[Congressional Record Volume 155, Number 17 (Wednesday, January 28, 2009)]
[House]
[Pages H764-H770]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       AMERICA'S FINANCIAL CRISIS

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 6, 2009, the gentleman from Missouri (Mr. Akin) is recognized 
for 60 minutes as the designee of the minority leader.
  Mr. AKIN. Mr. Speaker, I appreciate your patience in working with us 
here and allowing us to have this time to talk about something which is 
a very important and serious topic which has captured the attention, I 
believe, of most Americans: the work of the House of Representatives in 
Washington, D.C., today on the floor of the House. We have in a way 
created history here in a unique way.
  We have heard for the last 6 or 7 years, depending if you are talking 
about the war in Afghanistan or the war in Iraq, about the tremendous 
costs of these two wars, particularly the war in Iraq. Year after year 
we hear from all different sources, all different political stripes, 
that these were very, very expensive wars. And yet, if you were to add 
up the total cost of the war in Iraq over the past 6 years and add that 
to the cost of the war in Afghanistan for the last 7 years, adding 
those two numbers together, in one fell swoop this afternoon we spent 
more money than that, in excess of $800 billion.
  I want to repeat that, because this is a fact that I think people are 
starting to add it up and say this is what is going on, but I don't 
know if that has sunk into people's minds:
  Today, on this floor, we voted on a bill which will spend more money 
than the war in Afghanistan and the war in Iraq added up.
  Now, how did we get to this strange position where we are so 
concerned about our economy, so concerned about deficits, so concerned 
about the government overspending? We have heard that from both 
political parties for some period of time. How do we get to the point 
where, in one fell swoop, we just passed $800-plus billion?
  Well, in order to try to put that in perspective, what I am planning 
to do tonight, and I am going to be joined with a number of my 
colleagues of very great reputation from all over the country; what I 
am going to be doing tonight is talking about how this developed, what 
is the nature of the problem, how did it occur; and then, how do we 
scope how big the problem really is, and what are the natures of the 
different ways that people might want to solve the problem?
  The bill that we passed today was theoretically to solve a problem, 
and so let's go back just a little bit and say, how did we get into 
this particular mess that we are in?
  Well, it goes back quite a ways to the Jimmy Carter years when we 
created various programs to try to help people to be able to get loans 
on houses, people that lived in areas where certain particular 
geographic areas were hard to get loans. And so the Carter 
administration put together the Community Reinvestment Act, and it was 
originally saying that when we are doing these different home loans, 
that we need to have some mechanism so that we can create some way for 
people that live in some more difficult areas to get loans in, for them 
to try to be able to get loans. I would suppose you would call it the 
economically disadvantaged areas. Well, that was under the Carter 
years.
  Now, when we move forward in time, under President Clinton what was 
done was it changed this Community Reinvestment Act and it said that 
and it increased the percentages of the loans that had to be made from 
a banker's point of view to people who were not as good risks. In fact, 
it demanded that there were loans made to people who were just flat a 
bad risk and very likely would not be able to pay the loan.

                              {time}  1945

  At the same time in the 1970s, we created Fannie Mae and Freddie Mac, 
and these were two quasi-governmental agencies, and the purpose of them 
was also to provide loans for people in the sort of middle-income type 
bracket of housing so they could get loans at a reasonable rate. So 
Freddie and Fannie were born. They were really not quite government and 
they were not quite private. They were in the in-between zone, and they 
started more and more to make real estate loans, to the point that a 
few years ago when Freddie and Fannie got into trouble, more than half 
of the home loans in America had been made through Freddie and Fannie. 
So they had grown over the years to tremendously large quasi-
governmental organizations.
  What happened under the Clinton administration was Clinton forced 
Freddie and Fannie to take a whole lot of loans, loans that were not 
going to be very good loans, and he said you have to take them along 
with the other loans that you are taking. So the government, as a 
matter of policy, forced Fannie and Freddie to make loans to people who 
were going to have a hard time for some of them to pay back.
  This starts to go along at the same time with Greenspan reducing the 
interest rates, so there was a whole lot of money available for people 
to put into houses. And probably many realize now when we talk about 
2001, 2002, everybody's home values were going up like a skyrocket. 
Everybody was happy as their house was getting more and more valuable. 
Just in the 2000s alone, they doubled. And many people took secondary 
loans on their homes.
  So this easy money in combination with the fact that you have now got 
all of these different speculators jumping into this housing market, 
and what happened was because of the fact that Freddie and Fannie were 
playing very, very loose with their rules and regulations, were taking 
loans. And they wouldn't ask anybody how much money they made. And they 
wouldn't ask whether they were able to pay or whether they were going 
to make a downpayment. They said, you want a loan, fine, we will give 
it to you, because the assumption was that you and I and the American 
taxpayer would back these Freddie and Fannie loans. But more and more 
loans were being made to all kinds of people, including speculators, 
where there was no way they would be able to pay those loans back.
  So as the housing bubble burst. All of a sudden these loans started 
coming due and people were defaulting on their loans, and there were 
cries of crisis on Wall Street.
  An additional fact that was going on here, you have the rating 
agencies, one of them is known as Standard & Poor's

[[Page H765]]

and the other was Moody's, and I believe there was another major rating 
agency, what they would do, they would look at all of these loans that 
came to them, and they would rate them as to how good the loans were. 
Well, they wouldn't be asked to do any rating if they rated the loans 
not very good, so these loans were all rated AAA. That means this is 
good stuff, you can afford to invest in it.
  So these loans were sliced and diced. They were sold all over the 
world, and many different banks and institutions held these loans on 
their books as an investment.
  Well, what started to happen, these investments became of no value. 
People couldn't pay the loans. They started to realize what had 
happened was there was an absolute runaway on the loan process and the 
people that had gotten the loans didn't really have jobs and couldn't 
really pay off the loans. And so you started to have all of these 
mortgage-backed securities started to seize up, and the entire credit 
market started to seize up.
  That was last fall, and it was that time when Secretary Paulson 
approached Members of Congress and said we have a huge crisis on our 
hands. It is a disaster, and what you all have to do is you have to 
give me $700 billion. And I would like it in a brown paper bag in 
unmarked currency, and I would like it in a hurry, too, please. A lot 
of congressmen were going: $700 billion? So you have the cycle of the 
first bailout.
  Today we come to the second. We have already spent $350-plus billion 
of that $700 billion, and people could argue whether it has had any 
significant effect. Certainly it was not spent in a transparent way. 
Most people don't know if we got anything for our money, but it was a 
tremendous amount of money that was spent.
  So today we come to the floor with the economy still in bad shape. 
Why is it in bad shape? Well, it is in bad shape for a couple of 
reasons. First, of these bad loans, only about half of them have come 
down and different institutions have had to write them off. There is 
still another half of what are called Alt-As or ARMs, there are two 
different kinds, that will probably also in the next 2 years be 
defaulting as well. So we have only drunk about half of the cup of 
poison of bad loans that were created by liberal policies and an 
unwillingness to regulate these quasi-governmental agencies.
  I would like to call to your attention a New York Times article, not 
exactly a right-wing oracle, and this article is dated September 11, 
2003. It says, ``New agency proposed to oversee Freddie Mac and Fannie 
Mae.'' So it wasn't like everybody was asleep at the switch. People 
were starting to wake up in 2003 that Freddie and Fannie were out of 
control.
  The beginning of this article, ``The Bush administration today 
recommended the most significant regulatory overhaul in the housing 
finance industry since the savings and loan crisis a decade ago.''
  The Bush administration called on Congress to get these wild and 
woolly loans under control. And so what happened? Well, the Republican 
Congress passed a bill to do what the President was asking for, to put 
much tighter regulations on these loans so we are not making a whole 
lot of loans that are not going to be paid and create a huge crisis as 
the savings and loan crisis of a decade ago.
  Here is an interesting quote in the same article, September 11, 2003. 
``These two entities, Fannie Mae and Freddie Mac, are not facing any 
kind of financial crisis.'' Who said that? Well, ``said Representative 
Barney Frank of Massachusetts, the ranking Democrat on the Financial 
Services Committee.''
  Who is it that is overseeing this bill that we passed today? It is 
one and the same.
  So in 2003, the Democrat Party, the Democrat ranking Financial 
Services Committee chairman, he is saying that Freddie and Fannie are 
not facing any kind of financial crisis. Now there are people who want 
to say that the economic problems that we are facing show that 
capitalism isn't any good. This has nothing to do with capitalism. This 
has everything to do with the practice of telling financial 
organizations that you must make loans that we know are going to fail. 
That is not a very smart thing and is not looking very smart now, but 
this is where we were in 2003.
  And the article goes on to say that the opposition to the bill that 
we passed in the House and Senate was the Democrat Party, and the bill 
was not passed because we didn't have 60 votes, and so we didn't 
oversee Freddie and Fannie until the train wreck actually occurred.
  So how did we get into the crisis? Well, the simple answer is we got 
into the crisis because we started to demand that financial 
institutions accept and make loans to people that really couldn't 
afford to pay for them.
  Now that raises an interesting question. How compassionate is it, how 
compassionate is it really to be making loans to some family that can't 
afford their mortgage payments? You have a mom and dad and some kids in 
some house, and they start arguing and fighting because the mortgage 
payment is too much for them. And so they get the credit card and the 
credit card has a high debt level. And so they start to say you 
shouldn't have spent money because we have this big loan. So how is it 
compassionate to put someone in a house they can't afford? Yet that is 
what we were defending and doing, and that is what caused this 
financial problem.
  Now the interesting thing is that people say when America catches 
cold, the world catches pneumonia. And so this little oversight in 
assuming that the American taxpayer was going to bail out loans that 
were made irresponsibly has had worldwide implications and has caused 
all kinds of trouble in major Wall Street corporations closing up, and 
banks hunkered down worried about more of these loans that are going to 
be coming due in the next 2 years.
  People are very mad at the banks. They say we gave you all of this 
bailout money. Why aren't you using it to get the financial service 
markets up and going? The answer is because we are afraid that when the 
rest of these things come down, we are going to need this money to 
cover all of the bad debts that are made.
  So that is really the nature of where we are. This is something that 
is a result of active decisions on the part of people in Congress who 
are supposed to be, among other things, responsible for keeping an eye 
on our currency and the solvency of our economy, and we just basically 
have ignored what was our responsibility.
  Now this is not something that you can dump at the feet of 
Republicans. The President, and once again I want to read this, this 
was 2003, the article says, ``The Bush administration today recommended 
the most significant regulatory overhaul in the housing and finance 
industry since the savings and loan crisis a decade ago.'' This was 
something that we saw coming and it was something that the other party 
was unwilling to deal with. So that is how we got to where we are.
  Now today, today we adopted spending over $800 billion. Now as I said 
before, $800 billion, it is hard for many of us to think about how much 
that is. But we have heard how expensive the Iraq war was, all these 
past 6 years: ``We can't afford this war in Iraq. We can't afford 
Afghanistan. That is bleeding us dry.''
  So now facing this crisis, what are the solutions we have because it 
seems like a very dire thing and it certainly is very serious, 
something that deserves our full attention. What are the different 
tools that we have to deal with this big mistake that we have been 
dealt?
  Well, there are basically two theories of economics, and one of them 
is called the Keynesian approach. It is older and has been around since 
the Great Depression. And the Keynesian approach says that the Federal 
Government needs to spend some money. If the Federal Government spends 
a whole lot of money, that will stimulate demand and people will want 
things and therefore somehow or other we are going to get out of this 
recession or depression if we just spend enough money with the Federal 
Government. Well, I guess that was an interesting thought when the 
budgets were closer to balanced.
  But if that were true, we have already spent way more money than we 
have as a country. We are already in debt. We should have a great 
economy if that theory were true because we have already been spending 
a whole lot

[[Page H766]]

of money. But that is the Keynesian approach. It seems by some degrees 
like the idea of grabbing your shoelaces and lifting up and flying 
around the room. If we just spend enough, everything will go okay. Can 
you imagine any American family that would dare to try such a strategy 
if they were in financial trouble with their family budget? Are they 
going to spend a whole lot of money and hope that it will make 
everything okay? I don't think so.
  History seems to indicate the same result. When FDR used that 
approach with the first big recession that came along, he turned it 
into the Great Depression. He spent a tremendous amount of money on 
public works projects, and some of them might have been useful, but the 
net result in the economy was that the recession just kept going year 
after year after year, and we called it the Great Depression.
  Now, he wasn't the only one who tried this. The Japanese tried this 
in the 1990s, and they basically had an entire decade of lack of 
productivity and complete stagnant economy in Japan because they did 
one massive spending bill after another thinking it was going to work 
to pull them out of a recession, and it just made matters worse and 
worse and worse.
  In contrast to that economic approach is another thing that is 
typically called supply-side economics, and that is the theory that 
government really cannot stimulate the economy at all.

                              {time}  2000

  The only thing the government can do is tax or not tax. And when it 
does tax, it can slop money around. But the government cannot actually 
create wealth whatsoever. It merely can take wealth away from citizens 
and redistribute it or refuse to take the wealth.
  Instead, the supply-side model suggests that the best way to deal 
with a recession is to try to allow the people who are the inventors, 
the investors and the various risk-takers and entrepreneurs, allow them 
to have money to spend on new ways of doing things to build 
productivity in America. Particularly targeted with this approach would 
be the small business people, because small business people provide 
about 80 percent of the jobs in America. So if you have small 
businesses going strong, people investing in new ways and better ways 
to do things in small businesses, obviously some of those ideas will 
succeed or fail. But the result is you drive numbers such as 
unemployment and the overall productivity of the economy. And this is 
called a supply-side model.
  We have had several examples of the supply-side approach. One of the 
earlier ones was done by JFK, who was a Democrat, of course. He did a 
major tax cut. And he did the tax cut in the right areas, and the 
economy snapped back and responded very favorably. He was followed 
another number of years later by Ronald Reagan, who did the same thing. 
He did a very large tax cut. But he made sure that the money got into 
the hands of the people that are going to be able to create the 
productivity. And we had a decade of fantastic financial success and 
productivity in America as a result of Ronald Reagan's tax policies. 
People made fun of it at the time. They scoffed at him. But the reality 
was that the economy was very strong.
  It was tried again just a few years ago when I was fairly new here in 
Congress, and that was in the second quarter of 2003. I have some 
charts here which show what happened. What we did in the second quarter 
of 2003, which is the vertical black line on a couple of these charts, 
what we did was, we reduced the taxes of capital gains and dividends. 
Now what that was calculated to do was to allow the people who were the 
small business investors, the small business owners and the 
entrepreneurs, it allowed them to keep more of their money that they 
earned and plow it back into the small businesses.
  And so what was the result of this particular tax cut in the second 
quarter of 2003? Well, as you can see, this is a picture of gross 
domestic product. Now we had done some tax cuts in the first couple of 
years of the Bush administration. But you can see that the gross 
domestic product averaged about 1.1 percent, but was also up and down. 
It was pretty spotty. What you see happening here then, as a result of 
dividends and capital gains where we are pumping money into the small 
business, into the investors, you see this tremendous increase in gross 
domestic product running out to 2007 of 3.06 as opposed to 1.1.
  Now this tax cut is set to expire before long. But you can see the 
impact of the supply-side model. We're not the only people who have 
tried this. The Irish did this. They dropped their taxes on businesses 
and small businesses, and Ireland has just been booming and is almost 
an exact opposite model of what happened in Japan.
  You might ask, well, what happened with this gross domestic product? 
That sounds like some sort of a boring government number. How about 
telling me something about jobs? This is the same time period. You have 
got May of 2003. These lines going down are job losses. The average 
loss of jobs per month was 99,000 jobs a month during these earlier 
years of 2001 and 2002.
  Now you take a look at when we do the dividends and capital gains and 
take a look at the jobs gained. We went from a loss of 99,000-plus jobs 
lost per month to a gain of 147,000 jobs gained per month. This is an 
example of the supply-side kind of model. What it is saying is that 
government should not be spending tons of money.
  Government should be cutting back what it's doing. And, in fact, what 
government should be doing is allowing productivity to take place in 
the marketplace and allowing the people that own small businesses to 
make those investments which result then in employment, and it results 
in better gross domestic product.
  But last of all, and this is kind of an interesting idea, take a look 
at the effect of Federal revenues. Now, it seems to almost make water 
run uphill when you say, hey, we're going to cut taxes. What would you 
expect would happen to Federal revenues? Well, you would expect the 
revenues to go down. If you lower the taxes, you're not going to 
collect as much money. But that is not what happens. Why is that not 
what happens?
  Well, this is actually the result of Federal revenues. Take a look at 
where they turned around. Again, the beginning of 2003 and after 2003, 
after these tax cuts went into place, Federal revenues are going up 
even though we cut taxes. Now how could that be? How could that happen? 
How could that be true?
  Well, think about it for a minute. Let's just say you are king for 
the day. And your job is to try and raise as much government revenue as 
you can to pay for the cost of government. And you're allowed to tax 
loaves of bread. Now you start to think in your mind, let's see, I 
could tax 1 penny per loaf and it would hardly be noticed. But then you 
start adding it up. And you say, I wouldn't get very much money that 
way.
  Then you think, a-ha, I will charge them $100 a loaf. By golly, that 
will get a lot. But if you tried it, you would say, no, what is going 
to happen is nobody is going to buy a loaf of bread if you have a $100 
tax on it. I will get something else instead.
  So common sense would say to tax somewhere between $100 a loaf and a 
penny a loaf. There is some optimum point where you adjust the tax and 
you are going to get the maximum amount of revenue.
  So what has happened here is that we have taxed our citizens so much 
money that when we reduce taxes, the result is the economy surges and 
we end up with actually more tax revenue, which is what actually 
happened here following 2003. So this is the other approach.
  There are two approaches. One is the Keynesian approach, spend tons 
and tons of money and somehow it is going to make everything better. Or 
the other one is, no, don't spend a lot of money. Let the money work in 
the hands of people that can be productive to build productivity, to 
build jobs, to build GDP and to allow the Federal revenues to increase.
  And so we have these two approaches. Now, today, we had to take a 
choice, which approach are we going to use? And it was a straight party 
line vote, at least from the Republican side. Not one Republican 
supported this Keynesian idea of just slopping a tremendous amount of 
Federal spending--the money that we don't have, by the

[[Page H767]]

way--as if that is going to fix this problem.
  So our problem with it is, it was very courteous of the President to 
stop and pay us a visit yesterday, talk to us about what he wants to do 
with the economy and plead with us not to make it political. And it is 
not our objective to make it political. But the President said, but if 
you think it's not going to work, that is a different matter.
  And so I stood up and talked to him. And I said, Mr. President, you 
have been very courteous talking with us today, but I think you made a 
couple of bad assumptions; and so my belief is that the package that 
you are proposing will not work. It is not only not going to work. We 
can't afford it, and not only can we not afford it, it's going to make 
matters worse; and here is why.
  And so today we had a choice. We had a choice between the Keynesian 
model of spending a ton of money or the other model, which we proposed, 
which was not to spend a whole lot of money, but make sure that the 
money gets back in the hands of the small businessman and to allow 
American productivity to take place.
  Well, as I said in my introduction at the beginning of my comments 
here tonight, what happened was we just passed an $800-plus billion. 
That is, once again, take all of the money for the cost of the war in 
Iraq, take all of the money for the cost of the war in Afghanistan over 
the past 6 and 7 years, and you put that together, and what do you end 
up with? You end up with the fact that this bill costs us more than all 
those wars. And that is on top of this big bailout from just a couple 
of months ago.
  Can our economy handle that? What that does is it puts us more into 
debt than we were during World War II. As a percentage of our overall 
budget, we're getting close to 10 percent debt, whereas in World War 
II, we were looking at 6 percent.
  I'm joined here by a good friend of mine, my colleague from just over 
in Iowa, just a State or so away from the great State of Missouri, and 
he is going to be joining us in just a minute to talk a little bit 
about his perspective on this absolutely incredible bill that we have 
just passed today.
  So I would yield to the gentleman from Iowa.
  If you would like to jump in here and tell me, what do you think 
about the fact that we just--I mean, I almost have to pinch myself, 
gentlemen, to think that just standing here a couple of hours ago, we 
just voted to spend $800 billion more than the cost of the war in Iraq 
and Afghanistan. There are other ways to look at that number.
  Would you like to jump in?
  Mr. KING of Iowa. I would like to thank the gentleman from Missouri 
for taking the lead on this and giving me the privilege to join with 
you here on the floor to say a few words.
  I would take that $825 billion, and I would add to that the number, 
which I believe is $347 billion, which are interest costs as we 
calculate here over the next 10 years; and it takes this cost to $1.1 
trillion plus another more than $1.1 trillion. And as I look at this--
and I heard some of the gentleman's remarks--I would just submit this 
question that I can only come to one conclusion when I ask it, and that 
is, what is the most colossal mistake the United States Congress has 
made in the history of America? And how would we measure that?
  Have they passed a policy that sends us down a path that we couldn't 
get back from? Have we declared an unjust war? Have we spent so much 
money or created so many government programs that there is no way to 
ever set up the politics to repeal them again, nor is there a way for a 
free-market economy to ever fund them? And has it done so much as 
diminish the independent spirit of the American people that they slow 
down or cease to produce?
  And I can come to only one answer on that. The most colossal mistake 
in the history of Congress that I can come up with in a quick 
inspection of my recollection of history is this mistake made today, 
this very idea that we can spend money, and we can spend our children's 
and grandchildren's money and, for all we know, our great-and great-
great-great grandchildren's money. There is no prospect of ever getting 
out of this debt. And the proponents of this, as it is described, 
``stimulus plan,'' neither will they predict a result that will come if 
they follow through on the spending that is designed.
  We know that a minimal amount of this money will be spent in this 
fiscal year or this calendar year. I think the number is 12 percent. As 
it happens it's a coincidental number. I remember it because there were 
some of FDR's programs that of the millions that were invested there 
during the New Deal, only 12 percent made their way actually to the 
ground into projects, and the balance of that, the balance of the 88 
percent was just sucked up and drained out for the cost of government 
administration and inefficiencies to come.
  One of the theories that I think has some validity to it, and I 
subscribe to it almost totally, and that is that if the private sector 
doesn't do it, chances are it is not a viable economic model. So how 
can government come along and take an unviable economic model and prop 
it up with the fruits of someone's productive labor--because that is 
what taxes are, they are the fruits of someone's productive labor--and 
drain them off and take them away from the producer and put them into 
government programs that have already been demonstrated not to work?
  And they can't describe for me an historic model of this Keynesian 
approach of being able to stimulate economy by massive government 
spending and show me the results. And the most obvious one is the Great 
Depression.
  Mr. AKIN. Of course, in the Great Depression, you took a recession 
and turned it into a Great Depression and it just kept going and going 
and going.
  Because what they are doing is they are vacuum cleaning all of the 
money out of the economy for Federal jobs programs, supposedly creating 
jobs and starving the very productive sector of the economy that could 
be solving the problem.
  Mr. KING of Iowa. And as an engineer, you understand this 
analytically. If the gentleman from Missouri were a trained economist, 
you might just understand it esoterically. For me, I understand it from 
the perspective of one who has started a business with no capital, a 
negative net worth. For 28 years, I ground my way through establishing 
a business in a free-market economy. And I made my living off of low 
bids in the construction business. We know what it's like to compete, 
but government doesn't seem to understand this.
  Look back at the track record of the New Deal in the 1930s. And I 
represent the State from which Herbert Hoover originated. He was a 
brilliant man. And I will defend him on a lot of fronts.

                              {time}  2015

  But his success, I think, at some point gave him a level of 
overconfidence where he started us down a path of Smoot-Hawley, trade 
protection, tax increases, and the barriers to free market that set the 
stage for FDR to be elected in almost the same scenario as President 
Obama was elected in an economic crisis situation.
  And then, we see almost the same scenario with President Obama as we 
have seen with FDR, create and grow huge government programs under the 
belief that there's going to be a solution there. And I would challenge 
this administration--now, maybe in the thirties FDR didn't have the 
model, he couldn't look back on the Great Depression and see where 
somebody else really went wrong. But I would challenge this 
administration to point to this Great Depression and show me where the 
New Deal actually did anything to help our economy recover. I'll say 
that can't be proven, even by the Keynesian economist, even by those 
people that voted for this classic boondoggle today.
  Mr. AKIN. If you allow me--
  Mr. KING of Iowa. I yield back.
  Mr. AKIN.--to just reclaim my time for just a minute, it seems that 
we have quite a number of different historic models to look at now 
where the Keynesian approach of big government spending has fallen on 
its face. It was not just the Great Depression, it was also Japan. And 
if you really want to say that, you could also quote America right now, 
because we have spent way more money than we should have spent, and yet 
our economy is not so strong. So if the theory is spend a whole lot of 
money you don't have, it

[[Page H768]]

should have worked by now because we've been practicing that more than 
I wish we had as a Republican conservative.
  And so there are models. And yet at the other end there are models 
showing what you're saying, that productivity of the businessman in 
America is what really works. It happened that productivity of 
businessmen in Ireland really worked very well. You could almost 
contrast Ireland and Japan using the two different approaches. And as 
you know, gentlemen, you've had the responsibility of meeting payroll 
and running a small business, the discipline that's required to do 
that. And you also have the satisfaction of seeing a worthwhile product 
that is added to the market and is there for some period of time 
because of the fact that you have enriched Americans through the work 
of your business.
  Mr. KING of Iowa. If the gentleman would yield. In the last visit I 
made to take a look at the economics in Ireland, they informed me that 
there were 560 American companies that were domiciled to do business in 
Ireland. Many of them were attracted there by a 10-year suspension of 
corporate income tax which the EU found to be a little bit too 
difficult to compete against, and so they used leverage and took it up 
to--I believe the number is 13.5 percent. But still, many foreign 
companies took their business and set their operations up in Ireland 
for the favorable tax scenario.
  Mr. AKIN. If the gentleman would yield, are you saying that 
originally Ireland was going to get rid of all income taxes on 
corporations to encourage them to locate there and to work their free 
enterprise magic there, if you would; is that what you're saying?
  Mr. KING of Iowa. Is the gentleman yielding?
  Mr. AKIN. Yes, I do yield.
  Mr. KING of Iowa. That the policy in Ireland some years ago, as I 
recall it, was that they would suspend income tax on a company that 
would move to Ireland for a period of 10 years, get them established 
and in order to track them. And it worked very well. And it turned 
something around that Ireland's greatest export 25 years ago were 
young, well-educated people. They would raise their children, send them 
off to school and college--many of them with graduate degrees--then 
they would go across the rest of the world to apply their trade because 
the economy in Ireland was a shrinking economy.
  And business and labor understood that you have to have profitable 
corporations or otherwise there won't be jobs for the skilled employees 
or the blue collars. So they came together in agreement, both the 
unions and business, to propose this policy which then was leveraged 
into--I'll call it a flat corporate tax by the EU's leverage that they 
used.
  I yield back.
  Mr. AKIN. Well, it's just a treat to have you here and to bring that 
free enterprise perspective that you have. And there is something that 
just seems kind of amazing to me in a way, the irony in a way, of the 
fact that this whole problem with the economy that we're dealing with, 
even now and for the last couple of years, is the result of people that 
were liberal Democrats unwilling to regulate Freddie and Fannie. And 
that's recorded right on the old New York Times. The President says, 
You've got to get these wild-and-woolly loans under control. They said 
we're not going to do it. And boy it hit the fan.
  And it seems to me there's an ironic twist that this quote that I put 
up earlier, the chairman, the current chairman of the Financial 
Services Committee--who is now tasked with getting us out of this 
problem--there's a certain irony in the fact that this is the guy that 
makes the quote, ``These two entities, Fannie Mae and Freddie Mac, are 
not facing any kind of financial crisis,'' said Representative Barney 
Franks of Massachusetts, the ranking Democrat on the Financial Services 
Committee. It seems ironic to me that he makes that statement, the 
whole top blows off everything, and now he's in charge of fixing this 
thing. The thing that concerns me is is the way he's going to fix it is 
going to make it worse. And what we've done here today is we've spent 
more money than we spent in Afghanistan and in Iraq over the last 6 and 
7 years, and we did it hardly with a blink of an eye.
  Mr. KING of Iowa. If the gentleman would yield.
  Mr. AKIN. Yes, I do yield.
  Mr. KING of Iowa. I thank the gentleman.
  And looking at the poster there of September 11, 2003, second 
anniversary of the attack on the United States, and then 2 years later 
and a few days, October 26, 2005, Congressman Jim Leach offered an 
amendment on the floor on a Financial Services bill that would have 
required Fannie Mae and Freddie Mac to undergo the same kind of 
capitalization requirements of other lending institutions and the same 
kind of regulatory requirements of other lending institutions. And the 
same individual, the chairman of the Financial Services Committee here 
today, came to the floor and right over here challenged that amendment 
and argued that no one was saying that Fannie and Freddie were in 
trouble, that they needed to be regulated, that there was a problem 
with their liquidity, that this was simply an attack on Fannie and 
Freddie, and he was successful in his debate. That amendment failed. 
And so you know that there have been several efforts in this Congress 
to try to bring Fannie and Freddie under a regulatory guideline by 
Republicans, fought off consistently by Democrats in this House of 
Representatives. And I yield back.
  Mr. AKIN. And of course the Democrats are in charge. They got 60 
percent of the votes today. They passed a really historic--it puts 
America into uncharted waters. And it was a very bold stroke on their 
part, but I'm arguing not as a Republican, but simply as an American, 
that the stroke that was taken is going to cause a whole lot of 
trouble.
  I really appreciate if you could stick with us. We are joined also by 
a very respected Congressman, Congressman Cassidy from Louisiana. And 
we're just delighted to have you here with us this evening and talking 
about some really boxcar size numbers, really some unprecedented times 
that we are going through here.
  And this particular solution that was passed today without any 
Republican votes in favor of it just makes the Marshall Plan look like 
child's play, even when you adjust it for current value of money.
  But Congressman Cassidy, please jump in. I yield.
  Mr. CASSIDY. You know, I was just kind of sitting in my office, kind 
of sitting there staring at the Capitol dome, kind of frustrated. And I 
came to Washington--I'm a freshman, this is my first talk--and I came 
not to oppose what Democrats do automatically because they're 
Democrats, I came to try and do something good for my country.
  And the remarkable thing is there is an incredible amount of 
agreement between the two parties. We agree the economy is in trouble. 
We agree that the government can do something to make it better. We 
agree that tax cuts and infrastructure can create jobs. And I'm sitting 
there thinking, man, we've got so much we agree on, why don't we just 
pull it together and pass a bill? And yet, where we disagree is whether 
or not discretionary spending--you know, stuff that doesn't create 
jobs, but folks want to get it--whether that should be included in the 
bill.
  And so I'm sitting there thinking, wait a second, we can consider 
that in a spending bill, why do we have to put it in this? And as a 
Republican, I have to say that I don't think we should, and I don't 
think we should for at least three reasons. First, we said we're going 
to have a bill that creates jobs, and this is about discretionary 
spending. The second thing that just kind of disturbs me, as you have 
spoken about so----
  Mr. AKIN. Congressman Cassidy, I think you're going pretty quickly 
here, and I think there may be some that aren't catching the 
implications of what you're saying.
  What you're saying is, this bill is not really stimulus at all, it's 
simply putting more money into things that we normally budget anyway. 
Is that what you're saying?
  Mr. CASSIDY. You know what this bill is like? When my wife sends me 
to Wal-Mart and tells me to buy bread and milk, and instead of coming 
home with bread and milk, I come home with CDs, I come home with DVD 
players, and I come home with all this stuff

[[Page H769]]

that actually I've had my eye on for a long time. And when she finally 
sends me to Wal-Mart, I get to get what I want. And yet, really what's 
important to my family is that I come home with bread and milk.
  Mr. AKIN. Excuse me to the gentleman. The parallel then would be, 
what we should be coming home with is not bread and milk, but jobs for 
the economy; is that right?
  Mr. CASSIDY. Exactly. And we should not be running up our credit card 
bill to get the DVD player and the iPod and that other stuff that is 
purely discretionary. You know, we have a credit card debt here which 
we're eventually going to have to address.
  And so, there are three reasons why I don't think we should do this. 
One, we said we're going to do a job bill and we're doing something 
more than that. Two, there's going to be a $1.2 trillion price tag on 
much of which is not related to job stimulation. And you know what the 
third thing is? I'm 50 years old, but I'm still kind of a young 
idealist. I thought those people at home heard ``a change you can 
believe in'' and ``yes, we can,'' and they thought that this was a new 
era of politics. And yet, if I may point out to the gentleman, it 
almost seems as if we've taken those two phrases, which hold so much 
promise, and we're making them out to be nothing but cheap political 
slogans. We say we're going to give you a job bill, and instead we give 
you a discretionary spending bill. We say we're going for jobs, and 
instead we go for that which is--maybe important, but certainly not 
related to job creation.
  Mr. AKIN. Could I reclaim my time on that point?
  One of the things that you might think of is, if you're talking about 
jobs, one thing that might occur to you is that, depending on what you 
call a small business, 50 percent of the jobs are companies that have 
less than 100 employees, or if you consider a small company bigger than 
that, 80 percent of the jobs in America are small business. So wouldn't 
you think, if you were really coming home--using your analogy with the 
bread and the milk, if you're really coming home with jobs for America, 
don't you think you would have some provision in there for particularly 
small businesses? And yet this bill, for every dollar in there for 
small businesses they've got $4 for seeding and sodding the Capital 
Mall. That seems like a weird set of priorities. And I see your analogy 
to the DVDs, and I would yield back to my good friend from Louisiana.
  Mr. CASSIDY. Yes. I think that, again, what we agree on is that tax 
cuts--particularly for individuals and small businesses--
infrastructure, that can create jobs. If we could just focus on that, 
we would have a bipartisan bill that all of America could sign onto, 
and no one would wake up and suddenly feel like there's been a bait and 
switch; rather, they would say this is what we asked for, this is what 
we've been given, now let's see the benefit.
  And as a personal observation of my very first speech, I would ask 
that we, as both parties, give the American people what we truly said 
we would as opposed to something which is more than we said we are.
  Mr. AKIN. Well, reclaiming my time, I believe the people of Louisiana 
are probably watching one of their newest sons with his experience on 
the floor. You know, there's something fresh about somebody coming in 
here that hasn't been, in a way, influenced by all of the pressures and 
everything that Washington may try to exert on someone. And it sounds 
to me like you're talking just plain old American common sense. And I 
think an awful lot of Americans don't want Republicans and Democrats 
and all that stuff going on, they want solutions to problems.
  What we have today is basically a 10-year-old shopping list that has 
nothing to do with real genuine stimulus because that has to come from 
the private sector. And this bill does everything to harm that because 
it's taking money out of the economy, it's spending money at an 
unprecedented rate. And I just think that you are so much on target and 
your common sense--obviously you may be new to Congress, but you're not 
new to what's going on in the world. And it's just a treat to have you 
here. I hope you will stick with us, and we will continue this as a 
little bit of a dinner table kind of conversation.
  I notice that we're also joined by a good friend of mine from 
Georgia, a medical doctor, someone that has already risen to be highly 
respected among Congressmen. And I would yield to the gentleman from 
Georgia.
  Mr. BROUN of Georgia. Well, I thank the gentleman for yielding.
  You know, Mr. Akin, as we dealt with this issue, I think there are a 
lot of Democrats around this country who want the same thing that we 
do, and that's jobs. But I think they've been sold a bill of goods by 
Speaker Pelosi and the liberal leadership in this House and in the 
Senate too, as well as what President Obama is promoting. Because, in 
my opinion, this bill is not going to create jobs.

                              {time}  2030

  It may create some government jobs, but, actually, as you said, what 
it actually does is take money out of the economy. It takes away from 
those who are producing and it gives to government. And what it does is 
it creates a bigger government that's not going to ever go away.
  This is a huge leap towards socialism in our country. To give my 
picture of this, this is a steamroll of socialism. It's a steamroll of 
socialism that's being forced down the throats of the American people 
and down the throats of most Democrats and Republicans alike in this 
House.
  Mr. AKIN. If I could reclaim my time for just a minute, those are 
strong words that you're saying, and yet there is an element of truth 
to what you're saying because, first of all, we're taking advantage of 
a crisis that people know is a crisis and we're exploiting the crisis 
to push a solution which is a big government solution. This money is 
being placed into places in the budget which once those things are 
jacked up, nobody is willing to touch. So basically what you're doing 
is you're taking these entitlement programs and you're inflating them 
and you're increasing the rate at which essentially the government is 
going to grow beyond the ability of the American taxpayer or the 
economy to finance it. Essentially, when the government gets that big, 
we start to think in terms of words like ``socialism,'' even though 
that's a strong expression.
  But I yield back. I just thought you were making some interesting 
points.
  Mr. BROUN of Georgia. If we were to engage in a colloquy, I would 
enjoy doing that if the gentleman will agree.
  I use those words not unguardedly because I see this as a huge leap 
towards socialism as a Nation. It's creating new government programs. 
It's creating new government jobs that don't have any sunlight to those 
programs, to those jobs. It expands programs that are already there.
  Some of the tax relief, I believe and hope the gentleman will agree 
with me, actually just furthers, through the refundable tax credits, a 
dependency upon government. My friend Star Parker wrote a book one time 
that she called ``Uncle Sam's Plantation.'' And what this does is it 
economically enslaves people, and that's what we see happening.
  I agree that this is strong, but I believe that it is appropriate. I 
believe it is absolutely correct because I see this as a huge grab of 
power away from the private sector, away from small business, small 
business that creates jobs. I see this as a huge grab of dollars from 
the producers to bring it here to Washington and put it in the hands of 
government so that they can dole it out as they please.
  I appreciate your leadership in bringing this to the floor tonight, 
but don't you think that the American people are wise enough that they 
can see really what's happening here? We all know that we have to do 
something about our economy.
  Mr. AKIN. Reclaiming my time, I think you've raised an interesting 
question, and I think the American public is probably watching this far 
more closely than a lot of Washington insiders may think. And when the 
American public understands the size and the scope of what we are 
dealing with, we're looking here, this bill is 33 percent larger than 
all of our spending on Social Security.
  Mr. BROUN of Georgia. This is the biggest grab of social spending, 
our biggest budget bill we have ever faced in the Congress, I believe. 
Do you know of any bigger?

[[Page H770]]

  Mr. AKIN. This is 33.4 percent more than we spend on defense in this 
country. There's a reason for us to have a sense of urgency and to use 
strong language. To me, this is a bridge to bankruptcy is the way I 
would put it.
  I yield to the gentleman from Georgia.
  Mr. BROUN of Georgia. I think you're exactly right, Mr. Akin. I think 
it is a bridge to bankruptcy. In fact, I believe in my heart, without 
question, that this is going to delay a recovery. I think it very 
potentially is going to force us into a deep depression in this Nation 
because of this so-called stimulus bill. I call it a nonstimulus bill 
because I don't think it's going to stimulate the economy.
  Let me ask you a question. I know in my office, I'm not sure we had 
even one call supporting this bill, and I think most offices got a lot 
of calls in their office.
  Mr. AKIN. Reclaiming my time, that's a good question. We received 
hundreds of calls. Almost all of them were completely against this 
massive, massive spending.
  I note, though, that we've also been joined by the very distinguished 
judge from Texas noted for his wit and his good common sense.
  Congressman Gohmert, I would yield to you if you have a comment that 
you would like to make.
  Mr. GOHMERT. I appreciate the gentleman's yielding. Obviously he was 
mistaking me for Ted Poe, but I appreciate the comments.
  Mr. BROUN of Georgia. Judge Carter too, Judge.
  Mr. GOHMERT. That's right.
  One of the things that really breaks my heart, though, about all of 
this, we can talk about it from a lofty level here in the second floor 
of the U.S. Capitol, but the truth is during the Bush terms of office, 
Republicans went from a time when they were the ones that balanced the 
budget in the 1990s, and they moved to a time when there was just 
euphoria. Yes, tax cuts happened, and as a result, record revenues just 
poured into the U.S. Treasury in greater amounts than ever before. It 
wasn't the tax cuts that were a problem. It wasn't the record revenue 
coming in. We, and it was before I got here, but we were spending too 
much money. In my first 2 years here beginning in January of 2005, we 
were spending too much money. It was a problem. We were not reining in 
money. And as a result, by November of 2006, people were sick of it. It 
was irresponsible, and it was so grossly unfair to our children and the 
generations to follow us, we got voted out of the majority. And 
Democrats talked about our irresponsible spending, that we were running 
up the deficit and it was so unfair to the children, according to the 
Democrats at that time. And the voters said, you're right, these 
Republicans have lost their way, get them out of the majority.
  And now here we've seen with the Democratic majority, about an 80-
vote margin in the House, a Democrat majority in the Senate, in a 
week's time, there has been $1.2 trillion in allocations above the 
budget. That's the same amount that all American income taxpayers will 
pay in for personal income tax for 2008. We'd have been better off 
telling everybody that paid individual taxes in America for the whole 
year you get all your money back.
  Mr. AKIN. Reclaiming my time for just a minute, what you were just 
saying is today--it wasn't quite the snap of a finger. It was 15 
minutes. It was a 15-minute vote. We spent the entire money that's 
going to be collected in tax revenue from America for the year 2008.
  I yield to the gentleman.
  Mr. GOHMERT. I appreciate the gentleman's yielding. When you add the 
$350 billion that was just last week, then that gets you there.
  But the thing is, as a judge, my friend Judge Carter, Judge Poe, we 
have sentenced people who have done irresponsible and just really 
unconscionable things to their children. We have sent them to prison. 
And here in this body has so loaded up our children and our 
grandchildren with debt that it is unconscionable. We're out here just 
throwing money around, and they're going to have to take care of that 
debt.
  They didn't get the message. They told America, you put us in the 
majority and we will be more responsible. And what they have done is 
multiplied the irresponsibility, and it's heartbreaking.
  The only reason we don't already have a runaway inflation with the 
kind of money that's been spent and printed and borrowed is because 
fuel went down by more than 50 percent. As fuel goes up for the summer, 
we're going to have runaway inflation, and nations have fallen for that 
reason.
  Mr. BROUN of Georgia. Will the gentleman yield?
  Mr. AKIN. I yield to the gentleman from Georgia.
  Mr. BROUN of Georgia. I just want to ask a question.
  I know you introduced a bill that I was a cosponsor of that would 
give people a 2-month tax holiday that would actually put money back in 
the hands of people.
  Did you get any positive response from the Speaker, from the 
Democratic majority to allow that to even go forward?
  Mr. AKIN. I yield to the gentleman from Texas.
  Mr. GOHMERT. I appreciate the gentleman's yielding.
  Actually, I got a number of positive inquiries from some of our Blue 
Dog friends. But as far as from the Speaker, there has been no interest 
in bringing it to the floor.
  When I met President Obama yesterday, I brought it up to him and I 
said, This does everything you promised, giving a tax cut to everybody. 
I said, It doesn't have the $250,000 cap on income. We could add that. 
It does what you promised better than anything.
  He said, Wow, have you talked to Larry? He was talking about Larry 
Summers, who was standing right there.
  I said, No, I haven't.
  He said, You guys need to talk.
  Mr. AKIN. Gentlemen, I think we are done with our 1 hour. I'd also 
like to recognize the good judge from Texas and appreciate your 
stopping in. We will try to fit people in again. We will have this 
discussion, I believe, next week.
  Mr. BROUN of Georgia. And Congressman Westmoreland is here also. He 
was here to join us also.

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