[Congressional Record Volume 154, Number 123 (Friday, July 25, 2008)]
[Extensions of Remarks]
[Page E1563]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               HOUSING AND ECONOMIC RECOVERY ACT OF 2008

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                               speech of

                             HON. RON PAUL

                                of texas

                    in the house of representatives

                        Wednesday, July 23, 2008

  Mr. PAUL. Mr. Speaker, for several years, followers of the Austrian 
school of economics have warned that unless Congress moved to end the 
implicit Government guarantee of Fannie Mae and Freddie Mac, and took 
other steps to disengage the U.S. Government from the housing market, 
America would face a crisis in housing. This crisis would force 
Congress to chose between authorizing a taxpayer bailout of Fannie and 
Freddie, and other measures increasing Government's involvement in 
housing, or restoring a free market in housing by ending Government 
support for Fannie and Freddie and repealing all laws that interfere in 
housing. The bursting of the housing bubble, and the recent near-
collapse in investor support for Fannie and Freddie has proven my 
fellow Austrians correct. Unfortunately, but not surprisingly, instead 
of ending the prior interventions in the housing market that are 
responsible for the current crisis, Congress is increasing the level of 
Government intervention in the housing market. This is the equivalent 
of giving a drug addict another fix, which will only make the necessary 
withdrawal more painful.
  The provision giving the Treasury Secretary a blank check to purchase 
Fannie and Freddie stock not only makes the implicit Government 
guarantee of Fannie and Freddie explicit, it represents another 
unconstitutional delegation of Congress' constitutional authority to 
control the allocation of taxpayer dollars. While the Treasury 
Secretary has to file a report with Congress, the lack of any effective 
standards for the expenditure of funds makes it impossible for Congress 
to perform effective oversight on Treasury's expenditures.
  H.R. 3221 also takes another troubling step toward the creation of 
surveillance state by creating a Nationwide Mortgage Licensing System 
and Registry. This Federal database will contain personal information 
about anyone wishing to work as a ``loan originator.'' ``Loan 
originator'' is defined broadly as anyone who ``takes a residential 
loan application; and offers or negotiates terms of a residential 
mortgage loan for compensation or gain.'' According to some analysts, 
this definition is so broad as to cover part-time clerks and real 
estate agents who receive even minimal compensation from 
``originators.'' Additionally, this database forced on industry will be 
funded by fees paid to the Federal banking agencies, yet another costly 
burden to the American taxpayers.
  Among the information that will be collected from loan originators 
for inclusion in the Federal database are fingerprints. Madam Speaker, 
giving the Federal Government the power to force Americans who wish to 
work in real estate to submit their fingerprints to a Federal database 
opens the door to numerous abuses of privacy and civil liberties and 
establishes a dangerous precedent. Fingerprint databases and background 
checks have been no deterrent to espionage and fraud among governmental 
agencies, and will likewise fail to prevent fraud in the real estate 
market. I am amazed to see some members who are usually outspoken 
advocates of civil liberties and defenders of the fourth amendment 
support this new threat to privacy.
  Finally, H.R. 3221 increases the Federal debt limit by $800 billion. 
We are told that CBO has scored this bill at a cost of $25 billion, but 
this debt limit increase belies that. The Federal Reserve has already 
propped up the housing and financial markets to the tune of over $300 
billion, and this raise of the debt limit indicates that the cost of 
this newest bailout will likely be even more costly. I am dismayed that 
my colleagues have not learned the lessons of the PATRIOT Act and 
Sarbanes-Oxley. Massive bills passed in knee-jerk reaction to crisis 
events will always be poorly written, burdensome and expensive to 
taxpayers, and destructive of liberty.

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