[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H. Res. 1452 Introduced in House (IH)]







110th CONGRESS
  2d Session
H. RES. 1452

        Establishing the Select Committee on Financial Bailouts.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 17, 2008

 Mr. Garrett of New Jersey (for himself and Ms. Kaptur) submitted the 
   following resolution; which was referred to the Committee on Rules

_______________________________________________________________________

                               RESOLUTION


 
        Establishing the Select Committee on Financial Bailouts.

Whereas for the first time since the Great Depression, the Board of Governors of 
        the Federal Reserve System voted to open the Discount Window to 
        investment banks;
Whereas the Board of Governors of the Federal Reserve System guaranteed 
        $29,000,000,000 of security liabilities of investment bank Bear Stearns;
Whereas on July 30, 2008, the Housing and Economic Recovery Act of 2008 was 
        signed into law and gave the Federal Government the authority to take 
        over the Federal National Mortgage Association and the Federal Home Loan 
        Mortgage Corporation;
Whereas Treasury Secretary Henry Paulson testified before the Senate Banking 
        Committee: ``If you've got a squirt gun in your pocket, you may have to 
        take it out. If you've got a bazooka, and people know you've got it, you 
        may not have to take it out.'';
Whereas on September 6, 2008, Secretary Paulson announced that the Secretary 
        would use the new powers under the Housing and Economic Recovery Act of 
        2008 to purchase up to $100,000,000,000 of preferred stock in each 
        Government-sponsored enterprise as needed to ensure that each 
        Government-sponsored enterprise maintains a positive net worth;
Whereas on September 7, 2008, Federal Housing Finance Agency Director, James 
        Lockhart, established a conservatorship for the Federal National 
        Mortgage Association and the Federal Home Loan Mortgage Corporation 
        putting the Government in control of the companies;
Whereas on September 18, 2008, the Washington Post reported ``Fannie Mae, and to 
        a lesser extent Freddie Mac, became enmeshed in the fabric of political 
        Washington. They were places former government officials went to get 
        wealthy--and to wait for new federal appointments. At Fannie Mae, chief 
        executives had clauses written into their contracts spelling out the 
        severance benefits they would receive if they left for a government 
        post. The companies also donated generously to the campaigns of favored 
        politicians. The companies' political action committees and employees 
        have donated $4.8 million to members of Congress since 1989, according 
        to the Center for Responsive Politics.'';
Whereas the Board of Governors of the Federal Reserve System announced on 
        Sunday, September 14, 2008, that it expanded the criteria of eligible 
        collateral to be pledged at the Primary Dealer Credit Facility to 
        securities below investment grade;
Whereas on September 17, 2008, Bloomberg News reported that Allianz SE, Europe's 
        largest insurer, made an offer to invest in American International Group 
        Inc. that was rejected by the United States insurer 2 days before it 
        accepted a Government takeover;
Whereas on September 16, 2008, the Board of Governors of the Federal Reserve 
        System authorized the Federal Reserve Bank of New York to lend up to 
        $85,000,000,000 to the American International Group (AIG); and
Whereas on September 17, 2008, the Secretary of the Treasury announced the 
        Treasury was going to lend money to the Board of Governors of the 
        Federal Reserve System to help it meet its obligations: Now, therefore, 
        be it
    Resolved,

SECTION 1. SELECT COMMITTEE ON FINANCIAL BAILOUTS.

    (a) In General.--There is hereby established the Select Committee 
on Financial Bailouts (hereinafter in this resolution referred to as 
the ``select committee'') to investigate the extraordinary actions 
taken by the Board of Governors of the Federal Reserve System and the 
Secretary of the Treasury in 2008.
    (b) Membership.--The select committee shall be comprised of 10 
members appointed by the Speaker, of whom 5 shall be appointed on the 
recommendation of the minority leader, as follows: one member of the 
majority party and one member of the minority party from the Committees 
on Financial Services, Ways and Means, Energy and Commerce, and 
Oversight and Government Reform, and one member of each party from the 
leadership of the House of Representatives.
    (c) Duties.--The select committee shall--
            (1) investigate the actions taken by the Board of Governors 
        of the Federal Reserve System with the support of the Secretary 
        of the Treasury related to the March 16, 2008, sale of The Bear 
        Stearns Companies Inc., to JPMorgan Chase & Company;
            (2) investigate the actions taken by the Secretary of the 
        Treasury, with support from the Board of Governors of the 
        Federal Reserve System on September 7, 2008, to place the 
        Federal National Mortgage Association and the Federal Home Loan 
        Mortgage Corporation, both Government-sponsored enterprises, 
        into conservatorship;
            (3) investigate the actions taken by the Secretary of the 
        Treasury and the Board of Governors of the Federal Reserve 
        System related to the purchase of Merrill Lynch & Co., Inc. by 
        the Bank of America Corporation on September 15, 2008;
            (4) investigate the actions taken by the Secretary of the 
        Treasury and the Board of Governors of the Federal Reserve 
        System related to the bankruptcy filing by Lehman Brothers 
        Holdings Inc. on September 15, 2008;
            (5) investigate the actions taken by the Board of Governors 
        of the Federal Reserve System, with the support of the 
        Secretary of the Treasury, related to the authorization of an 
        emergency loan to the American International Group on September 
        16, 2008;
            (6) investigate the oversight role of the Board of 
        Directors of the Federal National Mortgage Association and of 
        the Federal Home Loan Mortgage Corporation and their efforts to 
        protect the interests of taxpayers and the appropriateness of 
        their compensation; and
            (7) investigate the role that political influence may have 
        had on the oversight of the financial markets by both the 
        Congress and the Federal regulatory agencies.
    (d) Procedure.--Clauses 1, 2 (including paragraph (m) granting 
subpoena authority), 4, and 5 of rule XI of the Rules of the House of 
Representatives shall apply to the select committee.

SEC. 2. REPORT.

    The select committee shall submit to the House, no later than 
December 31, 2008, a report--
            (1) detailing the extraordinary actions taken by the 
        Secretary of the Treasury and the Board of Governors of the 
        Federal Reserve System in 2008;
            (2) outlining the role that political activities and 
        influence had in affecting the market conditions that led to 
        the extraordinary actions taken by the Secretary of the 
        Treasury and the Board of Governors of the Federal Reserve 
        System; and
            (3) recommending congressional action that would prevent 
        the need for the Secretary of the Treasury and the Board of 
        Governors of the Federal Reserve System to intervene in the 
        capital markets in the future.
                                 <all>