[Congressional Record Volume 155, Number 13 (Thursday, January 22, 2009)]
[House]
[Pages H475-H476]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  TARP: MORE OF THE SAME BAD POLICIES

  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, the House of Representatives has spoken. We 
just disapproved sending out the next $350 billion through the 
President to Wall Street. Of course, since the Senate does not agree, 
the taxpayer money will go out the door again, to the U.S. Treasury, to 
be used however the U.S. Treasury Secretary sees fit. Too bad. Indeed, 
tragic for our people.
  They say the definition of insanity is doing the same thing over and 
over again, expecting a different result. Yet, that is exactly what is 
being done as we ship out the next $350 billion of taxpayer money to 
Treasury to cover Wall Street's paper losses.
  When will we have wise leaders who rise and understand that unless 
the mortgage foreclosure crisis tide is turned back, Wall Street will 
not heal. We must heal Main Street's mortgage real estate markets 
first. Congress is looking out of the wrong end of the telescope.
  In the fall, some in Congress sent out the first $350 of taxpayer 
money, hastily crafted, for a completely opaque bailout ``plan'' that 
proponents argued would stabilize our economy. Has that happened? 
Yesterday, the Dow dipped below 8,000. Last month's foreclosure filings 
were up 40 percent from the previous year. And nearly 700,000 more jobs 
were lost last month alone.
  Our economy is still suffering, with more jobs lost every day, while 
the promise of the bailout has been broken. The bailout money was given 
through a hasty process, without enough thought, without any 
guidelines, and the proper Federal regulators to do the job. The 
Federal Deposit Insurance Company, the Securities and Exchange 
Commission, and HUD, were sidelined as Treasury was moved into the 
driver's seat.
  Taking advantage of Treasury's boon, Wall Street's gambling casinos 
used the money to buy up other banks to build up their reserves and get 
bigger, rather than unfreezing credit so that local markets could work, 
or engaging in foreclosure workouts, which is the real congressional 
intent of the original bill.
  U.S. Treasury nominee, Tim Geithner--he is the gentleman who didn't 
pay his taxes--noted in his confirmation hearing that there were 
serious concerns about transparency, accountability, and the goals of 
the bailout program. But he didn't say how he was going to fix it.
  How does the administration even know that it needs $350 billion more 
if it hasn't audited and doesn't know what happened to the first $350? 
Where did that money go?
  Congress is taking the lazy man's way out, shirking the immense 
responsibility to appropriately and thoughtfully guide how the money is 
spent, ensuring our taxpayers' money is being used prudently.
  When Secretary Paulson pushed for this additional bank bailout, he 
said, Well, the government might recoup some of its money. But now the 
truth becomes clearer. The Congressional Budget Office estimates that 
of the first $247 billion in bailout payments made just through last 
December, they are saying taxpayers already will end up footing over 
$64 billion, or 26 percent, of the bill. That is just where we are 
today.
  So if we are on the hook for paying 26 percent of the first tranche, 
should the people paying the bill not be the beneficiaries of a 
comparable share of the total funds to do mortgage workouts at the 
local level? That would be about $180 billion. But the bill that passed 
the House last night commits as little as $40 billion to foreclosure 
workouts. In other words, the bottom line really doesn't add up.
  The Treasury has been inappropriately charged with restoring the 
health of our markets. But their job is to sell U.S. debt on Wall 
Street and to collect our taxes. They really aren't designed to do bank 
regulation or examination or real estate lending or housing workouts or 
real estate accounting. That is

[[Page H476]]

the job of the FDIC, with its bank examiners; and the SEC, with its 
accountants; and the Department of Housing and Urban Development.
  America cannot really afford to pay this next $350 billion, just as 
we didn't pay for the first tranche. We borrowed it all. And we don't 
know if the Senate will take up the bill that the House passed last 
night to give some guidance on how those original dollars are to be 
spent.
  So we know one fact is certain: Wall Street sure has a lot of power 
down here in Washington to put at the foot of the taxpayers the bill 
for all of their wrongdoing. Congress should not have sent out another 
$350 billion.
  But what the gambling houses on Wall Street did was create money 
recklessly by leveraging mortgages way beyond what the underlying asset 
could return. And those banks are so powerful and arrogant and they 
breed such special relationships inside our Federal Government, they 
are not only spared the discipline rules of the market we must all live 
by, they are spared prosecution so far. They are so powerful, they 
repeatedly abuse their power, and then run to us, the taxpayers, about 
every 10 years, to bail them out of their excesses.
  Wall Street banks do have special pull here in Washington through the 
Treasury and the Federal Reserve, their campaign contributions, and the 
revolving door between Washington and New York which, unless you have 
lived here, you really can't understand.
  They consistently enrich themselves by indebting the American people 
for their excesses. They have committed crimes much larger than the 
last excesses this time from the old savings and loan crisis of the 
1980s and 1990s, and they put those losses on the American people too, 
and it became the third largest component of our long-term debt.
  The Wall Street bankers, meanwhile, make plenty of money enriching 
themselves. You know what? They win on both ends because they end up 
selling the U.S. Government debt through bonds that they issue. It's a 
win-win for them and it's a loss-loss for us.
  I just want to say, Mr. Speaker, in closing, that we should use the 
proper agencies to restore rigor to our market--the FDIC and the SEC, 
with their examination powers and their accounting powers--and we 
shouldn't just put the money down the blind hole at the U.S. Treasury 
that leads directly through a tunnel to Wall Street.

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