[Congressional Record Volume 155, Number 8 (Wednesday, January 14, 2009)]
[House]
[Pages H301-H302]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


         HERE WE GO AGAIN: THE SECOND HALF OF THE BANK BAILOUT

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentlewoman from Ohio (Ms. Kaptur) is recognized for 5 minutes.
  Ms. KAPTUR. Mr. Speaker, I rise this evening to warn America that 
here we go again. Wall Street, the Bush administration, the chief 
executor of Goldman Sachs Hank Paulson, who in his spare time sells 
U.S. debt to China and Saudi Arabia as our Treasury Secretary, are 
asking to get their hands on the second half of the $700 billion bank 
bailout.
  Last fall the administration and Wall Street's chief cheerleader 
Treasury Secretary Paulson scared Congress into adopting the first 
round of Wall Street

[[Page H302]]

bailout money. They called it the TARP. Some people would call it the 
``TRAP.'' That was adopted without hearings, without debate or 
amendments, and without proper justification, safeguards, or oversight. 
Fortunately, the Secretary of Treasury abandoned the intended purchase 
of troubled assets and has used the money instead to purchase capital 
in banks; so banks are buying banks now. But that funding should have 
gone to the Federal Deposit Insurance Corporation to purchase the 
capital rather than Treasury. He didn't use the money to do anything 
about the central part of the problem: mortgage workouts, the 
foreclosure crisis.
  So why do we now have a proposal here to give the Secretary of 
Treasury another $350 billion to spend on only God knows what? The bill 
says that $40 to $100 billion, and that's a $60 billion spread, my 
friends, is intended for some kind of foreclosure relief but doesn't 
specify how it's to be accomplished. Congress's job is to specify. Is a 
$60 billion swing between those two numbers the best we can do in 
estimating the cost of this program? What is the remaining $250 billion 
to $310 billion to be used for? Who decides? Just Treasury? If we are 
going to continue putting capital into financial institutions, 
shouldn't we at least order the Securities and Exchange Commission to 
stop destroying capital through market value accounting? What an 
opportunity for the special interests on Wall Street to take control 
when no one here seems to be in control, 6 days before our new 
President is sworn in.
  Today, trying to correct the huge inadequacies of this bill, I went 
to the Rules Committee to prevent more damage and outright financial 
crimes associated with this, and I asked for two amendments, and both 
were denied.
  The first amendment would have suspended any more money being 
expended from the first $350 billion, if there's any left, and would 
stop the next $350 billion until the Congressional Oversight Panel 
established in the original law has forensically accounted for each 
dollar of the original $350 billion. Why not examine the effects of the 
first $350 billion on the economy? Why not assess the effect of what 
the Federal Reserve policies in lowering their interest rates has been 
on our economy? That amendment, to follow the money, was denied. Now, 
here you have an agency that's selling trillions of dollars of our 
debt, and they're not telling Congress what they have done with $350 
billion?
  The other amendment that I offered would have increased oversight and 
strengthened the role of the Federal Deposit Insurance Corporation 
overseeing TARP funds. It would have provided for oversight by the FDIC 
directly into the boardrooms of the banks that are getting our taxpayer 
money. Don't we have a right to know what they're doing with it? The 
FDIC is the right agency to oversee that.
  So the Rules Committee denied me. I wasn't expecting they would 
approve it because this seems like a greased deal to me, but it 
shouldn't be a greased deal for the American people. Before we send 
another $350 billion out of the door, there ought to be some 
accountability here.
  The legislation that will be before us provides no plan to stop 
foreclosures, which is the root of the problem. In fact, there is 
nothing in there about renegotiation or holding the banks and the 
servicers accountable. The bill continues to do more of the same, which 
simply has not been working, but it gives all this power to Treasury, 
this secretive agency that isn't sharing anything.
  The legislation does not help homeowners to defend themselves against 
criminal acts of massive fraud being perpetrated against them by Wall 
Street banksters in processing foreclosures.
  The legislation continues to shift both the risk and the cost of the 
program off corporations and their boards of directors and their 
executives who perpetrated this scheme on the taxpayers. And the 
legislation does not address the root of the problem: foreclosures 
themselves. So it will be just as ineffective on Main Street as the 
first round of TARP in addressing the core problems.
  Truly TARP is a trap.
  Mr. Speaker, I would like to place in the Record additional comments 
about the impact, sadly, of the original bailout bill on my district 
and end with saying the intent of TARP was to stabilize our financial 
system, which means our housing industry. It's not happening, and we 
shouldn't give them more money.


                            recommendations

  This bill is not correcting the root of the problem and will not 
achieve the goal of preventing foreclosures and keeping people in their 
homes. There are many effective foreclosure prevention strategies being 
deployed by attorneys and advocates and we need to translate these into 
systemic solutions.
  This Congress must embark upon a full investigation of how the 
``Shadow Banking Sector'' created by the Wall Street Investment Banks 
post-repeal of the Glass-Steagall Act (Gramm-Leach-Bliley) constructed 
a private money-creation system that in 10 short years equals or 
exceeds the assets of all regulated banks nationwide.
  In short, there are solutions. We need a consumer-centric model. What 
we have now is so creditor-centric it will eventually lead to a 
complete collapse because consumers/taxpayers cannot handle the burden.


                  OHIO'S NINTH CONGRESSIONAL DISTRICT

  My district has been hard hit by the foreclosure crisis. Last year, 
in my home county of Lucas, another 4,100 homes were foreclosed, part 
of the 10 percent of my district's local housing stock that has been 
lost over the last 2.5 years. As foreclosure rates continue to rise in 
Ohio and across our Nation, it's pretty obvious that the Federal 
responses, such as the $700 billion Troubled Asset Relief Program 
(TARP) rescue, are not working on the Main Streets of our communities.
  The intent of the TARP bailout was to help stabilize our financial 
system, which includes in large measure our housing industry. Yet, we 
see financial institutions foreclosing on families rather than working 
to stabilize families in their homes. A stable home permits people to 
focus on obtaining and maintaining employment, purchasing food, and 
contributing to society in positive ways rather than relying on social 
services funded by State and Federal dollars. Furthermore, we see 
communities falling apart. Community members and local banks are 
effectively locked out of the opportunity to bid on these properties 
and reinvest in themselves because monies from the Department of 
Housing and Urban Development which would allow community banks and 
members to purchase foreclosed homes have not yet arrived. We all know 
that you are more likely to do something for your neighbor than for 
someone you do not know across the country. Too often, Wall Street's 
actions engage out of town developers and investors who purchase homes 
anywhere they can, not just in their hometown--without any connection 
to the people and the community. This situation cannot continue.
  We have the opportunity to direct positive change to restore our Main 
Streets and communities.

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