[Congressional Record Volume 154, Number 75 (Wednesday, May 7, 2008)]
[House]
[Pages H3154-H3177]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
NEIGHBORHOOD STABILIZATION ACT OF 2008
The SPEAKER pro tempore. Pursuant to House Resolution 1174 and rule
XVIII, the Chair declares the House in the Committee of the Whole House
on the state of the Union for the consideration of the bill, H.R. 5818.
{time} 1950
In the Committee of the Whole
Accordingly, the House resolved itself into the Committee of the
Whole House on the state of the Union for the consideration of the bill
(H.R. 5818) to authorize the Secretary of Housing and Urban Development
to make loans to States to acquire foreclosed housing and to make
grants to States for related costs, with Mrs. Tauscher in the chair.
The Clerk read the title of the bill.
The CHAIRMAN. Pursuant to the rule, the bill is considered read the
first time.
The gentlewoman from California (Ms. Waters) and the gentlewoman from
West Virginia (Mrs. Capito) each will control 30 minutes.
The Chair recognizes the gentlewoman from California.
Ms. WATERS. Madam Chairman, I yield myself as much time as I may
consume.
Madam Chairman, I would like to first thank Chairman Frank and all of
the members of the Financial Services Committee, and particularly those
members who serve on the subcommittee that I chair, the Subcommittee on
Housing and Community Opportunity. I'm thanking Members on both sides
of the aisle for helping to bring this bill to the floor today.
H.R. 5818, the Neighborhood Stabilization Act, authorizes a $15
billion HUD administrative grant and loan program to State and local
governments to purchase, rehabilitate and resell or rent foreclosed
homes. To understand the urgent need to enact this legislation, one
need only consider the sobering figures on foreclosures recently
released by RealtyTrac, which show that foreclosure filings during the
first quarter of 2008 are 112 percent higher than 1 year ago, and that
actual bank repossessions of homes during March were a shocking 129
percent above March 2007.
The human reality behind these numbers is revealed if you visit, as I
have the past year, cities and communities in cities like Cleveland,
Ohio; Detroit, Michigan; or the San Bernardino and Stockton
metropolitan areas in California, where block after block is dotted by
foreclosed properties, many of them suffering from neglect or actual
vandalism. These abandoned and foreclosed properties drag down the
value of homes still occupied by working families, and contribute to a
cascade effect whereby plummeting home prices erode the tax base of
State and local governments and cause real estate related industries
such as the construction trades to suffer.
States and most local governments must balance their budgets each
year and, as a result, 20 States have already had to make or are
proposing budget cuts due largely to revenue losses resulting from the
subprime crisis, which further reduces demand in the economy and
deepens the recession.
On April 10, the Financial Services Committee heard from Mayor Thomas
Menino of Boston, Governor Martin O'Malley of Maryland, and others,
that despite severe physical constraints, many States and cities are
already dedicating their own shrinking tax revenues to purchase
foreclosed properties and attempt to stabilize these neighborhoods. But
they are overwhelmed by the scale of the problem in comparison to their
shrinking tax revenues. For this reason, the National Governors
Association has stated that a ``one-time Federal funding commitment to
support the acquisition and rehabilitation for foreclosed properties is
vital.''
The Governors are joined in their support for the stimulus contained
in H.R. 5818 by the U.S. Conference of Mayors, National Association of
Counties, National Association of Local Housing Finance Agencies, and
the National Council of State Housing Finance Agencies. H.R. 5818 is
also endorsed by nearly 40 civil rights, community development, labor
and low income housing groups, including the AFL-CIO, Catholic
Charities, Lutheran Services of America, the NAACP, the National Urban
League, the National Low Income Housing Coalition, and the National
Foreclosure Prevention and Neighborhood Stabilization Task Force.
This bill targets assistance where it is most needed. The $7.5
billion in grants and $7.5 billion in loans would be allocated to
States based on two factors: The number of foreclosures, and the number
of subprime loans 90 days delinquent. This is then subject to a limited
adjustment for median home prices, a bipartisan compromise that was
worked out in mark-up with the committee's members from Ohio, which,
like many midwestern States, has faced skyrocketing foreclosures but
did not experience an extraordinary run up in housing prices.
Second, the bill puts flexible resources in the hands of government
with the capacity to address the crisis and put funds on the street
quickly enough to stimulate the economy. Rather than expect HUD to
process plans from 1,200 entitlement jurisdictions, the balance we
struck at mark-up was to allocate funding to States and to the Nation's
largest 100 cities, largest 50 counties, and cities over 50,000 with
especially high foreclosure rates. The areas of States outside of those
cities and counties would be addressed in the State's plans.
Under the bill's timelines, fund obligation must begin within 6
months of enactment, be completed within a year, and fully spent within
2 years of enactment. This is no ``big government,'' immortal program,
as our colleagues across the aisle suggest. Rather, it is a timely,
targeted and temporary shot in the economy's arm, exactly where one is
needed.
Indeed, using well-accepted construction activity multipliers, the
National Foreclosure Prevention and Neighborhood Stabilization Task
Force calculates that the bill's proposed $15 billion investment will
generate at least $38 billion in direct and ripple effect economic
activity nationwide, employ about 120,000 people, and restore nearly
$225 million per year in local real estate tax collections.
Some Republicans have tried to frame this bill as a bailout bill for
investors. This simply is not so. Government and their nonprofit
partners will drive a hard bargain with property owners because they
are highly incentivized to make this money go as far as possible in
their efforts to stabilize neighborhoods where many of them have been
working for years, and because they must pay the government back any
funds used to purchase homes.
In no event, moreover, can they pay more than 110 percent of the
average
[[Page H3155]]
home sale price in the area. Creaming of properties and ``sweetheart''
deals are prevented by the requirement that properties sit for 60 days
before they are eligible.
What H.R. 5815 does make possible is for States, cities and counties
to stabilize a few neighborhoods, especially low income ones, that are
in serious danger of an overcorrection and rapid deterioration past the
tipping point, where it becomes very difficult to turn them around.
I urge Members to hear the pleas of the Nation's governors, mayors,
community-based organizations and ordinary citizens to provide this
critical relief to stabilize neighborhoods and stimulate the economy.
The administration and my friends on the opposite side of the aisle
in this Chamber argue that we cannot afford to respond. I would like to
just remind this body of what Mr. Frank said earlier today, we afforded
$30 billion to bail out Bear Stearns, and certainly we can afford half
of that amount, $15 billion for the entire country. We simply cannot
afford not to.
I urge passage of the Neighborhood Stabilization Act.
I reserve the balance of my time.
Mrs. CAPITO. Madam Chairman, today I want to thank, first of all, the
chairwoman of the Subcommittee on Housing, of which I'm the ranking
member, for her good hard work and dedicated service. We've had a lot
of hearings and a lot of information, and I think we all want to try to
achieve help for the homeowners or those who are on the edge.
But today I rise in opposition to H.R. 5818, the Neighborhood
Stabilization Act of 2008. We all recognize that we are experiencing a
sharp increase in foreclosure statistics and starts. Over the past year
alone, approximately 550,000 homeowners with subprime loans began the
foreclosure process.
However, we shouldn't rush to act. We must guard against adopting
policies which create moral hazards and unintended consequences.
{time} 2000
Unfortunately, we believe H.R. 5818, the Neighborhood Stabilization
Act of 2008, is a bill which does both. H.R. 5818 is an unnecessary
government intervention in the housing market which will bail out real
estate speculators, servicers, and lenders while doing nothing to
assist hardworking Americans struggling to make their mortgage
payments. This bill will not keep one person in their mortgage or in
their home.
The bill does this through a $15 billion authorization for grants and
loans to be used to purchase already foreclosed homes from lenders,
servicers, and speculators who have made bad loans or unwise
investments. The Neighborhood Stablization Act will allow investors and
servicers to unload their foreclosed properties to the government with
the taxpayer footing the bill. Servicers and investors might even be
encouraged to pursue foreclosure if this bill is enacted.
Instead of incentivizing foreclosure, Congress should be encouraging
services to engage in voluntary loan work-outs and modifications.
Furthermore, this bill calls on States and local governments to convert
foreclosed properties into affordable rental and single-family housing.
The increase in housing supply and decrease in prices creates housing
affordability without government intervention.
I'm also concerned that the overly broad income targeting provisions
in this bill, which will allow families making 100 percent and 140
percent of area median income respectively, to rent and purchase
properties acquired with funds from this act. It is not appropriate for
the government to provide housing assistance to individuals who can
afford market-rate housing.
Congress should focus its efforts on keeping hardworking Americans in
their homes. We should not unnecessarily intervene in the housing
market in the process of adjustment after years of what has proved to
be unsustainable growth. It is imperative that we recognize the primary
beneficiaries of this bill will not be the thousands of Americans
struggling to hold on to their home, but the lenders, servicers and
speculators who bear much of the responsibility for the current housing
slump.
Putting aside the issue of how massive this new program would be, the
bill's ultimate beneficiaries, as I said, could be our lenders and
investors and speculators; and indeed the FHA commissioner, Brian
Montgomery, stated in testimony before our committee that ``this
legislation may have the unintended consequences of making foreclosure
a more attractive option for lenders thereby compounding the very
problem of rising foreclosures that the bill purports to address.''
Madam Chairman, I oppose this bill, and I would like to reserve the
balance of my time.
Ms. WATERS. Madam Chairman, I yield to the chairman of the Financial
Services Committee 3 minutes.
Mr. FRANK of Massachusetts. A former President once unfairly
characterized a leader of this House as someone who couldn't walk and
chew gum at the same time. The gentlewoman from West Virginia extends,
frankly, that insult to the whole House. She suggests we can't do two
bills in one night. She says we should work to try to help avoid
foreclosure. I agree. That's the next bill which we will get to after
all of this useless temper tantrum is over, we will get to it at 3
o'clock in the morning, but we will get to it.
That bill will help avoid foreclosure. I know the gentlewoman agrees.
She voted for that bill in committee although a majority of her
colleagues were against it.
But I do not understand how anybody could argue that doing this bill
now interferes with that bill later. They are totally not in conflict.
So the notion that this bill doesn't keep people out of foreclosure
is true. It doesn't combat global warming. It doesn't get troops out of
Iraq. It won't help me lose weight. There are a lot of things this bill
won't do that I very much want to do. None of them are a reason to vote
against a bill that doesn't do what it doesn't say it's going to do but
does what it does.
What it does is to go to the aid of cities that have been victimized
by the deregulation run rampant, perpetrated by this administration,
which has led to the subprime crisis. We have vacant property
everywhere in these areas.
Now the argument that this is going to award speculators and be an
incentive to do foreclosures is also flatly wrong. This is $15 billion.
People will tell you it's a lot of money, and it is. Do you know how
much money this is? This is half of the money that this administration
made available to buy up the debts of Bear Stearns. Now, I think they
had to do that. I think they were forced to do it. But I think we have
to do this as well.
I do think that the whole country, under this administration's
calculation, ought to get at least half of what Bear Stearns got.
That's all that this does.
Now, unfortunately, it's not nearly enough to buy up the property
that's foreclosed. So anyone who says, I'm going to foreclose today
because I want to get in on this, would be nuts because there is
already property ahead of them. And even when this bill becomes law, if
it does, there's a 60-day wait, and I hope it will be part of the
stimulus.
Property that was once paying taxes because of this subprime crisis
now eats taxes. It bites neighborhoods. And, yes, some of the people
who foreclose may benefit here. But we are telling the cities and the
States to be careful with this money. They have to buy it for
affordable housing. That will put limits on what they will pay.
And you can say, well, why don't the cities do it on their own?
Because the very cities that need help here have lost revenue because
of this foreclosure. These properties are fire traps; they attract
people who break the law; they attract sanitary nuisances. They lead to
water hazards.
The Acting CHAIRMAN (Ms. Baldwin). The gentleman's time has expired.
Ms. WATERS. I yield an additional minute to the gentleman.
Mr. FRANK of Massachusetts. I always feel good when people make
arguments against legislation that won't really deal with the
legislation. The notion that the problem with this bill is that it
doesn't help avoid foreclosure, when it was not the bill intended to
avoid foreclosure, shows well, there's a dearth of arguments against
it.
The argument that it's going to reward the speculators, this will go
to
[[Page H3156]]
cities dealing with property that is causing them problems. Do we not
trust the cities and States of this country to take this money and use
it judiciously and wisely to prevent neighborhood decay?
I don't understand the animus that motivates so many of my Republican
colleagues that say, Oh, no, let's not have government intervention
here. Well, we heard that a while ago, and people on the other side
successfully blocked government intervention in regulating subprime
mortgage origination outside of the banks. It was this religion of
never intervening that brought us here. A limited intervention to undo
the negative consequences is what this bill calls for.
Mrs. CAPITO. I would like to make a comment in reference to the
chairman's comments.
I live in a small community, just barely over 50,000. And we have
local government and State programs in effect right now that deal with
foreclosed or blighted projects. They work together with the local
nonprofits, with the local land owners and realtors, and we have
problems that are moving forward.
So to say that we're not in favor of programs that would deal with
foreclosure-blighted neighborhoods I think is factually incorrect.
I would like now to yield some time to the gentleman from Florida
(Mr. Feeney), a member of the Financial Services Committee, 3 minutes.
Mr. FEENEY. I thank the gentlewoman.
I would say this bill tonight proves at least two maxims about
Congress: One is that we have two speeds: zero and that we overreact;
and the other is that the law of unintended consequences means that
often the adverse or the harmful consequences of the things we do in
Congress are much more meaningful than the positive things that we
would like to accomplish.
Let me give one example. Back in the early sixties and seventies and
eighties, and all the way through the nineties, Madam Chairman, there
were lots of complaints that low- and middle-income people, especially
minorities, didn't have access to loans, that they didn't get the same
opportunity that other people of above-modest means had to own a home
in America. And there were complaints, and there were all sorts of
animosity, to use the Chairman's word from a few minutes ago, towards
lenders for being discriminatory against low- and middle-income people
again, especially minorities.
So the Community Redevelopment Act was enacted in 1977, and at that
time one of the things that Congress had the power to do was to oversee
and look at every single lender in America in order to determine that
they were aggressively making loans in low and poor and minority
neighborhoods so that we could measure those institutions so we could
insist that there be more access to homeownership.
We got exactly what we asked for, and part of that was the subprime
loan crisis. And part of that was zero-document loans where people
could literally line up without any proof of income. Part of that was
instead of making it a 70-percent loan or 75-percent loan, which almost
never fails, making 100-percent, or 110-percent loans. Part of that was
teaser interest rates to get people into a home at 3 percent, which
they could afford to make an $800 or $900 a month payment, and when
that teaser rate readjusted to 7 or 8 or 9 percent, all of a sudden
what used to be an $800 payment became a $2,000-a-month payment, and
they couldn't make it. They got exactly what we anticipated.
Countrywide is now bankrupt. Countrywide in 2005 got the Best in
Minority Lending Award from the Lending Industry Diversity Conference.
This Congress had great intentions. We wanted to make more money
available so that everybody could have the American Dream. In fact, as
of 2 years ago, America had an all-time high, approaching 69 percent of
Americans that owned their own homes. That's great.
The truth of the matter is because of easy money from the Feds,
because of investor imprudence, because of greedy Wall Street
speculators, we have now got a crisis because of a bubble that is
collapsing.
Who is being bailed out by this bill? The $15 billion will eventually
end up, after it goes to the cities and counties, in the pockets of the
investors and holders of these mortgages that went seeking higher
profits that put people in homes that they couldn't afford. We are
doing exactly what economists want us not to do: creating a moral
hazard. It is going to make it more likely, rather than less, that
foolish loans are made in the future.
Ms. WATERS. Madam Chairman, I recognize for 1 minute the gentleman
from Massachusetts to straighten out the gentleman on the opposite side
of the aisle who does not know the history of CRA.
Mr. FRANK of Massachusetts. Of all of the unfair accusations, the one
that blames the Community Reinvestment Act for this is the strongest.
The Community Reinvestment Act was passed in 1977. This subprime
crisis, of course, did not appear until nearly 30 years later; but more
important, the subprime loans that caused problems were overwhelmingly
made by institutions not covered by the Community Reinvestment Act. It
covers depository institutions: banks and thrifts and credit unions.
Credit unions aren't covered. Banks and thrifts.
If only those institutions, deposit-taking, regulated institutions
covered by CRA had made these loans, we wouldn't have had the crisis.
The loans were made by institutions not covered by CRA 30 years, 28
years after CRA was passed.
Mr. FEENEY. Madam Chairman, will the gentleman yield?
Mr. FRANK of Massachusetts. I yield to the gentleman from Florida.
Mr. FEENEY. Perhaps the chairman didn't take my point. The point is
that it has been aggressive policies by Congress including evaluating
everybody under the Community Reinvestment Act.
The Acting CHAIRMAN. The gentleman's time has expired.
Ms. WATERS. I yield the gentleman an additional minute.
Mr. FRANK of Massachusetts. The gentleman is wrong to say that we
evaluated everybody under CRA. We have evaluated banks and thrifts
under CRA. Mortgage brokers, mortgage bankers were not evaluated----
Mr. FEENEY. Will the gentleman yield?
Mr. FRANK of Massachusetts. No. Not until I finish this factual
statement.
Mr. FEENEY. I didn't say what the chairman said I said.
Mr. FRANK of Massachusetts. I will yield to the gentleman.
Mr. FEENEY. I didn't say what the chairman said I said. I said that
it has been the policy of many in this Congress for about 40 years now
to criticize lenders all over the spectrum for not pushing more money
into low- and moderate-income areas. I think the chairman will agree
with me.
Mr. FRANK of Massachusetts. I will take back my time.
First of all, I thought I heard the gentleman talk about the
Community Reinvestment Act. It's been late. I keep hearing, ``I move to
adjourn.'' Maybe my ears got a little curdled.
I thought the gentleman said, and we'll check the record later. If he
didn't mention the Community Reinvestment Act, I will apologize.
But no. I for one have been saying that we should not be pushing
people into homeownership when they can't handle it, and part of the
problem here was killing affordable rental housing.
But let's have the record clear. There is no rational way to blame
the Community Reinvestment Act passed in 1977 and not cover the
nondepository institutions for this crisis caused by the nondepository
institutions.
Ms. WATERS. Madam Chairman, I yield to the gentleman from Texas (Mr.
Al Green), who serves on our committee, for 1 minute.
Mr. AL GREEN of Texas. Thank you, Madam Chairman.
I have to say this. I have to apologize to the gentleman, too,
because for a moment, I thought I heard a disjointed syllogism because
I couldn't make that connection.
This bill is needed by this country. This bill is going to help
neighborhoods maintain their integrity.
And I have to ask one question: Where was the moral hazards argument
when Penn Central got $7 billion? When Lockheed Martin was bailed out?
When Franklin National Bank was bailed out? When Chrysler was bailed
out? Continental Illinois? When Bear Stearns received its $29 billion
plus a $13 billion loan? Where was the moral hazards argument?
[[Page H3157]]
It seems that this argument surfaces whenever poor people or whenever
people who are living in the streets of life, whenever people who have
not found their way into the well-off, the well-heeled, and the well-
to-do, it seems that it tends to surface. I think that it's time for us
to do for others what we can do for these major corporations.
{time} 2015
Ms. WATERS. Madam Chairman, I yield 1 minute to the gentleman from
Georgia (Mr. Scott).
Mr. SCOTT of Georgia. Thank you very much, Madam Chairman.
This is an extraordinarily important measure. If we don't learn from
history, we're doomed to repeat it. Around 1929, we had another crisis
that happened as a result of one of our financial legs coming out from
under us. At that time, there was a Republican administration that
fostered so much of that. Franklin Delano Roosevelt, in a Democratic
administration, had to come and realize that government had to act.
We're not doing this because we don't have anything else to do. We're
doing this because we have an economic crisis of soaring magnitude
before us. The derivatives of this magnitude are affecting communities
and neighborhoods where these foreclosures are leaving these empty
homes, many of them in $200,000, $300,000, $400,000 neighborhoods.
They're taking down the residential value of communities around them,
and these communities in these cities and towns are already strapped
with their own financial pressures, much like my own city of Atlanta,
and they need help in rescuing these communities. We're coming to their
rescue.
Mrs. CAPITO. Madam Chairman, I yield 3 minutes to a member of the
Financial Services Committee, Mr. Roskam from Illinois.
Mr. ROSKAM. I thank the gentlelady for yielding and for the time.
One of the underlying issues as it relates to this bill is I think
the way in which it was contemplated. I'm not making a process
argument, but what I am making is an argument that suggests there's a
very serious oversight.
And the oversight was the committee's rejection of the McHenry
amendment. The McHenry amendment basically said, look, if you're going
to have these grants and loans and there's going to be properties that
are going to be purchased, there should be an open process, there
should be a bidding process, and it should be something that everybody
has access to. And I think the failure of the majority in this case was
to dismiss that and put it aside.
I've heard cities tonight described as victims. The chairman a minute
ago said he has great confidence, and I'm paraphrasing, but great
confidence that cities are going to use the money judiciously and
wisely. Well, my congressional district falls in the shadow of a city
with a different reputation that doesn't have a judicious and wise
reputation always. Let me read you just a couple of headlines within
the past couple of weeks about some of the schemes that have happened
from a corruption point of view about the very people that you're
contemplating entrusting $15 billion to.
Here's one this month: ``Witness Details Pay-To-Play Schemes'' or
``Ex-Illinois Official Pleads Guilty to Lying'' or ``Corruption Firmly
Entrenched in State'' or ``Illinois: Corruption on Parade'' or ``Top
Aide to Illinois Governor Is Indicted in Kickback Inquiry.''
We have got deep troubles in northern Illinois, and what is
conspicuously absent in this bill, and I've read it, I've looked at it
all, within this bill there is no requirement of any kind of
disclosure, no requirement of any kind of notice, no requirement of
anything whatsoever. So, in other words, if you're a corrupt official
working for an agency that has been entrusted with this $15 billion,
there's absolutely nothing, nothing that prohibits you from selling
this to a friend for whatever you want to sell it for. The bill is
absolutely silent.
Now, is the majority trying to be complicit in a nefarious scheme? Of
course not. But was it a gross oversight on the part of the majority in
the committee to reject the McHenry amendment? I think so, and I think
for that fundamental flaw alone, notwithstanding all the underlying
policy questions, that fundamental flaw alone brings a great deal of
skepticism to voters in my congressional district. And for that reason,
I urge a ``no'' vote.
Ms. WATERS. Madam Chairman, I yield myself 30 seconds.
The gentleman from Illinois evidently has not read the bill. As a
matter of fact, they have to have a plan that is adopted or accepted,
reviewed by HUD. And so in the plan, all of the disclosure, everything
that needs to be known about that city's plans will be reviewed.
In addition to that, the amendment that the gentleman is referring to
is an amendment that would bog down this ability to get money into the
neighborhoods and on the street very quickly for the economic stimulus
that we anticipate.
I yield to the gentleman from New York (Mr. Higgins) 1 minute.
Mr. HIGGINS. Madam Chairman, I rise today in strong support of H.R.
5818, the Neighborhood Stabilization Act. I want to thank Chairman
Frank and Chairwoman Waters for their persistent efforts to address the
issue of how foreclosures and subprime lending contribute to the vacant
and abandoned housing problem in cities like Buffalo.
Buffalo and western New York are facing a vacant and abandoned
housing crisis that gets progressively worse every day as more and more
homes fall into foreclosure. While the City of Buffalo has been dealing
with the negative effects of home foreclosures for some time, recent
events have made their situation worse, necessitating this relief.
Vacant homes wreak havoc on the neighborhoods in which they exist.
These homes often serve as a haven for crime, endangering children and
making entire neighborhoods dangerous. They also serve as a drain on
local governments, which must deal with decaying homes long after
owners and banks have abandoned them. Perhaps most distressing,
abandoned homes discourage investment and influence urban flight.
H.R. 5818 would provide immediate relief to these neighborhoods in
several ways. It would empower local officials to take control of
vacant and abandoned properties and increase homeownership.
Local governments could use loan funds to purchase and rehabilitate
vacant homes for sale to working families who otherwise may not be able
to afford quality housing. If homes are beyond repair and within
neighborhoods prone to vacancy and abandonment, local governments could
use grant funds to demolish them. Both the loan and grant initiatives
will provide a much needed and immediate injection of resources into
these neighborhoods that have been hard hit by the foreclosure crisis,
so that these communities will have a better chance to get back on
their feet and move forward.
It is highly dismaying to note that the housing market has gotten
progressively worse in the last 12 months, creating the need for the
stimulus provided in this bill.
Mrs. CAPITO. Madam Chairman, I yield to the gentleman from Illinois
(Mr. Roskam) 2 minutes.
Mr. ROSKAM. I thank the gentlelady for yielding.
And in response to the chairman's question, yeah, no question about
it. There's a plan requirement on page 3, section 4 of the bill, but
the plan requirement doesn't prohibit the type of conduct that I just
described, a plan as it relates to goals for the sale to different
groups, accessibility to different groups, but the plan is silent as it
relates to this potentially corrupt practice.
I think it's a flaw and I don't think it's a flaw that can't be
redeemed. It can be very easily corrected. It doesn't help the
underlying policy objections to the bill.
But $15 billion put out there without any requirement whatsoever as
it relates to a prohibition against self-dealing, a member of the
housing development authority of a particular municipality calling up a
cousin and saying, hey, come on by here, we just purchased this
foreclosed property for $100,000, I'll sell it to you for $75,000,
there's nothing in here. Notwithstanding the plan language,
notwithstanding any other declaration of the majority, it is silent,
and we can do much, much better.
Ms. WATERS. I yield to myself 30 seconds.
I'm glad the gentleman found the plan in the bill that I had advised
him about because there is a plan, and perhaps it does not have 101
things that he
[[Page H3158]]
would like, and I'm sure you could add a lot more to it, but there is a
plan. And the situation that he just described could not happen. As a
matter of fact, you have to pay back the money that you get through the
loan.
Madam Chairman, I yield to the gentleman from Missouri (Mr. Clay) 2
minutes.
Mr. CLAY. Let me thank Chairwoman Waters for yielding and also for
her leadership on this issue in getting this bill out of committee and
to the floor.
As an original cosponsor of this legislation, I support its speedy
passage through the legislative process. This bill is sorely needed to
help stabilize neighborhoods in various types of communities that have
high incidences of housing foreclosures.
This act establishes a loan and grant program administered by the
Department of Housing and Urban Development to help States purchase and
rehabilitate owner-vacated, foreclosed homes with the goal of
stabilizing and occupying them as soon as possible, either through
resale or rental to qualified families.
I raised concerns about the distribution of loans and grants to
Chairwoman Waters, and the bill's funds were originally designed for
distribution to States with priority for the 25 most populated cities
in the country.
My concern was that many of us had districts that had higher density
of foreclosures than many of the top 25 cities in population.
Additionally, we needed to ascertain that housing was provided for low-
and moderate-income families, inclusive of those who had already
suffered foreclosures.
My staff and I worked closely with Chairwoman Waters and her
committee staff and placed provisions in the bill that address these
concerns. My district, the First Congressional District of Missouri,
has alarmingly high foreclosure rates and large numbers of low- and
moderate-income families. The bill now mandates a priority for
addressing this high foreclosure level area and others like it across
the country.
Again, I want to thank Chairwoman Waters for her leadership on this.
Mrs. CAPITO. Madam Chairman, I yield 4 minutes to the gentleman from
Texas (Mr. Hensarling), a member of the Financial Services Committee.
Mr. HENSARLING. I thank the gentlelady for yielding, and I certainly
rise in opposition to this bill. I have no doubt that it is certainly
good-hearted but it is certainly wrongheaded.
There is a great challenge in our housing markets today, but I come
here with some interest and amusement to see how many of my friends on
the Democratic side of the aisle bemoaned the Bear Stearns bailout by
the Federal Reserve, only to come here and offer a bill that,
ultimately, using the States and localities as a conduit, is going to
bail out Wall Street. It's going to bail out the investors, the people
who own these properties in the first place, the people who made bad
debts.
I wish somebody would introduce a bill to bail me out of my bad
debts. Perhaps next time I invest in real estate or the stock market or
the commodities, somebody will come here and say, if I failed, we will
get the taxpayer to come in and bail me out.
Second of all, it misses the point of what the true challenge is. The
true challenge in our housing markets is a shrinking paycheck, and I
know as much as our friends on the other side of the aisle wish to come
and blame all the economic woes of our Nation on us, the truth is
elections have consequences. They've been in charge of the economic
policy of this Nation for almost 18 months now. And what have they done
in 18 months?
Number one, they passed a budget that has the largest single tax
increase in American history, largest single tax increase in American
history. After 3 years fully phased in, it's going to be a $3,000
average burden on the American family. That shrinking paycheck causes
people not to be able to pay their mortgage bills.
We know what's happened to gasoline prices, almost $4 a gallon.
Shrinking paycheck. Now supposedly they were going to bring the price
of gas down when they were elected. The American people know
differently, and it's not just gasoline that's $4 a gallon. Milk. I've
got a 6-year-old and a 4-year-old back home in Dallas, Texas. They
drink a lot of milk. Milk's expensive. The cereal they like, it's
expensive, all happening under their watch. A shrinking paycheck.
How are people supposed to afford their mortgage when they're having
to pay historic high gasoline prices, historic high food prices and pay
an extra $3,000 in taxes? Madam Chairman, that's the real challenge
that America's families are facing now.
And here's another problem with this particular piece of legislation
that I find. It ignores the greater crisis in America, and that is the
spending crisis, the one that is ignored on a daily basis here. Already
we notice that when the new Member from Louisiana was sworn in today,
we all saw that he had his baby in his arms, and, I don't know, it
might have been a 1-year-old or 2-year-old child, but that child
already has inherited a debt of almost $200,000 because Congress after
Congress keeps on spending money and sends the burden to future
generations.
So, you know, what is it? It's $7.5 billion for grants here and $7.5
billion for loans there. Well, Madam Chairman, sooner or later we're
talking about real money.
{time} 2030
We're on the verge of being the first generation in America's history
to leave the next generation with a lower standard of living. And it's
not just me that's saying it, it's the Congressional Budget Office, the
Office of Management and Budget, the General Accountability Office. And
yet again, the Democrat majority ignores that true crisis.
I also find it quite interesting that while the Federal Government
continues to be awash in the sea of red ink in passing on unfunded
obligations to future generations, that almost every State and
municipality in the Nation is running a surplus.
The Acting CHAIRMAN. The gentleman's time has expired.
Mrs. CAPITO. I yield the gentleman 1 additional minute.
Mr. HENSARLING. So we're taking money away from a treasury that has
none to supplement treasuries that do have some. We have a great
challenge in our Nation.
And clearly predatory lending took place, I might add, so did
predatory borrowing. And so we need to help people, but the way to help
them when people are struggling to pay their mortgages is not to raise
their taxes and force them to pay the mortgages of their neighbor,
particularly a number of neighbors and Wall Street investors who
speculated, who might have engaged in fraud.
But Madam Chairman, back to the States and localities. For example,
the Commonwealth of Massachusetts spends $11 million a year on their
Office of Tourism. If we're having a great housing crisis, maybe they
could cut back a little on the tourism budget and help the people in
need for housing.
The Acting CHAIRMAN. The gentleman's time has again expired.
Mrs. CAPITO. I yield the gentleman another 2 minutes.
Mr. HENSARLING. Again, if this is such a great priority for the
States and they're crying out for these loans and grants, why does the
State of Massachusetts continue to spend $760,245 for pools and spray
pools under the control of the Department of Conservation and
Recreation?
Michigan, $9.4 million to enhance public boating access and dock
facilities. I have no doubt, Madam Chairman, that this is important.
But again, if we have a housing crisis, maybe the good people of
Michigan could cut back a little on their boating access facilities.
State of Ohio. They apparently have a wonderful ``Discover Ohio''
tourism and marketing campaign, $8.2 million. Maybe they could use some
of that money to assist the people in their State.
How about some of the municipalities? According to the Daily News,
Los Angeles spends a half a million dollars, $550,000 to be exact, for
calligraphers to decorate proclamations and honors. I'm sure that those
proclamations are very handsome, but again, if we're having a housing
crisis, maybe people in Los Angeles can cut back on the calligraphy to
assist the people in need. And yet the Democrat majority--and the
gentlelady from California who perhaps
[[Page H3159]]
is familiar with the calligraphy--has decided instead to take the money
away from the Federal Treasury, help raise taxes on hardworking
American families while they're trying to fill up their cars to take
their children to school, to try to go to work, so that ultimately
we're subsidizing Ohio tourism, L.A. calligraphy, water boating access
in Michigan, and the list goes on and on. Surely we can find something
that is more fiscally responsible and more creative than yet another
grant and loan program to States and localities that ultimately bail
out investors and Wall Street.
This is bad legislation. It should be defeated.
Ms. WATERS. Madam Chairman, I yield 2 minutes to the gentleman from
Minnesota, a member of our committee, both the subcommittee and
Financial Services, Mr. Keith Ellison.
Mr. ELLISON. Madam Chairman, let me start by thanking Chairman Frank
and Chairwoman Waters for bringing this critical and much-needed
legislation to the floor. I'm proud to have worked with both of them on
this important legislation which represents the most comprehensive
response yet in the American mortgage crisis.
The package of housing measures that we will vote on today and that I
proudly support will help thousands of families facing foreclosure keep
their homes. This bill will ultimately help other families avoid
foreclosures in the future and help recovery of communities harmed by
empty homes caught in the foreclosure crisis.
This legislation comes before us at an important time in the mortgage
foreclosure and housing crisis. The Pew Center has stated that between
seven to eight thousand people per day are filing for foreclosure.
Hennepin County alone, which is the largest county in the Fifth
District of Minnesota that I represent, has experienced a 54 percent
increase in foreclosures from the year before. Statewide foreclosures
have risen by 39 percent.
The legislation we're considering today establishes a $15 billion
HUD-administered loan and grant program for the purpose of
rehabilitation of vacant, foreclosed homes with the goal of occupying
them as soon as possible.
Madam Chairman, let me just say this: The fact of the matter is that
for the people who paid every single mortgage payment and were never
late even one time, they are suffering because of this mortgage crisis
because they live on a block with foreclosed homes.
This bill saves money. Can you imagine the cost to a city, in terms
of fire, police and public works resources, just to be able to deal
with a home that's foreclosed on a block? This is saving money. This is
actually improving the quality of life for people all over America. And
this amount of money that we will spend on this bill will pay thousand-
fold in terms of quality of life for people all over this country.
And so I'm proud to be able to associate myself with this bill, proud
to be able to say that when the people of America face a serious
foreclosure crisis that is affecting not just the victims of
foreclosure, but others, we responded.
Mrs. CAPITO. Madam Chairman, I yield 4 minutes to the gentleman from
Georgia (Mr. Price), who is also a member of the Financial Services
Committee.
Mr. PRICE of Georgia. I thank my good friend from West Virginia for
her leadership on this and for cogently bringing the debate forward and
stating why this is the wrong bill at the wrong time.
I am pleased to hear from my friend, though, from Minnesota who said
that this was going to save America money. If we keep saving money at
this rate, our deficit ought to disappear in short order, $15 billion
chunks going out the door. I'm not sure how that math adds up, but I'm
certain that it works somewhere.
I want to commend my friend from Illinois for raising the point, as I
know that the chairwoman acknowledged, and that is that there was no
bidding process. There is really no accountability in this bill. Yes,
there are plans that have to be proposed and submitted, but there's no
oversight, there is no oversight of this money. Fifteen billion dollars
could go to anybody, truly, who was a friend or a crony of any official
in a State or a city. And we're going to trust the cities, as the
chairman said, it was important that we trusted the cities. And I
believe primarily that that is important that we do trust cities. If we
trusted cities so much, though, then why would we not adopt an
amendment that I proposed in committee that said that we ought to let
the city do with the property what they deemed appropriate? But we
haven't done that. We said oh, no, even if this facility, this housing
facility is public housing and is absolutely dilapidated, you couldn't
demolish it. Oh, no, we wouldn't want that to happen. We wouldn't want
the city to make a decision that they could do something better with
that property. In fact, this bill precludes that opportunity.
I heard the chairwoman say that she wouldn't want to add an amendment
that would provide for that accountability or that oversight because it
might bog down getting the money to the cities. Well, Madam Chairman,
I'll tell you what will bog down getting money to the cities, if people
were really sincerely interested in that, and that's a veto. And this
bill will be vetoed by the President of the United States for
appropriate reasons because it is irresponsible and it is not
appropriate to spend the kind of money that we're talking about without
any oversight and without any accountability. Remember, $15 billion.
I am constantly surprised, truly, by my friends on the other side of
the aisle who don't seem to remember where this money comes from. Where
does this money come from? It comes from hardworking Americans. And I
would suggest, Madam Chairman, as my friend from Texas said, that
hardworking Americans have a significant challenge right now in some
aspects of their life, trying to make certain that they can afford the
increase in gas prices under this majority, for the increasing prices
for commodities under this majority. And so it would be appropriate
that we remember that, and that we allow more Americans to keep more of
their hard-earned money.
Now what is the solution? Well, I would suggest, Madam Chairman, that
a couple of programs that are in place right now and are working
diligently to make certain that people can stay in their homes, FHA
Secure is a program that is administered by the Federal Housing
Authority that provides greater flexibility for refinancing homes for
hundreds of thousands of Americans. The Hope Now Alliance was a program
that was put into place, a private sector cooperative effort that
actually makes it so that struggling homeowners can get the kind of
counseling and guidance to assist them to refinance their mortgages.
More than 1.4 million Americans, Madam Chairman, have been shown the
opportunity to be able to stay in their home.
These are positive and productive programs that make it so that
individuals can stay in their home. They aren't a bailout that is being
proposed by the other side. They aren't taking $15 billion of hard-
earned taxpayer money and saying, ``It's okay. We'll cover it. Don't
worry about that. The American people's pocketbook is absolutely
endless.''
This is a bad bill, wrong bill, wrong time. I urge my colleagues to
vote ``no.''
Ms. WATERS. I yield 1 minute to the gentleman from Ohio, a member of
the Financial Services Committee, Mr. Charlie Wilson.
Mr. WILSON of Ohio. Madam Chairman, I rise today in support of H.R.
5818. As a Member from Ohio, one of the States that has been hardest
hit by foreclosures, I know how important it is for us to pass this
bill.
Thirty-six percent of all the homeowners in Ohio will feel the
effects of what's going on in the subprime crisis. The pain isn't
limited to just the families losing their homes, but also the neighbors
and the neighborhood around. What happens is homeowners are projected
to each lose as much as $2,000 in property value during this crisis.
And because of that, the State of Ohio will lose approximately $3
billion in tax base. These are truly scary numbers.
H.R. 5818 will help Ohio and America begin to heal. The flexible bill
will give loans and grants directly to the States. States will then be
able to clean up the blight, help families stay in their homes, and
rehabilitate long vacant and decrepit homes. States will be able to
stabilize their entire neighborhoods that are hurting from
foreclosures.
[[Page H3160]]
The Acting CHAIRMAN. The gentleman's time has expired.
Ms. WATERS. I yield the gentleman 30 additional seconds.
Mr. WILSON of Ohio. I would like to thank Congresswoman Waters for
her hard work, for working with me on this vitally important issue. And
I'm proud to support H.R. 5818 and urge my colleagues to do the same.
Mrs. CAPITO. Madam Chairman, may I inquire as to how much time is
remaining on each side.
The Acting CHAIRMAN. The gentlewoman from West Virginia controls 7\1/
2\ minutes. The gentlewoman from California has 7\1/2\ minutes
remaining.
Mrs. CAPITO. I would like to reserve the balance of my time.
Ms. WATERS. Madam Chairman, I yield 1 minute to the gentlewoman from
California, Ms. Barbara Lee.
Ms. LEE. Let me thank Chairwoman Waters for continuing to take on the
tough issues as she once again is taking on this tough issue of the
foreclosure crisis with this bill. I want to thank her for her
leadership and also Chairman Frank.
This bill will give HUD the tools to work with States and local
governments to identify distressed neighborhoods and purchase and
rehabilitate vacant houses before they become a blight on their
neighborhoods.
There are entire neighborhoods in my district in Oakland, California
that are threatened, quite frankly, with complete collapse. The longer
homes stay empty, the more likely they will further destabilize already
fragile communities, discourage investment, depress home values, and
create a spiraling cycle of foreclosures.
This bill provides $15 billion in loans and grants to directly
relieve these neighborhoods. This is just half of what this
administration has already spent on bailing out Bear Stearns. Thank
goodness Congresswoman Waters has provided this plan to help stabilize
communities.
I urge an ``aye'' vote.
Ms. WATERS. I yield 1 minute to one of our newest Members, and a
member of the Financial Services Committee, Mr. Andre Carson.
Mr. CARSON of Indiana. Madam Chairman, I rise today in strong support
of H.R. 5818, the Neighborhood Stabilization Act of 2008.
This bill is extremely important to me as a representative from
Indiana's Seventh Congressional District. My district has suffered with
disproportionately high rates of foreclosures. In fact, Indiana has
consistently rated among the top 10 States nationally for foreclosures,
along with Michigan and Ohio.
We frequently hear how housing vacancies have had a negative impact
on property values, but as someone who has spent their career in law
enforcement, I know that vacancies can also foster violence and theft
in our neighborhoods.
This bill could help communities rebuild property value and maintain
stability in our neighborhoods. I want to thank Congresswoman McCarthy
and Congressman Capuano for working with me on an amendment in
committee to include first responders to those States that may
establish preferences in their housing priorities.
{time} 2045
I see firsthand the dedication and passion these firefighters,
emergency medical service providers, and police officers have for
others. They put their lives at risk every day for the safety of those
in our city.
This bill is responsible and thoughtful, and I want to thank
Congressman Frank and Chairwoman Waters for their outstanding work on
H.R. 5818.
Mrs. CAPITO. Madam Chairman, I would like to yield 3 minutes to the
gentleman from New Jersey (Mr. Garrett), a member of the Financial
Services Committee.
Mr. GARRETT of New Jersey. I thank the gentlewoman for the time.
Madam Chairman, I come to the floor optimistic inasmuch as I have
heard, I think, where maybe five or six Members on the other side of
the aisle raised the issue of exactly what transpired with regard to
Bear Stearns and that circumstance some 2 months ago. I come optimistic
but at the same time somewhat perplexed because, as I say, this did
occur with regard to the Federal Reserve some 2 months ago, and
immediately thereafter my office contacted the full body of our
committee, both Republicans and Democrats, saying should not our
committee be investigating what transpired there? And we extended a
hand to the other side to say let's do two things: First, let's contact
the Federal Reserve and Secretary Paulson to raise the issues that are
now being raised at this belated date by the other side of the aisle.
We came through at that time with a list of upwards of nine pertinent
questions, questions such as, the SEC states that it monitored Bear
Stearns' capital and liquidity positions on a regular basis and that
levels of both capital and liquidity appeared adequate right up into
the week of March 11, but given the subsequent rapid deterioration in
Bear Stearns' financial condition, does the SEC have the capacity and
authority it needs to assess these risks? Secondly, why wasn't the loan
made in a traditional manner? If, as stated in President Geithner's
testimony to the Senate Banking Committee that the Federal Reserve did
not have the authority to acquire interest, what authority does it have
now?
These were the questions that we were posing that should have been
answered several months ago. We extended the opportunity to the other
side at that time to join with us in this letter to make this
investigation. Oddly enough, at that time no one on the other side of
the aisle found a need to do so.
Also what is odd with regard to the investigation in this matter, the
committee of jurisdiction looking into what the Federal Reserve did
would be the Financial Services Committee. Once again, our side of the
aisle suggested to the chairman that we should be delving into the
issues that the other side is raising tonight, belatedly. We extended
the opportunity to send a letter to Chairman Frank, with signatures of
most Members on our side of the aisle to the chairman, saying should we
not be looking at these issues, these nine issues that I just
referenced before to the Federal Reserve and also Paulson? Should we
not be looking into this in Financial Services? Two months ago no one
from the other side of the aisle saw it as pertinent. Tonight, as we go
into it here and from the rhetoric that comes to the floor, they all
say that they are interested in examining what the Federal Reserve is
doing.
That's why I say I come to the floor optimistic and a little bit
happy because now I believe that when I leave the podium tonight, I can
go to the other side of the aisle and I will be more than happy to do
two things: To make an addendum to our questions to Secretary Paulson
and the Federal Reserve and to make an addendum to Chairman Frank to
say that in both cases we should be investigating it and that we would
ask that Chairman Frank schedule hearings forthwith, immediately, so
that we can go into the matters that you are raising and that I have
raised as well to see what authority the Federal Reserve has to conduct
these activities.
Ms. WATERS. Madam Chairman, I would like to yield to the gentlewoman
from Cleveland, Ohio (Mrs. Jones) 1\1/2\ minutes and remind her that it
was 2 years ago when I was in her city that she asked me to come to a
town hall meeting where this issue was being discussed at that time and
most of us really didn't understand the depth of it.
Mrs. JONES of Ohio. Chairman Waters, I want to salute you and the
work you've done in the housing area in Financial Services. Everybody
knows that the Housing Subcommittee under your leadership has focused
on issues important to everyday people, and I want to thank you for
that leadership.
And, Madam Chairman, you know what is the most amazing thing when I
sit on the floor of this House? All the superfluous stuff that is
discussed when a piece of legislation that's sorely needed by the
people of America comes to the floor.
Now it was a Republican administration for the past 8 years that has
oversight on oil. If they wanted to do something about it, they could
have done it by now. Why are they bringing it up on the housing
legislation? Let's talk about oversight of all those billions of
dollars that got lost in that truck in Iraq. This Republican
administration.
But before I get lost, let me come to why I'm standing here. I stand
here to
[[Page H3161]]
support the legislation because the city of Cleveland is in desperate
straits around this particular problem: Housing and foreclosures. I am
so pleased that I have been able to add an amendment that would
simplify the Federal historic rehabilitation tax credit in the process
of this so that we can use some of this historic housing to be able to
make some changes in the lives of the people.
It's just an amazing thing. I know the people of America are out
there listening, and they're looking at who is it that is stepping up
for them when they're in trouble? Who is it that understands that they
need to pay their homeowner costs, their costs for their housing? And
who is it to say, no, we're going to wait to try to figure out
something else, add a new law. Come on now.
Vote for this legislation.
Mrs. CAPITO. Madam Chairman, I yield to the gentleman from New Jersey
(Mr. Garrett) 1 additional minute.
Mr. GARRETT of New Jersey. Madam Chairman, actually at this time I'd
just like to put into the Record the letter that was signed by Members
from our side of the aisle to Chairman Frank back on April 7, which
would have been a month ago now, requesting an expedited hearing with
regard to the Financial Services situation with regard to the Federal
Reserve and the Financial Services hearing. Also, I will put in the
Record a letter dated April 16 to Secretary Paulson from the Department
of Treasury and Chairman Bernanke of the Federal Reserve as well,
itemizing the nine particular questions with regard to their authority
and activity; and also the letter in response dated April 14 from
Chairman Barney Frank with regard to not setting forth a date for any
hearing going forward.
House of Representatives,
Washington, DC, April 7, 2008.
Hon. Barney Frank,
Chairman, Committee on Financial Services,
Washington, DC.
Dear Chairman Frank: We are writing to respectfully request
you hold a hearing of the full Financial Services Committee
regarding the recent collapse of the investment bank Bear
Stearns and the subsequent actions taken by the Federal
Reserve to facilitate Bear Stearns' sale to J.P. Morgan
Chase. These steps have had an immediate impact on the
financial markets and are also expected to have a long-term
effect on our financial regulatory structure.
For the first time since the Great Depression, the Fed
voted to open its discount window to primary dealers. While
this authority has been available to the Fed since 1932, the
decision to use it at this time has raised questions about
whether and when the Fed should intervene to help a
particular industry or firm in the name of market stability.
With the Fed approving the financing arrangements of the
sale of Bear Stearns to J.P. Morgan Chase as well as
guaranteeing $29 billion in securities currently held by Bear
Stearns, the Fed has possibly exposed the American taxpayers
to unknown amounts of financial loss and established a
precedent that could lead to future instances of companies in
similar financial trouble expecting the same assistance.
These extraordinary actions have raised a number of complex
and multifaceted questions. As members of the committee of
jurisdiction over our nation's financial markets and the
regulatory bodies that oversee them, we feel it is imperative
to have a full and public vetting of this unique situation.
Therefore, we strongly urge you to convene a hearing on this
subject of the Financial Services Committee on the soonest
possible date.
Thank you for your consideration of this request.
____
Congress of the United States,
Washington, DC, April 16, 2008.
Hon. Henry M. Paulson,
Secretary, Department of the Treasury,
Washington, DC.
Hon. Ben S. Bernanke,
Chairman, Board of Governors of the Federal Reserve System,
Washington DC.
Dear Secretary Paulson and Chairman Bernanke: We are
writing regarding the recent collapse of Bear Stearns and the
subsequent actions taken by the Federal Reserve to facilitate
Bear Stearns' sale to J.P. Morgan Chase. These steps have had
an immediate impact on our nation's financial markets and
have the potential to drastically alter the future regulatory
structure of our entire financial system.
For the first time since the Great Depression, the Federal
Reserve voted to open the discount window to primary dealers.
While it has been suggested that this authority has been
available to the Federal Reserve since 1932, the decision to
use it at this time has raised questions about whether and
when the Federal Reserve should intervene to help a
particular industry or firm in the name of market stability.
With the Federal Reserve approving the financing
arrangements of the sale of Bear Stearns to J.P. Morgan
Chase, as well as guaranteeing $29 billion in securities
currently held by Bear Stearns, the Federal Reserve has
possibly exposed the American taxpayers to a tremendous
amount of financial loss. We have concerns that this will
establish a precedent that could lead to future instances of
companies in similar financial trouble expecting the same
government intervention.
We know the long-term health of our economy is of the
utmost importance to you both. However, these extraordinary
actions have raised a number of complex questions. Below, we
have included a list of some of the specific questions that
we believe highlight areas of significant importance.
Questions
1. In testimony before the Senate Banking Committee on
April 3, 2008, it was indicated that the assets the Federal
Reserve will accept as collateral for the $29 billion loan
are highly-rated, that J.P. Morgan Chase will keep the
riskiest and most complex Bear Stearns assets, and that the
Federal Reserve set parameters for the quality of assets that
it would or would not accept. What was the minimum threshold
for asset quality?
2. The Securities and Exchange Commission (SEC) states that
it monitored Bear Stearns' capital and liquidity positions on
a regular basis, and that levels of both capital and
liquidity appeared adequate going into the week of March 11-
17. Given the subsequent rapid deterioration in Bear Stearns'
financial condition, does the SEC have the capability and/or
authority it needs to assess risk in systemically-important
broker/dealers, especially at the holding company level?
3. Now that primary dealers are granted the privilege of
borrowing directly from the Federal Reserve (through the
Primary Dealer Credit Facility), should they be subject to
the same oversight that commercial banks must undergo to be
eligible to borrow at the discount window? What are the
possible negative implications of such regulations?
4. Bear Stearns has been described by some as ``too
interconnected to fail,'' as opposed to ``too big to fail.''
How can regulators identify which firms are too
interconnected to fail? Also, some administration
participants have justified federal involvement with this
transaction by suggesting that one interconnected company
could unilaterally bring down our country's entire financial
markets system. How would that be possible in this instance?
5. Why wasn't the ``loan'' made as a traditional discount
window loan to J.P. Morgan Chase? If, as stated in President
Geithner's testimony to the Senate Banking Committee, the
Federal Reserve did not have the authority to acquire an
equity interest in J.P. Morgan, Chase or Bear Stearns, what
authority allows it to create and finance an LLC to purchase
assets?
6. If the $29 billion is not to be made available to J.P.
Morgan Chase until the merger with Bear Stearns is completed,
why is the loan necessary at all? Why is J.P. Morgan Chase
unwilling to hold assets that have been priced at current
market value and are highly rated?
7. In 1991, the Federal Deposit Insurance Corporation
Improvement Act (FDICIA, P.L. 102-242, 105 Stat. 2236) set a
limit on the Federal Deposit Insurance Corporation's (FDIC)
ability to borrow from Treasury at $30 billion. The statute
establishes certain standards, including rate of interest
standards but leaves other terms to the Secretary of the
Treasury and the FDIC. At the pertinent part it reads:
The Corporation is authorized to borrow from the Treasury,
and the Secretary of the Treasury is authorized and directed
to loan to the Corporation on such terms as may be fixed by
the Corporation and the Secretary, such funds as in the
judgment of the Board of Directors of the Corporation are
from time to time required for insurance purposes, not
exceeding in the aggregate $30,000,000,000 outstanding at
anyone time, subject to the approval of the Secretary of the
Treasury. . . . Any such loan shall be used by the
Corporation solely in carrying out its functions with respect
to such insurance. . . . (12 U.S.C. Sec. 1824)
Did this $30 billion limit have any role in the Bear
Stearns negotiations? How did that figure emerge?
8. A separate provision of the FDIC Act added by FDICIA
requires the FDIC to resolve failed institutions on the basis
of least cost to the insurance fund but permits the
suspension of that requirement when following the least cost
standard ``would have serious adverse effects on economic
conditions or financial stability . . . and . . . any action
or assistance [beyond what would be the least cost
resolution] would avoid or mitigate such adverse effects.''
[12 U.S.C. Sec. 1823(c)(4)(G)(i).] This authority may not be
invoked, however, without consultation with the President and
the written recommendations from the FDIC and the Federal
Reserve Board.
Was the President consulted? Were there any written
findings by the Federal Reserve or the Department of the
Treasury or any documents projecting the potential adverse
effects without the intervention and the mitigation that
would be effectuated by the intervention?
9. Is there any known information regarding any potential
conflicts of interest of any of the parties involved in this
transaction?
We appreciate your service to the country and look forward
to working with you closely on these issues as we move
forward. Thank you for attention to these concerns.
[[Page H3162]]
____
House of Representatives,
Washington, DC, April 14, 2008.
Hon. Scott Garrett,
Congressman, House of Representatives,
Washington, DC.
Dear Mr. Garrett: I received the letter signed by you and
sixteen of your Republican colleagues on the Financial
Services Committee expressing your concern that the recent
actions by the top financial appointees of the Bush
administration in the matter of Bear Stearns have ``possibly
exposed the American taxpayers to unknown amounts of
financial loss and established a precedent that could lead to
future instances of companies in similar financial trouble
expecting the same assistance.'' It does occur to me as I
read your letter that I have somewhat more confidence in the
judgment exercised by Secretary of the Treasury Paulson and
his aides and Federal Reserve Chairman Bernanke and other
officials of the Federal Reserve System than you appear to
have, but that is no reason for us not to give this the
fullest possible airing. So I do agree that we should be
thoroughly examining this matter.
Where we may disagree is the context in which this happens.
That is, I agree with you that we should have a ``full and
public vetting of this'' matter, but I do not think it is
necessary that we have the hearing ``on the soonest possible
date.'' I say this for two reasons.
First, the Committee, as you know, is now engaged in
serious consideration of the appropriate response to the
foreclosure crisis that now confronts us. I realize that
there are some who believe that we should take no action at
all, but I think the recent movement by the Bush
administration to expand the reach of the FHA, even though I
do not agree with it in all respects--is recognition of the
need for some action. I therefore believe that it is
important that the Committee continue its efforts on dealing
with the current crisis, in cooperation with our Senate
colleagues who as you know in a bipartisan way have also
moved forward on legislation, although I do not agree myself
with all aspects of it. My intention is to ask that the
Committee continue to focus on this for the next several
weeks.
Secondly, I do believe it is important for the Committee to
begin an investigation, including hearings, into the Bear
Stearns issue, but not in isolation. It is important that we
look at what happened with regard to Bear Stearns, not
primarily as a matter of hindsight because in fact we cannot
undo what was done, but rather from the standpoint of
anticipating what the public response should be in similar
matters going forward. This includes of course discussing
whether or not these specific actions taken in the Bear
Stearns case were the best ones from the public standpoint,
but also beginning the very important issue of what we might
do in Congress to make it less likely that situation of this
sort will recur. You correctly note in your letter that what
the Bush Administration did in this case did establish ``a
precedent that could lead to future instances of companies .
. . expecting the same assistance.'' I think it is important
that we therefore empower some federal entities to take
actions that may make this less likely, and would also allow
them to accompany any such intervention if it should later be
decided to be necessary with appropriate remedial matters.
In summary, I agree that the Committee should be looking
into this, not from the standpoint of rebuking Chairman
Bernanke or Secretary Paulson, but rather as part of a
serious consideration of the causes of the current crisis and
more importantly, what we can do to make a recurrence of the
events that led up to the Bear Stearns response much less
likely in the future.
At this time I again will extend a hand, and I will yield to the
other side to identify which Members from the other side of the aisle
will be willing to sign onto the letter to Chairman Frank or to
Chairman Bernanke, if there is anyone from the other side who is
willing to sign onto the letters. If not, I will be waiting and I will
be glad to do an addendum.
Ms. WATERS. Madam Chairman, I have no further requests for time, and
I reserve the balance of my time.
Mrs. CAPITO. Madam Chairman, could I inquire of how much time we have
remaining.
The Acting CHAIRMAN. The gentlewoman from West Virginia controls 3\1/
2\ minutes. The gentlewoman from California controls 4 minutes.
Mrs. CAPITO. Madam Chairman, I am ready to close. I have no
additional speakers as well.
I think we have heard a stark difference in opinion on this bill. I
would like to make a distinction, as we have heard the discussion going
back and forth, and I think the good-natured way that the debate has
gone forward but also the intent of this bill is unquestionably a good
intent.
But I would like to clarify to those who are listening that this bill
is separate and apart from that person who can't sleep at night, that
family who stays up at night trying to figure out how to meet the high
cost of gas, how to meet the higher cost of food, and how to make their
mortgage payment. We've been working with FHA to get people to
refinance and to redo their loans so they can stay in their house, and
I don't want there to be confusion concerning this bill and the next
bill that we are going to be considering shortly after this.
This bill, separate and apart, is not going to help that family who
can't figure out in the middle of the night how they are going to stay
in their home, how they are going to pay their mortgage. These
properties that we're also discussing are already foreclosed-upon
properties. They're owned by investors, speculators, and financial
institutions. And that's our objection. I don't believe we are in a
position, and I don't think any of the speakers on our side believe
we're in a position for a costly bailout for the lenders, servicers,
and real estate speculators who have made risky bets on the housing
market and who are now going to off-load their properties into a
government program. I think that penalizes every single taxpayer, and
it really penalizes that person at night who can't figure out how
they're going to get up and pay their mortgage the next day, and that's
the person we desperately need and we want to help and it's proper that
we should help.
So I believe that H.R. 5818 is overly broad. It's a new government
program that is going to end up creating a moral hazard, and it's going
to end up benefiting not individuals, not people who are having trouble
making their mortgage payments, not people who find themselves upside
down in their house. It's going to end up benefiting, at the cost of
the taxpayers, and I repeat again, lenders, servicers, and real estate
speculators.
And with that, I urge a ``no'' vote on H.R. 5818.
Madam Chairman, I yield back the balance of my time.
Ms. WATERS. Madam Chairman, I yield myself the balance of my time.
Madam Chairman and Members, I would like to thank all of the Members
who have come to the floor today in support of this legislation because
they understand the devastation to neighborhoods all over this country.
I have listened very carefully to the arguments from the opposite
side of the aisle, and none of them rise to the merit of being able to
oppose this bill because they're substantive arguments.
First of all, I have heard Members on the opposite side of the aisle
talk about taxes. They have talked about gasoline. They have talked
about everything except what we are here to talk about: the fact that
there has been a subprime meltdown in this country and many
neighborhoods are devastated. We have homes that are being stripped of
the copper. We have homes that have been boarded up with vandals inside
those homes, oftentimes living inside those homes, with the weeds
growing up in many of these properties, and the value of the homes in
the neighborhood where people are attempting to maintain their homes is
going down every day.
We had one Member on the opposite side of the aisle talk about how
flush these cities are with money. Evidently, he has not looked at what
is going on in the cities and States. Many of them are in deficit
situations. They're in deficit situations because we're in this
recession, this nonperforming economy under the leadership of the
President of the United States where the price of food has risen,
gasoline prices are up, and the subprime mess is fueling the problems
of our economy. And with all of this that has taken place under this
President and this administration, you would think that the Members on
the opposite side of the aisle would want to come to the aid of their
constituents.
We have talked about the $30 billion bailout under the Fed Chairman
that was appointed by this President. And I am sure, since we did not
get a call in the middle of the night to even discuss with us that the
bailout was going to take place, I'm sure that the Fed Chairman called
the President that appointed him. And I would give anything--I would
place money on the line--to tell you that the President approved of
that bailout. And so why not bail out the people who deserve to be
helped? People, many of them who got into loans that were lured into
these loans, lured into these mortgages by unscrupulous real estate
brokers who
[[Page H3163]]
told them to just sign on the dotted line, by unscrupulous folks
representing some of the financial institutions who said get into this
ARM and when it resets, I will be there to help you refinance it, and,
of course, they're not there. These people, many of them have lost
these homes through no fault of their own.
But the neighborhoods are being devastated. We have information here
that tells us how much crime will be fostered on the neighborhoods. As
a matter of fact, what we have learned is that when there is one
foreclosure, it leads to not only vandalism that affects the entire
neighborhood, but it also increases the crime. This has all been
documented.
I would think that the representatives who have been sent here by the
people who have voted for them would want to be able to go home and say
to their constituents, I understand what's going on in the
neighborhoods; to say to their mayors and to say to their Governors and
to say to their county commissioners, ``We are here to help.'' Yes, we
are spending a lot of money on other things. As a matter of fact, many
of the Members on the opposite side of the aisle, in a matter of hours,
are going to vote for over $107 billion in supplemental funding to
continue the war in Iraq.
{time} 2100
Many of these Members have voted to give tax increases to the richest
1 percent in America. The least they could do is vote for the citizens
and for their cities.
I yield back the balance of my time.
The Acting CHAIRMAN. All time for general debate has expired.
Pursuant to the rule, the amendment in the nature of a substitute
printed in the bill shall be considered as an original bill for the
purpose of amendment under the 5-minute rule and shall be considered
read.
The text of the committee amendment is as follows:
H.R. 5818
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the
``Neighborhood Stabilization Act of 2008''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title and table of contents.
Sec. 2. Congressional purposes.
Sec. 3. Loans and grants to States.
Sec. 4. Qualified plans.
Sec. 5. Allocation of amounts.
Sec. 6. Loans.
Sec. 7. Grants.
Sec. 8. Eligible housing stimulus activities.
Sec. 9. Shared appreciation agreement.
Sec. 10. Spending requirements.
Sec. 11. Servicer contact.
Sec. 12. Accountability.
Sec. 13. Definitions.
Sec. 14. Funding.
Sec. 15. Regulations and implementation.
SEC. 2. CONGRESSIONAL PURPOSES.
The purposes of this Act are--
(1) to establish a loan and grant program administered by
the Department of Housing and Urban Development to help
States, metropolitan cities, and urban counties purchase and
rehabilitate owner-vacated, foreclosed homes with the goal of
stabilizing and occupying them as soon as possible, either
through resale or rental to qualified families;
(2) to distribute these loans and grants to areas with the
highest levels of foreclosure and delinquent subprime
mortgages;
(3) to provide incentives for States, metropolitan cities,
and urban counties to use the funds to stabilize as many
properties as possible; and
(4) to provide housing for low- and moderate-income
families, especially those that have lost homes to
foreclosure.
SEC. 3. LOANS AND GRANTS TO STATES.
The Secretary of Housing and Urban Development shall,
subject to the availability of amounts under section 14, make
grants under section 5(a) to qualified States and make loans
under section 6 in accordance with the approved plans of
qualified States, for use to carry out eligible housing
stimulus activities under section 8.
SEC. 4. QUALIFIED PLANS.
(a) In General.--The Secretary may make a grant under this
Act only to a State, and may allocate a loan authority amount
under this Act only for a State, that has submitted to the
Secretary a plan that meets the requirements under this
section and has been approved under this section. A State
shall reallocate amounts under subsection (f) or (g) of
section 5 only to a qualified metropolitan city or qualified
urban county, respectively, that has submitted to the
Secretary a plan that meets the requirements under this
section and has been approved under this section.
(b) Contents.--A plan under this section for an allocation
recipient shall--
(1) designate a housing finance agency of the allocation
recipient, or other agency, department, or entity of the
allocation recipient, or any other designee, as the
allocation recipient administrator to act on behalf of the
allocation recipient for purposes of this Act;
(2) describe the housing stimulus activities under section
8 to be carried out with assistance under this Act for the
allocation recipient by the entity identified pursuant to
paragraph (1) of this subsection;
(3) prioritize the allocation of funds to low- and
moderate-income neighborhoods with high concentrations of
foreclosures and describe how such activities will help
restore or improve the viability of such neighborhoods by
providing for purchase or occupancy of qualified foreclosed
properties as soon as practicable and in a manner that will
facilitate repayment of the loans provided under this Act for
carrying out such activities;
(4) set forth the procedures that the allocation recipient
will use to allocate grant and loan amounts and monitor for
compliance with the requirements of section 8;
(5) provide that grant and loan amounts provided under this
Act for the allocation recipient will be used only for
eligible housing stimulus activities under section 8 that are
eligible under such section for assistance with grant or loan
amounts, as applicable;
(6) contain such assurances as the Secretary shall require
that the housing stimulus activities to be carried out with
assistance under this Act shall not result in a significant
net loss in rental housing in an area in which such
activities are undertaken;
(7) give priority emphasis and consideration to
metropolitan areas, metropolitan cities, urban areas, rural
areas, low- and moderate-income areas, census tracts and
other areas having the greatest need, including those--
(A) with the greatest percentage of home foreclosures;
(B) with the highest percentage of homes financed by
subprime mortgage loans over 90 days delinquent; or
(C) identified by the State, qualified metropolitan city,
or unit of general local government as likely to face a
significant rise in the rate of home foreclosures.
(8) provide preference for activities that serve the lowest
income families, who otherwise meet the income requirements
under section 8, for the longest period and homeowners, who
otherwise meet such income requirements, whose mortgages have
been foreclosed;
(9) provide preference for use of grant and loan amounts in
connection with acquisition of qualified foreclosed
properties that are acquired no earlier than 60 days after
the owner of the property described in section 13(7)(B)
acquired such ownership;
(10) describe any other preferences the allocation
recipient may establish, such as housing for first
responders, for veterans, for nurses serving underserved
areas or homeless persons, or for homeless persons in
accordance with the 10-year plan of the State to end
homelessness, or providing housing for public school teachers
or workforce who are employed by the city or locality in
which the housing is located;
(11) provide for obligation and outlay of grant amounts,
and for loan commitments and disbursement, in accordance with
the requirements under section 10; and
(12) in the case of any grant or loan amounts that will be
invested with the possibility of a return on investment,
provide for use of any return on such investment only for one
or more eligible housing stimulus activities under section 8.
(c) Submission.--
(1) In general.--The Secretary shall provide for allocation
recipients to submit plans under this section to the
Secretary and shall establish requirements for the contents
and form of such plans. Except in the case of plan
resubmitted pursuant to subsection (d)(3), the Secretary may
not accept or consider a plan unless the plan is submitted to
the Secretary before the expiration of the 30-day period
beginning upon the date of the enactment of this Act.
(2) Public approval.--An allocation recipient may not
submit a plan to the Secretary unless the plan is approved by
the chief executive officer of the allocation recipient after
a public hearing on the plan held pursuant to reasonable
public notice.
(d) Review and Approval.--
(1) Timing.--The Secretary shall review, and approve or
disapprove, each plan submitted or resubmitted pursuant to
paragraph (3) in compliance with the requirements established
under this section before the expiration of the 30-day period
beginning upon the submission of the plan. If the Secretary
does not approve or disapprove a plan that is submitted or
resubmitted in accordance with the requirements under this
section before the expiration of such 30-day period and
notify the allocation recipient of such approval or
disapproval, the plan shall be considered approved for
purposes of this section.
(2) Standard for disapproval.--The Secretary may disapprove
a plan only if the plan fails to comply with the requirements
of this Act.
(3) Resubmission.--If the Secretary disapproves the plan of
an allocation recipient, the Secretary shall submit to the
allocation recipient the reasons for the disapproval, and the
allocation recipient may, during the 15-day period that
begins upon notification of such disapproval and the reasons
for such disapproval, submit to the Secretary a revised plan
for review and approval in accordance with this subsection.
SEC. 5. ALLOCATION OF AMOUNTS.
(a) Grants.--From the total amount made available under
section 14(a) for grants under this Act, the Secretary shall
make a grant to each qualified State in the grant amount
determined under subsection (c) of this section for the
qualified State.
[[Page H3164]]
(b) Loans.--From the aggregate amount of authority for the
outstanding principal balance of loans made under this Act
pursuant to section 14(b)(1), the Secretary shall allocate
such authority for loans under this Act for each qualified
State in the loan authority amount determined under
subsection (c) of this section for the qualified State.
(c) Grant Amounts and Loan Authority Amounts.--
(1) In general.--The grant amount or loan authority amount
for a qualified State shall be the foreclosure grant share or
foreclosure loan share, respectively, for the State
determined under subsection (d), as such share is adjusted in
accordance with an index established or selected by the
Secretary to account for differences between qualified States
in the median price of single family housing in such States.
(2) Limitation on adjustment.--If such adjustment would
result in a grant amount or loan authority amount for any
State that exceeds 125 percent of the foreclosure grant share
or foreclosure loan share, respectively, for the State, the
grant amount or loan authority amount for the State shall be
125 percent of foreclosure grant share or foreclosure loan
share, respectively, for the State and the Secretary shall
increase the grant amounts or loan authority amounts for all
other States on a pro rata basis, except as provided in
paragraph (3), by the amount necessary to account for the
aggregate of any such decreases in grant amounts or loan
authority amounts for States to comply with the 125 percent
limitation.
(3) Limitation on reallocation.--No increase in the grant
amount or loan authority amount for any State from amounts
reallocated pursuant to paragraph (2) shall result in the
grant amount or loan authority amount for any State exceeding
125 percent of the foreclosure grant share or foreclosure
loan share for the State, respectively.
(4) Priority preference for unused amounts.--States which
have their grant or loan amounts reduced under paragraph (2)
shall be granted a priority preference for any loans or
grants which may be reallocated under subsection (i)
(relating to reallocation of funds).
(d) Foreclosure Shares.--For purposes of this section:
(1) Grant share.--The foreclosure grant share for a
qualified State shall be the amount that bears the same ratio
to the total amount made available under section 14(a) as the
number of foreclosures on mortgages for single family housing
and subprime mortgage loans for single family housing that
are over 90 days delinquent, occurring in such State during
the most recently completed four calendar quarters for which
such information is available, as determined by the
Secretary, bears to the aggregate number of such foreclosures
and such delinquent subprime mortgage loans occurring in all
qualified States during such calendar quarters.
(2) Loan share.--The foreclosure loan share for a qualified
State shall be the amount that bears the same ratio to the
aggregate amount of the principal balance of loans that may
be outstanding at any time under this Act pursuant to section
14(b)(1) as the number of foreclosures on mortgages for
single family housing and subprime mortgage loans for single
family housing that are over 90 days delinquent, occurring in
such State during the most recently completed four calendar
quarters for which such information is available, as
determined by the Secretary, bears to the aggregate number of
such foreclosures and such delinquent subprime mortgage loans
occurring in all qualified States during such calendar
quarters.
(e) Distribution of Full Amount.--The Secretary shall
establish the index referred to in subsection (c) and the
grant and loan authority amounts for the qualified States in
a manner that provides that--
(1) the aggregate of the grant amounts for all qualified
States is equal to the total amount made available under
section 14(a); and
(2) the aggregate of the loan authority amounts for all
qualified States is equal to the aggregate amount of
authority for the outstanding principal balance of all loans
made under this Act pursuant to section 14(b)(1).
(f) Requirement To Allocate to Qualified Metropolitan
Cities.--Of any grant amounts and loan authority amounts
allocated pursuant to this section for a State, such State
shall allocate for each qualified metropolitan city located
in such State a portion of such grant amounts and such loan
authority amounts that bears the same ratio to such grant
amounts and loan authority amounts, respectively, allocated
for the State as the number of foreclosures on mortgages for
single family housing and subprime mortgage loans for single
family housing that are over 90 days delinquent, occurring in
such qualified metropolitan city during the most recently
completed four calendar quarters for which such information
is available, as determined by the Secretary, bears to the
aggregate number of such foreclosures and such delinquent
subprime mortgage loans occurring in the State during such
calendar quarters. A State may adjust such allocation to
account for differences between median single family housing
prices in the State and in qualified metropolitan cities in
the State.
(g) Requirement To Allocate to Qualified Urban Counties.--
Of any grant amounts and loan authority amounts allocated
pursuant to this section for a State, such State shall
allocate for each qualified urban county located in such
State a portion of such grant amounts and such loan authority
amounts that bears the same ratio to such grant amounts and
loan authority amounts, respectively, allocated for the State
as the number of foreclosures on mortgages for single family
housing and subprime mortgage loans for single family housing
that are over 90 days delinquent, occurring in such qualified
urban county during the most recently completed four calendar
quarters for which such information is available, as
determined by the Secretary, bears to the aggregate number of
such foreclosures and such delinquent subprime mortgage loans
occurring in the State during such calendar quarters. A State
may adjust such allocation to account for differences between
median single family housing prices in the State and in
qualified urban counties in the State.
(h) Allocation Exception.--If the aggregate grant and loan
authority amount to be allocated pursuant to subsection (f)
or (g) to a qualified metropolitan city or qualified urban
county is less than $10,000,000, a State may, but is not
required to, allocate such grant and loan authority amount to
such qualified metropolitan city or qualified urban county,
and the allocation for such State shall be increased by the
grant and loan authority amount not allocated to such
qualified metropolitan city or qualified urban county.
(i) Reallocation of Unused Amounts.--The Secretary shall
recapture any grant amounts and loan authority amounts
allocated to a State that are not used in a timely fashion in
accordance with section 10, as the Secretary shall prescribe,
and shall reallocate such amounts among all other qualified
States in accordance with the provisions of this Act for
allocation of grant amounts and loan authority amounts.
SEC. 6. LOANS.
(a) Requirement of Loan Authority Amount.--The Secretary
may make a loan under this Act for use in the area of an
allocation recipient only to the extent and in such amounts
that loan authority amounts for such allocation recipient are
available.
(b) Revolving Availability of Loan Authority Amount.--The
loan authority amount allocated for each allocation recipient
shall--
(1) upon the Secretary entering into a binding commitment
to make a loan under this Act for use in the area of such
allocation recipient, be decreased by the amount of the
principal obligation of such loan; and
(2) upon the repayment to the Secretary by any borrower of
any principal amounts borrowed under a loan this Act for use
in the area of such allocation recipient, be increased by the
amount of principal repaid.
(c) Assisted Entities.--The loan authority amount of an
allocation recipient may be used for activities described in
section 8(a) undertaken by--
(1) the allocation recipient;
(2) a unit of local government or a local governmental
entity; or
(3) any other entity, as provided in the approved plan of
the allocation recipient under section 4.
(d) Loan Terms.--Each loan provided under this Act from the
loan authority amount of an allocation recipient shall--
(1) bear no interest;
(2) have a term to maturity of--
(A) 3 years, in the case of any loan made to purchase or
finance the purchase of qualified foreclosed housing for use
under section 8(a)(1) for homeownership; and
(B) 5 years, in the case of any loan made to purchase or
finance the purchase of qualified foreclosed housing for use
under section 8(a)(2) for rental;
(3) not provide for amortization of the principal
obligation of the loan during such term;
(4) be non-recourse;
(5) require payment of the original principal obligation
under the loan only upon the expiration of the term of the
loan; and
(6) have such other terms and conditions as the Secretary
may provide.
(e) Procedure.--A qualified State or, upon its election, a
qualified metropolitan city or qualified urban county shall--
(1) enter into a loan agreement on behalf of the Secretary
on terms established under this Act and any other terms such
State, qualified metropolitan city, or qualified urban county
determines appropriate;
(2) disburse the loan amount in accordance with such terms,
subject only to the absence of sufficient loan authority
amount for such State, such qualified metropolitan city, or
such qualified urban county;
(3) monitor such loans; and
(4) collect and transmit to the Secretary any loan
repayments.
(f) Eligibility for Repeat Lending.--A loan under this Act
may be made to an entity that has previously borrowed amounts
under a loan under this Act only if such entity has repaid 90
percent or more of the amounts due under all previous such
loans. The Secretary may waive such requirement upon a
request by an allocation recipient if the borrower has
demonstrated satisfactory progress in utilizing outstanding
loans and sufficient capacity to utilize additional loan
amounts effectively.
(g) Sunset.--The Secretary may not enter into any
commitment to make a loan under this Act, or make any such
loan, after the expiration of the 48-month period beginning
on the date of the enactment of this Act.
SEC. 7. GRANTS.
The grant amount of an allocation recipient may be used
under section 8(b) by the allocation recipient, a unit of
local government or a local governmental entity, or a
nonprofit organization.
SEC. 8. ELIGIBLE HOUSING STIMULUS ACTIVITIES.
(a) Loan Amounts.--Amounts provided under a loan under this
Act for an allocation recipient shall be used, in accordance
with the approved plan of such allocation recipient, only for
the following activities:
(1) Homeownership housing provision.--To purchase or
finance the purchase of qualified foreclosed housing for
resale as housing for
[[Page H3165]]
homeownership to families having incomes that do not exceed
140 percent of the median income for the area in which the
housing is located.
(2) Rental housing provision.--To purchase or finance the
purchase of qualified foreclosed housing for use as rental,
lease-purchase, or rent-to-own housing, subject to the
following requirements:
(A) Qualified tenants.--All dwelling units in the housing
purchased or financed using any loan amounts shall be
available for rental only by families whose incomes do not
exceed 100 percent of the median income for the area in which
the housing is located.
(B) Rents.--Rents for each dwelling unit in the housing
purchased or financed using any loan amounts shall be
established at amounts that do not exceed market rents for
comparable dwelling units located in the area in which the
housing is located and in accordance with such requirements
as the Secretary shall establish to ensure that rents are
established in a fair, objective, and arms-length manner.
(3) Housing rehabilitation.--To rehabilitate qualified
foreclosed housing acquired with assistance provided pursuant
to this subsection, to the extent necessary to comply with
applicable laws, codes, and other requirements relating to
housing safety, quality, and habitability, or to make
improvements to the housing to increase the energy efficiency
or conservation of the housing or provide a renewable energy
source or sources for the housing, for the purpose of
reselling the housing, to the extent possible, during the 3-
month period that begins upon completion of rehabilitation
and at a price that is as close as possible to the
acquisition price of the housing.
(b) Grant Amounts.--Grant amounts provided under this Act
to an allocation recipient shall be used, in accordance with
the approved plan of such allocation recipient, only for the
following activities:
(1) Operating and holding costs.--For costs of holding and
operating qualified foreclosed housing acquired pursuant to
subsection (a), including costs of management, taxes,
handling, insurance, and other related costs.
(2) Costs relating to property acquisition.--For incidental
costs involved in acquiring qualified foreclosed housing
pursuant to subsection (a), including reasonable closing
costs, except that grant amounts may not be used to pay any
portion of the purchase price for the housing under section
13(7)(C).
(3) Administrative costs.--For costs of the allocation
recipient in administering loan authority amounts and grant
amounts under this Act, except that the amount of grant
amounts provided under this Act to an allocation recipient
that may be used under this paragraph shall not exceed the
amount equal to 8 percent of the sum of the grant amounts
provided to the allocation recipient pursuant to subsection
(a), (f), or (g) of section 5, as applicable, and the loan
authority amount allocated to the allocation recipient
pursuant to subsection (b), (f), or (g) of section 5, as
applicable.
(4) Planning costs.--For planning costs of the State in
connection with this Act, except that the amount of grant
amounts provided under this Act to an allocation recipient
that may be used under this paragraph shall not exceed the
amount equal to 2 percent of the sum of the grant amounts
provided to the allocation recipient pursuant to subsection
(a), (f), or (g) of section 5, as applicable, and the loan
authority amount allocated to the State pursuant to
subsection (b), (f), or (g) of section 5, as applicable.
(5) Housing rehabilitation.--For activities set forth in
subsection (a)(3), except that an allocation recipient shall
not use more than 20 percent of a grant amount allocation for
such activities.
(6) Demolition.--For costs of demolishing qualified
foreclosed housing that is deteriorated or unsafe, but
amounts may be used under this paragraph only if the
Secretary determines that the neighborhood or other area in
which the housing is located has a high incidence of vacant
and abandoned housing (or other vacant and abandoned
structures) and is experiencing a significant decline in
population.
Notwithstanding any other provision of this subsection, grant
amounts provided under this Act may not be used to provide
assistance of any kind (including grants, loans, and closing
cost financing) to provide amounts for downpayments for any
homebuyers of single family housing.
(c) Prohibited Uses.--The Secretary shall, by regulation,
set forth prohibited uses of grant or loan amounts under this
Act, which shall include use for--
(1) political activities;
(2) advocacy;
(3) lobbying, whether directly or through other parties;
(4) counseling services;
(5) travel expenses; and
(6) preparing or providing advice on tax returns.
(d) Income Targeting Requirement.--
(1) Very low-income families.--Not less than 50 percent of
the total grant amounts an allocation recipient makes
available under this Act shall be used for activities under
subsection (b) in connection with providing housing for
families whose incomes do not exceed 50 percent of the median
income for the area in which the housing is located.
(2) Extremely low-income families.--Not less than 50
percent of the total grant amounts an allocation recipient
makes available under paragraph (1) shall be used for
activities under subsection (b) in connection with providing
housing for families whose incomes do not exceed 30 percent
of the median income for the area in which the housing is
located.
(3) Waiver.--
(A) In general.--The Secretary may establish a percentage
for purposes of paragraph (2) that is less than 50 percent if
an allocation recipient certifies that, in addition to any
other requirements the Secretary may establish--
(i) such allocation recipient has attempted to use all
other federally related resources available to it in
combination with the resources available under this Act to
meet the requirements of paragraph (2); and
(ii) the failure to comply with paragraph (2) will not
result in an overall loss of housing affordable to families
whose incomes do not exceed 30 percent of area median income
in the area of such allocation recipient.
(B) Consideration of housing needs.--In establishing an
alternative percentage for purposes of paragraph (2) for an
allocation recipient that meets the certification
requirements of subparagraph (A), the Secretary shall take
into consideration the housing needs in the area of such
allocation recipient of families whose incomes do not exceed
30 percent of area median income.
(e) Use for Rural Areas.--An allocation recipient receiving
any grant or loan amounts under this Act that includes any
rural areas shall use a portion of its grant and loan
authority amount for eligible activities located in rural
areas that is proportionate to the identified need for such
activities in such rural areas.
(f) Security.--A qualified State, or at its election, a
qualified metropolitan city or qualified urban county, shall
record a lien in the name of the Secretary on any qualified
foreclosed housing purchased or financed with a loan under
this section in the amount of the principal obligation under
the loan and interest due under the loan.
(g) Qualified Homeowners.--This Act may not be construed to
prevent the resale of qualified foreclosed housing to a prior
owner or occupant of such housing who meets the income
requirements of this Act.
(h) Voucher Nondiscrimination.--
(1) Prospective tenants.--A recipient of amounts from a
loan or grant under this Act may not refuse to lease a
dwelling unit in housing assisted with any such loan or grant
amounts to a holder of a voucher or certificate of
eligibility under section 8 of the United States Housing Act
of 1937 (42 U.S.C. 1437f) because of the status of the
prospective tenant as such a holder.
(2) Current tenants.--In the case of any qualified
foreclosed housing for which funds made available under the
Act are used and in which a recipient of assistance under
section 8(o) of the U.S. Housing Act of 1937 resides at the
time of acquisition or financing, the owner and any successor
in interest shall be subject to the lease and to the housing
assistance payments contract for the occupied unit. Vacating
the property prior to sale shall not constitute good cause
for termination of the tenancy unless the property is
unmarketable while occupied or unless the owner or subsequent
purchaser desires the unit for personal or family use. This
paragraph shall not preempt any State or local law that
provides more protection for tenants.
(i) Effect of Foreclosure on Preexisting Lease.--
(1) In general.--In the case of any foreclosure on any
dwelling or residential real property acquired with any
amounts made available under this Act, any successor in
interest in such property pursuant to the foreclosure shall
assume such interest subject to--
(A) the provision, by the successor in interest, of a
notice to vacate to any bona fide tenant at least 90 days
before the effective date of the notice to vacate; and
(B) the rights of any bona fide tenant, as of the date of
such notice of foreclosure--
(i) under any bona fide lease entered into before the
notice of foreclosure to occupy the premises until the end of
the remaining term of the lease or the end of the 6-month
period beginning on the date of the notice of foreclosure,
whichever occurs first, subject to the receipt by the tenant
of the 90-day notice under subparagraph (A); or
(ii) without a lease or with a lease terminable at will
under State law, subject to the receipt by the tenant of the
90-day notice under subparagraph (A), except that nothing
under this subparagraph shall affect the requirements for
termination of any federally subsidized tenancy.
(2) Bona fide lease or tenancy.--For purposes of this
subsection, a lease or tenancy shall be considered bona fide
only if--
(A) the mortgagor under the contract is not the tenant;
(B) the lease or tenancy was the result of an arms-length
transaction; or
(C) the lease or tenancy requires the receipt of rent that
is not substantially less than fair market rent for the
property.
(j) Prohibition of Demolition of Public Housing.--
Notwithstanding any other provision of this Act, amounts from
a grant or loan under this Act may not be used to demolish
any public housing (as such term is defined in section 3 of
the United States Housing Act of 1937 (42 U.S.C. 1437a)).
SEC. 9. SHARED APPRECIATION AGREEMENT.
Notwithstanding any other provision of this Act, no amounts
from a loan or grant under this Act may be used under section
8 for any qualified foreclosed housing unless such binding
agreements are entered into, in accordance with such
requirements as the Secretary shall establish, that ensure
that the Federal Government shall, upon any sale or
disposition of the qualified foreclosed housing by the owner
who acquires the housing pursuant to assistance under this
Act, receive an amount equal to 20 percent of the difference
between the net proceeds from such sale or disposition and
the cost of such acquisition of the housing pursuant to
assistance under this Act, after deductions for expenditures
paid or incurred after the date of such acquisition that are
properly chargeable to capital
[[Page H3166]]
account (within the meaning of section 1016 of the Internal
Revenue Code of 1986) with respect to such housing. In the
case of a for-profit owner, this section shall be applied by
substituting ``50 percent'' for ``20 percent''.
SEC. 10. SPENDING REQUIREMENTS.
(a) In General.--Each allocation recipient that receives a
grant under this Act or is allocated loan authority amounts
under this Act pursuant to section 5(b) shall--
(1) commence obligation of such grant amounts and
commitment of such loan authority amounts not later than the
expiration of the 120-day period that begins upon approval of
the approved plan of allocation recipient;
(2) obligate all such grant amounts and enter into
commitments for all such loan authority amounts not later
than the expiration of the 180-day period beginning upon such
approval; and
(3) except as provided in subsection (b) of this section,
outlay all such grant amounts and disburse all such loan
authority amounts not later than the 24-month period that
begins upon such approval.
This subsection shall not apply to loan authority amounts of
an allocation recipient attributable, pursuant to section
6(b)(2), to repayment of principal amounts of loans under
this Act.
(b) Exception to Spending Requirement.--If an allocation
recipient in good faith makes a request, in the plan
submitted to the Secretary pursuant to section 4 or otherwise
after approval of such plan, for extension of the period
referred to in paragraph (1), (2), or (3) of subsection (a)
of this section, the Secretary may extend the period for not
more than 5 months.
SEC. 11. SERVICER CONTACT.
The servicer of a federally related mortgage loan (as such
term is defined in section 3 of the Real Estate Settlement
Procedures Act of 1974 (12 U.S.C. 2602)) shall notify the
unit of general local government in which the property
securing the mortgage is located upon becoming responsible
for a qualified foreclosed property and provide such unit of
general local government with the name and 24-hour contact
information of a representative authorized to negotiate
purchases.
SEC. 12. ACCOUNTABILITY.
(a) Reporting.--Each allocation recipient that receives a
grant or allocation of loan authority amount under this Act
shall submit a report to the Secretary, not later than the
expiration of the 12-month period beginning upon the approval
of the qualified plan by the Secretary, regarding use of such
amounts which shall contain such information, including
information about the location and type of assisted
properties and the income of families purchasing or renting
housing assisted under this Act, as the Secretary shall
require.
(b) Misuse of Amounts.--If the Secretary determines that
any amounts from a grant or loan under this Act for an
allocation recipient or other recipient of grant or loans
funds has been used in a manner that is in violation of this
Act, any regulations issued under this Act, or any
requirements or conditions under which such amounts were
provided, the Secretary shall require the allocation
recipient or other recipient of grant or loans funds to
reimburse the Treasury of the United States in the amount of
any such misused funds.
(c) Hold Harmless.--Notwithstanding subsection (b), a State
shall not be required to reimburse the Treasury of the United
States for any misused funds such State is required to
allocate to a qualified metropolitan city or qualified urban
county under subsection (f) or (g) of section 5,
respectively.
SEC. 13. DEFINITIONS.
For purposes of this Act, the following definitions shall
apply:
(1) Allocation recipient.--The term ``allocation
recipient'' means--
(A) a qualified State;
(B) a qualified metropolitan city; and
(C) a qualified urban county.
(2) Allocation recipient administrator.--The term
``allocation recipient administrator'' means the entity that
is designated, pursuant to section 4(b)(1), in the approved
plan of the allocation recipient to act for the allocation
recipient for purposes of this Act.
(3) Approved plan.--The term ``approved plan'' means a plan
of an allocation recipient that has been approved pursuant to
section 4.
(4) Covered multifamily housing.--The term ``covered
multifamily housing'' means a residential structure that
consists of 64 or fewer dwelling units.
(5) Loan authority amount.--The term ``loan authority
amount'' means, with respect to an allocation recipient, the
amount of loan authority available pursuant to section
14(b)(1) that is allocated for the allocation recipient
pursuant to subsection (b), (f), or (g) of section 5, as
applicable, as such amount may be increased or decreased
pursuant to section 6(b).
(6) Nonprofit organization.--The term ``nonprofit
organization'' has the meaning given such term in section 104
of the Cranston-Gonzalez National Affordable Housing Act (42
U.S.C. 12704).
(7) Qualified foreclosed housing.--The term ``qualified
foreclosed housing'' means housing that--
(A)(i) is single family housing that is not occupied by an
owner, pursuant to foreclosure or assignment of the mortgage
on the housing or forfeiture of the housing; or
(ii) is covered multifamily housing;
(B) is owned by a lender, mortgage company, investor,
financial institution, or other such entity, or any
government entity, pursuant to foreclosure or assignment of
the mortgage on the housing or forfeiture of the housing; and
(C) has a purchase price--
(i) in the case of single family housing, that does not
exceed 110 percent of the average purchase price for single
family housing in the area in which the housing is located,
as determined by the Secretary.
(ii) in the case of covered multifamily housing, that does
not exceed the dollar amount limitation, for housing of the
applicable size located in the area in which the housing is
located, on the amount of a principal obligation of a
mortgage eligible for insurance under section 207 of the
National Housing Act (12 U.S.C. 1713), as in effect on the
date of the enactment of this Act pursuant to such section
207(c)(3)(A) and section 206A of such Act (12 U.S.C. 1712a).
(8) Qualified metropolitan city.--The term ``qualified
metropolitan city'' means an incorporated place, for which
there is an improved plan, that--
(A) is among the 100 most populous incorporated places in
the United States, as determined according to data from the
most recent decennial census that is published before the
date of the enactment of this Act; or
(B)(i) has a minimum population of 50,000, as determined
according to data from the most recent decennial census that
is published before the date of the enactment of this Act;
and
(ii) has a foreclosure rate that exceeds 125 percent of the
foreclosure rate for the entire State
(9) Qualified state.--The term ``qualified State'' means a
State for which there is an approved plan.
(10) Qualified urban county.--The term ``qualified urban
county'' means an urban county (as such term is defined in
section 102 of the Housing and Community Development Act of
1974 (42 U.S.C. 5302)), for which there is an approved plan,
that is among the 50 most populous urban counties in the
United States, as determined--
(A) according to data from the most recent decennial
census; and
(B) excluding the population of any qualified metropolitan
city within such urban county, unless such metropolitan city
has agreed to have its population included with the
population of the county for the purposes of this Act.
(11) Secretary.--The term ``Secretary'' means the Secretary
of Housing and Urban Development.
(12) Single family housing.--The term ``single family
housing'' means a residential structure consisting of from
one to four dwelling units.
(13) State.--The term ``State'' means any State of the
United States, the District of Columbia, the Commonwealth of
Puerto Rico, the Commonwealth of the Northern Mariana
Islands, Guam, the Virgin Islands, American Samoa, and other
territory or possession of the United States.
SEC. 14. FUNDING.
(a) Grants.--There is authorized to be appropriated to the
Secretary of the Treasury $7,500,000,000 for grants under
this Act.
(b) Direct Loans.--
(1) Loan commitment authority limitation.--Subject only to
the availability of sufficient amounts for the costs (as such
term is defined in section 502 of the Federal Credit Reform
Act of 1990 (2 U.S.C. 661a)) of such loans and the absence of
qualified requests for loans, the Secretary shall enter into
commitments to make loans under this Act, and shall make such
loans, in an amount such that the aggregate outstanding
principal balance of such loans does not at any time exceed
$7,500,000,000.
(2) Authorization of appropriations for costs.--There is
authorized to be appropriated such sums as may be necessary
for costs (as such term is defined in section 502 of the
Federal Credit Reform Act of 1990 (2 U.S.C. 661a)) of loans
under this Act.
SEC. 15. REGULATIONS AND IMPLEMENTATION.
(a) Regulations.--The Secretary shall issue any regulations
necessary to carry out this Act.
(b) Implementation.--Pending the effectiveness of
regulations issued pursuant to subsection (a), the Secretary
shall take such action as may be necessary to implement this
Act by notice, guidance, and interim rules.
The Acting CHAIRMAN. No amendment to the committee amendment is in
order except those printed in House report 110-621. Each amendment may
be offered only in the order printed in the report, by a Member
designated in the report, shall be considered read, shall be debatable
for the time specified in the report, equally divided and controlled by
the proponent and an opponent of the amendment, shall not be subject to
amendment, and shall not be subject to a demand for division of the
question.
Amendment No. 1 Offered by Ms. Waters
The Acting CHAIRMAN. It is now in order to consider amendment No. 1
printed in House Report 110-621.
Ms. WATERS. Madam Chairwoman, I have an amendment at the desk that
has been made in order under the rule.
The Acting CHAIRMAN. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 1 offered by Ms. Waters:
Page 3, line 10, after ``STATES'' insert ``, METROPOLITAN
CITIES, AND URBAN COUNTIES''.
Page 3, line 13, after ``States'' insert ``and under
subsections (f) and (g) of section 5 to qualified
metropolitan cities and qualified urban counties,
respectively,''.
Page 3, line 15, after ``States'' insert ``, qualified
metropolitan cities, and qualified urban counties''.
[[Page H3167]]
Page 3, line 19, after ``State'' insert ``, metropolitan
city, or urban county''.
Page 3, line 20, after ``State'' insert ``, metropolitan
city, or urban county''.
Strike ``A State'' in line 23 on page 3 and all that
follows through page 4, line 2.
Page 12, line 16, strike ``, such State'' and insert ``the
Secretary''.
Page 13, line 4, strike ``A State may'' and insert ``The
Secretary shall''.
Page 13, line 23, strike ``A State may'' and insert ``The
Secretary shall''.
Page 14, line 4, strike ``a State'' and insert ``the
Secretary''.
Page 16, lines 18 and 19, strike ``or, upon its election''.
Page 16, line 19, strike ``or'' and insert ``, and a''.
Page 19, line 24, strike ``costs of'' and insert ``expenses
incurred operating housing assisted under this Act with
respect to the administration, maintenance, repair, security,
utilities, fuel, furnishings, equipment,''.
Strike line 23 on page 32 and all that follows through page
33, line 2, and insert the following:
(i) in the case of single family housing, that does not
exceed the lesser of--
(I) 110 percent of the average purchase price for single
family housing in the area in which the housing is located,
as determined by the Secretary; or
(II) the current appraised value of the property;
except that in the case of any such housing that has an
appraised value that is less than 110 percent of the average
purchase price for single family housing in the area in which
the housing is located, an allocation recipient may appeal
such appraisal to the Secretary and the Secretary may
determine that the average purchase price shall operate as
the cap on the purchase price; and
The Acting CHAIRMAN. Pursuant to House Resolution 1174, the
gentlewoman from California (Ms. Waters) and a Member opposed each will
control 5 minutes.
The Chair recognizes the gentlewoman from California.
Ms. WATERS. Madam Chairman, I yield myself as much time as I may
consume.
This manager's amendment is in the nature of a perfecting amendment
that makes a few changes to the bill that I hope will be relatively
uncontroversial.
First, as this bill has moved through the process, we have moved from
a program that allocated all of the funds to States to administer to
one that, as I described in my opening statement, distributes funds to
States, certain metropolitan cities and large urban counties.
This amendment simply removes the State as the middle person in
allocations to qualifying cities and counties which would instead
receive direct allocations from HUD. This will expedite the
distribution of funds which is critical in the context of economic
stimulus.
Second, the amendment brings a definition of operating costs of
housing purchased under the program, which is an eligible use under the
grant component in line with similar uses in other HUD programs such as
the McKinney-Vento Homeless Assistance Act. This just clarifies what is
and is not an eligible expense when an entity is operating a purchase
property as rental property or preparing it for resale.
Finally, to further address the concerns that this bill somehow
provides a bailout to lenders, the amendment caps the purchase price of
foreclosed properties at the appraised price or 110 percent of the
average local single family home price, whichever is less. This guards
against property owners gaming the system to obtain inflated prices
under the program.
I urge my colleagues to vote for this amendment.
I reserve the balance of my time.
Mrs. CAPITO. Madam Chairman, I would like to claim time in opposition
to the amendment.
The Acting CHAIRMAN. The gentlewoman from West Virginia is recognized
for 5 minutes.
Mrs. CAPITO. Thank you.
While I appreciate the chairwoman's amendment, and I do believe that
it does go in a direction that is much better for the bill, I still
have, as I have voiced in the earlier debate, serious concerns about
the bill in terms of the cost and in terms of taxpayers' dollars
bailing out investors and lenders. This does not go to individual
homeowners. It does not help somebody in foreclosure, an individual
family in foreclosure.
And so with that, I would urge a ``no'' vote on the amendment.
I yield back the balance of my time.
Ms. WATERS. Madam Chairwoman, I was hopeful that the ranking member
of the subcommittee would offer support for this amendment. I know that
there are some differences that she has and others have on this bill.
However, the attempts that we have made to make sure that it is a
bill that can operate efficiently, such as identifying those 100
cities, those 100 counties and those 50 cities of a certain size would
be the kind of amendment that the ranking member and others would
understand makes this a better bill and would formulate ways by which
it could efficiently and effectively get that money into the
communities that are needed.
Madam Chairman, I yield back the balance of my time.
The Acting CHAIRMAN. The question is on the amendment offered by the
gentlewoman from California (Ms. Waters).
The question was taken; and the Acting Chairman announced that the
ayes appeared to have it.
Mrs. CAPITO. Madam Chairman, I demand a recorded vote.
The Acting CHAIRMAN. Pursuant to clause 6 of rule XVIII, further
proceedings on the amendment offered by the gentlewoman from California
will be postponed.
Amendment No. 2 Offered by Mrs. Capito
The Acting CHAIRMAN. It is now in order to consider amendment No. 2
printed in House Report 110-621.
Mrs. CAPITO. Madam Chairman, I offer an amendment.
The Acting CHAIRMAN. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 2 offered by Mrs. Capito:
Page 3, line 16, after the period insert the following:
``The program under this Act shall be administered through
the Office of Community Planning and Development of the
Department of Housing and Urban Development or any successor
office responsible for administering the community
development block grant program under title I of the Housing
and Community Development Act of 1974 (42 U.S.C. 5301 et
seq.).''.
The Acting CHAIRMAN. Pursuant to House Resolution 1174, the
gentlewoman from West Virginia (Mrs. Capito) and a Member opposed each
will control 5 minutes.
The Chair recognizes the gentlewoman from West Virginia.
Mrs. CAPITO. Madam Chairman, my amendment is really quite simple. As
we have heard myself talking and Members on my side of the aisle
talking about the difficulties that we have with the bill, I realize
that the odds are with it that it may pass out of this House. With that
in mind, I would like to offer this amendment to what I think makes the
bill better.
My amendment would very simply direct the funds to be administered
through the Office of Community Planning and Development of the
Department of Housing and Urban Development. This office already
oversees the HOME and CDBG programs which we are very familiar with.
One of the concerns that we had with the bill was creating a whole
new bureaucracy within HUD to administer this program if it were to go
forward. And that is problematic any time you are creating a new
bureaucracy, particularly when you are replicating some of the delivery
systems that already exist within HUD. Those delivery systems exist in
the Office of Community Planning and Development.
So with that, I would like to say that rather than the current
language which just merely directs the Secretary to implement the
program, I would prefer, and my amendment offers to direct those funds
to be administered by the existing Office of Community Planning and
Development within HUD which deals, as I said, with the CDBG program
which we are all very familiar with working in a lot of our
communities.
With that, I yield back the balance of my time.
Ms. WATERS. Madam Chairman, I rise to claim time in opposition.
The Acting CHAIRMAN. The gentlewoman from California is recognized
for 5 minutes.
Ms. WATERS. Although I rise to claim time in opposition, I am not
opposed to the amendment.
I think the ranking member of the Housing and Community Opportunity
Subcommittee has made a sound addition to the bill here. While, as I
mentioned in my opening statement, we did not want HUD to get bogged
down in processing 1,200 different plans from all the entitlement
jurisdictions in the
[[Page H3168]]
HOME and CDBG programs, there is no question that the expertise at HUD
to administer this bill's loan and rent program lies in the Community
Planning and Development division of the agency. So I urge my
colleagues to support Mrs. Capito's amendment to ensure that we don't
create an unnecessary new bureaucracy if H.R. 5818 is passed into law.
I yield back the balance of my time.
The Acting CHAIRMAN. The question is on the amendment offered by the
gentlewoman from West Virginia (Mrs. Capito).
The question was taken; and the Acting Chairman announced that the
ayes appeared to have it.
Mrs. CAPITO. Madam Chairman, I demand a recorded vote.
The Acting CHAIRMAN. Pursuant to clause 6 of rule XVIII, further
proceedings on the amendment offered by the gentlewoman from West
Virginia will be postponed.
Motion to Rise Offered by Mr. Simpson
Mr. SIMPSON. Madam Chairman, I move that the Committee do now rise.
The Acting CHAIRMAN. The question is on the motion to rise.
The question was taken; and the Acting Chairman announced that the
noes appeared to have it.
Recorded Vote
Mr. SIMPSON. Madam Chairman, I demand a recorded vote.
A recorded vote was ordered.
The Acting CHAIRMAN. Pursuant to clause 6 of rule XVIII, this 15-
minute vote will be followed by 5-minute votes on amendment No. 1 by
Ms. Waters and amendment No. 2 by Mrs. Capito.
The vote was taken by electronic device, and there were--ayes 184,
noes 231, not voting 23, as follows:
[Roll No. 292]
AYES--184
Akin
Alexander
Bachmann
Bachus
Barrett (SC)
Bartlett (MD)
Barton (TX)
Biggert
Bilbray
Bilirakis
Bishop (UT)
Blackburn
Blunt
Boehner
Bonner
Bono Mack
Boozman
Boustany
Brady (TX)
Broun (GA)
Brown (SC)
Brown-Waite, Ginny
Buchanan
Burgess
Burton (IN)
Buyer
Calvert
Camp (MI)
Cannon
Cantor
Capito
Carter
Castle
Chabot
Coble
Cole (OK)
Conaway
Crenshaw
Cubin
Culberson
Davis (KY)
Davis, David
Davis, Tom
Deal (GA)
Dent
Diaz-Balart, L.
Doolittle
Drake
Dreier
Duncan
Emerson
English (PA)
Everett
Fallin
Feeney
Ferguson
Flake
Forbes
Fossella
Foxx
Franks (AZ)
Frelinghuysen
Gallegly
Garrett (NJ)
Gilchrest
Gingrey
Gohmert
Goode
Goodlatte
Gordon
Granger
Graves
Hall (TX)
Hastings (WA)
Hayes
Heller
Hensarling
Herger
Hobson
Hoekstra
Hulshof
Hunter
Inglis (SC)
Issa
Johnson (IL)
Johnson, Sam
Jones (NC)
Jordan
Keller
King (IA)
King (NY)
Kingston
Kirk
Kline (MN)
Knollenberg
Kuhl (NY)
LaHood
Lamborn
Latham
LaTourette
Latta
Lewis (CA)
Lewis (KY)
Linder
LoBiondo
Lucas
Lungren, Daniel E.
Mack
Manzullo
Marchant
McCarthy (CA)
McCaul (TX)
McCotter
McCrery
McHenry
McHugh
McKeon
McMorris Rodgers
Mica
Miller (FL)
Miller (MI)
Miller, Gary
Murphy, Tim
Musgrave
Myrick
Neugebauer
Nunes
Pearce
Pence
Peterson (PA)
Petri
Pickering
Pitts
Platts
Poe
Porter
Price (GA)
Pryce (OH)
Putnam
Radanovich
Regula
Rehberg
Reichert
Renzi
Rogers (AL)
Rogers (KY)
Rogers (MI)
Rohrabacher
Roskam
Ryan (WI)
Sali
Scalise
Schmidt
Sensenbrenner
Sessions
Shadegg
Shays
Shimkus
Shuster
Simpson
Smith (NE)
Smith (NJ)
Smith (TX)
Souder
Stearns
Sullivan
Taylor
Thornberry
Tiahrt
Tiberi
Upton
Walberg
Walden (OR)
Walsh (NY)
Wamp
Weldon (FL)
Weller
Westmoreland
Whitfield (KY)
Wilson (NM)
Wilson (SC)
Wittman (VA)
Wolf
Young (FL)
NOES--231
Abercrombie
Ackerman
Allen
Altmire
Andrews
Arcuri
Baca
Baird
Baldwin
Barrow
Becerra
Berkley
Berman
Bishop (GA)
Bishop (NY)
Blumenauer
Bordallo
Boren
Boswell
Boucher
Boyd (FL)
Boyda (KS)
Brady (PA)
Braley (IA)
Brown, Corrine
Butterfield
Capps
Capuano
Cardoza
Carnahan
Carney
Carson
Castor
Cazayoux
Chandler
Clarke
Clay
Cleaver
Clyburn
Cohen
Cooper
Costello
Courtney
Cramer
Crowley
Cuellar
Cummings
Davis (AL)
Davis (CA)
Davis (IL)
Davis, Lincoln
DeGette
Delahunt
DeLauro
Diaz-Balart, M.
Dingell
Doggett
Donnelly
Doyle
Edwards
Ehlers
Ellison
Ellsworth
Emanuel
Engel
Eshoo
Etheridge
Faleomavaega
Farr
Fattah
Filner
Foster
Frank (MA)
Gerlach
Giffords
Gillibrand
Gonzalez
Green, Al
Green, Gene
Grijalva
Gutierrez
Hall (NY)
Hare
Harman
Hastings (FL)
Herseth Sandlin
Higgins
Hill
Hinchey
Hinojosa
Hirono
Hodes
Holden
Holt
Honda
Hooley
Hoyer
Inslee
Israel
Jackson (IL)
Jackson-Lee (TX)
Jefferson
Johnson (GA)
Johnson, E. B.
Jones (OH)
Kagen
Kanjorski
Kaptur
Kennedy
Kildee
Kilpatrick
Kind
Klein (FL)
Kucinich
Lampson
Langevin
Larsen (WA)
Larson (CT)
Lee
Levin
Lewis (GA)
Lipinski
Loebsack
Lofgren, Zoe
Lowey
Lynch
Mahoney (FL)
Maloney (NY)
Markey
Matheson
Matsui
McCarthy (NY)
McCollum (MN)
McDermott
McGovern
McIntyre
McNerney
McNulty
Meek (FL)
Meeks (NY)
Melancon
Michaud
Miller (NC)
Miller, George
Mitchell
Mollohan
Moore (KS)
Moore (WI)
Moran (KS)
Moran (VA)
Murphy (CT)
Murphy, Patrick
Murtha
Nadler
Napolitano
Neal (MA)
Norton
Oberstar
Obey
Olver
Ortiz
Pallone
Pascrell
Pastor
Payne
Perlmutter
Peterson (MN)
Pomeroy
Price (NC)
Rahall
Ramstad
Reyes
Rodriguez
Ros-Lehtinen
Ross
Rothman
Roybal-Allard
Ruppersberger
Ryan (OH)
Salazar
Sanchez, Linda T.
Sanchez, Loretta
Sarbanes
Schakowsky
Schiff
Schwartz
Scott (GA)
Scott (VA)
Serrano
Sestak
Shea-Porter
Sherman
Shuler
Sires
Skelton
Slaughter
Smith (WA)
Snyder
Solis
Space
Spratt
Stark
Stupak
Sutton
Tanner
Tauscher
Terry
Thompson (CA)
Thompson (MS)
Tierney
Towns
Tsongas
Turner
Udall (CO)
Udall (NM)
Van Hollen
Velazquez
Visclosky
Walz (MN)
Wasserman Schultz
Waters
Watson
Watt
Waxman
Weiner
Welch (VT)
Wilson (OH)
Woolsey
Wu
Wynn
Yarmuth
NOT VOTING--23
Aderholt
Bean
Berry
Campbell (CA)
Christensen
Conyers
Costa
DeFazio
Dicks
Fortenberry
Fortuno
Marshall
Paul
Rangel
Reynolds
Richardson
Royce
Rush
Saxton
Speier
Tancredo
Wexler
Young (AK)
Announcement by the Acting Chairman
The Acting CHAIRMAN (during the vote). Members have 2 minutes
remaining in this vote.
{time} 2132
Messrs. EDWARDS, SERRANO, McNERNEY, WAXMAN, Ms. WATSON, Ms.
SCHAKOWSKY and Mr. SKELTON changed their vote from ``aye'' to ``no.''
Messrs. PORTER, KIRK, WALBERG, and WELLER of Illinois changed their
vote from ``no'' to ``aye.''
So the motion to rise was rejected.
The result of the vote was announced as above recorded.
Stated for:
Mr. ROYCE. Madam Chairman, on rollcall No. 292, I was unavoidably
detained. Had I been present, I would have voted ``aye.''
Amendment No. 1 Offered by Ms. Waters
The Acting CHAIRMAN. The unfinished business is the demand for a
recorded vote on the amendment printed in House Report 110-621 offered
by the gentlewoman from California (Ms. Waters) on which further
proceedings were postponed and on which the ayes prevailed by voice
vote.
The Clerk will redesignate the amendment.
The Clerk redesignated the amendment.
Recorded Vote
The Acting CHAIRMAN. A recorded vote has been demanded.
A recorded vote was ordered.
The Acting CHAIRMAN. This is a 5-minute vote.
The vote was taken by electronic device, and there were--ayes 256,
noes 157, not voting 25, as follows:
[Roll No. 293]
AYES--256
Abercrombie
Ackerman
Allen
Altmire
Andrews
Arcuri
Baca
Baird
Baldwin
Barrow
Bean
Becerra
Berkley
Berman
Biggert
Bishop (GA)
Bishop (NY)
Blumenauer
Bordallo
Boren
Boswell
Boucher
Boyd (FL)
Boyda (KS)
Brady (PA)
Braley (IA)
Brown, Corrine
Buchanan
Butterfield
Capito
Capps
Capuano
Cardoza
Carnahan
Carney
Carson
Castor
Cazayoux
Chabot
Chandler
Clarke
Clay
Cleaver
Clyburn
Cohen
Conyers
Cooper
Costello
Courtney
Cramer
Crenshaw
Crowley
Cubin
Cummings
Davis (AL)
Davis (CA)
Davis (IL)
Davis, Lincoln
DeFazio
DeGette
Delahunt
DeLauro
Dent
Diaz-Balart, L.
Diaz-Balart, M.
Dicks
Dingell
Doggett
Donnelly
Doyle
Edwards
Ehlers
[[Page H3169]]
Ellison
Ellsworth
Emanuel
Engel
English (PA)
Eshoo
Etheridge
Faleomavaega
Farr
Ferguson
Filner
Fortenberry
Fortuno
Frank (MA)
Gerlach
Giffords
Gillibrand
Gonzalez
Gordon
Green, Al
Green, Gene
Grijalva
Gutierrez
Hall (NY)
Hare
Harman
Hastings (FL)
Hayes
Herseth Sandlin
Higgins
Hill
Hinchey
Hinojosa
Hirono
Hodes
Holden
Holt
Honda
Hooley
Hoyer
Inslee
Israel
Jackson (IL)
Jackson-Lee (TX)
Jefferson
Johnson (GA)
Johnson, E. B.
Jones (NC)
Kagen
Kanjorski
Kaptur
Kennedy
Kildee
Kilpatrick
Kind
Klein (FL)
Kucinich
LaHood
Lampson
Langevin
Larsen (WA)
Larson (CT)
Lee
Levin
Lewis (GA)
Lipinski
Loebsack
Lofgren, Zoe
Lowey
Lynch
Mahoney (FL)
Maloney (NY)
Markey
Marshall
Matheson
Matsui
McCarthy (NY)
McCaul (TX)
McCollum (MN)
McDermott
McGovern
McIntyre
McNerney
McNulty
Meek (FL)
Meeks (NY)
Melancon
Michaud
Miller (NC)
Miller, George
Mitchell
Mollohan
Moore (KS)
Moore (WI)
Moran (VA)
Murphy (CT)
Murphy, Patrick
Murtha
Musgrave
Nadler
Napolitano
Neal (MA)
Norton
Oberstar
Obey
Olver
Ortiz
Pallone
Pascrell
Pastor
Payne
Perlmutter
Peterson (MN)
Platts
Pomeroy
Porter
Price (NC)
Rahall
Ramstad
Reichert
Reyes
Rodriguez
Ros-Lehtinen
Ross
Rothman
Roybal-Allard
Ruppersberger
Ryan (OH)
Salazar
Sanchez, Linda T.
Sanchez, Loretta
Sarbanes
Schakowsky
Schiff
Schmidt
Scott (GA)
Scott (VA)
Serrano
Sestak
Shays
Shea-Porter
Sherman
Shuler
Sires
Skelton
Slaughter
Smith (NJ)
Smith (TX)
Smith (WA)
Snyder
Solis
Space
Spratt
Stark
Stupak
Sutton
Tanner
Tauscher
Taylor
Thompson (CA)
Thompson (MS)
Tierney
Towns
Tsongas
Turner
Udall (CO)
Udall (NM)
Van Hollen
Velazquez
Visclosky
Walsh (NY)
Walz (MN)
Wasserman Schultz
Waters
Watson
Watt
Waxman
Weiner
Welch (VT)
Wilson (OH)
Woolsey
Wu
Wynn
Yarmuth
NOES--157
Akin
Alexander
Bachmann
Bachus
Barrett (SC)
Bartlett (MD)
Barton (TX)
Bilbray
Bilirakis
Bishop (UT)
Blackburn
Blunt
Boehner
Bonner
Bono Mack
Boozman
Boustany
Brady (TX)
Broun (GA)
Brown (SC)
Brown-Waite, Ginny
Burgess
Burton (IN)
Buyer
Calvert
Camp (MI)
Cannon
Cantor
Carter
Castle
Coble
Cole (OK)
Conaway
Davis, David
Davis, Tom
Deal (GA)
Doolittle
Drake
Dreier
Duncan
Emerson
Everett
Fallin
Feeney
Flake
Forbes
Fossella
Foxx
Franks (AZ)
Frelinghuysen
Gallegly
Garrett (NJ)
Gilchrest
Gingrey
Gohmert
Goode
Goodlatte
Granger
Graves
Hall (TX)
Hastings (WA)
Heller
Hensarling
Herger
Hobson
Hoekstra
Hulshof
Hunter
Inglis (SC)
Issa
Johnson (IL)
Johnson, Sam
Jordan
Keller
King (IA)
King (NY)
Kingston
Kirk
Kline (MN)
Knollenberg
Kuhl (NY)
Lamborn
Latham
LaTourette
Latta
Lewis (CA)
Lewis (KY)
Linder
LoBiondo
Lucas
Lungren, Daniel E.
Mack
Manzullo
Marchant
McCarthy (CA)
McCotter
McCrery
McHenry
McHugh
McKeon
McMorris Rodgers
Mica
Miller (FL)
Miller (MI)
Miller, Gary
Moran (KS)
Murphy, Tim
Myrick
Neugebauer
Nunes
Pearce
Pence
Peterson (PA)
Petri
Pickering
Pitts
Poe
Price (GA)
Pryce (OH)
Putnam
Radanovich
Regula
Rehberg
Renzi
Rogers (AL)
Rogers (KY)
Rogers (MI)
Rohrabacher
Roskam
Ryan (WI)
Sali
Scalise
Sensenbrenner
Sessions
Shadegg
Shimkus
Shuster
Simpson
Smith (NE)
Souder
Stearns
Sullivan
Terry
Thornberry
Tiahrt
Tiberi
Upton
Walberg
Walden (OR)
Wamp
Westmoreland
Whitfield (KY)
Wilson (NM)
Wilson (SC)
Wittman (VA)
Wolf
Young (FL)
NOT VOTING--25
Aderholt
Berry
Campbell (CA)
Christensen
Costa
Cuellar
Culberson
Davis (KY)
Fattah
Foster
Jones (OH)
Paul
Rangel
Reynolds
Richardson
Royce
Rush
Saxton
Schwartz
Speier
Tancredo
Weldon (FL)
Weller
Wexler
Young (AK)
Announcement by the Acting Chairman
The Acting CHAIRMAN (during the vote). Members have less than 2
minutes remaining in this vote.
{time} 2140
So the amendment was agreed to.
The result of the vote was announced as above recorded.
Stated for:
Ms. SCHWARTZ. Madam Chairman, on rollcall No. 293, the Waters/Frank
amendment, I was unavoidably detained. Had I been present, I would have
voted ``aye.''
Stated against:
Mr. ROYCE. Madam Chairman, on rollcall No. 293, I was unavoidably
detained. Had I been present, I would have voted ``no.''
Amendment No. 2 Offered by Mrs. Capito
The Acting CHAIRMAN. The unfinished business is the demand for a
recorded vote on the amendment printed in House Report 110-621 offered
by the gentlewoman from West Virginia (Mrs. Capito) on which further
proceedings were postponed and on which the ayes prevailed by voice
vote.
The Clerk will redesignate the amendment.
The Clerk redesignated the amendment.
Recorded Vote
The Acting CHAIRMAN. A recorded vote has been demanded.
A recorded vote was ordered.
The Acting CHAIRMAN. This is a 5-minute vote.
The vote was taken by electronic device, and there were--ayes 425,
noes 0, not voting 13, as follows:
[Roll No. 294]
AYES--425
Abercrombie
Ackerman
Aderholt
Akin
Alexander
Allen
Altmire
Andrews
Arcuri
Baca
Bachmann
Bachus
Baird
Baldwin
Barrett (SC)
Barrow
Bartlett (MD)
Barton (TX)
Bean
Becerra
Berkley
Berman
Biggert
Bilbray
Bilirakis
Bishop (GA)
Bishop (NY)
Bishop (UT)
Blackburn
Blumenauer
Blunt
Boehner
Bonner
Bono Mack
Boozman
Bordallo
Boren
Boswell
Boucher
Boustany
Boyd (FL)
Boyda (KS)
Brady (PA)
Brady (TX)
Braley (IA)
Broun (GA)
Brown (SC)
Brown, Corrine
Brown-Waite, Ginny
Buchanan
Burgess
Burton (IN)
Butterfield
Buyer
Calvert
Camp (MI)
Cannon
Cantor
Capito
Capps
Capuano
Cardoza
Carnahan
Carney
Carson
Carter
Castle
Castor
Cazayoux
Chabot
Chandler
Clarke
Clay
Cleaver
Clyburn
Coble
Cohen
Cole (OK)
Conaway
Conyers
Cooper
Costa
Costello
Courtney
Cramer
Crenshaw
Crowley
Cubin
Cuellar
Culberson
Cummings
Davis (AL)
Davis (CA)
Davis (IL)
Davis (KY)
Davis, David
Davis, Lincoln
Davis, Tom
Deal (GA)
DeFazio
DeGette
Delahunt
DeLauro
Dent
Diaz-Balart, L.
Diaz-Balart, M.
Dicks
Dingell
Doggett
Donnelly
Doolittle
Doyle
Drake
Dreier
Duncan
Edwards
Ehlers
Ellison
Ellsworth
Emanuel
Emerson
Engel
English (PA)
Eshoo
Etheridge
Everett
Faleomavaega
Fallin
Farr
Fattah
Feeney
Ferguson
Filner
Flake
Forbes
Fortenberry
Fortuno
Fossella
Foster
Foxx
Frank (MA)
Franks (AZ)
Frelinghuysen
Gallegly
Garrett (NJ)
Gerlach
Giffords
Gilchrest
Gillibrand
Gingrey
Gohmert
Gonzalez
Goode
Goodlatte
Gordon
Granger
Graves
Green, Al
Green, Gene
Grijalva
Gutierrez
Hall (NY)
Hall (TX)
Hare
Harman
Hastings (FL)
Hastings (WA)
Hayes
Heller
Hensarling
Herger
Herseth Sandlin
Higgins
Hill
Hinchey
Hinojosa
Hirono
Hobson
Hodes
Hoekstra
Holden
Holt
Honda
Hooley
Hoyer
Hulshof
Hunter
Inglis (SC)
Inslee
Israel
Issa
Jackson (IL)
Jackson-Lee (TX)
Jefferson
Johnson (GA)
Johnson (IL)
Johnson, E. B.
Johnson, Sam
Jones (NC)
Jones (OH)
Jordan
Kagen
Kanjorski
Kaptur
Keller
Kennedy
Kildee
Kilpatrick
Kind
King (IA)
King (NY)
Kingston
Kirk
Kline (MN)
Knollenberg
Kucinich
Kuhl (NY)
LaHood
Lamborn
Lampson
Langevin
Larsen (WA)
Larson (CT)
Latham
LaTourette
Latta
Lee
Levin
Lewis (CA)
Lewis (GA)
Lewis (KY)
Linder
Lipinski
LoBiondo
Loebsack
Lofgren, Zoe
Lowey
Lucas
Lungren, Daniel E.
Lynch
Mack
Mahoney (FL)
Maloney (NY)
Manzullo
Marchant
Markey
Marshall
Matheson
Matsui
McCarthy (CA)
McCarthy (NY)
McCaul (TX)
McCollum (MN)
McCotter
McCrery
McDermott
McGovern
McHenry
McHugh
McIntyre
McKeon
McMorris Rodgers
McNerney
McNulty
Meek (FL)
Meeks (NY)
Melancon
Mica
Michaud
Miller (FL)
Miller (MI)
Miller (NC)
Miller, Gary
Miller, George
Mitchell
Mollohan
Moore (KS)
Moore (WI)
Moran (KS)
Moran (VA)
Murphy (CT)
Murphy, Patrick
Murphy, Tim
Murtha
Musgrave
Myrick
Nadler
Napolitano
Neal (MA)
Neugebauer
Norton
Nunes
Oberstar
Obey
Olver
Ortiz
Pallone
Pascrell
Pastor
Payne
Pearce
Pence
Perlmutter
Peterson (MN)
Peterson (PA)
Petri
Pickering
Pitts
Platts
Poe
Pomeroy
Porter
Price (GA)
Price (NC)
Pryce (OH)
Putnam
Radanovich
Rahall
Ramstad
Rangel
Regula
Rehberg
Reichert
Renzi
Reyes
Rodriguez
Rogers (AL)
Rogers (KY)
Rogers (MI)
[[Page H3170]]
Rohrabacher
Ros-Lehtinen
Roskam
Ross
Rothman
Roybal-Allard
Royce
Ruppersberger
Ryan (OH)
Ryan (WI)
Salazar
Sali
Sanchez, Linda T.
Sanchez, Loretta
Sarbanes
Scalise
Schakowsky
Schiff
Schmidt
Schwartz
Scott (GA)
Scott (VA)
Sensenbrenner
Serrano
Sessions
Sestak
Shadegg
Shays
Shea-Porter
Sherman
Shimkus
Shuler
Shuster
Simpson
Sires
Skelton
Slaughter
Smith (NE)
Smith (NJ)
Smith (TX)
Smith (WA)
Snyder
Solis
Souder
Space
Spratt
Stark
Stearns
Stupak
Sullivan
Sutton
Tanner
Tauscher
Taylor
Terry
Thompson (CA)
Thompson (MS)
Thornberry
Tiahrt
Tiberi
Tierney
Towns
Tsongas
Turner
Udall (CO)
Udall (NM)
Upton
Van Hollen
Velazquez
Visclosky
Walberg
Walden (OR)
Walsh (NY)
Walz (MN)
Wamp
Wasserman Schultz
Waters
Watson
Watt
Waxman
Weiner
Weldon (FL)
Weller
Westmoreland
Wexler
Whitfield (KY)
Wilson (NM)
Wilson (OH)
Wilson (SC)
Wittman (VA)
Wolf
Woolsey
Wu
Wynn
Yarmuth
Young (FL)
NOT VOTING--13
Berry
Campbell (CA)
Christensen
Klein (FL)
Paul
Reynolds
Richardson
Rush
Saxton
Speier
Tancredo
Welch (VT)
Young (AK)
Announcement by the Acting Chairman
The Acting CHAIRMAN (during the vote). Members are advised there are
less than 2 minutes remaining in this vote.
{time} 2150
Mr. BERMAN changed his vote from ``no'' to ``aye.''
So the amendment was agreed to.
The result of the vote was announced as above recorded.
(By unanimous consent, Mr. Hoyer was allowed to speak out of order.)
Legislative Program
Mr. HOYER. Ladies and gentlemen, after consultation with the minority
leadership, we will not be having any more votes tonight, it is my
understanding. That's a happier announcement, I know, so I thought I
would make it, trying to even things out here.
We will have a suspension vote at the end of the consideration of the
Waters bill. The votes will be rolled until tomorrow, and so that there
will be no more votes tonight. There will be a suspension vote, but the
minority has indicated that there will not be a vote on that suspension
bill.
We will then, tomorrow, finish the votes on the Waters bill, and then
go to the Franks housing bill and complete that tomorrow. My
expectation is we are probably talking somewhere in the neighborhood of
4 o'clock tomorrow, assuming that things are nice and pleasant and
peaceful.
Have a good night's sleep.
Amendment No. 3 Offered by Mr. Mahoney of Florida
The Acting CHAIRMAN. It is now in order to consider amendment No. 3
printed in House Report 110-621.
Mr. MAHONEY of Florida. Madam Chairman, I have an amendment at the
desk made in order under the rule.
The Acting CHAIRMAN. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 3 offered by Mr. Mahoney of Florida:
Page 36, after line 2, insert the following:
SEC. 15. PROTECTION OF RIGHT TO BEAR ARMS.
Nothing in this Act shall affect the right to bear arms
under the Second Amendment to the Constitution of the United
States.
Page 36, line 3, strike ``15'' and insert ``16''.
The Acting CHAIRMAN. Pursuant to House Resolution 1174, the gentleman
from Florida (Mr. Mahoney) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from Florida.
Mr. MAHONEY of Florida. Madam Chairman, I yield myself such time as I
may consume.
I rise today to offer an amendment to H.R. 5818, the Neighborhood
Stabilization Act of 2008. During the past few months, Americans have
woken up every morning and encountered headlines in their local
newspapers similar to those in my hometown papers. Home sales hit low
in February. Late loan payments highest since 1992; and foreclosures
skyrocket.
I'd like to thank Chairwoman Waters and Chairman Frank for their
commitment to address the housing market crisis gripping our Nation and
of my beloved Florida. With their leadership, the legislation we're
going to pass in the coming days brings hope to millions at home who
are being hit especially hard, as much of Florida's economy is
dependent on home construction and property development.
Right now, thousands of Floridians are out of work and unable to pay
their mortgage, turning an economic downturn into a crisis for working
families and their communities.
Florida homeowners are being hit especially hard because of the
staggering cost of property taxes, skyrocketing insurance premiums and
increased mortgage payments. This toxic cocktail has forced many home
owners to make difficult decisions. Our seniors are being forced to
decide between paying their mortgages and purchasing lifesaving
medications.
Likewise, working families are confronted with the challenges of
putting food on the table, supporting their children's education, and
paying their mortgage.
In the eight counties I represent, there are approximately 13,500
homes in pre-foreclosure, meaning that homeowners have missed at least
one of their mortgage payments. To give you a better perspective, Madam
Chairman, how deep the problem is in my district, there are
approximately 245,000 single family homes in the area that I represent.
{time} 2200
That means about 5\1/2\ percent of the homes in my district are in
foreclosure. Every foreclosure serves to further drive down the values
of every homeowner in the neighborhood. In addition to the personal
tragedies faced by families confronting foreclosure or falling home
values are States, counties, and towns that are facing another crisis.
According to the Department of Commerce, approximately 200,000 new
homes are sitting empty throughout the United States. Harvard
University's Joint Center for Housing Studies found that partially
completed or vacant developments reduce tax revenue for cities and
towns and hurt businesses. Likewise, a report authored by the U.S.
Conference of Mayors found that the rising foreclosures and falling
property values may cut tax revenues by more than $6.6 billion for the
ten States, including my home State of Florida. This means fewer
police, firemen, and teachers. It means fewer parks and after school
programs.
The crisis has already pushed Florida into a recession, and the State
already has to deal with a decrease in tax revenue. The State, which
just finished its budget, had to make difficult decisions. Nursing
homes in the State charged with taking care of our seniors will face a
$163.7 million reduction in what they're paid to take care of residents
on Medicaid.
The legislature voted to increase taxes by imposing $200 million in
user fees on our State citizens. Likewise, spending on education in
Florida will drop by $131 per student. These cuts come at a time when
it is more important than ever to invest in our children who will have
to compete in the global economy.
H.R. 5818 will establish a $15 billion HUD administered grant program
for the purchase and rehabilitation of owner-vacated foreclosed homes
with the goal of stabilizing and occupying them as soon as possible. By
doing so, we will ensure that the value of the properties and those
surrounding them will not continue to free fall.
Madam Chairman, my amendment today is very straightforward. It
clarifies that nothing in the underlying bill before us today restricts
anyone's right to bear arms under the second amendment. This language
ensures that those States, localities, and organizations receiving
loans and grants under this law cannot, let me repeat, cannot place any
restrictions on the properties they purchase or maintain that would
infringe upon a person's second amendment rights.
I ask my colleagues to support this commonsense amendment, and I
reserve the balance of my time.
Mr. BACHUS. Madam Chairman, I rise to claim the time in opposition. I
am not in opposition, but I plan to speak in the allotted 5 minutes.
The Acting CHAIRMAN. Without objection, the gentleman from Alabama is
recognized for 5 minutes.
There was no objection.
Mr. BACHUS. Madam Chairman, throughout this debate, the Bear
[[Page H3171]]
Stearns matter has been invoked by Members of the majority who have
called forth the bailout of the Bear Stearns counterparties, not of
Bear Stearns but of the counterparties, as a reason to bail out lenders
in this case. And basically, what they said time and time again, my
colleagues, many of them my friends in the majority, they have said,
You Republicans had no problem when the Federal Reserve bailed out Bear
Stearns. Now, although you had no problem with that $30 billion, you've
got a big problem with the $15 billion under the gentlewoman, the
chairman of the subcommittee from California. You have got a big
problem with this $15 billion. In fact, that's not the case. I would
like to clarify what I think is a misconception.
Immediately following the Bear Stearns, whether you call it a bailout
or intervention, it was a $30 billion potential loss to the American
taxpayers, I agree with the gentlelady from California. One of our
Members, and I think it shows the importance that one Member can make a
difference, and that Member was Representative Scott Garrett from New
Jersey. Representative Garrett immediately penned a letter to Chairman
Frank, and I commend Chairman Frank; he gave a very prompt response to
that letter. But in that letter, Scott Garrett raised some questions.
One of the questions was, Should we use taxpayers' money or expose
taxpayers to laws to intervene in these situations. He wrote a very
carefully crafted letter. He said, I have serious concerns about this,
serious concerns about the taxpayer standing behind a $29 billion
guarantee. I think these are extraordinary actions that we're taking,
and we ought to have a full investigation.
Now, that letter was signed by 17 Members of this body. Now, who were
those Members? Were they the Democratic Members who are expressing
concerns tonight? Let's see.
There was Scott Garrett; there was Spencer Bachus, yours truly; there
was Don Manzullo from Illinois, I believe he is a Republican; Walter
Jones from North Carolina. I congratulate Walter on his fine victory
last night. Michele Bachmann, she is a Minnesota Republican; Ginny
Brown-Waite, she's from Florida, she's a Republican; Randy Neugebauer,
vice chairman of our side, or vice ranking member; Tom Feeney, last
time I checked he was a Republican unless he switched parties. Tom
Price. Is there any debate among any of us that he's a very
conservative Republican? Ron Paul. Now there's a debate. There's a
debate. He may not be a Republican; he may be a Libertarian; certainly
not a Democrat. Mr. Putnam, member of the Republican leadership. Thad
McCotter. He signed his name. We had to do some investigation. He
really used his chicken scratch here, but we've identified him as Thad
McCotter after some investigation. Mr. Hensarling. Boy, that's a
conservative Republican. Mr. Pearce from New Mexico; Jeff Davis,
Kentucky; Judy Biggert, esteemed subcommittee ranking member, and Dean
Heller.
Seventeen Members, all Republicans, who express real concerns. And I
do want to congratulate the chairman of the full committee, because he
almost responded yes, we need to look into this; we need to have
hearings. He did say, I don't think it's necessary to do it at this
time. I think we can postpone it because we need to talk about
something that's quite different, and that's the foreclosure prices.
But tonight on this floor, the Democrats have linked the two as
bailouts.
Let me tell you what the chairman said. The chairman of the full
committee, and I agree with him, I think he's absolutely right. He said
we should check into this matter because when you use taxpayer money to
guarantee something, here is what he said, ``It sets a precedent that
could lead to future instances of companies . . . expecting the same
assistance.'' A precedent that could lead to future instances of
companies expecting the same assistance. And we shouldn't obligate the
taxpayers to make those sort of expenditures because people will begin
to think that they will be bailed out.
Absolutely what we face tonight. Madam Chairman, Members of this
body, we are creating an expectation tonight on this floor by bailing
out irresponsible speculators and lenders.
I thank the Chairman.
Congress of the United States,
House of Representatives,
Washington, DC, April 7, 2008.
Hon. Barney Frank,
Chairman, Committee on Financial Services, Rayburn House
Office Building, Washington, DC.
Dear Chairman Frank: We are writing to respectfully request
you hold a hearing of the full Financial Services Committee
regarding the recent collapse of the investment bank Bear
Stearns and the subsequent actions taken by the Federal
Reserve to facilitate Bear Stearns' sale to J.P. Morgan
Chase. These steps have had an immediate impact on the
financial markets and are also expected to have a long-term
effect on our financial regulatory structure.
For the first time since the Great Depression, the Fed
voted to open its discount window to primary dealers. While
this authority has been available to the Fed since 1932, the
decision to use it at this time has raised questions about
whether and when the Fed should intervene to help a
particular industry or firm in the name of market stability.
With the Fed approving the financing arrangements of the
sale of Bear Stearns to J.P. Morgan Chase as well as
guaranteeing $29 billion in securities currently held by Bear
Stearns, the Fed has possibly exposed the American taxpayers
to unknown amounts of financial loss and established a
precedent that could lead to future instances of companies in
similar financial trouble expecting the same assistance.
These extraordinary actions have raised a number of complex
and multifaceted questions. As members of the committee of
jurisdiction over our nations' financial markets and the
regulatory bodies that oversee them, we feel it is imperative
to have a full and public vetting of this unique situation.
Therefore, we strongly urge you to convene a hearing on this
subject of the Financial Services Committee on the soonest
possible date.
Thank you for your consideration of this request.
Sincerely,
Scott Garrett, Spencer Bachus, Donald Manzullo, Walter B.
Jones, Michele Bachmann, Ginny Brown-Waite, Randy
Neugebauer, Tom Feeney, Thomas Price, Ron Paul, Adam H.
Putnam, T. McCotter, Jeb Hensarling, Steven Pearce,
Geoff Davis, Judy Biggert, Dean Heller.
____
Congress of the United States,
House of Representatives,
Washington, DC, April 14, 2008.
Hon. Scott Garrett,
Congressman, House of Representatives, Longworth House Office
Building, Washington, DC.
Dear Mr. Garrett, I received the letter signed by you and
sixteen of your Republican colleagues on the Financial
Services Committee expressing your concern that the recent
actions by the top financial appointees of the Bush
administration in the matter of Bear Stearns have ``possibly
exposed the American taxpayers to unknown amounts of
financial loss and established a precedent that could lead to
future instances of companies in similar financial trouble
expecting the same assistance.'' It does occur to me as I
read your letter that I have somewhat more confidence in the
judgment exercised by Secretary of the Treasury Paulson and
his aides and Federal Reserve Chairman Bernanke and other
officials of the Federal Reserve System than you appear to
have, but that is no reason for us not to give this the
fullest possible airing. So I do agree that we should be
thoroughly examining this matter.
Where we may disagree is the context in which this happens.
That is, I agree with you that we should have a ``full and
public vetting of this'' matter, but I do not think it is
necessary that we have the hearing ``on the soonest possible
date.'' I say this for two reasons.
First, the Committee, as you know, is now engaged in
serious consideration of the appropriate response to the
foreclosure crisis that now confronts us. I realize that
there are some who believe that we should take no action at
all, but I think the recent movement by the Bush
administration to expand the reach of the FHA, even though I
do not agree with it in all respects--is recognition of the
need for some action. I therefore believe that it is
important that the Committee continue its efforts on dealing
with the current crisis, in cooperation with our Senate
colleagues who as you know in a bipartisan way have also
moved forward on legislation, although I do not agree myself
with all aspects of it. My intention is to ask that the
Committee continue to focus on this for the next several
weeks.
Secondly, I do believe it is important for the Committee to
begin an investigation, including hearings, into the Bear
Stearns issue, but not in isolation. It is important that we
look at what happened with regard to Bear Stearns, not
primarily as a matter of hindsight because in fact we cannot
undo what was done, but rather from the standpoint of
anticipating what the public response should be in similar
matters going forward. This includes of course discussing
whether or not these specific actions taken in the Bear
Stearns case were the best ones from the public standpoint,
but also beginning the very important issue of what we might
do in Congress to make it less likely that situation of this
sort will recur. You
[[Page H3172]]
correctly note in your letter that what the Bush
Administration did in this case did establish ``a precedent
that could lead to future instances of companies . . .
expecting the same assistance.'' I think it is important that
we therefore empower some federal entities to take actions
that may make this less likely, and would also allow them to
accompany any such intervention if it should later be decided
to be necessary with appropriate I remedial matters.
In summary, I agree that the Committee should be looking
into this, not from the standpoint of rebuking Chairman
Bernanke or Secretary Paulson, but rather as part of a
serious consideration I of the causes of the current crisis
and more importantly, what we can do to make a recurrence of
the events that led up to the Bear Stearns response much less
likely in the future.
Barney Frank
The Acting CHAIRMAN. The time of the gentleman has expired.
Mr. MAHONEY of Florida. Madam Chairman, how much time do I have left?
The Acting CHAIRMAN. Thirty seconds.
Mr. MAHONEY of Florida. I will yield that to the gentleman from
Massachusetts.
Mr. FRANK of Massachusetts. I will respond at great length later, but
I would say this.
I said I did not oppose, myself, what they did. I was talking
primarily about the Bush administration.
Now the ranking member said 17 Republicans out of almost 200 signed
this letter. I don't think that's the majority of Republicans. They
didn't oppose it. They raised questions about it.
But it was the two highest ranking economic officials appointed by
the Bush administration, Chairman Bernanke and Secretary Paulson, who
did this; and it's the Bush administration that seems to me to be
totally inconsistent here. So yes, I did point to an inconsistency
between the Bush administration doing the bailout and their opposing
this. I'm setting a precedent. I hope the citizens will think we are
setting the precedent of coming to their aid from time to time.
The Acting CHAIRMAN. All time for debate on the amendment has
expired.
The question is on the amendment offered by the gentleman from
Florida (Mr. Mahoney).
The amendment was agreed to.
Amendment No. 4 Offered by Mr. Hensarling
The Acting CHAIRMAN. It is now in order to consider amendment No. 4
printed in House Report 110-621.
Mr. HENSARLING. Madam Chairman, I have an amendment at the desk.
The Acting CHAIRMAN. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 4 offered by Mr. Hensarling:
Page 2, line 10, strike ``and grant''.
Page 3, line 1, strike ``and grants''.
Page 3, line 10, strike ``AND GRANTS''.
Page 3, line 13, strike ``make grants under section 5(a) to
qualified States and''.
Page 3, lines 18 and 19, strike ``make a grant under this
Act only to a State, and may''.
Page 4, line 25, strike ``grant and''.
Page 5, line 3, strike ``grant and''.
Page 5, line 7, strike ``grant or''.
Page 6, line 8, strike ``grant and''.
Page 6, lines 21 and 22, strike ``grant amounts, and for''.
Page 7, line 1, strike ``grant or''.
Strike line 22 on page 8 and all that follows through page
9, line 2.
Page 9, line 9, strike ``Grant Amounts and''.
Page 9, line 11, strike ``grant amount or''.
Page 9, lines 12 and 13, strike ``foreclosure grant
share''.
Page 9, line 13, strike ``or''.
Page 9, lines 13 and 14, strike ``, respectively,''.
Page 9, line 20, strike ``grant amount or''.
Page 9, line 22, strike ``foreclosure grant share or''.
Page 9, line 23, strike ``, respectively,'' and ``the grant
amount or''.
Page 9, line 25, strike ``foreclosure grant share or''.
Page 10, line 1, strike ``, respectively,''.
Page 10, line 2, strike ``grant amounts or''.
Page 10, line 6, strike ``grant amounts or''.
Page 10, line 9, strike ``grant amount or''.
Page 10, line 11, strike ``grant amount or''.
Page 10, line 13, strike ``foreclosure grant share or''.
Page 10, line 14, strike ``, respectively''.
Page 10, line 16, strike ``grant or''.
Page 10, line 18, strike ``or grants''.
Strike line 23 on page 10 and all that follows through page
11, line 10.
Page 12, line 3, strike ``grant and''.
Page 12, strike lines 5 through 7.
Page 12, line 14, strike ``grant amounts and''.
Page 12, lines 17 and 18, strike ``such grant amounts
and''.
Page 12, line 19, strike ``grant amounts and''.
Page 12, line 20, strike ``, respectively,''.
Page 13, line 8, strike ``grant amounts and''.
Page 13, lines 11 and 12, strike ``grant amounts and''.
Page 13, line 13, strike ``grant amounts and''.
Page 13, line 14, strike ``, respectively,''.
Page 14, lines 1 and 2, strike ``grant and''.
Page 14, line 5, strike ``grant and''.
Page 14, line 8, strike ``grant and''.
Page 14, line 12, strike ``grant amounts and''.
Page 14, line 17, strike ``grant amounts and''.
Page 17, strike lines 21 through 25.
Strike line 18 on page 19 and all that follows through page
21, line 24.
Page 22, line 2, strike ``grant or''.
Strike line 12 on page 22 and all that follows through page
24, line 4.
Page 24, line 6, strike ``grant or''.
Page 24, lines 7 and 8, strike ``grant and''.
Page 24, line 23, strike ``or grant''.
Page 24, line 25, strike ``or grant''.
Page 27, line 13, strike ``grant or''.
Page 27, line 19, strike ``or grant''.
Page 28, lines 12 and 13, strike ``receives a grant under
this Act or''.
Page 28, lines 15 and 16, strike ``obligation of such grant
amounts and''.
Page 28, line 20, strike ``obligate all such grant amounts
and''.
Page 28, lines 24 and 25, strike ``outlay all such grant
amounts and''.
Page 30, line 3, strike ``a grant or'' and insert ``an''.
Page 30, line 13, strike ``grant or''.
Page 30, lines 14 and 15, strike ``grant or''.
Page 30, line 19, strike ``grant or''.
Page 35, strike lines 8 through 10.
Page 35, line 21, strike ``$7,500,000,000'' and insert
``$15,000,000,000''.
The Acting CHAIRMAN. Pursuant to House Resolution 1174, Mr.
Hensarling and a Member opposed each will control 5 minutes.
The Chair recognizes the gentleman from Texas.
Mr. HENSARLING. Thank you, Madam Chairman.
First, I would like to yield 30 seconds to the ranking member, the
gentleman from Alabama.
Mr. BACHUS. I thank the gentleman from Texas.
And responding to the chairman, first of all, I would say the letter
that came back to Mr. Garrett from the chairman expressed the
chairman's opinion that he had much more confidence in this bailout
than the Republican Members.
But secondly, he pointed out only 17 Members. In fact, that is the
majority of the Financial Services Committee, and as Mr. Garrett asked
earlier of the majority party, how many Democrats signed a letter
demanding an investigation into the Bear Stearns matter? The response
was none. All Members that have publicly in writing demanded an
investigation were Republican Members, the majority of the Financial
Services Committee.
Mr. HENSARLING. Madam Chairman, I will yield myself as much time as I
may consume.
Madam Chairman, I thank the ranking member for his comments and again
bringing up what is a very important issue here. And that is
fundamentally what we have before us is a Wall Street bailout bill. Now
we all know there are some very significant challenges in our housing
markets. But the answer is not to be bailing out lenders. They may be
good lenders who made bad bets, and maybe they are the predatory
lenders that we hear so much about. This bill doesn't make any
particular distinction.
The people who can stay in their homes, if they just get a little
help, we need disclosure. We need to enforce the law against fraud.
There has been a lot of mortgage fraud on the borrowers' side, on the
lenders' side.
Most importantly now, Madam Chairman, we need to prevent the single
largest tax increase in American history passed by the Democrat
majority in their budget which means that people who are struggling to
pay their mortgages are going to have to pay more taxes.
The rising fuel cost, that's happened under the watch of the Democrat
majority; the rising cost of food happened under the watch of the
Democrat majority. They've been in charge of the economic policy of
America for almost a year and a half now. It is the shrinking paycheck
of the hardworking American homeowner and taxpayer that's at the crux
of this problem.
And so what this underlying bill does is take $15 billion of money
away from the school teacher in Mesquite, Texas, struggling to pay his
mortgage; the guy who works at the Pepsi bottling plant in Mesquite;
the rancher out in Athens, Texas; takes money away from
[[Page H3173]]
them to bail out all of these bad investors who made these bad bets.
So you can't say that you were concerned about Bear Stearns and then
all of a sudden turn right around and have this humongous Wall Street
bailout bill.
My amendment is simple. Presently, you have a $15 billion bill, half
of which are loans and half of which are grants. The purpose of the
amendment is to turn this into strictly a loan program. Now, I don't
believe in the purpose of the underlying bill. But, if you're going to
bail out Wall Street and use taxpayer money, let's at least, at least
try to make it a loan so that there is at least some chance, some
chance that the taxpayer who's facing a $3,000-a-year increase in their
taxes for a family of four over the next 3 years under the majority
budget, that maybe, maybe they have some small chance of recouping some
of that money from all of these cities and localities. And by the way,
again, the last I looked, almost every single State and municipality in
America is running a surplus.
{time} 2215
Yet the Federal Government isn't, and so what does the underlying
bill do? Hands out more grant money, more grant money on top of the $57
trillion of unfunded obligations that every man, woman and child in
America already owes. Well, let's add some more grant money.
Well, if it's that important to States and municipalities, maybe they
would want to fund it or maybe they could take the loan money and
eventually pay it back so maybe the Democrat majority wouldn't have to
raise taxes on the Federal taxpayers quite as much.
So, Madam Chairman, it's a very commonsense amendment. If you're
going to do it, at least do loans and don't do grants.
With that, I reserve the balance of my time.
Mr. SCOTT of Georgia. Madam Chairman, I rise to claim the time in
opposition.
The Acting CHAIRMAN. The gentleman is recognized for 5 minutes.
Mr. SCOTT of Georgia. What we see here, Madam Chairman, is a
fundamental difference between the Republicans and the Democrats when
it comes to responding to the pressing needs of the American people.
Let us look at really where we are.
We are in a depressed, recessed economy, which means liquidity is
drying up, which means there is a slowing supply and circulation of
money, which has been caused chiefly by a meltdown of the subprime
mortgage market, and it has had a ricocheting effect throughout every
fiber of our economy.
The American people are hanging on by their fingernails. Between
7,000 and 8,000 American families are foreclosing every day, according
to the Federal Reserve, not David Scott, not our Financial Services
Committee, but according to the Federal Reserve, between 7,000 and
8,000 individuals are declaring foreclosure.
That means communities all across this Nation are impacted. Not only
is this a burden upon individuals, homeowners and families, it's
devastating enough, but many of these foreclosures, when the property's
foreclosed, that means folks are out of them. That means they are left
vacant. That means they become fire hazards. That means they become
havens to criminals. That means police services, that means fire
services, that means a tremendous pressure being placed on already
depressed city and county and State budgets.
And Madam Chairman, in every State in this Nation, there's been a 20
percent, at least, increase in foreclosures. So this is a problem of
soaring magnitude, and the cities and the counties are already, many of
them, moving ahead, but they are overwhelmed with the scale of this
problem. And that's where the government comes in.
There is a role for government. We need to respond to the needs of
the American people, and nowhere is it more important than in this bill
that has been very brilliantly designed by the gentlelady from
California and our chairman of this committee.
Now let's speak very briefly about this Hensarling amendment. And, I
might add, the gentleman from Texas is a fine person. I consider him a
good friend, but he is terribly, terribly wrong with this amendment.
This is a terrible amendment because it does what we refer to in the
South as, hold still, little fishy, and let me gut you. That's what
this amendment does.
It goes at the heart of this bill, because what he wants to do is
take away the stimulus package for the local communities, and what he
wants to do is to deny a way and a requirement in the bill so that we
can help the poor elements where this bill says that you must serve
those that meet at least 50 percent of the level of poverty. In order
to do that, we must have the grant feature in the bill.
The other point, as I mentioned earlier, a part of our whole concern
in this whole economic issue is liquidity, which means we must have a
stimulative nature in terms of what we do here in Washington, to
stimulate the economy and put money into the economy. That's why we've
got this week and leading on starting in next week $600, $300 and
$1,200 checks. To do what? To stimulate.
I take great offense from the other side when they constantly want
the American people to think we're taking their tax money away and
putting it in our pockets or hoarding it. This money is going right
back to taxpayers to help to defray the costs of servicing these
depressed communities.
The grants are needed, Madam Chairman, in order for us to serve those
that are at the lower end of the economic level, which we must do and
can only be done through grants. If his amendment is adopted, we won't
be able to do that which hurts and almost kills this bill.
The other thing that it does, it does not allow us to apply the
stimulus factor to the bill to provide needed input into this. I urge a
defeat of this. It might be intentioned, I won't say well, but it is a
terrible amendment from the gentleman from Texas.
The Acting CHAIRMAN. The gentleman's time has expired.
Mr. HENSARLING. I yield myself the balance of my time.
Well, first, I would say to my friend from Georgia and other friends
on that side of the aisle, if loans are so bad, why are they in the
bill in the first place?
Second of all, this bill does nothing to stop foreclosures, not a
thing. Quite the opposite. Instead, it will increase foreclosures.
What you have is an incentive for these investors to no longer do a
workout with the struggling family, but instead, I can get bailed out.
I can get bailed out by the Federal taxpayer. This is a bill that will
help banks, Wall Street and States and does nothing for foreclosed
families. It certainly does nothing for the taxpayer, and if we have a
liquidity problem, which we do, let's cut the capital gains tax rate
and you will see capital come into this market. I urge adoption.
The Acting CHAIRMAN. All time for debate on the amendment has
expired.
The question is on the amendment offered by the gentleman from Texas
(Mr. Hensarling).
The question was taken; and the Acting Chairman announced that the
noes appeared to have it.
Mr. HENSARLING. Madam Chairman, I demand a recorded vote.
The Acting CHAIRMAN. Pursuant to clause 6 of rule XVIII, further
proceedings on the amendment offered by the gentleman from Texas will
be postponed.
Amendment No. 5 Offered by Mr. Kucinich
The Acting CHAIRMAN. It is now in order to consider amendment No. 5
printed in House Report 110-621.
Mr. KUCINICH. Madam Chairman, I have an amendment at the desk.
The Acting CHAIRMAN. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 5 offered by Mr. Kucinich:
Page 2, line 13, strike ``purchase and rehabilitate'' and
insert ``preserve the equity and ensure the safety of the
neighbors of homes made vacant by the predatory lending and
foreclosure crises, to prevent and reduce the incidence of
such vacancies through various means, including purchasing
and rehabilitating''.
Page 3, line 3, before the semicolon insert ``, and largest
increases in the rate of vacant and abandoned single family
homes''.
Page 4, line 17, strike ``foreclosures'' and insert
``vacancies, according to the number of census tracts, as
determined by the Secretary, to have large increases in the
rate of
[[Page H3174]]
vacancy during the past eight quarters and significant levels
of loans determined to be at risk of foreclosure,''.
The Acting CHAIRMAN. Pursuant to House Resolution 1174, the gentleman
from Ohio (Mr. Kucinich) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from Ohio.
Mr. KUCINICH. Madam Chairman, I yield myself such time as I may
consume.
The primary beneficiaries of H.R. 5818 are the neighborhoods and
neighbors of high concentrations of houses made vacant by the
foreclosure and predatory lending crises. Helping those neighborhoods
should be a nonpartisan and noncontroversial act. Such neighborhoods
are the totally innocent bystanders of the predatory lending and
foreclosure crises. Neighbors and neighborhoods are victims of the
meltdown of subprime loans that preceded this wave of foreclosures, and
there's no moral hazard in helping the neighbors. The Kucinich
amendment ensures that the funds authorized by H.R. 5818 are targeted
to help the most needy neighborhoods.
When a foreclosure leads to a vacant and abandoned property, this is
what happens to the neighborhood: Crime goes up, as the vacant property
can become home to criminal activity, drug places, and fire hazards;
local government costs for police, fire and building inspections go up;
vacancies go up, abandoned properties initiate a chain of events that
begets more abandoned properties; neighbors lose equity in their homes,
because vacant properties have a strong negative effect on the value of
neighboring properties.
My amendment clarifies that the purpose of this legislation is to
help State and local governments ``preserve the equity and ensure the
safety of neighbors of homes made vacant'' by the foreclosure and
predatory lending crises.
My amendment also ensures that the neediest neighborhoods receive
priority in the plans developed by States, metropolitan cities and
urban counties. The neediest neighborhoods are defined with ``high
concentrations of vacancies,'' ``large increases in the rate of
vacancy'' in the last 2 years, and ``significant levels of loans
determined to be at risk of foreclosure.'' These vacant property
statistics have been gathered by the United States Postal Service and
analyzed by the Department of Housing and Urban Development, and their
use will better target the funds authorized by H.R. 5818.
My amendment is the product of a collaborative effort between my
subcommittee, the Domestic Policy Subcommittee, and the Subcommittee on
Housing and Community Opportunity and the Financial Services Committee.
The amendment draws upon the academic research and input from
practitioners in this area.
My amendment is supported by community development professionals and
advocates, such as Local Initiatives Support Corporation, the National
Vacant Properties Campaign, and Smart Growth America.
I will place their letters of support in the Record at this point.
May 6, 2008.
Hon. Dennis Kucinich,
Rayburn House Office Building,
Washington, DC.
Dear Congressman Kucinich: We are writing to support your
amendment to the Neighborhood Stabilization Act of 2008 that
recognizes the important role vacant and abandoned properties
play in the foreclosure crisis and the threat they can pose
to communities across the country.
By including the rate of vacancy in the fund distribution
formula, this proposal helps to ensure that neighborhoods
struggling with high rates of vacant and abandoned homes will
receive priority in the plans developed by states,
metropolitan areas, and urban counties. High rates of vacant
properties put communities at a greater risk for crime,
arson, destabilized housing prices, and other neighborhood
problems. For many communities, dealing with the foreclosure
crisis will mean taking steps to recover and secure growing
numbers of vacant homes, as well as figuring out the best
ways to prevent these properties from having negative
community impacts.
Thank you for your leadership on this issue and we look
forward to working with you on this important legislation.
Sincerely,
Geoff Anderson,
President & CEO, Smart Growth America.
Jennifer Leonard,
Director, National Vacant Properties Campaign.
____
Local Initiatives
Support Corporation,
Washington, DC, May 6, 2008.
Rep. Dennis Kucinich,
Rayburn House Office Building,
Washington, DC.
Dear Representative Kucinich: Regarding H.R. 5818, the
Neighborhood Stabilization Act of 2008, Local Initiatives
Support Corporation (LISC) supports your amendment to focus
the bill's resources on communities with rising vacancies.
A primary purpose of H.R. 5818, which LISC also supports
more broadly, is to help communities hurt by concentrations
of home mortgage foreclosures. A principal indicator of this
problem is the number and growth of vacant properties.
Concentrations of vacant and abandoned properties have a
corrosive affect on neighborhoods. Vacant properties depress
the value of nearby properties, reduce the tax base on which
states and localities depend, are a magnet for crime, and
often undermine promising but fragile progress toward
revitalization.
Your amendment is an important refinement to H.R. 5818
because it would direct states to prioritize the allocation
of funds under the bill to low- and moderate-income
neighborhoods with the highest concentration of vacant
properties.
We greatly appreciate your leadership on this most
important issue for vulnerable communities and the people who
live there.
Sincerely,
Benson F. Roberts,
Senior Vice President for Policy
and Program Development.
I urge adoption of the Kucinich amendment which targets funds to the
most needy neighborhoods.
I reserve the balance of my time.
Ms. WATERS. Madam Chairman, I rise in support of Mr. Kucinich's
amendment.
The Acting CHAIRMAN. Without objection, the gentlewoman from
California is recognized for 5 minutes.
There was no objection.
Ms. WATERS. Madam Chairman, I rise in strong support of
Representative Kucinich's amendment.
His subcommittee has done an enormous amount of valuable work
examining this targeting issue, and I want to thank him for focusing
attention on the issue of neighborhoods where there are large and
growing concentrations of vacancies resulting from the foreclosure
crisis. They're exactly the neighborhoods I mentioned in my opening
statement, ones that face the prospect of reaching the tipping point of
deterioration from which they may never recover. Stabilizing such
neighborhoods is an especially daunting task for community leaders and
organizations.
So I think it is entirely appropriate, as this amendment does, to
require States, counties and cities in their plans to prioritize these
foreclosures and vacancy hotspots.
Finally, I know that this is no academic exercise for Representative
Kucinich in his role as subcommittee Chair. He's bringing hard
experience to the table from the neighborhoods within his district in
Cleveland.
I urge my colleagues to support this amendment.
I yield back the balance of my time.
Mr. KUCINICH. Madam Chairman, I yield to the gentlewoman from Texas
(Ms. Jackson-Lee) for a unanimous consent request.
Ms. JACKSON-LEE of Texas. I ask unanimous consent to support this
very important amendment by the gentleman from Ohio and as well to
enthusiastically support the $15 billion for reclaiming our homes.
With that, I offer to submit my statement for the Record.
The Acting CHAIRMAN. Is there objection to the request of the
gentlewoman from Texas?
There was no objection.
Ms. JACKSON-LEE of Texas. Madam Chairman, I rise in support of H.R.
5818, the ``Neighborhood Stabilization Act of 2008,'' introduced by
Congresswoman Maxine Waters, of California. I would also like to thank
Chairman Barney Frank for his leadership on the Financial Services
Committee. I also support the Kucinich amendment to ensure accurate
vacancy statistics.
I find it interesting that we are okay with a bailout of Bear
Stearns, the fifth largest investment firm in the amount of 42 million
dollars; however we cannot support assistance to the American
Homeowners who are struggling to pay their mortgage, fill up at the
pump, and get quality healthcare.
General Introduction
As evidenced by the numerous housing and financial services bills
introduced this Congress, we are in economic turmoil. I have been
concerned over recent developments in
[[Page H3175]]
the housing and mortgage markets and worked with my colleagues to
ensure that all Americans are able to get assistance.
Legislation such as H.R. 3019, the Expand and Preserve Home Ownership
through Counseling Act and H.R. 3666, the Foreclosure Prevention and
Home Ownership Protection Act, include sections that speak specifically
about foreclosures. They authorize studies on current defaults and
foreclosures, as well as possible causes.
However, H.R. 5818 provides for action. H.R. 5818 establishes a 15
billion dollar loan and grant program for the purchase and
rehabilitation of owner-vacated, foreclosed homes. The Department of
Housing and Urban Development (HUD) will make the allocations to the
States; 7.5 billion of the funds would be for loans, and 7.5 billion
for grants.
Beyond negotiating with the mortgage company, Americans need to know
they have options. Sometimes it is the mortgage company who has given
them a bad loan; H.R. 5818 offers some relief to individuals and
families who need help, beyond their personal lender.
TEXAS
Nationwide, the number of home foreclosures rose nearly 60 percent
from February 2007 to February 2008, while foreclosures in Texas
actually decreased 1 percent during the same, period. In fact, state-
wide foreclosure filings in Texas dropped 17 percent from January to
February.
Despite being such a large state, Texas ranks only 17th in
foreclosures, below the national average. One reason is that Texas
homeowners enjoy strong constitutional protections under the state's
home-equity lending law.
These consumer protections include a 3 percent cap on lender's fees,
80 percent loan-to-value ratio (compared to many other states that
allow borrowers to obtain 125 percent of their home's value), and
mandatory judicial sign-off on any foreclosure proceeding involving a
defaulted home-equity loan.
Even though the rate of increase has showed slowing in the first two
months of the year, uncertainties remain. Foreclosures are high and
could still beat last year's numbers. Harris County, for example,
racked up 2,219 foreclosures during the first two months of the year.
That's compared with 1,915 during the same period last year.
AMENDMENT LANGUAGE AND PURPOSE
I had offered an amendment to H.R. 5818 that would provide for those
who have been struggling to keep up with the rising prices of gas, the
downturn of the housing market, and the incredible cost of health care.
My amendment would not exclude from eligibility, individuals and
families based solely on credit ratings or their credit histories.
Many individuals and families have credit ratings and histories that
are less than required for the most-advantageous lending terms. These
individuals should not be faulted for their struggle to make ends meet
in these troubling economic times.
They have less than stellar credit due to the financial stress they
have experienced trying to save their home from foreclosure. As a
result, they have marred their credit. Families who have struggled to
decide between paying their mortgage or paying for healthcare, families
who have struggled to balance their need for shelter with their need
for food are rarely able to maintain a credit score that qualifies them
for a basic credit card, let alone a home or rental property.
At least 50 percent of the grant money must be targeted to house
families at or below 50 percent of AMI, and not less than half of this
money must target families at or below 30 percent of AMI. Most of the
people covered under this bill and at these income levels will not
qualify if it is not clearly stated that they can be considered even
with less than stellar credit.
Conclusion
Americans are hurting and they need help. H.R. 5818, provides much
needed help to the states and to the families who are facing a housIng
downtown. Thank you, Madam Chairman, and thank you, Congressman Frank
and Congresswoman Waters, for this timely housing legislation. I urge
my colleagues to support this legislation and give some relief to
American families.
Mr. KUCINICH. Madam Chairman, I yield back the balance of my time.
The Acting CHAIRMAN. The question is on the amendment offered by the
gentleman from Ohio (Mr. Kucinich).
The amendment was agreed to.
Amendment No. 6 Offered by Mr. McCotter
The Acting CHAIRMAN. It is now in order to consider amendment No. 6
printed in House Report 110-621.
Mr. McCOTTER. Madam Chairman, I have an amendment at the desk.
The Acting CHAIRMAN. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 6 offered by Mr. McCotter:
Page 6, after line 2, insert the following:
(8) notwithstanding any other preferences established or
authorized under this subsection, provide first priority, in
use of amounts from grants or loans under this Act for
rehabilitating housing, for providing housing for veterans,
members of the Armed Forces on active duty, members of the
National Guard or Armed Forces reserves, school teachers, and
emergency responders;
Page 6, line 3, strike ``(8)'' and insert ``(9)''.
Page 6, line 8, strike ``(9)'' and insert ``(10)''.
Page 6, line 13, strike ``(10)'' and insert ``(11)''.
Page 6, line 21, strike ``(11)'' and insert ``(12)''.
Page 7, line 1, strike ``(12)'' and insert ``(13)''.
The Acting CHAIRMAN. Pursuant to House Resolution 1174, the gentleman
from Michigan (Mr. McCotter) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from Michigan.
Mr. McCOTTER. Madam Chairman, I yield myself as much time as I may
consume.
Just a brief description of the amendment which I hope will prove
noncontroversial. What I would like to do under the bill, though I'm
not particularly a fan of the bill itself and its particulars, I would
like to try to help to make it better.
My amendment would, under the bill, require States to give first
priority to veterans, active duty military personnel, National Guard,
Armed Forces Reserves, schoolteachers and emergency response personnel
when selling rehabilitated housing with funds authorized under H.R.
5818.
{time} 2230
Importantly, this amendment will not exclude those individuals who
are low income, and does not change the underlying low-income
eligibility requirements established under the bill.
Madam Chairman, I reserve the balance of my time.
Mr. FRANK of Massachusetts. Madam Chairman, I rise in as close to
opposition as this noncontroversial amendment is likely to engender.
The Acting CHAIRMAN. Without objection, the gentleman is recognized
for 5 minutes.
There was no objection.
Mr. FRANK of Massachusetts. I did note, and I welcome the gentleman
from Michigan's affirmation, that this is not simply for banks,
investment houses, pirates, lechers and other ill of sordid folk. He is
seeking to give preference to veterans, members of the Armed Forces on
active duty, members of the National Guard or Armed Forces Reserve,
school teachers and emergency responders.
I agree with these priorities. It is, of course, an affirmation that
this bill will benefit these people, unless we are to assume that they
will be given a preference which is of no benefit to them. But if this
bill is of no benefit to anybody but speculators, lenders and riffraff,
then why give preference to these people? I agree with the amendment to
that extent, and so I would just say that this underlines the point
that there are very worthy beneficiaries.
But now I also want to return to the matter of the Bear Stearns
issue. I will acknowledge, I did receive a letter from 17 Republicans,
which is, by my math, not a huge percentage of 199 or 200 or whatever
the declining number of Republican Members of the House is these days,
but it is still not a very large number. And even in that letter, while
it was not thrilled by the Chairman Bernanke-Secretary Paulson
collaboration, it does not have one word in strict opposition to it.
Nor does the letter that 24 Republicans--a slightly larger number, but
still not even 15 percent--sent to Mr. Bernanke again raising
questions.
So, yes, 24 Republicans have raised questions, Members of the House,
about this bill. I will repeat that my accusation of inconsistency goes
to the Bush administration primarily. They are the ones who engineered
the $29 billion. They are the ones who are vehemently opposed to this.
Now some Republican Members did raise a question that said we should
look into it and we're skeptical of it. I agreed with that. As I said
in the letter, I think we should study it. I did think we should study
it a little later for two reasons; first of all, I do believe
[[Page H3176]]
the subprime crisis is a crisis, some Members on the other side do not.
There are, among the signers of this letter, some of those who, from
their very conservative ideology, oppose any action by this Congress
regarding the subprime. I mean that quite literally, they oppose any
action to deal with this. That's their right. But I would put dealing
with the subprime crisis ahead of a backward look, as important as that
ultimately will be, at what happened with Bear Stearns.
Secondly, I want to look at what the Fed did there in the context of
how can we make it less likely that it will happen again? I wasn't
happy that it happened. I think there was a necessity in those
circumstances. So what I said in the letter that I sent back to the
authors was, yes, we should look at this in the context of the broader
question: What powers do we need to give either the Federal Reserve or
somebody else to make it less likely that this happens again?
So, yes, I should, we should, look into it, but I think we should
look into it not simply from a kind of retroactive bawling them out,
but how do we prevent it or diminish the likelihood of it happening?
But the inconsistency remains. Twenty-four Republicans said they had
questions. On the whole, I haven't heard any Republican opposition to
it. I haven't seen any resolution opposing it.
It was the Bush administration, and this is my point: I thought it
was unfortunately necessary. The Bush Administration, this is Secretary
Paulson and Chairman Bernanke, they were the ones who did this. And I
think they have been responsible in trying to deal with this crisis.
But for the President who appointed those people to now denounce this
because it's going to help, among others--and by the way, let's be
clear, if this amendment passes, as I hope it will, we will be giving
preference under this bill to veterans, members of the Armed Forces on
active duty, members of the National Guard or Armed Forces Reserve,
school teachers and emergency responders. So we have a Republican
affirmation that these are among the beneficiaries.
And when you talk about bailing out investors and speculators, yes,
that's what happened in the Bear Stearns situation. These were
precisely the people who had done business with Bear Stearns. Now I
believe that years of inadequate supervision of the economy, flawed
legislation adopted when we repealed Glass-Stiegel and didn't put in
regulations to deal with it at the time, that was supported by the
Clinton administration and I voted against it. But when that happened,
we invited the kind of problems that the leaders of the economic policy
of the Bush administration had to implement. And it is that
administration which is therefore being totally inconsistent in this
regard.
Madam Chairman, I reserve the balance of my time.
Mr. McCOTTER. Madam Chairman, I would like to yield 1 minute to the
author of one of the letters in question, the distinguished gentleman
from New Jersey (Mr. Garrett).
Mr. GARRETT of New Jersey. I find it amazing and amusing that the
chairman raises how many Republicans signed onto the two letters when,
in fact, it evidences the fact that zero Democrats signed onto that
letter and zero Democrats have done anything with regard to Bear
Stearns for the last 2 months since this occurred. If there was even
one Member from the other side of the aisle from the committee, when we
invited the entire committee to sign onto it, I think the chairman
would be in a stronger position, but he is not because none of them
signed on then. And even earlier this evening, when I invited them to
sign onto an addition to it, none of them have come across to sign onto
it.
Secondly, I find it amusing when the chairman's response in the
letter was that he has more confidence in Bernanke and the Fed than we
do. So if your question is that we did not point out that there were
problems with it, your response points out that--as I've said, I'm not
quoting because I cannot get a copy of the letter back here--you had
more confidence in the decisions and in the actions of the Fed and the
administration. So if you had more confidence, maybe that explains why
2 months after the action we are still asking for the chairman to hold
a hearing on the matter, and here it is, 2 months later, all we are
getting is rhetoric from this side of the aisle.
Mr. FRANK of Massachusetts. May I inquire of the Chairman how much
time I have remaining.
The Acting CHAIRMAN. Fifteen seconds for the gentleman from
Massachusetts.
Mr. McCOTTER. Madam Chairman, I reserve the balance of my time.
Mr. FRANK of Massachusetts. I have said repeatedly that I did not
oppose the action. And I am pointing to the hypocrisy on the part of
the Bush administration. The gentleman from New Jersey, like Sherlock
Holmes, unearthed the fact that I wasn't opposed to it. I said that. I
think they were forced into it. So, yes, I did not sign it.
As to not having a hearing right away, that is a done deal. I'm
trying to prevent foreclosures now, then we will get back to looking in
the rearview mirror.
Mr. McCOTTER. May I inquire as to how much time I have remaining.
The Acting CHAIRMAN. The gentleman has 3 minutes remaining.
Mr. McCOTTER. I yield myself such time as I may consume.
First, I would like to reemphasize the point made by the gentleman
from New Jersey. The distinguished chairman of the committee is right,
the Republican numbers are declining, and this painful experience with
arithmetic has taught us that 17 is still a greater number than zero.
Mr. FRANK of Massachusetts. Will the gentleman yield?
Mr. McCOTTER. The gentleman may potentially yield, but not at this
point.
I would also like to point out that the distinguished chairman is
right, the bill, if this amendment is adopted, would not be for
speculators, simply for Bear Stearns, for Wall Street, would not be a
big, bloated government golden parachute, but again, I think in this
town, I think I'm being thanked for adding deserving people to
something that may or may not help.
You see, it's not the intent that we are debating, it is how we get
to where we all want to go. Do we believe that this is the best way to
go? I highly doubt that on our side that we would concur with that. And
the reason that we cannot concur with that is, as I believe the
gentleman from Georgia pointed out, there are fundamental principles at
stake here that we simply differ on. That's all right. We agree on some
things, sometimes we don't, but they're a matter of principle. And in
the end, the fundamental principle at stake is that our side believes
that Americans' prosperity does not come from government, it comes from
their own hard work and entrepreneurial investment. And what we want to
see with this bill is an appropriate balance for the people that we
truly are trying to help, for them who have made no mistakes, for them
who have managed to hang on by their fingernails, for them to be able
to say that we were compassionate towards our fellow Americans, our tax
dollars were wisely used, and yet they were appropriately used. We
believe in better government, not necessarily bigger government. And
that is the crux of what we are debating today.
All good people on both sides. And as for the chairman, I do believe
he is a very honorable man. One of the places we do agree is on the
Bear Stearns bailout. A lot of our colleagues on this side of the aisle
screwed up their jobs and didn't get to walk away with $61 million.
They walked away with far worse. And I think that the Bear Stearns
issue, which is being conducted by Bernanke over at the Federal Reserve
and the Secretary of the Treasury, both of whom work for the Bush
administration--well, one technically does--and who both were, I think
on a bipartisan basis, confirmed by the United States Senate. So at
least there's one thing we have in common, we aren't to blame for that.
So I would look forward to working with him on that.
But again, I appreciate the support for the amendment, and I will
yield to the chairman.
Mr. FRANK of Massachusetts. I just want to repeat, Members seem to
think they're scoring points by saying, oh, they discovered we weren't
opposed to it. I've said a dozen times, I thought they did what was
necessary. I am not critical of them.
I do want to go back and see how we can prevent this from happening
again.
[[Page H3177]]
But there is no inconsistency on our part. We didn't say that was the
wrong thing to do. The inconsistency is the administration that says
yes to $30 billion to Bear Stearns and no to $15 billion here.
The Acting CHAIRMAN. All time for debate on the amendment has
expired.
The question is on the amendment offered by the gentleman from
Michigan (Mr. McCotter).
The amendment was agreed to.
Amendment No. 7 Offered by Mr. Altmire
The Acting CHAIRMAN. It is now in order to consider amendment No. 7
printed in House Report 110-621.
Mr. ALTMIRE. Madam Chairman, I have an amendment at the desk.
The Acting CHAIRMAN. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 7 offered by Mr. Altmire:
Page 36, after line 2, insert the following new section:
SEC. 15. INELIGIBLITY OF ILLEGAL ALIENS FOR ASSISTANCE.
Aliens who are not lawfully present in the United States
shall be ineligible for financial assistance under this Act,
as provided and defined by section 214 of the Housing and
Community Development Act of 1980 (42 U.S.C. 1436a). Nothing
in this Act shall be construed to alter the restrictions or
definitions in such section 214.
Page 36, line 3, strike ``15'' and insert ``16''.
The Acting CHAIRMAN. Pursuant to House Resolution 1174, the gentleman
from Pennsylvania (Mr. Altmire) and a Member opposed each will control
5 minutes.
The Chair recognizes the gentleman from Pennsylvania.
Mr. ALTMIRE. I yield myself such time as I may consume.
Madam Chairman, I offer this amendment to the Neighborhood
Stabilization Act to ensure that illegal immigrants are not eligible
for the financial assistance we're providing today to individuals
adversely affected by the housing crisis.
Section 214 of the Housing and Community Development Act governs the
participation of noncitizens in certain HUD programs. It requires valid
documentation from the beneficiary, verification of that documentation
by the appropriate entity, and outlines who may and may not be eligible
for financial assistance.
Under section 214, illegal immigrants are not eligible for financial
assistance. Let me repeat that: Under section 214, illegal immigrants
are not eligible for financial assistance. And my amendment makes
certain that section 214 rules apply to the new programs authorized by
the Neighborhood Stabilization Act that we are debating tonight.
With the housing crisis and economic downturn impacting the lives of
hardworking Americans throughout the country, we need to make sure that
targeted, fiscally responsible assistance that we are providing goes
only to law-abiding citizens.
As responsible stewards of taxpayer dollars, it is our responsibility
to ensure that every penny is spent wisely and is not used to benefit
any illegal immigrants in any way.
I urge all of my colleagues to support this amendment.
Madam Chairman, I reserve the balance of my time.
Mrs. CAPITO. Madam Chairman, I seek time in opposition, although I am
not opposed to the gentleman's amendment.
The Acting CHAIRMAN. Without objection, the gentlewoman from West
Virginia is recognized for 5 minutes.
There was no objection.
Mrs. CAPITO. I would just like to express my support for his
amendment. I think we have had this debate on the floor many times. And
I want to say that we want to assure the American public, I think it's
always good to reassure the American public that taxpayer funds are not
going to help people here who have entered our country illegally and
remain here illegally.
I would like to see, as we move forward in this debate on this and
other bills, that we tighten down the types of identification that are
full proof, that can be used to certify the legality of whoever the
resident is residing, whether it's in public housing or in other
taxpayer-funded opportunities.
I yield back the balance of my time.
Mr. ALTMIRE. Madam Chairman, I yield back the balance of my time.
The Acting CHAIRMAN. All time for debate on the amendment has
expired.
The question is on the amendment offered by the gentleman from
Pennsylvania (Mr. Altmire).
The question was taken; and the Acting Chairman announced that the
ayes appeared to have it.
Mr. ALTMIRE. Madam Chairman, I demand a recorded vote.
The Acting CHAIRMAN. Pursuant to clause 6 of rule XVIII, further
proceedings on the amendment offered by the gentleman from Pennsylvania
will be postponed.
Ms. WATERS. Madam Chairman, I move that the Committee do now rise.
The motion was agreed to.
Accordingly, the Committee rose; and the Speaker pro tempore (Mr.
Altmire) having assumed the chair, Ms. Baldwin, Acting Chairman of the
Committee of the Whole House on the state of the Union, reported that
that Committee, having had under consideration the bill (H.R. 5818) had
come to no resolution thereon.
____________________