[Congressional Record Volume 154, Number 175 (Monday, November 17, 2008)]
[Senate]
[Pages S10544-S10545]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            ECONOMIC CRISIS

  Mr. INHOFE. Mr. President, given the recent news about Secretary 
Paulson's execution of the TARP program, I firmly believe action is 
required by Congress. This morning, I introduced S. 3683. That is 
legislation that would do two things. It would freeze remaining money 
of the first $300 billion that has not already been expended and, 
secondly, it would change the process by which Secretary Paulson would 
access the second $350 billion.
  When Secretary Paulson first came to the Senate and explained his 
plan, it was on a conference call. I happened to be in on that 
conference call. It was September 19. At that time, he was talking 
about the crisis that is upon us, that we have to do something, we have 
to do something big. It has to be $700 billion. It has to be done right 
now. The only way to do it is to buy troubled assets.
  At that time, I asked some questions. One question was: If there are 
assets that are going to be bought, what is the criteria that will be 
used to determine which assets should be bought? There was not an 
answer to that question.
  The second question was: Which institutions that are holding these 
assets would be the ones that would be eligible for this buyout? There 
were no answers to that question either.
  That was on a Friday. Then as the next few days went by, we had 
several conversations. I didn't have any personal conversation with him 
except in one conference lunch, and that is, Is this the only way to do 
it? Yes, it is going to be buying out troubled assets. Still the 
answers were not there to those questions.
  In my statement opposing--I voted against the Paulson plan last 
month--

[[Page S10545]]

in my statement opposing it, I laid out three primary reasons I voted 
no. The first is that I was not convinced that the asset purchase 
program was the right way to do this. Apparently, he didn't think so 
either because that is not what he did.
  The second is that it would lead to increased lobbying for handouts 
and bailouts by any industry facing financial trouble. Now we are 
seeing that. We are seeing the auto industry coming in, some insurance 
companies and others coming in. It is kind of a new way of life: If you 
are not successful, don't worry about it because you have the Federal 
Government there to help you.
  The third is that we were handing over, as I read it--and I don't 
blame Secretary Paulson for this because I suppose if this is what he 
wanted, somebody else was willing to put it together. He was not the 
one, I suppose, who drafted it. But it gave one person, in this case 
Secretary Paulson, the sole authority over $700 billion.
  I have a hard time with big numbers, putting them into perspective 
that is understandable. But it is my understanding that there are 139 
million American families who file tax returns. If you do your math, 
this would be $5,000 per family. We are talking about any family out 
there who files taxes. This is a huge thing. So it does require 
extraordinary thought in addressing it.
  As I stated at the time, my vote was against the Paulson plan, not 
against taking action to provide necessary confidence in financial 
markets. I do know and agree that there is a problem out there. I am 
not convinced that is the way to address it.
  We critics were right. On October 14, in a significant shift, 
Treasury outlined a plan to directly purchase equity stakes in major 
financial institutions. The Wall Street Journal noted that ``critics . 
. . say Treasury should have formulated a comprehensive plan earlier in 
the crisis.'' This past week, Secretary Paulson announced that he has 
completed a remarkable about-face, as summarized by the November 13 
Investors Business Daily front-page headline which read: ``Major 
Reversal, Treasury Won't Buy Bad Mortgage Debt.'' This is a complete 
reversal. Why did Paulson reverse course? Last Thursday's Los Angeles 
Times provides the answer:

       Treasury Secretary Henry M. Paulson's decision to abandon 
     plans to buy troubled bank assets shows that he has come to 
     two conclusions about what was once the chief focus of the 
     government's $700-billion bailout: The first is that it 
     wouldn't work.

  That is kind of full circle. This is what we thought at the time, and 
this is where we are today. I know many have serious concerns about how 
Secretary Paulson has executed the financial rescue program, and I 
share those concerns. Congress completely abdicated its responsibility 
by signing a truly blank check.
  If we look at this and if we read it, there is nothing in there that 
says we have to do this. Never before in the history of America has 
anyone--elected or, in this case, unelected--been given a blank check 
or a check in the amount of $700 billion to do with as he wishes. It 
has never happened before. It is unprecedented. But that is exactly 
what happened.

  Now we are faced with a lameduck session. We can do something about 
resolving this problem now, and that is supporting and passing the 
legislation I introduced this morning. It is officially introduced. I 
believe I requested it be sent to the Senate Banking Committee. I am 
sure there are several there who want to resolve this problem before we 
recess.
  My concern is this: The way it is set up by law, there is $350 
billion already out there, and he has been spending that money. 
Frankly, I don't know how much has already been spent. There was an 
article in the Wall Street Journal a couple of days ago that said all 
but $60 billion has been spent. That may be true; it may not be true. I 
have no way of knowing. That alone is enough concern that a senior 
Member of the Senate doesn't even know how much of the taxpayers' money 
has been spent or what percentage of the $350 billion has been spent.
  We have a second $350 billion to make up the $700 billion that will 
come, but it is rather nebulous, it is rather vague as to how that 
would be put into the hands of Secretary Paulson. My interpretation is 
that he would indicate, yes, we do need to have the second $350 
billion, and if there was not a resolution to stop that, to preclude 
that from happening, then he would be able to do that.
  My concern is that we will stall around and do nothing. We will 
adjourn and not come back until January. That would give him the 
opportunity of stating his intention, what he wants to do, and then 
have 15 days go by when we are not even in session. I think the only 
way to do this is to do it the way we are planning to do it now; that 
is, to bite the bullet.
  I know it is difficult. It is difficult for members of any body, 
particularly the Senate. This legislation, as I recall, passed 75 to 
24. Those of us who are among the 24, who voted against it, are fine in 
terms of doing something such as this, but at least a third of those 
who voted for it would have to say he didn't do what he said he would 
do, he didn't buy the troubled assets. Therefore, that gives me reason 
to change. I can't help but think that at least half or even more of 
those who voted for this legislation would find themselves in that 
position. When we look at where we are today and see that there is 
something that can be done, I think it is necessary that we go ahead 
and do it. One of the things that is going on now--and this bothers me 
a little bit--is that there is an argument going on right now between 
some of the committees--the Finance Committee and the Banking 
Committee--as to who has jurisdiction. Then there is a debate as to 
whether a special inspector general should be appointed, and they have 
talked about some names. If they do that, confirmation probably would 
not take place for another couple months. By that time, all the money 
is gone. So we are sitting around twiddling our thumbs doing nothing. 
Our last shot to do something is to do something while we are here. 
This lameduck session, I suspect, is only going to last 3 or 4 days. So 
we have that length of time to stop this from happening.
  If the American people are concerned about this, concerned as I am 
and as many Members of this body are, that this was done without the 
consideration it should have had, this amount of money, $700 billion is 
out there now in the hands of one person to do with as he wishes, that 
is not good Government and it needs to be stopped. We can stop it by 
the passage of the legislation I introduced this morning.
  Again, it will do only two things. It will preclude and freeze any 
further expenditure by the Secretary of the Treasury and, second, it 
would preclude the second $350 billion from coming up for 
consideration. In other words, that would stay in the Treasury. I think 
this is the only chance we have to get it done. We better do it now or 
it is going to be too late and we will be out of here and it will be 
history by the time we come back at the end of January.
  With that happy note, Mr. President, I suggest the absence of a 
quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. WEBB. Mr. President, I ask unanimous consent the order for the 
quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Cardin). Without objection, it is so 
ordered. The Senator from Virginia is recognized.

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