Congressional Record, Volume 156 Issue 95 (Wednesday, June 23, 2010)

[Congressional Record Volume 156, Number 95 (Wednesday, June 23, 2010)]
[House]
[Pages H4682-H4685]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

REQUIRING CERTIFICATION FOR SMALL BUSINESS LENDING FUND

Ms. KOSMAS. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 5551) to require the Secretary of the Treasury to make a
certification when making purchases under the Small Business Lending
Fund Program, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:

H.R. 5551

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,

[[Page H4683]]

SECTION 1. CERTIFICATION UNDER THE SMALL BUSINESS LENDING
FUND PROGRAM.

Before the Secretary of the Treasury makes the first
purchase (including a commitment to purchase) under the Small
Business Lending Fund Program under the Small Business Jobs
and Credit Act of 2010, the Secretary shall certify, under
oath, to the Inspector General of the Department of the
Treasury, with a copy to the Comptroller General of the
United States, that the purchase-decision process has been
designed so that each purchase decision is made solely on the
basis of economic fundamentals and not because of any
political considerations.

The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from
Florida (Ms. Kosmas) and the gentleman from Texas (Mr. Neugebauer) each
will control 20 minutes.
The Chair recognizes the gentlewoman from Florida.

General Leave

Ms. KOSMAS. Mr. Speaker, I ask unanimous consent that all Members may
have 5 legislative days within which to revise and extend their remarks
on this legislation and to insert extraneous material thereon.
The SPEAKER pro tempore. Is there objection to the request of the
gentlewoman from Florida?
There was no objection.
Ms. KOSMAS. I yield myself 3 minutes.
Mr. Speaker, last Friday, the House approved H.R. 5297, the Small
Business Lending Fund Act, which creates important programs designed to
increase access to capital for small businesses and which allows them
to create new jobs.

{time} 1030

I would like to thank Chairman Frank, Congressman Gary Peters,
Congresswoman Melissa Bean, and Chairwoman Nydia Velazquez for their
hard work and effort on this legislation. The bill will encourage new
lending by financial institutions, and this will help small businesses
access the capital they need to continue innovating, growing, and
creating jobs in our communities.
During the debate on this bill, the minority offered a good
suggestion for the oversight of the Small Business Lending Fund,
specifically regarding the disbursement of the funds provided for under
the program. Today, we are here to take action on their suggestion to
enhance this oversight.
I am pleased to sponsor, along with Mr. Driehaus, H.R. 5551, which
will require the Secretary of the Treasury to certify, under oath, to
the Inspector General that determinations on the disbursements from the
Small Business Lending Fund are based on economic need and not
political considerations. We believe this enhanced oversight to be a
good addition to the already existing oversight for the program, and we
believe that it will go further to make sure that the necessary funds
are made available to the small businesses in the areas of the country
and of the economy that need it the most. H.R. 5551, together with H.R.
5297, will provide much-needed assistance to small businesses across
the Nation. I urge my colleagues to support this effort.
Mr. Speaker, I reserve the balance of my time.
Mr. NEUGEBAUER. Mr. Speaker, I yield myself such time as I may
consume.
Last week I did offer a motion to recommit that would have required
Treasury to certify that every transaction made from the $30 billion
TARP Jr lending fun be made on the basis of economics and not politics.
As we pointed out during our debate last week, there are several
examples of lending to banks out of the first TARP fund that raise
questions of whether political considerations were involved in deciding
which banks received this money.
When we voted on the issue last week, 237 Members of the other side
of the aisle voted against having Treasury certify that each
transaction using the taxpayers' $30 billion is based on economics and
not politics. Those same Members all voted against putting an
experienced and effective regulator over the new program, simply
because the regulator has TARP in his title. When the Treasury
Department lends $30 billion more of taxpayers' money out to banks, the
taxpayers deserve better protection than they are getting.
The majority last week exposed the taxpayers to greater likelihood of
waste, fraud, and abuse and added to the cost of setting up a new
regulator when we already had one. Today, the majority is back on the
floor trying to make amends for their vote against the taxpayers.
During the debate last week, Chairman Frank said, We'll go you one
better in this effort. Let me repeat that. We'll go you one better. If
the bill on the floor today is ``one better'' than our proposal, I
would hate to see what happened if the majority tried to go ``one
less.''
The bill today does not require a certificate for each investment
transaction, as our motion to recommit would have required. Instead,
this bill only asks Treasury to certify that the purchase decision
process has been designed to ensure decisions are made because of
political considerations. Let me repeat that: Certifying that the
purchase decision process is designed so that decisions are made based
on economics and not political is not going one better than certifying
that each actual purchase with the taxpayers' money was made based on
economics and not politics.
I'm sure the purchase decision process for the original TARP was not
intended to bring any politics into play. While I may not have
supported TARP, the purchase decision process was aimed at investing
capital in healthy banks to support banks in lending. However, when the
individual investment decisions were made with the first TARP,
legitimate questions have come up whether political and considerations
involving certain banks receiving funds were in fact taken into
consideration.
As we recreate this second TARP for smaller banks, we need to make
sure that our past problems are not repeated. This bill falls short of
a motion to recommit that we offered last week. Last week, Chairman
Frank said, We'll come forward with further reinforcement of the oath-
taking--we'll even make it oath-taking. Having Treasury certify under
oath that the decision process for this new TARP fund for small banks
is based on economics and not political is not further reinforcement.
It is not even the same as requiring Treasury to certify that each
specific investment decision is based on economics or not politics, and
I think the taxpayers are smart enough to see the difference.
Mr. Speaker, let me just make an example here. What this process that
our colleagues on the other side have brought is the same promise that
every 16-year-old young woman or young man makes to their parents when
they get their driver's license and borrow the car: promise me you
won't ever get any tickets. And they promise. And so basically what
we're going to have is the Treasury is going to take an oath that we
promise we won't let politics be involved in this process. But we'll
have no certification on whether politics, as these transactions play
out, whether politics or influence was used to influence how these
investments were made. And so we're going to take an oath up front, but
no certification during the process. I don't think that's good policy.
With that, I reserve the balance of my time.
Ms. KOSMAS. Mr. Speaker, I yield such time as he may consume to the
gentleman from Ohio (Mr. Driehaus).
Mr. DRIEHAUS. Mr. Speaker, I thank the cosponsor of this resolution,
Ms. Kosmas, for yielding.
Last week, we passed the Small Business Lending Fund Act. I offered
an amendment at that time that would create the Office of Small
Business Lending Fund Oversight under the authority of the Treasury
Inspector General. This office would strengthen accountability by
helping ensure that loans are being put to use where they're most
needed and put to use in a way responsible to taxpayers. The bill we're
now considering would further improve oversight by requiring the
Treasury Secretary to certify to the Treasury Inspector General, under
oath, that loan disbursements are based on economic need and not
political considerations.
Credit where credit is due, Mr. Speaker. This idea was brought to the
floor last week in a Republican motion to recommit. However, that
measure would have required a special certification to the Special
Inspector General for TARP, which is not the appropriate

[[Page H4684]]

oversight body for this bill. The Small Business Lending Fund is not
part of TARP, and it isn't reliant upon TARP funds. But it is
critically important that these loans are helping small businesses to
invest and create jobs.
This legislation will provide greater assurance that the Small
Business Lending Fund is most effective in aiding our recovery, and I
urge speedy passage. However, I think I would be remiss if I weren't to
comment on the gentleman from Texas's comments, and that is this
comparison between the oath being taken by the Treasury Secretary and a
16-year-old driver. I do in fact believe an oath taken by the Secretary
of the Treasury, just like an oath taken before a committee of
Congress, means something, and it means something very serious.
Now, as much as the gentleman from Texas and his colleagues would
have us want to talk about the TARP, this is not the TARP. This was
never the TARP. And I want to remind the Members about the Inspector
General at Treasury because we treat the Inspector General at Treasury
as if he hasn't done this before. Several references were made last
week to his inability.
So I want to talk just a minute about this. The Small Business
Lending Fund will not be a TARP program. It will not be funded with
TARP money, and the oversight body should not be TARP either. In fact,
we're giving it to the Inspector General at Treasury, Mr. Thorson, who
served as the Inspector General for the Small Business Administration
from 2006 to 2008. In that short time, Mr. Speaker, his office
uncovered what is believed to be the largest government-backed loan
fraud scheme in history. He's not an amateur. Roughly $75 million was
uncovered in that loan investigation. As a result of their
investigation, they arrested 15 people in one day and convicted the
executive vice president of one bank and the vice president of another.
Again, this is not TARP money. I realize that doesn't fit with the
overall political objective of the opposition to suggest that we are
extending yet another TARP. This is not TARP. This is about getting
money to small businesses and creating jobs in the United States.
Mr. NEUGEBAUER. Mr. Speaker, I appreciate the Democrats wanting to
bring a little bit of additional oversight into this. So I would ask
unanimous consent, then, that we take the language from the motion to
recommit that says the Secretary shall have to certify every
transaction and make that a part of the text of this bill.
The SPEAKER pro tempore. The proponent of the motion would have to
withdraw and offer a new form of the motion to achieve that end.
Mr. NEUGEBAUER. So I guess my colleagues are not really serious about
making this oversight stronger. We're going to go with the watered-down
language, which basically says the Secretary is going to certify that
we're going to put together a little process here and we think that,
one, it will not be based on politics or influence from outside, but
we're not going to make him accountable for each billion-dollar
investment or millions of dollars of investment of the taxpayers' money
into these banks. And so I wish my colleagues on the other side were
actually serious about what we're doing here.
I appreciate the majority's trying to address these shortcomings.
However, I've already covered that today's bill falls short of the
protections for taxpayers offered in the motion last week. At the same
time, the majority said those protections were just another
bureaucratic layer in the process. I don't think the taxpayers see it
that way. Just like the Capital Purchase Program within TARP, this new
$30 billion lending fund will make capital investment in banks with
taxpayers' dollars. Unlike the TARP program, however, this new program
will lack the strong oversight provided by the Inspector General for
TARP or SIGTARP. That same SIGTARP last week announced a $2 billion
fraud indictment involving an attempt by a bank to obtain TARP money.
The regulator put in charge of this new TARP-like fund, the Treasury
Inspector, was not even involved in this fraud case.

{time} 1040

According to GAO and the Treasury Inspector General's report, the
Treasury Inspector General is currently focused on material loss
reviews required for failed banks due to the large number of bank
failures. Adding oversight of the $30 billion lending fund will require
more resources, creating more bureaucracy when we already have in place
an agency that can do this job.
SIGTARP has considerable experience overseeing a program in which
government purchases preferred stocks in banks--TARP and TARP 2, both
the same program. If we create a new TARP program that will also
purchase shares in banks, we should use the same oversight agency that
has a proven track record and expertise. Doing less is a disservice to
the taxpayers. Merely requiring certification that the process the
Treasury intends to use will prevent politics from coming into play is
not the same as requiring Treasury to certify that each transaction
made was based on economics and not politics.
The majority can't have it both ways. You can't say you are going to
go ``one better'' than the protections in our motion to recommit that
you called another ``bureaucratic layer'' and then do less, which
basically is the bill that they brought before us today.
I reserve the balance of my time.
Ms. KOSMAS. Mr. Speaker, I yield such time as he might consume to the
gentleman from Ohio (Mr. Driehaus).
Mr. DRIEHAUS. I thank the gentlelady for yielding.
Mr. Speaker, again, this is a straightforward amendment. If you want
to make sure that politics isn't involved in the Small Business Lending
Fund, you want to make sure that the Treasury is sticking to their oath
and making sure that these are based on economic decisions, then you
vote for this bill. If you believe politics should be part of it, then
vote against it.
We keep missing the mark here in terms of the Republicans. The
Republicans want to talk about SIGTARP. This isn't about TARP. No more
should SIGTARP be overseeing the Department of Defense than should they
be overseeing small business lending. This is about Treasury and making
sure that politics aren't part of the decisions being made at Treasury.
Again, if the Republicans think politics should be part of the
decision, they can vote ``no,'' but we took them at their word that
they didn't think politics should be part of the Treasury function.
We've taken it away through the Inspector General. The Inspector
General has an incredible track record. We respect that track record.
And if the Republicans don't respect it, they can, with all due
respect, vote against this. But again, this is not TARP money. As much
as they would like to have us believe that this is, again, another
TARP, it is not. And I realize that doesn't fit into the political
rhetoric that is so often used around here, but it is the reality.
Mr. NEUGEBAUER. I will remind the gentleman that the original TARP
program was the Federal Government investing taxpayer dollars into the
preferred stock of banks. I would encourage the gentleman to read the
text of this bill that we passed last Friday. And what does that say?
It says the Federal Government will tax the taxpayers' money and
provide preferred stock. Now you can try to call it something else, but
it's a TARP program.
I want to go back to something that happened last week. During that
debate, the gentlewoman from New York (Ms. Velazquez) said that those
of us on this side of the aisle wanted to keep TARP going. Let's go
back to the record here. I didn't get a chance to respond then, so I
want to set the record straight.
TARP was supposed to expire on December 31, 2009, and there was
strong support for allowing TARP to expire. In fact, more than 100 of
us on this side of the aisle sent a letter to Treasury Secretary
Geithner that urged him to let TARP expire. In fact, we introduced
legislation to force the expiration of TARP. We voted against the
majority's legislation to divert TARP funds for other spending. But the
Treasury Secretary extended TARP through this October, and the majority
did nothing to stop it.
Just as we are, again, getting close to having TARP expire, the
majority brings up a bill that creates what is essentially a second
TARP program, and it will last for years. So who wants to keep TARP
going? Rather than doing something that creates more certainty

[[Page H4685]]

for small businesses to grow and add jobs to this economy, the majority
is repeating the same failed initiatives that have helped grow our
national debt to over $13 trillion in the past 2 years.
We've had record bank failures, including four banks that were TARP
recipients. When those TARP recipient banks failed, the taxpayers'
investment of $2.6 billion was essentially wiped out. More than 100
banks that have received TARP funds have missed their dividend
payments. These missed dividend payments have cost the American
taxpayers more than $200 million. The sad thing is that there are
things Congress could do that actually help small businesses. Instead,
the majority has chosen to pass a bill that will cost taxpayers
billions of dollars and do nothing, really, to help small businesses.
And today the majority has chosen to provide fewer taxpayer protections
than we offered last week.
Mr. Speaker, I appreciate the fact that the majority thought we had a
good idea. I just wish they would have used our idea. So the vote today
is, Do you want to make sure that the taxpayers have a strong
oversight, or do you want a watered-down version?
I yield back the balance of my time.
Ms. KOSMAS. I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentlewoman from Florida (Ms. Kosmas) that the House suspend the rules
and pass the bill, H.R. 5551, as amended.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds
being in the affirmative, the ayes have it.
Ms. KOSMAS. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the
Chair's prior announcement, further proceedings on this motion will be
postponed.

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