[Congressional Record Volume 156, Number 28 (Tuesday, March 2, 2010)]
[House]
[Pages H1011-H1017]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
BLUEPRINT FOR RECOVERY
The SPEAKER pro tempore. Under the Speaker's announced policy of
January 6, 2009, the gentleman from Iowa (Mr. Braley) is recognized for
60 minutes as the designee of the majority leader.
Mr. BRALEY of Iowa. Mr. Speaker, I was very proud to found the
Populist Caucus with a large group of my friends in the Democratic
Caucus to focus on economic issues that affect Americans who either
make up the middle class or are striving to enter the middle class. We
all know that our country has historically been at its best when we
have had a large middle class and our economic policies reflect middle
class values, and that is why when we decided to settle upon our
founding principles, we decided that we wanted to fight for families by
providing them access to quality, affordable health care; to provide
them and their children with the type of world class education they
will need to compete in a global economy; to make sure that we have a
fair wage system for all employees in this country; to make sure that
our trade policies provide a level playing field to American workers
and American manufacturers who compete with trading partners who just
frankly don't quite live up to our standards, whether it is child
labor, exploitation of workers, environmental issues, those are the
types of issues that we want to focus on as we chart a new future for
this country to promote and expand the middle class that we all are so
proud to have been a part of.
One of the things that we talked about as we were trying to dig
ourselves out of the greatest economic crisis since the Great
Depression was what type of a blueprint for recovery we wanted to offer
to the American people that was going to be a reflection of the values
that we grew up with and give a strong message that, after a bailing
out Wall Street, the American taxpayers deserved help on Main Street,
and that it was not unreasonable to ask the very people on Wall Street
who got us into this mess to help pay for the tab on helping bail out
Main Street.
I am proud to be joined by my friends, the gentlewoman from Ohio (Ms.
Sutton) and the gentleman from Wisconsin (Mr. Kagen), but one of the
things that I want to talk about at the beginning is the things that we
hear over and over back in our district, because all of us have been
out talking to our constituents, going to town hall meetings, Congress
on Your Corner and the other events, and the one thing I hear from my
constituents over and over is this question: When do I get my bailout?
This is a legitimate question that Americans deserve an answer to
from Democrats and Republicans, because if you are somebody who has
lost your job or you've lost your home or you've lost your business or
you've lost your health care coverage during this crisis, you need to
know what is my Federal Government doing to help me out. So when we
talk about our response, we are going to do it by talking about these
three core values: The Populist Caucus wants to find a blueprint for
recovery that is going to spur job creation; it is going to implement
fair compensation for executives who helped put us in this problem;
and, finally, bring an end to excessive Wall Street speculation that
drove our economy and drove the global economy off the cliff and put us
into this deep hole that we have been digging ourselves out of.
So as millions of middle class families look to us and ask when their
recovery effort will bring relief to their town on their street, they
deserve to know what we are going to be doing to spur job creation,
insist on fair executive compensation, and end speculation on Wall
Street.
Now, one of the things that we know is that it is very common for
politicians and groups across the political spectrum to try to claim
the populist mantle. But let me tell you, and I am going to let my
colleagues expand on this, the Populist Caucus that we all came
together to found was not based upon a bunch of people running through
the streets with torches and pitchforks asking for blood. We are there
because the problems of the middle class are real. The concerns of our
constituents reflect the concerns of America, and we want to come
together and talk about serious answers to real problems to help change
the lives of middle class Americans.
So with that, I am going to yield to my colleague from Ohio before I
yield to my colleague from Wisconsin to talk about some of the critical
economic issues she is hearing about from her constituents and why this
Populist Caucus response is so critical moving forward.
Ms. SUTTON. I thank the gentleman for yielding, and for your strong
leadership of the Populist Caucus and the mission that we are on to
restore the promise of the middle class, to stand up for the middle
class, and to stand up for those who aspire to the middle class, to
make our country work for those folks who are aspiring to the middle
class.
We are not something that is complicated. The Populist Caucus
believes that strong, immediate action must be taken to create jobs in
the United States and to put an end to the excessive greed of Wall
Street that brought us to the brink of disaster. And so I am proud to
join with you, Representative Braley and Representative Kagen, to stand
up and speak to the American people about the fight we are waging on
their behalf because that's what being a populist is really about.
When I go home, as when you go home, I hear all about the need to
facilitate employment opportunity for the people that I represent in
northeast Ohio. All they want is a government that will work with them
and for them, to facilitate those jobs, jobs, jobs that are so needed
out there. We have heard recently that there is a recovery underway,
and there are some signs of recovery, and we have certainly seen a lot
of signs of recovery on Wall Street, but there can be no such thing as
a jobless recovery, and we have started to hear that term bounced
about.
The Populist Caucus is here to say that there is no recovery if our
folks
[[Page H1012]]
don't have jobs, because this is not just about a country that stands
up for the well-to-do. This is the People's House. This body is about
making sure people have opportunity, ordinary people have opportunity.
And what we will discuss, and when we look back a little bit, it
becomes apparent that the economy, even before the excesses of Wall
Street came to their full fruition, even before the economy was not
working for ordinary Americans, we saw a decade of flat wages in this
country while we continued to see skyrocketing health care costs. We
saw the GDP rise, and we saw productivity rise in this country, but the
American people who were doing the work were not sharing in the
prosperity.
{time} 2100
So we look forward to developing policies--and that's what the
blueprint is all about--that will help deliver sustainable, quality
jobs for the American people that will fairly compensate them and put
an end to the excessive and disparate compensation that those at the
top of the food chain have been taking for far too many years at the
expense of everyone else.
And so with that, I yield back to the gentleman. And I thank you
again for your leadership; it's been stellar on this subject. I look
forward to the mission ahead.
Mr. BRALEY of Iowa. I thank the gentlewoman for yielding.
I think one of the things that we've heard a lot about, Dr. Kagen, is
we've heard people try to explain what went wrong on Wall Street and
this concept that sometimes big financial institutions are just too big
to fail. Now, I don't know how it is up in northeastern Wisconsin; but
in Iowa, if something is too big to fail, it's just too big. So maybe
you can help enlighten us a little bit about some of the economic
policies that we pursued as a country before Barack Obama became
President that have contributed to the enormous challenge we have faced
this past year in trying to stabilize the economy before we moved on to
a broader response to real meaningful financial reform.
Mr. KAGEN. I thank the gentleman for yielding and for putting
together the Populist Caucus.
Once again, as Mr. Braley has pointed out, we're populists because we
are standing with our feet on the factory floor. We don't have our
heads sitting in a board room on a corporation on Wall Street. We do
not share their values. We have those working class values that
ordinary people have.
This battle that we're in now, this battle for America's future to
create the jobs that we need to work our way through today's troubled
times and work our way back into prosperity, this battle that we're in
didn't just start 10 years ago, it just didn't begin with 10 years of
net zero job creation. I will take us back a century because it's
really not 2010, it's 1910 all over again. In the words of Teddy
Roosevelt, who, on August 31, 1910, in his speech entitled, ``The New
Nationalism,'' set forward the idea of the progressive movement and the
Populist Caucus--and I will quote him in part because it was a very
long speech:
``Exactly as the special interests of cotton and slavery threatened
our political integrity before the Civil War, so now the great special
business interests too often control and corrupt the men and methods of
government for their own profit. We must drive the special interests
out of politics; that is one of our tasks today. Every special interest
is entitled to justice, full, fair and complete. And now mind you, if
there were any attempt by mob violence to plunder and work harm to the
special interests, whatever it may be, that I most dislike. And the
wealthy man, whomsoever he may be, for whom I have the greatest
contempt, I would fight for him, and you would if you were worth your
salt. He should have justice, for every special interest is entitled to
justice, but not one is entitled to a vote in Congress, to a voice on
the bench, or to representation in any public office. The Constitution
guarantees protection to property, and we must make that promise good;
but it does not give the right of suffrage to any corporation.'' We the
people have rights, corporations don't.
Now, over the short period of history that we've been here in
Congress, beginning in 2006, with Representatives Sutton and Braley and
Welch, we took forward some ideas that we gathered from people. And
everywhere I go in Wisconsin, Mr. Braley, people are telling me the
same thing: We want our money back, we want our jobs back. For too
long, our jobs have been shipped overseas. Instead of our values being
shipped overseas, it's been our jobs. And here on my left is a short
picture of where the jobs have gone.
During the previous administration under George Bush, just before
President Obama came into office in January, we had lost 700,000-plus
jobs; this January, 2010, 20,000. We are moving up in the right
direction. And, yes, we need to generate more jobs, but how did we get
into this mess that started really back in 1910 and we're not done yet?
We've had two wars at the same time without paying a dime for it; we've
had two tax cuts to the rich without paying for a penny; we've had a
$400 billion handout to the big drug companies on Wall Street without
paying a nickel for it. And then at the tail end of the last
administration we had a looting of the United States Treasury of nearly
$1 trillion while they fed their friends on Wall Street, again, without
paying a single dime for it. Well, in Wisconsin, much like in Ohio and
everywhere else across the country, including Iowa, we have a saying,
you know, there is no free lunch, we have to pay our bills.
So we have to pay our bills, we have to live within our means; and to
do that, the Populist Caucus has put forward a blueprint for America's
future, and I yield back my time.
Mr. BRALEY of Iowa. Well, that's a great segue because we not only
are talking about values; we are talking about solutions. We're talking
about legislation that is going to help us create jobs by generating
new revenues, not putting this on the back of the middle class, but
helping the people who got us into this mess assume some of the
responsibility. And I think one of the cornerstones of our blueprint
for recovery is this issue of fair compensation. And my good friend
from Vermont, Congressman Peter Welch, has introduced a bill called
Wall Street Bonus Tax Act. I am going to let him explain what that bill
does and how it helps achieve this blueprint for recovery by putting
some incentives for Wall Street to help rebuild Main Street.
Congressman Welch, I yield to you at this time.
Mr. WELCH. Thank you very much. I appreciate the opportunity to speak
about trying to get jobs to start going up along with the stock market.
You know, it was only 1 year ago in one week that Wall Street, the
stock market was crashed to its lowest level in years. In that past
year, it has recovered; but while it has recovered, unemployment is
still hovering in the range of 10 percent, underemployment is in the
range of 17 or 18 percent. There are over 27 million Americans who are
seeking work or not working enough, and we are not going to have an
economic recovery until those folks are back to work.
How did this happen? It happened, we know, because of the excessive
lending, reckless lending largely engineered by Wall Street firms that
stood to gain an awful lot of profit. What happened? We, the American
taxpayer, had to bail out Wall Street, $750 billion. People didn't want
to do it, but they had a gun to the head of the American economy, and
the collateral damage of inaction would have been much more havoc to
people's pensions, to unemployment, and to Main Street. But 1 year
later, Wall Street is back, but lending by Wall Street to our small
businesses has gone down, not up. If we are going to get jobs back, if
we are going to get people back to work, we need our banks--and it
tends to be our local banks--to start doing some lending. They have
been doing the job, but Wall Street hasn't.
What they've been doing in the past year--and quite successfully,
they're very good at it--is returning to the casino economy. They've
made an enormous amount of money by buying and selling derivatives,
commodities, and currencies. And how did they do it? With the help of
the American taxpayer: one, the $750 billion TARP transfer; second, the
open window at the Federal Reserve where those banks had access to 0
percent interest money. Now, they've been so successful that they have
set aside this past year for their bonus pool $150 billion.
[[Page H1013]]
They had three choices as to what they could do with that money: one,
they could have added it to their balance sheets, strengthened it in
order to basically fight another day so that if there was a downturn,
they would be able to absorb it themselves and not come hat in hand to
the taxpayer. Second, they could have lent it out. If you're getting 0
percent interest money from the Fed, you've got a local small business
or a young family trying to buy their first home and you lend it out at
5 or 6 percent, most people would say that's a pretty good return. They
didn't do that.
The third thing that they could do--and unfortunately they did do--is
decide to put that money in their pocket with a bonus. That's good for
them, but it certainly hasn't been good for the American economy.
So our legislation, the Wall Street Bonus Act, is very simple. It
says that all those bonuses on Wall Street that went to banks that
received taxpayer assistance through the TARP program, those bonuses
above $50,000 would be taxed at 50 percent. And every single dollar
that was collected would then be made available to the Small Business
Administration to work with our local banks that have been making loans
to lend to our job-creating small businesses around the country. So we
would be taking a dividend for and on behalf of the taxpayers who
basically put that money up in the first place, and we would be
specifically making that money available for lending with a partnership
of the SBA and our small banks.
Now, this is important for a couple of reasons: number one, the money
that was made on Wall Street, that $150 billion bonus pool, yes, it was
smart people buying and selling and trading derivatives, but the
question for us is, when we put taxpayer dollars to work, is it good
for the American taxpayer? Is it good for the Main Street economy? And,
obviously, if it just goes into the pockets of the Wall Street traders,
it does a lot of good for them, but no good for our broad economy; and
our fundamental responsibility is to help people get back to work.
The second is that the bonus culture really is very destructive
because what it encourages is placing a big bet, bet red, bet black, if
you win, you make a lot of money, if you lose, as we've seen, the banks
can come to the taxpayer and get bailed out. And people are furious
about that, rightly so. So it is time for us to make a basic statement
here that will reward investment, will reward hard work, but we're not
going to have the taxpayers be on the hook for people who want to
gamble.
The final thing really is this: we face a question about what
business model we want America to follow. Do we want a business model
where you make money by financial engineering, by having the quickest
computer trading program, by a lucky bet on a speculation? Or do we
want a business model where folks make their money by showing up for
work, by investing in their community, by hard work for the long term,
by being satisfied with a steady and sustainable rate of return and
profit--which we need in a capitalist economy--by treating their
workers right and by paying our fair share? That's the question.
The Populist Caucus is very strongly united in the view that hard
work should be rewarded, that entrepreneurs, job creators, people who
make money because they invest in their economy, because they invest in
their workers, that is to be rewarded and encouraged. In fact, we have
to do it if we're going to have an economy that works and expands
rather than an economy that is based on flipping trades, about
speculation, and financial engineering.
So this Wall Street Bonus Act would put some money into lending and
help our small entrepreneurs. And I am very grateful that we have the
strong support of so many Members of Congress for this.
I yield back.
Mr. BRALEY of Iowa. Well, I thank you for those very insightful
comments.
I think everything that we talked about earlier on why we formed the
Populist Caucus, to promote and expand the middle class by emphasizing
economic principles, that will create policies that help that to
happen. We know that small businesses make up a huge part of the middle
class. We also know that they are a huge driving engine for creating
new jobs in our economy.
That is why I am happy to recognize my good friend from Florida, Ron
Klein, who has been a strong advocate for small businesses during his
time in Congress and is going to be sharing with us some of the things
that we can work on together to try to create the types of incentives
that will help small businesses take the risk with sound economic
principles and lead us on a path of job recovery.
With that, I would yield to my friend.
Mr. KLEIN of Florida. Well, I thank the gentleman from Iowa. And as
always, it's great to be here with our friends from the Midwest and
from the South. We represent the whole country, and it's such a great
thing to be here, as we all got elected a couple of years ago and we
have learned and listened very closely to what people are saying back
home.
I know the gentleman from Wisconsin talked about jobs and sort of
where we've come from, and I know the gentlelady from Ohio did the same
thing. The ``where we've come from'' part didn't just start in the last
13, 14 months; unfortunately, it has been going on for a long time. A
lot of that was decisions made in some cases by government, sort of
incentivizing big decisions to send business overseas, encourage that
through tax policy, and some of it has just been people making
decisions that we've lost that American ingenuity.
Well, we haven't lost it, we all know that. This is the greatest
country in the history of the world and our economy is the strongest.
And, yes, we are being challenged right now, but this is when we are at
our best. And that's the exciting part. This is a moment for us all to
come together, put our arms around each other and say, what's great
about America? Our worth ethic, our ingenuity, our technology, our
innovation, this is what makes it. But we have to recognize that some
of these policies--certainly when this administration started, a mere
13 months ago, we were losing 720 jobs per month. That's incredible.
Now we are in a place where fortunately it's moving in the right
direction--I think it was 20,000 or 30,000 jobs per month. Now, that's
not good, we want to gain, we want to be at 100,000-plus; but, boy,
that is certainly moving in the right direction, and that is what I am
glad to see.
{time} 2115
Now, I come from a State, Florida, which had 15 years of incredible
prosperity, a lot of growth. For the people in my community, their
property values went up, and their businesses were expanding. All good.
The American Dream was happening over and over and over again. Yet,
when the banks stopped lending, as we've been talking about, well,
guess what? The merry-go-round stopped, and a lot of people are hurting
right now. They are hurting psychologically; they are hurting
emotionally; they are hurting physically.
The worst thing, as I know the gentlelady from Ohio talks about, is
not to have that job, not to have that ability as a provider, a man or
woman of a household, to bring that paycheck home, to get up in the
morning and know you're going to do something productive and to make
that example for your children. We want to make sure that people have
that opportunity, and that's what we are working toward right now.
Well, as to this ``spur job creation'' part of the Blueprint for
Recovery, there are two points I want to bring up:
One is the ``buy American'' concept. It's real simple. Every
opportunity, when it comes to sourcing goods, services, and things like
that, needs to be done in the United States. If there is anything that
we can certainly promote, it's our providing those goods and services--
our local businesses. Your neighbor down the street, one you go to a
church, to a synagogue, or to a supermarket with or one you coach
Little League with is someone who works in the community. We want to
give that businessperson and his or her employees or the people he
works with an opportunity to be that source for government contracts
and everything else--not to go overseas. We all understand the issue of
free trade and all that, but free trade is fair trade, and
[[Page H1014]]
we want to make sure that, in this country, we are doing everything we
can to promote our businesses first. It's real simple. I think most
Americans get it. I think we've gotten a little off track over this
thing, but that's a principle we need to pass and support and hold to.
Second--
Mr. BRALEY of Iowa. Will the gentleman yield on that?
Mr. KLEIN of Florida. Absolutely.
Mr. BRALEY of Iowa. I think there is a big misperception that our
trading partners and our competitors in the global economy don't have
any ``buy Chinese'' trade policies or ``buy Japan'' trade policies; is
that true?
Mr. KLEIN of Florida. Absolutely.
We all understand the real game here, and it's not just about what
they call ``tariffs.'' You may have heard of a ``tariff.'' That's a
tax. If you bring something into a country, there is a tax to make it
less competitive. Well, there are a lot of other ways to stop our
wonderful American goods from going to other countries. They have lots
of obstacles. It goes on in the auto industry all the time with
emissions and lots of things that just make it practically impossible
for us to sell.
Now, we can't force someone in Korea to buy one of our cars, but we
should give him that choice. If we have the best products, consumers
will buy our products, just like some products come into this country,
and consumers make a choice. Right now, there are a lot of things going
on to stop our products from going to other countries.
Mr. KAGEN. Will the gentleman yield for a question?
Mr. KLEIN of Florida. Sure.
Mr. KAGEN. In Wisconsin, we have got a number of companies which have
run into problems with regard to ``buy American.'' We have buy American
clauses in our government contracts today. Yet Miller Electric Company,
which makes the finest welding apparatus in the world, put in a bid for
a shipbuilding company, a government contract for the Navy. This
foreign-owned shipbuilding corporation down in the South decided,
instead of buying American, they would use a loophole, and they bought
something from a competitor from Germany.
Can you explain how this bill, this Buy American Improvement Act,
would close the loopholes in these contracts?
Mr. KLEIN of Florida. That's exactly what it will do. I thank the
gentleman for that example.
I have an example in my community, a company called Cross Match. It's
a technology company. They make fingerprint equipment and things like
that. They were bidding for a census contract, and a company that was
sourcing it through a Korean company came in with all sorts of--not
machinations--I would say, loopholes. This bill closes the loopholes,
and I think that's exactly what we are all interested in.
The second thing I want to touch on, if I can, which the gentleman
from Iowa (Mr. Braley) just talked about, is something which, I think,
we all understand--the lifeblood of our economy. That is access to
capital, to bank loans--to small business loans.
One thing I can say about this Congress is that I am really proud of
the efforts that have been brought about through this Congress to make
SBA, Small Business Administration, loans much easier to get. At this
point, they are 90 percent guaranteed by the government. If you are a
qualified veteran, 95 percent is guaranteed. These are good quality
loans, but these aren't loans that are made by the government. They are
made by banks, and they are guaranteed by the government.
We need to get our banks to start focusing on making these loans and
other commercial loans. We are not asking banks to make ridiculous
loans like some of those that took place before which were not properly
collateralized. Yet, for good, creditworthy people, there are loads of
small businesses that have long histories in our local communities.
They know the loan officers at the banks, and they can work together
and make loans happen.
One of the ideas being suggested is to take some of the payback money
from some of the big banks that paid some of this money back and start
bringing it down to the local level--to Main Street, to small banks,
to community banks. We're not just talking about giving them the money
like it happened before. Instead, it's an incentive to make the loans.
If they make the loans, then they get discounts on the interest rates.
This is what we have to do.
Mr. BRALEY of Iowa. Will the gentleman yield for another question?
Mr. KLEIN of Florida. Absolutely.
Mr. BRALEY of Iowa. One of the things that is frustrating to many
Americans is they just don't understand how their government can
actually help stimulate economic development.
One of the best examples of this is, when I first came to Congress, I
served on the Small Business Committee. I was fortunate enough to chair
the Contracting and Technology Subcommittee, and this is when the
previous administration was in control of the executive branch. As I
talked to people on the committee, it shocked me to learn that the
former administrator of the Small Business Administration saw it as his
job to bring about the end of the Small Business Administration. Many
of the policies were designed to contract the agency whose sole purpose
was to try to stimulate small business growth and development.
So, when we are talking about how we create capital and provide
economic incentives for small businesses, we have come a long way in 3
years to get to the point where this agency is trying to fulfill its
basic purpose, and I think that is going to be critical for achieving
the types of results you've just talked about.
I hope you can enlighten us further on this.
Mr. KLEIN of Florida. I'll just conclude. There is so much more that
everyone wants to say here, and there is so much to add. That's what's
getting exciting about this work we're doing here.
Small businesses are the lifeblood of our economy. I mean many parts
of our country do not have a lot of Fortune 500 companies. Those are
great companies, and they add a lot of value to our country, but small
businesses are going to be the businesses that get us out of this
downturn, and we are beginning to see some good things. Bank lending is
better than it was, but we need to encourage and find ways to make sure
that the banks are lending so our small businesses can buy up some
inventory, can buy up that capital equipment they need--a little
deferred maintenance--and hire more people. That's the bottom line.
I just want to thank the gentleman for having this ``spur job
creation'' because, I think, this is a huge part of how we are going to
get our country back on track.
Mr. BRALEY of Iowa. Well, I think one of the things we know is that,
in order to spur job creation, you have got to be able to have revenues
that will help people create jobs through incentives that will help
them take that risk.
One of the important things that the Populist Caucus' Blueprint for
Recovery does is it talks not only about how you change behavior
through the policies you implement but also how you transfer some of
the burden from Main Street, which has been suffering so much in this
recession, to the very speculators whose wild gambling, which is what
most economists call what they were doing, drove us over the cliff.
That is why one of the key elements of this ``ending speculation''
piece is one of the bills introduced by another vice Chair of the
Populist Caucus, Congressman Peter DeFazio, who introduced his Let Wall
Street Pay for the Restoration of Main Street Act. This is a very
simple concept that existed in this country for almost 60 years, and it
worked very successfully, including during the Great Depression.
What it says is that, if you are trading in excessive transactions on
Wall Street, we are going to ask you to pay a small transaction fee on
those high-volume trades so that we will have an incentive to keep you
from engaging in excessive speculation that puts all of us at risk. His
transaction fee is estimated to create somewhere between $100 billion
and $150 billion in new revenues that can be used for two basic
purposes:
One is job creation, which is what we all agree is going to create a
huge emphasis for an economic recovery, because when people go back to
work,
[[Page H1015]]
they not only pay Federal taxes and reduce our burden at the Federal
Treasury; they pay State and local taxes, too, to help relieve the
burden on our States and cities. This is how you create economic
incentives to change corporate behavior from excessive speculation, and
this is also how you provide new revenues to stimulate economic
development and help to reduce the deficit.
I am going to ask one of our newest members and youngest members of
the Populist Caucus, our good friend from Virginia, Tom Perriello, to
talk about the importance of having a bill like this to guide us in a
new direction for economic recovery and what that means to the people
in his district of Virginia.
With that, I'll yield to my good friend.
Mr. PERRIELLO. Well, thank you very much for that news and for the
news from our friends in the house of lords--I mean the Senate--that
has just come this way. It's very, very exciting because we, as a
caucus, have been fighting so hard to shift the focus from speculation
on Wall Street to job creation on Main Street. We understand that two
out of every three new jobs in this country are coming from small
business. Now, they may not make the headlines. It may mean you have
lots and lots of small businesses, but that's the engine of our growth.
One thing we still do better than any other country in the world is
innovate. We are better entrepreneurs. We are really good at this. It's
within our small businesses that we see this innovation taking place,
and we need to make sure that we are giving the kind of support that
small businesses need, whether that's through direct lending, whether
that's through the suspension of capital gains tax for small business
to bring nontraditional lenders in, or whether that's providing the
infrastructure and the workforce development that allows those small
businesses to flourish. We also need to understand that the phrase
``buy American'' should not be seen as bad language.
I think it's timely that we look at this extension because, while
there are many policies out there which may seem fancy, sometimes we
have to get back to the basics. We are within weeks of the new building
season's beginning, the spring building season leading into the summer
building season. There are thousands of small businesses around this
country that have held on and have taken losses for 2 years, whether it
has been the construction firms, the engineering firms, the supply
stores that have supplied those guys, or whether it has been the diners
where folks have gone to eat. If we are not building anything in this
country, we will not continue this path of recovery that we have worked
so hard to lay out.
This is a chance, and we need to act here in Washington with the same
urgency that the previous Congress did when Wall Street was in trouble.
Well, Main Street is in crisis, and we need to understand that we can
rebuild this country. We may not see housing start to pick up this
summer in the way that some would like, but we can rebuild our
infrastructure, and we can reinvest in the existing building stock,
whether that's municipal, commercial, or residential, through major
retrofit programs.
It puts people to work in rebuilding America's competitive advantage,
because what you understand, Mr. Braley, from your experience in Iowa
and around this country is that we have to reinvent America's
competitive advantage. We will outcompete the world, but we cannot do
it solely through supporting the financial sector. We have to start
building things, making things, and growing things again. We can still
do that better than anyone in the world, but we need a trade policy,
and we need a workforce development strategy. We need an economic
development strategy that understands that those are things we can
still do. There are sectors, like the energy sector, in which we can
outcompete the world, but everyone else is not playing for second
place. They are looking to do the same thing we are trying to do, but
we can do it better.
This is our time. This recession right here, that we are starting to
crawl out of, is an opportunity for us to reinvest, to rebuild that
competitive advantage and to reemploy America in the work that so many
in this room have worked so hard to do. There are families out there
right now who are proud, hardworking people who are looking for jobs.
We can work together across the aisle to make this happen, but we must
have that commitment to basic commonsense things, like making sure we
don't miss this summer's building season. We have that time, and we
must have a deep sense of urgency because I know people out on Main
Street do.
Mr. BRALEY of Iowa. I appreciate the gentleman's comments about
investing in infrastructure because most of what I learned about the
need for infrastructure improvements came when I was working for the
Poweshiek County Secondary Roads Department to help pay my way through
college.
One of the things that I learned was that, as you try to create
opportunities for transportation improvements that are going to move
goods, services, and people, you see a lot of trickle-down that happens
from the Federal Government, to the State government, to the county
government, to the city government as right-of-ways are transferred
after they are abandoned for bigger and better infrastructure
improvements like four-lane highways.
{time} 2130
One of the cornerstones of our blueprint for recovery that deals with
job creation is a bill introduced by Congresswoman Rosa DeLauro and
cosponsored by one of the vice chairs of the Populist Caucus, our
friend from Minnesota, Keith Ellison, the National Infrastructure
Development Bank Act.
What it does is it creates an opportunity to take advantage of
existing infrastructure needs by identifying about 47,500 jobs and $6.2
billion of potential economic activity that are currently ready,
willing, and able to be acted upon, but because we have not had the
opportunity to marry private development with public infrastructure
projects, we are missing an opportunity to stimulate job growth through
this National Infrastructure Bank.
So I would ask my colleagues who support investments in
infrastructure improvements that cross the spectrum from expanding
access to energy created by wind in the Midwest, by building out our
ability to transfer that energy and electricity throughout the country,
by building out our world broadband, by investing in roads, bridges,
and public improvements, how this type of an investment development
bank would make a difference in their districts.
I am going to yield to my friend from Ohio.
Ms. SUTTON. I thank the gentleman for yielding.
Infrastructure creates such ripple effects in our economy and spurs
economic development and opportunity for the people that we represent.
Every time I go home, people beg, Please, please, invest in our
Nation's infrastructure. We know that the need is tremendous.
One of the bills, in addition to the National Infrastructure Bank
bill, which I think we should talk about more, but you mentioned
Representative DeFazio's bill, the bill entitled Let Wall Street Pay
for the Restoration of Main Street Act. I think this is also a bill
that deals with infrastructure, because when we get the money from
those transaction fees of those risky trades that are something that we
would really like to have cut back on, we are going to use it to invest
in infrastructure and all the good that goes with it.
But we also have in that bill, and I think it is important to tell
people, that part of the revenue that would come in in addition to that
huge amount going to invest in Main Street, you know, Main Street,
after all, is who bailed out Wall Street, and we didn't do it because
we were fans of their behavior. We did it so they would start lending.
As we discussed, they didn't start lending, so we need to continue to
push until things are right. But also in that bill, there is a part of
the revenues raised that are going to go to deficit reduction. So we
often hear this argument that it is all about the deficit.
Well, it is about jobs and the deficit. In order to get rid of the
deficit, people do have to have jobs. Frankly, obviously people need to
have jobs, because
[[Page H1016]]
this is the United States of America, and that is the American dream,
having a job and raising your family and aspiring to a quality of life
that is second to none across this country. So, in that bill, in
addition to putting money into infrastructure, we also take a piece of
that money and let Wall Street help to pay down some of the deficits
that were created by helping Wall Street get out of the mess that they
were in.
So, back to the other bill that you mentioned, which is critically
important, and you asked how important it was back in Ohio, in my
district. It just can't be overstated. Just yesterday, I received a
whole list of infrastructure projects that are ready to go that need
funding.
The thing about infrastructure is that we all know that it can't be
ignored indefinitely, right? But oftentimes we come to a place where we
don't address it until a crisis occurs. And that doesn't make any sense
either. So if we can put people to work doing that work that we know
has to be done and spur greater economic development and recovery, why
wouldn't we do that?
This National Infrastructure Bank legislation is a critical component
of taking the idea, the concept that we all know makes sense, and
really maybe that is what the Populist Caucus represents more than
anything; it is about the common sense. People know what we need to do
for our country, to strengthen the middle class and put people to work
rebuilding our infrastructure. Other countries are building their
infrastructure. They are investing massively in their infrastructure,
because they know the value that it creates beyond the jobs that are
put forth just in doing the construction.
With that, I yield back to the gentleman.
Mr. BRALEY of Iowa. I think that is a great opportunity to talk about
the importance, because when I served on the Transportation and
Infrastructure Committee in the 110th Congress, our chairman, the
legendary Jim Oberstar, always reminded us that our global competitors
are investing massive amounts in infrastructure development.
The European Union had a 5-year, $1 trillion infrastructure
development plan. You look at China, which has just passed the United
States as the leading consumer of automobiles, and you look at the
ribbons of concrete that have been poured in that country to respond to
growing consumer and commercial demand for transportation.
If we are competing with these people in a global market, Dr. Kagen,
we have to make similar types of commitments so that our infrastructure
system can make us competitive. I know from visiting your district in
northeast Wisconsin, it is a very spread out and remote area in some
parts of your district, yet the constituents that you represent in
those areas depend just as much on an infrastructure system as the
people here in our Nation's Capital.
I yield for your comments.
Mr. KAGEN. I thank you. I will just summarize what everyone here on
the House floor understands. We are about $2.1 trillion to $2.2
trillion behind in our investment in our infrastructure, our roads, our
bridges, our schools, our wastewater treatment plants. What good would
it be if we generate several million jobs, even 10 million jobs, when
we manufacture things and then we don't have the railroads or have the
highways and the water infrastructure to transmit our goods to the
world's marketplace? So we are indeed several trillion dollars behind
in our infrastructure development.
I will just point out one of the facts about the American Recovery
and Reinvestment Act that few people realize. Apart from the fact that
it was the largest tax cut in American history, little known is the
fact that the transportation and infrastructure investment, which was
only 4 percent of that amount of money we invested in America,
generated 25 percent of the jobs.
Nearly 900,000 people are working because of that American Recovery
and Reinvestment Act of 2009. It put people back to work in our
infrastructure. And that multiplier is significant. For every person
working in transportation, that money turns over many times over.
So let me just see if I get this straight, if I understand where we
are going with our ideas about rewarding people or encouraging people
with the taxation code.
If you are sitting in a boardroom on Wall Street and you are
rewarding yourself for your failure with the taxpayers' money,
according to the Populist Caucus, we would like to put a significant
tax on that bonus and use that revenue and put it back into the
American economy to generate small business activity through the SBA,
put it back into people's hands.
We do believe that people are more important than profits. We should
in fact reward work rather than wealth. If I understand the transfer
tax on Wall Street speculators, it is one-quarter of one penny of each
dollar being traded on nanosecond trades. This is not going to be a fee
or a transfer tax placed on those who are speculating for the long-term
investment. It is going to exclude any tax-favored retirement accounts,
any HSA, Health Savings Account, any Education Savings Account, and
would exclude the first $100,000 of your income generated from your
investment in America's future on our American exchanges.
Some people have pushed back against that Wall Street transfer fee by
saying then people will trade overseas. In London, which is the most
active trading floor in the world, they do have a transfer fee twice
what we are suggesting.
So, again, the idea is we want to use the Tax Code to reward people
for their good activity. And, most especially, we want to use existing
structures like our community banks, our credit unions, and regional
banks to find the finances and credit necessary for small businesses
once again to have access to the credit they need to generate the
economic activity and generate the jobs.
Don't think for a minute that the Federal or State government can
employ you and work our way through this recession with government-
sponsored jobs. We can't do that. So it is the role of government to
set up a system wherein you are rewarded for your work rather than your
wealth. By focusing on our transportation and infrastructure needs, we
can begin to generate millions and millions of jobs to do just that. We
want people to stay in their own homes once again, rather than have
this foreclosure crisis come back and bite us.
Mr. BRALEY of Iowa. I appreciate those observations. I want to engage
a couple of my colleagues in a conversation about behavior modification
on Wall Street. I am going to start with my friend from Vermont,
because he served on the Oversight and Government Reform Committee in
the last Congress when we had the hearing with the CEOs of AIG, trying
to explain why they stood by and watched as their London financial
services division drove this economy off a cliff by engaging in excess
and speculative trading in high-risk credit default swaps and complex
derivatives.
Now, one of the things we learned during that hearing from the
economic experts who study those high-risk investments was that long
before any of us came to Congress, Congress was confronted with the
issue of how we provide some type of oversight of this highly complex
and evolving marketplace, which at that time in the late 1990s was a
small fraction of the $100 trillion marketplace it has become.
But what was most shocking to me as they testified was when they said
Congress was trying to decide what are these products. In a way, they
are like an insurance product, because they are an agreement to pay
upon a contingent future event. But they are really not insurance,
because otherwise we could regulate them through the State insurance
commissioners. Then they said, Well, these are kind of like stock
trading, so we can have this regulated by the Securities and Exchange
Commission. But it is really not a stock transaction.
So, what is it? Well, about 10 percent of these products, those
experts testified, if you remember, Mr. Welch, were real insurance
products. And these economists testified the other 90 percent were
pure gambling, people trying to make money by turning over
transactions, betting on the come that at some point when those
commitments came due, they would be able to generate a profit without
adding anything of value, other than risk and a possible payment in the
future.
[[Page H1017]]
So, why is it necessary, when we are talking about ending excessive
speculation, to get to the very core, not only of how you do that with
a tax policy and with a transfer fee, but also how you deal with the
financial oversight of the marketplace to make sure this never happens
again?
Mr. WELCH. Well, I appreciate that. You know, really what it is about
is whether banking is going to be an activity that is about lending
money to businesses, small businesses, families, to buy their first
home, or it is going to be a mechanism for financial speculation. And
it is really two totally different models.
I want to just take up on what you were saying. We need a banking
system. We need a strong banking system. We need local bankers who are
actually engaged in their community, who can make judgments about who
is good for a loan. I want to give you an example of the local bank and
the Wall Street operation.
In St. Albans, Vermont, we have a small bank, People's Bank. The
president of that bank, Rick Manahan, his desk is in the entry of the
bank. If you walk in, you see all the teller windows. There is a big
vestibule area, the public area. His desk is there. People do not have
a hard time asking Rick what is going on. He knows the folks in his
community.
His bank and his board of directors see a good day's work when, at
the end of the day, they have been able to authorize a loan to a local
business--it might be a retailer, it might be a construction company--
knowing that that business is going to use that money to help create a
local job. Or it is a young family getting started. They have to make a
tough underwriting decision. But they know that family, and they know
they are going to do their level best to be good for it. At the end of
the day, a house has been sold, a family has got a new place to live,
and they go home and sleep pretty good at night, knowing that they have
made a real contribution in the community.
The other model, just to give you an example, one of our most
esteemed Wall Street banks, is Goldman Sachs.
{time} 2145
They have the best and brightest of folks doing the work there. But
here's one of the things that they did--and it was very successful for
them making money. They bought a mortgage origination company in the
South. They hired 26, 30-year-old young people to go out, knock on
doors, and sell mortgages. Generally, subprime mortgages that people
couldn't afford and didn't need. They then brought those mortgages back
to New York, and they bundled them into products that they then sold.
But before they sold them, they got the best and brightest MBAs to
knock on the doors of the rating agencies and persuade the rating
agencies that these toxic instruments were AAA. Then they went to their
sales department and had them contact trusted investors, pension funds,
and said, We've got some AAA products here. You ought to buy them. It's
going to be a good return for your pensioners. And they sold them. Then
they went to their trading room and they said, You know what? These are
junk. How do we know? We sold them. And they bet short against the
instruments they'd just sold long.
That would not happen at People's Trust in St. Albans, Vermont. They
couldn't even imagine doing that, selling something that wasn't worth
investing in. They couldn't do it. And I know that every single one of
us, Republican and Democrat, have local bankers who've met that
standard, where the goal is to serve the community. And they know that
their responsibility with this trust that they have of depositor money
is to put it to good work to build the economy.
Wall Street has a different point of view. Not that they're not
necessary; they obviously are. But when they are helpful, they see that
the work that they do should be in service of the work that Main Street
does. You know, that's why with the reforms that we must implement,
whether it's a bonus tax, whether it's a Consumer Product Safety
Commission, whether it's tightening up on the lending regulations and
derivative trading, all of that, the bottom line is really very simple:
Is the banking system going to be there to serve us, or are we going to
be there to serve the financial engineering of the banking system?
That's the question that this Congress faces and America wants an
answer to. I yield back.
Mr. BRALEY of Iowa. I thank the gentleman for your comments. We are
just about out of time so I'm going to ask my friend from Florida for
some closing comments, especially on this critical issue that affects
the middle class homeowners, and that's the mortgage foreclosure
crisis.
Mr. KLEIN of Florida. I want to thank the gentleman. Just sort of as
an add-on to what we're talking about, we all know that homeownership
in the United States is crucial. It's crucial for people knowing where
to plant their investment. They're working hard over the years to make
sure they have a place to live, and hopefully it will increase in
appreciation. But that same description that Mr. Welch just gave us
about banking practices, in some cases resulted in, unfortunately, a
whole lot of people getting in way over their heads, a whole lot of
lending that shouldn't have never been lent in the first place, and the
foreclosure situation is really bad in many places.
I witnessed something over the weekend in West Palm Beach. In the
West Palm Beach Convention Center a group came into town and said, We
are going to bring together the lenders who, in many cases, have not
been answering the phone, the line is busy or people haven't been
getting answers, along with people that are having these real big
problems, they can't make their mortgage payments. It's not like
they're totally out of it. They may have had a job that was earning
$50,000 a year, and they lost it, and now they're earning $35,000. Or,
maybe a two-income household that they want to stay there. And we, as
Americans, want them to stay there, if they can. We don't want
abandoned houses. It just puts more pressure on the local streets and
the local community.
At this event over the weekend--it was running for 5 days, 24 hours a
day--and all the major lenders were there, except for one. It was
really interesting; 5,500 people were in this building at one time. I'd
never seen anything like this. And they had the lenders sitting across
the table, here to here, and they were actually ironing out one after
another. One guy had an 11 percent mortgage. It was reduced to 5\1/2\
percent. His payment went from $2,100 to $1,300. And I asked him, Can
you make do? He said, Yes. I'm keeping my house. I'm sleeping tonight.
My children know they have a place, a roof over their head tonight.
Well, this has been frustrating, but help is on the way. Help is on
the way. And I think that the model has now been created. It's working
in different parts of the country. But I'm really gratified to see that
some people in south Florida were given that opportunity. There's a lot
more to work through in all of our communities, but I'm starting to see
some success, and that's part of how our recovery is going to happen,
by putting the necessary pressure for people to get together and make
this work.
Mr. BRALEY of Iowa. And that's why the Blueprint for Recovery we've
been talking about that the Populist Caucus has put forward--real
solutions, concrete solutions, that are going to help us get out of
this mess, by ending excessive speculation on Wall Street, making sure
that we have a fair compensation system for the people who have gotten
us into this mess, and spurring job creation with things like the Wall
Street Bonus Tax Act, the National Infrastructure Development Act, the
Make Wall Street Pay for the Restoration of Main Street Act, and the
Buy American Improvement Act.
These four commonsense bills will make an enormous impact on the
quality of life for middle class families. They also represent true
populist policies that are about building America up, not tearing it
down. It's about giving voice to the legitimate concerns of the
American people who made this country great.
With that, I thank my colleagues, and I yield back the balance of our
time.
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