[Congressional Record (Bound Edition), Volume 154 (2008), Part 14]
[House]
[Pages 19933-19934]
[From the U.S. Government Publishing Office, www.gpo.gov]




                        BAILING OUT WALL STREET

  The SPEAKER pro tempore. The Chair recognizes the gentleman from 
Florida (Mr. Stearns) for 5 minutes.
  Mr. STEARNS. Mr. Speaker, it is also with great concern that I come 
before my colleagues to address a financial crisis of epic proportions.
  Our Federal Government has taken drastic measures mainly in the form 
of a taxpayer-funded bailout in an attempt to put a stop to the 
complete deterioration of our financial system.
  Just this weekend, the administration composed a comprehensive 
bailout to relieve private sector financial institutions and banks of 
their toxic mortgage assets to the tune of 700 billion taxpayer-backed 
dollars.
  This plan increases our excessively high national debt to $11.3 
trillion while also allowing foreign banks, which hold U.S. mortgage 
debt, to benefit from the billions provided by this bailout.
  This plan constitutes the largest government bailout in history, yet 
it does nothing to protect the taxpayers. The Secretary of Treasury 
will have unlimited authority to purchase the most toxic of assets from 
any number of solvent, private sector financial institutions.
  Furthermore, this plan comes in the wake of last week's $85 billion 
bailout of major insurance company American International Group and the 
Treasury's $200 billion bailout of out-of-control GSES Fannie Mae and 
Freddie Mac.

[[Page 19934]]

  Mr. Speaker, these bailouts come at a great price and expose American 
taxpayers to vast financial risk. Through these bailouts, our Federal 
Government is effectively risking hard-earned taxpayers' dollars to 
protect private sector companies that utilized reckless investment 
strategies with little regard to the consequences. Clearly, our 
financial and regulatory structures have failed us, and now the looming 
question on everybody's mind is, who is next?
  Mr. Speaker, bailout after bailout is not a strategy, and it is 
certainly not a sustainable cure to our financial ills. These bailouts 
are an assault on American capitalism and have introduced a large 
degree of financial hazard into our economic system.
  As an elected official, I am worried about this weekend's 
comprehensive bailout plan that gives the Secretary of Treasury 
unprecedented authority and virtually no oversight, aside from having 
to submit semiannual reports to Congress. This is unacceptable, and we 
must do something to protect taxpayers before adjourning this Congress.
  Several years ago I became concerned with the financial picture of 
both Fannie Mae and Freddie Mac, when as a member of the oversight 
subcommittee of the House Energy and Commerce Committee, I participated 
in the Enron hearings, and learned of the fraud and abuses perpetrated 
through accounting procedures. Moreover, I heard how Freddie Mac had 
also misapplied the Financial Accounting Standard Board's (FASB) 
standards for derivatives and hedging in its financial statement.
  In 2003, as Chairman of the Commerce, Trade, and Consumer Protection 
Subcommittee, I held hearings on FASB accounting standards, including a 
hearing on Freddie Mac's fraudulent accounting practices. I planned on 
holding additional hearings on Freddie Mac's restatement, and 
developing legislation on accounting standards when jurisdiction over 
FASB was suddenly stripped away from my subcommittee and transferred to 
the Financial Services committee--seemingly the result of intensive 
lobbying efforts on Freddie's part.
  I firmly believe, my colleagues, we need to establish congressional 
oversight of the Treasury, perhaps in the form of a commission that can 
monitor the transfer of this money, so that we may have better 
accountability and transparency as the government proceeds in bailing 
out company after company.
  Additionally, we need better regulatory structures, and we should 
institute immediate controls to prevent massive short-selling of stocks 
which only further corrodes the market. And, further, we must ensure 
that the CEOs of these solvent, private companies do not walk away with 
millions of dollars in severance packages at the expense of taxpayers. 
Why not give taxpayers warrants for the upside in these companies that 
are being bailed out by taxpayers so that they benefit from this 
sacrifice? Unfortunately, this plan would put taxpayers at a risk for 
losses that belong to those companies that recklessly sought profits--
profits for the stockholders and executives through dividends, 
salaries, bonuses and presumed stock appreciation.
  I stress to my colleagues today, this is not a case of partisan 
politics. Our constituents' 401(k)s are at risk. The nationalization of 
private assets is inherently un-American. As free enterprising 
Americans, we need to let our markets determine the winners and the 
losers, not the United States Treasury.
  Economists say we are in the midst of the greatest financial crisis 
since the 1930s, and yet the Democratic leadership intends on ending 
this 110th Congress on Friday.
  Mr. Speaker, we have more work to do. We should not adjourn this 
Congress until we have a set of real solutions to work with, and these 
solutions should not involve risking any additional taxpayer dollars. I 
firmly believe that our Congress has a bigger role to play in ensuring 
that bailout and bankruptcy are not words the American people get used 
to hearing. We owe at least that much to the people who put us here.
  The plan developed this weekend puts taxpayer dollars at risk with 
little or no benefit to those who pay the taxes, and I stand here today 
to firmly oppose it.
  The Federal Deposit Insurance Corp. is a likely candidate to seek a 
taxpayer-funded ``loan'' or bailout from the government. This is 
particularly worrisome, given the fact that the FDIC exists for the 
sole purpose of insuring the deposits in our Nation's banks. If the 
FDIC's insurance fund continues to slip as bank failures persist, we 
may be facing another Treasury rescue.

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