12:06 AM EDT

Louise Slaughter, D-NY 28th

Ms. SLAUGHTER. Thank you, Mr. Speaker.

For the purpose of debate only, I yield the customary 30 minutes to my friend from California (Mr. Dreier). All time yielded during consideration of the rule is for debate only. I yield myself such time as I may consume. I also ask unanimous consent that all Members be given 5 legislative days in which to revise and extend their remarks on House Resolution 1517.

12:06 AM EDT

Louise Slaughter, D-NY 28th

Ms. SLAUGHTER. Mr. Speaker, I am saddened to say that rarely has this body met under more dire circumstances. Our stock market is a roller coaster and the unemployment rate has soared. Many of our financial institutions, some of which were deemed ``too big to fail'' are on the brink of collapse. Our economy, the biggest and most robust in the world, is at a standstill.

This is the greatest financial crisis since Herbert Hoover's administration's lack of oversight led our Nation into the Great Depression.

We cannot steer ourselves through this crisis until we fully understand the road that we took to get here. After all, if we do not know what went wrong, how can we be sure to get it right in the future?

Like so many Americans and Members of the New Direction Congress, I am deeply disappointed by this administration's reckless deregulation that wrecked our once-booming economy.

Since the beginning of his first administration, President Bush has put incompetent people in charge of the Nation's most critical regulatory agencies; but because of this administration, big business always came first.

A complete loss of transparency and a reliance on voluntary measures led to the total deregulation of the financial services industry. Yet as SEC Chairman Christopher Cox said this week, ``The last 6 months have made it abundantly clear that voluntary regulation does not work.''

He went on to say the program was ``fundamentally flawed from the beginning, because investment banks could [Page: H10317]

opt in or opt out of supervision voluntarily. The fact that investment bank holding companies could withdraw from this voluntary supervision at their discretion ``diminished the perceived mandate'' and ``weakened its effectiveness.''

As President Franklin D. Roosevelt said, ``We have always known that heedless self-interest was bad morals. We now know that it is bad economics as well.''

This administration should have heeded Roosevelt's advice and followed his path to economic recovery by reinstituting important regulations on Wall Street. It is shocking and shameful that it took this catastrophe to show the administration that big business cannot be expected to regulate itself in good conscience.

A recent survey by the University of Michigan found that 9 in 10 Americans feel that the economy is in a recession. It took a crisis of this magnitude to teach this administration what the American people clearly knew. And every day that Americans see the financial sector falter, they lose confidence in our economy. With many of the country's major financial institutions declaring bankruptcy or on the verge of declaring bankruptcy, we no longer have a choice on whether to offer a rescue package.

The alternative, we've been told, is pure disaster.

Financial failures help no one and put the savings of every family in jeopardy. Our jobs, our retirement savings, our college savings accounts for our children's future, our investments in our own future are at risk due to the failure of this industry.

I have heard from hundreds of my constituents who are enraged at the lack of oversight that caused this mess. Congress is going ahead with this intervention because we've been warned that without it, Main Street could feel as much pain as Wall Street.

When deregulation happened in the last century, it led to bread lines and Hoovervilles. Today, the New Direction Congress is working to shield Main Street from all of that and to lead us out of this mess to a brighter and more prosperous future.

As FDR said, ``There are many ways of going forward, but only one way of standing still.'' And after much deliberation, we are moving forward with a bill that we hope will benefit all Americans. We believe and hope that this legislation can begin to stabilize our markets and start recovering consumer confidence.

One week ago, we were handed an ultimatum for a blank check of $700 billion which lacked the very accountability and transparency--let me repeat that because this is so important--that demand for the bailout lacked the very accountability and transparency that contributed to the problem in the first place. And many safeguards, I'm happy to say, have been added to this bill since that time.

We've worked hard to ensure that this package benefits consumers and homeowners more than it does the people who caused the crisis. We vowed that any bill that we passed would include serious oversight and transparency of any funds provided to the Secretary of the Treasury, and that's exactly what this proposal does.

As the Speaker said, we have a three-part plan to reinvest, reimburse, and to reform.

We will first rescue the troubled credit and financial markets to stabilize and to reinvest in our economy and insulate hardworking Americans; second, we will reimburse the taxpayer for every dime as the plan begins to work; and third, we will reform how business is done on Wall Street with no more golden parachutes for CEOs, trimmed executive compensation, and sweeping congressional investigation and regulations to prevent future abuses.

By passing this bill, we're standing up for all Americans by ensuring that there will be no help for Wall Street without this help for Main Street. We're standing up for taxpayers by ensuring that this is not a blank check, and we are standing up for homeowners by taking actions to prevent foreclosures that are driving down home values across America.

To help Americans keep their homes, this bill will allow the government to help modify loans by reducing the principal, the interest rate, or by increasing their window of time to pay back the loan.

Although the administration's initial proposal called for no congressional or agency oversight, Democrats will require an appointed oversight panel to frequently report to the Congress--monthly--on what the Secretary of the Treasury is doing.

In addition, Democrats insisted that the nonpartisan Government Accountability Office, the GAO, will have an office inside the Department of Treasury to handle the funds. This will help to ensure any money spent is done in a way that is responsible to the American people.

We are committed to using as little taxpayer money as is absolutely necessary, and we are set on recovering every cent.

Oversight and Government Reform Committee Chairman Henry Waxman will begin his oversight hearings next Wednesday. And in January with a new Congress and a new President, we will be ready to reinstate the regulations so cavalierly removed by the administration which believed that the financial industry could regulate itself--and it has with very dire results.

Finally, Democrats pushed to ensure that the government receives shares of any company that it provides with aid. After agreeing to rescue AIG from filing for bankruptcy, the government received a nearly 80 percent share in that company. The action was reassuring enough to the market that people are now clamoring to buy the AIG assets. By making sure the government gets shares of companies that we aid, Democrats are working to revitalize this industry in a way that will benefit the taxpayers

who are funding this rescue until the industry recovers; and by doing so, the New Direction Congress is standing up for swift action to ensure a more sound economic future for all Americans.

Mr. Speaker, we saw what happens when an administration deregulates industry to a point where insecure companies are expected to police themselves. And that is why this Democrat-led Congress is doing everything possible to ensure that America keeps working and that the government is working for America.

I reserve the balance of my time.

[Time: 00:15]

12:15 AM EDT

David Dreier, R-CA 26th

Mr. DREIER. Mr. Speaker, I would like to begin by thanking my friend from New York, the distinguished Chair of the Committee on Rules, the gentlewoman from Rochester for yielding me the time. I yield myself such time as I may consume.

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

12:16 AM EDT

David Dreier, R-CA 26th

Mr. DREIER. Mr. Speaker, like most of my colleagues, I'm mad as hell that we are here. This is a very troubling moment in our Nation's history, and it's taken an awful lot of difficulty for us to get to this point.

I'd respond to the remarks offered by my good friend by saying that there is enough blame to go around. I'm angry at Wall Street bankers. I'm angry at mortgage brokers. I'm angry at individuals who have chosen to live way beyond their means, creating an anger level among those very responsible Americans who are paying their mortgages, meeting their car payments, and their other responsibilities. And I'm angry at Washington, D.C., all the way around.

Mr. Speaker, the underlying financial rescue bill that is before us this morning is the product of very difficult negotiations to address extremely challenging economic circumstances. Our economy, as we all acknowledge, is under tremendous duress right now, and it can be felt all across America by individuals and families from all walks of life.

While the dire circumstances of recent weeks have dominated the headlines, working Americans have been witnessing our national economic woes for many months. Long before the fall of large investment banks or high profile bailouts, they felt substantial economic pressure. They have faced steeply rising energy and food prices, while fearing for their jobs and their homes. As housing markets have crumbled and the credit crunch has ensued, the gulf between Main Street and Wall Street has never seemed

so huge.

But, Mr. Speaker, the reality is the two have never been more closely entwined than they are right now. Foreclosures on Main Street caused the [Page: H10318]

value of many Wall Street assets to plummet. The resulting credit crunch has paralyzed growth at businesses, large and small.

This, in turn, has stunted job creation and driven up unemployment. The falling stock market threatens working Americans' pensions, retirement plans, and savings.

From the very beginning of this process, Republicans have known that we needed to craft an effective rescue package that returns our entire economy to sound footing. We knew that we simply could take an approach that pits Main Street and Wall Street against each other. As housing prices have collapsed, job creation has stagnated and the stock market has fallen, we have all suffered.

An effective economic plan is badly needed to restore our economy and create opportunity and prosperity for all Americans. We simply don't have the option or ability to save Wall Street without creating opportunity on Main Street and vice versa.

This is not a battle of us versus them. Mr. Speaker, we have to remember that we are all in this together as Americans.

Republicans also knew that we had to find a way to balance two powerful but opposing forces: the urgent need to act expeditiously, and the imperative to act prudently and effectively. We understood the urgency of our economic circumstances, but we also know that rushing into a flawed approach would benefit no one and risk plunging our economy into deeper turmoil.

From the outset, we demanded strong protections for taxpayer dollars. We demanded transparency and accountability. We demanded that the financial burden of any assistance not ultimately lie with the taxpayers. We believe, Mr. Speaker, very strongly that these provisions had to be the pillars of any financial rescue plan, and we knew that we had the backing of our constituents in our efforts.

Over the past week, like all of my colleagues I'm sure, I've received hundreds of calls, e-mails, and letters demanding that the taxpayers do not foot the bill for the poor choices of troubled businesses. I have to say that the most interesting thing about the concerns that were expressed to me was that they were clearly growing out of a true grassroots movement. There was no advocacy group motivating those who were contacting us. There was no organized effort on the part of special interest

groups.

I was hearing from hundreds and hundreds of working Americans who have been following the news reports and the negotiations. They felt very strongly that the initial proposal was simply unfair to the taxpayers. They told me in no uncertain terms that any deal without taxpayer protections, accountability and oversight was totally unacceptable, and with that, I'm in complete agreement.

Mr. Speaker, for several days our Democratic colleagues proceeded with negotiations without any regard for exactly these kinds of provisions that Republicans were insisting on. As a result, the negotiations went nowhere. Republicans were resolute in their insistence that any deal must not leave the taxpayers on the hook for this $700 billion rescue plan.

We are here this morning with a bipartisan package because we, as Republicans, remained committed to our principles and were finally given a seat at the table. The deal that has been crafted will allow the Treasury to unclog the financial markets and help begin the process of restoring our economy's strength and vitality, but it does so without providing a taxpayer-funded windfall for Wall Street. And I want to repeat that, Mr. Speaker. This package moves ahead without providing a taxpayer-funded

windfall for those on Wall Street.

This bill requires companies to pay-to-play. There's no free lunch here. Any company that comes to us for assistance must cover their risk by paying insurance premiums, and their executives will not be able to walk away with extravagant compensation at taxpayer expense. This bill caps severance pay for participating companies. In the case of a total takeover, golden parachutes are banned entirely.

Now, Mr. Speaker, the Federal Treasury will also get equity in the companies that ask for help so that the taxpayers will reap the benefits of their assistance. There will be bipartisan oversight of this process every step of the way, so that Republicans can continue to ensure full transparency and accountability.

Most important of all, the overwhelming message that has come from my constituents is that there must be no blank check. Treasury must report to Congress in order to keep the assistance program going; and, Mr. Speaker, after 5 years, if the taxpayers have lost a single penny in this process, the President will have to submit a plan to Congress to recoup the funds from the participating companies.

In short, the taxpayers have a 100 percent guarantee that they will not be left holding the check for this rescue plan, and we felt very strongly about ensuring that safeguard.

Now, Mr. Speaker, we are all dismayed that we must take action at all. I don't believe any of us ever thought that we would face the grim reality of our current economy or the prospect of crafting a plan to rescue our financial markets. Because we, as Republicans, stuck to our guns, we have before us today a bill that will help to get our economy back on track without putting the burden on the backs of the American taxpayer.

With strong oversight, accountability and a guarantee that the Federal Treasury will be fully repaid, we can restore confidence in our economy. We can put ourselves back on the path to growth and job creation.

And perhaps most important, we can demonstrate to the American people that, when bipartisanship prevails, their demands are heard and implemented.

I have to say that as we listen to these messages which have come from our constituents, as I said first and foremost, there has been this very strong and compelling argument that the taxpayer not be responsible for shouldering this responsibility, but there were a wide range of other concerns that came to the forefront.

I have an e-mail that came into our office from a man in Arcadia, California, who wrote, I am writing to express my strong request that, with respect to the current financial ``bailout'' bill, you vote against it unless there's a provision that has been made to assure that those executives of companies that will receive funds in exchange for their under-performing mortgages, they are restricted in their ability to use government funds to pay excessive compensation.

And, two, that you assure that proposals to load union representatives onto the boards of these companies as a condition of receiving funds is removed from the legislation. There is absolutely no reason to add union representatives to public companies. If the unions want representation, they should purchase enough stock to be able to elect a board member.

This is a message that has come through consistently, and I'm happy to say, in this package, there is not going to be this government or union representation provided onto the boards of these companies.

There was also, Mr. Speaker, great concern raised by many of my constituents that the organization known as ACORN, which is a very, very controversial organization under very harsh criticism for improprieties, was initially going to be receiving funding, and I'm very happy to report to our colleagues that not one penny will be going to that organization known as ACORN.

There was another provision that had been included in the bill, Mr. Speaker, the so-called ``cram down provision,'' whereby we would see bankruptcy courts actually establishing something that the marketplace should do, that being the interest rates that are paid by those who hold mortgages. That is not provided. That is not going to be allowed under this provision.

And, also, I have to say that there's a so-called mark-to-market accounting structure, which has dramatically diminished the value of properties, and I personally believe that the mark-to-market accounting structure should be completely abandoned. This legislation calls for a study which I hope very much will lead to that because it has played a role in creating some of the tremendous inequities that we see in our economy today.

[Time: 00:30]

And as I mention in my statement, the notion that those on Wall Street, [Page: H10319]

who are in many ways responsible for this, would somehow be able to continue receiving these golden parachutes, multimillion dollar packages of benefits, the fact that we will prevent that with this legislation is something that I think is very, very important as we proceed.

And so, again, first and foremost, taxpayers, Mr. Speaker, should not be saddled with this responsibility. And this bipartisan package guarantees that they will not be saddled with this because of the fact that within this 5-year period of time the President, if one single penny of taxpayer dollars is found to have been utilized, there is a provision whereby the President of the United States must come to us with a package which will most likely call on those institutions which have been the

direct beneficiaries of this program, will be forced to repay to the taxpayers those dollars.

So let me say that, as we look at this package, Mr. Speaker, there have been very understandable concerns. We all hate, we hate the fact that we are standing here dealing with this. And again, I will say there is plenty of blame, plenty of blame to go around. I know my colleagues on the other side of the aisle will want to expend time and energy blaming the deregulation and the policies that have been propounded over the past several years, but in the exchange that I had with the distinguished

majority leader--now last night since it's 12:31 in the morning here in Washington--when I was last night in this exchange with the majority leader, we were talking about the challenges that existed in the post-depression era legislation that was moved forward.

And frankly, we, in the past several years, have been living with very antiquated, post-depression era regulation, and we have even seen the marketplace change dramatically. And over the past couple of decades we have seen a band-aid approach to respond to much of that depression-era regulation with which we still contend.

What is needed, Mr. Speaker, is a 21st century regulatory structure to deal with the freedom that exists in this 21st century marketplace. And that's why, while adequate accountability, transparency, supervision, and oversight is essential, I caution my colleagues who believe that with passage of this legislation they can embark on this very, very zealous quest to dramatically increase the regulatory burden on the marketplace.

The rest of the world has recognized that freedom is the answer; freedom is the answer and free markets are the answer. And that's why I hope that, as we move forward from this package, we do not in any way take a retrograde step in our quest to ensure that we pursue that.

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

12:33 AM EDT

Marcy Kaptur, D-OH 9th

Ms. KAPTUR. With the highest regard for the chairwoman of the Rules Committee, I rise, regrettably, in opposition to this closed rule and against the bailout bill.

We need the right deal, not a fast deal. The White House is counting on fear to propel this Congress into hasty and inappropriate action on a Wall Street bailout that is not in the interest of our Republic. There is a better way. In fact, it is as likely the expenditure of $700 billion will actually stand in the way of the most effective means to remedy the economic challenges facing us.

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, 3,000 banks failed; interest rates were at 21 percent; money center banks went down; every bank in Texas went down. But the economic instability was resolved in 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. A system of net worth certificates issued by FDIC was used to get through the credit shortage. FDIC regulated transactions with banks, through a system of subordinated debentures and promissory notes, was enacted. FDIC assumed power over executive salaries and controlled dividends to restore health and rigor to the market.

The FDIC adopted a contingency plan to nationalize all institutions in the event it was necessary. 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. In other words, the market was used to heal the market, not set up a big government bureaucracy at the U.S. Treasury, run and overseen by the very reckless people who caused these problems in the first place.

Today's economic challenge is a credit crisis, not a liquidity crisis. This bill does not address that. The housing bubble that burst is at the heart of our dilemma. Until Main Street housing foreclosures are remedied, the situation will not improve. This bill does not address the serious mortgage workout and mortgage servicing challenges facing Main Streets across this Nation.

Taking a trillion dollars of taxpayer money and buying bushels of unknown and unvalued paper is not smart. It will delay resolution of that housing crisis. In fact, this bill actually asks taxpayers to buy a garbage truckload of worthless paper, everything from subprime auto loans, to foreign bank loans, to hedge fund paper, to credit swaps. Every reckless Wall Street deal thought up these past several years they want to dump on us. We say: No.

Now, this bill also does nothing for reform, for example, to address the shortcomings of the SEC, which has done more than any other regulatory body to cause this problem by its false accounting, overinflated leverage ratios, and by destroying fair value accounting.

12:36 AM EDT

Marcy Kaptur, D-OH 9th

Ms. KAPTUR. I thank the gentleman for yielding me--very, very much.

The SEC must be a major part of the solution. This bill does not do it.

Finally, Mr. Speaker, before one cent is even considered, this Congress first ought to pass a bill to create and fund an independent Emergency Financial Crimes Unit to investigate the malfeasance, securities fraud, false accounting, and insider trading that were the root causes of this extravagance that must now be resolved in a rigorous and thoughtful manner. This bill does not do it. Draft the right deal, not a fast deal.

I thank the gentlelady and the gentleman for yielding.

12:37 AM EDT

David Dreier, R-CA 26th

Mr. DREIER. Mr. Speaker, at this juncture, as you can see, I'm here all alone. And so I will reserve the balance of my time and look forward to the very thoughtful and eloquent statements coming forward from our colleagues on the other side of the aisle.

12:38 AM EDT

Sheila Jackson-Lee, D-TX 18th

Ms. JACKSON-LEE of Texas. Let me thank the gentlelady from New York as the chairman of the Rules Committee, and particularly for the very hard work of the committee, and make note of the fact that it's almost 12:40 a.m. and there has been a lot of heavy lifting. And I want to acknowledge the work of our leadership, and particularly Chairman Frank and his staff, along with Speaker Pelosi and the entire team of very agile and very, if you will, comprehensive thinking team that

was thrown a hard ball just a week ago by the administration, a two-and-a-half-page document that simply said, move the deity, if you will, from the person of faith and give it to the Secretary of Treasury.

We had a tough job. And I, frankly, believe that we did everything we could to ensure that we looked at this in the best way possible. But, Mr. Speaker, I come to suggest that all of the goals that were intended--transparency and consumer protection--clearly need further edification. And frankly, I would like to use the Texas term ``whoa.'' I believe that we need to stand back, monitor the markets, and to begin to craft legislation that is truly reform.

Let me tell you why. First of all, I know that my good friend from California gave us a detailed essay on some of the things that were not in this bill, [Page: H10320]

and he mentioned that people in America are living above their means. Well, I've been in a number of hearings, listening to homeowners from around the country on the issue of their mortgages. And I will tell you that these are hardworking Americans who were not living above their means; they were accepting

the banking products that were given to them. They were hardworking, they saw the opportunity to invest in America's dream, a home, and they continued to work and pay their mortgages. But no one explained to them about adjustable rates so that their mortgage would be at

one rate, and then a couple months or a year later it was accelerating into an unbelievable and intolerable amount. And then of course we've heard some Members of this body accuse minorities for being the cause of this debacle. How insulting. How unreal. And how untrue.

What we need to do is to work together, as my constituents have asked. One constituent said, show me what the catastrophic event would be. One said, I'm a community banker, and I have never loaned, if you will, a subprime loan. And I'm well capitalized, why am I being victimized?

This bill, at this status, will not protect any of the homeowners or get them the kind of relief we would like.

And so I say to this body, the Financial Stability Oversight Board does not have any enforcement. The Congressional Oversight Panel does not have any enforcement.

12:41 AM EDT

Sheila Jackson-Lee, D-TX 18th

Ms. JACKSON-LEE of Texas. As I quickly speak, the amendments I offered all capture the idea of protecting the consumer. It, in essence, provides judicial relief.

In this bill, it specifically prohibits the judiciary intervening for equitable or/and injunctive relief. That means that if the assets are being misused by the officer that we have designated, then the courts cannot go in. Where are the checks and balances?

I believe that these amendments that I offered dealing with these questions of balance and providing money for mortgages, and et cetera, would have made this a better bill. So I ask my colleagues to consider that, and of course to consider these 400 economists quoted.

12:42 AM EDT

David Dreier, R-CA 26th

Mr. DREIER. Mr. Speaker, I yield myself 1 minute, and I do so to respond to the statement of my good friend from Houston, and that being that, when I said that there are some who have been living beyond their means, I know that there are people who, in fact, have been lured into particular products which have encouraged them to live beyond their means. And that's why, when I talked about adequate supervision and oversight to ensure that this doesn't happen, that's very important.

But I will say that, as I listen to my constituents, a message which has come through very loudly and very clearly, Mr. Speaker, is that people are upset when there are those who clearly have lived way beyond their means, when taxpayers who are paying their mortgages, meeting their car payments and other obligations are forced with the prospect of shouldering responsibility. And that's why I'm very, very pleased that we've stood forward, and that this package will not, in fact, thrust that responsibility

onto the American taxpayer.

12:43 AM EDT

Dennis Kucinich, D-OH 10th

Mr. KUCINICH. I thank the gentlelady for her kindness.

I rise in opposition, regretfully, to the rule and to the underlying bill. If we really wanted to protect the taxpayers, we wouldn't be paying cash for trash, $700 billion in taxpayers' funds which turns our beloved U.S. Treasury into a toxic landfill.

This plan is a $700 billion bailout of Wall Street speculators, bankers, lenders who operated for years without the oversight of the Securities and Exchange Commission, the oversight of the Federal Reserve.

This legislation doesn't do anything to punish the speculators. It rewards them by having taxpayers bail them out. It has no additional controls of speculation, no strengthening of oversight, no mention even of the implications of the Financial Modernization Act, which took down Glass-Steagall, which provided those post-depression era protections so we wouldn't be in this situation that we're in right now.

And I would predict, Mr. Speaker, that we will be right back here in a few months with the same kinds of problems because we're not solving the underlying matter here, which is a distortion of the economy because of speculation run wild on Wall Street.

Now, we've been given a plan, we haven't been given alternatives. Alternatives would have required Wall Street to pay for its own bailout. This plan doesn't suspend dividends, it doesn't force shareholders or creditors to directly contribute to the bailout. This plan rejected a .25 percent stock transfer tax that would have raised $100 billion from Wall Street.

This is legislation that is further proof that our government has been turned into an engine that accelerates the wealth upwards, taking money from the pockets of the people of this country and putting it into the hands of the few.

[Time: 00:45]

That is what our tax policy does. It accelerates the wealth of America upwards. That is what the war does. It accelerates the wealth of America upwards. That is what our energy policy does. It accelerates the wealth upwards into the hands of the oil companies. That is what our financial policies do. And that is what our national debt has done. It has doubled in the past 8 years, $700 billion that taxpayers are being put on the hook.

When Wall Street makes a profit, it is their profit. When Wall Street loses money, our people lose money. Seven hundred billion dollars. Why aren't we bailing out those millions of Americans who are losing their homes? Why aren't we addressing the fact that 50 million Americans don't have any health care? It is absolutely astonishing that we are talking about giving $700 billion in taxpayers' money which comes in the failure of the Fed through a quadrupling of public and private debt during the

time of Mr. Greenspan, up to $43 trillion, and we have no discussion at all about the underlying monetary policy.

12:46 AM EDT

Dennis Kucinich, D-OH 10th

Mr. KUCINICH. There has been no discussion at all in any of this about the underlying dynamic of a debt-based monetary system. As long as we're working in a debt-based monetary system with our having no control over our own money supply through the Federal Reserve Act of 1913, with the banks being able to literally make money out of thin air with their fraction reserve policies, how can we ever get to the bottom of a national debt that is building beyond our capacity to deal with it?

It is appropriate that this action of the Congress is being timed to the opening of the Asian markets. How appropriate, given the fact that we are losing control over our financial destiny. Mr. Speaker, when I was a child in Cleveland, there was a myth that if you took a shovel and dug a hole deep enough, you could get to China. We're there.

12:48 AM EDT

Brad Sherman, D-CA 27th

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

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

Foreign banks are going to get hundreds of billions of dollars out of this bill. Now, the bill says that the Treasury only buys securities from U.S. entities. But how does this work then? Well, let's say the Bank of Shanghai is holding $30 billion of toxic assets, business mistakes they made in China. They simply have to sell those $30 billion of bad assets to their subsidiary in the United States. They all have small subsidiaries here. That subsidiary can [Page: H10321]

then,

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

But keep in mind, if they choose to use their own subsidiary, they sell $30 billion of assets to the Treasury. By 2010, 2011 they can dissolve that subsidiary and leave this country. And how are you going to impose any recoupment tax on them? The concept that there is a guarantee that we're going to recoup our money is absolutely wrong. We would have to pass a $200 billion or $300 billion tax increase bill in 2013. And under section 134 of this bill, that tax is not just on those who are bailed

out. It is on the entire financial services industry. How else could you construct a tax if you have one bank that got bailed out to the tune of $1 million and another bank that got bailed out to the tune of $1 billion? What tax rate would you apply to banks of that size? The only way to do it is to impose a tax on a whole segment of or the entire financial services industry.

That means you're going to have the unfairness of taxing community banks and credit unions to pay for the money we give to Wall Street. It also means the bill isn't going to pass at all. Imagine the unfairness argument that that creates. But also any bill to tax Wall Street needs to get through a Senate where 41 Senators can block the bill. And Wall Street will now have enough money, our money, to hire 4,100 lobbyists. All they need is a good argument. And that good argument is that there is

no fair way to recoup the money from the individual companies that got it. Many of the companies getting this money in 2009 aren't going to be around in 2013. Many of them are going to be shell companies that are deliberately dissolved in 2013.

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

12:48 AM EDT

Brad Sherman, D-CA 27th

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

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

Foreign banks are going to get hundreds of billions of dollars out of this bill. Now, the bill says that the Treasury only buys securities from U.S. entities. But how does this work then? Well, let's say the Bank of Shanghai is holding $30 billion of toxic assets, business mistakes they made in China. They simply have to sell those $30 billion of bad assets to their subsidiary in the United States. They all have small subsidiaries here. That subsidiary can [Page: H10321]

then,

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

But keep in mind, if they choose to use their own subsidiary, they sell $30 billion of assets to the Treasury. By 2010, 2011 they can dissolve that subsidiary and leave this country. And how are you going to impose any recoupment tax on them? The concept that there is a guarantee that we're going to recoup our money is absolutely wrong. We would have to pass a $200 billion or $300 billion tax increase bill in 2013. And under section 134 of this bill, that tax is not just on those who are bailed

out. It is on the entire financial services industry. How else could you construct a tax if you have one bank that got bailed out to the tune of $1 million and another bank that got bailed out to the tune of $1 billion? What tax rate would you apply to banks of that size? The only way to do it is to impose a tax on a whole segment of or the entire financial services industry.

That means you're going to have the unfairness of taxing community banks and credit unions to pay for the money we give to Wall Street. It also means the bill isn't going to pass at all. Imagine the unfairness argument that that creates. But also any bill to tax Wall Street needs to get through a Senate where 41 Senators can block the bill. And Wall Street will now have enough money, our money, to hire 4,100 lobbyists. All they need is a good argument. And that good argument is that there is

no fair way to recoup the money from the individual companies that got it. Many of the companies getting this money in 2009 aren't going to be around in 2013. Many of them are going to be shell companies that are deliberately dissolved in 2013.

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

12:52 AM EDT

David Dreier, R-CA 26th

Mr. DREIER. Mr. Speaker, I yield myself 1 minute.

I do so to remind my California colleague, my friend from Sherman Oaks, that the fact of the matter is when we look at the way the premiums are handled today through the Federal Deposit Insurance Corporation that guarantees that our constituents who have up to $100,000 in those accounts with the full faith and credit of the Federal Government behind them, if in fact that FDIC fund is in any way diminished, what is it that happens? There is an increase in the premium spread among those financial

institutions.

Similarly as we look at the prospect and the guarantee in this legislation that the taxpayers will not be shouldering the responsibility of that $700 billion, what we have done is we have in place a mechanism whereby through the CBO reporting, the President is required to submit to Congress a plan which calls for an actual increase in that, primarily to be spread most likely among those who have benefited from the program.

And with that I reserve the balance of my time.

12:54 AM EDT

Brad Sherman, D-CA 27th

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

41 Senators a bill that will be highly controversial.