who continued to pour the drinks and who didn't stop them from drinking. Now they're drunk. They've gotten on the main thoroughfare and have had an accident. The accident has closed the highway. Unfortunately, this highway is also the highway where we have our IRAs. It's the highway where we have our 401(k)s. It's the highway where we have our pension funds. It's the highway where we have our car loans and our mortgages. We

have to clear the highway so that Main Street can go through it and can continue to survive.

I support this.

12:49 PM EDT

Tim Murphy, R-PA 18th

Mr. TIM MURPHY of Pennsylvania. Madam Speaker, as we pursue this, there are several things that still are of concern to me. We need to make sure we enact real consequences for those who are accountable for this mess and make sure that we enact real change to the system. We need to make sure that we say loud and clear to those who gamble with public funds that they have an obligation to the taxpayer. We need to also make sure that those who are offered loans with a wink and a nod who have no ability

to pay, no identification, no credit, and no money down can't get these loans anymore until we get this system fixed.

We also need to understand that what we're talking about is a $700 billion bailout. It happens to be the same amount of money, $700 billion, that we send every year to foreign oil. If this Congress had taken care of our energy problems and had allowed drilling in the Outer Continental Shelf and of the Colorado shale oil, we would have had a real commodity to sell. We would have had real investments in the market and not just paper that we would have been shuffling around and would have been hoping

that someone would have bought at auction.

Trillions of dollars in our economy and hundreds of thousands of jobs, that's what we should be doing to fix our economy, not just selling more paper.

12:50 PM EDT

Henry Waxman, D-CA 30th

Mr. WAXMAN. Madam Speaker, this is an easy bill to vote against. It was presented to us by a Republican President and by a Republican administration so blinded by their ideology of deregulation that it kept them from preventing this crisis.

Because of the masterful work of Chairman Barney Frank and of others, it is incredibly improved. We hope it will work to stabilize the economy. Nobel Prize economists have recommended alternative approaches, but almost all of them have said, ``Don't leave without passing something.'' This is a Republican bill which must pass with bipartisan votes. Many Democrats don't like it. Many Republicans are choking on it. We aren't going to get another bill or a better bill this year, but we will

be back to make real reforms, more reforms next year. For now, it would be irresponsible to do nothing.

I will vote for this bill.

12:52 PM EDT

John Shadegg, R-AZ 3rd

Mr. SHADEGG. Madam Speaker, I rise to say that this bill is tragically flawed. It contains no increase in FDIC insurance, which would make people comfortable and safe when they're rushing to their banks right now. It contains no capital gains tax, no tax changes, no attempt to deal systematically with the problem. Most importantly, it contains no change in the mark-to-market rules.

This morning, a banker of mine called me from Arizona. He said, ``Mark to market is destroying the capital in the market, and is dragging down the value of these markets.'' He explained that bank examiners are not even enforcing their own rule. Their own rule says an asset shouldn't be marked down until, one, its value drops and, two, until the people stop making payments, but bank examiners are now saying that they must call it mark to market and destroy its value even if the owner of the property

is still making those payments.

We have asked over and over again for FDIC insurance to be increased and for a change in the mark-to-market rules. Again and again and again and again, those requests have been rejected.

12:53 PM EDT

Joe Crowley, D-NY 7th

Mr. CROWLEY. I thank the chairman for all of his work on this bipartisan piece of this legislation.

Madam Speaker, I rise not as a representative of Wall Street in New York but of 65th Street in Woodside, Queens, New York.

First, let me state that everyone is angry that we're here this afternoon enacting this piece of legislation, but immediate action must be taken or our Nation's credit system and banking system will dry up. What that means is pension plans and retirement savings will be threatened by the wild fluctuations of the stock market. It will mean [Page: H10391]

the tightening of credit, which means even the most creditworthy Americans won't be able to afford homes or be able

to refinance their homes. Student loans will evaporate, making college more expensive. Auto loans will dry up and, finally, salaries. If employers cannot access banks and credit, they will not be able to meet their payroll, and layoffs will begin.

This was a 3-page bill when we first got it, ladies and gentlemen, but we, the Democrats, made this a better bill. We added both the civil and criminal accountability of Wall Street executives. Government should be giving out metal bracelets, ankle bracelets, and not golden parachutes.

Madam Speaker, this is not a perfect bill, but it is a much better bill than we got initially. I will be supporting this legislation.

12:54 PM EDT

Marilyn Musgrave, R-CO 4th

Mrs. MUSGRAVE. Madam Speaker, I am pleased that the strong opposition to the initial administration proposal has helped to force some very important changes such as the bipartisan oversight board, which is an online database that will allow greater oversight of the Secretary's actions, but this is still a bailout for Wall Street that will cost the average Colorado household thousands.

I simply cannot stomach transferring that kind of money from the middle class families to a bunch of Wall Street bankers whose avarice and greed put us in this situation in the first place. It's interesting that, when working families were being crushed by soaring energy prices this summer, Congress went on vacation. Yet, when Wall Street faced the consequences of its actions, we worked around the clock to help them. We should place the same priority on helping Main Street that we place on helping

Wall Street.

12:55 PM EDT

Keith Ellison, D-MN 5th

Mr. ELLISON. Madam Speaker, a good friend of mine who runs a charter school needed to get a line of credit recently to float her payroll. She couldn't get it. In the past, she had. That puts the teachers, the custodial staff, the people who work in the kitchen, and all of those folks in line for a payless payday, which means that we've got 60 folks who will not be able to make car notes, mortgages or who will not, perhaps, be able to pay credit cards and who knows what.

This kind of problem is bleeding throughout the economy. That's why the unemployment rate is 6.2 percent. We can wait to see the pain, and then we will be motivated to act, but do you really want to see 8 percent or 9 percent unemployment?

12:56 PM EDT

Barney Frank, D-MA 4th

Mr. FRANK of Massachusetts. Madam Speaker, while I believe the gentleman is a little bit too harsh on the Bush administration, I understand his point of view.

Madam Speaker, I now yield to the gentleman from Michigan, the dean of the House, for purposes of a colloquy.

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

12:56 PM EDT

Spencer Bachus, R-AL 6th

Mr. BACHUS. Madam Speaker, I yield myself 3 minutes, and I'd like to go to the well.

It's 11 days later, and our time has run out. We're going to have a vote. We're going to make a decision. There are no more alternatives. There are no other choices--just this one choice. I don't know about you. I believe every Member of this body feels as if there is an awesome responsibility on our shoulders. This will be the most difficult decision I make in my 16 years in this body, and I have decided that the cost of not acting outweighs the cost of acting.

I've been able to calculate the financial cost of acting, and I know that it's something less than $700 billion. I could go into a long explanation, but I am actually optimistic that almost all of that money will be recovered by the taxpayer. But I'll tell you, like an explorer in uncharted territory, none of us in this body has any really good judgment or insight into what happens if we fail to pass this bill.

It could mean companies will go out of business. We've been told it would. It could mean more bank failures. It probably will. It will mean the impairment of our parents' and grandparents' pensions. I'm not willing to put that bullet in the revolver and spin it. I'm not willing to take that gamble. I'm not willing to pull that trigger because I am not willing to subject the American people to the worst case scenario.

I don't have a crystal ball. That is one reason that I'll be voting ``yes.'' I will take the political risk, but I will not take a risk on the American people and their future, and on the prosperity of my children and of my grandchildren.

Thank you very much.

12:59 PM EDT

Barney Frank, D-MA 4th

Mr. FRANK of Massachusetts. Madam Speaker, I know this has been as difficult for the ranking member as it has been for me, and I appreciate the generosity of spirit he has brought to this.

I now yield 1 minute to the gentlewoman from Connecticut (Ms. DeLauro).

[Time: 13:00]

12:59 PM EDT

Barney Frank, D-MA 4th

Mr. FRANK of Massachusetts. Madam Speaker, I know this has been as difficult for the ranking member as it has been for me, and I appreciate the generosity of spirit he has brought to this.

I now yield 1 minute to the gentlewoman from Connecticut (Ms. DeLauro).

[Time: 13:00]

12:59 PM EDT

Rosa DeLauro, D-CT 3rd

Ms. DeLAURO. Our first goal as Members of Congress is to rescue the economy, get it moving again, and make sure the middle class and small businesses get on their feet.

I hate that near criminal mismanagement of our economy and near criminal contempt for our values has forced us to act today. Today's financial crisis could lead to an economic meltdown unseen since the Great Depression, and I have a responsibility to avert it in the interest of the country, though I know it will be unpopular.

For too long, the policies of this administration and the previous majority in Congress put middle class families at risk. I am under no illusions about how we got here. And I act today not to help the banks, but to help hardworking, struggling middle class Americans, small business people.

If we do not act, unemployment will rise, small businesses will not meet payroll, and a credit freeze closes the door on families who need loans to pay for schools, cars and housing.

The administration offered a plan; it was unacceptable. This legislation, while imperfect, offers a different approach. It should be coupled with investing in job-creating infrastructure, new green jobs, and measures that give consumers more income.

1:01 PM EDT

Roy Blunt, R-MO 7th

Mr. BLUNT. I thank the gentleman for yielding. I thank him for his leadership today and his leadership during this discussion.

None of us want to be here today. All of us would rather not be dealing with this situation. None of us wanted to see the worldwide economic news over the weekend, but it all happened. And we see things happening in our country today that have to be dealt with, and this body has an opportunity today to deal with those things.

We've reached out to try to compromise on both sides of the aisle on a solution. Now, frankly, I think every speech here today on either side that gets into wanting to allocate blame as part of this vote is not helpful. I do think what could be helpful is this solution. I don't think it is helpful the way we started talking about a ``solution, but it's not this one.'' We started talking about a bailout, and we truly have gotten, with lots of effort, to a program that could be a workout.

These are not valueless assets; these are just assets that don't reflect in today's economy the value that they truly have. And this is a program that, through a number of ways, would begin to stabilize and establish that value again. Whether it was going in and purchasing some of these mortgages, whether it was insuring these mortgages and other assets that are out there, you begin to make money available again for families in America; you begin to make money available again for businesses that

want to expand; you begin to make money available again for student loans; you begin to make money available again for the person who wants to pave the parking area at the service station.

This is not about Wall Street; it's about Main Street. And this is not about the government going in and buying things that don't have value, it's about the government helping establish what that value is. If that's done right, and we believe that all of the transparency that you could possibly hope to have in a government program is here, all of the oversight is here--in fact, if anything, we may have overdone the oversight, but none of us want to have underdone the oversight--and that's all

here.

And this program would ensure, if administered as I think it now has to be under the protections in it, that taxpayers don't lose money. And if, at the end of the process 5 years from now, the Director of the Office of Management and Budget would say to the President there is still some taxpayer loss here, the President then has to [Page: H10392]

come back to the Congress and say to the Congress, here's how we, over the next number of years, recover the remaining

money from the people who participated in the program, not the entire financial sector, not every person in America, but the people who benefited from, who participated in the program.

Taxpayers, unless a future Congress loses its ability to do what the law says they need to do, taxpayers won't lose anything. And, frankly, I think if this is administered the way it almost has to be now, that 5 years from now it will be apparent that taxpayers won't have lost, they will have gained. And while they were gaining, America gets started on the right direction.

If you're watching the stock market over the next few days and we don't act, whether you have portfolios that you know about or not, if you have a pension plan, if you have a son or daughter who wants to go to college, if you have a home improvement you would like to make, you're going to be affected if the economy doesn't begin to reflect the true strength that this economy has.

This bill helps us re-establish the floor for that strength. This bill helps us ensure that taxpayers don't pay any cost. This bill ensures that everybody can watch all the time to see what's going on.

I urge my colleagues to vote for it. I thank my colleagues who have worked hard to get it to this point. I encourage my colleagues, too, that this is no time to try to seek partisan advantage; this is the time to try to seek a bipartisan solution.

1:05 PM EDT

Barney Frank, D-MA 4th

Mr. FRANK of Massachusetts. Madam Speaker, I yield to my colleague from Massachusetts, who has one of the best records in dealing with this set of issues in the Congress, the gentleman from Massachusetts (Mr. Markey).

1:06 PM EDT

Barney Frank, D-MA 4th

Mr. FRANK of Massachusetts. Madam Speaker, I yield to my colleague from Massachusetts, who has one of the best records in dealing with this set of issues in the Congress, the gentleman from Massachusetts (Mr. Markey).

1:06 PM EDT

Edward J. Markey, D-MA 7th

Mr. MARKEY. When the markets go up, Wall Street cleans up. When the markets go down, Main Street gets cleaned out.

Nobody wants to do this. Nobody wants to clean up the mess created by Wall Street recklessness. Nobody thinks this is perfect. But, if we don't act now, we won't just punish Wall Street, but punish innocent people on Main Street who will get cleaned out.

This is the greatest threat to those people since the Great Depression. This bill, because of Barney Frank, protects taxpayers, prevents golden parachutes, and limits excessive CEO compensation, helps prevent home foreclosures, provides strong, independent oversight and transparency. Not just Main Street, but the whole world is looking at us. Our very system of capitalism is under assault.

We must pass this today. We must give support to this. We must protect Main Street across this entire country. Vote ``yes'' on this protection of citizens of our country.

1:08 PM EDT

Barney Frank, D-MA 4th

Mr. FRANK of Massachusetts. Madam Speaker, I yield myself 3 minutes.

Madam Speaker, I have mostly appreciated the kind words directed at me. I say ``mostly'' because it has been my experience here that there is often an inverse ratio between the nice things people say about you and their inclination to vote for your bill. I hope we can overcome that in this situation.

But I want to talk now--and we've worked on this in a compromise way, and I am proud to have worked with the whip and my ranking member counterpart and others across the ideological spectrum. And meeting a national crisis does not give any of us the luxury of doing everything we want.

I hope we will come back here with more votes. And if we have more votes, the next time we negotiate I'll be tougher, but you have got to accept reality.

I wish this was a bill that reflected more of my priorities. I wish I could eat more and not gain weight, but I have learned that acting imprudently on my wishes that cannot be realized is not helpful. But I do want to address those who share with me a commitment to dealing with people who are low on the economic spectrum.

Madam Speaker, I do my work, and I work on a lot of the general issues. But if there weren't poor people in this world and if we didn't have discrimination, I wouldn't be here. That's why I'm here.

What I have tried to do every time we've had a major bill, I'll be honest, is to use the leverage I get as chairman because there are things that everybody needs to put in for the poor people, to put in something for the people who don't otherwise get a fair shake. And sometimes there's a lot of other things in there. But I will tell my colleagues this, particularly my fellow liberals, if we aren't prepared to accept some of the things we don't like, we will not have the power to deliver for

the people we care about. We do not unilaterally have the power to impose policies we would like, and therefore, a compromise is required.

What do we have in this bill? I've got a letter I'm putting in the Record from every liberal advocacy group--not ACORN, I want to assure my colleagues over there before they have a conniption--but every other group, the Low-Income Housing Coalition, the Legal Aid Society, National Coalition for the Homeless. And it says: ``We are writing to thank you for the inclusion of measures to protect renters.''

People all over this country who rented, who didn't make an imprudent decision to buy a house, found themselves being evicted because somebody didn't pay the mortgage. We try to protect them against this. We try to keep subsidies. I tell you this, the lower-income people, the poor people, they will get nothing if we're not prepared to compromise some.

Secondly, we have in here--and I understood what the gentleman from Ohio (Mr. Kucinich) was saying--very good language on foreclosure. Is it everything I wanted? No. But I'll tell you this, if this bill passes, we will have a Federal Government empowered to do, for the first time, significant reductions in foreclosures. Now, I don't know who's going to win in November, but I will tell you this, this will put in the hands of whoever the President is [Page: H10394]

the

power to do a great deal of good. Please don't throw it out because you're unhappy with some other provisions.

September 29, 2008.

Hon. Barney Frank,

Chair, Committee on Financial Services, House of Representatives, Washington, DC.

DEAR CHAIRMAN FRANK, we are writing to thank you for the inclusion of measures to protect renters in this Emergency Economic Stabilization Act of 2008. The provisions that will allow renters with leases to stay in place and that provide for the continuance of existing protections for tenants, including rental subsidies, are very important to ensure that this financial crisis does not disrupt the lives of some of our most vulnerable citizens.

Thank you for your leadership on this issue.

Yours truly,

Center on Budget and Policy Priorities; City of New York; Coalition on Homelessness and Housing in Ohio; Community Economic Development Assistance Corporation; Community Service Society of New York; Jesuit Conference USA; Housing Preservation Project; Legal Aid Society; and National Coalition for the Homeless.

National Housing Conference; National Housing Law Project; National Housing Trust; National Law Center on Homelessness & Poverty; National Low Income Housing Coalition; National Policy and Advocacy Council on Homelessness; Stewards for Affordable Housing for the Future; The Community Builders--DC; and Urban Homesteading Assistance Board.

--

NATIONAL ASSOCIATION

OF HOME BUILDERS,

Washington, DC, September 29, 2008.

Hon. John Boehner,

Minority Leader, House of Representatives, Washington, DC.

DEAR MINORITY LEADER BOEHNER: On behalf of the 235,000 members of the National Association of Home Builders (NAHB), I am writing to urge your support for the Emergency Economic Stabilization Act of 2008. NAHB strongly believes this bipartisan proposal will help remedy the extreme turmoil and uncertainty currently facing the nation's financial markets.

Falling home prices, mounting foreclosures, and a frozen credit market have taken a severe toll on the nation's economy. As the financial markets struggle, mortgage credit costs are increasing and home builders are finding it more and more difficult to obtain any business credit. The Emergency Economic Stabilization Act of 2008 will provide an outlet and patient market for troubled mortgage assets, thus restoring confidence in global financial markets and allowing credit to once again flow to

businesses. Ensuring that credit-worthy home buyers, builders and other small businesses have access to credit is absolutely essential to putting the American economy back on track.

Again, NAHB believes that the Emergency Economic Stabilization Act of 2008 represents the best opportunity to address the turmoil facing the U.S. economy, and we urge your support for this carefully-crafted, bipartisan legislation. We look forward to working with Congress to move this legislation forward in an expeditious manner.

Sincerely,

JOSEPH M. STANTON.

--

Board of Governors of the Federal Reserve System Press Release

I welcome the agreement by the Congress and the Administration on a comprehensive plan to stabilize our financial system and support our economy. This legislation should help to restore the flow of credit to households and businesses that is essential for economic growth and job creation, while at the same time affording strong and necessary protections for taxpayers. I look forward to swift passage of the legislation.

In addition, the Federal Reserve Board supports the timely actions taken by the Federal Deposit Insurance Corporation, which demonstrate our government's unwavering commitment to financial and economic stability.

--

AMERICAN FINANCIAL

SERVICES ASSOCIATION,

September 28, 2008.

Hon. Nancy Pelosi,

Speaker, House of Representatives, Washington, DC.

Hon. Harry Reid,

Senate Majority Leader, U.S. Senate, Washington, DC.

Hon. John A. Boehner,

House Minority Leader, House of Representatives, Washington, DC.

Hon. Mitch McConnell,

Senate Minority Leader U.S. Senate, Washington, DC.

Dear Speaker Pelosi, Senator Reid, Leader Boehner, and Leader McConnell, The American Financial Services Association (AFSA) is pleased to support the Emergency Economic Stabilization Act of 2008. AFSA hopes that Congress will pass this critically important legislation and send it to the President's desk as soon as possible. The plan is essential to restoring certainty, stability and liquidity to the credit markets.

AFSA is encouraging the Securities and Exchange Commission to use its new authority in the bill to suspend mark to market accounting standards as quickly as possible. In addition, AFSA is urging the Secretary of the Treasury to use the authority given to him in the legislation to make finance companies eligible to participate in the rescue plan, as well as to include auto, small business and student loans as eligible assets under the definition of troubled assets.

Sincerely,

Bill Himpler,

Executive Vice President, Federal Affairs,

American Financial Services Association.

--

Memo

Date: September 29, 2008.

To: Members of the U.S. Senate and House of Representatives.

From: Edward L. Yingling, President and CEO, Floyd E. Stoner, Executive Vice President, Congressional Relations & Public Policy, American Bankers Association.

Re: Support for the Emergency Economic Stabilization Act of 2008.

I am writing on behalf of the entire banking industry to express our support for the compromise legislative package that Congress is considering to address the current financial crisis.

The crisis on Wall Street and in financial centers around the world has reached a point where extraordinary action is required. The proposal put forth by Treasury Secretary Henry Paulson and modified by Members on both sides of the aisle is a constructive solution to the crisis we face. It will provide the financial backstop needed to unfreeze the financial markets and provide for greater transparency and accountability for firms that participate in the program.

The action that Congress is taking is not one that the regulated banking industry sought, but is necessary to address this financial crisis to ensure that credit is available to consumers and businesses on Main Street. There can be no doubt that the freezing up of the world's credit markets and the loss of confidence we are seeing will, if left unchecked, dramatically impact consumers and businesses of all sizes.

While we support the basic construct of the compromise package, we are concerned about the provision that was added at the end of the process to have the President assess the final costs to the government, after five years, and make a legislative proposal on how to recoup those costs from the financial services industry, possibly through the assessment of a fee. As Secretary Paulson, Chairman Bernanke, and many Members of Congress have consistently pointed out, this crisis was the result of actions

of unregulated mortgage brokers and failures on Wall Street, not of actions of regulated, FDIC-insured banks.

We support this compromise package because we recognize the impact that a failure to pass this legislation would have on the national economy.

1:12 PM EDT

John A. Boehner, R-OH 8th

Mr. BOEHNER. Let me thank my colleague from Alabama for yielding and thank him for his words.

The gentleman, along with the chairman, have been through a tough period. And it's not just been the last week or 11 days; it's been really over the last year. And I want to thank both of them for their good work.

You know, the American people are angry, angry that this is happening to them, angry about their future. They're scared. And there isn't a Member in this room that isn't as angry as they are and not a Member in this room that isn't just as scared about where we are.

I've been here for a long time, a lot of you have been here for a long time; and we've cast a lot of tough votes along the way. I don't know that they get much tougher than this because nobody wants to vote for this, nobody wants to be anywhere around it. And I don't blame you, I don't want to be around it.

We have a bill in front of us that is a bipartisan bill. We've got Members on the Democrat side who have all kinds of things they want in this bill that aren't in here. I have a lot of my Republican friends who are irritated that this issue and that issue aren't in here, that we don't do more to attract private capital to help fix this problem. I understand that.

And so we have an imperfect product. But we have a product that may work, a product that may work if we can get the votes to pass it, which, I don't have to tell any of you, is in serious doubt.

I just want everybody to think about where we are. While there is a lot of risk to any Member who votes for this, both sides of the aisle, just think about what happens if we don't pass this bill. [Page: H10395]

Think about what happens to your friends, your neighbors, your constituents. Think about those retired people whose retirement income will shrivel up to zero. Think about the jobs that will be lost. If I didn't think we were on the brink of an economic disaster

it would be the easiest thing in the world for me to say no to this; but I believe the risk in not acting is much higher than the risk in acting.

This Congress has to do its job. None of us came here to have to vote for this mud sandwich--I can describe it a lot of different ways, you all know how awful it is. I didn't come here to do this. I didn't come here to vote for bills like this. But let me tell you this, I believe Congress has to act, and that means each and every one of us have to act. These are the votes that separate the men from the boys and the girls from the women.

[Time: 13:15]

These are the votes. These are the votes that your constituents sent you here to decide on their behalf. They didn't tell you it was going to be easy. They didn't tell you that it's going to be black and white, you won't have any shades of gray. These are the kind of votes that we have to look into our soul and understand and ask ourselves the question: What is in the best of our country?

I believe what's in the best interest of our country, as I stand here today, is to vote for this bill. While imperfect, while not having everything everybody wants, I believe that we have to vote for this bill and do our very best to keep ourselves from the brink of an economic disaster that will harm all of our constituents.

So I ask all of you, both sides of the aisle, what's in the best interest of our country? Not what's in the best interest of our party. Not what's in the best interest of our own re-election. What's in the best interest of our country?

Vote ``yes.''

1:17 PM EDT

Barney Frank, D-MA 4th

Mr. FRANK of Massachusetts. Madam Speaker, I now have the privilege, to the regret of absolutely nobody, of closing out this debate by yielding 1 minute to the very able majority leader, who has played such a constructive role, the gentleman from Maryland (Mr. Hoyer).

1:17 PM EDT

Steny Hoyer, D-MD 5th

Mr. HOYER. I thank the gentleman for yielding.

Madam Speaker, we swore an oath to protect this country, to protect our Constitution, and protect our people.

Most days in the House of Representatives, we make judgments. Those judgments are between what we think are good and better and perhaps bad. Most days are not like today. This is a day of consequence for the American people. This is a day of consequence to our country. This is a day when the Democratic leader, myself, rises to follow the Republican leader, and they speak with one voice as America faces crisis. That's what Americans want us to do.

I congratulate Mr. Boehner for his courage and for his leadership. And I congratulate my good friend Roy Blunt, with whom I have worked on issue after issue to try to bring us together, not on behalf of Republicans or Democrats but on behalf of our people.

Why should taxpayers lend out their own money to solve a crisis brought on by someone else's greed? Because when it comes to our economy, none of us, none of us is an island. We are all bound together in boom or bust, in growth or collapse, from the bankers on Wall Street to the smallest rural community that we represent.

Imagine, my colleagues, that we do nothing. A million more homes will likely be foreclosed on. Banks would likely be unable to lend. Credit, the lifeblood of any economy, might dry up across America. That means families unable to take out a loan to buy an appliance when their washing machine or refrigerator breaks, or send a child to college. It means retirement savings devastated. It means businesses shrinking all over America unable to meet their payrolls, and jobs lost and families at risk.

That's what Mr. Boehner said and that's what I say. That's what Mr. Paulson has said. That's what Mr. McCain has said. That's what Mr. Obama has said. America faces a crisis, and Americans call out for us to come together to confront that crisis on their behalf.

It means workers losing their jobs on top of the more than 600,000 that we have lost this year. The meltdown would begin, it is true, in a few square miles in Manhattan. But before it was over, all of us know no city or town in America would be untouched.

With this bipartisan rescue plan, I am hopeful, every one of us in this body is hopeful, the President of the United States is hopeful, and I know that every American that we have the honor and privilege of representing hopes that we will prevent the worst-case scenario.

Under a plan put forward by President Bush, the government would purchase the bad assets clogging up our financial system, with the goal of restoring the flow of necessary lending and credit.

The original plan gave unchecked power to the Secretary of the Treasury to spend $700 billion as he saw fit. We, who represent the American public, who will be at risk, we hope they will not lose and we think they may not, but we said, no, we cannot do that. Our responsibility is to ensure transparency and oversight so that we know how their money is being spent and can ensure to the extent possible that it is spent in as honest and as effective fashion as we can effect. We made clear that this

Congress does not write blank checks.

Both Chambers and both parties negotiated around the clock. I especially want to thank my colleague, as I have before, my friend Minority Whip Roy Blunt. Roy Blunt came to the table, and everybody that has been at that table has said Roy Blunt represented the American public at that table, as Barney Frank represented the American public at that table.

We've made significant improvement to the President's plan. First, we fought to add provisions ensuring that if and when financial institutions helped by this rescue begin to grow again, taxpayers will be the first to share in their profits; so even though this bill authorizes a total of $700 billion, as Mr. Spratt pointed out earlier today, the Congressional Budget Office does not believe that it will be anywhere near that price tag.

Some of you have heard me say that I was sworn in to the Maryland State Senate in January of 1967. On that same day in my State, Spiro T. Agnew was sworn in as Governor of the State of Maryland. And in his inaugural address, he said to all of us that the cost of failure far exceeds the price of progress. I think that is what is at stake here today, that the cost of our failure will far exceed the price of the progress we try to effect in this bill.

Secondly, we added a repayment clause originally championed by Congressman Tanner. And after 5 years the administration will have to tell us the true net cost to taxpayers and submit a plan laying out how Wall Street and financial institutions will pay back the taxpayer. While the final provision we negotiated with Republicans is not as strong as either of us would have liked, it is a step in the direction that both of us sought.

Thirdly, this bill restricts the compensation of executives. We ought not ask taxpayers to take a risk and advantage people who are making millions either as they work or as they leave successful or failed institutions.

Fourth, the Treasury Secretary's decisions will be subject to oversight and judicial review.

Finally, we will help homeowners change the terms of their mortgages to forestall the 2 million projected foreclosures that could further cripple our economy and devastate our neighborhoods. I know that it is not as good as some would like, but the alternative is nothing, and that is not acceptable.

We have ensured that this bill will not reward Wall Street for bad risks. Instead, it will keep local banks open. It will protect retirement accounts. It will help families get the credit they need. It will help small businesses stay alive and hiring.

But we must also reform our financial sector to safeguard against another collapse like this, and we will do so. Fiscal irresponsibility and regulatory neglect were at the core of this crisis. We must and we will investigate just how that failure occurred. And we will strengthen regulation and put economic referees back on the field. Responsible oversight must return to Wall Street.

Today, though, today, we are doing our best to forestall what Secretary [Page: H10396]

Paulson and Federal Reserve Chairman Bernanke are predicting would be a disaster.

I opened by saying America was in crisis and that this was a day of consequence for our country. They have sent us here to respond. Today, this is not a Republican House or a Democratic House. It is the People's House. And the people, by an overwhelming majority, have asked us to act. They have not said act on this bill in this way because, like us, they're not sure. But what they do know is that inaction is not an option, that inaction will result in greater pain for our people and for our country.

So I rise with my friend John Boehner and my friend Roy Blunt and with Speaker Pelosi and with President Bush and with John McCain and with Barak Obama and say this day of consequence, let us meet the challenge, let us act, let us confront this crisis, let us be the best of the people's House.