House Proceeding 09-29-08 on Sep 29th, 2008 :: 0:00:00 to 0:20:00
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Barney Frank: pursuant to house resolution 1517, i call up from

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Speech By: Barney Frank
Bill: H.R. 3997: Defenders of Freedom Tax Relief Act of 2008

Chairman Frank introduces HR 3997 and speaks in favor of the bailout.

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Barney Frank: t f speaker's table the bill h.r. 3997, the emergency economic stabilization act of 2008 2008 and offer the motion at the desk. the speaker pro tempore: the clerk will report the

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House Clerk: title of the bill designate the house amendment to the senate amendment to the house amendment ou to the senate amendment and defingt the motion. the clerk: h.r. 3997, a bill to amend the

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House Clerk: internal revenue code of 1986 to provide earnings assistance and tax relief to members of the uniform u services, volunteer firefighters, and peace corps volunteers, and for other purposes. senate amendment,

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House Clerk: motion offered by mr. frank to concur in the senate amendment to the house h amendment to the senate amendment with an amendment. mr. frank: madam speaker. the speaker pro tempore: the gentleman

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House Clerk: will suspend. members will take their seats. or remove their conversations from the floor. members and staff in the rear of the chamber will take their seats. pursuant to house resolution 1517, the gentleman

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Barney Frank: from massachusetts, mr. frank, and the gentleman from alabama, mr. bachus, each will control 90 minutes. the chair recognizes the gentleman from massachusetts. mr. frank: madam spe. aker,

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Barney Frank: i ask unanimous consent that all members may have five legislative days to revisend extend their remarks andnd include extraneous material on h.r. 3997. the speaker pro tempore: without objection,

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Barney Frank: s o ordered. the gentleman from massachusetts is recognized. mr. frank: i yield myself such time as i may consume. the speaker pro tempore: the gentleman is recognized. madam speaker, -- mr.

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Barney Frank: frank: madam speaker, rarely have the members so many reasons wishing we were not here. first it was a couple days into what was supposed to be the time when members could return to their districts to

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Barney Frank: 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 canceled. we are into the third

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Barney Frank: 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

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Barney Frank: many ways unpopular because what we are talking about to many of us is the need to act to avoid something worse from happening that is already happening. and it is hard to geto political credit

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Barney Frank: for avoiding something that hasn't yet happened but you think it's going to happen. most of all, though, we regret being here because we all deeply regret the economic conditions which have made this

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Barney Frank: 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

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Barney Frank: effect requires us to act. i believe it is possible to debate whether or not two weeks ago it was necessary to act quickly. i believe it was. the bad news continues. there has been a lack

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Barney Frank: of confidence in the financial system that is pervasive and unfortunately a lack of sensible regulation allowed the financial system to get itself into a position where so many people owe

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Barney Frank: other people so much more money than they have or can reasonably be expected to get that as confidence ebbs, as people call upon promises they never should have made, we face a declining cycle

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Barney Frank: of activity. people are saying, 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

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Barney Frank: do. no high executive oecf 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

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Barney Frank: our judgment are those who are trying to buy our sell cars because therewon't be credit for the automobile industry. there won't be availability to refinance your house because there will be no

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Barney Frank: money there. people will get hurt and it will have a cumulative effect. now, you might have argued that the tremendous lack of confidence and the -- that's causing this overleveraging to

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Barney Frank: be a problem would not have had to be addressed a week ago but let's remember what happened. 10 days ago on thursday, not far from here in the office of the speaker, the bipartisan congressional

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Barney Frank: leadership and those of us who have leadership roles in the financial services and banking committees were asked to meet with the secretary of the treasury and the chairman of the federal reserve.

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Barney Frank: in our country under our system the executive has all of the initiative. we have an ability to shape, we have an ability to respond, but in emergency situations let's be clear. in emergency

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Barney Frank: situations the initiative is inevitably with the executive, and the two leading appointees of President Bush concerned with economic activities, the people of the financial committee came

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Barney Frank: to us and said you need to give us e this authority and if you don't give it to us quictokly there will be a disaster. we have not given it to them as quickly as they've asked because we felt

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Barney Frank: -- even elif it we agreed with the premise of the need for action that we had to make some improvements, and we made many of them. not as many as i'd like but we made many of them. but we were

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Barney Frank: 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. and

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Barney Frank: i have never seen a piece of legislation which was so open to member participation and which there has been so much discussion. people said not enough time is being spent. let me say this, the

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Barney Frank: hour ts spent on this bill exceeds hours spent on most biltls and the staffs of the committee i chair, of other committees of members, have done extraordinary work. what we have done is

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Barney Frank: substantially to change what they've done but we've been able to say at all points we're making progress. today is a dectoision day. i wish it weren't the case but i am convinced we defeat

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Barney Frank: this bill today it will be a very bad day for the financial sector of the american economy and the peo ple who will feel the pain are not the top bankers and the top corporate executives

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Barney Frank: but average americans. they don't see it yet, and epain averted is not a basis on which you get a lot of gratitude. ti but that is what is coming if we do not do something today in my judgment

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Barney Frank: positive. if this bill dies, i think we get negatives. again, part of the reason is ea this, and i disagree with secretary paulson and chairman bernanke on some policy issues. i regard them both

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Barney Frank: as men of high integrity and total commitment to the national interests, and i believe they are absolutely legitimately convinced about this. by the way, they cannot, in myn judgme nt, be accused

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Barney Frank: of excessive pessimism. . they can be accused of being too optimistic.s with the bear stearns interventions, they tried a series of interventions much less intrucive than this and they have not worked. these

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Barney Frank: are not men whose first impulse as to do something this broad. it was something systemic which required -- because, again, the depths of the problem. let's not forget the causerg as we debate

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Barney Frank: the consequence. the cause was too little regulation and the financial market getting itself into serious tr ouble. now we have to through government action work with them to clean this up. by

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Barney Frank: the way, we have committed -- i think a lot of people in this chamber -- we will put in place the kind of regulations we had before so this won't occur so nobody will worry that we have to

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Barney Frank: do this another time or another time. we have the ability of preventing this from occurring. but that doesn't help as we're dealing with this today. the point is no matter what you thought

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Barney Frank: 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

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Barney Frank: don't do this we will have a crisis, then even if that wasn't true before they are making it more true. that is the reality. if we repudiated george bush's treasury secretary and chairman

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Barney Frank: of the federal reserve, joined as they were by previous secretaries of the treasury, if we repudiate them and say, no, calm do wn, we'll get over it, i believe the consequences will be severe.

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Barney Frank: 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 on how we got here. but here's a choice, george

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Barney Frank: bush's two chief economic officials have said to us if you do not act there will be terrible negative conse equences for the financial sector and they will very soon exacerbate a an economy

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Barney Frank: that's already troubled, that's already got 6% unemployment and will lose more than a million private sector jobs in the year. if we add to this weakened economy, and this is the headline,

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Barney Frank: the house repudiates top economic advisors, there is nothing i believe that will then stand between us and not the end of the world. this is a strong country. people will still get up the

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Barney Frank: next morning and still send their kids to school. but few of them will be going to work. and fewer of them will be buying cars and refinance their homes. and the consequences will be a

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Barney Frank: much more dismal near economic future for the united states. so i hope the bill passes, and i reserve the balance of my time. the speaker pro tempore: the gentlema n from massachusetts reserves

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Barney Frank: his time. the gentleman from alabama is recognized. mr. bachus: i yield such time to mr. miller as he may consume. the speae ker pro tempore: the gentleman from califorlenia is recognized.

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Gary G. Miller: mr. miller: thank you, 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 has taken since

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Speech By: Gary G. Miller
Bill: H.R. 3997: Defenders of Freedom Tax Relief Act of 2007

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Gary G. Miller: we've been in congress. if it you just solely rely on the phone calls we're getting from home and listen to people who really don't understand the complexity of our marketplace and what we're

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Gary G. Miller: 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 fami ly next week who wants to buy

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Gary G. Miller: 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 the y want to send their kids to the university and they

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Gary G. Miller: want to get a student loan and there's no loans available? right now when the marketplace is running like it is, they say it's not likely to happen. if you look at the systemic problem in the

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Gary G. Miller: marketplace, there is a probability it could happen. now, we can roll dice today. we can say, let's not vote and le t's hope everything gohoes ok. and for members it's a very difficult situation.

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Gary G. Miller: they say, if i vote for this bill and the bill passes and the marketplace does not crash, it it continues and improves, people are going to be mad at m me because i voted to continue the process

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Gary G. Miller: they think is bad. if you vote no on this bill and we hav e a crash in the marketplace and the liquidity occurs and people go to get t loans, the business who normally relies on his loans to

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Gary G. Miller: make payroll goes to the bank and the bank says -- like the bank said to mcdonald's, we will no longe r fund expansion p of mcdonald's, which is the largest f ast food chain in the united states, when

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Gary G. Miller: that occurs, then the member has to say, what is th e consequence to voting no for this bill? so it's almost aa catch 22. you're darned if you do and you're darned if you don't. there are things

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Gary G. Miller: in this bill that i think should happen earlier. it deals with assets banks have to hold that are devalid. chairman bernanke said last week, they value many assets as something very low prices

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Gary G. Miller: rather than hold to maturity prices which is not unreasonable in its given base of liquidity. banks are forced today to write down the value of the assets they have and set d huge reserves

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Gary G. Miller: aside for losses they have already taken. the bad thing about this, i put language into the housing bill in apr il as an amendment. it came out of this house, went to the senate, when the bill

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Gary G. Miller: came back from the senate that language mysteriously disappeared. we could have done that then, programs not have been quite in the situation we are in today. the subprime marketplace that people

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Gary G. Miller: arlee angry about today, it 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 the interest rate that they

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Gary G. Miller: catannot make, you have committed a predat ory loan. we should have defined that in law four or five years ago but we did not. id if you look at the race of interest today, they have been

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Gary G. Miller: held down so low that the euro in recent years rhave increased in value dramatic leaned the result of commodity prices in the u.s. is that oil, grain, coal, metal and currenccy premiums

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Gary G. Miller: are suffering a 20% to 30% hit. if you look at the marketplace today, the declining home prices we've had out there today, in the subprime loanris they are going to be buying, they are

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Gary G. Miller: going to be buying them at 40% of market value. if you look at what's happening on the prime loans, which are good loans, they are only worth 90% of market value. members today nembed to look

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Gary G. Miller: at what we're doing. are we going to change the market or are we going to let the rket continue to decline and roll dice and say perhaps nothing will happen? i think there's something we

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Gary G. Miller: need to do in the coming months that really bothers me that's not in this bill. i think we need to look at public-private partnerships involving local covommunities, investors, in the assets we buy

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Gary G. Miller: and basically maximizing the benefit andle value of these assets, if we involve the local people they will put their assets with the assets of the federal government, increase the marketplace

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Gary G. Miller: and ensuring that the yield to these investments will produmece a profit. what we don't want to have happened is like what happened during the savings and loans debacle where they were

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Gary G. Miller: dumped on the marketplace at low prices, calling the market to continually decline than it further did and end up with a worse problem than we faced. members need to look at wohat we're doing

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Gary G. Miller: today. some members worked very hard to come up with a c comprehensive package which is not pleasing either side. the democrats are not happy, the republicans are not happy. is it something that's going

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Gary G. Miller: to work? we need to wear a conscious, look at what's best for our community and economy and we need to look at what's best for our nation. i yield back the balance of my time. the speaker

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pro mpore: the gentleman from massachusetts is recognized. mr. frank: madam speaker, i yield to one of the most thoughtful members of our committee and one who has a great deal of knowledge of

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Melvin L. Watt: the subject under discussion, the gentleman from north carolina, mr. watt, for three minutes. the speaker pro tempore: the gentleman from north carolina is recognized for three minutes. mr. watt:

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Speech By: Melvin L. Watt
Bill: H.R. 3997: Defenders of Freedom Tax Relief Act of 2007

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Melvin L. Watt: thank you, madam speaker. i thank the gentleman for yielding time. there's probably no worse instance to be doing legislation than having to do it in response to a crisis. legislating to clean

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Melvin L. Watt: up a mess is just not 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

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Melvin L. Watt: lending legislation. we've been on the forefront of that. but we've been on having difficulty getting people to recognize that a crisis was coming if we didn't respond to cut back on

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Melvin L. Watt: irresponsibility in the market. there are two problems here. first is, is there a real crisis that needs to be responded to? and that's really the question that i've gotten a lot of -- lot

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Melvin L. Watt: more calls frommy 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 the