[Congressional Record (Bound Edition), Volume 154 (2008), Part 16]
[House]
[Pages 22914-22925]
[From the U.S. Government Publishing Office, www.gpo.gov]




PROVIDING FOR CONSIDERATION OF SENATE AMENDMENT TO H.R. 3997, EMERGENCY 
                   ECONOMIC STABILIZATION ACT OF 2008

  Ms. SLAUGHTER, from the Committee on Rules, submitted a privileged 
report (Rept. No. 110-903) on the resolution (H. Res. 1517) providing 
for consideration of the bill (H.R. 3997) to amend the Internal Revenue 
Code of 1986 to provide earnings assistance and tax relief to members 
of the uniformed services, volunteer firefighters, and Peace Corps 
volunteers, and for other purposes, which was referred to the House 
Calendar and ordered to be printed.
  Ms. SLAUGHTER. Mr. Speaker, by direction of the Committee on Rules, I 
call up House Resolution 1517 and ask for its immediate consideration.
  The Clerk read the resolution, as follows:

                              H. Res. 1517

       Resolved, That upon adoption of this resolution it shall be 
     in order to take from the Speaker's table the bill (H.R. 
     3997) to amend the Internal Revenue Code of 1986 to provide 
     earnings assistance and tax relief to members of the 
     uniformed services, volunteer firefighters, and Peace Corps 
     volunteers, and for other purposes, with the Senate amendment 
     to the House amendment to the Senate amendment thereto, and 
     to consider in the House, without intervention of any point 
     of order, a motion offered by the chairman of the Committee 
     on Financial Services or his designee that the House concur 
     in the Senate amendment to the House amendment to the Senate 
     amendment with the amendment printed in the report of the 
     Committee on Rules accompanying this resolution. The Senate 
     amendment and the motion shall be considered as read. The 
     motion shall be debatable for three hours equally divided and 
     controlled by the chairman and ranking minority member of the 
     Committee on Financial Services. The previous question shall 
     be considered as ordered on the motion to final adoption 
     without intervening motion.
       Sec. 2. During consideration of the motion to concur 
     pursuant to this resolution, notwithstanding the operation of 
     the previous question, the Chair may, postpone further 
     consideration of such motion to such time as may be 
     designated by the Speaker.

  The SPEAKER pro tempore. The gentlewoman from New York is recognized 
for 1 hour.
  Ms. SLAUGHTER. Thank you, Mr. Speaker.
  For the purpose of debate only, I yield the customary 30 minutes to 
my friend from California (Mr. Dreier). All time yielded during 
consideration of the rule is for debate only. I yield myself such time 
as I may consume. I also ask unanimous consent that all Members be 
given 5 legislative days in which to revise and extend their remarks on 
House Resolution 1517.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentlewoman from New York?
  There was no objection.
  Ms. SLAUGHTER. Mr. Speaker, I am saddened to say that rarely has this 
body met under more dire circumstances. Our stock market is a

[[Page 22915]]

roller coaster and the unemployment rate has soared. Many of our 
financial institutions, some of which were deemed ``too big to fail'' 
are on the brink of collapse. Our economy, the biggest and most robust 
in the world, is at a standstill.
  This is the greatest financial crisis since Herbert Hoover's 
administration's lack of oversight led our Nation into the Great 
Depression.
  We cannot steer ourselves through this crisis until we fully 
understand the road that we took to get here. After all, if we do not 
know what went wrong, how can we be sure to get it right in the future?
  Like so many Americans and Members of the New Direction Congress, I 
am deeply disappointed by this administration's reckless deregulation 
that wrecked our once-booming economy.
  Since the beginning of his first administration, President Bush has 
put incompetent people in charge of the Nation's most critical 
regulatory agencies; but because of this administration, big business 
always came first.
  A complete loss of transparency and a reliance on voluntary measures 
led to the total deregulation of the financial services industry. Yet 
as SEC Chairman Christopher Cox said this week, ``The last 6 months 
have made it abundantly clear that voluntary regulation does not 
work.''
  He went on to say the program was ``fundamentally flawed from the 
beginning, because investment banks could opt in or opt out of 
supervision voluntarily. The fact that investment bank holding 
companies could withdraw from this voluntary supervision at their 
discretion ``diminished the perceived mandate'' and ``weakened its 
effectiveness.''
  As President Franklin D. Roosevelt said, ``We have always known that 
heedless self-interest was bad morals. We now know that it is bad 
economics as well.''
  This administration should have heeded Roosevelt's advice and 
followed his path to economic recovery by reinstituting important 
regulations on Wall Street. It is shocking and shameful that it took 
this catastrophe to show the administration that big business cannot be 
expected to regulate itself in good conscience.
  A recent survey by the University of Michigan found that 9 in 10 
Americans feel that the economy is in a recession. It took a crisis of 
this magnitude to teach this administration what the American people 
clearly knew. And every day that Americans see the financial sector 
falter, they lose confidence in our economy. With many of the country's 
major financial institutions declaring bankruptcy or on the verge of 
declaring bankruptcy, we no longer have a choice on whether to offer a 
rescue package. The alternative, we've been told, is pure disaster.
  Financial failures help no one and put the savings of every family in 
jeopardy. Our jobs, our retirement savings, our college savings 
accounts for our children's future, our investments in our own future 
are at risk due to the failure of this industry.
  I have heard from hundreds of my constituents who are enraged at the 
lack of oversight that caused this mess. Congress is going ahead with 
this intervention because we've been warned that without it, Main 
Street could feel as much pain as Wall Street.
  When deregulation happened in the last century, it led to bread lines 
and Hoovervilles. Today, the New Direction Congress is working to 
shield Main Street from all of that and to lead us out of this mess to 
a brighter and more prosperous future.
  As FDR said, ``There are many ways of going forward, but only one way 
of standing still.'' And after much deliberation, we are moving forward 
with a bill that we hope will benefit all Americans. We believe and 
hope that this legislation can begin to stabilize our markets and start 
recovering consumer confidence.
  One week ago, we were handed an ultimatum for a blank check of $700 
billion which lacked the very accountability and transparency--let me 
repeat that because this is so important--that demand for the bailout 
lacked the very accountability and transparency that contributed to the 
problem in the first place. And many safeguards, I'm happy to say, have 
been added to this bill since that time.
  We've worked hard to ensure that this package benefits consumers and 
homeowners more than it does the people who caused the crisis. We vowed 
that any bill that we passed would include serious oversight and 
transparency of any funds provided to the Secretary of the Treasury, 
and that's exactly what this proposal does.
  As the Speaker said, we have a three-part plan to reinvest, 
reimburse, and to reform.
  We will first rescue the troubled credit and financial markets to 
stabilize and to reinvest in our economy and insulate hardworking 
Americans; second, we will reimburse the taxpayer for every dime as the 
plan begins to work; and third, we will reform how business is done on 
Wall Street with no more golden parachutes for CEOs, trimmed executive 
compensation, and sweeping congressional investigation and regulations 
to prevent future abuses.
  By passing this bill, we're standing up for all Americans by ensuring 
that there will be no help for Wall Street without this help for Main 
Street. We're standing up for taxpayers by ensuring that this is not a 
blank check, and we are standing up for homeowners by taking actions to 
prevent foreclosures that are driving down home values across America.
  To help Americans keep their homes, this bill will allow the 
government to help modify loans by reducing the principal, the interest 
rate, or by increasing their window of time to pay back the loan.
  Although the administration's initial proposal called for no 
congressional or agency oversight, Democrats will require an appointed 
oversight panel to frequently report to the Congress--monthly--on what 
the Secretary of the Treasury is doing.
  In addition, Democrats insisted that the nonpartisan Government 
Accountability Office, the GAO, will have an office inside the 
Department of Treasury to handle the funds. This will help to ensure 
any money spent is done in a way that is responsible to the American 
people.
  We are committed to using as little taxpayer money as is absolutely 
necessary, and we are set on recovering every cent.
  Oversight and Government Reform Committee Chairman Henry Waxman will 
begin his oversight hearings next Wednesday. And in January with a new 
Congress and a new President, we will be ready to reinstate the 
regulations so cavalierly removed by the administration which believed 
that the financial industry could regulate itself--and it has with very 
dire results.
  Finally, Democrats pushed to ensure that the government receives 
shares of any company that it provides with aid. After agreeing to 
rescue AIG from filing for bankruptcy, the government received a nearly 
80 percent share in that company. The action was reassuring enough to 
the market that people are now clamoring to buy the AIG assets. By 
making sure the government gets shares of companies that we aid, 
Democrats are working to revitalize this industry in a way that will 
benefit the taxpayers who are funding this rescue until the industry 
recovers; and by doing so, the New Direction Congress is standing up 
for swift action to ensure a more sound economic future for all 
Americans.
  Mr. Speaker, we saw what happens when an administration deregulates 
industry to a point where insecure companies are expected to police 
themselves. And that is why this Democrat-led Congress is doing 
everything possible to ensure that America keeps working and that the 
government is working for America.
  I reserve the balance of my time.

                              {time}  0015

  Mr. DREIER. Mr. Speaker, I would like to begin by thanking my friend 
from New York, the distinguished Chair of the Committee on Rules, the 
gentlewoman from Rochester for yielding me the time. I yield myself 
such time as I may consume.
  Mr. Speaker, like most of my colleagues, I'm mad as hell that we are

[[Page 22916]]

here. This is a very troubling moment in our Nation's history, and it's 
taken an awful lot of difficulty for us to get to this point.
  I'd respond to the remarks offered by my good friend by saying that 
there is enough blame to go around. I'm angry at Wall Street bankers. 
I'm angry at mortgage brokers. I'm angry at individuals who have chosen 
to live way beyond their means, creating an anger level among those 
very responsible Americans who are paying their mortgages, meeting 
their car payments, and their other responsibilities. And I'm angry at 
Washington, D.C., all the way around.
  Mr. Speaker, the underlying financial rescue bill that is before us 
this morning is the product of very difficult negotiations to address 
extremely challenging economic circumstances. Our economy, as we all 
acknowledge, is under tremendous duress right now, and it can be felt 
all across America by individuals and families from all walks of life.
  While the dire circumstances of recent weeks have dominated the 
headlines, working Americans have been witnessing our national economic 
woes for many months. Long before the fall of large investment banks or 
high profile bailouts, they felt substantial economic pressure. They 
have faced steeply rising energy and food prices, while fearing for 
their jobs and their homes. As housing markets have crumbled and the 
credit crunch has ensued, the gulf between Main Street and Wall Street 
has never seemed so huge.
  But, Mr. Speaker, the reality is the two have never been more closely 
entwined than they are right now. Foreclosures on Main Street caused 
the value of many Wall Street assets to plummet. The resulting credit 
crunch has paralyzed growth at businesses, large and small.
  This, in turn, has stunted job creation and driven up unemployment. 
The falling stock market threatens working Americans' pensions, 
retirement plans, and savings.
  From the very beginning of this process, Republicans have known that 
we needed to craft an effective rescue package that returns our entire 
economy to sound footing. We knew that we simply could take an approach 
that pits Main Street and Wall Street against each other. As housing 
prices have collapsed, job creation has stagnated and the stock market 
has fallen, we have all suffered.
  An effective economic plan is badly needed to restore our economy and 
create opportunity and prosperity for all Americans. We simply don't 
have the option or ability to save Wall Street without creating 
opportunity on Main Street and vice versa.
  This is not a battle of us versus them. Mr. Speaker, we have to 
remember that we are all in this together as Americans.
  Republicans also knew that we had to find a way to balance two 
powerful but opposing forces: the urgent need to act expeditiously, and 
the imperative to act prudently and effectively. We understood the 
urgency of our economic circumstances, but we also know that rushing 
into a flawed approach would benefit no one and risk plunging our 
economy into deeper turmoil.
  From the outset, we demanded strong protections for taxpayer dollars. 
We demanded transparency and accountability. We demanded that the 
financial burden of any assistance not ultimately lie with the 
taxpayers. We believe, Mr. Speaker, very strongly that these provisions 
had to be the pillars of any financial rescue plan, and we knew that we 
had the backing of our constituents in our efforts.
  Over the past week, like all of my colleagues I'm sure, I've received 
hundreds of calls, e-mails, and letters demanding that the taxpayers do 
not foot the bill for the poor choices of troubled businesses. I have 
to say that the most interesting thing about the concerns that were 
expressed to me was that they were clearly growing out of a true 
grassroots movement. There was no advocacy group motivating those who 
were contacting us. There was no organized effort on the part of 
special interest groups.
  I was hearing from hundreds and hundreds of working Americans who 
have been following the news reports and the negotiations. They felt 
very strongly that the initial proposal was simply unfair to the 
taxpayers. They told me in no uncertain terms that any deal without 
taxpayer protections, accountability and oversight was totally 
unacceptable, and with that, I'm in complete agreement.
  Mr. Speaker, for several days our Democratic colleagues proceeded 
with negotiations without any regard for exactly these kinds of 
provisions that Republicans were insisting on. As a result, the 
negotiations went nowhere. Republicans were resolute in their 
insistence that any deal must not leave the taxpayers on the hook for 
this $700 billion rescue plan.
  We are here this morning with a bipartisan package because we, as 
Republicans, remained committed to our principles and were finally 
given a seat at the table. The deal that has been crafted will allow 
the Treasury to unclog the financial markets and help begin the process 
of restoring our economy's strength and vitality, but it does so 
without providing a taxpayer-funded windfall for Wall Street. And I 
want to repeat that, Mr. Speaker. This package moves ahead without 
providing a taxpayer-funded windfall for those on Wall Street.
  This bill requires companies to pay-to-play. There's no free lunch 
here. Any company that comes to us for assistance must cover their risk 
by paying insurance premiums, and their executives will not be able to 
walk away with extravagant compensation at taxpayer expense. This bill 
caps severance pay for participating companies. In the case of a total 
takeover, golden parachutes are banned entirely.
  Now, Mr. Speaker, the Federal Treasury will also get equity in the 
companies that ask for help so that the taxpayers will reap the 
benefits of their assistance. There will be bipartisan oversight of 
this process every step of the way, so that Republicans can continue to 
ensure full transparency and accountability.
  Most important of all, the overwhelming message that has come from my 
constituents is that there must be no blank check. Treasury must report 
to Congress in order to keep the assistance program going; and, Mr. 
Speaker, after 5 years, if the taxpayers have lost a single penny in 
this process, the President will have to submit a plan to Congress to 
recoup the funds from the participating companies.
  In short, the taxpayers have a 100 percent guarantee that they will 
not be left holding the check for this rescue plan, and we felt very 
strongly about ensuring that safeguard.
  Now, Mr. Speaker, we are all dismayed that we must take action at 
all. I don't believe any of us ever thought that we would face the grim 
reality of our current economy or the prospect of crafting a plan to 
rescue our financial markets. Because we, as Republicans, stuck to our 
guns, we have before us today a bill that will help to get our economy 
back on track without putting the burden on the backs of the American 
taxpayer.
  With strong oversight, accountability and a guarantee that the 
Federal Treasury will be fully repaid, we can restore confidence in our 
economy. We can put ourselves back on the path to growth and job 
creation. And perhaps most important, we can demonstrate to the 
American people that, when bipartisanship prevails, their demands are 
heard and implemented.
  I have to say that as we listen to these messages which have come 
from our constituents, as I said first and foremost, there has been 
this very strong and compelling argument that the taxpayer not be 
responsible for shouldering this responsibility, but there were a wide 
range of other concerns that came to the forefront.
  I have an e-mail that came into our office from a man in Arcadia, 
California, who wrote, I am writing to express my strong request that, 
with respect to the current financial ``bailout'' bill, you vote 
against it unless there's a provision that has been made to assure that 
those executives of companies that will receive funds in exchange for 
their under-performing mortgages, they are restricted in their ability 
to use government funds to pay excessive compensation.

[[Page 22917]]

  And, two, that you assure that proposals to load union 
representatives onto the boards of these companies as a condition of 
receiving funds is removed from the legislation. There is absolutely no 
reason to add union representatives to public companies. If the unions 
want representation, they should purchase enough stock to be able to 
elect a board member.
  This is a message that has come through consistently, and I'm happy 
to say, in this package, there is not going to be this government or 
union representation provided onto the boards of these companies.
  There was also, Mr. Speaker, great concern raised by many of my 
constituents that the organization known as ACORN, which is a very, 
very controversial organization under very harsh criticism for 
improprieties, was initially going to be receiving funding, and I'm 
very happy to report to our colleagues that not one penny will be going 
to that organization known as ACORN.
  There was another provision that had been included in the bill, Mr. 
Speaker, the so-called ``cram down provision,'' whereby we would see 
bankruptcy courts actually establishing something that the marketplace 
should do, that being the interest rates that are paid by those who 
hold mortgages. That is not provided. That is not going to be allowed 
under this provision.
  And, also, I have to say that there's a so-called mark-to-market 
accounting structure, which has dramatically diminished the value of 
properties, and I personally believe that the mark-to-market accounting 
structure should be completely abandoned. This legislation calls for a 
study which I hope very much will lead to that because it has played a 
role in creating some of the tremendous inequities that we see in our 
economy today.

                              {time}  0030

  And as I mention in my statement, the notion that those on Wall 
Street, who are in many ways responsible for this, would somehow be 
able to continue receiving these golden parachutes, multimillion dollar 
packages of benefits, the fact that we will prevent that with this 
legislation is something that I think is very, very important as we 
proceed.
  And so, again, first and foremost, taxpayers, Mr. Speaker, should not 
be saddled with this responsibility. And this bipartisan package 
guarantees that they will not be saddled with this because of the fact 
that within this 5-year period of time the President, if one single 
penny of taxpayer dollars is found to have been utilized, there is a 
provision whereby the President of the United States must come to us 
with a package which will most likely call on those institutions which 
have been the direct beneficiaries of this program, will be forced to 
repay to the taxpayers those dollars.
  So let me say that, as we look at this package, Mr. Speaker, there 
have been very understandable concerns. We all hate, we hate the fact 
that we are standing here dealing with this. And again, I will say 
there is plenty of blame, plenty of blame to go around. I know my 
colleagues on the other side of the aisle will want to expend time and 
energy blaming the deregulation and the policies that have been 
propounded over the past several years, but in the exchange that I had 
with the distinguished majority leader--now last night since it's 12:31 
in the morning here in Washington--when I was last night in this 
exchange with the majority leader, we were talking about the challenges 
that existed in the post-depression era legislation that was moved 
forward.
  And frankly, we, in the past several years, have been living with 
very antiquated, post-depression era regulation, and we have even seen 
the marketplace change dramatically. And over the past couple of 
decades we have seen a band-aid approach to respond to much of that 
depression-era regulation with which we still contend.
  What is needed, Mr. Speaker, is a 21st century regulatory structure 
to deal with the freedom that exists in this 21st century marketplace. 
And that's why, while adequate accountability, transparency, 
supervision, and oversight is essential, I caution my colleagues who 
believe that with passage of this legislation they can embark on this 
very, very zealous quest to dramatically increase the regulatory burden 
on the marketplace.
  The rest of the world has recognized that freedom is the answer; 
freedom is the answer and free markets are the answer. And that's why I 
hope that, as we move forward from this package, we do not in any way 
take a retrograde step in our quest to ensure that we pursue that.
  With that, Mr. Speaker, I reserve the balance of my time.
  Ms. SLAUGHTER. Mr. Speaker, I yield 3 minutes to the gentlewoman from 
Ohio (Ms. Kaptur).
  Ms. KAPTUR. With the highest regard for the chairwoman of the Rules 
Committee, I rise, regrettably, in opposition to this closed rule and 
against the bailout bill.
  We need the right deal, not a fast deal. The White House is counting 
on fear to propel this Congress into hasty and inappropriate action on 
a Wall Street bailout that is not in the interest of our Republic. 
There is a better way. In fact, it is as likely the expenditure of $700 
billion will actually stand in the way of the most effective means to 
remedy the economic challenges facing us.
  The Bush administration says we are facing the worst financial crisis 
in modern history. That is not true. The market problems of the 1980s 
were much worse than today. Then, 3,000 banks failed; interest rates 
were at 21 percent; money center banks went down; every bank in Texas 
went down. But the economic instability was resolved in the financial 
system in a much more disciplined and rigorous way than taxpayers 
printing money for Wall Street.
  In those days, the FDIC, not through a taxpayer bailout, but through 
careful use of FDIC's considerable power, resolved thousands of problem 
situations. No cash changed hands. A system of net worth certificates 
issued by FDIC was used to get through the credit shortage. FDIC 
regulated transactions with banks, through a system of subordinated 
debentures and promissory notes, was enacted. FDIC assumed power over 
executive salaries and controlled dividends to restore health and rigor 
to the market.
  The FDIC adopted a contingency plan to nationalize all institutions 
in the event it was necessary. The cost of the entire enterprise was 
$1.8 billion, resolving over $100 billion in problem institutions from 
the FDIC insurance fund, paid for by the banks, not the taxpayers. In 
other words, the market was used to heal the market, not set up a big 
government bureaucracy at the U.S. Treasury, run and overseen by the 
very reckless people who caused these problems in the first place.
  Today's economic challenge is a credit crisis, not a liquidity 
crisis. This bill does not address that. The housing bubble that burst 
is at the heart of our dilemma. Until Main Street housing foreclosures 
are remedied, the situation will not improve. This bill does not 
address the serious mortgage workout and mortgage servicing challenges 
facing Main Streets across this Nation.
  Taking a trillion dollars of taxpayer money and buying bushels of 
unknown and unvalued paper is not smart. It will delay resolution of 
that housing crisis. In fact, this bill actually asks taxpayers to buy 
a garbage truckload of worthless paper, everything from subprime auto 
loans, to foreign bank loans, to hedge fund paper, to credit swaps. 
Every reckless Wall Street deal thought up these past several years 
they want to dump on us. We say: No.
  Now, this bill also does nothing for reform, for example, to address 
the shortcomings of the SEC, which has done more than any other 
regulatory body to cause this problem by its false accounting, 
overinflated leverage ratios, and by destroying fair value accounting.
  The SPEAKER pro tempore. The time of the gentlewoman has expired.
  Ms. SLAUGHTER. Mr. Speaker, I yield the gentlewoman an additional 10 
seconds.
  Mr. DREIER. Mr. Speaker, I would like to also yield my friend 10 
seconds.

[[Page 22918]]


  Ms. KAPTUR. I thank the gentleman for yielding me--very, very much.
  The SEC must be a major part of the solution. This bill does not do 
it.
  Finally, Mr. Speaker, before one cent is even considered, this 
Congress first ought to pass a bill to create and fund an independent 
Emergency Financial Crimes Unit to investigate the malfeasance, 
securities fraud, false accounting, and insider trading that were the 
root causes of this extravagance that must now be resolved in a 
rigorous and thoughtful manner. This bill does not do it. Draft the 
right deal, not a fast deal.
  I thank the gentlelady and the gentleman for yielding.
  Mr. DREIER. Mr. Speaker, at this juncture, as you can see, I'm here 
all alone. And so I will reserve the balance of my time and look 
forward to the very thoughtful and eloquent statements coming forward 
from our colleagues on the other side of the aisle.
  Ms. SLAUGHTER. Mr. Speaker, I yield 3 minutes to the gentlewoman from 
Texas (Ms. Jackson-Lee).
  Ms. JACKSON-LEE of Texas. Let me thank the gentlelady from New York 
as the chairman of the Rules Committee, and particularly for the very 
hard work of the committee, and make note of the fact that it's almost 
12:40 a.m. and there has been a lot of heavy lifting. And I want to 
acknowledge the work of our leadership, and particularly Chairman Frank 
and his staff, along with Speaker Pelosi and the entire team of very 
agile and very, if you will, comprehensive thinking team that was 
thrown a hard ball just a week ago by the administration, a two-and-a-
half-page document that simply said, move the deity, if you will, from 
the person of faith and give it to the Secretary of Treasury.
  We had a tough job. And I, frankly, believe that we did everything we 
could to ensure that we looked at this in the best way possible. But, 
Mr. Speaker, I come to suggest that all of the goals that were 
intended--transparency and consumer protection--clearly need further 
edification. And frankly, I would like to use the Texas term ``whoa.'' 
I believe that we need to stand back, monitor the markets, and to begin 
to craft legislation that is truly reform.
  Let me tell you why. First of all, I know that my good friend from 
California gave us a detailed essay on some of the things that were not 
in this bill, and he mentioned that people in America are living above 
their means. Well, I've been in a number of hearings, listening to 
homeowners from around the country on the issue of their mortgages. And 
I will tell you that these are hardworking Americans who were not 
living above their means; they were accepting the banking products that 
were given to them. They were hardworking, they saw the opportunity to 
invest in America's dream, a home, and they continued to work and pay 
their mortgages. But no one explained to them about adjustable rates so 
that their mortgage would be at one rate, and then a couple months or a 
year later it was accelerating into an unbelievable and intolerable 
amount. And then of course we've heard some Members of this body accuse 
minorities for being the cause of this debacle. How insulting. How 
unreal. And how untrue.
  What we need to do is to work together, as my constituents have 
asked. One constituent said, show me what the catastrophic event would 
be. One said, I'm a community banker, and I have never loaned, if you 
will, a subprime loan. And I'm well capitalized, why am I being 
victimized?
  This bill, at this status, will not protect any of the homeowners or 
get them the kind of relief we would like.
  And so I say to this body, the Financial Stability Oversight Board 
does not have any enforcement. The Congressional Oversight Panel does 
not have any enforcement.
  The SPEAKER pro tempore. The time of the gentlewoman has expired.
  Ms. SLAUGHTER. I yield an additional 20 seconds.
  Ms. JACKSON-LEE of Texas. As I quickly speak, the amendments I 
offered all capture the idea of protecting the consumer. It, in 
essence, provides judicial relief.
  In this bill, it specifically prohibits the judiciary intervening for 
equitable or/and injunctive relief. That means that if the assets are 
being misused by the officer that we have designated, then the courts 
cannot go in. Where are the checks and balances?
  I believe that these amendments that I offered dealing with these 
questions of balance and providing money for mortgages, and et cetera, 
would have made this a better bill. So I ask my colleagues to consider 
that, and of course to consider these 400 economists quoted.
  Mr. DREIER. Mr. Speaker, I yield myself 1 minute, and I do so to 
respond to the statement of my good friend from Houston, and that being 
that, when I said that there are some who have been living beyond their 
means, I know that there are people who, in fact, have been lured into 
particular products which have encouraged them to live beyond their 
means. And that's why, when I talked about adequate supervision and 
oversight to ensure that this doesn't happen, that's very important.
  But I will say that, as I listen to my constituents, a message which 
has come through very loudly and very clearly, Mr. Speaker, is that 
people are upset when there are those who clearly have lived way beyond 
their means, when taxpayers who are paying their mortgages, meeting 
their car payments and other obligations are forced with the prospect 
of shouldering responsibility. And that's why I'm very, very pleased 
that we've stood forward, and that this package will not, in fact, 
thrust that responsibility onto the American taxpayer.
  Ms. SLAUGHTER. Mr. Speaker, I yield 3 minutes to the gentleman from 
Ohio (Mr. Kucinich).
  Mr. KUCINICH. I thank the gentlelady for her kindness.
  I rise in opposition, regretfully, to the rule and to the underlying 
bill. If we really wanted to protect the taxpayers, we wouldn't be 
paying cash for trash, $700 billion in taxpayers' funds which turns our 
beloved U.S. Treasury into a toxic landfill.
  This plan is a $700 billion bailout of Wall Street speculators, 
bankers, lenders who operated for years without the oversight of the 
Securities and Exchange Commission, the oversight of the Federal 
Reserve.
  This legislation doesn't do anything to punish the speculators. It 
rewards them by having taxpayers bail them out. It has no additional 
controls of speculation, no strengthening of oversight, no mention even 
of the implications of the Financial Modernization Act, which took down 
Glass-Steagall, which provided those post-depression era protections so 
we wouldn't be in this situation that we're in right now.
  And I would predict, Mr. Speaker, that we will be right back here in 
a few months with the same kinds of problems because we're not solving 
the underlying matter here, which is a distortion of the economy 
because of speculation run wild on Wall Street.
  Now, we've been given a plan, we haven't been given alternatives. 
Alternatives would have required Wall Street to pay for its own 
bailout. This plan doesn't suspend dividends, it doesn't force 
shareholders or creditors to directly contribute to the bailout. This 
plan rejected a .25 percent stock transfer tax that would have raised 
$100 billion from Wall Street.
  This is legislation that is further proof that our government has 
been turned into an engine that accelerates the wealth upwards, taking 
money from the pockets of the people of this country and putting it 
into the hands of the few.

                              {time}  0045

  That is what our tax policy does. It accelerates the wealth of 
America upwards. That is what the war does. It accelerates the wealth 
of America upwards. That is what our energy policy does. It accelerates 
the wealth upwards into the hands of the oil companies. That is what 
our financial policies do. And that is what our national debt has done. 
It has doubled in the past 8 years, $700 billion that taxpayers are 
being put on the hook.
  When Wall Street makes a profit, it is their profit. When Wall Street 
loses money, our people lose money. Seven

[[Page 22919]]

hundred billion dollars. Why aren't we bailing out those millions of 
Americans who are losing their homes? Why aren't we addressing the fact 
that 50 million Americans don't have any health care? It is absolutely 
astonishing that we are talking about giving $700 billion in taxpayers' 
money which comes in the failure of the Fed through a quadrupling of 
public and private debt during the time of Mr. Greenspan, up to $43 
trillion, and we have no discussion at all about the underlying 
monetary policy.
  The SPEAKER pro tempore. The time of the gentleman from Ohio has 
expired.
  Mr. DREIER. Mr. Speaker, I'm happy to yield my friend 1 additional 
minute.
  Mr. KUCINICH. There has been no discussion at all in any of this 
about the underlying dynamic of a debt-based monetary system. As long 
as we're working in a debt-based monetary system with our having no 
control over our own money supply through the Federal Reserve Act of 
1913, with the banks being able to literally make money out of thin air 
with their fraction reserve policies, how can we ever get to the bottom 
of a national debt that is building beyond our capacity to deal with 
it?
  It is appropriate that this action of the Congress is being timed to 
the opening of the Asian markets. How appropriate, given the fact that 
we are losing control over our financial destiny. Mr. Speaker, when I 
was a child in Cleveland, there was a myth that if you took a shovel 
and dug a hole deep enough, you could get to China. We're there.
  Ms. SLAUGHTER. Mr. Speaker, I yield 3 minutes to the gentleman from 
California (Mr. Sherman).
  Mr. SHERMAN. I must respectfully disagree with the characterization 
and description of this bill put forward by my good friend, Mr. Dreier, 
from California.
  This bill does not really limit executive compensation. It does limit 
a few types of golden parachutes. But it doesn't have any limits on 
regular salaries. Million-dollar-a-month salaries will continue, and 
they can be raised to $1.5 million a month once the companies get those 
bailout dollars and feel they can afford to be that generous to their 
favorite executives.
  Foreign banks are going to get hundreds of billions of dollars out of 
this bill. Now, the bill says that the Treasury only buys securities 
from U.S. entities. But how does this work then? Well, let's say the 
Bank of Shanghai is holding $30 billion of toxic assets, business 
mistakes they made in China. They simply have to sell those $30 billion 
of bad assets to their subsidiary in the United States. They all have 
small subsidiaries here. That subsidiary can then, the next day, sell 
them to the U.S. Treasury. Or alternatively they can sell that $30 
billion package of toxic assets to Goldman Sachs, and then Goldman 
Sachs can sell them to the Treasury the next day.
  But keep in mind, if they choose to use their own subsidiary, they 
sell $30 billion of assets to the Treasury. By 2010, 2011 they can 
dissolve that subsidiary and leave this country. And how are you going 
to impose any recoupment tax on them? The concept that there is a 
guarantee that we're going to recoup our money is absolutely wrong. We 
would have to pass a $200 billion or $300 billion tax increase bill in 
2013. And under section 134 of this bill, that tax is not just on those 
who are bailed out. It is on the entire financial services industry. 
How else could you construct a tax if you have one bank that got bailed 
out to the tune of $1 million and another bank that got bailed out to 
the tune of $1 billion? What tax rate would you apply to banks of that 
size? The only way to do it is to impose a tax on a whole segment of or 
the entire financial services industry.
  That means you're going to have the unfairness of taxing community 
banks and credit unions to pay for the money we give to Wall Street. It 
also means the bill isn't going to pass at all. Imagine the unfairness 
argument that that creates. But also any bill to tax Wall Street needs 
to get through a Senate where 41 Senators can block the bill. And Wall 
Street will now have enough money, our money, to hire 4,100 lobbyists. 
All they need is a good argument. And that good argument is that there 
is no fair way to recoup the money from the individual companies that 
got it. Many of the companies getting this money in 2009 aren't going 
to be around in 2013. Many of them are going to be shell companies that 
are deliberately dissolved in 2013.
  We do not have to panic. Four hundred eminent professors of 
economics, including three Nobel laureates, tell us Congress should not 
rush. Let's not rush. Let's pass a good bill next week.
  Mr. DREIER. Mr. Speaker, I yield myself 1 minute.
  I do so to remind my California colleague, my friend from Sherman 
Oaks, that the fact of the matter is when we look at the way the 
premiums are handled today through the Federal Deposit Insurance 
Corporation that guarantees that our constituents who have up to 
$100,000 in those accounts with the full faith and credit of the 
Federal Government behind them, if in fact that FDIC fund is in any way 
diminished, what is it that happens? There is an increase in the 
premium spread among those financial institutions.
  Similarly as we look at the prospect and the guarantee in this 
legislation that the taxpayers will not be shouldering the 
responsibility of that $700 billion, what we have done is we have in 
place a mechanism whereby through the CBO reporting, the President is 
required to submit to Congress a plan which calls for an actual 
increase in that, primarily to be spread most likely among those who 
have benefited from the program.
  And with that I reserve the balance of my time.
  Ms. SLAUGHTER. May I inquire from my colleague if he has any further 
speakers.
  Mr. DREIER. You're looking at him, Madam Chairman.
  Does the gentlewoman have any further speakers?
  Ms. SLAUGHTER. Let me first give Mr. Sherman 30 seconds to respond.
  Mr. SHERMAN. Under this bill, it is guaranteed we will get a proposal 
from the President. But to say that guarantees we're going to pass it 
is absolutely wrong. We don't pass 200 or $300 billion tax increase 
bills on the entire financial services industry over the objection of 
Wall Street and with the really credible argument that we will be 
taxing the good banks to pay for the sins of the bad banks and taxing 
the small local banks to pay for the sins of Wall Street--4,100 
lobbyists to stop with 41 Senators a bill that will be highly 
controversial.
  Mr. DREIER. Mr. Speaker, so I understand from the distinguished Chair 
of the Committee on Rules that she is the final speaker on the other 
side?
  Ms. SLAUGHTER. Yes, I am.
  Mr. DREIER. Mr. Speaker, I yield myself the balance of the time.
  And let me just respond by saying that the anger level among the 
American people reflected in those of us who are elected 
representatives is such that there is no way in the world that we would 
allow, that we would allow the United States Congress to thrust on to 
their shoulders this responsibility. And I am convinced that within 5 
years as we look at those institutions that have been the direct 
beneficiaries of this program that if in fact there is one penny of 
taxpayer dollars exposed here, I have little doubt that just as is the 
case with the increase in premiums the banking institutions shoulder 
through the Federal Deposit Insurance Corporation, this institution 
will make the taxpayers whole by saying to these institutions that have 
been the beneficiaries of this program that they must pay for that.
  Now, Mr. Speaker, as I said, there are a wide range of reasons that 
we are all angry that we're here. I am very, very angry that I am here. 
I know that my constituents are angry that we're here facing the 
challenge that we are.
  But there is one thing that everyone will acknowledge: the United 
States of America faces a credit crisis. There is a crisis of 
confidence. And I want to make sure that throughout the coming weeks, 
months and years that when people who have deposits in financial 
institutions go to their automatic teller machines and seek to 
withdraw, that

[[Page 22920]]

those dollars are there. Mr. Speaker, I want to make sure that when the 
hardworking, diligent, small businessmen and -women on Main Street are 
seeking an opportunity to take a brilliant and creative idea that they 
have and to get access to capital, that they are able to do that. I 
want to make sure that when people are seeking the American Dream of 
homeownership and they want to step forward and responsibly take on 
that obligation, that they are able to have access to that credit. I 
want to make sure that as we deal with this global economy, and the 
fact of the matter is, we, the United States of America, are shaping 
this global economy, and it is imperative that we continue to shape 
that global economy, so that we can pry open new markets for U.S. goods 
and services around the world. As we do these things, Mr. Speaker, it 
seems to me that we have a responsibility to put into place policies 
which will diminish the pain that we are facing today and play a role 
in instilling the confidence that is necessary to ensure that we have 
the credit that the American people deserve and desperately need.
  Now, when this package came forward, there were a wide range of 
provisions that led my constituents to be understandably outraged. And 
I'm very grateful that as we stand here at 1 o'clock this morning--in 
just a few hours we will be voting on the previous question in this 
rule--I am very pleased that there are a number of provisions in this 
package which will make it acceptable to many.
  First of all, I'm glad that we are not mandating that union leaders 
all of a sudden automatically be granted positions on boards of 
directors. I am very pleased that the very controversial organization 
known as ACORN is not going to receive one single penny from this 
program. I'm very pleased that we will not see the so-called cram-down 
provisions whereby judges would be able to distort the marketplace by 
completely reestablishing interest rates on mortgages. And I'm very 
pleased that under this package, we will be able to see that 
executives, executives who have heretofore been the beneficiaries 
through these so-called golden parachutes will instead get concrete 
shoes which will take them to the ground.
  And I also have to say that as we look at the overall executive 
compensation packages, the fact is that we will not see companies who 
are part of this program continue down the road of very, very high 
levels of compensation.

                              {time}  0100

  I also have to say that, as we look at the structure, the existence 
of an inspector general and the work of the Government Accountability 
Office and as we look at the dramatically increased role that the 
United States Congress will play in oversight, it will go a long way 
towards ensuring the kind of accountability that this institution has 
to the American people.
  Mr. Speaker, I'm going to call for a defeat of the previous question, 
and I intend to offer an amendment to the rule which will make in order 
an alternative offered by my good friend from Virginia (Mr. Cantor). 
This alternative will stabilize the markets through privately funded 
mortgage insurance, using risk-based premiums with increased 
transparency. It will empower private investors to bring private 
capital off the sidelines to help us resolve this crisis. Most 
importantly, it will put in place strong oversight reform and corporate 
accountability.
  Many of these provisions were developed as part of Mr. Cantor's 
working group, and some but not all were included in the final package. 
By defeating the previous question, we will be able to consider the 
working group's complete package as an alternative.
  Mr. Speaker, I ask unanimous consent that the full text of the 
amendment that I will be offering here appear in the Record immediately 
prior to the vote that we'll be having in about 7 hours on the previous 
question.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from California?
  There was no objection.
  Mr. DREIER. With that, I urge a ``no'' vote on the previous question 
so we can make this in order.
  I yield back the balance of my time.
  Ms. SLAUGHTER. Mr. Speaker, I urge a ``yes'' vote on the previous 
question and a ``yes'' vote on the rule.
  The material previously referred to by Mr. Dreier is as follows:

      Amendment to H. Res. __ Offered by Rep. Dreier of California

       At the end of the resolution, add the following:
       Sec. 3. Notwithstanding any other provision of this 
     resolution or the operation of the previous question, it 
     shall be in order to consider the amendment printed in 
     section 4, if offered by Representative Cantor or his 
     designee, to the motion specified in Section 1. The amendment 
     printed in section 4 shall be considered as read, shall not 
     be subject to amendment, and shall not be subject to a demand 
     for division of the question. The previous question shall be 
     considered as ordered on the amendment to its adoption 
     without intervening motion except, one hour of debate equally 
     divided and controlled by the proponent and an opponent. All 
     points of order against such amendment are waived.
       Sec. 4. The amendment referred to in section 3 is as 
     follows:
       In lieu of the amendment printed in the report of the 
     Committee on Rules, the House shall concur in the Senate 
     amendment to the House amendment to the Senate amendment with 
     the following amendment:
       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Economic Rescue Act of 
     2008''.

                  TITLE I. MORTGAGE-BACKED SECURITIES

     SEC. 101. THE INSURANCE OF MORTGAGE-BACKED SECURITIES.

       (a) Mortgage-Backed Security Insurance.--Upon the enactment 
     of this Act, the timely payment of up to 100 percent of 
     principal of and interest on each mortgage-backed security 
     held by a financial institution on or before September 24, 
     2008 is hereby insured on such terms and conditions as 
     determined by the Secretary consistent with this Title, as 
     those terms are defined in Section 111.
       (b) Necessary Actions.--The Secretary is authorized to take 
     such actions as he deems necessary to carry out the 
     authorities in this Title, including--
       (1) appointing such employees as may be required to carry 
     out the authorities in this Title and defining their duties;
       (2) entering into contracts, including contracts for the 
     services of experts and consultants as authorized by section 
     3109 of title 5, United States Code, without regard to any 
     other provision of law regarding public contracts;
       (3) designating financial institutions as financial agents 
     of the Government, and they shall perform all such reasonable 
     duties related to this Title as financial agents of the 
     Government as may be required of them;
       (4) establishing vehicles that are authorized, subject to 
     supervision by the Secretary, to provide, and make payments 
     on, the insures referred to in subsection (a) and issue 
     obligations; and
       (5) issuing such regulations and other guidance as may be 
     necessary or appropriate to define terms or carry out the 
     authorities of this Title.

     SEC. 102. CONSIDERATIONS.

       (a) Secretary Consideration.--In exercising the authorities 
     granted in this Title, the Secretary shall take into 
     consideration means for--
       (1) protecting the taxpayer;
       (2) providing stability or preventing disruption to the 
     financial markets or banking system; and
       (3) taking appropriate steps to manage any conflicts of 
     interest in the hiring of contractors or advisors.
       (b) Rulemaking Exemption.--Any regulation issued under the 
     authority provided in this Title shall not be subject to the 
     rulemaking provisions as set forth, in section 553 of title 
     5, United States Code.

     SEC. 103. INSURANCE PREMIUMS.

       (a) Insurance Premiums.--The Secretary shall collect 
     premiums from each financial institution, as such term is 
     defined in section 111 of this Title, in order to fund the 
     Morgtage-Backed Securities Fund established in section 105 
     and used to satisfy obligations incurred under this Title.
       (b) Premium Collection.--The premium collected pursuant to 
     subsection (a) shall be collected from each financial 
     institution notwithstanding such institution's application, 
     if any, for insures set forth in section 101(a).
       (c) Authority to Base Insurance Premium on Product Risk.--
     In establishing the insurance premium under subsection (a), 
     the Secretary may provide for variations in such rates 
     according to the credit risk associated with the mortgage-
     backed security held by a financial institution as such term 
     is defined in section 111.
       (d) Sufficient Level.--The premium referred to in 
     subsection (a) shall be set by the Secretary at a level 
     necessary to maintain a level of funding in the Mortgage-
     Backed Securities Fund, as established in section 104,

[[Page 22921]]

     sufficient to meet anticipated claims based upon actuarial 
     analysis.
       (e) Expiration.--The Secretary may cease collecting 
     premiums set forth in subsection (a) if he determines the 
     Mortgage-Backed Securities Fund has sufficient reserves to 
     meet anticipated claims as described in subsection (d).

     SEC. 104. ACCESS TO RECORDS.

       (a) Access.--For the purposes of evaluating the risk and 
     price of the insurance provided under this Title, and 
     evaluating the overall economic health of the [institution] 
     seeking to purchase or sell assets to be covered by the 
     insurance program under this Title, the Secretary shall 
     require, as a condition of participation in such insurance 
     program and as a condition of coverage of an asset, that the 
     [purchasing institution and the selling institution [or just 
     the latter?]] shall--
       (1) provide to any person designated by the Secretary to 
     examine the records of the [institution] upon request and at 
     such reasonable time as the Secretary may request, access--
       (A) to any information, data, schedules, books, accounts, 
     financial records, reports, files, electronic communications, 
     or other papers, things, or property belonging to or used by 
     the institution;
       (B) to the most recent audit findings, valuations of the 
     institution's current mortgage assets, and valuations of any 
     private bids the institution has received and rejected for 
     those assets; and
       (C) to the officers, directors, employees, independent 
     public accountants, financial advisors, and other agents and 
     representatives of the institution;
       (2) permit such persons to make and retain copies of such 
     books, accounts, and other records as the Secretary deems 
     appropriate; and
       (3) afford full facilities for verifying transactions with 
     the balances or securities held by depositories, fiscal 
     agents, and custodians of the institution.
       (b) Nondisclosure of Information.--Any information obtained 
     under subsection (a) shall be confidential and the Secretary 
     shall ensure that such information not be disclosed to the 
     public and not be used for any purpose other than evaluating 
     the overall economic health of the institution seeking [to 
     purchase or sell] assets to be covered by the insurance 
     program under this Title and the risk and price of the 
     insurance provided under this Title.

     SEC. 105. MORTGAGE-BACKED SECURITIES FUND.

       (a) Collected Premiums.--The Secretary shall deposit 
     premiums collected pursuant to section 103(a) of this Title 
     into the Mortgage-Backed Securities Fund as established in 
     subsection (b).
       (b) Mortgage-Backed Securities Fund.--There is hereby 
     established a Mortgage-Backed Securities Fund (in this title 
     referred to as the ``Fund'').
       (c) Authority.--Premiums deposited in the Fund pursuant to 
     subsection section (a) shall be invested in obligations of 
     the United States, or kept in cash on hand or on deposit, as 
     necessary.
       (d) Payments From the Fund.--The Secretary shall make 
     payments from amounts deposited in the Fund to fulfill the 
     obligations of the insurance provided to financial 
     institutions as set forth in section 101(a).
       (e) Fund Sufficiency.--The Secretary shall increase 
     insurance premiums if he determines, after consultation with 
     the Government Accountability Office, to a level sufficient 
     to assure reserves in the Fund will meet anticipated needs.
       (f) Transfer Authority.--The Secretary of the Treasury is 
     authorized and directed to loan to the Fund, on such terms as 
     may be fixed by the Secretary, such funds as in the 
     Secretary's judgment are from time to time required for 
     purposes of this Title.

     SEC. 106. PAYMENT OF INSURANCE PREMIUMS.

       (a) Payment and Subrogation.--If a financial institution 
     that holds a mortgage-backed security on September 24, 2008, 
     for which insurance is provided pursuant to this Title, is 
     unable to make any payment of principal of or interest on 
     such security, the Secretary shall make such payment as and 
     when due, in cash, and upon such payment shall be subrogated 
     fully to the rights satisfied by such payment.
       (b) Contract.--The Secretary is hereby authorized, in 
     connection with any insurance under this Title, whether 
     before or after any default, to provide by contract with the 
     holder, referred to in subsection (a), for the 
     extinguishment, upon default by the holder, of any 
     redemption, equitable, legal, or other right, title, or 
     interest of the holder in any mortgage or mortgages 
     constituting the trust or pool against which the mortgage-
     backed securities insured under this Title are issued; and 
     with respect to any issue of such insured securities, in the 
     event of default and pursuant otherwise to the terms of the 
     contract, the mortgages that constitute such trust or pool 
     backing the security shall become the absolute property of 
     the U.S. Treasury, subject only to the unsatisfied rights of 
     the holders of the mortgage-backed securities based on and 
     backed by such trust or pool.
       (c) Limitation on Application of Law.--No State or local 
     law, and no Federal law, shall preclude or limit the exercise 
     of the Secretary's (A) power to contract with the issuer on 
     the terms set forth in subsection (b), or (B) authorization 
     to enforce any such contract with the holder; or (C) the 
     rights, as provided in subsection (b), in the mortgages 
     constituting the trust or pool against which such insured 
     securities are issued.
       (d) Full Faith and Credit.--The full faith and credit of 
     the United States is pledged to the payment of all amounts 
     which may be required to be paid under any insurance under 
     this Title.

     SEC. 107. FUNDING.

       For the purpose of the authorities granted in this Title, 
     and for the costs of administering those authorities, the 
     Secretary may use funds from the amounts in the Mortgage-
     Backed Securities Fund. Any funds expended from the Fund for 
     actions authorized by this Title, including the payment of 
     administrative expenses, shall be deemed appropriated at the 
     time of such expenditure.

     SEC. 108. REVIEW.

       Decisions by the Secretary pursuant to the authority of 
     this Title are non-reviewable and committed to agency 
     discretion, and may not be reviewed by any court of law or 
     any administrative agency.

     SEC. 109. [CREDIT REFORM].

       (a) In General.--[Subject to subsection (b), the costs of 
     insures made under this Title shall be determined as provided 
     under the Federal Credit Reform Act of 1990 (2 U.S.C. 661 et 
     seq.), as applicable.
       (b) Costs.--For the purposes of Section 502(5) of the 
     Federal Credit Reform Act of 1990 [2 U.S.C. 661a(5)], the 
     cost of each guarantee of a mortgage-backed security under 
     this Title shall be calculated by--
       (1) adjusting the discount rate in section 502(5)(E) (2 
     U.S.C. 661a(5)(E)) for market risks, and
       (2) using the difference between the current estimate, 
     consistent with subparagraph (b)(1) under the terms of the 
     insured mortgage-backed security and the current estimate 
     consistent with subparagraph (b)(1) under the terms of the 
     insured.]

     SEC. 110. REPORTS TO CONGRESS.

       Within 60 days of the first exercise of the authority set 
     forth in section 101(a), and semiannually thereafter, the 
     Secretary shall report to the Committees on the Budget, 
     Financial Services, and Ways and Means of the House of 
     Representatives and the Committees on the Budget, Finance, 
     and Banking, Housing, and Urban Affairs of the Senate with 
     respect to the authorities exercised under this Title and the 
     considerations required by section 102.

     SEC. 111. DEFINITIONS.

       For purposes of this Title, the following definitions shall 
     apply:
       (1) Financial institution.--The term ``financial 
     institution'' means any institution including, but not 
     limited to, banks, thrifts, credit unions, broker-dealers, 
     insurance companies, and the trustees administering mortgage-
     backed securities trusts, having significant operations in 
     the United States; and, upon the Secretary's determination in 
     consultation with the Chairman of the Board of Governors of 
     the Federal Reserve, holds or has issued applicable mortgage-
     backed securities;
       (2) Secretary.--The term ``Secretary'' means the Secretary 
     of the Treasury;
       (3) Mortgage-backed security.--The term ``mortgage-backed 
     security'' means securities, obligations, other instruments, 
     or other securities, other than those guaranteed by the 
     Government National Mortgage Association, as shall be based 
     on and backed by a trust or pool composed of mortgages that 
     in each case was originated or issued on or before September 
     24, 2008;
       (4) United states.--The term ``United States'' means the 
     States, territories, and possessions of the United States and 
     the District of Columbia.

     SEC. 112. ANNUAL REPORT AND AUDIT BY THE GOVERNMENT 
                   ACCOUNTABILITY OFFICE.

       (a) Annual Report on the Mortgage-Backed Securities Fund.--
     The Secretary shall annually submit to Congress a full report 
     of its operations, activities, budget, receipts, and 
     expenditures for the preceding 12-month period. The report 
     shall include, with respect to the Mortgage-Backed Securities 
     Fund, an analysis of--
       (1) the current financial condition of such fund;
       (2) the purpose, effect, and estimated cost of each 
     resolution action taken for payment of insurance during the 
     preceding year;
       (3) the extent to which the actual costs provided to, or 
     for the benefit of, resulting from insurance during the 
     preceding year exceeded the estimated costs of such costs 
     reported in a previous year, as applicable;
       (4) the exposure of the Mortgage-Backed Securities Fund to 
     changes in those economic factors most likely to affect the 
     condition of that fund;
       (5) a current estimate of the resources needed for the 
     Mortgage-Backed Securities Fund to achieve the purposes of 
     this Title;
       (6) an analysis of the sufficiency of the premium 
     collections, actual and projected, in meeting the costs of 
     the Fund.
       (7) any findings, conclusions, and recommendations for 
     legislative and administrative actions considered appropriate 
     to future activities of the Mortgage-Backed Securities Fund.

[[Page 22922]]

       (b) Special Report.--Within 45 days of the enactment of 
     this Act, the Comptroller General shall provide to the 
     committees of Congress referred to in subsection (d), and 
     other relevant committees, an initial report on the Fund.
       (c) Annual Audit of the Mortgage-Backed Securities Fund.--
       (1) Audit required.--The Comptroller General shall audit 
     annually the financial transactions of the Mortgage-Backed 
     Securities Fund (the ``Fund'') in accordance with generally 
     accepted government auditing standards.
       (2) Access to books and records.--All books, records, 
     accounts, reports, files, and property belonging to or used 
     by the Department of the Treasury that are directly related 
     to the operations and determination as to the amounts in the 
     Fund, or by an independent certified public accountant 
     retained to audit the Fund's financial statements, shall be 
     made available to the Comptroller General.
       (d) Report of the Audit.--A report of the audit conducted 
     under subsection (c) of this section shall be made by the 
     Comptroller General to the Congress not later than July 15th 
     of the year following the year covered by such audit. The 
     report to the Congress shall set forth the scope of the audit 
     and shall include a statement of assets and liabilities and 
     surplus or deficit of the Fund; a statement of surplus or 
     deficit analysis; a statement of income and expenses; a 
     statement of sources and application of funds and such 
     comments and information as may be deemed necessary to inform 
     Congress, together with such recommendations with respect 
     thereto as the Comptroller General may deem advisable. The 
     report shall also show specifically any program, expenditure, 
     or other financial transaction or undertaking observed in the 
     course of the audit, which, in the opinion of the Comptroller 
     General, has been carried on or made without authority of 
     law. A copy of each report shall be furnished to the 
     President, to the Secretary of the Treasury, and to Committee 
     on Banking, Housing, and Urban Affairs, the Committee on the 
     Budget, and the Committee on Finance of the Senate and the 
     Committee on Financial Services, the Committee on the Budget, 
     and the Committee on Ways and Means of the House of 
     Representatives.
       (e) Assistance in Audit.--For the purpose of conducting 
     such audit the Comptroller General is authorized in his 
     discretion to employ by contract, without regard to section 5 
     of title 41 of the United States Code, professional services 
     of firms and organizations of certified public accountants, 
     with the concurrence of the Secretary, for temporary periods 
     or for special purposes.

                        TITLE II--TAX PROVISIONS

     SEC. 201. 5-YEAR CARRYBACK OF LOSSES.

       (a) In General.--Subparagraph (H) of section 172(b)(1) of 
     the Internal Revenue Code of 1986 is amended to read as 
     follows:
       ``(H) 5-year carryback of certain losses.--
       ``(i) Taxable years ending during 2001 and 2002.--In the 
     case of a net operating loss for any taxable year ending 
     during 2001 or 2002, subparagraph (A)(i) shall be applied by 
     substituting `5' for `2' and subparagraph (F) shall not 
     apply.
       ``(ii) Taxable years ending during 2007, 2008, and 2009.--
     In the case of a net operating loss for any taxable year 
     ending during 2007, 2008, or 2009--

       ``(I) subparagraph (A)(i) shall be applied by substituting 
     `5' for `2',
       ``(II) subparagraph (E)(ii) shall be applied by 
     substituting `4' for `2', and
       ``(III) subparagraph (F) shall not apply.''.

       (b) Temporary Suspension of 90 Percent Limit on Certain NOL 
     Carrybacks and Carryovers.--
       (1) In general.--Subclause (I) of section 56(d)(1)(A)(ii) 
     of such Code is amended--
       (A) by inserting ``and 2007, 2008, or 2009'' after ``2001 
     or 2002'', and
       (B) by inserting ``and 2007, 2008, and 2009'' after ``2001 
     and 2002''.
       (2) Conforming amendment.--Subclause (I) of section 
     56(d)(1)(A)(i) of such Code is amended by inserting ``amount 
     of such'' before ``deduction described in clause (ii)(I)''.
       (c) Anti-Abuse Rules.--The Secretary of the Treasury or the 
     Secretary's designee shall prescribe such rules as are 
     necessary to prevent the abuse of the purposes of the 
     amendments made by this section, including antistuffing 
     rules, antichurning rules (including rules relating to sale-
     leasebacks), and rules similar to the rules under section 
     1091 of the Internal Revenue Code of 1986 relating to losses 
     from wash sales.
       (d) Effective Dates.--
       (1) Subsection (a).--
       (A) In general.--Except as provided in subparagraph (B), 
     the amendments made by subsection (a) shall apply to net 
     operating losses arising in taxable years ending in 2007, 
     2008, or 2009.
       (B) Election.--In the case of any taxpayer with a net 
     operating loss for a taxable year ending during 2007 or 
     2008--
       (i) any election made under section 172(b)(3) of the 
     Internal Revenue Code of 1986 may not withstanding such 
     section) be revoked before October 15, 2009, and
       (ii) any election made under section 172(j) of such Code 
     shall (notwithstanding such section) be treated as timely 
     made if made before October 15, 2009.
       (2) Subsection (b).--The amendments made by subsection (b) 
     shall apply to taxable years ending after December 31, 2006.

     SEC. 202. INCENTIVES TO REINVEST FOREIGN EARNINGS IN UNITED 
                   STATES.

       (a) In General.--Section 965 of the Internal Revenue Code 
     of 1986 is amended to read as follows:

     ``SEC. 965. DEDUCTION FOR DIVIDENDS RECEIVED.

       ``(a) Deduction.--
       ``(1) In general.--In the case of a corporation which is a 
     United States shareholder and for which the election under 
     this section is in effect for the taxable year, there shall 
     be allowed as a deduction an amount equal to the applicable 
     percentage of cash dividends which are received during such 
     taxable year by such shareholder from controlled foreign 
     corporations.
       ``(2) Applicable percentage.--For purposes of paragraph 
     (1)--
       ``(A) In general.--Except as provided by subparagraph (B), 
     the term `applicable percentage' means 85 percent.
       ``(B) Distressed debt.--In the case of dividends received 
     with respect to which the requirements of subsection 
     (b)(4)(B) are met, such term means 100 percent.
       ``(3) Dividends paid indirectly from controlled foreign 
     corporations.--If, within the taxable year for which the 
     election under this section is in effect, a United States 
     shareholder receives a cash distribution from a controlled 
     foreign corporation which is excluded from gross income under 
     section 959(a), such distribution shall be treated for 
     purposes of this section as a cash dividend to the extent of 
     any amount included in income by such United States 
     shareholder under section 951(a)(1)(A) as a result of any 
     cash dividend during such taxable year to--
       ``(A) such controlled foreign corporation from another 
     controlled foreign corporation that is in a chain of 
     ownership described in section 958(a), or
       ``(B) any other controlled foreign corporation in such 
     chain of ownership, but only to the extent of cash 
     distributions described in section 959(b) which are made 
     during such taxable year to the controlled foreign 
     corporation from which such United States shareholder 
     received such distribution.
       ``(b) Limitations.--
       ``(1) In general.--The amount of dividends taken into 
     account under subsection (a) shall not exceed the greater 
     of--
       ``(A) $500,000,000,
       ``(B) the amount shown on the applicable financial 
     statement as earnings permanently reinvested outside the 
     United States, or
       ``(C) in the case of an applicable financial statement 
     which fails to show a specific amount of earnings permanently 
     reinvested outside the United States and which shows a 
     specific amount of tax liability attributable to such 
     earnings, the amount equal to the amount of such liability 
     divided by 0.35.

     The amounts described in subparagraphs (B) and (C) shall be 
     treated as being zero if there is no such statement or such 
     statement fails to show a specific amount of such earnings or 
     liability, as the case may be.
       ``(2) Dividends must be extraordinary.--The amount of 
     dividends taken into account under subsection (a) shall not 
     exceed the excess (if any) of--
       ``(A) the cash dividends received during the taxable year 
     by such shareholder from controlled foreign corporations, 
     over
       ``(B) the sum of--
       ``(i) the dividends received during the base period year by 
     such shareholder from controlled foreign corporations,
       ``(ii) the amounts includible in such shareholder's gross 
     income for the base period year under section 951(a)(1)(B) 
     with respect to controlled foreign corporations, and
       ``(iii) the amounts that would have been included for the 
     base period year but for section 959(a) with respect to 
     controlled foreign corporations.

     The amount taken into account under clause (iii) for the base 
     period year shall not include any amount which is not 
     includible in gross income by reason of an amount described 
     in clause (ii) with respect to a prior taxable year. Amounts 
     described in subparagraph (B) for the base period year shall 
     be such amounts as shown on the most recent return filed for 
     such year; except that amended returns filed after June 30, 
     2007, shall not be taken into account.
       ``(3) Reduction of benefit if increase in related party 
     indebtedness.--The amount of dividends which would (but for 
     this paragraph) be taken into account under subsection (a) 
     shall be reduced by the excess (if any) of--
       ``(A) the amount of indebtedness of the controlled foreign 
     corporation to any related person (as defined in section 
     954(d)(3)) as of the close of the taxable year for which the 
     election under this section is in effect, over
       ``(B) the amount of indebtedness of the controlled foreign 
     corporation to any related person (as so defined) as of the 
     close of September 26, 2008.

      All controlled foreign corporations with respect to which 
     the taxpayer is a United States shareholder shall be treated 
     as 1 controlled foreign corporation for purposes of this 
     paragraph. The Secretary may prescribe

[[Page 22923]]

     such regulations as may be necessary or appropriate to 
     prevent the avoidance of the purposes of this paragraph, 
     including regulations which provide that cash dividends shall 
     not be taken into account under subsection (a) to the extent 
     such dividends are attributable to the direct or indirect 
     transfer (including through the use of intervening entities 
     or capital contributions) of cash or other property from a 
     related person (as so defined) to a controlled foreign 
     corporation.
       ``(4) Requirements.--
       ``(A) Requirement to invest in united states.--Except as 
     provided by subparagraph (B), subsection (a) shall not apply 
     to any dividend received by a United States shareholder 
     unless the amount of the dividend is invested in the United 
     States pursuant to a domestic reinvestment plan which--
       ``(i) is approved by the taxpayer's president, chief 
     executive officer, or comparable official before the payment 
     of such dividend and subsequently approved by the taxpayer's 
     board of directors, management committee, executive 
     committee, or similar body, and
       ``(ii) provides for the reinvestment of such dividend in 
     the United States (other than as payment for executive 
     compensation), including as a source for the funding of 
     worker hiring and training, infrastructure, research and 
     development, capital investments, or the financial 
     stabilization of the corporation for the purposes of job 
     retention or creation.
       ``(B) Distressed debt.--The requirements of this 
     subparagraph are met if amounts repatriated are invested in 
     distressed debt (as defined by the Secretary) for at least 
     one year.
       ``(c) Definitions and Special Rules.--For purposes of this 
     section--
       ``(1) Applicable financial statement.--The term `applicable 
     financial statement' means--
       ``(A) with respect to a United States shareholder which is 
     required to file a financial statement with the Securities 
     and Exchange Commission (or which is included in such a 
     statement so filed by another person), the most recent 
     audited annual financial statement (including the notes which 
     form an integral part of such statement) of such shareholder 
     (or which includes such shareholder)--
       ``(i) which was so filed on or before June 30, 2007, and
       ``(ii) which was certified on or before June 30, 2007, as 
     being prepared in accordance with generally accepted 
     accounting principles, and
       ``(B) with respect to any other United States shareholder, 
     the most recent audited financial statement (including the 
     notes which form an integral part of such statement) of such 
     shareholder (or which includes such shareholder)--
       ``(i) which was certified on or before June 30, 2007, as 
     being prepared in accordance with generally accepted 
     accounting principles, and
       ``(ii) which is used for the purposes of a statement or 
     report--

       ``(I) to creditors,
       ``(II) to shareholders, or
       ``(III) for any other substantial nontax purpose.

       ``(2) Base period year.--
       ``(A) In general.--The base period year is the first 
     taxable year ending in 2007.
       ``(B) Mergers, acquisitions, etc..--
       ``(i) In general.--Rules similar to the rules of 
     subparagraphs (A) and (B) of section 41(f)(3) shall apply for 
     purposes of this paragraph.
       ``(ii) Spin-offs, etc.--If there is a distribution to which 
     section 355 (or so much of section 356 as relates to section 
     355) applies during the base period year and the controlled 
     corporation (within the meaning of section 355) is a United 
     States shareholder--

       ``(I) the controlled corporation shall be treated as being 
     in existence during the period that the distributing 
     corporation (within the meaning of section 355) is in 
     existence, and
       ``(II) for purposes of applying subsection (b)(2) to the 
     controlled corporation and the distributing corporation, 
     amounts described in subsection (b)(2)(B) which are received 
     or includible by the distributing corporation or controlled 
     corporation (as the case may be) before the distribution 
     referred to in subclause (I) from a controlled foreign 
     corporation shall be allocated between such corporations in 
     proportion to their respective interests as United States 
     shareholders of such controlled foreign corporation 
     immediately after such distribution.

     Subclause (II) shall not apply if neither the controlled 
     corporation nor the distributing corporation is a United 
     States shareholder of such controlled foreign corporation 
     immediately after such distribution.
       ``(3) Dividend.--The term `dividend' shall not include 
     amounts includible in gross income as a dividend under 
     section 78, 367, or 1248. In the case of a liquidation under 
     section 332 to which section 367(b) applies, the preceding 
     sentence shall not apply to the extent the United States 
     shareholder actually receives cash as part of the 
     liquidation.
       ``(4) Coordination with dividends received deduction.--No 
     deduction shall be allowed under section 243 or 245 for any 
     dividend for which a deduction is allowed under this section.
       ``(5) Controlled groups.--
       ``(A) In general.--All United States shareholders which are 
     members of an affiliated group filing a consolidated return 
     under section 1501 shall be treated as one United States 
     shareholder.
       ``(B) Application of $500,000,000 limit.--All corporations 
     which are treated as a single employer under section 52(a) 
     shall be limited to one $500,000,000 amount in subsection 
     (b)(1)(A), and such amount shall be divided among such 
     corporations under regulations prescribed by the Secretary.
       ``(C) Permanently reinvested earnings.--If a financial 
     statement is an applicable financial statement for more than 
     1 United States shareholder, the amount applicable under 
     subparagraph (B) or (C) of subsection (b)(1) shall be divided 
     among such shareholders under regulations prescribed by the 
     Secretary.
       ``(d) Denial of Foreign Tax Credit; Denial of Certain 
     Expenses.--
       ``(1) Foreign tax credit.--No credit shall be allowed under 
     section 901 for any taxes paid or accrued (or treated as paid 
     or accrued) with respect to the deductible portion of--
       ``(A) any dividend, or
       ``(B) any amount described in subsection (a)(2) which is 
     included in income under section 951(a)(1)(A).

     No deduction shall be allowed under this chapter for any tax 
     for which credit is not allowable by reason of the preceding 
     sentence.
       ``(2) Expenses.--No deduction shall be allowed for expenses 
     properly allocated and apportioned to the deductible portion 
     described in paragraph (1).
       ``(3) Deductible portion.--For purposes of paragraph (1), 
     unless the taxpayer otherwise specifies, the deductible 
     portion of any dividend or other amount is the amount which 
     bears the same ratio to the amount of such dividend or other 
     amount as the amount allowed as a deduction under subsection 
     (a) for the taxable year bears to the amount described in 
     subsection (b)(2)(A) for such year.
       ``(4) Coordination with section 78.--Section 78 shall not 
     apply to any tax which is not allowable as a credit under 
     section 901 by reason of this subsection.
       ``(e) Increase in Tax on Included Amounts Not Reduced by 
     Credits, etc.--
       ``(1) In general.--Any tax under this chapter by reason of 
     nondeductible CFC dividends shall not be treated as tax 
     imposed by this chapter for purposes of determining--
       ``(A) the amount of any credit allowable under this 
     chapter, or
       ``(B) the amount of the tax imposed by section 55.

     Subparagraph (A) shall not apply to the credit under section 
     53 or to the credit under section 27(a) with respect to taxes 
     which are imposed by foreign countries and possessions of the 
     United States and are attributable to such dividends.
       ``(2) Limitation on reduction in taxable income, etc.--
       ``(A) In general.--The taxable income of any United States 
     shareholder for any taxable year shall in no event be less 
     than the amount of nondeductible CFC dividends received 
     during such year.
       ``(B) Coordination with section 172.--The nondeductible CFC 
     dividends for any taxable year shall not be taken into 
     account--
       ``(i) in determining under section 172 the amount of any 
     net operating loss for such taxable year, and
       ``(ii) in determining taxable income for such taxable year 
     for purposes of the 2nd sentence of section 172(b)(2).
       ``(3) Nondeductible cfc dividends.--For purposes of this 
     subsection, the term `nondeductible CFC dividends' means the 
     excess of the amount of dividends taken into account under 
     subsection (a) over the deduction allowed under subsection 
     (a) for such dividends.
       ``(f) Election.--The taxpayer may elect to apply this 
     section to--
       ``(1) the taxpayer's last taxable year which begins before 
     the date of the enactment of this section, or
       ``(2) the taxpayer's first taxable year which begins during 
     the 1-year period beginning on such date.

     Such election may be made for a taxable year only if made 
     before the due date (including extensions) for filing the 
     return of tax for such taxable year.''.
       (b) Clerical Amendment.--The item in the table of sections 
     for subpart F of part III of subchapter N of chapter 1 of 
     such Code relating to section 965 is amended to read as 
     follows:

``Sec. 965. Deduction for dividends received.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years ending on or after the date of 
     the enactment of this Act.

     SEC. 203. GAIN OR LOSS FROM SALE OR EXCHANGE OF CERTAIN 
                   PREFERRED STOCK.

       (a) In General.--For purposes of the Internal Revenue Code 
     of 1986, gain or loss from the sale or exchange of any 
     applicable preferred stock by any applicable financial 
     institution shall be treated as ordinary income or loss.
       (b) Applicable Preferred Stock.--For purposes of this 
     section, the term ``applicable preferred stock'' means any 
     stock--

[[Page 22924]]

       (1) which is preferred stock in--
       (A) the Federal National Mortgage Association, established 
     pursuant to the Federal National Mortgage Association Charter 
     Act (12 U.S.C. 1716 et seq.), or
       (B) the Federal Home Loan Mortgage Corporation, established 
     pursuant to the Federal Home Loan Mortgage Corporation Act 
     (12 U.S.C. 1451 et seq.), and
       (2) which--
       (A) was held by the applicable financial institution on 
     September 6, 2008, or
       (B) was sold or exchanged by the applicable financial 
     institution on or after January 1, 2008, and before September 
     7, 2008.
       (c) Applicable Financial Institution.--For purposes of this 
     section:
       (1) In general.--Except as provided in paragraph (2), the 
     term ``applicable financial institution'' means--
       (A) a financial institution referred to in section 
     582(c)(2) of the Internal Revenue Code of 1986, or
       (B) a depository institution holding company (as defined in 
     section 3(w)(1) of the Federal Deposit Insurance Act (12 
     U.S.C. 1813(w)(1))).
       (2) Special rules for certain sales.--In the case of --
       (A) a sale or exchange described in subsection (b)(2)(B), 
     an entity shall be treated as an applicable financial 
     institution only if it was an entity described in 
     subparagraph (A) or (B) of paragraph (1) at the time of the 
     sale or exchange, and
       (B) a sale or exchange after September 6, 2008, of 
     preferred stock described in subsection (b)(2)(A), an entity 
     shall be treated as an applicable financial institution only 
     if it was an entity described in subparagraph (A) or (B) of 
     paragraph (1) at all times during the period beginning on 
     September 6, 2008, and ending on the date of the sale or 
     exchange of the preferred stock.
       (d) Special Rule for Certain Property Not Held on September 
     6, 2008.--The Secretary of the Treasury or the Secretary's 
     delegate may extend the application of this section to all or 
     a portion of the gain or loss from a sale or exchange in any 
     case where--
       (1) an applicable financial institution sells or exchanges 
     applicable preferred stock after September 6, 2008, which the 
     applicable financial institution did not hold on such date, 
     but the basis of which in the hands of the applicable 
     financial institution at the time of the sale or exchange is 
     the same as the basis in the hands of the person which held 
     such stock on such date, or
       (2) the applicable financial institution is a partner in a 
     partnership which--
       (A) held such stock on September 6, 2008, and later sold or 
     exchanged such stock, or
       (B) sold or exchanged such stock during the period 
     described in subsection (b)(2)(B).
       (e) Regulatory Authority.--The Secretary of the Treasury or 
     the Secretary's delegate may prescribe such guidance, rules, 
     or regulations as are necessary to carry out the purposes of 
     this section.
       (f) Effective Date.--This section shall apply to sales or 
     exchanges occurring after December 31, 2007, in taxable years 
     ending after such date.

                  TITLE III--MORTGAGE FRAUD PREVENTION

     SEC. 301. SHORT TITLE.

       This Act may be cited as the ``Stop Mortgage Fraud Act''.

     SEC. 302. MORTGAGE FRAUD ELIMINATION.

       (a) Authorization of Appropriation for the FBI.--For fiscal 
     years 2009, 2010, 2011, and 2012, there are authorized to be 
     appropriated
       (1) $31,250,000 to support the employment of 30 additional 
     agents of the Federal Bureau of Investigation and 2 
     additional dedicated prosecutors at the Department of Justice 
     to coordinate prosecution of mortgage fraud efforts with the 
     offices of the United States Attorneys; and
       (2) $750,000 to support the operations of interagency task 
     forces of the Federal Bureau of Investigation in the areas 
     with the 15 highest concentrations of mortgage fraud.
       (b) Authorization of Appropriations for the SEC.--There are 
     authorized to be appropriated to the Securities Exchange 
     Commission, [the Federal Bureau of Investigation, and the 
     Department of Justice] such sums as are necessary for 
     activities to uncover address mortgage fraud.

     SEC. 303. LIMITATIONS ON GSE SECURITIZATION AUTHORITY.

       Part 2 of subtitle A of the Federal Housing Enterprise 
     Financial Safety and Soundness Act of 1992 (12 U.S.C. 4541 et 
     seq.), as amended by the Housing and Economic Recovery Act of 
     2008 (Public Law 110-289) is amended by adding at the end the 
     following new section:

     ``SEC. 1327. LIMITATIONS ON GSE SECURITIZATION AUTHORITY.

       ``(a) Prohibition.--The director shall, by regulation, 
     prohibit each enterprise from issuing, guaranteeing, or 
     selling securities based on or backed by mortgages described 
     in subsection (b).
       ``(b) Covered Mortgages.--The mortgages described in this 
     subsection are
       ``(1) mortgages commonly known as Alt-A or Alternative A-
     paper mortgages, as defined by the Director, which shall 
     include mortgages that the Director determines to have an 
     increased level of credit risk due to borrower's not meeting 
     traditional or standard underwriting guidelines, including 
     guidelines with respect to--
       ``(A) documentation of amount or source of income or 
     assets;
       ``(B) debt-to-income ratio;
       ``(C) assets and type of property being financed;
       ``(D) credit history;
       ``(E) loan to value ratios; and
       ``(F) occupancy of the property being financed or borrower 
     characteristics involved; and
       ``(2) mortgages having characteristics that are not typical 
     of the lending practices of the mortgages that are made to 
     comply with a provision of Federal or State law or 
     regulation.''.

     SEC. 304. COMMISSION REGULATIONS RELATING TO ASSET-BACKED 
                   SECURITIES FOR PURPOSES OF NRSRO RATINGS.

       (a) NRSRO Asset-Backed Securities.--Section 3(a)(62)(B)(iv) 
     of the Securities Exchange Act of 1934 (15 U.S.C. 
     78c(a)(62)(B)(iv)) is amended by striking ``as in effect on 
     the date of enactment of this Act'' and inserting ``, 
     including NRSRO asset-backed securities approved by the 
     Commission and listed in such section.''.
       (b) Revision of Regulations.--Not later than 180 days after 
     the date of enactment of this Act, the Securities and 
     Exchange Commission shall revise the regulations in section 
     1101(c) of part 229 of title 17, Code of Federal Regulations, 
     relating to the term ``asset-backed securities'' for purposes 
     of section 3(a)(62)(B)(iv) of the Securities Exchange Act of 
     1934 (15 U.S.C. 78c(a)(62)(B)(iv)). The revisions required 
     under this subsection shall--
       (1) define a subset of asset-back securities to be referred 
     to as ``NRSRO asset-backed securities'', which shall be the 
     only asset-backed securities for which a credit rating agency 
     may register and issue ratings as a nationally recognized 
     statistical rating organization and, which shall be 
     restricted to securities representing interests in pools of 
     assets whose performance can be evaluated based on a 
     documented history of predictable performance of similar 
     assets and which are contained in structures which also have 
     a documented history of predictable performance; and
       (2) include a list of the classes of securities approved as 
     NRSRO asset-backed securities pursuant to subsection (c).

     Nothing in this subsection shall be construed so as to limit 
     any credit rating agency from rating asset-backed instruments 
     which are not designated as ``NRSRO asset-backed securities'' 
     so long as such credit rating agency makes it explicit that 
     such instruments are not NRSRO asset-backed securities and 
     the associated ratings are not issued pursuant to its status 
     as a nationally recognized statistical rating organization.
       (c) Approval Process for NRSRO Asset-Backed Securities 
     Classes.--
       (1) Initial fast-track approval.--Not later than 90 days 
     after the date of enactment of this Act, the Securities and 
     Exchange Commission shall establish an initial list of 
     classes of securities approved as NRSRO asset-backed 
     securities.
       (2) Subsequent approval.--After the approval of the initial 
     list of classes of NRSRO asset-backed securities under 
     paragraph (1), the Commission shall approve additional 
     classes of asset-backed securities as NRSRO asset-backed 
     securities on an ongoing basis.
       (3) Procedure.--The Commission shall approve a securities 
     class as NRSRO asset-backed securities only--
       (A) upon the application (in such form determined by the 
     Commission) of a nationally recognized statistical rating 
     organization concerning a specific class of asset-backed 
     securities;
       (B) after receiving comment from Federal and State 
     regulators of institutions or entities reasonably expected to 
     seek funding from or invest in such class of securities, 
     including the Federal Reserve System, the Office of the 
     Comptroller of the Currency, the Office of Thrift 
     Supervision, the Federal Deposit Insurance Corporation, the 
     Pension Benefit Guaranty Insurance Corporation, and State 
     banking insurance authorities; and
       (C) after any other investigation and due diligence the 
     Commission determines to be necessary to evaluate the 
     proposed NRSRO asset-backed securities class's compliance 
     with the standards described in paragraph (4) prior to 
     granting their approval.
       (4) Standards for approval of NRSRO asset-based 
     securities.--Approval of a class of securities as an NRSRO 
     asset-backed securities class shall be limited to those 
     securities whose future performance meets the standard of 
     `reasonably predictable'. At a minimum, a determination of a 
     reasonably predictable performance standard shall require--
       (A) a sufficient history of performance data, from a 
     diverse base of sponsors spanning at least 1 complete 
     economic cycle for both the collateral assets or reference 
     assets and the structure so as to generate reasonably 
     accurate statistical estimates of future performance;
       (B) the ability to aggregate pools of the collateral assets 
     or reference assets of sufficient size to generate reasonably 
     accurate statistical estimates;
       (C) the existence of contracts for such collateral asset 
     product which are sufficiently

[[Page 22925]]

     standardized to generate reasonably accurate statistical 
     estimates; and
       (D) sufficient standardization of service quality and 
     procedures for such collateral asset product to generate 
     reasonably accurate statistical estimates. Securities that 
     fail to meet 1 or more of conditions set forth in 
     subparagraphs (A) through (D) shall not qualify for 
     eligibility as NRSRO asset-backed securities or ratings.

     SEC. 305. QUALIFICATIONS FOR REGISTRATION.

       Section 15E of the Securities Exchange Act (15 U.S.C. 78o-
     7) is amended--
       (1) in subsection (c), by redesignating paragraph (2) as 
     paragraph (3) and inserting after paragraph (1) the 
     following:
       ``(2) Review of ratings and cooperation with commission.--
     In order to maintain its registration and the integrity of 
     the NRSRO ratings system, a nationally recognized statistical 
     rating organization shall annually review all ratings issued 
     and outstanding in obligor categories for which it has 
     registered, with such review to result in a formal re-rating 
     affirmation, upgrade, downgrade or ratings removal. Each 
     nationally recognized statistical rating organization shall 
     provide the Commission with full access to models, 
     documentation, assumptions and performance data upon request, 
     shall answer all questions and queries posed by Commission on 
     a timely basis, and otherwise cooperate with any Commission 
     investigation''.
       (2) in subsection (d), by striking `The Commission' and 
     inserting
       ``(1) In general.--The Commission.''.
       (3) by redesignating paragraphs (1) through (5) as 
     subparagraphs (A) through (E), respectively; and (4)
       (4) by adding a new subparagraph (F) as follows:
       ``(F) has, in the course of an investigation into the 
     integrity of its NRSRO ratings caused the Commission to 
     believe that a suspension or revocation of its NRSRO 
     registration is in the public interest.''.
       (5) by adding at the end the following:
       ``(2) Determination and examination by commission.--In 
     assessing whether a nationally recognized statistical rating 
     organization is consistently producing credit ratings with 
     integrity for purposes of paragraph (5), the Commission shall 
     determine whether ratings are issued with the expectation of 
     meeting aggregate historical loss and default standards for 
     given ratings levels across all categories for which a credit 
     rating agency has registered under this section. In the case 
     of a nationally recognized statistical rating organization 
     which has registered for a category or categories for which 
     its ratings experience covers less than a full economic 
     cycle, the standards shall be consistent with industry norms 
     for such category or categories. Additionally, as part of the 
     ongoing qualification of NRSROs, adherence to the foregoing 
     provisions shall be evaluated through the Commission's 
     regular surveillance of NRSRO models, systems, assumptions 
     and performance.''.

     SEC. 306. FINANCIAL STATEMENT REVIEW.

       (a) In General.--The Securities and Exchange Commission 
     shall--
       (1) review any financial statements required under section 
     13 of the Securities Exchange Act of 1934 (15 U.S.C. 78m) of 
     any rescued issuer for the rescued issuer's fiscal year 2005 
     and each succeeding fiscal year up to and including the 
     fiscal year in which such issuer became a rescued issuer; and
       (2) examine each of the audits that were the basis of such 
     financial statements, and all the supporting books, papers, 
     correspondence, memoranda, or other records or materials on 
     which such audits were performed.
       (b) Additional Action.--The Commission shall--
       (1) if the Commission determines there was a material 
     misstatement made in any financial statement reviewed under 
     subsection (a), require the issuer to file with the 
     Commission a financial statement correcting such 
     misstatement; and
       (2) take all other appropriate actions under the Securities 
     Exchange Act of 1934 (15 U.S.C. 78a et seq.).
       (c) Definition.--For purposes of this section, the term 
     ``rescued issuer'' means any issuer (as such term is defined 
     in section 3(a)(8) of the Securities Exchange Act of 1934 (15 
     U.S.C. 78c(a)(8)) that has received, prior to the date of 
     enactment of this Act, Federal Government intervention 
     through sale negotiation assistance, loan guarantee, 
     placement under conservatorship or receivership, or other 
     assumption of the management, governance, and control of the 
     issuer by the Department of the Treasury or the Board of 
     Governors of the Federal Reserve, an emergency loan of public 
     funds made to the issuer by the Department of the Treasury or 
     the Board of Governors of the Federal Reserve, or other 
     similar Federal Government intervention.

     SEC. 307. COMPENSATION ADJUSTMENT.

       (a) Compensation Adjustment Due to Government 
     Intervention.--
       (1) In general.--An officer of an institution shall pay to 
     the Department of the Treasury any amounts received by such 
     officer during a year as a bonus or other incentive-based or 
     equity-based compensation from the institution during--
       (A) a year in which the institution is subject to a 
     government intervention; and
       (B) the two years prior to a year in which the institution 
     is subject to a government intervention.
       (2) Compensation adjustment defined.--For purposes of this 
     subsection, and with respect to an issuer, the term 
     ``government intervention'' means--
       (A) the placement of the issuer under conservatorship, 
     receivership, or other assumption of the management, 
     governance, and control of the issuer by the Department of 
     the Treasury or the Board of Governors of the Federal 
     Reserve; or
       (B) an emergency loan of public funds made to the issuer by 
     the Department of the Treasury or the Board of Governors of 
     the Federal Reserve, if the Chairman of the Board of 
     Governors of the Federal Reserve determines that such a loan 
     is necessary to prevent the imminent failure of the issuer.
       (b) Effective Date.--This compensation adjustment shall 
     take effect on enactment of this Act, and shall have no 
     effect after September 30, 2009.

     SEC. 308. SUSPENSION OF MARK TO MARKET ACCOUNTING.

       The Securities and Exchange Commission shall have the 
     authority under the securities laws (as such term defined in 
     section 3(a)(47) of the Securities Exchange Act of 1934 (15 
     U.S.C. 78c(a)(47)) to suspend, by rule, regulation, or order, 
     the application of Federal Accounting Standard 157 for a 
     period of up to [xxxx] for any issuer (as such term is 
     defined in section 3(a)(8) of such Act) or any class or 
     category of issuer.

  Ms. SLAUGHTER. I yield back the balance of my time, and I move the 
previous question on the resolution.
  The SPEAKER pro tempore. The question is on ordering the previous 
question.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Mr. DREIER. 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, further 
proceedings on this question will be postponed.

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