[Congressional Record Volume 155, Number 49 (Monday, March 23, 2009)]
[House]
[Page H3710]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       FRUIT OF THE BAILOUT MANIA

  The SPEAKER pro tempore. The Chair recognizes the gentlewoman from 
North Carolina (Ms. Foxx) for 5 minutes.
  Ms. FOXX. Madam Speaker, it is time for a brief history lesson. In 
the fall of 2008, the Bush administration came running to Congress with 
an historic ask: $700 billion with no strings attached to save the 
country from financial meltdown. At the time I didn't buy it, so I 
voted against the bailout plan twice. In fact, my distaste for the 
bailout plan and the unfettered access to taxpayer money that it gave 
the Treasury Department and the executive branch was so strong that I 
soon introduced a bill to stop the bailout mania.
  It was a simple bill, but it had to be considered by Congress thanks 
to the way the bailout law had been written. In a nutshell, it would 
have stopped the second half of the $700 billion TARP bailout. I 
introduced it in 2008 and again in 2009. President Bush's request for 
the second half of the bailout money in early 2009 triggered 
consideration of my bill. That's when things got interesting.
  The week before we considered my bill to stop the bailout, we also 
considered another bill called the TARP Reform and Accountability Act. 
Nice name, but what it essentially did was give a tacit thumbs-up on 
the second half of the bailout and even more wasteful bailouts with 
taxpayer money of failed automakers. It had some provisions to increase 
oversight and transparency. But ultimately, it would have expanded the 
use of taxpayer money for bailouts.
  As I look back over the debates from those two days in January and in 
the ensuing weeks, I found some comments to be rather surprising, 
especially in light of the news last week about the outrageous bonuses 
awarded at AIG, a company which received another $30 billion this month 
in government bailout cash. The comments and questions from my friends 
on the other side of the aisle focused on their unwavering trust in the 
Obama administration's intentions to stop these sorts of executive 
bonus payments at companies that received bailout money.
  During the debate on the anti-bailout measure, my colleague, Chairman 
Frank said, ``We saw bankers saying I got the money, it's none of your 
business what we do with it. We saw bonuses given that shouldn't be 
given. I am confident that the Obama administration has learned from 
that.'' In his defense, I know that the chairman of the Financial 
Services Committee does not support these AIG millionaire bonuses, but 
we can draw a useful lesson from his comments. It's a simple lesson: 
the Obama administration pledging that there will be no more excessive 
bonuses does not make it so.
  While I regret that my colleague was so gravely mistaken about the 
Obama administration, I do think that it is important to point out how 
quickly the new administration's actions have fallen short of its 
inflated rhetoric.
  Let's take a look at some of the other comments made over the past 
couple of months. Last month, the gentleman from Illinois (Mr. Jackson) 
trumpeted President Obama's promise to limit executive compensation at 
bailed out companies. He said, ``Today, the President will limit 
executive compensation for executives of companies that take advantage 
of taxpayer bailout funds. This is the right thing to do.'' And in 
January, Mr. Pomeroy of North Dakota defended his vote to give the 
Obama administration the $350 billion in bailout cash, ``The written 
pledges of the Obama administration to operate TARP with firm 
conditions, greater oversight and transparent accountability abide with 
the conditions passed by the House.''
  So what exactly did the Obama administration pledge to do? It pledged 
to ensure that bailed out financial institutions did not go overboard 
with excessive executive compensation bonuses. Specifically, his 
National Economic Adviser wrote a letter to Congress on January 12 that 
stated: ``The President-elect is committed to using the full arsenal of 
tools available to us to get credit flowing again to families and 
businesses. He will ask his Department of Treasury to put in place 
strict and sensible conditions on CEO compensation and dividend 
payments until taxpayers get their money back.'' He continued: ``We 
will ensure that resources are directed to increasing lending and 
preventing new financial crises and not to enriching shareholders or 
executives. Those receiving exceptional assistance will be subject to 
tough but sensible conditions that limit executive compensation until 
taxpayer money is paid back.''
  One of my colleagues, Mr. McGovern, was very encouraged by this 
letter from the incoming administration. I will read what he said in 
response to the administration's pledge: ``And I should say that the 
statement by the Obama administration, the statement by Larry Summers, 
is all very encouraging. It demonstrates a real appreciation of what 
average people are going through.''
  I will leave it to the American people to judge how well the Obama 
administration has stood by its pledge to ``limit executive 
compensation until taxpayer money is paid back,'' and I will leave it 
to the American people to judge how well this administration 
appreciates what average people are going through--unless, of course, 
you consider people who get million-dollar bonuses for running a 
massive company into the grounds to be average.

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