[Congressional Record (Bound Edition), Volume 154 (2008), Part 14]
[House]
[Page 19933]
[From the U.S. Government Publishing Office, www.gpo.gov]




                          WALL STREET BAILOUT

  The SPEAKER pro tempore. The Chair recognizes the gentleman from 
Oregon (Mr. DeFazio) for 5 minutes.
  Mr. DeFAZIO. Well, Secretary Paulson has submitted a simple proposal 
to Congress. This is it, three pages. It is about $1 billion a word, 
and it is quite simple: Secretary Paulson gets the key to the Treasury, 
can start off by borrowing $700 billion in the name of the American 
people, maybe more later, and it waives all laws. All laws. No 
oversight, no one looking over his shoulder, no conflict of interest 
rules. Not even court review. A pretty simple proposal.
  He insists this has to be done, without meaningful discussion or 
debate or any change by the Congress, sort of an immediate 
authorization for use of financial force. Does this remind anybody of 
anything, like the rush into Iraq on election eve a number of years 
ago? It is all too familiar.
  He wants to take care of Wall Street's illiquid assets, as what he 
nicely labels them. Nice charitable pundits have said Cash For Trash. 
Wall Street could then return to business as usual. That is Mr. 
Paulson's plan. He is of, by, for, and about Wall Street, former head 
of Goldman Sachs. He wants to go back to the way things were.
  They should never go back to the way things were. There need to be 
consequences, and there needs to be major change in the financial 
structures and the financial instruments and the regulation of Wall 
Street, something this administration still continues to deny, or says, 
oh, we'll do it later after we give them everything they want up front, 
after we bail them out.
  Now, many want a condition on what will happen here. They want to 
have oversight. That is good. They want to limit executive compensation 
for any firm that takes a bailout. That is good. They want a linkage to 
a Main Street stimulus package and jobs. That is good. Those are all 
good. But we have got to question and take our time here to question 
the basic premise: Should we just take all their junk that people like 
Hank Paulson created, exotic instruments, the big party they have been 
throwing? Should we just take that and give it to the taxpayers and 
borrow the money from who knows where? Or, should we take an equity 
stake in these firms? That is what the government did when it bailed 
out Chrysler. It said, okay, we'll bail you out, but we own you; and 
when you come back, we're going to make money for the taxpayers.
  Secretary Paulson wants to set it up so that the taxpayers at best, 
and in an all likelihood this wouldn't happen, might break even some 
day. No. We need to take an equity assurance in these firms, or we need 
to extend them loans, have them marked down as junk to market. There's 
a market for it. It's about 22 cents on the dollar. Make them mark it 
down. And then if they're threatened and they're liquid, they can come 
to us and ask for a loan, and the terms are going to be stiff. And we 
aren't going to give it to just any one of these firms. No. We need to 
do this. We need to do it with oversight, and executive compensation is 
key no matter which way we go.
  Oh, let the boards of directors control. Come on, boards of directors 
are all like first cousins and closer. These people are all feathering 
each other's nest. Hank Paulson himself got a $50 million bonus for 1 
year, the same year Wall Street rewarded itself with $60 billion in 
bonuses. That is not a mistake. Billion dollars in bonuses in 2006.
  These people are out of control. They don't understand the real 
world. And for them to talk about Main Street and pretend they're 
populist and they care about Main Street and student loans and 
homeowners' equity is a bunch of BS.
  We need major structural reform, and we are the last bulwark here, 
the House of Representatives, the United States Senate. Because if we 
pass this bill as they propose it, we will be doing an incredible 
disservice to the American people, to the world economy. And what if 
his bet doesn't work? Yeah, the execs come out whole and they scoot 
that money offshore into hidey-holes or into gold or something else. 
But what if it doesn't work? And we have extended our credit about as 
far as it will go. Where are we going to borrow $700 billion? What is 
the next step?
  We need a much more targeted, deliberative approach. Congress can't 
come up with it in 3 days or 4 days. We shouldn't be rushed into this. 
If it takes a week, 2 weeks, 3 weeks, a month, the world will wait. 
They will wait for a thoughtful plan that cures the disease in addition 
to getting us beyond this initial problem. That is the job of this 
Congress. We should not be rolled by our Wall Street exec who is 
masquerading as Secretary of the Treasury.

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